Monday, December 22, 2008

Democratic Business Can Save Our Economy

We are on the verge of the second worst (if not the worst) economic times in the history of our country. The best suited organizations to weather these times will be democratic organizations.

Suppose that Company A and Company B each have 3000 employees. Company A's citizens own 70% of the company. Company B is owned by the founder and two investment firms. Company A only has three layers of management and most of the company decisions are made by the citizens themselves. Company B has eight layers of management and the only time anyone knows about company decisions is when they read about them in the weekly memo.

What will happen when times become tough in the industry? Which company's citizens will take a voluntary pay cut? Which company will increase our nation's unemployment rate? Which company's citizens will work through the night for an entire month to make sure the company stays afloat? and Which company will survive?

You can be assured that many sacrifices will be required of American citizens during the coming years. A lot of us will be tested to our limits. If our businesses, communities, and country are important enough to us we will decide to endure. Our collective decisions will determine the future of our country.

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How Will You Measure Your Life?

I recently read this article by Clayton Christiansen out of Harvard entitled, “How will you measure your life?” It is what he tells his students on the final day of his class.

One of the items that he mentions sticks out to me. It reads as follows:

“One of the theories, . . . . . how to be sure we find happiness in our careers—is from Frederick Herzberg, who asserts that the powerful motivator in our lives isn’t money; it’s the opportunity to learn, grow in responsibilities, contribute to others, and be recognized for achievements. I tell the students about a vision of sorts I had while I was running the company I founded before becoming an academic. In my mind’s eye I saw one of my managers leave for work one morning with a relatively strong level of self-esteem. Then I pictured her driving home to her family 10 hours later, feeling unappreciated, frustrated, underutilized, and demeaned. I imagined how profoundly her lowered self-esteem affected the way she interacted with her children. The vision in my mind then fast-forwarded to another day, when she drove home with greater self-esteem—feeling that she had learned a lot, been recognized for achieving valuable things, and played a significant role in the success of some important initiatives. I then imagined how positively that affected her as a spouse and a parent. My conclusion: Management is the most noble of professions if it’s practiced well. No other occupation offers as many ways to help others learn and grow, take responsibility and be recognized for achievement, and contribute to the success of a team. More and more [people think] that a career in business means buying, selling, and investing in companies. That’s unfortunate. Doing deals doesn’t yield the deep rewards that come from building up people."

I’m sure you can see why it sticks out.