The Power of Stories: We Were Made to Be Free Cont.

Stories have the power to guide companies, organizations, and people to elevated levels of engagement. Here is a story that engages me to fight for democratic workplaces:

"Three stone cutters were asked about their jobs. The first said he was paid to cut stones. The second replied that he used special techniques to shape stones in an exceptional way, and proceeded to demonstrate his skills. The third stone cutter just smiled and said: "I build cathedrals."

How much more happy, and productive would our companies be if we made it our first priority to engaged people in a euphoric purpose.

(Quote taken from Ricardo Semler in the book Maverick)

"...We Will See the Day When We Live on What We Produce" -- Marion G. Romney

Every year, Americans import $731.214 billion of goods more than they export. If foreign trade stopped, we would be forced to consume less than half of what we currently consume. This is the root cause of our current "economic" problems.

In order to buy almost 60 percent more than we produce, we have accepted loan after loan from foreigners. Currently 45 to 50 percent of our federal debt held by the public (the debt issued to fund annual, federal deficits) is owned by foreigners. 70 percent of all our new debt is being purchased by foreigners. This is the equivalent of mortgaging a cow to a stranger to buy more milk.

What is the solution to our problem? Stop mortgaging the American cow, and drink less milk. It appears that foreigners will force us to do just that. For the first time, foreigners are curbing their appetite for American IOUs, and soon, we will be forced to consume what we produce and pay down our $56 trillion mortgage for many years to come.

(Statistics taken from government websites and former U.S. Comptroller David Walker)

Our Current Economic Problems Are Only the Tip of the Iceberg

A Company that Let's Employees Choose their Own Pay?

How do you turn a near bankrupt company around and make it one of the fastest growing companies in the country? How do you create one of Microsoft's "best schools in the world"?

The answer is high expectations and near unadulterated freedom (ee.gg., allow employees to choose their own pay, and allow children to choose whether or not they attend school)

Watch this clip and be AMAZED!
http://www.youtube.com/watch?v=gG3HPX0D2mU

We Should Learn about Democracy from the Chinese

There is very little authoritative difference between a government and a bank. To understand that all centralized power is dangerous and should be democratized is to understand that centralized economic power (like political power) must be democratized and must serve the entrepreneurs that create wealth.

In the same way that the Federal government and State governments are supposed to serve the people, the Federal Reserve, local banks, and Wall Street must serve entrepreneurs. The benefit of these institutions is to provide funding and diversify the risk to entrepreneurs. Arguing that free market policy should apply to Wall Street, the Federal Reserve, and local banks is as silly as saying that the Federal Government should be free to make it's own rules.

The best, current example of a democratic economy is the Chinese economy. While the Chinese are politically oppressed, their democratic economy is inspiring entrepreneurs and creating the fastest, sustainable economic growth ever seen. Maybe we can learn a thing or two about democracy from the Chinese.

Democracy & Valentine's Day

I know it is a stretch to find a link between democracy and Valentine's day. I decided I wanted to write a post about my wife and I needed a justification for putting it on a blog about democratic business--so bare with me while I attempt to link the two:

My wife is a lot of the reason I have an optimistic outlook on life. Spending time with her makes me realize that even though an oligarchical Wall Street is destroying our economy and will make a profit at the expense of individual rights, there is a lot of reason to have hope in humanity.

I have learned, from my wife, how important it is to nurture the goodness in people. I see her with our son and it is all too obvious to me how much greater this world would be if more women were given the voice they deserve.

My wife has taught me the importance of the democratic principle of keeping my sights fixed on a euphoric purpose. We have so much fun together. I can't think of a day of our marriage when we haven't laughed together at least once. Our common goals and ambitions inspire me to making our marriage great and not simply good.

Being married to my wife has taught me that the principles of democracy (i.e., transparency, limited power, ownership, and euphoric purpose) are just as important to every aspect of life as they are to government.

The Power of Stories: We Were Made to Be Free

Stories have the power to guide companies, organizations, and people to elevated levels of engagement. Here is the number one story that engages me to fight for freedom and democracy:

"That Satan...is the same which was from the beginning, and he came before me, saying—Behold, here am I, send me, I will be thy son, and I will redeem all mankind, that one soul shall not be lost, and surely I will do it; wherefore give me thine honor.

But, behold, my Beloved Son...said unto me—Father, thy will be done, and the glory be thine forever.

Wherefore, because that Satan rebelled against me, and sought to destroy the agency of man, which I, the Lord God, had given him...I caused that he should be cast down;

And he became Satan, yea, even the devil, the father of all lies, to deceive and to blind men, and to lead them captive at his will..." (Moses 4:1-4)

High-Engaged Workers Are 7 Times More Profitable Than Low-Engaged Workers

In 2006, Gallup estimated that disengaged employees cost the American economy $350 billion per year. A study done by Kenexa Research Institute found that of 4,000 worldwide companies, the top 25 engaged workplaces outperformed the 25 lowest engaged businesses 7-to-1--based on shareholder return, on a five-year basis.

If engaging employees is the driver of productivity, what can a company do to engage its workers? Kenexa Research Institute suggests that there are four main drivers that help create engagement in the workplace:

(1) "Leaders who inspire confidence in the future of the organization."
(2) "Managers who respect and recognize employees."
(3) "Employees are inspired and engaged by exciting work that they know how to do."
(4) "Employees are inspired by organizations that demonstrate genuine responsibility to two critical stakeholders groups: employees and communities."

It may seem counterintuitive that putting engagement above productivity leads to greater productivity until you realize that engagement is what creates productivity. Maybe the answer to our economic crisis is not to create more money, but to engage the American workforce.

(Information from http://www.kenexa.com/getattachment/8c36e336-3935-4406-8b7b-777f1afaa57d/The-Impact-of-Employee-Engagement.aspx)

Glenn Beck: "This Is Real Trouble...Perhaps In The Next Year"

David M. Walker: A Voice of Warning to American Democracy (2007)

Surviving on 3 Months Wages in 2009 and 2010

Glenn Beck reported on 1/21/2009 that the Treasury has increased the money supply by 70 per cent since October.

"I talked to Steven Moore at the Wall Street Journal and he talked to the Treasury. It looks like we have increased the money supply by 70% since October. They're running these presses 24 hours a day. The effects of this, you're saying, will destroy the currency, so then, what happens?"

So then, what does happen to you and I? When this newly printed money trickles down to you and I (probably by 2010), the $50,000 salary you made last year, and that you make this year, will each be worth only $29,412. That is the same as the government taxing you 41% or $20,588 two years in a row and taxing all of your savings. No matter how much you made in 2008 and make in 2009, you will give all the money you made and make, from January to mid-September 2008 and 2009, to the government. This does not even include the cost to you of the $1.9 trillion in bailouts.

How does the government expect you and I and our businesses to survive in 2009 and 2010 on three and a half months of wages? How much more will the Treasury increase the money supply? How can the government take our money to restore the banking system without destroying the rest of us? Who will bail out the rest of us?

April 29, 2007

My Ideal Company

My ideal company would have...

(1) a media department to help employees focus on the euphoric purpose of the company and to maintain transparency in the company
(2) the option of employee ownership
(3) one optional, paid hour per day allocated to employee fitness
(4) twenty optional, paid hours per year allocated to service projects of the employee's choice
(5) a one-year term for managers
(6) weekly personal-progress interviews

Nothing to Fear, But No Health Care

We have never needed democracy more than we do now. We need to democratize (not socialize) our government, democratize our health care companies, and democratize our businesses.

"Fifty million Americans are without health insurance, and 25 million are “underinsured.” Millions being laid off will soon be added to those rolls. Medical bills cause more than half of personal bankruptcies in the U.S. Desperate for care, the under- and uninsured flock to emergency rooms, often dealing with problems that could have been prevented." -- Amy Goodman of Democracy Now!

My Latest Letter to Obama

The U.S. is a democracy; yet, the dominant corporations of our time are run like oligarchies. Throughout U.S. and world history, this contradiction of oligarchies within a democracy has proven costly to lives, tax dollars, and many of our freedoms. A tax cut to organizationally democratic corporations will save and make the government billions of dollars a year and will recruit the talent needed to get us out of this economic crisis.

Corporations are legally obligated to put the interests of shareholders above all competing interests; when corporations are not organizationally democratic, the interests of the majority are often overlooked. Corporations have overlooked the interests of the majority...

(1) by evading between $250 billion and $300 billion in taxes per year. As a result, you and I pay 15% more in taxes every year--according to PBS Frontline. When corporations' financials are not transparent, the pressure to follow the crowd and use tax shelters to evade taxes is constantly present.

(2) by not making health coverage affordable. Wal-Mart and other corporations have encouraged their employees to apply for government health care assistance--instead of making medical coverage affordable. Government health care assistance costs the government billions of dollars.

(3) by outsourcing jobs to foreign countries. Billions of tax dollars have been lost to outsourcing.

(4) by paying CEO's 866 times more than minimum wage employees. That number has increased from 51 times in 1965--according to faireconomy.org. When corporations create many layers of management, the higher up managers receive large compensations at the expense of lower paid employees. However, when times get tough, having a large number of managerial layers ensures that layoffs will occur, and higher paid managers are consistently the ones laid off. Unemployment and low wages cost the government billions of dollars in relief.

(5) by underpaying their employee's pension plans. In 2006, PBS Frontline reported that corporations were underpaying their employee's pension plans by $450 billion. As you may know, in 2006, the government agency, P.B.G.C., was already in a $23 billion debt. The government can't afford to guarantee all of these and future pension plans that are dumped on the government during corporate bankruptcy.

(6) by constantly violating the law. In the 1990's, large corporations were sued for hundreds of millions of dollars for attempting to pass off costs and obligations to an unaware or unwilling public: (1) Exxon pled guilty to criminal charges related to the Valdez oil spill and paid $125 million (2) GE was guilty of defrauding the federal government and paid $9.5 million (3) Chevron was guilty of environmental violations and paid $6.5 million (4) Mitsubishi was guilty of anti-trust violations and paid $1.8 million (5) IBM was guilty of illegal exports and paid $8.5 million (6) Pfizer was guilty of anti-trust violations and paid $20 million (7) Odwalla was found guilty of food and drug violations and paid $1.5 million (8) Sears was guilty of financial fraud and paid $60 million. (Read about 1,000's of more violations at multinationalmonitor.org). The cost to the government for all unprosecuted violations is probably in the billions.

(7) by creating unfulfilling workplaces. In 2006, Gallup estimated that disengaged employees cost the American economy $350 billion per year. The lost tax-dollar revenues are also in the billions.

In contrast, organizationally democratic corporations are proactively transparent, offer ownership to all employees, and have very few layers of management (in proportion to number of workers).

During this information age, many corporations such as, Southwest Airlines, Great Harvest, 1-800-GOT-JUNK, the GE plant that produces Air Force One engines, DaVita, The Container Store, and Whole Foods (to name a few) are moving towards this new, democratic corporate structure. Not only does this new, democratic corporate structure attract the best talent in the U.S., but these corporations save and make the U.S. government millions of dollars. A tax cut to organizationally democratic corporations would encourage more corporations to become democratic. More organizationally democratic corporations would attract the necessary talent to pull us out of this financial crisis and save and make the government billions of dollars.

The largest obstacle for identifying organizationally democratic corporations will be to create a standard to determine which corporations are organizationally democratic and which one's are not. A consulting company called World Blu (worldblu.com) currently has a score card to identify organizationally democratic corporations. If you have any questions, visit my website at democraticbusiness.blogspot.com and make a comment.

The Bailout: Borrowing Without a Plan

Politicians and economists call it "pumping money into the economy". I call it borrowing without a plan to repay. If I have a failing business, $175,000 in debt, and I ask you for money to save my business, wouldn't the logical question be, 'How am I going to pay that money back?'

Today, I watched an economic discussion about the bailout on MSNBC. Only one person ever brought up the question, "How are we going to pay this money back to the countries that are buying our debt?" The Chinese and the other countries--that are buying our debt--are asking this question for the first time. It is time that we give them an answer, or they may walk away.

The U.S. currently has a $53 Trillion debt. That means that every person alive today and every child born today inherit over a $175,000 mortgage. How are we going to pay that mortgage back? The truth is, we haven't put down our credit cards long enough to answer that question. One thing is for sure, we WILL pay it back when our creditors demand. There is no such thing as Chapter 11 bankruptcy in the real world.

Synopsis by MSNBC of the Bailout:

Stimulus package from February 2008---------------- $168 Billion
Fannie Mae, Freddie Mac------------------------------- $200 Billion
AIG-------------------------------------------------------- $122.8 Billion
Financial Bailout (TARP)
(Auto Bailout Component= $17.4 Billion)------------- $700 Billion
Obama Plan---------------------------------------------- $775 Billion
_______________________________________________________
Total------------------------------------------------------ $1.9 Trillion

What Are the 3 Biggest Obstacles to Democratizing the World's Workplaces?

Traci Fenton speaks at least weekly with CEOs of companies that will potentially use her consulting services to democratize their organizations. In a conversation I had with Traci Fenton (CEO of WorldBlu), she identified the three biggest obstacles to democratizing the workplaces of the world:

(1) Many people do not realize that there is a better alternative to oligarchical businesses.

(2) Many people are not willing to give up the feeling of control over their businesses.

(3) Many people are, simply, greedy.

Sounds pretty overwhelming. We are seeing, however, that the biggest obstacles are not as big as the biggest drivers of democratizing the workplaces of the world. Here are the reasons:

(1) The people of the world are beginning to think less of themselves as national citizens and more of themselves as world citizens.

(2) The information age is democratizing even the most undemocratic nations of the world.

(3) Oligarchical companies are losing the most talented people to democratic companies (e.g., computer technology industry vs. banking industry).

(4) More and more people are realizing that the current capitalist system has not benefited the majority of the world; yet, communism is no longer a widely attractive alternative.

How To Change Our Failing Businesses

Every day we hear about change: change on Wall Street, change in Iraq, change in Palestine, change in the car industry, and change in health care...Whether we speak of a country, a company, or an organization, how does successful, long-lasting change occur?

Ricardo Semler (CEO of Semco) put it this way, "How do you get a sizable organization to change without telling it--or even asking it--to change? It's actually easy--but only if you're willing to give up control. People, I've found, will act in their best interests, and by extension in their organization's best interests, if they're given complete freedom. It's only when you rein them in, when you tell them what to do and how to think, that they become inflexible, bureaucratic, and stagnant. Forcing change is the surest way to frustrate change." (harvardbusinessonline article)

What a completely counter intuitive statement. If we want a country, a company, or an organization to change, we give back, to the people, the power and control to change themselves; then, we get out of the way. Actually, it makes a lot of sense. So long as people feel that they have control, there is nothing to rebel against, and they act in their best interests and their organization's best interest.

How Do We Respond to the Current Economic Conditions?

Fast Company recently asked the author of Good to Great (7 million copies sold), Jim Collins, "What does your research suggest about the best way to respond to the current economic slowdown?"

He answered, "If I were running a company today, I would have one priority above all others: to acquire as many of the best people as I could. I'd put off everything else to fill my bus. Because things are going to come back. My flywheel is going to start to turn. And the single biggest constraint on the success of my organization is the ability to get and hang on to enough of the right people."

Is it safe to say, then, that the economy is in trouble because the largest corporations in the U.S. do not have the right people to make the right decisions? Why have many of the largest companies in America not been able to "hang on to enough of the right people"?

In an industry of nearly 100% turnover annually, the Container Store's turnover is 18% annually. Not only does the Container Store hang on to the right people, but, the Container Store has been on Fortune's list of The Best Companies to Work For since 2000; twice, the company has been number one. One employee boasts that she turned down a job at the World Bank to work for the Container Store. The Container Store is able to "get and hang on to enough of the right people" because they have created a democratic company.

A quick evaluation of all The Best Companies to Work For demonstrates that "the ability to get and hang on to the right people" is a matter of company structure and company culture. The current economic times are not the result of bad debt. They are the result of a rejection by the latest generation of workers in America and the result of many large companies' inability to "get and hang on to enough of the right people."

Why Is Democratic Business the Obvious Solution to Me?

Yesterday, I attempted to explain why democratic business is so important to me as a solution to the majority of the temporal problems in the world. The answer is that my life experiences have molded my perspective:

I grew up in an affluent section of a big city. The benefits of capitalism constantly surround me.

I have attended church all my life. I was blessed with a heavy conscience and a reverence for human potential.

I have started my own business. After I spent months proving that the business concept was equitable, my financer demanded 90% of the business. I shut down the operations because I could not survive on 10% of the profits.

My father is an entrepreneur. He started two successful businesses. He and I have engaged in hundreds of hours of discussions about his day-to-day business concerns.

I have lived among the people in Brazil. I know what it feels like to look at the U.S. from the outside in. I have survived on one meal a day for multiple months, experienced diseases and ailments foreign to Americans, feared for my safety at the hands of local police, drunk brown water to quench my thirst, and fought off thieves to protect what little I had.

I have lived in Hawaii and learned of its history. I have visited the Dole plantation and I have learned from the Locals how the U.S. reluctantly annexed Hawaii after corporations forcibly removed Queen Lili'uokalani--a queen loved by her people and dedicated to nonviolence--in order to protect their business interests. I have seen the resulted poverty that effects so many natives on the islands.

I have a degree in business management with an emphasis in entrepreneurship. I have studied the Nash equilibrium, laissez-faire capitalism, and other theories that help "businessmen" justify greedy business practices. At the same time, I have learned about the successes of Muhammad Yunus, Fabio Rosa, Albina Ruiz, and many other heroic entrepreneurs that add value to the world and not just to their pocket books.

I have a minor in Spanish with an emphasis in Latin American studies. I have studied the literature of Pablo Neruda, Gabriel García Márquez, Gabriela Mistral, García Lorca, Octavio Paz, and the hundreds of other literary leaders that dedicated much of their lives and writings to fight corruption and inequality.

My collective experiences have offered me the motivation to search for a better alternative to the dominant and dominating institution of our time. I have come to realize that I would be selfish not to do all that I can to act upon those things I know to be true for the sake of those who don't know that there is a better alternative. For this reason, democratic business is so important to me.