...the rank and file gets nothing but the short end of whatever stick is available. Whether it's layoffs or excessive CEO pay, the hardworking folks that really do the work end up with the shaft.
I had lunch last week with my old friend Jim. I hadn’t seen him in two years, and it was a great chance to catch up. The food was great. The rest of lunch was pretty dismal.
Jim works for a big New York conglomerate. He’s 50 years old. Got another 25 years of good work left. And he hates his job. He’s stuck. He’s doing exactly what he was doing the last time we had lunch. He spends most days counting how long before he can afford to retire—a number that, thanks to the stock market meltdown, just got a lot bigger.
Five years ago, Jim had a dream job, the sort we all envied, the kind we saw profiled in one magazine after another. Now, that very same job feels like a trap.
The big lie of the new economy is that everyone could live the life of an entrepreneur without actually being one.
We bought the idea that all the good stuff that people look for from an organization—job security, benefits, vacations, the safety of being able to blame your boss when things don’t go well—could be accompanied by the rush of fast growth and the heady feeling we get when the bureaucracy gets out of the way and we get to discover what we can really accomplish.
We lionized the 28-year-olds who were pioneering new products or launching new divisions. We envied the lucky (but not particularly skilled or risk-taking) middle managers who made a fortune with stock options. We called ourselves intrepreneurs, smiling because we were getting the best of both worlds.
Wrong. Very wrong. Wrong because we missed two big ideas.
The first idea is that big companies are fundamentally broken. Big companies are big companies because they’re very good at doing yesterday’s business. They can make (and sell) their stuff faster and cheaper than the competition because they’ve gotten good at making and selling their existing products.
The problem is that when the world changes (and it is changing faster than ever) being good at yesterday’s business isn’t just useless, it’s a liability. All those big companies are sweating now, because the infrastructure they built is about as useful as the Maginot Line—it’s obsolete. Penguins like cold weather. When it gets warm, they’re stuck. The finely tuned machinery they developed for one environment won’t work so well in a new environment.
The second idea is that the stock market has been broken for just as long. The stock market is a huge mass-psychology scam, dependent on the fiction that there will always be someone stupider than you, willing to buy those shares for more than you just paid.
A key part of this scam is the generally agreed upon principles that investors seek. At the center of those principles is the idea that big companies with predictable earnings are likely to continue to grow and thrive. This used to be true, of course, but in a chaotic world, it’s proven wrong every single day.
The bottoming out that we’re living through is a direct consequence of these two ideas becoming very clear to us at precisely the same time. Big companies can’t keep growing forever at 20% a year perfecting yesterday’s business, but the stock market didn’t want to hear about that. So the big companies, with the direct encouragement of the accounting firms, lied about their results (yeah, lied is a strong word, but that’s what it’s called when you don’t tell the truth).
All along, while we were giddy at the huge expansion we all enjoyed, we were missing the real point. And now we’re paying for it.
The other day, I took my son to see Steve Jobs give his annual keynote at the MacWorld Expo in New York. He sat transfixed for hours, amazed at the energy and insight and enthusiasm Steve brought to the podium. I mean, Steve was acting like he owned the place.
Of course, he does own the place. And that’s the most important lesson I think we can take away from the nausea of the last two years.
Apple introduces great products on a regular schedule. Contrast the magic of the iPod or dot Mac or Final Cut Pro with the sheer banality of most of what passes for innovation in big business. Other technology companies introduce services they expect to become profitable monopolies. Apple introduces things they’re proud of.
Steve isn’t trying to make the stock price go up. He’s not trying to keep his current infrastructure busy or please his dealers. He’s making stuff he believes in. He’s continuing the legend. It’s the happy coincidence of his ego and our needs.
Of course, that’s only true when it’s true. The rest of the time, Apple makes products that fail, that don’t excite, that don’t make a profit. For almost thirty years, though, there have been just enough wins to pay for the losses. He’s a hero. A model for millions.
What if everyone had guts like that? What if everyone reading this article realized that the point of our careers (2,000 hours a year, 50 years in a row, that’s 100,000 hours of work) isn’t to crank out yet another widget? What if, just maybe, we quit making stuff and started making a difference?
The giant secret of the new economy was this: entrepreneurs momentarily got a free (and fast) ride to wealth via the stock market. That connection is temporarily over, but the basic idea behind entrepreneurship is stronger than ever. In a time of rapid change, the best organizations are small and fast, and the people who run them have a chance to make an impact that will last.
It’s not a coincidence that one of the byproducts of the technology revolution is the death of the factory. With all the publicly available infrastructure (from cell phones to email to Kinkos to outsourcing in Thailand) there’s really no reason at all to build a big company any more. And since big companies are no more profitable than little ones, it’s the little ones that are most likely to spring up, make a difference and then (without tears) disappear, only to reappear some other time, some other place.
This is hard to swallow for a lot of people. We grew up with parents who read Time or Forbes, not Inc. Our role models weren’t crazed entrepreneurs, on a mission from god to accomplish something or go bust trying. We don’t see ourselves wearing those shoes. Why can’t the world just settle down and let us get some rest?
Alas, the world isn’t going to settle down. The desire for safety is understandable, but it’s being overwhelmed by Moore’s Law, by globalization, by competitive desire. I’m sorry if you’ve made it two-thirds of the way to retirement, but, alas, the world got crazy on us.
The dot coms that failed in a big way all had one thing in common—they tried to use money to insulate themselves from external change. They tried to buy success, to buy bigness, to buy stability. You can’t, no matter how big you are.
As long as you work for someone, you have no job security. As long as your company is public, your future is in the hands of others—people who are likely not as smart as you are. And as long as you follow the instructions of others, you won’t be fulfilling your destiny of really and truly making a difference in the way people live and work.
How much time do you spend every day worrying about how fulfilled and happy the CEO is? How much do you invest to be sure she’s got a secure job? Big news: your CEO spends precisely the same amount of time worrying about you.
I want you to do something for you. I’m begging you. It’ll only take a few minutes, but I think you might enjoy it.
Imagine for a second that you just lost your job. Further, imagine that the industry in which you’ve been trained and are working in has just disappeared.
What are you going to do? Are you going to go out and look for another job? A job at an Enron or a Worldcom? Or at a big bureaucracy with 100 people working in accounts payable and a budget for strategy consultants of several million dollars a year?
What if there were no choice... what if you had to start something? Anything. What would it be?
You don’t need a good idea to start a business—you can steal one. Find someone in another town, another state, another industry—and do what they’re doing. Once you get started, your original idea is going to be replaced anyway. Smart entrepreneurs don’t stick to the original business plan. You’ll realize that every day is another day closer to success, and changing the plan is part of the plan.
The best part of this exercise is when you realize that you are smart enough, motivated enough and focused enough to actually do this. That once you decide that you could actually run the place, you’ll realize that no other option is as satisfying.
Quit your job. Right now*. Stop doing something that’s crazy, risky and ill-considered. (Your current job is all three). Stop working for the factory and start building something that people will remember.
Here’s the crux of the matter: organizations where the people doing the work are the very same people who are making the decisions are more likely to succeed in the long run. Just about all the sins of American business (from environmental despoliation to accounting fraud) can be pinned on the anonymous bureaucracy. Entrepreneurs can’t be anonymous—it’s your decision, your policy, your work, your business—and so you’re fast and honest, or you’re out. There’s nowhere else to pass the buck.
Is it scary? Well, just for a second, consider the alternative. You could work for Motorola or Adelphia or even AT&T, always wondering when the company was going to downsize you at the same time you were busy doing whatever the boss asked just to be sure you’d be the last to be fired…
Sounds to me like running a tiny business is totally safe in comparison.
*Actually, you don’t have to quit right now. You could just decide to quit right now. One of the best parts of the no-infrastructure economy is that you can start in your spare time. Hey, it worked for eBay.