6 ms·

Up-voted as I like to be reminded from time to time that 18th century mentality is still prevalent in the world. I don't think you're being the grown-up, you ar

by nekopa 13y ago

Up-voted as I like to be reminded from time to time that 18th century mentality is still prevalent in the world. I don't think you're being the grown-up, you are just talking from your world view. You sound similar to the people who railed against Ford's 5 day work week - "The workers will all be drunken and fighting and murdering and and and and..." But it worked out fine in the end. The 'hippie commune like' extra day off didn't destroy the fabric of society. In fact, productivity and profits went up. I think in the new millennium we should be experimenting with different models of running business. Why do you feel that a model that has worked well for the past 100 years is the final form of all business? Why say that it is a 'hippie commune' in such a derogatory manner? Not all businesses can use this model and not all CEOs should operate the way you feel. It is a multi0faceted world out there, and I believe businesses should reflect this. Should your company run like this? No, its not in your mentality and probably not possible for your industry. But... Semco has proven that this type of model can work even for a large hardware manufacturer (marine pumps was their original line of business, but with innovation to their business format came lots of innovation in their product line). All I see in your well though out post is anecdotal data wrapped in an inherent pessimism towards people and a 'hard-ball' mentality towards business. You are coming off harsh, but I don't think it is quite as righteous as you want it to be. You know what is best - for you - why not let others experiment and see if we can't create something different for business in the future. Some will fail, some will thrive, but it is the experimentation which is vital. And this post is a great example of someone who is in a position to do it, and may well be very successful. If they go bankrupt then come to HN and boast about how change is never good and your way is the only way to run a business. And I will still call you out on it even then. One question for you: If you knew your employers finances (Semco gives all staff a 2 week course on understanding the books), and could see that if you didn't take a pay cut now, you would lose your job in 3 months as the company would go bankrupt, would you vote for a pay decrease or say fuck it, I'm keeping my salary the same and damn the consequences?

consz 13y ago
>One question for you: If you knew your employers finances (Semco gives all staff a 2 week course on understanding the books), and could see that if you didn't take a pay cut now, you would lose your job in 3 months as the company would go bankrupt, would you vote for a pay decrease or say fuck it, I'm keeping my salary the same and damn the consequences? Really depends. If I felt the company would take a long time or have a low probability of pivoting and recovering, I would probably vote myself the highest salary I could and ride it down/start looking for another job. I assume quite a few others would feel the same way.
- nekopa 13y ago
  Fair enough. When this situation happened at Semco (Brazil has had a lot of problems with its economy over the last 20 years) management put forward keeping salaries the same, but letting people go. The employees countered with everyone getting salary cuts to see them through the down turn, with the hike back to normal levels agreed on beforehand. I don't know if it was about wether or not the company the company would turn around, but it seemed a lot more based on loyalty to the company (plus all staff, even assemblyline workers set their own work hours) and no one really wanted to go back to working at a 'traditional' company. I think that in software dev a lot of the jobs are fairly the same work environment-wise, so your take probably could work if you are only at work for the money (and I know, everyone has bills to pay, I have a family so it would be a tough call for me to make as well but I don't think I would just try to hike my salary and hasten the doom of the company if they've treated me awesomely over the years)
robomartin 13y ago
My guess is that you don't run a company and have never run one. You probably never risked it all to start a business in your garage and grow it to the point where you can employ dozens of people. Self funded, not with other people's money. There's a huge difference there as well. If you spoke to any one of my employees you'd quickly understand that the 18th. century mentality claim would be an insult. For example, it wasn't uncommon for people to request a couple of days off to go see a concert out of town in the middle of the week. I can't think of any instance of not approving such outings AND also paying for the days they were away. In other words, treat people as you would like to be treated. I ended my post with this: "Pay your employees fairly, treat them well, be generous about vacations, be considerate, help them if they run into tough times (sick kid, parent, financial problem, etc.), pay for conferences and training courses, take them out on morale building trips and, if finances allow, be generous with bonuses and your recognition of their contribution to the enterprise." That is far --VERY FAR-- from an 18th. century mentality. How dare you! As for your question, well, any number of scenarios come to mind. Not the least of which is --as someone already pointed out-- voting yourself a pay INCREASE and using the time to FIND A NEW JOB. This is a natural reaction to "the ship is sinking" type news. People are going to look after themselves and their families. And, at one level, there's nothing wrong with that. In the process they might exacerbate the problem and create a bigger problem. Understanding business economics is NOT something you can learn in two weeks. The idea that this can be taught to every employee in an organization, regardless of station and education is simply ridiculous. I am not being elitist here. It's just reality. When I started off, as an engineer CEO, I knew fuck-all about finances, marketing, sales, accounting, inventory turns, accounts receivable, supply chain management, channels of distribution, taxes, regulation, leasing, and a million other things you need to understand to run a business effectively and efficiently. These things took years to learn and to learn them the hard way, making mistakes along the way. It was only later in life that I found myself wishing I had gone for an MBA. It probably took me ten years to get my "street MBA" the hard way. Just about the only thing you can teach someone in two weeks is probably how to read a balance sheet and not necessarily how to understand it. That's useless. A business is not a balance sheet. That's just a snapshot in time and is meaningless in terms of understanding where you are going and all of the micro inputs driving your current and future states (if I may inject a little state machine talk here). This state machine is very complex. You want employees at all levels working on what they were hired to do, and not busy trying to decipher states with faulty input information. It is counterproductive and it has the very real probability of cause horrific results (people leaving because they panic). The topic at hand was this idea of letting employees select their own compensation through voting. That's just nonsense when applied to any real organization outside of perhaps a few very narrowly defined outliers. One example that comes to mind is that of sales people. This can be a really odd group. They are generally very aware of finances at a transactional and COGS level. If you let them vote for their own compensation you'd probably be shocked by the results --and I don't mean "pleasantly surprised". I have never had a sales person come to me and say something like: "Hey Martin, I haven't sold anything in three months. How about we lower my salary so I have a chance to pull out of this hole I am in and show you guys that I can bring in the sales.". Ha! Never. They keep flying the plane right into the ground. Even after repeated talks where we look at numbers and I highlight the fact that they've been receiving advances on commission they have not earned yet for weeks, not one person has ever suggested a cut in pay. That is NOT how people think. If, on the other hand, you put someone (or a group) in a do-or-die situation and the options are a bunch of people are fired or all of you take a pay in cut things are different. The decision to go for the pay cut has NOTHING whatsoever to do with understanding finances after a two week class. Nothing. I'll let game theorists dissect this one if they deem it worth their time. The mechanism is very simple: - If I don't take a pay cut they will have to lay people off. - I could be one of those people. - Without private information from management signaling that I am safe, I could be gone. - Therefore, the best way to ensure that I don't lose my job is to support the idea of an across-the-board pay cut. - We all win and I don't have to worry about losing my job. That's how it works. Again, people are not analyzing business finances. Management puts a fork in the road in front of them. Two choices. Choice number one means you might lose your job. Choice number two, you don't. No brainer. In many ways it is one of those "Interesting game. The only way to win is not to play." moments. This is very much a "Tragedy of the Commons" case. As you scale up the hippie approach. They are bound to destroy the very entity that feeds them. The best example we have of this are highly unionized businesses. The unions, effectively and by force, get to vote for their own compensation and benefits. If they don't get what they want they go on strike and cause untold damage. In nearly every case I can think of in the US, unions have succeeded in extracting pay and benefits that are absolutely ridiculous in the context of anyone living in the real world. They have also succeeded at killing-off or seriously damaging entire industries and even cities. For example, in a rational framework a city should not devote 40% of their budget to pensions. Yet it is happening. Cities and businesses are going bankrupt because of this. If these people were rational and truly cared for the enterprise (city or business) they would analyze the numbers, understand the problem and not vote themselves these ridiculous compensation and benefit packages. The would voluntarily scale them down. That is not happening. And that's not 18th. century thinking, that's people in the US today. That's how they behave. That's reality.

by nekopa 13y ago

consz 13y ago

>One question for you: If you knew your employers finances (Semco gives all staff a 2 week course on understanding the books), and could see that if you didn't take a pay cut now, you would lose your job in 3 months as the company would go bankrupt, would you vote for a pay decrease or say fuck it, I'm keeping my salary the same and damn the consequences? Really depends. If I felt the company would take a long time or have a low probability of pivoting and recovering, I would probably vote myself the highest salary I could and ride it down/start looking for another job. I assume quite a few others would feel the same way.

nekopa 13y ago
Fair enough. When this situation happened at Semco (Brazil has had a lot of problems with its economy over the last 20 years) management put forward keeping salaries the same, but letting people go. The employees countered with everyone getting salary cuts to see them through the down turn, with the hike back to normal levels agreed on beforehand. I don't know if it was about wether or not the company the company would turn around, but it seemed a lot more based on loyalty to the company (plus all staff, even assemblyline workers set their own work hours) and no one really wanted to go back to working at a 'traditional' company. I think that in software dev a lot of the jobs are fairly the same work environment-wise, so your take probably could work if you are only at work for the money (and I know, everyone has bills to pay, I have a family so it would be a tough call for me to make as well but I don't think I would just try to hike my salary and hasten the doom of the company if they've treated me awesomely over the years)

robomartin 13y ago

My guess is that you don't run a company and have never run one. You probably never risked it all to start a business in your garage and grow it to the point where you can employ dozens of people. Self funded, not with other people's money. There's a huge difference there as well. If you spoke to any one of my employees you'd quickly understand that the 18th. century mentality claim would be an insult. For example, it wasn't uncommon for people to request a couple of days off to go see a concert out of town in the middle of the week. I can't think of any instance of not approving such outings AND also paying for the days they were away. In other words, treat people as you would like to be treated. I ended my post with this: "Pay your employees fairly, treat them well, be generous about vacations, be considerate, help them if they run into tough times (sick kid, parent, financial problem, etc.), pay for conferences and training courses, take them out on morale building trips and, if finances allow, be generous with bonuses and your recognition of their contribution to the enterprise." That is far --VERY FAR-- from an 18th. century mentality. How dare you! As for your question, well, any number of scenarios come to mind. Not the least of which is --as someone already pointed out-- voting yourself a pay INCREASE and using the time to FIND A NEW JOB. This is a natural reaction to "the ship is sinking" type news. People are going to look after themselves and their families. And, at one level, there's nothing wrong with that. In the process they might exacerbate the problem and create a bigger problem. Understanding business economics is NOT something you can learn in two weeks. The idea that this can be taught to every employee in an organization, regardless of station and education is simply ridiculous. I am not being elitist here. It's just reality. When I started off, as an engineer CEO, I knew fuck-all about finances, marketing, sales, accounting, inventory turns, accounts receivable, supply chain management, channels of distribution, taxes, regulation, leasing, and a million other things you need to understand to run a business effectively and efficiently. These things took years to learn and to learn them the hard way, making mistakes along the way. It was only later in life that I found myself wishing I had gone for an MBA. It probably took me ten years to get my "street MBA" the hard way. Just about the only thing you can teach someone in two weeks is probably how to read a balance sheet and not necessarily how to understand it. That's useless. A business is not a balance sheet. That's just a snapshot in time and is meaningless in terms of understanding where you are going and all of the micro inputs driving your current and future states (if I may inject a little state machine talk here). This state machine is very complex. You want employees at all levels working on what they were hired to do, and not busy trying to decipher states with faulty input information. It is counterproductive and it has the very real probability of cause horrific results (people leaving because they panic). The topic at hand was this idea of letting employees select their own compensation through voting. That's just nonsense when applied to any real organization outside of perhaps a few very narrowly defined outliers. One example that comes to mind is that of sales people. This can be a really odd group. They are generally very aware of finances at a transactional and COGS level. If you let them vote for their own compensation you'd probably be shocked by the results --and I don't mean "pleasantly surprised". I have never had a sales person come to me and say something like: "Hey Martin, I haven't sold anything in three months. How about we lower my salary so I have a chance to pull out of this hole I am in and show you guys that I can bring in the sales.". Ha! Never. They keep flying the plane right into the ground. Even after repeated talks where we look at numbers and I highlight the fact that they've been receiving advances on commission they have not earned yet for weeks, not one person has ever suggested a cut in pay. That is NOT how people think. If, on the other hand, you put someone (or a group) in a do-or-die situation and the options are a bunch of people are fired or all of you take a pay in cut things are different. The decision to go for the pay cut has NOTHING whatsoever to do with understanding finances after a two week class. Nothing. I'll let game theorists dissect this one if they deem it worth their time. The mechanism is very simple: - If I don't take a pay cut they will have to lay people off. - I could be one of those people. - Without private information from management signaling that I am safe, I could be gone. - Therefore, the best way to ensure that I don't lose my job is to support the idea of an across-the-board pay cut. - We all win and I don't have to worry about losing my job. That's how it works. Again, people are not analyzing business finances. Management puts a fork in the road in front of them. Two choices. Choice number one means you might lose your job. Choice number two, you don't. No brainer. In many ways it is one of those "Interesting game. The only way to win is not to play." moments. This is very much a "Tragedy of the Commons" case. As you scale up the hippie approach. They are bound to destroy the very entity that feeds them. The best example we have of this are highly unionized businesses. The unions, effectively and by force, get to vote for their own compensation and benefits. If they don't get what they want they go on strike and cause untold damage. In nearly every case I can think of in the US, unions have succeeded in extracting pay and benefits that are absolutely ridiculous in the context of anyone living in the real world. They have also succeeded at killing-off or seriously damaging entire industries and even cities. For example, in a rational framework a city should not devote 40% of their budget to pensions. Yet it is happening. Cities and businesses are going bankrupt because of this. If these people were rational and truly cared for the enterprise (city or business) they would analyze the numbers, understand the problem and not vote themselves these ridiculous compensation and benefit packages. The would voluntarily scale them down. That is not happening. And that's not 18th. century thinking, that's people in the US today. That's how they behave. That's reality.