4 ms·

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 w

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.

nekopa 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. That guess is wrong. I have started, run and sold my own companies before, and I'm currently bootstrapping a new SaaS company right now. I don't know about using other peoples money, as I have always self-funded, I am a firm believer of organic growth, as I have never been too concerned with becoming mega-rich, I just like to fund my lifestyle. First company I started and sold was way back in 1989, when I was 18 years old, of my bedroom and using hotel meeting rooms to see clients. Nowadays I mostly consult and mentor SMEs, as I enjoy working with plucky entrepreneurs. the only reason I'm starting a new business is that I just had my second child, so I need extra funds for my lifestyle now :) >If you spoke to any one of my employees you'd quickly understand that the 18th. century mentality claim would be an insult... >That is far --VERY FAR-- from an 18th. century mentality. How dare you! How dare I? So it is fine for you to call people (experimenting with their own, so far successful, business) childish "OK, I'll be the grown-up in the room.Are you fucking kidding me? No, really." But if I politely say that you have an old fashioned view of business your hackles immediately rise and you get morally wounded. Let alone throwing around the word hippy to describe something you don't like. Why not just call him a commie-pinko-bastard and be done with it. Or do you use the term hippy to imply drug taking as well as loose morals? You could call him naive, inexperienced and so forth. I would call him brave and innovative. But those are just our respective viewpoints. Part of this is my fault, so let me clarify what I mean by 18th century mentality (I didn't mean to imply that you're an asshole or a slave-driver, I did read your comment all the way through, and you're one of my favorite commenters here on HN): "Business needs a hierarchical structure with one strong leader at the top, calling all the shots taking all the risks and profits, as this is the only way that works and without it fickle employees would destroy the company within a matter of months if left to their own devices." Patriarchal is another way at looking at this type of business mentality, and I associate it with what you said regarding being an adult and 'hippies'. You see yourself as the tough, but fair father figure of the company. There is nothing wrong with that, and a lot of successful software projects run under the auspices of a 'benevolent dictator for life'. Being ex-military I know first hand that this type of structure is necessary for successful battle operations. I just happen to think that there are also other valid models out there, and people shouldn't be attacked as acting childish or hippyish just because they try something different. Maybe for your industry the model you prescribe is they only way. That makes me sad as even you pointed out that a man died because of the stress, and you yourself went to hospital. Considering that business is an abstract model that we humans have invented, wouldn't you rather find a better way of doing business than to push yourself into an early grave? Business is often regarded as war, but that is a choice we make. >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. The reality is that it has been done, and quite successfully. It may sound ridiculous, but it actually has been done. Of course, two weeks won't give you MBA level understanding of business economics (in all honesty, a lot of the MBAs I've worked with probably spent about 3 hours learning finance), but you can structure the information in such a way that they understand enough to be able to make informed decisions about their salary and so forth. I know that you're quite intelligent ere's a thought experiment for you: what information and at what level would you present to your staff if you only had 2 weeks to give them a solid foundations of money flows in and out of a company? Especially from a 'street MBA' viewpoint. I bet you'd come up with a pretty solid course. >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. Some of the world's most successful companies have employees who also know the bigger picture of what is going on in the company. It doesn't have to be the extreme that you're suggesting, where the janitor isn't mopping floors because he is busy on excel trying to figure out a 10% cost cutting maneuver. But would you be against the janitor who, knowing his departments cost impact on the company, tries to see if the floors would look better with 2 instead of 3 coats of wax, thereby cutting his wax costs by a third? >One example that comes to mind is that of sales people. This can be a really odd group. You're preaching to the choir here. I completely agree. I remember one salesman I worked with who didn't understand the differences between profit mark-up and profit margin. He kept wondering why he was losing money when he discounted something. All agreement aside, one of the best salesmen I knew talked his managers into canceling his salary completely, but paying him a higher commission rate. Needless to say the managers wished they had run through the numbers a little more before agreeing to it, as he cleaned up. >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 the above, of course it's a no brainer, people have no access to finances, and management lays out the options. One company I consulted with worked with their staff during the financial crisis to work out how to deal with the problems of lay-offs. Three of the youngest staff members came up with a novel idea, where they split one job between them. They had objective results that needed to be achieved each month, and they split the time and money according to who needed what each month. For example, when one of them needed to go on holiday he worked a whole month by himself, and took all the pay. I also had the pleasure once of consulting with a board minus 2 employee at a large insurance company. He had to lay off people in his department (the department with the largest revenue and profit) even though he was already short of staff. His main complaint was that the monthly car allowance for his boss would pay for 7 full time sales people which could bring in $Xmm per year. Luckily for management those numbers are well hidden. All of this came from the result of a three-quarter of a million dollar consulting project which came up with a hard to find outcome - lay-off 30% of the staff to cut costs. As for unions I don't like them or believe in them and I think they are also a part of the 18th century mentality I mentioned earlier. They are a knee jerk reaction to the way a lot of traditional companies treat their employees. This again harks back to the idea that business is war, only for the unions the enemy is the employer, which is downright dumb. And let's not even go into the levels of corruption present in unions. Business is there to make money. I just think that there are more ways to skin that cat, and that you shouldn't shout down someone who is trying a new method. The person who tried this seems smart enough, and with your experience you could probably give him some extremely useful tips about what to avoid, what problems may come, and see what he does with that. But why should he read past are you fucking kidding me you childish fucking hippy?!? To find he should follow your method of business that leaves people in hospital or dead?

nekopa 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. That guess is wrong. I have started, run and sold my own companies before, and I'm currently bootstrapping a new SaaS company right now. I don't know about using other peoples money, as I have always self-funded, I am a firm believer of organic growth, as I have never been too concerned with becoming mega-rich, I just like to fund my lifestyle. First company I started and sold was way back in 1989, when I was 18 years old, of my bedroom and using hotel meeting rooms to see clients. Nowadays I mostly consult and mentor SMEs, as I enjoy working with plucky entrepreneurs. the only reason I'm starting a new business is that I just had my second child, so I need extra funds for my lifestyle now :) >If you spoke to any one of my employees you'd quickly understand that the 18th. century mentality claim would be an insult... >That is far --VERY FAR-- from an 18th. century mentality. How dare you! How dare I? So it is fine for you to call people (experimenting with their own, so far successful, business) childish "OK, I'll be the grown-up in the room.Are you fucking kidding me? No, really." But if I politely say that you have an old fashioned view of business your hackles immediately rise and you get morally wounded. Let alone throwing around the word hippy to describe something you don't like. Why not just call him a commie-pinko-bastard and be done with it. Or do you use the term hippy to imply drug taking as well as loose morals? You could call him naive, inexperienced and so forth. I would call him brave and innovative. But those are just our respective viewpoints. Part of this is my fault, so let me clarify what I mean by 18th century mentality (I didn't mean to imply that you're an asshole or a slave-driver, I did read your comment all the way through, and you're one of my favorite commenters here on HN): "Business needs a hierarchical structure with one strong leader at the top, calling all the shots taking all the risks and profits, as this is the only way that works and without it fickle employees would destroy the company within a matter of months if left to their own devices." Patriarchal is another way at looking at this type of business mentality, and I associate it with what you said regarding being an adult and 'hippies'. You see yourself as the tough, but fair father figure of the company. There is nothing wrong with that, and a lot of successful software projects run under the auspices of a 'benevolent dictator for life'. Being ex-military I know first hand that this type of structure is necessary for successful battle operations. I just happen to think that there are also other valid models out there, and people shouldn't be attacked as acting childish or hippyish just because they try something different. Maybe for your industry the model you prescribe is they only way. That makes me sad as even you pointed out that a man died because of the stress, and you yourself went to hospital. Considering that business is an abstract model that we humans have invented, wouldn't you rather find a better way of doing business than to push yourself into an early grave? Business is often regarded as war, but that is a choice we make. >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. The reality is that it has been done, and quite successfully. It may sound ridiculous, but it actually has been done. Of course, two weeks won't give you MBA level understanding of business economics (in all honesty, a lot of the MBAs I've worked with probably spent about 3 hours learning finance), but you can structure the information in such a way that they understand enough to be able to make informed decisions about their salary and so forth. I know that you're quite intelligent ere's a thought experiment for you: what information and at what level would you present to your staff if you only had 2 weeks to give them a solid foundations of money flows in and out of a company? Especially from a 'street MBA' viewpoint. I bet you'd come up with a pretty solid course. >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. Some of the world's most successful companies have employees who also know the bigger picture of what is going on in the company. It doesn't have to be the extreme that you're suggesting, where the janitor isn't mopping floors because he is busy on excel trying to figure out a 10% cost cutting maneuver. But would you be against the janitor who, knowing his departments cost impact on the company, tries to see if the floors would look better with 2 instead of 3 coats of wax, thereby cutting his wax costs by a third? >One example that comes to mind is that of sales people. This can be a really odd group. You're preaching to the choir here. I completely agree. I remember one salesman I worked with who didn't understand the differences between profit mark-up and profit margin. He kept wondering why he was losing money when he discounted something. All agreement aside, one of the best salesmen I knew talked his managers into canceling his salary completely, but paying him a higher commission rate. Needless to say the managers wished they had run through the numbers a little more before agreeing to it, as he cleaned up. >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 the above, of course it's a no brainer, people have no access to finances, and management lays out the options. One company I consulted with worked with their staff during the financial crisis to work out how to deal with the problems of lay-offs. Three of the youngest staff members came up with a novel idea, where they split one job between them. They had objective results that needed to be achieved each month, and they split the time and money according to who needed what each month. For example, when one of them needed to go on holiday he worked a whole month by himself, and took all the pay. I also had the pleasure once of consulting with a board minus 2 employee at a large insurance company. He had to lay off people in his department (the department with the largest revenue and profit) even though he was already short of staff. His main complaint was that the monthly car allowance for his boss would pay for 7 full time sales people which could bring in $Xmm per year. Luckily for management those numbers are well hidden. All of this came from the result of a three-quarter of a million dollar consulting project which came up with a hard to find outcome - lay-off 30% of the staff to cut costs. As for unions I don't like them or believe in them and I think they are also a part of the 18th century mentality I mentioned earlier. They are a knee jerk reaction to the way a lot of traditional companies treat their employees. This again harks back to the idea that business is war, only for the unions the enemy is the employer, which is downright dumb. And let's not even go into the levels of corruption present in unions. Business is there to make money. I just think that there are more ways to skin that cat, and that you shouldn't shout down someone who is trying a new method. The person who tried this seems smart enough, and with your experience you could probably give him some extremely useful tips about what to avoid, what problems may come, and see what he does with that. But why should he read past are you fucking kidding me you childish fucking hippy?!? To find he should follow your method of business that leaves people in hospital or dead?