Build a Sustainable Business that Outlives You: Why Engage the Human Factor

AUDIO The Power of Human Factors: Building a Sustainable Business

VIDEO Build a Sustainable Business that Outlives You: Why Engage the Human Factor

00:00 The Hidden Key to Building a Sustainable Business

What one thing can you take away from your business, team, or organization for it to cease existing?

Do you have an answer? Great. Keep that answer in mind because we'll get to it in a bit.

But before we do, let me ask you this: How important is it for you to build a business, an organization, or a team that is most likely to continue growing long after you're no longer part of it?

In this article, we're going to explore an option for building a sustainable business organization that you may not have thought about before, but it's right under your nose. A little bit of a spoiler alert and a clue: It has nothing to do with artificial intelligence, but everything to do with natural intelligence.

I'm also going to share with you a simple action you can take. If you do this one thing consistently over time, it can transform your business and help it become a self-sustaining organization that can thrive for decades or even generations to come.

01:00 The Life of Your Business Organization

I have asked this question to hundreds of people, both individually and in groups of 10, 20, 50, and even 200: What one thing can you take away from a business for it to stop existing? Over the years, I have heard many answers: Business Plan, Intellectual Property, Financing, Cash in the Bank, Logo, Brand Identity, Marketing Strategy, Sales Funnel, Customers, Clients, Processes, Systems, Technology.

All these things are important, of course. But rarely do I hear this answer. Once I tell you what it is, you'll probably think it's obvious.

You would likely agree that if we took the people out of a business, it would cease to exist.

It doesn't matter if a business has one employee, one thousand, or one hundred thousand. If the people are gone, the business is gone.

The life of a business, literally, is the life of its people.

In legal terms, a business entity that doesn't have people behind it is called a shell corporation. Even the legal community recognizes that a business without people is a lifeless shell.

So if we want to build a scalable business that is also high-performing in the marketplace, it needs to be built around its people. If we are to scale an organization that will continue to grow and thrive long beyond the lifetimes of its founders and creators, we must pay attention to the human factors that come into play.

03:01 The 20-Minute Coffee Revolution: A Simple Act That Can Transform Your Organization

I promised at the beginning of this video that I was going to share with you a simple action you can take to transform your team, business, or organization. I'm going to go ahead and share it here first, so that you can stop listening to this episode if you want.

Ready? Here it is.

What you do is take one of your team members who directly reports to you for a 20-minute coffee break, but with one condition. The condition is that neither of you is allowed to talk about work for those 20 minutes. Outside of that one thing you can't talk about, everything else is a fair topic for discussion.

Once you do it with one person, you do the same exercise with each of your direct reports. When you're done, you start over again with the first team member. You can have these one-on-one conversations once a week, once every month, or at a frequency that you can manage.

That's it. That's the action you take to transform your organization.

Now, you're probably wondering: How does this simple action help you create a long-lasting organization? Let me give you a bit of background behind this idea.

04:00 The Dependency Epidemic: The Hidden Threat to Sustainable Organizations

Let's first explore why we can't create organizations that are sustainable.

Let's dive beneath the tip of the iceberg, if you will, and try to uncover the chain of events that makes our businesses unsustainable.

We are in what I call a Dependency Epidemic in management. Our businesses, teams, and organizations are so dependent on us, the leaders and managers, that if we step away from them for a few weeks or months, they begin to fall apart. In other words, we are creating organizations whose success is unsustainable without the everyday involvement and intervention of their leaders.

04:28 Employee Disengagement and Low Performance: A Vicious Cycle

These dependent businesses are leaving their most precious resource on the table: the hearts, minds, skills, talents, and wisdom of their people. We're already paying for this resource—employee salaries are the biggest line item on most companies' financial statements—but we're not using it to its full capacity.

There's a flip side to this problem: low-performing, low-producing people are also unhappy with their work. There's a direct connection between low performance and job dissatisfaction. Contrary to common misconception, when we don't utilize all that our people have to offer, we also make them dissatisfied with their work.

This creates a vicious cycle. People perform below their true capacity, which feeds their dissatisfaction, often resulting in burnout and even existential crises. This further reduces their value to the company, making them even more dissatisfied.

This vicious cycle keeps a team or organization dependent on charismatic leadership from the top.

Let's look at the underlying reason for this cycle of low employee performance and disengagement. 

05:40 Low Employee Engagement and Gallup Study

Gallup has been running a study since 2004. It tells us that only about 33% of employees in the U.S. and Canada are engaged in their work. This low engagement rate has remained quite steady in the last twenty years that they have been measuring it.

So, what about the other 67% of employees? Well, they found that 51% of all employees are disengaged, and 16% are actively disengaged.

These actively disengaged employees—they are miserable in the workplace and destroy what the others build. The remaining 51% of employees are not engaged—they’re just there, doing the minimum that’s required of their jobs.

Just imagine, if you manage a team of six people, two of them are actively engaged, one of them is actively destroying the work of the others, and the remaining three are “just there.”

This does not portray the picture of a healthy work environment.

Think about the people you manage. Can you identify with this? If you run a business or manage people, there is a good chance that you already know this firsthand. You are intuitively aware that the people who work in your organization are not performing at the level they are capable of performing.

We are running highly inefficient teams, businesses, and organizations.

In my work with a few hundred business leaders like yourself, I have traced the cause of this Dependency Epidemic to low employee engagement.

You know, we live in times when each of us has unprecedented access to business management wisdom from so many sources. However, this management wisdom is obviously not fixing this problem. If it were, Gallup’s studies, and other similar studies, would be showing improved engagement year after year. But they don’t.

The question is: What’s the reason for this low employee engagement?

08:00 Scientific Management Theory and the Industrial Revolution

Why is it that this management wisdom we all have access to is not fixing these problems of the Dependency Epidemic and low employee engagement?

Well, consider this: the core of the modern management practices in use today was developed in the 1800s during the time of the Industrial Revolution when we were all fascinated by machines. It was called the Scientific Management Theory and tried to remove a lot of what makes us human.

The core theme of our management practices, even today, is this: if we are to manage people efficiently, we must manage them as if they have only two faculties—behaviors and intellect. Can you think of an entity that is very smart and can do a lot of things but doesn’t have aspirations, doesn’t have dreams, doesn’t have its own independent wisdom, and doesn’t feel a range of emotions?

That’s right—these entities are machines and computers. They are robots and algorithms.

Our management methods are designed to work with and deal with people as if they are machines. They are still based on the Scientific Management theories developed in the 1800s. Sure, we talk about mindful meditation and emotional intelligence, and these things are steps in the right direction. But we have not yet brought the humanness of our people into our management practices in a fundamental and structured way.

We are not innovating our management philosophies. We are stuck in the past. When it comes to managing people, we are still playing off the sheet music developed in the 1800s. So, we are not creating inspiring workplaces that engage us from the core of what makes us human.

If we want to bring innovation to the way we manage people, we need to do it ourselves. We can’t rely on the management wisdom that has been passed down to us over the last few generations.

10:00 The Need to be Our Own Best Business Philosophers

If we truly want to create a workforce that is highly performing and deeply engaged in its work, we need to reinvent the way we manage people. And we can’t rely on others to do it for us.

We need to do it ourselves.

We need to learn to trust our own inner wisdom more than the opinions, judgment, and advice of others.

This does not mean that we do away with or discard the wisdom of others. We use it. There is nothing wrong with it. It’s just that external wisdom is not our wisdom. No one knows more about our business than we do. And that external wisdom is very likely to have the limitations we just talked about.

In other words, we need to trust the business philosopher within us more than the business philosophers who are outside. We need to become our own best business philosophers.

This is the pivot point.

11:00 How to Fix the Dependency Epidemic and Build Sustainable Businesses

Once we make this mind shift to be our own best business philosopher, we take back our power to be our own thinkers. And then we can go about fixing this Dependency Epidemic in business management once and for all.

Here is the chain reaction that will allow us to wean our organizations from dependency and make them self-sustaining. 

11:19 View People as Human Beings

The first thing we do is stop seeing our people as machines with only intellect and behaviors. Begin to see them as human beings with goals and dreams, wisdom and talent, intelligence and skills that make them so much more valuable than any algorithm, machine or artificial intelligence. 

11:36 Build a People-Centric Business Philosophy

The next thing we do is incorporate this fresh point of view into our management philosophies. And then we create new methods, practices, structures and systems that work from this perspective.

11:50 Fix Employee Engagement

When our processes and systems are built from this viewpoint of seeing people as human beings, we engage them from the core of their humanness.

With this high level of engagement, our employees feel satisfied and fulfilled yet highly productive and efficient. Now we can create organizations that are both high performing and resilient. 

12:11 Create High Performing, Self-Empowered Organizations

This high level of engagement from our people allows us to create self-empowered teams, organizations and ultimately businesses.

12:20 Create Self-Sustaining Organizations Designed to Outlive Leaders and Owners

Once we have built teams and organizations with self-empowered people, the leaders, founders and owners can free themselves from their businesses. And the businesses don’t have to depend on the leadership to keep growing and thriving. 

In the end, we can build resilient organizations that are built with self-empowered groups of people who don’t depend on us, the leaders, to keep it all together.

12:43 Call to Action: How to See People as Human Beings

That brings us back to the action I suggested you take in the beginning of this episode.

Make a list of people who work for you or with you. One by one, take them for a cup of coffee and tell them that there is one thing you can't talk about: work.

If you can be a little brave, make this a weekly or monthly practice.

Why do this? Because it allows you to see other people as more than just a means of production. It allows you to see them as human beings with hopes and dreams, pains and suffering, aspirations and goals, talents and wisdom. It allows you to see them as who they really are and all that they have to offer. 

And as we just talked about, this new way you seeing people is the beginning of a new way of working with them and managing them. 

Overtime, perhaps your entire organization can take a cue from you and do the same with their direct reports. Perhaps this can become a cultural trait of your organization.

If you try this out, let me know in the comments how it worked out. 

12:43 Join the Community of Business Philosophers

A word of caution, being our own best business philosophers is not just an academic exercise or a theoretical idea. This is real. Some of the most iconic businesses of our times, such as Microsoft, Apple and Amazon, were founded by leaders who fit this definition precisely. They were their own best business philosophers.

But here is an issue. Being your own best business philosopher is not for the faint at heart. While the rest of the world is choosing to work with people the same way we have done for hundreds or even thousands of years, we need to chart our own course in developing our own business philosophies and management theories. It would be helpful, wouldn’t it, if there was some help and support on this journey of being our own best business philosophers?

I have published an article and a podcast episode that goes into what it really means to be a business philosopher and a place where you can find others on this journey. Check it out and chime in if you feel motivated to do so.