Leanership trumps leadership

Two university professors interested in entrepreneurship wanted to test the assumption that entrepreneurs are motivated by the potential upside of starting a gazillion dollar business. Hongwei Xu and Martin Reuf polled 60,000 people — entrepreneurs and normals — and what they found disproved the assumption:

Alvin Lee, The entrepreneur’s motivation

The study […] looked at two groups of people: those who have just started their own businesses versus the general population. To gauge their risk tolerance, these two groups were given three options for venture investments: “a profit of US$5 million with a 20 percent chance of success” (option 1); “a profit of US$2 million with a 50 percent chance of success” (option 2); and “a profit of US$1.25 million with an 80 percent chance of success” (option 3).

General perception of the risk-seeking, nothing-ventured-nothing-gained entrepreneur would dictate that most business owners would plump for option 1. But the study proved otherwise. More nascent entrepreneurs opted for option 3 – a higher chance of profit, but less of it – than the general population, while a higher proportion of the general population actually opted for option 1 instead of the business owners.

So if money alone isn’t enough to make someone start their own business, what would? “Creating a business is very risky, it’s very uncertain,” Xu told INSEAD Knowledge. “Non-pecuniary motivations are more important than monetary motivations for people to start a new business. One is autonomy: People want to be their own boss. The other is identity fulfillment, which is more about people having a vision about a product or a service. But their employers do not give them the freedom to develop within the company structure. That is a key driver.”

Intrigued, Xu corroborated that desire for autonomy and the self-identity that comes from being your own boss, heading your own way. He got lots of positive feedback from entrepreneurs.

Morra Aarons-Mele suggests that those who don’t know — the normals in the study above — are often intoxicated by the concept of entrepreneurship, or ‘entrepreneurship porn’. But the motivations of many of those drawn to entrepreneurial start-ups are in fact what Xu and Reuf discovered: they are seeking autonomy and are actively repelled by the idea of a soul-sucking job following someone else’s vision for a company.

Her stats are frightening, and stand as a condemnation of work culture today:

I’ve come to suspect that the rise of “entrepreneurship porn” is at least as much about escaping a company as starting one. Most Americans don’t like their work. Data on Americans’ dissatisfaction regarding their work – in corporate environments, in particular, show:

  • 2 million Americans voluntarily leave their jobs every month (Bureau of Labor Statistics)
  • 74% of people would today consider finding a new job
  • 32% of employees are looking for a new job
  • Only 47.3 percent of currently employed Americans are satisfied with their position (Conference Board)
  • The majority of American employees are disengaged from their work (Gallup)
  • Entrepreneurs are more likely to have an optimistic view about their futures than other employees (Gallup).

My hope is that we can attack this the other way. Instead of 75% of workers quitting their jobs, how about a revolution in work? What if companies adopt common sense, but radically innovative ways to get people reinvested in their own work, and through that to crack the code of socially-scaled engaged work across the company.

The deeper form of entrepreneurship is to put aside the mythic know-it-all genius founder archetype and adopt the new way of leadership: leanership. To adopt lean principles across the board, in the core tenets of work culture, and not just about the product cycle.

What is largely missing is an acceptance by today’s leadership to embrace a new open work culture: one that is deeper and broader than the inauthentic and propagandized closed organizational culture of most businesses. This new deep culture is based on the core principle that the people doing the work of the business are as important as the work being done, and whose wellbeing is as critical as the imperatives of the business. And, among other outcomes that means far greater autonomy, more opportunities to develop mastery in new skills, and a social climate in which people can earn and benefit from the respect of their peers.

I have a second concern about ‘entrepreneurial porn’, which often takes a dark turn once companies grow past the three-guys-and-a-dog-in-a-garage stage. The sense of being on an endless sprint — a demanding but noble mission — can lead to a stress factory, where people work ridiculous hours, and everyone is supposed to subordinate everything in their lives to the company’s vision. And by ‘company vision’ I mean the vision of a small management elite. In the evil twin version of inspired entrepreneurial culture, people that don’t ‘fit’ get fired. And culling all the misfits can be simply restated as closing off dissent and disenfranchising employees that want to have a greater say in the work they do and what it is supposed to be about.

I often characterize today’s standard organizational model as the entrepreneurial company. The hierarchy has been flattened, but there are at least two ranks: those at the bottom and those at the top. The vision for the company comes from a handful of people, and others are there to execute against that vision. Preaching about great culture in such companies is often a form of indoctrination, and ‘consensus building’ is actually intended to crush dissent, and organize everyone around the gamble the company’s leaders want to make with the companies capital and people’s labor.

This new deep culture is based on the core principle that the people doing the work of the business are as important as the work being done, and whose wellbeing is as critical as the imperatives of the business.

Taking a step back: the entrepreneurial marketplace is something like the way that fish and reptiles produce offspring. They create a lot of eggs and spend very little investment in them. This is how Silicon Valley and today’s start-up marketplace works these days: thousands of entrepreneurial companies are created, and 99% go out of business in short order. Which is fine at a macroeconomic level, but is hard on the people involved.

But mammals — especially the primates and other social mammals — work the opposite way. We have few children and we invest a great deal of time and energy to raise them to adulthood. So, if you are starting a company — to build software, wash people’s cars, or sell tickets to the Moon — you might want to run it — at least in part — like a start-up, using lean notions like experimentation instead of opinions, and testing markets by conversations and working with prospective clients instead of creating a five year business plan. But if you are as committed to people as you are to following your own Pole Star, the deeper form of entrepreneurship is to put aside the mythic know-it-all genius founder archetype and adopt the new way of leadership: leanership. To adopt lean principles across the board, in the core tenets of work culture, and not just about the product cycle. This may well be what Tony Hsieh is doing as he steers Zappo’s toward the adoption of Holacracy, which is a highly formalized approach to leanership, and which has also be adopted by Ev Williams at Medium.

We have a great deal to learn from lean thinking, and if applied to the the greatest extent, it undoes the conventional notions of a leader-centric business, where collective behavior is demanded and imposed through top-down consensus building (or squashing dissent). As I recently wrote in Today’s business organization is an oligarchy, and that needs to change, we need to move to much more democratic organizations, and soon:

There is still room for visionaries, as much as before. There will still be founders, and leaders, and owners. But in order to be fast-and-loose the notion of direct supervision — and the strong ties involved — must be diffused. Increasingly high performing staff will demand greater autonomy, and not for selfish reasons, but to get things done quickly. Companies will create, find, and retain top performers, and create the context for high performance. As before, the narrative will be legitimacy of the organizational structure by efficiency, but a much greater degree of democracy will be involved since all work participants will voluntarily select the work to be done, and who to work with, rather than being told.

So, in the final analysis, if we want to fix what’s broken in business — where 74% are disengaged at work — we can’t just start fungineering, or buy yet another new social tool. We need to rethink the foundations of work, and get people reengaged. Entrepreneurial zeal is both a help and a hindrance in this case, so we need to be clear on its two-edged nature.