The Uber Economy vs. The Kaizen Economy: The Financial Risks for Your Organization

It's an interesting thing. I remember giving a presentation on organizational turnaround in the early 90s and speaking with a guy afterwards about the trends in organizations that will have the biggest impact.

By that time, we were well into the world of outsourcing and "core competencies." So, even though I was well aware of those trends, what he told me shocked the hell out of me.

He said that what we were seeing was the least of it. What came next, he posited, was a world of independent contractors and that 'employment' as we knew it, was as good as gone. He gave it ten years.

Frankly, at the time, I thought he was nuts. How, I wondered, given the problems organizations were already experiencing with outsourcing, could a responsible executive team give up even more control and accept even greater risk by outsourcing pretty much everything they did?

I still feel that way...even in this Uber Economy.

Don't get me wrong. I think that Uber is one of the best inventions out there. I use it. I love it. I recommend it.

But what's important is that not every company is Uber - or Uber-like.

The decision to use external resources is a much bigger decision than most executives realize. Usually, the basis for the decision is financial. Why, they think, should we pay all the "extra" expenses - like benefits and taxes - when we can get people to do the same thing without our having to take the hit? Let the contractor deal with it.

That's one way of thinking.

The other way has everything to do with knowledge, experience and innovation.

Employees - especially employees who are valued by their organizations' management - contribute far more than completing their tasks each day. Whether front-line employees or back-office workers hidden from the public, they bring their knowledge of the company to their jobs...every day.

That knowledge and associated experience give them the ability to participate and produce in ways that far exceed what the organizations ask. In fact, if it's a really smart executive and management team, that knowledge and experience is being actively sought on a regular basis.

Which brings us to innovation.

Innovation - the best, most financially beneficial innovation - comes from within. I'm not talking about world changing technologies. There are whole companies dedicated to making those changes happen.

I'm talking about the innovations that take the obstacles out of the way of your people. That give them the ability to succeed. That access the knowledge and experience they bring so that the costly, unnecessary, everyday problems they experience are finally dealt with and gone.

And when they are - one after the other - your organization is 'suddenly' performing in ways that outshine your competitors' offerings. Every day.

The Japanese call it Kaizen. Continuous Improvement Continually.

Quite honestly, you'll never have the level of innovation you seek - within the organization's operations or directly offered to your customers - nor the financial success that's possible and available, unless you're more than careful in your decisions about what to outsource and contract.

Because the more you present people and functions as interchangeable, the more your 'permanent' staff will see themselves as exactly that: interchangeable. And there goes your loyalty.

It's a grave misconception that people don't bring proprietary information to new jobs. They may not violate any agreement, but you can't unlearn something once it's learned. Knowledge and experience travel and get applied - wherever the 'employee' happens to be.

What that means - and this is the ultimate financial risk for your organization - is that you're not only losing out on opportunities for success within your own organization. By adopting an Uber-like, contractor-heavy approach to your workforce, you're literally handing your competition the keys to your kingdom.

And that makes no sense at all.


@MoneyForLunch Interview: The Zuckerberg Question

I recently had a great time doing an interview with Bert Martinez on his radio program, Money for Lunch.

We talked about executives and business owners...their development and success, the challenges they face and, interestingly, how their fears impact their decision making.

The answer to the last is what I refer to as "The Zuckerberg Question:"

What would you do if you weren't afraid?

Answer that, execute on it and you've got it made!

Here's the link to the program. I'm second up.


Ben Horowitz: Don't Follow Your Passion

As you must know by now, I'm more than a great fan of Ben Horowitz. I think he's wonderful - and his commencement speech at Columbia University simply provides another reason why.

The video is below - but, before we get there, here's just a snippet from his speech explaining what to do instead of the always popular "follow your passion":
"Follow your contribution. Find the thing that you're great at. Put that into the world. Contribute to others. Help the world be better."
Like I said: Wonderful.

It's What You Can Contribute from Andreessen Horowitz on Vimeo.


Lost Opportunities through "Improved" Customer Service: The Apple Store

Dear Angela Ahrendts,

You don't know me, but I'm one of your customers. In fact, I'm one of your most important customers...because I've been an Apple customer - and devotée - since 1984.

What that means is that I've lived through the askance, side-eyed looks from business colleagues and clients wondering why I wasn't "smart" enough to prefer a PC.

I lived through being called a MacHead.

I've defended the company's vertical strategy when friends and colleagues spoke of being held hostage by Apple.

I believed in Steve Jobs - and awaited his return when the Apple Board turned on him. I also believe in Tim Cook and what he's bringing to the company - including defending him to colleagues, clients and analysts when he was first appointed and they asked me why I thought he could do what Steve Jobs did...and more.

I've been through it all - and, throughout, I've held firm that Apple knows what it's doing...until I visited an Apple Store recently and found out about your new, "improved" customer service policy for the Genius Bar.

The idea is good: Staff the Genius Bar so that the stores can handle walk-in customers' needs.

What isn't good is that it has had a knock-on effect on the rest of the staff working the floor. They've turned into salespeople.

One of the great joys of the design that Steve Jobs and Ron Johnson incorporated into the Apple Store (and, yes, I was positing from the first that they were revitalizing and redefining the retail experience - which they did) was that the Apple Store was a place not just to see and touch these "magical" products. It was a place to play.

What that meant was that the folks on the floor not only answered customers' questions. They shared their own excitement about and experience of what the technology can do.

As a result, they were like mini-Geniuses. It wasn't uncommon for staff members to try to answer customers' questions. Not technical questions. And definitely not fixes when something was mechanically wrong. But User questions.

And that's what's gone. Somehow, as you conveyed the new policy about Genius Bar support for walk-ins, what also got conveyed was that the floor staff weren't supposed to answer questions anymore - at least not unless the questions were about product specs and price-points.

They've become salespeople - and that's a terrible thing.

There's no give and take. There's no shared excitement. There's no fun and sense of possibility - from the "I didn't know you could do that!" wow factors to the "Oh, is that how I fix that problem!" relief that came with talking with someone who shared your experience and had greater knowledge to offer.

I've visited - and purchased items - in Apple Stores in multiple countries and the experience was always the same.

This, too, has been the Apple Experience. Not just the technology. It's the feeling Steve Jobs engendered from the first that, as an Apple user, you were part of something more. Something big.

You could Think Different.

Evidently, not so much anymore. At least not amongst your floor staff.

This is a quick and easy fix, Ms. Ahrendts, and I hope you take care of it. Soon.

After all these years, I don't want to be proved wrong.

Yours sincerely,



Management: If You Don't Fire The Ones Who Deserve It, Then You Should Be Fired

Yes, it's as simple as that.

If you don't fire the people in your organization who deserve to be fired, then you should be fired.

Why? Because you're not doing your job.

Here's an example:


Rewards and Recognition: What Are You Really Rewarding?

I have a friend who works at a university. The woman puts in hours that simply don't quit.

She's not in management. There are no bonuses and her salary is fine but nothing to write home about. 

The fact that she's exempt doesn't play into her thinking. For her, the job is the job - and her job is to do whatever it takes to ensure the students participating in her programs succeed. 

They do. 


Leadership for Innovation: The Value of a Cathartic Puke

Based on the recent job numbers, the US is seeing the beginning of the end of the worst of the global recession that began in 2007/2008. It's taken long enough.

What interested me from the beginning of the financial implosion, however, was the way that various "experts" had differing opinions about what was going on - and whether it was really as bad as we all thought. (For most, it was worse.)

There was one particular analyst I recall who went on at great length explaining why what was happening was a good thing. No one was enjoying it, he explained, and it certainly wasn't comfortable. But, according to him, it was necessary.

From his perspective, the financial system needed to be "cleaned out." As far as he was concerned, the only way that it could be done in a healthy and successful way was if it was thorough. Then, he explained, it could be completed and the global economy could put itself on the right track.

He called it a "cathartic puke."