Category Archives: Business Ownership

The ironies of small business and democracy

One of the great ironies is that while businesses flourish in a democracy, a business cannot flourish as a democracy.

By definition, stakeholders in a democracy vote on issues and the majority rules. But while this process is one of the greatest inventions of mankind with many applications, business is not one of them.

Pure democracy isn’t practical in government, either. But a group of visionary malcontents solved that problem over 200 years ago by creating something new: a constitutional republic, where an elected few represent the interests of all.

A business can be like a dictatorship in that an individual will likely make the final decision. One desk, as President Truman so famously said, where the proverbial buck stops. But here’s another irony: Even though a business may have characteristics of a dictatorship, it likely won’t be successful if the team is managed by a tyrant. The dominator management model is as old as humanity itself, but it requires subordinates to dutifully follow the instructions of superiors. As a withering vestige of centuries past, this model is no longer competitive.

The 21st century management model must look more like a partnership. Just as effective government requires that elected representation augments pure democratic principles, an ultimate decision maker in a business must be alloyed with the experience, brainpower and engagement of the team.

The Founders envisioned a nation that could be as dynamic as it was enduring, and as powerful as it was benevolent, but only if the stakeholders believed their investment in such an ideal was justified. Our republic — warts and all — essentially does this. And even though Americans outsource the management of their government, the classic principles of democracy come to bear with regularly scheduled elections to see if the majority wants to change its mind.

Employees change their minds by seeking work elsewhere. And while they always had the right to leave a job that’s managed by tyrants, past generations swallowed their pride in favor of what we now know was the illusion of job security.

Today, employees have no such illusions. And while they accept the reality that someone has to make final decisions, they also expect to contribute to the basis for those decisions.

In the 21st century, a business still can’t be structured as a democracy or dictatorship. Today employees expect to be led, not driven; they want to contribute, not just take orders, even if the last order wasn’t their favorite.

The 21st century workplace does not abide tyrants.

What’s love got to do with your small business?

People start businesses because of love.

We love to make and/or sell things: shoe laces, tires, socks, cars, soap, computers, bread, air conditioners, etc. You love your business; I love my business. Starting and running a business is a love story.

Yes, I know. Our businesses are not always lovable. Indeed, a business is like a teenager: You may not always like it, but you always love it. Which is a good thing because if you didn’t love your business you wouldn’t come back the day after it gave you the worst day of your life.

business-loveAs Tina Turner asked in her song, what’s love got to do with it? Love is an important component of being in business, but it can also be a problem. Is it possible to love your business too much? As business owners, we know how to fall in love with our businesses, but we usually don’t know how and when to fall out of love with it. Here’s a great American love story that went wrong:

In the early 20th century, the railroad industry thought they were in the railroad business instead of the transportation business. When freight trucks and better roads came along, many railroad companies failed because they loved what they did more than how they did it.

Here are two happy love stories:

In 1993, the octogenarian IBM business model was in trouble. Top leadership saved the company by realizing they weren’t in the computer business, but rather the information management. So they shifted from being hardware/software centric to adding services. IBM understood that they should only be in love with delivering digital information solutions.

Founded in 1916 in Seattle, Boeing had deep roots. But in 2001, the leadership realized their future was in aerospace, not just airlines, and moved the headquarters to Chicago. They loved what they did, not where they did it.

Both IBM and Boeing saved themselves by following:

Blasingame’s Law of Business Love
It’s okay to fall in love with what you do, but it’s not okay to fall in love with how you do it.

What do you love about your business? I’m serious; make a list. Then go back over the list and identify anything might be holding you back. You probably can’t do this by yourself, so engage your team.

As you go through this process, listen for and beware of responses that sound like: “Well, that’s how we’ve always done it.” Statements like that make a great epitaph on the tombstone of a dead business.

Love your business, but don’t love how you do business.