Why Entrepreneurs Make Bad Employees

An alternate title I was considering for this article was "Why you do not want to encourage entrepreneurial behavior among your employees", but the shorter title sounded more catchy.

Before we jump into this topic, I'd like to articulate that I am in no way denouncing entrepreneurs or the entrepreneurial spirit that has helped launch countless successful small businesses from no more than an idea and a lot of hard work. Instead, what I will be advocating here is that entrepreneurial behavior is simply incompatible with today's modern workplace, due to the challenges that are present in this organizational model, as I presented in my own theory. By expressing entrepreneurial behavior in the workplace, employees are simply setting themselves up for failure in a system that is designed to resist change at almost any cost. Why? Read on.




Being an entrepreneur, practically by definition, means that you participate in a process called "creative destruction", a term popularized more than half a century ago by Austrian-American economist Joseph Schumpeter. This term, at least how I interpret it, means that destroying things, or taking your time away from things that don't generate a positive return on your investment of resources, can be just as valuable as spending your time on creating things that do. We can see this concept at work in our everyday lives, such as when a restaurant closes, and the owner chooses to open a new one with a different menu, or maybe even a different type of cuisine altogether. In this example, the restaurant owner has decided that their time, resources and money would be better spent on creating a new business that would hopefully attract a greater number of hungry customers. This is an example of creative destruction (the old restaurant disappearing enables a new one to open up), and ultimately an example of the free market at work. Entrepreneurs are varied in their skills and interests, and this type of activity occurs every day, in a large number of sectors in the economy.

If we agree, therefore, that entrepreneurs are justified in committing creative destruction when a greater opportunity exists in starting a new venture, what is the challenge with embracing this behavior in your own workplace? To help answer this question, consider the following points:

1) As an employee, you get rewarded for meeting goals, not creating value.

As an employee, you are tracked and evaluated on a set of abstract "goals", usually determined on a year-by-year basis. From a young age, we're taught that finishing all of the work we set out to do (or that we were assigned) is the only way we can determine our success, in school or at work. As a result, it's only natural to feel a little unworthy if you did not meet all of your work goals at the end of the year, no matter how irrelevant they have become. A major reason for this anxiety is that these types of annual evaluations are often tied to compensation increases and job promotions. As a result, sometimes a project that shouldn't carry on and waste everybody's time will continue mercilessly, simply because nobody wants to be singled out as the person that "killed the project". Thus, any opportunity for creative destruction, to liberate the project team's time for more valuable work, will be squandered.

2) The indirect customer (management) will always be more resistant to change than the real customer.

Unless you work in a sales or customer-facing role in your organization, you will likely face this common situation, where you are forced into making decisions or engaging in projects that offer questionable value to the end customer of your product or service. This is because your indirect customer, management, can often be bound by the same set of constraints in your organizational culture as described in the first point above. However, in today's complex, convenient and increasingly global consumer culture, customers face very little, if any, resistance to changing vendors for whatever product or service they are buying. As an employee, however, your performance will rarely (if ever) be evaluated by your organization's actual customers, so where does your loyalty rest?

3) Entrepreneurs respond to direct incentives (and disincentives).

When acting as an entrepreneur, there is rarely any "safe road" that can guarantee steady prosperity and anything more than short-term job security, so you don't naturally look for one. The usefulness of your activities, and the quality of your work, are judged on a near daily basis by how many customers there are willing to pay for your product or service. As a result, you respond way more effectively to direct incentives than indirect ones. If you're a salaried employee, on the other hand, as outlined in my previous article your own personal risk-reward matrix is simplified down to annual increases in pay and possibly an end-of-year bonus, so seizing an immediate opportunity will not necessarily translate into an immediate monetary gain. Likewise, there is often very little disincentive to maintaining status quo, even in situations where "rocking the boat" would be the correct course of action, because nobody wants to be singled out from the masses of public opinion, within the organization. This work environment removes the types of direct signals that an entrepreneur would respond to, and base their actions on.

I hope that this discussion has helped to outline some of the conflicts between entrepreneurial behavior and organizational behavior, as I have seen it for the last 10 years working in the IT field. I would love to hear your own point of view on this topic as well, feel free to sound off in the comments section! Until next time, keep on trucking.

The all-you-can-eat employee

At the risk of sounding sensational in the title of this article, I wanted to spend a little time stepping through Part #2 of the unifying theory about workplace stress, presented in my previous post:

"2. When we agree to work for an organization as an 'employee', we agree to be paid more or less a fixed price, for an unspecified type and amount of labor."

Some of my previous posts have outlined in more detail how there is a disconnect between what we are paid in dollars and what value we actually create as employees of an organization. This is largely because the issue of "compensation" is increasingly dealt with as a separate topic from what our actual duties will be day-to-day as employees. In effect, this creates a work environment where we agree to a certain level of monetary compensation for our time, before we know what our time will be used for, and how much of it will be needed.

As consumers, we also engage in this same type of economic arrangement on a regular basis, whether we realize it or not. This situation will happen anytime we enter an all-you-can-eat restaurant, and shell out 15 to 30 bucks for endless plates of food (or at least until we cannot eat any more). The restaurant owner has agreed to let us pay them a fixed price, to consume an unspecified amount of their valuable resources (food).

Does this mean that as an employee, you are an all-you-can-eat buffet? To put it simply, yes! But there's a caveat to that assumption.. just as a buffet restaurant cannot serve Kobe beef every night and expect to stay in business, an employee cannot assume that they will magically be able to fulfill every demand that is placed on them from everybody who has access to their valuable time. That would be a disastrous assumption to make, since your own equivalent of "going of out business" is to become demotivated about your work and feel like you are no longer actively participating in the success of the organization.

Based on this analysis, what is the lesson learned here? To sum it up, as long as we will be participating in the type of economic arrangement described above (which shows no signs of disappearing anytime soon), it is only rational that we must critically evaluate every request for work that we receive, and deliver in such a way as to provide the most value to the organization with the least amount of effort involved. In effect, we must "cut corners" to keep ourselves in business, in a spiritual sense, in order to maintain as healthy a working relationship as possible in our environment.

Sometimes, this means that work will need to be delivered in ways that do not meet every requirement that was requested, but that meets the ones that provide the most positive impact to the organization. As employees, we should never feel ashamed of doing work this way, since we are simply trying to keep ourselves "in business" in order to continue to be sources of value for our organization.

Sometimes, cutting corners also means evaluating the opportunity costs of engaging in certain work, at the expense of other projects. This will happen frequently when other teams make requests on you to do some work that is valuable to them. Is it really worth the opportunity cost of not delivering value to your own team (whose budget, after all, provides your salary) ? You need to make that call every time.

Hope you have enjoyed this "food for thought" (pun intended).

Why we're stressed at work (a unifying theory)

This blog is taking a new direction, starting today. There's a central theory that I need to explore around work stress that will need some time and attention. For better or worse, here it is.

1. In a normal functioning group or society, in order to get something produced, people must "pay" something (ie. incur a cost) for that service or product.

2. When we agree to work for an organization as an "employee", we agree to be paid more or less a fixed price, for an unspecified type and amount of labor.

3. In the workplace, the people who ask us to do work (ie. coworker, boss) do not actually pay us directly for completing that work.

Due to the above, we are frequently asked to:

- do things that are inefficient

- do things that are repetitive

- do things that are not well thought out

- do things at a moment's notice

This is because asking people to do these things is "free" for the asker, so the short and long term "costs", measured in time, do not need to be factored into the decision to ask for the work. What this means is that we, as employees, do not own our time. As a result, employees who are able to do more things, more capably, will be penalized for their abilities.

This is defined as "Time Slavery".

I hold these truths as self evident.

Who do you thank for your success? Is it you?

Hello again, time for another post. It turns out that my goal of one post per week was a bit of a lofty ambition, but I shall try my best moving forward.

In leading up to today's unintelligent question, I'd like to tell a little story about something I received in the mail a few weeks back. It was a letter asking me to fill out an enclosed survey for recent university graduates. Frankly, the survey seemed rather lengthy, and in the end I decided it wasn't in my best interest to fill it out. Why? Well, based on the questions being asked of me, including what my level if income was at present, it seemed that a goal of the survey might have been to establish some sort of "cause and effect" relationship between the education I received and my ability to earn a living in the open marketplace.

Frankly, I consider myself to be a sort of economic outlier, because I made the decision to enter the workforce early and continue my university studies part time, over the course of eight or so years. Therefore, for anybody to suggest that my economic output in the workplace had largely to do with my university studies is to be making an absurd, and frankly insulting statement. An even more insulting proposition is that administrators of a "survey" would attempt to leverage my own blood, sweat and tears in the workplace, which put me on the career path I am on today, and potentially make a claim that my university or college degree somehow magically "caused" all of this to happen. But, am I the only one who thinks this way? Sometimes, I wonder about this, and hence today's unintelligent question:

Does a university or college degree pay our bills and put food on the table, or do we?

This question arises from a couple of previous blog posts, where I suggested that one of the major flaws in modern workplace design was the inability for employees to recognize a direct relationship between their productive outputs and the value they receive in exchange as consideration. Based on this conclusion, I began wondering if the attitudes and beliefs necessary for people to accept this type of system were somehow taught and reinforced at an earlier stage in life, such as when they are preparing to enter the workforce. The formal education system, it turns out, is quite possibly the ideal environment for these notions to take hold, since as students we are essentially programmed to believe that we can expect higher monetary returns in the workplace if we "earn" a college or university degree. Once again, we see an example of how we learn to accept an indirect relationship between our actual productive outputs and what we receive in return for them. How deep does this little rabbit hole go?

Instead of exploring this issue in detail today, I'd like to sidetrack a little and suggest you have a look at the following video: "College Conspiracy".

Click here to watch the video

It examines a set of preconceptions that students may have around the actual value of a college education, and presents some alternative points of view on the true merits of a post-secondary education. I won't say that I endorse the whole content of the film, but I found that it offered a refreshing look at the topic at hand. Might there be a student loan "bubble" in a few years, similar in proportion to the housing bubble the US finds itself in presently? You be the judge!

Why delegate? Why not, it's free!

In the modern workplace, the concept of "delegation of work" is a double-edged sword. There are days in my own work that I have felt that being "delegated" work is a losing proposition, for a whole bunch of reasons, while being the person who "delegates" has mostly upside benefits. This leads to the next unintelligent question:

Why is being delegated work a bad thing, in the office?

To better understand this concept, let's take an example of productive "delegation" that occurs outside of the workplace.

There are times when we require a large amount of print material produced in a small amount of time, whether it be for a school or work presentation, or anything else. Sometimes, our little inkjet printer just won't cut it. Thankfully, a marketplace exists to provide this type of service, since we are able to hop in our car, drive to the nearest office supply store or print/copy centre and get the job done, for a reasonable price.

In the above example, we are participating in an economic exchange with a capitalist (ie. print/copy centre owner), who owns the print machinery, and hires the staff who know how to use it, in order to provide the necessary service for us. Both sides in this exchange are happy with the deal. We receive our quality printouts, the business receives payment for a job well done. If there is a problem in the quality of the printouts, or the delivery time of the job, we have effectively "delegated" these responsibilities to the business, and although we can't change the deadline we need it by, we have a reasonable expectation of performance from the print/copy centre, since we have delegated this work to them.

Let's now try to resolve how this interaction would occur in the workplace. At different times in our careers (possibly many times), we have been identified as the "capitalists" with skills and labor that is desired by others within our organization. Therefore, others take it upon themselves to "delegate" tasks to us when they see a benefit from the services we provide. When this occurs at the office, what is missing from this interaction? You guessed it, payment!

At this point, you might counter this argument by reasoning that an employee's salary (and bonus, if applicable) covers the total labor their organization receives from them on an annual basis. However, as was covered in my previous article, this arrangement does not address the fundamental flaw in these types of workplace interactions, which is that there is no direct connection between services provided, and consideration received for those services. Therefore, if you work as an employee in an organization, and have faced these types of situations before, it behooves you to always be the one who delegates your work, not the other way around!

Before you are tempted to believe that this is a stable and workable concept in the modern workplace, take a minute and consider what would happen if every employee were encouraged to delegate their work to others. Eventually, we would be faced with a situation where everybody was a self-acclaimed "manager", and nobody would be doing the actual work that needed to be done. So therefore, how is this situation resolved? Let's consider a few alternatives:

1) Let your boss decide what your work will be.

This may be the natural option to consider, since the classic "command and control" model in a lot of workplaces today would be compatible with the view that employees' activities should be directed primarily by their manager. After all, your manager would be in the best position to know your time constraints and availability for new work, on a day-to-day basis.

Unfortunately, in specialist positions (such as IT work), it is often the employees themselves who have the best handle on what services they are most able to deliver, with minimal resource commitment. Managers may overlook some good, strategic projects if they do not share the same comfort level with the skill areas of their employees. Ultimately, this approach negates the decision making role of highly skilled employees, so ideally other alternatives should be considered.

2) Be self-employed

Why not *be* the capitalist? When self-employed, you not only have the ability to charge for each service provided, your clients expect it and thank you for it! Isn't that refreshing? While this may seem like a utopian way to work for some people, for others the prospect of not receiving a steady paycheck might be quite daunting. In all fairness, for a lot of us, the dream of entrepreneurship often gets clouded by the humbling realities of life, such as a mortgage, car payments and kids. Taking on this type of risk is not for everybody.

From an employer's perspective, staff are needed too! Could you imagine a day when every employee got up from their desks, walked out the front door and became their own boss? For better or worse, some form of organizational structure is still required at present.

3) Expect some other kind of "consideration" for your work. After all, employees should be capitalists, too!

Over the next 5-10 years, a trend that I expect will emerge will be the separation of "employees" into at least two categories of worker. The first category, the "9-to-5 'er", would most fit our traditional definition of an employee, and would have an expectation of steady hours for steady pay (with the very occasional late night at the office). Some people are happy with this, and in return I would expect that the types of work most suitable for these types of employees would be limited-scope, limited-complexity tasks that carry a low amount of risk, but are nonetheless necessary functions within the organization. Also remember that several mid to large-scale projects within an organization require on-going support after the design-and-build phase has completed. These types of support commitments are also ideal types of work for these employees.

The second category, which I will call the "creative resource", will have some, or most of their work arranged through some sort of marketplace-type system. Being an employee, they would still be offered a fixed rate of pay per year, however with this one variable locked down, the "consideration" offered for their services would be time away from the office. In other words, some of this employee's time at work would be variable, and every project they are offered (ie. not delegated) would be associated with a specific amount of paid days off. Therefore, anybody wishing to delegate work to this individual would have the ability to offer, in consideration, a specific number of paid days off, which they could offer subject to their own group's "time budget" allocated to them every year. These "delegation days" would be the equivalent to the monetary consideration that is offered when a consumer interacts with a business in every day life.

The above example would also carry the benefit of requiring those people who delegate work to make decisions on the priority of their requests, since their requests for work would no longer be "free", from their own perspective. The employee would also benefit greatly, since taking on more and more projects of this nature would provide them with a tangible, and measurable reward (paid time off). Managing these types of requests for work through some sort of marketplace system would also ensure that reasonable amounts of time off were being offered in exchange for reasonable amounts of work, since the employee would have the ability to accept or reject these offers for work, based on their evaluation of the reward (paid time off) being offered in exchange for performing the required services.

At a bare minimum, I hope the above idea stirs some thought about this issue, and why it is one that affects several of us in the modern workplace today. Rather than just complain about these issues, it is my hope that these ideas can be the start of some sort of constructive solution to this problem, that will ultimately be a well-spring for stress reduction and better interaction between intelligent human beings when we are working. As always, comments are welcome, I hope you have enjoyed reading this article!

The world of work

It continually amazes me how so many people settle into their daily jobs without finding a way to be truly happy and fulfilled with their work. I am no exception. The modern "workplace" is commonly revered as a one of the largest sources of stress in the daily life of millions of people.

Today, in examining this topic, I would like to present a few unintelligent questions in an attempt to get at the root of workplace stress and why it is so prevalent in our daily lives. I am not going to go over the usual suspects such as (hopeless) time management, office politics, and so forth. Instead, in this writing I am laying out a set of reasons why I think people feel that they need to participate in these types of activities, due to an underlying set of false pretenses which we choose to accept every day we arrive at our place of work.

Unintelligent Question #1: You do not walk into a barber shop and ask for a free haircut, so why do your coworkers feel it is ok to ask you to do work for free?

Our (mostly) free market economy is based on voluntary participation in the exchange of values that benefit each party involved. In layman's terms, this means that both buyer and seller of a product or service are willing to participate in the transaction, and feel that the product/service they are receiving, or the value (ie. money) they are receiving in exchange for the product/service they are delivering is sufficient to make it a worthwhile exchange.

Now, enter the workplace. Right out of the gate, when we sign our letter to accept our job offer, we are effectively making s statement that we are worth X dollars to an employer, typically without any detailed plan for what work we will exactly be doing in the coming year. Mentally, we pay a huge price for gaining the "stability" of this steady paycheck. Sure, many workplaces also offer a performance incentive system to give employees bonuses for "exceptional job performance", however this does not address the initial fallacy that was made when offering the employee the job in the first place.

What is this fallacy? It is that employees are hired under these pretenses, then are "thrown into" the workplace and asked to participate in economic exchanges every day, with neither party knowing what the other is receiving in exchange for the service they are providing. This is about as far from a free market exchange of value as you can stray, since neither party has a way to set rational limits on what they are asking for. Two "parties" could be an employee and their manager, an employee and somebody else's manager, or two co-workers. Effectively, it does not matter what job title either party holds, the underlying false pretense remains.

Imagine, for a moment, what that scenario would be like at the barber shop, if no money was exchanging hands between barber and customer. Likely, the person performing the valuable service, the barber, would complain of shortages of supplies and labor (ie. their own time), because after all, who wouldn't want a haircut (or other type of valuable service) if it was free? Does this start to sound familiar? One of the key reasons that virtually every experiment in socialism in history failed was because of supply and labor shortages, due to a failure in the central planning model. More on this later.

By now, if you're still reading this article, you might be thinking that money is not the only reason people enter the workforce, and I would agree with you. Seeking a promotion is often one of the reasons why employees will make sacrifices in their time and life outside of work, but, why? The word "promotion" implies that you are making an upwards, not lateral, move in an organization, that you are in a position above others who did not receive the promotion. Does this mean that by taking on this new job, you are bettering yourself? This forms the basis if our next unintelligent question.

Unintelligent Question #2: If our job title is so important to us, why don't we carve it on our tombstone?

When we are young, a lot of us envision ourselves in positions of authority (ie. I want to be The Boss! I want to be CEO!) without having a vision of the actual day-to-day work we will be doing in those positions of authority, or all of the positions we will need to occupy in between before reaching this goal. When we grow up, some of us will take these notions into the workplace and seek these positions of authority, and as a secondary priority, perform the work necessary to be eventually promoted to these positions. I would argue that this is the predominant attitude in most workplaces today, to the extent that it is considered "taboo" to think otherwise, so many of us will accept promotions when they are offered to us, even if we are completely satisfied with the work we are doing in our present job. In reality of course, most of us would accept an offer for more pay, which is usually accompanied with a job promotion, and this factor alone would likely be the factor that "seals the deal"and would be the biggest reason why we wouldn't turn down the promotion. However, again we enter into the conundrum where we are being offered a larger sum of money without a direct connection to the actual value we will be creating for the employer. In effect, by being offered that promotion and pay raise, your employer is placing a fixed price on the overall value of your talents, experience and potential within the organization, reinforcing the notion that as you "move up the ladder", and in effect move further away from the actual hands-on activities that were the reason you were able to be hired in the first place, that your level of seniority within the organization is directly connected to the value you create for the organization. It is precisely this fallacy that is a major source of stress for many people in the workplace.

So, back to my unintelligent question, why don't we carve our job title on our tombstones? The answer is because as human beings, we realize that it's what we do in life that has an impact on the world, not who we are. For some unknown reason, this concept does not seem to translate into our understanding of the modern workplace.

Unintelligent Question #3: Why do we get paid to use other peoples' time, and call it "leveraging"?

Given the constraints in our daily lives, including what we encounter at work, as human beings we seek ways to maximize what we get for our inputs. For some, this includes asking others to do work on our behalf. For some reason, in the workplace this seems to be an ok thing to do. In short, this means at the office, we have less-than-complete control over our ability to perform work, for whom we want and the way we want. In an economic context, the most popular type of system where individuals do not own their labor, is socialism. In case you missed it, what I am saying is that when you step into the workplace every morning, you are entering a small-scale socialist universe. Don't believe me? Let's try to draw a few parallels.

Virtually every organization exists to provide a valuable service to the economy, or to society as a whole. For some reason, these same organizations feel it equally important to indoctrinate their employees into this same shared purpose, almost as if it is a natural thing to expect employees to bypass their own reason for doing what they do every day. Having an organizational mission is a valuable asset, however, the current trend appears to be to develop a strict employee culture around this mission and these shared goals. As a net result, employees measure their performance on how well or poorly they lived up to their organization's goals, and not their own. In the modern workplace, the "me" does not matter, it is only the "we". Where in history have we seen this before?

To wrap up this article, I'd like to loop back around to the concept of central planning. Central planning, in an economic context, is a concept where the productive outputs, and the material and labor inputs needed to create them, is determined by a central planning committee. At a macro level, this model has been tried by nations. At a micro level, it is my opinion that this model is alive and well within private and public sector organizations. Don't believe me? One of the most significant symptoms of central planning, in any organization big or small, is the scarcity of resources. In a large scale economy, typically it is a material shortage, and in organizations with knowledge workers it is a time (or people) shortage. How long did your department have to wait to be granted its last request for a new employee? Why can a decision to hire temporary help rarely be made at your department's level? Why does a request need to be made in the first place, shouldn't the value created by this additional resource be evident to the team that requires this person? I hope that some of the previous sections have outlined for you the reasons why this is not true. In the modern workforce we have created for ourselves, we have lost the direct connection between our own productive outputs and the actual value that we create in the marketplace.

In closing, I hope this article can offer some insights on what we give up, both personally and economically, when we accept that steady paycheck in the hopes of building a successful, stable life for ourselves. So, what's next? Truthfully, I do not know what better alternatives are available for organizations or for employees. The only thing that is certain to me is that the "workforce of the future" will be radically different from the one that we have today. I invite you to post comments so this debate can be continued, and maybe some decent solutions to these problems can be discussed. I'd love to hear your ideas!

Year 2000.. the first decade

As the first decade of the new millennium draws to a close, I'm left to wonder how the events, styles and perspectives of those who were a part of it will be identified by future generations.

Virtually every decade since the dawn of the 20th century has been somehow "labeled" for specific, unique traits that shaped and moulded the identity of those by-gone times. This sort of "signature" was evident in recent decades, such as the age of flower power in the 1960's, the days of disco in the 1970's, and the climax of image in the 1980's, where it seemed that "fitting in" to a particular way of life, style of dress and type of popular culture was paramount to the needs and desires of younger and middle-age generations.

100 experts agree! Don't you??

So, the unintelligent question for this posting is: what was the first decade of the 2000's all about? This article is my (somewhat uninformed) attempt to try to identify some of those unique traits. To sum up my perspective in a single phrase, I would characterize this period of time as follows:

It was the age of information.

What do I mean by this? In a nutshell, I mean to say that peoples' points of view and opinions were formed, in significant part, by the following needs:

- To feel "aware" and "informed"

Notice how the above statements use phrase "to feel" and not "to be". Let me illustrate my point further..

This past decade saw an unprecedented amount of information being made available to an unprecedented amount of people, through Internet, mobile browsing/reporting and 24-hour broadcast news television. I would argue that the emergence of these new and expanded streams of information provided many people with a sense of "power" to develop "informed" opinions and points of view that would have been previously unobtainable. This applied to virtually every area of knowledge in human kind.

So.. what's the catch?

The "catch", as I would put it, is that the desire for people to feel informed (in their opinions, decisions, etc..) outstripped the need to *be* informed in those areas. These new sources of information (some very biased) provided a surrogate way for people to feel that they had reasoned properly in making daily (and life) decisions, since they had "done their homework" and consulted external sources of information.

So.. what is information? It can be anything, and certainly does not have to be verifiable to be available. For example, the following "informative" web site explains to avid readers how investing in Florida real estate is simply a sound financial decision. And look, it's backed up by factual analysis, from experts!

6 REASONS for Investing in Florida Real Estate Investment Property NOW

I'm not saying that the information on this site is untrue, or even misleading. It simply provides a potential investor with "peace of mind" before making an investment decision, because they now feel "informed". As a result, some readers may shirk on their responsibility to reason through their own decision and their own evaluation of the facts.

That's my (very brief) take on what the past decade may be known for. All we need is a buzzword to remember it all by. Information Junkies??

Till next time.