How to build a business – the American Dream

The American Dream: it does not exist.

From rags to riches on the basis of an excess of ambition and talent is a nice story, but in practice there is more to it. Malcolm Gladwell, who previously wrote books like The Tipping Point and Blink published an entertaining book about why some people are much more likely to succeed than others. Outliers.

The summary: origins, environment, and coincidence are just as important as intelligence, talent, ambition and perseverance. It would like to add (Gladwell does not): the ability to recognize opportunities and to grab them with both hands. I have written a blog about this ability – Effectuation – earlier.

Therefore, contrary to the stories that usually circulate about highly successful people – a story that focuses on intelligence and ambition, Outliers argues that if we want to understand how some people succeed, we must study in detail things like their background, their generation, their family, their place of birth, and even their birth date. These usually drive the coincidences that make them who they are. There is also such a thing as “making enough hours”. This is the “10,000 hours theory”, developed and popularized by Dr. Anders Ericsson, who basically found out that spending massive amounts of practice hours on a specific subject will lead to expert mastery in that field, more than talent will. Or the other way around: virtually no one who did not spent ten thousand hours of something, became really good at it. Whether a person has the opportunity to make those hours depends on… coincidences and perseverance.

The story of success is much more complex and interesting than it appears to be at first.

The logic that Gladwell uses to explain the success of the Beatles, Bill Gates, Asians in Mathematics, Jewish takeover lawyers and others is peculiar and interesting. It is all about coincidences. For Gates: the availability of sufficient computer time at exactly the right time, for the lawyers: they were all born from garment makers around 1930, they do not have to fight in the war, were not eligible for the WASP Wall Street firms, and had, around 1970, sufficient experience with acquisitions, which until then were not fancy. Before 1970 Yankee law firms refused to do this inferior work, which after the ‘70s was considered to most prestigious legal work.

So it boils down to: talent, ambition, and ten thousand hours of experience. Character and competence. We should start asking our candidates whether they have ten thousand flying hours. For those who join us as Professional (sometimes call the “professor” role) this will not be a problem. For entrepreneurs (the pilots in the plain), the headhunters, the networkers and sales-people that might be a challenge.

 

Thousands of hours experience with a specific task, seems contradictory to what Ricardo Semler propagates in his book The Seven Day Weekend.

The title is misleading. Weekend does not mean doing nothing but: do things that you like and make you happy. Semler, then CEO of Semco, a company with roots in Sao Paolo,  introduced a style of leadership that took liberalism and democracy as a starting point. Why do most people in most countries agree that democracy is the best way of governing, but why are most businesses organized along dictatorial line? Companies and the Roman army have many similarities. Companies and kindergartens have many similarities. What are the similarities between armies and kindergartens? 1. Decisions are made for you. 2. Personal initiative is not really appreciated and 3. Hardly anyone really enjoys it.

Semler turns it around: If employees care first and foremost about their self-interest, if Management refuses to impose (or even take) decisions, if there is a culture of transparency and trust, intrinsic motivation and peer pressure will do the rest. This involves making employees responsible for a lot more than putting in the hours.

It has taken decades to turn his business around to a democratic, innovative and successful enterprise, where employees determine their own working hours, their own salary, their location and decide who will be their bosses and their colleagues.

How nice is that: A company where people may attend the meetings they want to attend and all business information is available for everyone.

Employees are no longer just a means of production, but adult people with talents and ambitions who are asking, as many times as possible, the question “why?”.

It would be quite something if this could work, and I am convinced that it can work. I am not so sure if we have the patience and time to make all the mistakes, and to accept everyone making all the mistakes that are part and parcel to such a process.

 

But then, why not? If we are able to select and interest only the most talented people, with the highest integrity, and if we can all be fully transparent about our intentions, we will get there. First we will be looking for people with 10,000 hours on the clock.

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