When Steve Jobs returned to Apple in 1997, Michael Dell was asked if he had any advice for the legendary tech entrepreneur. “What would I do?” he said, “I’d shut it down and give the money back to the shareholders,”
What followed was the greatest corporate revival the planet has ever seen. Rather than breaking Apple up, Jobs created the world’s most innovative product line and transformed Apple from a struggling has-been to the most profitable company on earth.
It’s an intriguing model. Find a visionary leader—or become one yourself—and watch the money roll in. Unfortunately, in the history of the world, there has only been one Steve Jobs, one Elon Musk and one Henry Ford, so it’s a good idea to have a plan B. Here’s what you can do while you’re waiting for the next Steve Jobs to come your way.
Treat Your People With Dignity
No one wants to be a cog in someone else’s machine and everyone likes to feel like they matter. So if you expect your employees to be motivated to do their jobs well, you’d better treat them with dignity. Leadership is not the art of getting people to do what you want, but inspiring them to want what you want.
The philosopher Immanuel Kant defined dignity as treating people as ends in themselves, rather than as simply means to an end. Author Daniel Pink, in his book Drive, suggested that we infuse our organizations with autonomy, mastery and purpose. However you want to define it, truly putting your people first pays dividends.
Some very successful companies have put dignity at the center of how they run their business. Zappos pays its employees a bonus to leave after a training period, because the firm realizes how important it is that people actually want to work there. LinkedIn founder Reid Hoffman suggests that managers treat staff as allies, rather than underlings.
Leaders like to think of themselves as in control, but the reality is that the lunatics run the asylum. In any organization, the true power to get things done lies in its middle management. While many leaders believe that they can bend the organization to their will, that’s rarely true. Being a jerk doesn’t make you Steve Jobs, it just makes you a jerk.
Overcome The Dunbar Dilemma
Young companies have a certain ethos. Startups always seem to have a spirit of camaraderie that more established firms can’t hope to match. While surely much of that has to do with the excitement of forging a new path, there is also a scientific explanation as to why organizations lose steam as they grow.
Based on his studies of the effects of brain capacity on primate social groups, Robin Dunbar suggested that the optimal size for cohesive human social groups is 150, now known as Dunbar’s number. Other researchers have come up with slightly larger values, but most agree that 150-200 is where normal social ties begin to get strained.
Dunbar’s number is important for entrepreneurs to take note of, because it is at that point that the “family atmosphere” begins to take on a decidedly institutional feel. It’s when “cozy” becomes corporate and all of the sudden it becomes terribly hard to get simple things done. Often, growth can kill a young business.
What makes the Dunbar dilemma so challenging is that senior management is rarely aware of it. Young enterprises usually have a core group that have been together from the start. They feel strong bonds and are frustrated that the newcomers don’t. Often, they make the problem worse by trying to institutionalize the camaraderie that they developed in the early days.
Make no mistake, once you hit 150-200 employees, you need to fundamentally rethink how you will manage your organization. Bonds no longer form naturally and you need to put in specific processes to encourage them.
Network Your Organization
An inevitable consequence of growth is an increase in formality. The informal relationships and easy banter of a small company becomes impossible to maintain as it gets larger. Hierarchy, procedures for accountability and protocols for communication become inevitable at a certain point.
When management notices the change it usually attempts its first reorganization. This is almost always a mistake. In fact, reorganizations usually make things worse. They don’t address any of the underlying problems and sever many informal ties that don’t show up on an organization chart.
The only real way to solve the problem is to network your organization. Effective enterprises thrive on connectivity, so you should make a serious effort to get people mixing. Simple initiatives like best practice programs, corporate training across departments and an open office environment can do a world of good.
Other approaches are more elaborate. General Electric, for example, encourages its executives to take assignments in different divisions. Many firms are also experimenting with new, more organic forms of organization, such as holacracy.
Choose Simulation Over Failure
Risk is romantic, especially in business cultures. We lionize those who roll the dice, not the ones who play it safe. Failure, then, is often seen as a badge of courage. If you’ve tried and failed, then you must have risked something.
Or, you may have just been stupid. While it’s true that businesses need to take risks—and often the risks of inaction are greater than the risks of action—smart leaders try to minimize risks as much as possible. The truth is that unless you are a very well established company with a strong balance sheet, you cannot afford failure.
Fortunately, digital technology allows us to simulate failure, rather than having to experience the real thing. CAD software and 3D printing make it possible to rapidly prototype. Services like Amazon’s Mechanical Turk and AskforTask make it easy to test products cheaply and big data techniques like agent based models can simulate markets.
Another idea that’s gaining traction is minimum viable products. When Tony Hsieh started Zappos, he didn’t build a functional website or distribution system. He just took pictures of shoes and put them on the internet. When he got an order, he ran to the store and bought the right model. That’s a terrible way to run a business, but a great way to test an idea.
So don’t look to fail. Experiment. Test. Verify.
Constantly Innovate Your Business Model
While Steve Jobs is known for his successes, he had no shortage of failures. His integrated approach to technology, combining software and hardware, soon lost ground to Microsoft’s more modular model, just as Android has long surpassed iOS devices in market share. His second company, NeXT, never really got off the ground and Pixar struggled for years.
That’s not unusual, success often breeds failure. No matter how well conceived or how cleverly executed, no business model lasts. Markets rise and fall, contexts change and before you know it, the unbeatable becomes untenable. Once that happens, you need to innovate your business model.
One of the things that made Jobs great was that he could come back from failure and succeed once again. When Pixar failed at hardware, he transformed it into a film company. When desktops became commoditized, Jobs recognized that there was great potential in devices, with Macintosh computers serving as a hub, of course.
And that’s how people like Steve Jobs, Elon Musk and Henry Ford succeeded so spectacularly. It wasn’t that they had a visionary idea and ran with it, but rather their ability to constantly hone and adapt their ideas until they became visionary. The power to dream is not nearly as important as the grit to see it through.
image credit: apple.com
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Greg Satell is an internationally recognized authority on Digital Strategy and Innovation. He consults and speaks in the areas of digital innovation, innovation management, digital marketing and publishing, as well as offshore web and app development. His blog is Digital Tonto and you can follow him on Twitter.