Power and Mismanagement: Why Managers Often Stay Too Long
In the year 2000, the world was captivated by the groundbreaking vision and rapid growth of a company called Enron. Under the leadership of CEO Kenneth Lay and COO Jeffrey Skilling, Enron experienced a meteoric rise and was hailed as a paragon of innovation and success. However, behind the scenes, disaster was brewing. Despite growing signs of financial irregularities and internal mismanagement, Lay and Skilling clung to their positions of power.
The financial damages were immense. When the truth came to light, Enron's stock price plummeted from over $90 to less than $1. Investors lost billions of dollars, and the company declared bankruptcy in 2001, marking the largest bankruptcy in U.S. history at that time. Enron had liabilities exceeding $31 billion. Thousands of employees lost their jobs, and their retirement savings, often invested in Enron stock, became practically worthless.
Internal power struggles exacerbated the situation. Some board members and senior managers attempted to oust Lay and Skilling when the first signs of the crisis became visible. These attempts, however, failed due to the firm control Lay and Skilling maintained over the company. Despite pressure from investors and internal factions, both refused to step down or seek external help.
Another well-known example is Nokia. In the early 2000s, Nokia dominated the mobile phone market. But as the smartphone revolution began, the leadership clung to outdated business models and underestimated the impact of new technologies. This inability to pivot and develop new strategies led to Nokia losing its market-leading position within a few years and eventually being acquired by Microsoft.
These examples starkly illustrate how clinging to power and control can drag an entire company into the abyss and how internal conflicts and ignoring external warnings can worsen the situation.
The Costs of Incompetent Leadership
A study by the Harvard Business Review in 2017 found that incompetent leaders cost companies billions annually in lost productivity and increased operating costs. The study analyzed data from over 1,000 companies worldwide and found that companies with ineffective managers are, on average, 13% less profitable than those with competent leadership.
Examples of poor decisions are numerous and wide-ranging. Incompetent leaders often fail to recognize and implement new technologies or business models. This was the case with Kodak, which missed the trend towards digital photography and thus lost its market leadership. Poor resource allocation, as seen at General Motors in the early 2000s, led to high production costs and massive losses. Additionally, poor employee management significantly contributes to a negative work environment and high employee turnover, driving up the costs of recruiting and training new staff.
Key poor decisions of incompetent leaders include the lack of a strategic vision, ineffective communication, and short-term decisions prioritizing immediate gains over long-term stability and growth. According to a study by the University of Texas, losses due to poor decisions and leadership amount to about 15% of a company's annual revenue. Scaled up to the entire economy, this means billions of dollars are lost. In the U.S., it is estimated that incompetent leaders cost approximately $360 billion annually in lost productivity.
Poor engagement due to incompetent leadership directly impacts productivity and the work environment. Studies by Gallup and Gartner show that only about 30% of employees in the U.S. are engaged at work. The Gallup study found that companies with high engagement report 21% higher profitability and 17% higher productivity. Conversely, poor engagement costs the U.S. economy an estimated $550 billion annually.
There is a clear link between incompetent leadership and high employee turnover. Poor leaders create a negative work environment, prompting talented employees to leave. The costs of high turnover are substantial: companies must invest heavily in recruiting and training new employees. Valuable knowledge and experience are lost with each departing employee, and new employees take time to become fully productive, causing a short-term decline in productivity. According to a study by SHRM (Society for Human Resource Management) , replacing an employee costs on average about six to nine months of their salary. For highly qualified positions, these costs can be even higher.
Studies like those from Gallup and Gartner clearly show that ineffective leaders not only damage business performance but also significantly affect employee engagement and overall efficiency. These negative impacts add up to enormous economic losses, affecting not only individual companies but the entire economy.
Psychological and Organizational Reasons
The Peter Principle, first formulated by Dr. Laurence J. Peter in the 1960s, states that in a hierarchy, employees tend to rise to their level of incompetence. This means that leaders often reach positions where they can no longer perform effectively. This theory explains why so many managers seem overwhelmed and unable to handle their responsibilities.
An illustrative example is the story of a dedicated teacher. Known for her exceptional ability to motivate and inspire her students, her superpower was student engagement, making her repeatedly the best teacher at her school. Due to her outstanding performance, she was eventually promoted to principal. However, in her new role, she could no longer utilize her superpower. Instead of working directly with students, she had to deal with administrative tasks, personnel management, and organizational challenges. These tasks did not align with her strengths, and she struggled to be effective. Her previous engagement and enthusiasm lost impact as she was no longer able to directly apply her passion for students. Thus, the Peter Principle led to an excellent teacher becoming a mediocre principal.There are various psychological and organizational reasons why leaders cannot let go. Many managers fear losing control and influence if they relinquish their positions. Often, there is also a lack of clear succession plans or suitable candidates, making the decision to step down even more difficult. Additionally, many leaders strongly identify with their roles, making it emotionally challenging to let go. The personal identification with the position can be so strong that the thought of stepping down is perceived as a loss of identity.
These psychological and organizational factors significantly contribute to leaders holding onto their positions longer than is in the best interest of the company.
Transformation from Startup to Scale-up
The transition of a company from startup to scale-up presents unique challenges for the skills and mindset of its leaders. In the startup phase, managers often excel through high work intensity, a hands-on mentality, and a strong bias for action. These qualities are essential to rapidly advancing a young company and competing in a highly competitive market. Typical skills in this phase include problem-solving ability, creativity, flexibility, and the capacity to make quick decisions.
However, as a company enters the scale-up phase, the requirements change fundamentally. In this phase, compliance, process optimization, and adherence to legal regulations take center stage. Structured approaches and deep expertise in specific areas are required, going beyond mere willingness to work hard. Many managers who were successful in the startup phase fail to recognize that they lack these new skills. The skills needed for a scale-up, such as implementing compliance programs, developing robust processes, and adhering to legal regulations, are based on detailed expertise and structured thinking.
A successful scale-up manager must be capable of managing complex systems, developing long-term strategies, and ensuring that all company areas work harmoniously together. Specific skills in this phase include project management, process design, risk management, and knowledge of relevant legal requirements. A study by McKinsey & Company shows that companies investing in developing these skills have a 50% higher chance of scaling successfully. Additionally, a Harvard Business Review studyemphasizes the importance of leadership qualities such as strategic thinking, change management, and organizational effectiveness in the scale-up phase.
Recognizing that the skills that led to success in an early growth phase may no longer suffice in later phases is crucial for a company's long-term success. Only by continuously adapting and developing their competencies can managers ensure that they lead their companies effectively even in the scale-up phase. Leaders must be willing to engage in continuous learning and, if necessary, bring in external experts to meet the growing demands of a scaling company.
Impact on the Company
The negative effects of incompetent leadership on a company are extensive and can have devastating consequences. A striking example is the Japanese company Olympus. In 2011, it was revealed that Olympus had been covering up billion-dollar losses through dubious acquisitions and financial irregularities for years. The leaders involved in these activities clung to their positions of power, protecting their interests while driving the company into a financial crisis. The scandal led to a dramatic drop in the stock price and a massive loss of trust among investors and customers.
Another example is the German car manufacturer Volkswagen, which was involved in the "Dieselgate" scandal in 2015. Leaders had manipulated emissions values for years to circumvent environmental standards. When the scandal came to light, Volkswagen lost billions in market value and had to pay significant fines. The incompetent and unethical leadership not only damaged the company's financial standing but also its reputation.
These examples illustrate that incompetent leadership can cause not only short-term financial losses but also long-term damage that undermines trust in the company and weakens its market position. Poor leadership often leads to high employee turnover as talented and engaged employees do not tolerate a negative work environment and leave the company. This results in substantial costs for recruiting, onboarding, and knowledge loss, further impacting the company's productivity and efficiency.
Additionally, incompetent leadership can lead to lower employee satisfaction and a poor work environment. Studies show that an unhappy team is less productive and generates fewer innovations, directly affecting the company's competitiveness. Companies like Yahoo under the leadership of Marissa Mayer faced setbacks despite initial hopes due to management decisions that negatively impacted the work environment and corporate culture.
Successful companies, on the other hand, demonstrate the importance of well-planned leadership transitions and competent leadership. Apple, for example, experienced a resurgence after the return of Steve Jobs and later under the leadership of Tim Cook. Both leadership transitions were strategically planned and executed, allowing the company to continuously evolve and innovate.
Overall, the long-term health and success of a company depend heavily on the quality of its leadership. Ineffective leaders can not only hinder operational success but also damage the corporate culture and employee engagement. Companies must proactively take measures to continuously improve leadership skills and make necessary leadership changes promptly. Only in this way can they ensure success in an ever-changing business world.
Solutions
The first step to solving the problem is early recognition of leadership weaknesses. Companies should conduct regular evaluations of leadership performance to identify problematic areas. 360-degree feedback systems, where employees, colleagues, and supervisors provide feedback, can be particularly helpful. These systems offer a comprehensive view of the performance and behavior of leaders and help identify potential weaknesses early. This is especially important in startups where the leadership may still consist of the “friends” who founded the company, and where honest feedback may not always be forthcoming.
Early succession planning is also crucial. Companies should identify potential successors and systematically prepare them for leadership roles. This can be done through targeted development programs, mentoring, and coaching. A clear plan for leadership transition minimizes uncertainties and ensures continuity within the company.
Transparency and communication are of great importance as well. Open dialogue about the upcoming leadership transition can minimize fears and resistance. It is important to clearly communicate the reasons for the change and make the process as transparent as possible. This builds trust and acceptance among employees and other stakeholders.
Continuous education and coaching are essential to prepare leaders for new challenges and expand their skills. Through regular training and development, leaders can improve their competencies and adapt to changing requirements. External consultants and coaches can provide valuable perspectives and support, especially during difficult transition processes.
A corporate culture that promotes open and constructive feedback is essential. Employees should be encouraged to freely express their opinions and concerns without fear of repercussions. This helps not only to identify problems early but also fosters an atmosphere of trust and collaboration.
The introduction of control mechanisms can also help ensure the quality of leadership. Regular audits and reviews of corporate strategies and practices ensure that leaders act in alignment with company goals. This helps to avoid poor decisions and increase efficiency.
A remarkable example of the successful implementation of these solutions is IBM. In the 1990s, IBM faced significant challenges and was in crisis. Then-CEO Lou Gerstner led a radical transformation characterized by a clear vision, open communication, and the introduction of strict control mechanisms. Gerstner relied on transparent communication and brought in external consultants to support the change. These measures led to a successful restructuring and a renewed rise of the company.
Another example is Procter & Gamble (P&G). The company has relied on systematic succession planning and leadership development for years. P&G has clear programs for identifying and promoting talent and ensures that leaders are regularly trained and evaluated. This continuous investment in leadership development has helped P&G build a stable and effective leadership culture.
Leaders must recognize that it is not just about their personal careers but about the well-being of the entire company. By acknowledging their own limitations and letting go in a timely manner, they can pave the way for fresh ideas and new growth. Ultimately, companies benefit from dynamic, flexible leadership capable of adapting and accepting change.
Here you might briefly introduce yourself and explain what you do. What makes you unique, and how can you help your customers? You don’t have to write a lot. It’s actually a good idea to keep your text short, since most people don’t read very much on a screen.
Revolution of the Robots
The future is arriving faster than we anticipated. In Peter Diamandis's book, "The Future is Faster Than You Think," he explores how emerging technologies converge to create significant breakthroughs. One such breakthrough on the horizon is in the field of robotics. As we stand on the brink of a robotic revolution, it's essential to understand the technologies propelling this change and the profound impact they will have on our world.
This article delves into the transformative potential of robotics, driven by advancements in hardware and software, and explores how these technologies are reshaping industries and society. By examining specific examples in healthcare and manufacturing, we can see how robots are not only enhancing efficiency but also redefining job roles and economic structures.
Historically, significant technological advancements have occurred when multiple emerging technologies reach a critical point of development and integration. This convergence creates a fertile ground for breakthroughs that can transform industries and societies. For robots, this convergence involves advancements in both hardware and software. While hardware developments have steadily progressed, it is the recent software breakthroughs, particularly in artificial intelligence, that are now pushing robotics into mainstream adoption.
Understanding these shifts and preparing for their implications is crucial as we navigate this new technological frontier. The following sections will highlight how these advancements are already being implemented and the broader societal changes they foreshadow.
To illustrate this point, let's consider two fields where robots are becoming increasingly evident and implemented: healthcare and manufacturing.
In healthcare, robots are revolutionizing the way medical procedures are performed, enhancing precision, reducing recovery times, and improving patient outcomes. For example, the da Vinci Surgical System allows surgeons to perform minimally invasive surgeries with greater control and accuracy. This system uses advanced robotic arms equipped with surgical instruments and a high-definition 3D camera, providing surgeons with a magnified view of the operating area and the ability to make precise movements. This technology has enabled complex procedures, such as heart valve repairs and cancer removals, to be conducted with smaller incisions, less pain, and quicker recovery times for patients.
Another example is the increasing use of robotic exoskeletons in physical therapy and rehabilitation. These wearable robots assist patients with mobility impairments, helping them regain strength and function. Companies like Ekso Bionics and ReWalk Robotics have developed exoskeletons that support patients' movements, enabling them to stand, walk, and perform therapeutic exercises. These exoskeletons are transforming the rehabilitation process for stroke survivors, spinal cord injury patients, and individuals with neurological conditions, providing them with enhanced mobility and independence.
In manufacturing, robots have long been used for tasks that require high precision and repeatability. However, recent advancements have expanded their capabilities, allowing them to handle more complex tasks and work alongside human workers in collaborative environments. Collaborative robots, or cobots, are designed to assist human workers by taking on repetitive or ergonomically challenging tasks, thereby increasing productivity and reducing the risk of injury.
A notable example is the use of cobots in automotive manufacturing. Companies like Universal Robots and FANUC have developed cobots that can perform tasks such as assembly, welding, and quality inspection. These robots are equipped with advanced sensors and software that enable them to safely interact with human workers, making them an integral part of the modern production line. For instance, cobots are now used to install door seals, mount tires, and even handle delicate electronic components, showcasing their versatility and efficiency.
The timing of this robotic breakthrough is no coincidence. It is the result of a perfect storm where hardware and software technologies have matured simultaneously. Advanced sensors and materials have made robots more capable and durable, while breakthroughs in artificial intelligence and machine learning have endowed them with the ability to learn, adapt, and perform tasks autonomously.
The increasing investment in robotics, driven by improved feasibility and return on investment (ROI), has accelerated development cycles and fostered a competitive environment where innovations are rapidly brought to market. This convergence of hardware and software advancements, coupled with growing market demand, sets the stage for a transformative era in robotics, poised to reshape industries, economies, and the future of work.
These robots are very specialized. In this article I want to delve deeper into the topic of human-like robots used as normal employees. Like you and me, like the garbage man, the postman, the factory worker and so on. Of course there are always jobs that most probably won't be replaced but these new kinds of robots come up in places where the majority wouldn't expect them at the moment.
Emerging Technologies: Setting the Stage
The journey towards a robotic future hinges on three fundamental pillars: hardware, software, and cost.
Recent years have witnessed remarkable strides in hardware development for robots. Advanced sensors and actuators have enhanced robots' physical capabilities, making them more versatile and efficient. Innovations in materials science have led to the creation of more durable and flexible robots capable of performing complex tasks in diverse environments. Additionally, breakthroughs in energy storage are enabling robots to operate for extended periods, thereby increasing their utility. Improved battery technologies, such as solid-state batteries, offer higher energy densities and faster charging times, further enhancing the practicality and efficiency of robotic systems.After being amazed by Atlas and Spot from Boston Dynamics and their impressive ability to navigate the world (I still remember watching ATLAS run a parkour course and then give a short dance performance), what has happened in the last 1.5 years has left me speechless. Seeing Optimus Gen2 gives us a glimpse of what's now coming.
The software driving modern robots has seen equally impressive advancements. Artificial Neural Networks (ANNs) and Machine Learning (ML) have revolutionized how robots perceive and interact with the world. Technologies such as LIDAR and computer vision allow robots to navigate and recognize objects with unprecedented accuracy. Advanced algorithms now empower robots to make autonomous decisions and execute tasks with minimal human intervention. Developments in natural language processing (NLP) and Large Language Models (LLMs) have enabled robots to understand and generate human language, facilitating more intuitive interactions and complex task management. When I discuss the matter with people and I show them videos from Ameca for example, they are partially shocked.
If we consider these advancements, we are getting closer to the vision Alex Proyas brought to the screen with I, Robot. The 2004 movie, starring Will Smith and featuring the character Sonny, is based on Isaac Asimov's novel. Set in 2035, the film depicted a future that seemed distant at the time but is now closer than nearly everyone thought back then.
The two most important emerging technologies—advanced hardware and sophisticated software—are finally here and advancing at a breathtaking speed. But what truly ignites this explosive progress is the significant reduction in costs. The affordability of these technologies has dramatically increased, making it possible to implement and scale robotic solutions more widely than ever before.
Emerging Technologies and Cost Reduction
The reduction in costs associated with robotic technology is a key driver of the rapid adoption of robotics. This reduction is exemplified by Tesla's Optimus Gen2, which Elon Musk states will cost between $20,000 and $30,000—a remarkably low figure for a humanoid robot. Initially, the cost of the first commercially available humanoid robots was estimated to be in the hundreds of thousands of dollars. However, several key advancements and strategic approaches have made it possible to produce these robots at a fraction of the anticipated cost.
The reduction in raw material costs has played a significant role in lowering the overall cost of robots like Optimus Gen2. The use of advanced materials, such as lightweight alloys and composites, has improved the durability and performance of robotic components while reducing material costs. Additionally, advancements in semiconductor technology have led to the production of more efficient and cost-effective chips, which are crucial for the robot's computational capabilities. According to experts, modern robots utilize sophisticated PCBA (Printed Circuit Board Assembly) manufacturing techniques, driving down costs while enhancing functionality (Source RoboticsTomorrow).
Batteries are a critical component of any autonomous system, and recent breakthroughs have dramatically improved their efficiency and cost. Solid-state batteries, which offer higher energy densities and faster charging times, are becoming more prevalent. These batteries not only enhance the performance and longevity of robots but are also becoming more affordable due to advancements in manufacturing processes and economies of scale. The transition to more energy-efficient systems, such as direct current weld guns and field bus I/O systems, further reduces energy consumption and cost (Source Automate).
Electric motors are another essential component in robotics, and improvements in motor technology have significantly reduced costs. Innovations such as brushless DC motors and high-efficiency electric drives have made motors more reliable and efficient. Tesla, with its extensive experience in electric vehicle production, has applied similar technologies and manufacturing techniques to produce the motors used in Optimus Gen2, benefiting from reduced production costs and increased scalability. Experts from HCLTech highlight that modern robots can be quickly reprogrammed and reconfigured to perform new tasks, making them highly adaptable to changing manufacturing needs, thereby reducing operational costs (HCLTech).
Tesla's expertise in mass production, honed through its electric vehicle manufacturing, is a crucial factor in reducing the cost of Optimus Gen2. By applying the same principles of large-scale production and automation to robotics, Tesla can produce robotic components at a lower cost. This includes the use of automated assembly lines, bulk purchasing of materials, and streamlined manufacturing processes. Economies of scale play a significant role here; as production volumes increase, the cost per unit decreases, making it feasible to offer advanced robots at a lower price point. Industry experts agree that this approach not only reduces costs but also enhances the scalability and adaptability of robotic solutions (IEEE Spectrum).
James Cook, an applications engineer at Stäubli, emphasizes that robots help lower building costs by optimizing space and reducing the need for extensive heating, lighting, and cooling systems. This efficiency is crucial in making robotic systems more cost-effective (Automate). Additionally, experts from the robotics community have noted that Tesla's efforts to integrate advanced control algorithms and energy-efficient designs have significantly contributed to reducing the overall operational costs of their robots (IEEE Spectrum).
Recent research supports these advancements and their impact on cost reduction in robotics. For instance, a study on the application of AI, IoT, and ML in the automotive sector highlights how these technologies contribute to cost reduction and market strategies, which can be extrapolated to the robotics field as well (Jain & Kulkarni, 2022). The integration of advanced AI and machine learning algorithms enhances the efficiency and functionality of robots, reducing the need for expensive hardware while improving performance.
Why Now?
The timing of this robotic breakthrough is no coincidence. It is the result of a perfect storm where hardware and software technologies have matured simultaneously. Increased investment in robotics, driven by improved feasibility and return on investment (ROI), has accelerated development cycles, leading to rapid innovations.
The rapid advancement in robotics is driven by several key factors, creating a perfect storm for innovation and adoption. These drivers include the above mentioned technological advancements, increased corporate investment, market dynamics, and demographic shifts beside others.
The robotics industry is experiencing a gold rush of corporate investment. Previously dominated by a few key players, the market now sees a surge of new entrants as more companies recognize the potential of emerging technologies. This influx of capital is driving rapid innovation and increasing output. Companies learn from each other's failures and successes, iterating quickly to develop more advanced and cost-effective solutions. The International Federation of Robotics reported that 2022 saw a record number of industrial robot installations, continuing into 2023 and 2024. The total robotics funding for 2023 reached approximately $12.9 billion, with an average monthly investment of $1.07 billion. This trend continued into early 2024, with $578 million raised in January alone across 46 funding rounds. According to Precedence Research, the demand for robotics is spreading across various sectors such as logistics, healthcare, and manufacturing. The industrial robotics market alone is expected to grow from $17 billion in 2023 to $32.5 billion by 2028. This growth is driven by the adoption of robots in warehouse automation, where robots move goods and materials efficiently. There has been a noticeable increase in venture capital and corporate investments in robotics startups. For instance, notable funding rounds in 2023 included Shield AI receiving $200 million for developing autonomy stacks for aircraft and Gecko Robotics securing $100 million. Additionally, companies like GreyOrange and Starship Technologies have also secured substantial venture capital investments to advance their robotic solutions.
Investments are not limited to the United States. Chinese companies, for instance, raised significant capital in early 2024, with investments totaling $229 million in January alone. This global investment landscape highlights the widespread recognition of the potential and importance of robotics across different markets
Elon Musk's announcement that Tesla's Optimus Gen2 robot will cost between $20,000 and $30,000 is a testament to these advancements. In his own words:
“People will be able to buy a robot for their parents as a birthday gift”.
Tesla CEO Elon Musk - Nathan Laine / Bloomberg / Getty Images
The remarkably low cost is achieved through Tesla's expertise in mass production, automated assembly lines, and economies of scale. Tesla's application of its electric vehicle manufacturing techniques to robotics has dramatically reduced production costs.
The growing demand for robotics across various industries has driven economies of scale, further reducing costs. Mass production of components and streamlined manufacturing processes have made robotic systems more affordable. This democratization of advanced robotics allows even small and medium-sized enterprises (SMEs) to integrate automation into their operations.
Modular design and upgradability also contribute to cost efficiency. Robots with interchangeable components can be easily upgraded or repaired, reducing long-term maintenance costs and increasing the lifespan of the robotic systems.
There's another important factor to consider, and it's one I can't fully grasp: a changing attitude towards work. People in developed countries increasingly value leisure time and prioritize work-life balance. There's a desire for shorter hours, less physically demanding or risky jobs, and more flexibility to be near family. As living standards rise, well-being and personal fulfillment become a bigger focus. Furthermore, societal trends towards greater convenience and a decrease in psychological robustness necessitate the deployment of robots to perform tasks that humans are less willing or able to do. The integration of robots into daily life and work environments is becoming a practical necessity to support human needs and maintain economic growth. We are basically desperately begging for the robots to arrive on the scene.
Beyond economic factors, demographic shifts are a major force propelling the rise of robotics. Globally, birth rates are falling, leading to a shrinking pool of younger workers. At the same time, populations are aging, with a growing number of people retiring. This creates a
These reductions in worked hours, combined with a declining and aging population, create a pressing need for automation to maintain productivity and economic stability. Robots are increasingly seen as essential to filling the gaps left by a shrinking workforce and meeting the demands of modern economies.
The Impact on the Job Market
To grasp the impending impact of robots on the job market, we can draw parallels with past technological shifts. The transition from horses to cars, which took roughly 20-30 years from the late 19th century to the early 20th century, revolutionized transportation. Similarly, the shift from newspapers to multimedia, occurring over about 20 years from the 1980s to the early 2000s, transformed information dissemination. The move from physical media to streaming services, which has unfolded over approximately 10-15 years from the early 2000s to the mid-2010s, redefined entertainment consumption.
Additionally, the adoption of smartphones revolutionized communication and information access within a mere 5-10 years, from the mid-2000s to the early 2010s. Social media platforms, such as Facebook and Twitter, drastically changed social interactions and marketing strategies in under a decade from the mid-2000s to the 2010s. The transition to e-commerce, spearheaded by companies like Amazon, transformed retail within 10-15 years from the late 1990s to the early 2010s.
Each of these transitions occurred at an accelerating pace, reshaping industries and job markets. The increasing speed of technological adoption highlights the potential for robotics to bring about similarly rapid and transformative changes in the near future.
The robotic revolution will usher in one of the most significant transformations in the job market and it might be even faster. Robots are poised to replace or augment human labor in various industries, from manufacturing to healthcare. This shift will necessitate a rethinking of job roles and skills. The rate at which new technologies are adopted is accelerating. Recent technological shifts, such as the rapid rise of smartphones and social media, illustrate how quickly innovations can permeate society. The same is expected for robots, with adoption cycles shortening as technology advances.
To navigate this fast-paced change, businesses and individuals must adopt a forward-thinking approach. Companies should invest in research and development, explore new business models, and prioritize employee training programs. Policymakers must proactively address the implications of widespread robotic adoption, ensuring that education systems evolve to equip future generations with relevant skills.
But more impotant is the very immanent preparation. If I talk to industry leaders and employers as well as observe the market, and I cant see a real preparation for this fast change coming up.
The impact of robotics on employment has been a significant area of study, with projections indicating notable changes by 2030. While exact figures vary, research provides insights into the potential scope of job displacement and transformation due to robotics and automation.
A study suggests that the implementation of robotics, such as waiter robots in the service industry, can increase efficiency, reduce costs, and mitigate health risks, particularly in contexts like the Covid-19 pandemic. These advancements highlight the dual role of robotics in both replacing certain jobs and enhancing service delivery (Mohammadnejad & Zade, 2022).
Moreover, broader projections estimate that up to 20 million manufacturing jobs worldwide could be displaced by robots by 2030. This figure is part of a larger trend where robotics and AI technologies automate routine and repetitive tasks, leading to significant shifts in the job market. While some jobs will be replaced, many roles will be transformed, requiring new skills and creating opportunities in emerging fields.
It is also important to note that while robots may displace certain jobs, they also create new ones. Industries such as robotics maintenance, AI development, and system integration are expected to grow, offering new employment opportunities. Additionally, sectors like healthcare, logistics, and retail are likely to see increased use of robotics, which will drive demand for skilled workers to manage and operate these advanced systems.
I personally don't trust these pessimistic estimates. I was once involved in a project aimed at estimating the percentage of work that would be replaced by 2030 within a specific industry. We interviewed several experts and concluded that up to 95% of our workforce would most likely be replaced (not merely enhanced) by robotics by 2030. This project took place around 2020, a time when only tech enthusiasts were discussing Large Language Models (LLMs). We were skeptical about the potential of robots like Atlas, wondering how such a large, inflexible machine could replace a warehouse worker, lawyer, or accounting clerk.
Fast forward to today, just four years later, and we see robots like Ameca and Optimus that have significantly advanced capabilities. I am now confident that the 95% workforce replacement vision will be achieved. These robots, enhanced with LLMs, human-like vision, and advanced dexterity in their hands, will be mass-produced by the end of 2026 and sold at costs comparable to that of a car.
Let's consider the average annual costs for different levels of employees, including benefits and associated expenses:
- Shopfloor Worker $45,000
- Lower Management $70,000
- Middle Management $100,000
- Upper Management $150,000
Now, if a robot costs $25,000 and can perform nearly all tasks that a human can, what economic reason would there be to employ a human? Robots can work nearly 24/7, excluding recharging and updates, and they don’t get sick or form labor unions. The economic benefits of employing robots over humans become clear when considering the lower costs and higher efficiency. This shift is not just about replacing human labor but about fundamentally transforming the workforce and the nature of work itself.
The robotics revolution is set to fundamentally alter various aspects of our society, including labor distribution and the monetary system. While I will explore these topics in depth in future articles, here is a brief overview of two potential changes.
New Labor System
The introduction of advanced robotics will revolutionize the labor market by creating a new distribution system. Robot owners will train their robots for specific tasks and then lend them out to companies. For example, if I purchase 100 Optimus robots and train them to be bricklayers, I can rent them out to construction companies, earning a fee for their services. This model benefits both parties: construction companies reduce their fixed labor costs and have access to a flexible workforce that can be scaled up or down as needed. This system also allows companies to avoid the expenses related to employee benefits, training, and downtime.
Additionally, this new labor distribution system will give rise to a market for robot worker pooling. Companies and individuals will be able to lease or rent robots for specific projects, leading to the emergence of robot management firms that specialize in providing trained robotic labor. This shift will lead to greater efficiency and productivity, as robots can work continuously without the need for breaks, vacations, or sick leave.
The Monetary System
Our current fiat money system relies heavily on the participation and belief of the populace. This system functions effectively because everyone, from workers earning salaries to retirees receiving pensions and children benefiting from social support, is interconnected within it. In countries with comprehensive social security systems, like Germany, the balance between contributions and disbursements maintains the system's stability.
However, the robot revolution poses a significant challenge to this balance. As robots replace human workers, many people may be forced out of the traditional job market, disrupting the flow of contributions into the social security system. This imbalance could push the current monetary and social security systems to their limits, as fewer people contribute while the demand for social support increases.
Despite these challenges, solutions are emerging. One potential approach is the implementation of a universal basic income (UBI) funded by taxes on robot labor and corporate profits. This would ensure that even as robots replace human workers, the displaced workforce still receives financial support. Furthermore, the increased productivity and economic growth driven by robotics could generate additional revenue to support such initiatives.
In conclusion, the next 2-3 years will bring about historic changes that will dramatically reshape the world we live in. As we stand on the cusp of a robotic revolution, the convergence of emerging technologies sets the stage for profound changes. The advancements in hardware and software are creating robots capable of transforming industries and reshaping the job market. By understanding these technologies and preparing for the future, we can harness the full potential of robotics to drive innovation and improve our lives. However, this transformation requires concerted effort and foresight from all stakeholders. I want to close with a call to action for individuals, policymakers, and producers.
Prepare for the Future: The rise of robotics and AI is inevitable, and individuals must adapt to stay relevant. Invest in continuous learning and skills development to remain competitive in the evolving job market. Embrace new technologies and seek opportunities to work alongside robots, enhancing your capabilities and productivity. Understanding and adapting to these changes will be crucial in maintaining employability and thriving in the new economy.
Facilitate and Embrace Technological Progress: Policymakers must recognize the transformative potential of robotics and AI and create an environment that fosters innovation. Blocking technological advancements could result in production shifting to other regions, leading to significant economic losses. Implement policies that encourage research and development, provide support for workforce retraining programs, and ensure that the benefits of these technologies are widely shared. Create a regulatory framework that balances innovation with ethical considerations, ensuring the responsible deployment of robotics.
Drive Innovation Relentlessly: Producers of large language models and robots and all related technologies should continue to push the boundaries of what is possible. Do not let resistance or skepticism deter you; innovation thrives on challenges. Strive to develop advanced, affordable, and accessible robotic solutions that can address real-world problems and improve quality of life. Continue to innovate and develop cutting-edge technologies. Challenge the status quo and drive progress in the field of robotics. Collaborate across sectors to create solutions that enhance productivity and address societal needs.
By working together, we can navigate the upcoming changes and create a more efficient and equitable future. The robotics revolution will transform labor distribution and challenge our current economic systems, but with proactive measures and a collaborative approach, we can harness its potential to drive innovation and improve our lives.
My business is more than just a job. Each time I take on a new project, I make sure it aligns with my core set of values so I know I can deliver great results.
How Do Managers Learn Management in the Future?
Management is an art for some, a craft for others. Being a great leader or manager isn't something you can simply learn from textbooks; it's a role you grow into through the act of doing, through leading teams, and steering companies. Experience is the irreplaceable teacher in this journey.
Reflecting on my own journey, I realize how the most defining moments were those not covered in academic syllabi. There were no classroom discussions on handling the emotional weight of talking to employees who've lost loved ones on the job, no lectures on the delicate matter of letting someone go, and certainly no exam questions on navigating the supply chain implications of geopolitical events like Huthi Rebel attacks. These real-world challenges are the forge in which great leadership is tempered.
However, the absence of a direct path to experience doesn't mean you're left unprepared for the managerial world. The landscape is rich with external resources. Traditionally, external insights for management styles and strategies have been gleaned from books, TED Talks, YouTube lectures, and conferences. However, the future of learning in management will be shaken to its ground by a revolutionary shift.
Picture this: You're facing a tough problem at work, the kind that leaves you racking your brain for solutions. How invaluable would it be if you could seek guidance from a business icon you admire? Imagine being able to ask Simon Sinek, for instance, about the best approach to deal with a specific individual or a particular issue and even brainstorm with him about the answers.
Well, guess what? By the end of this week, this won't just be a scenario to daydream about – it will be a real possibility.
According to The Verge, "GPT Stores, where users can sell and share customized AI agents based on OpenAI’s large language models, will officially launch this week, OpenAI said in an email to people signed on as GPT Builders.
OpenAI first announced at its November developers conference that it would let other people build AI agents, called GPTs, using its GPT-4 large language model. It’s only available to ChatGPT Plus and enterprise subscribers and lets people create customized versions of ChatGPT-style chatbots, ranging from one explaining Gen Z memes to one that guides people through negotiations."
Conversations with the Wisdom of the Past
Imagine being able to seek personal advice from the greatest management minds like Adam Grant, Simon Sinek, Dr. Marshall Goldsmith, Brené Brown, Peter Drucker, Jim Collins or so many others, even posthumously. This is no longer a fantasy. With custom GPTs like the distilled essence of their wisdom is now at your fingertips, ready to be consulted and conversed with. There will be tons of GPTs built using the freely available knowledge from so many great minds who live or lived on our planet.
This AI-driven mentorship model will change how new managers acquire and apply knowledge.
I tried it myself and built such a Custom GPT and loaded it with the freely available knowledge of my management idols mentioned above. I named it
How would that look like?
Let's explore how 'Philosophy of Work' can assist a new manager in navigating challenging situations with real-time, AI-driven advice.
Scenario: Fostering Team Collaboration in a Remote Setting
Manager's Query:
"I'm managing a remote team where communication seems to be breaking down. We have team members across different time zones, which complicates meeting schedules. There's also a noticeable divide between older team members who prefer email and younger ones who lean towards instant messaging platforms. I need to improve collaboration and ensure everyone feels equally involved and heard. How would you advise me to handle this?"
'Philosophy of Work' Response:
Your situation calls for a nuanced approach, integrating the principles of Brené Brown, Peter Drucker, and Jim Collins. Firstly, embrace Brené Brown's ethos of vulnerability and empathy. Address the communication challenges openly in your next team meeting, acknowledging the diversity in preferences and time zones as a strength rather than a hurdle. Create a safe space where everyone, regardless of their preferred communication method, can express their concerns and suggestions.
Peter Drucker's emphasis on effective communication in management comes into play here. You should establish a clear communication strategy that balances synchronous and asynchronous methods. For instance, rotate meeting times to accommodate different time zones fairly, ensuring no particular group is always inconvenienced. Supplement these meetings with a robust asynchronous communication plan, using a platform where emails, instant messages, and other updates are consolidated, ensuring accessibility for all team members.
Jim Collins' concept of disciplined action is crucial in implementing these strategies. Set specific, actionable goals for improving communication – for example, a bi-weekly rotation of meeting times and a monthly review of communication effectiveness. Encourage team members to hold each other accountable, fostering a culture of disciplined communication.
Finally, consider using collaborative tools that unify different communication styles, like a project management tool that integrates email and instant messaging, making it easier for everyone to stay on the same page.
Follow-Up Question:
"What if some team members resist the new communication methods or the rotation of meeting times?"
Follow-Up Answer:
Address resistance with a combination of empathy and firmness. Reiterate the importance of these changes in fostering a more inclusive and productive work environment. Encourage open feedback but be clear about the expectations and the reasons behind these changes. If certain individuals continue to resist, consider one-on-one meetings to understand their concerns better and find a middle ground without compromising the team's overall efficiency and morale. Remember, as a leader, your role is to guide and sometimes push your team towards practices that benefit the collective, even if they require some initial adjustment.
2. Scenario: Dealing with Underperformance
Manager's Query:
"I'm facing a challenging situation with a team member, Alex, who has been consistently underperforming. Alex used to be one of our star performers, but over the past few months, their productivity and quality of work have significantly declined. I've noticed that Alex seems disengaged and less communicative in team meetings. I need to address this issue without demoralizing Alex further. How would you suggest I approach this situation?"
'Philosophy of Work' Response:
"This challenging scenario calls for a nuanced approach, integrating insights from Simon Sinek, Steffen Reckert, and Adam Grant.
1. Discovering the 'Why' (Simon Sinek's Principles): Start by having an empathetic, one-on-one conversation with Alex to understand their 'why'. Simon Sinek emphasizes the importance of understanding the underlying motivations and values that drive individuals. Encourage Alex to open up about any personal or professional challenges they may be facing and what they feel passionate about in their work. This can help rekindle their intrinsic motivation.
2. Agile Adaptation (Steffen Reckert's Approach): Drawing from Steffen Reckert’s principles, adopt an agile approach to managing Alex’s situation. This might involve redefining Alex’s role to better align with their strengths and interests or adjusting their workload to manage stress better. The key is to be flexible and responsive to the needs of Alex, showing a willingness to make changes that could reignite their performance. Document performance impacts and validate with data if the change helped.
3. Fostering Originality (Adam Grant’s Perspective): Utilize Adam Grant’s insights on nurturing originality and creativity. Encourage Alex to come up with innovative solutions to their current challenges, or propose new projects they feel passionate about. This could help boost their engagement and provide a new perspective on their role. Grant's approach underlines the importance of non-conformity and creative problem-solving in revitalizing one's work life."
Follow-Up Question:
"What should I do if Alex continues to underperform, even after these interventions?"
Follow-Up Answer:
If Alex’s performance does not improve despite your efforts, it’s important to have a candid conversation about the future. Discuss the possibility of finding a role that better suits their current state or exploring professional development opportunities that could reignite their interest and skills. However, also be clear that continued underperformance cannot be sustained indefinitely. It’s crucial to balance empathy with the need for accountability and the overall well-being of the team, as advocated by these thought leaders.
Whats Next?
Of course you could now start and ask further follow up questions to dive deeper into the topic and brainstorm with the GPT.
Exploring further into the topic of AI-driven decision-making in management, the intersection of artificial intelligence capability (AIC), management, and decision-making presents a groundbreaking avenue for enhancing firm performance. A study highlighted in Frontiers underscores this potential, revealing how AIC indirectly influences firm performance through creativity, AI in management (AIM), and AI-driven decision making (AIDDM). This relationship is moderated by factors such as innovation culture and environmental dynamism.
In the context of our custom GPT tool, the implications are profound. Managers can delve deeper into complex topics and brainstorm solutions by interacting with AI. For instance, they might explore how to balance technological innovation with human-centric leadership, drawing on AI's data processing capabilities while maintaining a focus on creativity and empathy. Such AI tools could potentially help managers navigate through complex decision-making processes by providing insights based on a vast repository of management knowledge and principles. This aligns with the evolving role of AI in enhancing decision-making quality, as seen in various business domains.
Respecting Creator Rights in the Age of AI
As we embrace the revolutionary capabilities of AI in management learning, a crucial ethical question arises: What about the creator rights of the management thinkers whose wisdom is being distilled into these AI tools?
If we were to speculate on what Simon Sinek, a proponent of inspirational leadership, might say about his ideas being integrated into a GPT, we could imagine a range of reactions. On one hand, Sinek, known for his encouragement of sharing and spreading ideas to inspire action, might appreciate the broader dissemination of his concepts, recognizing the potential for greater impact and reach.
On the other hand, there's the matter of consent and compensation. Would Sinek, or any thought leader for that matter, be comfortable with their intellectual property being used in this way? This is not just about personal credit but also about the financial implications. In a world where knowledge is power and has monetary value, should there be a system in place, akin to royalties in the music industry, to compensate creators every time their knowledge is utilized?
This raises broader questions in the realm of AI and creator rights:
Consent and Acknowledgement: How do we ensure that the creators of the content fed into AI systems are properly acknowledged and have consented to this use?
Financial Compensation: Should there be a mechanism for compensating creators, similar to how royalties work in the music and publishing industries?
Ethical Use and Distribution: How do we balance the free distribution of knowledge with the rights of the individuals who originally created that knowledge?
Legal Frameworks: What legal frameworks need to be developed to protect the intellectual property rights of creators in the age of AI?
In conclusion, while AI tools like 'Philosophy of Work' offer exciting possibilities for management learning, they also bring to the forefront the need for careful consideration of creator rights. This is not just a technical challenge but a moral and legal one, requiring thoughtful dialogue and policy-making to ensure fair and ethical use of intellectual property in the AI era.
It will be very interesting where this will go and maybe I will be forced to delte my management helper tool soon, but nevertheless, this represents a paradigm shift in management learning.
Our GPT is a tool that blends the wisdom of the past with the technology of the future, offering personalized, context-specific advice. This AI-powered mentor is more than just a repository of knowledge; it's a dynamic, interactive guide that evolves with you. As we step into the future of management. My GPT 'Philosophy of Work' stands as one testament to the endless possibilities of AI in enhancing leadership skills and organizational success. This is just a glimpse into what is currently coming along our way.
Of War and Warriors - Managing in Tough Times
"Sometime they’ll give a war and nobody will come." - Carl Sandburg
In a world that's constantly changing, we're at a crossroads in how we think about our teams and leaders. This article is all about digging into that big question: In these tough times, do we need unwavering warriors or inventive creators to steer the ship? We're mixing some serious economic predictions with a dash of philosophy and real-deal workplace vibes to tackle this. It's more than just a thought exercise; it's about figuring out the best way to lead and thrive when the going gets tough. So, let’s dive in and see what kind of team we really need to make it through the storm.
In these challenging times, our companies face unprecedented pressures. The most recent World Bank's report predicts a global growth deceleration from 5.5% in 2021 to 4.1% in 2022 and 3.2% in 2023, impacting economies worldwide. The World Economic Forum echoes this, forecasting global growth to slow to 2.7% in 2023, with about one-third of the world's economy facing a technical recession. This downturn is led by advanced markets, with projected growth falling to 1.1% in 2023.
This backdrop leads companies to prepare their employees for tough times, appealing to their corporeal spirit and loyalty. Calling for warriors.
But what happens when employees resist this call to arms? What if, as Berthold Brecht suggested, the company declares war time and no one shows up?
This article delves into what employers must provide to ensure employee loyalty in challenging times and if it is really warriors we need. It's not about picking the easy path, but about finding the benefits of the hard way and understanding the types of employees in your organization.
Rather than simply outlining a list of strategies for companies, I'd like to embark on a brief exploration of the two types of individuals who make up your workforce in this times. Understanding the nature of your employees is key to discerning what will encourage them to stay.
Let's delve deeper into these employee archetypes, questioning the traditional preference for Warriors in the workplace and emphasizing the crucial role of Creators.
The Warrior Versus The Creator
The Warrior represents the traditional employee - disciplined, reliable, and adept at navigating structured, rule-based environments. They excel in execution, embodying loyalty and a methodical approach to tasks. In contrast, the Creator is the epitome of modern workforce dynamism - innovative, adaptable, and unbound by conventional norms. Creators are visionary thinkers, driven by a passion for pioneering new ideas and solutions, often thriving in less structured, more fluid environments. This juxtaposition between the Warrior's steadfast obedience and the Creator's imaginative problem-solving highlights the evolving needs of contemporary businesses, emphasizing the growing importance of creativity and adaptability alongside traditional corporate virtues.
The Misconception of Need
Many employers cling to the notion that they need Warriors - those who maintain the status quo. However, the evolving business landscape demands Creators - the innovators and architects of transformation. The essence of a creator lies in their pursuit of a higher goal, unlike Warriors who focus on immediate objectives.
Recent research shifts the focus towards employees who embody creativity, challenging the traditional preference for a 'warrior-like' adherence to orders and execution.
An IBM study, surveying over 1,500 executives, found creativity to be the most crucial factor in business success, surpassing management, integrity, and vision. This shift signifies a growing acknowledgment of creative prowess as an essential driver across industries.
Similarly, LinkedIn Learning ranks creativity among the most sought-after skills in the modern workforce, equating it with technical abilities like cloud computing. The adaptability and applicability of creative skills across various sectors underscore the increasing need for innovative thinkers who can adapt to and shape the rapidly evolving workplace landscape.
In a world where automation and robotics are taking over routine, process-driven tasks, there is an escalating demand for employees capable of conceiving new and enhanced solutions. Our world is rapidly transforming, with adaptability becoming increasingly crucial. Gone are the times when you'd land a job and stick with it indefinitely. Take, for instance, my uncle who celebrated a 50-year work anniversary – a rare feat these days. When you envision your own career path, does it mirror your long-term commitment? For most of us, the answer is likely no.
The U.S. Bureau of Labor Statistics reports that the median tenure of salaried and wage workers with their employers is 4.1 years, with a slight variation between men (4.3 years) and women (3.9 years). This same bureau also found that the average person holds around 12 jobs in their lifetime. Men typically hold 12.6 jobs, and women hold 12.3 jobs on average. Furthermore, the average person changes careers 5-7 times throughout their working life, and approximately 30% of the total workforce changes jobs every 12 months
In this evolving context, soft skills such as creativity are becoming increasingly valuable, distinguishing exceptional job candidates capable of introducing unique and pioneering ideas.
This scenario presents a conundrum where company leaders desire employees who are both warriors and creators. Nietzsche’s philosophy, particularly his discourse on “War & Warriors” in "Thus Spoke Zarathustra," resonates with this situation. He lauds the warrior’s qualities but also emphasizes their distinctiveness from creators. Nietzsche points out, “To the good warrior soundeth ‘thou shalt’ pleasanter than ‘I will.’” This suggests that those conditioned to obey - by education, societal norms, or other influences - are less likely to innovate. The need for creative ideas is critical for a company to gain a competitive edge in challenging times.
Thus, we're witnessing a paradigm shift where companies are encouraged to transition from a focus on 'warrior-like' employees, who excel in execution and compliance, to valuing 'creators' known for their innovative, flexible, and problem-solving abilities.
Keeping the Creators
In tough times, the challenge is not just to have these creators but to retain them. The three main strategies include:
Empowerment and Autonomy: Following the principles of Auftragstaktik, providing creators with the freedom to innovate is crucial. This fosters a sense of ownership and responsibility.
Recognition and Appreciation: As emphasized by Dr. Marshall Goldsmith, meaningful recognition of creative contributions is vital for employee retention.
Professional Growth and Development: Inspired by Adam Grant's ideas, offering continuous growth opportunities is key. This includes access to new projects, mentorship, and training, showing a commitment to their future.
To retain top talent, consider these questions:
Do you provide sufficient autonomy, allowing employees to challenge standards and be heard by top management?
Do your employees feel genuinely valued, as measured by engagement scores?
What development opportunities are you providing? It's about creating an environment for growth, not just providing tools.
The times call for a shift from valuing Warriors to embracing Creators. Even when the times are rough, it's about building an environment where innovation thrives, and every employee feels valued and motivated to contribute to the long-term success of the company.
The Hidden Threat in Our Companies
Within the corporate world, a disconcerting phenomenon often unfolds: Individuals who contribute little to innovation or value creation ascend to high positions. This puzzling situation arises because these individuals, commonly known as 'bad managers,' invest their energy into crafting a compelling narrative about themselves rather than creating real value for the company. This grants them a competitive edge over hard working peers who juggle between their core responsibilities and the need to sell their successes internally. The underlying question is: How does this happen?
Management often faces challenges in distinguishing between these two types of individuals. Hiring and promotion decisions are frequently made by committees with limited familiarity with the candidates. It requires exceptional people skills to discern in brief interactions whether a person has genuinely earned their successes or merely appropriated the hard work of others.
The issue lies not only in recognizing these 'bubble-talkers' but in the systemic flaws that allow them to thrive. Skilled in gaming the system for personal gain, these individuals often rise to positions where real leadership is crucial. However, when their facade crumbles, they resort to blaming others for their inevitable failures.
Assuming a position of influence inherently invites intense pressure. If you haven't acquired the necessary skills and resilience to manage this pressure, or haven't learned to effectively utilize your pressure relief mechanisms, the situation can quickly escalate to a boiling point.
Your primary objective must be to fulfill your role to the best of your ability. The stakes are high - people's livelihoods, and indeed, their overall well-being, hinge on your performance! This isn't an exaggeration. As a leader, your employees' engagement is directly influenced by your actions. Their level of engagement, in turn, impacts their mood and permeates their personal lives. If you transform someone's job into a tormenting ordeal, you must recognize that you're not just wreaking havoc on their professional life, but also causing collateral damage to their personal life.
As one ascends the career ladder, the significance of people management skills intensifies, and the absence of these skills becomes glaringly evident. When such inept managers ascend to the pinnacle, not by genuine accomplishments borne out of navigating the inherent trials and tribulations on the path to success, but by mere self-promotion, failure becomes inevitable and the chaos begins to accumulate.
Negative feedback should prompt adjustments in conduct or role removal. Regrettably, this seldom occurs due to two primary factors. First, poor managers will fiercely defend their attained status. They will never concede that they could have been mistaken or admit that they manipulated their way to the top. Second, as decision-makers in organizations, we depend on feedback. However, if this feedback isn't truthful and aimed at uncovering shortcomings and errors, it loses its value.
When people perceive that providing candid feedback is discouraged, competent individuals distance themselves, leaving a void filled by underperformers. Remaining flatterers adapt and applaud every action, losing touch with reality. The dangers of surrounding oneself with sycophants can lead to poor decision-making and a disconnection from reality, as demonstrated by historical examples like Kim Jong-un's regime in North Korea and various dictators throughout history. Kim Jong-Un's regime is notorious for its strict control over information and the severe punishment of dissent. This environment fosters a culture of sycophancy, as those around him are often too fearful to provide honest feedback or challenge his decisions.
Kim Jong-un's leadership style has led to a situation where he is often surrounded by individuals who constantly affirm his decisions, regardless of their actual merit or the potential consequences. This lack of honest feedback and critical evaluation can lead to poor decision-making and a disconnect from the realities faced by the people of North Korea.
Another source, a book review in The Guardian of "How to Be a Dictator" by Frank Dikötter, mentions how dictators like Mussolini, Hitler, Stalin, Mao Zedong, Kim Il-sung, and Haiti's "Papa Doc" Duvalier, have all surrounded themselves with sycophants, leading to disastrous consequences for their countries.
These examples illustrate the dangers of leaders surrounding themselves with flatterers and yes-people, as it can lead to a distorted view of reality and poor decision-making. It's a cautionary tale for any leader, reminding them of the importance of fostering an environment where honest feedback is valued and encouraged.
Niccolò Machiavelli once remarked, "There is no other means of guarding oneself against flattery than by letting men understand that they will not offend you by speaking the truth."
If you cultivate and sustain an environment of trust, people will feel at ease to convey even the most uncomfortable truths to you or the skip level manager. That's when you know you're on the right path. Once you're cognizant of an uncomfortable truth, you must make a concerted effort to address it.
So, if you find yourself surrounded by sycophants, you're in a significant trouble, and this trouble is of your own making. You must rectify this flaw at the earliest. Positive feedback is beneficial if genuine, but demanding or rewarding it exclusively can lead to detrimental outcomes. The moment feedback ceases to be about WHAT and HOW and becomes solely about WHO, it's time for you to introspect and engage in a serious conversation with yourself.
Avoid allowing autocrats to steer your organizations, as they will inevitably lead to their downfall, much like their real-life counterparts do to their nations. This primarily occurs through the disengagement of your workforce and the erosion of relationships with your stakeholders.
Leadership is not about authoritarianism; it is about inspiring and enabling others to achieve greatness. By embodying these principles, organizations can cultivate effective leadership and avoid the downfall associated with inept management or as Dwight D. Eisenhower once said, "You do not lead by hitting people over the head — that's assault, not leadership."
Do you feel valued?
Navigating Value and Appreciation in the Modern Workplace
In the ever-evolving landscape of modern business, understanding and fostering a sense of value and appreciation among employees is crucial. I want to describe some concepts, exploring how they impact employee engagement and satisfaction.
Lets start with some data:
- 41% lower quality defects
- 64% lower safety incidents
- 28% lower theft rate
- 81% lower absenteeism
- 14% higher productivity
- 23% higher profitability
Is this something you would be happy to see amongst your employees? So you should make sure that they feel engaged. Feeling valued is at the heart of engagement. The above mentioned KPIs are the effects of engagement according to the Gallup Engagement Survey.
Understanding the Dynamics of Workplace Value
At the heart of employee satisfaction and engagement lies a critical question: Do employees feel valued? This inquiry transcends mere acknowledgment, diving into the intrinsic worth that individuals contribute to their roles. The subjective nature of value in the workplace is similar to how we might value everyday objects differently depending on our circumstances and needs.
A value is always an agreement between two parties based on their needs. Lets look at this from the other point of view: How much are you worth to your company?
You get your salary, let's say you get $50,000 a year - your value now is $50,000. But what are you giving back to the company? Is it worth $50,000? Are you developing a product that sells and generates revenue that would cover all the costs associated with you, plus a little bit more to make a profit as well? Have you done projects that save the company $50,000 or more per year in costs? Your value is created by you and determines your feeling of worth.
Let's say you did a great cost savings project and helped the company save $100 million. At some point, you'll start to wonder if your value to the company is really "just" the $50,000 they're paying you, right? Then it's time to kick down the door to your boss and ask for a hefty raise, right? The answer to that is not so simple. After all, if they made 100 million in savings, surely you should get at least 50 million of that. Fifty-fifty, that would be fair.
However, if your job was to save 200 million, then the deal you made with your company was that they would give you 50k for saving them 200 million. However, you actually "only" delivered 100 million, which technically reduces your value to 25k. The tricky thing is that you could have also said from the beginning that this deal is not fair, and you want at least 100k. The value is a given. The company puts a value on the job you are doing and so do you. At a certain point you agree, and the contract is sealed.
The Challenge of Aligning Perceptions of Value
However, aligning perceptions of value is often challenging. Vague job descriptions, unclear goals, and sporadic feedback can lead to a mismatch between expected and perceived value. This gap can lead to employee dissatisfaction, as individuals struggle to understand and fulfill their roles effectively. Moreover, psychological tendencies like the Dunning-Kruger effect show that people often overestimate their contributions, adding another layer of complexity to this issue.
Leadership's Role in Value Creation and Recognition
Leadership plays a crucial role in navigating these complexities. Managers must ensure clarity in roles and expectations, defining what constitutes value in specific contexts. Recognizing both tangible and intangible contributions is key to creating a work environment where every team member feels valued and appreciated.
Beyond monetary compensation, the spectrum of value in the workplace includes other forms of recognition, such as support, opportunities for growth, and a sense of fulfillment. Understanding these non-monetary aspects is essential in creating a positive and engaging work environment.
Effective communication of value is essential. Employees who understand and can articulate their value are more likely to be recognized and advance within their organizations. This requires self-reflection and honesty, enabling individuals to objectively evaluate their contributions and communicate their value effectively.
Aligning Personal Goals with Organizational Objectives
Aligning personal goals with organizational objectives is critical for creating a sense of value and purpose. When employees resonate with the company's vision and goals, their sense of contribution and fulfillment deepens. This alignment, coupled with a broader understanding of value, is vital for a harmonious and productive work environment.
In conclusion, understanding and fostering a sense of value and appreciation in the workplace is a multifaceted challenge. It requires a continuous dialogue between individual self-worth and organizational needs. Leaders and employees alike must navigate this landscape, recognizing that feeling valued is not just a personal desire but a fundamental component of organizational success and harmony. This journey of mutual appreciation and understanding is crucial for building a resilient, motivated, and engaged workforce in today’s dynamic business environment.
The Power of Your Network
How the People Around You Shape Your Success
In the world of business and entrepreneurship, we often come across Jim Rohn's popular quote: "You are the average of the five people you spend the most time with." This statement underscores the profound influence our social circles have on our personal and professional growth.
However, a thought-provoking article by David Burkus challenges the notion of limited influence. Citing research by Nicholas Christakis and James Fowler (Framingham Heart Study; doi:10.1136/bmj.a2338), Burkus argues that our social influence extends beyond our immediate circle. The happiness and behaviors of our friends, and even friends of friends, can shape our own attitudes and actions - just as we can influence theirs.
This broader social influence has significant implications for entrepreneurs and business leaders. The larger your social network, the more diverse the influences on your behavior and mindset. However, this diversity can dilute the concentration of success-oriented values and behaviors in your network. And it also heavily depends on who is in the network.
As Burkus is writing in his article:
“[...] But if your friend of a friend of a friend is happy with their life, then you have a 6 percent greater likelihood of being happy yourself. Now six percent might not seem like much, but consider that other studies suggest that if I gave you a $10,000 raise, that would only trigger about a 2 percent increase in your happiness.”
Taking these studies into consideration, it becomes clear that the people around you have a tremendous influence on you, and you should choose wisely who you include in your inner circle, as their friends also influence you, and even the friends of their friends.
The question that was on my mind now was: how likely is it that the people around you are already as successful as you want to be? How likely is it that the people around you are as intelligent as you want to be? Again, consider all of them! The probability is pretty low - especially if you set your sights very high. The values that make for very successful people are spread very thin, which leads to a simple indirect correlation. The bigger your social network gets, the less likely it is that it will help you achieve your goals. And the larger the sample size, the more likely it is to tend toward the mean (Law of the high numbers). If you are surrounded by the mean, the probability of ending up or staying at the mean increases.
Management literature likes to claim that the "brutal truth" about successful people is that they are lonely or alone. I disagree, they are not lonely because they are successful. No, they are successful because they are lonely. It's because successful people set a very high standard for themselves and the people around them, and there simply aren't many to choose from.
However, it's important to acknowledge that these considerations mainly apply for those striving for extraordinary achievements. Not everyone aspires to be a CEO or a world-class athlete, and that's perfectly acceptable. Life is about balance and finding what makes you happy and fulfilled. For those aiming for exceptional success, a more disciplined and focused approach is often necessary.
This doesn't mean you should isolate yourself or shun social activities. Rather, it's about making conscious decisions about who you spend time with and how you allocate your time. It's about understanding the trade-offs and benefits of your social interactions and making decisions that support your goals.
In the words of Friedrich Nietzsche's character Zarathustra, successful people are not lonely because they are successful; they are successful because they are selective. They focus on creating value and surround themselves with individuals who appreciate and contribute to that vision .
This perspective may initially seem anti-social or self-centered, but it's about prioritizing personal growth and success. It's about understanding that your time and energy are limited resources, and using them wisely can lead to greater success and fulfillment.
So, take a moment to evaluate your social and business network. Are the people around you supporting your growth and success? Are they challenging you, inspiring you, and pushing you to be better? If not, it might be time to make some changes. Remember, your success ultimately lies in your hands. Choose wisely, act consciously, and manifest the success you envision.
Understanding the impact of our social circles on our journey to success is crucial. Let friends be true friends, but if you confuse the words follower and friend, sooner or later you'll learn that friends don't follow you, they lead you.
The Wisdom of Evaluating Dreams: Insights from the Hedgehog Concept
The secret of truly succeeding in our chosen fields? It's more than just raw passion. 🌟 Dive into this piece exploring Jim Collins’ Hedgehog Concept and discover how to align dreams with achievable reality. Let me know your thoughts 😊
In the myriad of modern aspirations, Jim Collins’ Hedgehog Concept, highlighted in his book "From Good to Great," emerges as a guiding beacon. It steers us towards anchoring our desires within the sphere of the achievable. This concept resonates through real-life discussions and personal experiences, shedding light on how a realistic approach often paves the path to success.
A recent conversation with a friend’s son brought this concept to life. The young man was enchanted by the idea of becoming a game streamer, inspired by the success stories of individuals who have managed to turn their gaming passion into lucrative careers. His eyes sparkled as he spoke about streaming his favorite game, Fortnite, and building a community of followers. However, a deeper dive into this aspiration revealed a rough road ahead.
He was extremely passionate about the game and loved watching his favorite streamers while playing. I asked him how successful he is and there was the first barrier. He was not bad at playing, but also not amazingly good. In a normal battle royal, which includes 100 random players, he would usually make it to the top 30 or 40 players. So not world class. Not even top quartile. And inferring from that, what would be the chances of people wanting to watch his streams if he is not the best? What could they learn from a slightly above average player? So the potential commercial success was low at best, and probably impossible. Unless he has the time and resources to dedicate himself to becoming #1, every time, he should not go for it.
I also tried another analogy to make my point a bit clearer. If you take 100,000 people who study medicine and 100,000 people who want to become gaming streamers and compare the potential for success, you get a quite clear picture. The success quote for medicine students is around 95%. So nearly everyone who arrives at studying medicine will become a doctor in the end. Only 5,000 people out of our initial 100,000 would stop. Doctors in the US would arrive at an average annual salary of around $313,000 according to the Medscape International Physician Compensation Report from 2019. So pretty good outlook I would say. With Doctors, the “filter” is at the beginning: getting into medical school is hard, but once you are admitted, you have made it. And if you don’t get into med school, you still have a biology or chemistry degree to use for something else.
How is that now for Streamers? The average salary of the streaming stars in our region is between $150,000 and $750,000. That would be quite comparable to doctors. But the crux lies in the success quota. According to “The Verge”, only around 10% of the streamers on Twitch (which is today the most successful streaming platform) make more than $100,000 a year. To reach the mentioned $313,000 a doctor makes, according to a rough calculation, you would need around 2,000 viewers on average per month. According to Twitchtracker.com this is achieved by the top 1,300 streamers out of seven million! So the success rate here is at 0.0002%. Here, there is no filter at the beginning. Anybody can try, but only a very few succeed. And what do you have if you fail? A nice room in your parent’s basement until you can finally afford an apartment of your own at 35.
So I unfortunately had to tell the young one that becoming a streaming hot shot is possible, but the likelihood of getting rich with it is close to zero. To become a doctor if you are passionate and hard working is way more likely than becoming a famous streamer. Becoming a doctor is under your control and not dependent on so many different circumstances.
This wasn't the happiest day for him, but it is better to face the reality here than to waste your energy or hope for something happening. You could still discuss the idea of becoming a streamer after you became a doctor and combine it and stream your work, that might be even better. The pre-med student has backup opportunities too.
You should also ask yourself about the things that you do at the moment and be honest with yourself. What can you achieve on your own initiative? What can your team achieve? Don't wait for someone or something to tell you what to do. Take it into your own hands and don't shy away from the hard stuff.
My personal journey resonated with this lesson in realism. I too harbored a dream that was more of a fantasy—traveling to Mars or at least the Moon. I am deeply passionate about flying to the moon, but my current physical condition with a spinal disk error would make me a poor candidate for a trip and it would be exorbitantly expensive and mean financial ruin. A clear and data driven result following the hedgehog concept. I will not fly to any extraterrestrial planet or satellite in the foreseeable future and thus will not spend anything else than a dream on it. Dreams are fine for fun. They can even guide your priorities. But plans are how we succeed.
But what about writing a book? I’ve always wanted to share all these things I’ve witnessed during my career, the positives and the learnings from the negative. All my ideas about management philosophy. Is it a dream or part of a plan?
Am I deeply passionate about it? For sure. Could I become great at it? There is at least a chance that the ideas might resonate with people, and it could become a great engine for a lot of people, so yes. And could it lead to commercial success? If the book sells even moderately well, it might pay for the time I put into it. And even if it doesn’t, a published book could boost my consulting credentials. So, the decision should be clear, put time and effort in and do it.
This led to a shift in focus. I decided to pen down my experiences, insights, and the management philosophies I had gathered over the years. Writing was not only a passion but also a domain where I could excel and potentially secure a financial return. The exercise of writing the book was enriching, fulfilling, and most importantly, grounded in reality.
The contrasting stories of the aspiring streamer and my personal venture into writing underlined a common lesson—success often demands a realistic evaluation of one’s abilities, passions, and the financial implications. While dreaming is easy and chasing fantasies is exhilarating, anchoring our aspirations in the realm of the achievable is often the wise path to success.
The Hedgehog Concept beckons us to be honest with ourselves, to evaluate the alignment between our dreams, abilities, and the reality of economic sustainability. It's not about curbing one’s dreams but steering them towards a horizon where they can manifest into tangible success. Whether at a career crossroad or at the cusp of chasing a new dream, a moment of realistic reflection could be the stepping stone to a fulfilling and successful journey.
Beyond the Fast Track: The Misconception of Rapid Promotions
Navigating the career landscape is akin to traversing a labyrinth; knowing when to change direction is crucial. Reflecting on some insights from my career and studies I want to share some thoughts on the dynamics of transitioning through varied roles in our professional journey.
Knowing When to Move On
We kick off with a philosophical note, likening career transitions to Nietzsche's metaphor of knowing the 'right time to die'—a dramatic portrayal of bidding adieu to old roles to welcome new ones. A story of one of my past VP’s advice at Amazon against sticking to the same position for over two years to avoid complacency echoes this sentiment. The essence isn’t about leaving your company, but reshuffling your role to keep the learning curve steep and the excitement fresh.
Keep the Wheels Turning
A buzzing organization is depicted as a self-rolling wheel, constantly churning with new projects and ideas. And if things seem stagnant, it’s up to us to reignite the momentum. Injecting fresh ideas, sparking discussions, and backing innovative teammates can unveil exciting prospects for the whole team. It’s about nurturing a culture where challenges are greeted warmly as they spark innovation.
Beyond the Comfort Zone
A personal story about considering a career in craftsmanship while also exploring academic and corporate goals highlights an important concept: just because you excel in one area doesn't mean you won't shine even brighter in another. Years ago, I was a skilled craftsman, even securing second place in a national competition. But did that mean I should have solely pursued craftsmanship? I pondered, believing that even if I was proficient in this craft, there could be other areas where I might excel even more. The story nudges us to step beyond our comfort zones and explore potentially larger vistas and underscores the essence of seeking beyond the known, beyond the comfortable.
The Long Game in Career Progression
Here’s where it gets interesting. Drawing from an analysis of top executives in DAX 30 companies Dr. Georg Kraus, it's highlighted that on average, it takes about 22 years for these individuals to reach the pinnacle of their careers, becoming CEOs. The detailed analysis portrays a picture of measured progression, with executives being around 53 years old on average and having spent about five years in their role. They were typically appointed as CEOs around the age of 48, having climbed through about six career levels to reach there, post a starting age of roughly 26 post-studies. This translates to about 3.7 years spent per career level on average, painting a picture of steady, paced growth.
Let's break it down with a simple calculation. At a major online retailer where I once worked, the entry-level for managers was Level 5, while the CEO was at Level 12. Notably, Levels 9 and 11 did not exist. So, in theory, I would need six promotions to reach the CEO position. That doesn't seem like a lot. However, if you spread that over an average of 22 years, it equates to about 4.5 years per job level. If you apply the logic that promotions come quicker in the early stages and slow down as you progress, you can develop a realistic timeline to gauge how hard to push at each level. I hope this perspective helps many managers, especially the younger ones, to understand that it's not realistic to expect a promotion every year.
This analysis busts the myth of rapid ascensions and underlines the importance of a balanced pace in career transitions. Continuity, especially in senior roles, is emphasized as vital for building trust and engagement with subordinates. Yet, the narrative also cautions against overstaying in a role to the point of blocking others’ career paths.
Mapping Out the Journey
Building a roadmap of our career aspirations can provide a realistic gauge of the pace at which we should be transitioning through roles. Especially for those early in their careers, the allure of rapid promotions can be enticing, but a more measured, thoughtful progression might render a more fulfilling and rewarding journey.
I hope these reflections offer a nuanced view on orchestrating our careers with a blend of ambition, patience, and well-timed transitions. It’s a gentle prod for us to keep evolving, not merely for personal growth but also for fostering a spirited and innovative work environment.
" Many a man also grows too old for his truths and victories; a toothless mouth no longer has the right to any truth.
And everyone who wants to have fame must say goodbye to honor at times and practice the difficult art of - going at the right time." - Friedrich Nietzsche
Embracing Pain: The Unconventional Path to Success
Canadian-American motivational speaker Brian Tracy identifies three primary adversaries of success: the comfort zone, learned helplessness, and the path of least resistance.
However, from my point of view, these enemies can be distilled into a single, formidable foe: the avoidance of pain. In this article, we explore the transformative power of embracing pain as an unconventional yet essential path to achieving remarkable success.
Ordinary individuals often shy away from challenges due to the associated pain, whether it manifests as mistakes, losses, stress, conflicts, or physical discomfort. This deep-rooted aversion to pain is so ingrained that those who willingly endure it, such as tattooed individuals or elite athletes, are often viewed with suspicion or awe.
A 2017 study titled “Tattoo or taboo? Tattoo stigma and negative attitudes toward tattooed individuals” by Kristin A Broussard and Helen C Harton, published in The Journal of Social Psychology, found that tattooed individuals, particularly women, were perceived as stronger and more independent, but were also rated negatively on other character attributes. This stigma persists despite the increasing prevalence of tattoos in modern culture.
Similarly, the journey to athletic excellence is fraught with physical and psychological challenges. It demands exceptional courage, unwavering willpower, and oftentimes, a solitary journey. The path to success, whether in sports or other fields, is inevitably marked by pain and discomfort.
The pain experienced on the path to success is both inevitable and necessary. It's not the pain itself that we seek, but the exceptional results that come from enduring it. Accepting pain as a measure of personal growth can lead to extraordinary outcomes. It becomes an active choice: to live comfortably with average results or to strive for greatness, inevitably accompanied by pain
The majority of people don't have grand plans in life. Their goals are often modest: finding a good partner, raising children, living in a comfortable home, and earning a decent income. However, for those whose dreams are larger, the path to success may involve a significant amount of pain and suffering.
Consider the process of setting and achieving ambitious goals, which often requires stepping outside of one's comfort zone and embracing challenges. This could involve starting a new business, pursuing a demanding career, or working towards a significant personal transformation. Each of these paths is likely to involve a considerable amount of discomfort and pain.
The journey towards achieving these ambitious goals will undoubtedly involve overcoming numerous obstacles and navigating difficult situations. Though painful these experiences present invaluable opportunities for personal growth and development. They involve tackling challenging work environments, resolving conflicts, or learning from one's own mistakes and misjudgments.
In each case, the pain and discomfort experienced along the way are not just inevitable but also necessary. They serve as catalysts for growth, pushing individuals to develop resilience, adaptability, and other vital skills that are crucial for success. While the process might be tough, the rewards - achieving one's goals and realizing one's full potential - are well worth the struggle.
In conclusion, the worst enemy of success are not external factors, but the individual's own reluctance to embrace discomfort and grow from it. The path to success often involves stepping out of your comfort zone, confronting challenges head-on, and learning from the experience. So, stop complaining about problems or looking for excuses - instead, see them as challenges and climb the damn wall! The only person who could have stopped you in this way was yourself. Your potential for growth lies within your own hands, waiting to be unlocked every day.