The Human Resource Practitioner and the Entrepreneurial Spirit

Introduction

With the coming of the second machine age, the human resource function in the 21st century faced an uphill task of dismantling the structures set up by the organization man and infusing the entrepreneurial spirit into the organization. The future of the human resource lies in creating the individualized organization. Read “The Individualized Corporation” written by Sumantra Glosal and Christopher A Barlett to have a sense of why I say this.

Understanding Entrepreneurs and Business Results

Entrepreneurs are individuals who choose or by life circumstances work for themselves by offering a service or product for sale. The priority for the entrepreneur is his or her mission, but he or she knows that for the business to grow and sustain the business, there must be returns on his or her time and other resources that are spend on starting and running the business.

The Entrepreneur as An Opportunist

The entrepreneur is alert and actively hunts for opportunities to fulfill his or her mission and at the same time ensure that there ARE enough resources being recouped to sustain his or her efforts.

The Importance of Time and Timing to the Entrepreneur

Entrepreneurs understand the value of time. Peter F.Ducker expressed it in this way: Effective executives know that time is the limiting factor. The output limits of any process are set by the scarcest resource. In the process we call “accomplishment,” this is time.

Time is also a unique resource. Of the other major resources, money is actually quite plentiful. It is demand for capital, rather than the supply thereof, which sets the limit to economic growth and activity.

People – the third limiting resource – one can hire, though one can rarely hire enough good people. But one cannot rent, hire, buy, or otherwise obtain more time.

Time is totally perishable and cannot be stored. All work takes place in time and uses up time. Effective executives are distinguished by their tender loving care of time. People are time-consumers. And most people are time-wasters.”

The Entrepreneur’s Need for Hiring People

Entrepreneurs know that to grow a business, he or she needs to hire people. Employees, on the other hand exchange both their time and efforts for money from the entrepreneur.

Robert Kiyosaki, author of Richdad’s cash flow quadrant explained the B-quadrant of his cash flow quadrant:

  • B-quadrant (business) people are always looking for good people and good business systems. They do not necessarily want to do the work. They want to build a business to do the work. A true B-quadrant entrepreneur can grow his or her business all over the world.
  • Years ago, my rich dad told me, “Hire people who are mission-driven–people who share your vision. If you don’t, your business will struggle, or may never even get off the ground.” He also said, “Big business can afford to hire managers and employees. Entrepreneurs need to hire missionaries.” When I asked my rich dad for further clarification on hiring people with a passion for your mission, he simply laughed and said, “If you own a butcher shop, don’t hire vegetarians.”
  • If you choose to grow your business, being able to lead and manage people is one of the most important skills you can possess. As the number of people grows, the number of relationships grows – and grows exponentially once you have four people in the business.

Napoleon Hill said the same in chapter 6 of his book “Think and Grow Rich” : Ally yourself with a group of as many people as you may need for the creation, and carrying out of your plan, or plans for the accumulation of money 

At the age of 13, Warren Buffett got a job delivering newspapers and through innovative marketing and distribution strategies, he served 500 customers a day by hiring other neighborhood kids to do the delivery for him.

The Industrial Revolution, Creation of Jobs and Redundancies

The industrial revolution was the first machine age. We are already in the second machine age. In the first machine age, mass production brought wealth to both business owners and investors. It also created the middle-class and many low-wage jobs.

In his 25 July 2007 article “The Industrial Revolution’s Impact on American Society” in Yahoo Voices, Joshua McMorrow-Hernandez wrote:

“Principally, though, the result of the Industrial Revolution is that, through making more efficient the production of manufactured goods, it helped to reduce the costs of commodities for consumers, thus allowing many items once considered luxuries to become attainable for vast segments of our population……….. Another benefit of the Industrial Revolution in this sense is that many jobs were created to fill the needs of assembly lines and machinery operation…………While the Industrial Revolution certainly did provide many jobs to scores of people, and the Market Revolution that would result began to produce the middle-class, the sad reality is that the vast majority of the jobs created by the Industrial Revolution were low-wage positions that barely allowed workers to subsist.

Indeed, among the select group of people to financially prosper from the Industrial Revolution ……………were the investors and owners of the companies and factories that flourished during the era.

Furthermore, it seems that the climate for upward economic ability was largely dependent upon as to if one, say an artisan for example, worked independently or for a company. For many skilled craftsmen who were able to work outside of areas where factories handled much of the manufacturing duties or for those who launched their own businesses, their economic realities were in their own hands, and many such people did quite well. However, for a major percentage of artisans who ended up working for major and prevailing manufacturing entities, wage-earning (and work hours) were dependent on the commands of the bosses and company owners.

One also finds that being such a worker often meant a dozen hours of laboring per day for very little money. Furthermore, the Industrial Revolution kept many poor workers poor while many wealthy people became wealthier.”

Although the industrial revolution created jobs and the middle class, the arrival of the first machine age lowered wages of the lower income group and made jobs redundant.

The arrival of the second machine age stagnate the wages of the median income group and made other types of jobs redundant. For more details, read “Baxter and the Second Machine Age” written by Erik Brynjolfsson and Andrew McAfee (https://medium.com/science-and-technology/c9702574a525). Watch the related youtube video (http://www.youtube.com/watch?v=kum_7D9EORs)

The Need for Hiring Managers

The factory also led to the growth of the management function. The ASQ (American Society for Quality) website wrote: “The factory system, a product of the Industrial Revolution in Europe, began to divide the craftsmen’s trades into specialized tasks. This forced craftsmen to become factory workers and forced shop owners to become production supervisors, and marked an initial decline in employees’ sense of empowerment and autonomy in the workplace.”

In his 25 October 2009 article “Robert Kiyosaki on the Right People to Grow Your Business” in Entrepreneur South Africa said: “Growth requires people…….As the number of people grows, the number of relationships grows……Many businesses grow by adding employees, then contract because they fail to grow internal communications systems and procedures. Instead of employees working together as a team to serve their customers, the exponential number of relationships causes internal chaos.

One of the problems with exponential growth of relationships is that it requires managers and leaders with exceptional people skills. But many entrepreneurs make the mistake of hiring team members who have great technical skills but lack equally great people, communication and leadership skills.”

The Organization Man

While employed by Fortune Magazine, William Hollingsworth Whyte (1917–1999) did extensive interviews with the CEOs of major American corporations such as General Electric and Ford. From his insights, he wrote the book The Organization Man

In the 1950s, American business was booming and big companies were becoming more and more dominant.  These companies created a huge demand for white collar workers.  These jobs were filled largely by men who had just lived through World War II and at least parts of the Great Depression.  

They were American workers who In exchange for a lifetime of financial security and a “soothing” sense of belonging had become conformists. They gave up their creativity and individuality for collectivism and spends their entire careers climbing the ladder (or not), dedicating decades of their life to the service of one firm. This system led to risk-averse executives who faced no consequences and could expect jobs for life as long as they made no egregious missteps.

Whyte wrote:  “They are not the workers, nor are they the white-collar people in the usual, clerk sense of the word. These people only work for The Organization. The ones I am talking about belong to it as well. They are the ones of our middle class who have left home, spiritually as well as physically, to take the vows of organization life, and it is they who are the mind and soul of our great self-perpetuating institutions. Only a few are top managers or ever will be. In a system that makes such hazy terminology as “junior executive” psychologically necessary, they are of the staff as much as the line, and most are destined to live poised in a middle area that still awaits a satisfactory euphemism. But they are the dominant members of our society nonetheless. They have not joined together into a recognizable elite–our country does not stand still long enough for that–but it is from their ranks that are coming most of the first and second echelons of our leadership, and it is their values which will set the American temper.”

Whyte lamented on the emergence of the group.  “People very rarely think in groups; they talk together, they exchange information, they adjudicate, they make compromises.  But they do not think,” he concluded: “They do not create.” 

The Los Angeles Times dated 9 December 1987 carried the article The Organization Man–Big Changes Since the ’50s. It wrote “They saw how their fathers had been betrayed, how they had worked 60-70 hours a week, or had been moved across the country every few years without ever questioning it, only to be fired because of a corporate buyout, oil shock or restructuring.”

The Organization Man and the Entrepreneur

Kim Kiyosaki wrote in her 13 February 2014 article “Thinking Like An Entrepreneur” differentiates the thinking of the organization man and the entrepreneur.

The thinking of an employee:

  • Values the security and guarantee of a steady paycheck over the uncertainty of greater wealth
  • Prefers a job with few problems
  • Dreadfully fears making a mistake
  • Strives for a higher paycheck and job promotions
  • Values time on the job over results

The thinking of an entrepreneur:

  • Operates without a safety net and knows there is no guarantee of a paycheck and may work for years without paying herself
  • Gets paid for solving problems
  • Looks for new answers and new challenges and is always learning
  • Is willing to make mistakes and learn from them
  • Is driven by passion and purpose, and has a mission
  • Knows that results are what counts, no matter how much or how little time it takes

The Future of the Human Resource Function and the Challenges

To have a future, my personal view is that the human resource function has to re-kindle the entrepreneurship sprit in all employees. I believe that we can do this by:

  • Dismantle the structure and system created by the organization man
  • Refocus not on profits but doing what contributes to society
  • Give everyone the voice and the control to create the future
  • Share the responsibility and the gain of taking actions to sustain everyone’s livelihood
  • Allow for learning and growing
  • Put back human respectability and dignity
  • Give back to the community

The challenges will be from handling organizational power and politics as the HR function makes the switch. Here are some of my learning points.

It is about results and wanting to make a difference It has become the de-facto practice that when a business does not do well, management continues to keep their job but employees are being laid off. However, this as a cost cutting measure has repercussions. Examples are falling employee morale; increased staff turnover, with better staff leaving first; falling productivity; less people are available to look into customer concerns; less people are available to do the work in times of upturns.

For the entrepreneur, it is about results. If a business is not doing well, it is the person that is running the business that is to be blame.

Simplicity in organization structure Keep business units small, for example 70 people so that you won’t have a need for a matrix structure and a hierarchy.   

The bigger the unit, the more messy everything seems to be.

Small enough to know everyone personally If you want to tap on someone’s strengths, you only can either see that in what you let him or her work on or you know it from through another source. The work can be stretch assignment or assignment outside the person normal scope of work.
Use teams and roles for structures (Read up on James Barker’s self-managing teams) Avoid hierarchies. In doing so, you reduce the problems with hierarchical management. You take away the grapevine and minimize the problems with coercive power. Leave hierarchical structures for the military and governmental organizations.

Hierarchical management relies on formal rules and authority. The supervisor checks that instructions have been followed. It is sometimes this coercive power that cause employee to leave the organization (People don’t quit jobs, they quit their bosses)

Tap on technology to get everyone organized and aligned as well as for productivity Use technology for alignment. You don’t need to pay for expensive enterprise systems. Use a well tried system from a company that continuously listen to their customer and improve their product. With advances in technology, you choose a good system for each function and interface them to let them talk. In the case of HR system, a single database improves administration.
Focus on the basics Do the basics really well before trying the latest management fad.
Meet to talk

 

Business units can always meet not necessarily in person to exchange information and ideas or to work in projects. This is where the value of being in the internet is realized. Being small means communication is simple.
Hire nice people and people with passions for the business. Make work fun and meaningful. When you have to spend a minimum 8 hours at work, you actually spend more time with your colleagues than your family and with your work rather than with your personal pursuits.

When you hire a nice colleague, you minimizes the chances of having to deal with a toxic work environment.

When you hire a person who has found his or her calling, you will feel the energy, focus, excitement in the workplace because his or her heart will be on the work. He or she will be willing to go through difficulties to materialize an idea.

Work with Partners Outsource what you cannot do well; what you do not find fun to do; or when there are other people who can do it better than you.
Getting everyone on the same page Revamp compensation and benefits scheme that currently rewards differently and stroke egos for example do away with car parks for top management, periodic incentives.

The aim is to get everyone on the same level or class; to allow anyone to voice their questions, opinions, cast their votes, voice their ideas.

No special treatment for being a leader There are people who just talks. There those who just do. Then there are those who do both talk and do. This is to say people who are able to lead may not be able to carry out the plan. Those who are good at both have the same amount of hours as everyone else. In the end, everyone is the same.
Let each individual and the team be responsible for the livelihood of the team members Business strategy and planning should be everyone’s concerns. Anyone should be given the rights to challenge old assumptions and ways of doing things and even business areas, products or services.

This means sharing with everyone the financial results of the company.

The tertiary institutions has already done the job educating people to think, so give them a chance.

Letting people who know how to run a business and understand the business run the business Companies that do strategic planning seldom spend time to do the research to understand their business situation, especially talking to customers
Provide for exploration of ideas and research “Success is a poor teacher. We learn the most about ourselves when we fail, so don’t be afraid of failing. Failing is part of the process of success. You cannot have success without failure.”

Allow for failures but manage the risks. It is wrong to think that entrepreneurs are risk takers. They are risk adverse. Successful entrepreneurs have strong financial competence; know their market and business well.

Contribute to education Education enables families to grow out of poverty, especially skills. If an organization wants to contribute to the community, one way is through bursaries and scholarships.

REFERENCES

“Baxter and the Second Machine Age” written by Erik Brynjolfsson and Andrew McAfee (https://medium.com/science-and-technology/c9702574a525).

Books That Shaped Work

http://www.dol.gov/100/books-shaped-work/the-organization-man.htm

Defining Entrepreneurial Activity – Definitions Supporting Framework for Data Collection Written by Nadim Ahmad and Richard G.Seymour

(http://www.oecd.org/std/business-stats/39651330.pdf)

Definitions of Entrepreneurship Written By Alan S. Gutterman

http://alangutterman.typepad.com/files/mec_02.06.2012.pdf

Employee Participation and Company Performance

http://www.jrf.org.uk/sites/files/jrf/1859352995.pdf

Entrepreneurship Written by Franco Amatori , John Hopkins University

http://www.jhu.edu/iaesbe/working%20paper/entrepreneurship.pdf

Entrepreneurship Expert  – Howard H. Stevenson on The Dimensions of Entrepreneurship Written By Richard J.Goossen, Entrepreneurial Leaders Organization

https://www.eleaders.org/downloads/sb_eleaders/EntrepreneurshipExpertHowardStevenson.pdf

Excrepts from “Effective Manager” by Peter F. Drucker

Managing Power and Politics in Organizations

http://www.sagepub.com/upm-data/5252_Clegg_I_Proof_Chapter_5.pdf

Giving Up Control Without Losing Control

http://www.trustiseverything.com/wp-content/uploads/2012/07/Giving-Up-Control-Without-Losing-Control-GOM-1999.pdf

John Denver: On Being Human

http://www.youtube.com/watch?v=HrMhzdTenWw

Lesson 1 – Entrepreneur and Entrepreneurship Written By Jyotsna Sethi, University of Delhi

http://www.du.ac.in/fileadmin/DU/Academics/course_material/EP_01.pdf

Managing Oneself Written Peter F. Drucker Harvard Business Review

http://www.pitt.edu/~peterb/3005-001/managingoneself.pdf

Principles of Entrepreneurship Published by US Department of State, Bureau of International Information Programs

(http://www.ait.org.tw/infousa/zhtw/docs/enterp.pdf)

Robert Kiyosaki on the Right People to Grow Your Business, Entrepreneur South Africa Com 25 October 2009

http://www.entrepreneurmag.co.za/advice/staff/increasing-productivity/robert-kiyosaki-on-the-right-people-to-grow-your-business/

The Individualized Corporation. Written by Sumantra Glosal and Christopher A Barlett

(http://www.elmayorportaldegerencia.com/Documentos/Liderazgo/%5BPD%5D%20Documentos%20-%20La%20corporacion%20individualizada%20-%20ingles.pdf)

Thinking Like An Entrepreneur Written By Robert Kiyosaki Rich Dad Com 14 February 2014

http://www.richdad.com/Resources/Rich-Dad-Financial-Education-Blog/February-2014/thinking-like-an-entrepreneur.aspx

The Key to Hiring Right Written By Robert Kiyosaki, Entrepreneur.Com 1 May 2006

http://www.entrepreneur.com/article/160158

The Industrial Revolution

http://asq.org/learn-about-quality/history-of-quality/overview/industrial-revolution.html

The second machine age is upon us: time to reconsider the Luddites?

http://www.theguardian.com/business/economics-blog/2014/feb/24/second-machine-age-luddites-computers

The Organization Man

(The book can be found http://muse.jhu.edu/books/9780812209266 from Project Muse)

Power, Politics and Persuasion

http://xmnotes.files.wordpress.com/2010/07/politicspower.pdf

Revisiting the Organization Man

http://www.artofmanliness.com/2008/10/12/revisiting-the-organization-man/

Why the “Organization Man” Mentality is Dangerous

http://articles.latimes.com/1987-12-09/business/fi-18477_1_organization-man

10 Ways You Not So An Organization Man

http://www.experis.us/Job-Seekers/Research-and-Insights/Career-Center/10-Ways-Youre-So-Not-Organizat.htm

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