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The End of Intimacy, Trust, and Love
“When I got my first television set, I stopped caring so much about having close relationships.” – Andy Warhol
I’ve been thinking about how the world has been coming apart lately.
Homo sapiens, as is often pointed out, are social creatures. We live in concentric social circles that extend outwards from the individual in degrees of love, trust, and intimacy.
At the center is the individual – i.e., YOU. Around you is a small circle of people you greatly love and deeply trust. This may include your spouse and immediate family and closest friends. But it may not. You know they are in your innermost circle because losing any one of them would be devastating to you. It would change your life forever. It would feel like losing a part of your heart. This is your Circle of Love.
Beyond them is a larger circle of people with whom you have good and comfortable relationships. You like them and they like you. You know how to enjoy each other’s company, and when you are together, you shift immediately into that familiar social mode. You may even say (and believe) that you love them. But you know – if you are honest with yourself – that you would not be devastated if they disappeared from your life. Still, you believe that you can trust them to help you if you need help. That matters to you. This group, too, can include family or friends. This is your Circle of Trust.
The third circle that surrounds you is your Circle of Acquaintanceship. It is comprised of people you interact with regularly but don’t know – or care – very much about. These are people from whom you might ask a favor and for whom you might do a favor, but only if it is not a terribly big one. And then it would depend on your mood.
Beyond that, there is a fourth circle: the billions of people you don’t know and that you care about only in the most abstract way. This is the Circle of the Others.
Those four circles have comprised man’s social universe for millennia. However, in the middle of the twentieth century, as we began to get most of our daily information from radio and television, a new circle appeared. This fifth circle was comprised of all the people we had never met personally but about whom we had strong feelings and opinions.
This fifth circle quickly pushed the fourth to the perimeter and then moved into third position. We began to trust the pundits we admired on radio and TV more than we trusted our neighbors. And we began to love our favorite TV personalities more than we loved our neighbors, too, even though we knew nothing about them but the characters they played.
Welcome to the Circle of Delusion… otherwise known as the Circle of Social Entropy…otherwise known as How We Put an End to Civilization.
Since the proliferation of social media, the Circle of Social Entropy has been nudging its way inwards towards the center of our social universe. It bypassed the Circle of the Others almost immediately and then the Circle of Acquaintanceship soon thereafter. Today, for millions, it has bypassed the Circle of Trust and is threatening to bypass even the Circle of Love. (An easy way to measure this is by seeing what’s been happening on Facebook the last few years. People are deleting “friends” over social and political issues.) In real life, friendships and families are disintegrating over social media posts.
In his 1964 book Understanding Media, Marshall McLuhan argued that, by its nature, media has an effect on the ideas and sentiments that people form. He was right about that.
What social media has done in a very short time is astonishing. It has essentially allowed virtual relationships to move closer in our universe of intimacy than real ones. Increasingly, we have greater trust in the pundits, politicians, celebrities, and influencers we encounter daily through social media than we do in our neighbors, extended family, and friends.
I believe we are at the end of the way we have, for more than 100,000 years, developed relationships with other people. We are quickly moving into a world where love, and trust, and intimacy will be a largely digital experience.
What’s happening today is the end of real relationships. To me, that means an end to freedom and individuality.
And it gets worse. We are also on the threshold of The End of Real Knowledge. I’ll talk about that on Wednesday.
This essay and others are available for syndication.
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Memories of Maiduguri
“Never shall I forget his deep-throated laughter as he told me that ‘the rascals’ would kill him.” – Taki
DZ wanted to travel to Maiduguri in Nigeria, where his father was a visiting scholar at the university. I agreed to go with him, knowing nothing about Maiduguri and very little about Nigeria, except that it was an English-speaking country, not a Francophone country like Chad, where we were stationed as Peace Corps volunteers.
The first leg of the journey was by bush taxi – a smallish van with benches bolted on either side of the cabin. The big advantage of bush taxis was the price. Fares were less than a dollar each, which made them the usual choice for Chadians and Peace Corps volunteers.
To eke out a profit, bush taxis did not operate by a schedule, but idled at the station for as long as it took to fill the cabin.
Chadian-full was different from Fort Lauderdale-full, or even New York City-full. Bush-taxi-full was 20 humans, each with boxes and bags, plus at least a dozen chickens and one or two goats. And that was just the contents of the cabin. Tied to the roof rack, there was likely to be a six-foot-high mountain of bed frames and firewood and farm tools and motors and bags of grain… and who knows what else!
DZ and I had woken up at the crack of dawn and were at the station by about 6:00 a.m. By 8:00, the van was full. The driver put the transmission into gear, and the van began coughing, sputtering, and finally hobbling and clanking down the dirt road.
Moments later, we heard shouting outside in some tribal language. The driver stopped the van, and his assistant went to the back and opened the door. There was an elderly couple that wanted to get in. The assistant yelled at us all in yet another language, in response to which our fellow passengers began shuffling themselves around in an effort to make room for the additional passengers. But even after another battery of verbal abuse from the assistant, there was, at best, only six inches of bench space available to accommodate them.
The assistant shook his head in disappointment and yelled something to the driver, who then put the transmission back in gear. “Finally,” I thought to myself. “We are on our way.”
The driver floored the gas pedal and the van bolted forward. A second later, he slammed on the brakes, hurling us violently backward and crushed up against one another, but freeing up the bench space the assistant needed. He shoved the old couple on board and shut the door behind them.
That was “Part I of Our Adventure to Maiduguri.” The rest of the trip was more exciting and even stranger, which I will save that for another time. I’m telling you this now because I happen to have read this morning a reminiscence from one of my favorite reminiscers, Theodore Dalrymple (of Taki’s Magazine), whom I’ve recommended to you before.
Dalrymple’s essay is about some of his memories of this very same city of Maiduguri in the early 1980s, just a few years after DZ and I traveled there.
Africa is a continent unlike any other. Its landscapes, varied as they are, do not remind me of anyplace else I’ve ever been. That’s also true of its peoples and their cultures. They are not like any others in the world. And it (sub-Saharan Africa, that is) has changed very little since I was first there 40 years ago. It exists in its own time capsule. It still feels undiscovered to me.
Chad was not an easy place to live in – especially for a 25-year-old American who had never traveled overseas. It was not just different. Everything, from brushing your teeth to giving a lecture at the local university, felt like it had to be reinvented from square one. I managed well enough, but many others didn’t. A fair percentage of the Peace Corps volunteers that went to Chad while I was there returned to the States before their tour was up.
And I’ll bet that, apart from a handful of large, relatively wealthy cities like Marrakesh, Algiers, and Cairo in the north or Johannesburg and Cape Town in the south, that strangeness and difficulty is still true for 90% of sub-Saharan Africa today.
Notwithstanding the uncomfortable differences, there are some things I remember about Africa that made the experience of living there worthwhile. One of those things was a depth of intimacy among male friends that did not exist in the States. Another thing that impressed me deeply, which Dalrymple writes about in the linked-to essay below, was the capacity of Africans to joke about the vicissitudes of life… punctuated by their huge, bellowing, and contagious laughter.
Click here to enjoy Dalrymple doing his thing!
Licorice Pizza
Release date: Nov. 26, 2021
Directed by Paul Thomas Anderson
Starring Alana Haim and Cooper Hoffman
Currently available to rent or buy on various streaming services
Licorice Pizza is another unique creation of Paul Thomas Anderson and a subtly rich and irresistibly enjoyable film.
There’s not much plot to it, but it manages to tell, simultaneously and harmoniously, at least three wonderful stories. At one level, it is, undeniably, a falling-in-love story. At another, more engaging, level it presents two independent coming-of-age narratives. And at still another level, it is an evocative memoir of California’s San Fernando Valley in the 1970s.
On top of that, Licorice Pizza is a showcase for mesmerizing performances by two novice actors. Cooper Hoffman (son of the late Philip Seymour Hoffman) plays Gary Valentine, a chunky, pimply-faced teenager quo childhood actor, with vexing credibility. And Alana Haim, (one-third of Haim, the pop band she’s in with her sisters) as Alana Kane, his very ordinary looking but visually riveting 20-something love interest.
What I Liked About Licorice Pizza
* All the key components of the movie: the direction, the cinematography, the editing, the lighting, the set design, the costuming, the soundtrack, and, of course, the acting.
* The film is full of cameos, including appearances by Sean Penn, Tom Waits, Bradley Cooper, Benny Safdie, Maya Rudolph (Anderson’s long-time partner), and George DiCaprio (Leonardo’s father).
* An intimacy of character created by the direction and camerawork that reminded me of The Florida Project.
* I read, from some critic, that I was supposed to be offended by a bit depicting an American owner of a Japanese restaurant who speaks to his Japanese wife in a fake-Japanese broken patter. To be sure, it’s juvenile and politically incorrect. But I loved it.
What I Didn’t Like So Much
There were a few moments during the film that felt almost too intimate, that made me feel oddly and vaguely voyeuristic.
Critical Reception
Licorice Pizza was nominated for many awards, including three Oscars (one for “Best Picture). It won a BAFTA for “Best Original Screenplay” and was cited by the New York Film Critics as one of the “Top Films of the Year.”
“This is lighter and sunnier than previous Anderson pictures; subtract the porn and indeed the sex from Boogie Nights and you have something like it; remove the metaphysical anxiety from Inherent Vice and that comes reasonably close, too. It’s such a delectable film: I’ll be cutting myself another slice very soon.” (Peter Bradshaw, The Guardian)
“Licorice Pizza meanders in the best possible way: You never know where it’s going but you can’t wait to find out where it’ll end up, and when it’s over, you won’t want it to end. Once the credits finished rolling, I had no desire to get up from my seat and leave the theater, I was so wrapped up in the film’s cozy, wistful spell.” (Christy LeMire, RoberEbert.com)
You can watch the trailer here.
Interesting
* The characters of Haim’s family – her parents and her sisters – are played by her actual parents and sisters.
* Anderson says that Gary’s character is based partly on former child actor Gary Goetzman, and partly on a kid he remembers from high school that he watched trying to chat up an older woman.
About Paul Thomas Anderson
In 1996, at the age of 26, Paul Thomas Anderson made his first movie: Hard Eight. Since then, he’s been writing, directing, and producing almost nothing but good-to-great films. Here are some of them:
* Boogie Nights (1977)
* Magnolia (1999)
* Punch-Drunk Love (2002)
* There Will Be Blood (2007)
* Inherent Vice (2014)
Bits and Pieces
The Neuropsychology of “Close Talkers”
A friend writes:
“A customer, who later became the dentist who performed root canal on me, was one of those people who came very close to you when he talked. Seinfeld described those people as, ‘close talkers.’ Whenever he came into my restaurant for dinner, he would chat with me. While he was talking, I found myself taking little baby steps, trying to back away from him. He would then take baby steps forward. I would often seat him before it was his turn, just to get him out of my face. I often wonder what the psychology behind that behavior is.”
I had a friend that did this. And I had the same experience with him. I didn’t like it because I interpreted it as an unconscious form of intimidation.
But then I read a great book on neuropsychology. (I don’t remember the title.)
Neuropsychology is a discipline that investigates the relations between brain processes/mechanisms and cognition/behavioral control.
One chapter of the book explained that the brain is not fully developed at birth. During the first two years of infancy, a lot of important neural development takes place. Most of this depends on the connection between mother and baby. (The father is not important during this period.) If the baby doesn’t get enough of that maternal attention – including breast contact, eye-to-eye contact, sound contact – its brain will not develop as it should.
Another chapter specifically focused on the part of the brain that, among other things, interprets the relationship between distance and intimacy in speech. People whose brains are insufficiently developed in this way cannot identify how far away they need to be to have comfortable, friendly conversations, or how loudly they must project their voices. Typically, they feel that they need to be closer than the social norm. Thus, they are always doing that encroaching thing
After reading that chapter, I spoke to my friend. I told him that I had great news for him. I said, “Did you ever notice how people often back up when you speak to them? Or ask you to quiet your voice?”
He acknowledged that he had.
“Well, the good news,” I announced, “is that you are brain damaged!” (I think I actually said it that way.)
I explained what I had read and advised him that if he wanted others to feel comfortable in talking to him, he had to stand further away and speak more quietly than felt comfortable to him.
And here’s the most amazing thing. He did that, and has continued to do it ever since. Wouldn’t it be great if all brain problems could be solved with a simple conversation?
Interesting: About US Stock Ownership
Most of America’s stocks are owned by the top 10% of the population. And among those people, stock market wealth is concentrated in the upper 1%. They got richer – about $10 trillion richer – over the last two years.
(Source: Bonner Denning Letter)
Interesting: About Sliced Bread
During World War II, the US government was spending money it didn’t have like never before. Not surprisingly, the cost of nearly everything – from food to fuel – was increasing. In response to this, a new agency, the US Office of Price Administration (OPA), embarked on a nationwide push to ration commodities.
One such commodity was bread. But rather than rationing all bread, which would have pissed off virtually every American, the OPA banned only the sale of pre-sliced bread and the machines that made it.
As with most government plans, there were some unexpected and unwanted outcomes. Bakeries were threatened and fined. Homemakers saw the price of breadknives double. And the populace, as a whole, was irate.
From History.com:
“Invented in 1928, the bread-slicing machine was a revolutionary idea that brought the humble loaf into the modern age. The time-saving creation was so beloved that when the wartime ban was introduced, the American public was outraged. In one letter to The New York Times, a Connecticut woman informed the editor of ‘how important sliced bread is to the morale and saneness of a household.’”
The ban was lifted within two months.
Who’s Counting? Homicide Rates Surged in 2021
Since George Floyd’s death, homicides and other violent crimes have surged. And the great majority of this is Black-on-Black crime. In 2021, 2,400 more Black males and 405 more Black females were murdered than were murdered the year before. According to the FBI, this was the largest year-to-year increase in homicides in US history.
Chicago provides a good example of how this surge exists mostly in Black communities. Through December of 2021, 767 people were murdered in the city. Of that number, 615 (or 80%) were Black. 8 (1%) were White. And 144 were – bizarrely – identified as “unknown.”
On My List: Harbin International Ice and Snow Sculpture Festival
I’ve just put this place on my bucket list in the see-before-you die column. Harbin is a city in the north of China where each year up to 18 million visitors come to see an amazing display of gleaming snow carvings modeled after everything from global landmarks to cartoon characters. The Harbin Ice and Snow World is an exhibition of about 2,000 sculptures, crafted from more than seven million cubic feet of ice and brought to life with computer-controlled LEDs.
Worth Quoting: On Possessions
* “It is preoccupation with possessions, more than anything else, that prevents us from living freely and nobly.” – Bertrand Russell
* “Many wealthy people are little more than janitors of their possessions.” – Frank Lloyd Wright
* “Most people seek after what they do not possess and are thus enslaved by the very things they want to acquire.” – Anwar El-Sadat
“We see our customers as invited guests to a party, and we are the hosts. It’s our job every day to make every important aspect of the customer experience a little better.” – Jeff Bezos
Customer Service Made Easy… and Profitable
There are two types of sales in business. In my industry, we call them front-end sales and back-end sales.
A front-end sale is the acquisition of a new customer. A back-end sale is any subsequent sale to that existing customer.
Front-end sales are almost always more expensive and more difficult than back-end sales. You are selling a product to someone that hasn’t bought from you before, may not have much trust in you, and – to make matters worse – you may not know who he is and where to find him.
Front-end marketing, therefore, is all about research, experimentation, and testing. And each of these can be very costly. That’s why I have said that the first responsibility of the Stage One entrepreneur is discovering the optimum selling strategy (OSS) for his/her business.
Because of the enormous costs of front-end marketing, most new customers will come to you at or below your allowable acquisition cost (the maximum dollar figure you have, through testing, determined you can spend to bring in a new customer).
What that means is that, for most businesses, you are not going to be making profits on your front-end sales. (If you are making profits, it means that you are probably not spending enough money on front-end sales.)
Profits, therefore, come from back-end sales – i.e., selling additional products/services to your recently acquired and existing customers.
How do you do that?
There are many ways to answer that question, but for our purposes here I’m going to answer it this way: Back-end sales depend on the customer’s experience of his initial purchase and how he’s been treated since then.
In other words, back-end sales depend on customer service – how you treat the customers you create.
Great customer service has three components:
- Knowing what your customers want – i.e., what they really want.
- Figuring out how to give them an endless supply of what they want.
- Learning how to start a conversation with them and keep it going.
Let me show you what I mean.
I was walking down a fashionable street in Bucktown in Chicago when I saw a large poster in a shop window that shouted, “New! Children’s Yoga – Sign Up Here!”
I looked up at the store’s marquee, expecting it to be a yoga studio. Instead, it was a children’s clothing store. “That’s smart,” I thought, “very smart.”
Knowing What Your Customers Really Want
Indeed, if the woman who owns this store knows what I think she knows, she will have a very successful, growing business. What I think she has figured out is the first component of great customer service: knowing what your customers really want. In this case, she knows that her customers – young women with children, for the most part – want to give their children a rich and productive growing-up experience.
She hasn’t settled for the most obvious and superficial conclusion: “The people who come into my children’s clothing store want clothes for their children.” She knows that if clothing their offspring were their main goal, there are other stores – discount outlets and department stores – where they could get a wider selection at better prices.
She has recognized, in renting space on a fashionable street and stocking her store with expensive, hard-to-come-by clothing, that she is going to be selling to a certain type of young mother – an affluent, educated, and upwardly mobile woman who sees the success of her children as a direct reflection of her. Perhaps because this store owner is such a mother herself, she understands that her customers are interested in much more than clothing.
What her customers really want is to do everything possible to give their children the best of everything. And for these mothers – being young and affluent and upwardly mobile – that means indulging them in all the latest trends in quality living.
One of these trends is surely yoga. Yoga is practically de rigueur among wealthy 20- and 30-something mommies these days. If it is good for the mommies, why wouldn’t it be good for their children too?
I don’t know how this clothing store merchant managed to offer kiddie yoga classes, but it’s likely that she made a deal with a local yoga teacher who agreed to provide free or low-cost lessons in hopes of securing other, more lucrative business from the store’s customers later on. But however she managed it, she is sending her customers an important signal: She understands who they are and what they really want.
I can imagine the positive response her yoga promotion must have created: new customers walking into the store, asking about the classes… goodwill generated by her existing customer base… and both new and old customers feeling that she really gets it… not to mention thousands of extra dollars from the sale of a line of little yoga outfits.
Figuring Out How to Give Them an Endless Supply of What They Want
If the owner of this children’s clothing store really does understand what her customers really want, you can bet that the yoga classes are just a single step of a lifelong journey she (and they) will be embarking upon. Long before the success of the yoga line ebbs, she will have thought of a half-dozen other campaigns that might attract additional back-end sales.
She could, for example, test a line of expensive educational toys and invite someone to lecture on early childhood development. Or she might do something with a local music conservatory – perhaps arrange for free introductory piano lessons, and then back-end the lessons with a line of clothing appropriate for giving recitals.
As the children of her current customers grow up, so could her offerings. If her customer base is sufficiently large, her children’s clothing store could, for example, give birth to a teenage clothing store.
Likewise, she could create new product lines that are connected to her customers’ lifestyles – traveling outfits for the summer, skiing outfits for the winter holidays, and so on.
And by making strategic alliances with other local businesspeople who could profit on the back end, she could provide additional benefits for her customers – demonstrations, tastings, and the like – at no cost to her.
The key thing she will have to remember in developing her back-end products and services is that everything she does has to be consistent with the understanding she has of who her customers are and what they really want.
Learning How to Start a Conversation With Them and Keep It Going
If you recognize your customers’ deeper desires and provide them with more and better products more frequently, you will double or triple your back-end sales and, thus, double or triple your company’s profitability.
And if you do one more thing – talk to your customers about what you are happy to do for them – your profits can skyrocket.
This is an aspect of customer service that too many entrepreneurs, even good entrepreneurs, neglect.
If our shop owner is as good as I hope she is, she is already collecting the names and addresses (or, better yet, email addresses) of all her customers and is sending them information on a regular basis. She is surely sending them announcements about special events and sales, but she should also be sending them advice that helps them achieve their deeper objectives.
She should be sending them a monthly newsletter that talks about all the great new parenting books and information products that are specifically geared toward affluent parents. She should be talking about what events are taking place in the store and what new ones are being planned, and including testimonials (which she should be collecting) from customers who have experienced her special events in the past.
The wonderful thing about the internet is that it makes this sort of communication easy and affordable. Instead of printing up a four-color monthly newsletter, she can email her customers informally any time she has something to say. If she reads something interesting in The New York Times, she can pass that along to them. If she is thinking about bringing in a tennis teacher to give introductory lessons, she can ask her customers if that’s something that would interest them.
With the software available these days, it would be easy for her to communicate with all of her customers on a first-name basis. Each of her communications can have the intimacy of a personal letter and, where appropriate, the urgency of a postcard. By establishing a pattern of communicating in this way, she can create a very profitable, long-term relationship with all of her customers.
The Exposure Explosion
You Think Sexual Harassment Is News? Really?
Men – mostly powerful white men – are being exposed as sexual predators. They are being punished by losing their jobs, their reputations, and, in some cases, their families and friends.
Like the presidential election, it is freaking people out and polarizing the population.
First it was Harvey Weinstein. Then it was Louis C. K., Kevin Spacey, Al Franken, John Conyers, and (gasp!) Matt Lauer.
Hardly a day passes without another well-known name being added to the list. And it’s not just celebrities and politicians. Gavin Delahunty, chief curator at the Dallas Museum of Art, resigned after allegations of inappropriate sexual behavior. James Levine, the world-famous conductor, was suspended by the Met Opera after three men accused him of abusing them when they were teenagers.
The liberal press was the first to jump on the “news.” Conservative commentators were initially quiet on the subject, but began speaking when a significant number of the accused turned out to be liberals.
So we are all talking about it now.
It was never really acceptable. But some of it sort of was.
For the first 30 years of my life, sexual harassment was not something people talked about. I doubt if the phrase was even used until the 1980s when workforce regulations and laws were put into place.
As for “inappropriate behavior” creating a “hostile work environment” – I don’t remember that being an issue until around 2000.
But for what we might call “hard core” sexual harassment – trying to exchange workplace rewards for sexual favors – that was always considered repulsive. It was also, however, regarded as somehow “to be expected,” at least in Hollywood and on Wall Street.
How many cartoons have been published over the decades – even in dignified liberal-leaning publications such as The New Yorker – depicting the Hollywood powerhouse and the starlet on “the casting couch”? Or the boss chasing the typist around the room?
A young person today might well wonder why this sort of behavior was considered a laughing matter.
One reason, I think, is that there was, until relatively recently, a very different view of male and female roles when it came to sex.
The man’s role was to pursue the woman. The woman’s role was to be pursued.
The man was expected to want to have sex whenever he could get it. The woman was expected to refuse a man’s sexual advances, and to make only small and gradual allowances depending on her assessment of his attractiveness and worthiness. (Not necessarily in that order.)
Women who initiated sex or said yes too easily were considered whorish. Men who were persistent in asking for sex were considered normal – “red-blooded” at the worst.
And now, as the exposures and admissions and expulsions continue, it is pretty much impossible for anyone to pretend that this double standard has not been a real and serious problem since… well, certainly since the Mad Men days. Arguably since 1492.
So why does it feel like sexual harassment in the workplace is something new?
Until recently, the behavior that men are now being punished for was accepted… or at least ignored. And as long as it was ignored, some men felt that it was somehow okay.
I can think of several contributing factors:
- Although it has always been illegal as well as reprehensible to rape, fondle, or act out sexually in front of one’s colleagues and employees, there was always some allowance given for the lesser of these offenses when the victims were single women – i.e., not some other man’s wife.
- And when it came to Hollywood and Wall Street, the idea that a powerful man might persuade a single (i.e., available) woman to grant him some sort of sexual pleasure by offering career benefits was considered a form of mutual consent. (After all, the woman could always say no.)
- Casual sex – i.e., sex outside of marriage – has gradually become thought of as ordinary. And the idea of a woman having such sex has evolved from something to be ashamed of to something she has a perfect right to.
So how far can a man go?
Ready Fire Aim Ch.2
CHAPTER TWO
WHEN (and WHY) EMPLOYEE SIZE MATTERS
A Different Way of Measuring the Five Stages
In the last chapter we looked at the five stages of entrepreneurial growth. I posited that there are unique problems, challenges and opportunities an entrepreneur will face at each ot these stages.
I delineated those stages by revenue because rising revenues create significant changes and because most entrepreneurs and would-be entrepreneurs think of business growth in terms of revenues.
In my experience, revenue growth has a direct and substantial impact on sales and marketing opportunities, product development challenges, operational and fulfillment problems, and regulatory issues, to name a few.
But another metric, the number of employees and/or decision makers a business has – can be more relevant in understanding other business opportunity, challenges and problems, such as hiring and firing practices, wage and incentive protocols, labor issues, corporate communications, centralization, and other management issues.
There are good reasons for that.
In The Tipping Point, Malcolm Gladwell wrote about anthropological and social studies tribal and group development dynamics. talks about how communication is affected by the size of the community. Seventy thousand years ago, these studies found when tribes got bigger than 30 individuals, they tended to split into two, but the two could live and work in harmony together until the group size exceeded 150.
After that, the intimacy between tribes broke down considerably. The reason for this, anthropologists have suggested, is about communication. With a tribe of 30 people or fewer, the leader can give his time and attention to everyone. He can communicate what he wants to communicate and intervene on an individual basis with anyone that strays too far from the tribal goals.
From 30 to 150 people, it is no longer possible for any one person to give close attention to every person in the larger group, but the leader can still exert significant influence over the larger group by giving his attention to the sub-leaders of each of the tribes of 30, which were generally people he chose.
But once the group exceeds 150 people – or five tribes of 30 – control is much more difficult to exert because it’s unlikely at that point that he has personally appointed and groomed the next tier of leaders. They respond to their mentors, who are three steps removed from him.
In Sapiens, Yuval Harrari tackles the same subject, suggesting that this control and communication problem was resolved by myths – stories that could be passed along from one tribe to another, stories that conveyed the core beliefs of the larger group.
And then there are several contemporary studies on business communication that conclude that the optimal number of employees any executive can effectively manage is six or seven.
When I first read about those studies, I doubted the conclusions. I felt sure I was already managing many more people than that. But when I measured what I was able to do – in terms of real influence – in my day-to-day working life, I discovered that six or seven direct reports was about all I could manage.
From this I developed a theory that dovetailed well with these business and anthropological studies. My theory is based on attention and influence – this idea that there is a limit to how many people any one person can know and influence.
It goes like this: In starting a business the founder hires a handful of people – usually seven or fewer – to help him get the business off the ground. There are seldom strict job descriptions or formal titles at that point. Everyone is expected to do whatever he or she is asked to do.
Working with this family, he gradually figures out the strengths and weaknesses of each member. Eventually some sort of division of labor takes place. He puts one person charge of marketing, another in charge of sales, another in charge of research and development, another in charge of production, another in charge of customer service, and so on.
Because he has hired and trained and gotten to know each of these people individually, he has no need to “manage” them in any formal way. They “get” him. They grock his desires, concerns, and peccadillos. They understand his “vision,” if he has one.
Each of these individuals may be different from one another. One may be fastidious. Another a quick thinker. One may be charismatic. Another shy. These characteristics don’t cause problems because each of the seven understands the founder and each can apply his individual strengths to further the company’s agendas.
Now the business gets bigger. And each of these seven people end up running these little operational units they’ve been given. The marketing guy hires an SEO expert and a direct response whizz. The sales gal hires six hungry salespeople. The guy in charge of customer service hires 12 employees to handle the growing volume of sales.
The communication between the leader and his immediate team is still as close as it ever was. But now you have another, say, 30 employees at this second tier.
None of these second-tier people report directly to the founder. But they bump into him at the coffee machine, and they meet with him when he sits in on one of their group meetings. And every so often they hear a little speech from him presented to the company as a whole.
They direct contact, in terms of back-and-forth discussions, is less than that of the second-tier employees, but it is still quite good. They see him regularly, understand him well and just as important, he (the founder) feels the same way about them.
They know him. He knows them. His influence – in terms of communicating his ideas, ambitions, and concerns – is easily and quickly communicated.
Now the company grows again and some of these third-tier employees are promoted to junior management positions as the size and the complexity of the individual departments gets bigger. The marketing department, for example, might break into three divisions: SEO, direct response, and “onboarding” or backend. Sales might be split into outbound and inbound, or prospects and buyers. Customer service might be broken into one group that deals with routine service issues and another that responds to more serious issues regarding product quality.
At this point the business has a population of 100 or 200 employees grouped into a half dozen departments, which are each subdivided in some way. These new hirees – these fourth-tier employees – will no longer have the same access to the guy on top that the first and second tier employees have. They will only occasionally bump into him at the office and when they do, he probably won’t know who they are. What they hear from him or about him will have passed through three gaps.
Now remember what I said in the beginning: that these first-tier employees may be very different in terms of personality, perspectives, and goals than the founder. In fact, this is quite common because founders tend to be strong willed and demanding. Dominant personalities generally attract submissive ones. To survive and prosper as a first-tier employee you have to embrace the founder’s goals and accept his style of leadership. But that doesn’t mean that you have to use the same style of leadership when dealing with your employees, in the third tier.
And the same is true for the third-tier employees that get promoted to management positions: they may have different desires, goals, and expectations than their second-tier bosses have. So when they hire and manage fourth-tier employees there is a good possibility that the core beliefs, ambitions, and interests of the founder – i.e. the “company culture” – will be conveyed to those fourth-tier employees.
And then, of course, once the business has five tiers of management that culture at the top can be all but gone.
For these new employees, the founder is a corporate ghost – someone they’ve heard of and may have seen once or twice – but they are no more connected to him or her than they are to a TV personality.
As you have noticed, in discussing the issue of employee population, my focus has been on proximity: how far away from the person of the founder each new level of employee is.
And my theory is that when it comes to hiring and firing practices, wage and incentive protocols, labor issues, corporate communications, centralization and other management issues, proximity to the founder matters.
THE FIRST TIER
The entrepreneur should have no communication or management problems with his first-tier employees. They are usually people he has known for years and, if not, they have been vetted by him personally. He knows what their capabilities are. He knows something about their work habits and personalities. And presumably he’s made it very clear that their jobs are to do whatever needs doing and are expected to work like crazy to make the business work.
And these people, this core team, they know the founder. They understand his goals and ambitions. They are familiar with his way of getting things done. They recognize that to be successful in this start-up business they must adjust their ideas, expectations and work habits to jibe with those of the founder.
Because of the nature of startups – the great demands put on every member of the core team – there is really no reason to worry for the founder to worry about communication and management issues. The founder leads the way – in whatever way and in whatever direction she feels is right. The first-tier employees follow.
This isn’t to say that a founder can’t make mistakes with her first-tier team. She can overestimate someone’s competence, or underestimate another’s disagreeableness. She can discover that someone that is very good at sales is very bad at managing salespeople. She can hire a friend or family member – almost always a bad idea.
But these are not communication and management problems. They are hiring problems. And hiring problems can be solved easily at this first-tier stage. The solution is to fire the problem person. Don’t hesitate. You won’t gain anything by handing out second chances. Trust you instinct. Vacate the seat. The rest of the core team will appreciate it and you will too when you see what a hugely posititve impact a better person will have on your business.
THE SECOND TIER
The core start-up team – you and your first-tier employees – is usually all you need to figure out your optimum selling strategy (OSS), break the million-dollar sales barrier and get the business into its second stage of development.
It can take years to get to this level, but once you get there – once you get into stage two – growth usually comes hard and fast for several years. Most of the businesses I’ve worked with see growth rates in stage two of 50% to 100% a year for three to five years. It’s an exciting time. It’s a fun time. But it’s crazy busy.
And because it’s crazy busy, you and your core team will be hiring new people crazily fast. Many of these employees will be clerical employees–data input people, bookkeepers, shipping clerks, etc. – to deal with the influx of new business. Some will certainly be customer service people. And some will be junior executives, assisting your core people in the core business tasks: marketing, sales, product development, customer retention, etc.
It’s not uncommon for a stage two business to see its employee population quadruple or quintuple in less than a year due to the rate of growth that is so common at this stage. That’s a lot a growth for a small business and a great strain on everyone’s time.
Consider the math: Let’s say you set a reasonable goal of interviewing three job applicants for each person you hire. And let’s say you plan to spend a total of two hours (solo and with other members of your core team) in the hiring process. To hire 50 people in one year you need to interview 150. Interviewing 150 people in a year means spending two hours three times a week (say Monday, Wednesday and Friday) interviewing people.
That’s a lot of time you don’t have because you (and your core team) are so busy managing the chaos caused by this accelerated period of growth.
So that’s the problem in going from a handful of first-tier employees to a business that has 40 to 60 employees: you won’t have enough time to properly interview them.
You might consider doing what many founders do to solve this problem: delegate the hiring of the new second-tier employees to members of your core team. You might, for example, ask the person that is doing most of the marketing to hire the new marketing employees, and the person that is closing the sales to hire the new salespeople, and the person that is holding things together to hire the clerks.
And if you do this, you will feel good about it because you will have saved yourself a ton of time that you were able to spend on more urgent tasks.
But later on, it won’t seem like such a good idea. In fact, you will almost certainly come to regret it. What will happen is that this second tier of employees will turn out to be a motley crew. A few of them will be superstars and you will notice them right away. A few of them will seem like bad apples to you, but when you speak to the core team member that hired them, you’ll be given a reason why you’re wrong. Most of them you won’t notice at all. They will be faces you pass in the hallway.
That’s not good.
It’s very important to be involved in the hiring and training of second-tier employees. It’s not something you should trust to anyone else. What you want in a second-tier employee is not someone that has the right education and experience to do a specific job. You want people that can rise beyond the job they were hired to do. You want people that want to rise to the top, people that are not afraid of working hard, that enjoy solving problems, and would love to become leaders in your company later on.
In short, you want hire superstars during this period of growth. And the reason you want superstars is that these people will eventually become the backbone of your business – the 50 or 60 people that will eventually head up your departments and divisions when you have a thousand people working for you.
It’s been my experience that many superstar first-tier employees are reluctant to hire superstars to work for them. I’m not sure why that it. In some cases it may be insecurity. In other cases it might be that they feel more comfortable delegating work to people that are not going to challenge it.
You don’t want that to happen. To ensure the strongest growth for your business you have to make sure that this group of second-tier employees are first-rate. And the only way you can assure yourself of that is to take part in the hiring process.
You don’t have to spend two hours on each candidate. Fifteen minutes may be enough. But spend time on every candidate. Don’t make the common mistake of telling your people: send me the final two choices. Superstars sometimes come off as brash or overly confident in job interviews. You don’t want to miss out on hiring one because one of your core team members was uncomfortable with his/her personality.
So you need to be involved in the hiring of second-tier employees. But you need to participate in their training. You can leave the technical training to their immediate bosses, but you need to pay attention to more important matters – work ethic, values and core beliefs.
You need to be in charge of letting these second-tier people know what is expected of them. I’m not referring to the sort of thing you’d have on a job description. I’m referring to the fact that as an entrepreneur you expect them to share your willingness to say yes to every challenge, to say no to every doubt, and to work as hard and as long as it takes to get the work done.
These core issues can’t be manufactured from human resources or corporate communications. If you want a business of smart, responsible, hardworking employees, you have to demand it from your core team and from the first-tier employees as well.
If you do demand it then they will demand it. And, as I said, these 50 odd people will be running your billion-dollar business one day.,
THE THIRD TIER
For most solid entrepreneurial businesses, an employee base of 40 to 60 employees is enough to break through the $10 million barrier.
Your first-tier employees have been around you, 10 or 12 hours a day, five or six days a week, for years. They know you. You know them.
Your second-tier employees don’t have the same access to you as the first-tier employees do, but because you took part in hiring and training them, they understand what you want. They would notice if they were asked to do something that contradicted your mission.
If they are smart (and they should be if you hired them right) they will tailor their work to accommodate your goals. If their bosses disagree with bits and pieces of what you say, they will accommodate them while recognizing that their ultimate interest lies in pleasing you. Thus, your first-tier and second-tier employees can be considered your core team for growing your business.
Your third-tier employees, however good, should not be seen as part of the core team. Individuals can earn their way in, but these employees are simply too far removed from you to be expected to always understand and pursue your primary interests.
As your employee base grows behind the core 40 to 60, your responsibilities will grow and change. You will no longer have the time to spend interviewing, training, and getting to know all these new people. You will allow your second- and third-tier employees to do all that.
Consequently, you will know very little about your third-tier employees. You won’t know much about their personalities. You won’t know which ones are smart or ambitious or cunning. You won’t even know much about their work habits, except the few that always arrive earlier and leave later than you do.
But if you have the right instincts, you will feel the need to know them. And so, whenever they are mentioned by one of your core employees, you will ask about them. You will wonder what role they are playing. You will ask about their strengths and weaknesses. You will want to discover if they might be extraordinary in some way that can benefit the business. But you won’t be figuring this out by interacting with them. You will be getting your impressions from their managers. In other words, you will get your opinions of them second hand.
This is not good, but it’s pretty much unavoidable. Time is always in short supply. And as the leader of a growing business, you must give the lion’s share of your time to growing revenues and profits. That can only be done by working with your first-and second-tier employees that are involved in those efforts. The third-tier people are working outside of your domain.
Thus, you will know very little about your third-tier employees, but they will know – or think they know – a good deal about you. But what they know is based on seeing you from a distance, listening to you speak to the company as a whole, through your corporate memos or most powerfully, what their bosses say or imply about you.
The big difference between second-tier employees and third-tier employees is that the latter cannot see through their bosses to find out what you want. When these third-tier employees look through their bosses, they see your first-tier people, some of whom may harbor different ideas about running the business than you have.
To compensate for the distance between you and your third-tier employees, you will have to do certain things that may rub against your grain. For one thing, you will have to write memos directed to them, memos that explain changes that affect them, but more importantly, memos that explain and reinforce your ideas about what you want the business to become and how they can help.
Every four to six weeks you should give them a general update on where the business stands and what you are trying to do. Tell them why growth is important. Explain to them that growth brings chaos and that chaos creates problems that have to be solved. But the solutions to those problems can’t be procedures and processes that slow growth down. Solutions must flexible and temporary. To continue to grow, the business needs to experiment, and that means more problems and that’s fine. Try out new ideas. Fix them if they fail. And use that knowledge to come up with the next experiment or solution.
Don’t overdo the memo writing. You are the big picture person. Stick to the big picture, the big problems, and the big opportunities. There are some management consultants that recommend weekly or even daily communications. This, to me, is crazy. You have more important things to do than that. And they don’t want to hear from you that often.
So this sort of “corporate communication” will become necessary. It will be your primary vehicle for making sure all those people you don’t know well and rarely see have a good idea of what you want to do. But there is one more thing you can do with these third-tier employees that can be very helpful. Tell them that if they ever have any questions, your door is always open to them.
Don’t say, “questions or problems.” If they have problems they should go to their managers, your core team, first. But do make them feel like they have the privilege to drop by for a chat if they need some direction. Most won’t take advantage of it, but knowing that you are open to such contacts will make third-tier employees feel better towards you. And that’s important.
THE FOURTH TIER
It’s hard to draw a line between third-tier and fourth-tier employees. It can happen when the population is 150 or it can happen at 300. Or it can happen at 600. It depends on how the business is structured and what sorts of jobs all these additional people are hired to do.
But I do think there is a distinction between third-term employees and the next tier. And that distinction relates to this open-door policy – giving employees the feeling that you are able to talk with them any time they feel the need.
You will know when this happens. You will find yourself unwilling to say, “Drop by my office any time.” You may still want to say that to establish your good feelings towards these new hires, but your daily schedule will make shudder at even the thought of it.
When you get to this level, you have to change one of your tactics. You should continue to send out the occasional corporate memo. But in place of keeping your door open, you should begin taking a 15-minute stroll around your business every few days or once a week.
You can do it at first with one of your core employees who can introduce you, but there is an obvious downside to that: the unlikeliness of having a frank conversation. The best strolls will be those in which you talk to people you don’t know randomly and ask them what they are doing and see where the conversation leads. This isn’t an easy thing to do. At least it wasn’t for me. But I never took a stroll of this kind without learning something important about my business or coming upon an idea that could fix problems or add numbers to the bottom line.
THE FIFTH TIER
There comes a time when you have so many damn employees that writing memos and keeping your door open and making those strolls – all those things won’t work.
It may be when you have 400 or 500 employees. it will certainly happen when you have more than 1,000. At this stage the business will be so large (generally in the fourth stage) that you will hardly be meeting with or speaking to your core team of 50 or so anymore.
At this stage your business will be (should be) running itself. Most of the important work you have been doing for so many years – like figuring out how to grow sales and squeeze out profits – will be handled by a small team of division leaders. Your daily conversations will be with them and rarely with anyone else.
This is natural and inevitable. You don’t need to fight it, but you do need to know that because you are no longer in touch with 90% of what is going on in your business, dangers lurk.
That’s the end of Chapter 2 of Ready, Fire, Aim.
If you’d like more information about the book, including how to order it, click the button below.
Ready Fire Aim Ch.3
CHAPTER THREE
WHEN (and WHY) EMPLOYEE SIZE MATTERS
A Different Way of Measuring the Five Stages
In the last chapter we looked at the five stages of entrepreneurial growth. I posited that there are unique problems, challenges and opportunities an entrepreneur will face at each ot these stages.
I delineated those stages by revenue because rising revenues create significant changes and because most entrepreneurs and would-be entrepreneurs think of business growth in terms of revenues.
In my experience, revenue growth has a direct and substantial impact on sales and marketing opportunities, product development challenges, operational and fulfillment problems, and regulatory issues, to name a few.
But another metric, the number of employees and/or decision makers a business has – can be more relevant in understanding other business opportunity, challenges and problems, such as hiring and firing practices, wage and incentive protocols, labor issues, corporate communications, centralization, and other management issues.
There are good reasons for that.
In The Tipping Point, Malcolm Gladwell wrote about anthropological and social studies tribal and group development dynamics. talks about how communication is affected by the size of the community. Seventy thousand years ago, these studies found when tribes got bigger than 30 individuals, they tended to split into two, but the two could live and work in harmony together until the group size exceeded 150.
After that, the intimacy between tribes broke down considerably. The reason for this, anthropologists have suggested, is about communication. With a tribe of 30 people or fewer, the leader can give his time and attention to everyone. He can communicate what he wants to communicate and intervene on an individual basis with anyone that strays too far from the tribal goals.
From 30 to 150 people, it is no longer possible for any one person to give close attention to every person in the larger group, but the leader can still exert significant influence over the larger group by giving his attention to the sub-leaders of each of the tribes of 30, which were generally people he chose.
But once the group exceeds 150 people – or five tribes of 30 – control is much more difficult to exert because it’s unlikely at that point that he has personally appointed and groomed the next tier of leaders. They respond to their mentors, who are three steps removed from him.
In Sapiens, Yuval Harrari tackles the same subject, suggesting that this control and communication problem was resolved by myths – stories that could be passed along from one tribe to another, stories that conveyed the core beliefs of the larger group.
And then there are several contemporary studies on business communication that conclude that the optimal number of employees any executive can effectively manage is six or seven.
When I first read about those studies, I doubted the conclusions. I felt sure I was already managing many more people than that. But when I measured what I was able to do – in terms of real influence – in my day-to-day working life, I discovered that six or seven direct reports was about all I could manage.
From this I developed a theory that dovetailed well with these business and anthropological studies. My theory is based on attention and influence – this idea that there is a limit to how many people any one person can know and influence.
It goes like this: In starting a business the founder hires a handful of people – usually seven or fewer – to help him get the business off the ground. There are seldom strict job descriptions or formal titles at that point. Everyone is expected to do whatever he or she is asked to do.
Working with this family, he gradually figures out the strengths and weaknesses of each member. Eventually some sort of division of labor takes place. He puts one person charge of marketing, another in charge of sales, another in charge of research and development, another in charge of production, another in charge of customer service, and so on.
Because he has hired and trained and gotten to know each of these people individually, he has no need to “manage” them in any formal way. They “get” him. They grock his desires, concerns, and peccadillos. They understand his “vision,” if he has one.
Each of these individuals may be different from one another. One may be fastidious. Another a quick thinker. One may be charismatic. Another shy. These characteristics don’t cause problems because each of the seven understands the founder and each can apply his individual strengths to further the company’s agendas.
Now the business gets bigger. And each of these seven people end up running these little operational units they’ve been given. The marketing guy hires an SEO expert and a direct response whizz. The sales gal hires six hungry salespeople. The guy in charge of customer service hires 12 employees to handle the growing volume of sales.
The communication between the leader and his immediate team is still as close as it ever was. But now you have another, say, 30 employees at this second tier.
None of these second-tier people report directly to the founder. But they bump into him at the coffee machine, and they meet with him when he sits in on one of their group meetings. And every so often they hear a little speech from him presented to the company as a whole.
They direct contact, in terms of back-and-forth discussions, is less than that of the second-tier employees, but it is still quite good. They see him regularly, understand him well and just as important, he (the founder) feels the same way about them.
They know him. He knows them. His influence – in terms of communicating his ideas, ambitions, and concerns – is easily and quickly communicated.
Now the company grows again and some of these third-tier employees are promoted to junior management positions as the size and the complexity of the individual departments gets bigger. The marketing department, for example, might break into three divisions: SEO, direct response, and “onboarding” or backend. Sales might be split into outbound and inbound, or prospects and buyers. Customer service might be broken into one group that deals with routine service issues and another that responds to more serious issues regarding product quality.
At this point the business has a population of 100 or 200 employees grouped into a half dozen departments, which are each subdivided in some way. These new hirees – these fourth-tier employees – will no longer have the same access to the guy on top that the first and second tier employees have. They will only occasionally bump into him at the office and when they do, he probably won’t know who they are. What they hear from him or about him will have passed through three gaps.
Now remember what I said in the beginning: that these first-tier employees may be very different in terms of personality, perspectives, and goals than the founder. In fact, this is quite common because founders tend to be strong willed and demanding. Dominant personalities generally attract submissive ones. To survive and prosper as a first-tier employee you have to embrace the founder’s goals and accept his style of leadership. But that doesn’t mean that you have to use the same style of leadership when dealing with your employees, in the third tier.
And the same is true for the third-tier employees that get promoted to management positions: they may have different desires, goals, and expectations than their second-tier bosses have. So when they hire and manage fourth-tier employees there is a good possibility that the core beliefs, ambitions, and interests of the founder – i.e. the “company culture” – will be conveyed to those fourth-tier employees.
And then, of course, once the business has five tiers of management that culture at the top can be all but gone.
For these new employees, the founder is a corporate ghost – someone they’ve heard of and may have seen once or twice – but they are no more connected to him or her than they are to a TV personality.
As you have noticed, in discussing the issue of employee population, my focus has been on proximity: how far away from the person of the founder each new level of employee is.
And my theory is that when it comes to hiring and firing practices, wage and incentive protocols, labor issues, corporate communications, centralization and other management issues, proximity to the founder matters.
THE FIRST TIER
The entrepreneur should have no communication or management problems with his first-tier employees. They are usually people he has known for years and, if not, they have been vetted by him personally. He knows what their capabilities are. He knows something about their work habits and personalities. And presumably he’s made it very clear that their jobs are to do whatever needs doing and are expected to work like crazy to make the business work.
And these people, this core team, they know the founder. They understand his goals and ambitions. They are familiar with his way of getting things done. They recognize that to be successful in this start-up business they must adjust their ideas, expectations and work habits to jibe with those of the founder.
Because of the nature of startups – the great demands put on every member of the core team – there is really no reason to worry for the founder to worry about communication and management issues. The founder leads the way – in whatever way and in whatever direction she feels is right. The first-tier employees follow.
This isn’t to say that a founder can’t make mistakes with her first-tier team. She can overestimate someone’s competence, or underestimate another’s disagreeableness. She can discover that someone that is very good at sales is very bad at managing salespeople. She can hire a friend or family member – almost always a bad idea.
But these are not communication and management problems. They are hiring problems. And hiring problems can be solved easily at this first-tier stage. The solution is to fire the problem person. Don’t hesitate. You won’t gain anything by handing out second chances. Trust you instinct. Vacate the seat. The rest of the core team will appreciate it and you will too when you see what a hugely posititve impact a better person will have on your business.
THE SECOND TIER
The core start-up team – you and your first-tier employees – is usually all you need to figure out your optimum selling strategy (OSS), break the million-dollar sales barrier and get the business into its second stage of development.
It can take years to get to this level, but once you get there – once you get into stage two – growth usually comes hard and fast for several years. Most of the businesses I’ve worked with see growth rates in stage two of 50% to 100% a year for three to five years. It’s an exciting time. It’s a fun time. But it’s crazy busy.
And because it’s crazy busy, you and your core team will be hiring new people crazily fast. Many of these employees will be clerical employees–data input people, bookkeepers, shipping clerks, etc. – to deal with the influx of new business. Some will certainly be customer service people. And some will be junior executives, assisting your core people in the core business tasks: marketing, sales, product development, customer retention, etc.
It’s not uncommon for a stage two business to see its employee population quadruple or quintuple in less than a year due to the rate of growth that is so common at this stage. That’s a lot a growth for a small business and a great strain on everyone’s time.
Consider the math: Let’s say you set a reasonable goal of interviewing three job applicants for each person you hire. And let’s say you plan to spend a total of two hours (solo and with other members of your core team) in the hiring process. To hire 50 people in one year you need to interview 150. Interviewing 150 people in a year means spending two hours three times a week (say Monday, Wednesday and Friday) interviewing people.
That’s a lot of time you don’t have because you (and your core team) are so busy managing the chaos caused by this accelerated period of growth.
So that’s the problem in going from a handful of first-tier employees to a business that has 40 to 60 employees: you won’t have enough time to properly interview them.
You might consider doing what many founders do to solve this problem: delegate the hiring of the new second-tier employees to members of your core team. You might, for example, ask the person that is doing most of the marketing to hire the new marketing employees, and the person that is closing the sales to hire the new salespeople, and the person that is holding things together to hire the clerks.
And if you do this, you will feel good about it because you will have saved yourself a ton of time that you were able to spend on more urgent tasks.
But later on, it won’t seem like such a good idea. In fact, you will almost certainly come to regret it. What will happen is that this second tier of employees will turn out to be a motley crew. A few of them will be superstars and you will notice them right away. A few of them will seem like bad apples to you, but when you speak to the core team member that hired them, you’ll be given a reason why you’re wrong. Most of them you won’t notice at all. They will be faces you pass in the hallway.
That’s not good.
It’s very important to be involved in the hiring and training of second-tier employees. It’s not something you should trust to anyone else. What you want in a second-tier employee is not someone that has the right education and experience to do a specific job. You want people that can rise beyond the job they were hired to do. You want people that want to rise to the top, people that are not afraid of working hard, that enjoy solving problems, and would love to become leaders in your company later on.
In short, you want hire superstars during this period of growth. And the reason you want superstars is that these people will eventually become the backbone of your business – the 50 or 60 people that will eventually head up your departments and divisions when you have a thousand people working for you.
It’s been my experience that many superstar first-tier employees are reluctant to hire superstars to work for them. I’m not sure why that it. In some cases it may be insecurity. In other cases it might be that they feel more comfortable delegating work to people that are not going to challenge it.
You don’t want that to happen. To ensure the strongest growth for your business you have to make sure that this group of second-tier employees are first-rate. And the only way you can assure yourself of that is to take part in the hiring process.
You don’t have to spend two hours on each candidate. Fifteen minutes may be enough. But spend time on every candidate. Don’t make the common mistake of telling your people: send me the final two choices. Superstars sometimes come off as brash or overly confident in job interviews. You don’t want to miss out on hiring one because one of your core team members was uncomfortable with his/her personality.
So you need to be involved in the hiring of second-tier employees. But you need to participate in their training. You can leave the technical training to their immediate bosses, but you need to pay attention to more important matters – work ethic, values and core beliefs.
You need to be in charge of letting these second-tier people know what is expected of them. I’m not referring to the sort of thing you’d have on a job description. I’m referring to the fact that as an entrepreneur you expect them to share your willingness to say yes to every challenge, to say no to every doubt, and to work as hard and as long as it takes to get the work done.
These core issues can’t be manufactured from human resources or corporate communications. If you want a business of smart, responsible, hardworking employees, you have to demand it from your core team and from the first-tier employees as well.
If you do demand it then they will demand it. And, as I said, these 50 odd people will be running your billion-dollar business one day.,
THE THIRD TIER
For most solid entrepreneurial businesses, an employee base of 40 to 60 employees is enough to break through the $10 million barrier.
Your first-tier employees have been around you, 10 or 12 hours a day, five or six days a week, for years. They know you. You know them.
Your second-tier employees don’t have the same access to you as the first-tier employees do, but because you took part in hiring and training them, they understand what you want. They would notice if they were asked to do something that contradicted your mission.
If they are smart (and they should be if you hired them right) they will tailor their work to accommodate your goals. If their bosses disagree with bits and pieces of what you say, they will accommodate them while recognizing that their ultimate interest lies in pleasing you. Thus, your first-tier and second-tier employees can be considered your core team for growing your business.
Your third-tier employees, however good, should not be seen as part of the core team. Individuals can earn their way in, but these employees are simply too far removed from you to be expected to always understand and pursue your primary interests.
As your employee base grows behind the core 40 to 60, your responsibilities will grow and change. You will no longer have the time to spend interviewing, training, and getting to know all these new people. You will allow your second- and third-tier employees to do all that.
Consequently, you will know very little about your third-tier employees. You won’t know much about their personalities. You won’t know which ones are smart or ambitious or cunning. You won’t even know much about their work habits, except the few that always arrive earlier and leave later than you do.
But if you have the right instincts, you will feel the need to know them. And so, whenever they are mentioned by one of your core employees, you will ask about them. You will wonder what role they are playing. You will ask about their strengths and weaknesses. You will want to discover if they might be extraordinary in some way that can benefit the business. But you won’t be figuring this out by interacting with them. You will be getting your impressions from their managers. In other words, you will get your opinions of them second hand.
This is not good, but it’s pretty much unavoidable. Time is always in short supply. And as the leader of a growing business, you must give the lion’s share of your time to growing revenues and profits. That can only be done by working with your first-and second-tier employees that are involved in those efforts. The third-tier people are working outside of your domain.
Thus, you will know very little about your third-tier employees, but they will know – or think they know – a good deal about you. But what they know is based on seeing you from a distance, listening to you speak to the company as a whole, through your corporate memos or most powerfully, what their bosses say or imply about you.
The big difference between second-tier employees and third-tier employees is that the latter cannot see through their bosses to find out what you want. When these third-tier employees look through their bosses, they see your first-tier people, some of whom may harbor different ideas about running the business than you have.
To compensate for the distance between you and your third-tier employees, you will have to do certain things that may rub against your grain. For one thing, you will have to write memos directed to them, memos that explain changes that affect them, but more importantly, memos that explain and reinforce your ideas about what you want the business to become and how they can help.
Every four to six weeks you should give them a general update on where the business stands and what you are trying to do. Tell them why growth is important. Explain to them that growth brings chaos and that chaos creates problems that have to be solved. But the solutions to those problems can’t be procedures and processes that slow growth down. Solutions must flexible and temporary. To continue to grow, the business needs to experiment, and that means more problems and that’s fine. Try out new ideas. Fix them if they fail. And use that knowledge to come up with the next experiment or solution.
Don’t overdo the memo writing. You are the big picture person. Stick to the big picture, the big problems, and the big opportunities. There are some management consultants that recommend weekly or even daily communications. This, to me, is crazy. You have more important things to do than that. And they don’t want to hear from you that often.
So this sort of “corporate communication” will become necessary. It will be your primary vehicle for making sure all those people you don’t know well and rarely see have a good idea of what you want to do. But there is one more thing you can do with these third-tier employees that can be very helpful. Tell them that if they ever have any questions, your door is always open to them.
Don’t say, “questions or problems.” If they have problems they should go to their managers, your core team, first. But do make them feel like they have the privilege to drop by for a chat if they need some direction. Most won’t take advantage of it, but knowing that you are open to such contacts will make third-tier employees feel better towards you. And that’s important.
THE FOURTH TIER
It’s hard to draw a line between third-tier and fourth-tier employees. It can happen when the population is 150 or it can happen at 300. Or it can happen at 600. It depends on how the business is structured and what sorts of jobs all these additional people are hired to do.
But I do think there is a distinction between third-term employees and the next tier. And that distinction relates to this open-door policy – giving employees the feeling that you are able to talk with them any time they feel the need.
You will know when this happens. You will find yourself unwilling to say, “Drop by my office any time.” You may still want to say that to establish your good feelings towards these new hires, but your daily schedule will make shudder at even the thought of it.
When you get to this level, you have to change one of your tactics. You should continue to send out the occasional corporate memo. But in place of keeping your door open, you should begin taking a 15-minute stroll around your business every few days or once a week.
You can do it at first with one of your core employees who can introduce you, but there is an obvious downside to that: the unlikeliness of having a frank conversation. The best strolls will be those in which you talk to people you don’t know randomly and ask them what they are doing and see where the conversation leads. This isn’t an easy thing to do. At least it wasn’t for me. But I never took a stroll of this kind without learning something important about my business or coming upon an idea that could fix problems or add numbers to the bottom line.
THE FIFTH TIER
There comes a time when you have so many damn employees that writing memos and keeping your door open and making those strolls – all those things won’t work.
It may be when you have 400 or 500 employees. it will certainly happen when you have more than 1,000. At this stage the business will be so large (generally in the fourth stage) that you will hardly be meeting with or speaking to your core team of 50 or so anymore.
At this stage your business will be (should be) running itself. Most of the important work you have been doing for so many years – like figuring out how to grow sales and squeeze out profits – will be handled by a small team of division leaders. Your daily conversations will be with them and rarely with anyone else.
This is natural and inevitable. You don’t need to fight it, but you do need to know that because you are no longer in touch with 90% of what is going on in your business, dangers lurk.
That’s the end of Chapter 2 of Ready, Fire, Aim.
If you’d like more information about the book, including how to order it, click the button below.
Central American Modernism
CHAPTER TWO
WHEN (and WHY) EMPLOYEE SIZE MATTERS
A Different Way of Measuring the Five Stages
In the last chapter we looked at the five stages of entrepreneurial growth. I posited that there are unique problems, challenges and opportunities an entrepreneur will face at each ot these stages.
I delineated those stages by revenue because rising revenues create significant changes and because most entrepreneurs and would-be entrepreneurs think of business growth in terms of revenues.
In my experience, revenue growth has a direct and substantial impact on sales and marketing opportunities, product development challenges, operational and fulfillment problems, and regulatory issues, to name a few.
But another metric, the number of employees and/or decision makers a business has – can be more relevant in understanding other business opportunity, challenges and problems, such as hiring and firing practices, wage and incentive protocols, labor issues, corporate communications, centralization, and other management issues.
There are good reasons for that.
In The Tipping Point, Malcolm Gladwell wrote about anthropological and social studies tribal and group development dynamics. talks about how communication is affected by the size of the community. Seventy thousand years ago, these studies found when tribes got bigger than 30 individuals, they tended to split into two, but the two could live and work in harmony together until the group size exceeded 150.
After that, the intimacy between tribes broke down considerably. The reason for this, anthropologists have suggested, is about communication. With a tribe of 30 people or fewer, the leader can give his time and attention to everyone. He can communicate what he wants to communicate and intervene on an individual basis with anyone that strays too far from the tribal goals.
From 30 to 150 people, it is no longer possible for any one person to give close attention to every person in the larger group, but the leader can still exert significant influence over the larger group by giving his attention to the sub-leaders of each of the tribes of 30, which were generally people he chose.
But once the group exceeds 150 people – or five tribes of 30 – control is much more difficult to exert because it’s unlikely at that point that he has personally appointed and groomed the next tier of leaders. They respond to their mentors, who are three steps removed from him.
In Sapiens, Yuval Harrari tackles the same subject, suggesting that this control and communication problem was resolved by myths – stories that could be passed along from one tribe to another, stories that conveyed the core beliefs of the larger group.
And then there are several contemporary studies on business communication that conclude that the optimal number of employees any executive can effectively manage is six or seven.
When I first read about those studies, I doubted the conclusions. I felt sure I was already managing many more people than that. But when I measured what I was able to do – in terms of real influence – in my day-to-day working life, I discovered that six or seven direct reports was about all I could manage.
From this I developed a theory that dovetailed well with these business and anthropological studies. My theory is based on attention and influence – this idea that there is a limit to how many people any one person can know and influence.
It goes like this: In starting a business the founder hires a handful of people – usually seven or fewer – to help him get the business off the ground. There are seldom strict job descriptions or formal titles at that point. Everyone is expected to do whatever he or she is asked to do.
Working with this family, he gradually figures out the strengths and weaknesses of each member. Eventually some sort of division of labor takes place. He puts one person charge of marketing, another in charge of sales, another in charge of research and development, another in charge of production, another in charge of customer service, and so on.
Because he has hired and trained and gotten to know each of these people individually, he has no need to “manage” them in any formal way. They “get” him. They grock his desires, concerns, and peccadillos. They understand his “vision,” if he has one.
Each of these individuals may be different from one another. One may be fastidious. Another a quick thinker. One may be charismatic. Another shy. These characteristics don’t cause problems because each of the seven understands the founder and each can apply his individual strengths to further the company’s agendas.
Now the business gets bigger. And each of these seven people end up running these little operational units they’ve been given. The marketing guy hires an SEO expert and a direct response whizz. The sales gal hires six hungry salespeople. The guy in charge of customer service hires 12 employees to handle the growing volume of sales.
The communication between the leader and his immediate team is still as close as it ever was. But now you have another, say, 30 employees at this second tier.
None of these second-tier people report directly to the founder. But they bump into him at the coffee machine, and they meet with him when he sits in on one of their group meetings. And every so often they hear a little speech from him presented to the company as a whole.
They direct contact, in terms of back-and-forth discussions, is less than that of the second-tier employees, but it is still quite good. They see him regularly, understand him well and just as important, he (the founder) feels the same way about them.
They know him. He knows them. His influence – in terms of communicating his ideas, ambitions, and concerns – is easily and quickly communicated.
Now the company grows again and some of these third-tier employees are promoted to junior management positions as the size and the complexity of the individual departments gets bigger. The marketing department, for example, might break into three divisions: SEO, direct response, and “onboarding” or backend. Sales might be split into outbound and inbound, or prospects and buyers. Customer service might be broken into one group that deals with routine service issues and another that responds to more serious issues regarding product quality.
At this point the business has a population of 100 or 200 employees grouped into a half dozen departments, which are each subdivided in some way. These new hirees – these fourth-tier employees – will no longer have the same access to the guy on top that the first and second tier employees have. They will only occasionally bump into him at the office and when they do, he probably won’t know who they are. What they hear from him or about him will have passed through three gaps.
Now remember what I said in the beginning: that these first-tier employees may be very different in terms of personality, perspectives, and goals than the founder. In fact, this is quite common because founders tend to be strong willed and demanding. Dominant personalities generally attract submissive ones. To survive and prosper as a first-tier employee you have to embrace the founder’s goals and accept his style of leadership. But that doesn’t mean that you have to use the same style of leadership when dealing with your employees, in the third tier.
And the same is true for the third-tier employees that get promoted to management positions: they may have different desires, goals, and expectations than their second-tier bosses have. So when they hire and manage fourth-tier employees there is a good possibility that the core beliefs, ambitions, and interests of the founder – i.e. the “company culture” – will be conveyed to those fourth-tier employees.
And then, of course, once the business has five tiers of management that culture at the top can be all but gone.
For these new employees, the founder is a corporate ghost – someone they’ve heard of and may have seen once or twice – but they are no more connected to him or her than they are to a TV personality.
As you have noticed, in discussing the issue of employee population, my focus has been on proximity: how far away from the person of the founder each new level of employee is.
And my theory is that when it comes to hiring and firing practices, wage and incentive protocols, labor issues, corporate communications, centralization and other management issues, proximity to the founder matters.
THE FIRST TIER
The entrepreneur should have no communication or management problems with his first-tier employees. They are usually people he has known for years and, if not, they have been vetted by him personally. He knows what their capabilities are. He knows something about their work habits and personalities. And presumably he’s made it very clear that their jobs are to do whatever needs doing and are expected to work like crazy to make the business work.
And these people, this core team, they know the founder. They understand his goals and ambitions. They are familiar with his way of getting things done. They recognize that to be successful in this start-up business they must adjust their ideas, expectations and work habits to jibe with those of the founder.
Because of the nature of startups – the great demands put on every member of the core team – there is really no reason to worry for the founder to worry about communication and management issues. The founder leads the way – in whatever way and in whatever direction she feels is right. The first-tier employees follow.
This isn’t to say that a founder can’t make mistakes with her first-tier team. She can overestimate someone’s competence, or underestimate another’s disagreeableness. She can discover that someone that is very good at sales is very bad at managing salespeople. She can hire a friend or family member – almost always a bad idea.
But these are not communication and management problems. They are hiring problems. And hiring problems can be solved easily at this first-tier stage. The solution is to fire the problem person. Don’t hesitate. You won’t gain anything by handing out second chances. Trust you instinct. Vacate the seat. The rest of the core team will appreciate it and you will too when you see what a hugely posititve impact a better person will have on your business.
THE SECOND TIER
The core start-up team – you and your first-tier employees – is usually all you need to figure out your optimum selling strategy (OSS), break the million-dollar sales barrier and get the business into its second stage of development.
It can take years to get to this level, but once you get there – once you get into stage two – growth usually comes hard and fast for several years. Most of the businesses I’ve worked with see growth rates in stage two of 50% to 100% a year for three to five years. It’s an exciting time. It’s a fun time. But it’s crazy busy.
And because it’s crazy busy, you and your core team will be hiring new people crazily fast. Many of these employees will be clerical employees–data input people, bookkeepers, shipping clerks, etc. – to deal with the influx of new business. Some will certainly be customer service people. And some will be junior executives, assisting your core people in the core business tasks: marketing, sales, product development, customer retention, etc.
It’s not uncommon for a stage two business to see its employee population quadruple or quintuple in less than a year due to the rate of growth that is so common at this stage. That’s a lot a growth for a small business and a great strain on everyone’s time.
Consider the math: Let’s say you set a reasonable goal of interviewing three job applicants for each person you hire. And let’s say you plan to spend a total of two hours (solo and with other members of your core team) in the hiring process. To hire 50 people in one year you need to interview 150. Interviewing 150 people in a year means spending two hours three times a week (say Monday, Wednesday and Friday) interviewing people.
That’s a lot of time you don’t have because you (and your core team) are so busy managing the chaos caused by this accelerated period of growth.
So that’s the problem in going from a handful of first-tier employees to a business that has 40 to 60 employees: you won’t have enough time to properly interview them.
You might consider doing what many founders do to solve this problem: delegate the hiring of the new second-tier employees to members of your core team. You might, for example, ask the person that is doing most of the marketing to hire the new marketing employees, and the person that is closing the sales to hire the new salespeople, and the person that is holding things together to hire the clerks.
And if you do this, you will feel good about it because you will have saved yourself a ton of time that you were able to spend on more urgent tasks.
But later on, it won’t seem like such a good idea. In fact, you will almost certainly come to regret it. What will happen is that this second tier of employees will turn out to be a motley crew. A few of them will be superstars and you will notice them right away. A few of them will seem like bad apples to you, but when you speak to the core team member that hired them, you’ll be given a reason why you’re wrong. Most of them you won’t notice at all. They will be faces you pass in the hallway.
That’s not good.
It’s very important to be involved in the hiring and training of second-tier employees. It’s not something you should trust to anyone else. What you want in a second-tier employee is not someone that has the right education and experience to do a specific job. You want people that can rise beyond the job they were hired to do. You want people that want to rise to the top, people that are not afraid of working hard, that enjoy solving problems, and would love to become leaders in your company later on.
In short, you want hire superstars during this period of growth. And the reason you want superstars is that these people will eventually become the backbone of your business – the 50 or 60 people that will eventually head up your departments and divisions when you have a thousand people working for you.
It’s been my experience that many superstar first-tier employees are reluctant to hire superstars to work for them. I’m not sure why that it. In some cases it may be insecurity. In other cases it might be that they feel more comfortable delegating work to people that are not going to challenge it.
You don’t want that to happen. To ensure the strongest growth for your business you have to make sure that this group of second-tier employees are first-rate. And the only way you can assure yourself of that is to take part in the hiring process.
You don’t have to spend two hours on each candidate. Fifteen minutes may be enough. But spend time on every candidate. Don’t make the common mistake of telling your people: send me the final two choices. Superstars sometimes come off as brash or overly confident in job interviews. You don’t want to miss out on hiring one because one of your core team members was uncomfortable with his/her personality.
So you need to be involved in the hiring of second-tier employees. But you need to participate in their training. You can leave the technical training to their immediate bosses, but you need to pay attention to more important matters – work ethic, values and core beliefs.
You need to be in charge of letting these second-tier people know what is expected of them. I’m not referring to the sort of thing you’d have on a job description. I’m referring to the fact that as an entrepreneur you expect them to share your willingness to say yes to every challenge, to say no to every doubt, and to work as hard and as long as it takes to get the work done.
These core issues can’t be manufactured from human resources or corporate communications. If you want a business of smart, responsible, hardworking employees, you have to demand it from your core team and from the first-tier employees as well.
If you do demand it then they will demand it. And, as I said, these 50 odd people will be running your billion-dollar business one day.,
THE THIRD TIER
For most solid entrepreneurial businesses, an employee base of 40 to 60 employees is enough to break through the $10 million barrier.
Your first-tier employees have been around you, 10 or 12 hours a day, five or six days a week, for years. They know you. You know them.
Your second-tier employees don’t have the same access to you as the first-tier employees do, but because you took part in hiring and training them, they understand what you want. They would notice if they were asked to do something that contradicted your mission.
If they are smart (and they should be if you hired them right) they will tailor their work to accommodate your goals. If their bosses disagree with bits and pieces of what you say, they will accommodate them while recognizing that their ultimate interest lies in pleasing you. Thus, your first-tier and second-tier employees can be considered your core team for growing your business.
Your third-tier employees, however good, should not be seen as part of the core team. Individuals can earn their way in, but these employees are simply too far removed from you to be expected to always understand and pursue your primary interests.
As your employee base grows behind the core 40 to 60, your responsibilities will grow and change. You will no longer have the time to spend interviewing, training, and getting to know all these new people. You will allow your second- and third-tier employees to do all that.
Consequently, you will know very little about your third-tier employees. You won’t know much about their personalities. You won’t know which ones are smart or ambitious or cunning. You won’t even know much about their work habits, except the few that always arrive earlier and leave later than you do.
But if you have the right instincts, you will feel the need to know them. And so, whenever they are mentioned by one of your core employees, you will ask about them. You will wonder what role they are playing. You will ask about their strengths and weaknesses. You will want to discover if they might be extraordinary in some way that can benefit the business. But you won’t be figuring this out by interacting with them. You will be getting your impressions from their managers. In other words, you will get your opinions of them second hand.
This is not good, but it’s pretty much unavoidable. Time is always in short supply. And as the leader of a growing business, you must give the lion’s share of your time to growing revenues and profits. That can only be done by working with your first-and second-tier employees that are involved in those efforts. The third-tier people are working outside of your domain.
Thus, you will know very little about your third-tier employees, but they will know – or think they know – a good deal about you. But what they know is based on seeing you from a distance, listening to you speak to the company as a whole, through your corporate memos or most powerfully, what their bosses say or imply about you.
The big difference between second-tier employees and third-tier employees is that the latter cannot see through their bosses to find out what you want. When these third-tier employees look through their bosses, they see your first-tier people, some of whom may harbor different ideas about running the business than you have.
To compensate for the distance between you and your third-tier employees, you will have to do certain things that may rub against your grain. For one thing, you will have to write memos directed to them, memos that explain changes that affect them, but more importantly, memos that explain and reinforce your ideas about what you want the business to become and how they can help.
Every four to six weeks you should give them a general update on where the business stands and what you are trying to do. Tell them why growth is important. Explain to them that growth brings chaos and that chaos creates problems that have to be solved. But the solutions to those problems can’t be procedures and processes that slow growth down. Solutions must flexible and temporary. To continue to grow, the business needs to experiment, and that means more problems and that’s fine. Try out new ideas. Fix them if they fail. And use that knowledge to come up with the next experiment or solution.
Don’t overdo the memo writing. You are the big picture person. Stick to the big picture, the big problems, and the big opportunities. There are some management consultants that recommend weekly or even daily communications. This, to me, is crazy. You have more important things to do than that. And they don’t want to hear from you that often.
So this sort of “corporate communication” will become necessary. It will be your primary vehicle for making sure all those people you don’t know well and rarely see have a good idea of what you want to do. But there is one more thing you can do with these third-tier employees that can be very helpful. Tell them that if they ever have any questions, your door is always open to them.
Don’t say, “questions or problems.” If they have problems they should go to their managers, your core team, first. But do make them feel like they have the privilege to drop by for a chat if they need some direction. Most won’t take advantage of it, but knowing that you are open to such contacts will make third-tier employees feel better towards you. And that’s important.
THE FOURTH TIER
It’s hard to draw a line between third-tier and fourth-tier employees. It can happen when the population is 150 or it can happen at 300. Or it can happen at 600. It depends on how the business is structured and what sorts of jobs all these additional people are hired to do.
But I do think there is a distinction between third-term employees and the next tier. And that distinction relates to this open-door policy – giving employees the feeling that you are able to talk with them any time they feel the need.
You will know when this happens. You will find yourself unwilling to say, “Drop by my office any time.” You may still want to say that to establish your good feelings towards these new hires, but your daily schedule will make shudder at even the thought of it.
When you get to this level, you have to change one of your tactics. You should continue to send out the occasional corporate memo. But in place of keeping your door open, you should begin taking a 15-minute stroll around your business every few days or once a week.
You can do it at first with one of your core employees who can introduce you, but there is an obvious downside to that: the unlikeliness of having a frank conversation. The best strolls will be those in which you talk to people you don’t know randomly and ask them what they are doing and see where the conversation leads. This isn’t an easy thing to do. At least it wasn’t for me. But I never took a stroll of this kind without learning something important about my business or coming upon an idea that could fix problems or add numbers to the bottom line.
THE FIFTH TIER
There comes a time when you have so many damn employees that writing memos and keeping your door open and making those strolls – all those things won’t work.
It may be when you have 400 or 500 employees. it will certainly happen when you have more than 1,000. At this stage the business will be so large (generally in the fourth stage) that you will hardly be meeting with or speaking to your core team of 50 or so anymore.
At this stage your business will be (should be) running itself. Most of the important work you have been doing for so many years – like figuring out how to grow sales and squeeze out profits – will be handled by a small team of division leaders. Your daily conversations will be with them and rarely with anyone else.
This is natural and inevitable. You don’t need to fight it, but you do need to know that because you are no longer in touch with 90% of what is going on in your business, dangers lurk.
That’s the end of Chapter 2 of Ready, Fire, Aim.
If you’d like more information about the book, including how to order it, click the button below.