Why Your Dictatorship Will Destroy Your Business

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(for those who want to build sustainable companies)

Say you're about to hire Chuck as the CEO of your company.

You start thinking:

  • "This dude will become boss of everything."
  • "We will rest on his laurels."
  • "He will dictate the direction of our company."

The next thing you know:

  1. He comes in with grand ideas.
  2. He starts messing with your culture.
  3. He starts revamping things that have taken years to build.

In short, he gradually destroys your business with his incompetence.

Why Do Dictatorships Destroy Countries?

  • They're accountable to no one.
  • They can do as they please.
  • They're given supreme power to do what they believe is needed.

When that happens, you get a recipe for disaster.

Think of the Merrill Lynch CEO dude who decked out his office using millions of shareholder $$$, probably thinking:

  • "I should give myself $X,XXX,XXX compensation."
  • "That will make me happy and super comfortable."
  • "Therefore, I will perform better for the business."

Given enough power, person X will rationalize their profitably-effed-up decisions for what they believe will make a better business; their biases corrode their decision-making, and ultimately hurt a company in the long-run.

BOO.

The Greatest Country in the World

You know has made America sustainably the strong mother ^@$@^% for the last few centuries?

  • a separation of powers (legislative, judicial, executive)
  • no one $^@^ can mess up the country
  • you don't rely on person X's competence, since the other two -- equal in power --  can override X's incompetent decision

That means if Johnny can't perform X -- but thinks he can perform X, but two others with equal power say: "Nuh uh. You think you know X, but you have no idea about X", that means Johnny's incompetent ideas are disqualified before they can destroy the organization.

Checks-and-balances to the ^^@!.

A separation of powers consistently drives the best ideas to the top of the pack; sure you might have hiccups, but you ensure that the best ones rise freakishly-freshtastic much more than the bad ones.

It's why Google, probably the most well-run organization in the world, has a triumvirate (Larry Page, Sergey Brin, Eric Schmidt) that decides the direction of its company.

  • If Larry thinks Q is best, but Sergey and Eric think T is best -- then T wins
  • No one person has supreme power
  • The best ideas/decisions/stuff rise to the top

Consider. Triumvirate.

If you have a company with just one person in charge, consider forming a triumvirate:

  • one person that's elected by your employees (ding! ding! power to the front-line!)
  • one person that's elected by your senior execs
  • one person that's elected by your: _________

Then do this:

  • Give each an integral responsibility (e.g., CEO of products, CEO of strategy, etc.).
  • Ensure each can check-and-balance the other, so that power is equally distributed across the board.

Accountability, sustainability, freakish-fantastic results.

Separate powers.

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Posted on February 17

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