Today, our guest is Chuck Blakeman. He’s the founder of the Crankset Group and this is Work Minus Management. Hi, Chuck. How are you?

I’m doing well, Neil. It’s great to be with you.

It’s great to be with you, too. Chuck, you have a lot of themes that you talk about in your work that are very similar to what we talk about here at Work Minus. So, I want you just to introduce yourself and tell us about what you do.

Sure. I’m ADHD, left handed, right brained, dyslexic, barely finished high school. I’m a serial entrepreneur, built 12 companies in 8 different industries on 4 continents. So, I’m an incurable entrepreneurial.

So, you have a problem.

So, I have a problem, a disease, yeah.

Nice. So, tell us about the Crankset Group, tell us about the stuff you do, and the topics you talk about.

The majority of my work is actually working with companies to help them build their leadership and their leadership teams and to create organizations, organizational structures that replace the operating system that we’ve been working with for the last 125 years. So, that’s what we do the most of. And then I speak on that and write on that and stuff as well. I’ve done a couple of books, number one business book of the year and number ten and my third book is coming out next fall. It’s called “Rehumanizing the Workplace by Giving Everybody Their Brain Back.”

Nice. You have some really good lines there, Chuck. Tell us the names of the other book titles you have.

The first one is called “Making Money is Killing Your Business”. It’s for entrepreneurs and for small business owners who don’t understand that they should not try to make money. What they should do is build a business that makes money and figure out how to create freedom for themselves and all that good stuff. And then the second book was called “Why Employees are Always a Bad Idea”. No exceptions. And the premise behind that book was that the factory system, which I riff off on my third book, the factory system sold us goods with this idea of an employee manager kind of thing and we need stakeholders instead. We’re entering the participation age and the emerging work world is a place where people want to participate in building your company but they also want to share in rewards. They want to build it with you, not for you. So, the top down thing needs to go away.

We’ve got a lot of ground to cover today. Let’s start with the industrial age which you referred to earlier. We’re going to end up talking a lot of bad stuff about that time. But let’s start with the good stuff. What were some of the things that we learned that were good from the industrial age?

Process and efficiency and measuring things. I can’t tell you how often I go into companies where they’re just not measuring. And I don’t know how you do business… You cannot ask questions if you don’t have good metrics. Numbers is the language of business and the industrial age helped us to figure that out better than anybody. It’s a process and development of innovation through watching behaviors. “Our numbers or this machine is running at 80%. How do we get it to 85%?” Well, it’s a great thing. And Edwards Deming is a good example of someone who really blossomed as a result of the industrial age. He was the father of process improvement and basically revolutionized Japanese car manufacturing so that it overtook the U.S. because the U.S. would not listen to him. So, he went over to Japan in the ‘60s and the rest is history.

So, that’s the good stuff. Let’s shift and talk about the other side. What are some of the things you like to talk about that are elements that we should have dropped a long time ago from the industrial age?

Well, the biggest one we should have dropped is that people are stupid and lazy. Frederick Winslow Taylor in 1911 wrote “Scientific Management”. Peter Drucker said that this man, Frederick Winslow Taylor, had more impact on the 20th century than Freud, Darwin, and Marx. So, maybe that gets your attention. And this guy, he invented basically management as we know it. We call it the factory system. And his premise was, “the average employee is so stupid, they more resembled the ox than any other type,” and, “the average employee is so lazy, they’ll only work so hard as to not get fired.” Well, if people are stupid and lazy, only solution you have is to find the very few smart and motivated ones, lord them over the stupid and lazy ones, and thus, management was born. So, two things you need to forget about from the industrial age is people are stupid and lazy and hierarchical organizational design that we inherited from slavery through the military into the factory system. The pyramid scheme needs to go away.

This is huge. Now we’re getting into the meat. I love it. Let’s start with the title of this episode is Work Minus Management. So, what are some of the core things about management that go against how we should be operating and how can companies come up with ideas to overcome that?

This is a great one. This is in my third book. I’ve spent the last year and a half looking asking this question has anyone ever proved that managers make people more productive. Neil, I can only find one study that even approaches the question. That has been one of the dumbest assumptions we’ve ever had from 200+ years of factories is that people work better, faster, and more productively and we make more money because there’s somebody standing over them with a whip or with joy, funny. Managers sometimes they lead with whips, they lead with motivation, they lead by hugging people, but everybody says managers make people more productive. I can only find one study that approached it. It was Google’s oxygen study and it was one of the worst studies that I’ve ever seen in my life with confirmation bias. They tried to get rid of managers in 2003 and did it badly, did it wrong, reeled it all back in, and then spent a few years studying why managers matter. What they came up with here, they said there are ten behaviors that people need at work in order to be successful. By the way, one of those ten behaviors is to not be micromanaged. I think Google overlooked this. But ten behaviors that people need at work and then they leaped to, therefore, managers matter. Well, this is a form versus function discussion. There’s ten functions, ten behaviors, and we just assume there’s only one way people can get those. So, this whole concept that people are stupid and lazy and the managers make them more productive, it’s just bizarre.

So, you said Google did it badly. So, there’s obviously a right and a wrong way to adopt this new approach. So, what do you mean by that?

In my new book, I talk about this. There’s three things. There’s three influences on how we make decisions and I don’t need to give you all three but the third one is the human need for certainty. It’s the one that rules over the other. But we make most of our decisions in business based on every day should look the same and the pain I know is better than the pain I’ve yet to experience. So, let’s just keep going. And we have this pyramid scheme that’s been in place for 175 years. Every study you should see on this says this thing doesn’t work and then they throw a little more lipstick on the pig because they don’t know what to do to fix it. Google understood that this was a bad idea and what they did was they didn’t bother to look at this closely and they removed managers. They announced the end of managers. The human need of certainty is recoiling under that statement. “Okay. So, you’re removing the one thing I understand. What are you putting in its place?” “Well, that’ll just evolve. It’s organic. We’ll just make it up.” Well, three months later, they reeled it all back in because people were panicking and had nothing to replace it with. The way you do it wrong, the way you’d make any change is you remove the thing people are comfortable with even if they don’t like it and you give them nothing in replace. So, the process here should be additive. Let’s add things that make managers irrelevant and over 3, 6, 12 months, people are going to look around and say, “Why do I need that guy anymore?” And the manager’s going to say the same thing. “Why do I need to be doing this to those people? There’s a better place for me in this organization.” So, add. Don’t subtract.

Let’s get into what you can add to make management irrelevant. You mentioned certainty. What are some things that an organization can do to build in certainty aside from just appointing a bunch of managers?

The first thing you need to add is the idea that we are mission centered. We are not department centered. We’re no longer working for the department or the boss in the department. There is no department. There is no boss. There’s a function. I don’t work for the marketing department. We work as a team in the marketing function and the only reason we exist is to serve the mission. So, everybody should be calling us on that on a regular basis. In the top down pyramid scheme, you create your department, your technology, your marketing, or whatever, and your job is to make it as big as you can with as much money as you can because that’s how you make more money. So, one of the things you can do is reversible that whole thing and say, “Okay. We’re not going to do this with one individual who is a manager. We’re going to do this with a team of technology people and a team of marketing people.” And your job is to make the marketing department as small as possible and as efficient as possible in pursuit of the mission statement. And the better you are at that, the more money you make. That would be number one.

Number two would be what we call distributed decision making. This is the core practice of a rehumanized workplace. Neil, what makes us adult, there’s only one thing, I’ve studied it. One thing makes us adult, there’s things that make us human, but the one thing that makes us adult versus a child is this, the ability to make decisions. It’s also the privilege and responsibility to do both. And we don’t like that. We don’t want the responsibility but that’s what makes us adult is the ability to make decisions. What’s the one thing people are not allowed to do at work? Make decisions. As soon as you cross the threshold, somehow you’re a seven-year-old again. I’m going to tell you exactly what time to show up, what time to leave, what time recess is, we call it break, what time lunch is, all of that stuff, and exactly what to do all day long. I’m going to tell you that’s what managers do and we turn people back into seven-year-olds and then we wonder why month after month after month for the last 25 years Gallup does a survey and finds out that engagement is at 30%.

Let’s put some nuts and bolts around this. I mean, let’s say you are in a management position and you want people to work for the mission, not just the department. You want to turn over a lot of decision making to others. Can you just do that overnight? Is that something where I can just say, “Hey, from now on, we’re going to start making our own decisions”?

That would be subtractive. “Hey, you guys are now all stakeholder adults. You’re not employees. You’re stakeholders. You’re all adults and you’re all part of a distributed decision making call it DDM teams. I’ll be on the golf course.” That’s not the way this works. I’ll give you a live example. And by the way, I want to say this up front, I love managers. I hate management. And I feel sorry for anybody who is put in a position where they have to be called and work like a manager. It is a god-like position that no one person could possibly do. Those ten behaviors that Google outlined, I don’t know anybody who could do more than five or six of them maybe a superhuman hero here or there could do seven. And then we hate managers because they can’t do the other three. They are set up to fail on a regular basis. Everything is on their shoulders.

So, to fix this, let’s go to the manager and let’s say, okay, what are the five out of the ten things you’re really good at? Let’s take those to the team and see if the team agrees. They’re going to because you’re really good at them. Yeah, you service really well at these five things. Okay. How about if you rejoin the team as one of many and you keep those five things. Let’s take the other five and let’s put them on a board and let’s ask the team which one of you would be good at number one? “I think Bob would be a really good trainer. Doesn’t everybody agree Bob’s a really good trainer? Okay. Bob, you’re in charge of training. Okay. Fred. Fred, you’re really good at reports. Why don’t you do the reports stuff then? Sally, you’re really good at mentoring people and that stuff. Why don’t you try to help us keep the peace?” Here’s all these ten things and we’re going to find in a team of three people, you will find these ten things. In a manager, you will never find all of them. So, that’s the simple but not easy way to redistribute this and most managers will be thrilled to do that because now they get to do what they’re really good at and other people get to do things they’re really good at and now the managers go back into doing some production as well as leadership. Nobody’s managing. We’re all leading. That’s part of the tectonic shift here is that there’s no managers. There’s a lot of leaders. Everybody becomes a leader. There’s lots of stories about that. I can talk to you about companies with 75,000 people and not a single manager in the whole place and 75,000 leaders.

Well, go ahead and tell us some of those stories about what it looks like in real life.

That’s Haier corporation. They’re Chinese, in a communist country is one of the most capital oriented companies in the world. Every one of those people, all 75,000 are capitalists and the way they do it is they have 4,000 distributed decision making teams of 10 to 15 people each that are entirely locally responsible for everything, including their budget, including their salaries, including their revenue. And I’m talking accounting, marketing, technology, all these teams that internally we usually can’t fire. We have to use them even though we hate our technology team. You’re stuck with them. Not at Haier. At Haier, it’s a team of 15 people in this local situation that does technology for 8 or 10 or 15 other teams and if you don’t like them, if they’re not serving you, if their price is too high, you can go out on the common market and buy your technology somewhere else and put them out of business. That’s a great example of a distributed decision making team model. They make 10% of all the washing machines, refrigerators, and stoves in the world.

W.L. Gore, people know that one, W.L. Gore, they make Gore-Tex, and Bill and Vivian Gore started this one in their basement in 1958 and it’s never had managers, 10,000 people and not a single manager in the whole place, all DDM teams and they performed at the top of their industry. GE Aviation, Tom Peters, who wrote the book “In Search of Excellence”, tweeted me about a year and a half ago about this whole idea of DDM teams and he said, “Hey, if there’s ever an airplane made by DDM teams and with no managers, make sure it’s labeled. I’m not getting on it.” So, I just said, “Well, Tom, GE Aviation makes like 25 of all the airplane engines in the world. They have eight factories, no managers in any of those factories. You’re going to have to take the bus from now on.”

Nice. Well, let’s get over to the other topic we talked about of rehumanizing the workforce. You mentioned before that there was a time when humans were really just looked at as robots. Workers were just as good as an oxen almost. Now, we’re in an age where not just manually, factories have replaced everything with robots, now even in knowledge work we’re looking at the same thing. What is the future of work look like when it comes to how can we blend in human talent, robot talent, and what’s the right perspective to have?

The future of work looks like 1800 or 1750. Before factories, I got up in the morning and I decided I want to be a shoemaker and I want an apprentice and for four or five or six years I learned everything I could about making shoes and then I went out and started my own shop and I spent the rest of my life learning everything I could about making shoes, the metallurgy, the leather, the tanning, the stitching, the forms molding, the customers, the marketing, everything. And then you stuck me in a factory and you had me put a nail in the left boot. That is dehumanizing. And the future of work looks back at what we did before the factories. How did people feel like adults then? They made decisions. So, we have to rehumanize workplace by giving everybody their brain back and allowing and requiring localized decision making because input equals ownership. We wonder why people aren’t engaged? It’s because some manager walks out of a walnut office with a brilliant process, imposes that process on the ten people and walks back into the office, nobody owns it. So, we’re not engaged. The big problem here, Neil, is that in the factories people were needed to run the machines and pretty quickly they became extensions of the machines. Machines need to be managed. They are stupid and lazy. And people eventually very quickly became extensions of machines were thought of as just like machines and so we need to separate the people and the machines again, same thing with robots going forward. Here’s 125 years worth of data. If you’re nice to people and you treat them like adults, you make more money. And this is true whether you have robots. You still need people. You need fewer people. If two factories have the same number of robots and the same number of people and one factory allows and requires localized decision making and the other one doesn’t, the one that has DDM teams will make more money. So, that is a consistent thing throughout history for thousands of years, 80% to 90% of all three people own their own business and make decisions. Now it’s 15% and everybody looks at them like they’re weird.

Now, earlier you talked about a list of ten things that managers need to do to be effective and that no human could do all those things. Are there things on that list that we could give over to a computer or software that could do it better than a human could ever do it?

Actually, there’s a lot of AI involved in this is and one of the things that’s allowing and helping larger companies and smaller ones get to where they don’t have managers is technology. The ability to measure, one of the things managers have done well and badly is one of the responsibilities is to measure and report. And AI could do that incredibly well and just standard reporting mechanisms can do that incredibly well and have for a number of years but a lot of the functions of the management will be automated by the DDM teams themselves. They will plug the data into their software and say here’s the result we want. Here’s the process we’re going to use. Here’s the metrics that prove the process is working. Let’s plug that into the software and the software is going to guide us and tell us if we are creating the right result with the right metrics with the right process. And we can also plug into the software what kind of rewards we get as a result of it, what kind of incentives, what our base pay should be. There’s a factory out there in Brazil that does not pay people a base salary. They pay them per washing machine created and they do them in pods. They don’t do them in assembly lines. All of that can be artificially or not AI even. It can be just measured with a piece of software and 50% of management goes away.

So, Chuck, in all of your experience, have you ever had in a situation where someone gave you a convincing or legitimate argument that we really do need to keep management in employees?

No, they’re all emotional, just like Tom Peters. Every single time I get an emotional argument. It’s about ego, power. “We’ve always done it this way. It’s scary to do it the other way. Things will go down before they go up,” which is not true. “It’s a fad,” which is not true. W.L. Gore has been around 65 years. Every argument people have given me, there’s about 12 myths of DDM teams and the participation age and they’re all just myths and they’re all based on emotion, just like Tom Peters. He actually spent a year and a half throwing emotion at me. This is a man who’s incredibly metrics driven and I kept giving him data. “Hey, don’t make airplanes this way.” I gave him data. “Here’s eight factories.” Every time he came back to me emotionally, I came back to him with a fact. He finally blocked me a year and a half later because sometimes when you don’t have any data, you just want to run away. There’s a big investment. There’s a huge ongoing emotional investment in the top down hierarchy. People actually think it works better for them. That’s another thing they say is, “Okay. Maybe the people at the bottom are losing but I’m winning so I’m not going to mess with this thing.” Nope. I can show you any company in your category who’s doing it differently. If you are a top down pyramid scheme guy and you want to become a flatter, structured, and have DDM team, you will make more money and you will have more freedom and you will enjoy your life more. So, you don’t lose by doing this.

Is DDM something you can just try a little bit and get your toes wet or is it something where you really need to be all in for it?

There’s no putting your toes in this. Ricardo Semler wrote a book called “Maverick” in the mid ‘90s and then he got invited to teach at Harvard and he was trying to help people with this stuff. He called them the alien Wednesdays. He had people coming through his factories in Brazil showing them how to do this and what he realized was people were picking up the things that they felt would fit into their pyramid scheme and leaving behind the things that might cause destruction to the human need of certainty that they already had. And it just doesn’t work. This is an all in thing. Either people are smart and motivated or they are stupid and lazy. This is not new stuff, Neil. Douglas McGregor wrote a book in 1960 called “The Human Side of Enterprise” postulating theory X, theory Y, people are stupid and lazy, people are smart and motivated. And every factory he looked at or every company he looked at where they believe one of those two things, it came true. We make people stupid and lazy or we make them smart and motivated and it is an on and off switch. You either rehumanize your workplace by having decisions made locally or you don’t. You can’t be a hypocrite and say you’re a human and then make decisions for me. You can’t do it.

Well, Chuck, obviously, you have a lot of great thoughts to share. Where can people go to keep track of you and get one of your well-titled books?

ChuckBlakeman.com would be a great place for them to find everything we do. ChuckBlakeman.com. They can be email me at [email protected] and they can find my books on Amazon, audio, visual, long form or every form available. So, just check us out at ChuckBlakeman.com.