Chantal: Chuck, welcome along. Thank you so, so much for joining us on the show today.
Chuck: It’s great to be with you Chantal. Let’s do it.
Chantal: I’m hoping you can start by explaining to us what exactly is the participation age?
Chuck: Yeah, I didn’t make that up. That was something presidential candidates were using as far as back as 2006. I’ve built eleven companies in eight industries on four continents, and one of the businesses I built was a branding and marketing company. We were … In 2006, we were receiving an award, an award for Global Marketing Partner of the Year from Sun Microsystems, and I heard a futurist talk about the participation age, and it brought an umbrella together for me that I had been studying for years, and years, and years, and been living out in our own lives. And that is the idea that we’re in a different place than we were in.
Chuck: The emerging work world is very different than what we’ve seen for the last 150 years. Most companies are running on what we call a factory system model. They’ve inherited it, whether it’s a doctor’s office, or a climbing gym. It’s a factory system model with guys in ties, a top down hierarchy. We call it a pyramid scheme. And with people at the top telling people at the bottom what to do. And we just think that’s the way that you’re supposed to do it.
Chuck: The reality of it is it’s not. It’s something we’ve done for 150 years. You can’t find it really before the factory system, and you shouldn’t find it today. The participation age has two hallmarks. Participation and sharing. People want to participate in building a great gym, and they want to share in the rewards of doing so. And when you invite them to do both, magic happens.
Chantal: Explain to us the secret to turning employees into stakeholders.
Chuck: Yeah, it’s to invite them again to be owners, and to be … The concept of a stakeholder is in the early state days of the West in the U.S., you’d line up three or four hundred wagons on the edge of one territory, and they’d all go off at a gunshot, and they’d ride across this territory, and it’d be a hundred, two hundred miles of territory, and whenever you got to a piece of land that you thought was the one that you wanted, you put a stake in the ground with your flag on it, and you owned it.
Chuck: And that’s the concept of a stakeholder, is we put a stake in the ground, and we all act like we own this place. If I see a piece of paper on the floor in the hallway, I pick it up because I own this place. If I see someone struggling in some other area, I don’t say, “Well, that’s not my job,” I get involved. And so that’s the key … The key is turn people into owners, and the methodology for doing that, the one very simple practice that expands out into everything else is what we call distributed decision making. Everybody makes decisions, and the only way you can do that is through distributive leadership. There’s no longer one guy at the top, or one woman at the top telling everybody what to do, but now we’re all leaders. You can’t make decisions unless you are a leader. Everybody from the guy pushing a broom to the guy who has the strategic office. They’re all now leaders together, and we’re all figuring out how to make decisions together to work this together. That’s a big piece of it.
Chuck: And in simpler terms you turn everybody into a capitalist. Let’s invite them all to play the same game of participation and sharing. Organizations want people to participate, but they don’t want to share. Would you please be more engaged so I can run off with more money, and somehow that’s not motivating to people. Gee, what a surprise. Let’s invite them to do both, and let’s invite them in to build a great culture, to have time, money, experiences, education, rewards, recognition, all of the things that make for a great workplace. Let’s have them help us build that place and watch it take off.
Chantal: Chuck, I want to understand this concept of distributed decision making in the context of a fitness business. Are there any examples that you could share with us so that we can understand how that might actually work within our own business?
Chuck: Sure. Some of the gym owners I’m aware of … I’ve spoken a lot at the Climbing Wall Association, and they have, some of the bigger gyms have people who are in charge of nothing but birthday parties. That’s what they do, birthday parties. And the principle here is in distributed decision making, the principles, there’s two principles, one is, the first one is that the more input I have in a decision, the more likely I am to own that decision. Pretty common sense stuff, but we don’t allow for it too often. Usually it’s some guy in a tie, some fancy person in an office who’s coming out of his office for three seconds to tell other people what to do, to give them directions, and then they walk back into their office. And I have no ownership in that decision whatsoever, but instead of managing me and coming out of the office and telling me what to do, the second principle is decisions should be made locally whenever possible, and it’s almost always possible.
Chuck: If there are decisions to be made about how to run a birthday party, and where to set up the things, and how to set up the gym for those parties, and how to dedicate a corner of that, and how to run these things, and how to make them profitable. We ought to set up a business unit that is the birthday party team, and that teams hires, that team fires, that team decides together what it is that they should be doing. They make their decisions, but they don’t do it in a vacuum. That’s the key thing here. People when they start hearing me talk like this, they start hearing chaos and anarchy, and that’s not what we’re talking about here at all. Nobody is saying that. What we’re saying is allow and require them to participate in the decision making, and really in the best scenario have them come up with the decision, and then bring it to you, and say here’s what we intend to do.
Chuck: We call it two step decision making, and distributed decision making there are two very simple utterly profound steps. Step number one, whoever has to live with the decision, and actually carry out it should make that decision. We’ll just say these people here in the birthday party, they have to decide what supplies, and what party things they need to buy. They’re the ones who are gonna have to live with that. They’re the ones who have to live with whether kids like that or not. They should actually make that decision. That’s step number one.
Chuck: If that’s all that you had then you’d have chaos and anarchy because now everybody … You can see everybody, the guy in the retail shop out front, and the guy working with the back office, they’re all making their own decisions, and not paying attention to anybody else. Step two, so step one is the decision should be made where it has to be carried out, but step two is whoever is affected or impacted by that decision should have input in it, and that changes everything. Now you have safe, very safe decision making because who has to pay for those supplies? Well, accounting or the gym owner depending on how small the gym is. You better get them involved in this decision before you make it, and there is safety regulations, and there is all kinds of things, and who will be the customers? You should check with your customers to see if that’s what they would actually want is those kinds of things.
Chuck: And so you find yourself checking with all sorts of people to make sure that you’re gonna make a good decision. If you’re gonna buy a copier, the front office wants to buy a copier, well, the people who make copies, they should actually be the ones who make the decision we’re gonna buy this copier. That’s chaos and anarchy all by itself, but then you talk to the people in accounting, to the owner, and say, “Hey, we need a copier. Is there room in the budget?” “Yes, there’s room in the budget.” Great. And then you have to talk to the IT people and say “What kind of connections do we need?” And then you talk to the people who receive copies, and all of those people give you their input, and then you can make a very safe decision based on how much budget you know you have, and what copies we need. You can see this actually works actually very well to have distributed decision making. It’s actually much better communication. Much safer decision making. You can still make bad ones, but you can see that it’s utterly simple, and it’s utterly profound.
Chuck: And it’s always step number two that people struggle with. They don’t do enough to work to get to ask themselves who is going to be impacted by this decision, I better check with them. The other team owners, all, there’s lots of people impacted. That’s the basics behind distributed decision making in a participation age company, and when you do that people turn their brains back on.
Chantal: Chuck, as you were speaking through that I was thinking about different scenarios within a gym environment, and the one that really came to my mind where this could make a huge difference is our onboarding process. Because I think quite often our onboarding process for new members happens at quite a senior management level. It’s a decision that’s made there. Whereas they’re not the ones that are actually stepping through that customer journey as you’re welcoming that new member on board, and you’re actually taking them through your facility, and talking to them about all the great stuff that’s going on. Would you agree is that a good example where …
Chuck: It’s a great example.
Chantal: That practice would work really well?
Chuck: Fabulous example. We have an 11 step onboarding process, and I’m not involved in any of it and I own the company. And senior management, senior, we don’t even have that. We have leadership, strategic leaders, they’re not involved in that kind of stuff. What happens is the team decides that they need another member because they’ve got too much work, too much revenue, too many clients, whatever it is, and then they do step two, who else are gonna be impacted by this, so they check in with all, us, and other people who will be impacted by that, “Hey, do you think we need another team member? Do you think that’s gonna be a good idea?” And we ask them hard questions and we get all that figured. We go through that whole process and then they decide they need a new team member, well, they go find a new team member. And we’ve given them constructs for that.
Chuck: In a larger company, there’s people who could actually do the front end of finding them three, or four, or five candidates, but we actually teach them how to do this themselves. Put out the ad, do the whole thing, and they bring in people, and they interview them, and guess what? We’re gonna be impacted by this, so we interview them too. But they put the process together because we don’t believe in arranged marriages, and that’s basically what we’re doing to people. I’m walking out of my office with the new person, and I’m saying to the eight people in front of me, “Hey, this is your new arranged marriage. You will now be spending eight hours a day with this person that you’ve never met. Good luck with that. I’ll be in my office.” There is zero ownership in that.
Chuck: Remember the hallmarks of the participation age? Participation and sharing. I want to participate in hiring the people that I’m going to be married to eight hours a day, and I want to share in the responsibilities of that, and share in the rewards of having gotten the right people to work with. The copier thing is a great example as well, but that’s a wonderful example of that. We also then have mentors and we require that the teams come up with a mentor. Somebody volunteers to mentor that new person, and for the first three months someone meets with them weekly, and there’s a list of things that we’ve all put together, and we did this list together. Here’s things that somebody needs to know in the first 90 days they’re with us. Our vision, our mission, our maps, our processes, how to get paid, training. It’s not that the mentor has to do all this stuff, but the mentor meets with them to make sure that that’s all getting done, and points them in the right direction, and basically befriends them, and gets them involved in our culture, and all of that stuff. You can see there’s a process that is completely peer driven here, and as a result they own the people that are coming in.
Chantal: Chuck, let’s say we do implement this process into our business. Give us some insights on how we actually go about measuring performance, and incentivizing loyalty, innovation, and productivity with our stakeholders.
Chuck: Sure. Every company that does this sort of thing has better processes, more metrics, higher productivity, the whole thing. And this works best when you stop managing, when you actually eliminate managers all together, and you have a network of teams. You have strategic teams. You have tactical teams. You have maybe an accounting team. You have a birthday party team. The front desk team. But you have these people who are doing teams, and in a small team you’d all be one team. If there were eight of you, you’d just be a team. And let’s together and let’s work for the mission.
Chuck: The first thing we have to do is change our orientation as to who the boss is. Boss is a four letter word and we don’t use it in our business. Well, that’s not true. We use it in one aspect. We change … The first thing you have to do is decide that the mission is now the boss. What is the mission? What is the result we want to get our customer? That is everybody’s boss. As the owner of my business, I go to my people and say, “Okay, I’m not longer your boss. Don’t ask me what to do. Ask the mission statement. That’s my boss too. I serve at the pleasure of the mission statement. My whole presence here in the business is to get the mission statement accomplished, and we all serve that boss, so that’s our boss. If you want to know what to do to buy a copier or birthday supplies, or start a new product line, or add somebody to your team, ask the boss, and then ask all the other people around you what do you think the boss would think of that? And get everyone involved in that decision making.”
Chuck: That’s the first thing is to change our orientation. We now all work for that one boss. That would be the biggest first thing to get started is that reorientation in that direction.
Chantal: Excellent. Thank you so much for that. Chuck, we want to finish off today with the first three steps that we should all take to start implementing this stakeholder culture.
Chuck: Great. Well, the first one is inside the owners head and inside the leader, the strategic leader’s heads. We have got to believe that people actually do want to be, to participate and to share. They actually are self motivated. They aren’t stooped in their ways, that they are smart and motivated. There’s a wild assumption out there that managers actually make people more productive. There isn’t a shred of evidence to that. To the contrary when you remove managers, when you allow and require people to be adults at work, grow up, take responsibility for your life, they’re gonna do it. We have to have that in our heads first, is these people really can and should be adults at work. They buy houses, they marry people, they decide career paths, and we’ve done of all kinds of incredible decision making. They can do that at work too. That’s the first piece of work is in my head do I believe that the people who I have here can, and will be self managed, and self motivated to do this kind of stuff if I allow it and require it.
Chuck: The second thing is for them to come up with processes. For them to, not you, not … There’s no manager here. The front desk or the climbing wall gym team, let’s put together a process for how we actually run our piece of the business, and they don’t do it in a vacuum. I give them input as well, so we have processes that are put together with metrics. How do we know this process worked? What are the actual specific numerical metrics that we can say when we run this process, every time we run it we know it’s working because X happens.
Chuck: And then the third thing would be to decide together who should be doing what roles and responsibilities, and to put together a document for each individual to document their commitment to their personal commitment to the gym, their team’s commitment to the gym as a team, and their personal commitment to other teams in the gym, and they put that letter together, and they sign it, and everyone else signs it. We put that together as a simple thing. We call that keeping your agreements. When we decide that red means stop, and green means go, and we all agree to that, things work really well. If someone decides not to keep that agreement, it’s a problem. That’s how simple this stuff is. Let’s figure out what needs to be done. Let’s put together a process to do it. Let’s sign up for that, and let’s actually physically sign a piece of paper where we all agree this is what we’re gonna do, and then let’s do that.
Chantal: You know what they’re three simple steps, and I want to thank you so much for explaining that so articulately because I think this is something that we need to be reviewing about for our business, considering for our business. Thinking about how our business currently operates, and really taking into account everything that you’ve shared with us today, and Chuck I want to thank you so much, and I want to encourage everyone to jump online, and I will be putting a link in the show notes, of course to your website, to your books, and want to encourage everyone to also check out your TED Talk online. Chuck, thank you so much for that. Any last messages that you want to leave us with today?
Chuck: Yeah, just one. All the data is on the side of doing this. There are 60, there’s about 100 companies that we know that are very large, and thousands of smaller ones that are running this way, and every single one of them are at the top of their industry. You want to grow faster? Have higher profits? Higher productivity? Incredibly low staff turnover? Do this. It will work better for you.
Chantal: Chuck, thank you so much for joining us today on the Fitness Business podcast.
Chuck: Thanks. It’s been great to be with you Chantal.
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