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The new model for business success: replace top-down Alpha management with collaboration, connection, and increased job satisfaction--the Beta model
The Fall of the Alphas explores the sweeping changes taking place in the corporate and social cultures of today's most successful organizations. Utilizing years of advising companies of all sizes, hypergrowth startups to Fortune 500 company management teams, Dana Ardi identifies a pivotal evolutionary moment: the decline of the ...
The new model for business success: replace top-down Alpha management with collaboration, connection, and increased job satisfaction--the Beta model
The Fall of the Alphas explores the sweeping changes taking place in the corporate and social cultures of today's most successful organizations. Utilizing years of advising companies of all sizes, hypergrowth startups to Fortune 500 company management teams, Dana Ardi identifies a pivotal evolutionary moment: the decline of the traditional Alpha-model (the top-down, male-dominated, authoritarian, corner-office hierarchy that has ruled organizational landscapes for so long), as it is replaced by collaboration, connectivity, and the sharing of power. As Ardi persuasively demonstrates, in the new Beta organization, it is the team players, the sage advisors, the network experts, the trusted assistants, and the communications facilitators who are coming to the fore, as savvy managers learn to lead through influence and collaboration rather than authority and competition. From technology behemoths to small and medium-sized businesses, Beta has become the new paradigm for success in today's challenging market.
With insight and practical guidance, Dana Ardi shows how any business organization or team can re-organize from Alpha to Beta--and be more effective, flexible, and profitable
"Dana Ardi explores a new world of collaborative organizations which are poised to blow past the old command and control model." —David Karp, Chief Executive Officer of Tumblr
"Dana Ardi gives a voice, and a name to the behavioral shift underway in society and business today. As I read this book, I found myself thinking intensely about her new model for leadership, and what it means for our clients and our company." —Frederick Crawford, Chief Executive Officer of AlixPartners
“The Fall of the Alphas offers a brilliant analysis for manageable transformation. Dana Ardi’s insights will show you how to bring your company into the more sustainable model of collaborative structure.” —Jonathan Miller, partner, Advancit Capital, former chief digital officer for News Corporation, and former CEO of AOL Inc.
I wear power ties, I tell power lies, I take power naps, I run victory laps. I’m a totally ongoing bigfoot slam dunk rainmaker with a proactive outreach. A raging workaholic; a working rageaholic. Out of rehab, and in denial. I’ve got a personal trainer, a personal shopper, a personal assistant, and a personal agenda. You can’t shut me up, you can’t dumb me down. ’Cause I’m tireless, and I’m wireless, I’m an alpha male on beta blockers.
—GEORGE CARLIN, Life Is Worth Losing
For thousands of years, groups of people have looked to a single strongman for leadership. Families had patriarchs. Tribes had chieftains. Villages had lords. Nations had kings, prime ministers, presidents. Over time, this ancient model defined by one powerful figure dominating the rest of the group has been applied to practically every sphere where groups of individuals work together. Cities have mayors. Armies have generals. Teams have quarterbacks. Nuclear families have fathers. And corporations have CEOs. In the 1940s, we came up with a catchall description for this ubiquitous archetype. We dubbed these strongmen Alpha males, a term we borrowed from studies of the animal world.
For all of prehistory, human societies were egalitarian, collaborative communities of hunters and gatherers. The typically male role of hunter wasn’t valued any more or any less than the typically female role of gatherer. Both provided sustenance for the tribe. In fact, considering that females were the source of life itself, societies revered matriarchs as much as they did patriarchs. It wasn’t until the development of agriculture and the necessity of being able to plow for crops that physically stronger males began to dominate. The adoption of agriculture also meant that tribes became rooted, rather than nomadic. In turn, fixed locations led to greater population density and heightened competition—competition, I might add, that led to hierarchical rather than collaborative group dynamics.
When society morphed from the Agricultural Age to the Industrial Age, the leadership paradigm failed to evolve along with it. In fact, during the Industrial Age, the Alpha model became even more ingrained. Although working on an assembly line did not require physical strength, labor became firmly divided along gender lines. Men worked outside the home; women worked inside the home. If circumstances obliged females to seek outside employment, they did so in roles that mirrored their by-now-customary roles: cook, maid, laundress, seamstress. For most of the Industrial Age, in fact, the only professions that welcomed females were those requiring the role of nurturer: teacher and nurse.
In the 1980s, when women began to collapse gender barriers and occasionally assume an exalted profesional status, they were dubbed Alpha females. This very minor tweaking of the name made sense, considering that the behaviors and attitudes of many Alpha women were indistinguishable from men heading up similar groups. Many of these women had decided that the only way they could succeed professionally was by becoming exactly like men. They surrendered most vestiges of their femininity. They desexualized themselves. The wore tailored shirts and even female neckties that both mimicked and parodied a traditional male wardrobe. Books from that 1980s era had titles like Games Mother Never Taught You: Corporate Gamesmanship for Women, which counseled women entering the workplace to avoid any and all so-called subservient positions. Among other things, women were advised never to take notes, as their colleagues might then perceive them as secretarial. (Today, I’m constantly reminding young women of the power inherent in minutes-taking. The way I see it, aggregating the sum of organizational data is about as far as you can get from subservience!)
Again, women who rose to top positions in the 1980s and 1990s felt almost as though they had to out-Alpha the Alpha male. They not only had to be aggressive and tough but they also had to be twice as aggressive and tough as all the men out there. Think of empire-builders Martha Stewart or Linda Wachner, the CEO of apparel giant Warnaco. Wachner rose from working as a department store buyer to leading a leveraged buyout of the global company she would eventually lead. She soon quadrupled the size of Warnaco’s business, which owned numerous high-end brands including Calvin Klein jeans, Ralph Lauren Chaps, Speedo swimwear, and Olga bras.
Like numerous Alpha men before her, Wachner was ultimately brought down by her own hard-charging management style. She was, the word went, too abrasive, too critical, too autocratic. She drove away key management talent. She didn’t heed the advice and counsel of subordinates. Most unforgivable to stakeholders, under her governance Warnaco began hemorraghing money, and ultimately filed for bankruptcy protection in 2001. That same year, Warnaco fired Wachner without severance pay.
Author Sarah Dunant was once quoted as saying, “[The] Alpha female, like [the] alpha male, depends on such a state of innate superiority that she’s probably not aware of her status. While she would be effortlessly talented and capable, she would need a reduced capacity for empathy, because otherwise it would derail her.… I envisage the mind of Mary Warnock, the body of Kate Moss and the humanity of Leni Riefenstahl.”1
“[The] Alpha female is pretty exceptional,” agrees UK Guardian columnist Polly Toynbee. “There are not a lot of people trying to be like her, whereas there are a lot of men behaving in the same way, clambering over each other to reach the top of the tree. Those women who do get to the top are mavericks, hybrids and deny that they are like other women. Women do not like the Alpha female very much, nor do they want to be like her. Women want to be liked, which holds them back,” Toynbee concludes, adding that English Prime Minister Margaret Thatcher was the only female leader in history whose cabinet lacked even a single female.2
Whether male or female, an Alpha is an Alpha, right?
So why did the Alpha model of business leadership and its hierarchical organizational structure last as long and spread as wide as it did? Because it worked, that’s why. The risk-taking, competitive, self-assured boss was lauded for his or her decisiveness, certainty, and willingness to go it alone. Was he or she disagreeable? Occasionally. Callous and insensitive? Sometimes. Close-minded and obstinate? Often. But those negative traits were condoned, accepted, and even admired as part of what it took to reach the top dog slot and lead the group to success. Moreover, an Alpha leadership style worked best with a carefully structured pyramid of support beneath it. There needed to be a clear hierarchy, or chain of command, usually divided up into functional branches, in which people knew their roles, carried out orders from above, and in turn gave orders to those below them. For the next generation of leaders, there was only one clearly marked path of ascension or leadership to follow, and only one sharply defined set of skills for them to possess: the path that led to the CEO job, as well as to the huge, glassed-in corner office.
No doubt about it: this historical, hierarchical Alpha paradigm had a heralded, unprecedented run. For thousands of years, it was the model for nearly every group of human beings, from the Roman Empire to 1950s America, from Patton’s Third Army to Jack Welch’s General Electric to Tom Brady’s New England Patriots. It was the traditional way to lead a company, structure an organization, and run a family. But everything comes to an end.
* * *
The generations that came of age in the 1970s and 1980s saw themselves as rebels. They were ahistorical and antiestablishment. The civil rights, women’s rights, and gay rights movements all had their origins in the youth-based counterculture that flowered during those two decades. The irony was that gender roles and the Alpha paradigm were as firmly entrenched in these “revolutionaries” as they were for previous generations. What was revolutionary, however, was how this generation grew up to raise their own children. Those young people, who have grown up to become today’s knowledge workers, weren’t necessarily forced into strict gender roles, and growing up, they also learned that every member of the team had a valuable role to play. In short, most were taught to be true to themselves and to work well with others.
Eventually, when they graduated from college, these young people found themselves entering a new kind of economy: the Information Age. In the Industrial Age, work was algorithmic and incremental. Experience mattered more than anything else. This made it a natural fit for the hierarchical Alpha structure and leadership paradigm. By contrast, work in the Information Age is heuristic—it stimulates inquiry, oftentimes by trial and error—and fluid. Creativity matters more than experience, since, let’s face it, today memory can be digitized. The sheer ubiquity of information and instantaneous communication has given a generation that feels entitled to speaking its mind the ability and the means to call out opinions twenty-four hours a day, seven days a week. Information technology has also led to the globalization of economies and cultures. Today’s businesses no longer exist in a closed system. No one leader can have all the answers, nor can any stand-alone leader ignore the power of today’s new 24/7 information flow. This combination of information and communications technology has brought down more despots than all the smart bombs built over the course of the Industrial Age. Hierarchical organizations, in which decision-making is centralized in one person, or within a small, elite group of people, are becoming as obsolete in today’s world as political autocracies.
Which is another way of saying that the future belongs to the Betas, not the Alphas, and to organizations and leaders who communicate, collaborate, and curate.
Information is now so valuable and so widespread that trying to keep it under control isn’t only counterproductive, it’s also bound to fail. Today’s organizations and leaders must have as open a dialogue as possible, not just internally, with employees, but also externally, to the public, and in some cases, the world.
As everyone knows, information technology has made the world vastly more complex than it used to be, and it continues to do so in leaps and bounds. It is impossible for one person, no matter how brilliant or dynamic he or she is, to master all the knowledge a company needs to compete. In the Information Age, success requires leaders who are willing and able to collaborate with employees, directors, customers, and competitors.
Which is where Beta comes in.
Beta leaders and employees are fully networked into their communities. They influence rather than intimidate. They play to their strengths and seek help from others to compensate for whatever skills they lack. Rather than aspiring to omnipotence and acting as though they’re the masters of all they survey, Beta leaders focus on what I call motivated skills, for example, the things they know they do exceptionally well. And instead of exploiting their peers’ weaknesses in order to attain and hold on to power, they encourage their fellow executives to play to their own strengths so that the entire team and organization can succeed.
For a leader, this requires the ability to curate—to listen and to guide—rather than command. The ideas, products, and efforts of all the organization’s constituents must be woven together into a cohesive narrative. And those individuals who work in Beta organizations must be encouraged to pursue their own areas of interest and expertise, rather than forcing themselves to follow a culturally preapproved development path.
Which is where the Beta leader steps in. He or she understands that every individual in the organization is a contributor; the closer everyone in the organization comes to achieving his or her singular potential, the more successful the business will be. Beta leaders encourage their employees to acquire new skills, but rather than responding to a company mandate, employees themselves set out to expand their skill sets. In the Beta organization, individual development is all about self-actualization, as opposed to self-promotion.
Now, self-actualization doesn’t mean slinging a backpack over your shoulder and spending six months beachcombing the sands of Costa Rica. It’s more accurately defined as self-awareness. Beta companies generally encourage employees to bring to their roles an intellectual and emotional understanding of their strengths and their weaknesses, their goals and their motivations. And among the qualities that make up successful Beta leaders is a willingness to help employees reach a high level of awareness via self-directed learning—which is one reason why the 360 reviews (performance-appraisal data collected from all around an employee) and feedback sessions in many corporate offices seldom have any teeth. (I’m a long-standing believer in self-directed learning, with an encouraging assist from the top.) Leaders need to give their people the proper tools, techniques, and feedback. At the same time, organizations cannot be wholeheartedly responsible for their employees’ development; employees have to play their parts, too.
For example, if an executive says to an employee, You are unbelievably good at doing X, but less adept at doing Y, and I’d like to help you develop your skills at Y with the following techniques and protocols, well, to me that’s a conversation that’s actually liable to bear fruit. Another executive might tell an employee, You’re a really incredible VP of Marketing, but you lack equally great financial modeling skills. To that end, we recommend that you consider pursuing an executive MBA. Oh, and one more thing? We’re not going to push you toward doing that, but we will support you every step of the way, and make a long-term commitment not just to your continuing education, but to your role in this company as well. Which is why among the characteristics that define Beta leaders and organizations is the ability to imbue employees with processes designed to make them better than they are, and that help them play to their strengths and shore up their weaknesses.
Whether they’re executives or directors, today’s most successful Beta leaders apply the same principles to their organizations’ development as they do to their own, and their employees’, development. Just as Alphas build hierarchical organizations, Beta leaders create horizontal organizations that mirror their own approach to collaboration and teamwork. Beta companies are communities, not armies. They are made up of shifting, project- or process-based teams instead of rigid functional silos. On one project someone might take on a leadership role, while on the next that person will be just another team member. Instead of following individualistic, ego-driven tactics designed to meet quarterly numbers and boost short-term revenue (and compensation), Beta executives and directors pursue strategies that benefit the entire community through growth and long-term profitability. The successful corporate leadership of today evolves the company toward its own kind of self-actualization; of becoming the best at what it does best.
Example: What does a company like Apple do best? The short answer would be “Whatever it wants,” but in 2001, when Apple decided to expand its brand into retail, few industry observers predicted the experiment would work. Today, there are 326 Apple stores across the United States, Europe, and Asia, which in 2010 accounted for roughly $3 billion in sales.3 As The Wall Street Journal points out, “More people now visit Apple’s 326 stores in a single quarter than the 60 million who visited Walt Disney’s four biggest theme parks last year.”4 As the world’s most valuable company, one many experts believe may someday become the world’s first $1 trillion business, Apple holds an enormous share of the fast-growing smartphone market (especially across emerging markets) and a near-monopoly on music downloads. The company produces the default MP3 music player for all ages in the iPod, and has a 54 percent market share in the tablet market. Sure, the company sells desktop and laptop computers, but what Apple is really selling is style, simplicity, beauty, high-tech design, and treasurelike packaging, while inspiring in its customers a reverence more typically associated with religion. (When I recently visited the standing-room-only flagship Apple store in Midtown Manhattan, it looked and felt like an international day care, while only half a block away, FAO Schwarz, the world-famous toy store, was nearly empty.)
Facebook is another enormously successful company that is sticking to what it does best: being the world’s best, most influential targeted advertising platform. The numbers speak for themselves. More than one in thirteen people on earth today have a Facebook account. Facebook users spend over 700 billion minutes every month on the site. Every twenty-four hours those users install 20 million apps, and every month some 250 million people engage with the site from outside Facebook’s official Web site, meaning, via mobile phones and tablets. Half of all individuals under the age of thirty-five rely on Facebook as their exclusive source of news gathering. And as any casual user probably already suspects, Facebook has become the largest photo-sharing album on earth. But in the face of its IPO, has Facebook announced plans to expand its services into providing content, or creating its own proprietary games? No. At least for now, Facebook will continue playing to its unparalleled strengths by bringing people together and further buttressing its position as the most powerful advertising platform in the world.
Finally, Amazon.com may have evolved into a digital version of a Greek agora by discounting everything from kids’ toys to rug shampoo to beauty products to lawn mowers to digital cameras, but most consumers still associate the online retailer with books and reading. Strangely enough, founder, president, and CEO Jeff Bezos was a computer science major in college with little interest in books and authors. But in 1994, during the first iteration of dot-com mania, Bezos studied the top-20 mail order businesses and wondered, Which of these industries could the Internet handle more efficiently, profitably, and on a much larger scale? Bezos chose books. The rest is history, as Amazon began sharply underselling the prices set by publishers and bricks-and-mortar bookshops. In 2007, reversing the marketing strategy known as the “razor and blades business model,” whereby a company sells an inexpensive platform, then charges customers high maintenance fees (think of the prices of shaving razors, or how much it costs to replace the ink in your printer), Amazon began manufacturing the world’s first-ever e-book reader, the Kindle, and began selling electronic versions of books and magazines at a loss to ensure it became the dominant player in the e-book category.
Bezos and his team recognized a few things that traditional publishers were slow to acknowledge. The first was that in an impatient, impulsive Information Age, customers expected instant gratification. (Amazon whizzes e-books to an e-reader in seconds.) Second, Amazon realized that books were beyond the price range of many consumers. Yet in discounted, electronic, ten-dollar versions, readers could be tempted to take risks on new authors and unknown titles when they weren’t willing to take on writers or books that were retailing for three times that amount. Finally, synchronous with a wobbling global economy and a growing focus on environmental issues, many consumers were doing away with extraneous clutter—and that included old books. Today, five or so years after Amazon’s entry into digital publishing, the company’s e-book sales make up roughly two-thirds of the total e-book sales in the United States. Not least, Amazon had created a new distribution model for writers who are today able to bypass traditional routes—the literary agent and the publisher—and publish their books via “backdoor” methods.
Amazon hasn’t stopped there. In 2011, the company launched its own publishing platform, setting the company up to compete directly with traditional New York publishers. Led by a former publishing executive, Amazon has already signed up several high-profile writers, helping them develop content while offering the company’s own in-house marketing and delivery system. It also rolled out “Amazon Singles”—original articles that range in length from five thousand to thirty thousand words that the company sells for anywhere from $0.99 to $2.99, and that can earn Singles authors including Stephen King, Lee Child, Amy Tan, and Ann Patchett a roughly 70 percent royalty rate. The Singles program has been so successful that Amazon can almost be credited with inventing a new genre that straddles a universe in between a very short book and a stretched-out piece of journalism.
Assertive Alpha-style leadership isn’t extinct. There’s a bit of the autocrat and control freak inside every successful entrepreneur. Ego and assertiveness are no doubt necessary for someone to be able to buck the odds and successfully bring his or her idée fixe to fruition. And in times of crisis, existing companies typically find there’s no replacement for the speed and clarity that come from having a single decision-maker at the helm.
The terrorist attacks of 9/11 caused most businesses to recalibrate their priorities, and find ways to slice money from their operating budgets. I was working in private equity at the time. In the days after 9/11, I remember that our entire team took a serious, big-picture view of all our businesses. We asked ourselves the tough questions: How can we preserve jobs, conserve our energies and resources, and evolve in the weeks, months, and years ahead? In the end, rather than telling our top people in every company division to chop 20 percent of their operating budgets, which is how many Alpha companies responded in the months after 9/11, our approach was inclusive. There were no top-down mandates or across-the-board eliminations. Instead, we formed a committee to figure out the best possible solutions, and asked everyone in the organization for his or her input. During the 2008 economic downturn, one Beta company I know of encouraged all hands to step up and take responsibility and ownership of the company—and ended up eliminating not jobs, and not employees, but of all things, snacks. You read that right. The team asked itself: Would you rather have peanuts 24/7 or jobs? In the end, the company did away with the cookies, popcorn, and tubs of Cup-a-Soup that had previously been available at all hours to all employees. Instead of firing people, or decimating division budgets, the powers-that-be replaced the commissary with vending machines. Company employees were so relieved to hold on to their jobs that I doubt they missed the free 24/7 peanuts and pretzels.
September 11, 2001, also gave Jimmy Dunne, the CEO of investment banking firm Sandler O’Neill & Partners, an opportunity to reset his company’s priorities. Sandler O’Neill’s offices were on the 104th floor of the World Trade Center, and when the planes crashed, of the eighty-three company employees at work that day, sixty-six died. According to Fortune magazine, Sandler ultimately lost 40 percent of its employees, including “a third of its partners, all its bond traders, its entire syndicate desk and almost all its equity desk.”5 The next day, CEO Dunne put on his sharpest Brooks Brothers suit and addressed his employees. He, the firm, and the nation were in the midst of an unimaginable national tragedy, he told them. He understood if any of his employees wanted to go home, change jobs, or even change careers. Ultimately, most of his people stayed put, relieved to be able to funnel their fear, anger, and grief into productivity. Six days later, when the financial markets reopened, Sandler O’Neill had reopened its doors in a small Midtown office. By the end of the year, the firm was once again profitable.
On 9/11, countless Beta leaders came forward to take control of the crisis. JetBlue, the discount airline, was founded in 2000 by Brazilian-born entrepreneur, David Neeleman. Neeleman’s mission was to restore not only quality but also humanity to an industry where cramped seating and high prices were the norm, and where customers typically came last. JetBlue’s culture put a premium on fun, passion, integrity, informality, and outstanding service. Passengers making phone reservations were more likely to find themselves talking to a stay-at-home mom in Salt Lake City than to be put on hold by a tightly scripted sales associate. From the beginning, Neeleman also made it clear that every JetBlue employee was a “crew member,” from the pilots to the vice-presidents to the men and women who tossed your suitcase onto the luggage carousel. No matter who you were, JetBlue expected you to roll up your sleeves, grab a vaccuum cleaner and a trash can, and help clean the airplane in preparation for the next flight out.
JetBlue was one of our portfolio companies back in the days when I was working in private equity. Then 9/11 happened. That day, all flights were grounded. I lost count of the number of people who told me they would never board an airplane again. Many experts went on record as saying that the airline industry would never recover.
In the wake of 9/11, one of the very first calls we received was from JetBlue. Could I help the airliner find a new, permanent Head of Security? The next morning, Neeleman appeared on NBC’s Today Show to reasssure the American public that his airline had just bought a new fleet of planes equipped with armored cockpit doors with titanium locks. JetBlue had also installed cabin camera surveillance systems that permitted the pilot and the cabin crew to see what was happening on the plane at all times.
In Neeleman’s Today Show appearance was a near-perfect example of a leader of a Beta company taking charge during a time of national upheaval. (Calling someone a “Beta” in no way suggests that he or she is not a leader—in fact, as we’ll see, nothing could be further from the truth.) Over the next few weeks, as the airline industry continued its financial slide, JetBlue’s pilots union voluntarily offered to take a pay cut as a demonstration both of company loyalty and admiration for how Neeleman was steering them through catastrophe. JetBlue recovered and, then as now, has extraordinarily high popularity and customer satisfaction ratings.
Only six years later, Neeleman stepped up again, this time during a PR disaster of JetBlue’s own creation. It was Valentine’s Day, 2007. An ice storm had caused numerous tarmac delays at New Yorks JFK Airport. Most airlines canceled all incoming and outgoing flights and told passengers to go home and reschedule their travel plans. JetBlue opted to stick things out. Big mistake. Thanks in part to a breakdown in the airline’s communications system, hundreds of passengers found themselves stranded on JetBlue’s planes for six hours or more. Over a seventy-two-hour period, nearly a thousand JetBlue flights were canceled. Tempers raged to the point where police had to be called in. At which point, CEO Neeleman came forward to acknowledge, and apologize for, his company’s miscalculations. A week later, JetBlue went so far as to roll out a customer bill of rights that guaranteed its passengers free or reduced-fare flights and cash incentives if they ever found themselves stranded on a tarmac again. The offer was retroactive to Valentine’s Day. It’s worth noting that later that same year, airline passengers again ranked JetBlue number one in customer satisfaction in areas ranging from on-time performance to in-flight service. Today, Neeleman is no longer the company CEO, but JetBlue is still profitable, and despite pressures from outside organizers, crew members have opted not to unionize.
It doesn’t take a national catastrophe, or freak weather conditions, to impel a leader to step up to the plate. Leadership also involves shepherding a business forward while taking note of challenges and trends that might endanger the future and profitability of that business. Consider the decision that Richard Harrington, then-CEO of the Thomson Corporation, one of the world’s largest publishers, made in the late 1990s to divest the company of its core newspaper publishing business.
What led to Harrington’s decision? While chatting with a car dealer during a ski vacation, the CEO gleaned that consumers were now coming into this man’s car dealerships armed with pricing information they had gleaned from the Internet. An interesting insight? Sure. One that most people would have tucked away and forgotten about. But Harrington had the beginning of an epiphany. If consumers were scouring the Web before they bought cars, didn’t that suggest that newspaper advertising—the basis of newsprint revenue—would soon be migrating online, too?
The CEO had a hard decision to make. The Thomson Corporation—today known as Thomson Reuters—was built on the back of newspaper publishing, and owned 250 newspapers across the globe. At the time the company was also immensely profitable. But Harrington heeded what his gut was telling him. He drilled down deep on industry knowledge and growth forecasts, as well as on subscriber and consumer data. What he found confirmed what he already knew, and in the months ahead, Harrington made the bold move to sell off Thomson’s entire newspaper business. The decision paid off spectacularly. Today, according to several estimates, newspaper revenue from classified advertising, including automotive and real estate, is roughly one-tenth of what it was in 2000.
The long-term success of both new and existing companies requires abandoning the old Alpha leadership and structural model and adopting the Beta paradigm.
Building a Beta organization, and becoming a Beta leader, requires changing ingrained attitudes and behaviors that have been associated with business leadership almost forever.
I’m not saying it’s easy—only that it’s essential! The process starts by changing your focus from one pyramid to another. Beta leaders work at reaching the top of Maslow’s Hierarchy of Needs pyramid, rather than the top of an organization’s Hierarchy of Titles pyramid. For Beta leaders, self-actualization, which comes from self-awareness, combined with a deep-seated understanding of your strengths and your weaknesses, matters far more than self-promotion. Moreover, the employees in a Beta organization must be encouraged to make the same shift.
Practically and symbolically, elitism must be eliminated as much as possible for an organization to succeed and thrive. Status perks like executive parking spots and executive dining rooms should be replaced by Employee of the Month parking spots and corporate cafeterias. Instead of focusing on people who have the best metrics, companies need to recognize the facilitators within the organization, while “craftspeople” need to be as valued and rewarded as managers.
Finally, Beta leaders need to practice ego management. They need to be aware of their own biases, and focus as much on the present as on the future. Beta leaders need to manage the egos of employees by rewarding collaborative behavior and teamwork. Beta leaders must become what Michael Maccoby coined Productive Narcissists,* tempering high self-esteem and confidence with empathy and compassion. Mindfulness, of self and others, by executives and employees, may very well be the single most important characteristic of a successful company.
Many high-profile organizations make it a point to cherry-pick potential candidates from a small number of top-ranked colleges and universities. These candidates tend to be highly motivated, driven people. All their lives they have strived—or been pushed by their parents—to excel and to win. They have followed a seemingly predestined road map laying out what they or their families believe they should do to get ahead in the world. Seldom have most of them bothered to pursue an interest beyond those that will help them rise to the top. Are they highly individualistic? Quirky? Transgressive? Have they ever tried something, failed at it, and instead of beating themselves up, said to themselves, “Huh. That was no good. What can I learn from having messed up?” In most cases, I doubt it.
This is among the many downsides of considering only candidates from “branded” colleges and universities. Thanks to stepped-up competition for an increasingly limited number of slots, these institutions have lost whatever alchemical ability they once had to transform a student’s promise or potential into something greater. Nowadays, top-ranked colleges are obliged to accept entire incoming classes of uncommonly ambitious, accomplished students and then, four years later, graduate even more exaggerated, entitled versions of those same students. So where does that leave most of us?
Hallmark, the giant card company, was one of the very first companies to leverage the idea that quirky, angular employees matter, and should be welcomed, courted, and celebrated—that they actually made the company what it was. Hallmark has also long believed that innovation, creativity, and creative renewal are team sports. In the mid-1990s, the card company attracted a great deal of media attention thanks to the mini-sabbaticals, or “rotations,” that it offered its seven hundred employees, who produce roughly twenty-one thousand designs yearly.6 How did Hallmark keep its employees motivated and on-task? By creating a large, off-campus “innovation facility” that offers classes and workshops in everything from engraving to leather tooling, and by transforming a nearby farmhouse into an artists’ studio. Hallmark employees could also immerse themselves in half-year-long rotations where they could explore a contemporary social trend, for example, religion or ethnicity. The company’s only mandate was that employees had to share what they learned with their colleagues. These “mini-sabbaticals” weren’t just intriguing company perks. They were key in helping Hallmark employees broaden the scope and intimacy of their card lines and rededicate themselves to the company’s mission and bottom line.
These days, numerous businesses, including Pixar, carry out contemporary variations of Hallmark’s “farm” concept. As the company behind animated movie hits like Toy Story, Finding Nemo, Ratatouille, and Wall-E, Pixar has long been an organization that celebrates angular thinkers, even misfits. It’s also a company whose culture is practically underwritten by innovative teamwork and collaboration. At Pixar’s northern California offices, skilled employees across all divisions work in teams, with veterans working alongside new hires. Instead of titles, rankings, and caste systems based on status, pay, title, and importance, Pixar workers are defined by the skills they bring to the organization, whether they’re artists, programmers, screenwriters, or senior executives. In short, Pixar is all about teamwork, and the courting and sparking of countless free-form ideas. Company president Edwin Catmull once said famously, “A mediocre team will screw up a good idea. But if you give a mediocre idea to a great team and let them work together, they’ll find a way to succeed.”7 The company even operates its own in-house Pixar University, made up of over a hundred different classes ranging from theatrical improv to sculpture to line drawing to creative writing.
Google is another company whose leaders go out of their way to encourage employee innovation. Like Pixar, Google encourages its engineers to spend 20 percent of their time focusing on their own ideas and innovations. As The Washington Post points out, “Many of the personal projects yield public offerings, such as the social networking Web site, Orkut, and Google News.”8 Richard Holden, a Google product management director, says, “If you’re not failing enough, you’re not trying hard enough.… The stigma [for failure] is less [at Google] because we staff projects leanly and encourage them to just move, move, move. If it doesn’t work, move on.”9 How then does Google make hiring decisions? Think college admissions, real-world division. Is the person a good fit, that is, is the applicant untraditional, a little wild, a little indescribable, in short “Googley”? Says Laszlo Bock, Google’s vice-president of People Operations, “We skew toward people who like to solve problems—the bigger the problem, the better, rather than those who settle in and say, ‘Okay, I’ll do that for 30 years.’”10
SAS, the North Carolina–based, privately held software giant, also believes in making its employees happy. The company must be doing something right. SAS has a 98 percent customer renewal rate, and a roughly 3 percent turnover rate among its ten thousand-plus employees, who enjoy thirty-five-hour workweeks, unlimited sick leave, no-cost on-site health care, a gymnasium, discounted country club memberships and, on Wednesday, as many free M&M’s as they can eat. Says CEO Jim Goodnight, “M&M’s have become something of an icon representing SAS’s corporate culture, but that was just a fun tradition we hung onto over the years.… It represents a mindset we have. From the earliest days of the company, we wanted to create an environment similar to the university, where you have the freedom and flexibility to be creative.”11 Asked why more companies fail to make the connection between employee satisfaction and higher productivity and profits, Goodnight said, “They only see employee benefits as costs that show up on the balance sheet.… Because we put employee-oriented measures in place long ago, we have the benefit of years of experience to show that the long-term benefits far outweigh the short-term costs. Most companies don’t know how to represent that kind of return in their annual reports.”12
Which goes to a point that author Alison Hemming made in a blog post following the publication of Greg Smith’s widely circulated 2012 New York Times op-ed disparaging the corporate culture of his employer, Goldman Sachs. Today, Hemming notes, the best talent have no interest in spending their lives in a single cubicle. Instead, these men and women are actively managing their own careers. Today’s workers invariably have a professional Plan B, thanks to the personal and professional network they’ve created via LinkedIn, Facebook, and other sites. “Talent wants partnership, not ownership,” Hemming writes. “And an esprit de corps that they can believe in. Give it to them, and they’ll reward you with their ideas, great work, and a lifetime relationship. Doing nothing will lead to a brain drain of epic proportions that will make you feel like Kodak or Yahoo on a good day.”13
Or why not try integrating storytelling into your workplace culture? Russell Goldsmith, the chairman and chief executive of City National Bank in Los Angeles, says that stories are “a really important part of how we teach and reinforce the culture, and how we reward behavior.”14 City National Bank goes so far as to bring in consultants who teach employees how to organize stories in a way that highlights what is best about the company culture. In a nod to American Idol, Goldsmith says, “We do something called ‘Story Idol,’ and every quarter there’s a competition among our seventy-nine offices. It’s a way to give colleagues a pat on the back and a moment in the sun for doing the right thing, and it democratizes and decentralizes positive reinforcement. We then have a Story Idol competition for the year in a big meeting with the top 300 people in the company. People tell stories about what they did that promoted teamwork or helped a client by going the extra mile. It’s like telling stories around a campfire, but they’re doing it around conference tables.”15 City National Bank employees submit anywhere from fifty to one hundred stories per quarter, which show up on the company’s intranet—and then every employee votes for the winners. The people who submit the winning stories receive iPads. The employees singled out for helping clients get large cash awards. Adds Goldsmith, “But what matters most is the recognition, and the respect from your peers as you stand on the stage in front of 300 people.”16
Even a national supermarket chain can create an in-house enthusiasm that ensures both employee loyalty and strong financial returns (and in an industry with fairly slender profit margins, too). Frequently cited by Fortune magazine as among the best companies to work for in America, Wegmans is a privately held supermarket chain with seventy or so stores in the Northeast. The company’s hourly wages and salaries exceed the industry standard, and Wegmans has spent tens of millions of dollars over the past two decades providing college scholarships to both full- and part-time employees. Operating on the belief that no customer should leave a Wegmans supermarket unhappy, employees are tasked to do everything short of massage therapy to ensure this happens. Wegmans is also more or less flat in its structure. Fortune notes that when one Wegmans supervisor asked an employee to analyze a rival’s shopper-loyalty program, the employee ended up discussing her findings directly with company president Robert Wegman.17 Now, that’s what I call a Beta organization.
From where I sit, among the most interesting things about “new economy” companies—whether they are start-ups across the food industry, the health-care industry, or the information industry—is the increasing number that are being built on a venture capital model of shared equity, meaning that every employee earns a portion of the company’s overall revenues. Sure, employees in these new start-ups tend to work their tails off, but at the end of the day they also have an equity stake in the company’s financial future. (Many larger companies have tried to duplicate this model by rewarding individuals, or whole divisions, an approach that hasn’t worked nearly as effectively.) Today, I’m glad to report that in many start-ups I counsel, the venture capital model comes with the territory. Search firms, consulting firms, advertising agencies, and even law firms are all rewarding hard work and collaborative behavior.
Recently I sat down with a female executive at a global advertising agency. Her mission, she told me, was to bring together teams to collaborate on individual brands, and reward them for the quality of their work. By “rewarding” them, she wasn’t talking exclusively about money, either. Rewards can include everything from encouraging employees to work on their own pet projects to developing new products and services. Some companies even ask their employees: How can we help you develop and expand your career? And many, as we’ve seen, are creating in-house incubators for younger talent. This is a future trend worth watching and emulating. By now, you may have guessed that if you don’t reward your employees, chances are high they will jump to a company that actively supports their growth and future development.
Of course, the model of employees having a financial stake in a company would be incomplete without mentioning the wacky example of an artist present at the creation of an Internet phenomenon. In 2005, Sean Parker, then president of a fledgling online company known as Facebook, offered a young Korean American painter and graffiti artist named David Choe the sum of $60,000 in exchange for painting a few murals on the company’s northern California office walls. Or, Choe could opt instead for company stock. Choe chose the stock. Six years later, when Facebook announced plans for its IPO, overnight Choe was worth anywhere from between $200 million and $600 million. Oh, and his murals still decorate Facebook’s company walls today.
To my mind, the very best way to visualize the differences beteen the Alpha and Beta approaches is to contrast a general and his army to a conductor of a symphony orchestra.
The Alpha leader and organization is the general and his army. Underneath our hypothetical Alpha general are four colonels: one in command of infantry, one in command of artillery, one in command of cavalry, and one in command of overall logistics. Underneath each of those colonels are two majors, each in charge of one division of their colonel’s branches. Underneath each of the eight majors are two captains. Underneath each of the sixteen captains are two lieutenants. And underneath each of the thirty-two lieutenants are two sergeants. Finally, every single one of those sixty-four sergeants leads, oh, let’s say, approximately a dozen soldiers.
The general draws up his own plan of battle, perhaps soliciting advice from his four colonels, perhaps not. He issues his orders to those four, which they then pass down the chain of command. The majors no doubt have some sense of the big picture, and might be able to whisper an idea in their colonels’ ears, but otherwise, they have practically no role in the plan. Forget about the 640 soldiers. Their opinions don’t count. As far as their own advancement is concerned, the paths are stratified and strict. An officer moves one rank at a time, inside his own branch. A captain of artillery can only become a major of artillery. He’ll never be able to jump to the cavalry.
Now: Replace those four branches with management, marketing, finance, and sales, and the colonels with executive vice-presidents, and you’ve got a pretty good snapshot of the traditional Alpha business structure: a single decision-maker, function-based organizational silos, tunnel vision, and formally defined career paths.
By contrast, the Beta leader and organization more closely resemble a conductor of a symphony orchestra. The orchestra is also divided up, but into instrumental sections rather than functions. There are woodwinds, brass, percussion, and strings. Although each section has a leader, those leaders are not in command. They serve as mentors, and now and again they may step forward as soloists. And rather than the rest of the section falling into a stratified hierarchy, every player is a member of a team that works in synchrony.
Even though the conductor may direct the actions of the orchestra, they are not the sole planner. The composer writes the music. And a featured soloist may provide his or her own interpretation of the music. Meanwhile, instead of issuing commands, the conductor strives to get the various groups working together to produce a memorable performance. Her goal is to get the members of the orchestra to play to the best of their ability, while integrating those efforts into a unified group effort. There are times, let’s say, when playing Vivaldi, when the string section predominates. At other times, maybe while playing Purcell, the horns are front and center. The technical demands of musicianship are so great that it’s rare for a musician to make the leap from one instrumental section to another. But a conductor can come from any section of the orchestra, or none at all. What’s more, a skilled performer doesn’t feel any pressure to trade up and become an orchestra leader. Joshua Bell can focus on being one of the best violinists in the world without thinking or being told that to truly succeed in the classical music world, he needs to become the next Leopold Stokowski or Leonard Bernstein.
Next: Replace woodwinds, brass, percussion, and strings with engineering, design, marketing, and sales, and you have an intimate portrait of the modern Beta organization: planning and ideas originating from a number of sources, a collaborative effort facilitated by the leader, no single route to leadership, and no pressure to become anything other than the very best at what you do.
To my mind, the Beta model isn’t just a prescription for business success. It also offers an opportunity to be truer to our own human natures. The fact is, most of us aren’t Alphas; we’re Betas. In our hypothetical Alpha Army, there are 765 people, and of those, only a few aspire to becoming a general. Even in our hypothetical eighty-member-strong Beta Orchestra, probably only a couple of them harbor dreams of someday conducting the orchestra. We’d all be happier not being someone we’re not, even if society has told us since we were born that we’re meant to aspire to the gold medal, and the winner’s circle. Most of us want to accomplish things in our lives, but few of us are driven to dominate others. We know there are things we do exceptionally well, and things we do less well. There are times we want to take the lead, and other times when we’re happy contributing, assisting, listening, facilitating, and even cheering other people on from the sidelines. Most of us are satisfied with the opportunity to accomplish what we’re good at, and what we enjoy, so long as we receive adequate recognition and reward—which doesn’t necessarily mean we want to become the CEO or the leader. And if we do harbor corner-office ambitions, few of us are comfortable with ruling over others like an absolute monarch.
If I had one piece of advice for today’s knowledge workers, it is this: It’s okay to be yourself. It’s laudable, in fact, to be skilled at what you do best, whether it’s marketing, finance, telecommunications, human resources, publishing, or raising your children. Ambition and the human desire for status and money, are natural and normal. But ambition can be horizontal as well as vertical. Employees don’t always have to move up. Employees can also move across. Being Betas simply means that most of us do not necessarily set our sights on rulership, or on becoming the CEO. Beta means that we are, or should be, content where we are professionally, that our ambitions should lie in the realm of self-awareness and self-improvement, and that we shouldn’t feel we have missed the boat if we do not aspire to lead, dominate, or become the sole decision-maker. The Beta movement is about excellence, achievement, and success. It is about finding happiness and fulfillment in a career where you develop yourself, contribute to the community, and feel productive. What it is not about is becoming someone you are not, and feeling diminished as a result even though you are perfectly content with the intrinsic and extrinsic rewards of your job.
I once counseled the chief financial officer of a major division of a large film studio in Los Angeles. Let’s call him “Sam.” I’ll never forget the day I first caught sight of his office suite. He had not one, not two, but three receptionists, and a huge corner office that came with a decorating budget. A casual visitor would tell you that Sam—a young Alpha male with money, power, position, and status—had everything going for him. On the surface, he did, too. Yet Sam was unhappy and frustrated dealing with the studio hierarchy, and spent his days worrying he was going to make a mistake and take a fall. As we got deeper into our conversation, it became clear that in spite of the job perks, Sam was stuck. His job didn’t allow him to flex his entrepreneurial muscles, or satisfy his true passion, which was new technology. He felt isolated, alone, and vulnerable.
It so happened that I knew about a job opening in an emerging technology company that was growing and scaling. On a hunch, I told Sam that he should at least consider applying for it, and I ultimately made the match and placed him there. A few months later, Sam and I ran into each other by accident in an airport. Well, “ran into” doesn’t quite describe our encounter. Sam literally grabbed me by the shirt, and with an enormous smile on his face, told me that I had ruined his life. He had taken the job, and was now working for the emerging technology company. He no longer had three receptionists at his beck and call. He shared one assistant with three other suite-mates. He poured his own coffee. Gone was the dramatic office with its view of downtown Los Angeles and the Pacific. His new digs were cramped and windowless and since the company was still in its frugal, venture-backed early days, Sam was on an airplane in a coach seat most of the week. Instead of Armani suits, his new wardrobe was a dress shirt and jeans. Yes, he missed the perks of his old job—who wouldn’t?—and he had never been busier, but he loved his new job, and he loved his new life. We said good-bye. A few months later, Sam was named the company’s COO, and when the company went public two years later, his personal windfall came to around $70 million. Today, Sam is a venture capitalist and angel investor helping other entrepreneurs and young companies attain their dreams.
As one of the three founders of Twitter, Evan Williams is another businessman who stepped down from an Alpha position—the CEO of Twitter—to take a company role that better fit his strengths. As everyone knows, Twitter has rechoreographed the way users exchange real-time information, and along with Facebook, has played a profound role on the global political arena. But in 2010, Williams decided he would cede the Twitter CEO position to Twitter’s then-COO, Dick Costolo. Williams would retain his place on the board; after all, without him, there would be no Twitter. But rather than spending his days dealing with administrative tasks, he would devote the rest of his career at the company to product development.
What drove his decision? Self-awareness. Williams was famously skilled at figuring out the needs of new technology users, and he had helped scale Twitter from 5 million registered users to 71.3 million users.18 He was far less at home carrying out the micromanagerial and administrative duties that the CEO position demanded. It is a truism of the business world that the person who launches a business is often not the best candidate to scale that business at various critical junctures of its growth. Williams knew he’d made mistakes as a CEO, and that Costolo was as obvious a candidate as any to make the company even bigger and better than it was. Today, Twitter is thriving both domestically and overseas. As for Evan Williams, he spends his days focusing on new product development. He is a person who embodies the advice I give to people to play to their strengths or, as I like to put it, “Stick to your knitting, baby.”
Then there’s David Pottruck, the CEO of financial services colossus Charles Schwab, who was promoted to the top spot in 2003 after serving for five years as co-CEO alongside firm founder Charles Schwab. In the summer of 2004, the company was in a stubborn holding pattern. The stock price was flat. Employees were being laid off. When Pottruck showed up for work, Charles Schwab told him that the board had lost confidence in the direction the company was headed, and that he, Schwab, was retaking the CEO position, and Pottruck was out. Now, many CEOs in Pottruck’s position might have taken this public beheading as an opportunity to retire, and many have. Instead, Pottruck launched a new company called Red Eagle Ventures, while wrestling with the thought that he had to be—or rather, should be—a CEO in the financial services industry again. But as time went on, Pottruck recalled how many things about being CEO he had disliked, from the BlackBerry tethered to his wrist, to the tedious, time-consuming administrative tasks, to the long meetings, to how little time he was able to spend with his wife and children.
Recalling how much happier he was at Charles Scwab when the firm was smaller and more daring, and wondering whether he just might be happier not as a CEO but as a company chairman, Pottruck began to explore positions in newer, more nimble companies. In a speech he delivered to students at the University of Pennsylvania’s Wharton School of Business, Pottruck was candid: “It’s new to me to be an ex-CEO.… My leaving Schwab was on less than elegant terms. It was a pretty humbling experience for me. It wasn’t humbling because I was replaced.… What is really humbling is to have time to reflect on what you’ve done and what you could have done better.”19 The students gave him a standing ovation.
Pottruck began a gradual professional reinvention. He took a hard look at everything he had done right and wrong at Charles Schwab. He had been a micromanager who now and again created unnecessary bottlenecks at the top. He hadn’t done enough careful strategic planning. He had focused on far too many initiatives. He hadn’t taken the time or the trouble to develop his relationship with the board. Now it was time to learn from his mistakes and move forward. In 2005, Pottruck became the chairman of an airline start-up, Eos Industries, and today, alongside his duties at Red Eagle, he also serves as cochairman of Chicago-based wealth-management firm, HighTower Advisors. Sure, there are things he misses about the CEO role at Charles Schwab, but his new positions give him everything he wants.
The Beta model has also trickled down to our personal lives. The family model of Leave It to Beaver and Father Knows Best now seems almost Jurassic. Even the super-achieving, two-income Huxtables of The Cosby Show now seem obsolete. Today, we’re more like the couples in Modern Family. That popular TV show features an older man living with a much younger woman and her son; a stay-at-home mom and working dad with three children; and a gay couple rearing an adopted Asian child. Our neighborhoods are full of stay-at-home dads, blended families, single parents, gay and lesbian couples raising children, and every other imaginable variation. Decision-making is collaborative. At any point, parents swap “stay at home” and “go to work” roles, just as they could both enter or retire from the workforce. What matters isn’t that the heads of households follow a traditionally defined pattern, but that they do what works best for their families.
That said, the Alpha family model still haunts many late baby boomers today. Dad hunted; Mom gathered; Dad was the boss, the authority; Mom was the organizer, the detail person, the glue who kept daily life intact and running. But even men and women who were reared in so-called traditional households find that that Alpha paradigm no longer works. Or if it does, that the traditional titles mother and father bear little relationship to contemporary reality.
I know several couples where the wife works, and the husband stays home. This can happen for various reasons: the woman has a soaring career, say, while the man is in a creative industry. I know of one man who cannot match his wife’s earning potential, and thus the two of them have decided it makes greater economic sense for her to work, and for him to care for the children and manage the home. But even in families where both partners leave for work every morning, the Beta marriage of today is fluid, improvisational, and nonhierarchical. Depending on where you live, it is almost the norm.
Richard, a male advertising executive in his late-forties, always assumed that when he married and had children, he’d be the Alpha. His father, after all, was the stern, authoritative type, while his mother was a homemaker. When Richard and his wife, Ellen, had the first of their two children, his professional life didn’t change much, either. He still commuted to work every morning, came home at six, played with the kids, and worked late into the night on his laptop. Whereas Ellen, a psychotherapist, put aside her career to become a full-time mother. She took their three children to day care, to music lessons, to medical appointments, to playdates and sleepovers, while also doing most of the cooking, cleaning, and housework.
But as time went on, Richard and Ellen began to discover innate talents and abilities they didn’t know they had. Gender had next to nothing to do with it. There were things Richard did better than Ellen, and things she did better than he did. Unexpected things, too.
Take budgeting. Richard had always paid the bills. But with his workload stepping up, he surrendered that role to his far more efficient, practical wife. As a former college jock, Ellen got a kick out of taking her son to soccer practice in the afternoons. Richard had always loved to cook and work around the house. And in spite of his work schedule, he began preparing his children’s box lunches early in the morning while he fixed coffee for his wife.
In short, in that family, you couldn’t tell who was the Alpha and who was the Beta. Why? Because both Richard and Ellen were Betas as well as Alphas, dialing up and dialing down their strengths and skills as circumstances demanded. When Ellen eventually returned to work part-time, Richard reconfigured his own schedule so he could be at home the two mornings a week when she was heading to the office. He shuttled the kids to school, did the family acquisitioning, and in the afternoons, when Ellen and their son were at soccer practice, he escorted his two daughters to their dance class. Richard and Ellen’s marriage is a genuine partnership. And my guess is that with a rapidly increasing number of women in today’s workforce, traditional gender roles will continue to become more and more flexible, elastic, and—no surprises here—more satisfying to both parties.
I realize that promoting the Beta paradigm as a model for business success, personal fulfillment, and family happiness is something of a grand pronouncement. Yet I don’t make this pronouncement lightly. Beta isn’t the result of a midnight epiphany, or a last-second conversion. It’s the fruit of more than two decades of working in and for large organizations, and bringing to that work a somewhat singular perspective.
As I mentioned earlier, I think of my role as akin to a corporate anthropologist. Which means I spend my days studying the cultures of organizations, how they grow and develop, and how the people in them influence and shape their communities. In the very same way a traditional anthropologist might study a Central Asian agricultural community in its natural environment, I study contemporary business people in their natural environment: the workplace.
That might sound esoteric and academic, especially when coupled with my having a Ph.D. after my name. But I’ve actually spent most of my adult life in the corporate world, which, admittedly, wasn’t the original plan.
When I was young, I was profoundly affected by seeing William Gibson’s Miracle Worker on Broadway. It wasn’t the performance of Patty Duke, playing Helen Keller, that touched me the most; it was Anne Bancroft’s portrayal of Annie Sullivan. Sullivan was a woman who worked hard to address the needs of a severely handicapped child, while at the same time helping the family of that child reorganize itself around Helen’s capabilities. Sullivan was a coach, a mentor, an influencer, and a transformer. She was the figure who ignited my own earliest ambitions. She was also a great role model for a Beta leader: helping others become who they were meant to be.
After college I went to work as a community organizer during the early days of the community mental health movement. At the same time, I was doing academic research on the changing images of handicapped children in the media. After getting my doctorate, I took a position teaching Special Education in the Graduate School of Education at Fordham University. Even though I enjoyed teaching, I recognized that my greatest talent was for bringing about successful social and economic transformations in communities. Eventually, I decided to take that talent to the business world.
I left Fordham University to become president of the Infotainment Corporation, where I consulted for leading studios and publishers, as well as for technology, retail, and telecommunications companies. I then became senior vice-president of new media for RR Donnelley, & Sons Company. From there I moved to TMP Worldwide, where I served as co-chair of the company’s Global Communications Entertainment and Technology practice. I spent the next two years at Flatiron Partners, where I worked on human capital issues with early-stage companies. I then joined J.P. Morgan Partners, then CCMP Capital private equity partnerships, where I served as a venture catalyst, creating the structures of organizations, building high-caliber teams, and providing ongoing counsel.
In time, I decided I needed to create my own business devoted to helping people realize their potentials through work. Behind that shift was the influence and inspiration of another extraordinary woman.
My grandmother came to this country from Russia when she was sixteen. She arrived holding the hand of her five-year-old brother. The two of them were the only survivors of a family of thirteen siblings; the others were killed during an attack on their village. They were taken in by an American relative who, it turned out, saw in my teenaged grandmother a source of free labor.
Treated like a domestic rather than as a member of the family, my grandmother realized she’d have to take responsibility for herself and her younger brother. Among her daily chores was shopping. She convinced the owner of the local grocery store to hire her, and from that day forward, she and her brother worked in and lived above the store. Eventually, my grandmother and the shopkeeper’s son married, and they adopted her little brother (who later grew up to become a well-known New York physician).
Soon after their marriage, my grandmother and grandfather began helping immigrants adjust to their life in this country. My grandparents provided many new arrivals with a good meal, clothes, money, and the help they needed to tap into networks that could help them succeed. In her own way, my grandmother was as much a model of Beta leadership as Annie Sullivan: they both found fulfillment by helping others reach their potential. By the time she died, my grandmother had helped more than five hundred people from all over the world establish themselves in America. People traveled from across the country to attend her funeral, pay their respects, and tell their stories. Hearing those people testify at her funeral inspired me to build a career in which I could do the same.
Shortly after her death, I launched my own consulting company. I specialized in transforming businesses and human capital, coaching executives in building skills, attracting top-level talent, and designing their ideal organizational structures. In the corporate world, I wanted to accomplish something similar to what my grandmother had done in her own community: give people the tools to achieve their highest potential. I wanted to bring the kind of community organizing I’d done early on in my career to the faster-paced business world. And so my company, Corporate Anthropology, was born. I knew one thing for certain: that by studying in depth an organizational community and culture the way an anthropologist looks at a residential community, business leaders could create healthier, more productive environments.
Soon, though, my idealism came face-to-face with reality. When I began meeting clients, most had only one thing on their minds: leadership. Few executives seemed interested in the corporate community as a whole; or whether or not employees were happy, satisfied, or productive. No inside employee, nor any of the outside consultants brought into most organizations, paid much attention to the hundreds or even thousands of “non-leaders” who made those companies run. Instead, they focused solely on the “top dogs.”
The consequences were obvious—that is, if you were willing to look closely. I discovered there was rarely any sense of community in these organizations. Employees didn’t know what skills or talents their colleagues brought to their jobs, where their colleagues lived, or, for that matter, whether they had families or children. Almost all my conversations with employees focused on an impossible or intimidating boss, or a snarky, undermining coworker. No one talked about the organization as an organism, or said, “I love my job.” The typical workplace was largely if not entirely defined by power, control, status, authority, and money.
This was mirrored in the spooky homogeneity of many workplaces’ floor plans. An ornate corner office for the boss, smaller offices for the senior management team, and look-alike cubicles for the people who carried out the day-to-day work. A not-so-well-hidden message was conveyed: Employees are undeserving of any privacy, and almost nothing they say matters. Many times I’d walk through cubicle arrays alongside CEOs who had seldom navigated those areas before. “This is Mary,” they’d say, having quickly scanned the nameplate on the cubicle. “Mary does all our merchandising plans. Mary, tell Dr. D about your work.” Mary, who’d probably never come this close to the CEO before except in a bad dream, would fidget and squirm before launching into an anxious, improvised soliloquy.
During every one of these early coaching projects, I’d try to expand the conversation so I could figure out how the place as a whole operated. Business organizations can be compared to natural systems, like marshes or wetlands, in which everyone and everything connects. In a healthy organization, as in a productive natural system, every individual has a place and the entire organism works together in synchrony. In an unhealthy system, one species dominates, cutting off the growth and evolution of the others, creating a domino effect of imbalances. Invariably, whenever I asked executives and employees to sum up the culture of their organization, they would use one word over and over: great. But if everything was so great, I kept asking, why did you call me in here? Repeatedly I’d push to try to get the insights I needed. In return I’d be told, bluntly, “There’s no need to explore that. We just need to fill this position,” or words to that effect. The team, community, and shared goals of the company were irrelevant. The executives were interested in their organization’s egoSystem, not its ecoSystem.”
Whenever I coached private clients, I ran into equally disillusioning situations. One month really stood out and it stays with me to this day. I was called in to counsel an executive who had been acknowledged as the CEO-in-Waiting of an enormous high-tech company. The current CEO, who planned to retire in the near future, had recruited this executive and, with the board’s approval, given him responsibility for running day-to-day operations while the current CEO focused on external business development. Together, the two men formed an effective, efficient partnership. Ironically, because the partnership was so productive, the current CEO reconsidered his retirement and, with the board’s agreement, decided to stay on after all.
In our initial meeting, the CEO-in-Waiting expressed his anger, frustration, and feelings of betrayal. He told me he was afraid he’d now never reach the top spot in the company, and that his reputation would be damaged if he was no longer seen by others as next in line. As a result, he wanted to leave the company and restart his ascent to the top elsewhere.
A week later, another client came to me with the same problem, and the same frustrations. This time, it was a vice-president of marketing who felt stifled by the head of her division. She’d been given performance goals, but couldn’t get the appropriate resources or approval from her boss. Her two peers in sales and product development were under equal pressure. These three executives were working against each other to achieve individual goals, rather than in tandem to achieve mutual goals. And their division head was doing nothing whatsoever to ease the competition and ensure the levers of success.
The marketing vice-president felt handcuffed. She knew how to get the results, but no one was letting her. The only way she could get what she needed was by playing the kind of company politics she abhorred, and winning at the expense of her colleagues. When we spoke, she was debating whether to make an end run around the division head, or start looking for another job.
The weekend after my meeting with the marketing vice-president, I spent a couple of hours on the phone with the son of a good friend. I’d been asked to give some career guidance to this young man, who’d been working as an in-house designer for several years. A bright, creative, ambitious young man in his early thirties, he spent most of our conversation telling me about the shortcomings and failings of his supervisor, the art director. My friend’s son maintained he was more creative and prolific than his boss, and better at bringing clients’ ideas to life. Apparently, the only area where the art director topped him was in his take-home pay. My friend’s son loved what he was doing. He loved the company. In fact, he loved pretty much everything about his work, except for one thing: He wasn’t running the show.
That month’s worth of sessions served as an illustration and microcosm of what I’d observed in my years of executive coaching. Despite being at very different phases of their careers, working in different industries, for very different companies, and facing dissimilar situations, almost everyone I’d met with was frustrated by their inability to be the top person. It seemed to me that the root cause of their unhappiness wasn’t a mercurial or demanding CEO, a manipulative division head, or an overachieving art director. No, the source of everyone’s unhappiness was a corporate culture in which shared goals and collaborative teamwork had no place. There was no such thing as “community,” it seemed; offices were little more than spaces shared by a group of rabid competitors. Everyone I spoke with felt like a contestant on Survivor.
Just as I was beginning to wonder whether I could bring my anthropological approach to the corporate world and to individuals, I began working with information-economy start-ups created by groups of twenty-something men and women: GeoCities, which eventually turned into Yahoo; AOL, back in its early, pre–Time Warner days; The Street; Return Path; and many other venture-backed start-ups. It was the receptive audience I’d been waiting for.
These organizations were already on their way to becoming the kind of communities I’d spent years promoting. They were Beta companies. They were horizontal rather than hierarchical. Individuals didn’t feel compelled to climb a corporate ladder to feel successful or satisfied. Employees didn’t follow conventional patterns. They focused instead on collaboration and teamwork. Needless to say, this new landscape was exhilarating. These were kinetic, dressed-down environments where employees created their own miniature collectives. During morning meetings and at lunch, almost everyone working there had an idea or initiative he or she was willing to toss out. Roles, identities, and responsibilities mutated weekly, sometimes daily. Leadership was a loose and elastic term. There was talk of social, global, and environmental responsibility. These young knowledge workers seemed willing and eager to try out and develop new concepts rather than slavishly follow the rhythms or fiats of traditional roles and structures.
What made these knowledge industry start-ups even more intriguing was that every single one of these businesses was successful—and growing fast. In other words, these collaborative communities weren’t just good for their people, they were great for business, too. Here was a concept, even a movement, that I could sell to other clients: that leading in a wholly new way, and building a wholly new kind of company—a collaborative community of shared responsibility—could dramatically boost revenues.
I was thrilled to find companies that embodied the values that I’d been preaching. My discovery led me to hunt down more examples I could show to new clients, and I’ve been finding them ever since. Many were start-ups, but there were also existing businesses that had evolved from Alpha to Beta. And not all of them were in the high-tech world, either. Timberland, The Container Store, Green Mountain Coffee, Starbucks, and Whole Foods were among the best known organizations that had been practicing and moving to the Beta model for years.
In my practice as a corporate anthropologist, I now had positive examples I could point to if clients ever expressed reluctance or trepidation. I began focusing on what I could do to bring the collaborative horizontal ethos to business environments that were stuck in competitive hierarchical mind-sets. My goal wasn’t, and still isn’t, to transform established, successful, conservative companies. Rather, it’s to help organizations position themselves to succeed with today’s workers, and in today’s new business environment. I may refer to the meetings I use to brainstorm as Tribal Councils, but any resistance from the skeptical “chief” and the company’s “elders” goes out the window when they witness the sometimes astonishing results of our meetings. In short, Beta isn’t just good for the soul; it’s also good for the bottom line.
Over the past five years, I’ve continually analyzed and refined my anthropological approach. As time goes on, and I help more and more companies adapt a successful Beta approach, I’ve become even more evangelical about the subject. My message may not be simple, but it offers extraordinary, and proven, opportunities.
Beta leaders and organizations enable people to succeed at what they’re good at, rather than forcing them to become people they’re not.
Beta leaders and organizations empower people to expand their skill sets based on individuals’ own needs, rather than on a prescribed syllabus.
Beta leaders and organizations encourage people to confront and solve problems together, working collaboratively on the organization’s shared mission.
Everyone in a Beta organization looks forward to coming to work. Employees’ interests and the company’s interests are aligned. The company doesn’t just focus on the needs and interests of the top tier of executives, or an elite group of high-potential workers; it focuses on everybody. There is shared responsibility and a real, meaningful sense of community.
In a Beta organization, every employee—and not just those whose performance is in the top 10 percent—feels appreciated, as though they’re participating fully in the company’s mission, and getting their fair share of recognition and reward.
From a professional perspective, over the years I’ve discovered how to use and develop my own set of motivated skills: I’ve used cultural anthropology to build winning, high-impact corporate communities.
From a personal perspective, I’ve found my own small way to honor the inspiring community organizing of Annie Sullivan and my grandmother.
And from a business perspective, I’ve found a way to help companies position themselves to better lead and organize a successful twenty-first-century organization. The Beta approach and paradigm will help you recruit, manage, and retain the kind of talent you and your organization need to profit today and tomorrow. And the Beta mind-set will simultaneously provide you with a personal satisfaction you might have once brushed away as impossible.
We need to learn where we came from before we can learn where we’re going next. As in all the important lessons shared around tribal fires, family hearths, and corporate conference tables, the story of Beta begins by looking backwards.
Copyright © 2013 by Dana Ardi
Introduction--A Tale of Two Cultures
Chapter 1--Corporate Anthropology
Chapter 2--Plows and Primates
Chapter 3--Boomers and Bonobos
Chapter 4--Information Changes Everything
Chapter 5--Communication, Collaboration and Curation
Chapter 6--The Top of a Different Pyramid
Chapter 7--Eliminating Elitism
Chapter 8--Managing Ego
Chapter 9--It Takes Two to Beta
Chapter 10--Chasing Mentors and Motivated Skills