How To Choose A Board Member(blog.eladgil.com)
blog.eladgil.com
How To Choose A Board Member
http://blog.eladgil.com/2011/12/how-to-choose-board-member.html
2 comments
Why not make every employee a board member, with one vote each, and equal ownership of the company?
Decisions would be made based on what is in the best interest of the employees of that company. A real democratic way to run a business.
Decisions would be made based on what is in the best interest of the employees of that company. A real democratic way to run a business.
Two words : corporate politics. Working former ex-communist company (~300 workers) where workers own the majority share of stock turned me from a idealistic socialist to a cynical libertarian in just two years.
Can you share the experience?
Oh, the memories :)
Essentially the place was overstaffed, it had >300 employees, 200 of them were actually doing something and if done optimally that number would be ~150. Everyone focused on the immediate benefits (their pay check, their department, etc.) and ignored the costs (company profitability). There was classic division and warfare among departments, that lead to somewhat comical situations. For instance, at some point they realized they cannot raise the salaries anymore because the company would not be profitable, and all department heads naturally agreed, but they also wanted their friends to get the benefits - so instead of raising paychecks they started giving fictitious promotions. At one point the department managers had 10 "replacements" (whats the correct term here ?).
There was a guy in my department that literally did nothing, he would check in, surf the internet and check out every day for 7 years. His job was removed when the production line was upgraded and he was not skilled anyway, but he was a friend of the department manager and he was 50 so they decided it would be "unfair" to fire him. I'm not exaggerating the doing nothing part, I worked in the same office for two months.
The IT department was hilarious. These guys ordered 150K$ worth of servers (this was 10 years ago) only to figure out (when they arrived) that they don't know how to connect them to the existing system because they fired the only guy who knew that system (because of politics). So instead of admitting their incompetence they just hid it - and nobody noticed ! I saw the servers in the boxes when the guy was telling me the story. They had 100 IP telephones (that was ~100€ a peace) in boxes because they didn't want to bother connecting them and setting up the servers, but it sounded nice as a presentation to the board to clear the budget. At one point the network got hacked and the hacker ransomed 100K$, and nobody got fired for that !
Production department regularly sabotaged upgrades that would threaten their positions, for eg. they had a production line tuning/control server that would replace ~4 workers and increase the product quality, they actively sabotaged the introduction calming it didn't work. Finally they made a deal with the IT department to just drop it, and there it just stood there in the server room. It actually did work since a former production department manager decided to test run it with a friend after work (to verify their claims) and got it running fine. Needless to say, his ideas about reducing the numbers of employees to a more sustainable level got him to the former part in few months.
People were regularly stealing products, gasoline from distribution vehicles, equipment, etc. Even when caught on few occasions nobody was fired/it was quickly covered up within the department. Nepotism was common practice. People were sharing gigs of porn and pirated movies trough dedicated network servers.
There are so many incredible stories from that place, most people don't believe me when I tell them.
The company was able to survive all this because they got out of communism as a monopolist and the board/management was still connected to local politicians so they got shady deals from local government regularly. But when government got in to financial troubles, the demand dropped and competition entered the market workers decided to sell their stocks, and now the new owner is firing >50% of workers and outsourcing a part of the production.
This all ignores the people that actually did the grunt work and got screwed over because they weren't the relatives of some manager or the ones with social connections (and I wasn't among the hard working, actually, that's why I decided to quit after a while, there just wasn't anything to do for me there).
The worst part was that during all that perversity, everyone thought he was justified in doing what he did, even morally superior for "saving others". After that I figured out that (market) profit isn't such a bad thing after all, and that politics is a far more perverse game.
Essentially the place was overstaffed, it had >300 employees, 200 of them were actually doing something and if done optimally that number would be ~150. Everyone focused on the immediate benefits (their pay check, their department, etc.) and ignored the costs (company profitability). There was classic division and warfare among departments, that lead to somewhat comical situations. For instance, at some point they realized they cannot raise the salaries anymore because the company would not be profitable, and all department heads naturally agreed, but they also wanted their friends to get the benefits - so instead of raising paychecks they started giving fictitious promotions. At one point the department managers had 10 "replacements" (whats the correct term here ?).
There was a guy in my department that literally did nothing, he would check in, surf the internet and check out every day for 7 years. His job was removed when the production line was upgraded and he was not skilled anyway, but he was a friend of the department manager and he was 50 so they decided it would be "unfair" to fire him. I'm not exaggerating the doing nothing part, I worked in the same office for two months.
The IT department was hilarious. These guys ordered 150K$ worth of servers (this was 10 years ago) only to figure out (when they arrived) that they don't know how to connect them to the existing system because they fired the only guy who knew that system (because of politics). So instead of admitting their incompetence they just hid it - and nobody noticed ! I saw the servers in the boxes when the guy was telling me the story. They had 100 IP telephones (that was ~100€ a peace) in boxes because they didn't want to bother connecting them and setting up the servers, but it sounded nice as a presentation to the board to clear the budget. At one point the network got hacked and the hacker ransomed 100K$, and nobody got fired for that !
Production department regularly sabotaged upgrades that would threaten their positions, for eg. they had a production line tuning/control server that would replace ~4 workers and increase the product quality, they actively sabotaged the introduction calming it didn't work. Finally they made a deal with the IT department to just drop it, and there it just stood there in the server room. It actually did work since a former production department manager decided to test run it with a friend after work (to verify their claims) and got it running fine. Needless to say, his ideas about reducing the numbers of employees to a more sustainable level got him to the former part in few months.
People were regularly stealing products, gasoline from distribution vehicles, equipment, etc. Even when caught on few occasions nobody was fired/it was quickly covered up within the department. Nepotism was common practice. People were sharing gigs of porn and pirated movies trough dedicated network servers.
There are so many incredible stories from that place, most people don't believe me when I tell them.
The company was able to survive all this because they got out of communism as a monopolist and the board/management was still connected to local politicians so they got shady deals from local government regularly. But when government got in to financial troubles, the demand dropped and competition entered the market workers decided to sell their stocks, and now the new owner is firing >50% of workers and outsourcing a part of the production.
This all ignores the people that actually did the grunt work and got screwed over because they weren't the relatives of some manager or the ones with social connections (and I wasn't among the hard working, actually, that's why I decided to quit after a while, there just wasn't anything to do for me there).
The worst part was that during all that perversity, everyone thought he was justified in doing what he did, even morally superior for "saving others". After that I figured out that (market) profit isn't such a bad thing after all, and that politics is a far more perverse game.
What's in the best interest of the employees may not be in the best interest of the company. I never really thought about it until I interviewed at Amazon and realized that they care a lot more about customers than employees. Great if your a customer, not so great if you work there.
Because you need to limit the size of the board. Also better if your board has an odd number to minimize ties. You can't reasonably have 50 people meet in a room, discuss a complicated issue and then vote on it.
Having the employees elect some of the board members wouldn't be terrible, however.
Having the employees elect some of the board members wouldn't be terrible, however.
> Decisions would be made based on what is in the best interest of the employees of that company. A real democratic way to run a business.
Decisions would be made based on whatever can convince 50%+1 of the employees, which might well not be in the best interest of the employees of that company.
The potential results like "no raises for the 25% of employees who are women" might get you sued, too.
Decisions would be made based on whatever can convince 50%+1 of the employees, which might well not be in the best interest of the employees of that company.
The potential results like "no raises for the 25% of employees who are women" might get you sued, too.
"Above all else, look for great judgment and ethics."
http://avc.blogs.com/a_vc/2008/02/thoughts-on-cho.html