Work = Life. Discuss Why do we work so hard? Is it because we like it? Or is it because we’re trapped? Ryan Avent says it’s both. In a lengthy, steady essay, Avent, an economics columnist for The Economist, digs deep on the topic, with both personal and historical examples (yes, Keynes and Marx appear). When he shares the complications of explaining his work to his parents, Avent shows how when we talk about our jobs we’re talking about how our work and the rest of our life integrate into a messy, complicated whole: “They are asking about a job. I am thinking about identity, community, purpose — the things that provide meaning and motivation. I am talking about my life.” For more and more people, a job isn’t what we do to fund our lives; it’s an essential part of who we are and what we want to be in life.
The Capitalistic Kibbutz In keeping with the idea of not knowing where work ends and the rest of your life begins, unicorn office-space provider WeWork is hoping its WeLive residential service will house millennials during the few hours a day they’re not WeWorking. This Fast Company piece on cofounder Adam Neumann reads like a celebrity profile; it’s unquestioning and breathless, and it misses key ingredients in WeWorks’ business plan (we’d love to know more about WeWork’s efforts to focus on long-term rentals to established companies, for example). But it does zero in on Neumann’s big idea about the future of work. “A capitalistic kibbutz is not a bad idea,” he tells his interviewer. “You need both.” That’s an angle we’d like to learn more about.
This week in the NewCo Daily, we’ve started something different. We’re committed to publishing detailed stories of business and positive change at stories.newco.co, and we’ll let you know about them as we do. In the Daily, we’re aiming to do what many of our favorite newsletters do best: share a curated view of the last 24 hours with our own unique, NewCo point of view. We’re eager to find out what you think, especially in the coming days as we figure out how to make the new format work best for you.
Pull Up These Boards You won’t be shocked to learn that independent boards pay their CEOs less (Wall Street Journal) than companies whose boards are packed with their chief executive’s golf buddies. According to a new study by proxy advisory firm Institutional Shareholder Services, CEOs reporting to an independent chairman make $2.9 million less a year. Makes sense. But you might be surprised to learn that relative coziness is pretty much the only variable that makes any difference in determining CEO pay, including a company’s stock price. Remember when owning stock was supposed to align CEOs with “shareholder interest”? Jensen and Meckling’s influential “Theory of the Firm” from 1976 (Journal of Financial Economics, PDF) played an enormous role in tying executive pay to stock options, a trend that in the long term has wreaked enormous damage to corporate giants like Kodak, HP, GM, Xerox, and many more. Boards that don’t hold CEOs accountable to more than stock price broaden the principal agent problem. By aligning stock price to compensation — and because an overly chummy board also holds lots of stock — both CEO and Boards are often incented to act against a firm’s long term best interests.
The Downside of Slack No one would argue that communication inside companies is a bad thing. Oh wait, someone would, and that someone is in the business of helping companies communicate. Jason Fried runs Basecamp (nee 37 Signals), one of the early collaboration software platforms. In a Medium post, Fried lays out the pros and cons (mostly cons) about what happens to organizations that think primarily in chat. While Fried acknowledges that “group chat used sparingly in a few very specific situations … makes a lot of sense,” he continues “what makes a lot less sense is chat as the primary, default method of communication inside an organization.” His insights have broader ramifications than just using Slack smarter. He reminds us how software should enable employees, not exhaust them: “Whatever tools you use, keep in mind how they affect other people, not just what they appear to help you get done. Done doesn’t matter if people are wrecked along the way.”
The venerable catalog marketer learned that standing for something isn’t easy, especially if what you’re standing for doesn’t connect to your core mission and might not even be intentional. Lands’ End CEO Federica Marchionni interviewed Gloria Steinem as part of a series called “Legends” in its spring catalog. It was a friendly, deferential conversation, not particularly deep and with no revelations or provocations. Steinem is a feminist and publishing pioneer, but a number of groups and individuals with anti-abortion views called out Lands’ End on the interview (even though there was no talk about abortion in it). Some called for a boycott. Shortly thereafter, Lands’ End released a statement:
Thanks to NewCo, I’ve gotten out of the Bay Area bubble and visited more than a dozen major cities across several continents in the past year. I’ve met with founders inside hundreds of mission-driven companies, in cities as diverse as Istanbul, Boulder, Cincinnati, and Mexico City. I’ve learned about the change these companies are making in the world, and I’ve compared notes with the leaders of large, established companies, many of which are the targets of that change.
As I reflect on my travels, a few consistent themes emerge:
1. Technology has moved from a vertical industry to a horizontal layer across our society. Technology used to be a specialized field. Technology companies sold their wares to large companies in large, complicated IT packages and to consumers as discrete products (computers and software applications). In the past decade, technology has dissolved into the fabric of our society. We all can access powerful technology stacks. We don’t need to know how to program. We don’t need a big IT department either. Now, technology is infrastructure, like our physical systems of highways and roads. This levels the playing field so new kinds of companies can emerge, and it’s forcing big companies to respond to a new breed of competitor, as well as a newly empowered (and informed) consumer base.
It was during the dancing Tuesday night. That’s when I thought, “This is the company I work for. This is amazing and I’m exactly where I need to be.”
The NewCo team wrapped up our retreat, in Santa Cruz, Calif., on Wednesday. It was a chance to learn more about one another, challenge our convictions, and bond. We cooked together and enjoyed great food, reflection, brainstorming … and dancing.
Intrigued (well done, Mr. Rosoff), I clicked the link, noting it was to Business Insider, a publication for which I have decidedly complicated feelings**. In any case, the story was great, if single-sourced. A reporter wandering the halls at CES found a desultory Accenture booth, manned by one Charles Hartley, a “company representative.” A quick Google search (done by me, but I digress), tells us Mr. Hartley is a PR executive focused on analysts and global media — an appropriate resume for manning a booth at CES, to be sure.
Welcome to the last NewCo Daily of 2015. We’ll be back January 4 to chronicle what NewCos are doing and start delivering a number of new editorial products (including one in January). It’s too early for us to run a comprehensive year-in-review piece (hey, we’ve only been publishing this newsletter since October) but today we’d like to look at the state of the basic unit of measurement for the NewCo: the company.
The NewCo Daily covers the organizations and the people in them trying to make meaningful change. Our founder John Battelle calls them companies on a mission, which is a subtle but important difference from being a company with a mission. Most companies have a mission. But companies on a mission are more likely to be open, driven by purposeful ideas, connected to their cities and communities, and connected to one another.
A report recently published by the JUST Capital Foundation investigates the role of the corporation in American society. It’s an impressive undertaking — more than 43,000 respondents — and we’ll address it in more detail in the coming year. But two data points jump out. One is that, across ideology and incomes, nearly 100% of respondents said measuring “corporate justness” is important. And no matter how JUST sliced the ideological pie, it never saw more than 50% of respondents say they trusted corporations. The desire to make businesses better is universal, and the belief that companies must earn our trust is strong.
Most important is what a company does, but what a company says has a great impact on its behavior. For example, if you’re on a mission, your mission statement has to be more than a series of rote bromides. NewCos like Patagonia (which we profiled recently) say what it believes upfront. Its mission statement: “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.” It captures both the idealistic and realistic reasons to build a business. Another NewCo, Warby Parker, says it was founded “with a rebellious spirit and a lofty objective: to offer designer eyewear with a revolutionary price, while leading the way for socially-conscious businesses.” A great mission statement says how a company will do well and how it will make good. It describes what it means to be on a mission.
There’s an argument raging among digerati right now whether Slack is a bona fide platform. One can’t argue, however, that Slack hasn’t become the central online workplace for more and more people, as its mission to make work more productive and more fun takes hold with more than two million people using it every day (roughly 25 percent of them on paid accounts).
The company’s announcement this week that it is launching a platform and funding it with both tools and money will make it that much easier for the company to lock in customers, since they will be able to interact with more and more apps from inside Slack, often via the rudimentary AI features of the service’s “bot.”
I love being part of naming something. It’s probably the flat out most fun you can have legally with your clothes on — but for many folks, including entrepreneurs, it’s the source of endless consternation.
It doesn’t have to be. Here’s how I think about coming up with a name for something — a company, a new product, even a project you might be working on.
Rule #1: Don’t Overthink It.
A name means nothing till those using it make it mean something.
So be willing to consider non obvious, even crazy names. Google? I mean, really, Google? And….Yahoo?! Alibaba? APPLE?