Lifestyle Company versus Growth Company

Gerhard Gschwandtner's post on the premium oyster farm whose motto is "that's enough for me" reminds me of an unfinished post I had written about lifestyle companies versus growth companies. I don't have it with me but it went something like this:

Starting Nobscot Corporation I found to be a relatively easy and fun challenge. We were creating a technology (WebExit) that we knew there was a need for and we had a clear vision of what we wanted the company to be and do. The only times that I had any doubt at all were on the few occasions that I encountered those connected with the venture capital community. Sometimes it would be an attorney, other times a local networking group. The discussion would inevitably turn to the dreaded lifestyle company versus growth company discussion. Lifestyle company would be said with a condescending tone even when the words around it were seemingly positive. "It's OK if you want to be JUST a lifestyle company" . Maybe it wasn't them. Maybe it was me. Maybe I was feeling guilty for not wanting venture capitalists to have a part of my business and wondering if I was making a mistake?

Fast forward 9 years later. Today I can without guilt extol the virtues of a lifestyle company. We run Nobscot the way we want to. We grow based on our earnings. We have lots of money in the bank. We have no stress. We make great HR technology with the design philosophy of simple but powerful; no more and no less than what is needed. We have amazing, truly amazing clients. We help some of the best HR departments in the world. We have tremendous colleagues that are like family. We provide fun, challenging opportunities to our staff and they provide our clients with more service than they ever expect (or pay for). We barely noticed the recession. We live in paradise. Not a bad lifestyle.

Would we have been happier if we had gone the Growth Company route? If we had started with $10,000,000 in the bank instead of $10,000? It's possible but hard to imagine. My guess is that we would have butted heads with money people very early on. Likely if we had even become at all successful, Bruce (co-founder) and I would have been booted out. The company would have gone off target and be gone. More likely is that it never would have become successful at all. We would not have been able to focus with such laser sharpness on continuous improvement of products to meet the customers many wants, desires and needs. There is something to be said for small and scrappy.

Lifestyle company or growth company? For the entrepreneurs out there, don't let anyone turn their noses up when you choose the path less travelled. There is a pot of gold at the end of the lifestyle rainbow and perhaps more importantly the rainbow itself is a pretty great (and profitable!) path to follow.

The Wind Beneath the Organization's Wings

There's an interesting discussion going on over at my new friend Laurie Ruettimann's Punk Rock HR blog regarding the death (or not!) of HR.

It's interesting that for some reason people evaluate HR based on the performance and job duties of the clerks in the profession. It's as if people think the role of HR is keeping track of vacation and holiday time or posting rules in the lunchroom. Most people have no idea of the actual role of HR as leader and advisor to the CEO and executive team on all things people related. No one thinks that the role of the IT leaders is data entry or that the role of the Finance team is paying bills. Yet everyone defines HR in those simplistic terms.

I think the reason for this disconnect is that HR works as an advisor behind the scenes to make every other department look good and function optimally. Much of what HR does is in the shadows and HR professionals are content to let other people shine based on HR's advice and counsel.

The most accurate description is already written out in Bette Midler's song, Wind Beneath My Wings. Read the following lyrics and consider them being sung to you (HR) by every executive in your organization.

It must have been cold there in my shadow,
to never have sunlight on your face.
You were content to let me shine, that's your way.
You always walked a step behind.

So I was the one with all the glory,
while you were the one with all the strain.
A beautiful face without a name for so long.
A beautiful smile to hide the pain.

Did you ever know that you're my hero,
and everything I would like to be?
I can fly higher than an eagle,
for you are the wind beneath my wings.

It might have appeared to go unnoticed,
but I've got it all here in my heart.
I want you to know I know the truth, of course I know it.
I would be nothing without you.

Did you ever know that you're my hero?
You're everything I wish I could be.
I could fly higher than an eagle,
for you are the wind beneath my wings.

Did I ever tell you you're my hero?
You're everything, everything I wish I could be.
Oh, and I, I could fly higher than an eagle,
for you are the wind beneath my wings,
'cause you are the wind beneath my wings.

Oh, the wind beneath my wings.
You, you, you, you are the wind beneath my wings.
Fly, fly, fly away. You let me fly so high.
Oh, you, you, you, the wind beneath my wings.
Oh, you, you, you, the wind beneath my wings.

Fly, fly, fly high against the sky,
so high I almost touch the sky.
Thank you, thank you,
thank God for you, the wind beneath my wings.

How Painful is Your Workplace?

According to an interesting set of articles on pain in the Scientific American Mind September/October issue, we all experience pain uniquely. For some people, the volume has been turned up on their pain channel which causes them to experience pain sensations to a greater degree than others. Other people have normal pain reactions but are blessed with creating natural opiates that hide the sensation of pain.

While the article discusses the etiology of physical pain, perhaps we can liken the situation to the psychological pain that employees suffer from in the workplace. We've all seen that some employees have a much higher tolerance for difficult bosses, nonsense procedures to follow, rude colleagues and the like than others. Low tolerance employees seem to wilt or fight back or run away (or vent on Twitter) any time a work situation is less than optimal.

According to researchers at University College London and Harvard University, an increase in physical pain sensation may be the result of previous injury. This has something to due with abnormal excitability of neurons. The article describes it as follows:

Following an injury to a rat's paw, neuronal signals from nociceptors near the skin to neurons in the spinal cord became amplified, much like turning up the volume on an iPod. These altered neurons unleash exaggerated reactions to tissue-damaging input...

Which makes me wonder, are some employees hyper-sensitive to workplace irritations due to previous negative experiences? Did an ogre boss from the past, amplify the irritation production so that any future bosses' slip-ups are felt more painfully? Does this explain why there are so many of those whining employees who bitch and moan about the smallest of things? Do job-hoppers create their own self-fullfilling prophecy because of their over-sensitization to workplace problems?

One of the things I spend a lot of time talking about is identifying and reducing an organization's workplace irritations. We use exit interviews and other workplace surveys to make sure we understand what is causing employees' pain. Maybe we should also consider better screening in the recruiting process for employees who have low tolerance for irritations.

The Scientific American Mind articles also discuss the phenomenon of natural opiates that the body produces which minimize or eliminate the sensation of pain. Some people have a greater opiate producing brain/nervous system than others. Interestingly, one can increase their natural pain relievers. Any guess how? With rewards.

Studies show that even the anticipation of something pleasurable activates the brain's reward circuitry which in turn produces pain relief. J. Dum and Albert Herz of the Max Planck Institute for Psychiatry in Munich studied this phenomenon with rats. They placed rats on a metal plate and fed half of them regular food and the other half chocolate covered biscuits. After a couple of weeks of this routine, they began to heat the metal plate. The rats who were anticipating the chocolate covered biscuits, endured the pain for twice as long. When they gave the chocolate rats a drug that prevents natural endorphins from relieving pain, they could not endure the metal plate any longer than the regular chow eaters. Clearly the anticipation of the reward was producing the pain relief.

While we always want to continue identifying and minimizing the "pain" employees experience in the workplace, we can also take a lesson from the rats. Perhaps we should also think about how we can increase productivity, decrease employee turnover and make for a happier workplace by hiring those with the highest threshhold for workplace irritations and creating rewards that stimulate our employees own natural pain killers.