[Music] hi Shannon Waller here and welcome to inside strategic coach with Dan Sullivan Dan as usual you said something that I picked up on that I wanted to have a deeper conversation on and you said bureaucracies are systems of control and entrepreneurial companies are networks of cooperation and I just was like this is a very cool thought for a couple of reasons one is I think it's a great thing to know about bureaucracies and to understand and perhaps appre app what they're for but then also how to really appreciate an onreal company is in fact a network of cooperation and I'm not sure that everyone thinks of their company that way so I'm excited to dive in so what's your take on if you were just going to Define bureaucracies and entrepreneural companies what would you say well I think first of all there's several ways of looking at the statement first of all you're not saying anything negative about bureaucracy by saying that there are systems of control that's why a bureaucracy is designed that's why we have bureaucracies and there are certain situations and I can give you you know an example that probably all military forces are a bureaucracy they have levels of management and the whole point is that being involved in that management structure there's a certain amount of input that they want from people who are lower down in the management levels but if it's a known reality that you're working with I'll give you an example in my childhood I it's the 1950s you know the big Industries around where I lived I grew up on a farm but the main industries were big automakers and big steel companies the night sky sometimes you know lit up from a steel town about 40 Mi away and they had about three different companies that were making steel and it just lit up the night sky well steel making is not an experimental activity you know that once you're clear about the complete industrial system and what everybody's job is that you know you're not getting together at the end of every day and so you know tomorrow how should we make steel it takes about 50 years once you build the steel factory to actually amortize it you know where you've paid for all the get the system so you can't be fooling around and you need a system of control that once people are trained it's shift after shift it's day after day it's job after job you might be in the same job for 25 or 30 years and there's no change there's no change okay then that's not true anymore because old ways of doing steel were completely made Obsolete and new ways of making steel and so whole new systems are there but there have been things for long periods of time which are exactly the same and there services that we rely on electricity water you know garbage police fire and I have a belief that those occupations don't change that much you know of what works and what doesn't and it's been known for decades so you need a really good system of control in place and I think government generally isn't dealing for the most part with rapid change and you know taking advantage of New Opportunities taking advantage of new situations I think there's a system on place and the other thing is you want people who are working in systems of control to be people who like working in systems of control they like the system and they like the control and probably if they like controlling others they didn't mind being controlled themselves okay so that's one side and I'm not saying it's bad I think it's necessary the only danger to bureaucracies if everything is predictable and is programmable using human beings is wide open for taking the human beings and simply introducing automated technology to do what the human beings if they're never going to do anything different and they're never going to do anything to improve anything then probably large amounts of what they can do they can replace it with technology you don't need all the human beings that's the danger of being in a bureaucracy because automated systems of control are for the same purpose good point yeah entrepreneurism is totally different okay what I will say is that entrepreneurial systems always start with a single individual okay and it's a single individual who has a unique skill that gives him or her the confidence that they don't have to be employed they can go out and they can work directly with customers in the marketplace without any layers between them and the customer customer wants something they can provide it to the customer it's going to cost this much customer writes a check and you work with that and then you start saying well there's activities when I'm not working with a customer backstage activities I can get other individuals to do my backstage work you know so so the more you can keep the entrepreneur front stage in terms of creating new value and actually impressing the customer the client for that constant new value is being created and it's worth writing bigger checks for bigger value that's fine and then the entrepreneur has to create a team around it and I started just as a one-on-one coach now we're in three countries we have 115 team members we have another 17 coaches but I'm to this day kind of doing what I was doing 30 years ago it's just I'm not doing all the other stuff okay so what I have created over and Babs and I have created and you and Babs we've created networks of collaboration networks of cooperation our whole point is that every node in that Network every connection in that Network there's somebody with a unique ability that's better than what other people can do and that unique ability of each individual can be multiplied if you put them into a network of cooperation and the whole point why you want the organization to be a network of cooperation rather than a system of control is because things are changing really good point the environment is changing the marketplace is changing the economy is changing as we've discovered over the last 12 months everything's changing new technologies are available new skills are available so the last thing you want an entrepreneurial company to be is a system of control because all it does is make the organization not alert not curious not resourceful and not responsive to changing conditions outside of the organization that's a really interesting point Dan I've met some entrepreneurs who seem to have that control mindset but they're in an entrepreneurial yeah business but they try and run their teams because that's the part that I get to see lots of they run their teams from a real control basis so how does that happen and how can someone undo that mindset and have more this network of cooperation way of approaching things first of all I take the individual who has the emphasis on control more than cooperation because you will make that choice somewhere along the line that you're into control or you're into cooperation my sense is they won't attract and keep great people they don't they lose them left right and center and the other thing is I don't think they'll get very big I don't think they'll really grow I would say that the vast majority of entrepreneurs who technically qualify as not working for someone else you know they're self-employed are more control oriented than they are cooperation oriented and therefore they're very small the vast majority of entrepreneurs in the world are one person operations they might have a secretary they might have part-time but the vast majority of entrepreneurs can never grow beyond having just more or less created a job for themselves in the marketplace you know they're not reporting to a boss but they're also not being able to focus on bigger better things they're not able to focus on them just doing what they love doing they have to do everything so I would say that the individuals who would qualify for strategic coach at the entry level which is the signature program well you have to be making $200,000 to do that and I would say you don't get to that income strictly out of control you had to do a great deal of cooperating but I do see entrepreneurs who are very Cooperative to start off their career and then they get to a point where where they switch gears and they go into control okay that to me means that they've probably come to the end of them becoming a more valuable company in the marketplace I don't think they're open to new ideas I think the desire for control cuts off Innovation well that's interesting talk more about that D well the reason is people who have a passion for control after a while can only keep people people who are passionate about control and those people are not Innovative right and a lot of people I mean you said earlier they lose people and I was like yes they do and there's one person I'm thinking of actually you're a good example of what keeping me or not of a company that didn't keep you that's really and one that attracted you away from the other company I know an example you're a good example of that thank you that's actually very true I had thought of myself in that regard but you're totally right and some people just want to do what they're really good at and you were saying earlier in previous podcast when we were talking about who not how it's like if someone's going to control something that they don't know how to do all that well right but they still need it done that particular way even though they're not an expert in it they're not the right who it's very frustrating for team members yeah so there's just no even allowing the person to do what they're best at which is kind of silly so that need for control is really interesting you only will keep people who are willing to be told what to do and not do anything different yeah and the other thing is that these individuals are so busy doing what they've been taught to do and never seeing any other thing in their future except that they themselves perhaps will get control over other people okay but nobody's paying attention to changes in the outside world I would say that a lot of where you see this in the entrepreneurial world is in really mature well as established Industries where they're not a new industry they're not something that seems to be Innovative but my sense is that that's all changing and the reason is that one of the reasons why new technologies are created is to eliminate the cost of human beings who just do what they're told to do and are almost machine like in their activities you know they're expected to be kind of repetitive and not vary you know how they do their job so whether you're looking at it that way from the inside of your organization there are innovators out there are saying you know we cut your labor cost by 40% with a new kind of automated system and that's where you see software happening you know and there's like literally decision making systems now which are automatic decision-making and they're dealing with known factors you know it's kind of like the thermostat in your house you could have a human being who stays up all night to make sure that the temperature is right you know doesn't get too cold during the night and everything else but at a certain point you say well why don't we just get a little thermostat that does that well that's a simple example of human activity being replaced by automatic technology well take that really big and there's big factories there are automated factories now where they said that there's one human being and one dog the rest of it is machinery and they said why the human being and they said human beings there to turn the lights out and turn the lights off and what's the dog there is to bite the human being if he tries to do anything else you know so but Toyota I know has automated factories the cars are made automatically you know they have some human checking up on things but not very much yeah it's kind of Maintenance of the machines is what's left so it's interesting it's almost like what's the best use of humans yeah you know Ingenuity creativity comes to mind and another thought here is that you can't control Innovation there's a level of unpredictability which I think some people are just unwilling or unwan to deal with and so that's why pushes them into that control side yeah I think that the most Innovative people are the people who who need novelty so much in their life that they're very alert to anything that's changing around them something's different there's a famous story about a billionaire or millionaire at the time 100 millionaire at the time of the US stock market crash 1929 and every day he got his shoe shined okay he went to a certain place before he went to the office to get his shoe shined and he talked to the shoe shine person he would ask him how's business you know and it varied and he could tell by how many people were getting their shoe shined how they were feeling about themselves and whether that was something that wasn't an expense or it was an expense and everything else one week he talked to the Sho sharing boy he says I'm glad you came along this was on Friday he said nobody he says nobody's come by and the investor went and he sold all his stocks right away cuz he said they're depressed he says everybody's depressed they're not getting their shoe shined well that's kind of the mentality of an innovator they would notice something and draw conclusions from some very small something's changing some there's going to be some kind of problem now that needs a solution and I'm ahead of the game here and I'll figure out what people really need something's changing you know the wind's going in a different direction and I think that you're kind of born with that I think you can be trained to take it into account but I think the person who just naturally knows it they're born with this you know something's different here you know they pick up on moods they pick up on language they pick up on Behavior you know this different Behavior going on and everything like that and they're very fast to say okay this is Chang what does this mean across the system and I think that's where Innovation really starts it's in this noticing something's not the same here and being willing to take action and to not know all the answers before you take action I think is another part of that too well the other thing is that you don't see it as a negative thing that things are changing it's just that what we did before might not be what we're going to do tomorrow we might need to adjust our Behavior here and in a system of control it would be a negative yeah well first of all it wouldn't be allowed there's no way for anyone to report the change good point but a network of cooperation it's simply alerting the networks like hey something's going to shift here we need to be alert curious responsive and resourceful for that that's interesting so Dan if someone wants to take action and make sure that their company is in fact a network of cooperation and that they have that mindset are there some coaching points for what you would tell people to do well first of all the person who is the entrepreneur and the owner I think the way to start is is that they should look at everything they're doing this year and next year be doing 50% new stuff where this year they're just doing what they did last year so my sense is the cues inside of a network of cooperation comes from an entrepreneur who's looking for greater cooperation okay as an entrepreneur you're sending one of two signals to your team I want more control or I want more cooperation and people people will respond to you and what you want you're the lead person you know I'm just vastly expanding collaboration and cooperation wherever I can in coach I mean the number of outside collaborations I have a goal for next year that all of our collaborations if you take abundance 360 genius Network EOS the Hay House collaboration with Ben Hardy and Tucker Max Carrie obber with our audibles and then all my podcasts my collaboration with you all my other podcast Partners in 2022 that'll automatically have 500 situations where people pick up the phone and say I've heard about Strater coach tell me how I can sign up for the program nice Dan I love it and those are all external collaborations I'm gonna throw Colby in there too because they're a big col's huge yeah but also this needs to be the mindset of the leadership of your company too right and as companies grow a lot of time you do need networks and systems of cooperation not systems of control there's a difference otherwise you get into squishing people it's critical I think that entreprene leadership also has this same mindset of increasing cooperation not control the other thing at all three levels of our program signature 10 times in Free Zone every 90 days there's a brand new workshop very true and what we're saying is that all of our checkw writing entrepreneurs who are in strategic coach are our creative partner about what's needed next what's working next so I think as an organization from a conceptual standpoint I think we're incredibly alert curious responsive and resourceful to what's next from a standpoint of thinking tools and thinking processes and intellectual shortcuts for our entrepreneurs and we been that way from day one create a new book every quarter create new podcasts every quarter I think we're an unusually expanding and deepening network of cooperation I agree and I think that's dramatically accelerated even over the past 12 months which is kind of interesting yeah this is great I'm leaving with really making sure that the focus is on cooperation not control through all levels of interaction with external collaborators and clients but also internally with team members with leadership and with those systems too so this is a bit mindblowing but I love it I'm glad that we did a deep dive on this today thank you yeah and I haven't really thought it through there and my sense is that some of the big Tech Giants now I don't think they're in expanding networks of cooperation there's so much in terms of control now that they're actually preventing Innovations in the marketplace that might threaten their control y it feels negative I mean where you might have been excited about Facebook 10 years ago now you're kind of say you know they're getting kind of creepy and it's not because they're inventing all sorts of new stuffff it's like they're preventing other people from inventing new stuff you know so big corporations get that way General Motors got that way AT&T got that way Microsoft got that way and it's not necessarily because they're so big is because at a certain point the internal desire for control was so great that mentality and mindset of control is starting to go off to the marketplace now yeah yeah and I think that's something that smaller companies need to pay attention to too I think that can happen to any size organization yeah I think you can have 10 person bureaucracies you know there are organizations you know and I can think of some really great hotel chains you know where they're just super responsive to what their customers and clients you know they may have thousands of individuals who are inside the organization but everybody's attention is how can we increase the amount of cooperation with our customers but if you choose one the entire organization will gradually take on that mindset if you choose the other the organization will take on that mindset and attracts a different sort of person yes so decide which Camp you want to be in great thank you so much Dan really insightful thank you Shannon