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What If We Eliminated Slack and Meetings?
It may sound extreme, but Shopify is giving it a shot. And we’ve all had the same thought: There’s got to be a better way to communicate.
Here are today’s highlights:
Businesses are still handing out big raises to keep employees.
Gen Z is selling the notion that résumé gaps are a good thing.
In Japan, aging business owners don’t know what to do with their businesses.
Fifty percent of business-owner exits in the U.S. are involuntary due to death, divorce, disability, distress, or disagreement.
It’s true. Shopify started the year by shutting down Slack and eliminating meetings: “On Tuesday, Shopify's first day back at work in 2023, company leaders announced a series of changes in a move called ‘Chaos Monkey 2023’ internally. The changes center on how employees communicate and collaborate with each other, particularly on Slack. ‘Chaos engineering is the practice of experimenting with a system to build confidence in that system's ability to withstand turbulent conditions in production,’ the company said in internal documents outlining why it's making the changes, which were viewed by Insider. ‘It's also known as chaos monkey, and at Shopify, we apply this practice not just in building great products for our merchants—but in everything we do.’”
“Shopify removed each employee from every existing public channel on the company's Slack workspace, deleted the message history from those public channels, and capped each channel at 150 members.”
“The idea, it said, was to turn Slack into a platform that would be used just for direct messaging, with the rest of the company's communications moving to Workplace by Meta.”
“Shopify also implemented additional rules around meetings. It automatically canceled all employee meetings of more than two people and all meetings that were scheduled for Wednesdays.”
“‘All of this feels chaotic, which is kind of the point,’ [COO Kaz] Nejatian said in his email.” READ MORE
At many companies, the constant turnover is affecting productivity: “One after another, employees at the New Hampshire manufacturer W.H. Bagshaw said goodbye. One went to a robotics company in nearby Boston. Another became an electrician’s apprentice. In all, 22 workers have left W.H. Bagshaw in the past two years — no small matter for a company that has a workforce of fewer than 50. That level of departures was also far from normal: In 2019, the company lost just one or two employees; the turnover rate in 2022 was over 30 percent. W.H. Bagshaw, which makes precision machined parts for the aerospace and medical industries, was mostly able to replace the workers who left — but at a cost.”
“Hiring employees and bringing them up to speed could include teaching them how to operate complex, multi-axis turning machines. That took time and energy, preventing the company from running at full capacity.”
“Production slowed. The number of on-time deliveries to customers slipped. ‘It’s taking longer to get stuff out the door,’ said Adria Bagshaw, the company’s vice president.” READ MORE
Businesses continue to hand out big raises: “Workers who stay put in their jobs are getting their heftiest pay raises in decades, a factor putting pressure on inflation. Wages for workers who stayed at their jobs were up 5.5 percent in November from a year earlier, averaged over 12 months, according to the Federal Reserve Bank of Atlanta. That was up from 3.7 percent annual growth in January 2022 and the highest increase in 25 years of record-keeping.”
“Employees who changed companies, job duties, or occupations saw even greater wage gains of 7.7 percent in November from a year earlier.”
“Famous Toastery, a Charlotte, N.C.-based breakfast, brunch and lunch chain, is raising pay faster than ever before, said Mike Sebazco, the company’s president. Across the eight company-owned locations, wages for existing kitchen staff members are up about 15 percent from a year earlier. ‘We didn’t want to be as easy to poach,’ he said.”
“Most business executives remain confident that they can pass along wage increases to consumers in the form of higher prices, said Lauren Mason, senior principal at consulting firm Mercer LLC.” READ MORE
Gen Z is rewriting the rules on résumé gaps: “For decades, job candidates have been trying to avoid handing over a résumé with an extended gap between jobs. The conventional wisdom has long been that companies won't want to hire you if your résumé shows that you have a gap of a few months or years between jobs, so candidates often try to fudge the dates or fill in the gaps with extracurriculars. Hiring managers worry the gaps signify that the candidate's skills have gotten rusty or that they have gaps in their technical know-how, which would mean them taking longer to jump in and get up to speed. But now, after decades of prospective hires fretting over a blank space on their career arc, Gen Z is shifting the power dynamics.”
“Based on my interviews, it's clear that Gen Z doesn't think opportunities for personal development should be limited to the more-traditional gap year before or after college, and they don't think companies should be penalizing workers who have chosen to or been forced to take time away from their career.”
“Instead of viewing it as a negative, many Gen Zers are arguing that career breaks are positive and forcing employers to reconsider their preconceived notions about the résumé gap.” READ MORE
Gene Marks suggests some business applications for your consideration: “Most software companies don’t have the budgets of Microsoft and Google to spread the awareness of their products and that’s a big challenge for them. It also presents a missed opportunity for businesses that could take advantage of these applications if they only knew about them. So allow me to help.”
“For workflow automation, consider Process Street. Starting at $100 per month for a team, the application provides an easy way to create workflows for any process within a company and then ensure that it’s automated with reminders and alerts along with progress tracking and metrics.”
“For a great cloud-based database, use Airtable. This application — which starts at $10 per seat per month — is like a spreadsheet on uber-steroids. You can first create unlimited tables and then bring in data from multiple sources, build custom interfaces and combine your data with automation to speed up your processes.”
“To move large amounts of data from multiple data sources into your preferred destination (a CRM system or any other database), consider Fivetran. This powerful database tool can pull, load, and replicate data from more than 200 cloud applications. This is an advanced tool that can also provide marketing and customer analytics and is popular with both Amazon Web Services and Microsoft Azure developers.” READ MORE
You need a plan: “Many businesses don’t have an exit plan or they don’t strategize adequately for a multitude of scenarios, said James Jack, who runs the business owners client segment at UBS Global Wealth Management. And that leaves them susceptible in the event of death, divorce or if a suitor, such as a private equity firm that’s hungry for a deal, comes knocking. Fifty percent of exits in the U.S. are involuntary due to death, divorce, disability, distress or disagreement, according to the Exit Planning Institute.”
“Sixty-seven percent of owners polled believed their heirs want the business and 33 percent thought their heirs would be most interested in assets from the sale. Among heirs, however, 52 percent claim to want the actual business, compared with 48 percent who said they prefer assets from the sale.”
“Planning for a sale or business transfer should also include understanding what’s next — whether that’s volunteering, traveling, starting a new business, or something else, said Scott Snider, president of the Exit Planning Institute.” READ MORE
Japanese business owners are giving away their businesses: “Hidekazu Yokoyama has spent three decades building a thriving logistics business on Japan’s snowy northern island of Hokkaido, an area that provides much of the country’s milk. Last year, he decided to give it all away. It was a radical solution for a problem that has become increasingly common in Japan, the world’s grayest society. As the country’s birth rate has plummeted and its population has grown older, the average age of business owners has risen to around 62. Nearly 60 percent of the country’s businesses report that they have no plan for what comes next.”
“While Mr. Yokoyama, 73, felt too old to carry on much longer, quitting wasn’t an option: Too many farmers had come to depend on his company. ‘I definitely couldn’t abandon the business,’ he said.”
“But his children weren’t interested in running it. Neither were his employees. And few potential owners wanted to move to the remote, frozen north.”
“So he placed a notice with a service that helps small-business owners in far-flung locales find someone to take over. The advertised sale price: zero yen.” READ MORE
Worn out by corporate America, more Black women are starting businesses: “Sybil Stewart's bosses would take attendance at meetings using her white colleagues' names — but the higher-ups often didn't bother with hers. Stewart, who worked as the director of diversity at a tech company, recalled one boss saying: ‘David's here. Susan's here. And diversity is here.’ Stewart, who's Black, said other leaders at the firm would reprimand her for missing meetings she was never invited to attend. She said these indirect or subtle acts of discrimination, often called microaggressions, weren't new, but they piled up after she spoke out against what she saw as racist behavior at the company.”
“In September, after 15 months at the company, she quit so she could be her own boss. ‘It's euphoric,’ Stewart, 39, said. ‘I left, and I'm never going back.’”
“She started a coaching-and-entrepreneurship company called Sage Stewart Life Coach Group. Her goal is to help others break out on their own.” READ MORE
2022 was the worst year for auto sales in more than a decade: “The drop-off marks a reversal for a sector that started the year hoping historically low interest rates and an end to parts shortages would fuel a rebound in sales. Instead, vehicles continued to be in short supply as car makers mostly waited for scarce computer chips. Russia’s invasion of Ukraine, a key supplier of auto parts, added to the supply-chain troubles. A prolonged shortage of semiconductors created pent-up demand for new vehicles, which meant that cars and trucks went to waiting buyers almost as soon as they hit the dealer lot.”
“The lack of availability left buyers paying top dollar for the rides they could secure, pushing the average price paid for a vehicle in December to a near record high of $46,382, according to J.D. Power.”
“The record high prices buoyed automaker profits last year despite shrinking sales volume and insulated the industry from a broader decline in consumer spending.”
“Now, while some supply constraints are easing, auto executives are confronting other obstacles, such as rising interest rates and soaring materials costs. READ MORE
Manufacturing contracted in December: “The S&P Global U.S. manufacturing PMI decreased to 46.2 in December from 47.7 in November, posting the lowest reading since the initial Covid-19 lockdown period in May 2020 and unchanged from the preliminary reading. The index suggests factory activity shrank in December for a second consecutive month as any reading below 50.0 indicates contraction. The contraction in activity was led by faster downturns in output and new orders, and companies attributed weak client demand to increasing economic uncertainty and high inflation, the report said.” READ MORE
Is decentralization the future of manufacturing? “Tino Go, the founder of Baru, a custom furniture, and more recently cabinets, startup believes it will be, as part of the fourth industrial revolution. Baru uses what Go calls ‘digitized custom manufacturing,’ which enables customers to place orders with small, independent workshops that own milling equipment called computer numerical control machines. The CNC machines are robotic and precisely mill sheets of engineered wood, from heavy and medium density fiberboard, to particleboard.”
“A custom-sized electric sit/stand desk with drawers, one of Baru’s most popular pieces, for example, costs $2,660. Customers choose the style they want and fill in the dimensions, so a piece can be custom-made. Baru’s price includes a two-three week turnaround, assembly in the customers’ home, a two-year warranty, and 30-day return policy.”
“Baru’s local manufacturing and supply chain process is unique, an ‘onshoring’ of sorts. The company uses 30 manufacturing locations across the United States, which are independently owned workshops.”
“‘We’re creating a virtual factory out of other people’s machines and other people’s warehouses full of stuff,’ says Go.” READ MORE
THE 21 HATS PODCAST
The business case for employee ownership: This week, Jay Goltz explains how he got interested in selling a percentage of his business to his employees and why he quickly lost interest once he started reading books, attending seminars, and talking to accountants and lawyers who specialize in employee stock ownership plans. To Jay’s ear, they all made ESOPs sound expensive, complicated, and risky. This was not something he needed to do. So why go to the trouble? Why take the risk? But he kept asking questions, and over time, he sensed that many of the problems he was being warned about didn’t have to be problems. As of now, he’s pretty much concluded that an ESOP could help him secure retirement for his employees while generating more profit for his business. In fact, he says, “I'm confident I can make more owning 70 percent of the company than I am now owning 100 percent.”
But Jay still has a few lingering questions, which is why we invited Corey Rosen to join the conversation. Corey helped draft the legislation that created ESOPs, he's the founder of the National Center for Employee Ownership, and he wrote the book on how the plans work. All of which led to an inevitable question for both Jay and Corey: If ESOPs are so great, why are there so few of them?
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Thanks for reading, everyone. — Loren