3 Behavioral Systems

3 Behavioral Systems


“Love is a better master than duty.”

Albert Einstein


Business Engineering

In the past I have been asked why I ‘gave up’ my engineering career to pursue business. This question is a bit silly because business is engineering. An engineer designs and builds a device to fulfill a purpose. A business leader designs and builds a business to fulfill a purpose. Many people falsely believe that the purpose of building a business is to make one wealthy. The end goal of personal wealth is the end goal of a con artist. If your ultimate end goal is wealth then put this book down immediately, it’s not for you.

Business engineering is behavioral systems engineering. A behavioral system is made up of the environment in which the behaviors take place, governing philosophy, ethos and ideals, rules for procedural execution, and lastly the internal functioning of the humans in the system. The behavioral system of a business interacts with the behavioral systems of the businesses customers, and the behavioral systems of the businesses vendors.

The same thing applies to all types of organizations that involve the execution of a procedure to fulfill a specific purpose including governments themselves. Absolutely everything involving cognition is a behavioral system of some kind or another.

The behavioral system of business is a machine, the purpose of the machine is to fulfill a higher purpose, that is, the solution to a fundamental problem. Money is as much of a raw material as is copper, silicon, and tungsten; and as much of a tool as a hammer, or a CnC machine. Money is not an ultimate answer, it’s just another tool in the toolbelt of an engineer. Used improperly, the money will produce no useful results, just as a hammer cannot thread a needle.

Any corporate or government machine is created to fulfill a purpose. That purpose needs a model of monetization to provide the fuel to make the machine run. Bubbles in the market come about when wealth and meaning fall out of balance. When there is an abundance of meaningless wealth created from the belief that one can get rich quickly, one can be sure a crash will happen. As a business designer one must first identify what they want the meaning of their machine to be, and second develop a model of monetization.

To exert the energy and willfully suffer through the pain and frustration of creation requires a romantic sort of love for what one is doing. Humans who are in love with a philosophy will derive great meaningfulness from that love. When one is driven by meaning and love they will go to extreme lengths of self-sacrifice to fulfill the mission. The greatest companies in the world have a core philosophy that the inner circle and key employees are head-over-heels in love with.

This chapter is a brief exploration of the origin of the modern behavioral systems of businesses, as well as the behaviors of individuals within those systems. There are very few rules for how behavioral systems are designed. Just like any creative endeavor, there are an infinite number of possible configurations, so why limit one’s self to the status quo?

The Traitorous Eight

During the mid-1950’s a technological revolution was brewing in the United States. The transistor, a core component of all of today’s electronic systems theorized by Julius Edgar Lilienfeld 30 years earlier, had been realized by physicists working for Bell Labs. The head of the project, William Shockley, was incredibly upset by the fact Bell Labs had not included his name on any of the transistor patents for technology that he had helped to bring about. William left Bell Labs and moved to Palo Alto California and started Shockley Semiconductor.

In 1956 Shockley, along with John Bardeen, and Walter Brattain were awarded a Nobel prize in physics for their invention. The foremost problem with patents and Nobel prizes is that the credit given goes to a very limited number of recipients. It took a global physics community to develop, test, and record all of the information it takes to create a new thing. Shining the light on 3 people casts a shadow on dozens of others who in-fact made pivotal contributions to the creation of the transistor. Furthermore, these sorts of prizes have a way of telling the recipients that they are ‘better’ than everyone else.

We all stand on the shoulders of those who have come before us. The belief that there are a few of us that are ‘superheroes’ is nonsense. The superhero belief fortifies a misguided behavior that some ‘have it’ and others don’t. Every human is capable of creating original works and achieving mastery. If one believes that they can’t, that belief is guarantee that they won’t. As I write this book, I stand on the shoulders of those who have come before me. The names are too many for me to even comprehend. All of the concepts in this experiment and book are built upon the work done by those that have come before me.

Shockley had recruited 8 highly skilled engineers to help him build his company. All of which had moved themselves and their families to Palo Alto. Once Shockley had won his Nobel prize, his behavior changed. Shockley’s management style became incredibly autocratic and authoritarian. If there is one thing that highly educated and skilled individuals disdain, it is authoritarianism. Dismayed and annoyed with Shockley, the team of engineers now known as the ‘Traitorous Eight’ left and struck a deal with investor Sherman Fairchild to build Fairchild Semiconductor.

Fairchild Semiconductor was a much more inspirational working environment and it was there that the modern silicon transistor was perfected. Even though the working conditions were a vast improvement something was missing. Every time one of the members of the company made a crucial contribution Fairchild would earn massive sums of profit. Very little of that money would wind up in the inventor’s pockets. The individual reward was not built integral to the structure of Fairchild and as a result, individual contributors began holding back their new ideas.

Large companies work overtime to retain their ‘inner circle’ members. Huge salaries, lots of stock, vacation, benefits, funding pet projects, are all examples of money spent to keep the crucial employees happy. That inner circle is in love with the company and will often do anything to serve the mission of the company including breaking their own fundamental moral codes. While this is incredibly flattering for the leaders of the company, it’s also an incredibly limited line of thinking.

Have you ever heard the saying “love will set you free”? It’s a pretty sad joke to me because I see a lot of people who are “in love” and completely enslaved by that love. Now if worded differently: “love for yourself will set you free”; that statement is becoming true. The Nyborg model of business is all about getting one to love themselves above all other loves. Positive entitlement self-esteem is the number one trait among successful entrepreneurs.

Entitled behavior is often thought to be a detrimental way of thinking to greater society. However, there are positive and negative machinations of behavior. Always being there for yourself, constantly developing your own capabilities, doing what you feel is right, taking care of your physical and mental health, and not limiting your lifestyle to protect the feelings of others, are all positive entitled qualities. After all, on the airplane one is instructed to put the oxygen mask on yourself first, and then one’s child second.

A new corporate model was evolving, other investors followed Sherman Fairchild’s example and would provide inventors and would-be entrepreneurs with the capital to leave and start their own ventures. This new model, now called Venture Capital (VC) spread quickly and over several years dozens of companies spun out of Fairchild Semiconductor. Intel, AMD, National Semiconductor, Cypress, Kleiner Perkins Caufield Byers, Four Phase, are just a few of the massively successful companies to arise from Fairchild Semiconductor.

These new companies involved a new behavioral system model of employee compensation. Any business is only as good as its behavioral system model. As the behavioral system model (culture) will drive the outcome of the business. As famous business analyst Peter Drucker once said, “culture eats strategy for breakfast.”

The Equity Model

Equity is a term that means a piece of company ownership. When a corporation is created the founder(s) create shares of corporate stock. The stock value is enhanced by the success of the company and employees are granted the option to purchase the corporate stock at a premium fixed price. As one’s contributions increase the company revenues and profitability, the value of the stock goes up. Employees purchase their stock options at the fixed initial grant price and then later sell that stock at market price. The Equity model spread quickly and is now the standard incentive model for a technology company.

When creating corporate stock, founders are encouraged to reserve 20% of this stock to be granted to employees. In 2007 I completed my term of military service and was recruited to join the fuel cell technology company Bloom Energy. Like those who had come before me I was granted stock options. Hired at a ‘grunt’ engineer level and because I had ‘only’ graduated from Naval Atomic Power School and not a four-year university; my blue book value was lower than an engineer holding a BS college degree.

This didn’t bother me as I was elated to gain the experience, and of all of the prospects that I had at the time, Bloom Energy was the best choice. In hindsight I am glad that I made that decision and would do it again. Bloom Energy was one of the many companies created in the climate change paranoia green-washing that took place in the early 2000’s. A tremendous amount of capital was invested in Bloom and we used that money like toilet paper. What became clear to me over several years of working at Bloom was that my stock value was not driven by my contributions, but rather by the decisions made by the board and executive team.

There was an ‘inner circle’ that called all of the shots, and combined with market forces is what drove the stock price of the company. In-fact when I exercised my stock options and years later sold them, I had to pay so much money in federal tax called ‘alternative minimum tax’ that I ultimately barely broke even. Lesson learned. As a non-executive and not part of the corporate inner-circle, one can expect about the same from the Equity Model.

The equity model is the worst model there is, except for all others models tried so far.

Mass Hysteria

When I left Bloom, there were over 1400 employees, 10x larger than when I joined, the inner circle stayed roughly the same size. Managing all of those employee stock plans takes an incredible amount of extra effort. Behavioral models have incredible social gravity. The cliché “That’s the way we’ve always done it” is frequently laughed at, but it is no laughing matter at all. For instance, 70% of American males have their genitals involuntarily mutilated in a procedure with the justification “that’s the way we’ve always done it.” Beyond theological dogma there is no actual reason to practice this. Yet the parents of those 70% usually just go through the procedure whether they are religious or not.

When it comes to social behaviors, human beings develop mistaken beliefs about the nature of things, and the choices they can make. 99% of the decisions a person makes are within the ‘always done it’ model of thinking, because we use models of the past to guide decisions of the future. This form of thought process is a good servant, but a terrible master. Believing that when I joined Bloom Energy that I would make a healthy sum of money and be able to ‘retire’ early was quite silly. Yet I worked tremendous hours and was incredibly dedicated to Bloom for several years because of that belief.

Many believe that if they spend money on a college education, they will gain expert level skills and be able to monetize off of those skills and earn more than those who did not. WRONG! Yet the list of these behaviors goes on and on. I know lots of Atheists that live a Protestant Christian lifestyle; they claim to be non-believers and yet they blindly practice social behaviors developed from their root cultural theology. Take a spin on social media such as the feeds of Facebook and LinkedIn, and there are millions of people congratulating and encouraging each other for behaviors that they believe are ‘good’.

It takes additional energy to think, behave, and live differently, and the gravity of society is incredibly powerful. As I write this book my daughter’s elementary teacher was just fired on the last day of school without any explanation given. The woman was a fine teacher who the week before had legally married another woman. We live in a community where 80% of the population believes that homosexuality is wrong. I was even told by community leaders that my neighbor was a pervert and a molester; the man is just gay. That’s it.

Don’t believe you are subject to this same hysteria? WRONG! All of us are affected by this behavior. Behaving like others, and or how another wants us to behave is a survival strategy we acquire when we are young. Many people continue through their lives using this tool mindlessly, and letting it constantly tell them what to do. After a decade in the corporate world as a W2, I’ve come to observe that up to 80% of the actions taken by employees of a company produce no useful benefit. The 80% is simply an employee survival strategy to protect the feelings of their boss or others. This is a massive waste of resources and time.

When trying a new skill for the first time it is incredibly common to look to the models of others to inform one’s attempt. Using models of the past and present to inform one’s thinking will teach you to execute like others. When one executes the game of others the result is usually more of the same. For instance, take the historical example of a high jumping technique known as the Fosbury flop.

For decades, the high jump was performed using a few forward-facing conventional methods. Every high jumper was competing with each other using similar techniques and over the years very little change in the maximum jump height was achieved. High jumping using other techniques could not break past the 7.5-foot mark. Then, in the 1968 Olympic games an American athlete named Dick Fosbury attempted a completely different technique, dubbed the Fosbury Flop. Although strange, even laughed at, the mechanics of the new technique were far superior and enabled jumpers to ultimately exceed 8-foot jumps.

A corporation is usually configured to execute a very specific technique, this is not fundamentally a negative thing. A company is a machine made from human beings and if everyone isn’t coordinating using the same timing, communication, and execution, then the machine won’t work very well. A clock doesn’t work if the gears don’t mesh, and a company won’t work if the employee’s actions don’t mesh either. Watch the Amish raise a barn sometime, the coordination of the work effort is incredibly impressive. A quality company does one thing really well. A responsible company stays focused on doing that one thing better than their competition. If a company tries to do everything, the result normally is products that are barely mediocre.

During the 3D printing boom in the 2010-2015 time period, one company, 3D Systems attempted to own the market. The 3D printing market is incredibly diverse. There are dozens of different kinds of printers that serve very specific market needs ranging from consumer to industrial applications. 3D Systems is one of the first 3D printing companies, founded in the late 80’s serving the commercial printing market.

During the printing boom the CEO of 3D Systems attempted to own the entire printing market and in just a couple of years acquired dozens, yes, dozens of different companies. Buying 100 watches and putting them into a blender doesn’t make one amazing watch; it makes a big pile of non-functional watch guts. That’s precisely what happened with 3D Systems, their wave crashed on the beach with the Cubify product line which was a $3500 printer that was out-performed by dozens of other companies’ printers that cost about $500.

3D Systems made a big pile of watch guts, and a company filled with employees who did not mesh at all. The culture inside 3D Systems was complete chaos, their products turned into poop. You couldn’t waterboard me into buying a single 3D Systems product, ever. The 3D Systems story is grandiosity at its worst. At Nyborg, we do a lot of welding, we do a lot of other activities as well, but welding is a big one. Over the course of the work there has been a great deal of systematic problems with welding processes we have noticed. Every single one of those systemic problems is a product just waiting to be built.

However, Nyborg’s mission is not the production of welding products. Nyborg’s monetization model is the production of chemical manufacturing and automation products. Much like at Bloom Energy, I designed several products that were supportive to the company’s mission. But the company was not a machine built to adapt and start selling those products. Many of the things I designed would help out Bloom’s competition if released into the wild. Bloom’s product is fuel cells, not fuel cell test stand components.

All of the ideas for new welding products, and other products not associated with the core mission at Nyborg, are for one of our team to get out there and build a new company to produce. I’ll be the first customer, gladly too, especially since Nyborg will own a small share of the new company that spawns off of Nyborg. Once a machine is built to perform a specific task such as making Fuel Cells, ERP Software, Jewelry, or Automation products, it is a highly dangerous activity to use that machine to attempt to perform an alternative activity. Just as a hammer is for nails, and a screwdriver is for screws, those tools don’t perform optimally on tasks they were not designed for.

Pieces of the corporate machine A.K.A. the people will discover problems that are perpendicular to the machine function. The corporate machine is a highly fertile idea farm. In the traditional structure, alternative ideas are often treated like weeds contaminating the crop. Instead, those ideas can have the opportunity to make an entirely new farm using the Genesis Model.

The Genesis Model

“Train them well enough so they can leave, treat them well enough so they don’t want to.”

-Richard Branson

How about instead we make a slight change in that thinking. Train them well enough so they can leave, and then invest in their new company when they are ready to go.

I propose that a new company only reserve 10% or less of its equity for employees. Reserving a larger equity pool for the company’s founder, key investors, advisers, and board members. The individual employees are developed aggressively and coached. When ready, those employees can begin a development cycle for their own company using the excess resources of the ‘Parent Company’ to develop their ‘Child Company’.

In the process of operation, a company will build up large amounts of excess material resources. As a lab facility manager at Bloom Energy, I would periodically sell off pallets full of no longer utilized laboratory equipment. As a representative for Swagelok, I’ve walked through the engineering department halls of multi-million and billion-dollar companies piled with idle tools and materials. Even at Nyborg we have built up a tremendous number of excess resources. There is a reason one can go onto eBay and find a huge amount of used laboratory and manufacturing equipment.

A mother feeds her young from the energy in her body, a company can bear children fed from the energy of that company’s excess resources. A company even has excess human resources, and humans are the core ingredient to building a company (for now). By preparing and combining all of the raw materials together in the proper sequence, anything can be manufactured successfully, including successful entrepreneurs. If Fairchild Semiconductor practiced the Genesis Model, they would have likely been the first trillion-dollar company instead of Apple Computer in my opinion.

The Society for Human Resource Management states that the average employee term at a technology company is about 3 years. Currently many believe this is a retention problem and wonder how to keep their talent. The answer is you can’t take it with you! It takes about 3 years to get the most knowledge and excitement out of a tech company employment opportunity. After the excitement wears out, the people with the most to offer become bored as the company doesn’t really have much left to offer them, except for freedom to leave and pursue a new opportunity. Don’t try to keep good people, help them become even better people and congratulate them as they take the steps out on their own journey.

When I was in the Navy, my service contract was 6 years; 2 years for school, and 4 years in the fleet. I observed 5 types of career behavior in the Navy:

  1. Those who were there for the enrichment of the single term contract, and made the most of the experience.

  2. Those who were there for a single term as something to do until they figured out something else.

  3. Ones that had made an incredible error joining the military and couldn’t hack it.

  4. All-In individuals who had an insatiable love for military duty and worked on a 30+ year career.

  5. Individuals who were there to do the bare minimum, gain a little seniority, but not so much that they get too much responsibility, and achieve a 20-year pension.

Personally, I classified as a #1, I enjoyed it, worked hard, and got as much as I could out of the experience. #5 individuals are lovingly referred to LIFERs by the other four types. LIFER is a derogatory term that stands for Lazy Ignorant Fucks Expecting Retirement. The last thing a person wants inside their company is a LIFER. LIFERs don’t actually want to be there, they would rather be doing something else, they should be doing something else, but keep themselves fixed in place out of fear. LIFERs will regularly turn out 20% positive results, and 80% waste. When I was recruited at Swagelok the hiring manager pointed out the long retention time of several employees as a selling point for the job...ew! Swagelok got incredibly boring after less than 24 months.

The Genesis model will convert the LIFERs into far more useful individuals. Employees should flow through a company adding their distinct ideas and perspective to the corporate machine, and then leaving to make space for new blood. I’ve witnessed incredibly bizarre behavior out of LIFERs, such as working for years on a broken-down computer that desperately needs replacement; instead of demanding IT replace the machine with a faster system. Seeing something that takes 30 seconds on a refurbished $200 computer, taking 10 minutes on a busted old machine is a waste that adds up to massive losses. Other LIFER type activities are individuals who perform their tasks for decades without gaining any perspective about why they are doing what they are doing. Even those who work 20 years at a company and have little to no understanding of what that company actually does.

Genesis model training pushes employees to confront and go through their fears or wash out. The vast majority of these fears are manifested from childhood and must be confronted for a human to grow as a person. It’s nothing personal, either load the new operating system software, or go use one’s default operating system somewhere else. Implementation of the Genesis model must utilize Positive Cognition Training, and attack trauma head-on. Address trauma first, everything else will be moot with unaddressed trauma.

Lions and Hyenas

In a company there are adults, and adult children. Adults are like the lions; lions gather together in a pride in limited numbers. Adult-children are like hyenas, skittish by themselves, and will gather in a large pack if unregulated. Just like in nature, packs of hyenas will run lions off of a rightfully hunted kill. Human adults are self-regulating, aggressively scheme to get what they want, and can figure out highly creative solutions to problems. When a person has severe enough childhood trauma, they will stay stuck in their childhood and be an adult.

Adult-children are easy to spot, they have a great deal of difficulty processing and regulating emotion. If their reality is tampered with, or plans suddenly change, adult-children usually have a temper-tantrum and will shut down and or resort to a coping mechanism such as drugs/alcohol or other non-productive behavior. “That’s not my problem, it’s my boss’s problem”, is a common adult-child behavior. To an Adult-Child their boss is their surrogate parent. One Nyborg member literally called me “dad” though he was twice my age.

One of the early Nyborg experiment members, Susan, for a few months was the only welder at Nyborg, and though she was highly proficient at welding from PCT, she had significant reliability issues. Susan was a 1099 contractor and would go out of town frequently on ‘meditation retreats’ with some other group she was part of. We would be in the middle of a project rapidly moving along to get to delivery, and Susan would be suddenly gone. As an adult-child Susan believed that somehow as her ‘parent’ that I would somehow just take care of the problems she caused. Susan was unable to realize that as a startup company every dollar counts, and one is constantly in a race against the clock.

Not able to calculate that shipping products means generating revenue and that revenue is what pays her invoices; Susan would assume that Nyborg had all the time and money and would just handle it. We did ultimately handle it, and fired Susan on her birthday; Happy Birthday, time to grow up.

Case Study – Scar and his Hyenas

Right at the beginning of 2020, Nyborg took on a client for a factory construction project in the southeastern United States. This client was a non-rehabilitated pathological narcissist who believes that he is someone like King Richard the Lionheart. In fact, this client was more like Scar from Disney’s The Lion King, so we’ll call him Scar. Scar of course had an entourage of Hyenas on his team. Since Scar had done time for corrupt business practices and was unable to legally operate a business in the state, he used his Son-In-Law as his head hyena. We’ll call him Larry.

Larry was an alcoholic and failed lawyer who brought in his ‘best friend’ hyena to help. His best friend was a 400lb drug dealer who had a pathological fear of frogs. We’ll call him Curly. Lastly, the whole idea for Scar’s business came from our third hyena called Moe. Moe was a pathological sex addict, and had a severe behavioral addiction to marijuana smoking, and was high all the time.

Scar and his hyenas were building a new CBD manufacturing business as the prices of CBD crude at the time were skyrocketing from market demand. Already, we’re off to a bad start. Their new company Gunna Fail Fast (GFF) was off to a quick start. 4 executives and not one of them knew the first thing about hemp extraction or chemical manufacturing. Scar was able to raise several million dollars from his network. From that he promptly embezzled about 40%, paid by Larry to Scar as a consulting fee.

The COVID pandemic was raging in China and already the construction project was hitting delays from the problem. With 40% of the investment capital spent on Scar’s new house and cars for his children from several different marriages, the project runway had been snipped so short that the pandemic posed a grave danger. The raging CBD prices at the beginning of 2020 crashed within the second quarter of the year pretty much sealing the fate of the company.

Once the pandemic struck, there were concerns over getting 40B solvent as the need for hand sanitizer skyrocketed. In response to this crisis, Nyborg paused CBD extractor construction, and built a 2000-gallon-per-hour hand sanitizer manufacturing system from spare, and not so spare parts. Nyborg even custom formulated a nice gel sanitizer for GFF. Scar was pleased and began to sell hand sanitizer for the epidemic. Scar and his hyena’s hired even more hyenas as a production team. The production hyenas kept changing the gel sanitizer formula and wasting thousands of gallons of raw materials.

Moe committed at least one observable act of sexual harassment per day on Nyborg and GFF team members. Curly broke everything he touched, and sexually harassed GFF and Nyborg team members as well. One day Curly even fired up a gas barbeque inside the factory building about 10 feet away from 3000 gallons of ethanol. Ethanol, you know, race car fuel. The grill filled the whole building with smoke and when I confronted Curly about the grill, he gave me an incredibly snarky response. I ultimately told Scar to fire Curly, and Scar’s hyenas ran off Nyborg instead. There were 2 other engineer’s Scar brought in on the project but Scar’s hyenas ran them off as well.

Less than 24 months after GFF’s doors opened, the factory was shuttered. At last check-in GFF was still barely operating for the sole reason to keep Scar and his Hyenas from being brought up on charges of fraud. It’s likely only a matter of time before an indictment comes down the pipe, as the group is under investigation.

No matter what Scar did, his hyenas found a way to mess it up. Scar could network and sell, and knew how to hustle, but the company he kept guaranteed that no matter how hard he tried, he was doomed to fail. Adult-Children cannot run a company because they are incapable of executing the brain’s executive function. Those who surround themselves with fools, are doomed to become fools themselves.

Case Study – 2M

2M is a billion-dollar company run by adults and filled with hyenas. 2M adopted a supply chain management style known as PICOS buying tactics. Developed by a greedy executive at GM in the 1990’s PICOS involves shaking down a company’s supply chain for aggressive cost cuts. PICOS tactics are incredibly underhanded and the procedure refers to corporate purchasing agents as ‘clones’ and instructs the ‘clones’ to lie to vendors to get what they want.

Even though PICOS made GM an extra billion dollars in its first year of implementation, it nearly destroyed GM as the delayed hit in product quality was so hard that GM almost died. GM should have died, any company that calls its employees clones and instructs them to lie deserves death.

2M was being serviced by Swagelok for several sub-assemblies that go into their products. As Swagelok was quoting the latest assembly, a supply chain hyena was brought in to demand a 5% decrease in the cost and a schedule of cost reduction for another 5% over 3 years. The assembly in question was designed by an engineering hyena, and was another fine example of an incredibly inefficient design.

In a mistaken attempt to satisfy the hyenas, I redesigned the whole assembly and cut down on the total cost by 30%. Swagelok went back to 2M and presented the alternative solution and a 15% cost reduction with a 5% reduction over 3 years. The supply chain hyena was somewhat pleased but the engineer hyenas were annoyed. The redesign meant that the engineers would have to do a little work. Since neither of the hyenas were incentivized by 2M to make good decisions they sandbagged the whole thing.

Finally, 2M ordered one of the alternative assemblies to test, and several weeks later Swagelok delivered. Several weeks after that, the assembly was installed and ready to test. The engineer hyenas were having trouble getting a specific device on the assembly to work and called Swagelok to come help with the problem. I went to the 2M facility and met with the engineer hyena. They asked me how to make a 3rd party product on the Swagelok-built assembly work. The product was made by Brooks, and consolidated the function of 3 components on the previous version into one.

The best way to get a product to work is usually to contact the manufacturer of the product for the manual. Usually, I will just Google the product part number with ‘manual’ as the search terms and I’m well on my way to understanding. That is precisely what I did with the 2M engineer hyena, we discovered another component was necessary that would add 0.5% to the price of the assembly. 2M dropped the alternative design and continued with the original version.

Hyenas can’t make a company money; they only lose it. If one takes the time to project that if 2M’s entire engineering and supply chain works this way, and it does, then 2M could carve 20-30% off their materials bottom line by getting rid of or rehabilitating their hyenas. About a year later, I helped a 2M engineer Hyena with a problem in which I performed 6th grade math and read a product data sheet. Swagelok had previously used their own engineer hyena who wasn’t able to do this math to solve the problem, and 2M was dissatisfied.

Altogether both of these 2M cases involved dozens of hours of meetings, travel, and planning on both the part of Swagelok and 2M. What a waste! 2M has a horrible reputation and is a company held together by the adults that run it and infected with a tremendous number of adult-children. All of the adult-children make 2M a very unappealing place to work, and thus they will struggle to hire adults for any less than huge salaries to deal with the adult-children. All the wasted time, the burgeoning ranks of inefficient personnel, and the poor design practices means that 2M is fighting for 5% savings, when they could likely get that number to 50% with adults.

Any business system design is only as good as its ability to induce desirable behavioral outcomes from the adult-children. When designing any business system, the business designer should ask themselves: could I make this work if children were performing the duties? Because there are a huge number of adult-children loose in the wild out there.

Summary:

  • Business building is behavioral systems engineering.

  • Behavioral systems will have limited results because of the large number of adult-children that perform at minimal levels

  • The Equity model developed to retain employees is dilutive and difficult to manage.

  • The Genesis model involves not granting employees equity but instead developing them to leave after their term.

  • By default, adult-children pattern their behavior to avoid trouble without consideration of the effects of that behavior.

  • Corporations are fertile breeding grounds for new corporations.

  • Adult-children see their boss as a surrogate parent.




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