The Hagakure #62: Where There’s a Will, There’s a Way

On the paradigm shift that hasn't happened. Yet.

Guess I have more things to get off my chest. So here’s a random Hagakure for you. 📥

Hope it gets you thinking. And if it does, I’d love if you click ❤️ and shared your thinking in the comments. 🧠

Back in 2019, Shopify co-founder and CEO Tobi Lütke used to talk about business and organizational efficiency in an interesting way. Here’s how I understood it, and I’ll tell you why it matters.

Imagine you’re analyzing a high-level, professional tennis match frame by frame. You’ll find that everything is pretty much choreographed, nearly perfect. At that level, every play is at least 80-90% efficient. Obviously, in the lower rungs, that number decreases.

Now imagine you could do the same for a company. Have a recording, freeze-frame it, and analyze it. Every keystroke, every message written, every meeting, every thought, every decision… made by everyone. Assuming you could do such analysis, what would be the efficiency of it all?

5%, Tobi asks? Certainly low. Very low.

You are probably questioning whether this is a fair comparison. It’s not. Companies are not tennis. Although I would argue both tennis and business are highly complex, tennis does have a predefined and well known ruleset; every point starts the same way; we can easily tell who won and who lost; and it’s only two players going back and forth. It’s a finite game, not an infinite game.

But if you zoom out and truly look at it as a system, the low % of efficiency in companies is glaring, albeit very hard to measure. And as Tobi points out, the company that goes from 5% to, say, 7% is still—at scale—significantly outperforming. In fact, he claims that in a few years we’ll probably look back and wonder “how the hell did we even run companies this way back then?”

Why would you build a company that is like every other?

Yes, on the surface every company is unique: different people, different mission, different goals, different rituals, different culture. Go deeper and you quickly realize that the vast majority of startups and scaleups are exactly the same, running some variation of:

• Centralized budget

• Hierarchical organizational structure (i.e. boxes and arrows, reporting lines)

• Lengthy planning processes, and objective definition (e.g. OKRs)

• Performance reviews (and often calibrations) based on some career ladder leading to compensation review.

• Spending and holiday approvals.

• Learning & development programs.

• Large number of recurring meetings to assess status, progress, etc.

Photo by StellrWeb on Unsplash

This has become as transparent as water is to a fish. We can’t imagine anything else, discarding the alternatives as pipe dreams detached from common sense and reality. We don’t realize that it goes way back—more than a century—and it has worked wonderfully for a long time, allowing us to get here. But “here, now” is very different from “there, then.”

It seems like we didn’t get the memo.

In fact, the long-ingrained habit of seeking “efficiency” (rather than learning, creativity and innovation) by means of standardization and control brought us to a place where, according to Embroker, 90% of startups fail overall. Interestingly, 70% of the startups fail between years 2 and 5. That’s a lot.

According to the same source:

• 42% fail due to misreading market demand

• 29% fail due to running out of money

• 23% due to a weak founding team

• 19% due to being beat by competition

Perhaps I’m imagining things, but when I read these my brain sees a pattern: the vast majority of startups fail because they don’t learn fast enough:

• If you misread the market, you can pivot to something else that might work.

• You run out of money when you can’t find what works fast enough.

• You are only a weak founding team if you don’t get smart, fast—or implode through infighting.

• You are dead in the water if the competition figures things out and execute faster than you do.

Tautologies, maybe.

Yet here we are, in a world where employee engagement is very low¹ and mental health issues are rampant². Where two in five workers are at high risk of burnout, prompted by longer hours, more demanding workloads and conflicts in work-life balance. Where 42% of tech workers who are facing high levels of burnout are considering quitting their company in the next six months. And where 62% of tech professionals report being "physically and emotionally drained".³

It’s not just cold data—I personally know multiple stories of good people being hollowed out by the status quo, myself included. I’m sure you do, too.

Isn’t this in some sense the opposite of efficiency? If we were efficient, we wouldn’t have to bring our work home or fret so much over it.

Is this really the best we can muster?

Did we really reach the “end of management”⁴ and this is just the price to pay for building the next incremental e-commerce business? We can easily brush all this aside as “that’s just how these things are.” I don’t buy that. If I did, I wouldn’t be a believer in the ingenuity of the human race, and I actually happen to be. 

It seems evident to me that while harnessing a lot more of the collective intelligence of humans working together does not guarantee success, it certainly increases its chances—massively. As I like to say, I’d rather play with aces than with a seven-two offsuit and hope to get lucky.

So, could it be that where everybody is seeking technological innovation, it’s management innovation that is also sorely needed? Could it be that if we stop relying on old outdated systems, explicitly designed for conformity and control, that people will actually more often do what leads to previously unimaginable businesses—without losing their minds in the process?

Photo by Evie S. on Unsplash

I know it sounds almost preposterous. Too good to be true. If not this, then what? What are you talking about?

And the classic, “oh, but that can’t work here!”

The first question is not whether it works or not. We can get to that in due time. As with any change, first you must want it enough. You have to care.

The pain of staying the same must be bigger than the pain of changing.

One of the reasons I became a leadership coach is to work with leaders who care and want it bad enough, then help them take the steps that they know in their hearts they want to take. To become aware, to think differently, and act accordingly. Even when it’s hard. Especially when it’s hard.

That’s what paradigm shifts require.

And as history has proven over and over again, where there’s a will, there’s a way.

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Until next week, have a good one! 🙏

1. https://www.gallup.com/394373/indicator-employee-engagement.aspx

2. https://www.gallup.com/workplace/288539/employee-burnout-biggest-myth.aspx

3. https://www.zdnet.com/article/tech-workers-face-a-burnout-crisis-unless-employers-act-now/

4. An allusion to Francis Fukuyama’s thesis of the “end of history”.