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I wonder if one if the prime drivers for entrepreneurship is bad management.  I have to think that bad management pushes a lot of capable people out of their day jobs, and those people go on to become entrepreneurs.

Imagine a world where managers always recognized and rewarded their most capable people. It would be hard for a rational employee to leave a great job for a ten percent chance of creating something even greater. But leaving a boss who is Satan's learning-challenged little brother is relatively easy.  And if the general economy isn't serving up wonderful job opportunities at other companies (thanks in part to bad management) then you can see why people gravitate toward starting their own companies.

You can thank The Dilbert Principle for some of this entrepreneurial zest.  The Dilbert Principle observes that in the modern economy, the least capable people are promoted to management because companies need their smartest people to do the useful work. It's hard to design software, but relatively easy to run staff meetings. This creates a situation where you have more geniuses reporting to morons than at any time in history. In that sort of environment you'd expect the geniuses to be looking for a way out, even if Plan B has a low chance of success.

I've never seen a statistic on the number of companies that were started while an employee "borrowed" resources, from his day job, mostly in the form of time and Internet access, but I'll bet it's a big number.

Big companies with bad managers are the ideal breeding ground for entrepreneurs. Employees are exposed to a wide variety of business disciplines, and can avail themselves of excellent company-paid training and outside education. When you add broad skill development to the inevitability of eventually getting a moron for a boss, thanks to frequent internal reorganizations, it's no wonder that big companies spray entrepreneurs into the environment like the fountains at Bellagio.

 
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Feb 17, 2010
I've seen a variant on the Dilbert principle many times: Competent hardware/software people are too valuable in their roles to be promoted so they get stuck there forever. Talentless engineers on the other hand have a choice: stay and be exposed by their capable peers or seek promotion into management. Since the former offers nothing but exposure and probable humiliation they generally choose the latter.
 
 
Dec 1, 2009
The government is the ultimate bad manager. Government pays too well to too many for the government employees to give up security and insurance to quit and to move on to somethihgn better.....

I met Morry Taylor when he was running for President in the NH Primary and if I remember right he had a plan to fire a third of the government employees and pay them for two or three years because he believed they were good people and they would take the money and do something way better than what they were doing for the government. Way better was starting businesses and making other businesses even better that pay taxes and contribute to a better country and get rid of our national debt.
 
 
Nov 30, 2009
Promoted out of danger...

for those people that are too dangerous to be left in their current role, though incompetence or whatever. The best answer has always been to promote them to a level where the decisions they make get soo muted passing through the adminishpere that they have no impact.

look at all middle management, for any decision they make there is a committy, board, what ever you call them. Its their job to interperate what the hell the domented chicken headed moron actually needs doing and then to decide to send him on a "training seminar" in the carabian to keep him out the way...
 
 
0 Rank Up Rank Down
Nov 30, 2009
when the Harvard bissniss school grads started running us everything whet to hell. they are thout that managing is managing and the what is of no importance.
 
 
0 Rank Up Rank Down
Nov 30, 2009
… of new of companies die. taking all the time and money with them. most of the people now called entrepreneurs take other peoples money and make nothing new. come to think of it thats what the old timers did to/
 
 
+2 Rank Up Rank Down
Nov 29, 2009
I have a question regarding this direction as it pertains to the Dilbert story line. I have noticed recently that the level of overt hostility and contempt of managment (e.g. PHB, Catbert, Dogbert sometimes, etc.) towards the workers (Wally, Alice, Dilbert, etc.) has escalated sharply. PHB et. al. are not longer even pretending to be cordial to the peons they rule. I presume this is meant to mirror the fact that companies feel they totally have the upper hand because of the bad economy and do not even need to waste time and energy on fake !$%*!$%*!$%*! per the above premise regarding management at large companies breeding enterpreneurs, this could go in one of two directions. On one hand, the increased level of workplace toxicitiy could lead to more smart worker bees than ever decided that they have had enough of working for morons and striking out on their own. On the other hand, the brutal economic environment could cancel that out and then some, leading to the peons being more fearful than ever and more desperate than ever to cling to the 9 to 5 jobs they do have, thus allowing management to consolidate its already significant power like never before. This of course, will lead to management being more ruthless and cruel than ever, knowing that there is nothing that the helpless peons in their grasp can do for now. Which one do you thinks is true ? If so, can we expect this fork in the road to be reflected in future Dilbert strips ?
 
 
Nov 28, 2009
It's bad management that causes most of the problems in the business world.. But interpersonal communication is a very different skill than building complex things - it is equally essential to getting those things built and sold. The trick to having good management is to see who from the technical staff are really contributing to the organization - and seeing that they have the resources to contribute with minimal interference....

So what is a good manager? Someone who can build the product, but is better with people than with product. Someone who knows which tradeoffs are needed, and who will fight for the needs of his/her staff when needed. This manager will sacrifice himself/herself for his/her staff - something very rare in today's climate of greed.

However, a good manager is not always a person you'd want to work for. Sometimes, the needs of the company are in direct conflict with the employees. What should a good manager do? If you're an employee, you wouldn't want to work for this manager because his needs are not your needs. He works to service the firm, not you. So you'll either have to manage your role in the conflict - or bail out before you are sacrificed by the firm.

And in the end, what happens to the employees who are forced out, or bail out on their own? There are no longer enough jobs in our economy to support those people looking for work.. So what's left - running your own business, and hoping for the best. This is the most stressful path for many - as most of us don't have many creative ideas worth acting on. But for those who do have great ideas - being forced to start your own business is a blessing.....
 
 
+1 Rank Up Rank Down
Nov 27, 2009
I've been an entrepreneur since the age of 12. It had nothing to do with bad management, just that I wanted money to buy rollerskates (oops, showing my age!) and Mom and Dad wouldn't just hand it over. I was too young to get a regular job, so I created one. Every time I've tried to work a regular job ever since, I've gotten frustrated and gone back to running my own business.

So is this bad management, or just an entrepreneurial mindset that determines that any management at all is bad?
 
 
Nov 27, 2009
As Deming said "Over 90% of the problem lies with the system not the people" The system produces bad managers? If so, the system needs to be changed. One would think that for an individual organisation having "Bad" managers would be a negative thing, but if we assume entrepreneurship is a good thing, in a global sense, not so much.

The really interesting thing is that being motivated to become an entrepreneur through avoiding being managed badly, and actually being successful at it, will ultimately just produce another organisation that over time will produce bad managers, the very thing you left to avoid. If you are a really good entrepreneur, you will of course have left and be on to the next startup before you see the true evidence of your folly.
 
 
Nov 26, 2009
... but you know that good managers are hard to come by. Especially because of the Dilbert Principle.

And, I quit my last job mainly because of poor management and a vulgar short-term profit oriented mentality.
Now I work in a flat team, in that there is no one manager, we all get to manage the team. This model does not work for everyone, but it does wonders when applied correctly.
 
 
Nov 26, 2009
Great post, but it hits a little too close to home right now! I'm not a genius, but the management at my company is definitely intellectually impaired right now. Hard to leave the relative safety of this mess when I look at the economy, but blog posts like this one are helping me get closer. Thanks!
 
 
-1 Rank Up Rank Down
Nov 26, 2009
"According to a news letter that my mom the teacher once got, the National Education Association's stated goal is "to produce a productive work force", "

Lol, I wish that it did that. If people received their education specifically from their employer, how much time would pass before big corporations that had tons of working students on their payroll demanded colleges come out with cheaper, simpler, more career specific degree plans? What we have now is a complete abomination. As time goes on, employers are starting to value experience more than college credits. Yes, you still need the degree to get in the door, but it's hard finding a job straight out of college and your real earning doesn't begin until 5 years or more in the workforce. The degree is quickly becoming the "See, I'm at leas competent enough to attend classes for four years" tag that gets you into club "chance to be successful." College itself is adding less and less value every year as it becomes more and more expensive. Even if you do get a degree in a major that does actually require you to learn something useful in college, odds are you'll still waste much of your life in classes added on purely to increase revenue per student for the colleges.
 
 
-2 Rank Up Rank Down
Nov 26, 2009
"I would argue that it is the job of the individual to make themselves the masters of their own destiny."

I never suggested that it wasn't. I was just saying that we pay colleges to provide us with a pretty specific service, that we don't seem to be receiving from it.

"As to "wasting" time learning Shakespeare and anatomy, I would encourage people to consider the educational systems of other nations that do not follow the western model of wide exposure. In Poland, the Ukraine, and Russia, I'm told, students all receive the same basic education until the ninth grade, at which point they decide if they want to have a professional career or a trade, and they pick and move into a stream. So if you know you want to be a lawyer, there is not point in sending to you machine shop. No point in teaching latin to greasemonkeys.

While on the surface this seems like a good idea, consider that one of the by products was creating a worker's paradise, aka a Communist state."

Here you are basically agreeing with me, but then you slip in the strange reference to communism. I would hardly call the school systems in those countries ideal, or describe them in the way that you have, though. I've known people who have gone through that school system, and I would say they learn as much unnecessary information as anybody.

"Shakespeare teaches you to try and understand things that are just beyond your grasp. To try and appreciate and comprehend the customs and ideas of another group that is not completely familiar to you. To think about things in something other than a linear way. This is infinately useful in a global world. "

That's not really a lesson so much as a platitude. I think that we all try to understand things that are just beyond our grasp already. I was familiar with the concept of comprehending the customs and ideas of another group that is not completely familiar to me by kindergarten. You learn more in the real world than you do in college (when it comes to the squishy stuff that everyone ironically argues is what college is for).

"Frankly, if you're only making $15,000 a year, you're likely living your parent's basement, mocking the griping of those that provide for you, so that you have time to waste complaining, and not be out on the streets looking for a higher paying job. I'm not sure any kind of an education is a benefit to someone with no ambition. "

Nope, been living on my own and going to school for years.
 
 
Nov 26, 2009
There is a cycle to these things. Group of engineers or other competent folk set up a company to do great things. Company does well. Company goes public. Company is bought out by larger corporation or in a leveraged buyout and big tax breaks are gained because there is lots of interest to be paid. Bright people are laid off. Some may start their own company, if they can get the money. What if the tax code favored this last par? What if it was more profitable for corporations to spinoff enterprises than to layoff workers? Seems to me that would drive innovation and boost employment.
 
 
Nov 26, 2009
I would argue that it is the job of the individual to make themselves the masters of their own destiny. Once you give up responsibility for your future you are asking someone else to choose it for you, which is basically Communism. It is the job/duty of an educating body to provide the individual with the information to pursue said destiny. It is the responsibility of the individual to ensure they are receiving said information. Caveat emptor.

As to "wasting" time learning Shakespeare and anatomy, I would encourage people to consider the educational systems of other nations that do not follow the western model of wide exposure. In Poland, the Ukraine, and Russia, I'm told, students all receive the same basic education until the ninth grade, at which point they decide if they want to have a professional career or a trade, and they pick and move into a stream. So if you know you want to be a lawyer, there is not point in sending to you machine shop. No point in teaching latin to greasemonkeys.

While on the surface this seems like a good idea, consider that one of the by products was creating a worker's paradise, aka a Communist state.

Shakespeare teaches you to try and understand things that are just beyond your grasp. To try and appreciate and comprehend the customs and ideas of another group that is not completely familiar to you. To think about things in something other than a linear way. This is infinately useful in a global world.

As for anatomy, ask any new parent if they wish their child could tell them exactly what hurts.

Frankly, if you're only making $15,000 a year, you're likely living your parent's basement, mocking the griping of those that provide for you, so that you have time to waste complaining, and not be out on the streets looking for a higher paying job. I'm not sure any kind of an education is a benefit to someone with no ambition.
 
 
Nov 26, 2009
tkwelge said
"College's job is to take low level, unskilled workers and make them into masters of their own destiny."
According to a news letter that my mom the teacher once got, the National Education Association's stated goal is "to produce a productive work force", in otherwords, compliant drones. Following your muse is the last thing that national educators want you to do.
 
 
Nov 26, 2009
I think you are right, even though i work analog, not digital. That is, I'm a wood worker.. I had three companies fold over my head, bad management. First the boss says "Next year we will be Number One in the industry..."

I didn't take any resources from work, unless you count creative dumpster diving. But management is unbelievably lame in this country. The whole middle class is ossified. I make musical instruments and have created more new designs in my converted garage than the majors have since the Vietnam War. Pathetic.

And i have to undercut the Chinese on price. But it can be done. I had no government or financial aid, except unemployment from my last job. Went to try for a government grant, and they offered to help me spent six months "creating a business plan" I told them i had a plan, "Buy some wood, make guitars, put them on eBAy, sell them, buy more wood."

They looked at me like i was a three headed Martian hillbilly. So, i bought some wood...
 
 
Nov 26, 2009
It's interesting that you assume that it's the capable people who are leaving to become entrepeneurs.

Somehow, these capable entreprenuers become the pointy-haired bosses in their new firms, or at least have an affinity for hiring them, thus perpetuating the cycle.

Or perhaps it isn't the capable who leave, but those bull-headed folks who no one can get along with, unless they are paid to. That would fit the data better.

(For the record, the company I work for was founded by 3 guys who quit and sold their services back to the company that they came from (at "Consutant" rates, of course).and expanded their client- and employee-base over time. Not a PHB in the group (although there are signs that some middle-managers might be turning into one, rather like how fungus grows.)
 
 
-5 Rank Up Rank Down
Nov 25, 2009
Entrepreneurship depends on the factors standing in people's way. If people could be their own boss and be individually productive, they would most likely work for less than a company would pay them anyway. Nobody puts more hurdles in front of someone trying to start a business and make money than the government. Why do we tell people they can't be productive? As a young person, I will say that the most frightening thing you face is the sheer archaic, traditionalistic, credentialist barriers to productivity that will hold you down.

ME "Can I make money now!?!?!"

SOCIETY:"No, now you must learn shakespeare."

ME:"Then can I make money?"

SOCIETY: "No, then we need you to learn anatomy."

ME: "I'm going into accounting."

Society:"I don't see how that's relevant to this conversation."

ME: "Can I start a business then?"

Society: "Well, yes in theory, but you would need to work around licenses, permits, zoning laws, and myriad of government BS (lobbied for by the older people who are already rich, so they don't care about you or want your competition) meant to let you know who's REALLY in charge now.
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I'm sorry, but college should be streamlined and simplified (which would make it cheaper as well as faster) and starting a business needs to be as easy as getting a credit card. Why is no politician talking about making it EASIER to be productive? And don't give me that BS about college being about proving yourself and becoming a well rounded individual. That may have meant something when college was three grand a year, but now that it's twenty five grand a year, SHUT UP! The entry level job market and the real world will give you a much better opportunity to prove something of yourself. College's job is to take low level, unskilled workers and make them into masters of their own destiny. Explain to me how college does this now? There is nothing more depressing than going to college nowadays. I'm always confused when my parents and other old people talk about college as if it was "so much fun" and "a great opportunity" or "the best time of my life." Meanwhile, me and everyone else I know who is enrolled in college is pulling out their hair and screaming, "Why the F am I here?!?!?!? Why are we all wasting time and energy and MONEY like this? WTF!!!!?!?!?! Why can't my employer just train me or send me to the classes he/she thinks are important?" Then when you do graduate, you spend your life walking around from potential employer to potential employer begging, "Will you hire me? I'm in a lot of debt. Please!!?!?!" Thanks for the great world you handed us! Thanks for nothing!

 
 
-5 Rank Up Rank Down
Nov 25, 2009
"I wonder if there is more "entrepreneurial zest" in Canada than the US?

It would certainly be easier to attract good people away from big companies and to your start-up if health care costs were on a level playing field."

Wow, so we're back to the whole, "Without national healthcare, people are trapped in jobs!" argument. First of all, you're assuming that people who work in big corporation receive better healthcare than anybody else. This may be true if you have a chronic condition that would make getting your own insurance incredibly expensive, but for the vast majority of us, healthcare costs basically the same thing whether you are getting it yourself or from an employer, as the insurance your employer offers would have just been offered to you as salary otherwise. Benefits are just another form of salary. Why do people act like health benefits are something only a big corporation can provide? You make it sound like being in charge of your own healthcare is inherently awful. Unless you have some serious preexisting condition, healthcare will cost exactly the same whether you buy it yourself or have your employer take it out of your salary.

Also, you're ignoring the fact that in the US companies don't have any obligation to offer health benefits, and many don't. For most, starting one's own business is a step up even if you include the factor of healthcare. If you are making over 40 grand a year, how can you possibly complain about lack of cheap healthcare? I make fifteen grand a year, and I love listening to middle aged losers who make sixty grand a year and live in a 200,000 house complain about "the recession" and "health care costs." It's all such an fing joke to me. What you people really want is a great lifestyle just handed to you. Everyone complains about welfare kings, and lazy young folk, but to me the middle aged middle class of the US is the most wasteful, useless, whining, annoying group of people ever to walk this earth.
 
 
 
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