new business model ideas

[Quiet]

Been thinking abouth this for a while. Would love any imput and all criticism

Im trying to imagine a better business model. These ideas are radical and do impose a lot of restrictions on the liberties and growth of the business, but I dont personally see that as a negative thing in itself.
I understand that they may not be practical at this exact moment but nonetheless I think they are worth thinking about atleast.

1) cap growth of business to 300 employes

* I think businesses are too big and start growing a mind of their own when they get too big.
* If business size grows so that it exceeds 300 employess, a new business must be formed.

Negatives-
* Businesses may become very selective about who they employ and might become 'cliquey'- hiring just family and friends. I dont know how to reslove this but I think ultimately people will be valued by their skill, experience and effort
* It may be hard to create so many new business
* Some business' will be unable to operate using this model because of the nature of the business itself

2) every staff member has a representative share in the business- recieves a share of the profit and also gets a vote in major decisions. So basically everyone owns the business.

* Everyone has a right to be compensated fairly for their work. The more you put in- the more you get.
* This also increases personal responsibilty to the business and to other staff members.
Negatives-
* I dont know how this would fit in the current system of investments and shareholders

3) The highest paid staff members can only get a maximum of 10 times the possible salary of the lowest paid staff member

I hope this one is self explanatory. None one needs to be paid billions of dollars. For money to work effectively it needs to be circulated contstantly.
The pay discrepencies are outrageous at the moment. People work their ass off and sacrifice everything so they can feed their family. They may not have the greatest skills but if they are putting in the effort. Why should they be paid hardly enough to survive while their ceo earns their annual salary in a week.

 

[Sriracha]

There is no way that model would work. One company may have thousands of employees all ranging from the uneducated to the highly trained educated with obviously very different job descriptions. (Such as my husband's company and even father-in-law's company.)

The fallacy is that once someone has obtained their degree or specialized training that they will automatically be paid the top salary. This takes many years and a lot of hard work.

 

[the]

3) The highest paid staff members can only get a maximum of 10 times the possible salary of the lowest paid staff member

I hope this one is self explanatory. None one needs to be paid billions of dollars. For money to work effectively it needs to be circulated contstantly.
The pay discrepencies are outrageous at the moment. People work their ass off and sacrifice everything so they can feed their family. They may not have the greatest skills but if they are putting in the effort. Why should they be paid hardly enough to survive while their ceo earns their annual salary in a week.

I have been hearing this a lot lately and I think it is totally doable. Janitors and lever pullers and button pushers are essential to a companys earnings. I really like this idea.

The owner of a pet supplies store in my town makes $13 million off the store. The GM makes a little over $30,000. If you think that is how it should be you should be lynched.

 

[Quiet]

Thank you for the feedback. I appreciate all the imput. Really want to understand this more

 

[muir]

What about a voluntary association of workers?

Decisions could be made in regular workers councils in which everyone has a say in how things are run

Everyone recieves a fair share of the rewards without a capitalist boss skimming off the top

The difficulty is getting this to work in a capitalist system which ties us up in rules and regulations designed to maintain a coercive hierarchy business model

Here's a place in Spain operating in a similar way: http://en.wikipedia.org/wiki/Marinaleda

There are also transition towns: http://en.wikipedia.org/wiki/Transition_Towns

And Local Exchange Trading Systems: http://en.wikipedia.org/wiki/Local_exchange_trading_system

Where the government doesn't like what you are doing there is always the option of direct action but there are likely consequences to that

 

[Quiet]

What about a voluntary association of workers?

Decisions could be made in regular workers councils in which everyone has a say in how things are run

Everyone recieves a fair share of the rewards without a capitalist boss skimming off the top

The difficulty is getting this to work in a capitalist system which ties us up in rules and regulations designed to maintain a coercive hierarchy business model

Here's a place in Spain operating in a similar way: http://en.wikipedia.org/wiki/Marinaleda

There are also transition towns: http://en.wikipedia.org/wiki/Transition_Towns

And Local Exchange Trading Systems: http://en.wikipedia.org/wiki/Local_exchange_trading_system

Where the government doesn't like what you are doing there is always the option of direct action but there are likely consequences to that

Thanks for the links.
Transition towns sound awesome. would love to visit one and see it in practice
I'm vaguely familiar with LETs. It's amazing how well people can organise and negotiate amongst themselves when given the respect and opportunity to do so.

What do you think of the business model ideas, any suggestions?

I like the idea of volunteer association of workers and I'm sure that this could potentially work. I have dabbled with trade unions and the labor party but these organisations are often fraught with power plays and petty disputes. There is a very stong us against them attitude, irrational emotionalism and they are ill recieved by the majority of society. A lot of businesses wont hire someone that is affiliated with a union where I live. Go figure..

 

[InvisibleJim]

Business Model means Serious Business

 

[bickelz]

1) cap growth of business to 300 employes

* I think businesses are too big and start growing a mind of their own when they get too big.
* If business size grows so that it exceeds 300 employess, a new business must be formed.

Negatives-
* Businesses may become very selective about who they employ and might become 'cliquey'- hiring just family and friends. I dont know how to reslove this but I think ultimately people will be valued by their skill, experience and effort
* It may be hard to create so many new business
* Some business' will be unable to operate using this model because of the nature of the business itself

Why would you want to limit the amount of workers you can hire? In effect, you limit how much you can make. And of course businesses have a mind of their own, they're in for themselves; we all are.

Why 300?

2) every staff member has a representative share in the business- recieves a share of the profit and also gets a vote in major decisions. So basically everyone owns the business.

* Everyone has a right to be compensated fairly for their work. The more you put in- the more you get.
* This also increases personal responsibilty to the business and to other staff members.
Negatives-
* I dont know how this would fit in the current system of investments and shareholders

Many businesses do this already and have done it for a while. It's the exact reason why the first people that started working at Microsoft got super rich.

As far as your "right to be compensated fairly" line goes, people do not have a "right" to an sort of compensation. Your compensation should depend on what you produce, how much you produce and the quality of your production.

3) The highest paid staff members can only get a maximum of 10 times the possible salary of the lowest paid staff member

I hope this one is self explanatory. None one needs to be paid billions of dollars. For money to work effectively it needs to be circulated contstantly.
The pay discrepencies are outrageous at the moment. People work their ass off and sacrifice everything so they can feed their family. They may not have the greatest skills but if they are putting in the effort. Why should they be paid hardly enough to survive while their ceo earns their annual salary in a week.

The CEO is not as easily replaceable as a janitor. The CEO has a much higher skill set and him being good at his job allows for more lower level people being hired. Not to mention, capping pay in any way gives incentive only to work to a certain point. Remember, people work for their self-interests and if you limit the amount they can get out of something, their going to be less productive relative to where they would be if there was no cap. If this happened across the board, the economy would slow.

 

[the]

As far as your "right to be compensated fairly" line goes, people do not have a "right" to an sort of compensation. Your compensation should depend on what you produce, how much you produce and the quality of your production.

It sounds as if you are advocating slavery here. Which is fine, I just wanted some clairity.

The CEO is not as easily replaceable as a janitor. The CEO has a much higher skill set and him being good at his job allows for more lower level people being hired. Not to mention, capping pay in any way gives incentive only to work to a certain point. Remember, people work for their self-interests and if you limit the amount they can get out of something, their going to be less productive relative to where they would be if there was no cap. If this happened across the board, the economy would slow.

CEOs arent gods. The only reason many CEOs are in their positions is because they are born into a class of people with enough money for the right schools, and the right "culture" to get along with other CEOs ,politicians, etc to be able to "move and shake". Most people can run a business especially when they are surrounded by people trying to create success for the company.

I think a lot of people are suggesting a drastic change in culture when they are suggesting these employment changes. Which is good. But it will take time and is more something up an INFJs alley than a ISTJ like me.

---

I agree with your 300 cap comment.

 

[Quiet]

Why would you want to limit the amount of workers you can hire? In effect, you limit how much you can make. And of course businesses have a mind of their own, they're in for themselves; we all are.

Why 300?


Many businesses do this already and have done it for a while. It's the exact reason why the first people that started working at Microsoft got super rich.

As far as your "right to be compensated fairly" line goes, people do not have a "right" to an sort of compensation. Your compensation should depend on what you produce, how much you produce and the quality of your production.


The CEO is not as easily replaceable as a janitor. The CEO has a much higher skill set and him being good at his job allows for more lower level people being hired. Not to mention, capping pay in any way gives incentive only to work to a certain point. Remember, people work for their self-interests and if you limit the amount they can get out of something, their going to be less productive relative to where they would be if there was no cap. If this happened across the board, the economy would slow.

* I was thinking 300 was a number that allowed sufficient room for growth before the business becomes completely faceless but i'm not stuck on the number 300. I dont think people are all out for themselves. Some people are. The rest of them want to live a good, safe life and feed their families. I think if people had their basic needs met they wouldnt need to be that selfish. Currently our culture rewards people for being self serving but I dont think thats an innate thing. Fundamentaly humans are social beings that need to live in communities to survive, and thus the community's interest should be their interest also.

* People do have a right to be compensated fairly for their work- its a human right. And yes the compensation will depend on what you produce, how much you produce and the quality of your production. The harder you work, the more innovative you are, the more you get paid.

* Yes the CEO is not as easily replacable as the janitor. And a good CEO is very valuable. The harder the CEO works the more he gets paid as he has a representative share in the business' profit. If his janitors are getting compensated fairly they too will do a better job. Yes there are some people that are self-serving and purely motivated by money and having a cap may mean that they work less hard. I think the cap is reasonable though, I would even go as far as considering a cap of maximum 15 times more than the lowest paid worker. If the CEO wants to get paid more he needs to ensure that the lowest paid workers can be paid more and he can do this if he does his job properly.

Thanks for your imput

 

[Quiet]

It sounds as if you are advocating slavery here. Which is fine, I just wanted some clairity.



CEOs arent gods. The only reason many CEOs are in their positions is because they are born into a class of people with enough money for the right schools, and the right "culture" to get along with other CEOs ,politicians, etc to be able to "move and shake". Most people can run a business especially when they are surrounded by people trying to create success for the company.

I think a lot of people are suggesting a drastic change in culture when they are suggesting these employment changes. Which is good. But it will take time and is more something up an INFJs alley than a ISTJ like me.

---

I agree with your 300 cap comment.

Yes the majority of CEOs have been privellaged in some way and connected to the 'elite' circle- knew the right people, were in the right places at the right time, married the right person, made the right friends etc. There a lot of people that run a business successfully if given the opportunity. Some people can have a pride in and get off on running a successful business thats separate from seeing the business just as a tool to make a lot of money. I think there are many people that take pride in their work and that this pride is more fulfilling for them than money alone.

Having the imput of an ISTJ is vary valuable. Not to be totally type racist, but I see ISTJ's as having a mastery over efficiency, practicality, organisation and administration of the 'real' world that I lack.
I almost always run my ideas past my ISTJ friend in real life, she's brutally critical and perceptive.

 

[this is only temporary]

Oooo, I like this topic.

1) cap growth of business to 300 employes

Not sure this is pratical, and why 300? That seems like an arbitrary number. There is efficiency in scale, and the larger the pool of brainpower you have, the more likely you will be able to put together a team that is able to solve any problem. I am not sure it is the size that is the problem... rather, the structure. This is not intended to be a "final statement" -- I am just not sure about the size of a business being that crucial.

2) every staff member has a representative share in the business- recieves a share of the profit and also gets a vote in major decisions. So basically everyone owns the business.

This is a great idea, and as has been mentioned, is already being done; perhaps somewhat imperfectly. (see the Microsoft example) There are a lot of different Partnership structures which work well for many businesses. I will check out the links that have been offered. I think this is a brilliant idea; I will add it is not necessarily a new idea. I think people have been tweaking it for quite some time. I hope this concept grows and expands, and I think it will.

3) The highest paid staff members can only get a maximum of 10 times the possible salary of the lowest paid staff member

I also like this idea, however, I have some points I'd like to get your thoughts on.
1. Define "staff member". Someone's going to immediately start trying to reclassify people as "Not Really Staff" so that some people can get more or less compensation. It will happen, you watch and see, if you don't pay attention to your terms.
2. If I, the owner of a company, have invested my life savings to start a business, and taken tons of personal and professional risk, and worked 18-hour days for three years before even turning a profit, I am not sure I would be too happy knowing that a person who has taken no risk whatsoever, and whose main skill is knowing how to operate a broom, will basically be able to set my compensation. That would irk me. Sorry if anyone disagrees with me.
3. However, I relied heavily on other people's time and talent to make that company successful and did not see that they were fairly compensated, then that would just be a huge amount of greed, and ungrateful as well, wouldn't it?
4. However. I would not want anyone in my company who was not treated very well and who was personally invested in the company emotionally and financially. Creating a diverse and collaborative environment, where it is the rule that people are treated very well is absolutely crucial. I'd go so far as to say any company who wants to succeed has to do this whether thy like it or not. People are the most important part of any company.

CEOs arent gods. The only reason many CEOs are in their positions is because they are born into a class of people with enough money for the right schools, and the right "culture" to get along with other CEOs ,politicians, etc to be able to "move and shake". Most people can run a business especially when they are surrounded by people trying to create success for the company.

I agree with this statement. Also want to add that there is a fair amount of "luck" -- i.e., being in the right place at the right time, with the right economic conditions, involved for a CEO to be considered "one of the best". People tend to underestimate the effects of luck/random chance.

Another thing I would like to add, is that any company/partnership/whatever would do well to focus on education and what is called "developing talent" -- meaning that you've got good people working for you, treat them well and make them even more skilled. That is what we call a win-win situation. In companies, there is too much rigidity in how people are viewed -- there is a mindset of "once a secretary, always a secretary" and I think that is a huge mistake, it is horribly unfair, and it overlooks the fact that people are constantly growing and changing and getting experience and skills and forging relationships, and that these things are valuable.

I've worked in a lot of different environments, and the highly competitive ones that encourage rigidity and lack of empathy -- well, they got bought or failed.

Meh, those are my thoughts, for what they are worth, and I do like the idea of thinking how we could improve the way things are run.

 

[This]

I don't want my employees owning any part of my business, they didn't invest nearly the same amount of risk. They are of course free to go off and start their own company. Go, go capitalism.

 

[the]

The risk that business owners have to take in order to start a business is so exaggerated. The risk is: are you savvy enough to run a business? If you are it turns out there was no risk. If you arent then your business fails and there was risk. The risk is dependant on your own brain and can be mitigated by simply knowing about yourself and whatever it is you are selling.

 

[this is only temporary]

That depends very much what kind of business you are talking about.

Maybe the risk can be exaggerated... I mean, starting a lawn care company is neither terribly expensive (relatively speaking) nor terribly risky. I'm sure I could start a cake decorating business and emerge unscathed, and maybe even make money. (I think... unless the icing machine broke or something... I don't know...)

But starting a business can be very risky indeed, businesses fail all the time for a number of reasons. More businesses fail than succeed. Ideas get stolen, inventions don't work, the FDA (as an example) won't approve things you've spent decades developing .... enterpreneurs can pour their life savings into an idea and work harder than any ordinary "employee" would ever dream of working, and get nothing at all in return, and possibly ruin their health and relationships in the process. Just look at all the failed businesses out there.

I think the best thing is to run a company or farm or group in such a way that the whole system maintains everyone who contributes to it in prosperity and health, rather than squeezing every last cent of profit out of it. Those kinds of enterprises are the ones that work best in the long one.

 

[this is only temporary]

This guy:

http://bobsutton.typepad.com/my_weblog/2006/08/decide_to_do_so.html

Is a genius when it comes to organizational psychology and enterpreneurship. He wrote that article about enterpreneurship and risk.
And yes, his ideas would probably also apply to new organizational structures.

 

[muir]

You could set up a cooperative: http://en.wikipedia.org/wiki/Cooperatives

Some people have mentioned risk and how rewards should be allocated. I once read a book called 'the 4 hour working week'. the guy who wrote it was good at thinking outside the box. He said there is positive stress and negative stress. Negative stress is the kind where you are worried all the time which can even affect your health. Positive stress or 'ustress' as he called it is the kind where you are excited and enthused. Taking on risk can give rewards but it can also end up as a poisoned chalice depending on the success or failure of the venture.

From my work experiences i've found that i like: autonomy, problem solving and personal freedom; I'm willing to take on more risk to ahcieve this and am doing so in my working life (setting up what is essentially a voluntary association of workers) so all this is poignant to me at the minute as i'm aware that most start up businesses fail in their first year: http://www.businesslink.gov.uk/bdotg/action/layer?topicId=1073858805 )

Anyway the point i'm getting at is the balance people get between: work (more money) v's time off or work v's having more energy when you're not working and risk v's security etc is gonna depend on the individual and what they want to prioritise in their life

I don't think making money is everything; contributing somthing to society and feeling good about what you do has got to count for something

If you have money to invest there is also the option of microfinancing although this can be open to abuse for example with excessive interest rates. If done in the right spirit it could have potential for rasing standards of living for people: http://en.wikipedia.org/wiki/Microfinance

Another investment could be made in regenerating something which can be sold on so that the money can be re-invested for example the National Trust for Scotlands 'Little Houses Scheme' which renovates old buildings and sells them on: http://www.nts.org.uk/conserve/buildings_lhis.php

 

[Quiet]

Oooo, I like this topic.



Not sure this is pratical, and why 300? That seems like an arbitrary number. There is efficiency in scale, and the larger the pool of brainpower you have, the more likely you will be able to put together a team that is able to solve any problem. I am not sure it is the size that is the problem... rather, the structure. This is not intended to be a "final statement" -- I am just not sure about the size of a business being that crucial.



This is a great idea, and as has been mentioned, is already being done; perhaps somewhat imperfectly. (see the Microsoft example) There are a lot of different Partnership structures which work well for many businesses. I will check out the links that have been offered. I think this is a brilliant idea; I will add it is not necessarily a new idea. I think people have been tweaking it for quite some time. I hope this concept grows and expands, and I think it will.


I also like this idea, however, I have some points I'd like to get your thoughts on.
1. Define "staff member". Someone's going to immediately start trying to reclassify people as "Not Really Staff" so that some people can get more or less compensation. It will happen, you watch and see, if you don't pay attention to your terms.
2. If I, the owner of a company, have invested my life savings to start a business, and taken tons of personal and professional risk, and worked 18-hour days for three years before even turning a profit, I am not sure I would be too happy knowing that a person who has taken no risk whatsoever, and whose main skill is knowing how to operate a broom, will basically be able to set my compensation. That would irk me. Sorry if anyone disagrees with me.
3. However, I relied heavily on other people's time and talent to make that company successful and did not see that they were fairly compensated, then that would just be a huge amount of greed, and ungrateful as well, wouldn't it?
4. However. I would not want anyone in my company who was not treated very well and who was personally invested in the company emotionally and financially. Creating a diverse and collaborative environment, where it is the rule that people are treated very well is absolutely crucial. I'd go so far as to say any company who wants to succeed has to do this whether thy like it or not. People are the most important part of any company.



I agree with this statement. Also want to add that there is a fair amount of "luck" -- i.e., being in the right place at the right time, with the right economic conditions, involved for a CEO to be considered "one of the best". People tend to underestimate the effects of luck/random chance.

Another thing I would like to add, is that any company/partnership/whatever would do well to focus on education and what is called "developing talent" -- meaning that you've got good people working for you, treat them well and make them even more skilled. That is what we call a win-win situation. In companies, there is too much rigidity in how people are viewed -- there is a mindset of "once a secretary, always a secretary" and I think that is a huge mistake, it is horribly unfair, and it overlooks the fact that people are constantly growing and changing and getting experience and skills and forging relationships, and that these things are valuable.

I've worked in a lot of different environments, and the highly competitive ones that encourage rigidity and lack of empathy -- well, they got bought or failed.

Meh, those are my thoughts, for what they are worth, and I do like the idea of thinking how we could improve the way things are run.

Thank you for your imput.

Yes 300 is an arbitary number and could be revised. I just think that a lot of business' are too large. Unsustainable growth is a bad thing, like a cancer. So restricting growth would mean the death of large corporations, lots more business' in general and way more competion. This would mean that people can really start to 'specailise' in their career and in their business', and that consumers will probably buy more things locally rather than from global corporations. Yes, you're right the structure is more important than the size.

1) It is hard to define a staff member and I have not yet been succesful in doing so. Ive been thinking about that a lot. Can you think of any appropriate definitions?
Then theres the modes of employment- full-time, part-time, casual staff and contractors to consider as well. People will definately try and abuse this if they are so inclined. I think the only way to stop this would be to encourage a better culture in the work environment, where business are rewarded and honoured for their fairness and integrity, not just their bottom line. Maybe people wouldnt want to work for an asshole company anymore, and just pool their money together and start their own business where things are fairer. Im sure competition would increase with this model.
2)Yes you're right. It would feel unfair for the owner. But if the owner's idea is truly innovative and he/she work their ass off that means that the business has a better chance of succeeding anyway. Having the idea and innovation in itself is useless and unrealised until its brought to life by the efforts of labour. Starting a business has always been a risky thing, most business' fail. Having all your staff intrinscially committed to the success of your business can only be a good thing as they will work a lot harder for you. Sometimes a janitor's ideas and imput can be just as valuable as the CEO's. There are a lot of brilliant people out there with unrealised potential, that simply have not had the opportunity to shine, are content and humble with their lives, or dont want to deal with high pressure environments enough to be a CEO.
3 and 4) Yes. Without the people you have nothing. Just an idea and an empty building. All were talking about is fairness for everyone, as opposed to over the top discrepancies between rich and poor.
All these massive discrepencies are just leading us to a future with gated communities. Now thats no fun for anyone.

Yes highly competitive environemnts do not work for everyone. Basic psychology- positive reinforcement trumps everything else.

*Sorry for the messy format and requoting whole quotes. Havent worked out how to split quotes up yet

 

[Quiet]

I don't want my employees owning any part of my business, they didn't invest nearly the same amount of risk. They are of course free to go off and start their own company. Go, go capitalism.

I hope that is what would happen. People would just try and start their own business and compete with you, or alternatively seek employment where conditions are more lucrative for them. Either way, its more competition and a constant drive towards progress and bettering work environments and conditions. In some ways that is true capitalism.

 

[Quiet]

You could set up a cooperative: http://en.wikipedia.org/wiki/Cooperatives

Some people have mentioned risk and how rewards should be allocated. I once read a book called 'the 4 hour working week'. the guy who wrote it was good at thinking outside the box. He said there is positive stress and negative stress. Negative stress is the kind where you are worried all the time which can even affect your health. Positive stress or 'ustress' as he called it is the kind where you are excited and enthused. Taking on risk can give rewards but it can also end up as a poisoned chalice depending on the success or failure of the venture.

From my work experiences i've found that i like: autonomy, problem solving and personal freedom; I'm willing to take on more risk to ahcieve this and am doing so in my working life (setting up what is essentially a voluntary association of workers) so all this is poignant to me at the minute as i'm aware that most start up businesses fail in their first year: http://www.businesslink.gov.uk/bdotg/action/layer?topicId=1073858805 )

Anyway the point i'm getting at is the balance people get between: work (more money) v's time off or work v's having more energy when you're not working and risk v's security etc is gonna depend on the individual and what they want to prioritise in their life

I don't think making money is everything; contributing somthing to society and feeling good about what you do has got to count for something

If you have money to invest there is also the option of microfinancing although this can be open to abuse for example with excessive interest rates. If done in the right spirit it could have potential for rasing standards of living for people: http://en.wikipedia.org/wiki/Microfinance

Another investment could be made in regenerating something which can be sold on so that the money can be re-invested for example the National Trust for Scotlands 'Little Houses Scheme' which renovates old buildings and sells them on: http://www.nts.org.uk/conserve/buildings_lhis.php

Yes work/life balance is far more important to most people than money. Rather than spending a life time earning money to get to the life part it would be better to be able to incorporate the two.

What really need to invent is free power- as in nuclear fission, perpetual motion, something, and to mechanise a lot of menial labour. Then a lot of what we are currently working to pay for for will already be free and we'll have more time for life and contributing to commmunity in the ways that we feel most passionately about.