February 2015 – Paul Golightly

Are Your Taxes Too High?

Many business owners and investors stand squarely on the side of tax cuts. Their belief is that taxes are too high and should be reduced to encourage economic activity. And yet many of them fail to apply the argument to their own nations.

“Wait–taxes?” you say. “I don’t levy taxes.”

With the invention of capitalism, economists re-branded feudal taxation as “harvesting excess value.” But wages can also be seen as a reverse tax on the value produced by workers: where a feudal lord might take a certain amount or percentage, the capitalist allows an employee to keep a certain amount.

This reverse tax was an important invention when capitalism was conceived. It allowed people who didn’t create revenue directly (in the form of crops, manufactured goods, etc.) to create new kinds of value, particularly value that could only be created in concert with other specialists. In turn, workers were given a stable wage and economic and seasonal fluctuations were (in theory) absorbed by the capitalist. So a business became a kind of micro-socialist system within the larger context of capitalism.

Employees are, by and large, grateful for this micro-socialism: generally speaking, employees prefer to have stable paychecks, benefits, and job security–and if they don’t, they can always start their own businesses. But trying to squeeze every cost-saving measure you can out of your employees can be counter-productive, in the same way that increasing taxes can be counter-productive when there aren’t meaningful benefits to match.

While many entrepreneurs face the problem of not paying themselves enough, there are some who pay themselves far too much. And as the size of the company slides upward, owners and executives tend more and more frequently to be out of touch with how much they are taxing their employees–and the cost to their businesses.

This brings up two relevant issues from the world of economics and policy:

What is the appropriate level of taxation to maximize revenue?
What social programs are meaningful enough to justify taxation?

The appropriate level of taxation to maximize revenue follows what is known as the Laffer Curve (although the idea goes back to Arthur Pigou). The basic idea is that tax revenues at 0% and tax revenues at 100% are both zero (which is not entirely accurate, but close enough to be useful). That means that somewhere in between 0% and 100%, there’s a point at which you would receive less revenue if you either increased or decreased taxes, because increasing taxes would discourage revenue-earning activity and decreasing taxes wouldn’t result in substantively more revenue-earning activity.

The second question belies the fact that the peak of the curve can be shifted by many variables–and in fact is always shifting. One of the ways you can create a positive shift–that is, justify increased taxes while also increasing tax revenue–is by implementing meaningful social programs. In the politics, these social programs can be controversial, but in the operation of a business, they are relatively standard: health benefits, flexible hours, etc. They generally fall under the HR umbrella, but can also fit into support departments like printing, IT, and so on.

By this point you may be thinking this over-complicates the issue. The conventional wisdom is that labor is labor, and you compensate people based on the work they do and how well they do it–a simple transaction of value for money.

However, conventional economics has this one wrong. The emerging field of behavioral economics recognizes that not just incentives and disincentives, but context, internal motivations, values, ethics, biases, and other factors affect behavior. When you hire someone, an hour isn’t always an hour. The amount their work is taxed, the context in which they operate, and their emotions toward their work and employer will affect their behavior.

Given this knowledge, you could go with a more libertarian approach–give as much back to your employees as possible–or you could choose to go full socialist.

Lately, many organizations are going full socialist, including The Container Store and Wegmans Food Markets. In addition to providing great benefits, they’ve absorbed nearly all possibility of layoffs, and almost exclusively promote from within rather than recruiting experienced hires.

Netflix employes a different model of socialism: They pay literally top dollar–as much as they would offer to keep you if you got a job offer somewhere else. Management helps you if you’re in a slump, and if your skills just don’t fit the needs of the organization anymore they offer a generous severance package, including placement assistance.

There are two interesting traits in these socialist models: they all experience an increase in revenue that more than makes up for the reduction in employee taxes, and none of them offers the outrageous benefits offered by Google or other Silicon Valley heavyweights.

Which brings us to the question: What makes a meaningful social program (a.k.a. benefit)? Google is famous for having extravagant campuses with free meals, on-site massages, and a host of other benefits. But these only provide minor incremental value because they are simply “free stuff.” The same is true if you give your employees gift cards or tickets to a sports game. These aren’t really fostering a better environment, they’re just “free stuff.”

Meaningful social programs remove obstacles and increase feelings of security and freedom. They promote stability and peace-of-mind, they remove distractions or red tape, and they let you know that if something happens–if you have a child or have to take care of an elderly parent, if you have a bad quarter or even a bad year, etc.–your organization has your back. Each program must have a specific intent behind it that removes worries and stigma, provides a safe environment, or better enables problem solving and innovation. Especially for those who are budgeting a start-up, let these criteria be your guide.

For a lot of people reading this, extravagant social programs won’t be within the realm of possibility anyway. You might already be paying your employees less than they could get somewhere else. But it’s not so much an issue of whether you’re paying them less–so long as they’re able to cover their cost of living–but whether you’re taxing them fairly and giving them the tools they need to close the gap with what they could earn elsewhere. Help them–or sometimes just free them–to create new value and bring in new business. Not every potential employee will be excited about the idea, but the good ones will see the opportunity and jump for it.

There’s a lot more to be learned from macroeconomics and tax theory if you have a large business or your business is growing, but I’d love to hear your thoughts and answer any questions in the comments.

Can We Open-Source the Law?

Here’s a wild idea for you.

When the United States was formed as the first modern democracy, its founders had some pretty crazy ideas about how the democratic system would work. People would be elected and leave their jobs to become lawmakers for several years, and then return to their jobs and let someone else take a stab at it. It was an efficient approach to getting the perspectives of the people who made up the nation to collaborate on laws.

But how would they have written the Constitution if they had today’s technologies and insights? Would it have been different?

Enter Jos de Blok, CEO of Buurtzorg, a nursing organization that turned the business of home-care on its head. Unlike traditional leadership that does extensive strategizing and change planning, de Blok has a blog. When he’s planning a change in operations–usually a small, incremental change rather than a massive treatise–he posts it on the blog and allows 24 hours for response from an organization of nearly 8,000. Based on feedback, he proceeds, amends, throws out, or gathers a task force to hammer out the details.

The specifics of Buurtzorg’s approach will not apply for every organization, but the concept is sound: Centralized (non-hierarchical) management of an open-sourced approach.

Open-sourcing has provided not just stable software but some of the most secure software in the world, despite the early concerns over its transparency and malleability. Yet the approach has yet to make much of a leap to other fields, despite being at its core a knowledge method and not a software-specific method. (Wikipedia is among the few notable examples.)

There’s a lot to be learned from the way open-source groups guide development. Many have small development teams that are able to invest and focus on key features that aren’t getting as much attention on the outside. Some companies identify features that have to be developed in a closed environment in order to be valuable, and embed them within a different version of the product. But there are often so many eyes on every line of the source code that it’s difficult to deliberately sabotage the effort, and developers who comb through the code before a final release are typically able to pull out unnecessary operations and tie up loose ends.

These open-source software projects are at work in the wild, accessible to billions of people, and many of the developers working on them have very little personal stake in the outcome except their own excitement about and investment in the project.

Suppose these same techniques were used to guide your organization, every member of which is deeply invested in your policies and decisions. Instead of investing in a complex analysis of the state of your company, you’d get immediate feedback from the people who know it best. Instead of deciding on a change plan and having to get buy-in from every last member of your organization, you’d already have a good chunk of your organization on board. Instead of having to course-correct in the middle of an enormous project, your incremental changes would correct themselves.

If it sounds idealistic, that’s because it is. Don’t misunderstand: It’s a completely practical approach, and may even become a necessary approach to managing large organizations in ten or twenty years. But it’s also idealistic because it requires leaders to relinquish power, and perhaps just as importantly it puts them on uncertain footing. Leaders not only want power for its own sake, they want power because they don’t trust their people, and this approach to an organization’s policy and strategy relies absolutely on trust.

Fortunately there are ways to develop that trust, some of which I’ve already written about. You can treat your employees as partners. You can remove the stigma of failure. You can establish shared values. And as always, you should approach it in the way that works best for your specific organization. But as with any change, at some point you will have to make a leap without knowing exactly where you will land. It can be terrifying, but it’s the only way we accomplish any meaningful change.

Perhaps the Founding Fathers wouldn’t have open-sourced America’s laws even if they’d had the tools. But on the whole they were the kind of people who were always trying to improve upon the work of others. We’d be doing them a disservice if we didn’t try to improve upon theirs, even if it’s only within our own small organizations.

I’m looking forward to discussing your insights and concerns in the comments below.

Rethinking Your Government

Corporate governments don’t often look to the past to see the evolution in tribal and national governments, and consider whether the next step in management will follow along the same lines. In fact, in the business writing and discussions that I’ve encountered, very rarely if ever have I noticed even the suggestion that a corporate “governance model” and a national government might have deep and important similarities.

In fact, the true genius of capitalism from a human-development standpoint was that it decoupled and abstracted political and economic realities. What were formerly struggles between nation-states (consider Machiavelli’s Italy) could now be struggles between nation-corporations, with the toll counted in jobs lost instead of lives lost.

Another impact it had was to more effectively hybridize government, i.e., I am subject to the government of the United States, the particular state and city where I live, and the business for which I work, as well as any other organizations in which I participate. This hybridization makes the world more efficient because each organization can seek the most effective form of government for its activities.

So when I say that most businesses’ governments are totalitarian, oligarchic, and/or socialist, I don’t mean these are negatives. They are simply characteristics that can be properly aligned or misaligned with your organization’s values.

Consider how your organization’s government works. Is it a top-down affair, like a monarchy or an oligarchy? Are there democratic features, and are they really democratic or are you just pacifying the people to keep them from revolting? Who wields the practical power within your organization? And how is your Constitution holding up? Have you added features (like an Innovation Department or a Chief Happiness Officer) instead of revamping your system to fit your present values?

Forward-looking businesses will have to leapfrog the development of world governments in order to keep pace with the future. They will have to skip from where they are (perhaps a little ahead of feudalism) to a post-democratic solution.

Fortunately, we’re starting to get a handle on how such governments work. Frederic Laloux has a great lecture (with Q&A) on the priorities and operations of forward-looking organizations. I have a few things to add, as you will see later this week, but please speak up in the comments about your own experiences with forward-looking governments.

Your Organization Is a Nation

Your organization is a nation.

It isn’t like a nation. It doesn’t have the properties of a nation. It is a nation.

Your organization starts with territory. For countries, the territory is geographical: the southern boundary of much of Canada is the 49th Parallel, and Mayalsia is bounded in part by the Golok River. For most businesses, the territory is intellectual: Amazon’s territory is its online retail site, Johnson & Johnson’s territory is its products, etc. The territory may have physical properties–offices, factories, warehouses, etc.–but it is intellectual in nature.

Your organization has sovereignty within its intellectual territory, which means it can conduct its business more or less the way it wants. Your organization has governance, a.k.a. “government,” to guide and regulate the actions within its territory. And of course, your organization has its own culture, with its own language, beliefs, and customs.

Because your organization is its own nation, there are a number of lessons to be derived from public policy and economics. It also faces dangers similar to those faced by world governments, even if it’s at a much smaller scale and the results look different: a revolt may look like an internal power struggle, but it may also be a mass exodus. And if your organization is large enough, it has its own subcultures that have to work with one another.

This week, I’ll be discussing some of the practical ramifications of this idea that your organization is a nation.

How to Value Your Diversity

Equal pay for women is a checkmate strategy.

There are two possible schools of thought when it comes to equal pay. One is that women are the same as men; the other is that women are different from men.

If women are the same as men, then they deserve equal pay. This is easy to understand: If women are the same as men with regard to their work, then if business is a meritocracy they deserve to be making the same amount for the same work.

I’m of the camp that women and men are statistically different. (By which I mean you can’t narrow down from the generality to say any one woman is a certain way compared to any one man, but on average women tend toward certain traits and men toward others.) Whether this difference is primarily the product of cultural expectations is irrelevant to the discussion at hand.

That women are different and therefore deserve equal pay goes back to my discussion of diversity and innovation. Innovation is recombinant, meaning it requires a diversity of perspectives, values, and opinions that can be synthesized and resolved in new ways, sometimes resulting in entirely new ideas. If women are different from men, this contributes value to the innovation process.

But there’s a problem with unequal pay and the relative value of the individual’s contribution. By setting one person’s pay lower than a peer, you are also setting the relative value of that person’s contribution.

This sounds counter-intuitive to anyone brought up on supply-and-demand economics, which say you’re paying less for the same resource. Yet we’ve seen time and again that the amount you pay for something changes its practical value. If you paid a hundred dollars a month to read my blog posts, even if the product wasn’t substantively changed, you’d be taking these words a lot more seriously. This blog would, in effect, become a different product in your mind.

The same behavior is at play in your employment, even where the actual amounts you’re paying each employee are hidden from each other. The behavior is subtle: management values this person’s views more than another’s; or a particular employee is bolder because he knows he is being paid on the upper end of his market range. Meanwhile, people who are being paid less than their contribution is worth may be holding back. Why should I be investing more in my employers than they’re investing in me?

Thus, by paying an employee less, you are actually making her contribution less valuable.

Thus it isn’t a matter of paying women equally, but valuing women equally. Women who move forward with the knowledge that they are paid equally, and men who encounter women with the knowledge that they are paid equally, will both value the contributions of those women more. And because these contributions add a diversity of perspective–and those perspectives are valued at the same level as their male peers–they contribute value to the end product.

Thus, equal pay is simply logical from a business standpoint. The same rationale applies to equal pay for people of other cultures, subcultures, or anyone who enters a business environment with a new perspective. Short-changing a perspective leaves it anemic; and starving an investment, like your investment in an employee, is bad business.

Interlocking Shields: The Importance of Constructive Conflict

Any organization that’s trying to become more innovative has to adopt one universal management skill: constructive conflict.

Constructive conflict doesn’t mean conflict resolution. It means allowing conflict to happen, even encouraging it, and focusing it into a creative, constructive exercise.

Conflict is important because it challenges beliefs and assumptions. It reveals the limits of our vision and draws out feelings and opinions that need to be dealt with. Well-executed conflict can result in more robust ideas and more complete buy-in; it also prevents territorialism and resource allocation inefficiencies from people overstating their needs, and allows us to air grievances before they develop into grudges. For these reasons, conflict doesn’t go away in a good business environment.

Conflict occurs when people have different information, different values, or different needs; constructive conflict facilitates synthesis of these differences:

Synthesizing information allows decisions to proceed with a more holistic view.
Synthesizing values allows each stakeholder to understand other stakeholders’ concerns and determine whether they are important to the matter at hand.
Synthesizing needs helps make decisions and compromises that will benefit the business overall and not just the stakeholder acting on his or her own.

Conflict avoidance, on the other hand, short circuits innovation by preventing the interaction of diverse viewpoints and areas of knowledge. Providing a framework for conflict to happen makes collaboration possible. All the platforms and incentives and leadership messages trying to push collaboration can be sabotaged by not knowing how to create positive conflict.

Although constructive conflict is a skill, we can start by creating a solid foundation for conflict. This begins with shared purpose and shared values: if people are working toward the same end, resolving the conflict becomes a matter of how best to achieve that end instead of a contest of ends.

We can also more clearly define roles. This is a particular challenge for less-hierarchical organizations: a manager, for example, becomes a role rather than a position of absolute authority. Yet as I’ve discussed previously, “domain” is critical to the development of individuals. Defining and using domain in very clear-cut ways helps those involved in a conflict to understand the perspectives of one another, and reduces the scale of conflict to border disputes while eschewing hostile takeovers.

Finally, constructive conflict and trust feed into one another. If you have established trust, it will help to draw out conflict and create constructive outcomes. If you create successful conflicts, it will strengthen the bond of trust.

How to Use Your Diversity

We intuitively know there’s value in diversity: the Mission Impossible team, the A-Team, Ocean’s Eleven, the Guardians of the Galaxy.

But in business the tradition has been to focus on things that can be tabulated: years of experience, education level, predefined skill sets–and usually to fill the abstract concept of a “position.” In this context, “diversity” is a buzz word that means “someone who looks different”–different clothes, different rituals, different language–but someone who is still plugged into the same ways of thinking.

It’s not that such people don’t add diversity. But the value of their diversity is often suppressed in favor of the appearance of diversity. The game, while at the office at least, is conformity.

The value of diversity comes with different modes of thinking. Any given person can see a problem from multiple angles, but never from all angles. Having and utilizing real diversity, then, depends on being able to bring out the difference in perspective and put it to work in combination with other perspectives.

From a recruiting perspective, this means hiring to fill the blind spots. A blind spot is different from a role, and it behooves a manager to understand where blind spots may exist in a team.

From a management perspective, this means practicing constructive conflict. Constructive conflict is a way not only to allow but to encourage dissenting opinions in such a way that final solutions benefit from very different ideas.

Finally, it means management that is able to see the value in other perspectives. Much of the value of these perspectives may not be rational, but that doesn’t mean there isn’t reason behind them. Finding tools to judge these perspectives, and to incorporate them together, is critical to effective management of diverse teams.

One final point: Diversity of perspective must be unified by unity of purpose. Last week, I described founding myth in terms of shared origin, shared values, and shared destiny. These are critical to the development of a diverse community.

This One Neat Trick Made Alexander the Conqueror of the Known World

Alexander conquered the known world with a simple innovation. It didn’t require a complex new technology; we would call it a “process change.” Instead of giving men shields to protect themselves, the Greeks overlapped their shields to form an impenetrable barrier, a technique they called a “phalanx.”

In these phalanx formations, a soldier’s shield was (according to Gerard Butler) intended to cover himself and the man to his left. The success of the entire formation rested on each individual, but the responsibility of each individual extended to only one other person. It was a manageable, achievable, even simple goal. What’s more, each soldier was able to give up some of his own shield with the knowledge that the man beside him was shielding him in turn. (Unless you were on the far right–that guy was kinda screwed.)

I’m sure someone has taken this idea somewhere, slapped it on a posted and put the word “TEAMWORK” under it. But this isn’t just “teamwork.” “Teamwork” was taking down a mammoth thousands of years earlier. The phalanx was something a little different. Instead of being something abstract like “teamwork,” it was a very simple, practical invention based on two rules:

Each man covers the next man’s weakness.
Covering the man next to you is as important as covering yourself.

If you could apply this technique to a culture–the culture of your immediate team at work, or of your entire company, or of an entire nation–a culture of covering the person to your left–could that culture benefit as much from its resulting unity as an ancient Greek phalanx?

For it to work, there is a hiring issue and a management issue.

The hiring side depends upon hiring a diverse set of people–not just “diversity hiring,” but hiring people with very different perspectives and strengths within the context of the core set of skills necessary to a team. This requires complementing working skills (such as project planning) with social skills (such as empathy).

The management side depends upon horizontal management methods, which is to say peer management. Rather than being responsible only upward, I am also responsible sideways to and for one or more people. Their success is my success.

There are a few possible approaches that I have not personally had the chance to test or observe in a business environment. One is the “linked chain” approach that is seen in some less-formal organizations: Each individual reports to one peer and is reported to by another. (This is a way of placing responsibility for communication on one individual in the relationship; it doesn’t mean the reportee won’t also be asking for help from the reporter.) Instead of seeing these people as higher or lower in the hierarchy, they are peers who are responsible for one another. In a managed organization, the chain can be more effectively “linked” by pairing complementary skill sets, so that one’s strength can cover another’s weakness. By virtue of linking, additional skill sets can quickly be brought in by the rest of the team, especially on larger teams.

Have you had any experiences trying to develop “phalanx” structures in your organization? I would love to hear about it in the comments.

Living the Myth

Once you have your founding myth, what do you do with it? You can’t exactly distribute an epic poem to your people. Do you have to update your internal training materials?

Fortunately, this isn’t necessary. Most of ancient Rome couldn’t even read, but that didn’t mean they didn’t identify themselves with the founding story of Romulus and Remus.

Your founding myth will become the centerpoint of your shared identity, but it should become a story your people tell intuitively, not because they’ve memorized it off a sheet of paper. Many cultures tell their myths through holidays and religious practices–but another way of looking at it is that the myth is told through the activities that establish the culture’s identity. What activities that establish your organization’s identity?

If your response is, “Almost everything my organization does,” you’re starting to get the idea. The story is told every time two or more people assemble in the name of the organization. So the challenging process is not in telling the story at all, but in changing the story that’s being told.

Believe the myth. Have you created something you believe, or is it something you wish were true? If it’s the latter, you’d better head back to the drawing board. There has never been a story that existed outside of a human mind. The founding myth must be believed into existence–by way of its influence over actions and motivations. But the founding myth is not magic. It will help to guide decisions and create community, and it will help the culture of your organization to hold together and move in the same direction. But it will only work if it’s based in reality, and it is genuinely believed by the people in the organization. Belief starts with you.
Share your beliefs. If you believe the myth, you will find it working itself into your everyday language. The ideas and beliefs will be embodied in your presentations, your conversations, the way you lead your meetings. You will reference your shared past, call upon your shared values, and look forward to your shared destiny, sure as a Pentecostal preacher on a Sunday morning.
Pay attention to the response. How your people receive and react to the story you’re telling will indicate changes you may need to make. You may have blind spots where the facts as you see them don’t match up with the experience of others, and have to revise your myth. You may have pain points where you will have to change the way your organization operates in order to align with your myth. Do people disagree with the conclusions you reach? Do you experience resistance to initiatives? Do people seem like they’re going through the motions without really understanding the purpose? If your myth is told well and aligns with what everyone is doing, your people will act with purpose; if your myth isn’t aligned with reality, your people will be annoyed at being asked to keep up a compulsory fiction.
Revise. Pay attention to the way people respond, and you’ll start to see where you might have to make changes to your myth, and where you might have to make changes to your business. In all likelihood, you will need to do both. How will you know the difference? There aren’t any hard-and-fast rules, but as a general rule of thumb, if the negative or lackluster response is widespread, you probably need to revise your myth. If the poor response is concentrated in the core areas of your business–the people who best know your organization’s purpose–you probably need to revise your myth.
Keep it up. Don’t let growing pains get you down; there will be people who don’t agree with your vision exactly, and while you should listen to them, you shouldn’t always revise your myth to please them. If you have a consensus within your organization–not just at the executive level (if applicable), but the organization as a whole, including all major divisions–then you will simply have to accept the fact that some people will take more time to get on board, and some people will never get on board and probably need to find a different community.

You will notice that both the story and the business will have to change. (I hope you are expecting for your business to change, since it’s the whole point of this exercise.) But after a few iterations, you should find a comfortable guiding myth.

And then you will have the privilege of encountering the great truth, “It works until it doesn’t.”

What I’ve written this week could be the content of an entire set of books, but these principles should at least give you some ideas about how to approach the enhancement of your organization’s story and the development of its community. And if not, I’m always willing to be wrong. I look forward to hearing your observations and experiences in the comments.

Writing Your Founding Myth

Yesterday we examined the existing story of your organization. Today we’re going to explore how we can nudge that story into place to create a founding myth–the story that underlies the identity of any company, nation, team, or collective.

As much as Americans may disagree about the particulars, most of us have a shared respect for our founders and place emphasis on the values of liberty and equality. Today, this story includes the long fight to end slavery and grant equal rights to minorities. This is our founding myth: a particular telling of our history, with emphasis on the values that form our identity and the heroes who championed those values.

A large chunk of the Hebrew Bible contains what could be called Davidic mythology: from foretelling David’s kingship long before his birth, to calling upon his bloodline well after his death. The patron, YHWH, brought the people out of Egypt and into a new land, established the identity and values of the culture, and provided a model and hero in the form of King David. This myth sustained the identity of Israel and the Jewish people through multiple exiles, through Greek and then Roman occupations.

As you can tell from my short telling of these two stories, founding myths have important characteristics that help to shape a community:

Shared origins. Your shared origins might stretch back to the founding of the organization, particularly if it was founded last week or last year. Or it might only stretch back to a particular turn in the organization’s history. I began working at KPMG in 2005, shortly after a tax-shelter scandal that resulted in a deferred prosecution agreement with the government. The narrative at the time hinged on that event: we were going to become the firm with the most integrity and the highest-quality work. Sure, we could have traced our origins to the 1800s and the four partners that make up the letters of the name, but that wasn’t the story we were telling; that wasn’t the firm we were trying to be. Our story was of a new beginning, of a murky past and a better future.
Shared values. It’s no coincidence that the greatest philosophers, scholars, and scientists of ancient Greece lived and worked in Athens, the city of Athena. Out of all possible patron gods, its founders chose the goddess of wisdom–not the god of war to have a powerful military, the goddess of fertility to have abundant farmland, or the god of the forge to have unparalleled industry. The story of Athens defined the city’s key value, and elevated that value above many other perfectly good values. If you lead an organization, I urge you to pick one value above all others that is of special importance to this group of people. Then make sure it is embodied in your founding myth.
Shared destiny. It’s never enough to simply share a past. In order to build a community, people have to believe in a shared future that follows from that past. Your shared destiny is the natural result of the values that call you out of your origins; the message is that all that is needed for you to go from where you were to this bright future is to embody your values. Often this destiny is something you know can be achieved because in your founding myth it has been achieved before: George Washington’s presidency, David’s kingship, Steve Jobs’ release of the iPhone. But if your organization is too new to have past successes, or if you’re overseeing a major shift in culture and values, focus on the promise of the future you are trying to achieve.

Through all of these, the operative word is “shared.” You can’t dictate a new future from on high; it has to be something that each person in your organization can believe, a destiny and a set of values that each individual wants to execute. Be aware that this may also be a way to cull your membership; those who aren’t interested in being a part of your shared story may not belong in your community.

Of course, the one thing this story is missing is a character. The character is a champion. The story isn’t about the champion–not really–but the champion breathes life into the ideas. She emerges from the shared past (like everyone else), embodies the shared values (like everyone can), and creates a shared destiny (by virtue of her embodiment of those values).

George Washington was a simple land owner who embodied the values of liberty and equality, led the military forces of rebellion, and eventually became the first President of the United States. David was a humble shepherd who embodied the values of piety and wisdom, overcame both the Philistines and the forces of Saul, and became the first in a long line of kings. Neither of these men were perfect even in the myths–in fact, being an ordinary, flawed human being is important. But because they embodied the shared values, they brought about a bright destiny for all their people.

You might in fact be the champion of your organization’s founding myth, like Jack Welch was at GE. But the myth isn’t about you, it’s about the collective identity.

Once you’ve laid out what you want your founding myth to be, you will need people to buy into it. But recognize that your founding myth is what the people in your organization believe it is. It’s the story they tell, not the story you tell. The closer your myth is to the story people are already telling, the better you will be able to convince them. But remain open to the possibility that your story will need to go through several revisions before everyone’s on the same page.