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He Who Pays, Says.
May 11, 2021
By Howard Mann

Over 25 years ago I was sitting in the office of the CEO of one of my clients and behind him was an embroidered pillow that simply said “He who pays, says.”

I was reminded of that saying when, last week, entrepreneurial darlings Jason Fried and David Heinemeier Hansson decided to make some sweeping cultural changes at their very successful project management software company, Basecamp.  Most notably, they were not going to allow any more political discussions to take place on company time (As a totally virtual company, one would imagine this had been happening in their internal chat rooms).  As the story has unfolded a bit, it seems there were a number of incidents where these types of discussions devolved to very heated discussions, that persisted over many months.

(Worth noting and considering how remote work has contributed to this situation.  Seems to me a lot of these types of discussions would be impossible in an in-person work environment. Imagine if there were ongoing arguments in-person in an office every day for weeks and months.).

Once Basecamp made their plans public, the public outcry was fast and furious.  Fried and Hansson were using their privilege, the “woke” company did not want anyone to actually be “woke” and on and on and on…

This past Friday, it was reported that up to 1/3 of the employees took a buyout and are leaving the company.  A buyout that Fried and Hansson offered to anyone that was unhappy with the rules they created for the company they founded, owned (not counting a small investment from Jeff Bezos so they could always keep it privately owned) and grew exponentially for over two decades.

It is all best summed up in this article from The Verge with the ridiculous headline “Basecamp implodes as employees flee company, including senior staff.”

What prompted me to write this piece has nothing to do with Basecamp or its founders.  However, the story triggered in me some lessons about owning a business that I wanted to put into words. There is so much noise about workplace culture that we seem to have lost the plot about workplace rules, who gets to make them and why.

Here is what is likely an unpopular statement, a business is not a democracy.  Sure, there are companies that want to make everyone feel involved in decisions, create a lot of autonomy and some that like to tout their full transparency with all kinds of “open book” policies.  Some of those structures work great but, in all of them, there is a person (Yes, there are partnerships but let’s just say it is one person for now) who took the risk to start the business, personally guaranteed loans to a bank, are liable for all the insurance risks, is on the hook for the office lease, will be named if the company is ever sued in any way and the person responsible for making sure everyone gets their paychecks.

A LOT of outsized risk for the owner vs everyone else employed by the company, in the hopes that, someday, there will be an outsized reward.

Like it or not, the company is theirs and they get to decide the rules. It is their “home” and they pay the rent.  Just like any home, they get to decide the rules. If employees do not like these rules, they get to leave and work elsewhere (Something that the owner cannot walk away from with anywhere near the same ease).

Sometimes a combination of staff or other internal dynamics alters the mood in the “home” and it starts to cause systemic stress and problems.  If it has gone on for too long, drastic measures have to be taken to permanently change the type of home the business owners choose to have (Again, it is their home).

Put more simply, they pay so they get the say. Their employees are there “at will.”

Fried and Hansson did not lose their senses.  I believe they knew that a bunch of employees would decide to work elsewhere (Why else did they have generous buyouts?).  While Twitter and the media predict the end of Basecamp as a company that is simply not going to happen and anyone who owns a business knows it.

They will have some weeks or a few months of pain as they hire and train new people. They will have then effectively fixed a workplace environment that had gotten away from them a bit and will continue making enormous profits from the millions of customers that rely on their project management software. Their outsized profits will continue as before (Note the millions of customers and 58 in remote staff. Do the math.) and those that choose to stay will be back to focusing on their work.

Just as there is a large percentage of employees who hate the new rules there are just as many (Likely more) who will be happy to work for a company where they do not have to spend any of their days in a heated chat room exchange over politics or social issues.  Most people want to come to work, do a great job, enjoy a few laughs with their coworkers and then go home to their friends and family.

As Hansson put it at the end of his explanatory blog post “But this too shall pass. We’ve been in business for over twenty years. Been through a myriad of controversies and challenges, and we’ll be through this too.”

Or, as Thomas Jefferson once said, “a little rebellion now and again is a good thing.”

Businesses exist to serve and deliver value to their customers so they can get paid so that they can pay their staff and allow them all to pay for and enjoy their lives. The core promise it has with its employees is to pay them an agreed salary for the work that they do. Employees should expect to be able to do their work in an environment that allows them to be successful so they can continue to grow their skills and careers.

Making the workplace a place for heated debate is NOT why companies exist. A toxic workplace is a much larger threat to a business than even 90% of the staff leaving. While everyone is crying about how this is some form of censorship, when did a private company also need to be a public square?

This Basecamp hysteria highlights how much we have lost our understanding of what allows a business to be in business. If removing persistent heated political arguments and toxic/inappropriate conversations from the work environment causes the end of your business then what business are you actually in?

The biggest takeaway for me and you should be to get focused on the rules that you want to set to guide the productive and positive environment your workplace creates so it can deliver on your vision for your business.  It is also important to consider the complexities that a remote workforce can make in managing these rules.

Are there new rules you need to create to manage these new remote working dynamics?

Are you aware of how employee interaction and discussion have changed during the pandemic?

We live in highly contentious times and most people are exhausted from and highly stressed by it all.

Daily life at work has enough stress already No extra input is needed (or wanted).

How are you creating a comfortable office environment so everyone can peacefully do their best work?

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