A Little Story about This Guy and This Employee (or, a New Take on the Employer/Employee Relationship and the Russian Revolution)

[Let me tell you a little story by indirectly sharing a personal experience with you. If you’ve never run your own business, it just might help you see the employer/employee relationship from a different perspective. And, if I’m lucky, it might help you understand why that relationship will always be the way it is.]

There was once “This Guy,” and he was a rather poor employee. He constantly complained about the boss, always boasted he could do things better and was convinced the boss’s company couldn’t run without him.

Once Upon a Time
There was “this guy” who did nothing but gripe about the products he used in his hobby. He always criticized them and boasted that he could do better. One day, one of this guy’s friends got tired of listening to him gripe and told him to either do better or shut up. Well, the friend figured that the guy would just shut up. He never counted on the guy actually doing it, but that’s what this guy did. He started his own company.

Now, it didn’t take long for this guy to make a name for himself. He was actually rather talented and he discovered he had a knack for knowing what his customer’s wanted. He also had no idea how to do what he was doing, but, to his dumb luck, this meant he hadn’t been in his industry long enough to have been told what he could and couldn’t do. As a result, he discovered ways to do what the old hands in his business had collectively decided couldn’t be done and, soon enough, this guy was recognized by his customers and competitors alike as one of the best in his business. He got all the industry awards and the heaps of praise in the trade publications and on the Internet discussion groups. When he went to trade shows, he was mobbed by people who behaved more like adoring fans than loyal customers. He even came to the attention of a giant in a larger industry who took this guy under his wing and taught him even more about his trade. And for ten years, this is what this guy did. It was lots of fun.

But there was a down side to all this as well. Honestly, the notoriety and attention never went to this guy’s head. He was and still is humbled by that part of the business. What this guy wasn’t ready for was the money side of business. He didn’t know how to handle his finances and, though he did re-invest, he spent way too much on himself. Unfortunately for him, his success assured that there was plenty of money to waste. He had committed a cardinal mistake: he had started a business without understanding how to run a business. Consequently, he spent a lot of money that he should have saved. Then he made another cardinal mistake: he got lazy. His success deceived him into believing he couldn’t fail, and that’s what finally got him: his arrogance, greed and sloth.

So, rather than humble himself enough to admit to his failings and get back to the basics that had made him a success, this guy told everyone he was burned out on the business. So, this guy sold his company to his long-term employee and walked away. Now, this employee had been with the company since the first year it was opened and he knew everything that had to be done to keep it running. But this employee was like this guy had been before he started the business. This employee was convinced that the boss had built the company off his back. Now that he owned it, this employee ‘knew’ he could do better. This employee had always believed most of the work his former boss had done in the company was unnecessary. The employee believed the company would run fine as it was and that all he had to do was fill the orders, then sit back and collect the profits. He never believed that his boss had actually put in 10, 12, 16 – sometimes even 24 hour days to make the company successful. Nor did this employee believe the boss when the boss told him there were times he had to go without getting paid so he could pay the employee. All the employee ever saw was the boss spending money and not working. You see, even though the employee had been there the entire time, the employee had focused on the spending that had caused the boss’s downfall. This employee had forgotten how the boss got to the top in the first place. So, where it took the boss ten years to lose what he had built, it took the employee less than a year to get into serious trouble. In less than two years, the employee had destroyed everything the boss had built and he lost the company. But the really funny part of the employee’s story is, when the former boss came to repossess the company because the employee was six months behind in his payments, the employee acted like he was being robbed by his creditor.

Now, after I had written this story, I realized that this is pretty much what happened to the farmers in the Russian Revolution. Lenin took the farms away from the real farmers and gave them to the peasants. But when the peasants couldn’t meet their production quotas because they didn’t know how to run the farms, Lenin sent other people to take the farms from the peasants. When this happened, the peasants cried foul, claiming that Lenin was stealing their property. Today, in America, the rules are a little different, but the game is the same. We have the government supporting the unions who are telling their employers how to run their businesses. And when the business owners tell the unions that they can’t meet their demands and stay in business, both the unions and the government tell the business owners they are lying so they can exploit the workers. The result is a GM/Chrysler bailout where the rest of the nation has to pay for the greed of the auto workers and the cowardice of the people who ran the auto companies.

This employer/employee relationship is part of the natural order of things. There are just so many people who can actually create something from nothing, but there are many, many more who merely assist in the process. And, as important as the laborer may be, he/she is not essential to the process. The essential person is that man or woman who can actually organize and direct the labor of the many to efficiently and profitably run a company. Now, we may not like to look at this equation in these terms because we think it belittles the worker, but that doesn’t change the equation. There are only so many who create and produce among us, and, if we stifle their efforts, the whole of us suffer.

This leads us to another not so coincidental observation about the collectivists. When they come to power, they find that there is always this certain ten percent who refuse to be “re-educated” and inevitably make trouble for them. Typically, this ten percent are “made to go away” so the new rulers can better organize society and the distribution of work and profits free from the trouble they would otherwise cause. But there is a strange connection between this ten percent and the destruction that inevitably befalls all collectivist societies: it just so happens that this ten percent are also those free-thinking inventors and creators who actually make society work. So, shortly after they are “made to go away,” the engine that runs all societies comes to a sputtering halt and the would-be utopian dreamers are left to find yet another ‘villain’ to blame for what was and has always been their failures.

Looking back, I learned some valuable lessons from the people in this story. I learned:

***There are precious few in society who can actually produce anything. The majority of us simply consume.
***No matter what your business, your business is business; so you’d best learn how to run one or you’ll soon be out of business.
***There is nothing personal in how one runs a business. There are simply certain economic realities that must be met, an equation that must be worked. As cold as it may seem, employees are just a part of that equation, and they can be used to balance it when other variables cannot be altered.
***The relationship is not fixed: if properly motivated, an employee can become an employer.
***There are two keys to changing one’s lot in life from employee to employer. First, either shut up and do it instead of boasting you can do it better, or shut up because, if you don’t do it, that means you can’t do it better. Second, if you decide to shut up and do it, never let anyone tell you that you can’t do it the way you want. Either prove them wrong or prove to yourself you can’t, in which case, you just find another way to make it happen.

***Either way, never give up, and never accept “no” or “it can’t be done” for an answer..

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