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Can your business pass the unlimited paid leave test?

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Social Strata thinks it can pass the unlimited paid leave test.

The Seattle-based business, Social Strata, has been around for 13 years as a social media company (one of the ancients, in other words), and they’ve decided they’re ready for it. Just yesterday, on the Live Cloud blog (which they produced), Social Strata announced that it is granting all 14 of its employees unlimited paid leave starting whenever. The folks running Social Strata, like yours truly, are huge fans of Jim Collins’ book, Good To Great, and particularly his idea of building a culture of discipline. Here’s how they explain it:

In that spirit, we decided that, if we have the “right people on the bus,” i.e., people who are passionate about what they’re doing, we don’t need to set artificial limits on the amount of time they can take off, or why they can take time off. Disciplined people will ensure that their responsibilities are handled, and still be able to recharge their batteries with time off. Undisciplined people who take advantage of the system will reveal themselves and be naturally sorted out.

Okay, your startup or small business may not be ready to grant unlimited, paid time off for all your employees — it is a huge conceptual leap to take — but you should always ask this question about your business and the folks working for you: could your business pass the unlimited paid leave test?

If you granted unlimited paid leave right now to all your employees, would they all clear out of the building and clear out your bank account? If your answer is the same as one of the commenters to the post, “I do work with some (very undisciplined) people that would be rubbing their hands with glee at the sight of your blog title and making preparations for 3 day working weeks,” then you’ve failed. You’ve hired the wrong people and created the wrong work culture in your business.

When you interview employees, you probably have a few mechanical and quite a few subjective tests you subject the hire decision to. But is this a person you’d trust with unlimited time off? If you told the prospective hire, “Work any day and any schedule you want. Come in late, leave early, skip a day if you need to, just get the work done at the highest level of excellence,” would you trust that employee? Would you get six hours of work or quality each week?

I have said it over a hundred times on this blog. An employee can either be a “function” or an “investment.” Almost every business — particularly the big ones — hire “functions” rather than “investments.”

What’s the difference? Well, you’ve probably heard the old business b.s. line a million times that goes something like this: “Our employees are our greatest asset.” Here’s how you answer that little slice of dishonesty: “If your employees are your greatest asset, how come I don’t see them on the “assets” side of your balance sheet? How come your employees, who are such great assets, show up under “Expenses” on your income statement?”

An employee as a function is an “expense” that is only justified by output, like a machine on an assembly line. An employee as an investment is “profit.” You see the difference? An “employee” costs money, but an “asset” makes money. An employee sucks profits out of a business (which is why so many businesses like to downsize or underpay their employees) while an investment increases profitability.

That, in a nutshell, is the underpinning of Jim Collins’ culture of discipline. You can’t have a culture of discipline without fundamentally altering your notion of an employee.

So, even though you may be in the couple of employees stage — or the zero of employees if you’re a startup — you may want to consider Social Strata’s great social experiment and start building the culture of discipline with each and every hire. Continually ask yourself the unlimited paid leave question: have I hired the right people and created the right culture that I could offer everyone unpaid unlimited leave? Without a moment’s hesitation?

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