If You’re Anti-Business, You’re Anti-Small Business

There are just over 6 million businesses in America, the vast majority of which are small businesses. About half of all private sector employees in the U.S. workforce work for businesses with 500 or fewer employees.

Politicians and talking heads sometimes make it seem like American capitalism consists entirely of huge corporations. But there are only about 18,500 big businesses, with only 1,000 of those employing 10,000 employees or more. At the same time, small firms with fewer than 500 employees represent 99% of the total number of U.S. businesses.

So, when elected officials make decisions, or simply utter remarks, that are seen as “anti-business,” it probably comes across to these millions of small-business owners as anti-small business. Over-regulating or disparaging business isn’t good for America, because it probably causes uncertainty among small-business owners and that uncertainty just might lead them to not grow or hire.

In my view, one of the reasons our economy is stalled is that small businesses are scared. Small business is the most important part of the total capitalist ecosystem. So goes U.S. small business, so goes desperately needed job creation and America’s standing in the world.

Now, small businesses are, in fact, just like big businesses and even private equities. They exist to maximize profits. This is how they get paid and how they have money to hire.

Like all other businesspeople, small-business owners aren’t building strategies to hire people or create jobs. No business of any size in the world is doing that. They are building strategies to win new customers and maximize profits -- hiring and job creation follow.

According to a study of small-business owners from the University of Chicago, what many of them want is to be their own boss -- which, of course, is usually only possible if you’re making healthy profits. They launch companies because they love and demand total freedom in their lives. Not so much because they are trying to become insanely rich or build something massive; small-business owners with those aspirations do exist, but they are the minority.

Something Washington should know: Small-business owners compose one of the most trusted and admired of all American institutions, second only to the military. Americans know and respect small-business owners because half of us in the corporate world work for small businesses and depend on them for our paychecks and career advancement.

Maybe we should start treating small-business owners like American heroes. They’re actually highly admired patriots and the only ones that can truly jump-start the U.S. economy and job creation. The public knows this. It would be great if all of our elected officials did, too.

Pundits and Politicians: Do You Know Who’s Really Rich?

Gallup asked U.S. citizens how much income per year they would need to earn to consider themselves “rich.” I thought the answer would be a salary of more than $1 million per year. Actually, the median answer is $150,000 annually.

So, when talking heads refer to “The Rich,” their audiences interpret this as people making $150,000 or more annually. I’d bet few of the political pundits know this -- nor probably do most people in Washington.

Here’s what this chief executive and believer in enterprise and meritocracy hopes: That as November nears, candidates in the varied elections stay on the same page regarding how they define rich. Or they’ll misread public opinion and continue to divide the electorate. This misunderstanding could even cost some politicians their jobs.

Gallup also asked Americans if they themselves would like to be rich, and overwhelmingly they say “yes.” And nearly a full third of Americans are optimistic they will get there.

The word “rich” is tarnished in our country by leaders, politicians, and talking heads. It’s a dirty word in politics because it’s misunderstood. But becoming wealthy is still a part of the great American Dream.

CEOs: Bet Your Stock on a Great Workplace

Wharton researchers have discovered there’s a significant difference in stock performance between great workplaces and lousy workplaces. You’d think this would be common sense, but it’s not -- most U.S. workplaces are either miserable or apathetic. Specifically, 19% of employees are miserable, or as Gallup calls them, “actively disengaged”; 52% apathetic, or “not engaged”; and 29% inspired, or “engaged.” That means tens of millions of American employees are not engaged in their jobs.

Bottom line, great workplace stock outpaces average workplace stock by an average of about 3% per year, according to Wharton. So if you invested in a portfolio of great workplaces versus average ones over 25 years, you’d double your money. Which would you prefer for your retirement or your kid’s college savings?

Honest to God, this chief executive gave up long ago on fellow CEOs who run vast workplaces of misery and apathy. I know and socialize with many U.S. and international CEOs, and I can tell you that at the end of the day, many aren’t deeply concerned by the disengagement of their workforce. Okay; so be it. They will attempt to win through acquisitions and price cutting.

But these leaders will struggle to build anything with a soul and character and rich purpose -- something with infinite possibilities for innovation and entrepreneurship, with real and dynamic explosions of customers. Nor will they build something as profitable as it could be.

My big question: Why don’t boards of directors push for higher returns on investment in their employees and demand workplace audits? There’s actually a worldwide gold standard currently used by the best managed companies in the world. It’s called the Gallup Q12: The 12 best questions ever invented to ask employees what they think of their workplaces and managers.

Think of the Q12 just like a financial audit by PricewaterhouseCoopers. If every board in the world started requiring a Gallup audit of employee inspiration presented right next to the quarterly operating statement with benchmarks, it would dramatically improve stock performance. It would also change the world.

The Next Banking Boom: The 2.5 Billion Unbanked Worldwide

Of the 5 billion adults in the world, staggeringly, only half have a bank account.

This is one of the huge findings from a global poll by the World Bank and Gallup, funded by the Gates Foundation. The report, by World Bank economists Asli Demirguc-Kunt and Leora Klapper, is brilliant.

This big finding means that 2.5 billion people are “unbanked,” therefore not participating in modern economic life. Advanced countries can feed them, clothe them, rush them medicine, school them -- but those people will never experience sustainable human development until they’re integrated into the global channels of buying and selling. Simply put, they need access to money and credit, and they need to have a bank account.

The unbanked actually create a particular opportunity for the United States. This is especially true as world GDP, which is currently at $60 trillion, will grow to more than $200 trillion over the next 30 years. So $140 trillion worth of new customers are coming into global markets. Note to the U.S. president and all American governors: Within this $140 trillion are the best jobs in the world -- jobs follow customers, not vice versa.

World banking is in fact ripe for American innovation and entrepreneurship, as technology and service -- two places where the U.S. still leads the world -- will play an essential role in winning these new customers.

Now, just who are these 2.5 billion potential customers? A good place to start is with those who need accounts for “remittances.” This is the money earned by a family member in another country that’s sent back home. The total amount of remittances sent home by family heroes from any country to any country was more than $350 billion in 2011.

America’s technological advantage will come into play because most of that $350 billion in remittances will never make it to a bank branch. This is because, globally, most branch banking will go away in our lifetimes. Expect those new customers to open bank accounts via remittances and for all of that new business to be done through mobile banking, where U.S. banks can excel. And once those new customers are locked in, they will stay with one bank for a very long time, as customers just don’t change banks very often.

As everything is going virtual, so too is global banking. Let the record show that the country that dominates the next 2.5 billion unbanked will also dominate the world of customers, and, subsequently, the best jobs.

What’s Wrong With India

Gallup analysts reported this week that only 8% of the Indian workforce is “engaged” while 60% is not engaged and 32% is actively disengaged. We added several of our Q12 employee engagement questions to our annual survey in India to figure this out.

This is in a critical emerging economy -- whose GDP growth has been slowing down in recent years.

My analysis is that leaders in the country are probably naming the wrong people managers. No other explanation makes sense. Indians are great people, peaceful, loving, inspired, and incredibly hard-working. But they aren’t maximizing their potential when they show up at work. This is true even at successful companies.

Gallup has found that almost everything negative or positive in a workplace comes back to the manager. In India’s case, that terribly low engagement number is caused by too many managers with no talent or too many managers working on the wrong things with the right people.

India’s problem also goes beyond bad managers. I’m certain that widespread corruption plays a role. You can imagine what it does to meritocracy in the workplace when corruption and cronyism are big parts of how business is conducted.

In fact, Gallup’s global polling shows that India’s citizens believe both business and government are corrupt. This feeling is exacerbated by the traditional heavy-handed, command-and-control management style and extremely hierarchical practices. Also, a thick bureaucracy of paperwork and forms takes the fun out of work, making it boring and meaningless.

India has to do something about these problems quickly, as Gallup finds a whopping 31% of the population rate their lives poorly enough to be considered “suffering.” That’s more than triple the reported suffering from just five years ago.

In comparison, U.S. suffering runs 3-4%, even in these difficult times, and workplace engagement runs right at 28%. Gallup’s best clients run workplace engagement above 50% -- including India’s Taj Hotels. So, high numbers are attainable.

If the leadership of India wants to seriously address disengagement and suffering, they would make one big command decision to turn the whole country into a “strengths-based nation.” Every single worker and manager would take the StrengthsFinder assessment. This would enable all of them to tap into their innate talents and achieve greater success -- making them more engaged in their work.

How about this: A new national requirement that “every working and nonworking Indian will know their strengths, including the managers.” And run every manager in the whole country through great-manager training. And measure the results by continuously tracking employee engagement.

These moves would move India forward -- revving up its economy, its companies, and its workforce.