Our guest today is sharing an interesting concept with us: tugboats and lighthouses. Now, if you’re wondering what I’m talking about, no, he is not a ship captain. He is Adam Michaels, the author of Sink or Shine.

Adam is talking to us about the modern marketplace and the two types of business around. Tugboats with antiquated ways of the past—and lighthouses, businesses grounded in the strength of their mission and impervious to environmental changes. More importantly, we’re going to talk about how you can transform your business into a lighthouse.

Adam H. Michaels: I’ve spent the vast majority of my life as an entrepreneur. I was the little kid on the back of the school bus selling bubble gum to kids for a quarter a piece and then buying four packs and then 16 packs. I was always that kind of guy. I went through college, became a nightclub promoter, ended up in the insurance business totally by accident. After a 25 year career of building independent businesses where I sat across from business owners, CEOs, CFOs, and heads of corporations, worked internally with a team of tremendous entrepreneurs, and taking a corporate role in a large Fortune 500 company.I’d seen this full scope of business and the challenges that a lot of them were facing.

I think at the core, the real reasons, the real essence of why I wrote this is that I’m extremely passionate about entrepreneurs.

I think entrepreneurism is the answer to the vast majority of the ills that plague our society as a whole.

Primarily because entrepreneurism doesn’t care. It doesn’t care if you’re black or white or gay or straight. It rewards effort and execution indiscriminately. To a certain extent, I think the idea of the American dream has started to falter a little bit. The Horatio Alger ideal of bootstrapping your way up the class ladder has been replaced by a narrative of victors and victims.

Obviously in our political environment that we’re in today, there’s this insurgency that’s taking place. I think a lot of that has to do with people feeling like they’re hopeless.

Economic immobility has grabbed hold of such a large portion of the population.

In my opinion, the education system has fallen on its face and isn’t helping those people. We know politicians aren’t going to help people. To me, entrepreneurism is the obvious answer. It’s not just for the entrepreneur, it’s also for the communities that those entrepreneurs build their businesses in. It’s for the employees that work for those companies. It’s for the society as a whole that benefits from the products they serve.

This book in a way was an attempt to help individuals that see that path, whether they’re inside of a company as an intrapreneur, to help them have an increased likelihood of success in an environment that’s becoming increasingly difficult.

I think that’s what we set out to do. There are some businesses that are going to thrive, and there are going to be others that find themselves really suffering and struggling and dying a slow death. This book was designed to help people regardless of where they are in life, whether they’re an entrepreneur or wantrepreneur or working inside of a corporation where they feel like they might be able to affect change…

Every one of those audiences can benefit from understanding what it takes to make a business successful in today’s environment.

About Sink or Shine

Rae Williams: Your title is Sink or Shine. Could you go in a little bit more about why you decided to name the book that?

Adam H. Michaels: I coined this evocative metaphor several years back when I was in a role where I led a team of about 5,000 sales people. This concept of becoming a lighthouse is sending a message to the marketplace to attract talent and clients by the brightness of our mission.

This idea of the tugboat and the lighthouse is a central theme of the entire business, so sink or shine obviously is a play—do you want to be that tugboat that potentially has a risk of sinking or do you want to stand tall upon the shoreline and attract clients and talent by the brightness of your mission?

The tugboat is the kind of antiquated business of yesteryear.

It was really reliant on the captains, and it was susceptible to human failure and mechanical failure. A lot of times, tugboats have limited range, they won’t leave the safety and comfort of their harbor, and it’s not really scalable.

In today’s environment, what I’ve seen in the thousands of businesses that I’ve sat across from over the years is that the businesses that really seem to succeed disproportionately are those that have this really strong, authentic, mission-driven identity. Where that’s the central idea behind every decision that’s made.

We talk a lot about this idea of, if you build a lighthouse, there’s no limit to the scope or the potential of where the business can go. That’s really the essence of the title of the book.

It’s this difference between the tugboat business and the lighthouse business, that sluggish vessel and that destination that has this epic beauty, stands out, makes it a destination for everybody who is looking for it and even people that happen upon it by mistake.

Don’t Be a Tugboat

Rae Williams: What is the first step that people can take to start their business off on the right foot and not be a tug boat?

Adam H. Michaels: When I was a kid, I hadn’t decided that I was an entrepreneur. It was really like this realization of a prepubescent identity crisis, you know? I think that I was an athlete but I didn’t really consider myself one of the jocks. I was in the advanced classes, but I wasn’t a nerd. I was into music but I wasn’t…

All these people had these identities, ways to identify.

For me, I sat in the class in economics class and understood this idea of risk and reward and became really enamored with an understanding that it was a way to define myself.

I think that entrepreneurism’s become a thing, right? Thanks to a lot of people. It was definitely not a thing in the early 1990s—an entrepreneur was reserved for people that couldn’t get a corporate job.

Today, it’s becoming vogue. In fact, I live in Los Angeles, and even in the last decade when I first moved here, any waiter or waitress that you met, they were all trying to get into Hollywood, right? They’re all going to be actors and actresses. Today, if you ask most of them what are they doing, they’re like, “I’m in this startup” or “I’m about to launch a startup” or “I’m about to do this…” I think the first step towards becoming an entrepreneur is waiting for the right opportunity to reveal itself to you.

I think a lot of people are delusional about what that means.

There’s a lot of different paths to it. I think that ultimately what you want to find is a pathway that helps you progress towards that ultimate objective. Not everybody needs to take on the full risk.

Depending on your appetite for risk, being an intrapreneur, being inside of an ecosystem where if you lack the capital or the idea or the know-how, there are companies that will reward and acknowledge your thoughtful disagreement and your willingness to take on certain responsibilities for a certain reward.

I think there’s no shame in any of those things, but the first step, I think, is identifying what your appetite for risk is and what your willingness is for deferred reward.

If you don’t have an appetite for deferred reward then, you know, find yourself a very comfortable job and battle your way up the career ladder. It will be a slow migration. It’s just not a real opportunity to create wealth in today’s environment in my estimation.

Mission Matters

Rae Williams: What do you think or what would you say is the unique or central idea from your book that people can take action on this week?

Adam H. Michaels: Well, I think that the goal is to kind of give people a roadmap through illustration and observation of a variety of different businesses of what it is. You know, one is, we really take a look at a deep dive into the history and kind of the environment that’s out there and what’s going on.

The truth of the matter is that consumers are, have changed dramatically. Pretty much, everything has changed when it comes to dealing with consumers, a lot of that is predicated on their being bombarded by messages from the moment they wake up to the moment they go to sleep.

You know, the internet and smart phones and the maturation of those things has made consumers more informed and also more reluctant to engage than at any other time in history. We talk about this reality, what I call the reflexive no, which is the knee jerk response to anybody saying, “Would you like to,” or, “Can I help you find something,” and you immediately go, “No, I’m just looking.”

You know, understanding that this consumer behavior has changed and that, really, you have to drive value as your primary modus operandi, regardless of its internal stakeholder or external stake holder. There is this very different appetite for what businesses bring to the table in today’s environment. We talk about the history and then we talk about you know, creating the right mission like an authentic mission.

Mission statements aren’t just reserved for a plaque in the lobby anymore.

There’s really a very high level of expectation on delivering on that every single day and if you don’t, then your employees are going to leave and the company with the best employees always seems to win disproportionately over the companies that don’t do those things.

We kind of provide that roadmap for people that are inside of a company that are trying to affect change or for people that are searching for the right place to spend their energy or time or from a sense of trying to attract the right talent.

We talk about each of these different things and in great detail and hopefully give people a roadmap to self-identify—are you a tugboat or are you a lighthouse? If you’re a tugboat, here are some ways that you can change so that you can actually have success and really separate yourself from the vast majority of the marketplace. You know, will be complacently comfortable in their mediocrity.

Bringing Talent In

Rae Williams: How are we attracting the talent that we want with our businesses right now?

Adam H. Michaels: What’s interesting is that it’s never been more important to help have your people, your internal stakeholders become advocates for you. A lot of businesses still fail to understand the importance of trying to differentiate in the landscape of what you bring to your internal stakeholders.

From a business standpoint, I always wanted my organization to become synonymous with entrepreneurs, right? I think the first thing that businesses need to understand is that indentured servitude is not viable.

A lot of people will measure like their success by how long people stay, and I think the more important thing to do is to measure your success by what people say after they leave. We know that employee transience is increasing at a very rapid pace, right?

The average employee only stays at a company 4.4 years—that’s almost 40% less than it was just a decade ago.

If you look at the best companies, you know, the companies that you would say are synonymous with greatness in our society, companies like Google, their employee tenure is even less. A lot of that’s because people go with a certain expectation to get something from that relationship.

The days of birth, school, work, death, where you’re going to work at one company for 40 years for the rest of your life, they’re long gone, they’re behind, they’re just not a reality.

Businesses that are still thinking that way of how do I retain people, how do I keep them here for a long time I think is you know, is misguided. I think that realistically, if you reverse that you think about what value can I bring to people so that they can launch out of here,

This can be a launchpad for them to go on to something else and then they become advocates and for that next generation of people that want to come and learn all the things that is possible inside your ecosystem. That’s a big departure because you know, the CFO and the financial people a lot of times are saying, “Well, what if we invest all this money in our people and they leave?”

The counterpoint is what if we don’t invest the money and they stay? I think that when you make the investment, knowing they’re going to leave, understanding that they’re going to be advocate for the next generation is a big deal.

I think that, ultimately, identifying what it is that you’re looking for in talent, what are the qualities and characteristics that are non-negotiables? You know, in terms of commitment and skill-wise and every business is different, right?

Every business has a certain set of needs and requirements. If you’re a computer science company, you’re looking for a different type of employee than a sales organization. Both of them understand who they’re looking for. But it’s about what value you bring to that person, in terms of their professional development, in terms of their growth—can you be a boost on that journey so that they can go on and do more amazing things.

I always wanted to be the launchpad for that next generation of businesses or individuals that when they went on and moved on, they’d say, “That’s a great place to cut your teeth.”

I think if that’s the focus, it’s key. I think that to make yourself that talent destination, you need to have a really robust professional development program where you’re not just putting them through HR requirements.

I tend to believe that the future for businesses, I think that as colleges and universities become almost unaffordable for the vast majority of people and the value becomes less and less, I think that time at a company potentially could be the differentiator, right?

You could almost get a Google MBA, and I think that this is a high likelihood that we’re going to see businesses start to commit to their professional development and learning in that manner. If hospitals like NYU can give away free medical school, why can’t corporations give away the equivalent?

I think with online learning and all of the available resources out there, there is real potential for it. I think that there’s also this real strong commitment to philanthropic endeavors. I think to have a philosophy around doing good is really important to the vast majority of people and I think that helps you your business as a destination.

So those types of things have potential opportunities to differentiate yourself in the market place. I think that was your question.

Leadership Non-Negotiables

Rae Williams: Let’s talk about the leadership non-negotiables. What are those and why are they not negotiable?

Adam H. Michaels: I think that employees are tired of watching people that claim to be in this titles masquerade in their position declaring themselves as leader. Or making statements of altruism when they are completely self-absorbed, right?

Way too many leaders pound their chest and nobody wants a leader to be a martyr. That is not what we are looking for.

A lot of people are in leadership positions that have no place in leadership.

They were great performers or they were really good producers but that doesn’t mean that they’re able to inspire and motivate and captivate the audience.

In today’s environment, the businesses that are most successful, the leaders within them are like the new rock stars. They have charisma and they have a certain texture to them that authentically draws a tribe of people to them. They are able to really set priorities that perpetuate the organization’s culture through their own individual actions and behavior.

A lot of times what happens is you see that people in these leadership roles that aren’t really leaders, they operate in a bubble of self-importance. They were removed from the trenches so long ago they have lost any sort of connectedness to the front line or to what is happening at the grassroots level. And so what they do in that bubble is they grow insensitive and intolerant of what is actually taking place, and they have a real difficulty with messaging.

They, a lot of times, are reluctant to have courageous conversations or get real feedback or create an environment where thoughtful disagreement is not only accepted but encouraged. So a lot of times what you have it people that are just going through the motions in those businesses, right? And you’ve got to create an environment where that is not the case.

Leadership is critical to the health of an organization, and in a lighthouse business it is related in three different pillars, right? So we talk about context, consistency, and compassion.

Tugboats are religiously shrouded in secrecy. So typically there is power that consolidates at the top. Often it is like these closed doors and secret meetings and compendiums of information that are not shared and ulterior motives…what ultimately ends up happening is those kinds of things permeate into the core of the organization.

Everybody starts to speculate and people are nervous and there is this constant threat of is the company going to be sold, is leadership going to make some crazy change.

Lighthouses on the other hand are led by competent caring leaders who recognize that context changes everything. That is not to say that nothing is off limits, right? But these leaders recognize that the wisdom of sharing information with people tends to get people unified towards a common mission.

They share things with how the company makes money. Why it is in a certain market, why it avoids certain markets. They talk about the talent acquisition plans, they talk about the challenges that the company is facing. They talk about opportunities, they talk about shareholder expectations.

So they are just a lot more transparent in terms of where one is going. Truthfully that transparency eliminates a lot of that speculation.

So a lot of times the context is about good news and bad news and how we deal with all of it. The leader in a lighthouse organization masters the art and science between these two things, between drawing people in while shielding them from the necessities of some periodic challenge, keeping people optimistic towards that end goal.

One of the great features of the lighthouse business is that they have a central vision or a central theme by which every decision is measured. So if everybody is pulling in that same direction then you don’t worry about temporary conditions and challenges and I talk in the book about one of my old clients which was SpaceX.

I talk about how the first time I went there I had no real sense of what they were doing other than they were building rockets. Everybody in the building was wearing these shirts that said, “Occupy Mars.” I asked the HR director what that was all about. And he looked at me dumbfounded that I didn’t know.

He said, “Well, Elon Musk believes that the only way for us as a people, as the human race to survive the extinction event is to be bi-planetary. So the only reason that we exist is to go to Mars.”

My mind was just blown. Everything I understand about SpaceX from that point forward—why people are working 20 hour days and not complaining about it and people were happy and excited and it was full of a buzz of enthusiasm even the face of failures and challenges and so forth—really that central idea propelled them forward.

Consistency

So the second thing after context is consistency. Lighthouse leaders strive for consistency even in the face of change. Change is something that is very consistent. It is always there, but we need to have some sort of acknowledgement that though change is constant and is going to impact professional and personal lives, lighthouse leaders have this opportunity to serve as a stabilizing force.

They do this through public control of their emotions and consistency in our own actions in spite of the changing conditions. So what you see a lot of times in tugboat businesses are these really irrational kind of leaders that go off the handle in a moment’s notice or they yell or scream or are just unprofessional in a dynamic way and they feel like their position or their authority gives them the right to do that.

That is one of the most damaging things.

We no longer have the ability to live in this world where there is total transparency because of social media. We can’t allow circumstances, whether they are positive or negative, to impact our choice to live out or core values every single day. Lighthouse leaders are unapologetically optimistic, and they are a light source unto themselves. This idea of being a light—ultimately what happens is, that then is magnified by the people below you and below and below throughout the organization.

One of the challenges that leaders face, or one of the advantages that they have is we don’t become what we want or we don’t get what we want.

We get the combination of who we are and what we are willing to tolerate.

So lighthouse leaders have to be consistent and optimistic, and then ultimately what happens is their people become consistent and optimistic and it permeates through the organization. If you are irrational, if you are a power hungry individual who is constantly going off the handle, you are going to create an environment that is like that.

Lighthouse leaders realize that while they inhabit their role, they are subjected to tremendous scrutiny. When you are in a leadership role, you open yourself up to tremendous scrutiny. They have to embrace this idea.

They have to appreciate that integrity means doing what they said they’re going to do when they say they’re going to do it, even when it is inconvenient. They know that the ultimate duty of being a leader is to assign the success and the achievements to the organization and to others. And embrace the failures as theirs.

This is another fatal flaw of the tugboat—they point at other people for the reason of their failure as opposed to owning the fact that it was them that didn’t make the investment or them that chose the wrong leadership or that made an error in the marketing strategy.

Tugboats fire everybody out there and they tend to be narcissistic and really think that they are the reason that things succeed and don’t fail. They start to talk about how people are overpaid or lazy or ineffective or they refer to a period of time as the lost this or lost that as opposed to saying, “You know what? This is my fault and I own it and we are going to fix it.”

Leaders are cultural purveyors in the organization.

You know the old saying of “to whom much is given much is required.” The difference between tugboat leader and lighthouse leaders—the tugboat leader thinks that they are kind of immune to the rules, that they don’t apply to them.

The lighthouse leader on the other hand assumes the responsibility for modeling what the culture looks like and that can be hard at times. Particularly when we haven’t been innovative enough or we haven’t invested in the right resources, so we’ve got to find that balance.

Compassion

The third quality is compassion. Whoever said, “It is not personal, it’s business,” that has tugboat written all over it.

I think that until robots take over the world, businesses are inherently about people. There is a reason why servant leadership has made its way into the psyche of our society. If you aspire to be a leader who really connects with the minds and hearts of their people at some level, you’ve got to be motivated by compassion.

There is this EQ thing we talk about all the time. But lighthouse leaders know that compassion isn’t just a feeling. It is trying to maintain the euphoria of the first kiss as opposed to the kind of apathy of a relationship that has been there for a long time. And just like personal relationships are built to last a lifetime, compassion in a professional setting is commitment.

You’ve got to commit to this mission and commit to your people.

When we make that commitment in our relationships—whether it is clients or people—as soon as somebody feels like they are bringing a disproportionate amount of value into the relationship, that relationship ends. This compassion is a two way street. It goes beyond just saying thank you for doing a great job. Compassion goes into the ordinary office pleasantries that make people feel valued and special.

It is a mindset of intentional actions and commitment over the long term, but it is even simple as don’t ask a question unless you are prepared to get the answer. You know one of the things that I always tell my people is don’t say “How’s it going?” if you don’t have the time or the energy to actually stand there and listen to the answer.

Just say good morning and move on. And so you see, I have been in many situations where I have watched leaders ask a question and then they are busy looking behind the other, behind the person for whoever else is walking into the room. So bottom line, lighthouse leaders are vital to the DNA and they define the culture through their actions and behaviors. It is that combination of compassion and context and consistency.

A Challenge for Listeners

Rae Williams: What is one thing listeners can do from your book that will change their life, change their business?

Adam H. Michaels: The entire book has a series of reflection questions. I think that this book isn’t one of those ones where you should read it fast. I think that when you start to read it, the stories are funny and some of them are interesting observations and there is a balance between trying to make it really readable and enjoyable and also hard hitting and impactful.

We ask people to read a chapter and then absorb the reflection questions and actually really think about their business and how they can apply it. It is not targeted just for entrepreneurs. We force people to ask really important questions about the role they play.

I tend to believe that everybody is a leader regardless if you’ve got the C on your shirt, just because my son’s a soccer player who is 10 years old and he is the captain of the team and he is in the process of potentially changing club teams or moving up to a higher level—he said, “Well I might not be the captain anymore.”

And I said to him, “Well just because you don’t have the C on your shirt doesn’t mean you are not a leader.”

I think that the real challenge for anybody reading this book is how do you take these principles and apply it regardless of the role?

So if you own a business it is pretty easy, you can start to affect change tomorrow. If you are a number two, you may have to balance between what’s the leader’s vision and being able to get there by and really become much more of a lighthouse and it probably requires you giving them a copy of this book and getting them to understand the principles of it.

I think the further you go down the food chain, how can you affect change? Well we believe at our core that you can affect change in a department, in a team, and you can become a lighthouse inside of a larger organization. You could become a department that everybody wants to work in.

You can become the team within a division that everybody aspires to be a part of. I think that it is dissecting it down to what you can do and effectively change. Each of the chapters has these reflection questions.

We think that rather than just going on and going to the next chapter, really sit down and look at those questions and then draft out the answers. Start to build yourself the blueprint for your own lighthouse.

Rae Williams: How can we get into contact with you if we want to know more?

Adam H. Michaels: I am all over social media, Adam H. Michaels. Elevate with Adam on Facebook and YouTube, @ahmichaels on Twitter and Medium. Adam H. Michaels is all over the place in various different locations.

The easiest way to connect with me is probably on LinkedIn—that’s the communication place. If you like podcasts, we’ve got a podcast called The Lighthouse where we talk with the inspirational leaders and people that are measurably trying to change the game through their lighthouse philosophies and strategies.

Those are the best places, or you can get me at adam@adamhmichaels.com if you want to send me a direct email.