What To Give Your Team So They Produce Results
Eben Pagan teaches his 'entrepreneurial leadership' philosophy, explaining how to manage high-performing team members by giving them freedom and autonomy rather than micromanagement. He shares how this approach helped him attract and retain star performers while building his virtual business.
Teachings 8
The highest form of efficiency comes from spontaneous cooperation of free people, not authoritarian control
Bernard Baruch quote: 'the highest and best form of efficiency is the spontaneous cooperation of a free people' - Pagan uses this as foundation for his management philosophy
Star performers need to contribute 3-10x more value than what you pay them for the business math to work
Pagan explains the basic math: 'I need to pay them a dollar and get three back or five back or 10' - this realization 'shattered the paradigm' of traditional paycheck authority
Stars don't respond well to being told what to do - authoritarian tactics create friction like 'pouring sand in their motor'
Pagan discovered through experience with star performers that 'they don't respond well to authoritarian tactics of being told what to do of being put in a place and said here's your role'
Tell star performers they're the expert, you need them to take responsibility and tell you what needs to be done
Pagan's approach: 'I need you to tell me what we need to do I need you to take responsibility for things you are the expert I am not'
Take full responsibility when team members don't perform - it's 100% the leader's fault, not theirs
Pagan states: 'if something gets screwed up it was my responsibility' and 'if there's someone in your organization that's not a star it's 100% your responsibility you created the environment'
Organization charts should be drawn in pencil and never formalized - keep structure flexible and evolving
Robert Townsend (former Avis CEO) quote: 'draw organization charts in pencil never formalize print and circulate them' - Pagan uses this for growing companies as 'active growing evolving organisms'
Apply the 'free child' education philosophy to business - provide resources and get out of their way
Pagan studied A.S. Neill's Summerhill school philosophy after years of his mother telling him about being raised as a 'free child' - Neill believed kids 'didn't need to be coerced into learning' and you should 'get out of their way and put resources out there'
If you have to force greatness, you have the wrong person - stars will perform naturally and you'll have to hold them back
Pagan explains: 'if you find a star they will perform you will have to hold them back they will make it happen' and if they're not performing 'you got the wrong person'
Quotable Moments 5
“the highest and best form of efficiency is the spontaneous cooperation of a free people”
— Bernard Baruch“I need you to tell me what we need to do I need you to take responsibility for things you are the expert I am not”
— Eben Pagan“if there's someone in your organization that's not a star it's 100% your responsibility you created the environment you created the context”
— Eben Pagan“if you find a star they will perform you will have to hold them back they will make it happen”
— Eben Pagan“that's like pouring sand in their motor”
— Eben Pagan
How to Manage Star Performers with Entrepreneurial Leadership
Eben Pagan's method for attracting and retaining high-performing team members through freedom-based management
- 1
Recognize the value equation
Understand that star performers must contribute 3-10x more value than their cost for the business math to work
- 2
Abandon paycheck authority
Stop using 'I sign your paycheck' mentality since their contribution exceeds their compensation
- 3
Position them as the expert
Tell them 'you are the expert I am not' and ask them to tell you what needs to be done
- 4
Give them responsibility
Let them take responsibility for decisions and outcomes in their area of expertise
- 5
Take responsibility for results
If they don't perform, recognize it's 100% your responsibility for hiring wrong or creating wrong environment
- 6
Provide resources and get out of the way
Apply the 'free child' philosophy - give them what they need and let natural talent emerge
Questions Answered
How should entrepreneurs manage high-performing team members?
“I need you to tell me what we need to do I need you to take responsibility for things you are the expert I am not”
— Eben Pagan▶ 3:36
Give them freedom and autonomy rather than control. Tell them they're the expert, let them take responsibility for decisions, and provide resources while getting out of their way.
What's the math behind hiring star performers in business?
“I need to pay them a dollar and get three back or five back or 10 what they're giving me is worth more than what I'm giving them”
— Eben Pagan▶ 2:05
Star performers must contribute 3-10 times more value than what you pay them for the business to grow and be profitable. This value differential changes the traditional power dynamic.
Who is responsible when team members don't perform?
“if there's someone in your organization that's not a star it's 100% your responsibility you created the environment you created the context”
— Eben Pagan▶ 7:42
The leader is 100% responsible for team member non-performance. It means you either hired the wrong person or created the wrong environment for them to succeed.
How do you know if you have a star performer on your team?
“if you find a star they will perform you will have to hold them back they will make it happen”
— Eben Pagan▶ 6:42
Stars will naturally perform at high levels and you'll have to hold them back rather than push them forward. If you're forcing performance, you have the wrong person.
What education philosophy applies to business team management?
“his idea was that kids had everything that they needed they didn't need to be coerced into learning they didn't need authoritarian figures using external methods to make them learn”
— Eben Pagan▶ 5:38
The 'free child' philosophy from Summerhill school - provide resources and get out of their way to let natural potential emerge, rather than using coercive methods.
Why should organization charts be drawn in pencil?
“draw organization charts in pencil never formalize print and circulate them”
— Eben Pagan▶ 1:32
Growing companies are evolving organisms that need flexible structure. Formalizing rigid hierarchies prevents the natural adaptation needed for growth.
Summary
The Philosophy of Entrepreneurial Leadership
Eben introduces his approach to managing growing companies differently than established corporations. He emphasizes that entrepreneurial companies are 'active growing evolving organisms' that require flexible, freedom-based leadership rather than rigid hierarchical control.
Why Traditional Management Fails with Stars
The fundamental math of star performers contributing 3-10x their cost destroys the traditional 'I sign your paycheck' authority model. High performers respond poorly to authoritarian tactics, which creates friction like 'pouring sand in their motor' rather than enabling peak performance.
The Free Child Philosophy Applied to Business
Drawing from A.S. Neill's Summerhill school approach, Eben explains how giving team members freedom and resources while getting out of their way allows natural talent to emerge. This requires positioning team members as experts and taking full responsibility for their success or failure as a leader.
Counterpoint
Claim: “Managers should control team members because they sign the paychecks”
Reframe: Star performers contribute more value than they cost, so traditional paycheck authority doesn't apply
Pagan realized 'the money that I am paying one of these team members is not worth anything near what they are contributing' - this 'shattered this whole paradigm of I sign your paycheck so you should do what I say'
Claim: “Good management means clearly defining roles and telling people what to do”
Reframe: Stars perform best when given freedom to define their own roles and take responsibility
Pagan found that telling stars 'here's your role here's your job this is what you're going to do' creates friction 'like pouring sand in their motor' - instead he tells them 'you are the expert I am not'
Claim: “When team members don't perform, it's their fault and their responsibility”
Reframe: Non-performance is 100% the leader's responsibility for creating the wrong environment or hiring the wrong person
Pagan states: 'if there's someone in your organization that's not a star it's 100% your responsibility you created the environment you created the context'
Key Points 8
The highest form of efficiency comes from spontaneous cooperation of free people, not authoritarian control
▶ 1:02Star performers need to contribute 3-10x more value than what you pay them for the business math to work
▶ 2:05Stars don't respond well to being told what to do - authoritarian tactics create friction like 'pouring sand in their motor'
▶ 2:35Tell star performers they're the expert, you need them to take responsibility and tell you what needs to be done
▶ 3:36Take full responsibility when team members don't perform - it's 100% the leader's fault, not theirs
▶ 3:36Organization charts should be drawn in pencil and never formalized - keep structure flexible and evolving
▶ 1:32Apply the 'free child' education philosophy to business - provide resources and get out of their way
▶ 5:38If you have to force greatness, you have the wrong person - stars will perform naturally and you'll have to hold them back
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Topics
Coaching Strategies
Business Frameworks
Common Mistakes