Business Musings: Writers, Publishers, And The Peter Principle

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You all have been so wonderful in keeping me up to date on the new stuff that’s happened since I moved. I’m going to get to a bunch of the tips you’ve sent me, but I’m still doing more catch-up than I want. So some future posts will be analysis-heavy and some won’t.

Some of the things you’ve sent me have already had others weigh in on them in a much better way than I can. The first of those is what’s being called #cockygate on Twitter.

That’s the case of the romance writer who apparently trademarked the word “Cocky” in a specific font because she uses it in the title of her books. She’s been sending cease-and-desist letters to other authors who use the word “cocky” in the title of their books, whether or not the books predate hers.

A lot of people have weighed in on this, including Courtney Milan on Twitter. Follow her thread because it has some up-to-date (as of Sunday) links to the entire situation, plus some good legal analysis. On Monday, a writer and retired lawyer, Kevin Kneupper, announced that he had filed a petition with the U.S. Patent and Trademark Office to invalidate the trademark.  I’m sure that by the time you read this, more will have happened on this issue.

The other big to-do is about some small companies (and large ones) wanting derivative rights in perpetuity. Writer Beware has a good post on why you shouldn’t sign with anyone who does this.  (Or who refuses to negotiate the terms to something less draconian.)

I know a number of you have sent me this because of my contract blogs from a few years ago. I’ve dealt with the topic of rights you should sell in depth here on the website and in a book called Closing The Deal On Your Terms, which you can find here.

An aside: Closing The Deal was in a Storybundle for writers last year. This year, I’ve curated a similar Storybundle using my current nonfiction book, Creating Your Author Brand. You should pick up the bundle, not just for my book, but for the seven other books that cover topics you need, such as M.L. Buchman’s Estate Planning For Authors. (Some of you will remember that I started an estate planning project but haven’t gotten to finishing it. Matt’s book is what I would have done, more or less.) There’s also an extensive WMG Publishing lecture, and a 30-day course for writers. All of that for $15. So, rather than feel bad that you missed a good deal when I mention the book a year from now, pick it up in the bundle.

Finally, Marie Force is starting an Indie Author Support Network. I’ve been too busy to give the network the attention I need to give it in order to blog about it, but I wanted to point it out to you as soon as I could. Check out @author_indie on Twitter for more information. (And I will get to this soon, I hope!)

So, this week…I’m trying to catch up on promotion for the above-mentioned Storybundle. I’ve also got a lot of other things to do with website/social media/business maintenance. Not to mention continuing the move, running businesses from afar, and the works in progress. I’ve caught up on some short fiction (writing it), and the never-ending novel finally gained some steam.

In fact, today I was going to do 1,000 words on the novel, then turn to the blog. Instead, I did 3,000 words on the novel and have just gotten to the blog. So I’m a bit fried, which is why I’m not doing one of the longer planned posts.

Instead, I’m starting with a term from the late 1960s. The Peter Principle came from a book of the same title by Laurence J. Peter (co-authored by Raymond Hull). Peter was an educational scholar (whatever that means) who studied hierarchies. And, based on his research, he postulated that people get promoted until they reach the level of maximum incompetence.

I remember the book clearly, because it sat on an end table in my parents’ house for a long time—long enough for me to read the dang thing. I suspect my father related to the book in part because he was living a life he didn’t want to live, thanks to his rather hapless role as a whistleblower at a small prestigious college in the mid-1960s. I don’t think he thought he was incompetent, but I suspect he thought the people he blew the whistle on were.

But that could simply be armchair psychology.

Be that as it may, those of us who grew up around the time the book came out took that principle as proven fact. It became a joke, but also a cautionary tale. At some point, we all figured, we would reach the point of maximum incompetence if we were in a hierarchical system.

It also gave us a bit of self-awareness—the wherewithal to ask if we had risen above our skill set.

Dean and I encountered this at Pulphouse Publishing in the early 1990s. We were both aware that we’re not detail people when it comes to management or the day-to-day running of a large company. Routine bores both of us, and the fuddy-duddy details of good management make our eyes cross.

That we share this trait is a problem, one we have worked years to overcome—not by changing ourselves, but by finding someone with a different skill set to handle the job that we can’t do well.

We stumbled into that position at Pulphouse. We never expected the level of success we had achieved back then, let alone planned for any kind of future in that company. It grew too fast for us to handle the employees or the company maintenance properly.

And then we realized that in order to make the company run well, we would need someone who could handle creative types and handle the running of a large business with equal skill. We tried to hire someone into that position, spending weeks interviewing possible candidates. We knew what we were looking for, kinda, but not exactly. And whenever we found a possible candidate, we realized that we couldn’t afford that person.

Dean and I ended up continuing to run the company, trying to modify our skill sets so that we could get the company to the place where we could afford someone to help us manage the company properly.

We never got there. The business collapsed because of a variety of factors, including some bad choices by us in a suddenly bad economic situation. Would someone we hired have made similar mistakes? I don’t know, because that person also needed one other very hard-to-find skill set: that person had to be able to stand up to me and Dean.

That’s not easy now, and it was harder then. We had Debb de Noux (then Debra Gray Cook) running the day to day operations of the company, and she could handle Dean (although they had epic fights), but she too knew she didn’t have the requisite skills to handle the move to the next level. She was as involved in hiring as we were, and none of us managed to get the company working properly. She met her future husband, mystery writer O’Neil de Noux, and moved to New Orleans, and without the third leg of the stool, we weren’t able to even keep up the pretense of success.

Fast forward a lot of years to the start of WMG Publishing. As indie publishing became viable, Dean and I decided to start another publishing company, well aware of the mistakes we had made in the first.

As we started the company, we knew that our first hire wasn’t some gopher who could do a few tasks, but someone who could step in, with the right amount of training, and fill in that slot we never could fill at Pulphouse.

We searched and searched and searched for someone, and despaired of finding them. And then I noticed Allyson Longueira, who was in a dead end job at the local small town newspaper even though she had national journalism and design credentials. (A move to Oregon for family reasons took her out of her natural job market.) She was putting up with small town politics, owners who were impossible to work with, and still managing to put out a quality product, even as her staff got cut and her budget slashed. She was, in short, the most competent person I had ever seen.

We felt her out to see if she was even interested in moving jobs. She was. We told her our timeline and our goal to have her first year’s salary in the bank before we hired her. But, we told her, we couldn’t promise more than a year. If we ran out of money, we would have to let her go after that first year.

She agreed anyway, figuring if we went down, she would know it ahead of time and have feelers out for somewhere new.

In fact, the company is doing very well, in no small part to her. If we hadn’t found her, we would have found ourselves in the same situation we had been at during those last years of Pulphouse—with a viable company and no one with the proper skill set to run it.

Allyson has the proper skill set plus maybe a dozen others. Even so, she still had to learn the book publishing industry and the new indie publishing industry. She also had to learn how to run retail businesses as they got folded into the WMG umbrella.

She has been up to the task, hiring excellent people to fill the right roles in the company, and streamlining things so that the company works better than we had ever thought.

Dean and I brought on Allyson with the goal of being remote owners, whose hands were not on the company’s day-to-day business. It took years to get here—in part because it’s hard to relinquish the day-to-day when you’ve been enmeshed in it. Long story short, though, this move to Vegas is possible because we found the right person to do the job that Dean and I are not qualified to do.

And we planned on it.

But only after a major failure. We learned this lesson the hard way, and in the new business corrected that problem first.

That’s why successful business owners usually have a number of massive failures under their belts before they have a business that takes off.

What worries me about a lot of indie writers is that they don’t really realize that they’re running small businesses. They think they can add employees or “virtual assistants” or whatever they want to call the people they pay to do jobs they can’t do. They think they can handle the bookkeeping and the publishing details and the negotiating and the writing and the subsidiary rights and the advertising and the…and the…and the… in a never-ending pattern.

But it will end, either with the writer collapsing under the weight of the work they’re doing or with the business collapsing in the ups and downs of the business cycle.

The business cycle is the same for small businesses everywhere. That’s why I’ve linked to this article by Neil C. Churchill and Virginia L. Lewis in the Harvard Business Review more than once.

In the middle of the article, Churchill and Lewis talk about the need for the owner of the business to learn to delegate. They also discuss this about a mature and (at the moment) successful small business:

Among the important tasks are to make sure the basic business stays profitable so that it will not outrun its source of cash and to develop managers to meet the needs of the growing business. This second task requires hiring managers with an eye to the company’s future rather than its current condition.

We failed to do that with Pulphouse, especially on the hiring people with the eye to the future (although cash flow also became a serious problem). We made sure our first hire when we started WMG was someone who could grow with the company. It was a completely different way of looking at and managing growth.

If you haven’t read the article, and you are an indie writer with a growing small business, I suggest that you not only read it, but save it and reread it every few months. Figure out where you are in the five stages that Churchill and Lewis list, and look hard at the problems that exist in those stages.

I’ve owned several small businesses and each one has hit the stages described in the article. That’s not just because I’m the unifying factor in those businesses, but also because those businesses—as different as they were—were small businesses, with all the things that small businesses hold in common.

If you’re going to maintain your writing business and then grow it into a larger business, you will need to plan how you will handle these stages. I know some writers who throttle their growth unrealistically just so they can keep their hands on every part of the business. I know others who are driving themselves crazy because they want to be everything to everyone and they can’t achieve that.

And I know still other writers whose ambitions are outpacing their income and their ability to manage the employees they have hired. I tend to look away from those small businesses, because I’ve been on that rollercoaster and I know what it feels like when the coaster runs out of rail.

The reason this topic came up this week, though, is because we’ve been talking about the future of WMG when Dean and I spend the bulk of our time in Nevada while the business remains in Oregon. Even though we set up the business for this very contingency, we still have to work out the details. Some of them are easy because the systems to handle them were set up long ago. And some require brand-new systems.

The biggest key is sharing information in a way that allows everyone in the loop to verify what they’ve seen and to still be a part of the company in a meaningful manner. Part of verification has to include trust. And trust has to be earned.

But when I mention “trust,” I don’t just mean that owners have to trust the people they employ. I also mean that the employees have to trust that the owners will allow them to do the jobs they were hired for, without interference or crazy-making tendencies.

When you’re a creative—and writers are—the crazy-making sometimes comes with the territory. That’s why, when you’re running a business, you need someone with a cooler head to handle the day to day.

You will also need someone who can speak truth to you, who will ask the right questions to get you to figure out where the business you run needs to be. Those questions are sometimes hard—such as “would [this aspect] of the business be better off without you touching it?” If the answer is yes, then you need to be able to hear that—and act on it.

It sounds easy. It’s not. Sometimes admitting that you’re part of the problem even when the business would not exist if you hadn’t started it is a lot harder than it would seem. Because your writing business is unique. Any small business you start will be unique, even if that business is a common one. Think about all the jobs you’ve worked, even the ones in the same industry. No job is the same, and no company is the same as another.

Each has its own problems and each will have its own set of solutions.

That, in some ways, is the toughest thing about being a small business owner. At some point, you will have to wing it—whatever “it” is. You’ll be flying blind. You’ll be on the road in the dark—or whatever cliché you chose. That’s because no one will have ever been in that place in exactly the same way as you are at the moment, and so the answers to whatever problem you find yourself in aren’t simple black or white answers (Do this and succeed; do that and fail). The answers to the problems are often complicated and impossible to map out clearly—because no one has faced that exact problem in that exact way before.

That’s why, in business school, they give potential graduates a risk-management test. The higher the tolerance for risk, the better off the graduate will be if she’s involved in start-ups or high-end companies. The lower the tolerance for risk, the better off the graduate will be in an already-established business without a lot of the impossible choices that start-ups and big companies often face.

It’s even harder to run a start-up in a brand-new industry. Not only are you learning how to run that particular business, but you’re learning how to do it in an industry that often has no rules.

As I’ve written in past blog posts, indie publishing is moving into a more established phase. But that means that long-standing indie publishing businesses are also morphing into established companies. And, as Churchill and Lewis point out, established companies have widely different needs than start-ups or companies that limp along from one crisis to another.

Those companies require their owners and managers to make decisions based on future growth and long-term projections, rather than on getting from month to month unscathed. That’s a whole different mindset, and something many many small businesses do not survive.

You would do well to do some major self-analysis as we move into the second half of 2018. Figure out if you were ever promoted to the point of maximum incompetence in any job you ever held. Figure out if your skill set is beneficial to the company you run now, or if you would be better off stepping aside and finding someone to handle the things you are not all that good at.

It’s a tough analysis to make, and one you might want to enlist the help of a good friend or colleague. Someone you can bounce your thoughts off of without fear of reprisal. Because at some point, you’re going to have to decide whether or not to expand your business or keep it small. You’ll have to figure out if throttling that business will kill it or keep it alive. You’ll also have to figure out if growth will hurt what you want to do with that business.

As I said, there’s a template—the vague one offered by Churchill and Lewis—but nothing detailed. Because your small indie publishing company will look vastly different than your best friend’s small indie publishing company.

And, if you both manage your businesses right, you’ll make good (but different) choices based on what your businesses have become. With self-awareness, it’s possible to avoid the Peter Principle. But it takes a willingness to examine life and business and writing with a clear eye. Not one clouded by too much criticism, and not one crowded by rosy optimism either.

A lot of you are in a brand-new world. The best way to handle that world is admit that you’re running a small business in the first place. Then decide what that business is without you as a part of it. Tough thing to figure, right? Can it survive without you? Should it?

All difficult questions, and ones you’ll need to think about.

As you can tell, I have no easy answers here—because there are no easy answers.

If only there were.


If you want more thoughts on managing a writing business, check out the Storybundle that I mentioned above. The bundle has a couple of books on business planning  as well as some craft books and marketing books.

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“Business Musings: Writers, Publishing, and The Peter Principle,” copyright © 2018 by Kristine Kathryn Rusch.


5 thoughts on “Business Musings: Writers, Publishers, And The Peter Principle

  1. I completely agree with all of this, but I’m torn. I’m writing like crazy on lunches and after work, and trying to do all the other stuff I have to do. Arrange for covers, editing, marketing, keeping website updated, do some social media, and have a life. I’m trying very hard to be realistic but when you work full time and do this part time how do you figure out where the lines are when you still aren’t sure how most of these areas (outside telling the story I want to tell) should work.

    Note that I am trying to do this smart. I set up an LLC, have a separate business account, pay people to do the things I can’t (like covers, OMG I am so bad at that so worth the lack of stress to hire). In the near future I’ll probably need an accountant, but where/how do you figure out who to delegate to when you still aren’t sure what needs to be done?

    1. It sounds like you’re figuring it out, Melisa. You’ll know–if you’re aware–when you’ve got either too much on your plate, or you really need someone else to do the job. You’re already hiring people to do things you can’t. That’s how it goes. If you’re honest with yourself, you’ll see all those things you’re not able to do. Just make sure you can afford the help. That’s the other balance.

  2. I remember being told by the owner of a company that they didn’t want employees who weren’t willing to grow. I was an assistant manager and did my job really well. So they wanted to make me a manager, but I knew I was a much better lieutenant than a general. It infuriated me that they weren’t willing to let me stay at the level I was good at. I left them and they were so surprised when I quit.

  3. And this is why most people DON’T have their own business and work for someone else. Running your own business is HARD work!!! I think a LOT of people only look at the rewards, rather than look at EVERYTHING. Even simple stuff like: What do you do when you want to go on vacation? Are you going to let things go? Are you going to spend the ENTIRE vacation shackled to your work/writing? How will it impact your family, especially if you have kids??? If it were “easy,” everyone would do it. 😉

  4. Book marking the business article. Lots of meaty bits to chew upon. I still have to come to the realization that writing isn’t just about pumping out books and stories, it’s about creating that business so that it’s all managed properly. Going to have to keep that in mind as things progress.
    Oh, and thanks for curating that story bundle. Slowly working through some of the books now between day to day tasks.

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