How Important Is Corporate Culture?

How important is company culture? Does it really matter to the bottom line?

Tony Hsieh, CEO of Zappos.com, thinks so. Tony is all over the business news these days, as his new book Delivering Happiness: A Path to Profits, Passion, and Purpose was recently published. His nation-wide book tour launches on August 14th.

Says Tony: "Our number one priority is company culture. The whole belief is that if we get the culture right, the rest of the stuff like building a brand and great customer service just happens on it's own."

Tony acknowledges that he looks long-term - 5 to 7 years out - and with that strategic outlook his ideas make sense. But they may not work well for those leaders who need to focus on immediate gains and so rely on more traditional practices such as hiring primarily for skills, or following call center scripts.

What stands out for me in reading his book - which I recommend, by the way - is that Tony insists his company really walk the talk. The company culture is based on ten core values that guide the employees like the Ten Commandments guide Christians. After the employees created their core values, they were incorporated into the hiring process by using interview questions that support each of the ten values. If a candidate doesn't pass the culture fit interview, they are not hired, even if their skills and knowledge are exemplary. Once hired, a candidate goes through training and a couple weeks on the job, after which they are offered $2,000 if they wish to quit the company.

The core values are not forgotten after the interview process. Fifty percent of an employee's performance review is based on how well they have upheld the core values. Every year, a new culture book is created by the employees themselves, where they write about their experiences of the core values.

Although Zappos.com was merged with Amazon.com last year, part of the agreement was that Zappos would operate independently and be able to keep it's culture.

It's wonderful to have employees that are all aligned with the purpose and culture of the company. With everyone so engaged, progress toward mutual goals is no doubt swift. However, I have to wonder whether so much emphasis on culture might result in a bias toward hiring similar behavior styles. And when everyone in the company is predominantly one or two behavior styles, blindspots are overlooked or are overruled by the dominant behavior styles. For example, if a company's employees and culture are primarily Persuader-Controller, then possible blindspots would be thorough analysis of options, cutting corners, following processes, and follow-up. I don't know that this occurs at Zappos, but I have seen similar trends in other companies.

Zappos.com is currently number 15 in Fortune's Best Companies to Work For. That's pretty darn good. But their employee turnover is 15% and REI, which is number 14 and in a similar industry, (and one of my former employers) has a turnover of 8%. If there is such an emphasis on hiring for the right fit, why is turnover 15%?

These are just a couple of the questions that came to mind as I read Delivering Happiness. My overall impression after reading the book is that Tony is a groundbreaker and a revolutionary manager. Tony’s standout traits as a leader are intelligence, creativity, integrity, and caring about the people in his company, and I don’t mean just employees. He talks about his customers and his vendors as much as about the Zappos staff. He applied learnings from the positive psychology movement to his business, which resulted in employees having more control over their promotions and pay, among other things. With a leader like Tony Hsieh in the business world, evolutionary management is alive and doing well.

And to answer the question about whether company culture affects the bottom line, well, take a look here at the most profitable companies in the world.
With the notable exception of Google (#4 on Best Companies to Work For and #47 on Most Profitable), none of them are known for emphasizing their positive corporate culture.

Be the Best Coach They Ever Had

In one of the exercises I facilitate in my management training classes, I ask the participants to think about the best “coaches” and “mentors” they have had in their lives. What qualities did these mentors have? What behaviors did they display?

“They brought out in me things I didn’t realize I could do – they challenged me and believed in me, even more than I believed in myself sometimes.”

“They were straight with me and I knew I could trust them.”

"I knew they were on my side.”

“They encouraged me.”

“They were good communicators – they listened well.”

“They knew me, and I felt they cared about me.”

“They spent time with me – because they wanted me to have success.”

“They walked their talk – that’s inspiring.”

Variations on these comments are repeated every time. In short, the best mentors and coaches inspired them to stretch and do their best by getting to know them well enough to understand their strengths, weaknesses and goals. They gave them helpful feedback, and encouraged them to take risks in order to develop their strengths and move forward. They were effective communicators, and even rarer, good listeners. They were trustworthy and honest.

These are the characteristics of a great manager, not just a great mentor or coach. Great managers bring out the best in their people, and everyone benefits.

Challenge yourself: can you list the strengths, weaknesses and goals of each of your employees? Do you know what motivates them? Challenging work tied to a larger purpose is the common denominator that motivates everyone. But what does that mean to your employees? What kind of challenging work would they be most successful at? What larger purpose do they want most to be a part of?

When I asked managers if they knew the answers to these questions, invariably they would say something like “I’ve known Val for 15 years. I know everything about her.” I would challenge them to call the employee they knew best on the phone during the class and ask them a series of questions. Every single time, the manager was surprised at some of the answers they received.

Don’t assume – take the time to have an in depth conversation. Do this, and you are on your way to becoming the one they describe when I ask them in the management training class: “Think of the best mentor or coach you ever had…..”

Creativity is the #1 Leadership Quality

In a recent survey of over 1,500 CEOs worldwide, creativity was chosen as the top leadership quality by 60% of the respondents.

The results speak directly to the CEOs’ perceptions of the degree of complexity in today’s marketplace. Economic, environmental, political, and other forces affecting business can be overwhelming and are increasing. The ability to create new processes, business models, products, and services that flex with these challenges is essential to success.

In addition to creative leadership, the report states the areas that need the most attention for business success are ‘customer intimacy’ – getting close to the customer to co-create products, services and processes – and ‘operating dexterity’ – the ability to streamline operations and change business models in order to maximize opportunities. Both these areas require a creative mindset and culture throughout the organization.

This is the first time in this biannual study from IBM that creativity has been the most important leadership quality. According to the IBM 2010 Global Chief Executive Officer Study, “Traditional approaches to managing organizations need fresh ideas – ideas that challenge the status quo.”

The most successful companies today have challenged the status quo, and continue to do so. Here are a few ways that these organizations lead and foster creativity:

• Google encourages their employees to work on projects they are passionate about with their 20% policy – 20% of their work time can be devoted to projects that have been initiated by them or their fellow employees.
• 3M has their “bootlegging policy”, where technical staff are encouraged to spend 15% of their time on their own projects.
• Corel developed iCapture, a tool where employee ideas can be documented; and iCouncil, a team that manages the process for utilizing the ideas.
• BoozAllenHamilton has a yearly “Ideas Festival” where employees are able to showcase their ideas to senior management.
• GE encourages “Time to Think”.

Two main obstacles to encouraging creativity at work are 1) fear of failure and 2) lack of time.

The wise leader will understand that these two potential roadblocks must be addressed in order for employees to contribute their creative ideas. Leaders should cultivate an environment where it is okay to try new things, to speak out, to challenge the current ways of doing things. Time for thinking, for brainstorming, for incubation and building of ideas needs to be incorporated into the workday.

Creative leaders develop an organizational culture where:

• Ideas are encouraged, valued, and generated freely.
• Ideas can be adjusted and morphed by others – an idea doesn’t have to be fully complete to be considered.
• Criteria for evaluating and a process for testing the ideas are in place, understood by employees, and active.
• Ideas are implemented and measured.
• People who deliver ideas are recognized.

When employees see that their ideas are taken seriously, and that there is in fact a system in place to make their ideas reality (and not just brushed off), creativity mushrooms. A creative environment will only be as strong as it’s leaders place value in it. And in today’s world, those leaders that encourage and take advantage of a creative culture will be known for their standout organizations.


Check out filmmaker David Lynch's take on "hooking" ideas.

Relax, and let some ideas flow, as you listen to this cover of Louis Armstrong's "I Get Ideas". I couldn't help but include this...

Leading => Self-Confidence is Key

A month ago I participated in a teleseminar with Marshall Goldsmith, a leading executive coach and author of numerous books, including Mojo and What Got You Here Won’t Get You There. Marshall shared a lot of sage advice about coaching executives, but one piece about women leaders struck me. “The average woman is a better leader than the average man,” he said. What held a lot of women back, according to him, was that women are in general “more perfectionistic”, “too hard on themselves”, and “carry around a lot of guilt.” The result is they can come across as a little less confident than men.

Recently, a colleague’s feedback for a female client included the advice: “Trust yourself.” Another female client stated she wanted to work on her confidence at work.

Women at work often exhibit less confidence than men, but men can struggle with this issue too. Even when we think we do trust and believe in ourselves, we can sometimes give off the impression that we don’t by our choice of words and demeanor. Competence, knowledge, interpersonal skills and education may be higher or equal to colleagues, but that apparent lack of self-confidence results in fewer promotions, less influence and stifled success.

In an article in this week's Newsweek entitled "The Beauty Advantage" about how looks influences one’s career, a statement buried in the piece caught my attention: “Asked to rank employee attributes in order of importance, … (hiring) managers placed looks above education: of nine character traits, it came in third, below experience (No. 1) and confidence (No. 2) but above “where a candidate went to school” (No. 4).”

Confidence is the second most important attribute that managers look for in a potential employee.

One of the characteristics of a good leader is having a presence that conveys authority and a comfort in your own skin. Don’t second-guess yourself. Don’t apologize for your ideas. Don’t waver in your convictions. Get rid of the guilt! Self-confidence is not the same thing as arrogance, cockiness, or being ego-driven. Self-confidence is about owning your talents and accomplishments and developing your own potential.

It begins with knowing yourself well. And that is the foundation of an excellent leader.


PepsiCo CEO Indra Nooyi talks about her "extraordinary" guilt which she consciously confronted and diminished a year before she became CEO.

Communication Styles => Recency and Primacy

I was watching a rerun of Bones on Hulu and Dr. Temperance Brennan, the forensic anthropologist, interrupted her excited assistant. “Facts first, then conclusions,” she stated in her matter-of-fact way. It reminded me of how most scientific types like to receive their information: data and reasoning first, then a conclusion. Placing the most important part of the communication last is called recency.

If you’ve ever communicated to someone using recency, and then were interrupted with something like “just give me the bottom line,” then you are speaking with someone who prefers to be communicated using primacy, where the most important part of the communication is placed first.

In studies of human behavior, four ‘styles’ have been identified. All of us have at least some aspects of each of the styles, however we usually have a primary style that is most comfortable and natural for us. If you’ve been exposed to DiSC or a similar behavior or social style system, you know that two of the styles prefer process-oriented thinking and behaviors and two prefer a more expedient, intuitive style.

The two styles that are process-oriented – called Analyzers (also known as “C”, Analytical, or Blue in some style systems) and Stabilizers (aka “S”, Amiable or Green) - prefer recency. Like Dr. Brennan, they prefer knowing that a logical, sequential set of facts and ideas have resulted in the conclusion presented. If you fail to build your case in a logical, rational manner, your argument will be disregarded as faulty and/or rash.

Expedient styles – Controllers (aka “D”, Driver, or Red) and Persuaders (“I”, Expressive or Yellow) - prefer primacy. Present the most important, bottom-line information first. Then additional information can be shared as needed in order to make decisions or gain understanding. If you begin your conversation with a lot of facts and details, you will only frustrate them and they may get impatient and interrupt, or they will tune you out. Either way, your communication will not get through as you desire.

If you are presenting to a group with mixed styles, present your information in primacy fashion. Otherwise, you run the risk of losing your expedient listeners right away. Present the most salient facts and data to support your conclusions, but if there are a lot, have a separate handout that you can give to those who want the data. Process types will greatly appreciate it if you email this supporting data before the meeting. This gives them the time they need to pore over it and they will feel well prepared for your presentation. Don’t expect the expedient types to have opened the attachment at all.

Presenting information in the manner that your listener prefers increases the likelihood that they will connect with you and accept your recommendations. The concepts of primacy and recency are useful tactics to keep in mind when applying behavior style concepts to the practical skills of influence, sales and clear communication.



In this scene from Castle notice how Lt. Beckett responds when Castle starts with his conclusion: “The bullet was made of ice.”

Office Politics => The Power of Propinquity

One of my clients was wondering what kind of an “in” a colleague had to be promoted to a position that another well-liked, capable person had been removed from involuntarily.

I asked about his closeness with the hiring manager. “Yes, he traveled with her frequently, and their offices were in the same location”, she said. “Now that I think back on it, he spent a lot of time with her, and the guy who “resigned” was in an office a thousand miles away.”

You can’t underestimate the power of propinquity, or just plain nearness. When you are physically in the same place as someone else, you are on their mind as well as in their eyesight. “Out of sight, out of mind” is an old adage that speaks to this phenomenon clearly. Relationships tend to be formed with those who have high propinquity.

Telecommuting and remote teams are common, so communication is even more important. But even having an office just down the hall can be as distant as being a thousand miles away if you don’t make an effort to communicate often. Make sure your communications are to the point, appropriate and relevant, but do communicate – via phone, email, text, IM, webcam, if not in person. Make sure senior management knows you are available, and communication is open, often, and easy.

Do you have to golf with the CEO or drink with the boss? Although one of my fondest memories of a past CEO is watching him and a colleague singing to each other “You Don’t Bring Me Flowers” in a Tokyo karaoke bar, such behavior is manipulative unless you really do enjoy it. And false, manipulative behavior can be seen through. But engaging in off-hours activities together is how relationships can be strengthened. And good relationships are at the heart of success in business and life. Propinquity makes it easier for you to build a good relationship.

The bottom line: let senior management ‘see’ you on a daily basis, and ensure they are aware of what you know and do. Get to know them well, and build a solid, trusting relationship.

Managing Up => Quick Tips

"I feel like someone who just found a name for their disease. ‘Managing up!’ So this is pretty common then?”

I chuckled at the analogy my client had used. Yes, ‘managing up’ is a very common challenge among my clients. My clients are managers themselves, but it doesn’t matter what level you are, skillfully practicing the subtle art of managing up is imperative for career success and satisfaction.

What do people want when they say they want to know how to “manage up”?

There is often some uncomfortable situation they want to alleviate: a micromanaging boss, a hands-off boss, a tense relationship. Essentially, they want the positive regard, trust, and attention of their boss, their boss’s boss, and their boss’s colleagues. They want to know that their opinions and work are taken seriously, recognized and supported. They want to have some positive influence in the way the organization runs. They want to be given challenging responsibilities that energize them. They want to be mentored and coached. They want their boss to manage them the way they want to be managed.

Guess what? Your boss wants this too. And they are probably not getting it either. So it’s up to you to break the cycle. Managing upwards is at its essence breaking the cycle of poor management. It stops with you. It won’t be easy. It takes human relationship skills, observation skills, communications skills, intelligence, and business acumen. It takes a willingness to change your behavior and your perspective. It takes a dedication to making things better for yourself and others. And it takes the inspiration to continue with it.

Is it worth it? If you want to be known as a revolutionary manager, I would think so. In fact, it may be the most profound thing you do at work, along with managing and developing your own employees.

There are many ways to start “managing up”, and improve your relationship with your boss. Here’s a quick list to get started:

1. Communicate, communicate, communicate. Get to the point quickly, but keep your boss informed. Ask questions to clarify expectations.
2. Know how your boss likes to be communicated with. Verbally? With details? Impromptu meetings? Know their behavior style.
3. Understand your boss’s priorities, hot buttons, and values. Observe carefully, talk to others, and ask your boss.
4. Take ownership of your own success. Your success is a result of what you do, not what your manager or anyone else does. And if you and your team are successful, then your boss is successful too.

Oh - and if you don't support your boss, don't expect him to support you.