Monday, April 5, 2010

Uncontroversial Company Values

"You've got to talk to the company right now!  Or we're going to lose key people today!" declared the marketing director of my newly inherited executive team.  I had just been appointed president of Luxtron and the company was in turmoil.  Several week earlier, my predecessor and the VP of Sales had left the company and anxiety was running high as to what the new president - me - would do.

It was Friday afternoon and I had just stopped in to drop a few things off at my new office and sign some paperwork.  Thirty minutes later, I found myself facing close to 100 people in the company break room.  What should I say?  Should I talk about our forward strategy?  I didn't have one.  Should I talk about how we were going to fix the company?  I wasn't even sure what the problems were!

No one gets more scrutiny than the guy at the top and what these people wanted to know were a few basic things?  Who was I?  What was I going to do?  How would I run the place?  And most pressing of all, what was going to happen to them?

So I decided to discuss values.

Given the panic in the air, why start with a soft squishy concept like values?  Because while I couldn't tell them what I was planning to do (I didn't know myself!) I could tell them how I planned to run the place and what my expectations for them would be.

So in the heat of that moment, I articulated four values (which today is up to five) by which I would run the company.  And while it seems that in today's culture wars, values are more often than not used to divide people, I've found these values to be ones that most everyone can agree to.  I 've since used these values in every subsequent company I've run.
  • Honest & Open Communication - This means telling the whole truth; not just some fragment cherry picked to support an agenda.  More importantly, this means truth delivered directly, face-to-face, in open forum, not behind closed doors.  No innuendos and shaded meanings.  And most importantly, this means open disagreement, not "yes" in the meeting and "no" afterwards.  Of course, there are those people for whom brutal honesty is not a problem which leads to...
  • Respect for People - It's funny how people who pride themselves on being brutally honest seem to revel in the "brutal" part.  Respect for people is best summed up by the golden rule of "do unto others as you would have them do unto you." This means civility;  no tyrannical browbeating, verbal bullying, and lording it over those who work for you.  This means taking seriously what others have to say, not spreading malicious gossip or tearing others down behind their backs.  This means being considerate of other people's feelings. Or as the Robert Fulghum says, all the stuff Kindergarten tried to teach you.
  • Meeting Commitments - This means keeping your promises.  In the interconnected world of a company, others are relying on you to keep your word so that they can keep theirs.  This does not mean playing it safe and only committing to what you can comfortably do.  In business, stretch goals are necessary which means sometimes we miss.  But when we miss, we should make amends where possible.
  • High Ethical Integrity- At the most basic level, this means complying with the letter of the law.  At the highest level, it means doing the right thing consistent with your values.  It means doing nothing that you wouldn't be proud to see published on the front page of the newspaper for your family to read.
So what was the impact of my little speech?  I saw a few heads nod but for the most part there was dead silence.  There were no questions.  And I lost two people that day.  But I had put my stake in the ground and over the next several months, these values served as the foundation for the company's turnaround.  How so?

Because I began to fire people who flagrantly violated them.  It's one thing to say you expect people to respect their peers.  It's another when you fire a sales manager who constantly badmouthed his co-workers.  It's one thing to say that you expect open and honest communication.  It's another to remove a manager who consistently agreed to certain actions in staff meeting then sabotaged them outside of it. It's another to say you expect high ethical integrity.  It's another to terminate a supervisor caught taking kickbacks from a vendor or to lose a sales because you won't pay the customary "commission" to a local government official.  Real values are anything but soft and squishy!

In my experience, one of the root causes behind a turnaround situation is a dysfunctional culture, and one of the root causes of a dysfunctional culture is ambiguous values.  How so?
  • Politics - When communications are hidden in secrecy and game players allowed to spread innuendos and gossip without consequence, this allows the spread of politics.
  • Apathy - When people feel that their efforts aren't appreciated, their voices not heard, and that what they do has no impact, then they cease to care.  To quote Dave McClure, "startups die because nobody cares."  He was referring to customers at the time, but it holds just as true for employees.
  • Non-performance - When people talk a good game but habitually fail to meet their commitments to co-workers, others start to ask what's the point of giving it my all?  Non-performance is infectious.
  • Loss of pride - When senior managers turn a blind eye to ethically questionable practices, or worse, perpetrate them, employees lose their pride in the organization and the best leave.  Most people want to be associated with a company they can be proud of.
As the people at Luxtron began to see that I was serious about running the company in accordance with these values, the environment began to change.  A few brave souls began to challenge the status quo and even criticize the way we were doing things.  And when they didn't get fired for it, more began to speak up.  As we implemented their ideas, company performance began to improve, which made people realize that they could impact what we were doing.  They began to care again. And as care for the company grew, the employees began to hold each other accountable for performance.  And trust me, there is no tougher supervisor in the world than one's co-workers; peer pressure is tough stuff.

Did we live up to the values perfectly?  Of course not.  Sometimes we made mistakes.  Sometimes we got lazy.  But at least everyone had a guiding star to shoot for and over time, the values just became part of the way we did things.

In the end, I found that I had to add a fifth value to the list. Why? Because it enables all of the others. What was it?   


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