it takes leadership, example, and execution
a winning corporate culture
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Ms. DeWitt: Yes, that is a good one. What
would we do differently.
Mr. Brosowsky: Would you like to share your name?
Tasha Tilock, with Cultural
Axis Partners. Thanks.
Mr. Brosowsky: Thank you.
Ms. DeWitt: Cultural Axis Partners? They could
probably answer that question very well.
What would we
do differently? Well, you have to think in terms of your successes and failures,
and the biggest challenge comes once you start to grow rapidly.
Some things were happening in our culture, like a grapevine
developing. I know it sounds naive, but we didn't want a gossipy
grapevine at our company. We
saw things like that developing, so what we did -- and what we
could have done sooner -- was to get the next couple of tiers of
management more involved in the strategy of the company. We
started to do these off-site meetings once a quarter for the
senior management team, where we spend a few days talking about
the business, the problems, moving forward, recalibrating, and
whatnot. We started to
take the next couple of layers of management and put them in a
room. We said, “These are the five issues facing the company.”
They had some mentors on the senior management team. We said,
“Break up into groups and help us solve these problems.” It
did a lot of good things for us, including reminding all the other
leaders in the company what the culture was all about and what the
business goals and objectives were. It also helped them know that
we were listening and that they had a role to fulfill in the
company. As the company grew bigger, it wasn't turning into just
another job. Third, it helped us identify the next couple of
generations of leadership, which is very, very important if you
want your company to keep growing and succeeding.
summarize, we should have gotten more layers of the company
involved in the strategy and problem-solving of the company sooner
than we did, but we did it, and it helped turn around some of the
problems that we were seeing.
Mr. Hill: For the most part, I wouldn't change anything about the culture.
I think I would change a couple of things that I might have
done differently early on. I would have acted sooner in a couple
of situations. Earlier, I talked about how the wrong people in an
organization could be poison, especially with a smaller company.
It's harder when you have so many people to see the one person
coming through the door who is going to be trouble. There are a
couple of times when I sensed trouble that I should have stepped
in a lot sooner. As a result of that, I think it made me more
aware, it made me concentrate on making sure that I didn't make
the same mistakes again. It goes back to making sure that you
bring in the right people. Like I said before, culture is just
something that happens. You control it at the very beginning, but
then it takes on a life of its own, so I don't think I would
change anything about the culture, I'd just change some of the
things about me.
Mr. Pittinsky: A very similar answer. It
sounds harsh, but it was not acting quickly enough about people
who didn't share the values, who were political, and who were
spreading that within the organization.
You can't underestimate how quickly and how decisively you
need to act. You build people up in your mind because you recruit
them, you're excited, they're perfect, you make a big deal about
them, then you can't imagine life without them, so you take the
shortfalls. It's so hard to realize that the person just isn't the
right fit. It may be nothing about them, just not the right fit,
but you have to act quickly when you see it.
Inevitably it is the right thing to do if the person isn't a
match for the culture.
Mr. Brosowsky: If there is one thing you want everyone in this audience to go away
with, what would it be?
Mr. Hill: I think that the one thing to walk away with is that if you focus on
customer service and employee satisfaction, it will make you
profitable. It's not
focusing on the money or the other things that just aren't
important. If you are
focusing on the things that are really important, which are the
people who do the job, and the people who make having a job
feasible, a.k.a. the customer, you have your priorities right.
And, as you grow, remember how you got there.
Mr. Pittinsky: This may sound a little bit Apple-ish or Steve Jobs-ish, but build a
company with an identity --
your brand identity, your logo, your values, your culture, the
way in which you describe your company and yourself.
Build a company with an identity, because it pervades
everything else in terms of recruiting people, retaining people,
motivating people, and building a culture.
Organizations have identities.
Either it's going to evolve organically, or you can try to
shape it against your values.
Focus on the company's identity, don't take anything for
granted, and be creative with it.
Ms. DeWitt: I think that the most important thing -- given that you already have a
reasonably good idea, that you want to start a business, and that
you know who you are and what you stand for -- the most important
thing you can do is to surround yourself with the right people.
You are learning and growing at such a rapid rate, you are
encountering so many new experiences that you need these folks to
touch base with. The people I was talking about before, Jack and
Gene, collaborating with them, bouncing ideas off of them, that
was so important. Choose those people wisely.
You get to choose. Even though you're out there scrambling for
money, you get to choose who becomes your core advisors.
Selecting those people is the most important thing you do once
you have your idea, you have your passion, and you have the
self-confidence to go out there and do it. Which, of course, I
encourage everybody to do.
Mr. Brosowsky: I would like to thank Ben Martin, Mary MacPherson and the rest of the
Netpreneur team for putting this event together this morning, and
thanks to our panel. Now I'll introduce Mario Morino.
mario morino: wrap-up
thanks to everybody for coming this morning. I especially want to
thank our panelists, Jeremy, Andrew, Matt, and Caren, for giving
their time. It's a symbol of what you have been saying, your care,
and your respect for this community. You are each at a different
stage of development, and I know what you are doing individually
for the region and for many of the people you've been in touch
with. For that, I thank you very much.
The subject of
leadership and culture is critically important to your success and
to your life. I always try to draw a connection between your
business and your life because, in the end, you always have to
think through why you are doing all this. Why are you killing
yourself? Is it simply to make money, or is it to change something
in your life status?
It was said
that culture is organic. While you don't sit down and flow chart
your culture, I would argue that you nurture it. If you don't, it
will run wild and grow you under. It will become the gossip
machine that Caren mentioned.
Think for a
moment. I'm going to give you some names and I want you to picture
in your minds the cultures of these companies.
would be one word that you'd use to describe this company? It
would not be a good one.
You're all being kind. I won't tell you mine because we are on
public record. I think the nature of the business has been
deceptive to its people and its clients. It goes to the core of
the problem of a lack of values. We're seeing tremendous and
devastating impact on the business community, and many good
businesses are being tainted by association.
company that has done very well. I'm going to take you to the
early '80s, and give you the name: Oracle.
Arrogant. And draconian, because there was a time when they
dismissed people without a second thought. If you missed your
numbers, if you missed your targets, you were canned. It created
such a ruthless mentality within the sales divisions, that you can
come to your own conclusions about what type of behavior this kind
of pressure motivates.
mentioned recruiting from Computer Associates. I'm not saying that
is good or bad, but when you describe CA, I don't get a good
vision. I respect Charles Wang and I respect Sanjay Kumar for what
they have achieved, but I also understand the inherent disdain
that CA has shown for their clients. That is the one word I always
use to describe them.
is your view of Microsoft? At different levels I actually have a
lot of respect for the firm, but I have always described them this
way: “legally ruthless,” meaning ruthless within the extent of
the law. I guess that’s debatable, now, but there was a time
when if you ever sold a business or did acquisitions with them, or
dealt with them otherwise, you'd have been wise to remember that
term, “legally ruthless.”
those are stigmas for those businesses. You also hear other terms
and get different views of companies like SAS in Raleigh, North
Carolina. Jim Goodnight is clearly cultivating a culture that
borders on being “benevolent.” He’s a remarkable stanchion
of the North Carolina community. The company is still private.
They have their own Montessori schools. They built a $30 million
school for their employees and community. There is a remarkable
conscience in the company, and it emanates through all aspects of
real, but they are organic, and you nurture them as a leader.
Caren said it very well, and all of the panelists epitomize the
fact that culture starts with you. When you are starting a
business, by definition, you are the culture. The question is, how
does that culture grow and change over time? I believe that your
challenge is to create a petri dish. You are going to define what
goes into the dish, therefore you are going to affect the culture
that comes out of it. You can't control the culture, but you can
control how it gets seeded and grows.
How do you do
that? First of all, by example and execution, by what you do, day
in, day out.
I was with a
gentleman recently who was talking about being on calls with me.
He said, “I can't get over how polite and courteous you are to
people.” Many people don't agree with that, by the way, but if
you went back to look at how we did business, courtesy and
politeness and respect were always driving factors. He was
describing it like it was something special. I said, “That's
what I should do. Don't compliment me for something I
should do.” You are just treating the person with respect.
Who you hire,
that’s what ultimately defines your culture. You need people who
will both fit with and will help you change your culture at
different phases. You do that consciously, and you do it
holistically. Caren used the word “holistic.” I think it's a
very important point. I can tell you about times I made the
mistake of violating it, and I got chewed up. We used to have a
veto process in hiring, in the development team, in particular.
I'm an ex-developer, too. We thought that chemistry was so vital
that if anybody among our core group of 20 people said no to a
candidate, they didn't get in. You had to really climb that wall
to make it into our team. There was a guy we were recruiting, many
of you may even know of him because he became quite famous in his
own right. Everybody said no to him, but I hired him anyway. I was
right about how good he was, but, boy, he did not fit us. He
caused an awful lot of pain for a long time in the company. That
was my mistake, and I wore it for a long time.
We talked about
execution and example, but the other way you drive home culture is
by reinforcing behavior that supports the culture. For example,
that means not only rewarding the sales team that brought in their
numbers, you also reward the sales team
that created good will or exceptionally positive reaction or
respect in the marketplace by how they dealt with the client. By
recognizing them, you're demonstrating your convictions and how
important the culture is to you.
something very important. You are going to spend enormous amounts
of time with people, so you want to be able to go to dinner with
them or have a drink with them. You don't make it an iron-clad
rule, but the reality is that you are going to be spending long
hours every day with these people. If they don't fit the model,
this marriage is going to break up. You’d better be able to get
along with folks, and it’s absolutely critical in the early
Matt made a
very insightful comment, that there are multiple cultures in an
organization. You want to make sure that you have a core culture
that you nurture and advance and hire around that reflects the
central values of who and what you are, but you will get different
cultures around that core. Respect those different cultures. The
technology group and sales group will have remarkably different
cultures. There is no question about it. I remember, it took me a
long time to understand that. I was doing a mind trip on our
development group to understand and respect the sales culture,
but, for a long time, my stubbornness as a technical person
limited our growth. I couldn't understand the nature of the
salespeople, the respect they needed, or how they were motivated.
Once we got over that hump, we became a different organization. It
was a different culture.
I don't think
that there is an internal/external culture difference. If there
is, you have a big problem. It means you are a “suit.” If you
are not the same on the inside as the outside, there is something
wrong and you have violated a basic value structure. Respect and
honesty are as imperative with somebody inside the business as
the question: What happens when things go bad? I might as well be
blunt: Everything hits the fan. You really see culture when you
endure hardships together. It is easy to get along when everything
is running smoothly. You don't even know what you have, then. It's
only when it gets hard that you realize how deep and how real your
people and your culture are. Or how you are, for that matter. Your
stock price goes from $52 to $17 in 48 hours and everybody is in
panic mode, everybody wants to take your head off. Or you're still
private and you don't know if you can make payroll. Or a contract
you were expecting that was going to change the nature of the
business did not come through. Or there has been a major sexual
harassment crisis and people are looking to see what you are going
to do about it. Crises are opportunities. You demonstrate the true
culture and value of your organization when you respond to the
hardships and crises you face.
You have to
back up what you believe. If it's discrimination, if it's
dishonesty, if it’s an issue of integrity, you've got to act
quickly. When I say quickly, you've got to think it through, of
course, to make sure that you do it right, but you have to act
with determination because everybody is going to watch you.
They're going to judge your value system right then and there.
It’s the same as when you release an individual from the
company. People are going to judge you. Your values get judged all
of the time, so how you execute against them and how you reinforce
them is essential.
responsiveness, for example. I believe that any inquiry coming
into the organization should be responded to within 24 hours. No
exceptions. Whether it’s a call from customer support or a call
from an executive, it doesn't matter, within 24 hours there should
be a response to that call. It’s just common politeness. How do
you enforce it? You do it yourself. It's that simple. When you
make a sales call or you call on anybody, you send a follow-up
note. “Thank you for the time.” You do it all of the time, no
exceptions. You are demonstrating courtesy. Regardless of who is
hiring whom, you always thank the other person. You try to go on
their turf to respect their organization. All of these are
symbols, but by executing on them you demonstrate your cultural
makeup and the values you're trying to build in the organization.
You've got to
support symbolism with execution. You want to have the identity
Matt spoke of, and you want to live that identity and walk with it
every step of the way. People see right through phoniness. They
always do. We kid ourselves with our posters about “quality”
and “integrity.” Forget the signs. People are looking at you,
how you act, and what you do.
I want to
mention a few other points that were covered, including one that
Matt mentioned, the importance of an orientation. You all do it
your own way, but when people come into the organization, you have
a tremendous opportunity to set their expectations at that moment.
You probably should have done it in the recruiting process, but,
nonetheless, you have to do it again. It is important to give
people the chance to understand the business, its values, and how
you do things. Two or three days or a week spent up front will
have an enormous payback over time.
As Caren said,
what is important is that you understand who you are. When you are
talking about defining culture, it starts with you and your
management team. Who are you? What is your makeup? If you can't
define that, you'll never get to your core value structure. People
need to know why they're there. It’s clarity of mission and
clarity of identity. People want to work for an organization that
is good. They want to walk away feeling good about themselves and
that there is integrity. They want to feel that they are involved,
and they want to have passion. You have to create the environment
where the individual has an affinity with the organization and
what it represents.
Here are some
cultural issues we went through at my company. They are not right
or wrong, just things that we did. For example, there was a
comment about executive row. I always disliked executive rows
because they are a cultural and style definition in themselves. It
doesn't mean that it’s right or wrong, it's a style. For years,
our executives were with their troops, not in an executive row.
That was a message we were sending because we wanted to instill
teamwork and camaraderie at the deepest level of the organization.
It changed, by the way, when we had others with different styles
come into the organization.
We had a
remarkable sense of egalitarianism, although I don’t know if it
came through as much as I'd have liked it to. All of the offices
were the same. My office had a couch. If anybody else wanted one,
they could buy it, just like I did, out of their own pocket. It
didn't come out of company money. That was the rule. We did that
on purpose, because, right or wrong, we wanted to have it
egalitarian. I’ll always remember one company. The CEO and I
were walking out of his massive corner office that was probably
the size of this hall we’re in now, with a spectacular oriental
rug and all of these other wonderful things he was describing to
me while explaining how his people -- his people, mind you
-- wanted him to have this environment. What he didn't know
was that they had to browbeat everybody to buy his birthday gift
that day. They couldn't get enough money to buy him a little
decanter. They actually had to force people to give the money. But
his people really loved him.
the work of the webMethods
Foundation, and I want to come back to that. There is a lot of
new money jumping up around the country, and a lot of new money
people who are making total asses out of themselves. They are
coming across too fast, with too many answers, thinking that they
know all of society's problems. The reality is that they
know little of the new world they’re entering. I take my
hat off to what the webMethods Foundation has done under Caren's
leadership and that of Diane Tollefson. They have come in quietly,
they have assimilated well into the community with traditional
philanthropy (actually, a better job than we did), and they
delivered on meaningful programs. They’ve got the real issues:
homes, education, children, families. They deserve a tremendous
compliment and a thank you from the many people who respect what
is going on. They are living their value structure. They are
walking the walk.
If I think
about everything that the panelists said, the word that jumps out
to me is respect. Not that they said it, but did you notice that
whenever they talked about the people in the company or the
clients, it was always with a sense of respect about the
relationship. I think that is the basis of everything. Respect
gets established by how much of a focus there is on people.
about it, but Caren said the word: you want to instill passion.
People do want to get up in the morning and come to work.
You want an environment in which they get charged. You don't want
the environment in which people are coming in because they’ve
got to be there. You want people busting 70, 80 hours a week
because they want to, not because you are trying to force
them to. You want that individual with drive, who cares about the
work, and you have to create the environment that makes it happen.
Two points of
caution. First, Caren mentioned the issue of stock price. I was
involved in a business two years ago where I was the “old man”
on the board. I said, “You are looking at stock price too
much.” They looked at me and said, “You are too old-fashioned,
Morino.” Guess what? That's right, the crash. You don't look at
stock price, you look at the performance of your business. You
look at your people. You can't control the stock price. Somebody
else decides that number, you worry about the factors you can
control and influence.
Andrew's point about family, but I would say to come off that. I
learned a hard lesson: Companies are not families. Don't ever kid
yourself about that. You don't fire your son or daughter; you
don't lay off your nephew. You will be forced to do that, and,
when it happens, the company is no longer a family. Be honest
about it. You can be trusting, you can have a great relationship,
you can be supportive, but you're not family. It's a growth issue
you go through. I don't mean it to be critical, I just think it's
that I would encourage you to think about is the term
“employee.” When we formed our company, Morino Associates, we
wanted it to be small, and we wanted everybody to be an
“associate.” We didn't know the wisdom of our way, actually,
until later when Tom Peters wrote a piece that caught my
attention. He talked about the origin of the term “employee.”
Turns out that it comes out of a chattel agreement. It's chattel.
That stuck with me. I said, “I don't want to call people
chattel.” Anybody who’s been around me knows that we never use
the word “employee.” It's a small point, but it's also about
how you respect people, both as symbolism and the way you live it.
These are small things, but they are the kind of things, when
pulled together, that also pull your culture together.
everybody here is living through, Caren especially, is: What does
growth do to you? The real challenge is to maintain and redevelop
your culture, or to allow it to grow in positive ways as you grow.
When you have 14 offices around the country, some that came
through acquisition, let me tell you, you have spaghetti. Your
challenge is to go in and instill a sense of core common values
over time. Those are the companies that will succeed. The ones
that can't do it are the ones that fail. Core values are about how
you perform, what you do, how you execute, how you treat your
clients, how you treat the people in the company. Growth gives you
an enormous challenge. It is what separates the true success
stories from the others.
remarkably important, and leaders have a tremendous influence on
the culture. Over time that wanes, and your job becomes making
sure that you have created the petri dish that allows the culture
to grow productively, constructively, that rewards people in the
organization and respects them.
I want to thank
everybody again for being here, the Netpreneur team for putting on
another great program, and, especially, our panel.