Engaged People are the Result of a Culture of Trust

This is part Two of Two on driving culture change through an organization. Review Part One

Most leaders today are looking for growth through innovation from an engaged workplace culture. And yet, most companies are struggling with the level of engagement and creativity that is truly needed.  So how do corporate cultures become truly engaged?  The answer is “Build trust.”

Do You Want Culture Change That Fosters High Trust? Why?

This is an essential question to answer.  Fostering trust takes time and intention. We can see how important it is in our personal lives.  In an organization, trust is about keeping your word and speaking honestly. This can feel very risky in an environment where people are belittled or punished for speaking up or saying “No” or “We can’t do that.” Culture change based on a foundation of trust means you believe your organization is a “living entity” and relationships drive success. If the primary belief and focus is to make money, then leaders feel it is their responsibility to demand performance from those they hire – ie, people are there to serve the bottom line an d generally cannot be trusted to do that without a lot of carrots and a big stick.  “Demand” in a relationship doesn’t create trust. It does not leave people feeling “I am valued and I contribute.” (people feeling valued is an essential ingredient for innovation). Demand-based cultures are parental.  And this is an outdated mode of operating. In today’s global organizations with increasingly diverse workforces, learning how to drive collaborative leadership is the foundation of project success and speed.

At the same time, there are demands leaders must make to win a fiercely competitive era. If trust is high in the culture, then demand can be high too.  But if it’s all “demand” and no relationship-building, then external rewards and punishment become the only method to driver results, and trust diminishes. Today’s workforce disengagement shows the The Doom Loop situation that results from this thinking.

Any culture change must explore the question: “Do we want to foster greater trust between workers and management? Why?”  When you believe that your organization’s ability to make money and compete better is a direct RESULT of healthy relationships, it’s easy to see that building trust is paramount.

As is true with any relationship.

The first tool or principle of building trust is to use the power of positive intent. We gave an example of how one of our clients used this tool in last week’s blog.

3 Techniques for Culture Change Through Giving and Receiving Trust

Building trust WILL increase workplace engagement, creativity, and performance. Try these 3 tips: 

1) Skill. Does the person have the skill to execute what you’re asking? This is the first rule of fostering more empowerment and trust is “Don’t allow people to sink. Teach them to swim.” Better to take on fewer projects within a quarter and allow the teams to meet their agreements within promised time frames. The frantic “shell game” that most companies go through in re-prioritizing weekly and setting impossible goals fosters mistrust. Working within your capabilities builds a widespread sense of accomplishment and trust capital.

2) Accountability.  Will the person do what they say they’ll do? How will you decide? Can you provide feedback without blame or judgment? (ie, positive intent). Having clear agreements, milestones and behavioral expectations is crucial to building trust. In today’s workplaces there is far too much guesswork, interpretation, and appeasement on the part of managers. Everyone is too busy, and as a result mature, honest conversations that feel or look like conflict are either avoided or dropped harshly without context. A good leader will call people out when they’ve not kept their word, discuss the obstacles that led to the breakdown or missed deadline, help them problem-solve to remove obstacles, and most importantly – make new agreements.

3) Business Relevance. Not everyone should have a say in everything. (In spite of a widespread Gen Y entitlement belief!) When you are building a trust-based culture, it is important to be open and transparent about decision rights so people can visibly see the effort you’re making to be fair and smart. Give a longer trust-leash to people who can and will earn trustworthiness in return. Separate trust in character from trust in performance. The former is about good hiring. The latter is about good management.

If this all seems too complex, you take one simple step to build more trust:

Ask the question several times a day, before you act: “Is what I’m doing right now likely to build more trust among my team/organization … or erode trust?”

How will you know the answer?

Hint: Ask your people.

Lisa Jackson and Gerry Schmidt are corporate culture experts with a proven method to teach leaders how to evolve their corporate cultures to perform better, innovate faster, and show they truly care about people in an unprecedented era of rapid change and transformation.

Visit them on the web at www.CorporateCulturePros.com or follow them on Twitter at http://twitter.com/corporatecultur

Seeking Culture Change and Employee Engagement?

Achieving growth and innovation is on everyone’s minds these days. Increasingly leaders are seeking culture change and employee engagement as the answer. In this era, being  in the driver’s seat requires extreme leadership. It’s hard to navigate the whitewater of global competition, workers who don’t like to be told what to do, and fast-moving change.

So how do corporate cultures become truly engaged?

There is one answer every leader can do more of to change and improve their corporate culture through employee engagement. It doesn’t cost anything. It is guaranteed to increase business results and performance. It does not require gimmicks or manipulation.

It is truly the most serious advice we give our clients:

Build trust.

Trust is in short supply in our larger societal culture.  There are complete trust breakdowns happening in every system: Our governments. Our corporations. Our families. There’s a reason for this: We are in the midst of a massive transformation of our human society. It’s systemic, it’s painful, and it’s growing.  Any time humans are facing significant change, trust issues surface. Like a magnet, people are programmed to fear change that is forced on them. They polarize against it. Since the pace of change is increasing, it is directly impacting employee engagement, and is redefining what it means to be an employee and leader in our companies today.

In business, trust is the foundation of everything – including your corporate culture, employee engagement, and productivity problems. In our book Transforming Corporate Culture, we use the analogy of trust being like the sun – it is the life-source of an organization.  When trust is weak or cut off, productivity suffers. Unless you are a solo player, you cannot drive engagement, motivation, and passionate action. No matter how many surveys, initiatives, or technologies you deploy, unless people trust their leaders (and vice versa) you won’t achieve maximum productivity. That’s true whether your organization is 5 people, 50, or 5000. Campbell Soup CEO Douglas Conant says it this way:

“You have to inspire trust, and once you earn people’s trust, you have permission to do some amazing things. Trust gives you the permission to give people direction, get everyone aligned, and give them the energy to go get the job done. Trust enables you to execute with excellence and produce extraordinary results. As you execute with excellence and deliver on your commitments, trust becomes easier to inspire, creating a flywheel of performance.” (excerpted from Gallup Management Journal).

Culture change and employee engagement are never about resources, strategy, or technology.

There are three common misunderstandings we have observed in efforts to drive culture change and employee engagement. They are about the role of trust in today’s workplaces:

1) Relationships are seen as “soft.” We don’t have a resource problem on our workplaces. We have a relationship problem. Employees are disengaged and untrusting because they’re not connected to each other – and their leaders – through the strength relationships create. If that sounds airy-fairy, think about this in your own life. You’re far more committed to following through with a boss or client you like and trust. You’re much more likely to make a change you are personally motivated by, and when you”re willingly accountable to someone you like and trust (think of your personal trainer). If you need to be convinced about the link between trust, engagement, and the bottom line, you probably shouldn’t be leading a P&L statement!

2) Trust in leaders is automatic, and they ought to be blindly trusted to make decisions and communicate on a “need to know” basis … while employees should remain grateful and “live with it.”  Trust in leaders is not automatic anymore; unfortunately it’s the reverse: People mistrust leaders until they’ve proven otherwise.  Trust must be given for it to be received – and leaders must lead that effort. You will not generate a high-trust workplace unless you show you trust others you trust them through your actions. The opposite is also true: You cannot expect to make secretive decisions that impact people’s daily lives and livelihood, announce them via email  - and generate trust.  The cost for this common mindset is extremely high, and growing worse by the day. Given the truth about change and polarity and the level of change organizations are facing, a continued steady diet of force-fed change is like junk food to our organization’s cultural health. Trust is at an all-time low and it’s significantly impacting workplace engagement and productivity.

3) “If I trust my people, it means I’m letting the animals run the zoo.”  Trust is maintained by mutual personal responsibility.  In the face of massive gaps in effective communication, trust is considered a contractual agreement rather than a relationship agreement – and is too often left to lawyers and judges to figure out. Trust between two human beings and the dialogue that fosters tolerance, understanding, and true problem-solving is rare. Given that trust is the life-source of any organization, this is an alarming trend in our view.  For example, in a company culture, an agreement to “Treat each other with respect” (a common value) needs conversation that creates common meaning and widespread buy-in.  Rarely does that dialogue happen beyond a poster on a wall. The topic “how we treat each other when things don’t go as agreed or planned” is considered soft and fluffy. And yet, trust is fostered primarily through what happens when the going gets rough – not when everything is groovy.

The First Rule of Trust

To build more trust within your team or work environment, the first step is to WANT to create an environment of trust. Then you must demonstrate that in your behavior as the leader, by assuming positive intent, over-communicating your decisions, and giving people bad news in person. Learning to create a culture of positive intent is the “first rule of trust.”  This brilliant description of the power of positive intent by Indra Nooyi, Chairman and CEO of Pepsi illustrates the point.

One of our clients used the power of positive intent to change the culture in his IT organization. (He was CIO of a Fortune 50 company). He noticed one behavior in the culture was eroding trust more than anything else: The tendency for people to criticize others and seek blame, especially when there were problems with a project. After learning the “positive intent” rule, he started a simple practice. Every time one of his team members complained about someone (usually who was  not in the room), he would ask them; “Do you really think Joe got up this morning, looked in the mirror, and said, I’m going to drive the IT guys nuts?” “I assume Joe’s intent is positive, but we don’t understand something he’s trying to do, or maybe he doesn’t understand what we’re trying to do. What do you think his intention really is?”

Our client reported that it took a while for his positive intent principle to catch on, but after enough time, the culture shifted significantly – and permanently. With a bit of support, and lots of repetition, this change spread beyond his team to the entire IT organization.

Lisa Jackson and Gerry Schmidt are corporate culture experts and authors of the book “Transforming Corporate Culture: 9 Natural Truths for Being Fit to Compete.” They offer a proven method to teach leaders how to evolve their corporate cultures to perform better, innovate faster, and show they truly care about people in an unprecedented era of rapid change and transformation.

Visit them on the web at www.CorporateCulturePros.com or follow them on Twitter at http://twitter.com/corporatecultur

Innovation seems to be the topic du jour.

• 36 % of all respondents to the survey admitted that their innovation strategy is not well aligned to their company’s overall strategy

• 47% said their company’s culture does not support their innovation strategy

• Companies with both highly aligned cultures and highly aligned innovation strategies have 17% higher profit growth than companies that reported low degrees of alignment

• The most important innovation goals among respondents are “superior product performance” and “superior product quality,” each ranked number one or two by a plurality of more than 40% of all respondents

• In terms of their cultures, companies share traits even if executives don’t find that their cultures are aligned with innovation. More than 60% cited “strong identification with the customer” as among the top two cultural attributes of their organization, and 50% chose “passion for and pride in products.

Here are tips to help executives determine if their culture is ready to support innovation, and 4 culture types that hinder or derail innovation.

Leaders, it’s all about increasing the dialogue with your people.  Take a bold step today!

As the creative genius Steve Jobs said “Make a dent in the universe.”

Lisa Jackson and Gerry Schmidt are corporate culture experts and authors of the book “Transforming Corporate Culture: 9 Natural Truths for Being Fit to Compete.” They offer a proven method to teach leaders how to evolve their corporate cultures to perform better, innovate faster, and show they truly care about people in an unprecedented era of rapid change and transformation.

Visit them on the web at www.CorporateCulturePros.com or follow them on Twitter at http://twitter.com/corporatecultur

Jen Luna’s life went from miserable to happy almost overnight.

She didn’t lose weight, get married, or have a baby.

She quit her job, (or more to the point, she quit a bad boss.)

Her story is an eye-opening one of two corporate cultures that illustrates why Gallup researchers found  two out of three employees in every workplace across America are disengaged at work. Jen’s story is presented in her own words as a first hand account of her experience in two vastly different corporate cultures.

Bad Boss + Bad Culture=Lost Opportunities

OUT WITH THE OLD

“I worked over 3 years at a promising B2B company on the east coast. They had an innovative concept that was a real unmet opportunity in the marketplace.

When I was first hired, I was the definition of a go-getter. I was constantly thinking of new ideas and ways to improve and streamline processes in my department. After a couple of years, some of those innovative and ballsy decisions were biting me in the butt. What earned approval and accolades from my superiors, turned into topics for them to disagree about without my knowledge and behind closed curtains.

When I realized this was happening, it discouraged me to take further risks or present ideas to improve things. So I stopped.  I became perfectly fine maintaining the status quo.  Meanwhile, turnover in the company was through the roof. The person I shared an office with left the company in early 2010 after working there for 11 years.  I later found out it was for the same reasons I was experiencing.

This situation damaged my personal confidence. I felt insecure about my job all the time, like I was always walking on eggshells. There was a blanket over issues and problems; nothing was “out in the open.” There were constant surprises. Decisions (employee terminations) came out of left field with no forewarning.

The current CEO bought the business from the founder 12 years ago. He placed his trust in someone on the team (let’s say Joe) who was divisive and fostered mistrust throughout the whole company. But Joe was smart enough to know how to “gain” the CEO’s trust. The CEO puts all his eggs in one basket with Joe. The office mantra became: “If you’re following Joe’s decisions, you have nothing to worry about.” Everyone knew it was smoke and mirrors – the CEO saw what wanted to see.

In the last year, the company experienced a 25-30% turnover, which directly translated to client retention.

To this day, clients are jumping ship in droves; simultaneously the company is losing employees in leadership roles. It’s no secret things have gone south.

In August of 2010 I saw my own way out. I was presented with an amazing opportunity (by a former coworker) to move to Boulder and work for a creative advertising agency called Moxie Sozo.  When I left, I was open about why: “The direction and leadership style aren’t working. It’s no longer a fun, trusting environment to be in. There’s no loyalty here.” At the request of the CEO, I gave him an exit interview, information he thanked me for.  Here are a few excerpts:

How would you describe employee morale and motivation in the company?

-Morale seems to be directly correlated with the performance of the sales team.  If they were  happy with how much money they were bringing in then that would dictate the morale of the rest of the company. When they were not satisfied with how much money they were bringing in, morale plummeted – quickly.

-Incentives (NOT within the sales department) seemed sporadic and inconsistent.  It was hard to stay motivated when sales dictated the morale of the company.

Were you given clear goals and did you know what was expected of you in your job?

-In all of my roles at _________, goals were usually not clearly defined.  It seemed that goals and expectations changed direction so often that it was hard to clearly understand them. 

-It also seemed that goals were only created when something was going wrong, instead of setting long-term, proactive goals. 

Did you receive sufficient feedback between performance evaluations?

-Not really.  I would receive a lot of feedback during performance evaluations, but decisions were then made that were inconsistent with the feedback – e.g., I was removed from my position as Director of Research; days before I received overwhelmingly positive feedback in my performance evaluation. 

-There were times when feedback was sufficient, but that was after big decisions were made and not before. 

IN WITH THE NEW! What’s different at Moxie Sozo?

When I was interviewed by the Creative Director at Moxie Sozo, I was told “You and Chris are running Business Development. That means you figure out how to do it. I hired you because you’re good at what you do.” He said it and he meant it. That has been exactly what I’ve been doing ever since. This built a real sense of trust between me, my boss and my team.

Our organizational structure has very little hierarchy. The Principal/Creative Director oversees creative aspects of all work but there are no “bosses.” All departments and employees work side-by-side.

Decision-making is vastly different here.  Everyone trusts everyone else and their decisions. It all begins with the hiring process. Most staff here were referred by a current employee. We have people calling all the time asking us if we’re hiring. We bring in people we know and trust, and trust builds. It’s open and transparent – nobody holds back. We all know clearly where the business is headed. Issues are brought out on the table, and there is no gossip and chatter – there’s never a need for it. It’s truly one of the strangest things I’ve ever encountered in a work environment—all 38 of us genuinely love working together!

It does mean you need thick skin. If someone doesn’t agree with what you’re doing, they’ll let you know. It’s an effective way to correct mistakes efficiently, instead of feeling in the dark. All of these elements make Moxie Sozo feel like a family – a functional family.

There’s really no employee turnover here. I’ve been here for over a year now; one person left because her husband took a new job in Chicago. The people here make things fun and everyone is truly in it for the long-haul. Nobody dishes on past employees because nobody quits.

I’m incredibly productive here.  I feel the sky’s the limit with what I’m pursuing. I know the Principal of the agency is invested in me, which makes me feel invested in the company. I want the success of Moxie Sozo as much as I want success for myself. My partners and I aren’t competitive; we cooperate and approach each opportunity together. At this point I don’t care about who is the lead on an account; I’m excited to pitch because I know they’ll be happy as clients. We want to work on projects we have a passion for, and we can afford to be picky that way. We all work side-by-side; the designers even help with business development. Earlier this year one of our designers poked his head in my office and said: “Can you go after RTD, I would love to design for them, I know I could do amazing work for them!” I am thrilled to report that RTD recently hired Moxie Sozo for creative services. That same designer helped me with the visuals of our proposal to RTD as well.

And that spirit is an exact mirror of our relationships with clients. In 12 years we’ve never lost a client to another agency. I truly believe that is fundamentally a result of our nurturing work environment here at Moxie Sozo.

I WANT to be here – I wake up and can’t wait to start the day. I LOVE it here!”

Building Company Culture

Here are a few lessons on building company culture that can be drawn from Jen’s experience:

1)      Trust is everything. If you have a trust problem in your culture – which often centers around one person – it undermines everything. How does a CEO learn whether they have a trust problem? Try a free culture self-assessment – pay attention to questions 7, 13-16 and 24.

2)      Praise publicly, criticize privately. No matter how unrealistic ideas are or how much you disagree with them, never criticize someone publicly or behind their back. Provide all feedback directly to people. See #1.

3)      Collaboration requires openness.  If you live by titles and hierarchy, there’s a good chance you  have turf wars. Place more attention on clarifying decision rights. This is more effective in driving collaboration than a false sense of power through titles.  If you want people to reach across boundaries, talk about it in your staff meetings and encourage cooperation.

4)      Be customer-centric.  Everyone wants to be part of winning and that always means happy customers, put your money where your mouth is. Reward behaviors that delight the customer.

5)      Hire right. Jen said it well “It all begins with hiring the right people.” Never compromise on a hiring decision with someone who doesn’t fit your culture. If you make a bad hire, fix it. Fast.

Download our Corporate Culture Tool: 3 Step Process for Assessing Culture Fit for Hiring

Lisa Jackson and Gerry Schmidt are corporate culture experts and authors of the book “Transforming Corporate Culture: 9 Natural Truths for Being Fit to Compete.” They offer a proven method to teach leaders how to evolve their corporate cultures to perform better, innovate faster, and show they truly care about people in an unprecedented era of rapid change and transformation.

Visit them on the web at www.CorporateCulturePros.com or follow them on Twitter at http://twitter.com/corporatecultur

Innovation is a Culture Thing

Most companies – small and large – depend on increasing innovation to fuel growth.

And yet, the quest for innovation and efficiency often pits the corporate culture in a war with itself.  The mindset and behaviors that support traditional business outcomes are often in direct contrast with cultural behaviors that support innovation.  This is largely why the R&D function in organizations has been silo’d, assuming the people and their work are so different that their work cannot effectively co-mingle with tightly controlled and managed manufacturing, sales, or accounting practices.

The Culture-Innovation Link

Operational goals in a business usually center around predictable implementation – i.e., efficiency, cost-cutting, and compliance. The behaviors that support these outcomes include specialization, silo’d approaches to work, following protocol, sharing less information (it takes too much time otherwise), and little or no experimentation.

Even if a business has intellectually embraced the idea of open sharing and dialogue, and freer work practices, most still hold mindsets that reward and encourage compliance behavior across the business.

Innovation is the alchemy of balancing ideas and implementation well.  Innovation is no longer just getting R&D right; the culture that supports rapid adaptability to change means innovation must take hold all across the business, in every function.  Collaboration and open work practices must be embedded to gain speed and efficiency:

• People believe they can take smart risks without being punished.
• Teams focus on small steps to put an idea into practice, get feedback, make rapid adjustments. (Repetitive, scaled down promises to a customer usually gain faster traction.)
• Create room for people to “play” with ideas.  (i.e., requires ruthless prioritization so people aren’t “doing it all, all at once”).
• People are trusted and can perform their roles free from blame, judgment, and harsh criticism about “non-compliance.”

New Ideas + Effective Implementation + Positive Impact on Business =  Innovation

Imagine what’s possible when you optimize the equation between ideas + disciplined implementation. The businesses doing it (like Google and Apple) are clear winners in the financial realm, far above their competitors. There are 3 primary innovation-friendly mindsets leaders must adopt in how their organization conducts its day-to-day work:

First mindset to change: Achieving sustainable innovation is the balance between fostering good ideas that can take hold and realizing there are many, many ideas that never do. The mature executive knows more ideas will fail than succeed – and you must reward efforts to innovate, versus just results. At Google, a recently failed product touted leaders, issued generous bonuses, and provided a prestigious founder’s award to those who worked on it. This is a crucial mindset to ensuring innovation is supported by the culture; and yet, it is outside the comfort zone and generally accepted practices of every organization that clearly defines and measures predictable outcomes, not behaviors that lead to those outcomes.

Second mindset to change: Separate innovation and compliance as different life stages of the growth process, and know which stage you’re in. Even if the same teams or people are working on both compliance and innovation activities at the same time,  define the difference in a project or activity by asking a simple question: “Is this work effort or stage primarily toward an efficiency outcome or is it a growth and improvement outcome?”  True innovation in an organization should aim to achieve both. Often the most powerful innovation gains are made not from major new products or services, but from achieving new ways to implement or deliver those products or services.

Third mindset to change: Communication between leaders and employees is mostly still from a parent-child mindset – one person is the authority, the other is expected to “do what they’re told.’ This behavior is toxic to innovation efforts.  We call it the “Elephant Factor.” See if this conversation rings true:

LEADER: The customer is concerned we haven’t delivered the specs for the module upgrade yet.

TEAMMATES: Yeah, we were just talking about that. We got waylaid by Project X this week.  But we think we have the answer now.

LEADER: Great!  What can I tell the customer?

TEAMMATES: Tell him we’ll have something definitely positively in the solution realm to show them next week.

A week later:

LEADER: How’s it going?

TEAMMATES: Well … that solution we had in mind didn’t really work. In fact, we actually wondered if it would.

LEADER: So, why did you tell me it would?

TEAMMATES: We were afraid to disappoint you.

The Elephant Factor (not telling the truth) is tearing up idea-generation and risk-taking in every organization, and people talk around them as if they don’t exist.  One side agrees to promises to appease the other side, knowing they can’t deliver. One side feels they don’t have power. The other side thinks nobody is accountable. Both sides are frustrated. And yet, everything in a business moves faster when people practice truthful, relevant conversation with the outcome of satisfying needs and building trust, versus finger-pointing and misunderstanding.

To produce harmony between innovation and implementation, practice two ground rules and one FAQ.  When an innovation culture takes hold, passion and winning catch fire.

Just keep an eye out for those Elephants.

Lisa Jackson and Gerry Schmidt are corporate culture experts with a proven method to teach leaders how to evolve their corporate cultures to perform better, innovate faster, and show they truly care about people in an unprecedented era of rapid change and transformation.

Visit them on the web at www.CorporateCulturePros.com or follow them on Twitter at http://twitter.com/corporatecultur

Improve productivity–lessons from America’s pass-time

The popular book/film Moneyball recounts the unconventional journey of Billy Beane’s transformation of the Oakland A’s baseball team who made a winning formula of recognizing and utilizing overlooked players and using data to measure performance. America’s companies can improve productivity by using some of these same techniques. Because we have a productivity problem.

Given 2/3 of the millions of people who have jobs are unengaged at work, there is a timely and important lesson in this powerful story.  Similar to professional sports, in business a relatively small percentage of players in the corporation (with the biggest credentials, title, brain-power or networks) are seen as most valuable, given most of the credit, and often become the “go-to” people in the organization’s attempts to innovate and grow.

Front-line on the line

Meanwhile, the overwhelming majority of front-line employees (who are closest to the customer and have great ideas for improving performance) are often left much to their own devices to navigate through tricky politics and bad bosses, and define a career path without abandoning “a life.”  Most find it’s easier just to “follow the rules”,  do what they’re told (wait to be told), and never speak up about how to make things better. (Typically the ones who have dared to speak up have been politely – or impolitely – told they’re out of line).  Creativity is suppressed even further by:

• Poorly run meetings with no opportunity for passionate or lively discussion, meaningful problem-solving, or ideas for “serving our customers better.”
• Decisions which are bounced around the matrix (it’s rarely clear who’s making one) until they lose all meaning.
• “Doing it all” mentalities – rarely can anyone besides a senior executive recite a short list of clear priorities for winning. (At least in baseball that formula is crystal clear)

And this is the cultural environment in which America’s companies hope to innovate and grow our way out of the recession?

Front-line empowerment means growth

In his book “Good Jobs America: Making America Work Better for Everyone” Paul Osterman (Professor at MIT School of Management) proposes that to restore America’s economic health and job growth, we must empower front-line employees to solve problems and focus on customers – really. He cites the examples of Japanese automakers, Southwest Airlines and Google, whose profitability and market capitalization far exceed their industry competitors – in case you need proof that focusing on developing workforces that are 100% passionate and aligned and contributing is the real Moneyball.

Bottom line: Increased health to the bottom line of any business of any size happens by enabling, encouraging, and empowering the masses in your workforce to do great work. All of them, not just some of them.

Old ways in new times–why they don’t work

But outdated management practices in hierarchical companies have a stranglehold on the best intentions to empower people. One hindering factor are time-crunched managers who can’t train or develop people who should be empowered.  But the most pervasive force derailing the empowerment movement is a deeply embedded mindset that “People aren’t really accountable.” From this mindset, we coddle our people until they fail and then ridicule them. We do our homework for our kids. We make it easy for people to “opt out.” And, we have  effectively decapitated the “head” from the “body” across our businesses by placing meaningful decision-making (the brain) in the hands of a very small group at the top, who are usually completely disconnected from the heart and hands – the employees whose main purpose is to do the work, and the customers themselves.

Growth comes from “Yes, I can help you!”

As a result, effective decision making and accountability are paralyzed in most companies. This is a very troubling phenomenon to us as corporate culture experts – and a significant barrier for companies attempting to grow through organic innovation and mergers. The facts and studies demonstrate without doubt, an empowered (read: accountable) workforce with passionate contributors are the best way to improve the organization’s customer experience and growth. So why does empowering front-line workers feel to most companies like allowing “the animals to run the zoo”?  Sure, “engagement” programs are very popular, but most haven’t gone far enough to place real, appropriate power and accountability into into the hands of those who can and want to make things better.

The 2/3 of the Gallup survey’s “unengaged” are a giant untapped well of raw talent and productivity waiting to be unleashed, most of who would love the chance to drive their companies down the field to a winning season.  They need and want the inspiration, clarity, and power to make your organization better.

“American firms are gradually learning this lesson, but it is sinking in too slowly, particularly when it comes to lower-paid employees….wages at the bottom of the job market have stayed frozen for some time. Numerous studies show that when low-paid front-line employees get pay raises, their productivity increases, as does the quality of their work” says Osterman.

The proper role of a manager or leader is to:

• Inspire,
• Cheerlead,
• Remove obstacles,
• Ensure resources are behind the right projects.

Not to:

• Control the work,
• Whip people into shape
• Belittle mistakes,
• Hoard information,
• Assume if the idea didn’t come from you, you aren’t doing your job.

“When you know better, you do better”

If firms can do better by engaging people on the front lines and harnessing their ideas and energy, why then aren’t they doing a better job? In the words of Maya Angelou, “When you know better, you do better.”

Osterman thinks the answer lies in the same reasons illustrated in Moneyball: Old-fashioned thinking and outmoded beliefs by those in power, threatened by what they perceive as “giving power away.”

“Students in business schools are taught they are being groomed as leaders and this means they will make decisions and be responsible for the enterprises’ success. ‘Managers think, workers execute’ is the mantra they learn. They are infrequently taught that success lies in the hands of an organization’s employees, people invisible to those at the top.”

This is supported by a popular Wall Street mindset that “soft” spending diminishes profitability (which is steadily eroding the long-term health of many companies, who lack the courage needed to spend money on training and developing people even if it means lower quarterly returns. Unexplainably, they don’t seem concerned with the costly turnover and gigantic compensation practices of top executives).

Bottom line–use the front-line. Give them tools, power, skills.

When organizations don’t give enough “how to” basic skills to their front-line (eg, what “winning” means in this organization, precisely how we pursue it, what is a good decision, what we do about customer service), it becomes a vicious cycle – you can’t empower people who aren’t trained effectively in “how to” play well. A rookie player with talent, passion, and energy but little experience and coaching isn’t in the starting line-up for a reason.

You don’t need a big budget or fancy program to make a difference in empowering people and increasing their passion to give their ideas and do their best work. Click to get a few simple, tried-and-true methods for getting more from your frontline workers.

 As Osterman says, “The real question for our society is whether we can muster the will to move in the direction of higher productivity and better quality. If the answer is yes, our front-line employees can lead the way. “

My question for you today is “Do you as a leader have the will to change this in your own organization?”

Lisa Jackson and Gerry Schmidt are corporate culture experts with a proven method to teach leaders how to evolve their corporate cultures to perform better, innovate faster, and show they truly care about people in an unprecedented era of rapid change and transformation.

Visit them on the web at www.CorporateCulturePros.com or follow them on Twitter at http://twitter.com/corporatecultur

*Gallup statistics on workforce engagement from study conducted in 2009. References to Paul Osterman from USA Today, October 5, 2011, “Moneyball Lessons for the U.S. Economy.”

“focusing on organizational health—the ability of your organization to align, execute, and renew itself faster than your competitors can—is just as important as focusing on the traditional drivers of business performance. Organizational health is about adapting to the present and shaping the future faster and better than the competition. Healthy organizations don’t merely learn to adjust themselves to their current context or to challenges that lie just ahead; they create a capacity to learn and keep changing over time. This, we believe, is where ultimate competitive advantage lies.”

We couldn’t agree more – in fact, organizational health and corporate culture are the most important drivers of results in our experience. They are clear predictors of financial health – if an organization is experiencing growth in a toxic culture, usually they have a protected status or a monopoly in the market. We consider it an important affirmation that McKinsey – a leader in transforming organizational strategies – chose to back their premise of “organizational health drives performance” with considerable research and credible experimentation inside companies.

What creates organizational health?

What McKinsey terms “recipes” for success we have long called “corporate culture.”  The drivers of organizational health are much the same as for individual health:

1) What does health mean?

Every person has a different definition of health. For some, it’s the ability to do competitive sports. For others, it’s having enough energy to get through the day. Sometimes it’s just as simple as “I want to feel good.”

For an organization, it’s important to begin by defining “What does a healthy workplace mean?”  “What are you trying to accomplish by building greater organizational health?”

We recommend: Ask your core executive team “What kind of people and healthy lifestyle / environment do we need, in order to win in our marketplace?”

2) Input determines output.

To achieve personal health, there are basic habits you must adopt into your daily life: Eating vegetables, avoiding sugar, and getting enough exercise. Then, there are the “extras” you can add-on if you want: Interval training for general cardiovascular health. Eating a vegan diet for philosophical and health reasons.  Cross-training to compete  in a triathlon.

There are universal basics for a healthy organization as well: A regular diet of honest, open conversations, beginning at the top. Ensuring  managers trust and empower people – the opposite of micro-managing.  Creating a little “healthy internal competition” helps too – we all run better next to someone who’s running at their best level.   The extras for organizations depend on the industry and core strengths: Technology companies often focus on health by hiring younger employees and building cultures that are “cool” with lots of freedom and concierge perks. Pharmaceutical companies (who are heavily regulated) focus on health through opportunities for growth, learning, and the chance to be part of cutting edge research.

We recommend: Cultivate regular times for open communication from all members of each key team in the organization. Leaders need to openly share their vision, reminding all of the desired outcome, while displaying trust in the strengths of each team member.

3) How does one stay motivated to pursue health?

This can be described as the “New Year’s Resolution Phenomenon.” Everyone has the experience of starting with good intentions, pursuing their goal with gung-ho enthusiasm, and a short-lived few weeks later, reverting to what’s easy and comfortable (often by convincing ourselves “I’m healthy enough”).  This is the same reason organizational change efforts don’t work – they don’t sustain attention on it. What helps? Nothing is more motivating to health than a combination of role models and leaders and a community of like-minded people you’re doing it with. The pursuit of health is hard: You have to have role models you admire, who are doing it themselves, and a way to keep the bigger picture of what you really want within sight. I hired a personal trainer whom I work with weekly and I have a clear goal that I remind myself of daily.

In organizations, most leaders move onto the next thing too soon. (One of our clients referred to this as the “shiny penny syndrome” – the CEO keeps being attracted to the next shiny penny, and it’s creating a lot of chaos in the organization.  The will-power of the leader determines the organization’s attention on the goal. You can create systems and processes, you can measure employee engagement all day long, but in the end, people are “copycats.” They’ll do what they see leaders do.

We recommend:  Be sure those who are in positions of power and influence are living examples of the change you want to see. And, like throwing out the junk food in your cupboards, eliminate every person in a position of power and influence who is distracting from healthy organizational behavior.  Otherwise your efforts won’t be credible.

4) Does a healthy mind = a healthy body?

The ability to identify and shift the “limiting beliefs and attitudes” one holds about health is the first step in shifting it.  For example, if one holds the belief  “I treat myself by eating unhealthy food, and healthy eating doesn’t feel like a treat” (a pretty common one in our culture), that will feel like a constant war inside, where you can discipline yourself for some time, until stress or habits trigger you to revert to old behaviors.

In an organization, mindset does determine health. It’s essential for organizational health, to identify which deeper needs really drive people’s true motivations – the need to be good at something, to have some level of autonomy, to feel connected to a bigger purpose and to one another, to win.  The need to try things and not be criticized for failure. (For example, Google had a gigantic flaming failure a few years back. The external world was hyping the massive failure of Google .. but internally was a different story. They gave the people who led the effort a “Founder’s Award,” big bonuses, significant public recognition, and a pat on the back for a great effort.) When the organization sets up rewards and processes that don’t tap lofty human motivation, they end up trying to “discipline” people through authority and money. This works for awhile, until people’s inherent need to feel independent, successful, to learn and grow. trumps the organization’s attempts to control them. Inevitably in this type of environment, the best ones leave.

We recommend: Surface healthy mindsets early and often, define what you want clearly, and nip pesky bad habits in the bud – such as the tendency to blame and ridicule failure.

5) What sustains health long-term?

Being a healthy person is a daily commitment to healthy habits – every person I’ve interviewed who chooses healthy over “yummy” says that it’s because it just feels better to be healthy.

The same is true for a healthy organization. It’s no accident … and winning is addictive.  If you do it long enough, it just becomes “The way things are.”

We recommend: Leaders are still the #1 predictor of organizational health. So, surround yourself with people who are living examples of healthy life. (i.e., Cultivate leaders who practice health, care about it, and remove those who don’t). True leaders are those who constantly “go first” in living the change they want to see. There’s no shortcut, and no substitute.

Regardless of your company’s size, everyone can benefit from the pursuit of better health. Here’s to an “apple a day” in your world.

Lisa Jackson and Gerry Schmidt are corporate culture experts with a proven method to teach leaders how to evolve their corporate cultures to perform better, innovate faster, and show they truly care about people in an unprecedented era of rapid change and transformation.

Visit them on the web at www.CorporateCulturePros.com or follow them on Twitter at http://twitter.com/corporatecultur

Note from Corporate Culture Pros: Sometimes wisdom comes from unexpected sources – for example, from fresh, young, and not-jaded CEOs whose ambitions have created new ways of interacting with old ideas, like sharing information, saving money, and playing games. In the meantime they have built company cultures that can effectively “herd cats” – ie, bring order to the chaos of a fast-growing, “youngster” work culture.

This week, we feature a guest contribution in our culture success stories” series, by Kyle Lagunas – the HR Analyst at Software Advice. Focused on offering a fresh take on points of interest in his market, Kyle is not your typical HR guy – and his take on corporate culture proves it!

We hope you enjoy interesting lessons from cultures at Dropbox, Zynga and Groupon.  Lisa Jackson

Cultivating Lasting Company Cultures at Start-Ups

In recent years, the most successful companies have focused less on perks and more on offering their employees something better: a connection to the company. Three prominent start-ups – Groupon, Zynga and Dropbox – are each cultivating lasting company cultures, and I’ve taken a look to see what’s working and what’s not.

Hire the Right People and Let Them Do Their Jobs. As online storage provider Dropbox’s CEO, Drew Houston, can attest, hiring the right people for your organization is the most important step in building your company culture. Since day one, Dropbox has focus on hiring fewer, but better people. Offering a flexible schedule and giving employees the ability to choose what projects they’ll work on, Dropbox puts their people in the driver’s seat of their careers.

Build Trust and Provide Transparency. Groupon – the Chicago-based company that made coupons cool again – entrusts their team to get the job done. As such, their people genuinely care about what they do. And trust is a two-way street. In an interview with Forbes, Groupon’s Head of People Strategy, Dan Jessup said, “We’re big on transparency, and staying close to our roots, what we stand for, as we grow.”

Share Ownership. Each and every employee at Zynga (developers of Farmville and Words With Friends – my newest addiction) is expected to follow the same core value in every endeavor: “Be your own CEO: Own outcomes.” CEO Mark Pincus explained to Fast Company that he “wanted to push the ownership and decision making to the [employees]… and empower them to go for it, to take risks and make mistakes.” By empowering his team with this core value (and commanding them to “Move at Zynga Speed”), Pincus’ company is poised for great success. (Lisa comment: This level of empowerment can backfire if you don’t get “hire the right people” right.)

Keep People Connected. One of the biggest challenges Dropbox faces in growing is keeping people on the same page. Where the team was once small enough to fit in one room, things became more difficult as the team got bigger. Houston said: “As we grew larger, we had to start deliberately trying to figure out how to get the right info in the right peoples’ hands.”

When looking for tools for enhancing communication in the workplace, many businesses are adopting enterprise social networks such as Yammer. These web-based systems give users the ability to view official company announcements, share important information, and communicate with anyone in the company.

Nail the Onboarding Process. The culture at Groupon can be a little jarring for newcomers. In an interview with Vanity Fair, CEO Andrew Mason says he still tries to make his company feel like a start-up. “As we get bigger, instead of being like most companies, conforming and becoming more normal, we want to become weirder.” Mason knows getting onto the Groupon brainwave is vital to these employees’ success. So, he meets with a group of new employees every two weeks, provides an overview of the company, and gives them a chance to ask him any questions directly.

Nip Entitlement in the Bud.  Preparing for the company to go public, Zynga officials are concerned about the impact sudden wealth created by stock offerings may have on their employees. But the issue Zynga faces has less to do with turnover and more to do with the potential impact on company culture. After all, perks and incentives are meant to give employees a sense of value, not entitlement. Now, Zynga’s faced with the challenge of finding a balance moving forward.

Corporate Culture Pros End Note:

Bravo to this wisdom!

Legacy corporations – or indeed any organization – seeking more innovation and and growth, would be wise to listen to these culture lessons.

And, here’s a free tool to assess your organization’s progress toward building this type of culture.

Lisa Jackson and Gerry Schmidt are corporate culture experts. They teach leaders a proven method for evolving their corporate cultures to perform better, innovate faster, and show they truly care about people in an unprecedented era of rapid change and transformation.

This article is available in its entirety on Kyle’s blog at: http://www.softwareadvice.com/articles/hr/marching-to-their-own-beat-company-culture-at-dropbox-zynga-and-groupon-081011/

Where should the responsibility of work-life initiatives lie? Should the government be weighing in with legislation, companies be ponying up resources or should we be our own work-life gurus?

Corporate cultures that have cultivated programs in which work-life balance is alive and well do reap financial rewards. Think SAS software as an example. Best Buy famously has employees set their own schedules – a retail organization? Really?

3 Critical Issues

There are 3 issues behind the questions posted by Judy Martin in her blog article Judge: Work-Life Guru Is Within, Not In Bloomberg C-Suite that deserve thought:

First, what is the “collective” responsibility for the individual well-being of a family? This is an argument that will never be won as long as we have a capitalist economy and people who can freely speak. Personally, I believe freedom creates a higher level of personal responsibility, and in that light all of us – women and men – must make hard choices and trade-offs – that’s the beauty of a truly free society.

Second, in a global economy increasingly challenged to compete in almost every industry, every leader is tasked to continuously “do more with less.” Unless you have been practicing Lean process principles for years, this can feel like a mission impossible – and results primarily in shifting bigger workloads to fewer employees. This stress is indeed a gender-neutral issue. American workers average approximately ten paid holidays per year while British workers average twenty-five holidays and German employees thirty. Americans work twelve weeks more a year in total hours than Europeans. Even when vacation time is offered in some U.S. companies, some choose not to take advantage of it. A 2003 survey by Management Recruiter International stated that fifty percent of executives surveyed didn’t have plans to take a vacation. They decided to stay at work and use their vacation time to get caught up on their increased workloads. [via Wikipedia on Work-Life-Balance]

Women OR men who choose to attend soccer games, leave work to take kids to doctor appointments, or keep to the 40 hour week to be home for dinner (and don’t take work home) will be naturally by-passed for promotion in comparison to those who are putting in 70 hours. Seems fair – ROI for individual effort should be rewarded. The leader faced with the hard choice to promote the Gen Y single gal working 70 hours every week v. the family-guy working 40 hours – when both are ambitious, insightful, and deserving in different ways? Not a call I’d want to make … but it’s the wrong place to put attention.  The right place is to put attention on cultivating more clarity of priorities so workloads don’t require 70 hours to get done. Further, the corporate world is not simply about the choice between family and work, but also the choice about whether you can stomach the ruthless games and sacrifices the corporation makes – including the lack of cultural value we place on truly collaborative styles of managing that allow everyone to share the load via give-and-take approach to supporting everyone’s work and life.

Supportive corporate cultures will better bottom lines

But the third issue is most central to the cause of improving business performance AND reclaiming people’s lives: True innovation of work-life balance will come from leaders who see organizational culture as a driver behind business performance and as a critical element of their business, like air and water are to growth in nature. Culture is the unseen element of what makes a company great. To invest in it as you do new technology or capital improvements is an ROI you can see and count on.  This means examining “work-life balance” beyond black-and-white, either/or policies – ie, and following through on the promise that people are what makes your business work. And people come with families and lives and they aren’t always convenient for the corporation.  A person’s outside life is not an invisible nuisance but an integral part of “Who I am and what I bring to your company.”  Remember the guy who worked nights and weekends for your product launch? Are you willing to delay a deadline so he can stay home with his newborn a couple of weeks (and not make his wife schedule a c-section to fit birth into the project deadline)? Life stages and phases are always in play for people, whether it’s attending grandma’s 90th birthday or staying home to breast-feed a newborn. Supporting employee’s whole lives – regardless of age or gender – is more than lip service. It means giving real teeth to policies that honor  fluidity of a give-and-take balance.

And that effort will always improve the overall financial position of the organization, because balanced people are happier, and happier employees work harder at work.

Demands will change old-guard corporate cultures

The good news is the younger generations will not only demand work-life balance innovation in the workplace – they will create it. They were raised by baby-boomer parents who gave up everything for “the almighty job” – to be rewarded with no job security and continuous layoffs. The “internet generation” believes they have a voice in everything – and will raise that voice to stand for what’s right.

“Who says I have to give up family to be an effective employee?”

In the meantime, I think raising our collective voices and spotlighting this subject is crucial. We are a stressed-out burned out society, and part of the reason is we’re all work and no play … making us perhaps richer in our bank accounts but perhaps poorer in what really counts – health and well-being.

Lisa Jackson and Gerry Schmidt are corporate culture experts. They teach leaders a proven method for evolving their corporate cultures to perform better, innovate faster, and show they truly care about people in an unprecedented era of rapid change and transformation.

Visit them on the web at www.CorporateCulturePros.com or follow them on Twitter at http://twitter.com/corporatecultur

Can sick corporate cultures be healed by merging?

By now, you may have read of the firing by phone of Carol Bartz from the post of Yahoo CEO (just a few weeks after the Chairman publicly affirmed total support for her). Rumors and speculation abound regarding the future of Yahoo. To some it is ripe for a merger or acquisition (in spite of Jerry Yang’s insistence “we’re not for sale”).

However, by all accounts, there is a very unbalanced, sick corporate culture at Yahoo these days and while its brand may be attractive as a prime acquisition, healing what seems to be a sick culture will require a forthright, visionary leader.  We caught up with a former executive this morning to get his take on what’s really going on inside Yahoo:

“Sure this move has created a huge uproar internally: Who’s running the company now?  Carol had the vision – ie, heavy in mobile, shedding groups that weren’t in the sweet spot – but she was setting a course and the general sense was we were attempting to stay true to that. She was not charismatic and her over-use of f-bombs did not inspire, but she was smart and she was the leader.

Her leaving put fuel on the fire of the huge morale issue at Yahoo.  Anyone coming in now would have to be greatly respected already, or would have to earn instant respect for there to be any believability factor.  Yahoo has burned through 3 CEO’s in about 6 years (one an interim stint by Yang) – but not one of them has invigorated people and gotten everyone believing “Yes this leader can steer the ship right.”  In the end it boils down to a trust factor: People at Yahoo don’t really trust leaders have set the company on a good track for winning.  The fact Carol was let go with no succession plan worsens trust.  Yahoo is now a rudderless ship set completely adrift – ripe for someone to cherry-pick the assets …. and divest the people.

Meanwhile, staff are a living-breathing question mark … great people are jumping ship at an alarming rate.  That fuels even more fear.  “What are we supposed to really be focusing on?”

We bleed purple at Yahoo. People love the brand and the company, but are losing faith and commitment in the chase.  When you’re shutting units and firing leaders, it shuts everyone down. How do you stay positive in that environment?”

Co-founder Jerry Yang gave his answer in response to a staffer who spoke up at the recent all-hands meeting, asking “Why did the board fire the CEO without first having a plan in place, which the questioning employee noted had further worsened trust issues with Yahoo leadership?” (That question got the biggest applause.)

“Trust us”, said Yang.

A big ask for beleaguered Yahoo staffers these days.  Trust is earned, not blindly given in spite of one’s actions. Anyone who has lived through a break in trust knows it takes time and effort to rebuild.

—

Would a merger with AOL solve Yahoo’s problems?  Doubtful ….

Corporate mergers and acquisitions happen all the time, but 4 out of 5 fail to gain the promised ROI.  The marriage of two companies that looked so advantageous financially rarely is given enough attention to merging at the corporate culture level – and leaves people more confused then ever about direction and leadership.

What would you recommend for any buyer of Yahoo or others seeking to merge two corporate cultures?

Here are a few tips from our experience:

Download our 5 Culture Tips to Prepare for Successful Mergers

Lisa Jackson and Gerry Schmidt are corporate culture experts. They teach leaders a proven method for evolving their corporate cultures to perform better, innovate faster, and show they truly care about people in an unprecedented era of rapid change and transformation.

Visit them on the web at www.CorporateCulturePros.com or follow them on Twitter at http://twitter.com/corporatecultur