Good thoughts and comments on company culture from Olivier Blanchard. Culture does indeed make the vibe and vibe makes the experience—from vivid to vile.

Negativity and conflict kill the vibe. A tyrannical boss kills the vibe. Boredom kills the vibe. Lousy working conditions kill the vibe. Not being empowered to do your job kills the vibe. Rude customers or clients kill the vibe.

If enthusiasm and excitement are contagious (and they are), so is negativity.

Oh so true. Olivier describes the great vibe at a client of his and then says,

What is most striking about this ecosystem is the complete absence of even a trace of corporate culture. You won’t find any micromanaging bosses there. The workers don’t have to attend sales meetings or team-building clinic…The vibe is theirs to own. They are the custodians of the vibe, and the senior team members teach the newbies how to foster it and make it their own.

What I see is that the employee-owned vibe is the culture, and it couldn’t exist without the whole-hearted agreement, support, connivance and encouragement of the boss.

Lao Tzu said it best more than 2000 years ago,

As for the best leaders,
the people do not notice their existence.
The next best,
the people honor and praise.
The next, the people fear;
and the next, the people hate…
When the best leader’s work is done,
the people say, “We did it ourselves!”
To lead the people, walk behind them.

Print it out, put it where you can see it every day, let it be the basis of your management and it will become the basis of your culture.

The result will be a great vibe that your customers and candidates love and your competitors envy.

I keep reading about how MySpace, Second Life and Twitter, etc., are changing the world. I not only don’t believe it, but hope that it’s not true.

I find it tragic that people would rather sit alone in a room and interact with friends** online, as opposed to getting together in person or having a phone conversation.

I asked a guy I know well about that and his response stunned me—he said that he doesn’t have time to go out or yak on the phone, which is really weird since I know he spends 5-15+ hours a week in these online venues.

As to Twitter, it takes me back to when 900 numbers were a new toy; Jose Canseco had one and people paid per minute to hear him talk about what he had for breakfast. People paid money for that, whereas they pay for Twitter in time, but the inanity still costs.

Granted, I’m not an early adopter, I’m a Luddite wannabe, so my opinion isn’t worth much, but John C. Dvorak and Lance Ulanoff of PC magazine are knowledgeable and their comments sure confirmed my gut reaction.

**The term “friend” as used online is a whole different discussion.

Everybody has what I call three-in-the-morning thoughts. They usually happen when you’re tired or frustrated and your energy is down. That’s when you find yourself wondering if

• it’ll ever happen;
• it’s really worth it—

and it doesn’t even matter what “it” is.

Entrepreneurs and execs in startups and fast moving businesses are especially prone to these thoughts, but everybody has them at one time or another.

It’s like driving across a desert or plain—the horizon never seems to get any closer, so your destination doesn’t either.

Three-in-the-morning thoughts are natural and only cause trouble when they stay in your head and insidiously become the background music to everything you’re doing.

Happily, there’s a fairly easy fix that involves a simple switch in focus.

Going back to the driving analogy, when everything looks the same and it seems that you’re going nowhere, you need to periodically check the odometer to know how far you’ve really come.

The same applies to any “it” that you’re after—periodically you need to focus on how far you’ve come, as opposed to how far you have left to go; you need to focus on what’s been accomplished, not just what still needs to be done.

I’m not saying that you want to sit back and rest on your laurels, or break your arm patting yourself on the back, but you do need to recognize and appreciate milestones achieved or, as on the desert, the trip will feel endless.

But don’t wait until a three-in-the-morning thought happens and you have to climb out of a psychic hole before you do this, just schedule 60 seconds of “it” odometer appreciation time daily until that becomes the background music of your days.

Do it. You’ll be amazed at how this one “little” thing can energize you and jumpstart your enthusiasm.

Then share the wealth and do it for/with your people.

There’s a lot of talk right now about the resistance of mangers and older employees to Web 2.0 initiatives and the information-sharing that goes with them.

Kind of amusing that this big generational argument is happening during the 40th anniversary of the Summer of Love, the start of the biggest generational fight most of us remember—we weren’t around for the Roaring Twenties, the rise of jazz, let alone rebelled with the suffragettes.

The Boomer theme of, “you can’t trust anyone over thirty” is being reprised today by the wired generation. The Boomers accused their bosses of being unwilling to change and when they became the bosses, they were accused in turn. Some things never change. Generational differences have always existed, with the younger generation blasting into the future and screaming that the older ones are holding them back, but it’s ridiculous to paint everybody over a certain age with the same brush.

In May I commented that I thought a lot of the problem was grounded in insecurity and I still believe that, but I’ve done a lot of thinking because the subject’s so prevalent and have some further thoughts.

It should be remembered that managers’ rigidity has as much to do as much with the corporate culture as with the individuals involved. Openness is based on trust and if the culture doesn’t foster that then you should expect people to be ultra turf conscious, not interested in sharing, and prone to spending large amounts of energy fighting every new thing that comes along. In 2007 it’s Web 2.0; twenty-five years ago it was telecommuting (and still is in many companies).

But if we’re going to talk about rigidity, then it has to be recognized that it’s on all sides—there are a lot of pretty rigid twenty- and thirty-somethings (and no one in their right mind ever called a teenager flexible). If you have any doubts about this, try getting to your twenty-something co-workers to approach a subject from any position other than the one they advocate.

It’s not so much doing it differently, as it is doing it my way and, unhappily, that attitude has substantially worsened. It seems that everybody has a group and while their group is OK, other groups, i.e., any that don’t agree with theirs, are rigid, inflexible and standing in the way of progress.

There’s value to be found in most approaches and when that value is tweaked and/or merged with other methods the result is usually worth far more than the original.

Pay
According to a new methodology developed by the Associated Press for measuring CEO compensation,

“The AP formula…adds up salaries, bonuses, perks, above-market interest on pay that is set aside for later and what companies estimated the present value to be of restricted stock and options awards on the day they were granted last year.

This differs from the summary compensation formula that the SEC requires companies to use in proxy statement…SEC formula is of less value to investors because it includes expenses that companies recognize during the year for current and previously awarded stock grants.

That tends to overstate in some cases, and understate in others, the specific pay decisions boards of directors took during the year.”

That makes Terry Semel the most highly paid exec out of the 386 companies of the S&P 500 analyzed—which may surprise Yahoo’s investors. Pay for the 386 CEOs totaled a cool $4.16 billion.

Even the exec whose compensation seemed to be on the same planet as you and I really wasn’t—Costco’s CEO James Sinegal’s salary is just $411,688, but that doesn’t count the 2.4 million Costco shares he owns, worth about $1.3 billion, or the options he has to buy 1.2 million more shares.

Perks
“Free beer! Free boat outings! Free taxes!“

How cool is that? Not only do you get paid millions of dollars, but then your company also turns around and the pays millions in taxes owed. I wonder, if the money paid in taxes is also considered compensation, does the company then pay the taxes on that ad infinitum?

These numbers should certainly inspire the younger generation to focus on a business career. After all, these folks make more than

• athletes—for a longer period of time and without the chance of injury;
• movie and rock stars—the odds of success don’t rest on the fickly taste of 14-34-year-olds;
• drug dealers—no bullets and you only end up in jail if you’re really, really arrogant or just plain stupid.

Not only that, but you don’t even have to be good at what you do!

I’ve always worked with startups and young companies. I lived in the Bay Area during the dot com frenzy, when every cab driver had a business plan, so I thought I’d pretty much heard it all.

But times are hot and entrepreneurs are once again on a roll.

I’m not sure that this qualifies as new or just deja vu, but I had a fascinating call this week from a reader who’s currently talking with investors and had somehow heard that we were looking for beta customers for our new (as yet unnamed) software product that

• guarantees fairness when giving out stock options, so employees love it;
• predicts dilution, so investors love it;
• has an audit trail, so governance types love it; and
• eliminates negotiations, supports a “do it right” culture and automatically creates all related reports, so CEOs adore it.

Never look a gift horse in the mouth, so, since we’ll be looking for beta clients shortly, I asked about some basic information that our program needs to work, things such as

• Did he have a staffing plan, i.e., the types of people he needed in the company’s first two years and at what point he would need them.
• Had he identified the key objectives that the company planned to achieve during those two years?
• Etc.

OK, this is all basic business plan stuff, and he said he was talking to investors, so he must have it, right?

Wrong!

He said he hadn’t really had time to lock down all the “details,” but since his funding was coming through in the next week or so he wanted the stock plan to be ready.

Ah huh. I told him it didn’t look like our timelines coincided, but I wished him great success. (I really wish his investors, assuming he actually has some, good luck—they’re going to need it!)

Stay safe and happy, and I’ll see you next week.

Are you an info-skimmer, dipper, plunger, or junkie?

With the amount of information available today, knowing the answer can change your life.

Here’s why.

All of us are interested in various things—whether in our personal or our professional lives. Beyond our own interests, there are the interests of family, friends and colleagues, because most of us enjoy passing on info we feel they’d enjoy. It’s a way to show our interest and demonstrate that we really do pay attention to them. The information came from articles, books, radio and TV, and was more confined to the specific subject, and the lack of readily available, tangential info curbed our casual curiosity.

Then came the web…

And there went the curb.

The information found on the web is packed with hot links, often to tantalizing items that have no real relevance to our original interest, but they catch our eye and it’s oh-so-easy to click. And, of course, there are more enticing links in that item and in the next and suddenly minutes, or even hours, have sped by.

This hits some people much harder than others, hence the importance of the original question.

• Skimmers easily miss important connections because they’re moving too fast.
• Dippers get all of what they need and usually turn away from the extraneous.
• Plungers love to dive-in to great depth, but are fairly good at staying on target.
• Junkies have the greatest problems, lose the most time, and are more likely to fall over the edge into addiction. (Info-addiction isn’t as obvious as games, chat rooms, etc., because information isn’t considered a negative.)

Depending on your answer, you may decide to increase or decrease your info-attitude, which means raising your awareness and changing your MAP.

Fortunately, it’s your choice.

I clenched my teeth as I read yet another rhapsody by Jack Welch (Business Week May 21) on why Six Sigma is the silver bullet for managing a successful company and how it should permeate every corner of a company.

Two responses in the current issue push the idea of using Six Sigma in a very targeted approach instead. I found one comment in Jay Arthur’s letter especially interesting, “As little as 4% of any business causes half the waste, rework, and lost profit. So let Six Sigma identify the 4%, then focus on that 4%.”—a statement that does make sense.

The current issue of IN (IN INNOVATION), Business Week’s magazine inside the magazine) focuses on Six Sigma, asking if it’s still applicable today, “The discipline was developed [by Motorola] as a systematic way to improve quality, but the reason it caught fire was its effectiveness in cutting costs and improving profitability. That makes it a powerful tool—if those are a company’s goals.”

But in a world where innovation is the top priority for a company to grow—since few companies have the cash horde to buy their way to success—blanket use of Six Sigma can actually kill the golden innovation goose, as the profile on 3M, long known for innovation, shows.

A companion viewpoint piece talks about having it both ways citing The Ambidextrous Organization (published as a downloadable PDF by the Harvard Business Review for just six bucks), in which “…Charles O’Reilly III and Michael Tushman, business school professors at Stanford and Harvard, respectively, acknowledge the paradox of exploitative vs. explorative efforts. They conclude that smart companies separate the more ambitious efforts at innovation from ongoing efforts at continuous improvement. That allows for different processes, structure, and cultures to emerge within the same company.

An “ambidextrous” organization, they write, has independent project teams integrated into the existing management hierarchy. A tightly integrated senior team makes sure the activities of the right hand don’t work at cross-purposes with the goals of the left. Both the traditional business and the fledglings report to the same executive team but are managed under a very different set of rules, depending on where each is in its maturity cycle. Remarkably, in the professors’ study of 35 attempts at breakthrough innovation, ambidextrous structures were successful 90% of the time. Other models, such as cross-functional teams and unsupported skunkworks-style groups, were successful less than 25% of the time.

I’ve said many times that there are no silver bullets, but the ambidextrous approach certainly makes a lot more sense—Six Sigma would approve.

In a post last November I said, ” The 212-year-old force that was instrumental in building the most powerful industrial nation on the planet could be just as instrumental in presiding at its demise.”

Since then, I’ve taken a certain amount of ribbing, some friendly, some not, but all posing the same question, “Who the hell are you to make that statement?” I suppose the answer is “nobody,” at least in the sense of being any kind of authority, which I definitely am not.

But that doesn’t make me wrong.

In an opinion piece in Business Week, two real authorities, Clayton M. Christensen and Scott D. Anthony broach the subject from the other side.

They ask, “Why do smart, motivated, hardworking managers find it so difficult to innovate? Here’s one key culprit: the belief that management’s primary obligation is to maximize shareholder value. That credo, which is shaky to begin with, distorts managers’ sense of responsibility. And in fact it has been rendered obsolete by developments in the capital markets.”

They explain, “Through the 1960s…The average shareholding period was more than five years. Managers seeking to maximize the long-term strength and growth of their companies could reward these patient shareholders. But today shares are held, on average, less than 10 months. Should managers really regard such investors, whose investment horizons are shorter than the most nearsighted of managers, as stakeholders whose value they ought to maximize?”

They suggest, “Perhaps it is time for companies to adjust the paradigm of management responsibility: “You are investors and speculators, not shareholders, and you temporarily find yourselves holding the securities of our company. You are responsible for maximizing the returns on your investments. Our responsibility is to maximize the long-term value of this company. We will therefore act in the interest of those whose interests coincide with our long-term prospects, namely employees, customers, the communities in which our employees live, and the minority of investors who plan to hold our securities for several years.”

Well, the proof is in the pudding, or, in a very well known case, it’s in the denim. In 1985, led by then CEO Robert D. Haas, the founder’s great-great-grandnephew, and with the support of the Haas family, Levi Strauss went private. At the time, Haas said that the company couldn’t succeed in the future when all Wall Street/investors focused on were quarterly results.

I lived in San Francisco back then and still remember people cynically saying that the family would take Levi public in a short time just to make more millions.

How wrong they were. Sure, Levi’s had its ups and downs, but it’s still private, still going strong and still investing in the future.

More proof? Check out Warren Buffet’s holdings, or any other “patient” investor.

I’ve written several posts about the downside of email, so I got a kick out of the timing of an article (the Friday before Memorial Day) on email bankruptcy.

My hero, to whom I really relate, is “Stanford computer science professor Donald E. Knuth started using e-mail in 1975 and stopped using it 15 years later. Knuth said he prefers to concentrate on writing books rather than be distracted by the steady stream of communication.”

“I’d get to work and start answering e-mail — three hours later, I’d say, “Oh, what was I supposed to do today?” Knuth said that he has no regrets. “I have been a happy man since Jan. 1, 1990.”

The article doesn’t ignore the other side, “The critics of e-mail themselves have critics, who say copping out is a reactionary and isolationist way of dealing with modern communications.”

Copping out? Excuse me, but where is it written that we all have to buy into every invention that comes along? Who says that we have to carry a cell phone, listen to an I-pod, or use email?

As to the isolationist, I don’t think so. I posted my phone number prominently on this blog and find that most of those commenting love the idea that they can call and I’ll actually talk to them. Sure, it takes a bit of time, but it’s more interesting, we both learn more and it’s far more enjoyable than tapping away on a keyboard.

A recent Hi & Lois cartoon that I cut out (but can’t access online, sorry) voices my feelings perfectly. Their teenage son says, “Emails, text messages and IMs just aren’t enough for me anymore.” Lois responds, “Why don’t you try direct inter-personal communication? Otherwise known as talking.”

So, anytime you’re in the mood for some interpersonal communications give me a call, the number is in the right-hand column—and it’s toll free, too.

As for those who tell me that I’m defeating the purpose of a blog, that those comments should be shared with everyone in the blogsphere, I’ve found that most of my callers are running startups or small companies and they don’t want to publicly post their questions/comments. Even anonymously, they’re concerned that someone close to the situation could still recognize them.

So we talk, and sometimes they give me permission to use the content, and sometimes not—and that’s OK.