1) Create an organization where those who manage others are hired for their ability to manage well, supported to get even better at managing, and held accountable and rewarded for doing so.
2) Then be clear about what you’re trying to accomplish as an organization – not only in terms of financial goals, but in a more three-dimensional way. What’s your purpose; what do you aspire to bring to the world? What kind of a culture do you want to create in order to do that? What will the organization look, feel and sound like if you’re embodying that mission and culture? How will you measure success? And then, once you’ve clarified your hoped-for future, consistently focus on keeping that vision top of mind and working together to achieve it.
Yesterday’s Ducks in a Row focus was Greg Smith and his resignation from Goldman Sachs. Greg resigned because he felt the culture had deteriorated to the point that he could no longer ethically tell candidates that it’s a great place to work—Goldman’s focus is squarely on maximizing their own profit and clients be damned. (The story is all over traditional and social media.)
At the end of his resignation Greg says,
Make the client the focal point of your business again. Without clients you will not make money. In fact, you will not exist. Weed out the morally bankrupt people, no matter how much money they make for the firm. And get the culture right again, so people want to work here for the right reasons. People who care only about making money will not sustain this firm — or the trust of its clients — for very much longer.
The bold is mine and that thought fits the “if you learn nothing else…” admonishment.
But I will go a step further—
You can’t attract great clients without great talent, so even if you make money in the short-term you will die in the long-term—bereft of both talent and clients.
Great culture attracts great talent; great talent attracts great clients; great clients spend great money—over and over and over.
If you are in touch with any media, traditional, new or social, you are probably aware that Greg Smith resigned last Wednesday from Goldman Sachs; resigned very publicly in the form of an op-ed piece in the NY Times.
The firm has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for.
Smith was executive director and head of the firm’s United States equity derivatives business in Europe, the Middle East and Africa, but for years he was deeply involved with Goldman’s recruiting efforts.
I knew it was time to leave when I realized I could no longer look students in the eye and tell them what a great place this was to work.
Because of the recruiting video he wasn’t quite the anonymous 33-year-old midlevel executive described, but now his comments and opinions are on everybody’s mind.
(You can read Lloyd Blankfein and Gary Cohn’s response to the resignation here.)
Backing up one’s ethical beliefs means putting your money where your mouth is, which may be a difficult concept for many players and commentators in the financial world to understand.
Mr. Smith is making a considerable financial sacrifice in publicly criticizing Goldman. Most Wall Street employees sign nondisparagement and nondisclosure agreements before they join a firm. If Mr. Smith did, Goldman may take legal action and refuse to release stock options he has accumulated. Mr. Smith may also find it difficult to find work on Wall Street after such a public resignation.
But if I were an employer I would work particularly hard to bring Smith into my organization.
After all, how often do you have the opportunity to hire a moral compass that has already been tested and proven accurate?
A study by Bain & Company, published in 2001, showed that acquiring a new customer can cost six to seven times more than retaining an existing customer, and that increasing customer retention rates by 5% boosts profits by 25% to 95%.
Why is it that so many managers ignore the connection between happy employees and happy customers?
Why do they insist on putting the cart before the horse and only invest in their people after revenues increase?
In yet another study researchers again found that customer retention is a function of great customer service, in other words, happy employees result in more loyal customers who spend more.
Zappos may be the poster child of the happy workforce, but there are many ways of achieving the same happy results.
2006, American Express, the credit card issuer, started an internal program that involved training and incentivizing its staff to get customers more engaged. The company transformed its traditional service call by getting rid of scripts and taking customer service representatives off the clock — which allowed the representative to decide how long he or she wanted to spend on each call. It also changed its employee compensation structure, directly linking a big portion of incentive pay to customer feedback. The result: Customers increased their spending on Amex products by 8% to 10% and overall service margins widened, according to a case study by Joseph Handelman, a professor at Ross. In the most recent quarter, the company announced that card members spent a record amount on their Amex cards; total revenue was $7.74 billion, up 5% from a year ago.
Underlying Amex’s actions was recognition of the intelligence of their customer service workforce and a decision to trust their people to treat their customers well and the payoff for doing so was substantial.
Lack of trust in employees is the elephant in managerial corridors and while it sometimes stems from a manager’s own insecurity it’s more often the result of poor hiring.
Managers claim that careful hiring is time-consuming and takes too long, but that’s a cop-out to short-term thinking, as is gutting customer service when the economy slows.
“When sales and profits are down, customer service is easy to cut. It [poor customer service] doesn’t show up right away. Where it shows up is in long-term customer profitability.” –Ronald Hess, professor of marketing at William & Mary School of Business, who studies customer satisfaction and loyalty.
And while you can’t control the economy, you can focus on eliminating the elephant within your own organization.
Ask anybody with a blog and they will tell you that while Akismet does a great job of catching spam, making sure that real comments weren’t also caught is a nuisance; especially if you let it go too long. Most spam comments are stupid, meaningless or boring, but lately one spambot has been leaving quotes, so I copied the last batch to share with you today; Plato’s and Asimov’s were pure serendipity from other places.
With the Republican primary in full throttle I thought this comment by Edward R. Murrow was very appropriate; note that it applies equally well to the Democrats, “When the politicians complain that TV turns the proceedings into a circus, it should be made clear that the circus was already there, and that TV has merely demonstrated that not all the performers are well trained.”
Politicians on all sides of the spectrum have been providing a constant supply of sexual peccadilloes and we can than Henry Kissinger for providing a succinct explanation of why, “Power is the ultimate aphrodisiac.”
Throughout history sexual peccadilloes have been dominantly the province of men, which may have led to Lady Nancy Astor’s scathing judgment, “I married beneath me. All women do.”
Centuries apart, Plato and George Dorsey offered similar opinions on the same subject,
Plato “You can discover more about a person in an hour of play than in a year of conversation.”
George Dorsey: “Play is the beginning of knowledge.”
That’s an attitude that ties closely with Dale Carnegie’s thought, “You can make more friends in two months by becoming interested in other people than you can in two years by trying to get other people interested in you.”
Finally, whether globally or locally, humans had best take heed of Isaac Asimov’s words or nothing will be solved in time, “If knowledge can create problems, it is not through ignorance that we can solve them.”
After wasting more than an hour looking for good Saint Patrick’s jokes I decided I already used the best ones a few years ago.
What I did find was a 1949 Noveltoon called Leprechaun’s Gold that, to my mind, has both political and business parables applicable today. What about you?
Irish or not, I wish you sunshine, shamrocks, and rainbows.
That’s a big percentage for something considered random, dubious or non-existent, depending on whom you ask.
Further research found “a combination of what we call a lucky attitude and a lucky network” as opposed to random luck.
What happens next? Does that attitude continue as success mounts?
But the biggest risk for top leaders is being complacent and overconfident — which amounts to being disconnected from the reality, attitude, and relationships that can sustain and take excellence to a new place.
Tjan recommends seven MAP functions to avoid the disconnect:
humility, the lack of which leads to arrogance;
intellectual curiosity, the lack of which also leads to arrogance;
optimism, looking first for the positive attracts great people, while the opposite repels them;
vulnerability, the best preventative for arrogance;
authenticity, which is lost when shrouded in spin; worse, believing the spin leads to arrogance;
generosity, no matter your success, share your knowledge sans the ‘what’s in it for me’ attitude; and
openness, willingness to a listen to new ideas from 360 degrees of non-traditional sources.
Read the article (it’s short) and then share your thoughts on luck below.
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History is interesting, the more ancient the better, but ‘ancient’ means different things by context.
Ancient Internet history dates more to the 1990s and one interesting historical nugget is that the general attitude that everything on the Internet should be free was nonexistent.
Because this was 1995, nobody was yet shouting from the rooftops that information wanted to be free. “Some of the choices we made early on were dictated by the world we lived in,” Ms. Hicks said. “People paid for content.”
Angie’s List went public in November, 2011 at $13, jumped 25% and trades close to that number today.
Angie’s List has over a million subscribers and around three quarters of them renewed in 2011, up from 62 percent in 2008.
The business is built entirely around user-generated content, but differs in a very significant way from other rating sites, think Yelp.
If you are developing an Internet company counting on advertising revenue is the norm, but the idea of targeted ads is facing a major backlash. The only way to target is to track.
73% say they would…
NOT BE OKAY with a search engine keeping track of your searches and using that information to personalize your future search results because you feel it is an invasion of privacy
The subscription model is making a comeback and it is one you should consider—assuming you are offering something of real value.
It matters not that Mitchell Gibbs, director of development at the Front Steps homeless shelter and involved in setting up the program, believes it has inspired an “entrepreneurial spirit” among its homeless participants, “It’s an employment opportunity, regardless of who is offering it.”
And homeless participant Clarence Jones must be wrong when he says, “Everyone thinks I’m getting the rough end of the stick, but I don’t feel that. I love talking to people and it’s a job. An honest day of work and pay.”
Obviously the pundits know more; they’ve probably spent more time working hands on with the homeless than Gibbs and studied homelessness more than Jones.
These days arrogance knows no bounds and this is a great example of that.
I don’t see this as any different than the human sign holders, many of whom are also homeless, that you see at major intersections promoting everything from mattress sales to cell phones to pizza.
Of course, the products they promote don’t infringe the promised land of tech, so nobody cares.
It’s likely that nobody would care if they hired the homeless as hotspots in other cities or even in Austin when SXSW wasn’t on.
I agree with Adam Hanft, who said that even if the effort was well intended, it seemed to turn a blind eye to that disconnect. “There is already a sense that the Internet community has become so absurdly self-involved that they don’t think there’s any world outside of theirs.”
Talking abut disconnect, perhaps the Internet community is catching up with the financial community.
Can you imagine the backlash if the homeless were hired as sign holders for banksanywhere?
Tony Hsieh has a dream to fix the world’s cities one by one, starting with Las Vegas, and he believes it can be accomplished via culture, just as it is at Zappos.
Two Q&A responses in the interview caught my eye, because they get to the crux of great culture.
Q. What is Zappos’ greatest threat?
HSIEH. Probably ourselves. The fundamental premise behind Zappos is culture. The belief is that if we get the culture right then most of the other stuff like doing great service, building a long-term, enduring brand or business will just be a natural byproduct of that. Most companies, as they get bigger, the culture goes downhill. Not only do we want to prevent that, but we actually want it to scale and get stronger and stronger which, generally, I think has never been done before. That is a challenge. The only way we have been able to think of to achieve that is if every employee views living in and inspiring the culture as part of their job description.
Great cultures are envisioned in the broadest strokes from the top—Hsieh wanted a happy place to work—with the visionary enabling people at all levels to contribute to and protect the resulting culture.
Q. If you are not there to do that, will there be someone there to do that?
HSIEH. It kind of goes back to it is everyone’s job to protect our values and to grow the culture. I guess we don’t really have an explicit succession plan. But I can also tell you that the only compensation I’m getting from Amazon is $36,000 a year with no chance of bonuses or stock options or anything. So, in theory, I could walk away at any moment but I haven’t. In a weird way, that only gives me more leverage over Amazon, because they know the only thing keeping me at Zappos is my happiness, and what makes me happy is us being run independently and maintaining our culture.
The bolding is mine and every boss at every level should commit it to memory.
The concept of leaving if not happy is applicable to every person who works no matter the size of their paycheck.
Not everyone can walk on the spur of the moment, but if they aren’t happy eventually they will walk.
Entrepreneurs face difficulties that are hard for most people to imagine, let alone understand. You can find anonymous help and connections that do understand at 7 cups of tea.
Crises never end.
$10 really does make a difference and you’ll never miss it,
Last December a post entitled Top Ten Reasons Why Large Companies Fail To Keep Their Best appeared in Talent Forbes and about a month later another contributor boiled the 10 reasons down to one (with 2 parts),
If you are in touch with any media, traditional, new or social, you are probably aware that Greg Smith resigned last Wednesday from Goldman Sachs; resigned very publicly in the form of 
Why is it that so many managers ignore the connection between happy employees and happy customers?
Ask anybody with a blog and they will tell you that while Akismet does a great job of catching spam, making sure that real comments weren’t also caught is a nuisance; especially if you let it go too long. Most spam comments are stupid, meaningless or boring, but lately one spambot has been leaving quotes, so I copied the last batch to share with you today; Plato’s and Asimov’s were pure serendipity from other places.
Analysis by VC Anthony Tjan, founder of Cue Ball, found that 
The Twitterverse and blogsphere are raging pro and con over the 
Tony Hsieh has a dream to 
