The geeks and nerds, along with other in-demand knowledge workers, are inheriting, if not the earth, at least viable workplaces.

A two-part article in the LA Times (part 1, part 2) provides chapter and verse on how companies are treating those in various functions that are considered replaceable.

All in the name of short-term, Wall Street-demanded profits.

Contrary to the popular image, tech companies aren’t any better.

An article citing Amazon’s vaunted customer focus advises companies to follow the leader in focusing on the long-term.

But Amazon’s treatment of it’s fulfillment and other lower-level employees shows no leadership and its thinking is just as short-term as everyone else’s.

At some point business leadership will come to understand that business is like a three-legged stool—customers, investors and employees.

When one or two legs are wildly out-of-whack with the third the stool falls over.

Maybe not immediately, but Rome didn’t fall in a day, either.

Three points to consider:

• The economy may not turn around in the near-term, but it will eventually.
• Workplace demographics don’t favor companies who, skipping the euphemisms, treat their people like crap.
• Memory improves significantly when the impact is personal.

I look forward to watching these same companies struggle.

Flickr image credit: Laurel Fan

Speaking of taxes…

“I can’t predict the next scandal, but I know that fraud is a growth industry, and so is greed.” 

So said Max W. Berger, a plaintiff’s lawyer who just won a $2.43 billion settlement from Bank of America.

The fraud, however, pales in comparison to the legal greed and games played by the platinum-plated corporate elite, such as Chevron, Apple and GE.

I don’t know what your tax rate is, but if you earn more than $36K it’s higher than most corporations are paying.

According to a recent analysis of nearly 300 Fortune 500 companies by the Citizens for Tax Justice, the average company was paying just 18.3 percent in taxes.

And the number that pay nothing is even more startling.

280 profitable Fortune 500 companies collectively paid an effective federal income tax rate of 18.5 percent, about half of the statutory 35 percent corporate tax rate, while receiving $223 billion in tax subsidies. These corporations include most of the Fortune 500 companies that were consistently profitable from 2008 through 2010. Collectively they paid $250.8 billion in federal income taxes on a total of $1,352.8 billion in U.S. profits. If they had paid the statutory 35 percent tax on their profits, they would have paid an extra $223 billion.

Stashing cash overseas is a legal ploy that as a shareholder you might be inclined to applaud, but is this form of tax avoidance really better for shareholders and the company, let alone the economy?

Business is vocal about the dangers of the deficit—as long as dealing with it doesn’t impinge on them.

But you have to admit, $223 billion a year would go a long way to paying it off.

Flickr image credit: Jagz Mario

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

These days any talk about luck is considered heresy.

But there is such a thing.

Malcolm Gladwell understands the role luck plays and explains it in Outliers: The Story of Success.

A woman I know said, “You can be the best parent in the world, but raising great kids still requires a good dose of luck.”

Nolan Bushnell once said, “Don’t mistake good luck for good management.”

It’s luck when you bump into an investor having coffee with both the time and the inclination to listen; it’s hard work and being prepared that doesn’t waste the opportunity.

When managing people, process or circumstances, you can’t count on luck, but you also can’t ignore it.

And you shouldn’t try to take credit for it.

Image credit: HikingArtist

I am republishing this post, because it speaks to the recent questions of several entrepreneurs.

The problem is that entrepreneurs often read something like this and discard it as applying to larger companies or those further along in life or revenues.

They are wrong.

Sure, the information might not fit like a glove, but it can be tweaked; and the underlying philosophy fits any enterprise, large, small or micro.

Accounting Tools a Part of Corporate Culture

Gavin Cassar, a Wharton accounting professor, tested the prevailing wisdom of whether accounting techniques, such as budgeting, sales projections and financial reporting, would, in fact, help prevent business failures. In surprising results, he found that some accounting tools may actually lead them astray.

But he found the culprit not to be the tools, but rather the MAP (mindset, attitude, philosophy™) of those using them.

I sent the article to a long-time CEO who was s serial entrepreneur (now retired) and thought you would find his comments interesting and useful. I’ve changed names to keep the examples he mentions anonymous, but note that Corp A was part of a Fortune 500 company and Corp B was public with sales of several hundred million and a CEO who had been around the block numerous times.

There’s only one important accounting problem described in this article.

The other problems discussed are really problems in human psychology, such as being guided by hopes instead of realistic considerations and ignoring (widening) gaps between plans and results.

But the serious accounting problem described is the failure to collect and publish accurate and timely accounting information.

If you have a carefully worked out budget, unless the monthly accounting figures are available quickly and are correct, the budget is useless as a planning tool because it’s impossible to really judge whether the company is on plan or not.

To some extent, both Corp A and Corp B suffered from this.

Accounting was not held to high enough standards. Expenses were misclassified and weren’t posted in the months in which they were actually incurred.

Managers initially tried to sit down with accounting and straighten out the discrepancies. But it was impossible, either because of poor accounting tools or probably just gross incompetence.

After a time, managers stopped trying to correct the internal financial reports. They thought it was just wasting their time.

They also stopped trying to control their expenses. Why bother? The financial reports were so inaccurate they didn’t show up even large and willful expenses outside budget limits.

This, of course, led to increasing attempts by higher management to exert personal control over expenses.

At one point, the Corp B CEO was signing all expense reports. You had to receive his personal permission to go on a trip or to even take a client to lunch.

The budget meant nothing. And there was a line of managers outside his office asking permission to buy essential test equipment or fly an applicant in for an interview.

Stuff that should have been decided instantly by the managers concerned was delayed, frustrated and often cancelled altogether.

The Corp B example is very close to what is going on with one of the entrepreneurs mentioned at the beginning.

He is micromanaging every dime spent in his fast-growing startup.

So far, his impulse to exert control has cost his company two excellent recruits and two of his senior staff are in revolt.

He needs to let go, trust his people and give them the authority to do their job.

If he doesn’t there probably won’t be a company for him to micromanage.

Think about it.

Flickr image credit: Paul Downey

What is the most important thing to remember when hiring?

The one thing that can keep you from hurting your team?

The one thing you should never forget?

You may interview for skills, but you hire whole people.

Flickr image credit: Syefri Zulkefli

These days most CEOs acknowledge the importance of culture.

Most incoming CEOs either want to protect and extend that current culture (think Apple) or radically change one that isn’t working (think Yahoo).

There is also a percentage that want to revamp the culture in their own image even whether the current culture is working (think Home Depot) or not (think Penney’s, which I wrote about last month, and that just fired their ex Apple CEO yesterday).

Red Hat CEO Jim Whitehurst was in the first group when he joined in 2007, but it was a real stretch (more like an unexpected bucket of ice).

He came from Delta Airlines command and control culture to a cultural meritocracy based on an open source mindset.

He calls it a “meritocracy” meaning leaders arise based on their brains, not their spot on an org chart.

“The chaotic nature, the fact that people can call me up whenever and often call me an idiot to my face. We yell and we debate and we have these things out. Our culture matches the culture around open source, so the people who want to be involved in open source feel at home.”

The proof that it works is in the pudding of revenues and retention.

Red Hat, the first and only open-source software maker to crack $1 billion a year in revenues, is growing like mad.

The company has about 5,700 employees now, hiring about 1,000 workers in 2012. It will hire another 600 to 800 in 2013.

Yet the attrition rate of his R&D group—the company’s biggest group of engineers—is only 1.5%, compared to an industry average of about 5%.

Those are numbers any CEO would be bragging about, no matter what industry.

While merit rules and open source attitudes are sacred, Red Hat is in no way a democracy.

Red Hat still has managers and those managers are still responsible for decisions.

“It’s about transparency not democracy, I can make wildly unpopular decisions and at times I have to do that … as long as I have gotten feedback and articulated my reasons clearly, I can do that.”

It doesn’t need to be. People don’t want to work in a company where decisions are based on majority rule; what they want is to be heard.

They want to know that their colleagues, whether bosses, peers or subordinates, will listen to them and discuss the merits of their thought/idea/complaint no matter who they are or what they do.

Even if you didn’t click any of the above links be sure to check out these 12 Red Hat Management Tips.

The more you implement them the more things will change or, as I keep telling clients, to change how they act change how you think.
Flickr image credit: Dave Lobby

Many managers I’ve known see themselves as coaches building winning teams and often base their management style on coaches they’ve known or who are known to win—not always a good thing.

Now there is yet another coach who is anything but a role model.

But more far more deplorable than Rutgers’ Mike Rice’s actions are outside lawyer John P. Lacey’s comments about the abuse and the message they send.

On Friday, the university also released a 50-page report that John P. Lacey, an outside lawyer, prepared last year in response to the abuse allegations. It made clear that Rutgers officials were aware that Mr. Rice’s outbursts “were not isolated” and that he had a fierce temper, used homophobic and misogynistic slurs, kicked his players and threw basketballs at them.

But it described Mr. Rice as “passionate, energetic and demanding” and concluded that his behavior constituted “permissible training.” It found that he aimed to “cause them to play better during the team’s basketball games.”

His methods, “while sometimes unorthodox, politically incorrect, or very aggressive, were within the bounds of proper conduct and training methods,” the report said.

Since when are adults kicking kids and throwing things at them “within the bounds of proper conduct?”

It’s bad enough that abuse happens, but far worse when the very people charged with evaluating it give it a stamp of approval.

More proof, if anybody needed it, that winning is everything and anything done to increase the odds of winning is OK.

So thought the banking managers whose actions brought down the global economy.

So believe all those, students, as well as adults, who cheat to get ahead.

Anything goes, just don’t get caught.

And if you do, blame it on your passionate desire to win.

YouTube credit: Ron Goldstein

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

Ask any recruiter or manager who has been around for awhile and they’ll tell you there is only one guarantee when it comes to talent: supply and demand are always at odds.

The danger is highest for those to whom hiring is newest and founders can be especially vulnerable.

Obviously, founders and others in a startup are excited and high on what they are creating or they wouldn’t be there.

And therein lays the danger.

In the heat of competition from other startups and the excitement of converting the candidate to their vision interviewers forget or avoid asking certain questions.

Worse, if the candidate is super-hot or possesses badly needed skills interviewers often avoid asking anything that might spoil the deal or turn the candidate off.

But it is of little use to hire even extraordinary talent if they don’t stay or bring in someone who will trash the culture and tear the team apart.

Which questions are most often ignored?

The tough questions, which are, by definition, any question to which you don’t want to hear the answer.

Simply stated, tough questions are the ones that bring a negative answer when you want a positive one and vice versa—in effect killing the deal.

Here are some sample tough questions and their potentially deal-killing answers:

• Q: Does the project turn you on?
  A: Not particularly.
• Q: Then why are you here?
  A: I heard I could make a lot of money and get a ton of stock options.
• Q: What do you find attractive about the position?
  A: The perks are awesome.
• Q: Do you like our location?
  A: Well, it’s about an hour from where I live.
• Q: How soon after accepting can you start?
  A: I’m in the middle of a project and would have to finish, and I’d like to take a couple of weeks off—say, about three or four months.

Money questions are often a minefield.

• Q: What kind of compensation package do you want?
  A: Well, I just got a raise, a promotion, and a large stock grant and currently I have six weeks of vacation, and I’d like to improve on that.
• Q: Our salary range goes to $100,000.
  A: Oh, I’m currently making 95 and have a review due in a couple of weeks.

The important thing to keep in mind about tough questions is that if the response kills the deal or raises serious red flags you are better off to know it sooner rather than later, before you spend time crafting an offer or having to contend with a hire who damages the company.

There are other important benefits from asking though questions.

Bringing potential problems out in the open gives you the opportunity to solve them, but first you have to identify them.

Finally, the discussion itself is valuable.

You learn more about a person’s priorities, ethical structure, style, and personality when discussing difficulties and solving them is the beginning of the bond that is the basis for the most productive relationships.

Image credit: HikingArtist

I was going to call this post “How to Make Money,” but then I remembered the lyrics from Peter, Paul and Mary’s hit song and decided it was a much better title.

After all, diversity of all kinds is a war and it’s one being lost in companies every day, whether they are old line industries or the supposed meritocracies of the tech world.

And not just diversity in the form of race and gender, but in terms of management.

Funny how so many companies that don’t “get” the need for a great culture that spawns a happy, therefore productive and innovative, workforce also don’t get diversity in fact.

They all get happy and diverse in theory and in talk, but unfortunately theory and talk frequently never make it to fact.

The facts, however, speak for themselves.

Analyzing the performance of Fortune’s “100 Best Companies to Work for in America” over a 28-year period, the author found that these firms generated higher yearly stock returns than comparable companies not on the list. They also systematically beat financial analysts’ earnings estimates, an indication that job satisfaction is an important variable that the market does not fully value. –strategy+ business (free registration required)

And the real numbers of the future carry their own warning.

The figures highlight the rapid growth in the Hispanic and Asian populations, both of which have surged by more than 40 percent since 2000. Hispanics were 16.7 percent of the population in July 2011 and Asians were 4.8 percent. The black population has grown 12.9 percent since 2000 and makes up 12.3 percent of the nation. Non-Hispanic whites rose only 1.5 percent from 2000 to 2011, slower than the national growth of 9.7 percent, and are now 63.4 percent of the population.

It also turns out that hiring those pesky females in senior positions and putting them on your board pays off handsomely.

Over the past six years, companies with at least some female board representation outperformed those with no women on the board in terms of share price performance, according to the latest study by the Credit Suisse Research Institute. —Credit Suisse

But the stats I really love come from Dr Genevieve Bell, a Social Scientist/Anthropologist at Intel Corporation.

So it turns out if you want to find out what the future looks like, you should be asking women. And just before you think that means you should be asking 18-year-old women, it actually turns out the majority of technology users are women in their 40s, 50s and 60s. So if you wanted to know what the future looks like, those turn out to be the heaviest users of the most successful and most popular technologies on the planet as we speak.

So for all those stuck in the command & control past or believe, as Carl’s and TV advertisers do, that the world actually turns on 18-34 years old males I suggest you update your prejudices and get with the program.

Flickr image credit: Tanja Föhr

I don’t buy into “leadership” as taught by the leadership industry, but I find those who contribute the  Leadership Development Carnival don’t sell the “you are special”/“chosen one” Koolaid.

Instead, they offer up pragmatic advice and help that fosters leadership in everyone, whether they are in a leadership role or not.

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Wally Bock from Three Star Leadership presents The Key to Engagement. “Supervisors are the key to engagement. What are you doing to select and prepare better supervisors?”

Jim Taggart from Changing Winds blog presents Big-Bang in Practice: Antifragility, Innovation and Leadership.

Sharlyn Lauby from HR Bartender presents Is Leading While Learning Really Effective. “In a “do the job then get the job” world of work, is leading while learning really effective?”

Joel Garfinkle from Career Advancement Blog presents How to stop employee turnover in the first 90 days. “We seem to have a particular problem keeping our new hires from jumping ship. Turnover in the first 90 days is the main area of concern. Here are three steps you can start taking right away to turn your situation around.”

Bernd Geropp from More Leadership presents Five Questions you should ask before holding a meeting! “Lots of managers spend 50 % of their time at work in meetings.
Many meetings are just a waste of time. They are boring, they don’t serve a purpose.
If you want an effective meeting you need to answer 5 crucial questions before you hold the meeting… “

Linda Fisher Thornton from Leading in Context Blog presentsWhich of These is Ethical Leadership? “The graphic in this post illustrates the point that leaders are interpreting “ethical leadership” at very different levels. Which one of the 3 represents ethical leadership”

Mary Jo Asmus from Mary Jo Asmus presents Embracing Feedback. “For those who want feedback but haven’t yet learned to fully appreciate it.”

Jesse Lyn Stoner from Jesse Lyn Stoner Blog presents Let’s Stop Confusing Cooperation and Teamwork with Collaboration. “Using collaboration, cooperation and teamwork interchangeably dilutes their meaning and diminishes the potential to create powerful, collaborative environments. This post defines the difference, discusses Marissa Mayer’s memo that she was recalling remote Yahoo employees back to offices in order to promote collaboration and explains what is required to create a truly collaborative environment.”

Julie Winkle Giulioni from juliewinklegiulioni.com presents Building the Bench. “Recent research suggests that just as many organizations are beginning to feel that they’re stabilizing after a long period of economic uncertainty, they may in fact find themselves facing a new and unexpected challenge: deficient management bench strength. This post spotlights an under-leveraged approach to addressing this issue… while at the same time driving business results.”

S. Chris Edmonds from Driving Results Through Culture presents WOW Your Customers, Grow Your Business. “How employees treat customers has a huge impact on your business’ buzz . . . and your business’ revenues.”

Randy Conley from Leading with Trust presents Trust is…. “Trust is…” – How would you complete that phrase? Trust means something different to each person, and in this reflective post, Randy shares thoughts on what trust is to him and he invites you to add to the list by completing the phrase, “Trust is…”

Steve Roesler from All Things Workplace presents Self-Leadership & 3 Key Variables.  “When it comes to making career and leadership changes, there are three variables that come into play. If you are wrestling with where you are right now, this may help you clarify where you need to focus your energy and your effort.”

Tim Milburn from www.timmilburn.compresents Five Ways To Turn Your Crisis Into A Comeback. “Leadership is difficult (even in your own home). This heartfelt post was written from my own personal experience of moving forward in the face of failure.”

Bill Matthies from Business WisdomWhat I Will, What I Won’t. “While the philosophic take on this is what we will resist versus what we will attempt to maintain, the business version is about spending or saving resources. In Vegas, knowing when to hold ’em, when to fold ’em. It’s not easy is it?”

Dana Theus from InPower Consulting Blog presents The 3% Leadership Revolution: A (Missed) Opportunity for Women. “There is a quiet leadership revolution going on, a shift in the definition of success from “what” to “how.” In times of major change, the underdog has a strategic opportunity to end up on top. In this revolution, the women-in-leadership underdogs have a unique opportunity to capitalize on it and use it to define our leadership careers – to play a leadership role in the revolution, so to speak – or miss our chance at squeezing out from under the dominant culture that keeps women and men (both!) from valuing what women bring to leadership table.”

Bruce Lewin from Four Groups’ Blog presents Why is Understanding People So Hard.
“The lack of well recognised tools and techniques that help us better understand people through reliable predictions undoubtedly contributes to the fact that understanding people is hard. Taking this conclusion at face value, it’s then easy to see how some managers don’t want to get involved in ‘people’ issues and instead they prefer to pass the problem to HR. Time will tell how long this situation endures but given the 50 year time frames above, it’s difficult to see this cliché being consigned to history any time soon.”

Miki Saxon from MAPping Company Success presents You are NOT Your Company. “Ego-merge has an out-sized negative effect on people and companies, yet it is rarely, if ever, recognized, let alone discussed.”

Karen Kanakanui from Lead Change Group! presents a post by Karin Hurt called Why Doesn’t My Team Feel Recognized? “You’ve served up regular recognition cocktails of programs, plaques, bonuses, and fun. You’ve spent lots of money… you’ve put in heartfelt effort. And then… the employee survey results come in. It’s not enough. They want more. What if your recognition cocktails don’t work?”

Anne Perschel from Germane Insights presents Dear Leader: Verbal Feedback Not Working? Try Action Feedback Instead.

Lolly Daskal from www.lollydaskal.com presents Leadership: Disappointed To The Core. “If you meet a leader who’s a loner, who doesn’t communicate, who’s not engaged, who seems removed and not trusting, it’s probably not because they enjoy solitude or disengagement. It’s far more likely that they have been disappointed. There will always be people and events that will let us down, and when that happens it can shake us to the core.”

Kevin Eikenberry from Blog: Leadership & Learning presents Leading in Living Color. “Too many leaders think they can leave their real selves at home, leading from a place of policy, procedure and a pursuit of perceived perfection. If you want to be a more effective leader, be real and relatable. Lead in living color.”

Anna Farmery from The Engaging Brand presents What is the definition of empowerment. “People often mistake delegation for empowerment, yet in a networked world empowerment becomes even more vital.”

Susan Mazza from Random Acts of Leadership presents The Key to Being Adaptable. “If you want to be adaptable you must be willing to let go of one particular need.”

Wendy Appel from The Enneagram Source presents I Choose Now.

Jon Mertz from Thin Difference presents Follow / Unfollow – Making Relationships Work. “In business and life, there are people we associate with and build relationships with. The key questions are: Who do we follow, and who do we unfollow?”

Karin Hurt from Let’s Grow Leaders presents Humility and Leadership: Can We Teach Leaders to Be Humble? “Is it possible to teach humility?”

David Burkus from LDRLB presents Do You Have Executive Presence? “David Burkus examines the research on “executive presence” and its role in developing leaders.”

Robyn McLeod from The Thoughtful LeadersÔ Blog presents Your strengths can hurt you, “where she shares four tips to avoid having your strengths turn into derailers.”

What does the Millennial generation seek in leadership development opportunities and do generational stereotypes get in the way? As part of her article research for the Huffington Post on “filling the leadership pipeline” Jennifer V. Miller of The People Equation interviewed what Gen Y professionals had to say in Gen Y and Leadership: Young Professionals Speak Up.

Neal Burgis, Ph.D. from Practical Solutions Blog presents Coloring Outside the Lines of Your Leadership. “Many leaders are known as unconventional, non-traditional, and even trailblazers. These individuals step over the boundary lines to be creative and implement their creative side in business, and sometimes in everything else they do. Coloring outside the lines is primarily about stepping outside your comfort zone & take a risk to be creative with your thinking skills. This is where you get to be comfortable with being uncomfortable.”

Mary Ila Ward from The Point Blog: Sound Advice for Career and Leadership Development presents Questions for Striving Servant Leaders. “This post examines if you are truly acting like a servant leader by questioning where is your car parked and where is your nursery located.”

Joan Kofodimos from Anyone Can Lead presents Why are you so swamped? “Most causes of managers’ work overload aren’t in the nature of the work – they’re from within the manager. Understanding your own patterns and what you do to keep yourself swamped is key to getting un-swamped, and key to making the transition from managing to leading.”

Tanveer Naseer from Tanveer Naseer’s blog presents “What Organizations Really Need To Succeed And Thrive”.

Anadi Upadhyaya from TalentedApps presents Getting it Right: 100KM, Team of 4 and 48 Hours. “A great story about the four C’s of Shared Goals: Criteria, Communication, Change and Collaboration.”

Bret Simmons from Positive Organizational Behavior presents How we enhance our organizational citizenship. “The evidence on what makes us more likely to be good citizens at work”.

Nick McCormick from Joe and Wanda on Management presents Listen Up Managers. Don’t Forget to Change Your Oil. “Advice on listening from Greg Blencoe’s book, The Supermanager”.

Image credit: Great Leadership