Whenever culture is discussed it often is in terms of perks.

Google’s free meals, concierge services, etc.; when Apple was new and hot interviewees were told about the in-complex swimming pool and Friday beer blasts.

SAS, which is number one on Fortune’s Best Places to Work list for the second straight year, offers on-site healthcare, $400/month childcare, a beauty salon, 66,000-square-foot gym and more.

All are lauded for their cultures, but is it the perks or is something else going on?

“People stay at SAS in large part because they are happy, but to dig a little deeper, I would argue that people don’t leave SAS because they feel regarded — seen, attended to and cared for. I have stayed for that reason, and love what I do for that reason.” SAS manager

Sure, the perks are important, but they aren’t the basis of great culture.

Employees don’t leave companies, they leave managers… More than anything else, you want to create an environment where people are respected—and treated like they’ll make a difference…Jim Goodnight, founder and CEO.

Make a difference; that’s the key phrase and the key action.

That’s how talented managers in companies with mediocre perks or none at all build and motivate great teams. It’s also the reason why people who are stars at one company may not perform as well at another.

Popular wisdom agrees that people leave managers, not companies, and they leave them in spite of perks, benefits, stock and seniority.

Fabulous perks get lots of press and may attract candidates, but they can’t motivate or retain people if they feel used and unvalued.

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Back in the late Seventies/early Eighties women who chose to stay home, as opposed to working, were, demeaned, called “traitors to the cause” and looked down on for their choice.

Which was stupid.

Today, people who don’t start their own companies or choose to work for established corporations are similarly treated.

Which is just as stupid.

Not everybody should be an entrepreneur; not everybody should work in a startup; and those choices do not reflect negatively on the quality of a person’s skills or attitude.

Choosing to work for an established company or large corporation does not lower people’s intrinsic value; nor does it mean they are dumb, lazy, unmotivated or uncreative.

Some see large company experience as a training ground, while for others there is pride in being part of something large and ongoing and they enjoy the camaraderie.

Some are looking for stability, although that is mostly gone, and some don’t really care as long as they can pay their bills—their job (paycheck) is not their career; that energy is focused on a passion that just doesn’t pay.

Even some entrepreneur’s think traditional jobs can be a better fit.

Just as thousands of intelligent, educated, driven, passionate, creative women chose to stay home and raise their kids, thousands of intelligent, educated, driven, passionate creative people choose to work for large companies.

As I said Tuesday, it’s about fit and “fit” isn’t a reason to judge.

We are all different; you need to find what floats your boat and do it—not do what others say should float it.

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Think about all the information that comes your way, especially if you are an executive.

It’s usually shared at peer level and (maybe) one or two levels down.

But full sharing of that information should be embedded deeply in your company’s culture.

In fact, when information, particularly competitive and market intelligence, is widely disseminated throughout the organization it juices innovation and boosts productivity.

Why?

Because increasing the number of people with access to the information increases the odds for breakthrough thinking and reduces the risk of wheel-spinning.

• An article on a competitor’s product can spark an engineer’s original design idea;
• gossip about changing industry dynamics can prevent a stumble in marketing;
• an investment report on a new service offering can suggest an innovative sales approach to a desirable customer.

Highly visible industry developments circulate swiftly and prompt immediate strategy meetings and fast responses, but the rest of the information often languishes; instead, it needs to be easily accessible by everyone.

Think about it, everybody in your company picks up valuable industry intelligence along with potentially valuable gossip.

• CEOs receive strategy reports by investment firms, management consulting companies, along with high level information and gossip from the Board.
• Managers receive reports from hired industry experts and publications.
• Marcom and others interact with the media.
• Salespeople gain information from customers.
• Engineers and others observe competitive equipment at trade shows.
• Admin and other support people hear and overhear stuff, often because they are ignored by those at higher levels.

People talk—at tradeshows, networking events, industry conferences and seminars, as well as at social events, bars, restaurants, etc. Most people spend at least part of that time talking about business-related topics.

Unfortunately, some managers derive their power through information control.

Smart managers make sure that the information is shared, up, down, and horizontally, by using internal blogs, intranets, wikis, etc. Further, they actively work to encourage everybody to read and discuss it.

Since the goal is to encourage everybody to share everything, no matter the source, all posts should include attribution; a public thank you to the person who took the time to share it.

Whether formal (reports, white papers, news) or informal (conversations, hearsay, gossip) the content needs to be accurately assessed and valued.

There is no way to predict what bit of knowledge will spark the creative process, so be sure that your people have full access everything available in an easily searchable format.

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I’ve written several times referencing Malcolm Gladwell’s Outliers and it’s come up in numerous conversations I’ve had.

Each time I hear that Gladwell’s premise is flawed and that if a person is determined enough they will succeed blah, blah, blah.

They claim this holds true whatever the location, including gang-ridden inner cities or third world countries; work hard enough and you will overcome.

My typical response to their rhetoric is “bullshit.”

A few days ago TechCrunch published The Chilling Story of Genius in a Land of Chronic Unemployment; a comparison between Ibrahim Boakye and Max Levchin.

It is elegant proof of what Gladwell says, as well as a warning call to the stupidity of wasting our world’s human resources.

On a much smaller scale managers waste their human resources every day through “positional deafness,” i.e., only soliciting and/or hearing thoughts, ideas and suggestions from those at X level or higher.

I’ve never understood why managers expect workers who were consistently ignored and shut down to suddenly start contributing because they receive a promotion.

• Nobody suddenly develops a brain as a result of being promoted.

• If they were good enough to promote then they should have been good enough to listen to in their previous positions.

• If they can’t contribute in the position for which they were hired, why hire them at all?

• Even new grads hired for their potential need to be heard; they are like eggs and like eggs they must be cared for if they are to hatch.

Managers afflicted by positional deafness often experience high turnover and lament the lack of loyalty, especially in “more junior workers.”

But the term ‘junior’ is very subjective; for some managers it refers to those with just a couple of years of experience, for others it’s a level within the company and for still others it’s relative, with the baseline how long it took them to finally be heard.

It’s easy to know if you suffer from positional deafness, just consider the sources of your input over the last quarter and what you did with it.

Better yet, ask the people you trust to tell you the truth, not just what you want to hear.

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jessie reiss of the gorgon lab

I want to share something I read last week. It was written by a young software engineer who works in a startup in San Francisco.

The post resonated with me because Jesse said exactly what I’ve been saying for years and that meant a lot; not because he agreed with me, but because he is an aMillennial who recognizes the importance of culture and how to create and retain it.

You’ve heard it before, not just from me, but from coaches, academics, even investors. Now hear it from someone who typifies the kind of employee every boss wants to hire.

on startup culture

The startup culture has become a thing of legend. Decades ago, startups began filling their offices with scooters, zip-lines, and ping-pong tables. Today, perks like free massages, catered lunches and “beer fridges” are common place, even expected. 1pm – 4am has become an acceptable workday. Men wearing kilts or employees with crazy piercings or neon colored hair are frequently seen in the halls of technology companies of all sizes. Even larger companies like Google, Netflix, Apple, and Zappos are renowned for their unique “startup culture”.

I’ve now worked for three different startups in as many years. I have also interviewed, have friends who work at, or met with leaders of many other startups. As such, I’ve gotten a pretty good sense for a variety of very different startup cultures. My company, Spot, with only five employees, is a tiny team. As we discuss scaling, however, I’ve started to spend a lot of time thinking about the kinds of things that differentiate a startup’s culture, how to cultivate the good and how to avoid the bad.

A startup’s culture is, to me, as important as anything a startup strives to create. Startups must be nimble and innovative in order to be successful. They have no hope of outspending or outlasting an established company and so they must outpace and outthink their larger competitors. In essence, the startups primary advantage is their culture, an environment where creative, passionate, hard working employees can thrive.

In the earliest stages, this is relatively easy. The first employees are friends of the founder or hand picked candidates. In the beginning, the founder can make it a priority to focus on culture. As the team scales, however, and the demands on the founder increase, he or she becomes further removed from the process of building and maintaining culture. At this point, the startup must be like a crystal, so imbued with the culture that as it grows it maintains the same core structures and values. The culture must become, as our advisor James Currier once explained to me, “part of the company’s DNA”.

So, what culture should a startup strive to create? What structure best establishes the culture “into the DNA”?

I believe there are four high level ideals a startup should strive for. Some of what follows might be obvious, other parts unfounded. These are my beliefs based on my anecdotal experiences, so pull out your salt.

1. A Rigorous Hiring Process

Your team is your culture, and for most startups, your team is your product, so this is by far the most important point. I firmly believe that a good employee is worth at least 15 decent employees and an infinite number of bad employees. Don’t throw bodies at a problem, get your best and brightest to work on it. Consider a three month trial period for new employees. It might be scary for some applicants, but committing to a job is a lot like a marriage: shouldn’t you try living together first? Develop a rigorous interview process and cultivate interviewing skills in your employees. When hiring, look for potential and eagerness over experience. Invest in getting your team together outside the office. Bonding experiences are invaluable. Try to build a team of people who genuinely like each other. It’s not easy, but when it works, it’s an amazing thing to be a part of.

2. Transparency

In my experience, transparency is empowering, while opacity is frustrating, confusing, and frightening. Share your information. Share your problems and you might be surprised where the best solutions come from. Share your successes to improve morale, but share your failures to make sure you learn from them. Don’t be afraid to share bad news. When you’re in charge of sharing information, you control the tone it’s shared in. If you try to bottle it up, it will leak without the proper context. Employees are apt to return the favor, sharing information up the chain if they feel it’s reciprocated. Information leaking outside the company is a serious threat, but if you can’t trust your employees, you have a bigger problem.

3. Employee Ownership

It is standard practice in startups to share equity with your employees, but there is more to ownership than just stock options. There is pride in ownership, a drive to show off, to accomplish something real. The closer your employees are to their work, the more of themselves they can see in it and the harder they will work to accomplish their goals. Listen to your employees ideas, if they’re good, put them in charge of implementing them. If they’re not good, try to convince them. Give employees high level goals and let them determine the details, they’ll be more apt to put all their heart and soul into working on their own solution. Don’t be stingy with equity. You can’t do it alone and you’re already sharing the risk. Share the reward too.

4. Flexibility

One of the benefits of working for a startup is the flexibility to work when and how you want. Startup work is mentally and physically demanding and it is easy to burn out. If you force your employees to work on your terms, you risk getting substandard work from exhausted and discouraged employees. Trust your employees to get their work done on their own terms. Also, be flexible about how your employees solve their problems and what problems your employees are solving. There are always higher level goals a company needs to accomplish, but a good employee left to play may well stumble upon something amazing. Twitter and Gmail are likely the two most famous examples but it happens all the time in varying degrees.

Speaking of Twitter, I recently had the opportunity to speak with Jack Dorsey about the culture he is trying to create at Square. He described managing a startup as an editorial role (fitting since they share offices with the San Francisco Chronicle). Much like a reporter, individual contributors should be able to pitch ideas for projects, and managers, like editors, should direct their contributors with high level suggestions. I think this is a perfect model to try to emulate. Rather than worrying about the details of the business, managers should work to maintain a consistent tone and vision in their product. Contributors should be given the flexibility to set their goals and should be given access to all the tools available to successfully accomplish their goals. In the end, it is the contributors who are on the ground, who experience the battle day to day, and who write the stories that define your product.

Building and maintaining a culture is an ongoing process. A startup is an evolving, ever changing entity and your culture will be too. Don’t expect your culture to evolve overnight or to arise from a single change. If you consider the culture, however, as you make decisions, and if you strive to create a great team with transparency, flexibility, and ownership I think you will quickly begin to reap the rewards. It’s not easy work, but nothing in a startup is, and your culture is well worth the challenge.

Image credit: the gorgon lab

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Today is my birthday and I’m not working (I wrote this on Sunday).

From the time I was old enough to understand that my birthday was the day of MY birth, my special holiday, I refused to go to school on April 26.

No matter where I worked I’ve always taken my birthday off.

I never lied about it and even mentioned it during my interviews. I said I was happy to work weekends, Christmas, other holidays, but not on my birthday.

Surprisingly, they all agreed.

So it’s not surprising that when I started RampUp Solutions part of the culture was no one worked on their birthday; nor did they have to ‘make up’ the time off.

Over the years many executives have explained to me why giving people their birthdays off was a bad idea; here are their arguments and why they are wrong.

• Too expensive – not when viewed as a recruiting, productivity and retention tool. It was surprising how many people viewed having their birthday off as a deal-breaker when interviewing.
• Disrupts work flow – 95% of work can be scheduled to avoid a birthday and employees are the first to recognize the other 5%.
• Other employees would be jealous – these execs and mangers just didn’t get it. They saw this as a perk for “stars” or “professional staff,” as opposed to everybody, totally missing the point.

Think about it, it’s one of those little things with enormous ROI.

And while you’re thinking, please have a piece of cake and drink a birthday toast to me.

Happy Birthday to ME

(No, there are not enough candles, in case you are wondering:)

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“Joe” called me today. He said he was thinking of leaving his company not because he wanted to, but because everyone thought he should.

He explained that everyone who knew him kept showing him articles and telling him that he was a born entrepreneur and should start his own company.

Joe said he had worked for everything from large companies to startups and as long as he had a good manager and liked the culture he was happy. He worked hard and felt he was fairly compensated.

Joe said he had discussed it with his family and they said he should do what made him happy and they would support that decision.

However, he didn’t want to end up looking like a loser because he didn’t do it.

Boiled down, here is my response.

• Contrary to current media coverage people who work for companies are not losers and entrepreneurs are not the be all and end all of success.
• Few, if any, knowledge workers at any level work 8-hour days, disconnect and go home.
• In the current recession, entrepreneurs are to the 21^st Century what consultants were to the recessions of the 20^th Century.
• Having entrepreneurial MAP does not mean you want or have to be an entrepreneur.

The last point is especially important.

I saw yet another list of 10 traits entrepreneurs and I had to chuckle. Here it is

1. They Are Not Stopped by Fear
2. They Know When to Ask for Help
3. They Are Persistent
4. They Are Passionate About Their Businesses
5. They Are Willing to Market and Sell
6. They Know Their Numbers
7. They’re Disciplined
8. They Have Integrity
9. They’re Great Communicators
10. They Think Long-Term

I chuckled because these are the same traits that all good people have when adjusted for their position and experience.

They are also the traits that the best managers look for when they are hiring. There are, however, many mangers too insecure to appreciate them.

Many years ago I read an article about the guy who invented the tiles used on the Challenger spacecraft to protect it when it reentered the atmosphere. He wasn’t an entrepreneur, he was a Lockheed engineer. He didn’t get a bonus for his work, it was his job. He didn’t care; he was happy at his company, was proud of what he did and liked being part of something larger. He was a winner.

The lesson here is that great people work for existing companies and great people start companies and both win.

Joe is a winner.

The losers are those who disparage other people’s choice.

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How do you get culture-blind managers to wake up to its importance?

How do you get them to understand that just as there is no “I” in team there is no “I” in leader and that if they insist on capitalizing the “I” in leadership it will change to leadershIt?

In other words is there a way to motivate managers to change their MAP if the “I” is a function of inexperience or ignorance as opposed to entitlement and willfulness?

A useful 2×4 to accomplish this is vested self-interest (VSI) as manifested in the MyCFF mantra so popular today—my compensation, my career path, my future.

It is amazing how much a person is willing to change when those changes further their own goals—even as far as changing “I” to “i.”

Click vested self-interest for how-to details.

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In an NYT interview Michael Lebowitz, founder and C.E.O. of design firm Big Spaceship, passes on some excellent information on hiring, building a team and culture.

Here are two of the points with the greatest impact,

One of my longest-standing clients, a very smart guy, says: “There’s two ways to manage. You can hire to be the smartest person in the room or you can hire to be the dumbest person in the room.”

He says he works at being the dumbest.

And

“Don’t hire jerks, no matter how talented.”

Lebowitz says that there is no place for rock stars and I agree totally, unless you are naïve enough to believe they can function alone, without the cooperation, support and backing of the team.

Hiring rock stars means turnover—not productivity.

I’ve seen many team members leave because their manager’s focus was so completely on taking care of his few stars that he had nothing left over for the rest.

One of the finest managers I know has had a team packed with stars everywhere he’s worked. Partly because his reputation is well known and talent flocks to work for him, but mainly because he passionately believes that most people have the ability to become stars, some brighter than others, and he manages them accordingly.

True, he works harder at managing than many and has been kidded by his peers about the lengths to which he goes, but he tells me he wouldn’t have it any other way.

I once asked him how he got to be that way and he said that he’d never done anything that he didn’t want from his own manager, so it wasn’t a big deal.

I couldn’t resist asking if he was managed the way he did manage.

His response was a smile and laugh and that just because he didn’t get it didn’t mean that he didn’t want it.

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“Entrepreneur” is the new black.

The term/title is being applied to a multitude of people, from the consultant/coach making ends meet until businesses start hiring to the bleary-eyed kid in his dorm room hoping to be the next Facebook or Google; from the preteen mowing lawns to the Boomers using severance pay to follow their passions; from the person using the proceeds from the sale of one startup to launch the next to the woman using a micro loan to lift her family up from poverty.

Some are entrepreneurs by choice, some by chance; some run and leap into new opportunities with a battle cry on their lips, while others drag themselves kicking and screaming into the fray, but all are fascinating.

All face one particular challenge and the need to overcome it is great, because these days there are fewer choices, fewer options to pay the bills, fewer paths from here to there.

It’s motivation and it’s the biggest challenge faced by every working living person on the planet.

Whether you are a solopreneur, a founder/member of a startup or one in a cast of thousands you need to keep yourself and your people motivated.

While clear visions and strong passions help, motivation is in the doing—not the talking or the planning.

This is especially true for entrepreneurs, because the fewer the people the fewer the places to hide.

There’s no way around it, being an entrepreneur means full responsibility and full accountability, but it also means undiluted pride in the results.

Please join me Saturday for a look at a few of the more unusual entrepreneurs.

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