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

Jody Foster is chair of the department of psychiatry at Pennsylvania Hospital; immediately after receiving her MBA she has a very different experience assessing startup teams for VCs considering investing.

…to understand who the main players in that company were, how the team functioned together, what kinds of personalities they had, and which ones needed watching as the company, and the venture capitalists’ investment, grew.

I’ve said for years that people aren’t faucets and can’t/don’t turn their feelings and attitudes on and off depending where they are; Foster puts it differently.

“People are people, no matter what industry they are in, and they bring their basic personalities to work,” says Foster. “When they act out in inappropriate ways — by, for example, bullying employees who work under them, compulsively micro managing, displaying narcissistic tendencies — it can be devastating to the entire workplace.”

Founders need to evaluate potential new hires as objectively as Foster would.

That means ignoring their skills and looking at the whole person warts and all.

Your team can survive a person with great attitude, but weaker skills, until they strengthen and grow.

What your team won’t survive is the so-called star with superb skills who brings with them the traits Foster mentions or any that are in direct opposition to the culture you are creating.

They will destroy you.

Image credit: HikingArtist

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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

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Ugly culture is culture that is fragmented and doesn’t work together.

According to top researchers this is a function of the different mindsets between operational, executive and engineering.

Three viewpoints equal three cultures (requires free registration).

And while I’m certainly not anything like the experts mentioned in the article I don’t believe it’s a given.

I also find the so-called typical mindset of each group to be more a function of the past than the current, let alone future, mindsets, especially of entrepreneurs and those ascending to executive ranks and the top slots of many companies.

Granted, the larger the company the more likely to find those attitudes, but it’s not a given.

The experts see three silos, operational, executive and engineering, completely ignoring multiple other vertical and horizontal silos.

Of course, the article is 11 years old, so the question is ‘does it still apply’?

Does your workplace reflect these three silos or is the current reality far more nuanced?

Flickr image credit: Sam Wolff

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People, in all their varied glory are as Spock said, fascinating.

They come in many different flavors and ‘entrepreneur’ is one of my favorites.

Entrepreneurs come in many flavors, too. From the ones that set out to build the next Google, Facebook, Apple or Intel to the micropreneurs who just want to earn a decent living.

Within every business of any size at any stage there are tasks that are prime for avoidance.

Stuff like establishing culture; defining values; developing financial controls, etc.

All kinds of intangible infrastructure that can wait “until things calm down” or “when we’re bigger”

In other words, mañana—and we all know when that is.

Or, as Ryan Blair says, “If it’s important you’ll find a way. If it’s not, you’ll find an excuse.”

Flickr image credit: JD | Photography

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Recently Fast Company told the story of why the acquisition of Ben & Jerry’s worked for the giant Dutch conglomerate Unilever.

The reason boiled down to two words: Yves Couette—the man Unilever put in as CEO—and how he maintained the culture and customer focus even as he streamlined and moved the company in new directions.

Several years ago I wrote about being ‘cultureblind’ and used Home Depot and its new CEO Bob Nardelli as a prime example of what happens when the new boss trashes the culture and more or less abandons customer service.

Last week a new article focused on how Home Depot turned itself around by harking back to its pre-Nardelli culture of customer service.

Compare the difference between Couette and Nardelli and you will have a perfect template of what to do and what not to do as a new boss no matter what level you are on.

So the next time you take over a new group, whether as CEO or a newly minted team leader, remember this useful mantra along the lines of ‘you are what you eat’: ‘culture drives profit’.

Flickr image credit: Bruce Fingerhood

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Culture is today’s focus; it is considered the reason that companies succeed or fail and whether innovation will flourish or wither.

Culture is researched, dissected, written about and discussed; is culture a set of specific rules or a moving target, amorphous and difficult to pin down?

Perhaps it’s more like a computer, with core hardware and constantly changing software.

In computing, the term I/O refers to input, whatever is received by the system, and output, that which results when the input if processed.

Programmers know that if the input if bad what comes out of the computer won’t be any better, a phenomenon known as “garbage in/garbage out.”

GI/GO applies to culture and, for that matter, everything else in life.

What comes out is a function of what you put in.

Blindly accepting everything offered by even the most brilliant source will result in garbage out at some point.

Creating and sustaining good culture requires more than studying what’s worked elsewhere and best practice benchmarks; it requires critical thinking on your part.

No one person, past, present or future, has all the answers. No company has tried every possible combination of every approach conceivable.

Plus, they are not you, while your culture is you.

That means being your own computer—gathering input from all available sources, applying it to your situation, processing it—absorbing, reworking and rejecting.

The result will be at least slightly different from what you started with, because you’ve added the flavor of your own life experiences, knowledge and MAP to the mix—and that’s good, it shouldn’t be an exact copy.

Flickr image credit: John D

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Consider this a Valentine message from me.

Last summer I wrote that the solution to having employees who care about their work and company was to look in the mirror, since their caring was a direct result of your management and the culture it engendered.

A few days ago Jeff Haden wrote in Inc. magazine about eight things people want that are a function of your MAP as opposed to your budget.

1. Freedom
2. Target
3. Mission
4. Expectations
5. Input
6. Connection
7. Consistency
8. Future

The words and explanations vary slightly, but this is the same advice I and dozens of other culture mavens have been saying for years.

Culture matters; it matters more than strategy, planning and even compensation.

Culture is your responsibility.

Culture is how you show you care.

Culture is you.

Whereas it’s barely possible to effectively live a personal lie, it just isn’t possible to propagate a culture based on one.

Not in ten lifetimes could you implement a culture that deviates from your basic values, your MAP, your essence.

You can provide what people crave, because you can change at any time you choose.

That’s the key, the choice is yours; it can’t be made for you by someone else or made by you because another desires it.

You can change, but only if you want to change.

Valentine’s Day is a good day to choose to start changing.

It won’t be easy; it will take more than a day; but it will take longer if you don’t start now.

Flickr image credit: AForestFrolic

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As an article on in Forbes points out, your culture is the only part of a company that can’t be duplicated and is, therefore, your biggest and most sustainable asset—if you take the time and invest the energy to make it more than great-sounding words.

While the article doesn’t break new ground it did offer up a great image bite that may resonate with you.

All music is made from the same 12 notes. All culture is made from the same five components: behaviors, relationships, attitudes, values and environment. It’s the way those notes or components are put together that makes things sing.

It points out that the reason that culture can’t be duplicated is context, meaning that two people arranging the same components will have a different result.

That’s because context = MAP (mindset, attitude, philosophy™) and there is not such thing as two people with the same MAP.

Even identical twins won’t have identical MAP because MAP is the result of perception, not just experience.

The problem is building a culture that sings, whether concerto, R&B, pop or rap, takes effort, entrepreneurs are always in a time crunch and culture gets pushed to the back burner.

When that happens just remember that when reality requires you to pivot, when success requires you to staff up quickly, when the bugs surface or your competition is killing you the strength to overcome will be found in your culture—or not.

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In a series of studies, Francesca Gino and Dan Ariely found that inherently creative people tend to cheat more than noncreative people. Furthermore, they showed that inducing creative behavior tends to induce unethical behavior. HBS Working Knowledge

Not good news when your goal is to increase creativity in your people, but not really surprising.

When we think actively, we see more possibilities, and that includes ways to gain an advantage – a survival mechanism. When we think passively, we don’t see the possibilities, so we follow the rules. –Deb Pekin, Change Manager, Kraft Foods Inc (from a comment)

Creativity isn’t a faucet that can be turned off when it’s inconvenient—it’s part of a person’s MAP; it’s who they are, so they will apply it across the board.

“Dan and I are of the hope that managers will start thinking about how to structure the creative process in such a way that they can keep ethics in check, triggering the good behavior without triggering the bad behavior.”

That’s one approach.

Perhaps a better one is to build a strong ethical culture first and overlay it with a culture that encourages creativity and innovation.

One of the most important things is to make sure that unethical behavior is not tolerated, let alone rewarded; in fact, in some cases it should be terminated.

Of course, that means ethics would trump expediency; not the most common scenario in modern business.

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

A founder recently told me he didn’t have time for culture because he was too busy building an awesome company.

As I said in a post this spring, Culture is the font, the basis, the cause and the reason. It is the Tao.

I said that in response to Culture Trumps Strategy Everytime by Nilofer Merchant, author of The New How (use link above).

Culture doesn’t happen, it stems from your MAP (mindset, attitude, philosophy™) and is propagated through the company as you hire.

At first it’s easy to share your culture because startup founders hire their friends and friends of fiends, which usually means that everyone shares similar values.

But if you don’t think your culture through and then embed it deeply in your company’s soul it won’t stick—to work culture must act like stain not paint.

Perks don’t equal culture; perks are easy, culture takes work,

Your work unless you are comfortable building your company based on someone else’s cultural vision or their interpretation of yours.

Culture is your present and your future; your edge to achieve success and its lack is the first step to failure.

Do you have time for culture?

Option Sanity™ is culture
Come visit Option Sanity for an easy-to-understand, simple-to-implement stock process.  It’s so easy a CEO can do it.

Warning.

Do not attempt to use Option Sanity™ without a strong commitment to business planning, financial controls, honesty, ethics, and “doing the right thing.” Use only as directed.
Users of Option Sanity may experience sudden increases in team cohesion and worker satisfaction. In cases where team productivity, retention and company success is greater than typical, expect media interest and invitations as keynote speaker.

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