Good culture empowers employees, juices creativity, sparks innovation and powers productivity, while bad culture kills them.

Not just lowers or slows them, but kills them dead.

Bad culture kills by instilling fear, stoking mistrust, destroying teams and building silos.

Bad culture always kills the messenger.

The seeds of bad culture are found in your MAP (mindset, attitude, philosophy™) and produce a toxic culture when they grow.

But weeds can be pulled and seeds kept from sprouting.

It’s your choice—it’s always your choice.

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The following is from an email sent to me as a political statement about Congress and, while applicable, it’s also a cautionary tale about many attitudes embedded in corporate culture and every other human organization.

It addresses the infamous “we’ve always done it that way” reasoning explaining how it takes root and perpetuates itself.

Start with a cage containing five monkeys. Inside the cage, hang a banana on a string and place a set of stairs under it. Before long, a monkey will go to the stairs and start to climb towards the banana.

As soon as he touches the stairs, spray all the other monkeys with cold water. After a while another monkey makes the attempt with same result, all the other monkeys are sprayed with cold water. Pretty soon when another monkey tries to climb the stairs, the other monkeys will try to prevent it.

Now, put the cold water away. Remove one monkey from the cage and replace it with a new one. The new monkey sees the banana and wants to climb the stairs.

To his shock, all of the other monkeys attack him. After another attempt and attack, he knows that if he tries to climb the stairs he will be assaulted.

Next, remove another of the original five monkeys and replace it with a new one.

The newcomer goes to the stairs and is attacked. The previous newcomer takes part in the punishment with enthusiasm.

Likewise, replace a third original monkey with a new one, then a fourth, then the fifth. Every time the newest monkey takes to the stairs he is attacked.

Most of the monkeys that are beating him up have no idea why they were not permitted to climb the stairs or why they are participating in the beating of the newest monkey. After replacing all of the original monkeys, none of the remaining monkeys have ever been sprayed with cold water. Nevertheless, no monkey ever again approaches the stairs to try for the banana.

Why not?

Because as far as they know, that is the way it has always been done around here.

So the next time you say or hear “we’ve always done it that way” remember the monkeys and take a hard look at whether what was done in the past deserves to be done in the future.

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The economy is improving a bit, enough that companies are doing some hiring. And, just as in the past, the same idiotic attitude is surfacing.

It starts with a reference to the need for employee engagement and that ‘experts’ say that the companies with the best long-term success rates retain and grow their human resource base from within the company to ensure it.

But when a company fulfills its human resource needs by hiring from the outside, in most cases, it’s picking up the “rejects” from other companies.

And that part sends me ballistic.

Of all the totally wrong-headed attitudes I’ve heard on the subject of hiring, there is only one that is comparable and, in fact, they go hand in hand.

During every recession I’ve seen the theme is that the only employees worth hiring are the ones who are still working.

Even now, in a recession that dwarfs the previous ones and companies have cut 50% or even more of their workforce and are still cutting, those who are laid off are tagged as “dead wood” or “difficult.”

My blood still boils when I remember the excellent people who were completely trashed by that attitude.

I do agree that growing people from within is good company policy; however, there are dozens of reasons why a company not only would, but should, hire at levels other than entry.

• No company can go through significant growth and not hire from the outside—it’s a given part of that growth. For example, most startups and high-growth companies have neither the diversification, nor the depth, of talent needed when growth kicks in, so they hire at all levels.
• Hiring strictly at entry level and promoting only from within can create a hidebound culture steeped in a not-invented-here mentality, not only for products, but for processes—as happened at both IBM and HP.

There are dozens of other reasons (think about your own experience), but the reject and the dead wood attitudes are not among them.

The dead wood/difficult premise is BS, flawed, short-sighted and plain stupid.

The common belief that “stars” are independent of their circumstances just doesn’t stand up to analysis.

Most people work to the quality of their managers and the validity of the company’s culture—if they don’t shine it’s because they aren’t engaged; give people good managers and good culture and they can all be stars.

It is beyond stupid to lay work quality issues at the door of employees with no consideration of management or culture.

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Cali Ressler and Jody Thompson started changing the work world in 2003.

That’s when they conceived and somewhat covertly initiated ROWE at Best Buy.

ROWE stands for “results only work environment” and it means just that. No set hours, no clock watching, get the job done and be evaluated based on the results and resulted in a 35% jump in productivity

These days Ressler and Thompson run CulutreRx, teaching ROWE to a variety of companies, such as GAP.

ROWE is a business strategy that’s been proven to profoundly improve workforce productivity (as much as 41%) and reduce voluntary turnover rates (as much as 90%). And, ROWE is a magnet for the talent you want to attract.

Best Buy’s culture is one that encourages creativity and good ideas at all levels, so it’s no surprise that another stand out came along a year later.

Julie Gilbert conceived and started the WOLF initiative in 2004 (she was given full ownership rights including the intellectual property and the right to take it outside anytime in exchange for building it first at Best Buy).

WOLF’s focus is to promote and enhance the role of women both inside the company and outside in their role as customers based on three precepts:

Commitment – to the business, customers and other members of the pack

Networking -  amongst at all levels internally and externally to nurture and support one another

Giveback – giving back to women and girls in local communities.

Sound all warm and fuzzy to you? Are you fighting back a snicker and thinking that there is no way your company would ever mess with that?

If so, try shrugging off Best Buy’s results.

Revenue

• $4.4 billion increase in revenue from female customers (11% increase in total company revenue)

Market Share

• Highest ever female market share in company history
• Females became the majority of the most “valuable “customers

Brand Reputation

• Largest increase in brand perception in company history

Network

• Passionate, global, viral customer networks growing market share and innovating new business offerings
• Over 40,000 members in 40 plus countries

Performance Outcomes

• 5% reduction in female turnover resulting in a minimum of $25 million in savings
• 18% increase in the number of female employees.
• 100% increase in females in the most profitable business unit
• 40% increase in female General Managers & General Managers In Training
• 60%  increase in female Operations Managers
• 30%  increase in female Customer Experience Managers

ROWE and WOLF both came from the same company while Brad Anderson was CEO.

His response to the question “Where do you find new business ideas?” says it all.

I believe that some of our best ideas have come from the people who are furthest removed from the CEO’s office – those line-level employees who interact with our customers each and every day.

Without a culture that encouraged and supported innovation from all levels ROWE and WOLF couldn’t have happened.

The MAP that enables that culture can function at any level no matter the company’s overall culture. Yes, it’s more difficult, but you can create an environment in which your people’s creativity blooms.

Your choice.

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Great Place To Work just released their Best Places to Work rankings for large, medium and small companies in countries around the world. So out of the thousands of companies how are the best places to work chosen?

Our approach is based on the major findings of 20 years of research - that trust between managers and employees is the primary defining characteristic of the very best workplaces.

At the heart of our definition of a great place to work - a place where employees “trust the people they work for, have pride in what they do, and enjoy the people they work with” – is the idea that a great workplace is measured by the quality of the three, interconnected relationships that exist there:

• The relationship between employees and management.
• The relationship between employees and their jobs/company.
• The relationship between employees and other employees.

In other words, it all comes down to trust and culture.

The funny thing about trust and culture is that the managers at all levels who strive to build trust and work create great, fun, inclusive cultures are reading this and nodding their heads, while those that don’t are clicking off to another site, because all the proof in the world won’t change their minds.

Proof is found in places such as the Ethics Resource Center’s the January 6^th article Top Executives – Overpaid or Underappreciated? A whopping 91% have no problem with executive compensation when there is a strong, fair culture in place. (Hat tip to Lauren Bloom for pointing me to this site.)

Imagine the level of idiocy required to blind people to studies such as this.

The North American winners in each category may surprise you—they certainly surprised me.

• NetApp is the #1 large company;
• Ultimate Software is the #1 medium company; and
• Badger Mining Corporation is the #1 small company.

Ever wonder which companies are at the other end of the spectrum? The companies where the culture ranges from suspect to toxic and executive compensation outrages both employees and the rest of us?

I found the answer to that at 24/7 Wall St’s The 15 Most Hated Companies In America.

Can you guess which company has the dubious distinction of the #1 position?

Think; what company violated trust in every way possible and is know for it’s culture of ego, hubris, and obscene bonuses?

Right. The most hated company in America is AIG.

The upside of all these studies is that those trying to do it right have examples to emulate and kudos for their accomplishments.

The downside is that the others wouldn’t notice if you hit them on the head—AIG certainly hasn’t.

Image credit: Ethics Resource Center

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Have you noticed the efforts to diminish the compensation or banking honchos and Wall Street hotshots?

Or at least make it look that way.

Our friends at Goldman Sachs are in the forefront, which should give you lots of confidence that the effort is for real.

The bonuses are in restricted stock that has to be held at least five years, so if the stock value went down 20% the banker would receive only $8 million instead of the $10 expected—poor baby, a lousy $8 million dollars, that’s terrible! Of course, the stock goes up 20% they’ll pick up an extra two mil.

Goldman benefits because the shares don’t count as compensation until they vest, which means they don’t show as an expense and that will boost profits.

Another piece of sleight-of-hand is counting consultants and temporary workers as employees; this raises headcount and significantly lowers pay per employee making politicos and the media happy.

Does it make you happy?

Do they really think we are that stupid?

Are we?

Leadership Turn ends December 29. I hope you’ll stop over today to read Leadership Needed—By 2015. To be sure you continue to get your daily fix of Miki you should subscribe via RSS or EMAIL.

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When the economy slows, it’s easy to ignore retention factors because management kids itself into believing that replacing people is no big deal.

But slow as it’s happening, the times they are a’chnging.

At least here and there, in companies that really understand the importance of attracting and retaining scarce talent.

“To reduce “female brain drain,” global companies such as Ernst & Young, Goldman Sachs, Booz Allen Hamilton, Hewlett-Packard, Best Buy and dozens of others are increasingly offering a variety of flexible work options.”

Don’t get me wrong. These companies aren’t doing it out of the goodness of their corporate heart or caring social consciousness, they’re doing it because it makes financial sense, AKA, vested self-interest.

“Business analysts and executives say talent retention and the forces of demography are the chief reasons large, traditional companies accommodate the needs of female employees. Fifty-eight percent of college graduates are women, and nearly half of all professional and graduate degrees are earned by women…the number of women with graduate and professional degrees will grow by 16 percent over the next decade compared with an increase of only 1.3 percent among men.”

And the need is going to get worse.

“Whether you can hear it or not, a time bomb is ticking in C-suites worldwide. Its shock waves will resonate for decades. The explosive: indisputable demographics. Surveys…indicate that the number of managers in the right age bracket for leadership roles will drop by 30% in just six years. Factor in even modest growth rates, and the average corporation will be left with half the critical talent it needs by 2015.”

It’s not just large firms, SMB companies are active in the effort, although they often skip the language and the programs are more informal—which is why they’re often described as “being like a family.”

Although the work-life trend started with women, the guys want it, too, and Millennials assume it as a right.

The economy will turn around—it always does; more Boomers will retire; demographics will prevail; talent will be scarcer and the companies that already know how to offer balance will have an enormous recruiting edge.

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If today has any unifying theme it’s a focus on management being smart, instead of the opposite.

Let’s start with my favorite customer service example, and one I’ve written about often, Zappos. CEO Tony Hsieh has a fierce focus on his customers that he fosters with a culture of fun for his people.

What he doesn’t do is use customer relationship software in place of the human touch, but a lot of CEOs think you can accomplish the same thing with a bunch of bits.

Michigan’s Dan Mulhern focuses on the importance of good corporate culture, especially in a downturn. He says that now is not the time to ignore culture even with the extra-challenging circumstances that Michigan faces.

Can a large corporation learn from its mistakes? Many don’t, but BMW did. It botched it’s acquisition of Land Rover by trying to impose it’s own culture on a totally different product, but avoided making the same mistake with the Mini Cooper.

Finally, can the people who built mint.com find happiness inside the large corporation that acquired them? They seem to think so.

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Raising kids is about teaching values, among other things, but kids learn by watching more than by listening. “Do as I say, not as I do” just doesn’t fly these days.

Cheating is not only a good example, it’s a global one.

Everyone knows that cheating is wrong, yet in US surveys 64% of high school students say they have cheated, while 84% of undergraduate business students and a whopping 56% of MBA students also admit to cheating. Not only is cheating prevalent, parental action often condones it.

Since many of these same parents are leaders in the workplace, the results of a McKinsey survey asking “which capabilities of organizations as a whole are most important for managing companies through the crisis” should come as no surprise.

Ability to shape employee interactions and foster a shared understanding of values.

Only 8% thought that important, which placed ‘shared values’ dead last on the list of nine.

What was first on the list? The item considered the most important?

Ability to ensure that leaders shape and inspire the actions of others to drive better performance.

Number two isn’t much of an improvement.

Capacity to articulate where the company is heading and how to get there, and to align people appropriately.

All the research I’ve seen claims that the best way to avoid ethical lapses is to have sustainable ethics embedded deep in the company’s culture.

And the comments of Rick Wartzman, director of the Drucker Institute at Claremont Graduate University, really resonate.

Perhaps the oddest aspect of the McKinsey findings is the suggestion that providing leadership is somehow separate from promoting values. In fact, the two are bound together—the double helix of any corporation’s DNA.

One would think that means the company’s leaders understand the value of values and would proactively work to foster and embed them.

But no, these leaders, likely the same one whose kids admit to cheating, believe that visions trump values.

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Philip Mydlach wrote a great article saying that to create a better environment, where creativity and success can flourish, the management team should be like a fudgsicle—consistent all the way through.

Your management team’s behavior sets the tone for the entire corporation. So it better be consistent, predictable and true to your core values.

Absolutely true, as is the need for clearly communicating those values and not tolerating managers who don’t support them.

But achieving your fudgsicle is easier if you include a preliminary step that Mydlach doesn’t mention.

That step is using your culture as a filter in all your hiring—especially when hiring management and most importantly the executive team.

10 years ago I wrote and article for MSDN about how to use company culture as a screening tool to avoid hiring turkeys of any kind at all levels.

With the sighting of “economic green shoots” this seems a good time to revisit it (with some updating).

Don’t Hire Turkeys!
Use Your Culture as an Attraction, Screening and Retention Tool
to Turkey-Proof Your Company.

Companies don’t create people—people create companies.

All companies have a culture composed of its core values and beliefs, essentially its corporate MAP (mindset, attitude, philosophy™), and it’s why people join the company and why they leave.

Generally, people don’t like bureaucracy, politics, backstabbing, etc., but when business stress goes up, or business heats up, cultural focus is often overwhelmed by other priorities.

In startups, it’s easier to hire people who are culturally compatible, because the founders first hire all their friends, and then their friend’s friends.

After that, when new positions have to be filled the only people available are strangers.

So how do you hire strangers and not lose your culture?

Since your culture is a product of your people, hire only people with matching or synergistic attitudes. The trick is to have a turkey sieve that will automatically screen out most of the misfits and turn on the candidates with the right values and attitudes.

Here is how you do it.

• Your sieve is an accurate description of your real culture.
• It must be hard copy (write it out), fully publicized (everyone needs to know and talk about it), and, most important of all, it must be real.
• Email it to every candidate before their interview and be sure that everyone talks about the culture during the interview and sells the company’s commitment to it.
• Everybody interviewing needs to listen carefully to what the candidate is saying and not saying; don’t expect a candidate to openly admit to behaviors that don’t fit the company MAP, since she may be unaware of them, may assume that your culture is more talk than walk or consider it something that won’t apply to her.
• Red flags must be followed up, not ignored because of skills or charm.
• Consider the various environments in which she’s worked; find out if she agreed with how things were done, and, more importantly, how she would have done them if she had been in control.
• Whether or not the candidate is a manager, you want to learn about her management MAP, approaches to managing and work function methods.
• Probing people to understand what their responses, conscious as well as intuitive, are to a variety of situations reveals how they will act, react, and contribute to your company’s culture and its success.

Finally, it is up to the hiring manager to shield the candidate from external decision pressures, e.g., friends already employed by the company, headhunters, etc.

Above all, it is necessary to give all candidates a face-saving way to withdraw their candidacy and say no to the opportunity. If they don’t have a graceful way of exiting the interview process they may pursue, receive, and accept an offer, even though they know deep down it is not a good decision.

A bad match can do major damage to the company, people’s morale, and even the candidate, so a “no” is actually a good thing.

Remember, the goal is to keep your company culture consistent and flexible as you grow. From the time you start this process, you need to consciously identify what you have, decide what you want it to be, publicize it, and use it as a sieve to be sure that everyone who joins, fits.

Use your cultural sieve uniformly at all levels all the time. If someone sneaks through, which is bound to happen occasionally, admit the error quickly and give her the opportunity to change, but if she persists then she has to go.

Do this and watch retention, creativity, productivity and morale surge ever higher.

Stop doing it at your own risk.

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