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Ryan’s Journal: When Culture Betrays

Thursday, March 16th, 2017


Most of my writing is based on what is going on in my life right now. I have found it’s easier to write about what I know and tap into the emotion of it all. One thing I learned recently is culture can be a double-edged sword and should be respected as such.

If any of you are reading more than Entertainment Weekly I am sure you have seen the meltdowns that are occurring at Uber, the falling stock prices at Valeant Pharmaceuticals and maybe the second bankruptcy of Radio Shack.  All of these are a result of a culture that betrayed the very members it was meant to protect.

How do we watch out for that in our personal lives?

One way I do it is by seeking constant feedback. I have found I have a significant blind spot when it comes to measuring myself, so I suck up my pride and go to those I know will give me a real answer. Perhaps these companies could have done the same?

When looking at these three cases I have found one commonality, pride. Let’s examine each and see what you think.

Uber is pretty public at this point. The CEO had a history of being bold, in your face and decisive. This has its place but can also become unbalanced. Additionally, somewhere from the top down the idea that women should not be treated equal came out and as a result you have cases of sexual misconduct and favoritism playing out.

Valeant was a darling of Wall Street for many years. Its former CEO was incentivized to get his stock to a certain price point. If he did that he was rewarded with stock options that were incredible. Harvard did a study on it and thought the scheme was amazing. What people didn’t know though was the CEO was utilizing accounting methods that favored the stock price. He also utilized a private pharmacy that was undisclosed to the public to deliver his prescriptions. This had an added benefit to the stock. Both methods were found to be unethical, the stock crashed and shareholders lost billions.

Radio Shack recently filed for a second bankruptcy. They have been unable to turn around their stores to get to a profitable point. I am not too old to remember going into these stores as a child and enjoying them. They offered some great products, were knowledgeable and if you were a radio geek you could find just the part you needed. Unfortunately they didn’t expect a rise in cell phones, online ordering and other buying trends. These have all contributed to its losses. They are still around but I wonder for how much longer.

I bring all of these up as examples where the culture of each led to misses and failures.

Culture in my mind is the mentality of a company — its thought processes.

On an individual basis are you allowing your culture to betray you?

Image credit: Rory Finneren

Bill O’Reilly On Loyalty

Wednesday, January 11th, 2017


There is much talk about Megyn Kelly’s announced move from Fox News to NBC last week, but that’s not what this post is about.

It’s about Bill O’Reilly’s twisted thoughts on what constitutes loyalty.

“I’m not interested in making my network look bad.”

Later that day, he continued the thought in a commentary on his own show in which he appeared to question Ms. Kelly’s loyalty to Fox by saying, without naming her: “If somebody is paying you a wage, you owe that person or company allegiance. If you don’t like what’s happening in the workplace, go to human resources or leave.”

Agreeing with O’Reily means that if your boss hits, grabs, gropes, insults, harasses, etc., your only recourse is to tell a person/department that too often has little-to-no power, and sometimes no interest, in fixing the problem or get out of Dodge — even if it means breaking your contract.

Read anything about professional loyalty and you’ll find that it is the company’s responsibility to give people a reason to be loyal.

Reasons include a workplace that don’t tolerate any type of harassment no matter who it is from — up to and including the CEO.

Additional reasons include fairness and respect, although there are many others.

We do owe loyalty (and protection) to ourselves, but I don’t believe anyone owes loyalty to a a person or company where they have to constantly look out, whether for a knife in the back or death by a thousand cuts.

Flickr image credit: DonkeyHotey

Ducks in a Row: Are Your Employees Owners or Renters?

Tuesday, November 8th, 2016


“Ownership” is the difference between having employees who care and those who are just along for the ride.

Jim Haskett, Harvard business School professor emeritus, hosts lively conversations around current research he and his colleagues have done. The comment period is roughly two weeks and the ideas/comments are as interesting as Haskett’s original post.

Are Employees Becoming Job ‘Renters’ Instead of ‘Owners’? is the most recent and is critical to any manager looking to foster an engaged workforce.

In our work, we found that an “owner”—either a loyal employee or customer who takes responsibility for improving relationships, products, and processes as well as referring new employee candidates or customers—can be worth more than a hundred “renters—”those who are only involved with the organization to complete one or more transactions.

Think about it; why would Uber drivers care about the company — to use Haskett’s terms, they rent the job.

It isn’t just the so-called on-demand jobs that hire renters. There are plenty of them in full-time positions and, surprisingly, even in companies such as Google and Facebook.

In a recent Golden Oldie we considered the truism that “you get what you give” when it comes to respect and that’s true about most things.

Another old saying is also very true — people don’t quit companies, they quit managers.

In companies with “real” jobs, it’s the managers who determine whether employees are owners or renters.

Be sure to click over, read the comments and add your own.

Image credit: chispita_666

The Humorous Side of Layoffs

Wednesday, October 19th, 2016

https://www.flickr.com/photos/searchengineland/2263318234/Michael Smith, CEO of TeraTech and a past client of mine, sent a link to a Medium post about recognizing the signs that a layoff is coming.

Here are three examples.

  • Fresh CEO blood.
  • Loss of eye contact.
  • Earlier rounds of layoffs.

I  would add

  • Lots of smoke and dancing by management, instead of answers.

Obviously, layoffs aren’t funny.

However, management’s belief that no one will notice the signs is funny.


Because you can’t brag about hiring smart people and then assume they will miss the telltale signs around them that something is wrong.

Image credit: search-engine-land

Entrepreneurs: HireAthena — On Demand, But Not 1099

Thursday, April 28th, 2016


Do you use or are you familiar with HireAthena? It provides professional services, such as HR, benefits, payroll, FSA and 401k management, accounting, bookkeeping, monthly financials, and taxes, using a subscription model priced according to size and needs, dominantly for startups, non-profits and other small biz.

However, unlike most on-demand providers HireAthena is not using 1099 contract professionals.

In a unique twist in the on-demand labor market, HireAthena offers its professional workforce the best of both worlds: they receive a competitive salary, 401(k), and medical/dental/vision insurance, but they can also work from home. (…) “We’re committed to the idea that employees are loyal if we’re loyal to employees, even if you’re part-time,” said Kristen Koh Goldstein, founder and CEO of HireAthena.

What’s more, HireAthena is specifically targeting professional stay-at-home moms and dads, which gives them a significantly under-utilized source of candidates.

And in case you think that HireAthena’s model only applies to higher-end professional, you have a short memory.

Last year on-demand cleaning service Managed by Q did the same with their staff.

Managed by Q hires its “operators,” as it calls them, as employees, offering full-time and part-time employment with benefits and stock options. The work is flexible, and Managed by Q works with operators’ schedules.

While HireAthena is a spinoff of Backops and Scalus, which have raised $12 million, it hasn’t taken any funding directly and expects to be profitable later this year.

“Our mission wouldn’t be taken seriously unless we were profitable. This is not a charitable organization. We’re employing moms and dads in order to provide a very affordable service to small businesses.”

No funding. Profitable. Employees, with benefits.

How old fashioned.

Image credit: HireAthena

Ducks in a Row: Good Wages are Profitable

Tuesday, August 11th, 2015

https://www.flickr.com/photos/warriorwoman531/9975179525/Henry Ford figured it out in 1914 when he doubled his workers’ daily wage. He did so on the assumption that they would spend the additional money on stuff beyond subsistence needs and he was right — they bought Fords.

Companies today still haven’t learned that lesson and continue to treat workers as disposable, fighting the idea of a living wage and crying that the cost will destroy them.

A column in the Ney York Times led me to this video describing research that proves their thesis wrong.

Flickr credit: Heather Paul
Video credit: Aspen Ideas Festival

If the Shoe Fits: Banking Culture

Friday, November 14th, 2014

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

5726760809_bf0bf0f558_mIf you work, no matter the industry, company size or the level, you’ve been hearing a lot about the importance of culture, especially over the last 10 years or so, most recently from investors.

Bosses know that ignoring culture puts them at peril, but the lesson is just sinking in for many founders.

Culture is a lot more than foosball tables, fancy food and kegs on Friday.

Culture is the values and ethics of the founders made understandable to all.

Sustainable culture is like a tripod, with customers, investors, and employees comprising each leg.

Founders often tend to focus on two of the legs — investors and customers — leaving the third leg to get along more or less on its own.

The problem is that when you over-favor one leg it will get too long; ignore another leg and it will shrink, but the end result is the same—the tripod tips over.

Simply put, concentrating excessively on one leg or another won’t assure success.

Worse, the third leg, employees, is often the shortest, scrawniest, and weakest leg of the tripod.

However, hip perks and a great ‘cool’ factor doesn’t always convert to loyalty and loyalty is bankable.

Founders who doubt loyalty’s bankability should read Frederick Reichheld, who’s written numerous books on the economic effects of loyalty, and shown in carefully researched studies that a 5% improvement in retention translates to a 25%-100% gain in earnings. (Loyalty Rules).

Loyalty happens because people like and trust what the company says it believes in and which is embodied in its culture.

In other words, good culture pays!

Image credit: HikingArtist

Ducks in a Row: Why Invest in People?

Tuesday, April 29th, 2014

invest-in-peopleThere are two attitudes when it comes to investing in people.

The common one considers it a cost that should be minimized.

The more astute believe it provides significant ROI.

Providing benefits can raise productivity and reduce turnover no matter the size or type of business.

Training is just as important (in England it can even stave off a corporate manslaughter charge).

It’s a well-documented fact that attitude/cultural fit are the most crucial factors when hiring, so where’s the sense in dumping people who are not only good cultural fits, but also possess institutional knowledge?

The graphic elegantly sums up the fear of the cost minimizers and the pragmatism of the astute.

One boss lesson that really needs to sink in is the true cost of replacing people.

  • A decade ago replacing cost 2-6 times the annual salary and although the dollar amount has risen I’m sure the multipliers haven’t gone down—they’ve probably gone up, too.
  • Losing the wrong person at the wrong time has the potential of crippling or even destroying the company.

As to ROI, look no further than Frederick Reichheld, founder of Bain & Company’s Loyalty Practice and author of Loyalty Rules!, and other loyalty books, whose carefully researched studies that a 5% improvement in employee retention translates to a 25%-100% gain in earnings.

That is one hell of a return for creating a culture that does the right thing by investing in its people.

Flickr image credit: Peter Baeklund


Ducks in a Row: What to Hire

Tuesday, August 13th, 2013

http://www.flickr.com/photos/simon_cocks/4308515919/Here are the three main things to consider when hiring in order of their importance.

They aren’t rocket science, but they work.

  1. Attitude—convincing someone to change it is like convincing the horse to drink the water.
  2. Skills—can be learned; look for the frequency of job moves that required new skills.
  3. Degrees—are like new cars that lose value the minute you take them off the lot.

Make sure the culture and management style they expect, based on discussions when interviewing, is what they get.

And practice daily the three main actions that will keep them loyal.

  1. Appreciate them.
  2. Provide ways for them to make a difference and notice when they do.
  3. Provide feedback and challenges to help them grow.

Again, not rocket science.

Flickr image credit: Simon Cocks

Smartphones and Customer Engagement

Monday, December 10th, 2012

Customer loyalty is a top priority no matter what you are selling—especially in retail.

Just ask Tony Hsieh, whose focus on Zappos’ workforce created the platinum standard of customer service that yielded a storied (and envied) level of customer engagement and loyalty.

The most important component by far is customer engagement. “Retailers should ask themselves, ‘how do I create a partnership with the consumer?’ instead of pulling one over on them,” says Harvard Business School senior lecturer José Alvarez. Many customers see loyalty programs as a way of being ambushed by the retailer.

Many retailers see smartphones as a successful way of engaging customers—but are they?

I have to wonder if they are taking into account the real numbers.

50.4% of the US population uses smartphones

  • Asian Americans 67.3%
  • Hispanics 57.3%
  • African Americans 54.4%
  • Whites 44.7%

Now take a look how the money breaks down.

48.5% of all smartphone handsets are Android, while Apple is at 32%, yet I constantly see product and service offers that require an iPhone.

Stop & Shop recently rolled out Scan It! Mobile, an app that turns a customer’s iPhone into a mobile scanner and checkout.

Gender-wise, smartphone use is nearly identical, 50.9% women 50.1% men, but age is a different story, with two out of three 25-34 year-olds having smartphones.

Marketers consistently target the younger demographic, but do they really have the money or are “Millennials the most screwed generation?”

The median net worth of households headed by someone 65 or older is $170,494, 42 percent higher than in 1984, while the median net worth for younger-age households is $3,662, down 68 percent from a quarter century ago, according to an analysis by the Pew Research Center.

I’m a long way from being any kind of expert, but it seems to me that basing a loyalty/customer engagement model on smartphones, let alone iPhones, doesn’t make much sense when viewed through the lens of actual usage and related income stats.

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