Back around 1998, I was at a VC/entrepreneur event and in the course of a conversation I commented that I’d been working with startups for 20 years. A young idiot (as opposed to an old idiot) scornfully informed me that I couldn’t have been since startups were a result of the Internet and the web.

I guess idiocy still flourishes since I was recently informed by a thirty-something idiot that startups and innovation are the province of techdom.

But innovation is actually the provenance of minds that think outside of conventional parameters, with or without tech. They are minds that see beyond what’s being done now to what could be done, sometimes with a new product, but just as often with a new process.

Brothers John and Brendan Ready are two such minds. Their lobster fishing profession may be hundreds of years old, but that hasn’t stopped them from innovating not the catching, but the sales process.

They created Catch a Piece of Maine where you can buy all the output of a trap for $2,995 per season. That money buys you at least 40 lobsters a season, plus each shipment also includes clams, mussels, a Maine-made dessert, bibs, cooking instructions and a gift card, plus free shipping sent wherever and whenever you want.

Lobstermen who work with the Readys benefit by getting free traps and a premium of 40 cents per pound for the lobsters caught in them…So far, the Readys have sold the rights to about 30 traps. Their customers include financial institutions, CEOs of small companies and a few individuals. About a third are from Maine with the rest scattered about, as far away as California.

The Ready brothers have been lobstering since they were 16, started their seafood business three years ago (at ages 22 and 25) and now thought up this great value-add.

To my mind it’s the best of an all-around win, the Ready’s grow their business, the lobstermen earn more in a very hard profession, and the buyers have something totally unique to share among friends, clients and business associates.

What’s not to like?

One of the toughest things that anybody attempts is to articulate deep felt beliefs in a way that is comprehensible to the outside world.This is especially true when creating a cultural mission statement that can act as a guide for your people when you’re not around.

You want a simple, one-page description of your culture and values, not just for your employees, although each of them needs a copy, but also for every candidate so that they can understand the company before they join.

I could go on and on about how to do it, but I’d prefer to give you a real life example from a client.

KG Charles-Harris is your typical entrepreneurial over-achiever—a father with two young children, CEO of Emanio Inc, a startup in the world of EDI, founder of M3, a non-profit whose focus is to create habits of success in young, black boys—who isn’t part of today’s world of greed and ego and has thought deeply about the kind of company he wants to build.

EMANIO Culture & Values

EMANIO’s philosophy is one of CARE. The basic principle is that any organization – our own, customers or partners – are comprised of individuals. Care for the individual is central to our success. We value collaboration and an open flow of information, cherish good ideas, and strive for quality. Built from a strong focus on individual productivity, our people are self-starters that take great pride in their work and understand how their personal efforts contribute directly to the success of the company as a whole. For a small company, we are tremendously international with people interacting on a daily basis with persons of different cultural, racial and philosophical backgrounds. Acceptance, tolerance and understanding are qualities that are necessary to excel in this environment.

We believe that:

• We exist in a competitive environment. Only through competing better than others in our market will we create a stable, growing company with a good work environment.
• We exist to profitably create the best products for our customers. The best product is the one that best addresses their perceived needs, enables them to accomplish their goals and for which they are willing to pay.
• We function best as an organization when our goals are clearly defined and all activities and results are measured against these.
• Our employees invest in EMANIO achieving its objectives and we expect our managers to nurture this attitude. Managers are accessible and provide all the information needed for their employees to understand the company, industry and how to perform their work as efficiently and effectively as possible. We foster and work with our employees to help them grow and achieve both personal and career goals.
• EMANIO has no time or tolerance for “the blame game” or for “killing the messenger.” We recognize that mistakes may happen, but that the real damage is that of covering them up, since this prevents learning and corrective measures. When our people make mistakes it means they are trying and it is management’s responsibility to help them analyze what went wrong and ensure that it is corrected. This is true at every level of the company.
• EMANIO has no time or tolerance for politics. We believe that control is the primary source of political power in an organization and that there are only two things worth controlling—information and money. Our money is constructively controlled by budgets. But information is the lifeblood of our organization. Therefore, anyone trying to curb or control the flow of information will be viewed as being obstructively political and in violation of EMANIO’s culture.

One caveat—this can’t be faked. Your people are smart, they’ll know if you, yourself, live by the values you talk about or not. If not, you can count on two things—high turnover and a reputation for hypocrisy.

Yesterday I said that the thing that truly defines a company’s culture is the MAP (mindset, attitude, philosophy)^™ of the CEO.

That’s true even when cultural change comes from the bottom up as it does at Best Buy where “So secret was the operation that Chief Executive Brad Anderson only learned the details two years after it began transforming his company. Such bottom-up, stealth innovation is exactly the kind of thing Anderson encourages. The Best Buy chief aims to keep innovating even when something is ostensibly working. “ROWE was an idea born and nurtured by a handful of passionate employees,” he says. “It wasn’t created as the result of some edict,” but it’s Anderson’s MAP that enabled that culture to emerge and flourish.

Good CEO MAP isn’t about “me” even in an industry where ego is king. According to Disney CEO Bob Iger, “The story shouldn’t be about me. It’s about the team.” And while Iger isn’t without the vision thing, no one would call him a big strategic thinker. But by surrounding himself with smart people, including Jobs and the Pixar crew, and letting them get on with it, Iger has recreated a can-do culture at Disney…”Bob lets [the person] who can handle the job get it done,” says [Steve] Jobs, who sits on the board and is Disney’s single largest shareholder. “It’s not [about grabbing] headlines. That’s rare in that town.”

CEO MAP that believes in “Sharing the wealth, listening to even the lowest-ranking workers, and rewarding risk…management structure is flat, flexible, entrepreneurial — and fast,” isn’t just a function of startups and it can be found even where it runs counter to the national culture. BMW’s “Norbert Reithofer, who took over in September. (His predecessor, Helmut Panke, stepped down upon reaching the mandatory retirement age of 60.) Says Reithofer: “We push change through the organization to ensure its strength. There are always better solutions.”

Much of BMW’s success stems from an entrepreneurial culture that’s rare in corporate Germany, where management is usually top-down and the gulf between workers and managers is vast. BMW’s 106,000 employees have become a nimble network of true believers with few hierarchical barriers to hinder innovation…Individuals from all strata of the corporation work elbow to elbow, creating informal networks where they can hatch even the most unorthodox ideas for making better Bimmers or boosting profits.

Robert L. Nardelli has a very different kind of MAP as displayed during his tumultuous time at Home Depot where he, “alienated customers just as thoroughly as he did employees…replaced many thousands of full-time store workers with legions of part-timers…98% of Home Depot’s top 170 executives are new to their positions; 56% of the changes involved bringing new managers in from outside the company.”

MAP comes in many flavors and with literally millions of variations within each one.

MAP builds layer upon layer throughout life.

MAP is not carved in stone and can be changed—it may not be easy, but it is possible.

Best of all, it’s your choice, in your control.

According to serial entrepreneur and VC Neil Senturia, “Building a team is the key to creating a successful start up—picking the people who will fit into the culture. The CEO’s most important job is hiring well and being the visionary and model for the culture that you want in your company. There are great players but what wins Super Bowls are great teams.’ In the post he tells of turning down a badly needed skill set because the person didn’t fit the culture. And it wasn’t a unilateral decision, he discussed it with his team and they all agreed.

Companies talk constantly about building teams, the importance of teams, blah, blah, blah, while their managers continue to hire skill sets without nearly enough thought as to whether the owners fit the culture or not passing on candidates when they obviously don’t fit.

Managers, especially entrepreneurs, need to understand that although it’s tough to lose a needed skill set, it’s far worse to lose your culture. It takes guts to make the correct decision for the long-term in a world that runs on short-term. It’s never an easy choice, but it is one that pays off for years.

Ten years ago I wrote Don’t Hire Turkeys! Use Your Culture as an Attraction, Screening, and Retention Tool and Turkey-Proof Your Company and it’s just as true today as it was then.

Your culture is the sieve through which all people should pass—without contortions or rationalizations—preferably aligned, but at the least synergistic.

The keynotes of a culture are:

• Consciously developed – Cultures happen with or without thought. Those that just happen are the easiest to twist and manipulate.
• Flexible – Just as trees bend in strong winds and buildings are designed to sway in an earthquake, so you want to build your culture to withstand economic storms and the winds of change.
• Scalable – To grow as the company grows requires a deep understanding of what’s cultural bedrock and what are accessories.
• Sustainable – Although originally stemming from the CEO, at some point the culture must become the property of the employees if they’re going to support it.

None of this predicts what the culture will actually be, that’s a function of the CEO’s MAP (mindset, attitude, philosophy)™, not of all the articles on what makes a great culture.

More on that tomorrow.

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