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

“Culture eats strategy for breakfast/lunch/dinner” has become the byword among the startup community and for good reason.

Culture is what attracts talent; it’s why they stay and when it changes it’s why they leave.

Of course, that refers to good culture.

Many founders buy into prevailing myths, such as programmers live to program and allow 80+ hour weeks to become the norm.

The founder who got trounced on Quora is a good example of problematic values.

1. He calls himself a CEO, but “manages a startup” with one employee.
2. His employee is a new dad and always leaves between 6-7pm, but he also indicates that the work is getting done.
3. He says “it’s hard for a startup that the commitment lasts for work hours only,” but gives no indication that there is founder or any kind of equity on the table.
4. He disregarded the negative feedback and defended his concerns, basically saying ‘you’re all wrong and the problem isn’t me’.

He ignored the research that shows productivity takes a nosedive after 40 hours.

 …employees simply become much less efficient: due to stress, fatigue, and other factors, their maximum efficiency during any given work day may become substantially less than what it was during normal working hours.

I’ve know thousands of programmers over the years and not one has ever claimed that the code written after 12+ hours was particularly usable and code done during all-nighters often wasn’t even salvageable.

Much worse, and predictive of serious problems to come, was his refusal to entertain the idea that he was wrong.  

I especially appreciated the response from Drew Austin, Co-Founder of Augmate, who took time to explain how he had been there/almost done that and thanked his lead engineer for helping him change.

**Special thanks to our lead engineer Alex. If it wasn’t for his patience and ability to communicate, I would have been the one writing this question, instead of responding to it.*

I hope you take time to read the whole thread; it’s a crash course in how to build a great culture.

Because great cultures pay off in real money.

Image credit: HikingArtist

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

If 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

Good mood; weird mood; bad mood; silly mood.

We all have moods and those moods affect everything we do.

Moods are affected by all kinds of stuff, such as the weather.

Good weather = good mood; bad weather = bad mood.

In turn, our actions reflect our mood, rather than reflecting the real world; take online restaurant reviews

“The best reviews are written on sunny days between 70 and 100 degrees,” researcher Saeideh Bakhshi concluded. “A nice day can lead to a nice review. A rainy day can mean a miserable one.”

Likewise, the culture created by each boss actively effects moods, thus having a profound effect on workers creativity, productivity and a slew of other attitudes.

Bad cultures create negative moods.

Negative moods can lead to a procrastination doom loop, in which an individual perpetually delays important tasks while waiting for an angel of inspiration to visit.

When you’re the boss, no matter what you say or how you squirm, the culture that exists in your own organization is a direct result of you.

Flickr image credit: kuhnmi

Washing dishes for Jeff was grueling, greasy work. But then again, making a pizza, or driving a truck, or baking a cake, or any of countless other jobs are not always enjoyable in themselves, either. Out of all the lessons I learned from that guy in the Pizza Hut tie, maybe the biggest is that any job can be the best job if you have the right boss. — Danial Adkison

People work for people, not companies.

People quit people, not companies.

They accept positions because of the culture and leave when it changes.

Bosses interpret company culture; they improve or pervert it; they add/subtract/polish/tarnish it.

What bosses don’t do is pass it on intact and untouched.

Flickr image credit: Susanne Nilsson

When I’m writing for a client I lose track of time; I don’t even notice when someone walks into my office.

It’s called being “in the zone” and it happens when you are seriously interested and deeply engaged with what you are doing.

Mihaly Csikszentmihalyi, a psychologist at the Claremont Graduate University, has been studying this latter phenomenon for decades. He calls it flow: the experience we have when we’re “in the zone.” During a flow state, people are fully absorbed and highly focused; they lose themselves in the activity.

It’s a proven fact that self-control is mentally fatiguing, but new research shows that high interest results in lower mental fatigue.

Bosses who use contests and gamification to drive interest are missing a good understanding of today’s workforce—and it’s not about age or even self-interest.

People get interested because a project is meaningful and they can see how their work contributes to the larger picture.

Even on minor projects they can see how what they did helped achieve the outcome.

No busy work; no incomplete information and no doing [whatever] for the sake of doing it.

In short, if you want to generate interest in a task it must be meaningful and provide an opportunity for the worker to add value.

Flickr image credit: Beverley Goodwin

Bosses are enamored with culture and rightly so.

However, for culture to work its wonders it must sink deeply into the organization in the same way that stain is absorbed by wood.

Cultural stain is the direct result of walking the talk and making sure that everybody else walks it, too.

It’s intentional action and it requires paying attention.

It must be applied carefully or every imperfection and flaw in the organization will be on display.  

Stain is never the output of an underling; when ideas do bubble up from other parts of the organization they won’t take root without the support of the boss, whether publicly or not.

The problem is that many bosses find it faster to treat culture like paint.

Cultural paint is easier to apply and, like real paint, it can hide everything from minor blemishes to dry rot.

It’s paid lip-service, with effects that are grounded in convenience and often included only to make the employees feel good.

What paint-loving bosses forget is that the more coats of paint are applied the more likely is it to peel.

People aren’t stupid and will vote their displeasure with their feet.

Flickr image credit: maurice.heuts

Did you know there is a luxury condo called Riverside South in New York City that has separate doors for those who pay market rate and those who rent the planning-mandated affordable units?

Not only separate doors, but a separate affordable wing—heaven forbid the wealthy should have to share an elevator with “them.”

Some bosses run their organizations the same way.

The “stars” are lavished with money, stock, perks, visibility and praise, while the rest are ignored or worse, treated as disposable.

There’s an old saying that 90% of the work is done by 10% of the people, but that doesn’t hold true for any company.

If you don’t believe me create a fantasy company with just 10% of your staff and see how far you get.

If you choose to split your company into “stars” and “the rest” then you probably should consider separate entrances like Riverside South, because you will be creating separate accommodations even if they share a desk.

Dividing a company into “stars” and “the rest” was a prescription for failure.

People aren’t stupid; they know when they’re being treated like second class and will usually vote with their feet.

Flickr image credit: Adam Conlon

Do you like your boss?

Or do you love your boss?

Obviously, the global staff at online luxury fashion retailer Net-APorter loves theirs.

The company was founded in 2000 and MARK Sebba joined in 2003—not the best of times for the dot com world.

During Sebba’s 11 years as CEO Net-APorter grew to €550m sales last year, 2,500 people and a valuation around €2.5bn

When he stepped down from that role the end of July his people found an amazing way to show their feelings.

The comments at YouTube are pretty cynical; saying that he must have known about the tribute, etc., but that’s not really the point.

Watch the faces of the staff and you’ll see emotion that can’t be faked.

Whether he knew or not, his staff’s feelings are very real.

YouTube credit: Diagonal View

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

When you talk abut cultural guideposts to engineers they often hold their collective noses and chant “fuzzy, fuzzy.”

Given that they prefer algorithms to concepts, providing direction from a source they respect may be acceptable in lieu of hard data.

Enter Carl Sagan, whose credentials are as solid as they come, and his The Rules of the Game.

To be useful, culture needs to embody a company’s values, in order provide guidance to ethical and moral questions, as well as human interactions.

Not only do Sagan’s Rules address all three, but the short essay in which he explains them is written with the same care ad skill he lavished on his books and work.

TABLE OF PROPOSED RULES TO LIVE BY

The Golden Rule Do unto others as you would have them do unto you.
The Silver Rule Do not do unto others what you would not have them do unto you.
The Brazen Rule Do unto others as they do unto you.
The Iron Rule Do unto others as you like, before they do it unto you.
The Tit-for-Tat Rule Cooperate with others first, then do unto them as they do unto you.

Introduce the rules by sharing the essay with your people.

If you run into resistance, overcome it by pointing out that Robert Axelrod, whose undergraduate degree is mathematics, evaluated the Rules positively in the light of the prisoner’s dilemma (game theory).

Typically, the Tit-for-Tat Rule garners the highest rating, because it makes so much sense.

And the Silver Rule provides terrific guidance to both new and experienced managers.

Thank you (again) Carl Sagan.

Image credit: HikingArtist

I’m starting to appreciate the ethos of Whisper co-founder/CEO Michael Heyward a lot more these days.

What changed my attitude were his comments at the Fortune Brainstorm conference regarding threats, whether violent or suicidal, child abuse/porn and hurtful responses.

“You can’t use the service to hurt other people” (…) The company searches for words and terms that indicate threats, crimes or suicide. And it has human moderators that will pull down abusive, inappropriate material and take further action if it seems necessary. (…) “You’re talking about actual people’s lives. We take that very seriously.”

Unlike Mark Zukerberg at Facebook.

Perhaps Heyward can also find a way to help the women who post about the sexual harassment they endure in order to keep a roof over their heads and food on the table.

Whisper started with lots of celebrity rumors and still receives thousands of frivolous secrets, but if it stays true to Heyward’s ethics and vision it could play a real role in making the world a little better place to live.

And that is a nice legacy to put on a tombstone.

Join me tomorrow for a look at my personal ethos and what I’d put on my tombstone.

Flickr image credit: Jeffrey