I read two articles yesterday. They both focus on how the long-term thinking of Jeff Bezos and  Marc Benioff inform their decision making and are well worth your reading.

Bezos is famous for ignoring Wall Street for Amazon’s first two decades.

When it comes to making the most important and the most long-term decisions, Bezos has a simple rule that’s quite useful: “Focus [your vision] on the things that won’t change.”

At Amazon, this means that everything is built around their value of customer obsession.

Benioff has a different approach to making decisions, but still based on the long-term vision he embedded in Salesforce’s culture from the day of founding.

I came back with a clear vision of what the future of the internet was going to be in regards to software-as-a-service and cloud computing. I also had a much deeper sense of my spiritual self. So I said, “When I start a company, I will integrate culture with service.”

When I started Salesforce, on March 8, 1999, I said we’re going to put one percent of our equity, product and time into a foundation and create a culture of service within our company. We’ll be creating new technology, the cloud; we’ll be creating a new business model, subscription services; and we’ll create a culture built on philanthropy.

Last month Warren Buffett, Jamie Dimon and a legion of executives came out publicly against Wall Street’s short-term focus.

The emphasis on quarterly earnings, and the importance of beating estimates, is warping American business and the economy, argue almost 200 CEOs who belong to the Business Roundtable, a lobbying organization. Short-term thinking leads corporations to choke back on hiring, and to starve research and development of the spending the fuels long-term growth. The pressure of quarterly earnings is one reason fewer companies are interested in going pubic, preferring the slower growth that comes with being private than the scrutiny that comes with being listed.

Wall Street’s short-term thinking never got a toe-hold at either Salesforce or Amazon, but the reasons it didn’t created significantly different cultures.

While Benioff’s obsession culminates in giving back, Bezos’ obsession comes at a substantial cost to Amazon warehouse workers, the environment and even society.

Image credit: Scott Ellis

It’s amazing to me, but looking back over nearly a decade of writing I find posts that still impress and with information that is as useful now as when it was written. Golden Oldies is a collection of what I consider some of the best posts during that time.

Compromise Means Listening (2008)

Jim Stroup at Managing Leadership wrote a fascinating post on the effects of principles and political compromise on our Constitution.

For the political slant click the link, but I think that these ideas are just as true in the business world.

“If you rule out compromising your principles, then you become an ideologue.”

Can business people be ideologues? Of course.

Managers adopt approaches and then rigidly try to implement (inflict?) them on every organization in which they work with no consideration as to their appropriateness.

Robert Nardelli did that when he tried to impose stringent metrics a la GE on Home Depot, ignoring cultural differences and the realities of running a successful consumer business.

“…maybe they see a higher, joint goal of sufficient value… This sometimes takes a kind of discipline, stamina, and focus that can be stunning, and much more productive, powerful, and enduring…”

When senior managers open themselves up to input from all levels of their organization—instead of forcing the dogmatic use a certain methodology—the results include stronger engagement, higher productivity and more innovation.

In business, this means a focus beyond today’s stock price—a focus on the long-term, which is rarely appreciated by Wall Street.

Compromise isn’t synonymous with ethical lapse, either; it’s not an excuse to lie, cheat, steal or fudge the information or the numbers.

It is about listening to others; listening to those whose ideas are revolutionary; ideas that are atypical; ideas that buck the norm and go in a new direction and that takes a lot of guts.

In business, as in politics, compromise often means being willing to put your job on the line—but refusing carries the same potential cost.

Flickr image credit: Scott Maxwell

Years ago, Neil Senturia, CEO of Black Bird Ventures posted his thoughts about CEOs, hiring and culture.

“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.’

While everyone talks about building teams, the importance of teams, etc., bosses continue to hire skill sets without enough thought or rationalizing as to whether the candidates possessing them fit the culture.

It often takes the threat of a team revolt to force them to pass on candidates with great skills who obviously don’t fit.

Culture is high enough on the radar now that most entrepreneurs know that the wrong hire can derail their culture, but they still have a problem passing on badly needed skills.

It still 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 will pay off for years to come.

I wrote Don’t Hire Turkeys! Use Your Culture as an Attraction, Screening, and Retention Tool and Turkey-Proof Your Company 15 years ago 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 with and passionate about it, but at the very 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 pivots, economic storms and the winds of change.
• Scalable – To grow as the company grows requires a deep understanding of the values that are cultural bedrock vs. trim and 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 values and MAP (mindset, attitude, philosophy)™.

The important point here is to hire with your eyes wide open, so you don’t end up with a round peg trashing your square hole.

Last month we looked at the economic dichotomy of having a consumer-based economy while simultaneously reducing wages.

Henry Ford understood that paying higher wages was good business.

Ford astonished the world in 1914 by offering a $5 per day wage ($110 today), which more than doubled the rate of most of his workers. (…) The move proved extremely profitable; instead of constant turnover of employees, the best mechanics in Detroit flocked to Ford, bringing their human capital and expertise, raising productivity, and lowering training costs.

Not to mention that a good part of that disposable income was used to buy Ford cars.

Business counters that idea by pointing to all the costs that didn’t exist in 1914 as justification for relentlessly cutting wages and benefits.

But nothing justifies the current minimum wage in many states.

Speaking of a hundred years, it took that long for new research by Zeynep Ton, a business professor at M.I.T.’s Sloan School of Management and author of “The Good Jobs Strategy,” to prove Ford was correct.

For every dollar of increased wages, one retailer that was studied by Fisher brought in $10 more in revenue. For more-understaffed stores in the study, the boost was as high as $28.

Not only doe it affect employees, but apparently higher wages has a halo effect on stock.

Costco pays its workers about $21 an hour; Walmart is just about $13. Yet Costco’s stock performance has thoroughly walloped Walmart’s for a decade.

Ton’s work is of major competitive importance whether you’re a boss in a small business or head up a giant enterprise.

Flickr image credit: ping.fm

One of the hardest things that bosses of growing companies face is the need to stop shooting from the hip.

I frequently hear from startups, small biz and entrepreneurs that growing up would ruin their culture.

They tell me it stifles creativity. It’s for larger companies. It’s bureaucratic. It’s too time consuming.

“It” refers to the underpinnings of all successful companies. “It” includes stuff like,

• Financial controls
• Annual operating plan that includes financial planning (you can’t plan to do something if you can’t pay for it)
• Organization charts and definitions of responsibilities
• Hiring process
• Long-term planning
• Centralized information technology implementation and planning

Whether it’s just you, or one, ten, fifty or more employees, whether full time, part time or virtual, you need viable processes to keep you focused—think of it as coloring inside the lines.

Everything on this list can and should be scaled for applicability, but all are necessary in some form for any business endeavor.

You don’t have to implement them all at once, but none will happen as long as you allow your MAP to reject or begrudge them.

And don’t confuse process with bureaucracy. Process is like MAP, it gets you where you want to go, whereas bureaucracy stifles whatever it touches; process, like MAP, is ever-changing and growing, while bureaucracy is carved in stone.

It boils down to the fact that bosses can’t be cowboys, so hang up your boots and spurs and do right by your company and it’s people.

Flickr image credit: http://www.flickr.com/photos/daryl_mitchell/2814824048/

Yesterday I shared quotes from Amazon.com CEO Jeff Bezos that focused on entrepreneurial topics, especially stock and its price.

Today, we’re going to look at Bezos’ vision for Amazon marketing.

Let’s start with what you thought of the last Amazon ad you saw. You’re probably scratching your head and thinking that it wasn’t very good, since you don’t remember it.

There’s nothing wrong with your memory or the ad, for that matter, because there was no ad.

That’s right, no giant ad budget, no super-size presence at tradeshows, no typical corporate marketing.

“Instead of shelling out big bucks for lavish trade shows and TV and magazine ads, Amazon pours money into technology for its Web site, distribution capability, and good deals on shipping. … “It is pretty unprecedented that their brand has ascended so quickly without a large marketing budget,” says Hayes Roth, chief marketing officer at brand consultant Landor Associates. “It’s not about splaying their logo everywhere. They are all about ease of use.”

Amazon has done well in the recession for the very reasons that Wall Street lambasted them after the dot com bubble burst.

Wall Street wanted short-term profits, while Bezos focused on the long-term.

When I was looking for yesterday’s quotes, I also found these two and they say it all.

“If you do build a great experience, customers tell each other about that. Word of mouth is very powerful.”

There are two kinds of companies, those that work to try to charge more and those that work to charge less. We will be the second.”

It takes enormous strength of character to stay focused on the future when investors are pounding on you to focus on immediate returns.

Too many CEOs sell their company’s future by focusing on keeping investors, analysts and the media happy in the short-term.

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Image credit: TimYang.net on flickr

It doesn’t seem that the financial crisis is really changing things all that much.

The exodus of Wall Street bankers is mostly smoke and mirrors, not change, as many of the so-called disgraced leave for banks that didn’t accept bailout money, taking their clients and attitudes with them.

“Banks paid out some $18 billion in bonuses last year, down 44 percent compared with a year earlier, and many workers viewed them as paltry payouts… Sensing a shifting tide, talented bankers who fear a dimmer future at banks that have taken taxpayer money are migrating to brash boutique firms like Aladdin, which are intent on proving their critics wrong by chasing fast profits and growth in hopes of one day rising up as challengers to the old guard.”

Wall Street forces companies to focus on short-term profits, often at the expense of long-term corporate success and innovation, primarily  to add more zeros to their own paychecks.

State politicians solve their budget shortfalls by trashing those least likely to vote and completely incapable of donating to their campaigns—the poor, elderly and children.

According to Arizona’s Linda J. Blessing “There’s no question that we’re getting short-term savings that will result in greater long-term human and financial costs,” expressing the concerns of officials and community agencies around the country. “There are no good options, just less bad options.” Ohio’s proposed budget “will dramatically decrease our ability to investigate reports of abuse and neglect,” with some counties losing 75 percent of their investigators The Illinois governor’s budget proposal would scale back home visits to ill-equipped first-time mothers, who are given advice over 18 months that experts say is repaid many times over in reduced child abuse and better school preparation.”

Politicians implement short-term fixes at the cost of long-term social solutions, because (a) they have little negative impact on their re-election and (b) they won’t be around to deal with the mess anyway.

I have an acquaintance who isn’t wealthy, probably midway between middle and upper-middle class. She constantly talks about how she and her husband do everything they can to avoid taxes and would never vote in favor of them no matter what.

During the same conversations she gripes that the unincorporated county where she lives doesn’t plow the road near her house quickly enough when it snows; the ambulance didn’t arrive fast enough when her husband had trouble breathing; her grandchildren’s schools keep reducing enrichment programs and the classes are too large.

Their attitudes aren’t all that unusual.

Does anyone else see a dichotomy here?

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Image credit: flickr

I’m a Google fan because most of their corporate MAP (mindset, attitude, philosophy™) agrees with the stuff I believe. Not very scientific, but I’m allowed.

The links today are to some interesting Google bits, I hope you enjoy them as much as I did.

First is a great McKinsey interview with Eric Schmidt (may require free registration). It doesn’t matter that it was in November, the information that he shares makes it great reading anytime.

An article in December’s Wall Street Journal Online brings you up to date on what Google was doing to deal with the economic chaos that more than halved their stock price.

A more recent article in the NY Times talks with Jeff Huber, senior vp of engineering, about how and why Google chooses the products it kills. Useful information that you can use evaluating your own projects.

I found the write-up on the changing of the guard at Google.org, the company’s non-profit and why they are changing their philanthropic approach.

It took many years and several product maulings before people reacted to Microsoft—the original 500 pound canary.  But Justice is sniffing around and concern is rising,

“You almost feel sorry for Google,” said Danny Sullivan, editor in chief of Search Engine Land. “They’re doing a good job and people are turning to them. But when they pass 70 percent share, people are going to be uncomfortable about Google becoming a monopoly.”

Some might say that between the sinking stock price, monopoly worries and the economic debacle that Google, or any stock, isn’t the place to be.

But you know what? It might come as a surprise to investors who can’t see three inches in front of their face, but a company is a whole lot more than what a short-sighted trader who only cares about a quarterly set of numbers knows. Google is for the long term, as are many others—my only regret is that I don’t have the resources to invest.

Image credit: flickr