The Entrepreneur Life

Category: Culture (Page 2 of 3)

Culture in Business, why it matters

What do you do with THAT employee?

“He’s my best sales guy. He makes his numbers quarter after quarter! But everyone dreads it when he comes into the office.” My friend was on the verge of tears – it was clear that he was going to have to do something about his sales guy, if he didn’t want others to quit. But he was worried about his star salesman would react and he was not looking forward to it.

We’ve all faced this issue of what to do with that employee – the trustworthy finance guy, who upsets your team members often over trivial amounts; the brilliant technologist who cheeses everybody off with his superior attitude, or the HR manager, who despite the many years she’s been with you, who’s not pulling her weight any more. The timing is rarely right to confront them and the longer you put it off the worse it’s likely to get. We also worry about how we got here and how best to handle it so we retain them without too high an emotional cost. If you are like me, then you put it off for a better time, which rarely comes.

Hiring people is always one of the top 3 problems I hear managers or founders talk about. Implicit in this of course is that matter of hiring the right people. Yet, even after we’ve hired the right people, as neither organizations nor the people stay constant, we run into all kinds of issues. Gil Amelio, who was an inspiring leader (and CEO) at my first employer National Semiconductor, taught me a very simple framework to both talk about this and to aid action.

Effective v Attitude Matrix

Attitude and Effectiveness Successful organisations look at not just at proven capabilities and experience that would make a prospective employee effective, but also their attitude and fit with your organisational culture. He used the familiar four quadrant framework, with effectiveness along the y-axis and attitude (or cultural fit) along the x-axis as shown in the figure below.

Quadrant 1 – Neither the right attitude nor effective  These are the easiest folks to deal with – they are basically hiring mistakes you’ve made. Ideally you’d not have anyone in this quadrant or if you do, you’d fix your hiring process to minimize recurrence.  Lou Adler, author and CEO of the Adler group in his recent article titled “There Are Only Four Types of People — Are You Hiring The Right Ones?” terms these folks Type 1: Those you should never hire!

Quadrant 2 – Have the right attitude but are not effective Usually this is a sign that these folks are in the wrong job. They may have been effective, even in the same job, but no longer are, because the jobs requirements have evolved or they haven’t. Or you’ve placed them in the wrong role. The ineffective sales guy may bloom in a business development role or inside sales job. The trick is to find them a role that they can be effective in. If your organisation is big enough, you may have one or more such roles – sometimes the right role may not be within your department or even company, in which case its best to help them find the right role, whether inside or outside your company.

Quadrant 3 – Have the right attitude and are effective These are your stars – the people who perform consistently and lead from the front. The trick with these folks is to ensure that they are constantly learning and growing. Folks in Quandrant 3 can fall into Quandrant 2, when your company and your needs grow fast and they don’t grow as fast. These are the folks you want to be hiring and your company and its processes should be geared to finding, attracting, retaining and growing Quadrant 3 folks.

Quadrant 4 – Don’t have the right attitude but are effective This is the hardest group to deal with. The obnoxious sales person my friend had to deal with, the supercilious technologist or rude finance guy we met all fall into this quadrant. Two things make it difficult to effect change with these folks –

  • they are deemed successful and have been rewarded in the past, despite their interpersonal shortcomings.
  • They are often positions deemed critical, that make change not just unpalatable but downright scary. “What’ll happen to my sales, if this guy leaves?” or “Will I find another trusthworthy finance guy?”

Organizations suffer the most, because most of us don’t know how best to handle Quadrant 4 folks. The first step is to recognize not only the existence of these four quadrants but that people can move within the quadrants. This is most commonly seen from Quadrant 2 to Quadrant 3 (more effective) through skilling and occasionally to Quadrant 2 from Quadrant 3 (less effective) when the job needs grow and person doesn’t.

Effective v Attitude Matrix

I’ve found talking about the four quadrants and even mutually agreeing with your team members where they see themselves and where their peers or you see them helps immensely. This way when it is time to have the hard conversation, you both have a framework and vocabulary that can help keep the conversation professional. In my experience, almost always folks in the Quadrant 4 will have to be let go. We’ve had the occasional technical person build out their interpersonal skills and make the move from Quadrant 4 to Quadrant 3.

Let me know how this works for you.

3 Steps to Resolving Team Conflicts

Conflict“It’s like we’ve done absolutely nothing these last five years. Everything we’re doing is wrong.” My friend was really upset. His company had just brought on board a new VP of Business Development and looked like the man was not exactly winning minds and hearts.

“Worse yet, he has the right answer for everything. I’m just sick of the guy – I don’t think I can work with him!” It took a while for my friend to calm down and when he did, I realized that he actually agreed with many of the new VP’s observations. In fact he’d been saying some of the very same things, albeit a whole lot more diplomatically and in smaller groups. Why then, was my friend not happy that he had an ally, a senior one at that, to set right the things that he himself thought needed to be fixed?

Team conflicts usually originate when something is said or done. And often, it’s not about what is said, but how it is said. Depending on the level of trust or lack thereof, this gives rise to questions about why it is being said – in other words, motive or intentThe secret to resolving team conflict is to both understand the what, how and why.

Content (the what) As most of our work is done with others, as team mates or in meetings, the ability to communicate clearly with one another is important. What is communicated need not always be agreeable or even acceptable at times. Some of us (or many times our bosses or god forbid, our spouses) go out of our way to avoid disagreements. That’s not a good thing, as healthy disagreements and alternate points of view result in better decision making. So if you don’t like what some one is saying, first examine whether you are disagreeing with the content of their statements. If you are, then a discussion (dare I say argument) or reflection can ensue. If however, as with my friend above, you don’t disagree with what’s being said then it’s time to look at style. 

Style (the how) We’ve all encountered folks who appear to have no filter between their brain and their mouths. So they blurt out things, at times hurtful, make sweeping generalizations and often label – “I can’t believe how lazy he is – why do you let him get away with it?” A lucky few, may be unaware they do this and may require only pointing out to change their communication styles. Other’s may range from a defensive “You know me, I’m blunt!” to combative “That’s they way I’m” all the way to outright denial, “I don’t do that!” What all these folks don’t realize is that the message is lost, because of the their delivery style.  It is critical to address this. People who won’t modify their communication style will not be effective and may be perceived to have an ulterior motive.

Intent (they why) All of us find it hard to hear less-than-pleasant things, especially about ourselves. This could range from the simply social “You have bad breath” to a more career limiting “You never let the other person complete their thought!” When such feedback comes from someone you trust and whose motivations or intent you don’t question, then you are willing to hear what’s said, even if unpleasant.  On the other hand, when the person is either new to us or we encounter a style that’s jarring and not amenable to change, then we question their intent. Why are they doing this – are they being political? Are they actually saying or meaning something else? At this point effective communication has ceased and you have yourself a team conflict.

Successful leaders and teams learn to separate Intent, Style & Content. Once intent is clear and non-negotiable, style issues can be addressed. Then real progress in terms of discussing contentious issues with the necessary focus on content (or what’s being said) can be made.

Addressing style issues will enhancing your team’s effectiveness and not doing so will cause much mayhem as intent is questioned leading to further conflicts. 

3 Steps to Create a Culture of Innovation

InnovationYesterday I was part of a panel discussion on innovation and entrepreneurship at the opening of the Innovation and Entrepreneurship Development Center (IEDC) at the Dayanand Sagar College of Engineering. One of the first questions the moderator posed was “How does one create a culture of innovation and what role does leadership play?

To me this is not that different from the question, How does one create a culture of ______ (fill in the blank) – for instance courtesy and consideration. You start by being polite – kind and courteous. Similarly creating a culture of innovation within our companies, divisions or teams is to start by being innovative. What does that mean?

To me it means three things

a] INSPIRE Talk about, share and celebrate innovation – set aside time, whether a Friday lunch or before your weekly team meeting to show what you mean by innovation. Bring in a mechanical water sprinkler and share with your team why you think it is innovative or better yet ask them what is innovative about it. A clasp on someone’s chain, a pain-free blood sugar measurement tool – in other words – “the ordinary” and the extraordinary that’s around us every day. Allows you to discuss and develop a shared sense of what is innovation and over the common misconception that only a cure for cancer can be innovation. Over time this can be things that your own team or company are innovated, but don’t wait for it to be done in-house

b] MEASURE Put in a process, where the team can spend time focusing on problems – which allow scope for innovation – could be in technology, internal processes or methods or any other function within your business. Intuit for instance created a process for employees to share ideas and seek inputs which has eventually become a product they now offer their customers. And most importantly put in measures — only that which gets measured will get done. So when you talk about it, ask about it, measure it, everyone begins to pay attention to it and that’s how a culture of caring about innovation gets slowly built up.

c] REWARD & RECOGNIZE Nothing works like recognizing the work people are doing and rewarding innovative behavior. A critical element here is not to celebrate success alone or what is commonly perceived as success – ie a new product that launches or a new idea that’s implemented, but to recognize and reward risk taking. Unless we create a culture within our companies of tolerating mistakes and viewing them as a way to learn and do better, it will be very hard to create a culture of innovation. As Gordon Moore, founder of Intel put it “I view this year’s failure as next year’s opportunity to try it again. Failures are not something to be avoided. You want to have them happen as quickly as you can so you can make progress rapidly.”

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Discretion – a skill founders and CEOs need in spades

As parent of two teens, I’d like to claim that my wife and I never argue in front of them. I’d of course be lying. That being said everyone with children knows, that even if their kid can’t rattle off the 5 times table, they can recall every last word you said in your last spousal encounter, down to the tone of voice. And if you are [un]lucky, it will be saved for posterity in their biography.

Now as an entrepreneur, founder or CEO why should this story be relevant to you? Basically, this is a lesson on discretion – or the lack thereof – and how it can come and bite you in the rear!

As an entrepreneur, founder and especially as a CEO, you are going to having some rough times out there – being plagued by self-doubts, or worse yet certainty that you are screwing up. You will also wonder why you are doing what you are doing (or not) and is this whole thing a mistake? You wouldn’t be the first one to have had these thoughts nor are they likely to occur only once.  The question is what should you do when you are thus assailed?

What you should NOT do is share it with your partners – immediately or without reflection. Usually it’s best shared with someone outside your founding team – a friend, an advisor and if you are lucky, with a spouse. This last can be tricky and deserves a whole another blog post.

I have worked in and with multiple startups and started two of my own, where the founders were friends, sometimes having known each other for many years and other times, been colleagues who’d worked with each other. Almost in all cases the co-founders had been friends before becoming business partners.

And in almost everyone of these instances, when one or more founders have been plagued by self doubts, voicing it without forethought to other founders or senior staff has caused immense grief. Not unlike arguing in front of the kids (or other 3rd parties) who have no context on my wife and our deep abiding love or other ongoing issues 🙂

In every case, talking about it with a non-stakeholder first would have done away with much thrashing and grief that otherwise ensued. Talking it out with a third party always worked better – in terms of achieving distance which helped in gaining clarity and perspective before looking for answers.

Many a times, our self doubts maybe no more than a fleeting moment of vulnerability – or the result of a bad day or week, a setback. We may bounce right back. At other times, they may be grounded in facts – in that we are operating at the limits of our ability or capabilities, personal life (or the lack of one) may be intruding into our professional lives or we may be avoiding a critical set of actions/decisions at work to avoid unpleasantness.

And if there are real issues at play that need to be brought up to your partners, it should not be done in a flippant comment or regrettable aside that can be misconstrued or worse. It can be presented with some distance and perspective that you’d have gained in discussing it with a non-stakeholder first. This alone is a good reason to seek out a mentor or advisor, but almost any friend, who’s not involved in your business and has no axe to grind will do.

So the next time you think of making a casual remark to the other founders, especially those who are your friends, bite your tongue. You are a parent – or at least need to behave as a responsible one – if you want to keep the job!

4 Degrees of Separation – The Indian Network

Photo: marfis75 via Compfight

Photo: marfis75 via Compfight

As with many profound discoveries it began innocuously enough.

“I don’t believe that there are truly a billion Indians,” my friend Marcel has remarked more than once to me. Of course, when he first made this statement as a graduate student, maybe because it was after a late night party at Ms. Chan’s, I didn’t take him seriously. However, the events of the past few years, particularly each time I meet someone new, have convinced me that he’s probably on to something: There don’t seem to be a billion of us.

“Please meet my partner Habib, he’s coming down to the entrepreneur’s meet next week in Bangalore.”

Jaideep, a classmate who now was living in the U.S., and I had reconnected last Christmas at our 25th reunion. Despite, or more likely because of, the amount of libations consumed, he figured I must know a thing or two and asked me to share it with his Mumbai-based business partner.

Habib and I did connect over the phone soon after at a startup event and agreed to meet outside the auditorium just before lunch. When I made my way out of the hall a few minutes before midday, I found small clumps of people discussing the morning presentations and their own businesses. After several “Hail-fellow-well-met” intercepts, I heard my phone ring. It was Habib. As we exchanged “Where are you ats?” I spotted a bearded gentleman with a phone to his ear, standing next to my friend Dhruv just outside the gate.

“Habib?” I asked tentatively and the gentleman stuck out his hand

“You are Srikrishna?”

Inevitably, the discussion of “How do you know…” ensued between Dhruv (with whom Habib had worked for several years at an ad agency) and me. The longer we spoke, the more folks we found we knew in common.

Scientists in the U.S. as many as 50 years ago began exploring what they then termed “chains of acquaintances.” In fact, Stanley Milgram, then a young social psychologist (apparently you can study practically anything at Harvard) did his famous package-mailing experiment to see how short these chains of acquaintances were.

He mailed packages to 296 people asking them to post them on to a “final recipient.” None of them was told where the final recipient actually lived; just his name, occupation and some personal details (these were pre-Internet and pre-Google days, of course).

The folks who received the package were supposed get it delivered by passing it on to someone with whom they were on a first-name basis and who might have a better chance of finding the final recipient. Astonishingly, even without any Indians or Chinese being involved, the packages made it to their destinations in less than five hops.

Hollywood got in on the act with “Six Degrees of Separation,” based on the play of the same name by John Guare.

Before you know it, folks studying crickets and how diseases spread started working on this “Small World” theory. While the folks at the University of Virginia, in an urge to create something useful, released the Kevin Bacon game (look it up), Duncan Watts at Cornell published the first compendium of all key Small World theories.

What however was missing in all these studies is what my friend Dr. Sluiter, keen scientist that he is, formulated as Sluiter’s Lemma on Indian Connectedness or SLIC. I feel like Harrison Ford finding the Ark of the Covenant when I present these lemmas. If only these other folks had stumbled upon it sooner, the Small World theory would have made a whole lot more progress much earlier. But as the old saw goes: Better late than never.

Lemma 1: Any two Indians went to school with each other. Given the average Delhi Public School class has probably 300 kids in five sections, and every kid raised by a self-respecting, card-carrying Indian parent needs to become a doctor or an engineer, it’s almost inevitable that between 12 years of schooling and at least three years of college a good many of us have gone to school with one another. And this does not even count graduate school where a few more links can be forged. I can hear the mathematicians among you stating that the average IIT had only a class size of 400 to 600 and medical schools even less and that those are pretty small numbers. Fear not, Lemma 2 comes to the rescue.

Lemma 2: Or their siblings/friends went to school with each other. Regardless of what you may have read in this paper or other publications about the rise of nuclear families in urban India, we are blessed with a large number of siblings and cousins. When you now factor in all the other kids with whom we played on the street with marbles, tops, gilli-danda, cricket and numerous other sports, it quickly adds up.

Lemma 3: They are related to each other. In the unlikely event two Indians or their siblings or friends did not go to school together, they are usually related. “Oh, he’s my mother’s brother’s wife’s cousin’s son.” (In my case this person also happened to be my classmate in college.) In my brother-in-law’s case, he has found a good part of Tamil Nadu is related by blood — not that surprising when grandparents on either side have 12 siblings.

Lemma 4: If all of the above fail, they are married to each other. Drum roll on this one. Just when you felt that you’ve actually met a couple of Indians who are not connected, you’ll find, as Dr. Sluiter did, that they are married, either to each other or into each other’s families. Sometimes you can’t tell the difference in India, but that’s a story for another day.

This article first appeared in the India Real Time of the Wall Street Journal.

Talent, training and trust – building culture person at a time

This evening I read Peter Bregman’s blog post about his experience at the Four Seasons in Dallas. It brought to mind my own experience at the ITC Windsor Manor in Bangalore.  The family and I had been visiting some friends in the northern part of town. It was late in the afternoon, when we headed back. Of course the kids waited till we were a fair bit down one of Bangalore’s interminable one-way roads, before clamouring to use the restroom. Usually, the chorus of “I’m hungry” or “I need to use the bathroom” from the backseat would result in much heated discussion between my lovely wife and myself. Luckily we were right in front  of the Windsor Manor, so no discussion was needed. We pulled in, parked the car and dashed to the front door.

The liveried doorman, the one with the enormous moustache, held the door open. “Which way to the rest rooms?” I asked as my eight-year old wiggled in front of me. The wife was still walking from the car, dragging our reluctant ten-year old behind her.  “Straight ahead sir, through the arch and turn left. You will find the restrooms in the first corridor on your right.” We made it safely with time to spare. As the girls and their mom, took their time powdering their noses or discussing Dad’s driving – I hung around the corridor, admiring the Raj era landscapes on the wall.

“Can I help you sir? Were you not able to find the restrooms?” I looked up to see the liveried doorman, who was clearly headed for his break. I assured him that I had already availed of their fine facilities, was merely waiting for the family and thanked him for his concern. After ensuring I had everything I needed he finally headed out the staff door. It was only then that I noticed the discretely designed staff door down the corridor, through which another staffer had just passed.

I was just blown away – there must have been 15-20 people at the front portico, as the family and I had passed through the front door. It was a good ten minutes or so later, when the doorman and I met in front of the restrooms. We were not guests at the hotel and I am sure that his job required him to manage matters primarily near the front porch. Yet, the care and sincerity with which stopped to inquire after my needs and the way he tried to address the matter of my possibly not having found the restrooms clearly reflected the sense of ownership he took over helping visitors and guests. Elsewhere at the Windsor Manor, at their incredible “Jolly Nabob” restaurant, I have seen the same excellent sense of ownership and pride with the maitre d’.

As anyone who’s been in the hospitality business knows, finding good help – the talent – is hard. Training them and inculcating in them the sense of ownership and service mindset is even harder. And institutionalizing it requires trust! This is a lesson all of us could use and Windsor Manor and the Four Seasons teach us well to use in our own business and lives.

Excellent service should seem trivial – a SpiceJet story

This evening I had one of those AHA customer service experiences. I had flown into Bangalore from Chennai on SpiceJet‘s afternoon flight. Even as I was headed home in a cab from the airport, I realized that I had left my (simple ruled 200 page) notebook in the pocket of the seat in front of me. I pulled my boarding pass, which amazingly had the customer service numbers (both toll free and regular) on it and in a noisy call from my cell had a customer service request put in. Before I got home, I got a call from the airline (from their local person I suspect) to whom the trouble ticket had been assigned. She called me to say that they’d expect to get back to me within the next 24 hours. At this point I was happy to have just remembered where I had left my notebook and having called it in. Their acknowledging my call was just icing. So I figured.

However within the next two hours I had six calls from them. Six – that’s right, six (missed) calls from SpiceJet’s customer service department – spread over a 15 minute period. And once I got home, I saw that they had emailed me a copy of my formal complaint with the relevant trouble ticket info. And having been unable to reach me on my mobile, they had sent a separate email, informing me that they had found my notebook and it now awaited me (armed with the boarding pass and a photo ID) to be picked up. Wow! What a feeling it was and I am practically glowing still (in the dark as I write this) from that experience of nearly eight hours ago. And to think I had picked SpiceJet (the second time this week) for my flight primarily due to their value pricing – for those not familiar with crowded Indian skies they aspire to be the Southwest or Ryan Air of India, especially with the leader in that space Deccan now moving upscale after their acquisition by Kingfisher Airlines. Such service on the phone, on-line and in person was unbelievable – Good work, SpiceJet!

All this, when I had only spent a grand total of Rs 2350 ($55) at SpiceJet, contrasted with my experience two weeks ago of trying to get a spanking new (2-day old) Nikon that had stopped working, fixed. But that’s a whole another story. This experience certainly showed how some training, committed service providers and simple follow through can make excellent service seem trivial.

Communication and culture in organizations


Photo Credit: [phil h]

A few months ago, I wrote about the need for communicating early and often and a recent article by Toni Bowers, Senior Editor, TechRepublic titled “Say what you mean, mean what you say” highlighted the sore need for clarity in these communications, even if done early and often! The readers’ comments to that post, due to their specific nature were extremely illustrative, reinforcing the core message of how critical clear communications are, particularly when it comes to individuals and dishing them unpleasant news.

Less than ten days ago two of my long-time colleagues, sat me down and after some initial politeness (“you have issues rather than you have a problem”) they got down to their core message “We don’t believe you handle unpleasant stuff well, what do you think?” Talk about a topic for reflection! The reflection has made me particularly receptive to Toni’s post and the discussion thread thereof.

Toni’s core message is –

  • Be direct and specific when giving feedback, particularly relating to problems
  • Don’t be heartless but use simple statements that preclude misinterpretation

Key points the commentators added include

  • Communicate expectations up front (my early and often mantra) to avoid misunderstandings
  • Don’t tell the team they have a problem, when you want to communicate to a particular person – do it one-on-one
  • Be open and interested to find out reasons for why you are where you are (ask and listen, not just talk)

As with all good advice, once stated it seems simple and self-evident. The fact that more of us don’t practice it consistently only points to the need for periodic reminders. Which brings me to the whole running water and rock metaphors of many Zen koans. The Buddha said (with regard to cultivating virtues) diligent practice will work like a “… small stream being able to pierce rock if it continually flows.” Alas this is true not just for virtues but for bad habits like poor or no communication, a constant stream of which can wear down the enthusiasm of even the most motivated team member.

Even one dinosaur brain manager or toxic teammate when not dealt with direct and clear communication can start a tear in the fabric of your organization’s culture. Subsequent failures of communications, however small, only grow this tear till soon all we’ll have left will be shreds! So whether rock or fabric, our organizational culture needs continual renewal through simple, clear and sustained communication – to grow and prosper!

A Stake in the Outcome – Building a Culture of Ownership

These last six months, I have been doing a good deal of reading; on average maybe two books a week – at least one of which has been a business book! I have gone back to reading books that have been in my library a long while such as Paul Hawken‘s Growing a Business as well as reading new (to me) ones such as A Stake in the Outcome by Jack Stack and Bo Burlingham.

(c) livemint Stake in the OutcomeI ran across A Stake in the Outcome (ASitO) while browsing business books at the Easy Library (a great online library with a brick & mortar presence in Bangalore). Having read and been influenced by Bo Burlingham‘s more recent Small Giants, I began browsing ASitO at the library itself. As the saying goes, “When the student is ready, the Master will appear!” Certainly that’s how I felt as I scanned the book quickly right there and subsequently brought it home to read.

Chapter 3 titled The Design of a Business, begins:

Most people, I know, don’t think about the company they’re designing when they start out in business. They think about the products they’re going to make, or the services they’re going to provide. They worry about how to raise the money they need, how to find customers, how to deal with salespeople and suppliers, how to survive. It never occurs to them that, while they’re putting together the basic elements of the business, they’re also making decisions that are going to determine the type of company they’ll have if they’re successful.

I felt someone had just hit me on the head with a two-by-four. Every week I meet someone who is thinking about starting something. Nearly every last one of them talks about their product or service idea and if at all they talk about their company, its only when they intend to “flip-it” (“Built-to-flip” as Jim Collins speaks of as does Sramana Mitra in a recent blog entry). Jack Stack in contrast, states clearly that

Ownership Rule #1
The company is the product

It is worth pausing here and reflecting on his assertion. All too often I see entrepreneurs, young and not-so-young, pitch their businesses as I have heard Hollywood scriptwriter’s do! “Think Netflix but for Indian movies,” “ meets iTunes,” “Google but for contextual search.” I’ll refrain from speculating whether the internet bubble begat this or this begat the bubble and what role VCs had to play in this. This focus on what a company does, rather than what a company will be, Stack asserts misses the opportunity to explicitly design your business from ground up. If you haven’t figured it now by now, I agree whole-heartedly.

In many ways, the practices of visionary companies that Jim Collins and Jerry Porras discuss in their book Built to Last have been explicitly operationalized in Stack’s company Springfield Remanufacturing (SRC). The big difference is that Stack’s direct writing style and first-hand experience makes this a gripping read rather than an dry business book. Also unlike most business books that appear to document management’s clever (often infallible) strategies, Stack walks us through both the good and poor decisions they made, as they set out to remake SRC. In the end (in fact in the epilogue), Stack quotes Herb Kelleher, cofounder and former CEO of Southwest Airlines responding to The Wall Street Journal’s question on what he meant when he said Southwest’s culture was its biggest competitive advantage.


“The intangibles are more important than the tangibles,” Kellher replied. “Someone can go out and buy airplanes from Boeing and ticket counters, but they can’t buy our culture our espirit de corps.”


ASitO walks us through SRC’s journey of building such a culture of ownership from that day in 1982 when Stack and his managers did a management buy-out of their struggling engine remanufacturing factory to twenty years hence when their 10cent stock was worth $86 (since then has grown to over $136). Most importantly the authors don’t romanticize the journey and are explicit in periodically setting our expectations with insights such as “Stock is not a magic pill” (ownership rule #4) and “Ownership needs to be taught”(OR #7).

ASitO is a must-read for any one contemplating starting a company or looking to effect change in their organizations through employee participation and a culture of ownership.

A much more detailed summary of the book itself can be found here

Hiring for Skills, Talent AND Values? One Story

In a recent Forbes article, Nathan Bennett and Stephen A. Miles state,

Repeatedly we hear from executives that the talent pool is not nearly as challenging to navigate as is what we have come to call the “values pool.” We suggest that, […], the real shortage facing companies in the future will be less about finding individuals with the knowledge, skills and abilities to do the job than about finding individuals whose personal value system provides a fit with the company’s values and mission.


Photo Credit: –Mark– via Compfight

Anyone who has run or worked in a startup knows how true this is. In our own startup Impulsesoft, at the very beginning (circa 1999) there was no such separation of values and talent. When you are less than eight people, everybody better be able to pull their own weight – but then again the reason you do a startup (at least the reason we did) is to work with people who share your values and vision. It’s when you try to begin hiring beyond the first few – the core team, the importance of values becomes real apparent. We went through four distinct phases in our startup –

[i] can we get anyone else to even join us?
we got started without a lot of forethought or planning. We even got our first customer signed up, before we bought our first computer. Now there was the minor matter of actually doing the work. It dawned on us then that with no money, no office and no clear grand strategy could we even get anyone else to join us. We talked a good story I can tell you that – but when our first prospective employee’s dad showed up to check us out, we knew we had a challenge on our hands. However values were paramount at this phase, as we felt we had the talent to get the job, any job, done!

[ii] lets focus on bringing only these three/four folks on board
Once we had our share of new college grads (NCGs) come by, wisdom bloomed. We were not going to be able to do it all – hustle customers, write proposals and actually write code – let alone direct the still not-steady-on-their-feet NCGs. By now we’d been talking to ex-colleagues who shared our values and skillwise walked-on-water; they saw that we were not yet dead and realized there might be something here after all. Suddenly we had a core team, that was incredibly talented and well aligned.

[iii] how fast can we hire hands & bodies and bring ’em on board?
Suddenly we were a real business, with customers signed up for products we hadn’t built yet, and paying customers expecting us to support them with prototypes we had shipped as product. The software managers wanted more coders – the hardware folks more designers and everyone wanted more testers – we just went crazy trying to find the “talent pool” – if you could walk, string a set of C code together and didn’t drool excessively, we hired you! Even the talent bar probably got shaky in this phase.

[iv] what the hell where we thinking in phase [iii]
When products still didn’t work as advertised and customers were no happier, having paid up even more money and our own managers ready to kill some of their staff, we began wondering what the hell had we been thinking? The questions now were how do we let go of these folks and get folks with the right values and attitude even if we have to teach ’em the right skills? The lesson we learnt was that though we had hired talented folks, they had come up real short in both attitude and vision alignment. Our hiring process about which we had become quite proud (It’s hard to get hired at Impulsesoft, we’d say) had become too much talent focused and too little value focused in phase [iii]; the fact that I am writing this today means we learned from this and while it hurt us, it didn’t kill us. But then again that’s the sort of lesson that stays with you.

Bennett and Miles are right – only the future is here NOW!


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