The Entrepreneur Life

Tag: Stories

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,” “Waiter.com 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

Storytelling and Culture in Companies

Storytelling

Photo Credit: Bindaas Madhavi via Compfight

I was lucky enough grow up with a paternal grandmother, a maternal grandfather and even his mother, my great grandmother (GGM), who were always ready with a story. My GGM’s life story itself is worth a whole separate post – widowed at nineteen, while pregnant with my grandfather, she raised him, through a polio attack (when he was two, that left him crippled in one leg), saw him through college, then when he was widowed with ten kids, she then in her sixties, raised the kids, (and the first grandkids) while managing the household, ten cows and a small farm sized garden.

Some of my favorite memories of my GGM are from dinner time. Six or seven of us kids, cousins and siblings, would be sitting in a semi-circle, on the floor of my grandfather’s dining room. GGM would be seated with her back to the wall, at the center of the half circle, with a large stainless steel bowl of mixed steamed rice and yoghurt. Each night, she’d narrate a story as she fed us dinner. She’d scoop up one handful of the rice and drop a dollop in each of our outstretched hands, going clockwise. And with each handful or mouthful, she’d narrate what happened next, in the tale for the evening. Oh, on so many nights, we’d have to stop eating and console her, as at particularly poignant moments in the tale she’d stumble, stutter then sniffle before a stream of tears would run down her wrinkled face. At other times, she’d have to stop the story to urge us to continue eating or close our mouths as we’d listen to her all agog, our food and outstretched hands totally forgotten.

Those local tales of lions that came as bridegrooms and sparrows that stuffed themselves and the longer tales from the Indian epics have not only stayed with me but taught us the values that my GGM held dear. In a very small way I have tried to share that with my own two children. However, the larger lesson I have learnt is the value of stories and storytelling to imbibe culture in families and companies.

There is a large swath of didactic and somewhat intimidating academic research done in recent times on the role of storytelling in business. Leaving that to the experts, in every company I have worked with, there has been storytelling – of dream deals that were saved or won by heroic individual or team efforts; customers from hell or my own favorite, of a customer who insisted on paying by Sep 30th ahead of our delivery milestone, as his budget would vanish on Oct 1st, but wanting a handwritten personal note from the CEO assuring that we’d still deliver on our commitments; our own story of how we asked engineers and managers to have their pay raises deferred and then to take a pay cut and my wife’s favorite, of how I was a zombie the day we lost that truly big, already-in-the-bag and company-saving quarter million dollar deal and the mourning we went through (denial, anger, bargaining, depression, and acceptance – all in a day.)

Of course storytelling need not be just in front of the fireplace, over dinner or by the water cooler. Books, emails and memos can just as powerfully share stories and values. The best examples I can think of include

    • Memos from the Chairman” by Alan C. Greenberg, former Chairman of investment
      banking firm Bear, Stearns & Co. In a series of memos, many at less than 150 words, he has shared his views, thoughts and narrated tales (with a fictional protagonist) in an informal and easy style
    • Small Decencies: Reflections and Meditations on Being Human at Work” by John Cowan – a collection of fluid essays that narrate tales from John’s personal and work life and lend tremendous insight into our own lives, without hitting us over the head

I’d recommend both these books for a hearty good read, even if storytelling and organizational culture are not your favorite topics!

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