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corporate culture

The Hole in the Soul of Business

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The Hole in the Soul of Business

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(the title of this post is a direct 'tribute' to a column of the same name by one of my favorite management writers, Gary Hamel) For the past 12 years, Edelman has conducted a very in-depth study of the level of trust consumers have for government, media and corporations and has found, unsurprisingly, that there has been a steady decline in public trust. This doesn't come as a big surprise to most readers who feel continuously manipulated and lied to by government, media and corporations in the interest of their own gains.

But trust works both ways and I'm less interested in convincing customers and citizens to trust and more interested in convincing government, media and corporations to trust their customers and citizens.

I've observed and been part of a growing DIY culture - one that is demonstrating that individuals can and will come together to achieve results that are inspirational and often reflecting a more democratic outcome than any of the top-down efforts.

Take, for instance, the amazing efforts of #OccupySandy, a grassroots, people powered movement of engaged and concerned citizens looking to help Hurricane Sandy victims and get affected areas back to normal (or better) in the wake of the storm. Government did an okay job coming in in the immediate aftermath, sending in troops, supplies and boosting the cleanup and some corporations have donated a good number of proceeds to the clean up (mostly going to the Red Cross and other large NGOs). But the #OccupySandy volunteers can go deeper and further and not have to encounter much for red tape. They can see a crisis, figure out the most efficient and best way to fix it and just do it. Are mistakes made in the process? Probably. But the benefits of these agile, scrappy "organizations" outweigh the losses.

I've been a fan, advocate of and participant in grassroots change for a long time and continue to believe that encouraging participation is a good thing. Generations of people were encouraged to be passive and dependent, but the web came along and changed that paradigm. Instead of Read-Only, it gave us writing privileges. We gained a voice. It allowed us to connect with others who wanted to contribute. Those who grew up with the web expect interaction and their default is participation. Those of us in the 'sandwich' generation (half our lives were pre-browser) and older are still trying to figure out what that means.

I was raised in a culture that promoted a paternal outlook on the world. People needed protection: from invasion, from the communists, from brand confusion, from the bad guys and, mostly, from one another. The default was security, not transparency. Sites like Wikipedia were frightening before they were invaluable. But as the web has evolved, it's as if the curtain is being pulled back on the Wizard of Oz and we are realizing more and more that we don't have to wait for permission or someone else to save us. We have the tools and power at our fingertips.

But power is a funny thing. Once you have it, you don't want to give it up, especially if you have it based on some default or otherwise extrinsic means. Real power and leadership is when people trust and respect you and choose to follow you. When I think of real power and leadership, I imagine those that really affected change like Gandhi, Martin Luther King Jr., Simone de Beauvoir and more recently Steve Jobs (and yes, Steve was reportedly hard on people, but he led with such inspiration). These leaders didn't feel threatened by others. If they were criticized or challenged, they would engage in the challenge and open themselves up to improvements. But most power is fleeting and extrinsic. It's gained from having money or given a position in which one can exercise their power. I've watched lots of people luck out on a bit of success only to let it go to their heads. These are the same people who feel the most insecure about their power.

Most corporations fit this bill. It's such a dog-eat-dog world. Customer loyalty is fleeting. And you can have a hit one day and be forgotten the next. Smart companies who will succeed will remain more agile and flexible like the #OccupySandy example. What works today may not work tomorrow, so how does one know how to stay a step ahead? By being open and flexible and empowering every employee in your organization to bring their innovation to the forefront. And how do you ensure that this innovation is focused and not haphazard? Strong culture and leadership. The more your employees understand and are invested in your brand, the better their ideas will be.

But the hole in the soul of business is that it can't trust. It can't trust partners, employees, customers or even themselves most of the time. Even when doing the same thing over and over stops achieving results, leaders would rather turn to outside consultants that don't know their business for the answers rather than asking their own employees who have hundreds of ideas on how to evolve. Every corporation and every government has an #OccupySandy of their own just waiting to be the incubator of potential awesome, but they either ignore or alienate their biggest assets.

I'm guessing that Edelman's Trust Barometer has a direct correlation to the trust that government, media and corporations have for their customers and citizens. You trust us and we'll reward you by trusting you back. I know it sounds more than utopic on my part, but I still believe in the awesomely powerful potential of collaboration between people, government, media and corporations - with an emphasis on people - to solve problems (and make profits) more effectively.

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Why is Culture Such a Difficult Concept?

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Why is Culture Such a Difficult Concept?

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About 6 months ago I was at a conference and the presenter brought up Zappos as the shining example of a company that has a strong culture that translates into sales. The person next to me leaned over and said, "Man, can't anyone come up with more examples?" "Sadly," I replied, "The reason Zappos and Southwest Airlines and Trader Joes and Cliff Bar and the small handful of companies are mentioned time and time again is because there aren't any other ones to take their place."

Yes, there are small, up and coming companies who have put their faith in the idea that building a strong company culture will lead to happy employees and happy customers and big profits and I look forward to the day that these companies take the place of Zappos in these presentations and I'm pretty sure it won't take them very long. But people watching these presentations are hungry for results. Big, impressive results. And saying that Modcloth has $20 million in revenues or Etsy makes $314 million when the audience isn't even hip to their brands is a tough sell.

But the question I really want to know the answer for is why is it so hard for established brands to implement a strong culture? And I have found a couple of answers to that question:

  1. Culture comes from leadership and the leadership isn't committed to it. The leaders behind the companies whose cultures aren't strong aren't believers. They were taught at the school of hard economics and something like culture just sounds willy nilly to them. Sure, they hire brand consultants to come in and create a statement and put up posters, but they don't think it's all that serious.
  2. Employees in a weak culture have become cynical, at best, droned at worst. I bet that you can go back to the early few months of 99% of any employees record and show enthusiasm, initiative, eagerness and a desire to learn and grow. I know very few people who pursue a job because they just want to sit at a desk and watch a clock. But weak culture companies have a way of sucking the life out of their employees. And most likely they've fired the employees the company can't break. You know these ones. The trouble makers. The ones that question. The ones that fight for change. Too many of those stubborn ones hanging around may actually give the drones hope to care again. Get rid of them.
  3. The connection between strong culture and results is still a bit fuzzy. There have been lots of studies and books written on the subject that show that strong corporate cultures out perform weak ones, but the correlation isn't strong enough to say, "Without a shadow of a doubt, the reason here is culture." It's because lots of the evidence is qualitative rather than quantitative. "Employees who are happy make your customers happy." And even when numbers are put to that statement, it's a hard one to prove direct correlation with. This sucks. Because in our guts, we know this is true. We just need to get better at proving it.
  4. There is still too much lip service and lazy implementations that don't work. Too many companies do the exercises and print the wallet cards, but very few of them really understand how deep cultural values have to be implanted in an organization. Years ago while interviewing Tony Hsieh for my book (I was one of the first people to talk about them btw ;)), I asked him about some of the family values and he said something like, "The one that trips people up is 'Be Humble'. We don't hire self-proclaimed rockstars or gurus at Zappos." When I asked him if I'd get the job, he replied, "Probably n0t." That demonstrated a deep commitment to those values. It's part of hiring, training, customer interactions, business development and partnerships, merchandising, the way they market, communicate...everything.

It's sad, really, but it looks like we are going to have to be patient for the up-and-comers to create some good solid data on the correlation to make this a MBA endorsed business practice. And someone will create a sort of 'standards' and processes that will fly in the face of what it really means to have a strong culture (ie. intrinsic, rather than extrinsic motivators). Until then, I think it's a-ok to shine our light on Zappos, Southwest Airlines, Trader Joes, Etsy, Modcloth and anyone else that puts culture at the core of their organization and wins because of it. Because, well, they are well worth celebrating.

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