Top CEOs Reveal Their Secrets to Innovation and Growth [WEBINAR] 0

Whether you’re running an ice cream shop or building the next great startup in Silicon Valley, you’re always looking for ways to innovate and grow your business. The economy is constantly changing and new challenges arise every day, so figuring out how to move your company faster—how to be “quick and nimble”—is imperative to growth.

Screen Shot 2014-03-05 at 4.51.27 PMMy colleague, Sabrina Parsons, recently hosted Adam Bryant, The New York Times bestselling author and “Corner Office” columnist, for a webinar on exactly that: How to lead your company with innovative strategy and a great culture.

Adam has interviewed such ground-breaking CEOs as Tony Hsieh of Zappos, Angie Hicks of Angie’s List, Steve Case of Revolution (and formerly AOL), and Amy Gutmann of the University of Pennsylvania to identify the biggest drivers of a corporate culture that fosters innovation and growth.

At the webinar, Adam shared tips he’s gleaned from these business leaders and more, as well as how you can apply their tactics for growth in your own business. You’ll learn how to attract and retain the best and brightest employees by creating an environment where they can grow, contribute, and feel rewarded.

Whether you’re a startup, small business, or a Fortune 500 company, your company can benefit from some strategic decision-making with regard to company culture.

I’ve included the full audio and slide deck above, and the full transcript below:

Top CEOs Reveal Their Secrets to Innovation and Growth

Sabrina Parsons: I’m really excited to have Adam Bryant with us. Adam, if you can go to Slide 2. So Adam Bryant is most famous for his “Corner Office” column that he does on The New York Times. I first met Adam because I was lucky enough to be interviewed by him for his innovation “Corner Office” column—which happens on Fridays, I believe. Is that still happening on Fridays, Adam?

Adam Bryant: Yes, that’s right.

Sabrina: Great. If you are familiar with the “Corner Office,” he’s got a column on Friday that’s focused on innovation, and he’s got a column on Sunday which is really the traditional “Corner Office” column. They’re just phenomenal columns that give you insights into what other business leaders are doing to be successful and keep their businesses on the cutting-edge across a whole bunch of different industries and topics. I encourage you to check that out on Fridays and Sundays.

And like I said, we’re really lucky to get Adam here to give us these gems of knowledge that he’s gotten form all the different CEOs, the leaders that he’s interviewed. Adam, if you go to the next slide, I’d like to share with everyone, this is just a small smattering of the companies that Adam has had the privilege of interviewing the CEOs and the leadership floor. As you can see, it cuts across different kinds of companies. You’ve got University of Pennsylvania. You’ve got a lot of different types of organizations, consulting companies, consumer companies, technology companies, and companies that are known for different things that they’ve brought to the table.

And so in all of these interviews that Adam has done for his columns, he’s been able to put together two fabulous books and he’s a best-selling author. Most of you are familiar with “Quick and Nimble” because that’s why you’re here on the webinar today, is to hear about some of the insights that Adam has written about from CEOs on creating a culture of innovation. But if you haven’t read the “Corner Office,” I recommend it. It’s a quick read. I just found it to be a complete page-turner, fascinating to see within the minds of these really famous and infamous CEOs that have done some really innovative and different things to get to where they are today and to keep their companies on top.

But “Quick and Nimble” really takes that next step and really focuses on what we are all trying to do today with our companies is create these cultures of innovation and creativity and keep our companies on the cutting-edge, or “bleeding edge,” as technology people would say. So Adam’s going to share with you his insights. With that, I’m going to pass it over to Adam.

Adam: Great, many thanks, Sabrina. First off, thank you to everyone for joining us for this webinar and a big thank you to Sabrina and everyone at Palo Also Software for setting this up and the invitation. I’m really honored to be a part of this.

So we’re going to be talking about culture today. Culture is really a tough subject. It’s amorphous. It’s fuzzy. If we all stood in front of a whiteboard and said, What is culture?, we could probably put 100 things on the whiteboard and, thing is, they would all be right. And there’s a lot of other specific reasons why culture is tough to wrestle with. So let’s look at a few of them.

One is that I find theories and concepts about culture are for the most part pretty useless. If you just do a Google search or stick your nose in some books on culture, you’ll see a lot of diagrams like this which makes sense in the moment. You look at them, you go, yeah, that seems right, but you literally forget them five seconds after you’ve see them. And I think these diagrams sort of break the basic rule of stickiness where if it’s not sticky, it’s not worth your time.

Another problem that I’ve found with culture is what I call the Steve Martin Problem.

Sabrina: Adam, can I just interrupt for two seconds, some people are saying they’re having a hard time hearing you. If you can get your mic a little bit closer, I don’t want anybody to miss—especially now that we’re talking about one of my favorite comedians here.

Adam: I’ve turned up the mic and moved it closer to this, I hope that’s better.

Sabrina: Perfect, thank you.

Adam: Great. As I said, one of the problems with culture is what I’ve come to think of as the Steve Martin Problem. Just a reminder for everybody, Steve Martin made his name as a comedian years ago, that was before he became an actor and best-selling author, and now, a world-class banjo player.

But what I mean by the Steve Martin Problem, he did a skit years ago on “Saturday Night Live” where he had this riff for the audience where he said, “You can be a millionaire and never pay taxes.” And his basic point was this, How do you do that, Steve? And his answer was, “First, get a million dollars. And then when somebody comes to you and says you have to pay taxes on that million dollars, you say, ‘I forgot.’” And the reason I think of this in terms of when culture is often discussed is, you see a lot of this kind of silly logic at the core of a lot of writing about culture. Again, if you stick your nose in somebody’s books, you see things like, Well, how do you create a culture of teamwork? And the answer is, Hire team players. And to me, this is the Steve Martin problem, it might be true at some level, but it’s not really helpful day to day.

The third problem with culture is what I call the Michael Scott Problem, if you’re all familiar with “The Office” show. The real problem there is that this is every manager’s nightmare, right? Nobody wants to be thought of as Michael Scott. It’s natural for people to worry that if you start talking about culture with your staff, that there’s some risk you might sound like him. And obviously, nobody wants to do that. So I think a lot of people just figure, well, I’d rather just not think about culture and let it happen on its own.

The final thing that makes culture really tough to get your arms around is, let’s just say it, people are pretty weird. We’re all weird. I’m weird. You’re weird. Everybody on your staff is weird. And as you get more and more people in your company, the kind of weirdness factor grows exponentially. What that really creates is that these cookie-cutter solutions to culture don’t work, just like cookie cutter solutions don’t work for leadership. The whole notion of there’s one way to do it isn’t right from the get go. Leadership depends on your personality the personalities of the people you’re working with and the context. Are you in a turnaround situation, a growth situation? And the same is true of culture. Everybody is pretty complicated. Everybody is pretty weird. That’s why cookie cutter solutions don’t really work.

Here’s the thing about culture that even though it’s difficult to get your arms around it, you still have to think about it. Because if you’re not deliberate and thoughtful in creating a healthy culture, the kind that really fosters a sense of teamwork, you’re going to end up with a different kind of culture which is something that feels more like this where there’s a lot of infighting and people not working together.

I interviewed Tony Hsieh, the CEO of Zappos. He had some really memorable things to say about this. He talked about his experience at LinkExchange which is the company he co-founded before joining Zappos, when he wasn’t thoughtful about culture. I’d just like to read to you what he said to me in our interview.

He said, “When it was starting out, when it was just five or ten of us, it was like your typical .com. We were all really excited, working around the clock, sleeping under our desks, had no idea what day of the week it was. But we didn’t know any better and didn’t pay attention to company culture. By the time we got to 100 people, even though we hired people with the right skill sets and experiences, I just dreaded getting out of bed in the morning. And I was hitting that snooze button over and over again. I just didn’t look forward to going o the office. That passion and excitement were no longer there. That’s kind of a weird feeling for me, because this was a company I co-founded. And if I was feeling that way, how must the other employees feel? That’s actually why we ended up selling the company.”

Culture is like cholesterol. There are good and bad kinds, but everybody has it, one way or another.

To me, this is just a great reminder. I sometimes think of culture as almost like cholesterol. There’s good and bad kinds of cholesterol, but everybody has cholesterol. It’s the same way with culture in companies. You are going to have culture one way or another. The only question is whether it’s the good or the bad kind. Your job as leaders is to try and really build up the good kind of culture and tamp down the bad parts of culture. So culture is clearly important.

So let’s get back to basics on where my book, Quick and Nimble, really started. This is really the spark that led me to start thinking about culture and what ultimately led to writing the book. In my interview with Dominic Orr of Aruba, he said, “We aspire to be the largest small company in our space.” And I thought that was such an interesting thing to say. Obviously, he meant largest in terms of revenue and smallest in terms of holding on to that start-up culture.

And I started this noticing this theme elsewhere, too, after Dominic told me about it. When Larry Page announced in January 2011 that he was taking over as CEO, this is what he said. He said, “One of the primary goals I have is to get Google to be a big company with the nimbleness and soul and passion and speed of a start-up.” The more I thought about it, I just became really intrigued by this notion and got me wondering, how do you do that?

And that led to what I think as a better question which is what are the biggest drivers of culture? Because I was trying to focus it to get beyond that whiteboard problem that I described earlier, again, if we could come up with 100 things that are culture, they’re all right. But you have to focus it in a more specific way to ask the better question. What are the biggest drivers of culture?

And then I refined that question a little bit more to ask this one which is what are the things that if done well have an outsized positive impact and if done badly or not at all, have an outsized negative impact? That was the question really that became the basis of my book. And analyzed the transcripts from more than 200 interviews I had done, really trying to figure out what those biggest drivers of culture are, the things that would apply to any company regardless of its size, whether it was 100,000 people or just five people, whether it’s a non-profit or for-profit. And I tried to make that list as short as possible, but also specific. That was the task I set for myself.

What I really like to do in this webinar is run through the first half of the book which is a section I call “Setting the Foundation”, because I consider these things really the must-haves for an effective culture. Really, again, regardless how big your company is or what kind of organization you run. And there are six things that I found. And as I run through them, I really like you to reflect on your own companies and organizations and think about how you’re doing on these fronts.

Let’s start with the first one which is what I call a “Simple Plan”. I know that sounds simple, but simple is hard. The reason a simple plan is so important is that if you want the people who work for you do more than just show up for a job, and if you really want to grow your company and make people feel part of that effort, you have to be able to answer a very simple question. And it’s the kind of question kids ask their parents as they set up on some journey which is where are we going and how are we going to get there?

I think as leaders, it’s their responsibility to answer this question and to be able to stand up and really explain what the goals and priorities are. And to make that list very short, I really believe it shouldn’t be more than three things in terms of the goals. If you read books about neuroscience, the science is pretty clear. We generally can’t remember more than three things day to day, maybe four. If you’re going to ask people to remember more than that, you better have really great advertising jingle. That’s why everybody can remember the Big Mac jingle about two all-beef patties, special sauce, etc. But generally, three, to me, is the magical number. Even two is better.

Sabrina: Adam, we have a great question here right now from someone about this. It’s interesting, because I hear this all the time as well at our company. And people say, “Okay, you want us to do a plan where I’m supposed to figure out something that I don’t know yet. You want me to figure out where I’m going with my business, and I just started it.” The question the person on the webinar has is how do you deal with something if there’s a lot of uncertainty? If you’re in a start-up, if you’re trying to get somewhere where you’re not sure if where you’re going is in the right direction.

Adam: It is hard. I’m not saying it’s easy. I do think you have to come up with some hypothesis and hit that sweet spot of being specific enough so that it does feel meaningful and not hemming yourself in to the point where you’ve made it so specific where it breaks down after the first week of launching your company. I do think, after interviewing more than 300 leaders, I’ve really come to appreciate that at the end of the day, almost anything that’s hard, especially around leadership and culture and things like that, it’s all about hitting the sweet spot between two opposing forces. I think everything that’s hard in life is almost a paradox at its core. And whether its leading people or managing people, there’s usually some balance point that you have to hit between what seem like opposing forces.

If you’re a manager, you have to be friendly, but not friends with people. It’s hitting that kind of sweet spot. And again with a simplicity notion, you have to hit that sweet spot that feels right based on where your company is in its trajectory of how specific you’re going to be. But I think you have to have a plan. It’s hard taking out a blank sheet of paper and just brainstorming , but I think you have to start with that. If Eric Ries were on the phone with us, he’d say, “Yeah, come up with a plan and then hit it based on the feedback you get from the marketplace.”

Sabrina: Thank you. And I think that’s great advice especially that idea of a simple plan, so that you don’t really tie yourself into something too complicated and too detailed and that idea of pivoting. For those of you who don’t know who Eric Ries is, you should Google him and take a look at the Lean Startup, because it’s a very interesting methodology to help you be lean.

And then Adam, a few people are still saying you’re a little soft, so I’ll just remind you, if you can, just be as loud as possible.

Adam: Okay, and I’m moving the microphone up even more.

Sabrina: Great. Thank you.

Adam: Sure. As I was saying, the importance of the number three and there’s a great expression from Jim Collins, the great author who said if you have more than three priorities, you don’t have priorities. I think that’s a good thing to keep in mind.

Again, about these goals as your simple plan, they should be measurable, so you should track the progress and also celebrate wins when you hit certain benchmarks. I think it’s very important for people inside the organization to celebrate those small wins.

I also think this speaks to a fundamental truth about how we’re wired as human beings which is that I do think people want to contribute. They want to be a part of a team. But it’s the leader’s job to provide that simple score board so they can see how the team is doing. And here’s the important part, so that they can understand how the work they’re doing contributes to those goals. If people are doing work and they don’t really understand how it helps that scoreboard, then the culture is going to start breaking down.

This is a theme that came out in a lot of my interviews. There’s woman named Tracy Streckenbach. She’s a consultant who goes into companies and operates as CEO or COO. She doesn’t just jump in or jump out. She goes in for longer-term engagements. She said her biggest task when she goes into companies is to figure out the right things to focus on. This is what she told me. She said, “In my current company, it took me six months to clearly define the right goals and how to measure them. But once you get it right, you see this change in people. They want to get the job done. It’s also devastating if you get them wrong, because then you’re encouraging the wrong behaviors.” This really speaks to that expression from Peter Drucker that I’m sure many of you know which is “What gets measured, gets managed.” That’s why you have to be so careful about what you’re actually measuring, because if you measure the wrong things, then again, you’re incentivizing the wrong behaviors. You’re probably thinking, Adam, show me some examples. So let’s look at a couple.

Shiva Subramaniam is the CEO of FM Global which is an insurance company. It’s not a radio station. And these are the three things that he uses to run his company. He’s very transparent with his staff and what he calls key result areas, the KRAs. They’re simply profitability, retain existing clients and attract new clients. That’s what they measure and they share all that information with the staff. And he said everybody around the company knows these. And this is what he told me. He said, “Whether they’re the most senior managers or file clerks, they know that what I do helps the key results areas.”

And again, that’s the point. If you have that scoreboard, that’s why sports is so simple. Everybody knows what the goals are. And everybody, whether they’re playing offense or defense, can feel like they’re contributing to that. You want to create that environment in your company.

Let’s look at another example. Joe Jimenez who runs Novartis, he established these three goals for his companies: new compounds approved, converting them into sales, and profitability productivity. This is what he told me in our interview. He said, “When I first became CEO of Novartis, I said we have 120,000 people. The first thing I have to do is to have people understand where I’m going to take the company. And I have to crystal clear. And everybody in the organization has to understand it. They have to have lines of sight to that goal. And they have to understand how what they’re doing is going to help us move into the future.”

One important reason to have this simple plan is that it guards against siloed behavior and silos are deadly. As Chauncey Mayfield told me, he said, “I firmly believe silos ultimately destroyed my company.” He added in our conversation, he said, “I’ve seen this in other companies where people start to build silos, and the only thing that they really care about is what’s going on in their silo. So this silo is not working, but that silo — and now you have almost warring factions within companies. They have no desire to work with each other, because there’s no downside for not doing it. And you’re not incentivized to do it. That is probably one of the biggest challenges I face, how to make sure these silos aren’t built up.”

You see this theme come up in headlines all the time about, very often, big legacy companies, older companies, they go through this massive reorganizations, because they recognize they have this silo problem and they’re trying to create a much more of one-culture Company. So that’s the importance of a simple plan.

Let’s look at Number 2 which is what I call “Rules of the Road” which is essentially about the values of your organization. And every company has values just like all your families have values. They might be stated or unstated, but they’re just kind of certain behaviors that are encouraged. And there are certain behaviors that are not tolerated.

The problem with any discussion of values is that it can really make people roll their eyes, right? I could easily call up that Michael Scott slide from earlier in the deck, because it’s really easy to imagine him coming out of his office and announcing to the staff, you know, he’s got new values and excellence, integrity, results, and everybody just groaning. And that’s why I think a lot of people choose not to wrestle with this whole challenge of how do you put in writing what the values of the company are, because everybody’s worried about that kind of blowback and making people roll their eyes.

There is a wrong way to do it. I think, very often, bringing in consultants from the outside to help you through this exercise can lead to things that sound like excellence, integrity, results that don’t really capture the DNA of your company, because to me, that’s what values are about. They really put into words and into writing the DNA of your company.

This is how Robert Johnson talks about values. He says, “The culture is almost like a religion. People buy into it and they believe in it, and you can tolerate a little bit of heresy, but not a lot.” So again, let’s look at a couple of examples of values that I’ve come across that I thought were interesting.

This is from Rob Locascio of LivePerson. He went through this exercise where he took his entire staff to an offsite and they came up with a list of 40 of them. And they kept forcing themselves to say well, how can we make this a little shorter? And they kept whittling it down, until they came up with just this two which is be an owner and help others. And again, it’s wonderfully simple. It’s completely memorable. And also, I think, captures a lot. I remember, shortly after I interviewed him, I was in some antique store with my wife and I saw one of those signs that you put over your door in your kitchen, whatever, and it had “Work hard and be nice”. And I thought, boy, at the end of the day that really captures it.

There’s an important point about values which is that if you go through the exercise of coming up with values, you don’t have to capture the full universe of all the values you want, of all the behaviors that are out there. You just have the ones that matter the most to you, the ones that you feel really define your company.

For all the leaders that are on the webinar right now, you have to ask yourself, if you left the company, what would be the values that you would want to continue on, so that 10 years, if you went back to the company, it would still feel like your company. That’s a good way for framing the question, what is the essential DNA of your company?

Sabrina: Adam, I just wanted to jump in, because as you say all of this, and as a CEO myself and trying to struggle with culture and value of the company, and I don’t know why it’s never occurred to me, before but somebody also was asking a few more questions and we’ll get to some of those at the end, but as you talk about all of this and have all this advice from other leaders, I keep thinking to myself that it’s the same sort of ideas that my husband and I have in my mind when we’re trying to teach values to our children. Things about how we want them to act around other people and the values that we want to raise them with are oftentimes a lot of the same values that we want our company to have and our customers to know about us.

Adam: That’s exactly right. One of the things that has really become clear to me as I interview all these leaders and think about culture is that a lot of people – it’s a natural tendency in business, especially with academics and business that we often try to put a very theoretical or conceptual or analytical overlay on business. We want to make it more of a science than anything else.

What I’ve really come to appreciate is that you have to understand culture and business at a very human level. It’s about relationship. It’s about how people interact with each other. It’s about the quality of the conversations that people have with each other. And it’s also kind of recognizing that even though all of you are employing adults, I think it’s helpful to think of them as essentially grown-up children and that it’s your role to create those kinds of values that you would want in your families. We’re going to talk a little bit more about that later on, but I think that’s a great point, Sabrina.

Let’s look at another example. This is from Brad Garlinghouse who runs Hightail which used to be YouSendIt. But these are the three ones that he came up and I really like these, because they’re memorable, too. Be in, which means be committed. Be real, which is be authentic when you communicate. And be bold, be a risk taker.

Another really key point that I want to make that is I think what matters the most with values is that you have to live by them every day. If you’re not going to, it’s better to not even go through the exercise, because you can hit this problem which is creating cynicism within the company.

I interviewed Kathy Savitt when she was the CEO of Lockerz, before she became the CMO at Yahoo. She had some really great thoughts on this. I just want to read you a couple of paragraphs. She says, “I think it’s easy for people at many companies to become cynical which then leads to politics which can create a cancer that can topple even the greatest companies. And so when there’s a disconnect between the poster on the wall of your values and what the CEO says is the value and how people really act, really act day to day, that’s going to make people instantly roll their eyes.” And again, this is from Kathy Savitt, she said, “I do think cynicism is that first cell, so to speak, that can metastasize within an organization when you feel a company is not actually living out its core values.”

A good example is when a team member has a great idea or has a big issue with a customer experience and no one responds. No one even acknowledges it. No one gets back to them. The idea festers. Problems continue to mount. No one listens. How does that person not become cynical? That’s a recipe for cynicism. Again, if you’re going to go through the exercise of coming up with values, you have to live by them every day, otherwise, it’s probably better not to do it.

So let’s move on to Number 3 which is what I call a “Little Respect”. If you’re going to have an effective culture, if you want people to bring their best self to work every day, this expression comes up from a lot of the CEOs I’ve interviewed. If you want people to bring their best self to work, then you have to treat them with a little respect, because otherwise, they’re going to come into work in a kind of defensive crouch.

There’s probably a good chance that many of you have been dissed or humiliated by a boss in the past. If we were all together in a room, I’m sure a lot of hands would go up. And if you’re like me, and it’s happened to me several times, you can probably remember that moment like it was yesterday. And there is a reason for that. If you look at a few books on neuroscience, you’ll find out that being treated badly by a boss, particularly in front of others, in front of your colleagues, that fires up the same part of your brain as physical pain.

That explains why so many of the CEOs I’ve interviewed refer, when they tell me about these experiences they had early in their careers with bad bosses, they always use the same phrase, they say that was scar tissue for that. And so it is real scar tissue, except it’s a bit different. There’s an interesting distinction which is you tend to forget physical pain over time, but it’s different.

This is from David Rock who runs the NeuroLeadership Institute. He says, “If your boss disses you in front of a team, every time you remember that for the rest of your life, you feel that pain again. And that scars you.” It’s pretty remarkable, years after you might have had a horrible experience of being humiliated in front of your colleagues by a bad boss, if you start thinking of it, all those emotions would come back, whereas if you’ve had some physical pain years ago, it’s sort of harder to remember that. It’s more of a distant memory.

So you’re not going to get people to bring their best selves to work if they have to be in this defensive crouch, worrying that if they stick up their hand up in a meeting to suggest an out of the box idea, that they’re going to be humiliated. You have to create an environment where people are treated with respect.

And the best simplest way I’ve come across to create that culture is with this expression: MRI. This is not a medical procedure in this context. MRI stands for “Most Respectful Interpretation” and it’s just a great shorthand. What it means is if somebody says or does something that you don’t understand, it really makes you kind of scratch your head and think through, and say what were they thinking? You don’t immediately assume that they don’t get it or some other negative interpretation of why they didn’t do it. Instead, you assume the most respectful interpretation. Maybe the instructions weren’t clear. Maybe there was something else going on. And by the way, MRI, back to Sabrina’s point about families, this is a great rule of thumb for any relationship.

Now you can’t have a culture of respect in a vacuum, so that people will be shown respect no matter what they do. I think of it as two-way street and the other part of the equation is what I call “it’s about the team” which means you have to play your position in a company and you’re going to be held accountable for playing your position.

You’ve probably heard a lot of leaders describing their company as a family. And the impulse is right. You really want to set a culture where people care about others and you care about everybody’s extended family. Again, the impulse is completely right. But what I have heard from a lot of CEOs is using that expression can also send the wrong signal, because in a family, bad behavior is tolerated.

Here’s how one leader I interviewed dealt with the issue. This is Linda Lausell Bryant who runs a non-profit for teenage mothers. She said when she took over, she heard a lot of talk about the family culture. And it got her a little frustrated, and she said to her staff in an all hands meeting, she said, “We’re not a family, because in a family, you can never fire somebody like your Uncle Joe. We’re a team and everybody’s got a role to play.”

What are some of the positive steps you can take to create a culture of teamwork? The next CEO offers, what to me is a really good building block of teamwork in an organization which is don’t say you’re going to do something and not do it. This is from Steve Stoute who runs Translation which is an advertising agency. He says he has this simple rule. He says, “I hold people accountable for everything that comes out of their mouths. Don’t say you’re going to do something and not do it.”

If any of you have a few gray hairs like I do, the longer I live, the more I find myself thinking about this that this is a very simple dividing line for everybody you work with. There are just some people who they always deliver. If you ask them to do something, you know they’re going to deliver. If they say they’re going to get you the report by 5:00, Thursday, you don’t even have to think about it anymore. It’s just automatic. It’s money in the bank.

And then there’s a lot of other people who say they’re going to get you that report by 5:00 and you just know they’re not going to. And then it takes up all this sort of psychic energy and time saying when should I bug them? If there’s something going on in a day or two, when should I follow up? And it’s all that kind of thinking that if you spread across the entire organization, really slows down the company, and it makes you the opposite of quick and nimble.

So just that very simple rule if you establish is, don’t say you’re going to do something and not do it, I think that can really speed up the culture, because everything’s very fast and you don’t have that lag, you don’t have that horrible delays.

So let’s review these last two points. Again, because I think of it as like a two-way street in my employees, it’s the boss’s job to treat people with respect, but you also have to hold people accountable so they play their position. And you can say that makes perfect sense in theory, but you’re always going to have tension and rough spots day to day.

Which leads me to Number 5, which is what I call “Adult Conversations” or call them frank discussions or difficult conversations. The fact of the matter is that most people in corporate America do not have these kinds of conversations. They will go out of their way to avoid them. This is when the powers of rationalization kick in. If somebody does something, you might say, “Oh, it was just a one-off, they were having a bad day. I’ll talk to them later about it.” They do it again. You say, “I really should talk to them, but I’ve got 100 emails to get through.” And then suddenly, you’re nine months later and you’re bringing it up in their performance review. And that can just make it worse because their head is going to explode. They have the right to be angry that you’re bringing up something nine months later.

I get it. I’ve been a manger myself for many, many years, and these conversations are stressful. You can feel like you’re stepping into a knife fight in a phone booth. And I understand why people want to avoid them. David Rock, the NeuroLeadership guy we had a few slides ago, he said that in performance reviews, the same part of your brain lights up as if your life were in danger. So when you get called down to your boss’s office and you close the door for your performance review, your brain is thinking your life is in danger. That’s how stressful they can be.

So let’s talk about how to have these conversations. The first one is captured in this expression which is “Don’t go over the net.” It’s a metaphor from tennis or volleyball which means you can’t go over the net and make assumptions about somebody’s motivation.

So, what do I mean by that? Let’s just role play conversation. What you don’t say is “I notice you’re showing up 20 minutes late every day. And it seems like you don’t care.”

So, if you’re having that conversation with a person, they’re going to get their backup and they’re going to say “What do you mean I don’t care? How dare you say that?” But if you stay on your side of the net, this is how you have the same conversation. You say “When you show up late, it makes me feel like you don’t care.”

And then, they can’t argue with that because you’re just talking about how you feel and how you see things. So, you’re staying on your side of the net. It’s a very simple and small, but subtle thing. But it can have huge impacts because it makes people a little less defensive and a little less angry.

The other trick about feedback is to make it in the moment. Carol Bartz, who used to run Yahoo!, talked to me about what she calls the puppy theory of feedback. Puppy pees on the carpet, you don’t go back to the puppy two days later and discipline the dog for peeing on the carpet. Because they’ll look at you and say “What are you doing?” And you should keep that in mind with your employees. Just do it in the moment, follow the puppy theory.

I interviewed Seth Besmertnik of Conductor which is a search engine optimization company. And he was really thoughtful about this topic. He said “When I first start working with someone, I say ‘Hey, I really like to give you feedback. It’s my job to give you feedback.’”

A lot of bad patterns happen when you go for really long periods without giving people feedback. And it just bottles up. They’re so used to not getting any feedback that when they get it, it’s this huge deal. If you get into the rhythm of giving feedback, they kind of get used to it and desensitize to it. And to me, that’s really the key phrase. If you give people a lot of feedback, then they get desensitized. And Seth said, “If you’ve got something on your mind, don’t let it drift.”

So, the final thing, which is a small thing, but with big implications to me, is what I call the hazards of e-mail. E-mail is a huge problem for corporate culture. We think it’s this great productivity tool. But in fact, it can often be incredibly damaging. I don’t how many of you have seen this play out, where you send somebody what you think is a really simple and clear e-mail, as if you were writing the sky is blue and the ocean is deep.

And then they send back this weird response. Which makes you wonder “What were they thinking about what I was saying?” And then you start getting angry and you roll up your sleeves and start writing a rocket to just send back to them.

And this kind of stuff goes on all the time. And Steve Stoute really captured the problem with e-mail. He said “Simple conversations around tasks and teamwork get lost in translation” if you’re not speaking to the person and you’re just texting or e-mailing. Again, I love that phrase “Things get lost in translation.” I think that really captures it.

The other problem with e-mail is it taps into this what I feel is this really bad neighborhood of our brains. And that neighborhood is the part where we feel like we have to have the last word in a conversation. And this really becomes a problem when people start copying, CC-ing others on e-mail. People start picking sides and then suddenly, you’ve got a brawl inside your own company.

So, what are some rules for e-mail that I’ve heard? One is “No arguing after two e-mails.” Just no back and forth. We can have one round of disagreements, but then, you have to pick up the phone, get on Skype. Or, golly gosh, walk down the hallway and talk to somebody in person. I’ve heard some variation of this rule from a number of CEOs.

Another good rule is no e-mail when anything is at stake if somebody could possibly misinterpret what you’re saying. E-mail is great for simple, fast, transactional stuff. But if there’s anything at stake, it’s better to have that conversation in person.

This is a rule from Jeff Weiner of LinkedIn which is “Send fewer e-mails.” Everybody says “I have to send e-mails, I get so many of them.” And his rule is “Send fewer of them” because then, you’ll get fewer of them back.

And also, some companies discourage the use of CC because a lot of people use that just to sort of cover their posteriors with their boss. And some CEOs I’ve interviewed have told their staff explicitly. They said “If I see my name CC’d in an e-mail, I promise you, I will not read it.” Because the CEOs, they just want people to talk to each other and again, not cover their posteriors.

I’ve heard a couple of other interesting rules about e-mails. One CEO tells his staff “Your e-mails cannot be longer than an iPhone screen. Because if they are, if I have to scroll down, I will not read it.”

There’s another interesting thought experiment I heard, which is that if you can imagine that e-mail was invented back in 1876 instead of phones. If e-mail was invented back then and then, they invented the phone in 1971, which is when e-mail was first done. What if we flip those? Can you imagine that? If we communicated by e-mail for decades and then somebody invented the phone, we’d all be going “This is miraculous.” You can hear everybody’s tone. And it’s just a so much higher bandwidth form of communication. So, that’s a good thought experiment to keep in mind.

So, these are the six rules. I really encourage everybody to take 15 seconds just to think about what kind of grade you would give your own organization on these six things. How would you grade your company’s performance on these?

And before we get to questions, I heard a really interesting insight from a guy named Mike Sheehan who’s the CEO of Hill Holliday, the ad agency. And he said “At the end of the day, there’s only two kinds of cultures. One is based on insecurity, fear and chaos. And one is based on a firm platform where people are worried about their work.”

And to me, that’s the real test of culture. It also points out another paradox about culture is that every company wants to be quick and nimble. But to me, the paradox is that you have to have a really clear and firm culture, that kind of firm platform, so that it’s almost set in stone. But because of that, then you can pivot really quickly as you need as a company. So, I thought that was a good, kind of, step-back test for really thinking about what difference culture can make in a company.

So, that’s the presentation. I’d really love to hear questions.

Sabrina: Great. Well, we have some questions that have been asked here, so we’ll start off with a fun one. Somebody wants to know “What are the most unusual perks you’ve heard that leaders have implemented in their companies? And have they worked?”

Adam: Sure. It’s an interesting question. One of the other things that I have come to understand is that if you are a CEO of a tech company, you essentially have two main jobs. One is to recruit talent. And the other is to retain talent.

Because I don’t need to tell all of you, but there’s a supply/demand imbalance. And really great software people and engineers and coders. So, it’s your job to recruit those people because everybody wants those same A-players.

But then, as soon as you get them in your door, you have another job which is to hold onto them. Because every day, those people are getting headhunted. So, you really have to create an environment where people want to stay. And do that with more than things like stock options and a 30-inch computer monitor.

So, I’ve heard some interesting perks and benefits. Phil Libin, who’s the CEO of Evernote, told me this story. He asked his wife, who also worked at the company, “What can I do to hold onto people better? What would be a good thing to help with retention?” And she said “Housekeeping.”

So, what they do, what Evernote does is twice a month, for every single Evernote employee, they pay for housekeeping for their entire staff. And I thought that was just brilliant because a lot of retention comes down to…if somebody’s got a spouse–boyfriend, girlfriend or partner at home–you can just imagine the kitchen table conversation where somebody’s thinking, might say “I’m thinking of leaving Evernote.”

And you can pretty sure that their spouse or partner, boyfriend or girlfriend, is going to say to them “I really like a clean house or apartment. I don’t want you to leave that company.”

So, it’s that kind of out-of-the-box thinking that I’ve heard from a lot of tech companies that are trying to win these talent wars.

Sabrina: I love that. And I love hearing about perks that are unusual. But I feel like really make a difference in someone’s life outside of the business. Because too often, I think, especially tech companies, I hear about all these perks that are about “My cafeteria has the best burrito” and “We’ve got dry cleaning right here, so I never have to leave.”

And I feel like some of those perks are about keeping an employee at the office for as long as possible. And they’re not necessarily real perks. So, I love that Evernote one.

All right, there’s a lot of different, great questions here. There’s one question that somebody has that actually ties into another one. There’s a lot of interest about culture and how do you create an authentic culture? How do you make sure that it’s not artificial and something that you’re just trying to make everybody do? How does it really become authentic?

Adam: It’s a great question and I think culture starts at the top. I think just the way we’re wired as human beings. And I often think that humans are not that far removed from lizards. So, I often think about just how organizations at kind of the lizard brain level.

And to me, it all starts with the leader. Because if at an all-hands meeting and the CEO is standing up in front of everybody, I think–again, just as human beings–we have an incredible antenna for picking up whether the person really believes what they’re saying.

And I know the words that are coming out of their mouths. But I just think that we have a really great ability to detect whether this person really believes what they’re saying.

So, I think for culture to be effective, it’s got to start at the top. And the person has to truly embody the values if you’re going to go through that exercise. They have to embody them at a personal level, not just the things that they want. Because everybody watches managers and leaders for the tiniest little cues. If they see some ever so slight gap between what the person says and what they do, that’s going to start that cynicism. That first cell of cynicism that Kathy Saba [SP] talked about.

So, to me, that’s the key test for authenticity. For all the leaders that are on the webinar and you think about culture, it’s got to feel like you’re living in the pores of your skin. Because if you’re not, people are going to pick up on that.

Sabrina: Great, thank you, Adam. That was, I think, a great question. Actually, I think it addresses quite a few questions that a people have.

There is another question from someone who is saying that… she runs a small business. And sometimes, her team members see and her frustration that she has when she’s working on something complex and challenges with clients. And she tries to create a teachable moment, but really, they’re seeing her maybe at a moment of frustration and maybe even, you know, being upset with a client.

And she’s wondering if you think that it’s okay to be that transparent when you’re frustrated and upset. If it can be a teachable moment, or if she should restrain herself?

Adam: I think you have one of two options. One is to try and hide that frustration and go for a walk around the block afterwards. Because leaders have to understand that everybody is watching you and it’s your body language. Are your shoulders…is your brow furrowed?

I mean, they pick up on all those signals. And it is a leader’s job to create a sense of confidence. Starting and running a business, I don’t need to tell all of you, is like a roller coaster, right? And you have ups and downs and I think its part of a leader’s job to sort of even that out and to give that sense of steady confidence. So, that’s one approach.

Another approach which I think is just as valid, is to be completely open and upfront and over-communicate with your staff. Where you say to them “Look, I get frustrated sometimes. That’s who I am.” And rather than hiding that, I want you to understand that this is who I am, but to not think that it’s any more of that. And if there’s a broader point that is worth sharing with the group, I will do that.

But I think the more you can demystify who you are as a leader by over-communicating. This goes back to my point at the beginning. We’re all weird. We all have our quirks, our pet peeves. The things that make us really frustrated. And I think the more you’re open with your employees about those things, I think that will take some of the stress and mystery out of the process.

I’ve interviewed a couple of CEOs who literally share with their employees what they call a “user’s manual” of their leadership style. Where they put on a page, essentially, “This is what you need to know about me as a leader. These are kind of my quirks and my pet peeves.”

And I just think that’s a great impulse. Because, again, the whole goal is to demystify the process, so that people can think about the work, rather than “What kind of mood is the boss in today?”

Sabrina: That’s great. And I think it ties into this question that somebody has. Maya wants to know “If you’re not the leader, if you’re not the CEO, how does a company or an individual employee let the CEO know that maybe there’s some cultural deficiencies? What are the ways that a CEO can work with employees and listen to employees? But if you’re that employee, how do you tell that CEO? And maybe without the fear of getting in trouble of criticizing?”

Adam: This is a really tough question. And I would hope that your company has some kind of mechanism. Some kind of suggestion box or place where people can give feedback anonymously.

I get a lot of e-mails from readers saying “I have a really bad boss” or “I work at this bad company where the culture is dysfunctional. What do I do?”

I wish I had a better answer for you. Because the problem is if the leader is not setting the tone, where they’re open to feedback, they want to talk about culture, it’s hard to get that message through. My only advice is try to make the best of it in your sphere of influence for the people you work with in your company.

But is a tough situation if you’ve got a bad leader. I am sympathetic.

Sabrina: I agree, Adam. One of the things that we did here at Palo Alto Software, maybe that’s a suggestion for Mario, for your boss, is we created an employee committee, we call it the “Live Well” committee. And we’ve got two representatives from each department on the committee. It’s all volunteer.

Once a week, they go out for lunch and we pay for their lunch. And they basically bring to the management team, things that employees would like to see us do. Everything from “Change who we have for the coffee,” to “We want to volunteer at the Boys & Girls Club,” to “Let’s have Trivia Night on Friday night.”

And all of this is what we’re trying to do as a management team to make sure that the employees have a say in benefits and culture and things that we do. So, it’s new for us and I feel like it’s working. But I thought I’d throw that out there because maybe that’s a way to approach your boss that’s not too confrontational.

Okay, and then, Adam, we’re at the top of the hour here. There are a lot of other questions. So, we may just touch base with you at the end. Maybe in the next couple of days if we do the transcript and get this webinar ready to get sent out in case anybody wants to share it.

So, maybe we’ll get a few more of those questions answered when we e-mail out the webinar. But I really want to thank you, Adam, and thank all our attendees. I think it’s been extremely useful.

I have read the book and I loved it and I read “Corner Office” as well. What I also love is that it’s just such an easy, quick read because I’m just fascinated by what other people are doing and how that’s worked for them.

So, with that, I will thank everybody and thank Adam. We really appreciate Adam, you bringing all this great knowledge to us.

Adam: Again, Sabrina, thank you to everybody for logging on today and joining us. Thanks to everybody at Palo Alto Software. Sabrina, Caroline, Sean, for making this happen.

Sabrina: Great. Thank you all.

About the Author Caroline is a two-time technology entrepreneur. She's co-founded and held the CEO position for two internet companies, OsoEco (social bookmarking/shopping site) and RealLead (mobile marketing for the real estate industry). Follow Caroline on Google+. Read more »

RATE THIS ARTICLE 1 Star2 Stars3 Stars4 Stars5 Stars
Loading ... Loading ...

How LivePlan makes your business more successful

LivePlan: Online Business Planning Software

If you're writing a business plan, you're in luck. Online business planning software makes it easier than ever before to put together a business plan for your business.

As you'll see in a moment, LivePlan is more than just business plan software, though. It's a knowledgable guide combined with a professional designer coupled with a financial wizard. It'll help you get over the three most common business hurdles with ease.

Let's take a look at those common hurdles, and see how producing a top-notch business plan sets your business up for success.

Click to continue