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The Next Level: Where the Happy Talk About Corporate Culture Is Wrong

May 8, 2013 by Leave a Comment
The Next Level

Avoiding the pitfalls of fast growth.

“Tell me something I don’t know,” is what I think every time I see another article, blog post or book on the value of happy employees. And here is what I find disturbing about these happy-employee propagandists. They are mostly off about what it takes to motivate employees and keep them happy in a fast-growth culture.

Don’t get me wrong — I want happy employees, too. But I think there are two types of happiness in a work culture: Human Resources Happy and High Performance Happy. Fast-growth success has everything to do with the latter and nothing to do with the former. Unfortunately, 99 percent of the discussion and solutions are focused on Human Resources Happy.

Here’s how I define H.R. Happy: Bosses are at least superficially nice and periodically pretend to be interested in employees as people. These employees can count on birthday-cake celebrations and shallow conversations about what their hobbies are outside of work. This approach allows H.R. people to do the job they love — compliance and regulations — instead of the job they should be doing — finding and recruiting the best available talent.

And this may work in a call-center environment or in a second-rate corporate culture where people resign themselves to the fact that they will get more if they accept being treated like children. But these H.R. Happy employees can have a rough time at fast-growth companies when they meet people who are High Performance Happy. Think of an Olympic athlete jumping into the pool for those 4:30 a.m. laps. High Performance Happy is an attitude with a skill set that says we are on a mission that is bigger than any one of us. We find our happiness in being on a world class team that is making a difference.

H.R. Happy says we should do what pleases us first — bring your dog to work! High Performance Happy says I will fight for every inch. I will be there at 4:30 a.m. no matter what and until the last dog dies. Respect is core to the success of High Performance Happy, and it is based on what you are giving not on what you are taking. For example, if one person has a sick child, we all have a sick child, and we all give more that day. And this is why High Performance Happy builds deeper bonds.

In the movie “American Beauty,” Annette Bening played Carolyn, the personification of Happy H.R. Set aside her bedeviled husband, and no matter what was said to her, she felt compelled to say something positive, even though it was as phony as the eyelashes she batted. But that is what the H.R. propaganda teaches on how to build a company. Be nice to people and they will work hard for you. But , by the way, that was not the approach at successful companies like UPS and Apple, which magnify the outcomes of the high-performance elite and obliterate the happy talk.

Steve Jobs was well known for his rants about time-clock punching morons, but his high performance elite got better not bitter. Why? Apple’s mission — making technology cool — was far more important than a few harsh words or even a little immaturity. And before its founder passed way, UPS was a great example of high performance elite with an almost military culture. At UPS, performance reviews were called “agent orange” because they were orange in color and dreaded if you had not met or exceeded your commitments. Back in the late ’80s, UPS was disciplined by the Occupational Safety and Health Administration for being too hard on its management employees at its six-week, basic-training school for supervisors. I attended it, and let’s just say it was taxing. The company ended the program shortly thereafter. On the other hand, UPS managers often had to be disciplined for working too many hours, week after week. Why? We truly believed that the American economy depended upon our moving packages from point A to point B.

High Performance Happy means you give employees tremendous responsibility, and they are happy to show that they are the best. You don’t have to con them into doing things with a flavor-of-the-month methodology that suggests they will only perform if you make them happy first. H.R. Happy says, I want you to think that I like you. High Performance Happy says, I believe in you. Here are the guideposts for building a High Performance Happy culture.

First, you can’t hide the duds the way you can in corporate America. If high performance is level 10, then duds aren’t the two and threes who are quickly shown the door. The duds are the fives and sixes who are the happy slackers — the ones who do just enough to get by, but hey, they’re happy! They befriend the boss, love meetings and are the first to check the scores and Facebook when they get back from lunch. Their H.R. Happy habits will do one of two things — bring the high performance elite down to the middle or push them out the door. The duds have to go. Today.

Here’s what you tell the high performers. Come spend time with us if you want to do something special. Don’t take it personally if you get yelled at for something you did not do. Get over it, and I am sure we will apologize when we find time. If you ask for help, we will be there. If you do not ask for help, we will assume that you are performing in a blaze of glory so be ready to show it. Don’t tell us later that you were confused or did not agree with what we were doing. You can say whatever you want to whomever you want when the decision is up for discussion — and this will be encouraged in many formats, from quick huddles to day-long strategy sessions. But when the decision is made, you march with the decision and not with what makes you happy.

High Performance Happy does not like a lot of unnecessary processes and rules, which is why entrepreneurs have to let high performance people make decisions. If you trust them with your mission and with hundreds of important daily choices, you can also trust them to handle their vacation schedule, their paid time off, and the tools they need to get the job done.

High performance organizations do not hire family members. That’s because it’s very hard to fire family, and you have to earn your spot in a high performance lineup every day. Here is the deal: I love your work if you are making the plays. If you are not, I have to find someone who can.

In High Performance Happy, you cannot have people behaving like liberal Democrats or right-wing Republicans. It has nothing to do with politics. In fast-growth organizations, life is not fair every day, and you can’t have liberals running around trying to make sure everything is equal and no one is offended. I am sorry but there are going to be days when not all is equal and someone is offended. We always try to go back and make it up, but there are times when you have to take it for the team — and not bring it up three years later at a company meeting.

But you also don’t want right-wing types who really don’t understand how the world works and lack the emotional intelligence to get over anything that bothers them. If they think somebody got more than they did, they stew over it every day until you give them more. Again, I am sorry, but in fast growth there are times when one group gets more than the other. “Get over it” is the natural response in a high performance environment. Of course, that would be considered the height of hypocrisy at an H.R. Happy company.

The toughest part of High Performance Happy is dealing with the exit of a high performance employee. What do you do when one of the chosen chooses to leave? First, you ask if there is an issue that you have not discussed. Then you ask if there anything you can do. If the answer to both questions is no, and the employee is just leaving to go to another team, the person exits with a thank you. No good-bye parties. No H.R. exit interviews. No farewell dinners. The person is gone, and the quicker the better.

But here’s the flip side. When it comes to lay offs of high performance employees during downturns, you simply cannot do it. You have to figure out other ways. In 2001, after the dot-com crash, my information technology company lost about 20 percent of its revenue. I remember the chief financial officer came to see me with what was supposed to be good news. With some belt-tightening measures, he said, we only had to lay off 12 or 13 people. We looked at our list of folks and could find nothing but High Performance Happy.

We had just made the Inc. 500, so they had delivered, and I did not want to break the we-are-in-this-together bond. So I decided the 40 highest paid people would take a 10-percent pay cut, and we would make up the rest in travel reductions. I was not surprised when I did not hear any whining, moaning or groaning from the top 40. I was surprised when the person who would have been No. 41 came into my office and said he wanted the same cut. The next day, the H.R. director came to see me and said, “Cliff, I have had a stream of people in my office all day — team leaders, front-line people, just about every role — asking if they can take the 10-percent pay cut, too. I don’t even think we need the money.”

I think it was that day that I knew for sure we had a great company that was High Performance Happy.

Cliff Oxford is the founder of the Oxford Center for Entrepreneurs. You can follow him on Twitter.

Article source: http://boss.blogs.nytimes.com/2013/05/07/where-the-happy-talk-about-corporate-culture-is-wrong/?partner=rss&emc=rss

Filed Under: Small Business Tagged With: , ,

Bucks Blog: The Best 401(k) Plans

December 20, 2011 by Leave a Comment

Retirement would be a lot easier if all companies were as generous as Southwest Airlines is to its pilots.

The airline recently took the top spot on a list of the 30 highest-rated 401(k) plans, a report created by BrightScope, a company that analyzes the plans. Southwest, known more for its quirky corporate culture than its generous 401(k) plan, matches 100 percent of the money its pilots set aside, up to 9.3 percent of their income.

Over all, BrightScope found that companies — at least the giant ones that made the list — were significantly more generous with their employees than last year. The average company provided an average of $11,000 per plan participant in 2011, up from $8,000 last year.

BrightScope analyzed more than 200 data points across about 350 plans with more than $1 billion in assets, factoring in categories like the total plan cost, company generosity and the quality of the investment menu.

Once it feeds all of that information into its algorithm, it comes up with a score for each plan. But the overriding factor that drives results is how quickly the plan will help employees reach retirement: the faster they can get there, the higher the BrightScope rating.  (Retirement, in this case, is achieved when employees can stop working with an income that is equivalent to 75 percent of their earnings during their working years — and is estimated to last for their remaining life expectancy).

The overall rating this year increased .75 percentage points from 2010, largely because more companies are putting more money into the plans and total plan costs have decreased. “Let’s face it, the companies on this list are incredibly profitable,” said Mike Alfred, chief executive of BrightScope. “The average middle-class worker is not benefiting from that, but the corporations are sitting on a ton of cash and they are being a bit more generous.”

But there’s something else prodding companies to improve their plans. Starting next year, the Labor Department, which oversees 401(k) plans, will make investment companies itemize all of the expenses that employers and employees are paying and make the underlying mutual fund costs distinct from administrative expenses. “Fees have been falling for some time, but going into next year that process has accelerated as more plan sponsors expect more pushback from their participants,” Mr. Alfred added.

This year, the average total plan cost for companies in the top 30 has dropped by 0.05 percentage points to 0.61 percent from the year before. That compares with an average total plan cost for all BrightScope-rated plans of 1.55 percent and 0.87 percent for all plans with assets over $100 million.

And some companies, believe it or not, are afraid of ranking too high on this list —if they appear too generous, their chief financial officers might want to make some cuts, Mr. Alfred added. “There is a fundamental conflict between the focus on corporate profitability and managing the company for shareholders, and managing the company for the benefit of your employees,” he said, adding that he recalled having a conversation with the Saudi Arabian oil company about their concerns of ranking too high.

The top 15 plans are listed below, along with some information on the generosity of the company match, among other factors. The top 30 can be found here.

The BrightScope 401(k) Rankings

Article source: http://feeds.nytimes.com/click.phdo?i=0d343a017bd08ac2f6e58264411beccd

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For Incoming I.B.M. Chief, Self-Confidence Rewarded

October 28, 2011 by Leave a Comment

That night, her husband asked her, “Do you think a man would have ever answered that question that way?”

“What it taught me was you have to be very confident, even though you’re so self-critical inside about what it is you may or may not know,” she said at Fortune’s Most Powerful Women Summit this month. “And that, to me, leads to taking risks.”

Her 30-year ascent through the ranks at I.B.M. happened during an era in which women entered corporate America in droves — with some of them, including Ms. Rometty, climbing their way to the top.

“The age group of women becoming C.E.O.’s started their careers in the early ’80s, when the huge tsunami of women were really building professional lives,” said Ilene H. Lang, chief executive of Catalyst, a research firm on women and business. Yet the fact that Ms. Rometty’s gender remains newsworthy also exposes the lengths that businesses still need to go to before women who invest their careers in companies have a shot at the corner office, or even equal representation.

“So we should be seeing more of this,” Ms. Lang said.

Ms. Rometty’s promotion also reveals something about I.B.M. and how it has developed a corporate culture that values diversity. The notable companies with women chief executives — like I.B.M., Hewlett-Packard, PepsiCo, Kraft Foods, DuPont and Xerox — are also some of the country’s oldest. Surprisingly, newer companies lag, said Jeffrey A. Sonnenfeld, founder of the Chief Executive Leadership Institute at the Yale School of Management.

“The really longstanding, traditional companies are the ones who’ve been able to unblock the once-clogged pipelines that used to atrophy the meritocracy because of bias,” he said. “These are traditional major pillars of the U.S. economy, as opposed to upstarts or professional services or finance firms with a highly fluid work force.”

The promotion of Ms. Rometty is all the more significant because she spent her career at I.B.M., in technical, strategy and sales roles, said Rosabeth Moss Kanter, a professor at Harvard Business School who studies women in business.

When she began studying these issues three decades ago, senior women were in “the three Ps,” she said — personnel, purchasing and public relations. Even recently, Anne M. Mulcahy, former chief executive of Xerox, had been vice president of human resources.

Ms. Rometty started at I.B.M. as a systems engineer in 1981 with a degree in computer science and electrical engineering from Northwestern University and is currently senior vice president for sales, marketing and strategy.

“The way she’s become C.E.O. is emblematic of a change that means women can have access to every opportunity, coming up the standard route instead of being hired from unusual places,” Ms. Kanter said.

A Catalyst research report this month found that women who build their careers inside a single company are more successful because they can prove themselves and develop sponsors to give them critical assignments.

“Earning this within the company, with your colleagues, is a little different from parachuting in Carly Fiorina or Meg Whitman from outside, where maybe they only look good because no one knows them,” Ms. Kanter said, referring to a former chief executive at Hewlett-Packard and its current chief executive.

It also gives Ms. Rometty added legitimacy, Mr. Sonnenfeld said. “There’s no cynic who can say there’s some demographic window-dressing here.”

Her career trajectory mirrors the successes of modern-day I.B.M.. An early producer of personal computers, I.B.M. has since sold off much of its hardware business to focus on higher-value software and services. Ms. Rometty’s career has been largely on the fast-growing services side, selling I.B.M. expertise to insurance and finance companies and overseeing the $3.5 billion acquisition of PricewaterhouseCoopers Consulting in 2002.

But for most companies, Mr. Sonnenfeld said, particularly finance, consulting and law firms, the biggest barrier for women remains the leaky pipeline — companies lose women before they ever near the top.

I.B.M., however, has a reputation for promoting diversity, said analysts who study the field.

I.B.M., 100 years old, hired its first professional women, 25 college seniors working in systems service, in 1935. In 1943, it named its first woman vice president. It instituted a three-month family leave policy in 1956, 37 years before the federal government made it law. And it runs the I.B.M. Women Inventors Community for filing patents.

“They see their ability to compete in today’s marketplace, to approach new markets and to make money as being tied to diversity,” said Caroline Simard, vice president of research at the Anita Borg Institute for Women and Technology, which this year named I.B.M. the top company for technical women. “It really is a business imperative and not just a responsibility of H.R.”

Analysts said that perhaps the most important strategy at I.B.M., which also had early inclusion programs for minorities, disabled and gay employees, is its formal mentorship program. “I really never felt there was a constraint about being a woman,” Ms. Rometty said at the Fortune conference. “I was always surrounded by people that wanted to mentor you.”

Ms. Kanter at Harvard said that Samuel J. Palmisano, whom Ms. Rometty will replace as chief executive, should be named “mentor of the century.”

Still, women are not equally represented at I.B.M., accounting for 28 percent of the work force and just 21 percent of executives. I.B.M. does not break out engineers by gender, but tech companies have traditionally lagged in recruiting women.

Girls are discouraged from pursuing technical education and companies have trouble retaining technical women because they are often isolated from influential social networks inside companies, Ms. Simard said. “Research shows that the majority of people have an implicit bias that associates science and technology with gender, so from a very young age, girls are not encouraged to pursue these careers,” she said.

“Women like Ginni Rometty are a powerful antidote against the stereotype.”

Quentin Hardy contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=9332f8a7fa7393d5250431c74c974f8c

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