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You’re the Boss Blog: Where the Happy Talk About Corporate Culture Is Wrong

May 7, 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: , ,

You’re the Boss Blog: When Innovation Becomes the Problem

April 19, 2013 by Leave a Comment
The Next Level

Avoiding the pitfalls of fast growth.

“Innovate or die” is an expression you hear tossed around a lot. It tells me quickly that the people using it are not really all that innovative and in most cases do not know what it takes to build a fast-growth company. When the fast growth starts to fade, as it always does, the problem is rarely innovation. More often, it’s an inability to do the things that have to follow innovation. It’s really about getting stuff done.

Getting stuff done means packaging, selling, delivering and collecting the money to increase revenue and profits. If you are best in class at getting stuff done and use creativity to reduce complexity and chaos, you just may have yourself a fast-growth business. But if you do, you will quickly learn that the biggest risk to your business is not that it will die because you stop innovating — it’s that it will die because you fail to rein in your innovating and start executing.

Here’s what often happens: Right in the middle of the selling part, someone comes up with an idea to expand the market, add a new product, add more features or offer a new service — in short, an innovation. Not only is innovation more fun than selling, it is what made you a successful start-up when you disrupted the market and created a new fast-growth niche. The organization cheers and rewards the innovators and soon enough you have innovation everywhere – but very little stuff getting done. What happens next is chaos and eventually you realize that you have very little revenue to show for your innovation, which is not good when you are in growth mode.

I remember one summer in high school I worked for my Uncle Buddy laying carpet. On the job, I wanted to talk to customers — basically about anything other than laying carpet. My uncle would look up and say, “Cliff, put tacks in the floor and lay the carpet.” The fast-growth winners are companies that have employees that step up and put tacks in the floor. The fast-growth losers talk about things like “innovate or die.”

Most successful fast-growth entrepreneurs can recall the day when they told their employees to stop innovating and start doing. No talking – just action. I remember a late-night staff meeting where we were long on excuses and short on results, and I simply could not take it anymore. I stood up and said, “Nobody else in this company can create unless it is approved by me. I want everybody to go and do what we already said we were going to do. You either do it or eliminate it. Your decision.”

I know I sound like a bureaucratic dictator, but I was running one of the fastest-growing companies in America, according to Inc. magazine, and I was totally frustrated that I could not get our product out the door. We had innovation everywhere — engineering had a new platform, programming had new features, marketing had new campaigns and the sales people wanted to hire new representatives to sell our “old” stuff so they could sell the new stuff. What helped me to say no was learning that Steve Jobs had once said, “I’m actually as proud of the things we haven’t done as the things we have done. Innovation is saying no to 1,000 things.” But saying no is hard. You are saying no to inspired people and potential revenue.

But the winners do it, like Jeff Platt, chief executive of Sky Zone, which builds indoor trampoline parks. Here is a guy who has built a business with a highly successful revenue model and has pre-sold more than 100 high-end franchises. When I heard him speak recently, he spoke with the confidence and knowledge of someone older than his 28 years. “In our world, at Sky Zone, we strive for operational excellence and to create ‘wow’ guest experiences,” he said. “At this stage of the company, we choose not to focus on bringing in new product offerings and new experiences for guests because we currently need to direct our attention on being brilliant at our core business.”

This is a guy who invented and patented the cable to tie trampolines together into an amusement park. In fact, he created a whole new industry by combining fitness and fun. Now, instead of focusing on innovation, Jeff is focused on training. One of the ways he is doing this is by investing money in e-training modules to make material available instantly to every employee across the country. He is also investing significant time in creating training courses for part-time, full-time and management positions. “We are focusing on getting stuff done,” he told me.

With an average of 10,000 to 15,000 attendees per park each month, it might be tempting for Mr. Platt to think about how to drive more revenue from each guest through new product innovations. If Sky Zone could figure out how to get $1 more out of each guest, it would be looking at more than $4 million in additional revenue each year. Or he could go back to the basics and focus on creating such a “wow” experience that those guests leave the park compelled to go out and tell everyone how great Sky Zone is.

That’s what I call getting stuff done — and that’s what I call a winner.

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

Article source: http://boss.blogs.nytimes.com/2013/04/19/why-innovate-or-die-is-a-lie/?partner=rss&emc=rss

Filed Under: Small Business Tagged With: , ,

You’re the Boss Blog: Why I Like to Hire Great Recession Graduates

April 3, 2013 by Leave a Comment
The Next Level

Avoiding the pitfalls of fast growth.

Pampered. Pragmatic. Persnickety. These are not the employee attributes that build fast-growth companies, but all three describe a group of employees that fast growth entrepreneurs must confront when hiring. Since the Great Recession of 2008, my advice to entrepreneurs is to run, baby, run when it comes to hiring this group.

Oh, by the way, I am not talking about Gen X or Gen Y employees; I am talking about their parents — at least some of them. Many thrived in an economy and work environment where they received multiple job offers, signing bonuses and automatic raises just for showing up. In other words, they got used to a reality that will not soon repeat itself. Today, post-crisis, workers have to justify their existence, why they are being paid. What value do they add? Meanwhile, the people who are stepping up in the new economy are the Great Recession graduates, new employees who were born into the new reality.

Let me be clear: I don’t mean to generalize. No group is all good or all bad or all anything. But the new reality is that entrepreneurs look at employees in two ways: they are either adding profits to the company or they are taking profits away. When I ask employees who remember the good old days to justify their salary, they do not even like my asking the question. But their children are different.

Those who have graduated from college in the last five years have the upper hand in landing these new jobs in the fast-growth companies where most new jobs are created. When I interview recent graduates, I sometimes feel as though I am talking to my dad, who lived through the Great Depression and never really got over it. If you talk to recent grads, you hear the hard-luck stories of deleted college funds — money that was supposed to send them to out-of-state schools.

Instead, they stayed home, went to the local college and waited on tables. And they have been hardened for what is still a tough economy in which to expand a company or be hired. Put it this way: I don’t think having a bring-your-dog-to-work day is high on their list, and there is no pushback on wearing business attire, either. Also, they do not have a lot of outside obligations that take them in and out of work five times a day. These Great Recession graduates are perfect players in fast-growth companies where a hunger to work and a will to win override the need for entitlements, praise and corner offices.

I have said it before — managing a fast-growth company is like walking on thin ice and riding rapids at the same time. No company needs people who cannot go with the flow and get stuff done. The Great Recession graduates do not question or doubt a job that has a tough mission. In short, they know how to survive, they will follow a vision and they want to make a difference.

I do not see that as often with the parents. Yes, there are lots of exceptions, but too many experienced employees are trapped in the easy-money past and have stopped trying to keep up. The first thing holding them back is that many have taken a pass on understanding social media as a business strategy. When I ask an experienced employee about social media, I’m told, “I am on Facebook and thinking about trying Twitter.” When I ask my own children or recent graduates about social media, here is the answer: “It is how we communicate.” Social media, Google and video represent a sea change; they have destroyed the knowledge gap that used to exist between entry-level employees and experienced employees.

Some may suggest that I am not respecting the value of experience. Here is my answer: I’m not convinced that that experience is relevant anymore. Here’s a real-world example. At the Oxford Center for Entrepreneurs, we recently began hiring for our M.B.A. entrepreneur program. I was interviewing to hire recruiters, and I’m sure many of the experienced candidates could have been good employees. Many talked enthusiastically about how they would figure out the best places to visit and recruit M.B.A. candidates for our program.

But being enthusiastic isn’t good enough anymore, especially if you are asking for the kinds of salaries that were paid before the economic crisis. It was the recent graduates who asked us, “Isn’t driving to college fairs expensive?” The person we hired is a 24-year-old who suggested an integrated social media strategy to motivate hundreds of Web sites to drive traffic to our site. By the way, the recent graduates with two years’ experience wanted this: an opportunity to grow, $45,000 in annual salary and commission on revenue brought to the company. The experienced candidates wanted three times the salary and were quite concerned about not having their own offices.

Here’s another example. We recently hired five C.E.O. apprentices right out of business school and within two days they had all set up shop and congregated in an empty conference room where they sat face-to-face, collaborating on projects and generating ideas. Again, this is how they communicate. When they’re not using social media, they prefer face-to-face discussion, challenging each other in an open environment.

Let me repeat: I don’t mean to generalize. I recently hired a 51-year-old legacy employee with a sterling pedigree. He didn’t dwell on the good old days, and he approached me with a confident and humble view about a fresh start. These are good signs to spot, and when you see them, you should hire the experienced employees who get it — but a lot of them do not. Here is my recommendation for those who are struggling with the transition: Don’t try to reinvent yourself for fast growth. Instead, be yourself, and do what you always wanted to do.

I have a good friend who has had a terrific 25-year career in pharmaceuticals. With retirement approaching, she was eagerly courted by venture capitalists to join any one of a multitude of biotech start-ups. After visiting several of the companies, she told me: “I realized I was 52 and had crossed the line. I saw all of the problems in these companies. I felt sorry for them and decided not to do it. But they were happy and could not wait for tomorrow.” What is she going to do? What she always wanted to do. This fall she is going back to college as a freshman nursing student.

So I don’t think experienced employees should stop thinking about tomorrow — I just think some of them should stop thinking about joining a fast-growth company. Most do not have corner offices anyway.

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

Article source: http://boss.blogs.nytimes.com/2013/04/03/why-i-like-to-hire-great-recession-graduates/?partner=rss&emc=rss

Filed Under: Small Business Tagged With: , ,

You’re the Boss Blog: What the President’s Job Plan Means to My Business

September 13, 2011 by Leave a Comment

Thinking Entrepreneur

An owner’s dispatches from the front lines.

I am trying to decide when exactly small businesses became the official poster child of the latest economic disaster. This is a relatively new phenomenon, but it’s been building for a few years. Sometimes, the attention feels good. I didn’t know everyone cared! Sometimes it feels like pandering. I have a suspicion that some of the people who are always arguing that we will destroy small businesses if we raise income taxes on the wealthy don’t really care that much about small businesses, but it sounds noble.

Over the last 33 years, my business and I have been through numerous recessions, and this is the first time I have seen so much attention given to small businesses. It feels both flattering and insulting, comforting and unsettling, honest and disingenuous. Sometimes it feels like a mother talking about her troubled teenager. “He’s a good kid, just misunderstood.” For all the attention and good intentions and well-meaning efforts to help, I do think small businesses are often misunderstood.

Running a small business can be very simple and very complicated. The simple part is how to be successful. Deliver a good product or service, price it properly and learn how to market it effectively. The hard part is avoiding all of the pitfalls along the way. Even in the best of times, we small-business owners run into and create plenty of our own pitfalls, but these last three years have been a pitfallapolooza. Many business owners, including some I’ve known very well, have taken pay cuts, lost lots of money or gone out of business. Too many have done all three.

For a long time, many people didn’t seem to care or even notice. Then somebody proclaimed that small businesses are the engine of job growth in this country. All of a sudden, the spotlight is on helping small businesses recover so they can create jobs. Why aren’t we talking more about getting big businesses to hire more people. After all, I keep reading that big businesses have generally recuperated quite nicely, and many are making record profits. Oh, but they aren’t the engine of job growth. We need small businesses to do that.

Enter President Obama, with his jobs plan. Here’s my take on what I, as a small businessman, heard in his speech: He recognizes that the politics of Washington have made the problem worse. Good. He says he’s going to try to help people who are struggling with mortgage problems. That’s good, too. He knows that the solutions to these problems can’t wait until the 2012 election. That’s certainly true. He wants to close a few tax loopholes for big corporations. I think I could live with that. He wants to rebuild schools and roads and bridges. That’s probably a good idea. And he says he wants to cut more unnecessary spending. Hallelujah.

You hear a lot of people talking about how taxes and regulation are choking small businesses, but many of these people are always talking about taxes and regulation, regardless of whether the economy is good or bad. Right now, my picture-frame and home-furnishing businesses employ 110 people, and they have certainly felt the effects of the recession and the housing meltdown, but if I have a problem it’s not with taxes and regulation. It is that I don’t have enough customers with money to spend. That’s why the most important aspect of the president’s plan is that it would inject $450 billion into the economy.

At a time like this, it’s hard not to be a little nervous about the government spending that kind of money. I am not an economist, but it does appear that many economists think this kind of stimulus makes sense. I noticed that Paul Krugman, a liberal, and Mark Zandi, who was John McCain’s economic adviser, seem to like the plan. I know a lot of people think the last round of stimulus didn’t work, but I’m not so sure. Has everyone forgotten how bad things were? Does anyone know how much worse things might be? I used some of the stimulus tax breaks to free up cash in my business. I invested in new machines, and I hired new people, carefully. Obviously, unemployment is still way too high, but there has been improvement.

Still, there are a few details that concern me. Once again, I have the sense that not everyone in Washington understands how small businesses work. Part of the plan involves an across-the-board cut in payroll taxes, for employees and employers. I think that will help. It will get money into the system. Perhaps some of it will be spent on picture frames and home furnishings. That combined with the break on depreciation may well allow me, for example, to replace my incandescent light bulbs with LED bulbs, which could cost $50,000 but be far less expensive to operate. The tax breaks may also allow me to expand my market, which will result in my hiring more people. Mission accomplished.

There are additional tax breaks in the plan that are meant to encourage the hiring of new employees. An employer can get a $4,000 credit for hiring someone who has been unemployed for more than six months. It’s a little hard for me to imagine not feeling sympathy for people who fall into this category. There are additional breaks for hiring veterans, and I don’t know how anyone could oppose giving an advantage to someone who left the work force to go to war. And yet, I wonder if, in general, these kinds of targeted breaks really work. Or are they better politics than business.

I guess I would need to see more details, but I have my doubts. Will paying a bonus for the hiring of someone who has been out of work six months be fair to someone who has been out of work for only four months? What incentive does this offer a person who has been laid off for five months? Is this fair to an employer who managed to make it through the last three years with minimal layoffs, but now has to watch a competing company be rewarded for hiring back the people it let go? How long will the person have to remain employed for the employer to get the $4,000? There will probably be a whole industry started on how to game the system.

Rewarding someone for hiring is playing with nature. There really are only two possibilities: either you are rewarding employers to do something they would have done any way, or you are rewarding employers to do something they weren’t sure they wanted to do. Do you remember my comment about avoiding pitfalls? Bad hiring decisions rate right up there with the most serious. A business should hire because of demand, not because of an incentive. Think about this: If a kid’s father offered you $4,000 to hire his kid, would that have any bearing on your decision? Of course not. Why should it be any different if the money comes from the government?

Some people suggest that this credit might help if a business owner is “on the fence” about hiring someone. Here is what I have learned: If you are on the fence about hiring someone, DON’T. Get off the fence. Call more references, interview the person again, make sure you really need someone. Hiring is serious business. If it turns out that you don’t really need someone, you eventually will have to lay off this person. You will be the bad guy, the responsible guy, the guy who pays all of the unemployment insurance. You will have done no one any good. An incentive to hire might not be an oxymoron, but the word moron may enter the equation. Sorry. It has been a long three years.

So, yes, the incentives to hire new employees make me nervous. If we’re going to inject money into the system, I’d much prefer to do it across the board. Don’t try to pick winners. Don’t play with nature, especially human nature. But maybe this is just politics. Maybe this is the price we have to pay to get the boost that the president’s plan offers. I don’t know – and I don’t want to know – the politics.

On balance, I hope the plan passes. But I think I liked things better when small businesses were ignored but did well. This too shall pass.

Jay Goltz owns five small businesses in Chicago.

Article source: http://feeds.nytimes.com/click.phdo?i=f1481a7ded27b279f6825f7ed4aa8682

Filed Under: Small Business Tagged With: , ,