Corporate Culture and Leadership: A View from the Corner Office

corporate culture and leadershipCorporate culture and leadership are important no matter what size your company is. Mike Sheehan, CEO of the ad agency Hill Holiday shares his insights into corporate culture and leadership in an interview with Adam Bryant. Below is an excerpt from that interview which appeared in the Wall Street Journal.

“I think there are two kinds of cultures, and then you can subdivide them after that. One is based on a foundation of insecurity, fear and chaos, and one is based on a firm platform where people come to work and they’re worried about the work itself. They’re not worried about things that surround the work and are not important. I’ve tried to make Hill Holliday that kind of environment, where people come to work and they’re not worried about their peers shooting them. If leadership doesn’t provide a forum for that kind of behavior, it dies quickly. People forget about it and they just focus on doing their job.

You don’t want a conflict-free zone, but you want the conflicts to be about the work itself. Sometimes you have to dig a little bit and talk to people, but if you find out the conflict is about the work, then that’s good, because it’s healthy. I think that in a lot of workplaces it’s the opposite — people have to come to a consensus on the work, and so all the conflicts are political.

That’s one thing that the founder, Jack, instilled in the culture. It’s not a democracy. You’ve got to make tough decisions and then you’ve got to move on. “The enemy’s out there,” he would say. “The enemy’s not in these four walls.”

What kind of culture does your company have and what are you doing to create it?  To many CEOs leave their culture to chance. That’s why corporate culture and leadership are linked together. Make sure you have the culture you want. To learn more about corporate culture and leadership read the entire article by going to:

http://www.nytimes.com

The New Global Economy Update

Now is a good time to take a quick look at the new global economy. The first quarter is behind us and trends are beginning to take shape. This update on the new global economy is designed to give business leaders a heads up on factors that can have a direct and indirect impact on their business. If you are looking to grow your business or avoid becoming a business casualty this is for you.

During my research for my book “Leadership in the New Economy” many business leaders felt that they would be immune to factors playing out in the new global economy. To them these factors were benign threats on the distant horizon of their business reality. Although they didn’t experience a direct hit due to global trends they found themselves in their wake which produce unexpected setbacks.

Please use these examples as a yellow flag for your business. Consider their potential impact and adjust your plans accordingly.

  • Our Export business is softening. After two years of impressive growth the Administration’s goal of doubling exports from $1.58 billion to $3.15 billion in five years is in serious jeopardy. With China and India decelerating their economies from the double digit growth of the past economists are predicating sluggish growth for the next couple of years. We can’t sell our goods to a market that is growing at a significantly slower pace. Who in your value chain or customer base can be impacted by a significant slow down in our export business?
  •  Business investment is declining. According to USA Today, “Investment climbed just 1.4% a forth of its late 2011 pace, which helped limit the economy’s growth to 2.2%.” This rate is below most experts forecast for 2012. How will reduced investment by businesses impact you and the local marketplaces in which you operate?
  • Unemployment in Europe reaches record high with 17.4 million workers unemployed. At 10.9% this is the highest rate since the Euro was installed. Compounding the impact of high unemployment is the fact that the austerity programs in place to reduce the counties’ debt have had poor results in lifting the economy. The rising borrowing costs, political infighting and social unrest promise to keep the European economy unsettled for the foreseeable future. How could prolonged unrest in Europe impact your investments, business and local economies?
  • Job gains in the US hit 7 month low. According to payroll giant ADP’s April jobs report the US added just 119,000 jobs. This is the second month in a row that the results were disappointing. Although many experts predict an upswing in May they remain cautious in their predictions for the year. Is this just a blip or the beginning of a stall? How will your business fare if the jobs growth stays soft?
  • Best Buy is down sizing. Like many big box retail stores the electronics chain had a poor forth quarter and an loss for the year. In an attempt to right the ship Best Buy recently reported that they will be trimming costs by cutting 400 job, closing 50 stores and downsizing many others. This is an example of a big company trying to “Right Size” their business to compete in the realities of the new global economy. By matching their business operations to the market demand Best Buy hopes to pull itself out of the red ink and into the black. Is your business in need of “right sizing”? It’s always easier to do it early instead of waiting until it may be too late.
  • Black Berry changes leadership team and launches new market strategy to stop the bleeding. After seeing its stock shrink 90% since 2008, its market share retreat from 14% to 8.2% and feeling the heat of five straight quarter of sales short falls the smart phone company is shaking things up. By installing a new leadership team led by Thorten Heim and unveiling a new market strategy RIM hopes to stop the slide into smart phone oblivion.Experts aren’t sold on their new strategy and CEO Heim  admitted that he was wrong in his January assessment the company didn’t need to make “drastic changes”. what kind of drastic changes lie ahead? You’ll have to stay tuned. Many experts feel their best chance of survival is to put the”for sale” sign up.  When a market leader starts losing touch with its customers and fails to deliver solutions that the market demands the fall from grace can be rapid and often fatal. How well does your company deliver solutions to your customer base? If your market position is weakening are you poised to respond effectively?

The lessons you can learn from these examples about the new global economy is that there are many factors in play that can be disruptive to your business even if they seem in like they’re in the distance. Successful leaders identify the indicators that can impact their business and carefully keep their eyes on the horizon looking for trends that may be the tip of  the economic ice berg. They know that “shift happens”, often unexpectedly so they remain poised to respond.

Although the example given represent potential dangers the new global economy also represent tremendous opportunities. Joseph Grobler COO of  Reveal a company says,This is the absolute best time to be in business because the growth opportunities are unbelievable”

Other companies who have successfully positioned themselves for growth include :

The CEOs of these companies have business plans in place that ensure that they are responsive to their customers and are alert to the market dynamics that can surface in the new global economy. If you’d like to discover how well your business is positioned to grow take the Growth Positioning Survey by clicking here.  I’ll also send you a copy of the Special Report:Welcome to the New Economy: Discover the 12 Biggest CEO Mistakes and How to Avoid Them.

Corporate Culture and Leadership: Lessons Learned from Goldman Sachs

The corporate culture and leadership at Goldman Sachs was put into an unflattering light by one of it’s own executives. Greg Smith retired from leadership and culturethe his position at the financial services company where he was executive director and head of the firm’s equity derivatives business in Europe. His parting gift to the firm was a March 14th op-ed in the New York Times, “Why I left Goldman Sachs.” He took unflinching shots at the company’s corporate culture and leadership by outlining “a decline in the firm’s moral fiber.” Smith wrote “Today many of these leaders display a Goldman Sachs cultural quotient of exactly zero percent. …Integrity? It’s eroding.”

Smith’s action brings to mind two key questions. First is Goldman Sachs really that bad? Second why would an executive take such drastic action against his former employer?

Let’s address the first question. Although executives at the Goldman Sachs have been disputing Smith’s claims the firm’s shares dropped 3.4 percent on the day of the op-ed. This suggests that there are shareholders who suspect that there may be some truth to the allegations.

Why did Smith write the piece? He said he did it as “a wake-up call” to the board “(to) make the client focal point (of its) business again.” The firm said he was a disgruntled employee. Only time will tell who is right. There is probably merit for both sides.

What’s the lesson to be learned?

These are stories told at the water cooler, at a lunch table or in the ladies or men’s room. These aren’t the glowing stories created by a PR firm or ad agency. These are the stories that reveal the true DNA of an organization.

If culture defines “how we do things around here” then the stories employees tell are the way it’s conveyed. In many organizations there are the SOPs and then “the way we really do things.” In other organizations they are one in the same. Which one are you?

Great companies have employees who tell great stories that are aligned with the direction set by their leaders. When negative issues surface great companies listen, discern and take appropriate action. They do this because they know failing to do so is the first step down a slippery slope towards a dysfunctional culture.

The challenge for you is to know what stories your employees are sharing. If your employees were to write an op-ed in the New York Times about your organization would it be glowing or scathing?

Corporate culture and leadership must be developed and cultivated over time. It’s based on what you say and the extent your actions support your words.  The by-product is the stories employees tell. Make sure your actions cultivate the stories you’d want to appear in the New York Times.

To get a better picture of your culture take the Growth Positioning Survey.

Corporate Culture and Leadership in the New Economy

Corporate culture and leadership are essential in the New Economy. Why? Because in turbulent times it’s imperative that organizations have a clear sense of direction and purpose. Not having everyone on the same page results in chronic organizational dysfunctionAligning Vision, Values, Mission and Culture in the New Economy where employees and departments are working at cross purposes by pursuing conflicting goals. Remember every misalignment squanders your company’s ITEAM *(Information, Time, Energy, Attention and Motivation) and drains your profits. (*Mike Jay, B-Coach)

Many companies may have a written mission, vision and values statement but most fail to formally develop their cultures. Because leaders put off the heavy work of erecting the scaffolding of values, policies, shared beliefs, rewards, rituals, and visual elements that form culture, a void is created. In that void, culture happens spontaneously, organically and usually chaotically. Culture becomes an aggregation of random decisions made by different people in particular circumstances. The notion is that if the people are good, decent and competent, chances are, the culture be good, decent and competent as well. This approach is a recipe for disaster. As the leader your biggest responsibility is creating a culture that is scalable and sustainable. With or without direction nature and nurture will combine to form organizational DNA that informs your people of “how we do things”. This message grows more visible and pervasive over time.

Many successful entrepreneurs aren’t content to leave their corporate culture and leadership to chance. From the beginning they select people, implement policies and clarify what’s important at every step of the way. Because they want a culture that can sustain itself these leaders believe in culture by design.

“If you don’t define the culture and you don’t work on it and you don’t progress it even when it’s 2-3 people, it’ll define itself. And it’ll define itself really quick, and it may not be the one that you like.” -Matthew Porter, CEO Contegix

Large organizations with well-developed cultures often neglect them resulting in the culture changing into something at odds with the organization’s vision and stated values.

A good example of corporate culture and leadership that went awry is AIG. According to Corporate Culture: The Ultimate Strategic Asset*, AIG’s failure during the global financial crisis of 2008-09 in part can be attributed to misaligned values and a changed culture. AIG had as a core competency managing risks and a culture where anyone could challenge a trade. Under Joseph Cassano, the financial products group sold hundreds of billions of credit protection in the form of CDs without having to put up any real money as collateral. As sales grew the group took on more and more risk. Under Cassano’s leadership the culture evolved into one in which transactions couldn’t be criticized. When, in the financial crisis of 2008, investment banks sought insurance money for their collapsing derivatives, AIG could not deliver and received a bail-out from the taxpayers. A culture of growth at any cost overshadowed the old culture of managing risk and the rest as they say is history. (*Corporate Culture: The Ultimate Strategic Asset, Eric Flamholtz and Yvinne Randle,Stanford University Press 2011)

Many successful organizations like FedEx, IBM, Amgen and Disney have “woken up” to find that their corporate culture and leadership weren’t aligned with their vision. This “Ah Ha moment” forced leaders to impose a cultural re-alignment. This was a painful process (IBM laid off 60% of its workforce).

When you look at your company’s corporate culture and leadership what do you see? Are your company’s Culture, Mission, Vision and Values aligned so everybody in the organization understands and acts congruently with them? Take the Growth Positioning Survey and discover where your company stands.

The 7 Biggest Leadership Mistakes in The New Economy

The new economy has claimed many business casualties in the last few years. Unfortunately most of these casualties have been a result of self-inflicted leadership mistakes. Making mistakes in this tough economy can have devastating results including loss of sales, profits, key employees and customers.

leadership mistakes

This article describes seven leadership mistakes that leaders make that are as avoidable as they are devastating.  Like the captain of the cruise ship Contra Concordia the tragedy didn’t occur because the captain didn’t know better. It happened because of his decisions and actions. Don’t be that Leader!

As you read each article remember every CEO who has made these mistakes thought to themselves, “This could never happen to us!” It did and it will happen to your company if you don’t take the appropriate action to prevent it.

1.      Unclear or Misaligned Mission, Vision and Values and Culture

In turbulent times it’s imperative that organizations have a clear sense of direction and purpose. Not having everyone on the same page can result in chronic organizational dysfunction where employees and departments are working at cross purposes by pursuing conflicting goals. Remember every misalignment dissipates your company’s ITEAM (Information, Time, Energy, Attention and Motivation) and drains your profits.

 Are your company’s Culture, Mission, Vision and Values aligned so that everybody in the organization understands and acts congruently with them?

2.      Focusing on the Wrong Who 

What you don’t know about your customers is putting your business at risk. Why? Because market trends and customer needs are changing more rapidly than ever before. If you don’t know who your ideal customers are, as well as how, when and why they are motivated to purchase your solution, you can’t position your solution to uniquely satisfy their needs.  

When your customers’ needs shift how quickly can you re-align your company to serve those needs? If you don’t take care of your customer someone else will.  To survive many businesses have resorted to discounting, coupons and promotions to attract customers. What they found was that the customers left as soon as the promotion ended or the coupons expired. They didn’t acquire customers they merely leased them. This is not a long-term sustainable strategy.

What are you doing to identify your ideal customers and make sure you know them well enough to predict their behavior?

3.      Having a Solution that’s Just “Good Enough”

In the past companies could survive and even thrive by having “me too” products or services that were good, but not great. Customers were plentiful, less informed and not as discriminating. Today customers are more informed (thanks to the Internet), more demanding (due to more choices) and more discriminating (thanks to tighter budgets and more scrutiny on every purchase decision). Customers are looking for solutions to their problems (both technical and emotional). They want companies who will help them make the right decision now and in the future. Therefore the stakes are higher. Your solution must uniquely meet your ideal customer’s buying criteria and emotional needs.

 Can you deliver a Solution that uniquely meets your Ideal Customer’s buying criteria and emotional needs?

4.      Having your message lost in the noise of the marketplace

Having your message heard is a function of the media, message, timing, frequency and delivery. A recent LinkedIn survey revealed that the number-one challenge on the minds of sales professionals was “getting the attention of prospects”*. Customers are bombarded with information, so much so that everything begins to sound like “Blah, Blah, Blah”. Making matters more challenging is the fact that only 3% of your target market is in the buying mode at a given point in time. If they aren’t buying they aren’t listening.  Getting your message to your customers too early, too late or without impact is a waste of time, money and energy.

How does your message help your Ideal Customers clearly understand how your solution uniquely satisfies their buying criteria and emotional needs; and is delivered when it will most influence the buying decision in your favor?

5.      Not delivering enough value

Since the recession started, many salespeople and companies alike are complaining that all their customers want is a lower price. If this were true everyone would drive a Kia, live in a one-bedroom condo watching TV on a 26-inch TV and never eat dinner at a restaurant.

Price is never the top priority unless there isn’t enough value provided. If customers understand the differences you provide and value those differences they will pay the price. If they don’t understand the differences or don’t value it, they won’t pay. Remember customers always decide by differentiating. If you don’t differentiate your solution somebody else will. Don’t leave it to chance, or worse, the competition.

Does the Value delivered by your solution far exceed what your customers pay so that “price” is never the primary factor in the buying decision?

6.      Delivering a customer experience that satisfies but doesn’t WOW

Customer experience is defined as the sum of all experiences a customer has with a supplier of goods or services, over the duration of their relationship with that supplier. This means every touch impacts that experience positively or negatively. Your ability to deliver an experience that sets you apart in the eyes of your customers serves to increase how much they spend with you and, optimally, inspire loyalty to your brand.

As evidenced by the number of business casualties over the past few years most companies talk about becoming customer focused, but few actually do it. Doing customer satisfaction surveys is one thing, changing the company’s culture based on what was learned from the surveys in something totally different.

Does your Customer Experience make sure that every Customer Touch reinforces your unique selling proposition and endears customers to your organization while transforming prospects to customers, customers into loyal customers and loyal customers into raving fans?

7.      Mismanaging human capital

To succeed a leader must know the strengths and motivation of each person on the team, as well as how the individual impacts the performance of the team. Recognizing a person’s talent and then managing it creates a motivated and engaged workforce. Failure to hire the right people for the jobs and not putting people in positions where their talent can soar is a waste of a company’s resources.

Successful companies have specific plans for recruiting, interviewing, hiring and developing new employees. They also invest the time, energy and resources to develop employees for their current and future jobs.

 Do you have the Right People in place so that their talents and motivation are fully utilized while executing your sales and marketing strategies?

A key concept behind the mistakes in this article is that they are interrelated and have a compounding effect on each other. For example, if your employees aren’t aligned with your Mission, Vision, Values and culture you’ll be hard pressed to have them deliver customer touches that are consistent with your unique selling proposition. If you have the right message but it’s delivered too early or too late, it won’t influence the sale in your favor or advance your strategy. If you spend selling effort and resources pursuing customers who don’t need, can’t or won’t buy your solution, your sales and profits will suffer. The key to success is to take action to avoid all the leadership mistakes and constantly monitor them to make sure they don’t become obstacles to growing sales, profits and customer loyalty.