7: Inspire Culture Change From The C-Suite
Leaders are critical to the success of a culture change, but only through effective leadership. A leader does not have the power to force a culture change on an organization that does not want it - such tyrants are seen as working at odds with the organization and are generally removed. Neither can a leader build culture merely by talking about it and expecting it to happen. Instead, leaders must demonstrate the values in the way they conduct themselves and the way in which they interact with others.
Employees are attentive to behavior in the C-suite - so if the C-level executives live the values, this alone contributes to the goal of instilling them throughout the organization. More importantly, leaders who act contrary to their stated values lose credibility and trust, and employees look to what they actually do, rather than what they say, as models for their own behavior.
A few examples of CEOs whose unusual antics have garnered attention: the CEO of a restaurant chain who pitches in with prep work every time he visits a restaurant demonstrates he values teamwork; another who clowns around a bit at presentations to demonstrate he values fun in the workplace; another who personally works the phones with employees who call customers to apologize for poor service demonstrates that he genuinely cares about the customer.
But even at this, the leader must recognize that making the values come alive is not their sole responsibility. Culture is built from the ground up - all you can do is point people in the right direction, show them how its done, and hope that they follow your example. (EN: It's been remarked that the power of a leader is not his personal ability to dominate others, but his personal ability to get others to want to follow him willingly.)
Give The Gift Of Time
Leaders must be visible and available to their employees - this is a simple enough matter for first-level leaders, but for the second level and beyond, leaders tend to withdraw and become inaccessible and unrecognizable.
Senior leaders often touch base with employees only at large meetings, and are distant and unknown to their people. The author asks a question "Could your employees pick you out of a lineup?" Very often, they don't have confidence in that answer.
Where leaders are out of touch, employee satisfaction and culture reflects their distance. Not only do people want to be in touch with and recognized by their superiors, the superiors need this contact to earn trust from their people and to be aware of what is really happening on the front lines.
One CEO devotes 50% of this time to employee contact, including informal town meetings, small gatherings, and visiting the workplace. The captain who never leaves the bridge doesn't really know his men and his ship.
Herb Kelleher of Southwest is infamous for being "almost obsessive" about being personally involved with his workforce. He's been known to fly in the cockpit to talk to the pilots, assist the baggage handlers, even serve as a flight steward.
Another practice at JetBlue is offering "jump seats" to staff of other airlines - but this is more germane to recruiting: employees of other companies get to see the operation and interact with the staff. They claim to get 30,000 applications per year, many from experienced flight attendants from other airlines.
There's an oblique reference to "management by walking around" - examples of executives who come out of their offices and visit employees on the worksite, a quote from a CEO who regularly visits franchise operations and says that he learns more from being in the field than being in the C-suite.
At the same time, it's not enough simply to show your face, but to engage and listen. It's like a doctor doing rounds with his patients - his bedside manner matters. People are worth listening to because the front-line workers are in touch. A delivery man, a waitress, a returns clerk, and other people in low-prestige positions hear directly from the customers every day, and can tell you more accurate information than any statistical report. Be prepared to accept criticism with humility and to accept praise at face value.
Then, a look to a hospital, where "doing rounds" is a practice and not just a metaphor: doctors are encouraged to approach the practice with a goal of learning in mind, primarily to build relationships with patients and staff, and to reflect on what they have heard afterward as material to inform and engage others.
Leaders should consider rounds as an educational and relationship-building opportunity - the ability to reward employees with a word of praise and the ability to win credibility and support. Of greatest importance is that it should not be considered an opportunity to speak, but as an opportunity to really listen to information directly from the front lines of their operations, without the typical filtering that occurs when communication flows through channels.
Make Giving Feedback Easy
Leaders listen openly to educate themselves, then speak to motivate others. If what they say does not reflect what they have heard, even to dismiss it, they lack credibility and are perceived as being out of touch and their decisions seem to come from questionable sources and the decision itself seems specious.
Said another way, feedback is not saying whatever is on your mind, regardless of what you have heard, but it is speaking directly to what you have heard. Even if you disagree with what has been said, the other person is more accepting of a contrary message if they have been heard out.
The author advocates an online system for collecting suggestions from employees, which has three basic components:
- A simple cost-benefit analysis. Employees should be required to explain in general terms how they believe their idea will save costs or increase revenues. This approach filters out many pointless ideas. (EN: It also filters out quality improvements, which may be difficult to quantify, and it may also intimidate employees who are not savvy with accounting.)
- Responsiveness. The suggestion box should not be a black hole. Ideas should be acknowledged within seven days, with an estimate of when a final response can be made. Otherwise, the system will not be taken seriously.
- Transparent. All ideas and responses should be open for all to see. It's an excellent way for leaders to build trust and give the employees the sense they are being taken seriously.
Also, make sure that employee newsletters and other communications share stories about successful ideas, crediting people for contributing and demonstrating your commitment to employees.
(EN: This only works if the "responsiveness" criterion is met. If leaders aren't making the time to listen, the employees will stop talking, and your suggestion system will become a joke. Leaders should commit to supporting the system - but if they can't actually follow through on their commitment, the suggestion box will demonstrate their lack of interest. You can't fake being genuine)
Live The Values, Tell The Stories
Leaders don't get to take a break from living their values. If they set them aside for a moment to deal with a crisis situation, or if they neglect to heed them on a "bad" day, it is noticed, and anyone inside or outside the organization who notices will question the sincerity of a leader who acts contrary to, or heedless of, his stated values. It's difficult, but essential, to live the values at all times.
More than anyone else, it's important for leaders to step back from any decision and consider how well it corresponds to the values. The greater the authority and visibility of a leader, the more damage can be done by failure to do so.
On the other hand, the good behavior of leaders is also noticed, in more subtle ways: when a leader follows the values, especially when it would be easier or more expedient to set them aside, this is also noticed: and the stories that make leaders into legends take root in the things they do in these situations. Anecdotes and stories come from such moments.
(EN: This speaks to the hero motif. A story of a person doing the things they might be expected to do is not very interesting - but put that character in a situation where they have a crisis of conscience, and there are two dramatic outcomes. If he cracks under pressure, he is a victim of circumstance; if he stands firm, he becomes a hero. And while we can sympathize with victims of circumstance, we do not admire them.)
Celebrate Success
The desire to achieve more and do better is what drives leaders to action, but it is also important to acknowledge progress along the way. When employees have made a strong effort to do something well, find a milestone to celebrate - and do so in person. It doesn't have to be dramatic, but it should be something unusual enough to stand out from the daily routine so that employees recognize that they are being recognized. It can be as simple as a memo to all employees that recognizes their collective success.
Of importance: you should do it yourself rather than deliver it through channels. It's generally perceived that a leader personally involves himself and delegates tasks that are of lesser importance - to delegate the task of congratulating employees is to nullify its value.
The author advocates using multiple channels to send these sorts of messages. In addition to speeches and letters, consider e-mail, podcasts, broadcasts, and handwritten notes. (EN: Also consider that electronic forms of communication, while highly common and popular, are also still regarded as impersonal.)
It's also noted that leaders can easily observe the employees in their line of sight, but often much is being done by workers who are not visible to leadership - those who work in the bowels of the building, or in different locations, and even those overseas all contribute to the achievement of goals.
They author advocates putting in place systems that enable leaders to monitor performance and deliver feedback to employees who may be thousands of miles away. She speaks specifically of the "story telling" systems but in place by a few of her airline clients that share good news from various sources - customer e-mails, CEO messages, etc.
There's a specific mention of sending letters to an employee's home address, which has much more impact than the same message delivered through interoffice mail - and very often, the employees bring those letters into the office, which gives the company a "two for one" multiplication, as the employee is congratulated at home and a work.
There's an oblique reference to "bad news" messages - that the same channels can be used to share information when the company is in crisis. When leaders remain silent in the face of adversity, panic quietly spreads. Getting out in front of it can denature that, and being frank about difficulties or even mistakes is important to maintaining credibility.
Do The Small Things Right
Leaders are generally aware that they are constantly being watched: any small slip is fodder for break room chatter. It's a mistake to disregard such things as unimportant, because they can undermine your attempts to develop a culture. Instead, recognize that your character shows in everyday actions and seek to leverage the grapevine to your advantage.
(EN: Said another way, people take public behavior as contrived to get people to think of you in a certain way, but private everyday behavior shows what you really are - when there is strong disparity between the two, people notice.)
The author provides a few bullet points on ways that top leaders have demonstrated their commitment to values:
- If there are layoffs or salary reductions, they should hit the executive suite equally, and let it hit there first. There is no better way to undermine support than to shield the executive ranks from hardships imposed on the rank and file.
- While there are some executive privileges, the employees should enjoy such things as well. The accounting clerks are one of the roots of the grapevine - when they pay the bill for a lavish executive retreat, word gets around fast.
- Demonstrate humility. Even if "fun" is not one of your values, people warm to leaders who are humble, who abide jokes at their expense rather than being outraged.
- Give up on perfection. Nothing ever goes exactly as planned, and people need to hold the authority to be flexible, even if sub-optimal results are achieved. Focus on how much of a goal was achieved by a partial or imperfect success rather than how much of it was not.
- Name names and give credit. Telling stories to illustrate a point is effective in getting it across, and naming the people involved (when the story is a positive one) is a constant recognition.
The author considers how much effort is put into the "big things" and how little is put into the small ones, and makes this observation: "If you can get the small things right, the large things become a lot easier."
Reward the Values in the C-Suite
While the duties of leaders are different to those of employees, their values must be the same, as must be the behaviors that are derived from values. There can be no double-standard in this regard. And so it follows that performance reviews based on values must be applied at the top: the goals of the leader must be aligned with those of their subordinates, and both are derived from the values of the firm.
One example involves a firm that put in place 360-degree reviews, in which leaders are evaluated not only by their superiors and peers, but also by their subordinates. Where bonuses at the top were tied to customer satisfaction and employee satisfaction, rather than merely accomplishing financial goals by any means, executives became highly attentive to those metrics: the first year, bonuses dropped because of low employee satisfaction scores - the problem was solved very quickly, and both employee and customer satisfaction metrics rose.
Compensation, bonuses, and stock options should all be tied "as much as possible" to behavior-based metrics rather than financial outcomes.
There is considerable argument over the equity of executive compensation, the general notion being that executive salaries are lavish and are seldom tied to actual performance - but a values-based system helps to justify compensation. The author asserts that at one client, there was not a single complaint at the shareholders' meeting after the compensation scheme was presented.
It's also suggested that, at a certain level of income, compensation is less of a motivating factor. Some of the best leaders have, at some point in their career, accepted a pay cut or worked for less than their market value: they are motivated to achieve by something other than personal financial gain.
It's common to ask employees about job satisfaction - what they get out of their jobs besides a paycheck - and the same question should be posed to the leadership team to investigate their motivation.
There are numerous examples of CEOs who gives up part of his compensation to support the organization and to provide the financial means to provide fair compensation for lower-level employees, and it's been observed that where executives at charitable, employees follow.
Never Lose an A-Player
If you want to fill you company with A-players, recruiting them is ineffective if you cannot prevent the ones you have from leaving. You must compensate them competitively, develop their talents, ad inspire them to believe in the values.
At Jet Blue, there is a rapid response team for resignations. Whenever a good person is on the verge of resigning (EN: No indication of how you can detect that), a senior officer will immediately go into action to discover the problem. In part, it's to retain that employee specifically, but it also serves to inform the organization as to the reasons so they can be proactive in addressing issues that might cause others to leave.
It's generally accepted that you cannot do much when an employee leaves because of a reason beyond your control - for example, when their spouse must relocate. But this should not be accepted unless you have explored every alternative to keep them: find an opportunity to work for the company in their new location or enable them to work remotely.
Even when you lose an A-player, consider it to be a temporary loss rather than a permanent one. Employers who lose good people are often so resentful that they do much to ensure that they will never return. This is short-sighted, as it is not at all uncommon for a former employee will be glad to return to work to a firm that he has left, provided the separation process was treated respectfully in the separation process.
(EN: Aside of the individual employee, it's also important to consider the broader impact. The separation process is the last impression an employee has a firm, which carries forward when others ask them about their experience. If it handled poorly, it will negate many of the positive things they might have said. Consider also that an employee often keeps in touch with other employees after their departure, who are curious about the separation process. If an employee is roughly handled in separation, others expect the same when it comes their time to depart, and they will make decisions such as how much notice to provide accordingly.)
The author speaks in vague terms about keeping in touch with A-players who have left the company in order to keep them mindful of opportunities to return.