Keyword: company culture

Let me say this right from the top: there is no single more important factor to the success of a project than a clear, crisp, shared vision.  Period.  Now let me tell you why.

I have seen a lot of projects.  Big projects involving thousands of people over many years and with tens of millions of variables.  Small projects involving a couple of people over a couple of weeks.  And many in between.  While it is self-evident that having a clear, shared vision isn’t a magic bullet that solves all problems, it is equally clear to me that every project without one struggles and often fails.  To put it in science terms: having a clear, crisp, shared vision is a necessary, but not sufficient, condition to project success.

There are a number of reasons why having a vision is so important:

• A vision helps everyone on the team make decisions
• A vision is a useful yardstick for project completion, success, and failure
• A vision can form the basis for the promotion and marketing of the project
• A vision is a rallying cry, greatly improving team morale

Helps the team make decisions

Without a vision, team members make many day-to-day decisions in a vacuum.  Most of our lives are made up of hundreds of small choices, and a few large ones.  What should I have for lunch?  Should I take I-5 or the surface streets?  Should I marry this person?  In the workplace it is no different.  Should we add this feature to a product?  Should I do this right or just get it done?  Should I hire/fire this person?  Some context for making all these decisions is vital.

In our personal lives, we make these choices based on many factors, from our experience, our research, perhaps even our faith.  Our work lives are very much the same, decisions get based on some framework.  If we work for an organization where cost is the key concern, we make decisions in that framework and look for ways to make each choice be the one that is most cost-effective.  If we work for a firm providing only the best products or services, everyone can make each of their myriad choices based on that knowledge.

Without a vision, everyone from the top of the organization on down is left to make decisions without a foundation.  For example, let’s say you are constructing a new building whose vision is: create the tallest building in the world on this specific site in Tokyo for a budget of 750 million yen.  With that vision, the architect clearly knows that anything less than the tallest building is not correct.  They also know the parameters of what they can spend on materials, because they have a budget.  The construction managers know precisely what the location is, what access to the site is like, and what they need to consider with respect to zoning laws.  And each worker knows where to report.

But it goes beyond that.  As the project progresses, questions will come up.  Should we add this flagpole to the top?  Having this vision helps make that decision — it adds to the height and furthers the vision, so “yes”, add the flagpole.  The people working on the project know clearly the objective, so this decision doesn’t have to be discussed and debated to death.  There are thousands of other small decisions that having a clear, crisp, well-communicated vision can help you with.

Is a useful yardstick

A vision provides often provides a clear yardstick for success.  To take the previous example, if the building is 10 meters short of the tallest building in the world, you know precisely that it was not a success.  As it progresses, and the budget is consumed, you can tell precisely how you are doing against the goal of 750 million yen.  And so on.

The vision can illuminate well down into the organization as well.  If you are working on a small part of the project, and what you are doing is not in concert with, or worse, in direct opposition to the vision, you know there is a problem.  With a properly defined vision, everyone on the team can not only measure their part in the project, but also their performance against it.  I made the decision to put on the flagpole, that pushed us over the top, my contribution to the project was essential.

Forms the basis for the promotion and marketing

Once you have a clear vision, it also can enlighten outside the organization.  Again taking the above example, you know the promotional material for this building will trumpet the fact that it is the tallest building in the world.

Having the vision defined early in the project also allows the marketing development work to happen simultaneous with the project, instead of having to wait until later when the project nears completion.  This head start can save months of headaches and can lead to positive feedback loops.  As the marketing messages are floated early in the project, the team can even react to input from the initial customer reaction to the vision, instead of after the project is over and has been released to customers.

Great visions also lead to great marketing.  If a vision is exciting and invigorating for the team, it can also be so for the customers.  And some great visions have even made it into the real world from inside a company.  Rumor has it that Wal-Mart’s “Always low prices.  Always” was a vision established internally by Sam Walton, and it escaped into the wild…  and eventually got plastered everywhere.

Is a rallying cry

Perhaps the most important thing that a great vision can do is serve as a rallying cry for the team.  Each and every member of the team will be asked by friends, coworkers, family, everyone, “what are you up to these days?”  Having a crisp, snappy reply can be extremely invigorating for people. “Building the tallest building in the world” as a quick comeback to the question is enough to make most people extremely proud.  Not only are they proud of what they want to do, but it enables them to speak spontaneously about their part in it, and to feel like what they are doing has some meaning.

Contrast this with the typical reply: “oh, you know, same ol’, same ol’.”  Most people aren’t fortunate to go to work doing something they love to do, or can be proud to be a part of.  Use the vision for your project as a way to communicate the importance of the project to every member of the team, and let them share in the passion you have for the objective.

Besides, if your vision is good, clear, and full of impact, you can use it at the end of every meeting, at the bottom of every slide, and even as part of a secret handshake…

Summary — Vision is Extremely Important

A clear, crisp, well-communicated vision that is shared by, and used by, the whole team can be the difference between success and failure of a project.  You need to work on defining the vision early in the process, and use it constantly throughout the project to aid in decision making, as a rallying cry for the troops, and as a yardstick for success.  Next up, how to define a great vision.  More on that soon.

I have written more than a little about Home Depot and its CEO Bob Nardelli.  From their top-heavy “Culture Change Offensive” (which I found offensive here), and the silly army mentality Nardelli tried to force down everyone’s throat (and got stuck in my craw here), to Bob’s stunning pay package (which rubbed me raw here), and even his autocratic shareholders meeting (which I recounted here) Nardelli has provided plenty of fodder for these pages.  Well, it seems that the company and the board have finally come to their senses.

ATLANTA, Jan 03, 2007 — The Board of Directors of The Home Depot and Bob Nardelli announced today that they have mutually agreed that Nardelli would leave his position as The Home Depot’s chairman, president & CEO and as a Director effective January 2, 2007.

In other words: “get out…  like yesterday”.  Clearly the company simply tired of all the bluster and noise that went along with Bob’s “Army Mentality”, and the corporate results have been lackluster since he arrived.  And as I said in this piece, the mood in the stores is rancid.  It is a wonderful sign that the company saw the insidious effect Nardelli had, and chose to put an end to it.

But, the company didn’t completely come to their senses.  They continued to give Nardelli completely ridiculous payouts even as he exits in disgrace:

Nardelli and the Company have agreed in principle to the terms of a separation agreement which would provide for payment of the amounts he is entitled to receive under his pre-existing employment contract entered into in 2000.  Under this agreement, Nardelli will receive consideration currently valued at approximately $210 million (including amounts which have previously been earned or vested).

Holy Cow!  Even in the face of amazingly generous pay packages to CEOs, this one is a stunner.  This means that Nardelli has received, since becoming CEO of Home Depot, a whopping $400+ million in compensation!  During the same time, HD (the stock) has gone from a high of around $70 to the mid-30s.

And worse, much of this is clearly a golden handshake, or simply “go away” money.  It is optional, the board didn’t have to agree to it, but just wanted him out so badly they were willing to pay almost anything to have him go away:

This consideration will include a cash severance payment of $20 million, the acceleration of unvested deferred stock awards currently valued at approximately $77 million and unvested options with an intrinsic value of approximately $7 million, the payment of earned bonuses and long-term incentive awards of approximately $9 million, the payment of account balances under the Company’s 401(k) plan and other benefit programs currently valued at approximately $2 million, the payment of previously earned and vested deferred shares with an approximate value of $44 million, the payment of the present value of retirement benefits currently valued at approximately $32 million and the payment of $18 million for other entitlements under his contract which will be paid over a four year period and will be forfeited if he does not honor his contractual obligations.

The bulk of this is sickening…  I’m sure there were clauses in his contract that would have allowed the company to fight most of this.  I haven’t seen it, but I’d be shocked if it was all carved in stone.  I’m betting they didn’t have to accelerate his unvested and/or deferred options, they didn’t have to buy out his retirement plans, they just did it to get rid of him.

While I applaud Home Depot for ridding themselves of this jerk, I wish they had the backbone not only to fire him, but to not pay his blackmail too.  But I’m sure the company is better off without him.  The markets surely agree, the stock is up over 3% today alone on the news.

I just returned from a board meeting that was challenging.  It was challenging both in the issues that were being debated, but also in the behavior of one participant.  I’ve been in hundreds of meetings like it, and it makes me want to scream.

I love challenging subject matter.  Nothing is more fun than a group of bright people exploring complex issues and trying to come to a reasonable decision.  Even when the momentum is going against my position, it’s a treat to have the insights of others, and to work with the group dynamics to make progress on tough issues.  But the whole thing can go down the tubes through the efforts of just one person.

I’m a “glass half-full” kind of person.  I tend to be optimistic about things, tend to try to find the best in others, and tend to think everything will work out for the best.  But I have just as much respect for people who are “glass half-empty” kinds of people.  They tend to think things won’t work and that everyone is out to screw you.  Most of the ones I know are lawyers…  Generally, these people make a great match for people like me.  Together, we tend to find a reasonable middle groud — with the optimism to get it done, and the caution not to do something stupid in the process.

Then there are the “empty glass” people.  You know these people, they can’t imagine how or why it will work, don’t understand why we’d even consider doing that, and generally find fault in everything.  They want to think they are just cautious, glass half-empty people, but their glass is bone dry.  I’m sure there are people at the other end of the spectrum, who are encouragably optimistic, I just don’t see them in business meetings that often.

When the empty glass people are in your meeting, you can spot them immediately.  They second-guess everything, and nothing is ever right — even the coffee.  Beyond being just being another person to sway in the meeting, these people are more incidious.  They sap everyone’s energy, and end up sucking the life out of the group.  The optimists have to fight against an unreasonable position, and the pessimists find themselves having to defend the reasonable glass half-empty perspective, lest it be sucked entirely down the drain.

In my board meeting, the empty glass person was relentless.  She kept at it, with all her weapons.  She countered every comment, saw nothing positive in anything, and scoffed at reasonable attempts at compromise.  She, simply, made a fool of herself.

So, what do you do about them?  Well, if you are leader, it’s simple: just don’t invite them.  Avoid the risk and pain of having these people torpedo your meeting, and keep them off the roster.  Just like a bad employee, the whole organization will be better off if you just cut your losses early.

If you are unfortunate enough to merely be stuck in a meeting with one of these people, there’s little you can do.  Try to make them see reason, toss up arguments to combat their negativism.  But it usually doesn’t work.

So I go back to the lessons I learned from child-rearing.  More often than not, I find that ignoring them works.  If the rest of the meeting participants follow suit, they grow weary of pushing the rock up the hill, and stop.  With any luck, they will get so tired of it, they will decline the next meeting invite, and everyone will be better off.

James McNerney took over as CEO of Boeing a little more than a year ago.  But you haven’t heard much about him for the last year.  That might lead you to think he’s not been busy.

But he’s been doing what any good deciple of Jack Welch would do when taking over a company — “deep dives”, taking a long hard look way down in the organization to see what he inheritted.  I’m sure it was an eye-opener.

Jim McNerney

Boeing has taken a lot of hits for a long time, not just in the recent ethics scandals.  In Seattle, Boeing has been ridiculed as the epitomy of bloated big business.  One nickname from the late 20th century was “the lazy B”.  Around here, you can pick out the Boeing employees just like the Microsoft ones.  They are stereotypical nerds all, differing largely only by the generation.

The tens of thousands of proud Boeing plane builders are local fixtures, and their relationship with company management has been rocky since the beginning.  Not aided by a argumentative union (see my post on that here), the ebb and flow of the company’s fortunes take the larger local economy with it.  This effect has been lessened, but by no means removed, by the additional of software and biotech to the local scene.

Boeing’s relationship wtih Seattle hit a big low, when the former CEO Phil Condit made the rather absurd move to take it’s headquarters to Chicago.  This choice was ridiculous because the company had essentially no business operations nearby (and was shuttering those it did have).

In an amazing show of hubris, Condit held a public contest to see which city would give the most largesse to Boeing for moving their headquarters there.  In an over-hyped press event, the company selected Chicago while on board a Boeing jet headed for…  may I have the envelope, please…  Chicago!  It was a ridiculous spectacle, it moved less than 0.1% of the employees there, and (rumor has it) was only done because Condit and his wife wanted better restaurants and night life.  The reasoning was to put them in the middle of their customers, within a short flight to them all.  But, in point of fact, their largest growth market for the company is the Pacific Rim, and Seattle is far closer to those customers.  Yet another reason why Condit is long gone.

All of this makes McNerney’s challenge even more important especially to those around here.  He needs to restore a sense of sanity in a company that seems to lost its way much like Enron, Worldcom, and the other famous debacles of the end of the last Century.

His biggest challenge may well be finding a a way to get this behemoth, famous for everything from commercial aircraft, huge government contracts, and questionable ethics, to focus on something…  anything.  The company appears to be involved in all manner of large military and aerospace projects and master of none.  As I have said repeatedly, focus on some vision, any vision, is important.  McNerney seems to agree.

With recent wins in the big plane arena, whether because Airbus is stepping on its own tail or not, McNerney has a great chance to celebrate some successes, and move toward the future.  Their new “Dreamliner”, the 787, looks to be a hit — just what the company needs right now.  If they can actually ship the thing (friends inside tell me this will be no small accomplishment) they stand to regain their crown as the world’s planemaker.

This gives Jim McNerney one great leg upon which to rebuild the company, and I wish him the best of luck.  Not only because my own selfish interests wish well for Seattle, or because Boeing is the strongest exporter fighting in our national balance of trade war.  Mostly I wish them well because the whole country needs to see a large company that clearly lost its way in the last century regain it in this new one.

While on a plane for hours a few days ago, I found myself drawn into the inflight “entertainment”.  Among some interesting fare (a classic Everybody Loves Raymond among other things) was the usual self-serving drivel from the airline, and a strange infomercial about a Marriott hotel in Florida.

It was a weird piece, several minutes long, devoid of any real information and filled with cliches.  I had seen it on the outbound flight, and it struck me as unusually sappy.  On the return I was overwhelmed.

As with any hotel propaganda, there were the required panning shots of the lobby, the pretty girl diving into the swimming pool, the enchanted couple gazing into each other’s eyes over plates of tiny morsels of food, and the family happier than any other you’ve ever seen after a long plane flight.  And the interview with the manager was insipid, with so much for me to love: “our outstanding personnel” and other ridiculous HR miscues.  But the thing that struck me the most was:

We pride ourselves in exceeding our customers’ expectations every day.

I’ve always had trouble with this whole concept of “exceeding your expectations”.  It was obviously created by marketing people from words that seem to sound good, but what does it mean?  Let’s examine it…

What are my expectations?  When I go to a nice hotel, I expect a clean room, a nice bed, no bedbugs, and quiet.  Hard to exceed those…  Hermedically clean?  Anechoically quiet?  Less than zero bedbugs?  OK, that’s simply being petty and splitting semantic hairs.

But, really, how do you consistently “exceed my expectations”?  Only by me expecting to be disappointed in the first place, or by having your market placement so far off base that you trick people.  Either of these are failures on the part of the company.

If I go to a Motel 6, I don’t expect Four Seasons level service.  So if I get it at a Motel 6, something’s wrong.  The Motel 6 is wasting money providing services to people who aren’t looking for them, and probably losing a boatload doing it.  And it’s impossible for the Four Seasons to exceed my expectations, because I expect them to be the best.  Anything less is a failure.

All of this plays hell with the employees.  It’s like saying: “set a really low bar for our customers then surprise the heck out of them by being competent.”  Expecting your employees to do daily slight of hand with their level service isn’t a good thing for business, it’s a sure path to frustrated and disgruntled people.

So, please, stop “exceeding my expectations”.  Just set a really high bar, and meet it every time.  Consistency is what matters, not the occasional random overshot.

Ford Five Hundred SEL

It’s a topic I cover at length in my upcoming book.  Sometimes you can tell a great deal about a company from distance, without even crossing the threshold.  I find it often in advertisements, press releases, and especially in products.  Today I found it in the total lack of creativity in the naming and design of a product.  From a company that is losing market share hand over fist.

I pulled up behind a car today that made me do a double take.  It was a large black four door sedan, with a strong hint of styling of the large Mercedes sedans.  I saw the badging that said “SEL” on the right trunk.  I thought…  hmmm that’s one I hadn’t seen, seems like it’s off for MB.  Actually kind of ugly.  Wonder what it is?

To my complete shock, it was a “Ford Five Hundred SEL“.  A Mercedes knock-off that Ford didn’t even have the creativity to name with some imagination.  If you know Mercedes, you know that throughout the 80’s and 90’s their top of the line sedan was the 500 SEL.  As if to avoid lawsuits, Ford decided not to call it the 500, but rather the “Five Hundred”.  But I’m not fooled, and clearly calling the model the “SEL” was no accident.

Mercedes Benz S500

Of course copying styles in the automotive world is nothing new, and one shouldn’t be surprised to see a million look-alike boxes wandering the highways these days.  But this level of clear duplication is far beyond the norm.  Not only does the car copy many of the styling cues, but they blatantly stole the name.  If Daimler-Chrysler’s lawyers aren’t all over this, they should be.

But, legal issues aside, the part that is so depressing to me is the signal this sends to the world, and especially to the employees of Ford.  It says, quite loudly and clearly: “we have run out of ideas, and we no longer really care enough to be creative”.  This is a sad commentary for a company who’s marketing tag line is “Bold Moves”, and who’s young Chairman appears in their own ads stressing how hard they are working to be innovative.

Also sad is that this lack of creativity is from a company with a long heritage of innovation.  From the early days and Henry’s clear vision for the Model T, to the exciting years of the Mustang, and even later with the original “slip-stream sedan” of the 80’s in the Taurus, the company has a history of leadership in many areas.  And now this…

Perhaps the saddest part of this is that, from all accounts, the Five Hundred is a very good car.  It got strong praise from the automotive press, car buyers liked it, and the ever hard to please Consumer Reports loved it.  The engineers did a great job with this car, it was the product naming and marketing team that simply gave up.  And the sales show it.  One clear sign is that I first noticed this car almost two years after introduction.  Another is that the car is selling so poorly that Ford has cut production of the car.

All of this must hit all parts of Ford.  Think of the production team sitting there excitedly at the internal introduction of the car, and it rolls out as an exact duplicate of the world’s most prestigious brand’s flagship car.  One can only imagine how depressed they would be, how demoralizing it would be to have the Chairman talking about “bold moves”, and then send you off to make copies.  Exactly how hard would the sales force work to sell a car with the highlight being: “well, it looks and is named exactly like a car that costs twice as much”?  And how much does the public believe in Ford when their flagship sedan is so much a contradiction from their loudly stated objective of “bold moves”?

This all must just make everyone at Ford so depressed.  I know it did me, and I don’t even work there.

I found that I had to buy a mattress today.  What fun.  After a wonderful shopping experience at a number of discount places that didn’t have what I wanted, but whose employees sure had plenty of attitude, I ended up back where I started: Macy*s — part of the Federated stores.

Buying a mattress is not a difficult task, but apparently selling me one is.  Especially if you want one right away.

Yes, I really want it today.  I’m driving a truck, and I need the mattress now, so, yes, I want one that’s in stock, and yes, I’ll drive to wherever your warehouse is to get it.  I know that’s not what you normally do, but I’m sure it’s a reasonable request.

You’re going to charge me $20 to pick it up?  Please, I understand delivery charges, but I have to pay you to let me drive to the middle of nowhere, deal with your surly warehouse person, and load it into my own truck while he stands and watches?  Oh…  my…  god…

But that’s not really the point.  As I went to buy the mattress, I needed to use the restroom, which is conveniently next to the employee break room.  I love these places.  There is no better place to understand a company’s culture than the break room.  Not only do you get to see employees when they are not “on stage”, but you also get to see all the silly things companies post for their employees’ eyes only.  Some day I’m going to do a book of photo essays on break rooms…

Macy*s break room did not disappoint.  Like many big company break rooms there is a bulletin board with all kinds of things posted: the obligatory EEOC and other government notices, tired handwritten signs about not leaving food around, and notices about company meetings that happened two months ago.  There were also very high quality signs from HR that advertised 800-numbers to call for issues or questions, and a number of employee signs selling various household items.  Nothing special here.

Best of all, however, were two huge (1′ by 3′) signs high on the walls, in bright Macy*s red and black.  One said “TEAM WINS”, a sentiment that I found later was plastered all over the warehouse as well.  I’m not sure if that means “let’s rack up some wins as a team” or “being a team is a winning strategy”.  I’m sure someone knows, but not many care.

The other huge sign said “YOU COUNT”.  Beyond the wishful thinking of the HR person who created that sign, I’m not sure at all what this one meant.  Yes, I know what it means: you are valuable, you make a difference.  But I’m not sure if that means anything to anyone at Macy*s.  The employees surely decide whether they count more by the company’s actions than by a big sign in the break room.

I went back to finalize the purchase, and found two people huddled around a computer terminal, trying in vain to get the system to complete the sale.  My zip code was recently changed, and the system kept telling them “cannot deliver to that zip code”.  But remember, I was picking it up, no delivery was involved.  Doesn’t matter…  the system wouldn’t complete the sale with that zip code.  And it wouldn’t accept my old zip code, because that didn’t match the city anymore.  After 15 minutes, and two more people offering advice, they finally ended up moving me to the address of the warehouse, and were able to complete the sale.  Let’s just hope the mattress doesn’t get recalled and they send the notice to their warehouse.

I’m sure the employees struggling with the ancient computer system would much rather have had the company focus on new computers than on signs for the break room.  And I know that, as the team of them struggled to conquer the lame system, not one of them felt like they “counted” to Federated.  I’m confident they were frustrated and dreaming of greener pastures elsewhere.  So much for fancy signs in the break room…

The Ubiquitous Stanley Steemer Truck

Stanley Steemer is running ads (at least in the Seattle area) that are the first I’ve ever seen where a company is using their employee drug policy as a marketing tool.

In the ads, a pretty woman (housewife?) is shown with concern over letting strangers into her house, and with obvious relief that, because she called Stanley Steemer, there aren’t stoners invading her space.  The line is that not only do they get your carpet clean, but their employees are clean too.  I’ve got a FAQ that deals with the whole issue of employee testing, but this ad campaign raises a lot of questions for me.

First, although I’m not a marketing expert, I wonder about all the standard marketing questions: is this a real concern for potential customers, is this a differentiator (do their competitors have an obvious problem with this), and do people believe the message?  Even further, isn’t this making people who wouldn’t have otherwise thought about the issue of drug-impaired carpet cleaners now wonder about it and want to avoid it altogther (rent a machine and do it themselves)?  I certainly didn’t think of the carpet cleaning business as a particular hot spot for the drug crowd…  until this ad…

Then there’s the whole host of procedural questions:

• What do they test for?  Illegal drugs only?  How about alcohol?  What about prescription drugs?  Performance enhancing drugs?
• How often do they test?  Only on hire?  What if the person changes?  So do they test every month?
• What kind of a test is it?  Urine, which misses a lot of drugs, or blood which is invasive?
• Who do they test?  Just the people who clean the carpets?  How about sales people?  The people on the phone?  The managers?  The CEO?
• Are there exceptions?  Can I get out of it on religous grounds?
• What do they do with the long-time employee who suddenly goes dirty?  Fire them?  Keep them in the office?  Rehab?
• How much does this whole testing effort cost?  Could it ever be worth the expense?

Of course there are the many privacy questions.  What right does my employer have to know what I do in my off time?  And who sees the results?  Just HR?  My manager?  The health insurance provider?  The police?

Then there’s the issue of their relationship with their employees. “That’s right Sally, you have to pee in the cup before you can go to work.”  That sure builds a wonderful trusting relationship between employer and employee. “Yep, Bob, you have to be more sober to clean carpets than to play major league baseball.”  Please don’t get me started there…

But perhaps the most stunning part of all of this is that they don’t tell potential hires about this.  That’s right, nowhere on their web site is this drug policy mentioned.  I scoured their entire site, and especially their employment section, and there’s not a word about drug testing.  There are lots of flowery words about how wonderful it is to work there, plenty of encouragement for you to apply, but not a word about peeing in a cup when you do.  The first sign you see when you walk into many stores is “we drug test all applicants”.  But at Stanley Steemer, they apparently keep that a surprise for the potential employee while touting it to potential customers.

All in all this seems like a really bad move, and shows remarkably poor judgement on the part of the Stanley Steemer leadership team.  I’m sure it will be short-lived, quickly forgotten in the market, but long remembered in the company.

Right to the head of my observations on the importance of symbols to an organization marches the International Association of Machinists, District 751.  I’m not sure I could ever find a more perfect symbol of union’s gone wild than this one.

IAM Website

The IAM is the union that represents the bulk of the line labor at Boeing’s aircraft assembly plants.  This union is a key reason why Boeing’s employment see-saws from year to year, and was probably a key cause of the infamous billboards that read: “will the last one who leaves Seattle please turn out the lights” in the 1970’s. This union is famous for its hardcore stances, and its strikes at the expense of everyone involved, including their members.

Their website is symbolism enough, with the top “Job Info” links on the page being about what to do if you’re the “victim” of a job action or being warned of a layoff.  No, not about job training, or even joining the union, but rather “how did the company screw you today?”  Yes, that’s pretty good symbolism in itself.

IAM Sculpture

However, I had heard about the monuments in front of District 751 headquarters in Seattle for some time.  I just had to check them out for myself.  What I found was amazing.  Yes, they have a sculpture garden in front of the headquarters (where are your union dues today?).  And yes, one of them is of people actually working on an airplane.  Even better, it’s a man and a woman working — probably a nod to Rosie the Riviter of WWII fame.  Homage to a proud heritage of building some of the most amazing and world-changing machines to be sure.

IAM Monument

But the union saves their biggest and most elaborate monument to show their true colors.  The main monument on the site, the one with the American, state, and union flagpoles, and the one at center stage, it the most stunning.  This monument is not an homage to the workers and the incredible machines they build.  No, it is an homage to the striker.

The picture is hard to see, so let me guide you through the panels.  At the center is a pair of large “751″ symbols, above is a winged logo of the IAM, and behind are the three aforementioned flagpoles.  This is all good.

Mounument Panel

No, it’s the four panels on either side that are the clearest symbols (although not the best of photographs here).  The panels depict strikers carrying picket signs and gathered around a burn barrel.  For example, the leftmost panel (shown) has people carrying signs that read: “COLA”, “Paid Holidays”, “Seniority”, and “Union Shop”.  The second panel’s striker’s sign says “Hold the line 89″.  It is the panel to the far right that has the group gathered around the burn barrel.

What does it say about this organization when the most important monument is dedicated not to the good things that they do, not to the hard work of their thousands of members, and not to a spirit of cooperation and working together, but rather to how defiant they can be?  It’s like an homage to a six-year-old’s temper tantrum in the grocery store.

What it really speaks to is the mind set of the leaders of the union.  Here is a group of people who truly believe their finest hours have been not wins, but rather impasses.  They get their strength not as a group of leaders but rather as a mob.  Their top priorities are not really the welfare of their members as people, but maintenace of their union as a group.

I have strong opinions about unions, and I will say a great deal more about them in the future.  But I’m not sure I’ll ever say it as clearly as the IAM says it themself with this astounding monument.

I had the wonderful fortune to drive from Seattle to L.A. and back a couple of weeks ago.  You see a lot of nothing and do a lot of thinking in those 40 hours.  Spotted on a truck was this statement:

Providing customer solutions through trust and innovation.

OK, so now the quiz: what does this company do?  The answer is at the end (no peeking).  Your choices:

• Computer systems integration
• General freight handling
• Food services distribution
• Electrical contractor supply

I’m a huge believer in visions.  I think every organization and every project needs one.  You simply can’t have too much focus on a team — people really need to know what they are doing and why.  It’s not optional.  It’s so important the better part of a chapter of my upcoming book is devoted to it.

But quality is at least as important as quantity.  Just opening the corporate buzzword dictionary and choosing at random doesn’t work.  Take this example.  Please.

There just is nothing there.  What the heck does this mean?  How does this inspire?  What is a “customer solution”?  How does this help me do my job?  Can I make any decisions based on it?  What would I choose to do or not do based on this statement?  I have a lot more to say about visions, why they are important, and how to develop and use them.  But let’s just make one thing clear, this statement is worse than nothing.

If you are an employee at this company, this statement is painful.  Not only does it not mean anything, you can be sure it was rolled out with fanfare and lots of sincerity.  You probably sat there at the announcement and went “huh?”  You couldn’t believe what you were hearing.  You thought: “the CEO and his team spent months and how many thousands of consultant dollars to come up with this?  What a waste.”  You wondered why they didn’t put the energy into fixing the stupid products we sell, or the health care plan, or the silly payroll glitches, or heck, even the toilet in the bathroom.  You are deeply depressed.

This vision is worse than no vision.  At least with no vision, the employees don’t know the management team is a bunch of idiots.  As the old saying goes: better to say nothing and be thought a fool, than to open your mouth and remove all doubt.

Much more on visions to follow.  But in the mean time, your answer: it was a food services company.  They move boxes of Cheetohs from the warehouse to the grocery store.  Where are the “customer solutions” there?  What “innovation”?  Sheesh…

One of the hot button questions these days is what kind of testing should you do on potential hires.  There are a number of aspects to this question, and there are moral, legal, and psychological implications that need to be considered.

First, it’s important to consider what type of testing we’re talking about.  Some that people consider are: drug testing, skills testing, and psychological testing.  Note, this is not a discussion on background checks, which are discussed in another FAQ, but rather the kind of testing you administer before you hire someone.

Drug Testing

Drug testing is an extremely difficult subject.  For many organizations, it is simply not optional.  They have people in dangerous, secret, or sensitive positions, and testing is required by either law or insurance.  My advice to those groups is simply to have very strict, consistent, and professional processes, and get on with it.

For the rest of the world, I’m not a big fan of drug testing.  The distrust it shows to your potential new hire is huge.  Like copy protection schemes in software and/or music, or prenuptial agreements in relationships, it assumes that everyone is wrong, and you need to weed out the few honest people from the mass of criminals.  The implied message to the new hire is corrosive.  They have to be thinking, “if the first thing they want out of me is a cup of my urine, what else is coming?”  For one company’s interesting take on drug testing, check out this post.

And, let’s be real, if they have a drug problem that will interfere with their work performance, you should be able to tell it in the interview or at least in the first few weeks of work.  If it doesn’t show up until later, then that means you need to have a regular regime of testing.  That starts sounding scary.

Finally, if it doesn’t interfere with their work performance, frankly, I don’t think it’s your problem.  So why test for it?

Skill Testing

Skill testing is another matter altogether.  I strongly believe that you want to check potential hires’ claims of ability against reality.  The question is how to do it most effectively, and least insultingly.

At Microsoft, there is a heritage of doing the “interview from hell,” where the candidate is subjected to a battery of abuse by a parade of interviewers.  Examples of this are shown in the book “How would you move Mount Fuji” by William Poundstone (ISBN: 0-316-77849-4) which chronicles how Microsoft, and other companies, use puzzles to get at the meaningful question of “how smart is this person?”  I discuss this an much more about recruiting and interviewing elsewhere in the “recruiting” category.

But more common is specific skills testing such as having the candidate take a multiple choice test to examine their skills with some required computer programs, or to test their specific industry knowledge.  These multiple choice tests don’t get to the question of how smart a person is, but they do check to see if they are lying on their resumè.  If you have a lot of candidates and really need to separate the wheat from the chaff, then multiple choice tests like these are OK.

To find out how smart someone is (a very important question) you have to ask questions that draw out how they think.  You have to watch them solve a problem and see if they can work effectively through it.  That’s where “Mount Fuji” comes in, and that’s a discussion for another FAQ.

So, if you have very specific skills requirements, and a lot of candidates to screen, then I guess it is OK to do multiple choice tests.  But here again, you have to think about the psychological effect it has on the candidate: their first interaction with your company is the firm questioning their integrity.  Ugh.

Psychological Testing

Finally there is the battery of psychological testing that some firms use.  This is, plain and simple, a ridiculous waste of time and an insult to the candidate.  If you’ve ever taken, given, or read the results from these tests (such as Myers-Briggs, and others) you know how silly they are.  These tests are just this side of Nancy Reagan’s astrologer.  You can no more find something useful or valuable about a person from this kind of testing that you can from reading the leaves in the bottom of their tea cup.

The real issue is that, even if these tests were valid (which I truly doubt), even if people didn’t game them (which I believe everyone does), and even if they could put you in some magic bucket, what do you do with it?  Do you go into a recruiting situation knowing exactly what type of person you need for an opening?  Have you ever been able to predict how a person would work in a group?  Or how the group would react to a new person?

Teams are not predictable.  The chemistry that makes up a team is delicate, volatile, and mysterious.  Sometimes you have a laid back team and need to add an aggressive sort, you do it, and the team rises to new heights.  Other times, you do it and the team falls apart.  There are just too many variables, too many subtleties, too many types of people.  Trying to categorize people and predict how precisely they will effect a team is a hopeless case.  Don’t try it.

These tests can’t tell you if you the candidate will embezzle, or even if they are an axe murderer.  And the downside is, again, the effect they have on the candidate.  Again you leave the candidate thinking: the first thing they ask me is if I like the color red, and if I prefer dogs over cats.  Give me a break.

Summary

So, it’s simple: drug test if you are required to, skill test if you have a specific set of requirements and a large number of candidates, and don’t bother with psychological testing.  Instead of most of these, trust your instincts, ask tough questions, and listen, listen, listen.

Boyd Coddington

It’s my guilty pleasure that some reality TV shows draw me like a moth to a flame.  One of my favorites is Discovery Channel’s “American Hot Rod”.  The show ostensibly chronicles Boyd Coddington and his team while they build world-class custom cars.  For anyone who knows much about cars (and I speak as a reformed addict), Boyd’s name is well known.  He was one of the originators of the over-the-top custom car back in the late seventies, and is an icon in the field.  But you don’t have to even care about cars to gain huge insights into team building and management from this show.

I’m sure the creators of the show (including the reknowned Thom Beers who discovered Jesse James) went into it expecting simply a spin off from the world of custom motorcycles that made them, Jesse, Monster Garage, and other shows like it huge hits.  These shows are among the most profitable for DSC.

But they got much more than they bargained for with American Hot Rod.  Boyd and crew are perhaps the most disfunctional team since the Bundys of “Married with Children”.  The show features such teambuilding highlights as:

• A CEO (Boyd) who is gifted, revered, an industry icon, and a teddy bear, but who also micro-manages, sets ridiculous schedules with no input from below, ignores criticism, changes his mind depending on who he last spoke to, won’t admit when he’s wrong, and thinks everyone with a differing opinion “has a problem”.
• A line manager (Duane) who is a worse micro-manager, has little patience for the challenge of managing his team, treats everyone like dirt, curses like a sailor, blames everyone but himself for the problems, and lets Boyd walk all over him.
• Projects that routinely are underscheduled by half, causing the team to have to work 18 hour days seven days a week on a routine basis.
• Line employee turnover that is terrible, with the team going from 20 to 5 in the most recent episodes — with people leaving for lousy reasons, and leaving to no other job (a clear sign of major cultural issues).
• A business model that clearly is bankrupt — the only new customers are Boyd’s old friends, and the shop is always half-full.

I watch on a weekly basis as these factors collide in fantastic displays.  Of course, they always finish the car, and of course the team always is smiling on conclusion, but the show couldn’t be a better teambuilding course without resorting to PowerPoint slides.  I find myself pausing the Tivo about every five minutes: “hmmm, let’s see, can I think of five better ways to have handled that?”  Usually the answer is “yes.”

I watched an episode from a week or two ago last night, and I caught myself screaming at the TV.  The team lost two members, one who actually called Boyd and Duane on their ridiculous behavior, and another long-time, well-respected member left “to freelance”.  Boyd’s response to the former was “he really must have some problems” and to the latter it was “well, he had made up his mind”.  And to top it off, Boyd had to shut down his wheel business due to poor sales.  I was in pain, as I always am when I watch teams disintegrate due to lousy managment.  I wanted to call him up and offer my services for free…  but I guess I’ll wait for him to find me.

Anyway, if you are looking for a guilty pleasure, and some killer lessons on how NOT to run a team, catch Discovery Channel’s “American Hot Rod”.

I needed some stamps and stopped into the post office today.  Miracle of miracles, there was no line.  At the counter she tells me “these new stamps have the ‘39 cents’ on them now.”  OK, I admit, I’m not strong enough to let that one pass: “well that ought to be good for a few weeks,” I said.  Those were the last words I got out in the next five minutes.

She gave me a history of stamp price increases in the last five years, a diatribe on GWBush’s stance on postal pensions, and a prediction on the future of the postal service’s finances.  The line behind me began to form; I simply wanted to buy two rolls of stamps.  It became increasingly uncomfortable.

Of course, the post office is where the term “going postal” originated, and like most stereotypes, it’s based in some elements of truth.  No, I didn’t expect her to whip out an uzi and start sawing us down, but it got me thinking about the messages all team members send to the outside world.

Most companies don’t think enough about the subtle (or even blatant, as above) messages their front-line people are giving to their customers.  Do the people touching their customers understand the vision for the company?  Do they agree with it?  Do they actively support it and work toward it?

Five uncomfortable minutes in the post office had me wondering what life was like well behind the counter, and in the lunch room.  From this quick encounter, I know I wouldn’t want to work there, and if given the choice, I wouldn’t shop there.  Are your people having the same effect?

As if all the other things about HD weren’t enough, Bob Nardelli of Home Depot ruled with an iron fist over their annual meeting the other day. Reports are that he controlled all the discussion, allowed no dissent, and brushed off concerns over his massive pay package.

Perhaps most shocking however is that not a single member of the board (or at least the compensation committee) showed up.  That’s right, one of the most over-paid CEO’s in America holds an annual meeting and no member of the paymasters decides it’s worth their time to see what the owners think.  Sad.

Apparently it went so poorly that HD’s PR team issued a release saying that the company “apologizes if the absence of the board offended anyone” (or something like that).  I guess even the most strident generals realize when they get caught with their junta down.

Not long after Home Depot’s Bob Nardelli unleashed his silly PR offensive designed to get him more money (see the post here), he managed to get someone to whip up an article designed to show he reads management articles too.

The Harvard Business Review’s Ram Charan wrote a puff piece on “Home Depot’s Blueprint for Culture Change” in the April 2006 issue.  I’d love to give you a link to the article, but the HBR is subscription only content (you can, however buy this article for $6 here).

This article is PR work at it’s finest.  Sure the HBR requires there to be some real content, and even perhaps some kind of learning about how to do thou likewise.  But the miracle here is the stench of spin.  You can smell it in the lead in:

Deep, lasting culture change requires an integrated approach that remodels a company’s social systems.  The leadership team of Home Depot employed a remarkable set of tools to do that.

The remarkable set of tools was “boot camp”.  See my blog entry on that here.

But, to be fair there are some really interesting ideas in the article about how to catalog change, and monitor what is happening.  The problem is, it didn’t work at HD.  And I know why.

This culture change didn’t “take” because it didn’t go deep enough.  It was decided by the top 17 executives at an offsite meeting.  It was rolled out in a “huge event” to another 1,800 more.  But Home Depot has over 345,000 employees in over 2,000 stores.  That means fewer than one-half of 1% of the employees even got briefed on this big change.  And 0.005% of the employees had input.  No wonder they hate the required Monday morning “BobCasts”.

Bob, sir, forgive me, but even in the military you have to explain things to people, get their buy-in, heck even consider that private’s opinion.  This fancy “culture change” ain’t working, and no amount of force-feeding’s going to make it work.  But you don’t care, you’re off to the bank.

PS - The author, Ram is to be forgiven — he was the consultant working on the project for HD.  He’s just trying to get a little PR for himself.  You can be sure he didn’t get anything like Bob’s pay package…

For crying out loud, it is one of the most touchy yet most important elements of organizational culture.  I mean, holy f%&*ing christ, few things draw such a clear line between those that do, and those that don’t.  Of course, dumbs*&t, I mean cursing in the workplace

With the simultaneous resurgence of religous zealotry and the decrease in workplace formality, a conflict was inevitable.  Some workplaces are church-like in their genteel nature, and others sound like army bases or truck stops.  What’s a person to do?

Well, as in most things, there are a number of perspectives to consider.  Do you swear or not?  Does the workplace swear or not?  Should you try to change it (or you) one way or the other?  It’s really not that simple, is it?

And perhaps I’m not the most objective observer.  I’ve grown up in workplaces where cursing was not only acceptable, it seemed a badge of honor.  So I have a potty-mouth.  As you can guess, my wife loves it…  [not].  But I have learned, over the years to be a cursing chameleon, and I think that works.

My rule of thumb is not to let the first one slip, until I hear someone else offer it up.  Then I just try to tune my mouth to the surroundings.  If everyone uses profanity with every breath, I increase to about 50% of that level.  If the place is a church, I’ll be right there with them (unless I get my hand smacked by a stapler…  then all bets are off).  This seems to work, and doesn’t make me appear too much of an outsider.

But what if you don’t swear, think others shouldn’t either, and yet work where they do?  Should you try to change your little corner of the world?  Well, sure, if that’s your calling.  But prepared to be disappointed, ridiculed, and even ostracised for your efforts.

If you decide to take on the challenge of a curse-free workplace, you’re in for a tough job.  It is a deep part of culture and habit, and the mission won’t be easy.  Take it slow, make sure you’re on good solid footing otherwise, and quietly eat the elephant one bite at a time.

Pick a likely target and privately, quitely have go at the “you know, it wouldn’t hurt if you toned it down a bit” conversation.  Be sensible, be reasonable, and set your sights low.  Don’t make it a key issue, don’t wave your opinon in peoples’ faces, but over time just let everyone know you’d prefer a different style of speech.

And don’t be surprised if you get told how effing silly you’re being.

Back in March Home Depot unleashed what could only be called a PR offensive [ed: pun intended].  There was this great BusinessWeek cover story, a couple of other minor articles and mentions, and then a Harvard Business Review piece, all about how Bob Nardelli was wonderful.  Heck, the BusinessWeek article was even titled:

Renovating Home Depot
Skip the touchy-feely stuff.  The big-box store is thriving under CEP Bob Nardelli’s military-style rule.

But the problem is, it’s a PR crock.  By any measure Home Depot is not thriving, the people there hate it, and it shows — all the way through to the check-out line.

Sure the article(s) talk all big about ex-marines, and “tough under fire”, and all that junk.  But the point of fact is the retailer is not the military, people don’t like being treated like that, and the stuff doesn’t work.

Walked into a Home Depot lately?  Tried to find help?  Tried to find someone who cared?  Tried to find something you went in wanting to buy?  It’s a nightmare.

Just for fun, pull an orange apron aside and ask them what they think of the place.  But only if you have an hour to spare.  They will rant all over you, and endlessly — like they have nothing better to do.  Ouch.  And the BW article even alludes to this: “Some describe a demoralized staff and say a “culture of fear” is causing customer service to wane.”  Executive turnover is rampant.  And Bob’s pay package can’t help (see this entry).

Customers see it too:

The University of Michigan’s annual American Customer Satisfaction Index, released on Feb. 21, shows Home Depot slipped to dead last among major U.S. retailers.  With a score of 67, down from 73 in 2004, Home Depot scored 11 points behind Lowe’s and three points lower than much-maligned Kmart.

And perhaps just as importantly, it doesn’t work in the market, either.  HD’s results are pitiful: Since the day before Nardelli’s arrival on Dec. 14, 2000, Lowe’s split-adjusted share price has soared 210%.  Home Depot’s is down 7%

So, tell me again how great this military stuff is, Bob?

Microsoft just announced a number of changes in personnel policies designed to improve sagging morale.  Good for them.  It’s the result of a year of work by a longtime colleague of mine and now SVP of HR, Lisa Brummel.  According to the reports, she spent a year listening to people and came up with a range of changes designed to stem the tide of people leaving.

Most news reports have focused on things like putting towels back in the locker rooms and giving senior people more stock, which are all well and good.  But one point that was overlooked and seems intriguing is the changes they made to the scoring of performance reviews, a personal hot button of mine.

For decades Microsoft has done performance reviews with a rating system that was graded on a 10 point scale, from 0-5 on 0.5 point increments (in a rather silly attempt to avoid the look of a “beauty contest”).  The ratings generally went like this:

• 5.0 – You walked on water, then turned the water into a nice Merlot.  Almost impossible to reach, given to maybe one person a year, I saw perhaps 5 in my career there.  Used to mean you would get a surprise 1-1 visit from BillG in your office.
• 4.5 – Outstanding work, really above and beyond the call.  Used to mean something like 100 hour weeks, and with amazing results.  Hard to get more than one of these without a promotion.  Very small percentage of people: < 1%.
• 4.0 – Great work, excellent results, clearly leading the pack.  Something like 10-15% of the people would get this score.
• 3.5 – Solid work, well done, everything is fine.  Most people (e.g. 70+%) would get this score.
• 3.0 – You have a number of things to work on, some of them are threatening to your livelihood.  You must improve or you are at risk.  This was managed by HR to be about 10% of the team.  There was always pressure for managers to give someone a 3.0, although the 10% was never rock-solid.  But come on, SOMEONE on that team isn’t doing everything perfectly.  If you got a string of 3.0s you are in trouble.
• 2.5 – This is the first step before the exit.  If you get a 2.5 and don’t get fired, it means you got the message.  If you get a 2.5, you had better either have an exit plan, or be working your butt off to save your job.
• 2.0 – Security is waiting outside my door to take your badge and help you pack.
• 0 – 1.5 were unused.

This system worked fine for years (e.g. the last 25 years), but was always a source of complaints.  Some people didn’t like the subjective nature of reviews –- come on, performance reviews are subjective, that’s why you do them.  Some people didn’t like being rated like cuts of beef (oh, get over it, you’re rated every day by your salary, by your peers…).  But the biggest point of pain seemed to be the requirement for people to give a reasonable percentage of people a 3.0 or lower.

This can be seen as a Jack Welch’ian “toss out the bottom 10%” but in fact it just stemmed grade inflation.  And reasonably speaking the world is not Lake Woebegone where everyone is above average.  Some people in every group need to improve.  So Microsoft required groups of more than just a few to have something like 10% rated 3.0 or below.  This is just reasonable.

Now, in this new system they have gone away from numbers and gone to words.  As I understand it, there are now three categories: “Exceptional”, “Strong”, and “Needs Improvement”.  Seems to me that is the same as 4.0, 3.5, and 3.0 — but nobody asked me.

More importantly, however, this has made a good system worse.  Not at the bottom of the scale, where it simply replaced a number with a name — they still need to worry about grade inflation, and there will still be groups that get told “oh, come on, you have to have at least some ‘needs improvements’.”  No, my concern is where it should be: at the top.

Rewarding good performance is at least as important as correcting poor performance.  And now Microsoft has lumped all good performers together in a lump.  No longer will the true stars stand out from the really hard workers.  No longer will people who achieve “Exceptional” (aka “better than average”) have motivation to strive for more.

And why did they change this?  Because people at the bottom were offended.  Ouch.  Seems like a big mistake to me.  I’m a huge believer that the best performers aren’t just better than average, they are 10 times better than average.  You need to worry more about those people than anyone else.  This seems like a move in the wrong direction.

Job titles serve a number of purposes, and treating them lightly is done at your peril.  Job titles help to indicate organizational structure to newcomers and outsiders, they tell people the relative importance of the person they are working with, and they reward their holders.

Some companies are famous for their disdain for titles, even mocking them, using titles such as chief humor officer, head honcho, and the like.  Imagine what the new person, especially from another culture, thinks when they see “head honcho” on a business card.  Even if they do understand what the words mean, they either think this person is a joke and not worth working with, or they are confused as to who this person is.  Are they so important that they can get away with this joke, or are they such a low person that no one cares what they put on their business card?

These people are missing an important aspect of titles: they communicate to people you meet, in a short and easily understood format, where in the organization this person stands.  You see a business card that reads “CEO” or “Managing Director”, and you immediately know that this is the top person in that organization.  You can assume they have the power to commit the other organization to agreements you might make.  If you see “vice president” you can tell they are not a peon, but that there will be more work ahead to get a commitment on behalf of the entire company (especially if it’s a bank, where VPs seem to multiply like rabbits).

Having titles that are clear, common, and well understood is very important.  Choosing “Top Dog” over CEO may seem cute at the time, but it can reflect badly on you and your company.  In that respect titles also can communicate company culture, where Top Dog may be fine for a surf shop, but not good for an auto parts manufacturer.

Some use titles to communicate other aspects of culture.  For example, in the US choosing Managing Director over CEO sends a message about the company, and perhaps its heritage and even ownership.  Many feel that this lends a sophisticated European air to the firm.  Of course, that can be overused and even ridiculed, but it is one example of where titles can be used to present one element of organizational culture.

Finally, titles are seemingly vital to their holders.  Some employees get so wrapped up in their title, that concern over it can get in the way.  Even I am guilty of this, writhing in pain over being simply a Vice President of Human Resources at Microsoft, rather than “Senior VP” or “Executive VP” (or, heaven forbid “Chief People Officer” {ugh}).  For me it was a matter of respect among my peers in the outside world, where every person in a comparable position in a Fortune 500 had a fancy title.  In the end, it really didn’t matter, but I only realized that years later.

This leads people to use titles as compensation, but that’s another question, and you can find that in “Can Titles Be Compensation?”

So, all in all, yes, titles are really important.  Design a clear organizational structure, assign clear, common, and well-respected titles, and dole them out sparingly.