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April 15, 2010
Avoid Hiring Disasters by Knowing Culture
September 17, 2009
Filed under: Cultural Alignment, Organizational Culture, Talent Management/Recruitment — Mike Frommelt @ 5:23 pm
The following article was published recently in the Entrepreneurs Organization online newsletter, Octane. It is the story of a client of KeyStone’s who made a hire on their own and regretted it due to a poor cultural/values fit. The story is true, of course, the names have been changed to protect the innocent. Read the article HERE
Get it Right the First Time
September 16, 2009
Filed under: Cultural Alignment, Leadership, Organizational Culture, Talent Management/Recruitment — Bob Schoenbaum @ 3:36 pm
Why is it that some 40% of new CEOs are fired, or “retired,” within their first 18 months, and 64% of them never make it to their fourth anniversary on the job? Virtually all of our business at KeyStone Search with founder/CEOs happens after they’ve had one or more failed hires for the same position. These clients are reluctant to spend dollars on executive search and only take the plunge after they understand first hand the significant costs of hiring the wrong person. They have experienced the costs of lost momentum, stunted growth of the business (or losses, worse yet), direct severance package costs which can be one to two years salary and benefits and staff turnover due to stress created by the failed executive. These CEOs understand the business can’t afford another hiring mistake but don’t know where they went wrong. They only know that the person failed on the job. The individual had a track record of success, was poised and confident, and had all the “right answers.” Therein lies the beginning of their problems… they didn’t ask the right questions! The CEO probably didn’t probe deeply about the things that matter - values. They didn’t ask about values or didn’t know what values they were looking for! Values such as honesty, integrity and work ethic are meaningful, yes, but more important are the values that are unique to your organization. Many entrepreneurial leaders haven’t defined the unique core values that drive their company’s culture. Having the right skills and experience and being successful in one company only translates to success in another company when there is a match with that company’s values and culture. Nat Stoddard and Claire Wyckoff are the authors of The Right Leader, Selecting Executives Who Fit. They suggest that to ensure that a leader fits, two key changes to the traditional selection process must be introduced. The first change is to rigorously define and measure the organization’s overall culture. The second change is to carefully assess the final candidates’ characters–their values, beliefs and business philosophies. The mantra “If you can’t measure it, you can’t manage it” applies to culture and character just as well as it does to Six Sigma or Lean management programs. The recession will be over some day, but the world is only getting flatter, and the business landscape more competitive. Do whatever it takes to understand, identify and create a common language to describe your unique culture. Then, dig into more than candidate’s skills and track record. Don’t wait until the next time you’re losing sleep over a bad hire to think about adding values to the hiring equation. Bob Schoenbaum
Culture in 1 Word
June 29, 2009
Greg Huang, editor of Xconomy Seattle (xconomy.com) had a great idea. He decided to ask six Seattle area start-up CEOs to describe their corporate culture in one word. Of course, he went on to write about the results of this experiment in Xconomy on 8/21/09. He aptly titled the article Six Startup CEOs on Their Company Culture, Boiled Down to One Word. I happened to read the article at the time and found it slightly interesting that none of the six CEOs used the same word to describe their cultures. Since then, both Robert Buderi of Xconomy Boston and Bruce Bigelow of Xconomy San Diego have picked up the ball and conducted similar experiments in their cities. Again in each case, the CEOs were of startup organizations and again, none of the words used to describe their culture was a duplicate of any other. In fact, of the 18 companies/CEOs interviewed, the same one word description was never duplicated. I believe that these studies, although certainly scientific or conclusive, point out something very important about corporate culture. I am a firm believer that every corporate culture is unique and different, as unique as the individuals that lead them and work in them. Yet, even I am shocked that out of 18 start ups there was not even one duplicate in the group. One would assume that these organizations have alot in common -being start-ups they are trying to grow rapidly, many are likely to be raising money to fund growth, and certainly all are working hard to get the most out of their probably scant resources. Yet when asked to describe their cultures, they were all unique. Descriptions ranged from “paranoid” to “focused” to “cool” and even “humble”. In our practice here at KeyStone we have found that cultures, just like individuals, are extremely multi-dimensional. Trying to group them into smaller categories is difficult and I believe it can actually can be dangerous. For example trying to categorize all the companies in the Xconomy articles under the label “start-up culture” (a term I’ve heard numerous times) would be a big mistake. Others terms I hear frequently are “Public Company Culture”, “ESOP Culture” and “Family Company Culture”. Although these types of companies may have some things in common regarding their cultures, lumping them together and making decisions (strategy, hiring, training, process) based upon them would be a crucial mistake. Great articles - I hope Xconomy keeps these coming in their other cities, I would love to see the results! Mike Frommelt
Culture Emulates Leadership
May 27, 2009
I read a very interesting article today in the New York Times regarding the corporate culture of Apple. The article, titled “Apple’s Obsession with Secrecy Grows Stronger” outlines what the author insinuates is a cultural norm within Apple, to maintain near absolute secrecy regarding their inner-workings. Among other evidence to support the theory, a former employee is quoted as saying “ “They make everyone super, super paranoid about security- I have never seen anything else like it at another company.” Of course, this seems very legitimate and in fact, prudent, given the way new and innovative ideas/technology can be stolen these days. However, it would seem Apple takes it to the extreme, striking myself (and the author) a bit odd in our current “share everything”, “meet me on Facebook” society. The article goes on to describe the private nature of Mr. Steve Jobs himself. Certainly, anyone who keeps up with the world of business even a little bit, is aware of the attempt to keep Jobs’ recent health issues a secret. Of course, this ultimately proved impossible, and now some are even accusing Apple of a intentional campaign to mislead the public. One could make all kinds of conjecture on Jobs’ motives, and many have, but I doubt we’ll ever know exactly. Nor does it really matter in my opinion. What is through all of this, is that Jobs’ is a very private guy, both personally and professionally. I for one agree wholeheartedly agree the author that this style, value, behavior, or whatever you want to call it, has indeed shaped a key part of the overall culture at Apple. In giving public speeches regarding corporate culture, I advance the opinion that approximately 70-90% of any company culture can be identified by investigating the CEO at a “core values” level (assuming they aren’t a new CEO hired from outside the company). My point is the CEO ultimately creates the reward system within the organization and they do so according to their core values. Put simply, what they punish, tolerate, reward, ignore etc… becomes the standard of behavior. This nearly always sparks a question, and sometimes a vehement disagreement from someone the crowd (which is exactly why I say it). “That cannot be possible in a large company” an audience member once yelled out. ”It just doesn’t make sense that one person can ultimately dictate culture for thousands of employees”. I don’t know if the ”70-90%” statement above is accurate, I say it more to make a point than anything else. However, one thing I do believe wholeheartedly, is that culture is driven by core values, and the higher level the leader, the more effect their core values have on the overall culture. I’ve seen it too many times to believe anything else is possible. Going forward I’ll be adding Jobs & Apple to my list of examples. Mike Frommelt
The business of The Boss (Springsteen that is)
May 8, 2009
A couple of weeks ago, I had the pleasure of attending a Bruce Springsteen (and the E-Street Band) concert at the Xcel Center in St. Paul. I’ve been a Springsteen fan for many years, going back to high school - nearly 25 years ago. I’ve had the privilege of seeing the band live 6 times over the years, and I have always been amazed at the talent, the energy and of course, the music itself. However, this time around, I found myself marveling in a new way; Pondering business lessons we all could take from Bruce and the band. I know, I’m showing my age, and maybe my nerd factor. First of all, consider the signs of the band’s success. Other than a few short breaks, the band has been together for almost 40 years. That’s right, 40 years. The Wild, The Innocent and E-Street Shuffle came out in 1973 and the ‘break through” album, Born to Run came out in 1975. If longevity says anything about success, these guys have it. Also, I’ve got to assume Bruce and the gang are not living check to check, so if that’s how you define success, they’ve got it there too. An amazing collection of work that will last many lifetimes… By just about any measure the band is incredibly successful. Here’s the ways I think Bruce and the band hit it on the head in regards to business. 1)The Hedgehog Concept/Stick to what you know - Choose what you can be best at and focus on it. Bruce and the E-Street Band just make great music and perform great live shows. Not much else. Rarely do you see Bruce anywhere other than on stage. Not many interviews, no “experiments” in acting, or anything else. Obviously, they know where their bread gets buttered and they stick to it. (I’m intentionally skipping Little Steven’s foray into acting on the Sopranos, not worth mentioning). 2) Humble leadership/Set an Example - The Boss is obviously in charge while on stage, but he also works hard to ensure he never upstages the band. The famous “introductions” of the band (if you’ve been to a concert you know what I mean) are actually one of the most exciting points of the show. In most shows, Bruce will also give the band a break while he comes out and plays alone for awhile. The boss working just as hard, or harder than their staff?Now that’s a unusual site these days. 3)Enjoy your work/shared core values- When you see the band perform, they really look like they are enjoying it, and enjoying each other. Is it all an act? Maybe, but if it is, it’s a darn good one. Hard to believe they could spend that much time together purely for the money. This is where I will also take a little leap and say that most likely, the core values of the band are well aligned. Again, hard to believe they can work together that long, and put on such high quality performances unless their beliefs (at least in terms of work) were similar. 4)Customer Service/Delight the customer - Anyone who has been at a Springsteen show knows about their desire to delight their fans. When I first saw Bruce in the 80s, they played for over 4 hours. This past show was right around 3 hours, but given the band is getting on in years, I’ll concede them an hour of jumping, dancing, sweating and singing their guts out. I’ve seen many other performers over the years and never have I seen a show that has the same enthusiasm, length, or spririt of a Springsteen concert. In fact, over the years, I’ve taken people to the show who were previously not even fans and through one experience they became big time followers. Also, along these same lines, I can’t even imagine how sick the E-Street band is of playing “Born to Run”. Yet, every show they play it, and play it like it’s still a top 40 hit. Give the client what they want and they will continue to come back. I could go on, but you get the point. This entry was not intended to be a hard hitting business education piece anyway. In the end, I guess you could totally disagree and say “It’s just rock and roll” - but maybe not. Mike Frommelt
Hiring People Who Share Your Values
April 21, 2009
Filed under: Cultural Alignment, Talent Management/Recruitment — Mike Frommelt @ 3:06 pm
Jim Collins is featured in the most recent episode of EOtv (Entrepreneur’s Organization) discussing his 6 attributes for the “right” employees in any organization. As with most of Collins’ writings/speeches, I agree wholeheartedly. Assuming all of your employees and new hires had these six attributes, organizational alignment and subsequent growth/profitability would be relatively easy. However, this is much easier said than done. Knowing these six criteria (below) will ensure “right” hires is one thing, but being able to accurately assess that candidate sitting in front of you is a whole other ballgame. Collin’s list of six is as follows: I’m going to expand a bit on number one, because I believe it is absolutely the most important of the six! In fact, if you can be sure that a candidate inherently shares your core values, much of rest of Collin’s list will naturally fall into line. This is not to diminish the other 5, I think they are very important as well. However, evaluating candidates on these 5 is much more straightforward than ensuring that candidates share your core values. Sharing Your Core Values I believe there are four key things to consider and incorporate into your interviewing process to determine whether or not a particular candidate shares your core values. 1) Know thyself. Before you can assess whether or not a person shares your company core values, you must know what your real core values are! This may seem like a no-brainer, but it’s amazing to me how many organizations I encounter who have never really defined their core values, or have never defined them honestly and accurately. Creating core values statements was a very hot thing to do in the 90s, and thus, many companies have a statement somewhere. Often its buried in the “About Us” section of their website or tucked away somewhere in the HR offices. Many of these statements were written by the Human Resources Dept., or worse yet, Marketing. Consequently, they all read something like this, “XYC Company has a proud history standing for exceptional customer service, uncompromising integrity, impeccable quality, blah, blah, blah”. Core values are the underpinnings of your behaviors as an organization and if they merely describe all the virtuous things you would like be, versus what you really are, you take all the life (and usefulness) out of them. Employees quickly recognize the incongruencies and quickly dismiss the whole thing as nothing more than the latest “program”. In fact, when a values statement is done right, it may not be something you want to share with your customers or the general public at all. Values statements should be a barometer and a guidepost for internal behavior, not marketing speak. 2) Apply them. Once you feel you have identified your values accurately, then you can begin applying them in interviews/assessment. Interviewing questions must be “behavioral” in nature, and should pertain directly to your core values. i.e. If one of your core values is “Innovation“, you can ask questions like - “Tell me about something you developed from scratch or something you dramatically improved in your current organization?” This is a basic example, but you get the idea. The most effective way to evaluate a candidate’s values is to look closely at their pattern of behaviors and then work to decipher what is driving those behaviors. You can think of yourself as a CSI (Crime Scene Investigator), trying to build a “profile” of the candidate’s personal core values. One of my mentors in this area used to say that “once you know a person’s core values, you know how they will behave in nearly every situation”. This is absolutely right on when you are able to develop an accurate “values profile” for a candidate/employee. 3.Don’t work in a vaccuum. I have interviewed over 4000 people in my career and even I don’t completely trust my first judgement of a candidate. You must interview candidates multiple times and use multiple interviewers to be sure you are getting it right. I believe group interviews are the very best method, because everyone in the room hears the same answer from the candidate. Many times their will be different interpretations of a candidate’s answer to a key question. This is great! This is where the meatiest discussion happens and eventually where the best hire (or no-hire decisions) are made. 4. One last set of eyes. Especially for key or higher level hires, always bring in at least one person from outside your organization (who knows the organization well) and get their perspective on a candidate. This can be an Industrial Psychologist, or it can just be a person who is closely associated in some way to your organization. We all have blindspots and those spots are usually very visible to people outside of our company. Two key things on this however. Number one, don’t assume that an Industrial Psychologist will do a great job just because they have a “process” or “system” for evaluating candidates. If you haven’t worked with a particular Psychologist in the past, they are no more knowledgable of your culture and values than someone off the street. I’ve seen this mistake made many times. Secondly, be very clear with the outsiders on what you want them to evaluate. i.e. “We feel this candidate is definitely Innovative, but we’re concerned about their general “Respectfulness and Friendliness” as these are core values to our organization - can you please pay special attention to these areas when you meet with this candidate on our behalf” Of course you will also want to ask a candidate’s references values oriented questions as well. i.e. “Where would you rank Bill in terms of his ability to innovate? Can you give me some examples?” The biggest thing to remember is in every step of the process, you are incorporating core values. If you do this, you will have a very solid understanding of how “right” this candidate is when that offer is finally made. Of course, given time and space considerations I haven’t written about every single step of a well done interview/assessment process, but hopefully the points above cover most of the bases as it pertains to assessing values fit. As always, I’m interested in your thoughts/comments. Mike Frommelt
Servant Leadership Makes its Case
This afternoon I attended a presentation discussing Servant Leadership put together by the Center for Ethical Business Cultures on the campus of the University of St. Thomas here in Minneapolis. Guest speakers included the current CEO of the Robert Greenleaf Center for Servant Leadership, as well as Dr. James Sipe and Don Frick, co-authors of a new book titled the Seven Pillars of Servant Leadership, described by the authors as an “implementation” guide for the teachings and philosophies of Robert Greenleaf. Many of the topics discussed today were not new information to myself, or the rest of the KeyStone team, as we have attended many Servant Leadership related events in the past, done considerable reading and even worked with a handful of clients who have implemented the philosophy. For those of you not familiar with Servant Leadership, I would encourage you to visit www.greenleaf.org to get a full flavor - it’s worth a few minutes on the site. However, for our purposes here, let’s suffice it to say that Servant Leadership is about turning the “pyramid” upside down in an organization; Rather than leaders being the center of power, wielding it to their own advantage, they begin to think of themselves first as servant, working diligently to empower and grow their people in the organization. The philosophy does not constitute a suggestion of fully eliminating hierarchy or tearing up org charts, but rather to veer traditional thinking and behaviors toward a more people focused approach. While most of today’s session was a reminder of the basics of Servant Leadership, one piece of new information really gave me pause. Mr. Frick and Dr. Sipe sited a study from their book, The Seven Pillars, comparing financial results of well known Servant Led, publicly traded companies against both the general market and the 11 well known companies profiled in Jim Collins ground breaking book Good to Great. Over a ten year period (1995-2005) the S&P 500 posted a 10.8% pre-tax portfolio return. For the same time period, The Good to Great companies posted a 17.5% return and the Servant Led companies posted a 24.2% return. The companies in the Servant Led category included organizations such as Southwest Airlines, The Container Store, Starbucks. Certainly this data doesn’t guarantee that simply deciding to implement Servant Leadership will significantly raise your stock price. Also, there is no guarantee over the really long haul (20-50 years) that these companies will continue to outperform the market or their competition. However, it certainly is a big blow to the critics who dismiss Servant Leadership and other employee focused cultures as merely “soft stuff”. At KeyStone Search, we remain very objective as it pertains to which particular cultural program or philosophy your organization should ascribe. Servant Leadership is certainly not the only way to align culture, create trust and build a more loyal, dedicated and productive team. There are many other great philosophies/programs out there; Collins’ Good to Great, Blanchard’s Managing by Values, The Scanlon Plan, The Oz Principle, EOS Process, Covey and many others. What we do believe strongly is that you must to do something. Letting your culture simply develop un-nurtured or unfettered is a recipe for disaster. Something I heard recently is that building a great culture doesn’t necessarily take a lot of money, but it does take a lot of work. Agreed! The data continues to come in; The well aligned, employee centric culture eats the command and control culture for lunch - in every facet, including financially. I think it’s safe to say the old “carrot and stick” environments are going the way of the hula hoop! It’s about time! Mike Frommelt
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