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Philosophy

Where is the soul of Dell?

by Sheila Margolis on April 25, 2011

After reading the WSJ article “Michael Dell Looks Beyond PC Business,” you may wonder where is the soul of Dell. In the excerpts of the WSJ interview with Michael Dell, no clear company Purpose or set of defining principles–a Philosophy–stand out. Where is the soul of Dell?

Leadership is the dominant driver of culture and strategy; therefore, in all communications, the CEO must share the Purpose of the company and its defining Philosophy. These core attributes must be at the heart of each conversation. These defining principles serve the company internally as a glue to unite and a compass to guide. But they also must be consistently communicated to the public so that everyone has a sense of the heart and soul of the company and its distinctive contribution. The energy of the company’s essence can be a powerful tool–when it is genuine and shared.

But in the interview with Michael Dell–the founder–the conversation centered more on the company’s move from consumer to enterprise, the importance of acquisitions and the push to supporting cloud computing. These are conversations that are important but not distinguishing.

If Dell wants to stand out and achieve, the company must look inside and unite again around a Purpose and Philosophy that every employee connects to and that the public understands. To be a leader, a company must know itself and its distinguishing attributes and then build on that internal strength and devoted mindset. Understanding your markets and strategy is essential, but you must also understand and communicate your Core Culture–the essence of who you are–so that you stand out and succeed because of your distinctive ability to make a contribution.

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What are your company’s distinctive values that set it apart from your competitors?

by Sheila Margolis on February 28, 2011

If you asked employees–what are our company’s distinctive values–how would they respond? Would they share a similar view of what’s unique and distinctive about your organization? In successful companies, employees know and live by the distinctive values that are core to it. These values are guiding principles that connect employees and build a sense of family. The values are a source of pride, and the shared practice of these values produces a distinctive workplace and customer experience that sets your company apart from others.

Many companies have clearly defined guiding principles that most employees share. Typically, they have a leader who understands how to build a community of workers who are bound by a shared Philosophy.

Zappos is one example of such a company. The CEO of Zappos–Tony Hsieh–is known for sharing with everyone, employees and the public, the company’s core values. If you look on their website, the Zappos Family Core Values are listed with a video explaining what they are and why they’re important. These descriptions by real employees give a clear picture of what’s valued in this company. Employees describe the core values as the foundation of their culture. The values capture what employees feel make the culture special. Employees are selected because they understand the core values and want to embrace them and practice them. The company even has little pictures to capture each core value.

Zappos Core Value-​​Deliver WOW through Service

Frog images of each of their values are terrific ways to communicate what’s important at this company.

Additionally, Tony, the founder and CEO, also wrote the best-​​selling book Delivering Happiness to share his founding principles and values that are central to the culture.

Take your company values seriously. Hire for them, live by them, and be sure the world gets it, too. Be known for what makes your company special. Be clear on what makes your company distinctive. It all begins with having a shared Philosophy that all employees understand and want to live by. Define your core values and make them a part of every aspect of your company.

 

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Companies–including Walmart–should not deviate from their core culture

by Sheila Margolis on February 22, 2011

According to the WSJ, Walmart will be reporting a second straight year of declining domestic same-​​store earnings. The cause is attributed to the company’s move from its core culture centered around the principle of providing everyday low prices to the American working class.

According to the Walmart website, they state that three simple principles that were part of their founding in 1962 are what make them great.

  1. Respect for the Individual–We’re hardworking, ordinary people who’ve teamed up to accomplish extraordinary things. While our backgrounds and personal beliefs are very different, we never take each other for granted. We encourage those around us to express their thoughts and ideas. We treat each other with dignity. This is the most basic way we show respect.
  2. Service to our Customers–Our customers are the reason we’re in business, so we should treat them that way. We offer quality merchandise at the lowest prices, and we do it with the best customer service possible. We look for every opportunity where we can exceed our customers’ expectations. That’s when we’re at our very best.
  3. Striving for Excellence–We’re proud of our accomplishments but never satisfied. We constantly reach further to bring new ideas and goals to life. We model ourselves after Sam Walton, who was never satisfied until prices were as low as they could be or that a product’s quality was as high as customers deserved and expected. We always ask: Is this the best I can do? This demonstrates the passion we have for our business, for our customers and for our communities.

Walmart’s changes in their merchandise and even the look of their stores was designed to attract higher-​​income customers. Then they instituted discounts on select items while raising prices on others–not in keeping with their tradition–and part of their core culture– of everyday low prices.

The company Purpose is simply stated by Walmart:

Saving people money to help them live better was the goal that Sam Walton envisioned when he opened the doors to the first Walmart. It’s the focus that underlies everything we do at Walmart.

Sometimes we get distracted from our roots in our attempts to grow and thrive. But when a company changes its central principles, then the company confuses its loyal customers and its employees. Changing core principles should be avoided unless it is required for survival.

Companies should define their vital Purpose and their distinctive and enduring Philosophy and understand that those attributes are their identity, and they should always be preserved.

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Are you hiring for culture fit–like Warren Buffett?

by Sheila Margolis on October 27, 2010

In the Wall Street Journal article, “Buffett: Combs Is ‘a 100% Fit’,” culture fit is described as a critical criteria for selecting Buffett’s heir apparent:

Mr. Buffett says he and Mr. Munger (Berkshire Vice Chairman) were sold on Mr. Combs not only because of his ability and intelligence but also because they were convinced he would fit in to Berkshire’s no-​​fuss culture.

Buffett knows that a culture can change when a founder leaves an organization, and this can have a significant impact on the company and its future. Buffett states:

He is a 100% fit for our culture. I can define the culture while I am here, but we want a culture that is so embedded that it doesn’t get tested when the founder of it isn’t around. Todd is perfect in that respect.

So how do you determine if a candidate for a job is a 100% fit?

Companies screen applicants on at least two levels. First, they evaluate the candidate’s fit for the job. When evaluating an applicant for job fit, companies consider these questions:

  • Does this person have the knowledge and skills necessary for this job?
  • What past experiences have prepared the applicant for the job?
  • Do the strengths of the applicant match the requirements for the job?
  • Will this person be sufficiently challenged doing this work?

But more and more organizations are adding a second layer of questioning: to evaluate the candidate’s fit with the culture of the organization. When evaluating an applicant for culture fit, companies think about these questions:

  • Is the work of our organization something that is meaningful to the applicant?
  • Are the applicant’s values in harmony with the values of the organization?
  • Will the person naturally perform in ways that are consistent with how we do things here?

How well a job candidate fits the culture of a workplace can make the difference between job search success and failure. Those candidates selected on the basis of culture fit—in addition to job fit—will contribute faster, perform better and stay longer with the organization. Where culture fit is neglected, the burden is shared by both the employee and the company. Working at a company with values inconsistent with yours can be difficult, stressful and unrewarding. And if the new employee is the heir apparent, then the future of the company is at stake.

Culture fit is important for all potential employees. A person’s values are difficult to change. When you are not a fit with the culture of an organization, that fit cannot easily be altered through training and development. It’s just not the right place for you and not the right life for you to live.

Seeking that 100% fit is important in hiring employees and is essential in picking top leadership. This is why many organizations promote succession planning where internal candidates–who are known entities–are the candidates who get the top positions.

So, if you are a company, be sure you’ve defined your company’s culture–particularly your core culture. Use an organization-​​wide process to define the organization’s Purpose and Philosophy: the central and distinguishing attributes that are the character of the organization and the cause that it has served over the years. You must also know the Priorities of the organization so that you can screen to ensure that candidates naturally practice the values needed to achieve your goals.

By understanding the candidate and an organization’s core culture, you can screen for culture fit. A successful organization hires people who want to live the culture effortlessly.

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When the H-​​P leader does not live the culture, he must go

by Sheila Margolis on August 7, 2010

Organizational culture is an important thing. It’s the standards guiding all behavior in the organization–leaders and employees alike. So when you have a culture of uncompromising integrity, respect, and trust and your top leader–the CEO–demonstrates behaviors that are in conflict with those core values, what do you do? The answer is simple if your culture matters. The CEO must leave. And that’s what happened at H-​​P.

If you read the H-​​P Way, a key tenet of the culture is:  “We conduct our business with uncompromising integrity.” It is explained this way:

We expect HP people to be open and honest in their dealings to earn the trust and loyalty of others. People at every level are expected to adhere to the highest standards of business ethics and must understand that anything less is unacceptable. As a practical matter, ethical conduct cannot be assured by written HP policies and codes; it must be an integral part of the organization, a deeply ingrained tradition that is passed from one generation of employees to another.

In the Five Ps model, the P of “Projections” refers to the images that an organization projects to the public and to the employees, as well. Those images are often influenced by marketing, PR and advertising, but they are also influenced by things like the company name, its logo and symbols, and even the image of the headquarters, offices and stores, and the company’s leader. These images must be aligned with the culture of the organization. Lack of alignment produces serious problems for the company–the public and the employees no longer believe those espoused values matter. How can the leader of a set of values not practice the values that he says are most important?

Leadership matters when it comes to organizational strategy and leadership matters when it comes to organizational culture. When the leader lives the values and talks about them each day, then everyone inside and outside the organization believes they are real. And that’s what it takes for a strong culture–a vital asset for any organization.

And when that leader no longer represents those core values, for the sake of the health of the organization, the leader must leave. Of course, selecting the next leader becomes a challenge, especially when the organization has had a history of selection issues as the WSJ labels as the H-​​P Curse.

An insider is usually the better choice if you seek to sustain the distinctive and enduring Philosophy of the organization–a vital part of the Core Culture. Insiders usually get it because they’ve been living it–assuming the culture is aligned and practiced. Outsiders need to be selected based on whether they have demonstrated leadership practices that are consistent with the company’s culture. The wrong selection can damage a culture.

Culture matters and leadership matters. They go hand-​​in-​​hand.

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Nokia searching for new CEO to bring change

by Sheila Margolis on July 20, 2010

According to the WSJ, Nokia is searching for a new CEO to revive an organization that sells lots of cell phones but has been unable to compete in the high-​​end smartphone market. The WSJ says, “The company’s failure to get back in the race has taken a toll.” Selling in the mainly lower-​​end market limits profit margins. So what does the company do to push change…they search for a new CEO.

Leadership is a prime driver of change, and top leadership is the primary influencer of an organization’s culture. Thus, several things must be decided before looking for a new leader.

  • First, decide what is working with the culture and what needs to be changed. Is a new strategy with corresponding values what leadership must advocate or is the problem deeper? A clear assessment of the Core Culture and particularly the Purpose and distinctive and enduring Philosophy of Nokia must be assessed. What are they and can the organization survive sustaining that Purpose and those distinctive organizing principles that are the character of the company. Is a character change needed or a strategy change? Hopefully, it’s just a strategy change because the former requires a much more complex process of transformation.
  • Next, if the change is just a strategy change, be sure the new leader personally advocates and believes in the Purpose and Philosophy. If that leader sees the organization in a new way, changes may be made that were not intended.

Selecting new leadership is a delicate process. But first understand what must be sustained and what needs to alter. Then, choose the leader that will take the organization in the right direction rather than destroying those attributes that matter most to employees and the customers who identify with it.

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Do employees have the big picture?

by Sheila Margolis on January 26, 2010

Prosper Using the “Why,” the “How,” and the “What”

How would you describe the people in your organization?

  • Do employees genuinely care about the organization? Do they feel a connection to its contribution and its unique character?
  • Do valued employees want to continue working there? Do they identify with the organization? Do they feel invested in its future?
  • Do employees regularly put forth extra effort to help the company succeed? Are they adaptive? Focused? Persistent in their efforts? Are they willing to take on added tasks when they see the need?

Work today is different from the past.

If this sounds too idealistic, maybe it’s because organizations of the past have used a different model for work. In an environment of command and control, the focus was on following rules, with little place for personal initiative. But today, that model cannot thrive in our global, highly competitive, constantly changing, and transparent world. Successful organizations today are characterized by high energy, a sense of urgency, focus, passion, and perseverance.

So how do you help your organization generate the enthusiasm that propels it toward prosperity? The key is to share a—bigger picture—view of work to guide people as they create the success each organization seeks. [Continue reading…]

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