Beyond Profit: Using Culture to Create World Change

Posted on by Claudette Rowley

Humanity is at a crossroads. Every day we hear stories of division, of a loss of connection to human kindness, and of people treating each other as though they don’t matter.

Every day we hear stories of positive action, of strangers reaching out to help each other, and of joy, kindness and celebration. Every day we hear, read and create both realities.

We know enough to solve virtually all of the world’s problems, but we don’t do it. We have the intelligence, knowledge, technology and capability to create a world that brings out the best in organizations and allows people to live in fairness, greater harmony and opportunity. Why would we choose anything else? Yet every day, people and organizations choose a different path.

If we change our businesses, we can change this path. Our organizations can, by embracing a new cultural paradigm, become beacons of positive action. Culture is both the key and pathway to making this choice.

When businesses are out of alignment with their people, their culture, and their ability to anticipate and implement change, they most likely haven’t reached their full human and profit potential. What we know from quantum physics is that alignment matters. For example, the energy it takes to exploit your employees to increase profits far outweighs the energy it would take to generate more revenue by respecting your employees. As more businesses choose brilliance, respect and kindness, the effect will be cumulative, changing the tenor of how we handle business. Your organization’s ability to proactively respond to change is a key factor in your strategy, innovation and consciousness in the world economy.

3 things every business should acknowledge to make the world a better place.

  1. A business exists to do more than make money. Even if its primary function is to make a profit, a business impacts its workforce, the community in which it resides, and society as a whole through its branding, products and services.
  2. A business influences the fabric of our larger culture, our societal interactions, and the health of our planet. Take the iPhone, for example. Although only one product, it has changed the way we look at technology, communicate, and view the role of smartphones in our lives. Need I say more? Companies have an enormous impact on us in both positive and negative ways. Businesses like Apple have reshaped our communication, connection, what we value, and how we spend our time.
  3. Our workforce is human. The workforce is comprised of social beings with a need to connect, to be treated with dignity and respect, and to develop their talents, skills, and competencies. I dislike the term “human capital.” We are not human capital; we are human beings. Everyone who works for a business is a person.

When a company chooses to tap its full potential, the opportunities for creative problem-solving and business success are exponential. These cultures become brilliant: they proactively respond to change in ways that decrease stress, inspire learning and promote organizational success.

For years, I have seen companies work around their cultural issues rather than confront them. I’ve seen them avoid telling the truth about behavior, and, over time, allow their culture to devolve into something nobody wanted, rather than evolving into something great. Often this occurs unintentionally, the result of corporate leadership not understanding how culture shapes the organization and how, simultaneously, the organization molds the culture.

Why would an organization create a culture it doesn’t really want, or create a culture that’s pretty good but could be much better? Consider these factors:

Organizational culture thrives in truth.

As a culture consultant, I’ve witnessed amazing transformations when companies begin to recognize and tell the truth about themselves. I’ve seen leaders in a family business who were barely speaking start to communicate again, allowing them to implement positive, strategic changes that helped their culture evolve. As a consultant for an energy company, I’ve coached a leader who designed an organizational structure that allowed the brilliance and talent of several previously siloed departments to coalesce. And unfortunately, I’ve also seen organizations shy away from telling the truth about their cultures and stay stuck in mediocrity. This refusal to recognize and see the truth, in turn, continues to support tremendous inefficiency, which causes talented people to leave at regular intervals.

You are always in a culture, and your culture is evolving at this moment.

You are always in a culture. Culture in your company isn’t an “extra” you can sideline or avoid until you have time. It isn’t a chair you stick in the corner and ignore. Instead, it’s like standing in the middle of a swimming pool. Every minute of each day the culture in your organization is evolving and you are immersed in it.

When a company hires a new CEO, the cultural foundation shifts. When an organization decides to reorganize, the culture allows or constrains the success of the reorganization. When an engineering department of a software company decides to create a new product, the culture will influence the product development. If the product is a huge success, the culture will evolve and change accordingly.

Why is culture always evolving? Organizational culture operates as a system, and like most systems, it’s in a continual state of evolution as new people, ideas, and decisions enter the system. At the same time, people, processes and old ideas exit.

As business attempts to improve its culture, it reduces culture to superficial elements or adopts a one-size-fits-all approach. In other words, business takes action without understanding how making a change in one part of the culture will affect the rest of the system. This may dilute the potential in other parts of their culture. You have an opportunity – and a responsibility – to rise to this occasion.

 

Larry Fink, Tucker Carlson, David Brooks And The Call For A Capitalist Reformation

Posted on by Jay Coen Gilbert

Larry Fink challenges. Tucker Carlson rants. David Brooks moralizes. Others wonder Can American Capitalism Survive?

They all correctly diagnose the problem—a broken economic system that is not meeting the needs of the vast majority of people and that has embedded incentives that make it designed to fail in the more perilous times ahead—but they all fail to see clearly how long we’ve had this problem, what is its root cause, and what is required for its solution.

Capitalism did not go off the rails in the last 40 years. It may have metastasized into a financialized cancer, but capitalism’s cancer gene has been there since the beginning. Unconstrained, growth-at-any-cost, profit-over-purpose capitalism has destroyed the lives of millions upon millions of people for hundreds of years. They just weren’t people we typically cared enough about to behave differently or to question the system, as long as it was working for us. By “we” and “us,” I mean those who created and have benefited most from the capitalist system. But we are coming to a day of reckoning. If we do not properly diagnose the root cause of our potentially fatal illness, we will fail to develop or—worse—fail to use a promising cure.

That such diverse public figures as Fink, Carlson and Brooks are now recognizing what everyday people around the world have known and felt for a long time is good news. System change can only happen if there is widespread recognition that the current system is failing. But that is not enough: System change also requires a credible alternative.

Our Historic Opportunity

Certain moments in history are pivotal. Those of us in positions of power lucky enough to live in those moments have the opportunity to shape the contours of history for future generations.

To understand better the opportunity we have today, it is useful to look back to previous pivotal moments that have shaped our lives in ways at once profound and invisible—like the quality of the air we breathe.

In the Middle Ages, the Catholic Church was the most powerful institution in the world, and it was in desperate need of reformation. In response, a relatively unknown monk named Martin Luther posted 95 Theses to the public bulletin board of the day, challenging the Church’s fundamental corruption that let people off the hook for their bad behavior as long as they made charitable contributions to the Church. That single act of courage catalyzed the Protestant Reformation which, along with the Age of Discovery, accelerated the culture shift that gave birth to the Scientific Revolution, ushered in the Enlightenment and, perhaps most profoundly, unleashed the ethic of Individualism and the forces of Capitalism, which have increasingly dominated our culture globally for the last 500 years.

Fast forward to today: Capitalism is the most powerful institution in the world. As did the Church, capitalism shapes every part of our lives in myriad ways, from the beautiful to the destructive. Growing populist anger and the internet’s potential for radical transparency in the decade since the global financial crisis are elevating a fundamental public debate about the role of business in society and whether business should put purpose before profit. Others across the ideological spectrum have pointed out the obvious: hyper-individualism and its offspring, winners-take-all-capitalism, have together become an economic system that is in desperate need of reformation if it is to deliver on its unfulfilled promise to create prosperity for all, and for the long term.

But who will accelerate the necessary culture shift today and nail 21st Century Theses to capitalism’s door?

As it required a monk to reform the Church, it will require business leaders to reform capitalism.

Today every business leader in the world has the power tounleash a new reformation—a Capitalist Reformation—that has the potential to shape our history for the next 500 years.

The Capitalist System in History

The history of capitalism is like the history of humanity: complex; full of darkness and light; a reflection of who we are.

The British East India Company and the Dutch East India Company were the world’s first corporations. They were both founded around 1600, about 80 years after Martin Luther’s courageous act—and about the same distance as we are today from World War II and America’s “Greatest Generation.” For hundreds of years, these and other early corporations literally added to our spice of life and made our lives sweeter. Increased trade helped ideas flow more freely, particularly in the Western world. It also helped innovations multiply; comfort, convenience and leisure increase for many; and wealth accumulate for some. Yet, imperial capitalism came at a high cost with devastating negative consequences: colonialism, enslavement and land expropriation, genocide. In fact, it was the horrid that provided the capital—human, natural and financial—to support the immense and rapid advancements that today define our world.

One horrifying example looms large: Over more than 400 years, 12.5 million African people were kidnapped, enslaved and sold to build wealth and power largely for white men in the United States, the Caribbean and South America, as well as in Portugal, Spain and the UK. The first enslaved Africans were shipped directly to the Americas in 1518, one year after Martin Luther nailed his 95 Theses to the door of Castle Church. The centrality and largely unconstrained profit motive in capitalism has been with us since the beginning.

We are all making decisions—and have been making decisions for centuries—within the cultural and legal context of the economic system of capitalism as it has has been designed: in order to maximize profit. Since its beginning, that system has been based upon perverse incentives—incentives that led capitalists to enslave 12.5 million human beings. Those incentives led business people to pack human beings like cord wood, chained together in inhuman conditions, because that was the best way to ship container loads of “product” to maximize yield. It was business people—not just slave traders and plantation owners, but also their bankers and insurers—who priced their “product” to account for 20 to 30 percent loss in transit; 20 to 30 percent loss of human lives; 20 to 30 percent loss of mothers and fathers, of daughters and sons. That cold calculation was a result of the embedded incentives in the same economic system upon which our current global economy is based.

Any righteous judgment today of the individual ethics and morality of those business people does not address our willful blindness or lack of motivation to fix the still-present flaw in the design of an unjust system and the structural inequities and loss of our humanity that result.

But the point of looking clear-eyed at the history of capitalism is not about individual actions or inactions. It’s about having the courage to recognize the hard truths of the economic system in which we have been operating. The profits from the business of slavery helped finance the Industrial Revolution that created the world we know today.

If business leaders want to take credit for all the good that has come from capitalism, then we also must reconcile all the bad that has come along with it. One way to do that is to use our unique power and privilege to design and invest in a better system that serves all of us, not just some of us.

A Capitalist System for the Future

The perverse incentives inherent in a largely unconstrained capitalist system still exist. These incentives drive behaviors that increase inequality, reduce social mobility, devalue communities, deplete soils, acidify oceans, destroy biodiversity, trigger mass migrations and social instability, and fuel violence and war. These perverse incentives lead to concrete business practices such as predatory pricing, wage suppression, insufficient investment in a just transition to zero-carbon business models, as well as business trends that are or are likely to impose huge costs on taxpayers resulting from rising contract labor, accelerating automation and worsening natural disasters. From the perspectives of a growing number of business leaders, investors and policy makers, these incentives are now creating unacceptable systemic risk. This is why the systemic design flaws in unconstrained capitalism are creating unlikely bedfellows such as Sen. Elizabeth Warren, Vice President Mike Pence and BlackRock CEO Larry Fink.

BlackRock manages more than $6 trillion in assets, making it the largest investor in the world. Fink’s just-released 2019 Letter to CEOs titled “Purpose & Profit” challenges CEOs to lead with purpose and follows his 2018 letter which served notice that if both publicly traded and private companies can’t demonstrate that they’re creating positive social value, they might lose their license to operate and, more pointedly, lose BlackRock’s support. These are big words from the largest institutional investor on the planet. One observer called it “a watershed moment on Wall Street, one that raises all sorts of questions about the very nature of capitalism.”

One of the most powerful arguments of the counter-reformation is used so often it has an acronym: TINA, which stands for There Is No Alternative. Sometimes this argument is used with condescension, sometimes in resignation.

The good news is that today There Is a Credible Alternative. It is no longer acceptable to lament the constraints of market forces, wishing there were a tool that could harness unconstrained capitalism’s otherwise amoral power for a higher purpose than profit maximization. That tool is here today, and it is in use by companies across the globe.

Vice President Pence and 16 other Republican governors have passed legislation to create a new tool for corporate governance that attempts to solve capitalism’s system design problem. Today, 34 states and two countries have passed benefit corporation laws that give business leaders and investors a choice to use this new corporate governance structure that aligns the interests of business with the interests of of society. Roughly a half dozen other countries are at various stages of considering similar legislation.

Companies that adopt benefit corporation governance create greater accountability to serve the public interest (that’s all of us, by the way) because they are required to consider the impact of their decisions not only on their shareholders but also on their workers, customers, suppliers, communities and the environment. More than 8,000 businesses—so far predominantly disruptive private companies such as Allbirds in footwear, Lemonade in insurance, and Beta Bionics in medical devices—have already voluntarily adopted benefit corporation governance. Collectively, they have raised more than $2 billion in venture capital, private equity, and in the first initial public offering by Laureate Education led by KKR. Fortune 500 companies such as Unilever, Danone, P&G and Nestle are using benefit corporation governance or similar structures for their purpose-driven subsidiaries.

Seeing promise, in August 2018, Sen. Warren (now a presidential candidate) introduced the Accountable Capitalism Act to accelerate adoption of this new corporate governance tool by making it mandatory for large companies. The legislation would require the fewer than 4,000 corporations in the United States that generate more than $1 billion in revenue to adopt benefit corporation governance so that the purpose of these businesses is aligned with the interests of society. David Leonhardt of The New York Times called this “the most intriguing policy idea to come out of the early 2020 campaign.” Others, including Nobel Laureate in economics Robert Shiller, have also found benefit corporation governance a promising innovation.

Whether you think Sen. Warren’s regulatory approach is a good or bad idea isn’t really the point. The point is that the world’s largest investors, political leaders and thought leaders across the ideological spectrum agree on one thing: We need to evolve this institution of capitalism so that it is serving the interests of all people and communities, not just the interests of shareholders. We need to reform the institution of capitalism so that “in order to maximize profit” is no longer the driving force and sole purpose of business.

And the stakes are getting higher.

In a world where machines and humans are integrated, where corporations track our every movement and curiosity, where algorithms manipulate us to buy things at certain times or vote certain ways, we are putting into the hands of business leaders the power to answer fundamental questions: What does is mean to be human? Does privacy exist? Is there free will?

This raises the big question: What operating system do we want for capitalism in the 21st century?

If the operating system says business leaders must make decisions “in order to maximize profit,” then we will deploy these new technologies accordingly, and we will end up in a very different world than if the operating system says we must make decisions “in order to maximize benefit for society.”

A recent article by the U.S. business editor of The Financial Times asks “should business put purpose before profit?” After surveying the landscape of people wrestling with this system design question, he concludes: “For this capitalist reformation to succeed, however, it will have to prove it has more substance than spin, survive the market’s down cycles and persuade a public whose faith in corporate and institutional elites remains fragile.”

In answer to that challenge, today more than 8,000 businesses have adopted benefit corporation governance and 2,600 businesses have met the performance, transparency and accountability requirements to become Certified B Corporations. The leaders of these businesses share one vision: to replace the source code error in the operating system of capitalism—shareholder primacy—that dictates every decision seek to meet the objective “in order to maximize profit,” and to replace it with an operating system that empowers every decision to seek to meet the objective “in order to maximize benefit for society.”

A Capitalist Reformation is about reimagining the purpose of business and redefining success.

Certified B Corporations and benefit corporations are part of a much broader global movement of people using business as a force for good: Conscious Capitalism, Circular Economy, The B Team, Sistema B, Coalition for Inclusive Capitalism, Business Alliance for Local Living Economies, Social Venture Circle, LEED, Fair Trade, Organic, Impact Investing, to name just a few in this diverse ecosystem of reformers.

We are all parts of a global culture shift to reform capitalism so its purpose is to create value for everybody, not just a few. The role of Certified B Corporations and benefit corporations in this broader movement is to make sure that this movement is meaningful and lasting: that there are real legal structures to support this behavior, performance standards to address understandable skepticism and public transparency to invite improvement on our inevitable shortcomings.

We are at the early stages of a Capitalist Reformation. The doctrine of shareholder primacy is a form of oppression and resistance to our basic nature as human beings. We have been born into an economic system that treats us as less than human—as Homo Economicus. This old system does not value our humanity. But a new system is being born. This new system serves a 21st century model of leadership whose purpose is to create value for all stakeholders, not just shareholders. And this new system will help us live into our full potential as human beings.

Here is the Declaration that one group of business leaders is nailing to capitalism’s door:

“We envision a global economy that uses business as a force for good.

This economy is comprised of a new type of corporation—the B Corporation—which is purpose-driven and creates value for all stakeholders, not just shareholders.

As B Corporations and leaders of this emerging economy, we believe:

  •      That we must be the change we seek in the world;
  •      That all business ought to be conducted as if people and place mattered;
  •      That, through their products, practices and profits, businesses should aspire to do no harm and benefit all.
  •      To do so requires that we act with the understanding that we are each dependent upon another and thus responsible for each other and future generations.”
  •      Will you be part of the reformation or will you settle for a failing system?

What will you do to create a capitalism that works for everyone and for the long term?

 

This story originally appeared at Forbes.com

Wise Guy – 5 Life Lessons From Guy Kawasaki

Posted on by Guy Kawasaki

Over the course of my lifetime, apart from episodic deviations for cars, I had two primary goals: first, to raise four kids who are joyful, productive, and socially responsible; second, to empower people to change the world. Here are the experiences that led me to these goals.

1. Honor Counts

Back in the late 1980s, America Online began life as AppleLink Personal Edition, an Apple-labeled online service for consumers that Apple contracted Quantum Computer Services to create. However, Apple blew up this contract for unknown reasons—if nothing else, this proved that Apple wasn’t omniscient, as AOL went on to become a massive success.

On the day that Apple ended the Quantum relationship in 1989, I had dinner with Steve Case, the founder of Quantum, and his team. They were in a state of shock and down in the dumps. But I told them that Apple’s decision could be the best thing that ever happened to them, because they were now free to create an independent company.

Out of desperation more than anything else, Case asked me if I would do some consulting and online conferences for $2,000 per month, plus stock options. I agreed, and for the next few months I helped out, until my contact at AOL stopped asking. I saw Case several years later, and he asked me if AOL was still paying me and had given me the stock options. I told him I hadn’t done much work, so the company wasn’t paying me, and I had never gotten the stock. I told him to “forget about it.”

Nonetheless, he insisted that I get the stock, so I received options for two thousand shares. The stock split several times and the per-share price rose like a rocket, so these options became my version of the proverbial two fish and five loaves of bread in the Bible.

To put this into perspective, I made approximately $250,000 from Apple stock over my career. So I could make the case that the company I did the most work for provided the least money, and the company that I did the least work for provided the most. The only reason I made any money from AOL stock is that Case was an honorable person; he did not have to grant me those options. There was no legal paperwork that proved he ever offered them to me in the first place.

Here’s another story of above-and-beyond honor. This time the honorable guys were Patrick Lor and Bruce Livingston, the cofounders of iStockphoto, a Calgary company that sold stock photos at one- twentieth the price of companies like Getty.

I met Lor at the September 2003 Banff Venture Forum, where I was a speaker. The topic that brought us together was not entrepreneurship, venture capital, or photography. It was ice hockey.

As I am prone to do, I diverged from the topic of my speech to discuss my passion for hockey—what better way to bond with a Canadian audience? I mentioned that I had visited the Graf factory in Calgary the day before and ordered a pair of skates. Nike had given me a pair just before I left my home for Calgary, so I now had an extra pair.

In the middle of my speech about entrepreneurship, I mentioned this extra pair and asked if anyone wanted to buy them. Years later, Patrick told me that he really didn’t need the skates nor did he have the money to purchase them, but he bought them as a way to meet and talk with me at the conference.

We spoke about more than just the skates that day, and he asked me to join his company’s board of advisors. I agreed, but we never came to a formal agreement because of the complexities of Canadian law. Regardless, I evangelized the company for several years.

Getty eventually bought iStockphoto for $50 million (US). Patrick and Bruce made more money than they ever dreamed possible, and they contacted me with the question, “How much stock should we have granted you if we had a formal deal?”

My answer was that a typical advisor would get 0.5 percent for a role such as advisor, spokesperson, or window dressing. I did all three. And what did Patrick and Bruce do? They paid me 1.5 percent of the purchase price from their share of the deal! That was another chunk of money I never saw coming.

As this and the Steve Case story show, I made out just fine without formal contracts. A logical question is, “Why did these two situations turn out so well?” Several reasons:

  • I’m a lucky guy.
  • I was usually in a position of power and visibility, so it would have been dumb to shortchange me.
  • They were honorable people.

Wisdom: Do the right thing. Be a Steve, Patrick, or Bruce. A formal contract with a dishonorable person is worth less than an informal contract with an honorable one. These guys taught me about honor when honor meant giving up hundreds of thousands of dollars.

 

 

2. Humility Rocks

In 2008, Richard Branson and I spoke at a conference in Moscow, Russia. This was the first time we met. We were in the speaker prep room, and he asked me if I flew on Virgin—which is what you would expect him to ask. I explained that I was a Global Services–level United Airlines customer—which meant free automatic upgrades and other VIP services (but not repayment of taxi fares). No one except United employees knows what it takes to achieve this exclusive status. Reaching it is not as simple as accumulating lots of miles.

 I explained to Branson that I didn’t want to jeopardize my Global Services status by flying on other airlines. Then Richard Branson dropped to his knees and started polishing my shoes with his coat. That was the moment I decided to start flying on Virgin America. (I never saw Steve Jobs get on his knees to get a customer.)

Wisdom: Be humble—it will help you succeed. If a billionaire knight who owns an island and kitesurfs with Barack Obama can get on his knees and shine your shoes for your business, you can, too. Perhaps his propensity to do this is why he became a billionaire knight. Skeptics would argue that Richard would do this only for people who are rich, famous, or powerful. But my sense of him is that he would have done this for anyone—he’s that kind of person.

 

3. The World Is a Big Place

This story was in my baccalaureate speech to Palo Alto High School, but it merits repeating and further explanation. I made a mistake in college: I graduated early. I entered Stanford with AP credits, and I took a heavy course load. This enabled me to fulfill my requirements by December 1975, even though the school year ended in June 1976.

I attribute my early graduation to my DAA (Diligent Asian Approach), which involves studying hard and forgoing extracurricular activities that don’t look good on a college application. It’s the philosophy of “start violin at two, enter the Kumon math program at five, take calculus in the seventh grade, and start a nonprofit at fifteen to get into Stanford or Harvard.”

I should have taken the full four years—or even more—to graduate. I regret not attending any of the Stanford overseas campuses or at least traveling outside the United States. Today, at sixty-three, with one wife, four kids, one dog, eight chickens, one job, one brand ambassadorship, one fellowship, and one directorship, I have little desire to travel for pleasure.

The theory of seeing the world as a tourist when you’re an empty-nester doesn’t apply, be- cause my youngest child is thirteen. He’ll be in college in seven years, so I’ll be pushing seventy, if not pushing flowers out of the ground, when he moves out. And by then there may be grandchildren from my other kids, so I won’t want to travel.

Wisdom: See the world when you’re young. The time to do this is when you don’t have a mortgage, car payments, or kids (though maybe student loans). There’s not going to be a better time to travel. I have never met anyone who wished they had started working earlier.

I could also make the case that seeing the world will make you a better employee or entrepreneur. This is why it’s good to travel while you’re young and not wait until you’re mid-career or retired. I predict that you’ll come to three conclusions:

  • People around the world are more similar than they are different.
  • Your life is better than most people’s.
  • Traffic where you live is not as bad as you thought.

 

4. What Are You Going to Tell Your Grandchildren?

In October 2016, I went to Berlin to speak to the marketing staff of Mercedes-Benz. The night before my speech, I had dinner with two German friends, and the conversation inevitably turned to the presidential election in the United States. At this point, thirty days before the election, few people believed Donald Trump would win.

The very fact that Trump was one of the two leading candidates astounded us. My friends told me that they still didn’t understand how their grandparents’ generation could let Adolf Hitler come to power, and they saw direct parallels between Hitler and Trump.

They warned me, “If Trump wins, it will be 1933 for America.” What they meant was that before Hitler was Hitler, he was “just” a popular politician. He didn’t start killing Jewish people and invading countries on his first day as chancellor. This conversation had a profound effect on me. I didn’t  want my grandchildren to wonder if I resisted Trump, so I started using my social media accounts to #resist him. Few, if any, social media influencers took such an aggressive stance at the time.

They didn’t want to go off-topic from their usual subjects such as food, cats, fashion, social media, or entrepreneurship, because taking such a stance might affect their brand and cause them to lose followers. But the fear of losing followers  and business were not a strong enough deterrent for me to keep silent, so I turned my Facebook, Twitter, Google+, and even LinkedIn accounts into political feeds—contrary to the wisdom of so-called social media experts. And guess what?

While a few hundred people complained about me getting political and resisting Trump, the feedback was far and away supportive. I may have lost a few thousand followers, but I gained tens of thousands more. Standing up for what I believe was not only the right thing to do,  it also was a good marketing decision, because my brand was aligned with democracy and meritocracy, not the Trump Reich. However, even if my stance had cost me followers, branding, or income, I would have still done it. That is what I will tell my grandchildren.


Wisdom: Do what’s right. Influence comes with a moral obligation to stand up for your principles and to help less fortunate people. This may come with personal and short-term costs—but that’s what a moral obligation entails.

 

 

5. The So-What? Test

If you let it, drama can fill your life. My experiences have led me to conclude that trying to eliminate drama is futile—what is important is how you react when drama occurs.

For example, when I joined the board of a nonprofit organization, we experienced drama every week when some part of the organization’s employees and customers didn’t like a board decision.

The sequence was that we would make a decision and then several dozen employees or customers would freak out, then the board would freak out that employees or customers freaked out and rush to try to appease them (never succeeding), then another drama would occur and the cycle would start again. This happened once a month for my entire tenure. The reason the board freaked out is that they imagined apocalyptic, worst-case, or at least bad-case, scenarios: employees would quit, employees would strike, customers would abandon us, and the New York Times, the Wall Street Journal, and the Washington Post would write a front-page exposé. None of these things occurred.

From this experience, I derived the So-What? Test. It means when drama occurs, you ask yourself, “So what?” For example, your daughter got a C on a math test. So what? She won’t have a 4.0 GPA. So what? She  won’t get into Dartmouth. So what? She will not succeed in life. Really? Getting into Dartmouth determines the outcome of her life? I don’t think so.

Wisdom: Ask, “So what?” This may not help prevent or avoid problems, but it will help put “crises” into perspective, and perspective is everything if you want a joyful and productive life. This doesn’t mean you shouldn’t work hard, but if everything doesn’t go as planned, ask yourself, “So what?” a few times and see if it matters.

 

This story is an excerpt from Guy Kawasaki’s new book “Wise Guy – Lessons From a Life” released in February 2019. Find it on Amazon.

Wise Guy – 5 Life Lessons From Guy Kawasaki

Posted on by Guy Kawasaki

Over the course of my lifetime, apart from episodic deviations for cars, I had two primary goals: first, to raise four kids who are joyful, productive, and socially responsible; second, to empower people to change the world. Here are the experiences that led me to these goals.

1. Honor Counts

Back in the late 1980s, America Online began life as AppleLink Personal Edition, an Apple-labeled online service for consumers that Apple contracted Quantum Computer Services to create. However, Apple blew up this contract for unknown reasons—if nothing else, this proved that Apple wasn’t omniscient, as AOL went on to become a massive success.

On the day that Apple ended the Quantum relationship in 1989, I had dinner with Steve Case, the founder of Quantum, and his team. They were in a state of shock and down in the dumps. But I told them that Apple’s decision could be the best thing that ever happened to them, because they were now free to create an independent company.

Out of desperation more than anything else, Case asked me if I would do some consulting and online conferences for $2,000 per month, plus stock options. I agreed, and for the next few months I helped out, until my contact at AOL stopped asking. I saw Case several years later, and he asked me if AOL was still paying me and had given me the stock options. I told him I hadn’t done much work, so the company wasn’t paying me, and I had never gotten the stock. I told him to “forget about it.”

Nonetheless, he insisted that I get the stock, so I received options for two thousand shares. The stock split several times and the per-share price rose like a rocket, so these options became my version of the proverbial two fish and five loaves of bread in the Bible.

To put this into perspective, I made approximately $250,000 from Apple stock over my career. So I could make the case that the company I did the most work for provided the least money, and the company that I did the least work for provided the most. The only reason I made any money from AOL stock is that Case was an honorable person; he did not have to grant me those options. There was no legal paperwork that proved he ever offered them to me in the first place.

Here’s another story of above-and-beyond honor. This time the honorable guys were Patrick Lor and Bruce Livingston, the cofounders of iStockphoto, a Calgary company that sold stock photos at one- twentieth the price of companies like Getty.

I met Lor at the September 2003 Banff Venture Forum, where I was a speaker. The topic that brought us together was not entrepreneurship, venture capital, or photography. It was ice hockey.

As I am prone to do, I diverged from the topic of my speech to discuss my passion for hockey—what better way to bond with a Canadian audience? I mentioned that I had visited the Graf factory in Calgary the day before and ordered a pair of skates. Nike had given me a pair just before I left my home for Calgary, so I now had an extra pair.

In the middle of my speech about entrepreneurship, I mentioned this extra pair and asked if anyone wanted to buy them. Years later, Patrick told me that he really didn’t need the skates nor did he have the money to purchase them, but he bought them as a way to meet and talk with me at the conference.

We spoke about more than just the skates that day, and he asked me to join his company’s board of advisors. I agreed, but we never came to a formal agreement because of the complexities of Canadian law. Regardless, I evangelized the company for several years.

Getty eventually bought iStockphoto for $50 million (US). Patrick and Bruce made more money than they ever dreamed possible, and they contacted me with the question, “How much stock should we have granted you if we had a formal deal?”

My answer was that a typical advisor would get 0.5 percent for a role such as advisor, spokesperson, or window dressing. I did all three. And what did Patrick and Bruce do? They paid me 1.5 percent of the purchase price from their share of the deal! That was another chunk of money I never saw coming.

As this and the Steve Case story show, I made out just fine without formal contracts. A logical question is, “Why did these two situations turn out so well?” Several reasons:

  • I’m a lucky guy.
  • I was usually in a position of power and visibility, so it would have been dumb to shortchange me.
  • They were honorable people.

Wisdom: Do the right thing. Be a Steve, Patrick, or Bruce. A formal contract with a dishonorable person is worth less than an informal contract with an honorable one. These guys taught me about honor when honor meant giving up hundreds of thousands of dollars.

 

 

2. Humility Rocks

In 2008, Richard Branson and I spoke at a conference in Moscow, Russia. This was the first time we met. We were in the speaker prep room, and he asked me if I flew on Virgin—which is what you would expect him to ask. I explained that I was a Global Services–level United Airlines customer—which meant free automatic upgrades and other VIP services (but not repayment of taxi fares). No one except United employees knows what it takes to achieve this exclusive status. Reaching it is not as simple as accumulating lots of miles.

 I explained to Branson that I didn’t want to jeopardize my Global Services status by flying on other airlines. Then Richard Branson dropped to his knees and started polishing my shoes with his coat. That was the moment I decided to start flying on Virgin America. (I never saw Steve Jobs get on his knees to get a customer.)

Wisdom: Be humble—it will help you succeed. If a billionaire knight who owns an island and kitesurfs with Barack Obama can get on his knees and shine your shoes for your business, you can, too. Perhaps his propensity to do this is why he became a billionaire knight. Skeptics would argue that Richard would do this only for people who are rich, famous, or powerful. But my sense of him is that he would have done this for anyone—he’s that kind of person.

 

3. The World Is a Big Place

This story was in my baccalaureate speech to Palo Alto High School, but it merits repeating and further explanation. I made a mistake in college: I graduated early. I entered Stanford with AP credits, and I took a heavy course load. This enabled me to fulfill my requirements by December 1975, even though the school year ended in June 1976.

I attribute my early graduation to my DAA (Diligent Asian Approach), which involves studying hard and forgoing extracurricular activities that don’t look good on a college application. It’s the philosophy of “start violin at two, enter the Kumon math program at five, take calculus in the seventh grade, and start a nonprofit at fifteen to get into Stanford or Harvard.”

I should have taken the full four years—or even more—to graduate. I regret not attending any of the Stanford overseas campuses or at least traveling outside the United States. Today, at sixty-three, with one wife, four kids, one dog, eight chickens, one job, one brand ambassadorship, one fellowship, and one directorship, I have little desire to travel for pleasure.

The theory of seeing the world as a tourist when you’re an empty-nester doesn’t apply, be- cause my youngest child is thirteen. He’ll be in college in seven years, so I’ll be pushing seventy, if not pushing flowers out of the ground, when he moves out. And by then there may be grandchildren from my other kids, so I won’t want to travel.

Wisdom: See the world when you’re young. The time to do this is when you don’t have a mortgage, car payments, or kids (though maybe student loans). There’s not going to be a better time to travel. I have never met anyone who wished they had started working earlier.

I could also make the case that seeing the world will make you a better employee or entrepreneur. This is why it’s good to travel while you’re young and not wait until you’re mid-career or retired. I predict that you’ll come to three conclusions:

  • People around the world are more similar than they are different.
  • Your life is better than most people’s.
  • Traffic where you live is not as bad as you thought.

 

4. What Are You Going to Tell Your Grandchildren?

In October 2016, I went to Berlin to speak to the marketing staff of Mercedes-Benz. The night before my speech, I had dinner with two German friends, and the conversation inevitably turned to the presidential election in the United States. At this point, thirty days before the election, few people believed Donald Trump would win.

The very fact that Trump was one of the two leading candidates astounded us. My friends told me that they still didn’t understand how their grandparents’ generation could let Adolf Hitler come to power, and they saw direct parallels between Hitler and Trump.

They warned me, “If Trump wins, it will be 1933 for America.” What they meant was that before Hitler was Hitler, he was “just” a popular politician. He didn’t start killing Jewish people and invading countries on his first day as chancellor. This conversation had a profound effect on me. I didn’t  want my grandchildren to wonder if I resisted Trump, so I started using my social media accounts to #resist him. Few, if any, social media influencers took such an aggressive stance at the time.

They didn’t want to go off-topic from their usual subjects such as food, cats, fashion, social media, or entrepreneurship, because taking such a stance might affect their brand and cause them to lose followers. But the fear of losing followers  and business were not a strong enough deterrent for me to keep silent, so I turned my Facebook, Twitter, Google+, and even LinkedIn accounts into political feeds—contrary to the wisdom of so-called social media experts. And guess what?

While a few hundred people complained about me getting political and resisting Trump, the feedback was far and away supportive. I may have lost a few thousand followers, but I gained tens of thousands more. Standing up for what I believe was not only the right thing to do,  it also was a good marketing decision, because my brand was aligned with democracy and meritocracy, not the Trump Reich. However, even if my stance had cost me followers, branding, or income, I would have still done it. That is what I will tell my grandchildren.


Wisdom: Do what’s right. Influence comes with a moral obligation to stand up for your principles and to help less fortunate people. This may come with personal and short-term costs—but that’s what a moral obligation entails.

 

 

5. The So-What? Test

If you let it, drama can fill your life. My experiences have led me to conclude that trying to eliminate drama is futile—what is important is how you react when drama occurs.

For example, when I joined the board of a nonprofit organization, we experienced drama every week when some part of the organization’s employees and customers didn’t like a board decision.

The sequence was that we would make a decision and then several dozen employees or customers would freak out, then the board would freak out that employees or customers freaked out and rush to try to appease them (never succeeding), then another drama would occur and the cycle would start again. This happened once a month for my entire tenure. The reason the board freaked out is that they imagined apocalyptic, worst-case, or at least bad-case, scenarios: employees would quit, employees would strike, customers would abandon us, and the New York Times, the Wall Street Journal, and the Washington Post would write a front-page exposé. None of these things occurred.

From this experience, I derived the So-What? Test. It means when drama occurs, you ask yourself, “So what?” For example, your daughter got a C on a math test. So what? She won’t have a 4.0 GPA. So what? She  won’t get into Dartmouth. So what? She will not succeed in life. Really? Getting into Dartmouth determines the outcome of her life? I don’t think so.

Wisdom: Ask, “So what?” This may not help prevent or avoid problems, but it will help put “crises” into perspective, and perspective is everything if you want a joyful and productive life. This doesn’t mean you shouldn’t work hard, but if everything doesn’t go as planned, ask yourself, “So what?” a few times and see if it matters.

 

This story is an excerpt from Guy Kawasaki’s new book “Wise Guy – Lessons From a Life” released in February 2019. Find it on Amazon.

The Difference Between American And British Problem Solving

Posted on by Jason Summers

My dad was recruited by an American valve company in 1965. Being a British citizen he filled a position that the company could not fill with an American worker. That being a highly skilled machinist with substantial knowledge in metallurgy. My Dad flew over the pond first and my Mother followed on the Queen Mary II. Two years later yours truly was born.

Over the course of my Dad’s life he continually learned and attained the equivalent of a bachelor’s degree in mechanical engineering. Something he would not have been able to do in England. Prior to his passing he had a number of US patents to his name in the valve industry.

In my high school years I remember speaking with my mother discussing the differences in how Britons and Americans approach problems. She said the key difference was that Americans would find a problem, come up with a plan and begin to quickly implement their ideas. She said that Americans seemed not to fear failure but rather embraced it when it occurred learning from the failures and moving on to the next course of action.

In contrast she said Britons would hold meeting after meeting until all theorized failures were accounted for and then they would begin to implement their ideas. If their ideas failed there were more meetings with more people and more time was spent in committee. She said, in her opinion, that the committee tasks became the work and the solution for the problem became an afterthought. By the time the Britons were beyond their committees the Americans had solved the problem. In her opinion Americans focused on the result far more often than the Britons.

My Mothers theory was reinforced for me while I watched an episode of the Ricky Gervais show. Karl Pilkington, one of the cohosts, was telling a story about his experience at a British station prior to joining the show. He explained that he was a wage employee or per hour employee in American, and the management kept calling meeting after meeting cutting into his paycheck and adding to his work load. Some of the comments I remember were Karl saying things like “They would spend 20 minutes discussing whether they should have croissants or doughnuts for the following meeting.” He further said it felt like “watching dung beetles pushing bullshit from one end of the room and back!” He said it was infuriating.

These are examples of what I like to call busy work. In other words doing work that does not add to a desired outcome. For a problem solver such as myself this phenomenon is absolutely infuriating. It reminds me of an old Seinfeld episode where George discovers the art of busy work. If you look annoyed and are short with people continually discussing the process you can actually go years before people discover you have accomplished nothing.

Well guess what, busy work is alive and well in America. With the advent of mass media both professional and novice you can actually make a profit for yourself as an expert pseudo solver. Yes you can continually drone on about a problem and all of its nuances over and over. Given enough frequency and coverage you may even be bestowed an expert by the masses with never uttering anything resembling a solution. You can write books and profit. You can do interviews and profit.

You can create committees and organizations and profit. The one thing you will never do is create a solution. Why? Because solutions require work in the unknown. You may or may not make a profit. So it’s far easier making money as an expert in problems than making money as an innovator in solutions. And this is where America is today, in my humble opinion.

 

What Can The Study of Leaders Teach us?

Posted on by Adil Alekperov

Let’s recall for a moment the history of Chrysler. In the late 1970s, the company found itself in a rather unattractive position – there were a vast number of unsold cars and quarterly losses approached $160 million. Bankruptcy threatened Chrysler’s existence.

In November 1978 – not an easy period for the company – the legendary Lee Iacocca (pictured above) became the company’s CEO. What did he do? Well, nothing special, for true genius lies in simplicity, as they say. One of his first steps was to convene the Chrysler Dealers Council, where dealers were expected to state their complaints around the corporation’s activity.

Iacocca then undertook a surprising, yet effective symbolic step, by reducing his salary to $1 and at the same time persuading the U.S. Congress to give them a loan of $1.5 billion – which was fully paid up before the scheduled date. The result was the new “K-car,” which started Chrysler’s revival. Iacocca went on to transform Chrysler into one of the world’s leading automobile corporations.

However, how is the company doing today? Is Chrysler still the same trendy and desirable brand as it was during Lee Iacocca’s time? Alas, it’s most likely not. After Iacocca’s resignation, the company gradually began losing its leadership position, and at the end of his career Iacocca found himself dealing mainly with public appearances and various talk shows

We should feel free to hypothesize that the rise and fall (with some reservations) of Chrysler is connected to the arrival and departure of a Leader – Lee Iacocca. Yes, he achieved brilliant results, but unfortunately, he hadn’t accomplished a leader’s principal mission – preparing a worthy successor to leave behind. He most likely hadn’t created the right atmosphere inside Chrysler, which might have generated new leaders that ensured visionary future development.

General Electric Company experienced a somewhat different situation. Between 1981 and 2001 it was headed by the legendary Jack Welch, who grew the company’s market value from $14 to $410 billion. In 2001 he was replaced by Jeff Immelt. As Immelt’s career at General Electric began in 1982, there was no doubt that Welch’s role in mentoring him as a future leader was evident. As opposed to Lee Iacocca, Jack Welch left a worthy successor, a real leader. Nowadays, General Electric still retains a dominant position among the world’s greatest companies.

Let’s take a look at Apple. In 1985, the company’s leader, Steve Jobs, was obliged to resign from Apple, or, more precisely, he was discharged. For a while, most likely through inertia, Apple delivered rather good results, but then things took a turn for the worse. In 1997, the corporation’s Board of Directors decided to invite Jobs back. As a result, consumers started to experience, unique, innovative products and the company began its robust climb to one of the world’s most valuable company’s. In 2018, Apple’s market value briefly hit $1 trillion. Steve Jobs had prepared a good foundation for Apple’s future development.

The three companies above show that it was leaders who primarily influenced corporate success and development. This legacy of remarkable leaders, who have opened new opportunities for their companies and the world, is replicated elsewhere too: Jeff Bezos and Amazon, which gave us a new way to shop – through a convenient, online purchase service; Walt Disney gave humankind the magic world of fairytales and kindness; Larry Page and Sergey Brin created Google – making Internet search easy while, at the same time, creating one of the most expensive brands in the world.

You might say that these things will be created one day regardless. There may be some truth in that, but my point is that the creator of these wonders must be a leader too. From this, and countless other examples, we see with certainty that leaders are the moving force of history and progress – they influence our world mightily. By studying the unique and multifaceted characteristics of leaders, we can become leaders ourselves, and create a unique leadership style all of our own; bringing ideas to life, improving people’s lives and making them more worthwhile.

 

8 Leadership Trends For 2019

Posted on by Jomel Alos

Leaders come in different shapes and sizes. They may subscribe to a single style of leadership or a combination of the best practices in people management.

Whatever the case, one thing that you have to consider as a team lead, manager or officer of your company is how your leadership principles are influencing the people around you. Your goal is to keep your followers or employees motivated, guided and engaged.

While the majority of companies, or a good 89% of them, agree that developing leaders is a worthy business activity, only 10% of C-suite executives think that their leadership programs produce results that are helpful for their organization.

Studies have shown that the most effective leadership initiatives are those that are appropriately directed. They also describe successful companies as being able to adapt their leadership development practices according to their business goals, needs or challenges.

Here are nine leadership trends that have the potential to make an impact in today’s workplace, including your organization.

1. The decrease of age-based seniority

It used to be that senior employees were the first to be promoted to leadership or managerial positions in many companies. However, the entry of millennials into the workforce merits that you re-evaluate your leadership development initiatives, especially since millennials are expected to make up 75% of the global workforce by 2025.

Instead of relying on age or length of service as the basis for promotion, you should come up with other ways to discover leadership talent or capacity across all of your employees, whether they’re Gen X, baby boomers or Gen Y. The key is using relevant strategies that can attract, engage, and retain workers across these generations.

2. Importance of relationships in employee engagement

You need to be the best manager you can be for your employees. There are several ways that you can promote workforce engagement, starting with building relationships with your employees. To realize this goal, you need to focus on specific soft skills, such as emotional intelligence and people skills – because employees feel comfortable toward someone who’s able to relate to their concerns, sentiments or challenges.

3. Redesign of management structure

Ideally, performance management processes should be two-fold. As a leader, you have to help your employees set clear goals and the means of measuring their progress over time.

In return, employees should feel welcome to give their honest assessment of your leadership style, so that everyone in the organization can help build a collaborative environment.

4. Investing in human capital

No matter how far-reaching technologies may become in the future, they cannot replace employees as the most valuable and capable asset of the company. Thus, it’s only wise that you invest in their further learning, because having employees who can work at their full potential will help grow your business.

At the same time, you should be in touch with the need for employees to experience a work-life balance. Free your employees from unnecessary meetings, after-work emails and additional activities to prevent them from feeling overwhelmed.

5. Defining the impact of effective leadership in business

As mentioned earlier, leadership only becomes significant when it’s in line with the thrusts of the organization. When you have a full understanding of what the company believes in and hopes to achieve, you will exert efforts to stay in that direction and, as a result, inspire the same kind of response among the members of your team. Moreover, a unified approach on how to accomplish business targets can set your company apart from the rest of the industry.

6. Improving the quality and level of coaching

There’s no question that coaching is an integral part of leadership development. Through mentoring, you get to know the individual talents in your organization as well as their attributes, including strengths and weaknesses. This will give you a chance to groom high performers for more challenging tasks or to rally behind underachievers, so they feel more included in the team.

For your coaching to matter, you’ll need to study your employees’ learning styles. Make sure that you’re sharing the right content through proper delivery channels to bring about authentic learning in the workplace.

7. Keeping a culture of agility

The rise of new technologies and creative minds are giving way to unprecedented shifts and disruptions in the market, which can prove to be challenging for businesses. These scenarios call for you to be strategically agile in your leadership style, so you can help your organization become more responsive toward emerging demands and opportunities.

In a culture of agility, you’re supposed to keep track of global trends and analyses how these may affect your industry. As a leader, you should be able to educate your employees about current market conditions and influence your employees to be more interested in new ideas, which can bring about improvements or innovations for the company.

8. Making use of technology

Having both the talent and the technology to serve customers is fast becoming a norm in many business organizations. In the same way, you should take advantage of technology to help you in different areas of talent management, such as training, assessments, and other employee development activities.

Through AI technologies, you can gather valuable amounts of data about your employees. These can range from determining your employees’ leave patterns to analyzing your agent’s speech nuances during client calls – all of which can give you insights on how to help your employees perform their tasks better.

Key Takeaways

The times we’re living in are evolving so fast that companies need to come up with brilliant solutions to avoid getting left behind. In 2019, your role as a company leader will be more crucial than ever, especially in addressing the demands and preferences of all types of working demographics. You’ll certainly need to keep building your leadership skills.

Thinkers And Doers Must Work Together – or We’ll All Fail Spectacularly

Posted on by Doug Hall
An urgency to ignite a step change in collaboration between the Thinkers and the Doers in our organizations struck me recently as I walked the shore of New London Bay on Prince Edward Island, Canada.
 
Two examples of Thinkers versus Doers include marketing versus sales and engineering versus production. Marketing creates programs to sell; sales actually go face to face with customers. Engineering designs production systems; production actually makes stuff.
 
Other opposing pairs like this exist within organizations, where one group thinks and then hands off its work to others who are tasked with executing it – but I’ll stay with these two groups for this post. 
 
These “hand-offs” are the root cause of at least 50 percent of the failures of new ideas. The hand-offs don’t work because the Thinkers don’t usually respect or really understand the hands-on work. The hand-offs don’t work because the Doers don’t respect the broader issues built into the ideas. The result is Thinkers make unreasonable requests, and Doers compromise on strategic intent to “just get the production out,” or “just get the sale at any price.” Here are three false cures for the Thinker-Doer divide:
 

1. Allow the Thinker team to have a representative on the Doer team.

 The theory is that if everyone is in the room, all will be good. This only works if the true decision makers from each department are involved. Usually, the representative is a lower level person who doesn’t have the understanding, authority or seniority to say No when a project isn’t realistic from the other team’s perspective.  

 

2. A briefing, along with a “walk through” or “drive along.” 

The theory is that a two-hour production briefing, plant walk-through or salesperson drive along can give the Thinkers all they need to know. Truth is, most Thinkers do their work because they believe they’re “superior in intellect,” and already know everything they need to know.
 

3. Invest more time in thinking harder. 

The theory is that if the Thinkers just think more, all will be right. The most common way of doing this is to hire a mega-consulting firm and apply 50 newly minted MBAs to the challenge. The truth is, no amount of thinking can comprehend the complexities of actually doing the work. 
 
What’s needed is a new type of organizational structure that more closely replicates small companies, who generally achieve 10-times the success in innovation as large companies (50% success for small companies versus 5% for large companies). With small companies, the Thinker is the Doer. By this, I mean that everyone has joint responsibility. Depending on the organization, it could be 50/50 Thinker/Doers, it could be 8/20 or 20/80. 
 
What matters is joint ownership by everyone on thinking and doing. The Thinkers need to own their thinking all the way to the finish point. The Doers need to take responsibility for problem-solving ways that ensure they execute against the broader business needs.
 
This means everyone who engineers also works in the factory. This means that everyone who develops marketing programs also sells them to customers.
 
As I made my way up from the shore, I realized that, for many, this kind of idea would sound delusional. They will say that it’s just not done that way; that our silos and departments are too valuable to be dissolved. They’d consider this type of change too much work. 
 
At our two sister companies: Eureka! Ranch and Brain Brew Custom Whisk(e)y, we’ve always had people work across disciplines. However, in 2019 we’ll take this to new levels. Maggie Nichols, Eureka! Ranch CEO and I are expanding cross-functional ownership to both work teams and companies. The potential for positive impact is exponential. 
 
Diversity – true diversity and engagement – has an exponential impact on the quality of innovation work.
 

3 Ways Neuroscience Can Help You Build a Powerful Team

Posted on by Rick Miller

The NeuroLeadership Institute (NLI) is a leading global research organization and a pioneer of bringing neuroscience to leadership. NLI advocates “using hard science to transform leadership effectiveness.” In my words, they make organizations more powerful. Neuroscience can help you build a powerful team, too.

Listening to Joe Wittinghill, GM Talent, Learning and Insights at Microsoft will give you a glimpse of the organization-wide impact that other companies including Amazon, Apple, Cisco, Disney, Marriott, Prudential, United Technologies, KPMG, and Travelers are seeing as members. These organizations rely on NLI not only to supply great research, but also to apply key findings to create powerful organizations.

They apply research in three key areas to help companies answer important questions:

Performance Management

  • What truly motivates people?
  • What drives better conversations?
  • How does ‘no ratings’ really work?
  • How do we fix feedback?

NLI advocates the importance of focusing on a growth mindset, which emphasizes progress over time as opposed to a fixed mindset, which is primarily/totally focused on a final result. Their research also indicates that intelligence (and power) can be expanded over time and refutes the view that intelligence is static.

Diversity and Inclusion

  • Why are diverse and inclusive organizations smarter?
  • How can we reduce bias?
  • What truly lifts inclusion?
  • How do we hire “the right fit”?

NLI also advocates that bias is natural, normal, and part of the non-conscious. To mitigate bias in decision making, research shows it is important to not only create awareness, but also to label biases when they surface and develop behavioral habits to offset them, particularly given their non-conscious nature. Teams become more powerful with varied behavior.

Leadership and Change

  • What is the science of behavior change?
  • How do we foster a growth mindset in everyone?
  • How do we drive effective learning at scale?
  • How do we fix leadership development?

Finally, NLI advocates fostering a toward/reward state of mind versus an away/threat state – something that is essential to motivating others and creating psychological safety. In other words, the strategy of managing by “FUD” (fear, uncertainty, and doubt) is demotivating and not effective in helping an organization grow.

Truly powerful organizations manage human capital with the same rigor and intensity that they manage financial capital. These organizations understand that the “softer side” of people management is really the “hard stuff” that matters most. Companies that rely on hard science to optimize their human capital will continue to lead the rest.

 

4 Key Elements to Transform Your Company Culture

Posted on by Real Leaders
Here’s a dismal statistic from a recent survey of executives: a full 25% noted that culture efforts initiated at their organization yielded no tangible results.
 
In any large or well-established organization, behaviors can become so entrenched that it’s nearly impossible to undo them. And stuck behaviors belie a stuck company culture.
 
We’ve all witnessed (or made) attempts to stop smoking or improve organizational skills. People don’t change their habits easily — even when they have excellent reasons to do so. But with persistence and attention, habits can indeed be changed, and cultures can and do evolve. And the simpler the approach you take, the more effective you’ll be.
 
Whatever role you play in your company — CEO, senior leader, middle manager or frontline worker — you have the power to evolve the company culture. Instead of accepting the culture as immovable, focus on and accentuate its best aspects. You will help your organization let go of the old patterns that stall growth and progress, and stand in the way of achieving key objectives. The key is selective, targeted alignment rather than an effort to radically repeal and replace.
 

Identify and Measure

Focusing on these four vital elements can help truly shift your company culture and bring out its best:
 
1. Traits: The set of shared characteristics that represent the “family resemblance” of your entire enterprise— the qualities that transcend subcultures, and are at the heart of the shared assumptions people bring to work, and their emotional connection to what they do.
 
2. Keystone behaviors: The few carefully identified things that some people do, day after day, that would lead your company to succeed if they were replicated at greater scale.
 
3. Authentic informal leaders (AILs): That small percentage of people in your company who have a high degree of “emotional intuition” or social connectedness stand out. Identify these, and you can cultivate them to help motivate employees and align with your goals.
 
4. Metrics: The integrated, thought measures used to track progress, encourage the self-reinforcing cycle of true, lasting change, and link to business performance.
 

Act with Clarity and Discipline

As a leader, you need to help those in your sphere of influence become aligned with the company strategy. That means acting with clarity and discipline and making difficult choices. It means narrowing your focus — to those resonant traits, compelling behaviors, influential “authentic informal leaders.” Granted, it’s not easy. What would happen if, right now, you had to select the three keystone actions your company should take immediately to build a better culture? You can probably think of twelve, and you’ll probably have a good reason to include each one. But select just three or four: if you can’t narrow down that list, you and everyone in your organization will be overwhelmed.
  
Another reason to go with the few, not the many: it will be very difficult to measure any change with so many elements. You won’t even know which new behaviors have catalyzed new results. If you want to be effective at change or boosting performance, you need to focus your attention on the critical few.
 

Take a Simple, Focused Approach

Maintain a sharp focus on these four elements and you can reduce complexity and have a positive, informal, and lasting cultural impact on performance. This approach taps into the power of simplicity and takes the emotional dimension of human behavior into account. It also strengthens community connections by encouraging the workforce to look to peers and colleagues for insight, support, and encouragement. When people you trust and admire can model and enable a few key behaviors and then help others do the same, those behaviors will spread quickly — and stick.
 
Complexity is distracting. Comprehensiveness wastes energy. To carry everyone forward together, you need crystal-clear simplicity and a few elements. You don’t need a lot of targets to hit or results to generate. You need to unify your organization’s people around a common, clear cultural movement, driven by a core of keystone behaviors and positive emotions.
 
If you can identify and deploy those critical few elements within the cultural situation in your work environment, you will create clarity and meaning for others. People around you will be more likely to make an emotional, not just a rational, commitment to change. They will trust and respect your choice of direction, and look for ways to follow it. Whether you are a leader close to the front lines or a CEO, it’s likely that that your career will known for your ability to successfully shift a cultural situation. And as you inspire enthusiasm and creativity, you can build the kind of powerful company that people recognize for its effectiveness, and its innate value. 
 
Jon Katzenbach is the author of the bestselling “The Wisdom of Teams.” The founder of the Katzenbach Center at Strategy&, PwC’s strategy consulting business, he has been an advisor on organizations and culture for more than forty years and writes extensively on leaders, organizations and teaming. Gretchen Anderson is a director at the Katzenbach Center who works with client teams across the globe. James Thomas is a partner with PwC’s Strategy&, and leads the Katzenbach Center in the Middle East. Their new book is The Critical Few: Energize Your Company’s Culture by Choosing What Really Matters.