Corporate Cultures Built on Values and People

By: Gayle Watson, VP People Ink

In today’s troubled times, what distinguishes successful companies from those that fail? According to Jim Collins, author of Built to Last, Good to Great, and How the Mighty Fall, companies that win during challenging times have core values, stick to those values, and hire the best people. Corporate values have never been more important in our time. We are reminded every day in the headlines about greed and corruption. I can’t help but wonder, how will corporations regain customer loyalty and trust? As we emerge from the worst economic crisis since the Great Depression, I believe we are at a tipping point. Now is the time for values to be at the front and center of every organization’s strategy.

Leading a corporate culture based on values is easier said than done. The most successful organizations today have leaders who understand that they are responsible for the cultures of the organizations. They understand that the success of the organization depends completely upon the people. And they understand that success is about creating a place where people are inspired to perform at their highest levels.

Here are some examples of a few great leaders who are focused on creating cultures built on values and putting people first:

Starbucks’ CEO, Howard Schultz“We had to own our mistakes…the biggest challenge was to preserve our values, culture and guiding principles.”

Schultz made this remark in an interview with Harvard Business Review earlier this earlier this year. Continue reading

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A Leader’s Insights. Part 2- JetBlue Operations Mtg March 2010.

JetBlue Tail (N556JB; "Betty Blue")
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By Grant Spoon

Ann Rhoades, President of People Ink, (Board of JetBlue Airways, and P.F. Changs) talks to Grant Spoon (Chief Geek of People Ink) after recent speaking appearances at the Outstanding Directors Exchange Conference in New York and the JetBlue Airways Leadership Conference in Orlando recently.

This is a continuation of the discussion from part 1.

Grant S-    What else can you tell me about your recent trips?

Ann Rhoades.   The other trip was to the 10 year, actually, this year we’re celebrating our 10th year at jetblue, and so there was an operations off site meeting in Orlando that I attended and the enthusiasm and the energy and the spirit was wonderful. They were very open about what was going on and what we need to do to become Americas favorite airlines and about our new partnership in new york, we’re keeping our main headquarters in New York.  They were very open about why we made that decision, why it’s good for the brand, for our employees, and for our customers. There was a lot enthusiasm around that.  Jet blues keeps headquarters in New York

I like all our people they’re wonderful.  I had so much fun with them, we had a variety, well there were probably 250 or so leaders in the operations area and I love the operators. Everyone from the pilots to the flight attendants to the reservationists to the ones who work various jobs at the airports and customer service and all the other top areas in operations facilities … dispatch, all the important areas which are the ones where they greet the customers and have the interactions with the customers on a daily basis.  They are so enthusiastic and so proud to be working for a company that really lives the values and has a strong corporate culture.

Grant S. Sounds like a great place to work.  What kind of challenges are you finding companies are having in implementing corporate culture changes nowadays?

Ann Rhoades . The Challenges are how do you maintain your cost structure while at the same time making sure our first priority is safety and that we’re living the values with our employees everyday.  It’s very difficult to make (staffing) cuts, most companies would make cuts across the board, but in our case what we did was we cut in areas that would not affect the employees and the customers as much.  We don’t charge for bags for instance like other airlines, so our employees aren’t having to defend that every five minutes.  We also don’t charge for other things that other airlines are starting to charge for which I think is critically important from a customer satisfaction point of view.  Jetblue leads Net Promoter Benchmarks .  We also have not had a general layoff, we have tried to be very supportive of our people through this very difficult time.  Though we’ve made some changes we have not had layoffs or people losing their jobs because of the economy.  You can always lose your job if you don’t support and live the Jetblue values or your not maintaining your technical skills but it isn’t because of the economy.  We are a-typical in that we don’t believe in wholesale cuts of our people and never will.  It’s part of how we make a strong culture.

Grant S.   What type of services does People Ink offer to those companies thinking about re-polishing their corporate culture?

Ann Rhoades. Well we actually go in, after an initial assessment, and work with people on determining their values and what behaviors you want to see emulated in the organization. It starts with values which translates into behaviors.  The greatest organizations in the world are the ones where the values and the behaviors are consistent throughout the organization wherever you are in the world.  Whoever touches you as a customer at whatever level.  When you see consistency of behavior you usually can also see that the leaders are driving that, obviously and usually it impacts performance.  If you think about the Nordstroms and the Southwests and the Jetblues and other brands, Disney, brands that come up every time as outstanding, you will always get great feedback in terms of behaviors of the leaders and the people. It’s very consistent.

Grant S. Thanks Ann for getting back to me.  Keep us updated on events at JetBlue and elsewhere.

Transcript record by phone March 26th, 2010.

JetBlue Airbus 320 coming in to land at Oaklan...
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Transparency in Leadership, A Leader’s Insights. Part 1 of 2.

By Grant Spoon

Ann Rhoades, President of People Ink, (Board of JetBlue Airways, and P.F. Changs) talks to Grant Spoon (Chief Geek of People Ink) after recent speaking appearances at the Outstanding Directors Exchange Conference in New York and the JetBlue Airways Leadership Conference in Orlando recently. Outstanding Directors Exchange

Grant S: What kind of topics were discussed at the Outstanding Directors Conferences in New York.

Ann Rhoades. It was great, first of all it was the first time I’ve been on the stock exchange floor when no one was there so it was relatively quiet.  What I learned from that conference was there is a need and some new regulations in terms of what we report as board members and if anything the responsibilities are getting even greater and certainly the responsibility for total transparency.  And those of us who want to stay ahead of the game need to be aware of what is coming down instead of what we have traditionally done.  And, just having a conversation this morning with JetBlue we decided that we will adopt a number of new rules and give more information (in our annual reporting), so that we support what will be the new regulations and even more than that, to do the right thing.

We are becoming even more transparent (at JetBlue).  We’ve always had a policy of doing what was required and a little more but now we are becoming more transparent, for instance we are adding a big part on risk and an evaluation of risk which is one of the new requirements but it’s also something that we really believe in so there’s lots coming out. And more regulation to come I’m sure (laugh).

Grant S. At ODX you spoke on the topic of Risk and Reward: Aligning Exec pay with a companies long term goals.  Are there any breakthroughs or new trends in the industry or in HR management in general that you’ve been telling people about? Specifically about the new regulations or about reporting?

Ann Rhoades. I tell people to be very careful about and very specific about being transparent on the compensation area.  Make sure you have very strong consultants who won’t tell you just what you want to hear but will tell you what the expectation is and what their opinion is as far as what information we should be releasing.  And more importantly how we should release that information so that people understand it that are reading our annual reports, both internal customers, internal shareholders (our employees) and then additional external interests.

Grant S. Are there any specifics that you enjoyed during the JetBlue Operations meeting in Orlando?  For example I know of a comment you made that it was a really fun company (Jetblue) what kind of specifics made it fun, why was it a great meeting?

Ann Rhoades. During our meeting we had a variety of people who are represented and that’s what I love about it, I mean we had person who told me, I own ten shares, so they wanted to come to the annual meeting which is pretty rare, but I thought great.  And afterwards she stopped me and said “I’m so glad I came. I learned more about the company (JetBlue), I might have to buy some more shares”, she’s probably up to 12 by now.

Grant S . I like that enthusiasm.

Ann Rhoades. I love it. The Operations area has a lot of great people.

Part Two on this topic will be posted soon…

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Zappos Culture is Their Brand

By Gayle Watson

Zappos is a great example of “Off the Wall Leadership.”  There has been a lot of buzz recently about Zappos.  In March 2009 Fast Company named Zappos number 20 in its top 50 most innovative companies.  Not only is Zappos innovative, but it has an impressive performance track record.  In less than ten years CEO Tony Hsieh has grown Zappos into a billion-dollar-a-year retailer.  Zappos’ success has created such a popular demand, that it offers tours of its headquarters every two hours.  So what is the secret to their successful brand?

Hsieh says that Zappos made an early decision to base its brand on its culture.  In a blog post January 3, 2009, Your Culture is Your Brand, he wrote:  “At the end of the day, just remember that if you get the culture right, most of the other stuff — including building a great brand — will fall into place on its own.”

Of course, building and maintaining the culture you want may be easier said than done.  If it were easy, more companies would be doing it successfully.  It takes a focus on core values, leadership, and a commitment to institutionalizing the desired behaviors.  In his blog, Hsieh describes some of the specific things that Zappos has done to ensure its culture is sustained over the long-term.  He says it starts with the hiring process – hiring people who fit the culture.  After hiring, the next step to building the culture is training.  All new employees receive four weeks training.  Employees who do not fit the culture are encouraged to quit.   Any employee who quits before the end of their first four weeks receives $2,000 in addition to their earned wages.

And here is the important part.  Zappos defined its culture in terms of ten core values.  Hsieh says the commitment to values is more than a plaque on the wall – you have to be “willing to hire and fire” based on the values.  Congratulations, Tony Hsieh, for living your corporate values and exemplifying “Off the Wall Leadership!”

Sources:

Zappos presentation on corporate culture:  Delivering Happiness, by Tony Hsieh, CEO

The Zappos CEO-COO Blog, January 3, 2009:  Your Culture is Your Brand

Fast Company, March, 2009, Special Issue:  The World’s 50 Most Innovative Companies.

Inc. Magazine, May, 2009:  Why Every-body Loves Zappos.

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JetBlue’s Success – A Corporate Culture Based on Values

By Ann Rhoades

As a member of the JetBlue Airways board of directors, it was wonderful to see our team given well-deserved recognition by Fortune Magazine this week (Special Feature:  Nothing blue about JetBlue, September 3, 2009) for its successful corporate culture.  Contrary to what we typically hear in the press, this story is a tribute to all JetBlue crewmembers who live and breathe the corporate values everyday.  Having been a member of both the Southwest Airlines and JetBlue teams, I can tell you that each has a unique corporate culture, and both are known for strong values-driven leaders.  It is time to start recognizing leaders who do it right and who mirror the values in their behaviors everyday and in every interaction with their team and their customers.

Congratulations, JetBlue, for your commitment to getting the right results the right way!  The People Ink team is privileged and blessed to have worked with Dave Barger, JetBlue CEO, and his team to develop a values-centric model for creating a unique culture.  The model is simple, but difficult to execute, because it requires a commitment to a set of core values and associated behaviors.  It also requires a commitment to hire and retain “A” players who mirror your values as well as a systematic method to reward and recognize these players.  It includes creating a model for customer loyalty that exceeds their expectations.  It demands that every member of the team keep a real discipline about the financial metrics.  This sounds so simple, but few have really been able to deliver on this simple-sounding model.  Maybe that is because it starts with having leaders like Dave Barger at Jet Blue.  At the end of the day, success is all about leadership!

For complete Fortune Magazine article, September 3, 2009, go to:

http://money.cnn.com:80/2009/09/03/news/companies/jetblue_airways_airline.fortune/index.htm

For more about People Ink, go to:  http://www.peopleink.com

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How Arrogance Causes Leadership Failure

By Gayle Watson

I just finished reading Jim Collins’ new book, How the Mighty Fall:  And Why Some Companies Never Give In.  Collins’ hopes the book will equip leaders with knowledge about the stages of decline, so that they may reduce their chances of falling all the way to the bottom.  I particularly liked it because Collins’ research provides more evidence that values-based leadership is a differentiating factor between successful companies and those that fail.

Collins identifies five stages of decline, all important to understand, but I was most interested in the first two stages because each involves leaders who fail to stick with core values in their decisions and behaviors.  In the first stage, Hubris Born of Success, leaders become arrogant and lose sight of the true underlying success factors.  Collins discusses the concept of “arrogant neglect,” where leaders believe success will continue almost automatically and therefore divert their attention from the core business, culture, and values.

If hubris is not checked, it eventually leads to stage two, Undisciplined Pursuit of More.  In this stage, leaders become obsessed with growth to the point that it is unsustainable.  One of the mistakes leaders make in this stage is to take actions, such as mergers and acquisitions, which are inconsistent with core values.  Another mistake is failing to place enough right people in key seats.  Ultimately, Collins finds the best leaders are those who have humility, recognize the need to build an executive team, and build a culture based on core values.

For more information, go to http://www.jimcollins.com/

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Corporate Culture – How are Things Really Done Around Here?

When Herb Kelleher, former CEO of Southwest Airlines, was asked about the unique Southwest culture, he simply replied, “Culture is what people do when no one is looking.” Most often, I find a disparity between the formal policies and operating procedures of an organization and “how things are really done around here.”   There is no mystery to corporate culture.  Take a look around your organization and you will see it in the way people interact every day.  Culture is reflected by the behaviors of people, whether intentional or not.  If you have not recently looked at your corporate culture, you may be surprised.   Here are some things to think about.

Are you consciously creating a corporate culture? A culture exists in your organization, is it the one you want?  I challenge leaders to examine your corporate culture and to create a culture with intention.

What is your corporate culture? Spend some time observing people in your organization.  Listen and watch how employees interact with each other and customers.  What consistencies to you see in the behavior of the people in your organization?  Which of these behaviors are desired and undesired in your culture?

How are things really done around here? Do formal the operating practices in your organization actually reflect the informal practices – “the way things are really done around here?”   Find the disparities and determine which of the practices are desirable or undesirable in your culture.

Are you hiring people who fit your culture? Are you making hiring decisions based on how people fit your corporate culture?   If not, consider adopting a plan to incorporate “culture fit” into your hiring criteria.

Do leaders reflect your culture? Do the leaders in your organization consistently reflect the desired culture?  How do you identify, select, and develop leaders who exemplify the desired culture?

Let us know what you are doing to create your corporate culture!

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Launching Off the Wall Leadership

In today’s troubled times, what distinguishes successful companies from those that fail?  According to Jim Collins, author of Good to Great:  Why Some companies Make the Leap and Others Don’t, companies that win during challenging times have core values, stick to those values, and hire the best people.  Many leaders fail to execute this simple concept.

Off the Wall Leadership gives leaders five essential principles for creating and maintaining a values-centric culture from a practitioner’s point of view.  Many companies have framed values statements hanging on the boardroom wall, but these values are not alive in the organization.  Off the Wall Leadership is a proven and practical model for taking values “Off the Wall” and putting them into action every day for improved results.

Today we are launching our blog.  We want hear from you about leaders who live the values every day.

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