photo credit: LordFerguson

I’m reading Saving The World at Work by Tim Sanders. (Well, when I say I’m “reading” it, I mean I have it out from the library and it’s sitting on my desk. Along with the six other intriguing library books I have out. But I do flip through it once a day or so and I will likely give it quite a thorough skim when I get the final due date reminder email from the library and have to return it in a rush that day. Welcome to my hectic life.)

Anyway, from what I’ve seen so far, the book looks promising, and I’ll be sure to report back when I’ve finished reading (or skimming) it. In the meantime, though, I happened to notice an article at the Canadian publication FP Posted called Sustainability: The Second Business Bottom Line that references the book. Ray B. Williams quotes the book as saying:

“the responsibility revolution has arrived. It demands that companies make a difference to society,” and the ones what don’t participate risk becoming obsolete.

A bold statement, to be sure, and one that should make all but the most cynical of corporate fat cats lean in and at least feign attention. This is a difficult adjustment, after all. In most pockets of corporate culture, we’re just not used to being held accountable for anything but profit to anyone but shareholders. But as Williams wrote in the introduction to that same article:

Business can no longer operate from the perspective of short-term financial gain only. The world has become too complex, and social and environmental concerns now make financial profits at the expense of everything not only short sighted but dangerous. And we need only see the leadership debacles of an Enron, Webcom and the recent Wall Street fiascos to see what selfish financial gain reaps on everyone. There is increasing support for the notion of a business triple bottom line: financial profits, social responsibility and sustainability.

The triple bottom line concept is not new, and indeed we’ve referenced it before. It’s gaining traction… at least in the abstract.

What makes it a tricky sell, though, is the difficulty in accounting for sustainability. It’s all well and good to say businesses should make it a priority to reduce their environmental impact and so forth, but there’s no denying that when it comes to making accountable business decisions, the path of least resistance for the time being is still going to be to use a monetary basis. Cash is the capital everyone is used to measuring business by, and so far it’s just not that easy to account for a business’ use of other types of capital, like water and energy use, or to account for measurable contributions to human development, etc.

As a small business owner, I know this myself: the time I’ve spent with spreadsheets has been concerned with making sure my business has the cash flow it needs to survive. So far I haven’t invested much time at all on developing other non-monetary measures for my business. As the author of this blog, I suppose you’d expect I’d be naturally inclined to do so. It’s not for lack of interest or alignment with the idea of sustainability; it’s just that roughly 99.9% of our societal knowledge about starting and running a business focuses on cash flow and profitability. There’s precious little guidance to be found, for example, about developing a business that supports social growth as well as economic growth. What does exist is largely academic and not distilled for practical application.

So here’s what we need: we need organizations that support new and small businesses, like local chambers of commerce, SCORE, SBA, and others, to start the training early; to educate entrepreneurs about the triple bottom line and how to account for it. Educate mid-level CEOs about other measures besides profit. Help get the business community talking about why we haven’t done more with this before now and how to get started. We won’t have perfect metrics to begin with, but we’ll have a start towards adjusting our collective mindset. And you can’t improve on what you don’t attempt.

Brooks Bell, CEO of Brooks Bell Interactive

Corporate Idealist: Thank you for agreeing to this interview. Tell us a little, if you would, about how Brooks Bell Interactive came to be and what the company does.

Brooks: Brooks Bell Interactive was founded about 5 years ago, and was spun out of my first company, NovelProjects. At the time, NovelProjects focused on corporate website design and had a considerable amount of success. In 2003, we started to work with AOL on data-driven online marketing rather than website design, and it quickly became our biggest focus. It made sense to spin out another company with a new positioning to maximize our opportunity in online marketing.

Brooks Bell Interactive continues to focus on data-driven online marketing. We do strategy, design and A/B testing for acquisition and retention programs in the online subscription space. Our clients include Chase Bank, Dow Jones and AARP.

Corporate Idealist: I understand you went through a risky process relatively recently of hiring an executive team and “replacing” yourself in running the business. How did you arrive at the decision to do that, and how did you adjust to the change?

Brooks: I had hired several new designers last year, and was also still managing several key accounts, acting as our creative director and also overseeing operations. I was directly managing 14 people, and quickly became overwhelmed. My team wasn’t getting the direction or training they needed, and I had very little time or mental capacity to work on the business rather than in the business. I knew that this status quo was far from sustainable and had to make the choice either to invest in a management layer or to scale back my team. Scaling back the team wasn’t really an option, so it was clear that making the investment in my executive team was a step that I needed to take for the company to really have a shot at long-term success.

Looking back, it was one of the best decisions I’ve ever made. Our revenue is up 50% this year, stress levels are down, and we are more productive than ever.

Corporate Idealist: You’ve previously talked about the process of defining your core values and culture, and what a challenge that was. What made it so challenging?

Brooks: Defining core values was a challenge at first. We were a simple transactional company in our early years: a new project would come in, we would do it, and get paid, and move on to the next project. I didn’t feel a strong sense of control over where the company was going and couldn’t easily articulate why we were in business. So, core values seemed irrelevant to me.

This perspective changed in 2006 when I did a retreat with two of my early senior employees. We used the later chapters in E-Myth for our retreat and started with the Primary Aim. It was a powerful, eye-opening exercise that helped me dramatically change my point of view on the company. We established our core values to align with my own personal values, and started to use them as a foundation on which to base our future decisions. The company’s culture started to shift almost immediately, and a new, much more motivated and positive company attitude emerged.

Corporate Idealist: How did defining your core values contribute to being able to run a successful company? Has company culture been an important element in your success and maturity as a business?

Brooks: We defined our core values at the same time that we articulated our company purpose and vision. The effect of those three things was somewhat intangible, but it shifted a perception away from ‘I’m working for Brooks’ to working for a deeper, more individually fulfilling vision. It allowed people to buy in to the company’s purpose, spending energy on something that was in line with their own values and more satisfying than just a paycheck.

Core values, purpose and vision have absolutely helped us in our maturity, resulting in a more long-term approach to decision making, as well as more consistent success in recruiting and hiring.

Corporate Idealist: What did the road to maturity as a business owner and business leader look like for you?

Brooks: I would say that I’m still on this road to maturity as a business owner and leader, as I learn ways to improve myself and my leadership skills every day. The road to where I am now has already been quite a journey. My adventure has included incredible winning years, stressful losing years, partner challenges, constant growth, HR headaches, increasingly high standards and a quickly evolving role in it all.

I am currently managing an incredibly smart, capable team, and my new challenge is to stay ahead of them and provide the direction, goals, and accountability framework they need to perform. It’s tougher than you might think; they really keep me on my toes.

Corporate Idealist: What have been some of the stumbling blocks or setbacks you’ve experienced in growing your company?

Brooks: The biggest challenge for us was to manage the evolution of our biggest client, AOL. In 2006, they represented over 70% of our revenue. In 2007, they were around 15%. In 2008, they were an almost negligible percentage of our revenue. AOL was undergoing massive corporate changes in that period, so we suspected that this might be the case. We needed to replace that revenue quickly to maintain our momentum. In addition, we had been accustomed to servicing only 2 or 3 large clients at a time, so we also needed to build the architecture to be able to service a much larger and more diverse client roster.

It was not an easy task. I feel proud of what we’ve accomplished in the last 2 years. We now have a strong, diversified client base, a well-oiled infrastructure and a well-trained team of professionals to ensure a consistently high level of service.

Corporate Idealist: As we talk about Corporate Idealism on this blog, it’s about doing meaningful work, being creative in business, and focusing on the customer. A lot of your company’s history seems to parallel those values. Do you have any words of wisdom for our readers about being a real-world “Corporate Idealist” and business leader?

Brooks: Yes! I was recently reading some notes from a speech I gave to college students when I was a recent graduate myself. I had just started my first company and was just beginning to have a taste of success. I gave some advice back then that I still think is so relevant on many levels. I said “Success is not about our design (some people have questionable taste anyway), it’s not about our technical capabilities (some may not even realize that what we’re doing is as strategic as it is). We are successful only because we do everything we can to make the right people happy.”

I think this is still relevant because the ‘right’ people are often your customers, your client’s customers, your manager, your CEO, and your investors. No matter what business you’re in, success almost always boils back down to making the right people happy.

photo credit: Nrbelex

I just finished the latest draft of our business plan. I hate writing business plans and tweaking spreadsheets. I only do it because there’s a chance it could wind up getting my company the money we need to grow.

Yesterday, I was speaking with a community group about how my company started. I was telling them about the first conversation between my business partner and I and how the outcome was an outline of the dry erase board. We still have a picture of it, somewhere, like it was our Rosetta Stone, helping us figure out where we were headed. Maybe it will be like Google’s garage.

Whether you run your own online business or you manage something that’s very offline, it’s important to think of how it all got started. Time and again, entrepreneurs and corporate leaders end up at a place questioning when it all changed. They wonder why a job they used to love turned into one they hate.

For me, it always helps to go back to the beginning. Or to put it on paper. Or to remind myself of the vision of what we’re trying to create. Doing so will help you find your place and make sure you don’t end up somewhere you don’t want to be.

What’s your relic? A founding document? An original business plan, piece of packaging or early prototype? Or, what keeps you on track towards that which you’ve been trying to create all along?

photo credit: TheeErin

Take a stroll through most corporate offices these days, and the attitudes you’ll often encounter are anxiety and skepticism, whether camouflaged or blatantly on display. With all the layoffs going on around us and friends and family out of work, it is difficult for many people to work up even a modest enthusiasm for their work, let alone passion.

Yet for businesses to succeed in a tight economy, they need dedicated, passionate people. How can a leader instill passion?

John Baldoni addressed this question in an article on HarvardBusiness.org the other day called How to Make People Passionate About Their Work. Some of the suggestions were:

Focus on the positive. Passion in leaders can be palpable; you know in an instant that the executive cares about the company. In my experience, those senior leaders who stroll through the halls with a nod or good word to say to all are those executives who get things done. And it is because they are out and about, not cloistered in their offices on mahogany row. Rather, they are meeting with employees and customers, vendors and investors, getting to know issues and concerns. They also use these times to talk up the good things.

Address the negatives. Passionate leaders are not Pollyannas; they know the score, precisely because they spend so much time out of their offices. They see firsthand what is working and what is not, and because they have a relationship with people in all levels of the company, they can more readily mobilize employees to solve problems.

At first blush these suggestions seem at odds. But it is vital to address both the reality of the situation and to foster hope for great outcomes. At the risk of sounding like a Jim Collins groupie, Good to Great addresses this as the “Stockdale Paradox,” citing it as one of the factors that allows great companies to survive difficult times and ultimately triumph.

(Moreover, in the book The Opposable Mind, Roger Martin relates management examples where leaders are able to “hold two conflicting ideas in constructive tension.” This is a skill we need as managers and executives.)

How are you rallying your teams to be passionate about their work? How are you, as an individual, cultivating your own passion? Tell us in the comments.

What’s not to love?

So I was delighted to have the opportunity to interview Tony Hsieh, CEO of Zappos.com, for Corporate Idealist. The following responses provide insights into what it’s like to lead a truly innovative and customer-centric company… that just happens to do over $1 billion in gross sales.

Tony Hsieh, CEO of Zappos.com

Corporate Idealist: Thank you for agreeing to this interview. In previous interviews, you’ve mentioned that you got into the shoe business because it looked like such a great opportunity — a $40 billion market. Did you have any concept at the time that you might differentiate the company through customer service, or did that evolve with time?

Tony: Back in 1999, there really weren’t any great destinations online for buying shoes. After learning that it was a $40 billion market in the US, and 5% of it ($2 billion) was being done through paper mail order catalogs, it seemed like a good investment opportunity. I got involved with Zappos about 2 months after it started.

From the beginning, we’ve always thought that customer service was important. But it wasn’t until 2003 that we decided we wanted the Zappos brand to not just be about shoes. Instead, we decided that we wanted the Zappos brand to actually be about the very best customer service and customer experience. Once we made that decision, we started making a lot of changes to our business to be even more customer-service focused.

Corporate Idealist: You’ve also stated that roughly 75% of your business on any given day is from repeat customers. Was the realization that repeat business was going to be your sweet spot something that came about by accident when reviewing business intelligence data, or were you actively trying to cultivate a loyalty- oriented business?

Tony: We stumbled into it accidentally. In the early days of the company (we were founded in 1999), we were unable to raise funding so we weren’t able to spend a lot of money on expensive marketing campaigns. As a result, we were forced to focus more on our existing customers. What we found was that the more we invested into customer service and the customer experience, the more loyal they were, and the more we grew from word of mouth. Today, we take most of the money we would have spent on paid marketing or advertising and invest it into the customer experience instead.

Corporate Idealist: What challenges did you have to overcome to make the company truly able to focus on customer service and customer experience?

Tony: During the first few years, there were many times when we we didn’t have enough money to pay our own employees, but we had such a passionate and dedicated group of employees, that many of them decided to forgo or reduce their salaries because they all believed in the long term potential of the company. If it weren’t for the passion of our early employees, Zappos wouldn’t be around today.

Corporate Idealist: Have you ever had to debate with other executives or with your board of directors about the costs associated with providing an excellent customer experience? If so, how has that been resolved?

Tony: Like any other business, we still have financial goals we need to meet in order to keep our shareholders and board of directors happy. Our approach has been to maximize the amount we invest in the customer experience and our company culture while still meeting our financial goals. There are always things we can do to make our customers happier… for example, in theory we could offer same day delivery for every customer. But it wouldn’t make sense from a financial perspective, so we don’t do that.

Corporate Idealist: Turning our attention to the employee experience, your hiring practices are famously steeped in Zappos culture and oriented towards retaining the right people through the on-boarding process. There’s a clear customer benefit in all this, but it seems that there is an employee benefit, too, in working around people who share a vision and a positive attitude. What indicators can you describe (such as retention, etc.) that this approach is working as intended?

Tony: Our turnover rate for employees varies by department (for example, turnover in the warehouse is higher), but when you compare each department with the same department in other companies, we’ve found that it’s generally lower, which saves the company money in the long run.

Corporate Idealist: You’ve said that when you decided to move operations to Las Vegas in 2004, it was due to difficulties finding customer service people in San Francisco. Yet it seems as if Las Vegas has come to be part of the company identity, as well — visiting conventioneers are often welcomed by Zappos by a party in a trendy nightclub. [Editor's note: I've been fortunate enough to attend one myself.] How did the employees who relocated from San Francisco adapt to Las Vegas culture, and how long did it take for Las Vegas to be part of the company identity?

Tony: When we first moved from San Francisco to Las Vegas, we had about 90 employees in San Francisco and about 70 ended up moving with the company.  Today, we have about 700 employees in Las Vegas, so the vast majority of our current employees joined Zappos after they had already lived in Las Vegas.

For the employees that moved from San Francisco, some of them decided that living in Las Vegas wasn’t quite right for them, so we offered to pay for their relocation back to San Francisco. Overall, I think most employees are pretty happy with the move.

Most customers don’t actually know that we are located in Las Vegas, so I’m not sure if it’s really a part of the company identity.

Corporate Idealist: Another big piece of the Zappos identity that was later to the game is Twitter. You yourself are clearly one of the most popular accounts on Twitter, and many Zappos employees use it as well. How did Zappos come to embrace Twitter, and how has it become a part of the culture?

Tony: We have over 400 employees on Twitter, and you can view their tweets at:

http://twitter.zappos.com/employee_tweets

As you can see, most of the tweets are not about business or marketing, but it’s a great way for us to connect on a more personal level with both employees and customers. It gives people a glimpse into our company culture, which is ultimately what our brand is all about.

Corporate Idealist: Corporate Idealism, as we espouse it on this blog, is all about creative business, meaningful and satisfying work, and an unrelenting focus on the customer, none of which do we believe contradict the ability to make money. The Zappos story epitomizes that. Do you have anything to add for our readers about being a real- world Corporate Idealist?

Tony: I would say rather than focus on what will make you the most money or be best for your career, figure out what you would be passionate for 10 years and go pursue that. A lot of people work hard at building a career so that one day down the road they think it will bring them happiness. And most of the time, when they finally accomplish their goal, they realize that it doesn’t really end up bringing happiness or fulfillment for the long term. One of the things that the research has shown is that people are very bad at predicting what will make them happy. If the ultimate goal is to achieve enduring happiness, it seems like it’s worth spending some time learning about the science of happiness so you don’t wind up in the same situation.

photo credit: AMagill

Many years ago I worked for an institution with some very bad habits about a tiny group of people making all the decisions. It felt bad when the decisions were handed down, and even worse when I was asked to participate in the method. Needless to say I’m not there anymore….and not surprisingly, neither is the management team that drove the whole operation into the ground.

Perhaps it was leftover from childhood, when Spy vs. Spy ruled our play time. We found out we could write in lemon juice as invisible ink, and require our friends to use passwords to get into the clubhouse. It was absolutely glorious fun, but kids’ stuff in a grown-up world doesn’t usually translate well.

Knowledge and Status

There are times to keep situations low-key and to keep preliminary planning groups small. Throwing open all processes to a large group from the beginning usually results in chaos and frustration. Problems arise when management fails to plan for appropriate transparency in the overall strategic effort. Your team should be defined as those upon whom you depend to help carry out change, as well as those significantly affected by the results of your decisions. This may mean administrative and executive staff, as well as clients. Rumors and misunderstandings quickly will destabilize your operational foundation once the word is out planning is happening behind closed doors.

The best thing to do is to let people know in regular staff or even client updates that management will be looking at some current issues, and then provide a general timeline for when others will be brought into the dialogue. It is important that people know up-front that their input and perspectives are valued, and will be taken into consideration if any new approach develops. Beware the intoxicating “knowledge is status” dynamic. When people are in-the- know for too long, and fully aware that others are not, they tend to want to protect that status by losing interest in transparency. Your governance team must understand from the outset that your process is an open one long-term.

Truth or Consequences

There is a familiar saying, “Better to beg forgiveness than ask permission.” Simply put, this approach doesn’t work. Transparent management is not about asking permission so much as being candid, respectful, and trustworthy; and about extending the same expectations to your team. If we are honest with ourselves as we evaluate our own experience, we must admit that it is rare for colleagues to forgive fully being kept in the dark about the direction of the team they assume they are on. Without full investment in the direction, even the best ideas will falter in implementation. And without that investment, there will not be much incentive or accountability for driving to the goal. In the worst case scenario, your team may have a stake in sabotaging the plan to prove management doesn’t know what it is doing.

Your Cred is Everything

Management’s personal credibility is everything to the success of your organization. Decoder rings and secret knocks are child’s play, not grown-up management techniques. Staying above board early with your team, and as often as possible, puts you at a strong competitive advantage over today’s average approach to planning and engagement with organizational teams.

The added bonus for you? It feels really good, too.