photo credit: Lars Plougmann

It’s a common understanding of how to run a company that you must be market-driven, and be responsive to customer feedback. And as a customer advocate, I would certainly never be one to deny that customer input and market validation are important. But the other side of that coin is that you’re in business not only to make money, but to develop yourself, enjoy the rewards of a job well done, and hopefully leave this world having enjoyed yourself and given enjoyment to others.

To fully live that ideal might mean turning some work down. It might mean making tough decisions about when to leave your current job and start your own company. It might mean passing on certain investors who don’t share your views on how business should be conducted.

But in order to make those tough decisions, you have to really know yourself and your values. Not just personally, although that of course is important too, but as a company. What does your company stand for?

I recently ran across an article at Both Sides of the Table that dealt with this very idea on the way to becoming a more customer-centric organization:

So I started thinking about the ‘Inside Out’ organization. This is the company that lets outsiders have a glimpse of what is going on in the sausage factory. Being transparent about our workload, our struggles, our fund raising, whatever. Letting our customers and the market know that we were a real organization with real people rather than a pre-packaged, pre-processed marketing machine.

It may be scary, but there’s a lot to be said for letting your insides show. You may end up attracting more appropriate customers in the long run.

photo credit: *Zara

I’ve been thinking about happiness at work lately. Having started my own company just about six months ago, and being happily busy and productive, the relationship has been obvious to me between doing something you love and being happy at work. Duh, right?

But it’s more than that: there’s a feeling of empowerment in having chosen my occupation rather than letting it choose me, and being busy with work that I feel good about. I mean, that’s not earth-shatteringly novel either, I realize, but the difference is huge: I went from being a passionate advocate for doing the right thing in multiple environments where that made me a pain in the CEO’s butt to now being a passionate advocate for doing the right thing as CEO of my own company.

Realistically, not everyone is going to start their own company, or will even want to, but we all still need to find happiness. So how do you reconcile happiness with long days doing work you sometimes may not love?

Coincidentally, in some of the blogs I read regularly for inspiration, I ran across a theme this week pertaining to work and happiness.

Gill Corkindale in HarvardBusiness.org had a piece on When Work Doesn’t Make You Happy that addresses that very question, and finds that choice, to the extent that we have it, is key:

“It all comes down to choice, and this is where I believe happiness lies. In choosing — as far as you are able — what you want to do and how you will do it. While not all of us can choose our work and colleagues, we can all choose how we approach things — with an open, optimistic, and positive outlook or with a frustrated, irritated one.”

In a somewhat similar (but perhaps more direct) vein, Jason Seiden, in a piece called Screw Your Career Path. Live Your Story, advocates embracing the surprises in life and finding your true self in the way you live out your choices:

“It’s time, as individuals, to remember that we are each protagonists in our own stories—not fictional ones, either, but real, live, actual, here-I-am-in-the-flesh-stories. [...] Only protagonists can know surprises, friendship, obstacles, twists, victories, villains, daring, love, temptation, loss, luck, setbacks, choices, laughter, tears… only protagonists can know success.”

And finally, from the managerial perspective, SmartBlog on Workforce covered the happiness-productivity connection in a piece called 3 ways to maximize your workers’ happiness — and performance:

“The secret to maximizing performance is to create an environment in which your employees are happy. A happy employee is highly engaged, flourishing and has achieved an acceptable work-life balance.

We know that high employee engagement leads to high performance. Recent studies by the Corporate Leadership Council, Towers Perrin and Development Dimensions International, show that a highly engaged workforce results in a 20% improvement in employee productivity, a 50% reduction in unplanned attrition and a 23% increase in customer satisfaction.”

It’s as if there’s been something in the air to make us all think along the same lines.

What about you – have you been thinking about the link between happiness and meaningful work, or between happiness and productivity, or perhaps the three-way link between happiness and meaningful work and productivity? What conclusions have you come to, different from what we’ve quoted above?

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: Dennis Wright

If you had to choose between an idea that would generate money right now today and an idea that could generate considerably more money later, which would you choose?

It’s not a quiz, it’s an everyday decision. Some would say there’s no right answer for every business at every moment; that it depends on the circumstances; that a business hurting for cash flow probably shouldn’t pass up the short-term money. Some would say it’s a false dichotomy.

Every day we face the same choices in our personal lives when it comes to health and lifestyle decisions, and we understand the tradeoff: fun now vs. wellness later. Or when we make personal decisions about finance, and its our long-term financial well-being at stake. We know the value of compound interest, and we know that making healthy dietary decisions now can make all the difference in our health later in life.

But it seems that some businesses don’t even weigh their options; they automatically choose the short-term gains of immediate sales over creating something of lasting value. A company I used to work with struggled with this dilemma, even though they had solid earnings and money in the bank. It should have been easy to invest in their future by making decisions that would tend to make customers more loyal and return more often rather than drive customers to spend a little more in the short term.

Truly great businesses usually don’t make decisions that are based in short-term rewards; they seek outcomes that will prolong their health and enhance their longevity. We need more examples of that around us.

What’s an example you’ve seen recently of a company placing long-term health over short-term gains?

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.

photo credit: Refracted Moments™

Since I’m sick today but sitting at my home office desk struggling to think clearly enough to write, I’ve got presenteeism on my mind. Presenteeism — the notion of showing up for work when you probably should be absent — has been an increasingly hot topic in workplace research. A Harvard Business Review article called Presenteeism: At Work — But Out of It by Paul Hemp addressses the workplace productivity costs associated with employees who show up but don’t perform. From the article’s description:

By some estimates, the phenomenon costs U.S. companies over $150 billion a year–much more than absenteeism does.

And yet, presenteeism has always been a loaded concept to me. Certainly it’s best that people stay home when they have illnesses that may be contagious. Everyone hates the office cold or flu. But it’s also been my experience that there’s a certain cowboy attitude amongst top managers (male or female) when they get sick. It’s as if they must prove that they don’t need time off to recover from illness like normal humans do. And that sends a very clear message to the middle managers who are striving for promotion into top management ranks, which of course sends a message to their direct reports and so on. It’s not difficult to see where corporate culture reinforces this idea that it’s better to show up than rest up.

So what’s the solution, then? I can’t say I know, but it should probably start at the top, with leaders setting the example of taking the time they need when they’re sick to be away from the office (hey, they’re doing wonderful things with the internet these days; you don’t have to be onsite all the time). Perhaps the rest will follow over time.

Easier said than done, I’m sure — as I sit here in my pajamas and bathrobe pondering climbing back into bed. And you know what? For the good of corporate culture, I think I’ll do it.

What are your thoughts on presenteeism? How have you seen it addressed? Tell us in the comments.

In the interest of fairness, Fog Creek’s compensation policy is open, public, simple, and accountable. Many companies try to obfuscate the rules they use for determining compensation in hopes that they won’t get caught paying some people too much and others too little. Some companies actually consider it a firing offense to reveal your salary!

We feel that in the long run, this can only hurt us through negative morale, high turnover, and destructive office politics. Therefore, the policy in this document is publicly available. People have a right to know what the levels are and what they mean. Everybody has a right to know what their colleagues’ levels are.

It made me wonder what the Corporate Idealist crowd has to say about that approach. Your thoughts? Please share 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.

photo credit: Nick J Webb

Ordinarily, Wal-Mart would be a company this writer personally would have some trouble profiling on this site. But an article at ecofrenzy about metrics-driven sustainable business deals with the topic of sustainability and measurement, and Wal-Mart’s example in the post is a good one:

Rand Waddoups, senior director of business strategy and sustainability at Wal-Mart described Wal-Mart’s four part journey to sustainability, beginning with consensus building around need for sustainability, moving into an evangelist phase, and then to a clear recognition of the business case of sustainability. The fourth step, where they are headed today, is the ability to measure and track progress with sustainability metrics. They’ve found that suppliers that provide poor products are often also mistreating their employees, and cheating when it comes to factory compliance. So holding suppliers to a higher standard is good for business.

Those stages outlined in the post look a great deal like the phases Schopenhauer described that all truth must pass through:

All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident.

Let’s look at the stages Waddoups described again.

First, there was “consensus building.” If you’ve ever been through this stage in a typical work environment, you’ll recognize that it is in many cases the same as Schopenhauer’s first stage, ridicule. No doubt overcoming the skeptics will be part of the process of building consensus. How do you do this? Your best bet is thorough and careful preparation of the business case.

Next, there was the “evangelist phase.” In other words, someone or a small group of committed people seek every opportunity to advocate for the program being introduced. Why do they need to do this? Because of Schopenhauer’s second stage: it is violently opposed. An easy mistake to make at this stage is to assume that if the executive leadership is on board, the employees will eventually come around. That may happen in time, but there will be loss of morale, loss of trust in the leadership, and the opportunity cost will be the momentum the program could have gained from top-to-bottom support. Instead, it makes sense to use this phase to educate the whole company in ways that relate to their perspectives.

Third, “clear recognition of the business case.” In other words, it is accepted as self-evident. Schopenhauer nails it again.

The bonus step mentioned in the Wal-Mart article is the one you should be hoping to get to: being able to measure and track progress. If it can’t be measured, it can’t be held up for accountability, and accountability is necessary for the transparency and full-circle consensus-building that will come with settling into the new program.

But what to measure? Well, there is a whole emerging body of knowledge on metrics for sustainability, if that’s the program you’re introducing, but in general, bear in mind that analytics tends to go through its own phases on the way to useful measurement, including an almost inevitable phase of information overload. Once you’re reached that point, you’ll want to  cut the clutter and get right to the useful stuff. Over at HarvardBusiness.org, Emma Stewart covers a wealth of information on the history and viability of sustainability analysis, and discusses the need to reduce the noise in metrics:

First, in streamlining metrics, practicality should reign supreme. New indicators, like all other management techniques, must pass the test of cost-effectiveness. This means that a certain level of inaccuracy may be optimal and only issues material to the company should be covered. This will also save you from unwieldy amounts of data collection and drawn out consensus building processes.

Introducing a new program is not usually an easy process, but if you have reason to believe that it matters for the business, for the community, and/or for the world at large, you can find a great number of resources to help you make the case and guide it through the phases it must pass through. And when it launches and you’ve been able to measure its success, come back and tell us about it, OK?