Work Matters

Category: Bosses

  • Please Help Me Update! Places and People That Use The No Asshole Rule

     Dear Work Matters readers,

    As I am getting toward the end of our long effort to write "Scaling Up Excellence" with Huggy Rao, I am starting to do a bit of blogging and tweeting again.  As part of it, I got an interesting email from a guy named Ben about a really awful battle over verbal abuse on something called the Linux kernel mailing list — look here, bad stuff. Ben asked me an interesting question I would like your help with: Which organizations actually have "no asshole" rules?  Do they work? How do they implement them.  I haven't been thinking about this much lately as I am focused on scaling. I did update the post below in early 2012, but I wonder if folks have any suggestions for places I should add — or subtract.  It seems like something worth maintaining.  Thanks so much! 

    Bob

     

    ButtonA reporter asked me a couple years back, “The No Asshole Rule is fun to talk about, but does anyone ever actually use it?”  It turns out that there is also a lot good news out here, lots of great leaders and many civilized places that people can work.

    I wrote an initial list back then, and I update it every now and then. This is the latest, which I offer in celebration of Work Matters passing 2,000,000 pageviews and the impending publication of Good Boss, Bad Boss in paperback.

    This list is far from exhaustive, but check out the breadth of places and the different ways that the rule is used.  And if you work in a company that has the rule, that uses it well or has tried to implement it, but with limited success, I would love to hear about. 

    Warren Buffett's Berkshire Hathaway   As Buffett's right-hand man and long-time Berkshire Hathaway Vice-Chairman Charlie Munger puts it in Snowball "We had the no asshole rule very early. Our basic rule is that we don't deal with assholes."  Check out this post for more details and thoughts

    SPM Communications. Principal Suzanne Miller won a national contest for women-owned business, in part because her company applies the no-jerk rule to both employees and customers. As the Dallas Morning News reported:

    “It struck a chord with the judges and audience,” she said. “Everyone has worked somewhere crappy."   

    Ms. Miller described the contest as “American Idol for businesswomen.” About 900 applicants from around the country were whittled down to 20 finalists who assembled in Phoenix to present their cases before an audience and a panel of judges.

    “Part of the competition was to give a three-minute elevator speech on how we’re different and why we’ll reach the mark,” Ms. Miller said. Like the TV talent show, the contestants ran through a rehearsal, got ripped apart by coaches and then performed for real the next day. Ms. Miller basically got her spiel down to nine words: "Life is too short to work with mean people."

    2tor: This online education company is serious about the rule; the media toned things down, but the use the A-word in their materials:

    The company is proud of its hard-working, but fun culture and hires based on both job qualifications and character. The company handbook says, "when you're hiring someone, don't trade off competence for character — we need people with both." The quotation comes under a heading in the handbook that could be paraphrased as "No Jerks Allowed."

    Robert W. Baird.  This financial services firm was first  #39 on Fortune's 2008 Best Places to Work list.  Now, they are up to #11. Fortune asked in 2008 "What makes it so great?" And they answered 'They tout "the no asshole rule" at this financial services firm; candidates are interviewed extensively, even by assistants who will be working for them." Since I first learned about Baird, I have spoken to multiple people from the company, including CEO Paul Purcell, who enforces the rules with zest and humor.  Here are some of the details.

    Barclays Capital. They don’t use the word “asshole,” because they are, after all, a respectable financial institution! BusinessWeek reports:

    “Hotshots who alienate colleagues are told to change or leave. "We have a 'no jerk' rule around here," says Chief Operating Officer Rich Ricci.”

    IDEO: The iconic innovation has used the rule for as long as I can remember, from its founding in 1979.  And I've seem them use it in all sorts of ways during my 15 year plus involvement with the place.  As their Careers FAQ page advises (and note they are kind enough to plug this blog):

    Talented and diverse people: We hire talented design thinkers who represent many perspectives, disciplines, nationalities, and points of view. We believe a civilized workplace is a more rigorous and sustainable place to work, so we don’t hire jerks. (Please see The No Asshole Rule by Robert Sutton, Stanford professor and IDEO Fellow, or read his blog.) We provide ways to share knowledge and projects among our people, believing that we all work better and learn more when we freely interact and collaborate with other talented people.

    The Disbarred Lawyer. The Village Voice tells us that attorney Kenny Heller might be the most obnoxious in New York City and that the powers that be finally had enough of his antics:

    ‘After 50 years of heaping abuse on everyone within earshot and hurling accusations of conspiracies, "favoritism," and "cronyism" at countless judges and lawyers, the 77-year-old Heller has earned this distinction: No other lawyer in the city but Heller, according to records of his disciplinary hearing, has been ousted for "obstructive and offensive behavior which did not involve fraud or deception."’

    ‘Heller was disbarred for basically "being an asshole," as one adversary puts it. And in their profession, the rival adds, "that takes some doing."’

    Lloyd Gosselink and Perkins Coie.  Lawyers may earn their bad reputations at times, but I have been pleasantly surprised by how many firms espouse and enforce “no asshole rules.”  Joshua de Koning, is firm Administrator of Lloyd Gosselink Blevins Rochelle & Townsend, which is located in Austin, Texas.  He wrote me a few years back:

    “I ordered my copy of The No Asshole Rule a couple of weeks ago from Amazon.com and am enjoying it thoroughly.  The title caught my attention, not just because it's a great title, but because our firm has had the exact same rule (phrased in exactly the same way) since it's founding in 1984.”

    They are not alone.  Perkins Coie, a national law firm that with headquarters in Seattle has applied the “no jerk rule” for years, which has helped the firm to be named one of “the Top 100 Best Companies to Work for” five years in a row. See this story at Human Resources Executive Online for more about how the rule works at Perkins Coie (and other nuances of the rule).

    Sterling Foundation Management. Sterling helps wealthy individuals establish and management private foundations. CEO and co-founder Roger D. Sterling wrote me, after “stumbling” on The No Asshole Rule that:

    ‘This is a principle that I was told about early in my career as "Never do business with an Asshole," and which we have since adopted. We've applied it to both clients and employees, to greatly beneficial effect. I would reckon it of equal or greater worth than present value analysis, which I must have been taught a dozen times in the course of getting to a Ph.D. in applied economics.’

    Gold’s Gym. Joe Gold was founder of the famous gym that produced multiple body building champions, including a certain future film star and California governor named Arnold. His management philosophy was:

    “To keep it simple you run your gym like you run your house. Keep it clean and in good running order. No jerks allowed, members pay on time and if they give you any crap, throw them out. There's peace where there's order." 

    The Wine Buyer.  The belief that the no asshole rule ought to be applied to customers can be seen in many industries.  A California wine buyer explained how he applies the rule:

    “In my business, we have a rule that says that a customer can either be an arsehole (I'm English originally) or a late pay, but not both. We have reduced stress considerably by excluding some customers on this basis.”

    A related concept is “asshole taxes:” I know people in occupations ranging from plumber to management consultant who don’t “fire” asshole customers, but charge them substantially hire fees as “battle pay” for enduring the abuse.

    Bible Studies Class. This one still amazes me more than any other experience that I’ve had since publishing the book. I’ve written about it before, but no list of different places where the rule has been discussed and used would be complete without it. Psychology Professor Richard Beck wrote a post called "1 Corinthians and The No Asshole Rule." He starts out:

    'Two weeks ago it was my turn to teach my adult Bible class at church. We are going through 1 Corinthians and I was up to teach the famous Chapter 13, "Love is patient, love is kind…"

    And I thought to myself, "Richard, what are you possibly going to say in class that hasn't been said before about 1 Corinthians 13?"

    Then it hit me. I started the class by doing a book review and reading selections from Dr. Robert Sutton's new book The No Asshole Rule: Building a Civilized Workplace and Surviving One That Isn't.

    Beck concludes:

    'So, we reflected on all this in my Sunday School class. And after reflection on the No Asshole Rule, I read these famous words:

    "Love is patient, love is kind. It does not envy, it does not boast, it is not proud. It is not rude, it is not self-seeking, it is not easily angered, it keeps no record of wrongs…"

    Basically, don't be an asshole

    Asm2_img_cecil_balmond1Arup’s “No Dickhead Rule.” Arup is one of the most renowned construction engineering firms in the world; in fact, they were recently profiled in The New Yorker (Check out this abstract for the ‘The Anti-Gravity Men”). Look at this beautiful Kinas TV building the worked in Beijing. As I wrote here, Robert Care, CEO of the Arup’s Australian and Asian operations recently wrote me that they instituted the “no dickhead rule” in his part of the firm:

    "I work for a truly wonderful professional services company that is truly extraordinary and that is doing really well in many many ways.  Three years ago I became the CEO of our Australasian operation.  It occurred to me that there was an issue (not just in the Australasian part of our operations) that needed to be dealt with. I then heard something in September 2005 that started me thinking, and then talking to my close colleagues.  They encouraged me to speak more widely in my organisation and eventually we evolved a 'no dickhead policy'. "

    I recently had an email from Care; He reports that he is now heading ARUP's operations in Europe and that he has introduced the "No Jerk Rule" as the word "Dickhead" didn't fit with local sensibilities, but the rule is pretty much the same.  

    Mozilla (which brings us the Firefox browser): Asa Dotzler a product director, leader of many efforts to spread Firefix, and a stalwart of the company and open source software movement explained to me what it isn't efficient to be an asshole at Mozilla, or in the open source world in general.  As Asa explained, the work they do requires so much cooperation with each other  and with people from outside the company (many of whom are volunteers, who do the coding or marketing Firefox out love for the product and what it represents about a participative and decentralized approach to the Internet), that acting like an asshole is rare because it is so downright dumb when you need so much mutual respect and trust to get the work done.

    Index, a Danish Nonprofit:  Their goal is to use "design to improve life."  The CEO Kigge Hvid wrote me "One of our few management mottos has from the start been, KEEP OUT THE ASSHOLES. " She went on to explain:

    The motto has lucky been used quite seldom. I guess that we for the last 5 years have used the motto 5-6 times – even though we work with thousands of people around the globe every year. When used we simply calls the asshole – meet with the asshole – and tell them to go play somewhere else. I my self have taken great pleasure in making these calls to a few powerful decision makers, on the basis of their brutal treatment of people working with INDEX.

    Former Gillette CEO Jim Kilts advises: "Never Hire a Prick" in his book. Kilts argues that one of the practices that fueled Gillette's success during the years he led the company was "Never Hire a Prick, Even a Smart One."   And, indeed, Kilts has an impressive track record, having led turnarounds at both Nabisco and Gillette.  Kilts talks about how how "pricks"  are smug self promoters and  are destructive to the organization, and him it is essential to avoid hiring them or to drive them out of a company. As he says, they can get short-term results, but they break down people and organizations over the long haul.

    6a00d83451b75569e200e54f31943e8834-800wi.jpgIan Telfe, CEO of Goldcorp in Canada, reported spending a lot of time enforcing the rule:

    There is a bestseller right now called The No Asshole Rule. It is all about: 'Don't hire any assholes.' So I spend a lot of time picking who we're going to hire. You need someone with technical qualifications, but you also have to find someone who can work with other people and respect other people.

    Garry Turdeau Womps Donald Trump with the rule in Doonesbury: You can read about it here and get to the whole cartoon. 

      
     Michael Minns Human Resources in Australia.  The have a "no dickheads policy" too, which is described in quite a bit of detail on the link, along with a metric that shows it is working" "It’s the best place I’ve ever worked at, in fact it is so good that I don’t need an alarm clock to get up in the morning".

    Crossfit Gym at Virgina Beach.  Check of this article on the "The Asshole Barrier."  This quote sums things up: 

    The waiver at CrossFit VB states, “CrossFit Virginia Beach strives to provide a positive and encouraging environment for our clients. Anyone that is disruptive or negatively influences this environment is subject to having their membership revoked. This is at the sole discretion of CrossFit Virginia Beach Management.” The word “asshole” isn’t used, but Gill says she frequently tells clients that “it’s basically an asshole clause.”

    The diversity of this list delights me. Sure, there are still too many jerks out there and too many organizations (and apparently cities) where every day feels like a walk down Asshole Avenue. But there are also a lot of smart and civilized people who are fighting back and, better yet, winning. I’d love your comments. In particular, as I said, if you have some new examples of places that talk about and apply the rule, please tell me!

    Finally, a warning, I have dealt with a number of companies over the years that espouse an no asshole rule, or want to, but are filled with assholes.  In such case, it isn't a good idea to put the no asshole rule in your corporate values, handbooks, or recruiting materials because you risk being seen as both an asshole and a hypocrite.

    P.S.  These examples focus mostly on “top down changes,” but organizational norms can also change when persistent and influential people work to set the right example and to point out – even in public – when behavior happens that demonstrates the wrong way to behave.

    A good example of this comes from a British manager who wrote me that he works in a firm that is infested with assholes, but since he read The No Asshole Rule, he and several colleagues are working to change their norms. He described one of the most effective methods as follows:

    ‘I now attend a lot of management meetings where I have started to introduce the idea of a civilized work place and that we lose available efficiency and effectiveness due to people being de-motivated. When I am now faced with negativity or an "Asshole" I have started to use a new approach of: “surely you don’t want us to breed that type of feeling in the business or listen to what you just said.”  I have found this head on approach very successful.’

  • My Main Focus for 2012: Still Scaling-Up Excellence

    I thought I would provide an update about what I am working on these days, and use it to get some ideas and advice from folks who read this blog.

    2011 was a year of learning and thinking for me, which was necessary because 2010 was simply wild.  I had open heart surgery in April, Good Boss, Bad Boss was published in September, as was the paperback version of The No Asshole Rule — both of which became New York Times bestsellers.   I spent 2011 doing a lot of talking, reading, and thinking about two future projects — they are moving along, but it is always a slow process.  I am lucky to have a job where I don't have to rush to get things out before I am proud of them.

    The first project remains in the early stages.  It follows from my focus on the intersection of humanity and performance in the workplace.  I would tell you more, but it is so ill-formed that I changed my mind about the exact focus several times last year and will likely do so several more times. The one thing I can say at this point is that, when I go back to all the stories people have told me about being a boss, working for bosses, and dealing with assholes, two themes come up over and over: 1. How crucial it is for people to feel as if they are treated with dignity and respect and  2. How important it is for people to be able to stand-up for themselves and others, to create conditions that enable dignity and respect, but to do so without being an asshole.   This first project may take years to reach fruition as my main focus now is on the second project — which fits with my other work on innovation and organizational change.

    My Stanford colleague Huggy Rao and I have been reading about, talking about and studying "scaling" for several years now — the challenge of spreading and sustaining actions and mindsets across organizations and networks of people — of spreading excellence or goodness from the few to the many.  This was my primary focus last year and will continue to be in 2012.  Huggy and I are now making serious progress on a book that digs into the topic.

    Every book has a life of its own. This one took awhile to get moving, but it is now dominating our lives.  We seem to be in constant conversation with managers and executives from all kinds of industries about the topic (e.g., in recent weeks we've talked to executives from high tech firms, banks, and the hotel industry; administrators who run prisons; leaders of a big beer company; and school administrators — this week we are swimming in founders of start-ups), we are teaching a fun and somewhat crazy class with 60 MBA and engineers on scaling-up excellence this term (I will blog more about this in the coming weeks), and the text for the book is now pouring out of our computers slowly but steadily.

    Last year, HBR provided summaries of projects that a host of of business and management leaders would be taking on in 2011 — including me.  The perspective Huggy and I are developing has become more refined and our ideas are now much sharper.  But the  "agenda" piece I wrote about a year ago still captures what we are trying to do pretty well. 

    I said our goal was to finish the book in 2011. That didn't happen, but I am optimistic it will this year as we are moving along at a healthy clip. I repeat that description of our project completely (along with comments from the earlier version of this post, published here last year).  We would love any additional comments, suggestions, examples, or other ideas you have:

    My Stanford Business School colleague Hayagreeva Rao and I are absorbed by why behavior spreads—within and between organizations, across networks of people, and in the marketplace. We've been reviewing academic research and theory on everything from the psychology of influence to social movements to how and why insects and fish swarm.

    We are also doing case studies. We're documenting Mozilla's methods for spreading Firefox (its open-source web browser); the Institute for Healthcare Improvement's "100,000 Lives" campaign (an apparently successful effort to eliminate 100,000 preventable deaths in U.S. hospitals); the spread of microbrewing in the United States; an organizational change and efficiency movement within Wyeth Pharmaceuticals (now part of Pfizer); and the scaling of employee engagement at JetBlue Airways. And we're examining case studies by others, including the failure of the Segway to scale and the challenges faced by Starbucks as a result of scaling too fast and too far.

    Our goal is to write a book in 2011 that provides useful principles for managers, entrepreneurs, and anyone else who wants to scale constructive behavior. Because we are in the messy middle, I can't tell how the story will end. But we believe we're making progress, and we're excited about a few lines of thought.

    The first is the link between beliefs and behavior. A truism of organizational change is that if you change people's minds, their behavior will follow. Psychological research on attitude change shows this is a half-truth (albeit a useful one); there is a lot of evidence that if you get people to change their actions, their hearts and minds will follow.

    The second theme is "hot emotions and cool solutions." As Rao shows in his research on social movements, a hallmark of ideas that scale is that leaders first create "hot" emotions to fire up attention, motivation, and often righteous anger. Then they provide "cool," rational solutions for people to implement. In the 100,000 Lives campaign, for example, hot emotions were stirred up by a heart-wrenching speech at the kickoff conference. The patient-safety activist Sorrel King described how her 18-month-old daughter, Josie, had died at Johns Hopkins Hospital as the result of a series of preventable medical errors. Her speech set the stage for IHI staffers to press hospitals to implement six sets of simple, evidence-based practices that would prevent deaths.

    The third is what we call the ergonomics of scaling—the notion that when behaviors scale, it is partly because they've been made easy, with the bother of engaging in them removed. In developing Firefox in the early days, Mozilla's 15 or so employees were able to compete against monstrous Microsoft (and produce a browser with fewer bugs than Internet Explorer) by dividing up the chores and using a technology that made it easy for more than 10,000 emotionally committed volunteers to do "bug catching" in the code. Mozilla now has more than 500 employees, but it is still minuscule compared with Microsoft, and those bug catchers are still hard at work every night.

    Again, we would love to hear your ideas:  Cases we should dig into, research on scaling and organizational change we should know about, and methods you've used in your organization to scale good behavior and descale bad. We would love to hear it all.

  • Chip Conley’s Emotional Equations: A Leadership Self-help Book You Will Love (Even If You Hate Self-help Books)

    Emotional_book-500x500

    Chip Conley is an astoundingly talented human-being, and for me, the very model of a CEO who built an organization that strikes a  balance between performance and humanity, or as IDEO's David Kelley puts it, between love and money. Shortly after graduating from the Stanford Business School, at the age of 26, he started a  25 year quest to build what has become one of America's most successful boutique hotel chains, Joie de Vivre.  It is now some 40 hotels strong — and each property has its own personality from very first in the chain, the rock and roll themed Pheonix in San Francisco to the upscale and rugged beautiful Ventana Inn located in Big Sur, California.  

    I've been lucky enough to get to know to Chip a bit over the past year, and have been struck repeatedly with his rare blend of emotionally sensitivity, business acumen, creativity, and generosity. Last week, we had Chip as a guest at the class on Scaling-Up Excellencee that Huggy Rao and I are teaching this term to business and engineering students at Stanford.  Chip's stories about the method that he uses to develop a distinct brand identity for each property grabbed everyone in the room: They start by picking the magazine that best represents the experience that they want to design for guests, and then develop five words to summarize the feelings that go with it, and then design to that image.  So, at the Phoenix, The Rolling Stone was the magazine they choose; for a more recent property (The Hotel Rex, I think), they choose The New Yorker.  As Chip explained, this simple early choice helps guides hundreds of decisions about everything from the target market for the hotel to the kinds of unexpected delights they offer guests. 

    Chip blends this creative capitalism with impressive compassion and caring for his staff.  I was most impressed when he reported that, after September 11 2001 when the hotel business was under siege, especially his hotels (in part, because of the French name — he got a lot hate mail), rather than shutting hotels and doing layoffs, Chip and his top team decided to take the financial hit themselves and to protect their people the best they could.  Indeed, while his top team top a huge cut, and Chip took a "salary sabbatical" for three years, not a single person was laid-off for lack of work.  Now that is having people's backs!  And much like when Ed Catmull and Alvy Ray Smith defended their people during trying times, the resulting trust, loyalty, and psychologically safety has fueled the growth and spirit of the company.  Chip is still heavily involved in chain, opening new properties and he still has a financial stake, but he sold a majority share of the company a couple years back and is now focused on writing wonderful books and speaking (he is one of the best speakers I've ever seen, if you get a chance, go and see him).  Indeed, Chip started cranking out books when he was still CEO (a tough thing to do). with his most notable past book being Peak: How Great Companies Get Their Mojo From Maslow.

    The main reason I am writing this post is to point you to his new book, Emotional Equations: Simple Truths for Creating Happiness + Success. I am not sure I have ever seen a book quite like this, as I could not decide if it was business book or a self-help book when I started reading it. Ultimately, I realized it is both, and for Chip, dealing with and channelling his emotions is the key to his success as a leader and mentor and crucial to whether he travels through his days feeling or bad about himself. 

    Chip makes a mighty strong case — using stories, dabs of research, and the lovely simply equations that fill the book — to argue there are general principles that we can apply to ourselves and others to be better leaders and humans.   Chip sees himself as "your emotional concierge" and the book as an "operating manual for being a super human being." He doesn't mean becoming superhuman, to him, that is a dangerous goal; rather, he means not allowing your emotions to get the best of you and instead finding ways  "your emotions can represent the best in you."

    Chip then presents a series of simply emotional equations and associated stories and advice, things like

    Despair = Suffering – meaning

    Happiness = Wanting What You Have/Having What You Want

    Regret = Disappointment + Responsibility (think about that one)

    Authenticity = Self-Awareness x Courage

    Wisdom = The Square Root of Experience

    I know, it seems silly on the surface.  I frankly hesitated to read the book because I hate self-help books (being a psychology major for 10 years has made me cynical about them).  Despite that, I just couldn't resist once I started reading the thing.  The way that Chip frames these formulas, links them to the daily struggles every leader –  and every other person — faces as they try to navigate through life, is done in such a compelling and helpful way that the result is the kind of read  (and a weird from of useful therapy) that simply doesn't exist in any book I know.  I am not the only one who is enjoying this book — it is already on The New York Times bestseller list.

    In the name of full disclosure, I did grow-up in California and I am a big fan of Chip's; but anyone who knows me will tell you I am the least "new age' guy you will ever meet.  So you might be as surprised as I was by how instructive and comforting it was to read Chip's delightful and quirky book.

    P.S. If you want a fun and quite accurate summary of the book's main idea, check out this "book trailer."

  • More Evidence that Exposure to Economic Theory Breeds Greed

    I have written here and elsewhere — including in academic journals with Fabrizio Ferraro and Jeff Pfeffer — about research and theory suggesting that, when people are exposed to economic theory and assumptions, they tend to become more selfish.  This research, as with much evidence in the behavioral science, shows that exposure to ideas or even little "primes" (such as one study that simply exposed students to backpack versus a briefcase) can have surprisingly big effects on whether people are selfish or generous.  In this vein, an article in the December 2011 edition of the Academy of Management Learning & Education journal by Long Wang, Deepak Malhotra, and Keith Murnighan reports three studies that add to this troubling pile of evidence:

    In the first study, students played something called "The Dictator Game," where they are given complete control over how ten dollars were distributed between themselves and a counterpart in another room.   The researchers found that students who studied economics were significantly more greedy than those who studied education, with the average economics student taking about a $1.25 more for him or herself (($7.76 vs. $6.50). 

    A second study compared the attitudes of students who had taken two or fewer economics courses to those who had taken three or more classes, and found that those students who had taken more economics classes had more positive views of their own greedy behavior and of morality of greed in general.

    A third study compared students who were simply exposed to short statements from economists about the virtues of self-interested behavior versus statements from economists about the negative effects of self-interest.  Then they were given a questionnaire with five statements about the benefits of greed. The researchers found that simply being exposed to these short arguments packed a wallop:  People who read about the benefits of self-interest (although randomly assigned to the condition) were more likely portray greed as good, correct, and moral.

    Taken together, these studies, along with a pile of research before them, suggests the assumptions we are exposed to in life — and those we are attracted to as well — can have a big impact on how we view and treat others.  They don't show that economics is inherently evil, but do suggest that embracing (or just being exposed to) one of the core assumptions in the field — that people are inherently self-interested — can create a self-fulfilling prophecy, which can make you think and act like a more greedy person.  

    Looking out for yourself is necessary in life. We all need to money, we have others we need to take care of, and striving to do great individual work can benefit those around us in many ways.  But studies like this one  are instructive.  They remind us that being around others who are greedy and selfish can cause us to be infected with the same behaviors and beliefs, that just being around money and thinking about it can lead us to be less likely to help others (and less likely to ask for help), and that when we are feeling competitive and wanting more and more it is a good time to stop ask and ourselves: Do I have enough for myself? Do I really need more?

  • Do You Have a GOOD and SIMPLE Performance Evaluation Form?

    As many of you know, I have expressed considerable skepticism about whether performance evaluations are even worth using, if they do more good than harm.  And Sam Culbert has gone the next step with his book, Get Rid of the Performance Evaluation. 

    Even though this debate will continue to go on, the fact is that lawyers, HR executives, and the force of tradition — and some rational reasons as well — mean that most organizations aren't going to be getting rid of these things anytime soon. As such, I was talking with a senior HR executive and she asked me if I knew of any examples of good and simple performance evaluation forms — the one her firm uses is way too complicated and she is looking for ideas about how to simplify it. 

    I thought that was a great question. If we must use these things, they might as well be as short and effective as possible, despite their limits.  Can anyone help?  Has anyone ever used one or used one now? 

    Please describe it in as much detail as you can and you get bonus points for sending a picture or pdf or something like that of the form.

      Thanks!

    P.S. I just did a Google search for "Performance Evaluation Forms" and there are a lot of images of them… but it is tough to tell which are good or bad from looking at them — I bet the form itself is a lot less important than the quality of conversation that happens before, during, and after people get the feedback.

  • More Evidence That Sleep Deprivation Turns Employees Into Assholes (Due to Loss of Self-Control)

    Those of you who have followed this blog, and especially, Good Boss, Bad Boss will know that a pile of evidence already shows that sleep deprivation turns people grumpy, insensitive, and dulls their cognitive abilities — in other words it turns them into dumb assholes.   An interesting newish paper adds to the pile of evidence.

    A pair of interesting studies on sleep deprivation were published in the October issue of the Academy of Management Journal by Michael Christian and Aleksander Ellis.  In both a field study with 171 nurses and a more controlled laboratory study with students, they found that when people suffered sleep deprivation, they suffered both a loss self control (measured with items like "my will power is gone" and reverse-scored "I feel calm and rational") and to feel more hostile (measured with items like "scornful" and "disgusted").  In turn, these foul emotional states led the nurses to engage in more workplace deviance, things falsifying receipts for reimbursement, dragging out work to get overtime, used drugs or booze on the job, said something hurtful to someone at work, and intentionally working slower.  The ugliness observed in the workplace was replicated in a more controlled experiment with 75 students" half the students were kept awake by the experimenters for a night in the lab and the other half arrived from a good night's sleep in the morning.  The results were replicated in the lab study, and the added twist was that the experimenters created a situation where there was an incentive for students to steal an answer sheet for a test they took, and there was more stealing by the sleep deprived students.

    This study is a nice contribution because it uses two methods and shows that lack of self-control and hostility appear to be important reasons that sleep deprivation is so vile.  I always find this kind of research quite disturbing because so many important decisions are made by people who are sleep deprived.  This include thousands of doctors who are serving their residencies in emergency and operating rooms right now as well as the corporate and government officials who made all those major decisions during the financial meltdown in late 2008.

  • New CEO Studies: Nuances of Narcissism, Flattery, and Opinion Conformity

    ASQ CoverI got my copy of the Administrative Science Quarterly in the mail the other day. You can see the cover to the left, it is famous for pretty pictures like this one by Signe Pike, whose mother Linda Johanson is the managing editor (and has been for at least 30 years I can recall).  I was one of two associate editors for four years in the 90's and, although I liked doing it in many ways because the work was challenging and I especially liked working with Linda, the weight of having to write over 100 decision letters a year on papers (which would be sent out for evaluation by three anonymous peers first) eventually wore me down. 

    Academia is petty and I can be touchy, so I got especially tired of the hostility from people who got papers rejected as many academics have big egos and turn hostile in the face of rejection (ASQ is the most prestigious organizational research journal and rejects over 90% of papers submitted.   It is so picky that it has been running late for years — note the June 2011 issue just came out this week.  But the quality is always very high.).  There is even one author who is still mad at me because some 15 years later because, even though we accepted his paper, we wouldn't let him publish it until he fixed his lousy writing.   I never thought I would be teaching freshman English to an Ivy League professor, but he needed it.

    The journal has been in good hands in recent years, with the last editor being my scaling co-author Huggy Rao from Stanford and the new editor being Gerald Davis from  The University of Michigan (who I worked with when he was a Stanford student 20 years ago or so). 

    Perhaps because I had just wrapped-up a doctoral seminar on leadership, there were two articles that really caught my eye.  I wasn't shocked by the findings, and you likely won't be either, but was pleased with the rigor.  The three studies from two articles were done in different ways, but the upshot is that CEOs are swayed heavily by praise and ass-kissing of all kinds, especially narcissists, and the effects aren't pretty. In short:

    If you are a CEO, these studies show how hard it is for you to wade through and tune out all the bullshit and ass-kissing that come with the job.  Those flattering stories that the press wants to write about you are dangerous to your organization's health — especially if you are narcissist, but even you are not. And all that insincere ass-kissing and agreement from your board and your management team may help them get ahead, but can hurt you and your company. It can fuel an inflated self-assessment of your skills, cause you to cling to failing strategies, hurt your firm's long-term performance, and cost you your job.

    I offer more details about these studies if you want to learn more; if all you want is the headline, I suggest you stop here.

    The first was by Arijit Chatteerjee and Donald Hambrick, which compares highly narcissistic CEOs to to their less narcissistic peers in two studies. The first was a sample of 152 CEOs from 134 computer hardware and software firms.  I loved their measures of narcissism: how prominently the CEO was pictured in the annual report; the number of times the CEO's name was mentioned in the typical press release; and the difference in compensation (both cash and non-cash) between the CEO and the next highest paid executives.  They argue this measure is reliable and valid because these items were fairly highly inter-correlated (.71 was the Cronbach's alpha for measurement geeks) and they also had a panel of experienced security analysts rank 40 of the CEOs in terms of narcissism, which further supported their ranking method.  

    The findings of this first study focus on how narcissism appears to serve as a filter for outside cues.  The highly narcissistic CEOs were less responsive to whether recent firm performance was good or bad — they tended to continue to make equally risky investments (more risk was indicated by spending more money on R&D, big capital expenditures, and acquisitions of new companies) regardless of recent performance.   In contrast, their less narcissistic peers became more cautious in bad times and tended to take bigger risks during good times.  The most interesting finding was about media praise.  The less narcissistic CEO's weren't affected much by media praise, but the highly narcissistic ones tended to make considerably riskier investments after getting praised in the media.

    So the upshot is the narcissists were swayed more  by "social praise" and less by recent performance!

    Their second study dug into something called "acquisition premiums," the well-documented tendency for companies to overpay when they buy another company.  This was measured by comparing the acquired company's stock price four weeks before the acquisition was announced to what it was finally sold for.  The authors used a different sample of 131 big acquisitions (over 100 million) across diverse industries, and measured narcissism the same way as in the first study.  They found some interesting parallels to the first study: Recent media praise tended to have a stronger effect on the acquisition premiums paid by highly narcissistic CEOs.  A single flattering article was associated with paying a 7% larger  premium among the less narcissistic  CEOs (28% versus 35%) and a 14% premium (29% versus 43%) among the highly narcissistic CEOs.

    In short, this research suggests that most companies pay big acquisition premiums, that recent media praise makes it even worse for all CEOs, and especially worse for narcissists.

    The second article, which I will describe more briefly, is by Sun Hyun Park, James Westphal, and Ithai Stern. It looked at the impact suffered by CEOs who are surrounded by people who engage in (relatively) more intense and frequent flattery (e.g., offering exaggerated compliments) and opinion conformity (e.g., expressing agreement even when they don't quite agree) as measured by surveys of their board members and top managers.  These very persistent researchers managed to gather these kinds of data about 451 CEOS.  The findings probably won't surprise you much:

    More flattery and opinion conformity was linked to CEOs having more favorable evaluations of their own strategic judgments and leadership skills, being less likely to make strategic changes when firm performance suffered (just like the narcissists in the first study), and more to prone to lead firms that suffered persistently poor performance.  The authors also present suggestive evidence that flattery helps bring down CEOs in the end, that it not only is linked to weaker long-term firm performance, it increases the chances that those very same ass-kissing board members are going to fire the CEO when things turn south.

    James Westphal and his colleagues have published many studies like this one that show how the social psychology of CEOs, boards, and top teams color their behavior in often discouraging ways.  For example, an earlier study by these folks suggests that engaging in flattery is a smart personal strategy for board members want to gain additional lucrative appointments, as ass-kissing is associated with getting more board memberships — especially for white males, but not so much for women and minorities!

    As I said at the outset, none of this will likely surprise you.  But it adds further fuel for skeptics who argue that CEOs are at least as irrational as the rest of us. 

    Taken together, this research provides lots of evidence about how boards and top management teams ought to act when selecting and dealing with CEOS and about the hazards that  CEOs face — and hints about why it is so hard for both CEOs and those who oversee them to do the right things.  The headline for me is that praise and flattery often benefit those who provide it, but can be dangerous to those who recieve it.

  • Google: “A place where it simply isn’t efficient to act like an asshole.”

    I just got off the phone with a reporter who was asking about Google, which topped Fortune's best place to work list for the third time.  He wanted to talk about Google's lavish perks and how being a great place to work might be a result of their success rather than a cause. I agreed that money does buy a lot of goodies and massive financial success is such a powerful perfume that it can make everything smell better than is really the case. But I am less cynical about Google than most winners of such awards because of things that have been in place, and from what I can tell, have largely been preserved, from the start that go beyond their famous luxuries, good food, and generous compensation — and put them a cut above many top tech firms that provide similar goodies.  

    The first reason is that Google does not unduly emphasize status differences among people at different levels or within in the same level.  If you watch how people interact there — receptionists and executives, young engineers and senior executives, and people from less prestigious versus more prestigious parts of the company — the more powerful people treat the less powerful people with an unusually large amount of respect, even deference, and the less powerful people don't cower or kiss-up nearly as much as I see in most places.   Yes, Googlers are sometimes guilty of being arrogant when it comes to outsiders (although I see signs of modesty creeping in), but I have to give Larry and Serge credit for creating such norms mutual respect from the start and building an organization that appears to have sustained them  (in fact, just yesterday, I found an old interview that Jeff Pfeffer and I did with Larry Page in late 2002, and he talked about the importance treating everyone with respect and how often the people Google hires showed him that his initial opinion was wrong).

    The second reason, as senior executive Shona Brown told me in 2006 or so (she was #4 in those days, and now heads Google.org), is that Google appears to be a place where it simply isn't efficient to act like an asshole.  When The No Asshole Rule first came out, I did a talk at Google and asked the crowd if Shona was telling the truth.  The general sentiment was she was right, but more telling was, afterwards, a young woman came up to talk to me.  She patiently waited for everyone else to leave.  Then she seemed rather nervous as she started talking about Shona's words.  This woman admitted that she really  wasn't a very nice person. But after a few months at Google, she learned that she had to be nice to everyone, because otherwise, she couldn't get anything done!  Now that is a sign that an organizational norm is working.

    So, while Google is imperfect, as all human organizations must be, it is nice to see that "don't be evil" still appears to infect the company's soul, that Google seems to demonstrate it is possible to be an effective and civilized organization, and that treating people probably does help bolster and sustain performance in this iconic company.

  • Inside Apple: Adam Lashinsky Revealing and Well-Crafted Book

    LASHINSKY_Inside Apple_HCLast week, I opened up my copy of Adam Lashinsky's new book, Inside Apple.   It was about 8 at night, and I figured I would read the first chapter and do something else.  Well, I looked-up, and it was 1:30 in the morning, and the book was done.  Frankly, a business book hasn't grabbed me like that in a long-time.   Adam not only writes well, he provides the most complete picture you can find of how Apple actually is organized, how they divide-up the work, the pecking order, the mindset — the kind of stuff that people like me who are interested in organizations want to know.

    This is not an authorized book like Isaacson''s blockbuster Steve Jobs.  But Adam has been following Apple for many years as a reporter at Fortune, and before that, at the San Jose Mercury. He did many interviews with former Apple employees, and although it is unclear how much access that Apple allowed him (and knowing Apple, he likely isn't allowed to say), I can tell you that I've talked to several journalists over the years who have complained that he gets better access than the rest of them. He also does a great job of capturing the complexity and hypocrisy of the place.  I especially loved this paragraph late in the book, on page 175:

    Apple is company of paradoxes. Its people and institutional bearing are off-the-charts-arrogant, yet at the same time, they are genuinely fearful of what would happen if their big bets go bad.  The creative side of the business that was dominated by Steve Jobs is made up of lifers or near lifers who value only an Apple way of doing things — hardly the typical creative mind-set. The operations side of Apple runs like any company in America, but better, and is led by a cadre of ex-IBMers, the cultural antithesis of Apple.  Apple has an entrepreneurial flare yet keeps people in a tightly controlled box, following time-tested procedures. Its public image, at least seen through its advertising, is whimsical and fun, yet its internal demeanor is cheerless and nose-to-the grindstone.

    Good stuff, huh? I was interested in Adam's opening arguments that Job's was a productive narcissist, which he linked to Michael Maccoby's Narcissistic Leaders and to The No Asshole Rule a bit too.  Many other things about the book were interesting, but three especially stood out for me, and reinforced my beliefs (and now some concerns) that I voiced in my post last year 5 Warning Signs to Watch for at Apple:

    1.  Apple is nearly the exact opposite of the kind of organization hyped by people like Gary Hamel and even Peter Drucker.  It is centralized, secretive, fear-ridden, punitive, and not much fun for most people who work there.  But it works because the pieces of the "organizational design" fit together, or at least did fit together when Jobs was there, in an elegant way.  The secrecy is so severe that, when products are launched, even senior people are surprised by the final product because people are on a strictly "need to know" basis.  But this is offset with a system of roles and responsibilities — and crucial to all of it– is what Apple calls the DRI, the directly responsible individual, a centerpiece of the organization.  There is clear responsibility placed on individuals, not so much on groups and committees.  Although groups and some committees do exist, the DRI can always be found and is where attention is focused.  Which means that that it is clear where to go to provide guidance, to integrate their work with others, and who will be fired, blamed, and replaced — and celebrated too. 

    Essentially, and you can see this in the organization chart on one of the first pages of the book, Apple is designed so that all major (and many minor) decisions are made by a very small group of people, they are not influenced much by suppliers, customers, 99.9% of employees or anyone else; rather is what my friend John Lilly calls a "genius driven" organization.  So, with Jobs gone, the question on the table is if the brilliance of CEO Tim Cook and a few others like Jonathan Ive (head of design) and Scott Forstall (head of IOS software) can sustain the firm's dominance and creativity. These are mighty smart people and they have been slowly weaned from Jobs as he was so sick for so many years.  But the design of the organization places more pressure on senior executives doing the right things than any large company I know.

    In contrast, other organizations have decentralized systems where numerous semi-autonomous businesses are responsible for their own profits and losses, and top executives are essentially managing a portfolio.  HP operated quite successfully this way for decades under Hewlett and Packard.  The had numerous divisions (I recall about 45 when I first got to Stanford in 1983), and it was run by what some insiders called the "mafia model:" if  your business was sufficiently profitable (around 10% net profit per year as the going rate as I recall), you simply paid that "protection money" to  corporate, and you could do whatever you wanted within reason.  If your numbers were lower, you would get "help," and if they didn't improve or if senior management lost faith in you, you were removed.  Certainly, this kind of structure places pressure on leaders to prune, merge, and start new businesses –and to deal with overlaps and conflicts between businesses — but such a structure spreads the leadership chores — and risk — among multiple teams, each of which acts with great autonomy.  (Google is much more decentralized than Apple, for example, but is moving to become more centralized.  For example, when Larry Page took over as CEO, they had so many products done by so many different decentralized groups he went to Wikipedia to get a list of them all–and then he and his team started trimming them).

    My point here, and this follows an old conceptual perspective called "contingency theory," is that other organizations that want to be like Apple –and that seems like so many now — need to be especially careful about copying individual pieces, because the reason it works is that the multiple elements fit together. 

    2.  I am very impressed with how thoughtful Apple's team is about allowing people to focus on what they are doing, and to not be distracted by so many of the other things that most organizations expect from their people. They don't believe in the concept of general managers.  They don't give groups or businesses P&L's… there is only one, that is for the whole company.  They focus on saying "no."   As Adam quotes Jobs, his "Focus is not saying yes. It is saying no to really great ideas."  This "elegance is refusal" philosophy is extended to strategy and organizational design as well.  There are simply a lot things that weigh on many managers and employees at other places that aren't present or are less present at Apple.  Managers aren't asked to be responsible for a local P&L, they know amazingly little about what is going on in other parts of the company, they aren't asked to go to as many meetings or be on as many committees and are instead expected to do what they do perfectly and as little else as possible. 

    This focus on simplicity and reduction of load is also seen in the emphasis on keeping teams as small as possible. The tendency to make teams ever bigger is an awful disease, not so much because it costs more money, but because, as Harvard's J.Richard Hackman has shown, it slows teams and undermines their performance as members end-up spending more time dealing with coordination issues and coalitional battles and less time doing the work at hand.  Apple gets the importance of small teams at all levels (e.g., Adam reports that a 2 person team "wrote the code for converting Apple's Safari browser for the iPad, a massive undertaking”).  They also have an unusually small board of directors — seven members — for a company of that size.  

    This extension of the elegance philosophy beyond their products has huge advantages as the "signal to noise" ratio appears to be quite impressive at all levels and in all functions — people tend to get good information, the information they need (and no more), and aren't confused or distracted by other things.  At senior levels, this means they get the information they need and it means that, although there is discussion and debate at times, when a decision is made, there is less of the usual arguing or undermining.    And if there are failures in implementing, you will be forgiven if senior executives believe you acted intelligently enough and hard enough, but you will be shown the door very quickly if they believe you were dumb or lazy.

    3.  Adam did a great job of describing the company with all its warts and negative side-effects.  I was struck by how Apple is a place that is driven by the pride of doing great work, that it was not about having fun.  That it is was also not about getting rich for most employees. Apple pays competitive salaries for Silicon Valley,  but not at the very top of the market like NetFllix.  And only a few employees who were in early made big fortunes from the stock.  In fact, Jobs hated talking about money.

     My personal reaction, and others no doubt have different motivations and preferences, is that it would be an awful place to work.  The extreme secrecy means there is extreme paranoia.  It means you often don't even know a lot of co-workers, let alone what they are working on — and if you ask them, you can get in big trouble.  Fear is everywhere.  Apple seems to take pleasure in pushing around other companies — competitors, suppliers, and those that just get in the way — just because it can.  And, let's face it, while Jobs was one of the most effective assholes in history, he was still an asshole (Isaacson reported he went through over 70 nurses before finding 3 he liked).   I worry that the bully worship that has emerged in the wake of Jobs death has not only apparently been long institutionalized at Apple, it is now being imitated and gloried by people who lack Jobs' obsessive genius and who are not embedded in an a system that is designed to amplify the best qualities of a obsessive perfectionist and to dampen the worst.

    Jobs said the journey is the reward, a nice sentiment, and I like the pride, thirst for excellence, and action orientation that Adam describes, but spending my days deep in fear, paranoia, and secrecy isn't for me. Life is too short.

    In any case, if you can't get a job at Apple or don't want to, Inside Apple provides the best — most complete and balanced — coverage of how the place works, the elements you might want to copy, and those that you might avoid — that Apple has apparently succeeded DESPITE rather BECAUSE they are used. 

  • Taking People With You By David Novak: Great Read and Most Useful

    Taking_people_with_you_coverMost books by sitting CEOs seem like they are pure fluff pieces, or worse, pure vanity projects.   As such, when I was contacted by a Penguin publicist about having a chat with David Novak, CEO of YUM! Brands about his new book, Taking People With You, I jumped at the chance to talk with him because he is so experienced and successful at scaling –Yum Brands! includes Taco Bell, Pizza Hut, and KFC — which what Huggy Rao and I are currently studying.  But I didn't expect much from the book. To my surprise, after spending a good hour and half with the book in anticipation of the conversation, I was stunned by how good it is — Novak really digs into the details of what he does to sustain, grow, and keep improving this huge company, and how any boss can learn from what he and his colleagues do.  

    The reason the book rises above most others of the genre is that it is based on a program that Mr. Novak teaches himself about eight times a year to people at YUM!, which is also called Taking People With You.  This book is based on that program, so it contains many of the specifics from this program, which as he told me, he has refined over the years as he teaches it about 8 times a year and, so far, it has involved about 4000 people from YUM! The three overall sections are: Get Your Mindset Right, Have a Plan: Strategy, Structure, and Culture, and Follow Through to Get Results.   These headlines are typical, and certainly not original, but once I started digging into how the book deals with them, I was very impressed with the detail, and specific suggestions, and how each chapter contains such specific and useful tools. Consider a few "picture step-by-step change," "choose powerful versus limiting mindsets," "get to know people," "get whole brained," and there are self-assessment tools throughout.   I argued in Good Boss, Bad Boss that the key to effective leadership, and one of the hardest things for any leader to achieve is self-awareness, knowledge of ones strengths and weaknesses and being in tune with what it feels like to work for you.  Taking People With You impressed me so much because it shows how to become more self-aware as a leader, and spotlights the specific skills that every leader needs to be effective.

    As for Mr Novak, I found him quite delightful, straightforward, and most efficient.  I was especially struck with a few things he emphasized. First, when I asked him how he spent his time, he answered that developing great leaders in the company was his number one priority.  Unlike so many companies who turn this responsibility over to professional trainers or worse yet outside vendors, Mr. Novak has developed and taught the Taking People With You workshop himself to 4000 people, and is now "cascading" it so his senior executives will teach it to others as well, so the plan is to touch 35,000 people in the company. 

    Second, when I asked him about bad behavior (as readers of this blog know, I have written quite a bit about how "bad is stronger than good"),  he had a great line, something like: "We are a company that believes in recognition, and that means recognizing both good and bad behavior."  When I asked for an example, he said that YUM! "is not the place for you if you think that you are better than everyone else."  He argued this is especially important to the company, because if managers and leaders see themselves as better than the people who work in their stores or better than their customers, then it undermines their ability to understand customer's and employee's motivations and needs, and it causes them to keep their distance from people they should be interacting with and listening carefully to every day.  (Note I was especially struck by this because I am reading Adam Lashinsky's wonderful new book Inside Apple, which certainly is a different culture, as it Apple appears to be a place where people are more or less required to think of themselves as better than others.  I will write something on Inside Apple  later in the week.)

    Third, Mr. Novak also had some interesting thoughts on what he called "the tensions between centralization decentralization," and he argued that one of the keys to YUM!'s success — which is doing incredibly well in China and other international markets — is that, while there are multiple non-negotiable elements of the culture (I like "Be Restaurant and Customer Maniacs… Now!), they err on the side of decentralization. He emphasized this meant that in places like China and India, the country team is made-up of mostly locals who understand the culture and it meant customizing menus for local tastes such as selling more desserts in France and having more vegetarian choices in India. I was quite interested to hear him talk about this approach, because as we are studying scaling, this tension between having a core set of principles and a shared mindset in concert with the need to give people enough decision-making power to adapt to local conditions is something that comes up again and again, whether we talk to someone like David who is opening thousands of restaurants in China or a chef in San Francisco who has just opened his second restaurant that is in a much different neighborhood than the first.

    Once again, Taking People With You with is a good read and is especially impressive because it is the rare leadership book that contains specific steps you can take to become more aware and more skilled at your craft.