Category Archives: Business Management

Abusing the “F Word” in Business

Whenever anybody uses the F Word in a corporate setting, I cringe. The people who use it usually think it makes them seem more sincere, more inspiring and more passionate. But it is never appropriate and should never be used in a business setting. That word is “family.”

In its most innocent misuse, it’s meant to describe an environment that is supportive and inclusive. In its more sinister application, it’s used to create an artificial sense of commitment and loyalty in order to extract disproportionate value from employees. In either case, it misrepresents the honest and healthy relationship that should exist in a successful business organization. A successful company can’t be operated in the same way as a family. Framing a culture around family values ultimately harms the organization.

The model for a successful company culture is not a loving family, but that of a high-functioning team. That difference can sometimes blur because of a few shared characteristics between a strong family and a strong team. Both require a high degree of trust. And there are times when both call for an individual to put the group’s goals ahead of their personal goals. But at their best, families and teams are designed to serve quite different objectives. Teams exist to pursue tangible achievements: win a game, make a scientific advancement, discover a new part of the world. Philosophers can define the purpose of family, but I think most would agree it is not to secure a particular achievement, but to provide a place of mutual support and security independent of outcomes. Teams are all about outcomes. On a team, the members are in service to the mission. In a family, the members are the mission. Ideally, the support of a family is unconditional. The support of an effective team is, by definition, entirely conditional on success.

The following scenarios illustrate how family and team values fundamentally differ:

  • Parents of three loving well-adjusted adult children are drawing up a Will for their estate. They decide to allocate the estate based on how each child’s career and other activities have contributed to the public stature of the family.
  • A sales team had a very strong year in which they earned record growth. Most of the sales team had the same sales as last year, but two salespeople were each able to secure several new customers that drove all the growth for the company. The sales manager gives each salesperson an equal bonus.
  • A woman has dreamed all her life about visiting Japan but never had the financial means to afford the trip. A group of close friends chips in to buy her a trip to Tokyo for her birthday.
  • It’s the deciding game of the baseball World Series. With the scored tied in the last inning, the manager decides to start a veteran near the end of his career because he probably won’t get the chance to pitch in a World Series again.

The different ways we respond to what’s right or what’s fair in those scenarios reveal the incongruence in values. While invoking family values generally triggers positive feelings, most of us would characterize a business that truly ran as a family as dysfunctional. We want our good work to lead to expanded roles and compensation; we don’t want to put up with consistently underperforming co-workers; we want to see management looking for ways to constantly improve the company; we want to beat the competition. Those aren’t consistent with a family dynamic. We don’t expect parents to favor one child over another for example. What often happens in companies that proclaim a family culture is that they want the employees to behave as if it’s a family while they manage the company as if it’s a team. That kind of company reserves the right to reorganize for efficiency or separate from underperformers. But employees exploring competitive offers or asking for higher compensation are labelled as self-centered or a “poor fit”.

The problem for these companies and the people who work for them is that events inevitably occur that bring reality to light. A merger may call for eliminating duplicate roles, a promotion may elevate a better performer over a more tenured colleague, a new product may be scrapped because it’s not meeting market projections. When these team decisions are made, the family illusion is broken. This can cause resentment even from those who aren’t affected. It can shatter the foundations of a corporate culture that has taken years to build. Start-ups are especially prone to a moment of truth when business imperatives force them to make a decision that violates the family ideal they organized around at their creation. The effect can be devasting. In my experience, companies recover far better from business setbacks than they do from disillusionment.

A pseudo family culture can hurt a company in less drastic but equally damaging ways. It can lead to poor employee management and bad management decisions. A family culture resists investing more in high-performers.  It can discourage tracking and monitoring the timeliness and quality of deliverables. It can create a misguided “we’re all in this together” mantra that overlooks the need for corective feedback for employees falling short of standards . It can also lead to lazy management. A team leader should be constantly looking for opportunities to improve the team. A family mindset tends to accept the status quo, and not look as aggressively for opportunities to improve. If a basketball team drafts a new player who is better than a current player, that current player would see her playing time reduced or a lower salary offer come contract renewal time. We wouldn’t expect the arrival of a new family member to push out an existing one. Managers working with a family mindset may unintentionally undermine the team’s success by not fulfilling their obligation to make the team as strong as it can be.

If you’re considering working for a company that claims to be a family, exercise due caution. They are either naive or disingenuous, and neither of those is a point of strength. At the very least, you should understand that any company that describes itself in familial terms is misguided. If you’re a leader, avoid falling into the trap of using family language and metaphors to shape your culture. You can still bring out the positive human values you want for your organization without falling into dishonest tropes. Think of what you’re really trying to instill in your culture and find the ways to articulate them with more honesty, accuracy and mutuality. Consider these examples of framing a culture with a team mentality:

Family Value FallacyClarifying the IntentTeam Value Framing
LoyaltyThis often devolves into a one-way street that only applies to the employee. The right intention is to foster an employer-employee relationship based on more than short-term exchange: a payment for a fixed set of deliverables. In an ideal relationship, the company will provide resources and opportunities that expand their employees’ skillsets. This increases their value to the company and the company’s value in the marketplace. If employees share in that value creation, they won’t stay out of familial duty, but because the opportunity to grow and benefit from that growth increases with their tenure.  Shared growth
SupportFamily also appeals to our sense of security. We don’t have to be at our best at every moment to keep our place. A company should never claim that their support of an employee is unconditional, because it isn’t. But growth depends on taking risks that don’t always pay off so it’s important that companies create comfort around responsible risk-taking. Strong companies embrace failure that isn’t due to lack of effort or incompetence by channeling its lessons into future efforts.Learning organization
DedicationDedication in corporate jargon is often a euphemism for the willingness to work harder or longer. The fallacy of that perspective has been borne out in the hand-wringing over” “quiet quitting” and “the great resignation.” As a business leader, what you should really want isn’t more hours, but people who care about their work. Organizations instill caring by sharing the mission of the company and helping employees recognize their role in it.Clarity of mission

One of the reasons otherwise thoughtful leaders default to language around family is because they’re reaching for an emotional connection. They rightfully know that we are influenced more by emotions than rational thoughts when making decisions or forming opinions. Family-like language provides a shortcut to creating an emotional appeal. Leaders should resist that shortcut for two reasons. One is that people are also inherently drawn to truth over falsehood. The truth of an organizational culture will always come out, and a promise of family is one that can never be fulfilled. The second is that there is plenty of emotion to be tapped into from teams as well. As any casual observer of sports could see, overcoming defeats and celebrating wins creates emotional connections as powerful as any human experience. There’s no need to use the F Word.

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Filed under Business Management, corporate culture, Organizational Behavior

One Tip to be a Better Interviewer

When I first arrived at the managerial level in my career, I started to do a lot of entry-level interviewing for my firm.  Some of that involved going to colleges and business schools where we would interview 8-10 candidates back-to-back.  It became a taxing chore, trying to stay attentive to each person as the day wore on.  The faces, resumes, and responses all started to blend together.

I had the good fortune to team up on one of these campus trips with a wiser, more experienced colleague. Rishad Tobaccowala is now one of the most respected global voices in the advertising industry, but then he was just a very insightful guy who gave some terrific advice. His suggestion was simple. Put aside the standard questions, and instead just try to learn something useful from each person you meet.

That simple tip almost immediately elevated the experience on both sides of the table. It made me a better interviewer, and it made each interview a more substantial conversation. If you really focus on learning something new from a person, it has the following effects:

It makes you ask better questions

Instead of leaning on old hacks like “tell me about yourself” or “share an example of where you overcame a significant obstacle,” it makes you want to uncover what is special in their experiences and background.  It creates a game-like dynamic that motivates you to search for clues about what makes this person unique.

It’s more revealing

We tend to reveal our truer selves when we talk about something that’s a real passion for us. It shows what’s important to us, how we think, how we pursue goals. By bringing out something the other person feels drawn to, you get a clearer sense of who they are. As a result, you get a better gauge of what that person could or couldn’t bring to the role you’re hiring for.

It increases the value of the conversation

The traditional interview creates a filtering mentality. The time is only worthwhile if the candidate passes muster. By transforming it into a learning opportunity, it creates a reward even if the person isn’t a fit for what you’re looking for. It brings a benefit to the conversation itself, not just to the chance of a hiring outcome at the end. Practically speaking, it also opens the potential for seeing a different fit down the road.

Interviews are a problematic evaluation tool for a number of reasons. But I found this advice makes them more effective for what interviews do best, which is providing the opportunity to get a fuller sense of a person beyond their acquired skills and experiences.

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Filed under Agency Management, Business Management

The Missing Measure of Business Strength

There are three areas that determine the strength of a business. Yet widely accepted measures have only been developed for two of them.

The overall health of a business depends on three factors:

  1. The quality of its products and services
  2. The cost/price structure
  3. The strength of customer relationships

The third area is often overlooked, but shouldn’t be. Peter Drucker distilled the issue into a fundamental truth when he said that “the purpose of business is to create and keep a customer.” It’s the strength of the customer relationship that makes people automatically ascribe higher levels of design and performance to Apple products.  It’s the lack of a customer relationship that feeds the high churn rates in wireless carriers. This is what CEO’s mean when they use the word “brand,” as opposed to what CMO’s often mean when they use the word brand. The CEO describes it in terms of a competitive advantage, and the CMO too often in terms of imagery and recall.

As vital as this relationship is to both the short and long-term health of the business, the measurements around it are not well-developed. There are rigorous measures and standards around quality, as evidenced by approaches like Six Sigma and third-party evaluators like J.D. Power. There are even more rigorous measures in place over the financial health of the firm, enough to employ an army of accountants at any large firm.  But measures of the customer relationship are underdeveloped. The net promoter score attempts to measure the customer relationship by likelihood to recommend to  friend. It is the closest thing we have to a standard measure of customer relationships.  As such, it has been a useful tool for many companies looking to develop a stronger customer-centered culture. Still, its critics are as numerous as its supporters because it lacks the objectivity that is standard in measurements of quality and financial performance. For example, people may be less likely to recommend something they perceive as a vice, even if they are very satisfied (e.g. high fat ice cream). Many companies have their own loyalty measures that are more sophisticated than the net promoter score. But the fact that they are proprietary means that it’s difficult to compare their measures to other competitive companies.

The day will come when savvy investors will analyze customer relationships as closely as they analyze EBITDA. That will be a good day for enlightened marketers because it will establish the best of them as mission-critical drivers of business growth.

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Filed under 21st Century Marketing, Branding, Business Management

Planning is Everything. Plans are Nothing.

The title above is from a quote usually ascribed to Dwight Eisenhower.  Though he was referring to battle plans, it is an apt lesson for business plans as well. His point was that the battle never goes as planned. Weather conditions, enemy reactions and human mistakes conspire to ensure that every military action usually goes off plan before the first shot is fired.  But if the planning process is done with the proper rigor, leaders can react more effectively to unexpected developments. They can assess how changes impact their overall strategy, and better judge the consequences of their subsequent decisions.

I recalled this quote after seeing an interesting discussion on LinkedIn debating the value of business plans for new companies.  Some potential entrepreneurs were dismissing the value of business plans for start-ups because they rarely had any relevance to the business once they hit the  realities of actually going to market. General Eisenhower reminds us how this argument misses the point. The value of a business or marketing plan is not in the plan itself, but in forcing you to think in a rigorous way about how best to deploy your resources. Who is your target? What’s your value to them? Who’s your competition? What kind of human and financial resources will you need to make a go of it? Of course, unless you are the first true psychic, most of what you come up with will be wrong.  The details of the plan may be mere historical artifacts within months of launch. But if you planned well, you are better able to identify and react to what you were wrong about.

The same lesson was delivered in another context by an accomplished climber I once heard speak. He described the meticulous planning process that his team followed before a major climb. They literally mapped out every step. He went on to say that they almost never followed the predetermined path once the actual climbing began, but it was the planning that allowed them to make intelligent choices under stress about what they could afford to change.

Whether you are crafting a business plan for a new company or a marketing plan for an established brand, there are three important lessons in this.  One is that a plan is worth what you put into it.  If you just go through the motions in order to be able to point to an official-looking plan, it will be of no value. Second, you shouldn’t dismiss the planning process just because the plans themselves are rarely executed.  A well-constructed plan will make you a smarter leader and manager for the unexpected turns that inevitably come your way. The final related lesson is that you should not treat the plan as anything but your best current guess. If the plan isn’t working, don’t be afraid to change it. Too many marketing managers disregard new information and new opportunities because it’s “not in the plan.” A plan is not a substitute for thinking. Plans should be treated more like boyfriends than husbands. You should always be open to a better one.

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Filed under Activation, Business Management, Market Strategy

Ten Things Your Agency Doesn’t Want You to Know: #4

You have the wrong people in your agency meetings.

It is a truth of life that people often make the mistake of assuming that just because they consume a lot of something, they are expert at how to make it. People who drink a lot of fine wine will talk about terroir and tasting notes even if their palettes couldn’t distinguish between Merlot and pine tar. The same can be said about movies, driving and advertising. People have been surrounded by advertising all their lives, so they naturally and erroneously assume they know a lot about it. The result is that there’s an implicit and harmful assumption that everyone’s opinion is valid. The CFO weighs in, the summer intern gets a vote, and various other unqualified personnel are encouraged to participate in the evaluation of the work “as part of their development.” It’s hard to believe that a company would let a first-year finance associate tweak the firm’s capital structure, or the HR director play with the supply chain, yet often have no qualms doing the equivalent thing to their marketing. If you want your marketing programs to be better, than have your most qualified marketers work on them. You should demand the same level of expertise and experience in your marketing decisions as you do in your other business decisions.

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Filed under Activation, Business Management, Innovation

Business Culture: Family vs. Team

I often encounter business leaders who try to capture the positive aspects of their company culture by referring to their “family” environment.  These are often managers who want to distinguish themselves from a cutthroat or unethical work environment.  Nonetheless, whenever I hear an executive  refer to the company family, I can’t help but wince. Inevitably, they are undermining their own credibility, integrity, and success.

While I appreciate the sentiment, companies cannot operate like families. At their best, they are teams. Managers often confuse the analogies of family and team, because many of their positive values overlap.  They both require sacrifice for the good of the group, and being able to rely on that same sacrifice from others.  They both thrive in a spirit of tolerance, where we acknowledge each other’s different styles and strengths. Both strong families and strong teams share common core values, such as trust, honesty, and loyalty.

But they diverge in a meaningful way. Family is an unconditional commitment. A  family should remain a family no matter what they do.  A family does not have an explicit mission, other than its own survival. A team is a conditional commitment. It exists because of a mutual commitment of its members to support an explicit mission, be it completing a project, defeating a competitor, or providing a service.  This creates different expectations and different obligations on its members.

A family leader is expected to support his family in every way possible. If a child is engaging in behavior that is destructive or embarrassing to the family, the parents’ first obligation is to support that child, and do everything they can to overcome whatever is at the root of their child’s  problem. If an employee is engaging in behavior that is destructive or embarrassing to the firm, a manager’s obligation is to minimize the negative  effect on the mission. If that can be accomplished by helping the employee, all the better. But if it can only be addressed by replacing the employee, that’s an acceptable alternative.

If a family member’s temperament is a poor fit with the rest of the family, the unconditional commitment of the family should overlook those differences, and accept them as they are. If an employee’s work style is at odds with the rest of the company, and manager needs to either work with that employee or find a replacement that will make a better fit.  A manager who accepts people as they are to the detriment of the firm is incompetent.

There was a sad story about a family that adopted a child, and then sent the child back after they found out he was going to be challenging to take care of. The universal reaction was that it was unethical to reject a child from the family simply because he was too hard to take care of. In a business situation, the ethics are practically reversed. If an employee was taking up disproportionate resources to support and manage, other employees would consider it unfair. One of the most common worker complaints is management that tolerates dead wood employees who don’t pull their weight at work.

Sports are the most obvious examples of team. If a wide receiver on a football team can’t catch a football, a coach would not keep him on the team. But you would never think of replacing a sibling for lack of performance.  A football team doesn’t pay its starting quarterback the same salary as its backup kicker. A team rightfully gives more attention to the people who are most critical to its success. A family’s love and attention should not be doled out on the basis of some performance measures. With a family, the family unit itself is paramount. With a team, the mission of the team is paramount.

Managers who promote their teams as families do themselves and their employees a disservice.  As in the recent downturn, it can cause additional bitterness when it requires letting people go. It makes a lie out of everything the manager claimed to stand for. Families don’t disown other family members in bad times. The same disillusionment happens if someone is passed over for a promotion or gets a smaller bonus.

Employees lose trust in their leaders if they see them violating the principles they espouse. The differences between family and team are subtle but profound, and managers who confuse them risk being seen as hypocritical or dishonest when those values are put to the test.

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Filed under Business Management, Market Strategy