The Magic Bike Company

Hire to fit your culture!

All organizations are societies and all societies develop rules over time that define what is acceptable and what is not acceptable. These unwritten rules bind the organizations members together and form the company culture. We take these rules for granted, but together they define the way things get done in your workplace.
Start this chapter by listening to Jeff Lawson talking about values and defining culture at Twilio
“Our core values are empathy, caring, and continual improvement. C.E. Woolman, principal founder of Delta back in the 1920s, had the very simple belief that if we took better care of Delta people, Delta people would ultimately take better care of the customers. If we provide employees with the tools, training, and freedom to act on behalf of customers, those employees will go to greater lengths than others in the marketplace to deliver highly differentiated services.”
“One way we empower employees is by authorizing them to take action at the first point of contact. If you’re with a customer and can do something to solve his or her problem, do it. As the first point of contact, make that discretionary effort. If the solution goes beyond the norm, so much the better. We want employees to know the company has their backs—when they go out on a limb for a customer, their efforts will not only be understood but also celebrated.” retrieved from Deloitte Insights By Mary E. Morrison, senior writer, Deloitte Insights for CMOs.
Quote IconThe benefit of having a well understood and socialized culture is that people know the boundaries of what is and isn't okay.Quote Icon
There is tension underlying a rising movement across the business landscape. From automakers such as Ford and Audi to fashion houses like Gucci and Ralph Lauren, from health care firms to consumer-packaged-goods makers, companies are increasingly seeking to align their commercial activities with larger social and cultural values—not just because it makes them look good, but because employees and customers have started to insist on it.
“To motivate a team, you need goals that are clear, and metrics that support them. That means that your strategy — how you break down the problems and how you plan to remove the obstacles — should be widely understood, and your goals should match a shared mission. And both need to match the systems you’re using to navigate, so that your people align themselves with the strategy. That isn’t something that happens on its own, but it also isn’t something that can be imposed from above. Instead, it needs a cooperative alignment, matching goals with incentives based on useful metrics.”
“Failure to use metrics well means that motivations and behaviors can drift. On the other hand, using metrics won’t work exactly, because complexity isn’t going away. A strong-enough sense of mission means it may even be possible to align people without metrics. It makes sense, however, to use both sets of tools; adding goals that are understood by the workers and aligned with the mission, which allow everyone to benefit, will assist in moderating the perverse effects of metrics, and the combination can align the organization to achieve them. Which means ambitious things can be done despite the soft bias of underspecified goals and the hard bias of overpowered metrics.” retrieved from - David Manheim

Obedience versus Collaboration

The military demands obedience and the basic training from day one is geared to produce a quick response. A slow response to the command to “hit the dirt” could be fatal. There are jobs in industry that demand obedience, and like the jobs in the military they don't produce innovative ideas.

 

Danger sign

Leadership and behavior: Mastering the mechanics of reason and emotion

Eric Maskin presents mechanism design that recognizes the fact that there’s often a tension between what is good for the individual, that is, an individual’s objectives, and what is right for society—society’s goals. And the point of mechanism design is to modify or create institutions that help bring those conflicting objectives into line, even when critical information about the situation is missing.
An example that I like to use is the problem of cutting a cake. A cake is to be divided between two children, Bob and Alice. Bob and Alice’s objectives are each to get as much cake as possible. But you, as the parent—as “society”—are interested in making sure that the division is fair, that Bob thinks his piece is at least as big as Alice’s, and Alice thinks her piece is at least as big as Bob’s. Is there a mechanism, a procedure, you can use that will result in a fair division, even when you have no information about how the children themselves see the cake?
Well, it turns out that there’s a simple and well-known mechanism to solve this problem, called the 'divide and choose' procedure. You let one of the children say, Bob, do the cutting, but then allow the other, Alice, to choose which piece she takes for herself. The reason why this works is that it exploits Bob’s objective to get as much cake as possible. When he’s cutting the cake, he will make sure that, from his point of view, the two pieces are exactly equal because he knows that if they’re not, Alice will take the bigger one. The mechanism is an example of how you can reconcile two seemingly conflicting objectives even when you have no idea what the participants themselves consider to be equal pieces.
Eric Maskin presents the technique to make employees shareholders in the company. You might think that in a large company an individual employee’s effect on the share price might be pretty small—but as Eyal said, there’s an emotional impact too. An employee’s identity is tied to this company in a way that it wouldn’t be if she were receiving a straight salary. And empirical studies by the labor economist Richard Freeman and others show that even large companies making use of employee ownership have higher productivity.

Article retrieved from McKinsey & Company — McKinsey Quarterly 2016
Good company culture is more nuanced than simple homogeneity or heterogeneity. On the homogeneity side, everyone being alike isn’t enough. A robust company culture is one in which people have something in common that distinguishes them quite sharply from rest of the world. If everybody likes ice cream, that probably doesn’t matter. If the core people share a relevant and unique philosophy about something important, you’re onto something.
Sign of cooperation
Similarly, differences in qua differences don’t matter much. In strong company cultures, people are different in a way that goes to the core mission. Suppose one key person is on an ice cream only diet. That’s quirky. But it’s also irrelevant. You want your people to be different in a way that gives the company a strong sense of identity and yet still dovetails with the overall mission. Having different kinds of problem-solvers on a team, for example, can make for a stronger culture. retrieved from: Blake Masters' class notes chapter 5.
Two good example companies provide guidance for generating employee involvement: Netflix — Reference Guide on our Freedom & Responsibility Culture and Valve — HANDBOOK FOR NEW EMPLOYEES
The goal is to create a culture where peers inspire peers, in which each employee acts like a leader, pushing the culture forward. People like us do things like this. People like us, care.

When it comes to making decisions, holding people accountable, and dealing with conflict, leaders can find themselves unable to act openly and forcefully. Some leaders tendencies lean towards a high tolerance for dysfunction, due, in part, to the value of not upsetting people. Leadership will often let disruptive behavior go on for some time without speaking up about it, as being non-judgmental becomes more important than accountability.
“The highest form a civilization can reach is a seamless web of deserved trust. The right culture, the highest and best culture, is a seamless web of deserved trust. Not much procedure, just totally reliable people correctly trusting one another. That’s the way an operating room works at the Mayo Clinic. One solution fits all is not the way to go. All these cultures are different. The right culture for the Mayo Clinic is different from the right culture at a Hollywood movie studio. You can’t run all these places with a cookie-cutter solution.” Charlie Munger quoted by Tren Griffen.
In his book Drive, Dan Pink says more than money; employees are motivated by the holy trinity of mastery, autonomy, and purpose. He presents this idea in this Teds Talk.

 

If this is true, then it’s easy to imagine the perfect employee: satisfied with her abilities, content in her relationship with the larger organization, and happy with the meaning she derives from it all. This is wonderful, but it’s only enough when you’re accountable -- when you can guarantee your actions by your word alone, and not by third parties.
“If you have a bunch of self-motivated and smart people and you put them together they’ll produce something incredible. But you can’t minimize the importance of management. It’s a dirty word. It’s prosaic. It’s not vision. It’s not dream. It’s not technological excellence. But unfortunately, it makes all the difference.” —Joanna Hoffman, part of the original Macintosh team, head of marketing at General Magic. Retrieved from Fast Company

The product of culture

How is it that Trader Joe’s consistently delivers such great customer experience? It connects with customers on an emotional level. Customers who shop at Trader Joe’s are able to connect with employees and managers on a higher level. A very idiosyncratic feature of Trader Joe’s is their jovial employees. It ensures that its employees are content and motivated. Trader Joe’s employees step in to help wherever they can. Their business model allows them to respond to customer feedback in such a way that other supermarkets cannot match. Their culture is a competitive advantage!

“I ordered three buttermilk pancakes with scrambled eggs, and Ken ordered three buttermilk pancakes with fruit, and the waitress took our order and came back in 15 minutes. She put our two plates down, and all she said to Ken was, ' I gave you extra fruit.' That’s all she said. I gave her a 50 percent tip. Why? Because that waitress didn’t control much, but she controlled the fruit ladle, and what was she doing back there in the kitchen? She was thinking entrepreneurially. She was thinking to herself, ' You know? I’m going to give this guy an extra dollop of fruit. See what happens '. It turns out, he was sitting with a chump like me, and I saw that, and I said, ' That’s kind of cool. I’m giving you a 50 percent tip.' She was thinking entrepreneurially.” Tom Friedman

Quote Icon A few days ago I strolled out to my car to find a flat tire. I could see a rather large nail stuck deep in the tread. I got out the air compressor, filled it up and set out to find a local tire shop. Since I’m new in town, I used Maps to find the closest tire shop and raced that way hoping to make it before the air leaked out of my tire again and left me stranded.
A few minutes later I arrived at a tire shop literally called, The Tire Shop. The place was packed and as I dropped off my keys and sat down, I prepared myself for what I expected to be a long wait. About twenty minutes later an employee came up to me and told me my truck was ready. Well, first he offered to buy my truck (a ‘96 Land Cruiser) to which I kindly refused. After a bit of small talk about the popularity of Land Cruisers he handed me my keys. I asked him how much, and he said, “don’t worry about it”. Taken aback by his gesture, I thanked him and drove off.
Since then I’ve told every person that I know, in San Luis Obispo or not, about my experience at The Tire Shop. I can’t think of a better example of how to do business. Pulling out a nail and plugging it with some rubber and glue probably took their experienced employees less than five minutes. It likely cost them less than a few bucks, but what it gained them was a customer for life. Even more than that, a customer who is actively sharing his story and letting others know how great the customer service is at The Tire Shop. Those few dollars spent will likely go many more miles than the thousands they may pay for advertising. Quote Icon Noah Stokes writing at ES BUENO blog