Saturday Serendipity
Quote, Culture, Interesting find.
Hi.
Reading time: About 11 minutes
Quote
“What happens in ordinary moments determines your future.”
― Shane Parrish, Clear Thinking
Culture
These are my notes from a wonderful lecture taken by Peter Kaufman in Columbia. I was not lucky enough to attend it but lucky enough to read the transcript. You can find it here.
How important is culture for a business? Is it the most important, should your focus be on creating a unique culture or building the best product? Both go hand in hand.
“Culture eats strategy for lunch.”- Peter Drucker
“What the pupil must learn, if he learns anything at all is that the world will do most of the work for you, provided you cooperate with it by identifying how it really works and aligning with these realities. If we do not let the world teach us, it teaches us a lesson.” - Joseph Tussman
Such a simple idea right. Understand how the world works and try and make sure you see the world the way it is and not the way you want it to be. Once you know how the world works you simply have to align yourself with reality.
At Glenair there is a saying,
“Where there is mystery there is margin.”
This is their way of saying if we want to be successful we have to explore the unexplored or do something which others are overlooking. According to them culture is an underrated aspect of day to day business. They make that their priority.
“When you do as everyone else does, don’t be surprised when you get what everyone else gets.”- Peter Kaufman
Simple yet not common. Human nature actually prevents us from doing things differently. But our brains are also wired in a very different manner. We want the outcome to be a lot greater than the effort we put in. For instance, I would study as much as everyone in the exams and expect to get an A because apparently I have a high IQ. Average effort most often relates to average results.
There is just something about expectations and the mentality of ‘I am different’ which causes us to have a huge bias in our thinking.
So what are we looking to do different in terms of business? We want to exploit the simple reality that ‘Culture’ matters.
"The 3 best operating companies I'm aware of are Costco, Kiewit and Glenair There is nothing remarkable about the product or field for any of these three But there is something remarkable about the cultures of all three" -Charlie Munger
These business have a tendency to do simple things which are ignored.
“Most geniuses — especially those who lead others — prosper not by deconstructing intricate complexities but by exploiting unrecognised simplicities.”- Andy Benoit.
To follow are the cultural values that are honoured by GlenAir.
We honour the priceless opportunity of ‘Leaping Emergent Effects’
‘Leaping Emergent Effects’ are similar to the mental model of alloys. A lot of things which when added together add up to a sum greater than it’s individual value.
For any team I think this mental model is very important. For a business the entire workforce has to be happy and motivated so that they can work better.
Jim Sinegal, former Costco CEO said,
“Our attitude has always been that if hire good people and provide good wages and good jobs and more than that— if you provide careers — that good things will happen to your company.”
We honour that the Most Important ingredient in Any Culture is ‘Trust’
The most important thing when it comes to building long lasting relationships is trust. We are indifferent to dogs and animals who take around a week or so to trust us completely. Only difference is dogs trust people in a week and to build trust for humans takes around 6 months.
When you have to build trust instead of focusing on the other person the focus should also be on ourselves. Because,
“A great relationship is not just finding the right partner, it’s being the right partner yourself. “ Anson Derrance.
Humans only build trust when there is a connection both ways. If one party does not commit to building trust it becomes evident to the other one as well and that causes problems. So the first thing is to create an environment where trust can be built.
The Human DNA cannot help but seek leaders. We desperately look for the right leaders who can guide us through tough tides and also a leader who we can trust. It’s in our DNA.
We have to be very aware of how everyone actually feels. Because humans have a skill of hiding their deepest/core beliefs the same way an iceberg which looks relatively big over water but is actually massive underwater.
Trust is the most important thing. Everything else comes after.
We Honour that Good leaders and their Teams are ‘All-in’
This is another very important trait for a team which functions well to have. You need to have commitment and ownership in what you are doing. If you simply go out and take no responsibility for your work your team is going to end up nowhere.
“Show me an organisation in which employees take full ownership, and I will show you one that beats it’s competitors.” Michael Abrashoff
The individual qualities of ‘trust’, being ‘all-in’ are very important for a leaping emergent effect to work.
We honour that good leaders see through the eyes of their groups
This is about perspective and the mental model of relativity.
A leader who truly understands the way that the people who work under him sees the world through their lens as well. Peter Kaufman had a wonderful experience when he slogged his ass off working in the summer and the person who he was working with ‘Gabriel’ was a struggling mexican. He worked with him the entire summer learning mexican slang and also got a little bit better at speaking the language. He thought what is the use of this?
Well it turned out years later at GlenAir most of the workers were like ‘Gabriel’. He could connect with the people working there as he already knew the slang and could communicate effectively. He knew their struggles as well.
“The most important thing a skipper can have is the ability to see through the eyes of the crew.” - Michael Abrashoff.
“If you could see the world the way I see it you’d understand why I behave the way I do.”
We Honour that only the Win/Win is Sustainable
“If you want to go quickly go alone. If you want to go far go together.”- African Proverb
“When someone isn’t winning sooner or later the jig is up.”- Kaufman
The aim of a business is to be winning not for a short period but for a very long period. To achieve long lasting greatness you cannot build relationships where one party will lose.
Out of the 4 kinds of relationships:
Win'/Win
Win/Lose
Lose/Win
Lose/Lose
Only the 1st one is going to allow you to build a business which is going to succeed in the long term.
If any of the parties lose then maybe they will tolerate it for a while or withstand it but eventually they will end up realising it is a losers game for them.
We Honour that Reciprocation is how the World Works
This is based on the mental model of ‘reciprocity’. This works on a very simple idea of getting what you give.
Give out trust to people and you will get trust back.
“There is a wonderful, almost mystical law of nature that says three of the things we want most- happiness, freedom and peace of mind— are attained when we give them to others. Give it away to take it back.” John Wooden.
We Honour that Incentives matter, and must be aligned with Human Nature
Without incentives a system won’t work. In a way it is as important as ‘culture’. There are six things to check for in an incentive system:
a) Simple: Is the plan easy to understand? Can they explain what it is?
b)Significant: To put it simply; is the outcome big enough to give a damn.
c) Timely: Make sure the reward is not too far down the line. It should be somewhat constant and short term. The push that comes for a marathon runner when he sees the finish line is the push you want.
d)Certain: The plan you make has to be certain.
e) Certain (B): The plan that you make has to be fool proof. There should be no room for malpractice.
f) Territoriality: Make sure that there is no mentality of individuality. Whenever there is a loss the entire group loses and vice versa.
“We pay much better than Wal-Mart. That’s not altruism. It’s good business.”- Jim Sinegal
We Honour that Good leaders are Engaged
As a leader you want a feedback loop so that you can constantly keep improving. It’s how a parent learns from the baby and how the baby learns from the parent. Both become better.
David Packard spent most of his time going to the factory to check if everything is fine in the factory and the step by step process is working. This is the best way get an idea of how the situation on the ground is. (Founder of HP)
Jim Sinegal used to pick up calls of customer complaints.
he said,
“ If a customer’s calling and they have a gripe, don’t you think they kind of enjoy the fact that I picked up the phone and talked to them?”
We Honour that Good Leaders are a Blend of Characteristics
A good leader is like an ‘alloy’. There are traits which individually don’t make a lot of impact but if you combine them you get a good leader who people want to follow and listen to.
A good leader is one who is tough but at the same time has a heart.
We honour that the ‘Bottom Of the Organisation’ is an often overlooked resource
“We have guys who pushed shopping carts out in the parking lot for us who are now vice presidents.” - Jim Sinegal
The bottom half of the organisation can create tons of value for the business. It is a sleeping giant waiting to be awakened.
We Honour that Good leaders encourage and embrace change
Charles darwin noted that the species which is most responsive to change is the species which going to survive the longest.
Human nature prevents us to change. The mental model of inertia kicks in. We don’t like change but the ones who accept the world for what it really is can accept it and this in turn is an advantage for them.
“In a time of drastic change it is the learners who inherit the future. The learned usually find themselves equipped to live in a world that no longer exists.” Eric Hoffer
If the world changes quicker than you change then you are in trouble.
External Rate of change> Internal rate of change = trouble
“You have nothing to fear as long as change is conducted with equal to or greater thoughtfulness as was put in the original work in the first place.” - Kaufman
We Honour that Fresh Set of Eyes are an Invaluable asset
“Wisdom flows into the humble man like water flows into depression”
Many times the solution is in front of us but we are too overloaded with information to see it properly. Sometimes a fresh set of eyes can figure out the obvious.
We Honour that Good Leaders are Generous in Sharing Recognition
Good leaders don’t think about themselves they think about the team. They don’t think about ‘I’ they think about ‘WE’ that is why many times you will notice that the great leaders say we.
“The leaders who work most effectively, it seems to me, never say “I.” And that’s not because they have trained themselves not to say “I.” They don’t think “I.” They think “we”; they think “team.” They understand their job to be to make the team function. They accept responsibility and don’t sidestep it, but “we” gets the credit. This is what creates trust, what enables you to get the task done.” - Peter Drucker
We Honour that Good Leaders “Never Say Anything Unless they Really Mean it”
“If you’re going say to all the people that you’re working with , “ We want you to treat the customers honestly; don’t lie and don’t cheat ,” it is somewhat hypocritical if you’re not following the same rules.” - Jim Sinegal
It is simple really as a leader if you want people to believe in you, you have to practice what you preach.
To sum it up this is the checklist to check for culture at GleanAir:
Emergent effects
Trust
All in
Perspective of others
Win/Win
Reciprocity
Incentives
Leader is constantly engaged
Has a blend of characteristics
Bottom is overlooked
Embracing change
Fresh set of eyes
Share recognition
Practice what you preach
I find this post as a great way to learn about culture of businesses but also as an amazing way to learn how to become a better leader and understanding how the world is built on a lot of these relationships and how they create amazing outcomes.
Interesting find
That’s it,
Thank you for reading,
Samvit.