Management In Real Life

Tips from the Top
by: Kevin Herring



Periodically, Inc Magazine gives us a run-down on best-run small companies. If you want to learn how to breathe new life into your organization or break out of the pack, this is a great place to get ideas. I'm going to share a few of my favorites, so you might want to pull up a chair and take some notes.


A CULTURE OF SHARED PURPOSE

This one is close to my heart. When I was a teenager, my brother and I spent a few weeks each summer traveling west playing mountain climbers. When I turned 16, I met the world's best climbers, Royal Robbins and Yvon Chouinard, who immediately sprung to the top of my hero list. Yvon Chouinard was particularly famous for Gumby-ing his way up mountains by reaching toe holds with his feet at ear level. He's also the one who gets credit for creating hexes and stoppers—low impact alternatives to pitons that climbers pounded into the rock and left behind. That innovation became a breakthrough for Chouinard Equipment.

Chouinard still climbs, and I wonder if he can still do the Gumby thing. But he also runs Patagonia, the outdoor clothing company he founded. What's special at Patagonia is that Chouinard treats everyone there as an equal. Executives get no special parking spaces or free meals at the cafeteria. Employees have open access to information about the company and how it's performing. Workplace relationships at Patagonia are built around expectations and shared commitments more like you would experience with family and friends instead of what you might anticipate from a typical workplace where bosses hold underlings accountable.

The result is Chouinard has been able to create an organization with strong inter-personal relationships and a shared sense of accountability consistent with his commitment to making sure those he works with are friends to him and each other. As a group of friends, they've managed to create a really successful customer-centric business that's been around for decades.


BUILDING CAPABILITY AND CONTRIBUTION THROUGH KNOWLEDGE

Unlike Patagonia, I don't have a personal connection with the founder of Dealer.com, an online marketing services business. But I like Dealer.com because they understand that when you expand employee capabilities, you get better individual and group performance. Employees at Dealer.com can get online technical training from the company's training system whenever they want it, a great way to expand cross-skilling. Cross-skilling is powerful for a couple of reasons. Think about it, if you never took lessons and tried to learn how to play a musical instrument, you wouldn't appreciate as much what it takes for people to get really good at it. Likewise, cross-skilled employees have a greater understanding and appreciation for what's required in other positions to make the customer happy and help the business make money. They can also jump in and help out when other employees are exceptionally busy or miss work.

I especially like the fact that leaders at Dealer.com want employees to understand the business of the business and don't select participants for business training based on job title. As long as the employee is a high performer he or she can take a full year of MBA-like courses designed by the company and taught by local professors—a smart arrangement with local resources and a great way to turn employees into business experts.

Ginger Bay salons also "gets it" when it comes to education. They want to hold on to their employees and develop them so they can contribute to the business long term. So they pair more experienced employees with juniors to teach them the ropes. They teach employees finances as well as the ins-and-outs of the business. Trained employees can know enough to fully run a salon whether or not that's where their career goals take them. "Every employee a manager" seems like a great idea. Employees that know the business know what it takes to stay in business. They have more reasons than the average Joe or Sally in the business down the street to work hard to attract business, generate sales, and satisfy customers. That's probably why Ginger Bay is one of the premiere salons in the country and the one I'll pick if I ever get an urge to perm my hair.


TRANSPARENCY

Transparency is a big one for me. In my experience, it's the most powerful influence on employee engagement, but the toughest to put into practice. However, Bill Witherspoon has it figured out. He owns The Sky Factory located close to my early beginnings in California. Bill's unique style includes leading by sharing all information—everything—and insisting that all decisions be made as a group. All employees are developed to be financially literate so that they can participate in weekly discussions about the metrics and how to manage output, and to steer the business by consensus.

The Sky Factory has no titles, managers, or bosses of any kind. Witherspoon depends on everyone to act as Sky Factory leaders and business people pitching in and constantly looking for ways to improve the business. He makes sure everyone knows everything that's going on and that there are no secrets. Witherspoon believes that if everyone knows everything, there's not much to talk about when an idea is presented and a decision needs to be made. By making everyone knowledgeable, employees act like owners and decisions are made very quickly.


ENTREPRENEURSHIP

Finally, we have Maya Design, a product development company, and Tasty Catering, a corporate catering business. If you secretly want to be an entrepreneur, these may be the places for you. They both encourage and support staff starting new businesses as extensions of the core business or complete spinoffs the employee might decide to run. The companies may even fund ideas and help get the new business started. For this to work, employees are obviously being trained to be business people capable of running the whole business. They are also being taught to think like people who are responsible for the whole outcome—a pretty sound practice whether or not the person is running the whole show.

Which practice do I think gives the greatest boost to performance? There are a lot of great practices contributing to the results these businesses achieve. Of all, wiping out hierarchies and creating strong communities of employees who share accountability for group success have to be close to the top of the list. The Sky Factory certainly is one company name that could become the trademark term for it. When you have a company where nobody that works there has a job, but they all have a business, you've got a team that's in it for the big picture. No stove piped departments, no narrow job descriptions, no status and privilege, and as an employee no performance reviews and no boss to deal with. How much better can it get?

Every business on the best-run companies list is in some way using unconventional management practices to engage people at work and getting great results. Like The Sky Factory, the companies I highlighted here have pushed even further past convention to incite our "wow" reactions.  All of them can teach us a thing or two about what it takes to re-tool our management practices to become a best-run company.

TRYING IT ON FOR FIT:
Many of the practices described here are fairly unconventional. Explore and analyze them for how they contribute to the success of the business that employs them. Try to determine why they might work better than the more conventional practices they replaced. Evaluate the risks of trying the less conventional practices. Try to figure out why you aren't currently employing them and what you would have to do to try them out in your company or department.


Kevin Herring
kevinh@ascentmgt.com

Kevin Herring is co-author of 'Practical Guide for Internal Consultants', and President of Ascent Management Consulting, Ltd., a firm specializing in performance turnarounds of work groups and business units.
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