Women have been making news in the business world recently. Check it out:
Women Earn Less Than Men, But Gap Narrows
A Sorority of Three, And Counting
Why Don’t Women Earn As Much As Men?
Why Do Women Leave Engineering? Maybe It’s Their Male Colleagues
This isn’t something I’d normally do, but I really like this interview that Gary Hamel of the WSJ posted with Gore CEO Terri Kelly, so I thought I’d re-post part of it here. W.L. Gore is a company that produces a lot of different things, but the one that I’ve heard of most is Gore-Tex. Their leadership model is a little different. They constrain the size of their offices and don’t have bosses in the sense that we think about them. Instead, they’ve emulated a flat leadership model.
For the full interview, read the original post here.
Gary: To a typical hard-driving manager, the Gore model probably seems utopian, maybe even naïve. You don’t have a hierarchy. Leaders can’t command. Employees choose their own commitments. It sounds like a slacker’s paradise. No wonder the company is consistently ranked as a great place to work. But where does the discipline come from? Most managers view freedom and discipline as mutually exclusive trade-offs, but that’s clearly not the case at Gore. You sell to demanding customers like Nike and Procter & Gamble, and have made money every year since the company was founded. What drives discipline at Gore?
Terri: Some days things are chaotic. I don’t want to paint a picture of something that’s perfect. You have teams coming together, storming and forming and building relationships. But there are some fundamental things that hold Gore together. One is the values to which we all subscribe, in terms of how we’re going to treat each other—there’s a huge trust element in the Gore culture.
One of the more powerful things that creates discipline is that everyone in the organization knows that they will be ranked by their peers, and that their compensation will depend on this ranking. This peer pressure is much more powerful than top-down pressure.
Our associates get to choose what commitments to make. If they didn’t know they’re going to be evaluated by their peers, they might be tempted to take on an assignment that is personally interesting to them, a hobby, but one that’s not important for the company. But instead, every associate is constantly thinking, ‘I want to be viewed as making a big contribution to the enterprise,’ so they’re constantly looking for opportunities that will leverage their strengths, and that they’re passionate about. So there’s a natural, built-in pressure: every associate wants to work on something impactful.
Every associate knows that they won’t be judged by one boss or superior, but by all their peers, by individuals who know what they’ve done and how they interact with others on daily basis.
Typically, an associate will be evaluated by 20 or 30 peers and will, in turn, evaluate 20-30 colleagues. You rank your peers from top to bottom. It’s a forced ranking. You’re asked to rank only people you know. What we find is that there’s typically a lot of consistency in who people view as the top contributors, and who they view as the bottom of the list. We don’t tell our associates what criteria to use, we simply ask them to base their ranking on who’s making the greatest contribution to the success of the enterprise. You don’t evaluate people solely on the basis of what they’re doing within their team, but in terms of the broader impact they may be having across the company. And then beyond their contributions, are they behaving in ways that are collaborative? Are they living the values? Sometimes someone will get great results but at great expense to the organization. These are the issues associates think about when they’re putting together their rankings.
We have a cross-functional committee of individuals with leadership roles who look at all this input, debate it, and then put together an overall ranking, from 1 to 20, of those particular associates. Then, in setting compensation, they ensure there’s a nice slope to the pay curve so that the folks who are making the biggest contributions are also making the most money.
The process is a bit brutal, but it ensures that real talent gets recognized. This system avoids the problem of paying someone more because of seniority or title. New associates joining the organization, the scientists who don’t want to be people leaders—we want these people to feel highly valued, because the next invention may come from them. No system is perfect, but ours levels the playing field and allows real talent to emerge and get compensated accordingly.
We don’t need a bureaucratic system to hold people accountable. We don’t need time cards, because we don’t care when the person comes or leaves—we just care about their contribution. So you can deconstruct a lot of the typical bureaucratic processes that are typically used to measure and control performance. We’ve also found that by not having hard and fast metrics of performance we can avoid a lot of unintended consequences. You get a lot of negative behavior when you have narrow metrics that really don’t represent the complexity of the business. Instead, we ask our associates to view performance holistically, in terms of someone’s total impact, versus focusing on a few specific variables.
Gary: Gore is more than 50 years old and has been the subject of many case studies. Why hasn’t this management model taken root in other companies? Why hasn’t it been emulated more broadly?
Terri: First, I should say that we’re still evolving. We haven’t figured it all out. But what I’d tell another CEO is this. You have to look at the values that are embedded in your company: what behaviors have been rewarded and reinforced over the decades? Is it a culture that really believes in and encourages individuals? Does it foster a collaborative spirit? Does it encourage knowledge sharing? You have to tackle this first. One of the biggest mistakes an organization can make is to articulate all these great values but then not live up to them—then people get cynical, because the values are out of synch with what they experience every day from their leaders.
Second, you have to evaluate your leadership model. It’s incredibly important to look at the motivation of your leaders, how they’re rewarded, what they value. If you don’t tackle this, you’ll be in trouble. Our model requires leaders to look at their roles differently. They’re not commanders; they’re not lynchpins. Their job is to make the rest of the organization successful. They have to give up power and control to allow this chaotic process to happen—so you get diverse perspectives and teams coming together to make decisions.
Third, you have to be clear about the checks and balances. At Gore, it’s the peer review process, but it might be something else in another organization. What is it that will reward and reinforce the values on an ongoing basis? This needs to be embedded in your management practices. This is the sequence I would follow if I were trying to foster Gore’s culture in another organization.
Gary: In the past, someone might have looked at the Gore model and said, “well, that’s interesting, but it’s not essential—there are other ways to manage.” But when I think about the core elements of your model—a collaborative decision-making process, an organization where leaders aren’t appointed but emerge from below, associates that have the knowledge and authority to make the critical real-time trade-offs—it seems to me that these things are becoming competitive imperatives.
Terri: If you think about changing demographics, our young associates expect these things. They expect to have the chance to make an impact. They expect to know why they’re working on something. They expect to work in a collaborative network where information is freely shared. If an organization doesn’t have these things, my suspicion is that it won’t be able to compete. You won’t be able to attract the talent, and you certainly won’t be able to retain it. This is what it’s all about—getting the best brains together.
Photo: Chamber Action Network
Image courtesy of babble.com
A post by one of my favorite blogs, The Kitchn, informed me that scientists at Princeton have discovered that (hold your breath hear) high fructose corn syrup is bad for you. This is based on testing on rats.
While I try to cook at home when I can and use local ingredients, I’m not against eating a few Oreos if I’m craving them. I also will eat take-out pizza and other assorted foods that I’m sure contain high fructose corn syrup, even if I don’t check the labels.
The study says that rats who consumed high fructose corn syrup gained more weight, even though they consumed the same amount of calories as those who didn’t consume the syrup.
What concerns me about this assumption is that it’s on rats. We don’t allow humans to use medication only tested on rats for a reason, our biological systems work differently. That’s why we’re not rats.
The St. Louis Post-Dispatch ran a story about how reaching the key young people demographic means that the company has higher stock prices. All of the companies quoted in the piece are companies that I would love to buy, but I’ve cut out of my budget because they are just that expensive. They use Urban Outfitters, Apple and J. Crew.
I heard a quote the other day that said that Apple has the largest market share of laptops over $1,000. I questioned how many other people made laptops over $1,000. Because while I do own a Mac, most of the people on my sizable campus are using cheaper laptops that cost less than half of what mine did.
I know more than one person who was surprised when a girl was buying a shirt from J. Crew every month. Personally, I understand the value of reaching my age demographic has for companies, but I wonder at the fiscal responsibility of my generation if we continue to buy clothes and toys that are this expensive. Because who can afford multiple shirts that cost over $100? I sure can’t.
Tagged Apple, J. Crew, St. Louis Post-Dispatch, Urban Outfitters
I was referred to this website the other day: http://www.bundle.com/. The idea is fascinating, but not new. What are your thoughts on these websites? Are they helpful?
Posted in Finances
By now, many people are aware of the food movement: going back to our roots, forget the additives, etc. It’s led by people like Michael Pollan and Michelle Obama. So I found it interesting when I read this blog post by the Freakonomics blog by the NYT that says that this sort of movement has happened before, and we are greatly idealizing the past that we’re trying to return to. It reminds me slightly of the hydrogenated corn syrup ad that’s playing all over the place right now, in that it’s almost going to the other extreme.
Personally, I was raised by a dad who worked as a sales rep for Monsanto for fourteen years. Before that, he owned a farm with his brother. When he hears anyone start talking about how organics are going to be the future or anything like that, he almost has to leave the room in order to not make anyone mad. And he has a point: if we grow organic, we can’t grow enough food to feed everyone. It’s the same argument as ethenal, we can’t raise that much corn without forcing people out of their homes.
Me, I think the answers somewhere in the middle. I do have a problem consuming something like a Twinkie that just has no resemblance to anything remotely close to an actual food, but I’m also eating a bag of popcorn manufactured by ConAgra at this very moment, which I’m sure has something manufactured in it. I’m proud that my country produces food that gets sent all over the world, but I prefer to buy local. I’m ok with eating genetically modified food, and if compost is used as part of the growing process, even better.
What’s your food philosophy?
There’s a MarketWatch story about how a small number of people with perfectly good credit are choosing to skip paying the mortgage to pay down their credit card. That sounds terrifying to me. Granted, the only way I know anything about this is watching Dave Ramsey a couple of times, but from what I understand, credit card collectors, while the more annoying of the two, break so many laws that as long as you can catch them, you can negotiate away a lot of debt. Also, the idea of being without a home is a lot harder to fathom than having less credit.
One reason given in the story is that people are worried about losing their jobs and anticipating needing the credit. Then, I think you should be focusing on saving more than paying the credit card, and maybe finding a different job. It’s a complicated thing, but I’m not sure that placing your house in jeopardy is the best answer.
After the CARD Act went into affect on Monday, Feb. 22, I had a feeling that was all we would be hearing about credit card legislation for awhile because it was some pretty sweeping reforms. Making it harder to raise interest rates, give cards to people under the age of 21 and making it easier to see just how long it will take to pay off a particular credit card were some of the larger changes, as I reported for Vox Magazine.
I was wrong. I came across this post on the NYT’s money blog, Buck, today. It’s saying that the Fed is considering limiting the types and amounts of fees that credit cards can charge. This was the biggest loophole left in the CARD Act that just about every news organization discussed. I’m kind of excited about it. While loopholes will probably remain, it does make protect the consumer a little bit better than before, which I think is always the goal of reform.
And while we’re worrying about reform, the status of the Consumer Protection Agency is a little up in the air right now. But to lobby for the people is an unlikely source: the website Funny or Die. Basically, the last five or so presidents, played by actors more frequently associated with SNL, come back to Obama in a dream and tell him to clean up their mess. Check it out!
Tagged CARD Act, credit cards, Federal Reserve, New York Times
I saw this quote in a Bloomberg article and just had to share: “It is a less-sexy business,” said David A. Hendler, senior financial services analyst at CreditSights Inc., who sees banks losing their image as a growth industry on Wall Street. “The master-of-the-universe action-figure banker is now a relic on EBay.”
I don’t believe I’ve read anything truer during the recession. My dad works as a financial advisor and I know there’s a lot more stress in his life than there used to be. His bank was bought and the new owners have instituted changes that makes him wonder about job stability and has severely affected his pay. He talks about the mortgage brokes who used to work longer hours than anyone else in the bank and now they work the least amount of hours.
I recently had to order new checks through my bank and I thought they were free. Instead, I ended up paying about $7. While the amount isn’t that large, I think its significant. Banks are looking for new ways to find revenue, much like credit card companies are.
No matter what, I’m glad I’m not a banker right now.
I came across this NYT’s article about a possible national tax on soda. I find it interesting that they are comparing soda to cigarettes and kind of got me thinking about my own soda-drinking habits and how they would compare to levels of cigarette smoking.
If soda-drinking were cigarette smoking, I think I would be a light drinker. I drink soda about once a week, maybe a little more during stress-filled weeks. Although I haven’t had one during these last two weeks, which have certainly pushed my limits. Definitely more if I’m drinking because I don’t like beer.
It also reminds me of the new ads running defending high-fructose corn syrup.
So then, if they start taxing my weak amount of soda drinking, will they start taxing everything with corn syrup in it? Because I’m not sure I’ll be able to afford to eat if they do.
The foodie movement is complicating life.
Tagged cigarettes, corn syrup, New York Times, soda, taxing
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