The Value of Corporate Myth

As the Ojai Storytelling Festival approaches, here is a borrowed post from Kinko’s founder Paul Orfalea. Because of his dyslexia, Paul respects the oral tradition more than many executives, and never missed opportunities to swap stories with his coworkers.

The Value of Corporate Myth

Companies often rely on a handful of stories to define their culture. And those tales often grow like fishing stories. Kinko’s lore about the first shop, which was so small we had to wheel the copier onto the sidewalk to do business, provides a good example. Every time I overheard the story while traveling, the shop got a little smaller, and I expected to hear one day that I opened the first Kinko’s in a refrigerator box and had to produce my own electricity with a hand-cranked generator.

I’ve heard lots of stories about the company that bear little resemblance to the events I recall.  But if true stories evolved into myth over time, they did so to better communicate the culture’s core values. Like any other society, a company retells certain stories to indoctrinate new members in the values of the culture.

Kinko’s had creation myths, like the one mentioned above. We had hero myths, which included the story of store manager Frank Perez taking a very public stand against corporate mandates. We had sacred place myths, wherein executives bragged about their time spent in “the field.” And we had our flood myth, about recreating the business after a copyright lawsuit halted production of our primary product.

The creation myth expressed our belief in entrepreneurialism, the hero myth our support of free speech, the field stories our veneration of the frontline coworker, and the flood myth our adaptability and openness to new ideas.  The stories provided a common language for discussing these issues. Naturally, a company that promotes from within has an easier time holding onto its stories, but also risks becoming insular and arrogant. We need new stories, but it’s a delicate task to weave them into an existing culture.

Mergers and other business takeovers don’t always fail, but often fail to live up to their potential. New leaders have their own stories to share, or, lacking that, generic stories from popular business books. If the conjoined organizations’ stories do not express complementary values, the combined entity produces friction rather than synergy.

It’s one thing to buy a failing business and turn it around; in those cases one hopes to replace an inferior culture with a superior one. But when one buys a successful business, how do we avoid turning it around? Warren Buffett believes in a hands-off approach – he buys successful companies and stays out of their way.

At the very least, I think a successful merger or transfer of power requires a lot more anthropology and a lot less imperialism. We need to hear coworkers’ stories to understand their personal, often un-articulated values, because their values drive the application of their talents. And those individual talents drive the company.

Kinko’s founder and philanthropist Paul Orfalea is the author of Two Billion Dollars In Nickels: Reflections on the Entrepreneurial Life.

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Change the World by Changing the Workplace

Ironically, if you want to hit people where they live, you need to hit them where they work. For better or worse, work dominates much of our time and identity. I believe the first step to a more democratic world is a more democratic workplace.

While writing E Pluribus Kinko’s: A Story of Business, Democracy, and Freaky Smart People, I found Traci Fenton’s website. Her work reassured me that the democratic principles responsible for Kinko’s success were not a fluke. Recently, I met Traci, and instantly recognized her as a kindred spirit – one who believes that the most direct route to improving society is to improve the workplace.

As true believers in the democratic principle of self-governance, Traci and I had a spirited conversation about workplace freedom as the key to greater coworker engagement, creativity and initiative. Traci and her team have spent thirteen years analyzing organizational democracy, and I’d like to bear witness to the power of the “10 Principles of Organizational Democracy” they have identified.

1.  Purpose and Vision: A democratic organization is clear about why it exists (its purpose), and where it is headed and what it hopes to achieve (its vision). These act as its True North, offering guidance and discipline to the organization’s direction.

As I describe in E Pluribus Kinko’s, the company Philosophy served as a touchstone for our purpose and vision. Whenever we faced a tough decision, we could turn to the philosophy for guidance – literally, since it hung in every office and store.

2. Transparency: Say goodbye to the “secret society” mentality. Democratic organizations are transparent and open with employees about the financial health, strategy, and agenda of the organization.

Many insecure managers derive their power from mystery. By giving their coworkers the mushroom treatment (keep them in the dark and feed them S#!%), such managers become a barrier between the organization and its workers’ talents. But people cannot solve problems if they don’t know what’s going on. At Kinko’s, widespread profit sharing worked as an incentive because we shared and discussed P&L details with the coworkers. Coworkers practice frugality when they clearly see how every expense affects their personal income.

3. Dialogue + Listening: Instead of the top-down monologue or dysfunctional silence that characterizes most workplaces, democratic organizations are committed to having conversations that bring out new levels of meaning and connection.

Along with the Philosophy and Partnership Ethos, I highlight Pot-Stirring as a key success factor for Kinko’s. Founder Paul Orfalea loved to stay out in the field talking with coworkers, and his partners and their teams followed his example. One-on-one or in groups, we discussed and debated everything from domestic partner benefits to holiday hours to whether we should open stores in China. We didn’t always agree, and individuals didn’t always get their way, but everyone had a voice in the organization. As a result, people got in the habit of speaking up and offering ideas.

4. Fairness + Dignity: Democratic organizations are committed to fairness and dignity, not treating some people like “somebodies” and other people like “nobodies.”

Many organizations struggle here because the leaders do not fully understand every coworker’s contribution, while coworkers often confuse “fair” with “equal.” The key to fairness and dignity is rigorous hiring and development, based on a clear understanding of how each person adds value to the organization. If you would like to read a great book about leaders who understood fairness and dignity, get The HP Way, by David Packard.

5. Accountability: Democratic organizations point fingers, not in a blaming way but in a liberating way. They are crystal clear about who is accountable to whom and for what.

You cannot learn from mistakes if you cannot admit having made any. And you cannot innovate unless you are willing to make mistakes along the way. Thus, accountability works with a partner: forgiveness. Both depend on unambiguous language. Clear delineation of goals, strategies and tactics helps every coworker understand his or her responsibilities. We must also distinguish error from misbehavior, and remember that what we tolerate, we encourage. To hold people accountable is to aid their own development and to advance the organization’s goals and culture.

6.  Individual + Collective: In democratic organizations, the individual is just as important as the whole, meaning employees are valued for their individual contribution as well as for what they do to help achieve the collective goals of the organization.

One of the great paradoxes of the Kinko’s Philosophy was expressed in the line, “We value creativity, productivity and loyalty, and we encourage independent thinking and teamwork.” Such a commitment requires strong leaders, capable of walking the tightrope between the apparently conflicting ideas of creativity and productivity. There is no formula – just the constant refinement of judgment.

7.  Choice: Democratic organizations thrive on giving employees meaningful choices.

Democracy is self-governance. Kinko’s founder Paul Orfalea explained that as the company’s majority owner, he could have mandated anything. But once you do that, he said, “you demoralize your coworkers and then you have to dictate everything.” Instead, we tried to offer alternatives and let the people decide.

8.  Integrity: Integrity is the name of the game, and democratic companies have a lot of it. They understand that freedom takes discipline and also doing what is morally and ethically right.

Legendary investor and presidential advisor Bernard Baruch said that our only real freedom is the freedom to discipline ourselves. Integrating one’s public and private life requires the discipline to live every moment in accordance with our values. I believe this is the linchpin for improving society by improving the workplace, because the workplace now fulfills a role abandoned by our schools: it teaches citizenship, for better or worse.

9.  Decentralization: Democratic organizations make sure power is appropriately shared and distributed among people throughout the organization.

Study after study confirms what we experienced at Kinko’s in the 1980s and early 1990s: the best customer service happens when decision-making authority rests at the point of action. Ego is the enemy. Trust unleashes the talent of our coworkers.

10. Reflection + Evaluation: Democratic organizations are committed to continuous feedback and development and are willing to learn from the past and apply lessons to improve the future.

Reflection and evaluation require that we value candor. At Kinko’s, we worked very hard to collect feedback from our customers and coworkers on a daily basis. Executives spent 50% or more of our time in stores. We called hundreds of customers every week to interview them about their in-store experience. We collected thousands of comment cards every month, and we read every single one.

Traci Fenton and WorldBlu have done a great job identifying and codifying the principles, traits, and challenges of democratic organizations. My own experience of workplaces – democratic, monarchical, or tyrannical – assure me of the truth of Fenton’s findings. If we believe in self-governance, if we believe in bringing democracy to the world, we must first bring democracy to the workplace. To learn how, visit www.worldblu.com.

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Muggles In The Workplace

Even though I cannot get Jon Stewart or Stephen Colbert to look at my book, much less invite me to appear on their shows, I do spend a fair amount of time talking to them while on long drives.

During one of my Walter Mitty episodes on the 405 freeway, I was explaining to Jon Stewart that democracy does not turn companies into Utopias; rather, it increases coworker engagement, creativity and initiative, making workplaces more innovative and productive, but also more contentious.

I attempted to explain that a company’s workers, like any sizable population, create a bell curve pattern with a small number of heroes at one end, a small number of assholes at the other, and a large number of…. Hmmm. I found myself at a loss for the right word to describe the vast majority of coworkers who, although competent and diligent, lack the comfort with conflict so visible in great leaders and great assholes. And it’s important to acknowledge that the workplace is rife with assholes – a democratic company culture does not eliminate them, although it does much to mitigate their dark powers.

Suddenly, the word popped into my head: Muggles. Fans of Harry Potter know the term and its definition: “Non-magical folk.” What a perfect description for those who do most of the work, but do so through ordinary means and daily effort. The problem is, most company cultures do not respect muggles, referring to them as “worker bees” or “staff” or, ugh, “employees.” CEOs and VPs may get the magazine interviews, but executive assistants, product managers, data entry people, frontline cashiers and a host of others run the company.

In an earlier post, I wrote about the HR executive that tried to talk to Kinko’s Northwest managers about working with muggles, only to learn that the managers refused to accept the idea that non-magical folk belonged in the company.

In retrospect, I realize that the managers’ belief was merely an illusion. It’s not that the average Kinko’s coworker was inherently more talented and ambitious than coworkers elsewhere. The trick was that Kinko’s democratic culture allowed coworkers to be themselves, and the resulting engagement, creativity and initiative simply looked like magic.

Of course, if I ever do an interview on The Daily Show or The Colbert Report, they’ll probably just want to know if it’s true that executives traveling together used to chug Big Gulps and bet on who could go the longest without peeing. Well, at least that would mean they read part of the book.

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Don’t Raise the Bar; Find People Who Jump for Love of the Sky

Our guest speaker from the HR department made a tactical error one December evening in 1988: she thought she was asking a rhetorical question.

“Isn’t there a place for mediocre coworkers in a large organization?”

“NO!” we roared in unison. She was visibly shaken, and never quite got her talk going again. I think her point was that an organization must recognize the diversity of its workers’ abilities and make sure each is in the correct position, but this was not a group inclined to sit still long enough for nuance. These were Kinko’s Managers.

In a profit-sharing environment, the distaste for mediocrity is constant and organic. Each coworker’s ability impacts every coworker’s income, so the teams become highly self-selective. By definition, there is still “mediocrity” in any group, but the culture of a healthy self-governed organization naturally raises the median.

In such organizations, people don’t talk about raising the bar. They jump for the love of the sky.

You can learn about Kinko’s democracy in my book. Learn how to build the democratic organization of tomorrow at WorldBlu.com.

 

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Delegation Versus Abdication

I’ve long preached the three Ds of paperwork: as soon as something comes in; do it, delegate it, or ditch it. Otherwise, your creativity wilts under the shadow of a towering in-box.

The second D trips up a lot of new managers.

Inexperienced managers believe that delegating a task removes it from their plate, but inadequate oversight will get you and your coworkers into a lot of trouble. Ask effective managers why they are so attentive to benchmarks and objectives, and you will hear about the time they weren’t.

Effective managers, regardless of their politics, embrace Ronald Reagan’s philosophy of “Trust, but verify.” The management version goes like this: “Inspect what you expect.” That’s because you can delegate tasks, but you cannot delegate responsibility. If you hand off an assignment and then turn your back on the coworker until the due date, you’re taking unnecessary risks with the project and your career.

We delegate tasks not only to accomplish more than we might achieve on our own, but also to develop our coworkers’ skills and experience. You might throw someone in the pool to teach him to swim, but you don’t walk away and let him drown, right?  That would turn out badly for both of you. And you don’t teach him to swim by swimming for him, either.

To keep projects on track without micromanaging, I ask frequent questions about the goals of the project and let the coworker educate me about the choice of strategy and tactics to reach those goals. Coworkers don’t mind a strict follow-up regimen when it’s clear that the manager respects their creativity and wants them to succeed. Without such a regimen, the manager abdicates his title.

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The Best Job You Ever Had

One inspiration for writing E Pluribus Kinko’s was the fact that hundreds of former coworkers told me that Kinko’s was the best job they ever had. Some qualified the sentiment by saying it was the best job they ever had until they started their own business. For many, the experience at Kinko’s ranked so highly because it was like owning their own business.

I’ve since developed the habit of asking people what their best job was, and the recurring theme, although often expressed in different words, is respect.

They say, “the people” or, “independence,” but ultimately they describe a culture of respect, where people listen to, debate with, and trust one another. In a respectful environment, skeptics are welcome, but cynics are shunned. The organization values candor, and appreciates people for their unique strengths. In respectful cultures, coworkers ask a lot of questions – you can’t have a productive conversation if everyone begins with conclusions.

Think about the best job you ever had. Think about the worst job you ever had. Did you feel respected at the former and disrespected at the latter?

Respect is a tricky subject in our society, because baby-boomers and their children have worked hard to diminish the concept. Coming out of the repression of the 1950s, young Americans strove to think for themselves and avoid unwarranted influence from the biases of others. Unfortunately, by the late 1960s, that idea morphed into, “Do what you want and don’t listen to anybody else.” We’ve become increasingly inconsiderate and disrespectful ever since.

But the workplace is a wholly artificial environment, with a culture created and nurtured (intentionally or not) by the leadership. We can build cultures that value respect, even if our society does not. Look around your current workplace and ask the question: Do we value respect? If so, how do we show it? If not, how can we build a more respectful culture? How can we make this the best job our coworkers ever had?

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Strong Leaders Choose Choice

Knee-jerk critics of organizational democracy typically misrepresent a self-governed workplace as some sort of directionless commune. Yet, as I point out in E Pluribus Kinko’s, strong leadership is a key prerequisite for the kind of democracy we encouraged. We wanted everyone to have a voice, but we also needed to get things done. There is nothing Utopian about workplace democracy. Sometimes you get your way, and often you don’t.

Several of our leaders behaved like benevolent dictators, and some were less than benevolent, but the partnership structure and company philosophy kept a lot of choices in the coworkers’ hands. This included the choice of free agency – the ability to move between partnerships to find a better fit for one’s sensibilities. Our leaders, whatever their personal idiosyncrasies, chose to work within a structure that limited their power. We didn’t vote on everything, but we sure debated everything. We needed strong leadership to ensure debate didn’t turn into analysis paralysis.

Addressing students of the Loyola Marymount Entrepreneurship Program, I pointed out that I do not present organizational democracy as a superior business model. As I explained to the students, “We know from reading the business pages that tyrants can be very successful, that assholes can be very successful. My goal is to dispel the myth that tyranny is the only path to corporate success. I want to encourage people who don’t want to be assholes to become leaders anyway.”

Many students view entrepreneurship the way Paul Orfalea described it in Two Billion Dollars in Nickels: “it’s not just about owning a business; it’s about owning your life.” They seek the freedom of being one’s own boss.  That inspires me, because I believe they will bring these values to their businesses, and respect their coworkers’ desire to be their own bosses too.

Here’s an excerpt from E Pluribus Kinko’s:

Paul and Dan also shared a success trait codified by Jim Collins in his excellent book, Good to Great (Harper Business, 2001). Both men were ambitious, but their ambition was for the company, not self-aggrandizement. And they both seemed to realize that the company was made of people. I believe this is true of all companies, but especially true of service businesses. Customers may have walked away with physical pieces of paper, but that was not what we sold, really. Paul knew from the beginning that our success depended on the fire in our coworkers’ eyes, and he promoted whatever freedoms kept that fire burning.

Dan saw this too, but he took a different tack: “Nothing’s more empowering than having the freedom to do what you need to do to get the job done. Coming out of the military, where everybody genuflects to the General, I was surprised that nobody listened to me. Nobody. But then I saw that we could design a framework for success in lieu of command. People could do it or not do it, but good systems, like our national Accounts Receivable program, were adopted on their merits.”

It takes a strong leader to build choice into their organizational processes, since the ranks of middle management will always be filled with petty tyrants seeking control and recognition. The democratic leader’s task is to keep those tyrants petty and empower everyone else. That’s how democracies evolve into meritocracies, where innovation can live side-by-side with efficiency.

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