At 7am this morning as I was writing this blog, my phone blared that jarring “Amber Alert” noise. But there was no missing child.
Instead, my state’s governor smartly alerted everybody to stay at home to slow the spread of the Coronavirus. What a weird experience; I felt like I was in an apocalypse movie.
The first thought that crossed my mind was gratitude that my family was healthy, at least at the moment.
The second thought that crossed my mind was how much “great leadership” matters in times of crisis. I’m proud of how our Managing Partner, Randy Street, and my other colleagues are leading through this crisis. And I realized how this crisis has revealed some of the cultural roots of ghSMART, the leadership advisory firm I founded 25 years ago.
Why you should care
If you are reading this article, you likely run or own a company or not-for-profit, or you aspire to lead an organization one day. ghSMART is a leadership advisory firm whose clients include CEOs of some of the largest companies in the world, influential entrepreneurs, and enlightened government and not-for-profit leaders. We help them to confidently hire, develop and lead talented and diverse teams that succeed.
You already know how much “culture” matters in propelling any organization forward. ghSMART recently won the “#1 company to work for” award in our industry for overall employee satisfaction, according to Vault. Vault said the main reason we won that award was due to the firm’s culture. And it’s during challenging times like these that a culture’s true DNA becomes crystal clear. So, I wanted to share with you 3 cultural roots that help ghSMART to power through crisis.
3 cultural roots that help ghSMART to power through crisis:
1. People matter more than maximizing profits. Most businesses look to satisfy shareholders first, customers second, and employees third. That is the norm, right? I believe that order is a mistake for several reasons—it’s nearsighted and ungenerous. And, if the #1 factor that determines the success or failure of your firm is your people, then why would you not prioritize them first? Our culture focuses on the needs of colleagues first, clients second, and shareholders third. It’s a balancing act, obviously, and make no mistake, customers and shareholders benefit from the level of talent we are able to attract and retain. This is win-win thinking. But when push comes to shove, that’s our priority list.
Here is how that prioritization shows up during a crisis. I recently observed our senior leaders discuss and decide on a new plan and budget for this crisis. They explicitly put “protecting our colleagues’ jobs” above “maximizing profits” on the list of priorities and goals to achieve during this crisis. There was a conscious choice in our plan and budget to have no layoffs, knowing that this means profitability will likely take a large hit in the near term, given market conditions. Nothing says “we are in this together” than to actually be in this together.
2. Transparency breeds trust. Since it is ambiguous “out there,” we choose to be transparent “in here.”
In good times and bad, we share with all of our colleagues the business plan and budget implications. Everybody means everybody, not just the senior people, get to know the plan.
Last week, after getting firmwide input, our management committee released our crisis management plan and budget update to the entire firm. It’s not all rosy; we’re conservatively anticipating a softening of demand in the market, so we are proactively trimming expenses and also candidly told folks they may earn less this year.
Last Friday, we had a weekly “town hall” video meeting where anybody could say or ask anything. Colleagues asked clarifying questions, and the tone was far more supportive than combative about our crisis plan. One of our consultants emailed another colleague about how important transparency is to her. She wrote, “One thing that stood out to me during my recruiting process was ghSMART’s commitment to transparency. This crisis has proven no different.” A member of the staff emailed one of our colleagues, “So thankful for our rock-solid leadership!” People thrive when information is transparently shared, when their input is requested, and when plans are made clear.
3. Freedom accelerates adaptation. Our culture moves fast and adapts rapidly because it is based on a fundamental foundation of freedom.
We are able to offer more freedom to people because we trust each other. We trust each other partly because the bar for hiring at ghSMART is as high as any bar for any firm in the world. Once you have built a talented and good-hearted team of amazing people from diverse backgrounds, you should get out of their way as much as possible.
Nobody has ever been micromanaged to greatness.
Everybody here is aligned around the credo and values, priorities, strategy, scorecards, and key processes. But beyond that, our folks have an uncommon amount of freedom to figure out how to succeed. And we encourage folks to be creative, courageous, and communicative as they work as a team to problem-solve and make magic happen for each other and for our clients. It doesn’t take long for new members of our team to get up to speed and see how this culture operates, and they seem to love it. A newer consultant named Jeff McLean has worked with some amazing leaders in his career. He is a Fulbright Scholar with degrees from Oxford, Wharton, and the U.S. Naval Academy, who led a squadron department in the U.S. Navy before working in private equity. He told me last week that the leadership performance of our Managing Partner and Management Committee (MP, CFO, CHRO, and 4 elected Partners) during this crisis has been at least as good as the very best leadership he ever witnessed in the top ranks of the military, government, and private sector. Jeff and several other colleagues are drafting an article that will come out in a few weeks which call out several other leadership principles that we practice in our culture as well as preach with clients.
In closing, I empathize with the difficulties that many companies are facing that have nothing to do with leadership or culture. Take the hospitality, retail, or transportation industries for example. It’s not their fault that structurally, with “stay at home” orders in place globally, this crisis will hit them harder than other industries.
But no matter what industry you are in, times of crisis reveal the true roots of your culture.
I’ll leave you with three questions as you reflect on your own culture:
How much do you really care about your employees? On Glassdoor, I wonder if employees say “Management doesn’t care about us.” Or do they say that you prioritize them first? It’s hard for folks to do their best work if they don’t feel that you have their back when the going gets tough.
How transparent is your culture? To what extent are you keeping your colleagues in the dark, for fear that they might revolt if they knew your true plans? Or do you share all available information with them, and including them in the problem-solving process?
Is your instinct to restrict or to enable freedom? Many of us who run or own companies are control freaks. One of the hardest things leaders have to learn is to push against their natural tendency to “overmanage,” and instead to give people as much freedom as they can handle. (This advice comes with the caveat that you had better be practicing the very best methods for hiring talented teams. Making hiring mistakes and having people on the team who don’t fit your culture or your strategy is a losing approach, whether you give them freedom or not.) But once you build a talented, diverse, and goodhearted team, set people free in your culture to do their best work.
Dr. Geoff Smart is Chairman & Founder of ghSMART, the leadership advisory firm. The firm exists to help leaders amplify their positive impact on the world. In 2020, ghSMART was ranked the #1 best consulting firm to work for in overall satisfaction, according to Vault.
ghSMART has published three bestselling leadership books: Who (by Smart and Street, #1 in the category of “hiring”), Power Score (by Smart, Street, and Foster, The Wall Street Journal bestseller about leading talented teams), and The CEO Next Door (by Botelho and Powell, the New York Times bestseller about CEO success).
Geoff can be reached at firstname.lastname@example.org.