5 Ways to Combat Sexual Harassment at Nonprofits

The moment has come for nonprofits to reckon with the sexual harassment that until all too recently has been swept under the carpet. In recent weeks, allegations of repulsive behavior have rippled through nonprofits, just as in government, tech, business, and elsewhere.

The American Red Cross made the dreadful misstep of unloading a senior executive accused of multiple harassment incidents by sending him on his way to Save the Children with a glowing recommendation. And the Humane Society of the United States saw seven board members step down over the organization’s handling of allegations of misconduct by the chief executive, who resigned a few hours after the board voted to keep him on the job. Arts and culture organizations and colleges and universities have also seen top leaders toppled by allegations of misconduct.

More revelations are almost certainly coming. Only the most naïve would believe that nonprofits exist in a rarified and exemplary world, immune from abusive behaviors. After all, the balance of power in the nonprofit workplace often leads to abuses of all kinds. And tolerance of sexual misconduct is exacerbated by the reality that men hold most of the positions of authority in the nonprofit world, with women in supportive and de facto more vulnerable roles.

That’s why executive directors and boards must establish far more effective approaches if they plan to deliver on the promise of zero-tolerance sexual harassment policies. What can boards and CEOs do to ensure that their actions prevent this abuse, and—when it happens—how can they respond in a way that will also leave their organizations stronger? Here are some key steps to take immediately.

Give boards a new mandate: Be stewards of the culture.

We’ve seen over the decades a widening of roles for nonprofit boards. Fiduciary responsibilities have taken overwhelming prominence, and, while this includes mitigation of risk factors (like lawsuits), boards focus on being the guardians of tangible assets.

Creating a strategic partnership with management has become as important. Two decades ago many boards became influenced by Harvard scholar Richard Chait’s advice to go beyond questions of strategy, staying high above the weeds. They begin asking larger "why" questions that are often not directly related to the present but offer insights on challenges and opportunities.

Although I believe strongly that all three roles are essential, I now advocate for a fourth.

Over the past few years, I’ve experienced many smart, high-functioning boards assuming the role of cultural steward. They realize boards must ultimately be responsible for maintaining a performance-driven, talent-focused, and innovative culture so that the organization does not get swallowed up by disruptions that cause their donor or membership bases to flee, and they do not allow a mission to become obsolete.

They also understand that an obsessive focus on culture prevents aberrant behaviors. And while the CEO must be responsible for carrying out the processes required to wrangle a culture into alignment, an increasing number of boards hold themselves ultimately accountable for this.

To be clear: The board as cultural steward is not merely about risk management (though this becomes an advantageous benefit). It’s about creating a healthy and productive environment that stops or stems sexual harassment as well as providing a plethora of other payoffs when boards take on the mantle. Look deeply into many of the organizations where sexual harassment runs rampant, and you will find elements of a toxic culture.

Stop giving rainmakers a pass.

Many nonprofits have key individuals who play an essential role in their organization’s success.

At times, but certainly not always, this is the CEO. As The Washington Post and The New York Times reported recently, the board influence—and charisma—of the Humane Society’s CEO, Wayne Pacelle, is merely one case in point. He was a rainmaker, a dealmaker extraordinaire in creating mergers, affiliations, and corporate partnerships. His deal-making prowess may have endeared him so profoundly to his board that they may not have been able to accept allegations of his aberrant behaviors. They stopped the investigation on him midstream.

Rainmakers have inordinate talent and influence to generate revenue, or they are seen as essential to the mission. In their own ways, they are exceptional, groundbreaking, and often charismatic. But out of fear of alienating these rainmakers, nonprofits too often seem blind to the ways they give them free passes. Rainmakers can be exempt from accountability to the formal rules, policies, and codes of conduct required of everyone else. It remains an unspoken dynamic.

Take the dramatic example from the corporate world, where the term originated. Citibank’s former CEO, John Reed, made a daring move to rein in a dozen errant rainmakers, despite their power to bring hundred-million-dollar deals to the bank. The problem: Their behavior was abusive to anyone who worked with them. Reed gave them a stern warning and offered executive coaching. When their behavior did not change, he gave them a second warning. The rainmakers assumed that their value to the bank guaranteed their immunity, since nothing consequential had ever happened when they broke code-of-conduct rules.

As he had promised, Reed fired them all. The power of this action showed the lengths he was willing to go to in enforcing civil behavior and change the informal, get-out-of-jail-free passes that one element of the culture had allowed. Are your rainmakers models of the behavior you expect from everyone? If not, take strong action.

Rethink the role of HR.

Nonprofit leadership must question the process by which those who are aggrieved seek safety and recourse, since the HR function in far too many cases can no longer provide it. A regressive drift over the past two decades has taken too many HR departments back to the days of transactional "personnel" function. We seem to have forgotten that when "human resources" became the function’s new name, it also embraced a deep commitment to represent the needs of employees, balancing an advocacy role while finally becoming a key part of the leadership team.

Victims coming forward have voiced how HR aggravated their sense of victimization when they did not feel believed or no action was taken. A study by the U.S. Equal Employment Opportunity Commission found that "75 percent of employees who spoke out against workplace mistreatment faced some form of retaliation."

The #MeToo moment has illuminated how HR is broken in too many nonprofits. Far from advocating for employees, HR leaders and their staff are increasingly ignoring, refusing to act, or inadequately addressing sexual harassment complaints. And this has led women in particular to stop trusting a department that ostensibly was established to protect them. Alternatives exist and are being adopted.

The first step to finding the best-fit solution is to acknowledge whether HR’s processes, reporting structure, and level of power are adequate to deal with this lightning-rod issue.

If not, consider truly independent and trustworthy resources outside the organization.

Question how much power you’re giving to external counsel.

Undeniably, sexual harassment is a legal-risk issue for any organization, with profound potential implications. But sending in the lawyers to investigate complaints or to conduct audits does not lead to a robust long-term organizational solution.

My respect for colleagues in the legal profession runs deep. But when their work steps over the line to conduct organizational assessments, requiring the mapping of power, influence, communications, and culture, the lens through which they look at these "soft" causes of bad behavior can be a limited one.

Organization development professionals engender deep trust in staff members and can quickly assess culture and culpability. They engage in far more solution-driven conversations with all parties to identify not only problem people but also problem processes and dynamics. When these professionals have dual-reporting accountability to the CEO and the board, while still maintaining a close relationship with HR, their insights can reshape troubled dynamics.

Find the levers that place pressure on men to speak out about the uncivil behaviors of other men.

When better codes of cultural conduct become part of everyday behavior, the men’s club will no longer protect the abuser. Time is up for leaving the burden solely on women to protect their female colleagues. Men must call out other men. If they know of egregious behaviors and do not act, there must be painful consequences.

With these fresh approaches to responsibility and transparency in the culture, nonprofit organizations can become not only irreproachable in the public eye, but also better and more empowering places to work. Let’s make 2018 the year to advance workplace equity, fairness, and safety.

This article originally appeared as an op-ed in The Chronicle of Philanthropy on February 13, 2018.

Political Beliefs and CEO Pay

During the creation of my blog post on the next generation of women leaders, I’d expected the dawning of a new era for women leaders, and with this in mind, I wrote about the obstacles that women leaders face after they’ve made it to the top. But, despite predictions, our nation’s highest glass ceiling was not shattered last November. Of course, that post still applies to women CEOs around the world, even if not to our president-elect. Regardless of personal politics, it is obvious that the race to win the position of America’s CEO illustrated some intriguing differences between what Republicans and Democrats value in their leaders. If we wanted to drastically simplify the aims of each party, we could simply look to their candidates’ books. For instance, the title of Hillary Rodham Clinton’s It Takes a Village says it all: today’s Democrats cherish social justice and equality. Likewise, Donald Trump’s titles The Art of the Deal and How to Get Rich could provide a snapshot of what today’s Republicans prize: individualism and free markets. So while some of us were outraged when Trump’s response to Clinton’s observation that he had rooted for the housing crisis was, “That’s called business,” others of us thought such a stance denoted strong leadership.

According to Abhinav Gupta and Adam J. Wowak’s 2016 article “The Elephant (or Donkey) in the Boardroom: How Board Political Ideology Affects CEO Pay,” this diverging of ethos isn’t confined to the political realm. In fact, the business decisions made by a company’s board are just as tied to ideology. And when it comes to leadership and compensation, research shows that conservatives tend to hold the CEO responsible for a company’s success, and so they pay him or her in a way that reflects that perceived worth (i.e.: more). Liberals, on the other hand, tend to believe that the company’s success comes from a team effort—it takes a village—and the company’s spending, including the CEO’s paycheck, reflects that feeling (i.e.: the CEO is paid less). Perhaps this contributes to the fact that, according to CNBC, “the average pay for an S&P 500 CEO was $12.4 million in 2015, or 335 times the pay of a rank-and-file worker, according to a new report from the AFL-CIO,” a wealth disparity Trump’s proposed tax cuts would buoy if implemented.

This finding leads us to why conservatives might have assumed that Trump was the right man for the job: He’s rich (and he’s not afraid to brag about it. Though just how rich is still unclear). And surely he must be rich because he’s a good CEO (“good” as defined by conservatives), and if he’s a good CEO, he must be worthy of not just the corner office but the Oval Office.

Herein lies the double-edged sword—or the potential for just deserts, depending on where you lie on the political spectrum. Unlike liberal-leaning boards, which hold a CEO responsible but also take into account issues of social welfare and circumstances outside the CEO’s control, conservative board members tend to evaluate the CEO on delivery above all else. And since Trump claims that “[he] alone can fix it,” citizens will be expecting the new CEO to deliver on his promises—to make America strong again, to make America proud again, to make America safe again, to make America great again, and to make all of our wildest dreams come true.

What We Can Learn About Culture from Zenefits

The story of Zenefits’ spectacular growth and downfall is the start-up train wreck du jour that no one can stop watching. An extensive piece in Business Insider last week cataloged once more the lurid details many have been poring over—tequila shots in the office, young employees treating their Arizona outpost as a frat house—and a former sales manager is quoted as saying: “When we were smaller, we could act the way we were acting in the office. I don’t think Parker did a good job of growing up. He let things get out of control. There comes a point where hypergrowth achieves diminishing returns.” The story also outlines some more subtle cultural failures that plagued the start-up over the last year, the pulling back of vacation time, and the clawbacks on sales bonuses that demolished morale. It’s easy to see how the superfast growth—spurred on by Vegas-style VC funding—taxed the company’s resources to the breaking point; but did it have an even more deadly effect on the young company’s culture, destroying it before it had the chance to grow to maturity?

When Aristotle declared that “nature abhors a vacuum,” he was speaking to the way in which nature requires every space to be filled with something, even if only air. The same principle goes for cultures, as they too abhor a vacuum. Organizations growing quickly without a core set of clearly articulated and reinforced values to guide the behaviors necessary for sustaining the growth will experience a cluster of values that saturates the culture anyway. As we saw at Zenefits, this osmosis-like effect draws in values that communicate to everyone “This is the way we do things around here.” And this is why it seemed acceptable for guys to leave their used condoms in the office stairwells.

Weak cultures are those in which little agreement exists and where the effort toward the vision is fragmented and often dissipated through conflicting agendas, blaming, and unclear communications. Another Zenefits employee is quoted in the BI article as saying that a “culture of dishonesty” had emerged, in which industry regulations were ignored and products were mischaracterized to customers. It’s easy to see how such a culture wouldn’t be sustainable.

Strong company cultures are those consciously embedded with only the values that support the organizational vision, where everyone agrees about their importance. In these organizations, you can feel the human energy that flows from this alignment.

In the broadest sense, culture is the personality of the organization, the shared beliefs, and the written and unwritten policies and procedures that determine how the organization and its people behave and solve business problems. Culture provides meaning, direction, and clarity; it is the human glue that mobilizes people to aim for the vision.

To understand an organization’s culture is to remain focused on the five elements that create it and their attendant questions:

  • Shared values: What do we think is important?
  • Beliefs: How do we think things should be done here?
  • Norms: What are the unwritten rules: the dos and the don’ts?
  • Heroes: Who are the people who personify our culture and serve as role models for others?
  • Systems: What do we do to influence people through our written and unwritten policies?

In the end, it all comes down to behaviors: “the way we do things around here.” The answers to these questions need to be put into action as a living, breathing part of the organization’s day-to-day functioning. Zenefits suffered from what is practically a Silicon Valley cliché at this point: a company culture that—infused by too much money and too much growth too fast—went from fun and inspiring to chaotic and dispiriting in a heartbeat.

The gap between the plan and reality of organizational performance is often significant and has been the subject of countless articles and books on motivation, leadership, management skills, and other elements heaped onto the “soft side” pile of organizational performance variables, in other words, the culture. At its most rudimentary, a “hard” strategy may look concrete, with its definitive goals, data, and spreadsheets, but it’s actually an abstraction. It is an idea for the future and has no real existence in the organization or in the marketplace. The organization’s culture, however, is a living, breathing, dynamic force that has a life of its own, operating independently of all plans and projections yet determining the success or failure of those plans.

I am currently a co-investigator of a large study of Fortune 500 CEOs aimed at exploring how these men and women are managing change in a world turned upside down by massive disruptions. One unexpected finding from my interviews is the extent to which they understand the importance of a perfectly “tuned” culture that’s aligned with the organizational transformation these disruptions demand. Our preliminary results, and countless other studies over the past fifteen years, continue to be sobering. They dispel the myth that culture is not a “hard” business issue. Cultures with values, beliefs, norms, heroes, and systems that support high performance significantly impact the financial metrics that matter to most executives.

The importance of company culture cannot be minimized, because a growth vision will fail unless the culture directs and sustains individuals’ behaviors, on a daily basis, in pursuit of strategy. While these intangibles may be far harder to measure than sales volume or return on equity, they are often the key factors in one organization’s competitive advantage over another. The difference between success and failure can often be attributed to a limited set of organizational characteristics. When they are combined, they create culture.

Many organizations emphasize values such as quality, customer service, teamwork, respect for the individual, and innovation—themes with broad appeal that can help people feel they are reaching higher goals for themselves. But all too often these values are communicated merely as organizational spin control in the form of annual reports, recruitment sections of the corporate website, and token discussion at management retreats. They fail to become alive, to be fully infused in the fabric of their culture. And nothing is more dangerous to a company’s survival.

Why Start-Ups Fail: Part Two

Last May, Silicon Valley HR start-up Zenefits was being called a “unicorn” and sending its top salespeople to Vegas for a bacchanal to rival The Wolf of Wall Street. My, how things have changed. Over the last several weeks, as news of compliance failures and employees run amok (between all the sex and drinking in the office, the place was, ironically, an HR nightmare) has surfaced, it’s become clear that Zenefits’ spectacular growth has also been, at least in the short term, its undoing. Last week I discussed several common reasons start-ups like this one suffer, and today I want to explore a few others.

Uncoordinated Transformations

A new firm can maintain healthy expansion only to the extent that its internal mechanisms are seamlessly coordinated. The problems of coordination—such as with the rapid addition of new locations and employees (both huge issues for Zenefits, which added a satellite office and hired hundreds of underqualified new employees over the past year)—are directly proportional to the rate of growth. An organization’s capacity to digest new elements depends on a complex set of organizational processes. It’s difficult to add employees and customers at an extremely fast rate without diminishing the quality of output or running out of cash. Failure to define processes for recruitment, selection, motivation, control systems, and development of values within the organizational culture creates chaos rather than providing the kind of transformation that will allow a new business to thrive. Ultimately, these issues can crush any hope of sustainability. Each person who began with the firm must change as the organization does, entailing a shift that can feel profound. The days of ad hoc management disappear, and managers must learn how to work at a strategically higher and faster level and to define the principles that will govern decisions such as who should be hired and fired. They must learn, quickly, how to create new structures so the company can spend serious money while taking bigger risks for bigger returns. And they often must learn to let go of traditions and established practices in favor of more professional norms. Beer pong at the office might be fine for a company of five, but it’s not hard to imagine why that won’t work for a company of one thousand.

The Fantasy That There’s a Map

Sustainable growth for any entrepreneurial venture requires moving methodically through a series of developmental stages. In one analysis of entrepreneurial growth patterns, 51 percent of the companies progressed sequentially through the expected stages. They followed a traditional linear pattern of development and growth. That’s good news. But the other side of this equation is the bad news: Did firms in the 49 percent that skipped the traditional stages of development one might assume to be necessary end up spiraling out of control and failing? With nearly half the successfully scaled firms not following any model that explains or predicts growth stages, it stands to reason that models accepted and used in the past may be poor predictors of how an organization might successfully scale in the future. A slew of “growth stage models” exists, but most are based on anecdotal observations rather than rigorous research. Warp-speed growth doesn’t follow a tidy linear progression. Analysis of successfully scaled organizations reveals that the stages or patterns of development vary. There is no universal road map that guides scaling. Only the road map that results from managing a unique, comprehensive vision can predict whether a scaled firm will sustain itself.

The Struggle to Maintain the Family

Watching a start-up scale without an adequate vision is a familiar scene: As the need for processes and values takes center stage, old rules disappear, time becomes woefully scarce, work life and personal life merge, and corporate gestures that used to mean one thing suddenly mean the opposite. A warm family atmosphere where everyone knew one another and virtually everything was transparent becomes an environment where silence replaces the easy, informal communications. To compensate for that silence—which is often both unintentional and inevitable—a plethora of ad hoc processes are set in place. Reporting systems, budgets, and performance reviews—often inconsistent in their implementation—attempt to direct employee behavior. When the easy, informal communications channels begin to fade and are replaced by more formal chains of command and departmental silos, people begin to feel overlooked, if not abandoned, by upper management. As the firm launches, the environment feels intimate. Everyone knows who is getting married, having babies, caring for a sick parent. But the venture has to get bigger, add more systems, and implement more controls. What used to happen spontaneously now happens systematically. Through email and voicemail, perhaps even with stringent reporting structures and weekly meetings, everyone may know everyone else’s business—but they no longer know everyone else’s name. The venture that begins as a team or family becomes an impersonal company as it scales. People within will likely remain strangers to one another in spite of the desire and hard work by some to keep the memory and spirit of the family alive. Often, the people who left a big corporation to become part of a start-up realize the firm is evolving into something all-too familiar and distasteful. It will be fascinating to see what Zenefits’ remaining employees do now that the party, quite literally, is over.

Facing the Enemy

If we step back and consider these organizational perils, a picture emerges of the firm’s biggest enemy to survival: its own executive management team. It may be a founding entrepreneur, a COO hired to “bring discipline” to the original vision, or the entire team. These hardworking people have enormous responsibilities for managing the liability of newness, coordinating organizational transformations, and determining which growing pains to address at different times. If correct and timely actions are not taken to address these issues, the team will probably fail at one or another goal. And when they do, there is the probability—however unintended and well meaning—of holding someone or something else accountable.

Why Start-Ups Fail

As beleaguered software company Zenefits continues its spectacular fall from grace with news last week that they are laying off 250 employees, it begs the question: How do these start-ups fall so far so fast? This isn’t the first time a tech start-up has turned toxic seemingly overnight; the stories are myriad and go back to cautionary tales from over a decade ago with companies like Friendster, Napster, WebTV, and others. So why doesn’t Silicon Valley seem to ever learn? How does the Vegas-like atmosphere continue as though nothing’s ever gone wrong? The most comprehensive analysis to date of start-up failure has been done by the Startup Genome Project. Premature Scaling—a project coauthored by Berkeley and Stanford faculty members with Steve Blank—used ten start-up accelerators as contributors and analyzed 3,200 high-growth web/mobile start-ups. They found that within three years, 92 percent of start-ups failed. Of those that failed, 74 percent failed due to premature scaling.

Premature scaling leads to either spending money on marketing, hiring, and other resources before you find a working business model (you acquire users for less than the revenue they bring) or in general spending too fast while failing to secure further financing.

Most start-ups that survive the first few years remain small, but smallness is acceptable only in the rare cases when an entrepreneur or parent organization has patient investors not demanding a significant return in a relatively short period of time; this is almost never the case in today’s high-stakes VC climate. For the overwhelming majority of firms funded by outsiders, staying small is a death knell, indicating that while the organization hasn’t failed yet, it has slim prospects of providing the return originally expected by both the VCs and the founder. In industries like tech, being small is considered as good as being dead.

“There are a hundred reasons for success and a thousand reasons for failure,” a VC once said to me with a sigh the day after he shuttered one of his portfolio companies. I disagree. The reasons for most of the failures I’ve studied may have a thousand variations, but they share a small number of interrelated root causes. And absent a comprehensive vision, there is no way to combat them.

The “I’m Right, the World’s Wrong” Mind-Set

Entrepreneurs of failed start-ups have a tendency to blame others for business problems rather than holding themselves accountable. This is ironic, as these are often the same leaders who like to project the sense of being in control of everything. Nonetheless, they more frequently attribute failure of their own ventures to external factors, such as competitive market conditions and financing problems. This is in contrast to the VCs who fund them, who more frequently attribute failure to internal factors, particularly management inadequacies.

These same entrepreneurs often attribute the poor performance of other firms to internal factors, yet assign their own troubles to external causes over 85 percent of the time. This difference between the lack of accountability entrepreneurs take for failure and what they are actually responsible for can profoundly affect which solutions are pursued when a venture starts to go down. If the assessment points to issues outside the organization, then why bother changing organizational components under management’s control? Some entrepreneurs also seem to think that attributing their problems to external factors is the best strategy for negotiating with a VC. If they can convince the VC that their firm’s problems come from the outside, then the VC will be more likely to help them ride out the storm. But this often backfires. The entrepreneur who blames external factors is often seen as delusional or unwilling to take responsibility by the VC. This chain of passing the buck can hasten the venture’s demise and lead to an unfortunate self-fulfilling prophecy: when the entrepreneur wrongly blames external factors for the firm’s problems, one crucial external factor—the VC capital—may become its ultimate problem if it stops flowing in.

The Liability of Newness

The most appealing, and perhaps least daring, explanation for failing to scale up and remain sustainable is to attribute it to a phenomenon known as the liability of newness. The risks of newness result from a wide variety of sources, but we almost instinctively point to the invention itself—a new product or service. As we saw with Zenefits, for example, it’s easy to imagine how such an unprecedented approach to manage benefits for small businesses could contribute to the climate of “no rules apply” that has been so disastrous for them. It follows that a company doing something so outside the box would bear some outsize risk just by nature of its products.

And although common sense would indicate that failure is higher for pioneers than for late followers (which is true), it would also lead us to believe intuitively that the causes underlying the liability of newness would be the failure for a new product or service to reach and appeal to its intended audience (which is false). Actually, the risks arising from newness appear to result from a much wider variety of sources that are not weighted on product or market share issues, as most believe. Of course new industries and innovative products take more time to refine, but the ultimate failure of these companies is still most likely to be organizational.

Research again leads us back to senior management as the key factor behind the liability of newness. Zenefits had a great product, as many in the HR field have claimed. But in the process of a major scale up, such as we saw with them, management too often pays little attention to the need for a consciously developed organizational culture. They often create structures that support current—but not future—needs and ignore conflicts regarding evolving and emerging roles within the organization. Most important, management often lacks clarity for how the organization’s vision relates to people’s roles and behaviors. In an overwhelming number of cases, no vision has ever been articulated. It’s reduced to the immature denominator of “get big fast.”

Executive management teams tend to have an outward focus—they’re consumed with ensuring that the new product or service is accepted and gains increasing levels of market share. But the liability of newness blindsides them. They fail to pay sufficient attention to what’s going on within the house. This phenomenon further compounds entrepreneurs’ “I’m Right, the World’s Wrong” tendency to avoid accountability for acknowledging and managing strategic issues within the firm.

Why Culture Should Be at the Center of Your Organizational Vision

When Gordon Bethune took over Continental Airlines in 1994, it was the lowest-ranked airline company in the country. It had been through ten presidents, suffered two bankruptcies, and posted a $200 million loss by the time Bethune stepped in. Needless to say, he had his work cut out for him. With the company on the brink of collapse, Bethune believed that what most urgently needed to be changed was Continental’s culture. In the past, scaling initiatives were usually squelched before getting the chance to come to fruition. But perhaps the most stifling effort to unite the team on behalf of the former management was a nine-inch-thick book of rules—mocked throughout the organization as the “Thou Shalt Not” book and, with a more Orwellian tinge, “The Book.”

The Book was a visible symbol of what was dragging the company down. Continental’s corporate culture had stripped employees of the freedom to make decisions, take initiative, and speak out. So what was Bethune to do? The first order of business was to literally set the book on fire, a ceremonious representation of the end of the company’s “Big Brother” culture. Bethune wanted to show employees that they would now have permission to think for themselves.

Lo and behold, between 1994 and 2001, Bethune led one of the most impressive turnarounds in US corporate history and created an organization that began to not only scale up, but thrive. Until it was taken over in 2010 by United Airlines. Continental was an attractive target to airtarget to airlines driven by consolidation in the industry.

I find many organizations don’t think deeply enough about their culture when they’re in the process of building their vision, choosing instead to focus on things that feel somehow more concrete like revenue goals, growth targets, and being the leading something or other in the industry. Organizational scholars didn’t start paying attention to culture until the beginning of the 1980s, in large part because culture was often experienced as ephemeral, intangible, and unmeasurable. Culture refers to the taken-for-granted values, underlying assumptions, expectations, and definitions of the present in an organization. It represents “the way” and provides a prevailing sense of identity to employees. The culture is the living, breathing—and often invisible—part of what keeps the company aloft. So, as you can imagine, when researchers began to grasp that culture was the crux of organizational performance, it changed everything.

Now, culture is accepted as a critical determinant of success. Company culture isn’t static; it’s a muscle that needs to be exercised, trained, and changed as needed. A healthy company is not stagnant, so naturally a company’s culture has to grow and adapt for the organization to be able to keep moving forward. Without consistent maintenance of its culture, a company is at risk of ending up where the pre-Bethune Continental Airlines was—which is why culture is both a central element of vision itself as well as the framework for building one.

In my research and consulting experiences, I’ve found a glaring omission in organizations that claimed to have a vision but were not using that vision as a management process. The disconnect was apparent: the desired culture was never articulated. Perhaps the organization would go as far as posting a nicely worded statement in the office kitchen or corporate boardroom, but the executive group rarely held one another accountable for ensuring that “the way things are done around here” was consistent with their vision.

We often hear about strong and weak cultures in corporate jargon. But what do those distinctions actually mean? Strong cultures are those that support the organizational vision, those in which everyone agrees about the importance of specific, high-performance values tied to the vision. In these organizations, you can feel the energy and the collective drive for success. Weak cultures, then, are those in which little agreement exists. Like the former culture at Continental, the effort toward the vision is dissipated through conflicting agendas, blaming, and poor communication.

A culture is the human glue that brings people together and mobilizes them toward the vision. In order to understand a company’s culture, try starting with these four questions:

  1. What do we think is important?
  2. How do we think things should be done here?
  3. Who are the people who personify our culture and serve as role models?
  4. What do we do to influence people through our written and unwritten policies?

In the end, it all comes down to behavior—as I said earlier, “the way we things are done around here.” As the company changes, so will the answers to these questions. Nonetheless, the importance of the culture will never diminish.

What the Seahawks Can Teach Us About Combatting Mean

It’s hard to think of an organization more rooted in the kind of toxic masculine stereotypes that typify the mean man than the NFL. And yet, one of its most successful franchises of the last few years, the Seattle Seahawks, serves as a prime example of authentic leadership at its best. “The hero and the psychopath may be twigs on the same genetic branch,” wrote the late David Lykken, a University of Minnesota professor of psychiatry and psychology. When we look at it this way, it’s unsurprising to see this dichotomy playing out on the football field: the beating heart of American hero worship. It’s true that both the hero and the psychopath possess a fearless temperament. But whereas the successful psychopath is the product of a culture in which meanness has run amok, the hero gives us insight into what it looks like to be successful without resorting to meanness.

We’ve examined on this blog numerous organizations in which mean rules and no one takes action, where the combination of outsize ambition and lack of empathy causes suffering. But what does it look like when ambition is channeled appropriately? When risk is part of the game but it’s not everything? When people are treated as people, not objects?

The Seattle Seahawks have an organizational philosophy that closely mirrors the cultures and practices of the Best Companies on Fortune’s list and gives us a peek into the potential antidote for organizational meanness. And nowhere is meanness more pervasive and tolerated than in professional sports. When considering potential draft picks (job candidates in this context), the Seahawks look at the language used by the players and cut from the pool those who lean on negative language or finger-pointing. They want a culture of accountability and optimism, and they start by getting the right people in the room.

The team’s coach, Pete Carroll, seems the antithesis of what we think of when we picture NFL coaches, screaming on the sideline, veins bulging, faces red. In a style that belies a fervent commitment to winning, Carroll is all about encouragement, not laying blame. He gives the individual men on the team the freedom to be themselves and sees himself as on a constant journey to identify and maximize the uniqueness of every player and coach. He is committed to a nurturing environment that allows people to be themselves while still being accountable to the team. This is a leader who recognizes that the best results will come from having happy, healthy men on his team. Carroll incorporates meditation and yoga into the team’s workouts, and yelling and swearing are strongly discouraged.

The top-down civility of Pete Carroll has a tremendous effect on all of his staff as well as his players. Tom Cable, the former coach of the Oakland Raiders with a colorful mean-man past, changed his coaching style after working with Pete Carroll as the assistant head coach and offensive line coach. “If I go ballistic on a guy because he dropped his outside hand or missed an underneath stunt, who is wrong? I am,” Cable says now. “I’m attacking his self-confidence and he’s learning that if he screws up, he is going to get yelled at. If you make a mistake here, it’s going to get fixed.”

Compare this with a speech given during the 2013 Rookie Symposium by Chris Ballard, former director of player personnel for the Kansas City Chiefs, who told the newly minted young players, “Nobody cares about your problems. The fans don’t care. The media doesn’t care. And ownership doesn’t care. They care about results.” This speech is hardly surprising in the no-whining-be-a-man culture of the NFL, but it’s still shockingly callous considering that it was delivered a scant seven months after a member of that same NFL team, Jovan Belcher, shot his girlfriend nine times before driving to the team’s facility and killing himself in the parking lot.

So what are the implications of the Seahawks’ unique culture of getting results while making the players’ health and well-being a top priority? Namely that being civil is not only better, but more effective. This idea, encouragingly, is starting to catch on. As many mean men as I’ve encountered in my work, I’ve been pleasantly surprised over the past few years by certain clients’ sensitivities to rooting out abusive management. Many civil entrepreneurs running firms in aggressive industries—such as hedge funds and tech companies—were shocked to discover the abuse that some of their senior managers heaped on employees. It doesn’t take a mean CEO to create a toxic climate given the proclivity of certain industries to attract mean men like jackals to fresh meat. But if the situation is flipped in these aggressive fields and the leader is civil, then the abuser is often rooted out and crushed.

In professional worlds where meanness is more than tolerated, leaders like Pete Carroll give us hope for change. If a pro football team can make it to the Super Bowl on the tailwind of civility, imagine what other organizations might accomplish.

Why the Best Leaders Trust Their Employees

“By the standards of the rest of the world, we overtrust. So far it has worked very well for us. Some would see it as a weakness.” That reflection comes to us from Charlie Munger, vice chairman of Berkshire Hathaway and Warren Buffett’s business partner and best friend, who ruminated on the state of corporate life at Berkshire Hathaway’s annual meeting in spring 2014. Buffett and Munger’s firm is run in the exact opposite way many would expect a diverse amalgamation of companies to be run. By all accounts, it is run more like a massive entrepreneurial venture than a lumbering conglomerate. Both men are allergic to distrustful corporate cultures, but how do you use trust to manage the fifth-largest company in the United States, with $162 billion in revenue and 300,000 employees worldwide? How do you operate dozens of diverse businesses without a risk-managing general counsel overseeing them all? Without a finger-wagging centralized human resources department telling every operating unit what to do or not do? In other words, how do you dispense with the control mechanisms that enable Buffett and Munger’s mean man counterparts to feel utterly omnipotent? It could seem at best naïve and at worst negligent to run a large business like this. But in truth, the trust Munger mentioned can be a kind of superpower, one whose potential often remains unlocked or is misused. But Buffett and Munger get it: their management philosophy is based on finding trustworthy managers and giving them an enormous amount of control. Over the years, they’ve shown how this creates more value than if they consolidated the control in the company’s Omaha headquarters and monitored the business’s every move.

At a 2007 meeting, Munger said, “A lot of people think if you just had more process and more compliance—checks and double-checks and so forth—you could create a better result in the world. Well, Berkshire has had practically no process. We had hardly any internal auditing until they forced it on us. We just try to operate in a seamless web of deserved trust and be careful whom we trust.”

The belief that a leader can accomplish more by developing a culture of trust than by implementing multiple layers of control may seem unrealistic in today’s age of complex, fast-growing start-ups. But two researchers from the University of Zurich have shown that the more a firm focuses on controlling and monitoring their employees, the more new problems arise.

Control-heavy leadership not only doesn’t make people behave the way you want them to but also has the paradoxical effect of encouraging them to take advantage of the firm they’re supposed to care about. Researchers Margit Osterloh and Bruno Frey call this phenomenon governance for crooks. Whereas when organizations put a premium on trust, people tend to act in more ethical, civil, and productive ways.

In firms run by mean men, trust is doled out like small crumbs—and vacuumed away just as easily. Their need for control makes building genuine trust impossible. This absence of trust then creates its own self-fulfilling prophecy. When people do not feel trusted, they’re more likely to act in an untrustworthy manner. Intrinsic sources of motivation evaporate, and they become more focused on what they want to get from the organization, rather than what’s right for the team.

Today’s smartest companies put a higher level of trust in their workforce and seek to raise employee engagement at all levels—building in involvement, commitment, passion, enthusiasm, focused effort, and energy to employees’ work experiences.

Engagement has now been widely correlated with higher corporate performance. It embodies what the new generation of talented workers expects, and what most of us probably always wanted. In a 2012 analysis of 263 research studies across 192 companies, Gallup found that companies ranking in the top 25 percent for employee engagement, compared with the bottom 25 percent, had 22 percent higher profitability, 10 percent higher customer ratings, 28 percent less theft, and 48 percent fewer safety incidents.

Trust is an even bigger deal.

Billy Joel’s song “A Matter of Trust” starts off hard and loud. In the second line he sings, “The cold remains of what began with a passionate start.”

A passionate start. I’d be hard-pressed to find a better way to capture how mean men use their manipulative, faux-charismatic charm to create a passionate start with those who don’t know them well. But the passion never lasts; ultimately it becomes revulsion.

Incivility, in any form, ultimately chips away at the bottom line, even if in some cases it bumps up short-term profit and stock price. Authentic leadership—the kind that emphasizes trust and engagement—on the other hand, creates workplaces that have greater loyalty, reduced absenteeism, increased reliability, and higher job performance.

I’ll leave you with a stunning observation from a group of UK researchers: when leaders act with authentic leadership and infuse expectations for pro-social behaviors into their corporate cultures, their employees’ desire for achievement increases (a good thing, since it directly translates to higher motivation for employees), and their need for power—the bad kind—decreases. Something about authentic leadership and pro-social behaviors makes us want to work harder while at the same time reducing our need to control other people.

It all comes down to a matter of trust.

Who’s Allowed to Be Mean? A History

To combat our workplaceepidemic of meanness, we need to confront not only the mean men (and women) themselves but also the surrounding culture that enables them. We often rationalize that anger and meanness are a fixed “mentality,” and, even worse, we let it slide in those who have the privilege of power. Disgraced former congressman Michael Grimm—who was packed off to prison last month—is an excellent example of a man at the top who was allowed to be angry and abusive simply because that’s “just who he is.”  Meanness and rage are what he’s known for, his trademark, and he felt theyought to be respected as such.

Anger itself can become a cheap substitute for character. A mean man like Grimm could think: “If I’m known for being the angry guy, I can just react according to expectations without having to figure out how I really feel, andmy behavior will be excused because, well, that’s who I am.” This happens to be  consistent with psychopathy. Even the subclinical psychopath can be fully stymied when emotions arise. He has little to no capacity to understand how he is feeling, let alone why, so it’s easier to just let the free-emotion fire hose loose and act out.

Looking at the history of workplace culture in the United States tells us something about how we got here. The trajectory  has led us to a place where some are allowed to express their anger, while for others—notably any woman in power—it remains taboo.

1930s: Industrial psychologist Elton Mayo began his study of a novel phenomenon that was emerging: workers were angry, and they were letting it show. While some psychologists were willing to accept that conflict was not only inevitable but also potentially good, Mayo considered a work dispute the collective equivalent of a nervous breakdown, a serious and ideally avoidable malfunction.

In his quest for workplace harmony—which has obvious advantages in terms of reduced labor turnover and time lost in strikes—Mayo and his colleagues made important claims that centered on the understanding and handling of anger at work.

His conclusion was that “worker anger had nothing to do with the job itself.” The idea resonated with managers, as it removed the blame from their shoulders. Mayo’s theory was a crowd-pleaser for the manufacturers who employed the workers and the industrial psychologists who made excuses for them. These human-relations experts (as they were known at the time) claimed in 1938 that critics of capitalism were merely “projecting their own maladjustments upon a conjured monster, the capitalists.” But the basic message was more subtle: workers brought anger to the job from other sources, typically from home.

Harmony required restraint from both managers and employees. If workers were angry not because of the job but because of home life, then an angry response from management was inappropriate. In order to enjoy a superior rationality over emotion-driven employees, it was essential that the manager display consistent restraint.

Mayo posited that “a uniformly benign emotional style was the best managerial tool.” This was probably the greatest shift in thinking that emerged between the two world wars. The gruff, authoritarian boss now took his place alongside the angry, punitive parent in what amounted to a major enlargement of the campaign against anger. Expressing anger—being mean—became one of the leading justifiable causes for being fired. The standards for being a good boss were changing remarkably. These standards didn’t, however, apply to owners and those at the very top.

1940s: Once, an ideal foreman was someone who met production quotas and took charge of technical innovations on the shop floor, but by the forties the foreman was expected to be a human-relations expert who blocked grievances and reduced turnover by managing his own emotions as well as those of his underlings. Bosses were urged to recognize that “the day of the ‘bully’ and ‘slave-driver’ had gone and the day of the ‘gentleman’ and ‘leader’ had arrived.”

Yet ambivalence and hypocrisy remained in this period’s otherwise sweeping attempt to reduce meanness at work and elsewhere. While anger control was expected of workers and internalized by many white-collar managers up the hierarchy, it never quite touched the top executive levels. Executives urged restraint on secretaries without any reciprocity. They sent subordinates to emotion-training sessions, but they didn’t go themselves. At the top, executives could still be bullies, because they were in charge.

1950s: Middle managers were expected to make a particular point of being patient and avoiding aggression; an ability to control their tempers under provocation was paramount. Yet studies from the time showed that top managers were not expected to make being pleasant a priority.

In dealing with grievances or disciplinary cases, restraint was not required of the top ranks.  Aggressiveness and drive—the prerequisites of American gumption—seemed incompatible with reining in one’s spirited emotions. And so the executive temper had to be tolerated, and it was up to the subordinate to learn how to time bad news and to put a favorable gloss on problems in order to minimize conflict.

Sadly, sixty years later, we have not moved forward much from this way of thinking—in other words, meanness and anger are okay for those at the top, but heaven forbid the underlings should push back. But with all of the shifting expectations around work life  that the millennial generation brings with it to the office, could this culture finally be in for an overhaul? Let’s hope so.

Incivility in America

  One of The New York Times’ most emailed stories last month was an article by Christine Porath, a professor at Georgetown University’s McDonough School of Business, entitled “No Time to Be Nice at Work.” Porath made a powerful case in her piece that rudeness and incivility in the workplace have grown dramatically over the past twenty years, during which she’s been studying and collaborating with organizations. And she posits that we as a society are paying the price for this rudeness with our emotional, physical, and mental health. Throughout the course of my research for Mean Men, I’ve noted the same alarming trends. Professor Porath’s work is only the tip of the toxic iceberg.

The 2014 annual report on “Civility in America,”—a national survey of Americans conducted by Weber Shandwick and Powell Tate, public relations companies, with KRC Research—showed that an overwhelming majority of Americans across four generations—Millennials, Generation X, Boomers, and the Silent Generation—perceive incivility to be a major problem.

A 2010 Allegheny College survey, for example, on Americans’ views of civility in politics was revealingly titled “Nastiness, Name-Calling & Negativity.” Professor Porath’s 2011 workplace survey found that just over half of employees reported that they experienced rude treatment from fellow employees at least once a week. A 2012 Rasmussen survey found that some 75 percent of Americans felt that people “are becoming ruder and less civilized.”

Much of the discussion generated by reports of increasing incivility focuses on its negative effects on democratic discourse or its direct costs to individuals. Various research initiatives have popped up to promote more thoughtful, less rancorous political engagement, while new “civility projects” and other programs aim to encourage people to “choose civility” and thereby reduce stress in their life.

The findings of these reports are generally consistent with other research published in recent years on the frequency of disrespectful speech and behavior. Though everything from anonymous Internet commenters to politicians was cited as contributing to the issue, most Americans regarded common actions of their fellow citizens as uncivil, such as the way they use cell phones in public or conduct themselves on social media. But the concern with incivility was really driven home by direct personal experiences of rudeness and disrespect, daily experiences of which were especially common at work and online.

Here’s the problem: data from the “Civility in America” project don’t seem to indicate any “incivility cycle” among the general public. Very few people acknowledge having an uncivil behavioral reaction when confronted by the rude, mean, and inconsiderate actions of others. But there was one consistent reaction to rude or mean behavior: tacit avoidance. And avoidance constitutes a problem of its own. In unpleasant face-to-face situations, people often either leave, simply ignore the offender, or suffer in silence under a torrent of abuse. Encountering online ugliness, they often respond by “defriending,” leaving a site or online discussion, or dropping out of an online community. Incivility at work leads people to quit their jobs due to the perception that there’s nothing that can be done to effect change. Although all of this is understandable, avoidance may be cumulatively fostering the incivility problem. The “art of living together,” to borrow a phrase from Reinhold Niebuhr, requires interaction. Take that away and incivility may be self-perpetuating.

There’s reason to believe that Millennials may represent a part of the solution to this issue. While their older counterparts believe the rise of rudeness is rather hopeless and unstoppable, Millennials are up to four times as likely to believe that civility will improve in the near future. They are vastly less pessimistic than the preceding generations.

Rather than quietly avoiding uncivil situations, Millennials tend to speak with their wallets. Because of how they were treated by someone in an organization, nearly half (49 percent) have either stopped buying from the company and/or advised others not to buy (44 percent). They have stopped attending pro and college sports because of uncivil behavior they witnessed on the field or in the crowd.

Word of incivility can spread with incredible speed via social media—the domain of Millennials—and it can have real costs to those who make missteps, such as in the case of the new media firm that sent out a crude tweet on behalf of Chrysler or any number of brand fails that have damaged companies’ reputations, in some cases beyond repair. Loyalty is essential to maintain a stellar brand, and Millennials are very aware of their power of choice and are equally as willing to exercise their power and hold companies and public figures accountable. Social media users have also shown that they can unite for good causes and spread the word about events where abuse or unfairness might be taking place, such as they did during the uproar in Ferguson, Missouri. Millennials also make good use of sites like Glassdoor to anonymously share the unfiltered truth about what goes on at a company, and particularly how fairly employees are treated, making it harder for bosses who behave badly to recruit new talent.

With social media giving the individual unprecedented ability to make their voice heard, there may yet be hope that the uncivil amongst us will be left with no place to hide.

Why Christie’s Meanness Will Be His Undoing

Chris Christie returned to his hometown of Livingston, New Jersey, this past week to make an announcement that many saw coming despite his recent troubles. In the gymnasium of his former high school—scene of Christie’s youthful glory days as president of his class three years running and captain of the baseball team—he took the stage to throw his hat in the ring and join an almost absurdly crowded field of Republican presidential hopefuls vying for the 2016 nomination.

In his admittedly rousing speech, he flayed not only President Obama and his “second mate” Hillary Clinton (yawn) and presumptive opponents like Ted Cruz and Marco Rubio, but the government at large for its utter lack of ability to compromise and get things done. It was stirring stuff, but no one’s ever criticized Christie’s skills as an orator. Will his inarguable charisma be enough to get him back in the good graces of the American people in time to make a serious bid for the White House?

Governor Christie of New Jersey rose to fame as a brazenly incautious politician. He was the “straight talker,” defined by his blistering rants, searing insults, and perennial public feuds—all of which he labels as “harmless theatrics.”

But Christie’s meanness may be what does him in before the 2016 presidential election, something he spent much of 2014 and 2015 to date getting ready to throw his weight into. Bridgegate, the New Jersey lane-closing scandal rooted in a ruthless act of political retribution, promises to be a visible narrative of the belligerence he’s so known for and which can as easily work against him as it does for him. In early May 2015, two of Christie’s most loyal and trusted lieutenants were indicted. Brigid Harrison, a professor at Montclair State University, says it’s probably the death knell for Christie’s national aspirations. “Even if he is not directly connected to the indictments,” she noted, “he is guilty of creating a political culture in which corruption was allowed to flourish.” In other words, the polar opposite of what he vowed to accomplish with all of his “straight talk.”

There’s backlash too for Christie throwing his trusting staff under a bus in the wake of the scandal, as Christie and his minions are infamous for punishing any who cross him. When times get rough and you need friends, that kind of turncoat behavior makes others nervous. “Exoneration of the man is not exoneration of his leadership style,” commented The New York Times in the wake of the indictments.

During his meteoric rise, as he won hearts and minds during a series of town hall style meetings throughout New Jersey, Christie was the envy of the Republican Party for his savvy branding as a tough-talking but likeable, relatable guy with heaps of New Jersey swagger. His popularity was such that certain Republican insiders are rumored to have begged him to run instead of Romney in 2012. But in a post-Bridgegate world, Christie’s path to the presidential nomination is buried in the underbrush.

As it stands, a mind-blowing fifty-five percent of Republicans polled couldn’t imagine voting for Christie. In fact, the only Republican candidate less popular at the moment is America’s favorite bloviating buffoon, Donald Trump. And even The Donald was told “you’re fired” by NBC, his syndicating partner for beauty pageants and The Apprentice. Might it be more than a coincidence that the two loudmouths with the lowest polls going into the Republican nomination process have a worldview that the best way to influence others is to bully them?

Americans have historically shown considerable forgiveness for personal scandals (there was a little kerfuffle with the now-beloved Bill Clinton, if you’ll recall). But the public sees Bridgegate not merely as Chris Christie’s scandal but as a singular case of public betrayal, an event notable for its bullying quality and indifference to the thousands of people who were impacted by it. Extraordinary rhetorical skill notwithstanding, meanness is what threatens to take Christie down.

Why Transparency Is Tricky

I’ve posed the question before on this blog: Who is responsible for holding mean men accountable? For exposing their wrongdoing when necessary?

There may be hundreds of reputable news outlets covering business, but they often don’t do as much as they should. It doesn’t help that mean men are, almost by definition, charmers. Combine money with power with connections with influence, and you begin to see why the mainstream media seems to “miss” certain truths that the general public has always sensed. And while the media catches up or reorganizes its priorities, we need greater transparency inside our largest corporations and organizations.

Just a few decades ago, it was unthinkable that subordinates would evaluate a leader. We aren’t talking as far back as Mad Men even—we are talking the era of Friends. The 360-degree evaluation didn’t become popular in US organizations until the 1990s. Now, in Fortune 500 companies and top nonprofit organizations, it’s the norm.

Executive coaching also used to be a rarity, and when it came into full bloom—also in the nineties—it carried as much stigma as seeing a shrink did back in my parents’ day. A CEO that needed a coach was a CEO who couldn’t manage his or her problems. Today, a large percentage of people are turning to executive coaches, and surveys show that having an experienced professional coach in their corner helps good leaders achieve more.

Let me emphasize that last statement: experienced coaches help good CEOs and leaders, not those who are “successful” psychopaths with highly complex narcissistic issues.

I should know: I’ve been in the executive coaching business for two decades, and I’ve worked with young, unpolished entrepreneurs who simply needed a little sanding around the edges, and I’ve also worked with egomaniacal mean men. Only in the rarest of the latter cases did we make significant, sustainable headway.

Tools exist for making any one of us more accountable, but forcing people to use these tools—even if they themselves claim they are up for change—can be challenging. Not many of us can easily open up a part of ourselves and allow others to sit in judgment. Entertaining the idea of change is one thing—being forced to do things differently based on feedback others are giving you can be anathema, particularly to entrepreneurial men who thrive on control.

Most leaders today recognize that if they want to be considered “modern,” they’d better step into the coaching and self-evaluating ball game. That said, how do we advise employees who have information about unethical or illegal behavior in the higher levels on how to proceed without fear? Transparency for transparency’s sake does no good unless each and every employee feels they can offer the truest feedback and criticism. But in organizations led my mean men, it’s a sure route to HR for the exit interview.

It’s clear we need to also address how to better advise CEOs and boards about handling reports of unsavory or illegal misconduct. We’ve seen in the news what happens when powerful people get tossed a damaging report only to then juggle it like a hand grenade—take Dov Charney and the American Apparel case for example. Talk about a story with excessive shrapnel.

So what took everybody so long?

One person—whether he or she is reporting misconduct or is the board member taking note of it—can make a difference. In all my years of coaching CEOs and advising boards, I’ve found it exceedingly rare that any serious concern finally being reported has not already long been on the minds of other employees and executives. All it takes is one person to get up the nerve to act, and the situation, if handled properly, can then move quickly and directly into action against the perpetrator.

Too many boards wrongly assume that the absence of complaints means that all is well. I am often called in on these cases after employees reached their limits and reported to external parties. Boards must invite transparency before it’s too late. They must reach out, ask questions, and encourage dialogue. In the age of the web, sure, powerful founders and CEOs can spin stories and create impressive branding to match their narcissism. But the web is also gaining power as a mouthpiece for employees. Glassdoor is only one of many websites that invites people to anonymously share the pros and cons of where they work and whom they work for. Leaders can snub sites like Glassdoor.com if reviews are horrific and may even go on a witch hunt in search of the employee who posted about the SoB CEO, but that typically leads nowhere. And despite what I said in the opening of this post about media sellouts, more and more online news outlets are making it their business to highlight controversial leaders.

Responsibility for creating a system that encourages constructive self-criticism belongs to those at the top. Responsibility for maintaining the integrity and usefulness of this system lies with every employee at every level. Firms that don’t allow for a transparent culture risk great peril.

Credibility and reputation are lost quickly in the Internet era. No firm is too big to fail. Once the story of Dov Charney’s firing broke, pundits came out of the woodwork, asking: Why didn’t the board do this years ago when they had more than sufficient evidence for cause? But why should a board failing to act surprise us? Charney was no fool when he put the American Apparel board together—he recruited members who had little experience running a major public company and was therefore able to keep them at bay. Board members have traditionally been left in the dark, and mean men are calculating—this does not surprise us.

The message that boards and mean men cannot help but hear right now is this: if you don’t fully embrace a transparent culture, the Internet will eventually out you. Some of your media ties will do the dance with you, but stories leak. Stories about assholes leak faster. The Internet has more muscle than you do, and you will only get away with it—whatever it is—for so long.

As of early June 2015, in response to Charney’s case against them for defamation, American Apparel delivered a restraining order against him, prompting one reporter to refer to him as the bad ex-boyfriend who just isn’t taking the hint and another to ask: “Does anyone know if American Apparel even makes clothes anymore?”

Is Mean the New Normal?

I love reading the comments I receive each week on my blog posts. Most reader reactions have been overwhelmingly positive, with folks from all over the country reaching out to share their stories of how they are struggling with mean men in the workplace and elsewhere. But of course, I’m also hearing plenty from the old boys’ club—“Hey, Lipton, quit your whining. This is the way business is done!”

These are the men who hate to see the status quo questioned and who are threatened by equality, openness, transparency, and civility. In other words, to not have unfettered control over other people drives them nuts. I believe that the more we call out mean behaviors and discuss how to extinguish them, the more those who rely on such tactics will eventually be left in the dust. I know the next generation of smart and worldly workers doesn’t take meanness sitting down, and many new companies—such as Google, Guidewire, and HubSpot—consider meanness already a thing of the past. But that old boys’ club isn’t going down without a fight. And in the meantime, we have our current reality to contend with—where there’s plenty of mean to go around.

Most of us shape our behavior according to cues in both our immediate environment and the broader culture. If you live in a small Midwestern town where strangers greet each other on the street, you’ll start to say hello. Likewise, if being mean, aggressively competitive, and outrageously rude seems not only okay but culturally encouraged, you’re more likely to be a jerk.

A number of recent polls indicate that Americans think authentic leadership is in decline. Authentic in this context means the leader has a clear vision and focuses on the big picture (rather than just obsessing over the next quarter’s results). Authentic leaders have strong values and beliefs, and their behavior is consistent with those values and beliefs. These are leaders who are guided by not only their heads but also their hearts: they show emotion and vulnerability and truly connect with their employees. Authentic leaders are results driven, but they put their organizations’ and employees’ interests ahead of their own. Too pie-in-the-sky? Take a look at Bill George’s powerful research. These leaders get results.

Americans now see the workplace as ruder and more competitive than ever, and they blame leadership for setting this tone. Other polls have found that fewer Americans than ever like their jobs or see their employers as trustworthy and loyal.

But you don’t need to go into the office to witness our nation’s cultural descent; just turn on your television. How many shows feature nothing but backstabbing, conniving, and catty contestants and characters? TV has taken the trend in crass far beyond Donald Trump’s “You’re fired!” Now, Chef Gordon Ramsay reams nervous chef wannabes. Real housewives from every major US city engage not just in catfights but in full-fledged brawls. Investors on Shark Tank have themselves a ball ridiculing striving entrepreneurs’ start-up ideas.

The level of public brutality, shaming, and shamefulness we mindlessly ingest today would have been unthinkable during the days of Norman Lear’s merely sarcastic sitcoms. Even (the late) Tony Soprano, a mafia man for crying out loud, contextualized his meanness—and was psychologically troubled by it. In sports too, look at our so-called heroes. From doping dramas to cheating scandals to the rampant domestic violence in a number of sports—it’s not a pretty picture.

What messages are we sending our kids about consequence and reward when we laud these people? It’s no wonder that a 2012 survey of high school students found that 57 percent agreed with the statement: “In the real world, successful people do what they have to do to win, even if others consider it cheating.”

We’re spending millions per year in our schools to preach the anti-bullying message to kids—and how is that going? How will it play out when they get to the workplace?

A ruder society brings everyone down. Nobody wants to be the nice guy wearing his sunscreen and sun visor in the shark tank. Nobody wants to be the chump who dots every i and crosses every t when everyone else is cheating and getting away with it. Mean men can, and do, point to the harsh world around them as an excuse for their actions, and so mean begets mean in a never-ending cycle.

Prominent psychiatrists Harold Greenwald and Nathan Ackerman saw psychopathy as a “contagious and virulent” social disease. Greenwald noted that a few of his trainees had even asked if he could help them “become” sociopaths, saying they would like to learn how to do whatever they pleased and not give a rat’s ass about everybody else.

Sure, we might all appreciate the supervillain in the movies or in our favorite novel. Leonardo DiCaprio makes a handsome wolf. Mad Men’s Don Draper oozes charisma. And maybe enjoying one cutthroat TV show isn’t enough to turn a person into an aggressive a-hole. But the problem is, there’s too much adoration of jerks. Even worse—studies find we actually give jerks power.

In Jerry Useem’s recent article in The Atlantic, “Why It Pays to Be a Jerk,” we meet Darren Dahl, a professor of marketing and behavioral science at University of British Columbia. Dahl reports having entered a high-end retail store one day not quite looking high-end himself. When the saleswoman in the shop looked him over and shook her head, Dahl didn’t leave the store—instead, he made purchases he hadn’t intended to make. After berating himself, Dahl then wondered if other people would open their wallets in the clear face of rudeness too.

I wish I didn’t have to report what he discovered: “When it came to ‘aspirational’ brands like Gucci, Burberry, and Louis Vuitton, participants were willing to pay more in a scenario in which they felt rejected.”

Maybe shopping for luxury brands isn’t your thing, but the point is this: mean men don’t operate in a vacuum. Something is operating deep in our psychology in the way we react to and actually succumb to them.


I want to hear from you, commenters: Why are we so drawn to mean?

When Entrepreneurs Get It Right

The conversation inside the boardrooms and offices of companies that consistently make Fortune’s 100 Best Companies to Work For has moved well past why abusive leaders shouldn’t be tolerated—they just aren’t.

Instead, smart and successful leaders focus on cultivating employee engagement, which results in greater loyalty, reduced absenteeism, increased reliability, and better job performance. This isn’t merely driven by a feel-good human relations philosophy; it’s data driven, and studies conducted over the past five years build a bulletproof case for this approach.

Researchers are finding that the new generation of top talent expects nothing less than to be valued. They expect to work for someone who not only invites their input and allows them to solve problems creatively and independently but who also is willing to share the spotlight and loosen up the confines of the traditional hierarchy.

At the core of this mindset is loosening the control held by those at the top. I’ve noted in past blogs how mean men need control, often an obsessive and counterproductive level of it. This flies directly in the face of what millennials are seeking from work.

Forty-one-year-old Guidewire CEO Marcus Ryu is an excellent example of this new breed of leader. He runs his organization in a way that ensures “the right answer wins,” no matter where it comes from in the company. A result of this guiding core principle, Ryu says, is that important decisions “are virtually always decided by consensus, by all the relevant key parties.”

Guidewire’s zero tolerance for what Ryu refers to as “two-facedness” means that a tyrant cannot sneak in using charm as a guise, or if one does, he faces “strong and instinctive pushback from his peers.” And guess what? The company has proven that mean men aren’t necessary to driving a successful business: Guidewire’s stock has more than doubled since going public in 2012.

Respect and trust are critical to a civil company culture. CEOs like Brian Halligan of HubSpot—which was named best midsized company to work for in Boston in 2010—talk the talk and walk the walk. To start with, they treat time differently. Employees are encouraged to work the hours they are most productive, and there is no vacation policy—meaning Halligan essentially is saying to his employees, “I trust you’ll know when you need time off, you’ll take it, and you’ll return refreshed and ready to give this company your all.” In other words, “I entrust you—the employee—with the control to determine what’s best for you and the company.”

Google, of course, is often at the top of Fortune’s famous list, coming in No. 1 for 2015. The tech giant also regularly tops Universum’s “Talent Attractive Index,” which surveys thousands of American college and graduate students about where they would like to work. The current CEO, Larry Page, has a ninety-five percent approval rating on Glassdoor, and over ninety percent of employees would recommend working at Google to a friend.

Mean men, with their overabundance of narcissism, are too infatuated with their own vision to ever cede the kind of independence stronger leaders encourage. Rather than a collective vision that others can rally around, it becomes one man’s manifesto. By placing profit over purpose, mean men often crush employees in a senseless grind. They end up not only losing talent; the reputation they develop repels it. Ultimately, the paradox becomes the actual compromise of profit because of employees’ diminishing motivation and ability to innovate.

On the other hand, I’ve found three key traits that distinguish well-liked and organizationally successful entrepreneurs from their tyrannous peers. “Civil” leaders are

  • One aspect of successful leadership requires embracing the reality that employees’ needs vary. One size does not fit all. One small but illustrative example: rather than offering an employee a generic gift card, for example, find out what the employee’s favorite shop is and buy them a gift card there. No sense giving a vegetarian a hundred dollars to spend at Ruth’s Chris Steak House. Civil leaders scale this concept and find strategies large and small to find ways to accommodate their employees rather than simply saying, “It’s my way or the highway.”
  • They give accurate and timely feedback on specific accomplishments or initiatives, showing employees they are interested in their unique contributions, even if they were not ultimately successful. I’ve found in my client work that most organizations could stand to do a far better job at creating cultures where continual feedback is the norm, rather than the exception.
  • All-inclusive. They take time to recognize the role that behind-the-scenes people and teams play, knowing it helps instill in them a sense of ownership and pride in the business. Think about how David Letterman used to turn the camera on the cameraperson.

Great leaders treat their employees with civility, and they are also united with their peers. Though the leadership team may be spread out across the country, they try to spend time together outside the office. Whole Foods CEO and cofounder John Mackey found that this type of bond leads to a high degree of trust, better communication, and a willingness to work things out when problems and disagreements arise.

It makes sense that when the most senior members of an organization are civil, it trickles down. When a big challenge arises, they’ll be ready to analyze it from multiple perspectives—rather than go into “turf war mode,” while everybody on the sidelines watches and wonders, Are these people doing what we are supposed to aspire to?

As entrenched as mean-man culture can seem, these new CEOs are showing a better way forward. And that’s a fact.

Can We Protect Those Who Confront Mean Men?

We’re all privy to the dramas of mean men as they unfold in the media, but what about when those offenses happen closer to home? What if it’s you or one of your colleagues suffering at the hands of a mean boss? How do you call them on it . . . and who do you call? What may be the consequences of blowing the whistle? The intricacies of whistleblower protection in the United States came to the public’s attention in 2002, when the exceedingly bad behavior of a group of rogue top executives at Enron begat the Sarbanes-Oxley Act of 2002. This act provides protection to employees who decide to blow the whistle when they have evidence of illegal conduct.

Whistleblower legislation is not new. The Whistleblower Protection Act of 1989 covers federal whistleblowers; the Sarbanes-Oxley Act of 2002 covers employees of publicly owned corporations; and in 2014, protection was significantly widened by the US Supreme Court to include private corporations functioning as subcontractors to publicly owned firms.

Still, all this legalese provides little comfort to the individual who is working in an organization that fails to meet these criteria for protection.

The ethics violations that are most frequently reported are not confined to obviously illegal acts such as financial fraud or safety violations. The Ethics Resource Center notes in its 2011 National Business Ethics Survey that the top unethical workplace behavior cited was misuse of company time. The second and third most frequent forms of misconduct reported were abusive behavior and lying to employees.

Patricia Harned, the center’s president, says that although abuse is not often labeled unethical, it is the number one reason people leave their jobs.

It gets worse.

Whistleblowing is on the rise, but so is retaliation. According to the Ethics Resource Center’s report, more than one-fifth of employees interviewed—two times as many as reported in 2007—said they had experienced negative consequences for reporting workplace misconduct. Some were simply given the cold shoulder, while others were passed over for promotion.

And it gets worse still: in 2011, 31 percent of whistleblowers said they received physical threats when outed, compared to 4 percent in 2009.

Retaliation against whistleblowers doesn’t just threaten individuals: it threatens our culture. To curb this egregious behavior, we must attempt to do all of the following simultaneously:

  • create a system and a process that fosters the exposure of abusive behavior
  • protect the whistleblower
  • ensure that the information gets to the proper authorities

One major obstacle to employees of entrepreneur-driven firms safely and securely naming or ousting mean men is that they have no “big law” backing. Many of these firms lack a strong internal system of checks and balances, and higher-ups simply don’t know what’s going on day to day in the ranks. In these cases, implementation of a 360-degree review or upward review process, where employees rate their managers, can help.

In 2013, I was asked to consult for an aggressive sales-driven firm with a mean entrepreneur at the helm. This man hoarded as much control as possible, and in the arrogant style typical of so many mean men, he believed he couldn’t lose.

A few years earlier, he had created a board that he planned to use whenever he needed to. Believing that his new board members would be happy simply to take a directorship fee and add some gravitas to meetings, he was shaken to discover that, in fact, they had a very low tolerance for behavior that could damage their company.

When word about his toxicity began to trickle in from reliable sources, action was taken. I helped set up a full management assessment process, and the company swiftly kicked this individual to the curb. Nobody has looked back since.

Another organization I worked with recently was founded by a brilliant entrepreneur who many considered demonically possessed by the will to achieve. He worked nonstop in a cutthroat industry, and yet, unlike our arrogant control freak above, this man expected and fostered civility. He promoted the notion that if you treat employees with respect, they’ll do their best.

This man wasn’t threatened by the idea of implementing a system of checks and balances; in fact, he invited me to create one that was anchored in the values he aspired to for his firm. Employees participated enthusiastically because they felt safe and empowered. The culture quickly became even healthier, with everyone, literally, reaping greater net profit.

There is no singular silver bullet to address mean men who are in positions of power. Context-specific solutions work, but they must be organization-specific and leadership-specific as well. Clarity about the values that undergird the firm’s culture, along with a zeal for actually instilling those values, must exist. Consequences for breaching civility must be meaningful in order to bring about cultural change.

Leaders who tend not to play well with others tend to play even worse when cornered or exposed. And according to the numbers above, these leaders are getting away with committing abuse upon abuse now more than ever before—despite whistleblowing legislation and the increased public awareness of bullying.

Setting up better internal systems of checks and balances will help ensure that whistleblowers do report. How can we expect brave whistleblowers to put their careers—and sometimes even their well-being—on the line if we don’t have their backs?

The deeper issue here, however, is the culture that permits these abuses to run rampant to begin with. When mean men are excused for egregious behavior by their boards as long as they have a solid bottom line, when they’re given a pass from the media for as long as their success holds, and when we explain them away as fragile, emotional geniuses, we’re giving them the green light to treat people however they see fit. And we all need to blow the whistle on that.

How Civility Breeds Success

Last week, I wrote about why mean is not effective in the workplace. But is the opposite equally true? Is a harmonious, civil workplace beneficial to a company’s bottom line? It would appear that it is. For the past eighteen years, Fortune magazine has run an annual list of the 100 Best Companies to Work For in the United States, the results of which have become a playbook for building trust and employee engagement. The firms that make the list each year show consistently impressive financial outcomes, typically far better than their industry counterparts. Overall, the 100 Best also grow at a faster clip and have significantly lower turnover in side-by-side comparisons with comparable firms.

So what gives? Is it tangible factors like child care, free snacks, a gym, and other benefits offered by places such as Google, Genentech, and Intuit (which all consistently score within the top ten)? Certainly employees appreciate these perks, but the true common denominator is that all of these firms manage—in many cases obsessively—their workplace cultures and demand a high level of civility.

So how do highly effective entrepreneurs shape the culture that enables these firms to become rockets for growth?

Trust and Openness

Spend a week in Ann Arbor, Michigan, and you’ll inevitably find yourself at one of the Zingerman’s businesses. Originally a traditional Jewish deli, Zingerman’s was founded by Paul Saginaw and Ari Weinzweig, who realized early on that growth was dependent on figuring out how to ensure that every employee thrived at work.

Their brand is now known nationally, and what they call their “Community of Businesses” has grown to include imported gourmet foods, a bakery, a creamery, and a second restaurant (Zingerman’s Roadhouse). They’ve also expanded their brand to include a mail-order catalog, coffee, catering, and more. By 2012, the combined revenues were coming in at $45 million.

Wayne Baker, a management professor and chair of the University of Michigan’s management department, has written several case studies about Zingerman’s and its approach to achieving sustainable growth. He found that Zingerman’s shares enormous amounts of critical information with employees; teams within each unit see exactly how their division performs on a weekly basis.

They are also explicit in their intolerance of incivility. Leaders are expected to treat employees with the same high standards of respect that the employees are meant to uphold with customers. Zingerman’s has built an environment where leaders set the tone and serve as role models.

Another key to the company’s success is that each unit has a managing partner who owns part of that business. “They make the push to go for greatness,” Weinzweig says, and they operate as one business with “semiautonomous units.”

Zingerman’s management philosophy has been so successful that they decided to start a management-training company in 1996 called ZingTrain to help spread the word. The program includes such seminars as “Fun, Flavorful Finance: Why Our Dishwashers Know Our Net Operating Profit.”

Emotional Intelligence

Emotional intelligence is essential in the critical moments of a start-up. Research shows that when the status quo needs to be challenged, emotionally intelligent employees speak up more frequently and more effectively. They are also more likely to speak up—while keeping their anger in check—when colleagues are treated unjustly. And their ability to express enthusiasm helps them avoid appearing threatening to leaders when bringing new ideas to the fore. Great leaders value these employees and don’t use their own often formidable emotional intelligence to manipulate others, as mean men like Peter Arnell do.

We can see the benefits of emotional intelligence in action by looking at founders of successful companies who remain in leadership positions. Sergey Brin and Larry Page of Google are prime examples. The two founded Google while still in their twenties and were mature enough to see early on that they needed a seasoned CEO to help lead the company. But they wanted a CEO who would also value and nurture the culture they were creating at Google, a culture that valued people’s individual creativity and was supportive of their personal goals—for example, by allowing engineers to spend twenty percent of their time working on their own projects. Eric Schmidt fit that bill, and together the three men created a culture that highly talented people found empowering and appealing.

Eventually Schmidt stepped aside, and now Page is CEO of Google. I admire Google for growing so quickly while holding firm to its original values. Google’s ability to quickly grow its highly complex product and service offerings on a global scale, with an organizational structure of mind-numbing intricacy, and remain a place where employees feel valued and empowered is incredible. Full disclosure: Google has been a client of mine, though I cannot say that I often walk away with such a high opinion of leaders I’ve worked with as I did with these guys.

Facebook has a similar story. Mark Zuckerberg was very young when he cofounded it and recognized his need for growth in certain areas. He has reportedly worked hard to develop his emotional intelligence, both with executive coaching and help from Facebook’s COO, Sheryl Sandberg, a leader renowned for her combination of smarts and civility.

Zuckerberg’s position at Facebook is secure given his stock holdings and the structure of Facebook’s board. Whether he needs to or not, Zuckerberg values civility and he’s consistently ranked as one of the most well-liked CEOs in Silicon Valley.

Emotional intelligence can be a double-edged sword. It’s vital for any leader to recognize, understand, and manage emotions, but a strong intuition about others can be used toward diabolical goals. So, while companies like American Apparel fight tooth and nail to keep their founder out, the leaders who learn the value of civility may spend their entire careers atop the company they built.

Why Mean Doesn’t Work

Ruthless and abusive leaders are often defended on the grounds that they produce results. Yes, a few eggs get broken, but the omelet comes out great. Profile after profile of Steve Jobs, Charlie Ergen, and Harvey Weinstein note their tough personalities before breezily moving on to the good news: a growth in profits, a big uptick in new satellite TV subscribers, Academy Awards, et cetera. Despite these well-worn examples, there is growing evidence that mean isn’t effective and that unrelenting incivility in the workplace can have disastrous effects on a company.

It Hurts the Brand and Drives Away Customers

Most of us think twice about patronizing companies that treat their employees badly. University of Southern California marketing professors Debbie MacInnis and Valerie Folkes set up an experiment in which half the participants witnessed a supposed bank representative publicly reprimanding another for a minor infraction such as incorrectly presenting credit card information. Only twenty percent of those who’d seen the encounter said that they would use the bank’s services in the future, compared with eighty percent of those who hadn’t. And nearly two-thirds of those who’d seen the exchange said that they would feel anxious dealing with any employee of the bank. The results were not affected by the employee’s competence, whether the reprimand was public or private, or even whether the employee had done something questionable or illegal, such as park in a disabled spot.

Research also finds that abused employees often pay the ill will forward. In a poll of eight hundred managers and employees from seventeen industries, twenty-five percent of workers who’d been on the receiving end of incivility admitted to taking their frustration out on customers.

It Undermines Morale

There’s a growing body of empirical research that shows just how much tyrannical behavior can undermine morale. The poll mentioned above comes from a 2012 study in the Journal of Applied Psychology, which documented the full range of ways that incivility can undermine morale, and the results are striking. The poll showed these findings among workers who’d been on the receiving end of incivility:

  • 48% intentionally decreased their work effort.
  • 47% intentionally decreased the time spent at work.
  • 38% intentionally decreased the quality of their work.
  • 80% lost work time worrying about the incident.
  • 63% lost work time avoiding the offender.
  • 66% said that their performance declined.
  • 78% said that their commitment to the organization declined.
  • 12% said that they left their job because of the incivility.

It Sabotages Teamwork

Effective teams are crucial to successful organizations, but mean leaders tend to sabotage teamwork in a variety of ways: from creating a hostile environment to pitting employees against each other to turning a healthy competition into a toxic internal feud. Internal schisms can be extremely damaging to companies, and they’re more likely to emerge under a Machiavellian leader who takes a dog-eat-dog view of the world.

If employees feel as though they are in opposing camps, it’s very difficult for them to get any clarity about an organization’s overall mission or goals, which stymies successful strategic planning.

It Drives Away Talent

However unethical it is, a fast-food restaurant, retail store, or other commoditized service may be able to get away with an authoritarian workplace—with mean leadership—because these types of businesses don’t have to compete as hard for their employees. But it’s a different story in companies that need to recruit workers who are in high demand.

These days, Internet sites, like Glassdoor, that allow employees to dish dirt anonymously can provide a window into the company culture. Spend a few minutes on Zynga’s page, for example, and you won’t want to work there, particularly once you know that the founding CEO who is responsible for that culture is back in the saddle.

Toxic workplaces don’t just repel talent, they hemorrhage it, and this can be even more damaging to a company’s bottom line. If a top engineer or executive walks away at a crucial moment, a company can face big problems in terms of developing products and following through on initiatives. That’s all the more likely to happen in industries where the competition for talent is intense, and headhunters are constantly trying to get sought-after workers to jump ship for the promise of higher pay or a better work environment.

It Scares Away Investors and Partners

It’s not just employees who may steer clear of companies run by mean men but also investors, partners, and other players—the kind of powerful allies that enable companies to grow or can provide for a lucrative exit for the CEO.

These players understand that organizational culture is paramount in terms of future growth and profitability. They know how much it affects employee morale, which in turn affects creativity and productivity. If a company has a reputation for being a snake pit, potential investors or acquirers may decide to stay away.

It Blocks Innovation

Mean leaders can undermine or block innovation—crucial to all successful companies—in different ways.

First, their need for control can make it hard for those below them to take initiative. Mean men don’t build up and empower others; they tear them down and leave them feeling frustrated and impotent.

The drive for control can block innovation even more directly when a leader stops new projects that threaten their vision for the company or their status within it. Henry Ford infamously smashed the prototype of a new car that his people had developed when he was overseas and away from the company.

Abusive leadership can undermine creativity in other ways too. Steve Jobs is famous for being an innovator, but he was also famous at Apple for squelching new ideas. People think twice about freewheeling brainstorming when the reward is harsh ridiculing of their ideas.

Free-Agent Nation

There have always been narcissists out there, but they weren’t always able to run amok quite as they do now. Decades ago, the road to success mostly went through large organizations. In our current culture, however, individualism reigns. From CEOs to athletes to actors, we live in a world where the self-made man is king, for better or worse. For the would-be titans of yesteryear, succeeding in business typically meant climbing to the top of a big corporation and learning to work with—and be subordinate to—others along the way. When William H. Whyte wrote his 1956 bestseller The Organization Man, many of the characteristics of an entrepreneur could be a serious liability for an ambitious young businessman. In the postwar era, the vast majority of career opportunities were with large companies where you were expected to take orders from others, follow procedures, and keep your impulsivity in check. In those days, success meant finding a place to call home, rising within its ranks, and retiring with a gold watch decades later. Big business didn’t only run the corporate world; it ran other spheres as well. Top athletes were essentially owned by their sports teams, musicians and actors were essentially owned by their studios, politicians were beholden to party bosses, and nearly all reporters were on the payroll of media corporations.

In today’s “free-agent” culture, however, far more people are in charge of their own careers and destinies. Sports stars jump from team to team, directors and actors have their own production companies, politicians have their own unaffiliated PACs, and musicians become famous on YouTube rather than via a studio. And in business, a bright twenty-five-year-old with a good idea can raise millions of dollars, completely skipping over the dues-paying and hoop-jumping of corporate culture.

The transformation of the business sector has been especially profound, with the explosion of entrepreneurship over the past few decades reflecting a number of changes in the economy.

The shift away from manufacturing to an information and services economy has greatly lowered the cost of doing business and dramatically shortened the time frame for growth. Creating goods once required building factories filled with machinery, employing lots of workers, and sourcing a steady supply of raw materials. Now high-value goods can be created by smaller groups of technologists or by those sitting in front of computers, such as programmers and designers. And when actual physical goods do have to be produced—e.g., consumer electronics—the process is cheaper and far more flexible. There’s no need to build your own factory when you can outsource production to someone else, particularly if you can find someone in a country with rock-bottom labor costs.

A second shift is the availability of capital. A single individual with a good idea can now mobilize tens of millions in venture capital money to pursue that vision. For those willing to take risks and think big, the barriers to entry are lower than ever. And they continue to lower as innovation rushes forward. The Internet companies started in the 1990s were much cheaper to scale up than were the software companies created by people like Bill Gates and Larry Ellison in the 1980s. In turn, companies like Facebook, Twitter, and Zynga that rose during the most recent tech boom were even cheaper to get up and running because of developments like cloud computing.

And so what of the company man of the 1950s and ’60s? The employee who is a steadfast team player, committed to the glory of the organization rather than his own? There is the sense now that this is the path of the boring and unimaginative. If you’re so great, we ask, why are you working for someone else?

Of course, many people were unhappy with the rigidity of midcentury corporate culture, not to mention how unwelcoming it was to women, gay people, and minorities. There are more opportunities outside of big institutions than ever before, and that’s good news for many of us. But have we thrown out the baby with the bathwater in the pursuit of freedom? Do we now put the self-made man on such a pedestal that we forgive all his shortcomings, however destructive?