Nice companies finish first?
More Mr. Nice Guy
Peter Shankman is a seasoned entrepreneur and the author of the new best-seller Nice Companies Finish First: Why Cutthroat Management Is Over – and Collaboration Is In. Citing everyone from Tocqueville to Harold and Kumar, he builds a case that the era of egomaniacal CEO-dictators is over, while benevolence and collaboration will guide tomorrow’s companies to prosperity.
Too good to be true? Let’s examine the evidence. Shankman offers nine traits of successful “nice companies.”
The self-interest of selflessness
Shankman starts with an important and pragmatic point: being a “nice” boss doesn’t mean being a pushover. Listening doesn’t mean relinquishing your ability to make final decisions. Empowered employees will work harder and stay at your company longer. The point of a more collaborative company culture isn’t just to give more; it’s to work together in a way that it mutually beneficial to employers and employees.
Talk to people in elevators
Shankman glowingly profiles a number of accessible CEOs and business leaders who make their employees feel valued; these companies have seen quantifiable improvements due to these efforts to promote transparency and teamwork. On the other side, he relays an anecdote about a powerful president/CEO who refused to speak to regular employees in the elevator. A few years later, the CEO was canned – which Shankman admits wasn’t a result of his elevator etiquette, “[b]ut the leader’s attitude toward Joe (and others) was part of his problem as a manager.”
This one is a slam dunk. Your industry is presumably more competitive than ever. Your customers’ expectations are shifting (as just one example: 42% of consumers expect a company to respond to them on social media within an hour). Big Data, in some ways, is really just another way of listening.
Corporate social responsibility
“In today’s world, people expect that companies will be good corporate citizens and that their leaders will exemplify stewardship by example,” Shankman says. “We want to feel that the products and services we buy are not only a good value, but also aren’t damaging the earth or harming our families.” He cites famous examples of brands like Patagonia, as well as smaller companies like a Kansas City pizzeria that uses fundraisers to boost its profile while also doing good for the community. For most businesses, there will be real value to a citizen approach. Still, Shankman overstates his case a bit – and overestimates the role of karma in Corporate America. The Fortune 500 list isn’t entirely composed of good stewards (to put it mildly).
The path to loyalty
When you have a position open, look within your own walls first. “It costs more and works out less successfully to hire someone from the outside than it does to develop talented internal candidates, according to recent research,” Shankman says. Make sure career development is a topic that’s comfortably discussed. You’ll never stop (or want to stop) employees from leaving to take dream jobs or to spend more time with their families, but you can certainly cut down on employees who leave to make lateral moves. Providing a path to promotion is obviously important, but so is identifying the dead weight on your team and to make sure that your worst employees aren’t inspiring your best employees to polish up their LinkedIn profiles.
Always – well, usually – look on the bright side
Shankman rightly notes that there’s some dispute about the value of optimism for a CEO. Optimism can fuel reckless decisions and embolden delusions of grandeur. But if you aren’t bullish about your potential, you need to seriously reevaluate. Perhaps it’s best to aim to be more of a hybrid – like an optimistic realist (or realistic optimist). Avoid pessimism like the plague it is. Especially if you’re in a management role, pessimism will poison the bloodstream of your company (or your direct reports, at the very least).
Serve the customer
No punches are pulled here. “Without stellar customer service, your business will die,” Shankman writes. He’s passionate about the subject; he even wrote a book all about customer service. The keys? Looking for unique and memorable ways to serve, deploying random acts of kindness and always looking for ways to connect on a meaningful individual basis with customers.
If no one is copying you or trying to encroach on your territory, it’s probably a bad sign. Let your competitors push you to improve your product or rethink your business model. Shankman delves into some examples of businesses competing against themselves and trying to break their own goals and records. He also credits companies who shake up their teams to allow for cross-pollination, much like the forward-thinking agencies and creative teams we’ve detailed.
Care, but only if you genuinely care
Nice Companies Finish First closes with a look at companies, business leaders and whistleblowers who have done “the right thing” even in the face of doubt, threat or other adversity. “Great leaders earn their reputations in times of crisis, not during times of prosperity and tranquility,” he says. He’s not just talking about crisis in the boardroom, but crisis in the community as well.
All in all, Shankman effectively builds a case for the bottom line benefit of “nice companies” that encourage collaboration, empathy and genuine interest in customers. It’s a good read for anyone who wants to reinvent their company culture in a meaningful way (sometimes company culture is reinvented in not-so-meaningful ways). I’m not entirely sold on the premise that “cutthroat management is over” – I still hear too many horror stories from my network – but hopefully it’s on its way out.
Do you agree that nice companies finish first? Or are you a tyrannical CEO who believes in profit-by-fear and wants to offer a rebuttal? We’d love to hear your thoughts.