Q&A with Ann Rhoades, author of Built on Values: Creating an Enviable Culture that Outperforms the Competition. Based on Ann’s years of experience with JetBlue, Southwest and other companies known for their trailblazing corporate cultures, Built on Values reveals exactly how leaders can create winning environments that allow their employees and their companies to thrive.
Overdrive: How integral is a company’s culture to its overall success and profitability?
AR: Every company has a culture, but a negative culture – where employees feel used up and spit out – works against your ability to succeed and make profit. You need a positive culture that empowers people to outperform the competition. High performers like JetBlue, Southwest, GE, Starbucks and Zappos, have a strong, distinct culture that employees are conscious of and use every day. Leaders need to keep in mind that companies like Pan Am, Eastern Airlines and even Enron had strong cultures in the beginning that ultimately became negative and failed their people.
O: What’s the best way to get your employees to buy into your mission and vision?
AR: As I outline in Built on Values, your mission and vision – what I call your values – must be built into every aspect of your business. The easiest way to make them concrete for your employees is to build them into a simple set of metrics that employees can have an impact on. These can be both corporate dashboard goals and metrics for each division or department of your company. You can then build games and even your reward systems on achieving these values-based metrics.
O: How can I maintain my company culture in the face of crisis?
AR: Realize that a positive culture is your best weapon for responding to a crisis. For example, in February 2007, an ice storm kept a plane full of JetBlue passengers on the runway at JFK for ten hours. Just days after the incident, JetBlue introduced a passenger’s bill of rights, the first in the country, offering customers increasing levels of cash compensation based on the length of any flight delay that is the fault of the airline. When we followed up with the passengers who had sat on the plane for ten hours, we found that 80 percent had a favorable opinion of Jet Blue even after that horrible experience and were still flying the airline. Eighty percent. Most of them said it was because of Jet Blue’s honest and transparent response to the situation, which arose from our culture. You may also use a crisis as the opportunity to revitalize your culture. In the face of plummeting performance, Starbucks’ CEO Howard Schultz closed all his stores for three hours in 2009 so that his people could recommit to living the company’s values and mission. And look at what his bottom line has done since then.
O: What are the top mistakes you see entrepreneurs make when it comes to creating a company culture?
AR: The absolute biggest mistake is waiting to “work on the culture” until your company and your product is established. In that case, you get culture by default rather than a culture by design. We were very lucky at JetBlue that we were able to consciously create a culture from scratch. We sat in a room—there were only ten of us at the time—and asked, “What do we want Jet Blue to do and what do we want to stand for?” We wanted a set of values through which we could consider every decision. We decided to build values around “bringing humanity back to air travel.” The best values are simple values, and you should have no more than five to seven, or people will not remember them. They are the way you get back to Business 101; they are the basic outline of what your company is about. If organizations are built around values and behaviors that support those values, employees behave the way you want them to almost automatically.
O: What did working at JetBlue and Southwest teach you about the importance of company culture?
AR: My work at those companies taught me that a positive culture is critical to a company’s success because it defines who they are, especially to customers. Southwest’s fun, warrior spirit culture has been transmitted to customers so they know what kind of experience they will have. In fact, they had no money for ads at first – their success depended on getting people to spread the word about their experience with Southwest’s culture. At JetBlue, I learned that it is critical to get employee groups involved in living the values of accountability and integrity that are basic to the airline’s culture. We knew we had succeeded when pilots came to us with ideas about saving money on jet fuel.
O: If there’s one thing you’d want entrepreneurs to know about company culture, what would it be and why?
AR: They should take as much time getting their culture right as they do with their products. If you do culture right, up front, you won’t have to have a wrenching change later when it becomes obvious that your culture isn’t working. If you don’t know what you want to be when you “grow up,” you won’t be able to hire the right people – you’ll just be guessing when you hire. Much more efficient is to do it right the first time and develop a conscious culture based on the values of your best people – your A-Players.