The Company Culture of Talking Behind Employee’s Backs

This is among the most malodorous and insidious methods of destroying a company’s culture.  The rumor mill among employees can be nasty, but when executive management practice it, and live by it, a company’s culture will be completely and absolutely destroyed.

This is fundamentally a problem of a lack of respect for people.  If the CEO is the leader of this insidious behavior, then the Company is done, …over, ….and finished – before it even begins.

The sad reality is that everyone participates in talking behind the backs of their co-workers.  A TV program like “The Office” would not be as popular as it is, if this were not true.

Obviously, there are different forms and different degrees of talking behind the backs of co-workers.  I think that we can all agree that when a CEO sends a note to a partner, telling that partner that a member of the management team has cancer (whether it is true or not), so that the CEO can elicit sympathy for himself and the Company, that this has crossed the line.

So, what should you look for and what should you avoid?

1)      When a member of management talks behind the backs of his subordinates, in order to maintain his control, then that management team member must be terminated – regardless of how valuable he is perceived by the CEO.  When a management team member conducts a “witch hunt” to try and determine where perceived “leaks” occur, that management team member must be terminated – immediately.  Every single day that this person remains in the Company is another day that Company morale sinks, and cannot be re-built.

2)      When the CEO constantly engages in loud shouting matches, and criticizes the performance of any employee in front of other employees, then this company should be avoided at all costs, as a positive Company culture will not exist, and cannot exist.

3)      Years ago, I visited the CEO of a company to learn more about his company and the opportunity in front of it.  I was greeted warmly by the CEO, and escorted to his office for the meeting.  However, on the way to the office, I noticed several employees who quickly averted their eyes and shuffled away from us as we walked to his office.   We had not even begun our meeting, and I already knew that this was a company that had culture problems, and would have significant performance problems.

4)      When a company promotes their culture as “open and honest”, then it better be open and honest.  If the CEO practices anything that is less than open and honest, then everyone will see through the fakery, and mimic the same behavior.  People are smart and will see and understand the double standard in seconds.

So, how do you create a company culture that is envied by employees and management alike?

5)      Employees don’t need to be constantly given cash bonuses and expensive electronic gifts as incentives to do their work.  People are genuinely grateful for kind words, and the occasional Friday afternoon beer/wine party in the office.

6)      People look to be part of close-knit and cohesive teams.  Military personnel will frequently describe to you how they depend on the team members of their unit for their lives.  The situations at a for-profit company may not be as drastic and life threatening, but the need to depend on your co-workers, and the requirement that they get their portion of the job accomplished on time, and correctly, the first time, is essential.   If you can’t depend on your team members, for any number of reasons, then that team member must be replaced.

7)      We really like the concepts of on-boarding a new employee as practiced by a local company, Bazaarvoice.  As a new employee joins, they are sent on a scavenger hunt across the company, and sent around to find various employees in order to find the answers to trivia questions about the company’s history, and the history of various employees.  This builds an “espirit de corps” within the employees, and allows everyone to get to know each other quickly, and in a fun way.

8)      Lastly, as a member of management, you must speak open and honestly to your staff and employees.  Management must be willing to do any job at any time in order to get a job accomplished.  If a subordinate employee sees that you are helping him do his job in order to get the overall job accomplished, this will help to build a very strong team.

9)      Even as a company gets very large, the CEO and executive management must constantly work to get to know the staff.  If they don’t, they will be out of touch with what is going on within the bigger organization.  As a result, all the hard work that went into building the company from the very first customer, will be lost.  While the company may continue to thrive for a long time afterwards, the sense of company purpose will have been lost.

In summary, it is critical that any new startup work to maintain its sense of purpose.   It is the fundamental reason that the company succeeded in the first place.  Whatever you do as CEO, treat all your employees with complete respect.  The CEO may be the leader with the vision, but the employees are the ones that will build any company into a success.

About Richard Piotrowski, CFA

Richard Piotrowski, CFA, is a formerly a #1 ranked securities analyst, who has 20 years of experience building, dissecting, and fine tuning presentations, business models and valuation models of all kinds. The experience has been gained working in the investment community on both sides of "Wall Street", on "Bay Street" (Canada), as well as on "Main St." as Chief Financial Officer, Chief Operating Officer, as well as Evangelist and Marketing Director, where he focused on building messaging for solution sales opportunities based on value positioning, high ROI and fast payback. Richard joined Canada’s investment banking community in the early 1990s as an analyst following technology companies. He was recognized within two years by the Street, and was ranked "First" for Quality of Research in the survey of institutional investors conducted by an independent advisory firm – Brendon Woods. Richard was also the founding member of the internet technology research practice at two boutique investment banks.
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