Reprinted from Leaders Eat Last: Why Some Teams Pull Together and Others Don't by Simon Sinek by arrangement with Portfolio/Penguin, a member of Penguin Group (USA) LLC, Copyright © 2014 by SinekPartners LLC.
I am always struck when a CEO of a large investment bank is shocked to learn that there was a "rogue trader" in their midst who, in pursuit of personal gains or glory, made decisions that caused damage to the rest of the company. What else should we expect from a culture that reinforces and rewards self-interested behavior? Under these conditions, a CEO is basically gambling that their people will "do the right thing." But it's not the people who set the course. It's the leadership.
Bad Cultures Breed Bad Leaders
Kim Stewart was just one of the many employees who suffered as a result of a toxic environment. She knew on her first day at Citigroup that there was something wrong with the culture. "I remember I came home and told my husband, 'I have to limit the number of smart things I say.'" The problem wasn't that she thought her boss or her colleagues were stupid, but rather that they felt threatened (a perfectly valid feeling to have in an organization with a weak Circle of Safety). There seemed to always be an air of suspicion and mistrust at the office.
Stewart recalls that when she first joined the investment banking division in 2007, she immediately set out to understand the way the company closed certain kinds of deals. She went to her boss and asked him to confirm her understanding of the process, which he did. So why was her first deal an embarrassing disaster? Stewart later found out that her boss, concerned that her success might threaten his own status, intentionally left out a key part of the deal-making process, ensuring she would bomb. It was as if he wanted her to fail in order to make his performance look better.
"At Citi," Stewart says, "the feeling was 'I don't want anybody to know as much as I do because then I am expendable.'" This is a behavior designed for nothing but self-preservation. It is a classic symptom of a cortisol-rich, unsafe culture where valuable information is hidden to advance or protect an individual or a small group of individuals even though sharing would benefit the others in the group and the organization as a whole. Everybody feared being one-upped by a colleague, Stewart recalls. Nobody felt safe.
And not because the company needed to make cutbacks; it was simply the culture.
It would be another year before the company would suffer enormous financial losses, leading to its rescue by the federal government, in large part due to an atmosphere of hoarding information rather than sharing it. One cannot but wonder how the financial crisis would have turned out had more of the banks had healthier, chemically balanced cultures in which the people didn't feel threatened by each other.
Of course, cutbacks did come eventually. In November 2008, the company had one of the single largest rounds of layoffs on record in any industry in history. On one day, Citi issued 52,000 pink slips, amounting to about 20 per cent of its workforce. Stewart's department was cut by more than half, down from 190 to 95, and bonuses were slashed. Once the dust settled, you would think the leaders of the organization would have been humbled. But they weren't.
Instead, the atmosphere got worse. Stewart recalls that in late 2011, a few years after the crisis, when the company was back in the black, her new boss at Citi, a managing director, arrived to introduce himself. He told the employees he was interested in only three things: revenue, net income and expenses.
Then he added privately to Stewart, "If you think I'm going to be your mentor and give you career advice, you're wrong." So goes the leadership, so goes the culture.
A Culture Protected
Most people are familiar with Post-it Notes. But what most people do not know is how they came to be. Unlike so many companies that develop products by imagining and trying to build them–3M owes the development of Post-it Notes, and so many of its other products, to one simple thing: its culture of sharing.
Spencer Silver, the scientist who is partially credited with the creation of the Post-it, was working in his lab at the Minnesota-based company, actually trying to develop a very strong adhesive. Unfortunately, he wasn't successful.
What he accidentally made was a very weak adhesive. Based on the job specs given to him, he had failed. But Silver didn't throw his "failure" in the trash out of embarrassment. He didn't keep his misstep a secret out of fear for his job or guard it closely in the hopes of someday profiting from it. In fact, the unintentional invention was shared with others at the company . . . just in case someone else could figure out a way to use it.
And that's exactly what happened. A few years later, Art Fry, another scientist at 3M, was in church choir practice getting frustrated that he couldn't get his bookmark to stay in place. It kept falling out of the page, off the music stand and onto the floor. He remembered Silver's weak adhesive and realized he could use it to make the perfect bookmark! And that was the birth of what would become one of the best-recognized brands in history, with four thousand varieties sold in over a hundred countries.
Innovation at 3M is not simply the result of educational pedigree or technical expertise. Innovation is the result of a corporate culture of collaboration and sharing. In stark contrast to the mind-set of leaders at some investment banks, 3M knows that people do their best work when they work together, share their ideas and comfortably borrow each other's work for their own projects. There's no notion of "mine."
In another company, Silver's botched formula might never have made its way into Fry's hands. But not at 3M. "At 3M we're a bunch of ideas," Fry is known to have said. "We never throw an idea away because you never know when someone else will need it." The cross-pollination of ideas – combined with an emphasis on sharing across product lines – has led to an atmosphere of collaboration that makes 3M a place where employees feel valued. "Innovation from interaction," is one of the company's favorite mottos. Employees are encouraged to present new ideas at internal Tech Forums, regular gatherings of peers from other divisions. One sure sign that all this collaborating is working is that more than 80 per cent of 3M's patents have more than one inventor.