A culture-change sentence

My colleagues and I have been busy with a series of culture initiatives, working with teams of people entrusted by their organizations to write the words that will hang on the wall and be pointed out as the essence of who they are. As they struggle to arrive at just the right phrasing, they tend to ask two defining questions: Is this aspirational? Or is it real? We like to steer them away from the dichotomy, toward: This is who we are when we're at our best.

Here's what that sentence does for you: It says that the culture you aspire to is not detached from your current reality. It's just not everywhere, all the time, in full bloom. If you travel around your company, you'll find your cultural ideals in play now and then, here and there, more or less. So we're asking you to step up in a big way, but not to step outside of what's real. We're aiming for consistency across time and place and uptake, to be "at your best" more often, in more places, with greater clarity.

It's the culture-change version of the (alleged) William Gibson quote: "The future is already here, it's just unevenly distributed."

Authentic voices #5

The history of an industry in one man's tale, that's what it was. My friend Doug Cassidy hooked me up with Ed Latek in the summer of '03. I turned on my digital recorder and Ed took it from there.

It was 1959, in the south suburbs of Chicago, when Ed's dad started a rental business on the side while finishing his career working on telephone equipment at Illinois Bell. "I'm a senior in high school," Ed says. "Mom runs the store during the day. I get out of school at 2 o'clock and go straight to the store. I run it the rest of the day and close up. Dad runs it on weekends."

Ed ran the store all that summer and then went off to St. Joseph's College in Indiana to major in accounting. In the middle of his sophomore year, the American Rental Association (ARA) brought its annual convention to Chicago and Ed cut classes to attend. He roamed the exhibition floor with lust for a Cub lo-boy tractor and an air compressor, among other things. His wish list grew to $10,000, which was about $10,000 more than he had. So he arranged a second lien on his dad's house.

After graduating with an accounting degree in 1963, Ed attacked the rental business for real. As he grew his dad's business into a multi-branch Chicagoland franchise, he was irritated by one thing: no one would let him borrow money using future revenues as collateral-- not the banks, not the finance companies, not the equipment manufacturers themselves. To Ed, there was not a surer bet in the lending business; if you bought $10,000 worth of equipment this year, you'd make it all back the next year, and that same equipment would continue to make money for you another 10 or 15 years. In the early 1970s Ed sold the family business and got ready to become the banker for the industry himself.

He started Reli Financial Corp., where he borrowed money from banks and loaned it back out to rental companies. At the ARA conventions, Reli was the only finance company on the exhibition floor. Ed describes it:

I had a booth that looked like a bank. When they opened the doors, everybody lined up at our booth. Every year I would take some of my bankers to the convention so they could see what we were doing. Every manufacturer in the world was there. And we were putting millions of dollars on the floor. By the time I got back to Chicago, I would have messages from the banks upping my line by two million, three million dollars.

In 1985 he sold Reli to a major insurance/financial services firm. He was ready to slow down, but the third phase of his business life was already kicking in. Before he knew it, he had structured a merger between two rental companies in Salt Lake City, done a couple of acquisitions in Southern California, found a buyer in upstate New York for a renter who wanted to retire, put together a deal in Houston. He was starting to look like an investment banker, and in 1990 he made it official it by forming Latek Capital Corp. In short order, he became the man in the middle of the consolidation wave, connecting the roll-up interests with the fragmented owners. In many ways he was undoing what he had spent decades putting together. But he was a money guy, and he understood how money worked:

It took us 40 years to get where we were as an industry, and in three years it turned upside down. All the leadership of our industry was taken off the table. No matter how much you wanted to hang onto your business, you couldn't do it. You had to sell. There was just too much money on the table.

It hasn't been the happiest of times for Ed, but he has a healthy respect for extracting value the founding generation never imagined.

When I started out, everybody in the business was my father's age. And they were all like fathers to me. Now, someone I've known a long time calls and says why don't I stop by the next time I'm in the neighborhood. I know what that means. So a few weeks later I give him a call and tell him I'm coming to town. We go to dinner. We talk. We think out loud. We pull his financials together. We figure out what we think the value of his business is. We compute the tax implications of selling. We consider how it's going to affect the rest of the family. We both know he wants to sell. That's why he called in the first place. But now we have it all laid out and he says let's go ahead. So we develop the buyer. We educate the buyer on our industry. Then we finally bring them together. Those transactions take a long time. We're closing on a deal next week. I started talking to the owner over a year ago. After about six months I felt like I had a good reading on it. I put it together about a month after that. Here we are now, eight months later, finally ready to close. And I started financing this guy in 1981. I know him. I know his family. I find a buyer who's a good match. And that's what it's really all about.

Authentic voices #4

I met Juan at the boarding gate at Chicago Midway, July of '02, when he needed help understanding the Southwest Airlines system of boarding in groups. He said he was making his first trip ever to Los Angeles and asked if I was going there too, which I was. I wasn't looking for a companion though. I was traveling alone, and relishing the idea of curling up at 39,000 feet with a book and nothing ahead of me but three loosely planned days in the Ojai Valley.

Being the experienced SWA traveler, I size up the crowd and decide it's about half a planeload. So I walk two-thirds of the way back and take a window seat, figuring I'll have at least four rows of buffer between me and the rest of the pack. I have my shoes off, my book out, my stress level sinking fast -- when I see Juan breaking through the knot of bin-stuffers and striding toward me with a big grin on his face. He says he has come to sit with me, and not just in my row -- he plunks down in the center seat, elbow-to-elbow with me, surrounded by rows and rows of vacant seats. I could at least have said, "Hey Juan, take the aisle seat, so we have room to stretch out."

But instead I had a little talk with myself. I said, "Bill, you got yourself pretty attached to the way you thought this trip would be. Now the universe has delivered this man to you. Do not oppose. Take it as a gift." So I ask Juan to tell me his story. He's 43 years old, born in a village near Puerto Vallarta, now a Chicago business owner. Every summer he packs his wife and three children, ages 4, 13 and 17 into the van and drives straight through to Mexico City. From there they continue to Puerto Vallarta, where Juan likes to sit on the beach and stare at the waves. After several days by the ocean, they drive on to the village of his youth, where he used to have horses--and when he tells you that part, you know that on some level, he still has horses.

Juan likes the highway mode of travel. He's a little jittery about this jet. The night before, he had decided to cancel, but he didn't know how to tell the people who were waiting for him on the other end. A friend dropped him off at Midway and said, "Southwest? Only poor people fly Southwest!" But Juan is not poor, and his ticket is paid for by the manufacturer he is going to see.

For 14 years, Juan worked an 8-to-5 job and sold jewelry door-to-door on weekends. After a while, he was making more money on Saturday and Sunday than he was Monday-through-Friday. So he took the plunge and bought a jewelry store. He's been at it for 19 months, and it's been no piece of cake. He hadn't thought through the capital requirements. He started by calling the customary manufacturers and asking if he could buy $200 worth of jewelry at a time -- on credit. They all said no. Eventually, he cold-called a manufacturer he found in The Yellow Pages and they said yes. I ask him why this one said yes when all the others had said no. This is what he tells me:

They came to my store and watched me run my business for six hours. And then they said, "We believe you are an honest man." I started out buying $200 worth of jewelry at a time and paying them back in 30 days. Sometimes I didn't have the money and I would call them and they would say that's okay, pay us when you can. Now I order a kilo at a time. And finally they start telling me I have to come to see how they make the jewelry. They say, "You are ordering from a book. Someday somebody else gives you a book and then you don't order from us anymore. We don't know you. You disappear and we never see you again. So you must come to our factory. We send you a ticket."

That alone is not enough to get Juan on a jet plane. But about this time an uncle who lives in California starts calling him, telling him they have to see each other, it's been too long, almost 20 years. Juan says, "I can get a free ticket!" He calls the manufacturer, and to his astonishment, a ticket on Southwest Airlines arrives 12 hours later.

About 120 miles from LAX, Juan looks at me with a smile and makes a descending motion with his hand. With every foot of lost elevation, he is more relaxed. We cross over the Santa Annas and the LA Basin sprawls before us. I'm looking down on the grandstands, the paddock, the stables, the manicured dirt track of Santa Anita. Juan leans over me like the boy from the long-ago village and says, "Look! Horses!"

Authentic voices #3

I was working with restaurant owner/operators from all over the world as they rehearsed their stories about their "passion" for their work, which they would tell on stage in front of 12,000 of their peers. There were big stories, like the husband and wife team who had started some kind of charity for kids in -- it could have been Russia, but I'm kind of foggy on that. And there was a guy who did something with a clown somewhere in Latin America. And something from Japan, the details of which escape me. But most of all, there was this Norwegian, whose story I can still punch up in my brain, must be seven years now after the fact. It goes like this:

It was late afternoon on a Saturday. There was no one in the store except a small family quietly finishing their meal. I walked over and asked them if they would care for dessert. A little boy, about four years old, said he would like to have an ice cream cone. I said, "How would you like to make it yourself?" He said he would like that. So I took him behind the counter and found something for him to stand on. I showed him how the machine worked and handed him a cone. He held down the lever and filled the cone up. I watched him walk back to his mom and dad with a look of amazement on his face. To eat something that tasted so good, and that he had made with his own hands, was a special thing. He ate every last bit, and his family got up to leave. His mom and dad had already gone out the door when he stopped, turned around, pointed to me and softly said, "I will never forget you."

Authentic voices #2

Don't ask why, but I was riding in a pickup at the top of New Mexico through about three feet of snow to feed the buffalo at Vermejo Park Ranch, which today belongs to Ted Turner but back then was owned by Pennzoil--which allowed people like my client to use the old land grant for meetings. We were about two hours out when we found the herd. We threw some hay on the ground and then the driver announced that we had to travel on to a different pasture and feed this one buffalo who would be the object of a buffalo hunt in a few days. I asked him what that meant and he said a big game hunter was flying in from Dallas, and he specifically wanted to shoot a buffalo. They were not going to put the whole herd through such an ordeal, so the victim had been chosen and sent to the killing field.

A couple of hours later we came over a rise into a treeless bowl with a frozen pond at the bottom. An old buffalo stood there in the clearing, by the pond, facing into the winter wind. The driver, who was one of the hunting guides, stopped the truck about 100 yards from the animal.

I said, "So on the day of the hunt, he'll be hidden in the woods, right?" "No," said the hunting guide, "He'll be right there. He hasn't moved since we brought him over here." I asked if they would honk the horn, or make wolf sounds, or something, to at least try to make him run. And that's when he told me how it would all go down:

We'll stop the truck right here, just like you and I did. We'll look at the hunter and say, "There's your buffalo." He'll nod and get out and get ready to shoot. If he's a good shot and knows what he's doing, he'll hit him in the heart on the first shot and that'll be the end of it, nice and clean. But...I've yet to see that happen. Most generally, it goes like this. First shot hits the ol' boy in the flank, and he just looks around as if he was bit by a fly or something. Second shot'll get him in the shoulder and stun him a little. Third shot will bring him to his knees. And he'll roll over on the fourth shot and bleed to death. Hunter'll walk up and nudge him with his foot. The boys'll pick him up and in a few weeks the hunter will receive a mounted head for his trophy wall and some bison meat for his freezer.

We drove on down and dropped off some hay, and I watched as we motored away and never saw the buffalo move. I spent the rest of my day making plans with my client, his sales vice president, his chief marketing officer and his chief financial officer, and then the hunting guides came in their vehicles with the big knobby tires and drove us on back to Raton where the company plane was waiting to take us home.

Authentic voices #1

Twenty-five years ago I was doing a corporate video at a chemical plant on the Escambia River in the Florida Panhandle. We were waiting for the magic hour, when the sun would be low enough to light the plant at right angles. To pass the time, the videographer asks our host a throw-away question: "I'm not really worried about it or anything, but, say, just for example, if there were an explosion, what would we do?" To our host, it's clearly not a hypothetical question.

"If it comes from over there," he says, pointing to our left, "there'll be a gas that'll eat your lungs out. It's heavier'n air, and we're in kind of a bowl, you see, so run up that hill over there just as fast as you can go. Now if it comes from this other direction, there'll be a gas that's highly inflammable, and first time it hits a spark it'll be a rolling ball of fire. The river is that way. Make a run for it. If you manage to get there, jump in. Don't think about it. Jump in and keep your head low. Don't worry about the gators--they'll be gone."

The authenticity of his life-and-death counsel made an impression on me that hasn't dimmed over two-and-a-half eventful decades. I can still see the videographer's gaze, aimed at the middle distance in the direction of the river, his appetite for small talk satiated as we waited in silence for the light to be right to make beautiful images on videotape.

Which one of these is not like the others?

The assignment was to take five words and turn them into a statement of a company's culture. The five words were performance, people, leadership, connections and collaboration. Here's what we came up with:

We are a company that believes in performance as a foundation, leadership as a differentiator, people in their uniqueness and their commonalities, connections that unite us and collaboration as a way of life.

Which of these phrases is not like the others?

It's the "people" statement.

In the other four, the key word is linked to its usefulness to the company. Performance is a foundation that the company can build on. Leadership is something the company can use to set itself apart in the marketplace. Connections are important to help unify the company. And collaboration is how the company does things. But people? The company believes in their uniqueness and their commonalities -- how they differ and how they fit together. Are people a foundation to build on, or a differentiator? Maybe. But the statement of culture doesn't say anything about that. It just says we believe in you, in the ways you are different, and in the ways you are alike.

I wrote it that way on purpose and submitted it without any explanation. No one has said, "Hey, I see what you're doing there!" I like to think of it as a little treasure waiting for someone, someday, somewhere along the line, to sit down and seriously contemplate what kind of company they work for, and to stumble across this little discontinuity of syntax and suddenly feel better about everything.