by Louis Carter
Sharing something as significant as values puts people In Great Company every time. The excellent benefit of values alignment, even beyond the EC it creates among colleagues and the company, is that it extends naturally to customers and other stakeholders in a way that drives performance and keeps everyone aligned.
ALIGNMENT OF VALUES: EXECUTIVE SUMMARY
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RESPECT
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Howard Behar shared his recollection of what I consider to be the iconic story of mutual respect and the example set by Howard Schultz at Starbucks. The story itself dates back to their early days of the company, and I want to tell it in Howard Behar’s own words to keep it in context and provide the full effect:
It was 1989, and I was the new VP of operations at Starbucks, and Howard [Schultz] was the 34-years-old CEO. One day I heard from a store manager—a young guy named Jim who had been with Starbucks nearly from the beginning. He called me to say, “I’d like to meet with you and Howard [Schultz].”
“Sure,” I said. “But maybe there’s something I can do for you, Jim. What is it?” Jim responded: “No, I really need to talk to both of you.”
I said, “Okay,” and promised to set up the meeting.
The day arrived and Jim came to the front desk. I got him, and we sat on the little loveseat in Howard’s office, and we made small talk while Howard finished up a phone call. Howard hung up, and he and Jim started talking, because they’d known each other for a while. Eventually I did what all A-type personalities do. I said, “So, Jim, what can we do for you?” Jim just looked at us both and said, “Well, I want to tell you that I’m dying. I’m dying of AIDS.”
This was in the early days of the epidemic, and we didn’t know a lot about AIDS. Was it a virus that was catching? What was it? A tear came down Howard’s face, and I sat there, kind of in shock. I had no idea how Howard would respond.
Howard said, “Well, Jim, what can we do for you?”
Jim told us: “I’d like to work as long as I can, and I don’t know how long that will be.”
Howard just looked at him, and he said, “Jim, you can work until you don’t want to work anymore.”
Then Howard asked him a question: “How are you going to support yourself when you can’t work anymore?”
Jim said, “There’s lot of agencies now that are starting to give help to people that are dying of AIDS, and there’s hospice and all sorts of things.” Howard just looked at him and said, “Absolutely not, Jim. You will be on our payroll until you die, until you pass away. We will continue to pay you as if you were working here.”
Howard asked him a second question. He said, “Who’s going to pay for your healthcare?”
Jim had the same answer, “There’s people that are helping.”
Howard said immediately, “No, you’ll be on our healthcare system.”1
It’s a pretty amazing story. Now, let me put it into even clearer focus. Starbucks was losing money at the time. They had no idea they would become the iconic business they soon grew to be. Here’s Howard, a young CEO in the food service industry, not really knowing whether AIDS was a contagious disease. You can work until you don’t want to work anymore. And not only that, you’ll be on our healthcare.
Not only could an “average” employee make just one phone call and get in for a meeting with the CEO—which is notable in and of itself—but then to have the CEO step up and react with such empathy for his situation. What kind of message do you think that sent in the early days of the company about respect and the values of the organization?
According to Behar, who was an enormously influential figure at Starbucks, serving as president and later as a director of the company, “I realized right then that I was in the right place because I knew that I could do anything for anybody who was in need. That’s the message the encounter sent out to the whole organization.”
There were a lot of things that made Starbucks successful. They were brilliant about market segmentation—setting up shops in vibrant communities and catering to discerning coffee clientele. They turned the business into a consumer experience worth paying for with friendly baristas and a warm, ambient environment. Their progressive stance on social issues, as well, appealed to customers. But above all, of course, it was the culture. It was the way leaders treated employees, how employees treated each other, and how they treated customers—with respect. Jim was able to go right to Howard Schultz to tell him the news, and Howard stepped up without any hesitation.
Behar summed it up, “When you have that respect at the core of the company, then that’s how you treat the people we call customers. But it all started with how we treated each other. We were ferocious about treating people with respect. That’s exactly what drove the company.”
Why Respect Connects Us
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Of the five main elements of emotional connectedness that make up the In Great Company approach, respect in many ways is the linchpin that connects all the rest. (See the box “Why Respect Is the EC Spark.”) In fact, the respondents in my study reported that they are far more willing to put in extra effort (four times more likely) when they feel genuine respect in the workplace. My follow- up interviews revealed that people assign significant intrinsic value to respect and view it as a form of social capital. Respect is the quality that people want most. In short, it changes the game.
A number of supporting research findings corroborate my conviction that respect is the number 1 reason people love their workplace. For instance, in a survey of nearly 20,000 employees around the world, people who said their leaders treated them with respect were 55 percent more engaged.2 Another survey conducted by the Society for Human Resources Management (SHRM) in 2014 demonstrated that respectful treatment of “all employees at all levels” was rated as “very important” by 72 percent of employees, making it the top overall ingredient of job satisfaction. And respect not only keeps us engaged, it makes us more effective. Work by leadership and change expert and author John Kotter, for instance, found that respect helps us achieve buy-in for ideas, win over dissenters, and enhance our credibility.3
It makes sense that respect drives engagement and performance, but what is respect really? I would argue it is different for each of us. In the abstract, employees want to work in an environment where they feel appreciated, trusted, and listened to—a workplace that is fair, inclusive, and supportive. As part of that, respect can be defined as consideration for self and of others.4 In action, respect can be seen in things like delivering on promises, walking the talk, and treating people as you would like to be treated. For some, that means the boss keeps them in the loop, gives them credit for their accomplishments, and doesn’t micromanage. For others, it means working on a team with people who don’t take their effort and expertise for granted. Still others think of respect as a high level of civility running across the organization consistently. Whatever the exact definition, respect connects us to each other and helps us work together better to achieve more.
WHY RESPECT IS THE EC SPARK
Respect ➞ systemic collaboration because people who respect each other work more effectively and efficiently together.
Respect ➞ positive future because respect delivers the optimism people need to innovate and feel upbeat about the future for themselves and their organization.
Respect ➞ alignment of values when mutual respect is a core value across the organization. Studies show that people who feel respected are more likely to show respect for others.
Respect ➞ killer achievement when respect delivers the confidence and psychological safety that helps set people up to succeed.
We will look at some of the important elements of respect and how to put them into practice in the Best Practices Playbook below, but in the meantime, it is just as important to understand why respect is so difficult to build into the culture of an organization and why it is so hard to recapture once it is lost.
The Barriers: When Respect Is Withheld
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When I enter an organization to assist in a cultural intervention, I start by taking the temperature. As part of that, I meet with people at every level to ask about workplace situations that concern and irritate them. Some of the answers I commonly hear are these: “My manager cancels our performance discussions without notice.” “My colleague talks over me in meetings.” “My team members call me at home at all hours of the night.” These are vastly dissimilar issues, but they all come down to respect or the lack thereof.
Respect is something we either choose to give or withhold. The reason it is such a difficult issue is not because organizations are so complex but because people themselves are. From my experience, the issue of respect usually boils down to one of two dimensions: difference or dysfunction.
The first—difference—is not something that we can or should “solve.” The accelerating pace of change and technology speeds up interactions and introduces new situations into the mix among diverse cultures and demographics. Even if we believe deeply in the basic tenets of respect, differences based on mindset, culture, and context can drive a wedge between people or cause individuals to act in ways that others find offensive, insulting, or disrespectful.
Differences in mindset, for instance, can create a dynamic whereby two people looking at the same situation reach opposite conclusions. As the famous Myers-Briggs Type Indicator (MBTI) and other personality assessments show, there are multiple ways people respond to conflict, stress, and interpersonal dynamics. Similarly, type A and type B personality theory, created by a pair of cardiologists in the 1950s, highlights opposing archetypes. Type A individuals are the ambitious high achievers that the researchers associated with a “high risk of heart disease.” In contrast, type B individuals are more laid-back, deliberate, and even tempered.5 The point is, when you put opposing personalities together at work, differences in style and thinking lead to conflicts and potentially to a lack of respect that is either real or perceived. What is important when dealing with people’s differences is acknowledging the range of diversity and not excusing bad or abusive behavior based on nuances in style or mindset.
The other element that characterizes disrespect in the workplace is dysfunction. This term may refer to a toxic work environment where people act out, shout, intimidate, or belittle each other or take advantage of other abusive power plays. This type of bad behavior decimates trust, demoralizes teams, and leads to widespread burnout. Of the toxic behavior that is most insidious, bullying takes the cake because it remains in the shadows, and it disproportionately affects minority workers.6 What’s more, it can come from anywhere— bullying bosses are just as common as despicable or disrespecting colleagues.
Workplace bullying is abusive behavior that creates an intimidating or humiliating working environment with the purpose or effect of harming others’ dignity, safety, and well-being.7 It can be a power play or any similar dynamic where the “stronger” person preys on someone physically or emotionally weaker, or it can be a group that outnumbers a minority of individuals.
A Tokyo-based CEO and executive coach I know told me about the type of abusive behavior that is present in some Japanese corporations. He said that what we might consider bullying is commonplace in the Japanese workplace (as well as Japanese schools) because the culture prizes sameness and conformity over difference and individuality. In addition, he said, weakness is “severely frowned upon,” and oftentimes it is verbally derided.
“Bullying [in Japan] is a way to coax people into conformity with longstanding cultural norms,” he said. “The phrase kireru is the type of common abuse of authority that occurs when managers belittle and harshly criticize people in front of other employees.”
Whether it is a culture that has come to condone bullying or a toxic workplace that tolerates harassment, this type of blatant disrespect is worth noting because it is the antithesis of what Howard Schultz and Howard Behar were trying to create at Starbucks and the opposite of the culture of connectedness that characterizes the In Great Company approach.
As I will show below, creating a culture of respect includes setting rules, speaking up, and setting an example that inspires engage- ment, empathy, and inclusion.
Respect: The Best Practices Playbook
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Wegmans, the East Coast supermarket chain, is an excellent example of an operation that has given its all to create and sustain a culture of respect. With 98 stores and 58,000 employees, the family-owned organization is famously people centric, and it has landed on Fortune’s annual list of 100 Best Companies to Work For every year since the list first appeared, including earning the number 2 spot in 2018.
The company’s approach is simple but distinctive: listen to employees, support their development and growth, acknowledge their personal lives and individual needs—repeat. Both Wegmans and Starbucks have followed this formula. And these people- centric practices are a part of several larger ideals that create a culture of respect and a virtuous circle that keeps people emotionally connected (Figure 6.1).
FIGURE 6.1
1. Make Respect Mutual
Creating a culture based on mutual respect is everyone’s responsibility: founders, executives, middle managers, line workers—all of us. It needs to be intentionally orchestrated, purposefully managed, and sustained through consistent actions and enforcement of cultural norms.
The first clue about how Wegmans has been able to create a culture of mutual respect can be seen in its crystal clear corporate values. Out of five values, three are about empowering people and treating them well, and one is specific to respect:
• We care about the well-being and success of every person.
• High standards are a way of life. We pursue excellence in everything we do.
• We make a difference in every community we serve.
• We respect and listen to our people.
• We empower our people to make decisions that improve their work and benefit our customers and our company.
Wegmans’s counterintuitive mantra—“Employees First, Customers Second”—is further proof that the organization is prepared to stake its reputation on treating people well.
“Our employees are our number 1 asset, period,” Kevin Stickles, the company’s vice president for human resources, said in the Atlantic. “The first question you ask is: ‘Is this the best thing for the employee?’ That’s a totally different model.”8
More than just words on a page, this people-first policy is put into practice. For example, the organization earmarks millions each year ($50 million in 2017) for employee development,9 including leadership training and tuition assistance programs. According to the company, more than half of their managers have worked with the store since high school or college, and many completed their education with help from Wegmans scholarship assistance program.”10
The company also shows respect by listening to employees. They make a point to be transparent about business practices and ask employees to weigh in on improvements and new business initiatives.11 (According to SHRM, when deli employees said the “cut gloves” they used with meat slicers were less than ideal, the company got further feedback and then provided custom-made gloves that addressed employee concerns.12) Finally, they demonstrate respect for people’s personal needs by building flexibility into scheduling hours and offering people-first perks like adoption assistance.13
An institutional focus on respect has a viral effect when employees return the love. They respect the organization, each other, and the customers they serve. By all indications, this is the case with Wegmans. According to a report from the Temkin Group, Wegmans’s customer service outranks that of any other company, regardless of industry, and a separate survey of 12,700 shoppers found that Wegmans is America’s favorite grocery store, scoring 77 percent on its customer loyalty index.14
“When you think about employees first, the bottom line is better,” Stickles argued in the Atlantic. “We want our employees to
extend the brand to our customers.”15
This sounds a lot like what Howard Behar told me about the big benefits of respect: “Grow the people, the people grow the organization, the organization grows the business. And that’s how it works,” he said.
Let’s look at several related ways to make respect mutual.
Pass the Trust Test
Trust is a core component of respect that is entirely worth cultivating. The payback in high-trust companies is lower stress, higher productivity, fewer sick days, elevated engagement, and greater job satisfaction.16 And like respect, trust must be mutual in order to deliver on its promise to engage and connect us. Each leader, team member, and individual needs to be believable, dependable, and focused on common goals. In other words, people need to do what they say they will. If there is a gap between what people say and what they actually do, then trust breaks down over time, and the ties between them become tenuous.
In my trust-building work within organizations I coach people to focus their efforts in a few ways. First, empower people to work in ways they want to. If people are in the right roles, they will know how to best do their job without overly tight oversight. Second, create a workplace that provides the resources and information people need to succeed. Withholding or hoarding facts, data, or even advice and coaching destroys trust and diminishes performance. Finally, take relationships seriously. Trust is a bond between and among people. The more we get to know each other, the better we understand the other’s strengths and needs, and the stronger the bonds between us become. These gestures of trust each do two important things: they demonstrate trust, and they elicit trust in return. With that, they help forge the mutual trust that respect requires.