Working Wonders with a Positive Company Culture: For Love and Money
Would your employees turn down a month's salary to keep your business afloat? Is your employee turnover rate below 5 percent?
At OMIX, a designer and developer of next generation e-Business solutions, the answer to both questions is a proven "yes."
This successful Silicon Valley technology company is run by a by husband and wife team, Dr. Sandy and Terry Lillie. Sandy is a clinical psychologist with over 20 years of counseling experience, and Terry is a technical guru with thirty years of experience in computer networking, system integration and software development
The Lillies founded the company, which is based in Menlo Park, CA, in the heart of the Silicon Valley, in 1994, naming it OMIX to reflect their dual intentions: OM for the spiritual and IX for the technical dimensions of what they wanted to create. This unlikely team set out to make a difference in the corporate world by showing that good business and a solid commitment to human values can co-exist, and even thrive, together.
Terry, who serves as the President and Chief Technical Officer, has guided this Internet professional services and system integration company to become a leading developer of next generation e-Commerce and Internet/intranet/extranet applications. Sandy, who is the Chief Operating Officer of OMIX, has devoted herself to creating and inspiring the companys genuinely humanistic culture.
Together, they have built a profitable company that features a truly unique business culturea "circular" organization that fosters:
Not wanting their company to be unduly governed by the drive for growth and profits, the Lillies never took a dime from venture capitalists. Instead they emptied their retirement accounts, mortgaged their home to the hilt, maxed out their personal credit cards and persevered.
And through the tough times, OMIX employees with rare and valuable skills persevered too turning away the headhunters, voluntarily reducing their salaries and sometimes even going without pay at times to help keep the company running.
What are the secrets behind the incredibly positive company culture at OMIX? Why are OMIX employees so loyal and the companys turnover rate so low? How does the enthusiasm, commitment, and stability of this highly skilled work force benefit both customers and the companys bottom line?
Dr. Sandy Lillie shares her unique insights in the following essay.
Working Wonders with a Positive Company Culture:
By Dr. Sandy Lillie
What do people want from their work? How do you optimize the satisfaction, commitment and performance of employees? As a Licensed Clinical Psychologist, I spent more than 20 years counseling people on how to improve their work and personal lives. I also helped to develop Employee Assistance programs and provided organizational consulting to major companies in the Silicon Valley.
Through these years of experience in helping people to deal with the effects of working in various corporate environments, I developed strong ideas about how best to structure the framework for human relations in the workplace. I wanted to build a financially successful organization, with happy and productive employees who would not need a psychologist to help them deal with how it felt to work there.
Over the past seven years, Ive been able to apply, develop and test my ideas as Chief Operating Officer of OMIX, the Internet professional services company co-founded by my husband Terry Lillie and me. And so far, they really have worked wonders at OMIX. So Im eager to share these ideas, in the hope that more companies can become places where people love to work. OMIX proves that this is possible.
The OMIX Culture
Establishing a positive culture within which the people of OMIX could live the working aspect of their lives has, from the beginning, been at least as important to Terry and me as making money. Being financially viable is very important, of course. People join OMIX in order to make a living, and OMIX cannot exist unless it is profitable. But making money is rarely if ever the only reason that people join OMIX, and it has never been the only purpose of our existence. We are also here to express our creative potential as human beings through the work that we do, and to make a positive contribution to the world.
The name "OMIX" was chosen to represent the marriage of the "OM" (the spiritual) with the "IX" (the technical). We are a technology company, using and creating the technology of the Internet as our practical contribution in the world. But we are also a community of human beings embodying and expressing the Universal force. This is the context for all that we do, and honoring this reality is always at the core of our intention.
We work to address our human needs for survival, security, comfort, and pleasure (i.e., money); but we also work to satisfy our needs for creative expression, personal growth, spiritual meaning, and human connection (i.e., love).
On the whole, I feel that we are succeeding in doing what we set out to do at OMIX. And as it turns out, our commitment to a positive culture has not only helped us to thrive, but has at times been critical in our ability to survive.
Some of the things we are able to do as a small company, (not yet over 50 employees), might be more difficult to achieve in a larger company. But I am convinced that many people settle for much less than they should, even in large companies, because they cant imagine how to make things better. And there are thousands of small businesses that inadvertently adopt the problems of large businesses for lack of seeing better possibilities. So let me start by describing the foundations of the OMIX culture, and we can go from there.
Establishing and Nurturing a Positive Company Culture
"Culture" is one of those concepts, like "love" or "a sense of humor", that different people understand very differently. To me, culture is not the frills around the edges of how we are together, the beer bashes, teambuilding games, free food or casual clothes. These things may contribute to the sense of a groups culture, but they are not its essence. To me, culture is the warp and woof of how we interact with one another, the written and unwritten rules, the basic patterns that describe how we weave our relationships with one another and with the world outside the group.
Establishing and nurturing a positive company culture is not something that happens apart from the main business of the company. The culture is part and parcel of the way that decisions are made, roles are defined, systems structured, power and resources (including compensation) distributed. Culture is established in the way that facilities are selected and designed, communication channels created, benefits offered in short, the ways that people come together and treat one another every day. Everything that influences how people feel and relate in the work environment contributes to the companys culture, the human context within which the work of the company gets done.
You can sense the essential spirit of a companys culture almost immediately. Is this a group where people feel happy, excited, energized, open, cooperative, safe, and friendly? Or do people feel afraid, stressed, depleted, constricted, competitive with one another, unsafe, and isolated? You sense these things the moment you enter the environment, although it may be hard to pinpoint the cues that give you these impressions. You certainly will sense these things if you participate in the group for any period of time.
In our efforts to create and sustain a positive OMIX culture, certain basic principles have served as our guidelines.
Guiding Principles of the OMIX Culture
Sharing the Fruits of Our Labor This is a cornerstone of the OMIX culture. For people to experience an energized excitement in shared creation, to have a sense of being valued contributors rather than exploited "human resources", it is essential that they share in the fruits of their labor. At OMIX, this has taken the form of generous stock options, as well as salaries and benefits as generous as the financial condition of the company can permit.
One side effect of our efforts is that our employees have shown amazing tolerance when we could not afford to be generous, when people voluntarily went for long periods without raises and sometimes even months without pay. Sharing our abundance when we can has created an atmosphere of trust, in which people are willing to accept the hard times as well.
Distributing rewards to the larger group for its accomplishments promotes the sense of being a part of something greater than ourselves, and focuses attention on the groups shared goals. People feel that we are all in this together, and what we do has meaning beyond our individual lives. And sharing the fruits of our labor also enhances the sense of convergence between work and play, helping people to feel energized rather than depleted by the energy they contribute, knowing that we all benefit from what we are growing together.
Work with Passion As much as reality will permit, we encourage people to grow in the direction of their passions. People who are doing things that really interest and excite them have more to give and are happier giving it. We cant always respond to peoples desires as quickly as we or they might like, but we do our best to find out what their passions are, and we weigh this information heavily when making decisions about project assignments, training opportunities and the like.
It has not been unusual for OMIXians to assume increasing responsibilities very rapidly as they developed new skills, or even to radically shift careers. For example, our first graphic artist had a background in pre-med and was originally hired to answer the phones; a graduate in linguistics, whom we hired to learn project management, turned out to love and be terrific at technical writing; and a very bright, dynamic young opera singer, who started as an administrative assistant, became a highly valued member of the sales staff.
Open Sharing of Information To identify with the larger group and fully participate in solving the challenges that the group faces, people must feel included as much as possible and they must know what is going on.
Openly sharing information at OMIX through ongoing verbal and email communications, maintaining the internal OMIX Web site, and monthly company staff meetings where all employees are kept informed of the opportunities and challenges facing the company, all support a sense of "us-ness" rather than "us vs. those idiots." Even when Terry and I have made mistakes, people have understood the sincerity of our efforts and the complexity of our challenges, because our process was open and they were invited to participate. This has minimized feelings of fear, anger and helplessness that might have arisen when dealing with our mistakes, and maximized the sense of shared accomplishment in our successes.
Open Communication and Mutual Feedback OMIX employees are actively encouraged to express their ideas and feelings about every aspect of their participation in the company. From the day they are hired, employees are urged always to communicate their ideas, desires, complaints, and whatever matters to them, however trivial or excessive it might seem. We dont guarantee results, but we ask for the chance to respond to their concerns.
Through "management by walking around," we give and receive ongoing feedback. If we have something nice to say, we make a point of saying it. I try to respond within a day and in a satisfying way to any email I receive from staff. Our doors are usually open. At our monthly company staff meetings, there is an open forum at the end for discussion of any issues affecting the community (from strategic direction to refrigerator etiquette). We tried having an anonymous suggestion box, but this was never used.
A key structure for supporting open communication and mutual feedback is the Employee Conference, which Terry and I schedule with each employee about twice each year. Employee Conferences are not Performance Reviews. Their purpose is communication, not evaluation, because evaluation is not conducive to honest exchange.
Employee Conferences are not a substitute for ongoing communication, but they ensure that time is set aside to communicate about any issues and to maintain a sense of connection. They are defined as a time when Terry and I, the founders of OMIX, sit down together to give our undivided attention to an employee. Employees let us know whatever is or is not working for them, any needs or desires they may have, and any suggestions they may have for the company. We explore their feeling about their career development and any specific training or other opportunities they want. We use these occasions to express our appreciation to our employees, to tell them things we notice but might not have mentioned in the ongoing rush of events. If there are problems, we discuss these too, but most often we address problems as they come up, rather than waiting for these meetings.
We do generally ask employees how they feel about their compensation at these conferences, but the conferences specifically are not defined as occasions for salary adjustment. We want the focus of conferences to be on sharing feedback and enhancing mutual understanding, not on justifying a bonus or raise. We have more than once been surprised at these conferences, when asking employees how they felt about their compensation, to hear comments such as, "Well, I hate to say this to you, but I really think that youre paying me way too much!" or "Before we talk about me, I want to tell you that I really think that Harold deserves to get a raise before I do," (Just to clarify the situation, we do not pay our employees more than normal salaries for this area).
Careful, Respectful Communication Open communication does not mean careless communication. In order to work well, communication must be done care-fully and with respect that is, with full care and full awareness of the impact on the other person(s) involved.
Two of the most important techniques for effective communication are I-statements and active listening, and OMIX employees learn to use them both as the need arises. I-statements allow people to convey the full strength of their needs and feelings without crushing or invalidating the other persons needs and feelings. Active listening helps people to understand each others experiences, and to feel understood. Using these techniques facilitates constructive exploration of conflicts and dramatically improves the prospects for resolving differences in a satisfactory way.
Conflict happens (to paraphrase a popular bumper sticker). Where there are human relationships, there is conflict. So the question is not whether we will deal with it, but how. At OMIX we encourage people to deal with conflict openly but carefully, within a framework of care and respect.
Compensation Determined by Contribution People want to make enough money to support their lifestyles, but compensation has significance far beyond this. In modern American culture, compensation is how people evaluate the worth that is placed on their contributions, and relative compensation is an important measure of fairness. At OMIX, we want people to feel well and fairly paid for the work that they do. We compensate employees according to their relative contributions at the time, not according to their age, previous salary, length of time since their last raise, or their ability to negotiate. We have as much as doubled an employees salary in less than a year when we thought this was justified by the employees increased level of contribution.
We deliberately avoid regularly scheduled salary reviews with employees, choosing instead to quietly review the list of employee salaries on an ongoing basis as needed to evaluate whether relative compensation levels still seem fair. In this way, we offer raises immediately when people assume new levels of responsibility, develop new skills, or otherwise demonstrate merit. We also adjust salaries upward for equity as new people are hired and we become aware of increases in prevailing wages. I can remember very few times in the history of our company when OMIX employees have had to request salary increases before we offered them. But it has happened many times that employees have responded to offered raises with comments like, "Are you sure you can afford this right now? Because I can wait, you know " or "Instead of giving me this raise, why dont we use the money to start a 401K for the company?" (I insisted that this person accept his raise, but we started a 401K for the company soon afterwards).
This irregular yet attentive approach gives our people rapid, concrete appreciation for their contributions, avoids the polarizing tension of scheduled salary reviews, and permits frequent adjustment of compensation levels to keep them both fair and competitive with the market. Employees whose contributions increase very rapidly receive salary increases just as rapidly, so they have little reason to change companies in order to qualify for higher pay (as so often happens when raises are given as a percentage increase over previous salary levels). Our approach lets people know that we are paying attention and that we care about them, because we are and we do, and this is an important way of showing it.
Focus on Responsibilities, Not Titles Titles and reporting structures are the stuff of which politics in the workplace are made. It may be important to give people titles for their resumes and dealings with the outside world. And people need a clear concept of their responsibilities in order to do a good job. But when titles and reporting structures are given prominence, pyramids of power are created and the unhealthy force of politics is unleashed.
At OMIX, we try to spotlight our responsibilities, not our positions. This may sound like a semantic difference, but I think it profoundly affects the way that people work together. For example, at the monthly company staff meetings, our President and CTO (Terry) introduces himself as the guy responsible for technical activities at OMIX; the VP of Sales introduces himself as the sales guy; others introduce themselves as developers, project managers and the like. We talk about who takes care of what, whom to go to for what, not who is over whom.
Organizational Circles, Not Pyramids At OMIX, we try to structure power and responsibility in circles rather than in pyramids. For example, Project Managers are not conceptualized as "above" the development teams they manage, nor do their teams relate to them in that manner. Instead, they are an essential part of the team with the responsibility for coordinating the teams efforts, tracking the teams progress in fulfilling its commitments, communicating with the client and so forth. They provide vital support to the team in facilitating its success, and are generally appreciated for the responsibilities they assume rather than feared for the power they wield.
A circular structure supports the sense of "us-ness" within the group, whereas pyramids foster a sense of "us" vs. "them". People are more likely to take initiative, without waiting for "them" to lead. They are less likely to sit back and complain, more likely to take responsibility to make things happen. They are also more likely to do what needs to be done without considering tasks "beneath" them or "not my job".
In pyramids, people tend to compete with one another for the "higher" positions and for the favor of the "higher ups." Circles foster a spirit of cooperation and supportiveness, in which people orient their attention to the shared goals of the group, rather than to their relative positions within the group. This is more comfortable and rewarding for people, and it also aligns the goals of individual employees with the larger goals of the organization.
Maximize Individual Freedom and Choice People want to be free to express themselves in the ways that are most natural for them, to dress in ways that are comfortable for them, and to adjust their schedules to balance their lives (e.g., avoid long commutes and take care of children). Depending on their responsibilities, some employees must be available to clients during normal working hours, dress in ways that communicate competency and professionalism, or otherwise conform to the needs of the business. The amount of required conformity varies widely among different industries, jobs, geographical locations, and generations.
But the freer people are, the happier and more energetic they become. Conformity depresses energy and constricts creativity. So at OMIX, we limit individual freedom only when it truly is necessary to meet the requirements of our work. We look for creative solutions when personal and company needs conflict for example, employees who choose to work during nonstandard hours are required to wear pagers during normal working hours so they can be reached.
Whenever possible, broad conflicts between individual needs and the needs of the organization are discussed in the larger group, rather than being resolved by edict. This is especially important when there are valid or strongly held views from different perspectives. This process can be uncomfortable at times, but it vastly improves acceptance of whatever difficult compromise is eventually achieved. Everyone can at least appreciate the difficulty of the dilemma and know that all views have been seriously considered in searching for a solution.
Responsible, Not Accountable Taking responsibility is of course the sine qua non of the work environment. Being response-able (able and willing to respond) to the challenges our jobs present is what we get paid for doing. Part of being responsible is acknowledging our mistakes, learning from them, and figuring out how to do better. When we do this, our energy goes to discovering solutions for the future, not determining blame for the past.
When people talk about accountability, however, they usually are talking about assigning blame. When a mistake is made, the focus is on whose fault it is and why they did it, looking backward. When people are held accountable, they try to avoid acknowledging their mistakes, they blame others, and they spend their time and energy unproductively.
At OMIX, we certainly value people taking responsibility, but we have no interest in holding people accountable. We make a point of appreciating people for their willingness to acknowledge mistakes, and we make it clear that mistakes are inevitable and expected. Terry and I try to create a safe environment for people to share their honest truths (not just their airbrushed public images) by modeling this behavior ourselves. We dont pretend to be perfect, so they dont have to be perfect either, and we can all share in the process of learning and facing challenges together.
Hire for Aptitude and Attitude We hire people who are bright, energetic, eager to learn, responsible, humble and open, sometimes even when they have very little relevant background. Skills can be learned, and usually are learned quickly by folks like these. We carefully avoid hiring people who have big egos, staged personas, or who are preoccupied with personal ambition and social status i.e., people who feel good about themselves by feeling better than other people. No matter what skills they may bring to the job, these people will drain energy from the organization and reduce the effectiveness of everyone around them.
Take Care of Employee Needs When people feel that their needs are treated as important, they are happier and more likely to treat the needs of others including customers, coworkers, and owners or investors as important too. They are also more likely to tolerate times when their needs cannot be met, if they trust that this is not for lack of caring.
Good employee benefits, conscientiously administered, are an important expression of caring, so OMIXians (whether full or part time) and their families receive the best health and disability insurance we can find, fully paid for by the company. Caring is expressed through generous policies for time off, flexible schedules, reasonable workloads that dont require excessive travel or workaholic lifestyles, and prompt responsiveness to other employee concerns as well.
There is also an important message conveyed by the physical space and amenities that we provide for people. Comfortable chairs, good desks and high quality equipment send the message that the employees needs matter. At OMIX, we buy all new employees office chairs to accommodate their individual requirements. We do our best to provide a pleasant work environment, giving almost everyone windowed private or semiprivate offices rather than cubicles, and leaving open space where people can gather to meet or have fun together.
At different times, weve been able to afford different levels of amenities. Providing good coffee and bottled water is nice, as is making sodas or juice and snacks available. When the business was still in our home, we even hired a private chef for lunches. A private masseuse comes to the office each week, and we periodically bring in a chiropractor to discuss ergonomic principles. But how much we are able to do is not as important as the sense that we do as much as we can. Poor children can know that they are loved, and rich children can feel profoundly neglected; what counts is the genuine spirit of caring that is communicated every day.
Build Community People thrive when they have a sense of belonging in a community, and the little irritations of daily life seem less important when a cushion of good will is created through positive shared experiences. So at OMIX, we promote opportunities for shared fun. We have gone to baseball games, amusement parks and comedy shows together; weve done potlucks, played sports, and packed canned food for the needy in our area. Weve had parties, played music for one another, and put on a talent show. We celebrate our birthdays and other special occasions, and we go out to lunch together often.
We also have a pool table, foosball table, ping pong table and other
fun stuff in our big Living Room, where folks come together to take a
break, share a little fun, and get to know one another better.
A Sense of Humor and Compassion Immersed as we usually are in the details of our daily struggles, we do need to step back enough to see ourselves in the bigger picture. From this perspective, we can usually see the humor in our situation and have greater compassion for ourselves and others. Ram Dass tells the story of standing in front of his refrigerator, intensely conflicted about whether to allow himself to drink a Coca-Cola full of sugar and caffeine then imagining God watching this little human drama and having a good laugh.
Cultivating humor and compassion is always helpful, and can provide the leavening we need to get through the inevitable hard times. Terry and I try to encourage and model these attitudes ourselves, and gratefully receive support in kind from our staff.
The Golden Rule In the last analysis, of course, it always comes down to this. We try to do unto others as we would have them do unto us.
Company Culture and the Bottom Line
Im hesitant to use the term "bottom line," because I dont really regard money as the bottom line. To me, it is the quality of our experience in life that is the bottom line, the fundamental measure of value. Money can contribute significantly to the quality of our experience, but money is only a means, not an end. It is a means of exchange that can be used to obtain certain experiences and avoid others. If we sacrifice too much to get money, it can be a bad deal in terms of the true bottom line, the quality of our experience. What will we buy with the money to compensate us for what we have sacrificed in order to get it?
But having said this, I still know that when most people talk about the bottom line, they are talking about money. And however much a positive company culture may be good for people, it must also be good for business. Otherwise, most investors and shareholders will not support it. So how has the culture of OMIX been good for business?
As a professional services company, our people are key to our success, because their services (time and expertise) are what we sell. Our positive company culture has very obvious impacts on our business.
We dont usually think about it in these terms, but the positive culture at OMIX also allows us to avoid the negative effects of poor company cultures, such as low productivity, high absenteeism, alcohol and drug abuse (causing higher medical costs), racial and sexual harassment, violence ("going postal"), and employee lawsuits. All of these can be direct threats to the profitability and viability of a company. In recent years, a number of companies including high tech enterprises and large law firms, have had spectacular collapses, apparently because of poor human relations.
Company Culture and Customer Satisfaction
As a professional services company, our ability to sell our services depends on our reputation for quality, reliability and integrity. Customers must choose us from among many competing firms, so customer satisfaction is vital to our survival. Here too, our culture has contributed critically to our success.
Making a Difference
Today, when skilled workers are in short supply, company loyalty seems quaint, and the younger generation demands balance and emotional satisfaction as well as financial rewards from work, the importance of "human factors" is gaining recognition.
Personally, I am less motivated by the desire to increase profits by "managing" employees more effectively; I am more motivated by the desire to be a positive force in the lives of those whose lives touch mine, and a force for positive change in the world. I am especially interested in discovering how ethical practices can coincide with practical self-interest, so that we dont have to choose between selfishness and altruism, between caring for ourselves and caring for others.
I believe that we are most fulfilled as human beings when these impulses converge, when the dichotomy between giving and receiving breaks down and we experience ourselves as unique individuals in profound connection with one another. When I experience in this way, it gives me joy to give you joy; it hurts me when I hurt you. When working is playing, is for you, is for me, it is deeply fulfilling and satisfying. In the broadest sense of the term, it is love.
During my years of counseling, I was particularly struck by how much of the stress and frustration that people described in their working lives was due to company politics. They didnt mind working hard, they enjoyed being challenged, and they made enough money to meet their needs. But they found themselves perennially in the position of children at work, competing to please more powerful people and to manage the way they were perceived. Instead of being able to focus on genuine accomplishments, from which they might experience intrinsic satisfaction, they were preoccupied with trying to get credit, avoid blame, and be rewarded in ways that would make them feel valued by those in power. They were afraid to try creative or innovative approaches, because these involved increased risk of making them or their bosses look bad. This was not fun.
What people want is a sense of convergence between work and play. They want to do what they love, and love what they do. They want their work to be an expression of themselves, to feel that their work makes a difference, and to be recognized and valued for their contributions. These are not unrealistic expectations. And when they are met, everyone benefits.
When Hewlett-Packard first began, its founders were ridiculed for their novel ideas about how to treat their employees, ideas that were considered impractical and unrealistic; yet they built one of the most successful companies ever, and now others try to emulate the HP Way. The founders of Apple Computer were dismissed in the beginning as a couple of hippies with no sense of the business world, until the creativity they unleashed began to rival more "establishment" companies.
All cultures are not equal. Cultures differ in their effects on our human natures, in their tendencies to foster our best possibilities or our worst. Some cultures dampen the human spirit, while others help us to flourish. I am convinced that we can create much better, more humanistic company cultures than we do, and that better company cultures are better business too. Much is possible if we are willing to question established assumptions, think creatively, take risks, learn from our mistakes, and keep trying.
The experience of OMIX demonstrates this. I hope that sharing this experience may serve to inspire you. This is my passion and my dream.
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