You Had Me At Goodbye

Posted by Polly - April 15th, 2008

It’s easy to get fixated on loss these days as the stock market continues to take a beating, wealth melts away from our portfolios and homes, and job cuts are on the rise. And yet, even as I fork over my dues to Uncle Sam and rather helplessly rejigger my IRA investments, I can’t help but think of so many of the maverick leaders I’ve met over the last few years who, even when they lose, seem to win. Time and time again, as they told stories of setbacks and failures, they described them as opportunities to double-down and deliver on their distinct sense of purpose.

I was reminded of this principle last week while interviewing two very different (but equally impressive) CEOs for a CNN segment on the power of “nice guys” (and gals). The language may be made for TV, but the point, I think, is important: there’s a growing body of evidence that the old adage “nice guys finish last” is on its last legs. A recent Harvard study upended the old game theory principle that selfish action and aggression are the hallmarks of winners. And research out of Berkeley, Stanford, and Northwestern demonstrates that the path to power isn’t paved with Machiavellian manipulation and ruthlessness, but humility, humanity, and generosity (what happens once you achieve power is another story —and another post).

The two leaders I spoke with—Paul Purcell, the chairman and CEO of wealth management firm R.W. Baird and Lars Dalgaard, the founder and CEO of the on-demand software operation SuccessFactors—make their own case for sane success. The personalities of these two leaders and their organizations couldn’t be more different (a 90-year-old wealth management and private equity firm headquartered in Milwaukee and a fast-growing Silicon Valley software startup), but both are universally recognized as great places to work—and both leaders made it their first priority to institute a “no asshole rule” in their companies. Those policies pre-date the book by the same name, “The No Asshole Rule,” by my friend Bob Sutton, but they’re very much in the spirit of the movement Bob has ignited and continues to document tirelessly on his excellent blog to rid the working world of “assholes” and cultivate more civilized workplaces.

Despite their differences, Lars and Paul were strikingly in sync when it came to explaining the logic behind their “no asshole rule” and how it changes the way they lead and their organizations operate.

First, both objected to the word “nice” when I proposed my angle into the story. Lars refers to himself as a “reformed asshole” and both exhibited a tough-mindedness around the business case for the “no asshole rule.” Paul told me, “it’s a business principle. It’s simply more efficient to have an asshole-free culture because you’re not protecting your backside or playing politics. And, people end up both happier and more productive.” Lars decried the “wasted cycles” involved in dealing with the fallout of politics, gossip, ridicule, email flames, hidden agendas, and all the corrosive, cancerous behavior that plagues too many organizations. The business benefits range from a recruiting edge (Baird’s “no asshole rule” has won it a place near the top of the Fortune 100 Best Companies to Work For list for five years running) to enhanced performance and customer satisfaction (SuccessFactors is growing at an incredible rate, with 3 million users in thousands of companies around the world).

Second, both argued that “enforcing” the no asshole policy is a matter of peer pressure and modeling good behavior. Hire the right great people (both Lars and Paul describe extensive interviewing processes in which candidates meet people from all over the organization and an explicit conversation about the “no asshole rule” upfront) and, as Lars puts it, “set scorching examples” as often as you can. Lars talks about catching himself in an “asshole moment”—whether losing his cool with a subordinate in front of the board or sending out an insensitive email to the entire company—and how he immediately cops to the behavior, apologizes, and sets about rectifying any damage done. What’s more, every single employee of SuccessFactors signs what Lars calls “an emotional contract” laying out the no-asshole” rules of engagement in vivid detail—from “I will not be a jerk” to “I will not BCC anyone and never talk negatively and destructively behind someone’s back” to “I recognize that I am personally a steward of this ‘Olympic flame,’ and I know that if I lose my edge, it will trigger a wildfire, and we together have both the power to keep this open honest culture, or break it. DON’T DO IT. BE GOOD.”

Finally, and this brings me back to how the best leaders lose well, both Lars and Paul were as emphatic about how they fire people as how they hire them. It’s the inevitable and dreaded task of all leaders to have to “let people go” from time to time. And leaders like Lars and Paul, who are hyper-vigilant about holding the line on the quality and behavior of each individual in the company, have a no-tolerance policy for jerks. Still, that doesn’t mean they fire like jerks. Both of them made a point of saying how vital it is to fire people with all of the care, humanity, and dignity with which you hired them in the first place—to make the experience as productive, helpful, and mutually satisfying as an experience that brutal can be. The benefits aren’t limited to karmic retribution, says Paul, but include the impact on everyone else in the organization: “Oh, this is how we treat people here, even those who’ve disappointed us in some way.”

It’s easy to be “nice” when you’re winning, but what principles and practices have you put in place to keep your inner-jerk (and we all have one) from rearing up when you’re losing?

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