Upstanding E-Book

Frank A. Calderoni

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 397

Veröffentlichungsjahr: 2021

Beschreibung

The CEO of Anaplan explains how a company's character is a critical driver of sustained success In his career as an executive at IBM, Cisco, and now as CEO of Anaplan, Frank A. Calderoni discovered that character is just as vital for companies as it is for individuals. In Upstanding: How Company Character Catalyzes Loyalty, Agility, and Hypergrowth, the author explores the powerful link between corporate strategy, company culture, and individual character, and how activating this link is essential to realizing strong company character--and an essential ingredient for organizations to achieve hypergrowth, agility, and loyalty. This innovative resource features real-life examples of how today's most successful companies are building upstanding character while increasing employee engagement, happiness, and performance. The book is written to help executives, company founders, managers, and other leaders develop strategies that supercharge organizational performance while building a strong and high-engagement culture--providing real-world insights from the author's own career along with a diverse cross-section of business thought leaders and CEOs of companies both small and large, local and global. The author draws upon his experience leading a $10 billion hypergrowth software company to explain how the fusion of culture and strategy, driven by a company's character, leads to sustained internal and external success. Designed to empower leaders to make character the cornerstone of corporate culture, this invaluable resource: * Explores what "upstanding character" means for an organization, and how building a culture based on empathy, courage, authenticity, integrity, respect, and other factors drives higher performance and value creation for employees, customers, partners, and shareholders * Reviews research on how culture drives performance, and operational practices for building upstanding organizational character and driving value-aligned behavior * Features original interviews with Shantanu Narayen, Cy Wakeman, Eric Hutcherson, Kellie McElhaney, Geoffrey Moore, and other leaders inside and outside the tech sector * Provides practical tools and approaches for increasing inclusion and belonging, improving communication, strengthening engagement, and rewarding upstanding character in employees * Discusses the "Big 9" cultural values that are essential to creating upstanding company character, such as agility, collaboration, diversity, integrity, and respect With a foreword by Shantanu Narayen, Chairman and CEO of Adobe, Upstanding: How Company Character Catalyzes Loyalty, Agility, and Growth is essential reading for executives and business leaders interested in strategy, leadership, organizational culture, and management innovation, as well as leadership teams and HR professionals who are responsible for guiding their organization's culture and developing its character.

Leseprobe

Table of Contents

Cover

Title Page

Copyright

Dedication

Foreword

Introduction

Upstanding company character is essential to achieving and sustaining peak performance.

Notes

PART I: It's a New World

CHAPTER 1: A New Given: Culture Is Strategy

Leaders must put character at the center of everything they do.

The New Relevance of Character

Leading for Character and Culture

The Nexus of Culture and Strategy

Notes

CHAPTER 2: 21st-Century Ethos

Character is the North Star by which we steer our organizations.

Ethos of Inclusion, Purpose, and Agency

Virtual and Global Teams

The Employer Value Proposition

The Transformation of Every Company in Every Industry

Bigger Data

Hypergrowth Expectations

Customers First

Notes

CHAPTER 3: The New Essential Core: Upstanding Character

Having a disengaged character is the same as having no character.

Is Your Character Online or Offline?

The DNA of Organizations with Upstanding Character

Notes

PART II: Building Character-Driven Organizations

CHAPTER 4: Know Your Values

Upstanding character starts with defining your unique core values.

It Starts with Personal Work

Know What You Stand For

Identify Values in Partnership with Employees

Review and Update Your Values

Notes

CHAPTER 5: Top Down, Bottom Up

Authentic company values come from an ongoing dialogue, constant vigilance, and recognition of exemplary behavior.

Eras Identify Their Leaders

Communicate, Communicate, Communicate

Carrying the Culture Flag

Notes

CHAPTER 6: Make Character-LedCulture Your Strategy

It requires a lot of courage to take a stand on behalf of a company's character.

What's Your Purpose?

Beyond Financial Results

Learnings from the Disney Institute

Transparency and Accountability

Notes

CHAPTER 7: Magnetic Character:Activating Positive Forces

Take bold action to drive positive change.

Taking a Stand

A Continuum for Change

Attract and Retain People

Hiring for Character

Evaluating Talent for Character

Building an Upstanding Leadership Team

Notes

PART III: Putting Character into Action

CHAPTER 8: Responding to Crisis

Your true character is what shows up in times of crisis.

When You Are Called, How Do You Answer?

Cisco and Proposition 8

The Day the NBA Answered the Call

Notes

CHAPTER 9: Stories from Exemplar Companies—and Leaders

An organization's upstanding character is a reflection of the people in it.

Adobe: Evolution of a Great Company

Culture at Puppet—A Move Back to Its Roots

A Breath of Fresh Air at Coca-Cola

Creating a Mission-driven Culture at Chegg

The Nature of Character at Slack

Charles Schwab: A Founder's Living Legacy of Service to Clients

Genpact: Character Drives Client-first Culture

Keeping the Culture Ball in Play at Splunk

The Power of Jaguar Land Rover's Mantra

Notes

CHAPTER 10: Looking to the Future

Create the future you want to live and work in.

The AI Edge

Career Management

The Future of Work

Equity-fluent Leadership

My Greatest Hope

Notes

Acknowledgments

About the Author

Index

End User License Agreement

Guide

Cover Page

Table of Contents

Begin Reading

Pages

iii

iv

v

ix

x

1

2

3

4

5

6

7

8

9

10

11

13

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47

48

49

50

51

52

53

54

55

56

57

58

59

60

61

63

64

65

66

67

68

69

70

71

72

73

74

75

76

77

78

79

81

82

83

84

85

86

87

88

89

90

91

92

93

94

95

96

97

99

100

101

102

103

104

105

106

107

108

109

110

111

112

113

114

115

116

117

118

119

120

121

122

123

124

125

126

127

128

129

130

131

132

133

134

135

136

137

138

139

140

141

142

143

145

146

147

148

149

150

151

152

153

154

155

156

157

158

159

160

161

162

163

164

165

166

167

168

169

170

171

172

173

174

175

176

177

178

179

180

181

182

183

184

185

186

187

188

189

190

191

192

193

194

195

196

197

198

199

200

213

214

215

216

217

218

219

220

221

222

223

224

225

226

227

228

229

FRANK A. CALDERONI

ANAPLAN CEO

UPSTANDING

HOW COMPANY CHARACTER CATALYZES LOYALTY, AGILITY, AND HYPERGROWTH

Copyright © 2021 by Anaplan, Inc. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.Published simultaneously in Canada.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, [phone], fax [phone], or on the Web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, [phone], fax [phone], or online at http://www.wiley.com/go/permissions.

Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

For general information on our other products and services or for technical support, please contact our Customer Care Department within the United States at [phone], outside the United States at [phone] or fax [phone].

Wiley publishes in a variety of print and electronic formats and by print-on-demand. Some material included with standard print versions of this book may not be included in e-books or in print-on-demand. If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley.com. For more information about Wiley products, visit www.wiley.com.

Library of Congress Cataloging-in-Publication Data is Available:

ISBN 9781119746492 (Hardcover)ISBN 9781119746553 (ePDF)ISBN 9781119746560 (ePub)

Front Cover Design: Georgina Brown

This book is dedicated to…

My father, who taught me the meaning of upstanding character And to Jessica and Matthew, whom I hope maintain his legacy

Foreword

I first met Frank in early 2012 over breakfast to explore his interest in joining Adobe's Board of Directors. It was clear from that initial conversation that Frank was a pioneer of understanding the critical connection between corporate strategy and culture in driving a company's success, as his criteria for making a decision were not only limited to Adobe's strategy, but also considered our values, culture, and character. Over the past eight years, as both Audit Chair and Lead Director of Adobe's Board, Frank has provided tremendous insight to the company as we navigated our own business transformation. Frank's expertise and counsel have been invaluable to me personally, as I have evolved in my role as CEO.

Throughout his illustrious Silicon Valley career, Frank has led transformational initiatives for iconic technology companies, including IBM, Cisco, and Anaplan, during critical junctures of growth. Frank has a growth mindset and runs his business by the numbers, but he also understands that people are a company's greatest asset and that employees do their best work when they resonate with the mission and values of the company.

In Upstanding, Frank examines the inextricable link among corporate strategy, company culture, and individual character, underscoring the significant role every employee plays in embodying culture and contributing to a company's long-term growth and success. Activating that link is essential to realizing strong company character—and a requirement for organizations aspiring to achieve hypergrowth, agility, and loyalty. Frank's assertions are reinforced with compelling stories from his own career—as well as other highly successful leaders in his network—and he outlines a practical set of principles that can serve as a blueprint for companies seeking to develop, nurture, and sustain strong character. He posits, and I wholeheartedly agree, that strong character is a proven way to increase employee satisfaction and productivity, and ultimately, win in the market. I've seen for myself the positive impact that character has on organizations, including Adobe.

Being CEO at Adobe has reinforced for me the importance of a company's character. This was clearly the case when, nearly a decade ago, we set in motion how to transform our business from a profitable packaged software company to one of the software industry's largest and fastest-growing subscription businesses. We knew we had to pivot our strategy and business model to achieve strong long-term growth, but we also knew it would not be easy. Without our employees' belief and commitment in our transformational vision, it would not have been possible. Adobe's sincere and encouraging culture played a critical role in bringing people along, and supporting our character built the bridges of trust needed to carry us through the transition—igniting our passion and determination to succeed.

Frank is right in stating that now more than ever, a company's success is not only defined by its financial performance, but by the role it plays in making the world a better place. A company's social purpose, ethics, and commitment to sustainability, diversity, and inclusion are as important as the products it makes. Companies must consider and support all constituents—employees, customers, partners, investors, and the communities in which they operate.

Dynasties are built when great people are rallied around a great mission, culture, and values. The confluence of these factors enables innovation to thrive, businesses to succeed, and the world to move forward.

I hope you'll enjoy Upstanding as much as I did.

Shantanu Narayen

Adobe Chairman and CEO

Introduction

“Sometimes the longest journey we make is the sixteen inches from our heads to our hearts.”

—Elena Avila

Upstanding company character is essential to achieving and sustaining peak performance.

I've learned more in the last 18 months than in 35 years in business. The combinations of a global pandemic, recession, and social justice movements are unlike anything we've experienced in our lifetime, and we're all dealing with the heightened expectations that employees, customers, and investors have of the business sector to lead the way through daily change. But these conditions have accelerated a huge shift that demands action if you and your business want to remain relevant.

How you show up, what you stand for, and what actions you take to that end—as an individual and as a leader in your organization—are now gating factors to lasting success. Today, the degree to which what you say and what you do are tightly aligned will often be a stronger success indicator than traditional professional or business fundamentals. There was a time when we separated our personal and professional personas, leaving opinions unrelated to work at home. Those days are gone.

People are holding companies accountable for societal, environmental, and governance practices with little to no patience for inaction. Growing and protecting brand value, whether it's for consumers or business-to-business, is contingent on organizations navigating uncharted waters of social change in hyperpolarized communities. And every one of us is making choices about what to buy from whom, driven not only by product or service quality, but by whose values align with our own and speak to a shared purpose.

The year 2020 was a moment of truth for character. And I'm proud of how the employees at Anaplan—the company I lead—persevered. Our ongoing emotional investment in living our values enabled shared resilience. Resilience that fueled our leaders and teams through the worst of circumstances. What we drew on was an upstanding character that we knowingly—and sometimes unknowingly—created to guide us with clarity and cohesion.

While the multiple crises of 2020 underscored the renewed and urgent relevance of company character, the cumulative factors, previously outlined, which affect all businesses and have led to this moment. To help navigate our shared experience, I wrote this book drawing on the artifacts and experiences I've cultivated as a leader. I've assembled wisdom from experts and peers in my network, included notable stories from business headlines, and shared methods to develop your own versions of upstanding character for your organizations. As a result, this book offers ways to think about company character, culture, and actions you and your teams can take to lead effectively now.

I definitely don't have all the answers, and I don't get it right all the time. But I am willing to keep trying. It's imperative we all do.

How I Got Here

I'll never forget my first real job. I was 20 years old during the summer between my sophomore and junior years at Fordham University, where I was working on a degree in accounting and finance. I applied to IBM for a position as a summer intern, went through a pretty rigorous round of interviews, and was accepted. Little did I know at the time what an impact this temporary summer job would have on my future. And never could I even imagine it shaping my views as a future CEO.

Getting hired by IBM, even for just a few months, was a really big deal for me and my family. At the time, IBM was still the 800-pound gorilla of the computer industry, and the company was well known as one of the most successful corporations in American business. In 1979, the company was ranked No. 7 on the Fortune 500 with annual revenues of more than $21 billion and profits of more than $3 billion. By way of comparison, then No. 1 General Motors had three times more annual revenue—$63.2 billion—but “just” $3.5 billion in profit.1

I repeated my internship with IBM the following summer, and when I graduated, I accepted a full-time position with the company. I ended up working at IBM for 21 years, building a career that helped me get established at Cisco Systems and set the stage for my future growth as a leader. And while I have worked for—and led—some amazing companies in the years since, IBM and Cisco both made a tremendous impression on me, and I have carried a piece of each with me.

Let me start with IBM. The overarching mantra at IBM when I was there was a deep and abiding respect for the individual and the community. And not just for those who were employed by IBM, but respect for individuals who were part of our business ecosystem—partners, vendors, and customers—and respect for the people who lived and worked in the communities in which we did business. As new employees, we were taught about the history of this great company, and we were steeped in its values and culture. In fact, there was a company song we knew called “Ever Onward,” the official IBM rally song.

IBM's culture was built on a firm foundation of what it called the Basic Beliefs, introduced by then-CEO Thomas J. Watson Jr. in 1962:

Respect for the individual;

The best customer service in the world; and

Excellence.

2

I quickly came to appreciate this remarkably deep, people-focused culture. I learned at IBM how pivotal a clear, pervasive culture is to the success of any business—no matter what industry it's in, where it's located, or how large or small it might be—and how hard it is to sustain performance when times get tough in the absence of strong shared core values.

My experience at IBM also taught me what can happen when leaders fail to honor, promote, and renew a company's culture. IBM faced a very real crisis of confidence in the 1980s as the computer market shifted from the large mainframes that provided most of the company's revenues and profits to small desktops. In 1986, earnings declined 27 percent and revenues dropped precipitously. During the course of six years, 170,000 employees were laid off or retired, budgets were cut, business lines were discontinued, and the pension program was slashed.3 As IBM's business results became more challenged, new people were brought in to run the operation, and they didn't take advantage of the culture as an asset to drive and accelerate a required reformulation of IBM's business strategy. Instead, the business changed the culture, and this negatively affected the business.

Of course, IBM wasn't alone during this time—many other stalwarts of American business conducted layoffs, cut benefits, and restructured their operations. According to The Economist, in the decade after 1987, approximately 3.5 million American workers lost their jobs due to downsizing.4 The focus of many companies moved from people to the bottom line, and the focus remained there for the better part of two decades as the dominant mindset of corporations.

Make no mistake about it—growing sales and profits was always an important part of the IBM mindset, but historically, this growth was considered to be a natural result of following the three Basic Beliefs. If you respect employees, provide the best customer service, and demand excellence, IBM would grow—and grow and grow.

At IBM, I started out in finance, and I was fortunate to be invited to join a special management development program for individuals with strong leadership potential. A key part of the course was a talent assessment to determine early in our careers if we had the attributes that would be required to lead IBM into the future. As you can imagine, the pressure to excel in the assessment was intense. We were tasked with working through complex business cases—problem solving, developing strategies, working as part of a team, presenting, and writing. Through it all, seven or eight assessors closely watched everything we did that week; how we managed ourselves determined our career progression. As an introvert, it was a hugely stressful pressure-cooker experience that pushed me to be more extroverted. While it felt way outside my usual comfort zone, it also thoroughly engaged my competitive instinct—I could win at this!—and it was formative to shaping my leadership drive.

The course and assessment were rigorous, but they were also helpful and revealing. When we received our results, we learned exactly what we did well, what areas we should work on to improve, and we had a much better idea of our potential as future leaders at IBM. Excellence was expected and the bar was set high. I eventually worked my way up to Vice President, Finance and Operations for Global Small Business, making me the senior financial and operations executive for a $3 billion international brand and customer organization. And it was at IBM that I learned firsthand the value of how to work with cultural differences.

I was born in America, but I'm a child of immigrants. My father immigrated to the United States from Italy when he was just five years old and settled in a small, rural town in New York State with his mother, father, and brother. Like many immigrants at the time, they went through Ellis Island. My father went to college, but he left before he received his degree—he needed to work to provide for our growing family. He had a strong work ethic and worked long hours as a tradesman to give us a good life. My mother didn't go to college—she stayed home to take care of me and my two brothers, Bob and Rick, and later developed a career as a computer technician after we left home. We lived comfortable lives—we weren't affluent by any means, but we didn't lack for anything.

I think my father always regretted not getting his degree, so he impressed on my brothers and me from an early age that we would definitely be going to college. I started working when I was 12, delivering newspapers, and my brothers started working at a young age too. The expectation our father set for us was that the money we made would be put into savings for college. The main focus, however, was on studying and doing well in school.

When I was in high school, everyone was talking about going to college, but I didn't fully understand what college was all about. My parents didn't have experience with the college and career landscape to help fill in the gaps, so my brothers and I had to learn as we went through the process ourselves. We had to figure out what schools were available to us, how to apply, and what professions to pursue. I decided to talk with my high school guidance counselor about it.

The guidance counselor asked me a few questions and then he handed me a list of colleges. “Go look at these,” he said. “You may want to think about going to them.” I didn't realize it at the time, but that counselor set the path to my future.

Fordham was one of the schools on the list. I liked that the school was in New York City, and it had a strong reputation, especially for business careers. Going to school in New York City was an eye-opening experience for me. I was somewhat sheltered growing up in a small, rural town with my family, but at Fordham, I started getting more engaged in the community around me.

I wanted to try different kinds of jobs, so I worked for a hospital (a short-lived tour as an operating room technician) and a radio station while I was in college. The station broadcast throughout the Tri-state area—New York, New Jersey, and Connecticut—with a variety of music and news programming to reach multiple niche audiences. I was initially interested in majoring in journalism or the arts at Fordham, so I decided to become a business reporter at the radio station to explore both professions. I was exposed to the corporate world, and this was my first experience on how companies reported earnings.

While I was at the radio station as a news reporter, I had the opportunity to interview some significant people at the time, including President Jimmy Carter, Vice President Walter Mondale, New York City Mayor Ed Koch, and other political and business leaders. I would be standing in the press scrum trying to get in and hold up my microphone along with all the big networks: ABC, CBS, and so on—which were big moments for me as a small-town kid. I was learning firsthand about politics and business, and it opened up a whole new world to me. Those experiences were as valuable as the formal education I was getting in college. As much as I loved the creativity of working at the radio station and doing some filmmaking on the side, my rational side said I needed to go into business so I could get a good job out of college. So, I decided to major in accounting and finance.

As I neared graduation, I started knocking on doors in New York City, dropping off copies of my resume at companies I was interested in. The very first job offer I got was a full-time finance position from CBS at $12,500 a year, and I still have that first offer letter to this day. Although I was excited to receive the offer, I decided to wait and see if IBM would make me an offer following my summer internships. Luckily, the company made me a full-time job offer.

My education continued as I moved up the ranks at IBM. I started in an entry-level job, but I had the good fortune to socialize with different levels of people in the company and met several executives whom I personally aspired to be like, and who became mentors. I was really interested in leadership early in my career. There was something about helping people develop their skills and advance in their own careers that spoke to me. Within just a few years, I was promoted to manager and led a team of eight people.

When I joined the finance leadership team for IBM's EMEA (Europe, Middle East, and Africa) division, I spent most of my time in Europe. After that, I was tasked with overseeing finance for the San Jose–based storage business and I moved to California. The division invested heavily in Asia operations so I spent a lot of time traveling in China, Singapore, Thailand, and other Asian countries as we expanded disk drive manufacturing throughout Asia.

I learned professionally and personally by traveling extensively at a time when U.S. businesses were just entering previously inaccessible markets. I have vivid memories of walking on the Great Wall of China, boarding a Russian Navy ship in St. Petersburg, and bartering in Indian markets. I had many interactions with customers and other IBMers around the world, and they were often very open to showing me around and sharing different parts of their cultures—what was most important to them. Through these experiences I learned that cultural understanding is essential for doing business.

Although most of my fellow business students at Fordham had a goal of working for one of the large, public accounting firms upon graduation, I ended up accepting a position at IBM because the company really cared about its people. They focused on ensuring we connected as coworkers. They had a number of clubs, sports teams, family outings, and as someone starting a career, this was a wonderful way to learn more about colleagues by sharing hobbies and building relationships. We felt like a family; we felt like we belonged, and that has resonated with me ever since. I built many long-standing friendships that have stayed with me through today. I even met my wife, Brenda, at IBM, where we were colleagues growing our careers in the finance organization.

However, I recognize that during that era, for all IBM's strength of character, the company had accepted norms that by today's standards were biased against diverse people. While women and Black team members were not uncommon, my colleagues were predominately white men, especially in the more senior positions. And an uncomfortable truth during that time was that people of color and women were systemically disadvantaged. Thankfully, the IBM culture has evolved, as has the mindset of most leading businesses around the world, but we still have so far to go on inclusion, which I discuss further in Chapter 7.

This year alone has confirmed without a doubt that when you make character the foundation of everything you do, and when you're more inclusive of diverse people and backgrounds, you're a much more effective business leader. You benefit from different perspectives that result in far more equitable and innovative products. You develop trust, relationships, and partnerships on a whole new level, which in turn, drives loyalty and growth in your business.

I joined Cisco in 2004 as Vice President, Worldwide Sales Finance, when the company was in its heyday, and was promoted to CFO in 2008. Profits were soaring, business was great, and some of the best people I have ever worked with were joining in record numbers. During my tenure, the company more than doubled business revenues and profits. But then we faced major adversity in the wake of the global recession, which hit in 2008–2009 and affected Cisco for several years. I will never forget the day in 2011 when we received 11 analyst downgrades, lost billions in the marketplace, and suddenly had a lot more adversaries.

This was a time of significant company transition. Cisco had more than 66,000 employees globally and a very strong company culture. We had to quickly implement a cost-savings plan in excess of $1 billion—leading to heartbreaking rounds of downsizing and layoffs—while at the same time trying to maintain a positive culture. It was probably where I learned the most about how important culture can truly be when the worst happens all at once.

Throughout it all, our Chairman and CEO, John Chambers, set a remarkable example for others in the company to follow. During an earlier downturn, he had reduced his own salary to $1 a year.5 And while other employees volunteered to take pay cuts to reduce layoffs of their coworkers and help save the company, John declined—deciding that morale would suffer.

As CFO, I both felt and observed up close the pain that the downturn was causing my colleagues on the executive team, and how difficult it was for us to make hard decisions that affected people's lives but were necessary for survival. But I could also see our collective character that was the foundation of the Cisco culture. It would have been easy for all the pressure—both internal and external—to bring us down, but we stayed above it. And while it's normal to react to challenging circumstances, you shouldn't let that change who you are as a person.

I learned a lot about character from the entire Cisco executive team. It was a learning experience for all of us as we made and implemented the hard decisions required to get the company back on a firm financial footing. One thing that helped was that the standout trait of the Cisco culture was optimism. In fact, a Businessweek article about John Chambers published six months before I joined the company described him as “irrepressibly optimistic.”6 Regardless of what was happening in the world around us, we knew we were going to persevere; we were going to win in the long run. Leaders didn't have to threaten or badger people to work harder. Everyone seemed extremely self-motivated. We understood that we needed to lift ourselves up and continue forward, so that we could get ourselves back on top.

We had a common purpose that came from our strong core character. My time at Cisco demonstrated how the strength of company character provides an unwavering foundation to carry a business through the hardest of times.

As we all know, growing sales and profits are essential for sustained financial performance. But leaders who focus narrowly on financial results without a parallel focus on culture and organizational health may be surprised when they hit the inevitable iceberg. As job markets have tightened in recent years and great employees are harder to recruit and retain, companies have had to put the focus back on people. Competition for talent is one factor forcing a return to the importance of character to business. Many more realities at play require leadership teams to build culture for sustained advantage and resilience: intertwined global markets, the power of social media to make or break corporate reputations, digital transformation, and the imperative for cross-functional connectivity and collaboration.

As business leaders, we implicitly know the importance of strategy—of setting goals and then developing plans that help us achieve those goals. This is very much a “hard” science—we can measure and quantify the results of our strategies and determine whether they have been successful. For many, the focus on creating a positive organizational culture is a “soft” science—something much less quantifiable, perhaps impossible to measure. The result is that leaders typically default to emphasizing strategy over culture, hoping it will lead to the results they seek.

Of course, it's not that easy, especially if you are going through the kind of turmoil we experienced at Cisco back then. While there's no denying that strategy and “making the numbers” are essential, research overwhelmingly shows that an organization's culture significantly affects employees' engagement—their passion and commitment to making the company successful. I have learned firsthand that employee engagement flows directly to the bottom line. As numerous studies have shown, organizations with high employee engagement perform better in almost every metric compared to organizations with low levels of employee engagement. More on those studies is offered in Chapter 1.

So, if it's not all about strategy, and it's not all about culture, then what really drives performance? Making culture instrumental to your strategy.

Competitive agility, hypergrowth, and customer loyalty require combining culture and strategy so they're two sides of the same coin.

After more than 10 years with Cisco, I left for Red Hat, where I became EVP, Operations and CFO. While I was at Red Hat, I learned valuable lessons too. The culture at Red Hat was considerably different from the more structured IBM and Cisco cultures in which I had built my career. Like the open-source software that is its hallmark, the Red Hat culture was also very open to an extreme—in a good way.

In an open culture, I learned about the power that comes from cultivating an openness to feedback that is not curated or reviewed in advance. To allow employees to ask any question, and to allow yourself the vulnerability to answer in a way that is authentic and unscripted. It generated passion and heated debates like nothing I have ever seen before in an organization. It was refreshingly different and something I knew I was going to adopt as I moved forward. These key learnings from Red Hat were what I brought along with me when I became President and CEO of Anaplan in 2017.

Anaplan, the company I lead today, makes cloud-native SaaS software for global enterprises to orchestrate successful business performance. But more than that, it's an organization that I've had the privilege of shaping using all of the insights about character, culture, and leadership I've gained throughout my career.

On my first day at Anaplan, I thought to myself what an honor it was to become the CEO at this up-and-coming startup. Our headquarters was in an industrial part of San Francisco—in a building with retrofitted brick walls, little enclaves everywhere, and a hip vibe throughout. What I learned in the interview process to become CEO was that Anaplan had an incredible product, a large greenfield opportunity, and loads of potential. It was everything you wanted in a startup.

However, it seemed like Anaplan's culture and character were not well developed. Employees enthusiastically supported customers and were clearly passionate about the product, but values were individually defined and culture was fragmented with competing centers of control. There was a need to strengthen values cohesion, inclusion, and shared purpose for the company. I saw this as an opportunity to leverage my experiences with the lessons I have learned along the way—lessons I now feel compelled to share with you, especially today.

Company character is the core that grounds culture and strategy—it is the persistent through-line of fundamental beliefs and values uniting people and teams working with a shared purpose. While our world and business environment are in a constant state of flux and change, the qualities that constitute good character never change. They're timeless.

Character comprises the qualities and behaviors that define us as people—such things as empathy, courage, authenticity, integrity, honesty, and respect. They are embodied in how we work every day, how we treat others, and how we treat ourselves. Organizations that internalize and live and demonstrate upstanding company character in every interaction are the organizations that will win today—and into the future.

It is essential—and now more than ever—for business leaders to consider the implications of culture and company character for their respective business. This book explores the crucial intersection of culture and strategy, and how today upstanding company character is essential to achieving and sustaining peak performance.

Notes

1

.   

https://archive.fortune.com/magazines/fortune/fortune500_archive/full/1979/

2

.   

https://www.ibm.com/ibm/history/history/year_1962.html

3

.   

https://www.cambridge.org/core/journals/business-history-review/article/change-and-continuity-at-ibm-key-themes-in-histories-of-ibm/DADE64DDC8569B2F9046B4CF47DFA814/core-reader

4

.   

https://www.economist.com/news/2008/07/28/downsizing

5

.   

https://www.cnet.com/news/ciscos-chambers-cuts-salary-to-1/

6

.   

https://www.bloomberg.com/news/articles/2003-11-23/ciscos-comeback

PART IIt's a New World

CHAPTER 1A New Given: Culture Is Strategy

“I came to see, in my time at IBM, that culture isn't just one aspect of the game, it is the game. In the end, an organization is nothing more than the collective capacity of its people to create value.”

—Louis V. Gerstner, Jr., former Chairman and CEO, IBM

Leaders must put character at the center of everything they do.

Today, peak performance requires a dual focus on culture and strategy, especially in this new era of doing business. We are in a unique environment marked by instant gratification, pervasive social media influence, and fast-changing global political and economic forces that require every business to be agile and ready to shift at a moment's notice. In addition, the forces of digital transformation and disruption are exerting tremendous pressure on entire industries—and the executives who lead them.

On top of all that, we've all witnessed the tremendously negative impact the COVID-19 pandemic has had on people, businesses, and the global economy—surpassing the downturn of 2008. While many companies have recovered from the severe and unexpected disruptions to their business operations, many others have gone bankrupt or have closed their doors permanently. Major companies filing for bankruptcy during the COVID-19 pandemic include Neiman Marcus, JCPenney, Virgin Atlantic, Hertz, 24 Hour Fitness, Pier 1 Imports, Brooks Brothers, Stein Mart, Sur La Table, and even the Cirque du Soleil circus arts live entertainment company. The list goes on.

And, as I write these words, mortgage delinquencies are the highest they have been in a decade,1 American Airlines announced that it is going to cut 19,000 jobs,2 and it was reported that 54 percent of San Francisco storefronts—the local lunch spots, neighborhood grocery stores, fitness studios, and other small businesses that we at Anaplan headquarters regularly frequented before the pandemic—are no longer in business.3 Internationally, according to Roberto Azevêdo, Director-General of the World Trade Organization, “The unavoidable declines in trade and output will have painful consequences for households and businesses, on top of the human suffering caused by the disease itself.”4

Clearly, the aftereffects of COVID-19 will leave lasting ripples on how businesses are run and how leaders prepare their companies for the future, perhaps for decades to come. These ripples won't be felt just in the United States, but all around the globe. Every CEO I know is considering flexible new ways of working that put less focus on having people on-site in traditional offices, and more focus on outcomes. And so are employees. According to one survey of more than 750,000 employees working in more than 100 global enterprises—representing every major industry—in early April 2020, 33 percent of those surveyed said they wanted to return to the physical workplace full time post-COVID-19. At the end of June 2020, only 4 percent of those surveyed said they wanted to return to the physical workplace full time post-COVID-19.5

It seems that change is all around us.

Leaders intuitively know a great culture enables great business results, and a significant amount of research confirms this. However, that same research shows that most organizations are falling short when it comes to culture.

According to Gallup, which has been regularly surveying the state of employee engagement for almost two decades:

Culture is a critical part of an organization's identity. Culture is created through the experiences that employees have with the corporation and, just as importantly, with each other—the everyday interactions with peers, managers and executives.6

When employees identify with and are aligned with a company's culture, they feel they belong to an organization that is inspiring, purposeful, and truly values their contributions to the team. They feel connected. And this connection flows right to the bottom line. A 10-year review of more than 111,000 employee surveys conducted by Aon Hewitt and Queen's Centre for Business Venturing (QCBV) revealed that organizations whose employees have the highest levels of engagement achieve:

65 percent greater share-price increase;

26 percent less employee turnover;

100 percent more unsolicited employment applications;

20 percent less absenteeism;

15 percent greater employee productivity; and

Up to 30 percent greater customer satisfaction levels.

7

This is all good news for businesses with great cultures, but there's a hitch. According to a 2018 PwC survey of more than 2,000 people in 50 countries, although company leaders tend to think their companies have great cultures, their employees don't necessarily agree. While 63 percent of C-suite and board members surveyed reported that their organizations have strong cultures, only 41 percent of employees responded that this is the case. In addition, 80 percent of respondents said that in order to succeed, grow, and retain the best people, their organization's culture needs to evolve within the next five years. Compare this to just 51 percent of respondents in 2013 who said that their organization's culture needs to evolve.8

As the Aon Hewitt/QCBV study demonstrates, a corporate culture that is lacking correlates to lower levels of employee engagement, productivity, and business results, along with higher levels of turnover and absenteeism. However, it gets even worse. Gallup also found that 51 percent of employees surveyed are actively looking for a new job or watching for openings at any given time—in many cases because they are convinced that “the grass is greener” in a different organization.9 Unfortunately, this group of people may very well include your best employees—some of whom may leave before they realize their full potential in your organization.

In 2019, job and recruiting site Glassdoor published the results of its latest Mission and Culture Survey. This survey asked a simple question: What makes employees around the world satisfied at work? According to the results of the survey, the top three drivers of employee satisfaction are:

Culture and values;

Quality of senior leadership; and

Career opportunities.

10

The Glassdoor survey also revealed that:

Well over half (56 percent) of employees and job seekers say company culture is more important than salary when it comes to job satisfaction.

Almost 73 percent of adults surveyed would not apply to a company unless its values align with their own personal values.

Nearly 4 in 5 people would consider a company's mission (79 percent) and culture (77 percent) before applying for a job there.

Almost 2 in 3 employees (65 percent) say company culture is one of the main reasons for staying at a job.

65 percent of U.S. Millennials are likely to place culture above salary, which is higher than any other age demographic surveyed.

11

Clearly, culture matters and has a tremendous impact on who joins and stays at your organization—and ultimately, on your ability to execute strategies required to achieve the goals you set for your organization.

When I became CEO of Anaplan in 2017, I could see the culture needed an overhaul. Even though our product was exceptional, and we were on to something that had enormous potential, that was not enough to make the company successful long-term. One thing I noticed early on was the company was lacking in diversity and inclusion—in fact, internally the nickname “Manaplan” was often invoked because upper management of the company was mostly men, and women were not well represented across functions.

We needed to make some changes quickly to transform Anaplan's operations and culture. I will get into the details of that transformation later in this book. But for those of you who are trying to understand your culture, I recommend asking these questions: How does your culture evolve amid ever-changing business, political, social, economic, and customer dynamics? How does your culture remain clear, consistent, and powerful amid hypergrowth? How does your culture persist when people are dispersed globally, expect more from work, and work remotely?

Company Culture Is Distinct from Company Character

Company culture is the system of beliefs, values, goals, behaviors, and the way employees feel working in the organization—from leadership style, decision-making norms, customer experience, and company policies—officially and unofficially. Essentially, it's the personality of the organization. Culture evolves over time, often adjusts with leadership change, and must be actively managed.

Company character is the integrity, respect, and fortitude residing at the core of your culture. It is the basis of trust and emotional connection people have with your organization—measured by the distance between what you say and what you do. Company character is the timeless alignment of your values (your stated intentions), your reputation (what you're known for), and your actions. It is earned as much as it is defined.

The New Relevance of Character

What we know as someone's character anchors the relationships we build with people around us—our boss, the people who work for and with us, our customers, our vendors, our investors, the communities in which we do business, and the world at large. Positive business reputations rely on leaders and cultures with upstanding character—behavior that demonstrates values people can rely on and build trust in. From what I have learned, character is intrinsic and enduring—like a boulder that weathers a hurricane with no visible stress or damage—and the origins of the word reflect this.

Character found its way into our language from the ancient Greek word charassein, which means “to engrave,” as you would engrave a letter, number, or other character onto a surface such as clay, wood, or metal using a chisel. As the pioneering psychoanalyst Dr. Richard Sterba pointed out, this original meaning has since been broadened to humans. Says Sterba:

Character designates the features of personality which are more or less indelibly engraved upon it, features which of course express themselves in actions and reactions, features that are “characteristic” of the individual, features by which one ego structure can be differentiated from others.12

I believe that, just as a great culture creates competitive advantage, so too does defining and nurturing an upstanding company character. Companies with upstanding character embrace and embody the virtues of empathy, courage, authenticity, honesty, integrity, respect, and more. All of those