penumbra media & design

Matthew Hudson | October 21, 2009

My partner (and founder of Penumbra) is Jennifer Shirkani. We make a great complementary team because she loves to do the parts of the business that I do not and vice versa. She is an expert in Emotional Intelligence (we made the DVD!) and leader in interviewing and selection. While I do the corporate culutre part, she is more the expert in true human asset management.

I say this because I like to brag about her, but more to set up today’s story. Like myself, Jen gets asked to speak at a lot of conferences, especially SHRM (Society for Human Resource Managers.) I get to tag along with her sometimes - which is a real plus for me becasue I get to watch and engage with the HR leaders of today and catch a glimpse of tomorrow.

In last week’s session, we asked for a show of hands - How many HR people in the room are also the trainers for their company? In other words, how many have double duty versus how many dedicated training people were there. 2/3rds of the room raised their hands. Now you might be saying, of course, you were at an HR conference not a training conference. True, but you are missing the point. These people were saying they were the trainers; that trainers did not exist with their company.

HR is the heart of any company. Most may not like to admit it. Sales will argue they are more important, but there is no other department in the org that touches every single employee. So it makes sense that if HR is the heart and the ELT (CxOs) are the head and the employees are the hands and feet that you need HR to be as strong as possible if you want to build an engaging, sustaining culture.

But alas, the room was filled with people who were being asked to do double duty. The % of people who had actual college degrees in this field was in the single digits. The rest of the group (like much of HR in business today) got their roles becasue they are real “people persons.”

I am afraid for the future. We are not rasing up warriors and champions to serve the heart of the organization. Is it any wonder 90% of all culture changes fail? The people we are asking to do the change have no training!

The people I met at this conference were real and sincere and desirous to make a difference. But they lacked the knowelge. We have failed them. ELTs have failed them when they look at P&Ls and manage head count versus talent and they make budget decisions based on salaries versus cultural significance.

“Man, you are being very critical Matt!” (I just inserted your comments into the blog, impressive huh?) Yes, you are right. I am being critical. But as each day passes and I meet with more and more companies I am beginning to feel like I am the only one who truly cares about corporate culture any more.

It has been de-prioritized so many times and the companies have been “right-sized” so many times that the keepers of the culture and the personalities that will “Preserve the Core” as Jim Collins directs us are all gone.

All over this country, ELT’s meets quarterly and say “We need to make HR a priority!” But they never do. In fact, they never will. They do not understand culture. And when their stock fails to perform and the analysts start to move them to sell status, they will look around the room and wonder what happened.

It is true. History is just the present happening all over again.

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Matthew Hudson | October 9, 2009

This week, I needed a “doo-dad” so I went to the official headquarters of doo-dads - RadioShack. (Or The Shack as they now like to be called.) Now, my first retail job in 1983 was in a RadioShack store. I spent 10 years with the corp and owe them a lot for my retail education.

What strikes me is the new commercial campaign going on for RS. The have started an all out blitz trying to get people to refer to them as The Shack versus RadioShack. Its actually a pretty clever idea. They are trying to make their name mainstream, viral and cool.

To dat, this is probably there 854th attempt at trying to make their brand cool. But here is the problem - Who the heck is RS? I mean it is the most confusing brand I have ever seen. The merchandise is sporadic and confusing - no flow and no connection. Its a s if they are trying to be the Restoration Hardware of consumer electronics (which actually is a cool idea - but I seriously doubt that this is what they are doing.)

The shelves look empty. The merchandise is dull. The employees are frumpy. And there are 4 different store designs. I know this because after visiting the 1st store I got curious and went to 7 others. Its an occupational hazard of someone with 26 years of retail experience.

Ah, but there is the word - experience. There is none at RS. They are making the same mistake that thousands of businesses do every day. They are spending tons of cash on marketing to get people in the door promising hip and cool and when people arrive; the experience disappoints (a lot!)

Sales will spike up with the new ads (as they always do.) But the experience people will have in the stores is so miserable, that the sales spike will drop right back down. Aren’t you tired of stores promising such great excitement only to be let down. We might as well all be Cubs fans.

It’s a cultural thing. (You knew I would get there.) The company is still operating in silos. The marketing does not match the store design - the merchandise does not match the marketing - the people do not match anything.

RadioShack will continue to wander the retail landscape trying desperately not to be the latest entry in the retail graveyard until they decide to put in leadership who understand the power of culture and what it can do for you. No marketing campaign will ever fix you. Its like going on extreme makeover and coming out beautiful, but still being a raging idiot.

Now I am not saying RS execs are idiots; they are very bright people. But bright people act in accordance to what they know. If you do a Bing search, you will get billions of hits on business and marketing and human resources, but sadly, much fewer on corporate culture.

But then that is why we blog…

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Matthew Hudson | October 5, 2009

Its amazing to me when I witness people following “the crowd” versus searching their own way. Last night as I was out walking, I passed by the AMC theater in Scottsdale, AZ. There was a line to get tickets. That is not unusual, I know, but here is what caught my eye.

There were 20 windows to get tickets and only 1 was open. There was a line of 16 people (yes I counted) standing in that one line. To the right and left of the counters were self-serve kiosks where you could walk up and buy your ticket on your own and go right in. No one was in line for any of the 4 kiosks. They were all waiting for the ticket window.

I see the same phenomenon at the airport each week. There are plenty of kiosks to check in, but I still see a long line of people waiting at the counter. I have even reduced my arrival time becasue I know I can count on a check in of less than 5 minutes since everyone will line up in the cues for me and not use the kiosks. (Perhaps writing about this will hurt me, but…)

The point is this, if you woudl like a study in corporate culture, just watch the crowds wherever you go. Chnage is hard in companies - espcecially culture change. You have heard me talk abotu the rule of 1/3rds many times. Whenever you implement a change - 1/3rd of the people will hop on board and support you, 1/3rd of the people will resist and work against you and the last 1/3rd are the fencesitters. They wait to see whcih 1/3rd wins and then they change.

Its always important to know this going in so you cna plan for it and control it. 90% of companies do not and therefore they struggle in the purgotory of change. This struggle can go on for years. Why?

Because we follow the crowd. We watch what the others are doing and join in. Your job is to plan for crowd control. You need to ask yourself these questions:

1. How do I reach the hearts and heads of my employees?
2. How do I create leaders within the crowd who can direct and correct?
3. How do I involve the people who will be affected by this change in the change process?
4. Did I include these people in the decision in the first place?

Change is not evil. Change is necessary. Change can be good. But planning to change is the key.

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Matthew Hudson | October 1, 2009

 I am sitting in a Satrubucks writing this blog post and I am watching people take the “tatse test.” They are trying the new Via coffee packets and comparing that to the regular coffee they are used to shelling out the big bucks for their fix. Will it work? I don’ tthink so.

As I spoke with the employees (baristas) the only training they got was how much the Via costs and what its availability is going to be. Talk about a bold and dangerous move. If the person who is used ot dropping the large doillars on their coffee believes they can get the same great flavor from a packet that they drop in a cup in thier house, they will stop making the trip to the store. And the employees were not trained to deal with this.

This is the same company by the way who is testing selling alcohol in some Seattle stores.

Here is the challenge. You rise to a size of revenue and profit that you now start making decisions for your shareholders versus your customers. You have to build revenue - even if you are profitable at lower revenues. Its insane, but Wall Street runs our companies these days and not the ELT. How do you protect your culture and appease Wall Street? You don’t. You change your model and damn the culture to make the analysts happy. Then you fail becasue you went against what got you there in the first place. Turnover, which up until now was never an issue, now becsomes your plague. After all, can you blame the employees? They worked for you becasue of the corporate culutre you created and now you are throwing that out.

So then the cycle begins. Companies rotate leaders and the leaders “reinvent” the business. It works for a short while and then they are gone and the next guy tries.

Here is the rub. When you read about corporate turnarounds that actually stick and work, notice how the new leaders all cite the return to their roots; a return to the orginal culture that got them started. Think about it. Is it really worth destroying your culture to make some analysts happy?

I remember sitting in the office of Howard Schulz (CEO of Starbucks) and asking him what he thought his biggest fear was for the future of his company. “Culture,” he said. “I am worried about how we are going to maintain our culture and grow the company at the same time.”  Wise man. he said it right. Let’s see if it goes right for Starbucks.

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