Long Live the New Services Culture

The decade-long streak of "companies behaving badly" is gradually ending. Many of us wisdom-seekers who track services industry trends, have been quietly praying for the day when the bad behaviors would subside.

"Growth at any cost" values -- highly predictable behaviors and beliefs found in many fast-paced industries throughout the 90s -- no longer sustain companies or their performance. Here are the hopeful signs that "lose/lose" values are going out of style and "win/win" approaches are taking their place:

"Show me the money" Behavior is Dissipating.

Three functional areas -- engineering, finance and sales -- conspired to build cowboy cultures of winning sales at any cost -- even if it meant making promises that could not be delivered.

Engineering at some companies relied on their customers -- often unwittingly -- to "beta test" their software for them. Microsoft has been accused of using this product launch strategy for years. How many copies of Windows have you tried to install before they got most of the kinks out?

I think back to the halcyon days of selling, when I was asked on a regular basis to use discounting as a method of closing business. At one sales kickoff meeting in Houston, our VP told us "we will do whatever it takes, and consider discounts up to 65% to defeat our archrival." Sadly, "whatever it takes" too often meant lying to customers to close the deal.

Many finance groups faced similar pressures. The VC community had a tendency to squeal through the due diligence process. Speed to funding was worn like a badge of honor. I remember interviewing Michael Robertson, founder of MP3.com, about five years ago. He reveled in how he secured his first round of funding after presenting a two-page business plan to a gang on Sand Hill Road - all in less than 35 minutes.

Return on Investment Is Cool Again

I've seen no fewer than ten articles on how to measure ROI last quarter. Even CEO of HP, Carly Fiorina, raised the topic at the World Economic Forum last January in Davos, Switzerland.

Industry analysts and respected consultant Amir Hartman, author of "Ruthless Execution," offers supporting evidence that ROI is back in vogue. "When we surveyed 500 companies, we learned that only 12% of their IT investments delivered the ROI they expected. Worse than that, cost overruns of 25-50% were very common in the majority of IT projects." "Whatever it takes", then, also once meant lying to shareholders and the Board.

With consolidation and offshore outsourcing currently monopolizing the media, vendors realize they cannot afford to close sales at any cost, nor rely on yesterday's hiring and retention models to grow their companies. Our IT services study revealed that 2003 billing rates for services firms have declined in the U.S. by as much as 20%.

Through sheer necessity, leaders have to re-visit the values that will pave the way to future growth. I'm convinced that Gateway icon Ted Waitt was strongly encouraged to step down as CEO when the new Emachines acquisition was consummated. With the additional 2,500 job cuts announced in March, the new Gateway method of doing business will look very different, indeed.

Employees' priorities have shifted.

Most of my clients are shocked when I tell them the number one attraction for job-seekers. According to a 2000 study by the Radcliffe Public Policy Center, earning a high salary came in ranked as the sixth highest priority for professionals. For respondents in their 40s, challenging and rewarding work was their top priority. No matter what age group we fall into, we all want to make a contribution.

Here's more evidence of workforce priorities. Career website Vault.com saw a sharp rise in hits to their sites that provided data on a company's workplace quality last year. And compared to the first half of 2003, web traffic to sites covering diversity and corporate culture grew 20%. Hiring managers, are you listening?

Employees don't want to work for companies that lie to customers, shareholders or them.

According to Doug Smith, author of On Value And Values: Thinking Differently About We In An Age Of Me, "the future of the planet now rests on how well people in organizations integrate concerns for value (money) with concerns for values (social, political, family, spiritual, technological and more). Organizations are where people experience an everyday sense of "we" and seek meaning in what they do.

As Smith writes, companies who begin to understand and link "the way we do things around here" to performance results have the highest potential to embrace the new, emerging services culture. As illustrated by Smith's Ethical Scorecard, win/win cultures benefit customers, shareholders, and employees. And here's another bonus: their values inspire the children of the people who work for them.

These shifts are a wake-up call for companies who want to move from industrial-era greed to a collaborative, win/win culture. Next month, we'll share with you how best selling author and business icon, Dr. Stephen R. Covey, suggests we begin the winning journey.

Until then, ask yourself: What are the first steps to designing a winning culture in my life, and in my company?