By Ed McLaughlin with Wyn Lydecker
Although the title of our book is “The Purpose Is Profit,” I do not believe that “Greed, for lack of a better word, is good,” as the character Gordon Gekko famously said in the movie “Wall Street.”
From the beginning, I was determined to found a business built on a culture of trust and openness. I wanted to grow my company, USI, into one where integrity, hard work, and creating value were rewarded. Here are four steps I took to accomplish those goals:
1. Hire High-Quality People
From the beginning I associated with and hired high-quality people whom I felt I could trust. Yet, I didn’t trust people easily. For me, trust is earned and re-earned. You are not entitled to trust. When I started USI, commercial real estate didn’t have a reputation for being clean. But I wanted my company to be completely clean and honest.
2. Document Every Commitment
Before hiring my first two partners, I wrote out exactly what my expectations were for them. I laid out their compensation and benefits clearly. I knew I could not afford to pay them much and instead offered them founding equity in the business. And since we were bootstrapping the business, I knew that I could not take a salary at all in the first year. We were all focused on building revenues while minimizing expenses to get to breakeven as soon as possible.
Following my attorney’s advice, the employment offers also included non-compete and non-disclosure agreements, which became USI’s operating standard. Further, in order to establish the foundation for USI’s culture with its employees, the employment offers included the following language:
This employment offer is based on your commitment to USI’s standard Business Practices and Operating Philosophy including:
· Making commitments and keeping them;
· Providing total quality and integrity in everything you do;
· Being a team player;
· Holding yourself accountable to the USI team; and
· Holding the USI team accountable to you.
This exact language was used in all USI employment offers from then on. These first documents set the tone and started the culture and practice I wanted to create around compensation, productivity, and morale. I believe that team members are better equipped to focus on bottom-line results when they have a crystal-clear understanding of their goals, responsibilities, and reward structure.
3. Own Up to Mistakes
Culturally, people are afraid to own-up to making mistakes. At USI, we wanted to know about mistakes quickly, then own up and apologize. If you raise your hand early, the mistake can be fixed quickly. Fast action and openness can only serve to help the relationships with customers, colleagues, managers, and employees.
It’s unrealistic to expect people not to make mistakes. If your company’s culture encourages admitting to mistakes, it frees people up to be creative and take some chances.
4. Infect Your Employees With Trust
Creating a culture of trust starts at the top. I knew that I and my partners had to hold ourselves to the highest standards. We had to set the example to make a terrifically strong company. If we could be trusted, then that example would flow through the company.
We all played by the same rules. Everyone flew coach. No one stayed at five-star hotels. We paid our vendors and our employees on time. We held people accountable for their actions and words, just as the partners expected to be held accountable by our entire staff, our customers, and our vendors.
We were open with our customers, showing them exactly how USI was saving them money and how we were compensated.
We expected people to be true to themselves. When I was growing up, my mother often quoted Polonius’s advice to Laertes in Shakespeare’s Hamlet, “To thine own self be true.” That quote has guided me throughout my life.
Copyright © 2013 by Ed McLaughlin All rights reserved.[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]