Sunday, September 1, 2013

What's the Surest Way To Fail in Business?

This is my 50th post and I'm celebrating by taking a vacation and am writing this morning from my hotel balcony on Waikiki. That was an unabashed I'm-having-more-fun-than-you comment..... and I'm clearly warped to be writing on vacation... Anyway...

Going through graduate school I took a class in Organization Behavior. I liked the class because it was high-level and covered a number of important theories, and yet - the title of the course always bothered me. It seems like such a non sequitur. It's as if an organization has feelings or predictive behavior, and of course, it doesn't. Organizations and wine producers for that matter are made of people with feelings, perspectives, insecurities, and values. While marketing, sales, production, viticulture, and administration are all important parts of running any wine company, in the end without an established business culture used as a touchstone for behavior and decision-making, the other disciplines will struggle or even fail no matter how awesome the product or strategy. Leaving a company's values unclear or believing everyone just knows what you stand for without talking about it is the surest way to fail.

The Question of Cultures

I was reminded of this on a trip to Hawaii yesterday. We got on a plane out of Oakland for a 5 hour trip to Honolulu Hawaii in coach. Its always a long flight but I try and sleep so I get there quicker. That's a trick I learned as a kid when we drove to Disneyland from Concord. CA. Sleeping wasn't an option this time because there were a group of six Persians in front of us with a beautiful young 5-year-old boy. It was a party from the moment we took off. There was laughing, jumping and dancing in the isles, the child yelling at the top of his lungs. They were going to Hawaii and they were HAPPY and didn't seem to mind if others around them wanted to sleep.

Then next to me there was a 25 year old graduate of San Jose State from Mumbai. She was the second generation and it was her first trip to Hawaii and her longest plane flight ever... really nice girl. Her family of 8 people was all going out on a Norwegian cruise around the Islands. They too were happy and the parents were talking loudly behind us and unconsciously kicking our seats through the trip for some reason. The older folks got together in the isles and were laughing and dancing.... they seemed focused on themselves and didn't seem to mind if others around them were trying to sleep.

When the plane stopped, they started to push their way through the isles past people trying to get up. I don't know if it was a cultural behavior or not, but they missed the rule most of us learned in Plane Flight 101 that you wait until the people in front of you get out of their seats before you do.

Some people would take that description as a flight from hell. While it sure wasn't the best, you deal with what is on your plate. You get what you get and you don't pitch a fit. For all I know, to others around me, I might be thought of as rude for trying to sleep? Maybe I should have joined in their dance and forgot about sleep. Instead, I turned to the drug of choice on flights to Hawaii: Mai Tai's. Everything seemed to be better and in my slightly inebriated state got me thinking about corporate cultures and values.

In this case, we had distinctive and separate cultures on our part of the plane all operating independently. Thank god we didn't have to operate in some sort of a team to get to some common goal because there was a lack of commonality. How would we make decisions .... even the simplest like should we use the First Class bathroom if the other ones are full?

Organizational Behavior and Hospitality

How does that relate to wineries? We have become an international business. People come from far and near with wide-ranging cultural norms and biases. We are their hosts and have to be ready to help them have a memorable time. It's our opportunity to help them leave with a brand positive perspective on your winery, and our Country. You can't judge their behavior by our standards but should be encouraged to understand the cultures of your guests, learn their rules and be long-suffering if needed.

Second and more important, the USA is an immigrant country and is made of diverse families with different norms and beliefs. To be successful in business, we have to establish our own work culture that emphasizes hospitality as a base value.

Some of My Culture Beliefs and Examples

At Silicon Valley Bank I'm very proud of our culture. It's one where everyone tries to do the right thing. Profitability is important, but not as much as our values. Profitability I argue follows BECAUSE of our values. Everyone's viewpoint is appreciated and we've developed accepted ways to behave and make decisions. Debate-decide-deliver. We talk about "the shadow of the leader;" a concept that means leaders of organizations can't take a "do what I say, and not what I do" model or take credit for the success of others in our team. We believe in recognizing others' success and that we are not in competition internally. It's not a net-sum-zero game. There is much more to our Bank's culture and we are constantly talking about it and reviewing the fit.

On my specific lending team of 5 people, we have several rules that we adhere to that make behavior more palatable. I believe feedback is an everyday thing and that's what we do: give feedback on the fly when there is a teachable moment. We believe that mistakes are tuition and that pretending mistakes don't happen stops continuous improvement on the team and waste that tuition. We are fine with making mistakes. They happen and don't show up in reviews in any material way because they were already covered. Reviews, in fact, are kept as low-key as possible because they are an administrative thing, not a tool for improvement. They are never motivating (Don't tell HR I said that please).

We believe that we need to be direct and respectful in the way we communicate with each other. That means we hold each other accountable for our failings and speak our minds instead of supporting some circular gossiping sophomoric culture. We support each other in what we do and support our client's efforts. There is always someone on staff for our clients to reach. I believe I am responsible for my staff and each year ask in a safe manner, what things I need to do to improve and what they like. We believe we are in the hospitality business and our clients and their employees are our guests when they come to our offices.

All of those rules establish a culture within the Bank that is good for decision-making, respects individual beliefs and values, insists on team play, rewards success, inspires evolution and new approaches of doing things, and makes for one great place to work. Given time, the plane of people on my trip to Hawaii could come together to develop mutual respect and trust if we started first with addressing The Surest Way to Fail in Business and developed shared values. Our Bank and team are great places to work.

What about you? What are the rules that your company lives by? What are the values that are not negotiable? How are you reinforcing your culture? How do you measure your culture and success in achieving change? What thoughts and experiences can you share with the community about your learnings in building healthy and successful cultures in business.

Please log in and participate in the discussion. Oh ...... by the way, as you can see in the first picture, I made it to Hawaii! Aloha!


  1. Please share what airline you were on, so that I might never fly it for the remainder of my life. If the cabin crew refused to reign this family in so that the other two hundred people on board might have enjoyed their flight, there is something seriously wrong with their training and management.

    And to this family, I don't care what your culture is. Common decency and respect for those around you (particularly on a crowded airplane) are universal expectations.

    1. Thanks for the support UNK 10:46. The stewards on the plane had their hands full. They gave it a try. I try not to sweat things that are out of my control and ... honestly, if they were just screaming and angry, that would be one thing. But they were going to Hawaii and I tried to relate to their joy rather than complain about my circumstance. I got a short nap and a free mai tai. I counted that good.

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    1. [Deleted for a typo. Corrected and reposted . . .]


      You've heard this oft-cited quip:

      "How do you make a small fortune in the wine industry? Start with a large fortune."

      By extension, what's the surest way to fail in the wine industry?

      By not even starting off with a small fortune.

      Being capital-starved is the biggest impediment to success in any endeavor.


      Fortunes can "paper over" mistakes. (As so many of the arrivistes in the California wine industry have learned the hard way.)

      On the subject of soliciting and giving "feedback," two observations:

      From Fast Company
      (Issue 80, March 2004, Page Unknown):

      “How to Give Feedback”


      By Seth Godin

      -- and --

      From Fast Company
      (Issue 73, August 2003, Page Unknown):

      “Adding Value -- But at What Cost?”


      By Marshall Goldsmith

      ~~ Bob

      (And I suppose that photo of Diamond Head in the background is all part of . . . harrumph! . . . business “field research” Puh – leeze! )

  3. To Anonymus:
    That's exactly why there is so much conflict going around the world. Thinking that your way, is the universally accepted way to do things, is so lazy, selfish, and so wrong.
    Maybe in their country, all fligts have people dancing around. Maybe in their country they like to show when they are happy. Instead of trying to understand, embrace or at least tolerate other peoples behaviours, beliefs, etc... we tend to think that OUR way of thinking is the UNIVERSAL way of thinking, and thus, what everyone else is doing is wrong, therefore we have to change it.
    When you learn to accept others as they are, and try to learn from their customs and values, the world becomes a lot bigger and a lot more fun!

    1. We all have a ways to go. Anon's perspective is rational. I can tell you for certain if the trip were a business trip headed to Boston, there would have been far fewer understanding people.

      The point of the post however is figuring out how to have the right culture as a platform for business success. Looking at the crew, perhaps a different culture and discussion within the organization about how to deal with those situations would have made it a more palatable trip for everyone .... an assist in finding some common ground? It is the point. Even a ton of capital wont fix a business with a wrong culture. If you think otherwise, just look at the first reason for M&A failures: Integration. A merger between two companies can look great in theory, but getting the people to come together when there are different accepted norms many times is missed in the integration plan and the merger falls apart.


  4. Love your attitude Mr. McMillan! I hope I can adopt your attitude when the situation warrants it:).

    Hope you enjoy your vacation in Hawaii! if you find yourself in Maui, look for a dive bar called the Sly Mongoose:)


    1. It takes a special person to not enjoy Hawaii. Someone said God created the earth in 7 days, but it was missing something so He created Hawaii.


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