Читать книгу Upstanding - Frank A. Calderoni - Страница 9

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.