Ed Catmull of Pixar was interviewed recently, and there are a number of great insights that make the McKinsey Quarterly piece a joy to read. Here’s just one snippet, where Catmull talks about sending signals by company actions [emphasis mine]:
Huggy Rao, Robert Sutton, and Allen Webb, Staying one step ahead at Pixar: An interview with Ed Catmull
Ed Catmull: Here is a simple example, so simple that most people would overlook it: our kitchen employees are part of the company. I think a lot of companies overuse the phrase “our core business” — for instance, “making food for our employees is not our core business.” So they farm it out. Now, in a lot of companies, including ours, there are certain things you do farm out. You don’t do everything yourself. But this notion of “our core business” can become an excuse for being so financially driven that you actually harm your culture.
If you farm out your food preparation, then you’ve set up a structure where another company has to make money. The only way they can make more money, which they want to do, is to decrease the quality of the food or service. Now we have a structural problem. It’s not that they’re bad or greedy. But in our case, the kitchen staff works for us, and because it’s not a profit group, their source of pride comes from whether or not the employees like the food. So the quality of food here is better than at most other places.
Also, the food here is not free — it’s at cost. Making it free would send the wrong signal about value to the kitchen crew. Everybody loves the chef and the staff. We have people who are happier. They’re not gone for an hour and a half because they’re going somewhere else to get a decent meal. They’re here, where we have more chance encounters; it creates a different social environment. That’s worth something to us, to our core business.
Take notes, people. For example, read his thoughts regarding slow-to-fire:
[…] the cost to the organization of moving quickly on somebody is higher than it is if you let the person go on too long.
Or the implicit fear that people feel when they join a new organization, and that causes them to not ask culture-oriented questions, and that can lead to missteps:
When you go to work for a company, they tell you something about the values of the company and how open they are. But it’s just words. You take your actual cues from what you see. That’s just the way we’re wired. Most people don’t talk explicitly about it, because they don’t want to appear obtuse or out of place. So they’ll sometimes misinterpret what they see.
A great interview with great insights in every paragraph.