business news in context, analysis with attitude

Hi, I’m Kevin Coupe and this is FaceTime with The Content Guy.

Couple of great stories lately that struck me as highlighting innovative organizational behavior and that I thought were worth sharing here on MNB.

Both were from the New York Times. The first one was in the “Corner Office” column, a Sunday feature in the business section that has terrific interviews with CEOs. (If you’re not reading it each Sunday, you should be.)

The interview was with Steve Stoute, CEO of the Translation LLC ad agency, and he talked about the importance of organizations having very specific belief systems, and of being vigilant lest bad behavior erode those systems and lead to the demise of the organization. Those belief systems often are summarized in mission statements, and Stoute says:

Sometimes, I would even go as far as to have people sign a group document — almost like a constitution — so that everybody is aligned around the mission statement, so everybody knows what they’re responsible for. I’m very upfront, I expect the best, and I hold people accountable for everything that comes out of their mouth. Don’t say you’re going to do something and not do it, because in a company of this size, everybody is directly responsible for the person next to them.

It’s like one of those moments where everybody’s holding hands. So if somebody doesn’t do something, it’s felt throughout the organization. The organization’s not big enough to withstand those kinds of errors. At big companies, that happens all the time, and it can take years before it starts to affect the bottom line. Small organizations have the benefit of being nimble, but the threat is that when one person catches a cold, everybody catches a cold.

While he’s talking about small organizations, I think the concept can apply to big companies, too ... maybe they have to be broken down into smaller segments (like, say stores?), but it is critical for any business to be coalesced around a point of view and a way of doing business.

The other story that intrigued me was about Boston Beer Company and its founder Jim Koch, and how something he did back in 1995 could be brewing up a small revolution in how companies go public.

To be honest, I didn’t remember this ... but when Koch took his company public 17 years ago, he structured it so that his loyal customers were at the front of the IPO line, “and made sure that they could buy shares at the most favorable price. He wanted to help beer guys, not Wall Street guys. He did this not as a philanthropist but as a die-hard capitalist, believing that his fledgling beer company would be better off in the long run if he democratized its initial public offering.” In Koch’s words, he was “more interested in beer drinkers than wine drinking fund managers.” And he acted on that belief.

Koch even hung fliers on six-packs telling customers that he was selling shares in the company. He guessed, when talking to the SEC, that some 30,000 people would be interested in buying shares ... and some 100,000 people sent in checks. (He had to run a lottery to pick out 30,000 people at random, and sent 70,000 checks back.)

There are great examples of business leaders thinking differently.

In the case of Steve Stoute, he seems to understand that his organization is only as powerful as the people on the front lines, and he’s found a way to get people to focus on a corporate value system. And in Jim Koch’s case, he seems to have avoided the problem of putting Wall Street first and Main Street second.

Those sound like pretty strong cultural imperatives to me.

That’s what is on my mind this Thursday morning. As always, I want to hear what is on your mind.

KC's View: