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The markets are in turmoil, the economy sucks, so what kind of corporate culture makes your small business, company or startup an attractive place to work?

Short answer: a culture of fiscal intelligence.

Long answer: a culture that spends its money wisely, eliminating low ROI frills and cuts without selling the company’s future down the drain.

This doesn’t mean substituting crappy coffee for the good stuff and eliminating free soda.

It does mean listing all the frills—executive and worker alike—and polling your people to find which are really paying off and which can be scrapped—not a decision made by management, but one that your people hash out and agree to before it’s a done deal.

Sometimes good coffee and soda have a higher ROI morale-wise than you would think.

All this should be doubly true for startups, but it often isn’t. Yes, your money is banked and if you’re VC funded, as opposed to angel or bootstrapping, chances are you’re pretty flush. But having it doesn’t mean you need to spend it.

If any company thinks that cushy perks are attractive in this economy think again. Think just how naïve/ignorant/arrogant a candidate must be to expect a large sign-on bonus or fancy perks given current economic conditions. Not to mention how financially stupid any company still offering them appears to a candidate.

The smartest companies build fiscally intelligent corporate cultures from the beginning, so that when they have to tighten down no one is surprised.

Throwing money around is always stupid, whether in business or personally.

I’ve heard from companies of all sizes and managers at all levels why this one candidate was worth X more than anyone else walking and how not getting her could deal a crippling, or even lethal, blow to the company.

If you ever feel that way, remember two inimitable truths.

• If that not having that one specific person could bring down the company it’s unlikely to succeed anyway.

• The candidate who joins you for money will always leave for more money.

Remember, the goal is a lean, mean, innovative, motivated machine—not a lean, mean, depressed one.

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Today is a very special day. I’m pleased and proud to introduce Richard Barrett, who will be writing every Tuesday from now on.

Richard is the creator of One-to-One: Business Relationships and has over 20 years experience in technology development, sales, and marketing. He served as President of Mobileforce Technologies, Vice President of Sales and Marketing for two start-up companies, Vinca and Nucleus, and co-founded Adaptive Data Systems, which pioneered the Small Computer Systems Interface (SCSI) standard.
Richard holds an MEE and BSEE from Rice University and has published five books, many professional papers in technical journals, and numerous articles in trade magazines.

Richard brings a new dimension of business information to both stimulate your MAP and help your business thrive.

The first few years of this new century were only the warm-up! Business change continues to accelerate. If your business is not actively planning for major changes, then it may already be falling behind the curve!

Consider these changes already reshaping the global business landscape:

1.    Inflation is coming. China and India are driving raw materials prices. The weak dollar policy by Fed has contributed up to 7% in the increasing price of oil, which ripples throughout every consumer good in the economy. The Consumer Price Index (CPI) increased by 1.1% in June, which is the largest monthly increase since June, 1982 (Wall Street Journal). Annual inflation will almost certainly exceed 10% in 2009, and likely go higher in 2010.

2.    The price of gasoline is already shifting the workplace. Who can afford to commute, much less fly? With airlines reducing service across the board, how will you deal with remote workers and even more remote customers?

3.    GM Introduces New Line of Layoffs for 2008 – 30,000 this year, more coming next year. The US manufacturing sector will continue to shrink, with massive restructuring yet to unfold. Count on the federal government to use your tax dollars bail out GM and other automakers.

4.    Coming soon, the new US Workforce: Older and wiser and ready to retire. These workers have irreplaceable institutional knowledge, often unique and usually undocumented. How will your company retain these workers, find new workers and deal with the loss of critical knowledge as the older workers retire?

5.    Healthcare, the line item that ate Detroit. Is your business next on the menu?

6.    The new world – online communities. What is a wiki? What is UGC? How will these new online trends affect your business? What opportunities do they present for your business?

7.    Climate change – it’s real, but what does it mean for your business? Green is good. But, can you paste it on? Don’t be distracted by long-term global change. Identify immediate, local changes that may be opportunities for your business.

a.     Water will move. Drought, fire, floods will follow.

b.     Coastal insurance will skyrocket even as coastlines move and shrink.

c.     More erratic weather will increase production risks, disruptions, and costs.

d.     Food production areas will shift. Disruptions in food supplies will become common.

8.    Remember the mortgage crisis? It will continue to restructure the financial industry of the world through 2010. The credit crisis will consume weaker companies throughout the next year. After the US government nationalizes Fannie Mae and Freddie Mac, US taxpayers will pay the bill in higher interest rates and increased taxation. Brace for tighter credit and further pressure on the US housing market. How strong is your balance sheet? Clean-up will exceed $2 trillion, or 15% of the entire US GDP.

9.    The world is not flat. The economy is shifting, sliding far eastward toward Asia. How will you extend your business into Asia?

10. The world is not flat on the other side, either. Cash is sliding near eastward to Oil. Is your new banker (or owner) Middle Eastern?

11. US Presidential Election – Lawmakers will create confusion and uncertainty. OK, there is nothing new here.  The next President and Congress will have a full plate of problems. Regardless of any candidate’s agenda, the problems are already in place and restricting a President’s range of action. Congress and the President will likely continue to dally and kowtow to lobbyists, creating even more damaging incentives like the mandates and subsidies for ethanol. Don’t expect any help from your elected officials.

How mobile is your business? Can you move portions of your business to regions with lower taxation, better labor, and more flexibility for your business?

Your business will change in 2009. If you stand still, external forces will drive the changes. Take time now to understand how these changes will impact your business.

How will you reshape your business before these external forces do it for you?

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Oh goody. More support for my decades of harping on the importance of corporate culture. I’ve been preaching that corporate culture was number one on candidates’ list of “wants” since the late Seventies (Good grief, where did the time go?)—long before most companies would listen.

Hollister, a Massachusetts staffing firm, just published a survey confirming this. And although it was done strictly in Massachusetts, it’s representative—more so because these are hardheaded Yankees, not touchy-feely Californians. Nor was it a survey of Millennials or moms, just a cross section of people.

“The Workforce Survey polled over 1,000 people throughout the Commonwealth, both employed and unemployed. When asked to rank which factors contribute most to their job satisfaction, the majority of people polled ranked Company Culture first followed by Opportunities for Growth, Employee Appreciation, Work/Life Balance, and a good Benefits Package. Listed last was Competitive Salary/Pay.”

As I’ve always said, “The person who joins for money will leave for more money.”

Amusingly, opportunities for growth, employee appreciation and work/life balance are either part of, or the results from, a good culture—even a good benefits package reflects a company’s culture.

Click the link, download the survey and then give some thought to your culture and how it performs in these areas.

What’s in your culture?

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Do you consider an offer of help charity?

Here’s the background for my question.

Yes, I earn my living as a coach. But on both of the blogs I write I have a standing offer to my readers for free coaching assistance. Not only has no one taken advantage of me, no one has taken advantage of the offer.

I often help to friends and associates when they hit a snag and my expertise can ease the problem. Again, none have taken advantage of me.

I can afford to do this because what’s often a challenge to one person is easy to another with that particular expertise, so it’s not like I’m offering up the next X years of my life.

That’s the background, here’s what happened.

A guy, call him Jim, and I are volunteers for the same professional organization and have gotten to know each other over the last few years. Jim is CEO of a small, privately-owned company.

To make this short, we were talking on the phone and Jim mentioned that he had to replace a person on his staff and it was critical to make the right choice.

So I offered him some coaching, he said “great,” and I said that I’d send some written material that I used in my practice and then we cold talk.

When I didn’t hear back in a couple of days, I resent the files thinking that they hadn’t gone through (happens all the time).

Jim replied as follows, “I will not waste / take your time without compensation. Perhaps calling it charity is a poor choice, but if I am not paying I will not waste / take your expertise.”

I wasn’t looking for compensation—of course, I wouldn’t have turned it down if it was offered, but in companies such as Jim’s I know that it can be a difficult sell to the owners—but it annoyed me no end that Jim made the decision based on his assumptions.

Didn’t ask/discuss/mention, just decided.

Do you agree with Jim’s actions?  Am I annoyed for no reason?

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Nerys Wadham, in commenting on the changes in the corner offices at BP and GlaxoSmithKline, says, “…culture perhaps being less about ‘the people’ collectively than the CEO individually. The tone, look and feel of a firm are to a great extent set from the mindset and world view at the top.”

I can’t stress enough how true this is.

It’s the boss’ MAP (mindset, attitude, philosophy™) that creates the form and shape of the corporate culture.

It doesn’t matter if it’s a mom and pop operation, startup or global giant; whether the company has two, two thousand or twenty thousand employees; whether the boss is called owner, founder, president or CEO.

Best Buy’s vaunted ROWE could not have taken root, nor would it have spread throughout the company, without a top boss who enabled the bottom-up culture in the first place, as well as providing the fertilizer that allows ideas to bloom.

It’s not enough to announce the cultural attributes in which you believe, such as no politics, and then ignore political actions because you believe that your senior staff are adults and won’t engage in behavior that goes unrewarded.

Even if you want to manage your culture by benign neglect, people need to know that there are repercussions for actions that flaunt the corporate culture just as there are for actions that violate legal issues such as harassment.

All this is just as true for the individual subcultures that establish themselves around every manager in the company.

Creating and caring for the culture around you should be written into every manager’s job description at every level.

If that bothers you, just remember that culture affects productivity, engagement, innovation and retention.

And if that’s not enough motivation for you to pay attention then stay focused on the MY-CCF mantra—my compensation, my career path, my future.

What do you do abut culture?

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Last month I suggested you join a discussion going on at Business Week, offering readers the chance to weigh in and comment on serious workplace topics.

The August 25 issue offers insights gleaned from readers and experts to which I’ll be referring over the next few weeks.

First up are some interesting comments from an interview with Jim Collins of Good to Great fame. Here are some comments that struck me as excellent wisdom.

“…a “stop-doing” list or not-to-do list is more important than a to-do list, because the to-do list is infinite. For every big, annual priority you put on the to-do list, you need a corresponding item on the stop-doing list. It’s like an accounting balance.”

How true! In all my experience I’ve never seen a to-do list, professional or personal, at any level or walk of life that could realistically be finished, although they were constantly added to and/or rearranged.

That made them a continued source of frustration and demotivation.

There’s a reason that IBM’s slogan is ‘THINK’ and Collins research shows that those who with the highest level of effectiveness give themselves time to think. And while his solution takes a lot of self-discipline it’s not rocket science.

“The key is to build pockets of quietude into your schedule—times when you have an appointment with yourself and it’s protected. I have on my calendar “white space” days. I set them six months in advance, and everyone around me can see them. It’s not that I’m not working, but absolutely nothing can be scheduled on a white space day.”

Technology is the excuse I hear most often for not doing this and, again, the solution is grounded in the self-discipline required to turn things off.

“You don’t report to your BlackBerry” should be engraved on your frontal lobe.

Collins also offers great advice to all those functioning in bureaucratic organizations sans the power to alter the situation, but with potential worth staying for.

Although Collins focuses on senior executives with corner office potential, his advice resonates for workers at any level.

“They were focused on what they could control. That is Job One. But they were also really good at figuring out the three to four people in the organization who really mattered and became very good at presenting to them evidence and arguments that were persuasive.”

This is advice that anyone can follow. Instead of allowing all the stuff that you can’t control or change to frustrate you, focus on what you can do while learning and tapping into your company’s social network.

Collins even answers everybody’s question, “How long should I stay—when should I give up and leave?”

“If you produce exceptional work, your ability for influence is very high. Most people, even in bureaucracies, are hard-working, well-intentioned people trying to do good things. If you ever wake up and say the majority of people here aren’t that, then for sure it’s time to jump.”

There’s a lot more packed into a fairly short interview. I hope that you’ll take a moment to read it.

What resonates most with you?

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Great interview and insights in an article from HBS Working Knowledge regarding gender differences in Wall Street stars. Even if you’re not a recognized star or that’s not your field I guarantee that the information will be useful.

Why? Because the things that make the difference between women’s success and male failure apply to all.

According to HBS professor Boris Groysberg, “Women tend to do better after a move for two reasons.

One is that they are more invested in external than in in-house relationships. There are four main reasons why star women maintain external focus: uneasy in-house relationships, poor mentorship, neglect by colleagues, and a vulnerable position in the labor market. External focus makes them more “portable” in terms of making a positive move, but can cause problems if they want to progress within their own organization, because you need a solid internal network and good political capital to get things done in organizations. Anyone who focuses mostly on external relationships will not have that.”

Think about it. Forgetting the star function, external focus is death on retention, guaranteeing low loyalty and high turnover.

And as to managers creating women-friendly environments, Groysberg says, “The consequence of that is when these managers leave, the female-friendly environments disappear.”

One way to make everyone a star is to encourage your people to build their external relationships while providing a culture that facilitates the in-house relationships that make people want to stay.

What do you do to give your people both?

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One of the things that RampUp does for its startup clients is help implement our unique approach to awarding stock options. The original methodology was conceived by RampUp’s angel Al Negrin for his own startups and we’re currently in the process of turning the consulting service into a software program called Option Sanityâ„¢.

Among all the neat things that Option Sanityâ„¢ does is track award dates and provide an audit trail that discourages backdating.

It also provides the intelligence necessary to avoid the level of idiocy present in TeleTech Holdings’ restatement of 12 years’ worth of financials dating back to 1996.

Yup, 12 years of misdated stock options, but no misconduct!

“If we eliminate misconduct, we find ourselves in the land of cluelessness, sloppiness and ineptitude… There were other goofy mistakes, like recording option grants for folks who were no longer on the payroll…And the firm’s options accounting treated some consultants like employees.

As in many of these options messes, the compensation committee’s use of “unanimous written consents” instead of real meetings (and befuddlement over who had authority to make grants) led to massive confusion about the dates on which options were officially granted. The investigators had to reconstruct the circumstances behind every grant to figure out the “appropriate” date (and hence the real exercise price) for each one. The company admits that some dates “could not be determined with certainty.”

All of which goes to prove Hanlon’s Razor: Never attribute to malice that which can be adequately explained by stupidity.

What do you think?

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A post on Yielding Wealth asking readers how they defined ‘wealthy’ reminded me of a post I wrote year ago about executive pay, which included having your taxes paid on various perks, and even on compensation.

But the “golden coffins” being made public due to a rule change 18 months ago really blow me away.

This isn’t about life insurance; it’s about really big bucks if they happen to die while still in office. How big?

“Eugene Isenberg, the 78-year-old chief executive of Nabors Industries Ltd… If Mr. Isenberg died tomorrow, Nabors would owe his estate a “severance” payment of at least $263.6 million, company filings show. That’s more than the first-quarter earnings at the Houston oil-service company.”

At 78 there’s a good chance he’ll collect, too.

And then there’s the death-related non-compete clause.

“The CEO of Shaw Group Inc. is in line to be paid $17 million for not competing with the engineering and construction company after he dies.”

We all know that the pay-for-performance principle often doesn’t hold true, but death benefits have to be the ultimate nose-thumbing on that subject.

Shareholders are in revolt and have forced Comcast to scrap its plan to pay the 88-year-old chairman of its executive committee his $2 million annual salary for five years after his death.

In addition to hard cash, stock options are subject to accelerated (read: immediate) vesting resulting in yet more money upon death.

Certainly sounds like a good motive for a murder mystery—unless you’re a shareholder.

Read the article and you tell me, are death benefits fair?

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Does one really have to be an accountant, lawyer, minister or whatever expert in order to recognize when something is likely illegal or, at the least, unethical?

“That’s not my area of expertise” is the excuse du jour on most of the financial games being played—especially option backdating.

I find it very amusing when I hear high-powered corporate CEOs explaining that they don’t have the financial or legal savvy to understand that backdating is a no-no.

In one high profile case dating back to 2006 involves Dr. William McGuire, former CEO of UnitedHealth Group, who “…relied on others to assess the legality and appropriateness of backdated stock options granted to top executives and new hires. As such, all allegations against him in a shareholder’s lawsuit should be dropped.”

I love this part, “Dr. McGuire has no formal training or degrees in finance, accounting or law,” the brief states. “His only professional training is as a medical doctor with a specialty in pulmonology.”

Maybe no formal training, but please! There’s no way he was hired to run one of the largest health-care companies in the country without good business knowledge and skills.

No formal training, but didn’t he read or listen to the news? The backdating went on for 12 years and there certainly were news stories of other companies that got in trouble doing it during that time. The cost? $1.56 billion downward restatement of earnings.

But it’s the Cablevision case that really cracks me up.

“Cablevision had awarded 400,000 stock options to a deceased vice chairman, while making it appear as though the options had been granted prior to his 1999 death.”

Cablevision just settled, “…terms of the settlement agreement, certain present and former Cablevision directors and execs will pay Cablevision $24.4 million, while Cablevision’s liability insurer will kick in another $10 million. Cablevision has also agreed to adopt a number of corporate governance changes relating to stock-based compensation awards.”

Who said that greed ends with death?

(To learn why I chose this picture just click it and read.)

Heard any good corporate greed stories lately?

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