Edward R. Murrow, the famous American broadcaster depicted in the movie Good Night, and Good Luck once said, “The obscure we eventually see, the completely obvious takes longer.”  In your quest to building a successful company, do not assume the creation of a great work environment is complicated.  In fact, the steps are quite simple, if not completely obvious from a people practice perspective.

Company Culture Flows from the Top

In the people practice profession, there is the tendency to over-complicate work culture and how it impacts the bottom line.  The basic principles of a great work environment are quite straightforward, and rest entirely on the leadership’s shoulders.

One of the most important business strategy questions leaders can ask themselves is, “How do I create a great work environment that attracts, motivates and retains the best and brightest talent?”  You might be surprised the answer is not any of these; above market compensation, best in class benefits, top trends in office space design or technological superiority.  The answer is summed up in one, very important, highly-relational, powerful word: trust.

Definition of a Great Workplace

The Great Place to Work Institute, after twenty years of thorough research on the top high-performance companies in America, formulated their definition of a great workplace as a place where employees “trust the people they work for, have pride in what they do, and enjoy the people they work with.”

A leadership team who can be trusted by employees is well on its way from average performance to a great workplace where magic happens.  The good news is employees are not necessarily looking for expensive perks, like coffee bars, gyms, restaurants, game rooms, hair salons and spas, daycare, on-site doctors and nurses, media centers, theaters, dry cleaning, or concierge services.  Although these benefits are very nice options, they do not guarantee a great work environment.

When leaders sincerely care for their people and build an environment of trust, employees will believe in the company mission and develop respect for their co-workers.  Trust is like the secret ingredient found in Coke.  Without it, the recipe will not work.  Many have tried to copy great workplaces without trust and failed.  Without trust, the environment will not click, no matter how grandiose the company’s compensation, benefit and work/life programs.  It is amazing how creating an environment of trust, the missing ingredient in many average performing companies, will hasten the transformation of your company into a great workplace with the potential to outperform your competition many times over.

The Seven Leadership Principles

How does a leader create a great workplace through the simple ingredient of trust?  Robert Levering, founder of the Great Place to Work Institute, who has many years of experience researching successful companies, states there are seven principles leaders must follow to build and maintain trust in their organization:

#1 - Leaders share information. The leaders of great work environments are willing to share information with their entire workforce.  They are not afraid to provide employees of all levels important updates about the company’s status, whether financial, non-financial, positive or negative.  Withholding important company information drives a wedge between employees and leaders, creates misunderstandings, fear and distrust among employees who spend most of their waking hours at your place of business.  Since employees are investing their lives with you, isn’t it likely they deserve to know where the company has been, where it needs to go, how it’s performing and how their efforts make a difference?  Open up the internal information highway and you are well on your way to greatness.

#2 - Leaders are accessible. Leaders in great workplaces do not hide in their execu-caves.  Effective leaders get out of their offices and walk around and mingle with employees.  These same leaders allow employees to voice concerns without fear of reprisals or losing their jobs.  Many of the 100 Best Companies hold regular lunches with employees where leadership shares information, shows sincere concern for employees and listens to their concerns.  More importantly, leaders follow-up on employee concerns and improve the work environment with each interaction.

#3 - Leaders are willing to answer the hard questions. Trust is built when employees see leaders who are not afraid to stand up and field the hard questions.  Employees do not expect leaders to have all the answers, but develop strong trusting relationships with leaders who honestly state they do not have an answer but will respond at a later date.

#4 - Leaders emphasize two-way communication. Leaders who actively listen to employees concerns and engage in two-way communications earn the trust of employees.  Most management teams are good at sending communications or orders down the pipelines, but not necessarily comfortable with receiving feedback from their workforce.  Great workplaces have open, two-way channels of communication.

#5 - Leaders always deliver on their promises. Miss this one and you’re done.  Making a promise and not following through is like going thermal nuclear on your workplace; people get burned.  Employees want to know if leaders will deliver on their promises.  This includes the small things as well as the big things.  Treat your employees like your best customers and you should perform very well in this area.

#6 - Leaders show recognition and appreciation. Deep down employees crave recognition for a job well done.  Receiving recognition and appreciation is one of the biggest unmet needs employees have in today’s society.  Go ahead and make a big deal about employee and team accomplishments.  Brag on your employees in front of other employees  Then sit back and watch a special, positive, energizing, company culture develop in front of your eyes.

#7 - Leaders demonstrate sincere, personal concern. According to the most recent Towers Perrin Global Workforce Study, the number one driver leading to employee engagement is determined by whether senior management is sincerely interested in an employee’s well-being.  You can’t fake sincerity.  It shows in your attitude and other non-verbal clues.  If the leaders are not sincerely concerned for their employees as people, your best talent will likely move to a place where they are better appreciated.

Live by these leadership principles and your organization will soon be inundated with resumes from the best and brightest talent in your industry wanting to work for your organization.

* * * * * * *

This article was originally written for The Business Owner Journal and will appear in the November/December 2008 issue.

Before taking a position with a new company, how does one avoid a toxic company culture? Applicants are well within their rights to interview current employees to obtain honest feedback on the company culture. If you are not allowed to interview existing employees of your choice, this could be a sign your future employer is hiding a toxic workplace. For those in the job market, the following are potential clues a workplace has a noxious work environment.

• Employees are not allowed to voice their honest opinion on workplace issues.
• Employees fall in or out of leadership’s favor without explanation, and as a result, are included or excluded from company events, projects or meetings.
• Employees with opposing viewpoints are not welcomed visitors to the executive suite.
• Employees are fired without warning or explanation, nor are they given the opportunity to address the real issues leading to their departure.
• Receptionists and assistants tend to be beautiful, attractive eye-candy for chauvinistic executives.
• Overweight people are routinely urged by leadership to exercise and made to feel inferior to their slender coworkers and leaders.
• Employees are expected to assume heavier workloads and work excessive overtime while legitimate requests for headcount increases are denied, all while the company is promoting the importance of work/life balance.
• Employees with excellent reputations are abruptly fired or transferred because their performance is suddenly unsatisfactory.
• The human resources department is viewed by leadership as an administrative function or transaction facilitator rather than a partner in developing great people and work environments.
• The human resources department merely follows orders from leadership and is afraid to question company practices.
• Rude behavior is routinely allowed.
• Employees who treat people with trust and respect are considered weak and not management material.
• Tough, no-nonsense supervisory behavior is rewarded.
• Executives are assigned reserved parking spaces.
• The CEO and his/her executive team rarely walk around the office to visit with employees.
• Company information or news is not consistently shared with the entire workforce.
• Employees routinely read breaking news about their company in the local newspaper or online news services rather than from internal company publications.
• Press releases are distributed to public media outlets prior to employee distribution.
• Political views of the leaders are expressed to employees, and the employees are expected to blindly support and/or vote for those causes.
• Executives have their own restrooms.
• The company has a code of conduct policy but does not provide regular training to leaders or employees.
• Employees are expected to intuitively know what is expected from them without explanation and can be disciplined for not following these unwritten rules of conduct or performance.
• Employees who raise legitimate company issues are summarily terminated without cause.
• Executives hire C-level and professional staff outside the approved recruiting process and do not carefully consider the recruit’s management style or their potential impact on company culture.

Anyone can have a bad day and lash out at a coworker. Civilized people will later apologize for their poor behavior. On the other hand, there are certifiably rude people in corporate America who have made incivility, rudeness and verbal abuse a way of life in business. The companies who employ these violent neanderthals in business suits should beware of their negative consequences.

In a recent behavioral study reported by Harvard Business Review, it was determined that workers on the receiving end of verbal abuse became impaired in their ability to perform tasks. According to researchers, “their studies indicate that after exposure to rudeness, people think hard about the incident—whether just ruminating or trying to formulate a response—and those thought processes take cognitive resources away from other tasks.”

“The mere thought of being on the receiving end of verbal abuse hurts people’s ability to perform complex tasks requiring creativity, flexibility, and memory recall,” according to Christine Porath of the University of Southern California’s Marshall School of Business and Amir Erez of the Warrington College of Business Administration at the University of Florida.

The study also found the environmental impact of rudeness to be very profound and overreaching to even those outside the receiving end of the abuse. Researchers stated, “Verbal abuse affects more than just those who experience it directly; it apparently can harm innocent bystanders.”

If you want your company culture to deteriorate with increasing doses of fear, risk aversion, inability to make decisions, and lack of communication, employ or promote rude people. In other words, trying to create a great workplace while employing rude people is a recipe for failure.

It is common for business leaders to allow executives, rainmakers, and movers and shakers to behave in a rude manner, including verbal and psychological abuse. Leaders falsely believe the rude rainmaker’s contributions overcompensate for the toxic venom they spew in the office. Some mistaken leaders believe a toxic tyrant’s abuse causes employees to work harder.

Do you want to build an energized, profitable and high-performance organization? Require your leaders to take a stand against rude behavior. At times doing the right thing is difficult—it calls for strength of character—but it brings great rewards. The CEO must weed out abusive employees no matter their position in the organization. By doing so, the organization can return to an environment conducive to creativity, flexibility, productivity and profitability.