"We're all going to die!" This was how Ryan Allis, CEO of iContact, started his presentation at a recent Greater Raleigh Chamber of Commerce event this week. He credited another speaker for the line, but his point was made: keep things in perspective. He shared stories that proved having and staying true to one's goals and values can contribute to the bottom line. He should know. He set a goal when he was 16 that he would have a $1 million business by the time he was 21. Sadly, he missed the milestone… by 18 days.
Allis said he gave up a $200,000 job right out of high school to go to college. (Granted, it was the University of North Carolina, not that I'm biased.) While there, he and another Tar Heel started what would become iContact. The first year they lost $5,000. In 2008, they made $15 million. Allis described a corporate culture of practical jokes and parties that might have seemed alien to that audience, but sounded normal to someone recently moved from high-tech Seattle. He really caught my ear when he said his company used to have a list of 10 values "that was really sucky and nobody remembered them."
This reminded me of a study I carry to all of my trainings, "Inspiration and Cynicism in Values Statements." A survey of executive MBA students found, "On the whole, respondents evaluated the impact of their firms' value statements on decision-making positively." Reasons included: "positive outcomes… both inside and outside the company, guidelines provided for decision-making, increased accountability, and clarity of expectations." But I think it important to note that high-level executives made up half of those respondents. They may indeed use those values, but I am willing to bet most of their employees do not. Allis' statement surprised me because he had recognized at the top level what you generally only hear from people down the line.
In response, he took his senior leadership team on a retreat and came up with five values that form the acronym WOWME:
- Wow the Customer.
- Operate with Urgency.
- Without Mediocrity.
- Make a Positive Wake.
- Engage as an Owner.
From the scientific standpoint, this was not the ideal way to create the list. The study found respondents were most likely to feel value statements had an impact when everyone in the company was involved in creating them, which fits what we know about the psychology behind motivation. There's no better way to build buy-in than to involve from the start those from whom you want the buy-in. iContact is small enough that this could have been accomplished without a huge investment of time. Allis said they ended up laying off 10% of their employees who could not get on board with the new values as implemented. He probably would have lost far fewer with a bottom-up approach, and most of the turnover would have been voluntary, saving the company heartache and unemployment costs. Plus, each team in the company would have brought out its team values, in alignment with the eventual corporate ones.
That said, everything they have done to implement the values are right on target. I caught him for a quick interview after his talk. Allis said the values are used on performance appraisals and in coaching sessions. The company also has a values recognition program that is very high tech: a poster and stickers. Each time someone exemplifies one of the values, they get a sticker by their name. With a certain number of stickers, they get a gift card. The person with the most stickers at the end of the year gets a prize, Allis explained.
The company lives its values in the more general sense through its "4-1s" program, under which it gives each year:
- monetary donations equivalent to 1% of payroll,
- its product for free to area nonprofits,
- 1% of each employee's time (2.5 days) for volunteer work, and
- 1% of its equity to The Humanity Campaign.
Given the company's financial success, it seems to be fulfilling his statement, "The purpose of business is to create value and solve human problems…" Allis is personally proving you can do both with his own extensive volunteer work, including serving as the head of Nourish International, which engages college students to fight poverty.
I can't resist pointing out, however, that the whole company may not have bought into the values yet. Allis would probably be surprised to learn that five months after WOWME was introduced, his company Web site still lists the old 10-item values list!
Source: Urbany, J. (2005), "Inspiration and Cynicism in Values Statements," Journal of Business Ethics 62:169.
