Creating a Culture of Unconditional Love

Creating a Culture of Unconditional Love

by Claudio Fernández-Aráoz  |   9:00 AM January 8, 2014

During my first decade working in the Buenos Aires office of Egon Zehnder in the late 1990s, our Argentine executive search practice soared, recording the highest per capita financial performance in the whole firm for five consecutive years. But we all know what happened in 2001. By the end of the year, Argentina’s economy had collapsed.  It was the largest sovereign debt default in world history, and GDP fell by some 30% coupled with a 300% currency devaluation. Over 12 days, five different presidents took control of the country.  One bank lost more money in a few weeks than it had accumulated over the previous century.  There were companies with losses larger than their sales, and one month the number of new cars sold in the country was lower than the number of cars stolen!  As you can imagine, that was not an easy time for me.  No one in their right mind was looking to hire a search consultant.As that dramatic disintegration played out in early 2002, I had to present our office’s results and perspectives at the firm’s annual partners’ meeting in Switzerland.  As soon I walked on stage, the audience of some 200 of colleagues went dead silent, waiting to hear what I would say. I was solemn and candid. I told them that our brilliant past in Argentina would never be replicated; that I was expecting big losses and didn’t see much future for our firm in the country. I said I would wait a year or so and then tell them very frankly whether it made any sense to stay.

As soon as I finished, one of our Dutch partners, Sikko Onnes, stood up and said: “Claudio, if I understand what you are implying, you are totally wrong.  Our partnership has benefited from the extraordinary contribution of your office for well over a decade.  Now it’s the time for us to supportyou.  Your only job is to go back to the Buenos Aires office and tell every single member of the consulting and support staff that they all have our full and unconditional support.”

The whole group then stood up and applauded.  I tried to thank Sikko, but I couldn’t because I was in tears. What I felt then, from my colleagues, was unconditional love.

Thanks to Egon Zehnder’s corporate culture, it’s something I get at work every single day, and it’s what encourages me to give my absolute best in return, now for 28 years.  Any firm that wants to not only hire the best talent but also pull them together into strong and lasting teams can’t do so without fostering a compelling and inspiring culture.  That’s how you overcome challenges, and keep your mission going in your absence.

All serious research, all respected business thinkers, and all great leaders confirm this point. As Peter Drucker put it, “culture eats strategy over breakfast”.  Just take a look at Southwest Airlines, the company which saw the greatest value expansion in the S&P 500 between 1971 and 2001.  Herb Kelleher — its CEO for 35 years — once said: “Given enough time and money, your competitors can duplicate almost everything you’ve got working for you. They can hire away some of your best people. They can reverse-engineer your processes. The only thing they can’t duplicate is your culture… Do you know the difference between strategy and culture? Well, when Napoleon was in Paris in a room with all his generals around a table, discussing how to attack Russia, that’s strategy. But what makes a million men march to Moscow, that is culture!”

Of course you still need to hire outstanding performers with great potential; appoint them to the right roles; identify, retain, motivate and develop your brightest stars; and build great teams fit for the purpose. But you can’t make the mistake of ignoring culture. If you do, you’ll achieve very little, and it won’t last long.   Your people won’t go as far as they could, or they will leave.

So, how do you build a great culture?  It starts with you, the leader, using it as a filter for hiring.  My model is Egon Zehnder himself, who founded our firm and gave it his name. From the beginning, he vowed to consider only the strongest candidates to join him:  people with double degrees from top schools, international experience, high emotional intelligence, and remarkable career trajectories.  More important, he would never, ever, hire anyone who was not dying to work in a highly professional, ethical, collaborative firm.  Before I joined, I was interviewed by some 35 partners, including all executive committee members, in five different countries, over a single week.  Egon personally checked my references with McKinsey, my employer then.  That’s the standard process, and it remains intact today.  Until he retired as CEO, Egon met with and approved every single consultant who joined any of our 68 offices around the world – for 36 years. Today, his successor, Damien O’Brien, continues the practice, no exceptions allowed.

The second step in building a culture is compassionate coaching.  Once we’re adults, our personal growth comes mostly from exposure to the complex challenges discussed in the previous section and from great developmental relationships – with bosses, mentors and colleagues who engage us, motivate us, inspire us, and help us succeed.  Great leaders are great listeners, who make their employees feel valued, see the bigger picture and feel a part of something important.  Fascinating recent studies using fMRI (functional magnetic resonance imaging) to track neural activity show how  that sort of coaching arouses the parasympathetic nervous system, invoking cognitive, emotional, perceptual and behavioral openness and improving performance.  It also creates the conditions for neurogenesis, allowing people to learn and develop new healthy habits and competencies.  By contrast, coaching that focuses on weaknesses arouses the sympathetic nervous system and does just the opposite.  Compassionate coaches are not just positive cheerleaders but also committed guides, conscious of the state and progress of their team and the individuals in it. They are also timely provocateurs, offering the right dose of tough love when necessary.

These hiring and coaching practices demand extraordinary discipline.  But it’s worth it to create a culture of unconditional love that perpetuates itself and binds your team together into a whole much bigger than the sum of its parts.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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