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Zenefits and the Problem of the Chief Enabling Officer

Yesterday the Wall Street Journal had an article about the rowdy culture at Zenefits, a health insurance brokerage based in San Francisco. They’d gotten their hands on an email to employees which read, in part:

“Do not use the stairwells to smoke, drink, eat, or have sex. Yes, you read that right.”

The article detailed the difficulty that new CEO David Sacks is having in terms of curbing the out-of-control culture there. In memo after memo, says the Journal, he’s been urging employees to act in a way that’s more suitable to the type of work they do – but frankly admits “it is too difficult to define and parse what is ‘appropriate’ versus ‘inappropriate’ drinking in the office.”
Yet Sacks appears very clear that the company’s cofounder and former CEO, Parker Conrad, is to blame for its problems. As the newspaper reported several weeks ago, the new CEO sent an email to employees that read as follows:

“The fact is that many of our internal processes, controls, and actions around compliance have been inadequate, and some decisions have just been plain wrong. As a result, Parker has resigned.”

Buzzfeed provides a more vivid portrayal of the company’s dysfunctional culture, complete with Instagram photos (the below is a partial screenshot from the article, showing former CEO Parker Conrad; original source @sidrashaw on Instagram). 
Buzzfeed offers a different quote from Sacks’ communication to employees – one that speaks directly to culture:

“We must admit that the problem goes much deeper than just process. Our culture and tone have been inappropriate for a highly regulated company.”

The problems at Zenefits offer a teachable moment for the rest of us, in particular when it comes to the significance of organizational culture. Because more and more, business professionals in the United States are coming to understand what European brand professionals have known for a long time:

Your brand, your business, and your organizational culture only appear distinct; in reality they are dimensions of the same reality.

In short, to diagnose a company’s problems, one needs to take a holistic perspective – much like a physician is most effective when working with other specialists, to diagnose a condition in the context of all the symptoms a person is experiencing.
So all manifestations of dysfunction are related:
  • Outlandish behavior that becomes part of the corporate norm – sex in the stairwells, drinking to excess in a work environment
  • Public shaming and blaming, with top executives throwing shade in public
  • Negative media coverage by mainstream outlets
  • Use of written communication to manage problems that would normally be discussed face-to-face
  • Inability to establish boundaries for appropriate behavior
  • Brutally long workdays over an extended period of time
  • Excessive mingling of professional and personal relationships, or use of professional relationships to enable out-of-control personal behavior
  • A prevalence of shortcuts and workarounds that external parties would find questionable 
  • Need for external authorities to intervene
Of course, this list heavily emphasizes culture, and culture is not all. But it is a deeply misunderstood and undervalued aspect of organizational life. To wit: People with “hard skills” are normally prized and promoted, while people with “soft skills” tend to be devalued and taken for granted.

I would like to propose a different model: The CEO as “Chief Encouragement Officer.” That the job of the company’s leader is in fact to serve as a parental figure who nurtures and disciplines employees forward. 

Too often corporate culture is an aside – it’s “what we do when we solve all the other problems.” But if you look at the actual “nutrition pyramid” of organizational life, it is the unconscious that sustains all employees. 
Recently founder Vincent Wright hinted at this when he wrote, right here on LinkedIn (“CEO: Chief Encouragement Officer,” Dec. 3, 2015):

Why should we work for anyone who discourages us? How CAN we do our best work for anyone who discourages us? – Vincent Wright,

Is it incidental that Vincent – a hardcore social networker and born Chief Encouragement Officer, whose motto on LinkedIn is “Stay Strong” – does most of what he does for free?
Again, encouraging people isn’t seen as leadership.
I would argue that the entire substance of leadership is encouraging people – not randomly, not blindly, but intelligently – to do the right thing, to stay on the path. This requires not only emotional intelligence but also business insight and operational skill, to know what the company’s future needs are and to align all the talent within to achieve it.
David Sacks, the new CEO at Zenefits, seems to have this skill. But it should not be incidental or accidental.
If you are a recruiter and you’re scouting for CEOs, stop looking at where they went to MBA school. Stop emphasizing that blue-chip firm where they went to every happy hour, shined the boss’s shoes and broke their backs interning. 
 Look for people who give a damn about other people.
The rest they can pick up along the way.
Copyright 2015 by Dannielle Blumenthal, Ph.D. Dr. Blumenthal is founder and president of the consultancy BrandSuccess and co-founder of the brand thought leadership portal All Things Brand. The opinions expressed are her own and not those of any government agency or entity or the federal government as a whole. You can contact Dr. Blumenthal on LinkedIn or here.
Cover photo via Wikipedia. Paternal bonding photo also via Wikipedia.

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