M&M’s Family Humility

M&M’s Family Humility

It is not the kind of life one might imagine for a family whose net worth is $60 billion – the fifth largest in the world. But then again, there is much about the M&M family and its corporation that is unimaginable. At M&M, all employees are called ‘associates.’

There are no perks here – no corporate office suites, no company cars, no reserved parking spaces, no executive washrooms and nobody flies first class.

Direct Communication: There are no private offices either. Offices are eliminated and desks are arranged in a wagon wheel fashion, with the higher-ranking executives in the center, to facilitate communication between individuals and functional areas.

The management structure encourages direct communication. If you need something, you walk over to the boss and ask for it.

Independence: The employees are empowered to be more independent. They take more responsibility and train with more patience. Employees thrive. Once they get a job, they stay. The turnover rate is a low 5%. Some families can claim three generations of employees.

You Don’t Get Ahead Of The Game Because You’re Connected

The clock reads 6:40am. John Mars, at 56, comes to the office, pulls out his time card marked J F Mars, and does what few chief executives in America would ever dream of doing.

He punches in. The billionaire grandson of the company founder punches his time card every morning. Every employee, from the president down, is eligible for a 10% bonus for being on time.

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Hiring: Values vs. Talent

Who Are The Koch Brothers?

David and Charles Koch are one of the richest family in America with net worth of $100 billion.

Hiring: Values vs. Talent
“We hire first based on values. We won’t go for the smartest guys in the room. If forced to choose between virtue and talent, choose virtue. Talented people with bad values will do far more damage than virtuous people with lesser talents. It’s fine to make lots of money, but how you do it matters. The biggest mistake I’ve made in business is hiring and promoting executives who only paid lip service. That got us into several bad deals – and drove out people who shared our values.”

How to identify good employees: “When we hire someone, in order to figure out if the candidate shares our values and integrity, we put him in situations.

For example, we have someone he thinks is unimportant take him to the cafeteria and see how he treats people there.”

You Don’t Get Ahead Of The Game Because You’re Connected

At Koch industries, even Charles Koch gets evaluated. Any employee at Koch could earn more than his boss.

The employees are challenged to act as though they are running their own businesses.

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Amazon’s Long Term Thinking

Long Term Thinking

Amazon’s initial business plan was unusual. The company didn’t expect to make a profit for four to five years. This “slow” growth caused stockholders to complain that the company was not reaching profitability fast enough to justify their investment or even survive in the long term.

The company finally turned its first profit in 2001. Although it was a small profit, it proved to skeptics that Bezos’ unconventional business model could succeed.

The Type of People Amazon Hires

We’ve collected a large group of like-minded people. Folks who find our approach energizing and meaningful.”
The willingness to pursue a long-term vision was critical to the rise and persistence of Amazon.com.

When you have something that you know is true, even over the long term, you can afford to put a lot of energy into it.

A 10,000 Year Watch

Jeff Bezos is also helping to lead an effort to build a clock that will tick for 10,000 years. “It’s a special clock, designed to be a symbol, an icon for long-term thinking.”

He spent as much as $40 million to build it because he wanted to show the importance of long term thinking.

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What You Lose When You Don’t Focus

What You Lose When You Don’t Focus

Not only was the coffee sub-par, but the stores had begun offering more and more diverse non-coffee related products. They added CDs, then books, then DVDs to their store kiosks. It turned out that movie studios would actually pay Starbucks to promote their new releases; so Starbucks got involved in the movie business.

Schultz stated it bluntly: “The business deals looked great on our profit and loss statements. It would be a while before I recognized that Starbucks’ amplified foray into entertainment, while it had its upside, was another sign of hubris born of a sense of invincibility.” The last straw was when Schultz entered a store to see a pile of stuffed animals on display.
When he questioned the manager, he was told simply that the animals had a big gross margin.

As Schultz explains it, “Starbucks had begun to fail itself.” The stock had dropped by 42 percent and many of the stores were failing, some due to cannibalization by neighboring Starbucks stores. Its growth was reducing the Starbucks experience. Schultz recognized and acknowledged his part in creating the problem.

One night, he sat down with pen and paper and began composing a letter with his concerns and a solution to get back to the core of the business. He had his secretary type it up and e-mail it to the Starbucks board and management, with the subject “The Commoditization of the Starbucks Experience.”

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Encouraging Criticism

Who Are The Koch Brothers?

David and Charles Koch are one of the richest family in America with net worth of $100 billion.

Encouraging Criticism

“I find it very productive when somebody challenges me; even if they’re wrong, that challenge causes me to think, “Well, I didn’t explain it clearly, or maybe I don’t fully understand it.” I love it. I say, “Here’s an idea of something we ought to do and here’s how I think we ought to do it.” On the last one, I got six different attacks.

If you’re a leader at any level and your people aren’t challenging you, you’ve got to change that or you can’t be a leader here because you’re not going to be using ideas, you’re not going to have innovation, you’re not going to fully develop your people.”

Crowdsourcing for Best Ideas

“We try to constantly gather all the relevant information. Then we share knowledge internally. We have something called the Discovery Board. We meet once a month, and everyone brings up a problem or an idea, and the rest of us challenge it.”

Respect the Opinion of the Simple Guy

“We try to model our company on the concept of crowdsourcing for best ideas. Nobody has the best ideas. You challenge at every level. People come to us with their ideas. We don’t tell them, “Are you kidding?” It doesn’t work that way, and that violates my principles.

We’re trying to find the truth. How do we make people’s lives better unless we find the truth of what works and what doesn’t?

I’ve always believed in the saying that “there is no limit to what you can accomplish if you don’t care who gets the credit.”

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