“There’s Way Too Much Happy Talk in Business.”​ Time for Real Transparency.

Chris Barbin‘s experience is broad and deep. He was a co-founder and CEO of Appirio, an information technology consulting company that was acquired by Wipro, which named Barbin its chief culture officer until he left that role earlier this year. He is also a venture partner at GGV Capital. I first met Barbin seven years ago, and was eager to catch up with him to hear how his thinking about culture and teams had evolved. He shared many smart insights in our interview.

Q. What are the things that matter to a healthy culture?

A. Transparency is important. People use that word all the time but I don’t think a lot of leaders are great at true transparency. Transparency can mean, if things aren’t going well financially, just being blunt and direct about it.

The only way a team can get out of a jam or a negative environment is by being very transparent. Call it a red light. Don’t call it yellow or green, but call it red when it’s red and have everyone row against that new goal.

There also are times when leaders and others have things going on in their lives. Transparency is about, maybe I had a death in the family or one of my kids has a problem or I’m getting a divorce. Just being open and honest about that and helping each other through those tough times is a lost art. Call it empathy, but it’s about people helping one another.

Q. Some leaders I’ve talked to over the years struggle with knowing how transparent they should be, though.

A. There is a lot more upside to being open and honest and sharing everything than the downside associated with hiding and masking it. The upside is that you build a level of trust and respect and support. To think that everything’s perfect and up and to the right all the time for everybody is just not true.

There’s way too much happy talk in business, but then on Day 1 of the next quarter, there are layoffs and cuts, which creates a whipsaw effect where you blow up trust and respect and loyalty very quickly.

It certainly is harder in a public company to be truly transparent, which is why I think lots of companies are staying private longer. Public companies create a very different environment, and very different set of incentives to shelter and shield information.

Q. What are the key things you would be looking at if you were to assess the cultural health of a company as an outsider?

A. I would spend a disproportionate amount of time on the leadership team and their level of transparency and authenticity. Generally, there’s a perception gap between what the leadership believes they are doing and representing and what the actual employee base believes and sees. I would want to understand that gap and work to try to close that gap.

Q. Most companies go through the values exercise. What are your do’s and don’ts?

A. There’s often too many words. Generally, they’re over-engineered, with long sentences. Living them every day is the hard part. And that is the job not only of leadership but of everyone in the company. I think simple values, with single words, matter. Our values at Appirio were customers, team and fun.

“Just like you look at your annual financials, look at your values annually.”

Companies should also test whether they are living them. Just like you look at your annual financials, look at your values annually. Do we have examples of how we lived these values in the past year? That’s a really key exercise. Companies should also factor their values into their annual strategic planning process.

Q. What was an example of the initiatives you started as chief culture officer at Wipro?

A. One was we called “Faces Matter.” At Wipro, they always had a massive conference- calling culture. People were dialing in from all over the world with lots of background noise. When you have 50 people on a call, it’s just not very productive.

So we drove an initiative to have far fewer conference calls, with far fewer people, and then when you have them, get on camera. Do them as a video. That’s why we called it Faces Matter.

Q. What about the topic of strategy. We see a lot of leaders struggling with how to simplify their plans. Do you see that as well?

A. I find there are too many metrics. You don’t even know how to sort through them all. What are the three that really matter? Generally speaking, it’s going to be about, are you growing, are you making money, and what’s the net promoter score? Do customers like you? It’s not that much harder than that. There is a pretty basic set of metrics for any business. But in many cases, there’s this pull to try to appease and accommodate lots of folks in the process.

Q. What are the patterns you see in terms of mistakes that early-stage companies make?

A. Not investing in HR early enough is a common pattern. There’s a mentality for some founders early on that HR is payroll and comp and an administrative function, not a strategic function. So they hire a director of HR who will help hire more people. They hire a recruiter. A head of HR should be equivalent to your CFO.

Another problem stems from all the capital coming into the market. There are a lot of deals being done, and everyone’s pushing to get more money. And because evaluations are high, people want to pile on. That then drives some of the M&A. Because they have all this money, people say, “Let’s go buy companies.”

It’s statistically proven that M&A generally fails, and that eight out of ten don’t work. And because culture is strategic, the more companies you buy, the more you’re infusing lots of different systems and processes and human behaviors and values into your business while you’re growing really fast.

“At Appirio, we did seven deals. I think we should have done one.”

I push people pretty hard on the idea that for every two or three deals you think you should do, don’t. Be highly selective. At Appirio, we did seven deals. I think we should have done one. We raised $120 million. We ended up giving back $55 million to investors, but I had this money burning a hole in my pocket. Raising a little bit less money just makes you more disciplined about building a great business, not just the highest growth business.

Q. If you were speaking to a class full of aspiring entrepreneurs, what are your top do’s and don’ts for them?

A. One of the biggest pieces of advice I give is to make sure that you really flesh out your idea, because everyone has ideas. You have to create a business plan that is defensible, rather than just coming up with an idea that your friends and family think is great. And it has to be simple. Put it on three pages, make it succinct, and then get it in front of people who are not yes-men or yes-women.

The other advice I always give is to make sure you’re prepared for the roller coaster of going from hero to zero. You have to have a very thick skin because it’s not easy. It can be very lonely and it can be very dangerous and scary, so be prepared for high highs, low lows, even multiple times in a given day.

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