Warts and All

Here’s this month’s piece from neuroeconomist Paul Zak. For those who might dismiss some of our thinking as the “soft side” of management, Paul puts “hard science” behind it.

A couple of years ago, I spoke to an audience of about 350 senior associates of The Container Store, who had gathered for four days at the company’s Dallas headquarters. The theme was “Connection, Communication, Community.”

It was a particularly powerful event because this meeting had been cancelled the previous two years as the company retrenched during the Great Recession. A sense of excitement was in the air as revenues slowly began heading upward.

The Container Store has an amazing corporate culture.  People love to work there, and long-tenured employees are recognized on a “wall of fame” and treated to all-expenses-paid vacations. In turn, employee turnover at the company’s retail locations is one-fifth that of the industry average.

But where does this great culture come from?

At the annual meeting, founder and CEO Kip Tindell shared a “values story” that was crucial to building the company’s culture. He discussed how early expansion had stalled, and in desperation he went to the first store outside of Dallas on a Sunday night to explain to the staff why values were so important to him—and why values should be important to all of them. As Tindell retold this story, he sat on a chair wearing a pair of jeans. I noticed that all of the senior executives were dressed in comfortable, casual clothes.  No ties or expensive jewelry could be seen anywhere.

Tindell and his colleagues have for years adopted an approach of not only high transparency, but letting themselves been seen as—gasp!—regular human beings. The senior staff even recorded a video of themselves with wild 1970s clothes and music to celebrate The Container Store’s 25th anniversary. Their burlesque was then shared with all employees.

Revealing oneself as a regular person, complete with flaws and shortcomings, is a very effective way to foster connection. My laboratory experiments have shown that sharing private information—especially of a personal nature—is an effective way to induce the brain to release “the moral molecule” oxytocin and build trust between individuals.

By telling you something personal about myself, I have let you into my circle of trust; most people respond by being trustworthy.

This finding runs counter to the practice of many CEOs, who put on airs and act as if they are in full control on the company’s direction. By contrast, Tindell’s personal approach creates trust, opening a path for information to flow to him.

CEOs who are naturally approachable may have an advantage, especially among knowledge workers, who need to be entrusted to do their jobs without much overt supervision. “Organizations are no longer built on force,” Peter Drucker observed in his book Management Challenges for the 21st Century. “They are increasingly built on trust.”

A big part of that is showing people who you really are—warts and all.

Paul Zak is the director of the Center for Neuroeconomics Studies at Claremont Graduate University and the author of The Moral Molecule.