Reference Guide on our Culture 1. Enron Had A Nice-Sounding Value Statement with 4 Values Integrity...

Reference Guide on ourReference Guide on our

Culture Culture

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Enron Had A Nice-Sounding Enron Had A Nice-Sounding Value Statement with 4 ValuesValue Statement with 4 Values

• IntegrityIntegrity

• CommunicatioCommunicationn

• RespectRespect

• ExcellenceExcellence

Enron headquarters

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Their 4 values were chiseled in marble in the main lobby, but had little to do with the real values of the organization

Seven Aspects of our Seven Aspects of our CultureCulture

• Values are what we ValueValues are what we Value

• High Performance High Performance

• Freedom & ResponsibilityFreedom & Responsibility

• Context, not ControlContext, not Control

• Highly Aligned, Loosely CoupledHighly Aligned, Loosely Coupled

• Pay Top of MarketPay Top of Market

• Promotions & Development Promotions & Development

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You make wise decisions (people, technical, business, and creative) despite ambiguity

You identify root causes, and get beyond treating symptoms

You think strategically, and can articulate what you are, and are not, trying to do

You smartly separate what must be done well now, and what can be improved later

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Judgment

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Communication

You listen well, instead of reacting fast, so you can better understand

You are concise and articulate in speech and writing

You treat people with respect independent of their status or disagreement with you

You maintain calm poise in stressful situations

6

Impact

You accomplish amazing amounts of important work

You demonstrate consistently strong performance so colleagues can rely upon you

You focus on great results rather than on process

You exhibit bias-to-action, and avoid analysis-paralysis

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Curiosity

You learn rapidly and eagerly

You seek to understand our strategy, market, subscribers, and suppliers

You are broadly knowledgeable about business, technology and entertainment

You contribute effectively outside of your specialty

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Innovation

You re-conceptualize issues to discover practical solutions to hard problems

You challenge prevailing assumptions when warranted, and suggest better approaches

You create new ideas that prove useful

You keep us nimble by minimizing complexity and finding time to simplify

9

Courage

You say what you think even if it is controversial

You make tough decisions without excessive agonizing

You take smart risks

You question actions inconsistent with our values

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Passion

You inspire others with your thirst for excellence

You care intensely about LPS' success

You celebrate wins

You are tenacious

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Honesty

You are known for candor and directness

You are non-political when you disagree with others

You only say things about fellow employees you will say to their face

You are quick to admit mistakes

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Selflessness

You seek what is best for LPS, rather than best for yourself or your group

You are ego-less when searching for the best ideas

You make time to help colleagues

You share information openly and proactively

JudgmentYou make wise decisions (people, technical, business, and creative) despite ambiguity

You identify root causes, and get beyond treating symptoms

You think strategically, and can articulate what you are, and are not, trying to do

You smartly separate what must be done well now, and what can be improved later

InnovationYou re-conceptualize issues to discover practical solutions to hard problems

You challenge prevailing assumptions when warranted, and suggest better approaches

You create new ideas that prove useful

You keep us nimble by minimizing complexity and finding time to simplify

ImpactYou accomplish amazing amounts of important work

You demonstrate consistently strong performance so colleagues can rely upon you

You focus on great results rather than on process

You exhibit bias-to-action, and avoid analysis-paralysis

CuriosityYou learn rapidly and eagerly

You seek to understand our strategy, market, subscribers, and suppliers

You are broadly knowledgeable about business, technology and entertainment

You contribute effectively outside of your specialty

CommunicationYou listen well, instead of reacting fast, so you can better understand

You are concise and articulate in speech and writing

You treat people with respect independent of their status or disagreement with you

You maintain calm poise in stressful situations

CourageYou say what you think even if it is controversial

You make tough decisions without excessive agonizing

You take smart risks

You question actions inconsistent with our values

HonestyYou are known for candor and directness

You are non-political when you disagree with others

You only say things about fellow employees you will say to their face

You are quick to admit mistakes

SelflessnessYou seek what is best for LPS, rather than best for yourself or your group

You are ego-less when searching for the best ideas

You make time to help colleagues

You share information openly and proactively

PassionYou inspire others with your thirst for excellence

You care intensely about LPS' success

You celebrate wins

You are tenacious

We Want to Work with People Who Embody These Nine Values 13









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We’re a We’re a teamteam, not a family, not a family

We’re like a We’re like a sports teamsports team, , not a kid’s recreational teamnot a kid’s recreational team

Coaches’ job at every level of Coaches’ job at every level of LPSLPS

to hire, develop to hire, develop smartlysmartly, , so we have stars in every so we have stars in every

positionposition

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TheThe Keeper Test Keeper Test Managers Use:Managers Use:““Which of my peopleWhich of my people, ,

if they told me if they told me they were leaving in two months they were leaving in two months

for a similar job at a peer company, for a similar job at a peer company, would I fight hard to keep at LPS?would I fight hard to keep at LPS?

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The other people should get a generous severance now, so we can open a slot to try to find a star for that role

Hard Work – Not Directly Hard Work – Not Directly RelevantRelevant• It’s about effectiveness – not effort – It’s about effectiveness – not effort –

even though effectiveness is harder to even though effectiveness is harder to assess than effortassess than effort

• We don’t measure people by how many We don’t measure people by how many evenings or weekends they workevenings or weekends they work

• We do try to measure people by how We do try to measure people by how much, how quickly and how well they get much, how quickly and how well they get work done – especially under a deadlinework done – especially under a deadline

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The Rare Responsible The Rare Responsible PersonPerson•Self motivatingSelf motivating•Self awareSelf aware•Self disciplinedSelf disciplined•Self improvingSelf improving•Acts like a leaderActs like a leader•Doesn’t wait to be told what to doDoesn’t wait to be told what to do•Never feels “that’s not my job”Never feels “that’s not my job”

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Most Companies Most Companies CurtailCurtail Freedom as they get Freedom as they get BiggerBigger

Bigger

Employee Freedom

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Two Types of Necessary Two Types of Necessary RulesRules1.1. Prevent irrevocable disasterPrevent irrevocable disaster

– E.g. Financials produced are wrongE.g. Financials produced are wrong– E.g. Hackers steal our customers’ infoE.g. Hackers steal our customers’ info

2.2. Moral, ethical, legal issuesMoral, ethical, legal issues– E.g. Dishonesty, harassment are intolerableE.g. Dishonesty, harassment are intolerable

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Mostly, Though, Mostly, Though, Rapid Rapid Recovery Recovery is is the Right Modelthe Right Model• Just fix problems quicklyJust fix problems quickly

– High performers make very few errorsHigh performers make very few errors

• We’re in a creative-inventive market, We’re in a creative-inventive market, not a safety-critical market like not a safety-critical market like medicine or nuclear powermedicine or nuclear power

• You may have heard preventing error is You may have heard preventing error is cheaper than fixing itcheaper than fixing it– Yes, in manufacturing or medicine, but…Yes, in manufacturing or medicine, but…– Not so in creative environmentsNot so in creative environments

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““Good” vs “Bad” ProcessesGood” vs “Bad” Processes

• ““Good” processes help talented people get Good” processes help talented people get more donemore done

• ““Bad” processes try to prevent recoverable Bad” processes try to prevent recoverable mistakesmistakes– Get pre-approvals for spendingGet pre-approvals for spending– Get 10 people to interview each candidate Get 10 people to interview each candidate

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Context, not ControlContext, not Control

Context Context • StrategyStrategy

• MetricsMetrics

• AssumptionsAssumptions

• ObjectivesObjectives

• Clearly-defined roles Clearly-defined roles

• Knowledge of the Knowledge of the stakesstakes

• Transparency around Transparency around decision-makingdecision-making

Control Control • Top-down decision-Top-down decision-

makingmaking

• Management approvalManagement approval

• CommitteesCommittees

• Planning and process Planning and process valued more than valued more than resultsresults

Provide the insight and understanding to enable sound decisions

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Why Managing Through Why Managing Through Context?Context?

High performance people will High performance people will do better work if they do better work if they

understand the contextunderstand the context

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Highly Aligned, Loosely Highly Aligned, Loosely CoupledCoupled• Highly AlignedHighly Aligned

– Strategy and goals are clear, specific, broadly understoodStrategy and goals are clear, specific, broadly understood– Team interactions are on strategy and goals rather than Team interactions are on strategy and goals rather than

tacticstactics– Requires large investment in management time to be Requires large investment in management time to be

transparent and articulate and perceptive and opentransparent and articulate and perceptive and open• Loosely CoupledLoosely Coupled

– Minimal cross-functional meetings except to get aligned on Minimal cross-functional meetings except to get aligned on goals and strategygoals and strategy

– Trust between groups on tactics without Trust between groups on tactics without previewing/approving each one – groups can move fastpreviewing/approving each one – groups can move fast

– Leaders reaching out proactively for ad-hoc coordination Leaders reaching out proactively for ad-hoc coordination and perspective as appropriateand perspective as appropriate

– Occasional post-mortems on tactics necessary to increase Occasional post-mortems on tactics necessary to increase alignmentalignment

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Highly-Aligned Loosely-Highly-Aligned Loosely-Coupled teamwork Coupled teamwork

effectiveness effectiveness is dependent on is dependent on

high performance high performance people people and and good contextgood context

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Pay Top of Market is Core Pay Top of Market is Core toto

High Performance CultureHigh Performance CultureOne outstanding employee gets One outstanding employee gets

more done and costs less than two more done and costs less than two adequate employeesadequate employees

We endeavor to have only We endeavor to have only outstanding employeesoutstanding employees

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Three Tests for Top of Market Three Tests for Top of Market for a Personfor a Person

1.1.What could person get elsewhere?What could person get elsewhere?

2.2.What would we pay for What would we pay for replacement?replacement?

3.3.What would we pay to keep person?What would we pay to keep person?– If they had a bigger offer elsewhereIf they had a bigger offer elsewhere

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Compensation Not Dependent Compensation Not Dependent on LPS Successon LPS Success

• Whether LPS is prospering or Whether LPS is prospering or floundering, we pay at the top of the floundering, we pay at the top of the marketmarket– i.e., sports teams with losing records still i.e., sports teams with losing records still

pay talent the market ratepay talent the market rate

• Employees can choose how much they Employees can choose how much they want to link their economic destiny to want to link their economic destiny to LPS success or failure by deciding how LPS success or failure by deciding how much LPS stock or stock options they much LPS stock or stock options they want to ownwant to own

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EfficiencyEfficiency

• Big salary is the Big salary is the most efficient most efficient form of form of comp comp – Most motivating for any given expense Most motivating for any given expense

levellevel– No bonuses – just include in salary – so No bonuses – just include in salary – so

much simplermuch simpler

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In some time periods, in In some time periods, in some groups, there will be some groups, there will be

lots of opportunity and lots of opportunity and growth at LPSgrowth at LPS

Some people, through both Some people, through both luck and talent, will have luck and talent, will have

extraordinary career growthextraordinary career growth

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Need a culture that supportsNeed a culture that supportseffective teamwork effective teamwork of of

high-performance high-performance peoplepeople

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Reference Guide on our Culture 1. Enron Had A Nice-Sounding Value Statement with 4 Values Integrity...

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