Building the civilized workplace.

Nasty people don't just make others feel miserable; they create economic problems for their companies.

Lars Dalgaard is CEO and cofounder of SuccessFactors, one of the world's fastest-growing software companies-and the fastest with revenues over $30 million. Dalgaard recently listed some milestones that his California-based company passed in its first seven years:

• growth three times that of the company's nearest competitor
• enthusiastic recommendations of the product by nearly all customers
• dramatically low employee turnover
• employing no jerks

That's right-no jerks-although the word SuccessFactors really uses (except on its Web site) is a mild obscenity that starts with the letter A and sort of rhymes with "castle."

The Dirty Dozen

1. Personal insults
2. Invading coworker's personal territory
3. Uninvited physical contact
4. Threats and intimidation, verbal and nonverbal
5. Sarcastic jokes and teasing used as insult delivery systems
6. Withering e-mails
7. Status slaps intended to humiliate victims
8. Physical shaming or status degradation rituals
9. Rude interruptions
10. Two-faced attacks
11. Dirty looks
12. Treating people as if they were invisible

Enforcing the no-jerks rule

Executives who are committed to building a civilized workplace don't just take haphazard action against one jerk at a time; they use a set of integrated work practices to battle the problem.

At the workplaces that enforce the no-jerks rule most vehemently and effectively, an employee's performance and treatment of others aren't seen as separate things. Phrases like "talented jerk," "brilliant bastard," or "a bully and a superstar" are oxymorons. Jerks are dealt with immediately: they quickly realize (or are told) that they have blown it, apologize, reflect on their nastiness, ask for forgiveness, and work to change their ways. Repeat offenders aren't ignored or forgiven again and again-they change or depart.

Five intertwined practices are useful for enforcing the no-jerks rule.

Make the rule public by what you say and, especially, do

Plante & Moran, a company on Fortune's "100 Best Places to Work" list for nine years in a row, proclaims its rule openly: "The goal is a 'jerk-free' workforce at this accounting firm," and "the staff is encouraged to live by the Golden Rule." At Barclays Capital, COO Rich Ricci says that "we have a no-jerk rule around here," especially in selecting senior executives. BusinessWeek explains what this means for the employees of Barclays Capital: "Hotshots who alienate colleagues are told to change or leave."

Talking about the rules is just the first step; the real test happens when someone acts like a jerk. If people don't feel comfortable blowing the whistle on the offender, your company will both be seen as hypocritical and fill up with jerks, so don't adopt the rule unless you mean it. SuccessFactors shows how to back talk with action. Consider this post on the company's public blog site by company employee Max Goldman:

My own personal experience with [the no-jerks rule] is very simple. Once, my boss was being a jerk. I told him so. Instead of getting mad, he accepted the comment and we moved on. Later, he thanked me for telling him. My boss thanked me for calling him a jerk. Let me repeat that. My boss thanked me for calling him a jerk. Calling the behavior what it was helped everyone work better together and get more done. Can you do that at your company?

Weave the rule into hiring and firing policies

Consider how the Seattle law firm Perkins Coie, which earned a spot on Fortune's "100 Best Places to Work" list in 2007 for the fourth year in a row, applies the rule during job interviews. Partners Bob Giles and Mike Reynvaan were once tempted to hire a rainmaker from another firm but realized that doing so would violate the rule. As they put it, "We looked at each other and said, 'What a jerk.' Only we didn't use that word."

Similarly, Southwest Airlines has always emphasized that people are "hired and fired for attitude." Herb Kelleher, the company's cofounder and former CEO, shows how this works: "One of our pilot applicants was very nasty to one of our receptionists, and we immediately rejected him. You can't treat people that way and be the kind of leader we want." As Ann Rhoades, a former Southwest vice president, told me, "We don't do it to our people; they don't deserve it. People who work for us don't have to take the abuse."

Teach people how to fight

The no-jerks rule doesn't mean turning your organization into a paradise for conflict-averse wimps. People in the best groups and organizations know how to fight. Intel, the world's largest semiconductor maker, gives all full-time employees training in the "constructive confrontation" that is a hallmark of the company's culture. Leaders and corporate trainers emphasize that bad things happen when the bullies win using personal attacks, disrespect, and intimidation. When that happens, only the loudest and strongest voices get heard; there is no diversity of views; communication is poor, tension high, and productivity low; and people first resign themselves to living with the nastiness-and then resign from the company.

To paraphrase a primary theme in Karl Weick's classic book, The Social Psychology of Organizing, this approach means learning to "argue as if you are right and to listen as if you are wrong." That is what Intel tries to teach through lectures, role-playing, and, most essentially, through observing the way managers and leaders fight-and when. The company's motto is "disagree and then commit," because second-guessing, complaining, and arguing after a decision is made sap effort and attention and thus make it unclear whether the decision went wrong because it was a bad idea or because it was a good idea implemented with insufficient energy and commitment.

Apply the rule to customers and clients too

Organizations that are serious about enforcing the no- jerks rule apply it not just to employees but also to customers, clients, students, and everyone else who might be encountered at work. They do so because their people don't deserve the abuse, customers (or taxpayers) don't pay to endure or witness demeaning jerks, and persistent nastiness that is left unchecked can create a culture of contempt infecting everyone it touches.

The late Joe Gold-the founder of Gold's Gym, which now has more than 550 locations in 43 countries-applied a variation of the no-jerks rule to customers. He didn't mince words: "To keep it simple you run your gym like you run your house. Keep it clean and in good running order. No jerks allowed, members pay on time, and if they give you any crap, throw them out." Gold applied the rule to customers from the time he opened his first gym, a block from Muscle Beach, in Venice, California, where early customers included Arnold Schwarzenegger.

Manage the little moments

Putting the right practices and policies in place is useless if they don't set the stage for civilized conversations and interactions. People must treat the person in front of them, right now, in the right way, and they must feel safe to point out when their peers and superiors blow it. The power of efforts to work on "the little moments" can be seen in an organizational change at the US Department of Veterans Affairs. To reduce the bullying of employees, psychological abuse, and aggression at 11 sites with more than 7,000 people, each site appointed an action team of managers and union members that developed a customized intervention process. But there were key similarities among all of the sites: employees learned about the damage that aggression causes, used role- playing exercises to get into the shoes of bullies and victims, and learned to reflect before and after they interacted with other people. Action team members and site leaders also made a public commitment to model civilized behavior themselves. At one site, for example, managers and employees worked to eliminate seemingly small slights such as glaring, interruptions, and treating people as if they were invisible-small things that had escalated into big problems.

The results included less overtime (saving taxpayers' money) and sick leave, fewer complaints from employees, and shorter waiting times for the veterans who were the patients at the 11 sites. A comparison of surveys undertaken before and after these interventions, which started in mid-2001, found a substantial decrease, across the 11 sites, in 32 of 60 kinds of bullying-things like glaring, swearing, the silent treatment, obscene gestures, yelling and shouting, physical threats and assaults, vicious gossip, and sexist and racist remarks.

Being a jerk is contagious

The most important single principle for building a workplace free of jerks, or to avoid acting like one yourself, is to view being a jerk as a kind of contagious disease. Once disdain, anger, and contempt are ignited, they spread like wildfire. Researcher Elaine Hatfield calls this tendency "emotional contagion": if you display contempt, others (even spectators) will respond in much the same way, creating a vicious circle that can turn everyone in the vicinity into a mean- spirited monster just like you. Experiments by Leigh Thompson and Cameron Anderson, as they told the New York Times, show that when even compassionate people join a group with a leader who is "high energy, aggressive, mean, the classic bully type," they are "temporarily transformed into carbon copies of the alpha dogs." Being around people who look angry makes you feel angry too. Hatfield and her colleagues sum up this emotional-contagion research with an Arabic proverb: "A wise man associating with the vicious becomes an idiot."

A swarm of jerks creates a civility vacuum, sucking the warmth and kindness out of everyone who enters and replacing them with coldness and contempt. As we have seen, organizations can screen out and reform these contagious jerks and, if those efforts fail, expel them before the infection spreads. But treating nastiness as a contagious disease also suggests some useful self-management techniques.

Consider some wise advice that I heard from the late Bill Lazier, a successful executive who spent the last 20 years of his career teaching business and entrepreneurship at Stanford. Bill gave this advice to our students: when you get a job offer or an invitation to join a team, take a close look at the people you will work with, successful or not. If your potential colleagues are self-centered, nasty, narrow minded, or unethical, he warned, you have little chance of turning them into better human beings or of transforming the workplace into a healthy one, even in a tiny company. In fact, the odds are that you will turn into a jerk as well.

Source: Robert Sutton, McKinsey & Company, 2007

Gross Taxable Retail Sales - December 2006

• The "Top Ten" represent 47% of the State- Wide market.
• The "Top Twenty-Five" represent 70% of all Utah retail sales.
• State-wide December increases were 10.6%
• The "Top 20%" gainers include:
  1. South Jordan +119.6%
  2. Lehi +66.2%
  3. Vernal +28.6%
  4. Draper +21.8%
  5. American Fork +18.5%
• The "Bottom 10%" include:
  1. Holladay -15.0%
  2. St George -7.3%
  3. Price -5.2%

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Rank (05)	City	December 2006 (000)	% Change 06/05	Mkt Share December 06 (% of State Total)
1	Salt Lake City	$446,307	+10.6%	11.6%
2(3)	Sandy	$183,463	+8.9 %	4.8%
3(4)	Muray	$182,453	+11. 1%	4.7%
4(2)	Orem	$181,085	+5.6 %	4.4%
5(5)	West Valley	$168,226	+13.1%	4.4%
6(-)	Salt Lake County (Uninc)	$156,169	%	4.0%
7(6)	St George	$137,580	-7.3%	3.6%
8(7)	West Jordan	$120,025	+6.1%	3.1%
9(9)	Layton	$116,872	5.4 %	3.0%
10(10)	South Salt Lake	$116,295	+1.2%	3.0%
11(8)	Provo	$108,231	+10. 2%	2.8%
12(12)	Ogden	$100,763	+0. 7%	2.6%
13(11)	Park City	$72,434	+23.7%	1.9%
14(15)	Riverdale	$72,009	+ 1.8%	1.9%
15(13)	Logan	$66,594	+4.9 %	1.7%
14(14)
16(14)	American Fork	$60,524	+18.5%	1.6%
17(17)	Midvale	$51,183	- 3.0%	1.3%
18(16)	Taylorsville	$47,430	+3.3%	1.2%
19(18)	South Jordan	$47,401	+119.6%	1.2%
20(30)	Vernal	$47,173	+28. 6%	1.2%
21(21)	Draper	$46,235/TD>	+21.8 %	1.2%
22(20)	Cedar City	$41,644	+0.6%	1.1%
23(19)	Lindon	$37,991	+66. 2%	1.0%
24(23)	Lehi	$37,991	+66.2 %	1.0%
25(27)	Bountiful	$36,113	+5. 5%	0.9%
	Others of Interest
-(-)	Cottonwood Heights (Still not listed!)	--	--	--
30(31)	Holladay	$21,938	- 15.0%	0.6%
31(24)	Price	$21,298	-5.2%	0.6%

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• The "Top 5" Major Sectors represent 50% of the market.
• Retail General Merchandise is the largest category representing 17% of all sales and up for December by 7.4% - The "Top 5" gainers include
• State-wide December increases were 13.4% - The "Top 5" gainers include:
  1. Construction +50.3%
  2. Services - FIRE +38.7%
  3. Services - Business +29.5%
  4. Services - Health +23.6%
  5. Retail Misc. Sales +24.0%
• Categories with declining sales were led by:
  1. Occasional Retail Sales -60.6%
  2. Mining -18.7%
  3. Transportation -17.5%
  4. Public Administration -11.7%
  5. Private Vehicle Sales -10.2%

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Source: Utah State Tax Commission

Energy costs, green building fuel 'smart' structures

Slowly, so-called "smart" structures are taking root as concern over energy costs and interest in green building grow

Experts say smart buildings - featuring cutting- edge, fiber-optic networking designed to improve operating efficiencies and expenses - boast happier tenants and lower energy bills than other properties. While it doesn't take a high IQ to grasp the benefits, many short-sighted developers have yet to jump on the intelligent-building bandwagon.

"You feel the tide coming up a little bit, but eventually it'll come up really high," says Dallas developer Bob Bruner, principal of Ballantyne Village, a $250 million mixed-use development in Charlotte, N.C.

At Bruner's "smart" project, property managers can log in remotely to flip the switch on more than 500 lights. In restrooms throughout the 10-acre development, the toilet paper, paper towel and soap dispensers automatically alert property managers when a dispenser is empty. Toilets send signals when they're clogged. Restrooms are one of the two top triggers of complaints about commercial real estate properties, experts say. Most other tenant gripes center on heating and cooling systems, which also are built into the smart network.

Ballantyne Village offers telephone, data, Internet, security and music services through a single fiber- optic network. Property managers can monitor heating, cooling, lighting, and digital signage through that same network, which currently links all retail tenants, outdoor spaces and property management offices. About 160,000 sq. ft. of Ballantyne Village - primarily retail - already is finished. When completed by 2013, the 650,000 sq. ft., six-building project also will include about 200 condominiums, 100,000 sq. ft. of offices and a 150-room hotel, all of which will be tied to a network capable of handling 1 gigabit of data.

Ballantyne Village is among less than 10% of new and existing commercial buildings that contain intelligent technology, estimates Ron Bernstein, executive director of San Jose, Calif.-based LonMark International, a trade group that develops standards for intelligent building technology. Most active in the intelligent-building movement are data centers, hospitals and universities, says Paul Ehrlich, president of Building Intelligence Group LLC, a technology consulting firm in St. Paul, Minn.

A key driver of intelligent technology in the commercial real estate sector is escalating energy costs. If a high-tech lighting and energy management system is integrated into a building's overall operating network, the owner can reap energy savings of 30% to 45% vs. stand-alone lighting and energy management systems, says Ron Zimmer, executive director of the Continental Automated Buildings Association, an international trade group based in Ottawa, Canada. The payback on that investment can be realized in two and a half years, Zimmer says.

Ehrlich believes a full-fledged intelligent technology system can yield bottom-line rewards. He cites this hypothetical scenario: A developer spends $600,000 to equip a new 150,000 sq. ft. building with smart technology that integrates lighting, heating, cooling and other functions on a single network platform. That system prompts a 10% drop in operating costs, as well as a 4% hike in occupancy and rental rates, since tenants view this as a modern, comfortable property. As a result, net cash flow rises by $420,000.

Nowadays, building technology is "more than a necessary evil and a budget item," says Tom Shircliff, co-founder of Intelligent Buildings Group of Charlotte, a technology consulting firm that is working with Ballantyne Village. "Too many times, people think 'smart buildings' means the owner selling phones and Internet service to tenants."

One reason smart buildings have yet to make it to the mainstream, tech experts argue, is that commercial real estate developers typically emphasize a building's short-term profitability rather than its long-term operating expenses. "They don't care about the building costs five years from now because they're not going to own it," LonMark's Bernstein says. Experts say it costs about $1 to $4 per square foot to include smart technology in a new project.

Bruner, the Ballantyne Village developer, concedes that cutting corners to chop construction costs is standard practice among developers. "If the tenants were barking for intelligent technology, the developers would do it," Bruner says. "The tenants don't understand it, so they don't give it much credence."

For his part, trade group director Zimmer acknowledges "a terrible job" has been done of teaching building developers, owners and designers about the value of intelligent technology. That's why the Continental Automated Buildings Association is introducing the Building Intelligence Quotient (BIQ) tool and the Life Cycle Analysis Tool on its Web site.

Users of the BIQ tool can grade the value of their intelligent-building technology and learn how to improve such technology in new and existing buildings. As with the LEED and Energy Star programs, participants in the BIQ program will be able to pursue certification. The life cycle tool allows building owners to calculate long-range costs associated with intelligent systems.

Despite its slow adoption, tech consultant Ehrlich is optimistic about the future of intelligent technology. During focus groups conducted last fall by Building Intelligence Group, about nine of every 10 of the participants from the commercial real estate, education, hotel and health care sectors said they intend to incorporate intelligent technology into their building projects within the next two years. Erhlich cites the green-building wave as one of the factors sparking interest in this technology.

For the time being, Ehrlich says, "[intelligent technology] is the exception today rather than the rule." Facilities managers, chief information officers and chief technology officers are among those pushing for the technology, he says.

So who isn't pushing? "The people with the money," says Ehrlich, referring to building owners and developers. "At the end of the day, someone's got to write the check."

Source: NREI & Retail Traffic, 2007

:: bobspring@bonnevilleresearch.com