Dear Norm,
I have a company of about 40 employees, who are dedicated and passionate about what they do. Most of them are motivated by the company's culture and mission. In the past year, I have hired three new senior people: a COO, a CFO, and a national sales manager. While it's great to have experienced professionals around, I worry about preserving our company culture. Some of their ideas seem like big-company bureaucratic solutions to simple problems. The latest is an annual employee evaluation. I just got wind of their new form. It's nine pages long and contains 20 questions on which the employee is rated from 1 (unacceptable) to 5 (superior). I am all for giving employees feedback on their performance, guidance for improvement, and rewards for a job well done. But this seems more demoralizing than beneficial. What do you think about these types of forms?

Jeff Patterson, president, Gaggle.Net
Bloomington, Illinois

I believe that an owner and CEO has no more important responsibility than setting the culture of his or her company. That can be quite a challenge, however, when you're 2,000 miles away, as Jeff is. When we spoke, he told me that he lives in Los Angeles, and his company's headquarters and operations are in Bloomington, Illinois. He spends one week out of six there. For most of the past 12 years, he has had a partner who has run the show in Bloomington, but the larger the company became, the unhappier the partner was. Jeff finally bought him out last October. The three new senior managers were hired in anticipation of his exit.

Now, I happen to agree with Jeff about employee evaluation forms like the one he described in his e-mail, but that's neither here nor there. What's crucial is that he and his on-the-scene managers be in total agreement about the culture. The managers are the ones who will be shaping it on a daily basis. If they're replacing Jeff's culture with something else, he will lose control of the business. Culture determines how a company functions -- who works there, how hard those people work, how they treat one another, how they relate to customers and suppliers, and on and on. A dramatic change in the culture would jeopardize everything Jeff has created.

I told him that, first, he has to decide whether the new senior managers will follow his direction. If the answer is no, he has to replace them. If the answer is yes, he has to sit down with them and work out the ground rules. Not that he should stifle them. He needs to let them know that he welcomes their ideas and will use some of them, but not those that undermine the current culture. "You should follow your gut feelings," I said. "They got you this far, and they'll get you to the next level. Yes, you'll make mistakes, but you'll be right more often than wrong."

Jeff seemed relieved. "I appreciate hearing that," he said. "It's so easy to second-guess yourself." He's right, of course, but entrepreneurs have to learn to trust their instincts.

Please send all questions to Norm Brodsky is a veteran entrepreneur. His co-author is editor-at-large Bo Burlingham. Their book, The Knack, is now available in paperback under the title Street Smarts: An All-Purpose Tool Kit for Entrepreneurs.

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