business lessons from The Hells Angels

random thoughts

“The strength of a brand often reflects an organization’s cultural health. Inside-out, credo-driven brands surpass their outside-in, market-driven peers in category after category (see Apple and Google versus Microsoft; Southwest Airlines versus United Airlines). The brands that value employee culture create an obvious advantage: better people with bigger ideas and more initiative want to be part of those cultures. Brands with great cultures give employees a sense of identity, belonging and purpose. In fact, the most successful culture brands connect with employees in ways similar to gangs or the mafia.

Globally, one organization offers a vivid blueprint for growing a brand through an unrivaled dedication to culture, and it isn’t a company you’ll find in the Fortune 500. It’s the Hells Angels, the world’s most famous (or infamous, depending on perspective) outlaw motorcycle club.
Here are four of the organization’s practices that mainstream companies should borrow.

1_An all-in hiring process is the only way to go
Not everyone can be a Hells Angel. That might go without saying, but it’s that clarity —who we’re for, and who is for us— that’s missing from the culture of so many companies. More importantly, the process of joining the Hells Angels is so long and arduous that no one in the club has to suffer a lemon member. Every prospect demonstrates that he wants to be there, and every member vets prospects, weeding out those who do not align with the culture. Zappos uses this same culture-first, no-lemon approach to hiring. Following an immersive training program, new employees are offered a bonus to quit on the spot. The message is clear: go all-in with us, or hit the bricks.

2_Use symbols and artifacts wisely
At the heart of the Hells Angels’ brand is an amazing array of iconography. Compared to the corporate world’s dull logos, inane stock photography and other corporate ‘communications’, the Hells Angels have the signature ‘Death’s Head’ insignia, along with a complex set of patches and other symbols.
It would be easy to dismiss these artifacts as the typical trappings of a gang. But they are meaningful visual designations of belonging, commitment and member achievement. While most companies onboard new hires with slide presentations, Hells Angels prospects earn their ‘full patch’. This communicates that membership really matters and connects members with something larger than themselves in a way that is, at the same time, personal.

3_Appeal to outsiders as insiders
One of the paradoxes of employer-employee relationships is that people both seek a sense of belonging and want to maintain their identity. Too much belonging without any individuality is a cult. Too much individuality without any belonging is a band of mercenaries. The Hells Angels balance this by creating a club for outsiders. Archetypally, the Hells Angels is about as pure a portrait of the ‘outlaw’ or ‘rebel’ brand as you’ll find. Members are called to the brand as outsiders—where they then become insular and highly exclusive insiders. That might sound odd, but it’s what people want from a brand. It’s why we love music groups a lot more before they’re cool. The Hells Angels anti-establishment culture distinguishes its members from everyone else while also welcoming those members for who they are. Roaring down the highway, they are a band of outsiders—together.
Any mainstream company in the business of innovation —from startups challenging entrenched industries to big companies always on the hook to develop the next big thing— should take heed. Outsiders are a symbol of doing things differently. You cannot disrupt the status quo without them. But those outsiders and their wild ideas need support. They need a place to feel like an insider.

4_Ignore the critics
Law enforcement agencies haven’t wanted the Hells Angels around for decades. The club doesn’t care. It is expanding geographically and recruiting the next generation of members returning from tours of duty in Iraq and Afghanistan. The club is even expanding its revenue streams, creating licensing opportunities from its 18 trademarks and opening a retail store in Toronto in 2013. Despite rivals on both sides of the law, the club continues to thrive.

Timeless, adaptable and intensely resonant (positively or negatively), the Hells Angels club brand is the envy of brand managers worldwide, whether they’ll admit it or not. You don’t like them? They don’t care. So skip liking or disliking them, and start emulating inside your own organization the ways they’ve created one of the best culture brands in the world.”

Devin Liddell leads the brand strategy offer for design consultancy Teague


3 business lessons from Mexico’s Sinaloa Drug Cartel

random thoughts

“Blockbuster is gone. So are Lehman Brothers, Atari, Pan Am and countless others each year. Startups fail, too, with 80% going belly up within the first 18 months. But here’s something to consider in comparison: criminal syndicates don’t go out of business. The Chinese Triads have been around since the 17th century. For 25 years, Mexico’s Sinaloa Cartel has outmaneuvered vicious competition at home as well as the United States’ $51 billion —annually— War on Drugs.

Net margins for criminal organizations shame their legal counterparts; while airlines earn 1.8% and oil companies average 8%, cocaine cartels earn a 93% net margin —for just wholesale. Profit per full-time employee ratios are also off the charts. Google’s profit per FTE is $270,000 and Apple’s is $460,000, both of which are impressive. But the Sinaloa Cartel’s profit per FTE is estimated at $20 million. The global reach of these organizations is also expanding; beyond North America, the Sinaloa Cartel is now active in Europe, Asia, and Australia.

All of this money and growth is happening despite the efforts of governments and law enforcement agencies to eradicate them. And yet criminal syndicates make immense profits mostly in competitive commodities businesses. So how do they do it?

In a word: culture. Criminal syndicates are far superior at creating successful cultures than the vast majority of the Fortune 500. All successful criminal syndicates, across cultures, geographies and endeavors, are primarily culture-driven brands. Despite their significant differences, these culture-driven brands have 3 key attributes in common.

The Japanese yakuza identify themselves as ‘chivalrous organizations’ and operate within strict codes of conduct that express very specific organizational values. The Sinaloa Cartel, unlike its competitors, actively cultivates a populist image and claims to adamantly oppose kidnapping and the murder of innocent civilians. These beliefs govern organizational behavior—who they are, what they do, and what they won’t do. And theses credos are far more actionable and authentic than the ‘values’ posters hung in corporate cafeterias. In place of employee handbooks and other corporate drivel, these organizations have distinctive rituals, symbols and artifacts to express their credos.

Corporations can over-index on ‘innovation’. But improvisation is a form of innovation, and just as important. As streaming technologies emerged, did Blockbuster improvise and move quickly to shift the way it did business? Not quickly enough. And that’s reflective of mainstream corporate cultures that tend to think of innovation as a ‘process’ rather than a behavior.
Criminal syndicates are different; they think of innovation as an organizational imperative. A drug smuggler who finds a new way across a border knows that customs agents will eventually discover the innovation, so he needs to always think of new ways. The Sinaloa Cartel was the first to design and construct a tunnel under the U.S.-Mexico border. The cartel also managed to have family members hired as border agents, and even used a catapult to counter a high-tech fence in Arizona. The yakuza benefit from highly diversified revenue streams, which they’ve systematically grown from traditional gambling and prostitution rackets to modern construction and transportation businesses. Where there is a threat or an opportunity, criminal syndicates improvise.

While too many corporations bury employees within organizational charts that are so big there’s specialized software for creating them, criminal syndicates stick to small teams. With just an estimated 150 members, the Sinaloa Cartel produces revenue equivalent to the GDP of Belize (a country with more than 330,000 people). And while the Yamaguchi-gumi is the largest yakuza organization with more than 20,000 active members, those members are spread across 2,500 different businesses and 500 sub-groups. The teams are small, but they can pull significant resources from the whole.
Just as importantly, the small team structure nurtures an entrepreneurial zeal and an emphasis on doing. With so much at risk, with everyone empowered, and with everyone aligned through shared values and a unifying sense of purpose, criminal syndicates use small teams to accomplish really big things.

There it is, the underworld model for success: small-but-big teams inside belief-driven cultures improvising continuously.”

Devin Liddell leads the brand strategy offer for design consultancy Teague

6 bad habits holding you back from success

improve yourself

“We all have bad habits, but bringing your baggage along to the office can be the difference between soaring or stalling in your career. Below are six common workplace bad habits to break if you want to continue moving up the career ladder:

1_Being a lone wolf. Collaboration is the key to workplace success. You need to show you can play well with others. After all, managers and those in charge need to be able to lead a team.

2_Saying sorry. Are you apologizing too much in the office? Saying sorry about every little thing implies you are constantly making mistakes, and can undercut your position in the office and with managers.

3_Taking on every project. Do you get excited by new projects? Do you like jumping in with both feet and finding new challenges? These are great attributes to any employee, but it’s time to learn your limits. If you say yes to every single project, you might soon find yourself unhappy, burnt out, and badly overworked. The word “no” is a powerful thing. Be protective of your time and abilities, and know when one more task is just too many.

4_Being negative. Enthusiasm and passion are traits managers look for in superstar employees who get promotions and excel within the company. No one wants to promote someone who looks miserable to step into the office each day. Ask yourself what would make you wake up excited about your workday, and chase after your dreams.

5_Doing things the way they’ve always been done. Innovation is the lifeblood of any company, yet many workers just come into the office to punch their time cards and collect their paychecks. Lack of innovation in companies, it turns out, is a two-way street.

6_Being disorganized. Imagine how much of your work life is being frittered away every time you misplace a report under a pile of desktop debris. People walking past your cluttered workspace are judging you for your organizational chaos.

Your bad habits don’t have to hold you back from career success. If you tackle these habits head-on, you might just find yourself moving on up the ladder.”

Ilya Pozin serial entrepreneur, writer and investor