Cultivating Culture: The Hidden Engine of Business Success

[00:00:00] In this day and age where some of the corporate leaders and even political leaders seem to be getting away with murder, you could be forgiven for thinking that leadership is no longer about taking the moral high ground and creating a culture of trust and honesty and innovation.

[00:00:20] Well my guest today on The UnNoticed Entrepreneur is going to explain to you why actually creating a culture is one of the most important things you can do as a leader.

[00:00:29] That it will definitely impact your bottom line and they've got six aspects of culture that he's going to share with us and how you can put those into your business.

[00:00:39] And much more besides, we're going to Conway in Arkansas to meet Jeff Standridge who is the managing partner and CEO of a company called Innovation Junkie. Jeff, welcome to the show. Great to be here Jim. Thank you for having me.

[00:00:54] Well thanks for coming on the show Jeff because anyone that is leading an organization right now must be wondering about culture and about integrity and values

[00:01:06] because what we're seeing certainly in the political arena is some of the leaders of the world are getting away with literally insurrection and fraud and yet they're still managing to be seemingly successful.

[00:01:21] But what goes on in the political field doesn't really translate to the corporate field, does it Jeff? Tell us about Innovation Junkie and why culture is so important and then we'll ask you how people can build a proper culture for their organization.

[00:01:37] Sure. Well Innovation Junkie is a consultancy that my partners and I started a few years ago focused on helping organizations and their leaders generate sustained results in the areas of strategy, innovation, profit growth, organizational transformation, leadership

[00:01:54] and to really everything we do is focused on that sustained strategic growth. Strategic growth can be explosive but strategic and thoughtful nonetheless and so that's where the majority of our practice focuses and happy to talk about culture and anything else that comes up between us today.

[00:02:13] Well Jeff, thank you. With Innovation Junkie it's a great name. First of all where does the name come from Innovation Junkie for the business before we dive into culture?

[00:02:22] So interestingly in 2008 my business partner Jeff Amaran another Jeff started a company called Startup Junkie and it was kind of he calls it the accidental company really was focused on driving economic development in our own state, the state of Arkansas through entrepreneurial support and that organization

[00:02:45] Startup Junkie and then the Central Arkansas divisions called the conductor but it's one team two different locations, a single organization with two brands so to speak

[00:02:55] and we really focus our efforts for that side on funded services that come from organizations like the state of Arkansas, the U.S. Small Business Administration, various corporations

[00:03:07] all of whom have a vested interest in entrepreneurial and economic development for the state of Arkansas. They work with us so that we can provide free coaching, consulting, training and mentoring

[00:03:18] to entrepreneurs aspiring entrepreneurs and small business leaders. Over the years of doing that we started having a number of companies from around the world coming to us

[00:03:28] because of our success in focusing on entrepreneurs and saying we need some of that same kinds of entrepreneurial thinking, think like a startup, innovation, strategic growth

[00:03:40] but we know we don't qualify for the funded services and how can you help us and so in order to keep those business models pure we created Innovation Junkie in January of 2020

[00:03:53] to actually focus on the paid consulting services. By the way, January 2020 great time to start a new company. Right before the pandemic.

[00:04:04] I guess because we're all going virtual there are some opportunities but now we're through that Jeff and plainly you survived and thrived during your fellow Jeff, the two Jeffs, the two Jeff army.

[00:04:17] Jeff, I did ask this question slightly tongue in cheek about some leaders in the public realm seeming to get away with leadership without cultural values. I guess that you could argue they have cultural values but they may be just different to what some people have got.

[00:04:33] What is important for a leader of a company when it comes to creating values? What should those be and how should they go about setting them?

[00:04:45] Well, so a lot of leaders in my experience and a lot of organizations mistake culture for a set of core values that are beautifully articulated and graphically designed and on a banner that they hang on the wall of their conference room.

[00:05:02] And they think that that's the extent of creating culture and organization. You know, the fact of the matter is strong cultures strong positive work cultures in in for profit organizations have been directly linked to increased revenue growth, increased profit growth, customer satisfaction,

[00:05:20] employee engagement and retention. So there are real business outcomes to be generated as a result of having a strong culture strong positive culture by the converse there they're very direct business outcomes that can be generated by not focusing on creation of that culture.

[00:05:40] So I think having a baseline understanding of the importance of culture number one and number two, understanding what culture is. Culture is the sum total of everything in an organization.

[00:05:52] It's not only the articulated values that we put on the wall. It's also the unwritten norms. It's the bad habits. It's the way we approach work.

[00:06:02] It's the degree to which we're process oriented or not process oriented. It's how people feel about us when they come into contact with the organization, both employees and customers.

[00:06:13] And so understanding that human behavior both individually and collectively is at the heart of culture number one and number two to steal the words from Peter Drucker.

[00:06:26] You can have the best laid strategy in the world, but your culture will literally eat it for breakfast if you're not focused on managing the culture as well.

[00:06:35] Interesting. So the culture is everything. How does it relate to brand then because some people say well brand is everything and everything you do is represented by the brand but it sounds like you're saying actually culture is everything.

[00:06:50] So how do you see that relationship, Jeff? You know, I think there's a very thin line between brand and culture. You know, I would say by in large they're the same thing.

[00:07:01] It's just that culture is probably just a wee bit more internally facing and brand is just a wee bit more externally facing but they get their fuel from the same things, human behaviors and perceptions.

[00:07:18] Interesting distinction there and I guess also a brand has often a visual interpretation doesn't it? Whereas a culture is almost by definition. It's a feeling, isn't it? A culture. Here's a parallel for you.

[00:07:38] Not most. Many leaders mistake culture for a beautifully designed set of core values that they put on the wall and think that that's it. Many organizations think brand, mistink brand to be a beautiful logo that's on a website or a piece of letterhead and that's it.

[00:07:58] And so those two parallels I think are where we leave a lot of literal money on the table, so to speak at misunderstanding the depth of both culture and brand. So there's a whole topic there isn't there but let's try and go into the key elements of cultures.

[00:08:17] Anyone listening here whose thought of culture as being just for big companies? Maybe not for them. Maybe they think it's their business and they got 10 to 15 people that culture isn't something we have to work on yet. Jeff, tell us about the elements of a constructive culture.

[00:08:36] Sure. Maybe before that tell you kind of okay who's this Jeff standards and how does he able to talk to us about culture? I have studied excellence at the individual level, the team level and the organizational level for most of my career.

[00:08:51] I started studying it academically as a professor at the University of Arkansas for medical sciences back in gosh the early 90s and started studying individual excellence. What is it that differentiates individual top performers from individual average performers?

[00:09:08] And that led me out of the world of healthcare into the world of technology, publicly traded companies and I then began studying it on multiple continents around the world. But grew that study from individuals to teams and then to organizations.

[00:09:25] And as I've worked with organizations over the course of the past two and a half decades or so, almost three decades, my team and I we have begun to observe that there are really six major elements to creating what we call a culture of excellence.

[00:09:42] The first one is strong leadership. Number one, having a good foundational definition of leadership. What is leadership? I believe you lead people you manage things. My experience is that leadership is about a set of behaviors not about a title or a role or a position.

[00:09:59] Everyone can demonstrate and should demonstrate leadership. But then also there are specific leadership actions of folks who have the privilege and the responsibility of caring for other people in a workplace in terms of hiring compensating etc.

[00:10:16] I define leadership as the most important element for business or personal success. In simple terms, I define leadership as the willingness to be held accountable for results and then to deliver on that responsibility no matter what the external circumstances situations or pressures.

[00:10:35] And my research in my experience tells me that leadership requires a delicate balance of results and relationships. If I focus on results at the expense of relationships, I'll be wildly successful very quickly until I alienate everyone around me who's responsible for helping me maintain those results.

[00:10:54] But by the same token if I focus on relationships at the expense of results, people will love me that is until they lose respect for me because I can't do what I'm saying I'm going to do when I say I'm going to do it and what have you.

[00:11:05] So there's this concept of being held accountable for results but also understanding the significance of relationships and walking that tightrope. And then part of leadership is also understanding the importance of core values, norms, behaviors, processes, approaches to work and how they affect an organizational culture.

[00:11:25] So that's the first element is strong leadership. As you say, it's being brave as a leader to take those decisions and then to follow through even when the circumstances may have changed.

[00:11:37] And it's no longer in your best interest to do that but you said as a leader that you would follow through on it. That's the hallmark of a great leader isn't it? And this idea of relationships versus results.

[00:11:49] I think you've articulated that really nice to there, Jeff, that one has to have a balance.

[00:11:54] Absolutely. And the second element is clarity and focus. We start thinking about organizationally is clarity and focus, knowing where you're going, knowing how you're going to get there and being able to articulate that vision in a manner that's consumable by the people in the organization

[00:12:11] that they can rally around and work with you to actually execute that vision and that strategy. So having absolute clarity and focus on where you're trying to go as an organization and how individuals fit into that shared direction.

[00:12:26] That then leads to the third element which I refer to as engaged and committed teammates.

[00:12:33] You know, the definition of we used to just talk about employee satisfaction and employee turnover or attrition. But a few years ago this concept of engagement came on to the scene and you know what I would describe the definition of disengagement.

[00:12:50] Turnover is when people quit and leave an organization. Disengagement is when they quit and stay. And so you've got them, they've basically given up. They've quit producing yet they are still employed by the company.

[00:13:05] And they say that disengaged employees cost the organization somewhere between 30 and 50% of their annual fully loaded salary yet again. So if they're $100,000 of annual salary fully loaded with benefits and vacation time and everything, then it's really $130,000 to $150,000 cost.

[00:13:25] That's fascinating, isn't it? You're really carrying dead weight aren't you there? A bit like a team that's playing a sport.

[00:13:30] If you've got one player who's not really committing to going for the ball or for the goal then they better off having them off the pitch aren't you Jeff?

[00:13:38] That's right, for sure. So engaged and committed teammates is number three. One of the ways that you get engaged and committed teammates is by having which is element number four is empowering communication.

[00:13:49] So if we think about the definition of the word empower, it's to make someone confident, stronger and more confident in dealing with the circumstances that they're facing.

[00:14:01] So that's the definition of empower. So empowering communication is a communication approach, a communication style that literally makes someone stronger and more confident in dealing with the circumstances they're facing.

[00:14:14] Now that doesn't mean that you have to shy away from having difficult conversations, but just the mindset of carrying out that difficult conversation is when we leave this conversation I want them to feel stronger and more confident at facing the circumstances that they're facing.

[00:14:29] So how can I carry out this conversation in that regard? Yeah, it's really powerful especially for maybe younger newer members of staff or people that feel less confident in their social place in an organization or people that work from home. For sure.

[00:14:48] That can feel a bit more distanced, can't they from the organization? So working on making sure they still feel as though they've got a voice that can be respected and make a difference. Jeff, that's great.

[00:15:00] Exactly. And you know, all we have to do is think about the opposite of empower which is disempower, which is to make some weaker and less confident in dealing with the circumstances.

[00:15:09] So just having the understanding of what empowerment versus disempowerment is and thinking about that when we go in to have a difficult conversation with someone can change our mindset in terms of how that conversation actually plays out.

[00:15:23] The fifth element is what we call 100% accountability. So having a laser like guidance system that keeps you focused on the organizational vision strategy and plan being accountable to that, but also having accountability down to the individual level.

[00:15:43] And what I would say 100% accountability looks kind of like this. If I've committed to doing something by a specific day in time, let's say I've committed to you Jim that I'm going to have something to you by noon on Thursday.

[00:15:59] The very first possible moment that I see that that deadline is at risk or my delivery of that to you is at risk. I have a conversation with you versus waiting until Friday and you asking me about it and I say, oh yeah, I got distracted didn't get to that or I got busy and didn't get to that right.

[00:16:17] That's not 100% accountability. 100% accountability says that I do what I say I'm going to do when I say I'm going to do it or at the first possible moment that I see it's at risk. I say, hey Jim, I know I committed this to you by noon on Thursday.

[00:16:31] Is that still a drop dead deadline for you? You could say no, I'm probably not going to look at it till Monday and everything's great. Okay, super. Can I get it to you Monday morning or over the weekend?

[00:16:41] Sure. Or you might say, no actually Jeff it is. You know I've got a client meeting at two o'clock and I really need that by noon to give me some prep time to which I would have to say, okay, I'm at risk.

[00:16:53] I need to shuffle some responsibilities. Can we talk through this and figure out what I can put on the back burner to get this to you by the time that I committed? That's just as much 100% accountability as delivering it to you when I said I was going to.

[00:17:08] And as a leader, a line manager for example, the importance of letting people share their predicament as opposed to being dictatorial and authoritarian about it is really key isn't it Jeff because circumstances do change someone maybe can't work something out and so they are struggling with the deliverable.

[00:17:30] You have to be flexible enough to just reconsider the situation don't you even if you're not going to change, you've at least given them the respect and the time.

[00:17:39] For sure. And in my experience is number one we set deadlines completely arbitrarily and most of the time and number two many times when we set a deadline the circumstances change and that deadline is way more flexible than it was when we said when we looked at it or when we said it rather.

[00:17:55] And so, you know, being willing to say yeah, you know what I'm probably not going to look at it till Monday. So yeah, Friday's fine but even Monday is going to work fine for me and creating a culture empowering communication where people feel strong and confident in coming to you and saying, hey, I'm at risk for delivering this when I said I was going to deliver it and creating that as a culture.

[00:18:16] That brings me to the fifth element or the sixth element rather which is what I call organizational agility, you know, I use the words of Peter Drucker a few moments ago another great management thinker is Mike Tyson the boxer who said everybody has a plan until I punch him in the mouth.

[00:18:32] Right. And so, you know, organizationally we've all got a plan but then we get punched in the mouth as an organization whether it's a new competitor comes on the landscape, a product launch fails, a pandemic hits or whatever occurred a new legislative change and being able to bounce back not just having mental and emotional individual resilience

[00:18:54] but being able to cultivate that organizational resilience or organizational agility is that that sixth element of having that culture of excellence.

[00:19:03] Jeff, the way you articulated culture seems like such an obvious and I don't mean that in a in a dismissive way but it seems like so logical and so obvious and the benefits seem so real and so practical.

[00:19:18] In your experience with innovation junkie why why do people not pay more attention to it. We'll be back after a quick break. Would you like to double your salary without starting another business?

[00:19:37] The easy way to do this is to join the board of another company get well paid for a part time role you get all the credibility that comes with being a board member plus you get to hang out with some very cool people and learn how other businesses are dealing with their problems.

[00:19:50] If you'd like to know more if you'd like to learn how you get your first board seat within 60 days just click on the link below as unnoticed is a gold sponsor of our summit so you get free tickets. Enjoy I'll see you there.

[00:20:08] You know I think back in the 90s and early 2000s culture was really thought of as just kind of a fluff it was something that was relegated to the HR department and they were responsible for for making sure and it wasn't it wasn't something that leaders of the organization really wanted to do.

[00:20:24] They really saw as creating business value and so the research over the course of the last decade maybe 15 years has really turned that on its ear to say hey look not only are there positive correlations with a strong positive culture for for actual business outcomes of revenue

[00:20:41] and clients that profitability but there are also negative outcomes that come from having a weak culture like increased employee turnover reduced productivity accidents errors and defects and what have you and so understanding that the business value of creating culture number one.

[00:20:59] Number two also understanding that culture is a collective set of human behaviors and if the leader isn't living out and the the the cadre of leaders aren't living out the desired culture of the organization then they're like that disengaged employee they're actually dead weight to the organization.

[00:21:20] And I suppose we've seen even more recently with comes like Twitter for example where the culture has changed quite significantly through the acquisition.

[00:21:29] Then you're getting disenfranchised employees and then in some cases like also in Boeing for example where we've had people starting to be whistleblowers right so there's a there is also perhaps a culture.

[00:21:43] And a shift in the way that people view culture because people are seeing themselves becoming almost the guardians of that culture and when that leadership doesn't respect the culture.

[00:21:55] There's some degree of autonomy now isn't there and also sort of technological power that employees have to to take action right.

[00:22:04] Right absolutely you know some research came out a few years ago and I believe it was about McKenzie I have to double check my source on that but but back when I was doing mergers and acquisitions and I spent about 10 years just focused on on that around the world.

[00:22:18] Some research came out that said 50% of all mergers and acquisitions failed to produce the shareholder value in the business outcome and the number one reason is the mismatch in the culture between the two organizations.

[00:22:31] Isn't that interesting that right there will tell you the importance of physically managing your culture and and and you know understanding that there's a gap between the culture that we say we have or the culture we want which is called an espoused culture.

[00:22:46] And the actual culture in use and the role of the leader is to understand the two of those and to bring those two together. I mean we are all humans and organizations are collections of humans so we're never going to be perfect.

[00:23:00] We're always going to have a gap between who we say we are and who we actually are from one day to the next but we want that gap to be fewer the gap between those two to be fewer and further in between and we do that by actually physically managing our culture.

[00:23:17] We write it down we talk about it we hire according to it we promote according to it we compensate according to it and quite frankly we fire according to it as well.

[00:23:27] Jeff what about the articulation of culture externally because you know we've talked about internally which is very very powerful. But you know that a show about getting noticed I'm also interested in how culture can be part of.

[00:23:46] The reputation and the brand strategy and the communication strategy so how do you help your clients both those that are startups that you're serving funded by government but also the corporates that you're serving.

[00:24:01] How do you help them to translate that culture into it'll be both job ads for example it'll be into partnership agreements into also customer facing materials.

[00:24:15] So when we're helping an organization build out their strategic growth plan and their mission their vision their values of the organization their core values.

[00:24:24] We we move right directly into once we've kind of nailed that mission vision values we moved right directly into what's the brand promise now so based upon who we say we are culturally how does that translate to our customers

[00:24:39] how do we want our customers to say about us what do we want it want them to feel when they come into contact with us what are the way we want them to experience when they won't come into contact with us.

[00:24:49] And what do we want our employees to say that then correlate with what our customers say and so we really don't separate the two we believe in our experience has been that cultivating both the internal culture and the desired customer experience is really.

[00:25:06] The yin and yang of building culture in brand. Really really interesting Jeff that you see them really is one line of continuity right it's a straight line from corporate culture through to the feeling that the customer partner employee has about being involved with that company.

[00:25:23] For sure Jeff you are running. Two companies are the two brands was one holding company one parent company you and your partner Jeff. That's right. Tell us how do you practice what you preach.

[00:25:40] So we as we say here in the US we eat our own dog food and. We run the strategic growth system that we've created in our own company. And you know we we physically.

[00:25:56] Manage the culture every week we have a full all hands team meeting and we start out the meeting actually recognizing people for going above and beyond by demonstrating one or more of the core values. And we talk about that on a regular basis.

[00:26:14] Number two we actually know no one makes unilateral hiring decisions in our company we we hire and we interview and we hire.

[00:26:23] Against our desired culture our set of core values and the norms and behaviors that we expect and we actually interview for those and and multiple people interview and weigh in on every hire that we make within the organization.

[00:26:37] You know we also recognize when we've fallen short and we make it okay for people to give us that feedback as as leaders or as an organization.

[00:26:49] And so just those three things are our small small actions but create large levers that we use to kind of manage that culture within within innovation junkie.

[00:27:00] Yeah those sound well you've got a sort of triumvirate there have your trilogy of policies and you don't need to many or it's very hard to manage them isn't it.

[00:27:10] So it's well if people can't remember the core values if they can't recite them if people can't spouse and actually articulate to you the kind of culture we're trying to create then it's not impacting anybody's behavior if if they can't remember.

[00:27:23] Yeah well that's very hard to live them if you can't remember if you can't remember Jeff if there's a piece of advice that you'd give a fellow. Unnoticed entrepreneur that maybe hasn't even thought that sounds like culture really is a verb more than just a noun.

[00:27:41] What would be that piece of advice that you would give about creating culture.

[00:27:46] Yeah you know I always say go out and talk to your customers you know you can never go wrong by talking to your customers and ask your customers how would you describe the culture of our organization.

[00:28:01] Pick out a dozen or fifteen customers and ask them that and and just listen don't try to defend don't try to correct just ask them the question how would you describe the culture then go and ask your employees the same thing.

[00:28:17] A dozen fifteen or so randomly selected how would you describe the culture and just listen and take notes and then begin to compare the two. I think what you will find in most instances if leaders haven't really thought about the connection between the two.

[00:28:33] They'll be extremely surprised number one and they will walk away it will be almost physically impossible for them to take action. In physically managing their culture if they take that that approach and that do that one exercise.

[00:28:49] That's what I'm sort of a really sort of a disparity gap right between what you believe yourself to be and what people perceive you to be and then. Right.

[00:28:57] And then it's about being brave isn't it courageous and taking action to constantly work towards bridging that gap as a leader. Jeff Sanders Jim Collins Jim Collins in good to great said that good leaders that are that take companies from good to great confront the brutal facts.

[00:29:12] And so confront those brutal facts as an entrepreneur. Yeah that you've quoted. The only person didn't mention was Tom Peters in search of X and so I was waiting Jeff for you to mention him because you did talk about it.

[00:29:25] Jeff you're playing a well read man if there's a book or a podcast that you would recommend what would that be. Well obviously I've spent some time listening to the unnoticed entrepreneur so I would highly recommend highly recommend that.

[00:29:39] There's a there's a gentleman by the name of Craig Groschell Craig Groschell and I can't think of the name of his podcast right off the top of my head but he's got a great leadership podcast that I would encourage people to take a listen to as well.

[00:29:53] OK Jeff that's wonderful. Jeff if people want to get hold of you and innovation junkie where can they do that.

[00:30:00] I'm always active on LinkedIn so Jeff standards on LinkedIn Jeff S. that's Jeff standards or Jeff S. at innovation junkie dot com or Jeff standards dot com any of the three of those they can get in contact with me and I'd love to interact with any of your listeners.

[00:30:17] Jeff and I'm sure we would all love to have more time interacting with you too. Thanks for sharing about culture it's something that you've plainly thought a huge amount about so thank you so much for bringing the wisdom of all your years to the show.

[00:30:30] It's been my pleasure I appreciate you for having me and hope you have a great week. Well it's been made better by having you on the on the call here Jeff so.

[00:30:39] For those of us that have been listening I think you know Jeff's really sort of brought the topic of culture for me alive and that culture has been something that we sort of talk about in in sort of.

[00:30:53] Slightly Citeric terms actually that there are these six elements that he's articulated that really make up building a culture so.

[00:31:03] Taking action to build a culture is really part of our role if not a central part of our role as leaders because without that we can't get the engagement from our people and from our partners and from stakeholders customers and investors.

[00:31:18] I'm sure you found this as insightful as I have and if you have please do leave a review on the podcast player that you're listening to.

[00:31:26] And if we've got a chance to share it with a fellow unnoticed entrepreneur that would be great and until we meet again I just encourage you to keep on communicating.