Does Culture Really Eat Strategy for Lunch?

[Music] hello everyone welcome to the 21 hats podcast I'm Lauren Feldman your host every week I sit down with three business owners to talk about the challenges they're facing it's the kind of conversation you don't often hear in public our panelists address difficult topics like why their business isn't making as much money as they think it should why their digital marketing isn't working or why exactly they hired their brother-in-law owning a business can be a lonely and isolating Pursuit but at least you'll know that you're not the only one facing these issues got a question you'd like us to address send it to us and follow us on Twitter at21 hats or on our website 21h hats.com let's meet this week's 21 hats podcast team with us today are Laura Xander CEO of Jimmy beans wool a digital version of a neighborhood yarn shop that is based in Reno Nevada Jay gz who has several businesses in Chicago including a picture framing shop artist frame service and Jason home a home furnishing store and and William Vander blumen who is CEO of Vander blumen Search Group a recruiting firm that's based in Houston and specializes in working with churches and other faith-based organizations so today I'd really like to talk about culture and I have to confess this is a term that kind of gives me the willies mostly because it gets thrown around a lot and I think its meaning often gets lost we often end up talking about trivial things that I'm not sure really reflect the true culture of a business also I think we often talk about it almost uh almost a fantasy version of uh what it's like to work at a company when everything is going great that ignores what happens to the culture when you know the business struggles uh so I'd like to start with a question uh I've always been curious about this what do you think comes first do you need a great culture to build a successful company or do you need a successful company to build a great culture uh William I'd like to start with you both because you've written uh a really good book on culture called culture wins and because in that book you acknowledg that you didn't start out with a great culture in fact you didn't have a very good culture at all and and you had to figure it out so let me ask you first which one comes first is it a successful business or a great culture well I think some of that depends on uh the age of the organization uh you know one organization I worked in that I didn't fit the culture was uh a church that was uh been around for a long time long long time and I came in assuming that I could shift or change a culture that had been around a long time um so so if you if you're going into an organization that's been around like the culture of IBM arguably is going to be pretty tough to change whether it's good or bad on the flip side if it's a startup what I'm learning as we built our company here is is uh we didn't figure out culture for a while but the culture in a newer organization seems to be predicated on the people themselves that are there the the founder and the first three or four that that work alongside the founder so so in some ways I think uh you can say you want to have a culture all you want but but the culture for me is uh how an organization behaves while they're trying to get their Vision or mission accomplished here in Houston were known for Innovation we had you know first uh do sports centers the Astrodome that's why we have AstroTurf uh MD Anderson's Innovative medicine you know curing cancer uh President Kennedy wants to go to the Moon he says let's go to Houston innovation in space uh when I got to Houston in 2001 I realized we had innovation in accounting uh and it was called Enron and uh not the best um but when I was writing the book I don't know if it's still true you can Google image uh the Enron main office lobby and the images that would show up are the elevator Lobby you walk in they have their core values literally plastered to the wall right in front of you is the word integrity well you know I don't know that that's exactly who they were so you can name cultural values all you want you say we're going to have a great culture and this is who we are but that's kind of like me saying I'm going to win the slam dunk competition for the NBA this year it's not going to happen so so it's more of a who are we as people how do we name that and and the question I like to ask is you know when we're functioning at our very best what do we as a team do that's common to us but uncommon to other teams around us then you can kind of do rather than travel to the mountain and come down with the cultural Commandments uh do kind of an archaeological dig of the team that you have have and and you'll discover your culture and then you can can lean into a little bit a little bit more aspirational version but you can't just create culture that's a roundabout answer for you I hear you saying that culture is something you discover not something you mold and I think if you if you read business journalism you read the opposite people seem to think that culture is is what you make it Laura what does culture mean to you we just do what we do and we are who we are and I guess people call that culture but I don't try to create a culture intentionally um I mean I'm on the same page as William we're like Madonna you know who we are today is very different from who we were five years ago which is different from who we were 10 years ago there are some consistent you know rules if you will you know you must respect every human that walks in the door and recognize that we all have equal value um and equal talents um that's something that's always been the case you know so there are a few things kind of underlying but you know as an outsider coming in if you were to look at our and try to Define our culture you would see that it has changed over the years because we have different people that work here over the years a Laura that's where I'll butt in and say exactly the culture is defined by the people on your team and and the mistake I see organizations make is when they say we're going to go copy the cultural values of Google and we're going or the slide deck for Netflix and we're going to do that well no not unless you want to just change out all your people to match that I think the people you have Define the particular culture that you have now I do think to clarify a little bit to me there are two layers of culture one is are you a healthy place to work like you brought up such a good point Laura respect everybody who walks in the door well that's not like that's just got to be a a a cardinal rule and that's just are you healthy or not the second piece is all right within that General Health what is our particular set of uh family behaviors or family Rules or or uh the way we always do things around here I love what you just said about the family Rules we just had a conversation yesterday here now that I'm in Texas about how one of our and I not Ed this term before but I'm going to use it from now on but one of our family Rules is you're allowed to have a bad day you're allowed to be snotty you're allowed to you know um cut somebody off or do whatever it is because we're humans but you have to come back and apologize and own it and that is one of the fundamental rules you know if I'm shitty with somebody then I come right back as soon as I can and say God I'm so sorry I was totally inappropriate blah blah blah and then we move on if we were NBA students we would be teaching that that is culture as you as you've defined it Jay I want to get you into this um you know what I'm hearing from William and Laura is I think very different from the conversation that we we often hear uh on this topic one of the one of the lines you hear repeated all the time is uh culture uh eats strategy for lunch uh which certainly implies that it's something that you mold not something you discover um where do you fall on this first of all I think corporate culture is a a subset of management it's management it sounds much sexier and much cooler and much it it makes but at the end of the day I believe it's a function of management and in my little world in my brain I think corporate culture is three things one how far are you going to go for customers I mean are you going to do whatever it takes everyone says they do but they don't you know so in my case we always get the customer taken care of whatever we have to do we do it and everyone that works here knows that if we got to stay late we got to come early we got to drive it over somewhere um we do it whatever we need to do number two is how much you expect ECT out of employees I don't want people working here 60 70 hours a week and um that doesn't mean that I want them working 40 if they didn't get the job done but some some organizations push people a lot more and and I think how far you push people and do they need to be pushed and how demanding you are is absolutely part of corporate culture and lastly is how do you treat each other the problem I see in it a lot of times is I think most companies would say oh we want a respectful environment everyone to treat each other nice but they keep Bob around who really is a jackass and everyone rolls their eyes and says well everyone knows how Bob is and that is a bad excuse and I get rid of Bob eventually I talked to Bob I talked to him the first time I talked to him the second time and I explain to Bob you can't do that again because if you do it's going to be your last day because that's not how we treat and I've had to do that two or three times that there were people working for me that were here for years that I would find people in the back crying what's wrong oh so and so she makes me feel bad about myself and blah and I would talk to this person and they can't stop they just can't stop themselves so um my corporate culture is I'm not gonna I'm gonna I'm gonna walk the talk I believe that there's a lot of talk about corporate culture but there's a lot of people who aren't walking the talk and I think it's and I think that whole corporate culture e strategy for lunch what a ridiculous line I mean this just ridiculous I mean what does that mean we don't need strategy any more corporate culture more how about both William Jay kind of just walked through what having a good corporate culture means to him what he's looking how he defines that at his business how do you define it at yours what what are the key elements of your culture well rather than elements uh the recovering preacher will tell a story um so years ago long before smartphones my mother's father would take uh his daughters and sons-in-laws to Europe once every other years so and he made each of them host a city uh so they went to Amsterdam and of course dad being Vander bloomen right okay you're hosting this one find us a place for dinner so he calls the restaurant that he looked up in some book and he said I like a table for eight the name of Vander blumen and they said sorry we only do tables of four or fewer okay can I get two tables of four sure okay two tables of four one in the name of uh Beach and one in the name of vandero and they said can you spell that he said sure v n no no no no sir spell beach and as like these are my people this is home so a good company culture is when a new person walks in the door and in a very short amount of time it's like I belong here this is my people now so there are two layers to that one is there's a layer of human decency there's just a a basic is this a healthy place to work but then beyond that it's a i fit in here this feels like family I don't mind spending most of my workday here because I function like they do there are a lot of terribly competent people who are decent human beings who would never fit in at our company because we have quirkiness that all of us share and and the quirkiness and we all carry the same dysfunctions and and whether that's we respond at a ridiculous rate or we can have a love for a wide range of different clients we've been able to identify nine different things that identify Our Kind of Crazy our dysfunction and and then go find people that fit that so that when they walk in they say finally someone that can spell Vander blman someone that this is my people that that's a long-winded answer but there you go I love that um William that the watershed moment for us a couple of years ago I finally just let go and surrendered and was like you know what we are who we are and either you're going to fit or you're not and we can't quit trying to do all these gymnastics to bend to every person that is as you said a good decent human that might be smart and capable that walks in the door that doesn't fit We Are Who We Are we say we only hire broken people if you're not broken don't come work for us because I am so broken I can't deal with a bunch of perfection around me I just can't and that's where Jay Jay I totally agree with you about you know strategy and culture need to go together but the mistakes I made in hiring many times early on was to say oh my gosh they're so talented and they want to work here this is awesome their talent is so good like and to to lay it over the metaphor their strategy for business is so good but they didn't fit the who we are and I couldn't make it work and I finally got to the place where there there's some exceptions to this but my general rule is I can't teach cultural fit but I can't teach strategic competency so I'll take culture over competency almost every time and that may get close to the to the Drucker phrase that that Lauren mentioned earlier which Ducker phrase I love Drucker he's one of the few guys I Love Culture eats strategy for yeah that's seriously yeah so disappoint sorry to burst your bubble God that is so so disappointing okay uh one more hero go on all right he still no he said some brilliant stuff that is AB you know he has said you you you can't look for opportunity and solve problems at the same time which which is I believe which means you better F find out a way to fix your problems because you can't continue moving forward without you know so I think he said some really smart stuff the people that work with me are really into what they do I need people who are passion driven for what we do I need people that are going to go oh I would love to be in display or I would love to be a buyer I I need people that identify something that are really into it not someone who will take any job because she figures it'll maybe give her a better line on her resume and we've gotten really really good at hiring because after enough conversation you can figure out whether these people think like we think because that's my turn on my average person's been here 10 and a half years it's because of the hiring process for sure William I'd like to go back to something you said you gave the example told the story of you know feeling at home cuz someone knew how to spell Vander blumen um it when you think about the fit in those terms it it seems as if it would be easy to end up in a situ ation where you are hiring people who who mostly kind of look like you how do you avoid that how do you spot fit uh while also uh looking for diversity yeah that's a great question so so we started I started the company on a card table we started adding people all of a sudden we're winning culture Awards when we we named our cultural values and gone through a process but we never really studied it so then got asked to write a book about it and I went and said well this doesn't even about me cuz I I'm just a preacher with a religion and Philosophy degree uh so we went and interviewed 150 CEOs of companies that were winning best places to work top company culture all these s to to find sort of the common threads and one of the common threads that I heard is this two- layered approach one we need to be a healthy place to work but then secondly we have to do the hard work of discovering why we all fit together and that's where I got to this question when we're functioning at our very best what do we do that's common to us but uncommon to other teams around us once we started to get clear on that and I heard it over and over and over from from huge organizations to small startups that have gotten best places to work is we figured out what we as a family do together that might be weird for others once that got named for us we were able to interview around it and uh you know great example one of our values is ridiculous responsiveness and and uh that's there's a long story behind that basically I'm a little OCD about getting back to people and and so that birthed a team that carries that same value where we generally get back to people within 60 seconds of them reaching out to us and and that's kind of crazy I mean there are a lot of smart people that just don't do that and that doesn't make them you know abnormal once we had that figured out we could start interviewing to see if someone innately behaved the same way we do do you have a test oh yeah I got to find a new one because I've told the story but uh you know we bring Lauren in for an interview because he wants to come work with us and it's great you fly all the way back to to nework and you take the train into Princeton and you finally get home and then you get a text from somebody you don't recognize and it's a text that says hi hi luren uh this is Jay I work at vanderman I was on the road today I heard you in the office for an interview love to connect with you sometime well if you don't do anything that's that's fine if if you if you get back to Jay within 24 hours that's pretty awesome this average response time for for leads is 42 hours which is insane why would you not reply in two minutes and just be like hey hey two minutes is too slow but but if Lauren chooses to text right away say hey I'm just getting home to my family but let's set up a time to talk next week and that's that same night well now it's wow but if you had just told me you wanted me to respond within 60 seconds I would have done it I I didn't know yeah that's right that's like the lame interview question what tell me your greatest weakness I mean right you know no no no find ways to interview when you're not supposed to be interviewing to see if people function and behave the same way you behave that's weird to the rest of the world and and that's when you get that's that's a whole Step Above is this a healthy place to work and oh Harvey's just that way it's a different way of thinking but but my study of the 150 companies showed me people are starting to say okay we're all broken thank you Laura we but do we share the same kinds of Brokenness so that when we work together there's a Synergy that's really amazing oh my God that's really smart you should write a book b someone so why are you looking for a job and they go well it's just time really what does that mean I mean no really and I and I know you've been told not to say something but there must be something about your job you don't like and I'd like to know CU maybe I'm the same way here it'll save both of us a lot of time I had a woman tell me one time it's just too corporate really what does that mean well you got to use a key card to get into the bathroom I figured it out myself what the problem is she was a graphic designer in a real estate firm the only one and she probably had 10 bosses throwing stuff on her desk all day long going no no this is more important than the other guy and I'm sure it was frustrating if she would have simply said frankly I'm the only graphic designer there I got 10 bosses I would have accepted that I would have liked her honesty and I would have hired her instead I don't want to hire her because I learned that if they're not honest on the interview they're not going to be honest two months later and I found that people that do the phony interview don't work out well here do any of you refer to your uh your teams as family absolutely not I'm not getting trapped into that I think it's like a family but I believe that's a very very serious trap because you don't fire your family members yeah but Jay that sounds like you have a much different family background see in our family you do fire members um fired a couple of cousins I gotta say I've did too I did too you don't have to love them you don't have to like them you don't have to see them um that's you just have a biological connection to them Laura do you refer to your people as a as a family informally yeah um every once in a while I mean it's not like it's a term that we use but I can't say that I've never said that sometimes times this is like family and in again back to the it's okay every once in a while we're going to get in an argument every once in a while we're not going to agree but as long as we respect each other and care about each other you know we can work through it so um I also refer to it as a basketball team um so I'm not yeah so yes William how about you yeah I you know it's so interesting I learned a new word a few years back uh we do have a lot of Millennials in the office and I learned the word uh Fram uh you know the friends and family sort of thing I'm just learning from them and one thing I'm learning is this generation which now dominates the US Workforce uh in general they're the first generation the first people within sub Generations where you know it's not really a cardinal goal to get married and have kids before you're in your mid-30s and so you got a lot of people who are waiting longer to get married waiting longer to have kids so what does that mean that means you've got a lot of people whose primary relationships are found in the workplace and that's a whole different ball game this generation's going to come and go from jobs and careers like crazy and and to me retention is going to be the competitive Advantage for companies over the next 10 to 15 years as this generation saturates the workplace and and retention to me will will depend largely on is this a workplace and a group of people I want to do most of my my time with so I maybe you don't call it family but it's different than the old school they just work here uh so so we we call it family and we've had to learn that that means there have to be boundaries like it can't get too fuzzy uh that can be a there can be a whole lot of risk seeing your staff as as family but uh but but it's certainly more familial including drawing a line when you have to draw a line do you do you ever feel that it gets in the way of that totally and and I mean we could spend hours parked on this because I've learned so much the hard way uh well yes we're all one big happy family until something gets weird and then you know it's hard so I I toally hear where Jay's coming from but but in in my experience I've had to change my leadership to not view people who work here as just people who work here and then go home to their family do you have anybody working for you who if you had it to do over again you you wouldn't hire them perhaps um but let's say 99% of the people that we have right now for the very first time in 17 years are are rock stars nobody has 99% rock stars no no no but we're we're good I mean I don't think we have anybody I have eight NS and tens working here tens are a fluke of nature you'd be lucky if you ever get a few of them at one time nin's got lots of them lots of eights the PE the ones that kill companies are the sixes they're not quite bad enough for anybody to fire but they're not good and they're costing the company and the other employees are covering from from them and those are the ones that we all roll our eyes and go well they're trying hard oh uh uh he's been here a long time oh everyone knows who who those are the ones that kill companies so I'm I'm happy to say that out of 115 people I've got eight n and tens I might have I not might I have a I have a seven that's been a long time that's getting it it sometimes it's not worth the it's just not worth the grief and I finally figured out I don't need to figure it out I just know they shouldn't work here well and to be fair this is just like all forms of happiness and peace it is temporary William do you have any sixes or sevens I don't know that I'm as quick to grade because it's six or seven within what we've hired them to do and I'd say no we don't uh not at the moment and it's always a moving thing and the company moves and changes um and right now there's nobody on my team that I wouldn't hire over um I might hire them for a different position than I have them in because I've had to move them uh into a place where they're stronger but uh but right now fortunately we're we're at a place where I I'd harm all over again I I had an interesting conversation when I was I joined a business group because in my case I never worked anywhere so I was just on my own trying to figure out the way the rest of the world works so joining business groups was very eye openening so I go to this business group I'm probably 32 34 something like that and I go there and I'm really frustrated and I said you know I got this problem I got this guy that's been with me for 10 years and he's just losing it and it's killing me and I don't know what to do and I thought they'd all just go Jay grow up do what you got to do and you know what they all did they all rolled their eyes and said yeah I got one of those I mean it's a problem it's a problem this wonderful family we want to have like a family we want to be nurturing we want to be responsible but the reality is people can eventually get to a point they can't do the job or maybe the job has changed and it's not pretty and I don't have a quick and easy answer to that most company no not most every company goes through that eventually I don't know how you can avoid it Doug taton wrote a book about it called No Man's Land the the whole notion of the book is that every company reaches a point where what's worked for you so far what got you to this point stops working you you've grown to a point where you you need better capabilities and suddenly somebody who may have been a very loyal uh employee for an extended period of time is in a role that they're not prepared for and can't change or don't want to change Laura William have either of you dealt with that oh absolutely that's the worst at least that that's been the worst for me because again you know you sit there and you wonder what am I doing wrong am I the one who's not growing is it this person who's not growing and especially sometimes when they try they try really hard in this new role and it just doesn't work it's horrible that's when you grow up and you realize it's just not always pretty at work and you try to be fair you try to be nice you give severance pay you try to figure out is there somewhere else in the the company you can do something but it's just it's just not always pretty tried doing in the church well Jesus never fired anybody well you know so so what do you do William well I point him to the story where he did he fired a fig tree and it was bad uh but uh that's a whole different can you send me a note on that so I can use that I love to oh yeah no it's it's terrible I you know what what I am trying to do is trying to keep a couple realities in front of our people one I keep our core values our cultural values sometimes life shifts and cultural fit is seasonal it's not permanent people change their life circumstance changes and and keeping the cultural values out there many times has saved our bacon on uh having to have hard conversations but having something for a reason the why behind the conversation another thing I try to do is just say you know the organization changes and hopefully you know people who are listening today are in growing organizations and like the hardest call I'll get is from the pastor who you know when we started this church together Joe was awesome and then when we got up to 200 a week in attendance he was good we're headed toward 2000 and what do I he's not done anything wrong what do I do you know yeah and that doesn't have to be a church it can be a business too but you know I bought a copy of the book what got you here won't get you there uh I actually read it on Kindle but I bought a hard copy just to keep in my office on my desk and it reminds me and I hope it's a visual reminder to everybody out there you know just because we all fit together now doesn't mean we'll fit together in the future the problem out there in the marketplace is when like I said I never worked anywhere I thought it was just me and then you read these books about these great companies there's nothing ugly in those companies everything's always great and and I've read some really popular books about famous here I'll throw one out Starbucks it was a really interesting book but apparently he's never had to fire anybody because there wasn't one episode in that entire book that talked about that awkward moment where the guy nothing and then you read all these other books and you think what am I doing wrong and it's no they don't tell the truth that's what it was like having a kid and all you read are all these stories about how babies are so great and it's so wonderful and magical to give birth yeah no it is not I'll tell you one of the smarter things I did I had my management staff sit around one day this was years ago and I said let me ask you a question let's think about this if if we wanna how demanding do we want to be as a company let's say that the number one scale is Mr Rogers and we're just lovely to everybody and sweet and we go broke and number 10 is at the time it was GE okay I don't want to be GE where they just fire 20% of the people that we all agreed that we wanted to be a seven and a half or an eight and that we were probably a six and a half and we needed to toughen up a little bit and a wonderful thing happened a couple years later I was talking about a particular employee problem and I finally said to one of the managers I go you know what I think we got to give him a little room on this blah blah blah and she turned to me and she said and you know why because we're an eight we're not a 10 and it just made me feel good all over because that was ex she heard me that's exactly the point and the fact that she was able to to articulate that from something I had told her a couple years later I felt great one thing that has changed in recent years is that there's now uh kind of a measure of your culture that's available to the public uh people can go on glass door now and read comments uh about your business and I'm curious how seriously you take that do do you pay attention to what people are writing about you on glass door do you uh do you try to manage what they're writing about you how do you think about it uh Laura how about you that's you know what I don't I don't go on there um one just I do have our staff go look at it um so that's that's not fair you're afraid to look yeah oh yeah absolutely like I'm too fragile uh and and a lot of times the negative comments are that are on there are things that I know what I've noticed is you know the only people that put stuff up or the people that it did not end well you know or and in many cases it's the scenario that we had just talked about before where it was somebody who could couldn't grow with the company um and you know it was just messy you know we should probably work a little harder on that but we don't how about you William we do um I try not to let it monopolize my energy um it's kind of like do you really pick your restaurant based on Yelp reviews I mean Restaurante teers have figured out how to gain that and make the restaurant look better than it is other people that are just crabby people write crabby things well I guess what I'm looking for is anytime I see a real employee writing something that I really need to know you know we see it even with customer satisfaction we had a guy write in on our facebbook page yesterday well they didn't get back to me as quickly as I would have liked well you know the guy if you knew the story behind the story it's like oh my gosh there's no point trying to you know react to this because the guy was way out of bounds as a client and same's true with uh employ or former employees I'm going to look for is there something I can actually learn that's worth responding to but but I do think that time will tell that unless there's some throttle for quality control with glass door it it can be gamed I mean you can make it look better than it is you can it's all self-reported salaries it's all self-reported reviews and and that doesn't have any nobody would advise a restaurant to get people to put it to completely fake uh positive reviews uh but people smart people do advise restaurant owners to encourage uh their customers to write a review was it an Amazon who's gotten in trouble recently for you know all the kind of fake reviews that are on the site and people gaming all the products and being in retail that's kind of the area that I look at you just you can't trust the information at at least from my perspective you know it starts to lose its value when you can't tell if it's been gained or not been gained and so all of a sudden it at some point it'll become useless maybe this is the difference between my age and the other people's age at some point you just say to yourself enough already like it is what it is and I I'm just you know you got you can make yourself nuts someone's G to get mad at you about something and that's just the way it is and you better get a thicker skin because if you're naive enough to think you're going to make everybody happy and then when you fire people they're going to thank you for giving them an opportunity to find a different job you're crazy so you know you which which starts with do you think you're going to hire perf l no are you going to have some people that you're going to have to eventually fire yes are they going to be happy with you no are they going to go on glass door quite possibly are they going to say nice things about you no it is what it is um and there's only so much you can do on that note thank you all I thought this was a really good conversation thanks for listening everybody this episode was produced by Jess thubron founder of blank word Productions remember if you liked what you heard tell your friends tell your enemies subscribe like us and best of all connect with us follow us on Twitter at 21 hats and visit us at 21h hats.com let us know what questions or issues you'd like to hear our panel of fearless business owners address see you next time [Music]