Why Company Culture is Your #1 Growth Strategy With Ethan Chazin

Welcome to the B2B Growth Blueprint podcast, where we talk with entrepreneurs, founders, and leaders at B2B services, tech, and SaaS companies to learn the systems and processes they've used to create success for their business. We'll also learn from marketing and sales experts to provide insights to help you grow your business. I'm your host, Mark Osborne, and the podcast is brought to you by Modern Revenue Strategies and their 10x ROI B2B Growth Guarantee. Schedule a free diagnostic call to learn the fastest path to double your B2B revenues in just 90 days. The Growth Blueprint Podcast. I'm your host, Mark Osborne, and today I'm very excited to welcome my guest, Ethan Chasen. Now, I'm going to read Ethan's bio because I want to make sure I get this right. He is a people strategist and culture transformation coach. He's also an author, a podcast host, and a prolific content creator on YouTube. I've actually gone through some of his stuff. He works with organizations that, like strong established reputational brands, that are sort of missing those amazing cultures. And he helps them transform into world-class organizations that attract, recruit, and retain the best top talent. He teaches businesses how to measure their people investment by determining the ROI from their employees. And by doing so, he helps unstick their growth by maximizing their workforce performance and productivity for lasting competitive advantage. So, Ethan, welcome to the show.

Oh, Marc, thank you for having me.

I'm really excited to talk about some of these topics we got. lined up. But first, why don't you sort of tell us your story? How did you get to where you are today and, uh, and doing the work that you do?

Oh, absolutely. Thank you for giving me this opportunity to share some thoughts and ideas around business growth. Um, I spent 20 years in corporate America, mostly in marketing management roles, got my MBA in marketing, went out and started working for companies of all different industries, sizes, sectors. Mostly, as I said, in marketing or global product management roles. So I headed up marketing at places like Dun Bradstreet and Reuters and Time Warner Cable. And throughout those 20 years, I really, really loved working with organizations to unstick, to grow, to find new markets, to bring new products and services to market, serve clients. There was something that was always really, really bothering me. And that was that organizations, once they scale and grow organically to a certain size, the size itself presents a barrier, right? to achieving continued success. So I went out on my own, 2009, as a business growth coach. And I've always been fascinated, Mark, with the human side of business. So you talk about strategy, you have a great strategy and not effective people, you go nowhere. You have great operational efficiency, not great people, you go nowhere. So I've really always been focused mostly on small to mid-sized businesses that are in growth. They organically get stuck at some point. We've seen it all the time. And helping them turn the looking glass onto the people in their organization to unleash their untapped potential. And by doing that, over the last 15, 16 years, I've really started to focus on culture. Culture is the greatest competitive advantage that an organization can it use with its people to be successful? So that's really kind of my journey, my narrative arc. Um, the other part of being on my own is, you know, I've taught in 10 colleges and universities, and my students ask me, what's the difference? Or do you like working on your own versus working in corporate? I'll say something I've always felt: my worst day on my own is better than my best day in corporate. And that's it, brother. That's kind of my background.

So, I love this idea that, you know, and people say it all the time, but they don't always sort of walk the walk in terms of, you know, your people are your best assets. People say that all the time, but they don't always sort of, you know, manifest that within their business. When you talk about sort of creating this powerful culture that can, you know, help your people become, you truly felt like they're your best, your most important asset. What does that look like in practice? Like, what does a culture that's sort of people-first mean? Yeah.

And I mean, we've seen, you and I have both probably seen hundreds of definitions of culture. And I really prefer to keep things simple. Culture is how your people actually act and feel when they bring themselves to work, whether it's physically, virtually, it's how they engage with each other. And if you were to put on your Harry Potter invisibility cloak and kind of go in and do an audit of the culture, it's how do people feel about each other, work with each other, respect each other. Um, so when I'm asked to come in and do an audit of typically a small business's culture, I don't want to talk to the founder or the leadership team because they're typically too far removed. Um, I talk to the people, I talk to their contract employees, their consultants, Their vendors, partners, suppliers. I talk to all of those stakeholders and then I go up the food chain to the leadership team and I talk about what's their formal culture, meaning what do they aspirationally want the culture to be? And then what's their informal culture? And I typically don't ask them that. I tell them, this is what your culture is actually like from your people's perspective. Now let's kind of bring them together.

That's interesting. I heard an interesting phrase the other day about Do you believe what's on the walls or what you see in the halls? And it's the idea that oftentimes from the ivory tower or from the executive team, they have an idea of what we want our culture to be, but that's not actually what manifests within the organization.

And there's a reason for that. And you and I both know it. There's a model that unfortunately still exists that a lot of people who have worked somewhere else and get a great idea, better mousetrap, go out on their own. They carry it into this thing that they end up building. It's a pyramid command control structure, which is a vestige of the 20th century, which is dead.

Yeah.

It doesn't work in the 21st century. But they start adding layers of administration. They do this thing by bringing in managers, which is toxic. Managers poison organizations. And they start putting layers because they want the founders and the C-suite too far removed from frontline staff. Managers kill. The mindset of layers of bureaucracy reporting It slows you down, it makes you less competitive, less responsive. The other thing is, you ask me what culture is, go ask all 5 or 50 or 500 of your employees, how much control do you have over your work? It's the whole Daniel Pink thing, right?

Mm-hmm.

It's, do you have the ability to choose what you work on, when you work on it, where you work on it from, and who you choose to work with? And I guarantee you, more times than not, Small to mid-sized businesses, I'll ask their employees. Their employees have little to almost no meaningful control over their work. That's culture, and it kills. It kills. And that's low-hanging fruit. That's something easy enough for me to come in, have a conversation with a founder or business owner or some entrepreneurs, and start immediately. How do I know? Because I've done that with the students I've taught who went out and started their own businesses.

So what is it? So you've described, you know, what a lot of us have experienced, whether in either creating businesses where we just sort of assume this is what you're supposed to do. You're at the top. And so then, you have a manager that makes sure that other people do what they're supposed to do. And so, you've described that as sort of like a key to toxicity. What does the flip side look like? So, paint us the picture of what a company that is set up well to have a strong culture looks like.

And million-dollar question, if not billion-dollar question. So, okay, you go out on your own. You say, I've got the better mousetrap. I know how to build this great product. There's a market need. How do I know? Because the place I worked at and/or our competitors aren't doing it. You go out. Congratulations, today is your day. You're, you're on your way. You started. The minute you hire employee number 2, you should be prepared to give up any meaningful control of the day-to-day, and that never happens. So I'll give you an example. I need somebody to do these 5 or 6 roles, responsibilities. I'll call it a job description. you know, a job title. I'll make a job description. I'll go out and find somebody who can do that. You've already started going down the path of ruin. Why? Because you're hiring for a set of skills that may or may not be even relevant in 1, 3, or 6 months.

Mm-hmm.

Well, what do you do then? You look for people who are rock stars. They're, they're gangsters. They're people who are self-motivated. They're problem solvers, critical thinkers. They can work well on team. How do you know? Because you do behavioral interviewing to ask them about examples when they've done it. Maybe they're servant masters. They've done a lot of volunteer work. They were an Eagle Scout or a Girl Scout. They've done volunteer work. They're active in their communities.

Guess what?

They took a gap year and literally went and studied or lived abroad. You want those kinds of people in terms of hiring based on behaviors and characteristics, not job tasks. And when you stop bringing in new people the old way and you start to rethink what your business is gonna be. Literally, if you're a founder, ask yourself every day, what do I wanna leave behind? What's my legacy? And work backwards on that.

Who's—

you know, it's funny, you talk to salespeople, they'll be the first to tell you, hey Mark, here's my ideal client profile.

Yeah.

What's your ideal employee profile? How do you recruit based on those guiding principles you claim, not just the poster on the wall?

So that's such an interesting sort of thing that you set up there, which, because I've seen this and I'm sure you have as well, and certainly in our audience, you know, you go to work for an early-stage company and they oftentimes say, we need the rock star. We need the person that, you know, can see around corners and overcome whatever obstacle comes up to them and, you know, really sort of solve problems and be strategic. But then they tell them exactly what they have to do every day and they limit their ability to actually be that rock star that they can be because they're too afraid to give up that control. And as you were describing it, so many sort of memories came flooding back. But here's a question though, and I'm sure other entrepreneurs or founders that are listening are thinking this. How can you sort of give up that control and take that trust? Is it just a function of it's going to happen anyway, so you might as well lean into it? How do they overcome that sort of fear of— well, and so there's a phrase, trust but verify. How do you build in not top-down systems of control, but ways to verify that you enable them to do their best work, but you also don't—

Yeah.

enable the organization to go off the rails if maybe they aren't as good as they think they are, or they hit a problem that they can't overcome. How do you challenge that?

Interesting, because it's such a tremendously powerful question. And yet, a lot of times it's an unfair question for you, me as a coach consultant, to pose to a founder or an entrepreneur, because it implies that every single business person who started their business has the ability or the personality, they have certain characteristics and traits that lend themselves to be more open-minded. So the first thing I'll suggest is, I'm DiSC personality assessment certified as a coach. I literally suggest before you make hire number 2, 3, 4, you're not just hiring in isolation, you're hiring based on building a composite team, right? So you should know what your personality is. Are you a driver? Are you a servant master? Whether you use Myers-Briggs or DiSC, I mean, start with a baseline.

Who are you?

Like, understand who you are, because that'll determine who you have the most effective communication and relationship with and the kind of styles of people you're probably more inclined. If you're sales, you're probably a driver, you're probably a strong D, which means you're going to find other people who are Ds. And guess what? You don't have anybody else on your, on your leadership team.

Right.

So first of all, when you say, how do you give up control? Somebody who's a driver, they're not about giving up control. So it's more of a challenge for them, and it's much more helpful for Mark starting a business to know what Mark is hardwired to be inclined to do, and then look for others. I say the minute you start hiring people on your team, do an assessment to understand how you're all interconnected. I literally go into small to mid-sized businesses and I say, you all took the assessment, I gave it to all 9 of you, this is where you all are on the chart, and then how do you think that means in terms of your interaction your relationship, trust. And there's no such thing as trust. There's mature trust, there's complete blind trust, there's different kinds of trust. Um, yeah, so understand who you are, understand who your team members are. The way to maybe reduce the stress of giving up control—

Mm-hmm.

Is I often make it a little bit easier for my clients by saying, let's talk about hiring the best people. based on their ability to help you grow your business. And then often a founder will say, okay, in my heart of hearts, I know I've hired the best people. I feel a little bit more receptive to giving up control because I know that they have a proven track record of achieving, because I vetted them more appropriately during the recruiting process.

Interesting, interesting.

And by the way, you said something else that I just have to I'd be able to jump back to. Do you understand how negative the word asset is? And that's not semantics. When I'm talking to a business owner and she or he says, our people are our greatest asset, I'll say, I can't work with you. And they go, what do you mean?

What do you mean?

I said, do you know how insulting it is to an individual? Gandhi said it's beneath human dignity to consider people as a cog. An asset is a depreciable thing. Like a car, you drive it off the parking lot, it depreciates. An asset is something that you pay a certain amount over an amortized amount of time. And then once it depletes its effective usefulness, that's the mindset. That's the mindset that's dangerous.

Yeah.

And that's what I try to coach people. Get out of your preexisting way of thinking about people as doing work to people as having an ownership stake. You wanna hire people who feel like they own your company. Even when you're starting out.

Yeah. Well, so often you hear folks, you know, act as an owner, but then they don't give you the freedom to act as an owner because, yeah, they treat you like an owned asset, as you say. Yeah.

I mean, it's interesting. The other kind of white flag that I'll hear along the lines of asset is when a business owner or an entrepreneur refers to their employees as my people. That's a tell. In poker, that's a tell. That's very revealing about how they already think about their people and why those kinds of mindsets, you know, Carol Dweck said growth or fixed mindset. It's very hard for a founder to grow a business beyond a certain threshold without rethinking the contributions that their people are making and always thinking, how will this decision impact my culture?

Interesting.

So, I mean, look, British Petroleum is a hell of a lot different than Patagonia.

Sure, absolutely. Both make a lot of money though.

Yeah, but one has a founder who gave away $3 billion of his family's personal net worth to support— to fund climate change. The other, for decades, had in their annual financial budget a lawsuit line for— because their employees died working for them and they had to have class action lawsuits accounted for. That's culture.

Yeah. So, for those that are listening, they're like, this all sounds well and good, but it also sounds like a lot of work. You know, as entrepreneurs, they're thinking that, you know, I've got to get a return on my investment of time. That's our most valuable resource is time. You can't make more of it. What have you seen be some of the, you know, real sort of tangible benefits for companies that take the time to make these investments within culture.

And that's invariably what it always gets to. My payroll is my largest expense. First of all, people are not an expense, they're an investment. But let me save your people a little bit of time and concern. I did the heavy lifting. I spent 10 years researching in over 200 countries, 7,000 organizations. I looked at the companies in every industry or sector globally. Who performed financially as either number 1 or number 2 in their respective sectors? What, if any, attributes, characteristics did they share regardless of country of origin, product services, or the leadership team? I found that in 10 years of research, the single most powerful determining factor of an organization's lasting financial success is the culture. That's why my second book is entitled The Compassionate Organization. We know We've got 50 years of organizational development research that says people who are treated a certain way outperform other organizations consistently. So I'll give you an example because you asked about that. New Jersey's largest federal credit union, about 500 employees, a few years back, the CHRO heard my talk that I gave after I published my second book, and I talked about the power of people. in terms of improving financial performance. And she said, I need you to come in and talk to our leadership team about developing a formal leadership program. We don't have leadership track. So I went in, I did the personality assessments for over 50 of their leadership team members. I then came away with strategic recommendations because they were flatlining over the 3 prior years' revenue. We applied personality testing as a way to determine KPIs. How do you develop teams? How do you do, you know, job rotations? All of that came out of doing that initiative that I spent about 9 months on. After I stepped away, they implemented in the next calendar year, which was 2019, they had a run rate of 1 to 3x revenue increase just by shifting their approach to assessing people to go into coaching and mentoring programs that they identified as leader track. Um, the other is an organization that has about 200 employees. They retrofit emergency response vehicles, fire trucks, ambulances.

Yeah.

The guy was introduced to me because his Vistage chair said they have serious revenue challenges post-COVID. I sat down with the CEO. He talked about his background on Wall Street. Everything was financial performance, financial performance. And so he starts his company. And he doesn't know how to lead. There's a lot of conflict on his team. So I go in, I do a series of interviews up and down, in and out of the organization. We re-architected his strategy where his— we literally gave away ownership from the leadership team to his frontline staff. It took about 3 or 4 months to transition. They had full ownership now of reaching their financial metrics. How do I know? Because they're now responsible for setting their benchmarks, their financial performance indicators. They own it. And my understanding is they were in the red for 5 straight years going back to kind of before COVID They've now had their 2nd consecutive quarter of financial growth.

Wow.

The first, they were under 100% revenue increase the first quarter. The second is they're over 400% revenue growth.

Wow.

They've never seen anything like that in the 3rd quarter. So Students, I mentioned to you I've taught at 10 colleges and universities, including engineering students. Some of them wanted to design an app for gaming.

Mm-hmm.

Started the company. They literally— no job descriptions, nobody with the title of manager. They created an ESOP, an employee stock ownership plan. I now just had lunch with one of the founding students. Um, it's just wild. They've had 6 straight years of financial revenue increase. No job titles. They went from 3 students to 200 employees.

Wow.

Zynga, the gaming company, reached out to them about an acquisition.

Wow.

So this works. I can give you other examples, but in the interest of time, we know that financial performance is not a goal. Founders need to stop thinking that way, man. They need to think about their people as their only leverage for lasting financial competitive advantage. But then what do you do? Empower them. Give them ownership. Give them complete control. But I don't trust them. Well, then that's on you because you're not going about building your organization the right way. If you don't trust your employees, you've already basically failed.

Yeah. Wow.

And that's a hard one. That's a hard conversation.

Well, and there's, I guess, the thing that I think of as someone who's been in a hiring position of I don't always have the ability to hire who I would want to hire. So, sometimes I kind of, I got to hire someone just because of the talent that's available to me or what's available.

That's interesting.

Yeah.

You just said, you just said something. I hire the talent that's available. And I will literally challenge, um, you know, founders. I'll say, talk to me about your recruiting strategies. Show me where do you recruit from. Now, this is one that I love doing with private equity firms and hedge funds and banking and financials. I spent most of my 20 years in banking and financial services. I'll say, show me your recruiting strategy. First of all, they look like you have 3 heads. What do you mean recruiting strategy? I go, Totally the colleges and universities you go to. What are the majors? What are the minors? What are the GPAs? And it's some, some permutation of Duke or Emory or Wharton. Okay, great. You're going to the same well to recruit the same talent over time, and you wonder why your organization now has absolutely no diversity, meaningful equity, inclusion. Everybody looks like everybody.

Yeah.

And here's the scary thought. I've interviewed your clients. Your talent doesn't look like your clients. What message does that send to them? And the other thing is you want the most culturally diverse workforce. And so when you say you only have a finite talent pool, I strongly urge my clients to come up with a more diverse recruiting strategy. My students at some colleges and universities, first-generation college students, went to college or university, and I taught them against the wishes of their families. They had a GPA under 3.0. They were primary caregivers as the oldest sibling of their brothers and sisters. They were responsible for their parents and grandparents, and they worked in their parents' restaurant or dry cleaner. And I take those students with a 2.9 any day of the week over somebody with a 5.0. who had no responsibilities.

Interesting. Yeah. So that's a great takeaway and action item right there is to think about recruitment so that you can really hire those people that you trust. You've laid out obviously the opportunity, which is building a people-first culture and shown the results that companies can get from that. So for those of our folks that are listening today that are like, All right, I'm sold. How can they get started on this today? Like, what are some things that they can take away to start implementing in their business today to move away from a toxic culture to create this people-first culture that will deliver these types of results?

Yeah, I mean, the lowest-hanging fruit, something they can literally do tomorrow— we're literally just weeks away from the New Year— is to sit down with all their people and say, I want to revisit what you bring to the table. I want to look at your roles and responsibilities in your current job only as a starting point. I need to learn the additional— we know from SHRM and the Association of Training and Development that 75 cents on every dollar spent on payroll is wasted. Why? Because we have hired people to perform a job with 5 or 6 core roles and responsibilities. What have you not looked at when you were recruiting, and what are you not leveraging each employee's certifications, accreditations, training, language diversity, other skill sets that weren't directly relevant to on the job. So the first thing I would do tomorrow is tell people, I'm going to do a human capital audit of all my employees. What do they bring to the table that they're using? What are they not? And then have a very honest question about how do you re-architect their role. How do you unleash all this potential that's sitting there untapped? The second is do a pulse survey tomorrow. Ask all your employees on a scale of 1 to 10— 1 is no autonomy or control over my job, 10 is complete control— on 4 questions: how much autonomy do you have over what you work on, who you work with, where you work from, and how you get the work done? And then keep it anonymous if you need to. Do it by manager though. And we were talking about functional areas.

Yeah.

And literally identify immediately the departments in which your people have less or more control and attack that. The next is imagine if a founder next year didn't set a single employee's KPIs. Challenge your employees to set their KPIs, but you gotta do 2 things first. You gotta nail down your 2025 goals. at the, at the business, at the high level. Then you trickle it down to the team goals, and then the team goals are comprised of individual goals. Let your individuals set their goals based on sharing with them what the organization goals are. The last thing I'll tell you, Mark, the easiest thing to do people are not freaking doing, right? If you say my core principles, my guiding company values are these 5.

Yeah.

Maybe top of the list is collaboration.

Sure.

Is it really a goal? What do you mean? Every team's weekly or biweekly team meeting on your agenda, which by the way you don't own because there's no managers, your people have shared responsibility every week in rotating the agenda. Every agenda for every team has one talking point every week on one of your 5 core values. So let's say next week we're gonna do collaboration. We kick off our weekly team meeting, everybody around the table or around the Zoom is going to say, last week I was successful or challenged in working collaboratively. I did this. This is low-hanging fruit, doesn't cost anything.

Wow.

It just requires the discipline, trust, and here's a big word that's okay to use. Here's a big word it's okay for you to use if you are a founder. Empathy. It's cool. In fact, do you want the best people to come work for you or your competitor? Because it takes me 5 minutes when I look at— if somebody comes to me and says, I want to take a look at my culture, I say, I don't need to talk to you about it. I already know what's going on with your culture. By the way, if somebody's interested, there are a lot of culture assessment tools we can talk about during a one-on-one, but there's a way to actually in like 5 or 10 minutes, great places to work. I mean, there's all these culture audits. You can literally get a score, a quantifiable metric of how your startup's doing.

So you've laid out a really inspiring vision. So for our audience that's listening to this, you know, like, what does it look like to work with you? Like, tell us a little bit about, you know, why they should reach out and set some time with you.

You know, It might be, depending on who's hearing it, a trite answer, but I am singularly focused with every one of my clients on seeing the world of where their business is right now and where it could be. I mean, I spent 20 years being passionate about helping the people I worked with in corporate America achieve their full potential, and I got extremely burnt out. What I love to do is work with my clients literally I do a human capital audit, which is an assessment of all their people. I do a workforce vitality study. It's my 18-question survey. I talk to them as the founders and their employees. Where are they now? Where do they want to be? Like, what's their legacy? And I don't talk about financials, never. Those are outcomes. We get there eventually. I talk about why they started this. when they were impressionable. And we really— I'm really focused on getting them to where they need to be as a collection of people, getting them to start to think about building a diverse team, like literally tomorrow with their next hire. But also culture can be architected, it can be designed, it can be measured, it can be nurtured. I wanna literally give them step-by-step example and guidance how to do it because I've done it hundreds of times.

So for those listening that are ready to start on this journey with you, how do they get in touch?

Oh, I mean, the name's there, so we just say ethan@thechasongroup.com. Send me an email. Go to thechasongroup.com website just to check out the stuff I do, or just give me a holler at 917-239-5571. I mean, we'll spend some time just talking about where they are and where they want to be and how to get there.

Awesome. Well, Ethan, you have been a wealth of knowledge today and really sort of changed the perspective, I'm sure, for myself and certainly for those listening. So thank you so much for taking the time.

My pleasure. I love, I love your podcast. I love it.

Talk to you soon.

Take care, Mark.

Thank you for joining this episode of the B2B Growth Blueprint podcast. We hope you've gained insights to grow your business. If you enjoyed this discussion, please rate, comment, like on your favorite platform, and share to others who will find it useful. Do you know a CEO, founder, or leader at an early-stage B2B services, tech, or SaaS company who would like to be a guest and share their story? Send us a note. Let's schedule a conversation.