Cultivating Culture: The Hidden Engine of Business Success

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. 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, that it will definitely impact your bottom line. And they've got 6 aspects of culture that he's going to share with us and how you can put those into your business 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.

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. Because what we're seeing, certainly in the political arena, is that 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. But what goes on in the political field doesn't really translate to the corporate field, does it, Jeff? Tell it— tell us about Innovation Junkie and, and why culture is so important. And then we'll ask you how people can build a proper culture for their organization.

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. 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.

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?

So, interestingly, in 2008, my business partner, Jeff Amaranth, 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, Startup Junkie, and then the Central Arkansas division is called The Conductor. But it's one team, 2 different locations, a single organization with 2 brands, so to speak. And we really focus our efforts for that side on funded services that come from organizations like the state of Arkansas, the US Small Business Administration, various corporations, all of 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 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 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. 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 to actually focus on the paid consulting services. By the way, January 2020, great time to start a new company. Right before the pandemic hit.

Right before the pandemic. I guess because we're all going virtual. Uh, there are some, some opportunities, but now we're through that, Jeff, and plainly you survived and, and thrived, you and, and your fellow Jeff, the 2 Jeffs, uh, the 2 Jeff Army. Jeff.

That's right.

I did ask this question, well, you know, slightly tongue-in-cheek about some, some leaders in the public realm seeming to get away with leadership without a sort of cultural values. I guess that you could argue they have cultural values, um, but they may be just different to what some people have got. 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?

Well, so a lot of leaders in my experience, 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. And they think that that's the extent of creating culture in an organization. You know, the fact of the matter is strong culture, strong positive work cultures in, in for-profit organizations have been directly linked to increased revenue growth, increased profit growth, customer satisfaction, 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 are very direct business outcomes that can be generated by not focusing on creation of that culture. 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. It's not only the 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. 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. 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, 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.

Interesting. So, 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. 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 and large, they're the same thing. 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.

Interesting distinction there. And I guess also a brand has often a visual interpretation, doesn't it? Whereas a culture is almost by definition sort of, it's a feeling, isn't it? A culture.

Well, here's a parallel for you. Most, 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, misthink brand to be a beautiful logo that's on a website or a piece of letterhead. And that's it. And so, those 2 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 culture. So anyone listening here who's thought of culture as being just for big companies, maybe not for them. Maybe they think it's their business, if they've 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.

Sure. Maybe before that, tell you kind of, okay, who's this Jeff Standridge and how does he how does he able to talk— how is he able to talk to us about culture?

Yeah.

So I have studied excellence at the individual level, the team level, and the organizational level for, for, for most of my career. 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, what is it that differentiates individual top performers from individual average performers. 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. And as I've worked with organizations over the course of the past 2 and a half decades or so, almost 3 decades, My team and I, we have begun to observe that there are really 6 major elements to creating what we call a culture of excellence. 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. 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. 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. And my research and 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. 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 say I'm going to do when I say I'm going to do it and what have you. 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. So, that's the first element is strong leadership.

As you say, you know, it's being brave, isn't it, as a leader to take those decisions and then to follow through even when the circumstances may have changed 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. I think you've articulated that really nicely there, Jeff, that one has to have a balance.

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 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, where you're trying to go as an organization and how individuals fit into that shared direction. That then leads to the 3rd element, which, which I refer to as engaged and committed teammates. 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 onto the, to the scene. And You know, the, what I would describe the definition of disengagement. Turnover is when people quit and leave an organization. Disengagement is when they quit and stay. And so, you know, you've got them, they've basically given up. They've quit producing, yet they are still employed by the company. And they say that disengaged employees cost the organization somewhere between 30% and 50% of their 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.

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. If you've got one player who's not really committing to going for the ball or for the goal, then you're better off having them off the pitch, aren't you, Jeff?

That's right, for sure, for sure. So, engaged and committed teammates is No. 3. One of the ways that you get engaged and committed teammates is by having, which is Element No. 4, is empowering communication. So if we think about the definition of the word empower, it's to, it's to make someone confident, stronger and more confident in dealing with the circumstances that they're facing. 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. 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, when we leave this conversation, I want them to feel stronger and more confident at facing the circumstances that they're facing. So how can I carry out this conversation in that regard?

Yeah, that'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 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.

Exactly. And 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. So, you know, 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. The 5th 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. And what I would say, 100% accountability looks kind of like this. If I've committed to doing something by a specific day and time, let's say I've committed to you, Jim, that I'm going to have something to you by noon on Thursday. 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. 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. Is that still a drop-dead deadline for you? And you could say, no, I'm probably not going to look at it till Monday. And everything's great. OK, super. Can I get it to you Monday morning or over the weekend? Sure. Or you might say, no, actually, Jeff, it is. You know, I've got a client meeting at 2 o'clock and I really need that by noon to give me some prep time. To which I would have to say, OK, I'm at risk. I need to shuffle some responsibilities. Can you, let's, 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 you, that I, that I committed? That's just as much 100% accountability as delivering it to you when I said I was going to.

And as a leader, a line manager, for example, the, the importance of letting people share their It's like 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. Uh, 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.

For sure. And my experience is, number one, we set deadlines completely arbitrarily. And most of the time. And number 2, many times when we set a deadline, the circumstances change, and that deadline is way more flexible than it was when we, when we looked at it, or when we set it rather. 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.

Yeah.

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. That brings me to the 5th element or the 6th element rather, which is what I call organizational agility. You know, I used 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 them in the mouth. 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 occurs, a new legislative change. And being able to bounce back, not just having mental and emotional individual resilience, but being able to cultivate that organizational resilience or organizational agility is that, that 6th element of having that culture of excellence.

Jeff, the way you articulate it, 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. In your experience with Innovation Junkie, why, why do people not pay more attention to it?

You know, I think back in the '90s and, 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 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, client sat, 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 the business value of creating culture, No. 1. No. 2, also understanding that culture is a collective set of human behaviors. And if the leader isn't living out, and 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.

And I suppose we've seen even more recently with companies like Twitter, for example, where the culture has changed quite significantly through the acquisition, that 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 is also perhaps a culture and a shift in the way that people view culture because people are seeing themselves as becoming almost the guardians of that culture. And when that leadership doesn't respect the culture, there's some degree of autonomy now, isn't there? And also sort of technological power that employees have to take action, right?

Absolutely. You know, some research came out a few years ago, and I believe it was by McKinsey. I'd have to double-check my source on that. But back when I was doing mergers and acquisitions, and I spent about 10 years just focused on that around the world, some research came out that said 50% of all mergers and acquisitions fail to produce the shareholder value and the business outcome. And the number one reason is the mismatch in the culture between the 2 organizations.

Isn't that interesting?

That right there will tell you the importance of physically managing your culture 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, 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. 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 2 to be fewer and further in between. And we do that by actually physically managing our culture. 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.

Jeff, what about the articulation of culture externally? Because, you know, we've talked about internally, which is very, very powerful, but, you know, as a show about getting noticed, I'm also interested in how culture can be part of 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 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?

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, we move right directly into once we've kind of nailed that mission, vision, values, we move 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? How, what do we want our customers to say about us? What do we want them to feel when they come into contact with us? What are the, we want them to experience when they come into contact with us? 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, and our experience has been, that cultivating both the internal culture and the desired customer experience is really the yin and yang of building culture and brand.

Really, really interesting, Jeff, that you see them really as one line of continuity, right? It's a straight line from the corporate culture through to the feeling that the customer, partner, employee has about being involved with that company.

For sure.

Jeff, you are running 2 companies or rather 2 brands with one holding company, one parent company, you and your partner, Jeff.

That's right.

Tell us, how do you practice what you preach?

So, 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 physically 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. Number 2, we actually— no one makes unilateral hiring decisions in our company. We hire and we interview and we hire against our desired culture, our set of core values and the norms and behaviors that we expect. And we actually interview for those. And multiple people interview and weigh in on every hire that we make within the organization. You know, we also recognize when we've fallen short, and we make it OK for people to give us that feedback as leaders or as an organization. And so, just those 3 things are small actions but create large levers that we use to kind of manage that culture within Innovation Junkie.

Yeah, those sound— well, you've got a sort of triumvirate there, haven't you? A trilogy of policies. And you don't need too many or else it's very hard to manage them, isn't it?

Well, if people can't remember the core values, if they can't recite them, If people can't espouse and actually articulate to you the kind of culture we're trying to create, then it's not impacting anybody's behavior if they can't remember them.

Yeah. Well, that's it. Then, they're very hard to live them if you can't remember them. 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. What would be that piece of advice that you would give about creating culture?

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? Pick out a dozen or 15 customers and ask them that. 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. A dozen, 15 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, 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 approach and do that one exercise.

That's one of 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, it's about being brave, isn't it, courageous and taking action to constantly work towards bridging that gap as a leader.

Jim Collins in Good to Great said that good leaders that, that take companies from good to great confront the brutal facts. And so confront those brutal facts as an entrepreneur.

Yeah, that— and you've quoted, um, the only person you didn't mention was Tom Peters in Search of Excellence. I was waiting, Jeff, for you to mention him because you did talk about Search of Excellence. Jeff, you're plainly 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 that. There's a gentleman by the name of Craig Groeschel, Craig Groeschel. 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 to take a listen to as well.

OK, Jeff, that's wonderful. Jeff, if people want to get a hold of you and Innovation Junkie, where can they do that?

I'm always active on LinkedIn. So Jeff Standridge on LinkedIn, Jeff S., that's Jeff Standridge or jeffs@innovationjunkie.com or jeffstandridge.com. Any of the 3 of those, they can get in contact with me. And I'd love to interact with any of your listeners.

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.

It's been my pleasure. I appreciate you for having me and, and, uh, hope you have a great week.

Well, it's been made better by having you on the, on the call here, Jeff. So 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 sort of slightly satiric terms. Actually, that there are these 6 elements that he's articulated that really make up building a culture. So 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 our stakeholders, customers, and investors. 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. 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.