John Ratliff On How You Can Create A Highly Productive Company Culture

I'm dean jackson, he's joe polish. And this is the I love marketing podcast.

Our next presenter, good friend of mine, first met him on Necker Island. He's been on three. We've been on three Necker island trips together. Even ended up building some sort of weird relationship with Richard. And you started going back to the island and hanging out or what? I don't know what's going on there, but I interviewed John about probably some of what he may talk about today on our last Necker island trip. Very bright guy. Built an incredible company that he recently sold in June of last year. He's the founder of AppleTree answering service, which my company actually was a client of for many years without even knowing it until I met him. Employs nearly 600 people in 23 offices around the U.S. it's been recognized as one of America's fastest growing privately held businesses by Inc. Magazine three times selected for Inc. 505 times for Inc. 5000. There's only 16 other companies in the. In the world that have ever done anything close to that. So he's going to talk about something that he really transformed in his last company, which is great culture. And so great culture is a competitive advantage. Give it up for my good friend John Ratliff.

Thank you, brother. And I guess Joe, I need to compliment you like everybody else has. So amazing event and great job. Go ahead. Thank you. Thank you. There are three universal truths in business today. Three. And I learned this over 18 years as an entrepreneur. Number one, today's employee does not have the work ethic that employees had 20 years ago, 30 years ago, 50 years ago. Number two, left to their own devices, your employees will find ways to take advantage of you. Without rules and policies and procedures and everything else, they will find ways to take advantage of you. And most importantly, there are no good people left. You just can't find good people anymore. And I know these are true because I hear it all the time. I'm at events like this all the time. These three themes come up over and over and over again. But there's a problem. There's a problem with that. The problem is that is total bullshit. In fact, that's a cop out. What it is. It's 1956's model of employee relationships, employee management, employee culture. In 1956, we said we gave them a job. What the hell else do we have to do? They should be happy to be here. How many people have said that they should be happy to be here because we pay them? That may have worked in 1956. That doesn't work today. It's an excuse. It's a total excuse. And it's become an excuse for people that don't want to do the work to build great culture. Mediocre companies. And a lot of good companies use that excuse all the time. You know who doesn't use that excuse? Great companies don't ever say anything like that, ever. Great companies. Their problem is I got 100 excellent people and I got three jobs. How do I source through those 100 people to pick the three best? Great culture is a competitive advantage in today's world. My awakening came in 2008. I was at a conference much like this, but I was at an industry conference and I was having a beer with one of my best friends. And he has a business in Canada real similar to mine. He had about 300 employees. We probably had 500 at the time. And he said, hey, John, what's your turnover at Apple Tree? And I said, well, we have 3% turnover in our salaried positions. We had about 75 salaried employees, and we have about 100% turnover in our hourly positions. He goes, man, that's great. I said, yeah, the salaried, I know, that's great. He goes, no, no, the hourly, that's great. Our industry average is 125% and I have 135% in my company. How are you doing it? Well, that was a big wake up call for me. 100% turnover. I don't care if you're in telemarketing. Not great. There's no industry where that's great. And that was when I started on the journey of fixing the problem of bad culture. So 2008 to 2012, our turnover went from 100% to 19% at our front line. Our salaried employees stayed at 3%. We grew in size to 32 times the industry average size company. And we were three times more valuable. We were a strategic valued company when we exited, not a financially valued company. All because we built an amazing employee culture. So because of that, I get to talk a lot and don't think this didn't exist in my business either. I had a manager. We had an office in Portland, Maine. I had a manager in Portland, Maine, 250,000 people. And she called me in like 2010, and she's like, john, I just, I can't find anyone for these jobs. And I said, well, how many jobs are you trying to fill? And she said, three. I said, you can't find three people in a city of 250,000 to fill three jobs. She said, there's just no good people. I said, kim, go to the bathroom, wash your hands, wash your face, and when you're done washing your face, stare at that thing right in front of you called a mirror. It'll look back at you with the answer to your problem. If you are saying these things, if you have bad people, if you're frustrated, if any of this is going on, the problem is probably you. And the problem was her, and she fixed the problem. And all of a sudden, we found great people. So I get the question all the time, well, what do I do? I want to. I believe in the philosophy. Imagine having people wake up every day and all they think about is how to make your company better. We're some of the most fortunate people on the planet. Fortunate people on the planet. We have people that come to work for us that try and fulfill our vision and our dream and make our families happier and make us happier. And they wake up and they do that for us. How fortunate are we? So people ask me, what do I do to get to that point? So when I get that question, I say, well, you're in luck. There is a universal symbol for great company culture. Tomorrow night, when your employees go home, go into every office and put a foosball table in, and then go into your conference room and get rid of all your conference tables and put a ping pong table in. But most important, make sure you get a lot of these posters. I had a guy ask me at a conference, what should I do? I'm telling him this. I said, how many employees do you have? He said, Well, I have 60 employees. I go, great, one poster for every three employees. Get 20 of these, put them up all over the office, and you're all set. And he looks at me after the foosball and ping pong comment, and he goes, really? I go, yeah, jackass. Really? That's exactly what you do. I said, you know, when people walk by the same poster for six months, all of a sudden it's part of their subconscious and they'll just do whatever you want. And he goes, really? No, not really. So more important than that. More important than that, you have to change your philosophy about why you're in business, why you have employees, and what your responsibility is with those employees. It's philosophy first. In fact, if you try and put tactics ahead of philosophy, you will not only not see results, you will now take mediocre employees and turn them into cynics. So, yeah, we got a Foosball table. And we got all this great stuff and we got these posters on the wall, but that jackass that owns a company could care less. Now mediocre goes to cynic. Change your philosophy first. Every day, the CEO and the people that work there, the managers that work there, need to wake up and ask one question every day. What can we do today to make the experience for the employee better than it was yesterday? That question should be on your list and every day, every manager in your company should ask that question every day. And if you can get your philosophy right, the rest will follow. Now everyone's saying, yeah, great, I get it. Philosophy. Now give me some good ideas what we can do. I'm gonna run through these real quick. If your company isn't actively engaged in a core values process where you have them, everyone knows them, and you talk about them every day, I strongly suggest getting your core values down pat. Google Core Values Mission to Mars for an amazing exercise to get a core values process going at your company. Use. NET Promoter, Google NET Promoter. If you don't know what it is, use the. NET Promoter survey process to take the pulse of your employees and see kind of what's going on with them. Read the signs around your office. I was at breakfast the other day in a diner. There was a sign on the wall that basically bitched at the employees they weren't clocking in the right way. And do this and policy and procedure and this and that. No please, no thank you, no nothing. I said to the two guys at breakfast, I'll bet you 10 bucks I'm gonna ask this waitress if she likes it here. She's gonna tell us she hates it. She comes back, do you like it here? Nope. I hate it. It's great. It's horrible. I hate it. The manager's terrible. The signs in your office, if they don't have please and they don't have thank you, rip them down when you go back. Treat your people like human beings. They're human beings. They're not numbers. They're not people that you have no responsibility to. We have a program called Dream On. Google Apple Tree. Dream on. You can watch the video. Ten minutes is tough, so I can't really get into it. But Dream on was Make a Wish. The Make a Wish charity model for our in house employees. Most significant thing we ever did at Apple Tree. It was amazing. Town hall meetings. We had 24 offices. At the end, I would go my COO, my assistant and myself twice a year to 24 offices face to face with Every employee, totally open forum. And then I would throw all the salaried employees out and I'd go one on one for another 15 minutes with all the hourly employees, any topic. And then my assistant took notes and we followed up on everything. Dramatic, dramatic improvement. So I had this long, drawn out discussion about culture. It was amazing. It was about a half hour long. And we get to the end and I hear, but, John, what if I just don't like people? And I thought, really, you know, we just had this great conversation. I'm trying to remember who it was who asked me that question. It was on an island. I'm trying to remember that's who it was. So I do an interview with Joe, and we get to the end and he goes, but, John, what if I just don't like people? And I was going to give him the pat answer of, well, Joe, obviously you got to be empathetic and you have to like people. But he made me think for a second, and it dawned on me. You don't have to like people. You don't have to be empathetic. You don't have to do any of those things. But the people that work for you get up every single day. They come to work, whether they like it there or not. They show up, they spend their productive, valuable time with you. You must. It's your duty, it's your responsibility to honor the fact that they show up, respect the fact that they show up, and treat them appropriately. You don't have to like them, but you have to treat them like gold. They are the ones driving your vision and your future and everything about your business. And if you don't honor them and you don't respect them, you shouldn't be in business at all. Thank you very much, Sam.