S4E7: Company Character - The Foundation for Building Resilience and Agility in Times of Constant Change ft. Frank Calderoni

This is the No Ego Podcast, where we ditch the drama, end entitlement, and transform your workplace. I'm Cy Wakeman. Welcome everyone to season 4 of the No Ego Podcast. I am so excited. I'm reaching out to many of the people I respect and admire, and we are talking about the future of work and how we can make sure that we emerge from this past year evolved and grown and not traumatized. So we're going to be reaching out to some of my favorite experts and asking them what they think the key is going to be as we curate a whole different and hopefully more evolved workplace. And today, super excited about the guests I get to bring to you. You know, as a consultant and out working with many of you in your organizations, I'm often asked, like, Sy, who lives reality-based leadership? Who If you had to make a list of top 10 leaders, who are the leaders on that list? They want living, breathing examples of leaders and companies that have really made reality-based leadership part of their DNA, a way of life. And my guest, Frank Calderoni, is always top of that list. He is one of my most admired leaders. We got to work together at Cisco and Red Hat and Anaplan. And what I'm most excited about is Frank's come out with his own book, called Upstanding. And it's all about company character, which I think is going to be a big piece that leaders need to master going forward. So Frank Calderoni, welcome to the No Eagle Podcast.

Thank you, Sy. It's great to be part of your podcast. It's great to also talk to you again.

Thank you. It's fantastic to have you back. You were one of my first guests. Gosh, I think season 1, way back when, 5, 6 years ago when podcasting was like a new thing and you graciously endorsed my book. And you've been using reality-based leadership now for quite a while in all of your workplaces as you take on more senior leadership roles. What's your favorite part about reality-based leadership? Why are you such a fan and a connoisseur?

So, Sai, as you said, it's, you know, I've been with 3 great companies: Cisco, Red Hat, and Anaplan. And all 3, I've been able to leverage reality-based leadership and working with you. So it's been an honor and a privilege. And I've continued to learn and develop over those number of years. You know, 2 things that I would say that really stick out for me. First is drama, you know, the drama in the workforce and how to deal with drama in the workforce. And I think that was the first thing that you helped me with. And then we helped the organization to defuse some of that drama. And that's, you know, I've carried that now for so many years. And I myself practice that and I try to encourage others as well. And then the other thing, which is the whole thing about ego, right? How do you manage your ego? Everybody has an ego. And managing it as you interact with others is critical for yourself as well as for others. So those are 2 important areas that I will always, you know, continue to focus on going forward.

Perfect. And I love that you have taken it from being a concept or an idea or a program and put it as part of your own leadership, um, way through the world, that it isn't just about RBL, but you have really taken and developed that as one component but of a really greater philosophy. And that's so important for leaders to not have training and development that's a program or something we pledge to, but that there really is a leadership philosophy in the organization. And I know that yours has been centered on this concept of company character for quite some time. And your new book called Upstanding is such a great handbook on how to pay attention to and develop corporate culture, company culture. So I want to start out with just help us understand why you believe that company character, not culture, I mistakenly said that, but company character is a key driver of growth and a competitive advantage in the marketplace. Why are you making such a bold assertion that character equals growth and competitive advantage?

Sai, really good point. And I have to start by saying You know, culture has been important for me for so many years. But a character-led culture is one that I think really ignites passion and allows to build trust with employees. It aligns the behavior of everyone that's part of the organization with the goals and really makes them do their best work. And so, it becomes not just a job. which I think is important for all of us, especially today. And what you get from that is higher quality, increased innovation, faster execution, as well as higher employee enthusiasm for what they're doing and why they're doing it. And I think that works well for the individual, and it also works well for the organization. It allows the organization to really excel in delivering on its results, right? Really. The other thing, Sai, just to put in there, it also relates to your customers because a character-led culture carries over to your customers because they're looking for quality. They're looking for innovation. They're looking for execution. And that positive experience they have with your employees allows them then to develop trust and loyalty. And with Anaplan as an example, we're a SaaS company. And a SaaS company has to continue to engage with their customers over an extended period of time. So, they can pull out at any point. And if you don't have that trust and respect and the loyalty, you can lose those customers.

Well, and I think that's such a good point because moving into SaaS offerings forces us to add value that's relevant today and far into the future. You're not just locking people into having, you know, tied themselves to your organization. And I think you are offering a solution I want to highlight because this word character And company character solves a problem for people in HR and marketing that I'm not sure you realize. There are times we talk about the brand and the company reputation and the brands to potential employees and the culture. And those seem all really separate. And what I think your concept of character does is it takes all of those different expressions and aligns them. And it says, no, the reason that it helps with trust and it helps with stickiness is that what people see in our brands, what people know and experience from us as a reputation, can be trusted because the behaviors they'll see inside this organization are aligned. They marry up to that. There's integrity between what we promise and the behaviors, the essential behaviors that drive us to fulfill those promises on the inside. So, what I saw you do in your book with character is you connect The stuff we're trying to do on the inside and the promises we make on the outside. And you say, here's how to deliver on those promises. Am I far off if I had to summarize what I think?

No, you're spot on. That's exactly— yes. Because it's about the experience, right? The experience of your employees, the experience of your customers. And that comes from everything you just said.

Absolutely. And I think that when we're asking people to enter in relationship with us, We're also asking them to have faith in us. It's not just trust, there's like a faith for the future. One of my favorite authors said that falling in love is basically faith triumphing over like knowledge of one another. It's like it's bigger than, um, than just what we know of each other. There's a, there's a sense of that, you know. As you talk about company character and character-led culture and why people need it, I know that you talked about what it leads to, like innovation and those types of things. But when we think about conversations we have all the time on values and purpose, and can you get a little bit more specific about what exactly a character-led culture is and Again, why companies really need to focus on this right now.

So, Sai, it's, you know, again, a character-led culture is one where decisions that are made within an organization are really guided by the stated values and the purpose. And that's important. It shows the alignment, but it also shows why are people part of the organization. You know, I describe in Upstanding that organization character as a culture is a foundation that really allows you to set those values or those principles to really kind of promote how people are engaging with each other, how they're getting rewarded for the experience that they have. And that allows them again to do their best work, bring their best selves to the organization. And through that, They feel respected. They feel included. They can be authentic. And then that's how— that's where the trust comes with the employees. And then that trust that they have gives them the freedom to make the decisions that are aligned with what the company views as really the right success. And that's where it kind of ties back into the overall performance of the organization, of the company. And it makes the company more adaptive, more nimble, and be able to kind of deal with change and then grow and prosper.

And when people look at reality-based leadership, one of the things I talk about is if people are really clear on the higher-level stuff, the goals, and yes, the values— values can be aspirational, but the essential behaviors we expect in order to drive those values— then you You don't need a ton of procedures and micromanaging. And processes are always good, but it does free people up. If I'm clear on what living our values out loud looks like in my behavior, and I'm clear on our goals, and I'm clear on the brand and reputation we want, then I really can add my signature to how to work with customers and how to get our work done. And so it's much more fulfilling. It's like we don't have to micromanage when people are clear on our aspirations and expected behaviors. They really are free to just do their best work.

Yes. And, you know, so I just jump in, and that's where, again, going back to reality-based leadership and what you just talked about here, having those values, having those values that are created, and we did this in all 3 organizations that I've been part of, have the values created by the people themselves, and then let those values turn into what are the behaviors that start to showcase those values? And then how does that then align back to what is the organization's purpose and what they're trying to accomplish, right? So, it becomes a strong foundation to do their best work. And then they get fulfilled. And that's what it's all about. And this time today is probably even more important because people have choices. I think we're seeing even coming out of the pandemic, so many employers are looking for talented individuals and they get a chance to pick and choose where they want to work. And that is going to be important. Culture, character-led culture, the organization, what it stands for is going to be what they— more so even than the pay. It's going to be more so important for them and how they make their choices.

And what's key is I think we made a mistake in the war on talent where we went into, you know, how can we as a company create these values that we promise to employees? But what you do that's really fantastic is you say, no, we're sharing accountability. Employees, what type of workplace do you want? What are our values? And you don't just love them up, but you call them up. And a lot of people think employees will be fulfilled if they're loved up, so to speak. But you really combine that with, if these are values— and too many organizations' values are aspirational, like, if we're ever perfect one day, we'll get there. And it really says, no, this is, you know, what do you want and what are you willing to do to co-create that? And most people think happiness is having good circumstances, but well-being, happiness, engagement is fueled by accountability. And I love how you connect in accountability to character and character-led culture and corporate character. And I've known you for a long time. Accountability was a big deal for you 10 years back. And so I'm just wondering, you know, you had roles, you were CFO at Cisco and Red Hat, and then before that, one of the original blue suit, red tie, white shirt IBMers from the original IBMer group. And so, how did those experiences inform what you wanted to build when you came in as CEO of Anaplan? It's easy to say, if I were CEO, I would build this company, but you found yourself CEO. How did those past experiences shape what you wanted to do at Anaplan?

So the— I think we all are, you know, we are who we are based on the experiences that we've had. I've been fortunate and, you know, I can't say that, you know, I've had my great opportunities but also had my challenges. But I've been fortunate to work for some great organizations over the years. And having worked in those great organizations for things that worked out well and also for challenges, has developed what I've been able to bring to Anaplan. You know, IBM, over a 100-year history that company has, it's helped really be humbled and persevere for that period of time, having a high commitment to its customers. But the culture, and I remember this over the many years I worked there, over 20 years, is really built on a foundation of respect and inclusion for employees. And that really resonated with me over those number of years. And I think with IBM, it's been institutionalized through the communication, through the leadership development, through the recognition programs. And that's all values that I've kept and continued on in my career. You know, at Cisco, when I was the CFO, I got a firsthand role working with a CEO and an executive team that really took company culture seriously. You know, John Chambers, along with many of my peers back then, were stewards and cheerleaders and most importantly, role models for Cisco's culture, right? So I saw from the top how important that was in order to have it permeate down through the organization so that people had an ownership and took it seriously. And then at Red Hat, you know, Red Hat's an open source product developed organization. company as far as a product. But it's built on a community of users, not only within the company, outside. And I saw how the transparency and really raw feedback generates passion and loyalty among the employees in that open culture and how that takes on a life, a positive life on its own. So altogether, bringing those experiences from what I've learned into Anaplan, I've kind of highlighted some of those throughout Upstanding, the book. but also I try to live them with my team here at Anaplan.

And I love how you've taken the best from 3 really great companies. And I think as leaders, we need to be open to not only having impact in the world, but being impacted by our experiences in the world. IBM, definitely respect and inclusion. I just saw an interview with Nicole and they're talking about how they're being even more inclusive regardless of how you learned coding and how you learned or got interested in their field. And they're doing some amazing things and living those values as an executive team. Cisco did great at that, especially at Red Hat, to learn that open discourse can be healthy if we are all stepping up to be inclusive and respectful. And it's fun watching you and what you've taken the company at. when you first joined Anaplan and the tremendous growth that you have been able to partner with all of your team associates in garnering with this. It's really a winning formula because I think that, I mean, it's been like 112% growth or something. I say as a grateful stockholder since you all went public in 2018. I mean, that is tremendous growth in a tech industry and a service industry. So what can other companies learn? Everybody's like, okay, so let me rephrase that. Many companies think, Frank, that if I focus on culture and I focus on character and I really focus on open discourse, that that will slow us down and hurt our growth. And you're saying those aren't mutually exclusive. That is the way to grow. So what can other companies learn about how you have really been able to drive this growth?

You know, what I've learned over the years is, you know, markets, products, they're always going to change as part of, you know, a company or an organization. But the culture is what's going to endure. So it's your company's secret sauce. So, you know, my advice is really spend the time getting it right. Stay committed to those values in good times as well as in challenging times. I think, you know, we learn in challenging times, especially the importance of some of these values. They help reinforce what you do and help lead you to persevere and do the right thing. And during challenging times, it helps you reinforce those values, right? Because you can see it actually works. So I believe that you need, you know, to make it work, you need someone really dedicated full-time to help shepherd that culture. throughout the organization. Not that it's that person's responsibility. They don't own it. But they just make sure that the programs are continuing across. They're getting the right feedback. And again, as I said before, it's aligning those values back with the company purpose and the overall mission that you're trying to accomplish. And, you know, you mentioned just a few minutes ago living your values. We kind of coined it in Anaplan like Anaplan Love. L-O-V-E, living our values every day so that they're front and center and that your culture is important. And I think if I go back several decades, people kind of thought culture is something that's nice to have. Now, culture eats strategy for breakfast. I mean, I can't reinforce that enough. It's so important to where organizations are today. How they need to be successful going forward.

Absolutely. And I know that I was, you know, in contact with you as you came into Anaplan. And like many companies, there is an emphasis on, you know, hypergrowth. Get this thing going, execute, you know, grow, get even more profitable. And even though that pressure was there, the thing I admired most about you was your courage to say, Yep, we have attention towards growth. And we also have to build this foundation. And at times, you kind of bucked the trend. You're like, no, we're going to take people out for a couple of days. And we're going to have these experiences. And we're going to have these conversations. And many companies, when they experience then hypergrowth, they don't understand that if it wasn't luck, it was culture. Otherwise, it was just luck. But they abandon culture during hypergrowth as if it's like, You know, we'll get back to that after these opportunities. And you've just kept that in mind, that it is clear this is what fuels that growth and those opportunities.

And so, you know, I, you know, I, we talk about some of my experiences, and I think, again, we all have experiences. I learned from those experiences. I just encourage others. I don't have it right all the time. I've, you know, I've had my challenges as well. But just to, to continue to focus and, and persevere is where you can allow you to make the right progress toward improving your culture and then therefore improving your character and knowing what's right, what's wrong based on the employee and the community that you're part of, which again is ongoing. So the continued focus is what I'd stress very strongly.

I love that. It's like progress, not perfection. You don't have to come out with the culture that's perfect because it will change over time. But you have to keep the focus there. And part of your culture is open to learning. So, I know my fans really well. And they always come down to how do you measure it? And how do you hire for it? So, they love all of our chitchat so far. They're like, okay, Sai. So, it's so hard to help people understand that culture is measurable. One, you can see it in accomplishing all your other metrics. On your scorecard. But you've taken it one step further. You believe culture is and character is measurable. How do you measure employee progress on this?

So I'll highlight a couple of things, Sai, and you know this because we've worked together. But I talk about this also in the book about VSEM, which is a vision, strategy, execution, and metrics. It's a format and a process I learned at Cisco to make sure things are aligned. And as you said, if— and a part of that for us here at Anaplan is also having a purpose. And if you know what success is for the organization and then other things within it are aligned, it helps drive the right accountability. So, that's one. Second thing, the normal feedback channels, right? Surveys, things like that, just to get a pulse of where people are, what they're feeling, what suggestions that they have. And we do numerous things. Some things are like ad hoc where we do like a Frank answers questions, just open format to hear what's on everyone's mind, but have an active discussion and debate back and forth. The other thing which we are experimenting with right now, which I'm hopeful, right, that this could help not only my organization, our organization, but other organizations, is something called the Belonging Index. And we're working on this with with Berkeley University. And that is where it's inspired by similar to like a customer net promoter score, which asks consumers, would you recommend this brand? In this case, a belonging index asks employees, do you feel like you belong at this company? And our belief as we're in these early stages is that if employees feel that they belong at Anaplan, then we're making progress in creating a culture that really promotes our values of inclusion, collaboration, creativity, tenacity, authenticity, and openness. Right. So, and have that be living and breathing ongoing. So again, we're in the early stages of that and we're working with Berkeley because they want to leverage this if it turns out to be positive, which I'm hopeful for, in other organizations.

I love it. I love the question. I love that it's Coming off that net promoter score, like the feeling of belonging. And for my listeners, when that's offset with shared accountability for the organization and the individual co-creating through character, a character-led culture, there's that shared accountability, that belonging in my creation, whether I feel like I belong, is both in how I'm received and how I reach out. Yeah. And so I'm excited to see that research. So how do you hire for people that either fit your culture, although we don't want to, you know, sometimes bias gets in there, or maybe the question is like, how do you hire and then train for character itself?

You know, it starts, of course, in the hiring process. So it's important to make sure that you're clear on your expectations. How we do that, and again, I can just talk about our experience, by we weave culture into the job description, right? So we have that be part of the job description. And then we train our hiring managers on really how to interview for culture and make sure that it fits in with the job skills that we look at with candidates. One of the things on that, I know my team and I have learned is the— and I talk about this in the book as well as an example. The Disney Institute provides an experience of what Disney has done over many years where they do hire for culture. It's allowed them because of the experience they need to have with those who enter their parks and entertain— that they entertain. And understanding how they do it and the importance of that at the highest levels. is something that really resonated with me. Then once you're on board, employees take training on various types of topics, unconscious bias, to help reinforce the company's belief. We do training around RBL. Sai, I know you're happy that we've continued to do that. It's part of what we do with every employee. We do some training around TILT 365, which is an assessment to better understand their preferences and how to work best with their teammates. So, and we make that a requirement as new employees kind of come in and then also to reinforce as they've been with the company for a period of time. But I think most importantly, though, we reinforce our character through our behaviors and our decisions. And we want to, you know, again, we're not perfect, but we try to be role models, myself included. where we're the kind of character-led culture that we really want to create and reinforce.

You know, such good advice because I know that you're not only consciously hiring for, but ongoing training and role modeling. And the role modeling is the most important part. It tells people what is accepted here and what's not accepted. And just for my listeners to clarify, like when you're interviewing for character, you don't have to rule out diversity. And, and that's what you guys do such a good job with, using TILT and other things to help people be more inclusive of diverse ways of moving through the world. Character, though, says however diverse you are, all the intersections that you bring to the table, can you commit to these non-negotiables when it comes to how we will work together and how we will treat one another? And a lot of folks Question, you know, is that ruling out diversity? But I think every company needs some certain non-negotiables that the masses have decided on, and they've called out and said, this is how we want to be together. And you can be freed up to fully belong in all your diversity. We also have expectations that you'll move through the world abiding by these types of values. And so, it's a nice blend. And I think people get those super confused. I'm seeing, as we wrap up, a real switch in the world because it used to be the war on talent was the Instagram posts and who had the coolest break rooms and who had the most freedom. And it was a lot about personal preference and individuality coming together. And it almost seemed like the companies that let you show up with all of your individuality without kind of a regard to character and then tried to make a culture out of it was what was kind of attracting people. And I see that really changing. I see people wanting to know, do I work with people committed to being good in the world? And do I work with a corporation that supports us doing the right thing even when it's tough? Are you seeing some of those same changes? Where that integrity is more important than ever to people?

Even more so. And I think over this past year, with all that change that the world has experienced with the pandemic and the social unrest, and it's just put that even further up on the list of priorities. Yes, definitely.

I love it. I love it. I'm seeing more and more people come out as B Corps. And, you know, again, there's so many hot topics out there that we'll have to get to another time. But a lot of people Worry that it's a cancel culture. But when some of the lack of integrity has been called out, it's not about canceling. It's about calling people up and calling people out and not saying, you know, you're dead to us, but saying, folks, we need to commit to doing better. We need to commit to working for the improvement for all of us. So I, I'm a firm believer. I think you're onto something. I love— I think it's the perfect time that you're calling out. character and character-led culture and the investment that you cannot scrimp on. You can't do it intermittently just when it's easier, when, you know, you're— you need growth rather than when you're in growth. For you, it's just been a key component of doing things that will set you up for success, and I've always admired that about your work. Anything else you want to say as we near kind of the end of our Time together. There's so much good in this book. I hope people really get it and read it. Is it for sale now? Is it out?

Um, it's up for pre-order. It comes out on June 9th, so encourage everyone to pre-order. It'd be great. Um, I'd love to hear, uh, everyone's feedback.

And Frank won't say this because he's an ethical, humble guy, not this unethical, but as an author, for those of you that go out and pre-order, you really help those of us hit the first week, which in the book business is a big week with a lot of books coming out. And what that does, just like when you rate our podcasts and you say you love it, and it simply gets the book on the radar of more people. So it's the most helpful thing you can do. If you're interested, go get the book and help us, uh, and do that pre-order. Don't wait for it to, um, come out. Um, Frank, I— you can attest I've bugged you for a long time. I'm like, get this stuff out in a book. The world needs it.

You've been a strong encourager for that. So thank you, Sai. I really appreciate that over a number of years.

I think instead of nag, you call me an encourager. So I like that. I like that. Um, but a lot of people ask me again, like, who can you point to who has taken this from theory and has really built this brick by brick? Of course, with the help of such amazing people that have come on and off your team. Um, and, and Frank, you're one of those. And so I just, uh, I'm highlighting leaders that have some of the answers we need for how we move forward. And you're one of the first I thought of. So, thank you for coming on the podcast today. Anything else you want to add as a wrap-up encouragement or kind of firm statement about culture or character that we maybe didn't get to?

No. First of all, thank you again, Sy. It's great talking with you and having this dialogue. It's super important to me. I really resonate with some of the things you just mentioned as far as calling people up, but at the same time, making sure that non-negotiables ground everyone. It's the basis for really a strong culture and therefore, a character-led culture, which, as I said before, is really the glue for the organization. And it allows you to have the best place for people to work and be their best selves. you then can perform and grow your organization, grow your business, which is what it's all about. So thank you again. Really appreciate that.

You're welcome. You're welcome. I think that was the most surprising thing when I took an art class. I thought you go into art class to be creative, and they taught us for like 8 weeks on structure and how to kind of like put a container around what you're about to create. But the, the counterintuitive thing is, is that once the structure is clear, once you have the basics, It frees people up. And that's counterintuitive to people. And that's what you point out in your philosophy, is you have to draw the box in order for people to get creative and, um, and do their best work. So thanks, Frank. I look forward to— I've already read the book. I got a pre-manuscript. It's fantastic. Um, and I look forward to hearing more from you out and about. So, um, good to see you. And as soon as the world opens up again, I'll be out to visit.

Thank you, Sy. All the best.

You bet. Talk later.

Bye.

This is the No Ego Podcast, where we ditch the drama, end entitlement, and transform your world place. I'm Sy Wakeman.