Why Company Culture Is Important & Why Leaders MUST Start Developing Company Culture



this is to do this sell more show I'm Dave Lorenzo and on today's episode we are talking about leadership and the culture of your organization that's right I have an author of a hot new book for you on leadership and how you as a leader can have an impact on your entire organization through your behavior my guest today is Jeff Grimshaw and he's the CEO of Mg strategy he's worked with leaders for over 25 years and we are gonna pick his brain today on how leadership impacts the culture of your organization and one of the things I find absolutely fascinating is that your behavior informs your culture it informs the culture of your organization we're gonna get into that in detail today let me tell you about Jeff so Jeff has been doing this for over 25 years working with leaders of some of the finest organizations in the world he's been published in chief executive officer magazine chief Learning Officer magazine strategy and leadership basically he's done in-depth research on the topic of leadership for over 25 years his new book is titled five frequency's leadership signals that turn culture into a competitive advantage and let's face it if you're watching us on YouTube or you're listening to this on the podcast you want a competitive advantage so spend the next 20 minutes with us talking about what you're doing in your organization how it impacts the culture of your organization and how you can improve as a leader join me now in welcoming Jeff Grimshaw to the show Jeff thanks for being with us welcome thank you so much Dave thanks I'm happy to be here very happy to be here okay Jeff so tell us tell us about the new book this is your second book what inspired you to write the book and tell us about the the really the the reason behind you putting this 25 years worth of experience onto paper great what the main reason to write the book is because we found ourselves sitting on a big pile of data that we thought would be useful to a lot of people the business that we do we spend most of our day helping clients measure and manage their culture so we help organizations figure out the desert their desired state culture and in the culture that gives them a source of competitive advantage what do their people consistently know and understand you know what's in their heads what do they feel or believe in their hearts and then what do they do with their hands hearts minds and hands and we get help organizations get really clear on that desire state culture again the culture that provides them a source of competitive advantage and then we help them close the gap between the culture they have and the culture they need and one thing that became very clear some years ago was that the leaders who were really effective at at closing the gap between current and desired state culture producing the culture that gave them a source of competitive advantage was that they were transmitting consistent and strong signals across what we call five frequencies leaders are sending these signals all the time but the leaders who have great cultures are sending these signals very consistently very deliberately and again just consistently over time and that's how they get the culture this source of competitive advantage so we wanted to share the good word okay Jeff so I'm intrigued by the five frequencies so do me a favor and help our audience describe what the five frequencies are and then I'm gonna tell you which one is the one that um that that really gets me excited and maybe we can talk a little bit more about that describe the five frequencies for us right now if you lead people you are creating culture with the signals that you broadcast on five frequencies you're just one is your decisions and actions number two is what are you rewarding and recognizing number three is what you tolerate or don't tolerate number four is how you show up informally and then number five is formal communication lots of organizations people think okay well we want a little bit different culture we're gonna you know throw up some posters on the wall or put out a push out a new screensaver to our sales force or whatever it is but the reality is is that the fifth frequency formal communication is probably the least powerful the again the leaders who are our turnin culture to a source of competitive advantage across all those five things or sending consistent deliberate messages over the long run okay so I want to talk about two things that are really important to the folks who are listening today and watching on on YouTube on our YouTube channel the first thing is rewards and recognition when you have an entrepreneurial business like most of the folks who are listening or watching or when you're the leader of a sales organization rewards and recognition are something that's kind of weaved into pretty much everything you do tell me about what did you find with rewards and recognition what helps build a strong culture related to rewards and recognition well number one is you've got it you know that sounds really dumb really simple but you've got a reward what you want to see more of there was a guy named I'm blanking on his name so I'll tell you it later there was a guy Stephen Kerr who was a management professor in the 70s he wrote a he wrote a famous paper on the folly of hoping for egg while rewarding B and the guy became famous and they he became so famous that he ultimately became a senior advisor at Goldman Sachs but the whole point and I'll tell you about that a second but the whole point was that we have misaligned reward systems in so many organizations where we hope that people will do one thing we hope that people will be good team members we hope that people will collaborate but what we really just pay them for is individual effort or we hope that people will raise their voices and be good problem solvers and help us innovate but the people we really Ward are mostly the people who never annoy us by keeping their mouths shut so this guy Stephen curve you know from the 1970s made a name for himself by pointing out how often we have misaligned reward systems he actually was a senior advisor at Goldman Sachs at the same time that misaligned reward systems at Goldman Sachs helped contribute along with misaligned reward systems across Wall Street contributed to the financial crisis 12 years ago and and goldman sachs when they were paying back their ten billion dollar government bailout said we screwed up like everybody else on Wall Street we screwed up our compensation systems we were hoping for to incentivize long-term stability but what we paid incentive people for we're doing stuff that actually only paid off in the short run and I tell you that story not because that has immediate relevance to most the people listening except to illustrate how hard it is to live that principle the guy who actually coined the phrase couldn't actually pull it off and it's a problem that you see in almost every team we say we want to reward one thing but it's that's not exactly the thing that we're actually incentivizing okay so Jeff let me let me drill down on this a little bit should we be rewarding the end result or should we be rewarding the behavior that gets us to the end result yeah I think it all depends on what on what you're really looking for but for me you know for most organizations most sales organizations if if what you really want is the end result then part of what we've got a then then we've got to align the route the reward system with the behavior and the outcomes that we're looking for but the problem with the problem with having it focus only on results is that you can have people who get results the wrong way so unfortunately I don't have a simple solution the only point being that if you don't like the results you're getting then you've got to step back and say okay so what is our reward system actually rewarding what are we incentivizing and if we say that that's not exactly what we want then we need to look for some tweaks to it okay terrific now let's talk a little bit about the the behavior and the reward system and how it is weaved into the fabric that creates the culture and give me help me with the concept that that you describe that it's you know I hope I'm characterizing this right that it's binary right it's either it's either growing and improving or it's decaying and it's becoming weaker so talk to me about how the reward system helps to be the be kind of the connective tissue to keep that fabric together yeah I mean we have seen this time after time is that there are not a lot of cultures that have only a neutral influence on business results in most organizations you can identify pretty quickly that the culture is either an asset it is helping to drive performance it is helping to retain and motivate a players or it's doing the opposite rarely is the culture a neutral factor so you got to declare for it I mean either as something you're gonna care about and cultivate or it's not one of the other things that's become really clear in the last 10 or 15 years through neuroscience and behavioral economics is that human beings are emotional creatures that in fact you know Daniel Kahneman who won the Nobel Prize for economics in 2002 was a guy who actually never took an economics course in his life he had a psychology background and he sort of turned the field of economics on its ear by pointing out that we don't make any decisions we make very few decisions as human beings that are not where our calculations for what counts as our best interests are not run through emotional algorithms in other words we use emotional algorithms to decide what we want to do so part of the practical takeaway is that you've got to take into account the emotional rewards that you're providing people money is really important money is really important for everybody but in great cultures money's not the only thing the part of what we are managing for our performers is their emotional experience because what Daniel Kahneman found is that if you're not managing the emotional experience you are not you are not managing incentives for human beings in the way that incentives are actually mentally processed alright so I want to make sure that I understand and I want to make sure that that the message comes through loud and clear as long as I have it correct so in a in a sales organization in an organization that is in growth mode in an organization that rewards growth not only is the financial compensation important but bringing the person who's number one for the month up in the front of the room shaking their hand in front of their peers patting them on the back and asking them to describe what they did to get there is probably just as important if not more important than the money they get in their paycheck is that if I'm if I'm understanding that correctly is that what is that is that what you're talking about yeah that's a great example yeah absolutely absolutely that in terms of that that you get double value there that that you've incented the organization but you've also created this sense of you know human beings are comparative animals that's one of the other things that Daniel Kahneman found we're constantly comparing ourselves to others and so the and so bringing up the person who killed it last month and then also using that as an opportunity to learn from that creates an emotional environment that motivates people to keep pushing now the challenge is because human beings are also highly attuned to comparison that also means that as a Sales Leader you have to be really conscious of perceived inequities you have to make sure that that you're not playing favorites you have to make sure that you're being as objective as possible because when people believe that they're doing the same amount of things producing the same amount of results but other people are somehow getting more rewarded for that it just goes back to our human wiring we are so attuned to that it freaks people out that is part of what it means to lead human beings all right now you've hit on a nerve here I think for everybody who's ever managed people forget about being in a sale organization with everybody who's ever managed people and the keyword in in the in the statement you just made is perceived inequities right so what can we do as leaders as business owners or as sales leaders what can we do to make sure that we've demonstrated that the process is fair that it's that it's not rigged how do how can we influence that perception yeah I think there's only really one or two good ideas here at least that I'm aware of and one is to be as transparent as possible so sometimes so the more open you can be sometimes people won't like the decisions but you know one of the other things that drives human beings crazy is if they feel like they can't get an answer we are human we are recently our uncertainty reducing animals we want to reduce our uncertainty so when people feel like the calculations for what is rewarded happen in a black box to which they don't have access that's gonna be crazy making for people so the more transparency the better and then of course you actually have to be consistent yourself and make sure that there are not any reward decisions you're making that you can't justify to everybody all right that is fantastic advice and that's great that's one of the five frequencies recognition and reward we're talking to Jeff Grimshaw he's the CEO of Mg strategy he's got a brand new book out five frequencies leadership signals that turn culture into a competitive advantage and that's what our show is all about it's about giving you a competitive advantage do me a favor if you're watching on youtube please hit the subscribe button ring the notification bell and the reason I want you to do that is because my daily show called surprisingly the Dave Lorenzo daily issues a new episode every day every day at 5 p.m. I don't want you to miss it so make sure that you hit the subscribe button and ring the notification bell so that you get notifications when new show goes up every day this show the do this sell more show comes to you every week every Thursday we publish a new episode every Thursday it goes live on the podcast at noon and the video goes up at 6 p.m. you don't want to miss a single episode because today we've got Jeff Grimshaw the CEO of Mg strategy with us and next week there's no telling who will be with us alright so Jeff let's talk now about communication and you you dedicate two of the five frequencies to communication there's informal and formal tell me about the difference between informal and formal and then let's talk a little bit about each yeah so formal communication is really the kind of stuff we're talking about that involves communication support or technology in other words if you're walking around with a PowerPoint deck or you're putting it on a poster that's that's formal communication if you're giving a speech leading a town hall that you're you know working from pre-printed talking points that's formal communication what we mean by informal communication are the times that you spend in unscripted settings doesn't mean you haven't walked into these conversations with purpose but they really are conversations and it's really about how you show up and in fact whether you show up that it has just a huge impact on culture and typically significantly more of an impact on culture than anything you're doing in the way of formal communication okay now how much formal communication should should go out in any in any given organization how much formal communication do we need whatever you put out should be should only amplify whatever it is that you are very consciously broadcasting on the other four frequencies your decisions and actions what you're rewarding recognizing what you tolerate or don't and then through your informal communication anything that you put out on formal communication through that fifth frequency that isn't amplifying the other four frequencies is either going to be ignored or it's just gonna be ridiculed because people will see how it's disconnected or divorced from the cultural reality that you're creating through the other four frequencies so I'm not telling you to spend less money or I'm on formal communication but maybe you should and and if you know if without knowing any context if somebody said should I spend half as much time on formal communication and then channel that energy and those resources into the other four frequencies I'd say yeah without knowing anything else I'd say that's probably a pretty good way trip yeah that is that's completely in alignment with what I what I talk with clients about my feeling is this you and your you just validated it for me your formal communication is simply an opportunity for for you to make a mistake unless you're a great communicator so if you want to have a monthly meeting make it as brief a monthly meeting as possible get your message aligned with everything else that's going on in your business rehearse the message that you're going to deliver and let people get back out and do what they do best because you're the opportunity that you're in front of them is an opportunity for what we talked about in the first place recognition and and you know rewarding employees describing really effective behavior and helping them see that behavior so they can model it and then sharing any new updates you know it's an opportunity to be transparent but if you're hoping to deliver some sort of groundbreaking earth-shattering new message you're you're really betting heavily on an opportunity that's probably not going to deliver what you what you wanted to deliver so I'm with you that minimizing that that time that people are investing in that formal communication is probably best and it serves only to reinforce what you're already doing all right so let's talk about let's talk about what I really love from from the five frequencies and that's how the informal communication has a tremendous impact on the culture tell us tell us about the informal communication and the impact it has on the culture you know a mentor of mine guy named Greg Barron has this brace and and the phrase is everything that happens in organization happens in or because of a conversation and and that applies to a lot of things I mean it also applies to making a sale you know typically anything that happens in a sale happens in or because of a conversation applies to your family anything that happens and your family happens in or because of a conversation in your organization in your team it's certainly true everything that happens manhattan's in or because of a conversation so if you want to make things different if you want to have a competitive advantage you want to do anything differently any different results you gotta say okay well if everything happens in our because of a conversation how do I change the conversation and what does that mean in terms of how I show up informally in unscripted settings and in a lot of cases that starts with just showing up period you know what does it mean to show up for your people what does it mean to figure out how to have the conversations with them that are meaningful but actually don't take up a ton of time and what does it mean to show up in a way where you're just as focused on listening to what's going on for them as you are about telling them the 17 things that you've been compiling on your list so there's a lot to it but that's a big big part of it is showing up and being in a mode where you are listening as much as you're talking so Jeff let's talk about behavior and let's talk about how what I do when I'm walking around as a Sales Leader or what I do when I'm hanging out with my team at the water cooler or just standing around the office talking about how the day is gonna go let's talk about how that behavior is important for for the for the culture and is that reinforcement or am i breaking new ground there let's talk a little bit about that yeah I think just going back to the way the human brain works we are evolutionary biologists believe that we are constantly filtering for who's in our tribe and who's outside of our tribe and that we have more trust for people who are in our tribe we can let down our defenses and that's actually really good for to let down their defenses and feel vulnerable be willing to be vulnerable because we only learn we only get better we can only figure out ways to get smarter and develop more of a competitive advantage if we are willing to feel a little bit vulnerable if we trust the people who are around with them but getting people to trust you getting the people to believe that you are in tribe with them if you will doesn't necessarily mean that you just hang out with them and tell dirty jokes and you know and talk about drinking although I'm not you know I'm not saying that that's verboten or anything but it is really more about being in a mode of operation where people go you know what if I made a mistake I can talk to my boss about it if something didn't go right or and I got an idea I can speak up and suggest it and you know and he's not gonna take me out at the knees because he gets defensive about it too those are really the kinds of conversations where people resort can feel like we are an organization we're a culture where we reserve the right to get smarter we're an organization where we treat mistakes as intellectual capital we are an organization where when something goes bad we don't look for who to blame but we look for what's wrong with the process that we can fix those are the kinds of if you can lead those kind of conversations that will fast-track you to a place where people feel like you are in tribe they can trust you and you can turn that trust into into ideas and speed that produce competitive advantage something really important that I want to highlight with what you said there you said when something goes wrong we look for the flaw in the process and we look to fix the process rather than to lay blame at the feet of the individual and I I think I love that concept and I love the idea of starting an analysis with let's look at the process and let's see if the process the process had a breakdown somewhere let's see if we need to improve the process and what that does for you as the leader of a business what that does for you as somebody who's trying to move a team forward is it says okay first thing we're going to do is we're gonna look at the process and when we check out the process if the process checks out a hundred percent and it worked really well you turn to the other person and you say where do you think we could have done better here that doesn't that leaves them no place else to go but with their own performance general right so it takes it takes the accountability and it puts it squarely where it belongs and it allows them they can't improve until they realize where the mistake was made is that don't am I getting that right Jeff yeah but yes I there's an acronym douwe and it stands for don't ask who ask why and I got this from Jack Brennan the CEO of Vanguard number of years ago and his whole point was if you if you point a finger at people and you say you screwed up or even tell me why you screwed up people get defensive and then because humans are really defensive we wouldn't have survived it as a species if we weren't really good at defensive it pushes people into excuse making mode but if you say if you don't say who screwed this up but you say why didn't we screw this up it creates a mindset where people are more likely that instead of pointing fingers at one another making excuses are actually gonna work on fixing the process and solving the problem okay that's great I appreciate that Thanks so Jeff tell me a little bit now about and for the folks who are listening for their benefit from my benefit tell me the difference between leadership and management because so often I hear people use these terms interchangeably and they're not so what's the difference between leadership and management yeah well I think you lead people and I think you manage systems and processes and I think one of the you know leadership is in in my definition it's about working with and through others to get things done and I know that one of the challenges for people who you know sometimes organizations as as you said to me as you've observed to me Dave is that people take the top producer and make them the lead of the sales organization and sometimes that has mixed results real a quick story that I use a lot it has a lot of application there's a there's a traveler on an important journey and he comes to a raging river he says there's no way to get across this raging river and then he sees a raft rickety old raft over in the brush and he says I don't have any choice I got to continue on my journey so he takes the this pulls out this wrap and shoves it in the water and you know sketchy but unbelievably the the rickety raft helps him get to the other side and he says on this important journey who knows when I'm gonna come to another raging river so he throws this huge old raft on his back and continues on the journey and he comes across other travelers they're like dude what's up with the rap he's like you don't understand if it wasn't for this raft I wouldn't be where I am today I can't put down the rap and he's right he literally would not be where he is today if it wasn't for the raft and the other thing that's true was he's not getting to where he's going unless he puts down the damn raft the reason I tell the story in this context is because a lot of us are carrying rafts and maybe there are things maybe there are plays that we run maybe there are parts of our success formula in the role that we last occupied and they are rasped because we literally would not be where we are today if we had not picked up that raft somewhere on the journey and the reality is you're not going to get to where you need to be as a leader until you put down the damn raft I love it that is thank you for telling that story that's perfect that is the perfect way for us to round out our conversation today the habits that you have and the culture that you have that got you to where you are today may not be the habits and the practices and the culture of the organization that you need to get you where you're going tomorrow we've been speaking with Jeff Grimshaw he's the CEO of Mg strategy Jeff how can we find more from you where can we first of all I know we can get the book on Amazon I'm gonna put a copy of the link for the book on Amazon in the description on YouTube and in the podcast description but where can people go to get more from you on a regular basis tell us what your website is and how they can get in touch with you yeah the website for the book is five frequencies com you can either use the number five or you can spell it out five frequencies com and when you're there you couldn't download a you can download for free the books introductions so you can check it out and see if it's of interest to you before you order the whole thing there's also a discussion guide lots of people are using this book as in book clubs in business book clubs and so there's a discussion guide to help you get maximum value problem wonderful so go to five frequencies calm is that right yeah yeah five frequencies calm either the number or you can spell it out five frequencies calm that's where you can get the introduction and download the discussion guide I love the fact that it has a discussion guide could this guy have made your job any easier the information is right there buy 20 copies of the book give it to all your managers go download the discussion guide from the website I'm telling you this type of resource will help you not just today but it'll pay big dividends for you throughout your career so pick up a copy of the book do yourself a favor and go to the website five frequencies calm down load the discussion guide use it with your people the information that we've shared just in the last thirty minutes alone will help you not only build a stronger culture but it can help you lead your team to greater results and if you make one percent improvement each day this is the old alan weiss axiom alan weiss is a mentor of mine if you make one percent improvement each day in seventy days you've doubled your productivity you've doubled your knowledge you've doubled your learning Jeff it's been a pleasure and an honor to have you with us thanks so much for joining us today ok thanks for having me on all right folks that'll do it for another edition of the do this selmour show we are back here every week every week you can download the podcast at noon on Thursdays and you can watch another interview beginning at 6 p.m. every Thursday on the Dave larenzo YouTube channel until next week I'm Dave Lorenzo and here's hoping you do this and sell more you

Maurice Vega

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