The culture in any organization has an enormous influence over everything that happens. How can company leaders be more purposeful in creating the kind of culture that would cause employees to perform at a higher level?
David Friedman, author and CEO of High Performing Culture, spoke to us about his experiences building one of the largest employee benefits and consulting firms in the country, and how its success was impacted by the strong culture he had established. David’s most recent book, Culture by Design, was initially written as a way of documenting what he had created while leading his firm, and then became the cornerstone and business model for his current company.
Topics covered in this podcast include:
How to be more intentional in creating the kind of culture that causes your people to perform at a higher level
Steps that impact the success of a strong company culture
The meaning and importance of Fundamentals
Value versus behaviors
What is culture, and how do you define it?
Welcome to Expert Opinion, the BrandingBusiness forum where leaders share their views, insights and experiences from the world of B2B branding. And now here’s your host.
Ryan Rieches: Hello. Hello, I’m Ryan Rieches. Welcome to Expert Opinion. Today’s guest is David Friedman, CEO of High Performing Culture, and using lessons learned building one of the largest employee benefits and consulting firms in the country, David has authored two books to guide business leaders on practical ways to operationalize their culture. His latest book, Culture by Design, became the cornerstone for forming his company High Performing Culture, as well as their business model.
I really like the way David takes a very practical approach to the extremely emotional topic of corporate culture, especially during the COVID related challenges that corporate America is dealing with today. So I really believe you’ll find some hopeful, useful insights that David can offer you and you can begin to use within your own company. So David, welcome to Expert Opinion.
David Friedman: Well, thank you, Ryan. Great to be with you.
Ryan Rieches: Yeah. So you wrote your first book in 2011. So you’re a little bit ahead of the time in terms of culture. It’s certainly a hot topic over the last X number of years. It’s obviously on the front of most corporate agendas today. So, going back to 2011, what initially inspired you to write that book and then the follow-up book?
David Friedman: It’s a good question, Ryan. And first thing I would say is you’re right that it was, I guess, ahead of its time in that back then, people weren’t talking so much about culture. It was kind of like an underground topic. And these days you can’t go anywhere without people talking about culture. So it’s become hot over the last probably four or five years. But to answer your question back then, so I run this company that was called RSI. It was an employee benefits consultant company, and grew it, we were very successful, but all of our success, everything we did was based on the culture that we had created in that company. It was a very unique culture and it was a big part of our success.
When I sold the company and retired from that industry, I really wasn’t sure what I was going to do next. I wasn’t necessarily intending to do more in that area, but the process that we had created, which is around what we call fundamentals, we’ll talk more about that, but the system that I had created around our culture was kind of the signature of my career. It’s when I look back and say, “What was my career about?” It was about the creation of that. So I knew that I was always going to write a book about that. Someday, I would write a book about the things we had done in our company. And honestly, I wrote that book for me. I didn’t really write it for other people. I wrote it for me that I just wanted to capture what I had done in that part of my career in one place that I could look at and say, “Yep, that was great.” And then the book actually took off, but it wasn’t my intent. It was just my desire to capture what I had done in one place.
Ryan Rieches: Well, you addressed the right topic at the right time and the trend is in your favor. Well, you started already getting into a little bit about your approach. You mentioned fundamentals. So can you just give us an overview how your approach to culture is different than the many viewpoints out there?
David Friedman: Sure. So let me start by saying, Ryan, and for your listeners benefit that to me, we all know, every leader knows this, that the culture in any organization, I don’t care whether we’re talking about a family or a sports team or a church group or a company, that the culture in any organization has an enormous influence over everything that happens. And so when we understand that, what that suggests to me is that as leaders, if we had some way that we could be more purposeful or more intentional or more systematic about creating the kind of culture that would cause our people to perform at a higher level, well, that would seem like a pretty obvious thing to do. And yet my observation is very few leaders do. They just sort of let their culture happen on its own. So I’m all about how can we be purposeful and systematic about creating our culture?
The way that we do that is I organize the steps to do that around a framework that’s actually in both of my books. I call it the eight step framework. Eight different things that when we do these eight things, this is how you systematically create the culture that you want. And while all of the eight steps are important, they’re actually, just to kind of cut to the chase, there are actually two of those eight steps that have more impact than anything else. You do these two things well, you’re going to be incredibly successful. If you don’t do those two things well, you don’t get very far. And those two things are number one, how we go about defining what is the culture we’re trying to create in the first place? Because if you can’t articulate that really clearly, well, how are we going to go out and build it? That sounds obvious and yet most companies don’t do it very well.
I teach people to do that in a way that’s very different from everybody else. The difference is that most organizations, probably most of your listeners work in companies where at some point they’ve identified a set of core values. That’s very common. And I make a big deal about the distinction between what I call values and what I call behaviors. The distinction is more than just semantics. So a value is an abstract concept, quality, integrity, loyalty, service, respect, words like that. A behavior in contrast is an action. It’s something people actually do. You can see them doing it. So examples of behaviors, some of the behaviors in my company are things like honor commitments. That’s something you do. Practice blameless problem solving, get clear on expectations. Do what’s best for the customer. These are actions. So values and abstract idea of behaviors and actions.
The reason this distinction is relevant is that values sound wonderful. They look great on the website and on the wall, but because they’re so abstract, they mean too many different things to different people. And so they’re difficult to operationalize. A behavior though, because it’s action oriented is a lot easier to teach and coach and guide and give people feedback about.
So, the first step is to define the culture that your organization wants to have in terms of a set of behaviors. And I used that word earlier, fundamental. It’s the name I give to a set of behaviors. I call them fundamentals because I think they’re fundamental to success. And so the first step is defining the culture in really clear terms through these fundamentals.
The second step, and these two steps together really form the basis of the concept. The second step is what I call creating rituals. So a ritual is a routine. It’s something we do all the time. You brush your teeth in the morning. We used to say the pledge of allegiance when we went to school. Some people, before a meal, they say a prayer. It’s a routine. And the reason that rituals are important is that most people aren’t very good at sticking with things. We try things and they don’t last. When something becomes a ritual, it’s not hard to do. It’s just what we do. So the way we use that concept is we take these fundamentals, these behaviors, it gets rolled out into a company in highly interactive engaged sessions. And then we begin to focus on one of these fundamentals each week through a series of rituals.
So, week number one, everybody in the company, in every location, every department all week long is thinking about working on focusing on practicing fundamental number one. The week after that, they’re on two. The week after that, three and so on. And they cycle through them over and over.
So, an example of what would a ritual be. So here’s a simple example. In our company, and most of our clients, every meeting that we have this week in our company, it doesn’t matter what kind of meeting it is, every meeting, the first agenda item of the meeting is the fundamental of the week. And we spend the first three, four minutes talking about it. They don’t want to take over the meeting. But the first few minutes we talk about the fundamentals of the week. It’s a routine. It’s a ritual. Every meeting it happens. That gives us lots of chances to teach that principle. And so, if we do that this week and next week, we start every meeting with fundamental number two and the week after that fundamental number three and so on, we get lots and lots of chances to teach it.
So, the basic idea here, in all of this is, if we can define in really clear terms the behaviors that drive success in the organization, and then we can create a structured systematic way to teach those behaviors over and over and over and over again, well, sooner or later, those behaviors are going to become internalized. And that’s the foundational concept. Create the behaviors, create rituals to practice them, practice it with enough repetition, and they’re going to be internalized in people. And the system is just teaching people how to do that. It’s really very simple.
Ryan Rieches: Great overview. And I love how you broke it down to those two components and then the systematic approach behind it and how to create simplicity as well. So as you’re going through that, it kind of made me think a little bit about, how do we define that culture we desire? And it relates back a little bit to our work in the area of brand strategy, because often after we develop the brand or in the process of developing the brand, we often help leadership also develop what we call their core statements, or guiding statements, which are purpose, vision, mission. They usually already have values in place, but they don’t often have very well-articulated purpose, vision, mission. The most important of those is purpose. And that’s the why we exist. That same emotional connection.
So, I’m just thinking out loud that maybe as organizations develop their purpose, in other words, why they exist, what good are they doing in humankind and to benefit the world, then that could also tie in nicely with actually how they go about defining the culture that they desire. Right?
David Friedman: I think you’re right on, Ryan. A way of thinking about it is, you might think of as that purpose, mission, whatever we want to call it, as sort of being in the air, in the sky and on the ground every day where people live are the behaviors that they do. And so the defining of the behaviors, or as I call them, fundamentals, just creates the connection between the ground and the sky. Like, we’ve got this core purpose. Well, how do we live out that purpose every day? What does it look like to do things every day that support that? And defining the behaviors, enables the employees to sink their teeth into something, say, “Oh, I get it. I’m clear on the expectations.” This is how we live out that purpose, or that mission is by doing these kinds of behaviors day after day. That’s what really resonates with them.
Ryan Rieches: Makes sense. So, as I mentioned, often when we go into an organization, they already have values. Unfortunately, they’re the examples that you provided, which are throwaway words in my opinion, integrity, honesty, unity, those type of things. So at the very least we personalize concepts that apply to that particular organization’s culture. But I really like the shift that’s going on in my mind about what you’ve outlined. So I want to get into a little bit of a practicality here. So an organization that you might work with already has values, do those values depart, and then shift to these behaviors and fundamentals? Maybe you can chat a little bit about that.
David Friedman: Sure. It’s interesting, almost all companies, to your point, have some set of core values that they’ve written at some point. In my own company… So, if we’re starting from scratch, I don’t worry about the values, as crazy as that might sound because at the end of the day, all I care about is what do I want people to do. Let’s just figure out the behaviors and make them happen. If I was looking at a company that didn’t already have a set of core values, we wouldn’t bother. We just figure out the fundamentals and make them happen. But to your question, most people, at some point did some legacy work around the core values. What we do with those, I would say breaks down into two different situations.
There are some people that the set of core values that they have, they came out of a workshop session they did seven years ago with a consultant where they spent a day putting post-it notes on the walls. And at the end of the day, created these statements. And most of the employees don’t even know what they are or care. And it’s just a waste. If that’s where their core values are, we just ignore them and don’t bother. Let’s just create our fundamentals and make it happen.
However, there are many companies that did create a set of core values that are important to them. Yes, they may not be as clear as they could be, but they are important and they talk about them and they try to live them, even if it’s not as, again, as clear, but it’s meaningful to them. And so in those cases, we don’t want to throw away that old work. So the way that we can kind of preserve that without having to be married to that, allowing us the flexibility to really focus on the behaviors is what we’ll do is we’ll park those values on the side just momentarily, just for a moment. And then we’ll think about and brainstorm, so what are the behaviors that are important to us here, without reference to the values, just freeform? What are the behaviors that really matter in this company that drives success? And then what we do is we craft those fundamentals and then we describe the fundamentals as the way in which we live to the preexisting set of values.
Now, this is subtle but important. We’re not trying to map them. In other words, we’re not going to say these three fundamentals equal value one, and these four fundamentals equal value two. We’re just going to say, the way we live to that set of values is by practicing this set of fundamentals or behaviors. What that does, the reason this is important, is it allows us to present it to the organizations, to the employees as an extension or a deepening of the previous work, as opposed to it feeling like an abandonment of everything they talked about before.
And so, it’s a subtle, but really important way of distinguishing that. Because again, if we’ve got a lot invested financially, emotionally, psychologically in this previous set of core values, and we’ve been telling our employees for the last 10 years, this is what we stand for. We certainly don’t want to come and say, “Never mind, forget it. We don’t care about that anymore.” By preserving those, but just describing the behaviors as the way in which we live to them as a set, it allows us to preserve that but at the same time allows us to have the focus on behaviors, which really is how we’re going to operationalize it.
Ryan Rieches: Yeah. A good transition way to accomplish that. Good. Another question for you, David. Culture is like the term, branding. It’s overused and misunderstood, and many people associate culture with perks at the office and the feeling of teamwork by physically being together. But here we are in the middle of a global pandemic and most people are working remotely. Can you give our listeners any tips on how to achieve the sense of togetherness and teamwork during these times?
David Friedman: So, the first thing I would say, Ryan, is that you’re right. When people hear the word culture, they’re picturing often, we have pizza every Friday and the ping pong table in the reception area and all that kind of stuff, and that’s not what culture is. Culture is really, to me, it’s the set of behaviors that define how the group operates together. So if we’ve defined those behaviors clearly, and some of those behaviors may be teamwork, they may be other things, but whatever those behaviors are, that’s really what we want our culture to be. And if we’ve defined those clearly, and we’ve created the structure to practice those, those are not dependent upon people being physically together.
In many companies, I’d say in most companies where they have not particularly been systematic about their culture, their culture was just, it was figured out by just example. You’re around everybody, to your point, they’re around the water cooler, they have fun together. They enjoy each other, and that’s what they think of as their culture. And so if that’s the only way culture was promoted and that’s all culture is, then when we’re in a pandemic and we’re all working remotely, good luck. We don’t have any of that. If instead, we’ve been systematic about our culture. We’ve created, I sometimes call it a culture operating system. If we’ve been systematic about creating the culture that we want, and it’s infused into every aspect of how we operate, well, that’s still just as effective even when people are working remotely.
In my company, as an example, has always been remote. So the pandemic didn’t change any of that. We’ve always worked remotely. We talk about our fundamental every day, every week, we have a mobile app that drives a lot of our discussions around our fundamental, every Zoom meeting we’re talking about our fundamental of the week. So all of the things that we’ve always done, we could do just as well remotely, because we’re not depending upon our culture to be driven by example and by physical proximity. So I think the bottom line is to your question is, how do you preserve your culture in this time when we’re all working remotely? You get systematic about it. You define what’s important and you teach it over and over and over again, and you can do that remotely as well as you can do it in person.
Ryan Rieches: Okay. Good. Makes sense. So you used the term, we, throughout that description of how you operationalize it. We know culture starts at the top, but it takes more than one person. So when you’re going through the process of identifying these behaviors and fundamentals, how do you go about that? How do you organize a team, a leadership team, or is it cross-functional or is it top down, bottom up? Help me understand how you identify those behaviors that you desire.
David Friedman: Yeah, that’s a great question. And it’s one that my point of view about that is contrary to some popular points of view. One of the biggest mistakes I observe companies make around this is that they over collaborate. They bring in too many people. And the reason that that, in my view, is a mistake is ultimately, if you are a CEO, it’s your job to describe what you want this company to be about. It’s your vision that you’re trying to bring into reality. And so I say, this is a leadership function.
Now, most of the people that I see that we certainly have worked with are large enough that they have senior leadership teams. I am a big advocate for the inclusion of the senior leadership team in the process, but I’m very particular about the language here. I’m a big advocate for the inclusion of the senior leadership team, for their contribution to the CEO’s thinking, for their contributions of the CEO’s thinking. In other words, the CEO is the one who’s driving this, but he or she has smart people on their team and their smart ideas could influence my ideas as the CEO. But at the end of the day, it’s not a majority vote. It’s not, let’s make sure everybody gets a little of what they’d like to see. It’s what I want it to be about as the CEO, but I’m influenced by the smart people on my team.
And what we’re definitely not doing is going out to all of our employees and asking them, “So, what do you think the values are around here?” I don’t care what they think they are. And I don’t mean that in a derogatory way. It’s just that this is a leadership function. We’re not designing our future around the people we happen to have today and what they’d like to see. We’re designing the future around our vision of what we’re trying to build. And I’ll make one other comment about this. And that is that, the primary reason that companies over collaborate about this is it’s a good reason with a fault in the logic. The reason that they over collaborate is to get engagement, to get buy-in. And that’s a really good reason. We do want the buy-in.
The mistake in thinking is that the only or best way to get that buy-in is by having everybody author it. We get unbelievable buy-in by how it gets rolled out into the organization. And so people totally buy-in, they love it, they engage in it, but they didn’t author it. So the goal of buy-in is an absolutely essential goal. The mistake is thinking that to get buy-in, everybody has to participate in offering it.
Ryan Rieches: Makes good sense. David, our time is running fast. I only got two questions for you. So how do you… Now, you roll it out throughout the organization, so how do you balance recognizing and rewarding the right behaviors and on the flip side, addressing bad behaviors?
David Friedman: Well, I think to me, they’re one and the same, in a sense, in that we’re always looking at this from a coaching standpoint. So we are promoting the behaviors we’re looking for, we’re teaching and coaching all the time. So when we see somebody who’s not… Well, to answer your question, we see somebody who is living to it, we’re acknowledging that. We see somebody who’s not living to it, we’re coaching.
So gee, Ryan, I know that we said that honoring commitments was really important here. Help me understand what got in the way of honoring your commitment there. And let’s talk about what we can do in the future to make sure that we’re honoring all our commitments. So we’re coaching people. We’re not hitting them over the head saying, “I can’t believe you didn’t do this.” We’re using it as a chance to coach and teach and support people so that ultimately they begin to act this way with greater consistency.
Ryan Rieches: Okay. Good. Makes sense. Well, I imagine our listeners would like to have access to your book. Do they just go to your website or can you give advice on how to reach you or get a copy of your book?
David Friedman: Sure. So my books are… There’s two books. The first book was called, Fundamentally Different. The second one is called, Culture by Design. And both are available in Amazon and Audible in all its forms. So, there are hard cover, soft cover, e-book, and if you like listening, I do the audio book on both. So they’re available on Audible. So you can get them there.
My website is culture wise, the word culture, W-I-S-E, culturewise.com. And on the website, you can read more about it, there are many videos there, simple explanations of what we do, but you can see it all on the website or the books are available on Amazon and Audible.
Ryan Rieches: Perfect. Well, David, thank you for being a guest on Expert Opinion. Before we leave, any final thoughts or insights you want to share with the listeners?
David Friedman: Actually, the final thought is that if you recognize that culture is critical to success, then we ought not to leave it to evolve on its own. As leaders, it’s our responsibility to take control of it, and that we should be as systematic about our culture as we are about every other important aspect of our business. It’s too important to leave to chance.
Ryan Rieches: Good leadership there. Well, that concludes our show for today. This is Ryan Rieches and you’ve been listening to another edition of Expert Opinion, a BrandingBusiness forum where thought leaders share their point of view. If you’d like to listen to past shows or read our blog series, visit brandingbusiness.com. Until our next show, grow your business by living your brand promise.