Culture - Whiners vs. Doers? How important is it to B2B revenue growth?
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You've met Ed here on the site.
For many years John and Ed have enjoyed talking about thorny issues around B2B marketing & sales, and recently we've started to record those conversations/debates. We're calling it "Common Sense" based on our shared love of history, and the perspective we hope we bring.
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Culture Debate Synopsis
Is culture really critical to B2B revenue growth?
This episode includes:
- Ed starts the debate off by saying "NO!" Business runs on processes
- John counters with the position that culture is critical, but misunderstood
- They begin to find common ground around the importance of accountability
- Leading by example and management modeling of culture is critical
We dive into each of those and more as part of this conversation about the role of corporate culture in B2B revenue growth.
Transcript Follows:
Ed: Hi, I'm Ed. Welcome to Common Sense.
John: And I'm John. How are you Ed?
Ed: I'm good John. How about you?
John: We're doing well. Spring is here and it's nice and it's actually in the 80s out here in Houston, so.
Ed: Well, spring is here on the calendar in Boston, but we're not quite there in practice Ed. Did you see those pictures of the Boston Marathon yesterday?
John: That's crazy.
Ed: A lot of hypothermia I think at the race.
John: I'm really glad a woman won too. That's amazing.
Ed: An American. That was really-
John: Cool. Yeah. It's first time since the ‘80s or something like that I think. Anyway.
Ed: All right, let's get on to our weekly debate.
John: Yeah. We're going to argue about culture today. I guess we're mostly going to be talking civilly about it because we have to talk. But specifically we're going to talk about whether or not culture adds to the value of the company through business growth and we'll take a couple of extreme positions as usual and then come back to the middle. Why don't you start us off with your opinion about culture?
Ed: Part of this is informed by my time in the Army. I'd say that at the end of the day culture is pretty simple. You can't let the inmates run the asylum. The idea that corporate culture or some kind of kumbaya, nirvana, and everything's perfect, everyone's happy, it's really silly. I mean there's a lot about work that isn't fun. I mean all of us have that in our jobs. That's why organizations have processes and rules and employee handbooks and all the stuff that they have.
A great example we've talked about a number of times is CRM. The shocking number of companies that fail to implement CRM because their reps just won't use it. And even the number of companies that don't even try because they know their reps won't use it, they don't even try to do it. We've talked about the value of marketing automation and the insights that sales reps can glean from prospect behavior on the website and that kind of thing to improve their effectiveness and how it just doesn't get used in many cases.
I had the CEO of a $200 million company told me one time that he was absolutely certain that they could sell a lot more if they improved their sales process, but he wasn't comfortable asking his salespeople to do it different than they did in 1985 because it would make them uncomfortable. I mean this is the kind that owns the company that say this. Belichick, whether you like the Patriots or not, you got to admire what Belichick's done and I don't think that as he and his team were on the way out of the locker room he tells them to stay comfortable. He tells them to be focused and follow the game plan. So in that case culture is really about following the plan, not doing what makes you comfortable. Knowing you and loving you as I do John, I'm sure that you've got a different take on this, so tell me how I'm an unreasonable hard-ass.
John: Well, I actually come from the same school of thought that you do. Yeah, having been in business for 30 plus years and I appreciate your service in the rangers (editors note - tab not scroll) and I'm sure some of your jaundice probably comes from that kind of discipline and what you learned back then and how to survive in a war zone for example, so. A lot of our opinions are colored by our own experience. My first job here in Houston 35 years ago was with Shell Oil and I was put through the wringer. I had a two-day interview solidly just to compete for a job to get into, to get in the door, and it was worth it. But it was a painful experience. There wasn't any culture back then. The closer was you work hard and you get paid basically.
But things are different now. I think we have to admit that. I think this whole business about culture is really kind of misunderstood. I think what a lot of people are talking about with culture is what you referred to as kind of the human comfort side of things where the workplace should be extremely comfortable and it should be like being at home and bring your dog and your standing desk and drink as much free coffee and beer and whatever as you want and take vacations whenever you want for however long you want. I agree that that sort of coddling side of things is what people generally think of when they think about culture.
But it really is more than that, and it's really also about sort of the emotional support side of things and that may sound kind of soft too, but how good is the environment to work in in terms of working with other people? How do you treat each other? How does management treat employees and vice-versa? How transparent is it? How well do you understand what the company's trying to accomplish? And how well did they know what your goals are? Those are things that can be improved in most companies I think, and that's what I like to think about when I think about culture as sort of institutionalizing some of those goals, those core values, and things like that. I think if we focus on that we have a better shot at really understanding the value of how at least could be an improvement on business. You think that's fair?
Ed: I think that's absolutely fair, and I actually as I'm talking today I'm standing at my standing desk and then my dog's in the office with me, so.
John: There you go, see.
Ed: I don't have the nap room or the kegerator in the office but … So absolutely, if we kind of distinguish between those physical comforts and the beanbag chairs and the foosball table and those things that have become emblematic of kind of hit current corporate culture and talk really about culture as a whole and how it enables business, some of the stuff Ray Dalio in his recent book tour has been talking about with radical transparency and radical honesty, the really, very empirical way that you can share information and extract the best ideas from people and bring people together speak to what you're talking about. I think that if you're going to pick things to focus on, then it becomes around accountability and clarity of goals with a strong emphasis on outcomes.
Process and effort is great, but outcomes are how you measure. It doesn't have to be revenue. It can be successfully completing a project. It can be successfully screening projects out. Outcomes can be a variety of different things. But if so much of it comes down to managers actually embracing and manifesting and demonstrating and modeling the culture that's important, and the whole thing breaks in a hurry, if that doesn't happen, a great example can be managers telling sales reps to use a CRM and then turning around and ask them to send them weekly Excel reports. I mean, why do you tell a sales rep to use the CRM if you're not going to go in there and look at it yourself, or if you tell reps to schedule a four-hour block for prospecting but then let them come to you routinely all day long and just kind of this ad-hoc single issue sort of way without blocking out your own time and preserving the same sort of opportunities for priority of thought and thinking and important work, then you're modeling the wrong behavior.
If you let process drive the train, I mean that's a recipe for disappointment too. I've seen companies that have been really successful at implementing lean that now almost use lean as an excuse for never actually doing something. There's always one more iteration of testing and never actually, “Okay, great, we've done it. Now we're going to go … Now we're going to do it.” It's all debates and squabbling about resources. They can show up at every meeting on time and complete every A4 on time, but they're not actually getting stuff done. Accountability I guess is the one thing that I would say is the place to start to define cultural attributes. What do you think is kind of the lightning-rod, if you will?
John: Well, I agree that accountability is huge and it really should be one of your core values, and really the question is how do you get there? The way you described it, it sounds like more of a top-down thing, so that a manager is telling his employees, “You have to be accountable to me, and here's how, here's the process we're going to use, and you're going to be measured by how well you comply.” That's one way of doing it. That's kind of the old-school way if you ask me.
I think there's another way, and it doesn't have to be again the inmates running the asylum. It can be more of a team effort, so sitting down with your employees and explaining to them why, why do you want to do it this way, why do we need to have this process, why do we need to focus on customers instead of on our brand or our products. If you can help them to understand that and even get their feedback and get them to communicate what their ideas are about working with customers for example, what would be the best way for you to accomplish this mission? Then you could kind of arrive at core values together, you can arrive at the process together, and you're going to automatically get more buy-in and more effort, more team sort of focus.
I think that's an important aspect of culture today, of creating culture that's mutually accountable. It really is about communication, it's about talking to each other regularly, not just once a quarter or through some sort of review, formal review process. You might have that every now and then, but people want to hear more from you. As an employee to a manager, they want to know how they're doing, they want to know kind of what's important, what's going on, so that kind of … I think they used to call this management by walking around. I don't see managers doing that enough. They have their heads down. They're often doing a lot of the high tech or high profile work themselves rather than delegating and so.
Ed: In a world where people are working remotely, I mean how do you do that?
John: Yeah, it's hard. It definitely adds a layer, so. Then the other thing is it's got to be consistent across the whole organization. You can't just have one team with the culture. You have to have everyone on board and there has to be sort of rules of the road so that everyone understands what's going on. For example, compensation and ability to use different types of travel, those kinds of things that might be perceived to be a special benefit for certain people, you've got to watch out for things like that.
Then just different things, different responsibilities not being shared equally is another thing to look out for. You can't treat everyone exactly the same because we're all different, but you've got to watch out for certain things like sexual harassment for sure, that's one of the most common problems that companies have at the culture level. Those kinds of things need to be ironed out early and often. It's not a one-time deal. You've got to be talking consistently about this. What do you think about that approach?
Ed: I think you're absolutely right that … I mean, the expression I use is the pitter-patter has to match the chitter-chatter. When you've got the statement that goes on the wall of the conference room or gets put on the index page of the employee manual or handbook and then people behave differently, it just, it doesn't matter how much you talk about it. Management has to model a sort of behavior, they have to hold themselves accountable to the kinds of behaviors that they expect of other people.
You can look for simple examples where you find hypocrisy. If you say, “We're focused on our customers,” and then you've got one of these horrible telephone auto attendants that just puts you on hold telling you how important the call is and then hangs up on you, or if you've got senior execs flying business class and putting everyone else in the back of the bus, those are very strong, clear messages and they run counter to everything that you're talking about. People have to lead by example as the saying goes.
That creates a problem. There's kind of a caveat, there's something to work through. Delegation is a really tricky topic because great managers delegate for sure. I mean, there are things that both great managers and great leaders recognize other people can do more efficiently than them, and that's really got to be very clearly the motivation of delegation, that somebody is better at doing something, it's more appropriate for their skills and for their job as opposed to what unfortunately often happens it's about getting somebody to do something that you don't feel like doing yourself. It's got to be very clear for a manager and for a leader that when they delegate something, they're doing it, although they would be willing to do the task themselves, they're giving it to somebody that can be more efficient with it in the organizational sense.
I think that that is the kind of concrete manifestation of culture that really makes a difference. It's not the aesthetics. It's the actual operation of it, do people feel valued. Dalio when he's talking about his set of principles, talks about an idea of meritocracy where nobody's idea is necessarily right or wrong, but people do have a track record where some are right more often in certain kinds of areas. So you listen to opinions, you weigh them based on not necessarily rank but the demonstrated expertise, and then you mash them together and figure out what the best course of action is.
If it's really about … I think we're converging on an agreement that culture is critical, but it's not about aesthetics, the layout of the office or the slogans that you put on the wall. It's really about something more substantive. Is that what you're hearing as well?
John: Yeah, I think so. In my experience both as an employee and as a manager I think the happiest of both are people who have, that they understand what the direction is, they know what their goals are and where they're trying to go, but the boss isn't telling them how to get there or exactly what to do step by step. That's up to me. I have room to grow as an employee and a manager too. All it really takes is some of that common sense I think that we always talk about.
I think if we get too focused on trappings of culture like all the stuff we've talked about in the office, then it becomes tiresome and people get cynical about it and they start to say, “Well, we're just coddling our employees.” Some of that may be necessary because it's really hard to find good talent and hang on to it these days, but going overboard isn't really necessary either. I think if you pay attention to the human side and giving people responsibility and letting them feel like they're an important part of the team is also really important, so. I think we've come to a good place with our little debate today. Thanks for joining us today on this episode of Common Sense.
Ed: Thank you everybody that joined us to listen. Hopefully you're enjoying this debate where John and I start with these opposite positions and kind of work toward something that makes a little bit more sense. We're going to change gears next time and talk about the relationship between companies and the indirect sales channel, and who owns that relationship, how you manage the tech stack, and all that kind of stuff. Until then I'm Ed.
John: And I'm John. See you next time.
