My Experience Rebuilding A Company Culture. (And Why You Might Want To.)

Client Focus can do virtually anything because our culture runs the company so well.

In 2015, the owners of Client Focus wanted a change. They had a wonderful company with tons of potential, but it had drifted from what they had created. The person they had hired to help grow the company wasn't aligned with their vision. Client Focus still provided a valuable service, but their dreams about their impact on employees weren't being recognized, and that was hurting growth.

When they brought me in the first thing I went to work on was revitalizing the culture. It was a big challenge that took longer than I expected, but the result is a company that nobody wants to leave. A company where people give their best, crave challenges, and care deeply about their coworkers and customers. Here are some highlights of how that went down.

Taking Stock

For my first couple of months I asked lots of questions, interviewed as many employees as I could, and had lots of customer interactions. What I found was my predecessor's legacy: a sales-hustle mindset that informed how we thought of employees and customers.

Our call center is a low-key SDR sort of arrangement. My predecessor believed that employees were fungible. He hired in bulk and kept what stuck. People knew they could be fired at any moment. There was a rule for everything, and there were supervisors to catch people breaking them.

I estimated that employee churn costs were at least 10% of revenue. Employees tended to last about six months, and often went out with a bang.

Culture Runs The Company

A note on culture: it's tempting to think that employees have to do what you say. But it's not true. Something invisible governs water-cooler talk. It informs employees which if your expectations they have to care about. It tells them whether they should step up or keep their heads down. It's how they know whether they're respected and valued or expendable and fungible.

That invisible thing is the culture. It runs the company, not you. The only sure power you have is to promote, demote, or fire. But employees have the corresponding power to give their best, give the bare minumum, or quit. And they can replace you faster than you can replace them. You're losing.

Supervisors don't know this. Imagine a high-potential employee who ends up at odds with a small-minded supervisor. The supervisor uses their "power" to fire the employee. Then the supervisor claims a victory. But the company took a huge loss, and the culture got worse.

You don't run the company. The culture does. But you can influence the culture so that it runs the company better than you could have imagined.

So I set out to flip the culture.

I got rid of rules and I got rid of supervisors. Then slowly we rotated out people who can't function without supervision.

We spent a month doing the hard mental work of determining a set of real values that were essential to the growth of the company. (Not just Respect, Integrity, Communication, and Excellence--hat top to Enron!). We also developed our Shared Purpose:

1. Elevating Employees' Careers.
2. Transforming Small Businesses.
3. Protecting More People.

(That last one has to do with our insurance customers.)

But we didn't just define them. We established them as our foundation for decision-making, hiring, promoting, and going to market. We put them on the wall and evangelize them with religious ferver.

Then we made sure everyone gets leadership training so that we would never have to hire from the outside for a new leader. And we taught our leaders how to get new employees from "Safe" all the way to "Independent" on our Employee Growth Model.

Productivity went way up and employee longevity nearly tripled.

Culture Also Shapes Customer Relationships

Another note: imagine that you think everything is about price. Naturally, you decide your sales pitch should focus on price. You train you team to lead with discounts. Before long, your company culture says, in every way possible, "WE'RE ALL ABOUT PRICE". Guess what kind of customers you'll end up with?

So we made sure every customer had someone assigned to them to manage the relationship. And I'm not talking about 300:1. More like 20:1. The people doing fulfillment for the customer own the relationship. It's a lot of responsibility and it makes employees grow professionally very quickly.

Before I knew it, customers were praising our employees rather than praising our company. Employees started telling the amazing stories of things they had been able to do for "their" customers. I even found employees sitting alone crying because they had lost a favorite customer despite their best efforts. We were winning--big time.

We've been growing fast and sustainably for years now, and customer referrals are a huge portion of our new sales.

We also decided that our culture didn't allow for us to profit when something bad happens to a customer. So we got rid of our 90-day contract and stopped charging for early terminations. As a result, the rate at which customers return to us is--you guessed it--way up.

We didn't make these decisions based on careful financial analysis. We made them based on alignment with our core values and shared purpose. Because they're correct. And if you don't align with what you believe in, then you don't really believe, do you?

Realizations

So I learned some things along the way that I believe are fundamentally true. But they only work if you apply them when it's hard. I mean, sure you can stand for "transparency" when everything's going great, but what about when layoffs are coming? You can write articles about loving your people, but what about when your bonus is in jeopardy?

It's during the hard times that people look to see whether you're principled or not. And that's why most companies struggle to be values-driven: they only believe in their values when it's easy. When things get tough, they flinch, and everyone takes note.

Here are a few of the things I've found to be true along my journey:

1. If you think you have power over your workforce, read The Emperor's New Clothes.
2. Your company is suceeding when everyone--employees, customers, and your company--is growing and thriving.
3. You should hire or develop people so that they're all better than you at their job.
4. People are amazing except when you try to control them.
5. Supervisors control people because they're insecure, not because they're competent.
6. A "you could get fired" culture will marginalize and eventually shed it's high-potential talent every time.
7. All of your people combined are way smarter than you are (unless you don't allow them to be).
8. Love makes the world go 'round. Your business is in the world. You'd better love people.
9. Don't lead with discounts. If you keep your margins up, you can be generous after the fact and customers will appreciate you for it. You're valuable. Act like it.
10. If you want people to trust you, you have to trust them first. Trust transforms people over time.
11. If you have a foundation of carefully-arrived-at, correct principles, you can cultivate a culture that will run the company waaaay better than you can.
12. Hire, keep, and promote people who are a good match for the culture you've built. And fire your brilliant jerks today, if not sooner.
13. None of this matters if you can only think 3 months at a time.

Hey friend, if this article gave you something to think about, consider subscribing to my newsletter: Matt Wagner's Growth Insights. Every week or so I'll share something that will help you break out of the status quo and reimagine how you grow your business.

About Matt Wagner: I'm a veteran of the tech industry who found his happy place helping leaders grow their organizations. We focus on culture, talent, strategy, and profit. I'm available for coaching and speaking engagements. Shoot me a DM and let's chat.

? 2022 Matt Wagner. These are my ideas and do not necessarily reflect the opinion of my current or past employers.

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