Daniel Forrester: Culture-Building and Organizational Success
On this edition of The Inc. Tank, Christina Elson talks with Daniel Forrester about the intersection of culture and technology and what it means for business strategy.
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FULL TRANSCRIPT:
Christina: Hello. I’m Christina Elson. And on this edition of The Inc. Tank, we’ll talk about the intersection of culture and technology and what it means for business strategy. My guest today, Daniel Forrester, is the founder and CEO of THRUUE, a consultancy with a unique expertise in blending culture and strategy. Hi, Daniel, thanks so much for joining me today in The Inc. Tank. It’s great to have you.
Daniel: What a pleasure. Thank you for having me.
Christina: Today, we’re gonna talk about culture and we’re gonna talk about how culture and the fourth Industrial Revolution are coming together to really impact businesses. From your vantage point running a consultancy, what are some of the things that you see and how you can help us think through some of the issues that we’re gonna deal with in reinventing business and thinking through culture? When we’re talking about culture in a corporate sense or even a non-profit sense…you know, as an anthropologist, I think a lot about culture in sort of a social setting. But we spend a lot of time at work. We spend a lot of time with our colleagues. So, when you’re thinking about defining culture, how do you do that? Help us understand what culture means to you.
Daniel: We call it the way things are done around here. All right. So that’s the simple definition. The more fancy-pants definition is we talk about norms, values, and behaviors. And every organization has a pattern and a rhythm that arises usually set from the top, from the very first moment that a founder of a company or a Board of Directors sets something in motion. And those norms, values, and behaviors are palpable as soon as you walk into a company, is this an open setting environment. By the way, before you even get in there these days, I tell my CEOs, “Your culture is live on the internet,” because Glassdoor is creating transparency to a little bit of a snippet of what are those norms, values, and behaviors.
Culture sits in the consciousness of your employees. It’s how they experience the current culture and what they want in the desired culture. Those are two different things, by the way. So oftentimes, when we study companies, and we’ll probably talk about this at some point how to measure these things, which they’re measurable, understanding the deltas are what we call the culture gaps between what employees want the behaviors to be and what they observe. That is the great challenge of the work that we do. And it’s quite joyful work because culture, by the way, also has to sit in service of a strategy.
So when I founded THRUUE, I did not wanna have just a strategic planning firm, although we’re very good at that, we’re very skilled at that. Strategy is all about having a set of norms, values, and behaviors that lift it up. That’s the whole point of it. And so the two of them, to us, collide constantly, strategy and culture. And in fact, some would say, in a company like Southwest Airlines, for example, their strategy was culture. And it was a high-performing culture because it’s the only thing that we can differentiate on. So, norms, values, and behaviors are what we’re hunting for from the moment we arrive in a company.
Christina: Let’s break that down a little bit because norms are sort of the idea of, “Well, we have certain kinds of behaviors.” Those behaviors might be expressed symbolically, maybe in the way we all tend to dress or what our corporate code is or some of the kinds of events or celebrations we have. Values are a little different because, when you’re thinking about values, we’re talking about both individual traits and then how those traits are put together in people to create certain character, you know, your character, my character, and then how that character might be expressed in terms of the environment, so helping people bring their best selves to the work environment.
And then when we think about putting that all together and building actually a cultural system, it’s really obviously very, very complex, very complex. And one of the things that’s quite interesting from the point of view of your mentioning culture sort of being built from the top down, that has to mesh with the values of obviously the employees. So what we often see is this disconnect when CEOs come in and start a company or you get a new CEO and they say, “I want my culture to be transparency and integrity.” And like, “Okay, who doesn’t want that?” But that’s not a culture. Those are just…
Daniel: Words.
Christina: …words. Right. They’re traits. I mean, that’s not even a character. So help us think through a little bit how that works when you’re trying to build a culture from the top down but you have individuals who are very, very different people, right? And you want that diversity. You want that.
Daniel: I guess it depends what you stand for. What are the values of the company? Values are the statement of a single word or an idea. The behaviors are localized, in our view, to the IT team, the marketing team. Openness was one of the core values at one of the companies I used to work for. The behavior that we were told was we will share information openly with each other. The norm, which was interesting for me, for 13 years, I never did one of these things because someone told me it’s not normal for us to do BCC. Think about that. I still can’t do BCC because the whole idea of a blind copy to someone is the opposite of openness. You didn’t know that I BCC’d seven people. Think about how…that construct, right?
The tone was set from the top. The modeling of that behavior of openness was set from the top. It’s one of the reasons why I’m passionate about this work, is that our CEOs, we have co-CEOs, we would have open forums with them where I could ask them the most incredible questions and go back to my desk a few times early on and wondered, “Am I gonna get slapped on the wrist for being so direct with someone.” Not only was I never slapped on the wrist, but we were celebrated. And people would call out to say, “You know, you’re really living that value.” But the norms we find are the ones that the CEO sets a certain tone.
But even something as simple as…you know, we’re working with a lot of clients even in very difficult situations like Post Me To environments. There’s a big normative difference from walking in a room and seeing all the doors are closed in an office versus all the doors are open. Think about normatively what that says to someone. If I close the door, and by the way, if it’s not a glass door, there’s something quiet and secret going on there. Now, we’ve also learned on the other side of the spectrum things like these open office environments. Look, every now and then, you might have to call your doctor, and frankly, that’s none of my business as one of your colleagues.
So openness, open environments but the norms of what you see…your comment about it being incredibly complex, it is complex. It is unique to each institution. I have a lot of folks who will say to me, “Can’t we be more like Google? Can’t we be more like Facebook?” I say, “Why don’t we be more like you,” because you go to war with the norms, values, and behaviors that you have. And in our work, what we’re trying to do is to find the healthy values and behaviors that employees like. They like things like openness. They like things like collaboration. Here’s the other side of it, the shadow side, we call this entropy. We measure a concept called entropy. Entropy is the fear in a culture. Ready for it?
Bureaucracy is a fear-based word. And people choose it all the time as one of the norms that they see in the company, hierarchy, information hoarding, abuse, silo mentality. Believe it or not, in our diagnostics, we ask people, “What do you observe?” We don’t judge the words. But people sometimes even choose the words “blame.” I’ve seen “manipulation” chosen. Those are incredibly complex situations. And if you’re dealing with a culture where there has been a trauma or there’s been a massive change, our playbook remains the same of engaging and you’re coming from the top, we believe it’s the middle managers out that make a huge difference in this.
Your CEO and your C-suite, if they don’t model the norms, values, and behaviors, why would anyone care? But if the middle managers aren’t bought in, aren’t asked their place at the table… People work for managers, they don’t… I’m a CEO, I don’t really do everything every day. I hire great people. And then there’s managers who I tell them, “I work for you.” So if my managers in any company don’t normatively and behaviorally go tied to the values we stand for, it’s just a plaque on a wall. That’s a little bit of how we begin to unpack it. It’s top-down, middle out, and bottom-up in the sense that you have to constantly measure it because you need to be asking your employees, “What do you see? And what do you want more of? What do you want less of?”
Christina: So that’s a very important point because it is really is about modeling the behavior and also understanding that this is not like we get a culture and we’re done. You know, culture helps people deal with ambiguity or sort of a fear of the unknown. It helps have some sort of understanding of how to pass on knowledge that they have, which I think is actually really important just for humans to think that, “I have a way to transmit my knowledge and understanding and skills to other people.” I think that’s just a very part of being a human, right? You want to sort of have that out. But on the flip side, we see this in many places in history can also become ingrained, it can become very inflexible. It can become more about how people are superficially behaving and acting than how their values align internally. And so, when you start to see that ossification of culture and people just say, “Well, this is our culture because it’s our culture,” and the lack of thought behind it, I think is what you’re pointing out, is that culture really is a living thing and it has to be ongoing and thought about and asked about and there’s a conversation there.
Daniel: You know, your comment about the ossification, I think about the hardening of arteries. You get ingrained behaviors and this idea that, “Well, this is how we do things around here.” That mindset is pervasive. It kills innovation. It kills experimentation. One of the groups that we are targeting and spending a lot more time with recently are chief information officers. And Gartner recently had a piece that sort of validated where we’ve been seeing it, which is that the CIOs are becoming culture change champions because those CIOs, he or she by definition, they’re gonna be experimenting. They’re gonna be trying new things. They wanna allocate decision rights fundamentally different than the firm has stacked up before.
I think this word digitization, it’s an incredibly overused phrase. Since the web has arrived, I think we’ve been in waves of handling our new digital capabilities. It’s not like everyone woke up one day, two years ago and said, “This is it. The business is out of business. We gotta digitize.” The moment that the world woke up and discovered you could put a global front end to your company, I do not believe since that moment has happened, and I started working on web based thinking from sometime around 1997, I don’t think we’ve perfected it. And so this to me, this digitization phrase just doesn’t go there. But from a changing a culture perspective, getting an organization to shift that is so used to doing particular processes and habits… We divide the world sometimes to make things a little simpler. We think about culture carriers and culture vampires.
So when I say that to my leaders of every team… I said, “Culture carriers…” I said, “Well, this is what I mean.” I said, “Imagine the 30 people that you would cringe if tonight you found out they were leaving the company.” And they said, “Oh, I know who those people are.” Then I say, “Well, think about the culture vampires.” All of them leaned back in their chair. All of them have a big smile. And every one of them would say, “Yeah. They’re around here too.” And my feedback to them is, when culture vampires are allowed to have outrageous decision rights or to symbolically, rhetorically or through their actions do the opposites of what the norms values and behaviors are, there is nothing more that could decay a culture and to depress the culture carriers than watching those that get away with a rule set that is normatively against the change that the group wants to see. So I tell my CEOs all the time, “You wanna do something in terms of changing the culture, exiting the culture of vampires is probably one of the most profound things you can do. And your inaction, leaving them in there, makes the work that I wanna do with you to uplift this culture a lot harder.”
Christina: That’s sort of a hard realization, you know, for a lot of people to come to. But I like the point that you’re making about the CTOs really having…and what you’re seeing in many cases as having to lead this transition. That really is a tough role. And that is a nice segue to this idea about the fourth Industrial Revolution, so digitization fourth Industrial Revolution. Depending on who you talk to, people will say, “This really is a very transformative period.” There is so much going on that we are moving into just kind of another way of being.
And then you have people that say, “Oh, you know, we’ve been doing this since the Stone Age, like let’s all chill out,” you know. You know, the truth is somewhere in there. There’s a lot of technological convergence. There’s a lot of really interesting stuff going on. But I think from the point of view of the people that you’re working with, a lot of these CTOs, it is really this fascinating idea of, “How do you bring in technology and the demands that technology is going to have on your business structure and your strategy and skills and capabilities that go along with implementing that technology and mesh it up with your organizational culture?” Maybe you can share some of the insight of what you’re seeing in the work that you’re doing.
Daniel: Well, I think about, you know, the dawn of the Machine Age. I asked the question, and we wrote about this a little while ago, what are the core values of machines? And by the way, machines aren’t self-directed just yet. There are human beings that are telling those machines to do certain things.
Look at the scandal that has arisen from Volkswagen and how they were decidedly deceiving regulators in the United States. Let’s look at Uber even. Uber had teams of coders that were writing code that was intentionally trying to misdirect where regulators would imagine their fleet of cars would be. Well, the question I ask myself is, and you can’t blame the technology, who has spent time with that team of coders talking to them about the norms, values, and behaviors?
Christina: Nobody.
Daniel: No one.
Christina: Nobody.
Daniel: By the way, this…we glorify technology as a country. We can’t wait for the next…a big major event from where Satya is gonna be on stage or we’re gonna watch the next great Apple amazing device. But we’ve got to be asking harder questions as leaders. As the machines come in, it’s a reality. It’s going to be a workforce that over time, I don’t think humans are gonna be displaced by everything.
But the larger question is, as we program the future of the firm, what and who is responsible for making sure ethically, morally, that the values of the firm are supposedly ingrained within it? You find out afterwards…I mean, I get alerts every day, globally, I read probably 30 culture stories a day. Usually a [inaudible 00:14:45] from a CEO or something happened and they say, “Today, we announced something bad happened, and this was incongruous with our values and behaviors.” The hard work of bringing the right norms, values, and behaviors means that the leadership team has to give incredible constant management attention.
There’s two types of CEOs, the sort of what we work with. Those that know they wanna do this and need all sorts of help to imagine how to do this and they’ll bring us in. There’s others where it’s been ingrained in them from day one. They wouldn’t want my firm’s help because they get the culture joke from the beginning.
But as this fourth Industrial Revolution, to use your phrase, is upon us, the humans that run the firms, the ethical incorporation of what are we coding. And we can’t just have kids with earbuds writing code or outsourcing that and thinking that that normatively is okay. Those choices will have more effect on our humanity than we know. And this is why I think it’s now becoming a board level conversation about ethics. And the compliance teams, by the way, are running all around saying, “Yes. What do we stand for?”
So I think the collision of humanity and machine is right in front of us. And the differentiator for the firms that will survive and thrive will be those that give sustained management attention to a healthy ethical culture in which it’s measured, it’s monitored versus those that just say, “Yeah. You know, culture matters around here. And we’ve got great foosball tables, and free lunch.” That is not culture. The first that I talked about, the former, is the hard part. So, I think this is the question of our time.
Christina: In a sense, it’s great that we’re having these renewed conversations about ethics, and as you point out very nicely that you want to see the c-suite really thinking about how they’re going to demonstrate this and then how that’s gonna filter all the way down into just the way that people are making design choices in the products that they’re building and putting into the market. As you’re doing that, you’re making design choices. And those can have pro ethical implications. And if you don’t understand what that value system is and that culture demands, then you can very easily make the wrong choices.
Daniel: That’s right.
Christian: Yeah. You brought up people with earbuds in their ears. And that immediately made me think of Millennials. That’s maybe or maybe not [crosstalk 00:16:58], although I have earbuds on my ears right now too.
Daniel: Likewise.
Christina: But let’s talk a little bit about that because some of the demands that you see in the new work environment are things like less hierarchy, more familiarity or collegiality in the workplace and interest in being able to engage in ongoing learning. And then we look at the skills, the technology skills. So, you know, we need people that are adaptable and creative and emotionally intelligent and all that sort of stuff. So what in your mind does that mean when you’re helping companies think through the cultural implications of all of this?
Daniel: It’s absolutely huge. I think it’s a zero-sum game for millennial talent in this country. If your company gets a great person and I don’t, you win, I lose. It’s a finite set of people. It’s a big group. But in terms of the knowledge work especially, we’re in the midst of watching the Millennials. I always say, “You know, the baby boomers are still…” We have four generations, by the way, in the workforce, which is no time in the history of this country have we had four. We’re post-millennial now in terms of who’s coming up.
But the idea of racing towards the C-suite right now…of course, there’s baby boomers that hold incredible capital, incredible control, that transfer of wealth is happening before us. Gen X, there’s only a few of us. But we had one Gen X president already. We may or may not see another Gen X president as this goes forward. And then there’s an incredible swath of people who grew up generally very digitally native. To be honest, I love this generation. I’m learning to manage and work within it. And we measure a lot of the culture of what every group wants. Humanity, every time we the question, “What do you want more of in a culture,” we see things like employee engagement, employee fulfillment, more accountability, and employee recognition. By the way, if you’re a baby boomer, I think you want those things. If you’re a Gen X, you want those things.
And when we unpack with groups, when they say employee recognition, I think the Millennials get an incredibly bad rap because the perception is that they want a trophy. Frankly, it was their parents that wanted the trophy. Kids are not gonna self-manufacture a trophy in an award ceremony. So, I find it to be a very false narrative that A, Millennials will not stay with you. I think that’s nonsense. And when we’ve gotten inside of the data of what people say and what they want an organization from recognition, one of the most primal things is feedback, feedback along the lines of, “How am I doing. And do you have a growth plan?” The Millennials crave growth. They’re continuous learners. This is a generation that whatever happens in the next 24 hours, they’re gonna assimilate it and process it. And they’re gonna have a very different normative view of a collective horizontal world that a lot of people…you know, I grew up without the internet so I’m assimilating.
We had a client where they said…they’re asking me for more employee recognition in this. And, “But, Daniel, we do all of these sessions.” And I said, “What do you call the sessions?” So we just looked inside how they labeled the sessions. They didn’t label it feedback. They didn’t label it growth plan. And they said, “Do you think we can change the culture? I said, “People are walking in meetings terrified because they don’t know that the nature of this conversation…” I think they called it the performance planning or whatever it was. And this is showing up in Outlook requests, right, times thousands in an ecosystem. And it’s something as simple as saying, do you use the right language so that when the person is walking in the room realizes, this isn’t a doctor’s visit. And the idea of taking time. By the way, this is… I wrote a book a few years ago about reflective thinking and the fact that it’s suppressed in organizations.
If you don’t take time to step out and to give attention to that individual’s growth plan, especially millennial to give them feedback, and they don’t want just praise, that is a nonsensical idea for their generation. They wanna know how they can grow. They wanna know how they can improve. I think about a lot of things when I think about moving an institution forward, I think about performance evaluation, I think about rewards and recognition, and I think about decision rights very often. The idea that we want flatter organizations is right. But I also know that accountability… I still haven’t seen, maybe Ray Dalio and his guys up in New England have it and maybe Zappos has it, 3M has it. It’s a rare company that can move away from the hierarchy of accountability.
Now, how do we push decision rights down to those teams and live with their failures or live with their successes? I think that can happen. But I have yet to see the pyramid of hierarchy completely be displaced in my mind and changing culture. So, to me, Millenials and what they’re bringing, they’re gonna be 70% of the workforce within three years. And then my son and my daughter’s generation, they’re on the younger side, they’re born digital from the moment that we even imagine them. We don’t know yet. It’s too early to know exactly how they’ll be different. But these ideas of recognition, of collaboration, of seeing and taking time out to give feedback, it sounds so simple. It’s not done in practice.
Christina: I do notice that people want to feel that they have decision rights over areas that they feel they can bring their skills and value and that they are not being micromanaged. I think you’re right. It is sometimes less about the hierarchy but more about, “How can I establish my expertise and authority in my area and feel like my contributions are really being valued by the conversations that I’m having, you know, with the people that I’m working with and the people that I’m responding to, whether they’re my managers or, you know, even my subordinates.”
Let’s talk a little bit about this idea of what we can do with Millennials when it comes to making them feel that they are in a culture that values them as individuals. So, some of the things that we’re seeing along those lines, particularly when it comes to technology, and you touched on this idea of lifelong learning because things are changing so fast. When you’re advising companies about how to create dynamic culture, what are some of the things you suggest that they might want to consider as part, integrating into the culture that they’re building?
Daniel: Well, the first thing we say to the leaders that we work with is, “How are you measuring culture and how much culture data do you have?” And it’s usually met with silence because what they’re measuring…and this is interesting, you get what you measure. Most companies measure what’s called engagement. And so there’ll be the quarterly annual pulse survey, and it’s an engagement survey. We call that climate data. Would I refer this organization to another person? Do I feel recognized by my boss? Reasonable questions, noble in purpose but completely uncorrelated to the norms, values, and behaviors of an institution.
So when I founded THRUUE, I scoured the world. I was pitched by, you can’t imagine how many companies that claim that they could measure it. There are two partners that we have that we work with that brought us two proprietary diagnostics. We have our own diagnostics that we now do. And we bring out data to measure across every group, male versus female, the C-suite versus middle managers. We don’t ask if you’re a millennial on there, but we can tend to sort of figure out if you’re associate, senior associate, you might be a Millennial. And we wanted them to answer questions very specifically. Once we get the data, we don’t run up to the C-suite with a report. That’s why most cultures never and most culture efforts go to nowhere.
What we ask our C-suites to do is to bring us a group of the middle managers. Put as many Millennials in a room with us as you can. Give me a day to let them see in panoramic the data sets. We’re experts, we will teach you how to read it. If you’re missing something that we know is really important, we’ll sort of nudge you to it. But that discovery process of allowing…where CEOs allow the group of middle managers to come in put story against it.
Culture without story is just words on a page or data on a sheet. It’s gonna be, “Well, normatively, you know, things are tough around here. I don’t get enough feedback. The last feedback round looked like this.” We put context around it and then we ask those culture carriers to brief the C-suite. After they do that and they now realize that these results are everyone’s results, getting the leaders of that leadership team to own it and then to allocate resources, time, and attention. Everybody has got a lot of time for, “Let’s look at the last quarters financials, EBIDA versus behavior.”
I will tell you that the great companies that we see, that are striving to move towards the highest performance, the ones that are celebrated the most, give disproportionate attention to the voice of the collective, and you get what you measure. So those who are listening to this podcast who think that engagement is the way to imagine connecting with your group to really understand your culture, you’re worshiping a false god. It’s useful data, but it is not a proxy for the measurement of culture. Bring in the middle managers, let their story be told. It is not from the C-suite to get a report and then ignore it so that nothing happens. Culture happens when you engage the middle. That’s what we’ve learned.
Christina: That gets us to this point of data. So you are collecting data. And we mentioned earlier that technology’s impacting every industry and it’s impacting yours in terms of the kind of data you might collect or the amount of data you might collect or how often you might collect or how you might think about analyzing it. So, help us understand, in your industry, when you are trying to understand…what are you leveraging when you’re looking at this data?
Daniel: Data is worshiped as much as technology. The word that folks are gonna hear more and more about that may not just be in the culture space is this dawn of what’s called people analytics. To me, it’s the awareness that the chief human capital function is sitting on a lot of powerful information, not only the personal information about those folks including salaries, but patterns happen within data sets. Here’s what we’re looking at and we think is the future. We think that it’s gonna be about teams. Teams deliver for institutions. To put out some real specific language, most companies generally try to have a set of KPIs that they’re operating to. By the way, KPIs are poorly done according to most CEOs. They’ve…rarely do KPIs ladder up to this strategy map.
We’ve actually trademarked a phrase called CPIs, Cultural Performance Indicators. So if you’re running a team of 50 people and there’s 7 open roles on that, the open roles are an indication of culture on that team. First of all, the other 23 people are gonna have to do a lot more work. If the turnover on your team was 29% last quarter and the turnover on my team was 6, that might be a cultural performance indicator. Some would say, “Well, that’s a KPI, Daniel, turnover.” Nonsense. It’s a cultural performance indicator because when you make it a KPI, they’re gonna assign the management of that to the human capital folks and say, “What are you doing about turnover?” I think that’s nonsense.
You don’t leave companies, you leave leaders, you leave leaders of teams. That is your company. So we are making these distinctions and we’re following the data sets. It is gonna be, I think, a few more years until we’re able to harmonize and synthesize it. But correlating and connecting these things through teams is what we see is the future of it. I don’t know if that’s disruption. But I think it’s going to make the conversations we have with CEOs, which are always a little bit skeptical. Sometimes, “You know, Daniel, this culture thing…” Well, first, we show we can measure it. Correlating it then to things that matter to them in terms of business outcomes, that’s where the future of this lies. And data and people analytics with the explosion in that space, we’re excited to be a part of it. And we see that as the future.
Christina: So that means that you are thinking about what actually you need to collect outside of the traditional human evaluation kind of process and how often you might recommend doing those collections. And then also there’s…on the backend, there’s sort of like how are you processing all this information because it must be quite a bit of, as you said, information. And you’re looking for patterns or thinking about ways that you can apply some sort of proprietary approach to this. So how hard is that, to find the kind of talent or the kind of technology that you need to continually innovate in doing that?
Daniel: Finding the talent…the people that work with me in THRUUE, I mean, I pinch myself, it’s incredible. When they say, “Wait a minute, you’re gonna teach me and you’re gonna expose me to tools and methodologies that can measure this. I mean, this is heavenly.” Particularly, and we’re going millennial here again, their generation values values. They value norms and behaviors. Finding the talent, yeah, it’s tough.
Washington, D.C. is where we’re based out of. This is zero unemployment for a long, long time for these talented people. But I will tell you, the energy and the connection…and letting them go I had… One of my team members came up to me yesterday and we’re working with a very big group up in Chicago, a big client, and she said, “Look, we’ve made some interesting correlations. We’ve seen some things here and we’ve tied it to a model we built.” I mean, this is heaven on earth. And I said, “Keep going. This is our mission because we’re connecting strategy and culture.” Specifically on measurement, when you ask someone something personal like, “What are your personal values? Not who do you wish to become but who are you?” Incredibly sensitive data. And by the way, we do ask that question when we do diagnostics. Why do I wanna know that?
I wanna know who your employees are before they get in the car. Wouldn’t it be nice culturally, normatively if you could take those values…we see amazing things. People say integrity as, “I’m a person of integrity and accountability.” Humor and fun shows up as one of people’s personal values a lot, openness, collaboration. But then they get to the office and we ask them, “What are the norms, values, and behaviors you observe?” Quantitatively, they don’t know this, but they’re clicking inside the analytics that we do. We’re meta tagging every one of their responses. We’re using even things like a derived model from Maslow’s hierarchy, believe it or not, to help to understand that if the basic needs of your employees aren’t met… Look at the Me Too movement.
The Me Too movement is about the women in this country saying, “My safety is everything.” If we don’t have safety in the workplace, whether you’re on the BP oil rig or you’re working in financial services, there’s nothing. So measuring that and holding that data… We’re very conscious in our company, the houses that we’ve partnered with, the firms we partnered with, those data sets are kept incredibly separate. We do not know and we do not want to know who the names are on there. And by the way, if the sample size becomes statistically invalid or it’s too small a group, client says, “Well, what’s going on in that IT group over there in the corner?” And I say, “I can’t release the data.” Why not? Because they will know that we know. And I don’t want this to be a witch-hunt.
Culture change is about looking at patterns across hundreds of data sets and bringing the truth. We do, by the way, push out the data, not to the CEO. We push the data out to the team leaders. They’ll say to me, “Daniel, were they answering the questions about this tied to the company?” I said, “You are the company.” People don’t leave companies. They leave leaders. To close it all, I mean, it’s joyful work and we’re attracting incredible people who are driving our business in different ways. And the stewardship of the data is gonna get more challenging, but we use cloud-based solutions to make sure that’s secure. And frankly, the personal identifiable information is not of utility to me. The voice of collective groups is highly valuable to me.
Christina: As you said before, the culture vampires will eventually stand out. So if you can shift the collective in a direction that makes sense for everybody, then the rest of the people will self-identify.
Daniel: Self-identify or… I remember Indra who took over as the CEO of PepsiCo, she stepped down recently. I had the pleasure of listening to her talk about a year ago about how she transformed Pepsi into this…you know, I don’t wanna get into the sugar thing. But she basically told her leadership team in the first 90 days, she said, “I’ve only been invited to two retirement parties.” And they said, “That’s great. Your CEO is going to retirement.” She said, “I’d like to be invited to 50 a week.”
And what she was saying was, “There’s great people who helped to build this company and they got us to a certain point. But we need to bring in a new generation of talent.” That’s not an ageist comment she was making, it was a normative value driven comment that she was making. Because she set out, when she did the transformation of Pepsi using norms, values, and behaviors, I don’t think she would have ever called them culture vampires, but sometimes folks have to go. By the way, there’s millions of companies and organizations in this country, you don’t have to stay at the one you’re at forever even though it gets very comfortable to stay there.
Christina: Comfortable for everybody because sometimes the leadership doesn’t wanna go through the discomfort, right? So that’s what goes back to the point we’re making. Let’s talk a little bit about what brought you into this field and how you decided to start and build this business. Have you always had an interest in working in this area of culture and strategy?
Daniel: I kind of consider myself a strategist. Going back many, many years, I’ve always been fascinated by business. If you roll all the way back, I’m a poet. I mean, I studied English literature in my undergraduate days. I love to write. I’m a writer too. If you can write, by the way, you can think.
Christina: Thank you for saying that, by the way, because I tell my students repeatedly, “Please learn to write.”
Daniel: Writing to me is some of my greatest creative joy. But I quickly realized that poetry was not going to be sustainable to me even though it moved my heart. So over time, I got incredibly interested in just thinking about business and industry. I worked for various different organizations. I got an MBA. As the technology wave was hitting, a wonderful company out of Boston named Sapient brought me in. And it was the first time I had ever come into a place where the two CEOs, from the moment you arrived, said that our purpose mattered. This was 1998 when I interviewed. Our purpose matters because these are our values. They used the core values in the interview process with me with one of the vice presidents, who’s still my friend, who used openness, that core value I talked about at the beginning, to give me real-time feedback in an interview because that’s the norm at their firm. I was astounded. Then I said, “Well, wait a minute. Let’s go to Boston and see if this is really real. I mean, this has got to be nonsense.” Fourteen interviews in one day…again, it was a pretty competitive crazy time with the dot-com boom going on.
But I stayed at that company for 13 years because on our best days…and they didn’t always get it right, no one always gets it right. But on our best days, everything we stood for in terms of vision that inspired me, my CEOs were always ahead of me. The norms, values, and behaviors, generally, I worked for great people who held them in their consciousness. Those who couldn’t, selected out. I stayed for quite a while. And then I realized this other piece of the equation, which was I didn’t like having a boss. And you might be an entrepreneur if you don’t like having a boss. My wife, I consider my boss, in a lot of ways. There’s not a lot of feedback there, we just talk about and manage our lives together. But I always butted up against the system and I did not like politics even though the companies I worked for were lower at it if you have a hierarchy at politics.
And then I told my wife, “If I don’t try to do something before the age of 50, my risk profile…” I like taking risks, I’m not afraid of risk. Seven years ago…actually, this month is when I filed the Articles of Incorporation. It’s been the hardest, toughest, most joyful work of my life to build into a company now with 19 employees, a value proposition that is very differentiated. I’m watching big companies catch up to the idea that culture and strategy aren’t separate domains. And it’s hard work. It’s really hard work. But I think I had it in me always. And I go back to that English major piece.
We over specialize in this world. We over focus. We’re teaching kids and glorifying writing code in the fourth and fifth grade. I can’t wait to have my children someday read Shakespeare, to read Lord Byron, to read Thomas Gray, to understand that the world of ideas in terms of the consciousness of literature and language is equally, if not more important in history itself, than just writing code. STEM has sucked the oxygen out of equality in terms of the humanities. If you can’t tell, I’m pretty passionate about this. And I love STEM. And if my children choose to go that route, God bless them. I’m gonna follow it. But you need to have those types of bases because I think it creates curiosity. And that’s probably the ultimate reason why I founded this company.
Christina: Going back to the point about STEM, I mean, we want people to have these skills but a lot of the skills that are on demand, again, going back to creativity, emotional intelligence and…those are skills that you need to develop in some alternative environment that may not just be in a classroom learning to code. I mean, there are other places that you can go to pick up those skills. And it definitely can be in the humanities. You know, it needs to be in learning to work with others in teams. We don’t want to track…you know, higher education is still very siloed. I mean, don’t get me started… Yeah, I think we can do another podcast on that, right? But I think it’s great, you know, I think your background is…it’s very unique and it’s really given you a unique perspective on this idea of the culture and strategy.
Daniel: The other piece of it is my background…you know, all of our backgrounds are incredibly unique. But that curiosity brought me to look at this… And then when you work for a company where the culture is right and you realize that it’s possible to be treated the way that you wish to be treated, which was pretty much what I experienced for most of my time at the previous company. And then I started studying this saying, “Well, what are those habits and why are some companies better than…?” This was sort of the hypothesis I had seven years ago when I founded it, let’s pick on financial services here for a minute.
If you and I had to choose a bank, let’s say that we were in the derivative trading business, is Goldman Sachs’s derivatives fundamentally better than Morgan’s derivatives? No, what’s differentiated and frankly the only differentiation that will stand the test of time for every company in this country and in the world is culture. It’s how the firm behaves when the whole world is watching and when one employee is alone and no one is watching. That is the differentiation of our time. The technology and the product sets will be there, but did I expect to be in this room with you today having this conversation with the expertise I have now in culture and strategy? I probably would have said maybe strategy. I can see exit signs before most people see it. But I never would have known, until I lived in a healthy culture, that bringing that to lift up a strategy, that I think is the calling of our time.
Christina: So when you’re talking to younger people, people who are in college or thinking about a career path for themselves and they’re looking at this industry, they’re may be thinking about doing consulting. And many young people that come out of business schools do go into consulting careers for a few years. What are some of the things that you would recommend they do to really take advantage of that?
Daniel: Listening and hearing the stories. I’ll eventually talk about data analytics because I think…I wish I’d had these tools available to me when you and I were in college, and that is available. But I think understanding and truly digging in on why organizations, some succeed, some fail, and which ones last the test of time, and asking the question before you apply all the analytical rigor that data brings us, what was happening at the top of that organization? Why did this CEO or that CEO? Why did this board? Our boards are awakening. So, you know, you asked me what should they be looking at. It will surprise you that I’m not saying that they should just be figuring out data analytics and yes, let’s learn Tableau and let’s learn visualization tools and God bless them all. But what I’d be asking them is to be incredibly curious about what is happening at the top of an organization, why groups behave in the sets that they do. Do firms stand for something? Be curious about that. I also think that there’s new waves of looking at companies. I go back to Glassdoor. I mean, this is amazing.
We’re at a time now, if you interviewed with my company, the interview questions are live within an hour of what I asked within it. So, there’s something about coming out a firm and thinking about it with curiosity. Yes, get your data analytics skills. And then… I can’t answer your question without extolling the virtues of communication. If you are not capable of sitting at some point after you analyze something and explaining and moving a group forward, then you are not going to be successful in the workforce. You will be less successful. I’m not saying those people have less utility, but at some point, you’re gonna be called on to say what is your truth. And so communicating it in written word, by the way, which is…just don’t get me started. It’s an abomination how we’re communicating there. Texting and all these things dehumanize us. You know, they’re helpful but they’re not ways to truly move a mission forward.
So, to those who are the students out there, learn to communicate. Get filmed and have someone videotape you of connection. Learn to do it. You and I are doing this conversation. Look each other in the eye and be present for another. Read Stephen Covey’s, “7 Habits of Highly Effective People.” Realize that you are what you listen to, not just what you say. So I’d bring the communications angle on top of it because it’s the communicators that I think are gonna be the change agents in these companies moving forward. And if you can only do it one way or…and I’m not talking about introversion versus extroversion, I’m talking about telling your truth when the moment comes. That’s what great leaders do.
Christina: We wanted to touch on analytics a little bit, right? So tell me what you’re seeing and what you want to do with that capability.
Daniel: We are working right now on a pretty amazing platform that we’re in our minimally viable product stage of, several MVPs that we’re building where we are using the ability to take different data sets and to connect business outcomes to cultural norms, KPIs and CPIs, which we talked about earlier. This has not been done before. And we do know that there’s other companies that certainly have talented people that are analytically looking at it. But part of the roadmap of my company is to…and we’re gonna be going to do a round of outside capital, I’ve funded this company with my wife organically for seven years. But the vision on this one is a little bit bigger than…
Christina: Yeah, good. It’s awesome.
Daniel: And it’s necessary because bringing data to our clients and then frankly to the larger world, our mission is to try to impact. We wanna impact 10 million American workers. And right now, we’re at the hundreds of thousands of American workers we have touched through the work we’ve been blessed to do with the C-Suites that we get to work with. This technology that we are thinking into, experimenting with, and we’re building a product roadmap around, will exploit the best of culture measurement, will exploit datasets that have been sitting latent, will connect it to our own proprietary ways to get a quick pulse from a group of what’s happening, will look and synthesize around a team, and will help organizations to correlate and connect culture and strategy in a way that they haven’t done before. So, we are incredibly excited about it. It’s going to be challenging.
My partner who runs the company day to day, Jame Cofran, he had lots of these platforms that were a part of his previous life. We’re even in the process of figuring out who will help to animate these ideas. So, we’re on a new edge here. And I wouldn’t have had the idea of this seven years ago. But in the middle of last year, we had some big, big moments that reflection gave us, that our clients are now saying, “Go more. Tell us more.” And when you’re in and you’re a CCO or even a CEO leader, KPIs matter. But it’s frankly the CPIs that are gonna make or break your success. Connecting those for the first time ever, that’s what we’re working on.
Christina: I see this as such a valuable tool for the technology people in these companies so they can think about how the implications of… Everybody’s saying, “I’m gonna bring in big data” AI, blockchain, I mean, you name it. Like 80, 90% of these companies are looking to figure out how to integrate these technologies but without having this framework as part of this integration, it sounds to me like pretty much every technology person in a company should be thinking about using this to contextualize these plans that they wanna make, to move their company forward.
Daniel: True. I mean, there’s a tech component to all this, and there’s data around us. But I remind all of my leaders… I’ll ask a leadership team, “When was the last time you all had a conversation about the values of this firm?” If the answer was crickets, that’s a problem. When was the last time someone invoked a core value to tie it to a huge decision-making moment that had a consequence for the firm? And the answer is sometimes or… In great companies having conversation around norms, values, and behaviors where it’s more intuitive, they’re the ones where every day the C-suite is thinking, “Is this aligned with the social contract that the firm believes we stand for?” So, yes, I’m gonna keep some balance in my answer to your question.
I think these amazing data sets that are out there and connecting them and seeing them and measuring culture is such joyful work and it brings actionable insights. But it’s the dogged conversations and giving management attention…a CEO or leader is what they pay attention to. If you don’t have this even in your stack of a day, a month, or week where you’re pulling back to say, “How are we doing? What’s happening team by team?” So bringing data in that we think will help. But frankly, culture is about connection and it’s a contact sport where two people are talking, a group of people is talking, and we’re constantly asking, “Are we living in to the desired culture that we want?” And to something you said very much earlier. It’s not static. This is changing. As, you know, two companies get smashed together in a merger, which happens all the time, that culture is gone. There’s a new culture emerging. And to not think that you’re gonna pay attention to that on a sustained basis and still get EBIDA, I think is hallucination.
Christina: Maybe we can end on this idea that, going back to Socrates, like how do we help each other and ourselves feel like we’re living a good life because we live so much of it at work. And we want to feel that we are living a good life ethically and we’re helping each other do that as well.
Daniel: I’m a fan of reading the articles from people who are at the latest stages of their life talking about what they regret looking backwards at, what they wish they had done more of. And there’s real literature and data on that now, of understanding that. And what you see over and over is that people would say, “I wish I had taken more risk.” They also would say, “I wish that I had spent more time in a place that gave me more meaning.”
When we have meaning in our lives, which is why Simon Sinek and his wonderful company and everything he stands for, getting and declaring your why, your purpose, which is foundational in culture and strategy. It’s not a strategy object, it’s a cultural object. And then living that out, this is the joy. This is what makes work…because you and I have to do this for… My son is 13 and I said, “I just want to know someday…” the baseball career, we’ll see how far he goes with it. “Someday, you get to go and then you do that every day for like 50 years, man.” I want for him and I’d want for everyone to pursue places where the firm stands for something, the why is clear, the vision is clear. And that’s on the shoulders of our CEOs. It’s their job to define the vision and then giving sustained attention to it. That changes the world.
Christina: Well, Daniel, thank you so much for helping us understand the why, and why the why is really the important part of all of this. This is a great conversation. I’m looking forward to your book coming out. Can you tell us real quickly what the…?
Daniel: A little teaser. I’ve been partnering with an incredible gentleman named Jerry Zimmerman and we have a book coming out next year on looking at one of the most atypical places of culture you could imagine. We’ve been studying organized crime and understanding why those groups…and beyond the violence, there is incredible norms, values, and behaviors and processes that are underway there that have made them outlast GE, outlast Wells Fargo, Facebook, Google, you name it. And I never imagined in my life that I would be studying it. But stay tuned, maybe we’ll have another conversation about what you can learn from institutions that when you get past the nefarious, there’s still something happening that might be worthy of others thinking about.
Christina: It sounds like a great future conversation. Thanks again for being here in The Inc. Tank, Daniel.
Daniel: My pleasure.
Christina: It’s great. And I will tell everyone to check out THRUUE and learn more about what you’re doing. You guys have another podcast that you do. You invite people on. You talk to them from time to time…
Daniel: “Culture Gap.”
Christina: …called the “Culture Gap.” Yeah. So everybody check that out. All right.
Daniel: Thank you so much.
Christina: Even though technology is changing rapidly, the need to develop a solid sustainable culture hasn’t become any less important. Focusing on culture creates long term organizational success. Thanks to Daniel Forrester for talking with me today. Until next time, this is Christina Elson in The Inc. Tank.
This episode of The Inc. Tank would not be possible without:
Christina Elson, Host and Executive Producer
Stevi Calandra, Executive Producer
Podcast Village Studios, Production and Editing
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The Inc. Tank logo was designed by Kasia Burns
This podcast is brought to you by The Ed Snider Center for Enterprise & Markets and the Kauffman Foundation.
