Michael: Hi there and welcome to HaBO Village Podcast. I'm Michael Redman.
Kathryn: I'm Kathryn Redman.
Michael: This is the podcast where we talk about how helping leaders build passion and provision companies with more profit, more joy so that it actually has more meaning to you. What a concept.
Kathryn: What a concept. Work that we love. Work that's meaningful.
Michael: This whole entire podcast, we just talk about all the different factors of what that looks like. Today we're going to talk about culture and how to evaluate your culture because culture can be a big fuzzy term, can't it?
Kathryn: It certainly can.
Michael: Meaning fuzzy, meaning it's kind of an abstract word. We all go, "Duh, we know what culture is." But at the same time when we talk about culture, you can have 10 different people in the room, 10 different ideas when you ask them and it can cause people to go off in different ways.
Michael: We created an assessment. We actually took a bunch of different work from different places out there, and just said, "Okay, there's some great work that's already been done. Let's tweak it a little bit, adjust it for our needs." We've used it as a culture assessment for some of our clients when they're assessing, "Okay, how are they doing? How does the company running well?" We have figured out how to do it actually at a smaller level too. Small companies can actually start to get an idea and assess their culture.
Kathryn: Why do you want a baseline assessment of your culture, Michael?
Michael: I don't. I have … I don’t want to [crosstalk 00:01:25]
Kathryn: Why would you want to take the effort and energy to figure out what your employees are doing and thinking?
Michael: Right? Why would you want to do that? Why would you want to do that?
Kathryn: Why would you want to do that?
Michael: You want to do that because the culture is an indicator and also a fertilizer for helping your company thrive. We're not just talking about giving people quality of life, we're talking about when people are thriving, when your employees are thriving, when your team's thriving, then that actually means that they're able to bring their best self to work. They're engaged, and the statistics all say that the higher the engagement, when it's matched with people who are properly skilled, actually increases all the numbers in a company.
Michael: It may cost a little bit of money, things like that on the front end, but it increases employee retention, which is … we know that it's a minimum of one and a half times at the annual salary to get a new person in a position and bring them up to speed. It actually increases trust. Two factors with trust are speed and cost, and when speed is increased, cost is decreased in trust and therefore trust goes up.
Michael: You have an ability to increase the speed at which work is done. You decrease the cost of what it costs because it doesn't take you as long to get things done. Your employee's problem solve better, and everybody believes that what they're doing is engaged or connected, and so they actually have an ability to be more creative. Then, if they have to talk to clients or customers, wow, they're even ... They're happy.
Michael: Everyone who buys something, we all like to talk to happy employees of whoever we're working with. When I go to Best Buy, I don't like cranky people. When I talk to my lawyer, I don't like it when his staff is cranky and not friendly. I want them to be happy. There's just so many wins at the culture level of just relationships, having a passion, more meaningful time at work, and then also the provision or the financial side of work. It's just the numbers prove it over and over again.
Kathryn: Remember, if you do remember, if you've been with us a long time, you will have heard at one point or another that part of what was kind of a driving, oh no, aha moment for us in really wanting to go after. How do we help companies become passion and provision companies is this statistic that says that 74% of American workers are actively disengaged at work.
Kathryn: That means that they're basically sleepwalking through the day. How effective is somebody who you're paying to come to work every day and yet they're just kind of doing the minimum? They're barely there. They're just waiting till 5:00 or for their break or whatever else. There's all of that, or if there's tension at work and people aren't on each other's backs and backbiting and, yeah. All of that stuff absolutely impacts your ability to thrive as a company-
Kathryn: … and your ability as an owner to actually enjoy your workplace. That is why we care about this stuff [crosstalk 00:04:40]
Michael: Those are critical things. It does. Your money … your company is bleeding money if you have folks that are disengaged like that. Your goal is to figure that out. Well, one of the things that we realized was how do you assess that? How do I know? Like, "Ah, it seems …"
Kathryn: Yeah. You might know intuitively.
Michael: I think it sucks more. I think it's pretty good. Are you in touch with your emotions? Are you in touch with your company? Is your opinion mostly right or are you in left field? Is there something that's going to blindside you? Is there a blind spot you have in this area? We thought, "Okay, let's start looking for an assessment for ourselves and for our customers so that we can help them and all of us continued to go, 'Okay, I want to build a better passion provision company.'"
Michael: If we can figure out how to get people more engaged, there must be, if we're measuring engagement, there must be certain key factors. The folks out at Gallup actually did a lot of research along with a lot of other folks, and so we started borrowing some of their assessments and different things like that that they publish and looking at some of those things. For years, we've been doing it with our employees with the basic five questions.
Michael: We've talked about on other podcasts here, but we started implementing it into an assessment for our teams. Here's what we did, right? Get your pencil out, get a piece of paper out if you can, if you're driving, don't do this, and just listen. This is what we have done so far. This is an iterative …
Kathryn: Iterative. Yeah. That's a hard word.
Michael: Words are hard.
Kathryn: Words are hard.
Michael: Iterative process that we've been going through, right?
Kathryn: Yeah. We're tweaking and adjusting and sometimes making small adjustments depending on the kind of organization that we're helping to assess. But essentially, we have created a survey that helps you kind of identify three things. The first one is what your strengths and weaknesses are in your organizational culture. Where are you hitting it out of the park and where are you really not?
Kathryn: The second is what's your baseline like? Where are you now so that you have something to measure against in the future? If you know where you're weak and you're going after specific objectives to try and shore that up, it's really helpful to have a baseline so you know if you've actually improved.
Michael: That's huge. If you're going to have an initiative moving forward and you say, "I'm committed to this as an organization, as a leader from a cultural standpoint, like relational standpoint, you want to provide a great place for people to work and you want to have that natural place of we care about people, but you're trying to make sure you're not bleeding money. You need to have a baseline that sets you forward so you can make those good decisions and know what to do.
Kathryn: Absolutely. Then, the third is really to give you what the key areas are to focus on to grow and improve. You might think there's issues in seven places, but what are the ones that are going to give you the most bang for your buck? What's the place to really focus? These kinds of assessments really help you see kind of what the glaring challenges are, and then help you prioritize what your objectives can be to move forward.
Michael: What we've done is we have kind of combined a couple of different factors. Actually, we combine usually three different assessment tools used for different types of things for market research, to customer research, to actual questions that are tied to-
Kathryn: Employee satisfaction.
Michael: Yeah. Employee satisfaction. Thank you very much.
Kathryn: Three different tools blended together to make this all happen.
Michael: The first tool we use is 9, 10, 11. There's one that you have to ask yourself, "Are you paying people a fair amount?" That's the first question. Are they getting a reasonable wage? That is the first thing we talk about in employee engagement, but if they're in your culture, if you don't pay well, that really messes with people if they can't afford to live in the culture or wherever you in the community you have or they live in, then that's going to be really difficult.
Michael: Once you can say, yes, we pay a fair wage, fair market wage and it's reasonable enough for people to live a basic life in your community, you can say, check. We don't put that on our quiz because we don't want to infuse that process. We're assuming that the employers that we're coaching and working with are asking that and we asked them that.
Michael: Here's what we do. We ask 11 questions, and then instead of a yes or no, we asked them on a scale of 1 to 10, and the second thing we combine is the NPS score, which is the net promoter score that Bain & Company created years ago, wrote a couple of books on. What we like more than anything else is it's a really good scoring system.
Michael: The way that works is you ask a question like, I know what is expected of me at work. That's number one. You say, "On a scale of 1 to 10, 1 being totally disagree, 10 being absolutely 100% agree, how would you rate that?" Then, you say, "Again, I know what is expected of me at work." We'll hand this out in the survey on an online survey when we're doing a culture audit.
Michael: Then, we also do half of a [inaudible 00:09:52] because we're a small company, we do it on a regular basis in our annual reviews. When they score, wherever they do it, we don't just say, nines and we add up all our nines or eights, and we add up all our eights. The way NPS scores is evaluated is if somebody gives you a 9 or a 10, you give it a plus 1 score. If they give you a seven or an eight, you give it a zero, and then six or below, you give it a minus one, and then when all is said and done, there's a calculation you use that you subtract basically the negatives from the positives and you have the score and that works out.
Michael: It's usually based on a percentage so there's a little bit of math involved, but ultimately, it allows us to give an organization an assessment, and that assessment then allows you to have a score of anywhere from minus 100 to positive 100 with zero in the middle.
Kathryn: If I'm understanding you correctly, what you're saying, Michael, is that we create an assessment that gives you an NPS, a net promoter score across 11 categories of employee engagement.
Michael: You're absolutely correct and you did a phenomenal job summarizing it.
Kathryn: It's iterative. It could be 12 when we do this again sometimes so it's all good.
Michael: It could be. Today it's 11.
Kathryn: It's 11.
Michael: Then, so we can combine those two, the Gallup, the NPS, and then we have some open-ended stuff that we evaluate on what we call an ask method, deep-dive survey methodology that we use to kind of get some … all of its qualitative at some sense. But when we start using the scores, there's a little bit of quantitative numbers involved so we try and build in quantitative and qualitative assessment.
Michael: Open-ended stuff that answers, ask some very specific questions and usually, it's what are you most frustrated with? Then, once we give an NPS score, we also asked them, what's the reason for your score because we're looking for something? What is it you like, especially when you're there?
Michael: There's a couple of different ways we can combine this, but when we ask an open-ended score, what are you frustrated with or concerned about? Then, we ask them their engagement questions with the NPS score on it. Now we have a number to assess individuals. We have a number to assess the whole organization as an average and we have some really good written information to help us see what the big rocks are also that we can work on.
Michael: Once you help me simplify this so not everybody out there is going, "Michael, I have no idea what you're talking about."
Kathryn: Yes. What we want to do is give you the exact questions so you know kind of what those are and you can look these up online, but it would be, we're here so we might as well tell you. The open-ended question, which is really when we're doing it, it really is a market research approach where you're asking what is called the single most important question? That really is as it comes to working in our company, put your company in there.
Kathryn: What is your single biggest challenge, frustration or concern? Then, it's open-ended because what you want is you want your employees to answer that question in their own words. You don't want to give them a dropdown list. You don't want to suggest things. What you want is to hear just raw from them. What is it that you're frustrated with? What is it that you really struggle with?
Kathryn: That kind of question really does allow us to kind of see the souls of your employees and gives you in their words, what it is that they're struggling with. We'll come back to how you evaluate that in a minute. But you do that and then you go into the NPS score questions, right? Which is an adaptation of the employee survey. What those are is Michael mentioned the first one is I know what is expected of me at work on a scale of 1 to 10. Second is I have the materials and equipment to do my work right.
Michael: Think about these questions now as she's reading them because there's a lot of insight into what makes a really vital, thriving, engaged culture.
Michael: What was that second one again?
Kathryn: The second one was I have the materials and equipment to do my work right. Scale of 1 to 10. Number three, at work I have the opportunity to do what I do best every day.
Michael: Doesn't have to be all day long. It's just a piece of my day I get to do what I do best.
Kathryn: Yeah. At least part of my day is something that I'm super good at. Number four, in the last seven days I have received recognition or praise for doing good work. 1 to 10, agree or disagree. Number five, my supervisor or someone at work cares about me as a person. Amazing how much your culture and your organizational stuff. It's really our people able to be relationally connected. Number six, someone at work encourages my development.
Kathryn: Number seven, at work my opinions count. Number eight, the mission or purpose of my company, agency, organization, whatever, makes me feel like my job is important. Yeah. Just ask us about how much we care about vision and mission and-
Michael: Absolutely critical.
Kathryn: … future and purpose and how excited we were that Gallop recognizes that as an important piece of the puzzle. Number nine, my coworkers, fellow employees are committed to doing quality work. Number 10, I have a good friend at work. Number 11, in the last 6 months someone has talked to me about my progress.
Kathryn: Those are the 11 questions, and then the ultimate sort of NPS score question, which is kind of a traditional one. It follows on and it's on a scale of 1 to 10, how likely are you to recommend this as a place to work? Okay, so this is kind of the makeup of the survey. We've got this single most important question. What is the thing that you're most challenged, frustrated or concerned about as it comes to working in this organization? The second section is this sort of set of employee satisfaction questions. Then, the third is the NPS piece. Okay? Which is ultimately on a scale of 1 to 10, how likely would you be to recommend this as a great place to work?
Michael: Now, one of you might be, somebody out there might be thinking, okay, wait a minute. I've got a company big enough though, and I've got different segments with people in different locations that work on different things. We've covered that. We've done that well. When you're using software to process all this, like a good survey software, we use some very specific ones, but a very good survey software would allow you to segment so you can say, "Okay, first off, what department do you work in?"
Michael: Then, at the end of the day, you're able to separate out, when you're doing some evaluations of this in Excel or something like that, you can say, "Okay, well, let's just score each individual channel or department of our company." Especially if there's enough people in it and enough, we've done it as small as six in a department, and while that may seem like not enough data, it actually does tell you if all six people are miserable and they've privately answered this thing online and they're not happy, you've got problems, and you may already know you have problems, but you'll start to see what some of those problems are and how you can potentially work forward and build a plan.
Michael: So, just know that you can do segmentations and set it up so that you can score each individual department, and then you can score, add them all together and score the company together.
Kathryn: Let's talk about anonymity versus non-anonymity. When we're doing these surveys, one of the questions you might automatically be thinking is, "Yeah, you know what? If I asked my employees what they're frustrated, challenged or concerned about, and they have to put their name on it, they're not going to tell me the truth."
Kathryn: What do we do about that?
Michael: Well, there's a couple of different ways to approach that that we've dealt with. One is as an outside agency organization, we've done that ourselves, and to have somebody outside of your company that you're working with, it's helping you do it, can give it a little bit more legitimacy and also can, helps people feel like, "Okay, if I really rail on something, my comment may get back to leadership, but it's not going to be fingered to me."
Michael: Because what we'll do is we'll often, we have come to the conclusion that the people have to put their name down. A couple of different reasons. One, we need to track and make sure all your employees have done it and theoretically nobody has done it multiple times. Somebody could lie and put an email in for somebody else, but usually, I'm not worried about that kind of stuff.
Michael: The first thing is just that using software and using an external company. The other thing is we want you as an organization to continue to build trust in your organization. That's what a passion and provision company has. It has a lot of trust within the organization between it's a partnership between leadership and the employees, and with the customers. That's a natural aspect of passion and provision because if you don't have trust, you won't be achieving passion and provision.
Michael: You might get a lot of money if you hustle people, but eventually, there's no longevity in that, and so you all understand that. The other part is our goal is not to be anonymous. Our goal is to build enough trust as leaders that when we're asking questions … Now, we have to learn to ask them in a way and in a context that doesn't put the employee in more danger or fear. You don't just say, "Okay, in front of everybody, all right, what do you hate the most? Let's have a big roundabout session."
Kathryn: Let's have a hate-fest.
Michael: But when you can build a positive relationship with every employee in their evaluation, you can start doing this so that's one of the things that I don't worry about, if you don't feel like you have enough trust to do this and run it yourself and have everybody ask, then you can run it completely anonymously. But we like it when people put their names to it because that also allows us to follow up and correct things and deal with things, but if you don't have a culture full of enough trust yet, run it completely anonymously or run an outside company that will take the data and take everybody's names off and assess it.
Kathryn: Yeah, and you know what? Both are viable. If you're concerned that your employees won't be honest, then, by all means, run it anonymously, at least, the first time.
Michael: Here's the other thing. People are wondering, "Am I going to get the right score?" That's one of the reasons you deal with this anonymous thing. Like if somebody can tell me the truth, here's why we score and use the NPS scoring model is if somebody … We don't tell people we do this. We don't tell employees we usually do this. We tell leadership. If somebody is thinking, "I'm not happy here. I'll give a seven. I mean, I'm okay. I'm frustrated at times but I'll give a seven or I'll give an eight. That's pretty good."
Michael: Well, that's why a zero an eight are zero in your scoring because it helps take away the problem. If somebody scores you a seven or an eight on I know what's expected of me at work, they're not saying absolutely 100% but they may be hedging their bet and they don't want to make you feel bad so there's kind of this like, are they being honest? Well, they're sort of being honest, but the way the scores, there's enough research behind the way this scoring works that it takes out some of those, "I'm not quite being honest perspectives."
Kathryn: Yeah. You can look online and really kind of wrap your brain around what the NPS score is. But just to give it some simplicity, basically, if somebody answers between one and six, you give them a minus one. Seven and eight is a zero. Then, 9 and 10 is a plus 1. Then, you aggregate all the scores together, which gives you, and Michael mentioned, you can score as low as a negative 100 which is super, super sad. Like lots of like, "Yeah, you got troubles."
Kathryn: You can score as high as a positive 100 though I'm not sure anybody ever has. Somewhere in that range is where you end up finding your ultimate NPS.
Michael: Well, and if you think about it, you're going, "What's good, what's not on that score? When did you get the final score?" Anything over zero is good. Anything over 50% really good-
Kathryn: Really good.
Michael: Anything over 70 is excellent. Like it's high end. For instance, there's a list of really high-end amazing brands that are in the Fortune 100 and one of them is Southwest Airlines. Great reputation with their customers and everything else. They have a 66.
Kathryn: Yeah. That is purely on that one question, right? How likely are you to recommend Southwest Airlines as a place to work?
Michael: Actually, it's how much are you willing to recommend Southwest Airlines to somebody else? They don't use it for their employee engagement-
Kathryn: Oh, they use it for their customers.
Michael: They use it for their customers.
Kathryn: True. Sorry about that.
Michael: But it gives you an idea of when a company that's so well-liked by their customers, ask them the NPS question then, and they get a 66. That's world-class service. World-class brand. We just did it with an organization recently that has a 47 and they're struggling with their own issues and challenges and everything else, and yet, we had 251 responses in that survey and we were all actually really impressed because of the feedback that came back in the open-ended parts was actually really encouraging.
Michael: But the negative, the what are you frustrated with? That came back with some really good, honest stuff that people were frustrated with and they were willing to say, which gave us a window of perception to say, "Oh, we can work on those things and if we work on those top three things, we're going to really make a difference in the company. We're going to really make a difference in how the culture is and how much it produces."
Kathryn: Well, and the cool part is, is once you've done the survey and you've kind of called the answers and dealt with the data, you can basically go back to your organization, your employees, and you can look at them and say, "Okay, we ran the survey, we appreciate you. Thank you for giving us so much great feedback. These are the top three themes, the top three things that we saw in the data and this is what we're planning to do about them."
Kathryn: That kind of interaction, that kind of feedback loop is amazing because then as you do those things and you project forward six months and you set a date on the calendar, you can then, again, engage them and say, "Okay, this is what we said we were going to do. This is what we've done." Depending on how your organization is put together, you might want to run the survey again. Right? Just begin to see, are you shifting the needle because you had a baseline to work from?
Michael: Yeah. Absolutely. As we kind of wrap up because, okay, we just … Wow. We've blown through most of the episode today and there's a lot of information here. This is one of those episodes that has a lot of data, a lot of details. I tried to shove those two words together and it may be worth listening again, but when we summarize it, we're saying you want to assess the culture of your company, your organization, at least, once a year.
Michael: We do that in our smaller company through the relationships we built, the trust we've built, and we do it in our employee evaluations. Our annual ones. That said, if your company is starting to grow and you want to assess, but you're feeling like you can't do that there yet or there's not enough safety or trust there yet, but you want to know because you want to grow, you want to have a realistic baseline assessment, then you need to do some kind of survey for your staff and we're going to say that you're going to want to use 11 questions that we use that are from Gallop on engagement culture.
Michael: Two, you're going to ask them to answer these questions, not in yes or no, but on a scale of 1 to 10, and then you're going to use the NPS scoring system to score those so you have an idea of what's going on. Then, what you're going to do after that is you're going to ask two open-ended questions. One is, what's the main reason for your score? Give us a score for 1 to 10 on why if you would recommend this place to friends or family or somebody else as a place to work, and then what's the answer for that score?
Kathryn: The reason you gave that answer.
Michael: Yeah. Then, we're going to open, what's your biggest challenge, frustration or concern with this? Another open-ended. We're going to have two open-ended. We're going to have 11 questions of engagement. One overall question about, would they recommend the place to work? Then, we administered that and go through the data.
Michael: What it does is it gives you a baseline. It gives you an idea that not only is … something you can look at, but all of these questions have been tested. All of these questions have been evaluated and shown to correlate to being successful in the company, being successful profitably and having a culture that's meaningful and enjoyable and that gives you fulfillment at the end of the day.
Michael: There's nothing worse than having a culture that just kind of is sucking the life out of you and everyone else that frustrates you on a regular basis, and you're like going, "This is not meaningful. This is not fulfilling." Then, you're like, "Okay, well, I just got to squeeze as much blood out of this turnip as possible so I can, at least, get some money and enjoy my weekends or focus on whatever's next in the future."
Michael: Unfortunately, a lot of entrepreneurs get stuck in that corner. We don't want that for you. We want you to have a passion provision company and with more profit and more joy, more fulfillment, and that's what this podcast is about. If this is helpful today, I hope it was helpful. A lot of details, a lot of maybe dry stuff. Hopefully, it was interesting.
Kathryn: Well, and if you have questions, don't hesitate to shoot, make a comment or ask a question. We would love to try and clarify [crosstalk 00:28:00]
Michael: Actually, so you'll go to Habovillage.com/podcast and look up this podcast on creating an assessment for your culture. Then, with that, go ahead and leave your comments there or send us an email at email@example.com or Habovillage.com either one will get to us and we would love to hear that. Also, hit subscribe in iTunes. We would love that. Thank you very much for listening to us today and we will see you on the next episode. I'm Michael Redman.
Kathryn: I'm Kathryn Redman.
Michael: We'll talk to you later. Bye-bye.