The only way that culture continues to grow as an organization grows, is if everyone views it as something that they personally own and have personal responsibility for.
From we're for good studios and simple modern Welcome to scaling for good with Mike Beckham, unlimited podcast series, giving you the playbook to start, build, scale and give generously. And today's episode we're diving into culture, simple, modern, started with culture and people before building its vision and ideation. And that's where our journey begins today.
Hey, everyone, this is Mike Beckham, co founder and CEO of simple modern, today we're going to be talking about culture, and how do you create the type of culture that you want to be a part of, and that you can be proud of. And I want to start with a story when we started simple modern, our very first sales channel was Amazon. And we started to sell water bottles on there in March of 2016, very quickly grew. And by the end of 2017, we were selling over a million units a year on on Amazon. And so we were very dependent on that sales channel, it was kind of like all the proverbial eggs were in that basket at that time. And so as we approached Christmas of 2017, Black Friday, like that week, is usually that kind of kickoff to the shopping period for the holidays. And we were really excited, we bought more inventory, you know, than than the previous year. And we were ready to have a huge holiday. And I remember waking up on that Monday morning and checking my phone, and Amazon had a little flag in the app. And it said that our account had been suspended. And sure enough, we hadn't had any sales that day. And apparently, some algorithm at Amazon had determined that our account was somehow in violation of their standards, and had completely paused our account. When 90 something percent of your revenue is coming from one place. If that stops, then your your your company kind of is in trouble. And so I remember the experience of the next 48 hours as being quite harrowing, as we were kind of working frantically against the clock. This was, by the way, the week of Black Friday, this was Monday morning, a black friday week. So we literally had five days until Black Friday. And we were frantically working to get the account turned back on. And there were only two or three of us that really had worked within the Amazon system, one of my co founders who led that aspect of the business, he was on vacation. And the other person that could help me was in New York, he had tickets to go see Hamilton with the original cast, this is 2017. And he chose to not go to Hamilton to sit on his laptop and help me try and fix these clerical things that Amazon wanted. And so everybody in the office went home for the day, because they didn't really know how to help. And I'm working on this. And then, you know, I get a ping on slack from one of my co workers at like six o'clock, Hey, I just got home. Is there a way that I can help? You know, 15 minutes later, another of my co workers said, Hey, I just got home, you know, can I help? By the time I got to be about 830, every single person on our team had joined in virtually into this Amazon all nighter. And I remember it being just an incredible experience, incredibly bad at the time. But incredible in retrospect, because it was such a culture defining moment of seeing the entire team come together to fix a problem. And obviously, the story has a happy ending, we were able to get the account reinstated. And the company has continued to grow and thrive since then. But that moment was illustrative of us building a culture where everybody was invested and committed to working together. So that's what good culture and action looks like where people don't ask, is it my job? Or do I have to but instead say how can I help? And we're going to talk about culture today? And how do you create the type of culture that you want to be a part of, and that you can be proud of? So to start, let's talk about what is culture and culture is really three things. It's the values and norms of an organization. So what are the things that that organization values the most? And, you know, we don't tend to think about values as a hierarchy. But the reality is that we all have value hierarchies. Even though we have a lot of things that we value, there is still a hierarchy. And in any organization, there's a hierarchy of the things that they value. So first parts, values and norms. The second part is incentives. And that is, what are the things that are encouraged or discouraged through promotions, through raises through affirmation through recognition, the organization is constantly going to be making choices about what it communicates to its people based on the incentives. One of the things that really helped me to understand this idea is this This idea of text and subtext in every organization, there is the text, which is kind of like, you know, what's written on the value statement, or what said from up front. And then there's the subtext, which is what people really hear. And we've all been in a situation before where we heard one thing from the leader upfront on stage, and thought, Man, that is very different than what I'm experiencing, or what I've seen played out. And that's the subtext. And it turns out that what people really listened to is the subtext. It's what they observed to be true. And the actions and behaviors of people. And incentives are really powerful, because they speak louder than words, they tell people what is really valued in an organization. So what's rewarded what's promoted? What do people get fired? For? These are the type of things that really tell people about the culture? And then finally, what does the organization or team make sacrifices for every time we're on a team, there's going to be the need to make sacrifices. And the pressing question isn't where you have to make sacrifices, but what are the things that you're going to be willing to make sacrifices for, and that, again, illustrates a lot about the values and the purpose and the mission of the team, and kind of bleeds out into the culture. So these are the things that create the environment, or the culture, that we work in an organization or on our teams. So let's spend a minute talking about what is good culture. The first thing I think I'd say is that good cultures balance, two things hold to things intention. And these aren't easy to hold in tension. The first is that they want an environment of challenge. effective teams, teams that outperform teams that are successful, that are excellent, they challenge the members of the team. And they're constantly calling people up and pushing them to do more than they thought they could do by themselves. But simultaneously, there's this really high value for the individual, and consideration of where they're at and their development. And the fact that sometimes what we don't need is we don't need challenge, but we need support. So a tool that that's really helpful for me that we use internally is called the support challenge matrix. But what we use it to teach is the principle that for every, every manager in the company, every person that's leading someone else, that what our people need from us is a combination of support and challenge. And when they only get one or the other, it's imbalanced, and it has all these negative ramifications on the culture. The second is, organizations need strong values that are communicated regularly. People need repetition, they hate redundancy. So what this looks like for a leader, or for any any person on team is how do we consistently communicate what is important to us, and this kind of hierarchy of values within our organization, but not in a way where people just tune it out over time, one of the things with our team that I've learned is, I can have this internal desire to kind of, say something new or novel, but that's actually counterproductive. My team doesn't need me to be giving new concepts every time I get up, they need me to be hitting the same principles over and over and over again, but constantly challenging myself to find new ways to illustrate the same true principles about our culture. organizations that have strong values that are regularly expressed, it gets converted into the day to day actions of people within the organization. So what you're looking to do is create organizations where the values are, yeah, they're codified. And they should be codified in a way where people can see them regularly. And they're expressed regularly by the leadership, but you're constantly finding ways to communicate them that give them more depth and meaning to your people. And then the next thing I would say is that what hamstrings a lot of organizations is that there is kind of a dual citizenship, a dual class where certain leaders or certain people are exempt to the the values or the norms of the organization. And this is like an absolute culture killer. We've all been environments where, you know, so and so doesn't actually follow the same rules as everybody else, because he's the CEO son, or because, you know, whatever. And when we see that, what we see is hypocrisy. And it fundamentally damages the foundation of healthy culture, because it creates this idea that some people don't have to play by the same rules, and some people get treated differently. So in really healthy cultures, what you see is you see the leadership, actually setting the example that they help define these norms and these values of the organization by actually living them out. And that gives a lot of confidence to people in the organization because they're being modeled by the people that they're following. The next point that I would make is unhealthy cultures. It's owned by everyone at simple modern, I think we're at 80 employees now. And so there was a time when simple quantum was like Like three or four people. And a lot of the experience that people had when they thought about simple modern came from direct interactions with me. But that's not the case anymore. At this point, probably less than 1% of all the interpersonal reaction interactions that people have with simple modern are directly with me, so much of the culture and how people experience the culture is now actually defined by people other than me, as the leader, it's my responsibility to model and to live out these values. But if I'm doing that, and others aren't, it still isn't going to work. It only works if we all own it together. So one of the things that we do with everybody that joins the team will have like a one hour session where we go through our mission, our vision and our values. And then at the end, I very specifically tell them two things. The first is that this is the equivalent of me handing them the baton, that even though they're new to the organization, they now need to own this with me, if they are going to be able to benefit from the culture that they joined to be a part of, at this point, we have people join the company all the time, because they want to be a part of the culture. But I have to really make it clear to them that the only reason the culture is the way it is, and the only way it'll stay this way, is if you take personal responsibility for helping continue to make it a priority. The second thing I'll tell them and this is this is a big thing for me is that there are a lot of things in life that we see that look pretty good from maybe 1000 feet away. And as you get 100 feet away, they don't look quite so good. And when you're 10 feet away, they don't look good at all. Unfortunately, we become cynical, because we've seen so many examples of that. So my litmus test for our culture is really simplistic. When somebody hits about 90 days in the organization, I'll always ask them, How has your experience compared to your expectation, because for me, it's the way of judging as they're get as they got closer to the organization, did the culture look better or worse than they expected it to. And you know, we've been fortunate to to build the type of culture where I have never gotten any response other than it's been better than I expected. And that's when we would all hope we'd all hope for the you know, the organizations and teams, we lead cultures we build, that the closer people got to it that the more they're a part of it, the more positively they would view it. But the only way that happens is if every single person in the organization really makes it a priority, to make it excellent. Finally, what you're trying to do is create an environment where everybody thrives. And where everybody grows, there are so many different ways that we derive quality of life. And if you think about most jobs, really the kind of the extent of their benefits package is they offer financial compensation and you know, maybe some kind of tangental financial things like like insurance. But the reality is that what we need as compensation from our job is a lot bigger than just a paycheck, when we have an environment where we're able to have autonomy. And we're we're able to grow we're we're invested in, you know, from a professional perspective. And we're developed, where we have relationships with our co workers and other people on our team that are meaningful, where we're able to be a part of something that we feel like is worthwhile and makes a difference, where the reputation of our team or organization or company is a positive one. These are all things that derive a ton of quality of life for us, and actually ended up being even more significant, I think, than financial compensation. One of the things I do is I teach college students and I can tell you that when I talked to college students today, some of these non financial considerations are at the very top of their list, and they're willing to take jobs that pay less in order to have more of those things. Well, all those things come with healthy culture and with strong culture. So why does this matter to an organization? Why? Why does good culture matter over the long run? The first is that I think building something that's sustainable, and excellent for an extended period of time, totally depends on culture. There have been a lot of examples, I think of companies that have grown really rapidly are being very financially successful for a short period of time, where it was built on a market strategy or a particular tactic. But the reality is, over time, culture outweighs strategy and tactics when it comes to the long term health of an organization. In contrast, organizations with really healthy culture become stronger and stronger over time. They don't experience turnover. And so their competitive advantages and the things that they're good at, they just get better at them over time. Because it's an environment where people are growing and people are flourishing. It's easy to find the future leaders and organizations that have healthy culture. It's easy to hold on to your most talented people. It's easy to understand why you're going to work each day because So, culture is helping providing the framework for those things, if you're the leader of an organization, or if you lead people at all, and I would actually kind of to make a point here, say, if you're listening to this almost assuredly, you have a leadership role in some aspect of your life, whether it is within your family unit, or it's at work, or it's in something outside of work, that you have a leadership role somewhere. way that we need to be deliberate here is that we're prioritizing, thinking about how we're cultivating culture, and in the organizations or teams that were a part of, and how are we helping apply these principles, so that we're, we're fostering the thriving that comes with healthy culture. So as we're turning this into life application, here's a few questions that you can ask yourself first, what is your value hierarchy? If you're leading an organization or group of people? Do you have clarity about the values that you think are the most important? Because if you don't have clarity, there's no way that an organization you lead will be able to have clarity? Second, are you modeling that to other people? It's one thing to have clarity about what we'd like to see happen. But are you making the choices, the sacrifices that are necessary to really model that to other people, people hate? Do as I say, not as I do. Be a leader who's actually living out the things that you want to see happen? Are you creating an environment where there's a good balance of support and challenge where people both feel called up, but they also feel like you're giving them the tools and the support and the encouragement that they need to get there? And then finally, are you cultivating environments where everyone feels entrusted with and empowered to help own and lead the culture, because without that, it'll fall apart with scale. The only way that culture continues to grow as an organization grows, is if everyone views it as something that they personally own and have personal responsibility for.
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Hey, welcome back. It's John and Becky from we're for good. And we're really excited to get Mike on the other end of this and kind of throw some questions at you. Because we love culture, like we talk about it all the time on our own podcast, because I'm just so fascinated with how the culture inside of an organization can really attract the type of people that you want to be on your team. And from a nonprofit perspective, the type of donors that you would align with. And so you hit on a lot of this today. And I would love to go into just practically speaking, how do you get started building a healthy culture?
Yeah, absolutely. Well, I think you start with the belief that culture is something that you can intentionally shape and being intentional instead of accidental. So the first recommendation I'd give is to with the leadership of an organization is to actually tangibly lay out concretely, what are we about, you know, why does this organization exist? Where are we trying to go? And what are the primary values that we have, and going through that process is great, because number one, you can find points of, you know, misalignment, even within the leadership of an organization and it's going to be really difficult to create an aligned culture, if all of your leadership isn't on the same page. Also, once you have that, it gives kind of a central document that you can point everyone towards and that you can kind of use as the as the North Star now, applying that is a different thing, but at least getting on pay on paper, hey aspirationally this is what we want to be about and what we're aiming for, is really helpful. One of the things you can do once you have that clearly laid out is you can really recruit around it. So we lead with culture with lead with values in there. recruitment process over the last year, it's been very difficult at times to to recruit to hire. This is a question I get asked all the all the time by other CEOs, how are you? How are you dealing with, you know, looking for talent and things like that. And for us, we're extremely deliberate about communicating to people, Hey, this is who we are, we're unique, we're different. But this is kind of what you're getting. And then connected to that is what are your priorities when you hire for us, we think about two things character competency in that order. These this is what we hire for. So we're looking for missional alignment, we're looking for alignment with the values, then we're looking for competency. Another thing is you have to model it, you know, we are mimetic, there's a lot of research on this, that the way that we learn is primarily through watching. And so as the leader, you are responsible for giving hands and feet to that and showing people this is what it looks like, this is what it looks like having a commitment to excellence or to growth mindset, you have to model it as a leader. And then finally, you just have to be repetitive with it.
I don't know about you, John, but I feel like relief and an exhale, because I feel like you know, we're in a startup. And we feel like we're telling our story over and over and over again. But I do think that there is resonance and what you're saying. Because when you start to espouse that over and over, people grab on to it, and the trickle effect can be compounded and really beautiful way. And but I also think about the converse of that. I want to know, what are some indicators that you've seen, when you can tell that a culture is going south?
Well, one thing I would say that's, that's pretty obvious, but what we're saying is that nobody wants to be a part of a culture that is terrible, right, that no one sets out to do this. But we know that these things happen. I think when answering this question, it's easier to to not delineate between good culture and bad culture. And just say there's a spectrum. And every culture can get more healthy and to look for like, what are the areas where wherever you are, you know, whether you're talking about your family culture, or you're talking about, you know, a team, that you're a part of how does that get more healthy? What are red flags, what are things that you want to be proactive in addressing? For me, the number one red flag in any culture is entitlement, that when people that are a part of a team, an organization, a unit start to feel like they are owed, or they deserve things, then that thought process allows them to engage in behaviors, actions, attitudes, that are obviously detrimental to the group and to the environment. But they justify it because of what they feel like they've earned or they deserve. Pat Riley once described entitlement as the disease of me, and I think that you could really use that idea that what breaks culture is the disease of me. And so we talk about internally, the way that we talk about fighting entitlement is is really straightforward. And it's this idea of grace. So if you think about your life, there have been things in your life that have happened that were better than they should have been right, where you what you deserved, and what you got, you just got better than you deserve. And then there been things in your life that were the opposite, like what you really should have gotten and what you got, you got worse. And so grace is when you get better than what you deserved. And entitlement is when you feel like you got less than what you deserved or what was fair. So I would say first and foremost, every leader should start with themselves. Where is entitlement, you know, in your life, where is that expressing itself? Organizationally, I think another thing is you can see over protective cultures, these are cultures, typically where there's not enough challenge evident when you create an overly protective culture. What it does is it scares away your top performers, the people that are really the most motivated by excellence. And by doing their best, they typically are scared off. The opposite of that is when you have an over challenged culture, where all of the talk is about hitting your numbers. There's not all of the necessary development and investment in the people that needs to happen in order to achieve those things. If you get into a culture like that you just burn out, you know, like even the best people will just burn themselves up. And so both of them are unhealthy. They're just unhealthy in very different ways. Probably the last one I would mention is culture goes sideways, when there's just different expectations of different people. You'll see this where leaders are held to a different standard, you know, where the sales team is kind of held to a different standard than the operations side of the business. When different groups are treated differently, especially when some groups are not expected to uphold the mission and the values the same as everybody else. It's incredibly destructive. for building a team and building the kind of culture that you want,
okay, I got to just share this story because we saw this yesterday play out, you talk about the end of the day we are in production for this incredible podcast series we are, we're packing up where we're kind of it's after five, we're here in Oklahoma, which means it's about 150 degrees in the summer outside, we walk out of the building with all of our gear, pretty much everyone has left. And there's Mike is gonna embarrass you, there's Mike picking weeds out of the front flower beds. And I'm like, here's a leader who is taking care of every part of this organization. He's taking care of the people. He's here pulling weeds out front. And I just, I want to share that with people who are listening, because nobody saw that none of your staff saw that we saw that. But to me, it's just an output of the way that you show up and a generosity of spirit that everything is taken care of. And you're the last one out the door. And I just want to commend you, my friend, because to me, your culture is an expression of you. It's an expression of every employee that walks out here, it's an expression of this product and this brand. And it's down to the level of weed that is outside. And I just think it's fantastic.
You know, I don't know how to comment on my landscaping. But I will, I will say this, I will say fundamentally, I think there's a misconception about leadership. And the misconception is that leadership is being different. And I don't think that's what people really want out of their leader, I don't think they want somebody that they can't relate with. I think people are most inspired by leaders that they feel like, are similar to them, but they just have a different perspective that they can learn from. And so you know, I make really intentional decisions in a lot of areas of my life that are built around, I want to be relatable. And I want to be like the people that I work with. And I want to truly be a part of the team, the moment that I start thinking I'm above taking out the trash, something is wrong, because what that is, is a form of entitlement. I've been here long enough that I shouldn't have to do that anymore. That's one of my litmus tests is, do I ask anything of other people that I'm not willing to do myself? And do I feel like internally do I feel like I'm above anything? And and when I do, it's like, that's a red flag. And that's something that I have to address. And it impairs my ability to lead others. When I'm when I'm thinking that way.
Mike, I don't know how you can round this out and do better because this is an episode that everybody can take something from everybody can implement, whether they're looking at their family unit, or their business or how they want to show up. But down to the last minute here. What's your mic drop moment from the culture episode,
really straightforward. Healthy culture is an environment that helps everybody to thrive. You know, if culture is like a garden, then every plant thrives in a well taken care of, you know, context and environment, you know, I do, I will actually do a lot of landscaping. And people will say you have a green thumb, I don't have a green thumb. You know, the reality is you just have to learn plants, and you have to learn the environment that they thrive in. And when you put them in the environment, that they're naturally built to thrive and then they thrive. And that's what culture is when people are put in an environment that will naturally produce growth. That's what they do. They they grow towards that. And that's what healthy culture is all about. It's about creating environments where all the people in your team and organism or organization or family or whatever, can thrive and being deliberate and intentional, instead of accidental
thanks for tuning in to scaling for good, brought to you by simple modern and We Are For Good studios. If you like what you've heard, leave a review, share with your colleagues or tweet Mike at Mike Beckham, SM. We're your host Becky Endicott and John McCoy. And this series was edited and produced by Julie confer and a special thanks to Chris Boyle and Erica Randall from the simple modern team who helped bring the series to life. Thanks for being here.
