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.