How Culture Impacts Business

Episode 898: How Culture Impacts Business, with John Waid

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How culture impacts business, an insightful podcast with John Waid. It’s time to learn about the many ways of how culture impacts business.

Learn from John about how culture impacts business and you might learn some golden nuggets, which you can utilize for your own benefit as well. John Waid has thirty years of sales and sales leadership experience in Fortune 500 companies and twelve years of senior consulting experience in the learning and development field. John earned his MBA in International Business from a top program and is fluent in three languages which has allowed him to work in Europe, North, Central and South America. He started his own firm, C3—Corporate Culture Consulting, to work with leaders and their companies on their cultures.

What you will learn from this episode about how culture impacts business:

Why the key to growing a business lies in paying attention to both your people and your business and how John’s parents taught him this lesson early on
How Chick-Fil-A has built a powerful employee-focused culture that has helped them become a dominant force in the fast-food market
Why “culture” is defined by your employees and behaviors, and why the success of Delta Airlines is a great example of how culture impacts business
How a great culture raises employee enthusiasm, which in turn can create brand loyalty and increase profits
How a Harvard study revealed that a focus on culture offers 3x more profit per employee, 4x faster growth, and 50% better retention
Key lessons from John’s book, Reinventing Ralph: A Little Story For Salespeople About Culture-Driven Selling, about having a noble purpose, a clear vision, and three values
Why Southwest Airlines is an excellent example of a company that has developed unique values
How clear, strong values can help you more effectively hire and onboard new team members and why it is important to train your team on your values
Why company leadership needs to live their culture and values and why employees will emulate leadership

Additional resources:

Website: www.c3culture.com
Reinventing Ralph by John Waid: https://amzn.to/2Llj3oN
Learn more about how culture impacts business by getting in touch with Corporate Culture Consulting

Additional Resources:

Sell With Authority by Drew McLellan and Stephen Woessner: https://amzn.to/39y7x13
Predictive ROI Free Resource Library: https://predictiveroi.com/resources/
Listen to this podcast with Paul Spiegelman about how culture impacts business and how to measure its ROI

How Culture Impacts Business: Full Episode Transcript

Get ready to find your recipe for success from America’s top business owners here at Onward Nation with your host, Stephen Woessner.

Good morning. I’m Stephen Woessner, CEO of Predictive ROI and your host for Onward Nation, where I interview today’s top business owners so we can learn their recipe for success, how they built, and how they scaled their business. In fact, my team at Predictive ROI, well, we recently rebuilt our free resources section. I know I’ve been talking about this for a while now because I want you to.

If you’ve already come to PredictiveROI.com/Resources, awesome. If you haven’t, I strongly encourage you to do so because we continue to add new stuff, new helpful, practical and tactical guides for everything from search engine optimization, how to use LinkedIn to generate leads, and other success strategies that we are continuously compiling from the brilliant insights shared by our guests.

It’s all free. Just go to PredictiveROI.com/Resources, whatever. Your request will send it right to your inbox.

How Culture Impacts Business: John Waid’s Introduction

Before we welcome today’s very special guest, John Waid. Let me share some additional context about why I was super excited, actually, over the moon. Excited that John said yes and Henry de Vries, if you’re listening, thank you very much for connecting John and I so we can have this great conversation.

Very, very thankful for that. So here’s why Onward Nation. That I think this is just going to be a very, very helpful conversation. First, John is the founder and CEO of a company called Corporate Culture Consulting. So now this firm works with leaders in their companies, specifically on culture, which is a very, very hot topic, as we’re all aware.

But as we’re thinking about building and scaling our business, moving onward to that next level, maybe we have a handful of employees and we’re looking to add a handful more. We have several dozen employees, and we’re looking to add several dozen more, whatever the scaling opportunity is. Where that rubber meets the road. The key ingredient to that overall recipe is culture.

The success or failure, the profitability of a company. And John is going to share some of those data points with you today. It relies heavily on culture. Does it rely on process systems, workflows, all of that pricing, features, advantages, benefits, all of that? Of course it does. And culture is a very key component. He’s got over 30 years of experience in sales and sales leadership working in fortune 500 companies.

12 years of experience as a senior consultant in that learning and development field. And he has also written a book. Right. So he’s also the author of the book entitled Reinventing Ralph A Little Story About a Big Idea And Selling. So with all of that. Without further ado, welcome to Onward Nation, John.

How Culture Impacts Business: John’s Path and Journey

Thanks for having me. Oh my gosh, thank you for saying yes again.

And Henry, again, thank you for making the wonderful introduction, in case you’re listening, my friend. But John, this is going to be a great, great conversation. Very, very helpful for Onward Nation business owners. But before we dive into that, you know, I shared a few highlights, but they’re only highlights. There’s so much more to your path, your journey.

So take us behind the curtain and tell us more about your path. And then we’ll dive in with the questions. Okay. Fantastic. Well, I love your enthusiasm. And I especially love the positivity of because that’s what great leaders are very positive leaders. So, I’ll start or I’ll start my story. I grew up in Mexico City.

My dad was an executive with PepsiCo and was with them in Mexico City for 22 years. And he was an excellent businessman. I would say an excellent manager, very much into the details. He was a finance guy, went to Harvard and studied at UVA. So he ran the business at PepsiCo, and there his boss was actually very much of a people person, what I would call a leader.

And so I admired both of them because they both brought skill sets and behaviors that were really great. My mom, on the other hand, was a consummate entertainer. She was a gourmet chef and she loved people. And we had a house full of people all the time. We lived next to the Danish embassy. And the Danish ambassador was over having cocktails at our house just about every day.

And the ambassadors of the United States and even the president of Mexico visited our house several times. Pele was at our house. If you’re familiar with Pele, one of the best soccer players. So my mom was very much into the people part, my dad very much into the business part. And so I take you back to that time because they were both really good at those two.

And what I feel today after, you know, I’m 53 years old, I’ve realized that you need both. You need to pay attention to people. You need to pay attention to the business. If you want to grow your business, the people are going to be key to growing it. And then if you don’t run it like a business, you know, then the people, you’re not going to have a good business either.

So you need both. So that’s and over my lifetime I’ve seen both of the combinations of those two. I worked at Frito-Lay for a long time, and that inspired me to write the book, Reinventing Ralph, which is a story about my experiences at Frito-Lay. And it actually is a fable that takes place at a potato chip company.

How Culture Impacts Business: An Introduction to The Importance of Culture in Business

And Ralph goes through a lot of issues in his life and until finally he discovers that nice combination of what I call, culture combined with structure and strategy. And I’ll explain that a little bit later in the podcast. Well, I absolutely want to dive into your book, because I know that there are golden nuggets galore in there for Onward Nation business owners that are again, going to be very helpful to them.

Before we do that, though, I wonder if you’ll share some data points here, just as some additional context, some additional foundation about not just the importance of culture, because I can’t imagine any business owner thinking, you know, I want to have a bad culture, right? I mean, like on the surface, we theoretically all want to have good cultures, right?

Whether what, whether we actually build one or not. I mean, that’s to be debated. But probably on the surface everybody would agree. Yeah. I want to have a good culture, but take us inside some of the where the rubber meets the road, some of the data points, some of the financial outcomes, like what you and I were talking about in the green room before we started recording about like Chick-fil-A, about in and out and in the financial performance of companies who are really doing this.

Right. Because I think that’s going to set some stage for the golden Nuggets out of your book.

How Culture Impacts Business: Companies That Put People First Before Profits

Okay. So the book starts with the idea of culture eats strategy for breakfast. And the book is based on a sales person having a lot of consultants. And as you look at your business, probably what’s helped you grow your business is a focus on strategies.

And make sure that you get a lot of people that own their own businesses are very task oriented, so they like to get things done. The issue is that some of us, including myself, suffer from maybe not paying as much attention to the people. So let’s look at a company that pays attention to people before profits.

So they put people first. So Chick-fil-A, if you’re familiar with that operation, operates in a lot of the different states in the country, they used to be only in malls and now they’ve got standalone stores. So about three years ago, Chick-fil-A was out selling Kentucky Fried Chicken. They don’t pay much attention to the people.

Chick-fil-A, on the other hand, pays a lot of attention to their employees. They’re really good people. They train them really, really well. They hold them accountable. And three years ago, they were producing 3 million, Kentucky Fried Chicken was selling a million in per store sales, right? Per store sales on average.

How Culture Impacts Business: You Start With Culture First

Okay. So let me just give that back to you. Make sure I’m tracking with 100%. So I think I am hearing you say that the typical ordinary KFC is doing about $1 million a year in total revenue, not profit, but total revenue in that one store. Right, exactly. Okay. And then a comparable Chick-Fil-A that is going to be doing three times that, $3 million in total revenue, not net profit, but $3 million in total revenue.

So $1 million versus $3 million, right. That was in 2015. Okay. So let’s fast forward to 2019. And I just spoke with somebody at Chick-fil-A. They’re now out selling Kentucky Fried by 5 to 1. Holy bananas 5 to 1. So $5 million in one store versus $1 million in Kentucky Fried Chicken. Right. So they went from 3 to 5 and KFC pretty much stayed the same.

Wow. Okay. So in your opinion why that is really huge. So in my opinion you start with culture. And that’s going to be the key message that I’ll talk about during this entire podcast. And if you’re familiar with Simon Sinek, it’s the same thing as starting with why you start with leadership. You start with culture.

You start with why, and then you go to how, and then you go to what. So you start with culture, then you go to structure, and then you go to strategy. And the issue is that most of us, myself included, will start with strategy, then go to structure and then go to culture. And if you can make that mental switch to start with culture, to start with why you will want to start with people.

You will have more profits. So by focusing on people, you’re going to have more profits. By focusing on profits, you’re going to hurt the people and have less profits. Wow. Okay. So again, that’s interesting because, like when you said strategy, structure, culture, that’s where I would have gone to, even though you know it, Predictive ROI were very focused on culture, but maybe not enough.

And so again, maybe, you know, every business owner might be a well-intended business owner. We might be making mistakes. There’s gaps in our knowledge, unintentionally not not because anybody, again is walking in saying, gosh, I want to have a bad culture today, but there’s just things we’re missing because we just don’t know. There are knowledge gaps, right? Right.

How Culture Impacts Business: Understanding What Culture Really Means

So the idea here is, you know, is to understand what culture is and so let me go through what culture is on a very basic level, because I think that there’s not an understanding of what culture is. I think it’s a very esoteric subject that a lot of people don’t have their hands around. So a lot of leaders will say, you know, we’re going to work on culture and they don’t know what culture is necessarily.

And there’s, you know, it’s no fault of their own that there’s a lot of literature out there. And so I’m going to define it in an easy to understand way. So, culture is basically about you, your people or employees and how they behave. That’s it. So if they behave well they’ve got good values and good behaviors.

You’re going to be running a good culture. So it’s all about people and how they behave. That’s your culture. So let me tell a story about Delta Airlines real quick. So they were in bankruptcy. They were doing terribly. And I fly Delta a lot. I live in Atlanta and the employees were just absolutely disrespectful to the customers.

I went on one of the flights and I said, May I please sit up? And in first class I fly a lot. I’m a diamond with Delta. And she said, oh, sure, absolutely not. It’s Thanksgiving Day. I’ve got to be working and I can’t deal with people like you. I said, well, I’m not going to, you know, we’ll, I just want to sit in the seat so I can lay down because I got to work tomorrow on Thanksgiving Day in Brazil.

And I said, if you could help me. Say, you just sit in the back of the plane and you’ll like it. I said, oh my God, happy Thanksgiving, Mrs. Delta. So, that really, you know, got me angry. And I said, man, I am never flying this airline again. Unfortunately, I live in Atlanta. They own a monopoly here.

So it’s hard to avoid flying Delta. So I started to fly Delta as little as possible. And I get on and I see this gentleman, his name is Richard Anderson. And he starts talking about the employees at Delta and how they’re working on values and on behaviors. And I go, oh, this is a culture, man.

And I said, oh, and I wish I’d bought stock in the airline. The second I determine that, because this guy is going to focus on culture here, the stock doubled or tripled in the time, you know, from the bankruptcy. And I said, Richard Anderson became one of my heroes as a leader because he kept focusing on the employees.

Every safety video was about the employees. He made the safety videos funny. He, you know, and I started to see the attitude of all the employees that got better and better and better. And they were winning awards like crazy. They became one of the most admired companies in the world. And they, on the front of their headquarters in Atlanta, I saw a great sign which made me think, this is a culture driven company.

It said, this is where the world’s most admired employees work. Wow. And I said, that’s cool, that’s cool. How proud would you be to work at a company where they put that sign up in front? This is where the most admired employees work in the world. And then I started to see the trucks and the baggage containers in the airport.

And they started to say our culture fuels our success. And I said, oh my God, this is a culture. This is a culture driven leader. This is somebody who used this culture to catapult their company. This is somebody who’s not a culture of fault or a vulture of culture that, you know, that those scraps, you know, the culture scraps that because they do a bad job with the people.

So this is not a culture of culture. This is a catapult of culture. So I said, man, this guy is really great. And Delta kept growing and growing and growing and and the and the and the people kept getting friendlier and friendlier. And I was like, man, this is awesome. Now where I went from hating Delta now to loving Delta, I said, oh my God, I’m going to fly this every single time.

Every single time, you know? And I just became a huge fan. Go ahead. Well, I was just going to say that, I sort of not necessarily had a similar experience, but, because you’ve obviously dissected it in and studied it as a culture example.

How Culture Impacts Business: Focusing on Culture Will Provide Better Profits

As you were sharing that I thought to myself, okay, that makes sense as to why I just recently had the experience that I had, where it had probably been 3 or 4 years since I had flown Delta, because I’m an American guy, you know, as far as connections and that kind of stuff, you know, you kind of have to sort of give your flights everything to like one particular airline if you want points and miles and all of that. Right.

So, anyway, for me, it’s American, but I had to get to Atlanta a couple months ago, from Minneapolis one evening. The only way I was going to get there was to buy a Delta flight, and it came back on American. But the only way I was going to get there was on Delta.

And again, I hadn’t been on Delta in probably four years. And so I’m in Minneapolis and I’m getting ready and I like it, and I notice the professionalism of the flight crew. I mean, the way that everybody has dressed, the way that their uniforms are pressed, the way that they’re wearing, you know, hats and matching accessories and clothes and everything, which like, you know, back from my days in the service, in the military, like I pay attention to that kind of stuff.

Right? So I see that and I’m like, oh my gosh. Almost like, you know, an international flight crew, right? That is like really high end airlines. And I’m like, this is a Delta flight. Right. And it just impressed me to know. And I thought, oh my gosh, this airline has really made some serious improvements.

So based on what you just shared with me, there were a lot of moments of pride in the culture and the appearance and the touchpoints with the customer, and obviously that has contributed to profitability, like what you’re talking about. Right. There’s the most profitable airline, flying today. So if you focus on culture you’re going to make more money.

That’s amazing. Period. That’s amazing. So Delta as an example, Southwest Airlines has always been a culture driven company. And obviously southwest is loved by the, you know, not only the employees, also the customers. And that’s what you’ll find is that if you run a culture driven company, if you focus on culture as a catapult to success, you will see your employees really happy to work there.

Your retention will go way up, your revenues will go way up, and so will your profits. So it’s and there was a Harvard study done where it’s, it was three times more profit per employee, four times faster growth and 50% better retention if you focus on culture. So those are just some of the numbers behind focusing on culture.

How Culture Impacts Business: Have a Noble Purpose

Love it. Okay. So that I think really sets the stage for some of the big nuggets, out of your book. So onward again, John’s book is entitled Reinventing Ralph, a little story about a big idea and selling. So if you would, John, give us some of the big nuggets that you think would be really helpful for onward business owners to take out of this conversation as it relates to your book.

Okay, so here’s the deal. No matter what type of company you’re running, you can run a culture driven company if you do the following things. Number one is you need to have a transcendent or noble purpose. So if your purpose today is to make as much money as possible, that’s not transcendent and that’s not noble.

So money will come as a result of a transcendent purpose. So let me give you an example of a company that we work with and what their purpose is. So this is a medical device company that we work with and their purpose. We’ve helped them simplify it. And it’s, we protect lives by reducing the risk of infection.

So they’re an infection prevention. And they protect lives by reducing the risk of infection. So their purpose is to protect lives by reducing the risk of infection. So start with a purpose that outlines, you know why you exist, right? Why you’re in business and more of a transcendent or noble way. So because that’s going to help you, to inspire you and your people of why you come to work every day, Chick-fil-A’s got their purpose written on a rock right outside their headquarters.

And its purpose is basically to serve, to serve, you know, to serve their employees, to serve their customers. And because it’s a religious organization on top of being they also say to serve God. So whether you’re more religious or less religious, you need a noble purpose. So the noble purpose is key. So as part of a culture driven company, you need to work on a noble purpose.

How Culture Impacts Business: Making Sure the Values Are Unique to Your Business

The next thing you want to work on is something that’s more dependent on yourself. So the vision of the company would be something like, if we take this example, it would be something like, I am or we are the leaders in the infection prevention space. So our purpose is to protect lives by reducing the risk of infection.

The vision is, we are the leaders in the infection prevention space. So that’s more determined by, you know, what you want to get to in ten years as a company. So I usually say about ten years. The visions for Japanese companies are like 100 years. I would say we’re being good in the US by saying ten. Sometimes we’re working for 1 or 6 months.

So, try to do ten for your business, okay? If you’ve already made it, which the Onward Nation people have already made it, you’ll be in business in ten years, especially if you pay attention to culture. So the next thing you want to work on, you got your purpose, you got your vision. Now you want three values.

And the reason three is important, because a lot of companies have either too few values or too many values and values, you need to make sure that you think about these and that the values are unique to your business. And what do I mean by unique? If you go, and look at, you know, Southwest Airlines, they didn’t just say, you know, customer service is one of their values.

They actually went much further. And if you look at Southwest Airlines, one of their slogans is love. You know, love. And, as they were developing their values, they said, you know, we want to be fun loving and loving, spelled with loving. That’s a unique value because if you get on a Southwest Airlines flight, you’ll see that they’re fun loving.

As a matter of fact, sometimes they’ll wrap the safety instructions. They’ll, you know, greet you at the door. I remember being late for the flight to southwest, and they. Mr. John, are you Mr. John? I said, yes, I am. So he goes, Welcome to Southwest Airlines. We’re so happy to see you. I said, I’m so happy your doors are still open.

And they were so polite, it was a fun loving environment. They were all smiling. They really lived that value of fun loving. Another one is warrior spirit. You know, we go above and beyond to deliver, you know, to deliver your bags or to deliver you as a person to the destination. So, look for three unique values, that is the church you’re going to live by in your company, for instance, the medical device company, Respectful Integrity, high performance teams.

How Culture Impacts Business: Make Sure Everyone in The Company Knows What Your Values Are

You know, those are some of the values that they stand for. So as you go to see if you’re going to onboard people as you hire, you say, is this person going to be respectful? Is this person fun loving? If you’re Southwest Airlines, are they going to work in high performance teams? Can I see them working in teams with each other?

If you’re the medical device company, if you’re southwest, do I see that warrior spirit of making sure that no matter what happens that you’ve got a high spirit, a warrior spirit of getting things done. So, select three values, maximum three. If you’ve got four or 5 or 10, cut it down to the three. Most important, the next thing you want to do is train your people on what that purpose is, what the vision is, and what the values are.

Just make sure that everybody knows that if you ever go on Southwest Airlines and you want to check what I’m talking about, ask any of the flight attendants what their values are, what their purposes, and they’ll be able to tell you all of them every single employee at Delta, at Southwest Airlines will be able to tell you what their values are, what their purpose is, and what the vision of the company is.

And that’s what you want to get to you, no matter what size of your business. You want to make sure everybody knows them. And the most important thing of all this, of everything we’ve talked about, is then you have to live these as a leader. The leader lives the culture. The number one responsibility of a leader is the culture.

It’s the purpose and the values and being positive. Those are the three major roles of a leader. So if you’re the leader of your company and you don’t live the culture, you don’t need most of the leaders you know might know the culture. They don’t live it necessarily, and you gotta live it. If you live it and people see it, they’ll emulate you.

And, you know, just like Delta Airlines, that they dress up nicely. Their CEO dresses up nicely. You know, if we dress more professional, you know, it means we’re more serious. If it means that we’re more serious, they’re going to take us more seriously. So companies run better when people dress better. That’s one of the sayings of some of the leaders that I’ve talked to.

How Culture Impacts Business: Culture Eats Strategy for Breakfast

So, you know, to your point, you know, dress well, be a leader, you know, emulate the culture. So and then make sure everybody’s living your culture and make sure that every single person in your company is showing up every day, living the culture, and that you’re hiring for culture, that you’re promoting culture, and that sometimes you gotta move and and let people go.

And if you’re doing that, it should be also for culture. Remember that culture eats strategy for breakfast. And if you don’t have your culture right, your structure and your strategy are going to really, really, be in jeopardy because I can change the strategy as a leader if I don’t have buy-in for my people, I have nothing.

And all these companies that are trying to implement SAP or, you know, some of the other systems that they’re trying to put into the companies, if you don’t work on the culture part, on the people part, first, you’re going to if you involve people up front, cost you a dollar for you, launch your initiative $100, and after you’ve launched it, it’ll cost you 10,000.

That’s just a monetary cost that doesn’t include the emotional and agony that you’re going to have. So, make sure that if you’re trying to do lean or you’re trying to do, you know, implement any kind of technology that you work on the culture part first, because that’s going to help you to integrate your technology.

How Culture Impacts Business: A Recap on the Five Points

Well, what I find fascinating in the five points, and I know that we’re quickly running out of time here, but when you share the five points, you know, start with a noble purpose and then second what’s the vision of the company and then and the third, what are the three unique values. And the fourth is, you know, training your team on purpose, vision, values, and the fifth being living the values.

And in, obviously from leadership throughout the entire organization live the values and and are just kind of so happened in my notes here as I wrote those five down and I was tracking along with you, number five coincidentally landed right on the page next to your initial definition of culture, which was your people and employees and how they behave.

And so when I look at that, I think, well, that’s interesting that live your values is right next to the definition about behavior, living and behavior, because we have to be congruent with the behavior or living other values. Otherwise it’s really easy to sniff out a fake. And it’s just lip service, isn’t it? It is, it is.

And so I estimate only about 2 to 3% of companies are what we call culture driven. They use the catapult of culture to get better. So there’s a lot of room there. 97% of companies can work on this to get to the level of Chick-Fil-A. So I encourage McDonald’s, Kentucky Fried Chicken to call us.

That’s awesome. But, well, this has been a great, great conversation. I know we covered a lot, but before we go, before we close out and say goodbye, anything you think we might have missed? Any final advice that you want to share? And then, John, please do tell us the best way to connect with you.

How Culture Impacts Business: Final Advice and How to Connect with John

Okay, so the message of this whole conversation starts with culture. Start with culture. Start with leadership. Start with culture then go to the how, then go to the what. So start with culture and the best way to get a hold of us is through our website and it’s www.c3culture.com.

So www.c3culture.com. Okay Onward Nation, no matter how many notes you took or how often you go back and listen to John’s words of wisdom, which I sure hope that you do. The key is to take all the data points, all the strategy, all the tactics, all the steps one through five.

Take those and apply them into your business right away and accelerate your results. And John, we all have the same 86,400 seconds today. And again, I am grateful that you said yes to come on to the show, to be our mentor, to be our guide, to help us build and scale our businesses to that next level. Thank you so much my friend. Just like they said Chick-fil-A, it’s my pleasure.

This episode is complete, so head over to OnwardNation.com for show notes and more food to fuel your ambition. Continue to find your recipe for success here at Onward Nation.

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