Did you know that up to 86% of employees are currently disengaged? Yet, by getting 1 more fully engaged day per months businesses can see a 3% increase in their revenue. How can you drive more engagement? According to our guest, Shane Wallace, a big piece of that puzzle is improving emotional intelligence. Learn tangible steps to audit and improve your workplace's emotional intelligence on this episode.
The start of a new year is the perfect time to check-in on your financial status and goals. On this episode, we sit down with Chartered Professional Accountants, Matthew Peterson and Curtis Gabinet, to discuss what small business owners need to know. From dividends and wages, to minimizing taxes, this episode is packed with their top advice.
Shane Wallace is the founder and Chief Engagement Officer with CultureSmith Inc., Western Canada’s first and only practice 100% dedicated to the discipline of workplace emotional intelligence.
Entrepreneurs and leaders work with Shane and his team to unlock a level of performance within themselves and the teams they lead that can only be found through the direct application of EQ to workplace situations.
A 21 year veteran within this space, Shane holds a Bachelors degree in Humanities from the University of Calgary and is currently finishing his Masters in The Psychology of Leadership at Penn State University.
His company’s mission is to “ensure that every person they work with shows up better at home having been afforded the opportunity to grow their emotional intelligence while at work”. As he is fond of saying, the CultureSmith process is essentially how entrepreneurs stay entrepreneurs.
Morgan Berna is the host of Olympia Benefits’ podcast, The Small Business Mastermind. Her background is in marketing, journalism, and broadcasting. Passionate about small business, she aims to create content that inspires and educates listeners.
Shane Wallace: You don't realize the amount you are overcompensating because the emotional part of our brain is so large and drives so many of our behaviors that when it's inflamed and sick, it's driving all of your behaviors and you're just trying to get through the day, without realizing the damage that you're causing for the next day.
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Morgan Berna: You're listening to The Small Business Mastermind, a podcast created by Olympia Benefits to help small businesses juggle business, finance, health, and wellness. I'm your host, Morgan Berna, and if you'd like to subscribe to this podcast, visit olympiabenefits.com/podcast.
Did you know that up to 86% of employees are currently disengaged and that 72% of companies fail within their first decade due to engagement issues? Yet by getting one more fully engaged day per month, businesses can see a 3% increase in the revenue. It sounds simple enough, right? But how can you actually get more engagement out of yourself and your team when you're already stretched so thin?
Shane: By every external metric, we have this really successful business, but we were unhappy.
Morgan: Shane Wallace of Culture Smith is joining us in the studio today to answer those exact questions and to help explain the link between engagement and emotional intelligence. He'll also share his secret for leaving a productive workday feeling even better than when you arrived. This is a really great episode and I know you're going to get a lot out of it, so please enjoy and I will be checking back in with you again at the end of the episode.
Morgan: We are here today with Shane Wallace, we're going to be talking about emotional intelligence and especially the connection between emotional intelligence and the workplace.
Shane: My name is Shane Wallace and I am the CEO of Culture Smith, Incorporated.
Morgan: Shane Wallace is the founder and Chief Engagement Officer with Culture Smith Inc., Western Canada's first and only practice 100% dedicated to the discipline of workplace emotional intelligence. Entrepreneurs and leaders work with Shane and his team to unlock a level of performance within themselves and the teams that they lead that can only be found through the direct application of EQ to workplace situations. A 21-year veteran within this space, Shane holds a bachelor's degree in Humanities from the University of Calgary and is currently finishing his Master's in the Psychology of Leadership at Penn State University. His company's mission is to ensure that every person they work with shows up better at home having been afforded the opportunity to grow their emotional intelligence while at work. As he is fond of saying, the Culture Smith process is essentially how entrepreneurs stay entrepreneurs.
Starting just simply, what is emotional intelligence?
Shane: Emotional intelligence, so, emotional intelligence has five dimensions to it - self-awareness, self-regulation, empathy, motivation, and social skills. Within the workplace, we focus on the first two dimensions. So, self-awareness and self-regulation. Self-awareness is essentially how well do you know what triggers you? And self-regulation is are you in control of those triggers or do those triggers control you? So, specifically, within the workplace, we look at the common areas where those triggers occur. And so, in trying to address it, it's equal parts treatment and prevention. So, from a treatment standpoint, we help the more we can grow someone's self-awareness, the better their ability to self-regulate when those triggers happen. They can bounce back faster. And then, our company, Culture Smith, the word Culture Smithing comes from building the type of culture that prevents those triggers from happening as often. And so, it's a fairly holistic approach to trying to bring more workplace emotional intelligence to the forefront.
Morgan: Awesome. And what sparked your interest in emotional intelligence and specifically this relationship between emotional intelligence and the workplace?
Shane: Honestly, my complete and total lack of it at one point in my life. The origin story, the firm, we started a-- it was a straight-ahead recruiting firm, back in 2005 called Abacus Recruitment, and we focused primarily on finance and accounting placements. And the recruiting industry, in general, at that time, was a pretty robust industry, it was really fast-paced, but it was hyper-competitive. And the unfortunate by-product of that is candidates were commoditized, for lack of a better term, they're being products. And so, you're in a constant battle to try and build a relationship with a candidate but do it on a very, very short timeline. And we, at the time, didn't realize the impact that that was having on our own emotional intelligence. As entrepreneurs, we were out there grinding every day trying to grow this firm, and going home unhappy at the end of the day and not knowing why.
By every external metric, we had this really successful business, but we were unhappy. And so, through a bit of executive coaching that I'd received at the time, I got introduced to the concept of emotional intelligence and started putting it into practice. In our own lives, things got just instantly better. And the thing with self-awareness is once you have self-awareness, you have situational awareness. And so, when we started interviewing clients and candidates, in our standard recruiting practice, you started noticing where they were potentially lacking, certain elements of emotional intelligence on the client front. We would have clients call us up and say, "Hey, we want to replace this person, they're not working out, they're causing this issue, that issue." And we started telling to them a bit, saying, "Okay, well, are they creating the issue, or are they responding to issues that you're creating? How much of this do you own?" And many clients didn't like that. But there was a handful that said, "Okay, I haven't really thought about that. So, if I were to address that, how would I?" And we said, "Well, I don't know. But here's how we did it within our own business."
And then on the candidate's side, when we’re unhappy at work, we're just unhappy. We spend so many hours a day at work that so many candidates were coming through to us saying, "I'm unhappy, I need to switch my job." And we would just break that statement up for them, say, "Well, there's two issues there. One is you're unhappy, the other is you may need to switch your job. Let's work on the happy first. And if we get happy-fixed and you still want to switch jobs, then we know what's authentic and if we don't do that, the worst thing we can do is try and get you a new job when you're in this current state." And so these, they honestly just started as sort of a value ad. We never thought it was ever going to be a business, and then, we were helped by the downturn. So, when the downturn came through and the recruiting business took a very sizable hit as a result, companies weren't paying fees to hire any more. We really didn't have--
Morgan: A business?
Shane: Yeah. We started looking into the abyss a bit and saying, "What could we do here?" And we were like, "People seem to really be responding to this, what if we actually turned it into a business?" And, so, I took a six-month working sabbatical. My partner, Tony, stepped up and started running the day-to-day functions of the recruiting business. And went out and hired a bunch of biopsychologists and experts and sort of cobbled together this Frankenstein-monster of a system that we had been using ourselves, but said, "Okay, how can we potentially commercialize this?" And within three months, we had reincorporated the company's Culture Smith and haven't looked back, and that was six-seven years ago.
Morgan: I want to go back to a point that you had made about as a business owner not noticing that it might be you and not the employee that's the fit issue. Have you ever had that experience?
Shane: A hundred percent. The problem with having low EQ is again, the first element of EQ is self-awareness. If you're not aware that there's a problem, you're not aware that you are the problem. And my story is not unlike many of the clients that I've worked with, in that it was a really painful, rude awakening when it comes to it, where there were just a lot of really, in all honesty, bad behaviours that were justified, rationalized over time. You don't realize the amount you are overcompensating because the emotional part of our brain is so large and drives so many of our behaviours that when it's inflamed and sick, it's driving all of your behaviours and you're just trying to get through the day without realizing the damage that you're causing for the next day.
Morgan: What made you start focusing on this connection between emotional intelligence and culture? They're both two terms that I feel like these days are being almost used as buzz words.
Shane: Very much so.
Morgan: And so I'd like to hear where that actually came up to you like the connection and maybe clarify for people how those two things work together?
Shane: Yeah, it was a client who had-- when we first started working on the EQ work that we were doing, at that time it was 100% just we were specking it into the hiring process. So, how do we increase the self-awareness in a candidate so that they're making better decisions as to whether or not they should be accepting this role, and how do we create that same level of self-awareness in the hiring manager who-- what most hiring managers fail to realize is the amount of emotional pain that they are actually in at the point of hire. Like, nobody ever hires on purpose, right? We wait until a chair is open, and the work's piled up and it's just the need to get it off our plate that drives the hiring decision, which is why there are so many poor hires. Scribbler did a study last year that showed that 96% of hiring managers admit to making at least one poor hire per year.
Morgan: I had a job for a while where I was in charge of hiring for my department, and any time I was hiring it was because it was an immediate need, it was never looking for a long-term perfect fit. And we had lots of great people come in, but yeah, it was often the culture fit. Often it didn't work out very great.
Shane: Yeah, and so, with one of our clients at the time, he was the one that had given me this phrase that he had picked up somewhere where he said, "Culture is the way things are done around here, it isn't good or bad, it's just this is the way things are done around here, where engagement is how you feel about the way things are done around here." And as soon as he said 'feel' that just kind of triggered, "Okay," then the connection between emotion-- and so at the time, we had been researching a lot of the environmental factors that go into whether or not somebody has a high level of EQ at the time, because EQ is like a muscle in that you can develop. It's the only element of human personality that you can actually learn and grow and develop. But no different than a muscle, you can grow your muscle to be stronger, you can grow stronger your EQ, but it can also become fatigued.
And so, there's this concept known as ego-depletion, which basically states that we have this reservoir of mental energy to draw from on a daily basis and when it's gone, it's gone. And so, if you spend a tremendous amount of time leveraging willpower to go through and try and make it through your day, by the time your day is over, you're just a burnt-out shell of yourself and your ability to then be aware and self-regulate diminishes. And so we started looking out, "Okay, well, if we can control these environmental factors, if we can basically start building a healthier culture that doesn't tax people as much when we are asking them to show compassion to their fellow employee by respecting the different behavioral types and practicing emotional intelligence, it's almost disingenuous for us to ask them to do that if we're not creating the type of environment that allows them to do it."
Morgan: Yeah, absolutely. So, backing it up a little bit, what are some signs of-- perhaps that ego-depletion or the lack of emotional intelligence, and on the opposite spectrum, what would a healthy emotional intelligence look like in the workplace?
Shane: That's a great question. So, the sort of blanket one is going to be - defensiveness is a big one. If you look at the word - defensiveness, you are trying to defend something. So, when somebody is perceiving that they are under a certain amount of attack, they're going to respond in kind. Ultimately, there's no one universal way to do it, it really comes down to-- we use the four-color behavioral system to determine somebody's behavioral bias. And so it ultimately comes down to that.
So, for example, I'm a yellow, yellows hold what is called the credibility bias, so, when I'm in a low state of EQ, somebody asking me a simple question, registers in my brain as a personal attack. So, if somebody's just seeking information, and I'm going through ego-depletion, that question feels like they're questioning me. They're not just gathering information, they actually don't believe me. And so, the defensiveness will come out. Where conversely, somebody who is green, for example, holds a connection bias, they are the quintessential people-people. When they're triggered, they actually regress. They'll give you the cold shoulder because they seek connection. So when they're triggered, they will rob you of connection, assuming that they are causing you pain. And the problem is - so they'll go sit in their office, and be super, super quiet, the whole time wondering, "Why is nobody coming and checking on me?" Where a lot of leaders have the opposing - the red profile, where if you're out of a red's way, they just assume there's no problem. They're super result-oriented and driven. They're oblivious to the fact that there's even an issue. And they tend to learn about it in an exit interview when this person says, "Well, I'm out."
Morgan: Do you want to go over the colors quickly just to give some context here?
Shane: Yeah, so, again, there's four, and it's based off Jungian Psychology and so there's anybody that's ever taken a "personality test." One of the things with that is there's a distinction to be made between a personality test and a behavioural assessment and most things that get like Myers-Briggs and Diskin Insights that get marketed and packaged as personality tests are in essence behavioural assessments. The distinction to be made there is that behaviour is just a hard-coded set of preferences. So, when we determine somebody's behavioural color, we're very, very, we're adamant upfront in letting them know you are not your behavioural color. Like, this is a strong system of preferences, it doesn't mean you cannot adopt the traits of another color with enough self-awareness and self-regulation.
Morgan: Yeah. I think it's important to know, because a lot of times we get caught up in these. My friend mentioned that she worked at a company where they did a type of personality test, or behavioural assessment, I supposed, and afterward employees started saying, "Oh, I can't do that, I'm this. That's not in my wheelhouse anymore."
Shane: A hundred percent. Or the other end of that spectrum where people no longer trust them to do it. "I can't give this to you because you are this behavioural color." Or even worse, reds are very, very direct, so we'll go through a session and somebody's, "Oh, no, I actually get to yell at you now because I'm a red. It's who I am." And so, we want to be very, very clear. We actually threw a marketing campaign a couple of weeks ago to make the colors look like paint swatches that you'd find at a Home Depot to show that there are different shades of these colors based on how aware you are of what behavioural color you are.
But, simplistically, it comes down to, I mean, anybody who's listening right now can literally asses themselves by asking two questions, and it's level of cognition and level of communication. So, cognition comes down to how you think, and what you use to think with. Do you use your brain or do you use your gut? So, what we would call thinkers are very cerebral and very data-driven, and they need a lot of facts and figures before they feel comfortable pulling the trigger on something. Where feelers are more emotional with their thought processes, they tend to pull the trigger faster, they're more instinctive. And as we joke when we do these sessions live, if anybody who's listening is debating as to whether or not they're a feeler or a thinker, it indicates they're a thinker, because we haven't given them enough information, and so they're struggling to make the decision.
The second variable is communication, which comes down to whether or not somebody's a speaker or a listener. And this one can sometimes be a little bit trickier because of social shaming, really, it doesn't matter whether you're a speaker or a listener. The bulk of the feedback you've received over the course of your life is to be the opposite. So, speakers, the litmus test is - how often do you get the urge to interrupt? So, you may not be interrupting because you've been told not to interrupt, but you're kind of screaming inside to throw your two-cents in. If you feel that pull often, you're a speaker. If the opposite is true, you're more of a listener. So, it breaks out into a grid or quadrant in the top lefthand corner would be those that are feelers and speakers, which would be yellows - that's what I am. Over to the right would be those that are feelers and listeners, they would be the greens. In the bottom righthand quadrant would be your thinkers and listeners, they would be blues and then the bottom lefthand would be the speaker-thinkers which are reds.
Morgan: So, once you've done these assessments would that impact doing the hiring for a company?
Shane: Yeah, to a certain degree. Again, we get almost militant about making sure the message is clear that-- sales, for example, if you look at certain behavioral sales training platforms, they would say that the best salesperson would be a yellow-red. Yellows because they’re credibility-seeking you so we’re going to go out there we’re going to want to be found credible. There’s going to be that pull to get a client to say yes to us. And then the red results orientation is going to make sure that we actually close the client. The highest revenue-generating salesperson we have at our company is a pure blue process-oriented because his follow-up is better than the rest of us. I’m out there chasing every single shiny object I see, where once you get through the first hurdle of making that initial contact with a client, everything else is just a step of the process.
So, yes, it informs the hiring but more what we would say is that it informs the support that the person needs in order to be a successful hire. So, we focus on-- the only variable that we get really, really rigid with, in clients is do they fit the culture? If they fit the culture of the organization, the rest of it can be taught and developed through onboarding performance management. But, again, that requires a pretty engaged leader that is willing to make that investment because again, they're waiting to hire when they're in pain. The second they hire that pain goes away. And if they've done a really thorough, exhaustive hiring process, this subconscious assumption forms that, "Well, we solved all our problems, we've got the right person," and they forget to onboard him, they forget to support him, and the turnover increases and they wonder why.
Morgan: So, when you say emotional intelligence can be taught and worked, sort of like a muscle, does that depend on these behavioral types? Is it different for everyone how they would work on that or is there a universal way that people can work on building their emotional intelligence?
Shane: Yeah, it's universal. The simplest analogy that we give that seems to resonate with people is - regardless of what your behavioral color is, view your behavioral color as if it's your height. Neither one of us are getting any taller than we are today. That doesn't mean that our weight is going to stay the same. We can control our weight, we can get bigger or smaller with a change in diet and exercise. It's the same thing with emotional intelligence. I will never be anything other than a yellow. I can learn how to mitigate the liabilities associated with my yellow, and how to maximize the assets associated with my yellow through the practice of emotional intelligence, through becoming more self-aware, knowing what it is that triggers a yellow, and knowing that those situations can be engineered.
For example, many, many yellows are viewed as chronic procrastinators. And it comes down to-- if there are any entrepreneurs that are listening to this, many, many entrepreneurs fall within the yellow spectrum within the color system. And they're not really procrastinators. We lack a certain amount of intrinsic motivation, and so what we're essentially doing is outsourcing our motivation to pressure. We will procrastinate to build up the pressure because we always perform under the pressure. We perform best under the pressure. Is it because our best work comes from pressure, again, without being self-aware we will just subconsciously create as much pressure as possible to get as much performance as possible which was my story when I say our firm was successful by every measure. It just came at a massive emotional cost that I wasn't aware of.
Morgan: Something that we had chatted about in our call before we recorded here was looking at the workday as a workout, in a sense. Can you elaborate on that?
Shane: For sure, so if we're using this analogy of emotional intelligence being a muscle that you can grow, this is where our concept of workplace emotional intelligence came in. So when we look at the mission statement and the purpose of Culture Smith, we say it is to have every single person that we work with show up better at home having leveraged emotional intelligence while at work. Because when we enter the workplace, we're surrounded by a lot of really, really smart people, and we're solving really, really cool problems. And so to leverage that, to use that as a workout, so that we're peaking at 5, 6 o'clock when we get home as opposed to being in an environment or not having the tools so that ego-depletion takes over and we become more and more burnt out over the course of the day. Because when that happens then we walk through the door at the end of the night, our guard is down, and we will take it out on those that we are closest to because we think we can. And it just creates a huge vicious cycle. In fact, the app that we're developing, we're calling Spiral, for that very reason, is we're trying to disrupt that downward spiral that it's created.
Morgan: Perfect name.
Shane: Yeah, thank you, and it comes back to-- I was giving a talk a few weeks ago leading up to the Superbowl on how the NFL gets it right because if you think of the average NFL player, the average NFL player is paid to practice more than they are paid to play. They play 16 games a year, but they practice for every game. And so the question I put to the crowd is, "Are you being paid to practice as much as you're being paid to play?" And everybody said “no”. I said, "Well, you are, if you recognize that gameday isn't at work, gameday is when you walk through the door at night." And so if you actually treat the workplace as the full-contact padded practice that it's meant to be and go through the reps and use emotional intelligence and the techniques that you can learn to solve really, really cool problems at work, the best version of you, the well-practiced version of you could be the one walking through the door at the end of the day, and that's really what we're trying to do.
Morgan: The comments about self-awareness really hit me because sometimes we get in our own heads and we see our day, so we know that we got up, we went to work, we did so much there, we were talking to all these people, and then we go home and it's almost just a continuation. You're just continuing your day not realizing that that's the first interaction you're having with maybe your partner, spouse and so on. That's the first they're seeing of you so if you are showing up and you're not really self-aware of how you're acting there, I can see that spiraling.
Shane: It is, and one of the things that we do, and we've only had a handful of clients actually agree to do this, but we do it. I have my kids do 360 reviews on me, and so because they're a great source of feedback, and there was a situation a few years ago where my middle daughter, so it's really simple because they're kids, I don't expect them to fill out a twenty-page assessment, but we give them three questions. I say, "What are - start, stop, continue? What am I not doing as your dad that you want me to start doing? What am I doing as your dad that you want me to stop doing? And what am I doing as your dad that you want me to continue doing?" And by no means are they going to get everything on their list, but it at least facilitates a discussion.
And one of my daughters - who's also a yellow, under the stop column her feedback was, "I need you to stop lying to me when you tell me that my art looks really good." And I said, "Okay?" and she says, "You don't do it all the time, but I can tell when you do it." And I said, "Okay, well, what's the difference? Tell me." And she said, "Well when you like what I made, you'll ask me a lot of questions about it. You'll ask me why I chose certain colors, why I went with crayons instead of paint, why I went on paper instead of canvas. Where if you don't like it, you'll say, 'Oh, that looks really good, sweetie,' and then you'll go do something else." And I said, "Okay, Ash, that's not me not liking or liking your art, that's me being present or not being present." So, I took that to the office the next day and I said, "Okay, guys, I'm not showing up present at a time when I need to. So, we’ve got to reverse-engineer this," what's contributing to that? How is it that this is showing up with enough regularity that I gave her one thing to get me to stop doing and this is the thing she chose. This has to be real. That 360-review that my daughter gave me led to a material redesign of my role, which led to a material redesign of our firm.
Morgan: Wow. How can business owners become more conscious of their emotional intelligence if they're not getting that feedback at this point? Is that something where you'd suggest going and talking to your team? Doing a review, is it something internal you do?
Shane: Yeah, all of that. You already identified, which is feedback, in the early going, it's really hard to grow self-awareness without appropriate feedback, and the challenge with entrepreneurs specifically. It's interesting, there was a study that was done a few years ago by Ink Magazine, and they said that 72% of entrepreneurs will develop some form of mental health problem relative to 7% of the general population and they were saying - clearly, entrepreneurship is super stressful because it's creating all of these issues. And one of the psychologists that they consulted with the challenge and they said, "We think you have it backward." It's actually more akin to the fact that those prone to mental health issues are attracted to entrepreneurship.
And so, when you start running a business, there's no shortage of things to go and chase and try and gain self-validation. And, unfortunately, when we're doing that, we're making very, very short-sighted decisions. And the entrepreneurs that tend to have the most success with our system in the early going are actually the ones that have experienced the most failure. Because the ones that have had a lot of success have no shortage of data to go and look and say, "Well, I'm a Rockstar. Yeah, things can be better, but I'm doing awesome. Like look at all of this," and they're miserable. So, we'll start saying, "Okay, well, have you ever had a 360? What does your team actually think of you? How are things at home?" And when we start collecting that data for them, in many instances, we have to be pretty delicate, because they're hearing some very, very real things for the first time and the last thing we want to do is trigger them to the point where they shut down and go into a shame spiral. We want them to be able to take this and say, "Okay, here's the catalyst for growth."
Morgan: It sounds like it's getting people to move past seeing feedback as this negative personal attack.
Shane: No, it's a gift.
Morgan: Yeah, and seeing it as a gift, as something you can actually work off of, and it's something that's going to help you improve your day-to-day life.
Shane: Yeah, we use that metaphor of feedback as a gift all the time because feedback is a gift, and it's one of those gifts that we have to be really, really careful about how you package it. If you make the packaging so pretty, in the sense that you are varnishing the feedback so that you're not going to trigger them, you're not really giving them authentic feedback. The packaging is so pretty they won't want to open the gift. Where if you just give them unvarnished truth, you are packaging that feedback in such a blunt way that they can't actually absorb the feedback because they're so triggered by it.
Morgan: So, I would imagine then for people listening, if you do have employees, maybe a good place is to go chat with them and if you are working for yourself, maybe ask your spouse, maybe ask your kids, maybe your friend.
Shane: Yeah, a hundred percent. And we would go spouses and friends and a lot of entrepreneurs that we work with, they typically do have some form of a tribe, whether it's fellow entrepreneurs, whether it's bankers, lawyers, like whoever's in there-- they've got people within their inner circle. They just have never really asked these types of questions. So we recommend that you start there. The danger of going to employees first is, again, most leaders haven't really defined their culture yet. At least not in emotional terms, and so they don't know the degree to which they have culturally-aligned employees. So we've seen situations where a leader would go and solicit feedback from an employee base and they're asking the wrong people because the employees that they are getting the feedback from shouldn't be there. They're misaligned with the culture, so the feedback that the business owner is getting is completely tainted. And if they actually put it into practice, they are placating the wrong element of their culture. So, when we start our process we make sure that they're getting really clear on what the culture is. Then determining how many people that they have that are aligned, and then really putting a ton of stock in the feedback from those that are incredibly well-aligned. But we caution them like don't go and ask the question if you're not going to follow through because there's nothing worse than getting somebody to speak up and doing nothing with it.
Morgan: Oh, yeah, because it's hard for people to give that feedback too.
Morgan: I had seen that you had done a talk where you spoke about the difference between values and valued culture, how could that tie into this where a company is establishing what their culture is. Most people put a couple of words up on the board and say that's what it is. Are we choosing the right words typically? Are we looking in the right direction?
Shane: No. Rarely if at all. We asked clients to make six mindset shifts over the period of about a year in order to authentically bring emotional intelligence to the forefront of their business. And the first shift that we asked them to make is to go from having values to becoming truly values-led and they can't do that unless they have fundamentally authentic values. So, we actually did a multi-year-study and uncovered the four fundamental flaws that exist within most core values statements that lead to values not being followed by a leader or the rest of their organization. And this is where the whole valued or values come in, or sorry, 'values' over 'valued' is the majority of the words that organizations were coming up with or as you say, they had facilitation that was either run by a consultant or a friend and they came up with a lot of really great sounding words. They look really pretty on the website. They conceivably think that - "Well, if the client ever saw these words, they would think we're a good company."
But they came up with things that are of value as opposed to values. So, "I value my winter jacket today more than I'm going to value it in July." So, there were so many of these value statements that were a house of cards and weren't really contributing to anything. And so what we did was went through and hired a bunch of experts to help us come up with basically a master list of values, of universal beliefs that we’re actually going to lean on when the going gets tough. And then we just put them through our system where we broke them into the four colors and all of these different things and created a set of guard rails. Like, one of the things that people fail to realize is it's not easy to live your values. It's difficult because they are principles. When they are tested, it is super easy to abandon them and a lot of leaders think, "Oh, we've got these values. This is great. Just give me the rallying cries." It's like, "No, this is going to point out what you have to do." And the second our brain is met with something that we have to do, it's automatically going to go seek something that we want to do instead.
Morgan: Yeah. Could you give an example of one that you use at Culture Smith?
Shane: Yeah, so, a prime example-- so when we build values for an organization, we actually build two sets of values. We build what is known as functional values. So these are the good behaviors that will increase the functionality of the culture. But we also build what are known as frictional values which are - these are the good behaviors that will lead to bad outcomes. So, it's easy to eliminate bad behavior that we don't want. We don't want to hire lazy people. We don't want to hire rude people. We don't want to hire indignant people. But I'll give you an example, so one of our functional values is dependability. So whenever we are doing something from a relationship standpoint whether internally with the client, we have to live the value of dependability. The counter to that is loyalty. So, loyalty is a frictional value within our company. Which essentially means, we eradicate loyalty from within our culture.
Morgan: Which sounds very counter-intuitive.
Shane: It does. If we went out and we pulled a thousand people and just ask them, "Is loyalty a good thing?" The vast majority of them would say, yes, even if they were neutral towards the concept of loyalty. But I'll give you an example of it in play. So, somebody that is driven-- it comes down to a choice. So if I were to give you two choices right now. I'm going to give you 50 dollars cash or I'm going to take out a lighter and I'm going to hold the flame to your forearm for 30 seconds, which do you choose?
Morgan: The cash.
Shane: The cash, right? If we ask everybody that question outside of the odd contrarian or masochist, everybody is taking the cash. Now the problem with that is whenever we have a clearly good versus a clearly bad outcome, it's the rational part of our brain that makes that decision. Well, the definition of employee engagement is the emotional connection that an employee has to their company's goals and objectives. So what we're trying to do is create the emotional contrast, not the choice between good and bad. What is the choice between good and good? So when I'm faced with, I can either be dependable here or I can be loyal here. The people are going to thrive in my culture, the ones that automatically choose dependability. So if I give that same 50 bucks, you can have 50 bucks or you can have unlimited time with your best friend or you can have an unlimited amount of your favorite food or you can spend an unlimited amount of time doing your favorite thing - is the money automatically going to win?
Morgan: Sounds tough.
Shane: Right? What's happening now is your emotions are getting involved, your preferences are coming to the forefront and so we want to be able to test people against, "Okay, when tested, is it going to feel better for you to be loyal or is it going to feel better for you to be dependable?" If that's going to feel better for you to be loyal doesn't mean you're a bad person, it means you're going to be really uncomfortable within my company.
Morgan: Yeah, and it would be different for every company.
Shane: A hundred percent. Yeah, like we don't have a single client in our roster that has loyalty as a frictional value, we're the only one.
Morgan: That's interesting. What shifts have you started to see in companies you've worked with when they start working on emotional intelligence and their overall self-awareness?
Shane: Sure. So, I'll break that into two. So, there are the hard gains. And so there's three that tend to show up right away. Absenteeism drops dramatically. Turnover drops dramatically and productivity increases dramatically. So all three of those are going to impact the bottom line. There is sort of a landmark study done about 10 years ago called the McLeod Report that tried to measure, tried to quantify the financial impact of engagement on a workplace culture. And the numbers that came out of that is for every 10,000 dollars in a salary paid to a disengaged employee, they create an additional $3,400 in waste. And then 85% of employees would be registered as at least moderately disengaged. The problem with it is it's death by a thousand cuts because the business owners don't receive an itemized invoice with all of these cost on it. It's very easy to get lost and to just bleed out after a while. And so we're using emotional intelligence to address that engagement issue again because engagement is the emotional connection somebody has to their company. We just argue that you can strengthen that emotional engagement through emotional intelligence. Your engagement can either be bought or it can be taught. And buying engagement doesn't work.
Morgan: And that's what most companies do.
Shane: They do.
Morgan: Anytime I've heard talk about engagement, it goes to what perks can we give? What other benefits can we give? I don't think I've ever heard someone say, what can we teach?
Shane: Exactly. Well, so our sort of token somewhat glib definition of engagement is engaged employees are there for what they give; disengaged employees are there for what they get. So, if your solution to fix engagement is to run an employee engagement survey, get all of the feedback and then start giving them what they're asking for in the hopes you're going to drive engagement, you've become the giver, they have become the getter.
Morgan: Yeah, you already have a problem there.
Shane: Exactly. Where if you can actually figure out what makes them tick if you can actually figure out how to make them happier by teaching them how to be happy, you are getting the corresponding benefit of increased productivity, of increased engagement, of increased resourcefulness and innovation. All of these things that companies leaders fly all over the continent, going to conferences trying to figure out how do we innovate, how do we come up with the next great widget. Stop emotionally beating the hell out of your people. Every great idea that you ever need is sitting in your office right now. You're just systematically locking it within people's brains by trying to drive productivity out of them instead of trying to unlock engagement from within them.
Morgan: Do you do things like restructuring employees’ tasks? Changing around what maybe traditionally was done within their role?
Shane: Yeah. Actually, a really simple exercise that everybody listening can do without a ton of guidance, it's called save sense system support. And so essentially what ends up happening is you gather a team and you get everybody on that team to list every single thing they do on a daily basis as down into the minutiae as possible. Just this huge laundry list of tasks that they do. And the next to every single task, they are going to write a number between one and five, and that number is a joy factor. How much does this task fill my cup? So anything that's a four or five, I was put on this planet to do that task. Anything that's a one to a three, I hate doing it. I want to put a drill between my temple every time I have to do this.
And so what ends up happening is all of the tasks that get listed as a four or five, those become save tasks, right? People will get hyper-protective while keeping that on their desk because it makes them happy. Everything that has a one to a three gets thrown into a master list and what happens is, it's almost like the NFL expansion draft, is the fours and fives become the protected players that each person is going to keep, everything else goes into the expansion draft. And so now, I'm going to look at everything that my teammates listed as a one, two or three and if I think it's actually a four or five, I ask if I can draft it over onto my team. And by the time we go through a process like that, everybody has gotten rid of at least one or two things that suck the happy out of them. Everybody has gained one or two things that make them really, really happy. And then with whatever is left over, we then ask the system question, can we actually get rid of this stuff with some form of a system, why are we even doing this task? And then anything that is left over that is a one to a three, but you have to keep, then we start with support. How do we boost yourself or in self-regulation, so that this task that feels really painful to you doesn't feel as painful over time?
Morgan: That's such a good way to look at it. I think that's a concept I've heard a lot where there-- I see a lot of blogs and articles writing about moving beyond just having a static role, knowing a little bit of different things in the company but haven't seen it broken down quite like that. I feel like that’d almost be kind of a fun activity too.
Shane: It's a lot of fun and that's where like-- what really unlocks it and makes it super effective is if you know the behavioral colors of everybody in the room because you can start to see-- and it's kind of critical that you do that in certain instances because there are certain behavioral types that even if they don't like the tasks, they're not going to admit they don't like the task because they're type dictates that they're not allowed to admit fault. And so you do want to have a bit of facilitation there in the sense that you want to make sure that you're creating a safe enough space for them to rate something at one without fear of reprisal that, "My boss is going to get rid of me because I'm saying I don't like my job." That's not it.
Morgan: You mentioned in our call as well that employees should not be expected to leave their baggage at the door. Can you explain what you mean by that?
Shane: Yeah. It's based on the principle of psychological safety. And when we start talking about psychological safety, again, it's another concept that is a little bit buzz-worthy right now. And the danger with any of these, sort of, buzz-worthy trends, I know we spoke on this on the phone, is to become really easy to dismiss. And the psychological safety gets miscast as creating a super sanitized, super safe work-environment where we're not really allowed to talk about anything for fear that we're going to trigger or offend someone. And it's actually the exact opposite.
Psychological safety is all about creating environment where you can actually have healthy conflict. We're told to not bring certain issues at the door but your brain doesn't know that; your brain doesn't know how to leave it at the door. And so if you're asked to leave certain issues at the door, there's a program running in the background that is preventing you from engaging. I'm not saying that I'm encouraging companies to have people come in and air their dirty laundry and say, "Look, I'm really struggling with this issue at home and I need your help with it." What I'm saying is recognize that when a certain individual is going through a little bit of pain, acknowledging that pain and saying, "Hey, here's how I can help you with that pain by helping you absolutely kick-ass at work today." Right? I can't solve your issue but I can make sure that the happiest, most motivated, most productive version of you is here for whatever six, eight, nine hours that you're here. And I guarantee you that that version of you is probably going to stand a better chance of going home and solving whatever your issue is."
Where if I condemn you for bringing your emotions to work and make you feel even worse, you're not going to be productive. I, as your boss, am losing any form of productivity from you. I've probably encouraged you to activate your profile on LinkedIn. And an even more miserable version of you is going home and making whatever issue you're dealing with that much worse.
Morgan: That's a good point. I think we're quite afraid of emotions at work. Or at least we're told to be.
Morgan: So that's a good idea to leverage that and say, "Okay, what's this employee awesome at? Let's work on that today."
Shane: Absolutely. And we just want it to come from a place of, again, another buzz-worthy term, servant-leadership, it is misunderstood by, especially small business owners and entrepreneurs, who are forced to wear so many different hats, that this concept of putting their employees first, it just seems odd to them. And in order to make it work, the owner needs to get really, really clear on what the business needs from the employee. And once they can get really clear on that and articulate it to the employee and say, "Look, this is what the company-- if we picture the company as its own person, here's what this person needs from you. You are now a servant to the company but I'm going to be a servant-leader to you. I'm going to make sure that the runway is cleared and you are set up to deliver to your primary customer. Your primary customer just happens to be this company."
It becomes symbiotic. Everybody is getting what they need and it's just-- I can't describe how much better that is and how much more fulfilling an entrepreneur's life is when they can do that. Versus the kind of old school command and control way of doing things. I hope I'm not painting the picture that leaders are stuck in the dark ages. There was a time and place for command and control - 30, 40 years ago, what an organization needed from a person was productivity. They needed subservience, they needed compliance. Well, as the workplace has become more automated, we don't need somebody to turn a rivet a thousand times a day. We've got a machine that will do that. What we need is them to be creative. What we need is for them to think, "Okay, how's our competition going to innovate and put us out of business? I got to beat them to that." The brain is not creative when it's under stress.
And so things like forced-ranking performance management systems and all of these things that are considered best practices to this day, they don't align with the way the brain is developed. There's a phenomenal book called, Brain Rules by a guy named John Medina and I think it's chapter three, he says if you wanted to design a torture chamber for the brain, it would look like the modern workplace. Our brain is not built to thrive the way we have our company set up.
Morgan: Yeah. And the competition has changed so much.
Morgan: You don't just compete with companies doing the same thing as you these days. You're competing with Netflix. You're competing with YouTube. You're competing with people's attention across the board so innovation is extremely important and it's very hard to be creative when you're forced to do something all day that just doesn't inspire you. It's not in your wheelhouse, yeah.
Shane: Well, and understanding that innovation isn't a project.
Shane: You're not going to go innovate and create a product and you're done. Like innovation is a mindset. You need to constantly be doing it. And, again, that's just not going to happen. It's going to happen a whole lot easier when you are self-aware of your triggers. And it's going to happen a whole lot more effectively when you can self-regulate and you're in a brain-storming session and somebody starts critiquing your idea and you start getting your back up and you recognize, "Okay, no, this is just me. They're not attacking me. They're attacking the idea."
Morgan: Like, "Why am I feeling this way?"
Shane: Like were trying better that it gets vetted in this room before we take it to market. Where I've been in the room with countless leaders that will just shut that meeting down and not talk to anybody for a week because they're offended over an honest question.
Morgan: I'm curious about the companies you've worked with. What differences have they seen in their recruiting before and after doing exercises?
Shane: Sure. So there's two. One is they will finally become comfortable being picky about who they hire. So there's so many, especially smaller business owners or start-ups that are scaled to a certain point, that is still subconsciously feeling a little bit insecure. They're so surprised that anyone would want to work for them that they literally will let anyone work for them. Either that or the hero-complex of, "I know this person isn't going to be a hundred percent fit but I can fix them. I can mentor them. I can grow them." And it never works. So, once their culture gets established and once they start seeing the benefits of EQ within the workplace, they become hyper-protective of it which is great.
The second thing is they become better talent-evaluators themselves. So, one of the first things we do aside from creating the benchmarks for clients that are going to enable them to spot the degree to which somebody is going to be a fit for their culture is we work on confirmation bias. So, because their brain is so triggered when they're hiring; because there is such a huge pull for the pain to go away by filling the chair, they will start to see assets within certain candidates that aren't there, they're phantoms. And so to get them to set aside their own bias in an interview and be able to just neutrally assess talent and set aside this sense of urgency to get the chair filled with the practicality of making sure that I want it to stay filled. Those are probably the two biggest changes. I mean the quantifiable is again reduction and turn-over rates and increased employee engagement scores, all of those things. Because it's important, from a hiring standpoint, Forbes stated that 60% of all turnover within an organization, stems from hiring poor people. And the majority of the turnover comes from having top talent exit because you've hired a poor fit and put them next to that person. It has nothing to do with hiring the poor person and having that poor person leave within the first three to six months. It comes from actually alienating the top performers that you have by not respecting them--
Morgan: And the culture that you've started.
Shane: The culture that you've started by making sure that you are protecting it every single time. Like the other end of that spectrum is literally, like we say to clients all the time, the goal is one plus one equals three. We want you to hire somebody that is not only a great fit for the culture but because they're such a great fit for the culture, they're actually unlocking potentials of the people that you already have.
Morgan: Yeah. I've seen both scenarios in workplaces for sure.
Shane: Oh, for sure.
Morgan: It comes to mind. So you're going to have, ease of your hiring, you know what you're looking for and then you're retaining people as well, sounds like, as long as you keep hiring within your structure and within-- just being conscious of it and aware.
Shane: And keep hiring-- and now that you say that, that brings up another one is where this works really, really well where you can get the benchmarks and place and you know what you were looking for, is you will actually start proactively looking to hi-grade your team. You won't wait for the chair to be open, you will know. So we create these batteries of questions for leaders that we call cocktail questions because they're so conversational in nature that you can ask at a cocktail party and not look out of place. And we're basically essentially teaching them to be interviewing everyone they meet all the time.
It doesn't mean that if they find somebody that is going to be a fit for the culture, they're going to hire them on the spot. But they are going to keep that mental Rolodex, they're going to stash that away so that when the need emerges, they know they've got somebody that's aligned that they could reach out to. And in many instances, they don't even hire the person. Sometimes these people become board members, they become clients, they become stakeholders, they become vendors. We used this construct of an A, B, C or D player to determine the degree to which somebody is culturally aligned that has the competence for the role. Well, there is such a thing such as an A, B, C or D vendor, there is such a thing such as an A, B, C or D client, there is such a thing such as an A, B, C or D board member. Culture needs to be that benchmark that you're measuring all stakeholders against.
Morgan: I think of interviews I've been in and the ones where the roles have been the best fit for me are, usually, when during that interview, we actually start coming up with new ideas and things we could be doing and it just starts to flow. And then there's been those where it's just a little more question and answer and you can tell, I haven't really answered that much but they seem to be having that confirmation bias coming in and making assumptions and you can sort of sense it. But as the potential employer probably just going to go for it.
Shane: And that's just it and then it's--
Morgan: Not thinking about it.
Shane: Not thinking about it. And so we've been toying with this skunkworks project for the past three years called Career Smith, which is basically taking the entire Culture Smith model and giving it a 180 and trying to find a way to scalably provide it to job seekers to be able to do that. So how can you assess, as a job seeker in an interview, how can you assess culture, how can you determine whether or not you're making the right move. Like there are so many candidates that we've interviewed throughout the years that they recognized that they've made the wrong move really, really early on but then they're like, "I got to stay though because if there's a turnover on my resume, my marketability is going to go down--" and they're like, "I got to stick it out for the next two or three years," and the whole-- we talk about ego-depletion, they're just miserable.
Morgan: There's a lot of assumption, I think, that the interviewer knows what they're looking for. So if they like you--
Shane: A hundred percent. They're the expert.
Morgan: Awesome. They know I'm going to fit.
Shane: Exactly. And I don't know a single client of mine that has ever been given formal interview training, that has ever gone through a process where they've been taught how to hire someone yet they stake literally millions of dollars a year on their ability in 10 questions over a coffee. There is one client that once upon a time that had created this experiment that was going to determine whether or not somebody was going to be a fit for his culture where he would intentionally, he would always run an interview in a restaurant and he would-- it was a regular place for him and so he had strong relationships with the wait staff and he would intentionally get the waitress to treat the candidate rude.
Morgan: How odd.
Shane: And he wanted to gauge what the candidate's response was and based on what the response, he was going to determine whether or not they were fit for the culture. And I just, 'til this day, it's still just--
Shane: And he thought it was the most genius thing ever that he had created this experiment that it was going to determine if this person is rude and they bounce back right away and there's just so many variables in there that are not determining cultural fit and anyways--
Morgan: Could you give a little summary of what you can do for companies where Culture Smith comes in and maybe help people can get in touch with you if they're interested?
Shane: Yeah. Sounds great. So there's sort of, I guess, four core buckets. One would be culture transformation. So anybody that's listening that just this sounds like we're speaking directly to them, that they know that they love their company but they're not sure why things aren't in proper alignment. It's a process we call cultural revelation which is basically going in making sure that your values is set up the right way, determining how many A, B, C and D players you have and giving everybody their behavioural colors and just really getting the basics of emotional intelligence practically in the hands of everybody. Beyond that, there are three areas where once that foundation is set that you're going to want to test it or where it's going to fall apart. And those form the other three buckets for business which would be hiring support, performance management, leadership development. All of those are done through the lens of emotional intelligence and how is it that we are cultivating and growing people to be the best versions of themselves with the thought that if we do that effectively, the business is going to benefit as a result of it. And then in terms of contact, simplest way, our website which is www.culturesmithinc.com. LinkedIn, my LinkedIn profile, we post a tremendous amount of content on a daily basis on this type of stuff. And then my email is email@example.com.
Morgan: I want to say, too, I love your website.
Shane: Oh, thanks.
Morgan: So, if there are any fellow marketing nerds out there, go take a look. It's pretty great. I was showing it around the office.
Shane: Thank you.
Morgan: Is there anything that we haven't covered that you wanted to touch on or--
Shane: No. I think the biggest thing, the biggest take away that you've kind of already addressed is a lot of the stuff that we talked about today has kind of falling into buzz word camp and I hope that we've sort of cracked the veneer on that with this discussion because anything that is going to get into the Lexicon as a buzz word, there is a reason behind that. There's a lot of people with that need. But again, as long as it's not becoming too easy to dismiss, then I'm cool with it. But it's easier than people think-- Let me rephrase. It's not as hard as people think. So, if you look at the word 'hard' in the dictionary, the opposite of hard is easy. The opposite of hard is also simple. This is simple, it is not easy. It's a lot of work. It's a lot of commitment but it's not-- like it can be demystified incredibly quickly.
It is, again, like working a muscle though, one trip to the gym is not getting it done, you have to commit to the sets and reps each and every day in order to get the benefit. What we fundamentally help individuals and organizations do is behavioral change. And when you look at behavioral change, behavioral change happens at three levels. It happens at the outcome level, it happens at the system level and it happens at the identity level. And anybody that's ever read Simon Sinek and the golden circle, just kind of picture those three rings similar to his golden circle. And the challenge is that most organizations and most people focus on the outcome level. Right? So, I want to lose 20 pounds. Well, it was actually the system that leads to the way it was, the system of dieting and exercise is what creates the 20-pound weight loss. And so where the focus needs to be is on the system.
But the real shift needs to happen at the identity level where you need to see yourself as someone that can actually follow the system. And so that's where, for example, I don't skip the gym, now I've had five-minute work-outs but I'm no longer focused on the outcome. I'm focused on the identity of being the person that follows the system every single day. And so if I skip the gym once, that's an accident. But if I skip the gym twice, that's actually the formation of a new system. And so, it's critical to just follow the system each and every day. And that's the only way that that's going to happen is if you make the system as simple as possible to follow.
Morgan: And I think that's where this nice conversation is taking. A term that is getting a little confusing out there and showing that it can be a system, it's not so complicated and that it can be, it just needs work and--
Morgan: Awesome. Well, thank you so much, Shane.
Shane: Thank you.
Thank you so much for tuning in to this episode of the Small Business Mastermind. I hope you enjoyed this chat with Shane and that you got something out of it that you can bring in to your own workplace. If you are enjoying the Small Business Mastermind and you'd like to be notified when future episodes are made available, simply visit olympiabenefits.com/podcast and on that page, you'll see a button at the top of the screen that says, Subscribe, when you click that you'll just enter your email address and you will be notified when new episodes are posted. We have lots of awesome content coming up and I can't wait to share it with you. So, until next time, have a great day and I'll talk to you soon.