In this episode, Andrew Finley and Ernie Capbert discuss the importance of establishing brand & company culture for both start-ups and SMEs, including some of the popular misconceptions and pitfalls you may encounter along the way.
“Ernie, good to see you.”
“Likewise, Andrew, good to see you.”
“I’m just mulling over company and values; we do a lot of work with clients about that stuff at the moment, how have you seen that change over recent years?”
“I guess from a start-up perspective, they form the brand values and they think once they’ve done their brand values, that’s what they’ll use to build the business and to build the culture and interestingly enough, as they go through a growth phase, when they begin to recruit, the brand values is not enough.
And especially in start-ups, because you’re working so closely with these individuals, you need brand values, no doubt about it. What does the business stand for? What does it mean to prospective customers? But cultural values is significantly different to brand value, it’s almost like the personality ‘under the bonnet’ of the business.
So to answer your question in terms of what I’ve been seeing is brand values aren’t enough. That’s the great starting point, but as you start to grow and recruit, it’s being clear about what their cultural values are: ‘how do we act within the business?’”
“I agree entirely with that. I think a new generation of consumers are engaging with brands far more deeply and emotionally than I think they had done previously and I think, as you say, coming up with a snappy strapline and a nice looking logo was enough. It certainly isn’t anymore.
People want to feel they’re connecting with a personality with a product or a brand. Where the slippage starts as you say is when a company starts to grow in scale… that has to be demonstrated every day in the way the people work with one another, how you recruit, the type of people you recruit and indeed to attract talent, people need to understand what it is you’re working for. It’s not just about the money.
It’s very rarely about the money, actually. It’s about the fact of getting some degree of feedback in terms of personal development and satisfaction that they’re working for something that’s worthwhile.”
“Yeah. There’s a few things that you’ve said there, but think about (and it’s something that we mention to our clients all the time) but people buy from people. SMEs can be huge. But a lot of the ones that we’re seeing and the ones that I’m working with are early stage start-ups that are going through a growth phase… they can still play on this emotional element that you touched on. People buy from people.
And if you’re in a position where you can talk about the personality behind the product or the service you provide and the brand that you’re putting in front of them, people feel that they’re buying from a human being. And that emotional element, as you said, is incredibly powerful. And, so taking advantage of that is whilst you’re still growing, while you still can feature the ‘about us’ and be clear about these values, yeah they’re incredibly powerful things that are very easy for another prospective customer to engage with.”
“Certainly I think in some of the ‘beacon brands’ that I always used to cite when delivering workshops or whatever to clients in the start-ups arena as you say particularly. And we used to think about Virgin and Apple. And actually those were brand personalities built on a personality and you can see what happens when that personality sadly disappears.
I’m not sure what Apple stands for anymore… I sense there’s a drift away from that, in fact my experience in Apple shops these days is not really great whereas when you think about what might be quite a stayed and traditional brand; John Lewis, I absolutely get what they’re about. The fact that they talk about their employees as partners, they all share total transparency, everybody knows what everybody earns. They share success together, so everybody gets the same amount of bonus each year.
And I know because my wife worked for that organisation that that follows right through every facet of their working life and their environment, right the way through to how they behave in the canteens remains true to that ethos of collective effort.”
“Even at that size, which is unbelievable.”
“If you work hard at it, there’s nothing to stop you maintaining that. I think that’s why when people talk about you know, brand affinity and stuff, John Lewis sells stuff that other people sell, but people just make a connection with the fact that they think they’re dealing with an honest and a trustworthy group of people.
And you get that with every experience you get, whether you have a bottle of wine and it’s not right and you take it back to the store, you generally feel that the people are actually quite upset about it and they’re going to do everything they can. There are other supermarkets (who I will not name) where you definitely don’t get that.”
“Totally. And I guess when thinking about a founder or a co-founder an SME, that could be listening to this… instilling the values and obviously how important they are as you grow. Whether you’re a team of 10 or the size of John Lewis. In your experience when you see the process of instilling values within a business or that team just goes ‘Oh, we have to have cultural values, what do those sound like, what do those look like?’
They’re not necessarily ‘a-ha’ moments but you do see it, whether they’re going through a growth phase or maybe there’s a little bit of in-fighting, they’re trying to get personalities or departments to agree.
So there’s those moments along they journey where you go ‘okay, it’s time to instil some cultural values’, I guess a founder, a co-founder, a management team that could be listening to this… what are those signs to you? What are those signs that you say to someone running a business that ‘maybe we should start thinking about cultural values?’”
“You raise a good point, particularly as companies start to scale, you start to get dissonance because you different types of personalities with different value sets. For me with a start-up, the personality and the culture is set by the founder, so those people have to be true to themselves.
You can’t fake this stuff; if you sit down one day and say ‘we need to now become a brand and a culture’… if you don’t really believe it, you don’t live it every day it will fail predominantly because your people won’t buy into it. So it’s something that everyone should buy into.
Just to step back a little bit into what I was saying earlier, I was always struck by one of the earlier big brands like Microsoft, they had a recruitment culture where everybody recruited. And indeed we do that at OI here. I have people who now I’ve been working with for a number of years who recruited me. It’s got nothing to do with where you stand in the organisation, a lot of our assessment centre process is actually looking at people and going ‘are these people actually going to fit the team?’
It’s got nothing to do with their skill set, it’s just attitude and do they feel right? So I just encourage people right from the outset to think about that. ‘Are these people sharing your values?’ because if they don’t you’re going to get tetchy.”
“In terms of deriving cultural values and then being connected to a personality (to a founder, to that person, and I couldn’t agree more), doing some recent work with one of our clients, it was time for cultural values. You could see it. The team had received capital and they went from a team of about 12 to 25 in 12 months. And there was exactly that.
New departments were forming, new systems and processes were forming, going through a growth stage so there was a little bit of cross-over: people aren’t too sure ‘I thought I was going to do that’. And we sat them down all in a room and you could also tell as well as everyone sat down that… some people sat down with their arms crossed, other people sat down and they were wide open. There were arms on the back of the chair, swinging and leaning back into the chair.
Some were comfortable with the conversation, others were kind of… you could feel the tension in some respects. But it was okay, because they’re challenging conversations, they’ve got to be done. Practically I guess, to someone listening… ‘what do cultural values look like?’ and one of the really interesting ones that came out was (and they were connected to the founder, as you were saying) was that the founder is ‘glass half full’, is incredibly optimistic and he prides himself on that.
For an early stage start-up or even a business going through a growth phase, you know they’re two or three, four years in; still going through an aggressive growth stage. Still really kind of filling into their boots in many respects. And he’s very optimistic. But as a result of going through a growth stage, you’re going to encounter a lot of challenges. Loads. System processes, they’re not laid out, they’re not clear yet. They’re forming literally in front of their faces.
And he said ‘what, so what so one of the cultural values is “be optimistic”?’ Well… you could say that. But how could you make it more engaging? And he said as a result of stoicism and stuff he had been reading, he said “the obstacle is the way.” So the business, whenever he encounters any challenge he goes ‘oh great, another challenge, the little obstacle here is the way and how do we work it out?’ And you could see everyone started to engage with that.
And that’s the kind of people, those are the kind of beliefs that we want and that’s how we want people to approach things. They didn’t have a recruitment process, but you could see as a result of the brand values were clear and they had them but because of this growth phase and what was going on, those things we discussed, there was a little bit of tension internally.
As a result of doing the cultural values it was very clear. And that was just one they were going to build on. But you could see very clearly his mind started going to ‘we don’t have a recruitment process’. We just hired 10 people in the last year and we don’t have a recruitment process. They come in: character competence, sounds good let’s give them a run, but immediately it was ‘how can we create a recruitment process that’s connected to the cultural values?’ How do we find out that this person likes to look at challenges in an optimistic way and how do they problem solve?
So it was really, as you were saying earlier, the importance of doing this… it’s hugely important not only to the end consumer because they can engage with a human being and because people buy from people, but also internally.”
“Internal conflict is so damaging to progress. It just sucks the life out of everybody and it’s interesting that they started to think about how do they incorporate within their recruitment process tests for personality traits.
I always use in best MBA style, little simple two by two metrics, which has on one axis ‘trust’ and on the other axis ‘challenge’ and it sort of defines the environment in which you’re trying to operate with a firm belief that unless you can trust one another and challenge one another you don’t move forward as a group of people.
At the optimum, you’ve got a really high-performing environment, at the bottom left hand corner where there’s no trust and no challenge, you just get all sorts of Machiavellian goings on.
If you’ve got high levels of trust but low levels of challenge, you just get ‘group think’ so nothing much happens. And if you’ve got high levels of challenge and low levels of trust, you’ve got anarchy basically. You’re in the mad house there.
And it’s quite interesting just to get people to think about where are they and what do they need to do to get everybody to be in the top right corner.
Years ago early in my publishing career, I worked for International Thompson Corporation which was at that time, the world’s largest business to business publisher, but they always had as one of their mantras ‘the eradication of fear of failure’ and that people got promoted by trying things and executing them well. And if they didn’t work? It didn’t matter. They wanted people to try things but think them through and do them well so you don’t get this idea of ‘well I don’t want to do it in case it goes wrong’ because that way you don’t move forward.”
“Interesting. And like you said, I think anybody, whether you’re running a business or even in your personal life, the point you made about when you’re getting challenges with personalities in a business, it can suck the life out of it. And that goes for our personal lives as well.
It’s really funny as well because from an early age I was told (and I didn’t understand part of it) someone could see I had a capacity for selling things, American football cards, and they said “Ernie, although businesses look very different, they might sell tyres, smoothies, energy drinks, a service, they look so different on the outside there’s a few things that they all share in common and require: they all need capital and they all need people.”
I didn’t really understand the capital part (I was like ‘do they mean the capital of the state or the country?’), but eventually you know… they need money and they need people. When those things are working well, the business is working well. When you’ve got the right people and the team is making the right decisions and they’re working together… I guess the point I’m trying to underscore here is the idea of getting these cultural values right is just so important.
And even in my personal life, there’s a few things that keep me up: capital and people. What does my personal cashflow look like and what does the people part look like? Whether it’s at work or a friend… those kind of things keep you up at night.
So the capital part, we’re not going to talk about that. But we are talking about cultural values and people sing from the same song sheet and being clear is just so important.”
“It’s interesting, isn’t it? We started talking about brand and it all comes back to the people in the business. And that’s where it starts. It’s not difficult to do if you keep that right and keep everybody in-line. Personalities are different, I agree with you entirely about the personal life: the difference is I guess that you can’t always choose your workmates. We can choose our friends but recognising and celebrating different personalities and different styles and capabilities is what makes for a balanced team.
Certainly I always encourage people to use some sort of profiling because people have self-awareness, they’ll understand their shortcomings and they’ll want complementary people. So your ‘glass half full’ guy, I recognise myself with that as an entrepreneur and as a start-up entrepreneur, you’ve pretty much got to have that or you’re not going to start. We’re all a bit delusional. A bit nutty really.
I realised it was quite good for me to have someone who was quite detail-driven to reign you back a bit. Often they didn’t or couldn’t but at least you’re aware of the potential pitfalls. So it all comes down to building the right group of people around you.”
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