Building a culture of trust in your small business with CultureWise’s David Friedman

The last time we spoke to David Friedman, Founder, and CEO of CultureWise and author of “Culture by Design: How to Build a High-Performing Culture Even in the New Remote Work,” we talked about the importance of employee trust in CEOs. Today, David joins us again today to continue the discussion on company culture.

Transcription:

Jim Fitzpatrick :
Thank you, David, so much for joining us once again on the show.

David Friedman :
Oh, it’s my pleasure, Jim. Great to be with you.

Jim Fitzpatrick :
Sure. Before we get started, for those executives out there… For, actually, anybody in business out there that cares about the culture in their company, this is a must-read. We highly recommend run, don’t walk, to get the book’s second edition, Culture By Design. We’re going to be talking about some of the takeaways in the book today. Let’s jump right in, David. Take us through the critical behaviors that build employee trust.

David Friedman :
There are a number of behaviors, Jim, that are important to build any great organization, and certainly trust is a core element of any great organization in a leadership relationship. Let’s just go through a handful of them.

David Friedman :
One of the behaviors that is just foundational to building trust is being transparent, or sharing information. We know this in our personal relationships as well as in business and vendor relationships, that, if we hide information, if I don’t know what’s really going on, I start wondering, “What’s really happening here?” And I make up stories that usually aren’t positive ones. Whereas, if information is shared freely, and you’re telling me what’s going on, good or bad, even if it’s negative. I can handle it if I’m the employee. I just want to know what’s happening. Be honest with me. If you share information, you build trust. That’s one of the biggest trust-building steps.

Jim Fitzpatrick :
As leaders, are we afraid, though, to be that transparent? In the sense that, if things are not going real well within the company, and we are too honest with our employees, and say, “Hey, there’s some issues here.” Whether it be the financial, or staff-wise, or what have you, that, “Oh my gosh, they might leave tomorrow. They might go to a better company if we show them some vulnerabilities in our organization.”

David Friedman :
Yeah. That’s a fascinating question that you’re asking, Jim, and it’s a little bit counterintuitive, that most would think, like you’re suggesting, that, “Gee, if I show our warts, if I show the things that aren’t positive, whether it be financial situations, or competitive position, or other things, I might risk not looking good, or people might leave to go somewhere else.” And yet, what we find is actually the opposite. There’s a great book. One of my favorite authors is Patrick Lencioni.

Jim Fitzpatrick :
Oh yeah. He’s Great.

David Friedman :
And he’s written a lot of great books you’ve probably seen. And he wrote a book a few years ago called Getting Naked, and it wasn’t about obscene things. It was just the idea. Getting Naked was the idea of being vulnerable, and he tells the story of a consulting company, and what he learned from them. Most of his books are written as a fable, like the One Minute Manager series where he tells a story, and he tells the story of this consulting firm, and this guy trying to learn, “Why is this firm, that’s a competitor, always so successful?” And what he discovers is this idea that Patrick Lencioni calls getting naked, which is being transparent. The willingness to lose the business actually makes a stronger connection. For example, if I’m willing… I’ll talk about this in business, but I’ll bring it back to employer-employee relationship. If I’m willing to say, “Jim, I’m not sure that we’re the best one for you.” Or to say, “Jim, what you’re suggesting I don’t think is going to serve your interest best, and I’m willing to walk away and lose the business over it.” You trust me more because I’m being vulnerable with you, and it tends to build a stronger relationship.

David Friedman :
It’s a little counterintuitive. If I acknowledge that you ask me a difficult question, I say, “I don’t really know the answer to that, Jim. I’ve never done that before, but let me research it and I’ll get back to you.” That’s better than me trying to pretend that I know something that I don’t.

Jim Fitzpatrick :
That’s right.

David Friedman :
The willingness to be vulnerable is actually a stronger thing. Back to your question, as it relates to leaders and their relate with employees, if I’m willing to be honest and say, “Here’s where we’re challenged. Here’s what our struggles are, and we all need to work together on it.” As an employee, I can handle it. I’m fine. I would rather you tell me the truth than try to sugar-coat it. Because if I discover later… Because that’s the worst thing. If I discover later that you weren’t being honest with me, then you’ve lost all credibility.

Jim Fitzpatrick :
That’s right.

David Friedman :
I can handle it from an employee…

Jim Fitzpatrick :
You also don’t feel like you’re part of the true inter-workings of the organization. Like, “Oh, you’re held at the same regard as, maybe, one of the customers that we’ve got.” That says, “We don’t want to air our dirty laundry to everybody out there.” But you’re working in the company each and every day, so there are some fundamental things, and a certain level of trust that has to exist. And, to your point, if somebody finds out that, “Wait a minute, you’ve been telling me this all day, and meanwhile, it’s that, now, I don’t leave because of that information that I’ve just gotten. I leave because I feel as though I’ve just not been dealt with truthfully.”

David Friedman :
Absolutely. Going back to just other ways of building trust… In my first company… I’ve run a couple different companies. In my first company, we practice something that you, perhaps, may have talked about in other shows, a practice that’s known as open-book management. The sharing of financial data with employees, and it’s right on point with what we’re talking about. To some leaders, that’s a scary thing.

Jim Fitzpatrick :
Oh, yeah.

David Friedman :
What if they realize either that we’re making a lot of money, are they going to all demand that they get a big raise?

Jim Fitzpatrick :
That’s right.

David Friedman :
And, if we’re not making enough money, are they going to worry that they might lose their job, so I don’t want to tell them. And yet, when we tell them, they can handle it. They run their own households. They figure out how to manage their household, and their income, and their expenses, most of them. Not all, but most of them do. And so, they can handle it. It’s better to tell them the truth. When I learned about open-book management many years ago, and there was an analogy that I had read once in one of the books about it that just struck a chord in me. And the analogy was that, the way we do normal business would be like… Let’s suppose that we were playing basketball, and we said to our team members, “We’re going to try to win this game. And, if we win the game, everybody’s going to get a bonus. But here’s the deal. I’m not going to tell you what the score is, and I’m not going to tell you what the rules are. But, if we win, you’ll get a bonus. That’s how we do business.

Jim Fitzpatrick :
Right. Right.

David Friedman :
If I want our employees to actually do the things that will lead to success, doesn’t it make logical sense that, if I told them, “How are we doing? What’s the score? Are we being successful or not, and what do we need to do to be more successful?” And I told them all the rules, they’re likely to do the things that’ll lead to success.

Jim Fitzpatrick :
That’s right.

David Friedman :
That seems pretty obvious.

Jim Fitzpatrick :
That’s right. There’s a number of companies…

David Friedman :
But most leaders are afraid to do that.

Jim Fitzpatrick :
Yeah. There’s a number of companies, as you know, that’s gone through this COVID situation, and you’ve got people working from home, and there’s been some layoffs due to the fact that companies couldn’t keep their entire team on, because maybe their businesses has taken a dive, or what have you. And there has been some broken trust there, because companies, they probably didn’t get your book, but they didn’t understand how to work this, and how much do we really divulge to our people? There’s been some broken trust. Once employee trust is lost, can it be rebuilt?

David Friedman :
It can, and I would say it definitely can, certainly. And think about any relationship, whether it’s employee-employer relationship or personal relationships. When trust has been broken, we’re fighting an uphill battle. What do you do to rebuild trust? You make and honor commitments. One of the biggest trust-building elements, whether you’ve broken it before or not, one of the biggest trust building behaviors is honoring commitments. Do what you say you’re going to do when you say you’re going to do it and I trust you. Don’t do what you said you were going to do and I start losing trust.

David Friedman :
Understanding this, if I’m trying to build a relationship with somebody, one of the best things I can actually do very intentionally is to make some promises that I then deliver on so that I can start to build up this good-willed bank account of experiences this person has with me, that, “You know what? David said something, and he did exactly what he said he would do.” If I’ve dug a hole because of broken trust, as you’re asking about… If I’ve dug a hole, I’m going to need to start showing a lot of examples. I got to pile example after example after example of where, I said something, I delivered. I said something, I delivered, so that I rebuild the trust that I’m somebody that can be counted on.

David Friedman :
And so, these can be even simple things. It doesn’t have to be this massive issue. Something as simple as, I say to you, Jim, “I don’t know the answer to the question you’ve asked me, but I’m going to find out, and I will call you at two o’clock tomorrow, tomorrow afternoon, and I’ll give you an answer and let you know what I found out.” And I call you at two o’clock on the nose. Not at 1:55, not at 2:15, not later in the afternoon, but at two o’clock on the nose.

David Friedman :
And you start saying, “Wow. This Friedman guy, he said he would do something, and he was on it.”

Jim Fitzpatrick :
That’s right.

David Friedman :
Do that. Even if they don’t need it at two o’clock, I would make that promise, because my goal is, I’m trying to create this experience you have of me, that anytime I say something, boom, you can count on it. Do that repeatedly and you start to rebuild trust. Either rebuild trust in a broken relationship, or just build trust in a new relationship.

Jim Fitzpatrick :
That’s right. And employees will try this on you. Right? Every now and then, they’ll send you on a trial where it’ll be, “Tell me about our bottom line.” Or, “Tell me about the…” They’ll revisit that one thing that maybe you weren’t honest with them about. To give them an opportunity to now say, good or bad, how are we doing? What’s the real story? And big mistake if you… To your point, if you happen to not be honest with them again, on that very topic, good or bad. Right?

David Friedman :
Absolutely. And just to piggyback on that. Go back to what we’re saying about pet Patrick Lencioni’s book, Getting Naked, this idea of vulnerability. When I as a leader own up to my shortcomings and show myself to be vulnerable, it actually, again, builds further trust. Now, I can’t repeatedly fall short. In other words, if these are the things we… Let me give you a simple example. One of the behaviors, when we talk about building trust in a healthy organization is something that I call, practice blameless problem-solving. In other words…

Jim Fitzpatrick :
That’s hard for companies, isn’t it? For people.

David Friedman :
It is a huge one. In so many organizations, when a mistake happens, everybody wants to know, “Whose fault was that?” And they want to blame people.

Jim Fitzpatrick :
Exactly.

David Friedman :
All it does is create distrust. It creates people covering up mistakes, et cetera. When we learn to have a blameless environment where we’re learning, it frees people up to be the best they can be. Let’s suppose that, as the leader, I got into a situation where I was blaming somebody. You did something, Jim, and I came down hard on you. “I can’t believe you screwed that thing up, Jim. What were you thinking?” And I wasn’t practicing blameless problem-solving.

Jim Fitzpatrick :
That’s right.

David Friedman :
That’s okay. I’m human. If I come to you tomorrow and I say, “Jim, I got to tell you, we talk about blameless problem solving a lot around here, and I got to tell you, I fell short. I didn’t live up to the things that we talk about around here, and I apologize for that. It’s something I’m working on, and I want to go back and clean that up.” That actually builds greater trust…

Jim Fitzpatrick :
That’s right.

David Friedman :
… than if I pretend that I was always perfect.

Jim Fitzpatrick :
That’s right.

David Friedman :
Now, if I repeatedly keep making the same mistake over and over, at some point, my mea culpa is going to lose all credibility. That, “Oh, yeah. The guy, every time, he screws up and just apologizes.” That doesn’t cut it.

Jim Fitzpatrick :
That’s right. You’ll be known as that guy.

David Friedman :
No. Exactly. But, for me to be able to be vulnerable and transparent, and say, “I’m not perfect. I don’t know the answer. I made a mistake, and I’m working on this just like you are, because we’re all in this thing together.” That builds tremendous trust and credibility in leadership.

Jim Fitzpatrick :
That’s right. And let’s talk a minute about the new workforce that is upon us now. And millennials, they really depend on this. They want to be told… These kids have been brought up where you talk into your phone and you see the person you’re talking to, so there’s complete transparency, but they appreciate this kind of a leadership, or a management style. Right? And…

David Friedman :
I think you’re absolutely right, Jim. And I would say, to a certain level, all humans. It’s part of human nature, that we want to be treated in a way that… That we’re treated like adults. That people will trust us, and that we trust them. I think that’s always been the case. Having said that, I think when you look at generational differences, while the baby boomer generation, of which I’m at the very tail end of… The baby boomer generation would appreciate that just as much. They just didn’t expect it.

Jim Fitzpatrick :
I know.

David Friedman :
That they were taught that you go to work and you do what your boss told you, and you don’t open your mouth. You don’t complain. Just, you’re lucky you have a job, and just get your paycheck and go home. And so, they still valued it…

Jim Fitzpatrick :
That’s right.

David Friedman :
… appreciated it. They just didn’t expect it.

Jim Fitzpatrick :
That’s right.

David Friedman :
In the younger generations, yes. They expect those kinds of relationships of people.

Jim Fitzpatrick :
That’s right. I know. And I’m with you. I’m at the tail end of the baby boomer generation. And it’s funny, because I’ve got millennials as kids, and they will come and go, “Just tell me the way it is. What are you sugarcoating? What are you hiding? What are you doing?” But we were brought up, your parents and my parents, they would tell you, “It’s all good. Don’t worry about it. You don’t even need to worry about that. Don’t worry. This is good. Everything’s fine, fine and dandy.”

David Friedman :
Exactly.

Jim Fitzpatrick :
And it wasn’t. It wasn’t always that way, and our kids are a different mindset, and they’re just like, “We can deal with it. Tell us what the issue is. Tell us what the problem is. Whether it be financial or logistics, or if you can’t make an event, or you can’t give me the money for what I need because of whatever reason, just tell us that versus making something up.” Right?

David Friedman :
Yeah. In my first company, I used to do something that, every month, I would go out to lunch with a handful of my employees, and my assistant would set it up, so it’d be different groups of employees, maybe three, four at a time. And I would use it as a chance to just get to know them better, and to pick their brains about what makes any place, not necessarily my company, but any place, a great place to work. What’s important to people?

David Friedman :
And I didn’t have any agenda other than just listening. And I figured that, the more I’m listening to people talk about that, the more that’s washing over me, the more thoughtful I can be, intentional I can be, about creating the kind of environment that they value. And this is a sad but interesting comment. I would tell you that the most consistent comment that I heard from people about what they loved about my own company is they said, “You treat us like adults.” That’s sad, that in so many of their work experiences, they weren’t treated like adults. And what they meant by saying, “You treat me like an adult,” is, “You trust me.” You don’t look over my shoulder at everything. If I need time off, I don’t need to have six doctors notes, and have it signed off by four people…

Jim Fitzpatrick :
That’s right.

David Friedman :
… three weeks in advance. If you need time off, I say, “Take time off. I trust you. You’re an adult. You’re going to do a good job. And, if you’re healthy enough to be in, then be in. I don’t need worry about that stuff.”

Jim Fitzpatrick :
That’s right.

David Friedman :
And they just so valued being treated like an adult.

Jim Fitzpatrick :
That’s right.

David Friedman :
And it’s a sad comment that there are so many places where they aren’t treated like adults.

Jim Fitzpatrick :
And we live now in a society that… How employees are treated. Not paid, not compensated, but how they’re treated while they’re in the employment of a company is means so much more now, and especially now that we’re talking about remote. How do these different approaches differ in a remote environment?

David Friedman :
Yeah. I think, Jim, that the same things are important to people in a remote environment than when they weren’t remote. The challenge is that, in a remote environment, we have to be more intentional about it, because it doesn’t happen by accident. When everybody was together, I could get to know you. I could walk around the office and bump onto you, Jim, at the water cooler. We could talk about the Braves game last night. Congratulations, by the way, for you Atlanta fans.

Jim Fitzpatrick :
That’s right. Go Braves.

David Friedman :
But we could talk about the Braves game. We could talk about yesterday’s football game, or whatever. We can build a relationship cause we bump into each other and see each other. When we’re working remotely, that’s not happening. And so, I’m not going to find out about what’s happening with your kids, or that your dad’s getting checked into a senior care facility, or whatever. I’m not going to find that out at the water cooler.

Jim Fitzpatrick :
That’s right.

David Friedman :
That means I’ve got to schedule time, whether it’s on Zoom or otherwise, typically on a virtual call, to make sure that I’m not just doing business, but I’m taking the time to ask about you, and show personal interest in you.

Jim Fitzpatrick :
That’s right.

David Friedman :
The need is the same, whether we’re physically together or whether we’re on Zoom, or on a virtual call, it’s just that, when in this hybrid or virtual environment, we have to be more purposeful or intentional about creating those experiences, because they’re not going to get created on their own.

Jim Fitzpatrick :
That’s right. And I would underline that entire statement for business owners that are listening to this conversation. It sounds easy. It sounds like, “Okay, I’ll make it a point to Zoom somebody in and talk to them about their personal life, or ask them certain questions, or whatever.” And it doesn’t have to be that formal. It can be, but it’s a reminder that, before you get off that Zoom call, and you say, “Okay, the meeting’s over. Done. Hold on a second, Susie. You told me that you’re having problems with your father, or your mother, or illness in the family, or what have you, and how’s that going for you? How’s it working out?” That’s all it takes. You don’t have to set aside a whole nother Zoom call, per se. Do it if you want to, but I think we have a tendency to say, “Yeah, we’ll get to that. We’ll get to that call.” And then, the call never comes. Right?

David Friedman :
Exactly.

Jim Fitzpatrick :
And it’s so incredibly important.

David Friedman :
Another thing just right along those lines. If you think about remote environments… Again, this is true in non-remote environments as well, but the power of a handwritten note.

Jim Fitzpatrick :
Yeah. Wow.

David Friedman :
And especially in these days, when there are no handwritten notes anymore.

Jim Fitzpatrick :
That’s right.

David Friedman :
To physically hand-write a note and say…

Jim Fitzpatrick :
Huge. Huge.

David Friedman :
… “Jim, I just want to let you know, I really appreciate the way… I know you’ve been putting in a lot of extra hours lately, and I know that you’ve had a lot of stress going on with your family, but I just want you to know, I really appreciate that.” You physically mail that to somebody. That is a gift that keeps on giving. They will read that note over and over again. They’ll save it. They’ll show their spouse…

Jim Fitzpatrick :
I was going to say, they’re going to put it on a magnet on the refrigerator. Right? And just, “Wow. Look at this note that I just got from the owner of the company, the president, the vice president, or my manager,” whatever the case might be, and you’re right. They’ll take a picture of it on their phone, send it to their parents, and say, “Look at the nice note I just got.” So much better than an impersonal typed email or text message. Now, it’s reduced to text messaging. Right?

David Friedman :
Exactly.

Jim Fitzpatrick :
But I agree with you. Wow. What a great idea. David Friedman, founder and CEO of a great company called CultureWise, and best-selling author of these incredible books, second edition. Culture by Design is the name of the book. Right below this interview, you can connect to buy the book and get the book, and it is probably the best purchase you can make this year as we close out this year. But David Friedman, thank you so much for joining us once again on the show. I know that our viewers and our subscribers get so much out of your visits with us here. Thank you so much.

David Friedman :
I always enjoy doing it, Jim. Great to be with you.

Jim Fitzpatrick :
Great. Thanks.


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