Creating A Result-Driven Workplace Culture- Randy Pennington [Interview]
About Randy Pennington
Randy Pennington is the author of two award-winning books Results rule and Make change work. He is an expert in helping organizations lead change and build cultures. His main specialties include, performance management, leadership development, and organizational development. Bringing with him an experience of over 3 decades.
We have the pleasure of welcoming Randy Pennington today to our interview series. I’m Aishwarya Jain from the peopleHum team. Before we begin, just a quick intro of peopleHum. peopleHum is an end-to-end, one-view, integrated human capital management automation platform, the winner of the 2019 global Codie Award for HCM that is specifically built for crafted employee experiences and the future of work. We run the peopleHum blog and video channel which receives upwards of 200,000 visitors a year and publish around 2 interviews with well-known names globally, every month.
Welcome, Randy. We’re thrilled to have you.
Oh, thank you so much, Ash. I appreciate it.
Thanks, so Randy I wanted to begin with, firstly congratulating you on your long and amazing journey.
And now you’re about to release another new book. Kudos to you. Can you tell us a little bit about your adventure that has led you to this beautiful place you are now?
Well, thank you so much and as I sit quarantined in my office on a stay at home, sometimes the places it feels much less beautiful right now than it did six weeks ago. But let me kind of take you back. I am, sort of a self-described organizational nerd and I’ve been that way since graduate school.
When I was in graduate school pursuing my Masters’s degree was about the time that I got my first job in Human Resource and one of the things I noticed was that it was in the hospital of about 1600 employees with a number of different departments. There wasn’t a single organizational culture.
In fact, no one called it culture back then, there wasn’t a single unifying culture, but there were some areas that were exceptionally well run where people loved to go to work there. There were some areas that struggled to do anything correctly, and people hated to go to work there.
And so I became very interested in what was the difference. What were the habits, if you will, and it does go back to leadership and it ultimately comes back to culture. So then, a couple of years later, I had the chance to join the senior leadership team for a startup health care facility, and we started from the ground up with an idea that we wanted this place to be different than any place where anyone had ever worked before, not different in the sense that we were doing different work.
The work was the work but we wanted people to feel like they first had a sense of purpose for coming to join us than when they came to work. It wasn’t the worst part of their day. In many cases, we wanted it to be the best part of their day. We wanted an organization where people felt like they could contribute great ideas and have those ideas listen to where there was a lot of transparency and access throughout the leadership ranks.
And it wasn’t until I read the book, ‘In Search of Excellence’ by Tom Peters and Bob Waterman that I began to understand what we would be talking about all along was culture, and that really crystallized it for me, and it started my path.
Then I went into the consulting world starting work with designing performance management processes and employed disciplinary processes and performance review and dispute resolution processes. And then I knew that I was onto something.
When one of my clients said to me, we brought you in to help us design a new performance management process. We didn’t realize that we were getting a culture change in part of the package, so from that, it sort of again, that’s all those things came together, and I’ve been very fortunate in my career to find a way to make a living out of being constantly curious about where organizations need to go next.
That is so wonderful just to understand your journey and you know what, there is also a misconception that culture is really about the bean bags that are there in offices or giving out free lunches, free meals and now suddenly we’re detached from our workplaces no more bean bags no more free lunches, right?
So what is the real concept of culture? And now that it’s coming to test, how our leaders are supposed to be a part of this?
First off, your insight, Ash is one of the things that I talk about often, I write about often. The way I talk about it is if it’s a fun place to work, but you’re not producing results, that’s not a company that’s a party. And so that the journey around cultures was very interesting.
If you go back to the very earliest writings about culture, one of the things you’ll hear it described as is the habits, it’s the legends. It’s the things that we inherently do, and it’s just kind of the way we do things here. And it’s…
“The way we do things around people, performance and productivity and professionalism”.
It’s all those things mixed together so when I talk about culture, I really say your culture is the habit of your organization or the habits of your organization displayed over time. It’s the habits around how you treat people, obviously but it’s also the habits of how you perform, how you treat your customers, and how do you pay attention to results?
For years, up until about two years ago, Twitter was the place where everyone wanted to go to work, even though they never produced a profit so it took them a long time to move from its a very cool place to work to a place that actually is a cool place to work that turns a profit and makes money. And people would go, yeah, that they’re going to make it as a company.
“So I think when you look at it and you step back and think of it as, it’s your habits in all areas of your operation displayed over time and it’s those habits that don’t require a policy they don’t require a manager looking over your shoulder. It’s just the way we do it because everyone is committed to doing that work that way. Now you’re starting to understand what culture is really all about.”
Absolutely. It’s about the habits, and it’s about doing something that would produce results and produce success for the organization and not just the materialistic things around it.
By the way, before we go after that because there’s something that you said I want to come back and ping you back on just a moment and expand on. So right now, when there aren’t that face to face contact, it doesn’t mean that managers can now abdicate the relationship and development responsibilities they have with their team. Yeah, in fact, if anything, they should be doing more now.
One of the things that we’re telling our clients right now is that on average, every single manager should be spending at least 25 minutes a week in one on one conversations, minimum 25 minutes a week in one on one conversations with their team. So, actually that means it could be five minutes a day. But you have to be talking to people.
Actually, one of my clients, is now doing two meetings a day. They’re all working remotely because of the COVID-19 virus. And we started them on a path to do 15-minute meetings a day with their team that they were doing one staff meeting once a week and we said no, it’s 15-15 minutes twice a day because you want to keep people connected.
We’re seeing groups do virtual happy hours, virtual book clubs, virtual binge-watching all kinds of things, even on the social side, because people do miss that conversation in the hallway and in the break rooms.
Absolutely, they do, and Randy there are so many organizations out there that are known for their culture? You have Google, Zappos, Salesforce and so many others, right?
So do you think that organizations that are trying to copy their culture are on the right path, or it’s just a delusion?
It’s a great question. I think there are elements of great cultures that you can bring to your organization. They’re saying some things that Salesforce does that probably are worthwhile to think about. But see, I believe that while there might be elements your culture is uniquely yours.
Some years ago, the other book that I wrote was called ‘On My Honor’, it’s about integrity and leadership one of the people I interviewed for that book was at the time, the CEO of Exxon Mobil, which was the largest corporations in the world, with 66,000 employees in 60 plus countries around the world, and Rex Tillerson was the CEO at the time.
One of the things that Mr. Tillerson and I talked about is that Exxon, as a global company, has a global culture. But that global culture feels a little different if you’re working in Houston Texas, and an oil refinery versus working in Africa or India or the North Sea, so I think that the way you have to think about this is yes, you do need a culture, but your culture needs to be unique, and it needs to be flexible enough to realize that the workforce, the customs, the norms, the morales of someone where you are in India is different than somewhere where I am in the United States, there has to be some flexibility with that.
Right. It has to be fluid, it has to be dynamic because there are changing environments. And then something like this happens, so you cannot be rigid. That does not make sense, and you’re right about that.
Who is really responsible for the culture of the organization? Is it just one person who’s let’s say, the Chief Culture Officer or a Chief People Officer, or is it really collective or it’s a bottom-up kind of culture?
I don’t believe it’s always bottom-up, but I also don’t believe that you can say it’s the responsibility of a Chief Culture Officer or a Chief People Officer, because that way is too easy to abdicate their responsibility.
I see a number of organizations, and I’m sure you’ve seen them too Ash, where the words that I hear that describe the culture from the top of the organization are completely different than the experiences that the team feels on the front line of the organization every day.
So while there may be a Chief Culture Officer or the CEO, I mean,…
“I think ultimately the CEO has to own creating the environment for the culture, just like a CEO has to own, creating the environment for safety, for accountability, for all those things but the job of the Chief Culture Officer, maybe to be the champion but if it doesn’t involve people at every level of the organization then its a nice program that might win you some awards. But it probably won’t change how you do business.”
Absolutely. So there is a big gap between the frontline people and the people at the job. So do you think the middle managers, the middle-level management is what’s really the key between this?
Absolutely. If you think about changing every organization, the middle of the organization is where change goes to die because if you think about culture from that standpoint, everyone at the top, all the words that you see on everyone’s wall and everyone’s website, they’re all great words, and they’re all really pretty similar.
And so let’s make an assumption that the people at the top of the organization believe those words. That’s who they want to be. The folks on the front line look at those words and go, we’d love to work there. This will be a great place and then they say but you don’t know my manager, my supervisors, probably even a good person, my team leader might even be a great person to work with.
But somewhere there’s a department manager, a division manager. Whoever else that gets in the way of creating that culture and that, actually is where many organizations, I believe, hamper themselves in transforming their culture is because they pay attention to the top then they communicate to the bottom without ever putting the processes and structures and spending time with the middle of the organization to make sure everyone there is bought in.
Right. Absolutely. It’s an integrated ecosystem that will finally produce better results.
Also, Randy, can you tell us something about the evolution of company cultures that you have experienced? What are your learnings from it?
Well, first of all, thank you it’s a great question, I think about it, Ash one of the things, it started off being something that we knew was not fair but we didn’t really call it culture there wasn’t a name for it. It was thought of as well, it’s a great work environment, it’s morale, it’s whatever those things are.
The minute we came to understand that a culture is a set of habits and we were on the right path, when Tom Peters and Bob Waterman wrote ‘In Search of Excellence’, they didn’t talk a lot about bean bag chairs and ping pong tables. What they talked about was, how do you build excellence in an organization? That’s where it was then, for some reason, and I hate to say this here because you guys have such a wonderful technology platform for human resource professionals.
So I realize that many of the people here are going to be HR professionals who are watching this, and I’m a former HR professional. I still have a strong identity with that profession.
“HR messed it up, and the reason we messed it up wasn’t because of bad intentions. It was because we thought about it from the people’s standpoint only, and we forgot about the business and operational standpoints of the culture, so we tried to do things that were great for people, but we didn’t always make culture into the business.”
And so there was this period where everyone was talking about culture as well the people’s peace and you would hear speakers. I followed some of the conferences a couple of years back where the first speaker said, you need a culture of accountability and the second speaker said, you need a culture of service, the third speaker said, you need a culture of joy by the way, I was the only one that was coming there with the title in my presentation to speak about culture, and so it became hijacked not just by the HR professionals, but by everyone that was selling a good idea at the time.
It goes back to the only culture you need is the one that helps you as an organization to attract the people that you want, serve the customers that you want, deliver the performance that you want. If you’re not delivering results in all areas of your business, the culture is misaligned.
I think we’re finally getting back to that there’s an old saying that actually dates back to 1500 with Niccolò Machiavelli that basically has been paraphrased to say, you never waste a good crisis and hopefully now people will look at this situation and say our culture has to be about more than just keeping people happy not that there’s anything wrong with that. It needs to keep people happy and keep customers happy and be more efficient and be all these other things. I think that’s the evolution of where culture will eventually go.
It’s really a correlation between talent branding and between a good culture to the profit that an organization makes right. Is there a direct correlation?
I think so. I mean when you think about what talent branding does for you, if you assume that your team has a choice about where they commit their time and energy and resources and let’s also make an assumption that we as managers can mandate compliance, people volunteered their commitment. That extra piece that makes them want to do the best job they can.
Given a choice people would rather work for a company that is known for treating people well and performing well than they would for a company who doesn’t and because they want to be there then they tend to attract better talent, and with better talent alone doesn’t win.
But I think if you look at any sports team, you’ll see that there are sometimes people with more talent, individual talent, that they don’t play well together as a team if you have the best talent with great leadership and a wonderful environment that empowers and enables them to exceed to succeed now you start to have that winning combination in the talent brand is an essential part of that.
And how much of a role technology plays in improving the experience? The overall experience of an organization’s culture of the employees in the organization?
As a technology company I was expecting that you might ask that question, Ash, on a scale of 1 to 10 with one being low and 10 being high technology, I believe going forward rate is somewhere between 9 and 11. It’s almost essential here’s why.
First off, if you’re someone who looks like me, that’s my age. We don’t see technology the way someone your age looks at it. If you think about where the workforce is going, the people that are entering the workforce see your lack of technology as a sign that you really don’t want to be relevant in the world.
So I think technology is a way to make sure that you’re relevant not to the old people with grey hair like me, but to folks like you because you’re the group that, they’re going to be 50% of the workplace are millennial in the next 5, 6, 7 years, are going to expect the technology, they’re not going to be patient with the fact that you have old legacy systems that worked well back in 1997 but aren’t relevant today.
And they don’t also, they don’t understand why you can’t have that technology upgraded, meaning they get a new phone every two years. Why are you still operating on a legacy platform that hasn’t been updated except for annual patches?
“So I think it becomes essential to sort of telling the world who you are, but it’s also then technology isn’t the goal, but technology is the tool to help you be faster and more efficient and more connected to people than they have ever been.”
Absolutely. Couldn’t agree more with you. I think millennials really look at technology as an important enabler for them to do better. Some of it is just part of the culture now. Millennials really judge organizations on that.
By the way, before you go off let me give you an example, one of my clients right now as a part of COVID-19 has their HR team working from home, even though they support a manufacturing operation that’s still up and running so what they produce has been deemed an essential product so they can still run on the plant floor, but that they’re limiting the office people, their admin people who can be there and so actually we are using technology to become more connected.
So while there might not be an HR person there every evening anymore, we know that the evening shift takes a break at a certain time, and there is an HR person available via Zoom every break to be able to interact with people. We’re now doing updates at break time or at mealtime with people. We now have a separate computer with a camera set up in case someone has a benefits issue or an employee relations concern.
So they’re actually staying more connected now using technology than they were back before this whole thing started. Because they’ve opened the blinders into what’s possible by the way, if I were an HR person looking at this saying, yes, but you don’t know my CEO, you don’t know my manager, then good take this piece, show them here’s an old guy saying that you guys need to get better and then say, ‘See, it’s not just us, all people are saying this too’.
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Absolutely, it’s so funny. We’re getting full attendance in meetings now just because it’s remote and we used to do face to face meetings and you never had full attendance. It’s really pretty shocking and surprising.
People have started to see a different phase. I think they’re really looking for an excuse to wear something other than sweatpants and workout clothes.
Absolutely. That is so true and talking about performance management is a very interesting aspect.
What do you think is the right way to do performance management because we know that there are feedback cycles and you have the annual or quarterly based performance reviews, do you really believe in that?
I think one of the problems with performance management is we’ve taken one tool and tried to make it fit for a number of different purposes. So, first off, do we need feedback? Yes, we need feedback. Do we need annual feedback? I would say if you’re only giving people feedback annually, you’re really missing the point.
“If you think of performance management as a feedback ingrowth tool, then the world doesn’t operate on an annual cycle anymore. You should be giving. You should be coaching and encouraging and teaching and recognizing all those things as a part of helping people grow and develop their performance. That’s what happens every day.”
Now, I’ve had more and more of my clients move to a quarterly cycle for goals. This is what we want to accomplish. That’s one change, but I think it’s still the same premise. It’s because the world is messed up.
The other thing that’s happening I think, ought to happen with performance management should have happened all alone, but the notion is, performance management isn’t really me as the manager always just telling you what you’ve done right or wrong? It’s us together growing your portfolio of skills and competencies to help you be more successful and to help you succeed. Stay focused.
That’s one piece of performance management many other people also use performance management as a tool for compensation. Do you rate a three or four or five you get a raise or you rate a one or two on a five-point scale, you don’t whatever, that makes it, I think more problematic because now you’re getting what you want to pay people to drive, how you look at their performance.
So again, one of the things that I’ve been doing over the years is encouraging people to, let’s separate how we think about compensation with how we help people grow as performers and professionals in the organization so I realized that has always been problematic. But there is a solution to that.
The third way that performance management is often used is a way to justify termination, and I’m going to suggest that there’s a better way to do that. And the way to do that might be through a formal corrective action or disciplinary prospects. It’s quicker. It’s more directed and more focused; it’s also, I believe, more defensible.
If you live in an area where there’s a lot of employees and jobs are considered part of a property, right? If you will. If you wait till an annual review and then justify what is to terminate someone. It’s much more difficult than having a very targeted approach.
So again, what I’m seeing with my clients is first of all, don’t let one tool just do everything. Use it for what is designed to do. Tie it back to the business and to the performance and to tie it back to your values. It’s one of the other things that we’re talking about with people right now is we need to give people feedback on how well they are doing in living our values.
If you think about competencies, goals, or accomplishments and values, three great components used to develop people don’t necessarily make that part of your compensation process then if you need to terminate somebody, do that through the disciplinary process with a corrective action process, right?
Absolutely. That makes a lot of sense. It’s how we look at performance management then, and we need to change it now, especially because the whole scenario is completely changing it has to be a continuous cycle, as you said.
Well, and you know it again. If you look at the millennial and Gen Z generation, they’re used to getting feedback all the time and even to the point that they asked each other for feedback. So if you think about performance management truly in its broadest term is growing people, then why aren’t you allowing peer to peer feedback?
Why aren’t we using technology to coach each other and give each other feedback, and so and again, broaden that perception, if you will, of performance management is not just a process. It’s not just a piece of paper that HR makes me fill out every week that I have to complete, performance management really is a process for growing and developing talent to help them more successfully support the organization in all of its areas. And then it starts to make a lot more sense and be a much more dynamic process.
Yeah, absolutely and that’s what leaders are supposed to do. They’re supposed to have one-on-ones and try to make them understand and align them to the culture and have them grow and succeed in what they can really shine. They have so much potential, so it makes a lot of sense.
Right. And we tend to focus most of these things on what’s wrong, what people can improve on. That’s what we learned in school, right? I mean, if you have brought home four really high marks and one really low mark. Your parents probably didn’t congratulate you on the four high marks. They said, let’s work on this one.
We all do need to work on things that are important we can improve on. But the other way we get better is to leverage things that are our strengths. I grew up in a small town and one of the things that I remember hearing as I was growing up. It’s much easier to ride a horse in the direction that is. So if you have someone who has got a strength at something, you can say, yes, there are some areas you need to improve but let’s help them build on their strength to help the organization get better.
Yeah, that makes sense. The positive reinforcement would probably have them a long way.
And also what do you think about the future now? What is your idea of a new normal? So what do you think it’s going for us?
Yeah, I know, it’s interesting. I was doing a podcast interview about two weeks into the COVID-19 crisis and the person interviewing asked me when we return to a new normal, and one of those things that came to me. I said, there is no more new normal. There’s only a new next, and it was funny because I could watch the chat feed and the Twitter feed and just blew up around it, and it was like, yes, it’s a new next. It’s a new next.
So I think the very first thing we have to realize about the future, whether it’s COVID-19 or it’s something else, it’s a geopolitical issue or it’s the price of oil has completely collapsed. It is the movement to mortar renewable sources. It’s a generational change in the workplace. I mean, when you think about all the things that are going to change in the next 10 years from now it will be a continual pace of change that moves always to what’s next so I think that culture is completely different now.
There are some fundamental foundational pieces that are in place today. Yes, you have to be results-focused. Yes, you have to be people-centric. Yes, your values have to be aligned. I no longer think it’s customer-oriented. I think today you have to be customer-obsessed. So those are the fundamentals that I think you’re going to be there, by the way, those are things that great companies do today.
Now I think you start looking at one of the accelerators in the culture. Well, one of the accelerators is that you are change ready, you can adapt quickly, and we’re seeing now who can adapt more quickly than others as we go through this crisis. But I think that’s got to be a piece because a crisis is going to happen. I think there’s more opportunity and being data-driven and process-driven.
“It’s one of the reasons why I love platforms like yours. It’s because it’s not just an administrative tool. You actually give me information and data that I can use to make better choices about people and about their growth and about their development. We keep saying people are our most important asset. Well, if that’s true, we should stop treating them like expenses and start growing them like assets.”
So I think those are the exact operators and then difference makers in the culture are going to come down to two things. One culture that the future is seeking that they’re not waiting for things to come at them, but they’re actually seeking the future. The second part of that is this. I think cultures that are collaboration enabled, which means almost everybody cooperates now, if you look at your company, if someone asks you for a favor.
You’ll go, sure, I’ll help you. But cooperation isn’t the same thing as collaboration. Collaboration is actively seeking different perspectives and ideas and competencies to bring them to achieve a better solution that’s much more holistic that is designed into the end. I mean, I think collaboration that doesn’t use design thinking as a way of moving forward is missing again an opportunity.
That’s where I believe it is the kind of culture because the normal, the whole normal idea is based on this assumption that we reach a point where things are static for a while. I don’t think we’re going to get to that point. Maybe not again in the next 15 or 20 years. So we have to start moving in a place where there is no new normal. There’s only a new next. We have to go there.
Absolutely. I agree with you nothing is normal anymore. It’s just, we’ve already adapted to technology. We’ve been so reticent and resistant about it but suddenly we just had to take it out because of the situation. So it’s just us adapting constantly and now fostering more than ever.
I think that they’re going to be organizations that come out of this much stronger than others, and I think the difference is going to come down to the organization’s first off, they have to adapt quickly, no doubt about it.
But there will be some organizations that pursue change right now that makes them different in the marketplace in a year. And I know that because it’s always happened that way in the US we had the great depression starting from 1929 to 1939. It was a great depression here in the US and interestingly enough, a global brand now a company called Procter and Gamble, most people know who they were back in that time, they were just another consumer products company.
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In 1929 Procter and Gamble made a bold choice to pursue a strategic change in the midst of the depression. They thought to themselves, everyone’s going to buy soap. They might as well buy ours, and then they went and used the new technology of the time, commercial radio, and started not buying ads but sponsoring 30 minutes serials 30-minute programs where they were sponsored not by Procter and Gamble, but by whatever soap they were selling that time.
By the early 1930s, they had over 20 of these in production, and then when television came along, they moved that to television. We knew them as in the television world, as the soap opera. That’s where that came from so the notion is this is a company that made a bold strategic change in the face of a crisis in the place of an economic downturn that positions them to become a global brand today.
So I honestly believe they’re companies that are going to do that. I think there will be new companies in 10 years that don’t exist today. That will absolutely be changing the world. So it’s going to happen. You’re exactly right.
Well, that is so interesting that there’s so much new information for me and thank you so much for that insight.
I would finally wrap this interview up by just asking you if you could tell us a little bit about your new book. What is it about any other important soundbites that you’d like to leave the audience with?
Well, thank you. The new book will be about what the new next leading in a new next world will be about. How do you create that culture? It’s something I had actually been working on for a little over a year.
I wasn’t calling it new next at the time, but then I made that sort of fortunate blunder saying that in the podcast and it stuck. So that’s what we’re going with at the time. I’m still writing right now as much as I can while I’m down. I don’t have a publication date yet, but hopefully, it will be out there.
The one thing that I would share with people as they leave here is this, we believe that people are important, people are our greatest asset. People, whatever words they use.
I think it’s really important now, especially in a crisis that we start thinking of people as not just an asset, but we start thinking of people as our partner. Now, I don’t know if you’re in a relationship or not, Ash, but here’s what I know is that when you have someone who is a partner, you treat them differently than someone who is in a transaction. If we think of employees just as a transactional element of the business, just as an expense, I have no problem cutting a transaction out of my life, but a partner that’s different.
My parents were married for 62 a half years before my father passed away. I remember asking my mother on the occasion of their 60th wedding anniversary. What can you tell me about being married for 60 years? And here’s what she said. She goes, ‘I think it’s going to work and it might last’ at that point.
I think hopefully they had a partnership, but it didn’t start out that way, started off as a transaction of the first date, if you will. And then it grew into that partnership and partners think about how other people think about their partners when they make decisions, they make sure to communicate their open, honest, at least the best ones are the best relationships.
I think when we start looking at the people who work with us as our partners, it changes how we view them and how they view us. The most important benefit is this is when we treat people as trusted valued partners. We earned the right to expect them to act as trusted, valued partners, and so we can start a shift that focuses. I think it sets us up well for the future.
Absolutely. That’s just so wonderful, that really is an eye-opening message for a lot of people out there, I’m sure who treat their employees still as transactions and not as partners. Right.
So thank you so much for that inside. And it was a pleasure talking to you, Randy. I really appreciate your time. I had a fun time and it was really an engaging conversation. So thank you so much.
Oh, thank you so much. It was a pleasure.
Well, you take care, Randy and have a healthy time ahead of you.
Thank you very much. You too be safe.
Yes. Thank you. Bye-bye
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