Music:
Speaker1: Hello and welcome, everybody. This is Joe from StartupRate.io,
Speaker1: your authority on startups from Germany, Austria, and Switzerland,
Speaker1: also known as the DACH region.
Speaker1: Today, we're diving deep into why company culture might be your biggest growth
Speaker1: level or your greatest hidden cost.
Speaker1: My guest is someone who has dedicated his career to building what he calls magic
Speaker1: cultures. Welcome, Christian Konrad.
Speaker0: Hi, Jan. Lovely to be here.
Speaker1: Totally. My pleasure. And we're both smiling because we're going to introduce
Speaker1: our audience to a very simple German word. It's called Fachkräftemangel.
Speaker0: Yeah, my Australian coach, Carl, always, you know, when we talk about that,
Speaker0: he says, could you repeat that, please? That's such a beautiful word.
Speaker0: It's impossible to pronounce for me.
Speaker0: Fachkräftemangel. It's basically skilled labor shortage.
Speaker0: But in German, we have that possibility to build words as we please and make them as long as we like.
Speaker1: Exactly. There are other famous German words, but we are sticking today with Fachkräftemangel.
Speaker1: Taking a quick bio from you, you have been the former marketing director at
Speaker1: Kellogg's, not only marketing series, I do believe, for the DACH region.
Speaker1: You have been formally with Unilever, also a food company behind a lot of brands for cooking.
Speaker1: Ice comes to mind and a lot of other stuff.
Speaker1: You are the founder of Engagement Booster. You are the author,
Speaker1: attention again, Magnetische Unternehmenskultur, meaning the book is called
Speaker1: Magnetic Company Culture.
Speaker1: And you're on a mission to help 1 million employees to smile by 2035.
Speaker1: Guys, if you're struggling with retention, recruiting, or employment motivation, stick around.
Speaker1: This episode will give you a practical framework you can apply today.
Speaker1: So let's set the stage. Why does culture matter?
Speaker1: What I always have in mind is that culture eats strategy for breakfast.
Speaker1: I don't remember who did this famous saying,
Speaker0: But yeah, exactly.
Speaker1: That is always been sticking to my mind and such a lot of people are talking about company culture.
Speaker1: I had a former employee of PayPal, Michelle here, she also talked about company culture.
Speaker1: And I vividly remember we both talked about if you first hire people,
Speaker1: take away their parking spots and then start talking about company culture,
Speaker1: you completely misunderstood something.
Speaker1: So Christian, your vision is 1 million more smiling employees by 2035.
Speaker1: What does that look in practice, and how did this mission begin?
Speaker0: We actually measure it. We measure those smiling people because I define them
Speaker0: as people who no longer are just okay with the place they're working at,
Speaker0: the place of employment,
Speaker0: but they're actually really happy or highly engaged.
Speaker0: So, the difference between being enthusiastic and being just content is the key thing.
Speaker0: That's why they're smiling.
Speaker0: And what we're using is the Net Promoter Score system.
Speaker0: So, we measure the Net Promoter Score for employees.
Speaker0: And that gives you exactly that distinction.
Speaker1: There is a Net Promoter Score for almost everything. Can you tell us about Net
Speaker1: Promoter Score and why do you think it is useful?
Speaker0: I think it's useful because it's simple. That's the first thing.
Speaker0: And the other reason why I think it's useful is that it reframes the relationship
Speaker0: between employee and employer.
Speaker0: Basically, what you reframe is that you say that the employee is the customer
Speaker0: for the product workplace.
Speaker0: And you basically measure customer satisfaction.
Speaker1: And a lot of people have actually done such a survey for customer net promoter score.
Speaker1: How likely is it you recommend the product?
Speaker1: One, very unlikely and 10, always.
Speaker1: That's basically it.
Speaker0: That's basically it. So it's the most simple but yet extremely powerful way
Speaker0: of measuring employee satisfaction, which I think satisfaction is actually not
Speaker0: what you want. you want excitement or engagement.
Speaker0: And the people who are merely satisfied are usually on the 10 point scale are
Speaker0: the seven and eights, you know, the, the ones that, that respond,
Speaker0: how happy, how likely is it that you will recommend your, your employer to others,
Speaker0: family and friends to others.
Speaker0: And they say seven and eight and quite a lot of people say, well,
Speaker0: that's okay. And that's exactly the problem.
Speaker0: That's okay. and that doesn't mean you're a smiling person.
Speaker0: Smiling faces are those people, or smiling people are those people who turn
Speaker0: from being below 9 or 10 to a 9 or a 10.
Speaker1: I see. So, 1 million smiling employees. When did you start and how far have you gotten?
Speaker0: We started two years ago with the first client who ran the whole program,
Speaker0: the engagement producer program.
Speaker0: And so far, it seems like we haven't come very far, but we have actually run
Speaker0: the proof of concept. We stand at 65.
Speaker1: 65 smiling employees.
Speaker0: Yes. So, yeah, it's minimum viable product, product testing,
Speaker0: and now comes the time when we build the machine because we want more smiling faces.
Speaker0: And that means also more smiling employers because it's extremely high correlation
Speaker0: with productivity and other economic factors.
Speaker1: Okay, that means for including this year, you have to put a smile on around
Speaker1: 100,000 employees per year.
Speaker1: And I assume it will go like a little bit more fewer this year,
Speaker1: and then getting on and on and on.
Speaker0: Yeah, we're planning to sort of start scaling, fully scaling in about three years.
Speaker0: So that's when it takes off.
Speaker1: I see. Let's get back to our favorite word. You've argued that Fachkräftemangel
Speaker1: is often self-inflicted. What's behind this provocation?
Speaker0: Well, I think that a lot of companies, because they don't invest enough into
Speaker0: the relationships they have with their employees, have the problem of a lack
Speaker0: of skilled labor, of Fachkräftemangel,
Speaker0: they're actually to blame themselves.
Speaker0: You know, it doesn't happen by itself, you know?
Speaker0: It's like, I don't know who said that, but if you say that, if you liken a really
Speaker0: competitive corporate culture with climbing a high mountain.
Speaker0: Then, you know, if you see someone
Speaker0: on top of a mountain, you can be fairly sure they didn't fall there.
Speaker0: So it doesn't happen automatically. You need to climb the mountain.
Speaker0: So it usually requires a transformation.
Speaker0: It requires investment of time and resources.
Speaker0: And you don't get there. It's as unlikely to just happen to have a strong brand,
Speaker0: which also everybody would say, okay, yeah, I agree that doesn't happen automatically.
Speaker0: It takes three to five years to build a strong brand with a lot of investment and dedication.
Speaker0: And the same goes for a strong corporate culture that has a high engagement level.
Speaker1: We're talking mostly because that's a main concern of our main audience.
Speaker1: Fachkräfte, meaning qualified employees, for example, doing marketing,
Speaker1: most of the time doing coding or engineers and so on and so forth,
Speaker1: highly qualified people.
Speaker1: I was wondering when I was thinking about that, how high does it apply?
Speaker1: So how high can you really put that in terms of level?
Speaker1: Because most people who would be subject to this magnetic company culture would
Speaker1: be on the employee level. But basically, you have to scale it all the way up
Speaker1: the ladder up to the top management, right?
Speaker0: Yes, that's why you – I mean, if you run a transformation program,
Speaker0: my belief is you always have to go top down, whatever you want to transform.
Speaker0: And in this case, you want to increase the emotional connectedness people feel
Speaker0: with their employer, i.e. engagement.
Speaker0: You know, that's my translation of engagement, emotional connectedness.
Speaker0: And if you want to transform that within the organization, you have to start top-down.
Speaker0: So I always start with C-level.
Speaker1: Okay, we are already in your framework. Let's define your core framework.
Speaker1: What makes a company culture truly magnetic?
Speaker0: For me, the key factor is actually what the Gallup Institute,
Speaker0: the American Research Institute Gallup calls engagement, and I translate as
Speaker0: meaning emotional connectedness.
Speaker0: If you have a high emotional connectedness with your employer,
Speaker0: you have a magnetic culture.
Speaker0: So the majority of people have a high likelihood to actually recommend their
Speaker0: place of employment to others.
Speaker0: That is the highest level.
Speaker1: And many people do confuse company culture, having a good company culture with having a fancy office.
Speaker1: Can you try to differentiate between having a fancy office and having a fancy
Speaker1: or magnetic company culture?
Speaker0: I mean, I would say that having an office where people like to go to,
Speaker0: whether it's fancy or not, you know, you can debate whether the fanciness actually
Speaker0: makes people want to go there.
Speaker0: I think that a shoddy office actually is a disincentive for people to go to the office.
Speaker0: So if people, if companies complain that people are working from home too much,
Speaker0: they need to make it attractive to get to the office.
Speaker0: I think that having an office where people like to go to is very important because
Speaker0: that's where they meet. That's where they connect.
Speaker0: That's where they interact.
Speaker0: I know you can feel connected when you work remotely, but a lot of companies
Speaker0: post-COVID have actually realized that you need to be together at times,
Speaker0: particularly when you work creatively and as a team.
Speaker1: Does your framework therefore also or only partially apply to fully remote companies?
Speaker0: I would say it applies to all companies because what it does,
Speaker0: it works with what is, right?
Speaker0: I mean, whatever your setup is, and if you measure how connected people are,
Speaker0: that's where you will get some responses as to how you can improve it.
Speaker0: And if people say, you know, because when you ask the question,
Speaker0: how likely is it that you recommend the employer, you get a figure. So that's descriptive.
Speaker0: All the people are asked a second question, which is, if you're a 9 and 10, what did we actually do?
Speaker0: What actually caused you to give us a 9 or a 10?
Speaker0: And then you get an open-ended question and people can write whatever it is
Speaker0: that they love about the company.
Speaker1: And one of those things you do to get your employee to 9 or 10 on a net promoter
Speaker1: score is what you also call engagement boosters.
Speaker1: What is it? Can you walk us through and why it's so deceptively effective?
Speaker0: Yes. I mean, what, what, what, what I've spent a lot of time,
Speaker0: I, I would say that I've been thinking about company culture from since I finished university.
Speaker0: Um, the first time I ever got, got in a context with, with, with corporate culture,
Speaker0: I was still at university because I wrote an essay on corporate culture,
Speaker0: marketing strategy to corporate success because I wanted to win an internship
Speaker0: with Lufthansa in New York.
Speaker0: That was one of the prizes. Yeah.
Speaker1: Did you get it?
Speaker0: And I got it, yeah. And that set me up for marketing because I'd never studied any marketing.
Speaker0: So actually, that's corporate culture. That's where he started.
Speaker0: And I got to know corporate culture and worked as a consultant for many years.
Speaker0: And now since 10 years, I've dedicated my life to working on culture and coaching leadership topics.
Speaker0: So that's the background story.
Speaker0: Um, but my engagement booster program base is based on, um,
Speaker0: the, the assumption that there are always lead measures that have an over proportionate
Speaker0: influence on whatever you, the goal you want to achieve.
Speaker0: And the big audacious goal that we want to achieve is we want to move that fairly
Speaker0: fluffy sounding engagement, which isn't that, which isn't fluffy at all, you know,
Speaker0: but it's, it's like a big rock and we want to move it and what are what are
Speaker0: key levers and those levers are behaviors that you can display daily or weekly
Speaker0: so something that you can do or whoever you are in the organization any day of the week,
Speaker0: That's a lever.
Speaker1: Can you give us an example of such engagement boosters?
Speaker0: I have identified three, and I wouldn't say they're the only ones,
Speaker0: but they have an over-proportionate influence on engagement.
Speaker0: The first one I call connective listening.
Speaker0: So that's listening with the intent to strengthen the connection.
Speaker0: Like if I'm listening to you, not with the intent to reply, but actually with
Speaker0: building a connection, something changes.
Speaker0: Now, we're in an interview, so, you know, it's not necessarily,
Speaker0: you know, we will create a connection through the interview if we also listen to each other.
Speaker0: Um, but it's a mindset and then it's also a practice and the,
Speaker0: the economic benefit of that is first and foremost, that you reduce,
Speaker0: reduce the number of misunderstandings that happen.
Speaker0: And one of the big, you know, big bad things that happen in organizations that
Speaker0: negatively influences the feeling of emotional connectedness are misunderstandings.
Speaker0: And it's also the biggest productivity killer.
Speaker0: So the other thing that happens, it builds trust.
Speaker0: So on one hand, you have a very economic impact. You reduce misunderstandings
Speaker0: and you increase productivity automatically.
Speaker0: If everybody stops interrupting each other and people start listening to each
Speaker0: other, really making sure they understand and they build a connectedness among
Speaker0: each other, that productivity increases and trust increases as well.
Speaker0: Because if you kind of put yourself in a situation where you're in conversation
Speaker0: with someone and you realize someone is actually truly listening to me and seeking
Speaker0: to understand me, you will open up. Thank you.
Speaker0: And wherever trust is high, speed of execution goes up and transaction costs go down.
Speaker1: I like that idea for multiple reasons, because my next question,
Speaker1: we'll soon get to that, is talking about emotional connections that also disqualifies.
Speaker1: If you can measure that, if you're really serious about that,
Speaker1: that can basically help reduce the number of bad bosses if you're not just looking
Speaker1: at financial KPIs, which is something I really, really like.
Speaker1: And going to my next question, the emotional connection is now a new business KPI.
Speaker1: How can companies start measuring that?
Speaker0: Well, the simplest way that I know of is measuring net promoter score.
Speaker0: So you measure the employee net promoter score by asking that very simple question.
Speaker0: You can either do it yourself or you can have someone like me do it for you,
Speaker0: which increases the likelihood if you do it externally that people will be honest about their responses.
Speaker0: So you can do it internally, yes, but if you want to have really honest responses,
Speaker0: you usually outsource this because then you have...
Speaker0: The less likelihood that people would think if I am really honest about what's
Speaker0: wrong here and what needs to change, I will not suffer any consequences.
Speaker0: But that's what you can do. You know, you can, you can, you can measure that.
Speaker0: You can ask that question. You could, there are other methodologies that you can use.
Speaker0: Um, there's a Gallup engagement index.
Speaker0: You can, you can enlist Gallup. That's 12 questions. So-called Q12.
Speaker0: That's another way of doing it.
Speaker0: So there is a number of different ways of measuring that, But I love it if you
Speaker0: measure it, because what you can measure, you can manage.
Speaker0: What you can't measure, you can't manage.
Speaker1: Exactly. The thing is, I was thinking at one point, because you have an MVP,
Speaker1: but at one point down the road, this KPI would also influence and show up in
Speaker1: other KPIs that you then usually measure.
Speaker1: For example, what comes to mind is employee turnover. Absolutely.
Speaker0: Sick leave, productivity.
Speaker1: What's one cultural shift you've seen transforming hiring or retention metrics overnight?
Speaker0: One of the clients that I've been working with, they report that the quality
Speaker0: and numbers of their employees, of their, of their, um,
Speaker0: of people that have their applicants have significantly increased within less
Speaker0: than a year since they ran the engagement booster program,
Speaker0: which isn't surprising to me, you know, because, because what it does, it actually,
Speaker0: changes the way that people work with each other and that in today's world,
Speaker0: fast-moving world, translates into social media buzz and very clearly things
Speaker0: like Glassdoor or Canuna Ratings.
Speaker1: We said that more applications, in the back of my mind, they just started a
Speaker1: small Joe jumping up and down with the sign Fachkräftemangel.
Speaker0: Exactly. And for that company, that's hugely important because they're growing at a double-digit
Speaker0: So that is not something that's not a small thing, you know,
Speaker0: if you are desperately looking for highly qualified staff to fuel your growth,
Speaker0: if you can't get them, you get what I call non turnover.
Speaker0: You know, you get a lack of growth simply because you can't staff your projects.
Speaker1: Yeah. I'm always curious about the experiences of our audience.
Speaker1: So I was wondering, guys, what's the smallest cultural habit that make a big
Speaker1: difference in your company?
Speaker1: Share it with us on LinkedIn or tag us at xbluesky or threads at Startup Radio.
Speaker1: Christian, let's do a deep dive leadership, trust, and culture design.
Speaker1: You speak about leading with love instead of fear. What does it mean in the boardroom?
Speaker1: Just to be sure nobody heard this wrong. I said boardroom, you dirty minds.
Speaker0: Well, I think, I think it's a choice that every leader has, how do you want to lead?
Speaker0: So if you, if we, we contrast the two, two, two paradigms,
Speaker0: then leading with love would be seeing the person,
Speaker0: um, as well as the financial KPIs and figures and leading with fear usually
Speaker0: means seeing less the person, but just using people to achieve your means,
Speaker0: which is a huge difference.
Speaker0: Right? Um, and if you lead with love, it doesn't mean that you are fluffy or soft.
Speaker0: It means that you are respectful, firm, have clear, have a clear vision,
Speaker0: but people actually are a huge decisive factor in your, in your,
Speaker0: in the way that you manage and lead.
Speaker0: If you lead with fear, people are usually not really a big factor.
Speaker0: You, I've heard people say that it doesn't really matter who we have.
Speaker0: Anybody can be substituted.
Speaker0: So we use people, throw them away, and get new ones.
Speaker0: And in a situation where you have Fachkräftemangel, that is something that you
Speaker0: need very deep pockets to be able to afford.
Speaker0: So I think it's a hugely, it's a highly economic business figure or related
Speaker0: paradigm shift that you will see in the bottom line.
Speaker0: If you move from a management by fear to a management by love,
Speaker0: love sounds so fluffy, but love just means that people actually play a huge role.
Speaker0: What does it mean? It means that you.
Speaker0: In very economic terms, it means that you put people away from the P&L into the balance sheet.
Speaker0: You get the point? You know, human resources are not in the balance sheet,
Speaker0: which is why they're treated as costs.
Speaker0: So they're treated worse than machines that are actually in the balance sheet,
Speaker0: and that are written off. So you need to reinvest continuously in your machinery
Speaker0: equipment, and your technical equipment, because it needs to be renewed.
Speaker0: So if you make that kind of change in thinking, you're actually moving towards
Speaker0: the love side, away from the fear side.
Speaker0: I mean, nobody would beat their machine up, would they, literally or figuratively?
Speaker1: Actually, what always comes to mind is the typical Machiavelli misquote,
Speaker1: it's better to be feared than to be loved.
Speaker1: Actually, he said you need both, but if you can have only one,
Speaker1: it's better to be feared than to be loved. So you need both guys.
Speaker1: More love in the boardroom, you dirty minds.
Speaker0: I mean, that's why this is provocative, and I would like to take away all the red hearts from that.
Speaker0: But I think it is more, and I would sort of disagree with Machiavelli, you need respect.
Speaker0: But what you want as any kind of type of leader is you want to be able to tap
Speaker0: into the full resources of all the people that you work with.
Speaker0: And that is something that you can't force.
Speaker0: So if you want someone to go the extra mile, if you want someone to give you
Speaker0: 120% or 150% of their time and energy,
Speaker0: they will have to give that by their free will.
Speaker0: Otherwise, they won't give it long term. They will do it for some time if it's
Speaker0: purely transactional, and then they will leave for somewhere where they get
Speaker0: paid more. They become mercenaries.
Speaker0: There is no relationship. It's purely transactional. And that's,
Speaker0: you know, when you have high engagement, it's no longer purely transactional. It's relational.
Speaker1: You also talk about feed forward. Why is it more powerful than feedback in today's work culture?
Speaker0: I would say you need both. You know, I'm not at all against feedback.
Speaker0: Feed forward is much lighter and it is forward looking. It is future driven.
Speaker0: It is linked to potential.
Speaker0: It's linked to growth and development.
Speaker0: And that's why it is a hugely valuable complement to feedback.
Speaker0: It is also easier to give. It's easier to implement than feedback.
Speaker0: Feedback, you can do so many things wrong in feedback. So you really need to
Speaker0: learn it. You need to teach your people.
Speaker0: You need to train your people to give proper feedback that is useful and helpful
Speaker0: and it builds performance.
Speaker0: Feed Forward will always do that. Feed forward will help you build performance,
Speaker0: will help you instill a paradigm of excellence in your organization.
Speaker0: It will improve solution focus and solution capabilities. So there's a lot of,
Speaker0: um, a lot of great, um, benefits of feed forward.
Speaker1: Mm-hmm.
Speaker1: How do you help companies diagnose their culture in a way that's objective and not fluffy?
Speaker1: I assume you first do a net promoter score and then?
Speaker0: Well, then what that enables you to do is to actually get a status of this is where we are.
Speaker0: And the good thing about net promoter score is that you can actually benchmark
Speaker0: yourself against others.
Speaker0: So you know where you are in relationship perhaps to similar companies that
Speaker0: you want to compare yourself with.
Speaker0: And that means that you have a baseline that you can then formulate objectives against.
Speaker0: So that's the first thing that we do. When we look at the results from the survey,
Speaker0: the next step is to say, where do we want to go?
Speaker0: Where do we want to be in six months, 12 months, 18 months, 24 months?
Speaker0: We don't have to look any further. We could say, okay, what's our five-year vision?
Speaker0: That's possible. But then I would be very operative. I would say,
Speaker0: okay, let's look at the next 12 months.
Speaker0: What do we want to achieve and how do we get there?
Speaker0: And then we define measures how to get there based on the responses that we get.
Speaker1: Let me talk a little bit around my next question. And it's about the hidden
Speaker1: cost of disengagement that most companies underestimate.
Speaker1: So basically, if you do that thoroughly and well, get people more engaged,
Speaker1: you will see KPIs going up.
Speaker1: But what is the downside when you don't have engaged people?
Speaker1: You can say basically all KPIs are going down, but do you have some experience
Speaker1: of your limited experiments that you did?
Speaker1: Which KPIs are going to improve by rule of thumb or something that people can
Speaker1: get an idea of what they are underestimating with the bad company culture there?
Speaker0: Well, for instance, let's take turnover, employee turnover.
Speaker0: Employee turnover, there is some turnover that you want to have.
Speaker0: You want to have some movement.
Speaker0: But the unwanted turnover is something that costs companies huge amounts of money.
Speaker0: And if you can reduce that, and that will reduce if you increase the number
Speaker0: of highly engaged people, because they will not want to leave as easily as,
Speaker0: as people who have not got any strong emotional connectedness.
Speaker0: And so that is one that people underestimate the company companies underestimate
Speaker0: how, because there is no line in the PNL for turnover, but they underestimate how much it costs them.
Speaker0: Often what they do is they say, okay, how much money does the average person,
Speaker0: do I pay the average person? What are my costs?
Speaker0: And what I always challenge them with is do you actually hire an employee to
Speaker0: just deliver the value that they cost? That would not be good business.
Speaker0: Good business is you need to get a return of a minimum of two and a half times
Speaker0: the investment that you give.
Speaker0: So let's say someone makes 100,000 Euro and you have what we in German call
Speaker0: another nice word, so all the other costs associated, another lovely German word, very long,
Speaker0: all the other costs associated with the employment is usually between 25 and
Speaker0: 50%, depending on the number of benefits, et cetera, et cetera, that you get.
Speaker1: We made add for our audience around 80, 85% of our audience is based in the Dach region.
Speaker1: So nonetheless, we added for like the 20, 50,000 that are listening to this
Speaker1: interview without knowing that.
Speaker1: So there's social security in Germany.
Speaker1: And most of it is split 50, 50 between employer and employee.
Speaker1: That means if you pay an employee 5,000 euros, he'll have something like 500
Speaker1: euros social security costs that you need to match.
Speaker0: And the minimum loan-eben cost in Germany is 22.5%, but most companies have more.
Speaker0: So let's say it's 50% just for simplicity's sake.
Speaker0: Then if someone, let's say it's a complex job, so it takes you one year to get up to speed, right?
Speaker0: You hire someone and from the day of hirement and the first day in the office
Speaker0: until they are as high performing as their colleagues in the same job who've
Speaker0: been there for two years, let's say it takes 12 months. Quite often it takes longer.
Speaker0: Anybody who's in sales or whatever knows that. But let's be very simple.
Speaker0: Then a lot of people would say, okay, then turnover of one person will be 150,000 euro.
Speaker0: But that's not true because the minimum that you have to have is two and a half times that much.
Speaker0: So two and a half times that much, you know, simple maths is 250,000,
Speaker0: 325,000 euro, right? That's the minimum.
Speaker0: If you have a company where the turnover per capita is higher,
Speaker0: like many software companies, whether it's 500,000, 750,000,
Speaker0: 1 million, you know, then it's that figure.
Speaker0: That you need to calculate with. So if you have a 100-person company where you
Speaker0: have 10% turnover at, let's say, $325,000 a person,
Speaker0: that's $3.25 million a year.
Speaker0: So if you can reduce that by 50%, you've saved half of that.
Speaker0: You've saved 1.65 million.
Speaker1: Let's give a short break to all the C-level executives and founders who are
Speaker1: now doing some calculations in their head.
Speaker0: And that's just one of the metrics. Another one would be sick leave,
Speaker0: and you can do the same calculation.
Speaker0: What's the average? You go to your HR department, you look up how many sick
Speaker0: days do we have on average.
Speaker0: In highly engaged companies, they're really low, and that is also a huge one.
Speaker0: The biggest one, though, is if you're a growing company, and I know there are
Speaker0: lots of startups listening here.
Speaker0: If you're a growing company that grows double digit every year,
Speaker0: and that's your business plan, that's how you're working.
Speaker0: And you cannot realize that growth because of lack of staffing.
Speaker0: Then if let's say you are growing by a business, you're growing your business
Speaker0: by 10% a year, and you can only realize half of that growth.
Speaker0: Well, the difference that the turnover and the profit you don't make is actually
Speaker0: what it costs you not to have the right people on board.
Speaker0: And the third metric is productivity. The people who are highly engaged are
Speaker0: usually way more productive than the average productive people in a company.
Speaker0: And I spoke to a CEO once and I said, oh, my assumption is that the highly engaged
Speaker0: people are 20% more productive than the average.
Speaker0: And he said, that's not true. It's a lot higher in my experience.
Speaker0: It's a lot higher in my experience. McKinsey says that the top qualified people
Speaker0: in a company make between 400% and 800% more,
Speaker0: are 400% to 800% more productive than the average. Now, I think that's a little steep.
Speaker0: I don't know exactly what they base their figures on, but take something between 50% and 100%.
Speaker1: Paul Jay They base it on their daily rates, Otherwise, you cannot justify them.
Speaker1: I'm sorry for my company.
Speaker0: But I'm just giving examples. And when I work with management teams to understand the dynamic,
Speaker0: the business dynamic of engagement, I usually use turnover and productivity
Speaker0: as a sort of example because it kind of highlights A, the cost, but B, the potential.
Speaker0: If you could drive productivity by 5 or 10 percentage points in your organization,
Speaker0: what will that mean for you?
Speaker0: And it means that investing in engagement is actually a business case.
Speaker0: How much money do you need to invest to drive engagement is relatively modest
Speaker0: in comparison to the potential gains that you have.
Speaker0: Yes, it requires commitment, time, a certain budget, that's for sure,
Speaker0: but the rewards are usually 10 to 20-fold.
Speaker1: We've been talking a lot about KPIs, but psychological safety is everywhere in theory.
Speaker1: How do you embed it, especially for your clients, how do you recommend they
Speaker1: embed it in their daily operations?
Speaker0: That's a good link to the second engagement booster behavior,
Speaker0: which I call positive reinforcement. And positive reinforcement is not the same
Speaker0: thing as simply telling someone, good job.
Speaker0: You know, that's what some people think is positive reinforcement.
Speaker0: Positive reinforcement means exactly that. It means linking as a leader or manager,
Speaker0: you observe what are the psychological needs that people have.
Speaker0: And the most basic one is psychological safety.
Speaker0: I mean, the whole notion of psychological safety came up through a research
Speaker0: project that Google did with Harvard University, Amy Edmondson.
Speaker0: The project was called Project Aristotle. And what Google wanted to find out
Speaker0: together with Amy Edmondson was what factors drive high performance in teams.
Speaker0: And I isolated a number of factors and the most basic factors,
Speaker0: the foundational factor was psychological safety.
Speaker0: And if you take a step back, it's easy to understand why, because if you feel
Speaker0: safe psychologically, you will share whatever is on your mind.
Speaker0: You will not be afraid to make mistakes.
Speaker0: That will drive you. As a team, you will find out if things go wrong, much, much better.
Speaker0: Trust will go up. people will be able to share both their strengths and weaknesses and teams can form.
Speaker0: Performance goes up but that's the basic basis
Speaker0: and if you manage by fear going back
Speaker0: to our discussion before people will not feel safe
Speaker0: so they will hide um they will either withdraw you know fight flight or freeze
Speaker0: you know those are the those are the results of if you're scared if you're if
Speaker0: you're in shock if you're in fear and you will not give your full potential to your team.
Speaker1: Far from it. I see. Can you explain how the Kano model applies to employer branding?
Speaker0: The Kano model is a model from customer satisfaction.
Speaker0: So it's a Japanese model. Kano was a Japanese, I think, engineer.
Speaker0: And he said that there are three factors that constitute customer satisfaction.
Speaker0: The basic factors, which is basically, let's say you have a product like a washing
Speaker0: powder, and the washing powder has a basic thing that it should do, a basic job to be done.
Speaker0: And that job to be done is to clean something.
Speaker0: So if washing powder doesn't clean, that basic factor is actually violated,
Speaker0: and people will be unhappy with the performance of the washing powder.
Speaker0: You cannot substitute that basic service that the washing powder gives with
Speaker0: something on top like, oh, it washes at 30 degrees as well as 60, 60 degrees.
Speaker0: If it doesn't wash, it doesn't matter.
Speaker0: Now, let's say you have a washing powder that is doing a really good job.
Speaker0: It washes perfectly. And in addition, you can actually turn down the heat on
Speaker0: your washing machine. So you save some energy.
Speaker0: That is a performance factor.
Speaker0: So that performance factor will actually differentiate yourself at least for
Speaker0: some time from the competition.
Speaker0: After a while, others will adopt and we'll say, okay, and then becomes maybe even a basic factor.
Speaker0: But the key thing in a, in a product or a brand that you want to achieve is
Speaker0: the kind of excitement factor that people are excited about your product or brand.
Speaker0: And that is something that's not easy to achieve, but if you achieve it,
Speaker0: you have more competitive insulation, you have less price sensitivity,
Speaker0: and people are excited about your product or brand.
Speaker0: They will be linked to it. They will not easily switch, and they will stay with
Speaker0: you because you continuously surprise them and excite them. And that's the same thing.
Speaker0: If you do the reframe now, okay, let's say the, the, the, the,
Speaker0: the job is actually the product.
Speaker0: Um, the question for you as the product designer, as the manager or HR department
Speaker0: or people, culture department, whatever, how can we decide, design the culture
Speaker0: with the job is in, in a way that people aren't just.
Speaker0: Basically satisfied with the pay they get the safety they have as a basic factors right,
Speaker0: um all the all the all the benefits that they get the performance factors but
Speaker0: how can we get create the kind of excitement that people feel emotionally connected
Speaker0: that they feel they have friends at work they have a place where they can be
Speaker0: they can belong They can fulfill their dreams, their mission.
Speaker0: They can feel that they are part of something bigger than themselves.
Speaker0: Those are potential excitement drivers that actually create that kind of emotional,
Speaker0: high emotional connectedness.
Speaker0: So that's how the Kano model kind of relates to the Net Promoter Score model
Speaker0: as well, because usually you find those excitement factors with the nines and tens.
Speaker1: I had to smile when you talked about jobs to be done because you are in company
Speaker1: of Tony Ulwick, the inventor of jobs to be done, made famous by Clayton Christensen.
Speaker1: We link down here in the show notes to his interview.
Speaker0: I love Clayton Christensen's description of jobs to be done.
Speaker0: You know that video where he talks about the milkshakes?
Speaker0: Yep. Yeah.
Speaker1: I'll try to link this here down in the show notes.
Speaker0: So you could say, obviously, what's the job to be done with a job, right?
Speaker0: What's the job to be done for the customer, i.e.
Speaker0: The employee? You know, you as a, you as an entrepreneur or as a manager or
Speaker0: as a, as a director, you will, you will, you will, yeah, well,
Speaker0: the job to be done is that they perform a good job for the company,
Speaker0: but turn it around and say, okay, front table,
Speaker0: change the perspective to a customer perspective and not to a supplier perspective
Speaker0: from, from a supplier to a customer perspective and say, what is the job to be done for, um,
Speaker0: my potential employee that they want to attract.
Speaker0: And it changes the way you think.
Speaker1: How do you address founders who say we're too small to care about culture yet?
Speaker0: I think that's a fallacy. I mean, that's as if you would say,
Speaker0: I want to build a house and I'm too early on in my building process to lay the foundation.
Speaker0: I would say that if you don't think about that from day one,
Speaker0: you will have a hard time because then you will have to change something again.
Speaker0: I mean, you have to change the whole setup perhaps. I think you need a vision
Speaker0: for the culture you need to drive your business model.
Speaker0: So it is one of those strategic decisions that you have to make early on.
Speaker0: Uh, to ask yourself what kind of business, what kind of environment do I want
Speaker0: to create and what, and I, I would be very, I would be very business oriented.
Speaker0: You know, what's the business environment that is best suited for my business
Speaker0: model to achieve my vision, my goals, my business objectives, um,
Speaker0: and really try to ask your potential employees, the ones that you would love
Speaker0: to hire, what kind of environment I need to be at the best.
Speaker0: And then you then you build the culture accordingly begin with the end in mind you know,
Speaker0: that would be my take you know i think i think it's you can't start too early
Speaker0: um to to think about culture and that's something that good kind of incubators would tell you you know,
Speaker0: acquaintance of mine um jörg reinbold of of of the um apx incubator in berlin
Speaker0: i mean he's a great fan of helping people, helping small,
Speaker0: young startups get over the first hurdles, you know, and he's a great fan of
Speaker0: creating a strong culture from day one.
Speaker1: Speaking about culture and soft skills and leadership, what would you say with
Speaker1: soft skill in leadership is now a hard edge for competitiveness.
Speaker0: Well, I think that excellent listening skills will give you an edge in many, many ways.
Speaker0: You want to drive innovation? Be a good listener.
Speaker0: You want to find the secret of fast-growing, of fast-tracking your growth?
Speaker0: Be a good listener. Train your
Speaker0: listening skills. You want to have high engagement, build that muscle.
Speaker0: It's a huge lever that you have in building business.
Speaker1: Christian? Yeah. It was a pleasure having you.
Speaker1: We originally envisioned this to be one podcast, but we are now recording for 15 minutes.
Speaker1: And I think we'll take a short break and make this a two-episode interview for
Speaker1: the very simple reason that the way to work of most of our listeners is not that long.
Speaker1: Would you agree to come back to the next recording?
Speaker0: I'd love to. I'd love to. I appreciate your questions and being able to hopefully
Speaker0: answer some questions that are relevant for the audience. That's the key thing.
Speaker1: Great. Thank you very much. It was a pleasure having you as a guest.
Speaker0: Thank you.
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