WEBVTT 00:00:00.000 --> 00:00:20.080 00:00:20.006 --> 00:00:23.186 Hello and welcome, everybody. This is Joe from StartupRate.io, 00:00:23.586 --> 00:00:26.126 your authority on startups from Germany, Austria, and Switzerland, 00:00:26.486 --> 00:00:27.786 also known as the DACH region. 00:00:28.006 --> 00:00:32.266 Today, we're diving deep into why company culture might be your biggest growth 00:00:32.266 --> 00:00:34.806 level or your greatest hidden cost. 00:00:35.026 --> 00:00:41.186 My guest is someone who has dedicated his career to building what he calls magic 00:00:41.186 --> 00:00:43.406 cultures. Welcome, Christian Konrad. 00:00:44.786 --> 00:00:47.006 Hi, Jan. Lovely to be here. 00:00:48.026 --> 00:00:52.386 Totally. My pleasure. And we're both smiling because we're going to introduce 00:00:52.386 --> 00:00:56.826 our audience to a very simple German word. It's called Fachkräftemangel. 00:00:58.026 --> 00:01:03.286 Yeah, my Australian coach, Carl, always, you know, when we talk about that, 00:01:03.466 --> 00:01:06.466 he says, could you repeat that, please? That's such a beautiful word. 00:01:07.206 --> 00:01:09.606 It's impossible to pronounce for me. 00:01:10.726 --> 00:01:14.386 Fachkräftemangel. It's basically skilled labor shortage. 00:01:14.766 --> 00:01:21.886 But in German, we have that possibility to build words as we please and make them as long as we like. 00:01:23.526 --> 00:01:29.426 Exactly. There are other famous German words, but we are sticking today with Fachkräftemangel. 00:01:30.526 --> 00:01:35.386 Taking a quick bio from you, you have been the former marketing director at 00:01:35.386 --> 00:01:39.546 Kellogg's, not only marketing series, I do believe, for the DACH region. 00:01:39.546 --> 00:01:46.926 You have been formally with Unilever, also a food company behind a lot of brands for cooking. 00:01:47.346 --> 00:01:49.606 Ice comes to mind and a lot of other stuff. 00:01:50.366 --> 00:01:54.226 You are the founder of Engagement Booster. You are the author, 00:01:54.486 --> 00:02:00.226 attention again, Magnetische Unternehmenskultur, meaning the book is called 00:02:00.226 --> 00:02:01.606 Magnetic Company Culture. 00:02:01.606 --> 00:02:11.346 And you're on a mission to help 1 million employees to smile by 2035. 00:02:13.065 --> 00:02:18.465 Guys, if you're struggling with retention, recruiting, or employment motivation, stick around. 00:02:18.685 --> 00:02:22.685 This episode will give you a practical framework you can apply today. 00:02:23.145 --> 00:02:27.825 So let's set the stage. Why does culture matter? 00:02:28.085 --> 00:02:32.825 What I always have in mind is that culture eats strategy for breakfast. 00:02:33.205 --> 00:02:35.745 I don't remember who did this famous saying, 00:02:36.245 --> 00:02:38.325 But yeah, exactly. 00:02:38.605 --> 00:02:45.085 That is always been sticking to my mind and such a lot of people are talking about company culture. 00:02:45.345 --> 00:02:50.725 I had a former employee of PayPal, Michelle here, she also talked about company culture. 00:02:50.905 --> 00:02:55.605 And I vividly remember we both talked about if you first hire people, 00:02:55.885 --> 00:02:59.585 take away their parking spots and then start talking about company culture, 00:02:59.665 --> 00:03:02.385 you completely misunderstood something. 00:03:02.645 --> 00:03:07.505 So Christian, your vision is 1 million more smiling employees by 2035. 00:03:08.485 --> 00:03:12.285 What does that look in practice, and how did this mission begin? 00:03:12.705 --> 00:03:20.905 We actually measure it. We measure those smiling people because I define them 00:03:20.905 --> 00:03:29.945 as people who no longer are just okay with the place they're working at, 00:03:30.045 --> 00:03:31.825 the place of employment, 00:03:32.025 --> 00:03:37.165 but they're actually really happy or highly engaged. 00:03:37.505 --> 00:03:45.985 So, the difference between being enthusiastic and being just content is the key thing. 00:03:46.245 --> 00:03:48.505 That's why they're smiling. 00:03:48.785 --> 00:03:51.265 And what we're using is the Net Promoter Score system. 00:03:51.585 --> 00:03:55.265 So, we measure the Net Promoter Score for employees. 00:03:56.465 --> 00:03:59.945 And that gives you exactly that distinction. 00:04:00.865 --> 00:04:06.685 There is a Net Promoter Score for almost everything. Can you tell us about Net 00:04:06.685 --> 00:04:10.645 Promoter Score and why do you think it is useful? 00:04:11.661 --> 00:04:14.941 I think it's useful because it's simple. That's the first thing. 00:04:15.421 --> 00:04:21.421 And the other reason why I think it's useful is that it reframes the relationship 00:04:21.421 --> 00:04:23.041 between employee and employer. 00:04:23.481 --> 00:04:31.001 Basically, what you reframe is that you say that the employee is the customer 00:04:31.001 --> 00:04:33.661 for the product workplace. 00:04:34.481 --> 00:04:37.241 And you basically measure customer satisfaction. 00:04:37.241 --> 00:04:44.921 And a lot of people have actually done such a survey for customer net promoter score. 00:04:45.121 --> 00:04:47.741 How likely is it you recommend the product? 00:04:48.001 --> 00:04:51.261 One, very unlikely and 10, always. 00:04:52.421 --> 00:04:53.761 That's basically it. 00:04:54.241 --> 00:04:59.961 That's basically it. So it's the most simple but yet extremely powerful way 00:04:59.961 --> 00:05:05.761 of measuring employee satisfaction, which I think satisfaction is actually not 00:05:05.761 --> 00:05:09.181 what you want. you want excitement or engagement. 00:05:10.401 --> 00:05:15.161 And the people who are merely satisfied are usually on the 10 point scale are 00:05:15.161 --> 00:05:18.621 the seven and eights, you know, the, the ones that, that respond, 00:05:18.921 --> 00:05:26.321 how happy, how likely is it that you will recommend your, your employer to others, 00:05:27.021 --> 00:05:28.321 family and friends to others. 00:05:28.781 --> 00:05:32.621 And they say seven and eight and quite a lot of people say, well, 00:05:32.681 --> 00:05:34.641 that's okay. And that's exactly the problem. 00:05:34.781 --> 00:05:38.121 That's okay. and that doesn't mean you're a smiling person. 00:05:38.241 --> 00:05:41.741 Smiling faces are those people, or smiling people are those people who turn 00:05:41.741 --> 00:05:44.821 from being below 9 or 10 to a 9 or a 10. 00:05:46.697 --> 00:05:53.497 I see. So, 1 million smiling employees. When did you start and how far have you gotten? 00:05:54.577 --> 00:06:00.537 We started two years ago with the first client who ran the whole program, 00:06:00.697 --> 00:06:01.937 the engagement producer program. 00:06:02.217 --> 00:06:07.797 And so far, it seems like we haven't come very far, but we have actually run 00:06:07.797 --> 00:06:10.517 the proof of concept. We stand at 65. 00:06:11.617 --> 00:06:13.377 65 smiling employees. 00:06:13.377 --> 00:06:18.817 Yes. So, yeah, it's minimum viable product, product testing, 00:06:18.917 --> 00:06:26.257 and now comes the time when we build the machine because we want more smiling faces. 00:06:26.257 --> 00:06:34.657 And that means also more smiling employers because it's extremely high correlation 00:06:34.657 --> 00:06:39.157 with productivity and other economic factors. 00:06:40.057 --> 00:06:46.577 Okay, that means for including this year, you have to put a smile on around 00:06:46.577 --> 00:06:48.917 100,000 employees per year. 00:06:49.117 --> 00:06:54.917 And I assume it will go like a little bit more fewer this year, 00:06:54.937 --> 00:06:56.977 and then getting on and on and on. 00:06:57.537 --> 00:07:05.877 Yeah, we're planning to sort of start scaling, fully scaling in about three years. 00:07:06.057 --> 00:07:08.457 So that's when it takes off. 00:07:09.157 --> 00:07:13.977 I see. Let's get back to our favorite word. You've argued that Fachkräftemangel 00:07:13.977 --> 00:07:17.057 is often self-inflicted. What's behind this provocation? 00:07:17.897 --> 00:07:23.557 Well, I think that a lot of companies, because they don't invest enough into 00:07:23.557 --> 00:07:29.317 the relationships they have with their employees, have the problem of a lack 00:07:29.317 --> 00:07:32.037 of skilled labor, of Fachkräftemangel, 00:07:33.917 --> 00:07:35.497 they're actually to blame themselves. 00:07:36.417 --> 00:07:40.577 You know, it doesn't happen by itself, you know? 00:07:40.737 --> 00:07:47.637 It's like, I don't know who said that, but if you say that, if you liken a really 00:07:47.637 --> 00:07:50.757 competitive corporate culture with climbing a high mountain. 00:07:52.162 --> 00:07:55.302 Then, you know, if you see someone 00:07:55.302 --> 00:07:59.442 on top of a mountain, you can be fairly sure they didn't fall there. 00:08:00.182 --> 00:08:03.642 So it doesn't happen automatically. You need to climb the mountain. 00:08:03.842 --> 00:08:07.222 So it usually requires a transformation. 00:08:07.822 --> 00:08:11.682 It requires investment of time and resources. 00:08:12.782 --> 00:08:19.802 And you don't get there. It's as unlikely to just happen to have a strong brand, 00:08:20.162 --> 00:08:27.262 which also everybody would say, okay, yeah, I agree that doesn't happen automatically. 00:08:27.262 --> 00:08:32.722 It takes three to five years to build a strong brand with a lot of investment and dedication. 00:08:33.902 --> 00:08:39.322 And the same goes for a strong corporate culture that has a high engagement level. 00:08:40.922 --> 00:08:44.522 We're talking mostly because that's a main concern of our main audience. 00:08:44.682 --> 00:08:48.682 Fachkräfte, meaning qualified employees, for example, doing marketing, 00:08:49.022 --> 00:08:52.882 most of the time doing coding or engineers and so on and so forth, 00:08:53.862 --> 00:08:55.322 highly qualified people. 00:08:55.542 --> 00:09:00.462 I was wondering when I was thinking about that, how high does it apply? 00:09:00.642 --> 00:09:05.082 So how high can you really put that in terms of level? 00:09:05.202 --> 00:09:11.882 Because most people who would be subject to this magnetic company culture would 00:09:11.882 --> 00:09:16.122 be on the employee level. But basically, you have to scale it all the way up 00:09:16.122 --> 00:09:18.302 the ladder up to the top management, right? 00:09:19.442 --> 00:09:23.202 Yes, that's why you – I mean, if you run a transformation program, 00:09:23.202 --> 00:09:28.782 my belief is you always have to go top down, whatever you want to transform. 00:09:29.142 --> 00:09:33.522 And in this case, you want to increase the emotional connectedness people feel 00:09:33.522 --> 00:09:35.922 with their employer, i.e. engagement. 00:09:36.242 --> 00:09:39.682 You know, that's my translation of engagement, emotional connectedness. 00:09:39.682 --> 00:09:44.062 And if you want to transform that within the organization, you have to start top-down. 00:09:44.482 --> 00:09:46.862 So I always start with C-level. 00:09:48.242 --> 00:09:53.962 Okay, we are already in your framework. Let's define your core framework. 00:09:54.882 --> 00:09:58.542 What makes a company culture truly magnetic? 00:10:00.364 --> 00:10:07.484 For me, the key factor is actually what the Gallup Institute, 00:10:07.764 --> 00:10:13.504 the American Research Institute Gallup calls engagement, and I translate as 00:10:13.504 --> 00:10:15.564 meaning emotional connectedness. 00:10:15.684 --> 00:10:20.384 If you have a high emotional connectedness with your employer, 00:10:20.724 --> 00:10:22.684 you have a magnetic culture. 00:10:22.844 --> 00:10:29.184 So the majority of people have a high likelihood to actually recommend their 00:10:29.184 --> 00:10:32.604 place of employment to others. 00:10:32.824 --> 00:10:34.884 That is the highest level. 00:10:37.364 --> 00:10:46.804 And many people do confuse company culture, having a good company culture with having a fancy office. 00:10:47.024 --> 00:10:54.044 Can you try to differentiate between having a fancy office and having a fancy 00:10:54.044 --> 00:10:55.404 or magnetic company culture? 00:10:56.504 --> 00:11:02.024 I mean, I would say that having an office where people like to go to, 00:11:02.264 --> 00:11:07.804 whether it's fancy or not, you know, you can debate whether the fanciness actually 00:11:07.804 --> 00:11:08.984 makes people want to go there. 00:11:09.184 --> 00:11:15.364 I think that a shoddy office actually is a disincentive for people to go to the office. 00:11:15.524 --> 00:11:21.264 So if people, if companies complain that people are working from home too much, 00:11:21.484 --> 00:11:24.344 they need to make it attractive to get to the office. 00:11:24.344 --> 00:11:30.404 I think that having an office where people like to go to is very important because 00:11:30.404 --> 00:11:32.404 that's where they meet. That's where they connect. 00:11:32.604 --> 00:11:34.704 That's where they interact. 00:11:36.444 --> 00:11:41.564 I know you can feel connected when you work remotely, but a lot of companies 00:11:41.564 --> 00:11:47.964 post-COVID have actually realized that you need to be together at times, 00:11:48.184 --> 00:11:51.084 particularly when you work creatively and as a team. 00:11:52.550 --> 00:12:01.390 Does your framework therefore also or only partially apply to fully remote companies? 00:12:01.910 --> 00:12:07.390 I would say it applies to all companies because what it does, 00:12:07.650 --> 00:12:09.930 it works with what is, right? 00:12:09.930 --> 00:12:17.330 I mean, whatever your setup is, and if you measure how connected people are, 00:12:17.630 --> 00:12:22.790 that's where you will get some responses as to how you can improve it. 00:12:23.770 --> 00:12:28.450 And if people say, you know, because when you ask the question, 00:12:28.630 --> 00:12:33.490 how likely is it that you recommend the employer, you get a figure. So that's descriptive. 00:12:34.970 --> 00:12:43.870 All the people are asked a second question, which is, if you're a 9 and 10, what did we actually do? 00:12:44.930 --> 00:12:48.630 What actually caused you to give us a 9 or a 10? 00:12:49.950 --> 00:12:54.770 And then you get an open-ended question and people can write whatever it is 00:12:54.770 --> 00:12:56.170 that they love about the company. 00:12:56.170 --> 00:13:03.550 And one of those things you do to get your employee to 9 or 10 on a net promoter 00:13:03.550 --> 00:13:07.430 score is what you also call engagement boosters. 00:13:08.530 --> 00:13:14.770 What is it? Can you walk us through and why it's so deceptively effective? 00:13:16.055 --> 00:13:19.355 Yes. I mean, what, what, what, what I've spent a lot of time, 00:13:19.515 --> 00:13:27.155 I, I would say that I've been thinking about company culture from since I finished university. 00:13:27.535 --> 00:13:32.255 Um, the first time I ever got, got in a context with, with, with corporate culture, 00:13:32.375 --> 00:13:36.975 I was still at university because I wrote an essay on corporate culture, 00:13:37.195 --> 00:13:40.835 marketing strategy to corporate success because I wanted to win an internship 00:13:40.835 --> 00:13:42.135 with Lufthansa in New York. 00:13:42.955 --> 00:13:44.875 That was one of the prizes. Yeah. 00:13:45.055 --> 00:13:45.795 Did you get it? 00:13:46.055 --> 00:13:52.175 And I got it, yeah. And that set me up for marketing because I'd never studied any marketing. 00:13:52.455 --> 00:13:55.175 So actually, that's corporate culture. That's where he started. 00:13:55.335 --> 00:14:00.395 And I got to know corporate culture and worked as a consultant for many years. 00:14:01.075 --> 00:14:07.995 And now since 10 years, I've dedicated my life to working on culture and coaching leadership topics. 00:14:08.695 --> 00:14:11.835 So that's the background story. 00:14:11.835 --> 00:14:18.635 Um, but my engagement booster program base is based on, um, 00:14:19.275 --> 00:14:24.795 the, the assumption that there are always lead measures that have an over proportionate 00:14:24.795 --> 00:14:29.295 influence on whatever you, the goal you want to achieve. 00:14:29.435 --> 00:14:34.735 And the big audacious goal that we want to achieve is we want to move that fairly 00:14:34.735 --> 00:14:39.375 fluffy sounding engagement, which isn't that, which isn't fluffy at all, you know, 00:14:39.535 --> 00:14:43.455 but it's, it's like a big rock and we want to move it and what are what are 00:14:43.455 --> 00:14:49.675 key levers and those levers are behaviors that you can display daily or weekly 00:14:49.675 --> 00:14:58.495 so something that you can do or whoever you are in the organization any day of the week, 00:15:00.175 --> 00:15:01.015 That's a lever. 00:15:01.795 --> 00:15:04.955 Can you give us an example of such engagement boosters? 00:15:05.215 --> 00:15:08.895 I have identified three, and I wouldn't say they're the only ones, 00:15:08.955 --> 00:15:12.135 but they have an over-proportionate influence on engagement. 00:15:12.335 --> 00:15:15.235 The first one I call connective listening. 00:15:15.675 --> 00:15:19.855 So that's listening with the intent to strengthen the connection. 00:15:20.355 --> 00:15:25.535 Like if I'm listening to you, not with the intent to reply, but actually with 00:15:25.535 --> 00:15:27.915 building a connection, something changes. 00:15:29.135 --> 00:15:33.235 Now, we're in an interview, so, you know, it's not necessarily, 00:15:33.515 --> 00:15:37.895 you know, we will create a connection through the interview if we also listen to each other. 00:15:38.135 --> 00:15:44.935 Um, but it's a mindset and then it's also a practice and the, 00:15:44.935 --> 00:15:49.555 the economic benefit of that is first and foremost, that you reduce, 00:15:49.555 --> 00:15:52.075 reduce the number of misunderstandings that happen. 00:15:52.075 --> 00:15:59.275 And one of the big, you know, big bad things that happen in organizations that 00:15:59.275 --> 00:16:04.355 negatively influences the feeling of emotional connectedness are misunderstandings. 00:16:04.455 --> 00:16:06.995 And it's also the biggest productivity killer. 00:16:07.595 --> 00:16:11.135 So the other thing that happens, it builds trust. 00:16:11.395 --> 00:16:18.595 So on one hand, you have a very economic impact. You reduce misunderstandings 00:16:18.595 --> 00:16:21.655 and you increase productivity automatically. 00:16:22.295 --> 00:16:26.575 If everybody stops interrupting each other and people start listening to each 00:16:26.575 --> 00:16:31.695 other, really making sure they understand and they build a connectedness among 00:16:31.695 --> 00:16:35.835 each other, that productivity increases and trust increases as well. 00:16:36.955 --> 00:16:44.095 Because if you kind of put yourself in a situation where you're in conversation 00:16:44.095 --> 00:16:49.475 with someone and you realize someone is actually truly listening to me and seeking 00:16:49.475 --> 00:16:52.155 to understand me, you will open up. Thank you. 00:16:53.496 --> 00:17:02.016 And wherever trust is high, speed of execution goes up and transaction costs go down. 00:17:02.636 --> 00:17:08.456 I like that idea for multiple reasons, because my next question, 00:17:08.456 --> 00:17:16.376 we'll soon get to that, is talking about emotional connections that also disqualifies. 00:17:17.456 --> 00:17:21.476 If you can measure that, if you're really serious about that, 00:17:21.656 --> 00:17:28.776 that can basically help reduce the number of bad bosses if you're not just looking 00:17:28.776 --> 00:17:32.656 at financial KPIs, which is something I really, really like. 00:17:33.256 --> 00:17:39.016 And going to my next question, the emotional connection is now a new business KPI. 00:17:39.316 --> 00:17:42.276 How can companies start measuring that? 00:17:43.156 --> 00:17:49.776 Well, the simplest way that I know of is measuring net promoter score. 00:17:50.036 --> 00:17:54.996 So you measure the employee net promoter score by asking that very simple question. 00:17:55.656 --> 00:17:59.576 You can either do it yourself or you can have someone like me do it for you, 00:17:59.576 --> 00:18:04.676 which increases the likelihood if you do it externally that people will be honest about their responses. 00:18:05.416 --> 00:18:11.256 So you can do it internally, yes, but if you want to have really honest responses, 00:18:11.276 --> 00:18:14.296 you usually outsource this because then you have... 00:18:15.353 --> 00:18:19.413 The less likelihood that people would think if I am really honest about what's 00:18:19.413 --> 00:18:23.233 wrong here and what needs to change, I will not suffer any consequences. 00:18:23.993 --> 00:18:27.653 But that's what you can do. You know, you can, you can, you can measure that. 00:18:27.773 --> 00:18:31.453 You can ask that question. You could, there are other methodologies that you can use. 00:18:31.713 --> 00:18:34.373 Um, there's a Gallup engagement index. 00:18:34.673 --> 00:18:38.913 You can, you can enlist Gallup. That's 12 questions. So-called Q12. 00:18:39.193 --> 00:18:40.553 That's another way of doing it. 00:18:40.873 --> 00:18:45.973 So there is a number of different ways of measuring that, But I love it if you 00:18:45.973 --> 00:18:49.453 measure it, because what you can measure, you can manage. 00:18:50.073 --> 00:18:51.973 What you can't measure, you can't manage. 00:18:52.793 --> 00:18:58.773 Exactly. The thing is, I was thinking at one point, because you have an MVP, 00:18:59.133 --> 00:19:06.693 but at one point down the road, this KPI would also influence and show up in 00:19:06.693 --> 00:19:09.793 other KPIs that you then usually measure. 00:19:09.973 --> 00:19:14.993 For example, what comes to mind is employee turnover. Absolutely. 00:19:15.833 --> 00:19:19.133 Sick leave, productivity. 00:19:21.833 --> 00:19:28.573 What's one cultural shift you've seen transforming hiring or retention metrics overnight? 00:19:29.193 --> 00:19:38.213 One of the clients that I've been working with, they report that the quality 00:19:38.213 --> 00:19:42.913 and numbers of their employees, of their, of their, um, 00:19:44.873 --> 00:19:50.573 of people that have their applicants have significantly increased within less 00:19:50.573 --> 00:19:53.673 than a year since they ran the engagement booster program, 00:19:53.833 --> 00:20:00.613 which isn't surprising to me, you know, because, because what it does, it actually, 00:20:03.002 --> 00:20:06.982 changes the way that people work with each other and that in today's world, 00:20:07.322 --> 00:20:16.582 fast-moving world, translates into social media buzz and very clearly things 00:20:16.582 --> 00:20:18.322 like Glassdoor or Canuna Ratings. 00:20:18.422 --> 00:20:23.882 We said that more applications, in the back of my mind, they just started a 00:20:23.882 --> 00:20:26.902 small Joe jumping up and down with the sign Fachkräftemangel. 00:20:27.742 --> 00:20:32.702 Exactly. And for that company, that's hugely important because they're growing at a double-digit 00:20:33.002 --> 00:20:39.022 So that is not something that's not a small thing, you know, 00:20:39.102 --> 00:20:45.042 if you are desperately looking for highly qualified staff to fuel your growth, 00:20:45.222 --> 00:20:48.322 if you can't get them, you get what I call non turnover. 00:20:48.822 --> 00:20:55.362 You know, you get a lack of growth simply because you can't staff your projects. 00:20:56.222 --> 00:21:04.082 Yeah. I'm always curious about the experiences of our audience. 00:21:04.082 --> 00:21:08.882 So I was wondering, guys, what's the smallest cultural habit that make a big 00:21:08.882 --> 00:21:10.402 difference in your company? 00:21:10.662 --> 00:21:17.682 Share it with us on LinkedIn or tag us at xbluesky or threads at Startup Radio. 00:21:19.422 --> 00:21:24.542 Christian, let's do a deep dive leadership, trust, and culture design. 00:21:24.862 --> 00:21:30.702 You speak about leading with love instead of fear. What does it mean in the boardroom? 00:21:32.402 --> 00:21:38.302 Just to be sure nobody heard this wrong. I said boardroom, you dirty minds. 00:21:42.019 --> 00:21:46.819 Well, I think, I think it's a choice that every leader has, how do you want to lead? 00:21:47.019 --> 00:21:53.839 So if you, if we, we contrast the two, two, two paradigms, 00:21:54.019 --> 00:21:57.019 then leading with love would be seeing the person, 00:21:57.199 --> 00:22:03.719 um, as well as the financial KPIs and figures and leading with fear usually 00:22:03.719 --> 00:22:09.999 means seeing less the person, but just using people to achieve your means, 00:22:10.039 --> 00:22:11.579 which is a huge difference. 00:22:12.019 --> 00:22:19.099 Right? Um, and if you lead with love, it doesn't mean that you are fluffy or soft. 00:22:19.279 --> 00:22:24.039 It means that you are respectful, firm, have clear, have a clear vision, 00:22:24.039 --> 00:22:29.919 but people actually are a huge decisive factor in your, in your, 00:22:30.059 --> 00:22:31.759 in the way that you manage and lead. 00:22:32.559 --> 00:22:37.459 If you lead with fear, people are usually not really a big factor. 00:22:37.639 --> 00:22:42.419 You, I've heard people say that it doesn't really matter who we have. 00:22:42.559 --> 00:22:45.119 Anybody can be substituted. 00:22:45.299 --> 00:22:49.339 So we use people, throw them away, and get new ones. 00:22:50.639 --> 00:22:59.479 And in a situation where you have Fachkräftemangel, that is something that you 00:22:59.479 --> 00:23:02.439 need very deep pockets to be able to afford. 00:23:03.239 --> 00:23:15.879 So I think it's a hugely, it's a highly economic business figure or related 00:23:15.879 --> 00:23:22.059 paradigm shift that you will see in the bottom line. 00:23:22.179 --> 00:23:26.699 If you move from a management by fear to a management by love, 00:23:26.819 --> 00:23:31.719 love sounds so fluffy, but love just means that people actually play a huge role. 00:23:32.579 --> 00:23:34.899 What does it mean? It means that you. 00:23:36.905 --> 00:23:44.385 In very economic terms, it means that you put people away from the P&L into the balance sheet. 00:23:46.265 --> 00:23:51.285 You get the point? You know, human resources are not in the balance sheet, 00:23:51.485 --> 00:23:53.025 which is why they're treated as costs. 00:23:54.625 --> 00:23:58.825 So they're treated worse than machines that are actually in the balance sheet, 00:23:59.525 --> 00:24:04.965 and that are written off. So you need to reinvest continuously in your machinery 00:24:04.965 --> 00:24:09.565 equipment, and your technical equipment, because it needs to be renewed. 00:24:10.565 --> 00:24:16.505 So if you make that kind of change in thinking, you're actually moving towards 00:24:16.505 --> 00:24:20.825 the love side, away from the fear side. 00:24:22.425 --> 00:24:26.665 I mean, nobody would beat their machine up, would they, literally or figuratively? 00:24:27.565 --> 00:24:32.585 Actually, what always comes to mind is the typical Machiavelli misquote, 00:24:32.585 --> 00:24:37.805 it's better to be feared than to be loved. 00:24:38.065 --> 00:24:42.465 Actually, he said you need both, but if you can have only one, 00:24:42.765 --> 00:24:46.545 it's better to be feared than to be loved. So you need both guys. 00:24:46.925 --> 00:24:50.865 More love in the boardroom, you dirty minds. 00:24:53.625 --> 00:25:02.065 I mean, that's why this is provocative, and I would like to take away all the red hearts from that. 00:25:02.065 --> 00:25:09.245 But I think it is more, and I would sort of disagree with Machiavelli, you need respect. 00:25:11.945 --> 00:25:19.025 But what you want as any kind of type of leader is you want to be able to tap 00:25:19.025 --> 00:25:22.425 into the full resources of all the people that you work with. 00:25:22.605 --> 00:25:24.665 And that is something that you can't force. 00:25:26.742 --> 00:25:32.542 So if you want someone to go the extra mile, if you want someone to give you 00:25:32.542 --> 00:25:37.322 120% or 150% of their time and energy, 00:25:37.922 --> 00:25:41.862 they will have to give that by their free will. 00:25:42.522 --> 00:25:48.302 Otherwise, they won't give it long term. They will do it for some time if it's 00:25:48.302 --> 00:25:52.102 purely transactional, and then they will leave for somewhere where they get 00:25:52.102 --> 00:25:54.502 paid more. They become mercenaries. 00:25:54.982 --> 00:25:58.522 There is no relationship. It's purely transactional. And that's, 00:25:58.742 --> 00:26:02.682 you know, when you have high engagement, it's no longer purely transactional. It's relational. 00:26:04.202 --> 00:26:11.882 You also talk about feed forward. Why is it more powerful than feedback in today's work culture? 00:26:12.302 --> 00:26:17.902 I would say you need both. You know, I'm not at all against feedback. 00:26:18.222 --> 00:26:24.122 Feed forward is much lighter and it is forward looking. It is future driven. 00:26:24.122 --> 00:26:26.982 It is linked to potential. 00:26:27.142 --> 00:26:30.262 It's linked to growth and development. 00:26:30.642 --> 00:26:35.502 And that's why it is a hugely valuable complement to feedback. 00:26:36.362 --> 00:26:39.962 It is also easier to give. It's easier to implement than feedback. 00:26:40.142 --> 00:26:44.202 Feedback, you can do so many things wrong in feedback. So you really need to 00:26:44.202 --> 00:26:46.142 learn it. You need to teach your people. 00:26:46.262 --> 00:26:50.602 You need to train your people to give proper feedback that is useful and helpful 00:26:50.602 --> 00:26:51.842 and it builds performance. 00:26:52.122 --> 00:26:56.822 Feed Forward will always do that. Feed forward will help you build performance, 00:26:56.822 --> 00:27:02.542 will help you instill a paradigm of excellence in your organization. 00:27:02.542 --> 00:27:07.622 It will improve solution focus and solution capabilities. So there's a lot of, 00:27:07.622 --> 00:27:11.822 um, a lot of great, um, benefits of feed forward. 00:27:12.162 --> 00:27:12.862 Mm-hmm. 00:27:14.634 --> 00:27:22.014 How do you help companies diagnose their culture in a way that's objective and not fluffy? 00:27:22.294 --> 00:27:26.494 I assume you first do a net promoter score and then? 00:27:27.614 --> 00:27:34.594 Well, then what that enables you to do is to actually get a status of this is where we are. 00:27:34.814 --> 00:27:38.214 And the good thing about net promoter score is that you can actually benchmark 00:27:38.214 --> 00:27:39.494 yourself against others. 00:27:40.114 --> 00:27:46.894 So you know where you are in relationship perhaps to similar companies that 00:27:46.894 --> 00:27:49.794 you want to compare yourself with. 00:27:50.534 --> 00:27:56.354 And that means that you have a baseline that you can then formulate objectives against. 00:27:57.914 --> 00:28:02.934 So that's the first thing that we do. When we look at the results from the survey, 00:28:03.174 --> 00:28:05.314 the next step is to say, where do we want to go? 00:28:06.014 --> 00:28:09.494 Where do we want to be in six months, 12 months, 18 months, 24 months? 00:28:09.614 --> 00:28:13.334 We don't have to look any further. We could say, okay, what's our five-year vision? 00:28:13.774 --> 00:28:17.434 That's possible. But then I would be very operative. I would say, 00:28:17.534 --> 00:28:19.474 okay, let's look at the next 12 months. 00:28:19.774 --> 00:28:22.674 What do we want to achieve and how do we get there? 00:28:23.534 --> 00:28:28.814 And then we define measures how to get there based on the responses that we get. 00:28:28.934 --> 00:28:32.974 Let me talk a little bit around my next question. And it's about the hidden 00:28:32.974 --> 00:28:36.674 cost of disengagement that most companies underestimate. 00:28:36.674 --> 00:28:42.874 So basically, if you do that thoroughly and well, get people more engaged, 00:28:43.054 --> 00:28:46.014 you will see KPIs going up. 00:28:46.154 --> 00:28:50.114 But what is the downside when you don't have engaged people? 00:28:50.194 --> 00:28:55.834 You can say basically all KPIs are going down, but do you have some experience 00:28:55.834 --> 00:28:59.074 of your limited experiments that you did? 00:28:59.074 --> 00:29:06.194 Which KPIs are going to improve by rule of thumb or something that people can 00:29:06.194 --> 00:29:11.914 get an idea of what they are underestimating with the bad company culture there? 00:29:12.614 --> 00:29:19.894 Well, for instance, let's take turnover, employee turnover. 00:29:20.474 --> 00:29:24.414 Employee turnover, there is some turnover that you want to have. 00:29:24.534 --> 00:29:25.754 You want to have some movement. 00:29:26.454 --> 00:29:31.614 But the unwanted turnover is something that costs companies huge amounts of money. 00:29:32.034 --> 00:29:37.994 And if you can reduce that, and that will reduce if you increase the number 00:29:37.994 --> 00:29:43.094 of highly engaged people, because they will not want to leave as easily as, 00:29:43.214 --> 00:29:46.594 as people who have not got any strong emotional connectedness. 00:29:47.414 --> 00:29:52.194 And so that is one that people underestimate the company companies underestimate 00:29:52.194 --> 00:29:59.634 how, because there is no line in the PNL for turnover, but they underestimate how much it costs them. 00:30:00.987 --> 00:30:07.187 Often what they do is they say, okay, how much money does the average person, 00:30:07.307 --> 00:30:09.927 do I pay the average person? What are my costs? 00:30:10.167 --> 00:30:16.087 And what I always challenge them with is do you actually hire an employee to 00:30:16.087 --> 00:30:21.587 just deliver the value that they cost? That would not be good business. 00:30:22.107 --> 00:30:30.787 Good business is you need to get a return of a minimum of two and a half times 00:30:30.787 --> 00:30:32.347 the investment that you give. 00:30:32.507 --> 00:30:40.507 So let's say someone makes 100,000 Euro and you have what we in German call 00:30:40.507 --> 00:30:46.987 another nice word, so all the other costs associated, another lovely German word, very long, 00:30:47.547 --> 00:30:52.867 all the other costs associated with the employment is usually between 25 and 00:30:52.867 --> 00:30:57.487 50%, depending on the number of benefits, et cetera, et cetera, that you get. 00:30:57.487 --> 00:31:03.767 We made add for our audience around 80, 85% of our audience is based in the Dach region. 00:31:03.987 --> 00:31:08.827 So nonetheless, we added for like the 20, 50,000 that are listening to this 00:31:08.827 --> 00:31:11.727 interview without knowing that. 00:31:11.887 --> 00:31:14.067 So there's social security in Germany. 00:31:14.247 --> 00:31:19.427 And most of it is split 50, 50 between employer and employee. 00:31:19.427 --> 00:31:24.887 That means if you pay an employee 5,000 euros, he'll have something like 500 00:31:24.887 --> 00:31:27.687 euros social security costs that you need to match. 00:31:29.147 --> 00:31:37.007 And the minimum loan-eben cost in Germany is 22.5%, but most companies have more. 00:31:37.247 --> 00:31:41.627 So let's say it's 50% just for simplicity's sake. 00:31:42.187 --> 00:31:51.187 Then if someone, let's say it's a complex job, so it takes you one year to get up to speed, right? 00:31:52.561 --> 00:31:57.581 You hire someone and from the day of hirement and the first day in the office 00:31:57.581 --> 00:32:02.381 until they are as high performing as their colleagues in the same job who've 00:32:02.381 --> 00:32:06.961 been there for two years, let's say it takes 12 months. Quite often it takes longer. 00:32:07.301 --> 00:32:12.381 Anybody who's in sales or whatever knows that. But let's be very simple. 00:32:13.241 --> 00:32:19.501 Then a lot of people would say, okay, then turnover of one person will be 150,000 euro. 00:32:20.121 --> 00:32:27.061 But that's not true because the minimum that you have to have is two and a half times that much. 00:32:27.601 --> 00:32:33.421 So two and a half times that much, you know, simple maths is 250,000, 00:32:33.701 --> 00:32:37.721 325,000 euro, right? That's the minimum. 00:32:38.041 --> 00:32:42.261 If you have a company where the turnover per capita is higher, 00:32:42.501 --> 00:32:46.041 like many software companies, whether it's 500,000, 750,000, 00:32:46.201 --> 00:32:49.181 1 million, you know, then it's that figure. 00:32:50.581 --> 00:32:56.301 That you need to calculate with. So if you have a 100-person company where you 00:32:56.301 --> 00:33:03.041 have 10% turnover at, let's say, $325,000 a person, 00:33:03.961 --> 00:33:06.141 that's $3.25 million a year. 00:33:09.207 --> 00:33:14.327 So if you can reduce that by 50%, you've saved half of that. 00:33:14.667 --> 00:33:19.047 You've saved 1.65 million. 00:33:20.647 --> 00:33:25.167 Let's give a short break to all the C-level executives and founders who are 00:33:25.167 --> 00:33:27.067 now doing some calculations in their head. 00:33:32.527 --> 00:33:38.207 And that's just one of the metrics. Another one would be sick leave, 00:33:38.227 --> 00:33:39.667 and you can do the same calculation. 00:33:40.687 --> 00:33:45.427 What's the average? You go to your HR department, you look up how many sick 00:33:45.427 --> 00:33:47.347 days do we have on average. 00:33:47.887 --> 00:33:55.227 In highly engaged companies, they're really low, and that is also a huge one. 00:33:55.707 --> 00:34:00.687 The biggest one, though, is if you're a growing company, and I know there are 00:34:00.687 --> 00:34:03.607