EPISODE 8 – Culture Trumps Everything – Keys for Internally and Externally Leading Companies Success
SoCap Talks with Devon Kerns, Eric Sutfin, and Gustavo
From graduating with a degree in clinical and school psychology to working at a correctional center, to running an inpatient drug program for the Federal Bureau of Prisons, it is no wonder the success that Dr. Gustavo has had in consulting. His experience in dealing with a wide variety of people has no doubt lead to the powerful changes he has brought about in many different companies and since moving to consulting in 2000, he has yet to look back.
Since first starting with organizational culture consulting, Gustavo now speaks on a national circuit creating change for organizations, specifically around employee engagement and relationships. His book, Culture Trumps Everything, explains the importance of culture, and how it is a predictive behavior for the success of an individual or company. Culture is a lot more powerful than people give it credit for. Join Gustavo and the team as they break down the fundamentals of culture as well as the advancement of it.
Welcome back to SoCap Talks helping innovators build tomorrow, today. Now, here’s your hosts: Devin Kerns and Eric Sutfin.
Eric: Alright, well, we are back at SoCap Talks. And today we have the distinct pleasure of having Dr. Gustavo join us. Thank you for being here today.
Gustavo: Good to be with you both. Thank you for having me.
Eric: Absolutely. You know, there’s a lot that we have to discuss here in this next 45 minutes or so. I know that you have spoken around the world about culture and had done a lot within this realm. Share with us a little about your background.
Gustavo: Sure. And I’ve been very lucky in that I made several professional transitions. So after graduate school, I typically tell people I spent four years in prison working a psychologist. So my degree is actually in clinical and school psychology. I went out and did a postdoc in forensic psychology where I worked at the Metropolitan Correctional Center in downtown Manhattan. And then I ran an outpatient I’m sorry, in-patient drug program for the Federal Bureau of Prisons, in Danbury, Connecticut then I did it for years of traditional mental health in in a place called Glens Falls, New York, outside of Lake George New York, upstate New York State. And then I moved in the year 2000, I moved into the consulting and I really never looked back. So I was a consultant for 10 years in the area of organizational culture, creating change for organizations, particularly with around employee engagement, employee relationships. And then 2009 2010, I started speaking and went on the national speaking circuit, I kind of stayed there since.
Devon: Without getting too political. I am curious, just because you don’t come across a lot of people that have spent that amount of time with prisoners and the prison system. What’s the personal biggest takeaway?
Gustavo: Wow, great question. I kind of talk about this in my book, the the biggest personal takeaway for me is that environment or what I talked about is culture, but our environment is a much better predictor of our behavior than our personalities or psychologies or human biology. But culture has a strong way of shifting our biology as well. And we know that through science, but we can get into that later. But the biggest takeaway to answer your question is that much of the behavior that we see whether it’s, you know, staying a political or if you wanted to go, we can go there, but
Gustavo: the behavior we see from our neighbors, from our friends, from our colleagues from people across the street is much more driven by the environment we create for people than their own personality, what they’re bringing to the table
Devon: and they’ve they found that about was watching and reading kind of from the same author that has a large part to do with addiction as well. People that continue to go back to the same environment have a tendency to stay
Gustavo: and having having worked in that field for several years, they’ve seen addiction, three things to change people, places and things, that’s the environment, it’s those environmental factors create a trigger, which tend to lead people back to addiction
Devon: great, awesome
Eric: so this why you say culture is everything, you actually have a TED talk about this, and people of course, and go and watch it outside of this, but overall, your concept that culture is everything, everything is dictated by this notion, right?
Gustavo: Right. So culture trumps everything. Yeah, culture trumps everything is the name of Ted, TEDex and also the name of the book, that’s also the name of the presentation that I’m doing. So yeah, the concept is that culture is a better predictive behavior. And it also changed our biology through epigenetics. So part of what I talk about in the presentation in the book is that much decisions we make around what we eat, what we drink, if we if we’re still if we exercise and how we manage stress, those are the things that we know change our epigenetics and those are all very much driven by our culture.
Eric: Now, of course, culture is in this case, you know, very of essence in our society, politics and our life. But you focus within the business realm as of late since 2001, you said, you then started speaking, working within the business environment, what have you found that has surprised you? Weekly, what stuck out in the business world about culture that most aren’t aware of requests.
Gustavo: Great question. So let’s start by giving people definition, okay, so culture is, the context in which we live in work, that that’s what makes it business, including beliefs, behavioral rules, traditions, and rituals. So those are the components of culture; beliefs are nothing more than the way we see the world. And I say, when you change the way you see the world, the world changes, which means you change your beliefs, your experience, the world is different, but you have a rules of the contexts or the rules of driver behavior, traditions, and rituals are simply things we do repeatedly. So that’s the definition of culture. And it’s if you want to look specifically at organizational it’s the environment or the context in which we live and work. Otherwise, we’re talking about culture at large culture in our society, which we can also get into, but with regard to one of the biggest, I think, misunderstandings, let’s say that people have about culture, a lot of people think it’s, you know, this amorphous thing that you can’t control, you can’t change it. And, and I think that’s the furthest thing from the truth. I talk about culture starting at the top of an organization flowing downhill like, with like water, with gravity affecting everyone that it touches. So from my perspective, it is the CEO’s role and primary responsibility to create a culture that everyone that is very clear with regarding to those components, beliefs, behavior, rules, traditions, and rituals that everyone follows.
Eric: Because if they don’t create it, the people on term are gonna create it, they’re gonna start shaping themselves
Gustavo: Exactly, I’ve had a CEO say, Well, you know, I don’t have a culture. And my response is simply you have a culture, you just don’t know it, and if you don’t know it, you have no influence over it. So as the CEO, you’re the one your primary from my again, my perspective, that’s your number one role, your number one responsibility, because everything else follows.
Eric: Culture doesn’t clock out at five o’clock.
Gustavo: That’s exactly right. That’s exactly right.
Eric: Yeah, this is cool. So now, when you’re going and speaking with organizations, small and large, what is the thing that you see impact them time and time again? Yes, they be they don’t influence it. But what is the thing that they’re coming back to you and saying, this has just transformed our organization?
Gustavo: Great question. So I think the biggest challenge for executives, and it depends on the size of the organization is an awareness that not only do you have an overarching culture, but you can also develop subcultures. So subcultures means that when you get people in groups together, whether it’s teams, groups for a project, you put them in different departments, different part of a building different geographically disparate areas of the country, you’re going to get subcultures. So what I talk about in my presentations, is, in addition to creating a culture, the CEO and I would argue that really moves more to the executive team, we can about the members of the culture too. But the issue for executives is you must make sure your subcultures are aligned, which means they’re all being now behaviors may look differently, let’s say, in an organization that has an office in San Francisco, Denver, New York City, but they have to be aligned around what are the beliefs what are the traditions and rituals and what drives those traditions. So to answer your question, subcultures is what people, I’m often brought into, kind of deal with, and make sure that they’re aligned.
Devon: One of the things I found is, as people explore the idea of creating culture, they don’t allow for freedom of expression within that culture, it’s almost too heavily dictated, what would you say to that, because there’s, there’s kind of a balance there isn’t there? There’s the idea that these are our belief systems values, and yet, you need diversity of thinking, you need
Devon: flexibility and freedom to function within those.
Gustavo: So people, and I think that’s a great point that you bring up that because people think diversity is ethnic diversity, it is in part, but there’s also a diversity of thought, diversity of habits, diversity of execution, the idea with regard to that type of diversity, and that flexibility, let’s call it is to have a culture that sets parameters around what is acceptable behavior, and then allowing people to choose where they fall within those parameters. So and I’m not saying that you don’t have accountability, I’m all about creating a performance based culture, which is all about accountability. But the issue is, from my perspective, as an example, with regard to flexibility, the 40 Hour Workweek, the nine to five, that is a remnant of Henry Ford in 1914, that’s it, we can get into that if you like. But the issue is that if someone can do their job and take two hours off in the middle of the day, and they are seat still part of the team, part of the culture part of the organization and meeting their specific goals, then I don’t care if they’re working from the beach, on a lift, or, or wherever they’re wanting, you know, that’s the type of flexibility that I talked about in, you know, let’s measure not, let’s not try and control people’s time, let’s agree to what the performance metrics are, and make sure everyone’s everyone’s meeting those goals.
Devon: I’d love to go down that rabbit hole, because I think so many businesses, including newer businesses, that are trying to think outside of the box are still, because of our education system, because of the Henry Ford Model, are stuck. And they don’t really understand the difference between where we should be going and why we’re so stagnant in the model.
Gustavo: So looking, let’s start with, can I start at the history,?
Gustavo: so here’s history. In 1913, Henry Ford and his Hyde Park plant had 14,000 positions he had to keep filled. In 1913, to keep those 14 thousand positions filled, he had to hire 52,000 employees. That’s a small city, that is a 370% turnover rate. It was eating him alive and he knew it. By the way, the top two reasons business fail in this country. Number one is under-capitalization, because they run out of money, number two is turnover. Top two reasons. So the turnover rate was eating him alive. At the time in 1913, he was paying people 2.25 a day, they were working nine-hour shifts, six days a week. 1914 again, because only because the turnover, he flipped his model changes model radically said, I’m gonna pay people $5 a day more than doubling their pay, they’re going to work eight hour shifts, six days a week, five days a week, eight hours, just five days a week. Think like Henry Ford a second, when you have nine-hour shifts, how many complete shifts do you get in 24 hour day?
Gustavo: Two right? When you go to eight hours, how many you get
Gustavo: he added one shift. In that year, alone with those changes, in that year alone, turnover went from 370 down to 16%.
Gustavo: And productivity across all three shifts went up by 40%. Between 1914 and 1919 in that five year period, productivity across all three shifts went up by 70%. And the cost of Model T went from $800 down to $350. So if you wonder why we have a 40 Hour Workweek, you can thank Henry Ford. It’s a remnant from that shift. That is, he and everyone else followed.
Devon: So that sounds like a win. Why not follow that model.
Gustavo: So it’s because it was a manufacturing model.
Gustavo: So we moved from our economy has moved from manufacturing to service. And I would argue today we’re more information technology-based society, or certainly, certainly economy. So in that model in a manufacturing model, and we can talk about, I’ve certainly worked a lot in manufacturing, I lived in North Carolina for 10 years. So I have great experience with manufacturing environments. But even in a manufacturing environment, to go back to your flexibility. You, if you build teams around performance of this machine, that’s got to run at this rate. With this level of quality, this level of productivity, you build a team around that, and you let them set the schedule, you tie them together with team building, you give them what I call a cause something larger than themselves, what the product how the product is going to touch people touch society, and they don’t drop the ball and they will set the schedule to keep that machine running 24/7 three-shift operation.
Devon: Yeah, that’s very interesting. What were you going to ask Eric?
Eric: No I was gonna echo that around performance today, you have an interesting concept that we talk about offline I’d like to reintroduce and that is this notion around performance and being able to exceed even that 40 Hour Workweek by this buying you’re talking about share what is the secret sauce today now then that companies can implement or at least be aware of and make progress towards
Gustavo: great question Eric? So in my book I call it Quintessence okay? So Quintessence is the effort and desire of the employee or let’s call it just more broadly members of the culture to go above and beyond the goal to contribute in ways that let’s say hourly employees wouldn’t because they check out at five o’clock so and I talked about Quintessence as being an organization’s competitive advantage. So I work with a lot with CEOs they’re always looking for what’s the competitive advantage what’s the competitive edge in their organization my response is always the same it’s your culture and it is specifically does your culture get your members the members of your culture to go above and beyond the goal so quick example here I use is Tesla. So Tesla motor vehicles, you know, it’s like a pure electric motor vehicle. Elon Musk went to his engineers and said, well, first let’s talk about the, let’s take a step back. So Tesla has a cause, again, I talked about cause as how your product or service changes the world or changes human experience the world which means changes people or touches people individually or touches society. So the cause at Tesla is we want to accelerate the adoption of electric vehicles and electric technology that’s their cause. The whole thinking is if we do that it’ll be better for the environment but for the planet, etc. it’s that line of thinking. The challenge to them achieving that cause is what’s referred to as range or distance anxiety. And people were afraid they’re gonna run out of juice and up with a thing of metal on the side of the road. So the first thing tested, did they build rapid, if you remember which I’m sure you do. They built rapid charging stations up and down the East-West Coast then a line across center of the country, not good enough. So Musk went to his engineers with whom uses what I call social Mars, which means he takes money off the table, he pays them fairly and reasonably then gives them the cause that I just shared with you and he said to them, we need your help to teach our customers that our car batteries are no different than a barbecue propane tank. So I want you my engineers to build a system that will allow our customers to drive into rapid charging station, drop their discharge battery and pick up a fully charged battery. And I want that exchange to happen in five minutes, or about the time it takes to fill a fossil fuel gas tank. You have six months to do it. They went off to meet that six-month goal, they met the five-minute goal in six months, they met that five-minute goal in four months, what do they do with the additional two months they created a system that executes exchange in 90 seconds. That is culture driven behavior, that is cause-driven behavior.
Gustavo: that’s how culture drive behaviors that that’s a traditional business can’t think about it. If Elon Musk said to his engineers, I will pay each one of you $100,000 for hitting that five-minute goal. What happened after four months, they would’ve been cashing checks. i
Devon: that’s right
Gustavo: f they would have stopped in five minutes, you know that’s what I’m saying that culture that that’s an example of Quintessence is going above and beyond the goal, that five minutes down to 90 seconds, didn’t cost them anything, it just gave them better product.
Eric: I love that example I’m looking at and hearing people’s stories about their 40 Hour Workweek and time again, as we’re going in and having interviews with people, they’re oftentimes as a culture where they’re able to achieve their goals within say, 20 or 25 hours of that 40 Hour Workweek. And then either they’re reprimanded or they’re not incentivized to be able to maximize the rest of that time. They’re asking for other projects, or trying to balance work between departments, they’re trying to exceed their goals, because that’s their inherent nature, where they do buy into the cause. But then the culture will often reprimand for that, what is the shift or the gap that management can make, so that not just these people, but others in the business community. And that’s great for companies like that that are so progressive. However, when we’re going into a lot of organizations, we’re seeing that there are those personalities which will go above and beyond, regardless of the cause, they’re just in their inherent nature, yet they’re reprimanded when in 25 hours during that work week, they fulfill their roles and responsibilities, so that remaining 20, 15 to 20 hours, they don’t know what to do, or the culture doesn’t incentivize or reward them to do that. So how, when, where within management do you help companies fuel this gap, so that not just these individuals which are overachievers, but the rest of the community business community can help with this Quintessence idea?
Gustavo: Thank you. Yeah, so great question. Let me, a couple of points I want to respond to first is when I hear, you know, will, that’s a personality, they’re just overachievers, while that may be their style and their personality, culture trump’s personality means that and I’m sure you guys have seen this too. If you take an A player and put them in a C culture, they become a C player, if you take a B or C player, and they you put them in an A culture and they want to be part of that culture, they become an A player. So I always caution about, well, that’s the personality because I’ve just seen potential, what I call potentially high performers putting a very poor culture and guess what, they’re not high performers anymore. Okay. So that’s the first the piece that you’re talking about. It’s like, what can leadership what can management do, to kind of create culture because I think the example you’re using is great for someone who is driven, let’s say, by the cause enough to complete what they’re in quotes, opposed to complete in 20 to 25 hours. And they’re in essence, being punished for finishing too quickly. And one of the, I often have walked into, again, manufacturing example where, you know, there’s a shift change, and I’m, they’re just watching the shift change when a person leaving goes the to the person coming in, Don’t work too hard. It’s like, what?
Gustavo: Yeah, that that is, that is the classic, you know, don’t make me look bad. So, you know, drag your feet, whatever. So the first thing I talk about is stop measuring time, stop measuring time, you know, if you were, if you were stuck in the 9 to 5, if you are stuck in the nine to five model, you were stuck in the Henry Ford Model. And, and, and I, even in manufacturing today, I think there’s many ways There are many ways you can offer tremendous flexibility around performance. If you’re manufacturing your manifest, manufacturing a product, if you’re providing a service, you’re providing a service to a person, an organization or someone. So I tried to build teams around the final product or service, and everyone is responsible for the quality of that product going out the door, whether it’s a product or service, that’s, that’s ultimately key. So if the person who finishes to answer going back to your example, if they finish in 25 hours, they are part of a team that has additional capacity, at least from that person. So they can jump in either into let’s say, customer service, or product delivery, or maybe be part of another team, or maybe start another project that can if they’re if they are a tightly knit team, and they have a strong performance-based culture, then that person is going to find additional things to support the team without being punished.
Eric: but it takes the culture for them to be able to be trained, or at least allow for the flexibility for that crossover.
Gustavo: Yep, I think
Eric: but again that’s back to culture, you need the operations and systems to be able to support that.
Gustavo: Absolutely agreed. So when you’re when you’re saying training I talked about rather than, so historically, for older generations, we all talked about, you know, a corporate ladder and today, I talked about a corporate lattice, like on a side of a house, and, and the idea of a lattice is we train people by ensuring that every position organization has a set of skills, core competencies, and those become the nodes in our lattice. And we trained people to those core competencies, regardless of where they are today, regardless of what they want to do today, we asked them, What additional skills would you like to learn from this lattice, you got it, you got an entire lattice to choose from. And we connect them with people to be coached to be trained, etc.
Devon: So we’re talking a lot about the performance side of things, and how important it is to create a culture where performance is rewarded, not just the hours you’re putting into something. On the flip side, how important particularly with this next generation coming up, is that lifestyle fit, is the quality of life and the allowing for someone to have a quality of life. And what does that do in regards to performance?
Gustavo: Great. So let’s, so let’s just since you’re talking about this next generation, let’s just define some generational stuff for so yeah, so baby boomers who are typically in the seat of power, and most organizations they are, they are born 46 to 64, which makes them if I get my math right this year, makes them 54 to 72 years old. Gen Xers and by the way, there were 84 million of them at their peak or 84 million of them in our population. Gen Xers are born between 65 and 81, which makes them 37 to 53 years old. And they’re 68 million of them. Much smaller generation. Millennials, now these numbers are soft, but this let’s say the standard with currently being used is 82 to 2000
Gustavo: Which makes them 36 down to 17ish. So and they are 79 million so demographically, we have 84 million boomers followed by 68 million Gen Xers, followed by 79 million Gen Y’s. Which means, demographically 84 million boomers leaving the workforce with only 68 million to backfill
Devon: mm hmm
Gustavo: that’s a 60 million person gap which means every organization in every industry is fighting for the same pool which in essence, in short, that means they are in the driver’s seat; that’s the demographic reality. So let’s talk about what they want so boomers were all about time and money, how much time they created the 70 to 80 hour work week how much time are you willing to put in at work? And money how much how much money can we make that’s what motivated boomers. Gen Xer’s which were much more about productivity and work-life balance, measure my time measure my productivity and I’m going to separate work life from my home life and make both are equally important, but they were separated. Millennials they’re motivated by what I refer to as blended life. Blended life means if everything I do has meaning significance big picture purpose and cause then work doesn’t feel like work, it’s just a part of my life. So that’s why I talked so much in both presentations both millennial presentation and culture presentation around cause because that’s the key. And that’s by the way the key to millennials and older generations to at this point is that if everything we do has meaning and purpose in our lives, then it doesn’t feel like something we have to do it feels like something we want to do so it doesn’t feel like work. So go back to your question. It’s really if you’re measuring a nine to five, my view for anyone but particularly a millennial, you’ll be lucky to keep them 12 months. They just won’t stay because that the nine to five is not how they live their lives. You know, from my perspective, we all want to be millennials
Devon: and a lot of baby boomers are shifting back to that mindset
Gustavo: and what the data say is that boomers are leaving the jobs they work for 20 to 25 years and going to do what they’ve always “wanted” to do so they are now much less motivated by money and much more motivated by relationships and cause, the types of things that
Devon: which is funny because they seem really confused by the millennial lifestyle but yet they’re jealous of it
Gustavo: here’s the jealousy is that Boomer and I’ve gotten, I can’t tell you the number, if I had a nickel for every time I heard this, I paid my dues; I want them to pay their dues! And I just say, look, I’m not suggesting they won’t pay their dues, let’s allow them to pay their dues differently.
Gustavo: that’s it.
Devon: That’s right. So when it comes to let’s, let’s say mission-driven, cause-driven, does it always have to be directly associated to the work that they’re doing? Or can it be associated to the outcome of the work that they’re doing? In other words, does the company need to have a huge mission and some sort of incredible cause attached to it? Or can the work that they do have an outcome that points in the direction towards something that matters to them?
Gustavo: Great question. I want to make sure I understand it. So let me first for everyone, let’s make it let’s make a clear distinction between mission and cause. Okay, so the mission is what you do. The cause is why you do it.
Gustavo: So that’s the hard-line distinction.
Devon: So it’s called cost.
Gustavo: Yeah, so does a company need to have a mission and cause I think it’s, it’s important for an organization to have a cause that everyone can tie themselves to. And it doesn’t even have to be, let’s say, if the majority of the product that the organization does. So I’ll give examples. Like last year, I was working with a cable manufacturer. 80% of what they make is just traditional copper cable. 20% of what they make its fiber optic cable, which is interesting, and only 10% of their employees work on their fiber optic line. So going through the process that I took them through their cause became, we help save lives. Now, that seems kind of a stretch. But how did they get there, we went through this process. And again, the concept here is, the process doesn’t come from a leadership team doesn’t come from me as a consultant it comes from the floor. So what we found was that of that 20% of their fiber optic cable, a large chunk of it goes into GE heart monitors and MRI machines to go into hospitals all over the country. It’s only 20% of what they make, and only 10% of their employees actually work on that line. But 100% of them think it’s cool. So that so that’s why I became their cause.
Devon: Mm hmm.
Gustavo: So again, your question of does it have to be their product? For me, it’s how, how, where does your product or service touch people or touch society? That’s not kind of the fundamentals so and we get to the questions like if we disappeared, what would our clients miss about us? If we weren’t here? Where would our clients go to receive the service they get? How do you talk about what you do to your friends outside of here? How do you talk about what you do to people who don’t know you? These are all questions that would inform cause.
Devon: how much, so let’s say a company’s 10 years old, they never really took the time to figure that particular cause driven message out for the internal motivation, they discovered that, how much of the value system should stem from the cause based campaign?
Gustavo: That’s a great question. Um, I think that the cause should fit neatly into the value system. So my guess is that and, you know, sometimes I would say, the cause has the capacity if it’s real to, let’s say, I wouldn’t say do a 180 but to redirect the value system. And I would suggest in in a positive way, if it’s something that again, they can all rally around, because the issue the biggest mistake that I experience with causes, you know, I’ll get a phone call, you know, and, and consulting side of my world, I get a phone call, it’ll be some executive saying, Yeah, we read your book, we hear you do this cause thing? Yeah. Well, we came up with a cause a couple years ago, and it never stuck. Well, my response, really,, why don’t you tell me how you went about doing this? And they will say something like, well, we took our executive team, we went on a two week or one week off-site, we create a cause we bought it back and never stuck. Gee, that’s a total mystery to me. I can’t imagine how that happened. You know, they never involved their employees
Gustavo: That’s the key. So if you’re, if your let’s say mission statement has something to do with profitability first, a strong causes is gonna shift that because a strong culture with a strong cause is to understand that profit follows culture.That’s what I refer to the Prophet paradox when you build a strong culture, and, you know, we don’t have the slides here. But I have a slide that documents companies that are focused on culture first, make more profit companies that focus on profit first, make less profit. And it just profit is just lot easier to measure. So that’s what people want focus on, but it ends up costing more.
Devon: that’s powerful. So you, you mentioned Tesla earlier regarding the ability to create an environment for performance when it comes to cause what’s a good example where a company has nailed that?
Gustavo: Well, I think Tesla has one. Who else can I mean, do you want public or ones that I’ve worked with? Because
Devon: you’re your favorite
Gustavo: Yeah, so I mean, I think the, the electric cable manufacturer, one that I really like, because that is the most recent one that I will, I’ll give you several. So I worked at the rebar manufacture, in a rural part of North Carolina. And, you know, the rebar goes into all sorts of schools and bridges and things like that. And their cause became we build the things that bring people together. Now, how do we get there. So again, we were going through this process, and we found out that a bunch of the rebar had gone, I’d gone to build a new Yankee Stadium in New York. Yankee Stadium is a place where people come together to celebrate their sports teams. And to celebrate John’s company, a large part of the rebar goes to build architectural bridges, architectural bridges, are beautiful to look at, and they span distant places to bring people together. So their cause became we build a thing that brings people together, for rebar manufacturing. So I worked with a pool cover manufacturer whose cause became we bring families together and keep them safe, a paving company, we paved the way for today and the future. And each one has a story, its own story, but a tire changing company whose cause became we get people back to work, you know, it’s where again, where does your product or service touch people or touch society?
Eric: overall, whether it be business or whether it be business or otherwise, all of this isn’t anything new. I mean, this goes back to people’s fundamentals nature of wanting to be able to be a part of something bigger than themselves and to have purpose and so we’re seeing now in commercialism this be adopted because people’s priorities are now shifting to more culture-centric businesses and dynamic supporting and, and buying products and services that support causes equally working for those four companies that are not prone to adapt for the ones that want to stay stagnant and not look at culture or address these issues within their company. How fast you see them going to the wayside because there will be common competitors, which are going to implement these principles. How quickly do you see that, you know, shifting even the fortune 500 companies?
Gustavo: Eric, great question. Let me just say, I think you absolutely nailed it. Because, again, this is what you nailed people’s primary human drives are to connect and belong, connect means build relationships with, belong, as you said, means to belong to something larger than ourselves. That’s, that’s what I refer to that as having our cause. So this transition, in my view, is accelerating. Why because of the generational shift we were talking about. I think, regardless of your generation, boomers have made the money they want to make are going to make, etc. So they’re following along in the shift. Gen Xers and look, I’m a Gen Xer and I’ll say, you know, we’re simply, demographically we are too small a generation to be influential in the workforce. And I’ll say, you know, as there were things the Gen Xers wanted to have in their work week, let’s say flexible jobs scheduled for four day work week that we tried to implement and got kind of overwhelmed by boomers.
Eric: you were outnumbered.
Gustavo: That’s exactly it, that’s exactly it. Millennials are making it stick. So the things some of the things that Gen X kind of tried to work we weren’t big enough a generation. Millennials are making it stick. So because look, unemployment let’s I think last numbers, I looked at unemployment nationally are 3.9% here in Colorado, they’re 2.6%. In a state like main, it’s 2.1 and the very conservative governor of Maine, Paul Page has started to commute inmate sentences to try and to try and get them out back into the workforce. Every again, but every company, every industry is fighting the same pool of employees, so my point is, it’s an accelerating factor, is that companies that can’t adapt or won’t adapt, are going to go the way the dinosaurs, you know,
Devon: cuz they don’t have a workforce.
Gustavo: that exactly, they won’t have people. That’s exactly right.
Eric: Or quality people. They’ll have people but they’ll be those ones that are buying into quiescence.
Gustavo: right or, or they don’t know how to build a culture to get in quotes, the right people, or the people who are willing to adapt to the culture that they create.
Devon: We’ve joked about this recently. But I feel like these people things are getting in the way of business
Gustavo: Right business would be easy if not for the people right?
Eric: one of these days, we’ll crack that code.
Devon: yeah those AI robots, they’re gonna be buying a lot of things.
Gustavo: Autonomy, autonomy is coming. You know, we can talk about automatic vehicles and autonomous vehicles, that that’s another kind of big challenge for society.
Eric: What’s in your view, how is that going to change society? Because there will be a lot of manufacturing jobs which support America that will be replaced by by automation? How is that going to affect the workforce? How are people income, he’s going to adapt? Or is it going to create new jobs? What do you see is happening in that regard?
Gustavo: Such a good question. All right. So quick example here. Okay. Today, there are about 8 million people that work in the transportation industry, from taxis to trucking, what have you. When you put the the technology of Uber, which obviously is well established, and the automated vehicle which is less than five years away, those people are out of a job to no fault of their own?
Devon: that’s right
Gustavo: What do you do with 8 million people in our society who are out of a job due to no fault of their own? That’s what I call a culture at larger societal question. And if you look in the literature, the answers are everything from you’re on your own to something in the neighborhood of universal basic income, or UBI. So the answer is we don’t have an answer as a society. But if you consider, well, think, again, the transitions we talked about in the late 1900s, 1800s, early 1900s, we were a manufacturing society manufacturing economy. In order to make the transition people basically went from the farm to the factory, both manual labor, they were transitions of skills, but all manual labor, most people made that transition. Then we went from manufacturing to service, well there’s another transition of skills. But it goes from manual to more people-oriented, and many people made that transition, but many did not. Now we’re going from service to information technology. And that transition is another huge transition. But more importantly, technology has accelerated the skills required to acquire the skills required technology. So the point is, if you don’t know where the on button is, on a computer, it’s very unlikely you’re going to be able to program code or run any type of computer or machine that works using a touchscreen as its interface. So my point simply is people’s if people say, well, you’re on your own, that may have worked on hundred years ago, because the skill set transition was much smaller in distance. Today, it is huge. So we don’t have an answer to your question. But what I’m saying is, this is something that we need to be thinking about as a society because I just in the in the driving example, in the transportation sample, 8 million people out of work?
Eric: that will shape our communities culture, and while it might be great for some businesses, it could severely impact society at large .
Gustavo: I believe it’s going to and I to your point, our community culture and we have subculture in the United States. You think about differences between east coast and West Coast, northeast, south-east, Denver and other cities, Denver midwest, there are different we have subcultures are our communities do indeed have subcultures, and I absolutely believe that different communities, different societies, different parts of our country, are going to deal with this problem very differently.
Devon: How important is that? So as an example, at SoCap, we’ve gotten heavily involved in the community, particularly the community that’s right around us. And we were talking about those circles, right? Richard Branson was talking about sub circles that are impacting your environment, both business and in personal. And then you expand out to the community right around you, your neighborhood, and then you expand out to the state, then you expand out to the US and then you look at global, right, and they’re all circles and what’s your influence within that? So for us, we’ve chosen to really own and love this lower downtown area Lodo.
Devon: within it, we see a lot of the same issues that we’re talking about within the business community, internally inside business happening within the district here, how important is it for not just businesses to be listening to this, but those neighborhoods and those communities in figuring out game plans to have strategy and implement ways to educate that would support these 8 million people and beyond?
Gustavo: Yeah, first, let me say, I think the fact that you guys are so community focused is going to be clearly your competitive advantage. Because it’s how people will know you, they will know you for not only your service, but how you’re affecting Lodo. So I hands down, I think that that is going to be your competitive advantage. I think it probably is already if it’s not, it’s and that again, is going to accelerate how I think that when you have businesses team together to shift the community, then again, you’re creating subculture in that community. And whether people work here live here. It’s like the air that we breathe, it’s like the water the fish swim in, you know, everyone’s affected by, you know, you can have let’s go back to our example of, you know, you can have a genetically perfect fish you put in toxic water, it’s not gonna live very long, you know, you put it in the type of water for whether it’s fresh water, salt water, the type of water, it needs, the right temperature, it will have a very fulfilling life, what you are doing is you’re creating that environment. You’re creating the water for the fish that the air that we breathe, it’s part of what we all live off of what we all share. So kudos to you. I applaud you for it
Devon: Thank you
Eric: So culture trumps everything you guys can be able to watch his TED talk, buy his book, visit Dr. Gustavo on doctorgustavo.com. One final takeaway if there are business owners or just community members at large listening to this whether we’ve addressed it or not, what’s something that they just need to recall to be able to share to implement what’s the biggest takeaway that you invite people to really take home?
Gustavo: yeah, I the biggest takeaway for me is the title culture trumps everything really means whether you’re an CEO, whether you are a leadership team leadership team member, or whether you are a member of a culture I think the biggest misunderstanding is or let’s say the undervaluing is the power of culture. Culture is a lot more powerful than people give it credit for. And if you are executive leaders and part of the leadership team, from my view, yes, we talked about performance is key. And I’m not suggesting culture allows you to drop performance. I know I’ve never load performance in organization. So the issue is culture is the primary driver performance. I’ve gone into organizations that you need to clarify your code you need to clarify your standard performance and to get some standards of performance but I’ve never said lower, the issue is you build a culture first, profit performance follow.
Eric: Beautiful well thank you so much for joining us on SoCap Talks, it has been an absolute pleasure.
Gustavo: My pleasure. Thank you so much to both of you
Devon: Thank you.
Eric: Thank you.
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