Dr. David Burkus’ forward-thinking ideas and bestselling books help leaders build high performing, cohesive, engaged professional teams. A former business school professor, David now works with leaders from organizations across all industries, including PepsiCo, Fidelity, Adobe, and NASA–and he’s also authored multiple bestselling books–including a new one, Best Team Ever, which published this year. David joined host Robert Glazer on the Elevate Podcast to discuss the strategies for leading, developing, and building high-performing teams.
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David Burkus On Building High-Performing Teams
David Burkus, Bestselling Author Of Best Team Ever, Joins Host Robert Glazer On The Elevate Podcast
Our quote for this episode is, “No one can whistle a symphony. It takes a whole orchestra to play it.” My guest, my friend Dr. David Burkus, is an expert on professional teamwork. He’s a prominent thought leader in business and leadership with five best-selling books translated into dozens of languages. David’s groundbreaking insights on leadership and teamwork have been featured in the Wall Street Journal, Harvard Business Review, and Fast Company among others. His latest book, Best Team Ever, is set to challenge conventional wisdom on team dynamics and performance. David, welcome back to the show.
Thank you so much for having me. I’m always excited for this. I feel like for the last few years, we have kept circulating the same ideas. The whole world went remote and then people were like, “Teach us how to go remote because that’s what you run.” I was already doing a book on that and then you did the Elevate Teams.
I don’t know who’s copying who.
What’s Steven Johnson’s whole thing about simultaneous invention? It shows me how much we’re interested in the same topics. We don’t always agree on those same topics, which is what makes our chats that people don’t get to listen in on so much fun.
I love this quote that someone said, particularly in the context of organizations having opinions. The head of Coinbase wrote a manifesto on this, Brian Armstrong, saying, “Even when we agree on the problem, a lot of us don’t agree on the solution,” which is true as well. You were a guest on episode number 17. We dug into your background. I encourage people to check that out. That was a while ago. I like to ask all my returning guests from pre-pandemic, what has changed in your life or business since March 2020?
The biggest one was when we chatted, I was still spending more time in the university setting than working directly with clients and organizations, which is flipped entirely. If you weren’t a hedge fund that happened to teach classes, a lot of universities hit a financial pinch. As soon as they started talking about downsizing, I was like, “I don’t need this job and there are plenty of great people who do. Please don’t think, ‘Let’s keep him.’” I self-selected out. I only teach one class a year as part of an executive doctoral program. I’m a lot more focused on that.
That’s part of a broader realization that a lot of people had during the pandemic. I ought to make my calendar my priority. Before the pandemic, most of us put work right in the middle of our calendar, 8:00 to 5:00 or 9:00 to 5:00 five days out of the week. If you pulled up any calendar app or daily planner, it was obvious that the center of that even visually was work, and everything else, we fit into the margins. COVID threw everyone’s schedules in a blender and made them realize, “I can build a schedule that works best for me.”
I’m still very focused on that. We are recording this on the 4 days in between 1 family vacation and another 1 where I’m working. That’s the best summer ever. It also takes that approach. I’m much more deliberate about scheduling the things that are priorities because partly, I’ve got that flexibility. I realize I say that from a place of privilege but there are a lot of people that had that realization. It also means that organizations are going to have to make do with the realization, especially with your top talent. We can’t demand that they put their commitment to us at the center of their lives anymore. We need to figure out a way to integrate it a whole lot better.
[easy-tweet tweet=”We can’t just demand that they put their commitment to us at the center of their lives anymore. We need to figure out a way to integrate it better.” via=”no” usehashtags=”no”]
I had a mentor. I know he probably didn’t say it. Most quotes are misattributed to the most well-known person who said it or whoever we heard say it. He said, “Show me your calendar and I’ll tell you your priorities. Let’s see if the rubber hits the road.”
Your calendar and checkbook. I was talking to Whitney Johnson, our mutual friend. She asked me, “What are you most proud of from last year?” I said, “I did our taxes.” When your taxes are complicated as ours always are, it takes until June to do them. That made me look at all of our family expenses. Our number 1 expense for 2022 was charitable giving, our number 2 was travel, and then our number 3 was housing. I realize I say that in a place of privilege but I’ve also worked a lot to get to that place of privilege where we could put those priorities. Calendar and checkbook are where your priorities are. Travel, for me, means family travel. It doesn’t mean me disappearing from my children or wife. It means that we did it together.
A lot of people have that revelation. Our work has mirrored each other. Coming out of the pandemic, you wrote Leading from Anywhere, which is about remote leadership. What I appreciate is there are a lot of academics. Part of the reason I wrote my book was I was getting so frustrated at academics writing books about remote work. Your style is to interview people and talk to people. If I think about the phases here and another interesting inflection, before COVID, there were all these companies that were like, “Remote work would never work. They are never for my business otherwise,” then they were forced to do it. For some, it worked well.
After the pandemic, we’ve got the Great Resignation. The investment banks and stuff were like, “You can work remotely and do whatever you want.” I was a little skeptical that people were saying this and not believing it and not supporting it, particularly around hybrid. The job market was super tight. I said to them, “We were a fully remote organization. Some people were getting offers. To be the one remote person in Pennsylvania on an entire team in California, be careful about that dynamic. That might not look and feel like it does at our organization.”
We’re in this other turn where we’re sorting out the pretenders from the people who wanted that change. You’ve got employees still declaring they never want to go back into the office. People are as disengaged and lonely as ever. It’s been quite a rollercoaster. I’m curious about your thoughts on where we are on this.
Predictions are tricky, especially about the future. I tried to make a few in the book. Some of them have come out true and some of them haven’t. My goal with Leading from Anywhere was to write that middle manager survivor guide. You’re exactly right. There are a lot of academics who write macro. They are like, “Here are the macro trends of remote.” Most people don’t care about that. Most people are like, “I was a manager. I was a leader. I was always in person and then COVID forced me to be a remote leader. What the heck do I do?”
Even then though, it was obvious to me having so many conversations with so many people in that situation that what we were headed for was something different than fully remote like what you built at AEP. I called it working from anywhere. It’s not work from home. It’s work from anywhere. We settled on a hybrid, which reminds me of the cars no one wants to drive. I digress.
The prediction that I had was that I wasn’t all that bullish on the future of remote work. Pre-pandemic, if you look at the American workforce, about 5% to 10% of the American workforce worked from home predominantly. We then had COVID. It feels like everyone worked remotely but it’s not true. The absolute peak was only 40% of the American workforce.
Probably white-collar professional services. You have plenty of restaurants and delivery.
My wife’s an ER doctor. You can’t fight COVID remotely. Only about 40% of the workforce went remote. If you look at where we are, and Nicholas Bloom at Stanford probably has the best research on this, he says it’s 30% and that’s probably where it will stay. He’s wrong for exactly the reasons that you pointed out, which is that hybrid is harder. Working from anywhere is harder.
You have the investment banks that are already calling everybody back but the truth is most people are going to continue to play lip service to hybrid and flex time, yet senior leaders are there 5 days a week, which means that middle managers need to be there 5 days a week. That means that if I want to get promoted, I need to be there four and a half days a week.
What is going to happen is it’s going to be easier to know that you need to be in the office if you’re upwardly mobile. We’re going to gradually spend the majority of our time there. Where I’m setting my hopes is not a percentage of the workforce working from home but what we get is an increase in flex time. At least I did it intentionally. I don’t know if you did.
We opened with this idea of, “Show me your priorities and your calendar.” There are more people that want to do that. I hope where most organizations land is, “We want you in the office. You’re going to be in the office the majority of the time. However, we’re not going to dictate when you show up and leave. We might have some core hours where everyone needs to be there so we can schedule meetings. If you’re an early riser and you want to come in at 7:00 and leave at 2:00 or you’re a night owl, we don’t care anymore.”
If you’re going to be in the office, you should probably pass with other humans while you’re there. That would be the whole point of coming in.
What I used to recommend, and this is where my predictions didn’t go so well, was that you push the decision-making down as low as it can go when people are in the office so that teams stay together. What I’ve realized is the problem with that a year later is that you end up with certain teams that are in the office but the other team they collaborate with has core overlapping hours.
The hour thing is interesting. I always come back to the investment banks either for better or worse in their examples because at least they were clear on what they valued. The way they announced it is more of a power dynamic than talking about the business needs. The example I always give is rather than saying, “We’re coming back to the office. This is a disgrace or otherwise,” Goldman Sachs said that it was an aberration that they were going to fix and it was horrible a week before they announced the most profitable revenue quarter in the history of the company. I thought that might feel like a slap in the face to employees who had all been making this work from home.
A year later, with everyone back in the office, they had their worst quarter in revenue in ten years. I’m not saying that’s because they were at home or not at home but there are many more factors to how your business is doing than where people are working. What’s interesting is that there was never a context of the business requirement or explaining to people, “When we were all home, it was okay to pitch a $100 million IPO from Zoom because that’s all we had. We have a client coming in for a $100 million IPO. They want people at the table. This is our business. We need to be there.” That feels like less of a power play in terms of talking about the actual business or the things that you’re doing and where it works and it doesn’t work.
I can tell you it does not work for an offsite. It’s horrible. Our quarterly offsite is awful. It requires being up at night, the whiteboard, and all this stuff. It does feel like sometimes it’s an old-school, “Because I said so,” or forced you rather than making the case to employees where it would be better for them and the team and where it’s not.
The number one driver of all of these overly aggressive return-to-office programs is this weird assumption that being in person is magical. You hear them talk about culture or collaboration. You know because you’ve done it these are all problems you can solve deliberately. Even if you’re on-site and you’re not deliberate about your culture, it’s still going to suck. We’re talking about Goldman Sachs after all. No offense to Goldman Sachs but that’s an organization that has lots of different Twitter parody accounts out there. You have to be deliberate no matter what you do.
[easy-tweet tweet=”The number one driver of these overly aggressive return-to-office programs is this weird assumption that being in person is just magical.” via=”no” usehashtags=”no”]
What is lacking is this realization that the office is another tool for collaboration. At the core of how we make the business case and what we decide on is what are the things that are more advantageous to collaborate in person on versus not. Pitching a $100 million deal to a client is exactly right. Bonding or team-building activities are exactly right. There is also problem-solving. The tech is still not there and the idea generated is better virtually than in person.
There are certain parts of the process of solving a problem, like doing your research or thinking of what you want to pitch. Generic brainstorming seems to still happen better in person. That’s what is missing from the conversation. This is another tool for collaboration like Zoom, a virtual whiteboard, or Basecamp. What we ought to be doing is going, “What are the activities we need that in-person tool for versus these other tools?”
Back to the banking example, it is like, “On Tuesday and Wednesday, we have major pitches worth $200 million. We need you to be in the office. On Friday, when you’re closing a deal and you’re in a spreadsheet all day for fourteen hours and not going to look up or talk to anyone, we don’t need you to come to the office to lock yourself in the office and be performative.” Here’s one that comes up a lot too. I talked about this in another episode. It’s creating some understanding.
A lot of employees are frustrated because the teams are cracking down on where they can work. The assumption is, “They want to create policy. They’re out to get us.” The HR teams are like, “We can’t register in 50 states. We can’t keep track of people who are working from Russia and Iran, which is illegal, or they’re going to companies where we would have to file and pay $10,000. We need to restrict this to where we can manage it and do this.” It’s a lack of understanding of like, “These are people that are trying to solve problems like we are.” You are explaining the business case you’re trying to solve rather than what seems like an arbitrary policy.
You look at a tight urban corridor like New York City. You see that even with working from home. It’s entirely possible to work in New York City and live in Jersey, which means a difference in how we process income taxes. If you suddenly decide, “I’m not coming to the office. I’m going to stay at home,” that’s a world of difference on a tiny river. That’s not that tiny of a river. You know what I mean. You add in international. It gets quite complicated.
Truthfully, this is an area where I’m optimistic. There are two parts of this where I’m optimistic about our long-term future. Maybe I shouldn’t be. Maybe I am optimistic because I don’t spend enough time in Washington DC. If I did, I’d be pessimistic. Labor laws around state variation. Also, we’re missing in the United States some middle ground between contractor and employee.
Part-time employee doesn’t cut it. If we think about the way virtual and everyone having some experience with hybrid collaboration works, we’re going to have a lot to get nerdy what Charles Handy in the 1980s called cloverleaf organizations. We have this mix of full-time employees, contractors, and temporary employees. I don’t think we have that perfect organization.
It’s characterized as exploitation by local governments and people who don’t understand business. The people are saying, “I don’t want to be employed. This is what I want to do.”
Ironically, if we did, it might solve some of that state-by-state problem, too. You’re right. Most employees don’t think about that. It’s the people in HR, business owners, and senior executives that have to think about it. Most senior executives and HR folks don’t do a good enough job communicating that like, “Here’s why we need you to be back within 30 miles of the office.” It is always tainted as this weird control thing. It’s like, “You can’t live in Alberta. We don’t know how to file taxes in Canada.”
It could also be like, “It costs us $10,000 or $20,000 to be there. Do you want to pay for that? If you’re going to go there and we’re going to pay it, and then you’re going to be like, ‘I want to be in London next week,’ that doesn’t work.” This is the topic of the next Friday Forward. Bridging these two topics is interesting. I like telling the story. I might have told you where I was on a panel during the Great Resignation coming out of COVID.
People were like, “What do you think is the future workforce? What do you think people want going forward?” I said, “People are going to want flexibility.” This is going to continue to be the number one hallmark.” There was a woman at the end of the panel who said, “People are going to want to work where they want, what they want, and how they want.” I couldn’t leave that alone. When I came back around, I was like, “I appreciate that but those people should go drive for Uber, start their business, or do something because that is not what being part of a team is.”
We have this dichotomy going on where people are between what they say they want and what’s good for them. They’re saying, “I don’t want to come back to the office. I don’t want to do this. I want to be independent. Leave me alone.” Yet, all measures of mental health, loneliness, and everything are off the charts. This rugged individualism that has come out of COVID flies in the face of the fact a lot of stats around people are ten times happier at work if they have a best friend. Many stats that I’ve read consistently, and I don’t have them all in front of me, are people who need friends, connection, meaning, and stuff from work.
Henry Ford once said, “If I asked the people what they wanted, they would’ve said faster horses.” This individualism that has come out of this is making people unhappy. Being part of a team is probably the best work of most people’s lives but it requires sacrifice. It doesn’t mean that you shoot every night or that you can do whatever you want. It requires some give and take. Do you think this is a paradox that we’re going to have to figure out? Most people will look back on their lives, whether it was professional, athletic, civic, or otherwise, and the highlight will be a super high-performing team that they were a part of.
I agree. That’s why the follow-up to leading from anywhere, for me, at least, and also for you, was the Best Team Ever. My other big COVID realization is that so much of your experience of work is what it’s like to work on a specific team, not necessarily a brand, a notable company, or for your highest salary. It was the team you were most on.
This isn’t new. For all of human existence but for decades, we’ve found it in the research that people act towards their short-term interests and against their long-term interests. It is like, “I would love to look skinny and like Brad Pitt but I also love Oreos. Guess which one I pick on a more frequent basis? It’s certainly not working out.”
We do the same thing with Netflix. We all say we want to watch Oppenheimer but we watch Barbie. If you look at people’s Netflix queues, there are certain classic movies that we’ve always wanted to watch. We then sign in and we’re like, “There is a new Mike Birbiglia special. Maybe I’ll watch that instead.” We do that all the time. The idea that we do that with our schedules isn’t anything new. Where this gets sticky and there’s a potential paradox is with your top performers.
The B players that make up the core, and I’m not undercutting them because they’re maybe the core of every organization and are vital, are probably going to go along with whatever happens. This is why I say I’m not all that optimistic for the future of a fully remote company unless you already were before the pandemic or you decided very early on that you’re committed to that. If you say, “We’re going to go hybrid,” and you’re not very deliberate about it, most people are going to show up at the office 4 to 5 days a week again because they pick up that’s the subtle expectation.
The difference is going to be your top performers. That’s who that woman on your panel is speaking to. It is people who know they’ve got the power because of who they are. There is a delicate conversation to be had about your autonomy, which does empower you to perform better, and your accountability to the rest of the team. This has happened in other contexts, too, because, to some extent, this is also the grand paradox of what you do with a great performer who’s not a great team player.
If being a great team player is part of what we need from you, then you’re not a great performer. We’re still uncomfortable having that conversation but it’s one we’re going to have to have as we make the business case. Part of your job isn’t just getting these results done. It’s also the way you support the team. It’s the way that new members of the team look to you as a leader, a guide, or a mentor.
Maybe we need to standardize that a bit more in job descriptions and performance appraisals so we can hold people accountable for it. That’s a lot of the frustration that we’re getting with giving too much power to people and saying they’re going to have total flexibility, where they want, and when they want. That’s all well and great if your job is 110% solo. Most people aren’t. We need to have a conversation about those other unstated parts of your job description that require collaboration.
This goes back to that clover thing and deciding what kind of organization you’re going to be. Someone asked me after one of my webinars, “We have this person on our team. They don’t want to comment on anything. They just want to do their work.” I was like, “What’s your culture? What kind of company do you want? Do you want that? Is there a place for that as individual contributors or is that not okay as part of your culture? There’s no universal right or wrong. You need to make that decision knowing that what you permit is what you promote.”
If you are going to stay committed to being a more hybrid and flexible environment, it’s also how the people you’ve already promoted act. If you want to say, “We have flexibility,” then you need your senior leaders to not be in the office often because people are going to think, “To get face time, that’s what I need to do.” I feel bad because it’s the catchall answer to so much of what we’re talking about. How do you do this? You do it deliberately.
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What I was amazed by was a year after COVID, people still hadn’t even made a decision. They were hedging. How could you be executing well if your employees weren’t clear on what your choice was? If you’re executing on fully remote, “We’re back in the office,” that’s great. If you’re executing on hybrid, there are multiple versions of that that you need to get right.
One of the companies that I spoke to said, “You have to declare whether you’re hybrid or fully remote. You can only change it once a quarter. If you’re fully remote, then we know to execute these processes against you in checking.” I was like, “That’s smart.” We understand that these people are going to be in the office and these people aren’t so we know how to manage those situations.
Even a couple of years later, people are chickening out. They’re afraid of losing people. I’m like, “You’re going to piss off everyone rather than lose a few people. If you are not going back to the office for good and people want to be back in the office, you’re better off them knowing that than going to a different job.”
I lose track even in 2023, however many months we are removed from all of this, that I talk to recruiters and HR folks that say, “We have remote options available in our job listings but not really. If you make it past the first round, we’re going to try and talk you into coming to the office.” First of all, it is unethical. It speaks to that pinch that you’re feeling where people still feel like, “We’re going to lose good talent.” You might but if you’re going to lose talent that refuses to be on-site collaborating with people, then you didn’t lose anything. Not to go pessimistic but I was an academic for a while so it’s in my nature, I also think a lot of companies are waiting for that recession we’ve been waiting for for two years.
It would clean everything up.
Let’s be pessimistic and honest. If you need to get rid of 10% of your headcount and you declare, “We’re all coming back to the office,” then you didn’t lay anyone off. You let the people who didn’t want to come back decide to leave. It doesn’t look as negative. The cynical part of me wonders if there are some organizations out there waiting for that.
[easy-tweet tweet=”If you need to get rid of 10% of your headcount and declare we’re all coming back to the office, then you didn’t lay anyone off. You just let the people decide to leave if they didn’t want to return. ” via=”no” usehashtags=”no”]
Rather than putting a stake in the ground and saying, “Here is who we are.” I give the banks credit on that or the firms that said, “Here’s what we’re doing. It’s back in the office or quit.” I’m not sure that’s the right answer in this world but at least they were clear on their perspective.
I don’t endorse waiting around for a recession to have volunteer turnover. I’m saying there are a lot of conflict avoidance people out there who that’s their solution. They will wait until the time is right to announce everyone back at the office. What you end up doing is losing people who want that certainty. This happens in every single organization. I’m sure you’ve seen it. Usually, when there is a change or layoffs, the first people who hit the lifeboats are your most talented people who saw it coming and decided on something stable. It’s a strategy. I’m not saying it’s a good one. It’s one that is probably being employed more often than we’re willing to talk about.
This is where the teamwork thing goes hand in hand. If the organization’s going to give flexibility, it’s got to be a two-way street. You can’t say, “Outside of 9:00 to 5:00 is protected. Yet, I would like all kinds of freedoms from 9:00 to 5:00.” My thing is if it’s your kid’s softball game is on Thursday afternoon and nothing’s going on, then go see that. That’s awesome. When there’s a $1 million sales proposal on Monday morning, I expect people are going to say, “It’s Sunday night. I can’t do that.”
That’s $1 million in revenue that pays bonuses and goes to the team. To me, this is part of the team thing. I remember one of the sales guys in EO that talked about being part of a team and the puts and the takes. He said, “No freshman goes to Alabama and Nick Saban. I see your playbooks and stuff but I’ve got my style. This is how I do it and here’s how it’s going to go.” We’re forgetting a little bit about what being part of a team means. That doesn’t mean self-optimization all the time.
That’s what I was talking about with that balance between autonomy and accountability. A lot of managers and senior leaders are trying to have the conversation about the right percentage of autonomy, not even bringing up the fact that part of this conversation is accountability to the team and what they need from you.
Not everyone can shoot 40 baskets a night. It doesn’t work. Everyone would always like the ball. That is the analogy but that doesn’t win a game. From your perspective, how does a leader differentiate between a world-class individual performer and someone who’s a great team player?
To use your sports analogy, you’re not going to do this with a freshman but if you’re a professional sports team, you are often going to build a team around star players. What you’re looking for is not only the LeBrons but also the Shane Battiers, which I’ve already tapped. I’ve exhausted the extent of my NBA knowledge.
For people who don’t have it, they know LeBron James but Shane Battier was the guy who would dive around the floor, pick up balls, do all the little things, and didn’t need the spotlight.
He is the reason the Heat won. If you remember when LeBron went to Miami, they said, “We’re going to win all these championships,” and they didn’t the first season so they added Shane Battier. Not only does he do all of that but he’s in your ear on the court. He is like, “Did you notice that number seven’s doing this?” He’s telling LeBron James. He’s the on-court coach willing to be in that background.
I have a preference. If I had to choose between building a team around a talented but egotistical star player or building a team entirely of team players, I would pick the second because the star player emerges out of that. As I say in the book, talent doesn’t make the team. The team makes the talent. Sometimes, you have to do what you have to do and build it around that person. I would much rather focus on building that culture of team collaboration.
To switch sports, if I may, part of this is because I’m from Philadelphia and the only Super Bowl trophy we’ve ever won was when Nick Foles, the great team player, became the quarterback. I’m biased here but we see that more often even in organizations. We pay top dollar to try and recruit people into certain firms and then they fall apart. They don’t work all that well because we didn’t pay attention to the team dynamic.
How does a leader do that? You start with that team culture first. That sometimes means telling that star player who’s not willing to get on board with what makes for a great team culture that they need to be successful in a different organization and trusting that a star player will come out of that. Sometimes, you get lucky. When you build a great team culture, you also get a person who wants to work on that great team culture but that’s the least often scenario. The best case scenario is to focus on how we build that team culture and then trust that talented players will come out of that or will want to work on that.
A lot of people don’t like sports analogies but since we’re here, the Patriots have followed this philosophy forever. You can give a star a huge contract and pay them ridiculously but you’ve got 58 roles on the team. That means that you are going to have to sacrifice in other places. I don’t think a lot of organizations consider the salary cap phenomenon enough. We take a huge risk on this star player and they don’t work out. We have only been able to afford lower role players on the rest of our starting team.
There is some research on it. Boris Groysberg at Harvard has a ton of research on this idea mostly in a couple of different fields. One of them is the investment analyst. We were picking on Goldman Sachs earlier. These are the people who study the industry and then write the report that people at Goldman Sachs read to get an idea of what they want to invest in.
Often, when those people call it or when their analysis of an industry is great, the phone rings, and a different firm tries to recruit them away. What you find most consistently is that when we blow out the potential salary and pay a $500,000, $750,000, or $1 million salary to this person to recruit them away, not only does their performance decline but the performance of the team they’re added onto declines as well. In other words, not only did we not get a return on investment in you but you tanked to the team that we put you on as well.
What’s the concluded reason for that?
The concluded reason is about 60% of individual performance is explained by the team you’re on, the resources you have access to, and the company culture. I look at it this way. Talent is great but talent is like gasoline. Talent is a fuel. You need an engine that turns talent into performance. The team and the resources the organization can provide are that engine. They’re what helps you unlock it.
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The reason I say this is the only two exceptions to that tanking of talent thing that happened were what’s often referred to as lift-outs or sometimes acquihires. In other words, “We got the whole team and we move them over so they still already know how to work together well.” Women, believe it or not, were much less likely to have it happen.
The theory there at the time the research was being done, and it’s probably still true, is that women were much more deliberate about building a network across organizations and industry because they had fewer allies inside any individual company to rely on. In other words, they couldn’t rely on an old boys network inside a firm so they had to build their support system.
That ended up making them more resilient when they went to a different organization because they still had people they could call. In either case, it’s still the same. It’s this recognition among the lift-outs and the women that I need other people to take my talent and turn it into performance. Not every star player believes that. Some people do believe all they need is them. Only a very few people in the world is that ever true.
It’s amazing to me. This is professional sports. For the draft, they trade a first round this year for two first rounds next year. It doesn’t make any sense from an objective worth. Similarly, people keep making these mistakes. In football, the average free-agent contract doesn’t last two years. I always think it’s interesting.
That person practiced with the other team every day. The coaches saw the person and all this stuff. Yet, you believe that they’re worth three times as much as the people who are closest to them all day long. It’s not that different in business when people jump and they give someone a huge title to bring them over. They keep doing it but the data probably says it doesn’t work.
That’s not to say I don’t think it can work. What’s happening is we’re not paying enough attention to the cultural dynamic, the habits, the norms, the behaviors, and the way that the team operates. This is not new. I talk about this a bit in Best Team Ever but I also talked about it in Under New Management, which is what we talked about in episode 17 years ago.
At the time, it was because, and I still am, a big fan of if you’ve got a situation where you can make it work of tryouts or probationary periods. It is like, “We’re going to hire you for 90 days and then decide whether or not it’s a fit. We’re going to have you work on a project and pay you as a contractor while we’re still examining having you join the team.” Most of the time, when orgs say, “We’re hiring for culture fit,” what they mean is, “Could I go have a beer with you?” What you end up doing is getting way too much homogeneity.
What I’m talking about is are you working well with these people? You can be different from somebody ideologically, philosophically, and work style-wise but you could still collaborate with them. Let’s get real-world experience about what it’s like to work alongside you before we make a long-term decision on your hiring because those cultural things matter. Whether or not you fit into the way the existing team works matters more, especially in the first year or two than whatever skills, knowledge, and ability you bring to the team. That’s a hard pill for a lot of people to swallow.
I don’t have the empirical data to back this up but two weeks. Historically, in our organization, the first 2 weeks had a 99% correlation to someone’s success. It’s that quick. Eventually, we started having discussions after a month saying, “I don’t think it’s going to work out. Do you want to pretend this job didn’t exist and go somewhere else?”
People would say externally, “How could you possibly?” I’m like, “Nine people started at the same time doing a similar thing and this person had a whole set of challenges that didn’t exist.” Not only the team dynamic but once you get into a trust deficit that you’re trying to work your way out of, that becomes hard.
I’m racking my brain as I’m talking to try and think of any studies that might back up two weeks but I see that anecdotally in a lot of other organizations. That was Zappos’ thing. You’d go through primary training and then be like, “Here’s what we’re about. Here’s what your job’s going to be. If you don’t think it’s a fit, we’ll give you a severance to leave.” They didn’t say, “We’ll pay you to quit,” but that’s what it was. It is like, “We’ll give you a severance so you can find a job that is a fit because we know it already. We care more about it now.” You do find out early but you’re not willing to confront it.
The other thing that happens around this is when we hire one of those star players, usually, the manager that negotiates the deal gets all sorts of accolades. It is like, “Way to go landing that person. We’re super excited. Look at her trajectory of success.” What never happens in almost any organization is accountability for bad hires. It is, “That person flamed out within a few weeks. Maybe we need to look at the decision-makers who brought them into the organization and give them some training on better interviewing.”
For anyone who doesn’t last 1 month or 2, you should 100% require the whole interviewing team to get back together and look at what they did wrong. This is not about, “What can we change next time? What did we miss? How do we not end up here again?” It’s looking forward.
We don’t do that. We celebrate the successes of when those star acquisitions work out but we very rarely do an after-action review on when they don’t and figure out what to place blame on. I was about to say where to place blame.
Success has many fathers and failure is an orphan. The book talks about shaping habits and the best practices to bring out the best in each team member. Can you share a couple of examples of those?
Habits, norms, and all of that interchange with culture. When we’re talking about the culture of a team, that’s what we’re talking about. How do we interact with each other? What are the habits around collaboration? When you look at all the research, there are 40 years of great research on this. One downside is every academic uses his or her terms for it. You have to do a lot of synthesis to figure out where all the overlap is.
Fundamentally, when I looked at it all, what I arrived at was there were three elements of it. We have this sense of common understanding, which is a lot of what we’ve been talking about for a while. How well do you understand the preferences of your team and their strengths and weaknesses? Also, how much clarity do you have in the exec job and what’s expected of you? We have psychological safety, which is how free you feel to take an interpersonal risk on a team. Meaning, to speak up when you disagree, admit a failure, or share a crazy idea.
The third one is a sense of pro-social purpose. Meaning, the team knows why they’re working. When you look at the research, teams are most bonded and motivated when it’s not, “Why are we doing what we do,” but, “Who is served by what we do?” In other words, “We see this is the direct beneficiary of our team.” Especially for large organizations, this matters because many teams’ job is to serve a different team in the organization.
Their true purpose as a team or their who is someone internal. You can’t point to a customer success story, a stakeholder improvement story, or something like that. You have to point to, “If we do a great job, it empowers this team to do their work better.” That’s our motivational guidance. That’s how we serve the organization. You have those three elements, common understanding, psychological safety, and pro-social purpose.
People need to know what to expect from the team and also what to expect from the behavior of other people. They need to feel free to bring their whole selves to work, including when they disagree with the team. They need to know their work matters and know who it matters for. Usually, when they know that, they end up doing what I call putting we over me. They end up thinking, “It’s much more important about the team than it is my individual results,” which mitigates a lot of what we spent the last 30 minutes trashing,
This is the discussion I’ve had with a lot of business owners who don’t want to put forward a culture, a vision, or a mission that people could rally around. You can either have all these rent-for-hire people that will work on projects at your organization but if you want them to come to work there, they are going to need a compelling reason to do that in a world where there are lots of different types of work that can be done and much more per diem work that can be done.
Not to keep abusing sports analogies, especially if your salary cap is a lot lower than others. If you don’t have the pockets of a competitive organization, you might be able to have that rent-for-hire talent. Usually, the top talent, if they’re only motivated by getting paid to bring in results, they’re going to be motivated by who can pay them the most. That’s different if you can give them that compelling reason. Most organizations get this. Simon Sinek popularized the idea of why many years ago. Most people get that we need to have a compelling vision.
Most leaders still don’t know how to talk about purpose because they end up talking about what is meaningful to them. Especially founders, you have your vision. They’re like, “We’re going to do this and it’s going to disrupt the industry or make this kind of impact.” That’s great but when you get large, most people can’t see that. We as humans are wired to see our impact based on who we can see impacted by our work. Don’t tell me how we’re disrupting an industry or how we’re changing something. Show me who’s changed. Tell me those stories and I’ll be much more motivated to act than the, “We exist to,” mission statement.
Our friend Clay Hebert called that the glass plaque problem. We take this beautiful mission statement that looks great to us. We inscribe it on a glass plaque and put it in the lobby. Everyone walks by it every day and doesn’t read it. They’re not even in the lobby every day so they’re not even having the chance to read it. That is far less motivating than, “Here is who we serve.” When you do a great job, it empowers these people to do their best work, too.
I heard someone coming out of a board meeting circuit saying that the top discussion was that they’re not going to keep Gen Z for more than 2 to 3 years, whether they love the job or don’t love the job. Some of it, I understand, is self-motivating. Someone who’s maybe 40 and looking to stick around for a while versus someone who’s looking to learn, you got to take that down a little bit to the people. You’re like, “You’re going to come here and learn a ton. Here’s how we’re going to invest in you. You might not be here forever but here’s a little bit of what’s in it for you.”
I don’t know that I agree with the idea that Gen Zs are only going to be around for 2 or 3 years if you’re doing a good enough job showing them that growth path and changing their roles. They’re going to look for something new every 2 to 3 years. Maybe we can make that something new still internal. You need that. It’s hard to separate the data on this between generational versus stage of life.
Current young people, whether or not they stay young and would call it generational or whether or not they grow out of it and it’s the newest group of young people, tend to be more motivated by those purpose-driven organizations. You look at the philanthropy industry. They’ve known for decades that we’ll make more money telling an individual story than giving you the statistics on the problem that we’re solving.
We’re not doing that when we talk about organizational mission and purpose as much but we’ve got a whole group of people who’ve been trained to see their impact based on that, the individual stories preferably filmed in vertical format in less than 60 seconds. We ought to be talking about it that way. We can still keep the mission statement or the big thing that goes in our 10K or our glass plaque but we need to be training a lot of team leaders to talk about those specific stories and share those specific wins.
You’ve looked at a lot of teams and studied a lot of stuff. I’m curious. What’s an example of a real-world team that you studied that embodies all the principles you discuss in the book?
That embodies all of them.
I’m asking you to choose between your children here.
I end the book with the story of Gary Ridge who is a mutual friend of ours and his transformation at WD-40 company. I’m fascinated with WD-40 because fundamentally, they sell oil in a can.
It hasn’t changed in many years.
It’s oil. It’s petroleum. They sell a product that not everybody is super excited about, yet everybody’s fanatically excited about how this solves problems. Gary was responsible for a lot of that when he was hired to become the new CEO of the WD-40 company. You can read them. They’re still around. The analyst reports of this company were like, “It’s dead in the water.” They called it a victim of its own success. In other words, it got market penetration so fast that it can only go down from here.
I had a 25% people-liked-working-there engagement. Everything was in the toilet.
It was terrible. What Gary did was a couple of different things. They were all in line with these three elements. He reframed the organization to be about our tribe and to be about, “Not only are we going to provide for you and give you those growth opportunities but we need to have some accountability for each other, too. We needed to take care of the tribe. When we do well, we all do well. In that case, the who that we’re talking about is us. We exist as an organization. In doing so, we make all of our lives better.”
They also talked about it on a smaller scale, too. Gary was in charge of rebranding this idea of, “What does WD-40 do? We make heroes out of everyday people.” If you’ve got a squeaky door and it’s driving your family nuts and you finally spray it, you’re a microhero but still a hero. The other thing he did was help them reframe failures into what he called learning moments. This is the psychological safety element. This is the idea. He went public faster than I might recommend but it worked. He said, “Blanket amnesty for failures if you fess up and say, ‘I had a learning moment, and here’s what happened.’”
In other words, “It’s okay to talk about our failures. We’re not going to punish you for a one-off failure that everybody fails from time to time. You don’t need to hide it. What we want is to learn from it.” Gary, to get this going inside WD-40, had a contest every month, like Learning Moment of the Month. Email Me, the CEO. Imagine this. This is why I say I don’t recommend it. You have to be the right personality to pull this off. He was encouraging any employee to email him their failure story along with what they learned. He would then pick a winner every month and send it out along with a bonus and some praise to the people.
In the first month, he got 4 submissions but picked 1 and celebrated it. He then got a few more. Over time, he was building that sense of psychological safety. You have this common understanding around the idea, “We’re a tribe holding each other accountable. We need to work together.” You have psychological safety in the learning moments. You have a pro-social purpose on two levels, which is, “We make heroes. We exist as an organization to make our lives as employees better as well. Your individual career is great but we’re also accountable to the tribe.”
What’s interesting is the market share of WD-40 did not increase at all. What happened is they started coming up with all of these ways, A) To go international, and B) To come up with new applications of the product. The product didn’t change. The container changed based on all these different situations making it the perfect tool for new areas to judge market share.
The last time I looked, the stock price under Gary’s tenure was a 1,321% increase. It was an annual rate of return of about 15% annualized, which is crazy for a fundamentally dead company. They didn’t hire any star players or new marketing managers who came up with any of the ideas. They didn’t go pay top dollar for Don Draper. They focused on the team. They were like, “Let’s think about the ways we interact together. Let’s pay attention to the habits we’re using to collaborate and make them more positive.”
Stars grew out of that. Lots of people grew into new roles and organizations because they had such great performance at WD-40. It happened by focusing on the team element. You were asking me to pick between my children. If we’re thinking about all of them and embody them, that’s one of my favorites. Gary’s an all-around great person, too.
Many organizations have fake or performative core values. To me, a core values combination serves in lieu of a rule book. I don’t know if you’ve heard Gary say this but he said anyone who made a decision that supported one or more of the core values of the organization was always safe. How many organizations do you think believe enough in their core values to make a statement like that? How many individuals would be better off if they understood their core values and knew that they were safe with their decisions?
I don’t even remember what podcast it was but I was saying, “If your values don’t cost you something, then they’re not really values.” The idea of what Gary’s getting at is, “You made a decision and it was in line with our core values. Yet, it may not have been the most optimal solution. It might have failed but it was in line with the core values. Blanket amnesty. There’s no problem there.”
Sometimes, it costs you something. The wisest decision to maximize shareholder value would be to lay lots of people off, maximize process efficiency, and come to terms with the idea that we’re never going to increase market share in WD-40 so all we can do is decrease cost. That’s not in line with the values of a tribe. It costs them something in the short-term to not go that route. What they got at the end of it is a great success story but you don’t know that when you start the process. What you’re looking at is, “This is a more costly path to go but it is in line with our values. We have to trust that this is the right call.”
This is the last question I’ll mix up here. You might need a minute to think about this. What’s the inverse? What’s the team that should have been a total home run but couldn’t work together and was a disaster?
My favorite example is Quibi. Have you ever studied Quibi?
Yeah. This is the short video thing.
It’s the short video thing that came out right before TikTok. They had a superstar senior leadership team or maybe not have been superstars. Some of them have been indicted. That’s a whole other thing. It’s this great idea of, “Let’s get a powerhouse of entertainers together. We’ll trust that we’ll all figure out a short video.” What ends up winning in that category turns out to be user-generated content of Charlie D’Amelio dancing. The call on the future of short-form video was not wrong. It was the right call.
The problem was you built this team of people who were all at the apex of their careers and you brought them in because they were top executives and big names. In my mind, when you look at what went wrong with Quibi, you have a lack of psychological safety of anyone willing to speak up like, “That’s not what I’m seeing. Maybe we don’t need to film a cinematic 90-minute movie in 10-minute segments where when you orient your phone from vertical to horizontal, it flips what you see in the picture. Maybe we don’t need to do that. Maybe we could do short-form user-generated content.” I firmly believe someone they hired at some point spoke up on that but the senior leaders had a plan.
They’re like, “Do you know who we are and what we’ve done?”
You end up with a well-financed and well-recruited team that falls apart. I love the fall apart of Quibi. I was tempted to go with sports teams there but I figured we’d done it too much.
I was hoping you’d move away from that.
When you talk about the failure of sports teams, we get a lot of hate mail. There’s that, too. You can find them in sports too if you’re willing to.
Without naming it in sports, it’s usually when they get the four old all-stars together. It doesn’t work. It’s been done many times. People have tried it and it doesn’t work unless you have that glue or someone else that helps hold it together. David, we’ll have you on again. I’m sure you’ll have a few more books by then. Thank you for joining us. Your insights into leadership and teamwork are always very valuable.
Thank you. Yours as well. I was about to say hopefully, the next time, we don’t end up writing similar but it makes for awesome conversations. I always love that chat.
I promise your next book is not like mine because mine is a parable. Unless you’re going in that direction.
You can take the parable route. You can go with it.
To our audience, thanks for reading. If you enjoyed the episode, I’d appreciate it if you could leave us a review as that’s what helps the most new users discover the show and great guests like David. Thanks again for your support. Until next time. Keep elevating.
