Eastridge CEO, Seth Stein, and former CHRO from WD-40, Stan Sewitch, discuss the profound impact of implementing servant leadership principles in their organizations including sharp increases in profitability, share price and overall happiness in the workplace.
They also discuss how these topics will be explored at the Culture Forum, October 24-25, 2023 in San Diego. The unique two-day gathering is for CEOs, Presidents, Business Owners, and their Senior Leaders who are committed to building and leading the best organizational cultures in the world. Featuring learning moments from WD-40 Company’s journey to achieving 93% engagement, The Culture Forum will consist of 11 immersive sessions over two days led by culture experts, authors, and thought leaders.
Learn more and www.cultureforum.live
Seth Stein: My name is Seth Stein. I'm the CEO of Eastridge Workforce Solutions, headquartered in San Diego. We provide great companies with talent solutions to help them fuel their growth. I'm a student of servant leadership, and I'm passionate about helping companies build great culture. Today, leaders are striving to deliver exceptional results in an uncertain time. But I think we can all agree that culture is a pathway to success for both individuals and companies. And there's a model, headquartered, a San Diego-headquartered company, WD-40, that has shown us how to create a positive company culture. And it actually has inspired a conference that's coming to San Diego October 24th and 25th called the Culture Forum. I'm pleased to introduce Stan Sewitch, who, among other things, has been the former CHRO at WD-40 Company, is also an author and founder of Sewitch, Etc. I chat with a lot of leaders who say, well, if you spent too much time on culture, you're not spending time on growth or it's a kumbaya sort of environment and you don't have accountability. Obviously, I subscribe to something different. So what do you say to leaders that may not have made a transition to servant leadership and company culture and how it shapes an organization for growth?
Stan Sewitch: Well, whenever I've heard that kind of response from a business leader, first thing I need to recognize is they don't understand human behavior. They don't understand the principles of motivation to understand the cultural and social glue that can be created that is really stronger than anything you could see in concrete steel in terms of creating an organization that's resilient and high-performing. So when when I know they don't understand it, I then simply start asking them questions about, "Well, tell me about your business. How's it going? What are your challenges?" And if they're willing to reveal what their challenges are, I then describe to them some of the human factors that might help them towards solving those business problems. And if they could see now a connection between the principles of human behavior and solving the business challenge, that directly relate to the people, then they start to reframe the conversation in their own mind. Because to be kind to them there, there's a lot of crap out there about culture and what it means and what it doesn't mean. And the popular psychology and I say popular psychology, because the the thin level that you see on your web news feed is not the enduringly valuable principles of human behavior that's based on decades of research study in neuroscience.
Seth Stein: At our firm, we really double down on our company culture subscribing to a lot of that Ken Blanchard and WD 40 principles. And we saw as much as a 50% increase in employee engagement. And you know, year-over-year over the last three years, we've hit some company records. And candidly, I've never been happier coming to work despite some of the challenges that are facing us in, you know, the economy. So what advice would you give to someone wanting to start, what, one, two or three things can a leader or a company do to start thinking about making this, we'll call it, transformation.
Stan Sewitch: Well, the first thing I would suggest, and I'd be talking to the CEO or business owner, is that they can't evolve their organizational culture any faster than they can personally evolve. So it means they have to go back to being a student of the subject, which they've now expressed a desire to learn. And in Garry's case, he'll tell you he went back to school and he was a voracious reader and he tried things and found what failed and what succeeded. But he started with himself first. If you can start with yourself first and become a student of human behavior as well as business, then you'll be able to be a skeptical consumer of the information that's available to you. The other thing I would suggest is find other CEOs and business owners that have a similar desire to transform their culture, starting with themselves and form a group study cohort. It doesn't have to be a formal organization, although those do exist. But it's more important to find out a set of like minded, similarly positioned leaders who have similar accountabilities and challenges so that you can share your learnings along the way.
Seth Stein: Interestingly enough, I met Garry through the program that you were referring to, which is how I was able to admire WD-40 Company from afar. I was several years behind him, so my journey is still beginning. But to your point, subscribing to that philosophy, being a reader and this is a plug for the culture Forum, because some of those authors are going to be there is a great, great way to start. You know, one of the things that I admire about what you did at WD-40, candidly, is what appears to be an exceptional relationship and clearly alignment between the key HR executive and the CEO. Talk to me about that collaboration and the importance, because I don't think you can have that type of transformation without that bond.
Stan Sewitch: Well, when Gary invited me to become an employee, and after 23 years of being in my own businesses, I told him I didn't know how to be an employee anymore. And he said, I don't need an employee, I need a business partner. And I knew exactly what that meant because I had been the CEO of three different companies by the time he asked me to join the company. So I took the role with the understanding that I'm not an HR person, I'm a business partner. I'm going to be paying attention to the people, elements of the systems, methods and and tools that we use to advance a whole host of topics that relate to both culture and performance of the company. And unlike some CHROs, I don't covet the decision making authority to replace line management's accountability. So what I did was, and I preach this to my team, that I found when I arrived, and a great team they are, is that if we take a consulting viewpoint and perspective of the HR role, we will not have the decision making right for 99.9% of the decisions that need to be made related to people. Our job is to be expert advisors to the people who need to make those decisions. And in fact, we set up all of our processes such that if there was a policy or practice that needed to be implemented globally, it was the Global Leadership Council and Garry who made that decision and under their authorship and authority, were those methods and principles implemented. They didn't belong to HR. So Garry and I formed a great team because we had both the CEO mentality. We had great alignment with our values. And we both knew that my function needed to be a supporting role to the value chain, not a replacement or a place where people could partner accountabilities, which sometimes becomes the case.
Seth Stein: Yeah. I'm so glad you mentioned our partnership relative to also decision making. And I know how much you and the team at WD-40 value managers and leaders as coaches. And I find that if you work people through, a kind of a coaching system or a coaching philosophy, nine times out of ten people can make their own decisions and they're usually right. Was that an obstacle and/or what were some other obstacles to get the leaders to kind of buy in to this, we'll call it culture shift at WD-40?
Stan Sewitch: Well, it was a gradual process from before I even became involved as an advisor to the company in 2001. But we had to take it piece at a time. And Garry would introduce the idea of being a coach, not a manager. He distributed the book that he wrote with Ken Blanchard. He brought these ideas and there was skepticism for sure from a number of people, many of whom felt that they had been successful with command and control. But over time, the people who did adopt the coaching approach had better results. And as you said earlier, they had a better quality of life while they came to work every day, which became a great advertisement for the effectivity of taking that coaching mentality and really applying it as a servant leader. So it began to snowball on itself. And then we we made a point where we had critical mass. And once you have a critical mass and you talk about that in the book, then it's self-sustaining. It becomes a flywheel.
Seth Stein: You know, as we looked at our journey over the last eight years, having the right people that believe in a shared philosophy called servant leadership was really, really important. And then, of course, the tactics to ensure that we could evangelize this throughout the organization has ultimately led to a phenomenal and modern business transformation. So I couldn't agree more with what you're saying. And I think, again, WD-40 has been a model which has led to the creation of The Culture Forum. So you're a speaker, and you're going to be attending and I'm curious as we think about The Culture Forum, who are you interested in seeing and what topics are you interested in listening to?
Stan Sewitch: Well, The Culture Forum was created out of a desire by Garry, I, The San Diego State College of Business and PurposePoint to create an experience where people could learn more about the how-to and not just the "why should I?" Because that's what's missing from a lot of the available information is: "Yeah, I get the reason I am excited about that. What's step one, two and three? What are the methods?" And so this Culture Forum is going to dig more deeply into a number of those how-to categories. It won't be able to address all of the how-to in two days. But it'll be a good start, a very deep start compared to what they might get from other experiences or by reading a book. Not to discount the value of a bit like a book about Simon Sinek who presents cogent and potent ideas. But there's not a lot of: "Well, how do I put this into operation?" So that's what we wanted to focus on. And people in the audience of CEOs, business owners, presidents, senior leaders who have the authority to have an impact in their businesses.
Seth Stein: I know you're going to be highlighting your book. So this is the cherry on top, everyone: "Engage! How WD-40 Company Built the Engine of Positive Culture." And I hate going to seminars just to feel good. Listen, it's nice and I want to feed my soul. But if I don't have take home value and I don't have a plan, I kind of feel like I wasted my time and the company's resources. It seems to me that your book and probably what you're going to be speaking on is a little bit about the how-to. So can you give us a preview of maybe what one thing you're looking to really share with those attendees that will get people fired up to join and most importantly, listen to your presentation?
Stan Sewitch: Well, both in terms of the book, it's a list of chapters about the key elements you need to pay attention to some stories and examples of how you apply it and why. And then some specific suggestions on how you operationalize it. And there it's not the be all, end all. There may be other methods that will be as good, but at least it's a start for people to start exploring how they might approach it. One of the chapters is called: "Compensation: Where Culture Meets the Road." And that's going to be the part of the conference that I speak about because it's not often discussed. And yet it is such a massive influence on both whether or not the company succeeds economically, how you spend your labor dollars intelligently, but it's also a massive impact on the culture because there is nothing more personal or emotional to someone than their livelihood. And if they don't have confidence that the decisions around their livelihood are made logically and well, then they're not going to believe anything else about the company's philosophy and values and direction.
Seth Stein: This topic is so timely for me. I'm so lucky to have Garry on the Board of Directors of Eastridge. First of all, he is the best prober. Asks phenomenal questions to help generate some really great thoughts. And when we are talking about business growth, and essentially if hiring slows down, if it declines, how can we still ensure that we beat the market and fuel our growth? And the topic of compensation and bonuses came up and some of the questions he asked is, well, number one, is it motivating to the workers, to the employees? Number two, does it drive the right behaviors? Third, have you asked them their opinions? And I think there's very few business leaders out there that think that way. They might think pocketbook first and try to work backwards. And I just thought that approach of engaging those people that this plan impacts was really great advice. I'm sure you've done that more than once in your career.
Stan Sewitch: That's exactly right. And the key element that you mentioned here, instead of have you asked people their opinion. A lot of leaders are afraid to talk about compensation with their employees, and it's usually because they either don't have a good reason for having made their decisions or they made decisions that they don't want to be made public. They're not proud about it. But if your employees can't understand how a business makes money and how it decides to allocate labor dollars, then that means your employees don't know how to help the company succeed. And I found that everyone from the janitor to the head of sales can appreciate the basics of compensation. They can translate it quite well to their own life and experience. And engaging them in the problem solving takes the trip, the mystery out of it. Because if you're another a participant in the discussion and they have an influence, which is another key element of engagement, the ability to influence your environment. And to have a say and be respected for your opinion.
Seth Stein: Another plug for The Culture Forum, which Eastridge is so thrilled to sponsor, is Ron Carucci. To be honest, I heard him speak and I was blown away. And the funny thing about his introduction was: "Can you believe that we need to start conversations with, 'Can I be honest or to be honest? Or do you really want me to be honest?'" Of course we do. When he talks about is transparency, and I think that's so powerful in an organization. To your point, you got to know how the company makes money. And how is the company doing? Because I think it will align behaviors. And so join us at The Culture Forum, October 24th and 25th to hear and meet Stan, Ron and Garry and a whole bunch of other servant leaders, including Stan. I'm assuming someone who reported to you, Rochelle Snook, who is head of Global TA for WD-40 and used to work at Eastridge Workforce Solutions. So I'm excited to see her and you. Any closing thoughts, Stan?
Stan Sewitch: This is really a labor of love for Gary and I. We're trying to positively affect a larger group of organizations with an example, not a perfect example, and never will be of at least one company that achieved very high engagement and strong results and a high quality life. Imagine the economic and personal benefit that could come from engagement rising from its paltry 30% to 33% to the 93% that WD-40 has sustained for sixteen years.
Seth Stein: You know, just to piggyback that, like I said, I'm the happiest I've been in 25 years at Eastridge. Notwithstanding all of the challenges I share that we've seen our employee engagement score go up by 50%, our customer NPS has doubled and we're an employee-owned company. And so combining the power of employee ownership with what we think is a great place to work, led by culture, we've seen over a 250% increase in our share price. So I subscribe and I hope that anyone listening to this is curious enough about what you've shared and certainly how I've used WD-40's approach as a model to come listen and be inspired and most important, walk away with take home value. So, Stan, I look forward to seeing you in a couple of months and I can't thank you enough for your time today.
Stan Sewitch: My pleasure, Seth. Great to talk to you.