Let's go back to 2006. I was five years into the business and our company was growing like crazy. It was just before the recession, and it seemed like nothing could stop us. In just under five years, we had moved from our original location on Guadalupe (The Drag) to our South Congress location, we opened the spa, had made our first million dollars in sales, and had opened our second location down in Circle C Ranch. From the outside looking in, one would certainly think that we were doing everything right. Wrong. While our top line (sales) was growing, profits weren't anything to write home about. (We sure knew how to spend money!) There were a lot of things that were not right. Most of all, our salon culture was in the tank. It was the perfect scenario where a business grows too fast and out of control. In fact, I can say this now, but we almost grew ourselves right out of business. After opening our second location, we knew our problems were multiplying. It was as if the one-headed monster now had two heads! Something had to be done, and we had to move quickly. To set the stage, here's what our company looked like from the inside looking out:
- Staff turnover was high, very high.
- We barely had any operational systems.
- Everything we did was inconsistent - Training, Service, Staff Competencies, you name it. (Go to Yelp! and look at our reviews back in 2006 and compare to reviews from 2008 going forward. We were all over the place.)
- Centralized control with little staff empowerment and engagement.
- Team members (including leadership) pulling the company in different directions by hidden agendas, etc..
- Lack of team engagement and motivation.
As the company continued to grow, everything was changing. It was a different time for the company. What worked when we were a smaller company, just didn't work anymore. Not only did we have challenges in just one location, but now two! And then there was the physical separation between team members working in two different locations. Over time, we cleaned up our systems, we focused on our training program, and improved communication between locations and amongst team members. But still, we were missing something. Something just wasn't right. It didn't feel right.
Being a Zappos fan, well, I should say a Zappos fan and a Tony Hsieh fan, I happened to notice somewhere (either on his blog or on the Zappos site) that he was a fan of this book called Tribal Leadership. Understanding that Zappos had built their incredibly successful organization around culture, values and purpose, I decided to buy the book and read it. Even at that point, I still didn't realize that our culture was our biggest problem. Then, after I finished the first chapter, it hit me. I realized that this was what we were missing at Maximum FX. That something that just wasn't right? That something that didn't feel right? That was our culture speaking to us. While we needed to do all of those other things to improve the organization, it was crystal clear to me and Javier that the one thing that we needed most, was a better company culture. Talk about an enlightening experience. To this day, I still confess that reading Tribal Leadership is the only book that has made me physically sick to my stomach. After learning about the different stages of culture and the descriptions of each, I couldn't help but think to myself, that's us, that's Maximum FX.
Immediately, we began to formulate a strategy and focus to build a better culture. It wasn't easy (it still isn't). In fact, it was very painful both emotionally and financially, but today looking back over the last three years, it was worth it. Both Javier and I agree that the shift in our culture literally carried us through the recession while other salons and spas in town went out of business. Here's what we did. I have pictures to prove it! ;-)
Without going into much detail about the philosophy of Tribal Leadership, let's just say that much of the book is written around understanding the different stages of culture, the need for shared-values and company purpose. At this time we didn't have any company values really to speak of and we certainly didn't have a company purpose.
1) We decided to close the company for an entire day and bring both teams from each location under one roof for a "company summit". We did this on a Wednesday. It was super expensive to do, but worth it. Can you really put a price on your company culture?
2) We spent the entire day identifying our shared-values. Yes, it took the entire day. We could have probably taken two days to do this. One of the important elements of Tribal Leadership is this idea of shared-values. Finding out what values are important to each individual team member and then learning which of those values overlap or is shared by other team members is key. It's those values that are shared that eventually make up your core values. The advantage is that once you understand your team's shared values, you can better manage problems, individuals, issues and make decisions that are in alignment with the entire team's core value system. Sounds airy-fairy, but it works. I promise you it does.
We took the team through a simple exercise, asking each of them to write a list of answers to this one question, "What's important to you?". It could have been something important to them at work, or outside of work. We were interested in knowing their answers because behind the answers lay the values that were most important to them. For example, if someone said money, then that most likely meant that Financial Security was important to them. If someone said, family, then Relationships were important to them. If someone said, education, then Learning was important to them.
We narrowed our list of shared values down to ten and these are what we came up with:
After we came up with our list, we split into smaller groups and asked them to expand on each of the values by writing a description next to each explaining why we believe these to be our shared values. After they did this, we brought everyone back together. One by one, we put each value up on an overhead projector along with the description, and together the group changed and modified each value description until we got it just right. Here's what we came up with:
Learning – We believe through constant learning we gain inspiration and excitement which promotes confidence and growth. Education keeps us moving forward to success.
Trust – We believe trust in our company builds secure relationships within our team and our guests. Trust promotes ownership, accountability, stability, confidence and happiness.
Teamwork – We believe teamwork is a united effort supporting individual strengths while achieving group goals.
Success – We believe success is growing personally and professionally in a positive environment.
Creativity – We believe creativity fosters our passion and individuality; continuously inspiring ourselves and others.
Fun – We believe in having humor, laughter and fun in our daily work.
Happiness – We believe that happiness is bringing joy, harmony, and compassion to our personal and professional lives.
Relationships – We believe that relationships are built on respect and trust, allowing for a loyal support system and a sense of family.
Flexibility – We believe that flexibility is vital to the needs of our guests and our team, fostering an environment of caring and understanding.
Service – We believe that “above and beyond” service builds strong relationships and a connection with our guests. It creates a caring atmosphere and gives us the opportunity to make someone’s day.
One thing that is important to note is that this exercise must be done as a team. An owner or manager can't simply come up with a list of values and expect the team to live by them. Culture just doesn't work that way. If you want your team to live the company values, they MUST come up with them together, with you.
3) The last thing we did was identify our company purpose. We asked the team to answer this question, "Why does Maximum FX exist? In service of what?". We went around and around, including deep philosophical and profound reasons until we all decided on something quite simple and straightforward. After about two hours of deliberating we came up with our company purpose and here it is:
"Make Everyone's Day"
That's it! We all agreed that not only making our clients' day was our purpose, but also making each other's day as well. We do this each day by helping each other every day. It could be collaborating on a project together or something as simple as shampooing a guest to help a team member stay on schedule. Whatever the reason, we always remind each other to make someone's day.
After our one-day company summit, we slowly began to shift our culture by holding each other accountable to the values and purpose that we all created together. Rome wasn't built in a day, and the same goes for company culture. Along the way, we had some team members get off the bus. It became clear that they were not aligned with our vision, our values and our purpose. So we actually experienced even more turnover before things got better.
As I mentioned earlier, building a stronger culture literally carried us through the recession. Shortly after our culture began to shift, the recession hit. Business slowed and things got tight, really tight. Even when we thought that conditions would never improve, we banded together, hunkered down and worked through it. We brainstormed together on ways to increase productivity, we collaborated on projects to ensure that clients were given the best care regardless of who on the team saw them. Everything we did was driven by our values and core purpose. We hired and we fired based on our core values. We were (and still are) aligned like we had never been before. Most importantly, we were there for each other when we needed each other the most.
It's taken us a good four years to really see the impact that Tribal Leadership has made on our business and it sure has paid off. By all means, we are not perfect. And we still have a lot of work to do. But in the last year, we have had the lowest staff turnover in seven years (87% staff retention), double digit sales growth, double digit profit, and the best (and most consistent) customer service satisfaction scores we've ever seen. Just visit Yelp! , DemandForce (Circle C) and DemandForce (Soco) reviews to see for yourself.
Your turn: What have you done to improve your company's culture? Could you be needing a little dose of Tribal Leadership? Leave me a comment below, I would like to know.