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Hey folks, Phil Zito here and welcome back. In this post, we are going to be discussing culture, we're going to talk about why your team and business culture matter. Now I know a Smart Buildings post talking about culture, it may seem a little bit not aligned, but if you look at what's going on in the workforce right now, with people leaving, people checking out and not even really giving effort, a lot of that comes down to culture. If we look at employee retention, it’s critical, especially now with anywhere from 100 to 200,000 people short in the building automation industry on a month-to-month basis, depending on who you listen to or read.

Well, in this post, we're going to talk about culture, we're going to talk about how you build up culture. Why does it matter? Then we're going to talk through some use cases related to culture. So, let's dive in.

First off, what is culture? Well, culture is essentially the expectations of people within an organization, and I really should have my wife teaching this because this is her bailiwick being a professional therapist and having an education in this. But, you know, I can teach you all through osmosis. Which, you know, culture when I like to think about it, it's, what are the unwritten rules about how people interact? What are the expectations of the team that are unspoken to one another.

As I look at our organization, we have a high level of trust, we have a high level of transparency, we have an approach with one another of being able to have a lot of fun, but at the same time, we hold each other accountable. We expect everyone to do the right thing. We celebrate our wins together and we celebrate our losses together; that is our culture.

So, you can have two different cultures within an organization especially as you become a larger organization. You can have your team culture, which is your individual unit, and then you can have an overriding business culture. These sometimes can be in conflict with one another. If you have a good leader, that leader can inspire culture and can inspire things like work satisfaction, loyalty, trust, and honesty. All these things that come with a healthy culture can be inspired by that leader, even if there is no business culture, or there's a toxic business culture. On the flip side, you can have a great business culture, but if you have poor leadership, then you can have a very unhealthy culture within the team.

So, the first thing you need to figure out is where are you trying to address culture. Most of the time, you want to try to address it at the business level and then if you properly address it at the business level, that should begin to flush people who aren't aligned with your culture out of the business. If you build it into your hiring practices and things like that, then you will begin to hire people for that culture.

Now, like I said, I know this doesn't seem like a topic that's very pertinent to building automation, but it is very pertinent to building automation because we are in a kind of crossroads. You have folks who are in their 50s and 60s, and they're still working in the business, but they're also starting to leave the business. Then you have people who are in their 20s and 30s who are starting to enter the business and who are starting to move up in the business.

So, what's going on is you have these folks who come from two totally different upbringings, right? They are coming, and I don't want to say against one another, but they are having to find a way to work together. This is where business culture can kind of sit on top, and act as that kind of guidance to help these people who have two different upbringings come together. And that's really important.

So, why does culture matter? Culture matters because of organizational trust. I was listening to Ray Dalio’s Principles for Success recently, and what I took from that was their transparency and the organizational trust that they were able to build. Organizational trust does not mean everyone holds hands, Kumbaya, no one ever gets upset with anyone. What it means is that I can trust that you mean well, you can trust that I mean well, and we can have a transparent conversation without all the BS. We can be direct and say that you didn't perform here, or you did perform here.

That organizational trust will cascade throughout the organization. That allows you to solve problems faster. That allows you to actually get to the issue, set aside the ego, figure out what the issue is, and solve the issue. That results in better quality work, that reduces turnover, and it's just simply more enjoyable. Being able to tell someone they didn't do this well, or they did this well, and have them have enough organizational trust that they can say, “This person means well for me,” that is a lot different than many businesses I've worked in where people didn't feel they could be transparent.

So, how do you go about establishing this? Well, you have to have a clear vision. How do you establish a vision? How I like to establish a vision is to sit down and list out my vision. This is what I did when I founded that this company. Then I went to people who I trusted, and asked, “What am I missing here?” Based on that, they were able to be like, “Well, this isn't realistic, this is realistic, etc,” and, “That isn't clear, this is clear.”

So, our vision is to be the single source training provider for all technologies in the built environment by 2030, that is our vision for this business. It’s an aggressive vision. We want to be the provider for training services and development services to all the different technologies within the built environment. That is our vision, it's very clear, everything we do is made, every decision we make is made based on that vision.

Then we have to have clear values. So, the values come into play where we are sitting there, and we're trying to make decisions. We were having a great discussion about values, and we were talking about speed to decision making, integrity, being willing to make mistakes, these are all values that we have. They tie back to our vision, which is to grow, and to do something other organizations haven't done before, which is provide online training for the built environment.

So, to do that, we have to be willing to make mistakes, we have to constantly be changing and adjusting. So, those values came from that. Without values and without vision, all of this is null and void. Because you will have nothing to hold people accountable to, you'll have nothing to measure by, you won't be able to make a determination if someone is or isn't living up to the values and vision of the business.

I know this is kind of mercurial, it's kind of hazy, it is for me It's something that on at least weekly basis, I try to sit back and think about and figure out, how am I going about our vision? How are we going about our values? Then I look at my interactions with my team, and I try to determine, is there an issue? Was there a scenario where someone didn't feel they trusted me? Was there a scenario where there was conflict, but it wasn't healthy. I look at these things as a leader and then I try to be honest with myself, and I also to go to other people and expect them to be honest with me. Then we take that feedback such as, “Don't slack people on Saturday and Sunday,” even though I feel issues are pressing. Are they pressing enough that I need to be messaging my team on Saturday and Sunday, when our value is to have a work life balance, and to have fun and enjoy? Is that really aligned with that?

Also, being transparent in our conversations. I have to really work on that on a daily basis of saying, “Hey, you're performing poorly in this area.” And doing that, especially since we're such a tight-knit team, can feel very painful, because I don't want to hurt anyone. I don't want to make them feel like they're failing. So, that's something that is tied to our values that I have to work on.

So, you can start to see hopefully, how this vision is supported by your values and your values, they permeate through everything. So, you’re sitting there, seeing we're heading into a recession, and saying, “Okay, we're in a recession, business is great, we're making a lot of sales, we're exceeding our sales numbers, but should we cancel our company retreat, and set all that money aside in savings?” Even though we're profitable, you know, that's a decision I have to make. Then we come back to our values and say, “Well, if our value is building a team, then obviously we should keep the company retreat, because that is something that's going to build the team up.” So, this is where all this starts to come together.

Okay, what are some examples of a BAS business? Let's look at a service business. Integrity, that's our number one value in our business. If you don't have integrity, you won't execute all the other values when people aren't paying attention. You'll be duplicitous, and you'll just get a bad name in the industry. So, we do what we say we're going to do, and if we mess something up, you know, I often forget stuff, I mess stuff up. I'm open about that. I call it out and admit my wrong.

So, in a service business, I've seen back in 2008, you had the big crash, big economic issue. I had a team of five service techs, and I was sitting there trying to get everything working. At that time, you have corporate mandates, you have to reduce cost, you have to save money. So, there I am, like, crap, I've got to reduce cost. I have to save money. At the same time, you've got people sitting there and they're freezing capital projects. And it's like, okay, what can we do? How can we keep our folks employed? How can we keep everyone busy?

Well, the first thing was transparency. I was transparent to the team about corporate wanting us to reduce operational costs. So, we really need to be at this level of performance. By telling them that we need to be able to bill out this percentage of service calls, and we need to have this much in our backlog and forelog, that enabled us to be transparent. The team knew what we were being measured by, and then they could perform. They could decide whether they wanted to step up and start selling upgrades, start selling change orders, things like that.

At the same time, when they would bring in opportunities, they would bring deals to me that weren't in the best interest of the customer. That's where integrity took place. We had to make a decision of, okay, we could probably sell an upgrade to the school, and that would be some work, and it would keep us busy. But was that a good use of their money? It’s super easy, when things are good to be like, “Yeah, it's not good use of their money. We shouldn't be selling them that.” But when you're living week to week, because you don't know what's coming down the road, that's when it gets tough. Then you're like, “Okay, we're going to turn down this software upgrade, because I know that's not a good use of the funds of the school, and we're just going to have to trust that that comes back to us at some point.”

So, we would do things like energy upgrades, we did things like implementing operational efficiencies, teaching people how to execute their work better. We taught things like integrations to legacy systems, so they could manage their systems with less people. Those were things that we were able to go and sell. Then we had to pass on the stuff that didn't make a whole lot of sense. It was at that time that I realized, we were living our values, we were living our culture.

There was another instance, and I'm only using myself because I'm not going to throw any other organization under the bus. There was a time that I'm not particularly proud of, we took over an operations team. There was a job with a large municipality customer, and they owed us a million dollars for like two years because we hadn't properly implemented things. Under the pressure that I was under, I was just focused on how I could make this go away.

So, rather than doing the right thing, which would have been okay, I realized that digging in here was going to keep us from getting paid longer, but it's the right thing to do. It's going cost us money. I just literally went through the commissioning checklist and checked each box. Oh, you want that done? Okay. You want that done? Okay. Instead of identifying that this unit’s undersized, this is an under-floor system, you don't have proper glazing on the glass, you've got 10-foot ceilings, there's no way that this can be efficiently controlled, and calling those things out, and then bringing up engineering meetings, of which the engineer would have been pissed at me, the GC would have been pissed, the mechanical would have been pissed, and doing all those things, I could have done that. And that would have been the right thing to do.

The problem is, while that would have been the right thing to do, that also would have delayed us being paid, that would have gone and made the GC, the mechanical, the engineer of record, all of them look bad. So, at the end of the day, I just went through the commissioning checklist, and called it a day. So, I'm not particularly proud of that.

The reality is that, sometimes you do things that aren't aligned with core values and culture, and that was an example. We had a culture, but that culture was focused on profitability, revenue in the door, and moving on to the next customer. Because of that, I lived up to that culture. At the end of the day, that's still my responsibility. No one makes you do anything.

I mean, like, I was talking to my son driving back from a camping trip, and we're talking about how no one makes you do anything. Like even someone put a gun to your head, you still have a choice. You can get shot, or you do what they say, but you still have a choice. This was one of those instances where I had a choice, it would have been painful, probably would have stalled my career out, but I made the choice I made. And, yeah, it is what it is, but I learned from it.

So, at the end of the day, people are going to perform to whatever standard you set them to. I would sum it up to this, culture is just the ethos of which your team or company is going to operate by. It's important to sit down and actually spend some time defining this. It's established by your vision, it's established by your values, but most importantly, it's established by your examples. You living out the culture and values on a day to day basis, and making the hard decisions because you believe enough in these values and this vision, that you're willing to accept the consequences of the hard decisions. Letting people go who are great performers, but are not aligned culturally, and are being toxic to the team, or standing up in a project meeting and saying, “Look, I know we all want to get off the job. I know, we're all underwater here, but we're not doing the right thing, and this is the right thing we need to do.” Knowing that that might get the GC to send an email to your regional GM or your regional ops manager complaining about you, and next thing you know, you're on a performance plan, because you did the right thing. But you did the right thing at the end of the day.

So, you have to sit there and figure out, what is the right thing to do, and then you have to live that right thing. It's a lot easier when it comes from the top down. Hopefully, those of you who are aspiring to be managers, those of you who lead your own businesses could probably attest that some of the fastest growing businesses that I've done business with have very clear visions, very clear values, and they live those values.

Well, I hope you enjoyed this post. A little different than normal, but it's something that was top of mind, something that I felt needed to be discussed. I'll try and pull my wife in and actually have her do a deeper dive on this because this is her area of expertise.

I hope you found this valuable, and I hope that you took some stuff out of this. I'd love to see what you took out of this in the comments. If you'd like more discussions like this, the stream of consciousness on issues that I think make a business successful or not, let me know. If you thought it was a turd, let me know. Like I said, I believe in transparency. I believe in feedback, and you’re not gonna hurt my feelings either way.

Thanks a ton for being here. Take care.

Phil Zito

Written by Phil Zito

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