EP14 - Foundations of Transition- Communication, Culture & Trust

In this episode of the Foundations of Transition series, Jason and Makenzie focus on the theme of Communication, Culture & Trust, exploring how these elements shape the success of an ESOP transaction. Each workshop-style conversation in this series is designed to help business owners think more intentionally about the future of their company and the role they play in shaping it.

This episode encourages owners to consider not just the structure of a transition, but the human side of the process. Jason and Makenzie discuss why clear communication, a healthy company culture, and strong trust between leadership and employees are essential to building momentum and confidence throughout an ESOP journey. Through practical insights, they unpack how intentional communication and cultural alignment can reduce uncertainty and help create a smoother, more successful transition for everyone involved.

Transcript

Jason:
[0:13] Welcome back, everyone, to the Journey to an ESOP and Beyond podcast, where we seek to make all things related to employee stock ownership plans both accessible and understandable. I'm your co-host today, Jason Miller.

Makenzie:
[0:27] And I'm Mackenzie Wirth.

Jason:
[0:29] And today, we are on our fourth of our 12 foundations of transition. And so welcome to the month of April everyone. One quarter is already behind us if you're tracking the year and I know that almost all of you, if not all of you, are tracking the year. So what have we talked about so far in this? Just as a short recap, we began our journey with clarity of intent with owners, you individually, discovering and trying to explore what's meaningful to you in a transition, in a transaction. Then we talked about courageous leadership and what that takes to bridge beyond you as a founder. And last month, we talked about the value of strategy and communicating that broadly across your team and your role in being the guideline for your company and for your employees. So today, we're going to revisit a topic that's very near and dear to me, which is storytelling. And storytelling leads to language and the use of language. And we're going to talk about how culture communicates rather than just broad communication related to ESOPs. How does that sound today, Mackenzie?

Makenzie:
[1:58] I like it.

Jason:
[2:02] So I've been dying for a way, and I'm sure someone else has already, in trying to bring together both what we do as ESOP professionals, as ESOP providers, and ESOP's fables. It's so close. It's just a little off, but there's always a moral to the story. And maybe one day we'll do like an Aesop fable corner somewhere for extra bonus content as we go along.

Jason:
[2:39] But if we think about, here we go again, I think and we think and all the thinking that happens on this podcast. I know that you guys are just thrilled about that. But history was originally chronicled orally and so there are great oral traditions of storytelling that encapsulates the history of of certain cultures and that didn't go away just because everyone learned to read and write and carve things into stone and and you know hammer out reads into paper it's still present and it's just present in a smaller way and I like to think about that in our context as you have an oral culture and a story to tell within your company and your company tells its own story based on your history.

Jason:
[3:40] So what we're really talking about today is that language of your company. And the question is whether that language is helping the next generation inherit judgment or just inherit slogans.

Speaker2:
[4:02] So Mackenzie, can you think of any

Jason:
[4:04] Sayings that everyone would instantly recognize? It doesn't have to be particular to work.

Makenzie:
[4:15] I guess I immediately went into the context of work. I guess I'm just thinking of company slogans or phrases or what you may be hear often in client service. Maybe it's put the client first. Client always comes first. Yeah. I don't know why literally nothing else is coming to me.

Jason:
[4:48] That's because I put you on the spot.

Jason:
[4:53] So through college, I waited tables. So I was a server at Ruby Tuesday. And so maybe some of you out there listening have had the same part of a venture that I did there. At the time, the slogan for workers was the answer is yes, what's the question? And there were three kind of subsets of that. And in our particular restaurant, it was right above the door to the kitchen. So every time a server walked out from the kitchen with something in hand, they got to see that and then the things that were underneath of it. Uh, we, we had a really good time with that. Me and some of my coworkers on how could we make this possibly go wrong as, as guests at a different restaurant, um, to, to test, uh, how culturally relevant the answer is yes. What's the question would be. Um, and I'm not going to share what some of the ideas that we came up with for that, but, uh, that that's, that's a slogan. However, at least in my experience with my coworkers there, it did change our attitude about how we approach guests' requests because some of them can be quite onerous. But if we're predisposed to saying yes to the question, then we're trying to find a way to make it work.

Jason:
[6:23] And that creates an interesting dynamic between someone who's just taking orders and someone who is looking to make someone.

Speaker2:
[6:30] Feel like a guest. So that's an example that I have.

Makenzie:
[6:42] I think having those subtle reminders are a way, well, I guess it's not very subtle when it's, you know, posted up above the kitchen or whatever, but that's a way to communicate culture and maybe that's in more of a direct way rather than what what we may be getting into today, but a nice subtle reminder that's consistent that helps culture remain relevant.

Jason:
[7:19] I think every group of people has, or over time through exposure to each other, right? So you live together, you're a family, you work together, or you're in a club or some type of activity. Those things create their own little culture is really what we're looking at. And how is that communicated? And I think all of us can bring to mind certain inside jokes that we have with certain people. And don't worry, Mackenzie, I'm not going to ask you to share any of those from any of your circles. I'm not going to share any of mine either.

Jason:
[8:01] But that's a really good sign if that's happening with your people at work, not necessarily co-workers, but you as leaders, listeners, you as founders, you as owners. If your company has taken on a language of its own and what it says, jokes and sayings and shorthand for things that that manifests in this is just kind of the way that we do things around here. So when someone comes on board and they hear it for the first time, they're going to perk up and go, what do you mean?

Jason:
[8:51] So i think that what that what i want to explore with you today is how do we, take that thought process of what culture is telling us how it wants to communicate how the culture is communicating and make that more purposeful or deliberate or actionable or directed. And what I mean by that is, if it is useful, if that's what your company-ism has become, and it's just part of culture, then that lends to you doing whatever it is that you do, whether you're a contractor, architect, a restaurateur, better because it's present. And I think most people would agree that they would rather that culture communicate toward that than toward just being a series of inside jokes.

Makenzie:
[9:58] Definitely. I think most leaders would want

Jason:
[10:01] It to be.

Makenzie:
[10:02] More than just a saying.

Speaker2:
[10:05] And as you mentioned,

Makenzie:
[10:06] New people that come on board that hear that saying, understand where that saying came from and what it really means and how employees of that company actually live out that saying. What behaviors does it produce or create within the employees

Speaker2:
[10:27] Of the company?

Jason:
[10:30] Where do you think these come from?

Makenzie:
[10:39] Probably lessons learned

Speaker2:
[10:45] Mistakes that have been

Makenzie:
[10:46] Made or past experiences that were maybe like aha moments that turned into phrases or slogans or something to maybe prevent what happened or if it was something to celebrate, maybe to capitalize on that experience?

Jason:
[11:12] I think there are two ways that we can go in talking about this. And the first one is, let's stay on this track. I just want to park the idea for the second track before I forget about it, so you can remind me. So this first track is, where do they come from? And to your point, I think you're spot on with what does it mean? How did it manifest? And then the other side is, are there things about the way that we operate that we want to deliberately embed in our culture so that it communicates and reinforces itself? And we'll get to that one second. So just remind me, what would make a good company-ism or how would you know it if you heard it? But for that first one, so I made up a phrase as we were thinking about this because I don't want to share from someone else's experience. And it just came to mind as I was going through the prep for this. And so the silly phrase that I came up with is we don't frown downtown on Sundays. What does it mean, Mackenzie? What does it mean?

Makenzie:
[12:31] That's an interesting one. We don't frown downtown on Sundays. Kind of reminds me of like the Sunday scaries.

Jason:
[12:44] Ooh. That's very interesting. All right. So that's the first step is that's the phrase. Like it's relatively meaningless. And anyone hearing it is going to be, what's the first thing they're going to have? It's going to be curiosity, right? What's that? What does that mean? So it likely came in my head. I have this image of someone doing work on a Sunday in a city downtown, whatever type of work it is. And it happened late in the day. and someone did something and it settled on their shit, did something wrong or made a mistake or was sad about something that happened on the job site. And the owner or the person in my head catches that that's carrying into the rest of their work.

Jason:
[13:45] And instead of a different way, they just made up this silly saying on we don't frown downtown on Sundays, which snapped the person out of the fog that they were in based on the mistake that happened hours earlier. And it clicked with them and then everything is fine. But then that worker, on a Tuesday, sees someone doing the same thing later and just repeats the phrase because it's nonsensical and says, we don't frown downtown on Sundays. And then the person goes, what do you mean? And then when I was working with so-and-so a couple months ago, this exact kind of same thing happened to me. I was working. I kind of didn't measure twice. I cut the wrong, it ruined my whole day and I was about to let it happen again. And then they said this thing and it kind of got me back on track and I could focus on my work. And they go, oh. And that oral history works itself through to where that fictitious company now says, we don't frown downtown on Sundays. And the third part of this, so what was the phrase? What did it originally mean in context? How did it happen? That's our story. But the underlying judgment is really don't let one mistake become two.

Jason:
[15:12] And in a context of if you think about I used measure, you know, the measure twice, cut once concept. So think about a contractor. The principle behind that is attention to the work increases safety. So that's that's kind of step number four. What's the principle underneath the judgment? And if we're always thinking about safety, then we don't want to let a bad day become worse. And our fictitious company just expressed that in a silly way that now becomes everywhere.

Speaker2:
[15:50] What do you think happens

Jason:
[15:51] To the safety record of a company like our fictitious one that has that company-ism?

Makenzie:
[16:00] I would think it improves if that's kind of like the consistent message or slogan that's going around that has such an underlying meaning and that everyone understands that underlying meaning. It's kind of probably always like a whisper in the back of their head or people are just saying it to each other or it's posted on the walls. I think subconsciously even it would result

Jason:
[16:25] In you acting differently or being.

Makenzie:
[16:27] More cautious because you that's kind of like ingrained in you.

Jason:
[16:35] The last thing is that how can you operationalize your company culture so that it reinforces that principle that expresses that judgment? So if we think about those five phases, this is something listeners that will put on our workbook page for you, is helping to decode your company-isms and put them out. And so the first is write down the things that the people in your company say.

Jason:
[17:08] Get that oral tradition of where did this come from originally or do we even know? And it's okay to be like, I don't even know where this came from. But this is what it means to us. It could mean something completely different to us than it does to someone else. And then what are you trying to express with that? And then what will following that companyism do for you? What does that principle accomplish? And then uh the fifth part of that is if you choose to operationalize and i use that distinctly from capitalize because i don't want you to think that you're preying on the culture of your own company by being methodical about the things that are just natural uh as as a part of your culture.

Jason:
[17:56] Um but then going oh how what then can we do around this so if we equip managers to be attentive to people who look like they're having a bad day the application isn't to be flippant uh it's to be again attentive and then what what do we need to do for that individual again in our hypothetical is it just going over clapping them on the shoulder and saying we don't frown downtown on Sundays and or is it there is a one more step and we recognize that this is happening yes let's start with the company ism and then beyond that here's what we what we can do next to make sure that that individual feels seen or comfortable is do they need a five minute operational break, like they got to get a focus break and then come back. What is the way that you can take that and make it practical beyond just the same? Does it make sense?

Makenzie:
[19:02] Yeah, definitely. Even if it's not like I mean, I think it's great to have like the leaders and managers like keep an eye out for those kind of scenarios, but even just having resources in place and available and known to employees like when this happens, I guess like the scenario you're describing is making me think of like, Like, oh, there's a system in place where every employee has an assigned mentor. And when certain things come up, then that person knows they have that resource. That's kind of something you can operationally set

Speaker2:
[19:46] Up or initiate

Makenzie:
[19:47] That all kind of links to the culture that you want your company to have.

Jason:
[19:58] I think the danger, God, hit it again. I'm so sorry. I think drink on game should really be real.

Makenzie:
[20:06] We should keep refilling our coffees.

Jason:
[20:08] That's right. Overly caffeinated. The danger here, listeners, is I don't want you going back to the office or getting into the office today and after hearing this and going, let me make up some silly phrases. And then let me make up the, you know, what I want to express in that. And then let me go around sounding like a madman at work whenever I see something. And then like everyone has to then ask me like, what do you mean by that? Like, I don't want you doing that.

Jason:
[20:44] But, and that's the caution before I get into track two around, we have a method here and can you operationalize that method without counterfeit. And you may not have a weird phrase for some of the things that manifest themselves that aren't necessarily like slogans. It's not Nike, just do it, or taglines, but it is the way that you operate. And so this is the, what are things that we would want to manifest in our culture and seed in our culture over time? Because this is the company that we're building, that you're leading, that you're going to hand off to these people in an ESOP transaction where they're owners. How do you seed that culture with truths that become part of the way it communicates with itself and reinforces the values that you've instilled?

Jason:
[21:44] So there's a short list. And the first one, I say there's a short list. There's an infinite list. We have some examples of that. I'm going to start with the first one, Mackenzie, and then you'll run through some of the others. So no one likes surprises. That's a phrase that everyone likes. So that gets institutionalized as action by saying, we don't surprise clients. We're taking that implies ownership, we're choosing not to surprise clients. So we don't surprise clients is the underlying judgment. And then in our companyism, it was don't let one mistake become two. This is the same thing. So how else could we say it? Do we have a company story or event or personal story that we can attach to when a surprise was bad or when not surprising a client was good. What did they say? How do we do that? And we're kind of working from the middle of that process up and then maybe back down. But being intentional about seeding, you keep using that word, but seeding culture for things that you want to see grow. What else do you think we would have on that list?

Makenzie:
[23:03] So from our list of examples, one that sticks out to me is bad news travels fast I think that just speaks to um like company performance and I automatically think of client service just because that's the world I've always worked in but if you're working with clients and the client has a bad experience that can that reputation or that experience that can be spread to other either existing clients potential clients And I guess if you think

Speaker2:
[23:43] Of it from a

Makenzie:
[23:45] Different perspective, internally within the company as well, you kind of

Speaker2:
[23:49] Want to always

Makenzie:
[23:50] Just kind of be aware of your reputation, not in a superficial or vain way. But you want trust from people on your team, from your leaders. So I think just being aware that negative things, people like to talk, whether that's internally, externally, and that can spread. So being aware of that.

Jason:
[24:27] That's one of my favorites. I like the next one on our list. We lose money before we lose trust.

Makenzie:
[24:41] Yeah, I like that one a lot.

Jason:
[24:44] I wish I could remember. Not.

Speaker2:
[24:48] That I would

Jason:
[24:49] Name them anyway, but I heard a story recently about a delivery. Um, that there, there was some, some, some type of delay within the process, uh, for, for this product or these, these materials. Um, and, and in doing that, um, that, that occurring, there was a deadline for the client and the individual took it upon themselves to take the materials and drive them many, many hours to meet the delivery timeline.

Speaker2:
[25:24] Line.

Jason:
[25:26] I'm not saying that they would have lost money on that, but that's an example of someone taking ownership of the end result, not just their job or not just their part of a process, but taking ownership of the end result for the client, which not just maintains trust, but builds trust. That's the image that came to mind when this one came up as a great example.

Makenzie:
[25:58] I feel like it's interesting i like that perspective um i initially kind of thought of a different scenario again in client service but essentially the way i kind of immediately interpreted that was um maybe like saying no to certain projects basically not being in over your head with your work and like over promising to your clients or taking on a project that maybe you don't have sufficient experience in and so in my head it was like we lose money because we're gonna turn down that project because we know that's not in our wheelhouse or that others can do that better so that maintains trust with the client in terms of what what you can offer and knowing being able to speak to what you can and can offer that makes sense it

Jason:
[27:02] Does that's a that's a great perspective um and you you touched on something that i think everyone has heard before as well which isn't necessarily a company ism but just a truth of business or a saying in business which has the potential really to get lost in the noise which is over promise and under deliver or under promise and over deliver and where where are you on that spectrum so your your approach to um you know the the line around we lose money before we lose trust is uh on on the right side of of of that spectrum um so there's very i like that perspective a lot on that saying.

Jason:
[27:56] All right what what does this really mean like what are we trying to get at with this is it so that you have fancy sayings um or uh your your own idioms within the language of of your company, what are you trying to accomplish and it's less about what you can put on a sign post or a banner or below your name in an email signature, what you're really hoping as a founder who is transitioning not just their company ownership, but their role into a company that will survive hopefully for many, many more decades, if not centuries. And the question that you're asking yourself or you should be asking yourself around why this is important at all. Why do you need to be intentional about the direction that the language in your company and your oral tradition takes is this is it. Can they make the right decision when the same type of moment happens again?

Jason:
[29:09] Not are they going to do it like I do it? Not are they going to be me? And we've talked a lot about identity and that no one really can be you. And it might take more than one person to fill the roles that you fill, but they're going to sit in those seats differently. The real question is, can they make the right decision in the same kind of moments? And this element of language within your company is a good sign if it's present in the right way. And it may give you something to work on now that you're aware that it has some potential benefits for the culture of your company. But that should be the goal. Not, again, sound like a madman walking around the office, just making up sayings and then kind of creating circumstances. But am I doing what I can around how our company speaks about itself and to itself so that the right judgment gets exercised in the right moments?

Makenzie:
[30:23] I automatically think of company values. I feel like that kind of goes hand in hand with what we're saying. So being able to act consistent with the company's values, all of that kind of creates a culture. So whether it's not a phrase or slogan, I

Speaker2:
[30:46] Think it's probably

Makenzie:
[30:47] Maybe more common for companies to have, here are our core values. And maybe that's just simply bullet points of certain values and then maybe some have a slogan which inherently when you kind of like unfold that slogan or peel back that slogan it's

Speaker2:
[31:12] Highlighting the company's values

Jason:
[31:25] What else can we say uh about company isms and how.

Makenzie:
[31:44] I would say if you have these things in place or they are present and you are able to kind of operationalize them, then that puts your company in a stronger position for surviving some sort of transition or expansion

Speaker2:
[32:10] Or some event. So it creates durability when

Jason:
[32:34] Sorry, I'm in my own head. Listeners can't see that. Viewers can, so make sure to check us out on YouTube as well. I can't help but think about when some adverse condition affects the company, whether it's some macroeconomic news, whether it's isolated to an industry. Whether it's isolated to an individual or something personal that could be material. And what happens inside the company when a major event, a major negative event occurs? And on theme with what we're talking about today, just imagine that everyone at work, can communicate and can get their point across, but everyone speaks a different dialect. They're just showing up and they're doing their job. And something, I don't want to say awful or tragic, but again, not a great circumstance occurs. If they don't have a shared dialect, that would make that event.

Speaker2:
[34:00] Feel a lot worse.

Jason:
[34:02] I think. For sure. But if they all do share the same language, I feel that that would be almost like a rallying cry for everyone to support whatever is occurring at, again, a macro level down to a micro level at the company. And this is a quality of really well-run companies and And of ESOP companies, more broadly, we've seen it everywhere within the ESOP community, because everyone takes ownership for the end result, much like the fellow that the story, again, I wish I could remember where it came from. And those are the things that we can't put on a spreadsheet in the beginning. We can't put a number to. We can't engineer. we can't prescribe all we can.

Speaker2:
[35:08] Do is bring

Jason:
[35:09] It to your attention to be listening to what dialect is being spoken in your company, and how do you bring together a shared language around the things that are important to you Kenzie like you mentioned the values of your company as they're expressed not just how you're living them but how does your company say them back to you Mm-hmm.

Jason:
[35:38] So listeners, we'll get a workbook page out for you to dissect this further for yourselves. I want to encourage you to share this with a friend, hopefully the same friend that we asked you to embark on this journey with in the beginning so that you could hold each other accountable to what progress are we making to solve for our ownership plan, our ownership transition plan. And I say this often but we're grateful for being part of your journey and for listening in to us prattle about things that we think are important for you to think about and give you room to explore those your own pace in your own way in the privacy of your own office or home or wherever it is that you've invited us to be a part of your day. And we just ask that you would continue listening with us throughout this year.

Speaker2:
[36:46] And we will see you next time on the Journey to an Aesop and Beyond