Stimulating Stability and Global Growth with Ralf Specht

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Allison: Welcome back to the Deliberate Leaders podcast, I am your host and Executive Coach Allison Dunn, we are tackling the topic of how to apply leadership behaviors that stimulate stability and global growth. Our guest today is Ralph Specht.

He is a visionary and business leader highly sought after speaker and creator of the Soul System, which is a framework that aligns value creating employee action with broader corporate strategy through shared understanding and shared purpose. He also has a new book out, which is beyond the startup sparking operational innovation for global growth. And his driving passion is to make soulless companies a thing of the past. Ralph, thank you so much for joining us here today.

Ralf: Allison, it’s my pleasure to be with you today.

Allison: Fantastic. I like to kick these off with a deliberate conversation, what would be your number one leadership tip for our listeners today?

Ralf: Well reflect on yourself and listen to your people. Because the truth what’s happening in the workplace is always with the people in the workplace. And so it’s always important to have both the eyes and ears open. And don’t believe your own PR too much. Start listening to those who see what’s happening.

Allison: Fantastic thank you for that tip. You know what? So Ralf, who did you write the book for?

Ralf: Well, the first book building console, was basically inspired by the many, many emails, text messages and other messages that I received, when I was stepping down as CEO. And those were far beyond what you usually would expect of like farewell messages, they went much, much deeper. And they were basically a summary of what people felt they had experienced in our company, which was something they felt they hadn’t seen anywhere else before.

And so as I was going through these emails, time and time again, because it was a very emotional moment, for me, I thought, there’s two options here, I can either keep them on my iPhone, and every now and then in a sentimental moment, look at them, and feel good, or basically write up the lessons that they taught me or taught us and allow other leaders to participate.

So that’s how building corporate came about. It basically, is a book about leadership philosophy. And the second startup is actually the genesis of the company who created this joint venture with Jaguar Land Rover called spark 44, which was a global advertising marketing joint venture, where I stepped down with 1200 people in 19 offices worldwide. So quite a thing.

Allison: Yeah, that is that is very impressive. I would love to dive into kind of the like, to help us understand, like beyond the startup, so what are the steps for transforming an early age startup into a robust, thriving company like Land Rover and Jaguar?

Ralf: Yeah, well, Jaguar Land Rover where our joint venture partners, so we jointly took the decision to build up the company back in 2011. And started pretty aggressively already with four offices and 80 people and, and build it over time to the end result 1200 people and 19 offices.

And the tricky point was in year four, I think, when the agency was tripling in volume, in size, so by that time, we had already grown to six offices and 250 people, but then pretty much from one day to another than then like within six months, or actually within four months. We had to gear up to 14 offices and 750 people so basically hiring 500 People in four months in an opening another 10 offices or eight offices at the same time.

You can imagine it motivates a transformation for sure. Absolutely. And the reason why that works is a very simple reason. It was because Everybody was clear about the purpose of the company. We had been able in the first four years to create a culture and codify a culture that actually delivered value not just to the clients, but also to each and every member of the workforce.

And hence, when we got into the situation where the question is, can we really build a new office isn’t hire 500 People in four months, where you normally would say, you’re not forget about never work, we were confident that we could make it work, because we had people in all those locations already, that were dialed in with, with the philosophy with the approach to the culture of the company. And that actually proved true.

So those companies or those agencies in that we had to build up from scratch, actually, very, very quickly became cornerstones of the culture moving forward. So it can be done, and only be done. I think the magic word is culture. And if you don’t have that culture, it’s going to be tricky, perhaps impossible.

Allison: Ralf, what was the value proposition for the employees that enabled you to attract that type of talent?

Ralf: Well, you know, first of all, the business model was very different. It was a joint venture with a client, which is very unusual doesn’t exist, and definitely doesn’t exist on a global scale. And so for everyone who joined from other EBIT, advertising agencies, when they learned about the business model, that was, I think, well, attraction, number one.

Number two, when we started, we started with a Jaguar brand, and it was pretty much to rejuvenate the brand and relaunch the brand, which obviously, was one of the most iconic car brands, and hence, it wasn’t too difficult to find people who wanted to be part of that. Third, I think the value proposition was, well beyond words, actually. The human centric performance approach that we had taken, the way we were interviewing people, hiring people, evaluating people, and rewarding people for great contributions and great service. And that was something many, many people told us, they haven’t seen in their previous agencies, and we did an annual survey at least. So they and I mean, they were like, the beta is like, the best work of my life. And I think, if I’m not mistaken, I think the approval rate for that statement was like 95%.

So you don’t have that usually right here. And usually you’re happy when you’re building positive statements, whether it be 65 70% approval rate, and you’re already good. So we were really shocked in a positive way that people really appreciated that much. And it also showed, well, the turnover rate, which inevitably, agencies usually is around 35% 35 40%. I was I was like 60, and 70, which is more industry. Other categories, that benchmark, so people enjoy the ride, and they voted to stay.

Allison: What’s that’s incredibly impressive, I can’t even I’m struggling to conceptualize adding that volume of people and then getting it so spot on of where people are really doing the best work of their life.

Ralf: Well, obviously, I mean, there’s nobody, nobody’s perfect and hiring 500 People in six months or four months, doesn’t mean you’re taking 500 Perfect decisions.

Allison: Well, that makes me feel a little bit better.

Ralf: That just doesn’t happen. But the likelihood of taking the right decision, I think was much higher. Because the people who were hiring predominantly were in a position that they knew the context for which they were hiring. It wasn’t just I mean that that director or finding another copywriter or another producer or something. And so it allowed them. Obviously, there was huge pressure to fill the positions to mostly make the right choices.

Allison: That’s it. But in any case, that’s a pretty significant amount of growth and a very fast period of time. So what are your best ideas on how to manage fast growth at any level?

Ralf: What you need is coming back to my initial statement, is a leadership team that is able to reflect what they’re doing, and to constantly ask themselves, whether they are the right thing or not, because you can easily get overwhelmed. So that’s, I think, where the second book, the first book comes in building corporate.

So with the framework of the solstice, have a clear purpose. And I call that purpose a shared purpose, because it means it needs to be shared by the leadership team. And not just Yes, we all have heard about it. It’s like, this is how we operate. And it needs to be shared with every employee, I think we were strong in doing both things. We were very heavily aligned leadership team. And when we made a wrong hire, it was very obvious that within a few weeks, some colleagues were raising their hand saying, Are you sure that that guy gets it or not?

And then the second element in the framework is the shared understanding to which I include vision, mission, values, and spirit. And spirit is the unexpected word in this context, because the other three are the usual suspects in Spirit to lead the intended culture. So as a leadership team, you start asking yourself beyond the words, how do we want this place to feel at the end of the day? Interesting exercise when we started the company and sport and talked about culture. We were asking ourselves, what kind of culture do we want to see and feel and experience in this place? And what kind of what kind of what, what kind of culture? Do we see experience and feeling this place? And was an interesting experience?

Because if you stop yourself, if you ask yourself that question, it’s difficult to answer the question. So we flipped the question and said, So what behaviors do we not want to see. And basically, from the negative, we then were capable of defining the positive, and define the culture. And then that’s the third element to share behaviors, you got to live by them. And for instance, we, our performance evaluations, were based on the values of the company. So every three months, any employee had ASIC came into a situation, every manager to basically assess what they have been doing and what they’re planning to do.

By the cultures of the place, which reminded everybody all the time and be contextualized the values into the real action that was happening in the workplace, and I think those were really, really critical if you if you get these right, you can’t avoid the culture becomes real in the workplace, because a reward it is the recognize it. And see, you can also identify individuals that don’t play by the book. And you have a regular moment to reflect on those with employees. And sometimes it’s just somebody assumed otherwise. But every now and then you also find someone who can’t actually accept those values, and the intendant spirit and then it’s good to know that early on so that you can then have an extra conversation earlier.

Allison: I think that you’ve highlighted a kind of an important element that a lot of companies struggle with in identifying like what it is that they do want and the kind of shifting that on its head and really starting with what don’t we want to see for behaviors and that that is a quick way to help you kind of whittle it down. So that’s a fantastic tip for our listeners who may be struggling with what do we want in our culture and what do we value and what behaviors are bad ankle. So thank you for that. You use the word human centric. And I just want to, because I feel like, you know, maybe I don’t even know what the definition of that is, how would you describe that?

Ralf: The industry that I’ve been working in advertising and marketing is, I’d say, an 80% human assets, kind of business, actually meet technology, no question about it, and technology can help a lot. But at the end of the day, is a great business and you need people to a come up with the ideas, and you will need to build the relationships with your clients and so on and so forth.

The most important thing inside that business is the person, the individual, the human being. And so whatever you do, in that kind of business environment, that is not creating a sense of positivity, that person is actually is actually counterproductive. So you need to be human centric, in in driving performance in your workplace. Because if you don’t, you get unmotivated people you get people only do kind of what they have to do or less. And you get those folks that always find a reason why things are not working, rather than looking for the solution how they can make, can we make it work. So to me, a human centric performance culture addresses the needs of the individuals at the workplace in the context of what the company needs to achieve.

Allison: Thank you for that. So, performance metrics, cheap performance indicators, KPIs, I don’t want to use too much jargon or terminology. But I’d love to dive into that for just a moment. So how, how? Or can you give me an example of how you were able to create and incentivize the desired performance behaviors that also met the human who was sitting at the offices needs?

Ralf: Yeah, so I already mentioned the evaluation structure we had. And we did an interesting exercise one day. Because you can imagine if you’re looking at 19 offices worldwide, and you want to get one culture, corporate culture across, challenge, because you think of like the Northern Europeans, or Latin Americans or the Asians, or, well, they can pretty much name any country, their own. culture of that country, is unique.

So one of our values, for instance, was honesty. And if you have that conversation with an English man, they have a hard time, if it’s tricky, to be very honest, they always try to very politely move around the thing and trying to tell you the very nice way that they actually don’t have any sympathy for the idea. presented.

On the other hand, the Americans or the Germans were very blunt in that context, and just give you this is great or in sucks, right. And you’ve got the Latin American countries where you also have to have a sense of, oh, we’re going to make it work, it’s going to be great type of stuff, and the Asians who sometimes refuse to talk about anything in the first place. So you got to manage all of these. And you’ve got to understand as a global leader, that those dynamics are in place in each of those countries. And some you might understand, and some you might try to learn. But you always got to be clear about the fact that they exist, and they are different.

So we wondered, for instance, at one point, when we looked at the evaluation was scores from the copyright office to office that some offices have very high evaluation scores. But from a client perspective, when you when you overlay the client satisfaction data, you could actually see that is a big gap. So the office leader felt that people were doing a great, great job that the client didn’t feel like that. And then you had other offices were just the opposite. So the client was Ultra happy. But the leader was very, very sharp on his people. And well, when the numbers were like, really what’s going on there, something’s wrong. But actually, nothing was wrong. There’s just a cultural element of the local, local news of the culture that drove those things.

So looking at KPIs is a good thing. But you have to always look into contextualize them, to make the real use of them. And obviously, we did. And sometimes it helped a lot, because certainly, some, some, some individuals figure it out that they were actually a bit too to give too much the other side with their people, and pull it back, because the valuation evaluations were always connected with a financial bonus.

So if a leader wants to do give the people a bit more and compensate for other things, and you can do that, but actually, it’s not what it’s supposed to be. And by having the contrast of the client satisfaction index, it was very easy to kind of put it in the spotlight.

Allison: I feel like that. That type of thing happens just when you have amongst offices with different types of leaders, regardless of being in you know, a global settings as well.

Ralf: And I think, when it comes to leaders and hiring leaders, I think one of the most important things, that’s why I think you need to codify your culture. If a leader comes into your set, let’s say you’ve got 19 offices, and you need a leader for one, and that person kicks in and you have the onboarding, and everything’s fine and easy, but then that person is on their own somewhere remotely. And if your culture isn’t codified strongly enough, then actually that leader that by nature, fills the void. And over time, you might run the risk that you create his that he creates his culture in the office, and it’s no longer the entire corporate culture.

So codifying that culture of being clear, that’s why I’m always talking about shared represent shared understanding and shared behavior. Deserve everybody knows, then people can identify an issues. If you have a heavy culture where people are often feel, alright, when they question things, then those things pop up very quickly. And you can act upon them, rather than be surprised to read later when we think like, what happened here? Yeah.

Allison: Creating a codified culture in a global community, I’m sure is no small challenge at all. What’s, what does the structure look like organizationally, to have that happen? And then I’ve got a follow up question on like, how often have you caught a fight? Like, how much do you need to talk about how much time is spent in communicating that?

Ralf: I’m sure. I was talking to an ad to perform a client the other day. And I said, What do you hate most of your in your current job? And he said, Well, it’s repetition, repetition, repetition, repetition, because it tells them same thing again, and again, and again. Kind of used when you can’t listen to yourself anymore. When you can’t hear it anymore. It’s probably the moment where people get it.

And so, as a leader, you got to act as the world. I mean, people look at you and people talk about you when you’re when you’re in the room or not. And so you can be very clear what you’re doing and what you’re not doing. I mean, the way we codified the culture.

We started obviously on the leadership level, with we’re a global company. And the initial four offices were LA, Shanghai, Frankfurt and London. Now, Frankfurt, London is kind of easy because it’s a one hour flight But LA, Shanghai, la London, la Frankfurt is a little bit of a drama if you start doing that, now and then. And so this is like 10 years ago, so there was no zoom. And whenever people were joining, they were like they couldn’t believe kind of the use of technology. So at the time, it was GoTo Meeting to be used. So when people asked me where, where’s your headquarter, we said, well, our headquarters GoTo Meeting, because we were all there was one, one guy here and one guy there.

Allison: That’s a great answer.

Ralf: And it actually created a culture in which people knew that they always had a counterpart in another office. And since we will have to deliver like the full Communication Matrix, none of the officers was fully equipped to do that. And so by the by design, they had to cooperate. So that created a strong bond, because nobody had the resources to deliver everything on their own. So that was helpful. And we made sure that every, every two or three months we met in person for two days. And as the company grew, we basically added leadership, three leadership meetings in year, two with the first line of reporting, and one with a wider the wider group is like 70 people.

And one breakthrough that we have, which was a real opportunity was at one point, because obviously advertising agencies, you probably heard that they are never have never happy with the briefings, the clients are writing up, there was something missing, or it’s not clear enough, and so on and so forth. And obviously, I haven’t met any cloud is kind of fed up with that, because they are like, come on. And so we basically create a new model for that. And we basically, we basically said, Let’s do one thing, we write the briefings ourselves, and you just vote on the results, they’ll get involved in the briefing.

And all those we just talk briefly about kind of the contracts that we’re looking at, but don’t leave us alone, the only thing we have to do is come to the presentations, and bring budget. So the producer is one audience ideas. And the first of all, it wasn’t really the first time more than two agencies presented individually on the on the various briefs. And the clients were overwhelmed. And so we worked budget for three ideas, but we actually now producing six.

So it was success all over the place heavy client heavy at the agency folks, and great work at the end, at the end of it. And if you develop things like that, and you’ve been that’s, that’s an example for that industry, but you can replicate the model for other industries in terms of CO creating or whatever is the key element that you want to change. Do it give it a name? Make sure it happens on a regular basis so that people don’t perceive it as a one off and then do it and merchandise the hell out of the tips.

Allison: I think in in that consistency and continuing to do it and evolving it is such a huge factor of it. In your introduction it happened to mention that you are the creator of soul system my personal Allison Dunn theme word for the year is a soulful, soulful journey. So I’m interested what is your soul system? Can you tell us?

Ralf: Well, I mean the soul system is that framework for shared purpose shared or shared understanding, shared behavior. And obviously, when you when you look at that it’s a bit abstract, right? So we can take that one level if you think about if you think about how to share corporate basically replaced shares with the being inside the company, right?

And so, being in the company, there’s two questions that people need to reflect on. First one is why am I here? The second one is why are we here? And it’s a simple question, but it’s not going to be a simple answer, usually. So why am I here? And why are we here? So that’s the first level shared purpose being the second leadership ending to me equals believing. Right? So what do we believe in? And how do we shape belief and others? Are the two questions again, codifying culture, how do we shape that? And others that this is something that is worth working for working with, and so on and so forth?

The third behavior, which is all about belonging, right, so what does it feel like to belong here? And how do we create belonging for others. And when you look into the sort of recent studies, there’s been this study about why people are leaving the workplace in spades. And it’s a great study, because it looks at the problem from two ends.

One end is the employee and the other one is the employer, the employer believes, well, people leave because they get more money elsewhere, they get a promotion, or persons a health issue, they have to leave or something like that. But the employees are basically saying, number one reason I don’t feel any sense of belonging. Number two, I’m not feeling valued by my manager, and number three are not feeling valued by my organization. So you look at that. And you go like, well, actually, it’s not that hard, isn’t it? I mean, because the only thing people are asking for, I mean, obviously, we want to be paid fairly, and so on and so forth. But the only thing they are asking for is that people recognize their work.

I came across another statistic the other day, which was about 50% of the people that have left their workplace, setting their exit, that nobody asked him. Nobody asked what was done to stay, to stay. Think about that. I mean, it’s absurd, right? I mean, everybody. Everybody knows how long it takes in whatever it takes to find the right employee. And then you might have an OR, and you don’t tell them the right employees.

So and this is, again, where it’s full circle, you go get back to these regular evaluations, people understand why they’re being valued. So you have an instant reward system on a regular basis. And as a leader, you have these conversations like four times a year, you beyond like any other conversations, if you don’t understand during those four times, why people are considering to go, then I think you’re the wrong leader. Because at one point, you need to be able to read the signs and have that conversation if a person has value, and you want to work with him moving forward.

Allison: In the organizations that I work with, often when we encounter maybe someone who is asking to be asked to stay in their lane, they’re saying they’re leaving instead, when you ask, you open up a whole new level of conversation that usually works things out, and it’s a win win.

Ralf:  And people all of a sudden, feel a level of involvement they’ve never had before, which also is weird because as a leader, as a manager, the one thing you want is people who are fully involved and know what they’re doing and why they’re doing it and so on and so forth. But again, coming back to the to the being of the purpose questions.

Another interesting study is when the poll purpose index in the US and they’ve looked into the questions Does your purpose your company purpose motivates you to get to get up in the morning? And the best number is 75%. I think for senior executives, it’s no surprise because I think that they predominantly have worked on the purpose statement. And so they’re very close to it. And then when you get down the ranks to middle management, or junior staff or frontline workers, the numbers go down below 50.

So all of that speaks to this notion of shared purpose, shared understanding and shared behavior. Because there’s one company when I was researching for the, for the boring corporate songbook, one company that I came across, which I was really stunned, seeing, obviously, I couldn’t believe it. There’s, there’s one country company in the world whose employees respond with 100%. Yes, on the question. Are you proud to be with this company and that company is Lego? That’s awesome.

Allison: And I can imagine that to like that resonates with me with their brands in every way. Ralf, thank you so much for joining us here today. I just want to kind of put up the question, what would be the best way for people to follow and or connect with you?

Ralf: People can easily connect with me on LinkedIn, that that’s the easiest one, you can people can also get to my website, which is building corporate sol.com. You can register for a newsletter. And you can also do one little thing which only takes four or five minutes, I’d say, you can do a soul check and check the soul of the company and see where you are or where your company is, and have a sense of where you’re on the right track or where there’s work to be done.

Allison: I love that I will include that link in the show notes for people to be able to go to Ralph’s much for joining us here today. It’s been a pleasure having you on the show.

Ralf: Allison, thank you very much for having me.