Ep. 489 - Want a Thriving Company Culture? It All Starts with Just ONE Powerful Question

Summary

Episode Summary: Ep. 489 - Want a Thriving Company Culture? It All Starts with Just ONE Powerful Question

In Episode 489 of "Second in Command: The Chief Behind the Chief with Cameron Herold", host Cameron Herold engages in a profound discussion with guest Randy about the pivotal role of the Employee Net Promoter Score (eNPS) in fostering a thriving company culture. This episode delves into the nuances of correctly calculating eNPS, its significance compared to traditional metrics, and actionable strategies for implementation that can transform workplace dynamics and drive business success.

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1. The Pitfalls of Misinterpreting NPS

Randy kicks off the conversation by addressing a common misconception surrounding the Net Promoter Score (NPS). Many organizations mistakenly rely on average ratings, which can obscure the true sentiment of their employees.

• Randy [00:53]: "A lot of people think they're doing an NPS and what they end up with is an average rating. An average actually can look much stronger than what the NPS will come out."

He elaborates on how averaging scores can misrepresent employee satisfaction, leading to a falsely optimistic view of the company's culture.

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2. Accurate Calculation of eNPS

Understanding the correct method to calculate eNPS is crucial. Randy provides a clear example to illustrate the difference between average ratings and actual NPS.

• Randy [01:02]: "That would come out with an average rating of an 8. 8 out of 10 sounds pretty good, right? On the Net Promoter score, you would take 50% of the respondents are a 9 or a 10. Subtracting 50% of the respondents that are a 1 through 6, it would give you a net promoter score of zero."

This example underscores how an average score of 8 can misleadingly suggest strong employee satisfaction, whereas the NPS reveals a balanced sentiment, highlighting areas for improvement.

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3. Implementing eNPS: Tools and Best Practices

Randy shares practical advice on how companies, especially smaller ones, can effectively implement eNPS.

• Randy [03:15]: "On a scale of 1 to 10, how enthusiastically would you recommend this as a place to work?"

He recommends using straightforward tools like Survey Monkey or Google Forms to conduct confidential surveys. By asking focused questions, organizations can gather meaningful insights without overwhelming their employees.

Key Strategies:

• Biannual Surveys: Conducting surveys twice a year (e.g., January and July) helps maintain engagement without causing survey fatigue.
• Open-Ended Feedback: Including questions like, "What's one thing we can do that doesn't cost money to make this an even better company to work for?" encourages actionable feedback.
• Celebrating Feedback: Implementing suggested changes fosters a sense of ownership and satisfaction among employees.

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4. Success Stories: From Good to Great

Randy highlights several companies that have leveraged eNPS to achieve remarkable success in their workplace culture.

• Glassdoor Rankings: "I coached a company that went on to become number two in the United States on Glassdoor... they were positive 96, positive 97, net promoter score when they asked their 100 employees, how enthusiastically would you recommend this as a place to work?" ([03:15])

These high eNPS scores correlate with exceptional rankings on platforms like Glassdoor, demonstrating the tangible benefits of prioritizing employee satisfaction.

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5. Aligning eNPS with Business Metrics

The discussion emphasizes the hierarchical importance of metrics:

1. Employee Net Promoter Score (eNPS)
2. Customer Net Promoter Score (cNPS)
3. Profitability in Dollar Terms

Randy argues that a high eNPS lays the foundation for superior customer satisfaction and robust financial performance.

• Randy [05:00]: "The number one metric for me in every company is your employee net promoter score. Number two metric in every company is your customer net promoter score. The number three metric for me is profit in a dollar figure."

This hierarchy ensures that companies focus first on their internal culture, which naturally leads to better external outcomes.

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6. Overcoming Challenges: Survey Fatigue and Negative Feedback

Maintaining high engagement in eNPS surveys is essential. Randy advises against frequent surveying to prevent fatigue, advocating for a balanced approach.

• Unknown Speaker [06:39]: "We get best place to work... we have a hundred employees... we're doing three best place to work things and then we're doing net promoter score."

Additionally, addressing negative feedback proactively by removing toxic elements within the workplace can significantly boost eNPS.

• Randy [12:26]: "The easiest way to get a really happy workplace is fire all the negative, toxic people. Just don't let them come anymore."

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7. Leadership's Role in Enhancing eNPS

Effective leadership is pivotal in driving and sustaining high eNPS. Randy shares insights on how leaders can inspire their teams to exceed current standards.

• Randy [08:38]: "Imagine if you had a big wine rack like that in your head office... anytime any employee got an email or a phone call from a recruiter... they had a prize for getting poached because I'm not leaving."

Such initiatives not only reward loyalty but also reinforce a culture of appreciation and commitment.

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8. Case Study: Tenuity's Transformation

Randy recounts his experience coaching Tenuity, a company that achieved a positive eNPS of 93 and improved its profitability by strategically adjusting its cultural initiatives.

• Randy [10:10]: "The company that went on to rank number two in the United States on Glassdoor is now called Tenuity... we decided to start cutting some of the things that were making the employees happy. And they were really nervous."

This bold move demonstrated that maintaining a high eNPS while optimizing profitability is feasible, leading to sustained business growth and employee satisfaction.

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9. Actionable Steps for Listeners

To conclude, Randy urges listeners to integrate eNPS into their core business strategies:

1. Conduct Regular eNPS Surveys: Utilize simple tools to gather honest feedback.
2. Act on Feedback: Implement cost-effective changes based on employee suggestions.
3. Celebrate Successes: Recognize and reward employee loyalty and exceptional performance.
4. Align Metrics: Prioritize eNPS to drive customer satisfaction and profitability.

By following these steps, organizations can create a workplace environment where employees are genuinely enthusiastic about their roles, leading to a thriving company culture.

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Notable Quotes

• Randy [00:53]: "A lot of people think they're doing an NPS and what they end up with is an average rating. An average actually can look much stronger than what the NPS will come out."

• Randy [03:15]: "On a scale of 1 to 10, how enthusiastically would you recommend this as a place to work?"

• Randy [05:00]: "The number one metric for me in every company is your employee net promoter score. Number two metric in every company is your customer net promoter score. The number three metric for me is profit in a dollar figure."

• Randy [12:26]: "The easiest way to get a really happy workplace is fire all the negative, toxic people. Just don't let them come anymore."

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Final Thoughts

This episode underscores the transformative power of Employee Net Promoter Score in building a robust and thriving company culture. By accurately measuring and proactively enhancing employee satisfaction, organizations can unlock higher productivity, better customer relationships, and sustained profitability. Randy's insights, backed by real-world examples, provide a clear roadmap for leaders aiming to elevate their workplaces to new heights.

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For more insights and strategies from top COOs, visit COOAlliance.com.

Transcript

[Cameron Herold]

Hey, it's Cameron Herald, the host of the Second in Command podcast. Before we dive in, there's something you need to know. If you're a coo, VP Operations, or you're in any role where you're the second in command to the CEO, the COO alliance is the place for you. If you're the integrator to the visionary, you're going to want to join us. The COO alliance is the world's leading community for the second in command. We've had over 500 members like you join from 17 countries to grow their skills, connections and confidence. You'll get the tools, friendships, and a 10x guarantee to ensure that you get your money's worth. Go to COO alliance.com to learn more and see if you qualify. You can even book a free call with our team to ask questions. Now, let's jump into this week's episode.

[Randy]

A lot of people think they're doing an nps and what they end up with is an average rating. An average actually can look much stronger than what the NPS will come out.

[Cameron Herold]

At, and I'll explain what that means.

[Randy]

Let's say that you had five people give you a 10 out of 10, and you had five people give you.

[Cameron Herold]

A six out of 10.

[Randy]

That would come out with an average rating of an 8. 8 out of 10 sounds pretty good, right? On the Net Promoter score, you would take 50% of the respondents are a 9 or a 10. Subtracting 50% of the respondents that are a 1 through 6, it would give you a net promoter score of zero because you're on a sliding scale of negative 100% to a positive 100%.

[Podcast Intro]

Welcome to the Second in Command podcast produced by the COO alliance and brought to you by its founder, Cameron Herold. In the second in command podcast, we talk to top COOs who share the insights, strategies and tactics that made them the chief behind the Chief. And now, here's your host, Cameron Herold.

[Randy]

World.

[Unknown Speaker]

In this episode, I speak about one of the most powerful and underused tools for building a strong company culture, the Employee Net Promoter Score. I walk through how to calculate it, why most people get it wrong, and how a simple one question survey can give you deep insight into how your team really feels about working at your company. You'll hear why I believe employee NPS should be the number one metric in your business, above customer satisfaction and even profit, and how it impacts everything from retention to productivity. I also talk about how to gather meaningful feedback from your team and how to turn that feedback into action that doesn't even cost money. If you're aiming to create a company people truly love working for, this episode will give you a clear, actionable roadmap to get there.

[Randy]

We haven't done NPS internally or externally yet, but I know it's something you've always talked about, and I want to Is there a certain program that you recommend for implementing that? Sure. So when you're a smaller company, the first part of the key is to make sure that you calculate it correctly, right? So I just dropped the calculation in. A lot of people think they're doing an nps and what they end up with is an average rating. An average actually can look much stronger than what the NPS will come out.

[Cameron Herold]

At, and I'll explain what that means.

[Randy]

Let's say that you had five people give you a 10 out of 10, and you had five people give you.

[Cameron Herold]

A six out of 10.

[Randy]

That would come out with an average rating of an 8. 8 out of 10 sounds pretty good, right? On the net promoter score, you would take 50% of the respondents or a 9 or a 10. Subtracting 50% of the respondents that are a 1 through 6, it would give you a net promoter score of zero because you're on a sliding scale of negative 100 to a positive 100%, a zero on an NPS. It kind of sucks. You're not even considered world class until you get to 50. But as an example, if you want to be one of the best companies to work for in your state, you have to be positive 85 or greater. I coached a company that went on to become number two in the United States on Glassdoor. And in the same year, the number 12 company in the US on Glassdoor was another client. They were two of the founding members of the CEO Alliance. They were positive 96, positive 97, net promoter score when they asked their 100 employees, how enthusiastically would you recommend this as a place to work? So the easy tool to use, Randy, is either Survey Monkey or a Google form that goes out confidentially and you just ask people fill out this one question. On a scale of 1 to 10, how enthusiastically would you recommend this as a place to work? Or if you're sending it to your clients? On a scale of 1 to 10, how enthusiastically would you recommend our service to a friend? That's the survey on the thank you page. I go, thanks very much for your response. What's one thing we can do to make it even better? If I'm asking the employees that question, I'll ask The I'll do the survey twice. Once in January, once in July. In July, I'll ask on the thank you page, I'll say, thanks very much for your result. What's one thing we can do that doesn't cost money that would make this an even better company to work for? So once it doesn't cost money and once I just leave it open? You'd be amazed when you ask a whole group of employees, what's one thing we can do that doesn't cost money to make this a better place to work for? They'll come up with some killer ideas that don't cost you a penny. And then for me, it's kind of like Santa Claus. If you grew up in a, like a non Jewish family, you'd write a letter to Santa and your mom would take you down to the mailbox. You'd mail the letter off to Santa, and six weeks later, oh my gosh. Everything that was on my letter to Santa, mom and dad bought Santa. Read the letter. It's like, no, your mom read the letter. Well, Santa, we're Santa. All of our employees are the kids writing us a letter. If they tell us all the things that'll make this the best company to work for, especially if they don't cost money, just do those things. And then all of a sudden your employees are super happy. If your employees are super happy, they're working longer, they're working harder, they're more productive, they're going to go through brick walls for you. And guess what? Then your customers are really happy, which means you can charge more and you make more money. So the number one metric for me in every company is your employee net promoter score. Number two metric in every company is your customer net promoter score. The number three metric for me is profit in a dollar figure. I hate it when people give their profit as a percentage of revenue because now your revenue drops. So your profit drops. Well, guess what? You don't have enough money to pay for everything. So you need to have a dollar figure that you're driving for in profitability and then revenue as well. And then I ask the surveys twice a year, January and July. It's just easy if you do it more frequently that people get tired. Like, you don't want to survey every time you fly on an airplane from the same airline.

[Unknown Speaker]

We get best place to work. We've got a hundred employees. And that's kind of a hard thing to do with a hundred people. And we get it from three different organizations. I find that we get survey fatigue and so we're doing three best place to work things and then we're doing net promoter score. I like that. It's only one question, but it's all. It's about getting engagement and getting people to respond and giving you to get those answers. And, you know, we have an anonymous feedback that you can always send in, and we almost always implement those things that people suggest.

[Randy]

If you're doing the best places to work, if you're doing the best places to work, you probably already have a good response as to how you're doing. So. And by the way, are you winning.

[Unknown Speaker]

Them or like, we got number 10. Yeah, we got number 10. Best place to work in all of San Diego county this year.

[Randy]

Okay, so my goal for you, and I don't want. Please hear this in the right way, my goal for you is I want you to be getting number 10 in California. And then. No, for real. I coached two companies that went on to rank number one in Australia. I coached one that went on to run number.

[Cameron Herold]

Hey, it's Cameron.

[Randy]

Hope you're loving today's episode.

[Cameron Herold]

Quick question for you. Does your company have a strong leadership training program in place to grow the skills of everyone who manages people? If you want to help yourself and your company grow, get everyone who manages people learning from my invest in your leaders online training program. There are 12 core leadership skills that I cover online and they're all going to really grow. CEOs pay me $78,000 a year to coach them one on one, and now you can all benefit for 1% of what they pay me. These are the same leadership skills that I created and certified everyone in at 1-800-got junk when I was there as COO. Go to investinyourleaders.com today and use promo code podcast10 before the end of the month to get 10% off each manager you sign up. Now back to the show.

[Randy]

One in Florida, number one in Ohio, one that was number two in all of the United States. On Glassdoor, I built the number two company in all of Canada. Great that you're in San Diego. You guys can take it to the next level. So the key is for you to sit down with your leadership team and go. It's like when we were on Oprah. When we got On Oprah in 2003, it took me six days to watch the episode because all I was doing was meeting with the team to figure out how can we actually make that look like preschool. I want you to sit down with your team now and go, you know what number 10 is San Diego is fucking amazing. Let's go on a trip. Let's have a good celebration. Let's party like rock stars. And then tomorrow morning, we're going to pretend that's a 1 out of 10, because now we're going for California. What do we have to do to get there? So when they were building Airbnb, they sat down. Brian Chesky sat down with his leadership team, and he said, what's it? What's an 8 out of 10 service at an Airbnb experience? And the leadership team described it, and they said, okay, what's a 9 out of 10 experience? And they described that, and then they said, what's a 10 out of 10 experience? And they described that. Then he said, what's an 11? What's a 12? How would we blow away Obama if he was staying in the Airbnb? How would we make it a 13? And I think that's what you have to sit down with your team now is say, number 10 in San Diego county is amazing. Celebrate party. But now that's a 1 out of 10.

[Unknown Speaker]

We don't do San Diego. Is there nationwide? Is there a.

[Randy]

There is, yeah. Best places to work. And as soon as you start looking for them, like Fortune has one, Best places to work has one. Best workplaces. When you start looking like best places to work in the United States, best place to work in California, you'll start finding the surveys. They're there. Or you'll sit down and you'll say, okay, we were number 10 in San Diego. That's amazing. Let's. Let's make sure we share it everywhere. Let's put it on our. Our website. Let's use it as part of our recruiting. Let's really leverage that. And let's do an employee Net promoter score to see how that correlates. Okay, we have a positive 68, which matches up with 10th in San Diego County. Now let's go for positive 80 this year. Then let's get to positive 85. So the company that went on to rank number two in the United States on Glassdoor is now called Tenuity. They're A ypoer former EOER. I coached them from 40 employees up to 600 employees. And at their fourth annual planning meeting that I led, I led all four years of their annual planning meetings. I sat down with them at their head office, me and their leadership team, and we said, your employee Net promoter score is positive 93 this year, but your profitability is low, and we're looking to sell the company. We need to get our ebitda margins over 18%. What can we do to get there? And we decided to start cutting some of the things that were making the employees happy. And they were really nervous. And I'm like, you're positive 93. We can take you down to 85. You're still fucking kicking ass. So they did. They started to strip away some of the extraneous, and they brought their employee net promoter score down to about positive 95. But they got their. Their profitability up to such a crazy amount that then they were able to start spending money on people again. But just raise the bar, change the paradigm. So that's what I would do. I would correlate it against Net promoter.

[Cameron Herold]

Score and build against it.

[Randy]

And when you start obsessing as a CEO about a higher net promoter score, Employees higher. Net promoter score for employees higher. Man, everything gets so simple.

[Cameron Herold]

If you haven't read my newest book.

[Randy]

The Second in Command, go grab a.

[Cameron Herold]

Copy right now on Amazon and you'll learn how to unleash the power of a coo. And if you already are a coo, you'll learn how to really build an.

[Unknown Speaker]

Incredible partnership with your CEO.

[Randy]

So fun.

[Unknown Speaker]

Yeah. Super important. I mean, that's.

[Randy]

Yeah. And some of it can also be firing the grumpy, negative people. Right. For real. The easiest way to get a really happy workplace is fire all the negative, toxic people. Just don't let them come anymore. Guess what? All of a sudden, your Net promoter score is up, and you don't even need to replace them because they weren't doing anything Anyway.

[Unknown Speaker]

We've got one out of 100 offline about that. But, you know, one question, though, real quick. On. On Glassdoor. So one of the reasons we don't really promote so much on Glassdoor is they do so much advertising to our employees. And so when people go on there and they make reviews and they're constantly trying to. They're always trying to recruit them, and they're always getting messages from Glassdoor, and it's kind of annoying.

[Randy]

Yeah, yeah, let me speak to that. Well, and it's also a bit of a threat, Right? So how do you counter that threat? So here's what Elite SEM now called Tenuity did. They now have 2,000 employees, by the way? Again, they were. Imagine being the number two company to work, and you can Google them. If you Google their Glassdoor reviews. It's ridiculous. They were winning all the awards. They were, like, getting all the big magazine front covers, magazines about their culture. Everybody was poaching their people. So for seven years, not a single employee quit to go work for a competition. And what they did, this was freaking amazing. They had this huge wine rack. It's kind of like right in behind you see the big bookshelf, you have this huge book. Imagine if you had a big wine rack like that in your head office and they had all these bottles of Burgundy and Bordeaux that were all 250 or more bottles of wine. $250 per bottle. Anytime any employee got an email or a phone call from a recruiter or another company offering to hire them, all they had to do was tell the company at their daily huddle. It's like, oh, by the way, I almost got poached by Optima. Cool, here's your bottle of wine. And they'd walk up to the wine rack and take them. There was a prize for getting poached because I'm not leaving. So they celebrated it, and it was almost like taunting the competition. It's like, you're going to try to poach our people. We're not going anywhere. We love this place. When your culture is that strong, you're not worried about getting poached or about them or poaching your people. You're not even worried about it being irritating. It starts becoming laughable at 1-800-got junk. When we were the number two company to work for in all of Canada, and three years in a row prior, we were number one to work for in all of British Columbia. Front page covers. We were getting recruited all the time. We had a guy out on the sidewalk in front of our head office one day with a sandwich board that said, please hire me. And he was wearing a blue wig, which was part of our marketing, and he was picketing outside of our office for an entire day trying to get our attention. Yeah, don't worry about your people getting poached. They won't quit because there's nowhere else. Great to go.

[Podcast Intro]

You've been listening to Second in Command, brought to you by COO alliance founder, Cameron Herald. If you enjoyed this episode, please be sure to, like, share and subscribe to us on Apple Podcasts, Spotify and our other podcast streaming platforms. For more best practices from industry leading COOs, visit COOAlliance.com SAM.