CEO Departures - The Work Wire

[00:00:02] [SPEAKER_02]: Hey everybody, this is Bob Goodwin, President of Career Club and welcome to another episode

[00:00:06] [SPEAKER_02]: of The Work Wire where I'm joined by my good friend, the president CEO of Sherman Johnny,

[00:00:11] [SPEAKER_02]: see Taylor, Jr. Johnny, how are you doing today?

[00:00:14] [SPEAKER_00]: I'm doing well.

[00:00:18] [SPEAKER_00]: Good to see you.

[00:00:20] [SPEAKER_02]: Good to see you, my friend.

[00:00:21] [SPEAKER_02]: So we have a very interesting topic in while the specific specifics of it are interesting.

[00:00:29] [SPEAKER_02]: I'd also like to make sure that we explore what the sum of the lessons are, that people

[00:00:33] [SPEAKER_02]: can learn from what's happened.

[00:00:34] [SPEAKER_02]: What we're talking about is the recent change in CEO at Starbucks.

[00:00:41] [SPEAKER_02]: So the now- I'll still see you, Luxembourg, and I'm Simon.

[00:00:46] [SPEAKER_02]: Had been there for 16, 17 months, hand picked by Howard Schultz who had come back three times,

[00:00:52] [SPEAKER_02]: which was, I think, a subplot story.

[00:00:58] [SPEAKER_02]: But he was replaced to very recently by Brian Niggle who has served extremely successfully

[00:01:05] [SPEAKER_02]: as a CEO of Chipotle where he kind of pulled them out of some trouble.

[00:01:11] [SPEAKER_02]: They were going through a bunch of food-related safety issues and their stock is up 800%

[00:01:17] [SPEAKER_02]: since we're getting to the point.

[00:01:18] [SPEAKER_02]: Yeah, which is wild.

[00:01:20] [SPEAKER_02]: So what I'm hoping is that we can, you're kind of unpack some of the lessons learned

[00:01:27] [SPEAKER_02]: cautionary tales and maybe some things that Brian and the board can be thinking about moving

[00:01:31] [SPEAKER_02]: forward.

[00:01:32] [SPEAKER_02]: But what just baseline, what's your take on what happened at Starbucks?

[00:01:36] [SPEAKER_00]: So of course none of us really know.

[00:01:38] [SPEAKER_00]: Like you never know, and I can tell you having been a CEO in the for-profit and nonprofit

[00:01:43] [SPEAKER_00]: world, there's so many things that happen within the CEO and board dynamic that there's

[00:01:50] [SPEAKER_00]: a public narrative about what happened, but we don't really know.

[00:01:53] [SPEAKER_00]: What I will say though is that the stock was underperforming.

[00:01:57] [SPEAKER_00]: And that's really cool.

[00:01:59] [SPEAKER_00]: Cliff.

[00:02:00] [SPEAKER_00]: And at the end of the day, that does not bode for a long tenure first in Europe.

[00:02:06] [SPEAKER_00]: And it just, it just, that's not how it works.

[00:02:08] [SPEAKER_00]: But I think there were signs of this.

[00:02:11] [SPEAKER_00]: Yeah, many have said and again, I don't anyone from Starbucks here was listening.

[00:02:15] [SPEAKER_00]: I don't know what's going on within your shop or what was, but I will tell you that we're

[00:02:20] [SPEAKER_00]: repeated signs that the culture of Starbucks was trying to figure out what it was going

[00:02:26] [SPEAKER_00]: to be.

[00:02:26] [SPEAKER_00]: It was kind of unclear.

[00:02:28] [SPEAKER_00]: And I remember specifically post George Floyd.

[00:02:30] [SPEAKER_00]: Do you remember when they, they've had a couple of missteps even in that area?

[00:02:34] [SPEAKER_00]: And I call them missteps and I think they've acknowledged them.

[00:02:36] [SPEAKER_00]: But you know, like the bearers, we're going to talk about diversity issues.

[00:02:41] [SPEAKER_00]: You remember that, that pyramid that was just roundly attacked.

[00:02:47] [SPEAKER_00]: And then there was, we're going to shut our stores down for a couple of hours to kind

[00:02:51] [SPEAKER_00]: of, you know, and that's just informative by many.

[00:02:56] [SPEAKER_00]: I think well intention.

[00:02:57] [SPEAKER_00]: And that was just the diversity context.

[00:03:00] [SPEAKER_00]: And then, you know, of course October 7th, they came a big issue for them.

[00:03:04] [SPEAKER_00]: Like I think this is an organization and you and I will likely talk about it in a minute.

[00:03:10] [SPEAKER_00]: But it speaks to culture.

[00:03:11] [SPEAKER_00]: I think one of the reasons Starbucks has been so incredibly successful at the end of the day

[00:03:16] [SPEAKER_00]: is so coffee, right?

[00:03:17] [SPEAKER_00]: And I think like they kind of coffee, you don't like to kind of coffee.

[00:03:20] [SPEAKER_00]: But they had a very, very clear culture.

[00:03:25] [SPEAKER_00]: And it's been wobbling.

[00:03:27] [SPEAKER_00]: And now comparing contrast to Chipotle, for example, where you know what they stand for.

[00:03:32] [SPEAKER_00]: Again, you're not for everyone.

[00:03:34] [SPEAKER_00]: But you know what they stand for.

[00:03:36] [SPEAKER_00]: So I think underlying all of this and I'd looked here, your perspective is it was an organization

[00:03:41] [SPEAKER_00]: that was culturally not quite as clear as it should be.

[00:03:46] [SPEAKER_00]: And as a result, other things started to happen and ultimately that leads to losing the best talent,

[00:03:54] [SPEAKER_00]: not being able to attract the best talent.

[00:03:55] [SPEAKER_00]: There was a point where Starbucks could get any executive they wanted.

[00:03:59] [SPEAKER_00]: You're not so much now.

[00:04:00] [SPEAKER_00]: And all of that, if you don't get the right people, right strategy and that's largely

[00:04:05] [SPEAKER_00]: because of the culture, the lack of cultural clarity, I think the business suffers.

[00:04:09] [SPEAKER_00]: It's actually a really interesting story.

[00:04:12] [SPEAKER_02]: So you're kind of getting back to what is the job or the CEO at the end of the day,

[00:04:18] [SPEAKER_02]: It's the for public company.

[00:04:20] [SPEAKER_02]: It's the stock price.

[00:04:22] [SPEAKER_02]: You have to manage the business.

[00:04:24] [SPEAKER_02]: That's why you have investors.

[00:04:25] [SPEAKER_02]: And that's why they are painting you not a small amount of money to steward their ship

[00:04:29] [SPEAKER_02]: in the right direction.

[00:04:31] [SPEAKER_02]: Starbucks is interesting, right?

[00:04:32] [SPEAKER_02]: Because Howard Schultz, who's effectively the founder of Starbucks as we know it,

[00:04:38] [SPEAKER_02]: you know, is a very strong personality.

[00:04:41] [SPEAKER_02]: As he, he, I think there's a whole succession planning story to be told in this too,

[00:04:46] [SPEAKER_02]: right?

[00:04:47] [SPEAKER_02]: Because he has to keep coming back to pull it out of the fire, right?

[00:04:52] [SPEAKER_02]: Kind of get it settled down again and then try to somehow pick his replacement.

[00:04:57] [SPEAKER_02]: He does.

[00:04:58] [SPEAKER_02]: He like, yeah, Bob Irrig coming back.

[00:05:01] [SPEAKER_02]: It's like, yeah, so like you say, like you said, like we don't know everything that's

[00:05:08] [SPEAKER_02]: going on, but for this gigantic company, there's some very small company, family-owned business

[00:05:14] [SPEAKER_02]: kinds of dynamics at play of like how do you replace dad?

[00:05:19] [SPEAKER_02]: How do you replace dad?

[00:05:21] [SPEAKER_02]: And he continues to struggle to do that.

[00:05:24] [SPEAKER_02]: I think Brian Nipple is total rock star.

[00:05:27] [SPEAKER_02]: He certainly doesn't need mine, you know, kind of endorsement on that his record speaks

[00:05:31] [SPEAKER_02]: for itself.

[00:05:32] [SPEAKER_02]: But, you know, so stock price will withdraw stock price, right?

[00:05:36] [SPEAKER_02]: It's sales and profits that comes from innovation, right?

[00:05:42] [SPEAKER_02]: And the proliferation of stuff that they do is very hard to manage, which creates operational issues.

[00:05:49] [SPEAKER_02]: But then there's also that what you're describing, there's the culture piece of this.

[00:05:55] [SPEAKER_02]: And the whole vibe of what it means to work at Starbucks, to be at the risk,

[00:06:00] [SPEAKER_02]: you didn't say this part, but like the whole unionization exactly thing.

[00:06:04] [SPEAKER_02]: And it's like, like that's like the opposite of where a family and I'm part of this is like,

[00:06:10] [SPEAKER_02]: no, now we've kind of been to us and them and you know, we're going to protect our rights

[00:06:14] [SPEAKER_02]: and everything else and they never got to handle it.

[00:06:16] [SPEAKER_02]: That very well.

[00:06:18] [SPEAKER_02]: And so, you know, you got to run the business right and you got to keep your people focused

[00:06:24] [SPEAKER_02]: and motivated and he kind of did not do a great job on either one of those.

[00:06:29] [SPEAKER_02]: It's interesting, I love your take on this.

[00:06:31] [SPEAKER_02]: Early on in his tenure, he would go and be a barista.

[00:06:35] [SPEAKER_02]: He was trying to get so embedded into the business because he's a McKinsey consultant.

[00:06:40] [SPEAKER_02]: Then he was CEO or GM of Rick and Ben Kees are who actually under performed their peer group

[00:06:48] [SPEAKER_02]: during COVID when they're selling sanitary stuff.

[00:06:52] [SPEAKER_02]: Not a, which is kind of hard.

[00:06:57] [SPEAKER_02]: But for me, like I mean, I get to just want to understand the business and you're trying to get

[00:07:02] [SPEAKER_02]: in the business but it didn't feel very CEO-ish to me to see him wearing an apron.

[00:07:07] [SPEAKER_00]: Well, yeah. So that's, that's gosh boy, have you unlocked a something that I feel strongly about?

[00:07:16] [SPEAKER_00]: If listen, there's something to be said for the CEO understanding, you know, a little bit

[00:07:24] [SPEAKER_00]: about what happens on the front line and I get that and that is something that you do a day or two

[00:07:30] [SPEAKER_00]: and and I don't mean literally a day or two but but your ultimate job is to come up with the right

[00:07:37] [SPEAKER_00]: strategy and then ensure that it's being executed. You can't do that if you're spending a

[00:07:43] [SPEAKER_00]: disproportionate amount of your time in a store. There are people who do that in the store and

[00:07:48] [SPEAKER_00]: the field hierarchy has, you know, store managers and district managers and regional. So they have

[00:07:54] [SPEAKER_00]: people who do that, that is execution. You at the CEO, you've got to ensure that executions

[00:08:00] [SPEAKER_00]: happening but you do that through your people but your real job is the vision, the culture,

[00:08:06] [SPEAKER_00]: the strategy and I agree with you and I first thought, I said okay, interesting first couple of

[00:08:12] [SPEAKER_00]: days who can be wrong by going into a store to kind of experience for a second as I said a day

[00:08:19] [SPEAKER_00]: or two some period of time but after that you've got to get to what's the big picture of

[00:08:24] [SPEAKER_00]: macro economic environment to your point unions how differently are employees thinking about work

[00:08:30] [SPEAKER_00]: in their relationship with work all that stuff requires and you only have 24 hours in a day. So

[00:08:35] [SPEAKER_00]: this proportion amount of your time messaging that you're going to work on a store. I'm not sure

[00:08:40] [SPEAKER_00]: especially for New CEO. So let's say that new in role, you are so busy trying to figure this thing out

[00:08:48] [SPEAKER_00]: particularly with a group of business that has been struggling that you just so again no judgment

[00:08:53] [SPEAKER_00]: here because I hate Monday morning quarterback so it comes to being leader because you're not sitting

[00:08:58] [SPEAKER_02]: the seat but I'll tell you that was questionable from day one. Yeah so um okay right we could keep going

[00:09:07] [SPEAKER_02]: on that because what does it say but what's your take on they kind of keep charting through CEOs

[00:09:14] [SPEAKER_02]: and sort of the Howard Schultz shadow that looms really large and then you're on a couple at least

[00:09:20] [SPEAKER_02]: public boards like how does all that work and what does Starbucks not getting right?

[00:09:26] [SPEAKER_00]: So again and I will say to make sound because I don't know what are they not getting right let me

[00:09:31] [SPEAKER_00]: tell you what I don't know but I will tell you that the evidence for the indicate right the evidence

[00:09:36] [SPEAKER_00]: would indicate a misdemeanor but no I think it's I think you've got a couple of things. When you

[00:09:44] [SPEAKER_00]: leave your role as a CEO whether you're the founding CEO or just a big you know you have a big

[00:09:49] [SPEAKER_00]: presence you've got to make room for the for the next person we saw that Disney that I referred

[00:09:56] [SPEAKER_00]: to what Iger had an office in the building he continued to essentially influence and hold a court

[00:10:02] [SPEAKER_00]: over the major decisions within the business it actually is unfair to the new CEO that you know

[00:10:10] [SPEAKER_00]: so when I joined Sharon seven years ago and my predecessor but they had asked us to sort of run

[00:10:19] [SPEAKER_00]: his credit. He said no no no Johnny's got to do this and I've got to go away like I really have

[00:10:25] [SPEAKER_00]: to step away and not allow people to think they can go to me because I can manage from afar

[00:10:32] [SPEAKER_00]: and and I would say to Howard as much as you care about your business there's a lot to be said

[00:10:37] [SPEAKER_00]: for allowing the new person to to be the boss and so that concerns me and I hope that they learned

[00:10:45] [SPEAKER_00]: from that. The second thing is a real big issue is this is a board issue this is not a Howard issue

[00:10:51] [SPEAKER_00]: this is a board issue the board ultimately has one employee and it's the CEO and the board should

[00:10:58] [SPEAKER_00]: literally this time I hope and knowing the Brian that I think I know in business part of it is he

[00:11:05] [SPEAKER_00]: likely said now I can't come in and be Howard's guy Howard might be on the board might be chairman

[00:11:10] [SPEAKER_00]: but I have to be the CEO you have one employee I have a hundred thousand employees or whatever

[00:11:15] [SPEAKER_00]: and hopefully the board has said that going forward Howard has an opinion that has a founder

[00:11:23] [SPEAKER_00]: and an important opinion but it's not disposable the CEO has to chart his or her own course

[00:11:29] [SPEAKER_02]: including modifying resetting the culture right so so it feels like with Brian Nichols appointment

[00:11:41] [SPEAKER_02]: the CEO they like we need somebody who understands food service so we're not starting from

[00:11:47] [SPEAKER_02]: going on zero trying to figure out our business back to you know wearing aprons and stuff but

[00:11:53] [SPEAKER_02]: you know we've done a previous episode on CEO comp and I think you know kind of where I'm out on that

[00:11:59] [SPEAKER_02]: but there you go. Yeah, I the way we do that. If there was ever I mean on both sides of this

[00:12:08] [SPEAKER_02]: like well a lot some of them is still there they're stock tank like 20% or some giant number

[00:12:16] [SPEAKER_02]: it is was measured in tens of billions of dollars of market cap in a day just being taken off the board

[00:12:25] [SPEAKER_02]: like holy cow and then Brian comes in and people will look at his compensation package and

[00:12:32] [SPEAKER_02]: think if you total all of it up it approaches a hundred million dollars okay so which part of me

[00:12:39] [SPEAKER_02]: site really but and this is this is your point which is extremely well made in this case

[00:12:46] [SPEAKER_02]: do you know the ROI is on Brian already he hasn't even started do you know it's 18,000

[00:12:54] [SPEAKER_02]: their stock is a 18 billion dollars on the announcement right and you know you know I've been

[00:13:06] [SPEAKER_00]: very long paid every that point right and I said that you know you and I've had on the work

[00:13:12] [SPEAKER_00]: where a lot of debates about that listen you can sit down all day and do the fancy math that's you

[00:13:19] [SPEAKER_00]: hundred million dollars is a gazillion times with the average boy that is just it is a horrible

[00:13:26] [SPEAKER_00]: way to think about this the better and more appropriate way to think about this as a from a company

[00:13:33] [SPEAKER_00]: and particularly the financial markets perspective is investors have now are benefiting significantly

[00:13:42] [SPEAKER_00]: in fact disproportionately from his appointment he should share in that and as he takes this company

[00:13:49] [SPEAKER_00]: and makes it better he should absolutely be financially rewarded you know I feel this way we we

[00:13:55] [SPEAKER_00]: talk about team language a lot and we talk about you know stars in our market players etc in sport

[00:14:05] [SPEAKER_00]: if someone name her Caitlin Clark or someone LeBron James if a team get someone in there and

[00:14:13] [SPEAKER_00]: they fill those stadiums and the owners are making a ton of money then that talent should be paid

[00:14:19] [SPEAKER_00]: and it might be disproportionate to the person who's a ticket taker at the athletic building but

[00:14:26] [SPEAKER_00]: if they're putting butts in seats that star is adding to the value of the organization and the

[00:14:33] [SPEAKER_00]: profitability he or she should share in that and I feel strongly about it and I think this is

[00:14:38] [SPEAKER_02]: way up to the CEOs so so unpredictably building on your point is because you said investors and

[00:14:48] [SPEAKER_02]: I know you you meant this more broadly because it's stakeholders in table he's or if Starbucks is

[00:14:53] [SPEAKER_02]: healthy and growing and feeling financially stable and sturdy guess what that means they're not having

[00:15:03] [SPEAKER_00]: layoffs layoffs that means they're giving merit it means their ping bonuses more importantly

[00:15:08] [SPEAKER_00]: they are growing and creating opportunities in communities and various communities and

[00:15:12] [SPEAKER_02]: it's going to and then sort of the the next circle out is the communities are benefiting

[00:15:17] [SPEAKER_02]: from a healthy Starbucks a dying Starbucks doesn't benefit anybody in their ecosystem hey I can tell you

[00:15:25] [SPEAKER_00]: I was at blockbuster you remember I know how this works at one point we were Starbucks we were on

[00:15:31] [SPEAKER_00]: every corner you ubiquitous people knew our brand and then we weren't and so you're absolutely right

[00:15:37] [SPEAKER_00]: if you've focused on if it takes a hundred million dollars to attract someone who can put

[00:15:42] [SPEAKER_00]: 18 billion heck 10 billion on the books and with promises of more then it was money will spend

[00:15:52] [SPEAKER_00]: and that's what we've got to do is not the temptation is to get into what I think is really really

[00:15:58] [SPEAKER_00]: not strategic thinking when it comes to compensation focusing on the headline number is just

[00:16:03] [SPEAKER_00]: they had a number whatever and by the way as you and I know and anyone listening here I'm sure

[00:16:07] [SPEAKER_00]: knows a lot of that he'll get the equity but it only really gets his value if he can bring the stock

[00:16:14] [SPEAKER_00]: price up so he you know it's not like someone wrote him a hundred million dollar check although

[00:16:18] [SPEAKER_00]: I did read that he got a 10 million dollar sign in bonus right good for him this guy we do

[00:16:24] [SPEAKER_00]: 10 million dollar signing bonus is every day in professional sports and none of those individuals

[00:16:29] [SPEAKER_00]: as great as they might be will create the kind of economic activity that a CEO over Fortune 500

[00:16:35] [SPEAKER_02]: company will period policy yeah and so yes yes yes yes so let's let's think about because I think

[00:16:43] [SPEAKER_02]: for for people listening you're the next piece of this will be germane as well which is

[00:16:49] [SPEAKER_02]: change management right so we're in a company environment right now I mean what he's

[00:16:56] [SPEAKER_02]: getting inserted into is not a fine tuned well oil machine they get in crushed in China

[00:17:03] [SPEAKER_02]: their US which is a largest market of course is going backwards like same source sales or negative

[00:17:09] [SPEAKER_02]: right you've got this proliferation of air quote innovation which is just making their business way too

[00:17:17] [SPEAKER_02]: complex and if the ground level it's too hard to go executing and so on this stuff right that

[00:17:23] [SPEAKER_02]: they've got consumers who are like inflation is eating me up like I'm not sure I can do seven

[00:17:29] [SPEAKER_02]: dollars every day it Starbucks anymore so he's clearly has a lot of headwinds yes what are some

[00:17:36] [SPEAKER_02]: of the leadership and kind of change management either priorities you might think for him or

[00:17:43] [SPEAKER_02]: broadly how leaders listening to this can think about difficult change with their company well so

[00:17:49] [SPEAKER_00]: I alluded to it in the beginning but let me put a real point to pen it in he's got to get the

[00:17:55] [SPEAKER_00]: culture like they run a business they kind of know what he will very quickly given his background

[00:18:02] [SPEAKER_00]: he will be able to determine whether operational efficiencies he'll right size the organization

[00:18:07] [SPEAKER_00]: management etc he'll deal all of that but his ultimate ultimate and I will use that word

[00:18:12] [SPEAKER_00]: penultimate opportunity is to say what are we going to be going forward you know and that's

[00:18:20] [SPEAKER_00]: vision but it's also like what's the culture how are we going to turn this thing around

[00:18:25] [SPEAKER_00]: and that requires some real in-depth conversations with his management team that will cascade

[00:18:32] [SPEAKER_00]: throughout the organization you get input from wherever but at the end of the day they're going to

[00:18:36] [SPEAKER_00]: have to give and arrive at this phrase that I use just cultural clarity he's got to say to the

[00:18:41] [SPEAKER_00]: organization this is who we're going to be and this is how we're going to do it and therefore some

[00:18:46] [SPEAKER_00]: of you are going to come to the journey somewhat and we're all going to be good but you can't do

[00:18:52] [SPEAKER_00]: this without achieving a level of cultural clarity that like it's it's number one it's job number

[00:19:00] [SPEAKER_00]: one number two and number three you just have to and I tell you so I spent Monday of this past week

[00:19:06] [SPEAKER_00]: with the management team of Chick-fil-A also yeah they invited me down and one of the things

[00:19:12] [SPEAKER_00]: at the end of the day is chicken right but one of the things that they are so clear about

[00:19:17] [SPEAKER_00]: is their culture I mean unapologetically we don't open on Sundays and if you don't like that too bad

[00:19:22] [SPEAKER_00]: we are a Christian faith based organization you don't have to we're not recruiting new members

[00:19:28] [SPEAKER_00]: but guess what this is our culture we will pray we won't curse like they're just they have rules of

[00:19:34] [SPEAKER_00]: engagement and I think it's why really do you ride past a Chick-fil-A anywhere where there's not

[00:19:41] [SPEAKER_00]: a line I mean totally you're in it usually a long line and they move those lines this is what

[00:19:49] [SPEAKER_00]: Brian and frankly any CEO has to do is get real clear about our culture so that to me that's it you

[00:19:55] [SPEAKER_00]: can yes they'll run the numbers and again they'll determine efficiencies and all of that but

[00:20:00] [SPEAKER_00]: at the top you know all this entire thing his success is largely dependent upon it being

[00:20:06] [SPEAKER_00]: making it very clear to people this is who we are and this is how this transformation is going

[00:20:10] [SPEAKER_02]: to be underway how much of that is I hope I can say this right away how much of that is

[00:20:18] [SPEAKER_02]: listening kind of soliciting from people what they think it is or should be and how much of

[00:20:22] [SPEAKER_02]: it's Brian say I'm kind of telling y'all this is what our culture is going to be so I can tell

[00:20:27] [SPEAKER_00]: from a see I'd had to do this and that's a really great and insightful question Bob so I think the

[00:20:32] [SPEAKER_00]: answer is it's both but using hopefully he has will have a great relationship with that of a jar there

[00:20:39] [SPEAKER_00]: but someone does need to solicit from the organization it can't be purely a treatop strategy it

[00:20:46] [SPEAKER_00]: has to be treatops and grassroots at once my take on it was I literally believe that you find I randomly

[00:20:56] [SPEAKER_00]: when I joined Sharon talk to oh 150 people I don't know the number but it was a significant number

[00:21:02] [SPEAKER_00]: of employees without managers in a room and not in group settings I actually talked one on one with

[00:21:07] [SPEAKER_00]: people to say tell me how do things actually work here what is the culture now so let's start with

[00:21:14] [SPEAKER_00]: what it is we can get to what we aspire for it to be but what is it right now doing that a

[00:21:20] [SPEAKER_00]: assessment work and I talked to a ton of people from the janitor to the executive office this I wanted

[00:21:25] [SPEAKER_00]: to understand no filter with that in hand the next step so I've gotten information insights from

[00:21:32] [SPEAKER_00]: the organization then we convened the management team and said okay guys this is what I've heard

[00:21:38] [SPEAKER_00]: got check it does this resonate because you all were here before I was but now let's talk about

[00:21:43] [SPEAKER_00]: what we want it to be and we collectively talking about crowd sourcing we kind of said this is what

[00:21:49] [SPEAKER_00]: we want to be going forward and then the CEO ultimately is the owner of the culture HR the

[00:21:56] [SPEAKER_00]: silitates it and is the keeper of the culture but I ultimately at the CEO level have to own it

[00:22:02] [SPEAKER_00]: and then you tell people this is what we're gonna be and he has to be prepared as you do

[00:22:07] [SPEAKER_00]: in any organization with some people saying that's not where I want to work anymore okay and some

[00:22:12] [SPEAKER_00]: of those people will be stars but you said but this you've gotta be really clear back to the

[00:22:17] [SPEAKER_00]: the the chicken fillets of be clear about what your culture is and then the right people will

[00:22:22] [SPEAKER_00]: gravitate towards you and when everyone's aligned on culture the business transformation

[00:22:28] [SPEAKER_00]: turnaround becomes a lot easier because you're not fighting from within you already have the

[00:22:32] [SPEAKER_00]: external factors that you're fighting the dunk and now running and growing and done allow you

[00:22:37] [SPEAKER_00]: got all of this happening to you he's gotta get real clear about his culture yeah so I learned this

[00:22:44] [SPEAKER_02]: and you and I'm gonna actually build on for a little bit but you know when you just described as

[00:22:48] [SPEAKER_02]: you did discovery first you did you know kind of very intense listening right so discovery then

[00:22:56] [SPEAKER_02]: we'll call it debate but discussed debate right but decide and ultimately that decision lives with you

[00:23:05] [SPEAKER_00]: as the CEO and then commit period period the commit part is the biggest thing and the CEO can't

[00:23:13] [SPEAKER_00]: make you commit to anything HR can't make you admit but you can't get to the commitment if you

[00:23:18] [SPEAKER_00]: don't have clarity like people can't commit to this it's a vibe and how we're gonna do it I

[00:23:24] [SPEAKER_00]: found that we jumped to the commit CEO said this is our culture I need you to commit to it and you

[00:23:30] [SPEAKER_00]: haven't engaged in the discovery work because he could come in and the temptation is to come in and say

[00:23:36] [SPEAKER_00]: I was very successful at my last gig and I'm gonna overlay how I did it and the culture on this

[00:23:41] [SPEAKER_00]: Starbucks that could be really risky I've seen that done that is a horrible playbook right clearly

[00:23:47] [SPEAKER_00]: we're all informed by our successes but every organization is unique it's unique and it's how

[00:23:54] [SPEAKER_00]: it operates and you got to that's why you have to go through the discoveries phase because you do need

[00:24:00] [SPEAKER_00]: to understand the nuances that the intricacies of how this organization it's an organization at

[00:24:05] [SPEAKER_02]: how it operates yeah and you know one of the things that I have learned from you my many is

[00:24:12] [SPEAKER_02]: culture at the end of the day what two things culture is not right or wrong it is it just the works

[00:24:17] [SPEAKER_02]: for you if you can't commit to this this may not be a good culture for you doesn't mean our

[00:24:22] [SPEAKER_02]: culture's bad just means it's not for you Chick-fil-A is like a perfect example of that but then the

[00:24:29] [SPEAKER_02]: second thing is it's not mission statement it's not vision statement it's not value it's how

[00:24:36] [SPEAKER_02]: stuff actually gets done actually gets done really really really really gets done and at Starbucks

[00:24:43] [SPEAKER_02]: looking at the evidence the way stuff gets done is broken yep and in whether it's

[00:24:52] [SPEAKER_02]: people know there's a problem and it's hitting a ceiling and not getting done or there's

[00:24:57] [SPEAKER_02]: a lack of non-listening going on I've got my own idea I don't want your feed whatever it is

[00:25:05] [SPEAKER_02]: isn't working there and you know I think just going back to Brian for a second you

[00:25:11] [SPEAKER_02]: he walked into a message of hope like that's right it's mess he's been I did not want to go to

[00:25:16] [SPEAKER_02]: Chipotle because I'm going to get Salma Nella right well that's not a benefit many people are looking

[00:25:23] [SPEAKER_02]: for and he turned it around as I said at the beginning you know they've had a 800%

[00:25:30] [SPEAKER_02]: gain in their share price slash market cap everybody's a happy camper right next thing

[00:25:38] [SPEAKER_00]: it's not a blip it is he's done this over time and that proved investors love it employees love it

[00:25:46] [SPEAKER_00]: because they have opportunity and that's something I'm glad you call me back on that earlier when I say

[00:25:50] [SPEAKER_00]: investors is to me I include financial investors and other stakeholders but everyone who's invested

[00:25:56] [SPEAKER_00]: because by the way a lot of these organizations as an employee your full one K is contributing

[00:26:02] [SPEAKER_00]: to invest in the company you may not know it directly but if you're in the market then you

[00:26:08] [SPEAKER_00]: likely to be in some Chipotle somewhere somehow so this idea that all of us have a vested interest

[00:26:14] [SPEAKER_02]: in ensuring this thing works is critical yeah and I mean everybody wants to be on a winning

[00:26:18] [SPEAKER_02]: team nobody wants to be on a losing team right you're very best players are going to go find a better

[00:26:25] [SPEAKER_02]: team to be you because nobody wants to be on an under 500 team and then some it's some level

[00:26:32] [SPEAKER_02]: I have to believe that creativity innovation suffers because what's the point all right you know like I don't want

[00:26:41] [SPEAKER_02]: you know it's all kind of hopeless versus no we've got this and there's this renewed vision for

[00:26:46] [SPEAKER_02]: we can be and why we want to be who we can be and I can get a line around that which is all the

[00:26:52] [SPEAKER_02]: culture stuff last question is I'm going to guess that he might bring some trusted advisors along

[00:27:00] [SPEAKER_02]: with him that's right how do you do that in a way that is not completely disruptive but at the same

[00:27:08] [SPEAKER_02]: time it's a CEO you need to be surrounded by people who get you and can help you hit the ground running

[00:27:14] [SPEAKER_02]: a little faster than not having a core group of people around you so that's that is one of the

[00:27:21] [SPEAKER_00]: most hotly debated and contested conversations in boards and in leadership generally partially

[00:27:30] [SPEAKER_00]: because well there's some practical realities my guess is rating chipotle either they will contractually

[00:27:38] [SPEAKER_00]: not be able to do it they're in the same space one is a different type of food but at the end of the day

[00:27:44] [SPEAKER_00]: is probably something in his former contract with his company and in the contracts of his

[00:27:49] [SPEAKER_00]: other executives that say you can't exactly rate us so that's one secondly there's some practical

[00:27:56] [SPEAKER_00]: realities in that that company is doing well chipotle his people aren't quick to jump and go jump into

[00:28:02] [SPEAKER_00]: this situation which is still a question mark right we've seen a bullet because sure but he won't be the

[00:28:07] [SPEAKER_00]: first person who you know so am I going to leave the thing that I'm always working this chipotle

[00:28:13] [SPEAKER_00]: my security and if they have all sorts of compensation plans as you might expect that tie these

[00:28:18] [SPEAKER_00]: people to the company so I think practically I don't think there's a chance that he just goes

[00:28:25] [SPEAKER_00]: and rates his former organization probably not in the best taste anyway but you do need a certain

[00:28:31] [SPEAKER_00]: number some number of people who come with you who know you so that you can work faster when I

[00:28:38] [SPEAKER_00]: join Sherman CEO I brought a couple of people to a three and I was intentional not to displace

[00:28:43] [SPEAKER_00]: other people so that's the key. You come in the door and I need these two or three people and I say

[00:28:50] [SPEAKER_00]: I'm going to fire my otherwise nicely performing CFO and I'm going to fire my GC and I'm going

[00:28:54] [SPEAKER_00]: to bring in and replace those jobs that's dangerous because it creates a lot of angst within the

[00:29:00] [SPEAKER_00]: management team. Okay so at one point does he just replaced me with someone from his past you

[00:29:06] [SPEAKER_00]: got to be careful there so you bring it advisors and if there are open jobs currently let's say

[00:29:13] [SPEAKER_00]: he has an open CFO job well then great you can bring someone who you've worked with in the past

[00:29:17] [SPEAKER_00]: or you've experienced through some other interactions in a past year like I want to bring them

[00:29:22] [SPEAKER_00]: but I caution leaders this is not like becoming the president of the United States where

[00:29:26] [SPEAKER_00]: the entire cabinet goes away and you replace them all and frankly I think the federal government

[00:29:32] [SPEAKER_00]: could learn from that too because you do lose some very, very important

[00:29:39] [SPEAKER_00]: culture when you do that and you create instability but he's got to an every leader I know

[00:29:45] [SPEAKER_00]: and the way that I did it you do bring two or three people who allow you to get to market a lot

[00:29:49] [SPEAKER_00]: faster because they know how you operate they know how you think and you all have a playbook

[00:29:53] [SPEAKER_00]: of so many times. Any final thoughts? I'm just looking at the time and I'll make sure

[00:29:58] [SPEAKER_00]: I might be like your time and let's start. I think the biggest thing is is early on Brian when you

[00:30:04] [SPEAKER_00]: come into an inter-organization either that needs to be transformed just because or because

[00:30:09] [SPEAKER_00]: they've committed to transforming or that's in trouble you've got to win the hearts in the minds

[00:30:14] [SPEAKER_00]: of your employees. It's the end of the day while it's really important to sitting corporate and

[00:30:20] [SPEAKER_00]: talk about what they're talking about in corporate and design new plans and everything that front

[00:30:25] [SPEAKER_00]: line staff has got to believe in you because if they don't believe in you they can sabotage the

[00:30:32] [SPEAKER_00]: business, they can leave the business and find other opportunities etc. So I would just encourage

[00:30:38] [SPEAKER_00]: and he doesn't need to hear this from me but any leader when you walk into the situation you do

[00:30:43] [SPEAKER_00]: have to very quickly capture the minds and the hearts of the masses. Yes, yes, yes, so we talked about

[00:30:52] [SPEAKER_02]: this a lot is convictions what do you believe is true leads to clarity which will define their

[00:30:59] [SPEAKER_02]: strategy moving forward. Once you've got clarity clarity breeds confidence we've done the

[00:31:05] [SPEAKER_02]: homework we've done the listening we're committed to it and confidence is contagious people want

[00:31:11] [SPEAKER_02]: to believe Johnny. I believe people want to believe give me something to believe in and you know

[00:31:18] [SPEAKER_02]: I think he's got a great chance I think again the broader application is exactly what you said

[00:31:25] [SPEAKER_02]: you have got to bring these employees along with you and if you can do that that's a tidal wave

[00:31:31] [SPEAKER_02]: waiting to happen. That should be amazing. So it's not the one if he can do this. All right,

[00:31:38] [SPEAKER_02]: man, we're going to always do our friendly audience here at the workwire thank you so much

[00:31:43] [SPEAKER_02]: and investing in a few minutes of your day listen to Johnny I talk about what's going on in the news

[00:31:47] [SPEAKER_02]: and how it impacts the world of work and with that Johnny I will let you go come on the workwire

[00:31:53] [SPEAKER_02]: do it have a great great weekend everybody and we'll see you on the next episode.

[00:31:58] [SPEAKER_00]: Not right, be well.