Entanglement and the Power of Grassroots Leadership: Inside Scoop with Dr. Ray Benedetto

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CustomerThink Founder/CEO Bob Thompson interviews Dr. Ray Benedetto about the difference between employee engagement and entanglement, and the critical role of leadership.

 

Interview recorded January 15, 2013. Transcript edited for clarity.

Bob Thompson:
Hello, this is Bob Thompson of CustomerThink. For this edition of Inside Scoop, my guest is Dr. Ray Benedetto. He is a retired United States Air Force Colonel and founder of a consulting firm that helps leaders build high-performing, character-based cultures. He also teaches leadership and strategic planning for the University of Phoenix in Chicago.

What we’re going to be talking about today is a new book he co-authored, It’s My Company Too! How Entangled Companies Move Beyond Employee Engagement For Remarkable Results. Ray, welcome to Inside Scoop. It’s great to have you on my program.

Ray Benedetto:
Thanks very much, Bob, really glad to be here. And I say, “we,” because I’m simply representing the entire author team of Tom Walter, Dr. Ken Thompson and Molly Meyer, as well as myself.

Bob Thompson:
Great, and I’m sure it was quite an effort. Having four authors involved must have been quite interesting.

Ray Benedetto:
Well actually, what was really great about it was it was truly a collaborative effort, and each one of us brought a unique perspective that was really valuable as we put all this together as we were pursuing the research.

Bob Thompson:
Well let’s start. I mentioned that you do some consulting. What’s your consulting business about?



Ray Benedetto:
Well we’re an organizational development practice that focuses on the best practices and leadership in management that are going to help companies become great performers, great companies. There’s a component of that, which really comes right back to the foundation here, it’s my company, too. Leadership begins with character. And so, that’s what we focused on building first and foremost, is character-based cultures, which then help to drive this whole aspect of what we talk about, in terms of entanglement.

Bob Thompson:
You mentioned culture. We have to stop and discuss that for a moment. In fact there’s been some interesting commentary about culture on CustomerThink just in the last couple of days. How do you define culture?

Ray Benedetto:
Culture is the beliefs, the shared beliefs, values and assumptions that drive behaviors within the organization. Culture, after leadership, trumps everything else. If you don’t have a good culture, then everything else is going to fail.

Bob Thompson:
Right, but you would say that culture drives behavior.

Ray Benedetto:
Absolutely.

Bob Thompson:
If you don’t see any behaviors, then is the culture really there or is it just a slogan on the wall?

Ray Benedetto:
Exactly. In fact, the foundation of that is core values. How do you get everyone aligned on core values? And that goes right back to the leadership, first and foremost, inside the organization, how they define the culture, how they shape the culture, how they nurture it and also then how do they help everyone protect it?

Engagement vs. Entanglement

Bob Thompson:
Great, so let’s get to your book. It’s really a great read. I have been studying employee engagement and following research from Gallup and others. It’s almost a feel good sort of topic. Let’s have engaged employees and you can draw nice correlations to business performance. I’ve always felt like there was something missing. Where is the customer in engagement? It just seemed like too much sort of a pat – “let’s have happy employees and then a miracle happens and businesses perform better.” I was quite interested to read your book about this notion of entanglement. How did this book come to be written, and specifically, how did you come up with this idea of entanglement in that process?

Ray Benedetto:
Well, to make a long story short, I was doing research several years ago, in terms of the impact of character in business settings, specifically in small businesses because we were doing some research, in terms of what’s the impact of character, and there was nothing definitive written about that. So, here was Tasty Catering in Elk Grove, Illinois. They declared themselves to be a character-based culture. I thought, OK, what does that look like?

I actually lived inside the company for two months doing an ethnographic study, the study of the culture. And what I found then was this river of character that runs through every organization. That river is defined, first and foremost, by the qualities, basically the values that individuals bring into the workplace and then how they live them out within the workplace and make them organizational characteristics and not just individual characteristics. In Tasty’s case, their very first value is we will always do what’s moral, ethical and legal. Second is treat everyone with respect. Third, quality in everything we do. That was embodied in these behaviors.

After we got done the research, Tom, Walter and I said, “Geez, OK, you’re an award-winning company, Tom. What about other award-winning companies? Is there some commonality here; is there common ground?” And so then we identified some top-performing organizations, some of which were Baldrige recipients, others were best places to work. Some had industry awards out the arm, like Tarlton Construction down in St. Louis. We said, “OK, let’s ask a series of questions and let’s get inside these companies and do some additional research.” And from that, we saw this entangled organization emerge. We didn’t go out looking for it. We were looking for the simple questions, what do high-performing organizations have in common?

Bob Thompson:
OK, but you identified how many companies to do your more in-depth research?

Ray Benedetto:
We started off with about 20. We honed it down to 8.

Bob Thompson:
Let’s talk about entanglement. How do you define it? How is it different from engagement?

Ray Benedetto:
Well let’s first define engagement because that’s the starting point that everyone seems to be buzzing about. Engagement means being committed to something or someone in an organization. And there are two levels there. It can be a rational level, a rational commitment of seeing one’s job as serving a financial, developmental or professional self-interest. Or it could be emotional, where one particularly values, enjoys or believes strongly in what one does. And remember, the keyword here is ‘what one does’ because this is about an individual decision. Individuals commit to being engaged. This is not an organizational perspective.

When we go beyond that, entanglement really reflects this drive, not just by the individuals, but by the organization as a whole to be better than they were yesterday. It’s a deep commitment that constantly runs throughout the organization that really can result in a sustainable competitive advantage for that particular company. When you think about it, entangled employees focus on making collaborative decisions with others that are going to yield not just the best possible results for themselves as far as the organization is concerned, but more importantly and for their customers because they’re the ones who truly determine the value of that organization.

Bob Thompson:
OK, that’s an interesting point. You mentioned more of this connection to the greater good of the company, as well as what are we here to do for the customer and how are we going to drive performance?

Ray Benedetto:
Yes.

Gallup Employee Engagement Survey Questions
Q01. I know what is expected of me at work.
Q02. I have the materials and equipment I need to do my work right.
Q03. At work, I have the opportunity to do what I do best every day.
Q04. In the last seven days, I have received recognition or praise for doing good work.
Q05. My supervisor, or someone at work, seems to care about me as a person.
Q06. There is someone at work who encourages my development.
Q07. At work, my opinions seem to count.
Q08. The mission or purpose of my organization makes me feel my job is important.
Q09. My associates or fellow employees are committed to doing quality work.
Q10. I have a best friend at work.
Q11. In the last six months, someone at work has talked to me about my progress.
Q12. This last year, I have had opportunities at work to learn and grow.

Bob Thompson:
Now, I’ve pulled a list of the 12 questions that Gallup asks. I’m not trying to give them a commercial here, but just to draw a comparison. First of all, the questions are fine. If I’m an employee, I would love to have somebody ask me these questions.

Ray Benedetto:
Sure.

Bob Thompson:
When I was at IBM they did lots of surveys and were known for having engaged employees at the time — such as “I know what’s expected of me at work.” I’m just picking a few here at random, there’s 12 of them. “My supervisor seems to care about me as a person,” “my opinions seem to count,” “I have a best friend.”

I don’t see customer, I don’t see business performance, I don’t see much at all about working with others here. It seems to me that’s what you’re getting at, not about how individually engaged a person is, but how are they working as part of the organization? Have I got it straight?

Ray Benedetto:
Yes, you do. In fact, Bob, when you think about this, let’s go back to the origin of the Gallup 12. The Gallup 12 came from Buckingham and Coffman’s book, “First, Break All The Rules.” They were focusing on the research of why individuals stayed or left the company. If you recall, first and foremost, they leave the company because of their relationship with their immediate manager, OK?

Bob Thompson:
That’s right.

Ray Benedetto:
And so, this is about a “me” thing, when, in fact, entanglement has nothing to do with “me.” In fact, entanglement has to do with “us.”

Bob Thompson:
But it’s not saying “me” isn’t important. It’s saying that it’s in addition to “me.” The employee still has to feel like there is a win for them individually, but there should be more to it than that, right?

Ray Benedetto:
Absolutely, you’re right. And Bob, if I can just add one other thing about entanglement… The word initially sounds negative because when you think about entanglement, it’s like being ensnared, like being in a spider’s web. But when you think about it, it can also be an extremely positive, strong force within an organization that actually draws people together. And that’s what we found inside these high-performing organizations.

Bob Thompson:
Well, you’re really describing what I would call it a type of culture where people really feel a strong connection to something beyond just what they’re going to get individually.

Ray Benedetto:
You’re absolutely correct. And the other side is when we talk about an entangled culture, there is a natural tension that exists within the organization because everyone has this knowledge that you know, we can be better tomorrow. What we did today was good, but let’s do something better tomorrow. It’s that constant tension of never being satisfied with where we were, so what are the opportunities we have tomorrow to even be better?

Freedom Within a Culture of Discipline

Bob Thompson:
I wanted to see if you can give an example here. Now you have eight different elements. If you don’t mind, I’m just going to summarize them. They’re in the introductory material to your book. You have things like having leaders who do extraordinary things, building an ethical organization, focusing all of the human capital, using processes to guide performance, increasing an individual’s self-efficacy, hardwiring discretionary thinking and actions, and guiding the transformation to remarkable performance.

All great stuff and good reasons to buy your book. The one that drew my eye was giving employees freedom and responsibility within a culture of discipline. I’m very much a fan of this notion of empowerment, which is another fuzzy word, I’ll admit. I’ve seen very successful examples of companies – let’s take Apple. They have a very innovative culture, at least to the outside world. When you go into their stores, it’s a good experience most would say — they get high ratings. But if you dig down deep, you find they have a very sort of prescriptive way of how people should dress, how they should deal with customers. There’s really not a tremendous amount of freedom, but the directions they give seem to work. When you go in there, you get a good experience.

How do you have flexibility with some discipline? Could you expand that and perhaps give an example?

Ray Benedetto:
One of the things, we go back to the eight stories that we told in the book of these eight different organizations, we simply used each one as an example of that specific trait or quality, but we found these to be consistent also in other organizations. It’s just that we choose that particular story to highlight the quality.

In this particular case, let’s talk about Tasty Catering. Tasty Catering is the top corporate caterer in the Chicago area. They’ve won a lot of awards, best places to work five years straight, numerous industry awards. They’re truly an exceptional entangled culture. And yet when you think about their vision statement and then what they strive to do, one of their core values is giving this freedom and responsibility within the culture of discipline. Everyone has a circle of influence, and what happens here is first and foremost, we talk about number one, having leadership do extraordinary things. Everyone in the organization is considered a leader because every single person has influence. It’s not a matter of position, it has nothing to do with hierarchy. It’s a matter of who are you going to influence today? You can influence your immediate team, you might be able to influence your customers.



The drivers, as an example, they go out into the external environment, they deliver the products and goods, but what’s most important is the service that they provide when they deliver those goods. It’s not just the quality of the food, it’s how they deliver it.

Bob Thompson:
Right, the experience that is part of the value beyond the product.

Ray Benedetto:
Exactly. So now, we’re talking about what kind of relationship are you building then with the people that you’re serving? So now, this is a leadership mentality. If you think about that, it’s not about controlling people. It’s about giving them new opportunities. We’re saying, “OK, here’s the environment you’re working within, and what we’re going to do is we’re going to give you the freedom of responsibility to act as you see is necessary at that moment in time to provide the best possible service you can to your client, to your customer.”

Case in point, here was the situation: During the summer months, Tasty Catering must do at least 500 major picnics. You can imagine the logistics associated with that. Well, the crew leaders again – I’m talking about developing leaders – the crew leaders on most of these projects are college-age kids, they may be juniors or seniors who have grown up to the Tasty culture during the summer months, they’ve learned about different things, and now they’re in a leadership role, OK? So, here is a 22-year-old crew leader who’s out there on the site and realizes that this is the project that is just a nightmare.

Bob Thompson:
Something’s going wrong.

Ray Benedetto:
Right, the beer is flat.

Bob Thompson:
Take charge and figure it out, they’re not going back to take orders, to tell them what to do.

Ray Benedetto:
Exactly, so she goes directly to the client and says, “Sir, I’m really sorry, but this whole picnic is not meeting our standards. I’m calling back to my COO to let him know that you’re not going to be charged for any of this. I’m just very sorry, this does not meet our customer service standards.” And the guy couldn’t believe it, customer couldn’t believe it. He said, “Wait a minute, you’re telling me you’re not going to charge me for this?” And this is a couple thousand dollars, OK?

Bob Thompson:
And she didn’t have to check with anybody?

Ray Benedetto:
Exactly right. She didn’t have to check with anyone. And he says, “Wait a minute, I want to talk to your COO.” So, he picks up the telephone, talks to the COO, who says, “If our crew leader, sir, has said that that doesn’t meet our standards, it doesn’t meet our standards. Thank you very much for your service. We want to ensure that you’re satisfied, and we hope that you come back again.” Now what do you think happened as a result of that? Of course they came back again because there were standards that the employees were letting by, and if they didn’t meet their standards, they definitely didn’t meet the customer’s standards.

Bob Thompson:
Did the employee know in advance that she had the authority to give a full refund if something was going wrong?

Ray Benedetto:
Absolutely because now we’re talking about this freedom. That’s operating within a clear definition of their role and their performance expectations. And so now, it helps to define not only one’s area of responsibility, but whether they have flexibility.

Bob Thompson:
OK, but the other part of it is the discipline side. For example, the employee didn’t have the opportunity to say, “Well you know what? I think I’m going to go set up a stand at the Super Bowl because that looks like a really good opportunity. I’m just going to go do it.”

Ray Benedetto:
That’s where the discipline comes in relating to the appropriate conduct in any situation, which then stemmed from the core values and the desired behaviors that demonstrate those core values.

Bob Thompson:
Very interesting.

Ray Benedetto:
In this particular case, when you look at treating others as you would want to be treated, with respect and quality in everything we do, that crew leader knew immediately number one, are we really treating the customer the way we would want to be treated? And number two, is this truly the quality that we’re expected to deliver? And she said, “You know what? We missed on both counts. Therefore, this doesn’t meet our standard.”

Bob Thompson:
To me, this is such a great story because it shows that the culture actually means something. You can put up a slogan that says the customer’s always right, but then when these things happen and you don’t deal with them, you’re really saying, well, no, they’re not. We don’t really care that much about them unless it’s convenient.

Ray Benedetto:
Well, and that’s the other point, is that it’s not a matter of convenience. The customer is not always right. Let me give you another case in point, OK? When I was doing my research back in 2009, Tasty Catering had just acquired another caterer who was doing residential catering, which was not Tasty Catering’s core competence, but nonetheless, they had taken on this business. They now went out and they did a delivery – actually, not just a delivery, but it was a full range buffet service. The customer came back and complained. Now they complained about the quality of the food and made a claim about the food, itself. With all the times that Tasty Catering had delivered a similar type of product, never a problem. What they found out later was that this person was dishonest and they were trying to get something for free.

Well, what do you think Tasty Catering did? There again, knowing their values, they said, “OK, we will provide obviously a major discount to this client.” But when they found out the truth, they said, “Well, we’re not sure we want to do business with this person any longer.” And so, they simply ended the relationship at that point. That had to go up to the CEO. And the CEO upheld the decisions of the people below, but he also said, “We’re not going to do business with the person any longer because we can’t trust that person. That person is acting inconsistently with our values.”

Bob Thompson:
Sometimes it does make sense to fire customers, but you have to do it appropriately, don’t you?

Ray Benedetto:
Right. And judiciously, as you said, you’ve got to use tact. But at the same time, you have to appreciate your people for the decisions they’re making on the line.

Business Case and Role of Leaders

Bob Thompson:
Let’s close and talk briefly about how you make the business case. Let’s say you’re talking to a CEO who’s kind of raising his eyebrows and saying, “Hmm, it sounds like a lot of work here.” Convince me that it’s worth it in the end on the bottom line to try to move toward this notion of entanglement.

Ray Benedetto:
OK, so my question then to that CEO is going to be, number one, what’s your employee turnover? Number two, how much are you spending, in terms of training and development for new employees every year? Number three, how much are you spending on the recruiting side? When you add all those figures up, then I want you to tell me what the value is for keeping one of your employees because every single employee that you keep, you can then turn those dollars that you would have spent in for a new employee.

Bob Thompson:
Wouldn’t engagement give me the same thing?

Ray Benedetto:
No, not necessarily.

Bob Thompson:
OK. What else do I get besides better employee retention?

Ray Benedetto:
Think about the retention. That reflects loyalty, does it not? Talk about alignment with core values. All these organizations, in talking to the employees as well as the customers, the one thing the customers say is, “You know what? I really enjoy working with Tasty Catering,” as an example, or Tarlton, “because I know when I make my phone call to them and tell them what my needs are, they’re right there with me, they understand what my needs are, and they relieve my anxiety. We’re talking about relationships, how much Mr. CEO are you willing to pay for the relationship-building that your employees do with your clients? Are you willing to lose that person and also then lose that relationship with that client because that’s the person they trust?

Bob Thompson:
What you’re describing, it feels a little bit like to me, is like Tony Hsieh at Zappos. He’s not a very effusive guy in speaking, but you can tell that he’s very passionate about how he wants to run the business, delivering happiness. That could be kind of a gimmick, but he somehow made it real.

Ray Benedetto:
Yes.

Bob Thompson:
If a CEO isn’t sort of wired that way, how do you get them to do the things required to create this entangled culture and get some of these more loyal and committed employees that you’re talking about? Do you have cases where they wake up, see the light, and say, “Oh, OK, I have to change”? Fundamentally, if the leader doesn’t change, this stuff isn’t going to happen, right?

Ray Benedetto:
You’re absolutely right, Bob, because the thing is, the change begins first from within. Tom Walter will tell you that. Up until 2005, he had a command and control mentality, OK? He had to tell people what to do. And then what happened was his two up and comers, Jamie Pritscher and Tom Walter, who were the Chief Logistics Officer and the Chief Financial Officer respectively, they were in their 20’s. They said, “You know what, Tom, if you don’t change, we’re out of here because we don’t like the fact that on a daily basis, we don’t know which owner is going to fly off the handle. We don’t know which direction we’re going. You need guys to determine what your leadership style is, but we’ll tell you what, you keep acting like this, we’re out of here.” So, the millennial generation caused Tim to step back and say, “Whoa, I need to really do something differently.”

Bob Thompson:
It was almost like an intervention.

Ray Benedetto:
Well, now we talk about the whole issue of emotional intelligence, what leadership styles were you using? And we find in all these organizations, you may have to provide some authoritative leadership from the front end to give some people direction, but it’s a matter of the affiliative style, how do you create harmony inside your organization, how do you coach others and develop them? That’s where that whole idea of leaders at all levels need to be developed.

Bob Thompson:
I know this is a hard question to answer, but are you finding CEOs and business leaders, in general, are receptive to changing? Do they feel the need to act and behave differently and set a different example and all these things you’re talking about?

Ray Benedetto:
Yeah.

Bob Thompson:
Is it happening?



Ray Benedetto:
Why is our business growing? Because when you think about it, there are businesses out there saying, “I need to do things differently, I need some help.” They don’t know how to do it because for one thing, I wasn’t taught how to be a leader, I wasn’t developed to be a leader. I fell into this thing somewhat naturally. But when you think about the two-thirds of organizations that are dysfunctional and ineffective, it’s because they’re over-managed and under-led. And so, what we need to do is we need to help leaders learn how to lead.

That’s where first my background in the military, I was spoiled, quite honestly because I grew up in a system where transformational leadership was the norm. It wasn’t what a lot of people think about command and control. Yeah, it’s part of that, but that’s old World War II thinking. If you look at the military today, it’s light, mobile, fast and flexible. And we’ve been developing leaders at all levels. You look at these young NCOs who are out there leading squads, they know how to lead at a tactical level.

Bob Thompson:
That’s an interesting thought. I’m not familiar with the military, personally, but I have to admit I sort of have an old school image in my mind. But having just watched Zero Dark Thirty, it really brings a different culture in mind — the kind of decisions and actions that are taken in the ground by the CIA, the military, whatever. It’s really not like it’s all going back to headquarters.

Ray Benedetto:
Well and to your point, Bob, think about this, the power of grassroots leadership. In the private sector, grassroots leadership is important because that’s where that individual from the company is facing a client or a customer. They’ve got to be able to influence that client or customer in a positive sense, in a positive way. That’s where they need to be trained as leaders, not as managers of a process. They need to be understanding the relationship that they’re actually building one on one with that customer.

Bob Thompson:
All right, well Ray, it’s really great talking with you. For those interested in the organization aspects of creating a customer-centric culture, I think this is just an outstanding book to go beyond the “let’s have happy employees thinking” that I’ve seen out there quite a bit, and really get to truly a culture that’s committed to high performance and providing customer value.

Ray, I’ll give you one last word here to close. Do you have a tip for success or a way to get started for – aside from buying your book – but a way to get going if somebody is intrigued by these ideas?

Ray Benedetto:
I think first and foremost, it begins with self-leadership. And looking at self-leadership, they need to understand humble servant leadership because leadership is all about serving others. How they do that requires some learning and development. It’s not a matter of training. It clearly is a matter of development over time.

Bob Thompson:
Ray, thank you so much for joining me on Inside Scoop and talking about the new book you co-authored, “It’s My Company, Too.” It’s been a pleasure.

Ray Benedetto:
Same here, Bob. Thanks again. Have a great day.

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