No matter what type of organization you are in, your culture will drive you ability to plan an prepare for the future. Its important to be intentional about building it. Human interaction is culture.
We are excited to discover, with you, the key commonalities and best practices that allow both public and private organizations from capital intensive industries to become stronger at managing their assets over time.
Learn more at: www.durablecapitalindex.com
Ben Parker:
They were going to talk about how culture and the human aspect of your organization is critical to your long-term durability. Welcome to The Durability Podcast. This is for those that are passionate about helping their organizations plan and prepare for the inevitable future. My name is Ben Parker, management consultant, chemist, creator, entrepreneur, co-founder, and member of the Durable Capital Group. I'm excited for you to join me as we discover what successful organizations do to build long-term durability. We explore the tactics and strategies that allow great organizations to combine the financial wisdom of asset management, the practical street smarts of the maintenance subculture with the real-world paranoia of managing risks to ensure their organizations last. We uncover what great leaders are doing from all types of capital intensive industries to make decisions, build strong management teams, and prepare to meet the future in whatever form it comes. This is The Durability Podcast.
Welcome back to The Durability Podcast. It is a beautiful January day here in Boise, Idaho, fantastic 36 degrees Fahrenheit, and I'm excited to be here with you today. I was out early this morning and it was a beautiful sunrise, fantastic day, and it's a great day to talk about some of the key drivers that help build long-term durability into an organization. And one of those key drivers is definitely your culture. And specifically, the culture of human interaction in your organization. And there are a lot of topics around this subject. And there's a lot of discussion, and opinion, and a whole spectrum of different approaches. However, my personal opinion and what I can conjecture from the data that I have in front of me and from my experience, is that it seems to me that how an organization builds its culture is an indicator of its long-term durability.
And there's always a balance. There's always trade-offs. But when you look at some of the lasting organizations, the ones that have become successful, very few, if any, and I cannot think of any, have been lackadaisical about building their human element in their culture. And what do I mean by human element? Organizations are obviously made up of people and people matter. We all like to think that what we do matters. And what we do is actually a better indicator of belief and what our opinions are than many times our words are. And so, if you look at organizations who have an indication that their people matter, and they have the focus to be able to help leverage the aspects of their culture, that allows people to feel like they are contributing to the value of a long-term goal, as well as the meaning that their job provides each day, not just to themselves but to the organization, you get very interesting results.
And the best way to describe this is actually to give the converse. So what happens in an organization when employees do not feel motivated? When the managers do not feel empowered? And when the culture is one of short-term reactionary thinking and blame, usually comes along with [inaudible 00:05:07]. What we find is that one interesting thing starts to happen. A spirit of consignment starts to enter into the operation side, typically, where they see all these potential opportunities or things that need to get fixed or planned for, and have something planned for, let's take a capital improvement plan for example, maybe in the specialty chemical industry where you have a reactor that has a 10 year functionary useful life, and nobody's been paying attention to how many years it's been since that reactor was put in, and nobody knows where the money's going to come from to replace it once it needs to be replaced, but we're going to make product until we figure out that we can't and then we'll figure out how to replace the equipment.
Things like that. Where you have every year a manager coming in and saying, "Hey, we need to put this in the budget." And then every year it gets cut from the budget. And then as it gets closer and closer, it gets higher and higher in priority. You know how the story goes. But what we see is there's an interesting things that happen in cultures where the human aspect of that dynamic is not cultivated. Many of those employees who either have a need, can see a need, they tend to become negative. There's a dynamic that happens where they stop communicating actual needs in ways that they can emotionally protect themselves when the outcome isn't what they want. And it's this fascinating dynamic, and we've all seen it. And essentially what happens is, is organizations start to facilitate the natural human ability to become negative and to focus on the negative.
And then the rhetoric starts to become even more negative. And then it starts to creep into other aspects of what the organization can and can't do, or is willing to do and is not willing to do. And I find it fascinating, an example of like a reactor going out, which that's just probably more of a physics problem than it is an emotional problem. You can do assessment tests, you should be keeping an eye on it. And many times people, once they get in a mindset or in a culture where they do not feel like their contribution matters or that it's not relevant, then that starts to impact other aspects of what they do.
And it's my experience that when we can really focus on building the right communication structure in our organization, that helps not just the board executive level team understand why certain decisions are made or not made, but also help other managers, employees and stakeholders understand the emotional implications of how they communicate their needs to others, how they assess whether something is valuable or not, can come to a better understanding of how to facilitate proper emotional connection and motivation in organization.
So, I just wanted to talk a little bit about how culture impacts the long-term durability of an organization. And this is one aspect that is very interesting to me. You can see it in all sorts of organizations. And one of the things that I find very telling, is how at different levels of an organization, how those discussions and dynamics are treated. And it comes back to, do people feel heard? Do you have the right pieces in your conversation? And are you focusing on the right thing, which ultimately comes down to, are you asking the right questions?
And one question that is essential for organizations to really build a strong culture around how they build and plan for the future is how they treat their executives, their management teams, and their employees to help get the information that is critical and relevant into a place and a form that good decisions can be made without getting an emotional bias or, and that bias goes both ways, by the way. That's either emotionally connected to something and so you over project its actual value in reality, or you get emotionally dejected by something and so you underplay its significance, importance and value. And those dynamics definitely have an impact on an organization's ability to plan and prepare for the future. So, that's all I have for today. Hope you have a fantastic day. Join us next time on The Durability Podcast.
Hey, everybody? I just wanted to share with you something that has been super effective at helping organizations to really kickstart the conversation around how they're going to build long-term durability into their management practices. And if you stop what you're doing right now and go to ww.durablecapitalindex.com, that's durablecapitalindex.com, you can sign up to take a very special assessment. This is the durable capital index assessment. It's a baseline assessment, and it'll show you exactly where you're at currently with fundamental best practices for building durability. And it will give you a very detailed feedback report that you can take and share with your team. So if you go to ww.durablecapitalindex.com, sign up, take the assessment and share with your team, and really start that conversation around building long-term durability into your organization.