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Mike Cottmeyer with LeadingAgile explains how company culture is created with each new hire, each new policy, and each operational change. His business is ran with 100% transparency and honesty with intentional tweaks along the way. Hire and build, hire and build!

Mike Cottmeyer

Mike Cottmeyer

CEO and Founder at LeadingAgile, Inc

Mike is the CEO and founder of a fast growing Agile Transformation consultancy based in Atlanta, Georgia. His company, LeadingAgile, works globally with mid-sized to Fortune 100 companies. LeadingAgile has developed a top-down strategically-aligned system of transformation that is tightly integrated with an industry leading system of delivery. This approach is integrated with an engaging bottom-up, iterative and incremental approach to leading change. All of which is wrapped in a pragmatic metrics-driven approach, focused on demonstrating tangible business value every step of the way, which has been proven in the largest of the large organizations.

LeadingAgile is a company dedicated to helping larger, more complex organizations achieve better business outcomes through the systematic application of agile delivery methods across the entire enterprise.

Our company is primarily focused on the transition patterns and intermediate states necessary to safely and pragmatically lead any company through a structured and planned transformation event.

We are committed to engaging in a way that respects where each company is today, while laying a foundation for where it needs to be in the future. LeadingAgile takes the magic out of agile transformation.

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Full Transcript

Announcer: Welcome to the Epic Company Culture Podcast, where you host, Josh Sweeney, will give you, the business leaders, HR professionals, and company culture aficionados the knowledge you need to take your company culture to the next level.

Josh Sweeney: Hello fellow culturists, and welcome to the Epic Company Culture Podcast. This episode is part of our Culture Champion series.

Series: Culture Champions

Before I get started, I would like to thank Prototype Prime for this amazing podcast space. Today we are joined by Mike Cottmeyer of LeadingAgile. He is the CEO and founder. Thanks for joining us, Mike.

Mike Cottmeyer: Thank you, thanks for having me.

Josh Sweeney: Yeah, it’s great to have you in. So I’d love to kick it off and hear a little bit about your company culture experiences prior to LeadingAgile-

Introducing Mike Cottmeyer!

Mike Cottmeyer: Okay.

Josh Sweeney: So go back however far you’d like to, and share with us what were some company cultures that you were a part of that really resonated with you, something that you really enjoyed?

Positive Culture Experience

Mike Cottmeyer: Yeah, so when I thought about that question, the one that came to mind was a company just up the road from here called Version One. And it was the first time I ever worked for a small company, and we were about 27 people when I joined. I think they’re bigger than that now, they merged with a company called CollabNet a little bit ago. But it was the first time I had ever worked in a place where I felt empowered, and trusted, and could really just do what I needed to do to get my job done. Had great leadership within that company, a lot of freedom, it was awesome.

Josh Sweeney: Yeah, so empowerment and trust-

Mike Cottmeyer: Yeah.

Josh Sweeney: Are two key words I kind of pulled out of that.

Autonomy over Micromanagement

Mike Cottmeyer: Yeah, absolutely, right. Absolutely. So you know, nobody likes to go to work and feel like they’re being micromanaged, or that people are on top of them all the time, and yeah, it’s like the whole kind of … I guess it was like … you know, like autonomy, mastery, purpose, Dan Pink kind of stuff, you know?

Josh Sweeney: Yeah.

Mike Cottmeyer: Had a lot of space to do what I thought I needed to do.

Josh Sweeney: And that was built into their culture.

Culture Starts with the Processes

Mike Cottmeyer: Yeah, so part of what we do as a company is we help transform organizations to be able to build software more effectively, and part of that culture, right? And so we have a hypothesis around forming culture that it starts with a little bit about how you organize, right, how you do teaming strategies within the company, and then how you do governance, and process, and do those kinds of things, enable creativity and collaboration, or do they get in the way of it? Right, that kind of stuff.

Josh Sweeney: Right.

Create the Ecosystem

Mike Cottmeyer: And then if you can create the right ecosystem for it, then really healthy, positive cultures emerge. And that’s what I think happened at Version One. It’s like, just the way we teamed, the way they had the rules in place, the mission and objectives that we were pointed at, just really lent themselves towards that kind of positive company culture.

Josh Sweeney: Got it, so it sounds like some of the things you went through there, and utilized there, you’ve used in the new business, right?

Mike Cottmeyer: Yeah.

Josh Sweeney: Your business.

Mike Cottmeyer: Yeah.

Josh Sweeney: Well take a step back, tell us a little bit about yourself and LeadingAgile.

LeadingAgile

Mike Cottmeyer: Okay. So LeadingAgile was formed about eight and a half years ago, and I kind of joke about it a little bit, I’m an accidental entrepreneur, I literally quit my job and I wanted to be an Agile coach. And in doing so, you’ve got to get out and hustle, you’ve got to sell, right? So you become an accidental marketer, you become an accidental finance person, you become an accidental everything, right?

Josh Sweeney: Right.

Telling the Story

Mike Cottmeyer: And so I was working 80 hours a week, and consulting 40, 50 hours a week, fortunately a lot of it was here in town. And then doing all the business stuff around it, and then very slowly started hiring people. And candidly got kind of good at telling our story, and marketing, and messaging, and such like that. And so we’re about 110 people now, probably going to do about 36 million dollars in revenue this year.

Josh Sweeney: Nice.

Incremental Culture Changes

Mike Cottmeyer: And what I find is that … and again, I don’t know if there’s a science to this, but about every 10 or 15 people it feels like the company changes.

Josh Sweeney: Yeah.

Mike Cottmeyer: Because it just gets that much bigger. And so I think it’s kind of like a known thing, around 30 the wheels start to come off a little bit, there’s like an inflection point around 60. I think there’s definitely an inflection point around 100, you know, where you’ve got to be very thoughtful about how you organize people, because what will start to happen is you can create organizational structures that require a lot of coordination between teams, or you can create organizational structures that require people to operate with autonomy.

Expand and Tweak

Mike Cottmeyer: And so, as we’ve grown over the last eight years and expanded our portfolio of companies we’ve worked with, and we just learned a ton of stuff, but we’re constantly tweaking the organization to make sure that we’re not building centralization mechanisms in. Because it’s like that typical thing, it’s like as soon as somebody messes up an expense report you want to put in a policy.

Josh Sweeney: Right.

Is there a policy for that?

Mike Cottmeyer: As soon as somebody abuses the vacation policy, you want to put in a policy. You know, we had a funny thing where we … this was the first time this ever happened, two of our consultants started dating and then ended up getting married.

Josh Sweeney: Wow.

Love Contract

Mike Cottmeyer: So you’re like, “Oh, well how do we handle that as a company?” You know, you’ve got to … it’s like a love contract or something. So there’s like … so what we’re constantly testing for is how do we create structures that maximize empowerment, and minimize centralization, and governance, and control in the process, because we want to treat people like grownups, right, because that’s … because they are, and they should be trusted. But you’ve got to put the structures and such in place in order to be able to make that happen.

Josh Sweeney: Yeah, I know we’ve had other people on the podcast that talked about kind of the policy situation.

Mike Cottmeyer: Yeah.

When to Make a Policy

Josh Sweeney: And creating policies, and I think the best one I heard was if it happens once or twice, then make it part of communication.

Mike Cottmeyer: Yeah.

Josh Sweeney: But after a few times, if it’s really a problem, then look at the policy. Don’t do the inverse of every time one thing happens create a policy or change, because that was the one off, that was the one time it happened in eight years, so-

Mike Cottmeyer: It’s a super hard line, like expense reports are kind of an interesting thing. So we have a rule, like if our consultants are out on site with a client they have to follow the client’s expense policy, that’s pretty cut and dry.

Josh Sweeney: Yeah.

Spending LeadingAgile’s Money

Mike Cottmeyer: But what do you do if it’s a LeadingAgile thing, right? And so generally we say spend the company’s money as if it were your own, make good decisions. But sometimes people don’t know exactly what good decisions are, right?

Josh Sweeney: Right.

Mike Cottmeyer: And so what we kind of tell everybody is we say, “Look, we want you to … we want you to be a grown up, we want you to be treated the right way, and we want you to make good decisions, but that doesn’t mean that we’re not kind of paying attention, and we might not give you a little coaching along the way.” But on my third iteration of like building a finance organization, and so it started off with like a financial advisor kind of guy, and then it was like a controller guy, part-time, and we finally hired a CFO and every time I’ve had a new finance leader in, it’s like, “Well, we need an expense policy.” I’m like, “No, I don’t want an expense policy.” Right, I want to trust people to do the right thing.

Josh Sweeney: Right.

Mike Cottmeyer: But sometimes people don’t, and you just tend to deal with it as one offs.

Intentionally Gray

Josh Sweeney: So not only tell them, “Make the right decisions, spend it like it’s yours, but by the way, here’s what we see that would look like.”

Mike Cottmeyer: Yeah. And it’s like we’ll get on calls, right, and we’ll talk about it sometimes, when we on board people we’ll talk about it, and we’ll say, “Look, it’s intentionally gray. If you’re interested in kind of what the norms are, call our director of finance and she’ll tell you kind of what the norms are. If you’re unclear,” but I just don’t want to put a policy in place, because we’ve got consultants that are on the ground, they’re traveling constantly, they might need to change a flight, or they might need to buy something for the client, or we’ll get in the … we’ll have consultants that like persistently don’t have a projector on the client side. And they’ll be like, “Can we get an overhead projector,” or something, and we’re like, “Sure.” That kind of a thing.

Mike Cottmeyer: And it’s like, is that an asset? Where does it go? We’re a total virtual company, so it’s like that’s super complicated, but if you need it, and it’s getting in the way of doing the engagement, it’s a $600.00 expense, just do it.

Making the Decision without Fear or Reprisal

Josh Sweeney: Yeah, you’ve got to have it.

Mike Cottmeyer: You’ve got to have it, right, and I need them to be able to make that decision in real time without fear or reprisal. And then sometimes, we’ll say, “If you need a new laptop, probably want to call somebody and ask, right?”

Josh Sweeney: Right.

Mike Cottmeyer: You want to buy an iPad, you probably need to call somebody and ask.

Josh Sweeney: Especially if it’s an Apple device.

The Cost of Culture

Mike Cottmeyer: Yeah, but if you’re in the heat of battle and you need to do something for the client, then they have to have the autonomy to do that. And so it’s actually, as we’ve grown, I remember a couple years ago the number, we had $40,000.00 a year in like leaked expenses, and I want to say last year it was over $100,000.00 of leaked expenses. But you think about that, right, so I could be myopic and hire somebody to monitor everybody’s expenses and create a culture where people feel like they’re micromanaged, or I can just go, “Well, maybe $100,000.00 a year is the cost of having a culture where people feel empowered and move fast.

Josh Sweeney: And get it done.

Mike Cottmeyer: And so do I want to spend $50,000.00 hiring an administrator to save $100,000.00 and ruin my culture in the process?

Josh Sweeney: Right.

Mike Cottmeyer: You know, I’d rather just eat the $100,000.00.

Josh Sweeney: Yeah, that’s a great way to look at it.

Mike Cottmeyer: Right, yeah.

Justify the Expense

Josh Sweeney: Yeah. It reminds me, I had a situation once where I was traveling, I was out in Austin, and it was one of the … I think it was like the ninth best restaurant, ninth best sushi restaurant in the country, it’s on some list-

Mike Cottmeyer: Yeah.

Josh Sweeney: And somebody wanted to go out and we definitely spent a good amount of money-

Mike Cottmeyer: Yeah.

Josh Sweeney: And I turned that expense receipts, and they were like, “So Josh, we got your expense receipts, and how can you justify this?” And I just told them like, “I can’t.”

Mike Cottmeyer: Yeah.

Josh Sweeney: “Just cover what you will-“

Mike Cottmeyer: Yeah.

Josh Sweeney: “I got the rest.”

Mike Cottmeyer: Yeah.

Josh Sweeney: Like that was just something that had to be done.

Christmas Gift Expense

Mike Cottmeyer: Yeah, so we have an interesting thing, and this is actually proved to be a really powerful thing for our consultants, we say, “Look, we all know you travel, and you’re away from your family a lot,” so around the holidays we’ll say as kind of like a Christmas present, like, “Take your family out to dinner on the corporate Amex and expense it.”

Josh Sweeney: Yeah.

Mike Cottmeyer: “What’s the limit?”

Mike Cottmeyer: “Don’t have a limit.”

Josh Sweeney: Yeah.

Using Good Judgement

Mike Cottmeyer: Right, “Just use good judgment.” You know, and the average bill’s probably $250.00. We had one guy who spent 1300 last time. And he actually like was surprised that the bill ended up being that much.

Josh Sweeney: Right.

Mike Cottmeyer: And he came to us and said, “Look, I don’t think you guys should have to pay for it,” and I think we ended up splitting it with him or something.

Josh Sweeney: Yeah, yeah.

Mike Cottmeyer: But it’s like again, you know, do you say to your whole team, “Well, you have a $300.00 limit.” Or do you say, “I trust you to be grown ups, and you just spend what you want.” Right, because in the scheme of things, let’s say there’s an outlier or two, and let’s say we had even eaten that 1300, I told my team, I was like, “I would’ve just paid for it.” Right?

Josh Sweeney: Yeah.

Mike Cottmeyer: But they worked it out, so whatever, you know?

Josh Sweeney: I would’ve been looking for him to bring me that 2015 Caymus.

Mike Cottmeyer: Yeah, yeah, yeah, yeah.

Josh Sweeney: Like where’s my bottle?

The Unintended Cost

Mike Cottmeyer: Well yeah, there you go, right. So, but again, at the end of the day, you’re constantly weighing out what’s the unintended cost of treating someone that way?

Josh Sweeney: Yeah.

Mike Cottmeyer: Right, it’s an interesting thing.

Josh Sweeney: Yeah, I love the idea of giving them that as a perk when they travel.

Mike Cottmeyer: Yeah.

Work Motivators from Assessments

Josh Sweeney: Because we talk about it a lot, one of our work motivators on our assessment system is opportunities of travel,

See: Personality Assessments

and what we tell people is like, “Well, there’s ways you can use travel as a motivator.” So there’s bad ways of travel and good ways, the bad way is you send them in and out and they never get to see anything.

Mike Cottmeyer: Yeah.

Josh Sweeney: But the good way is you send them in a little bit earlier, and you pay for an extra meal, or you upgrade their car because it doesn’t cost any extra money because you’ve got so many Hertz points, or Amex points, or whatever.

From Burden to Experience

Josh Sweeney: Like there’s a way to take travel and turn it from this burden where you’re in and out of New York three times and never see anything-

Mike Cottmeyer: Yeah.

Josh Sweeney: To an experience.

Mike Cottmeyer: So it’s probably one-

Josh Sweeney: And then people want to travel.

Mike Cottmeyer: It’s probably one step further with us-

Josh Sweeney: Yeah.

Mike Cottmeyer: We don’t even tell them when to come or when to go, they just go when they need to go and they come home when they need to come home, and yeah, you just teach them … you just … not teach them, that’s not the right word, but you just treat them the right way.

Josh Sweeney: Right.

Flying the Family

Mike Cottmeyer: And we’ve done certain things with people where like the travel becomes like a big burden on their family, and like one guy in particular, we flew his whole family out and rather than do hotels we negotiated with the client to like rent a house in the area, like an apartment or something.

Josh Sweeney: Yeah.

Mike Cottmeyer: And he just lived out there with his family for the duration of the engagement.

Josh Sweeney: AirBnB them, and let them-

Mike Cottmeyer: Yeah, you just try-

Josh Sweeney: Enjoy it.

Mike Cottmeyer: Yeah, you just try to do the right thing, and you just try to help people integrate everything you need to integrate in life, and it tends to work out in the end.

Josh Sweeney: Yeah, and I think it’s also something we would do as entrepreneurs for ourselves, right?

Mike Cottmeyer: Yeah.

Make the Most of the Trip

Josh Sweeney: Like I just went down to south Florida, I was there two days ago, at a speaking engagement, so I was speaking and it’s holidays, Valentine’s Day is actually my wife’s birthday, all in the same week, and I was like, “Well, we’ll both go down and we’ll make this an experience.” So it’s taking the things that you would do for yourself in a lot of ways, and extending it to the employees and treating them the same.

Mike Cottmeyer: Yeah, absolutely, for sure.

Josh Sweeney: Love it.

Mike Cottmeyer: Yeah.

Josh Sweeney: So those are all the amazing things that are happening-

Mike Cottmeyer: Okay, okay.

Josh Sweeney: Going back before LeadingAgile-

Mike Cottmeyer: Yeah.

Josh Sweeney: I like to tell people they don’t name names-

Mike Cottmeyer: Yeah.

Negative Culture Experience

Josh Sweeney: What were some cultures you were a part of that just weren’t right for you, that weren’t good, like what were some experiences you had where you were like, “I definitely don’t want that to be in my company.”

Mike Cottmeyer: Yeah, it’s really funny, I was thinking about that question, and I was thinking about probably like the two worst experiences I ever had, and I never really thought about them as cultural problems, per se, in my head they were associated with specific leaders.

Problems with Leaders

Josh Sweeney: Okay.

Mike Cottmeyer: And … but yeah, it would almost be the opposite of everything we just talked about. So one, I was more in a situation where I was like an employee and we had had … like our leadership had been laid off actually, they were going through a lot of organizational changes, and we were kind of just the layer right below where the heads got chopped. And then this whole new leadership came in, and it was very much like nobody trusted anybody, it was very commanding control, that word’s a little cliché in our industry, but it was very much like everybody felt scrutinized, it created, even from people that I had worked with in the past in a positive way, nobody knew where they stood, so everybody was being very protective of their own personal interests.

And it took an environment that was actually really positive for a long time, it was the longest I had ever had, I think I worked there seven or eight years, and within six months it was just awful. It was just an absolute miserable place to show up and work.

Tenure VS Culture Change

Mike Cottmeyer: And as that employee, I’m sitting there like struggling with like … I have this tenure with this company, I’ve worked here for a long time, I made pretty good money at the time, and like, do I want to quit? Right, like do I want to tough it out, is the leadership going to change again? And I think what happened is it was like … there was just this breakdown of trust within the system, and I guess that’s cultural, but it’s like … for me it was like those leaders really came in and fostered a negative environment that caused everybody to distrust each other, right, it was pretty awful.

Josh Sweeney: Yeah, it’s interesting to hear like organizations that do some major change-

Mike Cottmeyer: Yeah.

Josh Sweeney: High impact change, but don’t think through what the impacts of that are going to be.

Mike Cottmeyer: Yeah.

Change by the Numbers

Josh Sweeney: I almost feel like some of the larger organizations I’ve worked in have made changes where you feel like somebody made that change by the numbers.

Mike Cottmeyer: Yeah.

Josh Sweeney: And just kind of forgot about everything else that was going to fall apart from it.

Mike Cottmeyer: Yeah.

Josh Sweeney: And I’ve probably made those decisions as well, unfortunately.

Mike Cottmeyer: Yeah, well it’s a little bit like what we talked about with the expense reports, right, I could go hire somebody for $50,000.00 to try to chase down $100,000.00 and then all the unintended consequences of that would have been awful, it probably would’ve cost me tons in hidden things.

Josh Sweeney: Yeah, it’d cost you a quarter million in people leaving, and retention, and turnover, and-

Mike Cottmeyer: Yeah, absolutely, right.

Josh Sweeney: They would stop traveling as much or-

Mike Cottmeyer: Yeah.

Josh Sweeney: Push back and-

The Balance of Culture

Mike Cottmeyer: Yeah. So I think cultures are a really interesting balance. We’re an Agile consultancy, and the Agile community’s kind of a big thing, and the Agile community likes to talk about, “We need to change culture,” right, it’s the culture of the organization, it’s a culture of agility, it’s a culture of responsiveness. And what’s fascinating is that so many of these organizations, it’s culture, but that culture’s just anchored by the policies, and the structures, and the technology and everything.

Aligning Culture with Incentives

Mike Cottmeyer: One of the examples I’ve used quite often is the idea of if you want a culture of collaboration, you can’t set up incentives where people have to compete with each other. And you use like the example of the sales guys. You want two sales guys in a region to cooperate with each other, but if they have competing sales incentives, right, they’re not going to work together, right, they’re going to work in their own economic best interests.

Josh Sweeney: Right.

Mike Cottmeyer: And so that mindfulness, continuously, of how do you grow, and scale, and preserve what made you great when you were small, you know? It’s, again, intentionality is the word that comes to mind a lot.

Josh Sweeney: Really focusing on what that impact’s going to be-

Josh Sweeney: And making the right decision.

Josh Sweeney: And in effect, it is in a lot of ways.

Mike Cottmeyer: It is, for sure.

Different Impacts – Different Thinking

Josh Sweeney: I’ve worked in software, and just the word, talking about waterfall versus agile, and software development cycle.

Josh Sweeney: I mean, fundamentally different way of thinking.

Josh Sweeney: Different impacts. The management has to think differently, like-

Josh Sweeney: Everything about it.

Josh Sweeney: And that’s a pretty difficult thing to change.

Mike Cottmeyer: It’s tough, right? And so I think where a lot of people in our industry go a little south with this is they go in with these really hard cultural messages about how leadership needs to change, and think differently, and all the things that you just said, but the reality is is that the systems that enable agility are fundamentally broken. And so, like you go into most organizations and you say, “What’s an agile team?”

SCRUM – But Not Actually

I remember I had this experience about eight years ago where this person was like, “Yeah, I’m on six agile teams.” And I’m like, “What does that even mean?” Right, to be on six agile teams, right? Well they were a QA tester and they were getting spread across, and so they were doing scrum, but because that person was spread across six scrum teams, then they weren’t really part of any one scrum team, and so they were really maintaining their old belief system, and operating in the way they had always operated, but they were calling it scrum.

Mike Cottmeyer: Now, I mean, for anybody who’s familiar with Agile and your audience, it’s like the culture of an agile team is totally predicated on that team being a unit.

Josh Sweeney: Yeah.

Failure Modes

Mike Cottmeyer: And delivering something of value every two weeks, and being accountable for it. And so if I have dependencies, if I have matrix team members, if I have all kinds … there’s all kinds of failure modes in there, and the leadership can have the right mindset, but that mindset has to really directly do a fast follow to behaviors, or structure, governance, right, all that kind of stuff, the things that are going to really unlock it.

Implementing Culture Difficulties

Mike Cottmeyer: And so like what we do as a company is we say, “Okay,” like changing your mind is an interesting thing, right, I imagine there’s like … culture change is like how do you get 6,000 people all on board with the same stuff at the same time to operate as a unit? It’s hard enough to get six people-

Josh Sweeney: Right.

Try a New Way

Mike Cottmeyer: Let alone 6,000, right? But a lot of times you can go in and you can change the teaming strategies, you can change the value creation strategies, you can change the governance strategies, the metrics, right, all that stuff. Now it requires some acquiescence on the leadership to go, “Yeah, I’m willing to try a new way.”

Josh Sweeney: Yeah.

Operating System to Deliver Value

Mike Cottmeyer: And you might argue that that’s culture, right? But once that acquiescence happens, we have to have an operating system in the organization that actually is going to deliver value, right? But what’s cool is that once you get that operating system in place, the culture tends to ignite, and it’s like a fast follow with the rest of the organization. Because now people can breath. Right, they go, “Oh, okay now I know how to operate, now I know how to be successful. I can behave more collaboratively, I can behave in a more adaptive, open minded way, because I know it’s safe.” Right? In the old world, the old structures, it wasn’t safe.

Mike Cottmeyer: And so this relationship between culture, organizational design, organizational policy I think is just huge. I think it’s untapped.

Josh Sweeney: Yeah, it almost unlocks the behavior.

Mike Cottmeyer: Yeah.

Josh Sweeney: Or the potential.

Mike Cottmeyer: Yeah.

Josh Sweeney: And lets them run with it at that point.

Mike Cottmeyer: Yeah, absolutely. Absolutely.

Favorite Part of LeadingAgile’s Culture

Josh Sweeney: Yeah, awesome. So what is your favorite thing about company culture at LeadingAgile?

Mike Cottmeyer: You know, it’s fascinating, it’s exciting, right? Because we’ve gone from … we hit about 65 people about a year ago, and we’re about 110 now, so we’ve almost doubled in the last year.

Josh Sweeney: Yeah.

Mike Cottmeyer: And so maybe what I’ll suggest is some of the things that we’ve done to try to maintain our-

Josh Sweeney: Okay.

Mike Cottmeyer: Company culture-

Josh Sweeney: That’d be great.

Maintaining Through Growth

Mike Cottmeyer: As we’ve gotten bigger. You know, so when we onboard people, one of the things we’ve been doing recently is using Facebook Workplace as a live onboarding mechanism. So we’ve been doing a lot of things where we drop video in, and we do like live events using Zoom streamed into Facebook Workplace, a lot of active collaboration with me and my leadership team, with like new people coming in. And what’s been fascinating about … is that when people join the company, a lot of times they know me, they’ve maybe heard of me in the industry, but then they come to LeadingAgile and it’s like they’re working with somebody who’s like an account lead, or a senior consultant on the ground, and they feel really disconnected. And so allowing us in a distributed company a way to actually plugin with new people, and bring them onboard into our culture in a very systematic way, we’ve been using the word imprinting a lot.

Josh Sweeney: Okay.

Imprinting

Mike Cottmeyer: The power of imprinting in your first month, and making it feel like you actually work in our company, that’s been pretty powerful. A couple of things that we do is that I have a 7:00 call every morning with my leadership team, but at 7:30 we open it up and it’s all hands, anybody who wants to join can join. And so like literally we’ll have 70 or 80 people on a phone call in the morning listening to the leadership team talk about finances, sales pipeline, pretty much anything other than personnel issues, right-

Josh Sweeney: Yeah.

Transparency with Our Numbers

Mike Cottmeyer: We don’t do those publicly, that could be bad, right. But yeah, we’re really transparent with our numbers, we’re transparent with our prospects, when things are stressed out in the system, if they ever get that way, we just talk about it really openly. People talk about like, “Well, are bonuses going to pay?” And I go, “Well, I don’t know, so it’s going to be this, it’s going to be this, it’s going to be this, it’s going to be this.”

And in a consulting business, you’ve got a three to six month cliff, so it’s like people can see the cliff three to six months out and they go, “Is my job going to be guaranteed in nine months?” “I don’t know man, you guys better help me like make sure that these clients don’t terminate early.” Because if you guys do your job, right, then we get to stick around longer and help longer.

Transparency and Honesty

Mike Cottmeyer: And so, that level of transparency and honesty I think engenders that kind of trust, and we’re just an open book, we’ll tell you anything. We went open with like salary bands, so pretty much everybody by title knows roughly what everybody else in the company makes. Just transparency at every level.

Josh Sweeney: Yeah, I’ve talked to a number of entrepreneurs and business owners that went open book-

Mike Cottmeyer: Yeah.

Josh Sweeney: And kind of walked me through the coaching sessions they have to have-

Mike Cottmeyer: Yeah.

Six Month Cliff

Josh Sweeney: Because a lot of people don’t … they don’t understand the financials of the organization. Like you said, the six month cliff-

Mike Cottmeyer: Yeah.

Josh Sweeney: My oldest company was a pure consulting company, and that cliff was always there.

Mike Cottmeyer: Yeah.

Josh Sweeney: And I never thought like, “I want to show these people this number that in six months we could be out of business if things go wrong.” Now statistically, showing eight years of-

Mike Cottmeyer: We’ve been in business eight years, right, yeah.

Josh Sweeney: In business, it’s not happened, but most people don’t tend to understand cash flow-

Mike Cottmeyer: Yeah.

Josh Sweeney: And the impacts of that, so-

Mike Cottmeyer: Yeah.

Financial Coaching

Josh Sweeney: I’ve heard a lot about how much coaching, financial coaching comes into play, and then how it gets parlayed into financial coaching to help them at home.

Mike Cottmeyer: Oh, interesting, okay.

Josh Sweeney: Because they take those concepts and they say, “Well, I’m going to train you on this cash flow,” but it’s just like at home. Like if you spend more than you make-

Mike Cottmeyer: Yeah.

Josh Sweeney: That’s going to be a problem at some point in time.

Mike Cottmeyer: Yeah.

Josh Sweeney: And so here’s how it works for the business, here’s how it works from home, and I’ve even heard of people that their home life got better.

Josh Sweeney: Just kind of an interesting way to educate people on like those open book policies-

Josh Sweeney: And all of the nuance that comes into that.

Mike Cottmeyer: Yeah. I just think it engenders a lot of trust when you’re willing to sit there and say, “Hey, this is the reality of our business.”

Bonus Program

Mike Cottmeyer: Like one of the things, this is the first year we actually put in a bonus program, and one of the things that I did is, that is differently, is we have to accumulate a certain amount of cash, we have to have a certain amount of cash before I’m going to start paying bonuses.

Josh Sweeney: Yeah.

Mike Cottmeyer: And so the whole EBITA, net margin thing is after we’ve built cash. And so people are like, “Are we going to get paid?” And I go, “Well, let me tell you what my priorities are. My priorities are that you guys get your paycheck, first.”

Josh Sweeney: Right.

Paychecks THEN Bonuses

Mike Cottmeyer: “That we build cash and that you’re sure of getting your next couple of paychecks, right. And then once all those things are taken care of we’ll take care of bonuses.” And that’s just reality.

Josh Sweeney: Yeah. Benefits, maxes, matching-

Mike Cottmeyer: Yeah, as a business owner, right, I have to make sure that we’re operational first. I have to take care of the base needs. And one of the coolest things about this journey is that I’ve never missed payroll, right, I’ve never delayed payroll and I’m really proud of that. And it’s not ever going to happen, I’m never going to go to this team and go, “Hey, we have to delay your payroll two weeks.” And so I’m never going to be in a situation where you pay bonuses for the sake of, at the risk of making payroll. And so … and I’m not going to put us through that much risk, and I just tell people about it.

Open Conversations

Mike Cottmeyer: I mean, we get on the phone and talk about like lines of credit with the bank, and what we’re doing there, and how we do funding and literally it’s a leadership team conversation that’s open to 100 people.

Josh Sweeney: Yeah. That’s awesome.

Mike Cottmeyer: Yeah, it’s pretty cool.

Josh Sweeney: I haven’t heard that model yet.

Mike Cottmeyer: Yeah.

Josh Sweeney: Or it’s open up the lines to that many people.

Team of Teams

Mike Cottmeyer: We kind of riffed off of Stanley McChrystal’s Team of Teams,

if you’ve read that, and one of the things that he talks about, when he was leading like … I’m going to get all the names of this stuff wrong, so go read the book if you’re interested, right. But he’s talking about he has like joint chiefs-of-staff or something in like the Iraqi conflicts over there, and they were having a hard time responding to the speed of change that was going on on the ground, and what they did is they did this thing called an O&I meeting, operations and intelligence. And it was basically two parts, it was communicating out and letting people report back up. And so after I read that book I said, “Well, let’s start to do an O&I call for us.”

Open Forum

Mike Cottmeyer: And so I think it’s three days a week, Tuesday through Thursday, we have this open forum. And the first part is the all hands, or the round the room with my leadership team, and then in the other part of the meeting we have … we have three structures within our company, accounts, which is pretty obvious for a consulting company, PODS, which is kind of your permanent leadership structure, and then communities of practice, which are like interest groups within the organization.

Everyone does a Read Out

Mike Cottmeyer: And so what we basically do is we have … we let different people do read outs. And so we’ll do the all hands leadership thing, and then the PODS will do a readout on different days, and then accounts will do a readout and they’ll go through all the financials on the account, and the communities of practice about how they’re advancing the state of the art within our company. We do a monthly retrospective, we do a monthly finance review. And so my CFO gets on and does a dog and pony show about how we’re combining cash, or where the cliff is, or whatever. So yeah.

Josh Sweeney: Yeah, and you’re involving each team member in those updates.

Mike Cottmeyer: Yeah.

Josh Sweeney: So they get that accountability-

Mike Cottmeyer: Yeah.

Responsibility and Ownership

Josh Sweeney: And responsibility, ownership-

Mike Cottmeyer: Yeah, so you get somebody who’s not used to having the floor in front of the entire company, and you give them the opportunity to talk about what they’re doing on the account, and it’s not always the account lead that’s doing the account review, sometimes it’s somebody who’s maybe lower in the stack or not in charge who’s doing the review.

Josh Sweeney: I love it. It’s a great way to get everybody involved and make sure they know what’s happening and why.

Totally Virtual

Mike Cottmeyer: Well I think I mentioned this, but we’re a totally virtual company, and our consultants work all over the US. And so there’s … I mean, you could go three or four months and never come to Atlanta for a meeting.

Josh Sweeney: Yeah.

Mike Cottmeyer: Right, so you can work for my company for six months maybe sometimes, and never see anybody else besides maybe a client, or maybe one other leading Agile person. And so some of these structures, and that’s where I get into the structure and governance kind of a thing, some of this stuff was born out of wanting our people to feel connected to us, and part of us, rather than feeling like they work for the client.

Workplace for Orientation

Josh Sweeney: Yeah, so what are some of the strategies you use to make sure that everybody is part of the culture, part of the team-

Josh Sweeney: When everybody’s 100% remote?

Mike Cottmeyer: Yeah, it’s tough, right. So we talked about the O&I calls-

Josh Sweeney: Right.

Mike Cottmeyer: We do … we onboard them through Workplace, we’re actually going to start using Workplace more heavily.

Josh Sweeney: Okay.

Slack Community

Mike Cottmeyer: With a lot more structured kind of drip education. We have a pretty robust Slack community, where accounts and different communities and PODS interact. We do a lot of like fantasy football leagues, where we’ll fund like … I don’t know if it’s significant, but it’s like maybe like a grand per team, like the winner gets a thousand, and the runner up gets 500, and you don’t have to buy in, and play fantasy football, and that’s created a lot of cross company connections between people who wouldn’t otherwise be connected.

Mike Cottmeyer: We do a similar thing around March Madness for the basketball pools, monthly newsletters. We used to do this a lot more, I haven’t heard much about it lately, but like Fitbit challenges, and things like that. Fitbit challenges got a little weirded out because like you have some guys that are like super on top of it-

Josh Sweeney: Right.

Finding the Right Group

Mike Cottmeyer: And it’s like they just crush everybody every month and so everybody else loses interest, but you know.

Josh Sweeney: You’ve got to put them in like another group, the 100 milers group or whatever it is.

Josh Sweeney: The ultra marathoners or something.

Mike Cottmeyer: Yeah, exactly, right. Yeah, and it’s funny, you’ll see somebody who’s like on the client side for a long time and they have like reasonable steps and then they go on the bench for a month and then they’re killing everybody, right, because they had so much time on their hands.

Josh Sweeney: Got some time.

Looking to the Future

Josh Sweeney: So what do you most look forward to enhancing in the future with your culture?

Mike Cottmeyer: Yeah, I’m actually pretty happy with the way things are right now.

Josh Sweeney: Okay.

Maintaining Culture

Mike Cottmeyer: The challenge is going to be is that we fully expect, we’re probably going to increase by at least 30, 40 people throughout 2019. And so my big challenge is going to be figuring out how to maintain the culture, and as we grow, bringing people into it. And I know I mentioned the Workplace thing a couple times, but the ability to drop video content, have conversations around it, go live into that network, I think is going to be actually pretty key, I think it’s going to be a pretty powerful tool for maintaining that level of connection.

Josh Sweeney: Yeah.

Educational Drip

Mike Cottmeyer: Within the company. And so we’re just experimenting, I don’t know if we’re going to use Slack and that, if that’s going to be just kind of culture education, and this is more client stuff, like I don’t know, we don’t have it quite sorted out. But that will be an interesting challenge, is to figure out how to automate some of the stuff, and to figure out how to make sure that it’s systematically happening, because we’re too big for it to happen by accident anymore. So the level of intentionality. It’s probably worth noting that four years ago I hired a chief cultural officer-

Chief Cultural Officer

Josh Sweeney: Okay.

Mike Cottmeyer: Whose full-time job is to pay attention to this kind of stuff.

Josh Sweeney: Yeah.

Mike Cottmeyer: Yeah. But even that’s interesting because what that meant for her early on is she would do one on ones with all our consultants every month. And that was actually a really interesting benefit, right, because they had somebody who would like to listen, because sometimes people just want to be like, “I’m stressed out, I need to get home, I need to do this,” and they don’t necessarily need to get home, but they just need to talk about getting home to somebody who cares, and will listen.

Josh Sweeney: Yeah.

Needing to Scale

Mike Cottmeyer: And so now it’s an interesting challenge, because now that we’re 70 something consultants handle all our back office staff and everything, she doesn’t have the bandwidth to do that anymore, so what does that look like at scale? Right, and so yeah, it’s just interesting, right, as you get bigger and bigger, the pressure on your system changes, and it evolves, and if you believe in the power of culture and having a healthy culture, you have to keep being attentive to it, because it’s like a lot of things in life, it will … I think it will erode, or go to its lowest common denominator pretty quick.

Josh Sweeney: Yeah.

Mike Cottmeyer: And so it just requires constant attention.

Josh Sweeney: Yeah, and as you turn people, as people leave and come, and all that, all those types of scenarios, it’s going to-

Mike Cottmeyer: Yeah.

Josh Sweeney: Evolve the culture, and-

Hiring and Building

Mike Cottmeyer: Well, I’ll tell you something, it’s been kind of interesting is that for the first six or seven years, I mean, we’re figuring so much stuff out, and just like the talent, level of talent, the caliber of talent, the mindset of the talent, the experience of the talent, and then all of our internal processes, and all of our consulting processes, and what was kind of interesting is that when we were smaller and figuring this stuff out, so we’re hiring and building, and hiring and building, and hiring and building, and you couldn’t really hire people that fit your systems, because it’s like you didn’t know what your systems were, right?

Josh Sweeney: Right.

Working Synergy

Mike Cottmeyer: You didn’t know how that synergy was going to work. And the way it’s kind of worked out is that the people that have stuck around, have been along for the ride, but now the people that are coming in, things are way more stable now, right, so we’re not inventing as much, we’re more evolving things over time, right, so the messages are more consistent. And I think that’s been a big benefit for us too, is watching how some maturity-

Josh Sweeney: Yeah.

Longevity – Per the Bank Criteria

Mike Cottmeyer: Somebody told me early on that banks don’t even believe you’re like a real company until you’ve been in business for 10 years. And I kind of get it.

Josh Sweeney: Right.

Mike Cottmeyer: Now it probably doesn’t apply to some companies, but like it’s probably too us a good seven or eight years to get to a point where I felt like, “Yeah, I think we might have some of this stuff figured out.” So …

Josh Sweeney: Yeah, there’s definitely a lot of iterations that go into that.

Mike Cottmeyer: Absolutely.

Find the Niche, Find the Differentiator

Josh Sweeney: And in the early days you have products that don’t make it in three years, and you start to find little niches-

Mike Cottmeyer: Yeah.

Josh Sweeney: In other things that are differentiators, I mean all kinds of things get flushed out with time, no matter how fast you want to go as an entrepreneur, sometimes it just takes time.

Make the Pivot

Mike Cottmeyer: Yeah, so my CFO is a guy I’ve known since college, so we’ve been friends for like 30 years, and he joined us and he goes, “Mike, the one thing about you is,” he goes, “you try a lot of stuff, and if it’s not working, you don’t stick with it for very long, you’ll change and you’ll pivot.”

Josh Sweeney: Yeah.

Be Willing to Punt

Mike Cottmeyer: And I think you have to, right, because it’s like you get a feel as a leader of a company, like if you try to do something, like there’s organizational uptake, or there’s not, and you’ve got to decide which things like need continuous energy, and which things you just need to just punt on. And if it doesn’t look like it’s working, I am like super willing to punt. And we try a lot of stuff, and we fail at a lot of things, and just experimentation. So you work for a small company, you’ve got to be along for the ride.

Josh Sweeney: Yeah, definitely.

Mike Cottmeyer: You know?

Be Adaptive

Josh Sweeney: I feel like over time you start to learn to hire people that are willing to be in that super adaptive-

Josh Sweeney: Environment.

Josh Sweeney: Because hiring somebody that’s had 10 years at a Fortune 100-

Josh Sweeney: It usually just doesn’t work out in a small environment.

Josh Sweeney: Like we’re changing, we’re iterating, we’re moving quickly.

Josh Sweeney: You know, I know I go to my team and I’ve always done is like, “I have an idea,” and they just roll their eyes. And they’re like, “Yeah, okay, again? Like we just talked about a different one yesterday.” It’s like, “Okay, let me get it through my filter, let me think about it.”

Mike Cottmeyer: What’s the point of having your own company if you’re not going to like come up with ideas to implement and try, right?

Josh Sweeney: Right, exactly, have some fun with it. But yeah-

Intuition

Josh Sweeney: It can’t be overwhelming, it can’t be so many that they can’t get to it, and you have to be able to dump them when they don’t work.

Mike Cottmeyer: Yeah, I had a leader tell me one time, she was like, “You don’t give things enough time before they fail.” And it’s like … and it’s an interesting line, because it’s like if it’s I think we need to iterate on it, I’ll give it years to figure it out. But if it’s like people don’t conceptually understand, or it starts to feel like the wrong thing, or I start to see negative consequences I didn’t anticipate, it’s driving bad behaviors, kill it, it’s done.

Josh Sweeney: Yeah, and I think some of it’s intuition. Like when you’ve done it enough you’re just kind of like, “There’s something about this,” I mean, I know on my speaking engagements that I do, I try to … it’s almost like a comic trying new material, like I’ll throw some stuff out and I’m like, “Man, that just fell flat,” you know, like-

Mike Cottmeyer: That’s why my team laughs at me all the time.

Josh Sweeney: Yeah, sometimes it falls flat, you know? And you’ve got to work on that.

Mike Cottmeyer: Yeah.

Josh Sweeney: And sometimes it’s like okay, I think it worked, but it needs a few iterations.

Mike Cottmeyer: Yeah, very cool.

Josh Sweeney: Yeah, so it’s all about material. Well, thank you so much for being on the podcast.

Mike Cottmeyer: Yeah, thank you for having me, this was a lot of fun.

Josh Sweeney: Yeah, I appreciate it.

Subscribe

Josh Sweeney: Thank you for joining us on the Epic Company Culture Podcast. If you’d like to hear more, go follow us on SoundCloud, Stitcher, iTunes, check out our video on YouTube at Epic Culture. Have a great day.

Announcer: Thank you for tuning in to today’s episode of the Epic Company Culture Podcast with Josh Sweeney. If you enjoyed this content, please subscribe on iTunes, SoundCloud, or Stitcher. For additional content and transcripts, visit EpicCulture.co. If you have questions or topics you would like us to address or expand on, tweet us @EpicCulture1, or email at podcast@epicculture.co.

Podcast Highlights and Resources

Quotables:

  • If you can create the right ecosystem for it, then really healthy, positive cultures emerge. 
  • So what we’re constantly testing for is how do we create structures that maximize empowerment, and minimize centralization, and governance, and control in the process, because we want to treat people like grownups, right, because that’s … because they are, and they should be trusted. 
  • I need them to be able to make that decision in real time without fear or reprisal. 
  • Well, maybe $100,000.00 a year is the cost of having a culture where people feel empowered and move fast. 
  • Culture’s just anchored by the policies, and the structures, and the technology and everything. 
  • If you want a culture of collaboration, you can’t set up incentives where people have to compete with each other.
  •  The power of imprinting in your first month, and making it feel like you actually work in our company, that’s been pretty powerful. 
  • We’re really transparent with our numbers, we’re transparent with our prospects, when things are stressed out in the system, if they ever get that way, we just talk about it really openly.

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WorkPlace

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Workplace combines next-generation technology and easy-to-use features to transform communications, culture and workflows inside organizations of all shapes, sizes and industries. So you can join the evolution.

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