Youth of Character in a Fractured World
David Holmes is Co-Founder and Executive Director of the Character Collaborative, a non-profit that aims to elevate the role of character in college admissions. In this Tugboat Institute® talk from Summit 2021, David explains that research has demonstrated time and again that character, more than performance on a test, is one of the strongest predictors of future success in life.
Living in today’s world, character is often put second, or even third, after attributes such as competitiveness, achievement, etc. David draws on his deep experience as an educator to demonstrate why it is so important that we, as a society, shift our focus back to instilling and valuing character, in both our children and in our employees.
Watch and be inspired to sharpen your focus on character in your Evergreen® company.
Getting Back to Built to Last
Every leader carries a toolbox filled with tools they collect over time. I have been on my leadership journey for some time now and have filled my toolbox with the tools that work best for me. They include Stephen Covey’s Speed of Trust, a focus on communication and organizational effectiveness, the marriage of disciplined decision-making and objective critical thinking, Jim Collins’ Built to Last, and most recently, Tugboat Institute’s® framework of the Evergreen 7Ps®. And through my work with each of these tools, there is one more that I have developed myself, over time. I call it the Six Lanes of Logic.
I joined Schaeffer Manufacturing Company as President with the objective of ensuring that this 183-year-old company was in position to last another 180 years or more. My first step was to assess Schaeffer’s readiness to meet this objective. During my first four months, I embarked on a listening tour, and I assessed that trust throughout the organization was low. There was a lack of clarity of roles and no clear communication. As a result, organizational effectiveness and engagement were low. Employees did their jobs without a clear understanding of the larger purpose of the company and how they fit into it. Schaeffer was not in a ‘Built to Last’ position. Thanks to my toolbox, I had the tools to address these issues, so I set to work.
I used these tools to work several initiatives in parallel: re-establish trust, leaning heavily on The Speed of Trust, clarify roles, and re-open the channels of communication. My focus here is the use of the Six Lanes of Logic.
The Six Lanes of Logic is a tool I have had in my leadership toolbox for 20 years, tweaking it and adapting it as I go. It’s a disciplined process for problem solving and decision making. This tool would enable the work of re-establishing organizational effectiveness at Schaeffer, engaging employees across departments, improving our ability to think creatively, and setting a structure in place that would protect what needs to be preserved for the next 100 years, all while leaving space for innovation and growth. The process gathers a representation of all stakeholders involved in the issue at hand and, as a result, touches every aspect of the organization.
The First Lane is where we assemble a representative group of stakeholders to define and agree on what the problem or objective is, agree on key criteria that any solutions must have, and defend why this must be solved with 3-5 logical reasons. This part seems simple, but I find that most of the time, people walk around with a hammer looking for a nail to hit. In other words, they come into the conversation with a solution and are just looking for a problem to apply it to. So, in this first lane, all stakeholders agree what we are coming together to accomplish and get to the ‘how’ only after that is done. At this stage, importantly, we also identify who has decision rights.
In the Second Lane, the group brainstorms options that could achieve the stated objective, but with no critiquing to assure openness, inclusion, and creativity. We have identified the problem we are trying to solve – how might we fix it? With our team, we collect any ideas people want to share, and because we have a group of stakeholders, we have a variety of perspectives represented.
Once all options are identified, we move into the Third Lane. In this lane, we evaluate the options against the criteria we established in Lane One. We lean heavily on data here, because it’s necessary to making sound, solid decisions. There is no room for opinions in this lane.
In Lane Four, we select a path forward and finalize the decision, again as a group. Lane Five operationalizes the decision with metrics to track results. We build our team, our action plan, and our plan to measure the success of the initiative. We get to work.
Lastly, in Lane Six, we a look back at the results of the initiative and examine the process from start to finish. As a group, we aim to understand what we did well and what could be done better. I find this process is key to enabling a critically thinking organization and helps ensure that we learn and improve our processes as we go.
When I first present the Six Lanes of Logic to people, they think it will slow us down. In the early stages, it is indeed slower than processes they have used in the past. But like the Speed of Trust, taking the time to walk through the process carefully from the beginning to the end contributes to improved effectiveness overall. We are less likely to leave gaps in our process, we are more likely to imagine potential problems before they arise, and, best of all, because the process is so collaborative, we engage all stakeholders. When people are contributing ideas to solutions, they have a stake in the outcome and are much more engaged. Every aspect of the process is better.
My philosophy and belief are that organizational structure is the key to building a long-lasting Evergreen® company and the Six Lanes of Logic have helped us set a solid and enduring structure. The discipline behind my tactics at Schaeffer is something the stakeholders have had to work to learn, but now it is becoming automatic. Schaeffer is experiencing a significant increase in trust, it has rediscovered its clarity of purpose, and it is experiencing empowerment across the organization through critical thinking. It is no longer just my initiative; our whole team is now engaged and committed to ensuring that Schaeffer Manufacturing Company is Built to Last for at least another 180 years.
What 100 Sixth Graders Taught Me About Leadership
Before becoming the 3rd generation President of Ramar Foods, Susie Quesada taught sixth grade. In this Tugboat Institute® talk, Susie reflects on her leadership style and connects lessons from teaching to her work as President of an Evergreen® company. Her focus on listening, educating, team-building, and creating effective processes for growth and development all have roots in her experience in the classroom.
Susie’s lessons from teaching pair nicely with learning from more traditional business models and thought leaders, including Stephen Covey, LEAN, and Kaizen. Together, Susie’s experiences in leadership in the classroom and at Ramar Foods shaped her leadership philosophy and keep her company growing, thriving, and learning.
How Old-School Apprenticeship is Shaping Our Future
As an Evergreen® Company, we cherish our independence, our flexibility, and our autonomy. It might, therefore, seem obvious that a partnership with such a structured and bureaucratic organization as a trade union is something we would take great pains to avoid. In fact, the opposite is true.
Chula Vista Electric started in 1925. Like many successful 97 year old companies, we have learned how to react to our environment and adapt as we grow. CVE started as an appliance retail store. As people bought appliances, they needed electricity in their homes to power these devices; this spawned our electrical division, which has been the company’s focus ever since.
In 1945, the need for trained electrical workers was growing in San Diego and so, along with others in our industry group, we started running apprenticeship classes. In 1976, we formalized a partnership with the union; The San Diego Electrical Industry Training Trust was created with equal representation from management (the company owners or NECA) and labor (the union or IBEW). Today, the trust governs our apprenticeship program, which is recognized by the State of California and sponsored by Palomar College. This allows all of our students to not only learn a trade but also to earn college credit towards their Associate of Arts Degree.
Our program has grown and thrived over the years, providing apprentices for 56 electrical contractors in San Diego and Imperial County and has approximately 600 students participating. It’s a unique collaboration. The contractors, who are signatories to the collective bargaining agreement, fund the program. Through the collective bargaining process, we have agreed that for every hour that one of our employees works, 87 cents is invested in a training fund. With this funding, we have been able to build a high-quality, comprehensive program that none of us would have been able to create on our own.
To be accepted into the program, applicants must have a high school diploma or a GED, a year of algebra, and they must take a few basic aptitude tests. If they meet these basic criteria, we invite them to interview. Our program has become so popular that we average 300 applications for every 30 positions available.
Once in the program, apprentices spend five years attending classes two nights a week and working one-year rotations at four or five different companies. There are large shops, small shops, some that do high rises, some that do underground—all the different facets of electrical. Spending time at a variety of companies gives apprentices a deeper and more thorough understanding of the industry. Ultimately, the idea is that they get the theory and science at school, and then practice the hands-on by day out in the field. One of the best parts and a piece of what makes this so valuable is that their school is tuition-free. We call it “Earn While You Learn.”
The impetus for this apprenticeship program has not changed much from what made it so powerful and unique in the early days. Contractors need electricians. We need them to be trained well, uniformly, and thoroughly. It is in the interest of the customers, apprentices, and contractors alike to ensure that we are producing a pool of highly qualified electricians.
It’s a win for our apprentices too. The jobs we create are great middle-class, upper middle-class jobs, with pensions and health care. I'm able to offer not just a job, but a career. We have several people who have been with our company for 25 to 30 years. They are not just employees, but friends.
The risk, of course, is that we put effort, money, and time into training these apprentices, and then, at the end, there is no guarantee we won’t lose them to a competitor. But this is where being an Evergreen company plays to our advantage; we believe we treat our people better than the competition, so we have had great success in recruiting and retaining employees. In addition, we like to promote from within, so the growth doesn’t stop after the apprenticeship is over. Regardless, contributing to something that ensures we will have a deep pool of qualified, talented electricians is easily worth the risk of losing a few people here and there.
Amid the Great Resignation, the value of this program has come into sharper focus than ever. This is an excellent vehicle for developing the talent pool we need to keep growing and thriving. And it just so happens that we've had it up and running successfully for decades, so we're in better shape than most firms today.
My father started his apprenticeship in 1965 and would go on to become sole owner of Chula Vista Electric. A decade ago, he passed the reins on to me—a move that wouldn’t have been possible without my graduation from this same apprenticeship program in 1989.
My role with the apprenticeship program is deeper than most. I’ve been an apprentice, an instructor, and I currently serve as the committee chair overseeing the program. I look back and think that I was very lucky—being accepted to the program myself and getting to do what I love. So much that I encouraged my son-in-law to get involved. He's been through the program and he's now a foreman for my company. My youngest son is currently a fourth-year apprentice for one of my competitors. It’s that rotation part of the program, to make sure he gets a well-rounded training experience–I'll get him back, too. I attribute everything that I have to this program, and everything at our business is built around it. Now, I'm trying to pass down my passion for this unique partnership to the next generation in our company and within our industry group more broadly.
Why We Plant Trees in Africa
Lester Thornhill, President & CEO of Life’s Abundance, wanted to find a path to carbon neutrality for his Evergreen® company. Uninspired by the options he found nearby, he looked farther afield and settled on a program called Trees for the Future. This organization plants trees. All over the world. Lester has invested in a project that is creating Forest Gardens in Senegal, Africa. The project not only captures an enormous amount of carbon each year, but also supports the local community in important and significant ways.
Watch and learn more about this initiative and about Forest Gardens.
People First Drives Pragmatic Innovation
When you have employees working on oil production platforms and you are committed to People First, every person in your company must be serious about safety.
People First came naturally to Danos when my grandfather and his brother-in-law started the company in 1947; the initial team was almost all family members. By the time the company got big enough to hire from the outside, the culture of care and connection was firmly set. As an Evergreen® company, People First defines and drives everything we do today. It’s in our DNA.
We are in a high-risk industry: operating and maintaining oil platforms, many of which are over 100 miles offshore. We have 2,500 employees today, working across Texas, the Gulf of Mexico, and other remote parts of the country. We attribute much of our success – on the safety front and elsewhere – to the way we lead from a culture and values standpoint. We do this while tapping into our team’s insights, creativity, and ideas and encouraging experimentation with new technologies to bolster safety through Pragmatic Innovation.
Although our early innovations were not technological, they did have a notable impact on safety. The first one that comes to mind happened in the early 1950s. During that time, crew members boarded boats using ladders attached to a vessel's exterior, which was very dangerous. So, we designed and built a tugboat with an innovative safety feature – an interior ladder that brought workers from the pilothouse to the galley and the engine room without going outside.
In the early 2000s, we began hosting Safety Focus forums. These intensive, one-day safety events happen throughout the year in key locations where our employees live and work. The day kicks off with a few safety presentations from management to set the tone, but the event mostly focuses on group work, breakout sessions, and time together. The format allows our employees to experience our culture of collaboration through open and honest communication and relationship building. We teach at these forums, but more importantly, we listen. From experience, we know we can learn as much from our employees on the ground about where we can improve on safety as they can learn from us.
One of our first true technological innovations came years ago as an improvement to something that existed already in our industry called Behavioral Based Safety (BBS). We track near misses–incidents where small changes in conditions could have caused injuries. For example, a common interaction with equipment might result in a brush burn, but the incident makes us realize that the potential for serious harm is there, so we enact changes to the way our people interact with that equipment. Although this practice is standard across the industry, it has always been inefficient and slow. So, we decided to start collecting feedback on forms that we could read with a scantron (a technology innovation at that time) to process more information faster.
More recently, with smartphones, we figured out a way to use a simple app to collect and share the data in real-time, which we use today. All near misses are recorded on the app and reported company-wide immediately; notifications pop up on everyone’s phones. We didn’t invent BBS, but as far as I know, we were the first ones to use an app to create instant push notifications. These experiences with the Safety Focus forums and the app reinforced for our leadership team the importance of involving the entire team in Pragmatic Innovation.
In 2015, we decided to try something new by opening an innovation lab in Louisiana. We bought a drone, virtual reality (VR) goggles, and a 3D printer. We invited employees to explore the new tech tools. No one was sure what we were after at first, but eventually, our team came to understand that this lab was about unleashing their creativity. Their ideas started emerging.
As we began understanding the potential for tapping into our team’s creativity, our IT department took the initiative to help us innovate in safety. They developed a whole new platform to capture, organize, and analyze our safety-related data – near misses, serious accidents, and proactive efforts to prevent incidents. As a result, we ended up with a unique, fit-for-purpose platform that has significantly improved accountability, helps identify risks, and generates risk mitigation actions that keep our team even safer.
More recently, we’ve been working on an exciting technology-enabled safety innovation that leverages VR. We built a virtual oil platform – just like the ones we service and maintain — for employee competency testing and training. So instead of having an experienced trainer and new employee meet at a shore-based heliport, fly out to an oil platform in the middle of the ocean, and verify the new employee’s competency on-site, we can do all of this in our virtual oil platform. It’s much safer and has the added benefit of allowing us to test and train every employee on a much wider variety of equipment and different platforms.
We have taken this program even further by creating animation that allows users to “peel back the layers” of the equipment and see inside to better understand the components and how they function. I did this virtual “peeling of equipment” myself, and it helped me understand the processes we manage in ways I never had before. This innovation has made the training experience for new and returning employees much safer. And it all started with placing a few VR goggles in our innovation lab and creativity being unleashed.
If you are committed to being People First, as we are at Danos, safety is a value. We are proud of the success we’ve had on this front. Our OSHA rate, or rate of accidents per 200,000 employee hours, is among the lowest in the industry. We attribute this success to our 75-year history of People First values and strong culture, enabled by our safety programs and Pragmatic Innovation. When you take care of your people and tap into their energy, ideas, and creativity, things can take off in exciting and unexpected directions. For us, it was safety first. We’ll see what’s next.
Battle for Growth
In this talk from Tugboat Institute® Summit 2021, David Eichhorn, CEO of NISA Investment Advisors, examines the Paradox of Growth in business. As successful businesses mature, they grow, but at a certain point, the growth leads to a size which breeds complexity and then complexity kills growth. How can a CEO or Founder break this cycle?
David has spent considerable time and energy examining this paradox as it relates to his Evergreen® company. As a leader, he has found success in resolving it by implementing the Bain Micro-battles System®. He has managed to meet his goals for growth and reap the benefits of size without being derailed by growth-inflicted pain points that emerge as the organization becomes more complex.
Listen and learn how to make the size of your business an asset in innovation—not an anchor.
Tugboat Institute Gathering of Teams 2022
It took both perseverance and a dedication to purpose to make the 2022 Tugboat Institute® Gathering of Teams possible, but last week we managed to pull it off, and it was outstanding.
At this hybrid event, over 60 people virtually joined the 300 in-person attendees. Between challenges presented by the lingering Omicron surge and supply chain issues that threatened to delay the delivery of materials, we had our work cut out for us, but the dedication and extraordinary care of our entire Tugboat community overcame it all. We are so proud of the efforts of all attendees, and of the fact that our event was such a safe and joyous one. For two and a half days, our members and their teams shared learning, ideas, experiences, and fun and emerged inspired to pursue their Evergreen® goals with renewed passion and energy.
Throughout the event, which was comprised of a mix of TED style talks and smaller, group workshops, we structured our learning around the framework of the Evergreen 7Ps® principles.
After an evening of exploring mini-games and the philosophies behind the Great Game of Business with Steve Baker, Dave Whorton opened the series of TED style talks with a reflection on Purpose. Dave’s talk built on the conversations about Purpose from our visits to Edward Jones and Clase Azul last fall, as well as Hubert Joly’s book The Heart of Business about the improbable, and very Evergreen value-aligned, turnaround of BestBuy.
Borrowing from data shared at Edward Jones, Dave showed the powerful cultural trend of employees working for and customers buying from, referring to, and protecting companies with an authentic Purpose. He spoke to why he believes non-Evergreen companies--whether public, venture-backed, or private equity owned—might state an explicit, noble purpose, but in practice cannot truly be driven by Purpose due a number of dynamics, including their ownership’s expectations of high returns when push-comes-to-shove. His belief is that authentic Purpose can only be protected and honored through all seasons and over decades in a company that remains forever Private with aligned, concentrated ownership.
Dave used his presentation to unveil our new definition of Purpose, grounded in our collective learning as a community over the past eight years: Having a compelling reason for existing--a north star above all else.
Having set the stage for the learning for the rest of the week, Dave introduced five more TED style talks that further expounded on the power and importance of high performance teams, Pragmatic Innovation, leadership lessons, communication strategies, and the Evergreen 7Ps principles.
First, Bryan Papé shared his powerful personal journey founding and scaling MiiR, a company driven by Purpose and undeniable proof that a great consumer products company can be built and scaled without venture capital. Kristi Tacony Humes, 3rd generation CEO of Tacony Corporation, spoke to the importance of continually asking why and seeking ways to continuously improve oneself and one’s company. Rorke Denver, a former US Navy SEAL commander and acclaimed author, actor, and leader shared wisdom on the dynamics and qualities of high-performance teams. Rich Ledbetter, CEO of Guarantee Electrical, shared Simple Tools for leadership and business success gleaned from a variety of thought-leaders throughout his career. And finally, David Bradford, Lecturer Emeritus at Stanford’s School of Business, encouraged us to be more honest than we might have thought possible with our teams, families, and all important relationships.
The afternoon and the morning of the next day were dedicated to workshops that brought together peers from across many different industries. The conversations were rich and offered insight and ideas that energized and inspired the participants. The enthusiasm and energy of the groups, fueled by new connections and the opportunity to share and brainstorm together, were palpable.
One evening, the group headed to the River Ranch Stockyards for a night of festivities. The venue, which included a paddock of long horn steers, cowboys swinging lassos, and burros offering refreshments in their saddle baskets, was the perfect place to enjoy new friendships, reconnect with old friends, and make some memories.
The two and a half days were full, busy, and inspiring. As is the case every time Evergreen company leaders come together, the energy and joy that fuel our unique Evergreen paths exceeded our hopes and expectations. There is no doubt that our movement and our collective commitment to the Evergreen 7Ps principles are steadily gaining momentum, and that our trusted community is profoundly important to our members and their teams.
Teach Them How to Say Goodbye: Navigating a Graceful CEO Transfer Steve Shifman
Johnny Bench played for the Cincinnati Reds for 17 years. He was a hero to his fans and a star of the game. In his last game before he retired, in 1983, he hit a home run. He was at the top of his game. Steve Shifman is a Reds fan and the former CEO and current Executive Chairman of the Board of Michelman. He learned a lot from Johnny Bench. As he felt the end of his career as CEO coming onto the horizon, he took a page from Johnny’s book – go out on top.
In this Tugboat Institute® talk, Steve shares his experience and his advice around stepping into a CEO transition with grace, with hope, and with a solid plan. He identifies the key factors that will ensure it is as smooth as possible. As he plans to hand over the reins of his Evergreen® company, he feels that he has set the stage for a successful transition and is excited for his next chapter.
Watch and be inspired to make a succession plan for your Evergreen company.
Teaching Leadership Skills for Success at Work and in Life
At Ayers, an Evergreen® company, an unskilled laborer with minimal education and no management skills can advance, in less than five years, to managing and leading a production team.
There are two critical ingredients for this kind of rapid progress: an eagerness and a willingness to learn, and a grounding in the values of our purpose-driven company. We can’t teach the former, but we can teach the latter, and we do.
In 2019, my son Zack, who is currently our VP of Operations, had just completed a masters-level course in Entrepreneurship and we were looking for ways to handle the pressures of constant hiring and training for our very niche market as we scaled the company. Zack’s experience in the program gave us cause to discuss the leadership lessons he had been studying, and to be reminded how much good leadership is actually grounded in simple skills and old-fashioned values. We came up with the idea of creating a course at Ayers to teach employees these basic life and work skills.
I am a fan of Patrick Lencioni’s The Ideal Team Player, and knew that if we could get people who were “hungry, humble, and smart,” we could tap their potential and help them, and us, create our next line of supervisors and even managers.
With Zack as my partner, we created our Leadership Immersion program. The first course was 13 weeks long, and the homework before the first class was to read Lencioni’s book and do some reflective writing on Ayers’ values and purpose. My son and I taught it ourselves, and we had our whole management team go through it with the first cohort. The lessons were focused on leadership and life skills that not only make employees better leaders, but also better people.
Our curriculum is about professionalism and instilling values and habits which underpin effective leadership. We ask that students come dressed professionally and most wear a coat and tie. Lessons include basics such as time management, success principles, and being a solid team player. But they also include how to run a small team, how to be a good neighbor or spouse, how to budget, and how to be better with money.
Each week, there is homework, reflection, and preparation to do. Joining the program is a significant undertaking and this fact alone helps cultivate a sense of responsibility and dedication to quality that are core values of both Ayers and effective leadership in general. It encourages participants to see themselves in a new light, and to aspire to something greater.
Each session, we admit eight people. We’ve found that a small group allows for more meaningful group discussions, which make up about 50% of the class time. And it doesn’t take too many people out of their usual jobs and leave us overly shorthanded. In terms of who gets into the program, we target junior leaders, most without any education beyond high school, who have been with us for about a year. It feels important to have time to get to know them as human beings, and once we have identified the people with the willingness, ambition, and disposition to grow, we invite them into the course.
For the length of the course, which has grown to 17 weeks, they spend every Friday, from 9am to 3:30pm, in class. Why 17 weeks? The objective of this course is to transform the students into more effective employees and people, and conventional wisdom tells us it takes 17 weeks to create a new habit!
At the end of each course, we host a celebration, and this is the greatest joy for me. Everybody brings their spouse or significant other and we share the growth that has resulted from the course. Typically, not only do course members share how they’ve changed internally as people, but also their families share how much their lives have changed at home. It’s quite profound and can be life changing. Although we are clear that joining the program does not guarantee a promotion, many of them will end up being promoted.
Creating this course has meant a big investment. It’s expensive; after people and the benefits program, it’s our biggest expense. But it’s paying off in spades. Especially in today’s tight labor market, investing in our people has never proven more worthwhile. We know our employees who have been through this program are skilled, aligned with our purpose and values, and exceptional team players. It’s one of the best investments we’ve ever made.
Zack still runs the program, but increasingly, the classes are taught by members of the management team who went through the course in its first cycle. Zach now sits in the back and observes, which I love because that’s a sign it’s working. We are producing leaders who produce leaders.
It’s been so successful in fact, that we’ve just announced a new initiative that is an extension of the Leadership Immersion program. In February 2023, we will launch our first Leadership Immersion Master class for employees ready to look to the next level of leadership within the company.
For anyone thinking about offering a program like this, I think there are two important things to keep in mind. First, there has to be a multiple-year commitment. It takes time to dial in a program that’s a fit for your team. Secondly, as a leadership training program, the buy-in has to start right from the top. Even now, I still attend the class for the first 30 minutes every week, share a story, and draw a connection to the content of the lesson for the day. With this level of commitment, there is no limit to how high that laborer-turned-manager might climb.