166 Building Corporate Soul to Power Culture and Success with Ralf Specht | Partnering Leadership Global Thought Leader

Mahan Tavakoli: 

Welcome to Partnering Leadership. I'm really excited this week to be welcoming Ralf Specht. Ralf is a visionary business leader and creator of the Soul System. A framework that aligns value, creating employee action with broader corporate strategy through shared understanding and shared purpose. He is also the author of Building Corporate Soul: Powering Culture & Success with the Soul System.

I really enjoy the conversation with Ralf most especially because as a leader, he has been able to build soul in organizations. And now through frameworks and stories, sharing how we can do that in our organizations too. 

I also enjoy hearing from you, keep your comments coming: mahan@mahantavakoli.com. There's a microphone icon on partneringleadership.com. Really enjoy those voice messages. Don't forget to follow the podcast. Tuesday conversations with magnificent change-makers from the greater Washington DC DMV region and Thursday conversations with brilliant global thought leaders.

Now here's my conversation with Ralf Specht.

Mahan Tavakoli: 

Ralf Specht, welcome to Partnering Leadership. I am thrilled to have you in this conversation with me. 

Ralf Specht: 

It's my pleasure to be with you today. 

Mahan Tavakoli: 

Ralf, your book, Building Corporate Soul, talks about organizations having a soul. But before we get to it, would love to know whereabouts you grew up and how your upbringing impacted the kind of person you've become.

Ralf Specht: 

So I grew up in a small town the Northern part of Germany, near a place called Gütersloh. In Europe, there's an interesting sentiment that we didn't have for decades because there's a wall pretty close to us.

And I grew up in a place near that town of Gütersloh where there was a Royal air force base. Because at that time, Germany was still with the Americans and the French and British, and obviously in Germany with the Soviet Union. And and that's now, more than 30 years ago since unification, but when I was a kid, those jet fighters from the UK were always there because the base was just a few months away and in my upbringing I didn't have that much to do with the army in my life, but my father was a civil engineer.

In the town hall of a small city we were living and he took care as his second job on a city partnership between city that I was living in and a French city. And so I spent a lot of time in my youth, probably six, eight weeks every year in France in that little city where we had partners with and spend time with French families.

And I think that time made me a person that looks very easily with lots of interests into other cultures and other countries. And my French, at that time, was much better than my English, which right now it takes a week when I get into France to get into the rhythm.

But my business life I spent a lot of time in countries around the world globally. And I guess it's because of that time in France where I had a lovely interaction with some different cultures, which I appreciated quite a lot, and I think it was something that stuck with me since then.

Mahan Tavakoli: 

That ability Ralf to connect with other cultures is really important, not just on a global scale but also on a human scale which is important for leaders as they're leading their organization and the many cultures within their organization.

So what got you to thinking that corporations and organizations should have a soul Ralf?

Ralf Specht: 

When I stepped down as CEO of Spark 44, I received, as you would expect, lots of messages and WhatsApps and text messages and emails from people inside the organization and so did I. But the messages were different than I was expecting what would come because what you would expect is the message like we had a great time remember what we did here and all of these things. The messages I received were at a much deeper level, I would say, because people reflected on their time inside spark 44. Occasions where they had interactions with me that they still remembered even 6, 7, 8 years later because for them, they were pivotal in their career.

And one sentiment that came through a lot of messages was I have accomplished things that I never thought I was capable of. And these messages, when I was contemplating about them over Christmas that year, I was like, they are just too important to just stay on my iPhone. And I thought there's a bigger message here.

And outside, as when they look at Spark 44, I said well, successful agency. They grew from zero to 1200 people in just a few years and 18 countries and global and, won an award for this and that and the other, and all of these things. And they're all true, there's nothing wrong, but the legacy isn't that I think the legacy is spark 44 was a company with a soul and a very unique culture.

And my co-founders and myself who helped to create an environment where that could flourish and we've hired a lot of right people to help build it grow it and scale it. I think every company has a country. You can't have a company without a culture, but only if you've got soul.

Mahan Tavakoli: 

So Ralf, I wonder, were you intentional in creating that soul that resulted in what the employees that messaged you had noticed than how it had impacted them. Or was it that the way you led ended up in the organization having a soul?

Ralf Specht: 

I think it's the former. I think when we started back in 2011, sometime in February, we got the green light. So that the five of us had to set up an agency global agency in Los Angeles, in Shanghai, in Frankfurt, and in London until the 1st of June. So not a lot of time. And, I still remember that day because when we received the green light, we went to London, the five of us. Spend the day in a conference room in a befriended agency with lots of flip charts. And we were trying to figure out how do we know really do it? 

And we talked about culture and then we started okay, what kind of culture do we want to have in this place? And it was a bit difficult put that into words. And then we flipped the question and asked ourselves, what culture do we not want to have in this place?

And that kicked it off big time. And so within, I think, 15 minutes, the flip charts were full. And when we the points on those flip charts, it became very clear what we had to do in terms of organizational design, to allow that culture to happen. A single P and L was a big reason. we had a big constraint, obviously.

I mean, normally it start up, doesn't start with 80 people. We started with 80 people. It's a lot, but those 80 people were four times 20 people because they were an LA Frankfurt, London and Shanghai. Resource was always a challenge. So we said let's hire complementary skills in the four locations so that we got all the skills we need, but we don't have every skill everywhere, which created a sense of collaboration between the four offices. That was second to none. 

And remember, this was 2011 and there was no zoom those days. We used GoToMeeting that already existed, but it felt too many people that were joining. It felt they entered an agency on mosque because they never, we had never been on a WebEx, GoToMeetings, Zoom, whatever you call it today.

And even FaceTime was kind of, oh yeah. If you can use that in business too. Okay. All these things happened, at that time. And I think that was intentional, the tons the culture. And then I think we went a lot of good decisions in terms of hiring the right people.

You always also make bad decisions in this area. But we had, I think a great team, and that team grew and grew and grew and grew, and the culture was growing with it, and I think that was the biggest achievement.

Mahan Tavakoli: 

And one of the main points Ralf, I consistently make is that every organization, as you also alluded to, has a culture. The best have an intentional culture. So as you were putting together the plans for the organization, you decided how intentional you wanted to be with respect to the culture and a great way of doing that is how you did it.

You looked at what you didn't want to be part of that culture, and that helped you make this intentional culture for the organization. I wonder from your perspective, in what way would moving the culture of an existing entity be different from establishing the culture of a new entity as you were doing then?

Ralf Specht: 

As we grew, there were two phases, right? The first three years we grew from 80 people to 270 people. Then we grew from 270 people to 650 people within three months. Okay? You can imagine what happened. And at that stage, there will be lots of new offices. And there was some of us that were just growing in size extremely. 

And as we were doing that, we were basically bringing in full, complete teams from other agencies that were embedded into our culture. And it was a huge challenge. And it didn't always work out. I mean, there's only so much you can do, leadership can create an environment where these things happen. But if it's too many people in too short of time, it is a challenge. 

So coming back to your question that you have an existing organization it's a tough gig. Because what you need to achieve, and that's where the framework that's in the book I think comes in, you need to achieve a situation where everybody is clear about what the company really is about. Where it wants to go. How it wants to get there. And how that journey manifests itself in many different things.

So for instance, when we grew, one of the things that helped significantly were lots of events that took place that were kind of coded, right? Lots of great people and many of them took the initiative management gave them the space to do it. To develop initiatives that were critical to the culture as we were growing.

So for instance, million-dollar colleague in LA created Spark-a-Palooza. So for everyone in the US, the Palooza element is something that's easily to understand for everybody outside the US, Palooza, what are you talking about? And so we didn't have this idea of a week of inspiration and outside speakers coming in and pro bono projects and a bit of party that have fun and all of these things. It was great. 

We all thought this is a real great initiative. So we said, Spark-a-Palooza can also happen in Tokyo and it can happen in Dubai. And we have the Mumbai office and the Dubai office come together. Do that and have it London and Franklin everywhere. And for, it's not a two colleagues Gonzalo from Madrid or Latisha from Sao Paolo because they were like Spanish and Portuguese countries had a lot of things that they had to do together.

Anyway, they came up with the idea why don't we create something where a colleague from one office spends a month or two in the other office and the two people just swap jobs? And they called the Spark-BNB. And the first two people who moved to Sao Paulo-Madrid and Madrid-Sao Paulo, we just merchandise that like nothing else, internally.

And guess what? People from offices connected with other offices, because they wanted to work together. Or wanting to change jobs and swap jobs. And can I spend a month in Sydney? Everybody wants to spend a month in Sydney, difficult to get anybody out of Sydney. 

But these kinds of things, you've got when these have three choices. Your first choice is, are you endorsing that as management do you let that happen? Because very often people say no, no, no, we don't have a budget for that. And budget was the least of the problem in this, because it was like a $500 flight. That's kind of manageable, 

But the second choice is are you getting serious about it? And are you getting conscious about it? Do you drive consciousness about the initiative? Is it just one person from that office and another person just swapped jobs and you don't tell anybody about it and it just happens.

You can do that, but then it doesn't help the culture. It's a good industry for these two, but that's it. You have to code it. That's why we called it Spark-BNB. We merchandise it internally and created a life on its own, which was critical to the culture because one of the things that we were always about from the very first day in this flip chart conference room in London, 2011, it was about creating a globally aligned team in an inspired community across the world. 

Mahan Tavakoli: 

The point that you make Ralf in that part of culture is establishing practices, but as important, if not the more important part of that culture is the communication internally that comes afterwards. Whether you are a marketing and advertising agency, or even smaller organizations in any industry, retelling those stories so people understand what the organization values is as big a part of making sure that culture permeates the organization. 

Then it is just having the specific initiatives. Now, so you did all of that running the organization and afterwards with all the comments that you got from the team members, you realized I need to capture this thing into the organizational soul. And you came out with the Soul Index. What is the soul index Ralf before we break down the different parts of the soul system?

Ralf Specht: 

So when I wrote the book. You talked to a lot of people, you interview a lot of people you research, and are constantly looking for case studies that make sense, but in this context and as I was doing that over six, seven months, I think a huge pile of surveys and rankings and all of these things. And as I was working through them my way through them same names, same companies popped up again and again and again. And so as I finished writing the book, I was like, okay, now why don't I start playing with the numbers a little bit? Because the book makes the point that when you're evaluating corporate culture, the people who should never ask are the CEOs. The people use it, ask other people on the ground.

I got an email a few weeks back from a CEO who said, I like your idea of Soul. That's great. And we also got a company who sold my response to him was, congratulations. I'm so happy for you, but I would actually like to hear it from your people. And then I'm going to hug you.

What I basically did was I looked into various studies about employee satisfaction, and employee engagement, and CEO approval, and gave them a significant weight in this index over business success and brand success. And I was surprised. I thought that this would be good, but I didn't believe until I saw it how good it was because the top 20 companies are, the next is led by Adobe ahead of Salesforce and Microsoft.

So three tech companies, interestingly but the mix is wide. So you've got companies that have been around for more a century like Deloit consultancy or American Express. And the youngest company in the index is Workday, which is 2005, if I'm not mistaken. So you get all sorts of companies got Hilton hotels.

You got LinkedIn in there. So all categories and weighting of employee satisfaction, engagement, CEO approval is what drives success in that rank. As the ranking was complete, I asked the friend and bank, whether they could run a portfolio check on this look at how it did.

And there were many tech companies in the index, so it had to be good because obviously the last years were great for tech companies but it actually on a five-year basis even hit MasTec by some 20%. So, It's quite something. So the idea of looking and listening to employees and obviously kind of makes sense. Doesn't it? 

I mean, These other people that are closest to what is happening inside a company much earlier and much faster than any one of us what's happening somewhere.

Mahan Tavakoli: 

It's a relevant and important point Ralf. So what is this sole system? What is an organization that has soul? And how does it differ from purpose? We hear a lot about the need for organization staff purpose. What is soul and how does it differ from purpose?

Ralf Specht: 

Purpose has been the buzz word for the last 10, 15 years. And I just came across a post on LinkedIn, which was about the purpose washing, top 10. And I just, I couldn't resist. I had to print it out. And so that was purpose washing top 10 before I answer your question, is number one, your marketing department is running branding on purpose workshop to jazz up your purpose statements. 

Two, you force your top managers to participate in a two day private purpose retreat to spell out that guts in public. 

Three, you just hired McKinsey to desk of your codes of conduct. 

Four, your employee to totally diverse Gen Z chief purpose officer who will fix the purpose issue.

Five, you just edit your light to the other 30,000 on one of Simon Sinek's LinkedIn posts suggesting that why is everything? 

So I think five is enough. All right. 

So I think purpose is important. Absolutely. But I think that's kind of where the purpose washing comes in. Purpose is a means to an end, it's not the end.

And very often you look at these purpose discussions and it feels like it's the end and it isn't. So, the Soul System is a framework for companies to organize themselves in a way to consciously look at that culture. And it starts with purpose. 

But the purpose that I'm talking about is what I call a shared purpose because you've seen it a hundred times, right?

You've come into an office, great corporation we had the receptions on the wall, great letters, topography, fine art, wonderful words. And then you walk from the reception to the conference room or wherever they have to go. And you kind of sense the feeling in that organization. And it has nothing to do with what's written on the wall. 

And you're in the conference room. If you get into that meeting and that's also a different board. 

So shared purpose means shared on two levels level. Number one shared by the executive team by the leadership team, because you look at the why studied the business case for purpose.

And they basically say asked 5,000 leaders across the world. And 50% of them say our company's strategy is not reflective of all purpose or goodnight. I mean, why have one in the first place? So, she had by the executive team is critical, but then even more critical is shared with all stakeholders, predominantly the employees. If they don't know what the purpose of the company is, you can't blame them.

In the same study, it says that the executives who say. of which 50% at our company, the strategy is not effective. Our purpose, they saying only 38% of our employees understand our purpose. So basically more than 60% don't. So you've got to have that purpose clear. 

And the next level of the soul system is what I call the shared understanding. So you see that as a pattern shared is the magic word here and shared understanding looks at vision, mission, values. Like the three things that every consultant needs to be clear about, but I've added a fourth one, which I called spirit. And to me, spirit is the intended culture of the company. 

It's like that moment with the flip charts where you think about what culture you want in your place. And some companies are great with their values and you don't need a spirit statement. LinkedIn is one of them. The seven LinkedIn values are amazing. They go members first relationships matter, be open, be honest and constructive demand, excellence, take intelligent risks, and act like an owner.

So they have the full spectrum. That's the inward focus, the outward focus. And when you listen to these seven, you're clear about what LinkedIn is supposed to be, and that vision of creating economic opportunity to every member of the global workforce and their mission to connect the world's professionals, to make them more productive and successful.

You are in your head when you listen to this, you're already clear about what that organization is. So the purpose is no surprise. The purpose of LinkedIn is to facilitate professional networking. So it all makes sense. It's, well-rounded, it's very clear. So we've got the shared purpose. We've got the shared understanding and that's the theoretical part, right?

And then it gets really practical got to get your hands dirty roll up your sleeves because we're talking about the shared behaviors. And this means all the elements inside an organization that effect how people perceive the culture of that place, whether that this is about hiring, it's about promoting it's about which companies to partner with, how to deal with customers.

All of these elements are critical and companies that do that well, basically create an integrity between the strategy part, shared purpose, and the shared understanding, and the behaviors. And as you rightly said, it's walking the talk. And if you do that, you're very close to having a company with soul.

Mahan Tavakoli: 

Ralf. I find it's very hard to do that. Even in the smallest of organizations. Making sure that the behaviors align with what you mentioned are that shared understanding and a shared purpose. 

Ralf Specht: 

I think you need to be really clear about how you incentivize people. Which behaviors you reward and which one you dont. 

So for instance, I'm don't know the LinkedIn compensation model in detail, but if you have values scheme that says, member's first, relationships matter. These are measurable things, so you can measure how people inside the organization and teams inside the organization are doing on those values. How they deliver on them or the element of act like an owner. So how much risk taking is there? How much initiative is there? 

I mean, for instance, Adobe who ranked number one the soul index, have this wonderful, little thing that the red cardboard box as an employee, you can basically say, I'd like to have the red cardboard boxes. You get one, which got a lot of little nice things in there.

And one thing that is a bit of a surprise to everyone, because it's a credit card with a thousand dollars, and you can basically use that credit card to buy anything you need within a thousand dollars to make sure the innovation that is in your head can be brought to life or can be presented in a way that management can decide whether that is a new initiative that is really building on. 

So, if you're a company that is high on creativity, like Adobe is, that's where you go. So it's about looking at everything a company does. And look back in the mirror, does that match? Can I connect this back to the purpose? The vision mission and the values and the spirit. And if you do that, your chances are not bad. But as you say, it's tough. 

Mahan Tavakoli: 

Now Ralf, in addition to your book, I wonder if there are any leadership resources or practices you typically find yourself recommending to leaders? 

Ralf Specht: 

Absolutely. So one key element in the book in terms of growing leaders is the Capability of Emotional Intelligence. And I think one thing people need to consider is emotional intelligence is something you can learn, nobody is perfect, but you can learn these things. And there's a great tool that I encourage everyone to use.

It's a company called E I game. Which is emotional intelligent games. And this company is run by Kevin element and they offer online leadership simulations. So you can basically, check your behaviors, see what it does or what you do and what it leads to and can play with it and find out which other behaviors, because you always get choices in the various decisions that you have to take create which outcomes and that's a highly recommendable resource.

I can really only recommend that. And the other piece that I'm looking into every now and again is a great book from Peter Daca. It's called Leading from the Jump Seat. And it's about basically handing over control because as a leader, That's what you need to be able to do because otherwise, people can't grow.

And this delegation of responsibility was one of the principles in that constitution of the company. 

You have battles men where I started my professional career and Peter's book leading from the jump seat gives perfect recommendations on how to do it. And he was a pilot so he knows what he's talking about start of the book was really a crisis in the cockpit and he was on the jumpsuit and his student was flying the plane. So Fasten your seatbelt. 

Mahan Tavakoli: 

Those are a couple of great recommendations. I appreciate that, Ralf. First of all, I'm Leading from the Jump Seat. It is the fear associated with being in that jump seat and allowing the other person to make decisions that can be life and death decisions as you're sitting in the jump seat. And a lot of leaders are not even willing to let go of decisions that are not life and death. 

So that's a great recommendation. And with respect to emotional intelligence, it's amazing how many leaders have a fixed mindset when it comes to emotional intelligence. Believing that you either have it or you don't so Ralf, how best can the audience find out more about you? And also your book Building Corporate Soul.

Ralf Specht: 

The books out and it's been a great moment when your first book comes out. So, you can find out more on buildingcorporatesoul.com. You can connect with me on LinkedIn. You can subscribe to the newsletter on buildingcorporatesoul.com. And I'm always interested if anybody has any stories to share about drivers of soul inside the organization or companies that he or she thinks have got. So, there's a form on the website, please fill in. And there's also the soul check where you can check how your company's culture is doing in terms of soul, or just culture.

So have fun on buildingcorporatesoul.com

Mahan Tavakoli: 

I appreciate both the book, Ralf and the resources that you have on the website also. 

Thank you for joining this conversation, Ralf Specht.

Ralf Specht: 

Mahan, it was my pleasure. It was a great conversation. Thank you very much.