62: Reinvent Your Organization with Stephen Ogburn

25
Aug

Stephen Ogburn is the Vice President of Ogburn Construction, a fast-growing family-owned concrete repair company in Central Virginia. We dissect Fredrick Laloux’s Reinventing Organizations and talk about how companies can shift from success-focused into people-focused organizations.

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Reinvent Your Organization with Stephen Ogburn

Our guest is Stephen Ogburn, who is the Vice President of Ogburn Construction, where he runs the day-to-day operations of this fast-growing family-owned concrete repair company in central Virginia. Prior to joining the family business, Stephen worked as a beverage director and manager in the restaurant industry. Stephen, welcome to the show.

Thank you very much, Steve. Thanks for having me.

Well, it’s great to have you. Well, listen, my first question is always about the entrepreneurial journey. So what has been your journey from the restaurant industry to taking over running the day to day of your family construction business?

Yeah, cut my teeth in the business world starting out as a bartender. And that was here in Richmond at the VMFA when it first reopened. And I kind of had a great experience there of getting to build a program, a beverage program, and had a great time with that. And as things progressed, I thought, you know, maybe I’ll try my hand at some more of the managing side of the restaurant world and i ended up moving to Colorado and working in a fine dining restaurant there and started out as a bartender there and as things progressed I took on more responsibilities and really started to understand um the relationship of somebody who is passionate about their work learning how to not just do the work but being in the care and charge of customers and employees and making the best possible experience for both and that led me to want to do that in the construction industry and so I had the opportunity to work with my father here in Richmond again and i couldn’t pass it up and we’ve been doing some really cool and fun things since.

That’s really interesting. You know, I see a lot of the more successful family businesses where they have this, I don’t know if that was intentional on your and your father’s side, but they intentionally don’t have the family members come straight into the business, but they have them cut their teeth in other companies. And then when they have matured to some degree, they got experience, they proved their mettle, then they are allowed to come in and play a role in the family business. So I don’t know if that was the case for you or some other consideration.

Yeah, not very intentional. I think growing up with a contractor father, I found my way back and it really was important for me to have that time away and having somebody else be responsible for my development for a time really stretched me in ways that I needed to be stretched.

I totally relate to this, this concept of not necessarily wanting to be in the shadow of your parents to prove yourself. So as you guys are, I mean, this is a fast growing company and you’ve got a great niche, concrete repair, which is kind of a blue ocean, as we call it, where you’re kind of sailing forward, pretty rapidly growing. On your journey, have you used a management blueprint or business framework that have particularly inspired you and which you implemented in your business?

I think like everyone, you kind of take bits and pieces of things that really resonate with you and you kind of hobble things together a bit, but there’s a book, Reinventing Organizations by a Belgian, Frederic Laloux, and he kind of explains this evolutionary process of business models. And that really resonated with us when we were reading that book. He makes some strong arguments for why things have progressed in the business world the way they have and how every system has its deficiencies and how the next evolution of trying to solve those deficiencies, brings us into a new age of how we might conduct business with each other, with our customers and with our employees. And so reinventing organizations is less a direct model and more a kind of understanding of the principles that make different types of models work or network.

Reinventing organizations is trying to take a different look at the people side of how we might accomplish success in business. Click To Tweet

So definitely it’s an interesting book. So tell us a little bit about what are these kind of different business models or how have the business organizations evolved over time and what is this new concept about?

He starts, he gives them colors, I think, to make it easier to think about them. So red is the first color, which represents kind of a very strong leader, dictator type situation, where you can think of the mafia, where you have one individual who’s kind of calling all shots. And to be in that person’s favor is where you wanna be in that structure. To fall out of favor with that individual, it’s a very unstable system as well. You’re pretty much putting everything on one person.

If that person was to pass away or lose their connection to the community, you might have the whole system fall apart very, very quickly. It would create a vacuum kind of thing. So that was kind of how business got started in many ways in the old world. And then he says the next evolution of that would be amber. And that would be more of a getting into a hierarchical structure where you have this idea that everyone is kind of subscribing to, but you have this chain of command that is followed. So the military is a great example of an amber structure where, let’s say the U.S. military, their primary goal and objective is to protect the Constitution.

Everyone knows that from the top to the bottom. Everyone understands the need for command and follows it as a way to make that model successful. So there’s that. And then he progresses from there to Orange. And Orange is really focused on success. Most of what we talk about in business today in terms of metrics and high growth, high profitability, you know, driving those concepts, everything is built around that orange model where we make decisions for the profitability of companies primarily. And there’s nothing wrong with that. I mean, I would say 90 to 95% of businesses fall in that category, but it has limitations in terms of how people fit into that.

And then the next one would be more of a consensus building green model where you have a very tight community. It would feel kind of like a family in that business, but most things are done by consensus where, you know, you take a vote, everybody, there’s lots of buy-in, everybody’s on board, and then you move that direction. So, there are also some, some limitations and issues there. And then finally, he says that kind of the newest of all these models is what he’s calling teal and teal is built around three principles basically self management wholeness, and an evolutionary purpose.

What’s interesting about teal for us is that it. or better than any of these. It’s just trying to solve maybe some different problems that these other systems over time have created. And people are kind of interested in still maintaining their success. Nobody wants to give up the successful side of being an orange company where you drive profit and you grow and everything like that. But Teal is trying to take a different look at the people side of how we might accomplish that.

So, what are the limitations? So you’re saying that 95% of the companies are orange, they are profit-focused growth, focus metrics. So what are some of the limitations when you talk about people in the orange structure that needs to be evolved or needs to be improved?

The thing about orange companies is the way that they’re driving that profitability usually has a lot of sticks and carrots, where you drive people by either saying, if you don’t do this, here’s what’s going to happen to you. Or if you’re able to produce this for us, here’s what we’re going to give you out of that. And that model works to a point, but it ignores a little bit the intrinsic value that people try to bring to work with them. It, uh, it makes it so focused on the productivity and the work that we lose a little bit, sight of the, the human side of everything.

So the customer experience, the business to business experience, and the experience of the individual who’s doing the work, a lot of times gets sacrificed for the, the greater goal of being profitable and, and I’m not saying that it’s always that way do a lot of great things for their employees and treat them very well. It’s just kind of the starting position of how you think about the people that you’re working with and what you want out of that relationship that might change a little bit with a teal mindset.

You think that, or I mean, are orange companies trying to evolve towards steel or is it an evolution type of thing or is it that more requires a revolution? So can you do it gradually? It’s like, can you quit smoking by smoking one less cigarette every day? Some people argue that it’s not possible. You have to quit smoking and then you have your cold turkey and you survive this and then you become a no smoker.

And you just smoke one cigarette, you fall back. So, is it possible for an orange company to to pay more attention on to people to, you know, to make sure that they have a purpose which is, and we’ll talk get into the evolution purpose but which is a positive purpose, making a positive that is already happening, or it requires an evolution, a complete blank slate and a totally different mindset to be at a tier company?

I think it does require a bit of a starting position shift. I don’t know that if you’re, if the way that you think about your business and the people in it is, if you’re trying to get to an end goal and the experience of those employees is important, but not of the highest importance, I think it does change the way that you make decisions. When Frederic Laloux talks about, how one would implement this, he does say, if the leadership, if the ownership isn’t on board with this kind of mentality, it tends to create a little bit of chaos and then die out fairly quickly.

It requires a lot of relinquishing of control from a traditional mindset of control and putting more responsibility throughout the company. So, it does require a bit of a, of a mental shift, and a restructuring of who’s responsible for what, and the relationship of accountability has to change in order for a teal company to, to be successful that way. Otherwise, you’re always fighting against yourself in that system.

Okay, interesting. So let’s switch gears here and get a little bit deeper into this concept of self-management, wellness and evolution purpose. So what does it really mean? And I mean, self-management to me, it has meant in the past, after this conversation, you might change my mind, but in my mind, self-management was basically building a company where you have an independent management team that doesn’t wait for the ownership to tell them what to do, but they are driven by the mission and the purpose of the values of the company, and they basically can manage it without the ownership. So separation of ownership and management, this is what it has meant to me. Is it different from Laloux’s interpretation?

I think that could work within his interpretation, but it would be kind of the first step in that process. So the goal would be to continue that practice further into the company. So the people who are closest to solving daily problems, get more of an opportunity to be a decision maker and involved in solving the day-to-day problems. So, you know, when we think about that as a concrete repair company, we’re thinking about that an install team is there on the job, they have the skills and the knowledge to solve the problems, and they’re already there.

So if we had a long chain of command for decision making, it may not get all the way to the owner, but there’s still a process there that maybe isn’t as efficient if the people in had the tools that they needed and were accountable to that to make the best decision for the company and the customer at that time. That requires a lot of training and responsibility from those individuals, but the fulfillment that comes for them of not having to always get approval for the things that they know are correct, creates more engagement for them in the workplace.

Fulfillment comes from not always needing approval for decisions; this creates more engagement for employees in the workplace. Click To Tweet

And that’s really, you know, if we’re in a society right now where I don’t remember the exact statistics for for this but I believe it’s about 80% of people don’t feel very engaged at work, you know, maybe to include managers in many ways. Why is that? Why don’t they feel like they’re doing work that excites them, that challenges them, that makes a difference in the world? And we think Teal has some answers there for allowing people to bring the best of themselves to work and actually see decisions play out and feel responsible for a good outcome most of the time. It also requires us to let people fail a little bit.

And as a company, come behind them and help get through a difficult situation if it develops, but they get the opportunity to learn through that experience. And man, the implications of that are tremendous. You know, they’re not only learning how to solve a problem, doing it in real time, but they’re also building a life skill that’s going to translate to every aspect of their person. That’s pretty exciting to me.

I definitely agree. And this whole idea of delegating the decision authority to the lowest possible level, it’s very important because the leadership team will never be able to elevate themselves and work at the strategic plane if they are involved in decisions, and that’s true at every level. So, the further down decisions are, the quicker decisions are going to be, the people are going to be more engaged and feel more part of the company and feel more important. That’s going to motivate them. And the companies will be able to grow because all those people can make their own decisions, requires a lot of coaching. So definitely, I agree, that’s important. What about the wholeness concept? What does that mean?

The further down decisions are, the quicker decisions will be, and people will be more engaged, feeling more a part of the company and motivated. Click To Tweet

Yeah, the wholeness, you know, I think the work from home situation right now really speaks a lot to this idea of wholeness. You know, it’s no secret that even if somebody’s at work for eight to 10 hours a day, it doesn’t mean they’re always productive in that eight to 10 hours a day. And a lot of our systems for business revolve around trying to make somebody as productive as they possibly can be for that eight to 10 hours. And while some positions that is required, it doesn’t mean you’re always going to get the best work out of somebody for that eight to 10 hours.

And in some ways, it can ignore some important parts of their humanity. You know, you have examples of companies where, you know, people don’t necessarily have to be at the expense of the company. And so the work from home phenomenon right now is allowing people a lot of flexibility to take 15, 20 minutes, maybe an hour to solve whatever personal issue might be going on, but then maybe do their most productive work because now that thing that was affecting their, their person in their life has been resolved, they can focus better. So, when we talk as a team about what we’re doing for work and how we’re doing it.

One of the biggest considerations is, how is this affecting you as a person, this decision that we’ve, okay, we need to be more productive in this area and get more work done. What does that mean for us as as people, and I asking you to do something that is unreasonable from a human standpoint. And then how do we solve that problem together.

So that would be the wholeness aspect of it not ignoring personal issues not ignoring needs but bringing them to the table as part of the solving of whatever issue is there is an important part of making people feel like, wow, this company really cares for me. I can not have to hide things that are going on in my life because, you know, unless I don’t feel comfortable sharing those things, I can be me. I can have my flaws, but also do my best possible work is what wholeness should look like or what we’re aspiring to try to do.

The challenge I see with this is that what if you have, what if you hire a person who is dysfunctional and they have a lot of personal issues? How do you, you know, draw the boundary that how much personal issues are okay and what is not okay? And then how do you handle those situations where somebody is perhaps take advantage or maybe they are just too dysfunctional to be able to do their job.

And how do I know as their manager that now they step through a certain boundary that now empowers me to to be more and hold them accountable for, I don’t know, managing them out of the company, because one of the things I read in this book is that people essentially fire themselves. So how does that work? How do people, how can people be as objective about themselves so that they actually can punish themselves for not performing?

There still needs to be a level of commitment to the work. So if you’re making a lot of flexible allowances and work isn’t getting done, then that’s going to be a problem. There’s no long-term plan for success in that situation. So when we talk about decision-making and personal responsibility and all those kind of things, it’s not that there are no metrics, or it’s not like, the difference is where the locus of control lies in that process.

So instead of me being responsible to make sure that everyone is doing everything that they need to be doing the agreement between one employee to another saying, this is what I’m taking ownership and responsibility of, and this is how I’m, I’m going to take care of it. And we were shut down in this way. And this is the, you know, the cause and effect of the decision that was made, or that this work was not getting done impacted us this way. So it requires more dialogue and openness, when things aren’t going well.

And even if issues like that are still going on people are just better at hiding it, because they knew what the expectation was, but it was, it was an externally imposed thing whereas this is an invitation for it to be an internally imposed thing where the accountability is still there. in a Teal company, you just, it changes who’s responsible for making sure that it happens. That’s, you know, we kind of have a saying that you don’t get to skip any lessons in Teal. You just get to learn them a little bit differently with different people in mind.

So, what about core values? Do you think that strong core values which describe behaviors that are the expectation from each other in the company? Do you think those core values help companies become more teal in general?

I think core values is a tricky thing because if they’re not felt values, if they’re prescribed values, but the impact on the people, they don’t feel like those values really change anything about the way that they do work or the way that they interact with customers. You know, if you can’t point to a core value and say that we made a different decision today than we would have made because of our core value, then they’re not really core values. That is a very important part of TEAL.

So when we talk about evolutionary purpose, our mission statement as a company is, we want to redefine the construction industry for our customers, our employees, and our community. If that’s our mission statement, and we keep doing things that don’t redefine the construction industry, then it doesn’t matter. But if the employees know to what extent we will go to redefine the construction industry, and they can bank on making a decision in the moment based on that, and that even if it’s the wrong decision from a business standpoint, dollars and cents, we can learn from that something.

Why did they do this? What experience were they trying to have as an employee or give a customer that we need to learn from? Why did they feel the need to do that that way? We think if we can keep that front of mind, we’ll really have a lot more success in building a business because the employees, the core value is a lived value, not a prescribed one.

I agree with you. Core value has to be inherent it cannot be an aspiration. It has to be something that exists and you amplify that. That’s really important. So, if a company’s ownership is dedicated, is committed to creating this teal culture. What does it look like? How do they go about doing that?

Core value has to be inherent it cannot be an aspiration. It has to be something that exists and you amplify that. Click To Tweet

You have to be okay with the long game. It takes, I would argue that the orange model is the most efficient in terms of, if you wanna see results in people quickly, put them in a structure where you have really competent people telling them what to do and how to do it and in what timeframes, you’ll get some results. What we’re banking on in the Teal system is that we can do that with more people at once, get them closer to, if you believe that managers are born, not made, then Orange is really your system.

If you believe that you can work with people and grow them and take somebody who’s rough around the edges and really turn them into a powerhouse in a company, and you believe that most people can do that, not everybody, but you believe that most have the skills in some way to do that, then TEAL is a process by which you do that in a community-like setting. And you encourage each other to take risks and to also profit from that kind of decision-making.

So my father and I, my brother who’s also involved in the company, we believe really strongly that people are good people, that they make some bad decisions and that everybody needs a little coaching and training sometimes, but that mostly when people show up to work, they don’t want to do a bad job. They want to be engaged. And that really our goal and purpose is to invite them into an environment to kind of hold a space where they can learn how to do that. And millennials and Generation Z, that’s what they want.

You know, the up and coming workforce does not want a traditional business structure where it’s nine to five and they feel like they’re just coming to work every day and going home. You know, when we look to hire people, we talk a lot first about our culture and then we talk about the work because we want people to understand upfront that we’re gonna be very different. Your preconceived notions of how work is performed and your responsibilities are going to change a lot.

You’re going to be more responsible. You’re going to be asked to do things that you’re not used to being asked to do. But the flip side and the reward of that is we’re not going to limit your growth potential. We’re going to do everything we can to make you a successful and whole person at this job. And, you know, it’s really challenging, but it’s also really fulfilling when we see that start to happen for people.

I can see that. So when you have a rigid structure, then it’s kind of, it limits your freedom, but it’s still very safe because you know exactly what you need to do and what is the process and you just follow the process and you can you know you can rely on that. Whereas when you have a very fluid structure, then it can be very disorienting and it can be scary. You have to make more decisions. And, you know, if you have the experience, how are you going to make those decisions? So I can totally see that. I can I can see that. In terms of running a company, are there processes in a steel, in a company? And what does it look like, you know, sticking to processes and holding people accountable to following processes?

It’s really important to have good practices, processes, procedures in any company, arguably, but it’s maybe even more important to have really good ones in a teal company because without that you are going to have some chaos. And that’s everyone’s fear. I mean, when we talk to people about what we’re trying to do, that usually is the first question that people ask. Well, how do you know somebody is not just going to fly off the handle and do something that destroys your company? Or how do you maintain quality? All these kind of very legitimate questions.

And to be honest, I mean, I struggle with that a little bit as a leader, that’s not my personal strong suit developing practices, processes, and procedures. So that’s an area of growth for us. And the areas where we don’t have those strong, we’re learning that we really need to build them stronger. Now, the difference, we think is that if you have a process and procedure that is entirely built from a top down kind of management style, you’re probably missing some information. So when we try to build a process, practice, or procedure in this company, we don’t need consensus and we don’t need everybody involved.

But the advice seeking process of, if I’m gonna be the one to create this, I really need to understand fully the implications of that to our employees and our customers. And that really only happens by inviting them to have real conversations. So if we had a salesperson who is having a lot of success and they’ve developed a process or procedure that works really, really well, and we recognize that there’s a void there, that person, whether they’re a manager or not, may become responsible in the decision maker on how to implement and roll out that process or procedure for the rest of the team. They get an opportunity to challenge that and talk about it.

But once that person is the decision maker, we don’t take that away from them. They get to kind of fully ride out that process and see it to fruition. And then we always know that it can be tested. We don’t, we always want to find the best way of doing something and leave the door cracked so that it can always be redefined or changed as we grow. I don’t know if that fully answers your question, but that would be the idea is that, you know, who gets to own and take responsibility of things and implement them is scary, but a good advice process really requires that people don’t make that off the handle decision without getting the advice from the people that can really make a big impact.

Adam Grant is an organizational psychologist and his book Originals I really like. He talks about how experts are really, really good at vetting ideas, but they’re not always great at coming up with new ones. But novices or people who just have an idea come up with some really interesting novel ways of solving problems, but it still needs to be vetted by an expert for to know whether it’s viable or not. So that would be a good analogy for what we’re trying to do there.

Got it. So basically it requires more consultation. It requires more patience, but it creates more engagement and more satisfied employees. And ultimately, if you’ve got the right people, then the process could even be a better than other companies where maybe this one person making the decision and getting a suboptimal process because it’s not that close to the fire. Very interesting. I mean, we could spend a couple more hours at least on discussing these analysis of evolutionary organizations. Definitely recommend that you read it as a listener to find out more about it. So what do you recommend, Stephen, if someone would like to find out about TIA organizations, where do they do that and how do they connect with you if they want to talk to you or reach out and learn about your hands-on experience in this matter?

Absolutely. Frederick Laloux, the author, has a lot of videos available online where he talks about that you can’t just tell somebody how to be a Teal company. They have to, part of the process is figuring it out. But he’s got a lot of great videos on, if you’re interested in doing that, even if you’re not an owner or a CEO, what can you do inside your company that doesn’t violate trust and your position but you know how can you start to implement some of these ideas and see how they affect the people that you work with. So, he’s a great resource.

He has two books really is one that’s the longer, more academic version, and then he has a shorter one that has some pictures and everything but it does a really good job of communicating the core ideas, and that you could read that maybe three, four hours if you’re dedicated to it. In terms of interacting with me, I am on LinkedIn. That would be a great way to connect. And, you know, through our companies or my personal Facebook page, I wouldn’t even mind that. But yeah, I’d be happy to talk to anybody about the real struggles that we’ve had because there have been some. I don’t want to paint it rosy, but we also we’ve found that this is something that we’re really committed to and very excited about and seeing a lot of a lot of cool things happen within our company because of it.

Okay, well, very interesting. So Frederick Laloux reinventing organizations is the title. There are two versions. There’s a simplified picturesque version of the book. Both are worth digging into. Stephen Ogburn, the Vice President of Ogburn Construction. But thanks for coming and sharing your experiences on the Teal organization with us. And for you listeners, if you enjoyed the show, please rate and review and stay tuned because next week I’ll have another exciting entrepreneur coming on the show. Thank you.

Thank you Steve.

 

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