This week we sit down with Randy Walton, CEO and Founder of The Walton Group.  We discuss a wide variety of leadership topics including exit planning, why clarity trumps certainty, and how to deal with conflict in a healthy manner.

A highly sought after speaker, consultant, and leadership expert, Randy Walton has been challenging the norms of business thought for over 25 years. He is a pioneer in developing compelling and profitable market strategies through the use of a unique, core value assessment and ideation process. He has extensive experience in corporate strategic planning, operations management, marketing, technology operations, business consulting, and organizational leadership.

The views, information, or opinions expressed during this show are solely those of the participants involved and do not necessarily represent those of SouthState Bank and its employees. 

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Intro: Helping community bankers grow themselves, their team, and their profits. This is “The Community Bank Podcast.”

Erik Bagwell: Welcome to “The Community Bank Podcast.” I’m Eric Bagwell, Director of Sales and Marketing with the correspondent division of SouthState Bank and joining me today is Caleb Stevens. Caleb’s in our business development area and also works on the podcast. Caleb, how are you?

Caleb Stevens: I’m doing great. We got Thanksgiving coming up I think by the time the show releases we’ll be past Thanksgiving and we’ll be back in the office, but got Thanksgiving coming up. So, looking forward to some good food and time with family and looking forward to this discussion today.

Erik Bagwell: No doubt at church last night, we had a Thanksgiving dinner and I thought, man, I’ve done this early, so I’m probably not going to eat much today. So it’s a harbinger of what’s to come. So well, listen, we’ve got a great show today, Caleb and I just sat down with Randy Walton. Randy is the head of the Walton Group, Caleb talk about some of the stuff you’ve known, Randy, I think for a while talk about what we talked with him about.

Caleb Stevens: Yes. So for folks who have listened to the show for a while, they’ve probably heard our episode with David Salyers, she was the former VP of marketing for Chick-fil-A and built it into the brand that it is today. And David said, got a ton of wisdom on branding, culture marketing, where Randy Walton is one of his business partners and helped co-write the remarkable book and the field guides that goes with it and built out a lot of the things that, that whole remarkable movement that David worked on kind of turned into. And so he runs a boutique consulting firm in his own name called the Walton Group, works with CEOs all over the country, helping them think through strategic planning, exit planning, growth leadership culture, and he makes the case. And we talk about this in the interview that we oftentimes get so focused on culture that we miss the importance of developing our leaders. And if you develop your leaders, well, then you tend to have the culture that you’re looking for. And so, it’s a small shift, but I think it’s an important one.

Erik Bagwell: Absolutely, we’ve had a few culture shows in the past. This one’s got a little different spin to it and we talked with Randy for about 40 minutes. So, this is a good show that we’re excited to present to you guys and thank you so much we still are getting feedback I seems like I say this every week, but we are getting feedback from folks that they enjoy the podcasts.

Caleb Stevens: Yes, and by the way rate and review it on iTunes that helps get the show out to more people. And we do get messages and emails from a lot of folks saying they enjoy the show. So if that’s you and you’re listening and you’ve benefited from the show, we would love to ask you to rate and review the show so we can get it out to more folks like yourself.

Erik Bagwell: Absolutely we’ve got listeners, I think in all 50 states and a couple of other countries as well, so we’re thrilled that you’re out there listening and letting us know that. So let’s just go straight to the interview with Randy, thanks for listening.

Caleb Stevens: Well, Randy is great to be talking with you on “The Community Bank Podcast.” How are you doing?

Randy Walton: Been great. Thank you, Caleb great meet with the guys today.

Caleb Stevens: Give us a little bit of your background and everything you do with the Walton Group. I know you started in correspondent banking with the old Barnett Bank. So, how did you go from starting your career there with the old Barnett bank down in, was it Florida or Atlanta? Where were you starting out?

Randy Walton: Yes, it was actually down in Orlando, Florida and came out of college and did that for a number of years and loved it, loved the experience. I loved the diversity of the kind of organizations that we got to engage with and I learned a ton. In fact, I think that was maybe one of the most exciting parts of that was the learning experience was just so deep and very fast and so that was great. And after a few years of that, I was actually recruited to go into the computer business with NCR and that took me to Birmingham, Alabama for a few years and then ended up moving to Atlanta and helped run a company here. But it was a fun transition, I think, going out of business, coming out of the banking world and then going into the business world, having sort of the banking appreciation for the economics and the mechanics of how businesses worked and then seeing how that played itself out in the reality inside the bank that was a great learning experience. I enjoyed, how that transition went. And I think it kind of helped set me on a path that I am now from a consulting standpoint.

Caleb Stevens: Well, give us the lowdown on what you do now with the Walton Group, from developing companies, leaders, their cultures, thinking through exit planning, give us the backstory of becoming an entrepreneur and helping leaders all over the country.

Randy Walton: Yes, absolutely. I got into consulting because for, probably not the best reason, I didn’t know what I wanted to do next, when at the time I was a CIO and I left the organization, I was looking in the average career trajectory for a CIO and position was about 18 months. I thought, well, I don’t want to change jobs every 18 months that doesn’t sound like a lot of fun. And I realized that there were probably a few things that I had learned in my career journey that I thought might be useful for other organizations and just got [inaudible 05:05] and thought, well, what if I started a consulting firm? And it actually helped advice around those things and I did and then it kind of took on a life of its own.
I think I quickly started to recognize that maybe the problems that I was being asked to solve, which maybe were more technical consulting kinds of questions were bigger strategy issues. Like there was a larger lack of clarity about the direction of the organization, or there are other kinds of concerns and I got a lot more interested in those problems and started to migrate into a consulting that was much more strategic in nature. And then things that were very leadership centric kinds of conversations. And so now we’re a boutique firm we serve companies all over the United States a little bit in Europe as well, so I get to travel a fair amount and the companies that we serve are primarily concerned with growth related issues within the business, but our expertise comes in to help them make determinations about what they should pursue to achieve the level of successful growth that they want. And then how do they align the organization and the people in order to fulfill that?

So, one thing get clear vision of what you want to do, but then how do we sort of get all these folks are yoked and pulling in the same direction so that we get the right value from what our people can contribute to where we’re trying to go. And that did over a period of time, starting to migrate into a lot of work around exit planning, because very often I was working with folks and then they would tell me that, one our biggest priority is, my family’s legacy, our economic future whatever it might be is dependent upon us getting to this place where we think we could have a transaction at the end and then realizing they didn’t know how to do that.

It was a different set of skills from what it allowed them to build a successful business and so I did that. And then the last thing I would say is I do a lot of work with private equity the roll-up side. So a lot of private equity acquisitions where I’m doing human capital due diligence to evaluate those groups that are being acquired, topping owners become division executives, for example, inside a much larger entity and then protecting the risk that those owners, eventually do exit the business and then do we have that next generation of leaders prepared for that.

Caleb Stevens: Randy, you make the case that sometimes companies get too focused on culture rather than developing leaders within the organization. And a couple of questions, tell us, what is focusing too much on culture look like, and talk about the value of developing leaders in an organization.

Randy Walton: I wouldn’t want that to be misunderstood, but no way am I suggesting that culture is not of paramount importance, I’ve built multiple businesses around the concept of building culture, but what I think can happen at times is that we treat culture like an accessory to the business. It’s just a nice thing to have once we’ve satisfied the primary mandate of economic performance and market share and things like that like we’re into those things. And then we say, okay, and then on top of that, let’s layer on these nice employee benefits and these nice ways of treating our people and everyone’s gets a big happy family. And I don’t discount the value of those exercises. However, I think one of my operating premises is simply this being an emotionally whole intellectually sane human being will not necessarily make you a great leader, but not being one will always make you a bad leader.

And we think about the experiences that many of us have had in our careers, where we work with someone, and it wasn’t the best experience. Very often the causative issue there was that person was working out their own sort of concerns and problems and their mass, and then we became sort of the recipient of all their bad decision-making, their ego, their anger, their, whatever it might be. So, I think if we want to create healthy, sustainable, and profoundly impactful cultures in the sense that culture is actually an economic advantage to the organization and not just an accessory that gets build on, we have to start at some level with how are we helping our leaders grow to be these healthy, mature, saying emotionally intelligent and fully whole people that in the absence of any clear direction around culture will probably work in the right ways to satisfy those cultural needs within the organization. So it’s like if you pursue healthy, mature leaders, culture becomes a by-product of that. If you just pursue culture and you ignore that state of your leadership, you may end up with neither. I think that’s the risk that people run without.

Caleb Stevens: So, let’s say you’re on a consulting project with a client and you start digging into their strategic plan. You start looking at their financials and it becomes obvious to you that what they say is their biggest problem. Maybe it’s, I don’t, where we don’t have a sound strategy, or maybe we’re growing too fast, or maybe we’re not growing fast enough. Maybe there’s some surface level challenges that they think they have, but the more you dig into it, you realize, well, wait a minute, there’s actually some fundamental leadership issues here going on beneath the surface. What’s sort of the first few steps that you would advise a company like that take once you kind of uncover some of those deeper issues?

Randy Walton: That’s a great question and thinks it’s a pretty common scenario. I think most of us gravitate towards those sort of tactical big rocks in our business life, and hey, we’re not growing fast enough. We’re growing too fast and we can’t afford to sustain that growth, or we can’t find the human capital to support whatever, those are the kinds of issues that people might come to me and they might say, that’s what I’m primarily concerned within the moment. But inevitably, if I’m starting to see, there are cultural issues that culture will show up in the form of tension and it’s typically a tension between individuals. If we’ve got structural problems, if we’ve got accountability issues where we don’t have clear ways to measure how we’re going to perform in a particular area, that’s going to lead to uncertainty and uncertainty is going to cause people to have tension and that tension will play itself out.

And people trying to answer those big strategic questions for themselves, but they’ll do it around these little point issues like, I don’t have authority to make this decision and I’m unhappy about it and they’re having a debate about who has the authority to make a decision. Well, then the question I would ask is that a personality driven conflict within the organization, or is it structural, meaning, have we not done the work of creating clear expectations and the right finite measures for how people perform and what accountability and authority people should have? And these are bigger sort of strategic questions that need to be answered and if we do that and we can say, okay, I think we’ve identified and addressed those structural conditions that are leading to interpersonal conflict.

We solve it for that but then we may still have other interpersonal things. So sometimes culture is a product of decisions that we’ve made that in the moment was probably the right decisions, but we haven’t evolved those decisions to reflect the reality of how we’re operating. So, we’re going to end up with this unhealthy culture, but not because we have any villains in the organization. We simply set them up to have conflict with each other and some conflicts completely appropriate and normal, there’s going to be conflict if you’re a producer in a bank, for example, if you’re a lender than a producer in a bank, you have a natural gravity to try to drive deal flow and volume and activity. Well, if you’re sitting on the credit side of that you’re the break, you’re over there kind of saying, look, but we need to worry about quality. Well, that’s a healthy tension that we want to set up in organization, but we also have to be very careful that neither of those gets too weighted in one direction or the other, because then you’re going to see people frustrated on one side or the other. And then that leads to a whole bunch of other sets of issues that feel personal to the people who were involved in them. But they may be our fault let me be structural.

Caleb Stevens: And what do you tell a leader? Because I’m under the impression and I think that people don’t like conflict, whether it’s healthy or unhealthy, it’s not fun. What do you tell a leader who struggles with that? Who just tries not to rock the boat because you’re right, it does lead to unhealthy tension, whether you’re trying to smooth something out or not, what’s the advice you would give to a leader who just does not like to have any kind of conflict and have any issues they have to deal with?

Randy Walton: Well, I think we have to define there are sort of different degrees of conflict. I mean, obviously there’s conflict, which is adversarial conflict that’s a bad actor who’s going to bring, anger and hostility and it’s intense and it’s a very in your face experience. Very few people like that and the people that say they like it, what they mean is I just don’t like to lose in a moment of conflict, they like to kind of bow up against that experience. But I think that the, the conflict that most people like to avoid is unconsciously a conflict where they feel they have to play the role of the bad guy in the dialogue. I have to assert my authority to tell you something that you’re not going to like, and it’s going to feel uncomfortable and I’m going to feel maybe that I’m projecting power too strongly or I’m a villain somehow and all of this narrative and I’m concerned about that.

So, when you have that scenario and I don’t know a lot of leaders that would say they actively enjoy conflict, there’s the small percentage that they sort of see it as a fun sort of challenge that they like the challenge of it. And the majority, and I mean, overwhelming majority, if we look at statistically 90 plus percent of people are past the median on resistance to conflict and a very small percentage are on the median side of wanting to engage in conflict and they enjoy what that creates. So having said that, I run into a leader that either recognizes that about themselves, or maybe doesn’t see that with clarity about themselves.

And we’re having a conversation to say, hey, you don’t enjoy this conflict you want to please people, you want to appease them and you want to smooth the waters and that’s going to solve the problem. But then we live with this very suboptimal back-end decision, which is, you didn’t say the thing that you needed to say, or you allowed a practice to continue in the organization. You allowed a decision to be made that wasn’t good for the culture or the results or something else within the organization. So, two truths that we hold onto that I believe in number one, it was a quote I heard years ago from Winston Churchill that said “Appeasing a bully is like feeding stakes to a tiger, trying to make them a vegetarian.” And we have this tendency to think that we’ll, sub-optimize the decision like we’re satisficing will be lost, accepting in the moment, but we live to play another day and somehow it’s going to get better later when people will start to respect us.

The second one is the mistake that our directness is not kindness. And I think that they recognize that in a personal relationship, the truest friend is the one we’ll tell you the hardest truth and in a leadership to organization sense. That ability to express with clarity, what might be uncomfortable is actually a kind thing to do. I always liken it to it’s sort of like, you’re having a meal with somebody and you’ve got food on your face or something and then you leave and you get in your car and you notice it in the mirror that you’ve got food and you go why didn’t somebody tell me that, that wasn’t kind for them not to say that, but they might’ve avoided the comment because it felt uncomfortable. Well, what is in fact the kind thing to do, or what does the fact that just honest thing to do very often, that’s the role of leadership. We have to speak into that discomfort, but if we tell ourselves that makes us a bad person, as opposed to realizing that, doing it with appropriate sensitivity actually makes us the most in the camp of the person that we’re dealing with of anybody that we can be. Does that make sense?

Caleb Stevens: Totally, that absolutely is great advice. So Randy, one issue that I see a lot of leaders face, and this is not unique just to banking at all. I think this is at some point or another, if you’re in leadership, I think this is going to be something you’re going to have to confront is any advice to leaders who have a top performer who maybe is not the best culture fit, or maybe the leader needs to have a hard conversation with that top producer. And there’s this fear of, well, man, they are my number one person can’t afford to lose them. At least in the short run, can’t afford to lose them from a financial perspective, but there’s some kind of issue that needs to be addressed or some kind of hard conversation that needs to be had kind of going back to what Eric said about a little bit of a fear of rocking the boat. Any advice to the leaders, listening, who maybe they’ve got somebody in their organization that they know we need to have a tough conversation with this person, but at the same time they’re killing it from a financial perspective and on paper, they look outstanding. It’s easy to have that discussion with somebody who maybe isn’t performing, but what about for that top producer?

Randy Walton: Yes, that’s a great question. I love that question because this is a real world scenario this is not unusual, very often he personality traits and characteristics that can make that person, the highest producer, the confidence that comes through that can give people, maybe an overdeveloped sense of their own importance or their value. And we all have this, I think innate nature that we want to have autonomy and authority we want to have control and power, it makes us feel good. And when we get that without appropriate constraint, without appropriate sort of responsibility towards the people around us, it can make us a little tiring. So, imagine when a child is born, we don’t teach them to look after their toys, we teach them to share. Well, because that nature in us to look after our own best interest is always there. And so we can make our people in our organization, especially high-performance, we can actually make them into the tyrants that we dislike that we get frustrated with because we oftentimes see it authority to them. We give them an inordinate amount of control that’s inconsistent with the role that they have to play within the organization. And so as a boss, then I become fearful because I’ve gotten this economic outcome that I’m concerned about harming by having this person get angry and leave. And yet at the same time, I’m actually losing the right authority that I need to exhibit as a leader. So I’m weakening myself as a leader by not speaking up and then over time as this starts to amplify, you’ve got a person who’s been running with impunity, and now you start to try to rein them in and you sort of corral in their behavior.

It’s not going to end well; it’s going to be a very uncomfortable conversation. So, I think you have to take responsibility that you’re partly at fault for the fact that this person has grown into this kind of action if you will but that doesn’t mean that you shouldn’t step into it. So, the second part of this gets into this idea of our values, it’s what we value and a lot of us will express values to say, hey, we value honesty, we value partnership and cooperation, we value customer promises, we value getting the right returns in our business. Nobody’s ever opposed to those values, but happens is those values starts to compete and you can say, Hey, we value that culture and we value how we treat each other and we value producing great results and outcomes, and then you’ve got an employee that that’s exactly what they’re harming. They’re getting the results and outcome, but they’re not partnering for example, with other people in a very healthy, inappropriate way. So, now what we’re saying is if we let that go, we’re saying that the value of results is far more important to the value of culture. And if you don’t start wrestling with the question of what do I actually think our values are, what am I willing to fight for and to fend? You’re going to end up in a place that has a culture that wasn’t defined by you it happened more as a by-product of the people in the organization that just happened to be there. And do you want that to happen by accident or do you want that to happen by design?

Caleb Stevens: Right. I heard it quote, while back that basically said, you don’t know who you are until you’re tested kind of going back to the question of values. You can have them written down on the wall or on a piece of paper, but until they come into conflict and you’ve got to make a trade off, maybe even between a set of all good things, that’s when you know what are you truly valuing on a street level practical.

Randy Walton: Right. And very often that will be the way I’ll even try to address it with leaders in an organization where they’re saying, hey, we’re going to rock in a hard place kind of scenario here. We know we’ve got some problems with a few people, but we can’t sort of kill the golden goose here. What do we do with that? So, first question is, hey, well, let’s just get some clarity with ourselves about what do we actually value? Like, what do we believe is the right way we should be running this organization and we should, handle these kinds of issues and the create that clarity so that it creates this tension between what we’re experiencing and what we believe to be important in the absence of that. I always say, it’s like going to the grocery store hungry, everything’s a good idea. And cookies and treats and whatever, but you go with a list and your fault. It’s a lot easier to say no to those Oreos because they’re delicious and I want them, but I’m trying to make some decisions not to do those things. We need to create that sort of goal post or that measure of our culture and how we’re going to inter-operate with each other well in advance of the problem. But most of us don’t have the freedom to do that, we end up in a circumstance and now we’re trying to work backwards from the end to that. And I think if we get people’s values clarified, it’s easier to then see that, a person, either they just need us to speak some hard reality to them and help them understand that they’re not expressing our values through their behavior, or even to make the hard decision that says the cost of their behavior towards the rest of the organization, outweighs the value of what they contribute to their performance and that’s never going to be easy.

Caleb Stevens: Randy, one of your areas of expertise is exit planning for business owners. We talked about it a little bit earlier; there are a lot of banks out there a lot of banks probably listening that might be thinking about selling. What’s some advice you could give to the leaders of those organizations and what pitfalls do you see a lot of folks get into that are selling their, their organization?

Randy Walton: Well, I think the banking world as a couple of unique conditions that can help that, that maybe don’t exist in a lot of other industries. For example, when I’m working with a lot of businesses that they are looking down that path and they’re saying, hey, we think selling is an appropriate next step for us at some point. And they have the tension of, are they going to have a financial buyer or they’re going to have a strategic buyer? And if they have a strategic buyer, very often the value of things that they need to create maybe becomes a little bit less risky for the buyer. That’s why you typically see higher values on those strategic transactions than you will appear financial transaction. Banks there are very few financial buyers buying banks, there is always other banks. And so you have a strategic buyer that they have a pretty good ability to identify what’s valuable in that platform. It can be market; it can be some brand equity, the talent base that you have within the organization. But having said that, I think the two things that universally are overestimated in the minds of most sellers that they end up feeling some frustration and regret about at a later date is a misunderstanding of the timeline for those decisions. I think it’s very easy to think, hey, we want to take this action, we see this as the trajectory where we’re going, let’s start talking to people and get ourselves kind of out in the market is somebody that’s available to be acquired. And to think that it’s going to happen quickly and maybe be a little bit more simplistic than it has any potential to be.

And the second thing is to misunderstand leadership and ownership dependence. I think when you talk in larger banks, this is a lot less risky, but in the community bank world it’s just a huge risk because the founder, the CEO, the senior leadership team that very small cadre of critical leaders within mineralization that own most of the customer relationships, they own the relationship to the board. They own the relationship in the community, in the marketplace; it’s all sort of tied up in them. And they’re ideally looking to make a transaction because they would like to move on to the next stage of their life, whatever that looks like. And so now we’ve got this huge owner dependence problem and I will tell you that owner dependence issue that crosses every industry. There’s not an industry that I deal with where that wouldn’t say that’s probably the top, if not the top two problems that interfere with their ability to, to maximize the value of an instant transaction is just not realizing how much it all comes back to them.

And by the way, this actually goes back into a cultural conversation because I guarantee you, if we’ve got an owner dependence issue that we identified that will affect the market’s ability to value that company, the people that work there are living under that as well. And they’re probably if they’re ambitious and capable, they’re saying, hey, I want more responsibility, I want to be more part of the decisions that get made, I want to help drive the future and the growth of this organization. And then if that leadership level doesn’t allow other people to grow and develop in those skills, they’re going to get frustrated and they’re going to leave if they have real potential, or they’re going to be real happy to let all those decisions roll up to the top, they’ll delegate everything to the boss and then be real content to sort of be fair and Midland, and we’re not going to get the best team within the organization. And that will ultimately affect the way your organizations value by anybody it’s going to be making an acquisition to them.

Caleb Stevens: You know, there are a lot of reasons that banks decide to sell. One could be a lack of succession, planning the boards out of ideas, and doesn’t know what to do next. It could be need for scale and technology. Especially today could be rates are low, and it’s just with net interest margin so compressed, it’s hard to succeed financially as a small community bank and not every case, but in some cases it could be just a, hy, we need to lock arms with a bigger institution, but I think you hinted at this earlier, what often happens is that CEO who is in charge of casting the vision, setting the culture, setting the direction leading that entire bank is now maybe just a small piece of the pie, maybe they’re a regional president or community precedent.

And I know for us at SouthState, I can’t tell you how many former CEOs we probably have in our organization who are now running still big jobs and big roles running a big region, big part of the bank, but are no longer at the very top. So, any advice as those leaders sort of think about just that own personal transition of man, I’m going from being the guy or the gal to now, I’m just maybe a regional responsibility and I’ve got to submit to a higher authority. Do you see that being a struggle for a lot of leaders as I exit?

Randy Walton: Yes, it’s a huge struggle and again, it’s not because those leaders they’re not flawed in some way because of that. We love our autonomy and independence, and there was something that drew them into a leadership role to begin with. They enjoy carrying the weight of the organization, they loved the buck stopping there. And I think if you fixate on the authority that you lose, when you make one of those transitions, if you fixate on, well, I’m not the sole decider I’ve gotten to live within other people’s mandate and their strategic vision and I may disagree with that. And in fact, you have to assume that that’s going to happen, I think it’s naive to think, just because when we were dating, we agreed on everything. It’s going to look the same once we’re married. I think we all realistically appreciate that that’s going to change.

But I think where I have challenged leaders that I work with, who’ve gone through those transitions is to say, you’ve been super successful as a leader in a community bank. This is not a step back for you, this is actually you adding a capability set to who you are. Now, you’re learning that I have to wield influence in a different way. I still have a voice in these decisions. I still have the authority to speak into a lot of conversations, but I don’t do so because I have this positional opportunity to do or the positional authority to do so I do it because I have to earn a right at influence with other people. And that’s wielding a responsibility of leadership in a very different way and I would say a much higher level of operation that sometimes when you’re the boss and you just get to make the call, it’s not because you want to, but you can become a bit lazy about that. You don’t have to convince everyone you can just kind of say what it’s going to be. Now, you’re in a position where, well, just because you think it should be that way people don’t have to agree with you…

Caleb Stevens: It’s got to be true influence and not just positional authority.

Randy Walton: 100% yes. And I think that when you see leaders make that transition and they actually step up to that next level of performance, I think through them, it’s a big revelation and they get excited about it. They’re like, hey, this is kind of fun, this is a different way of impacting the organization and impacting the people around me and the ones who can make that mental transition in that way. They’re bringing such a tremendous amount of experience and skill to the table you would hate to lose that you need that you need their voice in things, it just needs to be applied in the right way.

Caleb Stevens: One more question on this whole exit planning before we move on. I know there’s probably a lot of leaders listening who maybe they are leaning a bank and maybe they are thinking about selling at some point over the next couple of years, but they’re not quite sure on the timeline to kind of go back to what you’re saying about the timeline and what does that look like? How does a leader sort of balance giving their team members and their employees the truth while also safeguarding confidential information in terms of, you’re not going to lay out or we’re talking to these three banks and we’ll see what happens and what deal comes together. Of course you wouldn’t do that, but at the same time, you would hope that your employees aren’t totally shell shocked and it’s like, what you said, we were going to hold this bank forever and your granddad started this bank 50 years ago and just can’t believe you and what in the world. How does a leader sort of balance kind of helping employees think about the future and hey, it’s very, it’s a possibility we may sell, but at the same time you’ve got to keep things confidential. There’s discussions that go on behind the scenes and there’s a lot of legal issues you could get in if you obviously share things you’re not supposed to share. So what does a leader do and how do you sort of go about that process with wisdom?

Randy Walton: Well, my knee-jerk reaction to the question and it’s a great question is from a starting premise, the best bank to own is the best bank to sell and the best bank to sales, is the best bank to own. In other words, what will make you attractive from an acquisition standpoint will maximize another organization’s desire to own you and to bring you in, to be a part of him is that you’d have a spectacular culture. You’ve got an incredible service model and the way you approach the community, both at a consumer and a commercial level, depending upon your mix. If you’re doing those things right, and you’ve started to empower and build up that next level of leadership within the organization, you’re much more attractive acquisition target, number one. So, build the organization to that level of performance and it sort of becomes self-sustaining in its own, that’s the best bank to own.

Now, the second problem becomes when we start going down, the path of we know a transition or transaction is in our future, and we’re already starting to take those steps. I think you have to balance out this, this tension between clarity and certainty and this isn’t a concept that I came up with, but this idea of clarity versus certainty, a lot of times leaders in an organization are so concerned with the lack of certainty about that future trajectory. They don’t say anything and people start to get wind of it and people at the leadership level, at least they know what’s going on, they have to be worked into this. And we think, well, I don’t have certainty yet so I say nothing and I think that absence, that sort of vacuum of information, leads people to speculate.

And most of us, when we have uncertainty, we don’t speculate with good news, we speculate with fearful things, this is going to go badly that sort of thing. So we tend to argue that, hey, don’t worry so much about certainty, but you need to offer clarity. You need to offer a certain amount of information that says, listen, we don’t know all of what this will mean, but we respect you enough that we’re going to tell you what we do know and we’re going to tell you the process we’re using to work through this and maybe we give you the conditions under which we would be willing to make a deal or make a decision happen and helping people and sort of, read into the thought process that we have to, what we’re valuing in the process helps people, people can deal with uncertainty. They can deal with uncertainty they cannot deal with this lack of clarity because they will always assume the worst in that moment so that’s our job.

Caleb Stevens: Randy, you got a quick question as we’re wrapping up. A lot of folks listening to this might be saying, you know what, my culture’s probably not great we don’t develop leaders, this is just something I probably can’t tackle, or maybe it’s hard to tackle. First question, how common do you walk in and see a company where they’ve got all their ducks in a row where the culture’s great, where they’re developing leaders and what do you tell folks that think, if it’s not perfect and I’m probably not doing what I need to be doing? Is this something that if you think this has to improve, what does that look like and I am the boat by myself? Because you hear a lot about culture, you hear about Chick-fil-A is a great model and how they develop their team. Is it common to walk in and see that? Or is it more common to walk in and it’s just a mess?

Randy Walton: Yes, hands down a mess. In fact, if I walk into a company at some point that I think has just absolutely perfected it and dialed in it, I’m going to let everybody know because I’m going to quit. I’m just going to go work for them or just write books about them or something. Listen, it’s like a golf game, you’re never done working on your golf game, there’s always something that you could perfect change, adapt, adjust. And I think that we have to give ourselves permission to not be finished and to acknowledge that even when we’re doing it well, there’s probably something more that we can do to do better. And that’s okay, that’s not a flaw in the organization for that to be true, at the same time I think it’s easy because maybe our experience in a leadership role, we don’t experience culture the way the rest of the organization experiences culture.

We don’t live with the tension of an uncertain decision-making or we don’t live with sort of the structural issues that other people are dealing with and we can view that sometimes as their inability to get on board with our mission and our vision. And so I think we have to acknowledge that we’re never going to be done with culture. Second part of is I think we have to also to ourselves have to get in and embrace the idea that culture is a competitive advantage in the marketplace. It’s a competitive advantage in terms of if you’ve got a great healthy culture, your people that overflow of that culture will show up in the way they serve the market, it’ll show up in the way that they serve each other. It’ll show up in so many dynamics that actually lead people to want to engage with the organization and want to do business with you.

Because I guarantee you, when you go somewhere and those people are angry or they’re frustrated or they’re overworked or tired or whatever it might be, and you don’t see that there’s emotional attachment and engagement in their work. You’re not going to have a good experience on that other side from a customer perspective. So this does pay a dividend, but it doesn’t pay a dividend in a real quick, tangible way, we don’t have hard metrics to say 10% increase in culture leads to whatever. Now we do have data that says, well, we see that employees and customers are highly engaged the revenue growth trajectory. There’s a real great data from Gartner that says the revenue trajectory on those companies at the highest level can be five times the people at the lowest level. So, we know there’s data to this, but it’s a very indirect measure. It’s kind of like marketing, spin, you know it works you just don’t always share exactly why or where. And so we have to commit ourselves to the idea that this pays for itself later and then we have to sort of step into that risk and uncertainty, but that should be our job as a leader anyway, is to see that and to say, I don’t care what the hard metrics say. I’m going to start doing some of these soft metric activities because I believe enough in creating that kind of culture that it’s worth the investment to see it pay off it just might take a little more time.

Caleb Stevens: That’s great advice as a golfer and I think you’re a golfer too, you make a swing change, and it doesn’t happen within an hour. It’s probably two months, three months, depending on how much you practice, so that’s great advice to know that that’s always something that you’re working on. Hey, you’ve got a book that you’re working on as well; can you tell us a little bit about it? What’s it about and what’s the timeline maybe to be on the lookout for it?

Randy Walton: Yes. I’m excited to talk about it. The book is called Hidden in Plain Sight; The Communication Secrets you’re just not seeing. And it has emerged a bit of a discipline out of the work that I do with a lot of companies. I was talking to a company one day, a private equity group that I work with and I asked the question. I said, “If I asked you to describe to someone what I do for you, what would you say?” And the guy kind of joked and he said, “You’re like the people whisper guy, like you read people for us. That’s one of the big things that we get value from you that you do.” And I thought, well, I can’t put that on my website I was going to come across, but I probed on that a little bit more, some other people and they said, yes, that’s something that we feel responsibility to do better, is to see people for who they truly are. And I recognize that it’s probably one of those things that we sort of grow into who and how we do that and how we sort of read, interpret other people and it’s clouded with a lot of other stuff. It’s thought we’re their own biases towards ourselves, our own processing biases towards other people and we don’t see people maybe as full and wholly formed. We see them sort of is these representations, people stereotypes. And we just kind of presume based on those things, kind of who they are, what they care about, what they believe in and what their needs are and how can we serve their needs. And I think that knowing another person is incredibly important to developing a sense of empathy towards them, a healthy view of a person we need to know them.

And if we’re not doing the works and know people for what they really are, then we’re going to miss cue on that. And we’ve all had those experiences where maybe we took someone’s actions or statements to mean something. We reacted to that, and then it didn’t turn it in the direction we want maybe it escalated or it became negative or something hostile happened. And so then we’re surprised we’re like, gosh, I saw your behavior, meaning something that did mean. So, there’s a lot of data and a lot of neuroscience out there, and I’ve done a lot of research on this that can help us become more effective at learning to understand people. And it’s not just body language; it’s not just sort of the overt clues that are a part of it.

It’s this whole entire way of putting yourself in the Headspace of another person, that maybe what’s the statement that a person makes in the meeting and what’s behind that. What need are they trying to satisfy themselves by asking their question? Well, I got to put a lot of mental energy into thinking about that when I’m concerned about my own statements and what I’m trying to get out of the meeting, as well as sometimes a person may use a choice of language or they may not say something, actually their silence can be a towel and learning to become very deliberate in that action is what I think people need to work on doing. It’s not so much about the mechanics of how you do it, it’s about becoming aware that you’re probably missing a big part of what people could be communicating to you and then learning to exercise that muscle.

And I think that’d be the biggest statement there is that it’s not so much a skill as it is a muscle and the more we practice with that muscle, the more unconsciously and innately we will learn most of us aren’t choosing to be a villain. Now, there are times we may act in a way that the other person sees as we’re the villain in an issue, but we’re not choosing to be, if I’m a boss and I have a hard conversation with an employee and they go and they tell somebody later like, well, Randy was a jerk and I did like the way he gave me that feedback and he’s arrogant and this and that. And they say all kinds of things about me did that. I go into that conversation thinking I love to exercise power I love to beat people down I wanted to hurt this person. Or was I thinking I want to help coach them to a higher level of performance but I was misunderstood. Well, if that’s true for me, if I’m misunderstood that way, then I’d have to assume that when I deal with people that are dealing in inappropriate and unhealthy ways with me, that’s probably true there.

There’s probably a way that they are explaining themselves to themselves that allows them to stay the hero of the story. Cause we’re always the hero of our story, true villains that see themselves as being villainous because they just like to be a villain. I think they exist, we call them sociopaths and they’re out there, but there are not many of them. And so most of the time we’re dealing with a person who’s just, their motives are misunderstood and that’s our job to determine that, to figure that out and then figure out how to speak to the best version of who they see themselves to be. And when we do that, we’ll own an incredible amount of healthy and positive influence with those folks. And it’s a big part of how we build great cultures inside organizations as well, it works with negotiation, it works with everything. So that book is I think at this point, we’re very hopeful that this stage that we will see that out about March or April of this coming year.

Caleb Stevens: Nice. Well, folks want to engage with you further if they want to get a temperature, check on how their culture is doing. If they want to develop their leaders and want to engage with you, how can they find you?

Randy Walton: Easiest way to find me is on the internet @awaltongroup.net, or most of us on my LinkedIn and I’m always happy to connect and find time to visit with folks to talk about these things.

Caleb Stevens: We appreciate your time and you hitting on the whole concept of certainty versus clarity and I think that’s worth the listening of this podcast, just that alone. You can’t offer a total certainty to your folks, but you can’t offer the clarity that you do have and I think people appreciate that so, I thought that was a great a discussion point.

Erik Bagwell: Absolutely. Randy, thanks for coming on with us.

Randy Walton: Thanks for having me. It was pleasure.

 

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