March 31, 2025 • 26 mins
We sit down with Dr. James Chitwood, Author Consultant at PerformanceCulture.Expert and author of Leadership Is Not Enough, an Operator's Guide to a Performance Culture. Dr. Chitwood explores why focusing solely on leadership misses the mark, and how optimizing your organization’s operational framework can unlock a culture of performance and employee satisfaction.
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https://brainworkframework.podbean.com/
Connect with Dr. James Chitwood:
Company Website: https://leadershipisnotenough.com/
Company Website: https://www.performanceculture.expert/
LinkedIn: https://www.linkedin.com/in/drjchitwood/
Connect with Chris Troka:
LinkedIn: https://www.linkedin.com/in/christopher-troka-3a093058/
Website: https://focused-biz.com/
Website: https://christroka.com/ #brainwork #framework #business #entrepreneurship #leadership #Operationalkeys
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
We've gotten to the place where we'retreating our leadership like the
only important asset of the companyand everybody else is a liability.
And that is just a fundamental flaw.
And so that's, what's driven allof our culture challenges to date.
People aren't machines.
You can't pull out one machine,stick in a new machine and have
zero effect on your productivity.
(00:21):
You take out one human and stick inanother human, you have an effect.
Not only because new asset isn't astrained, they don't know everybody else.
So all of those ripple effects andall those round of patients, they
don't go into anybody's ballot sheet.
You're listening to BrainworkFramework, a business and marketing
podcast brought to you by focused-biz.
com.
(00:42):
Welcome back to another episode.
With us today is an author consultantof performance culture expert.
He is Dr. James Chitwood talking aboutleadership and what we need to do to
kind of get ourselves to the next level.
Dr. James, so excited to have you here.
How are you doing?
I'm awesome.
How about yourself, Chris?
I'm doing wonderful.
Thank you so much forcoming onto our show.
We always like to ask ourentrepreneurs, tell us more about
(01:03):
your entrepreneurial journey.
What were you doing before andhow has that kind of prepared
you for what you're doing today?
That's funny, Chris.
If I look back on it, When I was alittle kid, I was very entrepreneurial.
I would like buy candy onthe way to school and sell
it for five times the amount.
Like I made these stupid little planesand I'd sell them but then somewhere
along the way that I just got in line,just followed the path and I joined the
(01:24):
army out of high school and I did thatso I had a very challenging childhood.
There was some entrepreneurialaspects to my childhood.
We can't talk about those herethen I just joined the army.
I went to college justone job after the next.
Just kept chasing the chain keptgoing up the chain of command, kept
climbing the ladder and got in thestartup space and was helping that.
(01:45):
And I like to say I'm an ops expertwith the DNA of a salesperson.
So in the last decade of mylife, I was in the startup space,
helping new startups, open up newdivisions and new units departments.
I kept doing what my wife so perfectlycoined as I was operationalizing myself
out of a job over and over again becauseonce you build a good operation, if
(02:07):
you built it right, you don't needthe brain that built it anymore.
So you can hire somebody at 40percent the price point and they can
run it because a good option run.
So I kept doing it and then thelast one, it took nine months and
my wife's like, okay Jim, I've beentelling you to go consult for years.
What are you going to do?
Like if this is your journey and youwant to just keep operationalizing
yourself out of the job, go for itbecause I love you and I got you but
(02:29):
is that really what you want to do?
So I had to do some soul searching and theproblem with consulting was I couldn't,
I had to have an original thought, right?
Like I had to havesomething new to create.
I have a doctorate inorganizational leadership.
I had to use particular tools to studyperformance to study satisfaction.
I could have used those and gone to themarketplace and just been measuring job
satisfaction and that kind of stuff as aconsultant but it wasn't original for me.
(02:51):
And it just didn't tap my heartand then I realized along the
way that I had my own model.
that I had created for performance thatI had been implementing over and over
again without even thinking about it.
So when she's like, whatare you going to do?
Why don't you go consult?
I'm like, okay, well,what's my original thought?
And then I had the aha moment and Iwas able to see many pieces along my
(03:13):
path all crystallized and then that'swhen I decided to write my book.
That's what brought me here.
My objective is like my bookleadership is not enough.
Subtitle, an Operator's Guide to aPerformance Culture Operator's Manual.
And it really is that it's an ops manual.
You can read it, there are pages of do'sand don'ts, like it's literally an ops
manual and my sister was reading mybook and she's a consultant in Southern
(03:36):
Cal doing project land development andsaid, Jim, what did you keep out of
your book for your consulting business?
I said, nothing, because I want to giveto the world and I believe that when
we give, we get, I believe that whenwe put it out there, stuff comes back
and I really believe in that energy.
So my thought was, I want to give to theworld and see what comes and my beginning
of my professional entrepreneurialjourney was one where I'm literally
(03:59):
giving to the world and just trying tocreate an original thought out there.
That is beautiful.
I love the experience that you have inthe journey that you went on always kind
of having this entrepreneurial spirit atheart, finding ways to provide value in
exchange for other value was kind of thebusiness model that you ran with over
the last 22 years being in business.
I'm sure you've seen changes in theway organizations are run the way that
(04:24):
employees are motivated, the way that theleaders are kind of conducting business.
What have been the biggest changes thatyou've seen over the last 22 years here?
And what is your approachto kind of taking on today's
workforce 2024 and beyond?
You mind if I change that question?
Just a tab and take itback, like, 80 years?
Please do.
Please do.
(04:44):
It takes back 80 years becauseI really believe this is the
fundamental to your question.
If we look at how organizationsviewed employees, we have seen a shift
from employees as company assets toemployees as company liabilities.
We have seen this radical shift and a longtime ago, pensions were the norm, right?
We hire people, we kept them forlife, we understood that our business
(05:07):
is built on the backs of our peopleand two things happened kind of
simultaneously over a couple decadesfrom a late 60s to early 80s.
So the 60s and 80s timeframe, we reallysaw the offshoring of labor and it
happened fast and we saw employees becameliabilities find our cheapest liability.
Why?
Because that's what youdo with liabilities.
(05:28):
You minimize your liabilities.
You find the cheapest wayto take care of it, right?
That's a simple balance statementaction and so over these decades,
we saw labor getting continuallypushed into a liability and offshore
and we as a nation and realizeit's actually not very good for us.
And we're bringing that back.
We've learned the errors are alwaysthere and we're bringing it back.
(05:48):
We still have that fundamental issuewhere do you put your employees?
That's one of my questions I ask leadersis where's your employee population?
Are they assets or liabilities?
Because we treat assets differentlythan we treat liabilities, right?
So along the way, we hadtwo things happening.
One of them was the offshoring of laborand the treating of labor as a liability.
The other is CEO compensation andthe treating of CEOs like gods.
(06:10):
If we look at CEO to employee andyou can look at Lowest paid employee,
median employee, average salary,
whatever you look at, if you go to1940 and you look at that differential,
it's like 40 to one then it goesat 50 to one and then it goes
to 60 to one each decade, right?
And then between 65 to earlyeighties, it starts to skyrocket.
(06:31):
Until now, we've got a place whereCEOs are making 10, 000 times.
Even at 1000 times to one, even at 1000times to one, so we've gotten to the
place where we're treating our leadershiplike the only important asset of the
company and everybody else is a liabilityand that is just a fundamental flaw.
So that's what's driven all ofour culture challenges to date.
(06:53):
People aren't machines.
You can't pull out one machine,stick in a new machine and have
zero effect on your productivity.
You take out one human and stick inanother human, you have an effect not only
because the new asset isn't as trained,they don't know you but everybody else.
So all of those ripple effectsand all those ramifications.
They don't go intoanybody's balance sheet.
(07:14):
So I was talking to a president of acompany a couple of weeks ago and he said,
Jim, my board is really pushing back onme on compensation and so we started to
discuss the rate, the cost of turnover
and if you look at the cost ofturnover, it's a lot cheaper
to keep a person, right?
Like.
40 percent on the low end.
So whatever that salary is, 40 percentof it, you just lost it and nobody's
(07:39):
putting that in their balance sheetstart putting that expense in your
balance sheet and you will reallyquickly make different decisions.
And that's kind of that key point whyI drive that and had that conversation
with her was all you got to do isshow the expense that you're losing
and when you need to extrapolate it,you need to talk about productivity.
You talk about time for other people.
Now, all these othervariables are coming to play.
But the key is, once you add turnovercost to your balance sheet, you
(08:03):
quickly start realizing that youare far better off retaining and
developing your employees than burningthem out and grabbing someone else.
I appreciate you taking thatthrough because honestly, everything
you said is 100 percent true.
No one else has said it quite likeyou it's incredible that people don't
see it in the same way where you goback 80 years and you look at the
(08:25):
changes of labor where pensions werea norm that was in government jobs
had to do that to keep up and now thegovernment jobs are the only ones that
offer similar type benefits, seeingemployees as assets versus liabilities.
This is the right approach thatpeople should be taking towards
building a better business.
We've seen these CEO rates go from10, 30 times into the 500 to a
(08:49):
thousand plus like you mentioned,that is absolutely ridiculous.
When you see that change between thegross profit and everything else.
You have to wonder, do we meananything anymore as workers?
Do we mean anything or arewe just here just to get by?
So I can understand the frustrationsof the workforce where they feel
like the CEOs and leadership arejust absolutely disconnected.
(09:09):
They have this perceptionthat we're buying 5 coffees
every day, which is not true.
That may be true for them but Ijust think they're so out of touch.
So to have someone like you, hittingthe points home with actual facts
and evidence is so great to hear.
You can keep going for aslong as you want about that.
Please go
yeah, it's really an interestingdichotomy because The argument is
(09:30):
always CEOs are compensated on stockprice and and so it's really right.
They're compensated onthe health of the company.
Well stock price has nothing to dowith the health of your company.
Newsflash to anybody who's not aware.
Any good economists will tell youthe stock market and the economy
have nothing to do with each other.
They are not connected.
The stock price of a companyand that company's health have
(09:52):
nothing to do with each other.
One is purely perception andthe other is hard facts, right?
I mean, look at GameStop.
That's a really great exampleof what can happen when hype
follows and it's so interesting.
I was being interviewed by somebodyand she said, Yeah, Jim, my basic
point is leadership doesn't matter.
It's all about your people.
It's about your operation.
You build it right.
You can plug and playyour leaders all day long.
(10:13):
You create the right system.
It'll run forever and she said,yeah, but leadership does matter.
CEO has an affair in their private lifeand all of a sudden stock price goes down.
I said, do you hear what just happened?
Something completely unrelated tothe company affected its stock price.
That has nothing to do withthe health of that company.
It's because that mancouldn't keep it in, right?
Like in his pants, that's not thehealth of your company, right?
(10:35):
So we, as consumers of stocks,we as a capitalistic society
need to recognize that if we goback, I'm a fan of Anna Smith.
I'm a fan of the Wealth of Nations.
If you read Wealth of Nations, I take adifferent view than everybody and then
most people see it as the ultimate messageof that is the free market economy and
hands off laissez faire environment.
It's all about that free market andyou've got to be focused on your inputs
(10:58):
not your outcomes in order to makeany change or what your inputs are.
If you go to it, he talks about thevoluntary participation of labor, we
recognize that employees are assetsand when they voluntarily participate
then they have a vested interestwith you in the health of your
company to drive a greater growth.
And that's where the economic engine isbuilt on, it's built upon those people
(11:21):
and that voluntary participation, soit is that massive disconnect that we
as consumers and I mean all of us asconsumers in a capitalistic society.
We're consuming stock based off a pricenot off the health of the company.
I believe in the investors who areinvesting in companies, right for
the long term, we can liken thisto energy policy believe it or not.
I have a very smart sister who workedin alternative energy for a large auto
(11:44):
manufacturer and I was talking about thefact that we can't get alternative energy
plans to go anywhere in this country.
She goes, Jim, we have four yearplans in this country because that's
as long as someone's in office and sowe're constantly work with countries
that have thousand year energy plans.
They're making decisionsfor the next thousand years.
Would you imagine America makinga hundred year energy plan?
(12:04):
No, you can't.
But that's the disconnect, right?
Everything in our countryis so short term focus.
I was laughing at myself.
So I have a doctorate in organizationalleadership after three BA degrees
and after my MBA, I'm reallygood at quantifying things.
And I was laughed because ifyou listen to a trader call.
You don't hear any trader asking, how areyour people living your mission and vision
and values and making society better?
And also, you don'thear any of that, right?
(12:26):
What do you hear?
How are you going to cut expenses inorder to hit your quarterly numbers?
Well, the fastest way to cutexpenses is to cut people.
Once you cut people, you've got a rippleeffect and that is felt throughout the
entire organization and here's costs.
Just went up because you haveto replace all those people and
your productivity just went down.
And that's the other piece,when you look at turnover, you
can't just look at your cost.
You also have to look at youryour hit on your on your revenue
(12:49):
because it doesn't matter if they'renot even a revenue generator.
Every person is involved in the revenuegeneration of your company, even if
their accounting code classificationdoesn't place them in the sales
department line or the rev line
so when you get rid of peoplein all your other departments
that has an effect on sales.
It has an effect on your revenueand you need to calculate it
properly to fully understand whatthat turnover is about to do.
(13:12):
Absolutely.
One thing you mentioned about thefree market being the outcome.
I love the idea and the principleof capitalism and what that system
can produce and the benefits of it.
Unfortunately, I feel like it's beenso long where corporations and the
big players have had this upper hand.
They've amassed this wealth that Nolonger is it a fair playing field
and it's not even close anymore.
(13:33):
They now have the resources and manpoweravailable to where they could, if
they wanted to pay their employeesa bit more to stifle out mom and pop
or smaller competition, they have thelegislative power now to influence
politics and laws that would benefit them.
I love the idea of a free marketand capitalism as a whole but
(13:55):
unfortunately, the systems kind of beenlopsided for a little too long where.
It's just not as balanced as it was.
I do feel like all of your ideas and yourviewpoints should be what the standard is
for a lot of people and unfortunately nowwe're seeing companies remove features
and services and they increase the prices.
(14:15):
They're doing the exact opposite.
I think people are almost fed up.
They're to a breaking point.
I think recently something you mentionedwith GameStop is that, sometimes
the price doesn't always reflectwhat the company may be valued at.
What their true rating might be.
Is it more on a belief?
Is it sentiment?
Is it where the market is at?
So there's all these different factorsinto play but going into the free
(14:36):
market into GameStop, into the recentmurder of the UnitedHealthcare CEO.
A lot more information is comingout to understand what's going on
and what's really going on herebut I don't think there was a
lot of empathy for his death.
I don't know what to think of that.
Yeah.
I have a college kid again, pretty well.
(14:57):
You and I were talking earlier,he's a brilliant young man.
And he's pursuing a dual degreein math and economics and anyways,
, he's called a student, right?
So he's part of that whole culturalnorm and the subject come up and he
said, listen, dad, first off, nobodyshould be deserved to be murdered.
Number two, United has thehighest rate of claim denial.
How can you be a good manand lead a company with the
highest rate of denial claim?
(15:19):
Right.
And I'm really concerned that if wedon't do something as a country, our
capitalistic model is completely atrisk and that is my greatest concern, is
that capitalism is at risk right now andunfortunately, if we don't make little
changes really quickly along the way tokind of change some things, the only way
to change most things is through prettysevere means and that's very scary.
(15:40):
So I would really like to see us aspeople, as intellectuals rise up, realize
and make some changes now because historydoesn't tell a pretty tale when you don't
listen to the people and that's basicallywhat we're at right now and when the
people are saying, yeah, but was he like,okay, he didn't deserve to be murdered.
I think it's an interesting viewpointand I think that the sentiment is kind
(16:01):
of shared across the entire populationand many of them are now realizing,
I think they almost enjoyed or hadsome satisfaction in knowing that
the CEOs are a little bit too scared.
They're scared.
They're calling for more securityservices and the CEO's first reactions
was to remove the names and profilepictures on their about sections on
(16:23):
their company pages, maybe we shoulddo things to make our employees
happier, to make our customers happier.
I mean, how scary does it haveto be for McDonald's to say we're
going to bring back the snack wrap?
They were so adamant against that.
Look at what changes are beginningto take place and I agree if we
don't make those changes now, theentire system will be at risk.
(16:44):
Yeah, we we lost her.
The way to look at how we've lost herway is initially it was all stakeholder
equity and then the Jack Welch era,it became shareholder equity and I'm
sorry but shareholder equity has nothingto do with the health of the company.
They're not stakeholders.
Shareholders are not stakeholdersbecause they're not in for the long haul.
You're just playing in a game.
You're not building the field, so Ibelieve what like until we change that
(17:08):
in our MBA, it's about stakeholderequity not shareholder equity, that
we're going to have this challenge,
There's just so many fundamentalthings that we need to focus on.
You're absolutely right.
How about instead of getting rid ofthe about page, think about how do we
increase the value for all stakeholdersand that includes your customers.
Yes, absolutely.
It's unfortunate to see that we've gottento a point where business itself is so
(17:32):
consolidated that they have the nerveto do things like that and basically
you're no longer really a customer.
We don't have to do what you want or need.
This is about us prepackagingsomething that's beneficial for
us and you have no other choice.
You have to take it andthat's not true capitalism.
If we had more competition available,this would look much different
(17:53):
today as kind of the side effectshave kind of come through here.
It's unfortunate but I agree.
Something needs to be done.
I almost feel like we should publishthis episode a lot sooner because
the important topics that youmentioned here, it's a breaking point.
And I think the sooner the betterthis message needs to get out there.
What else out there is kind ofthe norm or the perception within
(18:15):
business or leadership that you havea different perspective on that you
feel should be changing the world here.
Well it's interesting.
A friend of mine just read my bookand he said, when you write your
next one, please do it right away.
Can you write it on the remote culture?
The people working from home becauseorganizations still haven't figured it
out and they don't know how and so they'reall saying just get back into work.
(18:38):
There's no strong empirical evidence tosay organizations are more productive.
There's some anecdotals but there'sjust no strong empirical data to
say that you're going to make itmore productive workforce, right?
It's just not right and I've been workingfrom this room right here since 2018.
So when the world shut down, theonly thing that changed for me aside
from the deaths which were absolutelyterrible, I couldn't go anywhere
(19:00):
and my house was full of people.
Other than that, I was right here,
I was working for a remote organizationand we were a startup and I was the
first remote employee because, Iwas the ops guy who was designed to
build out an operation and so I hireda bunch of remote people and we built
a great culture because I had to justrethink the method of engagement.
That's really what it is.
I believe that we needto get away from this.
(19:20):
I have to tap someone on the shoulder.
To know that they're actually working.
I need to measure keystrokes.
I've always been that outcomes watchernot a productivity watcher and a lot
of your CEOs come out of the finance.
Right.
So they only know how to countand if you can't see them, you
can't measure they're not working.
Well.
Maybe they are?
So I've always been there and I can tellyou, I've been in a lot of rooms with a
(19:42):
lot of executives saying, dude, I don'tcare if my team works two hours a day.
If they outperform your team.
Great.
Now, granted, maybe I've got productivitygoal issues and I need to grade it, but
if they're hitting it, they're hittingit and that's really that simple.
And so same thing, like the whole concept,it's all about methods of engagement
as it relates to remote workforces.
And you and I have had a dark,fantastic dialogue before this.
(20:04):
I personally feel like we madesome great connections at a
personal level through a screen.
It can be done if you just rethinkthe methods of engagement and you
rethink what a company meetingshould be and how to make that work.
So, my model is builtoff of four elements.
Those elements are training, recognition,accountability and communication.
They're the basics of a company.
(20:25):
Well, training's the first thing toget cut from most companies so I won't
go down that diatribe but one of thethings that I talk about in my book
is what I call the 50 50 meeting.
And what a 50 50 meeting is.
I got this from my uncle RoyChitwood, who's now passed is every
meeting needs to be half the math.
Half quantitative, half qualitative.
You gotta look at the numberscause your organization's
(20:47):
either growing or it's dying.
The math is really simple.
Next year, it's gonna be moreexpensive to do what you do.
So if your revenue isn't exceeding thegrowth then you're gonna be losing money
and everybody needs to know this, right?
So you need to be looking at this.
You also need to be talkingabout the people, you need to
have qualitative conversations.
You need to make connections.
You need to figure out how to do that.
Now, that qualitativepart could be training.
(21:08):
It could be, hey, what areyou doing this weekend?
Tell me about your family.
Hey, that's a super cool guitarin your background, right?
Like, getting to know people.
Unfortunately, most people don'tstructure their meetings with anything
more than a here's the hard data facts,here's the quantitative, there you go.
Go do it.
So when they're in a room, it's a littleeasier because then the meeting ends
(21:28):
and they can kind of imagine but whenpeople are just sitting there on their
screen and they hit click, you gotno clue what the heck they're doing.
I manage a remote team right now for aclient and we've got a great culture.
And it's because you gottatake the time to do it.
It just takes the effort andit takes rethinking what the
methods of engagement are.
(21:48):
Once you do that, you canbuild the missing piece of most
organizations, Maslow hierarchy ofneeds which is the social bonding
level, which is level three.
To depending on who's written it butbasically the social bonding is the
most important element before you canget up into some of these altruistic
goals that everybody wants to drive toand so most organizations don't have a
clue how to build social bonding, right?
(22:10):
They just don't know how to do it.
And then if they think they do, thenthey go fire people and have no idea why
everybody else isn't producing like theydon't really get what social bonding is.
So yeah.
I hope that's a good answerto your question that I really
think we need where we are now.
Our current issue is we need torethink what the remote workforce is.
We need to stop trying to geteverybody back in the office.
(22:31):
Now don't get me wrong.
There are certain jobs that do require it.
They just do.
Most don't and there are a lot don'tright and if you rethink your methods of
engagement, you can build an extremelystrong culture in a remote environment.
Yes, absolutely.
And because you've worked with somany companies and teams and have this
perception here, what do you think nowis motivating employees to want to go
(22:54):
to a company to stick with a company?
Is it the work life balance?
Is it the compensation?
Is it the connections that they get?
Is it the experience?
What do you think the CEOs andleadership should be focusing
on to attract and retain talent?
What's fascinating is the shifts.
We were talking about the free marketeconomy and one of the things that I'm
very interested to see is this nextgeneration of consumers are willing
(23:16):
to spend 30 percent more of a productif they know that the company has
good values and they know that theyhave a good environmental impact.
The next level of consumeris willing to spend that.
My children are willing to spend moreon a product that they know goes to a
company that cares about the stakeholders.
And so it relates also into the workforcebecause everybody talks about the next gen
(23:38):
is not interested in climbing the ladderthe same way they're just not right.
And they're looking for purposeand meaning and values in their
workplace but they're also wantto know that that company cares.
So a lot of that disengagement ishappening not because people are
dissatisfied with their jobs arefine with their jobs but the overall
environment is one where you don'thave that stakeholder philosophy.
(24:03):
It's not the cultural norm to worry aboutand stay, my family are members of my
stakeholders as an employee and that'slike when I talk stakeholders, I'm talking
about the ripple effect outside of theemployees, the whole and the consumers and
their fit, like, that's your stakeholder,
a population set and so when companiesare focused on that greater level, that's
(24:25):
what the modern consumers are looking for.
That's what the newemployees are looking for.
They're willing to spend moreif they know the company cares.
That is so important, Jim.
We appreciate you coming onand sharing everything with us.
We always like to share wherepeople can get connected with you
and find out more about you online.
Awesome.
So I'm on LinkedIn, Dr. James you canlook for my book at leadershipisnotenough.
(24:47):
com.
That'll redirect you to a personalsite but it'll take you right to it.
Leadershipisnotenough.
com or my website, performanceculture.
expert.
So if you go to performanceculture.
expert, that'll lead youright to me and I'm a real big
believer in paying it forward.
So I will always have that greatconversation up front to give
you some great insight, get yougoing and if you want to engage
further, I'm happy to do so.
(25:08):
That is awesome.
And we'll have the links availabledown in the description and the
show notes so you can get connectedwith Dr. Chitwood here as well.
Now Jim, before we wrap uphere it seems like you've been
doing a lot of great work.
I love the viewpoints that you share andthe values that you have, what are you
most excited for getting into 2025 here?
Are you kind of business as usual?
Do you have new initiativesyou're putting out?
(25:29):
Anything cool or excitingthat you're putting forward?
Getting on the speaking circuitmore, getting out there,
getting my message on a stage.
That's what I'm really looking forwardto is 2025 is moving more down that path.
My work has been one on one withcompanies, interactions such as this
and I look forward to more opportunitiesto present my message to a broader
(25:50):
audience in a live environment.
Well, it's a very important message andI appreciate you going against the grain
here against what major news or popularbelief or the misconceptions might be.
So thank you for going to bat forus and everybody, for people as
a whole for we, the people, theAmericans, for people around the world.
This is so important for us to behaving these conversations right now.
(26:13):
So hopefully we can get you somemore speaking opportunities.
Open you up to our audience aswell and just promote and get
your message out there a bit more.
Thank you.
I appreciate you Chris.
Of course.
It was always a pleasure.
We appreciate it.
We'll have to have you on for asecond episode here in the future
Once things progress a little bitmore and we'll kind of see where
the world is at at that moment.
Awesome.
Thank you.
I look forward to it.
(26:35):
Of course.
Thanks so much
We've gotten to the place where we'retreating our leadership like the
only important asset of the companyand everybody else is a liability.
And that is just a fundamental flaw.
And so that's, what's driven allof our culture challenges to date.
People aren't machines.
You can't pull out one machine,stick in a new machine and have
zero effect on your productivity.
(00:21):
You take out one human and stick inanother human, you have an effect.
Not only because new asset isn't astrained, they don't know everybody else.
So all of those ripple effects andall those round of patients, they
don't go into anybody's ballot sheet.
You're listening to BrainworkFramework, a business and marketing
podcast brought to you by focused-biz.
com.
(00:42):
Welcome back to another episode.
With us today is an author consultantof performance culture expert.
He is Dr. James Chitwood talking aboutleadership and what we need to do to
kind of get ourselves to the next level.
Dr. James, so excited to have you here.
How are you doing?
I'm awesome.
How about yourself, Chris?
I'm doing wonderful.
Thank you so much forcoming onto our show.
We always like to ask ourentrepreneurs, tell us more about
(01:03):
your entrepreneurial journey.
What were you doing before andhow has that kind of prepared
you for what you're doing today?
That's funny, Chris.
If I look back on it, When I was alittle kid, I was very entrepreneurial.
I would like buy candy onthe way to school and sell
it for five times the amount.
Like I made these stupid little planesand I'd sell them but then somewhere
along the way that I just got in line,just followed the path and I joined the
(01:24):
army out of high school and I did thatso I had a very challenging childhood.
There was some entrepreneurialaspects to my childhood.
We can't talk about those herethen I just joined the army.
I went to college justone job after the next.
Just kept chasing the chain keptgoing up the chain of command, kept
climbing the ladder and got in thestartup space and was helping that.
(01:45):
And I like to say I'm an ops expertwith the DNA of a salesperson.
So in the last decade of mylife, I was in the startup space,
helping new startups, open up newdivisions and new units departments.
I kept doing what my wife so perfectlycoined as I was operationalizing myself
out of a job over and over again becauseonce you build a good operation, if
(02:07):
you built it right, you don't needthe brain that built it anymore.
So you can hire somebody at 40percent the price point and they can
run it because a good option run.
So I kept doing it and then thelast one, it took nine months and
my wife's like, okay Jim, I've beentelling you to go consult for years.
What are you going to do?
Like if this is your journey and youwant to just keep operationalizing
yourself out of the job, go for itbecause I love you and I got you but
(02:29):
is that really what you want to do?
So I had to do some soul searching and theproblem with consulting was I couldn't,
I had to have an original thought, right?
Like I had to havesomething new to create.
I have a doctorate inorganizational leadership.
I had to use particular tools to studyperformance to study satisfaction.
I could have used those and gone to themarketplace and just been measuring job
satisfaction and that kind of stuff as aconsultant but it wasn't original for me.
(02:51):
And it just didn't tap my heartand then I realized along the
way that I had my own model.
that I had created for performance thatI had been implementing over and over
again without even thinking about it.
So when she's like, whatare you going to do?
Why don't you go consult?
I'm like, okay, well,what's my original thought?
And then I had the aha moment and Iwas able to see many pieces along my
(03:13):
path all crystallized and then that'swhen I decided to write my book.
That's what brought me here.
My objective is like my bookleadership is not enough.
Subtitle, an Operator's Guide to aPerformance Culture Operator's Manual.
And it really is that it's an ops manual.
You can read it, there are pages of do'sand don'ts, like it's literally an ops
manual and my sister was reading mybook and she's a consultant in Southern
(03:36):
Cal doing project land development andsaid, Jim, what did you keep out of
your book for your consulting business?
I said, nothing, because I want to giveto the world and I believe that when
we give, we get, I believe that whenwe put it out there, stuff comes back
and I really believe in that energy.
So my thought was, I want to give to theworld and see what comes and my beginning
of my professional entrepreneurialjourney was one where I'm literally
(03:59):
giving to the world and just trying tocreate an original thought out there.
That is beautiful.
I love the experience that you have inthe journey that you went on always kind
of having this entrepreneurial spirit atheart, finding ways to provide value in
exchange for other value was kind of thebusiness model that you ran with over
the last 22 years being in business.
I'm sure you've seen changes in theway organizations are run the way that
(04:24):
employees are motivated, the way that theleaders are kind of conducting business.
What have been the biggest changes thatyou've seen over the last 22 years here?
And what is your approachto kind of taking on today's
workforce 2024 and beyond?
You mind if I change that question?
Just a tab and take itback, like, 80 years?
Please do.
Please do.
(04:44):
It takes back 80 years becauseI really believe this is the
fundamental to your question.
If we look at how organizationsviewed employees, we have seen a shift
from employees as company assets toemployees as company liabilities.
We have seen this radical shift and a longtime ago, pensions were the norm, right?
We hire people, we kept them forlife, we understood that our business
(05:07):
is built on the backs of our peopleand two things happened kind of
simultaneously over a couple decadesfrom a late 60s to early 80s.
So the 60s and 80s timeframe, we reallysaw the offshoring of labor and it
happened fast and we saw employees becameliabilities find our cheapest liability.
Why?
Because that's what youdo with liabilities.
(05:28):
You minimize your liabilities.
You find the cheapest wayto take care of it, right?
That's a simple balance statementaction and so over these decades,
we saw labor getting continuallypushed into a liability and offshore
and we as a nation and realizeit's actually not very good for us.
And we're bringing that back.
We've learned the errors are alwaysthere and we're bringing it back.
(05:48):
We still have that fundamental issuewhere do you put your employees?
That's one of my questions I ask leadersis where's your employee population?
Are they assets or liabilities?
Because we treat assets differentlythan we treat liabilities, right?
So along the way, we hadtwo things happening.
One of them was the offshoring of laborand the treating of labor as a liability.
The other is CEO compensation andthe treating of CEOs like gods.
(06:10):
If we look at CEO to employee andyou can look at Lowest paid employee,
median employee, average salary,
whatever you look at, if you go to1940 and you look at that differential,
it's like 40 to one then it goesat 50 to one and then it goes
to 60 to one each decade, right?
And then between 65 to earlyeighties, it starts to skyrocket.
(06:31):
Until now, we've got a place whereCEOs are making 10, 000 times.
Even at 1000 times to one, even at 1000times to one, so we've gotten to the
place where we're treating our leadershiplike the only important asset of the
company and everybody else is a liabilityand that is just a fundamental flaw.
So that's what's driven all ofour culture challenges to date.
(06:53):
People aren't machines.
You can't pull out one machine,stick in a new machine and have
zero effect on your productivity.
You take out one human and stick inanother human, you have an effect not only
because the new asset isn't as trained,they don't know you but everybody else.
So all of those ripple effectsand all those ramifications.
They don't go intoanybody's balance sheet.
(07:14):
So I was talking to a president of acompany a couple of weeks ago and he said,
Jim, my board is really pushing back onme on compensation and so we started to
discuss the rate, the cost of turnover
and if you look at the cost ofturnover, it's a lot cheaper
to keep a person, right?
Like.
40 percent on the low end.
So whatever that salary is, 40 percentof it, you just lost it and nobody's
(07:39):
putting that in their balance sheetstart putting that expense in your
balance sheet and you will reallyquickly make different decisions.
And that's kind of that key point whyI drive that and had that conversation
with her was all you got to do isshow the expense that you're losing
and when you need to extrapolate it,you need to talk about productivity.
You talk about time for other people.
Now, all these othervariables are coming to play.
But the key is, once you add turnovercost to your balance sheet, you
(08:03):
quickly start realizing that youare far better off retaining and
developing your employees than burningthem out and grabbing someone else.
I appreciate you taking thatthrough because honestly, everything
you said is 100 percent true.
No one else has said it quite likeyou it's incredible that people don't
see it in the same way where you goback 80 years and you look at the
(08:25):
changes of labor where pensions werea norm that was in government jobs
had to do that to keep up and now thegovernment jobs are the only ones that
offer similar type benefits, seeingemployees as assets versus liabilities.
This is the right approach thatpeople should be taking towards
building a better business.
We've seen these CEO rates go from10, 30 times into the 500 to a
(08:49):
thousand plus like you mentioned,that is absolutely ridiculous.
When you see that change between thegross profit and everything else.
You have to wonder, do we meananything anymore as workers?
Do we mean anything or arewe just here just to get by?
So I can understand the frustrationsof the workforce where they feel
like the CEOs and leadership arejust absolutely disconnected.
(09:09):
They have this perceptionthat we're buying 5 coffees
every day, which is not true.
That may be true for them but Ijust think they're so out of touch.
So to have someone like you, hittingthe points home with actual facts
and evidence is so great to hear.
You can keep going for aslong as you want about that.
Please go
yeah, it's really an interestingdichotomy because The argument is
(09:30):
always CEOs are compensated on stockprice and and so it's really right.
They're compensated onthe health of the company.
Well stock price has nothing to dowith the health of your company.
Newsflash to anybody who's not aware.
Any good economists will tell youthe stock market and the economy
have nothing to do with each other.
They are not connected.
The stock price of a companyand that company's health have
(09:52):
nothing to do with each other.
One is purely perception andthe other is hard facts, right?
I mean, look at GameStop.
That's a really great exampleof what can happen when hype
follows and it's so interesting.
I was being interviewed by somebodyand she said, Yeah, Jim, my basic
point is leadership doesn't matter.
It's all about your people.
It's about your operation.
You build it right.
You can plug and playyour leaders all day long.
(10:13):
You create the right system.
It'll run forever and she said,yeah, but leadership does matter.
CEO has an affair in their private lifeand all of a sudden stock price goes down.
I said, do you hear what just happened?
Something completely unrelated tothe company affected its stock price.
That has nothing to do withthe health of that company.
It's because that mancouldn't keep it in, right?
Like in his pants, that's not thehealth of your company, right?
(10:35):
So we, as consumers of stocks,we as a capitalistic society
need to recognize that if we goback, I'm a fan of Anna Smith.
I'm a fan of the Wealth of Nations.
If you read Wealth of Nations, I take adifferent view than everybody and then
most people see it as the ultimate messageof that is the free market economy and
hands off laissez faire environment.
It's all about that free market andyou've got to be focused on your inputs
(10:58):
not your outcomes in order to makeany change or what your inputs are.
If you go to it, he talks about thevoluntary participation of labor, we
recognize that employees are assetsand when they voluntarily participate
then they have a vested interestwith you in the health of your
company to drive a greater growth.
And that's where the economic engine isbuilt on, it's built upon those people
(11:21):
and that voluntary participation, soit is that massive disconnect that we
as consumers and I mean all of us asconsumers in a capitalistic society.
We're consuming stock based off a pricenot off the health of the company.
I believe in the investors who areinvesting in companies, right for
the long term, we can liken thisto energy policy believe it or not.
I have a very smart sister who workedin alternative energy for a large auto
(11:44):
manufacturer and I was talking about thefact that we can't get alternative energy
plans to go anywhere in this country.
She goes, Jim, we have four yearplans in this country because that's
as long as someone's in office and sowe're constantly work with countries
that have thousand year energy plans.
They're making decisionsfor the next thousand years.
Would you imagine America makinga hundred year energy plan?
(12:04):
No, you can't.
But that's the disconnect, right?
Everything in our countryis so short term focus.
I was laughing at myself.
So I have a doctorate in organizationalleadership after three BA degrees
and after my MBA, I'm reallygood at quantifying things.
And I was laughed because ifyou listen to a trader call.
You don't hear any trader asking, how areyour people living your mission and vision
and values and making society better?
And also, you don'thear any of that, right?
(12:26):
What do you hear?
How are you going to cut expenses inorder to hit your quarterly numbers?
Well, the fastest way to cutexpenses is to cut people.
Once you cut people, you've got a rippleeffect and that is felt throughout the
entire organization and here's costs.
Just went up because you haveto replace all those people and
your productivity just went down.
And that's the other piece,when you look at turnover, you
can't just look at your cost.
You also have to look at youryour hit on your on your revenue
(12:49):
because it doesn't matter if they'renot even a revenue generator.
Every person is involved in the revenuegeneration of your company, even if
their accounting code classificationdoesn't place them in the sales
department line or the rev line
so when you get rid of peoplein all your other departments
that has an effect on sales.
It has an effect on your revenueand you need to calculate it
properly to fully understand whatthat turnover is about to do.
(13:12):
Absolutely.
One thing you mentioned about thefree market being the outcome.
I love the idea and the principleof capitalism and what that system
can produce and the benefits of it.
Unfortunately, I feel like it's beenso long where corporations and the
big players have had this upper hand.
They've amassed this wealth that Nolonger is it a fair playing field
and it's not even close anymore.
(13:33):
They now have the resources and manpoweravailable to where they could, if
they wanted to pay their employeesa bit more to stifle out mom and pop
or smaller competition, they have thelegislative power now to influence
politics and laws that would benefit them.
I love the idea of a free marketand capitalism as a whole but
(13:55):
unfortunately, the systems kind of beenlopsided for a little too long where.
It's just not as balanced as it was.
I do feel like all of your ideas and yourviewpoints should be what the standard is
for a lot of people and unfortunately nowwe're seeing companies remove features
and services and they increase the prices.
(14:15):
They're doing the exact opposite.
I think people are almost fed up.
They're to a breaking point.
I think recently something you mentionedwith GameStop is that, sometimes
the price doesn't always reflectwhat the company may be valued at.
What their true rating might be.
Is it more on a belief?
Is it sentiment?
Is it where the market is at?
So there's all these different factorsinto play but going into the free
(14:36):
market into GameStop, into the recentmurder of the UnitedHealthcare CEO.
A lot more information is comingout to understand what's going on
and what's really going on herebut I don't think there was a
lot of empathy for his death.
I don't know what to think of that.
Yeah.
I have a college kid again, pretty well.
(14:57):
You and I were talking earlier,he's a brilliant young man.
And he's pursuing a dual degreein math and economics and anyways,
, he's called a student, right?
So he's part of that whole culturalnorm and the subject come up and he
said, listen, dad, first off, nobodyshould be deserved to be murdered.
Number two, United has thehighest rate of claim denial.
How can you be a good manand lead a company with the
highest rate of denial claim?
(15:19):
Right.
And I'm really concerned that if wedon't do something as a country, our
capitalistic model is completely atrisk and that is my greatest concern, is
that capitalism is at risk right now andunfortunately, if we don't make little
changes really quickly along the way tokind of change some things, the only way
to change most things is through prettysevere means and that's very scary.
(15:40):
So I would really like to see us aspeople, as intellectuals rise up, realize
and make some changes now because historydoesn't tell a pretty tale when you don't
listen to the people and that's basicallywhat we're at right now and when the
people are saying, yeah, but was he like,okay, he didn't deserve to be murdered.
I think it's an interesting viewpointand I think that the sentiment is kind
(16:01):
of shared across the entire populationand many of them are now realizing,
I think they almost enjoyed or hadsome satisfaction in knowing that
the CEOs are a little bit too scared.
They're scared.
They're calling for more securityservices and the CEO's first reactions
was to remove the names and profilepictures on their about sections on
(16:23):
their company pages, maybe we shoulddo things to make our employees
happier, to make our customers happier.
I mean, how scary does it haveto be for McDonald's to say we're
going to bring back the snack wrap?
They were so adamant against that.
Look at what changes are beginningto take place and I agree if we
don't make those changes now, theentire system will be at risk.
(16:44):
Yeah, we we lost her.
The way to look at how we've lost herway is initially it was all stakeholder
equity and then the Jack Welch era,it became shareholder equity and I'm
sorry but shareholder equity has nothingto do with the health of the company.
They're not stakeholders.
Shareholders are not stakeholdersbecause they're not in for the long haul.
You're just playing in a game.
You're not building the field, so Ibelieve what like until we change that
(17:08):
in our MBA, it's about stakeholderequity not shareholder equity, that
we're going to have this challenge,
There's just so many fundamentalthings that we need to focus on.
You're absolutely right.
How about instead of getting rid ofthe about page, think about how do we
increase the value for all stakeholdersand that includes your customers.
Yes, absolutely.
It's unfortunate to see that we've gottento a point where business itself is so
(17:32):
consolidated that they have the nerveto do things like that and basically
you're no longer really a customer.
We don't have to do what you want or need.
This is about us prepackagingsomething that's beneficial for
us and you have no other choice.
You have to take it andthat's not true capitalism.
If we had more competition available,this would look much different
(17:53):
today as kind of the side effectshave kind of come through here.
It's unfortunate but I agree.
Something needs to be done.
I almost feel like we should publishthis episode a lot sooner because
the important topics that youmentioned here, it's a breaking point.
And I think the sooner the betterthis message needs to get out there.
What else out there is kind ofthe norm or the perception within
(18:15):
business or leadership that you havea different perspective on that you
feel should be changing the world here.
Well it's interesting.
A friend of mine just read my bookand he said, when you write your
next one, please do it right away.
Can you write it on the remote culture?
The people working from home becauseorganizations still haven't figured it
out and they don't know how and so they'reall saying just get back into work.
(18:38):
There's no strong empirical evidence tosay organizations are more productive.
There's some anecdotals but there'sjust no strong empirical data to
say that you're going to make itmore productive workforce, right?
It's just not right and I've been workingfrom this room right here since 2018.
So when the world shut down, theonly thing that changed for me aside
from the deaths which were absolutelyterrible, I couldn't go anywhere
(19:00):
and my house was full of people.
Other than that, I was right here,
I was working for a remote organizationand we were a startup and I was the
first remote employee because, Iwas the ops guy who was designed to
build out an operation and so I hireda bunch of remote people and we built
a great culture because I had to justrethink the method of engagement.
That's really what it is.
I believe that we needto get away from this.
(19:20):
I have to tap someone on the shoulder.
To know that they're actually working.
I need to measure keystrokes.
I've always been that outcomes watchernot a productivity watcher and a lot
of your CEOs come out of the finance.
Right.
So they only know how to countand if you can't see them, you
can't measure they're not working.
Well.
Maybe they are?
So I've always been there and I can tellyou, I've been in a lot of rooms with a
(19:42):
lot of executives saying, dude, I don'tcare if my team works two hours a day.
If they outperform your team.
Great.
Now, granted, maybe I've got productivitygoal issues and I need to grade it, but
if they're hitting it, they're hittingit and that's really that simple.
And so same thing, like the whole concept,it's all about methods of engagement
as it relates to remote workforces.
And you and I have had a dark,fantastic dialogue before this.
(20:04):
I personally feel like we madesome great connections at a
personal level through a screen.
It can be done if you just rethinkthe methods of engagement and you
rethink what a company meetingshould be and how to make that work.
So, my model is builtoff of four elements.
Those elements are training, recognition,accountability and communication.
They're the basics of a company.
(20:25):
Well, training's the first thing toget cut from most companies so I won't
go down that diatribe but one of thethings that I talk about in my book
is what I call the 50 50 meeting.
And what a 50 50 meeting is.
I got this from my uncle RoyChitwood, who's now passed is every
meeting needs to be half the math.
Half quantitative, half qualitative.
You gotta look at the numberscause your organization's
(20:47):
either growing or it's dying.
The math is really simple.
Next year, it's gonna be moreexpensive to do what you do.
So if your revenue isn't exceeding thegrowth then you're gonna be losing money
and everybody needs to know this, right?
So you need to be looking at this.
You also need to be talkingabout the people, you need to
have qualitative conversations.
You need to make connections.
You need to figure out how to do that.
Now, that qualitativepart could be training.
(21:08):
It could be, hey, what areyou doing this weekend?
Tell me about your family.
Hey, that's a super cool guitarin your background, right?
Like, getting to know people.
Unfortunately, most people don'tstructure their meetings with anything
more than a here's the hard data facts,here's the quantitative, there you go.
Go do it.
So when they're in a room, it's a littleeasier because then the meeting ends
(21:28):
and they can kind of imagine but whenpeople are just sitting there on their
screen and they hit click, you gotno clue what the heck they're doing.
I manage a remote team right now for aclient and we've got a great culture.
And it's because you gottatake the time to do it.
It just takes the effort andit takes rethinking what the
methods of engagement are.
(21:48):
Once you do that, you canbuild the missing piece of most
organizations, Maslow hierarchy ofneeds which is the social bonding
level, which is level three.
To depending on who's written it butbasically the social bonding is the
most important element before you canget up into some of these altruistic
goals that everybody wants to drive toand so most organizations don't have a
clue how to build social bonding, right?
(22:10):
They just don't know how to do it.
And then if they think they do, thenthey go fire people and have no idea why
everybody else isn't producing like theydon't really get what social bonding is.
So yeah.
I hope that's a good answerto your question that I really
think we need where we are now.
Our current issue is we need torethink what the remote workforce is.
We need to stop trying to geteverybody back in the office.
(22:31):
Now don't get me wrong.
There are certain jobs that do require it.
They just do.
Most don't and there are a lot don'tright and if you rethink your methods of
engagement, you can build an extremelystrong culture in a remote environment.
Yes, absolutely.
And because you've worked with somany companies and teams and have this
perception here, what do you think nowis motivating employees to want to go
(22:54):
to a company to stick with a company?
Is it the work life balance?
Is it the compensation?
Is it the connections that they get?
Is it the experience?
What do you think the CEOs andleadership should be focusing
on to attract and retain talent?
What's fascinating is the shifts.
We were talking about the free marketeconomy and one of the things that I'm
very interested to see is this nextgeneration of consumers are willing
(23:16):
to spend 30 percent more of a productif they know that the company has
good values and they know that theyhave a good environmental impact.
The next level of consumeris willing to spend that.
My children are willing to spend moreon a product that they know goes to a
company that cares about the stakeholders.
And so it relates also into the workforcebecause everybody talks about the next gen
(23:38):
is not interested in climbing the ladderthe same way they're just not right.
And they're looking for purposeand meaning and values in their
workplace but they're also wantto know that that company cares.
So a lot of that disengagement ishappening not because people are
dissatisfied with their jobs arefine with their jobs but the overall
environment is one where you don'thave that stakeholder philosophy.
(24:03):
It's not the cultural norm to worry aboutand stay, my family are members of my
stakeholders as an employee and that'slike when I talk stakeholders, I'm talking
about the ripple effect outside of theemployees, the whole and the consumers and
their fit, like, that's your stakeholder,
a population set and so when companiesare focused on that greater level, that's
(24:25):
what the modern consumers are looking for.
That's what the newemployees are looking for.
They're willing to spend moreif they know the company cares.
That is so important, Jim.
We appreciate you coming onand sharing everything with us.
We always like to share wherepeople can get connected with you
and find out more about you online.
Awesome.
So I'm on LinkedIn, Dr. James you canlook for my book at leadershipisnotenough.
(24:47):
com.
That'll redirect you to a personalsite but it'll take you right to it.
Leadershipisnotenough.
com or my website, performanceculture.
expert.
So if you go to performanceculture.
expert, that'll lead youright to me and I'm a real big
believer in paying it forward.
So I will always have that greatconversation up front to give
you some great insight, get yougoing and if you want to engage
further, I'm happy to do so.
(25:08):
That is awesome.
And we'll have the links availabledown in the description and the
show notes so you can get connectedwith Dr. Chitwood here as well.
Now Jim, before we wrap uphere it seems like you've been
doing a lot of great work.
I love the viewpoints that you share andthe values that you have, what are you
most excited for getting into 2025 here?
Are you kind of business as usual?
Do you have new initiativesyou're putting out?
(25:29):
Anything cool or excitingthat you're putting forward?
Getting on the speaking circuitmore, getting out there,
getting my message on a stage.
That's what I'm really looking forwardto is 2025 is moving more down that path.
My work has been one on one withcompanies, interactions such as this
and I look forward to more opportunitiesto present my message to a broader
(25:50):
audience in a live environment.
Well, it's a very important message andI appreciate you going against the grain
here against what major news or popularbelief or the misconceptions might be.
So thank you for going to bat forus and everybody, for people as
a whole for we, the people, theAmericans, for people around the world.
This is so important for us to behaving these conversations right now.
(26:13):
So hopefully we can get you somemore speaking opportunities.
Open you up to our audience aswell and just promote and get
your message out there a bit more.
Thank you.
I appreciate you Chris.
Of course.
It was always a pleasure.
We appreciate it.
We'll have to have you on for asecond episode here in the future
Once things progress a little bitmore and we'll kind of see where
the world is at at that moment.
Awesome.
Thank you.
I look forward to it.
(26:35):
Of course.
Thanks so much
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