As you grow your team, Organizational Culture becomes one of the critical moving pieces in the valuation of your business. I was lucky enough to have a conversation with Lilly Smith, an expert in this subject. Together we talked about what organizational culture means and, more importantly, what it can imply to others as an essential part of your business brand. In this episode, you will learn

· The meaning of Intellectual Capital, which is a vital asset to your business

· How the barrier between internal and external culture has vanished, and why this matters.

· Key indicators that your organizational culture might be suffering

· As a Bonus: when we got Meta, we talked about when to plan an exit strategy from your business

Lilly had some important messages about organizational culture, one of which concerned having systems in place to guide and structure your culture. Guess what? That’s veering into intellectual property territory, so if you have been developing these systems and materials, you may want to contact me to discuss how best to protect them.

Connect with Lily: https://www.linkedin.com/in/lilysmithorigen/

We would love it if you would consider supporting Lily’s charity of choice: https://saltcares.com

Connect with Erin and find the resources mentioned in this episode at hourlytoexit.com/podcast.

Erin's LinkedIn Page: https://www.linkedin.com/in/erinaustin/

Think Beyond IP YouTube Page: https://www.youtube.com/channel/UCVztXnDYnZ83oIb-EGX9IGA/videos

Music credit: Yes She Can by Tiny Music

A Podcast Launch Bestie production

Hello everyone.

Welcome to the Hourly to Exit podcast.

I am so excited to have Lily Smith with us here today.

Thank you, Lily, for joining me.

I'm so excited to be here with you and your listeners, Erin.

Thank you for having me.

Well, I am very excited about this episode.

Uh, we have been trying to get together for a while and I'm so glad

it came together because you have fantastic background that so much

of it is applicable to our audience.

We're gonna talk, specifically about organizational culture, but before we

get into that, I just wanted to make note of something that I noticed on your

website that you have a .consulting url, and I don't think I'd seen that before.

When, when did you get that?

How long have you had it and what did you have before that?

I think I've had that for least five to eight years.

And what happened was my website, you know, pretty much hacked and

uh, the people were trying to send, send me back my website.

I've had when I URL for 20 years.

For thousands of dollars and I wasn't gonna buy into it.

And now what, what's interesting about these new extensions is that you can

be very specific, you know, so in someone, the consulting, business

coaching really, you know, they had this extension of consulting and

there was a way for me to still use my brand name while also specifically

identifying what it is I offer.

But yeah, they have a lot of these new, uh, extensions that are, are really very.

Yeah.

You know, that's funny.

You know, I mean that's just another example of time flying

when you say five to eight years.

Because I remember when all these new extensions were coming online and it

seems like it was yesterday, but it probably was, you know, that long ago.

I love that.

And it's so easy to remember.

Cause that's, you know, One of the challenges is someone be able to

listen to someone mention their website on a podcast and for it

to be able to stick in their head.

And, and that's so perfect.

I love that.

So, please introduce yourself to our audience.

Okay, well, I mean, I've got a, a long bio.

I, I have been a, uh, marketing and branding expert for well over 25

years, and a business coach for the past decade and I've worked with very

large enterprise, uh, companies that you, you know, most everyone would

know about, you know, from in the entertainment field, MTV networks,

Bristol Myers Squibb, and then kind of folded into being more of a consultant

for smaller, medium sized businesses.

And now coaching.

Right now, I provide a business growth program that is driven by

organizational culture and accelerated by facilitated mastermind groups

that I offer business owners.

That's fantastic.

So back to organizational culture.

You know, recently I wrote in my newsletter about how when I first

started making the pivot from kind of a traditional law practice to one that's

more strategic in consulting that I was talking about intellectual capital.

And uh, you know, I confessed that like, almost no one knew what that meant.

And um, but I wanted to make the point that there are non-tangible assets,

other than just intellectual property, that are valuable in our businesses.

And in fact, the name of my business Think Beyond IP was for us to think

about those assets that you know, we can't touch, but that are very valuable.

And culture makes that list, but so many people don't understand what culture is

generally, or organizational culture in particular, so can you help us with that?

Sure.

I mean, it is, you know, the concept of, of brand culture can both at

the same time seem very clear and intuitive, but at the same time it.

Very elusive when you're actually applying it In reality.

Culture, to your point, is a source of competitive advantage that's exclusive

to a business and a brand, and not unlike the exclusivity that you speak about.

culture is a company's distinctive assets that, provides a very unique

marketing position, which together, creates a barrier to competition.

okay, so that, what is , what is that?

Essentially culture is a competitive advantage that exclusive, as I

said, to the business and brand, and it's essentially the DNA and

the brand values of a company.

And it pretty much governs every brand experience and brand expression,

from the customer interactions to employees and how they engage and other

stakeholders, along the company, with every touchpoint along the company.

One of the things I really love about how you present, your work is the way

you really narrow in on, um, exclusivity and predictability, which is, Really

the essence of what makes every business successful and culture really feeds

into that because it provides just that in terms of it being exclusivity, the

marketability that it builds, you know, and the marketability being everything

from really the top being the brand equity, you know, and everything that

goes into building equities into a brand from positioning, competitive advantage,

a brand loyalty, the following you have, you know, the web traffic, depending if

you're an e-commerce site, all that goes into marketability and, and brand equity.

And, as you know, which is a big part of what you do, brand equity is, a brand's

value, you know, and it's determined by perception and experiences of that brand.

And culture has a, a big role in that, at least if it's a properly applied.

A lot of businesses, I mean, even some really well known companies,

don't really apply culture.

And when they do, it just makes a world of a difference in their strategy.

And I could sit here and take the next half hour and quote so many well known

executives who have, uh, come around and will preach on that topic, that culture

eats strategy for lunch is a famous quote, actually,

Oh, I've never heard that before.

Well, I, I do want you to provide an example, but in particular, because

a lot of us think of culture as being something that's internal.

Like that's the way we, you know, collaborate and the way we train

our employees and our mission and that it's more kind of internal.

Hmm.

to be part of our brand, you know, both in attracting clients

and in attracting employees in such a competitive market, it has to be

communicated externally as well.

So how, does a company make known what their culture is?

Well actually, you know, first I will say that right now it's Internal

external branding is one of the same thing, because with all the technology

that we're using, especially social media and all the transparency that, that then

creates is really, you know, internal culture is, really the same as external.

because what your, employees, what your company values are, if it's

properly done, it's expressed in everything that you do externally.

and even if you don't want it to be, if you don't have a handle in

your own culture, It happens anyway because if you don't have a handle

in your culture, it's the way your employees and their position with, and

their relationship with your brand.

It shows in the customer relations, it shows in everything, you know, all the

external touch points that we're involved with through our employees and otherwise.

so if you actually embrace culture and, and kind of take the lead on it

and they'll let it just, you know, let your story be told by others, then

you really, you know, incorporate and, and identify and are very clear about

what your, uh, individual culture is.

And then you make sure that that is expressed in everything

you do internally and external.

Once you apply that and you do that properly, you pretty much manages itself.

And again, there are so many examples of this and so many well known

companies that, I could bring up, for example, this whole just Do it culture.

everything they do follows that idea and that concept internally, the way they

deal with their, employees, the kind of employees that they, and salespeople

that they employ, and the way they, manage customer service, on the brand,

their advertising, everything they do is on point with that, brand, model.

Just.

And, and that culture of, of being proactive, like that, very

positive, works well for them.

Huge.

Needless to say, I pick that because the huge brand equity and then

there's Patagonia, for example, that they known, but still, you

know, another outdoor culture brand.

one of the things that in terms of culture, being a

benefit to employer brand.

They don't even advertise they kind of brag about the fact that they don't

advertise when they're hiring people so much because there's such a strong culture

in terms of this outdoor culture that.

People understand that they're, you know, they're not looking for MBAs.

They're looking for someone who really knows mountain climbing, who really

understands dirt biking, you know,

They don't remember seeing this one ad where they say,

we're looking for dirt bags,

That's terrific.

I was gonna say to the Nike example, just because most people are

familiar with it and that just do it.

So when you talk about the way it translates internally, like to, to,

you know, empower your employees, encourage them to take risks, don't

punish, false starts, things like that.

Is that how, basically how Nike used it expresses itself internally at Nike?

Yes, exactly.

And that's an easy, example to talk about because as you said,

everybody knows it and it's pretty clear, it's intuitive, right?

You don't really need to explain it, do it.

It just, the, the tagline itself, you know, um, it's well

known, it's been well promoted.

The story has been supported in so many.

So we, we know it.

You know that, that makes me curious about what came first,

the tagline or the culture at Nike.

Do you, do you know?

I actually, I, I'm not sure of that.

I would, I would say just thinking about that, that it would've been

good to know which one came first, you know, uh, I actually don't know.

It's a good question.

I'm going to definitely look it up and get back to you.

My suspicion is that, the culture Was there and then the advertising,

cause it is such an old, brand and the advertising picked up on it.

I mean, I've been in advertising so many years that very often that's, you

know, that's the sequence of things, especially with older brands, you know,

cause this whole concept of cultural, though it's been around for a really

long time, it's not been picked up on, uh, as much as it has in more

recent years in, in the way that it.

but it also evolved, right?

It evolved out of relationships from the advertising agencies and

creative and brand developers.

Yeah.

So you also work with small businesses, entrepreneurs.

How does this translate in the small business?

I usually launch an engagement around culture with an

assessment that really is very effective in identifying the existing culture.

And culture really starts with leadership, right?

And, but it's also, Cultivated by, by the employees and, and in how they're

engaging with your, brand and the core values that you share and, and employ

in your internal, uh, leadership style.

If it's a larger organization with a large team, we start with a cultural assessment

system that, uh, I work with, and it very quickly identifies what kind of culture,

you know, the business is made up of.

Meaning the assessment is asking all key.

Leaders within an organization, whether it's all top management or

middle management, et cetera, to just weigh in and see, well, who are

these people who, how is it, what is the role in the organization?

And we start to see a pattern of a certain archetype that is there and

present, and we assess that with.

How does that match with their stated values?

You know, and we, we also have to dig in and really assess what are

those values and does the culture that has been cultivated match

those values and why and why not?

and so, How this starts to be funneled down into, this whole idea of exclusivity

and predictability is that we funnel that information down into the,

especially the marketability aspect of

their business, right?

So how do the values that are behind this culture?

How do they match with their brand?

How, and so we go down the list of everything that, that

expresses that brand and see what matches, what does and what's off.

And, We, you know, build a campaign to make the changes that we need.

And then from an operational perspective, we also look at, you know, well, how

does that, uh, impact operations?

How is this also walking the talk within our, the operational side of it?

and this is where the system side of it, it comes in because, you know,

in terms of what systems are, as you.

really the systems is the documentation of processing, that, support

predictable revenue, uh, positions a company to scale and to operate as

the owner, independent, uh, operation.

I know I'm covering a lot, so I'm skipping.

Yeah.

That's okay.

I do have a question about how, the term organizational culture.

Like if most people don't sit there and go, you know, something's

not going right in my business.

I think I need to go get someone to help me with my organizational culture.

I mean, I imagine that's not the question that they ask when

they go looking for help.

Like what?

What is the question?

Like how do they recognize that they need help and how do they recognize they

need your type of help in particular?

Great question.

Yes.

Well, when you see that everything that intuitively things the right thing to

do, you're offering employees, great benefits but you still, you're not,

Able to retain your, staff or your team, or there's a morale issue or

you could tell that there's something about the brand that your, your

customers are not really, resonating with or it's just, it's a myth, right?

There's so many clues, from the operational perspective, from a

financial perspective, from a marketing perspective, fails, it really, you

know, culture impacts everything.

So I think it would be helpful to give you an example of a case study.

Right.

and that is, now sounds a transportation, you know, it's a

trucking company and, uh, trucking companies very typically have a

very high driver turnover rate.

it's almost a hundred percent annually, which as you know, is extremely expensive.

And challenging for companies to grow despite whether or not they're really,

you know, in high demand or not.

And, um, there was also a very steep competition for a small

pool of driver candidates.

And many of them, you know, were hopping from one job to the next because

of, competitive authors that sign on bonuses, referrals, rewards, et cetera.

And so they took an assessment and did an organizational culture study.

And even though that they had very clearly defined values and engaged employee,

the company who's still not articulating their story to attract new drivers.

So after doing a cultural assessment, an audit, and also,

you know, looking at their employer brand, a whole new campaign was.

Developed that, really resulted in understanding what was the

underlying drivers of, of the, you know, leadership within the company.

And that the archetypes that came through were those of.

Without getting into the explaining of, of the archetypes, but the three

very specific archetypes that were came through as the driving force behind

the culture of that organization.

and which bottom line is, uh, finally that it drove the development of

the corporate brand and the faith and family recruiting campaign.

And, because the driver culture.

resonated very much with that kind of archetype, which I'll say

it's an innocent hero and explorer getting in, you know, I'm sorry, but

No, but it's a lot of information that I, I realize it's not, you know, might

not directly answer, but bottom line is once they did a cultural assessment and

the campaign was developed to really articulate, you know, what their employer

brand was about, more specifically, their driver turnover rate dropped, tremendously

and it was, uh, actually under 30%, uh, afterwards, which as I said before, it was

typically for the industry, it's nearly a hundred percent turnover every year.

and then the company was able to grow and double its fleet and,

um, it was awarded year after.

For a best seat to drive for.

So, you know, it kind of sold itself.

So it solved the problem of, you know, the biggest problem

being, their, drive to turnover.

So in that case, culture and the, the identification and very specific

specific culture and the driving forces in their, particular environment.

We were able to be very, targeted about how to resolve their challenge.

It wasn't a leadership issue, it was a more, a messaging issue for them.

But culture could also be something that could be seen as the leadership issue.

You know, because if the leaders are not modeling the culture and the core

values that they really want to, uh, espouse, you know, they might not be

aware of how they're not doing that.

So doing a cultural audit, you know, we assess well, how is it that your

internal operations are not in line with these values that you want to espouse?

It gets into the, the why, the two fundamental, concepts

in, brand development.

And that is, you know, your why, right?

The source of what, why you exist and your.

And it really feeds into that.

And, and leadership, always has to, be a model for that.

and so identifying a company's, organizational culture can really help you

tease out where it's not, aligned with.

So you mentioned a couple of things that what was it again?

Culture beat strategy every day.

Is that what it was?

Yeah, culture eats, stress for lunch,

There we go, . But when you described the way that you helped this

client in particular, you talked about strategy, you talked about, operations,

you talked about leadership, and so culture, I think sometimes is still

considered kind of a soft skill almost, as opposed to like strategy and leadership

and operations as being kind of more.

Harder skills.

And so how do, do you therefore attract a certain kind of client who's thinking

about culture how do you communicate that culture will solve your problems?

Or how people who are.

Organizational culture consultants, like how they make it clear like

culture will eat strategy for lunch.

Like how do you make people understand that, the market understand that?

well, because you can have best strategies, you

can buy the book, best practices.

If your strategies are not aligned with the culture and

vice versa, it's not sustainable.

You can say, your brand is all about giving and you care about

the world and environment, but.

You know, the products that you, create are not that sustainable.

Your employees are not informed about the sustainable practices.

you know, you could see how eventually the story starts to fall apart,

you know, because if your , sales force is out there and customers

are asking them about environ.

Practices or sustainable practices and employees have no clue.

They've been embraced such a thing.

And, um, in the case, for example, Patagonia, they're very much

about being a sustainable brand.

And if they don't walk their talk, that's not gonna be very sustainable.

You know?

No, it's not gonna build credibility and trust that they do have in

their brand and joy in their brand.

so.

Culture helps identify what those core values are, and then we walk through,

you know, a whole list of, strategies about, well, how is that actually

expressed in everything the company does.

And once that is put in place in a very authentic manner, Your whole

entire team internally, the operation will just follow that, think of

it like in a peer situation, right?

You go into a community of like-minded people.

And the culture is just in the air.

It's the social cues that are there, the language that is, used the way

people behave with one another and, it just becomes part of how we do things

without even having it documented You know, you just kind of pick up.

Right.

you can see examples of that in almost any aspect of our lives.

And then, you know, if you happen to go into some sort of situation where

there's a toxic culture where, you know, the things being modeled are just not

respectful or not in line with what we thought we were, you know, signing

up for, or how we would personally want to be, and then nothing works.

Everything's falling apart, because there's no consensus.

Whereas when there is consensus in a, in a very well articulated

culture or cultivated culture, there's an unspoken consensus that

takes place and so it manages itself.

Right, right.

Well, that kind of brings me to the next place I wanted to go, which is talk about.

The trends that you're seeing regarding the issues of culture and you know,

we're in this time of, cancel culture, for lack of a better word, you know,

where we require brands to take a stand.

How is that affecting the work that you're doing and, and how do you

see it, you know, kind of changing things, you know, in the near term.

well that's actually again, another interesting question,

because, the current concerns about inclusivity, for example, and,

you know, uh, identity issues or.

Um, everything, you know, cancel culture, you know, all that it represents.

If that's important to an organization, then we identify how is that

important, how's that being addressed?

Those are topics that are, you know, more about being aware, and we more fold

that into, well, what's going on in the current culture within an organization?

How does that fit in with, where they stand on these issues.

You know, if you're really, it's important to you to be, uh, inclusive,

you know, um, but what are you doing?

How's your culture support that?

You know, what is the conversation that's being had at the water cooler?

and what the systems you have in place to support and show your external audiences

that they can have the confidence that this is, you know, what you are about

from, how you treat your employees to how you hire, you know, the talent

that you bring in and your leadership and your operations that support that.

Are clients kind of more concerned about that than they were

maybe before the last couple of years?

I would say there's definite higher awareness.

Mm-hmm.

? Lily Smith: Yeah.

And you know, and the thing about is you wanna be authentic, you know, because you

don't want to just say, and this is what typically a lot of people say, okay, we're

going to be inclusive now, so we're gonna show all this diversity in everything

we do , but you know, One thing everyone can do that it can just mimic that.

But it's another thing to really understand authentically

how do you do that?

You know, what is your particular authentic voice around this topic,

and how do you want to express that?

Right.

So then when you come from a very authentic perspective and well

considered position, then you're better able to not only be, uh, an integrity

with yourself, but also with others.

And then trust is built much more easily that way, as opposed to just some cookie

cutter formula for being inclusive.

Right.

Speaking of cookie cutter, do you have Not that this would be cookie cutter.

A big fan of Signature Solutions, but do you have a specific way that you work

with everyone or is it every, client completely unique or maybe a common

starting point with all your clients?

I would say common starting point is doing these

culture audits assessments.

Uh, they're fabulous and a lot of fun to work with.

And then from that, I, you know, kind of break it down to what I was

saying before, just really assessing what their marketability and their

systems, you know, are assessing that.

And it really depends on the engagement of the, the client.

You know, if we're doing a one on one and we're doing a business audit or, or

a culture audit, then depending on what comes out of that, we'll engage, you

know, and, you know, maybe reassess their branding, you know, and their message.

we'll, reasses.

maybe it's really more in the system side, you know, where they don't have the

proper systems to support this culture.

It really starts by identifying what their culture is and then seeing where

that's off, and then deciding whether or not that falls into the marketability

buckets or the systems bucket.

And everything that can unfold as a result of that.

You know, whether it's a, as I said, it's a marketing issue or leadership issue.

it could be so many things.

but the reason I focus on marketability and systems is that, you know, in terms

of valuation at the end of the day, it could be add up to about 70% of the

business valuation and, I know that with what you do, you know, you're always with

an eye on the exit strategy is one of the things that you and I have in common.

You know, we follow this idea of always begin at the end with mind, because it

really provides, uh, a clarity and a focus to any, you know, any business.

And it really helps with the success of a business.

and so that's why if I was to narrow it down to two things that, you know, every

business needs to really get clarity on and then have it in proper place,

is the marketability and their systems of operations and culture really helps,

really teased out the bigger picture for those two things and helped lead the

strategy for those in those two area.

That is amazing.

I love that.

So, uh, as we wrap up, as you may know that this is a pretty meta podcast,

so, um, The lucky recipient of all the wonderful expert advice of the experts

that, come on the show because I am the, a female founder of an expertise

based business that I am building, uh, to hopefully be able to sell some day.

And you are of course, also female founder of an expertise based business.

So I must ask, are you planning to sell your business someday?

I do, I probably am about somewhere about five to 10 years.

Hmm.

Yeah.

So you have, uh, yeah.

All your, pieces in place.

Yeah.

I'm glad to hear that.

I, I do not infrequently hear, oh, I'll never sell my business, but

you just never know when that next.

Chapter will come along.

Uh, that next thing will catch your interest that just, uh, you know, like

the world is changing all the time.

There may be something else we wanna do and we wanna make sure that we

capture all the value in, in the businesses that we're building right now.

So I'm very glad.

Yes.

And one of the things I see too often, and it's very sad, is that

people don't think about that.

You know, they come to retire, oh no, I'll never retire.

Or they don't think about their exit strategy and then all of a sudden they're

five years away from, you know, cause how we feel when we're at the beginning of

building a business, you know, in their twenties, thirties, or any point in time.

Uh, and how we feel about after having been working at, for 20, 30 years, you

know, very different perspectives,

like having kids for instance.

You know, it is, you know, and when they're babies you're not thinking

about sending 'em to college.

But there'll become time like, oh my God, when do they go to college?

And, uh, and so, When, when will that empty nest be?

And that's not because, you know, the fact that we build children and we build

businesses that are independent of us and can thrive without us as a success.

You know, that's not, doesn't make us bad parents.

Right.

Um, so yeah, I like to, to make that analogy as well.

it is so important to really think about your exit strategy

because it really will guide you in building your business in a much more

efficient, purposeful way with clarity that will just be less stressful.

So, whether or not you think, you know, you, you, you wanna think about

retirement, doesn't, doesn't make you know either way, whatever position you.

I always say, begin with the end in mind.

It'll make your whole journey so much more easy.

and at the end of the day, you're five years out from deciding do you

wanna retire or transition into some other career or whatever it is, at

least you will have, uh, things in the proper order so that you can have

that option of selling your business,

or transitioning in a manner that really you can optimize the return

from it from all your effort.

Absolutely.

Absolutely.

So as we wrap up, think beyond ip.

In great part created because I wanted to help create an

economy that works for everyone.

And so is there a personal organization that is doing work

to create a more equitable society that you'd like to highlight?

Yes, actually salt is a fabulous, organization that, operates.

Year, uh, upstate in, in the Catskills where I'm currently

spending three quarters of my time, I

split my time to New York City and the Catskills.

And, I love what they do.

They're, they're working with families in need and youth in need and really,

offering enhancement programs, uh, at all levels and they're very inclusive.

Salt cares.com.

We'll have that in the show notes as well as where people can find you.

But if you would share with us as well, where can people find you?

My website is, www dot origin, that's spelled o r ig, E as

in elephant, N as in nancy.consulting.

And what I'm offering your audience is, you know, half hour complimentary

consultation, uh, and a discount for organizational, culture assessment.

and also an invitation to join my mastermind group and, um, that can

go to the intake form on my website and to apply if they're interested

in, um, being considered one.

That is fantastic.

Well, thank you so much for that.

Thank you again for being here, Lily, and I hope you will have

another conversation soon.

Thank you.

Yes, I hope so too, because I, I think I, there's so much we can

continue talking about and hope, um, you know, we passed in a lot today.

Yeah, absolutely.

Have a great day.

Thank you all.

You too.