79 - Investing in People: The Key to Sustainable Growth and Innovation with Happy Companies' James Lawrence

[00:00:02] People First Organizations will win in the future of war. You're only real asset is your people. We know why our person is going to work. HR led organization is... I'm sorry, but leaders don't need it and they can be chopped away. Welcome to the People Strategy Leaders Show.

[00:00:19] I'm your host, Sri Chalapha, founder and president of Engageedly, and a serial entrepreneur in technology, films and music. This is where we talk to people leaders, business strategists, and organizational subanets about leading in the time of change. What is working? What is not working?

[00:00:36] And more importantly, what we should be thinking about. Stick around to the end of the show. We'll reveal how you can be our next guest. And now, let's engage. Hello and welcome to People Strategy Leaders Podcast. I'm Sri Chalapha, your host. Today, I'm joined with James Lawrence.

[00:00:55] James Lawrence is a serial entrepreneur with a passion for cultivating great workplace. And empowering people. He's currently the CEO and co-founder of Happy Companies, an AI enhanced coaching platform. Within more than 25 years of being a CEO and founder, James loves to share his insights on leadership,

[00:01:14] organizational culture, and the intersection of technology in the workplace. He believes the cornerstone of every successful organization is its people. James Mission is to help people who love their work and get connected with their teams. Because in his words, where people work better, we all been together.

[00:01:32] Welcome to the show, James. It's a pleasure to have you. I'm sure you thank you very much excited to be on here. So you have a very interesting background. I noticed there's a lot of things you've done in life.

[00:01:42] But at this stage, you started this company Happy Companies, which is very fascinating in AI, in coaching platform. Can we talk a little bit about what led you to start this technology startup? Yeah, sure.

[00:02:00] I'm going to take you back to my first couple of stents as a CEO's. When I was in my 20s and probably my early 30s, I was hard to admit this, but I might not have always been the most emotionally intelligent CEO he'd ever seen.

[00:02:14] And it was important to me to learn how to be more effective. I found an executive coach, Johnman by the name of John Delmatov. And John was a huge part of helping develop awareness, self-awareness,

[00:02:27] how I could work better with others, how I could build improved my relationships with my leadership team. And John was fantastic, but there was just one of John. And we tried to take my work with John and expand it to the entire organization.

[00:02:42] And at the time we had about 70 employees. And I found how difficult it was at scale to create any type of leadership, or executive coaching, or manager effectiveness. And so that was 15, 20 years ago. But I had in my head just how do we make this better?

[00:02:59] And especially the youngest manager, all right, I would say the newest manager. Typically new managers don't get a lot of training. They just get thrown into the fire. And so how do you make the new manager more effective?

[00:03:13] And I've been thinking about that for a very long time. I've run five different businesses. And I had sold a company back a few years ago, and I thought,

[00:03:22] I was 45 years old, and I thought, I'm going to spend the next chapter in my career at trying to work on this problem. The good news is that everybody has people, challenges, and every company that exists in the world. So there's plenty to work on. Yeah, yeah.

[00:03:38] Now, this is excellent. The one thing that you were talking about earlier before we started recording this podcast is not all CEOs think the same about their culture. And you said something that was very interesting. And I wanted to ask you about it.

[00:03:53] You said the inner world CEOs really prioritise their culture even at the expense of maybe short-term profits. Look, Kate, talk a little bit about that. What does that actually mean? And why is that important? And is that what led you to put together this platform

[00:04:08] that could be a catalyst for these innovative CEOs to drive better culture? Yeah, sure. I have the benefit of a pretty good network of leaders that I truly respect. But one of the benefits from being involved in happy for the last three years

[00:04:24] is the amount of leaders I've got in a chance to meet and talk to. And there's a lot of different leadership styles. And I think there's a lot of different pathways to success. There's not just one style that's the best leadership style.

[00:04:37] But I will say, I think one of the things that I feel very strongly about is innovation isn't just products. It's not just R&D. It's not just technology. It's not just the software you're building. But understanding, like prioritizing your people as an actual asset

[00:04:53] at the organization to meet that's what a truly innovative CEO does in 2020 for it's valuing people differently. And I'll say going all the way back to even the 1970s, 1960s I would say great organizations have always valued their people. But I think it's different now.

[00:05:14] I think it's harder to run a company. It's harder to be a CEO today than it was back in 1970 or 1960. And so it's really interesting to me that some CEOs and some leaders is not just CEO as with some leaders and managers prioritize short-term wins.

[00:05:30] And this is nobody would admit to this, but this is actually what you'll hear. You'll hear, I've just got to ship this product first. And then we can start working on this people stuff. Or well, here, I've got to hit my numbers. Which is important.

[00:05:47] Don't get me wrong. But when it's a reason not to invest in your people or not to invest in the right support staff or invest in the right HR resources, I don't personally think that the best sustainable long-term growth comes from that kind of thinking.

[00:06:02] I think that people have to be in the conversation from day one along with the products that technology and machinery, the intellectual property. This is fascinating. You actually said something that I have not heard before. At least nobody said it before.

[00:06:19] Is that it's hard to be a CEO today, then it was 20 30 years ago. Talk to you a little bit about that. What makes it harder now that wasn't the case two, two, three decades ago? I'll start with this. I think it's harder to be a CEO,

[00:06:35] but I also think that a lot of the changes that have occurred in the world of work have been for the better. So one is hybrid and remote work has made creating connection and creating manager, employee relationships more challenging.

[00:06:55] I think that's especially true in workplaces that are hybrid, they're remote, they're in person and they're multiple locations. So now you've got multiple cultures being created at one time. You've got employees that are in the office with you.

[00:07:10] You have employees that are in the office sometimes, but not all the time. And then you have employees that are remote that move to other locations. And if your company is supportive and facilitative of that kind of hybrid work,

[00:07:22] which's not like you can just walk in the office next door and talk to Bob or Megan. But it takes more intention and I think building your cultures a CEO takes more intention. If you believe in getting your team together, it takes an investment of resources

[00:07:36] and this takes money, it takes planning, it takes time. So I think that's one aspect is just the future of work that we're living in today. It's just hard to create that connectivity and that organizational culture is a little harder to get to.

[00:07:50] But I think the second thing is that people want more flexibility today than they did 30 years ago. And I think that's okay, but flexibility means like you have to be very intentional about creating a highly functioning organization. And I'll give you a quick example.

[00:08:11] The way managers have been trained at many companies is very organic. So your manager is trained not intentionally because they went through manager training. It's because someone handed you five employees and said, okay Kevin, your manager now. And you look around and you go, okay, I'm managing now.

[00:08:35] And then the problem is that when you're not next door to your boss, you don't tend to walk into her, her, his office is regularly and go, what do I do? And your support system is not as available all the time.

[00:08:49] Yeah. Especially if people learn different times zones. And so I think part of the impetus behind creating happy was like, how do we improve the manager employee relationship in a world where managers are getting less training than they ever have?

[00:09:02] And I know I gave you a long answer, but I think that's why it's harder to be a CEO today is because even the organic development that we were doing with managers five years ago, even isn't happening in a lot of cases.

[00:09:17] So managers are just left to figure things out on their own. And that's not fair and it's also not a way to get great outcomes. Yeah. Yeah. You learn so much from the term I've heard being used as Moses by being in the right environment.

[00:09:31] You just learn from observing and talking and having this watercolour with a more senior manager or with your manager sometimes as well. But just by observing other discussions that I've taken place and then you realize why that relationship really succeeded

[00:09:46] and your relationship could use some help and you can learn from that and apply that to your relationships at workplace. And that's definitely the problem because you're on the Zoom call today long or on call.

[00:09:58] You know what's going on in another part of the organization unless you're part of that call or part of that email thread?

[00:10:05] Yeah, and that's not even to say and again I'm not taking a position in any way that's saying that hybrid work isn't positive in some organizations or a positive to people. But I will definitely say that osmosis, you know happens less frequently unless you're really intentional about it.

[00:10:25] And then when you combine that with the fact that managers and people are busy than they've ever been. That's like a tough one to three combination when it comes to really enhancing manager effectiveness, especially newer managers.

[00:10:38] Yeah, manager effectiveness is a favorite topic of mine actually because they have a core pillars of every successful organization is to have effective managers. And I'm not talking about the senior managers obviously you know that's important but it's the junior managers that's your foundation for a strong organization.

[00:10:56] So talking about that, your company to start up that your that you launched is built to build those foundations in every organization. Especially organizations that are hybrid or remote.

[00:11:07] So talking a little bit about really what led you to say this is the problem I need to solve and what led you to do that and what was the problem that we're talking about. What was the problem that you really tried to solve here.

[00:11:18] If you just talk to leaders and you just talked to managers what you'll find is that they want more guidance, they want more coaching, they want to learn it's just not offered and I was talking to a senior leader last week and he framed this up.

[00:11:32] I'm not going to name him but he framed this up in a really appropriate way and he was explaining that his organization puts most of their resources and investments into sales training.

[00:11:43] He said, look we've seen the the biggest benefits and gains in investing in our sales organization and they've been queen best acts.

[00:11:53] We get why and we invest more and we get more and I said okay what about your people what about your people investments and he said that's just too hard to do it scale.

[00:12:02] He goes we brought in seminars and consultants and we've gotten some wins we brought some coaches in for the leadership team we got some wins there but he's in terms of helping the whole organization.

[00:12:12] And so that actually even though that just happened last week that is the kind of thing I heard a lot when we were developing happy and the concept buying happy which is like.

[00:12:22] Actually making meaningful change in our organization at scale and doing it in an affordable way where it's got good ROI that's just doesn't have hasn't existed.

[00:12:32] And we feel like with a combination of behavioral science and AI and frankly our user interface which we put a lot of effort in creating like a really easy to use plugin and it works natively in the flow of work like these are the things that people are looking for.

[00:12:46] And so that's I think when essence like we felt like there was a whole in the market and an opportunity for it. So is this primarily geared towards. For some managers or other use cases that you're trying to solve it.

[00:13:00] Actually yeah, let me explain to you how happy works and I think it'll give you some contact so can you give me the name of someone you work with. Any name. Well, you okay.

[00:13:10] So let's take William and so let's pretend you and I and William all work together. And so if the three of us are working together and we have a happy workspace.

[00:13:19] Happy learns how we like to work in communicates so it learns how William likes to work it learns how I like to work in communicate it takes about five to ten minutes to take our initial assessment the platform. But once happy learns well you have an eye.

[00:13:33] Let's say that we both work for you you are boss and we were going to have a meeting with you tomorrow to pitch you on a big idea. I could actually go into happy and I could look up how to pitch you an idea.

[00:13:44] I could say I'm a pitch tree an idea and I need to get some tips and it will give me tips on how to pitch you an idea.

[00:13:51] If William went in the same day and got some tips on how to pitch you an idea, it would give William an eye different advice because William and I are not the same person. So it knows me and it knows William and it knows you.

[00:14:06] So when it gives me advice and how to pitch you an idea, it considers my work style how I work and communicate. And I'll give you an example. Let's say you were a data person and you loved data.

[00:14:18] And I was a type a personality that would come on strong. It doesn't use data at all. It would say James don't walk in and give a hardcore pitch at 10,000 feet with no backup and no data. Comprepared with some facts and data to support your argument.

[00:14:37] Now let's say that William was already a data person. It would be a real waste of time to advise William to prepare data when he already prepares data. That's already what he does. What it might say is you insure both data analysts.

[00:14:54] Be careful of getting bogged down into many details. Start with a brief overview and then bring some data to support your points. So what happy does that scale is just what any good coach that which is better both people in the equation.

[00:15:10] So to answer your question, it actually we have a lot of CEOs that use happy a lot to work with their team because before they go into a meeting a phone call or an employee review, they can use happy to get some on-demand coaching.

[00:15:24] But the other things is that happy provides a daily coaching every day. So it's a continuous learning model. So every single day like William might get a piece of coaching on how to work better with you.

[00:15:37] And so we're just slowly nudging William with some very bite size pieces of coaching. So if you guys do slack or Microsoft teams, it would send you a slack or teams message with a bite size piece of coaching that was personalized for you on William. That's excellent.

[00:15:53] And is it like listening to your meeting calls or emails? So how does it know what to coach you on? Yeah, good question. So it's not so that's down the road map farther.

[00:16:04] We're going to have some additional modules that we're developing that are going to that will be able to provide some like in conversation assistance. But right now we use the behavioral science to get an understanding of who you are.

[00:16:20] And at that point, we understand William where we understand you and then we use the contextual kind of like information we know from you like I'm going to have a meeting with William I need to pitch them an idea.

[00:16:32] We're not listening to the conversation necessarily and interrupting it at this point. But at some point down the road, you start looking at what this might look like in two years.

[00:16:42] I think people have a vision that might include might include some more interactive opportunities right now we're trying to work on the blocking and tackling. But I think we think eventually before you send William and ask the email it might be good to go hey.

[00:16:57] Are you absolutely sure that you want to send that email? Here's a couple different ways you could write that and by the way you have no data points in this and you're pitching them an idea. Yeah, yeah or I can write the email and have it tell me.

[00:17:10] Right, not the right phrasing you should use. Yeah sure.

[00:17:13] Let's talk about the workplaces right we talked about the challenges of being a CEO today there's the big one is obviously going hybrid and remote and having those challenges the other big one is rapid change of economy the economy goes up and down every year it wasn't the case.

[00:17:30] Even even ten years ago, we would have changes literally every year different and unpredictable. We don't know what 20.25 looks like and no CEO of what their solve can actually claim that they know what 25 breaks.

[00:17:45] They may not even know what inflation brings even the best researchers and economists can predict and these things and and when they do they're usually wrong.

[00:17:54] But with that in mind, what are some of the challenges in the future do you anticipate that the CEOs and leaders have to plan for in as they're building out their organizational culture and and overall effectiveness of the organizations.

[00:18:10] Yeah sure. That's an interesting question I think part of my response would be it's obviously deeply dependent on the type of business that you're leading or the department you're leading and so I try to be very aware I think sometimes.

[00:18:23] You know. Office work or information workers it's easy to focus on what that world looks like and then there are people like that are manufacturing that are building cars that are engineering parts and doing collections and making phone calls and baking food and doing all kinds of things and I think the world that we live in which I would call more of the business professional space which is people that are mainly doing information work.

[00:18:51] We become a world economy and so I think when you start looking at 25 26 27 28 I think one of the important things is where's the work and I get done.

[00:19:00] And then how do we even build an organizational culture that involves international work we've already obviously there's a lot of not just remote work but there's a lot of contract work available out there and so I think for a leader.

[00:19:14] The question in the next two or three years is going to become how do I tie all of these things together and if I have the engineering team that's in Ukraine and I have my sales teams in St. Louis and I have 25 people in my office here in California.

[00:19:34] How do I weave this culture together and how do I weave my Ellen D. P's how do I bring along all of my managers and employees and continue to upscale them and invest in them given they may not all be on a lean one place it may not all be in one country.

[00:19:50] And I think we're going to see that more and more. And so I think that when in the business professional world certainly large companies are already working with that. You look at a company like Microsoft or Apple they're already operating in 30 to 50 countries.

[00:20:05] But I think that's actually become much more common in smaller businesses now because if you want to hire a graphic designer you might not hire a graphic designer in the US. Yeah, yeah. So the whole concept of employees might actually be a little bit more fuzzy.

[00:20:22] They have fractional people who have bring specific skillsets for a specific project or projects and then they may go away and then may come back year down the road six months down the road or may not.

[00:20:36] So then you have to work with how do you keep your culture intact when you have people like that in your organization as well.

[00:20:43] Yeah, just a plug that is that's another piece I didn't mention absolutely and then someone might be plugged in for six months for project and and rotate back out and how do you still create meaningful organizational culture and value even in that environment.

[00:20:58] I like to talk about this concept called organizational DNA and this nothing gets fixed right away everything takes longer than you think it's going to.

[00:21:09] And so even if you have a like we work one thing I would say or share with you is we do believe in human coaching.

[00:21:15] We work with a lot of human coaches consultants and consulting groups that work with happy because the human coach is actually an incredibly important part of this. A human coach is actually the last mile to what we call it.

[00:21:31] And if you can afford human coaching there are a few substitutes from working with a skilled leadership coach every day.

[00:21:37] The reality is that for an organization at scale they're not going to invest 5,000 or 10,000 dollars or 20,000 dollars a year for every single employee for leadership coaching and they just wouldn't be able to and that's where happy comes in with being able to do it at scale and add some meaning the value but.

[00:21:54] When I start talking to some of the leading coaches out there one of the things that they say to me is when you are trying to build a culture it isn't something that you flip like a light switch.

[00:22:10] It just doesn't even if you're you have the best of intentions something that took a year or two to go downhill might take a year to or three to repair organizational trust just it takes time.

[00:22:21] And so we tell our leaders to be patient and just to be consistent consistently caring consistently investing in their people. Now it doesn't just happen right away.

[00:22:31] Yeah, there's so much noise out there you got to cut to the noise of that too and you got to repeat and that's the big thing that I realized over the years is just a little one doesn't happen you have to repeat constantly and reinforce behaviors that ultimately rebuild your DNA because you got to sometimes rebuild your DNA.

[00:22:51] As an organization as you evolve. So what is the future of happy companies look like what as you look at the future of organizations where do you see your organization helping.

[00:23:03] These organizations in the future to default I think the first thing is what we're really trying to do. Is be invisible or be very lightly visible and so what that means is that we want to teach people how to work better with their coworkers and their managers.

[00:23:28] But we want to do it as lightly as possible right in the flow of work inside the tools that people are to use every day.

[00:23:35] So it's too much to ask someone to log into another platform and go through a whole you know bunch of menus to go find something. And we want to work right lightly inside the tools you're using and so if you're you talked about William that you work with.

[00:23:52] And if you and William are having a frustrating conversation and slack boy I want to be there with some coaching and some health and some support just natively within a couple hours that conversation happening just as if you went to a great leadership coach.

[00:24:07] And then I think the second thing is outside of kind of the flow of work part I think data organizations want to understand how they can make meaningful change and one of the themes in HR tech and in company somewhere ours of what we're trying to do is how do we take data.

[00:24:25] And we've it into helping an organization understand what kind of meaningful change they got and I'll give you just a very simple example that's fascinating people when I demonstrate this we. Keep track of the type of coaching that's rendered but it's really fascinating to watch someone's journey.

[00:24:46] And how they start for example you see them have a meeting and they had a meeting with William and then two hours later coach topic at access that said.

[00:24:56] How to work through a workplace conflict that came right after that meeting and there's just a lot of meat in that data now.

[00:25:04] I think it to be careful with that because there's some psychological safety and that I can't be telling your boss that you had a meeting with William and then now you're upset with William because that's not fair to you because you would need to go to your boss and share that.

[00:25:19] But what I can tell you is. How are meetings how does meeting and coaching intersect in your organization and I'd say we get signals that your meetings are ineffective.

[00:25:33] When you're senior leaders in this division have meetings typically they get less than optimum outcomes because people are reporting stress conflict and challenges after meetings. So we can start to look in an organization and we can start to go okay we've got you know 12 divisions.

[00:25:52] And this particular subset of the organization has some challenges in this area. And I think painting that brush gives leaders and HR teams an understanding of wow.

[00:26:03] We need to recognize that we might need to work on more effective meetings in this group we've got a group of 500 people that just do not have effective meetings it could be technology it could be their meeting culture.

[00:26:13] There could be certain things about the way that they're interacting with each other that aren't healthy. And so we need to be able to take that synthesize that and then distill that until some meaningful advice for the organization.

[00:26:23] Now I would say that's probably two years away to be able to do that really effectively. But you have an organization in three or four thousand people or more it's really useful to get advice like that.

[00:26:34] Yeah, yeah and obviously we all want happier cultures and happier workplaces because people don't. deserve to work in unhappy workplace is that my fundamental philosophy that I believe that people need to be in generally speaking you're not going to be.

[00:26:51] On a scale or 10 or 10 every day but most days he should be feeling good about your work and I think it too like yours could definitely do that at scale and build those happy workplaces so thanks James for being on my show and I appreciate the work you're doing.

[00:27:06] Hey, thank you very much. You had some great questions. How do people reach and learn more about you and your work?

[00:27:14] Happy companies dot com is the easiest way and you can look me up and if you have any questions I'm on LinkedIn all the time so you can reach me up on LinkedIn and chances are not I will respond to you. Thanks James.

[00:27:28] Shree Chalapa here. Thank you so much for listening to the people strategy leaders podcast if you are a successful leader or a people strategist who would like to be on this program. Please visit engage at lead dot com slash people strategy leaders podcast.

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[00:28:17] And thank you to Patrick Gramsie, sound engineer at Kalinga production studios for recording and mixing this show.