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People Are the Strategy: Building High-Performing Cultures in the Middle Market
234 Plays20 days ago
In this episode, Doug Farren sits down with Laura Cooke of Positive Foundry to explore why talent management has shifted from an HR function to a core business strategy. They discuss how middle market companies can build high-trust cultures, develop manager effectiveness, and navigate the challenges of a multigenerational workforce. Laura also shares her perspective on AI's role in the workplace and why human connection remains irreplaceable in learning and development.
To learn more about Positive Foundry, visit: https://positivefoundry.com/
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Transcript
Introduction to 'Market that Moves America'
00:00:02
Speaker
Welcome to the Market that Moves America, a podcast from the National Center for the Middle Market. The center is the leading source of knowledge, leadership and innovative research on the middle market economy. Throughout our podcast, we will feature middle market leaders and stakeholders to hear their real world perspectives on trends and emerging issues.
00:00:24
Speaker
Welcome to the market
Workforce and Skills Gap Focus
00:00:25
Speaker
that moves America. My name is Doug Farron, executive director of the National Center for the Middle Market located at The Ohio State University Fisher College of Business. Today's episode is about an evergreen topic in the middle market and really any business, which is people, talent, workforce.
00:00:44
Speaker
I'm really excited about the discussion because as we've seen over the years, workforce and talent and skills gap issues and culture all things that middle market companies continue to wrestle with as they manage their growth, rapid scaling, implementing implementation of new technology. So ah we are pleased to welcome Laura Cooke from Positive Foundry on this episode. Welcome, Laura.
00:01:09
Speaker
Thanks so much for having me. I'm glad to be here. So can you first start by telling us a little bit about yourself, your background, and about your organization, Positive Foundry?
00:01:21
Speaker
Absolutely. So I am a mom of four girls. I'm a wife to one for 30 years and I love business and I love learning. So my husband and I started Positive Foundry almost 10 years ago. We really got into it about seven years ago.
00:01:36
Speaker
And our goal was to reverse the trajectory of well-being in the United States because we think it's going in the wrong direction. despite the increase of science and research that really should be leading us in a more positive direction. So Positive Foundry exists to help people first leaders use learning and development to foster positive cultures and equip every member of their team with the skills to
Better Yet Platform for Skill Development
00:02:02
Speaker
flourish. And we have a training platform, which is called Better Yet, and it's designed to allow internal champions to share a weekly topic with their teams one of the 12 skills to flourish. And then they follow a model of learn, connect and practice where they share a micro video. That's the expert in the room. They have thoughtful dialogue questions to to that are designed really to help people connect and share with each other. And then they'll have some form of a practice that process then repeats weekly for a year. So it's a way to do deeper training, but it fits into the cadence of a weekly meeting.
00:02:36
Speaker
And we really believe like when individuals flourish, organizations flourish. When each of us shows up at our best, we're going do our best work. And organizations are only as good as the people who show up every day. So ultimately, we're trying to drive positive business results through helping people show up better, gain self-awareness, and also connect with their team and build trust.
00:02:56
Speaker
So do you work with businesses of all sizes or do you tend to focus on yeah so like Have you found a sweet spot in other words? I mean, I know this is these are topics that all businesses could benefit from, but Do you have kind of a sweet spot with your client base?
00:03:13
Speaker
Absolutely. we i mean, we work with companies of from seven employees all the way up to 15,000. But really, our sweet spot is probably between that 100 employee and 5,000 employee mark where they've got an ah HR department, but they aren't necessarily creating all of their own programs. And they're looking for outside partners to help them.
Talent Management as a Strategic Lever
00:03:34
Speaker
Yeah. Yeah. So in your experience, let's just start with kind of like, what are you seeing right now across the talent management landscape? And and maybe more particularly, how has it changed over the last four to five years? A lot has changed.
00:03:49
Speaker
But I'd be curious to hear your thoughts on like what you're seeing out in the space right now. Yeah, that's it's such a good question. um When i what I see is that talent has really shifted from being a support function to more of a strategic lever.
00:04:06
Speaker
Like a few years ago, I feel like leaders were focused on hiring and engagement scores. And I think today people are asking, do our people have the capacity to perform at a high level?
00:04:18
Speaker
And I think that um all the research backs it up. You know, managers account for roughly 70% of the variance in team engagement. So if your managers are burned out or underdeveloped, performance suffers, engagement declines, team engagement declines, and ultimately people leave the organization.
00:04:35
Speaker
So I think that um organizations that are prioritizing well-being are reporting higher retention, stronger business outcomes. And so leaders are really connecting those dots.
00:04:47
Speaker
I think that we're moving from engagement to more of an energy focus, like our mental and emotional capacity. We're moving from like perks to skills, trying to really invest in skills like resilience and emotional intelligence.
00:05:02
Speaker
And then I think we're moving from being hr owned to more leader owned. I mean, manager effectiveness is really the business issue and today. And, you know, the middle market has an advantage because they're nimble enough to embed these human skills into the rhythm of work.
Culture and Managerial Influence on Retention
00:05:20
Speaker
Yeah. And how does ultimately all those things you just described, what does that mean for things like retention and career development, succession plan, like These are issues we hear about all the time. it's you know It's such a challenge when there's competition out there for really good talent. So the things you just mentioned, how does that impact it?
00:05:42
Speaker
Well, it's you know if you think about it, we we often talk about like comp and benefits as being the reason why people stay at an organization. but But you and I both know it's really about how someone feels about the company, how tied they are to the vision, how tied they are to their manager and the people that they work with. Because people work for people.
00:06:03
Speaker
So people are engaged and stay at companies because of other people. So the job duties are important because they want to feel successful. But in a lot of cases, they can go a lot of different places and do that same job. So the differentiator is really the culture of the organization. And that's really directly tied to the people and how they treat each other.
00:06:23
Speaker
And that's where I think that like manager effectiveness, you know, when people feel seen, heard, valued, supported, developed by their direct leader, then they are more likely to want to stay at the organization. And also the same like high trust environments increase that discretionary effort and reduce burnout because when people feel safe, they are going to be more likely to stay and be really, really engaged. So it's all just comes back to the people and how they show up every day.
00:06:57
Speaker
are Are these types of training programs and and really setting up a business for the environment, for all of that to be successful, do you find that that is done formally with things like training, development class, or or is it really more about this the behaviors and the mindset and the you know maybe it's like the um how the leadership shows up and the way they they support things? what What has been your experience?
Training Programs and Desired Behaviors
00:07:24
Speaker
So I think it's all of that. Like, it's all of that, right? it's it's It's the culture, it's the behaviors of the leaders, but ultimately, it's whether it's formal or informal, I think the goal is how do we help everyone understand the behaviors that we want in an organization and then show up and behave that way. and there are so many things that get in our way. You mentioned like mindsets or there's so many challenges in the world today. And I think that when we pause and give everyone a chance to like take a breath and learn together, it's for me, I really think it's like magic. So I do think that the companies that are investing in learning and development and using that as a way to
00:08:13
Speaker
scale their people development and develop these whole person skills are the ones that are going to see the most success. um i And I also just think that when people feel invested in, they're going to, draw it drives a sense of loyalty and then they can see a future version of themselves inside the organization.
00:08:34
Speaker
But all of that, you know, whether it's sort of prescriptive or not prescriptive, and I think I've seen it successfully done in both or in both ways inside organizations, i think that it's it's about setting clear desired behaviors and then giving people an opportunity to show up that way. And then sometimes I think that there's a skill gap and that's where learning and development comes in.
00:08:58
Speaker
Yeah, sure. um One of the observations that we've had over the years when we've looked at these issues across the middle market is, and it's a phrase that we oftentimes as we're describing, you know generalizing middle market companies is a lot of times they've been successful because there's been this laser focus on running the business. Like let's do what we do really well.
00:09:23
Speaker
We may be a you know niche player in our industry, but what we do, we do really well. And what that turns into is the leadership oftentimes focusing in the business and not on the business.
00:09:36
Speaker
And so at the top, when you mentioned about thinking of these these topics more strategically, what are some ways that you would suggest for leaders to do that? Or do you have an example or two that you could share where it's been really been maybe even a shift in mindset from you know treating these types of issues as like, oh, that's just an HR function to no, this really has to become embedded and how we run the day-to-day?
Designing and Practicing Organizational Culture
00:10:02
Speaker
That's such a great question. i think um it's interesting because you know certainly the laser focus on the vision and execution is important, but ultimately you have to get the entire team rowing in the same direction and you have to get them happily rowing in the same direction and wanting to contribute.
00:10:25
Speaker
And the organizations that I see that are investing in emotional intelligence, for example, or um and one of the skills we teach is is um along the lines of emotional intelligence is master your stories. So if we can start to think about the stories and that we're telling about other people inside the organization and unpack those in a way that we can transition those stories to be more to drive more positive outcome, we sort of unlock that challenge that we have um in in people and teams sometimes. And I think that when you think about culture, you know,
00:11:09
Speaker
It's interesting that I think sometimes people think culture is just, it just exists, but I believe it has to be really designed, defined, like practiced. And it's not about like setting the vision or posting the company values on the wall. It's about how the people behave and And if we don't take time to give people the opportunity to unpack how they're behaving, understand their, from a self-awareness perspective, how are they showing up and then find ways to relate better to each other.
00:11:45
Speaker
I think we're really missing um and a real opportunity and I don't think that um that's going to lead to the best success. you know Trust and relationships are the key for success in organizations. And I think we get to that quicker and it becomes a competitive advantage. So one of the ways that our program does that is when we bring people together to connect on a weekly basis on a human being topic. on So, for example, like, what do you think about when you think about what you're grateful for? What do I think about when I think about what I'm grateful for? And when we connect on a human level, we start to see each other differently and we build trust.
00:12:26
Speaker
And we know that when we have high trust, we make faster decisions. And we've seen that across the board in the companies that we work with. So we see an increase in personal well-being a result of our programs, but we also see an increase in the feeling of community. and an increase in um trust among the team, which I think is really what it's all about.
00:12:48
Speaker
Yeah, absolutely. that's That's really interesting.
AI's Role in Middle Market Companies
00:12:52
Speaker
Okay, so I'm shift gears a little bit. I want to talk to you about the hottest topic out there right now, which is AI. There's just so much conversation that, you know, a few years ago, it was like this shiny new thing. And we've been monitoring um both the utilization as well as um kind of perceptions and fears of AI across the middle market over the last couple years. And we see the stats just I mean, everything is just starting to increase in terms of, for example, almost 30 percent of middle market companies are telling us that AI is their top investment in their company right now over facilities, over training, over anything else that they're doing.
00:13:39
Speaker
We also saw in our recent middle market indicator that over 50% of companies that are using AI are seeing some elements of that technology replacing people, which we clearly see on the fear side where employees are very skeptical and maybe perhaps fearful that at some point they'll get replaced.
00:14:01
Speaker
um So what are some of the, I guess, practical issues around AI that you're seeing and in your work? Yeah, it's so interesting. i mean, it's kind of I feel like it's still pretty early, although it feels like we've been talking about it for many years um to determine sort of what the implications are. um And I think that it's easy to see that a lot of the data driven or repetitive sort of computing jobs will be replaced by ai but And AI can also remove administrative burden.
00:14:32
Speaker
I think it frees human beings for the strategic, empathetic, more high-value work. So I like thinking about instead of like, what what can AI not replace?
00:14:45
Speaker
Like AI can't read a room. AI can't make introductions. AI can't reach out to people. AI can't do the... highest value work of leveling people up and helping them work better with other people.
00:14:59
Speaker
So what ah what we've seen, and I love this about AI, is i think it has an ability to help us understand other people and we can use it as a thought partner for people challenges we have. So for example, if you're having a challenge approaching your manager you can ask ai giving it all of the personality traits of your manager, for a new way of sharing your problem so that they can hear it in a way that will put them into problem-solving mode instead of defensive mode.
00:15:35
Speaker
And so watching young managers, you know, when they step into roles, they think they're going to change someone on their team. And I think that's just such a naive belief that we can change other people. If we want to change the outcome of something, most of the time it has to do with changing our approach or changing ourselves. And AI can help us make that modification for ourselves. So I think that's a really great way to use AI. And I also would just say, I think that human beings are are going to be needed forever. And for every job that's displaced, I think that humans will level up and find new, better jobs so that the net will be a lift for business and society and even more opportunities for humans to do that deeper thinking work.
00:16:23
Speaker
You're right. Yeah, I've seen applications of it where, to your point, like feeding in a bunch of information to create what are known as smart performance objective goals. Like a lot of people struggle with writer's block of like, oh my gosh, where do I get started with making something specific, measurable, actionable, realistic, time bound?
00:16:48
Speaker
You could feed all that hand and get a really good Now, again, you have to massage it and edit it and all that, but That's been very helpful. I mean, I think even writing your own performance review or, know, writing your team's performance of value, it's very helpful. Yeah. I see it as an accelerator for a lot of those activities. To your point, it's not replacing my own observations, but it's just helping take away some of the basic elements of that and allowing me to think about the really more impact impactful pieces and
00:17:21
Speaker
So thank you but you're any thought are there pieces of AI that you see that could be helpful in learning, development, culture building? Like, are those things that could be down the road, do you think?
AI as a Thought Partner in Development
00:17:34
Speaker
You know, that's interesting. i mean, we're using, we are finding ways to use AI to improve some of the things that we've created. So I do think using it as a thought partner will be continued to be it'll be continued to be used that way.
00:17:49
Speaker
um i think that some organizations are already using it for learning and development, for training. the the fear that I have about um about that is, and the one thing I'll just say in my in my eight years of running this business that what we have discovered is that if you have a learning and development program that doesn't have human interaction involved, and I'm not saying human interaction in that you're required and if you don't check off the box, you know, yes, responsibility, accountability is important, but it's more of like that the having a conversation around what you're learning
00:18:26
Speaker
I just don't all the research shows. and And I also really believe it just doesn't stick. It doesn't help people learn. So AI, I think even in the learning and development space will be a thought partner, an element.
00:18:41
Speaker
um But I don't think it will ever replace the human human conversation because perspectives are changed by having a conversation. You know, light bulbs go off in individuals because of the feeling that they have and the human connection. It doesn't happen through AI.
00:19:00
Speaker
Yeah. Yeah. Yeah.
Generational Expectations in the Workplace
00:19:04
Speaker
Well, this is a good segue into another topic I wanted to explore with you, which is we are at a point in time where any business might have the potential to have up to four generations of people working together at the same time.
00:19:21
Speaker
And so I think it just brings up a lot of interesting dynamics with how you have to potentially customize or change messaging, the approach, the things that are important to, you know, baby boomers, obviously much different for Gen Z. Like, what are you seeing with how that dynamic is playing out? And are there considerations that have to be taken when you're trying to manage a culture that may contain yeah again,
00:19:50
Speaker
across 50 years of people, right? then Those are big challenges. What what do you see there? Yeah, we're seeing that a lot. And that's part of like the beauty of the program that we run is we are kind of forcing those generations to partner up and have a conversation on a weekly basis. So we're building connections that I think need to be built because a lot of times there's just very different viewpoints or very different belief systems as they approach a topic. And so a lot of times that is addressed through dialogue and conversation. And I think that increasing conversation in the workplace is key to that sort of melting pot of generations that we're experiencing. I also think that newer generations really have an increased expectation
00:20:40
Speaker
for their learning and development. Like they come in with this assumption that they're going to have opportunities to learn, grow and be challenged. It doesn't matter what level they enter the organization. i really believe that newer generation is is just an expectation. And so we have to find a way to give that to them and to give that to them in a way that it's actually leading to them learning and upskilling versus um just doing something online.
00:21:07
Speaker
I also think that the meaning that the sense of meaning that is expected by the newer generations, like they want to know that they are a part of something that matters. And I also think that in a lot of cases, they want to see the behaviors that are in line with the values, like the values on the wall are not good enough. They want to know that the culture is there in their behaving in line with the values. And they want real leadership. They want feedback. They want transparency.
00:21:41
Speaker
So there are a lot of expectations of the newer generation in particular. But as I was thinking about it for this podcast, I was like, you know, middle market companies really have an advantage because they can offer opportunities to stretch.
00:21:55
Speaker
They can give people access to senior leadership and make development sort of explicit, right? creating these structured pathways for growth, which really help all generations. So yeah an advantage to be in the middle market.
00:22:09
Speaker
Yeah. Oftentimes there's a lot less formality and um yeah kind of an all hands on deck approach where, yes, your, your role may be this, but you're often asked to participate and help with so many other things. And that's what I've told my students over the years here at Fisher is, you know, these are really great environments because,
00:22:29
Speaker
To your point, it does provide all the things that that new generation is looking for. Something that matters, like access to top leadership, doing interesting things. They don't want to be like stuck in a cube for two years, just crunching numbers and you know being isolated. It's all about that collaborative kind of team approach, which is which is really cool. Do you think there's less patience with this newer generation?
00:22:54
Speaker
I mean, all the research says so, and I don't know about you, but they say we have like an eight second attention span at this point in our life. Yeah, absolutely. I mean, we we all want things delivered and we want them delivered right now.
00:23:08
Speaker
Right. mean, it's just the new the new way of life. And so i think it's hard for companies to adapt. But I think a lot of middle market companies are doing that. Well, I've just seen examples where it's like, hey, I got my degree.
00:23:22
Speaker
I got this great job. I expect certain things to happen very quickly. Like I want to be promoted, promoted. for So ah I guess my question was around like the impact that that has to the career development um discussion and expectations and how that needs to be managed effectively as well. Because i think, you know sometimes the wrong perception can be given that, oh yeah, there's this all this opportunity, but it doesn't mean you're gonna be the CEO in five years. Like you still have, there's still value
00:23:53
Speaker
to rolling up the sleeves and getting all the experiential learning that, you know, having tenure actually does provide. Yeah. I mean, definitely that, that clear career pathing is critical for organizations if they want to retain great talent, because they've got to know how am I going to get there?
00:24:11
Speaker
Everyone's coming in with that. Absolutely. Yeah. Yeah.
Investing in Development and Leadership
00:24:15
Speaker
Well, these have been an awesome topics. I mean, we could keep going on forever, but if I just to, as we kind of conclude, If you were to give advice to middle market companies who might be listening to this conversation about how they might improve, strengthen, think differently about their own talent management strategies in the next year or two, what what would you tell them?
00:24:38
Speaker
Well, I'm a little biased because you know I run a learning and development company, but I would say ah invest in learning and development, but particularly learning and development that builds connections among the team.
00:24:52
Speaker
So I believe empowering managers to train teams and giving teams an opportunity to get to know each other is really the key. i would also say invest in culture, measure it, measure it. Check in on your teams and the work environment so you know how people feel and then openly address the challenges that there are and then work to improve it. Because people work for people. And if we want to attract the best talent and retain the best talent, we have to show people that through the behavior of the team. So investing in leaders and managers as they set the tone for the rest of the talent, and then investing in the team, encouraging the lived values, that positive work environment, focusing on the core purpose of the business, and then the relationships that actually make the purpose come to life. Because I think it's all about relationships.
00:25:45
Speaker
And final question, what gives you the most optimism that that's actually going to be successful, that we can build these relationships and people-focused organizations to help drive success?
00:25:57
Speaker
I would say the what gives me the most optimism, especially in the middle market, is that now that we have evidence, not just intuition, that investing in people drives performance,
00:26:11
Speaker
then performance and wellbeing are not in conflict, they're actually connected. So I think for a lot of years, organizations treated wellbeing and results as competing priorities, but now we know that from the research that's overwhelmingly detailed that the two rise together. High trust teams outperform. Managers who build psychological safety see higher innovation and employees who feel supported are more resilient and more productive. So I think that middle market companies are paying attention to that.
00:26:41
Speaker
And i think that there's a lot of opportunity to um become more more focused on They're nimble. They can move quickly. um So when leadership aligns around these shared values and builds human skills into work, culture doesn't get diluted when they're growing. It actually strengthens as they grow. So I just think we're not guessing anymore. We know what drives healthy, high-performing teams, and I think organizations are willing to build it.
00:27:14
Speaker
Great. Great advice and great way to to wrap up this conversation. So, Laura, i really appreciate The time, very interesting conversation and love what you guys are doing. Thank you so much, Doug, for having me on. I love what you're doing as well. Really appreciate all of your work and great insights.
00:27:31
Speaker
All right. Thank you. Yeah, for more about Laura's organization, you can visit Positive Foundry and the center has quite a bit of content on people, workforce, talent management related topics as well. And you can always visit visit us at middlemarketcenter.org.
00:27:49
Speaker
Thank you for your attention and we'll see you next time. thank you for listening to the market that moves america never miss a new episode by subscribing anywhere podcasts can be found you can also subscribe to our email newsletter at middlemarketcenter dot