“Fantastic work culture” with Rich Berens CEO of Root

As a part of my series about about how leaders can create a “fantastic work culture”, I had the pleasure of interviewing Rich Berens, author of the new book What Are Your Blind Spots? Conquering the 5 Misconceptions that Hold Leaders Back and CEO of Root, Inc. Rich has a passion for helping organizations create breakthrough approaches to change. He has personally worked with dozens of Global 2000 organizations, including Hilton, Verizon, Masco, Petco, Procter & Gamble, Daimler to help align leaders and drive strategic and cultural change at scale — reaching millions of people around the world.

Rich is a frequent author, thought leader, and speaker on the subject of leadership, transformation, and how to create lasting change. Rich co-authored What Are Your Blind Spots? with Root’s founder, Jim Haudan. In this book they focus on five key blind spots they have seen many leaders fall victim to that prevent them from leading their organizations and engaging their people effectively.

Under Rich’s leadership, Root has been listed among the Great Place to Work® Institute’s top 25 places to work, been named to the Inc. 5000 fastest-growing companies list, and experienced 10 years of consecutive growth. Rich joined Root in 1997 after completing his MBA at the University of Michigan. He worked for Commerzbank in Germany and has lived abroad, both in Germany and Nigeria. He holds a BSBA degree from the University of Washington in St. Louis, where he was a three-time All-American tennis player.

Rich lives in Ann Arbor with his family and treasures time with his wife, Anne, and daughters, Katarina and Mia. In his spare time, Rich attends as many Michigan Wolverine sporting events as he can and is hopeful that his football team will find its way back to past glory. He is also an avid reader and likes to play golf and tennis.

Thank you so much for doing this with us! Can you tell us a story about what brought you to this specific career path?

I wish I could tell you I had this great pre-determined path that led me to do what I currently do — which is leading an organization that helps companies go through change and large-scale transformation — but I didn’t! I studied finance and strategy in school, and that is definitely not the primary focus of my work today. But I was always a very curious person, and one thing I realized quickly once I joined the workforce is that most strategies people create don’t actually get implemented. I was amazed as I saw smart strategies get stuck in PowerPoint decks with hundreds of slides. I realized that making stuff happen takes an entirely different skillset than what I had learned in school. That curiosity and frustration set me on a path to figure out how you can actually connect with people in a meaningful way to bring a strategy to life. And that’s why I came to Root — that’s what we do. And over the past 20 years, we’ve become a pioneer in this very common challenge.

Can you share the most interesting story that happened to you since you began leading your company?

Let me actually tell you a story about leadership that I experienced when I first started with Root. We had an important meeting with one of our big clients — a large and prominent chemical company — and their most senior leader was in attendance. We had brought a bunch of printed materials and used rubber bands to secure them during transit. As the most junior member there, I was a bit nervous and subconsciously was playing with a rubber band, wrapping it around my fingers. Before I knew what was happening, the rubber band flew off my fingers (like a slingshot) and landed smack under the eye of the senior executive who was seated across from me. I heard him say “Ouch” and cover his eye with his hand.

I thought my career was over!

Everyone froze. I was so embarrassed and knew I had made a terrible error.

In my mind I was thinking, “Oh god,” but I said, “Oh my goodness — are you all right?”

How the senior executive handled the situation has stuck with me to this very day. He didn’t make a scene; he didn’t scold me. He simply said, “Nice shot — just be a bit more careful next time.”

And that was it. Everyone in the room relaxed, and we returned to the meeting topic.

If you think about it, we’ve all been there. We’ve all been in a situation where we commit a faux pas. How you react in that situation — especially as the leader in the room — is critical. This executive handled the situation with empathy and forgiveness. That made a profound impact on me — and has stuck with me 25 years later. How a leader reacts matters — always. When I see someone struggling or screwing up, I remind myself to be empathetic and curious first rather than judgmental. I never assume mal-intent. The bottom line is that it always matters how a leader acts and reacts. You never know the long-lasting impact you might be having.

Are you working on any exciting projects now? How do you think that will help people?

Yes, my friend and colleague Jim Haudan (a co-founder of Root) and I just finished working on a book (What Are Your Blind Spots? Conquering the 5 Misconceptions that Hold Leaders Back) that captures a lot of the lessons from our last 25 years of working with leaders of hundreds of companies.

As human beings, we all have blind spots where we see things as normal that, upon further reflection and insight, reveal themselves to be downright stupid. Bloodletting was a standard healthcare procedure for centuries, we smoked like chimneys without contemplating health effects, and even promoted sugary drinks for toddlers as little as two and a half decades ago.

The same goes for leaders, too. In the book we’ve picked five areas where leaders are applying flawed beliefs, shedding light on some of these ineffective leadership practices — and giving tactics to remove our blinders. It has been great fun to share some of our lessons learned with Jim and talk to people about that.

OK, let’s jump to the main part of our interview. According to this study cited in Forbes, more than half of the U.S. workforce is unhappy. Why do you think that number is so high?

Yes, studies show that 50–70% of people at an average company are somewhere between indifferent and disengaged — and that number hasn’t moved much in 30 years. While we’ve made progress with cancer deaths and traffic fatalities, we just can’t seem to move the needle on being more engaged at work. Why? There are a bunch of reasons. For one, leaders haven’t made it a key priority. But they need to. Wanting to be a part of something bigger, wanting to feel a sense of belonging, and wanting to feel as if your contributions make a difference — these are basic human needs. But most people don’t feel these things at work. As a result, going to work is a transaction — show up, do some work, get paid. And that lands you at mediocre output and dismal engagement stats. Leaders who intuitively understand this and invest their time and resources appropriately enjoy significantly better results.

Based on your experience or research, how do you think an unhappy workforce will impact a) company productivity b) company profitability c) and employee health and well-being?

All kinds of studies show that companies with more engaged workforces are more productive or that purpose-driven companies outperform the S&P 500 averages. Intuitively, it just makes sense. When people are engaged, they’re in the game with you — you get their discretionary energy. We’ve all been on teams where we felt motivated to go above and beyond because we knew we were valuable and the team needed us to do our very best. Leaders need to figure out how to replicate these types of environments.

Can you share 5 things that managers and executives should be doing to improve their company work culture? Can you give a personal story or example for each?

1) Lead with purpose, not with numbers. You can’t lead with numbers — you need to motivate others by leading with why you exist and what you’re looking to create. At Root, we’re trying to “invigorate the power of human beings to make a difference.” We’re constantly looking for a better way for organizations to lead, so their people can give their best and companies can be their best too. This is our business, and yes, it leads to financial success — it’s a proof point that the company is working, but it’s not what is driving us. Too often leaders treat being purpose-driven and hitting numbers as two separate things rather than believing that being purpose-driven is a core driver of long-term financial success.

2) Tell a compelling story. If you think about the business world, it’s rife with competition and unexpected market changes — there’s more drama than reality TV! Most companies’ competitive environments and strategies are actually incredibly interesting. But when we go to share our story with our people, it could not be more boring and less compelling in many cases. We default to PowerPoint decks that do anything but engage people. We fail to connect with people emotionally, and therefore it does not become their story and they don’t see how they connect and contribute to it. Many a good strategy has greatly suffered because it didn’t create followers. Yet leaders continue to use the same methods of cascading their strategy that have never really worked all that well to begin with.

3) Engage people in conversation, not presentations. When you create two-way dialogue, people know you care — you’re actively seeking their thoughts and point of view. That’s the basis of engagement. Dialogue is the oxygen of change because it allows people to come to their own conclusions rather than tolerate those of others. That builds empathy, buy-in, and conviction. In one of my meetings a participant said at the end, “This is the first time in 20 years that someone has truly asked my opinion and not just told me what to do.” All too often we just tell people what to do and then wonder why nothing changes.

4) Trust your employees. Do you want your people to do what they think is best to please a customer? You probably do. But do your policies and rules support this? In reality, we often make it hard for our people to actually please the customer. We want to set up rules and procedures so we always know who did what and when and who is at fault. That is not an environment of trust. Leaders need to be really clear on where they have hardlines, but then also be clear where there are only guidelines or no lines and the employee truly has the trust to do what is best.

This point comes across perfectly in the traffic analogy used by speaker and business coach Henrik Kniberg: A four-way crossing can use either a roundabout or an intersection controlled by a stoplight. The traffic signal is a central control — there are very clear rules. If an accident occurs, who ran the light can be easily determined. But scientific evidence proves that roundabouts — or the concept of trusting people’s judgment with some basic rules — are safer and more effective than the concept of completely controlling traffic flow with a traffic light.

We need to ask ourselves why we have such a tough time adopting that core philosophy in our workplaces. Why do we rely on control and rules over trust and guidance? The answer is that many organizations believe you can’t scale trust, but you can scale control. And that leads to poor cultures.

5) Foster truth telling. Leaders need to think about where the truth truly gets told. Is it in the conference room or in the hallways, in the restrooms, and at the water coolers? I once was working with a large industrial conglomerate and we were helping the top 150 leaders on a new strategy. We asked who would invest their family’s money in the company. Only 22% said they would. The CEO was shocked. But that’s not the full story. The leaders didn’t have an issue with the strategy. They doubted the leadership’s ability to work through the issues that would come up when execution began. The CEO was under the impression that everyone was on board. But clearly they weren’t. Most organizations aren’t great at creating safe truth-telling environments. Leaders often believe they should have all the answers, and showing vulnerability is a weakness. Team members often fear that speaking up makes them seem like they are not supportive, smart enough, or that it could be a career-limiting move. It is essential for leaders to be sensitive to that and foster an environment where the truth gets told; otherwise, the important issues reach them too late and in the wrong way.

It’s very nice to suggest ideas, but it seems like we have to “change the culture regarding work culture.” What can we do as a society to make a broader change in the U.S. workforce’s work culture?

Yes, we need to change the culture in regard to work culture. The good news is that it is actually happening and market forces are taking us that way. People today, and especially millennials, are much more discerning about whom they buy from and whom they work for.

When I joined the workforce, it seems the primary focus was on how prestigious the brand of your employer was and what salary you were going to get paid. Today, employees care much more about what you stand for, what your purpose is, and how committed you are to sustainability and a positive work environment. If you want the best talent, you have to orient that way, or they simply won’t come work for you or buy what you have to offer.

Beyond that, and this is a tough one, we need to educate the investment community on core long-term metrics that create sustainable and thriving organizations. We have such a short-term orientation with investment strategies that makes it at times difficult to do the right thing for the long term. We need to align leader incentives to those long-term incentives as well to make sure the right investment decisions get made.

How would you describe your leadership or management style? Can you give us a few examples?

My earlier rubber band story really set the tone for my management style — leading with empathy. I also believe in harnessing the intelligence and capabilities of everyone around me. If I have learned anything over the past 10 years of leading Root, it is how little I know and that I’d better be continuously curious and in a learning mode and look to constantly surround myself with smarter people. As leaders, we ideally set a direction and a tone and then support the heck out of people so they can be successful.

None of us are able to achieve success without some help along the way. Is there a particular person you are grateful toward who helped get you to where you are? Can you share a story about that?

I was born in Germany and came to the U.S. in high school. I was that foreign kid with funny clothes and an accent. I didn’t fit in. To top it off, I had never been great at school. I even had to repeat eighth grade in Europe! I wasn’t all that motivated to do well in school, and to be honest, it was not that important to me. But my high school history teacher, Mr. Klein, really challenged me. I had signed up for honors history, as that was one subject I had always liked. He pushed me and believed in me and I just started killing it. He got me curious, he got me interested, and got me to believe I could do things I didn’t know I could do. I ended up getting the highest grade possible in that class and it changed the trajectory of my schooling. I went on to go to a top 20 university and a top 10 business school. Mr. Klein was my first lesson in engagement. It’s not necessarily wired in us to be engaged or not. I hadn’t been. But when my leader (Mr. Klein) took the time to figure out what would work for me, I thrived, and it opened all kinds of possibilities for me.

How have you used your success to bring goodness to the world?

When it comes to bringing goodness to the world, I try to align our focus as a company to that. Root contributes to charities and supports the community (I do this personally, too), but I actually think it goes beyond making money and then dividing it up between charities we care about. The question should be, “How can you do good while you do what you do?” Luckily, at Root this is pretty easy. Our cause allows us to do that each day because we come to work every day to help organizations be better places to work. I believe that if we help organizations to become more self-aware, which in turn enables them to bring out the best in their people, we’ve done our bit to make society a better place to live, work, and be a customer.

Can you please give us your favorite “life lesson” quote? Can you share how that was relevant to you in your life?

The truth is, I don’t have one quote — there are lots of good quotes out there. If I had to choose something, I’d go with the infamous Mike Tyson quote: “Everyone has a plan until they get punched in the mouth.” To me, this is all about how good you are at dealing with obstacles. Because no matter your industry, companies get punched in the mouth every day. So you need to be agile, and your teams need to be engaged enough to stay the course. How you deal with these punches is what differentiates you.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most people, what would that be? You never know what your idea can trigger.

My movement would be “Be Above the Label — The Human Movement.”

I would love a world where we could de-label ourselves. Society encourages us to label ourselves. It’s in the self-interest of most organizations for there to be labels; it helps them market to us. But labels create divisions; they enhance our differences, not our commonalities. So, let’s not be boxed into categories. Don’t be only a Democrat or Republican. Don’t only be a Fox News watcher or MSNBC watcher. Don’t just take a side, but instead work through an issue. Be curious, be empathetic, and come to your own individual conclusion on issues. It’s harder and takes more time, but it makes you a better citizen.

Thank you for these fantastic insights. We wish you continued success!