Built on Values
Ann Rhoades, has made her career at values-led organizations. She served as Chief People Officer at Southwest Airlines, then as Co-founder of JetBlue, and now PRES of People Ink. She is also the author of the recent book, Built on Values. Through all of this work, she has pioneered the shift in our modern perception of the role of Human Resources in a company, and the importance of people to any organization.
In this Tugboat Institute® talk, Ann shares her clear thinking about how great, values-led organizations function, the ways in which they put People First, and why this work is so central to their success.
Watch and be inspired to take care of your teams and stay committed to your values throughout your company.
When What Got You Here Won’t Get You There
I know many of you in the Tugboat Institute® community are familiar with Doug Tatum’s No Man’s Land. For those who are not, here is a brief explanation.
As companies move to scale, they almost universally reach a place where they become “too big to be small, and too small to be big,” often between 150 and 200 employees. To survive, they need to take the leap and build toward becoming a larger, more complex organization. To do this, they must build the structures to support this new version of themselves. This is expensive, and further complicated by the fact that the investment is required before the new systems and processes can start generating the revenue and profit that will support them. Especially for an Evergreen® company that is committed to growing from its own fuel and not taking on outside investors, this can feel like a leap of faith.
I think about reaching No Man’s Land like this– it’s when you get to the point where, what got you here, won’t get you there. In 2018, we unknowingly found ourselves deep in No Man’s Land in a rapidly deteriorating business; the faster we grew, the faster we lost money. We were completely unprepared.
By 2018, Northland Controls, which supplies commercial security systems and solutions, had already been in the midst of No Man’s Land for two years, but far too busy to realize we were in trouble. In fact, we kept doubling down on what got us here. Superficially, our customers were the Who’s Who of Silicon Valley and we were growing. Under the hood, our employees were stressed, our quality was deteriorating, we were missing deadlines, our bank was nervous, and our best customer called to ask what was going on.
The response from my team? “Don’t worry, we’ve got this.” But we didn’t have this at all.
In the short-term, we focused on what we knew– working hard and executing flawlessly. Our tactics were our strategy. It was enough to stop the bleeding and buy us some time, but it did not get us out of the inflection point. Fortunately, I had long ago put together a board of outsiders to advise me. My board, having a more objective perspective, took a stand. It was time to make some changes.
As I considered what would be required for us to make these changes, the reality that what got us here would not get us there was impossible to ignore. The most challenging part was taking a hard look at my team and understanding that, although we couldn’t have built Northland to where it was without certain key players, those same key players were not the ones who could lead us into our future. I had to let go of some very senior people, who had become friends and to whom I owed a great deal. I lost sleep over the decision, and it was as difficult as I imagined, but as soon as it was done, I knew it was the right move.
We began implementing our plans in 2019 and were thrilled to see positive results by June and July. Serendipitously, in June of 2019, I had the good fortune of seeing Doug Tatum speak at Tugboat Institute Summit. He gave me the courage and the understanding to push through with the moves we had been making with confidence. To have language for what we were experiencing was an immense help and a relief. We began adding the extra layers we had planned for, we implemented much needed processes and policies, we were growing again, and we were starting to see profits move toward a place where we could, once again, fully support our team, our plans, and our activity. By December 2019, we had definitively broken out of No Man’s Land. We were thrilled!
And then, in March of 2020, Silicon Valley, our customer base, and the rest of the world, shut down. We work in the commercial real-estate space; with people no longer going to offices, no one was installing security. We were right back in No Man’s Land. This hit us hard, but as an Evergreen company committed to taking care of its people, we made the commitment to hunker down and preserve the team.
Our industry was slow to recover. For 18 months, people largely continued to work from home and our customers remained conservative and quiet. Despite our commitment to keeping our team whole, we did eventually have to lay off a small number of people, which was painful and felt like a setback. Nonetheless, we knew we were back in No Man’s Land, and we had no choice.
The second time through No Man’s Land was easier; we had a greater awareness of what it meant, and we were able to rely on the tactics we used a few years earlier. Entering into 2022, we decided to invest in “overhead” functions so that we could step up to the next level and build a buffer between us and No Man’s Land. Thanks to our careful management of cash throughout the pandemic, we were able to grit our teeth and invest $4 million in uncovered overhead. We invested in sales and marketing, continuous business improvement, HR, finance, and IT teams. We added extra layers of operational management so we could scale the people who were doing the work. And it worked; we had a great year, going from 250 people generating $78M in 2021 to 310 people doing $95M in 2022. This despite losing $2M as a result of the uncovered overhead investments. Our people and customers were happy, we were working through supply chain issues and our customer base being in a recession (the high-tech world), and we had the capacity to keep growing without stressing our employees and infrastructure going forward. We made it through No Man’s Land– again!
As I look back on our growth over the past four years, I am encouraged by the numbers. We started our first push through No Man’s Land with about 250 people. We maintained at 250 as we held tight through the pandemic. Today, despite our recent layoffs, we are a team of 300, we have absorbed the uncovered overhead costs, we are performing better than ever, and we are focusing on profitability and cash reserves.
This journey out of No Man’s Land is hard. After having been through it twice, I understand why people sell their businesses. It’s hard work, it’s a big responsibility, and a founder may worry, like I did, that they may not be qualified to take it to the next step. Why risk losing everything – again – when the alternative is selling and being able to tell yourself that someone with the funds to make the leap and who promises to maintain the culture is now in control? It’s an easy narrative to assuage the conscience while walking away with a pile of money.
Being part of Tugboat helped us tremendously. It gave our team the language, perspective, vision, and perseverance that allowed us to break through No Man’s Land, twice. When we needed to, we were able to prioritize preserving the company over profits. And our focus on the long term gave us the patience we needed to watch this all come to fruition.
What Effective Executives Do
Jim Weddle worked at Edward Jones for 43 years, and served as Managing Partner from 2009 to 2018. During his time with the firm, he worked with Peter Drucker, creator of the Drucker Principles and author of The Effective Executive, as both an advisor and a client. Between lessons learned from his time spent with Drucker and his own learnings as leader of a large Evergreen® company, Jim has accumulated significant wisdom.
In this Tugboat Institute® talk, Jim shares the core of Drucker’s lessons for executives, as well as his own. Among his key takeaways, he advises leaders that in order to be an “effective executive,” one must be aware that one’s time tends to belong to others, and therefore it is critical to stop managing and start leading–to empower the team to do the work that they are trained to do and in which they excel.
Watch and be inspired to find new ways to increase your effectiveness.
Build Your Own Internal “United Way"
Life is full of surprises, not all of them good ones. If you run a company, you likely have had employees at every level encounter life crises that have temporarily affected their ability to survive, not to mention do their jobs. As a co-founder of a People First company, we wanted our team to find a way to help them, so we did.
When we started JetBlue, for my co-founders and me, a primary objective was to create a company with a culture of caring for its people and customers alike. Every aspect of the company is tied to this value, but one program in particular has contributed powerfully, in both concrete and philosophical ways, to communicating this mission, and that is the JetBlue Crewmember Crisis Fund (JCCF).
The mission of the JCCF is to assist crew members and their immediate families by providing short term support in times of crisis when other resources are not available. We started it 20 years ago, in the very early days of JetBlue when we were still a small company with 100 employees; we wanted it to be in our DNA right from the start. JetBlue made an initial contribution of $10,000 to get it started, and it has grown with us. Today it contains millions of dollars.
The JCCF grows through contributions from the JetBlue team. There are three primary avenues through which these donations come in. The first is direct, regular deductions from payroll. Employees are introduced to the program as early as the recruiting phase, and when they onboard, we hand them the forms to enroll. At the moment, about 53% of the employees, who now number over 26,000, participate in payroll donations to the JCCF. This is the most significant avenue for contributions to the fund.
Another common source of donations is a portion of bonuses. Management in particular has been very generous with this type of donation, which has helped the fund grow significantly. Finally, we have some employees who just cannot afford to give part of their pay, so they participate in fundraising, donating their time to organize events which benefit the fund. Fundraising events are typically organized by groups of employees, although JetBlue has grown large enough to have a fundraising committee now which helps with larger events. But many are still quite small scale.
For example, last year a group of teammates organized an ice cream social. They got a company to donate the ice cream, sold it for two or three times what it cost, and were able to raise over $1000. Another group organized a rooftop social. It was a happy hour, they had raffle prizes, and people paid a certain amount to attend. In addition to raising money for the JCCF, the event provided an opportunity for the team to get together socially and have fun. It’s been too long since we have all been able to get together, so everyone was thrilled by the opportunity. It was a wonderful event and raised over $5000.
You may think, JetBlue is a very large company, and mine is very small–how could I make this effective? Through our work starting and advising companies of all sizes, we can tell you that small companies can absolutely do this too. The strategies may look a little different, but they can be just as effective.
In small companies, alternate strategies are effective, especially in the early days. One powerful possibility is for employees to donate unused vacation days, which then get moved directly into the fund from the accruals. Fundraising can be effective in smaller companies as well. If you are willing to be creative, you can grow a significant fund, even if your team is small. At JetBlue, we ran a year-round raffle, with prizes that included things like spending a day with Don, our CEO, or tickets to sporting events. Small companies can absolutely do this too!
Regardless of your size, there are several important things you must get right as you set this up. Right from the start, your objective and your process must be transparent and extremely clear. First, you get the legal document to set up a 501C, and then you write the rules, clarifying very precisely what specific types of crises are eligible for grants. It’s a charity, so you need to send out an annual report to everyone who participates, so they can see how their contributions are being used.
As you build out the application process, you need to ensure that someone or a small group has administrative oversight of the program, but it’s not complicated – it’s not an add to staff. At JetBlue, an Office Manager has overseen the fund since its inception. Since it has grown so large, she does now spend almost half her time on it, but when it was small, it was much less. Then you establish a board. Today, JetBlue’s JCCF board is 14 members, though we started with just five. They are all A players, they are all respected people whose managers have recommended them, and they come from every area of the company. They meet once a month to review applications, and sometimes convene emergency meetings when there is an urgent need.
For the JCCF, common situations that create a crisis-level need include divorces and crew members who suddenly find themselves single parents responsible for the entirety of their rent or house payment. Natural disasters are also a common cause for crisis-level need. Health issues can also quickly become a crisis in a family.
All requests are reviewed by the JCCF board. The board’s job is to ensure that our process is uniform and fair and that we look at each application through the same lens.
Last year, for example, JetBlue had many crew members who were affected by hurricanes. They lost their homes, or their homes were heavily damaged. It was a year of high need; we received a total of 580 applications for funding, and we were able to grant 373, or 64% of them. That year we gave out $1.3M in grants, but we had actually collected $1.67M. In addition to the regular contributions that many of our team members make, when the crisis hit, many management members stepped up and gave significant amounts, and some board members chose to donate part of their cash comp to the fund. It seems that the generosity of our team always manages to keep up with and even outpace the need – that’s how much everyone cares for our team at JetBlue.
If you do this right and define the criteria carefully, you’ll see that once you have established your program, you are able to fund between 60%-70% of applications. People learn quickly what is appropriate to ask for and what is not.
Since its founding in 2002 the JetBlue Crewmember Crisis Fund has awarded close to $11M in grants. It is clearly important for practical reasons, but it is also an important way JetBlue communicates to the team what kind of a company they are. It’s a core value to take care of their people, and as we built this, we wanted to be sure we communicated and lived that value in everything we did. When you join the team, JetBlue will take care of you.
Innovation by Reduction
Tugboat Institute® member Don MacAskill is the CEO & Chief Geek of Awesome, which owns the brands SmugMug and Flickr. Don founded SmugMug with his brother, Ben, and together they bootstrapped their online photo sharing company, purchased Flickr from Yahoo, and built their company into an industry leader. All this from the heart of Silicon Valley and in the highly competitive and fast-paced tech industry. Fast and frequent innovation is critical to survival in this industry, especially when you are self-funded and competing against giants like Google, Amazon, Facebook, and Apple.
In this Tugboat Institute talk, Don shares his approach to innovation. Awesome exists in an environment where the pressure to adopt new ideas, one after the other, and stay ahead of the curve is intense, so he has found that it’s important to have some clear guide rails, to help them avoid falling into the ‘innovation trap’ and following fads that do not last.
Watch and be inspired by Don’s insightful and effective take on innovation.
How We Increase the Odds of Acquisition Success
Burgess & Niple (B&N) is a 111-year-old engineering and architecture firm. Over the years we have done more than a dozen acquisitions. I joined the company in 1997, and as I came up through the ranks and made observations from where I sat, my impression was that many of our acquisitions didn’t take very well. It seemed that the companies we acquired were kept at arm’s length and never really became part of B&N, or it took years for integration to occur. It took me some time to understand it, but it’s clear to me now that the reasons behind these unsatisfactory results could help drive future successes: culture and staff engagement.
As an Evergreen® company, B&N’s culture and values are paramount. Being a professional services firm, we don’t make widgets. Our people are our greatest asset, which is why Talent is one of the top priorities outlined in our Strategic Plan. When I took over my role of President & CEO in 2019, we had not completed an acquisition in a decade. As we prepared for the first acquisition under our new leadership team, we sought to increase our odds of success by focusing on cultural alignment and engaging more staff in the process through what we have termed our “integration partners” program.
It starts when we are vetting a company to see if we think they would be a good fit to acquire. We dig into all the financial details and technical capabilities of course, but we have added another layer to perform a deeper level of cultural due diligence. This starts in a joint Visioning Session with leadership from both firms. We are big fans of Simon Sinek, and in this session, we talk about our Why, our Purpose, and what we can achieve together post-acquisition. We also use a cultural assessment tool that is shared with the new team before we go into the meeting. This tool has 20-30 cultural characteristics that are aggregated into different categories. The B&N team and the leadership at the firm we plan to acquire complete the assessment and then we evaluate cultural compatibility together. This helps us identify where we have the most in common and where the soon-to-be-acquired employees are likely to see and feel the greatest differences.
As we move forward with the acquisition, we start to lay the groundwork for assigning integration partners to reinforce cultural compatibility. Each person in the newly acquired firm is paired up with a B&N employee. Typically, a new employee’s integration partner is someone in a similar role, and often someone who has been through an acquisition as an employee of a company acquired by B&N. We dig into their staff’s resumes and develop a partner list as the first step. The B&N employees are then contacted and asked if they want to support the integration. We have found this is a great way to engage a wider cross-section of the firm in an acquisition and in our broader strategic planning goals.
We coach the B&N employees who agree to help on how the process will work and ask them to introduce themselves within a week or so of announcing the deal. Initially, they have calls about once a month and check in to share a bit about how long they’ve been with B&N, their experiences at the firm–both good and bad–and let their partners know that they are available as a resource. They help them with technical and policy questions, but most important are all the pieces that are not written down, like the cultural norms, and how we speak to and behave with one another. We also use these partners to collect important feedback about the onboarding experience. I, or someone from the leadership team, checks in after a few months have gone by. What is it like to be acquired by B&N? What works well and what needs to be improved? Our hope is that they form a relationship, and while we do not require that they keep it going for a specific amount of time, I know there are some people who still meet quarterly, even three years later, just to check in.
Aside from honoring our culture and improving employee retention, this process helps us become stronger and more competitive. We are a mid-sized engineering firm with 470 employees spread across the country. We are often competing with publicly traded firms with thousands of employees. Our model is made up of a network of small offices, which sometimes have as few as 10 or 20 people. If we want to go after big projects, we need to bring in resources from all around the company to make one big, virtual team that can go head-to-head with our larger competitors. As we onboard the new employees, we encourage the integration partners to pull their partners into projects, which gets everyone working in the trenches together, creates trust, and makes us all feel that we are one team. This has been a highly effective program for accelerating that kind of teamwork and assimilating people into the culture and various projects quickly and effectively.
This is similar in some ways to assigning new employees a mentor, but it’s different because the integration partner is always a peer. It’s not about training; it’s about getting to know someone and helping them find their place at B&N, and then stay on as a significant contributor. It’s important for new employees to have someone who is not a supervisor in this role; new employees do have supervisors and oversight, but this is a different kind of relationship.
Our acquisitions typically range in size from very small–about 10 or so–to upwards of 40 people, so this program does require the investment of some time and attention. Even though so many people are involved, this program is relatively simple and easy to run. It creates so much value that any costs associated are far outweighed by the benefits. Each time we learn more and continue to integrate acquisitions more effectively. It’s been a wonderful tool for strengthening our culture and growing our team and our capabilities in a culturally aligned and Evergreen way.
Fireside Chat with Dave Petersen and Dave Whorton
O.C. Tanner is a 95 year old family business in Salt Lake City, Utah. Not only are they an Evergreen® company with a deeply People First orientation, their entire business model exists to find ways to help other companies honor and support their employees and customers. They started making trophies, rings, and plaques to reward graduates and excellence in the workplace, and have innovated their way to becoming a market-leading employee and customer appreciation software and consulting company.
Dave Petersen has been with this remarkable company for 40 years and CEO since 2008. In this Tugboat Institute® Fireside Chat with Dave Whorton, Dave shares his remarkable personal journey toward leadership of O.C. Tanner. O.C. Tanner’s remains guided by the founder, Obert Tanner’s, vision and plan, and Dave shares how that vision helped him guide the company through a great many remarkable re-inventions of itself.
Watch and learn about the journey of this impressive leader and the unique and impressive, Evergreen company he leads.
A Fresh Perspective in Leadership can be Powerful, if it Meets a Few Important Criteria
It is not uncommon for a company founder to be an operator. Nor is it unusual for leadership through the early years, while a company is setting its foundation and solidifying its identity and strength, to draw from the operators who have worked there since the beginning. But at a certain point, as a company grows, scales, and moves into its next phase, a leader who sees things through a different lens can bring new insight and help a company expand in ways it may not have seen before. A few critical pieces need to line up to make this a success: the new perspectives this person brings must solve problems that have been identified, his or her mindset must be in line with the values of the company, and the new leader must take the time to learn the business inside and out.
I like to think that I met these criteria and brought a fresh perspective to Performance Contracting Group, Inc. (PCG). My education and degree in finance as well as my experience and time as a professional baseball player brought two very unique perspectives to a company that was growing fast. My perspectives and how they would enhance the leadership of the company didn’t happen overnight; I first had to learn what I didn’t know to be an asset to PCG.
I joined PCG 20 years ago as they undertook the task of helping build out the finance department. I had no experience in construction. Up until that point, and for the better part of my career there, PCG had been run by operators who had come up through the trades or had a background in construction management. That made sense as the company set its foundation in pursuit of operational excellence. When I came on board, they were growing into their next phase, both in terms of complexity and geography. They were at the point where it made sense to complement the deep operational experience with financial expertise.
I did not step directly into executive leadership; that is an important part of this story. I spent almost ten years working in our branch offices as I worked to gain exposure to the various business units within the company. My mentors guided me in my own career path all while teaching me the business inside and out. And my background in finance allowed me to help the company and fellow employee owners understand the value and benefits of being 100% employee owned, something we are very passionate about today.
Over time, and through many conversations, questions, and connections, I came to understand how to see our operations through the eyes of all employees, no matter what their responsibilities were – what we did, how we did it, what the drivers of the company were, etc. I learned an enormous amount about construction, and I learned even more about the most important aspect of it all – PCG’s identity and purpose.
At PCG, we are in the construction business, but we are about people. With our ESOP and our People First orientation, we value relationships and connections above all else. This is what sets us apart from our competitors. Ultimately, we are more people-centric than product-centric, and you can’t understand us as an organization if you don’t understand that. This is where I think my background as an athlete helped make me a good fit.
Playing baseball in college and then in the minor leagues, I learned lessons that define how I view any sort of cooperative effort. On a great team, whether it’s on a field of play or inside a business, it’s critical to understand the shared values and goals, as well as the connection points that help you achieve them. It is recognizing that there are a lot of different skills you need to play a lot of different positions. You need quality, high performing people who are talented in their own respects. You need to bring all those people together to compete to win.
An example at PCG where a different perspective can facilitate big change is an initiative that is currently underway. PCG is in the process of realigning and reorganizing a 35-year organizational structure. Our branch operations were split between two divisions, a structure that served the organization well and led to its success for many years. But to continue to grow and best serve our clients we needed a change. With my unique perspective, I felt it was important to leverage the entire organization. I wanted to find a way to create more of a One Company approach. One team. The internal walls we had built up over time no longer provided value to our identity and purpose and they were not helping our clients reach their goals. We are working to break those walls down, we are collaborating more, we are connecting more, and we are asking ourselves what value and solutions we can bring to our clients across the country. We are working as one unified team.
In the time I have been with PCG, we have grown from a $500M company to an almost $2.5B company. Today, we have over 9,000 employees. With that kind of growth come a great many challenges across the board. I like to think I bring a different perspective to the table as a leader, because I can straddle the fence between the finance and operations side of the business, all while being a team player. In any company it’s important, but often extremely difficult, to identify areas of weakness and be willing to work to improve them. With my different perspectives, I hope I am able to identify some blind spots or some areas we need to look at closely.
Above all else, I took the time to learn the culture of Performance Contracting. I joined PCG in 2003, became President in 2019, and then CEO in 2020. By this point, I had deep experience in, connection with, and understanding of the company and its values, which happen to align with my own mindset. It’s about recognizing that every single individual plays a critical role in the value we bring to our employees and our clients. It’s recognizing, acknowledging, and lending appreciation and gratitude that makes us who we are. It takes everybody–our corporate departments and our branch operations–rowing in the same direction, unified around our culture and a drive to improve and strengthen PCG for future success. I hope that as a leader, I have made space for that to happen.
Make Change in Your Community Through Partnership With the Chamber of Commerce
Bobby Jenkins is President & CEO of ABC Home & Commercial Services, in Austin, TX. He is also deeply involved with his local Chamber of Commerce. The Chamber of Commerce in Austin, like so many others, is at the center of all that makes Austin a wonderful place to live and do business, including a great many programs and initiatives that are supported by and that can support local companies.
In this short Tugboat Institute® talk, Bobby encourages Evergreen® business leaders to consider getting involved with their local Chambers. He shares some examples from his own experience and highlights the fact that both Chambers of Commerce and Evergreen companies share a common goal: to make their communities better places. In addition, he shares some of the ways in which doing good is also good business.
Watch and be inspired to partner with your local Chamber of Commerce.
Balancing the Challenges and Advantages of our Small-Town Location
The headquarter offices of Chatham Financial are located in Kennett Square, Pennsylvania. It’s a relatively small, suburban town about an hour outside of Philadelphia. It’s horse country and it’s beautiful. The schools are great, the community is strong, and life is good for families, children, and recreation. The core of our business is advising on derivatives trading and consulting in the capital markets, which are fairly sophisticated areas of financial service. It’s definitely unusual to do that work in a location like ours; most of our competitors are located in big, urban centers. For many years, however, our small town location has served as a net advantage to us. With all the recent shifts in the world and in the markets, the balance of advantages and challenges presented by our location has reshuffled significantly, but as we emerge into the new landscape, we are still finding ways in which being in Kennett Square helps, rather than hurts us in our effort to recruit world-class talent and build a strong, excellent team.
Chatham Financial was founded by a man who left his Wall Street job because he saw an opportunity to bring transparency to the derivatives markets. He and his wife lived in NYC, but as they embarked on this new adventure, they decided to move back home to a place that was more conducive to raising their family. Everyone said he was crazy to set up a financial services firm in rural PA, but he wanted Chatham to be a different kind of company. Today, our culture is firmly grounded in that same mindset. We value work-life balance, we honor our employees’ lives outside of the office, and we communicate this value to both current employees and potential new hires consistently.
For many years, we were appealing to employees at a certain phase of their career. Once they started a family, or as they were about to, the prospect of being able to live 10-15 minutes from work, send your kids to one of the great schools nearby, and join a culture that values individual respect and balance sounded far better than commuting into New York City every day. In addition, the cost of living was lower, so while it wasn’t the high NYC salary, it all worked. We mostly recruited for mid-level employees for a long time, who were at this phase of their careers.
Once people arrived in Kennett Square, the risk of losing them to a competitor was slim to none. We are by far one of the biggest employers in town, and one of the only financial services companies, so our turnover rate was very low. People stuck around, staying for 10+ years, which allowed us to grow and develop tight, experienced teams. We felt strongly in those days that our location was an advantage in all the ways that mattered most to us.
The first shift we encountered came about before Covid arrived. We were growing and needed to scale, so we needed to recruit more entry-level employees, right out of college, than we had previously. The prospect of moving to a beautiful but sleepy town an hour outside of Philadelphia appealed to this population a lot less; recent college grads want to be where the action is, in the city. We kept at it but realized that our location was starting to present some challenges.
And then, suddenly in 2020, work moved online. At Chatham, we aim to be a team that is tight, that is together, and that knows one another well. Although we now have eight offices worldwide–in Kennett Square, Denver, New York, Toronto, London, Krakow, Singapore, and Melbourne – we try to have our teams together as much as possible. We have had to expand geographically to manage client coverage; we need to be in the same time zone as our clients and they are now all over the world. But even as we spread out over several offices, we’ve worked hard to keep our teams in each location highly connected. The derivatives trading is best done in the office for risk and regulatory reasons, but even the work that could be done elsewhere is executed in office because we have a “one team” mentality. The value of being together, overhearing conversations throughout the office, and just being present and in the mix is highly valuable to our business and our culture. No one questioned this at all, until suddenly everyone could work from home. Then our recruitment landscape shifted again.
On top of the fact that people can now do many of the jobs we offer from home, the people who are interested in the lifestyle of Kennett Square can now move here anyway, and work remotely for someone else. Our small-town advantage seemed to transform into a problem to be solved.
What have we done in the face of these challenges? Like everyone, we have made several moves to try to mitigate the downsides of the new landscape. First, especially at the junior level, we expect higher turnover and so we hire more than we know we will need down the road. As we build our junior bench, the natural turnover tends to result in the highest talent employees, who fit our culture best, being the ones who love it and stay. Those who don’t, move on. It’s a more labor-intensive and expensive strategy, but it is working.
Second, we have made a few concessions to hybrid work where we absolutely had to. As anyone running a business right now knows, the pressure to hire good tech talent is exceedingly tight. Our tech team is a critical part of our business, but most tech opportunities are remote or hybrid. Therefore, despite how highly we value in-person connection, we compromised to offer a hybrid situation to our tech team in order to be able to build a great team. For the rest of employees, our principle is to be in the office full time, though we offer ad hoc flexibility to balance life needs. We are also working hard to make the in-office experience as appealing as possible by offering perks like free lunches and investing in our office amenities.
We are also leaning into some of our other locations. Denver is hot right now, so we have been ramping up there. Our entire leadership team used to be concentrated in Kennett Square, but as we are growing in alternative locations we are now spread out between Denver, Kennett Square, and London. Again, I would prefer we were all together, but having leaders in each of our largest offices has helped build the cross-office connections. We have also had to come up in salaries and benefits a bit to be more on par with our urban competitors, but again we see more upside with these shifts than not.
And finally, we are leaning into our Evergreen® culture. The downside of remote work is that the line between work and home is more blurred than ever. If you work at Chatham and come into the office every day, that is not the case. And when you go home, you are still in the beautiful, peaceful, and comfortable community, with the great schools and the light traffic, that has always defined Kennett Square. We might have to work harder to get the right people here, but we feel confident that our location will, over the long term, continue to set us apart from the rest of our industry and help us draw the best employees who share our values and who are excited by the unique opportunity to do big-city work in our small town.