#1 - Adaptive Cultures with Nikki Blacksmith, PhD

Dr. Nikki Blacksmith has spent her career trying to answer questions like:

• What are the characteristics of an adaptive culture and how do you create one?
• What's the unique role that founders play in setting a culture?
• When and how do you hire for culture?
• How do you have inclusion without assimilation?

In this interview, we talk with Nikki about her research into what makes an adaptive culture, the pivotal role leaders play in that, and how to make data informed people decisions around hiring and performance management.

Nikki has published more than 60 academic articles focusing on understanding the way personality and cognitive ability predict decision-making and job performance. She is an industrial and organizational psychologist, teaches at American University, is a research fellow at the U.S. Army Research Institute for Behavioral and Social Sciences, and is the CEO of Blackhawke Behavior Science, where they bring a research-backed approach to helping startups and venture capitalists make better people decisions, build more effective cultures, and the close the gender gap in venture capital funding.

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Transcript

Niko: Welcome to the People Everywhere Podcast, the podcast, where we explore how remote companies create thriving cultures. I'm Niko Skievaski.

Andy: And I'm Andy Kitson. Today, we've got an interview with Dr. Nikki Blacksmith. Nikki is an industrial and organizational psychologist. She teaches at American University and is the CEO of Blackhawke Behavior Science, where they bring a research backed approach to helping startups and venture capitalists make better people decisions, build more effective cultures, and the close the gender gap in venture capital funding.

Niko: In this interview, we talk with Nikki about her research into what makes an adaptive culture, the pivotal role founders and leaders play in that, and how to make data informed people decisions around hiring and performance management.

Andy: We had a lot of fun talking with Nikki and learning from her. We hope you enjoy this conversation as much as we did.

Meet Nikki

Niko: Nikki, welcome to the show.

Nikki: Thank you so much for having me.

Niko: I'd love to start by just asking you what your story is and get a sense of your, your path [00:01:00] to where you are.

Nikki: Sure. So I am industrial organizational psychologist. What that means is really that I study human behavior in the workplace and IO psychology, which is what we call it for short ranges from anything from pre hiring, all the way to turnover and exit interviews and things, anything related to human capital strategy. My particular area of specialty is in the preemployment and assessments.

So early on, actually like in high school, I'd taken a personality test and just, just like, this is the coolest thing in the world. And. Somehow, I ended up actually doing that as a career along the way.

And it was interesting because when I was in undergrad, IO, psychology was really just emerging. I went to the University of Iowa and they didn't even have an IO psychology program. I was doing social psychology and it was a lot of experiments and it was interesting. I kept asking myself, okay, like now what, what do I do with this [00:02:00] information? And so I had a business professor come from the business school, the psychology department, and talk about IO psychology, and I was like, that sounds so cool. I want to do that. And so I really. Kind of took a leap of faith and moved to North Carolina because I got into their program there, fell in love with it. So it was a good choice, luckily. And then, you know, I, I was a consultant for a little while and then went back and got my PhD because the science is really kind of where my heart is.

And I did my postdoc at the Army Research Institute. So I've been doing research for quite a long time. Within the last five years, I started a company though, taking a lot of the IO psychology concepts and principles, and that have traditionally been leveraged in like Fortune 500 companies, companies with large budgets for human development human capital development.

And there was just really not a lot for startups. And in my opinion, they're probably the ones that need it the most. So that's what my company is doing right now is we're really trying to take a lot of [00:03:00] those heavy consultant interventions and turn them into more like product and intuitive, like use yourself like resources versus how you're , you know, using an expensive consultant to come in and do a survey. I like to call it lil IO in your pocket.

The Funding Gap

Niko: I'd love to kind of get a sense of what your big questions are that motivate your research. Like, like what are you focused on? What's the question you're trying to answer in terms of IO psychology.

Nikki: Yeah. So I think I started my career in hiring and measuring personality and measuring characteristics that predict success. And it's exactly the same thing I do now.

The difference is, a while back, I had run across a statistic that said, and this is probably not much different than what it is today, that 3% of women get funding and that just like blew my mind away because in the hiring world, that would be illegal if you only hired 3% of women. So I started digging in and asking you, how is this even possible?

Niko: Wait, so the, the, the stat [00:04:00] is like 3% of funding goes to women?

Nikki: Yeah, only 3%. So basically 97% goes to male founders. That's amazing. And probably much less to people of color. Those, those statistics are harder to find, but we know that it's pretty much 97% white males, and that was... I'm Hispanic, so personally I was like, and a female, so I was like, this is it. Like I've got to fix this problem.

So I started studying the venture capital decision making process, you know, and realized, you know, after lots of reading that it's really not any different than a hiring questions. You're asking the same fundamental question.

Are these people or this individual, are they going to perform in the future in a way that I will get a return on my investment, whether it's the salary or you know, of investment, the only difference is that it's typically at the team level. So you're hiring a team instead of an individual, which is new organizations don't really hire whole teams at a time. [00:05:00] So is a different lens.

And also it's just higher stakes, a lot higher stakes because you're putting a lot of money. But the process and the question are the exact same. So I started thinking, well, we've been working with organizations as a field, you know, for decades. And now it's hard to find an organization who doesn't use some kind of assessment to predict performance.

So why are we just going about making venture capital decisions without assessment? And traditionally, like if you ask any venture capitalist firm, like 99% of them will say the person or the team is the most important factor in their decision. But when you start digging and asking how they determine whether or not that person is the right person, it's usually primarily gut instinct, which we as psychologists know that data is a lot more predictive than somebody's instinct.

Of course there's always going to be the person's instinct or what, and that's fine. Everybody has preferences and [00:06:00] stuff, but they should use data to inform those decisions to make those decisions wiser.

How to Make Good People Decisions

Andy: Could you talk a little bit about like what maybe the process, that's not really data driven that a lot of organizations or investors use today versus one that is like more rigorous, informed by data? The one that you'd want to see people use

Nikki: So if you, any startup, I think they have a difficult time hiring cause they don't have that option usually to use the data.

So they'll just, you know, look in their network, find someone that they know, try to do an interview, as well as they know how, even though they weren't trained in running interviews. We actually have entire training programs for people to do to accurately rate interviews. And so instead of just, you know, talking to a person and using your own perceptions of whether or not you think they will do well what we do is we start with the end goal.

So [00:07:00] what does performance look like? First of all, like you can't, I always tell people you can't get somewhere. If you don't know where you're going. So we have to first define what is it that we want, like what kind of performance are we looking for? And then work backwards from there. So we define, you know, let's, let's take a manager, for example, that's a typically studied role and, and we know certain things, certain behaviors and certain performance dimensions lead to better work. And so we identify the traits or characteristics that are linked to those things. And by doing that, you're actually assessing what matters most to the job versus just asking questions about their background and resume and experience. So it's really about defining what it is you want and then determining an accurate way to measure some of those things.

And that can be that's where the psychology comes in, in play, because it's really difficult to measure someone's personality. You can't physically touch it. So you have to really, you know, there's a whole field called psychometrics, which is [00:08:00] the study of measurement of psychological traits and using those methods lead to, we know from several studies, hundreds of studies actually, we've been doing this research for about a century. It goes all the way back almost to Charles Darwin's cousin who start identifying individually. So yeah, so we know methods and ways to do it, but I think primarily it starts with the defining, what are you looking for? And a lot of times that can be really difficult because usually when somebody is hiring in a role through not the person, that's an expert in the role.

So like, for example, if I was to hire like a chief marketing officer, I'd want to hire someone who's top of my field, but how do I, I don't even know how to differentiate who's good. And who's not because that is such a field that's far away from the work that I do. So that's where the case where, you know, studying the job and learning what you want and identifying those upfront would lead to much better hiring than if I were just to go out there and say, yeah, [00:09:00] that looks good. Like you've done some cool stuff. Sure. Come on up for,

Andy: So the first step is really being clear about here is the role that we're hiring for what success looks like. And what we're looking for in a candidate that we think is going to be predictive of success.

Nikki: Yeah. And it varies by role. Of course, so not everybody's going to be good at every single role. And I think that's the thing to remember is that some people are just built for different types of roles than others, you know?

Andy: And then once you have that definition, it sounds like there's a combination some psychometric tests and then also interviews that are, are, are they more structured or you're just kind of guided by this, this profile that you put together, how is, how, how, how are those different?

Nikki: Yeah, so psychometrics is just the general umbrella term for any kind of measurement of psychology. So I would actually consider it an interview, a psychometric assessment. I'm interested if it's designed well. And so to your question about the structured, that's what makes an interview good, is that there is structure to it.

So [00:10:00] every single candidate gets the exact same set of questions, which makes it easier to compare. If you have two candidates and they get two completely different questions in the interview, how, how can you even compare who's better and who's not for that particular role? So having a structure.

There's also things we know that make those decisions more accurate. So if there's multiple raters instead of just one person, you can average it. And that kind of gets rid of some of the subjective bias that comes with each individual. If you can look across it and there are self-report tests like personalities, so those tend to be like the rating scales. You've probably seen like, you know, a statement that says like, you know, I'm very outgoing and then you report, you know, strongly agree to strongly disagree.

There are what we call situational judgment test. So those tend to be burdened knowledge based. They look at like specific types of knowledge. So like from only one that's coming to my mind is this one that was used for an FBI agent, but there's like certain rules and processes and procedures they need to be aware of. And so it gives them a scenario and it says [00:11:00] very, very similar to what you would actually experience in the workplace and then gives them a set of choices. Like what would you do in this scenario or this situation? And so that's what we would call a situational judgment test.

There are other ways like cognitive ability tests, which are very similar to any kind of like academic tests that you might take in like GRE or ACT or SAT where there is actually a right or wrong answer. That's the biggest difference between the personality and the cognitive ability is there are no right or wrong answers for personality, but there is a right answer to one plus one. I hope.

Hiring for Culture

Andy: How well actually, maybe before how, but should culture factor into the selection process and if so, how, how do you think about that?

Nikki: Absolutely. I think hiring, you don't just want one aspect of the person you want to kind of know the person overall. So there are a few different things that I like to separate. [00:12:00] So one is their fit to the role. Can they actually do the job? Do they have the skill set and experience.

Then there's the fit to the organization? A re they a good fit? And I can tell you lots of stories myself of when I've been in poor fits. It's if you think about it. Okay. I'll give myself a similar example. So I'm an IO psychologist, and regardless of where I am working, I'm usually doing some sort of data analysis, writing theorizing, analyzing the work is the same.

I worked at Gallup for the longest time and I loved their culture. It was so much fun. I still have friends from there the best time. Like it was perfect. It was very relationship oriented. Everyone was focused and motivated. Everyone wanted to do like be constantly be better. So we're always looking to improve.

And then I went to work for the US Army Research Institute for my post-doc. And that was literally the opposite experience. Like I felt so trapped. It was the [00:13:00] worst fit for me. It took a toll on my mental and my physical health. And the difference was that I was in a culture that didn't value new ideas.

And I tend to be, you know, as most entrepreneurs are the person who likes to break things and then recreate them and, and challenge ideas and the status quo. And that does not exactly fly when you're in a military situation. So I got in a lot of trouble for not respecting the hierarchy and just opening my mouth when I shouldn't, according to their culture.

And so it was very clear, very early on that this I could not stay there. Like this was just a bad fit for me. Like I need to be in a place that like values like innovation and it was just crazy stuff that would make me. We were doing paper surveys and instead of digital surveys, I'm like, and I literally would go and like calculate all this, you know, how much we were labor, the cost and the printing and be like, look, we can say like millions of dollars if we just [00:14:00] moved to digital and we can also save time, like do things faster. And they're just like looking at me, like get out of my office, like I don't have time for this.

What is Culture?

Niko: So without, without calling one culture better or worse, right, because cause there's certain effective things about, you know, that culture how, like if, if you are the hiring manager or a leader within that organization, how can you assess, like, what is your culture and then how do you actually hire people that fit into it? Or is that even the right way of thinking about it?

Nikki: It is. It's exactly the right way of thinking about it. And for startup leaders and founders, I always suggest that that's like the first thing they do is to define what kind of culture they want. And I think it's really common for a startup founders and leaders to say that it's not important right now, we're focusing on our product, like we're in survival mode, or we don't need to think about our culture until we have a lot of people on board and we have an HR department and [00:15:00] that's actually, I mean, we've seen it in the news a lot with like Uber's sexual harassment culture that was heavily like, you know, publicized. And there's a lot, a lot of examples in the public where kind of your culture, if you don't define it upfront, kind of unwieldily grows in its own way.

And I like to think of the culture as boundary conditions for decision-making. So if you, well, I'll use my company for example. So we've really, really value learning. And so if we have a hiring situation, let's say and somebody like is not the kind of person who wants to learn more and just wants to kind of the job where they coast and they've learned and mastered the skillset that is the complete wrong person for our company. And it will, we, you know, we really do embody kind of that entrepreneurship spirit is like, if you don't know it, like just so figure it out and learn it yourself.

And so it can easily just by a single person, like if we're a [00:16:00] startup, we have, let's say a five person team bringing one person that doesn't fit that culture completely changes the dynamics of the team. And then you're kind of dealt with kind of trying to manage and wrangle things back into place.

And that can happen if you don't define the culture up front. Right. Cause you don't even know what you're looking for. But a lot of times, you know, and the Edgar Schein who was one of the most most cited researchers on organizational culture will say that founder's personality is probably the biggest influence on what the culture actually happens.

It's almost like you can't really tear the person apart from the culture. So it will come out. Like things will happen. The employees will model the same behaviors. The leaders are exhibiting. And so things will happen if you don't do that intentionally, it's really, really easy to go astray and then it becomes more difficult later on.

So my advice is always start like at the very beginning, because it it'll inform [00:17:00] so many decisions you make like our values, what we value a lot of like the diversity, you know, I spoke about the, the funding gap and that's huge for us. And so if we, you know, there's a deal that comes across our way. And, you know, as a startup founder, you get a lot of opportunities and it's easy to say yes to them, all which can be quite dangerous.

But for us, if we know like, okay, this doesn't really fit in our values, or it doesn't really match up with our brand. Like, even though it's like a lot of money, this would take us down a whole other path that we don't want to go down. So it creates like a way for employees and others to be empowered, to make decisions that they feel are best for that particular company.

Andy: Can we dig a bit more into it? So, so you, you said you think of culture and boundary conditions for decision-making. What do you mean by boundary decision or a boundary conditions a bit there?

Nikki: Sure. So if you think about, I'm thinking about a while ago, I think it was Starbucks where they had their employees. They gave them full power to give [00:18:00] free coffee or coupons or discounts if a customer was having a poor experience. Prior to that, There was probably rules where a manager needed to sign off on something like that.

It's difficult to say employees go out and make those decisions yourself without giving them some sort of understanding of when it's okay to do it. And when it's not okay to do it. And so by saying, you know, we really value the customer experience. If they're upset, that's the worst thing for us that could possibly happen.

So in that case, like, you know, that it's best for the company to offer a free coffee or, you know, whatever they do to, to make up for a long wait or whatever it is. So they have an understanding of what that company cares about and what's important to them and that informs their decisions. So they're not just out there, you know, making decisions, however they want. It is within a context of, this is why we're doing it, and this is what's important.

Andy: Yeah. Yeah. It definitely, it it's like the situational judgment [00:19:00] that we were talking about earlier.

Defining your Culture

Andy: How so you're talking about defining the culture early on. That kind of comes from the founders. How often do companies get that right? Like is their own, self-description like actually matching up with their culture typically, or are there processes to like, get that better so that you know, that the culture that you think you have is a culture that you actually have, or does it just happen, like, you know, if the founders sit down and like, really think about it, you know, they're likely to get it?

Nikki: I would love to see that more often, but I very rarely see it. The one example I can think of is, and this is obviously because this company has extensive resources and they've been around for a long time, but Disney.

So they do a really great job of, they have an external brand right there. They want happiness and magic and there for kids. And then internally they create a culture. Enables their employees to actually provide that experience. So they call their employees at the parks cast members and they [00:20:00] create a way to merge their external brand with their internal organizational culture.

And I think that's probably the best way to do it is always, it should always be aligned with the business strategy. But I have very rarely seen that. I've seen things where like larger organizations tend to have the situation that you just described, where the leaders think the culture is one thing, but the employees are like, actually, it's something totally different.

And in that case, you have to understand where and why the differences exists. And that comes back to the measurement piece. So measuring and understanding, okay, where do the cultural differences exist? Because there's a lot of things that can happen that can create countercultures culture that actually works against what they're trying to do, or they could have subcultures.

It's very, you know, it's not uniform. It's not like all employees have one thing. It could be, you know, like at Gallup. I think each office had kind of their own culture, whether they were in Singapore, DC or Omaha, Nebraska. [00:21:00] And so those subcultures were okay because they were part of the broader culture, but they weren't counter cultures where they were doing things that were actually damaging the brand.

And so you have to kind of understand the layout of where these beliefs and ideas are happening in your organization in order to actually make any kind of changes. And that can be really difficult. With startups and early organization, that's why I love like really pushing the, like, let's start first with like your organizational culture before you go anywhere, because then that creates and avoids those situations in the future. You, you have this chance to actually be very intentional about it. Think about, so when we first started our company, my co-founder and I just sat down for like eight hours one day and just like, what do we care about? What kind of workplace do we want to be? How do we want to be seen?

And then we came up with a list of values and everything we do is baked in those values. So our hiring or our onboarding and our [00:22:00] branding, and like, everything comes back to that. And it's tightly aligned with one another. So it's feels like it's a seamless part of the organization. And when you build it in, so like much, like bake and it's really hard to take it down.

And that's, what's problematic about organizations that don't do it intentionally because it does become big. In ways that they didn't plan or, you know, anticipate, and it's much harder to kind of break it apart than it is to start from scratch and then build it up.

Adaptive Culture

Niko: One of the things I'd love to get into, you know, we've been talking kind of about, you know, defining culture based on how you want to move the organization forward. But I know you did some research on like what makes an effective culture and specifically your work around adaptive cultures.

Can you, can you give us a I'd love to just hear that story about what that research was and what you found in it? I think that'd be an awesome path to go down here.

Nikki: So I think of organizational culture the same way. I think of [00:23:00] personality there's no right or wrong culture, right? It's just whatever makes sense.

But there are some things that are fundamental and adaptive culture is one of those things. It's because it's a survival mechanism. It's really. I don't, I dare you to try to find one organization that's exactly the same as the day it started and still survives today. I mean, it's just not realistic.

Like the world changes and you have to change with it if you're an organization and want to survive. So building in that adaptive culture is it's almost a survival mechanism, essentially. And there's a lot of work, but it's a lot of theoretical work like yes, we know in theory that change is important and that we need to think about it, but there wasn't a whole lot of actual research that tested those theories and hypotheses.

So we did what we call the historio-metrics study. So we went back in time to study organizations and we identified about a hundred organizations pre 1940 that had started up. We wanted to have some [00:24:00] consistency in the way we analyzed them, so we picked companies that had Forbes profiles written about them, that we could go back and we could look and code and analyze.

And so we had Forbes articles from like pre 1940s, and then we had coding from then till today. So like, was the organization, did it get acquired? Was it merged with somebody? Is it bankrupt, like basically any kind of big milestone that the company had over the course of the last, like, you know, some of them were a hundred years old and we were going to see if organizational culture, adoptive culture, if they had that, if that predicted how likely they were to succeed in the future using kind of this past, cause it's really hard to say a hundred years in the future. Let's see what it is. So you kind of have to go backwards to understand future, but it's a little counterintuitive, but. You know, when I first started the study, I was thinking like, this is insane.

Like [00:25:00] we're picking up data from like 1800s and trying to correlate it with data that exists today. Like there's no witnesses or, you know, there's just so many factors that like, could have gone in between. And to my surprise, we actually got really interesting results and we were able to predict those organizations that survived over time.

And it was those that had adaptive culture. There were two ways we thought of adaptive culture. So there's the mental component, like the beliefs, the ideas, the values. And then there's the action component. Like, are you actually doing these things? And you can think of it similar to how we think of, you know, people and behavior.

If you want to change somebody's behavior, you have to change your ideas first. They're not going to behave in a way that goes against what they believe in. And so it's kind of the same thing with an organization. Like if your organization doesn't value and believe in change, it's going to be really hard to get people to actually do [00:26:00] that.

So what we found is that simply just having action orientation or values was not enough. You had to have both, you had to have the belief in the value system built in as well as the action. Which makes sense. I mean, it's, it's kind of like organizational cognitive dissonance you know, the discomfort that you feel when you're behaving or acting in a way that goes against your beliefs and when you have a lot of people and you're trying to change their behavior, the number one way to do that is to start with the mind, the mindset of that organization.

Andy: So the adaptive culture is one that values change and that has the ability to execute and actually make change happen?

Nikki: Yeah. So we identified eight dimensions of adaptive culture. So the first one is external focus. So the organization has a mindset that they don't exist in a vacuum in isolation, which some organizations do think that but they recognize that the environment has a heavy influence on how they [00:27:00] operate.

There's also this idea that they're constantly trying to anticipate or foresee what's going to happen in the future. They pay attention to trends. You know, in the, whether it's like top 10 trends in the field or trends in like how the economy's working, they pay attention to where things are going and try to anticipate the changes before they happen.

There's also the idea that you're just open to change to begin with. I think this is a tough one for a lot of organizations. Cause you have to walk a fine line, right? You don't want to create an organization that's just like open-ended and there's no standardization, and you know, that would just be chaos.

So you do have to create some standard operating procedures, but you don't want them so rigorous that you can't change or adapt them when needed. And so having this idea that it's okay to do things a little bit differently than we always have is critical. And then having the confidence to. We can change.

Like that's a big one. If you think about organizations and innovation, you know, they might look to a competitor and like, wow, we [00:28:00] don't have those resources. Like there's no way we can do that. They just don't have the same level of confidence. So there's all these kinds of like mindset of understanding of being open, confident, and foreseeing, like what's coming and paying attention.

Andy: And all those go into like the, the valuing change.

Nikki: Correct. It's all, those are all you can think of them like mental activities the way you think and what you're doing and researching and reading. And then the action bucket is made up of more of those executionary processes. So you have an organization that develops capabilities. So if you think about the startups that anticipate scaling and create processes and system built in, so that like in the future, when they're ready to grow, like.

Going to be chaos, they've actually built it in and ways to scale. So it's this foresight of planning, I guess. There's also collaborative action planning. So you can't just make an organizational change in one department and then not involve the rest of the departments. It has to [00:29:00] happen like cohesively and everyone kind of has to understand the change if you're going to make that level of change.

And so understanding how teams work together like multi-team systems is critical and getting people to work together across those teams is also really important. So, you know, I'm thinking as a psychologist, we often work with technology teams because we have the expertise of designing and building like assessments, but we don't have any expertise in like coding and making it actually implementable like on a digital space.

So we're constantly like working collaboratively with, like, the IT department or, you know, people from other disciplines and that's not easy at all. You have to have the ability to like speak different languages and like understand each other.

Like, I just remember this one time we were building an assessment in IO psychology. We often call questions items. And so I kept saying the word items, items, [00:30:00] items, and nobody said anything, but the it department was like totally had a different mental model or understanding what the word item is. So like, we were like having a conversation, but like each one of us had a completely different interpretation of what it is.

So it does require a little bit of like understanding how to get disciplines to work together. And then of course there's executing change that you actually make that change happen. It's really, really easy for, you know, company, oh, we should do this. We should do that. Let's do this. This is cool. We'll do that in the future.

And then never actually make any change because it's that like analysis paralysis like change actually has to happen. And then the last part is sustaining change. I think this is probably the hardest thing. So people are resistant to change in general, like inherently that's how we were built as human beings is to resist change.

And so when you have a giant change, like organizational wide and you're trying to sustain it, you have to build in other [00:31:00] systems to reinforce that change. So if, for example, if you're going to an organization that wants to move from individual level performance, like the recognition to like a team performance model.

You have to have the rewards and salary and compensation, all tied to the teamwork, not the individual. Otherwise they'll just keep on working towards individual level. So it requires understanding what systems and processes within the organization are going to hold that change. And it sounds like these are, you know, linear and, in order, but I think they all kind of like happen together at the same time. And it's hard to tease apart, but with research, we always try to actually delineate and make distinctions between them. But in practice, it's not that easy.

Niko: Yeah. I love this. I think your findings on adaptive culture are really important here.

And I want to just kind of go back to the, to the experimental design so we can understand the importance of these findings. So, so, so [00:32:00] first off these characteristics that you described of, of what makes a culture adaptive, is this what you found by, by sort of trying to look at those Forbes? For the Forbes articles.

And did you pull out, like what made these companies successful or did you try to define that this company, you know, in the, in the 1930s had an adaptive culture and then, you know, ran the regression to figure out like, oh, and they're actually much more successful than the ones who didn't like, what was that process like and how did you actually figure out that a company did or did not have an adaptive culture based on these Forbes writeups?

Nikki: So there was actually two parts to our study. It lasted years, painful years. But first we had to define what an adoptive culture is. So that kind of goes back to my point. Like if we're going to look for something or trying to measure it, we actually have to know what it is first. And so we scoured all the books and articles we could ever find on what an adaptive culture is.

Ranging from academic scientific articles [00:33:00] to, you know, articles or books, like Good to Great. Like how do people describe adaptive organizations and then what were the commonalities across all of those? So we identified these eight things and they came from basically a synthesis of everything that's been done before.

We actually had one other aspect in there, which is risk-taking and that ended up not staying in the model, because it was one of those things, like you can do all these things and still be risk averse. Right? Risk-taking, isn't a requirement of change. And so it was one of those things that it just, people talk about it a lot when they talk about change and adaptive, but it's not necessarily like a critical component. It can be a bonus. What not.

So we identified these traits and then we had to actually figure out like, okay, now that we know what we're looking for, like, how do we actually measure that? And so we created what we call behavioral [00:34:00] anchored rating scales. So we had a rating like, for example, like external focus, you might have like low external focus to high external focus.

And instead of having like one to five, we actually had to write like what those organizational behaviors or processes were. So that way everybody was that rated at a five rated same thing.

So there was extensive training that a team of undergraduates had to go through. God bless them in such a hard job. They really had to read through like hundreds of Forbes articles, like in detail, coding, analyzing. And then we would like look back at the collection of coding. So make sure that like, you know, if one person said it was, and it wasn't like what's going on. And so we looked at like the inter-rater reliability and how consistent the raters were, and that's what brought us to our ability to say this organization was adoptive and wasn't is that these undergrad research assistants were trained at least 12 hours [00:35:00] to do this. And then they read through every single Forbes article. We had multiple people. Each article. So it wasn't just like they get divvied up.

Like we had to make sure that the raters were consistent. So we had everybody read, read the same hundred articles and they coded it for each of those things. And so every organization got scores on those eight dimensions.

And then we use those scores to correlate with we use survival analysis, which is actually a really cool statistical technique that's typically used in the medical field to actually predict survival, you know, of a person. So like cancer rates and things like that. So we actually took that statistical method and applied it to the life of an organization using those, those eight traits.

Niko: That's amazing. And, and, and just to touch on again, and what you found was that the companies that had higher ratings of adaptiveness based on these, these The ways that you measure that had yeah. They survived [00:36:00] more than, than other companies.

Nikki: Yeah, so they, I mean, we had companies like Forbes and Heinz and not Forbes, sorry, Ford and Heinz

Niko: yeah. I was like Forbes writing about themselves.

Nikki: There was a lot of automobile companies obviously as, that was kind of what was going on back then? There was one I remember the most was Davey Tree Surgery. And I just remember thinking like, what the heck is a tree surgery, who does tree surgery? And what does that mean? And what is it? And they are still in existence today and they have thrived and they were one of the very few that just really made it like all the way. A lot of them were like acquired or merge with somebody else. And if they were acquired to be considered that a death of an organization, because they were subsumed by another organization and they had to take on the traits and culture and processes of the other organization. If they acquired another company and they were the ones that acquired it, they were still alive.

So we had to make these really clear distinctions about what does survival even mean [00:37:00] for an organization. And so if you want the same company, you start today to exist a hundred years from now, this is what adoptive culture is. It's a different thing when you know, you get subsumed into something else that you know, is, is just a different definition of, I mean, it's not unsuccessful, but it's not survival, which is what we defined as.

Can Leaders Change Culture?

Andy: So reading the study there, it really got me thinking about the capacity of companies for like cultural change, because on the one hand, I have this preexisting belief that the cultures can change, that leaders can shape culture, kind of all of that. Now, on the other hand, we're taking a look at these snapshots in this time window that then predicts survivability on like a decades-long time horizon, and it feels like I just had me thinking like, it's culture, destiny? Like, at that point, if you know, it's really looking that far out? Or is it really that like maybe adaptive [00:38:00] cultures are the ones that can change their culture. And so they, you know culture can change, but only if you're already adaptive.

Or is it really just kind of like more of sort of like you were talking about earlier, kinda like at the founding stage or some kind of point where like past you get, when you get past that maybe it's too late or.

Yeah, I think I'd really just love to hear you talk about cultural change. Like, can it happen? What are the conditions where it can happen? If so, how?

Nikki: I would say culture change can absolutely happen, but the longer an organization is around. So it's older think about like human beings and change as well. Like people get in their ways and they're harder to change as they age same with an organization and also the size of it as well.

So it's much harder to change like a thousand person organization than it is to change a 30 person organization. The scale of change is just immensely different. And that's why there are literally like entire like fields and degrees in organizational change. It's not an easy thing. So [00:39:00] I would put culture change in that same buckets like this is going to take a few years at the least, if you're a large organization, you want to change. You can do it, but it's required a lot of dedication, a lot of time, a lot of resources. And it's not by any means going to be an easy ride. People just don't like change in general. So you're going to be working against resistance almost by definition.

Earlier it's different cause you have, it's much easier. Let's say like there's one person on your team that's really kind of toxic or, you know, takes your culture in a way that it shouldn't go. Like you can get rid of that one person. They can leave the organization by themselves. Like they just realize they're not a good fit or they end up getting fired and then you bring somebody in and kind of rebuild and remerge the team and bring it together.

And so that's a little bit easier. That's why I like to always like really emphasize that, like, if you start this from the beginning, you won't have to deal with the like [00:40:00] incredibly difficult change process of organizational cultures. And I've seen it a lot where large organizations it's not that they have like a culture that they don't like, they don't understand it. They don't know how to define it to begin with. And they don't know how to explain that like what their desired culture is and what their current culture is. And I think that's a critical part of change is knowing where do you currently exist and where do you want to go? So knowing where are the discrepancies between the desired and the actual culture.

And that's really important for a large organization. If they're going to change is, is really getting that bench line metric of who they currently are and we're in where they have to go.

Andy: Yeah. So it's a lot easier when you're smaller.

Founders & Cultural Change

Andy: I think prior to recording, you're talking about just like the different roles of say founders, executives, managers. Could you maybe talk about kind of like what the different roles that like founders or executives or managers or individual contributors can play in in changing culture?

Nikki: Yeah. So a founder I would argue is [00:41:00] probably the most important part of the culture because they're the ones that are going, they have the vision, right? So they also have whether or not they are aware of it, a vision of what they want the culture to be like. And so they can either intentionally design it and build that in and build processes and reinforcements to support that.

Or they can go in and just be themselves in the culture, kind of emerges as it is. And that's more dangerous in the sense that it's more difficult to control and manage. Founders and leaders in organizations have such a critical role in organizational culture to the point, like they don't even realize how important.

So people are social learners. We learn by watching other people. So if they're behaving in a way that goes against the values, it's very easy for the rest of the company to think, oh, it's okay to do that. Like, if they're doing it, like that's fine. And I'll give you an example. One of the things that we, we studied personality, so of course we really value like [00:42:00] just individuality and the differences in people and want everybody on our team to feel like they can be themselves.

And that's really, the mark of inclusion is you have a sense of belonging, but also you value what's unique about each person. And the other day, I was in a meeting with a couple of my employees and she said something like she liked something and I made an icky face. Like no, not that I would do that.

And my you know, and another leader on my team totally called me out. And he was like we value everybody's opinions and differences. And like, she has her own, you know, tastes and opinions. And afterwards I was like, I sent him a note and I was like, thank you so much for calling me out on that, because if you didn't it would have eroded our organizational culture.

Like we would have lost that value, not just what that one case but, I'm like a very expressive person, so I have to watch my facial expressions in meetings [00:43:00] more often than I do now. But that was one of the things is that you don't even recognize every little behavior that you do reinforces or damages the culture.

Niko: Yeah.

I love that example so much. And, and I think about, you know, how do we build a culture of belonging a lot because people are, you know, they can be their best selves and work, work within teams and across teams, if they feel a strong sense of belonging within the organization.

But I'd love to get your take on. It's almost a paradox between this concept of belonging in that the authentic person is welcome here and all, all that they want to bring is welcome. And at the same time, we want to build a culture that is adaptive and that can change. It has a growth mindset and can learn.

So on one hand, we're saying you're perfect the way you are. And on the other hand, we're saying, but we can get better and we can change. How, how do you think about that, that paradox between in between those two sort of what I think are our truths that need to be present in a culture that is effective?[00:44:00]

Nikki: Yeah.

So I think about that every day. Cause I do, there is a little bit of a conflict and I think. If we differentiate between who the person is as an individual versus what the organization does in terms of the behaviors and processes and products. And it's okay for my, you know, employees to like, I dunno, like, heavy metal or something, you know, but that's not going to be like the theme music that we use for, you know, videos and things like that. Cause it just wouldn't mesh well with it.

So there's a difference between like, yeah, it's okay if you like that. But like, please by all means, but also here's what, how things need to get done in this organization. So it's, it's similar to how you would operate a team like you think about, okay, how does the team collaborate together?

Let's figure out that process, but still knowing that every single person on that team has a unique skill set that we could leverage or use. So [00:45:00] understanding the uniquenesses of people's. Actually makes the organization stronger. Cause you know who to go to when you need something of certain extent. So for example, like my co-founder, let me just give this example because it's my favorite, but she, if you give her a blank page, like she'll sit there for hours and just like, not know what to do with it. And then it'll stress her out. And if you give me a blank page, I'm like, woo, like five minutes, there's something on the paper. But then I get like, okay, I've worked on this for awhile? Like it stalls. And then she's the one that kind of comes in and is like, all right, like now that I have something to work with, I can mold it, refine it, like do it.

And so we learn that about each other and it completely changed the way we collaborate with each other and like what we do and how we do it. Just by knowing that. And so we're still working on the same piece and getting the same thing done, but we each come at it with different perspective or lenses or skillsets.

But it's amazing how much [00:46:00] quicker we get things done after we realized our, our each super powers, you know, and it's part, what are we doing together? And then what does each person bring to that, you know, process or product that's unique and how do we pull that in? Does that make sense?

Niko: Yeah, yeah, yeah, for sure.

Belonging

Niko: And, and I think this, you know, I, I feel like we can't touch on what makes an effective culture without going down the path of why DEI diversity, equity and inclusion is so important within these, within these cultures. And I'd love to kind of ask you about, you know, if we define a culture, we have a set of values. We try to hire people who fit within that. It's almost like we're trying to find people that can assimilate into what already exists and how does that compare to us, trying to actually understand what makes people different and use that to help our culture evolve and grow versus trauma versus an assimilationist mindset of like [00:47:00] trying to get people to fit within what we already defined as our culture.

Nikki: I think fit is one of those things, like to get someone to fit in you're asking them to change who they are, that that's when the problem happens. When there's little fit, like there is no way I could have gone into the army and been like, okay, I listen to everybody. I'm going to keep my mouth shut, like I'm not going to come up with new ideas.

Like, that's just not who I am. There was no possible way I could have assimilated into that culture. And so we both knew it. They knew it. I knew it. We parted ways. And it wasn't like they had a bad culture, right. It just was not a good fit for me. I was doing the exact same work I was doing when I was, you know, at GW doing my PhD or at Gallup, but in a different setting.

So part of it, you know, I like to think about it like a family, like you have your family, and there's like, every family has their own culture and rituals and behaviors. And, but everyone is so unique, you know, like you and your siblings are just, you know, opposite, but at the same time, there is something that overlaps and that you share.

And that's what it is. It's [00:48:00] really, it's not about assimilating as much as it is about sharing. So having the same shared values, like I wouldn't want to hire somebody into my organization if they didn't value diversity, because that's such a central piece to everything that we do. So it's really about what are the shared beliefs or values or things that we're doing.

And then how does everyone bring their unique perspective to accomplish those shared goals or shared beliefs? So it's, it's hard to differentiate and I think it's a fine line. And I hear a lot of organizations and people say, don't hire for culture fit because then you're just going to create this homogenous organization, and everyone's going to look the same. That's not the case at all. Like it's two different things.

First, make sure you have everybody fit for the role. Like everybody is going to have a different role. And every role requires a different and unique skillset. But if you have people that are working towards like different goals, nothing is ever going to get [00:49:00] done.

There was this company I worked with there, they had three founders. They really wanted to work on doing, building an intentional culture. So they brought us in very, very early in. And so we did all these stakeholder interviews to try to kind of figure out like, what were those shared values and goals across the founders.

And. We actually found instead that they were each describing the purpose and goals of the organization, like completely different, like almost different industries. And so we're like, oh, okay. We've got to step back before we talk about culture. Like we have to figure out what's shared amongst ourselves and what we're trying to do together.

And then we can start to think about how to build that from there, but it really does begin with that shared goal. I mean, if you think about it, it can be as simple as like, what is the mission or purpose of this company don't value that, or have the you know, ambition to try to help achieve that then probably not the best fit.

And that goes up the bottom line too, right? Like you don't want [00:50:00] someone in an organization that doesn't buy into what you're trying to do because it just wouldn't work.

Niko: This is amazing. So th the, to, to kind of summarize, I, I we've asked around a bit, but we talked about, like, yeah, shared goal mission for the organization, how culture needs to come out of that to figure out how culture can actually support making progress towards that, how do we actually hire people that are aligned with that and make sure that we're, we're doing it in a way that can actually make our culture more adaptive and grow. So, so much that you want as, as a leader within the organization. So I super appreciate you taking the time to have this conversation with us.

Rapid Fire

Niko: But one thing that we are going to do with, with all of our guests on the show is hit them with a set of rapid fire questions. So we, we have them here. I'm going to kick it over to Andy to give them to you. But yeah, we'd love to get your take on a couple of these questions, I think are going to be really interesting to [00:51:00] see how different people respond to them.

Nikki: Cool. All right.

Andy: Could you share a story that illustrates what culture means to you personally?

Nikki: Yeah, I think to me, culture is just another word for home. It's about a place where I feel comfortable being me and to go back to the story about the army versus Gallop. Like I did not feel like I could be me in the army setting at Gallup, that was a different story. Like, I didn't even question it. It was just like, I was just there, you know, like, I didn't even think about myself in the organization and the fit between me. Cause it just was so natural. So for me, culture really is if you don't feel at home and like you fit in, that's probably not the best culture for somebody.

So like I always like to tell people it's like the organization needs to instill the culture, but also the person has a responsibility. of knowing what, like being self-aware enough to know where they fit and self-select out of those positions when they're not right. Because even if they do just need a job and need to get in, they're going to be [00:52:00] miserable anyway, like in the long run into that's going, gonna affect them in a lot of ways.

So to me, culture is home.

Andy: Cool. Culture is another word for home. Love it. So in, in terms of company culture, building culture, what do you leaders either too often overemphasize or underemphasize, like kind of what, one of the things that you think are overrated or underrated around fostering culture, company culture?

Nikki: So I think one of the things that is under-rated but incredibly impactful is the idea of a psychologically safe culture. And so what that means is that somebody feels like safe enough and trusting enough to say what they think or believe even if it doesn't align with. Like the person that's leading the team or the manager or the peers around them.

It's really easy to get a lot of people together. One person says something and then everybody agrees because they're afraid to challenge it. And that's when group think happens and lots of problems emerge. So having a [00:53:00] psychologically safe organization, not only is it increase the wellbeing for the individual, cause it just feels better to be there, but it also is beneficial for performance.

You will get higher levels of performance from people if they feel like they can speak up and be you know, safe in terms of being themselves.

Andy: What book do you want everyone on your team to have read?

Nikki: This is a terrible question because I'm like a bibliophie, so I have like a 50 in my head that I want to recommend.

Okay. So one of the books that I've been recommending to everybody lately is called how emotions are made. It's by Lisa Feldman Barrett, and she does, it integrates a lot of psychology and neuroscience and really challenges the way we've looked at emotions historically, especially in organizations, you know, in the past, it was very much like, keep your emotions at home, but that's literally impossible because we are human beings and we all have emotions regardless of the setting we're in.

[00:54:00] And what she does in that book is really. No, I'll give a little teaser. It's kind of cool. It's we used to think that like emotions happen to us. Like we were, you know, sad or happy, but what she describes is that our emotions are actually predictions. So our brain is like on overdrive, spinning past all the past experiences we've ever had, trying to find a situation that's most similar to that situation.

And that's why our emotions emerge. So if there's trauma, for example, like that's why people get triggered is because their body's literally saying like you've been in this situation in the past, get out right now. And so it's just a different way to look at things and it changed how I understood myself and how I understood others.

And I just think if you're going to work with anybody, like read this book because it's so fundamental to human beings and relationships and it's going to change the way you think about things because it's so revolutionary. [00:55:00]

Andy: All right. So How Emotions Are Made? I am ordering it right after we sign off.

Niko: I literally just ordered it.

Andy: Okay. So what are maybe one or two work changes that you've made since the pandemic started the plan to carry forward?

Nikki: You know, I've always been known to be like very unempathetic, like very, like most people tell me I'm intimidating and scary, and that blows my mind.

Cause I don't, I'm not self-aware enough to know how that comes about, but I think I have definitely made a very cognizant choice to put people over profit or compassion over productivity, especially right now with the pandemic. It's like, you know, I just wrote a blog about, you know, I'm sure you feel it or you've heard your friends say like everyone feels so tired and exhausted right now.

Part of that is that human beings only have a finite amount of cognitive resources and [00:56:00] energy. And when we are loaded with things like a pandemic and, you know, world war three threats, and, you know, it's just like climate change, like everything piled and piled and piled. These aren't just like little stressors.

These are like colossal, the planet is dying stressors. And so it takes away energy and emotion from us. I just, they cannot perform in the same way that they used to pre pandemic. Like I think about like the pre pandemic and I got up and went to the gym and, you know, did 10 and 12 hours a day of work.

And then I still had energy at the end of the day. And now it's like, oh man, eight hours. Wow. That was like, I'm so tired. It just drains you in a different way. So recognizing that, you know, we're all humans and this is a really stressful time and putting that, you know, it's not perhaps that this person can't perform well.

It might be the fact that like something going on in their life, a lot of people have lost family members or, you know, I have students who are from Ukraine, like just recognizing that [00:57:00] everyone has something going on right now, whether or not you see it. Putting that first, instead of jumping to the conclusion, like, oh, they're just being lazy or they're not performing.

Niko: I love that. I got goosebumps. Okay. So we got through rapid fire.

Amazing. I just want to thank you again so much for coming on and having this conversation with us. I've learned a ton and I took a ton of notes while we did this. And yeah, I am excited to continue the conversation with you because there's so much more I want to ask. So you'll definitely hear from us, but thank you so much for, for doing this.

Nikki: I feel like I have a lot to say so.

Niko: Well there, you have it. That's the show. Thank you so much to Nikki for sharing your knowledge here. And if you, the listener are interested in learning more about Nikki's work, check out blackhawke.io. There you'll find how Nikki and her firm approach this work with startups and VCs, as well as her academic publications, [00:58:00] if you really want to get into the science behind all of it.

Andy: And thanks for listening. If you want to subscribe and follow along, you can do so wherever you get your podcasts. If you liked the show, please leave us a review or share the podcast with a friend. That helps us grow the show. If you have feedback or would like to suggest a guest, email us at hi@peopleeverywhereshow.com. You can also sign up to hear about new shows at our website, peopleeverywhereshow.com.

Niko: Thank you so much for this. Goodbye