by Rich Gallun
Former CEO, bswift
October 2016
In reflecting on my 15 years as CEO of bswift (2000-2015), I’ve concluded that the key to our emergence as a leader in the benefits technology market was embracing the idea that “culture eats strategy for breakfast.”
This quote, attributed to Peter Drucker, is based on the belief that company culture is actually more important than strategy in terms of driving overall business success and creating long-term value. As Danny Meyer, CEO of Union Square Hospitality Group and creator of numerous successful restaurants, including Union Square Café, Gramercy Tavern and the Shake Shack, noted at our 2015 bswift Summit, company culture is really just a function of the people who work within the organization, their values and how they work together. And cultures are either positive and reinforcing, or negative and toxic. For those organizations with winning cultures, it means high customer satisfaction and loyalty and, in turn, positive business and financial results. For the rest, it means disengaged employees, high turnover and less favorable business results.
Upon my departure from the company, one new bswift customer noted to me that he truly appreciated the “yes, we can” attitude of the bswift team he worked with and highlighted how “refreshing” that was in the very challenging world of benefits administration and technology. He was not alone. Over the years, I received countless customer comments along the lines of “you have great people; just don’t lose your company culture and keep doing what you’re doing.”
As a result of our winning culture, bswift thrived, achieving industry-leading customer satisfaction and Net Promoter Scores and sustained growth rates in excess of 40% per year. The keys to building that winning culture were rigorous hiring practices, purposeful onboarding and constant reinforcement of our values. Yes, our hip and open downtown Chicago office and fun company events helped attract and retain top talent, but we learned that it was our hiring and ongoing reinforcement of our values that really impacted our company culture.
But that didn’t all happen overnight. In the early 2000’s, I remember benefits technology consultant Joe Markland of HRT looking at our bswift sales presentation and laughing that he had seen the same pitch from hundreds of companies with the same business plan. So how did we emerge as a leader, where many others languished or failed? I would argue it was a function of how we learned to translate our values into actions, and to work together to create a winning culture. In our early years, we had a small startup’s “whatever it takes” attitude emanating from a small core group of employees, but as the company grew, we experienced some challenges in scaling that culture. We learned the importance of hiring only people who could show that they had already lived our values, and of reinforcing those values to one another on a daily basis.
Creating and sustaining a winning culture wasn’t easy for the team at bswift. It required a level of dedication, and, yes, sacrifice, beyond what many people thought was a reasonable amount. bswift definitely wasn’t a workplace for everyone. Finding candidates prepared to work at the level required to win in the competitive benefits technology marketplace was exhausting. The ever present temptation to just fill a position with a candidate who was “good enough” was always tough to resist when in rapid growth mode. But that attitude doesn’t win in the long term.
When we hired at bswift, we were looking for candidates with a track record of already living our core values of “Higher Standards, Greater Accountability and More Fun.” My top priority as CEO was to hire employees who lived up to these values and who motivated other employees to do the same. Especially over my last five years, as the number of employees grew dramatically, one of my most important roles as CEO was to participate actively in the interviewing and hiring process. And in some cases, to say “no” to many candidates who others thought were “good enough.”
Geoff Colvin’s book, “Talent is Overrated,” shed light for me on how people who demonstrated these values early in their lives often end up with success later in their professional careers. Colvin summarizes the research on outstanding performers in a diverse set of fields – from business (Microsoft’s former CEO Steve Ballmer and GE’s CEO Jeff Immelt) to sports (Jerry Rice and Tiger Woods) to music (Mozart) – and concludes that excellence in any field is a result of “deliberate practice” or “focused hard work” that many others would not consider to be fun or rewarding. But these top performers are motivated to do the hard work because they see the payoff in terms of progress, improvement, and, eventually, outstanding results.
To me, the takeaway is that young people who demonstrated high levels of achievement – especially in extracurricular activities such as sports, music or part-time jobs – learned the critical linkage of “practice” to “excellence.” These people recognize that making a varsity high school team or a spot as first violinist, for example, is difficult, and requires preparation and consistent performance. It’s not a random act to earn these spots. And they learn that talent is not the key driver of results, but rather that practice is. In sum, they learn that hard work results in progress and progress is rewarding, especially as part of a team.
Given thousands of interviews over the past 15 years, and eventually with over 500 employees on the bswift team, we certainly made many mistakes in hiring but also discovered many gems. Ray Seaver (former EVP, bswift and now CEO of zizzl) and I gained a reputation around bswift as being the last interviewing hurdles – and often challenging ones – to earning a spot on the bswift team. I had no qualms saying “yes” to countless numbers of former high school athletes, musicians, actors and others who demonstrated that they can contribute to a team or work challenging jobs AND also do well academically. And many of these people became emerging superstars at bswift. My insight is that it’s not about just hiring the star of these teams, but rather finding those people who’ve learned how to work hard (“deliberate practice”) and stick with the team in good times and in bad, over the course of multiple years of commitment. On the other hand, I was also consistent in saying “no” to many who “dabbled” in various activities without really finding themselves yet. I called them a “bad bet” and discouraged hiring them. We learned that it did no good for bswift – or for the candidate – to hire someone who thought that he or she could just go through the motions at bswift and do OK. For these situations, Ray and I provided the hiring manager with this input, but let him or her make the final “yes or no” hiring decision. Unfortunately, we were on target more often than we would have liked when these people didn’t make it. As we all learned together at bswift, many candidates knew how to “talk the talk” during the interview process, but far fewer really knew what it meant to “walk the walk,” at least how we defined that at bswift.
Personally, I learned many life lessons through my participation in youth sports, and that has certainly had an impact on how I look at the world. When I was 10, I became interested in playing competitive tennis and sought private lessons to make me better. Rather than immediately indulging me in my new interest, my parents intelligently created an incentive system to encourage practice. They told me that for every 10 hours of practice on my own, I would earn one private lesson. They figured that would translate into about one lesson per week. Instead, I practiced 6 to 8 hours each day for the whole summer (it was fun, given the camaraderie amongst my fellow tennis players) and earned enough private lessons for a lifetime. But that wasn’t the payoff. Instead, the payoff was improving at such a dramatic pace that within three months I had climbed the ladder of the 10 and under rankings in the state of Wisconsin and won the Wisconsin State Open that summer. My “deliberate practice” paid off.
However, I also learned what happens when there is a lack of “deliberate practice.” For the next four years, from age 10 to 14, my state ranking declined at a steady rate, because I didn’t practice enough, and my peers did, most of them playing all year round. I did not put in the time and effort to keep up with a competitive world and by the time I was 14, my competitive youth tennis career was over. Over the course of my youth and professional career, I have experienced this effect multiple times – entering a time period of complete intensity (and practice) in a pursuit and being rewarded for that passion, and then also seeing the other side when my intensity and practice did not keep up and unfavorable results followed. In sum, I’ve learned that you really need to have your head completely in the game, whatever that game is.
After tennis, I took up ice hockey. The compelling element about hockey was the team aspect and my favorite lesson was in discovering that a “line” of three less talented individuals could beat a more talented one through better teamwork as a result of practicing and playing together. So much about success in hockey – and any team sport or profession – is how it is driven by the teamwork, anticipation and trust that comes from players working together. In hockey (and later in software development), I learned how “deliberate practice” could turn an inauspicious threesome into an indomitable machine.
In both of these experiences, I also learned that sometimes you get scored on and sometimes you lose, and it’s in those times of adversity that a player’s true colors come to light. Some people – even those with great talent – point blame, lose their cool, whine, cheat or quit; others work harder, as adversity becomes a learning opportunity and rallying cry for them rather than a demoralizer. In essence, “Greater Accountability” can be the ultimate motivator. The beauty of sports is that the results of toxic behaviors become highly visible to people fairly quickly. When I was 10, I learned that I’d rather lose than to be called a cheater. And in hockey, I saw how the fastest skaters at 14 became relatively slow by 17 if they didn’t work as hard as their teammates, especially during painful end-of-practice wind sprints. “Higher Standards” is not a static state; instead, it is earned daily through hard work.
These experiences in youth sports helped me understand that success comes from hard work at both an individual and team level, and that hard work – when combined with visible signs of progress – actually can be “More Fun.”
Of course, the correlation between success as a youth and success as an adult is not perfect. Just because a candidate brings a track record of achievement as a youth doesn’t automatically mean that person will experience success in a professional career. I’ve seen plenty of disappointments along the way. Sometimes early success can be illusory, a function of something other than hard work. Or sometimes people don’t learn the right lessons from their youth experiences, often as a result of misguided mentorship from parents, teachers or coaches. For others, a demoralizing work environment can change a person’s view of the world. Non-challenging early jobs, political organizations without strong meritocracies, or being surrounded by mediocrity in the workforce can have a way of sapping the work ethic out of people. On the other hand, the reverse can be true as well; some people don’t find their passion until later in life and then when they do, they’re all in. At bswift we benefited from a number of major contributors over the years who surprised us all with their Higher Standards and Greater Accountability despite average-looking resumes. Most of them had something in their past, however, that spoke to a strong work ethic and Higher Standards. That’s why it’s important to take lessons from the Bradford Smart’s book “Topgrading” and to understand the full trajectory of each candidate’s story, from high school forward.
As I reflect on bswift’s success, and on the people that really made it happen, I am most proud of the team that we put together and how we worked very hard to win in the competitive world of benefits technology and services. I believe it was a function of hiring those people who understand the connection between hard work, teamwork and success, and who hold each other accountable to that standard as well. Typically, those people demonstrated that connection before they came to bswift, in sports, music, theater, other jobs, or some other pursuit where they put in the “deliberate practice” to actually “walk the walk” of Higher Standards and Greater Accountability. And the result was a winning team that was More Fun for everyone.
