IAM1735 – How Does Company Culture Make an Impact to Our Employees?

Robert Kohlhepp Teaser 00:00

But I'm gonna go over roadblocks. I'm gonna go through roadblocks. I'm gonna go under roadblocks, but I'm gonna get to where I'm going. That dogged determination, in my opinion, is the single most important ingredient in every successful person.

Intro 00:16

Do you want to learn effective ways to build relationships, generate sales, and grow your business from successful entrepreneurs, startups, and CEOs without listening to a long, long, long interview?

If so, you've come to the right place. Gresham Harkless values your time and is ready to share with you precisely the information you're in search of.

This is to I AM CEO podcast.

Gresham Harkless 00:43

Hello, hello, hello. This is Gresh from the I AM CEO podcast and I appreciate you listening to this episode. If you've been listening this year, you know that we hit 1600 episodes at the beginning of this year. We're doing something a little bit different where we're repurposing our favorite episodes around certain categories or topics or as I like to call them, the business pillars that we think are going to be extremely impactful for CEOs, entrepreneurs, and business owners, and what I like to call the CB nation architects who are looking to level up their organizations.

This month we are focused on our greatest asset; talent management and hiring. Think from great resignation to the great renovation and if you disagree with me, maybe these episodes might be especially for you. Life and especially business has changed. It has forced those that are within organizations to look differently at talent, and how it's being managed.

When we talk about change, think about it, we have to realize that business as usual is no longer here, and that's evident in attracting and retaining clients, but also in setting up people within organizations to succeed. Think onboarding, think DEI- diversity, equity, inclusion, and belonging. How it is working from home and even going back into the office.

Things are different in this month, we are going to explore these topics by featuring CEO hacks and CEO Nuggets, but also interviews that focus on these changes and how organizations can make sure they care for and attract the most valuable asset, their people. Sit back and enjoy this special episode of the I AM CEO podcast.

Hello, hello, hello, this is Gresh from the I AM CEO Podcast. I have a very special guest on the show today. I have Bob Kohlhepp of Cintas. Bob, it's great to have you on the show.

Robert Kohlhepp 02:13

Gresham, thanks for having me.

Gresham Harkless 02:14

Yes, super excited to have you on. And before we jump into the interview, I wanted to read a little bit more about Bob, so you hear about all the awesome things that he's doing.

Bob is the retired chairman of Cintas Corporation. Robert slash Bob actually joined Cintas in July 1967 as a Controller, he was promoted to the positions of General Manager, Vice President, and Treasurer, and in 1979 he was elected Executive Vice President and member of the company's Board of Directors.

In 1984, Bob was elected President and in 1995 he was elected Chief Executive Officer. He served as a Vice President Chairman from 2003 to 2009, and as a Chairman of the Board from 2009 to 2016.

Bob, super excited to have you on the show. Are you ready to speak to the I AM CEO community?

Robert Kohlhepp 02:57

Let's do it.

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Gresham Harkless 02:58

Let's make it happen then. So I know I touched on your story a little bit, but I wanted to rewind the clock and hear a little bit more on how you got started, what I call your CEO story.

Robert Kohlhepp 03:05

How I got started at Cintas?

Gresham Harkless 03:07

Yeah, absolutely.

Robert Kohlhepp 03:08

I was in public accounting. I was a practicing CPA and one day the telephone rang and a gentleman on the other end of the phone was named Dick Farmer, who's the founder of the company. He called me up and he said he heard about me and would like to talk to me about coming to work for him. And I said Dick, thank you very much for calling. I'm really not interested. I'm happy where I am and I hung up.

Dick was a very persistent guy. He kept calling back and he finally convinced me that there was no harm in at least meeting him and talking about it. We met and we really hit it off. He had a vision of building Cintas into a national company and he said he thought I could play a key role in making that happen. I was 23 years old at the time, so I figured it was worth taking a chance and the best decision I ever made was going to work for him.

Gresham Harkless 03:54

Yeah, it sounds like you made a really great call in terms of taking that phone call, taking that opportunity, and kind of hitting the ground running from there.

Robert Kohlhepp 04:00

Absolutely. It was a difficult decision. I had a hard time making up my mind. I prayed about it and decided that it was the right thing to do.

Gresham Harkless 04:07

Yeah, absolutely. Could you take me through a little bit more about Cintas and what you all did and how you made an impact for the clients that you work with?

Robert Kohlhepp 04:14

I started in Cintas in 1967, as you said. At the time I started, the company did about 1,000,006 in sales. Had 62 employees barely made a profit. Today we have almost 8 billion in sales 40, almost 42,000 employees in our very profitable company. We focused on taking care of our customers, building the business. We focused on our employees, hiring good people, motivating those people.

If you would ask me today if I'd ever dreamed Cintas would be as big as it is I would tell you no. But we developed goals in five-year increments. When we were doing a million and a half, we said, how can we get the 10 million? And when we got the 10 million, we said, how can we get the 25 million? And did it in five-year increments and we continue to do that today.

I think the company's founded on great customer service, great products, care for our customers. Actually, we review our customers because they're paying for everything. Some companies haven't figured that out, but we certainly did. And then we focused all on our people, hiring good people, quality people who were dedicated, willing to work hard, shared the vision we had and the culture we had at the company and it all worked out very well.

Gresham Harkless 05:29

Yeah, I don't know if you can call it five years of Sprint, but it feels like that in relation to the timeline of how you were able to get and continue to grow it and see that success.

Robert Kohlhepp 05:37

Yeah, absolutely. It was something that was thought out and well-planned. We had a very good plan for each five years and I think it's difficult to plan beyond five years because the environment in which you're operating changes so much.

I think trying to come up with a 15 or a 20-year plan is just not appropriate because of the changing environment and the situation. But it worked well for us and we still do that today. The five year, the goals didn't change, but the strategy, because the marketplace was changing, the customer base was changing, our business was changing, and so the strategy to accomplish the goals is what really changed.

Gresham Harkless 06:14

Nice. Yeah, I think that's a big part. And especially as we talked about, with change, so many times people think that you for lack of a better term, move the goalposts and you decide to change what the goals are. But in reality, what you wanna do is realize that I guess environment or the industry might potentially have disruptions or changes. So you change the strategy so that you can still reach the goal, you just might have to do it in a different way.

Robert Kohlhepp 06:35

Exactly right. Yes.

Gresham Harkless 06:37

Awesome, awesome, awesome. So what would you consider to be what I like to call your secret sauce? This could be for yourself, the organization, or a combination of both, but what do you feel sets you apart and makes you unique?

Robert Kohlhepp 06:46

Well, Gresham, I think the secret sauce is the culture that we have at Cintas. Every organization has a culture. If you think about any jobs you've had, if you think about the high school you went to, the college you went to, there was a culture there. There's a culture in every business and every organization. What so many companies don't do is take the time to define what that culture is and what they want it to be. Then to be sure that people are living by that culture and buy into that culture and be sure that people who you hire are compatible with that culture.

That doesn't mean that we're better than they are or worse than they are. But if they're not compatible with our culture, they don't believe in honesty and integrity, hard work, taking care of the customer, treating every employee with respect. If they don't believe in those things, they're not gonna fit well in Cintas. They're not gonna do well in Cintas.

And so what our interviewing process was as much focused on is this person going to be compatible with our company as it was, does this person have the skills it takes to do the job? And so defining that culture and cultivating that culture in making sure that everybody was in sync with that culture was the secret sauce.

We called it the ultimate competitive advantage because it's difficult to copy. You can't see it, you can't feel it, you can't touch it. It's not a product, it's not a service. It's an intangible that exists within an organization. And if you can get the vast majority of the people in the organization to buy into that culture, it becomes an awesome force. That's what we had and have, and still have today.

Gresham Harkless 08:21

Awesome. I love that and I appreciate you breaking that down so much. I love how you said the ultimate competitive advantage because I think, as you said so well actually creating a space, taking the time, and even investing the resource into creating that culture.

Robert Kohlhepp 08:32

And I think the other thing too that we worked very hard on was making the culture of Cintas. Not my culture, not the CEO that I succeeded, or the CEO that succeeded me. If you think about Lee Iacocca, when he took over Chrysler many years ago, really turned the company around, and took it from a loser to a very successful company, completely redesigned the way they designed cars.

And he used to have this ad, if you could find a better car, you could go ahead and buy it because we make great cars and you ought to look at our cars. He did a wonderful job there. But when Lee Iacocca retired and left Chrysler, it went right back to where it was before because it was Lee Iacocca's culture, not Chrysler's culture, therefore it didn't span the test of time.

And so what happens is, if it becomes an individual's culture, when that individual leaves, all of a sudden a new person comes in as a new CEO, they have a different culture, different values, and all of a sudden people have to adjust and change everything they're doing. We made sure it was Cintas culture, not my culture, not the founder's culture, not my successor's culture. I think that's very important that it becomes the company's culture, not the individual management team's culture.

Gresham Harkless 09:45

Yeah, absolutely. So I appreciate you so much and sharing that and how that, again, has been those foundational, blocks and that fabric according to everything you all have been able to do.

So I wanted to switch gears a little bit and I wanted to ask you for what I call a CEO hack. So this could be like an app, a book, or a habit that you have, but what's something that you feel like makes you more effective and efficient?

Robert Kohlhepp 10:05

I would say I was asked recently what is the most important trait of a successful person? And without hesitation, I gave this answer. I believe the most important trait of any successful person is dogged determination. You're going to get knocked down. There are roadblocks in the way, orange barrels everywhere. The road to success is always under construction. The people who are successful are the people who understand they are are gonna get knocked down, and when they do, they dust themselves off. They get back up, and they get right back into the game.

I think that determination is more important than intelligence. It's more important than your looks. It's more important than anything. If you have that dogged determination I'm gonna get this done, I'm gonna do it honestly, I'm gonna do it fairly, but I'm gonna go over at roadblocks, I'm gonna go through roadblocks, I'm gonna go under roadblocks, but I'm gonna get to where I'm going. That dogged determination, in my opinion, is the single most important ingredient in every successful person.

Gresham Harkless 11:06

Absolutely. Absolutely. So I wanted to ask you now, you might have already touched on this, what I like to call a CEO nugget. So this is a little bit more of a word of wisdom or piece of advice. I like to say it might be something if you were to hop into a time machine, you might tell your younger business self.

Robert Kohlhepp 11:20

My nugget would be the importance of hiring. If you look at what it costs to turnover, have turnover in your organization, it's very expensive. In fact, I've recently read that the national turnover rate in the country has gone from 57 to 75%. That means three, not three out of every four people, because sometimes it's the same person more than once, are leaving their jobs and going someplace else.

Turnover is one of the most expensive expenses that you have that are not on your operating statement. And so many companies don't focus on the number one reason we found for turnover was that we didn't hire the person properly. We shouldn't have hired them in the first place. So we developed a program called Meticulous Hiring. You went on many interviews before you got a job from us. We were not only focused, as I said earlier on, is this person qualified to do the job, but is this person gonna be compatible with our organization. Are we gonna like them? Are they gonna like us? And is it a good marriage instead of a strained marriage?

We checked references very carefully. We, in interviews, ask a lot of behavioral questions because we believed that past behavior predicts future behavior. So we would ask questions like, who's the best boss you ever had? And why? Who's the worst boss you ever had and why? What's the toughest decision you ever made? How did it turn out? Why did you do what you did? Who are you? Who's your best friend? Who do you associate with? Tell me about your family and your upbringing and so forth.

We would get into a lot of behavioral questions trying to create questions that ask about a situation and how the applicant would deal with that situation. You learn a lot about people that way. In your last performance review, what areas did your boss tell you needed to improve, in the reference check I would ask the former boss the same question. You'd be surprised how often I got different answers from each party.  So my point is this. The importance of hiring the right people is critical so that those people stay with you, they're successful with you, and they're compatible with you because if you lose them, it's very expensive.

The other thing I would tell you is that when you have an employee who has done a good job for you and they walk in and they quit, fight like crazy to keep them. We used to talk about 20%, 25% of the people who resigned had another job out of leaving and staying with us because we knew how important they were to us. So, my nugget would be really focused on hiring decision. Don't get worn down because you haven't found the right candidate. Don't compromise because a person's good, but not quite what you really wanted until you find the right person that's a good fit. Meticulously hire the people who join your organization.

Gresham Harkless 14:05

Nice. I absolutely appreciate that, the meticulous hiring. I wanted to ask you now my absolute favorite question, which is the definition of what it means to be a CEO. We're hoping to have different quote and quote CEOs on the show.

So Bob, what does being a CEO mean to you?

Robert Kohlhepp 14:17

Being a CEO is a very big responsibility for people who do it properly, in my opinion. When I was a CEO, I think we had as many as 30,000 people before I retired. I worried very much every day, every night about am I making the right decisions for those 30,000 people?

People are counting on you to make the right decision. You need to be very careful in your decision-making process. You may need to make decisions for the benefit of all those people, not just yourself. Not just the people in the C-suite, but every single person that works in your company.

I took that very seriously and it's a lot of pressure. I'd say the only other pressure that I ever had in my life was being a father. There's a lot of pressure on that too because it's more an emotional pressure than it is anything else. But I think taking into account that you are making decisions for a lot of people in your organization and those decisions have to be well thought out, planned, and well executed because it's a CEO's responsibility to do that.

Gresham Harkless 15:19

Awesome. I appreciate your time even more. What I wanted to do now was pass you the mic, so to speak, just to see if there's anything additional that you can let our readers and listeners know, and of course, how best people can get a hold of you, find about all the awesome things you and your team are working on.

Robert Kohlhepp 15:31

Well, one final thing I guess I would say is to have high expectations for yourself, for the people who work for you, and for your organization. You should always aim high.

Gresham Harkless 15:40

Awesome. For people that wanna get ahold of you, what's the best way for them to do that?

Robert Kohlhepp 15:44

I've written a book called Build a Better Organization. I have a website, robertkohlhepp.com, where you can order the book that way and hear my podcasts and read some of the articles I've written. It's also available on Barnes and Noble and Amazon.

Gresham Harkless 15:59

Awesome, awesome. And to make it even easier, we'll have Bob's information in the show notes as well too, so they can subscribe to his podcast, get a copy of your book, find out about all the awesome things that you and your team are working on, and I hope you have a phenomenal rest of the day.

Outro 16:09

Thank you for listening to the I AM CEO podcast, powered by CB Nation and Blue 16 media. Tune in next time and visit us at iamceo.co. I AM CEO is not just a phrase, it's a community.

Check out the latest and greatest apps, books, and habits to level up your business at ceohacks.co. This has been the I AM CEO podcast with Gresham Harkless, Jr. Thank you for listening.

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