The role of rewards programs in building and sustaining culture
By Marty Parker
It’s easy to define the “cool things” that organizations make available to their team – pool tables, yoga classes, free lunches – as culture. Of course, employee perks and rewards programs can play a big part in supporting overall engagement and retention numbers. But in order for rewards programs to play a meaningful role in the building and sustainability of corporate culture, they need to be developed and implemented in a thoughtful way – one that speaks to your organization’s overall values and principles.
I sat down with John Nicola, Chairman and CEO of Nicola Wealth, to talk about the role of employee recognition and rewards in the development of a high performance culture.
The interview has been edited for length, but you can listen to the full conversation here.
John, Nicola Wealth really has 10 operating principles, and they really provide a roadmap to your business. How were they developed and how have they kind of helped define, represent, support the culture as they’ve developed and taken shape?
I’m a big fan of obviously reading other people’s expertise – you don’t need to reinvent the wheel on basic principles. I started way back in the day, long before the company was started, as a big fan of Scott Pack and Stephen Covey, and when a lot of people of course read all of their books as well. Then fast forward now today, in the last 20 years at least, huge Jim Collins fan, Simon Sinek and there’s so many great writers that really espouse great principles and articulate them so well that you can share them with other people and they’d get it right away.
In our case, our principles came from this smack formula concept that Jim Collins had. We are going to focus, which we always wanted to do at the beginning on business owners and professionals who are primarily self-employed and have a higher degree need for advanced financial planning. And at the same time would typically have a long-term higher amount of capital allocated for investment purposes. And so therefore they would be higher net worth clients. So that combination of things was what we wanted to focus on and we wanted to focus, for instance, as it’s turned out, it’s worked out pretty well, given our current experiences with COVID and what we’ve seen clients do. They said, “We will always operate very fiscally, conservatively. We won’t use debt, we’ll make sure that we have reserves and we won’t spend all of our money. And we’re in a position to deep pockets and persevere tough financial conditions.” Which obviously we’re in right now.
That held us in good shape in 2000 and 2008, and obviously it’s holding up very well for us now. So we have a lot of affirmation that these principles that we espoused at the beginning, actually make a difference. We’ve had a lot of reaffirmation that was the right thing to do. So we don’t really have any problem at all. New people coming on board, they sort of get it, they can see it and they say, “Okay, that seems to make sense to me.” Those principles have been the least contentious thing I would say that we’ve ever done.
Let’s move that onto how you have scaled the organization in terms of finding people that fit your “we share the pie”, mentality in your business, which isn’t as common as people may think. How have you done that? How have you focused on finding ‘we’ people as opposed to ‘I’ people in the wealth management side of your business?
I’m probably a tad naive on this topic. I have always believed from before we started the business that by giving things away, by paying it forward, any kind of other phrase or metaphor that you want to use, that there would ultimately be a reward. And I’m not thinking this from a spiritual or religious perspective, although one could make that case.
I think majority of people, in my opinion, as long as you have filtered for actual competence and other characteristics, integrity and work ethic and all of those things, will respond automatically to a share of the pie framework and they’ll respond to it in a way that will make a difference. That’s at least my experience and it’s been my experience for more than the 25 years we’ve been in business. It’s been at least my experience for 35 to 40 years.
The fact is that the larger the team gets, I remember one time when we’d developed our profit sharing and I said, “It seems to me that not everybody’s going to put the same effort into working and the profit sharing should at least be based on some way of analyzing the person’s actual performance.” I mean that seems logical to me. So I went to my younger colleague at the time (and she’s now our chief operating officer, Jamie Duncan) and I said to Jamie, “Okay, here we go. We’ve got this pool so we can either divide it up in some formulaic way, as it turns out a percentage of everybody’s salary, or we can have a measurement were you’re an A, B or a C and that will affect how much of the profit sharing you get.” She said, “Okay, well let’s ask everybody what they think.” So back then we’re talking 20 people. I said, “Well, they’re going to want to make sure everybody’s doing their job. They’re going to want to be sure that the people are performing.”
I was completely wrong. To a person, they said, “Just allocate it according to salary and we don’t want it to be individually measured on performance.” I said, “This makes no sense to me.” And she said, “Well, I asked them why they came up with that and they said, number one, we think that this is fair. Number two, we have got this covered anyway because we’re not letting somebody stay here that isn’t actually pulling their own weight. We got that. We don’t need you to come in and have these performance measurements of all of these people. We got this covered.” And I said, “Fine.” And we’ve been doing it that way ever since. We have never changed it.
John, and I’ve got a few other questions I want to ask about you, but Nicola Wealth has experienced significant growth, really significant in the past decade. But what have you done, do you think now as you look back, that really drove the engagement and the motivation among the team who drove those results? I mean, what do you look back at now and say, “Boy, these are the two or three things that really made a difference in our organization”?
Okay. Well, clearly the original principles that we had made a huge difference because the kind of people that we attracted were the kind of people that could respond to the ownership mentality and say, “Okay, yes, we see building this.”
I know our net promoter score is 67. So I’m looking at that and saying that’s the execution of people saying, “I’m willing to spend the time to make the person that’s coming into this company as good, maybe better than I am.” In this case as an advisor. It could be an asset manager, it could be a real estate acquisition specialist, whatever it might be. And this is our commitment to the company. So then basically you have this excellence and the excellence creates referrability, and so the process becomes very much self-perpetual. It’s like Jim Collins said, it’s the flywheel for us.
John, if there was one piece of advice that you were to give to someone on their high performance culture journey, whether they be an executive in an organization, a CEO, professional manager, an entrepreneur, what would you share with them?
Well, if I think about all of the things that are important from how things have turned out for us, I think depending on the role let’s say that executive has, the first thing would be really to be part of a team that really has each other’s backs, that really understands the direction they’re going in. They have to make a decision that somebody actually has to have the vision or the leadership to lead that team. But as Colin said, it’s kind of that servant leadership that the level five leadership requires, that CEO in that case to be able to say, “I’m here, but in a way I’m renting the space. So one of my responsibilities is actually to engage and create the continuity of the company.” That’s the framework of built to last for example.
I think the more that executives read and understand about what has and hasn’t worked in the past, the better educated they are about other experiences, then it’s easier for them to say, “This would be the right behavior to have here.” I think that that’s what I would look for from any executive moving forward to say, “I’m a learning machine and I’m simply going to continually get better at what I do. I’m not thinking I’ve mastered this.” Or even if you get to be the CEO, it’s just the beginning of that learning process as far as I can say.