Michael Kiolbassa, President at Kiolbassa Smoked Meats, describes how unconscious commitments were holding him back, how values-based leadership training put the organization on the right path, and how opening the books magnified the trust in his organization and unleashed creativity.
Episode with guest: Michael Kiolbassa
President at Kiolbassa Smoked Meats
(This episode was recorded in September of 2019.)
Key Episode Take-Aways:
1. Realizing the unconscious commitments that are holding you back. (click to jump to this topic below) And I said, well, okay, if there's one unconscious commitment that I have, it's I've got to have my finger in every area of our business. And he said, great, write that down. So, I did. He said, how do you do your unconscious commitment? I said, well, I'm in charge of sales. I'm in charge of marketing. I get involved with production. You know, I'm involved in meat procurement. He said, great, write that down.
2. If the work you're doing within your company does not align with its values, it might be time to make some changes. (click to jump to this topic below) We started looking at our customers and our suppliers through the lens of our values and ask ourselves, do they align with our values? Some didn't. And we made changes. We started focusing on building relationships and building trust within the organization, I became much more vulnerable, opening up opening myself up to feedback, listening more than talking, coaching.
Continue scrolling to read the full episode transcription.
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Welcome to the "Change the Game" podcast, where we share stories of open book management and highlight capitalism at its best. Thank you for tuning in to this episode of the "Change the Game" podcast. In this episode, we pulled out a keynote speech from our great game of business conference, Michael Kiolbassa of Kiolbassa Smoked Meats, describes how unconscious commitments were holding him back, how values-based leadership training, put the organization on the right path, and opening the books magnified the trust in his organization, and unleashed creativity. We hope you enjoy this keynote as much as we do.
Steve Baker 1:17
Give us the warmest community welcome you possibly can to bring Michael Kiolbassa to the stage.
Michael Kiolbassa 1:35
Glad to be here. How many of you in the audience have ever been ready to surrender? hit a point where you're stuck. Where you're asking yourself, Is this what I really want? Or could there be a better way? It was the summer of 2009. And that was there. I was on the verge of burnout. I had, I was stuck. I was tired. I felt isolated and burden. And then one morning while I was on vacation in Mexico, I was having a conversation with God. And this is what kind of look like. And I made a decision that changed my life, our company, and a lot of people around me. And this was my story. My story begins with my grandparents, Rufus and Juanita Kiolbassa. Excuse me, he started our company in 1949. I never met my grandfather, because he passed away before I was born. And when he got sick, my father dropped out of college, to run the family business. And he was very successful. He grew the business steadily. In 1977, he added cattle and hog slaughtering to our operation. And that's the business that I grew up in. As a teenager, working summers and holidays. When I graduated from SMU in 1984, I fully expected to go back and work for the family business. But my father and his wisdom said, Not so fast, once you go work for somebody else for a few years, and then come back, if you're if you're still interested. And so, since my degree was in finance, I went to work for a commercial bank as a credit analyst, which was a great decision for me. But after a couple of years, I decided that I was ready to come back, give it a shot. And so, I asked my dad if he would give me a chance at the business. And he acquiesced. And so, in March of 1987, I joined the family business. That's a very young picture of me and my father. With my background in banking and understanding how margins work, I knew that we needed to focus on the sausage brand, and build that, which was a pretty tall order considering that 90% of our some of our sales were in the slaughtering side of our business and only about 10% were in the sausage brand. But we worked hard, we took some chances, we invest in some local media, and we grew the brand. By 2003. We successfully exited the slaughtering business expanded our sausage capacity. In 2008. We added the private label product of a large grocery store chain in San Antonio. And we grew that so we were successful. And this is what our sales look like from 1990 to 2009, we'd grown the business from a little under a million dollars in sausage sales to over 20 million But this is where my story really begins. So back to that, that moment. In Mexico, I was stuck. Our top line has grown. But our bottom line wasn't. I was stressed. And on that morning, I said to God, look, I've done it my way for 22 years, I think I'm going to give you a shot at it now. That's really what I said. You know, it was a moment of surrender. I didn't plan it. It was unexpected. It was unplanned. And I was really unsure of what was gonna come next. But I opened myself to new ideas and challenges from people. And one of the first challenges came from a YPO resource named Jim Warner. And Jim. I'd brought Jim in for a Chapter retreat that I was leading. And at the end of the chapter retreat, he asked us a question. He said, I want you to name an unconscious commitment that you have. Well, my gut reaction to Jim's question was That's pure psychobabble. I'm perfectly aware of all the commitments I have. And I told him that and he looked at me and he said, Michael, I've known you for two days. And I can tell you are full of unconscious commitments.
1. Realizing the unconscious commitments that are holding you back.
And so, I said, Well, let me think about it. And I thought about it for a moment. And I said, well, okay, if there's one unconscious commitment that I have, it's I've got to have my finger in every area of our business. And he said, great, write that down. So, I did. He said, how do you do your unconscious commitment? I said, well, I'm in charge of sales. I'm in charge of marketing. I get involved with production. You know, I'm involved in meat procurement. He said, great, write that down. So, I did. He said, how does your unconscious commitments serve you? Which was an interesting question. I said, Well, makes you feel like I'm in control. Makes me feel like I know what's going on. Makes you feel like I'm earning my paycheck. And if I'm completely honest, it makes me It feeds my ego. He said, great, write that down. So, I did. He said, What's your risk if he change? I said, Well, loss of control, loss of income if people make mistakes, and loss of ego. He said, great, write that down. And then he said, Is it working for you? I said, no, it's not. Our top line is growing. But our bottom line isn't. I said, I'm probably not a very good leader. I know I could be a better husband and father. He said, great, write that down. So, I did. And then he asked me, Are you willing to change? And I said, Yes, I am. And so, he walked me through writing what he called a clean commitment statement, where he was working on the business, rather than in the business. And what he was really doing is he was walking me through this breakthrough here of fear. Through those questions, he was asking, he was giving me the courage to break through this right here because I was stuck up here. So went back to the plant the next day, I walked into our VP productions office, Ishmael, he's standing sitting right over there. And I said, it's small from now on, I don't have anything to do with production. I said, if something's wrong, and you need me, come get me. But otherwise, you handle it. And he looked at me and he said, Michael, it's about time. Then I walked over to a young lady we had just hired to lead our quality assurance. She had a master's degree in animal science was incredibly smart and bright, eminently qualified. And I said, Stacy, how would you like to start buying all of our meat? You're eminently qualified you; you know, I can show you the process. He said, I would love to. And so, I handed that off. And slowly I started handing off tasks that I had assumed, you know, and what that did, it gave me time to take out people on the floor and focus on our culture. And what I learned when I took guys out on the floor for lunch, changed my focus quickly. What I learned from those lunches was that as on that journey to grow our business from a little under a million to 20 million we It promoted people into leadership positions without giving them any leadership development. And we had a lot of dysfunctional leadership in our company as a result. So, I went to our HR director, and I said, we need to find a leadership development program for our team. And that's when we stumbled on Ken Blanchard's values-based leadership model. Before he implemented it, I reached out to Guy Clumpner, the president of HOLT Development, who had introduced us to values based leadership. And I said, can you give me the name of somebody who has successfully implemented this is Troy he caught he put me in contact with a guy named Charlie Luck. Charlie is a third generation to run his family stone quarry business based out of Richmond, Virginia. And so, I called Charlie and I said, Charlie, this is who I am. And this is what I do. And we're interested in values-based leadership. Can you tell me a little bit about it. And so, for the next 30 minutes, Charlie grilled me, basically trying to see how tough I was. And finally, I stopped him. And I said, Charlie, look, I just want to find out about values-based leadership. And he said, Michael, if you decide to implement values-based leadership, it will be the hardest thing you ever do. I said, why? He said, because values-based leadership isn't about fixing others. It's about fixing yourself. I said, oh. So, he said, Look, come up to Richmond. You can spend the day with our team, you can see what values-based leadership looks like and decide if that's something you want to implement. So, I did a flip to Richmond, spent the day with Charlie and his team, and knew immediately that this was what I wanted to do. So, I came back. And we spent about six months working on our core values, our mission, vision and core values. And it took us that long because I didn't want this to be my vision, mission and core values, or my family's mission, vision and core values. I wanted it to be our team members, mission, vision and core values. And basically, when we implemented this, we put this up all over our plant, every production room, every office, every meeting room, and this became our Bible, I would tell people, you can make $100,000 mistake. But if you're in line with this, you're safe. You can make $100 mistake. And if you're not aligned with this, you're out of here. That gave our team an enormous amount of clarity over what's important. We also started teaching the five values-based leadership tools, which are disc, situational leadership, principles of persuasion, influencing and conflict resolution. For the first time, many of our employees, this was the first time they had been exposed to any kind of training, and they soaked it up. It also changed the way we did business. We started hiring based off of values, alignment, adaptability and learning aptitude rather than just technical skills. We started looking at our customers and our suppliers through the lens of our values and ask ourselves, do they align with our values? Some didn't. And we made changes.
2. If the work you're doing within your company does not align with its values, it might be time to make some changes.
We started focusing on building relationships and building trust within the organization, I became much more vulnerable, opening up opening myself up to feedback, listening more than talking, coaching. Instead of being a boss, culture became my priority. And we're setting the foundation of a truly values based culture. Essentially, what we were doing is creating a culturally safe environment where people felt safe, to take risk, to fail fast, and to lean in this into discomfort. Because you can't grow if you're in your comfort zone. So, we set this values-based culture. This was late 2012. And just in time, because we were getting ready to go on a wild ride of growth. In 2012, I brought in our first big hire from the outside a guy named Chuck Harris. He was had been VP of Sales for Tyson Foods, and I brought him in to help build our sales organization and lead us to the next stage of growth. And Chuck did his job by 2013. We're growing 25% a year. This is what we look like on the outside. That's what we felt like on the inside. We felt like that because all of our systems and processes were not ready for that kind of growth. And so, we needed help fast. And so, I reached out to Vern Harnish, many of y'all know Vern, author scaling up, and the Rockefeller habits, and I described my situation. And Vern said, You need to go by the Greg game of business book and go visit jack. So, this was August of 2013. And I read the book and over a weekend, in a book two tickets. For the next gathering, which was in September of 2013, I grabbed Michael Johnson, a young guy that worked for his very smart guy. He is the exact opposite of me in terms of temperament. So, I knew that if this was going to work, if both of us thought this would work in our in our, in our company, it would be a good thing for us. I also wanted to make sure that the great game of business operating system didn't conflict with the values base, organization and culture that we just implemented. So, we came to the gathering in 2013. Every evening MJ and I would go grab a beer, talk about the breakout sessions and what we had heard people we had met. And we came to the same conclusion that the great game, the business operating system fits so well into our values-based culture, that if we didn't implement it, we'd be violating our own core values. So, in October of 2013, we hired the great game of business and we opened up the books and I was nervous. I was nervous because we had lost more money in August and September that year than we had made in some years. And although our top line was growing, we were we were not making the kind of money we should have been making. And I was worried that all the talent that I brought in was going to run for the exits when they saw the red ink, and those that had been left. Those who stuck around would be paralyzed by fear. But just the opposite happened. Immediately when we opened up the books, people started brainstorming about how to save money, improve processes, improve yield reduce rework. We started, we started doing many games, we started having weekly huddles, we started scoreboard and our KPIs. Essentially, the transparency of opening up the books magnified the trust in the organization, which unleashed creativity. So where does this lead us? To is 2012 when we implemented this stuff, we have grown our business approximately 400% in seven years. Most importantly thank you. Most importantly, the bottom line is growing faster than the top line now. We have we have a bonus program for our team members. We have the most highly financially literate team in our industry. We've been named a top workplace in San Antonio, four years in a row. We, [clapping] thank you, we are the most engaged and energized team that I've ever seen. And for me, well, it's been an answer to prayer. And I've never been more fulfilled in my life. Thank you.
Steve Baker 19:26
Well, let's keep the conversation going. guys send us your stories, your best practices, your ideas, your challenges, your victories, your questions, and remember, you're not alone. This is capitalism at its best. Thanks for joining us. We will see you next time.
The "Change the Game" Podcast is produced by the Great Game of Business. To learn more, visit greatgame.com