Tony Mirchandani is CEO of RTM Associates, an engineering consulting firm with licenses in all 50 states. Tony has 15 years of experience in management while working in the field of engineering consulting. He has been honored for his work on multiple occasions, including making the cover of Inc. magazine and was listed as one of the Who’s Who of Executives and Professionals in Lexington.

RTM Associates is a company which relies on a strong set of core values which works in conjunction with the culture of the company to provide a customer focused approach to company practices.

Want to hear more from Will?
Subscribe to Culture Czars podcast on:

Here’s a glimpse of what you’ll learn:

[02:08] The environment of Corporate Culture
[08:11] The implementation of RTM Associates’ core values
[19:06] The benefits of a strong Corporate Culture

Resources:

Connect with Will:

Episode Transcript

Announcer: From Core Values to Valued Culture. Here is your host, Will Scott, interviewing another CEO about leading culture in their company.

Will Scott: Welcome, listeners, to another Culture Czars interview where we talk to CEOs that care about corporate culture. We call this series From Core Values to Valued Culture, and our purpose is to help CEOs create environments where they love where they work and why they work. Tony Mirchandani is CEO and Czar of culture at RTM Associates. Hi, Tony.

Tony M.: How are you doing, Will? Thank you for having me.

Will Scott: No, thanks for being on the show. I really appreciate it. Before we get into culture at RTM Associates, tell us a little bit about your company.

Tony M.: Sure. Be happy to. We are an engineering consulting firm, so I see myself in the people business. The company itself is about 200 people. We're nationwide. We have 10 offices around the country and it's really a large group of engineers that have learned how to work with each other through the different offices and build a common culture across state lines.

Will Scott: Well, good for you, and congratulations. So you're in multiple cities?

Tony M.: Yeah. Yeah. We have 10 offices around the country. We are all the way from California to Florida, Texas, to Wisconsin, so nothing in the Northeast yet, but we're working on it.

Will Scott: Okay. Very good. I'll be interested in a little bit at how you manage culture across multiple locations. Generally speaking, what do you think of, Tony, when we ask about corporate culture?

Tony M.: When someone asks us what the culture of the company is really like, my best answer is just it's a combination of the behavioral patterns of the team. The only way we're able to influence those different behavioral patterns is the examples that we set and not really the outcomes that we're looking for as much as the type of environment that we're looking for. We have our core values we live and breathe. We fire based on our core values. Everybody knowing and understanding that and seeing the leadership team behave in those is what drives our company culture.

Will Scott: Very cool. So you have gone as far as defining your culture with some core values, and I know you've actually got those on the walls as well. You've got an interesting display for your values there. Tell us about, how did you go about the process of coming up with your core values?

Tony M.: It was a extremely long, drawn-out process actually.

Will Scott: Okay.

Tony M.: There's four basic core values at the end. What our challenge was, we use Traction as our operating system here and through our facilitated kickoff, we spent basically a day figuring out what the company's core values are. We were very diligent on making sure that the core values were focused on what is already represented within the company. Not some aspirational core values that we wish we had. In doing this, we developed our core values. It was a group of eight of us and after quite a bit of debate we came down to the four that we really felt represented RTM and if people didn't fall into and believe in those core values we didn't want them within the organization.

Will Scott: Okay.

Tony M.: That as our filter was probably the most challenging piece of it and is what kept it to such a tight short list of core values.

Will Scott: Great. Great. I understand the EOS process for doing that. Where did you end up then? Tell us about, what are the core values?

Tony M.: It's really focused around teamwork and people, so being collaborative communicators is a key component within our organization. Our entire business model is based on people working while together. If we have great engineers and they don't have the ability to communicate with each other, work in a team environment, they're going to fail at their jobs, and it's just because of the services we offer and the way our industry is. Being strong communicators, a team environment, and an environment where we all succeed together and we fail together.

Tony M.: We have to live through those core values as a company, so an example would be if the company has a great year and a couple offices will end up losing money and a couple offices will end up making money, if we still have a good year overall as a company, everyone in the organization's getting a bonus. In a sense, what we preach to everybody is we make it to the Super Bowl and we win everyone's getting a ring.

Will Scott: Okay.

Tony M.: You could be a superstar. If we don't make it to the Super Bowl, it doesn't matter. There's no big payout for you because that's just the way the structure's designed.

Will Scott: Yeah. Okay. That's great. Are the core values tied into that bonus? I mean, I presume that's a financially-based bonus, right?

Tony M.: Yeah, that is a financially-based bonus. The core values are actually tied into our review process.

Will Scott: How do you do that?

Tony M.: What's that?

Will Scott: How do you do that, Tony?

Tony M.: All of our reviews, we have our core values listed and we talk about and celebrate how people have been able to excel their careers and their teams based on those core values and, are each of our individual team members really meeting those core values? We actually took it a step farther this year in having a competition for people to be able to nominate other people within the organization that were exhibiting core values. Oddly, we had, I want to say 277 nominations and it was over a three-month period, so it was really eye-opening that people not only understood them, but they truly were seeing their colleagues exhibit those core values through the organization.

Will Scott: I love it. Lots of people catching their colleagues doing what I call committing a core value.

Tony M.: Yes.

Will Scott: Do you have a nomination process? How do they nominate folks on that?

Tony M.: They submitted something to the office managers and then they all funneled it back to corporate. They actually had to describe what behavior or thing occurred and what core value it was tied into. It also, obviously, helped reinforce our core values and then we celebrated that through some internal messaging and communication with the teams on a weekly basis.

Will Scott: Absolutely. Absolutely. At Culture Czars we talk about nine deeds that help you build a culture where you're bringing the core values alive. You're making them thrive and then using them to drive performance. In that thrive part is indeed that there around, what processes do you have for capturing people committing core values, gathering stories, and retelling those stories so the culture kind of starts to breed on itself?

Tony M.: Yeah, exactly.

Will Scott: Very nice.

Tony M.: The very best thing we can do is this. If somebody identifies somebody not exhibiting a core value and actually can call them out on it and have them change their behavior, that's the holy grail of culture.

Will Scott: Yeah, yeah. Great. What did you do once you discerned your core values? You had this all day offsite. You sort of worked on those. What steps did you take after that?

Tony M.: We took those core values and we started sharing them with the teams and actually having kind of like fireside chats about it. Talking about them and seeing if they really fit into the core values of each of the different offices. As we honed in on it, we realized these four core values of ours really do match the description of what a RTM team member is like.

Will Scott: Yeah, okay. You've got that now. You've defined the culture and your current team, I presume, is pretty much there all fitting the culture. What happens when you start recruiting people. How do you select for a fit?

Tony M.: That's one of the filters we have is, will they match and will they fit the core values of the company? Our recruiting teams all have those and when they're out at recruiting fairs that's what they're thinking about is, how well are people going to actually fit into our core values? Core values aren't a perfect definition of culture, in my opinion, because we have grown through acquisition and through the acquisition process your culture changes while your core value doesn't change. It's not a direct reflection of culture from what I've exhibited.

Will Scott: When you acquire a company, Tony, what do you do around the core values? Is there something that you do to train or let people know what your culture is or how do you manage that?

Tony M.: When we go in to acquire a company they have to already fit our core values. If they don't already believe in the core values and are already exhibiting it, we won't do the deal. That's our ultimate filter, but culture in the organization's going to change. The way I describe it to a lot of the acquirees is if you have a large family and someone just got married and their bringing their new spouse to the party. If you know that spouse, the party's going to get a lot better with having that spouse at the event. It was a good culture fit. If everyone's upset, there's goes the party because Jack Smith is coming, it was a really bad culture fit. Core values are really what we truly believe in and culture is the environment that we're creating with those core values at heart. We see them slightly different. One drives the other, but they both really have to be in line in order to be able to have a strong, healthy culture across offices.

Will Scott: Yeah. I imagine when you're looking at companies ... I mean, of course, as an entrepreneur you have that gut feel too, that sense of things, right?

Tony M.: Right.

Will Scott: When you go into a potential acquiree at first, I'm sure you've got some gut feel going on. But do you find it just really helps to have the defined words of the culture so you can ask yourself, "Hmm, do these guys really fit our core values?"

Tony M.: Yeah. It definitely helps because otherwise, sometimes as entrepreneurs we want to chase the next butterfly out there. It might not be appropriate if it doesn't fit one of the core values. An example, actually, I can share with you. We had a wonderful deal we were going to be able to put together and we killed it about 50% of the way through the negotiation because they had profit centers and we're firm believers that we all make it to the Super Bowl or we all don't. By definition of profit center, one office can win while the other office is losing, so we went back to the core values and it's so dead against that we had to ... It's a very well financially performing company. One method's not better than the other, but it didn't fit the way we decided to run the company, so we had to pass on it.

Will Scott: Yeah, I understand. You put culture above profits in that case, but ultimately if you made the wrong decision your profits would've been negatively affected anyway with the bad cultural fit.

Tony M.: Absolutely. Yes. Yes, that would've spread like a disease throughout our organization since we're not set up like that.

Will Scott: Yeah. Do you find your employees, like perhaps the ones that are there in your headquarters in Chicago that have been there a long time, are they very aware of the core values? Could they recite them if I stopped them in the hallway and do they use them in everyday language?

Tony M.: I don't think we've got that good at it yet, no. No, I think they ... When they read the core values they would definitely be able to agree that they fit the culture and the behavioral patterns, but I don't think everyone in the organization can recite the core values. We're not that good.

Will Scott: How many do you have?

Tony M.: Just four core values.

Will Scott: Four? Okay. Four's a good number. That tends to be quite memorable. Yeah. What about with your ... We talk a little bit about the acquisition side of things, but when you're just driving the business or prioritizing things and you're looking at increasing sales, or a new marketing plan, or probably other strategic things that you're considering, where does culture rank among your priorities there?

Tony M.: I see culture as more of a fitness type of thing. It's not something that you can rank and put on the back burner, go focus on a little bit later. It's something that needs to be focused on every single day but in small increments. You're living the core values and you have a strong, healthy culture or you don't. We've seen the moods of offices increase and decrease, so just like in a household, everybody could be crabby for a while. Everybody could be in a great mood. We see that going on in offices and we'll do something proactive to be able to create a more positive environment if it's something on for the short-term, but it doesn't change the overall culture of the company. Keeping a strong, healthy culture is something that we just try to drip in every day.

Will Scott: Okay, so it's at least as important as those other things, and you're kind of saying that if the culture's right and it's a good fit, everything's going well, then the other things will align?

Tony M.: Yes. Yes, absolutely.

Will Scott: Okay. Structurally, how are you organized across your locations? Do you have a managing director or lead in each city? Are you communicating through them? Do you have any kind of monthly drumbeat of meetings? Tell us about that.

Tony M.: We have office leaders in all of the different offices. In order to be able to avoid the traditional hierarchal structure, we message and have planning sessions not just throughout the different office leaders, but at each of the office levels. We've taken the Traction approach, the L-10 type meeting, and we have two L-10s in every single office. We use that structure. We have people that could be two years out of college all the way up to a principal level in an L-10 meeting with a particular type of focus. Then that office might have their own L-10 and then we have L-10s that go across multiple offices and that's our way of being able to keep all the circles connected with each other. Depending on the particular subject, we can have an L-10 focused on technology, technology development, office development, region development, or the company itself.

Will Scott: Okay. Very cool. Those are happening weekly, those L-10s?

Tony M.: Everything from weekly to monthly, depending on what the topic is. Yes.

Will Scott: Okay, yeah. Do you ever get everybody together and sort of try and communicate using technology or anything?

Tony M.: No.

Will Scott: No?

Tony M.: No, we try to avoid large online meeting the best we can. We can do a one-way message. You can't have a open conversation, so that would just be a one-way communication, which we could do through email that way.

Will Scott: Yes, okay.

Tony M.: But we generally try to avoid it.

Will Scott: Do you have any plans as you look ahead that you'd like to do? Do you ever think, "Oh, I want to do this to help culture," or you got any future plans or ideas, basically, around continuing to enhance the culture that you built there?

Tony M.: Yeah. Yeah, we come up with ideas all the time. What we can actually implement's a different challenge. A couple of the ideas that we came up with that we have been able to implement is everybody does office outings, but within an office, we could have 20 to 30 people and they're broken up into studios. Instead of just doing a one a year office party a couple times a year, different studios will get together and go out and have their own outing. Every studio has a small budget that we've asked them, "Every three, four months go spend a few thousand bucks. Go out and do an outing as a studio."

Tony M.: We'll have different studios that are going to get together, do outings together. Sometimes they'll do trips together. They'll do outings with other offices across the country and there's strategic relationship building that actually occurs through those types of outings, but it definitely helps drive our culture. Those are tactics that we've tested out in a couple offices. If it tends to work well then we open it up to the whole RTM network.

Will Scott: What do you mean by studio? Do you have multiple studios in a city?

Tony M.: Yes. A studio is a group of people that are between five and eight within in an office. One office could have anything from one studio to five studios.

Will Scott: Oh. Is a studio is like a self-contained team that works on a client project? Is that what that is?

Tony M.: Exactly.

Will Scott: All the skills that you sell to your clients would be in a team or a studio?

Tony M.: Exactly. Exactly. Every studio's going to handle between three and 15 clients, depending on the size of the projects with those different clients. That way our clients are going back to the same people. That studio's working with that same group majority of the time. They start to get used to each other's behavioral patterns. They build relationships. They go to outings together, so those bonds are really formed. They're able to over serve our clients.

Will Scott: Okay. Tony, talking about return investment, if you'd like, or the financial benefits that can come from ... I'm almost interested in trying to tie hard numbers to the soft skills of managing culture in a business. It is hard to quantify, but can you say that by being deliberate and managing your culture the way you have that has helped your top line and your bottom line grow?

Tony M.: Oh, it absolutely has. It's critical to two components. Number one, our ability to be able to create a cohesive group. Those studios, for instance, they work better together on their 10th project than they did on their first project. As long as that group stays together profitability from that group keeps going up year over year. Also, having a very strong culture reduces our attrition, and low attrition, obviously, there's obvious financial benefits to it on its own.

Will Scott: Yes.

Tony M.: The description, a lot of people back to the sports analogy is, you can have a B team or a C team, but if they work very well cohesively together that B team is going to be able to beat out a bunch of superstars that don't like working together.

Will Scott: Right. Absolutely. Okay, that's awesome. Thanks for going through the interview today. Is there any other advice that you'd like to pass on to the podcast listeners?

Tony M.: Yeah. Culture is definitely something that you can help drive and direct to some degree, but you're not able to go out and just say, "Hey, I want the Google culture so I'm going to start copying what Google does," or Apple does, and so on. Those are different companies. They have their own unique cultures and all the things that we see from the outside are not necessarily things that created that internal culture. That internal culture's really the people and the behavior, so if you hire people that exhibit the culture that you're looking for you're going to get the culture that you want.

Will Scott: Yes.

Tony M.: More than any of the activities.

Will Scott: Yup. You can't plagiarize anybody else's. You've got to determine what yours is, describe it, and then build it. Of course, that's more fun too, isn't it, that way?

Tony M.: Oh, yeah. Absolutely.

Will Scott: Don't forget the enjoyment side of this.

Tony M.: Absolutely. When we talk about mergers and acquisitions, what makes it or breaks it is 100% culture. Everything else can be somehow put together and make it work between the lawyers and the accountants, but what nobody can fix is the bad culture.

Will Scott: Yeah. You must actually pass on quite a few potential acquisitions then on that basis.

Tony M.: Yeah. Yeah, we will pass on 90% of the deals that we look at, if not 95%.

Will Scott: Wow. Okay. Is this a full-time job for you now doing the M&A?

Tony M.: Pretty much.

Will Scott: Well, I imagine you could only do that if you had a solid team, of course, that was keeping the daily business running for you. Culture's got to be a big part of knowing that it's in good hands.

Tony M.: Absolutely.

Tony M.: There's a tremendous amount of trust that builds up.

Will Scott: Yeah, and I like to remind people that one of the benefits that comes from having a good set of core values that permeates the organization is that folks that you're delegating to can make decisions really the same way you would, so you don't need to be there all the time because they're making decisions the way you would because they've got that compass effectively to refer to.

Tony M.: Exactly. Exactly. The ultimate success is when they're making better decisions than you would have.

Will Scott: Better decisions. Yes. Okay. All right, Tony. Well, this has been fabulous. Thank you very much for making yourself available for this today. Wow. Just another company that's enjoying screaming success. One of the reasons, at least, is because you embraced culture and it sounds like it's as important as anything else to you today.

Tony M.: Oh, by far. Thank you for having me. Yeah, culture is what definitely makes it or breaks it here.

Will Scott: Okay. Well, congratulations on the success of RTM Associates and good luck. Thanks very much.

Tony M.: Thank you very much, Will.

Will Scott: Cheers.

Tony M.: Have a great one.

Will Scott: Cheers. Thank you, Tony. Bye.

Announcer: Thanks for listening. Be sure to click subscribe, check us out on the web at cultureczars.com, and we'll see you next time.