Energized organization Featured

8:00pm EDT September 25, 2009

To establish a culture, John Berger finds that actions speak louder than words.

“It spreads like wildfire within the company,” says the founder, chairman and CEO of Standard Renewable Energy LP.

“Even as geographically diverse as we are, you don’t need to get on a pedestal or an all-employees meeting or send out an e-mail and say those kinds of things.”

For example, the distributed energy services company installed a high-efficiency heater but found out after they installed it that it didn’t meet a municipal building code.

However, previous heaters somehow passed inspection even though they shouldn’t have. Berger could have looked the other way and saved the company, which posted $11 million in 2008 revenue, the money it would have cost to reinstall them. Instead, he had them all replaced.

“That set an example and people knew it, and you didn’t have to tell everybody about it,” he says.

Smart Business spoke with Berger about developing an open and honest culture.

Allow for mistakes. I was doing an interview yesterday with a gentleman who’s interviewing for a senior position and he asked me that question, ‘If I make a mistake, how do you treat it?’ Here, I expect you to make mistakes. If you’re not making mistakes, then you’re not trying hard enough. I make plenty of them.

I think that it’s proper in management — you have to have guidelines, so we can’t have somebody in the company going out and signing up the company to a million-dollar liability and (saying), ‘Oh sorry, you messed that up.’ That’s not acceptable.

But pushing the envelope in the sense of cutting costs and trying to do what’s best for the customers etc. and something just didn’t work out … you have to say, ‘Look, it’s OK to fail, because if it’s not OK to fail, then you’re not pushing and you’re not improving. You’re not improving the company; you’re not improving yourself.’

So, I think it’s having the understanding out there within the culture, which obviously we do, that it’s OK to fail.

Leave your door open. Coming in and just griping about something is something I don’t tolerate. What I would like to see is, ‘This is what I view as wrong and this is what I would suggest to fix it.’ I’ve always set it up to where you should feel free to come in. I’m not going to hold you, nor will my other managers hold you, and say, ‘God, this person is just a troublemaker.’ If you do it every week, then, yeah, that’s a problem.

But you’re accepted. We may not agree with your viewpoints and we may say, ‘No, this is why we’re doing it, and we are going to continue to do it this way, and I expect you then to get in line to do the best job that you can with that decision. But it really is never held against you for bringing a constructive criticism up and with some other ideas how to fix that.’

So, it’s got to be open, and you cannot penalize people for not agreeing with you. If you demean them in a public way for not agreeing with you, that’s an issue.

Communicate openly. If you allow people to tell you all the good things but not the bad things, I think that leads to a significant amount of problems. There needs to be open communication within the organization itself, regardless of up and down the chain, so people can understand where each other is coming from and understand what each other is doing and why. It also leads to a large amount of both organization respect for the company but also individual respect amongst our team members.

So, it really matters in terms of how you treat people. You still have to hold everybody accountable, but at the same time, you need to make sure that individual viewpoints are listened to and respected. I also think that goes with making sure you have the right type of individuals in there. If you have people that are really not of the same ethics, guidelines or mandates that you’ve set in place in the company, then in both the personal life and the professional life that can lead to a rotting of the culture inside the company as well. Then lead to, ‘Well, if I don’t respect you on something over here, then why should I respect your opinion about something that has a high priority for the business.’

Give freedom but have structure. You have to set up processes. You have to set up whether it’s documentation — and it’s probably both documentation and conversations over and over again. I’ve learned that you never can say the same thing too many times within an organization. Once you’ve set that mindset, the vision — that’s probably No. 1, to set the vision. You have to have a common vision — where are you going and why?

Once you’ve set that and set the processes in place and you communicate both the vision and the processes over and over again so that, as new people come in or people are reminded of it, then you have a common structure. That goes down to culture, your ethical guidelines of the culture and so forth. Everything goes within that.

But, at the same time, you put your organization in such a way and the type of people that you hire — we hire a lot of entrepreneurs, we hire people that are capable of handling and going out there making their own decisions. So frankly, it’s a lot like the U.S. democratic system. There are rules and guidelines that the constitution set up, but everybody has a tremendous amount of freedom within those broad rules of lines and processes, and I don’t think running a company like ours is any different than that.

How to reach: Standard Renewable Energy LP, (713) 316-4990 or www.sre3.com