Yogurtland has been a frozen dairy-powered rocket for Phillip Chang. The president and CEO of Yogurtland Franchising Inc. founded the chain of self-serve frozen yogurt bars in 2006, and in the six years since, has grown the company to more than 170 locations, owned by more than 100 franchisees and employing more than 2,100.
But when on a stratospheric trajectory sometimes things don't always go according to the script.
Which is why, several years ago, Chang threw out the script and began concentrating on the actors in his company.
"Before then, even though our stores performed pretty well, some people's behavior didn’t reflect the culture we wanted to have," Chang says. "We didn't see enough of the honesty side, the respect for each other, the desire to help each other."
Chang quickly realized that if he were going to build a stable culture that embodied high ethical and moral standards, he needed to find the people first. So he started to shift how he and his leadership team recruited, what they valued in prospective employees and franchisees, and what constituted a great hire.
In short, Chang began focusing on candidates' hearts first and their heads second.
"When the company started, I had hired too fast, and because of that, some people had a lot of experience as far as the technical side of things, but they didn't have high moral standards," he says. "So I started looking at this in terms of two areas. One was the culture, in terms of the level of ethics and honesty, and the other side was their technical experience.
"I looked at how each candidate performed in both areas, but I set my bar very high on the ethical side and was more generous on the technical side. You can teach technical skills, but you can't really teach ethics and morals."
Since refashioning the company's recruiting and hiring practices, Chang says it has had a profound impact on the culture of the company.
"It has been big for us," he says. "We now look at our company more as a family."
Ask the right questions
If establishing your ideal culture starts with hiring the best people, then hiring the best people starts with asking the best possible questions during the interview process.
Chang wanted to develop and nurture a culture that embraces high ethical and moral standards, but also promoted the idea that Yogurtland behaves something like a large extended family.
Though many company heads talk about the family atmosphere that exists in their companies, making the leap from professional colleague to something more familiar is difficult, and one that can't happen without close involvement from upper management.
Chang wanted a constructive bond to develop among the people in Yogurtland's Anaheim corporate office, so he started by developing bonds between himself and his team members. He developed relationships with his people in which he got to know the significant things happening in their personal lives.
If there was a way Chang could leverage Yogurtland's resources to help an employee realize a significant life goal, he wanted to help.
"In our situation, I think it’s important to look at a company as family members," Chang says. "When you have a parent, sister, brother, and you're working together, you're thinking about the ways you can help them and make their life better. You're asking 'How can I teach them to fish?' That's why, maybe you don't want to just hand them a prize, but you want to figure out a way that you can help them realize the dreams they have for their own lives."
One of the first questions Chang asks a job candidate has nothing to do with the lines on their resume. It has everything to do with trying to learn what really makes the candidate get out of bed each morning.
"For every single person I interview, I ask them what is their ultimate goal in life," he says. "That gets them to think deeply and reveal some truths about who they really are. Their goal can be relevant or irrelevant to our company, but I want to know what their goal is. If we hire them, I want to customize a path for their dreams.
"Maybe someone wants to buy a house for their mom. It really has nothing to do with us, but we look at the numbers, we put together our collective wisdom and try to see a way this person can achieve their goal. If that person can finally buy a house for their mom after so many years, that is very motivating for them.
"We see it as something we're not obligated to help with, but if you truly view your people as family members, as a brother or sister, that is my role. If they see me and those of us in the company going above and beyond to help them, they start to see and believe that we act as a family."
Finding those life catalysts is a critical component of motivating employees at their jobs. Employees do come to work each day for a paycheck. Without income, they don't pay their mortgages or utilities, don't make car payments and don't buy groceries. But the sum total of what constitutes gainful employment doesn’t begin and end solely with what ends up in each employee's bank account every two weeks.
People want to work at an organization where they can make a lasting difference. What defines "lasting difference" changes from person to person, but the greater need is always there. As the leader, it's up to you to ask the questions, both of your current and prospective future employees, and find out what truly motivates them.
"In a lot of cases, I don't think financial compensation is the real motivation for people," Chang says. "When they hear the company is trying to achieve something beyond just the numbers and financials, when they see that we come together as a company, we reach out and help each other achieve our goals so that we can achieve our overall company goals, that is a common motivation where people see we're not just out to make a profit. We don't come to the office each day just to make money. It's more than that."
Perform daily maintenance
It's easy to project enthusiasm about a new strategy or a culture shift at the outset, when everything is new and exciting. But how about a month after, or six months after, or a year after?
At some point, you will leave behind the rush of blazing new trails and exploring new frontiers, and sustaining what you worked so hard to develop and roll out will be a matter of daily maintenance.
At Yogurtland, Chang considers his company’s cultural conversion a success. The atmosphere around the company's corporate offices — and by extension, at franchise locations — is based on Chang’s vision of a company that behaves as an extended family. It is a commonplace occurrence for Yogurtland associates to build and sustain meaningful and fruitful interpersonal relationships.
But if Chang were to rest on his laurels and consider the mission accomplished, he would run the risk of allowing his culture to backslide into the bad habits he spent several years eradicating. That's why he makes sure to create regular interaction points between him and his team, so that he can continue to reinforce the principles he introduced at the outset of the company's culture shift.
The company's rapid growth adds an extra layer of complexity to the equation.
"Right now, we have a corporate office of 40 and it is already difficult to reach to all levels," Chang says. "The only way is to remain vigilant about communication. In our regularly scheduled meetings, what we're discussing isn't just about simply store operations or the numbers we are trying to achieve. We discuss more than that."
Chang tries to address technical issues quickly so that he can spend more time reinforcing the culture. Whenever possible, he wants common-sense, uncomplicated solutions to issues involving the company's infrastructure. Since maintaining a great culture is hard work, he wants the nuts and bolts of running his company to be as simple as possible.
"When we need to visit the technical side of things, we can be pretty quick in figuring out what the best solution could be, and then put that in a memo to whoever it concerns," Chang says. "That way, it's in an e-mail, everybody reads the e-mail, and if the subject needs to be addressed in one of our meetings, we are all prepared beforehand. That hopefully leaves us more time to address our culture and how we are putting ideas together for the future. The meetings are where we really dissect what is going to help the company’s future. So we want to spend a lot of time on those big-picture, conceptual ideas."
Chang says the new culture at Yogurtland has affected the way he runs the business on a fundamental level. Like most CEOs, Chang used to focus on strategic planning before anything else. Everything — from hiring to culture to job descriptions — stemmed from the strategic plan laid down by management.
But as Chang advanced deeper into his new philosophy of focusing on people first, he discovered talent was his most important asset, and motivating that talent was his most critical task. Now, he values talented people who embrace the culture far more than he values strict adherence to any organizational strategy.
Yogurtland still has an overall direction and goals, but the method by which those goals are achieved is now largely up to input from his team.
It is something that requires a level of adaptability that might extend beyond the comfort level of some business heads. But Chang views it as an essential part of his leadership philosophy. He'll compromise on how something gets done, but he won't compromise on who does it.
"Typical company leaders, they will do strategic planning and everything related to that first, and then try to fill out the team by putting people in the right positions," Chang says. "We do it the other way around. As I've said, I find the right people first. That takes a level of risk, because sometimes you find a really great person and you know right away where they're going to fit in the organization.
"That's where it gets kind of strange, because what I've learned is that if I find the right person who fits the culture, someone who is honest, humble, receptive, confident and wise, that is where you really can't compromise. You can be pretty generous regarding how you hire for technical skills. If you've hired someone who is smart and receptive, they can catch up their skills fairly quickly. That is why you find the person first, then do the planning.
"If I were starting a company from scratch again, I now know that is how I would do it."
How to reach: Yogurtland Franchising Inc., (714) 939-7737 or www.yogurt-land.com
The Chang file
Born: Seoul, South Korea
Education: B.S. in mathematics, Sogang University
What is the best business lesson you’ve learned?
One thing that has impacted me throughout my career, and what I keep emphasizing to my people, is that you need to surround yourself with the right people. You need the right employees, the right partners and the right people around you in everything you do.
What traits or skills are essential for a business leader?
The ability to build a great team. You need to have the ability along the technical lines of what it takes to run a business, but you can’t go anywhere without a great team. And that comes back to how you communicate with people and share your goals.
Chang on the CEO’s role in sustaining the culture: As the company has grown, I’ve tried to set myself as more of a cultural leader, rather than an operations leader. I try to focus more on the bigger goals and being a good role model, demonstrating our cultural principles by example — honesty, high morals and so forth. As the leader, you are constantly watched by everyone, and they have to see me embody those core values at every turn, because they are going to follow my example.