Interview with Kathy Steele, Founder and CEO of Red Caffeine Marketing + Technology


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Adam: Welcome to The Best Team Wins Podcast, where we feature entrepreneurs and business leaders whose exceptional approach to the people side of their business has led to incredible results. My name is Adam Robinson and for the next 25 minutes, I’ll be your host as we explore how to build your business through better hiring. Today on the program, we have Kathy Steele as our guest. She is the CEO and founder of Red Caffeine Marketing + Technology out of Lombard, Illinois. The bootstrap company was founded in 2013 and currently has 24 employees. The best learning happens through real experiences shared by fellow entrepreneurs and Kathy, we are so excited to learn from you today. Welcome to the show.

 

Kathy: Thank you. I’m really excited to be here.

 

Adam: I was excited to see you were recently named 2017 an Enterprising Woman of the Year. Tell me more about that. Congratulations, by the way.

 

Kathy: Oh, thank you. Yeah, I appreciate it. I was nominated in a category for this honor and it’s really in part recognizing businesses or female leaders in an array of organizations running businesses that are $1 million in revenue through over $100 million in revenue. There’s going to be a great group of women going to Florida in a few weeks to really share ideas. I’m really excited about the honor and thrilled to be able to get to know some of these other female leaders in our country as well as there’s some women that are being recognized outside of the United States as well. Pretty cool.

 

Adam: Very cool. Congratulations again.

 

Kathy: Thanks.

 

Adam: We’ll have to cover more on that topic a little bit later. We have a tradition here on The Best Team Wins Podcast. We always start off on the right foot. That’s the best news going on with you, business or personal, that happened in the last seven days. Why don’t you kick us off, Kathy, with your right foot for the last week?

 

Kathy: Sure. Well I can never just say one thing. I’m going to say that on the business side, we are really excited to welcome two new team members. We’re actually a 25 head count.

 

Adam: Congratulations.

 

Kathy: Yeah, that’s pretty cool. Really one of the first times we’ve had two people onboarding at one time. Then on the personal side, I am planning a really cool trip to Croatia with my husband and a group of friends this summer. I’m trying to bookend two other European destinations in front of this and at the end of this trip because you can’t fly directly to Croatia. I always like to get a little more bang with my buck. I am really excited to be planning that adventure.

 

Adam: Very cool. That’s exciting and it’s a logistically challenging trip to take. That’ll be fun.

 

Kathy: Definitely.

 

Adam: Good. On this front, I’m excited. This marks T minus four days until the launch of the book, The Best Team Wins, which as you know is … It’s spending a lot of time over the last couple of years putting that together and getting that ready for publication. We have a publication date of March 21st next week. That for me has been the culmination of a lot of hard work for lots and lots of people. I’m just glad that that date has arrived. That’s the best for me on the business front. Personally, we are due with child number four in a month. I have spent the last couple of weekends starting to prepare for going through that again. We’re bunkering down and getting ready, getting the house ready for a newborn. That’s been fun.

 

Kathy: That’s awesome. Two new babies at one time.

 

Adam: That’s exactly right.

 

Kathy: That’s exciting. Congratulations on both fronts. Writing a book is on my bucket list. I have to pick your brains when I get started.

 

Adam: Please do. It was an amazing process and I learned a lot about the book business. We could talk for hours about it sometime. We’re here today to focus on the people side of your business, but before we dive into that, let’s set the stage and give listeners some context. Give us 30 seconds on Red Caffeine and what you do at that company.

 

Kathy: Sure. Okay, so at Red Caffeine, we really believe we’ve cracked the code on a better way to do business. We’re committed to helping our clients really outperform their market when it comes to aligning marketing plus technology with strategic growth. The way we do this is we really provide our clients with a dedicated team of people – strategists and technologists and content designers – who really deeply understand their business offering. They know their customers. They know their competitors and their employees. Then we’re able to create a brand position that helps exploit their uniqueness. Then at the culmination of that, we build and execute a plan to help them stay focused on reaching their business goals. A lot of fun working with our clients and our teams.

 

Adam: If listeners want to learn more, what’s the best way to do that?

 

Kathy: Sure. Our website, redcaffeine.com. A lot of people spell ‘caffeine’ wrong, but they can certainly also reach out to me on LinkedIn. I do like to know my network, so I’ll probably ask you to talk to me a little bit about why you want to connect, but I’m always open to meet new people.

 

Adam: For the record, ‘caffeine’ is C-A-F-F-E-I-N-E, I believe.

 

Kathy: Yes.

 

Adam: Okay. All right. Just in case, I hope everybody go that. Red Caffeine was named 2016 Best Place to Work in Illinois. Very cool. You’re doing lots of things right. For people that want to learn more about Kathy’s business or Kathy, you can check out our guest profile, which is at The Best Team Wins on the blog to find out more. Let’s jump into the people side of your business. Let’s start with core values. Does Red Caffeine have specific defined core values for the company?

 

Kathy: Yes. There’s actually a little bit of a backstory to our values. Simply put, I was in a business partnership for 10 years. We really didn’t share the same value set. I never thought it was going to be a deal breaker, but in the end, it was one of the key reasons our business split. Now I’m so deeply invested in having core values that we really truly live and it really established a baseline for our team. We use them throughout hiring, our recognition and review process. We’re really living our values every day.

 

Adam: Take a few minutes and walk us through the actual values and what they mean to you.

 

Kathy: Sure. We have 11, so I probably won’t go in excruciating detail about each one, but one of the most critical things is we’ve got some that are really internally-focused and then some that are a little more externally-focused. We embrace transparency. We are an open book. We’re transparent with clients. Our team knows how we’re performing from a financial standpoint and we really have an open door policy. That means that we are expecting and open to all the team coming up with ideas and really feeling like they can lend their voice to what we’re doing on our client effort or what we’re doing as an organization.

 

We also believe in hugs. We are always working on highly creative projects. We’ve got a lot of strong personalities and there’s a lot of great thinking going on. Sometimes that thinking leads to a little contentious situations. We just have this philosophy that we want people to get in and dig in hard and come up with the best ideas. At the end of those types of experiences, you’ve just got to hug it out and move on. There’s other hugging scenarios, but we play to win and win together. We’re client advocates. We believe in intentional relationships and we believe in work life balance.

 

Then one of the other things that we believe in is really a culture of learning. I love learning and I think that in our space and really in any business, if you’re not continually learning to improve as a person or in your role-specific subject matter or expertise, you just become stagnant. The last one I’d want to share is really we believe in giving it back and paying it forward. We truly believe that small gestures can make a big impact. We’re trying to give back both financially and with our services, but also sharing our subject matter expertise or really getting involved in the industries that we’re working in in a powerful way to help move different missions forward.

 

Adam: Thank you for sharing those with me, but how do you communicate and promote those values and make them real to your team on a day to day basis?

 

Kathy: Well I think I might have mentioned that we use them in hiring. They’re ingrained in our hiring process. We really believe that one bad hire can really create a toxic environment. We’re really specific about weaving in vales into the questions that we’re asking new candidates. We also use it in real time situations. In terms of employee recognition, we call them snaps. That’s in our moment recognition process, where we’re just giving somebody a shout out. A lot of times we’re trying to tie those compliments to a value. Then we recently created a more official, legitimized recognition program. We weaved values into that. They’re part of our review process. We like to call out how somebody is performing aligned with our values in performance reviews as well. Ultimately it’s truly a work in progress.

 

I think that everybody starts at a point when they start to … I guess we started at a point where it was we agreed that these were going to be our values. Then it’s evolved over the years as we’ve grown in team size  and really just making sure they’re checking in and really living up to what we say we’re doing in terms of our values.

 

Adam: These values were created from the jump right at the beginning?

 

Kathy: They were. There was a core founding team that went through the business divorce with me. That was some of the things that we worked on pre-startup of the new company was that we knew that we had to change. Agreeing on our values was one of the pivotal points of setting up the foundation of the new business and how we were going to be different, that we did actually go through an exercise because we tripled in size in the last three years. We went through an exercise last year and did a check in. It was good to get some new input from newer team members, if we were living what we said we were living in terms of values. We only made one change. We tweaked that a little bit, but it was a great check in and I was really thrilled that there wasn’t a lot of debate. We felt we were where we needed to be in terms of really truly being true to our core values.

 

Adam: It’s great when everybody feels that you’re on the same page with that, it certainly makes it a lot easier moving forward. You talk about a divorce with your business partner and you had some team with you. Let’s talk a little bit about the structure of your leadership team. Walk us through the senior roles in the company that are sitting around the table with you, helping you run the business.

 

Kathy: Yeah.

 

Adam: What are the titles, broadly speaking? Who do you have at your side?

 

Kathy: Sure. I’ve got a fairly sizable leadership team, but they really … We deliver a lot, so they represent the different areas of the business. You’ve got our vice president. She’s our chief relationship manager. She makes a lot of connections. She is truly our brand ambassador. She’s out there making connections, helping us win new opportunities with clients. A recent member of the team is our director of client services. Our business model is really focused on client retention. We have a whole slew of new clients all the time. We’re really looking to go deeper and be better partners with our existing clientele. Our direct of client services is really in charge of creating those exceptional client experiences, so people are seeing value in working with us.

 

We’ve got a strategy and digital lead. He really is the genius behind bringing business strategy into a game plan and a lot of things that we deliver are digital. Those two go hand in hand. Our art director and content director really own establishing the brand’s position, both in how a brand looks, but also how we tell that brand’s story. Then our technical lead and developer leads our development team. Then lastly but probably most important is our operation’s manager. She really leads the fundamental department on HR, but she also owns the finance piece of the business.

 

Adam: Our listeners love to hear about the people model for the business, so that’s what I’m referring to is the business model that governs the people side of your business. Are you hiring specialists? Are you hiring generalists? Are you training people who are early career or are you hiring folks mid to late career? In general, what’s the approach to doing what you do? What kind of people fit into your business model?

 

Kathy: Yeah, that’s a great question. I think what I recognize as our most important asset, we don’t make anything. Our team is our most critical business asset. Employee engagement is one of our three key areas of strategic focus. We’re looking at both. We’re looking at bringing in people that are specialists. We’ve added a lot more … I’m not going to use the word ‘seasoned’ because somebody thought I meant an 80-year-old woman last time I described somebody as seasoned, but we’re bringing in people with more industry experience. We’re in a youthful space. We’re teaming them up with younger people that bring that new thinking and the millennial generation thinking to our business as well. We have a philosophy about T-shaped learning opportunities, where we’re trying to have an overarching training focus on both being really good at honing a skillset, but also having some additional training that allows them to grow their soft skills or have an opportunity to learn a different discipline if they want to grow in a different capacity. A couple of different learning and training tracks, but we’re new at this.

 

This is something that we really started to get our arms around last year. Last year we launched what we call RC University. It’s a combination of training. We bring in marketplace experts, but we’re really looking to expand this to more specific role training and a certification process long-term. That’s our people model. Did I answer that question?

 

Adam: You did. Yeah. As you indicated, for most businesses that changes over time. What you need and how you pay people and the way you attract and retain that talent changes as the business changes. Thank you for sharing that. Let’s talk about your compensation philosophy at the company. Most comp plans have a base salary component or an hourly rate. They may have a bonus component or commission. Take us through your philosophy on how you structure pay to get the desired results you’re trying to achieve in the organization.

 

Kathy: Well most recently, I guess as you said, things do change. In the past, I didn’t have a great idea of how to look at comp. Last year, we wanted to map our growth plan with a staffing plan. We did a deep-dive into the marketplace and looked at the salary ranges for the different roles that we have on our team currently or maybe something that we might be looking to add in and levels set, where we were in the marketplace. In some areas, we were really, really competitive even against some larger organizations. Then some areas, we thought we were a little bit behind. This year, we’re trying to reset that using more industry benchmarks to give us the landscape of comp overall. In terms of how we typically compensate people, it’s more … Most people are salaried here, but depending on the role, there’s a couple of variable comp plans for our account management team as well as more on the business development side. We’re Great Game of Business practitioners, so I don’t know if you’ve heard of The Great Game of Business or are familiar with the methodology.

 

Adam: I have heard of it. I have not used it, but you’re talking about the Jack Stack Great Game of Business. Is that the same?

 

Kathy: Exactly.

 

Adam: Okay. Tell us about that.

 

Kathy: We really teach our team to think like owners. Know how their job impacts our success. We really have leveraged the Great Game to do an overall bonusing plan. When the company is hitting certain milestones from a financial standpoint, we use that as an overall bonusing pool for the team. The whole team gets opportunities to win when the company is winning and everybody is really a part of it and really understands and even more so now than ever understands how they can help us win.

 

Adam: Let’s dig in a little bit there. Great Game, the premise is the more people know about the way the company runs and how it’s really working and what the numbers are, the theory holds the better they’re going to be, the more effective they’re going to be in helping you drive the business for it. Have you found that to be the case?

 

Kathy: Absolutely. It’s absolutely incredible. I think it taps into this human desire to win, Great Game does. It’s not just about financials. We use game playing in other areas of the business in terms of trying to improve a process and those kinds of things as well. Overall, it really starts with financial training because I think many businesses have really smart people and they’ve got a pulse on things that as you’re the owner or the president or the C-suite, they’re just not going to see things in the same way that people that have their hands on something are going to be able to look at something. I absolutely believe that giving people the financial training and the tools to help you help improve the business and then also giving them a reward for when things are successful is just an unmatchable business strategy. I don’t know why everybody is not doing it.

 

Adam: Yeah. We’re a lot of the same way here at Hireology. We share everything. It’s down to the profit number. Everybody knows everything. I’ve found the exact same result. People trust the management of the organization more when they have transparency into what happens. With trust comes buy in. Then the rest is just execution. If you have the trust, you have the buy in, those are the hard things. Execution is just a right person, right seat question. That’s a much easier question than solving one where the team doesn’t trust the leadership.

 

Kathy: Yeah, absolutely. I think that we’ve had our tough times too when we rebooted the business. We had a little bit of an uphill climb. That’s when I opened the books. It allowed people to ask questions and I was able to get in front of things whereas if people are just assuming things are good or assuming things are really bad, they’re probably assuming things are way better than they are or way worse than they are. It really headed off potential. People exiting the company because they thought things were not going well. It allowed me to have conversations and really educate the team. Then on the converse side, it’s pretty exciting when things are going well.

 

Adam: Yeah, I can imagine. Let’s switch here with the few minutes we have and talk about the recruiting side of the business. You mentioned hiring process. You align it to core values, but what’s the most important thing you do at the company in your hiring process to ensure you’re hiring the right people?

 

Kathy: Well I think it’s sticking to our process. When we’ve veered off and not done things in the order that has been successful for us, I think that’s when we’ve had some challenges. Ultimately it starts with how we’re recruiting. We really look at the staff and determine what our true needs are, so we can set up our interviewing process and our candidate search to bring in the types of candidates that we’re looking to hire. We leverage, like most people, an array of tools and resources to find candidates. We love getting employee referrals or friend referrals because I think a lot of people, when they know us, they know who might be a right fit candidate. Typical things like the phone screening and then having the team that is the team lead that’s going to be the department head on the role alongside some of the key team members that will be working with the new candidate. Then lastly, we really have my VP and myself get involved in the interview process. I’m probably the worst interviewer.

 

Adam: Okay.

 

Kathy: I love everyone and I always see the upside and never any downside. Our VP always asks amazing questions and so I really spend a lot of time listening. I’m trying to be less about hiring more mini-me’s and looking at really what the needs of the business are and making some good decisions when we come together and choose a new candidate.

 

Adam: Sure. That optimism that makes you a great CEO makes it very challenging to say no to people you like, but whom you might know aren’t great for the role. That’s tough. I’ve been there. Well what is the biggest people-related lesson you’ve learned since launching this new phase of the business?

 

Kathy: Well I guess it’s probably that people really do want to do great work. They want to do meaningful work. If you can provide that atmosphere, that opportunity for them to have their voice and be heard or try something new and potentially be successful or potentially not fail, they’re going to just bring their best to work every day. Like you said, having that transparency and allowing people to jump in. For me I’ve seen just amazing, amazing results and really high engagement and retention levels with my staff.

 

Adam: It certainly sounds like it. The proof is there. The culture accolades, the success you guys have had. It’s a result of the things that you’ve been sharing with us today, so thank you very much for that. We’re going to jump to some final lightning round questions here. Just take your barometer on a couple of big picture items. Do you think the U.S. economy is getting better or worse for your business over the next 12 months?

 

Kathy: I’d say better.

 

Adam: What do you think is driving that?

 

Kathy: I just think that there’s just a lot of economic indicators that, specially in the verticals that we’re working in, that provide us a lot of opportunity. I’m very highly optimistic.

 

Adam: Excellent. Do you think it’s getting harder or easier this year to find the people you need?

 

Kathy: I think it’s always getting harder. I think that as we’re growing, it’s challenging to always retain that atmosphere and culture that we work so hard to have. It’s just challenging to continue that. I think it’s going to be harder.

 

Adam: What’s the book that’s on your nightstand right now and would you recommend it to our audience?

 

Kathy: Yeah. I just started Growth Hacker Marketing. We just started a book club here at the company.

 

Adam: Excellent.

 

Kathy: We really wanted to spend time reading about our industry and thought leadership in our own space. We’ve spent a lot of time on staff skills development last year, so it’s exciting to have the team bring ideas to the table and forum to discuss what’s going on in marketing and technology.

 

Adam: Growth Hacker Marketing. Who is the author?

 

Kathy: Oh, darn. I don’t know.

 

Adam: We’ll have to look it up. We’ll make sure we get that posted in the newsletter this week, so listeners have an opportunity to check that out. All right. Closing question: If you were to come back on the show a year from now and report on whether or not you accomplished the one most important thing on your plate right now, what is that thing?

 

Kathy: Wow. From a business standpoint, I guess I would have to say we really worked hard on a five-year strategic plan. It’s going to be that we’ve met or exceeded some of the goals that we put in place for this year. Then I’m incubating another company right now. Really getting this number two company to a revenue stage would be pretty cool too.

 

Adam: Yeah, I would say so. Well congratulations. I wish you luck with the new venture. You are of no shortage of stuff going on right now.

 

Kathy: Yeah. No, you too. It sounds like you’ve got a lot of things going on as well.

 

Adam: Yeah. Opportunities abound. It’s fun to be pursuing things that are both fun, challenging and add value. Best of luck to you, Kathy Steele. That’s the final word. You’ve been learning from Kathy Steele, CEO and Founder of Red Caffeine Marketing + Technology. Kathy, thank you for being with us today.

 

Kathy: Thank you so much, Adam. It was a pleasure.

 

Adam: That’s a wrap for this episode of The Best Team Wins Podcast, where we’re featuring entrepreneurs and business leaders whose exceptional approach to the people side of the business has led to incredible results. I’m Adam Robinson, author of the book, “The Best Team Wins,” which you can find online at www.thebestteamwins.com. Thanks for listening. We’ll see you next week.

 

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