Create Psychological Safety and Ownership to Activate Growth with Joel Clark at Kodiak Cakes
Google has been able to create one of the strongest brands over the last two decades. The amazing people at Google did an in-depth study on what makes high performing teams. They discovered that leaders must create psychological safety for teams to perform to their potential. Leaders often have a blind spot for creating psychological safety, so I keep creating content to help you understand it. Today’s guest is Joel Clark, CEO of Kodiak Cakes. His company was ranked #671 on the 2018 Inc 5000 list. Kodiak Cakes made the Inc list three consecutive times from 2018-2020. Joel gives you his plan to create psychological safety as a leader. We look at what gets in the way of employees feeling safe. Discover how to create psychological safety and activate ownership in your culture.
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Disclaimer: This transcript was created using YouTube’s translator tool and that may mean that some of the words, grammar, and typos come from a misinterpretation of the video.
Joel Clark
We want to create an environment where people feel like they can contribute from day one. And that they feel like they can challenge us, you know that we’re not these superior leaders that have egos, we’ve just we’ve really tried to empower our teams to be very collaborative. And I think when you create that type of environment, number one, it’s really satisfying. Like you’re making a difference, and you can contribute, you feel value. But then also, I think people are able to give, now you just feel more motivated to place you want to be.
Intro [0:36]
Welcome to grow Think Tank, this is the one and only place where you will get insight from the founders and the CEOs of the fastest-growing privately held companies. I am the host, my name is Gene Hammett, and I help leaders and their teams navigate the defining moments of their Are you ready to grow?
Gene Hammett [0:53]
Growing your business took more than just a great strategy, and hitting your numbers every time. You know, as a leader, that those things are very important to the success of the business and the ability to get results. And one of the other things that you have to focus on as a leader in the people. Today we look at some specific factors, maybe you haven’t thought about how they work together, but we’re going to look at psychological safety and ownership. And I’ve been preaching here to you if you’re listening to any of these episodes before about the importance of having people feel like owners, and one of the pieces in that puzzle is psychological safety. Today’s interview is about how they played together and why they are necessary. If you want your business to grow fast. We’re talking with Joel Clark, co-founder CEO of Kodiak Cakes, a really fast-growing company over 500%, they were number 838 on the Inc list. And they grew to over 100 million in the last few years.
Gene Hammett [1:56]
Now we go and look back at what happened at the first beginning of that. But when all things started to change is when he started to invest and to the people leadership development training. He mentioned his brother and sat here and his work in psychological safety. And I bring that up because it is part of what I do. But I have a little bit broader aspect of leadership development is part of what I do. But I have a little bit different perspective on leadership development, where psychological safety is necessary. But it plays well with the other pieces of empowerment to create ownership. So that’s part of this interview today. If you haven’t had a chance to check out the free training, we want to make sure that you actually get that if you want to grow as a leader, you want to be the founder of a company that continues to grow and escalate to the next level get this free training. This will help you create the kind of movement you need and the team you need. Have a player’s just go to genehammett.com/training you can get it absolutely for free. Just subscribe and you can get it downloaded immediately. What you will get inside that training are the three biggest mistakes to avoid as a leader how to fix those. If you’re experiencing right now. I’ve done the research, you will get that research and you’ll see somehow it works inside of organizations. Just go to genehammett.com/training. Now here’s the interview with Joel.
Gene Hammett [3:18]
Hi Joel, how are you?
Joel Clark [3:20]
Doing well, good to be with you.
Gene Hammett [3:23]
Excited to have you on the show to talk about what makes companies grow fast, especially the leadership and culture. You are a co-founder CEO of Kodiak Cakes gives us an idea of what Kodiak Cakes is.
Joel Clark [3:40]
So Kodiak Cakes is probably still mostly known as a pancake and waffle mix. And it started out as an old family recipe. And when I was eight years old, I went around our little neighborhood in Salt Lake City, Utah, and sold homemade pancake mixes that my mom had made in brown paper lunch sacks. We loaded up my little red wagon, and I went around the neighborhood and sold these little homemade mixes. So that was like the early roots of Kodiak cakes. And then, you know, years later, my older brother John, in the mid-90s wanted to start a business and said to my mom, hey, I want to start a business give me ideas. And her mom said to him, hey, yeah, why don’t you take the pancake recipe and go make a real product out of it and start selling it. So that’s what John did. And he created the brand Kodiak cakes the first product and started the business. And I helped them in selling in the very beginning. And then a couple of years later, I took over the company. It was just little teeny tiny little business doing about $29,000 in total revenue. And I took it over and just kept it alive ever since.
Gene Hammett [4:45]
So you have I looked at the numbers. You’re not tiny anymore.
Joel Clark [4:52]
No, we’ve grown a little since then.
Gene Hammett [4:56]
When you think about the business now you know getting to over 100 million. What is one of the challenges you had to overcome? I know there are many, but what really was marks? Something you’re really proud that you overcame?
Joel Clark [5:11]
You know, I would say, really, as I look back because our journey really was a long, slow slog, you know, and a lot of businesses are, you know, it’s just hard to hang in there. And I think it took us, it took us 16 years, for example, to hit a million dollars in revenue. So I mean, that was just really hanging in there. I think I look back and I’m like, you know, what, for me, probably the big maybe one of the biggest accomplishments was just persevering through all that, you know, so it, it really wasn’t, you know, you kind of you’re going through that journey, I remember kind of feeling like that, am I just beating a dead horse, I, you know, am I chasing a dream, that’s never going to happen. And I think a lot of us feel that way, right? In the early days of trying to get something off the ground, and you just don’t know if it’s gonna work, and there’s so much uncertainty. And so, you know, little by little, I was able to kind of hang in there and keep it alive. But I would set myself these like six-month goals. And I’d be like, Okay, if these things don’t happen in the next six months, I gotta call uncle and walk away from this thing at some point, but little by little, they would kind of keep happening. And I’ve kind of hit my goals and in Hang in there. But I think for me, that’s probably one of the biggest, you know, for me, probably the biggest success factor is just the fact that I was able to just hang in there and stick it out.
Gene Hammett [6:28]
You know, I have not heard many stories like this. I know that a lot of people have had some long journeys, but 16 years to a million, frankly, is a lot.
Gene Hammett [6:38]
You know, I’m sure that you were questioning yourself on that journey. And it was just a handful of people. But now over 100 Million and 500% growth rate to put you at 838 on the Inc list. I love this story. And you know, coming from Mother, I’m a very family-oriented person, happy to have you here on the show to talk about leadership and culture, Joel.
Joel Clark [7:02]
I appreciate, appreciate that.
Gene Hammett [7:05]
When you were talking to my team about this, we went to research the company and really to dig into what makes you tick, you had said something completely surprising for a very mature company, for a company that has taken a long time to get to where you are. But psychological safety. Tell us a little bit about what psychological safety is.
Joel Clark [7:27]
Yeah, so I mean, it’s, it’s a, it basically means that you create an environment where people feel psychologically safe, you know, to in order, so that they can feel like they can challenge, they can challenge the norms, or they can immediately feel like they can contribute or in a brainstorming session where they really feel like I can say, my mind, I can speak my mind, I can, I can say something and it will be valued. And it won’t be like, you know, looked down upon or, you know, if you’re like young in your career, or if you’re a brand new employee, you know, you might feel you might naturally feel a little bit hesitant to speak up or to say something. And what we’ve wanted to really do is create the opposite of that we want to create an environment where people feel like they can contribute from day one. And that they, they feel like that they can challenge us, you know that we’re not these superior leaders that have egos that we’ve just we’ve really tried to empower our teams to and be very collaborative. And I think when you create that type of environment, it number one, it’s really satisfying because you feel like you’re making a difference, and you can contribute, and you feel valued. But then also, I think people are able to give more, you know, you just feel more motivated, because it’s a place you want to be in a place you want to give your best.
Commercial [8:42]
Hold on for a second. Do you hear Joel talk about having employees that feel like they can challenge the norms? And you may think that you want an organization where people don’t question you. Yes, ma’am. Yes, women inside the organization that works to a point. But what you end up having is not the kind of team that you want. You want people that have the confidence to challenge the norms. You want them to feel empowered, you want them to feel a sense of psychological safety that allows them to make those opinions of statements and have healthy conflict. And there’s a lot to this whole leadership thing, I say, with a smile, because it really is important for you to understand that you don’t want people to just accept what’s there. You want them to truly look at it, and have conversations that allow you to grow as an organization. If you do that over time, you will have people who really feel a part of the work and that will give you an extra boost of retention, loyalty, creativity, all of the things you need to drive the business further and faster. Back to the Joel.
Gene Hammett [9:48]
How long has this been something that focuses for you as a leader?
Joel Clark [9:53]
Well, you know, I think subconsciously it’s been a focus for a long, long time for you know, early on when we First kind of wrote down our culture, I don’t know, five, six years ago, these types of concepts were really part of what we wanted to do. Like we talked about being empowered, we talked about being collaborative, we talked about being great to work with. Yet, I didn’t really know the word, I didn’t know the term psychological safety until fairly recently, my older brother, Tim Clark, does some maybe similar work to what you do, he does leadership training, and consulting and writes books. And, and you know, just to me, just a plug to that type of your type of work really is, like, honestly, I think some of the most transformational moments for me, as a leader has been where I have gotten training, you know, from an expert, like you. And so like, I mean, you know, I think, you know, just that type of training has been so impactful. So we started to really learn about this word, you know, my brother teaches a lot about this and has written a book on it. And so it just resonated like crazy with us because it was a concept or, you know, like, an atmosphere that we were going for. But then to learn more that there is like an actual principle about this, or a concept about it has just been awesome. So we’ve continued to try to learn more about it and have embraced it even more.
Gene Hammett [11:15]
When you say that you grew through this leadership development. A lot of leaders, I find that they just, they think reading a book is enough, right? Or they will delete two or three books. Of course, this year, maybe there’s only 10 or a dozen books. Why is that kind of not enough to challenge your own growth as a leader?
Joel Clark [11:37]
Yeah. I mean, no, I love the question. Because I’ve done that too. And I and I do I like to read books, and I, I learned a lot from them. And one thing that I always say is information is motivation, right? It’s like, the more information that I can gain man, I started to get motivated, you know, I might be reading a book, and then I’m motivated to do this or do that it’s really motivated. But I think the hands-on training is, there’s, there are a couple of things, but one thing that really does come to mind is like, when you have an entire group of people, for example, trained, I’ve had done both one on one training, which is awesome, so you can have conversations and then somebody can, you know that the trainer can really help to find blind spots that you might be missing out on. So it’s more it’s, it’s more, it’s deeper than just reading a book, right? So you can get challenged, and you, you know that that intellectual process can be really constructive. But then also like, having a group trained, you know, what that did for some of those training that we’ve had have become really just ingrained in our culture. So for example, we had really great training on EQ. And that just turned out to be such great training, and it became just a big part of our culture, and how we interacted with each other, and, you know, learning about self-awareness and that type of thing. So I think those types of things have just been very impactful for us.
Commercial [13:06]
Now, hold on for a second, Joel just mentioned EQ, he talked about why it’s important, but he didn’t actually describe what EQ was. I’m gonna give you the layman’s terms here. So this is I didn’t look up the definition. But emotional quotient is very much like an intellectual quotient. But it’s about emotions, measuring your ability to manage your emotions, understand others, and to truly grow together through this emotional world. And the reality is, you can’t just leave your emotions at the door. Everyone said those things before Joel talks about it. But you have to be willing to tune into other people tune in to your own emotions control them, you don’t want to get completely emotional swings where you’re completely out of control. That’s the idea of having EQ. And you want to also be able to tune into other people’s emotions. So it will give you a chance to lead them better. That’s a layman’s definition of EQ, I just wanted you to have what you need to be able to move forward. Back to the interview.
Gene Hammett [14:05]
Well, I want to dive into this psychological safety. What do you think is kind of the reason why leaders avoid this whole sense of focusing on psychological safety?
Joel Clark [14:20]
I think one of one of the reasons why it’s so important is because it because like so one, one concept that my brother really pointed out to me when we were talking about this, as he said, Look, what this does, there’s a real correlation between psychological safety and innovation. And I think, you know, once I kind of understood that it made so much sense to me, because, you know, it’s like innovating is a real social activity, right? innovation can be so when you’re having meetings where you’re having brainstorming or you’re trying to come up with new product development or new ideas, if you have an environment where everyone feels empowered to control Have you, man, those meetings go so much better. I mean, we I, there have been so many times where we have, where we’ve looked at an idea that we had, and we thought, whose idea was that?
Joel Clark [15:10]
And we didn’t even know often, because it was just, it was a result of an awesome brainstorm, meeting where people were involved, and everybody who’s contributing, and then one idea led to another, and then we walk out of there with, you know, a couple of really great ideas, we could actually go and execute on. And so you know, it’s that it really does have that link to innovation. But there’s also just where, you know, you set up an environment where people want to be there, and they want to give their all that that can become a very positive culture. And I think I really do feel like culture can be a real asset to your business if you’re if you have a really strong positive culture where people want to be, and they want to give their best. I mean, think about that, that really is an asset. I mean, you know, can you quantify that? I don’t know how you quantify it. But you can quantify it really, if you’re, you know, in results of your business, I think.
Gene Hammett [16:02]
So I know that your company, just looking at the numbers at face value, have been growing faster, the first 16 years to a million. But now over the last three years, or give or take a few months, you have grown over 500%, right?
Joel Clark [16:19]
Yeah.
Gene Hammett [16:22]
Oh, 5 or 6. Sorry. It’s because of team. I mean, do you have to do you have to really look at that, like, the reason why we’re able to get more brand awareness. And the reason we’re able to create, I’ve got so many new products, is because of the team. Is that fair to calculate?
Joel Clark [16:40]
Yeah, absolutely, um, a book that I really love. And I’m sure a lot of people listening here have read, but built to last by Jim Collins, and he, you know, he studied all these companies that had had sustainable growth for a long period of time. And, and they kept saying, like, we want to know why. And they kept kind of early on and said, You can’t just come back and say, it’s because of people, you can’t just do that. We got to find something else. You can’t just yeah. And so as they got into the research they kept coming back with? No, it is it’s because of the way that this the leadership style here. And that leadership style was it was very collaborative, it was very empowered. And they didn’t, although I don’t believe they used the term psychological safety in that book, I think that’s what they were creating, they were creating the right environment where people felt like empowered, where they felt they felt this Extreme Ownership and accountability where they could go out and perform. And so you know, like, we’ve tried to model that we have not had like a top-down, prescriptive leadership approach at Kodiak cakes, we have really tried to empower all of our leaders in our teams, yet, you know, you want to set clear expectations and clear goals and objectives. So people know what they’re running after. But I completely agree with you, I think having the right team, the right people, but the right structure for creating the right culture and psychological safety. Absolutely. is a direct correlation to results.
Gene Hammett [18:10]
I want to go into this a little bit with you, baby put a spotlight on it. What is counterintuitive, that you have learned about creating psychological safety?
Joel Clark [18:22]
Okay, that’s, that’s interesting, counterintuitive. I think I Okay, let me say it this way. There are some companies that might have a very psychologically safe environment, but maybe low accountability, right. So you may have one that’s very, very psychologically safe, and maybe low accountability. So, therefore, not very high performing. Okay. But you may also have another but you may have a very highly accountable organization, with a low psychologically safe environment, where people know maybe there’s a little maybe there’s a bit of a fear factor going on in there. And people are like, Oh, man, I’m delivering my results. But I’m afraid to challenge the norm. I’m afraid to speak up, right. And so I think, what we learned was that you need both. If you can create a very psychologically safe environment, but also have really, really great accountability and ownership, then I think you really have something there. And so I think that’s what I would say is it that could be counterintuitive it because are the two fightings for each other. No, they’re not fighting for each other, they actually complement each other very well.
Commercial [19:45]
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Gene Hammett [20:07]
Now, I love the fact that you talk about accountability, because it is a very important piece to leadership, I’ve never met a leader who said, We don’t need any more accountability. they pride themselves in the level they have. But also you mentioned in their ownership when people feel like owners, and I would imagine that you’ve, you’ve probably thought about this a little bit, when people have that feeling of ownership, what happens across the organization, as it relates to company growth.
Joel Clark [20:40]
People love to own things, right, like, So number one, we like to own things, just things, but that translates to the way we work, it really does. Because, you know, it’s so much more satisfying and rewarding to be able to have ownership in your work and to feel like you really created it in you, you, you. You’re just following the directions of somebody and just doing tasks. But you were thinking about that. And you were, you know, creating your work. And I think that’s so motivating. So I think, you know, we know that ownership, really, I think, let me say it this way, I think when we first we were talking about accountability, as an organization, and one thing we did, by the way, is we came up with a vision for our culture. And it was to be able to have great psychological safety and degrade accountability. But as we were talking about it with the team, we started to say, hey, how do you know, we wanted to find out? How do people feel about accountability, because sometimes the word accountability can come across as a pretty harsh, you know, you got to deliver your results on time. And kind of be could sound like a harsh word. But as we, you know, as we defined it, it became this is Extreme Ownership, we’re trying to talk about owning something. So accountability becomes a very positive concept. And I think if you can, if you can deliver it that way, then that’s if people feel empowered about the way they are being accountable, then it’s so positive, and people feel like they own what they’re doing.
Gene Hammett [22:17]
You know, I’m smiling this because I thought around this is, no one really likes to be held accountable for their work. Because they want to know that like, Oh, I can get it done no matter what. But they definitely want others to be held accountable. Because our work in a collaborative environment depends on others. Your work depends on your team. I depended on you showing up here today, Joel to get this interview. Yeah, but I love the fact that you talk about that, it really can get to a place where it binds people together. accountability is certainly not a bad thing. And you need it. Well, putting psychological safety and accountability together. And in this sense of ownership really is a great conversation for us. I want to give you one more chance. So is there anything else we haven’t talked about that you feel like has really added to the growth of the business?
Joel Clark [23:06]
Yeah, I mean, I think I feel like the culture generally has been a big one, you know, and then the two things that we’ve been talking about accountability and psychological safety, those became a kind of a vision for the culture. But I so I mean, I think I think those are, those are massive elements of how do you actually get people to want to deliver and perform? And then I think that I feel like, there’s one more thing I would kind of say, is just from an entrepreneurial perspective is one thing that you really need to think about as an entrepreneur, as you grow, is, how are you scaling yourself. And I think that’s one thing that I think I totally under anticipated, you know, about three and a half years ago, almost four years ago, now, we raised some capital. And we just needed it, we needed to have some capital and some resources in the tank, we were growing really fast. And we needed some help. And so one, and so then, that was when I kind of needed to make this transition to from just being a small note, owning and running a small business, to becoming a CEO. And I think that’s something that I under anticipated, along the way is what that transition would look like and what it would feel like.
Joel Clark [24:22]
And so that became a reality, you know, stretching time for me where I just needed to, I had to scale myself and we needed to hire a great team of the leadership team and start to really, you know, bring in some, some outside professionals who kind of knew how to how to build, build a business. And I think that’s something that leaders need to think about a little bit is how are you scaling as a leader and there comes a point where your business is it’s going to scale and you’re going to hang in there right along with it. And I think getting trained and you know, reading books and doing those types of things. really have helped me to just make that transition. And I still am. I’m still trying to scale myself every day as our business continues to grow. And so I mean, that’s what I would say is just that’s what you’ve got to work on that and think ahead for when those when your growth comes in, are you thinking ahead of that? And thinking above your role, you know, as your business growth?
Gene Hammett [25:21]
Beautiful I couldn’t have said it better myself, the evolution of a leader is necessary. Too often, we fall complacent. So. So thanks for being here on the podcast.
Joel Clark [25:32]
Yeah, thanks for having me.
Gene Hammett [25:33]
I love having interviews with people in the trenches. They really care about their people. Do you understand and feel that he cares about the people and he wants to move the business forward, he’s shared with me some of the plans to get to 200 million and beyond. But he wants the people to know how much they care. The brand that he’s building is more than just selling their products. It is about the people and how they are treated, and all of the stuff that goes into creating a team that will be psychologically safe, but also take ownership. I love these interviews. Hopefully, you continue to tune in time and time again. I love these interviews. I hope you continue to tune in to take your leadership to the next level if you want to get more specific about how you’re growing. I work with leaders during the defining moments of their own growth. One of my clients said to me once, the reason why I love working with you is that you helped me get clear about the things that are fully somewhat clear. And I knew how to take action. You gave me the confidence to really be the leader that needed to be I love that comment. I share it with you if you want to have a conversation with me. Make sure you reach out to me, [email protected]. keep evolving as a leader keep pushing beyond the boundaries. Don’t let the status quo pull you in companies, as always lead with courage. See you next time.
Disclaimer: This transcript was created using YouTube’s translator tool and that may mean that some of the words, grammar, and typos come from a misinterpretation of the video.
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