Many leaders across the world believe growth comes by putting customers first. However, fast-growth company leaders look at it another way. Employee first leadership is what drives growth. When employees feel valued, they are bought into the growth goals fo the company. My guest today is Josh Leslie, CEO of Cumulus Networks. His company was ranked #320 in the 2019 Inc 5000 list. Employee first leadership is a way to develop employees with a feeling of ownership. Today, we talk about employee first leadership by unpacking the keys to fast-growth.
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Josh Leslie: The Transcript
Target Audience: Josh is the CEO of Cumulus Networks. Cumulus is leading the transition of the data center market from a closed and proprietary environment to one that embraces open, standards-based systems. Unlike anyone else in the market, they build networking products purely with Linux.
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.
So if I look back at my, you know, roughly, you know, 20 year career, most of it is being an employee not being , you know, management or the CEO for that matter. And it’s not no different I think, than being a student in a classroom or being a child and a child parent relationship, you sort of have that individual experience of how am I treated? What about that, Do I like, and what don’t I like? And hey, if I ever have the opportunity to do it myself, how would I do it differently?
Welcome to Growth Think Tank. This is the one and only place where you will get insight from the founders and the CEOs the fastest-growing privately held companies. I am the host. My name is Gene Hammett. I hope leaders and their teams navigate the defining moments of their growth. Are you ready to grow?
Gene Hammett [0:59]
Growing a company fast takes a really intentional leader. I talked to a lot of leaders and founders about what does the core idea of growing a company fast and today’s market? And this one big idea comes up over and over and over? Now I’ve designed this question. I know it’s a little bit hard. Maybe you’ve heard me talk about it before, but we’re going to go deep into it today in this episode. The big question is, as a leader, what’s more important, your customers or your employees?
Gene Hammett [1:28]
Now, I know it’s not an easy question. There’s a lot of kind of dynamics around it. But you know, nine times out of 10, exactly. It’s 94.1%. based on the data I have, come back over and over and over and say it’s an employee first. fast-growth companies are not huge corporations. They may have 100 employees or 200 employees, but they really do care about their people. They know their people are very valuable to the growth of the business. They know they’re valuable to taking care of the customers evolving the business over time. And so we must put the employees first. Now we’ll be clear about this and say that companies have to put the customers first. And that’s the reason why leaders are playing this role right now of employees first. And we’re going to talk about that today with Josh Leslie of Cumulus Networks, they were number 320 on the Inc list, they grew it almost 1500 percent over the last three years, over 25 million revenue, 200 employees, all of that to say, when you put all this together, he really cares about the employees because this job market he needs sharp people he needs those people to feel valued and empowered to move for the ideas and execute and serve the customers when he wants to make sure those employees are taken care of. So we’re going to be talking about that today with Josh.
Thanks for tuning in here to Growth Think Tank. Really excited about sharing this with you and before you run. I have done so many interviews in the last few weeks. I have such an exciting time to share with you those interviews had been organized into the 12 core principles of fast-growth companies. So all you have to do to get that is go to GeneHammett.com/worksheet. So you can get the 12 principles and I’ve been able to go in there and find which episodes will align to each individual episode. When you subscribe to Growth Think Tank, you will find exactly what you need so that you can move forward. And many of them haven’t been published yet, depending on when you’re hearing this. But you can tune in to the date that means the most you. Now, here’s the interview with Josh.
Gene Hammett [3:35]
Hi, Josh, how are you?
Josh Leslie [3:37]
Good morning. How are you?
Gene Hammett [3:39]
I’m good. I’m excited to have you here at Growth Think Tank. I would love for you to kick us off by telling us about cumulus networks and kind of what is it so that we can understand that?
Josh Leslie [3:52]
Yeah, sure. Cumulus Networks is a is a data center switching routing company. We just do The software part though, I mean, most people, you know, not everybody knows all the, you know, technical details of data center switches and routers, but most people have, you know, a router in their house that they use to connect to, you know, the internet and, you know, essentially switches and routers or, you know, systems that are designed to create lots of, you know, computers together. So in our case, we sell to large corporations to build large data centers, with large racks of servers, and they need, you know, very sophisticated networking equipment to connect everything together. And that’s what we make. What’s different about us is we make just the software part and our customers, you know, buy the hardware from, you know, lots of other vendors, and it gives them lots of choice and lots of flexibility.
Gene Hammett [4:45]
Well, I appreciate you giving us that context. How many employees does Cumulus have?
Josh Leslie [4:50]
Over 200 people today.
Gene Hammett [4:53]
And I’ve already shared a little bit about the growth numbers reaching that 320 on the Inc list had to be a big honor. A lot of people are excited about, you know, growing their revenue, but there’s always something behind that. So what do you what are you really excited about when you hit that growth number?
Josh Leslie [5:13]
Yeah, I mean, the, you know, we’ve gotten, you know, that’s an award that we are proud of, we had other awards in the company. And, you know, I think, you know, awards are always sort of, like, long after the fact, you know, recognition of things that we’ve already internalized. Right. And what that thing is, is, you know, making the customer successful in in a really, you know, sort of important and fundamental way. You know, we’re in a, you know, very large market, big market, lots of big competitors who’ve been around this market for 20, 30, 40 years, the overall markets not even growing that fast. It’s growing seven 8% a year so.
Josh Leslie [5:53]
So for us, you know, you start you come in as a startup you represent, you know, risk for your customer. summers and, you know, networking you could argue is as risky as it comes for a customer. I mean, you know, like when the network is down in your company or my company, you know, work ceases. So it’s not a place where customers love to take risks. And so you have all these ingredients set up to represent a real, you know, a really difficult challenge.
Josh Leslie [6:23]
Right? How do you break into a large market with big incumbents and a high-risk use case? Well, you have to really bring it all to do that you have to have great technology. Of course, that’s a big part of Silicon Valley and we love to talk about technology but you also have to have you know, committed people and you have to have you know, a real focus on the customer and you have to and you know, you just can’t like invent something amazing and have it runs away You have to iterate and you know, figure out what you’re doing well and what you’re not doing well and, and make adjustments and you have hard times along the way. And so when you actually see a very large customer, essentially about their business on your company. And it’s not just your technology, right? They’re betting their business on your company, your people, your products. It’s gratifying. And then of course, at some point after that, you know, you’ll get recognized, you know, in the media or with an award, and that feels really good, too. But I think, you know, for us internalizing the customer wins and the customer success is very tangible and really critical.
Gene Hammett [7:28]
Well, you’ve mentioned that the customer success a number of times and kind of given us that context to winning this award. But I want to ask you the big question I asked you a few weeks ago, which was, as a leader growing a fast-growth company, what’s more, important customers or employees?
Josh Leslie [7:46]
Yeah, sure. I mean, it’s a, I guess it’s an off discussed topic. And it’s not a complicated answer. I mean, I mean, of course, our customers are important. We do anything for them. But You know, we’re a people business, right? I mean, you just gotta look at our payroll, you figure out kind of what, you know, what, what, what is important to our business, I mean, 95% of our costs are people costs. And then if you think about what we do and how we do it, you know, our product is essentially the tip of the spear in terms of engagement with our customer, I mean, our customers, you know, they make a business bet on us, they have to first select our technology, and then architect it and then deploy it, and then figure out how to manage the lifecycle of it.
Josh Leslie [8:36]
And then, you know, invariably, things will go wrong, and they’ll need to work with us to support it, and they’ll be upgraded and so there’s this, you know, kind of longitudinal interaction that happens with the company from even early on. And when engineers start working on products, and they engage with customers to figure out the right products to build to, all the way up to deploying with the customer and supporting them while they’re deploying. And then after and That is their interaction with an engagement with our people and our team. And, you know, I think that engagement is it’s multi-dimensional, right? I mean, part of its just like, you know, our people good and competent. And, you know, when a customer asks hard questions are like, do we know the answer?
Josh Leslie [9:17]
And, you know, that’s kind of like table stakes and, but a lot of it is like, our people, you know, committed to what we do. Are they emotionally invested in what we do? You know, do they go the extra mile because, you know, they want to, and I think that’s like, comes out really clearly to customers when that’s true or not true. Right? I mean, we’ve all had, we’re all consumers, right? And so we’ve all had, you know, good, bad experiences with brands that are shaped by you know, small touchpoints with employees of that brand and it’s no different in an enterprise business. You know, when our employees feel that valued and empowered and trusted and consulted and you know, included, like they’re part of our team.
Josh Leslie [10:10]
I think they, they walk and talk and act differently. And I think that comes through in terms of how they interact with our customers and with our constituents. And I think that is hugely valuable, you know, fundamental to our success. And I would go so far as to say you know, you can have a good, not incredible product and still build a really valuable company with that culture. I think if you have amazing invention, amazing technology, innovation, and you get the people part wrong, you know, it’s a matter of time before you know you you squander whatever lead you have, because our markets in all these it markets are so brutally competitive, like anything that you do that sort of really cool and unique and differentiated on technology. If it’s good enough, you know, other people will show up and copy it quickly. Right, so you really have to have that fundamental, you know, the fabric of, of culture and conviction and employee engagement in the company to have a sustainable enduring business.
Now, hold on for a second, Josh just talked about 95% of his costs are people cost. Now yours is probably not that high, because you may create products or you may create something in the marketplace. But if you have a knowledge based service, if you’re creating software, if you’re creating something that is sold to your customers that is more virtual versus physical, then you probably have a very high cost of people. And you want to make sure you take care of those people because replacing them is harder than replacing someone who might be at a warehouse worker, or even a customer service rep. You want to make sure you’re taking care of your people. Now if you figured out what your cost of people are, it’s a really good measurement to understand how it works important people are to your overall business. So you should go to your panel, you should, you should add up all of the things in there that you think relate to people and see how important they are to your business. My guess is, it’s higher than 50%. It may not be 95%, like Joshua’s, but your people are very important to you back to the interview.
Gene Hammett [12:22]
So, there’s a lot of stuff in there. I would love to dive into deeper, but you know, very simply, it’s employee-first for you, where did you get that? Or where did you kind of bring that into to this organization?
Josh Leslie [12:36]
Being an employee, I think, right? I mean, you know, you know, I mean, I’m not I didn’t find this company, for better or worse. I worked my way up, starting as an individual contributor salesperson, at my first job in technology. And so if I look back at my, you know, roughly, you know, 20-year career, you know, Most of it is being an employee not being, you know, the management or the CEO for that matter. And it’s not any different, I think than being a student in a classroom or being a child and a child-parent relationship, you sort of having that individual experience of how am I treated? You know, what about that? Do I like it, and what don’t I like? And hey, if I ever have the opportunity to do it myself, how would I do it differently? Right. And so I think I have a lifetime and certainly a career worth of that experience. where, you know, I’ve had, you know, roles and jobs and companies and bosses where I’ve been super empowered and trusted, and that felt great. And one where I haven’t, and that didn’t, right, and so for me the roadmap of what I wanted to do or how I wanted to act, as a CEO was, you know, crystal clear there. Many things about being a CEO that was not clear at all to me. But how I wanted to treat people. And what I wanted the cultural normative to be in the company, those things were all very clear to me when I started.
Gene Hammett [14:13]
I want to dive into some of those pieces. But I do want to ask you this question a lot of bigger companies. And maybe it’s older leadership would say that it’s customer first. And I think a lot of that comes from the nature of business like we understand we have to have money like the extremes. Yes, we have to have customers. And they also come in they’re very short term, focused with quarterly numbers and things like that would you probably have some pressure on you, but not as much as these publicly traded companies? What else adds to, you know, that pressure of those leaders picking customer first over employee first?
Josh Leslie [14:55]
It’s a good question. I mean, you know, just thinking about it. kind of on the spot here. I mean, I would certainly say that the size and maturity of a business and the complexity of the products that you sell are, I would imagine, you know, a pretty important part of that thought process. I mean, so I’ve worked at companies where we’ve sort of grown from very small to very large right and, and in the process of growing from very small to very large every function in the company must evolve from being very custom and very bespoke, and you know, very high touch and very people-centric, too, you know, very, very machine-like very process-oriented, very costly, you know, conscious. You know, it’s like the early it’s the analogy like in sales.
Josh Leslie [15:51]
The classic analogy is like my early sales team was like, you know, a seal team. Right and my and my late my late-stage sales team is the infantry Right, so a small group of highly skilled individuals, I know everybody’s name at the beginning. And in the end, it’s really about how do I have, you know, I’m running a 20,000 person organization, you have to have replaceable parts and process. Right. So I think that it’s probably just an inevitability of business that as you get very large, and the ability to deliver a consistent experience to the customer requires you to evolve your thinking. I gotta believe there’s a balance. And I think there are big companies that have figured out how to strike that balance.
Josh Leslie [16:36]
Well, yeah, but I think that a lot of them haven’t. And I can say maybe it’s easier as a small company, it’s easier we’re 200 people. So you know, we can still we don’t have to, we’re not forced to make those choices we can say, we look at our, you know, customer support as a great part of the company to think about this, right? We want every single person that calls us ever have a great experience. We want to be able to solve their problem. We want to go to solve it quickly. We want them to talk to a smart and competent person right away. Like, that’s our goal. That’s expensive to do that, right? I mean, when you call, you know, your kid, you know, Comcast, I mean, not to pick on Comcast, they’re my, you know, like, whatever my cable provider, right? You put, like, when I call them because I have a problem, like, I don’t talk to like, a super-smart engineer in 30 seconds. Like, it just doesn’t work that way. And I get why that’s true. But when people call us, we want them to have that experience. And that’s expensive to do that. But you know, we’re at a stage in size, where we can rationalize that business expense we can afford to do that.
Josh Leslie [17:48]
Like in fact, we can’t afford to do that, in my view. As the leader and I know that as we grow and we become bigger and more successful are changing and our thinking in that area will be necessarily shifted and it won’t be a single day where all of a sudden we’re like, okay, now, it doesn’t matter anymore. But certainly, you know, for example, if we, you know, go public at some point or you know, get to that scale, like the economics of how we kind of evaluate each aspect of the business will be kind of under continual pressure and, you know, sooner or later, you know, you have to, you know, think about those things differently.
Gene Hammett [18:29]
I want to go into some of the details behind creating this employee-first culture, one of the things you said was emotionally invested. I’ve used the word, they feel a sense of ownership. Do you feel like that’s a pretty good way to capture what you’re going for there?
Josh Leslie [18:45]
Yeah, no, absolutely.
Gene Hammett [18:48]
And you mentioned empowered. You know, I’m smiling. I say that because I, you know, as a business owner, myself, I want to empower my my people to think for themselves and come up with ideas. What Have you seen as a big benefit for empowering employees as it relates to the growth of the company?
Josh Leslie [19:06]
Yeah, look, I mean, I think it’s not one big silver bullet. It’s and lots of little things that you do every day. And I can give you a couple of examples. So the first is, for example, just access to information. Right at cumulus, we provide, I mean, almost no restrictions on access to information in the company. So everybody can see everybody knows everything. Essentially. We have a board meeting. Immediately after that board meeting, we review that entire board deck in its entirety, including our detailed financials with the entire company. Right.
Josh Leslie [19:52]
We have a daily report from our CRM system that provides a snapshot of all of our clothes Business all we’re in process business around the world on a daily basis, and we send that report out to everybody in the company every single day. Right. So I think the first ingredient in that is access to information and not having secrets. You know, there’s I think, a multitude of other small cultural decisions you make, you know, like, where you we have an open floor plan, you know, everybody sits in, you know, essentially equal. And I, you know, there’s been a lot in the press about open floor plans in the last couple years and how they’re, you know, horrible or bad or this and they’re not perfect for sure. But one thing that is valuable about them is is that they remove hierarchy, or they minimize hierarchy in the company, which I think gives an in the sort of fascinating thing about a company like ours is this, I think, unique in kind of the modern era, right? Is that oftentimes the individual contributors in the companies or people that you traditionally look at as the bottom of the hierarchy?
Josh Leslie [21:08]
Those are those sorts of most valuable people in the company, right? The star salesperson, the star engineer. I mean, those are, you know, quote, unquote, the individual contributors. But those are the needle moving people in the company that essentially we in leadership, you know, spent a lot of time trying to figure out like, how do we enable that person? How do we remove obstacles with that person? How do we give that person more invaluable work to do? How do we make sure we get that person on the most valuable projects? Right, so I hink there’s lots of little decisions all the time that we make things that we do that, you know, try to give you one more example like we recently in it, you know, insert a, we got a little bigger, we try to have it, we got to do financial audits, we need more financial control. So we put in a traditional, you know, like DRP purchasing to whatever, you know, system. And so then, of course, you have to, well, who gets to approve what and how much? Right? That’s, you know, you kind of your first question before you didn’t have that policy because there was no system and that just kind of like, I don’t know what happened.
Josh Leslie [22:19]
People just did what they thought was right. And it was all small enough that we didn’t worry about it. And if something happened, we dealt with it, right. But now we have to be proactively intentful about, well, who gets to do what? So you have a choice there. And it’s an opportunity to reflect your values. And so you have you know, people that come from traditional bigger companies that have are anchored or Well, hey, we must have you know, people can only spend up to $1,000, whatever, but when we sit down and we have that conversation we always land on Well, let’s give people as much autonomy as let’s go very aggressive on approvals. Because we want a signal it’s an opportunity instead of an opportunity to create a role, it’s an opportunity to reinforce our values, which are, you know, to be empowered and to have autonomy and to go make the right decision without, you know, going through layers of bureaucracy.
Hold on for a second, Josh has talked about access to information. A lot of founders are afraid to give up too much information to their their employees to their team. They keep it into a core set, maybe it’s just the executive team, maybe it’s, maybe you don’t even share it with your executive team. But you lack transparency. That is really a dangerous place to be because those companies that have no openness or transparency across the culture, lack trust. I say that because I seen it from experience, but also know that fast growth companies embrace this sense of transparency. You can have many examples in this podcast. One of the ones I give in my speech is HubSpot. HubSpot is a fast growth software company. And after they became public, they had to change the Whole designated insider had to you had to make a decision of who gets the financial data. Well, they had built their business on openness or transparency. And they given everyone access. And what they ended up doing next was really interesting. They made every employee over 400, designated Insider. And as far as I know, there’s still continue to that today and they have thousands of access to information is very important. Open transparency promotes growth and trust. Now, back to the interview.
Gene Hammett [24:32]
You’d mentioned values there. I’ve seen a lot of fast-growth companies really live by those values. They’re hiring by them. They’re truly led by them are firing by these values, and it’s integrated into everything they do. Would you say that’s similar to Cumulus?
Josh Leslie [24:49]
Oh, gosh. I think so. You know, I have to admit a little you know, Have I have like, occasional misgivings, maybe it’s not the right word. It’s like we’ve never like written down our values on a piece of paper. And, you know, back to our earlier conversation about how do you think about leading and, you know, will you sort of doing what you did in the past?
Josh Leslie [25:14]
Well, when I was an employee, and I worked for various companies, they had these like value statements that were usually just super cheesy and oftentimes hypocritical. And I think one of the mental notes I made to myself was, I’m not going to do that, you know, like, you know, get a big group of people together so they can roll their eyes as we write down our values and post them on the wall. So so we haven’t ever done that.
Josh Leslie [25:41]
Now, of course, that doesn’t mean we don’t have values that we view as collectively important and that people know and internalize and so I have, you know, and then I think as I’ve been in a leadership role longer and longer, I sort of more and more appreciate and understand that Why so many companies have done that. And part of it is because you know, as a company gets, you know, the easy thing to do with values is to say, Well, you know, hey, I’m just going to walk the walk, right, I’m just going to act, the values that I believe are important. And I’m going to cross my fingers and hope that people emulate me. And I’m going to pick other leaders in the company that I believe is reflective of those values, and I’m going to hope they’re going to do the same and their organizations and so it’s all going to just work out organically, right. And I think that’s actually a like a pretty reasonable way to go about it up to a certain size and scale. And then you get to a bigger size of scale, it just doesn’t work at all. Because you have people that are remote, you have people that you don’t interact with, often they’re too busy. They’re not on the all hands, you make one bad hire in one part of the company and you kind of change the DNA of the company. And so you kind of get to a point where you say, Gosh, well now I know why everybody writes them all down is because you know, you have people all over the place and you need a way to consistently communicate. articulate your beliefs.
Josh Leslie [27:02]
So you can drive that kind of clarity in the company. And so we’re we kind of wrestled with that like when how, you know what, what I’ve chosen to do in the interim is to say, well, there’s a certain set of things like, for example, transparency and openness that we’ve talked about. Where, yes, we haven’t written down a list and posted on the wall. But whenever I’m in public, and I have an opportunity to talk about it, I talk about it. Right. And so I’m intentional about the kinds of behavior that we recognize in public or at an all-hands meeting or when I send an email to the company, the kind of language I want to use to reinforce things that are important to me and important to the company. And so I think it’s for us it’s been an evolving like a journey right about how we want to think about and talk about and articulate our values and it’s in process.
Gene Hammett [27:55]
Well, Josh, I really appreciate your being here at Growth Think Tank and sharing your View of leadership and culture for a fast-growth company. And I appreciate your sharing that wisdom with us today.
Josh Leslie [28:07]
Thank you for having me.
Gene Hammett [28:08]
I love this interview. It really does, you know, align with the work I have with fast-growth companies, they want to put employees first. And those leaders that are doing that consistently, are seeing tremendous growth. In fact, more than 94% of the Inc list I’ve talked to, and 2018 and 2019, over 500 of these founders and CEOs and said it’s an employee first, I share all this with you. Because I really want you to understand what does that mean for you as a leader? Well, if you are on the fence about the customer first or employee first, I really want you to rethink that.
Gene Hammett [28:43]
Now, I want you to think about what does it really take to create, buy-in with the employees that that sense of ownership, all of these things are topics that we talked about all the time, Josh talked about a lot of the details today about being empowered and feeling trusted, and really, you know, How do you take care of those star employees? Well, that’s the core of the growth Think Tank podcast. So hopefully you’re tuning in, you’re getting some value from it. If you have any questions make sure you reach out to me [email protected] where I can help you, as a leader or founder, decide what your next steps are. I do some acceleration calls I look at the growth of your company. I can quickly tell you where some of the things are, are opportunities for you to grow even faster or continue your growth if you’re wondering about that, so just reach out to me [email protected]
Gene Hammett [29:33]
As always lead with courage. We’ll 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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