How Paul Clayton got Jamba Inc. to Value Performance as Importantly as Culture
February 1, 2008

By Kristy J. O’Hara
Smart Business Northern California | February 2008

A young man sporting cut-off shorts, a T-shirt and flip-flops walked into Paul Clayton’s office eight years ago on his first day as CEO of Jamba Inc.

The man informed Clayton that the only thing important at the smoothie company was the established cultural values — fun, integrity, balance, empowerment and respect — commonly referred to as FIBER.

He said performance didn’t matter.

Clayton disagreed. He went on to discuss that part of integrity is delivering against your accountability, so performance really was important.

While the man somewhat agreed with Clayton’s logic, he didn’t fully buy in and soon left Jamba. If he hadn’t left, Clayton says he probably would have let the man go because he didn’t buy in to the importance of performance.

“Smart people also want to see that the company is successful, so it’s not just about we walk the talk around the values but is the performance there, as well,” Clayton says.

After Clayton’s conversation with that man, he knew people needed to understand how culture and performance tie together if he wanted to yield even better results than those the company was already experiencing.

The way to take Jamba to the next level was through hiring people who bought in to not only the culture but also that performance matters.

“At the end of the day, you’ve got to get to a place where both (culture and performance) are important and that the organization and everybody in the organization understands the accountability of performance to justify the culture,” Clayton says.

Hire for values

The first part of changing people’s attitudes is making sure you’re bringing in people on the same page as you. As a young man, Clayton worked as a general manager of a McDonald’s, so he can relate to what his GMs go through and says it’s important that team members have that understanding, too. For this reason, new Jamba employees are required to work in the stores, and telling potential employees this shows him whether or not someone will fit well with the company.

“We can tell a lot about people if they grimace or don’t want to do the in-store training or say, ‘How much time do I have to spend doing that?’” Clayton says. “In other words, they’re trying to minimize that. If people are eager to do it because they see the value and understand the role of general manager, then typically it’s a pretty good fit.”

It’s also important to ask direct questions about how they feel about the values.

“Standard interviews typically are about skill sets and experiences and how they relate to the job that you’re hiring for, but how much time in the interview process do we spend talking about values and what people hold important in terms of how they relate to other people?” Clayton says.

He talks to people about how they view work and what they feel a work environment should be like because fun is such an important value.

“Probe around how people want to be with the other people and how they choose to engage,” he says. “It ultimately comes down to what people personally value and if that connects with the company’s values. If there’s a direct connection or correlation there, then it typically works.”

He says to ask how they make decisions and interact with their teammates. It’s also important to ask how much they rely on other people’s opinions when making decisions, how they handle disagreements and how they react when decisions are made that they don’t agree with.

“You really just get into behaviors and get an assessment as to whether the person’s answers around behaviors are consistent with how you want to be as an organization,” Clayton says.

It’s also important that while you’re trying to ensure your candidate is a good fit for your organization that you also ensure that your organization is a good fit for that person.

“You have to be incredibly honest,” Clayton says. “I don’t know of a company that is perfect. I don’t know of a leader that is perfect. I think we all come with things we do well, and we all come with things we have to work on.”

Clayton says that even he sometimes struggles when it comes to living the values, but his commitment to trying his best allows him to be open with the people he interviews.

“That brings a level of credibility and transparency and ultimately a level of believability that I’m serious about what I’m talking about,” he says. “I don’t care if you’re interviewing for a job, choosing to invest in Jamba Juice or a general manager that wants to buy in to the strategy or vision of the company, believability is really based on how the information is presented and the directness and honesty in which it’s delivered.

“Everybody has to make up their own mind and make their own decisions as to whether it’s credible or believable, but I think honesty and direct communication go a long way.”

Hold people accountable

Once Clayton started getting people who bought in to the company’s values and his outlook on them, then he had to continue reinforcing them every day.

“As you bring people into the organization, and they do really live integrity, then they want you to take action on people who are using culture as a crutch or hide behind culture as a reason why we can’t deliver against their accountabilities,” Clayton says.

To avoid having the culture being just some happy statements hanging on a wall, and truly make it about performance, you have to make it part of everyone’s job expectations.

“If you want to focus on it, and you want to measure it, and you want to evaluate it, and you want to reward it, you have to treat it like anything else,” Clayton says. “Typically in a work environment, you really home in on what were your objectives, how did you perform against those objectives, what are the core competencies and skill sets you have to technically carry out in your job, but then there are behavioral things that we should look at, and those that are related to the culture and the values that we have, so you just measure those and evaluate and provide feedback and coaching and counseling.”

Incorporate how people live the company’s values as part of their quarterly or annual reviews. This focuses them on the process instead of just their end results. Ultimately, if people don’t live the cultural values, then he says it’s best to let someone go.

“It’s not just good enough to deliver the results,” Clayton says. “You have to be a good cultural fit, as well.”

This can be particularly hard for people already in the organization, but you can’t apply one set of standards to new people and another set to long-time employees, otherwise people won’t buy in.

“We have to hold people individually accountable for their responsibilities and contributions to the company,” Clayton says. “For people who have been with the company for a long time and don’t get that, the best you can do is to help them understand that, giving them honest direction and feedback, giving them a chance to succeed as the company grows and evolves. Ultimately, you have to make the right decision because people who are living the culture and delivering the performance want to make sure the right decisions are made for the organization as a whole, so you can frustrate them if you don’t take action for people who aren’t delivering the performance.”

Walk the talk

After five weeks on the job, Clayton’s head of operations wanted to discuss the upcoming companywide meeting and awards. In Clayton’s mind, he had an idea of how things should go, but that plan didn’t include the reality.

The guests were staying in a motel and the meeting was at a park right off an airport runway.

When he learned the major award winners only received engraved, 6-inch Lucite pyramids, he told his operations head to get the general manager of the year a car instead.

“We can’t afford that,” the operations head responded. “We’re on a budget.”

“We can’t afford not to,” Clayton said.

While the operations head figured a Chevy Geo would work, Clayton told him to do some digging and find out what kind of realistic car this guy wanted. When that man was recognized in that park, someone drove up in a Jeep Cherokee, honking the whole way in, and the general manager broke down crying in excitement when he received the keys.

“Not only do I remember the impact we had on him, but I remember the impact we had on every single general manager who was attending that awards ceremony because not only did we upgrade the awards, but we really celebrated in a way that was meaningful and sincere and commensurate with what we were saying,” Clayton says.

The event is now a fancy two-day extravaganza, and Clayton wouldn’t have it any other way. He says it’s expensive, but despite the cost, he knows it’s important to reward people in line with the impact they really make.

“It’s treat people how you want to be treated, and then be very sincere and genuine in walking the talk,” Clayton says. “You can go into any company in the United States or around the world, and they’ll give you a set of values, but it’s whether or not those values are alive and well within the organization (that matters).”

By giving his people the permission to spend the money, he made those values come alive, and when you believe in the benefits, you don’t mind the costs.

“Every leader or department head will face the time or the day when they have to prioritize their spending,” Clayton says. “You can’t just spend freely on everything that you want to do, so you have to prioritize it, and if you prioritize it because you believe in it, then it will happen. If it’s not a high priority for you, you’re not going to believe it, you’re not going to execute it in a high-quality way, and you’re not going to get the benefit.”

Because of his commitment to walking the talk, general manager satisfaction is up. With satisfaction up, one of the biggest expenses — turnover — is down, so to him, it justifies the celebration expense. Additionally, when people enjoy work and feel valued, that helps improve their performance.

“I believe people who are passionate and feel good about the organization that they work in will give it that little bit of extra energy, and they’re more inclined to have standards, and if we’re not meeting standards, particularly in a retail business, they’re more inclined to do something about that as opposed to looking the other way,” Clayton says.

When people do that, everyone wins. “A culture is about creating an environment people like to be in, and all that translates into passion, and that passion translates into execution, and when it comes down to performance, good execution wins,” Clayton says. “Good execution drives results.”

Clayton is certainly getting results. His people are starting to see performance as a justification to have fun, and as a result, Jamba posted 2006 revenue of $253 million and projected $300 million for last year, compared to $121 million in 2002.

“I think now that we’ve gone into a new phase in our organization, and as we hire new people and new levels of leadership, you’re clearly seeing that we’ve moved now from ‘the culture is important’ to ‘the culture is important and the performance is important,’” he says. “They go hand in hand.”

The Clayton File

Born: Akron, Ohio

Education: Bachelor’s degree, business, Boston University; MBA, University of North Carolina at Chapel Hill

What’s your biggest business challenge?

The biggest challenge is always making sure you have the right people doing the right things and that they work together well. In that process, you’re never perfect. Recognize when it isn’t working and do that quickly. Make the tough decision, and get on with it because if you don’t, you’re going to lose credibility with the rest of the team for not having made the right decision. More importantly, the team dynamics aren’t optimal, and, as a result, you’re not driving performance as you could. That’s a never-ending lesson. It’s never perfect. You think you’ve got it licked but things change.

The second one is understanding my role. I’ve always believed that technically I’ve understood what my role was, and I believe I’m a good leader, but there are days when I haven’t been as good of a leader because of pressure, stress, problems, and there are days when I haven’t been as out-front as I need to be. Those days you need to hitch up your britches, put on a happier face, and get out in front and lead the organization.

What was your first job?

I taught tennis during high school. I migrated, like many kids, into day-camp counselor and that kind of stuff. I worked one summer in a Ford automobile factory. Out of undergraduate school, I went to work as a manager in training for McDonald’s. I’ve been a GM, and I understand exactly what they do and how hard it is and the challenges they have.

What’s your favorite board game?

Clue. I just like trying to figure out puzzles and solving them faster than the other guy.

Fast fact: Clayton was previously the head of Burger King’s North American operations before taking the helm at Jamba Inc.