March 24, 2022

TPL Insights: Building Peak-Performance Cultures #111 – How Bill Higgs Built a Culture of Peak Performance at Mustang Engineering

By Rob Andrews

With paraphrased content from Bill Higgs’ book Culture Code Champions

While waiting for my vet one Saturday in 2015, a man there for the same reason and I struck up a conversation, exchanged cards, and said we’d stay in touch. Last week, this man, who we’ll call Mark, a highly accomplished C-Level executive for an industrial engineering company came to see me. He subscribes to my blog and shares my passion for building great workforce cultures. To my delight, he brought me an autographed copy of Bill Higgs’ book Culture Code Champions: 7 Steps to Scale and Succeed in Your Business. Bill’s book is one of the very best I’ve read, and we’ll spend the next few weeks digging into Bill’s philosophy, responsible for building one of the most successful businesses in Houston’s history.

According to Bill Higgs, co-founder, and former CEO of Mustang Engineering, you can change lives by creating an energetic, positive work environment that spirals people’s attitudes up, and in doing so, make this world a better place. You can also make more money and have more fun doing it. Founded in 1988, Mustang went from 0 to 6,500 employees and $1 billion revenue worldwide in less than 20 years. Mustang was one of the best performers in history, largely due to the culture Bill and his team built.

Mustang was started during a severe industry downturn in a mundane, highly competitive services industry where people go home every night and can leave for another job the next day. By the time Mustang was started, hundreds of other companies in the industry had come and gone, never getting larger than eighty people. The severe cycles eliminated any loyalty between companies and people.

Bill and his team created a high-performance team culture that worked across all aspects of the company. Basic building blocks of this culture were adapted from Bill’s experiences at West Point, in Army Ranger School, and as a combat engineer company commander. His partners brought their experiences from the tight-knit cultures of Texas A&M and Texas A&I along with their natural collaborative nature. Bill’s inclusive team culture was strong enough and dynamic enough that it changed a large portion of the industry from win-lose contracting to win-win cooperation.

That kind of success is very rare: only six out of one million start-ups grow to become billion-dollar businesses. Bill believes they achieved this level of success because of the culture of the organization they created. You read that right: because of the culture—that touchy-feely intangible quality that so many companies don’t put energy into. They did—and the habits that created the culture live on, long after the founders left the company, because their leaders embraced those habits for creating an environment they did not want to lose.

Bill says the company changed the lives of its stakeholders, their families, their vendors, and clients they served, and the communities where they lived. All the people who felt they were blessed to be touched by Mustang want the story told in a manner that will allow other companies and organizations to copy the habits that created an unbelievable destiny. The seven simple steps and habits they created are now being used by groups of Mustangers that have moved to other companies and are effectively changing those companies in an impactful way. There are many Mustang-type cultures out there now!

STEP ONE: HIRE RIGHT AND CONTINUOUSLY RECRUIT TOP TALENT

According to Bill, Hiring the right people to fit your organization’s culture and treating them right is the most important key to your organization’s success. Not doing so results in good people leaving for better opportunities where they will be valued and respected. Mustang proved that disciplined hiring practices resulted in people staying for twenty-plus years, previously unheard of on the contractor side of the oil industry. Moreover, Mustang’s turnover rate was less than 5% when the rest of the industry was north of 35%, saving the company tens of thousands of dollars in turnover costs, including training new people, poor handoffs between people due to communication, rework and losing clients either in the bid process or after working with them.

From Bill’s earliest days in business, he saw the rewards of low turnover. At the end of their second year in business, they were already working with some of the “majors” in the oil industry—Amoco, Conoco, ARCO, Shell, Marathon, and BP—because they saw that Mustang’s turnover was low. They could feel the camaraderie and team spirit in their people, and they were impressed that although they were small, they had worked on some large oil platforms in the Gulf of Mexico. The confidence from those companies—and the projects they hired them to work on—helped their fledgling company enormously.

Regarding how you find the “absolute best people”, Bill says If you’re good enough, they’ll find you! Of course, to make that happen, you have to establish that your organization is one that people will want to work for. Here are a few of Bill’s tips:

REFERRAL HIRING: “OPERATION HORSETHIEF”

Every industry is tight knit. In any geography, all the companies in the same business or industry (and are competing) know who and where the good people are. We decided not to strip our previous employer of good people. Poaching talent from our former employer just seemed wrong to us. Keeping our eyes and ears open, we found good people who needed jobs due to layoffs or company closures. We talked to the companies that were going out of business to find out who were their best people, and where did they go? This was a very effective way to get a jump start on hiring, because it’s very difficult, almost impossible, to just read a resume and interview a candidate and know you’re hiring someone who can perform at a high level every day.

The honest referrals helped us find great talent. Then, once you have a few outstanding people working for you, all you need to do is tap into their networks. This is a good way to find the best people: simply ask the valued people who already work with you, who else they know who might want to work for your organization. This was the start of what we affectionately called “Operation Horsethief” (tying in, of course, to our Mustang horse theme). Identify the horses wherever they are and go get them. The fun name kept recruiting in the front of our people’s minds. Continuous recruiting in good times and bad is critical to a strong culture. For years, this type of recruiting worked well. Although it might seem obvious to anyone reading this book, I continue to be surprised at how many companies and organizations don’t do this. Why look outside your organization when your insiders already have a network of talented contacts you can draw on?

Bill’s book is full of amazing suggestions, particularly in 2022, when we’re all experiencing the tightness of the labor market. If Bill and his team could build a company with less than 5% turnover in an industry known for severe cycles and very little loyalty between employers and employees, we can too. I hope this content has been helpful for you. Stay tuned for next week when we dig deeper into the Mustang culture.

Warmest Regards,
Rob

Rob Andrews
Allen Austin
Consultants in Retained Search & Leadership Advisory