The power of company DNA and data: Interview with Danny Brooks,
co-founder at Penrose

In this episode of the Heidrick & Struggles Leadership Podcast, Heidrick & Struggles’ Angela Gardner speaks to Danny Brooks, a brand archeologist working at the intersection of data strategy and storytelling and the co-founder at Penrose, a strategy consulting firm that puts company DNA at the center of all decision making. Brooks discusses what company DNA means to him and how organizations' people management leaders should be thinking about data in that context, as well as how to use that data to connect with diverse internal and external stakeholders. He also shares some of his research regarding the growing Gen Z workforce and what leaders can do to become more effective at managing their talent.

Some key questions answered in this podcast include:

• (1:31) Can we get started with company DNA? Can you talk to us about that and how brands and archeology go together?
• (6:24) Can we talk a little bit about data? How should organizations be thinking about all the data they have available in the context of company DNA? 
• (9:25) Thinking about the emerging workforce, 30% of the workforce this year is going to be Gen Z. I know you’ve done a lot of work around generational analysis—how do we use that data? Maybe you can give us some high-level findings from your research?
• (11:49) What should we as leaders do to lead more effectively? 
• (15:21) For company DNA to be effective, who are the stakeholders that need to be at the table? 

Below is a full transcript of the episode, which has been edited for clarity.

Welcome to the Heidrick & Struggles Leadership Podcast. Heidrick is the premier global provider of senior-level executive search and leadership consulting services. Diversity and inclusion, leading through tumultuous times, and building thriving teams and organizations are among the core issues we talk with leaders about every day, including in our podcasts. Thank you for joining the conversation.

Angela Gardner: Hi, I'm Angela Gardner. I'm the partner in charge of Heidrick & Struggles’ Los Angeles office and a member of the Consumer Markets Practice. In today's podcast, I'm talking to Danny Brooks. We connected with Danny at UCLA Anderson School of Management's recent human resources retreat and are delighted to be able to continue the conversation.

Danny started his career as a chef at a world-famous restaurant. He then spent time at IDEO before joining Starbucks where he held two roles: vice president of food for global product innovation and vice president of innovation, culture, and methodologies. Today, Danny is a brand archeologist working at the intersection of data strategy and storytelling. He is a co-founder at Penrose, a strategy consulting firm that puts company DNA at the center of all decision-making. Danny, it's great to see you here today. Thanks for joining. Did I get that right?

Danny Brooks: You did! It sounds like a mouthful when I hear it. Maybe I need to shorten all these titles, but you got it exactly right.

Angela Gardner: Thank you. So, maybe we can get started with company DNA. Can you talk to us about that and how brands and archeology go together?

Danny Brooks: Yes. So, my journey toward the words “company DNA” is a long one. I spent a lot of time working in what a lot of folks referred to as “brand,” and what I found was that in describing brand, I would spend 30 or 40% of that conversation describing what I didn't do: I don't do logos, I don't do brand voice, font, color, all of the things that a lot of people think about when they hear the word “brand.” And as I ventured out of the creative realm, I needed a term that would resonate with folks that didn't require so much explanation.

I spent time with my team thinking about that, and we really started thinking about what it is that we're focused on. What we're focused on are the unique qualities and characteristics that define an organization. The funny thing is, if you replace the word “organization” with “organism,” you have the literal definition of DNA. So, we started referring to it as company DNA. I don't think we created the term, but we define company DNA as the unique qualities and characteristics that define an organization. That's the first half of the question, what's company DNA.

The second thing that you asked was about brand and archeology. “Archeology” really came about first as kind of a protective mechanism. We would go into companies and think about these unique qualities and characteristics, and the greatest fear we encountered was that we were going to come in and define who these folks were.

That's not at all what we do. What we look for is how those unique qualities and characteristics are brought to life, how people interact with each other, how the organization is perceived. All that work is essentially artifact finding, and we use those artifacts to create and articulate that company DNA. So rather than architects, we come in and think of ourselves as archeologists.

Angela Gardner: Awesome, thank you. When we spoke before, you talked about Starbucks and the brand they're emanating from the inside out. Can you talk a little bit more about that and how that emanates? I guess there's a sort of a DNA piece to that as well.

Danny Brooks: The way that we think about DNA is that there's this kind of internal intention. Who do you want to be? How do you want to show up in the world? What are your aspirations and goals? That is what we call internal DNA. It's where founders and leaders portray who they are through the organization.

The other half of DNA is perception. How is the organization perceived by stakeholders, perceived by the people that it touches? In Starbucks’ case, that's baristas, it's customers, it's vendors, supply chain marketers, and consultants. All these people touch Starbucks, and they're part of that DNA as well.

Where it starts: Howard Schultz had a concept 30, 40 years ago, to take this idea of creating an American coffee shop. That is where the DNA began, was from that founder and his intention. And as the company grew, that DNA became informed by its stakeholders as well.

Angela Gardner: Got it. And then it's intrinsically culture and brand together.

Danny Brooks: Culture and brand—you know, this is something that I feel very strongly about (you'll notice I have a lot of strong opinions!)—I believe that culture is the internal expression of company DNA, or brand as you put it, and then I believe that a company's offering, its services, its products, its environments, its communications are the external expression of company DNA. But they're defined by the same organizing framework.

What I mean by that for Starbucks: the word “connection,” and the idea of this place where people connect over coffee. That idea of connection is innate to its culture, meaning the way that we interact is going to be in a highly personal way. We're going to see each other; we're going to talk to each other about our lives outside of work. And that's the offering: the space that we hold for our customers is a place for them to interact with our baristas, etc., etc. The idea is that DNA—that unique quality and characteristic of Starbucks—might be connected.

Angela Gardner: Fantastic, thank you. So now, can we talk a little bit about data? How should organizations be thinking about all the data they have available in the context of company DNA?

Danny Brooks: Well, if company DNA is the unique qualities and characteristics of an organization, data is what tells you about the health of those qualities and characteristics. Data needs to be mapped in a specific way to who you are and what you find important. Off-the-shelf data—you know, if we find out customers like coffee—it doesn't really tell you anything about what you should do. But if you know that you use coffee as a means of creating interpersonal connection, you can start looking for data that makes sense to your organization.

Company DNA is the organizing framework for strategy, for your offering, and for how you evaluate whether you've been successful or not—if you're meeting people's needs or not. And so, company DNA gives you the priority and the way to synthesize data so that it makes sense uniquely to you. Otherwise, you know, it's the weather, it's general.

Angela Gardner: Got it, thank you. How should we most effectively use data to connect with our diverse internal and external stakeholders?

Danny Brooks: That's a complex question. I would say that the first thing, most importantly, is to make it available.

What I see in most organizations that I interact with is that data is hidden and protected for many different reasons. Some of them could be legal. Some of them could be that people want a competitive advantage within the company. Some of them feel that data exposes weaknesses or it gives away strength to competitors. The most important thing is that if data's not accessible, data's not used.

That makes people rely on intuition, and that gets us into all kinds of problems when it comes to DE&I because it's going to be the intuition of the powerful that determines how people go about their jobs—as opposed to data, which has diversity and inclusion problems but is still better than the opinion of a single individual with power. And so, number one: democratize it.

Number two is don't be afraid of bad news. You need a “from” if you are going to transform to a “to,” and that “from” is not going to be great news all the time.

If your organization strives to be more diverse, you need to have a good, long, hard look in the mirror—in the data mirror—to understand where you are today. Otherwise, you cannot measure progress.

And so, if you don't share that data because it's bad news, you also cannot share progress. What you end up doing is congratulating yourself for doing something bad.

Angela Gardner: Got it. So, keeping that in mind, and thinking about the emerging workforce, 30% of the workforce this year is going to be Gen Z. I know you’ve done a lot of work around generational analysis—how do we use that data? Maybe you can give us some high-level findings from your research.

Danny Brooks: The first thing I would say about generations is that they are a construct. So, generations are not a real thing; they are a thing that researchers use in order to study a cohort and that cohort's behaviors. That's number one. So, everything I say is going to be a generalization.

The second thing I want to say is our expectation is that—let's take millennials for example. Millennials spend a lot of time on screens. We assume that the next generation is going to be more of the same, but at a higher rate; it's going to be more screens, it's going to be similar, but a variation on the previous generation. In reality, cohorts tend to be reactions to the previous generation rather than amplifications of the previous generation.

So given that this is a construct, I would say that what I find most fascinating about Gen Z is that, on the one hand, they feel extremely stressed about our future. That's to the tune of about 86% of Gen Z that states that they feel significantly or somewhat stressed about the future of the United States.

On the other hand, they feel eager to work. 77% feel like they're going to work harder than the previous generation. They expect their jobs to impact the world, at about 60%. Because of that, 88% of this generation feels optimistic about their own personal future. So, you have this incredible pragmatism inside of Gen Z—an incredible grit and willingness to work—and a feeling that they have control over their future, and therefore it's an optimistic future. I think that that is very refreshing (as an older Gen-Xer here) and extremely accurate as to what I see in the world and from these folks.

Angela Gardner: That's fascinating. With that in mind, what should we as leaders be doing to lead more effectively?

Danny Brooks: I think the most important thing is to make as few assumptions as possible. I think that leaders believe their experience is a shared experience. I think they believe that their path to leadership is a common path to leadership. In reality, given that most leaders are white and male, that leadership path is not a common path. It's not accessible to most people.

I think leaders need to be curious about the paths that this generation is interested in taking, rather than making any assumptions based on their own experience or what they've seen in Millennials, the previous generation. Gen Z is different. Gen Z wants a seat at the table—deserves a seat at the table—and should be asked how they feel they would like to best proceed in their path of growth, and what makes them feel good.

Those are things that leaders spend so much time guessing and making assumptions and looking at surveys about, rather than actually looking someone in the eyes and asking them a question. 

The other thing I'd say, Angela, is to the point of looking someone in the eyes and asking them a question: Gen Z prefers real life interactions by a lot. They don't trust (and again, I'm generalizing here) digital interactions in the same way that we may, right here on this Zoom call, because they understand how digital interactions are used to mislead and deceive. They prefer to look you in the eye and have a real conversation with you.

So, I'll add that: be curious and look someone in their actual eyes, not in their digital eyes.

Angela Gardner: It's incredible how we are seeing circles come through in behavior. That's very, very interesting—thank you.

So, Heidrick & Struggles recently published a survey of 420 executives across eight countries. We looked at how they're trying to keep pace with change in their organizations. The interesting thing is the data show that employees are at the center of why DE&I matters and how it contributes to the company's success, both internally and externally. I'd love to hear your reaction to that.

Danny Brooks: I think it's great news. Let's start there. I think it's excellent news, first of all, that the question's being asked and that the answer’s being prioritized and acted against. I think that that's great news because of the importance of the theme.

My second reaction to it is that the person an organization touches with the most frequency is the employee. It makes sense (because we're talking about 40 hours a week rather than four instances or four intersections a week) that the employee would be absolutely the center of attention when it came to DE&I.

The last thing I would say is that, if a company seeks to impact or interact with a broad and diverse audience, it must have a broad and diverse audience that feels included and has a sense of belonging internally if it ever hopes to have that externally. If an organization is broken from DE&I standpoint inside, it can never to resonate with a diverse audience externally. That is fundamental in its DE&I journey.

Angela Gardner: Thank you. I really appreciate your feedback. So just one last question for you. For company DNA to be effective, who are the stakeholders that need to be at the table?

Danny Brooks: So, I take a very broad approach. If we are talking about company DNA as the unique qualities and characteristics that define an organization, and we truly prescribe the idea that emerges internally from leadership and externally from all stakeholders, it means everybody.

It really means everyone that is in touch with your brand, everyone that your brand impacts. That includes obviously your employees and your customers, but also your supply chain and your vendors and procurement, your partners—even, at some points, your competitors help to define who you are. An example of that is: competitors love to talk about differentiation. What they're saying is, “I am this and no one else is.” That “no one else is” helps to define everyone else.

I think about it as spheres of influence. So, in the center, you have your leaders, your founder. Maybe you have another sphere outside of that, which is about the community inside, your employees. You have another sphere outside of that, your customers. And then, outside of that, your vendors and your supply chain and your purveyors. It keeps expanding, with each circle having a different weight of influence in defining your company DNA, but each of them having a seat at that table.

Angela Gardner: Danny, this has been fantastic. Thank you so much. Before we go, any final thoughts on how we should engage our employees and customers differently in the future?

Danny Brooks: I think that, if I were to leave you with one thought, it's that most businesses are operating from a perspective focused exclusively on finance: transaction frequency (even if you're internally thinking about culture), employee acquisition, onboarding costs, training costs—everything is always boiled down to the number. Those numbers are exactly the same in every organization on the planet. Same groupings of numbers, same targets.

There is nothing different between your organization and your competitor's organization. With company DNA—with a clear code that defines who you are, who you serve, what you serve them, why they need it from you—those numbers are given context, and that is the context that allows you to serve human beings and your business, as opposed to just your financial bottom line. </p> Both are important—you need financial context—but without that human context, you're a machine and not an organization, not an organism. And so, it is incredibly important. In fact, it is imperative to think about the humanity of your organization, and not just the costs and the P&L of your organization.

Angela Gardner: Amazing, thank you. I hope we can do this again soon.

Danny Brooks: Thank you so much! It was fun.

Angela Gardner: Take care.

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About the interviewer

Angela Gardner (agardner@heidrick.com) is the partner in charge of Heidrick & Struggles’ Los Angeles office and a member of the Consumer Markets Practice.