1 00:00:00,520 --> 00:00:02,400 What is a high performing culture? 2 00:00:02,520 --> 00:00:05,200 It's a question as straightforward as it is 3 00:00:05,200 --> 00:00:08,360 philosophical. In the coming special episodes, 4 00:00:08,520 --> 00:00:12,000 we explore high performing cultures, what they are, how to 5 00:00:12,000 --> 00:00:15,320 create them, and most importantly how not just to 6 00:00:15,320 --> 00:00:19,480 maintain them but scale them by drawing upon the wisdom of the 7 00:00:19,480 --> 00:00:22,720 previous CE O's founders and leaders who have had the 8 00:00:22,720 --> 00:00:25,320 pleasure of interviewing over the last six years. 9 00:00:26,080 --> 00:00:29,830 Now more than ever, culture scaling is the biggest single 10 00:00:29,830 --> 00:00:32,870 issue that executives lose sleep over at night. 11 00:00:33,510 --> 00:00:37,550 This first episode we traverse the integral topic of values, 12 00:00:37,870 --> 00:00:40,870 why they are important and how they have to be at the center of 13 00:00:40,950 --> 00:00:44,310 every decision made and every behavior exhibited in a 14 00:00:44,310 --> 00:00:46,870 business, and also how best to do this. 15 00:00:47,550 --> 00:00:51,430 I'm Ed Cowan and this is episode one of the Culture Scaling 16 00:00:51,430 --> 00:01:02,370 Playbook. For the last five years, I've 17 00:01:02,370 --> 00:01:06,330 had the absolute pleasure of hosting scaling Up a podcast 18 00:01:06,330 --> 00:01:08,810 telling the growth stories of some of the most successful 19 00:01:08,810 --> 00:01:12,290 private and public companies globally as told by their 20 00:01:12,290 --> 00:01:16,690 founders, CEO's, and other key leaders who between them have 21 00:01:16,690 --> 00:01:20,450 created some $150 billion in market capitalization. 22 00:01:21,040 --> 00:01:25,920 After 42 episodes of scaling up and 300,000 words of interview 23 00:01:25,920 --> 00:01:29,040 transcripts, we now have an amazing database of knowledge to 24 00:01:29,040 --> 00:01:32,840 dive into and pull some common threads together across a range 25 00:01:32,840 --> 00:01:36,240 of topics. This episode is wholly dedicated 26 00:01:36,240 --> 00:01:39,800 to the role values play in successfully scaling people and 27 00:01:39,800 --> 00:01:42,360 culture. I'm excited to bring the moments 28 00:01:42,360 --> 00:01:45,520 that have stuck with me long after the stop button has been 29 00:01:45,520 --> 00:01:48,050 pressed on the recording. To start with though, it's 30 00:01:48,050 --> 00:01:51,530 important to understand what is a high performing culture, a 31 00:01:51,530 --> 00:01:55,770 word that can be easily used as an intangible catch all and why 32 00:01:55,810 --> 00:01:59,490 it is at the heart of the success of great teams and great 33 00:01:59,490 --> 00:02:02,330 companies. My own experience of culture was 34 00:02:02,330 --> 00:02:04,890 born in sporting teams. I was very lucky to play in 35 00:02:04,890 --> 00:02:07,970 teams that saw both triumph and disappointment. 36 00:02:08,250 --> 00:02:12,270 I became fascinated with why these teams won and why we 37 00:02:12,270 --> 00:02:15,110 sometimes lost, How players interacted with each other 38 00:02:15,270 --> 00:02:18,790 throughout each of these What was correlation and what was 39 00:02:18,790 --> 00:02:21,910 causation? When I retired from sport almost 40 00:02:21,910 --> 00:02:24,750 six years ago, having it consumed my life for the best 41 00:02:24,750 --> 00:02:26,550 part of two professional decades. 42 00:02:26,990 --> 00:02:30,430 The similarities to me as to what made a great sports team 43 00:02:30,430 --> 00:02:34,150 and what made a high performing business were blindingly stark. 44 00:02:34,670 --> 00:02:37,310 It's very hard to be a championship team without a 45 00:02:37,310 --> 00:02:40,450 grade players, but I saw time and time again it was the 46 00:02:40,450 --> 00:02:42,810 cohesion of these players that mattered most. 47 00:02:43,450 --> 00:02:47,770 It was also clear to me that to sustain success there was an 48 00:02:47,810 --> 00:02:51,170 underlying magic based in systems and processes that 49 00:02:51,170 --> 00:02:55,090 allowed for this cohesion. It requires an egoless buying in 50 00:02:55,090 --> 00:02:57,530 from all that the team comes first. 51 00:02:57,890 --> 00:03:00,970 Players believe that the higher order is team success over 52 00:03:00,970 --> 00:03:04,650 personal success and would always sacrifice the latter for 53 00:03:04,650 --> 00:03:07,650 the former. This is completely analogous to 54 00:03:07,650 --> 00:03:10,170 scaling the team in a high performance culture of a 55 00:03:10,170 --> 00:03:13,210 fast-paced business. It just does not happen by 56 00:03:13,210 --> 00:03:15,610 accident. And of course, in the rare case 57 00:03:15,610 --> 00:03:19,530 it does, it's never sustainable and at some point the business 58 00:03:19,530 --> 00:03:21,130 will hit a wall. And it's not just going to 59 00:03:21,130 --> 00:03:24,610 inhibit future growth, but in many respects can unwind 60 00:03:24,610 --> 00:03:27,610 previous steps in building long term competitive advantage. 61 00:03:28,330 --> 00:03:31,590 To back up these thoughts, a quote from Steve Hansen, the 62 00:03:31,590 --> 00:03:35,390 most successful sports coach of the most successful team in 63 00:03:35,390 --> 00:03:39,110 history, the All Blacks rings loudly in my ears. 64 00:03:39,630 --> 00:03:43,030 All good teams and and I think companies would be the same, 65 00:03:43,350 --> 00:03:47,470 they have clear drivers, things like team is first, individual 66 00:03:47,470 --> 00:03:50,070 second. They live their values from the 67 00:03:50,070 --> 00:03:52,590 top down South. They're not just things they put 68 00:03:52,590 --> 00:03:54,030 on the wall and then forget about. 69 00:03:54,590 --> 00:03:59,240 They identify the critical few. That are so important for them 70 00:03:59,240 --> 00:04:01,360 to be successful and they do that really well and they 71 00:04:01,360 --> 00:04:04,800 concentrate on that and they work hard at getting those right 72 00:04:05,200 --> 00:04:07,840 every day. They're adaptable and they're 73 00:04:07,840 --> 00:04:09,200 thinking. They're flexible in their 74 00:04:09,200 --> 00:04:13,000 thinking, so they can change in the moment if they need to, or 75 00:04:13,000 --> 00:04:15,080 they can learn faster than the opposition. 76 00:04:15,440 --> 00:04:18,560 It sounds like the same recipe for a successful company to me. 77 00:04:22,360 --> 00:04:25,800 So with this in mind, what is indeed culture? 78 00:04:26,130 --> 00:04:29,050 One of the best frameworks I have heard is from Anna Binda, 79 00:04:29,290 --> 00:04:31,410 Head of People and Culture at Asana. 80 00:04:31,690 --> 00:04:35,330 She likens it to the area of a triangle with the three defining 81 00:04:35,330 --> 00:04:38,650 points are the mission values and decision making. 82 00:04:38,810 --> 00:04:42,450 In her own words, and far better articulated than this, here is 83 00:04:42,450 --> 00:04:45,330 Anna herself. I asked people to imagine in 84 00:04:45,330 --> 00:04:48,970 their mind's eye a triangle, and at the top of that triangle is 85 00:04:48,970 --> 00:04:52,610 the mission that is really the North Star and the very top of 86 00:04:52,610 --> 00:04:55,610 the triangle at the other corner of the triangle. 87 00:04:55,940 --> 00:04:59,500 Are the values whatever they are for your organization? 88 00:04:59,500 --> 00:05:02,980 For us, it's nine things. These are the things we endeavor 89 00:05:03,300 --> 00:05:06,980 to show up with each other by. You don't always get it right, 90 00:05:07,420 --> 00:05:09,980 and we have good days and bad days, but these are our 91 00:05:09,980 --> 00:05:12,700 commitments of effort. This is how we're going to show 92 00:05:12,740 --> 00:05:15,120 up with each other. And then the third part of the 93 00:05:15,120 --> 00:05:19,200 triangle is, you know, I short handed it to the 10,000 things, 94 00:05:19,480 --> 00:05:23,120 the 10,000 decisions that we collectively make really every 95 00:05:23,120 --> 00:05:25,720 day in all aspects of the company. 96 00:05:25,920 --> 00:05:29,320 It is financial decisions that we make and where we allocate 97 00:05:29,320 --> 00:05:33,200 budget, it is what features go into the free version of the 98 00:05:33,200 --> 00:05:36,160 product and what features go into the paid version of the 99 00:05:36,160 --> 00:05:38,280 product. There are, you know, literally 100 00:05:38,280 --> 00:05:41,160 10s of thousands of these, and the way that I think about 101 00:05:41,160 --> 00:05:45,200 culture is our collective work. Work to make those 10,000 102 00:05:45,200 --> 00:05:49,480 decisions in a way that allows us to achieve our mission while 103 00:05:49,480 --> 00:05:53,000 being in line with our values. And if you create a triangle 104 00:05:53,000 --> 00:05:56,240 around those three things in the middle of that, that's where 105 00:05:56,240 --> 00:05:59,080 your culture lives. Culture, though, is never 106 00:05:59,080 --> 00:06:01,320 stagnant. It's a living and breathing 107 00:06:01,320 --> 00:06:04,080 Organism. It does not live on a page or a 108 00:06:04,080 --> 00:06:06,440 wall. It's always growing organically 109 00:06:06,440 --> 00:06:08,240 where the teams tend to it or not. 110 00:06:08,720 --> 00:06:11,680 And This is why the Triangle framework in my mind is so 111 00:06:11,680 --> 00:06:14,670 useful, because it provides boundaries as to where it can 112 00:06:14,670 --> 00:06:18,710 grow and thrive and do so in a constructive, vibrant way. 113 00:06:19,110 --> 00:06:21,670 It also alludes to the fact that every culture is different. 114 00:06:22,070 --> 00:06:25,070 Each point of the Triangle will vary from company to company. 115 00:06:25,070 --> 00:06:28,270 There's no right or wrong cultures, they're just effective 116 00:06:28,270 --> 00:06:31,150 or ineffective ones. For those that want to hear more 117 00:06:31,150 --> 00:06:33,790 from Anna, one of the world's best people and culture leaders 118 00:06:33,790 --> 00:06:37,750 in my mind, her episode was episode 6 of series five of 119 00:06:37,750 --> 00:06:41,310 Scaling Up, and it's well worth listening to in its entirety. 120 00:06:42,260 --> 00:06:45,260 One thing that will definitely emerge from this episode is the 121 00:06:45,260 --> 00:06:49,220 role values play in this, and without exhausting the analogies 122 00:06:49,220 --> 00:06:52,740 too early, there's a lovely image that may resonate with 123 00:06:52,740 --> 00:06:55,420 you, as it did with me in regards to scaling culture 124 00:06:55,660 --> 00:06:58,900 provided by Joel Montaniel, CEO of Seven Rooms. 125 00:06:59,340 --> 00:07:01,940 As we think about growing the company, the image I'll give to 126 00:07:01,940 --> 00:07:06,340 people often as rings of a tree and the next group of people, we 127 00:07:06,340 --> 00:07:09,540 hire the outer ring and it's really their job to protect the 128 00:07:09,540 --> 00:07:12,160 culture. And the core values really 129 00:07:12,160 --> 00:07:15,520 helpfully are in and strengthen the glue across all of the 130 00:07:15,520 --> 00:07:18,680 rings. A key piece of the puzzle is why 131 00:07:18,680 --> 00:07:21,200 scaling culture effectively is so important. 132 00:07:21,800 --> 00:07:26,280 There are entire library aisles full of books here, deeply based 133 00:07:26,320 --> 00:07:30,000 in data, that have effectively and conclusively drawn a link 134 00:07:30,000 --> 00:07:33,000 between effective cultures and business outcomes. 135 00:07:33,440 --> 00:07:35,960 You can simply not decouple great people from great 136 00:07:35,960 --> 00:07:38,340 outcomes. And time and time again we've 137 00:07:38,340 --> 00:07:41,500 heard great leaders say their greatest asset is their people. 138 00:07:41,940 --> 00:07:45,180 In regards to attracting and supporting a grade talent, the 139 00:07:45,180 --> 00:07:47,300 famous Steve Jobs quote comes to mind. 140 00:07:47,700 --> 00:07:50,940 The secret of my success is that we've gone to exceptional 141 00:07:50,940 --> 00:07:53,180 lengths to hire the best people in the world. 142 00:07:53,980 --> 00:07:57,860 Ethan Berman was the CEO and founder of Risk Metrics that 143 00:07:57,860 --> 00:08:01,620 listed on the New York Stock Exchange in 2010 and he was very 144 00:08:01,620 --> 00:08:04,060 clear on his job. It was to ensure that Risk 145 00:08:04,060 --> 00:08:06,580 Metrics was the world's best employer. 146 00:08:07,080 --> 00:08:10,320 His hypothesis was that culture would trump remuneration in 147 00:08:10,320 --> 00:08:12,960 regards to recruiting and retaining the best talent. 148 00:08:13,640 --> 00:08:17,160 Here's Ethan, now a TDM operating advisor on this exact 149 00:08:17,160 --> 00:08:19,720 topic. My objective is to make risk 150 00:08:19,720 --> 00:08:21,120 metrics to the world's best employer. 151 00:08:21,850 --> 00:08:24,690 And that's what we want to be because if you are the world's 152 00:08:24,690 --> 00:08:27,570 best employer, you will be successful regardless of what 153 00:08:27,570 --> 00:08:29,530 business you're in. And I said this, I said, you 154 00:08:29,530 --> 00:08:32,330 know, our competition is not other risk management firms. 155 00:08:32,409 --> 00:08:34,890 Our competition at the time was, you know, Google was Goldman 156 00:08:34,890 --> 00:08:37,370 Sachs with McKinsey. You know, the places that 157 00:08:37,850 --> 00:08:41,330 parents want their kids to go and kids getting out of the top 158 00:08:41,330 --> 00:08:44,090 schools want to join. And, you know, I think that that 159 00:08:44,090 --> 00:08:48,250 really became sort of our mantra on what our success was going to 160 00:08:48,250 --> 00:08:50,220 be. And you know that's that's hard 161 00:08:50,220 --> 00:08:52,780 as a small company. And the most important thing I 162 00:08:52,780 --> 00:08:57,260 learned from that was you don't get there by simply saying we're 163 00:08:57,260 --> 00:09:00,100 going to pay people more money, that that is not going to be the 164 00:09:00,100 --> 00:09:02,140 key to being the world's best employer. 165 00:09:02,260 --> 00:09:06,980 In fact, you could argue that they tend to go inverse, that if 166 00:09:06,980 --> 00:09:10,420 you need to be the highest employer then that is the only 167 00:09:10,420 --> 00:09:12,860 thing you have. And if that's the only reason 168 00:09:12,860 --> 00:09:15,540 people work at your company, then I don't think that's a law. 169 00:09:15,540 --> 00:09:17,100 I don't think that's long term sustainable. 170 00:09:17,770 --> 00:09:21,410 Of course, high performance in any field by its very nature is 171 00:09:21,410 --> 00:09:25,050 not just rare, but incredibly hard both physically and 172 00:09:25,050 --> 00:09:27,770 emotionally. But it is never the sacrifice of 173 00:09:27,770 --> 00:09:30,290 enjoyment. In fact, while many think of 174 00:09:30,290 --> 00:09:34,210 these as competing tensions, in my experience they're actually 175 00:09:34,210 --> 00:09:36,370 hand in glove with productive cultures. 176 00:09:36,610 --> 00:09:40,370 High performing employees value collective achievement and their 177 00:09:40,370 --> 00:09:43,810 contribution to it far more, in many cases, than wealth. 178 00:09:44,290 --> 00:09:47,620 And one quote stood out to me that encapsulates this, and it 179 00:09:47,620 --> 00:09:50,380 came from Hugh Williams. We had an incredible career 180 00:09:50,380 --> 00:09:53,500 solving some of the world's most advanced technical problems from 181 00:09:53,500 --> 00:09:56,580 Microsoft, eBay and Google among others. 182 00:09:56,860 --> 00:09:59,900 And this is Hugh discussing some of the secret source in the high 183 00:09:59,900 --> 00:10:02,500 performing teams he was a part of and led. 184 00:10:03,020 --> 00:10:06,500 So you get these incredibly motivated people who are really, 185 00:10:06,500 --> 00:10:10,580 really smart and want to be in teams and and go and drive and 186 00:10:10,860 --> 00:10:13,380 and do things. So at Microsoft we were all 187 00:10:13,380 --> 00:10:16,740 working together, You know, we were a group of people focused 188 00:10:16,740 --> 00:10:18,360 on. One outcome. 189 00:10:18,640 --> 00:10:21,720 And we were driving as hard as we could to go and get that 190 00:10:21,720 --> 00:10:24,160 outcome. And you know, I, I remember in 191 00:10:24,160 --> 00:10:27,480 my early days at Microsoft being a bit sad when it got to be the 192 00:10:27,480 --> 00:10:29,880 weekend, you know, like it got to be sort of Friday at 5:00. 193 00:10:29,880 --> 00:10:32,960 And I'm like, what a bummer. I've got a day off tomorrow. 194 00:10:33,240 --> 00:10:35,120 Now, of course, I love going home and hanging out with my 195 00:10:35,120 --> 00:10:37,760 wife and my, my young kids at the time and that was, that was 196 00:10:37,760 --> 00:10:39,880 fantastic too. But you're like, oh, do we have 197 00:10:39,880 --> 00:10:41,360 to stop? Now you know this is. 198 00:10:41,520 --> 00:10:45,160 This is awesome, and so I worked phenomenally hard and the time 199 00:10:45,160 --> 00:10:48,300 went incredibly quickly. Because it was just such a great 200 00:10:48,300 --> 00:10:51,820 set of people to work with and I felt like we were really making 201 00:10:51,820 --> 00:10:53,580 a difference really, really fast. 202 00:10:53,980 --> 00:10:56,980 So what are the benefits of having a passionate, engaged and 203 00:10:56,980 --> 00:10:59,660 highly productive A grade employee base? 204 00:11:00,060 --> 00:11:02,620 And I don't want to be too obvious here, but we know that 205 00:11:02,620 --> 00:11:05,540 it reduces the cost. Base world class employees are 206 00:11:05,540 --> 00:11:09,220 far more efficient and if they feel like they are deeply valued 207 00:11:09,220 --> 00:11:12,220 and aligned to the company, retention's far easier. 208 00:11:12,220 --> 00:11:15,380 And as your employer brand grows, so is recruitment. 209 00:11:15,950 --> 00:11:18,950 The cost of the business of great talent leaving is immense. 210 00:11:19,430 --> 00:11:21,710 You not only have to try and replace them, which is both 211 00:11:21,750 --> 00:11:24,990 costly in time and money, but the gap they leave in the 212 00:11:24,990 --> 00:11:28,910 meantime can have a compounding and outsized detrimental impact 213 00:11:28,910 --> 00:11:32,790 on those who are directly in the orbit of the now exemployee. 214 00:11:33,870 --> 00:11:36,790 More importantly though is we know it drives the top line 215 00:11:36,790 --> 00:11:39,430 growth. Aside from this being incredibly 216 00:11:39,430 --> 00:11:42,790 efficient growth, great teams are far more innovative by their 217 00:11:42,790 --> 00:11:46,050 very nature and that innovation will be targeted. 218 00:11:46,050 --> 00:11:48,850 It will be customer centric, it will be business outcome 219 00:11:48,850 --> 00:11:52,850 orientated and ultimately it will drive long term revenue 220 00:11:52,850 --> 00:11:56,090 growth as new products or better products are built and sold. 221 00:11:56,610 --> 00:11:59,930 Much has been made of this. Reed Hastings of Netflix coined 222 00:11:59,930 --> 00:12:04,090 a talent density and how to foster it, be it hiring stunning 223 00:12:04,090 --> 00:12:06,530 employees and promoting employee freedom. 224 00:12:06,850 --> 00:12:09,210 But the data around this is compelling. 225 00:12:10,100 --> 00:12:12,660 I've been lucky enough to have seen Didier Elzinger, the 226 00:12:12,660 --> 00:12:16,180 cofounder and CEO of Culture AMP, in action in close 227 00:12:16,180 --> 00:12:18,540 quarters. Culture AMP has the largest 228 00:12:18,540 --> 00:12:22,540 proprietary data set as it relates to culture with over 229 00:12:22,540 --> 00:12:25,620 6000 customers, and I've seen Didier present some of their 230 00:12:25,620 --> 00:12:29,820 research as it relates to this data for private companies. 231 00:12:30,020 --> 00:12:33,540 It's not the quantum of funding that makes companies innovative, 232 00:12:33,980 --> 00:12:37,690 Rather than having a culture that emphasizes innovation, that 233 00:12:37,690 --> 00:12:39,930 will make you most likely to receive funding. 234 00:12:40,370 --> 00:12:43,010 In fact, companies with high engagement and confidence in 235 00:12:43,010 --> 00:12:46,250 both the company and its leadership are also a leading 236 00:12:46,250 --> 00:12:49,650 indicator for public companies. And this is also true. 237 00:12:49,650 --> 00:12:53,530 Positive employee perception metrics are leading indications 238 00:12:53,690 --> 00:12:56,810 of stock price success. I'll post A blog to this 239 00:12:56,810 --> 00:12:59,770 research in the company notes this podcast as I'm sure a few 240 00:12:59,770 --> 00:13:06,650 listeners will want to dive in further values. 241 00:13:07,260 --> 00:13:10,500 When do they get formalized? This episode is dedicated from 242 00:13:10,500 --> 00:13:12,860 here on. The role values play in 243 00:13:12,860 --> 00:13:16,220 successfully scaling people and culture and their importance 244 00:13:16,220 --> 00:13:18,540 cannot be understated. They have to be at the center of 245 00:13:18,580 --> 00:13:21,380 every decision made and every behavior exhibited in the 246 00:13:21,380 --> 00:13:23,580 business. Values are the cultural 247 00:13:23,580 --> 00:13:27,780 guardrails from setting strategy to customer interactions to the 248 00:13:27,780 --> 00:13:31,420 full employee experience. Every split moment, every micro 249 00:13:31,420 --> 00:13:35,500 decision has to be within these guardrails that the values of 250 00:13:35,500 --> 00:13:38,980 the business provides. The values have to be the glue 251 00:13:38,980 --> 00:13:41,980 that binds the business together and I like to think of them as 252 00:13:41,980 --> 00:13:44,220 the foundations to which the business is built on. 253 00:13:44,780 --> 00:13:47,340 And of course these are unique to each and every company. 254 00:13:48,020 --> 00:13:51,340 The most listened to scaling up episode has in fact been the 255 00:13:51,340 --> 00:13:53,860 very first one. And given it was the first 256 00:13:53,860 --> 00:13:56,140 episode, it was certainly a little raw and rough around the 257 00:13:56,140 --> 00:13:57,860 edges. But people gravitate to 258 00:13:57,860 --> 00:14:01,460 listening to it, to hear the irrepressible founder and CEO of 259 00:14:01,460 --> 00:14:06,230 Guzman Egomez, Stephen Marks. Now Guzman has five values, and 260 00:14:06,230 --> 00:14:08,390 I'll read them out. It's all about the food. 261 00:14:08,790 --> 00:14:11,470 Make every customer love us. Be real. 262 00:14:11,470 --> 00:14:13,550 Got your back. It's up to us. 263 00:14:14,510 --> 00:14:17,390 Now I'll highlight these because in the space of two minutes of 264 00:14:17,390 --> 00:14:22,110 that episode on a conversation totally unrelated to values, 265 00:14:22,510 --> 00:14:25,590 every single one of these values permeates deeply. 266 00:14:25,590 --> 00:14:28,270 In a response, Steven gave about his wider team. 267 00:14:28,790 --> 00:14:30,150 Right. At this point in time, you know 268 00:14:30,150 --> 00:14:31,710 we have 4000 people in the restaurants. 269 00:14:32,770 --> 00:14:35,650 There is no G by G without them. We're one family and we're one 270 00:14:35,650 --> 00:14:37,370 team. And that's a genuine way I look 271 00:14:37,370 --> 00:14:39,410 at it when we were starting as well, and people were like, So 272 00:14:39,410 --> 00:14:41,130 what are your values? And I mean values. 273 00:14:41,130 --> 00:14:42,810 I thought that was like some sort of bullshit thing you have 274 00:14:42,810 --> 00:14:45,010 in the back of a door. But I realized that we really 275 00:14:45,010 --> 00:14:47,370 have values, you know? And my business part would say 276 00:14:47,370 --> 00:14:49,330 to me, dude, this is what you talk about all day long. 277 00:14:49,330 --> 00:14:52,410 I'm gonna allude to this right through this episode, but I'm 278 00:14:52,410 --> 00:14:55,570 gonna be explicit here. The most important trait of a 279 00:14:55,570 --> 00:14:59,570 good set of values is that they guard behaviors, decisions, and 280 00:14:59,570 --> 00:15:01,530 actions in a way that is consistent with the 281 00:15:01,530 --> 00:15:05,410 organization's purpose and underlying cultural identity, 282 00:15:05,890 --> 00:15:07,690 especially in times of adversity. 283 00:15:08,690 --> 00:15:11,530 What became apparent throughout all the recorded scaling up 284 00:15:11,530 --> 00:15:15,050 episodes is the tension that can exist when it comes to value. 285 00:15:15,410 --> 00:15:18,210 And it's a positive tension of both setting and living these 286 00:15:18,210 --> 00:15:22,620 values and how this permeates through the organization by 287 00:15:22,620 --> 00:15:25,180 virtue of the fact that the values are usually born or 288 00:15:25,180 --> 00:15:28,740 representative of the initial forging moments of a small team. 289 00:15:29,220 --> 00:15:31,220 When is the right time to formalize them? 290 00:15:31,500 --> 00:15:33,540 Is the process top down or bottoms up? 291 00:15:33,900 --> 00:15:37,180 Can they change over time? As it relates to the first 292 00:15:37,180 --> 00:15:40,260 question, there is a time when the founding team look up and 293 00:15:40,260 --> 00:15:43,580 realize that there is a deep need to be a codification of all 294 00:15:43,580 --> 00:15:46,300 the behaviors that they have initially taken for granted. 295 00:15:46,820 --> 00:15:49,220 It is rarely intentional words on a page. 296 00:15:49,220 --> 00:15:51,260 The plan for before the rubber hits the road. 297 00:15:52,490 --> 00:15:56,370 In Kate Morris's case at Adore Beauty and now ASX listed 298 00:15:56,450 --> 00:15:59,290 ecommerce business, it was the moment when she had made some 299 00:15:59,290 --> 00:16:02,370 hasty highs and the cultural wheels had started to wobble 300 00:16:02,370 --> 00:16:04,850 because of it. Once that short period of 301 00:16:04,850 --> 00:16:08,770 toxicity had subsided, they sat down to ensure that that would 302 00:16:08,770 --> 00:16:11,450 never happen again. Or in her words. 303 00:16:11,650 --> 00:16:14,010 So we all work together on putting. 304 00:16:14,490 --> 00:16:18,010 Putting together a list of cultural values which basically 305 00:16:18,010 --> 00:16:20,930 represented okay. When things are great here. 306 00:16:20,930 --> 00:16:23,330 When things are going really. Well, what? 307 00:16:23,330 --> 00:16:26,410 Behaviors are we seeing what are the what are the sort of 308 00:16:26,410 --> 00:16:30,010 consistent threads of the things that make it good to be here or 309 00:16:30,010 --> 00:16:32,010 make this a good company or you know or. 310 00:16:32,090 --> 00:16:34,090 I mean and a high performing company as well. 311 00:16:34,610 --> 00:16:39,690 And to work together on that list of values that we then have 312 00:16:39,690 --> 00:16:43,250 ever since used as sort of the fundamental. 313 00:16:43,820 --> 00:16:47,060 Pieces. Of, of recruitment of 314 00:16:47,060 --> 00:16:49,900 performance management and. You ask everybody here. 315 00:16:49,900 --> 00:16:53,180 Would you know would? Bang on about the values all of 316 00:16:53,180 --> 00:16:56,700 the time because we expect everybody to be able to use 317 00:16:56,700 --> 00:17:01,340 those those key values as decision making tools on a 318 00:17:01,340 --> 00:17:04,020 day-to-day basis. The call that I would make here 319 00:17:04,020 --> 00:17:07,940 is that for authentic values to scale, they must require cut 320 00:17:07,940 --> 00:17:09,700 through. They have to be unique and 321 00:17:09,700 --> 00:17:12,260 representative of the people inside the organization. 322 00:17:12,940 --> 00:17:16,339 They need to avoid pithy, one word genericism that can often 323 00:17:16,339 --> 00:17:19,980 be conflated with other intended ideas, or worse still, they just 324 00:17:19,980 --> 00:17:23,260 become white noise. Couching values in colloquial 325 00:17:23,260 --> 00:17:25,940 phrases used in the corridors can be great for this. 326 00:17:26,260 --> 00:17:30,140 As an example close to home, one of Tdm's values is where the 327 00:17:30,140 --> 00:17:33,900 yellow hat, and it was born out of a total misunderstanding of 328 00:17:33,900 --> 00:17:37,580 Edward de Bono's 6 hat thinking. And it's a humorous origin 329 00:17:37,580 --> 00:17:40,500 story, but it's now a very common phrase here at TDM. 330 00:17:41,190 --> 00:17:44,510 It's become almost slang for I'm looking for the courage to be a 331 00:17:44,510 --> 00:17:48,270 little vulnerable, perhaps think a bit differently by asking what 332 00:17:48,270 --> 00:17:50,630 otherwise might be perceived as a silly question. 333 00:17:51,270 --> 00:17:54,430 And it's this colloquialism around the corridors that's 334 00:17:54,430 --> 00:17:57,710 permeated into meetings and beyond to any way people are 335 00:17:57,710 --> 00:18:00,470 requesting just some form of psychological safety. 336 00:18:01,150 --> 00:18:04,550 For Mike Frizzell and James Edwards, the two cofounders of 337 00:18:04,550 --> 00:18:08,310 Australia's largest online pet retailer, Pet Circle, the 338 00:18:08,310 --> 00:18:11,470 instigation for their values was the formal hire of a head of 339 00:18:11,470 --> 00:18:13,830 people and culture. And at the same time, it was 340 00:18:13,830 --> 00:18:16,990 them themselves who had stopped doing all the hiring they needed 341 00:18:16,990 --> 00:18:20,310 to formalize what they valued. And like everything that those 342 00:18:20,310 --> 00:18:22,430 two had done, it was very deliberate. 343 00:18:22,550 --> 00:18:26,230 And to hear why, here's Mike. And we never got comfortable 344 00:18:26,230 --> 00:18:29,310 with the idea of writing values or culture because our belief, 345 00:18:29,550 --> 00:18:32,190 and probably didn't articulate at the time, was it has to be 346 00:18:32,190 --> 00:18:36,430 real and it has to be us. And so writing something down 347 00:18:36,430 --> 00:18:39,710 and seeking input in a small company from what everyone wants 348 00:18:39,710 --> 00:18:42,310 it to be wouldn't be real. So it took us a long time to 349 00:18:42,310 --> 00:18:44,870 kind of resolve what's made us a good team. 350 00:18:44,870 --> 00:18:47,030 And what makes the people around us a good team is what is the 351 00:18:47,030 --> 00:18:49,470 culture. And so our job was to reflect 352 00:18:49,470 --> 00:18:51,910 that this is the culture and it came out, we've got 5 now. 353 00:18:51,910 --> 00:18:54,830 And so it took us a while to sit down and be comfortable with 354 00:18:54,830 --> 00:18:57,470 what the commonality was. And it's actually not what most 355 00:18:57,470 --> 00:18:59,550 startups are. Commonalities be individual. 356 00:19:00,540 --> 00:19:01,620 We didn't. You had good words. 357 00:19:01,660 --> 00:19:03,220 You didn't call it a culture. We called it like. 358 00:19:03,460 --> 00:19:04,820 A work contract. Ways of working. 359 00:19:05,300 --> 00:19:07,140 Or something. Yeah, this is a contract between 360 00:19:07,140 --> 00:19:10,620 you and your peers about how you'll treat each other, cuz we 361 00:19:10,620 --> 00:19:13,220 thought about it as. What you do at work, like when 362 00:19:13,220 --> 00:19:17,380 you turn up to work, what can you expect from the business and 363 00:19:17,380 --> 00:19:18,940 from the people you're working with within the business? 364 00:19:18,940 --> 00:19:20,740 And that's where we want to start and end it. 365 00:19:21,180 --> 00:19:24,780 What did become surprisingly apparent to me that I'd not 366 00:19:24,780 --> 00:19:28,060 factored in coming from a singular team sport is the 367 00:19:28,060 --> 00:19:31,140 possibility for multiple cultures to coexist inside a 368 00:19:31,140 --> 00:19:34,500 business, be it because of geography and a global business 369 00:19:34,500 --> 00:19:38,460 and various local offices molding variations, or depending 370 00:19:38,460 --> 00:19:40,660 on the type of business, different organization 371 00:19:40,660 --> 00:19:43,020 departments having distinct cultures. 372 00:19:43,580 --> 00:19:46,060 And that makes sense. The warehouse team and a 373 00:19:46,060 --> 00:19:49,020 consumer business will operate differently to the marketing 374 00:19:49,020 --> 00:19:51,020 team. In a software business, the 375 00:19:51,060 --> 00:19:54,180 engineers have significantly different workflow to the sales 376 00:19:54,180 --> 00:19:58,660 reps, but as it relates to values, and this is I guess the 377 00:19:58,660 --> 00:20:01,180 point as it relates to the values acting as a work 378 00:20:01,180 --> 00:20:03,820 contract. As Mark put it, these multiple 379 00:20:03,820 --> 00:20:07,020 cultures are all right for the people that they serve. 380 00:20:07,500 --> 00:20:10,860 The culture is what makes the team feel comfortable, engaged 381 00:20:10,860 --> 00:20:13,860 and productive. But they have to sit and fit 382 00:20:13,860 --> 00:20:15,980 under these core values of the business. 383 00:20:16,300 --> 00:20:19,100 They can't be incongruent with the values in any shape, way or 384 00:20:19,100 --> 00:20:22,020 form. And one prominent theme that did 385 00:20:22,020 --> 00:20:25,580 emerge that can sit side by side in this framework of values as a 386 00:20:25,580 --> 00:20:28,280 work contract. Relates to this horizontal 387 00:20:28,280 --> 00:20:31,520 threat of mission and purpose. Ultimately the purpose of any 388 00:20:31,520 --> 00:20:34,800 business is to serve the customer and this usually plays 389 00:20:34,800 --> 00:20:37,960 into the formulation, codification and living of the 390 00:20:37,960 --> 00:20:40,160 values by high performing employees. 391 00:20:40,400 --> 00:20:43,280 Here's a snippet from an interview I did some years ago 392 00:20:43,280 --> 00:20:47,360 now with Jonathan Call, the then CEO of Ellie Mae, before it was 393 00:20:47,360 --> 00:20:51,840 bought and sold again for $11 billion US The culture. 394 00:20:51,840 --> 00:20:55,230 In many ways, just started with with SIG pretty quickly as he 395 00:20:55,230 --> 00:20:56,950 surrounded. Himself with people, you know, 396 00:20:56,950 --> 00:21:01,150 folks that that shared a common viewpoint And then? 397 00:21:01,150 --> 00:21:03,310 The culture really became the people here. 398 00:21:03,310 --> 00:21:06,790 And so you know, it's always. Been in many ways we just talked 399 00:21:06,790 --> 00:21:09,590 about you know high tech company with old fashioned values, but 400 00:21:09,590 --> 00:21:13,390 it's it's been about you know being focused on our customers, 401 00:21:13,710 --> 00:21:18,630 building great products, great services and really thinking 402 00:21:18,630 --> 00:21:22,230 about the relationship with our customers as a partnership, as a 403 00:21:22,230 --> 00:21:25,150 relationship. And so knowing that that is the 404 00:21:25,150 --> 00:21:29,110 case, you know how do you make sure that you are open and 405 00:21:29,110 --> 00:21:33,590 honest and transparent and are listening and responsive and 406 00:21:33,590 --> 00:21:41,030 make the customers feel that way living the values and codifying 407 00:21:41,030 --> 00:21:43,310 them both formally and informally. 408 00:21:44,190 --> 00:21:46,990 Of course core values are meaningless if they're simply 409 00:21:46,990 --> 00:21:50,070 words on a wall. Operators need to understand how 410 00:21:50,070 --> 00:21:52,670 to scale these behaviors that they represent. 411 00:21:52,980 --> 00:21:55,660 They need to codify these behaviors that underlie the 412 00:21:55,660 --> 00:21:59,380 values, make them both actionable and crystal clear as 413 00:21:59,380 --> 00:22:02,340 to their intent. An example that keeps coming to 414 00:22:02,340 --> 00:22:04,860 mind is the one Joel Montaniel left me with. 415 00:22:05,340 --> 00:22:08,580 Their value put everything on the table upon to their 416 00:22:08,580 --> 00:22:11,580 restaurant serving software, of course is the idea that they 417 00:22:11,580 --> 00:22:14,540 should be able to be fully transparent and honest with each 418 00:22:14,540 --> 00:22:16,700 other. There shouldn't be anything that 419 00:22:16,700 --> 00:22:19,950 they can't say and by putting everything on the table you 420 00:22:19,950 --> 00:22:21,590 ultimately get to the best outcome. 421 00:22:21,590 --> 00:22:24,070 And so, for instance, at the end of meetings, the question will 422 00:22:24,070 --> 00:22:26,390 be asked, did we put everything on the table? 423 00:22:26,630 --> 00:22:30,190 It gives the final opportunity space and permission to speak 424 00:22:30,190 --> 00:22:32,710 up, express doubts, challenge ideas. 425 00:22:33,070 --> 00:22:36,230 The posters or murals on the wall are lip service unless 426 00:22:36,230 --> 00:22:37,910 employees know what the values are. 427 00:22:37,910 --> 00:22:39,950 Well lived. One of the best culture 428 00:22:39,950 --> 00:22:43,110 handbooks I've seen has been produced by Rocked Bruce 429 00:22:43,110 --> 00:22:44,550 Buchanan. You'll hear right throughout 430 00:22:44,550 --> 00:22:47,950 this series give very explicit behaviors expected for the 431 00:22:47,950 --> 00:22:50,430 different levels of the organizational ladder. 432 00:22:51,070 --> 00:22:53,870 Those expectations diverge greatly depending on where you 433 00:22:53,870 --> 00:22:56,510 sit on it. While obvious the standard 434 00:22:56,510 --> 00:22:59,990 expected, the C-Suite vastly differ to those of a first year 435 00:22:59,990 --> 00:23:02,310 graduate. But importantly, it's clear to 436 00:23:02,310 --> 00:23:05,230 all employees what they are and to what they'll be held 437 00:23:05,230 --> 00:23:08,310 accountable to. Rick Stallmeyer, founder of Mind 438 00:23:08,310 --> 00:23:10,390 Body, had a very simple framework to help this 439 00:23:10,390 --> 00:23:12,910 codification and I think best to hear it from him. 440 00:23:13,270 --> 00:23:16,710 Best way to explain any core value is to discuss the opposite 441 00:23:16,710 --> 00:23:17,910 of it. One of our core. 442 00:23:17,910 --> 00:23:20,950 Values is humble and helpful. Well, it's really easy to 443 00:23:20,950 --> 00:23:23,670 explain the importance of that because imagine the opposite. 444 00:23:23,710 --> 00:23:26,030 Arrogant and unhelpful. I don't care how. 445 00:23:26,030 --> 00:23:27,790 Talented you are. You don't belong here. 446 00:23:28,190 --> 00:23:30,230 If you are arrogant and unhelpful and we will not 447 00:23:30,230 --> 00:23:33,550 tolerate, the organization will literally expel such a person. 448 00:23:33,870 --> 00:23:37,290 If they manage to fool us enough to get hired, this is also true 449 00:23:37,290 --> 00:23:41,250 for the positive extremes of any singular core value, and why 450 00:23:41,250 --> 00:23:43,530 attaching behaviors to each is so important. 451 00:23:43,770 --> 00:23:47,210 It's also why the more narrowly they're defined, the less likely 452 00:23:47,210 --> 00:23:49,570 they're going to be weaponized in ways that are odds with their 453 00:23:49,570 --> 00:23:52,290 intention. Living a value to a radical 454 00:23:52,290 --> 00:23:55,130 endpoint leads to as many poor outcomes as living the 455 00:23:55,130 --> 00:23:57,290 antithesis of the value in the 1st place. 456 00:23:57,930 --> 00:24:01,660 Bill Magnusson, CEO and Co founder of Braves, articulated 457 00:24:01,660 --> 00:24:04,700 how they overcome this to some degree with incoming hires 458 00:24:04,700 --> 00:24:08,580 during his CEO Values workshop. He tries to articulate what is 459 00:24:08,580 --> 00:24:12,020 hard about living age value. Values are at their most 460 00:24:12,020 --> 00:24:15,980 valuable when people disagree or you need to prioritize and make 461 00:24:15,980 --> 00:24:18,780 tough decisions. So one of ours is don't ignore 462 00:24:18,780 --> 00:24:20,740 smoke. And So what this value is 463 00:24:20,740 --> 00:24:23,820 actually impressing upon you is not that you should just, like, 464 00:24:23,820 --> 00:24:26,340 complain about everything you see, but rather that we need to 465 00:24:26,340 --> 00:24:28,060 act with urgency when something might be wrong. 466 00:24:28,060 --> 00:24:30,740 When you see smoke and you say something, you know the people 467 00:24:30,740 --> 00:24:33,340 around you should help. Not only do we not shoot the 468 00:24:33,340 --> 00:24:35,020 messenger, we actually embrace them. 469 00:24:35,600 --> 00:24:38,680 And you know, really communicating what it is about 470 00:24:38,680 --> 00:24:42,760 the value that is hard I think is the most important part. 471 00:24:42,760 --> 00:24:45,520 So I think embracing that in a communication of the values 472 00:24:45,520 --> 00:24:47,720 right out of the gate is really valuable as well. 473 00:24:47,720 --> 00:24:50,240 Of course, constantly reinforcing what great looks 474 00:24:50,240 --> 00:24:54,040 like with values well lived is also crucial to allow the 475 00:24:54,040 --> 00:24:56,280 behaviors to permeate and become the norm. 476 00:24:56,600 --> 00:24:59,920 Sounds funny, but culture scaling is reliant on this 477 00:24:59,920 --> 00:25:03,160 normalization of what has forever been taken for granted, 478 00:25:03,590 --> 00:25:05,670 the cultural iconography or artifacts. 479 00:25:05,670 --> 00:25:08,910 He plays such a strong role. Mike Sabinas at League A 480 00:25:08,910 --> 00:25:12,750 Canadian Healthcare scale up from day one, has used culture 481 00:25:12,750 --> 00:25:16,310 cards at town hall meetings to symbolize more than a token of 482 00:25:16,310 --> 00:25:20,030 appreciation, but a moment of recognition amongst all peers to 483 00:25:20,030 --> 00:25:23,390 call out and activate exemplars of living the values. 484 00:25:23,790 --> 00:25:28,110 Phil McKenzie at Pacific Smiles has done something similar using 485 00:25:28,110 --> 00:25:31,830 storytelling and symbolism to via a similar method. 486 00:25:32,590 --> 00:25:35,830 While a small gesture is the meaning behind them that can be 487 00:25:35,830 --> 00:25:39,390 so galvanizing to fast growing teams to shine a light on 488 00:25:39,390 --> 00:25:42,070 culture carriers who otherwise and usually go about their 489 00:25:42,070 --> 00:25:45,510 business without fuss, setting an example in the shadows for 490 00:25:45,510 --> 00:25:48,630 others to follow their actions. Humans have thrived on 491 00:25:48,630 --> 00:25:51,790 storytelling to scale behaviors for thousands of years. 492 00:25:52,070 --> 00:25:54,590 The modern age of company building should be no different 493 00:25:54,870 --> 00:25:56,430 of course. In a fast growing company, 494 00:25:56,430 --> 00:25:59,910 almost by definition headcount is growing at least in line with 495 00:25:59,910 --> 00:26:02,720 top line growth. The doubling of headcount for 496 00:26:02,720 --> 00:26:06,720 two consecutive years will mean 75% of the team will be new to 497 00:26:06,720 --> 00:26:08,680 the organization over that period of time. 498 00:26:08,920 --> 00:26:11,840 The values that have been defined by a small number and 499 00:26:11,840 --> 00:26:15,760 now live by so many, the easiest in theory but hardest in 500 00:26:15,760 --> 00:26:17,680 practice. Way to ensure new employee 501 00:26:17,680 --> 00:26:21,840 values alignment is to use the values as both a recruiting tool 502 00:26:22,360 --> 00:26:24,560 but also a clear test right throughout the interview 503 00:26:24,560 --> 00:26:27,630 process. Not to do this is just flirting 504 00:26:27,630 --> 00:26:30,990 with extreme danger and I've seen it close quarters what bad 505 00:26:30,990 --> 00:26:33,070 actors can do to the culture of a team. 506 00:26:33,390 --> 00:26:37,110 Their behavior becomes the acceptable standard and very 507 00:26:37,110 --> 00:26:38,790 quickly the norm for everyone else. 508 00:26:38,790 --> 00:26:46,110 Sadly, values and hiring from interviewing to onboarding and 509 00:26:46,110 --> 00:26:48,810 beyond. Perhaps the most important take 510 00:26:48,810 --> 00:26:52,110 away from all the interviews I've conducted is the role that 511 00:26:52,110 --> 00:26:54,950 values play in the hiring process. 512 00:26:55,370 --> 00:26:58,810 Here's Paul Bassett, who is a cofounder of SEEK, reflecting on 513 00:26:58,810 --> 00:27:02,650 his own experience. My skills as a leader are I 514 00:27:02,650 --> 00:27:07,570 think I'm very good at identifying talent and and what 515 00:27:07,850 --> 00:27:11,970 I've always optimized for values, alignment and raw 516 00:27:11,970 --> 00:27:14,850 ability over experience. I think experience is the most 517 00:27:15,010 --> 00:27:17,570 the most overrated attribute in hiring. 518 00:27:17,970 --> 00:27:20,450 Not that it's unimportant, but a lot of areas we just over index 519 00:27:20,450 --> 00:27:23,250 for experience. Bruce Buchanan, the CEO and 520 00:27:23,250 --> 00:27:27,410 cofounder of Rocked also really stressed this during episode two 521 00:27:27,410 --> 00:27:29,410 of the very first series of scaling up. 522 00:27:29,850 --> 00:27:34,050 Here's Bruce I don't do anymore. So once we got to 180 or 523 00:27:34,050 --> 00:27:37,890 something, we trained up a bunch of people in the business that 524 00:27:37,890 --> 00:27:40,650 do what we call bar raises and and they answer three key 525 00:27:40,650 --> 00:27:42,570 questions. The bar raises are from some 526 00:27:42,570 --> 00:27:45,290 other part of the business and the bar raiser process is 3 527 00:27:45,290 --> 00:27:47,570 questions. Is this person aligned with our 528 00:27:47,570 --> 00:27:49,730 values? Which is a yes or no? 529 00:27:50,520 --> 00:27:52,520 Where does this person spike in competencies? 530 00:27:52,520 --> 00:27:55,320 And the last question we ask people is will this person raise 531 00:27:55,320 --> 00:27:56,600 the bar of the teammate going in? 532 00:27:56,720 --> 00:27:59,760 Anna Binder, who you've already heard from in this episode, the 533 00:27:59,760 --> 00:28:04,360 CPO of Asana and one of the best Cpo's I've seen in action, talks 534 00:28:04,360 --> 00:28:07,880 about the crispness that is required to avoid cultural bias, 535 00:28:08,080 --> 00:28:10,800 that is, being able to hide behind hiring just a cultural 536 00:28:10,800 --> 00:28:14,240 fit rather than a cultural ad. And while it might sound like 537 00:28:14,240 --> 00:28:17,840 semantics, the former can be round down to what it looks and 538 00:28:17,840 --> 00:28:21,370 feels like to an interviewer, the latter actually defining 539 00:28:21,370 --> 00:28:24,930 down to the exact question, what exactly are you testing for and 540 00:28:24,930 --> 00:28:29,010 how and to avoid as you scale those interviewing simply making 541 00:28:29,010 --> 00:28:32,290 up their own components. Here's Anna in more detail going 542 00:28:32,290 --> 00:28:34,890 into this. It's a handful of our values, 543 00:28:34,890 --> 00:28:37,890 not all of our values, but a handful of our values that we 544 00:28:37,890 --> 00:28:41,530 can translate into something that we can assess in an 545 00:28:41,530 --> 00:28:43,170 interview. You know, one of the things 546 00:28:43,170 --> 00:28:45,530 that's really important to us is a growth mindset. 547 00:28:46,050 --> 00:28:49,090 In order to have a growth mindset, you need to have both a 548 00:28:49,090 --> 00:28:54,610 commitment to self improvement and an openness to being wrong 549 00:28:55,170 --> 00:28:58,730 and a comfort with talking about your mistakes. 550 00:28:59,130 --> 00:29:03,290 That is something that you can assess more in an interview as 551 00:29:03,290 --> 00:29:05,610 part of the interview process at All Birds. 552 00:29:05,810 --> 00:29:08,730 The company values are used right throughout screening, but 553 00:29:08,730 --> 00:29:12,290 then more deeply towards the back end once competencies are 554 00:29:12,290 --> 00:29:14,680 accounted for. I use the values as an 555 00:29:14,680 --> 00:29:18,440 opportunity for candidates to both opt out or, importantly, 556 00:29:18,440 --> 00:29:22,120 emphatically opt in. Here's Joey, the Co CEO. 557 00:29:22,680 --> 00:29:25,640 It's a three page document that we share with every final round 558 00:29:25,640 --> 00:29:28,240 interview candidate and these candidates get to self select 559 00:29:28,240 --> 00:29:30,880 whether they're inspired by it or whether they think it's, you 560 00:29:30,880 --> 00:29:33,240 know, a couple of guys in San Francisco with flowers in their 561 00:29:33,240 --> 00:29:36,720 hair and it's a way to separate the wheat from the chaff And and 562 00:29:36,720 --> 00:29:39,120 that is. A powerful thing to get an 563 00:29:39,120 --> 00:29:42,720 incredibly aligned group of people who happen to be very 564 00:29:42,720 --> 00:29:46,160 diverse of skill set, diverse of background, and bring that 565 00:29:46,160 --> 00:29:48,800 diversity of thought with an aligned set of values and 566 00:29:48,800 --> 00:29:52,400 mission into something that is focused and and that can be very 567 00:29:52,400 --> 00:29:55,200 powerful. But hiring is just the moment of 568 00:29:55,200 --> 00:29:58,560 the employee experience for both parties to ensure there's values 569 00:29:58,560 --> 00:30:01,160 alignment. The next is onboarding and 570 00:30:01,160 --> 00:30:04,320 initiation in the expected behaviors attached to these 571 00:30:04,320 --> 00:30:06,280 values. And this can come from many 572 00:30:06,280 --> 00:30:09,670 forms, unusually brought physically to life in and around 573 00:30:09,670 --> 00:30:12,590 the office or in the world of Harvard, work more 574 00:30:12,590 --> 00:30:16,230 asynchronously but in the form of live or recorded leadership 575 00:30:16,230 --> 00:30:18,950 led workshops. There of course other common 576 00:30:18,950 --> 00:30:22,350 practices that explicitly formalize these as well, like 577 00:30:22,350 --> 00:30:25,630 handbooks or culture codes. And there are many examples of 578 00:30:25,630 --> 00:30:28,270 these that have made their way to the public domain, like those 579 00:30:28,270 --> 00:30:32,380 of Netflix or Asana. To alleviate the key friction 580 00:30:32,380 --> 00:30:36,140 you need to make these practices both scalable and authentic in 581 00:30:36,140 --> 00:30:40,100 the first instance, and then the processes to consistently remind 582 00:30:40,100 --> 00:30:43,180 and embed these values in the day-to-day workflow. 583 00:30:43,620 --> 00:30:47,180 Without this embedding, there can be no call to accountability 584 00:30:47,180 --> 00:30:50,540 from peers or leaders alike. Alisa Healey, one of the great 585 00:30:50,540 --> 00:30:53,660 cricketers of this generation, talked to a ritual of the 586 00:30:53,660 --> 00:30:56,500 Australian cricket team when it came to values. 587 00:30:57,100 --> 00:31:00,300 You need to remember in a national team sports selection. 588 00:31:00,580 --> 00:31:04,180 There's no interview process to speak of and so there's always 589 00:31:04,180 --> 00:31:06,380 this overweight bias to performance. 590 00:31:06,780 --> 00:31:09,700 That is not to say a player's ability to add to the culture is 591 00:31:09,700 --> 00:31:12,940 not taken into account at the selection table, but there are 592 00:31:12,940 --> 00:31:16,540 few unknowns in sport at the elite level and at the very 593 00:31:16,540 --> 00:31:20,020 point of that pyramid, most cultural detractors have already 594 00:31:20,020 --> 00:31:22,900 been identified and probably waited out. 595 00:31:23,620 --> 00:31:27,160 Here she's describing, like all things in professional sport, an 596 00:31:27,160 --> 00:31:30,400 intense, direct and incredibly powerful ritual. 597 00:31:30,760 --> 00:31:33,840 One thing that that really stands out for me in the 598 00:31:33,840 --> 00:31:38,160 accountability piece is we've obviously got a pretty well set 599 00:31:38,200 --> 00:31:41,160 values for us when a new player comes into the side. 600 00:31:41,520 --> 00:31:43,720 As daunting as it might be, you're standing there in front 601 00:31:43,720 --> 00:31:46,280 of, you know, Meg learning Elise Perry that you've kind of looked 602 00:31:46,280 --> 00:31:48,960 up to growing, growing up, learning the game and you come 603 00:31:48,960 --> 00:31:51,640 into the side one of the first things that you've got to do 604 00:31:51,920 --> 00:31:54,690 coming into the squad. Is actually present your version 605 00:31:54,690 --> 00:31:57,570 of those values in front of the group of people first and 606 00:31:57,570 --> 00:32:00,450 foremost. I think it makes a hell of an 607 00:32:00,450 --> 00:32:03,290 experience for that person. It makes a great experience for 608 00:32:03,290 --> 00:32:06,130 us watching. But I think ultimately it makes 609 00:32:06,130 --> 00:32:09,010 that person, new person coming into the group instantly more 610 00:32:09,010 --> 00:32:11,850 comfortable in the environment because they've got to speak, 611 00:32:12,250 --> 00:32:15,050 they've got to talk to us about how they're gonna live, the 612 00:32:15,050 --> 00:32:17,130 values, what it looks like for them, whether that's on the 613 00:32:17,130 --> 00:32:19,380 field, off the field. And at the end of the day, it 614 00:32:19,380 --> 00:32:22,260 makes each and every one of us accountable for that person 615 00:32:22,260 --> 00:32:24,420 living out those values. It makes them accountable. 616 00:32:24,420 --> 00:32:27,860 They've said it out loud. You know, we can enact, say you 617 00:32:27,860 --> 00:32:30,500 know what, you're not living up to that today or well done pat 618 00:32:30,500 --> 00:32:32,260 on the back. You're actually living those 619 00:32:32,260 --> 00:32:36,420 values once employees know what these values are, understand 620 00:32:36,420 --> 00:32:39,660 what is expected of them. And while obviously in theory 621 00:32:39,980 --> 00:32:43,540 it's imperative to provide clear and consistent feedback as it 622 00:32:43,540 --> 00:32:47,020 relates to employee performance, particularly as it relates to 623 00:32:47,020 --> 00:32:50,520 culture, given how impactful countercultural actions can be. 624 00:32:51,320 --> 00:32:54,600 And this is where the values as clear guarding rails are so 625 00:32:54,600 --> 00:32:58,720 valuable in a pure sense, and maybe my sports background fogs 626 00:32:58,720 --> 00:33:01,440 my lens. A manager's job is to me 627 00:33:01,440 --> 00:33:05,120 actually that of a coaches, and the best coaches I had were 628 00:33:05,120 --> 00:33:08,400 always about setting their players up for success, like a 629 00:33:08,400 --> 00:33:10,480 great manager should have employees. 630 00:33:11,240 --> 00:33:14,270 This can come as simply showing them how they can meet and 631 00:33:14,270 --> 00:33:17,590 exceed the explicit cultural expectations and measuring them 632 00:33:17,590 --> 00:33:20,350 against these. This comes from caring about 633 00:33:20,350 --> 00:33:23,390 behavior over results. In the short term, knowing the 634 00:33:23,390 --> 00:33:26,790 right employees with the right behaviors will drive outcomes 635 00:33:26,790 --> 00:33:29,470 you desire. The values can be objectively 636 00:33:29,470 --> 00:33:32,830 measured against simply enough. It is ensuring the systems and 637 00:33:32,830 --> 00:33:36,110 processes are set up to both provide and receive feedback on 638 00:33:36,110 --> 00:33:40,030 these grounds, and also creating incentives for those who do in 639 00:33:40,030 --> 00:33:43,690 fact become culture carriers through remuneration or other 640 00:33:43,690 --> 00:33:45,890 forms of recognition and responsibility. 641 00:33:46,570 --> 00:33:49,810 The need for this only increases in the executive suite where 642 00:33:49,810 --> 00:33:53,530 their example permeates through an organization, but with the 643 00:33:53,530 --> 00:33:55,930 threshold being slightly more binary. 644 00:33:56,170 --> 00:33:59,290 If a leader is not being a shining light of living the 645 00:33:59,290 --> 00:34:02,450 values, this should have an outsized impact on their 646 00:34:02,450 --> 00:34:06,010 reviews, their compensation and ultimately actually if they 647 00:34:06,010 --> 00:34:08,409 belong in the company, irrespective of the other 648 00:34:08,409 --> 00:34:11,179 outcomes they deliver. We have another episode 649 00:34:11,179 --> 00:34:13,980 dedicated to hiring and retaining these high performers, 650 00:34:14,460 --> 00:34:17,420 and this tiny droplet was illustrative of the role values 651 00:34:17,420 --> 00:34:19,420 can play as an underlying measurement tool. 652 00:34:23,260 --> 00:34:26,300 The last thing to shine a light on as it relates to culture 653 00:34:26,300 --> 00:34:30,500 scaling is the age-old question of whether or not a company can 654 00:34:30,500 --> 00:34:33,100 refresh or even change its values. 655 00:34:33,540 --> 00:34:36,780 My colleague James Revelle wrote a wonderful blog post on this 656 00:34:36,780 --> 00:34:40,889 very topic after our Culture Summit last year, his checklist 657 00:34:40,889 --> 00:34:43,770 intended to help teams with their next values discussion, 658 00:34:44,130 --> 00:34:47,210 but in the context of reexamining or reforming them. 659 00:34:47,650 --> 00:34:49,889 There'll be a link in the show notes to these and make sure you 660 00:34:49,889 --> 00:34:52,250 check them out. It really is one of the best 661 00:34:52,250 --> 00:34:55,130 versions I've seen. The argument for not changing 662 00:34:55,130 --> 00:34:59,170 your values is as simple as it is compelling, and it's based on 663 00:34:59,170 --> 00:35:02,690 the premise that values are your identity and your identity is 664 00:35:02,690 --> 00:35:05,170 there from the beginning. And what I've learned more 665 00:35:05,170 --> 00:35:09,100 broadly over curating almost 50 episodes of scaling up is that 666 00:35:09,100 --> 00:35:13,060 values can often require honing or slight refinement over time. 667 00:35:13,620 --> 00:35:16,740 And almost using a similar approach to what I previously 668 00:35:16,740 --> 00:35:20,540 described by Bill Magnussen when considering the modern relevancy 669 00:35:20,540 --> 00:35:23,580 of your values. If the answer to the very simple 670 00:35:23,580 --> 00:35:27,580 question as to what is hard about living them and the answer 671 00:35:27,580 --> 00:35:31,540 is not much, then I suggest they need a further razor sharp 672 00:35:31,540 --> 00:35:33,900 refinement as your business has grown. 673 00:35:34,700 --> 00:35:37,700 All the topics we've discussed in this episode lead to this 674 00:35:37,700 --> 00:35:40,950 very point. If your values don't satisfy a 675 00:35:40,950 --> 00:35:44,230 simple checklist, and in some instances that were developed 676 00:35:44,230 --> 00:35:47,430 many years ago, and the business was fundamentally a different 677 00:35:47,430 --> 00:35:50,710 business, do they help decision making? 678 00:35:51,030 --> 00:35:53,990 Do they help us drive towards a certain performance outcome? 679 00:35:54,470 --> 00:35:57,790 Do they help us evaluate and reward certain behaviors? 680 00:35:58,150 --> 00:36:01,310 Are they easily understood? Do they bridge cultural 681 00:36:01,310 --> 00:36:04,110 boundaries? Are they easily memorable? 682 00:36:04,830 --> 00:36:09,030 If the answer to any of these questions is know, or you aren't 683 00:36:09,030 --> 00:36:13,750 sure, I suggest it's a time to reexamine them in some shape, 684 00:36:13,750 --> 00:36:16,550 way or form. If you do go down the path of 685 00:36:16,550 --> 00:36:20,190 refreshing your values, there are two guiding principles. 686 00:36:20,750 --> 00:36:24,270 Firstly, you need to ensure that their current perceived 687 00:36:24,270 --> 00:36:27,750 dysfunction does not lie in how the values are not being 688 00:36:27,750 --> 00:36:30,350 reflected in behaviors or decisions being made in the 689 00:36:30,350 --> 00:36:33,150 organization before you amend the what. 690 00:36:33,470 --> 00:36:37,520 That is the values themselves. Simply spinning up new values 691 00:36:37,520 --> 00:36:41,240 won't solve for this. Secondly, just a reminder, I 692 00:36:41,240 --> 00:36:45,000 guess you can't change what you stand for and represent, and so 693 00:36:45,000 --> 00:36:47,560 be really mindful the process will be. 694 00:36:47,560 --> 00:36:51,760 But it's very important, long and inclusive, and importantly, 695 00:36:51,760 --> 00:36:55,680 should simply refine the ideas behind the existing values and 696 00:36:55,680 --> 00:36:59,480 express them in a way that is more useful to the organization 697 00:36:59,480 --> 00:37:06,450 in its current form. Just to wrap this all up, we've 698 00:37:06,450 --> 00:37:09,810 covered a lot of ground in this first episode of the Culture 699 00:37:09,810 --> 00:37:13,490 Scaling Playbook Values episode. There is an accompanying 700 00:37:13,490 --> 00:37:18,370 downloadable and interactive PDF that's both a mix of show notes, 701 00:37:18,370 --> 00:37:21,770 key points, links to key documents like the Rocked 702 00:37:21,770 --> 00:37:25,730 Handbook for instance, as well as prompts to ask yourself as 703 00:37:25,730 --> 00:37:29,010 you apply some of the learnings to your own real world setting. 704 00:37:29,890 --> 00:37:32,570 This PDF will be available as a click through in both the 705 00:37:32,570 --> 00:37:36,250 podcast player but also available on the TDM website. 706 00:37:36,930 --> 00:37:40,290 So to recap, this episode which reversed the importance of 707 00:37:40,290 --> 00:37:44,050 scaling culture, then took a dive into the topic of values, 708 00:37:44,250 --> 00:37:48,490 when to set them, how to codify them, how to live them and test 709 00:37:48,490 --> 00:37:52,210 them, and finally the often asked question if in fact you 710 00:37:52,210 --> 00:37:55,050 can change them. Scaling is hard. 711 00:37:55,490 --> 00:37:58,450 Scaling in culture is the hardest part of this, and not 712 00:37:58,450 --> 00:38:02,930 just the most rewarding, but also the single biggest unlock a 713 00:38:02,930 --> 00:38:07,010 fast growing company can have. If I was to leave you with one 714 00:38:07,010 --> 00:38:10,410 quote to wrap this all together, it'd be this one from Catherine 715 00:38:10,410 --> 00:38:13,090 McConnell. When you're hiring, you know 50 716 00:38:13,090 --> 00:38:15,770 plus people a month, you personally can't have that 717 00:38:15,770 --> 00:38:18,410 impact as a founder. And so the way you can do that 718 00:38:18,410 --> 00:38:21,610 is through your mission, your purpose and your values and 719 00:38:21,610 --> 00:38:24,730 making sure they're clearly understood, making sure they 720 00:38:24,730 --> 00:38:28,170 lived by everyone in the company and making sure that you know 721 00:38:28,170 --> 00:38:31,410 externally people know what they are and so they become your 722 00:38:31,410 --> 00:38:33,680 scaling engine. We'll see you for the next 723 00:38:33,680 --> 00:38:35,880 episode of our Culture Scaling Playbook. 724 00:38:36,200 --> 00:38:39,040 It's gonna be focused on the key elements of great hiring and 725 00:38:39,040 --> 00:38:41,040 retention. I'm Ed Cowan. 726 00:38:41,080 --> 00:38:43,840 I hope you enjoy this very special episode. 727 00:38:44,240 --> 00:38:48,200 Of course, as always, for more insights, please visit the TDM 728 00:38:48,200 --> 00:38:50,840 website tdmgrowthpartners.com.