What is a high performing culture?
It's a question as straightforward as it is
philosophical. In the coming special episodes,
we explore high performing cultures, what they are, how to
create them, and most importantly how not just to
maintain them but scale them by drawing upon the wisdom of the
previous CE O's founders and leaders who have had the
pleasure of interviewing over the last six years.
Now more than ever, culture scaling is the biggest single
issue that executives lose sleep over at night.
This first episode we traverse the integral topic of values,
why they are important and how they have to be at the center of
every decision made and every behavior exhibited in a
business, and also how best to do this.
I'm Ed Cowan and this is episode one of the Culture Scaling
Playbook. For the last five years, I've
had the absolute pleasure of hosting scaling Up a podcast
telling the growth stories of some of the most successful
private and public companies globally as told by their
founders, CEO's, and other key leaders who between them have
created some $150 billion in market capitalization.
After 42 episodes of scaling up and 300,000 words of interview
transcripts, we now have an amazing database of knowledge to
dive into and pull some common threads together across a range
of topics. This episode is wholly dedicated
to the role values play in successfully scaling people and
culture. I'm excited to bring the moments
that have stuck with me long after the stop button has been
pressed on the recording. To start with though, it's
important to understand what is a high performing culture, a
word that can be easily used as an intangible catch all and why
it is at the heart of the success of great teams and great
companies. My own experience of culture was
born in sporting teams. I was very lucky to play in
teams that saw both triumph and disappointment.
I became fascinated with why these teams won and why we
sometimes lost, How players interacted with each other
throughout each of these What was correlation and what was
causation? When I retired from sport almost
six years ago, having it consumed my life for the best
part of two professional decades.
The similarities to me as to what made a great sports team
and what made a high performing business were blindingly stark.
It's very hard to be a championship team without a
grade players, but I saw time and time again it was the
cohesion of these players that mattered most.
It was also clear to me that to sustain success there was an
underlying magic based in systems and processes that
allowed for this cohesion. It requires an egoless buying in
from all that the team comes first.
Players believe that the higher order is team success over
personal success and would always sacrifice the latter for
the former. This is completely analogous to
scaling the team in a high performance culture of a
fast-paced business. It just does not happen by
accident. And of course, in the rare case
it does, it's never sustainable and at some point the business
will hit a wall. And it's not just going to
inhibit future growth, but in many respects can unwind
previous steps in building long term competitive advantage.
To back up these thoughts, a quote from Steve Hansen, the
most successful sports coach of the most successful team in
history, the All Blacks rings loudly in my ears.
All good teams and and I think companies would be the same,
they have clear drivers, things like team is first, individual
second. They live their values from the
top down South. They're not just things they put
on the wall and then forget about.
They identify the critical few. That are so important for them
to be successful and they do that really well and they
concentrate on that and they work hard at getting those right
every day. They're adaptable and they're
thinking. They're flexible in their
thinking, so they can change in the moment if they need to, or
they can learn faster than the opposition.
It sounds like the same recipe for a successful company to me.
So with this in mind, what is indeed culture?
One of the best frameworks I have heard is from Anna Binda,
Head of People and Culture at Asana.
She likens it to the area of a triangle with the three defining
points are the mission values and decision making.
In her own words, and far better articulated than this, here is
Anna herself. I asked people to imagine in
their mind's eye a triangle, and at the top of that triangle is
the mission that is really the North Star and the very top of
the triangle at the other corner of the triangle.
Are the values whatever they are for your organization?
For us, it's nine things. These are the things we endeavor
to show up with each other by. You don't always get it right,
and we have good days and bad days, but these are our
commitments of effort. This is how we're going to show
up with each other. And then the third part of the
triangle is, you know, I short handed it to the 10,000 things,
the 10,000 decisions that we collectively make really every
day in all aspects of the company.
It is financial decisions that we make and where we allocate
budget, it is what features go into the free version of the
product and what features go into the paid version of the
product. There are, you know, literally
10s of thousands of these, and the way that I think about
culture is our collective work. Work to make those 10,000
decisions in a way that allows us to achieve our mission while
being in line with our values. And if you create a triangle
around those three things in the middle of that, that's where
your culture lives. Culture, though, is never
stagnant. It's a living and breathing
Organism. It does not live on a page or a
wall. It's always growing organically
where the teams tend to it or not.
And This is why the Triangle framework in my mind is so
useful, because it provides boundaries as to where it can
grow and thrive and do so in a constructive, vibrant way.
It also alludes to the fact that every culture is different.
Each point of the Triangle will vary from company to company.
There's no right or wrong cultures, they're just effective
or ineffective ones. For those that want to hear more
from Anna, one of the world's best people and culture leaders
in my mind, her episode was episode 6 of series five of
Scaling Up, and it's well worth listening to in its entirety.
One thing that will definitely emerge from this episode is the
role values play in this, and without exhausting the analogies
too early, there's a lovely image that may resonate with
you, as it did with me in regards to scaling culture
provided by Joel Montaniel, CEO of Seven Rooms.
As we think about growing the company, the image I'll give to
people often as rings of a tree and the next group of people, we
hire the outer ring and it's really their job to protect the
culture. And the core values really
helpfully are in and strengthen the glue across all of the
rings. A key piece of the puzzle is why
scaling culture effectively is so important.
There are entire library aisles full of books here, deeply based
in data, that have effectively and conclusively drawn a link
between effective cultures and business outcomes.
You can simply not decouple great people from great
outcomes. And time and time again we've
heard great leaders say their greatest asset is their people.
In regards to attracting and supporting a grade talent, the
famous Steve Jobs quote comes to mind.
The secret of my success is that we've gone to exceptional
lengths to hire the best people in the world.
Ethan Berman was the CEO and founder of Risk Metrics that
listed on the New York Stock Exchange in 2010 and he was very
clear on his job. It was to ensure that Risk
Metrics was the world's best employer.
His hypothesis was that culture would trump remuneration in
regards to recruiting and retaining the best talent.
Here's Ethan, now a TDM operating advisor on this exact
topic. My objective is to make risk
metrics to the world's best employer.
And that's what we want to be because if you are the world's
best employer, you will be successful regardless of what
business you're in. And I said this, I said, you
know, our competition is not other risk management firms.
Our competition at the time was, you know, Google was Goldman
Sachs with McKinsey. You know, the places that
parents want their kids to go and kids getting out of the top
schools want to join. And, you know, I think that that
really became sort of our mantra on what our success was going to
be. And you know that's that's hard
as a small company. And the most important thing I
learned from that was you don't get there by simply saying we're
going to pay people more money, that that is not going to be the
key to being the world's best employer.
In fact, you could argue that they tend to go inverse, that if
you need to be the highest employer then that is the only
thing you have. And if that's the only reason
people work at your company, then I don't think that's a law.
I don't think that's long term sustainable.
Of course, high performance in any field by its very nature is
not just rare, but incredibly hard both physically and
emotionally. But it is never the sacrifice of
enjoyment. In fact, while many think of
these as competing tensions, in my experience they're actually
hand in glove with productive cultures.
High performing employees value collective achievement and their
contribution to it far more, in many cases, than wealth.
And one quote stood out to me that encapsulates this, and it
came from Hugh Williams. We had an incredible career
solving some of the world's most advanced technical problems from
Microsoft, eBay and Google among others.
And this is Hugh discussing some of the secret source in the high
performing teams he was a part of and led.
So you get these incredibly motivated people who are really,
really smart and want to be in teams and and go and drive and
and do things. So at Microsoft we were all
working together, You know, we were a group of people focused
on. One outcome.
And we were driving as hard as we could to go and get that
outcome. And you know, I, I remember in
my early days at Microsoft being a bit sad when it got to be the
weekend, you know, like it got to be sort of Friday at 5:00.
And I'm like, what a bummer. I've got a day off tomorrow.
Now, of course, I love going home and hanging out with my
wife and my, my young kids at the time and that was, that was
fantastic too. But you're like, oh, do we have
to stop? Now you know this is.
This is awesome, and so I worked phenomenally hard and the time
went incredibly quickly. Because it was just such a great
set of people to work with and I felt like we were really making
a difference really, really fast.
So what are the benefits of having a passionate, engaged and
highly productive A grade employee base?
And I don't want to be too obvious here, but we know that
it reduces the cost. Base world class employees are
far more efficient and if they feel like they are deeply valued
and aligned to the company, retention's far easier.
And as your employer brand grows, so is recruitment.
The cost of the business of great talent leaving is immense.
You not only have to try and replace them, which is both
costly in time and money, but the gap they leave in the
meantime can have a compounding and outsized detrimental impact
on those who are directly in the orbit of the now exemployee.
More importantly though is we know it drives the top line
growth. Aside from this being incredibly
efficient growth, great teams are far more innovative by their
very nature and that innovation will be targeted.
It will be customer centric, it will be business outcome
orientated and ultimately it will drive long term revenue
growth as new products or better products are built and sold.
Much has been made of this. Reed Hastings of Netflix coined
a talent density and how to foster it, be it hiring stunning
employees and promoting employee freedom.
But the data around this is compelling.
I've been lucky enough to have seen Didier Elzinger, the
cofounder and CEO of Culture AMP, in action in close
quarters. Culture AMP has the largest
proprietary data set as it relates to culture with over
6000 customers, and I've seen Didier present some of their
research as it relates to this data for private companies.
It's not the quantum of funding that makes companies innovative,
Rather than having a culture that emphasizes innovation, that
will make you most likely to receive funding.
In fact, companies with high engagement and confidence in
both the company and its leadership are also a leading
indicator for public companies. And this is also true.
Positive employee perception metrics are leading indications
of stock price success. I'll post A blog to this
research in the company notes this podcast as I'm sure a few
listeners will want to dive in further values.
When do they get formalized? This episode is dedicated from
here on. The role values play in
successfully scaling people and culture and their importance
cannot be understated. They have to be at the center of
every decision made and every behavior exhibited in the
business. Values are the cultural
guardrails from setting strategy to customer interactions to the
full employee experience. Every split moment, every micro
decision has to be within these guardrails that the values of
the business provides. The values have to be the glue
that binds the business together and I like to think of them as
the foundations to which the business is built on.
And of course these are unique to each and every company.
The most listened to scaling up episode has in fact been the
very first one. And given it was the first
episode, it was certainly a little raw and rough around the
edges. But people gravitate to
listening to it, to hear the irrepressible founder and CEO of
Guzman Egomez, Stephen Marks. Now Guzman has five values, and
I'll read them out. It's all about the food.
Make every customer love us. Be real.
Got your back. It's up to us.
Now I'll highlight these because in the space of two minutes of
that episode on a conversation totally unrelated to values,
every single one of these values permeates deeply.
In a response, Steven gave about his wider team.
Right. At this point in time, you know
we have 4000 people in the restaurants.
There is no G by G without them. We're one family and we're one
team. And that's a genuine way I look
at it when we were starting as well, and people were like, So
what are your values? And I mean values.
I thought that was like some sort of bullshit thing you have
in the back of a door. But I realized that we really
have values, you know? And my business part would say
to me, dude, this is what you talk about all day long.
I'm gonna allude to this right through this episode, but I'm
gonna be explicit here. The most important trait of a
good set of values is that they guard behaviors, decisions, and
actions in a way that is consistent with the
organization's purpose and underlying cultural identity,
especially in times of adversity.
What became apparent throughout all the recorded scaling up
episodes is the tension that can exist when it comes to value.
And it's a positive tension of both setting and living these
values and how this permeates through the organization by
virtue of the fact that the values are usually born or
representative of the initial forging moments of a small team.
When is the right time to formalize them?
Is the process top down or bottoms up?
Can they change over time? As it relates to the first
question, there is a time when the founding team look up and
realize that there is a deep need to be a codification of all
the behaviors that they have initially taken for granted.
It is rarely intentional words on a page.
The plan for before the rubber hits the road.
In Kate Morris's case at Adore Beauty and now ASX listed
ecommerce business, it was the moment when she had made some
hasty highs and the cultural wheels had started to wobble
because of it. Once that short period of
toxicity had subsided, they sat down to ensure that that would
never happen again. Or in her words.
So we all work together on putting.
Putting together a list of cultural values which basically
represented okay. When things are great here.
When things are going really. Well, what?
Behaviors are we seeing what are the what are the sort of
consistent threads of the things that make it good to be here or
make this a good company or you know or.
I mean and a high performing company as well.
And to work together on that list of values that we then have
ever since used as sort of the fundamental.
Pieces. Of, of recruitment of
performance management and. You ask everybody here.
Would you know would? Bang on about the values all of
the time because we expect everybody to be able to use
those those key values as decision making tools on a
day-to-day basis. The call that I would make here
is that for authentic values to scale, they must require cut
through. They have to be unique and
representative of the people inside the organization.
They need to avoid pithy, one word genericism that can often
be conflated with other intended ideas, or worse still, they just
become white noise. Couching values in colloquial
phrases used in the corridors can be great for this.
As an example close to home, one of Tdm's values is where the
yellow hat, and it was born out of a total misunderstanding of
Edward de Bono's 6 hat thinking. And it's a humorous origin
story, but it's now a very common phrase here at TDM.
It's become almost slang for I'm looking for the courage to be a
little vulnerable, perhaps think a bit differently by asking what
otherwise might be perceived as a silly question.
And it's this colloquialism around the corridors that's
permeated into meetings and beyond to any way people are
requesting just some form of psychological safety.
For Mike Frizzell and James Edwards, the two cofounders of
Australia's largest online pet retailer, Pet Circle, the
instigation for their values was the formal hire of a head of
people and culture. And at the same time, it was
them themselves who had stopped doing all the hiring they needed
to formalize what they valued. And like everything that those
two had done, it was very deliberate.
And to hear why, here's Mike. And we never got comfortable
with the idea of writing values or culture because our belief,
and probably didn't articulate at the time, was it has to be
real and it has to be us. And so writing something down
and seeking input in a small company from what everyone wants
it to be wouldn't be real. So it took us a long time to
kind of resolve what's made us a good team.
And what makes the people around us a good team is what is the
culture. And so our job was to reflect
that this is the culture and it came out, we've got 5 now.
And so it took us a while to sit down and be comfortable with
what the commonality was. And it's actually not what most
startups are. Commonalities be individual.
We didn't. You had good words.
You didn't call it a culture. We called it like.
A work contract. Ways of working.
Or something. Yeah, this is a contract between
you and your peers about how you'll treat each other, cuz we
thought about it as. What you do at work, like when
you turn up to work, what can you expect from the business and
from the people you're working with within the business?
And that's where we want to start and end it.
What did become surprisingly apparent to me that I'd not
factored in coming from a singular team sport is the
possibility for multiple cultures to coexist inside a
business, be it because of geography and a global business
and various local offices molding variations, or depending
on the type of business, different organization
departments having distinct cultures.
And that makes sense. The warehouse team and a
consumer business will operate differently to the marketing
team. In a software business, the
engineers have significantly different workflow to the sales
reps, but as it relates to values, and this is I guess the
point as it relates to the values acting as a work
contract. As Mark put it, these multiple
cultures are all right for the people that they serve.
The culture is what makes the team feel comfortable, engaged
and productive. But they have to sit and fit
under these core values of the business.
They can't be incongruent with the values in any shape, way or
form. And one prominent theme that did
emerge that can sit side by side in this framework of values as a
work contract. Relates to this horizontal
threat of mission and purpose. Ultimately the purpose of any
business is to serve the customer and this usually plays
into the formulation, codification and living of the
values by high performing employees.
Here's a snippet from an interview I did some years ago
now with Jonathan Call, the then CEO of Ellie Mae, before it was
bought and sold again for $11 billion US The culture.
In many ways, just started with with SIG pretty quickly as he
surrounded. Himself with people, you know,
folks that that shared a common viewpoint And then?
The culture really became the people here.
And so you know, it's always. Been in many ways we just talked
about you know high tech company with old fashioned values, but
it's it's been about you know being focused on our customers,
building great products, great services and really thinking
about the relationship with our customers as a partnership, as a
relationship. And so knowing that that is the
case, you know how do you make sure that you are open and
honest and transparent and are listening and responsive and
make the customers feel that way living the values and codifying
them both formally and informally.
Of course core values are meaningless if they're simply
words on a wall. Operators need to understand how
to scale these behaviors that they represent.
They need to codify these behaviors that underlie the
values, make them both actionable and crystal clear as
to their intent. An example that keeps coming to
mind is the one Joel Montaniel left me with.
Their value put everything on the table upon to their
restaurant serving software, of course is the idea that they
should be able to be fully transparent and honest with each
other. There shouldn't be anything that
they can't say and by putting everything on the table you
ultimately get to the best outcome.
And so, for instance, at the end of meetings, the question will
be asked, did we put everything on the table?
It gives the final opportunity space and permission to speak
up, express doubts, challenge ideas.
The posters or murals on the wall are lip service unless
employees know what the values are.
Well lived. One of the best culture
handbooks I've seen has been produced by Rocked Bruce
Buchanan. You'll hear right throughout
this series give very explicit behaviors expected for the
different levels of the organizational ladder.
Those expectations diverge greatly depending on where you
sit on it. While obvious the standard
expected, the C-Suite vastly differ to those of a first year
graduate. But importantly, it's clear to
all employees what they are and to what they'll be held
accountable to. Rick Stallmeyer, founder of Mind
Body, had a very simple framework to help this
codification and I think best to hear it from him.
Best way to explain any core value is to discuss the opposite
of it. One of our core.
Values is humble and helpful. Well, it's really easy to
explain the importance of that because imagine the opposite.
Arrogant and unhelpful. I don't care how.
Talented you are. You don't belong here.
If you are arrogant and unhelpful and we will not
tolerate, the organization will literally expel such a person.
If they manage to fool us enough to get hired, this is also true
for the positive extremes of any singular core value, and why
attaching behaviors to each is so important.
It's also why the more narrowly they're defined, the less likely
they're going to be weaponized in ways that are odds with their
intention. Living a value to a radical
endpoint leads to as many poor outcomes as living the
antithesis of the value in the 1st place.
Bill Magnusson, CEO and Co founder of Braves, articulated
how they overcome this to some degree with incoming hires
during his CEO Values workshop. He tries to articulate what is
hard about living age value. Values are at their most
valuable when people disagree or you need to prioritize and make
tough decisions. So one of ours is don't ignore
smoke. And So what this value is
actually impressing upon you is not that you should just, like,
complain about everything you see, but rather that we need to
act with urgency when something might be wrong.
When you see smoke and you say something, you know the people
around you should help. Not only do we not shoot the
messenger, we actually embrace them.
And you know, really communicating what it is about
the value that is hard I think is the most important part.
So I think embracing that in a communication of the values
right out of the gate is really valuable as well.
Of course, constantly reinforcing what great looks
like with values well lived is also crucial to allow the
behaviors to permeate and become the norm.
Sounds funny, but culture scaling is reliant on this
normalization of what has forever been taken for granted,
the cultural iconography or artifacts.
He plays such a strong role. Mike Sabinas at League A
Canadian Healthcare scale up from day one, has used culture
cards at town hall meetings to symbolize more than a token of
appreciation, but a moment of recognition amongst all peers to
call out and activate exemplars of living the values.
Phil McKenzie at Pacific Smiles has done something similar using
storytelling and symbolism to via a similar method.
While a small gesture is the meaning behind them that can be
so galvanizing to fast growing teams to shine a light on
culture carriers who otherwise and usually go about their
business without fuss, setting an example in the shadows for
others to follow their actions. Humans have thrived on
storytelling to scale behaviors for thousands of years.
The modern age of company building should be no different
of course. In a fast growing company,
almost by definition headcount is growing at least in line with
top line growth. The doubling of headcount for
two consecutive years will mean 75% of the team will be new to
the organization over that period of time.
The values that have been defined by a small number and
now live by so many, the easiest in theory but hardest in
practice. Way to ensure new employee
values alignment is to use the values as both a recruiting tool
but also a clear test right throughout the interview
process. Not to do this is just flirting
with extreme danger and I've seen it close quarters what bad
actors can do to the culture of a team.
Their behavior becomes the acceptable standard and very
quickly the norm for everyone else.
Sadly, values and hiring from interviewing to onboarding and
beyond. Perhaps the most important take
away from all the interviews I've conducted is the role that
values play in the hiring process.
Here's Paul Bassett, who is a cofounder of SEEK, reflecting on
his own experience. My skills as a leader are I
think I'm very good at identifying talent and and what
I've always optimized for values, alignment and raw
ability over experience. I think experience is the most
the most overrated attribute in hiring.
Not that it's unimportant, but a lot of areas we just over index
for experience. Bruce Buchanan, the CEO and
cofounder of Rocked also really stressed this during episode two
of the very first series of scaling up.
Here's Bruce I don't do anymore. So once we got to 180 or
something, we trained up a bunch of people in the business that
do what we call bar raises and and they answer three key
questions. The bar raises are from some
other part of the business and the bar raiser process is 3
questions. Is this person aligned with our
values? Which is a yes or no?
Where does this person spike in competencies?
And the last question we ask people is will this person raise
the bar of the teammate going in?
Anna Binder, who you've already heard from in this episode, the
CPO of Asana and one of the best Cpo's I've seen in action, talks
about the crispness that is required to avoid cultural bias,
that is, being able to hide behind hiring just a cultural
fit rather than a cultural ad. And while it might sound like
semantics, the former can be round down to what it looks and
feels like to an interviewer, the latter actually defining
down to the exact question, what exactly are you testing for and
how and to avoid as you scale those interviewing simply making
up their own components. Here's Anna in more detail going
into this. It's a handful of our values,
not all of our values, but a handful of our values that we
can translate into something that we can assess in an
interview. You know, one of the things
that's really important to us is a growth mindset.
In order to have a growth mindset, you need to have both a
commitment to self improvement and an openness to being wrong
and a comfort with talking about your mistakes.
That is something that you can assess more in an interview as
part of the interview process at All Birds.
The company values are used right throughout screening, but
then more deeply towards the back end once competencies are
accounted for. I use the values as an
opportunity for candidates to both opt out or, importantly,
emphatically opt in. Here's Joey, the Co CEO.
It's a three page document that we share with every final round
interview candidate and these candidates get to self select
whether they're inspired by it or whether they think it's, you
know, a couple of guys in San Francisco with flowers in their
hair and it's a way to separate the wheat from the chaff And and
that is. A powerful thing to get an
incredibly aligned group of people who happen to be very
diverse of skill set, diverse of background, and bring that
diversity of thought with an aligned set of values and
mission into something that is focused and and that can be very
powerful. But hiring is just the moment of
the employee experience for both parties to ensure there's values
alignment. The next is onboarding and
initiation in the expected behaviors attached to these
values. And this can come from many
forms, unusually brought physically to life in and around
the office or in the world of Harvard, work more
asynchronously but in the form of live or recorded leadership
led workshops. There of course other common
practices that explicitly formalize these as well, like
handbooks or culture codes. And there are many examples of
these that have made their way to the public domain, like those
of Netflix or Asana. To alleviate the key friction
you need to make these practices both scalable and authentic in
the first instance, and then the processes to consistently remind
and embed these values in the day-to-day workflow.
Without this embedding, there can be no call to accountability
from peers or leaders alike. Alisa Healey, one of the great
cricketers of this generation, talked to a ritual of the
Australian cricket team when it came to values.
You need to remember in a national team sports selection.
There's no interview process to speak of and so there's always
this overweight bias to performance.
That is not to say a player's ability to add to the culture is
not taken into account at the selection table, but there are
few unknowns in sport at the elite level and at the very
point of that pyramid, most cultural detractors have already
been identified and probably waited out.
Here she's describing, like all things in professional sport, an
intense, direct and incredibly powerful ritual.
One thing that that really stands out for me in the
accountability piece is we've obviously got a pretty well set
values for us when a new player comes into the side.
As daunting as it might be, you're standing there in front
of, you know, Meg learning Elise Perry that you've kind of looked
up to growing, growing up, learning the game and you come
into the side one of the first things that you've got to do
coming into the squad. Is actually present your version
of those values in front of the group of people first and
foremost. I think it makes a hell of an
experience for that person. It makes a great experience for
us watching. But I think ultimately it makes
that person, new person coming into the group instantly more
comfortable in the environment because they've got to speak,
they've got to talk to us about how they're gonna live, the
values, what it looks like for them, whether that's on the
field, off the field. And at the end of the day, it
makes each and every one of us accountable for that person
living out those values. It makes them accountable.
They've said it out loud. You know, we can enact, say you
know what, you're not living up to that today or well done pat
on the back. You're actually living those
values once employees know what these values are, understand
what is expected of them. And while obviously in theory
it's imperative to provide clear and consistent feedback as it
relates to employee performance, particularly as it relates to
culture, given how impactful countercultural actions can be.
And this is where the values as clear guarding rails are so
valuable in a pure sense, and maybe my sports background fogs
my lens. A manager's job is to me
actually that of a coaches, and the best coaches I had were
always about setting their players up for success, like a
great manager should have employees.
This can come as simply showing them how they can meet and
exceed the explicit cultural expectations and measuring them
against these. This comes from caring about
behavior over results. In the short term, knowing the
right employees with the right behaviors will drive outcomes
you desire. The values can be objectively
measured against simply enough. It is ensuring the systems and
processes are set up to both provide and receive feedback on
these grounds, and also creating incentives for those who do in
fact become culture carriers through remuneration or other
forms of recognition and responsibility.
The need for this only increases in the executive suite where
their example permeates through an organization, but with the
threshold being slightly more binary.
If a leader is not being a shining light of living the
values, this should have an outsized impact on their
reviews, their compensation and ultimately actually if they
belong in the company, irrespective of the other
outcomes they deliver. We have another episode
dedicated to hiring and retaining these high performers,
and this tiny droplet was illustrative of the role values
can play as an underlying measurement tool.
The last thing to shine a light on as it relates to culture
scaling is the age-old question of whether or not a company can
refresh or even change its values.
My colleague James Revelle wrote a wonderful blog post on this
very topic after our Culture Summit last year, his checklist
intended to help teams with their next values discussion,
but in the context of reexamining or reforming them.
There'll be a link in the show notes to these and make sure you
check them out. It really is one of the best
versions I've seen. The argument for not changing
your values is as simple as it is compelling, and it's based on
the premise that values are your identity and your identity is
there from the beginning. And what I've learned more
broadly over curating almost 50 episodes of scaling up is that
values can often require honing or slight refinement over time.
And almost using a similar approach to what I previously
described by Bill Magnussen when considering the modern relevancy
of your values. If the answer to the very simple
question as to what is hard about living them and the answer
is not much, then I suggest they need a further razor sharp
refinement as your business has grown.
All the topics we've discussed in this episode lead to this
very point. If your values don't satisfy a
simple checklist, and in some instances that were developed
many years ago, and the business was fundamentally a different
business, do they help decision making?
Do they help us drive towards a certain performance outcome?
Do they help us evaluate and reward certain behaviors?
Are they easily understood? Do they bridge cultural
boundaries? Are they easily memorable?
If the answer to any of these questions is know, or you aren't
sure, I suggest it's a time to reexamine them in some shape,
way or form. If you do go down the path of
refreshing your values, there are two guiding principles.
Firstly, you need to ensure that their current perceived
dysfunction does not lie in how the values are not being
reflected in behaviors or decisions being made in the
organization before you amend the what.
That is the values themselves. Simply spinning up new values
won't solve for this. Secondly, just a reminder, I
guess you can't change what you stand for and represent, and so
be really mindful the process will be.
But it's very important, long and inclusive, and importantly,
should simply refine the ideas behind the existing values and
express them in a way that is more useful to the organization
in its current form. Just to wrap this all up, we've
covered a lot of ground in this first episode of the Culture
Scaling Playbook Values episode. There is an accompanying
downloadable and interactive PDF that's both a mix of show notes,
key points, links to key documents like the Rocked
Handbook for instance, as well as prompts to ask yourself as
you apply some of the learnings to your own real world setting.
This PDF will be available as a click through in both the
podcast player but also available on the TDM website.
So to recap, this episode which reversed the importance of
scaling culture, then took a dive into the topic of values,
when to set them, how to codify them, how to live them and test
them, and finally the often asked question if in fact you
can change them. Scaling is hard.
Scaling in culture is the hardest part of this, and not
just the most rewarding, but also the single biggest unlock a
fast growing company can have. If I was to leave you with one
quote to wrap this all together, it'd be this one from Catherine
McConnell. When you're hiring, you know 50
plus people a month, you personally can't have that
impact as a founder. And so the way you can do that
is through your mission, your purpose and your values and
making sure they're clearly understood, making sure they
lived by everyone in the company and making sure that you know
externally people know what they are and so they become your
scaling engine. We'll see you for the next
episode of our Culture Scaling Playbook.
It's gonna be focused on the key elements of great hiring and
retention. I'm Ed Cowan.
I hope you enjoy this very special episode.
Of course, as always, for more insights, please visit the TDM
website tdmgrowthpartners.com.