Podcast Transcript

[00:00:00] Sean Steele: So today we're talking about values. What are they and why do they matter so much? How do you develop them if you haven't already got some, what do well formed ones look like?

[00:00:26] So if you've already got some, but you think they could be run through a checklist to see if they're any good, we'll do that together today. Five words to avoid when you're writing yours, and some examples of some good ones and some bad ones. And if you listen right to the end today, I've got some additional resources to direct you to if you want to go deeper on building culture, uh, and defining your operating principles or your values. And I'll explain what I mean by operating principles. So why do they matter? Well, look, you can't actually have a conversation about values without talking about culture and the role they play in culture. So, let's talk about culture first. I've got a few comments for you on culture. Culture I believe is what actually enables scale. Clearly there's a lot of things that enable scale. Well, that is fundamentally, you don't have a culture that's going to enable scale, game over. No scaling is going to happen, and it comes from the top. And it has to be designed and nurtured. It's not something that just emerges. I also think it's actually the remit of the CEO and the founder, not HR, which might be controversial, but I also think it's about establishing operating principles with expected behaviours. That's a very core part of it. So, kind of like values and behaviours, operating principles, I'll explain those in a moment. Great cultures drive business performers. And so that means great cultures aren't just about warm and fluffy and making everybody feel good.

[00:01:40] They're actually outcomes oriented. And that's the kind of environment people enjoy because they want to contribute, they want to succeed, and they want to have an impact. And so, it needs to be performance-oriented and outcomes-oriented. So therefore, at the heart of that, our values and behaviours as they're often referred to, or operating principles. Operating principles might be a word that you like. It might be stronger, you know, as operating principles are what, you know, they're kind of what we stand for, our principles, which dictate how we show up for each other, how we show up for our customers. And I love the fact that Tony Robbins said, "You get what you settle for”, which is so true in life. Think about your own life, I'm sure you'll find that's true. You get whatever the minimum is that you're willing to settle for. So, if you set a higher minimum threshold or principle or standard, then you're more likely to achieve or get more. And the same goes in your business. Your team will typically perform to your expectations and what you settle for, not what you hope for.

[00:02:29] So defining operating principles and behaviours or values and behaviours becomes critical to the business having a culture that's going to enable scale because it's the standards that people will end up settling for. So, they better be high, because, you know, as I said, it needs to be designed, not just organically occur so that it actually enables.

[00:02:49] Now if you don't have any yet, or you want to sharpen yours, I'm going to give you five steps to developing your set of operating principles or values and actually embedding them. First of all, I want you to consider your purpose and strategy. So, what principles and associated behaviours need to be important to you to enable you to fulfill your purpose and your strategy.

[00:03:09] Second, I encourage you to survey. Get some real feedback from your team at a minimum, and your customers ideally by asking them some good questions. Like, what do you think are the fundamental beliefs of the company and its leaders? Or how do you believe that we need to show up for our customers in order to achieve our purpose? Or what principles do you think should underpin how we execute our strategy? Or what sorts of behaviours do you see in our business that inspire you? And so, whilst I say it comes from the top, that doesn't mean that I think you should sit in a room and just come up with your own operating principles and values. I think you need to consider it in the context of strategy to make sure it's aligned with where you're trying to go, not just who you are today, but with where you want to go. I think you should get some input into the process. And then third, I think you should test it. Workshop your potential principles and behaviours with your team. It's an opportunity for you to test and see their responses to them before you actually settle them. And then you need to decide. Number four is, decide. Make a decision. They don't have to be perfect, they need to be relevant to now, and they can evolve in the future if the environment changes, your needs change or how you service your customer changes or your strategy changes. They don't have to be static forever. And then fifth, you need to embed them. There is nothing worse than values that have been decided, but the leaders believe that putting them on the website and sticking them in your marketing collateral is enough. It's not, and it's not even close. And I'm not talking about you talking at your team incessantly about them.

[00:04:38] That's also annoying for them. It's actually about embedding them throughout as many touch points in the organisation as possible. You know, you integrated into your performance support. What do I mean by that? Like, you know, you set development objectives against your principles. Where are the opportunities for that individual to live that principle more fully in their role? Explain to them how it can be brought to life, maybe in a team setting, you know, how can this team live those values in a unique way to that team? Create values awards where team members nominate each other for great displays of effort or behaviour that exemplify those principles. Yeah, that's just a few examples, but the point is you need to find as many touchpoints as you can to have those values or operating principles live and breathe in the company if you actually want them to shape your culture in the way that you. So, that's how you develop some. But what if you've now done that and you're concerned that they're a bit weak and they won't have impact?

[00:05:41] Or actually you're looking at your own values going; maybe they could use a bit of improvement. Well, I'm going to give you some tips on how to write well-formed operating principles or values to make sure they're strong and they're well written and they're going to have impact. First of all, they need to be strategically aligned as I said before, they should make sense in the context of purpose and strategy. They have to represent who you are now, but they also need to create some tension between who you are now and who you need to become to fulfill the purpose and the strategy. Second, they need to enable decision. They have to be helpful as part of a framework for decision making, not just for the leaders, but for everybody, so that if opportunities come up or decisions are presented as options and they're inconsistent with your principles, you can feel confident that you can say to people; Hey, if they're not consistent with their principles, don't do it. Third, you want to make sure they're going to create behavioural expectations.

[00:06:39] That is, they represent how you're going to need to show up with each other and customers every day, they're actually going to drive behaviours. Fourth, they need to have cut through. And what I mean by that is you need to use simple, down to earth language, relatable language that perhaps even raises your eyebrows. But it doesn't have buzz words in corporate speak all throughout it. And then finally, they need to be memorable. Three values to six values probably tops. Like you can always expand behaviours and make the principles relevant to different roles or different teams as you go forward, but they need to be memorable, otherwise they lose their impact.

[00:07:15] And I don't know about you, but I can't stand wishy-washy values and you know what I mean when I give you this list. You know, when I was preparing for the episode, I came across an article from Harvard Business Review, which I love on Five Words to Avoid When Writing Them. And I'm going to put the link in the show notes for you.

[00:07:29] Here are those five words. First of all, Integrity. Every company should operate ethically and with integrity. And by saying that that's one of your core values, you kind of raise the question in my view of why you have to point that out in the first place. It's just weak and a bit obvious. Second is, Teamwork.

[00:07:46] You shouldn't need to tell your people to work together. It's common sense. If they're not working collaboratively, listing at a core value is not going to be the solution. Things like organisational design and training and improving your processes and leadership and shared metrics and shared goals and performance standards and all those sorts of things are the things that make teams come together.

[00:08:04] Third, please don't use the word Authentic. It's like trying to be cool, like you can't claim to be authentic or that you want to be. You just have to be authentic and your organisation will be authentic if your leaders actually act and communicate in authentic ways. So just be authentic. Don't tell everybody about it.

[00:08:24] And then actually Fun as the fifth. Stating that you want your organisation to be fun is like just a bit like you're trying too hard. You know, like the teenager who claims to be cool. If you have to say it, then you're probably not.

[00:08:40] The last one is customer-oriented or customer-centric. All companies should be attuned to their customers wants and needs, developing a core value that explains the unique way in which you engage with your customers would be far more differentiating and meaningful than just saying, we're customer focused. So, please don't use those five words.

[00:08:56] And consider those principles as they'll apply to other words like respect, accountability, responsibility, equality. It's just too generic and just a bit meaningless. You know, go for something that's got greater cut throughs, a bit more high impact.

[00:09:43] Okay, so how about a couple of example. Here's a couple of low-impact operating principles or values that you may have heard of before or you may not. Kellogg’s, and you're going to laugh if you've listened to this podcast all the way through because they use a lot of the five words that I just talked about not using. Kellogg’s, integrity, accountability, passion, humility, simplicity, and a focus on success.

[00:10:11] That is boring. So boring. Thanks, Kellogg’s for putting me to sleep during the middle of the day. Barnes and Noble, they're book sellers out of the US. Customer service, quality, empathy, respect, integrity, responsibility, teamwork. I'm pretty sure they used seven or eight words of the words that I just said that are probably not a great idea. If you are not asleep, I certainly am pretty close to ready, so let's try some slightly better versions of operating principles or values that I think are kind of interesting to really try on. So, let's try Rackspace Company out of the US.

[00:10:56] Fanatical support in all we do, results first, substance over flash, committed to great, full disclosure and transparency, passion for our work, treat fellow Rackers like friends and family. I love that they're really clear, right? First of all, you know, get as an example, results first, substance over flash.

[00:11:20] I don't want your PowerPoint. I want your good thinking. I don't want you to like support your customer. I want you to go fanatical in support in the way that you chase down that problem to get a resolution, but it took you three days. Would that represent fanatical support? I don't think so. You can see how it can easily play into good quality conversations about the level somebody's playing at, not just what they're doing.

[00:11:44] Second example is Google. Of course Google. You know, they do so many things so well, don't they? Focus on the user and all else will follow. It's best to do one thing, really, really. Fast is better than slow. Democracy on the web works. You don't need to be at your desk to need an answer. You can make money without doing evil. There's always more information out there. The need for information crosses all borders. You can be serious without a suit. And great just isn't good enough. And there's so many in there to love. But they're so different, aren't they? You compare that to like teamwork, responsibility, accountability, snore.

[00:12:30] This is like you can be serious without a suit. That's not about it, it's like, hey, this is not about posturing and role title. I can know your stuff, add value, be serious about your work, but drop the Cartier watch in the $3,000 suit and the fancy PowerPoint no one cares, and great just isn't good enough.

[00:12:45] Hey, what do you guys think of that new feature? I thought it was great. Really, I wanted you to say, Wow, you know, great's just not good enough. Like, it helps people lift. So again, you are describing behaviors, but you're also describing standards, which really can start to elevate the conversation you're having in a company.

[00:13:06] Third and final, Atlassian. Open company. No bullshit. Build with your heart and balance. Don't screw the customer. They actually put a whole bunch of symbols. That's not actually the word they're using, but let's assume it's screw. I could probably say that. Don't screw the customer. Play as a team. Be the change you seek. These have some great statements behind them. So, when you look at their website, it's like, I'll give you an example.

[00:13:55] Don't screw the customer. Customers are our lifeblood. Without happy customers, we're doomed. So, considering the customer perspective collectively, not just for a handful of customers, comes first. You can see how much impact that has. Anytime somebody comes up with an idea, did you get that just from our top customer or have you actually considered our smallest. Would they like that feature? Do you think they would enjoy that as a initiative? Would they get benefit from that as an outcome? So, think about every, all of our customers first, not just the ones that are in your focus, they're just really memorable and really clear, and they're authentic to them and how they speak, but they're also meaningful and they're actionable.

[00:14:33] So, I've got some additional resources to prompt you if you're interested in more, I've got access to a great case study on Culture and Unicorns by Landor in the UK. And I'm going to put all these links in the show notes. So, if you're looking for that case study, go to the show notes. There's a great book on culture. It's been around for a while but it has recently been updated called Walk the Talk by Carolyn Taylor, which was released in 2015, but recently Revised. Does a great job, I think of explaining how to embed values, how to look at rhythms and rituals and things that happen in the business as signals to your organisation so that you don't end up with a great set of values, but end up acting in a different way cause you haven't really considered the impact of those signals to your business. And Atlassian's values, I'll chuck those in the show notes for you as well, so that you can have a look if you're interested. Go and deep dive more. Of course. If you're actually really wanting to develop a great growth plan and strategy for the next three years, and you think your values like impact, maybe you should join us on the next ScaleUps Roadmap Program.

[00:15:27] First one's going to be early 2023. Jump over to scaleupsroadmap.com.au. Leave your details. We'll keep you posted as we get closer. So, in closing, whether you call them values or you call them operating principles, they're core to building a culture that's going to help you scale your business. No question. Culture is the key, enable it to scale. Strategy is important, but without culture, it's going to fall flat. So, giving these topics, the requisite attention is going to pay dividends and you have to design your culture. Don't let it just organically evolve. And just to reiterate, it needs to be aligned to your purpose and strategy, just not a static thing. It's got to be aligned to that. It needs to enable good decision maker across the organisation at all levels. Frontline decision-making, supervisors, mid-level managers, senior, et cetera. It should create minimum thresholds for the behaviour that you want to see in the organisation and help people elevate. And it should also resonate with your people, and be memorable if you want it to have impact and for it to stick in their minds. So, I hope you found that useful today. I'm Sean Steele and I look forward to seeing you next week.