Podcast

Scaling Up [S7.E1]: The Culture Scaling Playbook, Values

What is a high-performing culture? It is a question as straightforward as it is philosophical.

In this special season, we explore high-performing culture; what they are, how to create them, and most importantly how to scale them. This season draws upon the themes and wisdom shared by the previous 42 CEOs, founders, leaders who we have had the pleasure of interviewing on Scaling Up.

The following workbook includes many of the key topics, frameworks and references from the podcast.

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Chapters

(02:00) High-performance in teams
(04:18) What is culture – the triangle framework
(07:18) Link between effective cultures and exceptional business results
(13:02) Values and when they get formalised
(21:35) Living the values and codifying them
(26:13) Values and hiring – from interview to onboarding
(34:25) Can you refresh or change your values?
(37:07) The wrap up

Ed

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 CEOs, 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, which reversed the integral topic of values, why they’re important and how they have to be at the centre of every decision made and every behaviour 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, CEOs 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 catchall 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 ladder 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 Hanson, the most successful sports coach of the most successful team in history, the All Blacks rings loudly in my ears

Steve Hanson (03:39)

All good teams, and I think companies would be the same. They have clear drivers, things like teamers, first, individual second, they live their values from the top down so 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 in their 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.

Ed (04:15)

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 Binder head of people and culture at Asana. She likens it to the area of a triangle where 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.

Anna Binder (04:43)

I ask 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 organisation. For us, it’s nine things. These are the things we endeavour to show up with each other by we don’t always get it right and we’ve 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 I shorthanded 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’s what features go into the free version of the product and what features go into the paid version of the product. There are literally tens of thousands of these and the way that I think about culture is our collective 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.

Ed (05:57)

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 as 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 Ana, one of the world’s best people and culture leaders. In my mind, her episode was episode six 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.

Joel Montaniel (06:59)

As we think about growing the company, the image I’ll give to people often is 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 help layer in and strengthen the glue across all of the rings.

Ed (07:16)

A key piece of the puzzle is why scaling culture effectively is so important. There are entire library isles 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.

Ethan Berman (08:17)

My objective is to make risk metrics the world’s best employer, and that’s what we want to be because if you are the world’s best employer, you’ll be successful regardless of what business you’re in. And I said this, I said, our competition is not other risk management firms. Our competition at the time was Google was Goldman Sachs, was McKinsey, the places that parents want their kids to go and kids getting out of the top schools want to join. And I think that that really became sort of our mantra on what our success was going to be. And that’s hard as a small company. And the most important thing I learned from that was you 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 long-term sustainable.

Ed (09:17)

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 at 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 who 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 this secret sauce in the high-performing teams he was a part of and led.

Hugh Williams (10:03)

So you get these incredibly motivated people who are really, really smart, who want to be in teams and go and drive and do things. So at Microsoft we were all working together, 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 I remember in my early days at Microsoft being a bit sad when it got to be the weekend, it got to be sort of Friday at five o’clock and I’m like, oh, what a bummer. I’ve got a day off tomorrow. Now of course I loved going home and hanging out with my wife and my young kids at the time and that was fantastic too, but you’re like, oh, do we have to stop now? 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.

Ed (10:54)

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’re 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 and time and money, but the gap they leave in the meantime can have a compounding outsized detrimental impact on those who are directly in the orbit of the now X employee. More importantly though, as 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’ll be customer-centric, it’ll be business outcome orientated and ultimately it’ll 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 at 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 Elinger, the co-founder and c e o of CultureAmp in action at close quarters. CultureAmp has the largest proprietary dataset as it relates to culture with over 6,000 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 emphasises 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 accompanying notes to this podcast as I’m sure a few listeners will want to dive in further

Values, when do they get formalised? 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 centre of every decision made and every behaviour 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 c e o of Guzman, I Gomez, Steven 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.

Steven Marks (14:28)

Right? At this point in time, we have 4,000 people in the restaurants. There is no GYG 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? I mean values, I thought that was some sort of bullshit thing you have in the back of a door, but I realised that we really have values and my business partner would say to me, dude, this is what you talk about all day long.

Ed (14:49)

I’m going to allude to this right this episode, but I’m going to be explicit here. The most important trait of a good set of values is that they guide behaviours, 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 organisation 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 formalise 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 realise that there is a deep need to be a codification of all the behaviours 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 that Adore Beauty and now ASX listed e-commerce 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.

Kate Morris (16:11)

So we all worked together on putting together a list of cultural values which basically represented, okay, when things are great here, when things are going really well, what behaviours are we seeing? What are the consistent threads of the things that make it good to be here or make this a good company 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 recruitment of performance management. And you ask anybody here, we’d bang on about the values all of the time because we expect everybody to be able to use those key values as decision-making tools on a day-to-day basis.

Ed (17:02)

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 organisation. They need to avoid pithy, one word generalism 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 TDMs values is wear the yellow hat. And it was born out of a total misunderstanding of Edward de Bono’s six 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 perceived as a silly question. And it’s this colloquialism around the corridors that’s permeated into meetings and beyond to anywhere people are requesting just some form of psychological safety. For Mike Frizell and James Edwards, the two co-founders 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 formalise what they valued. And like everything that those two had done, it was very deliberate and to hear why, here’s Mike.

Mike Frizell (18:24)

And we never got comfortable with the idea of writing values or culture because our belief, and we 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 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 five 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. Commonality is be individual. We didn’t yet good words. You didn’t call it a culture, we called it like a work contract

James Edwards (19:04)

Ways of working or something like that.

Mike Frizell (19:06)

This is a contract between you and your peers about how you’ll treat each other.

James Edwards (19:10)

We thought about it as what you do at work 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.

Ed (19:21)

What did become surprisingly apparent to me that I’d not factored in coming from a singular team sport was the possibility for multiple cultures to coexist inside a business, be it because of geography in a global business and various local offices moulding variations or depending on the type of business, different organisation departments having distinct cultures. And it now 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 contractor, as Mike 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 thread 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 Corr, the then CEO of Ellie Mae before it was bought and sold again for $11 billion US

Jonathan Corr (20:51)

The culture in many ways just started with Sig pretty quickly as he surrounded himself with people, folks that shared a common viewpoint and then the culture really became the people here. And so it’s always been in many ways we just talk about a high tech company with old fashioned values, but it’s been about 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, knowing that that is the case. 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?

Ed (21:38)

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 behaviours that they represent. They need to codify these behaviours 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 Montag left me with their value, put everything on the table pun 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 a final opportunity, space and permission to speak up.

Expressed 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 Rokt Bruce Buchanan, you’ll hear right throughout this series, give very explicit behaviours expected for the different levels of the organisational 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 Stollmeyer, founder of Mindbody, had a very simple framework to help this codification and I think best to hear it from him.

Rick Stollmeyer (23:13)

Best way to explain any core value is to discuss the opposite of it. One of our core values is humble, unhelpful. 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, I mean we’ll not tolerate, the organisation will literally expel such a person if they manage to fool us enough to get hired.

Ed (23:36)

This is also true for the positive extremes of any singular core value and why attaching behaviours 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 first place. Bill Magnuson, CEO and co-founder of Braze 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 prioritise and make tough decisions.

Bill Magnuson (24:17)

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 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, the people around you should help. Not only do we not shoot the messenger, we actually embrace them and 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.

Ed (24:47)

Of course, constantly reinforcing what great looks like with values well lived is also crucial to allow the behaviours to permeate and become the norm. Sounds funny, but culture scaling is relying on this normalisation of what has forever been taken for granted. The cultural iconography or artefacts, 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 symbolise 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 Mackenzie at Pacific Smiles has done something similar using storytelling and symbolism two via a similar method. While a small gesture is the meaning behind them that can be so galvanising 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 behaviours 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. A doubling of headcount for two consecutive years will mean 75% of the team will be new to the organisation 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 practise 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 behaviour becomes the acceptable standard and very quickly the norm for everyone else sadly, values hiring. From interviewing to onboarding and beyond. Perhaps the most important takeaway from all the interviews I’ve conducted is the role that values play in the hiring process. Here’s Paul Bassett, who is a co-founder of Seek Reflecting on his own experience.

Paul Bassat (27:00)

My skills as a leader are, I think I’m very good at identifying talent and well, I’ve always optimised for values alignment and raw ability over experience. I think experience is the most overrated attribute in hiring. Not that it’s unimportant, but a lot of areas we just over index for experience.

Ed (27:21)

Bruce Buchanan, the CEO and co-founder of Rokt also really stressed this during episode two of the very first series of scaling up. Here’s Bruce

Bruce Buchanan (27:31)

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 raisers and they answer three key questions. The bar raisers are from some other part of the business and the bar raiser process is three 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 team They’re going in

Ed (27:56)

Anna Binder, who you’ve already heard from in this episode, the CPO of Asana, and one of the best CPOs 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.

Anna Binder (28:33)

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. 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 for in an interview

Ed (29:03)

As part of the interview process. At Allbirds, the company values are used right throughout screening, but then more deeply towards the backend. Once competencies are accounted for, they use the values as an opportunity for candidates to both opt out or importantly emphatically opt in. Here’s Joey, the co-CEO.

Joseph Zwillinger (29:22)

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 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 that is a powerful thing to get an incredibly aligned of people who happen to be very diverse of skillset, diverse of background, and bring that diversity of thought with an aligned set of values and mission into something that is focused and that can be very powerful

Ed (29:53)

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 behaviours attached to these values. And this can come from many forms and usually brought physically to life in and around the office or in the world of hybrid work, more asynchronously, be it in the form of live or recorded leadership led workshops that are of course other common practises that explicitly formalise 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 practises 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.

Alyssa Healy, one of the great cricketers of this generation, talk 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 weeded out here. She’s describing like all things in professional sport, an intense direct, an incredibly powerful ritual.

Alyssa Healy (31:30)

One thing 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 Meg learning, Elise Perry, that you’ve looked up to 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 going to 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 set it out loud. 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.

Ed (32:33)

Once employees know what these values are, understand what is expected of them, and while obvious 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 of 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 behaviour over results. In the short term, knowing the right employees with the right behaviours 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, be it 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 organisation, 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 outsize 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 Revell 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 Magnusson.

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 they 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 behaviours? Are they easily understood? Do they bridge cultural boundaries? Are they easily memorable? If the answer to any of these questions is no 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 behaviours or decisions being made in the organisation. 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 by its 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 organisation 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 Rokt 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 clickthrough 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 a 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 Katherine McConnell.

Katherine McConnell (38:11)

When you’re hiring 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 externally people know what they are and so they become your scaling engine.

Ed (38:32)

We’ll see you for the next episode of our Culture Scaling Playbook. It’s going to be focused on the key elements of great hiring and retention. I’m Ed Cowan, I hope you enjoyed this very special episode. Of course, as always. For more insights, please visit the TDM website, tdmgrowthpartners.com.

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