030: Darius Mirshahzadeh - Growing Your Company Quickly — A Case Study

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All right. Hello and welcome again to the Scaling Up Business Podcast. I'm your host and Gazelles business coach, Bill Gallagher. Today we're talking about a success story. This is a case study, an example of what it looks like when you put our work to work and the difference it can make in scaling up a company. We're going to Talk to a CEO and founder today who's grown his company from 30 or 0 in one case to over 800 today in just a couple of years. What does that look like? What difference does that make? How do you do that that quickly and still keep control of it? Well, that's really what Scaling up is all about. I want to welcome to the show today Darius Mirshaz. Darius is, he's the CEO of the Money Source, the founder of Endeavor America. He's grown his business from really nothing in 2013 to 800 people today. And he's here to tell us all about the secrets he's learned in that process. So welcome to the show, Darius.

Thanks for having me.

Nice. And you're in Walnut Creek today and I just want to let our listeners know that I first met you through a group that I've been involved with forever and ever called the Entrepreneurs Organization was originally called Young Entrepreneurs Organization. It is the place where some of this work got developed by Vern Harnish and the place really where you first learned about it right through what was then called the Birthing of Giants program.

Yeah, that's correct. I was actually at that point, this was before it was all eo. I was the only non member of my Bog Birthing and Giants class. That was non. And that's what introduced me to Entrepreneurs Organization was joining that group. And then everyone there was eo and I got an EO from that.

You're like, well, I guess I better join. That's funny, right? And so many of our early case studies and many of our really accomplished coaches have come out of the birthing of Giants program. And I first knew Vern through and as a result of EO and the birthing of Giants program as well. So it's really great. Our company, actually my wife, part business partner, went through that years ago back in 2002. So welcome to the show. We're going to talk about your experience with it. I know the first time you went around and you went through the program, used it to grow your business back then as well with some similar, but not really to the same degree. So second time you've applied it, probably learning some lessons from your first application of what we then called the Rockefeller habits. Now we know it today as the expanded work scaling up.

Yeah, yeah. I mean, my introduction was under my old company. I got into birthing and Giants and which was called Twin Capital. And that was in 06. And I started, you know, playing around with the Mastering rockfeller habits from 06 through. Really, I didn't have a long Runway. My industry imploded really dramatically in 2007. So probably one of the unusual stories of someone that started using it rug got pulled out from under us. And then I actually spent majority of the next five years just experimenting with it in businesses that did not scale and eventually found a footing in 2012 and 13 and really took off from there.

That's really great. So tell me about your experience. What was it like learning it the first time, being exposed to it? How eye opening. What did you notice about the process? What was it like for the people going through the program that day to be exposed to things? Things like, I know you're going to talk to us a bit about core values and the role that plays.

Yeah, I mean, like most people that get introduced to this framework, which is what I call really a growth framework, that it was overwhelming. I knew that I was coming from a place at that point. I mean, the growth I've had now has been substantial in the business we're in today. But at that point, I joke now that that was a much smaller business and it was, you know, grew from myself to 150 employees in three and it felt way, way more chaotic than the growth we've had since joining the Money Source and our growth over here. So it was, you know, it was overwhelming and I didn't really know where to start. My head was spinning. But I was really excited because prior to that, I Knew I was looking for something to help me control high growth. You know, at that point in my career, I was 27 years old. I didn't really know how to handle a business that was growing that quickly. And this is pre we web 2.0. This is pre this big entrepreneurial revolution that's been going on over the last few years since the 08 meltdown. So there wasn't a lot of resources for someone like myself, with the exception of EO and maybe this Berlina Giants program. So it was really eye opening. I realized I had a lot of work to do and I struggled with rolling it out effectively because I just had so many fires I was putting out at that point.

Yeah, really clear. And what did you notice about your cohort, your classmates in the bog as they began to apply to it? What did you learn from that going through the class?

Well, you know, we had a lot of really, I call them, you know, gazelle super users. Yeah, you know, we had, you know, we had the guys from Nurse Next Door. Yeah, we had John Ratliff of Apple Tree Answers. And both those guys are, you know, really hardcore Gazelle folks. And so, you know, those were my classmates and I was coming in really wet behind the ears in green, and it was cool to see them and have their business. You know, a lot of those guys have done really well with their businesses. John, as most people know, sold his business and he's really involved with Vernon at some high levels now. And so there was a lot of guys and girls in the class that had, you know, that were doing a good job of scaling, of rolling it out, scaling up. And for me, it was good to see that and then to be able to use them as a sounding board. The downside that I started figuring out was that I was doing it the wrong way. And it was, you know, my business story is an interesting story in that again, my business imploded, you know, 14 months after I learned about this framework. So I didn't really get to apply it the way probably a lot of other people do. But it was interesting to see that, oh, just putting a core value down on a piece of paper and hanging it around the office doesn't necessarily mean it comes to life and seeing that a lot of people, they were testing it out in their own ways. But I really realized over that three year period that a lot of people had the same struggles I did, which is they were struggling to do it the right way or they were, you know, not doing it the way they needed to do it. And then, and then they were going back and fixing it. But. But overall I was seeing that they were having growth year after year and they were able to scale their businesses. And through that iterative process, they were really building strong businesses.

Yes, really good. So bringing values to life is. It's critical to have real values as we define them in the first place. Not some aspirational platitudes, but some actual real values that represent how you do right. What it looks like on the court in action when you're conducting business in your business. And then we want to bring in real life in some way. We want to have them not be just words in the break room, but how, but begin to see them. So use them in our recruiting and our onboarding and our management and our daily operations. So tell us about what it looks like now in your business, how you've used it since 2013. Yeah.

So when we got involved with the money source, we were doing really a startup within the company. And it was the first time I got to really build a company that I knew was going to scale aggressively. And day one, have the core values built. Day one, have the core purpose built. Day one, have the BHAG built and built in a way that I knew was going to be easy to scale. So I have rules that I've created over the last decade as to how do you, if you want to build core values. And I really do believe that the one page plan is really nice from a communication standpoint and from a strategic standpoint of kind of laying out the vision of the organization. But I really do believe that the core values are the foundation of the organization. If you have a business that has a lot of people in it.

Yes.

So I think that a lot of it comes down to how do you design the core values and then again, once you design them, how do you roll them? We were very, at this point, this is 2013, I had been introduced to the system of one page strategic planning and scaling up now for seven years and had gotten to play with it a lot. I learned right away that they got to be really user friendly. And then once you build them to be user friendly, then you have to use them in as many ways as possible as you're describing, whether it's through recruiting effort internally, externally, through everything from when you're recruiting to when you're reviewing people. But some of that stuff is, I think, obvious. But I think some of the less obvious stuff is what we, I thought did a really good job with. And that made it so that I joked that we went from 30 to 275 employees without a hiccup. And it was because I think that we did this really strong job of building the values and then rolling them out to the organization in a really strong way so that people could buy into them. And then after that, holding people accountable to them, but also making them user friendly.

So when we walk around your office, how do we see people? How do we see the values? Where do we see them, hear them, feel them? What does it look like?

Yeah, I mean, I really kind of treat the values as symbols of what the organization is all about. And so everything from our symbols, we built symbols for the core values that are almost these iconic symbols that we use for one of our four core values. When we build the core values, they're memorable. There's only 10 words. There's only four values. So we've done everything from making them memorable to putting them in specific places where people see them, which anywhere from on our website to on the walls of our offices. But then it comes down to, you could do those things and they'll be meaningless. I mean, obviously, if the ownership lives them and the management team lives them, that helps. But then it's also creating storytelling around it. So we use systems like and you earned it. 155 is the employee feedback model.

Yes.

And, you know, the question we ask every week is, can you give example someone living the core values, which core value do they live and what happened? And then we'll go and publish that to the entire organization so they're able to give each other kudos for living one of the core values. They get to name the core value, and then they get to. Then we promote that throughout the entire organization. I mean, right now. And we do that twice a month. So right now you'll see 350, 400 of our employees talk about the core value someone else lived and, and what it was. And we'll promote that to the organization on our employee recognition software that we use, which is you earned it. On that system, they're able to give each other points for doing a good job, for living one of the core values. They get to pick one of the core values. They get to give each other points, they get to take those points, redeem them for little prizes. A lot of it is company swag type stuff. We've made it where every day they're looking at the core values just in this, without even thinking about it. It becomes almost rhetorical in the organization. And then it comes back to when we take advantage of Every opportunity we get to talk about the core values. So whether we're giving awards to people for doing a job, for living a core value, whether we're talking about things that are going well, we refer back to the core values. Whether we're talking about things that aren't going so well, we really make the core values part of the vernacular of the organization so that it becomes a language and it becomes something that's just in the air. And it's not something that is a chore, it's just part of the way we communicate. And when we communicate, that's the language we use. And once it becomes a language, well, then the core values are holding people accountable, not people holding each other accountable. That's really. I think we've done a really good job of.

Yeah, totally get that. So have you made mistakes along the way that you want to share with folks or things that you find are.

Yeah, yeah. I mean, tons. Tons and tons and tons. You know, mistakes with core values and mistakes with the one page strategic plan or mistakes with scaling up. Where shall I start?

Well, the mistakes with the core values and scaling up really, you know, either aspect of it, I think is of real interest to our folks. They want to avoid. Yeah.

You know, when I first rolled out the core values, I didn't really know how to do it, so I didn't really. My framework is really specific. And so when I build core values now, core value should be no more than 10 words. So if you look at companies like Zappos, they have, I don't know, nine values and probably 20 words. I don't consider that to be a user friendly core value. There's law, Miller's law, that says the human brain can remember seven items plus or minus three to four. And so 10. I just came up with 10, the word number 10. And it happened to me, Miller's law. I found it after the fact. So 10 words is the max. And beyond that, what you're doing is creating a situation where your employees are going to forget the core values because it's more than 10. And then really picking four or five values or areas of the values that you want people to focus on. I think once you start going above that, it's just too much stuff to remember. And so I think when I first did it, they sounded cliche, they were very generic, there was no heading. The descriptives were not that good. And I think all that just goes back to what I'm saying before, which is if they're not memorable, then they won't come to life. And what ended up happening is you'll have core values in the organization. They just won't be the values you want them to be because the employees will define the values of the organization for you if you don't define them for them. And so I think having using that was a. Early on I learned that. I learned that by the end of year three of bog, when I graduated, I rewrote my core values and I found an example of the core values we had hung up all throughout the office. And I would send those out to people when I was training them on our new values here at the new organization. And I said, this is an example of the wrong way to do core values. And you know, I called them words on paper. They were words on paper. No one really cared about them. They just were something that the management had hung up. And all too often that's what happens in a lot of organizations. They don't do it effectively and they just become words on paper. It's a thing that management did this one time that no one remembers and it's just there. I don't believe that that's an effective way to manage. So that was a big lesson was how do you make them come to life? I think the first thing you got to do is make them really user friendly. It's like an iPhone. The reason why people love the iPhone is because your 2 year old can pick it up and turn it on. So it's really user friendly. Yes. And it's one of the reasons. It's one of the hallmarks of what's made that product a great product. I really believe that organization development is much like design. It has to be really user friendly. And if it's not, people just won't use it.

Totally get it. Well, figuring out how to bring them to life. So I think a lot of times we find different companies, different situations and we also will emphasize getting it down to a few words so they're really clear and having them not be generic, throwaway words like integrity or teamwork that are sort of baseline requirements and, and are generic in nature. Like, everybody has a different interpretation of what integrity means. Right. So, and we famously like to talk, or I do anyway, like to talk about how the, the hated old company Enron had integrity as one of its core values. Right. And so it's possible that they have an integrity definition that is something like, don't leave grandma with any money and you've done complete work. Right, Right. But for the most part, most of our versions of Integrity aren't what they did. Right.

Well, so that's one of the things I think that you need to do is you need people to remember the titles of the core values. And then I think you need to have a descriptive under. And the descriptive is not something they need to memorize, but it's something that's used as a point of reference. So our four core values, number one is people matter, period. Number two, strength of character. Number three is inspiring leadership. And number four is rock solid service. I want my employees and my team members and hopefully my customers to remember that those are our four core values.

Yes.

When it comes to what does each one of those things mean, to your point, you need to write a descriptive. And I think that's anywhere from three to five really specific sentences that are non product specific that talk about what those values mean. And one test I use for that is that if I take those values and fast forward 100 years in the future, are they still going to be relevant? And if the answer is no, that means that they're probably the wrong descriptive. So for us, that's one of the things that we do is when we write the descriptive, this is what this means, FYI, because what I find is that the core values should be able to answer any decision in the organization. You should be able to make a decision by reading the core values. And what ends up happening inevitably is unfortunately, people will try to use the core values against the organization if they disagree with them. And so the descriptors are really helpful when that happens.

Right. To clarify it. And we'll sometimes use imagery to go along with it. You mentioned using, I think you said used images, but did you say use tokens of some kind?

Yeah, we have images or we have symbols. So each one of our four core values has a symbol. So people matter is a circle with little hearts with light bulbs with hearts in the filament. Strength character is it's like a navel noose and navel knot. And then inspiring leadership is a torch. And rock salt service is kind of like the face of the granite face of a mountain with a flag on top. So we use those as again reference points for people to help them remember what the core values are. It's really about helping them remember them so that they just become vernacular, they just become something that they know.

Absolutely. So you build it more. So many of our clients will use tokens or badges or things like that where they're online in some virtual sense or in reality. And then one company we visited recently says if they get a client feedback or customer feedback that mentions one of the core values in relationship to one of the employee service. Then that person gets a very special trophy, right? An unprompted mention.

You earned it as a software we use for employee recognition. And in that software they get to choose one of the four core values that the co worker lived and then they give that. Then they can give them points. So that happens. Last month we had over 10,000 instances of gratitude given in the organization where they chose one of the core values. So that's been a very effective. That's probably the most effective tool we've used. And it's virtual and it's super popular. And. And then they could give each other. And then they take those points and they redeem them for tons of different things. And then the other thing that we do is we have a lot of swag. So with T shirts with our core values on them. We have. Our mascot at our company is a pink unicorn, and we have pink unicorn Adidas tracksuits that people get. There's all these cool little things we do to make it fun. And it's just something where people know that we're all about the core values. They just know that that's what they're signing up for.

So most of the companies we work with today, I recommend that they do something like a manifesto that becomes an opening for their daily and weekly meetings. And that's a shared document that includes things like the purpose, the values, the BHAG and the quarterly theme, and sometimes the brand promises. And then that gets read by different people all the time and then there's response to it. So after a while it becomes ingrained. And that's one of the ways to bring it to life that we use with ours. Do you have anything like that that you're doing today?

Yeah. No, we haven't. That's actually kind of a cool idea. Right now we have in any given day, 43 different huddles that happen in the company. So maybe doing something like that would be helpful. What we do is on a quarterly basis, we're revisiting the values and we have right now in the company. And this is an eo, actual example of using EO in the business. We have eight different leadership forums in the company where we'll revisit the core values and say on a scale of 1 to 5, 1 to 5 being the highest score possible, how alive is this specific core value in the organization today? So we do that. That's a little bit. That's not daily, that's not weekly, that's more quarterly and then that's monthly that we're doing that with the leadership forums, quarterly, with the managers. So as far as talking about them from a strategic sense, that's not happening on a daily or weekly basis. That's happening more monthly to quarterly.

Totally get it. Well, this is super helpful. I think folks will like hearing about it and also like hearing the validation of using it to grow so significantly over such a very short period of time. And I'm sure that every business has a different rate of growth and there are things to work through and so on. But your application of values and creating a culture overall is an inspiring example of the basic simplicity anyway, of the idea. If the execution is not totally easy, I'm guessing that this shows up then all the way through the life cycle. So in the recruiting of the. I'd be interested to hear what it looks like, where people first encounter it in the ads for the job, in the job interview, in the onboarding, and in their ongoing review. Can you give us a picture of that?

Yeah. So it starts with the interviewing process. And I'll tell you honestly, up until recently, it wasn't something we were doing there. We were doing other things, but we were not making it specific to the core values. And then I intervened and I really pushed for us to do that. So that's been added where we're asking questions about them, giving examples of them living these core values in their life outside of our organization if they're looking to become part of the organization. So that's something we've just recently done. It's funny, it's one of those things where I tell people they should do it, but not practicing what we preach. And so we've just rolled that out. But one of the things I think, and this is the onboarding is where I think we got it. Like we hit a home run when we three years ago when we were again just 30 employees. We basically brought everyone together and we built a. It was an orientation for the company. And so we have a few different things that we do here. Number one, we're a strengths organization. So we use scallop strength finder.

Oh, nice.

Everyone that comes in learns their strengths. We do a three hour workshop on strengths with every new employee when they start. And then we do a three hour workshop on the core values where they learn the core values. They get to talk about what they expect them to look like in the organization if they're to actually be true and come to life. And then we spend three hours on our core purpose. And our core purpose is to grow happiness. So that's our why. So we teach them about Simon Sinek's why, we teach them about why it's important. And it all comes back to building an engaged organization.

So, so we've got a purpose, we got values and then we've got this long term thing. One million families achieve and maintain the dream of home. One million plus homeowners. Yep.

Yeah. So our BHAG, which is to help 1 million homeowners gain and gain and retain homeownership in the next 10 years. And so we teach them that in our third module, which is under right after core purpose, we teach them about our bhag. So we do all that. And this is literally before the employee's first day of work. This is their first day of work. They spend. I think when I was, I did the first, probably 400 employees and then I got too overwhelmed. So we have trainers that do it now, but we basically spend. I was doing it took me about a day and a half to do it with each employee and now we do it in about one full day. There's actually one going on right now, my office with about 20 people as I speak.

Nice.

And so, you know, we fly people in, we have a lot of remote employees, about 250 remote employees. And so we fly them in, we put them up in a hotel, we bring them in, we do a full, we call it our core value training. And that's. And then we send them on their way. And that's the first thing that people learn about the organization is, you know, what we're all about as an organization. And I believe that that's probably one of the strongest statements we've made and why we've had such good success with people understanding that this is important for us. So we do that and then it's ongoing. Whether we're doing the reviews, we rate them based on the core values in the reviews. That's one of the things we look at. And then one other thing we do is on a quarterly basis we do anonymous survey, company wide survey where we do ENPS, we do our Q12, which is Gallup's tool for engagement. And then we just ask questions just about do you believe that the company is living the core value of such and such? Would you rate it? And we asked the employees this question.

I just love that you're a big Gallups user. Are you a strengthsfinder continually with clients and leadership teams?

Yeah, yeah, we're all about it. And so we take that data and then we benchmark that data, and then we look at it quarter over quarter. So I could tell you that right now, on average, 7.8 out of 10 of our employees are engaged. And of that, 4 out of 10 are highly engaged. So our goal is to get that up to 9 out of 10 and 5 out of 10 on the high engage. And so we'll use a Q12 for that. But then we'll look and see, like, how are we doing? It's not necessarily, you know, that number is great, but how's each department doing quarter over quarter? Are they going up? Are they going down? You know, we can start to pinpoint areas of weakness in the company through these types of reporting that we've built.

So this is a fantastic testimonial and a great case study for our work applied. I know, you know, we start to see folks really interested in talking with us and working with a coach somewhere between 75 and 100 employees. We see some smaller companies use our small company engagement below that, but that 75 to 100, they start to be like, oh, Jesus, I need some help to deal with everything. And so that's kind of the inflection point that people start to really get interested in our work. And I think what you're demonstrating is the value in creating a compelling company that goes not only through that mark, but now through 100, 800 people. And you're still breathing. And I know you're a dad, you've got two young kids, and your family is deeply important to you.

Yeah, I mean, I agree. I think I did it the hard way, which I wouldn't recommend for people. Had my business not imploded in 2007, I probably would have served me well to hire a coach. Right then we were at about 150 employees or hundred employees. I really started noticing to your point, like around that 60 to 75 employee mark was where things started getting really out of control for me.

Yes.

When I first got introduced to these concepts.

Yes.

And. And, you know, trial by fire, I, you know, I kind of learned a lot of this stuff, you know, on my own. And just by applying the book and.

Yes.

And not having had successful businesses for, you know, from 2007 really till 2012, I had a lot of opportunities to pivot and retry it. So when we came into 2012, I grew our business then very aggressively. And when we took that business to 2013, you know, it was one of those things where I took it about as far As I could take it without a coach and because I had a lot of experience, I was able to do it. Had I not had that experience with the program, I would have probably needed a coach. You know, to your point, right around that 60 to 75 employee, a lot of it has to do with how fast you're growing too.

Yes. The rate of growth.

Yeah, yeah. If you're adding, I added 120 employees last month. When you're growing 10, 15 employees a month, you're going to need help. Five employees a month, depending on the size of the organization. When you're starting to add new people and you start to get these layers removed from you as the founder, there's a lot of stuff that gets lost in translation and that's where these problems start to occur. I think that bringing a coach on to your point, around that 75% mark is a really good idea.

Yeah, I think it makes it. Well, we have, you know, I had a guy recently who loves the idea. He's been thinking about it for a long time and we did a little workshop for his leadership team and then they huddled up and they said, you know, we're going to try to self implement. I'm like, okay, great. And you should probably do a check at say three months and six months in and see how effective are you, how far along, you know, pull out the habits checklist and score yourself on that and then pull up the one you did at the beginning and see how much have you moved and what do your business results look like. And then see, you know, maybe it's fine and maybe you're going to do it fine on your own. We're not, you know, blessed with godlike abilities, but we do have experience and we do have an outside perspective as well of seeing the work applied in many different businesses and then starting to help to bring that learning from different places to our clients.

Yeah, I mean my coach does. So we were a group that's really like, I have a lot of executors in my group, so we'll take our strategic planning and just pound through it and knock it all out. And so even the way I use my coach isn't so much as a check and balance to make sure I'm rolling it out properly. Because she sees that we know what we're doing in that sense. Mine is just to get a third party perspective on just strategy. How are we running the company? What are some of the problems we're running into? Hey, I'm trying to hire a chief learning officer Right now, what do you think the best way to me going about that is? So my relationship with my Gonzalez coaches is totally probably different than most people's in that she's just a coach for us to get a bounce ideas off of. We spend a full day, a quarter just sitting down and going through all of our different materials and talking about it and just brainstorming. That's probably not how most people are going to use their gazelles coach, but for us that's high value and I've, you know, it's very valuable in my opinion.

We're going to put a link to the money source in the show notes as well so people can go look at that because I think there they can see, they can get a feel for the business that we're talking about. They can see your why, your values, your bhag, they can see your view on the approach to team and they can get a feel for the business there by browsing the website and they'll see it. I think it's really helpful. Helpful. It's probably inspiring for a lot of folks to hear this applied and to hear that it makes a difference to go ahead and do it. And I really want to thank you for coming on the show today and sharing some of your story with us.

Yeah, no problem. Thanks for having me.

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