219: Darius Mirshahzadeh — The Core Value Equation

Are you thinking about how to grow your business with near and offshore staffing, but you're also wanting to make sure that it's reliable, cost effective and really well done? I think docsa talent is the way to go. Here's why. They don't just fill your jobs. They bring integrity, top talent, and a people first approach that's hard to find. I've known the people at Doxa talent for over 20 years now and I say that you can count on them. I have. Talk to Docs of Talent and you won't be disappointed. Go to docsatant.com Bill G Again, that's doxatallent.com Bill G One more time. Doxatallent.com Bill G Check it out today. Well, have you ever felt like we talk too much about values or you've.

Done your values and you're not really sure if it's making any difference for you? It's okay.

It's okay to be cynical about it.

Our guest today talks all about how values helped him grow from 30 people to over 1000 and all the stages in between and what's missing in so many companies use of and deployment of values, but how doing values well actually makes a difference. So listening to this show about how to do that, if you think you might want to get a coach or maybe now is finally the time to talk to the coach, there's never been a better time and we've got lots of flexible options for you at every budget level to fit almost any situation, whether with me or with one of the many coaches in our body. A coaching body, whether it be entirely self directed online or a hybrid approach of online offline coaching in person. We've got lots of options for you, so just give us a call, talk to us, send us an email infocalingcoach.com now listen in as we talk to Darius Murshazadeh about how critical values are and what's probably missing in your use of values. Hello and welcome again to the Scaling Up Business Podcast. I'm your host and scaling coach Bill Gallagher. So on the show with me today is Darius Murshazadeh. Darius and I actually met back as members of the San Francisco Entrepreneurs Organization, San Francisco eo. And years ago I was launching our accelerator program in San Francisco and Darius was like the first or one of the first coaches to join that program and help coach our entrepreneurs. And he turned out to be an awesome coach and he's become an awesome developer of companies. And in fact it was about that time 2013 that he started this most recent company. I'll let him tell that story. You should know that Darius is a high growth CEO. He's a serial entrepreneur. He's done more than once. He's become a mad scientist around values and all that at the money source. Number nine on Glassdoor's top CEOs for smaller and mid sized companies. And number three, best place to work in San Francisco. San Francisco Business Times won an award for employer of the year recognized by the New York Times, HuffPo, Entrepreneur, Forbes, et cetera. So Darius, welcome to the show.

Thanks for having me, Bill. I appreciate it.

Is it hot as hell there right now? You've moved from San Francisco to Austin now, right?

That's right. You know, no, it's, it's, it's still, it's 93 degrees right now. Which for here, that's, that's bearable. This is, it's gotten a little bit warmer. It's, it's, it's good swimming season. That's, that's, that's what I call it.

So get in the pool. Yeah, we don't have as many pools and actually if you go further east, we have pools around here. But we are enjoying the, the outdoors today, definitely.

That's so. Yeah.

So talk to us about why don't you before you launch into the Money source and what you've sort of honed and developed and learned about building culture with values. Talk about this entrepreneurial journey. Give people a little taste of your beginning. I don't know, back at 10 years old or whatever it was that you got started.

Yeah, no, my first business, I was in the fourth grade. I sold candy. I had a candy empire with my twin brother and that got shut down by our principal. But so, so that was the beginning of our entrepreneurial journey. I was lucky. My dad was an entrepreneur and he was in real estate and he owned gas stations. And so I got put to work at the age of 10. Being around my dad and working at a gas station. And so for me, doing anything but running our own business was kind of not an option. It was just kind of understood that we were going to run our own businesses. And so we started when we were young and we were always hustling. And when I was in college we started an events promotion company and that was the first time I ever lost 100,000 bucks. That was my first big loss. And yeah, I was always an entrepreneur. And when I was 25 was when I started my first high growth company. It was in San Francisco and I started a Company called Twin Capital Mortgage with my twin brother. And it was a crazy success. We went from myself and an assistant to about 150 employees in just under 36 months. And that business was crazy. We were number 40 in Inc. 500. And I was totally out of my league. I had no idea what I was doing. And ironically enough, the solution for that was this program that I found was one Friday night, Fridays. I was always ruined because I just worked 80 hours and I had to work on Saturdays because I was trying to figure out how to run this fast growing business. And I was, I think I was on like either looking at Inc. Magazine or on ink.com and I saw this program they're advertising called Birthing of Giants. And this guy named Vern Harnish was putting it on and had been going on for a while. And so I applied. It turned out I missed. This is 2005. Excuse me. I had missed the deadline to apply. So I filled out the whole application. I got introduced to the scaling up thing. I was like, wow, this looks really interesting. This seems like this would solve all my problems. And so I held onto the application and the minute they released for 2006, I applied through INC to be a part of Birthing of Giants. And I got in. I was one of, I think there's 60 of us in the class. And that is now the entrepreneurial master's program eo. And it was a life changing event for me. It really changed my life in ways that will never, ever be the same and sent me on this path that I never would have guessed when I applied to that program. And so I went to the program and Vern was still teaching it then. And he, you know, started talking about how your company's got core values. And we're learning all about the one page strategic plan and all these best practices for high growth companies. And it's a room full of, you know, entrepreneurs under the age of 40. And my mind was blown. I went back and I mean, it's a three year program. Every year I'd go back, my team would be wanting to kill me because I come back with all these things to do. But the first thing I did was I was, I brought back core values and I wrote them up. I wrote them up myself. There was no discovery process. It was six core values, 76 words. And I came back the next year and was feeling all hot stuff, that I rolled these things out and went back the next year and tried to bring them to life. And I remember one of the guys that at birdling Giants said, well, if you want to bring them life, you got to, you know, have like a, have a session with your team where you got to like talk about them. So I got everyone on a call and I said, let's read the core values together. And in the middle of me reading the core values out loud, one of the salespeople had not muted their phone. And the woman said, this is such bullshit and.

So entertaining.

Yeah, I was so mad. I was so upset. I mean like, this was me rolling out the core values properly to the team and. But she was right, you know, the company had tons of problems still and it was, there was. We were just had not built it for scale, but we had grown way too fast. And so the next year I went back, it was year three, we went to graduate and the night after we finished, we did a peer to peer workshop and, and Ken Sim and John De Hart from Nurse Next Door, their case study in the Scaling up book, asked us all to stand up if we had core values in our company. So all 60 of us stand up and Ken says, stay standing if you can say your core values off the top of your head without looking at them on a piece of paper. And half of the room, half of the room sits down, Bill. And guess. Guess if I was in that group or not. Yeah, I was in that group. I was part of the half of the room that sat down. Then John said, stay standing if your employees know the core values without having to look them up, half of the remaining half sits down. And then Ken says, stay standing if your customers know your core value. Everyone sits down and I'm sitting there just dumbfounded. I mean, we've been through three years of this program and the whole room sitting down with the exception of John and Ken. And that was, that was a. That changed my life, that moment.

That was the moment and eye opening for sure.

Yeah, it literally changed my life. And from that night forward, core values got me that day. And it's never been the same, so.

Yeah. So what'd you do? It's interesting because we've known about core values forever. Everybody says they're fine and companies have core values. When I start working with a team on core values, one of the first things I like to do is talk to them about Enron. And what do you suppose Enron's core values might be? Not only did they have bs, generic terms like value, integrity, et cetera, but one of them was integrity. Like on what planet does that have anything to do with the way they operated that company, right? Totally. It's just fascinating. So what'd you go back and do?

Well, so the next morning, we went out and partied that night. You know, we just graduated. We're all celebrating downtown Boston. Next morning, you know, I go to get brunch by myself before I catch my flight back to San Francisco. And I'm sitting in this bar, there's this little breakfast spot in Cambridge, and I'm hungover, and I'm just. This thing that happened the night before with the group, with Ken and John. What's not leaving me? It was bothering me, and I said, you know, why did I not know my core values? I created them. How would I like, that bothered me that everyone sat down. It bothered me that I didn't know my values. And so this is right when the iPhone came out. It's 2008. So I pull out my iPhone and I look up, I said, well, these guys both were standing up at the end of. At the end of the workshop. What's so different about their value? So I went and looked up at their website, and the first thing I noticed was theirs were just. They were simple. There was four of them. First of all, they were fairly simple, and they. They. But they, you know, they stood for a lot. And. And they stood for big, big themes. You know, they really stood for core items that these guys stood for. I knew that. I knew them personally, I could see that this is what their business stood for.

And.

And. But they were simplistic, and they were meaningful. And so I thought to myself, I have to redo my core values, because mine are not memorable and they're hard to. You know, they're not. They don't stand. They stand for things that are important, but the way they're represented, you know, they're not designed for use. And so literally, probably within 30 minutes, I rewrote the core values. And, you know, I still didn't go through a discovery process, but I definitely rebuilt them from these 76 boring six value words into four values that to this day, it was do work lives and break the box and wow everyone. And. And I. I realized that it was important to make them memorable. And so I went back, I brought him back to my organization, and right away I saw a difference. I rerolled them out. I noticed people reacted, you know, worked with them differently. They were just built better for. For scale. They stood. They were more authentic to who we were as an organization. They weren't bland. They weren't boring. They were. They really kind of were in the tone of what we were as an organization. And my, it started to resonate with my team and for me that was the first step in my core value journey of utilizing this tool to make my business a better business.

Yeah, it's really great. You know what I, it's useful to point out to people. So if you've got an existing business of some size and, and it's been around for a while and like that, there's some history there, you have in effect some values. That's the discovery process you talked about. But if you're the founder early stage, then there are probably some latent ones in there that you could articulate. Sometimes the discovery is about looking at you and what you're committed to and what you create. But if you're a founder and or early stage, you can actually have the discovery or the work be mostly with you. But if you're further along, we want to engage the wider team that has an added benefit of them really feeling like it represents them and then buying into it. Right. We can get ownership and participation by doing it that way. But I love that, what you said there and how that developed it seems great.

Yeah. I think that like with earlier stage companies, I mean one of my rules with core values is that they can never change. But, but I do think with earlier stage companies you might want to have some flexibility there because you just don't have an organization to reflect off of. To your point, the exec, you know, the company has a personality to it and the company has, you know, an essence to it. And it's because you have a mixture of people that are coming together and representing, you know, what it is that's important to them. And generally speaking, people like minded tend to attract one another.

So. Right.

I do think that when you have a team, I mean, I do think you want to be very thoughtful of who you include in that process. But you know, the company has an essence to it that is, is undeniable. The question I always, you know, when I start, you know, as I learned more and more about this and as I started to work with friends of mine to help them, you know, build their values for their company, I, I just leaned on them pretty hard and said what, what really, what are you really? You know, and, and for me that, that became what are, what am I really? And what do I, what, what am I? What's non negotiable for me and my business and what are we willing to fall on our sword for? And people, people sometimes don't want admit what those things are because they're maybe not as, you know, favorable to everyone that's there or they have to call into question some of their behavior, but people know what they are. The question is, are they, do they have the courage to actually be that? My belief is the minute you have the courage to say what you are and be that, a lot of great things happen for you and your life gets a heck of a lot easier.

Yeah, because it says I'm for this, I'm not for that. And in the context of work, there's a lot of symmetry with who you are and what you care about, right?

Completely. Because what ends up happening is if the organization has said what it stands for. And this is where, I mean, we're talking about values. And we're 10, 15 minutes into this conversation and a lot of times people go, oh yeah, I know about values. And it's just this thing we do. And my thing's like, listen, if you discover, design and implement these things and make them come to life and measure them for effect, these things do. I mean, I think they're the most powerful tool you have in your organization to supercharge strategy, to supercharge execution, and to supercharge profit. And a byproduct of that is you get a good culture. And the reason I say that is because if I say what I stand for and I hold like put my, my flag on the ground and I say this is non negotiable and I build a company or I or our management team builds all of our strategy, execution, behavior, expectation. All of our things we do is based around those ideologies. Who we hire, who we fire, who we bring on as clients, who we get rid of as clients. Well, what ends up happening is you start to eliminate all the noise. There's what I call an organizational efficiency that starts to happen. I don't need to check to see if they're doing it the right way. Of course they're doing it the right way. We all share the same values. And so when that happens, I call, I have a name for this, I call it Invisible Scale. You start to create invisible scale. And you had asked me earlier on about TMS. And so when I, you know, TMS is a business that was started in 1997 by my business partner and I joined him as a joint venture and I built a business within the business. And then eventually we merged and we became all TMs. But when I joined that company, it was small company, I think 30, 40 people total. I was building My own thing. It was a startup within the company and we went, I kid you not, from 13 people to 300 people in 18 months with zero growing beans. Zero. I had none, no friction. And it was, I'd never seen anything like it before. And after the fact I looked at it, I said what the hell happened? How did that happen? And because it was I. When I thought back to the last time I scaled, when I went from 0 to 150 in three years, I got every single head kick you could get, every single boot to the mouth you could get. But this time around it wasn't the case. 0 to 300, 275 of them were remote. These are full time employees. Managed to KPIs managed through the scaling up process. I mean it was a thing of beauty. And I. And when I look back at it, I said what was different this time? And I realized what it was. We had successfully made the language of our organization our core values and we had invisible scale in our business. And that my, like if I, if the moment at birthing Giants was a moment that was the next big moment for me where I was like, I'm onto something here. This is, this is, this is not what I stumbled upon it. I didn't expect this result. But there's something happening here and I need to think more about it and do more research and go deeper into this. And that's when I really started to experiment with values aggressively from that point forward.

So let me point out a couple of the examples that reinforce what you say from our world and then let's actually just talk about yours as well for a second because I think you went through them really quickly to create the picture. So one of our. Another birthing a giant's massive success story. The founders of Rackspace went through the program with Vern and learned what Vern said, went back and did it. And their number one value, also a number one brand promise fanatical support. Right? That's not great service. That's not high quality or generic buzzwords. Fanatical is not a normal business kind of term. Fanatical support adds color and character to it. Now those guys grew and sold, I don't know what, $8.5 billion in the end. Not bad. Another one that goes to what you said from Ken's and John's questions. Also in the book, Ben Godsey and Dustin Sellers, who grew Pro Service Hawaii into a large substantial business dominant in its category in the state of Hawaii. And they have a practice where if you're like one of the coolest, most coveted employee awards is if a customer acknowledges you and says the core value. Because they want the customers to use the core value. Now their lobby is emblazoned with their values. I've visited them and spent time with both Dustin and worked with Dustin. And so some of the companies, he's invested and done video and did a workshop for that Ben sponsored. So just outstanding. You could see it's rich and it's evolved. And the people do games and contests around the values. They're so deeply enshrined. And then if you get. I forget what it is now. It's been a few years, but if a customer acknowledges you and uses the language of the core value, you get the trophy that goes around. They've got this one trophy that moves from employee to employee. I want to say it's Duke Hanamoku in a glass case, but the legendary surfer. Right. Outstanding. Right. So tell us yours again more slowly so we get a picture of them.

The core values themselves. Yeah, tms. The number one core value is people matter, period. The second is matter, period.

Right. There's a specific language. It's not people, it's people matter, period. There's an emphasis, there's color to it. Go ahead.

Right. I have a design methodology that. Let me back up for a second. I believe that there's three important parts to creating core values. One is the header. So the header at our company, we have four core values and the headers amount to nine words, excluding prepositions. So people matter, period. Inspiring leadership. And that's about how do we inspire each other as leaders. The third one is strength of character, which is our way of saying integrity. And then last one is rock solid service. And so to your point, I believe that there's. There's, you know, when you do like a mission to Mars or there's a couple different ways of figuring out what your the values are. So if you look at ours, the four I just said, people matter is about caring, inspiring leadership is inspiration, Strength of character is integrity, and rock solid service is service orientation. What we did is we take those words, those are core value themes, I call them, and then we convert them and translate them into words that fit the tone of the organization because they're easier to remember that way. The tone really gives you an emotional feeling of what that word means. If I can say integrity or I can say strength of character. Strength of character is a better way of saying integrity, and it's more aligned with the type of company we are. And What I tell people when they're designing their values, I say, look, you want to pick words first of all, you want to pick themes that are honest and authentic to what you are as an organization and you want to do that. And there's a lot of work you got to do to figure that out.

Right.

So you got to do that work.

You know what's great? So integrity is a powerful word. I've led personally multi hour workshops on what does integrity mean? And bringing integrity to life, deepening one's relationship to integrity and bringing in your. But by itself, it lends itself to the mischief of being generic, dismissed, not heard, and everyone having a different idea about what it means. But when you give at least three words to something and pick a few interesting words less used, you start to evoke more of a picture of what we actually mean and want to look at and create a question. Right. That people can grapple with.

Yeah. So I think there's an opportunity in the header, which is the way I did it in my organization. I said, look, the team, the customers and the ownership needs to learn the header. This is our way of talking about these parts of the business. So for us, if I want to talk about how we treat our people, we'd start talking about people matter. I want to start talking about being a good leader, inspiring the team or the team inspiring each other. We're going to talk about inspiring leadership. And so there's a lot of tone there. But to your point, the next part that I think is really important, and some people call this core value principles, I call it a descriptive is each one of those values should have a four to six sentences that are fully baked to say what does that mean in our organization? So to your point, integrity is a good one. Because people, what might be integrity to you may not be integrity to me. Right. I might have a different perspective on it and it might be slightly different. And what I learned early on was you want to be really explicit. So that that morning when I was sitting in Cambridge right after I graduated Bog, when I figured out the new core values for twin capital, do work lives, then break the box. Wow. Everyone do work is work hard. Right. Lives then is around balance. Break the box is innovation and wow, everyone is excellence. But what I did then was, and I had no methodology around design. I just made them simple and I meant them meaningful and I made them in the tone of the company. But I put together like six to eight bullet points around what does this look like when it's alive and well in the organization. And as I learned more and more, I said, no, you need to make that eight's too much. Pick six things. Four to six sentences. You want a paragraph that says what does this look like in the organization? You can go deeper and have a principles document. We do policy and procedure documents. That's the next layer down. But that four to six sentence paragraph, what I started to figure out was if you spend a lot of time going through a process and I created a process for this that I can say that in our company, people matter looks like this. In our company, inspiring leadership looks like this. In our company, strength of character looks like this. And in our company, rock solid service, it looks like this. And it's non negotiable and it's not up for interpretation. That's what those four to six sentences mean. It gives you the essence of what it looks like when it's alive and well in the organization. And when I started doing that, I learned something else. And what I learned was I created what I call the number one strongest thing you can get from your core values besides invisible scale is you now have a decision making engine for the organization. And I started testing it. Every time we'd have a tough situation, I would grab my business partners and I'd say, let's go read the core values. And so we'd say people matter. And then we'd read the descriptive for the fortis extensions descriptive for people matter. We'd read inspiring leadership. We'd restraint the character, we'd read rock solid service, we'd read the descriptives. And I tell you this, in seven years, I never had one decision that the core values did not tell me the answer. I will tell you this as well. There was a lot of times I did not like the answer it gave me.

That's so true. I like what you said and I want to reinforce it because there was a company I did, I didn't do a lot of work at this company, but I'm still very much friends with some of the ownership there. Anyway, they had about 75 people at the time. A new COO and I started to do some sessions with their team. The COO complains to me, she's like, I'm exhausted. Every day I have to deal with one question after another. And it seems like nobody can think for themselves. So we did some unpacking work with the team and that kind of thing. And we discovered one, there was very little distributed accountability. So while there's 75 people, a lot of helpers, nobody owned anything. So that's one aspect. But then nobody knew how to act or what to do, even if they did own it because they hadn't taught and weren't using values in the same way. So I said, instead of answering their questions and removing their responsibility for them, now remind them that they're owners of this thing, that they're accountable for it. And then ask them a question, which value applies? What do you see? How would you use that? What does that mean to you? Right? Just lead a little dialogue and have them solve the problem. And sure enough, in no time at all, her volume of questions being asked during the day was gone. And now in the daily huddles it was like, well, I did this yesterday, doing that. And people would call each other out like, oh yeah, I forget the values now for that company. But like, you know, that matters or whatever. And it was brilliant, right? Total shift.

Well, so what you're describing is what I call is what I said earlier, that's they successfully, through your coaching, made their values the language of the organization and created invisible scale. People quit asking questions because the core values provided the answer and they had the right people there to follow up on that. So that is, that is this is where I think that there needs to be a paradigm shift and that's what the book advocates for, is that when you design. So again, my process is, there's a five step process is discovery, which is, that's Vern's and you know, Collins process. Right. So there's a discovery process. But I think the design process is super, super important. You've got to design them for use in the organization. And I built a really robust design waterfall. And how do you design these for use in the organization? Because I really want them to be used. I want them to have high utility value in the organization for the reasons you just mentioned. Because when that happens, this really cool thing happens next, they become sticky and they become viral in the organization. And when that happens, I now have a tool that creates invisible scale because it's the language of the organization. And so that was the aha moment I had when I went from 30 to 300 with no growing pains. I was like, what the hell just happened here? And I realized I had created a language in my organization and my world changed when that happened. I looked at core values and in a new way before. I looked at them as like this really cool cultural asset to build a great company, which they are. But I hadn't thought of them as the language of the organization until then. And then I Started to do things like you're talking about. Okay, well, when we run our weekly execution meeting, what. When we talk about the projects we're working on or the tasks we're working on, what core value do they attach to? And then we can have a robust discussion. When we do our weekly pulse check messaging that goes out, I want them to share core value stories. Who lived one of the core values? What core value was it? What happened and why? And then we shared that with the entire team. So I started coming at it from a different angle, and it was to promote it and to reinforce it and to drip on it so that the ether in the air had the core values everywhere, because I knew it was going to create more efficiency, more scale, more productivity, more engagement. And when all that happens, you don't have to be a rocket scientist to realize that that equals more profit.

Yeah, that's really, really great. And it does make such an enormous difference. It helps to differentiate and set you apart. It's funny, when we start off with these things, right, you're ending up with that. When I have folks in our accelerator community, a lot of times, the exercise that we do for discovery is a struggle for some of them because they don't have a lot of people. So I usually just ask them, who would you love to hire and who would you hate to hire? And if you pick a bunch of those names, unlike the mission to Mars exercise, you take the qualities of the people you'd love to hire, and then you take the opposite of the qualities of the people you would be loathe to hire. I can think of people that I like them socially, they're friends, even people I really admired in past companies, but in this environment, in this business, I would not want them. I'm like, why is that? What is that about them? So the opposite of that value is my actual operating value for the business. Yeah.

So in the book, I talk about that because I use that for descriptive building, because you're trying to make it again. You're trying to use it for decision making. And I call it the best team member rule and never again. So to your point, who's the best. Who's the best person I ever worked with? It could be alumni, it could be people from a past job. I want. I want to. When I read the core value, it's gotta. I got. It's gotta make me think of that person because I wish I had an army of people like that. Right. And on the inverse of that is I want to test the value so that Never again. If it's someone I never would want to work with again, I usually tell people, make a list of the top three people you've ever worked with. Make a list of the top three people you would never work with again and figure out why. And that'll give you some insight into what the core values need to be and what needs to be in the descriptives so that you can use those as a tool for decision making and for recruiting and for termination when you need to. And that's been. That served me really well. I mean. I mean, I'm not going to name names, but there's definitely. If you read TMS core values or Twin Capital core values, there's people baked into the. There's human beings baked into those descriptives.

Right. And when you think about real people, you start to think about things that are different than the generic words of integrity, teamwork, communication value. Like those kinds of things.

Yeah.

Excellence.

Well, it's funny, like, I did this workshop at Southern Methodist University, and I did it with a bunch of student athletes, and one of our. One of our friends at Gathering Titans invited me to come do this. So it was a bunch of student athletes, and for fun, I was like, you know, I'm going to do an exercise with them. I'm going to pool their entire football schedule for the next year, and I'm going to put up all the core values of all the universities they're playing against, and I'm going to throw theirs in there, too, and see if they can guess the core values of their school. So I go through and I told them, I said, okay, you guys, it's called Name that Core Value or Name that University. And so I show them the first four, and it's like Central Florida University, University of Central Florida. And the second one is like, you know, University of Dallas or something. The third one, they couldn't guess it was theirs. And the funny part about it was they all sounded exactly the same. And so I think one of the biggest things I see companies do is I think that they just, to your point, pick these generic core values, and then those might be meaningful in the sense that they do those things, but they don't put the thought into it. And so my issue with that is if you have the ability to take this asset, which in my opinion is probably the strongest asset you have in your company to affect behavior. By the way, do you know how many decisions we make in a daily basis as a human being? Just. Do you have any idea what that number is?

I have Any clue?

I looked it up. I looked it up. It's 35,000 decisions a day we make. And so when we're. We make about 2,200 an hour because we sleep for, call it six hours, right? So if someone's working for you and they're working eight hours, call it, and they're making 2200 decisions during that hour, that's like 17, 18,000 decisions they're making. And let's say you have a hundred of those people. I mean, now you're in like the millions, right, of decisions that are being made on a daily basis in your environment. And you can't tell me if you have misalignment around that decision making, it's not going to affect your business. And so my belief is you have this asset that tells people what the expectations are and gives them a compass for decision making. And if you hold them accountable to that compass, which is the core values, then you actually have a say, at least some seat at the table when those 18,000 decisions are being made during the eight hours your team is in the office with you or wherever they're working from. And so I look at that and I'm like, holy smokes. Like, that is super valuable. That is going to make you or break you when it comes to competing with the competition. If I have a team of people whose 18,000 decisions are much more aligned than your team, and we're competing against each other, all bets are off. I'm going to crush you. And so for me, it was really looking at this mathematically. And I went so far as to start actually measuring the ROI on the core values. I do a quarterly assessment in the company. We do the Q12 from Gallup. We do ENPS, we do a bunch of verbatim questions like, what should we start, stop and continue in the company? And then I built my own tool which was rate the core values on a scale of 1 to 5. Strongly agree, all the way to strongly disagree. If they're alive and well in the organization, they do it for the organization, they do it for the managers. And I start to find holes in the organization because it's an anonymous survey. And I'm telling you, when our Q12 drops below 4.00 in any one of the 12 questions, and I start digging into the department and the location of that problem. I was doing this with almost 1000 employees. I could show I'm not a details guy at all. I'm the visionary. My partners are the integrators, right? And I go up to Them I'd say, hey, is there an issue in our post closing QC department in Dallas, in the remote part of our Dallas arm? He's like, yeah, we're having total issues with that manager. I said, yeah, they're one. Because one of the things we asked for is do you conduct one on ones? Do you have weekly meetings with your team? And I said yeah, they're weekly. They're off by the baseline on their 1 on ones by 20 basis points compared to the other managers. And when I see their Q12 scores, they've dropped in these three areas by more than 40 basis points. And lo and behold, their KPIs were off almost identically to these scores. And so my partner who's this guy's an engineer. This guy's a total left brainer. This is a guy that thought this was total fluff when I started doing it. And by the end he's the biggest advocate there is for this work. He's like, this is a game changer. You want to supercharge execution in your company, do all this stuff so.

Because it really drives it. And I'll highlight another negative example. I started coaching company. It didn't last long because the guy had read Scaling Up. He was a total fanny. He hadn't come through some of our regular circles of referral, but he was enamored of the whole thing. And we went through the beginning stopped the foundational work of figuring out your values and that kind of thing. And of course like most of my teams, it's done at like an off site location. Right. I hadn't visited his office yet. So they have this whole thing and he's really. And he has all this rich stuff. He's very passionate. But then about three, four months in or whatever, I'm at their office and I'm having them and I forget why exactly. Now I was to look at some of the processes or that kind of thing. And I like to visit offices and inspect things in practice because sometimes they'll be like oh, this habit or this thing is tough. So if I see it in place I can call out what they might have trouble pointing to. So there I am, I'm looking around the office and I realize this office doesn't look anything like I expected it to look from their behavior and his self reported values in the office.

So was it how so how did.

It themselves as very cutting edge leading, high quality, premium service kind of a business, a kind of professional services firm. When I looked around the environment I saw things. Everything's placed In a kind of a haphazard way. People's jobs are kind of unclear. Everything was expedient. And what I realized is in probing a little bit differently, they weren't that like cutting edge premium thing that they thought they were. They were the volume production expedient, scrappy. If you develop something kind of cool in one of the place and now you need to just volume somewhere for cheap. They were your people. Not quite as cheap, maybe as offshoring it from here because it's San Francisco based company, but like a total disconnect. And then I look closer at the CEO and I'm like, oh, this is a guy who doesn't tuck in his shirt or comb his hair. And he's talking about how he's like, and I don't mean like, you know, intentionally he's cool so he doesn't tuck in his shirt. I mean he like half tucks it in but he doesn't ever do a complete job with it. Everything just sort of kind of halfway like oh, you're just like learning stuff out. That's your thing is high energy, high volume. And you're just going to move everything around to suit the next opportunity. And when I started to work with that, we didn't see eye to eye. So that was ended the relationship. But it's fine because that is not somebody who should be representative of our work. So it really was a great example of like the flip side there. And if you don't want to do that, if you write down values that you wish you were someday and aren't even close to, that's not a value, that's an aspiration. That might be a multi year initiative, but it is not a value.

Yeah, you can't. Values should not be aspirational. I do values with people individually and so I have a funny story to tell about my wife. And so I was, I've been trying to build like this engine to help people determine their core values. And I was kind of playing with some of my thought process on how it works. So I built this sheet, this worksheet and I give it to my wife and said hey, you do this. And actually I built a survey. And so she does it and I get her values from it. It's like I don't know, 60 or 70 questions or something and, and I get it and says her number one core value was decisiveness. I love my wife, but she's the least decisive person I know. And I said are you joking me? And she's like no. And I'm Like I said, babe, values are not aspirational. You, they are what you're the least like, you're the opposite end of this factor of decisive. And so I say that because it's funny that she did it, but companies do it too. And no, they're not aspirational. You are what you are and you need to own it. If you own it and you go and make it real, like that guy you're talking about that have the disheveled look who thought he was cutting edge, I mean, that just might be a low EQ or something. But let's just say, you know, let's just say that he owned his sloppiness and figured out a way to make it, you know, more monetizable. Like the way I look at it is you are what you are. And there's, you know, there's plenty of things out there to like. I'm not an organized guy, but I believe in strength finder and I bring in people that compliment me to make sure that I stay organized so I can do what makes me good. But when I look at organizations, I say, look, own what you are. Own it, celebrate it, love it. Don't, don't, don't apologize for it, be it. Because what will happen is, is you're going to get people that don't believe what you don't believe to self select out, they'll leave. And the people that like love it, they will refer people just like them. You will have an army of people that believe the same things, that are fighting for the same cause. And that's when you start to get organizational efficiency and that's when you start to get increased productivity. And that's when you start to get this business that is doing things better than the competition because you have a synergistic result happening. And I look at all that and I say, that's the organization I want to be a part of and I want to do it at scale. But in order to do it at scale, you got to start to build systems around that stuff. So the book starts to cover some of the things you were talking about, which is, well, how do you productize the values? And we do stuff like I call core value advertising. I mean, you go into my office and it is wall to wall core values. We have core value mascots, we have core value symbols. People wearing core value swag, they're wearing company swag, mascot swag. I swear it's like going to. And you'll appreciate this. It's like going to a Raiders game at my company, it is like, scary how into all the swag and stuff people are because we celebrate who we are and that it helps to again, reinforce that ether in the air of the language, the core values. And when you do, when you start to create an environment like that, when someone walks in who's not, who's new to the organization, and I left out a part that's really important is how do you. I have a core value onboarding. I want to steep them in there that I'm going to recruit to the core values. I'm going to onboard with the core values and then they're going to live the core values. I'm going to hold them accountable to the core values and I'm going to do it through their KPIs, I'm going to do it through the strategy. I'm going to do it through the execution. I'm going to do it at our quarterly strategics. One of the things we do at our quarterly strategics is we do a core value rating at the executive level on a scale 1 to 10, how well did we live X, Y and Z core value this past quarter? And if you scored us under a nine, say Y. And we have. That's our icebreaker, by the way, is we rate and talk about our core values for the first hour of our quarterly strategics. And there's some really interesting things that come out of that conversation, you know, when you're held accountable at that standard. So it's all around accountability. When you build an organization of accountability, you know, I think that that's where the rubber meets the road. And I think that core values tend to be underutilized. People slap them on a piece of paper, put them away, document them, bust them out for, you know, onboarding, to roll their phone out, their W9 or whatever, you know, and they're 1040. And it's, it's, it's not. I'm talking tax forms right now, but they're W2s, right? They're filling that W4 out and they're going through the typical HR process. And then, oh, they just so happen to get the employee handbook and then there's a page about core values in there and maybe there a couple posters on the wall or something. And then they wonder why it's not effective.

I think that's the thing. It's like the combination of all those things I hear you saying, from swag to training to discussion to reinforcement. When I came in to work with my wife all those years ago and for years I worked with my wife and I came in as the CEO for a business that she founded that was hers. And one of the first things that I did was take and update our core values. She'd largely created my tune them up a little bit, added a bhag. I created a little bit more about our vision for the future and some things like that into this. Essentially a manifesto. And then I started reading it every day. So for a while I read it myself at the beginning of the meeting and then I would just ask two random people, what did you notice? What did you hear? How is that relevant? Right. This was like less than two minute conversation every day. One of the first things that happened fairly quickly is two of her former leadership team got really fed up with me and thought it was all bullshit and left. And you know, it drove up for a while. I really tried to bring him along and I probably should have let him go earlier. But what drove it up was this whole notion of a company deeply rooted in core values with a strong values based culture felt like a cult. And that's exactly what I was out to create. I wanted to create my own damn culture cult. A cult that represented things we wanted, that felt like not the give your money up and dress funny and drink the kool aid and say goodbye to the cult, the good cult. A company like Apple or something that has passion and its own look and feel and that kind of thing that you talked about. So we started reading and reflecting on the manifesto at the beginning of our daily huddles was one of the key ways to do it. All of the companies that I've worked with now have put something like that. Maybe not exactly that practice, but something like that at the beginning of their daily huddles as one of the many things they do to do it. And I think that's one of the cool things that's in your book, in your process, is how can you bring, how can you use these things now, bring them to life so that there's no mistake. It. I'll never forget after a period of time that we went through a deep challenge when somebody couldn't find the little sheet with the manifesto and the core values. And. And then somebody is like, there's this Indian woman, she's like, oh, come on. And she like, she just said them all. And then everybody started to chant along with her. And we realized everybody knew them by heart. They could repeat them word for word.

Yeah, it's deeply ingrained, right? Yeah. That's the language of the organization. And I mean I did this exercise to your point where, because I'm always looking for data points to kind of validate my theories that I've created something. And so I started pulling. We have 562 Glassdoor reviews at our company. So I went and I searched through all 562 of them to see how many times did they reference a core value. And it was interesting. 139 of them referenced one of the core values. So it was about like, I think that was like 27%. I was like, oh, that's pretty good. One in four. I mean a specific core value, if not multiple. And then 11 of them were negative. These are all positive, positive five star reviews. And there was 10 one star reviews that also referenced the core value. And you would think I'd be upset and I was actually happy. I said that meant that they were trying to weaponize the core values because they knew it was meaningful to the organization. And it meant even, even if they didn't love the company, that they were still willing to use the language of their organization, even to talk negatively about the company. And I was okay with that because it meant that I succeeded in my job of making it the, the language of the organization. Now the flip side of that is you got to be accountable to living up to those things or attempting to. And, and I also told people, I said, listen, this is not a panacea. This is not utopia like core values. You know, we're humans, we make mistakes. It gives us a place to come back to center when we, when we make a mistake. There are obviously core value breaches that are inexcusable. But when you start to run a business that way, that's when the magic happens. And we saw it at TMS. The company went from 300 to almost a thousand people in the following 18 months after we had our first leg of growth. And that's fertile grounds for experimentation with this type of stuff.

It's outstanding. The book Core Value Equation, the website core value equation.com, easy to find all of it. It's on Amazon now, right?

Yeah. So it's just we launched September 14th. It's actually the core value equation. So I want to make sure people don't get that off. But so it's the core value equation.com we launch publicly September 14th. Pre sales will probably be live here and then in sometime in June. So you'll be able to go to Amazon or to the website and buy it. A pre sale and we'll be on audible and all ebooks and all that good stuff. So we have a really big launch coming and it's, we're, we're really excited about what's, what's going to happen with the book.

So I got the preview of it.

You did? You got the preview promo?

The preview promo. So, but they can go there now and they can begin to see you've got a lot of stuff. They're already available for people to learn more and dig into some of your thinking and stuff on the subject of Core Values.

Yeah, you could go to the corevalueequation.com or you can go to therealdarius.com awesome.

Well, Darius, thanks for coming on the show and talking with us at Core Values, a subject we'll never get tired of. Obviously Passion, we burn through 50 minutes in no time at all. So thanks again everyone. We'll talk to you again next week.

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