Mike Chaput: Core Values Are Not Wall Art

[00:00:00] Mike Chaput. The year that we were trying to do the Core Values, we had read this book called Fish! It was about these fishmongers in Seattle who loved their work in spite of the fact that it was cold and it was stinky and it was these slimy fish and like an objectively not very good job, but they were having a blast doing it.

[00:00:19] We had this rubber chicken and if somebody did something stupid at a customer or they made a technical mistake or whatever, then the rubber chicken would go hang on their cubicle so the next time they show back up in the office they had the rubber chicken. People were afraid to make mistakes, they were afraid to be embarrassed. Not just the rubber chicken but just in general because we would make fun of each other. Part of the culture was to laugh. Respect has to be here and humor has to be there. You can't have a laugh at somebody's expense.

[00:00:47] Mike Chaput. Exactly. That's going to hold your culture back.

[00:00:53] Mike Chaput. Welcome to Sales and Cigars, the podcast for entrepreneurs where the only smoke we blow is cigar smoke. I'm your host Walter Crosby with Helix Sales Development. I'm excited about today's episode with Mike Chaput from Insight. This is the continuation or the second episode that he and I recorded about core values and culture. If you missed that first episode, go back and catch it because this episode builds on that one. The core topic again is how to structure

[00:01:19] values so you know they're clear and live by everyone in the organization. The whole team understands it. The whole team gets it, lives it, and it's memorable.

[00:01:29] The third episode is about operationalizing the values into your business, guiding business decisions, retention of your employees, and helping you build the growth. Here's the thing. You want to stay tuned for that, how to get that episode. So go grab a cigar, grab a cocktail, and strap in for another educational episode of Sales and Cigars. Thanks.

[00:02:07] I mean, that's a great segue or great setup for looking at our core values and making sure that, well, do the core values represent the CEO? Do they represent the vision of the company? Are those separate? How do we, somebody that has a set of core values, how do they start to think about that? And is it mine? Is it the company? Is it my vision?

[00:02:33] Yeah. So I have some super strong opinions. You know, you and I had a preparatory conversation about this. And, you know, so I'll take you all the way back. So I first read about core values in like early 2000s, like shortly after I became a CEO.

[00:02:49] One of the business leaders that I quickly got on to was Jim Collins and Jim Collins and Jerry Poros wrote this book called Built to Last. And that was the first time they, they analyzed these companies who they picked them from the market based on really long-term, better than average, you know, portfolio stock returns.

[00:03:08] And what they found was that these companies all had these core values. And so now everybody in the world knows about core values. You can't do EOS or one page business plan without setting core values.

[00:03:20] And people are still running on kind of the, some of the, some of the research that Collins and Poros did about what core values are, what they should be. And while I, I'm a huge fan of core values, I'll just say externalizing your, your values, your behavioral norms, you need to externalize them. And so I'm a big fan of it.

[00:03:41] I did some things wrong along the way that might be useful to your audience to hear about because maybe they'll see themselves and some of the things that I, I did wrong along the way. So just to take you back my, my three business partners, the founders of insight wanted to do core values, but we had a really, really hard time figuring them out.

[00:04:07] Now at that time we were running the, the one page business plan by Vern Harnish and his book, Rockefeller, Rockefeller habits. I'm out here in the San Francisco Bay area and I was part of EO San Francisco and Vern came and talked and he gave me a signed copy of his book. And I, you know, I read it and there was an implementation guide and I even remember the tool, the tool was something called the life raft exercise.

[00:04:34] I don't endorse this, but I'm going to tell people about it so that they understand what we did and how we came up with some of the ideas. The life raft exercise was something like brainstorm your top performers past and present, brainstorm their attributes, and then see if you can find some patterns in their attributes and circle those attributes. And then use those as the basis to determine your, your core values. And at the time this wasn't part of Vern's instruction, but at the time we were reading lots of books.

[00:05:03] And I remember the year that we were trying to do the core values, we had read this book called fish exclamation. It was about these fishmongers and in Seattle who, who loved their work in spite of the fact that it was cold and it was stinky. And it was, you know, it was a slimy fish and it was like, it was a genuine, like an objectively not very good job, but they were having a blast doing it. And one of their values was choose your attitude and have a sense of humor or something like that.

[00:05:33] We like this. And we noticed that the core, one of the core attributes of insight employee or the insight high performers was that they had a great sense of humor, including the, including the four founders. And so we came up with this core value that was have a sense of humor and take enjoyment from the day. Now your, your listeners hear that, and they probably sound think to themselves, just like we did. We had that, by the way, I want to say for like eight, nine, 10 years, that was the core value. I mean, it was a long time it ran.

[00:06:02] And you're thinking that even now, as I say it, it sounds super harmless. Like it sounds actually like a good culture, like a place I might even want to work. People who enjoy their day and who have a sense of humor. Um, and so like, but encoded in that was, uh, was a seed of what was holding our company back. And I'm going to illustrate what it was, uh, to your audience and maybe it'll resonate with them.

[00:06:28] So one of the things that emerged out of this take enjoyment from the day and have a sense of humor was a rubber chicken. Which sounds harmless enough, but we had this rubber chicken. And if somebody did something stupid at a customer or they made a technical mistake or they, or they, whatever, then the rubber chicken would go hang on their cubicle. So the next time they show back up in the office, they had the rubber chicken. And, um, again, it sounds like we're just trying to have a good time and, and not take things too seriously.

[00:06:57] Um, but it wasn't, I didn't, I want to say it was in, uh, 2009 or 2010 when I was in business school, I did operations class with a, with a lady named Sarah Beckman at UC Berkeley. And she turned me on to, um, the, the, the school of lean. So this, this is a, and there was a thought leader, a guy named Edwards Deming, who came up with his very famous 14 points of management. And the seventh point was something like drive fear out of the workplace.

[00:07:26] And the first time I read it, it, it, it didn't make that much sense. But then I started reading, you know, James Womack and, and a whole bunch of other, uh, lean thinking, um, the Toyota way to service leadership, like all these lean books. And all of a sudden I started to see what was happening in our culture and what was holding us back. And it was something like people were afraid to make mistakes. They were afraid to be embarrassed, not just the rubber chicken, but just in generally, because we would make fun of each other.

[00:07:55] It was a part of the culture was to, was to laugh. And so sometimes we would laugh by making fun of each other. Um, and you know, we were trying to, let's say not take each other too seriously, but what it created was this undercurrent of trying to not get caught making a mistake. And what lean principles teach us is that in order for managers to, to make great high quality business systems, you need to be able to see the air.

[00:08:22] You know, there's a huge point where, you know, they had workers pull the and on court and stop the production line, which was, which was an absolute no, no. And everywhere, everywhere else in manufacturing was to stop the production line, but they weren't afraid to do it because they had no fear of retribution that they were going to get blamed. There was no rubber chicken. There was no rubber chicken. There was no, like people just came out. It was like, what's happening. They, they, they assumed it was a process problem always before it was a people problem. There was, um, and their core value was respect, not sense of humor.

[00:08:53] And then I was like, oh, it's okay to have a sense of humor, but it can't, it's gotta be in its proper place. Respect has to be here and humor has to be there. Like you can't have a laugh at somebody's expense. Exactly. It's that that's going to create, that's going to hold your culture back. And so now with, with this understanding that this, this all happened to me, there, there was something else I had to get over.

[00:09:21] So Jim Collins, because his research going all the way back to the, to the, to the godfather of, of core values, he had made a claim that core value should last the lifetime of a leader. And what do I know? Right? Like I'm not Jim Collins. I'm not a Stanford PhD. I didn't research. I didn't write six bestselling business books. So, you know, he said it. So I just assumed like, once you set the core values, they have to remain for the lifetime of the leader.

[00:09:46] And by the way, I kind of wanted to believe that because they were a real hassle to make, you know, four of us, you know, they were like beating each other up. Like it was impossible to do it. I want to say it took us years to align on them. And we finally had alignment on it. We told everybody he had all these like biases. It's this escalation. No, I didn't want, nobody wanted to come back. And like, we've been pounding the wall on these values, really trying to get everybody to buy them in.

[00:10:11] And all of a sudden we're going to go back and we're going to tell them it's a new value and like whipsaw everybody and like go back and negotiate with leadership. Like I wanted no part of trying to reorganize the values. But I also knew that these values weren't going to get us where we needed to go. And it was, it was that certainty that I, that I was like, okay, core values and I'll just, you know, core values, or you just think of it as a, the culture is a bigger thing.

[00:10:39] And core values are a kind of a distillation of your culture. They're a way of communicating what the culture is. So core values or culture is an instrument to execute strategy at its core. And if your strategy is to be the highest quality MSP in the world, which is what our strategy was, we just wanted to be ultra high quality.

[00:11:03] To take your operating engine, which is your, your, your culture off the table as something that you can pivot is like, is like running a marathon with a handcuffs or something like that. It's like, you could still do it, but you make it a hundred times harder and you're not really going to win with somebody who doesn't have handcuffs. The, the, the advice I, I really hope to communicate to your, your viewership is your core values.

[00:11:31] Probably you didn't get them right. The first time you didn't get them. Perfect. The first time you did them, there's probably a lot of room for improvement and there's no shame whatsoever in pivoting your culture. It's just like pivoting your strategy. You need to work those two things together. Little pivots to your strategy, little pivots to your culture, little pivots to your strategy. Until they get aligned. Like, and it was always there by the way, in the Jim Collins data. So here's how, here's how, here's what I mean by it was always there.

[00:12:01] If you, if you go back and you reread that, that book, you remember that one of the, one of the, one of the companies that was there was Philip Morris, a big tobacco company. Which I always thought was funny, right? Because they're not idealistic at all. At least the way I'm idealistic. Like their idealism was some kind of hedonic life is meant to be lived. A short life well-lived is better than a long life. Like they had a bunch of justifications for their, for selling cancer to people.

[00:12:30] But, but, uh, so they were idealistic in this weird, in this weird way I don't align with, but their core values were some kind of hedonic, hedonistic, hedonistic values that aligned with their business strategy. So this is the key, the key point, right? All the values of the companies that were built to last their values weren't random. Like Collins was big. He was surprised. He was like, we thought that they would all have, you know, some of the same values.

[00:12:56] Like they would all, like, we thought it would be like innovation would be like a core value or, or integrity would be a core value to all of them. And he's like, what we found was they were all over the place and we didn't figure out the pattern. Well, the pattern he missed was they were all aligned with their strategy, which is a huge, it's a huge miss. If you really think about it, it's a huge mess. Like, like if you could take Philip Morris's core values and overlay them onto a hospital or vice versa.

[00:13:22] Like if you took the core values of a hospital and gave them to Philip Morris, Philip Morris would fail. Like everybody would revolt and you know, they, they, they would, they would have failed as a company. And so your core values have to be aligned with your business strategy. And the degree that they're not like mine to be the highest quality it managed services provider on the planet. We needed to drive fear out of the workplace. Like Edwards Deming figured out back in the forties.

[00:13:48] And we weren't going to do that where people were scared of being embarrassed at work with, with something as mundane as a rubber chicken. Respect had to be part of our core value stack. It had to be one of the highest elements of, of our value stack. Now I want to just point out here for a second to address the first question you asked me, should they be a derivative of the leader? My answer to that is absolutely not.

[00:14:12] I am prone to be provoked and disrespectful, just like every other human being. Like I didn't live my life as the model of respect. Like, that's not how I live my life. Um, you know, I would hate it if somebody had a camera of me at the airport. The one time when I showed up and the, and the, the plane was still on the, uh, on the ground, but they gave away my seat to somebody. And I probably lost my mind. It's like, you'd be like, this is the leader who has the core value of respect.

[00:14:41] Like, you know, well, the reality is I had to change to accommodate the business strategy and the culture that our company needed. I had to model submission to the behavioral norms. Just like everybody else. Just like everybody else. It's not about making it easier for me to be me. It's about making it easier for the team to win. And that means adaptation from everybody in your company. But most importantly, it means adaptation from you.

[00:15:10] You, it's, in fact, in some real sense, it's better if it doesn't quite fully fit your personality, because then you can model adaptation. Like, like I, when I show up to meetings, there's no way I'm going to disrespect somebody. Not, there's not a, there's not a chance you're going to catch me doing that because one of our core values is respect and connect. And so it holds me accountable. And the truth is, I really don't want to be disrespectful. When I act disrespectful, it's a, it's more of a provocation and more like it, it's more like the,

[00:15:40] it's more like the worst parts of myself. So it's a, it's a reaction to a situation that we kind of temporarily lose our shit for a minute. And then we got to, we got to recognize it, but that's not our goal. That, but we got to think about it as a leader. Absolutely. And so, so, so a couple, a couple of things that there, there are, are a takeaway.

[00:16:01] One is your, your, your values need to be the behavioral norms that are going to make your strategy come alive. Not the, and they can't be, if they're going to be that they can't be what's just natural to the leader. Like what's natural to leader can not possibly cover all the behavioral norms. That's going to be great for you to execute your strategy is that would just be an incredible surprise, right?

[00:16:26] Like that coincidence, but they, they, they shouldn't be that they should be, they should be strategically hand chosen such that. But if people behave that way, then your strategy will manifest and then you as a leader adapt to it. And the second piece is you need to be able to pivot and explore the domain of culture and the domain of strategy simultaneously until the two come together in some kind of harmony. It's like, you know, it's like a singing voice.

[00:16:54] Like if one's pitch is off and the other pitch is here and it's like, but you tune them up and you kind of get them. And all of a sudden they're like, oh yeah, now those two things sound great. The strategy and an example would be like, you know, the, the Ritz Carlton. I was actually at, believe it or not. Um, I was at Tahoe last week and I went to the Ritz Carlton at, um, at North star for dinner. And, uh, the, they have a slogan called ladies and gentlemen serving ladies and gentlemen.

[00:17:22] And that kind of embodies the, the Ritz Carlton ethos. And that's that core value ethos. Wouldn't work for Comcast or PG and E. No, it wouldn't. You really have to have the, the right. Cultural ethos for the right. Strategic elements. Like, you know, and, and so. So you need to be able to play with those two things simultaneously.

[00:17:49] You can't pivot one without the other and you can't pivot the other without the one. And you need to do them together. And it's okay to go back and rethink these. And, and you can't make wholesale changes just because like, oh shit, we got to fix this whole thing. It, you, you made this little, you know, for people listening, kind of ratcheting your hands left and right up and up the scale to get your core values to align with your strategy or your

[00:18:14] strategy to align with your core values, depending upon where, where, where you're, where you're deficient. But it's, it's a constant thing that you're not Moses coming down the mountain with the, with the tablets, right? Those things can be evaluated and they need to be evaluated, but at one point you get them. And unless your strategy changes for, for some significant reason, your, your core values,

[00:18:42] once they're aligned, they're aligned and everybody has to align to those, both the strategy and the core values. And if they're not a fit, then we need to make a decision about that particular individual. Okay. So there's a couple other elements to, to core values I think are important to, if, if you, if you're interested. Sure. One of the big things that people get wrong, I see it all the time with core values.

[00:19:11] It's, and it's so simple, but I ask people, cause I love core values. I love culture. And so if I get into conversations with people, I ask them and they're like, oh, they struggle to kind of remember what they are and they're, they get them kind of, but not exact. And I'm just like, you're the CEO, man. Like if you don't know these things exact and nobody else knows them at all. Like it's really, really, really basic, but like, they've got to be easy to remember. They have to be easy to remember.

[00:19:39] Now the problem with being easy to remember is that they're not going to be clear. They're not going to be compelling. They're not going to be rich and deep. So you got these competing forces that are, that are, that you, you have as it relates to externalizing your culture, but there's a solution to it. And it's not that complicated. So at insight, the first element of the core values are four letters. Okay. RSVP.

[00:20:05] Everybody watching the show is going to remember that now forever because it's already an acronym. It plugs into something. They already know it's super easy. Like nobody at insight doesn't know RSVP it's everywhere. That's the most distilled. The next level of distillation is R stands for respect and connect. Okay. I kind of know what that means. Like we want to connect and we respect. It's not super deep yet, but it's like, it's a little more clear. S stands for servant's heart.

[00:20:30] Again, I kind of get, I kind of get that there's a service orientation at your company, but it's not super clear yet. P stands for progress over comfort. Again, it's starting to be a little more clear. You're kind of getting, it's like, oh, it's not all about staying in your comfort zone. We're going to try to do some, maybe some hard things or whatever. And then the V I should set them out of order. The V stands for value. So that's like a verb. We want people to place value in. It gets clear later. Creating customer value.

[00:20:59] So those are the four elements. So now you've got two layers of distillations, but below each one of those things, there are four or five bullets that are, that are, we believe statements that make them even more clear. So I'll do servant's heart because I think this one is particularly compelling. So servant's heart, the first bullet under there says, we believe that a leader's purpose is to serve their team so that team members can serve the customer and each other. Okay. Top to bottom.

[00:21:24] So now, now you're starting to get an understanding that servant's heart isn't just about, about the, the people who are doing the work to the customer that there's, it starts at the highest rank with a leader and cascades down. But that bullet has a whole book. The book is called the motive and it's by Patrick Lencioni. He's, he's, he's awesome. By the way, if you don't know, Pat, he's got about seven or eight awesome books. You can read them all, but the motive is great.

[00:21:52] And basically what it does is it is it's a story form and it explains why the motive of the leader is so important. And it's, it's an illustrative of servant leadership. So if you want to be a leader at insight, that's part of the canon of literature. So these, these values, even though they start with a letter S there's, there's probably about 50 or 60 books that sit below this, this canon of literature, the Edwards Deming literature.

[00:22:22] The Toyota, the, the, the Toyota way, the lean leadership. There's even things like, um, Carol Dweck's mindset. So in, in progress over comfort, there's a bullet that says we pay attention to our mindset. And you know, that's more of the growth mindset, but it's also, we, we capture that element of the fish. We take joy in doing hard things. So when you, when you actually look at the entirety of the value stack, there's like 20 points and maybe 40 books and they're round too.

[00:22:50] They encompass not just some of the behaviors that we need. They encompass all the behaviors we need to go in and get our vision. And if they don't, then we can tell, how do we tell? So let's say something's not happening the way we want in our company. We have this analytical tool now with which to say, well, what's going on here? People aren't doing the thing that we think they should do. Is it not covered by our values properly?

[00:23:15] Or do we have a problem with people embracing and living out the values? And if it's not covered properly by the values, then we can change the values. We can, we can pivot and add or subtract from the values or change the language. Most of the time it's covered in the values, but maybe we just need to do a better job as leaders explaining what those values mean and how they look like in our organization or, and, or point people to the, to the thought leadership that sits beneath the values, like the foundation, the pillar.

[00:23:44] So, Hey, you know, you need to read this book or you need to read that book, or we need to have this conversation so that you can understand what this really means in practice. And it tells some stories about it. I mean, that's a 5,300 year tradition. And what I mean by that is I'm, I converted to Judaism years and years ago.

[00:24:05] And one of the things, the, the, the, the basic principles is you're not wrong, right? You can question things, but if you go to the rabbi to say, Hey, this doesn't make sense. I don't understand this component. They will give you something to read and then something to talk about, right? So if you distill that down, there was a bumper sticker for, for Judaism, for Christianity would be God said it. I believe it. That's it.

[00:24:35] And for the Jewish bumper sticker, God said it. I believe it. That's it. Now let's talk about it. And you're, you're really making sure you're teaching people and you're giving them the vehicle to, to, to go learn a little bit more and explain it. So yeah, as leaders, we need to make sure they have the tools and the understanding to, to be able to live that out, but it's our responsibility to give it to them.

[00:25:03] So you've created essentially a library of, of ideas that support our SVP, right? It's all there. And you can go back and look at it. Maybe they don't understand this. Maybe they need to look at this book a little further. And now you have something to, to, to, to focus on. And it, there's, there's accountability. There's all of these elements to that.

[00:25:28] Um, but it's really about making sure everybody is aligned on what that means. And if somebody, if somebody misses it, you're not just throwing a rubber chicken at them. You're actually going back and say, maybe we didn't explain this. Well, you know, taking that responsibility. Here's let's, let's, let's talk about this piece of it. Here's something to think a little bit deeper, maybe read this part, right? Or go through it again.

[00:25:56] Cause people need reminding from time to time as well. Right. I mean, that, that happens every day. I love that idea. Cause I have a visual in my head of, you literally have like a room, right? With four walls, with the, all of that in a room with the books and it's all written where people can go in and there's the core value room. That's just how my dumb sales brain works. But you, you have it all there. Yeah.

[00:26:23] So, you know, one of the, one of the things I think about a lot too, and I'll, I'll connect it to what we were talking about here in a second, but it's like, there's an, there's an economic backbone to, you know, to, to, to work into capitalism and the corporate structures and all this stuff and people that it is good and it's bad. So, you know, people will show up because they're paid.

[00:26:50] And, um, and a lot of people misread that is, you know, that's what people want from work. And it's like, well, of course they want that. It's not even that they want it. They need it. Like they can't pay their power or they can't put their kid through, through college. They, you know, they, they can't get food on their table that people need money. Um, and because they need money, they'll show up to crappy jobs. Um, but they don't want crappy jobs. Actually, they need money, but they want a lot more from work. Fulfillment.

[00:27:19] And, and one of the other things that they want from work is community. It's like really, really obvious. Like I don't, I usually don't have to work too hard to convince other leaders that people want community from work. There's, there's, there's other things that they want from work to purpose and meaning and, and, and all these kinds of stuff. But just to say on community, it's like, what make, what's the difference between a team and a collection of individuals or, or worse, a collection of factions?

[00:27:45] And the, I think the answer to that is something like shared principles. Or at the very least you could say a shared goal. And, um, and so it, I think it's actually important to understand why, why, why, why is that the, why is that the basis? So the, the way that we work as human beings is we understand the world in terms of its utility. So we, we have our goal.

[00:28:15] That's where we want to go. And we see what things are and we categorize them as tools and obstacles and friends and foes. So we, we do this the same, we do it with objects and we do it with human beings as well. If that's a person is trying to help me get to where I'm trying to go, they're a friend. If they're in the way from where I'm trying to go, they're a foe. It's like, it's very easy to understand this in sports. Like I know if I'm the quarterback, the line in front of me that the offensive line is my friends, the ones who are trying to sack me, they're my foes.

[00:28:42] Like, um, because we have totally different competing goals. And so the basis for community, which everybody wants in their job is shared principles, a shared target, a shared goal, shared behavioral norms that we all have agreed to. So you can't have, you actually can't get one of the most important things to workers without, without doing this hard work of having a great culture.

[00:29:08] Like you're, you're, it's going to erode to, you know, the, I'll call it the prisoner's dilemmas, just a collection of individuals with competing goals, or everybody is just a stepping stone, an object in their, their own individual path. Once you have everybody aligned towards a shared vision and, and a shared behavioral norms, you start up, you start approximating, you transfer, you transform something like, um, fighting to first, maybe cooperation and then maybe later collaboration.

[00:29:37] And you could disagree about a lot. So long as both people are trying to get to the same spot and both people are willing to submit to the, to the, to the, to the uniting principles of the team that they're a part I have an idea that I'm curious your take on, um, family and team. Um, I, it, it bothers me when I, and it's a red flag when I'm starting to work with, or,

[00:30:07] you know, getting to know a company and they say we're a big family. Um, as opposed to, we have a great team and culture. And I think about it this way, when you're in a family, you're not getting out of the family. You're, you're, you're almost stuck, right? Um, we have to navigate that, all of that, that craziness that's in a family. There's a level of dysfunction in every family.

[00:30:34] It's just a function of whether we're throwing rolls at each other at Thanksgiving or if we're on Jerry Springer, you know, doing terrible things. Um, but a team is aligned based on that, that goal and everybody wants to get there. So you're selected to be on the team. You have a role on the team and you, you contribute to the team to the degree in your role.

[00:30:59] So that simple concept of it happens in politics, it happens in sports, it happens in, in corporate America. But how does that fit into that idea of family and team fit into your, your definition of culture and community? So you, you want, well, you need a hierarchy. Like things are really like people tried this. Like I remember Tony Hsieh tried this like totally flat organization with Zappos and it was a complete disaster.

[00:31:27] Um, and everybody else, but he made it sound so palatable. A bunch of other people tried it. It was a complete disaster. So you, you need hierarchies like the, there's, there's just no way around it that it's, if there were. Like we would have sorted it out. We have, we have millennia of hierarchies. Then it's across all kinds of different domains, including the corporate domain, the government domain. So you need a hierarchy. What you want is for the hierarchy to be formed on the basis of competence.

[00:31:55] So the people who are the most competent are high up on the hierarchy and people who are becoming competent are, are, are at the, are at the lowest rank or they're competent at the spot that they are at the hierarchy. You don't want, you don't want what they call the Peter principle where, where people are promoted to their, to the level where they're incompetent. And then they could just get, they get stuck there. But the other thing you don't want, and everybody already knows this. So this goes, I'm going to address your point directly.

[00:32:21] The other thing you don't want is people who are promoted, not because they're competent, but because of their relationship to the person up on the hierarchy. Whether that's a nepotistic relationship where it's like, it's the child of the, of the person, or whether it's just like, that's who I play baseball with on the weekends. You don't want nepotism or you don't want any decisions to a promotion to be made on anything other than who is the most competent to be, to be there.

[00:32:50] And so when, what people think they, they, they hear the word family and they think that sounds great, but they don't realize that what's really going on in a corporate structure is you're trying to sort out who's the most competent for the role and where should they sit in this hierarchy, this decision hierarchy. And that's not how a family works at all. Like, no, it's not. And we, and we know what, we know what governance looks like in, in kinship.

[00:33:15] It would be something like the medieval, you know, the, the medieval Kings, Dukes and Duchesses. And there's no way anybody could look back and say, that's where we should be. And we should try to go there. And, and they, and they, the fact that we, we've created this, uh, this corporate system that really at least rewards those who, who operate their corporation on competence should be celebrated. We should be trying to revert to something that, that rewards relationship over competence is, is my position.

[00:33:44] So I don't. Ray Dalio, Ray Dalio talks about meritocracy, right? Good. The best idea is the competency that, that all fits into that. It's an idea. It's an ideal, but it's hard to pull off. That's what we're talking about. I think it's like, it's, we're like a big family is one of those things that sounds good. Cause you, because it's not really understood what that means. It means that the relationships are prioritized over, over execution and competence.

[00:34:14] And that's actually a really bad place to work for, for a variety for everybody in, for everybody in that system. It's a, it's, it's not a, it's not a good place to work. Um, number one. So I have a, I have a take that is to Jason, but I think it'll, it'll, it'll hit this before. One time I was asked whether it's better to be loved or feared as a leader. Now I've already gone through the, the, the Deming's point on drive fear out of your workplace.

[00:34:41] So you probably imagine I don't embrace trying to be feared as a leader, but what you might not guess is that I think it's a really bad idea to try to be loved as a leader too. I think both of those are, are errant goals. And to me being loved as a leader is something like the familial thing. And why, well, so if you have a manager who they're really trying to be loved or liked by their team there, what they're ultimately doing is in a very narcissistic way.

[00:35:08] They're using team members to fill their social demands. They're like the Maslow's hierarchy. It's like social acceptance is up there and they're instead of doing what's best for the whole unit and what's best for the company and what's best for the customer. It's a selfish endeavor to be like, I just want to be liked or loved.

[00:35:29] So I'm going to use my team, not to try to get high performance out of them, but to, to achieve this, uh, social acceptance, uh, you know, human need that I have. What, what a great leader should do is connect with people. Like I really understand what, who they are, what they're trying to do. So connection is, is huge. But your R the R in your core value, right?

[00:35:54] That manager, that leader, like, I don't need to be loved or liked to be respected. I need to provide. And that's a bi-directional thing. It is. You've got to be able to earn that. You've got to be able to show that it's something that you just don't get because you're old. Um, in my family, my old man thinks he's deserved respect because he's, you know, the old man. And I'm like, now you, you, you got to earn that.

[00:36:21] And you've done so many things along the way to ratchet that down. It is what it is, right? It's, it's a two-way street. And that's why you don't want to be loved. You don't want to be feared. You want to be respected, which is a two-way street. So if you're, if you are respected, it's going to be because you treat people with respect. And so that's the target. And, and, and if you're respected, uh, and you, then you can remain, you can have that human

[00:36:51] connection and you can adopt the people who work for you's aim. So you can basically say, Hey, you're trying to do this in your career. And I'm going to tell you the uncomfortable things that you need to hear. And you're going to accept them from me. Not because, because, you know, I'm not telling you that as a self-serving manipulation. I'm telling that to help you achieve your aim, as I understand your aim. And so long as our aims are aligned, we can be part of the same team when our aims are disaligned.

[00:37:19] Well, I mean, there's not much to do there. Like you need to go like our, our corporate aim, isn't going to change to, to, to accommodate your individual aim. That's not an alignment. So like, if you don't want to help us get to our goal, uh, that's an unresolvable issue. You're not part of the team. You're, you're, you're something else you're, but you're not a team member. Selfish. So it is both parties can be selfish, right? And you can come back and they can be like, you know what? I was wrong.

[00:37:49] I can't do that because it's only good for me. It doesn't work with the team. So I need to come, come back in this direction. I think of it in salespeople, right? We all are selfish as salespeople because we want to win and because we're competitive, but we can win. It's not a zero sum game, right? I can win and they can win and, and, and the whole team can win and we, we grow together. But it's given them that, that grace of having that definition of like, I'm telling you something

[00:38:18] that is uncomfortable for you to hear, but I'm doing it for the right reason, because you told me you wanted X. And to get that here, you need to behave this way. There's another common mistake. You know, it's like we have a, we have a culture of connection, respect and connect. So, so managers by, by job definition, they're one of the things that they're asked to do at insight is to form a real human connection with the people who work for them.

[00:38:47] Well, we, we believe that's actually important. And again, I was going to mention this, but this was a, this was a principle by Kim Scott and her brilliant book, Radical Candor, where she points out that if you, if you manage somebody, if you hold them accountable, but don't have a connection, she, she calls this bucket obnoxious aggression. And then she, but she says the equal and opposite problem. If you, you know, you love somebody and you have the connection with them, but you don't hold them accountable. It's this ruinous empathy.

[00:39:15] You're not helping them in that, in that vein. This is kind of the back to my point. So we have this culture of connection, but it can, it can make it such that. You know, a manager will be like, I really want to give this person a raise. And it's like, why? And it's like, well, because they have a, they have kids at home and they, and they're saving for something that's idealistic. It's like, that's not a good reason to give them a raise. All you're going to do at some point is you're going to put them upside down in the value that they're creating. And then you're going to put their whole job at risk. Things get tight.

[00:39:44] They're going to be the first on the chopping block because they haven't figured out how to create enough value to be worth what you want to pay them. And then they're going to lose their job entirely. So what you need to do is the harder job as a manager, which is you have to show them how to create enough value that they're worth that raise. Because their, what their personal desires on the home front and their financial issues at the home front aren't a reason to pay them more. They're a reason, but they're, they're not a sustainable or durable reason. And they, and it won't last and it won't make for a great company.

[00:40:14] So the harder job is to be like, you want to make more money. Let me show you how here. There are other people who make more money than you. And potentially you could do those things too. You know, whether it's like here, you could, you could get more technically competent. You could take on more responsibility. You, I could give you some OT hours, maybe if that's like, there's other ways to get people more money, but, but giving them more money because of a personal situation is actually bad for them.

[00:40:41] And it inhibits their, it inhibits their organic growth trajectory as does keeping somebody who's not good for your team. So this is another kind of adjacent point on the family thing. So like, why, why is it so bad to treat as a family? Because firing people has to be on the table. It has to be. So let me, let me expand on this point. So I think everybody would agree that work would be better if we thought it was play.

[00:41:12] These researchers, Doshi McGregor figured out that your performance is actually correlated to your motive. And the closer your motive was to the work itself, the better your performance was. So play was the closest. Like if you thought the work was play, you were going to be great at it. The second one was purpose. I really thought the work had really important impact in some meaningful way. And the third was potential. I thought it was going to help me get somewhere. And those were all correlated to positive performance. So the play was much higher than the other two.

[00:41:42] And then the bottom ones that they were, these were, these were associated with negative performance, by the way, economic pressure, emotional pressure and inertia. Okay. So now with this frame, imagine you have a non-performing worker, you know, you know, you can almost guarantee that they're not experiencing play in work. They're not enjoying it. But then they don't feel like they have a reason for doing it. So they're, they're doing it for economic pressure, emotional pressure, inertia.

[00:42:12] That's why they're, that's why they're struggling with their performance. And they're not leaving because it's difficult to leave. They need to learn something, change something, or take a different job. And that growth inside of them is delayed by exactly the amount of time it takes you to have the accountability conversations and pathways necessary. So you're, you're ultimately, you're trapping them in something that's bad for them for a long duration of time.

[00:42:40] If you don't deal with it as a manager, the best thing to do is to either improve their performance such that they're motivated by these better, more durable, more productive sources of motive. The work becomes play. They find purpose in it. They find potential in it, or you have to let them go. That kind of a cold water experience for a lot of people is what's required for them to

[00:43:08] make the personal growth necessary to win in their life and career. And you're just holding them back. I had the conversation with my daughter. She's 15, 16 years old. She had her first gig being a hostess. And she, you know, she's like, I need to make more money. I need to get a different job. I'm like, do you? Do you need to get another job or can you make more money at that job? And she's like, well, how would I make more money? It's simple. Provide more value.

[00:43:36] Well, who do I promote more value to? So we talked through it. And instead of just sitting at a hostess stand, looking at her phone, she started paying attention to what was going on in the dining room and helping the servers with the little things that take time that they didn't have time to do. The servers could provide better service because she filled the water. She cleared things. She did all this other little stuff. And what happened? They rewarded her.

[00:44:05] With bigger tip outs, bigger, you know, bigger piece of the tips. And they loved working with her. Right? She doubled her income just by trying to be more helpful and adding value. And to this day, she'll be 24. She's always looking for a way to make more money. But how do I add more value to the organization? That's still in her brain.

[00:44:33] So we do that with our, we need to do that with our children. We need to do that with our employees. And if we don't show them that path and they don't accept it, then, you know, then you have that other option that's not, it's not easy always to get them to see that. But that's our job as a manager. And I think that's important. And you connected all the dots there. So we share a lot about core value creation and the do's and don'ts with Mike.

[00:45:02] This episode is what you and the team needs to operationalize the value. This next episode. This means making them known by all easily hiring fits into your culture, making sure that they're a good fit before you go too far. This is where the rubber meets the road. This episode will be available inside of the Helix community only. The link to the community are in the show notes. The community is free. There's lots of other helpful value added materials in there. There's some other recordings.

[00:45:32] There's a section in there called videos where you can find all of the, this third episode, plus the parts that I'm calling the final turn. Where with these, some of the guests that I've recorded in the past, I went a little deeper, ask them a few extra questions. And we, you know, we get a little bit more information, the final turn, just like the final turn in a cigar. So they're all short three to five minute cuts. So go check it out. Go explore the community. Let me know what you think. Thanks.