How Valuable Are Your Core Values?

Steven Krein: This is Steven Krein. I'm here for another Free Zone podcast with my great friend Dan Sullivan. Hi, Dan.
 
Dan Sullivan: Hi, Steve. How are you?
 
Steven Krein: I'm doing well. Crazy world we're living in, but very excited about digging in today to our next episode because I've been thinking a lot about core values and our organization's core values, my family's core values. They're very connected, of course. And, you know, now StartUp Health's been around since 2011. And we just recently came out of an annual retreat with our team and we went back to really just refresh and remind everyone and dig deeper in everyone's understanding of how important core values are to the organization and how they play a role in decision making every day, whether it be hiring or firing or customers or product. And I thought it'd be a really good topic to kind of dig into not only how they play a role in Strategic Coach, our organization StartUp Health, but also our communities.
 
Dan Sullivan: Yeah, it's really interesting and maybe from a different direction. I've really thought about this from the very start of the Program. So we're in our 35th year of Coach right now. And I just created one of my quarterly books and it's called Everyone And Everything Grows. Kind of interesting, Steve, you were talking about what's happening in the world right now. And over the first, I would say 32 years, you know, so right up until the beginning of COVID. I would get occasional questions about how we operate backstage at Coach. You know, how do we hire people? How do you train people? How do you promote people? And for what reasons do you fire people? But I noticed starting with COVID and coming forward, the number of requests for knowing how you put the company together keeps growing. And I got to the point where I said, you know, I should write a book. And it's very, very interesting. We had a set of, they were just in a four-page handout. It was called the Remarkable Coach Culture. You know, we started in 1989, and we had two or three people, and then it grew to a dozen people. But now we're 130, and it's not a small company anymore. Technically, it's a medium-sized company, 50 to 500 constitutes mid-size company. And we're in three countries. We're in four different locations. So it becomes important for new people joining the Program to get some sense of history of the foundation. Some of them you would recognize right away. Unique Ability; Unique Ability Teamwork; Free, Focus, and Buffer days, you know. But the first chapter is called "No Defense Budget Needed."
Steven Krein: Explain that. What is no defense budget needed and why is it first?
 
Dan Sullivan: Well, actually, in the handout document, it was last. So there were 16 sort of values or mindsets, let's call them mindsets. But one of the things since social media came in, people who are on social media at any time can get attacked. If they say the wrong word, they can be attacked by a million people. They can get canceled. They can be socially ostracized. And so what I said is this is the environment they're living in outside. And we don't allow social media in the company. You know, I mean, you can't be on social media during work hours. But I was saying there's been a new factor introduced into people's outside lives that can very negatively affect how they come into the company every morning and how they operate. And this is a value of Babs and this is a value of me. And I think the thing that I wanted to get across, we don't want you spending any energy on defense when you're here. We want you to spend all your energy on what you do really well and on really great teamwork with other people who are doing what they do really well. And it's all to increase the profitability of the company. That's why we're doing this. So any time you have to spend an hour defending yourself or feeling that you're being attacked is, for me, a waste of a valuable resource.
 
Steven Krein: And it's interesting because I'll talk about our first core value in a second, but digging a little bit to a) why you flipped it to the top obviously is interesting. But I want to dig into how this plays out in the real world. What would be an example of how this might play out for one of your team members and why it's such an important core value, actually, like, you know, something that they would have experienced or would experience?
 
Dan Sullivan: Yeah, for example, it might not be something that personally involves them, but it's something that happened in the world. And you have political events that happen in the world. And immediately the issue becomes polarized, and you've got to identify with all the friends and acquaintances you have on social media. You're required to vote on which side of the issue you are, and you can lose friends overnight, depending on the issue, but you're much more likely to give in to what the popular opinion is. So that's something that happened to you when you weren't in work hours that we know nothing about, and then you show up for work, and you're bringing all that experience inside the work environment.
 
Steven Krein: Gotcha. So our top one, and it has been since the day we launched, is that mission-driven. Everything's about the mission. And there's the organizational mission of solving the biggest health challenges of our time and this idea of uniting and empowering a global army of entrepreneurs and health transformers. But for an entrepreneurial team working on type 1 diabetes or Alzheimer's disease, one of the things that is a good reflection back to, like, just kind of consistent with what your first one is, is like, hey, let's go back up to the top and realize we're all here for a specific purpose. And don't lose sight of that as the world continues to kind of pummel you with other distracting, potentially distracting topics, issues, or obstacles.
 
Dan Sullivan: Yeah. Something I'd like to put in here, the world has really changed since you started your company, and it's really changed since we started our company. And I'll take it even further back. I grew up in the 1950s, and the core values were embedded in the society. You worked hard. You graduated from high school. You didn't get someone pregnant or got yourself pregnant. You didn't have any collision with the law that ended up in a legal system record. You got yourself a job. You saved money. And you proceeded with your life to age 65.
 
Steven Krein: And that was a core value of the community you were in?
 
Dan Sullivan: The core value was right in the society. It was structured into the environment that you lived in. There's a whole number of reasons why this happened, but I think the society, which was fairly unified, and it wasn't much different in New York City than it was farm country Ohio. You know, it was red, white, and blue. It was the 4th of July. You know, it was just after the Second World War where America came out on top. 1945, the U.S. economy was half the world economy. It was a time of abundance. The boomer generation wasn't yet in the workplace. I'm two years before the boomer generation. So I'm in '44. And all I've known all my life is abundance because we were a smaller generation. And because of the Great Depression and because of the Second World War, we were the smaller generation. And there was just always more schooling that you could possibly use. There were more jobs than you could possibly have. And so I've lived a very lucky life. But you had a sense that the values were in the environment. And I think, decade by decade, since the 1950s, things have fragmented. And I think microtechnology had a lot to do with that.
 
Steven Krein: So we end up today where people find, especially organizing structures like companies, become your community.
 
Dan Sullivan: Yeah. I think the value reinforcement of a company today is 10 times more important than it was in the 1950s.
 
Steven Krein: It's interesting because we think about, like, aligning every action and relationship with our core values. And when you think about mission, it's the great equalizer. You either are or you're not inspired by passion and have conviction for the mission. It's not only about who's on the team, but your customers, your collaborators, your investors. It's interesting to me, I don't think it was as obvious during the last 10 years of the upcycle of funding, but non-mission-aligned funders, non-mission-aligned team members, non-mission-aligned partners wreak havoc during times where things shift. And you very quickly see who's in it during times like this. And so doubling down on really curating mission-aligned relationships is key. That's for us the core value. And I think similarly, as you go down them, you look through that lens. It's somewhat comforting.
 
Dan Sullivan: Well, I would say another thing, you talk about companies, but there's a radical difference between a company that's actually where the founder or entrepreneur is in charge of the company rather than a corporation where it's a hired gun. And you can see that, I mean, if you look at a major corporation like Walt Disney, you would not see Walt Disney Corporation having the problems it has today if Walt Disney and Roy Disney were in charge. The CEO now is famous for... but he's only famous in terms of his quarterly returns. He's not famous for any kind of culture that he created. He didn't create the culture. He's there for six years and he retired and they brought him back because his successor failed.
 
Steven Krein: Yeah. And you juxtapose that with- One of the favorites, by the way, obviously, is Apple to go to an easy one like Apple. But it's been interesting. This generation of Microsoft is much more like the- not the Steve Ballmer. But when Bill Gates did it, there was a culture like that. I think you didn't have that. And now you have it again. But you're right. There is an [unintelligible] driven culture ultimately that-
 
Dan Sullivan: Yeah. And we're very conscious, Babs and I, that we're under observation all the time. Regardless of what we do and what we say, our team is taking their cues for us. And so we have to represent the values that we want the team to have.
 
Steven Krein: Yeah. Yeah. It's interesting because our second one is around being mindset obsessed. And we've talked a lot, obviously, about the transformational mindset but the optimistic mindset and ultimately using it as you build your teams and boards and customer bases, are you hyper aware of where people are coming from and whether they're an informed pessimist, whether they're a visionary optimist, you know, where are people coming from? Are they in the valley of despair? But we think there's great learning to be had by people cueing in on when you sit down with somebody or sit in front of somebody, what's their mindset as much as what's yours?
 
Dan Sullivan: Yeah, you and I and every entrepreneur is in the continual process of hiring and firing. And what we're checking out before we hire someone, do we think that there's a value fit? I mean, from a mindset, I call it mindset. Is there a resonance of mindset with what this person is looking for in, you know, in being hired? Does it match up with what the mindset is that we're looking for the person we're going to hire? And then they may be very skillful and they have great skills, but they don't have the right mindset for the culture that you're in.
 
Steven Krein: Yeah. And that's not just team members, that's customers, that's partners, that's vendors, that's everybody around the table. Proudly wearing your mindset and your values on your sleeve, so to speak, being very transparent with it, I think has been a great gift. Learn from you and seeing how talking about it is something very important to the process.
 
Dan Sullivan: Yeah, the other thing in our culture, you experience it because you're a parent. Babs and I aren't parents. But the number one thing that your children, your three daughters check out, the first lesson in life is, how do Steve and Rebecca get along with each other? This is the central lesson that all children learn is, how do their parents, because they're going to be in the role of either female or male out in the marketplace, and they have to know this. They have to know how to relate. Well, in our case, we're married, and we're the two owners of the company, and we're the two key people in the company, and they're always watching what's going on between Babs and me, you know? And not once in 35 years have they seen us quarrel.
 
Steven Krein: Yeah, we talk about it all the time. It's interesting when you bring the parallel from family and children to business and team members. And I think there's great value. I have that with Unity, you know, my business partner, and the work version of it. You haven't combined, but my work wife and my wife wife and the idea of how you get along and how you interact, and shared values becomes an amplifier. We're now 12 going on 13 years old as an organization. My first company that I joined Strategic Coach with, Webstakes and Promotions.com, you know, we sold it after four or five years. And so the longevity of keeping, you know, and reminding yourself, but also the team about the core values, I think it's very interesting. If you look at our next decade, we think about, like, just getting back to making sure, and they haven't changed, but it's like owning them. And again, I think the world we're living in today, it requires you to be very transparent with using core values as a tool.
 
Dan Sullivan: What would you say, Steve, is where it's almost stark, the difference between what team members—I don't use the word employees because it seems very corporate and we're not corporate—
 
Steven Krein: Yeah, I don't either.
 
Dan Sullivan: But what would be the starkest difference that you see around the issue of values between 13 years ago and today in terms of the kind of people that show up, you hire them, and they turn out to be wonderful fits, as opposed to people who seem to be right for you, but they turn out not to be right fits? What would you say is the starkest difference?
 
Steven Krein: Without a doubt, it's probably from age and experience is my pattern recognition to spot it really quickly. My radar, if you will, for wrong-fit people is just so finely tuned from 25 years in Coach and being an entrepreneur now for 25-plus years. So my confidence in my ability to notice when something's off, I don't think I was as confident in my ability to try to change people who didn't fit. Now I don't. I used to try when I thought there was, you know, three quarters of a fit or four fifths of a fit, I'd kind of work to fix that last 20%. And I don't anymore. I kind of feel like you fit or you don't. And I'm unapologetically transparent about it now. So wearing and describing our core values in the very first meeting, not like thinking it and saying it afterwards. I like talking every session with everyone, whether it's an entrepreneur, whether it's a funder, whether it's a partner out there. It's like, here are our values, what matters most, our philosophy. If this doesn't work for you or vice versa—we notice something—it's not the right time. Maybe it is down the road one day, but, like, I used to spend a lot of energy trying to change people, and we're hoping, hoping that wouldn't be that big of a deal that they don't fit with that one thing. And I just don't anymore. And I've seen it in my own community of 500 companies. You can see the entrepreneurs and startups that flame out that don't work. And nine times out of 10, it's mindset. You know, it's not the market or the product didn't work. It's like their mindset got the best of them. Or their team's mindset.
 
Dan Sullivan: Bad mindsets, if you consider them alligator tracks, when you track the alligator tracks back to the source of them in the company, the bad attitudes, generally the alligator tracks go back to the owner. Bad attitude. I mean, I don't think that necessarily the entrepreneur or owner has any better attitudes. When I see people, just to compare two situations, in 1997, 1980, right about when you came into Coach, there was a guy who was on his fifth marriage. We were just chatting, and we ended up eating at the same table in the cafe. I said, five marriages. I said, same kind of woman, five times? You know, you're striving. And he said, oh, no, no, they were really, really different. And I says, is there any common factor to the five marriages? Is there, you know, the four failures, really, divorce is a failure, any common factor? And he says, boy, it'd be hard to zero in on it. And I said, well, is there any one individual who witnessed all five? Do you have a witness to all five? And he said, oh, oh, you mean me? And I said, well, you're the only one who knows all five. The other players don't know each other. I said, you're the only common factor to the failures so far. So what's that all about? You know, I didn't push it. You know, I mean, it was short lunch and everything else, but yeah. But the same thing happens with entrepreneurs who've gone through five complete teams in 10 years. What's the common factor here?
 
Steven Krein: Yeah, you know, that's another one of those pattern recognitions in our filter that has come from just look around the entrepreneur who's around them. How long are they around them and what's the depth of their relationships? Both personal and professional, I think, play into that because you look at who's going to be a great collaborator, who understands teamwork, who understands their Unique Ability. One of the things that I've come to appreciate, I think, in the early days, I had resilience as one of our core values, and we can withstand getting beaten up and obstacles and chaos and all that stuff. And then I remember reading the book Antifragile about, you know, was it Nassim? Nassim Taleb.
 
Dan Sullivan: Nassim Taleb, yeah.
 
Steven Krein: And learning about the difference between being resilient and being anti-fragile and how you get stronger with the chaos and with the disorder and with the obstacles. And I realized not only is that the value that we embody, me, Unity, our team, and those around us, but how important it is to kind of approach whatever you're building that way. And so it's harder in... let's call it the 2012 to 2020 or even 2015 to 2020 time frame to talk about how important that is. But now when you look at what the difference is in the people who have, starting in 2020 with the pandemic all the way through to today, how they're living and dealing with everything that they don't control impacts them and how valuable it is to have an anti-fragile mindset and be anti-fragile versus just resilient.
 
Dan Sullivan: Yeah, we just completed five videos, our video team inside, where we had team members who had been at Coach more than 20 years and clients who had been a Strategic Coach, the Program, for more than 25 years. And we had two and two, we had two team members, two clients. And then we gave them a Fast Filter where I said, I'd like you to reflect on your experiences, you know, in such a way. Why have you stayed so long? What is it? And we put them together. And what you realize after you watch each of the one-hour videos is that there's a set of values that are both common backstage and front stage. In other words, how we operate our backstage is exactly what we're selling in the front stage.
 
Steven Krein: Yeah. The shoemakers' kids with the shoes.
 
Dan Sullivan: Yeah. It was very, very interesting. And now we're going to show it to all of our team members and say, these are people who have been inside the company for 20 years, and this is how they talk about their experience. And these are clients that we have who show up at the workshops. And these people have all been there for 25 years. And we want you to get a sense from comparing the one that it's all the same. It's all the same. So there's no contradiction between backstage and front stage. And I think that's another thing with culture. Don't be preaching what you don't practice.
 
Steven Krein: Yeah. The exercise of going through and discovering your company's core values, as we talked about earlier, the alligator tracks go back to the founders, right? And so I know for startups, a lot of times the culture, especially in the beginning, is literally a reflection of the founder's core values. I think good companies, they stay mirrored, even though the organization evolves and the people in the organization evolve. I think the harmony, going back to relationships of spouses, of good business partnerships, revolves around the idea that you've got shared core values personally and professionally. And so you're describing the videos and you're describing some of these things as consistency over time. You asked earlier about the difference between now versus when we started at StartUp Health. What's the difference for you when you think back to Strategic Coach in the '80s or '90s to today? What's the difference, if any, that you see in the practice?
 
Dan Sullivan: Scale. Just scale.
 
Steven Krein: Is it more difficult to deal with the 100th or the 125th or the 150th person?
 
Dan Sullivan: Easier. Yeah. It's easier as you get bigger. And the reason is because it's all the same. In my current book that I'm writing, just making a prediction about the next 30 years globally, I said, you know, the United States has to come out on top because it's a country that was created out of a document. You know, a lot of people say, well, the country starts with the revolution. I said, no, it doesn't start with the revolution. That was freedom from. But where the country actually starts, June 5, 1787, was when the Constitution is ratified. And that's freedom to. So one is freedom from Britain. The other one is freedom to basically have a continent-wide culture. But if you typed up the Constitution in 1787, the one that was first ratified, single-space typewriter paper, it was 23 pages. Today, if you did it, it's 27 pages. They've added four pages in 235 years. And the reason is that it's a set of rules, and the rules aren't about running the government. They're the rules how citizens will be protected from the government.
 
So the most important part that most people know are the first 10 amendments, and that's how all the rules and how the government cannot interfere with individual affairs. First Amendment, Second Amendment, Third Amendment, Fourth Amendment. The other thing is, and it's probably the most controversial subject regarding the United States, is the Second Amendment. And people say, it's just crazy that individuals can be armed. And I said, the United States is the only country on the planet where government doesn't have the monopoly on violence. Police have to learn how to negotiate. They have to be very, very careful. You know, there was an incident that had to do with ranch country where ranchers were given a hundred-year lease by the Bureau of Land Management. And then because of some corruption at the high political levels, their range land was going to be taken away from them because there was a new building project that was going to go in there that, you know, was a favorite of a very high government official. And the ranchers said no, and the Bureau of Land Management actually sent in a SWAT team, essentially, to enforce the orders. And they were met by 600 ranchers who were more highly powered than the SWAT team. And calls went back to Washington, and that was the end of it. They never tried to do that again. And a lot of people don't understand that: "Well, you have to trust the government." Americans don't trust the government. But it's built right into the Constitution why you should not trust the government.
 
Steven Krein: Yeah. And so using that metaphorically for core values of an organization, governing an organization with, you know, five, six, seven, eight core values that drive decision making. Create a community. Going back to a conversation at the beginning around society was the original place you got your values. Now it's your organization or your company.
 
Dan Sullivan: Yeah, and I think it's not permanently that way. I just think that in a period of high flux, you go to the organizing structure that actually works. And society has no meaning today. It really has no meaning. What sub-unit of society are you talking about? It always happens. And, you know, starting off a long time ago, it was the family was the organizing principle. And then you got a whole bunch of families, and then you had tribe as the operating principle. And then religion came in next. The 12 tribes of Israel were only unified by religion. You had 12 tribes, and the tribes were at war with each other, and they had to unify the tribes, and they did it through religion. And then in Europe, you had all these religious wars, you know. 1647, it's the Treaty of Westphalia. It was decided that there's not going to be any more religious war, and we're now going to have nation-states. And there isn't any permanent solution. It flexes, it flexes, you know.
 
But the U.S. is the most continually peaceful. I'm not saying tranquil, but I'm going to say peaceful. I'm not going to say tranquil. I'm not going to say agreeable. But except for the Civil War, which settled the issue, you know, there's flare-ups of violence. But, you know, they said it's never been so dangerous and violent. And I said, well, between 1860 and 1901, the U.S. had a major civil war which killed 600,000 adults, and they had three presidents assassinated. I said, you know, you got to know your history here. And there were riots. One of the greatest riots was a draft riot in New York City in 1863. There were about 600 people killed in the riot within blocks of where you're living.
 
Steven Krein: It would bring back these elements of core values and Free Zoners and collaboration. I think it's interesting. There's a lot of conversation in Free Zone about sharing who you want to be a hero to because you got the same target. But I think this other element of, are your values aligned? It's much easier to have this conversation in 2023, 2024 than it was in 2020 or 2018. And maybe your new book, Everyone And Everything Grows, is a great culture document for your core values at Strategic Coach. What do you see is the most important one for you that, not that any of them are negotiable, but which do you feel is the one that best represents where your energy is today?
 
Dan Sullivan: Yeah, I would ask the question a different way. I would say, if you had to give up all your core values except one, which one would you keep? And it would be Unique Ability and Unique Ability Teamwork. Every individual has a Unique Ability. We are committed to you finding your Unique Ability and more and more getting rid of all activity that's not in your Unique Ability. But the deal is, you got to be good at teamwork of linking up with other people's Unique Ability. The two of you have to be totally focused on the profitability of the company.
 
Steven Krein: Yeah. First, I love how you reworded that. I went right to similarly, but different words, community powered. I've seen way too much siloed work in health care, whether it be research teams or researchers or funders or foundations or academic institutions. Everyone's doing their own thing and working in silos. And whether it's our team or whether it's our community, until you convene a number of people together to solve a problem, you're just working alone. And so being community-powered, like Unique Ability Teamwork, underscore teamwork, collaboration, community, you know, I don't think it's a solo sport anymore, this innovation thing.
 
Dan Sullivan: Yeah, I think the real secret here, in a certain sense, as long as it's not a negative value, it's consistency over time, which is the solution. It's like, people ask me, do you know a really good time management system? I said, yes, I do. And they say, well, which one is it? I said, the one you use. Doesn't matter what time management system that you use as long as you're consistent over time with the time management system.
 
Steven Krein: And if it's not using one, that's a problem.
 
Dan Sullivan: Yeah. Actually, the worst one is trying out a new time management system every quarter and not doing any of them really well. I think the big thing is that's why a couple of quarters ago, I had a book called "Geometry" For Staying Cool & Calm.
 
Steven Krein: That was a great one.
 
Dan Sullivan: There's three things you have to understand, that everything in the world that you experienced was made up by somebody. Okay. And that's going on today. So there's people making up new things today that you're going to be affected by their creativity. The second one is, nobody's in charge of this. And number three is, life's not fair. But people say, well, if nobody's in charge, then it's all okay. I said, no, actually it's all rules. I mean, we talk about all the turmoil in the world, but the truth is, 90% of the population gets up every day. The adult population goes to work, earns a living, invests in all sorts of things in their private life, including their families, their children, their neighborhoods, their communities. I said, what's remarkable is how much cooperation there is in the world with nobody being in charge.
 
Steven Krein: So within our organizations, you got the same thing, right? And core values are the rules. Core values are the rules.
 
Dan Sullivan: Yeah. So we just announced, and you know about it, our first big conference where we're pulling in a thousand Strategic Coach clients in Nashville next year, so we're 2023 now, so it's 2024. So people said, we didn't know that you were thinking about this CoachCon thing. I said, I wasn't. I said, actually, it was already being planned nine months before anyone told me about it. And they said, well, how can that happen? I said, because I have a goal of having as much useful new stuff going on in the company as I can without me knowing that it's going on.
 
Steven Krein: Your philosophy you shared with me and made a big impact many years ago was that if somebody else on your team can do something at 80%, that's better than you doing it at any percent. And I think core values is the unlock there. If you know the team is executing with the values of Coach that you've instilled in the organization and the team, then you would have all the confidence in the world that that program, it'll be planned and executed just the way you would, even if it's 80% of what you would do, but being done without you. But you know it has shared core values with what you're doing and what you set out and live by.
 
Dan Sullivan: Yeah. So what'd you learn from our conversation, Steve?
 
Steven Krein: The appreciation of, I call them core values, you referred to them also as rules around mindset. I think regardless of what you call them, I think a set of agreed-upon expectations of how we're going to behave and act and think without being in the details of every micro decision, it's a great tool for entrepreneurs to get the great unlock of great teamwork, whether it's your team, whether it's collaborators, whether it's everyone. So I think it's time, if you haven't refreshed it and reviewed them with your team, great exercise. I mentioned this, I think might be before the recording. We used our six core values as the organizing structure for a two-day retreat we did. And every two hours, we've used a tool and an exercise around digging into each of the core values. And the interesting thing was not knowing how people thought about them or have evolved in their thinking about them in many years. And as an organization that, you know, began in 2011, it was very eye opening to kind of level set and go into 2024 with not only a recommitment to them, but I think very visible examples now playing out in an organization based on people using them every day to make their decisions.
 
Dan Sullivan: The thing that I got out of this is just a societal shift that has caused this to be an incredibly more important topic inside of a company in 2024 than let's say it was in the year 2000. And I think the reason is because there's been a fragmentation in society of agreed-upon common values.
 
Steven Krein: Yeah, I really enjoyed your perspective on where so many of our operating principles came from 30, 40, 50 years ago, let alone 2000. I think it is something, especially as we go into the new year, people are planning their 2024. Thinking about teamwork, we were talking a lot maybe for the next episode about how many fewer people you need to do some things now that technology, AI, and other things are available. And so perhaps we talk on the next episode a little bit about that, but I really appreciate, Dan, making this the forefront of today's conversation, but most importantly, the shared values I think we have about Unique Ability and Unique Ability Teamwork.
 
Dan Sullivan: Thank you.
 
Steven Krein: Thanks, Dan.
 
Dan Sullivan: Thank you very much