Michael Hyatt:
So you’ve got to be thoughtful. This is going to require something of you. This is not just something that’s an embellishment to your corporate culture, something you can hang on the wall to impress guests. No. This is part of the operating system of your organization. It functions at that level, and you have to embrace it. Hi. I’m Michael Hyatt.

Megan Hyatt Miller:
And I’m Megan Hyatt Miller.

Michael Hyatt:
And this is Lead to Win, our weekly podcast to help you win at work and succeed at life. And this week, we’re going to continue our conversation about a thriving company culture. And last week, we talked about the importance of a thriving company culture, and this week, we’re going to talk about how business owners can cultivate a thriving company culture no matter where they’re starting from.
Megan, I can almost hear the cynicism of people out there of people saying, “Come on. Either you’ve got it, or you don’t have it. There’s no recipe for a great culture. It’s either something that you stumble into, or life most companies, you don’t have that great of a culture. And that’s just something you’re going to have to get over your youthful idealism and just accept the fact that people aren’t perfect, that cultures are broken. You’re getting a paycheck. That should be enough.”

Megan Hyatt Miller:
Yeah. So the good news is there is a recipe. And here’s what I’ll say before I go into that. I really understand that sentiment because so often when this gets talked about, this idea of culture, it feels like a black box. People talk about it, when you’re really listening to some leadership expert, like it’s the holy grail. But nobody ever tells you how to do it. They just talk about it like if you’re a good leader, you’re going to have a great culture, obviously. But then if you’re the leader, you’re left scratching your head, thinking to yourself, “Yeah. But if I’m honest, I don’t even know what that means. I couldn’t define culture necessarily, much less tell you how to do it.”
And so I think that sentiment makes a lot of sense. Fortunately, it’s not true. Fortunately, there is a recipe. There are predictable, reliable ingredients that when you put them together will give you a thriving culture. And that’s what we’re going to talk about today. So I’m excited.

Michael Hyatt:
Okay. I’ve got to say this. We get this comment quite often from our coaching clients … and those of you who are our coaching clients know what I’m talking about … where you come up to us at a coaching intensive and you say, “Why didn’t I learn about this in business school? If this is so important, why didn’t they teach that to us?” And they’re not being cynical. They’re just kind of frustrated over the fact that they had to become part of a coaching program because there wasn’t a course on culture or there wasn’t a course on creating vision or there wasn’t a course on creating alignment. None of these things that are sort of the soft skills that are essential to driving operating results are even taught in universities. And I think to myself, “Why not? How cool would it be to have a curriculum that was based on this kind of stuff, stuff you would actually use?”

Megan Hyatt Miller:
Absolutely. Well, that’s part of why we created our own coaching program, so we could make that right. Because we know that there are a handful of things that, if business owners know, really do drive operating results. And if they don’t know, they are going to be major pitfalls. So we’ve taken care of that within our sphere of influence. But before we dig into this, let’s define again … in case you didn’t listen to the last episode, I want to encourage you to go back and listen to it now before you listen to this one. But in case you don’t want to, let’s define what culture is because this is a really important part of this conversation. So here’s how we define culture.
Culture is the way that we reliably engage with our work and one another determined by a set of shared values and behavioral norms. So culture is the way that we reliably engage with our work and one another determined by a set of shared values and behavioral norms. And everywhere there are people, as we said last time, there is going to be a culture. The question is is it going to be toxic, or is it going to be thriving. And the truth is, thriving cultures are created. And that’s what we’re going to talk about today.

Michael Hyatt:
That’s a critical distinction. They don’t just happen. They’re not an accident. They’re not a process of luck. They are actually created with intention, and that’s what we want to talk about. If we were baking a cake and we shared the recipe, we’d start with the ingredients. And that’s what we’re going to do today when it comes to culture is we’re going to share with you the ingredients … specifically four ingredients … that you can use to create a thriving culture. The first ingredient is values. Core values. So they can talk a little bit about that. I know you did a company-wide training on this recently with our own company. So talk to us a little bit about the importance of this.

Megan Hyatt Miller:
Yeah. Well, first of all, what is a value? I mean, I think, again, so often these things are not defined. We don’t define our terms, and we wonder why it feels so hard to create these things. Well, it’s not really your fault if you struggled with this. A lot of times, the experts don’t define these things. But a value is basically what you think is important. I mean, it’s as simple as that. And it doesn’t mean that your list of values in your organization are everything that’s important in the world or everything you think is important as the business owner. But you’ve said, “Here are a defined number of values that we say, ‘These are the things that we value the most. Of all the things we could value, these are the things that we value the most,'” at Full Focus, in our case or in whatever your company is.
It really says, “This is what we’re going to be focused on. This is what we’re going to be aligned to. This is where our attention is going to be and what we’re going to be accountable to. And it makes it concrete and explicit, like we talked about last time, what the expectations are for the things that we are going to share and hold in common as being important.

Michael Hyatt:
Do you have an opinion about the right number of values?

Megan Hyatt Miller:
I was going to ask you that question. That’s so funny.

Michael Hyatt:
Well, I could answer it.

Megan Hyatt Miller:
It’s like we share half the same DNA. Go ahead.

Michael Hyatt:
I know. Exactly. Well, I do think probably less than three is too few. And probably more than eight is too many. I think the sweet spot, honestly, is probably about five. But we have eight.

Megan Hyatt Miller:
We have eight.

Michael Hyatt:
So we’re kind of on the outside edge, but we periodically look at them and we think, “Okay. Is there one of these that we want to throw out? No.” We have been unable to do that because these are the eight values that we stand for. So you just don’t want so many that it becomes difficult to remember, and we’re kind of at the outer edge of that. But you don’t want so few that it doesn’t really describe the organization and the real priorities that your organization has.

Megan Hyatt Miller:
Right. Well, and this is something that, as you just mentioned kind of offhandedly, you should be reviewing on a regular basis. This is something we review with our team on pretty much a quarterly basis, definitely at our annual team meeting. But it’s something that we review as in analyze and question if we need to make any adjustments to in our strategic design process every year. Because we want to make sure that we have really asked the question, “Are these still relevant? Are these still the things that are important to us?” And we do make … Usually, every year we make some change. Not necessarily changing a whole value, but we have a description of each of our values that go along with it, and we’ll tweak that a little bit as we get a little bit clearer as we move toward these things. As I said, I think, in the last episode, we are moving toward these values all the time.
They’re aspirational. They’re always calling us to something better, to a higher level of excellence. And as we get closer to them, of realizing them fully, we’re making little tweaks to them along the way. And so I think this is important to remember. This is not you did it once … I told you I loved you once, and I’ll tell you if I change my mind. It’s not like that. You really want this to be front and center for your team, and you want this to be a part of your annual planning process so that you can keep them relevant. We actually do awards on a quarterly basis where we’re giving our team awards for the people who embody our values. Because we just want people to have this top of mind all the time.

Michael Hyatt:
Well, and we do annual reviews based on this. We recruit based on this. We talk about it all the time. One of the things you said that I want to ask about, because it’s kind of controversial … You said it like it was a given. But this idea of your values being aspirational … Jim Collins in his book “Good to Great” makes a big point about saying they shouldn’t be aspirational, but they should be descriptive of the culture you have now. So what would you say to that?

Megan Hyatt Miller:
Well, I don’t mean aspirational like if you’re wildly dishonest today, you have something about unyielding integrity. I’m just saying that it’s kind of like the Bible, a standard set forth in the Bible, or something we’re always working toward. It’s not something that we just completely realize and we’re like, “Check! We’re done now.” And so I think that that … We talked about this in the last episode. Part of why values and a thriving culture are valuable is because it calls out the best in us. And I think that’s a daily choice. It’s not like it’s on autopilot. It’s not like we’re just going to show up with unyielding integrity no matter what and we don’t ever have to make a decision. I mean, I can think of many times when I have been sitting in a conference room and I can see the values through the window of the glass door of the conference room, and I’ve had to make a decision if I was going to align with unyielding integrity with the decision that I was about to make or not.
And so it’s aspirational in the sense that I am calling myself or being called to that standard, and I have a decision to make. So I think that where we get into trouble is if we … We’ll talk about this a little more later. If we get really rigid and really perfectionistic about this where it’s like an all or nothing game and we’re not pursuing … One of our values is continuous growth. If we’re not continuously growing toward the embodiment of our values, then I think that that’s problematic. So I don’t know. Maybe that’s just kind of like a position of humility a little bit. I’m not advocating for setting things that you have no business setting as your values because you’re not acting as though they’re important at all. That’s not what I’m saying.

Michael Hyatt:
or not committed to achieving.

Megan Hyatt Miller:
or not committed to achieving. Yeah.

Michael Hyatt:
Yeah. So some day, I’d like to have this conversation with Jim Collins. And Jim, if you’re listening to this podcast, let’s talk. Because I don’t think we’re that far apart. I just think that he’s after the same thing we’re after. I want something that’s within reach, but is a reach, that we never fully achieve.

Megan Hyatt Miller:
It’s always going to push you a little bit, and you’re always going to have to stretch for it because that’s what keeps us from the drift. It keeps us choosing something that aligns with how we want to show up in the future rather than just what’s easy today.

Michael Hyatt:
Well, and that unyielding integrity one is a good example because literally every time you make that choice, there’s usually a price tag. It’s going to cost you something to have integrity, to fulfill that promise because now it’s more expensive than you anticipated or it’s inconvenient to what you anticipated. So there’s always a cost associated, so there’s a little bit of a hesitation. So in that sense, it’s aspirational. It’s like, “No. I said that I believe in that. That’s important to me. And so I’m willing to pay the price to have unyielding integrity.”

Megan Hyatt Miller:
Right.

Michael Hyatt:
That’s what we’re after. That leads us naturally to the second ingredient, which is behaviors. So how are values and behaviors related? Again, Megan, I know you just recently taught on this to all of our employees. So talk about behaviors.

Megan Hyatt Miller:
Well, this is one of the parts that I think is easy to leave out. You focus on the values, and then you just kind of set it and forget it. But again, part of what you’re after is alignment. And we’re going to talk about that in a second. But we want people to have their words and their behaviors match each other, and so we’ve got to define what … Okay. How do we know if you’re living with unyielding integrity? What does that look like? What does it really not look like? And so taking the time to say, “It looks like this,” and that’s a series of bullets, “and it doesn’t look like this,” and that’s a series of bullets, is so helpful because we’re really answering the question, “How are we going to behave based on our values?” And these should be things that are observable, recognizable, describable actions.
So think about it like if you were writing a police report. When you’re describing the behaviors of this action, like unyielding integrity, could you observe that? Would it be concrete enough because you’re not trying to make this vague for people. You want to make this concrete enough that people know if they’re doing it or not. For example, one of the things we talked about with unyielding integrity in terms of our behavioral norms was that when we give our word to something … If I say to you, “I will follow up with you and get you that report by the end of today,” then I have to honor my word. That’s part of unyielding integrity. I do what I say I’m going to do.
And if I can’t for some reason … like let’s say my child got sick at school and I had to leave work early and I wasn’t able to send that to you … then the right thing to do, the unyielding integrity behavioral norm, would be that I would send you a message and say, “Hey, I’m so sorry. I have to pick up my child who’s sick at school. I know I promised you that I would get you that report. I’m not going to be able to get it to you today by end of business, but I will get it to you tomorrow by 10:15 before I walk into my first meeting.” That’s a behavioral norm that people know if they’re in alignment with. We don’t abandon our word. We honor our word, and if we can’t keep it in the way that we originally planned, we renegotiate it with the person that we committed to.

Michael Hyatt:
Okay. So an example of that not happening … and I’m going to be intentionally vague because I don’t want to incriminate the guilty here. But we had a vendor recently that made a promise to us. We took them at their word. And then two weeks later, they call us up. They tell us they can’t do what they promised. But they didn’t act like they ever made the promise. It’s just like no big deal. They didn’t apologize. They didn’t reference it. They’re just like, “Oh, yeah. We’re not going to do that.” And it was pretty significant and very frustrating. But that let us know that they’re not committed to unyielding integrity. They have some other values. They’re not terrible people. But that’s a behavior that gave evidence of the fact that they don’t think about integrity, at least in the same way that we think about it.

Megan Hyatt Miller:
Right. And that means that I don’t have alignment with that person and how I want to do business. Because that’s really important to me. I understand that people have to say no or that things change and they have to back out of something that they thought they could do. All that’s normal. All that happens. But what I want to see with our value of unyielding integrity … and this includes the external partners that I’m working with. I want to see somebody come to me and take ownership of that and honor their word and not leave me in a position of going, “Wait. I have to reference my notes from that meeting or the person I went that meeting with. We heard the same thing, right? He said XYZ, yes?” “Yeah.” “Okay. Just wanted to make sure because based on the conversation, I was kind of doubting it.”
And so we want our teams to have clarity about what it looks like to have their behavior align with a value and be out of alignment with a value because that way, they can self-manage far more easily. And hopefully, you’re going to have to do a whole lot less of managing people in terms of their behavior because it’s just really clear what the expectations are.

Michael Hyatt:
In that particular example, I really felt gaslit for a little bit. “Did we hear that right? We thought they made the commitment to us.” But then we made the decision … I mean, literally what had happened … There were three of us: our CFO plus us. And we said, “We’re not doing business with them. As soon as we get out of this relationship, we will.” And that’s how all people think. “As soon as I can get another job, I will. As soon as I can find another boss, I will.” People don’t want to do business with people who don’t share their values. And it doesn’t have to be 100% match, but on some of these things like this, there’s got to be fundamental alignment. Okay. I have a question for you on behaviors. Are you recommending that once people identify their values … and I heard you say in the last point that we have a description where we describe what that value is. Are you suggesting-

Megan Hyatt Miller:
Right. Like a definition. Yeah.

Michael Hyatt:
Yes. And then are you suggesting that they have a written set of normative behaviors?

Megan Hyatt Miller:
Yes.

Michael Hyatt:
Like what it looks like when you’re living that value and what it looks like when you’re not.

Megan Hyatt Miller:
Yes. Yes. I think so. Because it feels like it would be intuitive to you because these are probably values that are flowing out of your personal values as the business owner. But it’s not intuitive to your people. For example, we have had, at times, people assume in our organization that unyielding integrity meant we would do anything to make a customer happy, anything that the customer thought was right or necessary was our standard. But that’s actually not what the value means. What it means is we will do what’s right, even if it’s expensive, embarrassing, or inconvenient. That’s true. But do what’s right is defined as things like contractually obligated. What did we say? It’s not just about what somebody wants us to do. Obviously that would be unwise.
So this is why it’s important to define it because when you have it clearly articulated … “Here’s what it looks like to live out the value, and here’s what it looks like if you’re not” … then it helps really set your team up to win. So they go, “Oh, okay. I get it. So in this case, we wouldn’t need to give that person a refund because that’s outside of our contractual obligation. That doesn’t make any sense. But in this case, we absolutely would.” I mean, they’re going to apply it in their context. If they’re in customer service or if they’re in marketing or whatever, you want them to be able to draw the connection between this kind of abstract value and what it would mean in their day-to-day work to live in alignment with that.

Michael Hyatt:
And I just want to hasten to say, in our vernacular, it’s not merely contractual obligations. It’s definitely that. But if we make an oral commitment, if we make a promise, if it’s just oral, we’re still going to fulfill it. At least that’s what the value says. So those of you who are our coaching clients know that we spend an entire day on culture, and pieces of other coaching sessions, we also do culture. But an entire day on culture, and one of the exercises that we give to you, give to our clients is where they actually write down these behaviors that express the value. And then we write a set of anti-behaviors that don’t express the value. So we do that for every value so that everybody leaves with not only their core values identified, but the behaviors that exemplify those values.
Okay. That brings us to the third ingredient, which is alignment. So just, again by reference, first ingredient, values; second ingredient, behaviors; and the third ingredient … and this flows logically from the first two … is alignment. Our behaviors match our commitment to our values. So let’s talk about this.

Megan Hyatt Miller:
Yeah. I mean, this is kind of the most straightforward one, but it doesn’t do you any good to have a set of values, a clear set of behavioral norms and unacceptable behaviors, and then somehow those two things never get connected to each other. You just kind of put it in a binder on the shelf or it’s in an old slide deck somewhere. And it doesn’t get operationalized. So it’s really critical that as the leader, you are always bringing to people’s attention when we’re seeing our team members in alignment with our values. We want to see this connection between the values and the behavior being in alignment with each other. And that is the expectation. And of course, like everything else, this starts with us as the leader. If we are not in alignment … For example, if we have unyielding integrity up on the wall and I am regularly promising things that I’m not following through on, that’s going to be a real problem.
And that becomes kind of a default value or a default behavioral norm that’s okay because whatever I do kind of is assumed to be fine. And so we have to ask ourselves the question, “Am I personally, as the leader, acting as the champion of these values? Or am I out of alignment in some important ways that may seem kind of small but they’re big to my team?” So we want to start with ourselves. But then we want to be intentional, like I was talking about earlier. In our own culture, what we do is we give these awards on a quarterly basis. We’re always referencing our values. This is just part of the conversation that’s happening day in and day out at Full Focus because if we lose focus on it, then it becomes just something in the background and we don’t have enough attention on it to really make it a priority.

Michael Hyatt:
One of the things that has to happen as an executive team or a leadership team is you have to have an honest conversation that answers this question, “Are we willing, as leaders, to embody the values? Am I willing to be accountable to this value? And am I willing to give you permission to call me out if I’m not living congruent with the value?” And if you’re not willing to do that, for God’s sake, take that core value off your list. Because if you’re not willing to live it, more than anything else, that will create cynicism. This a two-edge sword. If you go through the trouble of creating these values and the behaviors and if you don’t exemplify them as a leader … And I’m not talking about perfectly. But if you’re not making an honest effort to exemplify, the live out these values, you will accelerate the process of cynicism.
You will accelerate the toxicity in your company. So you’ve got to be thoughtful. This is going to require something of you. This is not just something that’s an embellishment to your corporate culture, something you can hang on the wall to impress guests. No. This is part of the operating system of your organization. It functions at that level, and you have to embrace it. It’s like every app has to work within the constraints of the operating system. I can’t run on my Mac Windows applications. I have to run those that fit with this operating system. And the same thing is true for us as we move inside of our organizations and as we operate and interact with other people. We’ve got to be willing to live those values.

Megan Hyatt Miller:
Yeah. And I’d even use a stronger word. I would say it’s not just embrace. It’s really submit. And that’s not a real popular word. It’s not even a word I really like very much. But it’s a word that I think mature leaders and mature adults in general are familiar with, this idea that we put ourselves intentionally under certain kind of authority that we don’t necessarily have to, but for the benefit of the people that we’re caring for and for our own benefit. And I think that’s kind of how values serve for us. They’re guardrails that we don’t have to have. I mean, there’s no police that says, “You got to have a set of values to have a business.” Of course, you don’t. But if you have them, you’re choosing to put some hard edges and guardrails for yourself that really have to be respected and have to be kind of submitted to sometimes when you don’t want to.
I mean, I have had moments where I felt mad at our values. I’m like, “Darn! I hate that one today.” Because I know that I want to make a choice that would be out of alignment with that value, and it would be so much easier if we didn’t have that value. But you know what? At a more maybe mature self-aware moment, we made the decision to commit ourselves to that value. And because of it, I’m going to make the decision that aligns with it. And that’s a really good healthy thing, I think.

Michael Hyatt:
Well, today, everybody wants to be autonomous. The root of that word is self law. You want to be a law unto myself. I don’t want to be accountable to anybody. I want to define myself. I want to have my own set of rules. Whatever. But what you’re saying is so true. Mature humans don’t live like that. They submit to something that’s higher, something that’s more important, something that’s a guiding principle that we can all collectively submit to. And this naturally brings us to the fourth ingredient, maturity. So these all kind of dovetail here, but let’s talk about this. You talked about this in your training.

Megan Hyatt Miller:
I did talk about it in my training because what I’m really talking about is the application of our values and behaviors. How are we going to do that? And my belief is that it needs to be done with wisdom, with humility, and with self-leadership first, and without rigidity and perfectionism. So I say that because sometimes we all have different propensities in our personalities, and it can be really easy for certain personality types or certain ways people are wired that they can become the values police instead of the values cheerleaders. And what we want is a company full … Whether you have 5 employees or 5000, we want a company full of values cheerleaders, people who are champions and cheerleaders of our values who catch each other doing things that are right, who are high-fiving each other in the hallway or over the Zoom screen or whatever, and encouraging each other rather than …
And primarily when they’re thinking about living out the values, they’re thinking about themselves. “I need to focus on am I living in alignment with these values and behaviors or not. And if so, what tweaks do I need to make to bring myself back into alignment?” Rather than from a place of arrogance or rigidity or focusing on other people and just trying to always chastise people and bring them into some kind of perfect alignment, which is why I think I’m using that language of, “These are aspirational values.” Maybe that’s not quite the right word. But we’re not trying to do this perfectly where we never make a mistake, where we never veer off the mark. That’s just an impossible standard. And what it’s going to cause is shame or throwing in the towel and, “I just want to give up,” or, “There’s no point to doing this.”
And what we want is, instead, to keep people engaged. I mean, after all, this whole series of podcasts that we’re talking about here, we started talking about how employee engagement and satisfaction drives operating results. So if we disengage because we feel like there’s all this perfectionism or rigidity or you’re getting called out left and right, that kind of thing, that’s going to have the opposite effect. So we want to apply these things with maturity.

Michael Hyatt:
Do you think in the life of an organization, it’s a little bit like childhood development where when kids are first learning the rules, they can be really rigid and it’s really black and white? But over time, they start to see more nuance, and it’s more gray and they have more grace with other people. And I know, for example, in an organization, I know that as I moved up the ranks from being a frontline worker to eventually being the CEO of a big corporation that I was kind of astonished at how black and white things were at the lower levels, but how as I moved up the organization, there was more nuance. And I realized that things weren’t quite as black and white as I perceived them at a different level of the company. Do you think that might be natural and you just kind of have to usher people and guide them through that? Or do you think if you start at the beginning and just say what you just said about cheerleaders and not police that maybe you can miss that phase?

Megan Hyatt Miller:
Well, I mean, I think about our own experience. And I think that we’ve had some of this at times where we had a little bit more police than cheerleader. And I think if we had talked about it more, that probably would have been helpful. I think, again, for most people, they have never worked in an organization that is healthy with a thriving culture, where they had an explicit set of values and behaviors that were really the values and really the expectations and really how we were all committed to living and working together. And so I think sometimes people just get kind of excited and they don’t have any experience with it, and they can just become a little overly zealous and not necessarily have the tools, thinking or acting, that would allow them to approach it maybe with wisdom and that self-focus.
And I think in hindsight, I would have had this conversation. I would have really empowered people to say, “Hey, focus on yourself first. And remember, you’re not going to get it 100% right, either. And that’s okay. We just all want to be striving for this and always making strides toward it and not devolving into some kind of shame thing or whatever.” Because that’s not productive. And I think that’s something I’ve realized later, and so I would say I think it’s avoidable. I don’t know that I think it’s developmental. I think it’s more … I think you’re right about where you are in the organization and kind of what decisions maybe you’re dealing with and how complex those are. I also think it’s just how people are wired. I think some people are wired to think in a more black and white way, and some people are wired to think more in gray scale. And I think it is something, though, that we can all learn together is just being for each other and being kind.

Michael Hyatt:
Well, I think your metaphor, cheerleaders not police … is enormously helpful. Okay. So to build a thriving culture, we’ve talked about four ingredients, the first one being values; the second one, behaviors; the third one, alignment; and the fourth one, maturity. And let me just hasten to say we’ve talked a lot about our coaching program where we spend an entire day on this topic. And if that sounds like something that you need but you didn’t get in your education, there’s a ton more inside of our coaching program. And if you want to find out more, go to businessaccelerator.com. And let me encourage you to book a call with one of our business consultants. Our coaching program is not for everybody, but it might be for you. And the only way you’re going to know is if you check that out and have a conversation with us. So you can do that at businessaccelerator.com/podcasts. Book a call. I promise, whether you become part of our program or not, you’ll find it enormously helpful and insightful to create any kind of business you want to create. Megan, any final thoughts?

Megan Hyatt Miller:
Well, I’ve loved doing these episodes with you, Dad. I think this is such an underrated, underappreciated topic as we think about growing businesses, scaling businesses, really achieving big operating results. And it’s kind of a secret weapon once you master it, which is why we’ve decided to devote so much time to it here, but also in our coaching program. Because we know what it produces on the other side. So I just want to encourage you guys to spend the time and energy and make this investment in your future, in your people. Because ultimately, you will be the beneficiary.

Michael Hyatt:
Guys, thanks so much for joining us. We hope this has been helpful. We look forward to talking to you on our next episode. Until then, Lead to Win.