[Podcast] Tom Lazaroff of the Fundamental Group

KJ brings on Tom Lazaroff of the Fundamental Group. They take a deep dive into purpose, framework, people, company, fundamentals and visionary. As they bring to the world, a build for customers and employees a like. In the SaaS and OKR space and how best to create, implement and operationalize a streamlined process. 

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Transcript

KJ

Pleasure to be here with you, Tom. I've really enjoyed our conversations over the past couple of weeks we've recently met, you know, and tell us a little bit about yourself and what the company does. Fundamental Yeah. Well,

TOM LAZAROFF
likewise, I've really enjoyed our conversations, too. It's something that, you know, it's exciting when anybody is in the world of purpose, and especially doing what you guys do on our site is that in a simple way, we just help companies determined that sort of discover their purpose, and then figure out how to build that purpose into their culture, as well as how to tell that as a story to the outside world, especially to customers. That's kind of how we boil it down. And so that's, that's I like the big picture way of doing it involves a lot of having conversations with both internal and external constituents. So understand a little bit about what your company does. And then ultimately, we bring people together in a in a little session, where we have everybody sort of hash some of these things out live and make it turn into a process that everybody is part of.

KJ
Yeah, that's great. No telling me, Tom, because we started Krezzo, only last year, and so we had that burning sense of purpose, still be quite, you might say, proximal to us. You know, and I'd imagine isn't that the case that most companies start out with a really clear sense of purpose? And is it something that maybe we lose sight of as we as we grow?

TOM LAZAROFF
Well, it can be you know, it's interesting, it depends on the kind of company. You know, we a lot of times, we'll work with companies in who are, you know, SaaS technology companies, right, or, and even more, particularly people in the b2b side of things. And they have a general idea about what they can do. I think, I mean, it's like, if they see something go, boy, this, this way of doing things is dumb, we can fix it, and they create a software to do that. But it tends to be very focused on like, an outcome or a function, or a process maybe. And it's less focused on like the human beings, and what they're doing for the human beings. And so they never really sort of put that two and two together, I would say they never really find that intersection A lot of times, and especially God bless technology companies, but a lot of them are started by engineers. And those are not necessarily all of them. I will insult lots of engineers here, but not always the best people who are best at explaining or connecting with people on a human level. And I think that's what gets lost a lot of time. So that's, that can happen in in I think, technology companies. And then as you said, companies can sort of lose track of their purpose over time, it starts to drift. You know, you start out as a company with one product or one thing that you're doing, and then you add another and a third, and then you start to deal with like different markets, where we have this kind of customer and that kind of customer, and pretty soon, what are you. So that's kind of what happens when companies don't have a purpose, it can be either at the very beginning, or it can be something that sort of sort of drifts, and they lose, right.

KJ
So many questions here that are coming to mind. Are we to use purpose, synonymous with identity? Or are they different?

TOM LAZAROFF
Well, in our framework, I think I would say for us, purpose is the foundation, that identity ganache gets built on, identity almost becomes an expression of purpose. You know, so in my way of thinking about it, you have a purpose. But a logo that your company creates would be an expression of that purpose, or a website that your company creates, or a product that your company creates, is sort of an expression, it's an it's an outcome. So your identity is clearly bound up in what your purpose is, but purpose is for us the most foundational thing.

KJ
Right? So is the foundation in which all behavior all outcomes, or all sorts of activity that your your organization engages in stems from? It's yeah, that core? Yeah, we like

TOM LAZAROFF
to say it's your purpose should answer two questions. Why do you exist and why does anybody care? Right. That's what for us. When we create something we create something called a brand purpose statement. That is kind of one of the one of the major outcomes of our work with companies. And it's kind of sounds silly or major outcome of working with people in seven to 10 words. But that's the truth of it, we try to get companies to be able to say in seven to 10 words, why they exist and why anybody should care. That's, that's hard. You know, it's the old, you know, I could have written you a shorter letter, but it didn't have enough time. It's that kind of thing. And it's really hard to get everybody on the same page about what those seven to 10 words are.

KJ
And what's really, you know, crazy is that, some people might just easily discard this as being some metaphysical mumbo jumbo, like, I can't measure it with a, you know, with a KPI or something with a ruler or some sort of, you know, engagement rate. So it's not really as impactful as spending our time doing something else, like, you know, improving our customer churn. But tell us why that's a wrong mindset or attitude to have.

TOM LAZAROFF
But there are there been a number of studies that talk about the value of purpose, not just in terms of, you know, how it makes people feel, but in outcomes of companies and their success. And they tend to, you know, we think of about purpose on on two levels. There's the purpose as it relates to that there's the sort of your customer, your audience side of purpose, and your internal employee side of purpose, and you want something that's going to, you know, create more growth for your company on the customer side, and you want something that's going to create more engagement on your employee side, for your person that does those two things. And those are, you know, successful. And I have a couple of studies that I can I can just point to, if you want me I can share this if you want, if that makes sense. Yeah. Yeah, yeah. So here's your here's your a couple of of studies that were done. This, the first one is a Harvard Business Review, which, which basically shows it, essentially, companies that prioritize purpose, grow a lot faster than those that don't. And what happens is that, if you're if you're prioritizing, like you see here, it's like 10, plus percent growth, about 58% of this, you know, companies were doing that, you know, that they were rowing at that faster, faster pace. The companies who were sort of like in the process of developing it, and getting there were still above the rest of the people who weren't prioritizing it. And then, and then people who are, you know, there are people who are laggards. And among the companies who are kind of laggards who weren't growing very fast, you know, there was there was a just, they just didn't prioritize, it wasn't a focus for them. And as a result, their growth was kind of like, a lot smaller on average. So you know, there's

KJ
a ties that needs to deliberately dedicate attention towards defining the purpose of your

TOM LAZAROFF
eggs. Exactly, make sure that that that you, you have articulated it, and you have made it clear to everybody within your organization as well as externally. So that's, that was one one big side, the other one that we'd like to talk about, and I think this tends to get maybe overlooked at times, is how important it is from a from a standpoint of your employees. So this Bain study showed that, you know, if you have a like, that's a index of satisfied employee indexes as 100, right, if you have an employee who is engaged with the company, who you know, is, you know, sort of, like attracted to what they do and, and is, is, you know, likes their job essentially, is better, better way of talking about it, they were a little under, you know, 150. So, you know, like one and a half times more, you know, productive, let's say, as an average employee, but someone who is engaged and understands and inspired by their company's purpose, is more like to they index up to 25. So it's like two and a quarter times as productive. And if you think about it, it makes sense. There's a reason that you're getting up and, and working long hours, there's a reason that you take the extra effort that you do the other things, because you're bought into an idea that's bigger than just, I'm going to be here for these hours and do exactly what's expected and no more. If you're feeling like you're doing something that's bigger matters, and you get involved.

KJ
So I liked I really liked the quantification of purpose or the impact of it through those lenses through the sort of growth and rate of growth, as well as the employee engagement. And so if you're sitting here, or listening here and as a COO, as a chief of staff, and you're thinking, well, we have a problem with employee engagement. Tension, we have a problem, we're not hitting our goals quick enough. We're not fast enough, we're not hitting our goal faster. You know, this could be a reason. And maybe you could tell me, Tom, in your experience dealing with your customers? Do they realize that? Do they come to you with that realisation that, hey, we don't have a clarity in our purpose, and that's what's hindering our growth? Or do they come with some other sort of problem, the same problem, but they don't realize it's because of a lack of purpose.

TOM LAZAROFF
It's more often the ladder, to be quite honest, more often, the latter, they, they, they're, they don't see it as a cause. They have their other symptoms that they recognize, right. So they're not It's not rowing? Well, our message doesn't seem to be breaking through, we're having trouble differentiating from other people, our employee morale is low. But that tends to be the history of our company is that we have tended to work a lot with CMOS, and CEOs, and so that it sort of comes to us from that angle. But what happens is that we have to take them back to purpose. And when we do that, it engages the entire organization. And that's for us. That's the exciting part. Because, you know, in general, I think the marketing people tend to be more touchy feely, and they get that sort of, you know, like, messages matter kind of thing. But when you're able to engage, you know, like the CFO, and the CFO gets bought into purpose, when the CEO looks and says, Oh, yeah, I get this is why things work better. And and when it can be purpose can then be operationalized, which is what you guys really do. You know, we take it a part of the way in the opera, opera, opera is nation alized, I'll just, you know, the word I'm trying to say. We take it a little bit in that world. But when you turn it into OKRs, and make it something that's really measurable, then the full impact and power can really be seen. Yeah,

KJ
yeah. And that's exactly what we'd like to dive into it a little bit more. And before we get there, I think it's fair to start with, you know, some best practices for people listening here, you know, they, they've listened to okay, this is why I should actually take a minute, reflect on whether the symptoms and challenges we're having are stemming from purpose, perhaps they are, if they are, well, what what can I do to create, perhaps a better purpose clarify or refine our existing purpose? Like, what are some best practices for these folks?

TOM LAZAROFF
I'd say, I think that's, that's a, that's a great thing. And I would say that this is really important. It's not even do you have a problem necessarily, because you might not even know that you have any problem. This is something that just should be general practice for companies, that kind of baseline that any company should, shouldn't, should make it part of their operation

KJ
on a quarterly basis kind of thing. Or?

TOM LAZAROFF
Well, I mean, if you do purpose, right, purpose, shouldn't change that much that frequently. But it's something that you should, you should look at every day. And depending on the stage of the company, it can happen more quickly that Abel evolves, like if you're an early stage company, your purpose can evolve kind of rapidly. But if you've been established, your purpose should be there for at least three, four years, you know, a company, you know, like, you know, Apple or Google or someone like that their purpose is pretty solid. And it doesn't, it doesn't change dramatically, especially like a consumer products kind of company. Yeah, purpose shouldn't change that off. But it is it should be foundational to the operation of a company. I mean, in the old days, people used to create mission statements. And I know that some companies still do create mission statements. And, and I won't go on my full diatribe about why we don't like mission statements. But companies generally understand that there's an importance to that idea. And I would say that purpose is kind of a mission statement to point out, it's an update the idea of the mission statement. And once you get that idea, then it becomes something that everybody goes, Oh, okay, you know, so, I'm on a, on a on the basis of best practices, there's sort of four things that we like to do, and we always like to have a mnemonic that we can call on so that people can remember and ours is is vibe VIB II, the four pieces of it for us and the first one is purpose, purpose has to be visionary, right, that's the V. And when I say visionary, it doesn't have to be something you know, incredibly groundbreaking or profound, but it has asked to express something beyond just say talking about, oh, you know, we make cars. You know, that's that's not a super inspiring kind of thing. And a lot of companies think about or talk about in, say mission statements. They're inextricably bound up with their products. And unfortunately, that number one, that's very, very limited. Okay. So from a, from a strategic standpoint, at some point, you may need to pivot, right. And if you're, if your purpose is bound up in one product, that makes it very, very difficult for you to pivot because it's the DNA of your company. So you want a vision that's going to be bigger than just one product. So, for instance, we talked about brand purpose statements for companies like one would be Google says Google's purpose is to immediately satisfy every curiosity. Okay. They don't talk about search engines or phones, or Chromebooks, right? It's about satisfying the curiosity immediately satisfied. So that when we say visionary, that's what it means. It's, it's bigger, it's about an idea about solving something. And again, for human beings, what do you do for human beings?

KJ
Right, you're taking it a level above, and you're almost as well, expressing an ideal future that you wish to strive for, you know, it's this, it sort of this is what we want to be. That's the vision, right?

TOM LAZAROFF
Yeah, it should work for. And again, I'll put this in the b2b context, but it should work at three levels, right, it should work for the individual, you know, customer buyer purchase decision maker in the company, then the second level is that that purpose should also make sense for their company in general, for the whole organization that you're working with. And then finally, it should make sense for the world you're doing something that's doing that's helping the world in some way, shape, or form. So if you think about Google, you're satisfying the curiosity of a user. Right? But, you know, if you're, if your company is working with Google, and they're using G Suite, it should help the people who the company, figure out the things that they need to figure out and then for the world, it's helping people gain knowledge, right? It's doing something big. So sort of like three levels, that should really work.

KJ
It's a good litmus test, actually, yeah. To test it,

TOM LAZAROFF
you know? Yeah. And then, you know, we also the other thing, when we say this, it's kind of built into it, but the the statement should kind of your purpose, it should pass what we call the granny test, which is that when you say it to your grandmother, your grandmother should go Oh, yeah. Yeah, like, generally get the idea. And it so you shouldn't, you shouldn't be using fancy words, or, you know, should be really basic and straightforward. Yeah. And that's, that's what we think makes purpose valuable. So visionary would be kind of like the first one, you know, so visionary, but understandable by grandma.

KJ
Right? Yeah, that's, that's what we apply to our product development as well, like, I don't want to every feature we build needs to be understandable by grandma as well.

TOM LAZAROFF
So, so then then the second one is a little bit more about process. But that's the AI and AI is for inclusive, okay, and so when we say inclusive, we mean two things. First, when you create your, your, your brand purpose, or your company's purpose, that has to be a process that involves as many people as possible within your organization. And in larger organizations, it means that every department has to be part of, and that you might not obviously, you know, it's untenable to have 1000s of people or even hundreds as part of it, but you want a good representation of the people within your organization. And all the keys constituencies. As I said earlier, CFO should build purpose, CTOs should build purpose. And generally, so the C level people, like that's a, that's a, that's a non negotiable, C level, people all have to be part, that's number one. You can then go usually, it's good. In an ideal circumstance, you go down one level from there, too. So you have, you know, CEOs and then C level people and probably their director. But you really want to have everybody in the organization have a voice. And there are a couple of reasons for that. I mean, firstly, you know, something that is brought to everybody and just laid on a table or presented in you know, some presentation says this is our purpose is hard for people to buy into, you know, it just seems very foreign, right? And it's, it's completely without context, generally speaking, it's hard to really get around that but when you've been you involved in that when you've had a stake, and then you also have a stake in that success, and you understand why it's important, and why it's valuable and why it was created the way it was. So, that aspect of it about being inclusive and bringing everybody into that process is like, hugely important. And something that we think is, is, you know, Sharpies,

KJ
well, you also have an accumulation of brainpower behind it, and diversity, which brings with the different perspectives, and that can unlock a whole other element of potential to what you could write as this.

TOM LAZAROFF
Exactly. Because, you know, you know, purpose is not something that, that any one part of the organization, or any group or one group of people is better at figuring out than the others. You know, it's it's, it can come from anybody, and having all those people represented, is, is really critical. So, so that's like, that's the internal and the other piece of it when I say inclusive about purpose. The other fundamental part of this is that it has to come from a really deep understanding of who your customers are. You have to really at a very deep, deep level, understand what is driving the people that you're, you're you're working with? Who are going to be your customers? What is it that they are trying to do? And what's the intersection of what you deliver, that they want? And I know that sounds very basic. But it's astonishing to me how few companies really have a deep understanding of their customers. Yeah, you know, there's there are a lot of companies, I think personas have become pretty generally accepted and recognized today. But but they, even when we see them now, they tend to be very functional, about people, they tend to be very sort of like, this is what their job is, and this is what they are trying to do. And less about, like, what it's like to be them as a human being, which I think is probably a is for us always the more valuable question. How do you? So it's, it's not how does your product? Help them? It's, it's where does your product fit within their world? Yeah, now there's, there's kind of, it's interesting to me, there's kind of a hubris about a lot of companies, that they sort of, they all assume that their product is the most important thing for everybody. Oh, if I just had that one thing, I'd be happy. And it's never the case. And if you approach people with that kind of mindset, when you're trying to make a sale with them, I think you're you're you're going to be you know, unpleasantly surprised. So you really kind of have to see how you fit into their world. And also, go ahead, what were you gonna say?

KJ
No, no, no, don't don't stop. That's exactly. Yeah, that's kind of what we all think, right? We all spend so much time thinking internally about how we could, you know, be better, but really, it's empathy. It's what you're alluding to is like, empathy and sales and anything but especially with this now with, you know, developing a purpose. You, you can't make assumptions about the people, the customers. Yeah, it's the external world.

TOM LAZAROFF
Yeah, you can't. And I think I think empathy is like, spot on. I mean, that is exactly. It's, it's, it's how do you fit into what they're doing? And helping them do? Do what they want to do? You know, in b2b, it's how do you help them do their job better? Yeah. Yeah. Whether or not it's related to your product, that's what we're about.

KJ
So vibe, visionary,

TOM LAZAROFF
inclusive. Okay. And this is, this is the one that I haven't been so far. That's brief. So, so it's seven to 10. Words. Yes, no exceptions. If you can't say it in seven to 10 words, not worthwhile. Part of the part of the reason for that is no one will remember it. Seven to 10 words, people can remember it. And so it can't be remember, if it's long, people can't remember it. And if it's long people won't share it. Right? If I can't remember it, I can't share. And what you want is for it to have almost like a viral nature. You know, you want to you want your employees to immediately grasp it, internalize it, and then turn around and and say it to other people. And it becomes something easy. And so, you know, brief is really critical for us. I mean, and that's why we hate mission statements, because some mission statements are like 150 words long. And after six words, who remembers who cares?

KJ
Yeah, it does. It needs that mantra. It needs that sort of elements. It's just very easy to share.

TOM LAZAROFF
Yeah, 100% and so the B, the B was actually brief, that's good. Um, so then the E is the only one that's left. And that's, and that's for us emotion. And I think it kind of goes back to what we were just talking about as it relates to and, you know, I emotion from so many, in so many ways is so crucial to a successful business or, you know, a successful product or a successful relationship in any way. Yes, and, and what you know, so first, there are the sort of neuroscience kind of things that have identified how important emotion is, in creating memories, and also for decision making. That, you know, as much as we all like to think we're scientists, we are mostly lawyers, we don't look at facts and then draw a conclusion, we draw a conclusion and find facts to rationalize them.

KJ
Remember saying, correct.

TOM LAZAROFF
That was, that's how the brain works. That's how our brains are wired to do that. And, and, and, you know, and but I, you know, I think it's even better summed up by, you know, Maya Angelou, the poet, right, this who said, and I will butcher this, so, you know, my, forgive me, but, but it's, you know, people will you people will forget what you say, and people will forget what you do, but they won't forget how you make them feel. And ultimately, that is what you in any with any product or anything that you create, as a business are trying to do is to make somebody feel good. Make them feel in a way because, again, they'll remember you. And they'll have that, you know, so that they'll their overall feeling of working with you will be Yeah, that was they were great people. And then I'll find the reasons that you

KJ
were great. Yeah. What's really interesting, yeah, sorry, to cut you off. What's really interesting about that, I mean, that's a fantastic overview, and simple way of helping someone even just immediately grasped what purpose is and how to build a great one. What's interesting is that all of the elements to vibe, visionary, exclusive, brief and emotional, all of those elements are applicable across all facets of, of business, like, we could easily apply that same principle to, for an example, creating an objective, you want the objective to be a visionary, you want it to be brief, you know, so it's memorable, you want it to be emotional, so that people get behind it. So even I love that you're bringing those best practices to defining a purpose, but even defining as simple as what you're going to do for the day, you know, someone could easily just use that same acronym, those same things to do that as well, which I really like.

TOM LAZAROFF
Yeah, I mean, as as, as I've gotten older, you know, it's, it's become more and more clear to me that, that the emotions are really point of the realm. And that we're all I think the world is I think businesses is really catching up to that idea. Yeah, but that that, you know, say sales, you know, especially like, I think about the SAS software world. I mean, I've been doing this for a long time in SAS hospital software, and the companies that started out in that world, were all just sales driven, make the sale, make the sale, make the sale, make the sale? That's all they thought about. Yeah. And and what did they make? They made the term, right, because all they cared about was delivering that sale. It's taken 20 years of SAS for them to come around to realize that what they're actually creating is a relationship. The relationship, you know, the data supports the relationship, if you can show them data that says, hey, this is working, that's great. But all the data in the world doesn't make them feel better if the relationship is not a good one. I

KJ
couldn't agree with you more. Jesus, you're just speaking the language. This is exactly it. I mean, we could have a whole separate conversation about that. But you're 100%, right. There's so many, you know, derivatives of that, like people buy from people they like, you know, all this stuff. But it all comes back to exactly what you're saying. It's completely driven by emotion. So you can get so fixated on sales, metrics, different things, but it's all about a as you say, how you make people feel, yeah, building a relationship. It's like returning customers or you should treat them just like you would have any long term relationship with your wife, your spouse, your partner, their people you're supposed to, you know, build a long term relationship with

TOM LAZAROFF
Oh, 100% 100% I, and, and so, so, so purpose. So if purpose is the foundation of the company, then the foundation of purpose is in motion for us. And, and for us. I mean, I can, I can just briefly I'll take you through it, as long as it's okay with you, I'll take you through a quick look at what we've we've over overarching our time doing what we do, we've, we've come to the conclusion that there are really only five emotions that are worth a damn. And I'll show I can show them to you really quickly. The first one is what we call societal impact and innovation. Companies that are built around the need to just change the world, right? And if you think about companies like Apple, or Tesla, or three em, like they really, it's in their DNA, we're just here to change things. That's what we're trying to do. So yeah, we're gonna have products and things that do that. But, you know, even like, post it notes and things like that for three hours. I mean, it's like, we want to change how people do what they do. It's important, and it's part of who they are. So then, the second one is we call it happiness and contentment. And it sounds kind of obvious. There's a, there's a spectrum of this, what you're doing in a lot of cases, for companies, some are just like Disney, that's easy. It's the happiest place on earth, right? You're just going for enjoyment and happiness. And, you know, there's that. And you could say that some degree, anything is related to that on some level, which is true. But there's a spectrum of that. And that also goes into things like contentment. And this becomes really important. This is like, the insurance industry, right? It's, it's, I got an insurance policy. And now I know that if if I pass away, that my spouse or my children are going to be taken care of certainty, certainty, yeah, and confidence. Exactly. They're all bound up in that. So certain companies are in that world. And what they're doing is just giving people like a more like, don't be so anxious, don't be so stressed. The other 1/3, one is connecting in community. And that's a very fundamental, fundamental human balance. These are all things that people at our core have to have. And some, some countries are better than others. So like Facebook, is all about connecting the community. For a long time, pre pandemic, Starbucks really was about being the third living room, it was it was more about having a place to vote wasn't it's changed a little bit in that respect. But there's still an element of connection that happens through Starbucks. And it's it's a place where people gather are a place where people go to connect, and a lot of respects.

KJ
So ensures that none of it the coffee anyway.

TOM LAZAROFF
I don't know if it ever was so yeah.

KJ
Dark soup and a bowl and give it right.

TOM LAZAROFF
So then the third one, I touched on this curiosity and exploration, you know, Google, as I mentioned, but Patagonia, right. That's a company that makes clothing ostensibly. But really, it's just to help you get out there and explore the world. It's a vehicle to explore the world. And that's what's pretty exciting, that Patagonia, interestingly has kind of moved into societal impact and innovation, they're about changing, saving the world some degree, but a lot of it is still exploration, getting out there and seeing what's out there. And the last one, is that very self serving pride and ego. And this tend to be generally a luxury brand kind of thing. So, you know, Mercedes, you know, or Rolex, anytime that you see, you know, people with a Rolex on in some world, right? It says like, well, that person is made it or they've spent an inordinate amount of money on it, or they have a fake, right. But it's it's a, it's about stats, it's about saying like, I am somebody who worked. But interestingly, SAP you know, the company in the software world, made a living for years being on best run, businesses run SAP, that was 100% of play to the egos of every CFO and controller out there saying you're part of the club. So for us, we try and help a company isolate, which one of these is really going to be their foundation, where, where it's a building block to get to the seven to 10 words. So it's just funny to think that you have to get a building block to seven to 10 words, but you have to have a place to start. And this is what we help companies this is the first thing we help them to do is as a group, come together and decide what are you really about among these five? Sometimes it could be about like to buy an Apple was really killing it in the early 2000s. You could make an argument for all five but yeah, but generally speaking, you know, it's, it's, it's usually one and then maybe two that a company is all about. And so everything that you should be doing should be pushing towards that and then that's how you build a statement. You You understand that and build off that

KJ
site. Excellent. And so now let's get to, you know, an interesting part of it, where we've applied all of these best practices, teams have been very inclusive and gauged and come up with something that they feel strongly about. Is there a talk me through then the process that you do with them? You know, you review it, I imagine you all try and poke holes and imagine, and then you, when everyone's sort of given the thumbs up, it's about, okay. This is the question reduction of us. Have you then begin utilizing the purpose?

TOM LAZAROFF
Yeah, so So and I'd say, there's one, one little part that I want to touch on intermediate before that, which is, you got to prove it. So you have to go back and look at what specifically about your products or services do you do that delivers on that emotion in that purpose, right. So you have to go through and say, here are the things that we do, here's this product that we do, you know, it gives you more confidence in what you're doing. And therefore, you know, it makes sense. And here's how it is here, like the features and things like that, you know, and anyway, so you get that point, that's really important, because then it's sort of like the, you know, you're testing it, as you sell it. Then there it for us, it kind of bifurcates at that point, there are two things that have to be done, we have to figure out how to communicate that to our to customers, we have to talk about that in a fashion that's externally standing. So a brand with the seven to 10 word statement then gets, it becomes it has to be expressed some way. So Red Bull seven, that 10 word statement is Red Bull energizes the world, right? That's, that's what they that's, that's the statement, but you don't see that in public. The line that they use is Red Bull gives you wings, right? So you come up are part of our job is then come up with a nice, flowery, catchy way to say it. And then there's a whole communication piece of you know, building things that you know, your How does your website, look what it's say, you know, how to your materials to your customers, your social media, all that stuff. But then there's the communication

KJ
back into the employees into the team. So it's going to ask internally, what about then

TOM LAZAROFF
then becomes so one of our first steps is, now we take the grand purpose statement? And we say, okay, if this is what our purpose is, what are the behaviors that we value that will help us deliver on this? What are the what are the ways the sort of the ways of conduct of our employees, how we interact with both our employees, and with our customers that are going to help us to achieve that goal. And now this is there's some artistry to this. But, you know, this is where, and we're not. What's interesting is when most companies talk about values, this is the kind of thing that they talk about, is these are what we call operational values, different than the values that we just talked about, which are the fundamental human emotional values. Now, these are more like behaviors. And it's important to separate because those behavior values without the context of purpose become kind of meaningless. They're just sort of platitudes. I mean, you know, every company values, transparency, right? And if you just say, Oh, well, we were big on transparency. It's like, okay, are you big on breathing oxygen to? Really, I mean, a shock, but how does it relate to the purpose? If you now relate it back? Here's why transparency is important to our purpose of giving people contentment, or confidence. Okay, why does it do that? And what is it that helps us build that? Yeah, so we work with companies to, to look at about at no more than five, no more than five, I mean, three to five is a number that we always say. And so And even better, and again, like mnemonics, like we try to build it into a new mnemonic, so that it makes sense. So, you know, we had we had one company, who we did some work with, and and their value was that they wanted to they were in the in the world of during the world of expense report management. Basically, they do software that helps companies manage expense reports, but also like accounts payable and things like that. And their their purpose was to they wanted to humanize work. They wanted to make work more human, instead of having people do grunt work and things that they hated. They wanted them to do the things that were important to them, and to get stuff done and to feel good about itself, right? And and so that was that was kind of where we were with them. And, and so there were five core values and we came up with the, you know, memory thing that it was the five things were sincerity, empathy, empowerment, individuality and teamwork. And we turn that into two words, see it? So I can see it says sincerity, empathy, empowerment, individuality, teamwork. And what we do is that we say, as I said, How does each one of those work for your customer? And how does it work for you, for your employee? And those then get to be part of ingrained in the things that you value in your culture? So then it's about taking those things and working with the HR team to then say, how do we build that into our employee reviews and evaluation? How do we start to say, we, we, we need you to demonstrate more more empathy, or you know what, you're not as good about helping, you know, individualize the things that your team members need, we want you to focus on being more individualistic, in that sense. So it's, so it's all those things start to get built, and then you can start to evaluate people on that. Yeah, that's one thing. And then there are little things like, there are things like bonus Lee, are you familiar with that one? Yeah. So so things like you can do in Slack. So you encourage people to point out when someone's done something for you, that that promotes one of those five values to say, hey, you know, what, thank you for being transparent. And you, you know, you bonus lead them. So, you know, to say that, so it's little things like that, but then they become part of the overall lexicon. And eventually, you know, they go from being these sort of platitudes, and in companies that don't have a connection to being culture. Yeah. And that's ultimately what we are trying to help.

KJ
Absolutely, yeah. And I like the way it sort of grows like a plant from its seed, you know, which is the purpose through to, okay, let's sort of break this down, try to operationalize these seven to 10 words with, you know, almost like pillars or values to then use throughout and then you use the values, but connecting the values, like the see it acronym you used to the purpose is having an alignment, I suppose, between everything, because, again, we would, through our process with customers, encourage them to use the exact same principles as vibe, but sort of define what the vision for their OKR program is. And that's a piece of operationalizing their purpose, but you want to define, you want to begin at the end, and really define Okay, when we successfully have implemented OKRs, what does that look like? And that can be sort of a derivative from the purpose and from the values that come from the purpose. So it's all you want it all interconnected, right?

TOM LAZAROFF
It really it is it has to have, you know, it has to hold together. You know, there has to be some, some glue, that there's a logical progression from one thing to another. And, and I think that's, you know, as I said, I mean, that's, that's why we don't, we don't like mission statements, because they end up being sort of disconnected. But it's like, Okay, I'm going to do my mission statement. Great. Now, I'm going to do my values. Now I'm going to do you know, yeah, that all is one piece of the same puzzle that they have to otherwise they're just, they're just little, you know, they're empty words. It's what ends up happening, right? You're just empty words that no one believes. And in fact, they have the opposite effect. Yeah, if no one believes them. They just feel inauthentic and they disconnect people.

KJ
Yeah, they discriminate? Well, yeah, I think that happens quite often, you know, is they become this become considered from people who pray may have not been involved in the process, or maybe further down the food chain as being corporate mumbo jumbo. And that perhaps, of good has given it a bad name, but it loops, right back to the sort of data that you showed earlier. You know, and this is the question I was going to ask was, okay, you know, the companies that have prioritized their purposes you had and the employees are working more purposefully. Do, do you only do the companies only achieved that by operationalizing their

TOM LAZAROFF
purpose? Well, you know, it's, that's, I mean, that's a good question. And I'm not I'm not going to say that it can't have happen without operationalizing their purpose. But, you know, it's, it's sort of leaving it to chance, if you don't, and, and you can, you either have the option of actually, you know, doing everything that you can to ensure that it happens or sitting and hoping that it happens. And you know, I'm, I'm a much bigger fan of number one then number two, some sometimes companies have a culture that's just built around like a, you know, it's super charismatic leader, you know, and, and the culture gets built around that person. And man, it just happens organically, you know, and they never really bothered to write down some of these things. That's not, that's generally and actually, and that becomes problematic when that person leaves by the way that person retires and your identity, you know, your your purpose is bound up in who that person was. It that's, that's a point where, like you said, disintegrates, it's more diffuse.

KJ
Yeah. So what if I flip flop the question, then if I, if we look at something like, okay, yours, and you're essentially operationalizing, this purpose through goal setting, you're setting objectives on a quarterly basis, and you're setting the key results that quantify those objectives. This is at a much as I say, for operations leaders, they need to ensure the business is moving is everyone's round in the right direction. So they incorporate a methodology like that to do it. My question is, will that methodology fail? If the purpose is not done beforehand? If you

TOM LAZAROFF
can, it can, I mean, yeah, I think I think it's more if they don't have a clear path to get to their purpose. I mean, you know, it's not going to, it's not going to be adopted, people aren't going to engage with it. And it's not, it's, it's going to be inorganic, and authentic, and doesn't become part of the culture and becomes that thing that sort of hangs out there. And people sort of like joke about, like, yeah, those values are so dumb, you know, it's like, you get the eye roll kind of thing. Yeah. And, and when we, you know, we have, we have at least a couple of things that we can point to, and again, you know, in the, in the realm of trying to understand how we fit into our customers world, ourselves, I'm not going to take take, you know, the credit for, you know, being the reason why a company succeeds, you know, by helping them figure out their purpose, there's a lot of work that gets done after we do our work. God knows, I mean, we're a small part of it. But um, I mentioned that company in bursts. And, and so, again, now think about them, they were in a industry that's strongly related to travel, right. I mean, there aren't as many expense reports, if you're not if there's not a lot of travel going on. So we work with them finished just before the pandemic. And you would imagine that a company like that is going to hit a big downturn. Well, in a year, when their overall industry revenue dropped by about 9%, they grew by double digits. And, and they ended up being the fastest growing company in their category, nearly twice as fast as any other competitor, they grew. So that's, again, back to that those two studies, I showed you, the growth component, right? There's the growth piece of it a tap on the other side, on the other side, they did some work. And I have to tell you, this is a company that had seven different businesses being seven businesses all being rolled up into one, it was a it was a consolidation kind of thing. So and they were all seven companies that had seven different locations, seven different cultures, seven different organizations. And one of them was a company that had a very, very bad morale. And, and so it was, in fact, when we started to work with other people, the HR person told me Subsequently, she said, when I heard we were going through this process, I just want like, this is the last thing that I want to do. Like, because it's such mumbo jumbo, right? And she said, it turned out to be something that was super valuable for them. So in their organization, versus like an average company, their alignment with core values. 73% greater than average

KJ
company. Yeah. Which makes me really think it's, it's a prerequisite, or at least you've mentioned, you've mentioned the word foundational probably three or four times in this conversation. And it makes a lot of sense. Like, you know, someone who doesn't have a purpose doesn't really have a direction doesn't have anything so I guess it is the foundation in which you can then build Things like objectives, key results, you know, you can start to operationalize this purpose just but it has to be there at a foundational level. It's

TOM LAZAROFF
you have to put a stake in the ground. And have everyone understand and buy into it. I mean, look, as I said, there are companies that are chaos that succeed. Yeah, no, but But it can't, it can't sustain itself forever. This is sort of a long term way of, of, you know, creating success.

KJ
And do you do? Shit?

TOM LAZAROFF
Can I just jump in with one more thing, while you while you gather that there's one more statistic and wanted to throw at you about this, this client of ours? So employee Net Promoter Score? Are you familiar with that? The Net Promoter Score? Yeah. So it's, how likely are you to refer somebody else to work at your company are likely to say, hey, you should come and work in our company. Yeah. Four and a half times greater than average companies. After that period of time, we do the work. And, and, you know, again, correlation isn't causation. But if you talk to the CEO, you know, he has been extremely complimentary of, of the value of what they've gone through and building purpose. And really, it is, every day, something that is visible in that organization.

KJ
Yeah. And, and it's, it's never too late, right?

TOM LAZAROFF
It's never too late.

KJ
It's never too late to do this, even. And even if they do it, I feel like, you know, we have a strong grasp of our purpose, but even just having a conversation, I think it'd be a great exercise to sit down just with our team and talk about it, you know, it's pretty overlooked, I feel, you know,

TOM LAZAROFF
when we'd have we, we love to do there's, we do a little seminar that we do with companies, it's a it's a sort of a session that we do, and we work, walk people through it. And it's, it's a great exercise. It's, it's not only just the outcome, but it's, you know, it's the journey,

KJ
it's the generates the clarity of thinking you get from just mentally reflecting on this idea.

TOM LAZAROFF
It's tingling, really, I mean, it ends up being a real team building. And it's not something that they do in their normal day to day. Yeah. And to be able to pull away and, and to really think like, why am I here? Yeah, you know, why am I why am I why do I spend all this time at this place? What am I really doing? And why does it matter? You know, that's a valuable exercise for people to have,

KJ
ya know, if you think about that, a lot of these young people are doing that nowadays as well. You know, they want to, they want to know why the hell they're even getting up in this world and going to work every day.

TOM LAZAROFF
kJ that is, that is so important. That is so cool. I mean, as it from a generational perspective, you know, old farts like me, you know, back in the day, we didn't question that stuff. You know, it was back then we didn't really say but, I mean, people who are who are younger, that is a baseline for them. It's just like table stakes that like, I'm not even going to consider working for a company. Unless I know why I'm doing it. Unless it's understood. And, you know, especially the smart ones. I don't know about you, but I want that kind of person to be working for my company, not the kind of person that's like, Oh, I'm here because I got a job and I need to pay for my

KJ
apartment. Yeah, no, no, it's, I think, I don't know, maybe it's just just the people I'm surrounded with, they can only give that but it feels it feels like all these generations. You know, coming up now, who will be the next generation of leaders are questioning, I'm acutely aware of the purpose in their lives, you know, very acutely aware of this. It's not their, you know, I'm not I'm not connects to their goals immediately, because, well, if I understand if I can understand the purpose of this company that I'm working on, than this goal, I have this okay, or that I have isn't gonna turn me on either, you know,

TOM LAZAROFF
yeah, I It's so true. It's so true. We get a lot more pushback on this from the older folks than we do on the younger ones. The younger people jump into these exercises and workshops with both feet, they are excited about this. And I think that's sometimes surprising, actually. But, and for us, and I said this previously, what excites us about what your company does is the ability to be able to take that that purpose and really operationalize I mean, you go way further than than we do and, and it becomes you know, ingrained and how an organization operates, you know, the purpose isn't just some set of empty words.

KJ
Yeah, you got to anchor it in there. Yeah, you got to do that on a recurring cadence, the OKR methodology has that cadence built into it, which is the nice repetition that you need. And yeah. And maybe to, you know, finish off like, could you tell a few folks who have been impressed? I'm certainly impressed with the knowledge you've shared today where they could find more about you and about the company and how to get started where to find you. Sure.

TOM LAZAROFF
So you can reach me, our website is fundamental. brand.com It's all one word. It's a lot of typing. But I promise it'll be worth it. And you can also on Twitter, I'm at fundamental Tom. So you can come and find me there. And yeah, you know, and I have to, and I will say this in advance, you know, we just switch over, I have a personal account that was kind of like everything in the world that I like to tweet about. And I finally had to, like, separate it out and become like, Okay, now I'm just like the business fundamental calm, which I'm less excited about, in some ways, honestly, like, I like to talk about Arsenal soccer. And that's like, one of the things so I'll do that 1000

KJ
photos in the pub like,

TOM LAZAROFF
exactly. That doesn't build business. So well. So yeah, at fundamental time, you won't see a lot of a lot of tweets yet, but it's an easy way to reach me. And or come to the website. But yeah, we would love to work with companies and help them find their purpose and make it something real.

KJ
Well, I really advocate them encourage people to do that. Because it's it's been a pleasure to talk with you about this stuff. And I'm sure engagements that you do have customers are even more special. So listen, thank you so much, Tom, for your time today. And my

TOM LAZAROFF
my pleasure and thank you for the invitation. I really enjoyed it.

KJ
Yeah. Thank you. All right.

Transcribed by https://otter.ai