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May 31, 2024

The Importance of an Agreements-Based Culture

In this episode, Mark and Cole discuss the importance of an agreements-based culture within companies. Mark shares his thoughts on the impact of climate and culture on business and the significance of transparent communication and feedback. Tune in to learn more about what an agreements-based culture is and how it can help shape your organization for the better.

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Cole Abbott (00:00:01 -> 00:00:57)

So today we're talking about creating an agreement space culture. Yeah. Right? Yeah. Something we, uh, Emphasize strongly Mm-Hmm. <affirmative>. Right. And, uh, I think it's one of the, one of the reasons now that we're, you know, we're, we're getting into quarterlies Yes. And across all these different departments, uh, we we're hearing that, you know, things can be a little bit of a struggle and get chaotic, right. Just with, with family things and, uh, everything going on. And people are, are really appreciating how there's the impact that that sort of culture has on a team. Yeah. And it, and it's cool to see that, uh, be consistent across different teams in different departments. Yeah. So, you know, it's, it's a real thing and not just a, a micro culture. Yeah. For example. Right. Yeah. So I guess to start off, Uhhuh <affirmative>, what is an agree based culture? Well,

Mark Abbott (00:00:57 -> 00:07:36)

I think, um, you have to actually go a bit bigger there, right? So what's culture, right? And is culture important? Right? Um, and I mean, we could spend hours talking about this, right? But from a business perspective, you go to the famous Peter Drucker line, which is culture, eat strategy for breakfast. And so what is culture and, and why does it eat strategy for breakfast? So, so culture is sort of the, the behaviors, uh, and the artifacts and the stories of a group of people. And, uh, you know, culture is, is every single company, every single group, every single society, you know, they all have cultures. And now, you know, what are the differences between cultures? I'm trying not to go like down some rabbit hole here, but there's a really compelling research out there that, uh, I came upon over the years, um, in various ways from various types of people, from economists to, um, sort of, you know, uh, you know, anthropologists to all these different types of people who's been studying culture. And one of the things that many, many years ago I became intrigued with was, there's two primary kinds of culture out there. One's called Poly Chronic, and one's called Monoclonic. And, uh, the concept behind Polly and Mono goes all the way back to a guy named Edward T. Hall and in the fifties, and, uh, I think get some of my, my people bit, bit messed up, but, you know, I think Hall started by being like in the foreign services for the, for the US and traveling all over the world. And he started just noticing some of these differences. Long story short is the, is is the big difference between the polychronic culture and the monoclonic culture. One of the big differences there are several is, uh, relationships versus agreements. So you have these, if you wanna make it super simple, and there's a lot of, you know, value to simplifying things. Obviously at some point, if it becomes too simple, it doesn't have any value. But I think this is a pretty valuable construct. It's less, less is more until it's not. Right. Exactly. Don't get to the until it's not. Yes, exactly. Exactly. So, you know, polychronic cultures are, are focused on the relationship, and, um, and they actually have a different perspective with regard to time, then monochronic cultures, which are more about agreements. And, uh, as I said, they're, they actually have a different relationship with time as well. What the most recent research shows is that climate is actually a really big driver of whether or not your culture leans, you know, more monoclonic than poly chronic. And, um, and the question is why, right? And, and what the research, uh, strongly suggests is that, you know, the closer you are to the, the better your environment, the better your climate. Right? And there are a number of different factors that go into rating one's climate. It's not just temperature. It's, it's the nature of the topography. It's the nature of the soil. It's a whole bunch of different things, all of which, by the way, are measured by nasa, which is really cool. So you can literally measure every single society's relative climate. And when they apply the relative climate, um, measures to poly versus, and, and, and, and then look at the cultures through, are you more poly or mono? What they see is that the, basically the better your climate, the easier life is, and the more you can lean into relationships and sort of, you know, living day to day, you can wake up in the morning, you can go out and you can either hunt or you can fish. You come back in the afternoon, you can prepare your foods, you can enjoy it with your family. Maybe you get together with friends, you know, at the pub, or, you know, whatever it is or at, at the local, whatever. And I don't think pub would be the right one. It's not the right one. Exactly. But, but then, you know, you go to sleep and you wake up in the next day and you do it all over again, and it's like, it's pretty good. So you don't have to have a lot of rules and a lot of agreements. Um, and, uh, as opposed to you move like 3000 miles north and you move into a more, into a harsher environment. And now all of a sudden, in particularly one where there's seasonality, and now all of a sudden, you know, you gotta prepare for winter and you gotta divide and conquer, and you need more people. And then you have stuff to save. And if you're saving stuff, you have stuff to protect. And, and just life becomes much more complex. And part of the complexity is we now have to have agreements and we, you know, need to have laws and regulations, and now we're protecting stuff because there could be bad people coming. And it just, just becomes so much more complex when you, when you move away. And so ultimately, you know, you have these polychronic and monochronic cultures that are climate driven, which is really kind of cool. And the r squared is actually pretty compelling. Um, and so you can look at the climate, you can look at the cultures. So now what's this have to do with business? Right? Well, the the reality is, is is that when people are working together, when the, when, when the organization is small, things can be implicit, right? Because we're, you know, we're talking about stuff, we're all together, especially small. And if it's everybody's working in the same office, but the bigger you get, the more important it is for you to have agreements and then to make sure people honor the agreements. And if the agreements don't make sense, of course we need to talk about that. But ultimately, you want to get a culture that's more agreement based than relationship based, particularly if you're growing fast. And in particular, if you have people dispersed all over the place. Um, does this make some sense so far?

Cole Abbott (00:07:36 -> 00:08:38)

Yes. Right, right. I think that the key components are growth. Yes. If, if you're growing very quickly and you have a larger organization, as you will, if you're growing quickly Yes. Right. Those layers of separation, once you, once you have, you know, over 50 people Yeah. It's gonna be harder and harder for people to implicitly just get it. Yeah. Right. If anybody who's built a company knows once you, you're gonna hit a point where things become harder. Yeah. 'cause you, you were fortunate to surround yourself a with people that just have a intuitive understanding of where you're going. And B, you have so many, you know, points of contact with all those people as, as a founder, as as a visionary, or CEO. And so it, you know, it will get reinforced implicitly like that. But when you have more layers to organization, and a lot of people have never really spoken one-on-one to the, the CEO Yeah. Is you, how do you expect to, how do you scale that? How do you scale that? Right? Yeah. Because then you're just playing a big game of telephone. Yeah. Right.

Mark Abbott (00:08:39 -> 00:08:40)

And we all know how that works.

Cole Abbott (00:08:40 -> 00:08:41)

That doesn't go very well. No.

Mark Abbott (00:08:41 -> 00:09:02)

And then, and then, and then take into consideration that more and more companies have some form of hybrid, right? We're a hundred percent remote, right? So we have 170 people, you know, not just almost across all, you know, all the way across the country, right? We go from Maine to Seattle, down to San Diego, down to, we

Cole Abbott (00:09:02 -> 00:09:05)

Have, we have Maine, Seattle, la, Miami, right? We,

Mark Abbott (00:09:05 -> 00:09:35)

Yeah. We're all Texas. I mean, we're all, you know, everywhere, right? Yeah. Um, and, uh, and so just growing and scaling with hybrid or remote is hard. And I would submit that every company has some form of hybrid, right? I mean, I know there are a bunch of famous CEOs who, who, who don't like hybrid, but the reality is, we're all, you know, they're running around, right? And so everybody's dealing with some form of hybrid, right? Um, almost every single company's dealing with some form of hybrid.

Cole Abbott (00:09:35 -> 00:09:54)

And it's, it, it is harder. It's harder, it's Right. Versus in person, especially from a CEO, if you have not implemented this kind of culture right from the start. Yeah. Right? And the good thing about us being fully remote is we are really stress testing the system. <laugh>. Like, if it can work fully remote, yeah. It's gonna work even better. Hybrid is gonna work even better in person, right? Yeah. Yeah. It's just a discipline. Yes.

Mark Abbott (00:09:54 -> 00:10:03)

So now, um, you know, as I like to say, uh, you know, I, I, I paraphrase the Six six Senses. That's the name of the movie, I think, right? Yeah. The

Cole Abbott (00:10:03 -> 00:10:04)

Bruce will one, the

Mark Abbott (00:10:04 -> 00:10:34)

Bruce Willis one, right? Yeah. Where, you know, they, you know, he sees ghosts everywhere. I say, I see agreements everywhere, right? So what are agreements, right? Our core values are agreements, our purpose, passion, and just cause are what we like to call our compelling. Why is an agreement? Our unique value proposition is an agreement. Our ideal customers are agreements that our organization chart shows how we divide and conquer. That's an agreement. Our goals are agreements, our to-dos are agreements. I see, I see agreements everywhere, right?

Cole Abbott (00:10:34 -> 00:11:03)

Yeah. These are not, these are beyond expectations or implicit things, right? We're moving past that. Yeah. And making everything explicit and stated. You can find it. And if there is any disagreement or discrepancy, it's like, Hey, it's there. You've seen it, you've agreed to it. Yeah. Right? And, and we're, we're still in the process of rolling out more things Yeah. Like our, our our principles and everything, and more things that are going to become agreements Yes. And, and creating a super strong foundation. And we're, we're in a, not a bad spot right now, but No, it's

Mark Abbott (00:11:04 -> 00:11:04)


Cole Abbott (00:11:04 -> 00:11:06)

How we know it can be so much better. Yeah.

Mark Abbott (00:11:06 -> 00:12:32)

We know we can be so much, so much better. Right? So, and I think we've talked about this before on the podcast, right? But, um, why are agreements so important? Right? And, uh, you know, I go back to, um, Steve Chandler taught me this concept years and years ago about expectations versus agreements, right? So the big idea is that expectations are not a good thing, right? They're toxic, they're cowardly, they're bullying, and they're lazy. And, and, but why? Right? So, if I expected, and I can do this easily with you, a lot of times I can't do this with people, especially if I'm on a, on a zoom call. If I expected you to dunk a basketball and I said, you need to go dunk a basketball in a 10 foot ri rim, right? You and I both know that that's not a thing you can do yet if I expect you to do it, what's that do? Right? That's pretty much, uh, is it bullying? Is it, you know, because I'm expecting you to do something that you can't possibly do. How do you feel about that? Right? And then you have the, uh, concept of, of of, is it bullying? Is it lazy? Because I'm not willing to enter into a conversation with you about, you know, whether you can do it or not. Right? Is it cowardly? 'cause I don't want to hear the answer. Expecting someone, something of someone without actually turning into an agreement is just uncool. That's the simplest way to put

Cole Abbott (00:12:32 -> 00:12:42)

It. Yeah. It's an as it's an assumption of an outcome. Yeah. And there's a, I was just, I was like, there's a quote about this I really love, uh, from Seneca that says, the greatest obstacle to living is expectancy. Yeah,

Mark Abbott (00:12:42 -> 00:14:09)

Yeah, yeah. Goes way, way back, right? Yeah. Um, and so, so I just think that agreements, especially in business, right? We, we can talk about it in a second, are just, they make things so much healthier. And if we don't, if we have an agreement and then we don't live up to it, it's in the easy conversation. Is it me? Is it you? Is there something else? What caused us to have this agreement fall apart? Um, and, you know, I haven't said it earlier, but you know, I think to-dos are agreements, right? And that's why we have this new feature launch, right? Which is agreements based to-dos. So if I, and, and I believe that ultimately if it, it makes, it reduces the friction associated with to-dos. Because if I, because if I just give you a to-do, that's, I'm just putting an expectation on you, right? But if I say, Hey, Cole and I, I, I send you this to do, it's in the system, right? I, on my little phone, I, I said, Hey, I really want you, would love you to do this, then you can negotiate it with me. Right? You can say, say, got it, or, Hey, I can't get it done in this period of time. Or, Hey, I need to renegotiate. I wanna negotiate, um, the outcome instead of this happening, buy this. Maybe it's half of that by, you know, this other date. But ultimately, let's enter into an, into, into an agreement. And then once again, right? If you don't live up to the agreement, then we can have a conversation. So, um, and there's just, like I said there, there are agreements everywhere.

Cole Abbott (00:14:10 -> 00:14:20)

How do you, from a, from a more of a coaching perspective, how do you implement this sort of agreements practice, uh, into a team? And how do you get everybody aligned on using that? Yeah.

Mark Abbott (00:14:20 -> 00:17:14)

So this gets back to the fundamentals, which is, you know, cool, right? So, you know, back to what are the fundamentals associated with building a great company? Um, we understand this stuff. I, you know, every, I always say, say it all the time. It's not that complicated, right? Building a great company's like building a great house. You need a vision, you need plans, you need tools, and you need disciplines. So, you know, so I believe that the things you need to run a great company are right? The, the what we call the focus filters or the fundamental elements of a vision, right? So we need to all align around who our ideal customer is. We need to all align around what our unique value proposition, we need to all align around what are the behaviors that we think are sacrosanct to building a great culture, our kind of a great culture, right? So, so ultimately, you know, there are 20, you know, tools or disciplines, you know, as, as Gina Wickman would say with EOS, right? That are just like fundamental, right? So how do we run a meeting that's a discipline and that's an agreement, right? Um, even when, and of course the agenda and everything inside of that are agreements, right? We've agreed to do this. We've agreed to plus or minus, you know, do our segue. We've agreed to get it done, plus or minus in five minutes. We've agreed to go through our scorecard, by the way, KPIs, what are they? They're agreements. And then the targets are agreements around when we both agree there's an issue. So when we go through the meeting, the weekly meeting, all of a sudden, you know, we have the yellow, red, and green going on, on all of our KPIs. If it's all green, there's no, there's no reason to spend five minutes, let alone one minute on our scorecard. Everything's working great, right? So let's move on and let's talk about how we're doing with our rocks. If our rocks are all on track, boom, that's awesome. Right? Those are agreements. If if everything's on track, big thumbs up, everything's pro, pro progressing as expected, then we can go to the headlines and talk about, you know, some good stuff that's happened. And then if everything's, we do that, and then you just keep moving your way through these disciplines. And if they're all agreements, right? It just reduces the friction, makes sure we're all on the same page. And then, um, and so, you know, so there are all these different forms of agreements out there that are fundamental ones, you know, I think are within 90, you know, our version of, uh, our operating system, 90 os you have the fundamental ones in, in something, you know, like EOS, you have the fundamental ones in Pinnacle or Empire, some of the other operating systems that we support out there. Um, there's just like, just get agreements around the fundamentals and then go and attract, right? People who are up are excited about, interested in love who you are based upon the core agreements that you have made as a company.

Cole Abbott (00:17:15 -> 00:18:01)

Yeah. Right? So, right. There's an explicit thing to resonate with that. Yeah. It can, uh, sort of be a magnetic thing for hiring if you, if you do it well, right? Yeah. 'cause you don't wanna bring in people who don't share the same values, right? Yeah. Don't, or who don't value the agreement stuff. Right. Who don't, some people want just freedom to do what they want do. Yeah, exactly. And it's more ambiguous, and that's, yeah. That's their thing. Yeah. Uh, a lot of people, you know, even if early in their career wanted to do that, right. You know, we get a lot of people could come in and they're like, oh, this is, this is nice to not have to worry about things because when there is lack of agreements that create, by definition, that creates anxiety. Yeah. And that's not healthy. Well,

Mark Abbott (00:18:01 -> 00:20:11)

One of my, uh, I don't know if I've told a story here, right? But one of my favorite career stories, um, is, you know, the, the, the story associated with me becoming the president of, of Heller financials, you know, corporate finance group. And, uh, the long story short of it was that I deeply believed we needed to have an upper up career path, um, model within the organization. There was a lot of disagreement about that, and I won't bore you with the whole story, but ultimately, that disagreement basically led the then president to feel like she didn't, she wasn't the right leader for this next phase of the company. And so I came in and then I assembled my new senior leadership team. Had a lot of, there was a lot of pushback on this. This is back in the nineties, right? Um, 1996. And the first thing I wanted to do was establish a career path for everybody in the company. And I can tell you, the majority of the senior leadership team, uh, was afraid of rolling this out. And we rolled it out, and it was like Christmas day for almost everybody in the, in the, in our, in our company. Because now they had a very clear sense of what they needed to do to go from what we'll call a stratum one seat to a stratum two seat, to a stratum three seat. Now, they had a very clear sense that they weren't gonna be sitting in a situation where some person who was modestly competent was just sitting there, or a bunch of people who were modestly competent or worse were just sitting there and there was no room for growth, right? And so there's this, there was a lot of fear around it, but ultimately it was hugely well received. And now we had an agreement, right? We had an agreement for everybody on, in terms of who we were as a culture, the opportunities we were presenting, how to scale the organization. And, uh, and back to, I think the, the, the, the, the earlier you were in your career, the more you're like, I love this. Now I know what to do. That's what agreements do. They make it clear what's important.

Cole Abbott (00:20:12 -> 00:20:44)

And a big part of that is figuring out what is important to begin with. It's not just like, oh, here's a thing and then make it right. Make everyone agree to it. And then you gotta refine your list of things that we're creating into agreements. And that takes time. Yeah. That takes understand like a, a great deal of self understanding Yeah. And self-awareness Yeah. On the part of the leadership team Yeah. To be able to do that. And so all we're doing is we're making order out of all the chaos that comes with Yeah. Having a company or like running a company and being a part of that. And, you know, I I <laugh> when you do make,

Mark Abbott (00:20:45 -> 00:20:45)


Cole Abbott (00:20:45 -> 00:20:56)

That sense of order Yeah. That just frees up that part of the brain that is used for making sense of the unknown Yeah. To go do things that are actually productive. Yeah.

Mark Abbott (00:20:56 -> 00:22:26)

And then you get the magic. And the magic is if you're not changing things all the time, you get the eighth wonder of the world according to Einstein, which is compounding, right? So if you, so if you have an agreement on who your ideal customers are, and you genuinely have an agreement on who your ideal customers are, and you're serving them all the time, all the time, all the time, and 95% of your customers are ideal, that compounding is so much, so much stronger than if you had this, like, all these different, you know, characters out there, they're all, you know, asking for different things. One of them is like, oh man, you guys, you know, you're too expensive. Right? So you got a bunch of customers who all they're looking for is the cheapest thing they can possibly get. Or you got another customer set of customers who is like, you know, you guys, you're not innovating fast enough. Right? I need you to be like cutting edge. And it's like, well, you know, but if you get really super clear on who your ideal customers are and you serving them, and you find them and you say, look, this is what we're selling, right. Um, our unique value proposition, right? This is what we're selling to you, and if you're buying it, awesome. Right. And if you don't wanna buy it, that's cool too. Right. We, we know we're smart enough, we've been around long enough to know we can't be all things to all people. Right. And so the power of compounding is, is like, it's like agreements are everywhere. The opportunity to take advantage of the power of compounding is everywhere, but in order to take advantage of it, you gotta stop changing a bunch of stuff. And in order to stop changing a bunch of stuff, you need to have

Cole Abbott (00:22:26 -> 00:22:27)


Mark Abbott (00:22:27 -> 00:22:28)


Cole Abbott (00:22:28 -> 00:22:57)

I need to be able to focus, like the idea of the compounding things. You gotta be able to focus on what you actually can control Yeah. And where your strengths are. And then you build. And then once you become confident that once you've sort of gotten a, a deep mastery of that field, then you can expand other things. Yeah. And so if you actually want to do a bunch of stuff Yeah. The path is not to slowly work on a bunch of things. It's like, let's do this. Once we've conquered this, let's move on to the next thing and slowly, slowly expand Yeah. With those, uh, concentric circles of mastery. Yeah. Yeah.

Mark Abbott (00:22:57 -> 00:22:58)

It's actually not that complicated.

Cole Abbott (00:22:58 -> 00:23:00)

No, it's hard,

Mark Abbott (00:23:00 -> 00:23:01)

<laugh>. It's not,

Cole Abbott (00:23:01 -> 00:23:19)

It's not, you know, a lot of things in life. It's, it's not that complicated when you boil it down to the right things. Yeah. And once you sort of let go of whatever idea you have, like of the ego sort side of stuff. Yeah. Um, it just takes time. Yeah. It's hard. And a lot of people don't wanna play that game. Well,

Mark Abbott (00:23:19 -> 00:25:23)

Because it creates, because by the way, all these, all these agreements create transparency. Yeah. Right? And so now it's like, okay, so this, so we're being super transparent on all this stuff, and it exposes your weaknesses. It exposes the things that you haven't thought through as much. But if you, going back to culture, if you truly create, you know, a high trust, very, very genuine, very well-defined, right. Explicit, coherent resident. If you truly create that culture, then the people are going to, you know, people are going, they're, they're gonna care enough to say, Hey, guys, right. This is bullshit. Right. Or this is not who we are. We're not living up to our agreements. Call us out on, you know, on, you know, if we're being hypocritical or whatever. Right. Um, and, and those conversations are just so much easier because people are walking the talk. And the once it gets hard Right, I know. Is, you know, one of our core values is resilient and, you know, it's been there from day one. And, and I, I think I tell this story, um, but you know, it's there because I know me and I know that, you know, I don't, I can't hide when I'm disappointed. I'm not, I have no ability to lie. I, I can't, I just don't, I just never, never had it. Right. I'm, I'm, I, that's why I could never be part of a political organization. It's just I can't do that. I'm not wired to do that. And I'm at peace with that, being old as I am now. And, uh, and so, you know, I, for a whole host of reasons, I knew resiliency was gonna be a really important, you know, uh, characteristic a behavior, um, for everybody who joins the company because we're growing fast, because we got this, you know, sort of strong-willed, you know, leader who, you know, can't hide if he's disappointed in something. And, you know, it sucks to know that, you know, that like the CEO is disappointed you, I get it. Right. But, but that's, you know, part of our culture. Right.

Cole Abbott (00:25:24 -> 00:25:40)

And that's feedback, right. You don't want to, you know, we, we, we don't believe in ignorance is bliss, for example. And that's, that's explicit, right? If we say that. Yeah. Uh, right. You want have all of that information available. Yeah. Right. As much as possible.

Mark Abbott (00:25:40 -> 00:26:05)

And because we believe evolution is simply the incessant ever, you know, expanding, you know, our access to useful information and we're creating useful information. And, and we believe the best, you know, the best of the best are extraordinarily open to positive and negative feedback. That's how you, that's how you continue to evolve as a company. And great companies help the world evolve. And that's the thing we believe.

Cole Abbott (00:26:06 -> 00:26:11)

Yeah. Yeah. Well, I think we're, uh, about at time. Wow. That

Mark Abbott (00:26:11 -> 00:26:11)

Was fast. That

Cole Abbott (00:26:11 -> 00:26:14)

Was a fast one. Yeah. That was good. Yeah. I enjoyed that.

Mark Abbott (00:26:14 -> 00:26:17)

Me too. Yeah. I wish we could spend a lot more time on this.

Cole Abbott (00:26:17 -> 00:26:26)

It is a great topic. Yeah. Well, soon we will, you know, we'll, we'll expand beyond the 30 minute episodes. <laugh>, looking forward to that. So yeah, maybe, maybe in a few. Alright. I don't know. Yeah.

Mark Abbott (00:26:27 -> 00:26:28)

Alright. Thank you. I.