The company’s core values are more than just words on the wall. The company’s core values define how you lead and make decisions. My guest today is Todd Olson, CEO of Pendo. His company was ranked #73 in the 2019 Inc 5000 list. We talk about how to develop company core values. We also discuss how to use them as a leader. In this episode, you will learn the importance of company core values and how they drive growth.
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Todd Olson: The Transcript
Target Audience: Todd Olson is the founder and CEO of Pendo. Pendo is a product cloud creator for digital products and data-driven product teams. Pendo makes it better. Drive product adoption, customer loyalty, and team innovation with the Pendo Product Cloud.
Disclaimer: This transcript was created using YouTube’s translator tool and that may mean that some of the words, grammar, and typos come from a misinterpretation of the video.
You know, I always say it comes down to a handful of things. But I mean obviously you need to have a great product. So it starts with selling a product that works. You know the other day if we did have a great product that we wouldn’t really exist to do business. So that’s number one or start. But number two, is having a great people you know I think ultimately our success was driven by the quality of our individuals and theirbility not just to build that product but also to sell services. So to me those really are the two big one that I see. I’m doing a lot of our growth.
[00:00:34].050] – Intro
Welcome to Growth Think Tank. This is the one and only place where you will get insight from the founders and the CEOs the fastest-growing privately held companies. I am the host. My name is Gene Hammett. I hope leaders and their teams navigate the defining moments of their growth. Are you ready to grow?
[00:00:51].240] – Gene Hammett
How important are your company core values those core values really can be the backbone of your company the culture how you work together how you navigate change how you create opportunity and innovate your core values really do mean something? A lot of companies think they’re kind of fluffy or they’re things that we put on the wall and they’re just words. But the reality of fast-growth companies I’ve seen they put an overemphasis on this and the overemphasis really is about making it a part of the hiring process the onboarding the leading and development process and the rituals and routines and recognition that are there necessary inside of our culture. So with your core values are we really working for you. Are you living them? Today’s guest is Todd Olsen. He is a co-founder at Pendo.
[00:01:41].090] – Gene Hammett
Put those number #73 on the Inc list in 2019 and over 400 employees and over time they’ve seen how important the values are for the company. And as they continue to grow as they continue to push beyond this it really has been a central part of the reason why they’re growing fast. So here’s the interview with Todd.
[00:02:01].720] – Gene Hammett
Hi Todd, how are you?
[00:02:03].420] – Todd Olson
I’m well. How about you Gene?
[00:02:04].810] – Gene Hammett
I am fantastic. Great to have you here at Growth think tank. I let our audience know a little bit about you at a personal level. But tell us about Pendo.
[00:02:12].900] – Todd Olson
Yeah. Thank you. It’s great to be here. Pendo is a 6-year-old software company that started back in late 2013. We exist to help companies improve the experience of their software applications. If you imagine all the software you engage with your daily lives we help one measure how people use it. The people building it can create a better experience and to we help those companies create app experiences that come as step by step onboarding guided tours so you can get value-added software using our day by day basis.
[00:02:46].000] – Gene Hammett
I love that idea. I have clients that are in the SAS space and I asked them about the usage of it and they never really have a good night. Well, we could pull that information out but they don’t have it at their fingertips. I think it’d be pretty valuable to understand the usage of your platform.
[00:03:02].400] – Todd Olson
Well sounds like their good candidates for president right. You just keep pointing them are waging.
[00:03:06].750] – Gene Hammett
We could talk about that when you think about you know growing your company fast. What are some of the biggest things that you know move the needle for you in reaching like Number 73 on the list for 2019?
[00:03:23].370] – Todd Olson
You know I always say it comes down to a handful of things. But I mean obviously you need to have a great product. So it starts with selling something that works you know the other day if we did have a great product and then we wouldn’t really exist the business. So that’s number one or I start. But number two it’s seven great people. You know I think ultimately our success is driven by the quality of our individuals and their ability not just to build that product but also to sell that service. So to me, those really are the two big ones that I see that’s fueling a lot of our growth.
[00:03:57].720] – Gene Hammett
Well, we’re not going to talk about the product as much today as you probably want to. We’re going to talk about the people that create this and make this happen. What are the things inside of people that you really feel like align you to gather and really create the kind of culture you want?
[00:04:14].690] – Todd Olson
Yeah. Well look I mean I think it comes down to values. You know every company is a little bit different. I think there’s an apology to that word twice but there’s value and defining what those values are so that you can one be transparent with prospective employees to make sure you’re setting good expectations and 3 make sure there’s some commonality between everyone and kind of how we’re going to work together as human beings.
[00:04:43].440] – Gene Hammett
Well, I’d love to kind of walk through the process of how you created your values. I don’t know there’s anything special there but just tell us a little bit about how they came up with them.
[00:04:55].060] – Todd Olson
Yeah. So day one started the company for co-founders in a room because I said what do we care about and having the business. And we’re creating this thing. Nothing. You know we can have whatever values we want their analysis here. Right. So but also as a good exercise the founding team can we agree that something the four of us. Right you know buy assets. So given some of us to work together but some of us had a really good exercise we devised four values. And I think of course at that time I would characterize them as aspirational values and different companies a different type of value you’ll learn.
[00:05:31].650] – Todd Olson
Some are aspirational. We want to behave this way so we put up on our wall some are more about the reality of the situation hey this is how we behave we’re gonna put up on the wall so everyone knows this is how we’re going to behave. Right. So it’s so bizarre. You’ve got more behavior. So all of ours at first because we work together we’re aspirational and they sit around a handful of things couple and stand out. I was really passionate about this notion of having the customer as an important part of our value. So we had a customer-oriented value. One of our co-founders worked at Cisco where bias to act is a big part of that culture. So he was a very pastoral biased act.
[00:06:14].870] – Todd Olson
We all had families. So all of us wanted to keep our families. So we had some sort of balance work-life balance component to it. So we had we kind of made a fourth with double that because we don’t have anymore. But we do we said that is going to first aspirational value. Two years later we got together as executive teams of course. That team is no longer four people. It’s about eight people. And we said hey do these values still speak to us. They said to represent not only who we are but who do we want to be. And we changed them.
[00:06:57].200] – Todd Olson
We removed three No we removed one excuse me and added four. So we ended up with seven. And we adjusted the words and all of them actually separate biased act. I was the one that actually has been the same value since the very very beginning. Otherwise yeah we’ve kind of adjusted the language adjusts the words and then we again we added four and those were hey this is how we are behaving we should be transparent about it. Put it up on the wall the people now that included things like brutal honesty which is one of our more unique values vary if you come into the word brutal and a value on the fact that we do you know it says a lot about our culture and also we’ve had a lot of eats about that value debated about changing it to radical candor. We debated changing it to just honesty. We reward that honesty by kindness.
[00:08:01].730] – Todd Olson
That’s been a proposal. We’re still just brutal honesty. So but that’s kind of how we we’ve gotten to that position and we do evaluate our core values executive every year. We have not made changes but we do that every year.
[00:08:19].100] – Gene Hammett
Well once you had the kind of locked in you had about what eight employees or so this class?
[00:08:26].500] – Todd Olson
Well, that was a field of leadership keynotes years ago. So we pray about 30 employees and we lock them in.
[00:08:33].730] – Gene Hammett
When you think about how you use them today I’m going to run through a couple of places. I see them used and so I would like to just you have you comment on that in the hiring process. How important are your values in selecting the right people?
[00:08:49].300] – Todd Olson
Well very important or instrumental. We need every scorecard for every candidate we have at hand. We have each value enumerated and there’s someone on the interview team responsible for asking behavior-oriented questions around the values. That’s number one. Second, we when I do my executive interview which I interview nearly every person in the company I’m always looking for. Are they referencing their values? Heck, do they even know you know? Some people don’t know the exact words. Some people have clearly in front of them and that indicates obviously a level of preparation desire to be part of the company that sets themselves apart right. So just so those are just two easy things. Yeah, absolutely critical part of the hiring process.
[00:09:38].440] – Gene Hammett
When you say the behavioral questions. I mentioned this a lot to people and I’ve done all kinds of little videos around this. Do you actually have you thought about them intentionally? How do we ask questions that will actually allow us to see where they rank on on a brutal honesty kind of?
[00:09:54].030] – Todd Olson
Yeah. They’re all about stories and examples and our goal always in the interview process to capture the story. An example is the notes that were all of us that are reviewing the package later and could see what they are. Would be a battery of questions. Sample people could select from the sample. So you know it’s not all the same to every single person.
[00:10:16].010] – Gene Hammett
Yeah. And that’s what I suggest to it. Do you have a favorite question there that kind of gives you something that you could say?
[00:10:21].910] – Todd Olson
I actually just do my own question so I’m not one that actually.
[00:10:24].780] – Gene Hammett
[00:10:25].750] – Todd Olson
So I don’t have one particular Yeah I have other favorite questions but they’re unrelated values.
[00:10:33].800] – Gene Hammett
Awesome. Well, I’ll say the hiring process. I see that these values typically show up in the onboarding process of employees or do you use something specifically in onboarding.
[00:10:45].590] – Todd Olson
Yes so I actually I personally do an onboarding class with every cohort of new hires in mind the purpose of mine is to go over Mission Vision Values company history and in the portion of the value I spent a good 15-20 minutes not just saying this is the value but this is how it’s lived. This is an example of a situation where someone has lived it and or not right. And you know I try to be as specific as possible and then tie it back to other policies. For example freedom responsibilities value I talk about our open alcohol policy or our open vacation policy and talk about what are good examples of freedom responsibility what a poor example responsibility within that value right and context. So these are sometimes you get kind of fun. Sad to say that every example I give you the real example wasn’t that fun what I experienced it but it’s a great way to help convey what they.
Hold on for second. Todd just talked about the values in the hiring process. How are you doing all that you can create the right systems behind it to support your team and hiring the people that have the same values as you do and you really value inside your company. Well one way to do that is by creating a list of questions that really are aligned to the behaviors within the values. So you have to do a little bit of thinking around this. What kind of stories would you ask. What kind of questions. What are the things that would really allow you to tune into how that person feels about these values. How were they operating in a natural way. And if you can create those questions then your team can use it and then they can they can give that to you back in sort of a scorecard. Much like Todd described so that’s a really powerful way for you to create and use the values inside your company. Now back to have you with Todd.
[00:12:45].920] – Gene Hammett
I love that. It’s a missed opportunity that I think a lot of companies aren’t doing inside their onboarding process is talk about those values and talk and give examples. And rarely is it led by one of the co-founders. So I think that’s a really good place for you. Another area I see values being used is inside the development of employees like how they’re growing how they’re kind of interacting with each other. What do you do there specifically?
[00:13:16].890] – Todd Olson
Yes, so we have what’s called a best self-review. It’s kind of a quarterly review process for all employees. You know when I say oh it’s a review I know some ended I am it gets a lot of work right. So it’s intended to be a little bit lighter. We want more frequent sets of feedback rather than exhaustive feedback. Mike Byrnes everyone out within that context it’s you know how well does the person with the core values and what are some specific examples of that in words as examples where they could live them better right. So we’re trying to foster to a dialogue. We’ve seen the manager and the individual on the value specifically and what they can do more or even in the course what they’re doing well now.
[00:14:08].800] – Gene Hammett
I love the fact that you have more often feedback right because a lot of companies have moved away from that. What about the yearly review. They’re still trying to find the right balance of more frequent feedback. What do you what have you learned on this frequency of feedback?
[00:14:26].630] – Todd Olson
I like people want it. Know what we did was first quarter because I’ve had like PTSD from annual review cycles. So even me as a CEO you repeat people say we’re going to do a review I’m like Well that sounds awful. You know even though candidly it won’t really affect my life too much because you know there were reports to me that sea level and you know it was fine you know you know for four doesn’t take only a few direct reports in terms of comparing me to the average manager of the company but I have empathy for my leadership team and I know how much time it takes.
[00:15:03].900] – Todd Olson
So I’ve been there done that right. So we the first quarter we made it elective as the manager will only think a review of the employee initiates what our policy was and that way it was nice. Like hey if you don’t want to get feedback all right we don’t want to be the kind of people shoving it down your throat. Now you’re the kind of employee that never wants feedback are you living brutal honesty if you never want to get brutal honesty.
[00:15:31].580] – Todd Olson
Probably not. But so by making it elective from what we learned was like actually most people want it you know by a large like 85 percent of the people when given the choice of having feedback around people filled it out. And I think that’s really eye-opening right. So so while something interesting no one wants to go through this review process turns out most people do.
[00:15:58].100] – Gene Hammett
Well, I have seen that the same with my clients as well they want more often feedback and much more often than what’s currently happening. So one last area I want to talk about here is kind of leading feedback and making sure that this is not just a put it on the wall kind of value but we’re actually living it every day so what are the some of the things you’re doing to make sure that you’re living the values.
[00:16:23].860] – Todd Olson
A couple of things. I think one of the things that I’m most proud of in terms of what the team is devised is we have this program called pinks and what it is a peer recognition system for the values. So all day everyday people say Hey Sally I’m going to give Sally paying for biased acts because I saw her you know just take the reins on this project and get it done without being asked you know that’s an example. But the way it works is each employee can give a recognized excuse me one value per month at the end of the quarter we tally up awards for who got the most recognitions in that quarter.
[00:17:16].020] – Todd Olson
And it allows you to really highlight people that are living the values you know and you go through every single one of them and the person with the most pranks gets honored as well. So it’s a really fun process and what’s nice about it is that you know living values become a revered thing and a really positive thing. So that’s one of the biggest things that we do because the other big thing that I really emphasize is at the beginning of every single meeting we talk about our what is our mission what our core values.
[00:17:48].750] – Todd Olson
And then within the town hall meetings, we also will give a lot more examples for this is something we saw live. When I focus on the customer rights. So a lot of ties back to the values. One thing to say Hey we’re gonna do X thing. We’re going to do X and here’s why our values helped us make this decision big difference. Right. Like a great example actually we were threatened by a lawsuit for patent infringement. A year ago. So mostly when they’re threatened with a lawsuit don’t tell the entire company have to tell the entire company.
[00:18:30].890] – Todd Olson
There’s no real reason to do so. Some managers would think it would incite fear maybe somebody would start looking for other jobs. But I said tell the entire company you know literally the moment I knew about it or maybe the week after. I mean at least had some conversation. Lord makes sure it wasn’t like this wasn’t like Doomsday for us right. That effect but. But you know honestly, we tell people as soon as you know why I do that because I knew that meetings would start popping up on calendars hallway conversations that started happening.
[00:19:05].830] – Todd Olson
The last thing I want to do is it gradually leaks out or somehow people think that we’re not telling people or oh my gosh we should be worried because I’m not saying anything about it. Right. So it’s a really good example where he said look we’re going to tell you all this thing. We don’t have to. We’re going to also treat you like adults and respect you and see you we’re not going to go around and give it as a legal proceeding like not talk about it outside the room do not make these kinds of statements because we trust you.
[00:19:33].950] – Todd Olson
But here’s the deal. And by the way, we’re gonna win this thing and this is how we’re gonna do it like that. So that plays a really good example of a specific kind that goes right along with that the brutal honesty Exactly. Exactly. People probably and you can gently pull out boy based. Think that we have some crazy things happening. I don’t know about them. Frankly, there aren’t. I mean there may be some things in my head that I like. But they’re like wild crazy ideas in my head. They’re not you know not near reality. So I don’t share people like my crazy pipe dreams. But we have something that’s nearing reality yeah you’re gonna hear about it.
Now hold on for a second here. Todd just mentioned about peer recognition. Now I want to kind of chime in here because when you think about peer recognition you may be thinking about you know people of giving some appreciation inside of meetings and that is part of it. But if you created some real structure around what peer recognition is and about why they’re doing it and in my opinion if you really use the values as a center point behind that and see who is getting living those values on a regular basis you can have employees of the month of the quarter it’s really up to you. But if you have a ritual process behind this those peer recognition can be really powerful. And guess what. You don’t have to create feedback loops and you have to form a review process but it does allow you to tune into who’s doing what who’s living the values who are appreciating other people. So it is a great way for you to have kind of your eyes out there seeing where people are growing and where they are not so peering recognition to be used to your advantage. If you’re willing to make that investment and be intentional about it. Back to the interview with Todd.
[00:21:24].480] – Gene Hammett
Well, I love the fact that Todd you have a fast-growing company and that you put so much emphasis on values. I talked to a lot of companies that wonder why they’re not growing. And I asked them what their values are and they’re like oh we used to have some stuff but they just don’t know. It just seems fluffy and I have to go through this over and over so I’ll be able to point them back this episode. Is there any you know one thing that you feel like the values do for the culture that you would like to share with us today.
[00:21:57].250] – Todd Olson
I think that I used to find the culture in many ways you know so who we are what we were about and how we operate it is definitely guided by our values. I mean in many ways I think of it kind of like our compass rose like when we’re lost or when we have maybe a tough quarter even a really good quarter. You know I think back I do come to a state of the company address every quarter. The entire business and it’s kind of like a reflection in our last quarter. So looking ahead to the first I can tell you where I start my speech always comes back to what our values say at this moment.
[00:22:31].150] – Todd Olson
How should we use them is again a compass road or a guidepost for us to look towards helped guide us through the next phase. So in the chapter so that’s where it’s at. I mean it comes back to those they’ve served as well getting us those points long as we continue to remember doing over maintaining its best service well in the future. Yeah I mean it’s core to how we operate.
[00:22:53].870] – Gene Hammett
Well, Todd, I appreciate you being here at Growth Think Tank sharing with you with our listeners here and some of the insights that have really grown your business.
[00:23:03].170] – Todd Olson
[00:23:04].110] – Gene Hammett
I just love that interview. His core values are such an important part of how a company works together how they create opportunities for how they treat each other. Your core values are the backbone of your company. And when you think about growing your company and you have core values it kind of just like they are part of what we do. But they’re just not really living it then it really is up to leadership is it up to you to be the kind of person that drives that impact to make it something that is impactful and make it a core part of the business.
[00:23:37].950] – Gene Hammett
When you as a leader put an emphasis on it when you create that the recognition of the rituals routines behind it you will have people pay attention to it. And when you actually are hiring people with those core values in mind you have the ability to create a real kind of strong force inside the business. Now. All those things were covered in their views so you may be wondering where are you right now with your values. Where are you missing an opportunity? Do you have any questions? Make sure you reach out to me firstname.lastname@example.org And if you are enjoying these podcasts interviews make sure you share it with a friend as always lead with courage. We’ll see you next time.
Disclaimer: This transcript was created using YouTube’s translator tool and that may mean that some of the words, grammar, and typos come from a misinterpretation of the video.
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