Momentum Podcast: 136
Build a Polarizing Company
by Alex Charfen
You don't want to build the company where everyone belongs. In fact that would be a disaster. You want to build a polarizing company with a clear culture that either drives people towards you or drives them away.
The reason why so many entrepreneurs have trouble building teams is that they higher first for skill then for cultural fit – if they consider a cultural fit at all.
If someone doesn't fit your culture, it doesn't matter what skill level they have, it isn't going to work.
Full Audio Transcript
I’m Alex Charfen, and this is the Momentum podcast, made for empire builders, game changers, trailblazer, shot takers, record breakers, world makers, and creators of all kinds. Those among us who can't turn it off, and don't know why anyone would want to. We challenge complacency, destroy apathy, and we are obsessed with creating momentum, so we can roll over bureaucracy, and make our greatest contribution.
Sure, we pay attention to their rules, but only so that we can bend them, break them, then rewrite them around our own will. We don't accept our destiny, we define it. We don't understand defeat, because you only lose if you stop, and we don't know how. While the rest of the world strives for average and clings desperately to the status quo, we are the minority, the few who are willing to hallucinate there could be a better future.
Instead of just daydreaming of what could be, we endure the vulnerability and exposure it takes to make it real. We are the evolutionary hunters, clearly the most important people in the world, because entrepreneurs are the only source of consistent, positive human evolution, and we always will be. Build a polarizing culture, these days culture has become like this buzzword.
When I say these days, it's probably an underestimation let's be honest. For years, culture has been a buzzword for corporations, in fact, for a few decades there's been this ambiguous term, company culture. Like you need to have a culture, build a culture, create a culture, and really, honestly what does that all mean? The fact is, is that when you look at most companies, they're struggling to stay in business, much less create a culture of some sort.
When you look at how this has been misinterpreted and used for years, here's what a lot of CEOs interpret company culture as. You can see this in a lot of startups. Company culture, we have a beer keg, we have a tap. We have parties, we do happy hours, we do events in our company, and that's how we build a culture. Every time I see a CEO going this route, it just makes me nervous and uncomfortable, and I get twitchy in my body.
I've been around businesses for so long, that I actually have a physiological response from impending doom from challenges that an entrepreneur is going to have from the pain they're going to feel. Here's what a culture should be, it's not a beer keg, it's not having parties, it's not the things that you give your team. It's how your team acts, it's how they are on a daily basis. It's how they show up, how they duplicate decision-making, how they work together.
How do you create a culture where you have a culture of performance? Here's how you do it, you build a 100% polarizing company. Here's what I mean by that, people either belong, they are on your team, they're in, or they are out. There is no in between, establish what it takes to be a member of your organization. What are your cultural nonnegotiable's? What are the things that you're not willing to overlook?
I was just out in New Mexico at one of the most amazing events I've ever been to. Alex and Layla Hormozi had their Gym Launch Conference. There was over 300 gym owners in the room, and Layla, who operates her and Alex's company, has built this formidable team. I mean if you're in the fitness industry, if you're selling to gyms, if you're working with fitness organizations, you should go try and get a job with Alex and Layla, because they're going to take it over.
Their team, I don't care who you are, what you are, what you've done, what you competed with, you're not going to beat their team. It is amazing to watch them together. They pull together, they answer each other's questions, they finish each other's sentences. They work as a tight knit group, and why? Layla hires for culture over skill. She looks for the people that she know will fit into her company. The ones that make her feel comfortable, the ones that reduce noise for her.
When she sits down with them, they make her feel better about who they are. They may make her feel better about who she is as well, and that's what you're looking for. You're looking for the group of people who pulls together, who has the same need, the same desire, the same obsession to perform. When I look at the people and Gym Launch, that's exactly what they have. When you have a polarizing culture, here's what happens. Everyone buys in, and those who don't, you might not even have to let them go, your team will do that for you.
Cadey and I have for years, every business we've ever had, we have made an effort to build a polarizing culture. See, I want you to either fall in love with us, and want you to work with us for the rest of your life, or decide that you don't want to be around us, and leave very quickly. If you go to a site called glassdoor.com, which is a review site for CEOs, you can see exactly what it means to run a polarizing culture.
Cadey and I had a $10 or $12 million company that was doing about 30% or 40% margin. We were taking home a tremendous amount of money. When you look on glassdoor, you'll see the fallout from building a polarizing culture. You were either in, or you were out, and those who were out often got upset and said mean things. As a CEO I can deal with it, it hasn't affected our ability to recruit, because those who love us, love us.
It hasn't affected our ability to grow, because we've been growing. It hasn't affected our ability to move forward in any way, and I feel bad for the people who didn't fit in our company. On some of the reviews you read, yeah, I made some major mistakes. The fact is our company won, and we have incredible people working with us today who support each other, and who do things for each other, and who every single day are looking to lower pressure and noise for each other, so that we can all move forward as a team.
What are your cultural nonnegotiable's? I'll share some of mine, like the people who are involved with our organization have to believe in our company, in me, they have to believe in me. It took me a long time to finally put this in place for my companies, and I suffered for it. Sometimes I hired people who, and I was just talking to Layla about this, this week. Sometimes I hired people who had the right skills, the right resume, the right experience, the right everything, but they didn't fit our culture, they didn't buy-in to me.
They weren't true believers of what I did. They were skilled operators, they were people who could come in and do things, but they didn't truly buy-in. We were never going to get their discretionary effort. We were never going to have them work without being motivated. We were always going to have to ask them to do more, and so it never worked. The second one is true believers, like you have to hire true believers, so they believe in you.
If you're going to work with us, you have to believe in our company, and what we do, the products we have, wholeheartedly. I have an amazing story about this. We recently hired one of the most amazing team members that I've ever had. Here I can tell you with perspective, because she's been with us for two weeks, and the amount of ground that Ila Brooke has covered is crazy. The amount she's been able to already do, the amount of organization she's put in place.
She's already recruiting team members, she's bringing people into our circle who fit our culture. This is amazing, why? How has this happened? Well I actually had to ask Ila, because as we worked together for these first couple of weeks, I couldn't believe how intuitive everything she did was. How it felt like we had worked together before, and how it felt like she could anticipate what I was going to say. Then I asked her, "How many of the episodes of this podcast have you listened to?" She said, "Alex, I've listened to every one."
Not only did we get a true believer, we have a true believer that's been trained by our podcast, and it shows. She's not only just ... She would be amazing had she never listened to the podcast, but because we have someone who fully believes in me, and who I am, in our company and what we produce, and in our clients and what they do, it's been the most incredible onboarding. Literally from day one, and I know this sounds like an exaggeration, because we brought her in at a very high level.
She's helping us with marketing, with content, she's a director level position. From day one I was getting productivity that was better than some of the people who have worked for me for years in the past. I was getting more from her immediately, than people who had been with us for ages, because she came in ready to run. She's so excited about this, she actually told me that in her first week she started ... Actually, I think it was her first night, she started dreaming about working with us.
That's what happens when you build a polarizing company. I mentioned it earlier, what are your cultural nonnegotiable's? What are the things that you will accept, and you won't accept? I can tell you some of ours. We don't accept anyone who discriminates against anyone. You want to discriminate, you think there's people out there that are less than other people? You think there's any type of broken people? You like making fun of people? You like to poke fun at people? You're not working with us, see, in our company there are no broken people.
If there's a problem, it's a process, not our people. Even if we end up having to remove somebody from a position, it's still not the person, it was the process that put them there. Another one for me, is we have a no gossip policy. We have a strict, nonnegotiable, you gossip in our organization, you do it once, it's the last time you'll do it with us. We have zero tolerance for it. We don't talk about each other, we don't talk behind each other's back. If something's going on, we pick up the phone, jump on a zoom call, have a conversation, but gossip not only is it not tolerated, I don't have time for it.
I think it's disgusting, I think talking behind people's back without getting to a resolution is the biggest waste of human energy there is. Don't even think about doing it in my company. There's more, for us, like I'll list some. For me, a cultural nonnegotiable, the people involved with our organization have to be willing, and trying, and doing what they can to stay fit, to be fit, to be in shape, to eat healthy. I don't like hiring a lot of people that go to fast food restaurants at lunch, and then can't check in for the rest of the day.
I don't like to be around people who don't take care of themselves, because they make me uncomfortable. If you're going to work with us, the byproduct is, you better really be excited about taking care of yourself, getting in shape, moving yourself physiologically forward. Also planning, if you're not using our planning system, if you work with us, and you're not using our planner, you're not going to work with us for that long.
We'll figure it out fast, because if you're not on the momentum planner system, it's very clear you're the slow kid in class. We'll figure it out, have a conversation with you, and if you don't want to use our planner, you're gone. I was once invited to a Nike event with some Nike consultants. When we were outside getting ready to go in, they opened the trunk and they had shoes, Nike shoes. I was not wearing Nike shoes, and they gave me a pair shoes to wear. They're like, "Here man, you can't go into a Nike event without Nike shoes."
I was like, "What are you talking about?" They're like, "Oh, we've been working with Nike forever, we can't take you in there wearing somebody else's shoes." I put on the other shoes, and I went to the Nike event, and you know what? Every single person in the room was wearing Nike shoes, and I couldn't find a logo from another sportswear company anywhere. That's a polarizing culture, you don't even walk in the building not wearing Nike shoes, don't even come in my building not using our planner.
I think one of the challenges that we have as entrepreneurs, is we feel like, "Hey, I'm not Nike, can I really make those kinds of demands?" Yes, you absolutely can. In my organization, if somebody isn't into improving and making the team better and leaning in and giving extra effort, they're very quickly going to be gone, because the team won't have them here. The other people in my organization won't even deal with that for a week, they'll start telling us, "Hey, I don't know if this person fits, I don't know if this person is going to make it."
We've created a team of people who get stuff done fast, who use our planning systems, who show up every day excited to get to work, who are true believers, and they're defensive about what we've built here. Cadey and I have a real estate client that we both love, her name's [Toral Chofar 00:12:36], and we've known Toral I think since like 2008. I think that's when she first joined our real estate organization. Then she was a coaching client of ours, then she was a private coaching client of Cadey's.
She's been to a ton of our events, and Cadey got the most amazing Facebook Messenger message from her a couple of months ago. It was simple, it just said, "Cadey thank you and Alex for showing me how to build a polarizing company." That's it, and here's why. When you build a polarizing company, the right people show up. When you build a polarizing corporate culture, the wrong people are pushed out. When you build a polarizing corporate culture, the people in the room will relate to you better.
They will relate to each other better, they will tell you when something's wrong. They'll explain to you when there's a miss, they will show you what's happening with a level of passion that they just won't let it fail, because they believe in who you are, what you're doing, your clients, and your company, and they're not going to let you fail. The other side of this, is you hire people for skill. You go out, you stack up resumes, you look for the best person for the job, you hire them, and then you hope and pray they fall in love with your company enough that they care at the level that they should to actually get their work done.
I have a really interesting example of this. Cadey and I, when we were in real estate, we had a very specific type of company. Our material was very academic, it was all about real estate. It was stuff that you could study, and say yes, you're either right or wrong. It was pretty mainstream, what we do now is not. The entrepreneurial personality type is a treatise on why entrepreneurs are different than everyone else in the world.
You look at how we coach entrepreneurs, we tell everyone of you that entrepreneurs are the most important people in the world. The most important people in society, we are the only source of positive human evolution, and we always will be. That is polarizing, and in our real estate company, we had a couple of people that worked with us that we really liked, that did tremendous things for us, that I considered my close and really good leaders, and intense at what they did.
I went back and recruited people who'd already worked with us, to help us build the EPT. I made a massive mistake, like a catastrophic mistake. I didn't go through all three check boxes on true believers. See, the one that I had and I thought would work, was they believed in me, they'd worked with me before. The person worked with me before, I thought it would work, but I didn't check the other box. My clients and who they serve, my company and the products that we have.
What happened was I hired people who had been true believers, but they weren't really into the EPT. I hired one person in specific I think didn't really like the EPT, actually actively worked internally against just how polarizing my content is. A lot of people don't like it when I say, "I don't like any psycho pharmaceuticals, I think they're all bad." A lot of people don't like it when I say, "Entrepreneurs are the most important people in the world."
A lot of people don't like it when I say, "Every EPT is brilliant in their own way, and there are no broken people." I know it sounds crazy, but that rubs people the wrong way who see the world in a different way. Who like to diagnose and prescribe and put people in boxes and characterize them. Then as a result, what was a really incredible working relationship the first time around, where we accomplished a ton in our real estate business, the second time around was an incredibly disappointing business relationship.
Where almost immediately we had to beg for attention as the company who was paying well over six figures for an executive's attention. Almost immediately I had to start coaching around putting an effort, and being present. I had somebody who I believe was actively working to suppress our content, even though they were in a role where we were supposed to get more of it out there.
I share this, because I teach this stuff, I coach this stuff, and even I can make this mistake. Why did I make it? I didn't go through the boxes, true believer, me and who I am, my company and what we do, my clients and who they serve. When you go through that, you build a polarizing company, because everyone in the organization will think exactly the same way. If you're just starting out, and you're thinking, "How do I find people to believe in me? I'm a brand-new entrepreneur."
Well then you have to go one level down, find people who believe in your company and what you do, and your clients and who they serve. Then hope they acquire the belief in you, work with them closely, onboard them, let them know who you are, spend time with them, so that they can acquire that belief in you. You will build a polarizing culture, because when pressure in an organization has to come from the top down, it's very difficult.
When you're always the person motivating people, it's near impossible. When you're always the one saying, "Come on, let's go, let's do this, we can make it happen." It gets exhausting and draining, but when you build a polarizing company, and you have the right people around you who are true believers, there is lateral pressure. Pressure from the people who are working together to do better. Where you see a lot of lateral pressure, is in extraordinary sports organizations and teams.
There's lateral pressure, they're making each other better. You create lateral pressure on a team by hiring true believers, giving them clear outcomes, letting them know what their responsibilities are, and tracking success along the way. There is massive lateral pressure, it's so much better for you as the leader to be able to coach lateral pressure, and understand where people are feeling it, than to have to be the one trying to motivate and persuade and push your team to get going.
If you're doing that right now, you've probably built a soft, nondescript, barely there, corporate culture that isn't gonna work. There's a better way, build a polarizing company. If you are growing a business right now, and you are ready to grow it even further. If you're ready to change the way you are doing things, make the pain go away of building a team, and stop feeling like you get up every day and either push your business ahead, or pull it forward, I want to show you how to help your team get out in front of you, lead the way, and help you achieve every goal, every outcome you and your business have.
If you're ready, and your business is either at or approaching $1 million run rate, and you have more opportunity that you're ready to grow, get in touch with us. We help entrepreneurs build polarizing companies that grow extraordinarily fast and change the world.
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