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If you can uphold it, which you would never make a brand promise if you cannot, it creates an immense amount of trust. You literally are setting an expectation and then meeting that expectation, which then creates trust in the person that you have expressed the expectation to. How do you create an unshakable business? I crossed $100 million in net worth by the age of 28. Now I'm growing acquisition.com into a billion dollar portfolio. In this podcast I share the lessons I've learned in scaling big businesses and helping our portfolio companies do the same. Buckle up and let's build. When I was 24 years old, I was managing a company that had 120 employees and I figured out this one thing that helped me not lose my mind while I was doing it. And today what I want to do is I want to share with you that one thing and how you can implement it in your business to make sure that you also don't lose your what I'm going to do is explain to you the four levels of expectations that you need to understand to grow your business. Here's the thing. The way that I was able to not lose my mind had nothing to do with like marketing or sales or money or any of that stuff. It had to do with understanding how to manage large groups of people. And the one thing I realized that made the most difference was learning how to set expectations. You can swap out the word expectations for instructions. Think about it. If you are the coach of a giant sports team, if you're leading the NFL, but you give them instructions as to how to play the game, do you think they're going to win or lose? The same goes for building a company. It's the same thing. You are essentially the leader. You are giving them instructions of how to play the game. And so expectations are really the verbalization of how someone should act and what they should do. So let me give you an example to exemplify the difference in a verbal cue to somebody say I am the head of a hospitality group and I've got a line of maids. I say, hey, make the beds. Well, that could mean that it could result in something like this, which is just like, okay, the bed is made, but like the sheets are ruffled, like the pillow is not fluffed, like the creases are not made, it's not tucked in right. It's made technically, but it doesn't look like how I want it to look. Versus if I said make your bed like a five star hotel would, what do you envision? You envision, of course Sheets are tucked in, the pillows are fluffed. There's like a little chocolate on the pillow, maybe even a little signature card, right? There might be some fruit assortments. So the difference is how explicit my instructions are. Another example say you have an E commerce business and you're like, hey, go write an email sequence for after people buy versus saying please write an email sequence that will help us reduce refunds within the first 24 hours of purchase. All the differences there, which will have a massive impact on results, is the instructions that you give the person. How explicit were they right? Because when lack of clear expectations leads to assumptions, assumptions lead to unmet goals. So if people have to assume how to do something, they are less likely to do it than if they know to do something. It sounds simple, but so often in business we don't do it. We just let them assume how to do their job and what we want. And so oftentimes, expectations are the unsaid rules of engagement. They're actually non negotiable, agreed upon norms and behaviors that everyone on the team adheres to and is held to, but often are never verbalized, written or explained. But here's the thing, if you don't properly define and verbalize your expectation, then nobody knows how to win or lose the game. In fact, they don't even know how to play the game. It's like their last company, the game might have been like checkers. And so they're playing according to the rules of the last game they were at, which was like how to play checkers. And now they come to your company and it's like chess. But then they play the game the same way that they played checkers, but they're playing on a chess board, it doesn't work and you automatically lose and you look like an idiot doing it. This is the same thing that happens when an employee comes in your organization and you're like, this idiot doesn't even know how to. No, it's that that's what he did in his last job. And you haven't said anything differently. So what's he going to do? He's going to do what worked before. Playing checkers is all he knows. He's going to play checkers on your chessboard. So here's the thing. Most businesses, if you chunk it up, they have about four levels of expectations, which is really like four places to make expectations, four places to verbalize instructions, whatever you want to call it. This starts with core values. So core values are the base of everything else because essentially they are the Filter in which you build everything else through. So, for example, if I have a core value of speed is king and a customer comes in and they are inquiring with our customer service department, and my customer service doesn't answer for two hours. Okay, well, that conflicts with our core value. So if my core value is speed is king, my customer service procedures will all be ones that revolve around speed. AKA one might be, hey, always resolve a customer inquiry in five minutes. So values are the filters in which you make decisions to build all the rest of the expectations in the company. And so, for example, lots of people supplement values for rules. And so they have lots of rules that people follow, but people do not understand why the rules exist, the importance of the rules, or get any reinforcement from the rules. And so you end up with this company where it's like, you've got, like, between 10 and, like, 40 different rules that people are expected to follow. And the thing is is that the likelihood that someone follows a spreadsheet with like 40 rules on it is very low. But the likelihood that someone can remember, like, 70 speed is king, and they can chant that in their head all day, the likelihood is much higher. And so I will always gravitate towards companies that lead by values rather than leading by rules, because one, it's inspirational. It's like, we're going towards this thing rather than rules, which are usually written away. That's like going against this thing. Don't be late, Never say these words, always do this. And they're very have much of a negative connotation. If you want people to be inspired, then lead with values. And values serve as a filter in which people can then every time they're met with a decision to make, filter it through that value and decide, should I do this or should I do that? Well, if speed is king, then I will do this and I will act in accordance with our values. So, for example, if I wanted to rule my company with rules, I might say, answer the customer within 60 seconds, respond to your teammates within two minutes at all times, respond to your boss within five minutes max. Or I could say, speed is king. We want to try and be fast. Everything we do. Speed is king on a micro level. And so people, by consequence of adhering to speed is king will then fall in line, for the most part, with these rules on the other side. And so one of them is punishing and often, like, puts things in a negative light, whereas the other one paints things in a way of like, we know where we want to go, and this is how we're going to get there. And the thing is, is that if you lead your company with rules, then you create rule followers. If you lead your company with values, then you create leaders and people who can think. And unless you're on here and you have a company that's like a Fortune 500 with, I don't know, hundreds of thousands of people, it is much easier, especially in smaller businesses where you have maybe just a few hundred people or even a thousand in my opinion, to rule with values. Because rules, they're endless. And so it's like every scenario that the difficulty is that if you don't have a rule for something that comes up, the person just like, cannot compute and, like, isn't able to answer your question. Like, I'm sure that you've inquired with customer service before and you've been like, hey, can I get a refund? You put cheese on my chicken and I want to know cheese? And they're like, we don't give refunds. You're like, right, but you did it wrong. So I should get a refund. It's not me, it was you. And they're like, I don't know. We said we're not supposed to give refund. So I don't know what to do. I have to guess. I have to get my manager, but manager's not in. So I don't know. You're like, dude, can you, like, make a decision? And the reason they can't make a decision is because there's no rule that was in place for them to make a decision. And they don't have values. So they don't have a frame to make decisions that are not foreseeable. And so values give you a framework to make decisions that have not occurred yet. And so when someone steps into a new scenario, they can apply that value or decision making framework to that scenario rather than have to wait for a rule. It also allows you to move faster. The thing about values is that they should inform behavior. And so an example would be, I want you to think about this. One organization has the value. Speed is king. Another organization has the value. Pace yourself. Those are probably fit for very different companies and probably both advantageous for different companies. Speed is king might be very advantageous for a B2C makeup company. And they're just booming and they're growing super fast. And like, speed is king. We've got to fill these orders fast. We're going to get back to customers fast. We've got to market fast versus pace yourself might be a Better mantra for a company. Say a dental clinic that's looking to scale from one to 20 dental clinics. And quality of service is very important. You know, making sure that we get things right and do things by the book is very important because there's high compliance standards, you know, versus over here where there's much less. And so want to make sure that the values also play to the strategy of the business and will help you achieve those goals faster. Yes. But in a way that also protects you from the downside. So for us@acquisite.com we've got three values. We've got unimpeachable character, sincere candor, competitive greatness. And the reason I have those values is because of a few things. Competitive greatness. I want people who don't just want a job to make a paycheck. I want people who do work to be great and they exemplify excellence through their work. And this is the way that they demonstrate their excellence to the world. Why do I want that? Because that is what I am doing in mine. Right. Like, I had my last company in which I think a lot more of it was to make money. But I no longer am thinking about making money. I'm thinking about how do I build something amazing, incredible that's long lasting. Right. And so I want other people who think that way. The second one, since you're candor, is because we have a portfolio of companies, we have to give them advice to help them grow. If we don't get the truth from them, then we cannot give them good advice. I need people who are sincerely candorous. If I don't have people that are sincerely candorous, I can't help them grow their business. Guys, I just want to take a quick break to thank all of you for listening to the show so far. If you enjoy what you're listening to, I would be so grateful if you would just consider leaving me a review or. Or even sharing it with somebody who you think would love to hear the kind of content. As you can see, I don't run ads on here. So the only way that this show grows is if we can continue to make awesome content. And the only way I can do that is through you liking subscribing and rating. All right, let's get back to it. And the last one is unimpeachable character, which is a huge aspect of acquisition.com is our brand. And so I want to make sure that everyone that works within acquisition.com as well as the people that we work with are people that I Am proud to associate with both inside work and outside work. And if one of those does not feel good, then I don't think it makes sense to work with them. And that's just because I think that that helps uphold our brand. Because if I had somebody, for example, on my team who was like, I don't know, married, but on the weekends, you know, snorting coke off a stripper's ass, and y' all knew about it, you'd probably be like, seems really weird. And now I feel very differently about their brand. And I'd be like, me too. So now we're gonna move from core values to brand promises. A brand promise is often tied to strategic metrics that drive the business forward. They tell your customers what your internal values are, as well as what to expect in terms of results or service or experience with your company. So let me give you some examples to exemplify this. Your dream haircut in less than an hour, 15 minutes or less, can save you 15% or more on car insurance. Sure, you've all heard that one. Your questions answered in five minutes or less. We will get you your package by 10:30am the next day, or even Jimmy John's. I go there all the time. They won't deliver. Freaky fast delivery, five minutes or less. They won't deliver if it's not five minutes. These are all brand promises. And so essentially, what a lot of these companies have done is they have taken their internal vision, mission, values, and they have operationalized them into brand promises that are seen externally. So an example would be one of our values is competitive greatness. Right? I want to do this to exemplify excellence. And a brand promise to the employee base that I'm trying to attract is praise over punishment, which is that I will not punish people that are within our organization. I will praise them, and we will encourage them to do good work rather than punish them for doing bad work. Right? And that's a message we put out to the employment community. Just as businesses put these things out of, like, your dream haircut in five minutes or less to get people in the door, you also do it to get people in the door to work for you. And so either one can be a brand promise, whether it's to customers or employees, what a brand promise does is if you can uphold it, which you would never make a brand promise if you cannot, it creates an immense amount of trust. Because you advertise something and then you fulfill it. You literally are setting an expectation and then meeting that expectation, which then creates trust in the person that you have expressed the expectation to. If I tell you I'm going to meet you at 10am tomorrow for coffee and I show up at 10:30, do you trust me? More or less. So if I tell you that I'm going to deliver your food in five minutes and I deliver it in five minutes or even four minutes, do you trust me? More or less. Are you more or less likely to do business with me again? And so what the promise does is companies typically engineer a brand promise to be one that they are positive that they can hit or 100% of the time, if not overshoot. And so then when they do this, they have an opportunity out there into the marketplace to gain people's trust, because they know that they're going to hit a hundred percent of the time. So, for example, in gym launch, when we had a customer service department, I said, we will get back to you in five minutes or less. Because I saw that our first response was always within 90 seconds. So if it's always within 90 seconds, I'm pretty sure five minutes is reasonable. And people were very impressed because they were like, wow, you guys are so fast. And they were always like, holy crap. It said it was gonna be five minutes, it's like two minutes. And so I would never have set that target if the average was like even four minutes. Because I'm like, oh, man, if something happens, somebody had to go to the bathroom, like in one minute off. So you always have to really undershoot with that. So the next piece of the pyramid that we have are departmental expectations. So this is essentially how you take the core values and how you take the brand promise and you flow them down and disseminate them down into the departments you have of your company. So here's a common scenario, right? So say you're a restaurant and a customer comes in at 11:15 and they want eggs, but you stop serving breakfast at 11am how does your employee know that it's okay to serve eggs or not? Do you expect them to always delight the customer or hold the agreed upon service hours? So a mom and pop shop that has might say, we always like the customer. And that is like our promise of our staff in the kitchen versus McDonald's. You get fired if you serve eggs at 11:15. So let me give you a real example of how this floods down. So at gym launch, we had a core value, speed is king. Which then turned into a brand promise of your questions answered in five minutes or less, which then turned into all client inquiries were responded to in less than 120 seconds. So then what ends up happening is we create a KPI in that department to measure that. So the KPI for the department is what number of inquiries are answered in less than two minutes versus how many are answered in more than two minutes? Because, again, I'm not going to make the metric five minutes, because that's what people are expecting. I need to make it two minutes. So I know that we're completely overshooting. And so the customer service department, that would be the metric that we are measuring our brand promise and our values on. So then you can see how speed is king. The brand promise of five minutes or less seeps down into the customer service department. So then the KPIs that we measure success on are based on those two things. Another example would be, say we have a company. It's like the core value is the customer's always right. Say it's a hair salon, a chain of hair salons, right? And so the customer's always right translates into a brand promise of your dream haircut or your money back translates into no haircut. Right? So all the stylists get measured on this. Did the person bring in a picture of the haircut they wanted and show it to the stylist before the stylist started? And then did that stylist get approval from the master stylist that there is a picture and they have confirmed this is the picture of the haircut? And then we measure the effectiveness of that by how many people refer somebody else to, to that salon. This is actually a real salon that exists, and I think it's actually one of the coolest models I've seen. So they promise you your dream haircut because they say, oh, the key here is that we have people bring in one to three pictures of the exact haircut they want, and then we get approved by the master, approved by them. And then we measure based on how many people refer somebody else. Really cool. So if we have a core value and we have a brand promise and we don't have departmental expectations, here's the issue is that people don't know, including you as the boss, if people are upholding the brand promise or the core values. So I have a different video where I talk about accountability, but it's essentially expectations plus measurement times, reinforcement. And so if we have expectations, the way that we know that those expectations are occurring is by measuring them. And so having departmental KPIs is essentially measuring our core values and our brand promise. So what having these KPIs does is it really helps with managers for knowing how to manage their employees. Because essentially what you can do is say, here are the KPIs that we need for the department, here's the KPIs we need for the roles. And then based on where those KPIs are at, it's either green or red, right? And then they know and the employees know, and they know where they sit on a performance spectrum. So it's much easier for people when they have a measurement in place to know whether you're effectively carrying out the brand promise and the core values. Now, the last piece of the pyramid is what we call role expectations. Role expectations are simply departmental KPIs tied into the role and then measured against their performance. So let's take one of the scenarios we already did. Speed is king. Core value of speed is king, which translates into your question answered in five minutes or less, which translates into a departmental KPI of responding how many inquiries are responded to in less than 120 seconds? Which translates into a role expectation of making sure that 80% of your inquiries are responded to in less than 120 seconds. So essentially what you do is you look at the departmental KPI and then based on that, you determine what the average needs to be for each person in the department so you can set a benchmark for them. So you look at what you want to have as a department and then translate it down into a benchmark or a medium that you give to each employee. The reason that role expectations are important is because you can measure a department, but to understand how to improve a department, you have to understand all of the units that add up to the whole. And so if you want to improve the department, a lot of the times people are like, oh my gosh, how do we get our stats up? It's like, actually we have three people that are complete top performers and they're actually exceeding the goals when we have two people who are dragging us down. And so we don't need to train five people, we need to train two people. And a lot of bosses make the mistake of looking at a department that's underperforming and saying, oh, gosh, I have to train this entire team on all this stuff. It's like, no, you've got to train John. John sucks, and he brings down the average of everybody there. And so a lot of times the lift that you have to put into a department to raise it is actually much smaller than people think. But they just don't dive into the details of looking at who are the exact people on your team who are bringing the average down. Now, if you can do that, it saves you a lot of time and resources. Ram.