Forever Agreements: Preserving the Core

Cole Abbott

[0:00:10]

What are forever agreements?

Mark Abbott

[0:00:12]

Forever agreements. These are the things that I think founders deeply care about pretty early in their foundership journey in terms of what they're trying to do and what they're trying to build and where they're trying to take the company and what's important and things that I think, you know, sort of end up being, I'll call the core elements to the soul of a company. So the first thing, and you know, we can have it in an order. I'm not sure there is a real, real order. You know, some would argue probably that you're compelling why. Why you want to build this thing and why you want to build something that'll endure what you want to have it be really fundamentally all about. Maybe that's the. Maybe that's the first thing. I don't think so. It's not. Wasn't for me, right. For me it was.

Cole Abbott

[0:01:13]

It may not be the first chronologically.

Mark Abbott

[0:01:15]

Yeah, first cry. Yeah, it may not be the first chronologically. You know, for me it was about helping leaders build way better businesses because I think it's one of those classic sort of seven times wins and the seven meaning all the ideal stakeholders where I think if you build a great company, you know, it's, it's not just a win for, you know, the, the employees, it's a, it's a big win for your customers, it's a big win for your partners, your vendors, obviously, hopefully your investors. To me, if you're gonna put all this time and effort and money into building something, I think you should focus on building something that's pretty damn good and pretty enduring. Having, you know, invested in a hundred companies, sat on 25 plus boards, now been involved in building several, you know, companies from scratch. Myself as a founder, you know, I think just, just the, the importance of doing this well, especially when it's not that complicated. I know it's hard. I deeply know it's hard, but it's not that complicated. We've talked about that before. So for me, you know, part of the forever agreements is it's, it's the icp, right? It's the compelling. Why ultimately it's the you. To make this all work, you need to have a culture that is very healthy. So back to the core values are part of your, your, your forever agreements. And then ultimately, yeah, you can get the, you can get the ideal client thing right, you can get the compelling why thing right. You can get the core values thing right. But ultimately you need to be able to a lot, you know, really get clear on what your compelling value proposition is. Why are people buying from you as opposed to someone else? So those are the four elements of your forever agreements. And while we always, we, we talk a lot about wanting to do research on all this, I've done a fair bit of research on this and I've been studying this stuff for pretty long time. I mean, as soon as Built to Last came out, which was, I know we've talked about this before. I think it was real. It was either late 80s or early 90s. You know, talking about what makes great companies these, this com. I, I'm pretty sure almost all of this, the For Forever agreements were in the, you know, talked about in Built to Last as an example or good to Great. And, and, and I believe that when companies lose their way, either culturally or ICP wise or compelling Y wise or compelling value proposition wise, that's when things start to get, you know, things start to go south. And so, you know, I think if you get really super clear on your forever agreements and then you attract and retain people who also buy into your forever Agreements, it's super powerful. And if someone comes along and wants to rip out one of your forever agreements, whether it's your ICP or your compelling lie or change your culture or change your, or change your compelling value proposition, I think they're ripping out a part of the soul. And, and what they're doing is they're ripping out a reason that a bunch of your people, a bunch of your ideal stakeholders sort of joined you in your mission. Rather it's whether it's internal or externally, right? You start treating your customers different or you give them a different deal. You know, that, that's like, hey, wait a second, we've been with you for, you know, five years as an example. Let's just say, you know, in our company from the very beginning, we really, I don't think we over indexed that. I think that implies that we went too far. But we really, we highly indexed on, on taking care of our customers. Back to, so from a service perspective, back to, you know, having a clear point of view on our ICPs, which is, you know, there's a combination of founders, slash CEOs with a, with an O, with probably a high emphasis on founders, just because I understand the nature of that journey so well, that, you know, we needed to be doing everything we could to serve these people and help them and be available for them, you know, as soon as we possibly could be almost 24 by 7 because we didn't, you know, want to have someone, you know, sort of struggling with our attempt to help them. And so, you know, there's just, in my mind, there's always been this, just this neat, this, this deep respect and appreciation for the founder's journey. And, and we wanted to be there to help them. So that's why service was so important, because the ICP was so important, and we wanted to serve that ICP as best we possibly could. Because once again, we know how hard journey is associated with building a great company. So, you know, those four things are the forever agreements. And as I said, I think that they're forever agreements, because if you build a great company, part of the building of the great company is setting it up so that you can pass the torch to the next generation. The next generation. The next generation. And those who pick up the torch respect the. That that you built, and they respect your forever agreements. I think I've shared this before on the podcast, but, you know, part of what I want to do is actually have a contract with, with my successor. Right. And with the board and say, hey, right, this is super important to who we are. Please don't screw with it. Well, right.

Cole Abbott

[0:07:11]

That's explicit, coherent and resonant.

Mark Abbott

[0:07:13]

Yeah.

Cole Abbott

[0:07:13]

You have to have those things be made explicit. And I, I think most, I far. Most businesses do not have these things made explicit. And so when the founder departs, things kind of falter and flail a little bit. And a lot of times it just goes continuously downhill because you have a bunch of people not understanding where the problem lies. And so they're just ripping things out, trying to see what works, what doesn't work, but they don't understand it. Like forever agreements, for example, are all interrelated and.

Mark Abbott

[0:07:44]

Right.

Cole Abbott

[0:07:44]

So if we are, I would argue our value proposition is journey based.

Mark Abbott

[0:07:50]

Right.

Cole Abbott

[0:07:50]

That has to do with the fact that, yes, being a founder is a journey. The versus is a CEO or just visionary. If we were just to have that as being the core focus, there's not really much of a journey there. Not as much.

Mark Abbott

[0:08:03]

Right.

Cole Abbott

[0:08:03]

There still is, but it's not one to a thousand.

Mark Abbott

[0:08:07]

It's not the same level of intensity, for sure. Right. Going from stage one, right. From the idea, I like to say, to ipo. Right. Going from stage one to stage two to stage three, to stage four, to stage five. Right. That climb is a hard climb. Right. And one of the things that we're now really starting to appreciate more than we ever have, and we're almost eight years into this game now. Right. Just a month or two from eight years is what percentage of our clients are actually, like, struggling through stage three. And, and it, it, I think it's, you know, back to the. If you look at who's in stage 1, 2, 3, 4, the highest percentage of our clients, I'm pretty sure, are in stage three. And part of the reason that they're. That they're in stage three, part of the reason that they embrace eos. As an example, in my opinion, we'll do the research on this, is because of the struggle associated with getting everybody ultimately on the same page. In terms of your operating system. Right. How you do work, how you work together, how you collaborate together, how you communicate. Right. How you make sure that people and teams are capable of working across and up and down together. That's hard. Yeah.

Cole Abbott

[0:09:33]

And for a founder, you're not in everything all the time at st. Right around stage three, or you're starting to be removed from stuff.

Mark Abbott

[0:09:39]

That's right.

Cole Abbott

[0:09:40]

There's a lot of content these days that supports getting you from zero to stage three.

Mark Abbott

[0:09:46]

Right.

Cole Abbott

[0:09:46]

There's a lot of stuff on YouTube, a lot of that entrepreneurial stuff. EOs, they really help with that stage of the journey.

Mark Abbott

[0:09:52]

Yeah.

Cole Abbott

[0:09:52]

And then it's like just a completely different language moving into the more. I don't want to say enterprise, but it's. It's getting there.

Mark Abbott

[0:10:00]

Right.

Cole Abbott

[0:10:00]

More of a company motion versus an entrepreneurial motion.

Mark Abbott

[0:10:04]

Yes.

Cole Abbott

[0:10:05]

And there's such a shift in. In the systems you're using and in the philosophies you're learning from, and especially the people that you're learning from from a content thought, leadership perspective. And there's not really anyone in that middle zone because it's kind of tricky. And so it's. You can make simple things for big businesses and you can make simple, ish things for entrepreneurs.

Mark Abbott

[0:10:27]

Yeah.

Cole Abbott

[0:10:27]

But how do you bridge that gap?

Mark Abbott

[0:10:29]

Yeah.

Cole Abbott

[0:10:29]

And it's just really hard. And so from a financial perspective, does that really make sense to index on? Probably not. But. Right. Where that responsibility has been abdicated. That's where the opportunity lies.

Mark Abbott

[0:10:41]

Yeah. Right.

Cole Abbott

[0:10:43]

And. And that's something that we need to serve. And bridging that whole journey and making it into one cohesive thing. So all the stuff that you've built up over stage one, two, three, puts you in a good position to work into stage four and five.

Mark Abbott

[0:10:54]

Yes.

Cole Abbott

[0:10:54]

Not just to get you to that point and then you're standing in a desert, like, metaphorically speaking, and have no idea where to go.

Mark Abbott

[0:11:00]

This is an area where we're really investing right now. In terms of understanding our client and clients and helping the best we possibly can with regard to their journey. Right. And when you and I think even when we look at all of our coached clients and you know, we know the power of eos. Right. As an example. But when we look at our coach clients, the coaches get the leadership team, the senior leadership team to embrace the notion of getting to be at least 80% strong across the six key components. But where EOS seems to be not doing what I want it to do, not accomplishing what I would love it to accomplish, is to help everybody understand that the real power is not just to get the leadership team right. All on the same page, but to get the entire company on the same page. And so we see whether it's self implementers or coached companies, this struggle to get everybody up and down and across the organization on a unifying operating system. Right. And, and, and I use the term unifying as opposed to unified because unifying is present tense.

Cole Abbott

[0:12:28]

It's part of the journey. It's part of the journey, something that you accomplish because you have to work to keep it unified.

Mark Abbott

[0:12:34]

Yeah, yeah. Right.

Cole Abbott

[0:12:35]

There's always those forces of entropy you have. You're going to have some people that, whether it's conscious or not and like the stratification of things.

Mark Abbott

[0:12:42]

Yes.

Cole Abbott

[0:12:43]

They like the separation because it, I mean a hierarchy kind of thing. It's like if you like that. Oh, you got to acknowledge that it's a bias.

Mark Abbott

[0:12:50]

Right.

Cole Abbott

[0:12:50]

But you want to bring everybody up because you're not doing this for yourself, you're doing it for the, the team, for the organization. There's not really a immediate incentive to do that work the whole company.

Mark Abbott

[0:13:02]

It's hard work.

Cole Abbott

[0:13:03]

It's a lot harder.

Mark Abbott

[0:13:04]

Yeah.

Cole Abbott

[0:13:04]

And it's only going to get harder if you keep putting that off.

Mark Abbott

[0:13:07]

Yes. Because what.

Cole Abbott

[0:13:09]

There's a little bit of an escape velocity there where at some point if you just haven't done that, it's like o. You're going to take, it's going to, you're going to have to let go of a lot of people. You're going have to restructure everything. It's going to be complete chaos and you're going to stall things out for quarters optimistically.

Mark Abbott

[0:13:24]

Right, right.

Cole Abbott

[0:13:24]

If you're doing this at a thousand person company and you want to really get everything moving, it's like. Yeah, it's a lot of inertia there.

Mark Abbott

[0:13:31]

Because, because what, what, what, what happens is. And this is, we're seeing and we're doing, we're doing the research on all this, right? But once you get into sort of the higher elements of stage three, all of a sudden now it's like, oh, man. Because I didn't appreciate the way the company would evolve, right? I didn't. I chose not to fight the battle around one department using Asana, another department using Monday, another department using ClickUp. I chose not to fight these battles because there's tremendous amount of battles to be fought as you're navigating this, you know, the initial five stages of development and, you know, you all of a sudden you look down and you're like, oh, shoot, right? If we're going to really, really take this to the next level, we got to all get on the same page with regard to all the things that we matter and including the tools that we're using. Right? And so, you know, and a lot of times what will happen is, you know, you hired someone who's really good. I'm just making this up with one tool and yet the company is using another tool. And, you know, next thing you do is you turn around and the company's got a, you know, like a bunch of different people using a bunch of different tools. You don't have a unified operating system at that moment in time. It's un. Unified, right? And so now you got to go through all these efforts, you know, and ultimately to bring it back to the forever agreements, we, you know, in order to properly serve your icp, in order to properly, properly really execute on your compelling value proposition, in order to create a company that has a very sort of healthy company oriented culture, as opposed to a department oriented culture or a team oriented culture or an individual oriented culture, right? You got to have, you know, you, if, if you allowed it to get to this place now you got to start breaking stuff down. And people don't like it because, well, you know, we've been working, you know, we've all been using this tool over here in our department and we're, we.

Cole Abbott

[0:15:48]

See a little bit of it in.

Mark Abbott

[0:15:49]

Our own company, right?

Cole Abbott

[0:15:50]

There's a little bit of human nature there. Yeah, there's human nature to complicate things.

Mark Abbott

[0:15:56]

Right.

Cole Abbott

[0:15:57]

Even though people crave and love simplicity, it's in our nature to complicate things. And when you have all these things, it just creates chaos. And if you're trying to, you're picking your battles, right? But are you picking your battles in terms of, oh, I'm gonna save this battle for this day while I work on what the actual core issue is, or am I Just ignoring this for now. Because if you're just ignoring that for now, that's not really a great strategy because it's only going to get worse while you're ignoring it.

Mark Abbott

[0:16:23]

Pay now or pay later. And the pay later is going to be a much higher price, right.

Cole Abbott

[0:16:28]

And your ICP is going to crave the simplicity, right? You're supposed to simplify things, make things better. And if you're not, you don't have simple inputs, you're going to not be focused. And so, right. Simplicity reads focus, which then breeds simplicity. Simplicity in the inputs creates focus in the organization, which creates simple outputs. And we see, we see issues with that and we're obviously over sensitive to the things inside. And you look outside and talk to other people and it's really chaotic. And they're. A lot of people's instinct is, well, we need to add more, right? We need to put more things in motion, try other tools where it's like, no, no, we just need to focus on this thing, right? And then have a strategy. Moving forward.

Mark Abbott

[0:17:10]

And slow is smooth and smooth is fast. And so sometimes we, you know, there is the proverbial know two steps backwards every now and then makes sense so that you can get back to, you know, two steps forward, one step backward. But that two steps forward, one step backward is. That's. You will never, it's a. You will never not have at best, two steps forward, one step backward, success.

Cole Abbott

[0:17:35]

Growth, scaling, whatever you want to call it is not linear.

Mark Abbott

[0:17:38]

No.

Cole Abbott

[0:17:38]

And that's fine.

Mark Abbott

[0:17:40]

Yeah.

Cole Abbott

[0:17:40]

I think it's worth saying that. Great. The great founders all obsess over the details, which is not that they're perfectionists, it's more. They are aware of all the little things and they want to make sure that all of those things are in order. They're aware of everything that's going on for the most part, and all the things that indicate that there are issues and then they worry about those things because having that creates the simplicity, it creates the cohesion.

Mark Abbott

[0:18:05]

And I can only speak for myself on so obviously cannot be put into a category of a great founder at this particular point in the point in time, maybe 10 years or 15 years from now, someone will say, you know, what we did was pretty bloody cool. But what I know from my perch is when I look over, because this is the difference between stage three and stage four, right? In stage four, you are conducting an orchestra where everybody, right, is on singing from the same sheet of music, right? Everybody's in tune, the whole orchestra is playing really, really well. Together and all talented.

Cole Abbott

[0:18:45]

They're all present.

Mark Abbott

[0:18:46]

Right.

Cole Abbott

[0:18:47]

This actually means something.

Mark Abbott

[0:18:48]

Yes.

Cole Abbott

[0:18:48]

Not just like, oh, there's a dude waving his little wand around.

Mark Abbott

[0:18:51]

Right. And, and I, and I believe that if you want to look at the orchestra and we're mixing metaphors right now a little bit. Right. But if people want to use different sheets of music. Right, right. They want to play instruments that are tuned differently. Right. That's, you know, that's just. What's it? Cacophony or whatever.

Cole Abbott

[0:19:09]

Cacophony.

Mark Abbott

[0:19:10]

Cacophony. Thank you. Sorry. See, I get to embarrass myself here. Right. But, but it's just, it's, it's chaos. It's, it's, it's noise. Right. And when you're above it, you can see and hear this. But the people in the departments and then the teams, they don't hear the whole thing. They just hear their own music. Right. And they think they're doing a decent job. Right. And, but the reality is when you stand back and especially when you're transitioning from stage three to stage four, if you're listening closely, you hear this stuff and, and, and you can hear the little things that are going on. And, and then you, you, you, you, you step in and you say, guys, this isn't working. These are the reasons why. And then, you know, I've experienced it recently where I get accused of being involved in the what, not the how. Right. And it's like. But I know the what's not working. I know we're not focusing on, you know, making sure that we're all using an instrument that's tuned to the same note. Right. And, and, and, and I can see that it's just getting, going to get worse if we continue to go here because we're creating stuff that we're going to have to ultimately either unwind or redo. So slow is smooth, smooth is fast. And, and the cultural stuff, right back to the forever agreements. I think you said it earlier, it's not that people aren't trying to do the right thing, right. It's. Their perspective is narrower than yours and, and they think they're doing the right thing thing. Right. But they don't appreciate the bigger picture, longer game. That's your job, right? Your job is to be playing the bigger picture, longer game. Part of the, part of the, you know, in terms of leadership. And so sometimes, you know, sometimes it's easy to explain things, and sometimes, you know, it's not. We've talked about this in the Founder Boat series. Sometimes you know, it's. You're in. Your instincts tell you this isn't right, but you can't explain it entirely. Sometimes I'm guilty of not wanting to take the time I probably should take in order to explain everything and slow everybody down and, you know, the whole moment we're in. Took me nine months, maybe six months. Right. To get everybody on the same page.

Cole Abbott

[0:21:42]

We're still in the moment, I would.

Mark Abbott

[0:21:43]

Argue, and we're still working through it. Yeah, but on the C suite level, you know, to get the C suite. Yeah. Just to align with me on the moment we were in or are in. Took me almost six months, you know, and. And I'm not. I'm not a wallflower. I'm pushing on this stuff, but I'm also involved and they're involved, and we're working on all these different things. And it's the same thing with regard to our transition to, you know, having a consistent view on performance. Right. The whole transition to ABCD that we've undertaken over the last. That took nine months. So sometimes some of this stuff is just, you know, you sit there and you're patient with regard to, you know, the fact that, you know, things aren't being done as well as they could be from a whole company perspective. And sometimes you look at it and you say, I wish I would have done this a year ago. But, you know, you gotta. You gotta choose your battles. But ultimately, back to forever agreements. Getting that culture so that ultimately everybody cares about the company first because that's the. That's the ship. To mix metaphors, right? That's the ship we're all in, right? It takes care of us, you know, and if that ship has issues, then we all have issues. And so, you know, so we got to focus on making sure the ship is strong, the ship is going in the right direction. Everybody's working on the same things, right? Everybody understands that, you know, company first, right? And then. And then next it's, you know, whatever team you're on, the senior team you're on, that's team number one. The team you lead is team number two. And. And I think that there's a lot of. Even in our company still, right, There's a lot of people who care. It's not that they're bad people, but they care. They don't even want to admit it sometimes, right? But they care more about their team than they do the company. And you can see that in the decisions that are being made.

Cole Abbott

[0:23:49]

Well, there's a. There's a bias, right? Where you're the closer the people are to you that you want to take care of those people. Yeah. And it takes a conscious shift in perspective to work around that. And.

Mark Abbott

[0:24:03]

Right.

Cole Abbott

[0:24:04]

There's a lot of areas. We go into stages of development here. The founder's side is easier to work with because then that bias just works appropriately.

Mark Abbott

[0:24:14]

Right.

Cole Abbott

[0:24:14]

You can take care of yourself. So you could take care of the C Suite in your case, then the SLT and so on and so forth. But you have to make sure that those are all in proper order, functioning appropriately.

Mark Abbott

[0:24:24]

Yeah.

Cole Abbott

[0:24:24]

Right. But still be able to observe the domain as a whole and use the things that are going wrong as indicators of other things. Because it's rarely the case that, oh, there's an issue at Stratum 1 and something is made and it's not good.

Mark Abbott

[0:24:40]

Right.

Cole Abbott

[0:24:40]

That it's just like, oh, that person just screwed up.

Mark Abbott

[0:24:42]

Right.

Cole Abbott

[0:24:42]

Like that's not usually how that works.

Mark Abbott

[0:24:44]

Yeah.

Cole Abbott

[0:24:44]

What actually happened, and digging into those things and ideally, leadership is in the position where they understand the mission well enough so they can go help and assist in figuring that out and identifying what the issue is and addressing the. The problem.

Mark Abbott

[0:24:56]

Getting back to sort of stage three versus Stage four and the forever agreements. Right, the forever agreements hopefully help everybody navigate, right. The transition from stage one to stage two to stage three to stage four to stage five. And we can. You can point to these. You can point to our ideal customer, you can point to our compelling value proposition, you can point to our core values, you can point to our compelling why? And say, are the things that we're doing consistent with this? And in particular, are we aware of what stage of development we're in? And do we now need to focus on other things that we didn't need to focus on, you know, in the prior stage? And the answer is yes, that's why there are stages of development.

Cole Abbott

[0:25:51]

You're just exploring successive new territories and expanding your conscious.

Mark Abbott

[0:25:56]

Yeah. Because in a stage, in stage one, right. Founders involved in everything. In stage two, the founder's still pretty involved in everything. Right. It's in that stage three that all of a sudden the founder is releasing, sort of being involved in marketing or sales or product or engineering or hiring. Right. And you know, a lot of times, right, I stayed very involved in hiring up until the beginning of 2024. And, and it's interesting, in 2024 is when maybe we got a little bit right in terms of some of the core value stuff, just a little bit less tight than we used to be in terms of A couple of the dimensions. But, you know, but the point is you, you know, you have to build the company and you have to help the company transition from stage to stage to stage. And you need to understand what the nature of leadership below you is in order for you to let go what, what leadership has to be. And we've talked about this before, but you know, leadership changes on the ones and the threes, right? 100,000, 300,000, 1 million, 3 million, 10 million, 30 million, 100 million, 300 million, 1 billion. Right. And it's just the nature of leadership changes and it's not just the nature of the leadership team at the top of the company. It's the nature of leadership generally throughout the company. It just get, becomes more complex because you're dealing with just a lot more people, right. A lot more systems and processes and methodologies. And if it's truly a company that's operating with a unifying operating system. Right. Making sure everybody is like, we're doing the right things so that the unified operating system is unified across methodologies, it's unified across tools, it's unified across the disciplines, it's unified across performance management, it's unified across leadership and development. I mean, it's get, it gets pretty complex. Right. But it does not scale well if every department's doing its own thing, period, into discussion. Because now more than ever in our company, I mean, people are working across departments, across teams every single day. Right. So those, those forever agreements, they're just like northern constellation, you know, stars within a northern constellation that just helps us navigate and grow and, and, and, and, and, and, and, and look at like, where is entropy harming us, specifically in terms of things that are super important.

Cole Abbott

[0:28:46]

I like stars as an analogy because stars are forever.

Mark Abbott

[0:28:50]

Yeah.

Cole Abbott

[0:28:50]

They do not change.

Mark Abbott

[0:28:51]

Yeah.

Cole Abbott

[0:28:51]

They are there. You can rely on them. Unless it's cloudy, right. We're all gonna have cloudy moments where we lose sight of things. But there's not.

Mark Abbott

[0:29:00]

Right.

Cole Abbott

[0:29:00]

Say you're in a desert. Sand shifts. These things change. Stars don't.

Mark Abbott

[0:29:05]

Right.

Cole Abbott

[0:29:05]

And so it's important to orient yourself around the things that are forever and things that you agree upon. Because if you just say, oh, we're going to use the stars to navigate. And then you don't say which stars are which as a group. And like, that's the North Star. And it's like, no, that's the North Star. Well, obviously in that case you'd be able to point out that no, that is the North Star. Right, but, Right. So if you don't have the agreement among everybody, then it's just you're all moving in different things and, and that doesn't work.

Mark Abbott

[0:29:32]

Right.

Cole Abbott

[0:29:32]

It's like you said earlier when you want to have a contract with your successor and with the board, that this is the mission of the thing and we don't go against that.

Mark Abbott

[0:29:42]

Right.

Cole Abbott

[0:29:42]

Because there's gonna be times where it is cloudy and you want to change up the strategy.

Mark Abbott

[0:29:45]

You can decide that there are more core elements to your forever agreements in the four I just, just mentioned. Right. But if you do have those, and I would submit to you, and I'm going to submit to you in a second that we actually have a, a fifth forever agreement out of five. All right. It'd be interesting to see what, what you have. Right, but. But there's a fifth one for sure. And for me and for us is high trust relationships with all of our ideal stakeholders. Right, that's, that's mine. You, you may have a fifth one, a different one. Right.

Cole Abbott

[0:30:24]

Like yours would go into mine. Okay, so.

Mark Abbott

[0:30:27]

All right, I'm. Yeah, so I'll shut up, then I'll hear yours. But I want to talk about this one because I think for us, this is really super important.

Cole Abbott

[0:30:35]

I just say that's guiding principle.

Mark Abbott

[0:30:37]

Yeah.

Cole Abbott

[0:30:37]

Right.

Mark Abbott

[0:30:38]

Yeah.

Cole Abbott

[0:30:38]

It's like that's a thing, and we do not go against that thing.

Mark Abbott

[0:30:41]

Right, Right.

Cole Abbott

[0:30:42]

That's a, that's a hard arrow, vector, boundary, whatever you want to call it, don't go against that. That's what we're doing. And it's, it's basically a sub y where you could either sit scouting principle or motivate. Core motivator.

Mark Abbott

[0:30:54]

Right.

Cole Abbott

[0:30:54]

I think you could use those interchangeably. Just one's a little bit more emotional, for lack of a better word. One's more rational.

Mark Abbott

[0:31:01]

Right.

Cole Abbott

[0:31:02]

Is it derived from your wire? Is it derived from first principle? Is that. That's a right, a thing. But I do think having those principles is important because I think that they sort of support the core values because there's companies out there. I think it seems like there's increasing numbers of companies out there that use the principal model over the core values model. But I do think it's important to have like, what are the main principles that we hold dear.

Mark Abbott

[0:31:28]

Right.

Cole Abbott

[0:31:29]

That really matter for us. Guiding principles, not first principles. So that those are always front center emphasized. Because if you have a list of 20 guiding principles, that's gonna be a lot harder for people to hold dear versus four or five core values. So I think, I think there's value in both, I just think principles matter more. And then they helped you to inform your core values as heuristics derive from the guiding principles.

Mark Abbott

[0:31:55]

What would be your fifth?

Cole Abbott

[0:31:57]

I would say. Right. First principles. Why? Compelling.

Mark Abbott

[0:32:00]

Why?

Cole Abbott

[0:32:00]

Yeah, I would say that's. Those are top.

Mark Abbott

[0:32:02]

Right.

Cole Abbott

[0:32:03]

Because it's like you can't change the way the world works.

Mark Abbott

[0:32:05]

Right.

Cole Abbott

[0:32:06]

So you're like, I wish human nature were this way, for example. It's like, well, it's not, so whatever. Right. There's a. All stages of ego development that you could pull into that where it's like you have to be aware of this. You have to be aware of the journey where people are. So that when you get to your ICP and building that out, we're informed. We actually have done our intuitive research here. Right. So first principles, compelling. Why then like your guiding principles and motivators, however you want to say those things are.

Mark Abbott

[0:32:32]

Right.

Cole Abbott

[0:32:32]

And these could be 1, 2, this is in like 1, 2, 3, 4. Right. Then your core values.

Mark Abbott

[0:32:37]

Yeah.

Cole Abbott

[0:32:37]

Then your ICP.

Mark Abbott

[0:32:39]

Yeah.

Cole Abbott

[0:32:39]

And then how do you serve your ICP? Your unique value or compelling value proposition.

Mark Abbott

[0:32:43]

Yeah.

Cole Abbott

[0:32:43]

So I would say that's the forever agreements. And I would put them as one in parts one and two as why Principles and then core values, icp, unique value proposition. Because then that's kind of how that core interacts with the world around it and serves that world, serves that clientele, that audience.

Mark Abbott

[0:33:03]

So you're basically adding first principles as one of our forever agreements, a first principle based way of looking at an understanding the world and dealing with opportunities and problems.

Cole Abbott

[0:33:22]

You can argue it's not really an agreement because it's just if they are first principles, it's like this is just the way things are. And that's more of an implied thing among leadership. It's like you should understand a first principles based thinking or based approach.

Mark Abbott

[0:33:34]

Right.

Cole Abbott

[0:33:35]

And in guiding principles, I would argue that that's more of a agreement because there is debate on what we want to prioritize.

Mark Abbott

[0:33:42]

Right.

Cole Abbott

[0:33:42]

What bits of earned wisdom we want to make explicit for the organization or for leadership or whoever, and make sure that we're acting in accordance with those.

Mark Abbott

[0:33:51]

Yeah.

Cole Abbott

[0:33:51]

Same with core. I mean, you gotta have explicit core, but.

Mark Abbott

[0:33:54]

Right.

Cole Abbott

[0:33:54]

The rest of that, that's just obvious. Yeah.

Mark Abbott

[0:33:56]

But it's. It's in. It's interesting. I don't think.

Cole Abbott

[0:34:00]

All right, let's.

Mark Abbott

[0:34:01]

I'll ask you this question. What percentage of companies do you really think understand and deeply try to respect first principles?

Cole Abbott

[0:34:12]

Small percentage.

Mark Abbott

[0:34:13]

Yeah.

Cole Abbott

[0:34:13]

Or you're talking whole or are we talking successful companies, great brands, big comp. I. I think they understand those things, whether it's conscious or not.

Mark Abbott

[0:34:25]

Right.

Cole Abbott

[0:34:25]

I think it's just, well, this is how people are, and it's one of those. Right. If you could say a disagreeable founder would enter a conversation around that and someone tries to argue about that and, like, this is stupid. I'm not entertaining this conversation.

Mark Abbott

[0:34:36]

Right.

Cole Abbott

[0:34:36]

Because it's like, I'm not. If you don't get this, I'm not going to be able to get you over here.

Mark Abbott

[0:34:41]

Yeah.

Cole Abbott

[0:34:41]

Right. So it's like if. If I'm arguing with somebody or discussing it with somebody about what we do and how we need the message and all that, and they don't appreciate that we're serving people on a journey.

Mark Abbott

[0:34:52]

Yeah.

Cole Abbott

[0:34:52]

And that. That's complex and nuanced and has to be personalized and all from one cohesive base.

Mark Abbott

[0:34:57]

Yes.

Cole Abbott

[0:34:58]

And it's like, well, that's complicated. It's like, yes, I know. That's complicated. It's hard.

Mark Abbott

[0:35:01]

Yeah.

Cole Abbott

[0:35:01]

And that's why nobody's really served the stage two to four thing.

Mark Abbott

[0:35:06]

Yeah. Well, no example.

Cole Abbott

[0:35:07]

I don't.

Mark Abbott

[0:35:07]

I don't think anybody's done one to five.

Cole Abbott

[0:35:09]

No, I would agree. I don't think no one's done it well.

Mark Abbott

[0:35:12]

No one's done it Well, I think.

Cole Abbott

[0:35:13]

We could say that.

Mark Abbott

[0:35:14]

Yeah.

Cole Abbott

[0:35:14]

And it'd be still around and.

Mark Abbott

[0:35:16]

Right.

Cole Abbott

[0:35:17]

Doing.

Mark Abbott

[0:35:18]

Yeah. We're not. We're not aware of anybody, so could be out there. Yeah.

Cole Abbott

[0:35:21]

We're not aware.

Mark Abbott

[0:35:22]

Right.

Cole Abbott

[0:35:22]

Someone's gonna say no one has done it.

Mark Abbott

[0:35:23]

Well, it's a small group. It's a small. Whatever work they've done is not well known. Right.

Cole Abbott

[0:35:29]

If we measure success by the positive impact that it's had.

Mark Abbott

[0:35:32]

Yeah.

Cole Abbott

[0:35:32]

Or that group.

Mark Abbott

[0:35:33]

Yeah.

Cole Abbott

[0:35:33]

Then no one's done it well.

Mark Abbott

[0:35:34]

Yeah.

Cole Abbott

[0:35:35]

Right.

Mark Abbott

[0:35:35]

Yeah. And.

Cole Abbott

[0:35:36]

And so those little things that you. If. If you're struggling there.

Mark Abbott

[0:35:39]

Right.

Cole Abbott

[0:35:39]

It's like, okay, well, if we're here and we have a disagreement, then we can go down another level.

Mark Abbott

[0:35:43]

Right.

Cole Abbott

[0:35:43]

And just get down to first principles. And if you have all the time in the world.

Mark Abbott

[0:35:47]

Right.

Cole Abbott

[0:35:47]

You can, you can make. You can get someone to appreciate and understand the thing that we're doing and then. Then build back up so that we are speaking the same language and moving in the same direction. But it's an issue at higher stages when you have to do that with the whole company. You don't have the time. Right. To sit with every employee and get them on the same page because it gets Increasingly complex. So the whole leadership and everyone starts to cascade and understand. Understand and cascade. The forever agreements.

Mark Abbott

[0:36:15]

Yes.

Cole Abbott

[0:36:15]

All of the things that are derived from that.

Mark Abbott

[0:36:19]

Right.

Cole Abbott

[0:36:19]

So I would say, like essential core business activities are derived immediately and then the secondary supporting stuff like data research, tactics, whatever.

Mark Abbott

[0:36:28]

Right.

Cole Abbott

[0:36:29]

As we, as we move further and further from that, those things will evolve accordingly. And we need to have. I also not to just completely derail this.

Mark Abbott

[0:36:38]

Right.

Cole Abbott

[0:36:38]

Your forever humans can evolve.

Mark Abbott

[0:36:41]

Right. It's a question of evolving versus being destroyed.

Cole Abbott

[0:36:47]

Right. Don't just destroy the thing. Don't rip it out. I understand it. There is probably a little bit of a thing in there. And so with core values, for example, you could discover that they're not great heuristics for the principles that you want. Principles and values that you want to own.

Mark Abbott

[0:37:06]

Right.

Cole Abbott

[0:37:07]

To hold dear and sacred. Maybe it's like, well, we had this intent behind it, and then we see that in reality it's not performing as it should. Right. Heuristic is only as good as the behavior that it encourages.

Mark Abbott

[0:37:18]

Right.

Cole Abbott

[0:37:19]

And so you have to fine tune it a little bit. And so all the words may change.

Mark Abbott

[0:37:23]

Right.

Cole Abbott

[0:37:24]

The thing is still the same. The essence is still the same.

Mark Abbott

[0:37:26]

Yeah. I mean, it's like we've talked about this before. We added gssd. Right. Since we've started the company, we've tweaked the language around probably almost every single core value, but just to get it so that, as you said, just to get it so that generally speaking, people understand what that core value really means better.

Cole Abbott

[0:37:53]

Yes.

Mark Abbott

[0:37:54]

Yeah. And.

Cole Abbott

[0:37:55]

And your. Why can it can be the same thing, but you're just gonna, as you peel things back, peel back the layers, you're gonna understand it and refine it a lot more. So some of them refine, some of them evolve. There's always a little bit of organic change within these things.

Mark Abbott

[0:38:10]

Yeah.

Cole Abbott

[0:38:11]

But as you get further and further from the core, right. There's more. It's more flexible. Right. The core is rather rigid.

Mark Abbott

[0:38:17]

Yeah. The essence is enduring, I think. You know, one of the. The. The. The founder of Whole Foods was talking about what in an. In an. In a podcast that I listened to recently about, you know, sort of pragmatism versus idealism. Right. And as far as he was concerned, you know, he would have loved for everything to be pure organic that they sell. Right. And he would have loved to have not had certain types of product or certain types of manufacturers on the shelf. But there comes a point where you get so idealistic that you lose the.

Cole Abbott

[0:39:02]

Game that's losing sight of if you're trying to best serve great food with great ingredients to your customers. And this sense of idealism is keeping you from doing that aren't doing a great job.

Mark Abbott

[0:39:14]

Right, right.

Cole Abbott

[0:39:15]

You're not serving them as well as you could.

Mark Abbott

[0:39:17]

Yeah. So sometimes back to these definitions, you know, we, we, we do. I may as an example, think that these words work and yet they don't. And so I've got to say, and I could say, well, damn it, every single buddy and person in the company should just understand this stuff. And I can, you know, pound my feet on or hands on the table and say we shouldn't hire people who don't get this. And the reality is that that's not always the right answer. Right. The right answer is to figure out how to play the long game, how to be the best you possibly can be, taking into consideration the nature of the game you're playing, including the nature of the players that you want to bring in and have plan your team. And so I think that, you know, this is part of the challenge that you know, sort of strong minded, strong headed founders I'm sure deal with on, you know, like I have. Right. You deal with what's most useful. How do you balance the getting all this stuff really nailed, but also making sure that it resonates and performs its purpose and, and that when it get, when you pass the torch. Right. It gets it. It's understandable. Should be understandable by the CEO. Right. Or your successor.

Cole Abbott

[0:40:43]

I mean it's usually not.

Mark Abbott

[0:40:44]

Well, you know, that's a whole another conversation which I think is, you know, shame on the board, shame on those involved in the interviewing process. But lots of times someone will come along and they will want to make their mark and they will rip something out without truly appreciating it. Back to Chester Sims Fence. Right. And next thing you know, you'll be losing talent or you'll be losing customers or you'll be losing ideal stakeholders. And you know, and I'm not sure and we can do the research on this. Right. I'm not aware of very many successor CEOs who rip something out from a great brand, from a great company that ended up being remembered as a great CEO.

Cole Abbott

[0:41:48]

But even when the company is run horribly, if the forever agreements in the soul remain intact or at least revivable to some extent, then you can bring in the structure, bring in the expertise to revive that and make it great. And that's basically just lvmh, like that's their entire business.

Mark Abbott

[0:42:06]

Model.

Cole Abbott

[0:42:07]

It's like, oh, that's a good brand. What worked.

Mark Abbott

[0:42:09]

Right.

Cole Abbott

[0:42:10]

And why is a good name and is run horribly.

Mark Abbott

[0:42:12]

Yeah.

Cole Abbott

[0:42:13]

Let's just go buy that and then it'll be worth a lot rather quickly.

Mark Abbott

[0:42:17]

Yeah. Well, it could, you know, war enough. It was.

Cole Abbott

[0:42:20]

Don't sell it as a key part of it. Because the forever side of it is. That's now part of us.

Mark Abbott

[0:42:25]

Yeah.

Cole Abbott

[0:42:25]

And we want to serve that forever.

Mark Abbott

[0:42:27]

Right. Because we think it's a brand that can be an enduring brand. A forever brand. Right.

Cole Abbott

[0:42:31]

Not just like a five year turnaround.

Mark Abbott

[0:42:33]

Yeah.

Cole Abbott

[0:42:34]

Private equity.

Mark Abbott

[0:42:34]

And then flip it.

Cole Abbott

[0:42:35]

Yeah.

Mark Abbott

[0:42:36]

Right. And. And you know, Warren Buffett and I will completely destroy the. The quote. Right. But it was something to the essence of, you know, you want to buy and invest in the company that could survive a fool. Because whether you like it or not, someday it's likely going to have a fool for a leader and you can get rid of that person. But at its core, it's a great company and it will survive that moment of time being led by a fool. And the fool, in terms of this conversation is one of those people who rips out something that's just core to who the company is.

Cole Abbott

[0:43:14]

Well, that's. I would say that behavior is foolish.

Mark Abbott

[0:43:16]

Exactly.

Cole Abbott

[0:43:17]

Yeah. And Buffett's whole.

Mark Abbott

[0:43:19]

Right.

Cole Abbott

[0:43:19]

One is core motivators is. Right. In order to win, you must survive. You must first survive.

Mark Abbott

[0:43:26]

Right.

Cole Abbott

[0:43:26]

And so if you get to the point where it's like. Or you could die, it's like, well, that's not very good.

Mark Abbott

[0:43:30]

Right.

Cole Abbott

[0:43:31]

So how can you avoid those catastrophic events and having forever agreements where everyone's on the same page keeps everything in the worst of times on track.

Mark Abbott

[0:43:42]

Yeah. One of the questions that I think is an interesting one, and it may not maybe it's another whole podcast. Right. Is when you think about a brand and a great brand. Right. How much of a great brand is attributable to explicit, coherent resident forever agreements?

Cole Abbott

[0:44:01]

I think a lot of it. Explicit's the only one where it's explicit and agreements are iffy because I think a lot of them is just the founder was really aware, consciously or not, really focused on the coherent and resonant side of things because it's all from one simple place. And I think that this is a new field of making this stuff explicit and sort of codifying the soul of the thing so that it can be passed on. But, well, why center things are a lot harder to do that with than what centered things. Like if you have a operationally excellent business it's like, it's a lot easier to make that work. Like the more industrial type things versus the more artistic ones are. It's harder to do that. You look at Ferrari, for example, or Red Bull or whatever. It's like those are harder to.

Mark Abbott

[0:44:52]

For LVMH as an example, because I know we find that a great case study. Right. When they go and buy something, they understand. Right. They understand. Whether you call it explicit or implicit, they understand what the core of that brand is. Right.

Cole Abbott

[0:45:08]

And they keep it by industry so that they're able to use these frameworks. But they're very much. They will not. And this is a very big thing for them. They will not go buy something that is at odds with their. With their own Forever Agreements. So it's a lot easier to buy these things and have them assimilate into their system than it is to go out and buy some. Like, that's a really powerful brand in luxury. But their values don't align. But it's a great opportunity financially. It's like they just won't do that.

Mark Abbott

[0:45:34]

Yeah. Right. That's.

Cole Abbott

[0:45:35]

That is a guiding principle for them.

Mark Abbott

[0:45:36]

Yes.

Cole Abbott

[0:45:37]

It has to align with their Forever Agreements.

Mark Abbott

[0:45:39]

Right.

Cole Abbott

[0:45:39]

With their why, with their core values. And for the most part, the ICP stuff.

Mark Abbott

[0:45:47]

Yeah.

Cole Abbott

[0:45:47]

Is pretty similar.

Mark Abbott

[0:45:48]

Very similar. Right.

Cole Abbott

[0:45:49]

And I think that they are. When it comes to the compelling value proposition, they think that it's. That the things are more aligned than they probably are. Which is fascinating because I think it's. While you could say it's a little bit delusional, I think it's beneficial in the behavior that that encourages.

Mark Abbott

[0:46:09]

Yeah. I'll submit it could be kind of cool for us to do a couple. Three, four, five, six, seven. I don't know if we do it 1, 2, 3, 4, 5, 6, 7. Podcast. But just to go and look at a bunch of companies through the lens of Forever Agreements and talk about them.

Cole Abbott

[0:46:25]

I think the more interesting thing to do would. Would be to look at. If you could break it down by stage.

Mark Abbott

[0:46:31]

Right.

Cole Abbott

[0:46:32]

Because there are good. There are stronger brands at different stages.

Mark Abbott

[0:46:35]

Yeah.

Cole Abbott

[0:46:36]

And if.

Mark Abbott

[0:46:36]

If. Right.

Cole Abbott

[0:46:37]

There could just be a thing where it's like, it's gonna be hard to find a stage one. That's a lot of information.

Mark Abbott

[0:46:40]

Yeah.

Cole Abbott

[0:46:41]

But where someone had a very interesting and experience that illuminates a lot of the issues with stage one from a company perspective and, and try to figure those out. It may not be able to do stage one, but stage three, four or five.

Mark Abbott

[0:46:53]

Right. Those.

Cole Abbott

[0:46:54]

We could definitely find stuff and Then break it down and. And sort of analyze the companies from those. Those models and those frameworks.

Mark Abbott

[0:47:02]

Yeah, I think one of the things I. I did. This is a related, Related idea. But one of the conversations and research things I did with AI recently was to talk about was to engage in a conversation around Steve Jobs and why he was so successful as a visionary, Even though a lot of people talk a lot of crap about him as a human being on occasion, like, you know, hard ass and blah, blah, blah. Right. And so I. I kept going down this rabbit hole and. But ultimately I got down to the question of. Isn't part of what made him great? He was always, always authentic. He always stuck to his guiding principles. And. And if you were on the bad side of him and it was around you just disrespecting or not understanding a guiding principle. Right. It's kind of like, you know, he was always authentic about it, and so people deeply respected his authenticity. And I think that's part of what made him extraordinary was he was so principled and.

Cole Abbott

[0:48:16]

And good at communicating those principles.

Mark Abbott

[0:48:18]

Yeah.

Cole Abbott

[0:48:19]

There's no fluff around it. It's just like, hey, you did this. That was bad. If you.

Mark Abbott

[0:48:23]

Right.

Cole Abbott

[0:48:23]

If you go to a meeting and you were sloppy and you're not prepared and you're not paying attention, it's like, hey, I noticed that. I don't know what's happening. All good. All good's not the right way to put it, but if you do that again, you will not be back on campus next week.

Mark Abbott

[0:48:35]

Right.

Cole Abbott

[0:48:36]

It's like, nope, that's it. Just don't do that thing. One of the interesting interactions was with Johnny. I've. And Johnny was saying that you're being hard on the team, and they're, you know, it's a struggle. He's like, no, Johnny, you're just vain. He's like, what do you mean? He's like, you just care about their. You care about their perception of the thing more than you care about putting out the product.

Mark Abbott

[0:48:56]

Right. And by and by definition, you care. Then back to our conversation earlier. You're caring more about your team than you are what's right for the company.

Cole Abbott

[0:49:04]

And that just comes back to the guiding principle. Like, the product comes first, excellence comes first. If the team is not doing a good job with the product, there's something wrong there.

Mark Abbott

[0:49:13]

Right, Right. And inherent in there are forever agreements.

Cole Abbott

[0:49:17]

Exactly.

Mark Abbott

[0:49:18]

All right. It's probably a good place to end.

Cole Abbott

[0:49:20]

Probably.

Mark Abbott

[0:49:22]

Thank.