Erudio recently sat down with Joel Montgomery, a member of its global network of advisors and founder of the Secret Sauce Project, to discuss his motivation and vision for working with early stage start-ups to establish what he calls scalable values-based companies. “It’s hard to find companies that remain committed to instilling their values in their culture, an oversight that limits their long-term potential,” states Joel.
Joel graduated from Yale University with a BS in Mechanical Engineering and the Thunderbird School of Global Management’s MBA program. He has worked in 31 countries, lived in five, and speaks three languages. He has a varied professional experience, supporting both large Fortune 100 companies and small start-ups while spending the majority of his post-MBA time in the social sector with Acumen and Endeavor Global, working in countries like Turkey and Pakistan to fund promising local businesses and cultivate aspiring entrepreneurs.
Currently, Joel is focused on The Secret Sauce Project, which will lay the foundation for his ultimate goal of creating a start-up factory for companies that will disrupt the way their industry peers do business, for the better. The secret sauce? Let’s find out…
Q: Tell me about the Secret Sauce Project.
A: The Secret Sauce Project is really a quest to discover the secrets of running scalable values-based companies. There are two sides to the project: research and consulting.
On the research side, I’m conducting interviews with the most successful values-based companies and also running my own research to determine how certain companies maintain their values inside their culture, and how this leads to success. The consulting side of the business has to do with working with companies to help them shape the way they think about infusing their values into all aspects of the business. Through advising, I try to show my clients the benefits of being a values-based company and strategies for scaling this priority throughout the organization. I take what I’ve learned in my research and share best practices and strategies for achieving a comprehensive values-based organization. Because it’s so difficult to change culture in an established organization, I have decided to focus my efforts working with start-ups and entrepreneurs.
Q: What do you mean by values-based organizations?
A: My definition has been evolving. The foundation of any company is made up of their vision, mission and values. The vision is the desired future state, the mission is the roadmap, and the values are the set of beliefs and principles that define the DNA and culture of the organization. A values-based organization has a clear sense of purpose and seeks to instill its values through a defined set of beliefs with a clear sense of purpose, creating value for all of its stakeholders. I’ve found that there aren’t many organizations that can live up to this definition. Most companies say that they have values but few actually live them.
Q: Why don’t they instill values that they already have on paper?
A: Emphasis on shareholder value maximization, effectively giving license for people to focus on making money. The focus on short-term results, for most, is too overbearing and becomes a detraction from stated values. A damaging mindset for making significant profit in the short term develops and is promulgated throughout the business culture. When focused exclusively on making money, you lose vision and this mindset forces you to think short term. Placing shareholder value over all else is toxic and I’ve already found in my research that this compromise eventually catches up to companies.
Another problem is that companies generally just hire for skill set and not for fit with the vision, mission and values. Employees that aren’t good cultural fits will pull you off track. If you have an organization full of employees that don’t subscribe to its values, the organization won’t survive. Companies really should look at culture and values first when determining the right candidate. The skills can be developed. It’s the cultural fit that will keep the employee at the company and excited to perform.
I did find that non-profits are generally better than the for-profit sector in this regard, hiring people that are more passionate for the values.
Q: What gave you the motivation to start The Secret Sauce Project?
A: I was working for Endeavor, helping to launch its Spain office, but I was starting to feel like my time there was coming to a close and I needed to find something else. I spent a weekend praying and contemplating while in Barcelona about what I should do next. At the end of the weekend, I developed a concept called a “start-up factory.” I knew that my next step was to create scalable values-centered companies from scratch that would have the capability to transform their industries from within, for the better. As I began to think about that, I asked myself the question of what a values-based company is. As I continue to research this question, I have yet to find a good resource that can not only answer it, but also provide guidance about how to achieve this objective. I found a gap in modern day business advisory. The Secret Sauce Project was born out of finding the opportunity to teach others how to run scalable values-based companies. I want to invent a framework for advising young companies on how to achieve long-term success through organizational health.
If you look at the business world today, the state of business is in a bad state. Organizations themselves are neutral entities, while it comes down to the managers to maintain the right organizational priorities. They can either maintain their values or compromise. They should ask themselves if their actions and standards are creating value for all stakeholders, not just shareholders in the short-term, or plundering long-term value? Corporate scandals over the last 15 years have proved that the state of business is fairly low. It is possible to do business in a way that is more positive, creating value for all stakeholders. I like to see companies that are pushing the envelope, setting positive standards in their industries, and transforming the way business is done.
Q: How’s it been going since you’ve been off on your own?
A: (Laughs.) Great question. I miss a regular paycheck. (More laughs.) I studied Mechanical Engineering at Yale, so I love clearly defined problems. This is not a clearly defined problem. It’s fluid. That’s why I call it a quest. I originally set up a timeline for accomplishing this and it actually doesn’t work that way. The greatest challenge for a structured thinker like me is to understand that it is ok to not have everything figured out and just let the process of learning take its course.
The pleasant surprise is that I began to realize that I can now ask the difficult questions that most people are too busy to get to. It takes time to seek answers. With a regular day job, it just sucks out so much time, you don’t have time to pursue some of the questions that pop into your head. By far, the best aspect of this whole project has been the freedom to pursue these difficult questions and have the time and resources to talk to other people to help me figure them out. I love the freedom that I now have.
Q: Do you miss working in a large organization?
A: I miss the daily interaction with people. I get a lot done working remotely but I miss touching base with people. I try to get into New York City, from my home office in the suburbs, once a week to have meetings and interact with great people. It keeps me on track. Apart from that, I love what I’m doing as I pursue my own interests, which far outweigh working for a large organization.
Q: Where are you now in The Secret Sauce Project’s development?
A: For the first five months I was focused mainly on my research. For the past couple of months I’ve been focused on building the consulting side of the business while I regularly write on my blog. I want to take the nuggets of knowledge that I have gained to share with other people, relaying these lessons that can be used to help run a values-based company. Going forward, I’m going to continue building up the consulting side of the business, working side-by-side with entrepreneurs in an advisory capacity. I think the ultimate end product will be a framework for how to support companies in their endeavor to become true values-based organizations. I really would like to see this research organized into a question based best-practice format for other companies to refer to.
Q: What is your ultimate goal with The Secret Sauce Project?
A: The ultimate goal is to create the Start-Up Factory. We will launch multiple values-based companies from scratch. There are already similar models focused on launching start-ups like betaworks in NYC, Y Combinator is another. In the tech space, there are more and more organizations that are beginning to launch companies from scratch. I want to do something similar but not just in tech. I want to develop companies across industries that will be values-based into the long term. The Secret Sauce Project will be how you run this values-based company.
I’m focusing on start-ups because change is incredibly difficult and most senior leadership either don’t have the understanding of its importance or the time and wherewithal for it. I need to focus on where I can be most effective now and that’s with start-ups. The onset of a company is really when it establishes the vision, mission and values and it’s much more effective to tackle this at the beginning.
I would love to see a network of values-based companies that are transforming those industries for the better. I would love to see large companies that are taking a stand and changing their industries. I want to see customers flocking to these companies. The theory is that if you provide value to all stakeholders, you will outperform your competition and I want to see evidence of this happening.
Q: What have been some of the lessons you’ve learned along the way in your development of The Secret Sauce Project?
A: I’ve realized how few companies really have a sense of purpose and how few companies really know why they’re doing what they’re doing. I realized through my own professional experience that most people don’t have the luxury of asking difficult questions that can change their organization for the better. I’m trying to help people wake up from their routine. Unfortunately, most people assume that if they’re doing business in ways that are currently the standard in the industry, then everything is fine. When you begin to ask if we should be doing things differently, it leads you to other questions and more than likely down the path to a more successful organization. I learned how many people don’t do this and I love to see when people ask those difficult questions.
Also, I’ve learned how much of the foundation of our capitalist society is not healthy. There needs to be greater focus on people. We have too much of a tendency to treat people inhumanely, looking at them as commodities that do their part in the operation of increasing profits. The thinking needs to be reversed: treat your people as individuals with an incredible amount of talent to offer, leverage their gifts, cultivate those that fit with your values and culture, and your profits will come.
It’s amazing that in this interconnected world there are a lot of people who feel isolated, not making the most out of their gifts. The basic community building blocks of recognizing those around you and encouraging your peers to do better and to be bold are breaking down. I think this is a real problem. It’s a dynamic I have fallen prey to and something I’m trying to wake myself up from. There are too many things that we take for granted. We constantly need to question what we’re doing.
Brendan Fitzgibbon is currently Managing Partner of Erudio Strategies, a firm specializing in market strategy implementation. Prior to Erudio, Brendan has worked in global corporate strategy for Audi AG and Visa Inc., assisting the organizations’ growth in various markets. Brendan has also worked in international development, executing nation building exercises leading to stable institutional reform. Brendan has an MBA from the Thunderbird School of Global Management and a BA in Political Science from Duke University. He currently resides in Stuttgart, Germany with his wife, Jaime, and two daughters.
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