Much discussion was raised about the importance of leading with values and how you can monitor the manifestation of those values by conducting regular ‘pulse checks’. Afterall, your company’s values have a huge ‘ripple effect’ – something any business, no matter what size, can learn from…

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CB: Thank you for joining us today Rachael and meeting Hiroki. We are really excited to have you. It would be fantastic if you could just share for us your role within Xero and how long you’ve been with the company.

RP: I’ve been with Xero for over 3 and a half years and when I started I was employed as the Chief People Officer. Since then my role has expanded and I look after all the human elements of Xero from the inside out. I look after the people on the inside – the 3,000 employees and manage the people experience function and I look after the customers – being our partners and their clients on the outside along with the customer experience team. I also have marketing and communications under my remit.

HT: I’m Hiroki, the founder and CEO of GoCardless. At GoCardless we make it really easy to collect recurring payments and Xero is one of our biggest partners. We founded GC back in 2011, it was one of those typical tech startup stories where it started in my bedroom. From there we’ve grown from the UK to an increasingly global company.

CB: It’s clear through the GoCardless and Xero partnership that our company values are closely aligned and that they resonate throughout all the employees and community Xero have built. I would love for you both to share about how the values came about, what the values are at the core of your business and how you manage those and cultivate them within your organisations, especially when you’re growing at such pace.

RP: So that is the conundrum that we face everyday, growing globally. We operate in 5 continents and 12 offices now. I think it starts with making sure you’re bringing on people that have the values that you aspire to and have everyone live by them.

Equally as important is making sure that there is real clarity on the purpose that your organisation is striving to achieve. - Rachael Powell

RP: At Xero, our purpose is to improve the lives of people in small businesses, their advisors and their communities around the globe. And we test for that on the way-in. We make sure that test is two-way, so it’s not just about us choosing the employees – it’s about making sure we give them the opportunity to test us as well. Because when you’ve got people aligned to that purpose and able to live those values then they’re going to be passionate about what they do and play to their strengths.

CB: Let’s look at the values that surround that purpose. Do you actually name those values?

RP: Yes, my two favourite values are ‘human’ and ‘beautiful’. We’ve also got ‘champion’, ‘challenge’ and ‘ownership’. We’ve got those five values and ‘human’ and ‘beautiful’ are really the ones that people talk about a lot. We make sure the product is beautiful, we make sure the relationships and the high quality connections that we’re building with our partners are beautiful and then we make sure that we keep it real. You will have seen so many of our presenters up on stage over the last couple of days who are really authentic – they get up there and really just speak from the heart.

HT: Yes, the human element really resonates with us.

RP: What are your values Hiroki at GoCardless?

HT: So we have four values. ‘Start with Why’ – which is about being really clear about the purpose and mission and why you’re doing something. The second is to ‘Take Pride’ – seeing what you do is not just a job but as a craft you want to hone and perfect over time. The third one is to ‘Be Humble’ – similar to the ‘human’ value at Xero which is about taking the ego out of the situation and really focussing on how we create the best possible outcome for our customers and partners and everyone around us. This is opposed to “who’s idea was it?”, “who gets the credit?” or even “who gets the blame when things don’t go right?”. The final one is about ‘Acting with Integrity’ and the way I describe this one is “what do you do when no one else is looking?”. Doing something the right way because it’s important to you, not because you are worried about being caught and what would happen if you did get caught.

CB: Did you form those values when the company was formed and did you get employees involved?

HT: We went through a few iterations. We did it relatively early but still wish we’d done it a little earlier on. The first few times we did it, it didn’t really work. My own personal leadership style was very collaborative and back when we had about 40 employees we tried to get everyone in the room and asked “what are the values going to be?”. The problem with that was that because everyone has slightly different views, we ended up watering the values down to the lowest common denominator. Everyone agreed with them, but no one was super passionate about them. I think crucially it was important to champion the values myself and because I didn’t truly believe in them, I wasn’t proud about them and wasn’t shouting about them. So they didn’t really stick. It wasn’t until the third attempt where I’d been working with a coach who had been pushing me to own that ‘founder narrative’ and to be more comfortable in that position of leadership. He said “they don’t have to be your values but you do need to care about them”. So I started with a description of the things I cared about and then got a small group of people from the team. I asked them to work with me to set the values. They originated as my own personal values but they evolved and took a life of their own and have grown to form the company’s values. It’s only when we did that, it really made a big difference. Not everyone necessarily agreed with them entirely, and maybe we lost a few people along the way to be honest, but it was something that was a lot more authentic.

RP: I think that’s the point, it’s OK to lose a few people along the way. It’s the opt-in/opt-out – this is what we’re going to stand for. I’m fascinated by that story, and clearly from meeting you and spending some time with you, you have got this humility. These values are authentic and now that they’re embedded it’s not just your responsibility – it’s the company’s responsibility to live those four values.

CB: We have a very similar approach as well into making sure people that are joining GoCardless have those innate values and really align with them and understand them. Part of the onboarding process and part of the interview process is going through our values and making sure that they understand them. It was one of my favourite parts of the interview process when I joined GoCardless. Everybody who I met within the organisation, regardless of the role they were in, they just had them innately – they wore the values.

I’m interested to hear a little bit more about your journey Rachael, because I know you’ve taken on more as time has gone on. One of the things that impresses me most about Xero is the effect your culture has on the wider community.

RP: I love talking about this as I really think we have a unique opportunity to amplify and accelerate our purpose which is to improve the lives of so many in small business. I’ll tell you about my story and my journey at Xero because it will help you understand the philosophy of what I’m going to talk about. I was employed by Rod Drury (former CEO of Xero) and he said to me “we’re looking for someone who can run ‘People Experience’ globally”. I remember laughing at him when he asked if I was interested in this role. I remember saying to him “I’ve never ran HR for a global organisation”. My background was in technology, Rod said “I need a marketer that can help me mobilise the strategy”. Rod’s a visionary, he’s constantly thinking five years ahead. You can imagine as the business continues to scale so quickly he’s thinking I can’t do all of this on my own, I can’t communicate this with the people at every office I go to, especially to unfamiliar faces. He said “what I need is an executive that can sit at the table that can work with my executive team ensuring that we can codify the strategy and then mobilise the strategy through a fast growing workplace”. He also said “we’ve got enough people within the organisation that come with a HR background that will be part of your team”. I said “I can do that!”. Rod continued to say that he needed someone who knows what good talent looks. I was very passionate about positive psychology. I had seen when working in recruitment executive search what good talent looked like in terms of the organisations that were able to attract the talent that was helping their business success and it was not typical. It was organisations that were prepared to look for attitude and experience and were prepared to put values and purpose at the core. It was organisations that were really leaning in to build ambidextrous skills across their organisations to de-risk as they grew, to de-risk when people moved around. I said “I can absolutely do that Rod!”. There were fantastic PX (People eXperience) people I inherited within my team – they’re like rockstars, I love them all.

Then after about 12 months I said to Rod, “you know what, we have this amazing opportunity to amplify this to our customers and accountant/bookkeeper partners – they’re like the relatives of Xero”. He said “great, you can take on Customer eXperience too!”. So, I took on the CX team too! These were 450 specialists, accountants and bookkeepers mainly, who support our partners and customers. I also took on marketing, branding and communication.

We talk about the ‘human ripple effect’ and this brings it all together. - Rachael Powell, Xero's Head of People

If you think of it like a pebble dropping in a pond… if you start with purpose at the core and surround that purpose with humans that are really passionate about small business and believe in the purpose that they’re trying to achieve. The next layer is the brand and the platform which you’re going to use to resonate your messages out, then you touch the partners and the partners become part of the whole movement. The partners then touch the small businesses and the whole community wins. That’s the ‘human ripple effect’. We’ve done some statistics and looked at how powerful this is. Because if you think about it, we have 3,000 employees that can get to hundreds of thousands of individuals who work in accounting and bookkeeping practices but they can get to millions of small businesses. That’s the ‘human ripple effect’. It’s about keeping it clear and simple, having clarity on your purpose and making sure how we go about that is being kept aligned to our values and bringing the right people along on that journey.

HT: I think it’s really unique how you’ve brought the accountants and partners into the fold. Coming to events like Xerocon, it shines through in the movement that’s been created. It’s the cultural similarity of all the partners and accountants that are champions of Xero and the Xero employees themselves – sometimes it’s hard to tell the difference. How did you guys go about that initial cultural movement with the accountants and bookkeepers?

RP: Several ways. It’s really important when you look at building a positive workplace, the things that you need to put in place. I talk about the science of positive psychology. The ‘father’ of psychology, Martin Seligman, has done a lot of research around five elements. His acronym is PERMA (Positive emotion, Engagement, Relationships, Meaning, Accomplishments) and I thought that no one in the accountant and bookkeeper channel is going to remember that, so I turned it into EBITDA. I talk to our Partners about how to build a positive workplace and focussing this energy that’s beyond the technology. The irony of this is when I’m talking to accountants and bookkeepers is that the two most important things in growing your practice and ensuring your success are not actually on your balance sheet. It’s ‘People’ and ‘Brand’. The third is ‘Technology’ which is the bit we bring to the table with Xero. If you have the right technology, the right purpose and the right people – to ensure you give yourself the greatest chance of success. The science actually shows this.

So what does EBITDA stand for? ‘E’ is for ‘Engagement’ – engagement is all about hiring the right people, getting them to play to their strengths and doing what energises them. ‘B’ is for ‘Belonging’ – diversity, inclusion and community. ‘I’ is for ‘Innovation’ – finding ways to differentiate and finding the time to play and explore. ‘T’ is for ‘Trust’ – building high quality connections and building relationships with people that are meaningful. ‘D’ is for ‘Dream’ – not just thinking about what’s next and in front of you but thinking about what’s on the horizon. What’s possible and what’s maybe possible with the challenges and opportunities in front of you. And finally a really important component to all of this is ‘A’ for ‘Accomplishment’ – make sure you’re smelling the roses along the way. Have ‘rituals’ within the business just as you would in a family such as birthdays and Christmas for example.

CB: This has obviously resonated well within the community. Would you say that there are one or two of those that the accountants and bookkeepers really like to run with? And how do you measure the success of that ripple effect?

RP: Well first of all, it’s a bit like the accounting equation, you can’t just say you’re going to pick that or pick this. It’s the combination of all. You just need to put your mind to it and care enough to do that. We measure it through various means and not all organisations have the luxury of the scale that we have to put in systems and processes to do those sorts of measures. We have a tool that measures engagement within our employee workforce. We knew that one thing we didn’t want to do, which a lot of organisations do, is to do an engagement poll once every 12 or even 6 months. It needs to be a pulse check and not an annual health check.

HT: Given that you have done a great job of turning the Xero Partners into an extension of the Xero family, do you use the same kind of principals for measuring that kind of engagement with your partners and prioritising the programs? How does that work?

RP: That’s a fascinating question and that’s my next challenge! I’m starting to work on that. We’re constantly measuring Partners on NetPromoter Score. We sit very high in that space – in terms of best-in-class we’re up there on whether Partners would recommend Xero as a platform. What we’re now doing is helping the partners understand the relationship those small business clients have with them. The philosophical shift we’re made in Customer eXperience is a challenge to the team to say “we’re no longer a customer support function, we’re going to be a customer success function. To be a customer success function you can’t just simply react, you’ve got to be thinking about what it is these Partners are going to need next to be successful and to be able to engage with more small businesses so that we can reach our purpose. We can do that by helping them to identify, and we’ve started a pilot and it’s fascinating to see the results, whether the small business clients would recommend their Partner. What it’s showing us is that if we can show them those statistics, as they’re numbers people, they say “How do I compare to our peers?”. We have a responsibility then, which is all part of our culture of abundance – we will share whatever it is we’ve done internally to drive our success with whoever wants to use it. So it’s like this ‘EBITDA’ that I was talking about, we’re saying “take it!” because we want you to be successful. We will help them to improve their NetPromoter Score so their small business clients are recommending them.

CB: So finally, I’d like to hear a personal story from you where you’ve you’ve met someone in the wider community and you’ve heard the values reflected back or where they’ve shared something about how the product has changed their life?

HT: That’s been one of the most exciting for me coming to Australia for the first time for Xerocon. We’ve been in the Australian market now for about 12 months, so we’re still really early in life. What’s been really satisfying is seeing, partners and customers coming up to me and telling me the same stories we’ve heard in the UK for many years. It’s almost the same – the value we’re bringing them and helping them is really satisfying.

One of the things that is really great, is that our mission is taking the pain out of getting paid so our customers can focus on what they do best. - Hiroki Takeuchi, GoCardless CEO

HT: They say things like “we love GoCardless because now I don’t have to chase all of my customers, I can focus on being an advisor or on serving more customers”. It’s that purpose being played back to us. I think for me, that is the best example of it.

RP: There’s so many stories of people coming up to us, even in my social life – you go to a dinner party and they ask “who do you work for?”, I say “Xero” and they then say “I love Xero!”. They tell me then that one of their friends sells ice cream for dogs and say that Xero has changed their life. Or another friend runs a dance school or interior design company etc and it’s almost like when you say the word “Xero” that they’re like “We love Xero!”.

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