THE CFO OF A SUPER UNICORN REVEALS SECRET$...

Investing in senior leadership CQ, increases the ROI

Only a tiny fraction of startups become unicorns let alone super unicorns. Unicorns are privately held startup companies valued at over $1B; decacorns over $10 billion; hectocorns make it over $100 billion. According to wikipedia, the term "unicorn" was coined in 2013 by venture capitalist Aileen Lee, choosing the mythical animal to represent the statistical rarity of such successful ventures.

In high-growth, human capital-driven businesses (e.g., knowledge-driven, service-oriented) like the super unicorn we interviewed below... the cultural intelligence (CQ) of the senior leadership team is often vastly superior compared to the average company. CQ is the determining factor in whether or not the value/magic of most unicorns is sustained or lost as it scales. Similarly, low CQ is the primary reason given, in 100% of the M&A deals where value is lost, according to both corporate and PE leaders.

CQ IS 100% DETERMINISTIC, 100% OF THE TIME

100% means that cultural intelligence and organizational culture competency is deterministic. Leadership teams win more often, when they treat culture like the technical competency that it is. Leadership teams lose (100% of the time) when they think they already have culture covered or when they delegate it. Best case scenario, the losing is relative to how much more you "could have" won (how much suffering you could have avoided for yourself & others) with a stronger CQ.

CQ determines whether or not the business environment is healthy (i.e., constructive) or unhealthy (i.e., aggressive, defensive); psychologically safe or not safe. CQ determines how much of our org potential (i.e., IQ, EQ, AQ) we have access to and the quality of org potential that we can mobilize to deliver value for stakeholders (e.g., Cx, Ex). The ROI is very measurable and the model is very simple to learn.

Organizations achieve exceptional, sustainable results once they strengthen their CQ.

(Financial Returns From Organizational Culture Improvement: Translating "Soft" Changes Into "Hard" Dollars - research abstracts from Human Synergistics).

WHEN THE CFO OF A SUPER UNICORN TALKS ABOUT ORGANIZATIONAL EFFECTIVENESS (CULTURE) & ROI... WE LISTEN & LEARN

We should all pay close attention when the CFO of a super unicorn reveals that their culture work is their foundational secret sauce and they are still working hard to strengthen their CQ/culture competency in order to preserve their magical unicorn results. If you think culture competency is a "soft skill" or a squishy topic for somebody in HR to deal with, you may change your mind after you listen to the super CQunicorn & juggernaut CFO interview below.

Mercado Libre (MELI) is the most valued Latin American unicorn (fintech) with market cap value of $51B USD as of July, 2020 - they are often referred to as the "amazon of LATAM”. Below is the video and timecode highlights to a very recent recording of one of Axialent's culture competency webinars. Enjoy the interview with CFO/EVP of Mercado Libre (Pedro Arnt, former BCG) and one of Axialent's co-founders, Richi Gil. I find Pedro to be incredibly articulate about the business value of their culture competency journey. 

• 3:25 "culture is the glue when scaling & connecting strategy & execution”
• 6:25 & 20:25 "we didn’t even know how to talk about culture” 
• 8:00 “we identified new ways of working: the pursuit of excellence vs perfectionism”
• 9:45 "one of the successes of MELI has always been the human capital - we have ambitious, bright, intelligent people - a shadow of that is we have lots of people who 'know' vs hungry for learning"
• 12:32 culture DNA principles to specific behaviors (guide book/evolving outcome to align with business needs)
• 16:00 “these principles have had immediate linkage to specific behaviors and actionable, measurable linkage to hard core human capital management systems” 
• 17:25 "we’re getting increasingly more laser focused on being able to identify where execution pain points exist (e.g., combining decentralized decision-making with alignment) and then build roadmaps for execution tied to culture principles/culture framework of expectations”
• 19:00 "How has all this work changed the way you work together at the leadership level?” At the end of the day an organization is about how the union of different people interact effectively and efficiently to push forward the company’s agenda - every day, everything happens within the context of human interaction, ideas and innovation - literally everything so being able to learn how to listen and interact in a way that’s conducive to innovation and good execution is absolutely everthing ”
• 21:25 “the leadership & culture work...unlocks completely new ways of working, collaborating and interacting with each other - gave us the tools to unwind the things that don’t work as well”
• 23:30 “I remember going to Zappos and asking ‘but how do you keep a single culture that’s so strong' - they said you don’t!”
• 26:00 “in knowledge-driven or human capital-driven organizations the interaction between people IS the business; this gets into the concept of conscious business...”
• 28:30 “what have you learned across the companies in which you operate?” - culture principles = expectations for level setting across geo = helps to iron out differences across cultures
• 31:53 “what would you say to leaders who say culture is a soft thing and should be managed by HR?”
• 33:46 “working on culture without clarity & alignment at senior leadership is futile”
• 38:00 examples around how talent calibration, development, 360’s and feedback all actively apply the culture principles & the tension/tradeoff between short term & long term results 
• 42:00 pragmatic congruence - "we are most proud that we don’t just put it on the wall and build into the HR systems, we are conscious about it all the time - what I am most proud of is that we set out on a journey to define, shape, and live by that culture and we’ve done a lot of that - the difference in gaps (ideal vs current) with original OCI/OEI to now has improved greatly; we’re in continuous beta; we’re rabidly competitive and we’ve gotten better at helping people channel that competitiveness externally and stay collaborative internally"
• "what makes us different is we are actually able to live and breathe and execute against that culture DNA quite effectively although we still have a lot to learn and improve”

Such great info to know. Thank you Axialent & MELI. What am I going to do now with all of my boxes of unicorn DNA supplements from Silicon Valley entrepreneurs? Who's gonna eat all these cans of unicorn meat?

---- Raphael Louis Vitón (Raff) is a global transformation lead, specializing in connecting the dots between cultural intelligence + innovation strategy + L&D with Axialent.com, integral leadership facilitator with Stagen.com, innovation graduate professor @CEDIM design school, former innovation strategy consulting firm owner; corporate strategist/expat and a bilingual, first generation Cuban-American living in the Chicagoland area. He co-wrote the book: "Free the Idea Monkey to Focus on What Matters Most - How the Most Successful People Make Big Ideas Happen"; visit raffviton.com