By Michael Balchan, CEO
In this post, I’ll cover the frameworks and how we personally applied them. Then, in the next post, I’ll share our specific Core Values & Core Principles so you can see the qualities and behaviors we live by.
“Core values are essential for enduring greatness.... The point is not what core values you have, but that you have core values at all, that you know what they are, that you build them explicitly into the organization, and that you preserve them over time.” - Jim Collins, Good to Great
“An organization’s core values should provide the ultimate guide for employee behavior at all levels…The importance of values in creating clarity and enabling a company to become healthy cannot be overstated.” - Patrick Lencioni, The Advantage
“Operational values are a key pillar for successful execution. You must be crystal clear on these values, because you want them to guide all discussions and all behaviors. They will dictate performance and whether or not you hit your outcomes.” – Matt McCall, Founder of Forge Capital, voted Top 100 VC in U.S
Core values aren’t slogans for a wall or a website. They are the non-negotiable behavioral standards that shape decisions, performance, and culture. They define who you are and how you’ll win.
The best companies don’t just state them or put them on a poster. They hire, fire, celebrate, and coach against them every single day.
In Heroic’s early years, our operating playbook drew heavily from our Philosopher’s Notes on leadership, peak performance, and productivity.
In 2024, as we prepared to launch our 1:1 Heroic Performance Coaching and Heroic Workshop Instructor Certification programs, we partnered with Jeff Everage, the Founder/CEO of Trident, Level 2 Wim Hof Instructor, multi-modality coach, former Navy SEAL, and longtime Heroic student, Coach, and Investor.
While working together, Jeff repeatedly referenced various “EOS tools” (the Entrepreneurial Operating System) that he thought could help us take our operating disciplines to the next level.
Around the same time, Scott McIntosh (Heroic Arizona co-founder and a major Heroic Investor), started sharing blog posts about Heroic’s power to transform organizations, schools, and communities. At the bottom of Scott’s posts, we noticed multiple references to EOS.
Here’s Scott with fellow Heroic Arizona co-founder Stephanie Clerge (both left-center) at the Heroic Arizona launch event:
Then, our new VP of Growth, Brian Maxfield, told us that EOS had been the operating backbone of every company he’d led.
Three nudges in the same direction. That’s Joseph Campbell’s “invisible hands” and Phil Stutz’s winks from “The Field.”
Here’s Campbell from The Power of Myth (see Notes):
“I even have a superstition that has grown on me as a result of invisible hands coming all the time—namely, that if you do follow your bliss… you begin to meet people who are in the field of your bliss, and they open the doors to you. I say, follow your bliss and don’t be afraid, and doors will open where you didn’t know they were going to be.”
And our Heroic yoda, Phil Stutz, (see Notes on Lessons for Living):
"The field is an invisible force that is very creative. It’s goal-directed in terms of getting more of what you what you need and less of what you want."
After that third nudge, we decided to integrate EOS into Heroic’s DNA, while bringing our own philosophy and discipline to the process.
To integrate EOS with speed and excellence, we worked with Al Moscardelli, one of EOS Worldwide’s top coaches, with an Expert-level designation (their highest) for 500+ sessions delivered. Our most recent March Quarterly was his 800th overall:
EOS follows a simple but rigorous sequence delivered through a series of full-day off-sites.
The first one, Focus Day®, installs EOS’s six foundational tools for creating Traction: the Accountability Chart, Rocks, Level 10 Meeting™ (and IDS®), Scorecard, Issues List, and To-Do List. Those tools can be used immediately to run an organization more effectively even without having a long-term vision fully baked. (Check out Traction, Get a Grip, and What the Heck is EOS for more.)
30+ days later, with a month of practice running the foundational tools, we went through Vision Building™ Day 1, where the first agenda item is: Core Values.
Fun aside: In another “field wink” moment, the morning that I started writing this article, another one of our big Heroic Investors texted me THIS photo, celebrating a recent merger he went through and that he was on Day 2 of EOS.
Look closely and see if you can tell what they happened to be working on when the picture was captured…
Yep: Core values.
To identify core values, EOS follows a process adapted from Jim Collins’ Mission to Mars Exercise and Patrick Lencioni’s framing in The Advantage, also described in this 2002 HBR article.
Here’s a paraphrased version of how Collins’ frames it up in Built to Last, with EOS’s and Lencioni’s additional distinctions:
Note: Lencioni recommends repeating Steps 2 and 3 again with anti-exemplars, the people who were NOT a good fit. Capture the traits that prevented them from being successful, and use the opposite of those traits as additional core value candidates.
“Next, leaders must identify employees who, though talented, were or are no longer a good fit for the organization. These are people who, in spite of their technical abilities, drive others around them crazy and would add value to the organization by being absent. Once those people are identified—sadly, this is usually a little easier than the first step—they need to be dissected in the same way. What is it about them that makes them a distraction and a problem? It is the opposite of those annoying traits that provide yet another set of potential candidates for core values.”
EOS also uses the questions:
If the answer is “no” to any of the questions, it’s not a core value.
Be wary of including what Lencioni calls “aspirational,” “permission to play,” or “accidental” values:
And, as Lencioni emphasises:
“Finally, leaders need to be honest about themselves and whether or not they embody the values in that pool.”
The end result will be three to five Core Values, each with a name and definition, forged from real examples of people applying them in practice.
Using this method, we defined a set of core values that reflected who we were at our best.
It gave us clarity, but we soon realized that even well-defined values can drift into “bumper sticker” territory if they’re not directly tied to daily behaviors.
By focusing on discovering and defining the values first, with behavioral details second, we’d lost some of their operational potential.
That’s where Framework #2 came in.
Regardless of how well you feel you’ve defined your core values, don’t be surprised if they go through additional iterations after coming into contact with the real world.
That was certainly the case for us.
In early 2025, six months after our EOS kickoff, I became CEO, Brian transitioned to Board Chairman, and we formalized the Heroic Board of Directors with Brian, Alexandra (co-founder of Heroic), Marty Bicknell (CEO of Mariner Wealth Advisors) and Matt McCall (Founder of Forge Capital, voted a Top 100 VC in the U.S.).
Matt McCall, beyond $70B+ in exits as a V.C. (Dollar Shave Club, Coinbase, Facebook, Honest Company, TicketsNow, etc.) is also an elite CEO coach (400+ sessions on leadership and performance) who began personally guiding my performance as CEO.
From our very first session, he drilled this in:
“Operational values are a key pillar for successful execution. You must be crystal clear on these values, because you want them to guide all discussions and all behaviors. They will dictate performance and whether or not you hit your outcomes.”
Amazon’s Leadership Principles, Netflix’s Culture Memo, and an early principle manifesto from Nike (below) do this very well.
(See Notes on Phil Knight’s Shoe Dog)
So we decided to rebuild our values from the ground up, starting with behaviors.
Here’s the process we followed:
For us, this took approximately 10+ iterations of consolidation, discussion, and feedback, mostly done “by hand” in virtual collaboration sessions using digital pen and paper.
By the end of step four, we’d narrowed it down to thirteen clear, actionable behaviors, which we called our Core Principles.
For us, some of these Core Values were similar to the outcome of Framework #1, while others emerged new.
This bottom-up approach ensured that our values weren’t abstract ideals. They were operational tools, directly linked to behaviors we could coach, measure, and reward.
Framework #1 gave us clarity and alignment.
Framework #2 made it operational and behavioral.
After the dust settled, we’d found our operational Core Values & Core Principles.
Our Core Values describe who we are. They are the minimal effective set of single-word values that capture the soul of Heroic in elegant simplicity.
Our Core Principles define what we do. They are the clear, practical behaviors of our Core Values in action, and they help us create success both individually and collectively.
We happened to land at five Core Values, and thirteen (plus one!) Core Principles.
Once defined, Core Values & Core Principles are only useful if they guide decisions and behavior. We’re operationalizing them by how we hire, fire, celebrate, correct, and empower.
For a great, quick-summary of the Who method for hiring, we recommend the uber-tactical book, The Great CEO Within by Matt Mochary.
Very few people earn a “+” in all categories, and that’s not the goal. Instead, the “bar” is set by the executive team to be a certain percentage of “+” and “+/-.”
Falling “below the bar,” triggers coaching. If there’s no change after repeated attempts, it’s time to transition the employee out.
Just like it pays to “Virtue Spot” other people putting their strengths in action, it pays to spot your organization putting its Core Values & Core Principles into action.
We’re constantly looking for opportunities to celebrate and appreciate how an individual or a team is demonstrating our Core Values & Core Principles; highlighting them in public and/or in private, live or asynchronously, with words, gestures, or surprises.
When things go well, we also look for the ways that following our Core Values & Core Principles contributed to the success.
If you’ve nailed the Core Values & Core Principles, identifying the behavioral misalignment and applying the necessary adjustment solves the performance gap nine or more times out of ten.
(5) Empowering: Done well, Core Values & Core Principles serve as guidelines for decision making.
As Matt Mochary writes, the Core Values & Core Principles are what to insert in the sentence-completion stem:
“The rest of you in the company can make all of the decisions from now on, as long as you …."
Because at the end of the day, an organization is just a group of people coming together for a common purpose, leveraging the power of the group to do far more than they could as individuals.
And the greatest organizations know that the best way to succeed is by practicing clearly defined, mutually agreed behaviors that distribute power and autonomy to the people closest to the problems needing to be solved and opportunities waiting to be seized.
Are you?
Heroic LOVE!
Michael
P.S. Although not explicitly covered above, the Heroic app is a powerful cultural enablement tool for taking core values and behaviors and making them a lived reality—every single day.
From this blog post, you can download all of the Philosopher Notes to dive deeper into world-class wisdom—and you can also download the Heroic App to put that wisdom into practice, giving you all the tools and insights you could ever need to reach your potential.