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Building the Billion Dollar Business podcast with Ray Sclafani

Episode #131

Why Every Team Needs Guiding Principles

Building the Billion Dollar Business with RAY SCLAFANI

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Executive Summary

Turning Culture Into a Visible Agreement

Every advisory team already has a way of working, and the opportunity is to write it down. In this episode, Ray Sclafani, Founder and CEO of ClientWise, shows how guiding principles turn an invisible culture into a visible agreement that tells new hires, veterans, and clients exactly how the team behaves. Drawing on Korn Ferry’s research, Google’s Project Aristotle, Amy Edmondson’s work on psychological safety, and Patrick Lencioni’s guidance on values, Ray explains why culture is a balance sheet item that contributes directly to enterprise value. He shares five patterns behind principles that work and six steps any team can use to write its own together. Firm leaders leave with a practical way to build a culture their team owns, lives, and carries into its next stage of growth.

RESOURCES MENTIONED

Key Takeaways

1

Culture is a source of business value. Korn Ferry found that more than two thirds of executives at the world’s most admired companies attribute over 30% of their market value to culture.

2

People stay for culture that fits their values. In Korn Ferry’s survey, 47% said working for a company whose culture aligns with their values would most improve how they feel about their job, ahead of advancement (20%) and pay (10%).

3

How a team works matters more than who is on it. Google’s Project Aristotle found explicit group norms were fundamental to team success, with psychological safety mattering most.

4

Any team can start without a corporate initiative. Psychological safety varies widely from team to team, even inside one company, so every team leader can define how their own team works.

5

Effective principles describe behavior rather than generic virtues. The strongest ones are observable, settle arguments before they begin, hold healthy tension, sound like the team, and put people first.

6

Principles only work when they show up in decisions. Wire them into hiring, onboarding, one-on-ones, client reviews, and recognition, and revisit them at least once a year.

Transcript

Every team has its own way of working. The only question is whether anyone wrote it down.

Picture a conference room screen titled How We Work. Beneath it, 10 to 12 short lines. The team takes care of each other. If it’s not in CRM, it didn’t happen. Same day response. Close the loop. Follow through. Go slow to go fast. People don’t give money to wimps.

None of these would win a poetry prize. All of them, however, tell a new hire, a veteran, and even a skeptical client exactly what this team values and how it behaves when no one is watching. That is the quiet power of guiding principles. They turn an invisible culture into a visible agreement. And the research says that agreement is worth far more than the time it takes to write it down.

Culture is a balance sheet item. Korn Ferry has surveyed more than 15,000 executives for its research on the World’s Most Admired Companies and found that more than two thirds of them attribute over 30% of their organization’s market value to culture. Korn Ferry’s conclusion is that culture is shifting from a nice to have into a genuine source of business value, and that every leader, not just HR, owns it.

People also stay for culture that matches their own individual values. In an earlier Korn Ferry executive survey, 47% of respondents said the single change that would most improve how they feel about their job is working for a company whose culture aligns with their values. That beat clear advancement, at 20%, and better pay, at 10%, by a wide margin. Korn Ferry’s guidance was simple. The key is consistency, living the culture in daily practice rather than on a poster.

Norms also beat talent. When Google studied what made its best teams succeed in Project Aristotle, it found that who was on the team mattered far less than how the team worked together. Having explicit group norms turned out to be fundamental. The norm that mattered most was psychological safety, a concept developed by Harvard Business School professor Amy Edmondson: a shared belief that the team is a safe place to take interpersonal risks.

Your team can actually build it locally. In a 2025 Harvard Business Review article, Edmondson and her co-author note that psychological safety varies widely from team to team, even inside one strong company culture. That means you don’t need a corporate initiative to begin. Any team at any level can define how it wants to work.

But hollow values backfire. Patrick Lencioni’s classic HBR piece, Make Your Values Mean Something, warns that values which are not lived are worse than none at all, because they breed cynicism. He separates true core values from aspirational ones, permission to play basics, and accidental habits, and argues that poorly implemented values can actually poison a culture.

So the How We Work list works because it avoids generic words like integrity and excellence and instead describes behavior. A few patterns stand out. Let me share five with you.

1. They’re observable. Same day response is the headline. We can check that off. You either replied today or you didn’t.

2. They settle arguments before they begin. If it’s not in CRM, it didn’t happen. That ends every debate about whether a client call needs to be logged.

3. They hold healthy tension. Go slow to go fast sits next to be proactive, anticipate needs. Together they ask for both care and urgency and trust people to judge which one a moment needs most.

4. They sound like the team. People don’t give money to wimps would never appear in a corporate handbook. That’s exactly why people remember it.

5. They put people first. The list I shared earlier opens with the team takes care of each other and always act in the client’s best interest. Order signals priority.

So how do you begin building your own? There are six simple steps.

Step 1. Write them together. Principles handed down from above get compliance. Principles a team drafts together get ownership. Give everyone a voice, including the newest team member.

Step 2. Start with real moments. Ask, when were we at our best? And when did we let a client or each other down? The behaviors behind those stories are your raw material.

Step 3. Keep each one short and specific. If a principle cannot fit in one line or be acted on today, rewrite it.

Step 4. Test for authenticity. Using Lencioni’s lens, ask whether each line describes who you truly are, who you hope to become, or just the minimum anyone would expect. Label the aspirational ones honestly.

Step 5. Wire them into daily work. Reference them in hiring, onboarding, one-on-one meetings, client reviews, and recognition. A principle that never shows up in a decision is just decoration.

Step 6. Revisit them on a schedule. The last principle on the list I shared today is change is constant, so embrace it. Review the list at least once a year and retire what no longer fits.

Here are a few questions to carry into your next team meeting. The most effective principles are built for the team you’re becoming, not just the team you are today. Use these open ended questions to start the conversation.

Three years from now, what would we want a new team member to say about how we treat each other?

What will our clients expect from us in the future that they don’t expect today, and which principle prepares us for it?

As AI and automation take on more of our routine work, which of our principles become more important? Which ones need rewriting?

Which of our current habits would we be embarrassed to see written down, and what should replace them?

How will we know in a year whether we actually live these principles rather than just post them on a wall?

What principle would help us make a hard decision faster the next time we face one?

If our team doubled in size, which principles would protect what makes us great today?

And lastly, what is the one belief we hold now that we may need to let go of to grow?

Guiding principles are not a branding exercise. They are a promise a team makes to itself and to the people it serves. The research is consistent. Culture drives value. Explicit norms drive team performance. And values only work when they are lived.

Write yours together. Keep them honest, and let them evolve. The team that knows how it works is the team that works best.

Please like this episode and share it with someone you know needs to hear it.

 

 

Questions Financial Advisory Firm Leaders and Team Members Often Ask

What are team guiding principles?

Guiding principles are a short list of specific, behavioral statements that describe how a team works together and serves clients. They turn an invisible culture into a visible agreement that tells new hires, veterans, and clients what the team values and how it behaves when no one is watching.

Why does culture matter to an advisory firm’s value?

Korn Ferry’s research found that more than two thirds of executives at the world’s most admired companies attribute over 30% of their organization’s market value to culture. Korn Ferry concludes that culture has become a genuine source of business value and that every leader owns it, not just HR.

How do you write guiding principles for a team?
Ray Sclafani recommends six steps: write them together, start with real moments, keep each one short and specific, test for authenticity, wire them into daily work, and revisit them on a schedule. Principles a team drafts together earn ownership, while principles handed down from above only earn compliance.
What makes a guiding principle effective?

Effective principles describe behavior instead of generic words like integrity or excellence. The strongest ones are observable, settle arguments before they begin, hold healthy tension, sound like the team, and put people first.

Can one team build psychological safety without a firm-wide initiative?
Yes. Research by Amy Edmondson shows psychological safety varies widely from team to team, even inside one strong company culture. Any team at any level can define how it wants to work and start building that safety locally.

Build a Culture Your Team Owns

The strongest advisory firms make their culture visible and live it in every decision. ClientWise coaches help firm leaders align their teams, clarify how they work together, and build a culture that strengthens enterprise value as the firm grows.

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