The Power of a “Winning” Work Culture (on BiggerPockets) Pt. 1 July ‘23 Ep 628



In this episode of the Bigger Pockets podcast, hosts Alex and Leila Hormozi share insights on business growth and the importance of focusing on one's strengths. Alex emphasizes the leverage of doing what one enjoys and clearing other tasks to maximize this leverage. The conversation also delves into the challenges of hiring and the significance of leadership and culture in scaling businesses. Leila, CEO of, explains their approach to creating a positive work environment that fosters growth for employees, partners, and the business as a whole. They also discuss the strategy behind their family office,, which involves buying and scaling businesses, and the operational structure that supports this. The Hormozis highlight the crucial role of hiring the right people and the shared responsibility between internal and external company missions.

Summary Notes

Personal Enjoyment and Business Focus

  • Alex Hormozi emphasizes the importance of focusing on activities that the business owner enjoys and excels at.
  • Clearing other tasks off the calendar to maximize time spent on high-leverage activities is crucial.
  • The conversation opens with a discussion on how to optimize business operations around personal strengths and preferences.

"Unless the goal is to exit the company. If you enjoy doing the thing, then it's like, okay, well, then how can we get the most of you doing the thing? Because that is the highest leverage time for you. And then it's like, how do we clear everything else off of your calendar so that you can do the most of that?"

This quote highlights the strategy of focusing on the most enjoyable and impactful aspects of running a business, which can lead to greater success and satisfaction.

Business Evolution and Growth

  • Alex Hormozi's businesses evolved to meet the needs that arose from his personal experiences and expertise.
  • He discusses the organic growth of his businesses, from fitness to helping other businesses in the fitness industry, and then expanding to aid various small businesses.

"Interestingly, most of our businesses have come out of personal need. [...] And so it just continued to work out that way."

Alex Hormozi explains how his businesses developed naturally from his personal journey and interests, leading to a chain of business opportunities.

The Birth of

  • Alex and Leila Hormozi started after selling their previous businesses.
  • They discuss the transition from owning and operating businesses like Gym Launch, Prestige Labs, and a software company to creating a family office focused on buying and scaling businesses.

"And so we had, I think at the time, about 4000 people had gone through our licensing program and we had the same amount of people who were selling our supplements to that same distribution base."

This quote provides context on the scale of their previous businesses and the experience they had in growing a customer and distributor base.

Pivoting During COVID-19

  • COVID-19 presented challenges for their businesses, especially those serving brick-and-mortar clients like gyms.
  • The pandemic led to a shift in focus and the exploration of new business opportunities.

"Covid happened. And so that obviously impacted and the software was actually how to get, it was a martech solution. So how to get leads in the door for brick and mortar businesses of any kind."

The pandemic forced the Hormozis to adapt and look for new ways to grow their businesses, leading to the creation of

First Investment Success

  • Alex Hormozi shares the story of their first investment in Enchanted Fairies, which grew from one location to a successful chain.
  • The success of this first deal encouraged them to continue with similar investments.

"And so then it was like, oh, that went well. Maybe we should do this again. And so we did another deal."

This quote reflects on the positive outcome of their first investment and how it motivated them to pursue more deals.

Decision to Sell Gym Launch

  • The decision to sell Gym Launch was based on a commitment to move on when they no longer loved the business.
  • Despite challenging timing due to COVID-19, macroeconomic conditions were favorable for a sale.

"But Leila and I committed a few years earlier that we would sell the business if we felt like we no longer loved the business anymore."

This quote explains the personal philosophy behind the decision to sell their business, emphasizing the importance of passion in their work.

Building's Workplace Culture

  • Leila Hormozi aims to create a positive and sustainable workplace environment at
  • The goal is to build both companies and people, contrasting with the punishing and fear-driven culture of traditional private equity.

"I want to build a place where we don't just build companies, we also build people, because, really, behind the philosophy of, there's strategy."

Leila Hormozi outlines her vision for a workplace that values personal growth and development, which is central to the company's philosophy.

Key Theme: Building a Successful Business Environment

  • Alex Hormozi emphasizes the importance of creating an environment where the business, employees, and partners all benefit.
  • The concept of a multi-tiered win strategy is mentioned, similar to John Mackey's philosophy at Whole Foods.
  • aims to ensure that every stakeholder benefits from their business decisions.

"And you don't have to be mean to people and pay people exorbitant amounts of money because it's such a terrible job. You can engineer an environment where people like, the business wins, the people win, and our partners win."

This quote highlights the belief that a successful business does not need to rely on negative tactics or excessive compensation to compensate for poor job quality. Instead, an engineered environment can lead to mutual benefits for all parties involved.

Key Theme: Company Culture and Employee Satisfaction

  • Leila Hormozi discusses the importance of creating a workplace where employees enjoy their jobs.
  • The business model of serves as an example of a win-win situation for their portfolio companies and their own employees.
  • A positive company culture is vital for both employee satisfaction and business success.

"So I think what we want to create is a place where people actually like working. And I think we're doing it."

Leila Hormozi's quote emphasizes the goal of creating a workplace that employees enjoy, which is a core aspect of the company's values and operational strategy.

Key Theme: Organizational Structure of

  • has an executive team that handles internal operations and "pods" that service portfolio businesses.
  • Each pod consists of a portfolio operator and subject matter experts in various domains.
  • The company's structure allows for specialization and effective service to different types of businesses.

"And then we have what we call like pods. And so there's one portfolio operator with a team of what we call subject matter experts say, managing director of people, managing director of customer success, managing director of sales, managing director of marketing."

Leila Hormozi describes the organizational structure of, highlighting the use of pods that include experts in different fields to service portfolio businesses effectively.

Key Theme: Value Creation and Resource Allocation

  • Alex Hormozi discusses the process of identifying and strengthening weak departments in a portfolio company.
  • Subject matter experts deploy playbooks to create enterprise value at the portfolio level.
  • By consolidating high-skilled labor costs at the holding company level, portfolio companies can achieve better profitability.

"So that way we can create the most enterprise value at the Portco, at the portfolio company level, not at the holdco level."

Alex Hormozi explains the strategy of improving departments within portfolio companies to create value, with the holding company absorbing the costs of high-skilled labor to maintain profitability at the portfolio level.

Key Theme: Addressing Work Culture in Acquired Companies

  • Leila Hormozi distinguishes between small companies with no practices and larger companies with bad practices.
  • prefers to work with smaller companies where they can establish good practices from the ground up.
  • Changing the culture in a company with established bad practices is more challenging and time-consuming.

"I think what's harder is when businesses get bigger and they have systems in place that promote a bad culture."

Leila Hormozi highlights the difficulty in changing an established negative culture within larger companies, as opposed to instilling a positive culture in smaller companies with no previous systems.

Key Theme: Leadership and Cultural Influence

  • David Green discusses the challenges of finding leaders who can maintain the desired company culture.
  • The importance of having leaders and subject matter experts who uphold the company's standards is emphasized.
  • Hiring individuals with the right values or the openness to adopt the company's values is crucial for cultural alignment.

"They hold the standard of what good looks like in each function."

Leila Hormozi explains that subject matter experts set the standard for excellence within their functions, contributing to the overall culture of the company.

Key Theme: Developing Leadership and Succession Planning

  • David Green reflects on the difficulties of finding a suitable successor to maintain company standards and culture.
  • The process of grooming a successor involves close mentorship and time investment.
  • Choosing the wrong person for succession can lead to issues such as ego problems or a decrease in work ethic.

"That is what I've tried. I just picked the wrong person."

David Green shares his experience with succession planning, highlighting the challenges he faced due to choosing the wrong individual to take over leadership roles.

Transition from Police Officer to Podcast Personality

  • Alex Hormozi discusses the difficulty of transitioning from a police officer to a podcast personality.
  • He mentions the challenge of enforcing standards and laws in his previous role, compared to the more free-flowing podcast environment.
  • Alex expresses that he struggles to balance the two roles, especially when it comes to setting expectations for people who come from the podcast audience.

"I have not done well bouncing between those two roles. A lot of the people that will find come to me from the podcast, and now I'm like crushing their soul when I'm like, you have to step it up."

This quote highlights Alex's struggle to reconcile his authoritative background with the expectations of his podcast audience. He feels conflicted when he has to enforce standards that may seem harsh to his listeners.

The Dual Roles of Alex and Leila Hormozi

  • Alex and Leila Hormozi have distinct roles in their business, with Leila focusing internally and Alex externally.
  • Leila's role involves internal wins for, their internal team, and portfolio companies.
  • Alex's role is to make real business knowledge accessible to everyone, contributing positively to the marketplace.
  • Their days are structured differently, with Leila involved in strategic decisions and Alex in content and outreach.

"Leila is absolutely internal facing. I am external facing."

This quote clarifies the division of labor between Alex and Leila, with Leila managing internal affairs and Alex handling external relations and content creation.

Scaling Business and Operational Frameworks

  • Episode 649 discussed scaling a business from various revenue milestones.
  • Speaker D mentions starting a company called STR Coseg and the challenge of deciding who to hire next to manage operations and marketing.
  • Leila suggests looking at the business constraints to determine where hiring will have the highest ROI.
  • Alex questions the necessity of stepping away from marketing if it is a strength and suggests focusing on leveraging personal strengths.

"What is the biggest constraint right now? Not saying it feels bad to me... what's the biggest constraint on the business?"

Leila advises focusing on the most significant constraints in the business rather than personal discomfort to determine where new hires could be most beneficial.

The Challenge of Hiring and Role Clarity

  • Hiring is identified as a skill in itself, and not everyone is adept at it.
  • Leila warns against vague roles like "project manager" and suggests that such hires often mask underlying issues in the business structure.
  • Alex and Leila discuss their respective strengths in client and talent acquisition.
  • They emphasize the importance of matching external marketing strategies with internal hiring strategies.

"Hiring is a skill in itself... I think that if somebody's not good at hiring, sometimes it is best that you defer to a recruiting firm and watch what they do learn from them."

Leila points out that hiring is a complex skill and suggests that those not skilled in hiring should consider learning from professionals, such as recruiting firms, to improve their hiring processes.

Importance of Talent Acquisition

  • Talent acquisition is often overlooked in small businesses, yet it is crucial for growth.
  • Treating talent acquisition as a skill can significantly impact a business's success.
  • The culture and approach to hiring have a profound effect on a company's future.
  • The concept of talent acquisition has gained more attention over recent years.

"And so that's why talent acquisition doesn't exist in most businesses. And most people say, well, my business is too small for that. And I'm like, well, how do you think your business gets big by having that?"

This quote emphasizes the misconception that talent acquisition is unnecessary for small businesses, highlighting that growth is facilitated by effective hiring practices.

"But I think it's starting to become more relevant. Even when I started making content, I think two and a half years ago, I felt like I was like speaking something that nobody talked about."

The speaker indicates that the importance of talent acquisition is becoming more recognized, contrasting with the past when it was a less-discussed topic.

Execution Over Strategy

  • Two-thirds of company strategies fail not due to poor planning but because of poor execution.
  • Companies that excel in execution focus on what is termed "soft stuff," like talent acquisition and culture.
  • Success in strategy execution is significantly influenced by the quality of people within the organization.

"Two thirds of strategies fail, not because the strategy is wrong, but due to execution."

This quote points out that the failure of company strategies is often due to the inability to execute rather than flawed strategies themselves.

"What makes up the delta is what people, and I guess McKinsey defines this as the soft stuff, which is talent acquisition, culture and people."

This quote identifies the key factors that distinguish companies successful in executing strategies from those that are not, emphasizing the role of talent acquisition and company culture.

Hiring as Risk Allocation

  • Hiring is a form of risk allocation, akin to analyzing investments or economic conditions.
  • Many businesses struggle with growth due to challenges in hiring effectively.
  • The analysis and effort applied to other forms of risk should similarly be applied to the hiring process.

"It's all some form of risk allocation. Like, how do we know where this is going to work?"

This quote draws a parallel between hiring and other forms of risk assessment, suggesting that hiring should be approached with the same analytical rigor.

Learning from Experience

  • Entrepreneurs often lack experience in hiring, which can lead to poor hiring decisions.
  • The process of hiring requires practice and experience, similar to sales or other business skills.
  • Understanding what good looks like in various roles is crucial for successful hiring.

"A lot of entrepreneurs have had like 30 interviews that they've actually tried to make a judgment and be like, man, I suck at this. It's like, well, it's reasonable that you suck at it. You've only done it 30 times."

This quote acknowledges the learning curve associated with hiring and suggests that entrepreneurs should not be discouraged by initial difficulties.

The Role of Leadership

  • Leadership is a key component of successful business operation and talent management.
  • Good operators and leaders inspire admiration and set standards for the team.
  • Identifying leadership qualities is critical when hiring for key positions.

"When we're looking at operators, we're like, is this a leader? Does this person inspire me? Do I admire them? Will other people in the team admire them?"

This quote underscores the importance of leadership qualities in potential hires, especially those who will take on significant operational roles.

Talent Acquisition Metrics

  • Talent acquisition can be measured with metrics similar to marketing statistics.
  • Metrics such as time to fill, employee turnover, and two-sided fit are important for understanding hiring effectiveness.
  • The hiring process mirrors the customer lifecycle, with corresponding stages for talent acquisition.

"So it's like, if I said, hey, what's your time to fill? A lot of people would be like, what's your average time to fill? And they're like, I have no idea."

This quote highlights the lack of awareness among some entrepreneurs regarding key hiring metrics, implying a need for more attention to these details.

"The entire customer lifecycle is actually mirror images. We use different words for it. Yes, but if we don't have patterns, the same. Because it's people."

The speaker draws an analogy between the customer lifecycle and the employee lifecycle, suggesting a structured approach to hiring and retention.

The Challenge of Replacing Oneself

  • Many salespeople and entrepreneurs struggle to find someone who can replace them effectively.
  • The ability to develop the necessary skill set to replace an entrepreneur is rare.
  • Mentorship and pattern recognition can help in identifying the right candidates.

"But then of the salespeople, how many of them actually make it to the tier, like you're saying, of being able to fill, who could actually replace me?"

This quote addresses the difficulty of finding individuals capable of stepping into an entrepreneur's role, emphasizing the rarity of such talent.

The 'Find Your Layla' Concept

  • The concept of 'Find Your Layla' encourages entrepreneurs to look for a partner who complements their skills and can drive business growth.
  • Leadership and the ability to treat people well are seen as more important than detailed operational skills.

"That whole podcast called find your layla to entrepreneurs. Find your layla. That's it."

The speaker concludes by suggesting that finding a business partner with complementary skills and leadership ability is crucial for entrepreneurial success, encapsulated in the phrase "Find your Layla."

What others are sharing

Go To Library

Want to Deciphr in private?
- It's completely free

Deciphr Now
Footer background
Crossed lines icon
Crossed lines icon
Crossed lines icon
Crossed lines icon
Crossed lines icon
Crossed lines icon
Crossed lines icon

© 2024 Deciphr

Terms and ConditionsPrivacy Policy