Build with Leila Hormozi

11 Years of Top 1% Leadership in 18 Min | Ep. 335

19 min
Feb 12, 20262 months ago
Listen to Episode
Summary

Leila Hormozi breaks down five essential leadership traits that drive team performance and trust: emotional regulation, sincere candor, unimpeachable character, clarity, and ownership. She shares practical frameworks from scaling Acquisition.com to 100+ teammates and $100M+ revenue, emphasizing that leadership effectiveness depends more on trustworthiness and communication skills than raw intelligence.

Insights
  • Emotional regulation is foundational to leadership—team performance directly mirrors the emotional state of leaders through social contagion, making stability during crises the differentiator between thriving and failing businesses
  • Sincere candor requires distinguishing between critiques (actionable feedback on behavior) and insults (character attacks), creating psychological safety where teams know exactly where they stand without hidden agendas
  • Trustworthiness predicts team performance more than competence; teams perform discretionary effort only when they can predict leader behavior and feel safe, otherwise they protect themselves rather than build
  • Clarity is simplifying complexity into 1-3 actionable priorities using third-grade language, not corporate jargon; leaders must help teams understand not just what to do but why they're doing it
  • Ownership means solving problems you didn't create, acquiring skills others avoid; high-performance teams decentralize responsibility so every member feels ownership regardless of fault origin
Trends
Leadership effectiveness increasingly measured by emotional intelligence and communication clarity rather than technical expertise or decisivenessTransparency and honesty becoming competitive advantages in talent retention as teams demand predictable, trustworthy leadershipSimplified communication (third-grade language) emerging as best practice in scaling organizations to reduce confusion and accelerate executionDecentralized ownership models outperforming hierarchical accountability structures in high-growth companiesPsychological safety and predictability becoming primary drivers of discretionary effort and team performance in competitive marketsLeader self-awareness and emotional regulation training becoming critical infrastructure in scaling operationsBlame-focused cultures being replaced by solution-focused problem-solving in high-performing organizations
Topics
Emotional Regulation in LeadershipSocial Contagion Effect on TeamsSincere Candor and Feedback FrameworksCritique vs. Insult DistinctionUnimpeachable Character and TrustTransparency Without Emotional DumpingClarity and Simplification of Complex InformationCorporate Jargon vs. Clear CommunicationOwnership and Decentralized ResponsibilityProblem-Solving vs. Blame CulturePsychological Safety in TeamsLeadership During CrisisTeam Performance PredictorsScaling Leadership SkillsDiscretionary Effort and Team Engagement
Companies
Acquisition.com
Leila's current company where she scaled to 100+ teammates, purchased second office, broke Guinness world record, and...
Gym Launch
Leila's first business that she led through COVID, where she learned emotional regulation and clarity as critical lea...
People
Leila Hormozi
Host and primary speaker sharing 11 years of leadership experience and five core leadership principles from scaling A...
Alex Hormozi
Leila's husband and business partner; referenced for their practice of sincere candor and unfiltered truth-sharing in...
Quotes
"A dysregulated leader just creates a dysregulated team. And when you have a dysregulated team, it's like performance just goes out the window."
Leila HormoziEarly in episode
"Never vent down. You can only vent up in a team. Meaning, you can't emotionally vomit on your team about all the problems and shit you got to deal with."
Leila Hormozi (quoting her mentor)Mid-episode
"Trustworthiness predicts team performance more than competence."
Leila HormoziCharacter section
"Clarity is taking something very complex and breaking it down into bite-sized pieces. And this is something that great leaders do."
Leila HormoziClarity section
"I understand that you didn't cause the problem, but you do have to fix it."
Leila Hormozi (quoting her therapist)Ownership section
Full Transcript
Most people think that you need to be the smartest person in the room to get people to follow you, admire you, respect you, and treat you like a top 1% leader or CEO. But if you want to, learn to act and talk like a leader is actually way simpler than you think. Trust me, I didn't know anything about leadership or communication skills at 22 when I started my first business. But this past year at Acquisition.com, we crossed 100 teammates, we bought a second office building, broke a Guinness world record, and made over $100 million in three A's. And I grew a lot as a leader and a human, probably more than ever in my 10 years. And so today, I want to break down the five rules of leadership. These are the most underrated skills that will make anybody trust, respect, follow you. So let's dive in. Starting with number one, emotional regulation. Anybody can lead when things are stable. It is much easier to lead when things are good. But when things are hard, you really need this skill to hone in on. This is the skill that separates people who succeed under pressure from those who never exactly get what they want. So there's this phenomenon called the social contagion effect. And basically what it shows is that humans mirror the emotional state of authority figures. And this alone can make or break a business. Now, the first time I ever saw this was during COVID. What I saw during that time is that so many business owners, they were unable to function because the business owner could not stabilize themselves. Tons of them went out of business. I remember it was the first time that I realized a dysregulated leader just creates a dysregulated team. And when you have a dysregulated team, it's like performance just goes out the window. During a crisis, when you need somebody to have sound decision making, good judgment, able to stabilize people, they become their worst selves. Imagine what that does to the business. And so what I learned leading my first company, Jim Launch, through COVID, is that emotional stability was literally like the most important skill that I could have. I literally would put a post-it note on my computer that said, be neutral, to remind myself that my job was to be the rock for everybody else there because when I was calm, my team was calm. But if I showed stress, they all showed stress too. And this was that like social contagion at play. A lot of people see me now and they think, oh my gosh, she almost sounds robotic. But they miss the fact that I've trained myself to talk this way. So I have had to learn to speak in an emotionally regulated manner and regulate my emotions because my job as a leader is to stay grounded when everybody else is spiraling. That is truly what it is. And so for me to be able to speak that way, I have to maintain internal stability so that my team feels confident, focused, safe, even when things are not. And so it's kind of like an oxygen mask. It's like that really lame, cheesy thing people say. But like, if you don't do it to yourself, good luck having your team do it. It's just not going to happen. Like if they see you and you're freaking out, they're totally going to freak out. Now, there is a mistake that you want to be aware of to use this correctly, which is I think a lot of people think that emotional regulation is emotional suppression. And I get this a lot commented on my videos, which is like, oh, you're just suppressing your emotions. No, no, trust me. I've had enough therapy, probably more than everyone watching this combined. I talk about my emotions all the time. Suppression is ignoring and trying to avoid. Regulation is acknowledging, addressing, confronting, and then moving on with your day towards the things that you value. So if you want to regulate your emotions, first thing you have to do, you have to know that they're there. You have to know they exist. So many leaders that I've met with don't acknowledge them. They don't have the self-awareness to even name the emotion that they're feeling. And so you have to actually be self-aware before you can even regulate the thing. The second thing you do is that when you're feeling that emotion that causes you to, say, have an off-putting or a negative reaction, just this, put time between when you notice it and when you take action on it. That's it. Like maybe you give yourself a buffer. Maybe you say, I'm going to take five deep breaths. Maybe you're going to give yourself five minutes no matter what. Something to put a buffer between. We're not trying to do anything differently. We're just trying to pause between when you feel the emotion and when you take action based on the feeling. Now, the last thing I would say is to practice having neutral tone in conflicts. So when something happens, when something arises, it doesn't go right. Just practice. You become aware of the feeling. You put a pause. Approach it with curiosity rather than judgment. Be curious about the situation and your emotions around it rather than judgmental or critical. I could probably do an entire course on emotional regulation. It is that important to leadership. But if you just start with these three things, awareness, pause, regulate how you speak, you will be so much further ahead than most people. Now, once you can regulate yourself, you can use the next skill, which is sincere candor. Okay did you ever need to give harsh feedback to somebody but you didn know how This is the best way to do it At the beginning of my business partnership with my husband Alex we had a mentor who told us if you two have any space between you you will not be able to make this business work And I was like what do you mean space between us? And he was like, things that are unsaid, expectations unexpressed, like just things that you withhold from the other person. And so I remember first thing we did is we sat down and we wrote down everything we were afraid to say to each other. And then we gave each other those pieces of paper. And I remember it being like the first time that I had given and received unfiltered truth with somebody. One, there was nothing surprising in that feedback, but more things that were confirming of things I knew about myself but didn't like to admit or talk about. At the same time, it was the most freeing feeling I'd ever felt because I felt like, wow, I don't have to hold back. There's no secrets. And like, there's this feeling that you have with somebody when you know that you're not holding back and that there's complete honesty and transparency. It's like glass. And that moment was so real for me when I felt that glass between us. And it made me realize is like, this is how you want to feel with your team. They have to value honesty more than they value whatever the feedback is that's going to be between the two of you. And so the objective with Sincere Candor is to create an environment where people always know where they stand. That's what people want to know, where they stand. There's not confusion. There's not politics. There's no hidden agendas or expectations. Like they're able to perform at their best because they always know what their best is and where they stand with you. And they know they're going to get an honest answer, not a bullshit answer. Now, I will say this, is that you probably hear this and you think, gosh, that must have been so hard to do with Alex. There's a difference between critiquing and insulting. Okay, an insult is when you relate somebody to something negative. You're an a-hole. You're a biatch. You're always late. You're like so-and-so who doesn't work here anymore, right? It's like associating them with something negative. It's really me. And like, we don't feel good when people say things like that to us. And rightfully so. It's just insulting somebody. On the other hand, you have a critique. A critique is telling somebody what they're doing and what they could do differently to achieve a goal or better the relationship. So it's almost like identifying the gap between where they are and where they want to go or what the goal is. That is a critique. It tells them what to do next, whereas an insult keeps them stuck ruminating on the past and what they did wrong already. And so this really matters because if teams have sincere candor, they can operate without making all these assumptions. And so the best practice is to state expectations up front and then give feedback, critiques immediately, specifically, and privately. If you can't tell people what you want them to do, you can only tell them what not to do. That's your problem, not their problem. Well, it's their problem because they have to deal with you. But it's your problem. Like, you need to work on the skill. And I will be honest with you guys. In the beginning, it was hard for me to give feedback to people and be sincerely candorous. And then I realized after enough time that if I wasn't honest with people, we would always have the space between us and I would be the reason that they didn't succeed. Lastly, you want to ask yourself, is there anything that I'm not saying that somebody needs to hear? Is there anything I've been holding back? When you give people the truth consistently, it makes the transition to the next trait so much more natural. And guys, if you want more strategies like this, like actual tactical advice that my team is using to grow and execute every week, I just launched Layla's letters. It's the raw, unedited memos I actually send to my team internally. I want you to be able to have them too. And so we literally take the memos that I send my team on a weekly basis and we just send them to you as well. And so the link is in the description here. You can get on the list and get those sent to you every week. So the third trait is unimpeachable character. This was the most important advice that I ever got. It doesn't matter if you're smarter than everybody. It doesn't even matter if you can always work harder than everybody. What matters is this. In the beginning of my business, I would show up to calls, and there were some days where, like, I knew that I didn't show up well. There were days that I was like, you know what? Just something really f***ing happened. You know, we have this legal thing going on. This client said something online. This, you know, person left, and they're taking people from the business. And then I realized that I needed to tell people about it. Now, why is that? I remember going to my mentor and saying, I'm having a hard time because there's all this stuff happening that I have to deal with. And I remember he said something that I'll never forget. He said, Layla, never vent down. You can only vent up in a team. Meaning, you can't emotionally vomit on your team about all the problems and shit you got to deal with. But you can be honest. Because if they don't understand what's on your mind, what is dictating your behavior, then they can predict what you going to do next or what causing it And they most of the time will think it them and that you mad at them and you going to fire them and they going to lose their job So I remember this kind of came up I'm thinking about this. And then I'm on a call where I'm leading a full team meeting. And we had just parted ways with a team member who was pivotal to the team. They'd been there for three years and it was not the best separation. They had left abruptly. They took a bunch of clients. It was like a whole thing. And I remember like I was just not feeling like myself. Like I was like, like I do not. The last thing I feel like doing is running this two hour call right now to be like, guys, this company is amazing. And so I remember I said, OK, how can I show honesty without venting to my team or being emotionally dumping on them? And I remember I started a call off and I just said, guys, I'm going to be really honest with you. I'm feeling a little down because we parted ways with so-and-so. It didn't end how I wanted it to end. So I'm feeling a little self-conscious, not like myself. But I love you guys. I love this team. I love this company. I want to kick ass in this meeting. And so I just want to be honest. If you notice I'm a little off, that's why it has nothing to do with anybody else. And I remember it was like the first moment, everybody in the chat, they just blew up. They were like, oh my God, you're so transparent. This is great. Thank you so much for sharing. Thank you for telling us. Like, no, my old bosses would never be honest with me like this. And I was like, wow, it was really reinforcing. And that is when I realized trustworthiness predicts team performance more than competence. Why is that? Because people feel good with people that they know they can predict their behavior. And so if your team feels like they can't predict what you're going to do as a leader, then trust goes down and they're not all in. They can't put in discretionary effort towards things because they don't feel safe. And so instead, they put their energy towards protecting themselves. Instead of building the business, they're going to be constantly on guard, always one foot out the door, always thinking about something else because they're like, can I be safe here? So it's like through that story, how do you gain trust? Honesty is like the number one way you can gain trust. I didn't need to be honest with my team, but I did it because I want them to trust me so that I can trust them. because really you have to extend trust before you ask for it. So I would ask yourself these questions, right? Would I follow me? Would I want to be led by me? Would I trust me? Like be able to put yourself in the shoes of the people that you lead and genuinely say like, would I trust me as a leader? And so if your team can trust you, they can actually hear the words you say and that is what will unlock this next skill. Number four is clarity. All successful leaders have this one thing in common. I will tell you this. I remember the first time I realized how important this was. It was actually when our business was scaling insanely fast at gym launch. And I realized that I would be in a meeting and I wouldn't leave people with next steps. And instead, people would leave the meetings and I would notice they would be like stressed and slacking me, frantic and like, what's going on? And like, you know, I feel confused after that meeting. And I remember I was like, why are we stressed? We made these decisions already. Like, I don't understand. And then I realized, what is clarity? Clarity is taking something very complex and breaking it down into bite-sized pieces. And this is something that great leaders do. They can take huge objectives, giant visions, places, things, pieces, and then they can say, and this is what we do tomorrow. Here's your list of three things that you do. This is really important that you simplify complexity into actionable direction. People watch my content, they say, oh, it feels actionable. Why is that? Because I'm trying to give you clarity. I'm not trying to give you 17,000 things to do. I'm trying to give you clear direction. The objective is to turn a really big, messy problem into clear decisions, priorities, and next steps so people always know what to do. The biggest mistake that people make with this, like to this date, and like it's why I try so hard not to do this myself because people around me use big words, okay? But like they use bullshit language and like corporate jargon to sound smart instead of creating clarity. Oh, well, the EBITDA ROI on the carry of this bot. And you're like, when you're talking to your team, the objective is not to sound smart because they already think I'm intimidating and smart and all these things. They need to see them a human. The issue is like a lot of people speak in this corporate language. They use these big words because they're like, oh, well, they should learn them. It's not. No, this is why people make fun of corporate speak. It doesn't work. If you want people to take action, then they need to hear what you're saying to understand, which means you cannot say words they don't understand. The best thing I've ever done is every presentation that I give to my team. You know what I do? I put it into I used to put it into Hemingway. Now I put it in chat, GPT. I say, put this in third grade language. Why? If you want to speak more clearly and create clarity where people actually know what to do based on the things you tell them, put it in third grade language. Almost everybody on earth can understand a third grade language. Beyond that, it's like, you just don't know. Okay. And so research has shown that people perform at their best when they understand one to three of their biggest priorities If you can understand language and the way it works and how to use simple language with people you can create clarity so much faster Another way that you can create clarity for people is they come to you and they start just saying things to you, right? I always ask myself when somebody's like, can I have a call? And then they're talking to me. I'm like, do they want me to solve a problem? Do they want affirmation? Do they want camaraderie? Are they venting? Like, what are they doing? And so a question I ask often is, can you tell me what problem we're solving? Or are we not solving a problem? Just that. It's like your job as a leader is to speak with clarity, to give people clarity, and then to help them find the clarity in the things that they're doing. Sometimes people don't even know why they're talking or they don't know why they're doing what they're doing. And it's like you are there to ask them the right questions to help them create that clarity. And if you do that, then you can define success for people. And if you can align with people on that, what does success look like? There's no greater clarity that you can create. Now, I will say this. Clarity is where a lot of leaders stop because they think it's enough. They're like, okay, now I get this. Okay, now I provide clarity to people. But that is not the last step because clarity without ownership just creates a bunch of people waiting for permission to do things, which is what leads to this last trait, which is ownership. If you want people to trust you, follow you, look up to you, perform well under you, you have to stop asking whose fault it is and start solving problems. Now, what does this mean? I actually learned this lesson very early in my life, and I think that It's like the epitome of leadership. After my parents got divorced, my mom ended up getting into alcohol and drugs and she created all these problems that I had to deal with, right? You know, I had anxiety and fears around things that I hadn't before and I had like emotion I had to deal with and this anger and I remember being in therapy and I said, well, she created this problem. She needs to solve it. And I remember in that moment, they were like, I understand that you didn't cause the problem, but you do have to fix it. And I was like, oh, that one lesson that I learned that early in my life is like the epitome of leadership. There are so many times in business and in leadership where you are going to solve problems that you did not create. Somebody else fucked up. Somebody else did something. It doesn't matter. Because also, every time that you solve a problem you didn't create, you get to acquire the skills of solving that problem that that person doesn't get to have. And so real leaders, what do they do? They take responsibility for the outcome, not even just the effort. They take ownership over things that they didn't start. They accept accountability for results of things they didn't have full control over. They're able to look at a problem and say, even though I didn't do it, even though I didn't create it, I can solve it. And I will solve it, and I'll be happy about solving it. High-performance teams outperform because responsibility is decentralized rather than avoided. Okay, what does that mean? It means that a lot of teams have a boss who's responsible. This one person's responsible. Everyone else just helps with stuff. In a decentralized responsibility team, everybody is responsible, meaning each person feels ownership. So they feel like if they see a problem, they should solve it regardless of the fact that they didn't cause that problem. And they understand that even though they didn't cause it, they can take responsibility for the thing, solve it faster, and add value to the entire team. Now, a common mistake for this, if you spend all this time trying to figure out what caused the problem or who caused the problem, then that's all the time that you're taking away from actually solving it. A lot of people in companies and leadership spend way too much energy on blame rather than creating solutions. You just want to create solutions. I promise you, there's like not much to learn with the blame game. And so we want to spend our time solving the problems, not blaming people, figuring out what happened, just like it happened. Like we don't need to do a three hour postmortem on who f***ed up this f***ing launch of our product and this and that. Like we got to move on. Let's just fix it. So the number one thing that you can do today is look for a problem that exists, is not your fault, that you didn't cause and go solve it. Like that is what true leaders do. If you look at the best leaders on teams and companies, that's like the bottom line what they do. I remember that we hired somebody to work on our facilities team. And I remember knowing that they were a leader because I saw there was a team that had left like a complete mess. And it was not their responsibility to do anything with it. And instead, they picked up the whole damn thing without anybody knowing. They didn't ask for credit. Nothing. They just did it. Like, what is that? That's ownership. Ownership isn't just like being a good person. It's being indispensable. Now that you understand these five traits that make people actually want to follow you, the next step is applying them to your business. Because a lot of leaders, I would say most leaders, grow themselves but accidentally build companies that fall apart the moment that they step away. So now that you guys understand these traits, the biggest thing I would say is take one that you feel like you are the most efficient in and work on that one trait.