Clay Clark, Wes Carter Attorney at Law, Josh Wilson (the founder of Living Water Irrigation) and Jonathan Kelly share about why where there is no intentional friction success is a fiction
The Boom Book Section 12
Question for Clay – I have an employee that has been with me 10 years & I expect gen mgr duties from her when I’m out but don’t call her that.
Standards for Elephant in the Room:
Areas Accountability is Needed and Friction Can Be Found:
Consistent Meetings – Rock in your schedule
Keeping a Schedule
Growth vs. Creating Systems
Hiring the right people
Obsessing on Logos and Print Pieces
Company-Wide To-Do List System
Step 1 – Launch Group Interview
Step 2 – Have Quality People Shadow
Step 3 – Call the A-List
Step 4 – Implement a Stern Reprimand and I Will Take a Side
Step 5 – Fire When It Is Best for the Business
I have dept heads & I am the GM. I think I need to make her assist GM but not sure how to transition her into that role with inhouse staff because of friction between her & my sales director.
Question #1 – I think the promotion may help with that, but may not. Also, I really cannot afford to pay her more. She gets two weeks paid vacation per year. What else can I give as an incentive with the promotion? Thoughts on all this???
Question #2 – I bonus on accounts signed but I feel like something should change on business lost & not sure how to handle that. For example, if marketing rep signs 1000 kids and 500 purchases she gets paid .50 per package purchased the first time it is photographed (not following years). So, $250 bonus. But in the same year, if I lose 500 packages on a league she does not resign I’ve got resentment because an account was lost and it’s usually because she didn’t keep in contact with them over the year or because I had an employee that did something wrong on location that made them mad. I am not sure how to handle this. Thanks
Step 1 – Meet the person and find out a win-win
Step 2 – Change the compensation plan to incentivize keeping the account
The ability to deal with people is as purchasable a commodity as sugar or coffee. And I will pay more for that ability then for any other under the sun. John D Rockefeller, the man who went on to become the world’s wealthiest man during his life.
On today’s show, we are answering, answering a question from a listener while also teaching something that we probably don’t teach enough on the show. And that is managing humans. You know, it’s uh, getting people to do what they’re supposed to do. So if you own a copy of the boom book or maybe you don’t, uh, you can download Jonathan, I believe. If you go right now to the thrive time show website and you click on the podcast button, I believe in that right column, you can download all of my eBooks. Am I correct? Yes. Okay. So you go there and you can download the book, the boom book, and in the boom book on page one 63 of this edition, or on step 10, which is just go to chapter 12 of the boom book, you can find it there. Uh, I wrote in the book, uh, I wrote here, management consists of your ability to get the members of your team to execute your business plans, systems and processes with excellence.
So what I’m gonna do is Andrew, I’m going to have you, um, jot down on today’s show notes specific areas where I get crazy massive amounts of pushback on a daily basis. And I would like for John to explain, cause John is a very effective manager. How we get the teammates to do what they’re supposed to do when they refuse to do it. And uh, it might seem very redundant, but this is hopefully helpful for somebody out there. So Andrew, uh, first area where I get a lot of pushback, okay. Is the employees who work for me for the elephant in the room, men’s grooming lounge, have to do a great job. And let’s define that. They have to be on time. We’ll just start there. I want to get your take on this, John. It’s work at the elephant in the room. Men’s grooming lounge.
We have 4,000 to members who pay a membership fee to get their hair cut. Uh, we have over about a thousand in Oklahoma city. And uh, Jonathan Kelly, your haircut scheduled at 1130, uh, on of our business conference attendees or clients has a schedule a appointment scheduled at 1130. How late can we be before the customer gets upset? Um, one minute. I mean, yeah, it’s one to five minutes. So the appointments scheduled at 1130, right? Yep. And the stylist, the grooming professionals running late, not, not cutting hair, but just running late to work. How long can you and I put up with that before the customer takes their money? Uh, a K a their vote to a competitor. I’d say probably the second time somebody just like is late to a haircut. Um, the customer’s no longer going to be a customer of ours. Interesting. So you’re saying that we have to be on time, right?
So how do you get people to be on time, John? Because you do a great job managing the team of dozens of, dozens of, of ladies. How do you, how do you convince them to be on time? Well, one, uh, you got to write up, you know, reprimand when it doesn’t happen. You want to make sure that they, you know, know the expectations to be there on time. But two is also have them get there earlier than they’re supposed to. Knowing full well that they’re not going to get there on time. A little notable quotable. You can get a tattoo of this if you want. Without friction. Your success is a fiction. So without friction, your success is a fiction. What do I mean by that? I mean by John. What happens if it was just happened this week and again, we, we released these shows months after we record them.
True. But just on this Monday, well, you had to release somebody and we’ll, we’ll, we’ll say we don’t know what gender they were. We released somebody. It could be a man, could be a woman, okay? But we had to encourage, set human to go ahead and go work somewhere else. Oh yes. Why? Uh, they were not a good fit for us, meaning, um, they couldn’t, uh, do their core task, uh, at the level of excellence that we needed. And specifically they couldn’t be on time to my correct. Right over. Yeah. It couldn’t be on time for the training. Yeah. And it’s always the haircuts. So when you talk to somebody, it’s always like they need something else, whether it’s, you know, more training, more tools, more this, more that. And so eventually like you would just have to just realize that this person’s always going to be that way and it’s just better off for them to go find those things that they claim they need somewhere else.
Now, is it shocking to you that this person, regardless of how old they are, regardless of where they’re from or how much experience they have, they have moved around quite a bit from job to job when talking to the person and they’ve had a hard time finding a boss that can, I mean, is it interesting to you that people shop around a jobs that people tend to be job hoppers if they can’t be on time? Well, it doesn’t shock me because typically when you’re a crazy person in one area, like you don’t just let your crazy out in one job. It’s just kind of bleeds into all areas of your life everywhere. Yeah. But crazy people going crazy, you know? But think about this, Josh Wilson, you have a team of people at living water irrigation. If I muted you, you’re there. You are. Yes sir.
Hey, we’re in. Okay. So you have a team of people that living water irrigation. Yes sir. And you have crews and you have a bilingual, uh, crew. Am I correct? Oh, we do see. And you have to get your, you have to get your employees to be on, on time. That is correct. Um, what happens if they’re not on time and you let the cust you let the employee get away with it a lot. What would happen by default to living water irrigation, if you are over time to let it drift, we’d be out of business. Interesting. I mean to just get straight to it, but it puts, it’s a, it’s a downhill effect. If, if one person is late, then it just rolls into the rest of everything else. Before meeting you. Um, how long ago did we meet for the first time? Did we connect November of 2017 Sarah, it was a beautiful day.
It was, the sun was, Oh, I’m sorry. He’s wearing boom hat. So two years ago. Yes sir. And how much have you grown since that meeting? Oh, we’re up almost. So a little over 600% is where we stand today. So it’s literally been almost exactly two years and we’re up a little over 600% since the day we shook hands. And today we were talking to Daniel with a Daniel’s heat in the air. It’s Daniel’s heating here now. SnowBear heat and air based on them based in Amarillo. And we found out that he, as of right now, uh, it being the 12th day of the month, he’s already done two and a half times more sales than he did all of last year during the same month. Am I correct there, Andrew? This is true. It’s pretty impeccable. SnowBear heating air. Look those guys up. Online, snow bear heating, air based and Amarillo or Google search. Josh with living water, irrigation. Check him out. He’s a real examples. Then we have Aaron antice who couldn’t be here on today’s show because he’s out selling houses with Shaw homes. Dot calm and they’ve grown from $40 million in sales under $40 million in sales to over $80 million in annual sales. And let me, let me play a little snippet cause he could not be here today. Let me cue an audio snippet up of Aaron [inaudible] talking about his growth.
Our sales have gone up eight point $2 million so far through the end of third quarter, which is a 20.3% increase from last year. So pretty hot if you’re good. Matt, I want to talk about, have you talked with three things and you don’t have to look into him or you can just talk to the team. The three things you’re doing, they’re blending. Good. Well, there’s three things I think I want to hammer home on is one, as you get Google reviews and you add content. So one is rubric reviews and content. Two is the group interview and three is scripting and firing.
So let’s start right there. So he is getting Google reviews, he’s implementing scripting, he’s implementing the systems. What would happen, John, if the people on his team knew what to do, they they, they knew they needed to get Google reviews, they knew they needed to follow the script. What would happen if Aaron knew what to do and his teammates knew what to do but they didn’t do it? What would happen, Joe? Well, they definitely wouldn’t have increased by $40 million. I can tell you that this is the difference. This is the difference between education and what I do. Practical education, practical education versus general education and general education. You get a degree and people go, Oh, awesome. And you wait, you wait in an arena and they go, wow,
ladies and gentlemen, we’ll now uh, honor the 2020 class of yada yada. All those earning a business decree
will be run off alphabetically. Three hours later. Karen Smith. It’s just your parent clapping. Yeah, it’s one person clapping, Carl Thomas. Thanks dad. And they just keep doing that for hours and hours and hours. And you have gained this education and $160,000 in debt. They only gave you a degree if you earned a degree in application. Oh they said, Oh, you did something with that. You actually now get a degree. So what if you out of the education there’s no cheering because the word commencement means beginning. This is a deep thought for colleges. It means the beginning. So what if you got a degree called AKA start here and then you only got cheered for or got a diploma. If you did something with it, I like that there’d be very, very few diplomas, right? To be like a couple of dozen. Because in America today, right now we have a population of 330 million people.
And as the most recent data I found today, actually there are 16 million people who are calling themselves self-employed. And nine out of 10 of those startups fail. So that means you have like a 0.4% chance of being successful. You need, and you know why? Do you know why you have hope? You know why your chances are so small. I’ll tell you why. It’s because we will not fire the people who are unwilling to do what is required. Preach that. So let me hit play. Let’s hear this. Aaron antice talking about implementing the, the, the, the systems. Here we go.
We’ll call the scripts. Cool. Let’s go with Google reviews and content. How do you do it? How have you gotten your team to do it? Just the people in here can then take this knowledge and share with them. So a year ago I had a 16 member sales team. Today, I have two of those people still remaining on my team. So, um, I meet with them every single week and make sure that they’re doing Google reviews and we have six.
I feel like if we’re not careful, we may have just skipped over what just happened. So hired 14 of 16, John and you’ve been around me now seven years. Um, you’ve never been fired nor have you come close to being fired. But I remember back in the day, let’s uh, share a story, uh, called uh Oh John got promoted. Let’s share the story. Many moons ago, um, you got promoted into a position because you did a good job at the entry level position. Is that correct? Thus far, yes. Okay. So when we do search engine optimization, content writing for business conference clients, yeah. Do we not have to go through the four step process with to make sure the content was written right? Verify it was uploaded, verify it checks the quality control score and then run reports do, is that not correct? That is accurate. And so your first month being promoted, you came to me over there by the printer and you said, Hey, I ran some SEO reports and uh, why are you, why are you breathing like that?
He said, I’m glad. He said, I ran the SEO reports and before we submit it, we’ve worked. Before you submit it to Google, we always check the content and there’s somebody on my team who’s been copying content. Did that not happen? That is true. I told you to do what? Um, talk to that person and let them go. There it is. Now the problem is you’d known that, I won’t get into the details, but you’ve known that person for a long time. A very long time. Yeah. And I’m ducking. But what if we didn’t fire that person? What would have happened to our business conference clients? Well, we wouldn’t have any, so we talk about it a lot on the show is your business is like a garden and you have to tend to it every single day. And so just like weeds in a garden, if you don’t pull the weeds, your garden will die.
Nothing will grow in it. So your business is the exact same way is if you don’t get rid of the cancerous, the tumors of people that are not doing their job, then all of a sudden you won’t have a business. You’re not going to have customers. And all of a sudden all that lifestyle that you like or that business that you’re passionate about, you don’t have anymore. So people tell me all the time, and Andrew, again, these push back points, I wanna make sure we get this, okay. One is being on time is a pushback point. And again, if you’re not willing to have friction in your life, your success will be a fiction. The second is getting those Google reviews. We talked about that. All right. The third is having an attitude of gratitude.
Now that right there, there’s somebody out there listening right now who has an employee who is resentful and you now are starting to change your work flow to accommodate the resentful person. Um, Josh, have you ever had a job in the past or had an employee in the past who was resentful of something? Um, I see this a lot in family businesses where there’s somebody who’s a daughter of the owner, a son of the owner related to the owner, and they feel entitled to be the next in charge just by virtue of being born like, like it’s a kingdom or something and then they don’t get promoted. I see this a lot where somebody has been working for a company for a long time and they just never really do a great job so they don’t get promoted. Talk to me, Josh, about a situation where you have dealt with a resentful employee, maybe in your own business or a teammate at a different job you’ve had talked to me about that situation.
Sure. So, uh, off the top of my head, years and years ago when I was managing restaurants, I went to work for a restaurant chain and they were looking to put somebody in position to open new stores. And so I had just started with that company, was very fortunate to be surrounded by some great people and have some great knowledge. And I got promoted to go open the couple of stores in the Oklahoma city area. And there was a gentleman there who basically said it, I can picture his face that it was name and everything, but we won’t mention that he said he wanted to kill me. Oh. And I said
Whoa. And metaphorically of course. And I was laughing and I thought it was a joke and we were having fun and Hey man, congratulations. And he told me what a horrible position he had put himself that I had put him in his family in. And I was like, goodness gracious. And so full circle. I came back to the Tulsa market and went and took over his store. Oh, okay. Cause he couldn’t get over it and he just continued to be that cancer and uh, ran into him a couple of years ago actually. I guess he’s doing well now, but it sounds, not that anybody’s brake lines 12 or 15 years ago, I guess I have a story. Sure. So this is way back in the day when I first got promoted, and I don’t know if you remember this, but uh, it was one of the guys that had been there a while.
And so after it was announced, like I would be leading a, he had a case of the mopes. It’s just kind of moping around a lot and that resentment started S uh, setting in. And so you actually pulled me and this person in the room and you just go, here’s the deal. Don’t sit down. We’re not gonna, you know, it’s a standing meeting, uh, you, he’s in charge talking about me. You’re going to have to deal with it or get out. Do you have a problem with this? Yes or no? I need to know right now. And the person was like, no, I guess it’s fine. And then it was fine. Fixed it. Now this is what happens is I have made a list of some of the areas where friction can be found in a successful company. People think you have a successful company without friction.
No, I’m a car. All right. A car. There’s friction. In a car. That’s what generates power, right? I mean, some of the newer cars have less friction, but there is friction there. You can’t have a car. It’s driving down the road with wheels that don’t have some kind of friction with the road. It’s going to create a little bit of heat there. That’s normal. A car with no heat on the wheels as a car that’s not moving. Does that make sense? A car with no heat on the wheels, it’s not moving. An engine that’s not hot is not on you. So there’s going to be some heat there. And uh, some people, uh, are built to withstand a lot of heat and some people can’t. I would say I can handle, um, a consistent extreme level of heat, but probably not as much heat as like an Elon Musk could handle.
Uh, I can handle a lot of heat, more heat than most people, but not as much heat as probably Trump could handle. I can handle a lot of heat, but probably not as much heat as a Kanye can handle because your level of success is equal to the amount of heat you can handle. That’s bought bottom line. Now it is. And uh, you’ll see a lot of entrepreneurs that are very successful, um, who end up, uh, their marriages fall apart because they’re married to somebody who can’t handle the heat, but they go ahead and plunge into the heat without their significant others of approval kind of thing. So it’s really important that you don’t sign yourself up for a heavy, very heavy friction situation. If your spouse works with you in the business, if they can’t handle it because it’s going to get, no, nothing’s good if everybody, if your, if your spouse is upset.
But let me read off some of the friction areas. Consistent meetings, John, the problem, where’s the, where’s the, where’s the friction? When you ask an employee on your team, a key teammate, a key partner to be at a weekly meeting at the same time or a daily meeting or something, where does the friction start there? Well, it’s the consistency. So do it the same thing every single time doing what you say you’re going to do. It’s just so hard for people. And so the first time you start holding them to that standard, they just, they hate you for it. Okay. Let’s talk about this invoicing. You know, you see a lot of companies where there’s a little friction because one of the partners forgets to invoice or forgets to bill clients. I’m Josh. Have you ever seen this where you have a partner or somebody you’re working with or someone on your team who just, you know, forgets to invoice, forgets to build customers?
Absolutely. I made it full disclosure and transparency may or may not allegedly have occurred at living water irrigation [inaudible] for what we should be billing or billing properly. And then the other problem is, and doctors owner’s not here to say this, but he would say this to everybody. Quit invoicing. Take payment upon completion. Okay. Friction. Now, a little friction here. I’m creating systems. Um, I have found for me particularly how I create systems is by going outside of the current constraint to see if something works. You know, so as an example today I have a business conference client who um, she cannot write content. She just can’t write the words. I don’t, I don’t know what it is. I don’t know. I don’t, I’m not too too curious. You just can’t. Um, she also won’t allow my team to write the content. So I mean we can’t write the content and she can’t write the content.
So the only thing that I could do is like interview this person on like a podcast, you know, fairly consistently and transcribe and do it that way. No, I’ve never done that for anybody except for Dr. Morrow. I think dr Marla did that with a lot. We’ve done a lot of podcasts with him. I’ve done some with dr Chad Edwards, but I haven’t done it as a system. And I got to thinking maybe that’s a thing. Maybe a thing would be that the business conference client sits down with their coach every week and records a show in that creates content for those rare people that don’t want to do that. But then I thought if I do that though, then it’s not going to be scalable. And then we neutralize the coaches time and maybe I’m going through that and I don’t know what to charge for it.
So I’m just gonna do it for a while and see what happens. But then once we figure it out, John will make a nice form on the website I need to fill out or something. And then you just gotta learn how to add a conform to that system. And so there’s all these, when you’re building systems, there’s going to be errors and I just encourage you, there’s going to be some friction there. Now training people, training people, there’s going to be some friction when you try to teach somebody, cause every adult always says all the time except for the rare birds. I get it, I got it. Alright, I I already know. But they don’t call recording John. Where at there be friction when as it relates to installing clarity, voice.com it’s clarity. voice.com that is the call recording system that we use up there at Oxy.
Fresh elephant in the room. Make your life Epic. Where can there be a little bit of friction when it comes to encouraging your team to record their calls? Well, it requires accountability, you know, so if you’re recording your calls, that means that you will have to go back and listen to your calls, which means you have to go back and correct people, which means you have to have friction by telling them they’re not doing a good enough job. Okay. Now let’s talk about this launching ads. John, we’re going to be a little bit of friction with somebody when you want to launch ads. And, and I mean, is there other people on the team that they’d be ad maybe we should say this and someone thinks the ad should look like this. And then all of a sudden a subcommittee forms and then another meeting forms.
And pretty soon no ads get launched. Have you ever seen that before? All the time. Somebody once said that opinions are like eyebrows. Everybody has at least one. Oh. And so let’s say thing with ads is um, you know, everybody wants to put their own spin on it, their own picture on it and then nobody wants to put a no brainer on it cause then it cheapens their brand and you want a different shade of blue, then that one doesn’t speak to me. That would cause anxiety. You Andrew, where can a little friction occur when you know a client’s struggling, struggling to find good people. A great client is struggling to find good people and they’ve been struggling to find good people for like two years, two years, 18 months. Like we’re looking for, we’re trying to find a manager for 18 months work trying to find a manager for 18 months.
Andrew, talk to me about that. Why, why is there some push back about the group interview? Where could there be some friction about the group interview? Yeah. Well one, it’s just, it’s not a normal way to do things. So people might fear that it might be weird to the people coming in. They’re more worried about what the people think. Fear of rejection. People coming in and being like, this is weird and wanting to leave. And then the other thing is their staff is probably freaking out that the fact that they are hiring and why are you hiring and they don’t want to freak their staff out so we’re not going to start hiring [inaudible]. That’s when you become a hostage in your business. People ask you, why are we hiring? And then you say, well, we really don’t need somebody and you stop hiring people to appease your staff.
Who’s the boss now? Exactly. Now think about this one. Ah, tracking numbers. Where can there be some friction, John, about tracking numbers. You know this, I mean every morning I ask how many leads came in every week at elephant in the room? How many leads came in? How many appointments did we schedule? What was the conversion rate? When I have to point out to one of the shops or one of the teammates or somebody that their conversion rate on selling memberships is not good, where could there be a little bit of friction when you’re tracking a real numbers? Well, they just feel like it’s a personal attack on them. Also, tracking just makes you follow the numbers, follow the money, uh, and so you’re like, Whoa, we’re definitely wasting money in that area. Or, Hey, somebody screwing me in this area and numbers don’t lie. Okay, now let’s talk about this firing people. Where can there be some friction? And before we, before I have you answer that there, there John, I need to get West Carter. Andrew, I’m going to kick you off here for just for a second. I love you, but I’ll tell you this. I love you, but last time I checked, you are not an attorney yet. Not yet. Not yet, but through several minutes
of online YouTube video watching YouTube could know a little bit about the wild West Moses, you know, just being around Wes Carter. How are you sir? I’m wonderful. How are you doing? Hey, do you like that brisk weather out there? I love it out there. I like it. The ice tickles on the, on the pool. Oh, it’s beautiful. It’s beautiful. Winter Wonderland. We talked when we asked you about this were could there be some friction when it comes to firing people? Like we’re going to read just if you’re a business owner and you know somebody clearly needs to go because they’re a cancerous growth, they’re not, they’re not a longterm play to obviously not a good fit. Where could there be a little bit of friction? Well, I mean anytime you terminate someone you’re going to have to navigate some landmines. So you know, some of the friction is with your managers.
Let’s say manager comes to you or your HR person says, I want to get rid of them today. I can’t stand it anymore. Then usually the next question is, okay, well what are they done? Have you documented, you know, some of the problems, are they in a protected class? Is there a disability we need to know about him? There’s a whole laundry list of questions. So that’s one thing to get through is just can you, are you in a good place legally to make the termination? And I think one of the other places is bosses, owners of companies, whoever’s going to do the termination, actual sit down and fire someone. A lot of times they feel compelled to argue or explain or defend their situ, you know, so you say, look, you’re just, this is not working out. Well why isn’t it working out? We’ll look at, now it’s talk, you know, the proper response is we’ve already made the decision is not working out.
But what happens in reality is the supervisor goes, well, let me tell you all the things about why you’re a horrible person. And then that person has an explanation for all the reasons they did that. Or the employee says, Hey, you’re a horrible boss because of X, Y, and Z, and the boss fills, you know, like they have to defend themselves. So you end up an hour of arguing that can do nothing but hurt you as the employer. So you know, there, there’s some friction there that you want to do it in a compassionate way, but you want to keep those meetings short and sweet as well. I’m not asking you a West to be an expert about controlled burns. All right. But I think you and I know just enough about this to be dangerous. The situation is in a plate and a place like California where there might be a lack of water, they will go in DD the firefighters or certain individuals go in and they’ll actually burn certain underbrush on purpose in a controlled way.
So that way when a wildfire occurs, it doesn’t have anywhere to to go a controlled burn. Um, at winters and King, how long have you been at winters and King right now? 11 years, I believe. So you’ve been at the law firm that has represented, you know, TD Jakes and Craig Rochelle and Joyce Meyers and huge, huge, huge people in the ministry space, business owners, that kind of thing. It’s a very successful firm. Winter’s king.com. And have you ever, and I’m not asking for specific examples, but have you ever seen intentional friction where one of the higher ups winters or King or somebody up there and leadership, when you were starting out,
you ever observed, you know, a little friction on purpose where the leadership team let somebody on the team know what was acceptable or what wasn’t acceptable so that you know, the business conference clients were happy. You know what I mean? If you ever seen someone get called out, someone to be removed to somebody to be asked to not come to work anymore, have you ever seen a controlled burn?
Well, we’ve been pretty lucky about letting go of people, but we’re also pretty intentional about setting expectations. So if there’s a problem, we try to address that right then and there and we try not to and not be shy about, right. This is not acceptable. This cannot happen again. You know, and you address it right then and there. Um, friction, little friction, friction, right? But it’s just accountability. You know, you hold them accountable right then and there. And because if you don’t, those teams, those things tend to fester on both sides. Your supervisors, your higher ups, they remember every little thing. And then two years later there’s a blowup or your employee thinks they’re doing a great job and then all of a sudden they get fired and they have no idea why I thought I’ve been doing that. I was on fire. So I mean, you need to, you need to address it right then and there. Um, you know, if there’s a deficiency, if there’s, you know, conduct that’s not permissible, whatever it is, um, handle that friction up front because you can nip it in the bud a lot of times.
So now we’re going to read a question from a thriver and a, I’m going to read it and as I read it, uh, Josh, I’m going to have you just kinda see if you get what I’m talking about here. Okay? Yes sir. This thriver rights. I have a department heads and I am the general manager. Are we on the same page? No, same page. Okay. So this person is a general manager. They said, I think I need to make her assistant general manager, but not sure how to transition her into that role within house staff because of the friction between her and my sales director. Again, I wanna make sure we understand this. Sure. This person says, I have department heads and I am the general manager. Okay. I think I need to promote somebody to become an assistant general manager, but I’m not sure how to transition this person into that role with, because they’re in house with their in house staff because there’s some friction between her and one of the other and the sales directors. How would you step one go about it if you, and again, I’m, I’m assuming a lot here, but let’s assume that one personality just cannot coexist with another one. They just cannot. What would I know what I would do, but what would you do?
So I’m just a really blunt and straightforward person. So I would promote her to assistant general manager and let the sales director go. You would? Yeah. Okay. I mean, if she’s at that level and you feel that she can handle that responsibility and that’s where she needs to be, then put her at that level and replace the sales director.
And this isn’t trying to one up your anything. I agree with you. What I would do, my first step I would do personally is I would launch the group interview and if I own a business, I’m going to keep the group interview going. So right now, John, we had a guy, a shadow today was great guy. Yeah. But we didn’t have, we didn’t a spot for him. We have no spot. So I added him to our a list. Can you explain kind of what the a list is, Jonathan Kelly? Yeah, it’s just the wind. We have a spot. There’ll be the first people we call. Um, so we’ve already gone through the process of finding them, kind of vetting them, you know, we know they’re a good fit, they’re good people. Uh, and so we’d love to have them on the team. We just have to have a spot for them.
So step one, I’ve launched my group interviews that way. I always have candidates. Now step two, I’m going to have quality people shadow me. And then West step three, if I know it’s time for someone to go, I’m going to text my a list or call my a list and I’m going to schedule an offsite face to face. I’m an or or maybe after hours or something, but I’m going to call the a list and I’m going to kind of feel now the, the, the reserves. I’m going to look on the waiver wire of the NFL. I’m going to look for some other talent there. Um, why would that be wise to maybe look for a replacement before you cock the hammer?
Well, I mean if you lose someone, you know, those conversations can go South very quickly. And so even if it’s just a stern reprimand, if, if that person leaves or they walk out the door, most likely they’re not going to tell you they’re leaving. They’re going to be guac out the door and put their resume up on, on site. As soon as they know that you’re not very happy with them just to cover their own tail. Because as we know, employees are always going to do what’s best for them. Um, so you know, you want, you want to have someone where you’re not in alerts and you’re not held captive keeping someone that’s cancerous on the team that uh, you know, needs to go, but you can’t because a business necessity. Now, let me add one more thing maybe as a mid step. Earlier in my career when I started managing employees, I had as a de facto complaint department of the law firm.
You know, I had a tendency to avoid some interpersonal drama because I knew it was going to end up back in my office with me talking to people. And one of the things I learned from one of our founding partners was at first it kind of, it’s like this is a bad idea, but if there was a situation like that where two people weren’t getting along and I would tell him about it, he’ll get on his phone. Mary and John come to my office right now. They would sit down and he would say, Mary, I understand you don’t like John John. And understanding from Mary what’s going on and very blunt and I’m like, well, you know uncomfortable at first, but over the years it’s a great technique because you get everyone in the same room. They can’t lie about each other behind their back. You know if someone called says something, they’re going to call it out right then and there and you can sort through it pretty darn quickly to see what the issue is and get some clarity on look, is this just personality conflict? Is this a misunderstanding or do we need to terminate someone and just part ways.
I 100% agree with that. I would say so. I liked my step one. I launched the group interview. Step two have quality people. Shadow step three I’m going to call my a list just to see what backups I have. Step four I’m going to implement that, that stern reprimand and I will take a side, but I want to hear both parties at the same time. I agree with that. Then I’m going to take a side. Yeah, I do. I will say, you know what, John? I would without getting myself in trouble. I know. No details please. But do you remember the ID card them again? Yes, I do. Can you explain what happened there and just, you kind of know who the person was, but the generalities. Yes. Once upon a time and along a long, far away land. No, uh, it was just this, the ongoing thing.
So it was like something that you asked to get done. And for what, uh, you know, different reasons, ID cards for the building. Yup. But that’s okay. So there’s details. That’s the only details we’re gonna get. I don’t know the gender of the person. We don’t know when it was. It could have been seven years ago. It could have been, could have been yesterday. It could’ve been right now. Right now. Yeah. Okay. Um, so yeah, so just need an ID cards for the building. And so every day, every week, this went on for weeks. There’s always a different reason why it couldn’t get done. And so, uh, eventually it got to a boiling point. And so, uh, there was a freak out moment that occurred. And by Jon, by the way. And John’s over there. I could hear him across the room yelling, but it started off like this.
It’s like how could it possibly take you something like four weeks to get an ID badge? It’s a phone call. Can I make the call? And he’s like, I don’t see what the big deal is. And you, and then you say you don’t ever see what the big deal is about anything. That’s the issue with you. That’s the problem. And I’m watching it and I’m watching and I’m going, Ooh, this is good popcorn. I really was excited about it and I let it go on and on until it got pretty Epic. Yeah. And then after it got really Epic, I said, Hey you two guys, let’s go in the room. And I asked you both what was going on. And then after I got all the information, I clearly looked their person. No, you’re 100% wrong. John’s 100% right. Johnson charge deal with it. And that was the beginning of the end of that relationship.
But I don’t feel bad about that. I’m just saying at the end of the day it’s what happened. The other person could have apologized and fixed it, but you got to get both parties in the room. Now, step five, and this is going to be tough fire when it’s best for the business, when it’s best for the business fire. When it’s don’t fire when you’re mad, don’t fire right before your anniversary trip. Fire when it’s best for the business fire when it is best for the business. Now, uh, the question I get, I don’t understand all of this question. I’m trying to, not when we will do other followup shows if we need to, but this listener says one of the things they think that may help with the friction, I believe is to promote somebody, maybe to give them an additional promotion maybe to a different area so they can avoid that friction a little bit.
So let’s assume that we agree with promoting somebody. Let’s assume we’re on the same page about promoting somebody and they said, I really already give this person two weeks of vacation time per year. What other incentive can I give them? So I’m going to make a list of incentives that you can give people that are a super affordable that you could do right now if you did need to promote somebody. Let’s just say that. Let’s, let’s pretend this is a different question. What’s a way to give people a incentive or a promotion when you don’t have a lot of extra cash? All. Alright. One thing you could do is people, Jonathan Kelly, people love a flexible schedule. [inaudible] schedule, don’t they? Yeah. Why? I think it’s their view of like a sense of freedom, you know, so like they can, you know, they dictated their, their schedule. I hate that by the way. I hate schedule flexibility, hate it. But if I, if you gave to his boss like, Aw, I don’t want that. But some people like that. Another thing you could do in West, I’m sure you’ve seen businesses do this, you could offer your employees like free lunch every day. You know, maybe you could cater in lunch every day or once a week. Yeah. Why do people, employees like free lunch so much? I mean, it’s a hot move.
Well, it is. I mean I think it’s becoming less of a hot move move the more people eat salads and shakes and skip mills, but uh, people still like free food and you know, I think it also has the added benefit of if you lunch together as an office, building camaraderie and giving the employees a little bit of time to socialize together at lunch.
Then another move you can do, which I love is profit sharing above a certain point. Now that’s good because that way they’re, you’re giving them a bonus but you’re not giving them anything extra unless there is additional profit. And that right there is a mega move. And I don’t know, Josh, if you’ve experienced this at living water irrigation before, but as your company grows and you add more and more people, have you ever experimented with profit sharing? Have you done that before? Oh, we actually have a number of people on our team that have profit sharing. And does it motivate them immensely? Really? So they know how much profit you’re making. A yes sir. And then you don’t have a problem with that. I don’t have a problem with it all. On West you have this thing called it the employee stock ownership program. You see this with a lot of companies like ups or a quick trip. Does this other brands do this? Talk to me about the upside of everybody knowing how much profit the company makes and the downside of everybody knowing how much profit the company makes.
There’s quite a few different ways you can do it. The Aesop, you talked about a Phantom stock, so you can do profits interest in LLC where they just get profits above a certain level. Um, the good side is cash is King and they know if they meet certain goals, they’re going to be a direct financial benefit to them. And so it does have that, like you said, an immense reaction to incentivize someone to do well. Um, the bad side is usually as the owner, we’re still keeping a lion’s share of that. And so you’re kind of disclosing to everyone if you’d go full transparency with the books, you still might get those people that look like, well, that’s nice. You just gave me an extra 5% but what about that 95% that you’re getting? Sure. I’d like a bigger chunk of that. Or why do I need you? You’ve taught me everything I need to know. Why don’t I just go open up my own business and take, you know, take the lion share of myself.
This is the kind of situation where you’ll see, um, uh, Jack Welch, um, uh, West. I’m not gonna you on the spot and ask you to name the specific amount, but have you heard a little bit about Jack Welch? How much of a bonus he got when he retired? Have you heard about this? I have not. When Jack Welch retired, he asked for a pretty big bonus because he grew the company by 4000% and he put it into his agreement that he got a certain percentage of the growth. Yeah. Yeah. I don’t think anybody predicted he would grow the company by 4,000.
So he pulled an early Elon Musk and bet on himself. Yes.
And he received a $417 million check.
Hmm. That would have spawned a lawsuit today. Um, but good for him. I mean he believed in himself, you know, if you negotiate that up front, which sounds like he did. Yup. Then you know, as long as it’s reasonable at the time you negotiate it. And of course Ilan still got a lawsuit about some of his bonuses I believe. But
what kind of, uh, what was that again, I’m not trying to put you in on the spot. What kind of a uh, legal issues as Ilan dealing with as it relates to bonuses for himself
today with private companies where we have shareholders, the shareholders can bring a claim that compensation is excessive. So we’re looking at usually some sort of a shareholder suit where they bring a lawsuit saying you can’t pay yourself that much money or you didn’t earn that much money. That’s more than what’s reasonable. Um, now of course a lot of our listeners are going to be in what we call closely held business, where the shareholder is, me or me and one other person. So we can agree to a lot more wide ranging things. But if you have other holders in the entity, other owners in the entity, then that’s something you need to take into account. If you’re going to give yourself a nice fat bonus is that a, the shareholders aren’t going to come back and give you grief about it.
How big of a bonus as Elon Musk given himself like $10 or $25 or what kind of bonuses as he,
no, remember the numbers off the top of my head, but remember it was based on a certain productivity. If he hit a certain number of units and then there was one based upon our overall revenue, does that mean he had metrics that he built in and to his contract? Basically betting on himself? Um, I remember all the news articles when it first happened. Very few people believe the goals were ever going to be attainable, so it didn’t get, you know, sure, go ahead. Good luck with that. Um, and then when he started meeting, some of those people were like, Oh man, that’s, that’s a lot of money.
Do you believe that the guardian is a credible news source? They’re West Carter. Did with the guardian. I have no reason to believe it’s not very legal guardian reports or the Elon Musk wins approval for staggering pay deal with potential $550 billion bonus. Did you just say 550 billion a B? We’ll Chuck a change yet. So the deal was if he grew it, now can he work for zero salary? Right? But if he grew it into a $650 billion business, he would earn a $55 billion bonus. And I love rich people and I love capitalism and I can’t lazy people and I love it. The kind of guy that will work for free and then say, if I hit these numbers, pay me. Yes. And you see it another industry, you see stories,
actors who take 2% of the revenue instead of getting a check up front, they work for free. And then if it’s a huge hit, they may end up making, you know, millions and millions of dollars instead of getting $40,000 to make the movie. Um, or you see athletes now where a quarterback will say, Hey, I don’t want an extension this year. Let me ride it out and if I have a good year, I’m going to be worth 10 times out on the open market. Right. And so I think Jonathan Kelly is negotiating a deal with Claire right now. I think he’s going to work for free.
Well my goal, my, my end game goal is someday I want John to buy me out cause I just want to be done eventually. I was going to say, I just wrote an article the other day that said the lion King act or one of the voice actors, they offered him up front for his voice. Yes. $2 million. And he took, his mom actually negotiated, said no, we actually want profits on movies, all releases rereleases digital licensing, cetera. And he said that he has cleared way more than $2 million. It’s a great succession plan though. Seriously, to have people that are close to you buy out a little over time. Um, because again, I mean there’s a certain maniacal focus. It takes like, like our show, just as an example, our show, we do nine shows a week that John lets me release, but we are prerecorded now through I think January 30th.
Yeah. We’re hitting February. Yeah. So I mean, we could release a lot more. Um, John’s argument was, which I think is correct is, is it, Hey, people can’t consume as much content as you can put out. So when people like our listener ask us a question, we’ll share it with them right away. We’ll sit it to him usually within 24 hours. Yup. But we don’t release it until we reach, we release it. But when I’m like, you know, I dunno, 55 or 50, whatever that age is, where a lot of people want to go, you know, travel with their wife and go on a beach or whatever that looks like. It’s kinda hard to record nine shows a week and have that intensity for show prep while you’re traveling. And so that’s a great way. It’s a great, uh, as a side note, that’s a great way to uh, set up a succession plan is find somebody who’s a partner and let them buy you out or buy in over time. And that’s what happens with Johnny has kind of a profit share. So each year that goes up. And so as we make more, he makes more when I find with that as John brings up as many ideas to save money as to increase revenue.
And that’s very important. I mean that’s very key that you just hit on, which is not gross revenue but net revenue because it’s easy to go spend money like a champion. But if you don’t make more money than you spend, we’re all going to go broke. So make sure those incentives are on net revenue after expenses because you incentivize your people to find cost savings.
Now this just, and this is question number two from the same listener, they said, I bonused on accounts. I she, she gives bonuses on accounts signed up, but I feel like something should change on the business lost and not really sure how to handle this. For example, if my marketing team signs up a thousand accounts and 500 somethings, um, then the person who sells it gets paid per package. However, when they lose accounts, they get resentful. This is what she was said. She says, um, when she does not resign an account because they forgot to follow up, I’m reading the actual quote it says, because it says a, um, if she does not resign, I’ve got resent. She’s got resentment because an account was lost and it’s usually because she didn’t keep in contact with him over the year or because I had an employee that did something wrong and the location that made them mad, et cetera.
So the point is you have an employee being resentful, being resentful. Now I believe once the, um, emotion changes to being grateful to being resentful, Elon Musk hot topic, this is what you learned most cast to say. He said, one lesson I learned at PayPal is to fire faster. That sounds awful. But I think if somebody is not working out, it’s better to part ways sooner rather than later. It’s a mistake to try to try too hard to make something work that really couldn’t work. I do think we should be repairative and try to meet with the person and see why they’re being resentful. But I’ll start with us once somebody is resentful. We’re not talking about like I’m frustrated during this moment, but I am now resentful. Uh, I’ll call this a Bennett syndrome on the Patriots. Uh, Vidant Michael Bennett was a very good defensive player, was brought over and he’s also known as a guy with a little bit of a personality type and they brought him into the Patriots and the Patriots are setting a lot of records for having a great defensive team this year. And uh, apparently he was not happy. He didn’t feel like he was, his skills were being utilized and so he was resentful. He was frustrated. He was discussing. It was, how would you decide, how would you define the word resentful? Like how would you describe it in layman’s terms? For a person
myself, resentful. I think that’s when you’ve come to the point emotionally that you are going to Harbor ill feelings no matter what goes on in the future.
Uh, the actual definition we have here is feeling or expressing bitterness. So I would agree. Yes. So, uh, or indignation and having been treated unfairly once somebody is resentful. Now again, I’m just going off of what this listener has written here. If you use the word resentful now there’s a lot of words we could use and I’m not criticizing your adjective. I’m just saying if somebody is resentful, um, I would, I’d have to fire them as soon as possible if they were in fact resentful. I mean, if you can’t fit, fix
it. If you can’t fix it. Um, and I think with this particular listener, it sounds like we need some more information. I mean, if you’re incentivizing people only on step one, getting the account, that’s where their attention and focus is going to be. It sounds like what you need to do is implement a better process so that there’s some incentives there to maintain and keep the accounts and that should be
just as aggressive in my mind as to get the account or close to the same. Right. And so if, if you’re getting resentment because I’m paying you to get these accounts and you’re losing them, well I think some of that’s all, you’ve got to look at yourself in the mirror and say, well how can I change the processes and the policies so that I’m incentivizing you just as much to provide good customer service as good marketing. So step one we would have to say is one, meet the person and see where this resentment is coming from. Meet the person and you know, find out a win win if possible. But step two is change the compensation plan is what you’re saying was changed the compensation plan to incentivize keeping a client pay. You’re prepaying them to keep you happy. I mean if that’s where your resentment is coming from people losing these accounts, maybe there’s something in your pay practices where you’re only incentivizing them to bring the business in and not to keep it maintain it.
Am I going to, am I going to get a holiday sled this year? I have, you know, we’re looking at what are our gifts for special business conference clients that clay Clark are going to believe. I’m just saying, I mean I, I feel like I need a story was okay, tell me the vetting process cause you winters and King give some great client retention gifts. You guys have, this last year was a sled or a couple years ago it was a sled. Yes. And on that sled had fine chocolates. It was good stuff. Wife approved chocolates. Unbelievable. No, no because my wife won’t touch it unless it’s high quality. Then it was just like you were reading her Christmas list and then here’s, here’s the issue. Okay. She opens up her gifts and she says this isn’t as good as what West gives us. Oh no, she didn’t say that. But that’s how, that’s how I feel sometimes.
So you got this great gift. You got th th the caramel corn in there. You got the organic chocolate. I think they had chocolate covered strawberries in there. And I’m thinking to myself, uh, is it my anniversary? Did I forget to give her a gift and whiskey my wife a gift for me? I’m thinking, but those are some great gifts. So please explain to me what’s the vetting process? Do you guys, you know, how do you determine, did you guys do great client retention gifts? We’ve got the clients are very important. I mean, you work really hard to establish that relationship initially, right? I mean, good business conerence clients don’t just come along every day and it’s just as important to keep those clients as it is to go get new ones. Um, and so it’s just really being, again, grateful. We’re grateful that you choose us.
You know, a heart of gratitude from our part saying we appreciate you out of all the people you could pick that you pick us to let us serve. You know, I, I’m not asking for hard numbers, I’m just asking, do you get incentivized to retain clients? Is it in your benefit to keep them? It is. Yes. It’s in, it’s interesting the firm’s benefit to cute clients because there’s a certain acquisition cost to go get a new one every time you lose a business conference client, you’re costing yourself money. Absolutely. That is a huge idea that somebody should be thinking about today. Now, uh, to our listener here, ms listener, if for some reason I don’t understand the entirety of your question and I am getting something wrong, I would encourage to reach out to us to info at info at thrive time, show.com info at thrive time, show.com with even more detail and we’ll be happy to dive into answering your question with even more detail.
But now it is time to answer yet another question from another great thriver. But before we do that, we’ve got to end this show with a boom so we can transition into another show that we will end with a boom. Josh, Josh Wilson. Are you ready to end with a boom? I’m ready. West Carter, are you ready to in the show with the boom? Can you ready? John, are you psychologically and physiologically prepared to end the show with a BU, BU, BU, BU, BU I’m more ready than West is ready. Ooh, Whoa. A little one-upsmanship. Here we go.
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