One of the most important things necessary, if you want to build an enduring great company, is a process that draws people in like a magnet so that the best people really want to work for you.
We do this well in the marketing side of our businesses, bringing in customers, yet we don’t do the same when it comes to attracting the right people.
This second week talking about the People Magnet Machine, Kevin and Brad answer a range of questions about the People Magnet Machine and how to attract and retain the best people, like a magnet!
The People Magnet Machine
Episode 55 – The Growth Whisperers
The Growth Whisperers is a weekly podcast hosted by Brad Giles and Kevin Lawrence two advisors to mid-market businesses, one Australian, one Canadian, who each work with CEOs and Leadership Teams across the world with a mission to build enduring, great companies. Each weekly episode covers interesting situations and questions from the world of strategic planning, leadership development, talent and hiring in high growth entrepreneurial companies where real results matter.
Kevin Lawrence 00:12
Welcome to the growth whispers podcast where everything that Brad and I talk about that’s Kevin and Brad. Everything that we talk about is about building enduring great companies. That’s companies where the leader, the CEO, President, whatever you want to call him or her, and the team build a company that lasts for generations and does incredible things on this wonderful planet of ours. Joined today, as always, with Brad Giles, my co host, Brad, how you doing today?
Brad Giles 00:41
I’m doing lovely today. Really well. Lovely Autumn in Perth, a lovely time of year. And things are good. I’m pretty happy and comfortable. I’m pretty awesome
Kevin Lawrence 00:57
and lovely. That’s just such a sweet term. Almost some a little bit of British in there. Just as a nice word. I’d say I’m doing pretty good today to the sun is out in Vancouver. And let me tell you, it feels like we’re in the middle of summer. It’s April, and it was 24 degrees today. Well, so this weekend, I got to get outside, got out on my motorcycle got out in the car with the top down. And it’s just like having just absolutely amazing the whole city is out even walking by the beach, or we’re driving by the beach, actually. And you all the takeout restaurants, the biggest lines I’ve seen, it’s like, you know, everyone is out soaking it up. And it feels awesome. So today, what are we? Well, we’ll talk about the word of the day, first of all, and then we’ll get into today. So Brad, what’s your word of the day or your phrase of the day?
Brad Giles 01:55
Look, it’s people today, and specifically people because our city went to 100% venue capacity, which means that on Thursday, I went to an actual real live concert with the performer called Missy Higgins, which was fantastic. Fantastic just to be out, you know, amongst people live music. And then on Friday, I went to a football game with 60,000 other people that were at 100% capacity at a local venue here. So it’s just people is my word for the day.
Kevin Lawrence 02:37
And how does it feel to be in a crowd with that many people? I it’s been a long time for me.
Brad Giles 02:43
Yeah, it’s lovely. It’s we’ve had a long time building up to it. So we started I think, like 20% and went to 50% and 70%. And it really is feeling quite familiar, or back to normal, in a sense. So that didn’t feel too strange. But, you know, I’m in an area which let’s just say it’s a it’s like a box area. So there’s not as many people and then we did go down, you know, to the front row area to have a look. And it was absolutely jam packed full of people and no one had a mask, of course not one person that I saw. So yeah, that was it. It was a little bit strange to be in such a crowded environment again, but good.
Kevin Lawrence 03:40
Awesome. Well, my phrase of the day is vitamin D. And I think that’s the one you get from the sun. Pretty sure it’s the one you get from the sun. And it’s just amazing how spectacular and for those of you that aren’t from Vancouver would know that we get a lot of cloud and rain here. And we do get the summers can be beautiful, but at the offseason could be a little gray. And the amount is looking out and just seeing how beautiful it is out there. It’s just it’s soul-lifting and inspiring and it feels great. And you can see the whole place comes alive. I mean, more people are out than ever so vitamin D in the value of it. I used to get a lot more of it when I would trawling worked in the Middle East for years and a lot of time in California is no time in Hawaii and lots of other places nevermind vacations. And so getting in our in my hometown feels darn good, and I’m very grateful for it. So speaking about people in vitamins, what are we talking about today? Brad? What is the show about today?
Brad Giles 04:46
Yeah, we’ve got a different episode today. So quite a break from the norm. Often we’re talking about one subject and how do you solve that subject but we introduced this concept The people magnet machine. Previously, we’ve spoken about that a couple of times. And we’ve had about a dozen questions about that, that we’ve we’ve brought together to try to answer today. So, yeah, we’re talking about what does it mean to build a people magnet machine?
Kevin Lawrence 05:24
Yeah, perfect. And we’re gonna go through these questions. And we’re both gonna kind of share our perspectives on them to give some other ideas and context for people that are interested. I mean, I hope you’re interested in building a people magnet machine. Because, you know, if you want to build an enduring great company, you need lots of great people to make that happen. And people make our lives wonderful. Or the opposite. So let’s, let’s jump in Brad.
Brad Giles 05:52
Okay, question number one. Why do you believe as you say, you can’t build an enduring great business without great people? Why do you believe that you can’t build an enduring great business without great people, Kevin? Well, you know, you actually might be able to,
Kevin Lawrence 06:14
or at least you can build an enduring, okay, business, you could think there is a chance, you know, and we’re not about, you know, it’s like, if we were gamblers, we’d be card counters, ie, we’d want to put the odds in our own favor. I’m not a gambler. I’m not a card counter. But, but the idea is, is you there’s a slight chance, you could, but the odds are dramatically against you, because good people build good or mediocre companies, because they’re wiring, great people have the great thinking, and the great skills and the great execution to build a great company. So it’s very difficult. There’s always exceptions, but it’s very, very unlikely, because what happens is a company gets filled with good people. And then more mediocrity starts to creep in and more bureaucracy creeps in. And the organization just gradually fades. And then they get bought out, or something else happens. They’re not along for another round for the long time, or they’re not a leader for the learner long term. So I’ll say like, because, you know, generally
Kevin Lawrence 07:23
you kind of need to, and because those great people are continue to do the things to make the company continue to be great. And to be around. Brad, what would you do?
Brad Giles 07:37
what i love that you said there is that the odds are dramatically stacked against you. And, we’re both great fans of the work by Jim Collins, and in the work that he’s done. It’s simply a numbers game, if you don’t understand your values, if you don’t understand what high performance looks like, if you don’t hold people to higher standards, if you don’t do all of the work, and you kind of Bumble along and you might be good. The data says that you’d have a much lower chance of enduring on sticking around for the long term. And you might be bought out. So yeah, so I think in answer to the question, you can’t do it, because that’s what the research tells us. And if you want to outlast the competition, if you don’t want to be bought out, if you want to survive for the long term, you’re going to have to surround yourself with great people. The only other point about that is that you spend a lot of time working on repairing the damage that is done by mediocre people, you spend a lot of time Yeah, you spend a lot of time working, not on the good parts of the business. But on the bad parts. How can we solve the fact you know, ultimately, that we haven’t got great people in these seats?
Kevin Lawrence 09:06
Yeah, and you end up spending more time managing down or overseeing stuff you don’t have to do with great people. It’s as soon as consumes more your time as a leader, and you’re less likely to focus on the forward looking things that will make your company stronger in the future is you’re stuck in a day to day because your people aren’t great. The other thing to think about is if in doubt, look to professional sports, professional sports, put an exorbitant amount of energy into making sure that they have the best people period. And they have massive systems for the best people and people aren’t performing at their best they don’t play the game, or they don’t even stay on that top team and they get pushed down. So it’s not rocket science, but that’s enduring great, like an enduring great sports franchise. Alright, let’s go on to number two. What do you mean by a people magnet machine and you’re kinda kind of had a flashes that was big as reading that bright of, of, you know, Scooby Doo and the Mystery Machine. Did you ever Yes. Yeah, that’s hilarious. So Scooby Doo was a hilarious cartoon a group watch, you know, probably too much growing up as a kid, they had their van called the Mystery Machine. So we’re not, it’s not a mystery machine. We’re not hiding all of our people in the back of the van. And goblins aren’t going to come out and be in the haunted house, like there always seemed to be in Scooby Doo. What we’re talking about is, is a company that continually attracts awesome people to it, the best want to work there. And some of the best are also developed there. It’s not just about hiring great people. It’s also developing. So imagine a bunch of cogs in a machine. And one of them brings in new people that become great. Another one brings in great people already into the existing system. And there’s this ecosystem of awesome this. So it’s got a great big magnet to attract people towards it. And it’s a machine that makes people better.
Brad Giles 11:14
Yeah. And the only thing I’d add to that is, if you think about a business as being a machine, and I’ve kind of said before, a few times that this is a machine that spits out $100 bills, okay? If you make it work that way. Now, some Unfortunately, some businesses that people build, you need to put $100 bills into it, you just need to keep putting them in, and it never gives you anything back there, to be honest, is that unfortunately, lose money. Well, ideally, we’re making a machine that spits out $100 bills consistently. And it’s all the work that we do that gets that to happen. So we think about the concept of the business as being a machine that people working. We want it to be a machine that attracts exactly what you said, a machine that attracts people, but not just attracts people. It’s like a magnet, they can’t help but be drawn towards it. You get two magnets and try to pull them apart. You can’t do it. It’s it’s a magnet, like attraction.
Kevin Lawrence 12:16
Exact so it pulls them there and it keeps them there. And that is perfect. And by the way, Brett could Can I request that we build ones that have $1,000 bills? Maybe 100? I prefer the $1,000 bill machine than the $100. Bill.
Brad Giles 12:29
If you can get if you got Zimbabwe, you can have one that makes a $1 billion bill. Unfortunately, yeah, it doesn’t last that long. Yeah. So that’s what we that’s what we’re saying you can’t build an enduring business unless in some form, you build a people magnet machine, because you’re not going to be able to attract and retain great people. Let’s go on to number three, you recommend that employers share their greatness using a story? Define a greatness story? And can you give us an example? Yeah.
Kevin Lawrence 13:08
Now why would you want to let people know the awesome stuff that you’re doing? I mean, come on. That’s just craziness. Yes, of course, we want to share those stories. And, you know, it’s interesting, I have seen so many different versions. And it depends on the culture of the company. You know, some organizations are very humble, and many are humble, humble, in a way where they don’t like to talk about themselves, right?
Brad Giles 13:34
Kevin Lawrence 13:34
Others still have humble leaders, but they have a strong PR machine or a machine of, of telling the story. So I’m not saying it’s not about humility. But there’s, there’s lots of great examples of what people do. And if you would look at unfortunately, he’s no longer with us. But you know, Tony Shea, built an amazing culture at Zappos. And not only did a write an excellent book on it, called Delivering Happiness, he would do tours of their place of or of their offices, which are wild because, you know, people had lots of autonomy to how they decorated their offices, they had a culture of fun and engagement, which transferred through to their, to their customers. He spoke about it, you know, I’ve been at conferences where Tony spoke and shared about what they did so, so so he has done an amazing, amazing, amazing job. What are some other ones? I mean, and there’s many more, but that’s what that is one that was, you know, very impactful and, and he taught a lot of people about that a lot through what he was doing. How about yourself bribery?
Brad Giles 14:47
Yeah, I did the tour of Zappos on a quick note in Las Vegas when we were there, and it was just a fantastic insight into happiness, but to the question well, I you I think that it’s a bit like brushing your teeth. Okay. And this is you need to always help people to understand the greatness through stories. And we connect that to core values and core purpose. So, you know, one of the exercises I do in quarterly workshops that I run with teams and annual workshops is asked the question, so can you tell me something great, something great that someone has recently done in the past quarter or the past month. And someone will always come up with something now which core value or core purpose does that connect to? And so building a rhythm and a habit around those stories, and really a legacy that we can draw upon in the future to help new employees understand the values and the purpose through lived stories.
Kevin Lawrence 15:55
Now, we’ve done just had a meeting last night with one of our client last week and we do strategy meetings, we every quarter do a survey. And we ask people about you know, highlights that people have the great things people did and the core value link to it’s part of our system we do. And we gather those the client last week, they go through and ask for stories about every single core value which they then go back and share with the whole team. Other ones, you know interesting about in terms of sharing the, the macro story. So sharing of the value stories are awesome. And a great part of a culture, another client work with an India ashiana hosing their father on gupt, oom Gupta has started the company and he had passed now the three brothers are running it. But one of the brothers did a whole biography on his father sharing his story. And not only was it a, you know, an act of love and appreciation towards his father, but then the stories of how he built the company are able to stay alive as part of the legacy of the company as well.
Brad Giles 16:57
And that storytelling is so important, because as humans, we connect with stories. You know, before there was Excel spreadsheets before there was computers. Before there was even the written word, the only way we could communicate was by telling and recalling stories. And that’s the way that our brain best Connect lived behaviors and legacy and what to do and what not to do. Don’t go near the big black snake is the story, that big black snake it could cause you harm.
Kevin Lawrence 17:33
Yes, you know, there’s another big black snake in our world these days. And that’s called glass door. It’s where people go to share their stories when they’re not happy with an employer. Some people have made some pretty extreme accusations about Glassdoor and their business model. A lot of people do not like it. I haven’t done enough behind the scenes, but what I know is you need to continue to share your great stories, because there’s often somebody who wants to share bad stories. And you know, and what, whether they’re true or not, is a whole separate conversation. But there are forums out there where people can share the bad ones and as a company and as a brand. And we want to make sure we continue share those great stories, the positive stories, and particularly I find reaching back sometimes into the heritage and founding of the company. Now some of the best brands in the world. I’m a big fan of Porsche as a brand and the way they do things. Yeah, no, they’re understated, amazing, amazing product that they make. But they always reach back into the archives. And they’ll talk about races in the early years or early models, they’ll highlight a car from the 60s that they built and angle back to the kind of, you know, looking back and looking for a point is bringing the heritage of the company into the stories they tell as well.
Brad Giles 18:50
Awesome. So let’s move on number four. Yeah, to parties come to the table in an employment relationship, the employee, and you, the employer. Tell us about what makes an ideal employee and what makes for an ideal employer. Mm hmm. Well, I guess, really, this is Yeah, we really only look from the employer perspective. Because if you want to be an ideal employer, you there’s certainly a you can’t really change who you are, you can’t really change. You can’t become Apple overnight, for example, you can certainly adapt and implement systems to become a better version of what you’re doing and we encourage that at every turn. But specifically, what makes an ideal employee Well, I have written about this extensively in my book made to thrive the way I do and you and I have spoken about this concept before you and I originally started talking about it many years ago. And so my thoughts are you’ve got an ideal customer who’s the customer that you’d like to serve. And you also you have an ideal employee that really comes about by understanding who is the employee that if they were on your bus in your company, they would be most living their own personal hedgehog. Okay? So they would be living their purpose, they would be doing what they’re the best at who is that kind of person so that if you can think about the bus use that you’re the latest standing at the front, looking back at the bus and the whole buses, the company’s HR. And as you looked at all the seats, there are all these people who have who are living their own personal HR. Well, that’s an ideal theoretical model. But yes, the point is, the ideal employee is going to align with your company purpose, okay? And they’re going to also align with what you can be best at, and your kind of brand promise as well. So that, that, in a way, you’ve got the people who absolutely love doing what you are doing and what you can be the best that so yeah, for me, I think that that’s one of the reasons that we spend more time hiring and less time firing, we want to get the best people, but maybe the people who are the best could be the best somewhere else. Kevin, what’s your thoughts?
Kevin Lawrence 21:30
I think is high omega real simple response. And it’s, you know, imagine, you’re just gonna have a great big party, and you got your friends there. And you know, your friends that you naturally get along with, and even the ones you might not have seen for years, but you naturally get along with them, and you can count on them, and you understand what they’re good at and understand what they’re not. Well, that’s kind of like an ideal play there. First of all, they’re the people you’d want at the party. They’re, they naturally get along with all of your friends, as as kind of a proxy for the rest of your team. They’re really good at what they do. And you have a good sense of what they do and what they don’t. And
Brad Giles 22:14
that’s really all it is. Because you know,
Kevin Lawrence 22:15
a great team is a collection of people who are all weird in a similar way. They’re all on a similar wavelength. And the ideal employee naturally fits in with what you need. And that’s hard to do. And that’s why like he said, we spent a lot of time defining clearly what is the job? What is the excellence required in the human to thrive in this particular role. And then what’s all the other stuff around it that are that is needed. So for example, you’re hiring a CFO right now helping to hire a CFO for one of our clients. He is an outstanding entrepreneur, you know, serial entrepreneur, you know, driven his hell, spectacular business, like everything about it’s awesome. So this person not only needs to be a spectacular CFO, able to drive a very technical and compliance oriented back into the company, but they got to be able to work with our awesome, but very entrepreneurial CEO. Yeah, so the idea of employee It is not about the skill sets, they have a loan that is important, and their experience is important. The personality fit with the CEO is important, but they also have to be able to work with an entrepreneurial CEO. So there’s a lot of variables at play. So the question is that situational, and it’s worth time and energy to figure it out. And I’ve seen so many times, were someone that could have been ideal, some worlds can’t, because of the company, like I’ve seen, even, you know, I go to executives, there’s executives who can report to an entrepreneurial CEO. And then there’s those that count those that can’t, or almost might be able to be an executive somewhere else. But they probably would need to be a notch down or a director of that company. So anyway, natural fit, great for the party, if it metaphorically don’t take a lot of management. And they’re thrilled that they get the opportunity to work with you and you’re thrilled you get the opportunity to work for them without that’s kind of setting the bar pretty high. But that’s what we aim for.
Brad Giles 24:14
Well, that’s it’s ideal. It’s not it is. Yeah, it’s
Kevin Lawrence 24:19
one thing that we do Brad on it, sorry, forgot to say and you mentioned it, I think, but we come up with we call an employee promise. Like what is it that we offer that is different than other rules out there? Because every environment has something different to it. It’s like, like every dish that a chef puts up, hasn’t, you know, they read those nice little descriptions of the dish? Well, every company has a very different environment and culture. So we’ve come up with coming up with two or three major things that say, here’s what you’re going to get here. And that might be different than other places is a way to try and help this process as well. And people either run towards that or away from that. Some cases to
Brad Giles 25:01
Yeah. It’s interesting and that an employee promise does not mean. So we’ve got good pay. We You know, we’ve got health insurance, and we’re going to give you four weeks off per year now, that is definitely not it. Call the
Kevin Lawrence 25:17
job. A good job has all those things. That’s almost every company offers identical things.
Brad Giles 25:22
Yeah. Yeah. Okay. So give me
Kevin Lawrence 25:25
a good example. Give an example company. Yeah. And theirs was, you get a lot of autonomy. lots of opportunities to grow. And you get to work with an amazing group of high performers. So yeah, high performing colleagues, autonomy, opportunities to learn and grow.
Brad Giles 25:51
And if that was explained to you during the, during the interview process, it’s drawing the candidate like a magnet, which is exactly what we will zapper. Exactly or
Kevin Lawrence 26:06
repelling them like a magnet if the polarization is backwards?
Brad Giles 26:11
Kevin Lawrence 26:13
That company, for example, at one point had 91% A players.
Brad Giles 26:18
Kevin Lawrence 26:18
And so if you were not a high, strong, high performer, you would get crushed like trampled. Yeah. And they’re making it very clear if you’re awesome. Come play with us.
Brad Giles 26:30
So in my book made to thrive, I talk about Southwest Airlines, employee promise, and I looked quite deeply into their job adverts and what they do and it’s, it’s, it’s subvert like it’s not over, it’s kind of between the lines, but it’s lots of love for our team. It’s lots of fun. And it’s a collaborative team environment, like you can count on your team members to help you out. And that’s the secret sauce that helps them to deliver their brand promise, which is lots of love. Lots of flights, and lots of fun. So that’s the kind of connection thrust. So let’s move on to number five. How do you recommend employers go about marketing to attract a players? Interesting question, how do you go? How do you recommend employers go about marketing to attract a players? Well, to answer
Kevin Lawrence 27:29
we first got to start with how do we normally find our a players?
Brad Giles 27:34
And before that, do you know what I think AI players don’t respond to adverts because they’re not in the market, because they’re highly likely, they’re highly in demand, you know, most AI players are going to be poached or are going to be headhunter, rather than responding to a job advert. And that’s a really important Cornerstone to begin this conversation with
Kevin Lawrence 27:59
it is and that’s and I was going a different road to the same place, Brad, which is we are looking at where they come from. Normally, many of them come from relationships, right, where we have known them or other people on the team have known them.
Brad Giles 28:13
Kevin Lawrence 28:14
And so if we know that the source, you’ll always go back and look at where your best people come from same with your customers. And if you go back and trace your steps, you’ll find a lot of it came from relate a lot of them for most companies, maybe yours is different, right. And so it’s some relationship, someone worked with them before often or went to school with them or knew them. And if that’s the case, then we need to grease that channel or work that channel or leverage that channel of the relationships. And for most companies, what we try and it’s hard is to get both the CEO and the key leaders to continually reach out to their networks. Yes, building a bench of interested people that are ready to come in at some time. But it’s no different than prospecting for new clients. It’s like prospecting for new employees. The challenge is, most people don’t put the energy into it. Right. And as a result, so when when when they don’t have anything in a prospect system, then they got to spend a lot of time and energy quickly going and trying to find someone and then you end up spending a lot of money to get a recruiter to go and do that for you because the recruiter already has a warm network generally. And but if we’re cold, it’s very, very challenging to do so. Yeah. It’s tapping into relationships and trying to find ways to get the team to put time into that proactively.
Brad Giles 29:39
There’s no substitute for a virtual bench. It’s as simple as that. There’s no substitute for marketing is important, I think in advocating the employee promise in advocating Yeah, this is what we stand for. And so you and I’ve mentioned before I used to own one of the businesses I owned was The job board, okay, so like monster.com, or seek if you’re Australian. And I got to see virtually the same job advert almost the same words, okay. And the traffic was the same, everything was the same. But the amount of people that clicked on the advert because of the employer brand was like 100 times different, it was remarkable. And it all comes back to what is your employer brand. Now, you may think, oh, one was a big company, and one was a small company. That’s not what I’m talking about. It was, you could have companies that were, let’s say, multinational, and known, it was the employer brand off the bat that was making a substantial difference. So having a establishing and bought employer brand is one thing. Yeah. But equally, there’s no substitute for building an employer, virtual, so employee virtual bench or bench. And that means we’ve it’s the hard work, which means we don’t have to rely as much on recruiters, as you said,
Kevin Lawrence 31:10
Okay, so and other things that we see clients do, people do put a lot of energy, those that recruit from universities, do put a lot of energy into recruiting in that and building relationships at the schools can be a great strategy if you’re bringing in new recruits. And people will dedicate a lot of resources to that. And on the employer brand, like anything, you know, a company we work with will spend a lot of time and energy on LinkedIn, sharing good content, building their networks, and even LinkedIn as an example, if they’re recruiting a higher level executive piece, as were their undoing some of their employer brand stuff or other platforms. And the other final piece, it’s a little controversial. But the other thing that companies will do is the best places to work or great places to work surveys Now, look at those consultants that help you win it. So the system can be gamed, and it’s a bit of a vanity contest. But it does get you to do things and it shows your desire to be a great place to work. And I have those things I love about that and things I don’t, you know, and there’s, there’s pros and cons, but it is something that gives almost an endorsement of potential greatness, that can also help candidates feel more comfortable with you because it shows you have an interest in or a dedication to your employees. And again, I guess my, my own concerns about it. But generally, it’s good marketing, let’s just say that. It looks really good. It looks good to candidates.
Brad Giles 32:44
And we’ve really drifted into question six, which is a good thing, which is, and I’m going to continue on what you said, How does a company’s brand in the marketplace figure into recruiting? So you’ve mentioned great place to work one of the teams that I work with Kristen, who, you know, they’ve won the Best Place to Work or great place to work, I should say, for the past 10 years in a row. An amazing achievement. And, you know, like, it is a great place to work. There’s such a caring group of people, they always begin their emails, for example, with Kevin, how are you today? And it’s simple, but there’s these tie in that kind of voice Yeah, and I don’t know how you do a voice on an email, but they seem to do it. I got it. Yeah. It’s just a caring place to work. Awesome. Yes. Awesome. They’re a physio therapy company called the physio CO in Melbourne. And yeah, they, they just, yeah, I’ve been working with probably six years, I think now maybe seven years and they’re employer brand within the market, they always need to work on it. But what it means like that magnet and why we’re using that magnet analogy, because in physio therapy, you’ve got one group of people who were like, here’s what I want to do. I want to become a sports physio therapist, and I want to be on the sideline for the athletes when they come off and do all this stuff. And like, I love competitiveness. And then there’s another person who is more like, yeah, I want to help people to help hurdler like and so they’ve got that magnet north and south attracting the people who are the latter. The athletes because they specialize in aged care, physiotherapy, that’s their market now.
Kevin Lawrence 34:41
Right, which is a special market or different market.
Brad Giles 34:45
Yeah. So that’s my thoughts on that. Any other thoughts? Awesome.
Kevin Lawrence 34:50
No, I think it’s important and going into the budget for you know, marketing these things. Yeah. Every company is different. But investing in things like that are helpful and everyone will be different. But you got to put it no different than what I’ve seen over the years. You there’s energy you put into your marketing for customers, if you’re going to be a great company, you have to put energy into your marketing for employees to it’s not just a side of the desk thing. They both need systems that help bring great talent to the table, or great opportunities to the table.
Brad Giles 35:26
Yeah, so that was to the question, should a company budget for investing in marketing to attract new talent? How much might that cost? Yeah, from
Kevin Lawrence 35:35
zero to a billion, I don’t know, depends on how many people but it’s important. And again, it depends on the scale of your company.
Brad Giles 35:44
But how much does attrition cost? How much does every time you lose someone we’ve, you know, the stats are something like for frontline employee, because one time their salary to replace them by the time you hire, recruit, train onboard all of this stuff to get them back up to speed. So he you know, then you can go up to I guess, 10 or 15 times for an executive level role can be, you know,
Kevin Lawrence 36:13
what, it’s 30. Yeah, and I don’t have a stat on what it is. But it needs, if you’re going to continue to add more people, somehow you’re going to do it through money, or through labor, or through paying recruiters to do it. Either way, somehow, you got to do it. And it’s an important part of your growth engine, because people’s growth is usually limited by their access to talent. That’s what we find is access to great talent is what limits their growth, or limits their sanity, because the stress kicks in when they don’t have enough of the right people.
Brad Giles 36:45
Yeah. So if you’re not getting enough, a player’s applying, not withstanding what we’ve already said about the virtual bench, and you’ve got an attrition rate that is very expensive. You know, then that’s where you can begin to think, well, if we were to reduce our return our attrition rate, like rather than having everyone leave after 14 months, we could get them to leave after 12 months. That’s where you can begin to develop your budget pool from.
Kevin Lawrence 37:15
Yep, I think and you’re saying leaving after 12 months is less desirable? Okay, good. I got that. I got it backwards. Okay, perfect. So yes, we’ve suddenly been in 14 months, we will have to leave at 24 months, stay longer if you’re good. If you’re good. Please stay longer. Okay. Number eight. Once an employee is hired onboarding takes place, We sure hope so. Then development, that would be awesome. Describe your vision about how companies might best onboard their new hires. Now, Brad, I know you’re working on a book around this, I’ll share a couple things first, from the simple level that we see. First of all, when you onboard someone to critical things, I see one, have a plan. And it’s more than just meet Sally and in HR to get your paperwork done. So you get a paycheck, like, have a serious plan. And I know you can talk to that, you know, very, very well. But a serious plan over a long period of time, which I know you’ve taught you’re doing finding in research. So a real detailed plan and number to make sure that they don’t feel the pressure to do too much too fast. Now, I get most involved in the onboarding a senior execs. And when they come on, I have the same talk with them every time it’s like, Hey, I’m so excited, you’re able to join this great company that I get to work with. Remember, there’s a lot going on in this place. And it’ll take a while to really understand it. So my expectation is the coach to the company, is you take the first three months, and you get to understand the business, understand the nuances, get to know the relationships, get to know the dynamics truly understand it, get in there, get your hands dirty, help out as much as you can. But don’t expect we don’t expect you to pull a rabbit out of the hat. We don’t expect you to go and revolutionize the entire company in the first few months Actually, we don’t want you to, we want you to learn and then put together a plan of what you would do. But when people come in to try too hard to do too much too fast, it almost always ends up in a nightmare, because they have beautiful intent and they have understanding where they come from, but they haven’t learned this place yet. So my summary is a very clear plan of all the activities and not too much too fast. Tell them just to calm down, and that we don’t need them to turn the world upside down in 90 days actually prefer they don’t
Brad Giles 39:49
agree with everything that you’ve said there. A couple of quick points because I could talk about this for hours. Because I’m so heavily invested in writing this book at the moment. Number one 86% of companies have a onboarding process that is 14 days or less, okay. And the magic that comes from onboarding happens after 30 days. So the real ramp up in, in qualitative, impactful output happens between 30 and 60 days. And my advocation is that a onboarding process should be 90 days. And I’m going to very, very specific and particular process around that. The only other thing that I’d say to close that out without having a podcast about onboarding, is that onboarding is not training. onboarding is not induction. onboarding is about getting a person to understand three things, which is understanding the culture of the business, understanding the technical and process expectations of the business. And third is understanding the managers expectations, how their manager Dysport defines success of that individual’s role. Yeah, so that’s probably what I would say about onboarding for a few key points there. So let’s move on.
Kevin Lawrence 41:21
And let’s make sure we do a full episode on a Brad, it’s a very important topic. Okay, go ahead, please,
Brad Giles 41:27
a note on how I should employ, develop and invest in their people.
Kevin Lawrence 41:35
Well, the first thing they should decide is whether they should develop and invest in that person or not. Not everyone should be developed or invested in if you don’t think you’re going to get a return. Because sometimes we’ve got a wrong person, either in that job, or they’re actually they shouldn’t even be in your company, they’re not a fit. So make sure you develop the one make sure first that this person is someone that you want to truly develop, or maybe you should be doing something different. So that’s the first question. Jim Collins has an amazing seven questions to help you make that decision. Look up Jim seven questions of whether you should develop or replace. But so that is, that is the first thing, but generally, should we of course, you should develop an invest in people, you just got to be looking for a return on that investment. And in every case, it’s not, but it’s almost a minimum requirement, unfortunately. And it’s almost like if you buy, whether it’s a jet, or a boat, or any piece of equipment, it requires maintenance. And in the purchase of things like boats and jets. There’s a calculation and, you know, rough numbers, but it’s about 5% of the initial purchase value is required for annual maintenance period. So same thing kind of goes true for humans. There’s a minimum amount of we’ll call it learning and development that we require to stay at our best. And there’s the salary is a cost. But there’s so I think that’s very, I think it’s very important. And, Brad, I know you have lots of thoughts on this.
Brad Giles 43:19
Yeah. Very similar. So how much? So first of all, how should employers develop and invest in their people? Well, number one said budget, and you just said 5% of salary costs. Great. So it doesn’t need to be 5%. But pick a number, allocate that as a budget line, item number one, limit number two, who is accountable for that? All right, people and culture manager or it’s the managing director, or I don’t know how someone has to be accountable for that. And then they’ve got a budget, and we’ve got someone who’s accountable. And then the third part is where is everybody at in their growth curve. So Bob, maybe at a different learning and development requirement level than Jenny, or whoever it is. And so each person has an has a next step in their career that that person who is accountable for the, for the budget pool, knows and is working alongside them, and ideally, interacting with their manager as well. And that’s how they’re allocating the budget through internal or external learning and development curriculum.
Kevin Lawrence 44:30
And don’t forget yourself. Even the CEO and the senior leaders, they also the I actually think they need it as much as or more. And if you might, in theory, if you had a 5% budget for training and development 5% of salaries as a benchmark based on that’s based on airplanes and boats, it’s not based on people that haven’t done the math and companies so you know, there’ll be a better source for that. But it might be that there’s 2% that goes to the front line or 3% or 4%. And on your executives, actually, this, this, I’m talking myself out of a bribe, because salaries go up as you get closer to the CEO. So the 5% would allow more dollars for the executives, because it’s 5% of a bigger number. So I’m just I was thought it might be more percentage allocation, but the allocation might not be. But that’s those CEOs and executives needed. And we often when we start working with companies, to get them onto a path of greater newness, or back on the path of greatness is that the executives are antsy or under educated or underdeveloped themselves.
Brad Giles 45:32
And that really leads into the next question number 10. Should there be a formal leadership development program? Should you use mentors?
Kevin Lawrence 45:42
Well, let’s split that up, then there’s a built in program, the answer is, yeah. Now do you run it internally? Or do you outsource? It is one thing at a certain scale, lots of companies build their own universities. But most of the times until you get into the many hundreds of employees, many hundreds, you’re better off outsourcing and having someone else do it, but you don’t have enough the critical mass running leadership education programs that we do, we do a program that we have provided an open source solution to many of our clients. But that’s a lot of work. Now, for every hour in the room, you got 10 hours of prep, at least. Yes. And that assumes you already know the content. So yeah, so should you do it? Absolutely. Um, but you know, at a certain size, you might internalize it. And in my view as mentors, yeah, mentors are magic. Just magical. There are people who can provide guidance, they have the been there done that, right, and guidance and wisdom, we encourage our executives to get mentors all the time. Same with the CEOs not that we work with. So the answers are Yes. And yes, it’s just a matter of how brandable you are,
Brad Giles 46:59
the only thing I would add to that is in terms of leadership development program, a couple of episodes ago, we spoke about spiraling up where we want everybody in the organization to be spiraling up where they’re getting every month, every quarter, every year, they’re becoming a better version of themselves, for the reason that they can stay ahead of the growth of the business, they can. They you know, as the advisor, Coach, you and I need to stay ahead of the CEO and the business, the CEO needs to stay ahead of the business and the managers or the executives need to stay ahead of the growth of the business broadly as well. So we all need to be continuing to learn as much as we can through that journey. So look, absolutely. Alright, let’s go on to number 11. The cost of replacing an employee can range from one to two or even more times the salary as we spoke about earlier, when you work with a company plagued by her high turnover, how do you go about diagnosing the problem?
Kevin Lawrence 48:04
We know worst of all this the stats we’ve heard like 14 times salary for a wrong person and that’s more for a miss hire someone who hasn’t worked out and done damage which we have seen. But yes, I losing good people. I mean, I if you want to watch me get mad, and I’m pretty fiery to start with. But when we lose a players and the companies we work with, I get angry, and I want answers. And I’m just the coach. They’re not my companies. But I’m although I feel like they’re losing a player as a massive sin and a massive mistake. So you know, it’s a big thing. So, for me more plagued by a high turnover, first of all, because we do quarterly surveys, and we often reach down a couple layers, to test engagement, a couple simple questions to understand what’s going on. It gives us a sense of it. So we already kind of have a clue. Or we can see the trends of what people aren’t happy about, especially when we split them by division. So we get a lot of data on this on an ongoing basis. But the biggest thing is always data. And there’s the data is on two different things. The a players we lost, why do we lose them? Again, it might be through the engagement surveys or exit interviews. We’re a big fan of exit interviews. And sometimes we even do them ourselves for clients when if the HR we don’t think can get the truth. So and then secondly, if they’re losing a bunch of people that aren’t a players, then we either go back into the hiring or the onboarding process I’m excited about new book comes out because of will give it’ll give us more of a benchmark to look at for what to compare their systems to. But we you know, if you’re losing a lot of people that aren’t a player’s which is generally good for a business, but if there’s too many that means there’s a hiring problem, generally a hiring problem. But if the onboarding is broken, broken, you may have people who could be high performers who are not looking like it because the they’re on board. system didn’t serve them.
Brad Giles 50:01
One of the objectives of onboarding, okay, one of the specified objectives is to be confident that we can fire this person within the legally prescribed period of approximately 90 days, depending on your country. So, yeah. You know, it’s like the ripcord on a parachute. Like, we want to know, okay, it’s time to pull. This person’s got to go or Yes, this person is, you know, going to be we’re confident they’re going to be high performing person in the team. So yeah, obviously, it comes back to onboarding. I think that the thing that I’m really interested about in this book is why do people create bad cultures, which is kind of talking about the problem here? So everyone talks about, do you have a bad culture? Have you got a bad culture? Can you diagnose that you’ve got a bad culture? Everyone talks about that. And then we’ve got the antidote to solve that problem. But no one talks about, well, why did bad coaches happen in the first place? And my part of my thesis is, yeah, part of my thesis is that it comes from onboarding like it’s you don’t have we’ve got a onboarding program that’s a week or four days. So yeah, all I can set someone up to win. Yeah. So how do we know the problem? We know that the problem of high turnover is there, because we can see the attrition rate we can see how many people are leaving. And then we kind of dig into departments, is that always one manager or whatever? And then what are we doing on the rowing that’s creating that? So let’s move on to the last one. What are your recommendations for employers to retain their best people.
Kevin Lawrence 51:53
we do a lot, a lot, the first thing is to actually just care. Because a manager should be caring for and understanding their people, their job is to serve their people and help them to do their best work and achieve their goals. So you know, the first thing is to truly take an interest in and care and that takes time, some managers are way too busy. But understanding where they’re at, ask them what they need, you know, so that was a starting concept. You know, one of the ways that we do it is by doing quarterly talent reviews, where we go through all of our key people, and look at where they’re at, and how do we help them to grow and thrive. And in some cases, with a players, they may or may not need to grow, but they definitely need to keep thriving. And sometimes we got to do stuff for them. So we unfortunately get caught up in all the problem people. And our best people often get neglect from lack of attention or lack of energy. And, but we need to be careful that we don’t do that. So care, every quarter really do an evaluation of your team and know what you got to do to sharpen up the people who aren’t performing, but also to really take good care of your A’s. And, you know, the best acronym for it was I heard both Mark Cuban share this with us an event which is kyp know your people, like you got to be in there with him, you got to know what’s going on in their world and what’s good and what’s bad, and what’s stressing them and what they’re up against. So you can assist them. Another CEO, Charles, built a company called Vega, he said something very similar. That was a very successful entrepreneur here in Vancouver, and he came to one of our retreats for a client. And he just said that, you know, with his people that you got to be really close and tight. And you got to understand, you know, what’s going on? And a lot of people don’t, a lot of people aren’t close enough to their people. And that’s, you know, one of the biggest things, I think, because then you’re gonna know what the issues and things are to help them. How will you read? What do we think we’d recommend?
Brad Giles 53:50
Our last episode was the seven hidden reason employees leave. And we spoke about a book by Les Brown and Yep, gee, you know, the last thing, the last thing is pay. Okay, the last reason that people will is paid. So what are all of the other reasons? Like, yeah, go back and have a listen to that episode? Have a look at Lee’s book? It’s fantastic. Yeah. Um, you know, there’s an old saying, which is people, you know, people don’t leave a company, they leave a manager. So, you know, investing in your managers to care, as you said, investing in your culture, making sure that there are leadership development programs and mentors. Like it. This really summarizes a lot of the stuff that we’ve spoken about today and last week, as well.
Kevin Lawrence 54:48
Yeah, and one of the big things, just make sure that you’re setting them up to want to be coming to work or working, doing their work. Yeah. And that sometimes involves as I talk about my book, you know, I call them toxic Ace, no the high performing jerks. Get them out of the damn system. Because the way that you can really lose good people is by keeping bad people because it will drive them bonkers and create a lot of unnecessary stress in their world.
Brad Giles 55:15
Indeed, all right. What a good chapter I found that answering some questions today about one subject that we’d been, we’d been asked. And so let’s move to close. I don’t know that we need to summarize them. I think we’ve kind of we’ve been through them and answer. So with that. Thank you for listening. This has been the growth whispers podcast. I’m Brad Giles and as always joined by Kevin Lawrence, my co host for myself, Brad, you can find me at evolution partners.com.au. And for Kevin, you can find Kevin at Lawrence and co.com. Thank you very much. We look forward to hopefully chatting with you again next week. Enjoy your week.
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