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Podcast Episode 100 - Topgrading: Hire and Keep the Best Talent

Do you know how to source, spot, hire and keep the best talent for your organization?

Topgrading is a hiring methodology from Brad Smart which is designed to provide you with a 90% success rate when hiring and promoting people on your team.

In this week's podcast, Brad Giles and Kevin Lawrence are celebrating the 100th Episode of the Growth Whisperers podcast and discussing Topgrading. Get close to having 90% A-players in your company by consistently by selecting the top 10% of the available candidates at the pay offered for the role.

Brad and Kevin discuss the rigour and discipline of this proven hiring process, that makes all the difference and consistently produces great results.

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EPISODE TRANSCRIPT

Please note that this episode was transcribed using an AI application and may not be 100% grammatically correct – but it will still allow you to scan the episode for key content.

Brad Giles  00:13

Hello, and welcome to the Growth Whisperers where everything that we talk about is building enduring great companies, and everything that you need to do that. I'm Brad Giles. And today, as always, I'm joined by my co host, Kevin Lawrence. Hello, Kevin on this auspicious occasion. How are you today?

Kevin Lawrence  00:34

Yes, happy 100th episode, Brad, it's exciting that, you know, an idea that we had at the beginning stages that pandemic, and we've done it 100 times in a row consistently. Never had a week without an episode, 100 weeks in a row? That's pretty darn impressive.

Brad Giles  00:53

It is. It's 100 weeks, where every week we've spoken about a lot of interesting things. And what a journey, we've covered off so many subjects. And let's be fair, it's like a mini MBA.

Kevin Lawrence  01:15

If you listen to all of these episodes, with all the stuff that we've spoken about, it might be more practical than an MBA, because it's all from hands on small and medium enterprises, you know, in the trenches. Yeah, yeah, there's so much value. Certainly, that even I've obtained from these conversations, just learning. You're talking to me? Yeah. You know, we get a lot of great value back and forth, sharing and learning from each other. It's, it's awesome.

Brad Giles  01:49

Yeah. And that's where it kind of came from the idea originally, because we would go to these conference conferences in the US, and there'd be these amazing conversations. And really, we started thinking, Well, what about if we were able to have these in the public domain, these stories that we keep hearing about these growing businesses, it'd be fantastic.

Kevin Lawrence  02:11

Well, and it has been, so let's dig into our words of the day, and I'm going to start with mine. It's relentless execution, you know, just focusing and getting the work done. And we're getting to 100 episodes. I mean, we're finding times that early in the morning, late at night, to get it done. And, you know, it's the relentless execution is those that show up and get the work done, you generally get rewarded and get a lot of progress. And it's, you know, it's not rocket science, but it's that relentless execution that that really does create the results. Whether it's in work or life or podcast, it doesn't matter. I love it. Yeah, what's your word of day?

Brad Giles  03:03

Mine is a book from Chip and Dan Heath authors you may be aware of, that I'm reading at the moment. It's the power of moments. And it says that there are these moments in our lives that we all remember - a wedding, or a car accident, or an event with our kids or something like that, that we all remember. But why can't we make them curated in our lives or in our businesses, rather than just accidental? So using the power of moments in businesses to create engagement. Now, I don't know how, but I'm looking forward to how you stitch these two together, as always. Maybe I finally got you after 100 episodes.

Kevin Lawrence  03:43

I think it might - I don't know how to put those together. Hopefully, power of moments, relentless execution, relentless execution of amazing moments. I could go with amazing moments, but well how about we move on? Let's get into the topic today. So today, we're talking about the power of Topgrading. And now if I had $1, for every time I said the word Topgrading, it'd be incredible because it's, you know, it is an incredibly, fairly simple but the very, it requires a lot of relentless execution. It's challenging to get the value out of it for most people, but it's a very disciplined process for evaluating human beings. And almost all of our clients use it because it's the best tool we have found to notably strengthen a team and executive team leadership team management team. And it's the best tool that we have found to get a higher hit rate north of a 75% up to 95% hit rate on hiring and promotions to make sure that we get players in the seats. And if you listen to our last Episode Episode 99 about brilliant jerks. It's basically how do we avoid brilliant jerks? Or avoid, you know, unintelligent jerks? Who would be the lower performing version?

Brad Giles  05:18

And what do we do about in the last episode? Absolutely, yeah. And so, top grading is, I guess it was about 15 or 16 years ago, I first came across the idea of Topgrading the concept. And why it's so important, certainly, to me as a concept is that you've got to get the right people, all employees are not equal in the eyes of your company. Now, let's not get into discrimination or anything. But in terms of your values, in terms of your value chain, your value proposition and who you are as a leader, and what you value. All people can't be right for that they can't all be right in that scenario. And therefore, you know, the best people in the market, there is a bit of a war for the top people.

Kevin Lawrence  06:17

If you think about all the different forms of transportation there are. And even if you zoom in on cars, and you look at all the different types of cars there are, and then zoom in on all the different colors of the types of cars, there's so many variables, but yet everyone seems to find a car they like or in some cases, love. Um, and it's the same with people in jobs, everyone is a highly desirable employee somewhere, it just may not be your company. And whether it's about the type of job and our ability to perform, or the culture and how they fit. We're just trying to put the right people into the right seats. That's all that it is. And it's hard. It's really hard, especially if you aren't highly skilled with very precise tools to be able to make those decisions.

Brad Giles  07:09

Yeah, a few episodes ago, we spoke about the barriers to growth, what are the main barriers to grow, then one of those was having leaders who can predict and delegate at the right levels. And, you know, those people are hard to come by, you can't find those people with every job applicant that comes your way. So you need to have an effective filtering mechanism to get to let people in, and to be able to grow your firm as you do grow. So this is, this is a great tool to be able to make sure that you've got a team of a players. And that syncs a massive difference to your firm.

Kevin Lawrence  07:56

So if you want maybe you just touch on a bit of the history on it.

Brad Giles  08:02

Love to. Topgrading. The first thing that people say when they say the book is it's a really thick book, compared to the average business book. And that tends to turn people off. But yes, why is it? Why is it our go-to and why does it matter? So originally, we've got to go back to General Electric, and a guy called Jack Welch, who was the CEO, they're arguably one of the most successful CEOs of all time. And so Jack Welch had a really simple strategy, which was we're going to be number one, or number two, in every market that we operate, or we'll sell that business unit or shut it down. And what he realized is that the only way you can be number one or two, number two, the only way you can really outperform is if you've got great people in and leading those businesses. And when he realized that he needed to find someone who could build a system throughout the whole of General Electric that they could apply to be confident that they would get, let's say, someone who's in the top 10% of available candidates at the pay that they were offering. And that guy that he turned to was a guy called Brad Smart. And Brad Smart successfully did that General Electric creating amazing results. And then he wrote a book called Topgrading about that experience. So that's kind of the background to Topgrading and where it comes from. It's got a very successful pedigree. And that's kind of what appealed certainly me to initially or what made me interested in it, and then to see it consistently work as well.

Kevin Lawrence  09:50

For sure, and for me, I had heard about it but then when I was doing the research for the book called Scaling up. Of the 50 CEOs I interviewed around the world, eight specifically called out Topgrading as the game-changer for their business. More even than the scaling up tools that we're talking about it was the core. Because it basically, they ended up with a team that was three times as strong as they started with, and everything became a heck of a lot easier. So I spent a lot of time learning and master technology. In our firm, we have a number of different people who helped to implement it in companies. Most companies, when you look at A-players in their companies are in at about the 25 to 30%. And, you know, we've had many that crossed into 50 and 60, even a handful that got over 90% A-players now. Sometimes I think maybe I shouldn't even talk about it publicly and just save it for my clients. Seriously, I've had that internal conflict. And I'm a person who loves to share, but I'm like, our clients use it. And and and most people do not have the discipline to do it. Most people end up with their fast and loose hiring processes. And they'll stick around their 25 to 30% of the players, or they will have incredible turnover because they can't get the right people, right. So let's talk about the idea. The idea is, is to get close to that 90% A-player's by consistently just picking the top 10% of the available candidates now. It's the top 10% available candidates at the pay that you're offering for the role. And if you're hiring an accounting role, that's paying $65,000 a year, and there's someone available at 120. That's not what we're talking about, it's about the top person at the pace that you're offering in the market. So you're, you're basically learning to skim your version of the cream off the top of the talent pool.

Brad Giles  12:14

And that's so important because that's when many leadership team members and CEOs get hung up is is they think that Topgrading is about getting the top 10% of available candidates, they immediately go to, we can't afford to pay the same amount as whoever they see as being an expensive candidate in their industry. But it's about the pay that you provide.

Kevin Lawrence  12:40

Right. So for example, we just hired internally in our firm, another admin person to support our advisors. And we went through two rounds, In the first round, we didn't find someone that we felt was good enough, and we just hired someone last week, which is really exciting. But we use the full methodology. So at that role at the pay that we're offering, we're just looking for the best talent we can get. And being pickier about it and more scientific in the evaluation. So it's, it's a very basic level. So at the base level, the base tool, something called the talent review, which we've developed and enhanced to be even more robust. But when you go through all of your top talents, your most important roles in your company, every quarter, you do a mini evaluation. And you do work thinking about how can we help them thrive more now? If they're in a how do we help them sustain that level of performance? If they're a B, how do they become an A? If there's someone with potential? How do we help them get promoted to their next role? Or how do we develop their successor? And if they're not meeting the mark, either if they don't fit the culture? Or they're not hitting their performance? How do we help them to get there? And if we've done everything we can, and it's the end of the road? How do we create a graceful exit quickly. But this discipline of every 90 days, reviewing your talent making the next batch of choices for the amazing ones, and the ones that need help, is the core discipline, because people talk about their people being their greatest asset. But they don't ever do a portfolio review. Or if they do, it's once a year and it's weak. This is a key activity that the CEO and executive are involved in. And you know, if it's a company, if we are a company of, you know, 300 people, the CEO and executive are looking at the top 30 or 50, every 90 days it's part of their greatest value add is making sure the right things are happening with those key people.

Brad Giles  14:46

And it can be confronting first time you do it. When you look at it. You go whoa, we've got 30% C players. We've got 30% of people who aren't aligned with our values and they're not productive in the role. And even worse, they've been hanging around for a few years, it can be really confronting, because the next question becomes, so what are you going to do about it? And then when you rinse and repeat that over a quarter, several quarters, several years, you get, you can get to the point where if you've taken action on it, if you've hired correctly, where you've got a high percentage of players in your team.

Kevin Lawrence  15:26

And you're brutally building discipline into the organization, because that's not a surprise that that person is a low performer. Yeah. And their manager has been putting up with low performance. So a manager's job is either help people to grow and be effective in their role, look for a different role that can be effective in or move them out. But it's so in many ways, it's a management discipline to pay attention to an act on a thing. So that's the base level. The next level is scorecards, yes. A very detailed, almost mathematical job description. And it's not all this bla bla bla word stuff that's typical. How do you measure someone against words, it's hard, it comes up with clear outcomes or goals that that role needs to achieve, obviously, looking at them through the lens of core values, and then looking at them on 50 different competencies. And, and some jobs, some of those competencies are more important than others, but deciding what's the minimum level of skill they need on these different competencies to be successful in the role. And that this, this, this takes a few hours for each role to figure this out, right. But you're so clear on what they need to produce, how they need to fit the culture, and then the competencies they need to have. So then when you're assessing people, you're assessing against this really detailed scorecard versus, you know, seven paragraphs of words. And it's like, if we're gonna go and build the Golden Gate Bridge, you could take the sketch that a kid did with their crayon, and then send the crew to build it, they're gonna fail. Yeah, or we get an engineer and architect to do the drawing an engineer to do the drawings, the architecture, drawings, that engineer to make sure everything is sound, and then give it to the crew to build. All we're doing is getting engineered drawings for a job instead of a child's crayon scratch. And then letting the hiring people go assess versus the engineer's drawings, which are just much, much more clear and specific.

Brad Giles  17:39

Once you've hired against a job scorecard, you are so clear that it does appear mathematical. And then you go back and you look at other firms, job descriptions, or other firms, hiring adverts, and it does look like a child's crayon sketch it really, really because it is yeah, you just go what are all the words that are mumbo jumbo sort of mashed together, what do they miss, you copy and paste something of something else that you thought sounded cute. And it's there's no real tangible, measuring stick.

Kevin Lawrence  18:18

So I'll give you an example. We hired a head of sales for an automotive group that we do a bunch of work with. Now, it's probably eight years ago, the guy we hired, I loved him as a human being he was awesome. And again, this is, you know, early days and working with this client. The challenge, automotive is an hourly based sale. It's very, very fast, very, very tactical, but by the sales are made about a 60 minute, sometimes 24-hour sales process. The guy that we hired, was that, you know, had run sales, and then was the the the lean improvement leader for a company that sold something that was 10 times the price and had an 18-month sales cycle. Yeah, like all sales leaders are not created equally. And someone that is has the skills to do an 18 month high ticket sales cycle business to business, versus a business to consumer transaction that takes 60 to 90 maybe, you know, 24 hours, he would fail before he was hired. He failed before he entered the building because he just didn't do it. Although he wasn't driven drove sales and process improvement. It was not the same type of environment. He was not set up to win. And it's like taking a professional golfer and then throwing them into the national National Basketball Association to play basketball for the NBA. It's like it's a bad choice. But unless you have really really clear descriptions of what the role is As people make these decisions all the time, they forget that there's, you know, they forget about, well, you know, golfers on average aren't seven feet tall and being seven feet tall is kind of important in the NBA, for example, and they get candidate lust. Now, I don't say, you know, in a sexual way, they get candidate lost, meaning, all they do is candidate is simply going to solve all of my problems. And they come from Apple, and they have the this, they have all right credentials, the right brands and the right personality.

Brad Giles  20:35

And that's human nature to get that candidate last. And so we've got to have some kind of empirical measuring tool stick system that can avoid that. And, you know, this is many for many entrepreneurs. They've started based on an industry or a trade, and they've grown and grown. And HR is kind of an add on. And maybe when they had a job before, it was an add on that someone else perhaps did or helped with or there was an existing system. And so they just kind of build it and tack things on as they go along, not knowing that massive cost that bad hiring makes.

Kevin Lawrence  21:18

Absolutely. And the thing is, is that especially at a leadership level, you don't get there unless you're persuasive, and a good storyteller. They're hard people to hire because they can spin a story. And I remember, I came in late stage to a hiring process for one of my clients hiring a head of operations. And I interviewed this gentleman, who had been through five interviews of a couple hours each already. I had an hour, an hour and a half. And so I interviewed him, and they were going to hire him. And I tell you what, this guy was charming. He had a slick presentation. He'd be a wonderful guy to go have a beer with right. As I dug in and started using the top grading interview, which we'll talk about next, this interview process. He was an arrogant, lying jerk. He was a bad man, he started disclosing stuff at some point where it 75 minutes into the interview. And I just, I just started chatting about other stuff, lightening it up, because he balked. Because what he disclosed in 75 minutes was he knew he wasn't getting the job. And again, the CEO and exec went from good to hire him that day to well, we need to change our mind. Yeah, because he was charming his way through the interviews, but when you dug deep on how he did his work, yeah, bad dude. So let's go into the next part, which is then the assessment process. So there's, so once you've got the scorecard and the engineers drawing of the job, and you know, the type, you know, there's probably 25 different sales roles out there and salesman, they're very different depending all of them. So you got your specific one. You know, there's a screening interview, half hour, 45 minutes to get to really sense of the candidates worth the time and it's enough of a fit. There's something called the, the, the tandem executive interview, call it but it's, you know, three, four or five hours, depending on the position to interviewers going back and starting from high school, and breaking down in detail their entire career up until today, and with a lot of depth. It's why we get so much detail and understanding. Because when you ask the same, it's only a few simple questions. But you ask it every job from high school and get deep examples, the patterns emerge like crazy. Yeah, no best example, sorry, the best indication of how a person will be in your role is how they were in other roles. And those absolutely no edge. And the leopard doesn't change its spots very much at all. You can take a look at someone at 15 years into their career, and you can probably predict the rest of their career. It's you know, that people might not like that I say that, but it's, it's true more often than not, perhaps it is. And then after you do that, even, you know, you're going to notice a lot of stuff, but even you might have liked the candidate you might emotionally connected but they still might not be good for the job. You got to take a couple of days and cool down and write a report in a structure that is recommended. And then you go and talk to the references and the key is you go and talk to three, four or five of their past managers, not the list you give you. You go and you talk to past managers and ask very specific questions, and I tell you what I've done. I get called fairly often for some reference checks. It's laughable the questions people ask me. Like, it's not adding any value to the process. But we have a very specific process view. So you go from the base of the talent reviews costs, improve your talent, when there's a new role - engineer the job description. And then you go through this process of deeply assessing people and then making a decision with boatloads of data, not feelings. You can have your gut instinct on top of it. But it's got to come back and say something that doesn't feel right. Which competency you're concerned about, which core value you concerned about? How do you know that's true? Well, we don't Okay, that's a feeling great. How do we go and verify that feeling? Because feelings can be helpful? Maybe we verify that through the reference check, or we have a further interview, but it's a very disciplined methodology, and it produces outstanding results.

Brad Giles  26:14

So one of the common criticisms of Topgrading would be that it's too complex or too complicated for my business.

Kevin Lawrence  26:26

Bike is complicated, too, until you figure it out.

Brad Giles  26:30

What would be if someone said that to you, what would be your reaction? If they said, I've heard about that, but it's too complicated? We need something that's really simple.

Kevin Lawrence  26:43

Yeah, it is. It just has great discipline. So usually, when we get involved in helping people to implement it, it takes quite a while to build the discipline into the organization. Because most people don't have a lot of discipline. People aren't disciplined by nature, it's not complicated. It's just harder than how people normally do it. That's all. Yeah. Yeah. And that's, do you really want the results, you know, that's the thing, that's, that's why the CEO and executive need to be bought into it, HR cannot drive it, it won't work. Yeah, CEO and executive need to be bought in that we're going to invest, whatever it takes, you know, 100, to a couple 100 grand over a couple of years on the training, the support the expert, external interviewers to work with our team until they become experts, tweaking our systems, auditing our systems, there's, you're investing in this for what it does over the next decade, you're building an A, it's almost like installing a more robust software system. It's a it's a commitment. And what I say to people, if you're not committed to invest into this and build on it over a period of a couple of years, don't do it. Because you won't get the results like anything.

Brad Giles  28:00

But the results, and what it can do for a business is just outstanding and remarkable. I mean, let's go back to Jim Collins, right? You got to get the right people, people on the bus doing the right things in the right way. And it's at the very, that's the first thing, and that's what we're talking about.

Kevin Lawrence  28:27

So I'll say one thing, but it's actually not complicated. It's very simple. It's just incredibly rigorous and discipline. It is so acute, basic. It's not complicated. Yeah, I use the wrong word there. But it, there's a lot to it is what I really meant to say. There's a lot for No, but that's the criticism is people. That's because they don't understand it. People are already doing a lot of stuff in their hiring process. This is just all of these steps are already happening. They make a job description. It's just fluffy and weak. They do screening interviews, they just missed the mark. They do proper interviews, and they probably spend more time with a candidate than we would. Yeah. So they are doing all of these steps. They're just not doing them with incredible rigour and discipline.

Brad Giles  29:22

That's the key. It's the rigour and discipline, rigour and discipline that makes the difference and produces the results. And that's really is the right response to that type of criticism or, or question. Awesome.

Kevin Lawrence  29:36

So that that is Topgrading, you will not find a bigger fan of it than myself. And I don't stop talking about my clients till they do it. It's not even an option. And if they don't want to use it, I don't want to work with them. Because then I have to listen to all the idiotic people decisions. So we know that it's that it's it is it's true, I mean, and then again, executive people decisions. Those are like million bucks minimum screw up when you get it wrong. Basically it's about stacking a deck with the best talent based thing as a talent review. So you're build a culture and a discipline of constantly enhancing your talent. And then when you go to hire someone, make sure they're a great fit for that job through a scorecard and a proper evaluation process. And when you do a promotion, the same thing. And ideally, you continue building and moving towards 90%. A-player's and maybe you don't want that strong of a team. That's a serious commitment. We put most of our clients in that direction, but some people be happy at 60%. You're already running 30, and you get 60%. A-player's business is twice as strong.

Brad Giles  30:42

Yeah, yeah. Yeah. It is a fantastic system. I'm a massive advocate for it. Love it. I see it the best hiring system and process and tool that you can use for you know, upgrading your talent.

Kevin Lawrence  31:03

Yes, and decreasing your own stress because you're with better people. So thanks for listening. That has been the Toprading discussion episode 100. Brad, we did it. That's all good. It'd be great if we were able to be in person and celebrate we will sometime soon I hope. It's been a Growth Whisperers podcast with Brad and I'm Kevin. For the video Vision version go to youtube.com and search the growth whisperers and to reach Brad and his awesome newsletter evolution partners.com.au and for Kevin and his firm and their awesome newsletter and ideas. Lawrence and co.com Hope you have an awesome week.

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by lawrenceandco

Podcast Episode 99 - The Brilliant Jerk

The brilliant jerk is a phrase that was made famous in the Netflix culture deck, is also known as a Toxic A-Player. The brilliant jerk refers to people on your team who are highly productive in their role, but they don't fit the culture. They don't align with the behaviours or core values, and they come at a high cost to the team.

In this podcast episode, Kevin Lawrence and Brad Giles talk about how to deal with brilliant jerks, and why it is essential for leaders to deal with them, and also to prevent hiring them in the first place. Because the cost to the team is simply too high. Not taking action endorses the behavior - and undermines your culture and the value that you're showing towards other people.

SUBSCRIBE TO THE GROWTH WHISPERERS:

    

EPISODE TRANSCRIPT

Please note that this episode was transcribed using an AI application and may not be 100% grammatically correct – but it will still allow you to scan the episode for key content.

Kevin Lawrence  00:12

Welcome to the Growth Whisperers podcast where everything we talk about is about building enduring great companies. That's something that myself, Kevin Lawrence, and my partner here, Brad Giles, we're passionate about. Brad, how're you doing today?

Brad Giles  00:26

I'm doing excellent. Thank you. Very good in this part of the world. How are you doing Kevin?

Kevin Lawrence  00:36

Things are going great here, too. So what are we on for today? Brad? What are we gonna dig into and have some interesting conversation about?

Brad Giles  00:53

Today we're talking about the brilliant jerk - we've all served alongside brilliant jerks. Before that, we always like to say phrase of the day, we advocate for it when you run meetings as well, just a simple way to start and perhaps break the ice. So I'll start off on that, Kevin. And I do that because there's a look at your face, I'm thinking he's still thinking about one. So mine is reset. Because every time we run a quarterly or an annual meeting, I have a slide and it's reset, because we are resetting, it doesn't matter what's happened. It doesn't matter, the successes or the failures, everything stops and gets reset, so that we can build our next business plan for the next 90 days. Reset. So Kevin, what might be your word or phrase of the day?

Kevin Lawrence  02:02

Well, mine is resilience. Interestingly, because I'm feeling damn good. I did a keynote this morning for a large organization that a global organization on resilience, and so it's fresh on my mind. I've written lots about it, and we've talked a lot about it. You know how important resilience is. Resilience is your ability to bounce back from whatever life or work throws at you. So reset, and resilience, and that those two words tie nicely together. We're doing a little resilience reset today, Brad?

Brad Giles  02:49

Well, let's try and reset some brilliant jerks because they need it.

Kevin Lawrence  02:51

I want to make a disclaimer. I think there's a number of times in my life that I might have been that jerk. Well, maybe not the brilliant part. But I definitely could have been a jerk part, you know, as an aggressive personality, I can think of a number of times when people probably called me a jerk. And I probably earned it. Actually, no, I definitely earned it. So like, we all have moments where our behavior is not great. Whether a button gets pushed, or we get trigger who or we're in a bad way, it doesn't matter. We all have it. But that's not what we're talking about. Little things that go a bit sideways - we are talking about the terminal cases. Yeah. The people who are generally consistently, always just really frustrating to be around and it doesn't seem to change.

Brad Giles  03:44

We all have good days. And we all have bad days. It's part of the human condition. Maybe we didn't get enough sleep, maybe something is affecting us. Maybe we were you know, worried or we've got our other pressures. So everyone has good and bad days. But worry, where are you at your average? That's kind of what we're saying here. So you may have, you know, been a brilliant jerk, or I might have at some point or even just a jerk, but where do you reset to the average? In terms of your being able to deal with other people? That's what we're saying. Because brilliant jerks. When they reset to the average, the average is brilliant jerk. It's not, you know, the average is they're a jerk, you know, they don't play well with others. They upset their team members, they don't align with our core values in the organization. So assist consistently is the key. Yeah, so you get a bit of a leave pass as it were for having a bad day. Everybody does. And that's okay. But where do you where's your average? That's what we're really saying, is it your trend line?

Kevin Lawrence  04:51

So what makes someone a brilliant jerk? Our first kind of point we want to dig into and really, this is someone they're normally really good at their job, like they are very effective. But they've got this bad attitude and it cost a lot of friction around them. And normally, usually the ones that keep their jobs for a while the frictions, internal, whatever they do externally seems to be good. And in the book, I wrote Your Oxygen Mask First, we call them a toxic a player, which means, you know, a performance on getting the results in a role, but toxic because they don't fit the culture.

Brad Giles  05:37

And they're generally violating a few core key or key core values, upsetting the people around them on a regular basis. So if you're a leader, and you're having regular chats about one particular individual, and maybe there's a bit of a chance around that, so I remember, there's one CEO who will go unnamed, and I would have to say for four, maybe even five years, every time we would be talking about this particular individual. And he would always say the same thing. If Dave leaves, then we are going to lose some of our most important customers. And I was like, but what is it costing us?

Kevin Lawrence  06:21

There's a cost if he stays now.

Brad Giles  06:27

And we tried to reconcile that. But it was yeah, it was a really, really tough conversation. And of course, as is always the case, Dave ended up going in a horribly messy situation. And afterwards, it was partially, you know, the doing of the leader. And it was partially not, but because the pressure began to build on the frustration. Yeah. And so as we got towards the end, or and then we pass the end, the CEO was saying, I wish I'd done it years ago, as is always the case, we say that, yes.

Kevin Lawrence  07:06

And normally, you don't lose the customers you think you're going to lose? Right? Yeah, they own key relationships, and they're in a revenue generation, there can be an impact. But generally, we begin to build it to be bigger in our head. I'm not saying there aren't cases, there are cases where we've had to deal with this, and have a plan over a year or two years before because we didn't want to take the chance of overly disrupting, you know, the revenue line of the company.

Brad Giles  07:35

This guy we were, we were at a two day annual meeting. And we went out for dinner. And this guy dominated the conversation for like an hour or two without anyone getting another word in edgewise to the point that people pretended they needed to go to the bathroom. So they could just go outside and be able to form their own conversations. It was typical, brilliant jerk behavior.

Kevin Lawrence  08:01

So I had one a company I was working with in the US, been working with them a couple of years, we had a tight executive team massive momentum, great growth, everything was great. And we had a new CFO. And this is before I was forcing my clients to top grade all the key hires. I come in the room, he'd been in a company 42 days, this is a quarterly, we're at the coffee break, and I go to the CEO. So do we want to fire him at lunch? Or do we wait till tomorrow without even talking to the CEO? I was listening to the conversation on the break. I saw him in action. And I went, this is atrocious. And it almost broke down all the health and harmony of the exec team in 42 days. Now we wait. You know, this is Thursday? We actually we didn't fire him that lunch. We didn't fire him on Friday. But we did Monday morning. Yes, we wait until after the weekend. Which is it because it was just a wrong hire and the damage these people can do. I have another one. similar scenario. And I had a bit of a talk I gave the CEO a bit of a talking to he hired this guy. This is 10 years ago, we hired him over the phone without ever meeting him. And it was a sales guy and we weren't using zoom back then. We're in a very conservative company. He's telling locker room jokes that are insanely inappropriate in front of the mixed crowd at the coffee break. And I said to the CEO, you need to fire him and you should do it at lunchtime. We need to get this guy out of here. We did at the end of the day. We let the meeting run out. We don't want to disrupt the minute we fired him at five o'clock. Because this it's just I mean those are extreme but not another one I've seen some examples are kind of our point to over talkers. One of my clients had one who was their best truck driver and I've shared this story in the past, they were in Vancouver and their own fleet of trucks that they had to get across the mountain pass to another place called Calgary. And these are extreme mountain pass even they made this show about this highway in the winter called the highway through hell. It did not matter what the weather was, he would always get through on time most reliable truck driver maintained his truck perfectly, cleanest truck, just a little problem, they would get one or two complaints every week from people on the road, because of his aggressive driving and how we would cut people off and be an ass on the road. Now, because their company name was on the trailers and trucks Yeah. So you know, it just it was hard, because he was so damn good. And, you know, I'm sure you've got other examples to grab. But these are, they're really good at their job. They're just a liability. And like a ticking time bomb.

Brad Giles  11:08

The important part is not just that he doesn't play well with others inside the firm, because he was not playing well with others on the public roads. And yeah, and so it's in general doesn't play well with others. So let's talk about the definition, the brute jerk. Now you and I might interchange that with a toxic a player. And that comes from the book, top grading as well, the definition of a player, someone who's in the top 10% of available candidates at the pay rate that you provide. So this is someone who is producing the numbers, they're pretty consistent at hitting the numbers for their role, but they don't leave the core values, you know, no one wants to sit next to them. No one wants to hang out with them or get into some kind of lunch time banter with them. Because they're a jerk.

Kevin Lawrence  12:08

They might not be a bad human being. They're just in the wrong darn place. Like the guy that we did fire at the end of the day, the sales guy who got hired on the phone. There's places where he actually probably because he was a personable guy, he just was crude in a conservative environment. So there, there are environments that aren't conservative that he could have been great in.

Brad Giles  12:52

But he couldn't. My reading the situation, he couldn't recognize that that was inappropriate. He didn't have the EQ to recognize this is not a locker room. This is a mixed environment where in a professional setting where it's not really appropriate. Exactly. And so the big thing about toxic guys or brilliant jerks is that you've got to take action, no matter what it is it you know, it may be easy for us to say get them out fire them. But that's one option. But you can't just if they're toxic, you can't just let them sit and fester. Because the cost to the team is simply too high.

Kevin Lawrence  13:39

But why do people let that sit and fester? Because they're worried about productivity loss?

Brad Giles  13:43

Because brilliant jerks. They're brilliant. They're high productivity, okay, but they're low on the behavioral or the cultural side. And so they're fearful that we won't like the example I provided we won't be able to replace those customers, or those sales.

Kevin Lawrence  14:05

Yes, they're fearful and, and a scarcity of you know, if we do something bad is gonna happen. That's the root of it. And it's, it's unfounded. You might take your time, and you might be smart about it. But you can always work your way around. We had one in another company that that, unfortunately didn't work out recently. And there's a lot of concern about the additional workload and strain on the team. If you got if you only had three people, maybe, yeah, we got 500 people, the system handles it. And they're often relieved because the stress and the tension is out of the environment.

Brad Giles  14:51

So you've got to take action, inaction is perhaps where your gut will take you motivated by fear, as you said, but you've got to take some kind of action on this. And for many people, though, we like the fear says I don't want to fire them, it's your read on the situation, if that's the case, then try to move into some kind of coaching situation with them to help them to understand the problems. I mean, we genuinely want to give everyone a fair chance at helping themselves to become better to be able to align, it won't, it won't always happen. But if you want to, it's appropriate to give them a good chance.

Kevin Lawrence  15:35

I agree. And you'll always owe it to him because they might not have been made aware about it, they might have been like that their whole life, their manager might not be doing it. If they don't report to you, you might not be given the feedback. So there is truth. The other thing that's important, not taking action endorses the behavior. Oh, yeah. So you know, your culture isn't the words in the wall. And we said it is your culture is your hiring and your promotion decisions. When you promote these brilliant jerks, what you're saying is core values don't mean anything. If you're highly productive, you're it's okay to be a jerk. No matter what we say you're endorsing it, if you allow them to stay in their positions, you're endorsing it, which undermines your culture and your value that you're showing towards other people.

Brad Giles  16:22

And people look at you as the leader and think that you just don't care, right? And that's direct are the real problem. Because they would think I totally aligned with these values of this company or the behavioral expectations. And then they would look at the toxic a the brilliant jerk, and they would say, This person is not acting in the way in which everybody talks about the coachee here. And then they look at the leader, and they say, well, obviously this person doesn't really care about these values Correct? Or these behaviors?

Kevin Lawrence  16:59

They think why would I work so hard to be effective with this person, you can get away with all that. So it's stuff so so you gotta address it. And, and, and there's lots of different things you can do. But the biggest thing is to make sure they get the straight goods, and we often get brought in to help turn these people around. Good leaders want to give them a chance and make sure they haven't missed it and missed something. And so normally, where we start is the manager making sure they're actually giving them the real tough feedback, that's, you know, sometimes, you know, we'll do in depth, we do a very, very thorough deep in depth 360, where you're interviewing people getting lots of details of what it is measuring them on a few different ratings of leadership, debriefing with them, and their manager coming up with action plans of how they're going to get better at the behavior, that can help you that can get through them. exit interviews when people leave, because normally people that work with or for these people, there will be carnage people, you know, it'll cause carnage. So even some of that are clients, even whatever data you can put in front of them to try and give them a wake up call, like, hey, this isn't working, things need to change. And here's why. And this is where HR has an amazing, important role in companies is to make sure that it is crystal clear the feedback they've been given. Because a lot of managers are not very good at laying out the truth in a way where it's like, if this doesn't change, you're gonna lose your job.

Brad Giles  18:41

Yeah. And they may, through fear or whatever, be reluctant, especially because of the performance, they're achieving the numbers day you got it, they believe they're helping the manager to achieve their numbers. Maybe they're even one of the highest performers on the team. And so the manager is thinking, if that person goes, and that's a hit to the overall productivity or performance of the team, then that's going to make my job so much harder. And so they kind of tend to turn a bit of a blind eye toward the behavior, but not really appreciating the overall negative cost that it's bringing. Yeah. Go ahead. Yep. But after you've had those conversations, I mean, the example I provided we gave that guy almost a year's worth of coaching, one on one coaching with a coach to dig into it. Sometimes it just won't work. Sometimes. They are such a brilliant jerk of excellent proportions, that they're not going to be able to change who they are. They're got hard wired emotional issues. that you will not be able to disentangle. And if that's the case, you need to take action, you cannot let this person continue to be toxic inside the team.

Kevin Lawrence  20:11

Yeah, and that's, that's the hard part, you just need to make sure you've given them chances, make sure that they have clear written goals, maybe it's a performance improvement plan, maybe you get them a coach, maybe you send them on a training or personal growth program, you know, you know, often people want to make sure they've given them the chances and give them all the chances to continue to earn the role in the company. And then if it doesn't, it's time to move on, it's painful, and, you know, treat them as fairly as you can be respectful as you can, and let's move on, pick a day, knowing what's picking the elephant, we will do we get people to pick a date, they're gonna be it's gonna be if there isn't notable improvement, and we know we follow the processes the best, we can then pick a date. Now the gears, once that's done, you also got to make sure, generally, when these people leave, there's a little bit of happiness in the company. And the key thing is, we also want to maintain a respectful culture and don't let people celebrate too much. Like try and keep it really Pro. And at the same time, make sure you're listening to all of them saying we should have dealt with this sooner. Right, that's feedback for you the decision maker that this probably should have been dealt with a long time ago.

Brad Giles  21:26

What's implicit in that statement is, and they may not have the courage to ask this of the leader. Why didn't you deal with this sooner? Because there's the evidence that they're questioning your activity and your action?

Kevin Lawrence  21:40

Correct. And then the final step is, well, how do we prevent all of this in the first place, which will be our next podcast, and we will talk about the top grading methodology that is designed to make sure you only put the right people into new roles, whether they're external hires or internal promotions, having a very thorough process to minimize these mistakes, that are not good for the person and they're not good for us. Nobody's nobody actually is not good for the team, either. Nobody's winning with these people being in these roles.

Brad Giles  22:12

And that's our episode 100. Very interesting one to look forward to a bit of a milestone for us. Yeah, but how do you consistently hire people who live your values, and are productive in their role at an acceptable level? That's what we're going to be talking about next week on the growth whispers. Okay, so thanks for listing a good chat about the brilliant jerk, unfortunately, a part of life, many leaders and teams. And yeah, so I guess in summary, we have covered off what is a brilliant jerk, they're productive in the role or highly productive, they're low on the values and behaviors. We've provided a few examples there, and also been able to explain that you you must take action, no matter what it is, you must kind of take action. Any other further comments on all of that, Kevin to close this out?

Kevin Lawrence  23:09

It's just they're hard situations to deal with. And our job is just to make sure that we really give them the best chance they can of being successful with our company, or freeing them up to go get a job in a company that they suit better.

Brad Giles  23:23

Yeah, indeed. Okay, so thank you for listening. This has been the Growth Whisperers podcast. My name is Brad Giles. And you could find me at evolution partners.com.au And you can find Kevin at Lawrence and co.com. And obviously we both produce newsletters full of actionable interesting insights every week. You can also subscribe to those for more. Thanks for listening. We hope you have a great week and look forward to chatting to you again next week. Have a great one.

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by lawrenceandco

Podcast Episode 98 - Are you unintentionally doing other people's jobs?

Are you an answer dispenser? Many leaders accidentally find themselves doing other people's jobs - and not increasing the capabilities of their teams. While trying to be helpful, you are preventing others from having full autonomy and accountability for their job - and not having enough time to do your own job.

In the podcast this week, Brad Giles and Kevin Lawrence discuss a trap that many leaders fall into: unintentionally doing other people's jobs. If you're answering too many questions as a leader, you hold back the growth of your team and reduce operational efficiency.

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EPISODE TRANSCRIPT

Please note that this episode was transcribed using an AI application and may not be 100% grammatically correct – but it will still allow you to scan the episode for key content.

Kevin Lawrence  00:13

Welcome to the Growth Whisperers podcast where everything we talk about is building enduring, great companies. Ideas, tips, tricks, techniques, to help people live up to that aspiration of building an amazing organization. I'm Kevin Lawrence. And as always, I'm here with Brad Giles, my co host partner. Alright, well, let's jump in the word of the day. What's your word of the day?

Brad Giles  01:11

Look, I've said it before. But it's accountability. Gee, it's such an issue that we just deal with, from what feels like 360 degrees in all its forms on such a regular basis. So it's accountability. That is holding people accountable, establishing a system of accountability, and a framework and getting people comfortable in that. What's yours?

Kevin Lawrence  01:40

I love how our thoughts are on different tracks. Mine was freedom. Which is almost the opposite of accountability, in some cases, not necessarily, but just freedom to and grateful for the freedom to be able to do the things that we want to be able to create the things that we want to be able to work with the people that we want, and how freedom is obviously important to many of us. But I find that you know, I have the greatest freedom when I'm working with the best teams.

Brad Giles  02:12

And I've never stitched before, this is always your thing. But I know, we have a person that we both know who has a saying which is routine will set you free. And so maybe its accountability will set you free. Maybe the freedom that you seek comes from accountability.

Kevin Lawrence  02:33

Whoa, and that would weave beautifully into today's topic, Brad. What are we talking about today? Cuz that's, that's a nice little transition.

Brad Giles  02:46

Today, we're talking about a concept that I outlined in my book, which is other people's jobs. Right? So today's episode is asking the question, Are you unintentionally doing other people's jobs. Because if you are, it could be a problem.

Kevin Lawrence  03:11

As well for you and for them. And thing is, often when people start doing other people's jobs, their intent is good. Like it's to either help the person or make sure the job gets done for the customer. It's a noble intent often, um, but we won't really get today is that often when your intent is to be helpful, you can also be hurtful. One, because when you do someone else's job, you rob them of the accountability, often, you can rob them of the learning experiences, you can law, rob them of the pain that comes from not doing a good job or failing, and, and almost insulate people from their own issues. That's not always the case. But it can be but your intent is, it's beautiful. I know. And you're wanting to do the best, but we're hoping to understand is that when you're doing other people's jobs that you shouldn't be doing.

Brad Giles  04:07

So what we would encourage as best practice is that each role in the organization, any role has a sandbox and that Sandbox has outputs such as KPIs, or the execution of priorities, or whatever it might be. And all of the responsibilities and accountabilities that live within that sandbox are owned by the person in that role. And so we don't want to be stepping into that sandbox and playing with that person's toys. We want them to get us to your point, the freedom to succeed in that sandbox because when you are fully accountable, and you have that freedom, that's when magic happens.

Kevin Lawrence  04:54

Yeah, and a lot of this starts from the perspective of the manager, right? And think of this as the manager getting over involved in their teams work. But the idea is when you remember that as a manager, your job is, is to support them and get their job done. But it is their job. Unfortunately, some of these people, we can be the guilty party, but some of these people are masters and have you think it's your job, or they're their masters of delegating the accountability back up to you. Right, or especially when there's risk involved, and many of them are very capable. But if you're a good enough sucker that they can get you to do their work. And they don't have to do it, especially if it's the hard part, or the risky part. You know, many of them, though, are I've mastered that in their life, they just make it somebody else's issue, and namely, yours. And it's stuff you got to watch out for. And if you're a supportive person, you can, you can get taken advantage of, and unfortunately, they're the ones getting ripped off because they're not stretching their own capabilities.

Brad Giles  06:00

And many times we set these traps ourselves because we hire someone, okay, and we set them up, and maybe we have on boarded them, maybe not, but this person has started, and then we say to them, the critical words, Kevin, if you've got any issues, just come and see me if you didn't questions, just come and see me. Yeah. Because the end that we don't say it, and I'll answer those questions. Okay. And what that does is it sets in motion a process that gently, slowly turns a switch in their mind that stops them thinking for themselves in a literal sense, okay. And instead of them trying to solve problems, if every single time from that point onwards, they come to us, and we answer the questions. It's like, we train them to come to us.

Kevin Lawrence  06:57

Train them to be stupid, yeah, train them to not use the brain, you train them to not grow. And it's almost like if you had children, and every time they went out, you tied their shoes for them. Well, next thing, you know, your 15-year-old kid is coming you to get their shoes tied. Now, we're smarter than that as parents, I hope but we often do that with our people, the same thing helpful becomes hurtful because we hold them back. And they think they're winning because they don't have to do it. But again, they're stunting their own growth. So like you brought, I also wrote about this, there's a book chapter I book called chief stop being a chief problem solver. Basically, if you're in an answer dispenser, you've got a problem. Because if you're the answer dispenser, you're doing the thinking, and they're not. And so, I've worked with a professional services firm, and you know, they're in the answer business. Right? And, and they're very, very successful. But they were they've trained and they have a culture of, anytime someone comes with a question, they come with having done some research and have a couple of different options and a recommendation. So they've trained everyone to try and do the thinking, versus coming in to get an answer. That's organizational discipline. Now, the thing is, why are so many of us answer dispensers, I can be guilty of it sometimes, too.

Brad Giles  08:27

Because it's easier. I'll just solve the problem.

Kevin Lawrence  08:32

Our ego loves it. It is so self-validating. Let me show you how smart I am I have the answer. Well, of course, you have the answer. You've been doing the job for 20 years, you should have the answer to almost every question of operational question at least. But your job is to train them to be more capable and independent. So every time you're answering those questions, you're not doing your job of making that person more capable and independent. Because of course, you know the answer. And your ego loves to reinforce the fact that you know the answer. It's just not good for anybody. Because when you're busy answering questions all the time to the people around you don't get any smarter. And three, as the business grows, you've got a weak team, and more and more pressure on your shoulders. It's just and we're not No, I don't want to sound judge you, we all slip into it. It's just such a bad habit to get into.

Brad Giles  09:28

When I was a CEO of my own business, I went through this epiphany for want of a better word. And I remember I would come back to the office and walk in and there'd be about 20 people would put their eyes their head over the workstation and think oh he's back I can go and ask him a question. And that's not a really sustainable position to be in. And I can only suspect that some of our leaders who are listening to this podcast have experienced the same thing. And I, number one, I made it really clear, who do you report to? If you're three layers away from me, don't be coming to me and asking for questions, unless it's to do with, I don't know, my car or my house or something like that. Yes. So it made that really, really clear. But then the people who reported to me, I explained to them, we're going to work through every weekly meeting. And I'm only going to ask questions, okay, you're going to answer the questions. And what that did remember, when I said when people start, they flip that switch it slowly flip that switch back, where what that meant is that those people, they started to think he's not going to bloody answer this question anyway.

Kevin Lawrence  10:54

So for example, and all humans can slip into this. But let's talk about some of the techniques you can use to not do people's job. And again, there's getting in there and being over helpful. A lot of it has to do in leadership roles about answering questions and things like that. We'll share some of them. So one of the techniques, I use this a lot, but it's like, what do you recommend? Yeah, like, at the end of the day, what's your recommendation I want? You know, at the end of the day, basically, hey, how about you do a little bit of thinking, and you come here and give me a recommendation? Interestingly, I've got an amazing team. Amazing - and people still come up with questions, not that much. Because they know that I don't really want to answer them. And they're capable enough to do it themselves. But someone the other day, I had a situation. That was something that's happened before. And they came and said, Okay, here's the situation. Here's what we think we should do. And here is how I think I'm going to handle it. And I just said, sounds good. You got my support. That's it. It was so well thought through. But they also knew they knew what I was gonna say, Well, what's your recommendation? How can you solve this? And also, how can we prevent this in the future? Anyways? It's just it's very. So basically, what do you recommend and training people to get another habit is one thing, what are some other things that you can do? In the situation, you find yourself stuck in it?

Brad Giles  12:27

Well, as I've mentioned, before, you said that just asking questions. So having when you're interacting with a person who you've, you know, trained in that way, think the only way I can deal with them is to have a question mark at the end of a sentence. It's a little game that you can play. Like, I'd say, Hello. But I could say, How are you doing today? Okay, that's a question. And you can just make it into. And that's what I did make it into a game where you can make sure that everything that you're doing is only asking questions, yep.

Kevin Lawrence  13:10

A little warning, if this isn't what you're doing, and you start doing it, all of a sudden, you'll freak people out. So one of the things we've learned is to let your team know, hey, what I've realized is, I'm the answer dispenser, you're not increasing our capability. So here's how we're going to change things going forward, just so you know, what's coming. And and and it's, it can drive people crazy when you want to answer a question and hear me. It's not that you never answer a question again. But you know, 70 80%, say that 80% of the time, you're going to try and get them to do it. Sometimes you're still gonna answer the damn question. Don't turn into a robot that only has statements with questions at the end.

Brad Giles  13:52

What do I like to say on that is if they come to you and say, so what we're going to do is we're going to get to atoms inside plutonium, and we decided we're going to smash them together, then that's probably a good idea to, you know, flip that opinion back having an opinion is exactly.

Kevin Lawrence  14:10

So we're talking about 80% of the time, you're still going to answer something. It's just that generally, if you get, you know, 100 questions in a week, we're trying to get 80 or 90 of them that they answer themselves, or at least they try to answer themselves versus just the default, you helping out too much and being too helpful or too knowledgeable.

Brad Giles  14:29

Let's now flip around and think about an A-player. So imagine if you're an A-player, who is reporting to a CEO who must answer every question, okay, so this is a top performer, someone who's a superstar in their field and they come into your firm, and you tell them by either directly or indirectly, I'm going to answer every question and there will be no risk and another one another.

Kevin Lawrence  14:58

You're gonna want nothing. to do with you, they're gonna be far they are. And it's interesting. You know, I've got very, very strong people on my team. And I was interesting having an interaction with one or the other guys, it was a very successful executive. And he's one of our amazing, awesome consultants. And, and it was worth and coach. So we're talking about something and I know with him, my job is to ask a couple questions. He doesn't need anything from me. And if I, if I get too involved, he's gonna be like, What are you doing? Yeah. Right, because he has the autonomy and the accountability and the intelligence. Now we're working on this one project. And I said, okay, at some point, I know you're going to deliver on this thing, you'll crush it, we just need to make sure that we're in sync at probably two points in this project. So okay, so where would the points where you and I review progress and synchronize around where we're at before we go to the next step, almost like, if you're building a house, let's synchronize before we buy the land. And then let's synchronize on the final drawings, before we get the building permits and order the material, you know, a couple of key checkpoints, but otherwise, and so we just decided on a couple of checkpoints and away we go. Yeah, but he's not gonna ask me any questions. He's just gonna go and do it and come with recommendations, he might ask a couple little things. But he doesn't want to have to come and ask me a bunch of questions. And that's the key thing, because he's a super strong a player.

Brad Giles  16:29

And we think that we're helping them by answering questions. But we, and we think that, you know, it's too hard to train them to think for themselves in the way that we do things. Look, it's easier if I just do it myself, or if I just answered this question.

Kevin Lawrence  16:46

But as we're thinking here, right, it really our job is to ask a bunch of questions. And but not answer a bunch of questions. Yeah, we should be mostly asking. And rarely answering.

Brad Giles  16:59

Yeah, I mean, and that really, really comes back to the old saying that if you're the smartest person in the room, you're probably in the wrong room.

Kevin Lawrence  17:07

Yeah. Exactly. Awesome. I love this. So the root of everything that we're talking about is, is that if you're answering a lot of questions, or being overly helpful, you hold people's growth back. Yeah. And you're robbing them of their accountability. And generally, you're gonna have a lot more pressure on your shoulders. And that pressure is meant to be distributed, not carried by you. So your intent may be beautiful. And think about it with the people that you're working with? Where are you likely getting involved in doing people's jobs? Where are you owning some of their accounts that you shouldn't, and maybe it's been fine? But you want to transfer more of that to them. And as a leader, our job is to transfer more and more to other people, ideally, the right or the left something for you to think about?

Brad Giles  17:57

Yeah. Any leader of people, your job is to grow the people around you to grow them. And you can't do that, if you're answering all of their questions. Don't do other people's jobs. Because if and this is the final point, is that if you're doing other people's jobs, and all that that entails. And it really loops back to the first point, you're not doing your job. Exactly, then who's doing yours? Nobody. And then you're not focused on the three years and the strategy and all the stuff we spoke about in last week's episode, and then you wonder why the company might not be scaling at the level that you hoped for exactly.

Brad Giles  18:39

What a very good episode. What a very good chat. Yeah, make sure that you're doing your job and not other people's jobs. A good a good principle. Okay, so I think with that, we're ready to wrap. So this has been the growth whisperers. I'm Brad always joined by my co host, Kevin Lawrence. You can find the YouTube version at YouTube, obviously, by searching the growth whisperers. Kevin has a newsletter that he puts out each week and you can find that at Lawrence and co.com Now I have an interesting newsletter as well that you can find at evolution partners.com that I do. We do hope that you've enjoyed this episode, and hopefully we'll be able to catch up again next week.

 

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by lawrenceandco

Podcast Episode 97 - What Time Period Should Your Role Be Focused On?

This week on the Growth Whisperers podcast, Kevin and Brad discuss the time horizon that each role in a company should be focused on. How should leaders spend their time?

Different roles in an organization should be focused on different time periods. Each person in each role should know what time horizon they should be focused on, and create priorities relevant to that period. If you are focused on the wrong horizon in your role, you will not be as effective as you could be.

In order to lead your company well into the future, you have to be thinking a lot about that future, and laying the foundation. And if you keep getting sucked into the day-to-day or week-to-week tasks, it might say something about the people who are reporting to you, and accountability that they need to have.

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EPISODE TRANSCRIPT

Please note that this episode was transcribed using an AI application and may not be 100% grammatically correct – but it will still allow you to scan the episode for key content.

Brad Giles  00:13

Hi there, and welcome to the Growth Whisperers where everything that we talk about is building enduring, great companies. Kevin, Hello, how are you doing today?

Kevin Lawrence  00:32

Great, Brad. Always fun putting together these shows and taking our different experiences and perspectives and coming up with one kind of unified perspective on a topic. And I'm really looking forward to the show today.

Brad Giles  00:45

It's a friendly arm wrestle, isn't it that we have?

Kevin Lawrence  00:47

That's the thing. We have different views. If we both thought identically, it'd be boring for us too. So yeah, it's great.

Brad Giles  00:54

Each week, we like to start with a word or phrase of the day, Kevin, what might you have in store for us today?

Kevin Lawrence  01:15

I was thinking about this one. And, you know, there's always so many, you know, different things. But the, the tough the one today is tough decisions, or calls. And, you know, they say it's, it's, it's what separates the men from the boys, and also separating, you know, the little girls from the women, ie about growing up and becoming a better version yourself. But it's tough decisions. You know, I have a client that had to make a very tough decision last week. And it was excruciating for them and a number of people involved in this decision. And it's just interesting watching the build up to it, making the decision and watching it unfold afterwards. And yeah, and as we know, in business, if you don't make enough of those tough decisions, you will get smothered under the burden of your organization.

Brad Giles  02:12

Well, each week, you like to stitch together the two. So I'm looking forward to seeing you stitch in that with this. Ah, my word is actually a book. It's called Small Giants by Bo Burlingham. Yeah, this is the original. And the best, I would say it's such an excellent example of companies across America who have built companies that aren't solely focused on becoming big, they're focused on becoming great. And I've had the opportunity a few times to reflect on that in the last week.

Kevin Lawrence  02:51

Yeah, it's the tough decision to not be big, right? There's this tough decision to be a small giant, which is hard in our culture because it's always about bigger and better. And it's, it's many ways, it's almost like the Zen minimalist view of things. How do we keep it simple and amazing? And yeah, that's one all right. Oh, so hard bread. Tough decision to be a small giant.

Brad Giles  03:21

And what are we talking about today?

Kevin Lawrence  03:23

You know, it's, it's a topic we've talked about before, it's a real favorite for me. And it's basically, you know, it's almost like, you know, we're in a world of racing cars, it's Wherever you look, you go. So if you're going around a corner, and you start sliding sideways, you look at where you want the car to go in the end. And with practice your hands automatically correct and generally take you there. Same thing, if you're sliding in the snow, and you're in a car drifting around in the snow. Hopefully, you're doing it for fun, not because of an incident. And you just point the car, we want to go mash the throttle, especially if it's all-wheel drive, it takes you there. And it's the same thing when it comes to leadership. It's about whatever you focus on, you get, you know, if you're running a marathon, or a race, and you're staring down at your shoes while you're running, it's probably not going to go very well, because you're going to go down you'll face first into the ground. So this is about where do you focus as a, whether you're a frontline worker, a manager, an executive or CEO, where should you be looking? And where should you be spending your time? So it's basically no more Yeah, more eyes up, but how far up where should you be looking as a leader?

Brad Giles  04:38

Yeah, it's, it's really interesting. I had a chat with one of the teams that I work with recently and the CEO, they're growing quite fast. They're growing really fast. And he's kind of he can see the pain in the team and he said to me, Look, I'm I'm I just want to bounce it off. You I'm thinking maybe I need to spend some time doing the job, like, I got to get out there, these, the team needs help, I need to get on to the frontline and help. And it will be the bold and brave thing to do. They'll all feel like I'm doing the right thing and so forth. And no, no, no, no, no, no, no, no, no, that is not a good idea. Let's just put it into a ship analogy, right? So you're there instructing the person who's steering the ship, and you're saying to me, I need to go and climb the masks and hold the sails. And then we're and then I'm gonna go down to the engine room and go and work on the rudder, or the or the propeller, if it's an engine powered boat, yes. No freaking sense.

Kevin Lawrence  05:40

And leaders do it all the time. Because in the moment, they they're just trying to be helpful, but they don't realize now they're taking their eyes off the horizon. Now, they're not thinking about the next moves. Basically, they're, you know, as a CEO, if you're, if you're spending a lot of time on the day to day, you've got serious problems now, whether the problem is you and your leadership style, your management style, or your team or your business. CEO shouldn't have to spend on very little time on the day to day, because that it's a bad sign. It's a really bad sign.

Brad Giles  06:27

Yes, yes. Because you're doing other people's jobs. This is the probably the key theme that I wrote in my book Made to Thrive. As a leader, you need to do your job and do it well and not do other people's jobs. Because as soon as you start doing other people's jobs, it's taking away their autonomy. And it means that no one's doing your job.

Kevin Lawrence  06:50

Exactly, it means your role is vacant, you know, it also in my book, I had a chapter as well called Make Yourself Useless. Yeah. And your job as a leader is not to have anything to do your to support your people make them so strong they can do without you. So you can be eyes up focused on what's next. Now, if you're, you know, running a team on a factory floor, what's next might be thinking about next week's production or enhancing production. You know, if you're a CEO, it's about, you know, the future. So what we're going to dig into, and it's, it's, there's a lot of variables that go into being able to do this. And I'll say, one of this, this, this came up for me recently, when I was talking with one of my CEOs about enhancing and I talked a lot of the CEOs about enhancing their abilities. And we talk about for CEOs, and even C suite about becoming the strategic CEO. Yes, strategic CFO. And I've worked with many the year over the years to make this transition. And even if we take the CFO role, you know, there's the CFO who's basically like the senior accountant, getting the numbers, right, working the systems. But a true strategic CFO is focused on the future, there alongside the CEO looking 1 to 3 years down the road, and building the models and helping to make the decisions to take the business in that direction. But if they're an operational CFO, they don't have time, nor the thinking time, or the bandwidth do that kind of same of the CEO. I call it the capital C CEO, or the strategic CEO. Yeah, that is the person who's truly doing that CEO job. And you know, in our first one, we're talking years, the CEO, CEO should have a big portion of their time on three to five years in the future. They should be looking at enhancing the strategy, they should have a lot of think time, a lot of think time thinking about things, talking to people exploring models, maybe they're looking at acquisitions, maybe they're spending some time on future products, or understanding future needs of customer who knows what it is, but they're working on things that really have a payoff and an impact that are three to five years in the future.

Brad Giles  09:06

But that's a really big payoff. Let's be clear. So I'm going to just bounce that back to you for clarity. Now, because this is the this is the kind of the headline that we're saying here. The CEOs focus primarily for a huge part of their time should be focusing on three to five year period, focusing on the strategy, executing strategy, becoming deferring the market, maintaining the gross margin, making sure that we if we need to make acquisitions or what's happening in the market, not so much. If something happened in the factory yesterday. That'd be nice to know.

Kevin Lawrence  09:49

Maybe they do and maybe they spend a few minutes on it. Maybe they have to lend a hand once a while when something comes up. But it's gonna be wrong numbers 50% of their time. focusing on though and driving those things in the future.

Brad Giles  10:03

Yeah. And that's hard. All of those things in the future need work to be done to get there, like, you need to do something this quarter, and the following quarter, and then the following quarter. So understanding that communicating it to the team, and continuing to think on that is a huge part of the focus of a CEO.

Kevin Lawrence  10:25

Which is basically not involved in the day to day almost at all. And a lot of times, it's building relationships you talked about in your book, The ambassador role, it's building relationships with key people, it can be, you know, being involved in recruiting key talent, maybe they know that they're going to expand into another country or another vertical of the industry, and they got to go and find some heavy hitters, you know, maybe they need to find some sizzle, basically, three to five years out a lot of time to think and enhance their understanding and develop, because if not them who everyone else is fighting fires doing this, it's a key part of their job is to lay the track for the future.

Brad Giles  11:05

A quick example of this. Yesterday, I was speaking with a CEO. And he is he's the owner of the business looking to put a CEO in to his role in a three to five year period. He's looking to hire a key executive who maybe can come into that role. And a lot of the work that we were doing was around analyzing the candidates and understanding who is the person that has the best chance of being able to take on that role. So this is not only about the strategy, it's about all of the things that are going to happen and get clear on the vision at that point.

Kevin Lawrence  11:43

Yes, all of the things that generally have a three to five year payoff. Interesting. Brad, I had another conversation with one of my CEOs last week on the same thing. Yeah, we went through did a talent review of all of their direct reports, looking for their successor, because they want a successor in place probably in about five years. And at least being developed. So that you know, in 10 years, then they can step up over that role. And goose egg, there wasn't a single person on their team, we're now going to go look, couple layers, the layer underneath it to look for candidates. Same thing I did two weeks before that with another CEO. We went through their team, there's one that could don't know, they don't know if that person would want to know, but there's one that could, but if not as the conversation is, you know, if you have a whole team, and there's no one that could be your role, you probably need to do some swapping, and get somebody else working with you directly that could take your job. But again, that's a but that's your replace a CEO is a mill three to five year project even longer sometimes to do it right, especially in a an enduring company.

Brad Giles  12:58

So as the CEO, yeah, go ahead and say, three to five years. So what happens when we step a layer down? So now we're looking at the key executives or the people who report to the CEO. So they should be spending their time with their head in the 90 day to one year period, executing the annual priorities, the annual budget and the quarterly priorities in the quarterly budget?

Kevin Lawrence  13:29

Yeah, and no, it's not that it's some executives will spend a bit of time with the CEO on some of those longer projects. But it's not their core responsibility. Let's just say, you know, for round numbers, the CEO spends 50% of their time on a three to five year horizon or more. Yeah, the executive is going to spend 50% of their time or more on that 90 day to one year time horizon, making and then they might put some time, shorter term might put the longer term, but they really own delivery of the annual and quarterly plans.

Brad Giles  14:00

And they have big things, the big rocks that you see plans, the big, you know, what are the top three to five things for the whole company? What are the for the year? What are the top three to five things for the quarter, and for the department? All of those things are big, and they've all got these executives name against them. So executing a lot of these things as well as executing the budget within those timeframes.

Kevin Lawrence  14:28

The big critical job is basically making sure the company is runs. Basically, they're running the company successfully. Yeah, that's, you know, which is, you know, we measured, so that's pretty, pretty straightforward. We've dropped down to the senior managers know in some, some in the West, we call them directors can be senior managers, all kinds of different titles, but this would be the, you know, the people that would report to an executive like, you know, and if you've got a CFO as an executive, this would be like your controller or your other rolls like that that reporting. And they're basically making sure that their teams are really successfully this week getting what they got to get done. Yeah. And all the way up to 90 days, they kind of meet the executives at that 90 Day piece, where they're focused on delivering that plan. And again, now they don't focus other places. But senior managers are basically this week to this quarter. And they're not really thinking about the rest of the year, they're just trying to make sure all that critical work is getting done.

Brad Giles  15:31

So the senior managers focused on one week to 90 days, the senior managers building or owning the 90 day plan that's executing the budget and the priorities for that department. Okay. But then the managers are focused on each of those 13 components 13 weeks of that quarterly plan? Yep.

Kevin Lawrence  15:57

Pretty straightforward. Yep. And then we're dropped down to what you would call a manager or a supervisor. And this could be, you know, an HR manager, it could be, you know, someone, someone leading an accounting team, this could be a manager of a certain product, it could be a fulfillment manager, all kinds of different roles manager in a factory floor, whatever it happens to be. And the managers and supervisors who are generally overseeing frontline staff, they're thinking about today in the week, they're not thinking about three years, they're there, they're not even thinking about the year, they're just trying to make sure that everyone has a great productive day. And all the critical stuff is getting done today, tomorrow, the next day and next day.

Brad Giles  16:40

Yeah, yeah. And getting the team members who report to them to be productive in that week to execute that week's plan to execute the numbers that they need be at sales or output or whatever it is making sure that these people this week, everything at that level between the senior managers and the team members, for the managers and supervisors, everything is about this week. And then we step down to the team members, the frontline staff, for them, their primary focus is about today. And if you speak to them, it probably is. Their focus is we've got to get this done by the end of the day. And that forms a part as we begin to go back up words, what they're doing on a daily level that forms a part of the plan of the managers and supervisors, which forms a part of the senior managers, which forms a part of the executives and ultimately eventually formed part of what the CEOs plans up.

Kevin Lawrence  17:47

Yeah. So if we really break it down, everyone has a different time horizon, what's their primary responsibility, and people might focus longer term or shorter term depending but for just a thinking model, it's basically where at least 50% of their energy is dedicated. And truly, when you get down to the team members of managers, it's probably 90% of energy isn't that time horizon? So team members is today managers is today to a week, senior managers is a week to the 90 days in the quarter executives is the 90 days in a quarter to a year, and the CEO is three to five years plus, right and really driving the longer term. And the key thing is, you know, these are guidelines, the main thing is step back and Zoom Out is are you spending enough time on your core responsibility, ie for a CEO? Are you spending enough time thinking about and working on that three to five year time horizon? And if not, what are you going to do to calibrate it to get it there? Because in order to lead your company, well into the future, you have to be thinking a lot about that future, and laying the foundations for that future.

Brad Giles  18:58

And maybe whatever level you're at, if you look and think I can't think that level, I keep getting sucked into the day to day or the week to week, maybe it says something about the people who are reporting to you, and accountability that they need to have.

Kevin Lawrence  19:15

Right or how you're interacting with who knows what it is, but it's a great thinking model. All right. Well, thanks for listening. This has been the Growth Whisperers Podcast. I'm Kevin Lawrence. This is my great partner, Brad Giles for the YouTube version. Go to YouTube and the growth whisperers search for us. You'll find us there if you want to watch the video for to get a hold of Brad and for his awesome newsletter evolution partners.com.au And for myself, and my, I think, awesome newsletter we share the best insights we can. We're here to help. Lawrence and co.com Hope you have an awesome week and good luck putting your right focus on the right timeframe

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by lawrenceandco

Podcast Episode 96 - Three Business Growth Barriers

When scaling a business, there are three barriers to growth that leaders must navigate.

1. Scalable Infrastructure - The lack of systems and structures to handle the complexities in communication and decisions that come with growth.
2. Market Dynamics - The failure to address the increased competitive pressures that build (and erode) margins as you scale.
3. Leadership - The inability to hire or develop enough leaders who have the capability to manage, delegate and continue to grow leadership underneath them.

This week on the podcast Brad Giles and Kevin Lawrence discuss how each of these barriers affects a growing company.

SUBSCRIBE TO THE GROWTH WHISPERERS:

    

EPISODE TRANSCRIPT

Please note that this episode was transcribed using an AI application and may not be 100% grammatically correct – but it will still allow you to scan the episode for key content.

Kevin Lawrence  00:13

Welcome to the Growth Whisperers podcast where everything we talk about is about building enduring great companies. Because that's something that Brad, my co host and I are very passionate about and enjoy seeing companies do continue to build for future years, generations, decades. So I'm here with my co host, Brad Giles, how you doing today?

Brad Giles  00:35

Very good. Thank you. Things are very good in this part of the world, family's good. How are you doing Kev?

Kevin Lawrence  00:43

Same, I'm doing quite well. Looking forward to the show - what's the topic today?

Brad Giles  01:02

Today we're talking about an interesting subject that is a little bit like the glass ceiling, that many leaders can't see it. But these are real barriers. So today, we're talking about the three main barriers to consistent growth.

Kevin Lawrence  01:26

Awesome. So Brad your word of the day today, or phrase, what is it?

Brad Giles  01:32

Its native genius. Native genius comes from a friend of ours, Liz Wiseman, and a book called Multipliers. And it's this concept where each person has a single thing that they do really, really well without even having to try that hard at it. And I was working earlier today through with a leader talking about one of the team's native genius.

Kevin Lawrence  02:00

Awesome. Well, interestingly, my word of the day is people power, and how the right people power a business and make just amazing things happen. And I've been thinking about it lots, because I look at the, you know, the clients and the CEOs and execs that I work with. And the best ones are such powerful forces of making good things happen. Most of them me like being around them, they bring the best out in you, you bring the best out of them, but just it's, you know, people power and the power of just awesome people. And you know, to weave that together, Brad, people power and the power of that native genius, when you're leveraging that, ooh, a whole bunch of people leveraging the native genius, look out. The other thing about it too, though, is it also is infectious. Like it multiplies you, when you're around the right people. There's people that dread working with their teams, or the people they work with, because they probably got the wrong people. But people give you energy and inspiration and you lift each other up. It's awesome. All right, let's jump into the barriers of growth. And the three barriers, which these are things we see all the time in companies. And when we go into companies that are having a rough patch, often we're trying to figure okay, what's really going on here? Yeah, and you know, and really, it's, which of these three things are at play, that would really get in their way of continuing to grow. And sometimes it takes a bit of digging and a bit of work. It's sometimes it's hard to tell. And, and often, we're, you know, when we go into companies that are thriving and booming when we start working with them, we're trying to look out and prevent these barriers smacking us and knocking us back and slowing us down.

Brad Giles  03:54

Yeah, and that's why I use the analogy of the glass ceiling, because you might not even know that these things are slowing you down. Yeah, that's kind of like you said, that's what you and I are always on the lookout for what is slowing this down? What are the things that don't seem to be right, and it can be a little bit confrontational, sometimes it can be challenging for a leader to look and say, Gee, I didn't think about that. Or I thought that we were doing that really, really well.

Kevin Lawrence  04:27

Yep, yep. It's really interesting stuff. And the thing is like the glass ceiling, if you can't see it, you can't know its impact on you until it's too late and it really hurt. So let's dig into the first one and it sounds very industrial and official steel bowl infrastructure. But really, this is about the systems and tools that enable people to work in a coordinated fashion and easily get the important things right. You know, instead of having everyone writing paper receipts seats and paper invoices, they get lost or miscalculated, or you know, all kinds of things, they have this thing called accounting systems, right. And then name accounting systems to make sure things are systematic and done the same way. And then there's, you know, the training of getting the people to use the system the same way. And again, there's, there's multiple layers and tools, but it's about finding ways to streamline the complexity and create consistently excellent outputs.

Brad Giles  05:28

And that's the key word isn't it? It's complexity, because when you're doing $50,000, a year in revenue, things might not be that complex, you can get away with a lot of things, the demands, or maybe not that much, but then you go up to a million revenue a year, 5 million, 10 million, 20 million. And at every single stage, there is more complexity, there is more communication that's required, every time you're adding a new person, or even perhaps adding a new customer. And all of these complexities require decision making, and that decision making adds to the problems. And if you can't overcome that, if you can't, if you can't ensure that your team are able to freely scale through those with your systems, because you're using the old systems, going back to your you know, paper accounting, you're not going to get there, you're not going to continue to grow.

Kevin Lawrence  06:31

And then the other part is, and you know, everyone talks about ERPs, for example, to manage the back end of the business, the thing is, you get to a point where you get bigger, and if you're on too simple of a system, you actually can't get the data, you need to make decisions. And it's just to say that, you know, you've got a couple of 100 different skews that you sell. And during a couple of different states or provinces or regions. And in different types of customers with different pricing mechanisms, and discounting mechanisms, you start layering all these things in, and you try to want to understand profitability by a SKU, or by a customer or by a sales rep. Sometimes you can't get that you actually can't even get the information. And you can have millions of dollars of additional costs or losses or opportunities that you can't even see. Yeah, and so that's why it's as companies get more complex. Basically, as things get more complex, we need systems to make it more simple. And that's all it all sounds great. But you know, most people have been a part of a Salesforce implementation or an ERP implementation, or that has gone absolutely wrong. They install what should be a great system or tool, but it's not built properly. And it actually builds in way more complexity and puts the business backwards, assuming it doesn't fail. And then you know, that there's one problem sometimes, or sometimes they do install, and they set it up perfectly, but then people aren't trained on it. And people don't understand. I mean, these back end systems, it's serious, serious work to get them right, and to get the value out of them. And that's why, you know, there's programs like, you know, Lean and Six Sigma that become popular, they in themselves can become their own cluster bombs, because they themselves can become additional complexity if they're not done. Right. And they can be awesome if they are particularly lean if it's done, right. There's just it's good.

Brad Giles  08:30

There's a client that I work with here. Now, he's expanded into state and he's is continuing to do that. And he's now his roadmap is saying that we're going to expand internationally. And it comes with a whole set of complexities that his infrastructure might not be able to efficiently handle. Okay. So rather than doing 1 million in the new country that we're looking to go to, he might only be able to do three or 400,000. And that's kind of what we're talking about. And that's not because the sales team or the product isn't competent. It's because there's a whole range of new requirements in that region that the infrastructure that he's got can't deal with.

Kevin Lawrence  09:18

Yeah, and for example, with some businesses, because of the complexity of operating in a different country with different policies and requirements and reporting and all of these other things. Some also say that, you know, like one of my clients is making the move into another country. They know unless they do 30 or 40 million, if they can't do it, because the systems the cost of setting up all the systems that they need in a new country. I think I think was 38 million was the point. If we can't do that volume in the first couple years. We can't we just can't do it. It won't work because they can't give the right investment to get it off the ground. It's fascinating and So the within scalable infrastructure there is the tool set. That's one piece. Yeah. Then the other piece is the humans mastering the toolset and agreeing on, on how we're going to use this consistently. So that's a second piece. And then the third is actually streamlining and refining systems. Because if you've got crappy systems, but you automate them in a toolset, and then everyone uses them in the old way they used to, you're just kind of systematizing garbage. So you often need to streamline and simplify the system. So there's a lot of different variables in this, and generally, the leaders need to dedicate time to getting this stuff, right.

Brad Giles  10:58

And then continuing to dial it in to make sure that it works, and spend time training and troubleshooting and working together being really observant. Like where are the rocks are the blockages that are stopping our systems, our processes, everything that we're doing, from being as efficient and effective as they can. You know, the, you said, the tools that we use, I mean, we talk about people strategy, execution, and cash as being the key tools that you've got to get right. And then when you apply those back to that scalable infrastructure, that's what we're talking about, right? If your people aren't right, if your strategy, your execution, and your cash system isn't right, that you're not going to be able to have that scalable infrastructure, within the context, it's the tools in that set that make it work.

Kevin Lawrence  11:49

It is. Yeah, and last thing, I'll just show you the other pieces. And this drives me crazy, because the people that lead these projects need to be masters and appreciate simplicity. And unfortunately, when the software people come in to give you the demo of all the cool stuff that your software can do, if you implement half of their ideas, you'll generally have a horrible system, because it'd be really cool and way too complex. And the idea of all of these things and systems, what is the minimum, we need to do a great job for the customer? Right? The minimum to do a great job for the customer and man, do I ever see people blow the stuff up, and it's usually the people that get so excited about the systems, because they want to do all these cool things. And they generally, you know, they can easily make a mess. And, you know, one of my clients and another country, we're doing an Oracle implementation. And, you know, everybody wants to get in there, and customize and do all this cool stuff. He said, we're basically going I think he called it a white label out of the box, what Oracle does out of the box, we are going to make the fewest revisions possible. And try and like basically, Oracle's figured out how to set up a pretty good system. Yeah, it was vanilla, I think was vanilla, would he call it? And basically is to, to basically not try and show how smart we are and how special we are by over complicating the system. Try and do it the absolute most basic possible.

Brad Giles  13:25

Yeah, yeah. So that's number one scalable infrastructure, you've got to have systems and structures that can handle the complexities as you grow. So number two, is market dynamics. So as you grow, there will be increased competitive pest pressures, pardon me. That, that may erode margins as you continue to grow. So you're able to handle the market dynamics with all of the systems and the tools and the people strategy execution cash that you've got.

Kevin Lawrence  14:05

Yeah, and it's basically what we've talked about in past episodes, can you maintain your competitive advantage? Yeah, right. And, you know, a lot of people because of desire to growth, have to grow. And, and particularly because salespeople want to hit their targets, and then they start going from instead of, we'll call it trophy hunting, the cool core customers, they just start trying to take anything and I remember one of our clients, um, owned a very premium brand in the clothing industry, very premium. And, and they were so aggressive on their growth targets and everything. I started seeing this these things show up in, you know, these low end they'll a step up from $1 store in the mall. Wow. And I would see this premium product in there, and I saw it everywhere. And basically, they just sold it any anyone would take it, they sold it. And when you're in the premium space, you can't have your premium product showing up in a discount store. It doesn't work that way now, but they got so excited and it was selling like hotcakes. But I said to him that, hey, you got to watch it, you're killing your brand. Because if it's available there, the customer who's gonna buy it in a premium location and sees it there, it's it takes away that takes the shine off the brand. So the point of it is, is that to maintain that competitive advantage and to keep true to who you are? Yeah, people start chasing volume and that sort of like any customers a good customer, and they can easily when you start, you know, commoditizing yourself, there's more pricing pressure and all those other issues. And it can really hurt a business because you can't sustain your sales growth because you kind of lose your way.

Brad Giles  15:56

And, and that's an example of the glass ceiling. Yeah, you can't sustain the growth, right. And that's what we're talking about here. Another way that plays out, again, to your point, if the strategy isn't strong enough, is that you put an offering out in the market, it feels different, you're excited about it. And then you kind of as you continue to grow, you pop up on the radar of others, sales teams, in your competitors. Meetings, let's say, yeah, and then they pull their favourite lever, which is discounting, so then they drop the price, and then they in suddenly, they're trying to establish a price war between the two of you, because they want to maintain their market share. So if you're starting to take market share off your competitors, they're going to begin to pay attention. And then they're gonna perhaps try to erode margin, right.

Kevin Lawrence  16:51

And if you're undisciplined enough to follow them down that rabbit hole of a price war, you're hurting yourself, right, you need to find a different way to fight a battle. And sometimes you might need to do it short term, but it's a dangerous, it's a sign that your strategy is weak. And one of the things you know, I've seen in companies, as you grow your margin, your gross margin percentage. And considering same type of business, you know, because acquiring similar amounts of overhead and support and everything else, your gross margin should stay the same or go up as a percent. That means your strategy is on target. You know, truly, if you had more sophisticated systems to measure it, we would look at more of the profitability taking in allocating the overheads. Because you can have a business that normally generates 38% gross margin, you could have business that you're doing at 20. If it's a paper transaction, wholesale, and you don't ever touch it, you could make more money on the 20% wholesale deal than you can on the 38% regular deal. That's getting a little more complicated. That's like a different type of business. But generally your mark your gross margin should sustain. But often as people go with, you can watch their gross margins start to fall. And it's a bad sign that you've lost your strategy and lost your discipline and your business. I mean, that's, or there's not enough market to demand your growth, you have to find a market.

Brad Giles  18:19

That's one of the primary stress tests of a strategy, will it sustain or grow your gross profit margin? percent? You know, if you're not considering that, then is it really a strategy? You know, like, that's, that's what we're talking about. So, yeah, number one is scalable infrastructure. And number two, is market dynamics. Okay, these are the three main barriers to growth. So what's number three Kev?

Kevin Lawrence  18:49

is the one we spend all of our time on. The first two, you know, they're challenging, but it's People Power man. It's enough of the right people in leadership positions to lead the company ahead. And, you know, it's, it's challenging. And, you know, it's where we put a lot of energy with our clients, making sure that we're always developing leaders and then recruiting externally when we need to, but if you can not, I was having a great chat with a friend over the weekend, who's got an awesome business. He's doing really, really well with it. And we were just, you know, this is the after dinner party, late night chat digging into it, and he's like, he can't find the leaders. He doesn't have enough leadership pipeline growing in his business based on the stages and what he's doing, mostly because they're there. They have a very wide footprint, they're not concentrated. And, and we're talking about, he can't get them. You know, I was sharing with them some of the strategies that some of our clients use and generally, our clients invest heavily in recruitment and development. and there's no other end. If you're not just like investing in your CRM or your ERP, or dialing your strategy, it's, it is a serious investment to build the army to build the team, whatever you want. And, and those that, don't you, you tap out because you can't sustain the growth. And when you have the right leaders, they become part of the growth engine like they power the growth. Yeah, yeah, that is, it's a very hard one. I was, you know, chatting another client on the weekend as well, who, you know, we built that growth engine, and we helped them to recruit onboard. 20 new leaders in this company. Yeah. And we were screening them all the talk reading and dialing it in and build a world class team took a few years. But it was a heavy investment. Yeah, it's a lot. It's very exciting. But otherwise, you can't, you can't, the growth won't work.

Brad Giles  20:56

It won't. And the key here is that these people must have the capability to delegate and predict, okay, that you've got to have enough leaders in the business as you grow. It reminds me I have a friend of mine who lives in San Francisco in Silicon Valley, she was the CEO of a tech company there. And we studied together in Boston, she, she was growing her company so fast that they were adding one new country every month. And she Yeah, it was It was outrageous growth. And she said, we can, we've got everything else dialed in, we've got a ton of money behind us, we've got the strategy and the execution and the cash and the systems and the tech and everything is right. But the biggest bottleneck becomes being able to hire enough people. Now you can go to a country, and you can pay the most amount of money. But that but there's no, there's no guarantee that these people will be excellent at being able to delegate and predict, you've got to be able to get this bit right.

Kevin Lawrence  22:18

And that's why in our organization, we put so much energy in both talent reviews, reviewing the existing team, and every 90 days doing things to enhance and develop the existing team. And getting it so that we're always pushing to build a stronger, more capable team. And then secondly, using top grading, to for the process of identifying what great looks like, and then screening people against that insanely thoroughly. So that we, you know, end up with 7080 90% hit rate on putting the right person in the job who's going to be awesome. And it takes a little more rigor upfront. But poor lead, you end up when you have a better process for building the right team. And even with your project you're working on around onboarding, and then onboarding them really well. You get better results. And you eliminate that barrier to growth. But generally, people don't invest enough time and energy in this at the smaller stages. That's why they don't grow. For our clients that are larger, they invest heavily in this stuff, because they know it's what's required. But some people don't get that lesson. And they kind of hold themselves under the glass ceiling. And instead of smashing through it by just heavier investment and capability and support to get this stuff done. I mean, in terms of building and building the internal leaders and sourcing them externally, when they can build them enough.

Brad Giles  23:40

So one way to think about the barriers to growth might be if your firm grew 5 or 10%. Last year, maybe the barriers to growth are preventing you from effectively growing and profitably growing at 20, or 25%. Maybe that's the kind of difference that we're talking about here, which when you then add it up across a number of years can be a massive difference. Yeah.

Kevin Lawrence  24:08

And the other one would be is the amount of stress on you as you grow. Because if you have a spectacular team around you, the growth isn't as stressful because the load is being shared meal is that many hands make for light work. A load is being shared across the team. The other variable could be you might not have the team structured, right? You might have great people, but it might not be structured right to leverage the strengths of the team going back to people's native geniuses and they've been leveraged in it. Yeah, yeah.

Brad Giles  24:39

It's very interesting. And so three main barriers to growth. Think about a glass ceiling. These are the things you might not be able to see them. These are the things that might be stopping you growing, number one, scalable infrastructure, the lack of systems and structures to handle the complexities in communication and decision that come with growth. Number two market dynamics, the failure to address the increased competitive pressures that build and erode margins as you scale. Then Kevin's going to walk us through number three.

Kevin Lawrence  25:12

Leadership, as we've been talking about, and which I'm very passionate about. You just don't have enough of the right people. You can't grow them, or source them in the market. People that can be great leaders and manage work, delegate work and make things make sure things that are done amazingly well. And ideally, at the same time continuing to grow leaders underneath them. Very good. Very good.

Brad Giles  25:35

Good episode. Good to chat. Hopefully, as a listener, this has helped you some way to think about what might be slowing your growth. So this has been the Growth Whisperers if you'd like to see us, you can watch us on Youtube. Obviously, just search the growth whisperers there. You can find Kevin and his very interesting newsletter at Lawrence and co.com you can find myself in my equally interesting newsletter, that evolution partners.com.au This has been the Growth Whisperers with Kevin and Brad, lovely to chat to you today. Have yourself a great week.

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by lawrenceandco