Podcast EP 134 | Onboarded – What is onboarding debt, and how can you calculate your onboarding debt?

When people don’t understand how to succeed in a new role, they do what they think is right. But that might not be the right thing. They won’t understand the culture, the technical and process expectations and your expectations as their manager.

Onboarding debt is the liability you carry with each new hire. More onboarding debt means a less successful team.

We talk about Brad’s new book Onboarded and how every new hire you employ carries a liability from what they don’t understand, known as onboarding debt.




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 whispers podcast where everything that Kevin and Brad talk about is to do with building enduring great companies because we like to see companies continue to grow and thrive over time getting better and smarter and having a bigger impact on their team and the culture or the culture, the constituents that they serve in their community or their business, whatever it happens to be. Great to be here today, Brad. How you doing? And what’s kind of the what’s the kind of word or phrase that’s on your mind or concept that’s on your mind today?

Brad Giles  00:45

I’m better than I was before? Because I just heard you refer to yourself in the third person. So that was entertaining so I’m

Kevin Lawrence  00:54

glad I’m glad I could provide you a little joy.

Brad Giles  00:57

Yeah, I’m good word of frozen day. Debt. Now, this episode today is about onboarding debt. But yeah, it’s interesting. I saw someone say, talking about this serviceability of their mortgage, how it’s gone, how it’s pretty much doubled in the last year and a half to two years. And, yeah, how that’s having the intended consequences through the economy.

Kevin Lawrence  01:27

Awesome. Well, mine is perspective. You know, I just spent close to a week, 10 days in the Middle East, in Dubai and working with some companies. And, you know, I’ve spent, like I said, before this, I’ve done 54 trips to Dubai. I went there every quarter for 13 years. Yeah, it’s like my second home. And I love that place. And I’ve got a lot of amazing friends and colleagues there. And but when I went there, it’s the perspective shift that Dubai gives me. There’s a lot of stuff that’s the same, but many more things that’s different. They think bigger. They move faster.Tthe country moves fast. But it was the it was the perspective. And that’s what I love about travel. And being different places. It’s even better when you know, people there and you get to spend time with people who live there. But it’s perspective how different perspectives can give you very, very different thoughts and beliefs. And and how obviously, travel is a great, a great catalyst for that. So perspective and debt, and you could rack up a lot of debt, gaining those perspectives by traveling. If you don’t have the cash to do it, it can get very expensive. But yeah, that’s, that’s the thought. So let’s dig into today’s show. Brad, what are we what are we digging into?

Brad Giles  02:43

So this is episode three of four about my new book called on boarded, how to bring new hires to the point where they are effective faster. So one part of that is this concept that I bring called onboarding debt. Okay, so we’ve all heard about sleep debt, right. So we know that sleep that we’re supposed to probably, on average, get seven to eight hours sleep a night, but if you last night didn’t get seven or eight, you got five, let’s say, for only one night and then reverted back, you’d probably be okay, you could probably even sustain that for a few days. But you might, you know, get a bit grumpy. Certainly, if your kids might get a bit grumpy, let’s just say, but what about over a few weeks or a few months or over the long term, right? So you can have, you can carry a little bit of sleep debt for a couple of days. But the accumulated debt that you get with not enough sleep can have second order consequences, real tangible effects to your body that, you know, like serious disease problems. And so the that’s the analogy to onboarding debt. So if you don’t onboard well, and people don’t understand how to succeed in the role. Doesn’t matter if the ABC players, whatever it is, if people don’t understand that misunderstanding, can become a real problem, or that lack of understanding because people are doing the things that they think right. But those things may not be the right things. And they can cause lots and lots of tiny little things that can add up such as people may resign, ultimately, they may go I can’t really succeed here. Or people, they may make mistakes, or there could be productivity issues, they may not be doing it the most efficient way. So we’re talking about what is the cost? What is the cost of onboarding debt? What is it?

Kevin Lawrence  04:47

And sometimes these people even go toxic and start to drag down the other people on the team who were happy beforehand. You know, think about this, and I’m thinking about so many examples and as I’ve shared In an earlier episodes, I get very passionate with CEOs when they’re hiring new people on making sure they onboard them properly. Because basically, the default intent of a new executive is to come in and show what they can do. And to do it their way and prove their value and all of this key stuff, and it becomes really, really messy really fast. You know, just with a client last week, and they have a newer HR person who went on and made some changes, and to their performance review process, which I’ve been to this movie a few times. Someone who’s new to the company, may or may not have been the right person to make the choice, tweaks their performance of your process, and people are talking about how it’s long, and cumbersome and complicated. And all the energy goes into administration versus the conversation. And at the end of the day, it’s, you know, this person wasn’t brought up to speed. One of the things in this company is everything’s meant to be simple. Right? Their operators didn’t want to make it so not a bad person. And I don’t even know that, it may have that was likely a bad decision. But they were doing the best they could from what they knew. They just didn’t know enough to do it in a way that would have been effective for the whole organization.

Brad Giles  06:19

Yeah, yeah. Last week, we spoke about good fit and bad fit, right? And the problem, when we look at a person who’s been hired on reflection has been good or bad fit. Like, what happens is that we can think, well, there were always going to be a good or bad fit, there was nothing that we could do, there was no point. Instead, we’re thinking about people along a spectrum from will fit to definitely won’t fit, everybody falls within there. And, and so our job is to cause them to be a successful fit or an unsuccessful fit by way of the process. Now, this comes about by three areas. Okay, first of all, it’s the cultural expectations. So what are the cultural expectations that we’ve got a that a person has got to understand about our team, we do things differently to other people’s that’s core values and behaviours and all that stuff? They’ve got to understand what’s right, and what’s wrong and what grinds our gears, perhaps. Second is the technical and process expectations. We do things slightly different to everyone else. And then third, is the managers expectations. Who does that new hire report to? And how do they define success in their role and what has to happen as a result of that? So if they no one will understand on their first day, all of those things? No one, it’s just simply not possible. And so that gap is what we call onboarding debt.

Kevin Lawrence  07:42

Yeah. And the hard part about it is it creates the debt that both the company and they have to pay, because of their frustration, with not knowing enough, and it’s harder for them to succeed. In many ways, it’s kind of like they’re running in mud and they can’t get traction, and everything takes way more energy than it should. And then for the team, they’re getting frustrated of why are they doing it? Right? Why are they doing it weird? Why, you know, it’s just unnecessary burden for them. And the organization I think about so many examples, like I should say, before, I know, one I remember a company, we were having our retreat annual planning retreat in Mexico. And there was this new exec that had joined. And, you know, this, this team is like a family like it’s tight. So they invite him out, you know, to the dinners after the events and things like that. He never went to any of the dinners after the events or anything, because he just did his job and went home. Because in the company he was working with that’s what you did. Well, in this, it’s kind of like inviting you to Grandma’s 95th birthday and you don’t attend. It’s a problem. But nobody knew. So we were down in Mexico. And on the first night, you know, someone said, Hey, why don’t you come join us in a hot tub. And he just went in early and went to bed early. And what he didn’t realize is that the invite was like a rhetorical invite. It wasn’t Do you want to it’s when are you going to. And even the woman on the team like that this is a team. It’s a young team and the woman don’t want to be sitting in a hot tub with eight guys. No, but they sit on the edge of the hot tub and have conversation and are connected. They’re not going to you know, and that’s their choice whether they get it and get an entrepreneur, this isn’t the point. The point is, they are not there’s not something they want to be doing. But they but they go because it’s connection time. It’s like family time.

Brad Giles  09:43

It’s a cultural expectation. That’s all it is.

Kevin Lawrence  09:46

It is a cultural expectation that you are after dinner hanging out, conversation, hot tub, whatever it happens to be. So we told this guy I pulled them aside and said, just so you know, when they invite you to the hot tub, it’s rhetorical. It’s actually you got to be there and not being there is like insulting them. It’s like what’s wrong? You think you’re better than we are or what Oh, who knows what the story is, it’s actually not acceptable in this company. One goes to the hot tub, we’ll go to the hot tub. So I explained it to him. He’s in the hot tub. Everything’s all good. He just in one place, he worked before you did your job, and he went home. And this is more like a family. That’s not how it happens. And again, you know, if someone doesn’t tell you, how do you get upset with a person?

Brad Giles  10:39

Well, you can’t. And that’s the point. There’s so many, many, many tiny things that define success in a role across these three areas. Now, if that person wasn’t fortunate enough to have a Kevin whisper in his ear, then when would he have picked that up? He could have ultimately just get forced out of the team. Okay, but his thing, it’s not Kevin’s responsibility.

Kevin Lawrence  11:07

And let me clarify why, by the way, because we did 360s. And we were going to give the feedback and he got some horrible feedback. I was giving him a heads up to prepare him, because that’s normally not my job anyways. But it shouldn’t have to come to that. It should be explained what the cultural norms are up front. So it doesn’t need to be to that point. Yeah,

Brad Giles  11:26

it is the new hires manager’s job to get them to understand. To get them to understand all of those things. And that’s the whole purpose of onboarding. I’m advocating a 90 day onboarding process. But this is an example of best practice, right? You do you. Yeah. Okay. We certainly don’t want it to align with the legal, statutory compliances of your part of the world so that if they’re an unsuccessful fit, you can exit them without recrimination without issue? Yep. Why we’ve got those probation periods all around the world built into law.

Kevin Lawrence  12:01

Yeah. It’s almost like they need a probation period the other way around. You know, for the customer the extra is because some people quit. But you know, is the company actually doing their job? To help people be successful? are they holding up their end of the bargain?

Brad Giles  12:14

Yeah. But that’s, that’s capitalism. Like, that’s the market will, you will suffer onboarding debt, okay. And you’ll have to service that debt, just like you need to serve as financial debt, right, with a monthly repayment through lower productivity, worse, attrition and cultural challenges. You know, I remember there was a, there was a guy, David, who I worked with. And he reported to a CEO on a team that I worked with. He’d been with the company for seven years, okay. And after seven years, this was becoming a bit of a problem. And I asked the CEO, so how well David understand how to succeed in the role on a score of one to 10? Okay, and he see a rated 4.5 After seven years, okay. And this is not uncommon. If you’ve got a problem, you ask that question, how what do they understand how to succeed in the role? And that’s really what this book is born on that question, right? So. So if he’s rated 4.5, you know, it’s not necessarily David’s fault?

Kevin Lawrence  13:25

It’s absolutely not. Unless the manager and managers fail at these all kinds of things, giving feedback, telling people what they need to improve telling people what they need to do, like people can’t read your damn mind. So ideally, you have processes upfront to bring people on board. Now, maybe David didn’t have the cognitive ability to absorb or the desire to do it. But generally, people don’t give enough direction. And you know, there’s a chapter in my book, your oxygen mask first. It says, teach people to meet your expectations. Yeah, you know, and there’s this belief out there that CEOs and executives are hard asses and tough and demanding. And although they do have high expectations, they often don’t give enough it’s common for them not to give enough feedback. Some are great at it. But giving feedback and because people just want to do great work, but they got to know what you want.

Brad Giles  14:18

Here’s the thing about Dave, Dave had a team of like, 16 – 17 people. So if Dave had an understanding of 4.5, what was the onboarding debt? That was carried, right? Because there’s no other opportunity to learn. It’s we think that people are going to learn by osmosis after onboarding.

Kevin Lawrence  14:36

But how you be in your job if you only have that level of understanding of how to do your job? Like it seems illogical? Like, how is it possible?

Brad Giles  14:48

Well let me reframe that question. How well does David understand how to succeed in the role to the to your definition of success Mr. or Mrs. CEO? Yeah. Yeah, I mean, it’s not but that’s but that’s how we ended up having to fire people. That’s how we have people having to leave.

Kevin Lawrence  15:10

And that CEO is doing a horrible job if they allowed that.

Brad Giles  15:16

Yeah, yeah. Possibly or that CEO had a wonderful opportunity to learn and grow.

Kevin Lawrence  15:26

While you’re so nice.

Brad Giles  15:30

So yeah, another story. I remember there was another CEO, or, you know, when I did the interviews for this book, here’s a quick one. There was one person I remember who shall remain nameless, and and this person said, here’s the thing, I tell them once. And if they don’t pay any attention, I’m not going to tell them again, I’m too busy, I don’t have the time for that. If they’re good, then they’ll take it. And they’ll remember and they’ll do it the right way. But that person would have incurred massive, massive onboarding debt. There was another person that I remember, and that person wanted to get new hires working as quickly as possible, right. And that’s the subtitle to the book, right? We want to get them working more effective faster. So he did an on a permanent induction, right, which was, you know, a day or two, a couple of days where, oh, this is how you do this, this, but very much like training, induction, but no onboarding, okay, so people didn’t understand how to succeed in their role. And what that meant to is that every month when I’d meet with the CEO, he was always cleaning up people’s problems. And he was always spending all of his time solving this problem solving that one, oh, why can I get good people to work? For me? That’s like, the subtext is all they don’t understand how to succeed. Yeah,

Kevin Lawrence  16:54

help them help them to win. Yeah. I think another example, I was thinking about, like, we had a meeting, the awesome client, I’m working with their health tech company do an amazing work. And we did our quarterly talent review. And there’s a manager that’s been on the team for nine months. And I think we didn’t get cover it. We didn’t cover it last quarter. But he’s been on teams, awesome leader. And we’re going through the talent review on his key team members. And he didn’t understand the document. Like this is a core document that we use to help us to clarify, you know, how our people are doing and how we can help them to perform better and also to make our people decisions. But as we went through it, I’m like, damn it. He’s a new guy that joined the team. No one explained that to him. And a reality. Even as the is the coach and kind of adviser to the team, I probably should have done a mini session with him to teach them the document and how it works. It’s a it’s one of our most important documents for talent management. It is our most important document for talent management. But he didn’t even understand some of the questions. And I was like, That’s a fail. That’s, that’s on us. That’s a failure of us for not training and teaching them how to do it.

Brad Giles  18:14

You know, in the in the book, one of the things I talk about is assessing a person who’s completed their onboarding process and asking three questions. How well does New Hire understand the culture on a scale of one to 10? How well does the new hire understand the technical and processes and how well do they understand their managers expectations? And the example that I give, it’s a six, a six and a seven that the person gives hypothetically, which equals an average of 6.3 or 63%. Right? And then we go back, and we say, so they don’t understand 37% of the role at that point. Okay. And so if you were to buy a map that didn’t show you 37% of the roads in a city, you’d take it back, right? Yep. Or you get lost, but you get lost, and that would be expensive. And that’s onboarding debt.

Kevin Lawrence  19:16

So that’s the summary of what we’re talking about here is that if you truly don’t onboard people properly, you incur debt, and the company builds a debt, which they got to pay interest on that debt. The individual feels that debt, and they got to put additional energy and labor into trying to do their job and redoing things and dealing with a lot of frustration, nobody wins. And it can be solved by spending a bit more strategic time upfront, to map out what’s required to be successful. And now you’re not going to cover everything. But you could probably cover a heck of a lot more. Not only will you get more, a higher percentage of the people that you bring on being successful, most likely, unless your hiring practices person worked, but more likely you’ll help more people be successful and sooner, which is a benefit to you benefit to them. And it’s just a matter of being conscious about how you do it. And that’s not leaving it up to luck.

Brad Giles  20:12

Yeah, Indeed, indeed. All right, good chat. So avoid onboarding debt by doing an effective onboarding process. The financials outstanding. That’s for sure. So, next week, we’re going to be transferring from onboarding debt into what do we actually do about this? We’ve spent three episodes, talking about what it is and how it works and why it’s an issue. Now, next week, we’re going to be talking about how you actually effectively do that and drawing from the book. Good chat today. So this has been the growth whispers podcast. My name is Brad Giles. Again, we’ve spoken about the new book onboarded today, and my co-host, Kevin Lawrence, you can find him at Lawrenceandco.com, he has a very interesting newsletter every week. You may or may not be interested in probably May. And myself, Brad Giles. I do a weekly newsletter as well. And you can find me at evolutionpartners.com.au Hope you’ve enjoyed this episode about onboarding debt. I look forward to chatting again next week. Have a great week.