Motivating and Pleasing Your Employees – SBS 47

Greetings, folks, and welcome to the Small business show at businessshow.co. today is December 30, 2015, and here in Durham, New Hampshire, I'm Dave Hamilton.

And I'm Shannon Jean coming to you from Concord, California. How are you, Dave?

I'm good. Almost finished, man.

Yeah. How can it be so. How can this date have snuck up on me so quickly? But it's good. Yeah. A couple of. One more day and then we're rolling over them. Like you've said to me before, we start again at the top.

Start at the top of the hill. That's it. Yep, yep. Well, hopefully you're starting at the top of the hill or. Or the bottom of the. Whichever one is better. I don't know.

Yeah, yeah, no, it's good. It's part of that delusional small business owner mindset, I think, that you have to have sometimes.

Yeah. You know, people. It. People called. Referred to it with Steve Jobs as his reality distortion field or magical thinking. Right. But it. You need to. And, And I mean, he. I like to reserve those terms for him just because he took it to a whole different level. But you need that. And in fact, it's not just that you need it as a small business owner. It's a prerequisite. Like you. You wouldn't be a small business owner if you didn't have that, or at least you wouldn't be one for very long because you need to delude yourself. And hopefully, at least for a brief period of time on a regular basis, you need to be able to delude the people around you. Yeah.

And I think the key is what you said. Being able to delude yourself at first gets you over, you know, to that point of, okay, now I have other people following me now I'm gonna, you know, move it out and do it to them. And that's how you get stuff done.

No, and it's. It's how you become a leader or how you are a leader is. Is by convincing other people to believe what you believe is going to happen next.

Yeah, yeah, yeah.

It's. I mean, it's, you know, it's good stuff. Yeah, I know.

Yes, it is. It is. It's true.

It's actually, at some level, it's like, this is a topic that I want to go and spend three shows on and really dig into it. And at another, it's like I might not want to really evaluate too much of this because then I'm going to start overthinking it when I'm actually having to do it every day. So.

Well, yeah. And I think that, you know, with every business owner that I've talked to, you know, there is also, along with that ability to kind of delude yourself or stretch reality to achieve things you otherwise couldn't. There's a ton of self doubt that all of us have. And I mean, we just, you know, did an interview with, you know, very successful web guy programmer, you know, Bruce Lindy, and one of his comments when I asked him about, oh, so when did your, when did you think your business really had crossed the threshold and was an ongoing, you know, viable, long term, you know, success? And he's like, I'm not really sure it is right now. You know, and I think that questioning, it's kind of the flip side. You, you delude yourself, but at the same time you also having a healthy bit of doubt or skepticism maybe you know, also keeps you moving forward as well.

It has to be the right amount though. Like you said, a healthy bit that, you know that that's the key part of that phrase because if you have too much, it will crush you. And I've been at, I've had those moments in. Yeah, right. Where it's like, what am I doing? I'm a fraud. You know, like all of those things. Right. It just, you know.

Yeah. Nobody knows.

Right, right. Nobody knows. How have they not figured out that I'm, I'm just making this up as I go along?

Yeah, yeah, that's right. And I think that part of it is what keeps a lot of people from taking the steps to launch their own business, develop their own product, whatever is, is they, they don't have enough of that, Del, you know, or the confidence or your inner judge, whatever you want to call it. You definitely need that balance. One to one to convince yourself you can do it. The other one to say, man, you better keep hustling because you don't want to fail. And that's good stuff.

Yeah, you're right. It's a balance. That's true. Yeah. Because you can't just delude yourself into thinking, I don't have to do anything today. It's all just magically going to work out. You need to have that drive. You need to, you know, and we talk about not making fear based decisions, but at some core level, right. You know, fear is there, that drives you to the next thing each day. And you know, I don't know, I don't know if it's fear, obsession.

Well, it's. Yeah, I don't know what it is. But it's something a little bit of doubt, a little bit of fear. But you do have to be careful. Especially I, you know, businesses up, up and down, and only people that are not in business think it just, you know, hey, it just keeps going up. And every year you make more and, you know, you pay people more. I mean, it just doesn't happen that way. But during what I found, the hardest times for me are not when. Well, let me back up. It is still difficult, but often more difficult can be when you're, when you've had a lot of success because then you're looking to, okay, now what's my motivation? You know, where you got to find your muse, if you will. But when you have a challenge in front of you. Speaking for myself, when I'm challenged of how are we going to do this? How do we come up with a capital for that? This isn't working. It's much easier for me to throw myself at it, which hopefully leads to another peak of success. But when I look back, it's the times when I've had a lot of success, when I've sat there and gone, okay, now, now what's next? What do I do? Yeah, interesting, interesting. But, but today, you know, we're not talking about motivation.

Actually, I, I do, I wanna, I have to. Right. Because it's the end of the year and I'm, I'm thinking about not only motivating myself, but motivating, you know, my staff and specifically my salespeople. And so I do want to take us on a little detour. I know we want to talk about.

Cash, but that's okay.

You know, you never want to. You just said when we have a year, whatever, a period of time, and a year is a good way to look at it, that's gone well. The question is what to do next. Right. And I think about that for myself, but I've also been thinking about it for my salespeople. I've never set official quotas on them now, because if they don't want to, if they didn't have the drive to do better to best themselves, then they wouldn't be here anyway. Right.

It's like, you know, let me ask, without giving up too much detail, let me ask you a question though. With those sales type positions, are, are they getting some kind of draw or a base salary that.

Yes, you. Okay, yeah, it's a base plus commission.

Yeah. Yeah, that's right. Like most, most places are. And that's where the hard part for me is, comes up with okay. How much do you need to sell to at least cover the cost of having you here?

Right. Yeah.

And, you know, and maybe that's an unwritten kind of quota or something like that.

Well, that, yeah, they, and, and thankfully it's been a long time since I've had a salesperson that didn't even meet that. And if they don't, then they're gone. I mean, it. Because it. You know what, why would I hire you if you're going to cost me money? You know, I mean, and with, with salespeople, it's very, very easy because you, you know. Right. That their work product is the money that comes in. So it's not obscured by, you know, some process of red tape that, that goes through six other departments and this, that it's like you, you do it and do you bring in enough? Yep. Great. Awesome. So at least you pay for yourself. Let's. Let's do more than that, right?

Yeah. Hopefully you make more than. Than I do. I'm happy to pay you more.

Absolutely. Right. Yeah, of course. And I have had salespeople that have made more than me. Yep. But so the question is, you know, when you have a salesperson there, there are times, and actually I've seen it with both of the guys that I currently have on different years where one will go up for a couple of years and then have a down year, but in that down year that they have, the other one actually goes up. I've never had both reps have a down year at the same time. I have had it, but it didn't happen this year and it didn't happen last year where both. I have had it where both reps go up, but I've never had. It's been a couple of years since that happened, so I want that to happen. Right. I've seen it where one rep goes up, you know, two years ago in 2014, one rep went up in 2015. And it's like, okay, you know, am I, am I thinking about this too hard? Should I be looking at it over an even longer period of time? Should I, you know, how do I, how do I make sure that 2016 is set up so that they both are going up and perhaps even a third one. Right. Because I think we might have need for a third rep to add this year. So that, that's sort of my, my question is, is, you know, how do I, how do I do that? It. Does it make sense to institute quotas? And I don't know that it does. We are always talking about how did we do versus, you know, year over year, you know, January and year over year, Q1 and all. That's just a constant conversation here.

Oh, yeah. I mean, that's a rubric, right? You have to have something that you're going to measure against. And I think that, you know, if I was a sales person and that's, you know, I've done a ton of that with these businesses. I mean, for me, it's always.

The.

Money followed behind me. It's like a trailing indicator. Yeah, for me, uh, some people, it's not something, it's the leading indicator and it is the carrot. But for me, it was always to be inspired, to either be inspired by people I worked with or a concept or, you know, something that caused me to get on the phone, get out of bed in the morning, you know, just pound the pavement to get those new customers or to open those new relationships. Especially, you know, and probably for the last 10 years, for me, I still considered a sales position, but what I'm doing is finding suppliers.

Right.

And trying to bring them into the fold. And it's the same kind of skill set.

Oh, totally. Yeah, yeah, yeah, yeah, yeah, yeah. Because you're generating something out of. I don't want to say nothing, but. But it's not like you get to work and somebody says you have to build 14 widgets today and you have all the parts in front of you. You just need to go and it do. No, that's not how this is in sales or biz Dev. It's all the same kind of thing. You've got to generate it all by yourself.

Yeah, yeah. And like tech restore for our refurbished product business. It's not like we just say, oh, we're getting low on this. Go buy some more. Well, you don't need those deals come and go. And there may be a day you have to go spend five or six hundred thousand dollars and there may be a day where you can't spend a dime. And so, you know, we have quotas, purchasing quotas, you know, in order to keep us. I don't want to go too deep into this, but sure, like, like a sales quota on a purchasing side, you. In order to make numbers on the sales, you have to have numbers on the buy side as well.

Of course, you need to have inventory, right?

Yeah, inventory. And so it's, it's a, it's a constant battle. So for, you know, and I don't know what their, the salespeople, what their currency is, you know, what is it that really Motivates them. Is it, you know, like I said, are they being inspired? I'm sure they are. By working for you. And.

And they like the flexibility and all of that stuff.

Yeah, yeah, yeah, yeah. And so how do you, as a business owner measure that? Of course, you want to see those sales numbers go up, but I also like to put in, okay, how do we get, you know, show a client we're just really taking good care, or how do we tell if we're really taking good care of a client and hopefully see that they're spending more money or we're giving some value to them, maybe above and beyond what a typical sales relationship or something? Because, you know, those customers you already have are much less expensive to keep than it is to have to go find new ones over and over and over and over.

That's right.

So I think that. And I don't know if that, you know, that's just my take on it. You have to set that. Hey, I like to let them set their goals as well.

Yeah.

And then. And then try to match them up with what I'd like to do.

Yeah. And I've been having this conversation, and the question that came up, that it's a good question, is what do we measure? I mean, of course we measure the bottom line, because that's the obvious thing, but what are the stepping stones to get there? And yeah, one of the things was, so do we look at the number of contracts that we've sold? Not necessarily the amounts of those. Right. But does it make sense to just say, all right, look, we need three more contracts month to hit our. Our quota. Is that a metric that we can look at? But then does the. Do we wind up trending down the average price of those contracts? Right. You know, but I like this, this, you know, measuring customer satisfaction, for last lack of a better term, you know, it's a little generic, but. Right. But yeah, finding a way to do that. Yeah. That's interesting. All right. Yeah.

Good. Yeah, it's. It's tough. But, you know, and then, like, the. The great thing with letting the folks set their goals themselves, in my experience, normally they set higher goals for themselves than I would otherwise do.

Right. Yeah. Yeah.

You know, which is for sure, great.

For sure.

Yeah. And then you can look and say, okay, well, then here's what I've said. And then you go and meet, you know, in first quarter. How'd you do? What is your thing? This is where we're at. And they take ownership over to, you know, much more when they're involved in setting when it's their goal.

Right?

Yeah, yeah, yeah, exactly. Yeah.

It's good stuff. I want to make sure that both Jeff and John listen to at least this half of this episode.

So there you go.

Good. Thank you for. For letting me know.

That's just. Yeah, yeah, no. No worries. I love talking about this stuff and.

Yeah, me too.

I'll have to deal with it and, and get through. So I actually, I want to have.

John on as a guest because this year, I think it was this year he started a side business where he's making. It's called Rockingham Teamwear. And he makes not just T shirts. He makes all kinds of things for, you know, T shirts and sweatshirts and. And whatever he needs to make a lot of. It's for sports teams, youth sports teams, but he's doing really well. Yeah, yeah, yeah, it's. It's.

That's another. The thing is, I would say that's another way to measure success in. You want to get the. The employee involved in it as well. And what I always ask people, okay, so what do you have going, like you said, on the side.

Yeah.

What is your thing? And you know, sometimes you get people work for you and they look at you like, what do you mean, this is my thing? Why, why do you want me to do anything else? And I, you know, say, well, no, no, I want you to do something else for yourself.

For you. Yeah, right. Exactly. Yeah.

Because, you know, when you can kind of help motivate them to start something on the side, do a little business, sell something on ebay? One of the questions we ask person we hire is, have you ever sold anything on ebay? And have you ever done anything with PayPal? Because, you know, they're just simple question, but you gotta. You get a sense of, is this person, you know, kind of, can they be deal motivated? Do they like this? Are they comfortable, you know, money online and doing these different things? And it's very telling to me because that's one of the first things I would say is somebody said, well, yeah, I want to earn some extra money. I said, well, here's. Go find something you can sell on ebay, you know, and do something. And whether it's from your garage or whatever, but from a career development standpoint, you know, those are great things. And I think that's a great way to help motivate us. Somebody. It's different, and I think they take it different. Now I've had people leave after starting something and that's, you know, you could be a byproduct of when you're helping them get themselves going. But that's a great thing to, to develop someone's potential and, you know, let that. And see them succeed. Even if it's beyond your, your company walls, it. It definitely helps your folks be more loyal and look at you a little bit differently. And I found it works out really great.

Yeah, yeah, yeah, it's true. Right? Yeah, I, and I, it's interesting, right, because I've had various employees over the years that, that create their own things on the side, and sometimes they, they, they feel like they need to keep that from me. John didn't, you know, for. Just for clarity, he was happy to tell me about, and talk to me about it, and I'm happy to, you know, share my thoughts on it. Not necessarily that he needs advice or help, but we all need advice or help. That's why we do the show. But, you know, it's like, no, you don't have to hide that from, I mean, if, listen, if somebody were to start a business doing exactly the same thing they do for me and they're using all the contacts that we have, it's like, okay, well, then maybe that's a problem. That's a problem. Right?

That's a problem.

Yeah. But otherwise, I mean, you know, you got to live your life. And, and I, I mean, of course that resonates with me. I wouldn't be doing this if it.

Didn'T, you know, you got it.

Yeah.

And I always make a comment, you know, I'm a very selfish person. I typically do things because I enjoy it, and if someone else enjoys it, that's great, but it's a byproduct. But, you know, part of running companies for 20 plus years, when I look back at what I've enjoyed the most, it's developing, you know, people and the hundreds and hundreds of employees that we've, you know, run through these businesses, you know, people come and go, but being able to see them succeed and move on to something, you know, hopefully you give them a career path within your business. And we've had people here over 13, 14 years. But, you know, other folks, they get to a certain point and, you know, I always ask the question, it's like, you really want to be fixing that in 10 years? You know, do you want to be repairing those iPads in, in five years? And they look at me with little horror in their eye and, and I.

Say, well, they don't know how to answer that question. You know, they don't Know what the right, what the right answer is to you. Right. You know?

Yeah, yeah. And. And I've actually, you know, I've had it backfire on me and I've had people tell me, you know, I, I feel too much pressure. I don't, I don't want to talk about that kind of stuff. And so you have to kind of feel your way out with people that work for you. But if you, if it is the right kind of person and they can get something else going, I try to find out, what do you do when you leave? Are you into painting or fishing, photography, whatever it is, you know, wouldn't it be great if you could develop a little side business involved in something that you're passionate about? And, I mean, I've even helped them. And, you know, we had. Remember one of our first interviews was Abby. Yeah. Vacco from Fast Mac. And he, I know, has taken it either to a further level where he's become an investor in, you know, some of these startups and business, you know, businesses that his former employees have, have left and done. And he made a comment to me, he's like, well, you know, I might as well help them and get some additional benefit from it than just having them leave.

That's really smart.

Yeah, it totally makes sense. So, you know, I mean, this has been a long, you know, segue, you know, to talk about how do you. Or how do you. Should you set quotas or what do you do that. But I think that as. As your business develops, looking at those, looking at those kinds of things in a different light are very helpful as a motivator for you personally. And also, I think can be really helpful for your employees to look at and go, wow, man, they're not just interested in grinding me on production or the numbers or whatever.

Yeah. I want my people to be happy. And that really is the first thing I worry about every day. It might sound crazy because you'd think, well, don't you worry about the cash flow? It's like, well, I kind of have to. But that's a kind of have to thing. The rest of it is I need to make sure the machine works. And it's not that I need to. It's. I want to. I want the machine to function.

It's giving you something back, right?

Yeah. Right. Yeah. And, you know, and in order for it to function, these various people that are all different than me in different ways need to be happy. And at some level, I mean, listen, there's going to be parts of the job that that suck. That's true for me. Right? Yeah, yeah. And every job, Every job, you know, and, and sometimes you gotta, you know, sit somebody down and say, I noticed you're unhappy. What's the reason? And I actually did that with one of my guys recently because he was, it just seemed a little, you know, things were a little rough and he's like, no, everything's okay. And like two hours later he called me. He's like, I know exactly what my problem is. Like, oh, that's great. Yeah. And it was, it was something. It was just, you know, stupid stuff that had sort of built up with a one. A vendor that we were dealing with. It was a little bit hairy and, you know, it was stuff that shouldn't bother us, but eventually it builds up and it does. And it was like, all right, good, great. We're all good.

You know, And I think I would make two comments. One is, you know, I've come to the realization that I can't make them happy. I can only give them the opportunity to be happy.

True, that's true.

And yes, I think that's important because you go nuts. And the other thing is, you know, at a certain level, paying people more does not make them happy.

No, sometimes it freaks them out, man.

Yeah. And. And you know, you obviously, you know, you want to get them on a path where they can, you know, mature in your business and make more money over time as hopefully they grow their. Whatever it is, you know, their sales channel or their production, whatever, however you can measure it. But time and time again, I've just seen it where getting more money is, if anything, a short term thing. It was some study, you know, I don't know, done, you know, where the people are like, oh, above a certain dollar amount, people are like, oh, I'm fine, I'm comfortable, you know, And I think it was like $70,000 or some, some number where, you know, it just didn't have much of an impact on people above that and it didn't increase their happiness, you know. And so, I mean, you see, like I said, you certainly have. Money is important, obviously, for our own personal cash flow. And you need to, I think they need to see that they have somewhere to go. You know, they're, they're, they can increase and they have some sort of path, you know, I think is really, really important.

Yeah, yeah, they. Right. They just need to. Yeah, well, I mean, people just need to be whatever it is for any given person to be happy. That's what needs to be addressed. And it's different for each person. And it, you know, running a small business, it's much easier to accommodate that. Right. You know, and if, if I had Even, you know, 50 employees, that might not be as easy to do as, you know, as it is now where I have, you know, 10ish.

Yeah, sure.

You know, because I can sort of carve out it. Well, you want, you need different things. Great. That's fine. You know, that's great. And that's the beauty of a small business.

Yeah, yeah. And we always talk about, you know, the, the power, flexibility. Well, that same flexibility you have in your life as a, you know, a business owner. You want to. One of the most powerful things you can do is give that to your employees so they don't miss their kids, you know, school, play or.

Right.

They can, they can. Oh, I got this. That came up. Can I shift this? Can I do this? Yes. I mean, you want to say yes more because that will, you know, certainly again, build loyalty. And you know, as long as you're covering your bases and, you know, somebody's not taking advantage of it, you want to let those, let those things happen. And it builds a great sense of team work. And also that, oh, we're not just grinding out production every single day. Especially if you're in any kind of job where you're doing the same thing over and over and over, whether it's making sales calls or, you know, putting a cog in a wheel, you got to have something more.

Oh, you got to feel valuable and. And yeah, and. Yeah, for sure. Exactly. Well, this is so this is interesting. We intended to come here now in a. In a meta sense. This is very fitting because we intended to. As we started this show, we were both convinced that what we were going to talk about today was how cash is king. And ironically what we did was talked about how our employees happiness is more important than cash. And by nature of pushing that topic off, we actually proved that. We actually believe this.

That is interesting. Yeah, yeah, yeah, yeah.

So the cash is king thing is going to have to wait for. For another episode or so.

Yeah, we'll do that next. Next year.

Yeah, next year. That's right, man.

The first time I've said that. So. Yeah. And I think that, you know, there's a. It's like a circular definition here. You know, if you focus on. At least in my experience, by focusing on the things we've just spent the last half hour so talking about it leads to that cash. You know, we're hopefully that cash requirement coming and it just keeps going around. And the more you build on it, hopefully, you know, the more successful you are.

Yeah.

And but you got to have the cash. So we're definitely going to come back and talk about that one, you know, next, next year, talk about ways to get it, ways to keep it, and, you know, what's happening in one of my. And I'll say this sarcastic One of my favorite things to talk about is the bank.

Well, let's we'll, we'll do that next year, folks. Thanks so much for listening. Thanks for everything this year. Happy New Year to all of you.

And have a great new year.

Yeah. And let us know what you think. Feedbackus show.

Awesome. Take care, everybody.