Turbocharging Employee Performance with CEO of The ALL IN Company, Danielle Mulvey #31

After all, all art is experience. Hello and welcome to The Company Doctor. Today we're joined by Danielle Mulvey, a former flight attendant turned entrepreneur who runs her multiple businesses using her own winning employment and retention strategies. She talks to us about turbocharging employee performance, innovative solutions such as shadow days, and the power of giving individuals ownership of their roles. She also throws an absolute banger of a tune into the Company Doctor music playlist. For details on that playlist, to peruse previous episodes, and to subscribe to future ones, visit thecompanydoctor.com. In the meantime, Danielle, Gary, take it away.

Hi, Danielle. Thank you so much for joining the Company Doctor episode on turbocharging employee performance.

Welcome. Thank you so much. I'm excited to be with you guys today.

Yeah, no, we're excited to have you. We've got lots of questions for you. We've been digging into your past and we're really interested to have this conversation. Yeah, you're looking worried now, but we'll be very gentle. But yeah, so the topic is turbocharging employee performance. And it's interesting because I think during COVID everyone thought the market was going to disappear on everybody. And obviously, in some industries, it did that, but it's gone the other way. So, getting good people and keeping them is pretty topical right now. So, we're really keen to have you. I thought maybe as a starting point, Daniel, if you could tell us, uh, about yourself and introduce, uh, All In so that we know who you are and where you're from. That'd be great.

Sure. So I started my first business at the ripe old age of 25, which was almost 25 years ago. And my, my hiring strategy when I started my business was to hire people younger than me because they wouldn't know any better if I was screwing up since I was a, you know, young entrepreneur and such. And it worked for a while. And then eventually it caught up with me and I made a hire that was really a bad hire. And I woke up one Monday morning and I'm like, can I call fake sick in to my own company? Like it was at the point where I didn't even want to go in and deal with this person for another week. And it was at that moment that I said, I can't live like this any longer. I obviously have no idea what I'm doing when it comes to recruiting and hiring people. And I don't wanna make the same mistake again. So, I just went all in on studying and learning how to recruit, how to interview, how to hire the right people, then how to retain them. You know, this is back in the day, so this is the '90s. So, kind of back in the days of like Jack Welch, when GE was huge and hot and top grading was kind of the buzzword and you had A, B, and C players, et cetera. And then over time, as things have changed in a variety of areas and such, um, my husband and I now have several businesses and, uh, we have businesses all over the country, um, offices out of state from where we live in California. And so, you know, my processes and systems have, have evolved tremendously over that time. And I befriended Mike and I, Mike Michalowicz, the author of Profit First. And we come, you know, kind of started as entrepreneurs at the same time, kind of in that '90s phase and such. So we've become really great friends, and I am collaborating with him on his next, next book, which is tentatively titled All In. And it really is focusing on how to, you know, get employees to act like owners, and, you know, what, what does that take in an organization?

Perfect, perfect. This is a great intro, and, and You know, don't give everything away yet because I got— I need to ask you questions. So I've got one question for you, and you probably get asked this all the time, but looking at your resume, you used to be a flight attendant, and I'm trying to work out how you went from that into this because there's a big change in direction. What happened? How did it work?

Yeah, so you know what's funny is, is I, I did my gap year after I graduated college. So after I graduated university, I took that year to kind of just do something fun, kind of decide where I wanted to be and such. And what was interesting is I— Mike and I were actually just talking about my experience as a flight attendant today when we were working a bit on the book and such. And I worked for— I'm just going to name names— I worked for American Airlines, and I was miserable. Like, I— when we were talking about it, I was like, oh, I've got PTSD talking about this now, because it was so rigid. Like, there was no ownership of owning my role as a flight attendant for American Airlines. Like, there were words you couldn't say. There were things that they had on the plane that you weren't allowed to use in service. Like, it just was— it was, it was miserable and such. And, and I was talking about how, like, the opposite is in the United States, an airline called Southwest Airlines. And what's funny is, is you have Southwest Airlines, you have American Airlines, They're doing the same thing. They're transporting people in the sky from point A to point B. But the difference is, is that Southwest employees are amazingly happy being a flight attendant versus American Airlines flight attendants, eh, a little grumpy.

They are not so happy.

Not so happy. Yeah, because, because you know what Southwest does? They empower their flight attendants. They empower their employees. They give their employees ownership over their role. They don't say, hey, you've got to read this word for word in the announcements and, you know, do not deviate. Do not say any other word. You know, at American Airlines, you couldn't say, oh, we'll be on the ground soon. Like, that was a huge no-no. You had to say, we'll be landing soon. And at Southwest Airlines, I mean, any flight you take, you know, you get a different version of a similar spiel, but they give their employees ownership of how they want to deliver the service. Once they're up in the sky and in the airplane. And, you know, look at that, it translates into satisfied, happy, delightful employees.

Well, that's what I want to dig into. I think that's really interesting. So, you talk, and I've read quite a few of your things, you talk about 5-star performance. Before you tell us the detail of that, what does good look like? And how do you know if you've arrived there?

Yeah, so the interesting thing about recruiting and hiring people is there really hasn't been a defined objective system. Most people are making hires off of their gut, Googling questions from the internet, you know, kind of just doing what everyone else is doing. And what it really takes is understanding, number one, what you really need in that role and what success will look like in that role before you even start recruiting and interviewing people for that role. You know, and oftentimes people just say, oh, you know, I need someone to do XYZ because, you know, everyone that's recruiting and hiring for this position are just asking people to do XYZ, but there's no definition of what success is. It— you've got to really be specific about what XYZ is and what success looks like in doing X. So, you know, if you need someone who is great at, at, at closing sales, Most job descriptions are going to say, hey, we need someone who's great at closing sales. Very vague, very generic. And what you, what you should be doing to attract like that high-level performer is you need to say, hey, we're looking for a sales rock star who can close 10 new deals a week and upsell half of those deals. And being very specific about what success looks like. We've just quantified, we've put numbers, we've put dollar signs. In terms of what that key responsibility is for that individual. And, you know, the beauty with starting at the recruiting side and being specific about what you're looking for, what success looks like, I mean, that's what a 5-star employee in that role looks like. They are closing at that rate. They're closing 10 deals a week and they're upselling, you know, half of them as well.

So you're basically talking about, yeah, being, being specific enough so you know what good looks like, basically. Is that what you're saying?

Yes, defining it. Everything is about getting specific and defining it.

Can I ask you a controversial question? Bring it. You talked about your 5-stars being the best of the best. Mm-hmm. Do you always need the best of the best? Can you afford it?

Well, how can you not afford it? So, you know, we define a 5-star employee as the top 15% of available talent in the market for the role. So, you know, someone could be a 5-star bookkeeper, but they could be a, a 1-star pilot. So, you know, it depends upon the role. I'll be honest, I'm a 5-star entrepreneur, but I'm a 2-star bookkeeper. I could get a job tomorrow as a bookkeeper, but I would be like, I could do it, but I would hate it. Like I would procrastinate on it. I'd be a 2-star bookkeeper. So 5-star employees represent the top 15% of talent in the market. And the other beauty about a 5-star employee is that one 5-star employee does the work of 2 or 3 1-, 2-, and 3-star employees. So, you know, it takes 2 of an average ho-hum or worse employee to do the work of one 5-star employee, and you pay them all the same. You can't pay for performance. I can't take someone who's a 2-star bookkeeper and say, hey, I'm going to pay you $10,000 more, and just hopefully think that that $10,000 is magically going to turn them into a 5-star bookkeeper. It's not.

That makes sense. But it's part of the challenge. I've been a manager for years hiring loads of all sorts of people. Sometimes people look and smell good, don't they? But when they arrive, they weren't as good as you hoped. How do you avoid those sort of pitfalls?

Oh my gosh, absolutely. So, I've got two children, a 13-year-old and a 15-year-old. And since they were little, I always have said, "What matters, saying it or doing it?" And their response is, "Doing it." because that's really what matters. And, and I think so many hiring managers and companies fail in their recruitment and hiring process because they don't test the skills of the employee. So I could get a job as a, as a bookkeeper tomorrow, and, and I know enough about bookkeeping to be dangerous, but if someone gave me a test on bookkeeping, I probably wouldn't pass it, right? So it's So important to test for the specific skills, the specific aptitudes that you need for the role. And you know, this is all about filtering it out. So if a 5-star employee represents the top 15% of available talent in the market, 1 out of 7 candidates is a 5-star employee. So what you have to do is you've got to filter out those less than 5-star candidates so you're not tempted by them. That's kind of what the problem is if you're only interviewing 3 or 4 people, statistically you don't have a 5-star candidate in that pool of 3 or 4 people.

That makes sense. How do you test attitude though? I get the aptitude part. How do you get— how do you test attitude?

So what's interesting is we look at attitude in kind of the, the 11 qualities of a 5-star employee. So we've defined 11 qualities of a 5-star employee, and so we've got questions around, around, you know, looking at how to assess that person's specific quality. And, and that's where you kind of get sort of those attitude things. Like, one quality that comes to mind on that, that list of 11 is being limber. So what's interesting about that is that's actually— there's 2 qualities on that list of 11 that are coded red, meaning they're very difficult to change. So, you know, if someone's not limber, then, you know, that could be a deal killer for most positions. Because especially small businesses, we need people that can pivot, that can flex, that, you know, hey, we did this, this way for the last 2 years, but now we're gonna do it different. Hey, we're gonna implement this new software platform and we need everyone on board. And so, you know, you need people to be limber. And so, a way to do that is through your interview questions and getting specific. And we help people create very specific interview guides. So, you know, like, I mean, when you turn to the page on limber, There are questions that you have designed for what you're looking for in a potential employee and, and what you need of them to be limber. And then at the top, you're gonna score them based off of that, those specific interview questions.

Danielle, can you, can you translate limber for us, us Brits? We don't know that word.

Sure. So, so limber, um, another word for limber might be being flexible. So, uh, being amenable to change. Not being so rigid, but being able to pivot, to move, to, to change and to evolve.

Brilliant. Gotcha. That's really interesting. So, so tell me this. It's currently a candidate's market because, you know, COVID has had a reverse effect than we expected. Does that change the approach and considerations, do you think? Because obviously if you're going for the top 15%, there's less people available or you're competing more. Does it change the market?

No, because they're still out there. They're still out there because again, it's a numbers game. Okay. The, the 5-star candidate represents the top 15% of available talent in the market. So, there is a 5-star candidate out there. Now, I will say that, you know, recruitment is, is an important aspect. And I find that a lot of businesses sort of like do one thing, like they make a job post on the, you know, the biggest career search engine platform, et cetera, and that's it. And, you know, a 5-star employee could be not looking for a job necessarily. So, when you are recruiting, you want to cast as wide of a net as possible because you want to attract as many candidates as possible because it's a numbers game. Remember, 1 out of 7 is a 5-star employee. So, if you want 3 potential 5-star employees, you need effectively 21 applicants. So, you You know, if when you post on these job boards online, you're only getting 5 or 6 applicants, you need to do more because you need to increase your applicant pool. And there's a variety of ways to do that. But I also am a fan of the virtual bench. So, actually, I just hired someone in May who I worked with like 20 years ago and such. And we, you know, just always stayed in touch on LinkedIn, et cetera., and, you know, she posted something about taking a new position and I congratulated her and said, hey, how much, how much would you cost? Like, I was, I was just kind of looking for that kind of person. She called me 5 minutes later. So, she still went through our process. Like she was, I knew her, but my team interviewed her. Like she still had to take the assessments. She still had to go through our process and make sure she was a fit.

You're keeping your bench warm, which makes, makes a lot of sense. The, the thing that's interesting to me is there's a lot of effort to hire people, as you are saying, and I, and I get it and it makes sense, but a lot of managers I work with are too busy to onboard the people that they've spent a lot of time hiring. Yeah. What is your advice on, you know, onboarding people so all the effort you put in pays off?

Yeah, so you've got to look at getting a return on that payroll. So, you know, when someone comes in and the clock starts ticking, there's a couple things going on there. Maybe as the manager you're too busy because you're doing the work that other people should be doing. That's usually the biggest red flag. And so if you look at, okay, now I've got this asset, now I've brought on this one person, I need to offload what I've been doing to this person. I need to get them kind of like up to speed right away. A great way to do that is to, you know, show them what they need to be doing and then make them document the processes, the systems, et cetera. And now, because that will also help you in future of, of helping to increase people, but then it also starts to give that person ownership of the role. And if you want to talk about turbocharging employee performance, the number one thing to do is to find a way that you can give ownership to an individual in that role. Just kind of like I talked about, you know, when we started about being a flight attendant, I had no ownership of the role for American Airlines and I was miserable. Southwest Airlines has delighted happy flight attendants because they've given them ownership over their role.

Yeah, no, it's good advice. I like the advice. I guess the people are listening now wondering what the 5 stars are. And because we haven't got much time, have you got a quick version to what the 5 stars are?

Yeah, of course. So the first star is core value alignment. So it's really important to, you know, if you're A lot of people are like, oh, if I could just clone myself. Well, the way you clone yourself is you hire people who are aligned with your same core values. Like you share kind of that same DNA at the very core. But you know, core values are not just words. You need to have clarifying statements. So you're very specific about what you mean about those core values. And you use those core values in your job posting because again, that's going to attract the right people. That's going to attract the 5-star candidates. The second star I mentioned earlier, the 11 qualities of a 5-star employee. The third star is assessing their aptitudes and skills for the role. That's gonna vary by role. Maybe you need someone to be super creative. And then, um, you know, in one of our businesses, we have claims examiners. I don't need them to be creative, so we don't assess for creativity in that role. But, you know, and then we're testing their skills. I mean, you know, if I'm hiring a bookkeeper, they're taking a bookkeeping and an accounting test. Then the fourth star is success metrics. So we talked about this a little bit earlier too. You know, you kind of want to get down to the 3 to 5 key responsibilities for the role and then defining what success looks like in that role by applying objective measures, numbers, dollar signs, et cetera, to what success looks like in the role. I need someone who is excellent at closing sales and can close 10 deals a week. And upsell 50% of them. And then the final star is return on payroll. So you need to be getting a 3x to 4x return on the salary that you're paying that individual. So if you're paying someone $50,000, they need to be producing $150,000 or $200,000 in revenue to the organization. And so, you know, this just kind of all comes in alignment. In terms of maximizing and turbocharging not only employee performance, but now company performance.

I like that a lot, Danielle. It's an interesting approach, and I like the model. I was reading, from what I've read, that you think you've cracked the code on, you call it recruiting and retaining. I think you've got like a 90% success rate. I'm interested to know your thoughts on the retaining part. I get the recruiting bit. What's your advice on how do you return? Because it's hard to retain people, right? How do you do that?

Right. So, so the first thing is, we've talked about this a little bit already, but you need to give them ownership of their role. So when someone feels like they own it, like, I mean, are they gonna abandon it? No, no. It just makes it stickier for them. You know, we always have a pride in ownership of something and, you know, I mean, we've all maybe rented cars before and, and do we park way out at the end of the parking lot? No, we just take the closest spot and, oh, it might be a little close to that vehicle. That's fine because we don't own it. But when we own something, we tend to stick with it and, and nurture it and cherish it. And so that really kind of helps build the stickiness of the employee to the organization and sort of just now a love for their, their role in the organization, because, you know, there's something that they own. And it's very obvious that how much that ownership contributes to the success of the company. The second thing would be, you You know, make sure that your employees are working in their zone of genius where they're really good at. So, you know, if, if someone hired me as a bookkeeper and didn't test me and I got in and such, hopefully they would recognize, oh, she's not such a hot bookkeeper, but she is really good at strategic planning and strategic analysis. And that involves numbers. Maybe we should shift her to there because we really, you know, people perform best when they're working in their zone of genius where they're really good. The third thing would be is you've got to listen. You mentioned earlier, you know, like, oh, how do you onboard people if you're so busy that you're like working in the business, you don't have time to onboard people. And so it is so important. You know, I mean, in my organizations, I work hard and, you know, I'm lucky to have the freedom to have time in my schedule to appear on podcasts and to work with other entrepreneurs and such. But, you know, in the hours that I am in my business and working on my business, I am listening. I am listening to my employees. They are not having to compete for my time. I make time for them. I do one-on-one check-ins with them. I am listening to what's going on and being present for them so that I can be supportive of them and encouraging them. And, you know, maybe offering a bit of advice here or there. But I'm also listening to them as an individual. You know, we've got our work identity, but we also have our personal identity. And so, it's really important that you know what's going on in their life. You're building rapport and you care about them as a person. I have one individual who dreams of retiring to Costa Rica one day. And she is a little, a little concerned about it because she doesn't speak Spanish. So, you know, I mean, but that's a dream of hers. So, you know, every year when we buy a calendar for people's walls, she gets a Costa Rica calendar. I don't speak Spanish, but I'd be happy to pick up a few words. So, I bought us picture word Spanish dictionary so we can start picking up a few words and, you know, she can, she can go farther than me in the, in learning Spanish and such. But, but listening to your employees is really important, both from a performance professional and a personal perspective. And then appreciate employees. So, this is the last one in terms of turbocharging employees. You want to give genuine appreciation to your employees. We do this in our daily meetings. We run two different kind of structures depending upon the organization and such, but it's a great opportunity. They last like 7 minutes ideally, but we're starting with a celebration. People can give shoutouts to other people. It's an opportunity for us to come together and really appreciate the contributions and the work that people are doing because we're sharing, hey, here are the 3 things I did yesterday, here are the 3 things I'm going to do today. And so, you know, everyone, it's very transparent in terms of how people are contributing to the organization. And, and someone can say, hey, yeah, thanks, Peter. You know, I was kind of slammed on something and he was able to pick up that package and deliver it to that client. And that saved me a lot. So appreciation.

That's good. I think I want to come and work for you. You sound like a good employer.

Please.

Just a couple of questions now. I know that you've used your learning in your own business. You're a very successful entrepreneur in multiple businesses. I'm interested to know if you look back now on what you know now, because it's easier looking back, I guess, would you have done anything differently that would make the biggest difference for you going forward, knowing what you know now?

Oh gosh, I would have implemented shadow days long ago. So we implemented shadow days probably like maybe 5, 6 years ago, and those are great. That kind of happens at the end. We, we call our, our hiring process a gauntlet, so people have to go through many phases, and we're filtering out the people that are less than 5-star through the process. But at the end, when we're ready to like, we're, we're we're pretty like excited about a candidate, and the kind of the last step is for to do a shadow day. And it's an opportunity— we, we do this with people that are remote-based as well, or with people that are in office, but they join us for like a 4 or 5-hour day. Uh, we pay them for their time, and they get to kind of see like what really it is like under the hood in our business. What is our culture like? Who are the people that you're going to work with, et cetera. We have a meal during that time where, you know, we can be a little bit more casual and get to know each other on a personal basis and such. And I got to be honest, I have had people who complete shadow day and say, you know what, I was wrong. I thought I wanted to work in construction material supply, but I think I'm going to stay in property management because this is just a lot of numbers and and a lot of SKUs and just a little too much for my brain. Okay, great. No problem. I paid that person 5 hours. That's awesome. I don't need them to start and, you know, get 2 months into the job and like really totally hate it at that point. So it's a great opportunity. I had— we had someone else who came through shadow day and, you know, was like, oh, so everyone eats lunch together every day. And I'm like, yeah. And she's just like, oh, I don't think this is for me. I prefer to just kind of eat by myself and such.

Would you do anything differently based on what you found out now? I'm keen to get, because that's the wisdom from your experience.

Yeah. Well, I mean, so, so I would implement shadow days long ago and I only implemented them about 5 or 6 years ago. So only for about a quarter of my entrepreneurial life.

Span.

I like the idea of that. And just an honest question, have you ever made a hiring mistake? I mean, I know you, you've got a lot of rigor, but things don't always go well, right?

And you know what, I made a hiring mistake about a year ago, honestly. And I hired family friends for like an internship position. It was a paid internship. They were family friends and they were kind of in between because COVID was still happening. And so they were back home needed to work a bit. They had just graduated, but they were wanting to, you know, move to New York City. So I brought them on board because they were family friends, delightful young ladies, recent college graduates, etc. But I didn't take them through our process.

Yeah, that's good to know. In fact, yeah, mixing family is always a challenge.

Yeah, exactly.

Cool. Okay, I've got two quick questions for you, and then George is going to ask you about your musical taste. One comes from the employee point of view and the other one from the employer, if that's okay. So just kind of quickfire, if I'm an employee, what are the tips I can use to progress at work?

So, you know, if, if you see a problem, identify the problem and come with a solution. So there are so many great opportunities for improvement in organizations, and sometimes, you know, don't wait on the boss to kind of realize that the problem's happening. You know, take ownership of it and say, hey, We're having a bit of a snag here. I think if we implemented the software or if we did it this way, or if we reversed order, that we could be more efficient. So identify problems and then come with, you know, some solutions to get the ball rolling on fixing that problem.

Brilliant. And then the last one is top 3 tips for turbocharging employee performance for an employer.

Okay. So, so the top 3 tips I'm going to, I have to, I've got it. I've got to repeat the 4. Uh, so ownership. So giving people ownership of their role and what they do, making sure that those employees are working in their zone of genius, what they're really, really good at. If they're not really good at it, if you hired me as a bookkeeper and realize I'm a 2-star bookkeeper, you gotta let me go unless you have something else for me that works in my zone of genius, cuz it's just never gonna work. And then you need to listen to your employees, listen to them professionally and personally., and you need to appreciate your employees.

What a great way to end. Danielle, that was really great. Your passion comes through, and your experience has been really interesting. I'm going to hand you on to George, because he wants to ask you about your musical taste.

Thanks. Yeah, thank you very much, Danielle. That was great, really interesting to listen to. I love the idea that you guys call it a gauntlet. It's sort of both terrifying and also quite exciting. So yeah, just really interesting stuff. I've got about a million questions actually for you, but I'll save them for maybe part 2 of this episode. In the meantime, I think I mentioned earlier at the beginning of this episode that we were going to ask you to throw a favorite song onto our playlist, and you got immediately sort of animated and you knew exactly what it was that you were going to throw in. So what is your sort of— is it your favorite song or is it something which motivates you? What is it and why is it?

Yeah, so it is So What by Pink, and I'm not going to sing it for you, but it's So what? I'm a rock star. And it just has this energy to it, and it just, to me, is empowering. Like, nothing matters because I am just going to focus and I'm going to perform, and I'm going to do it like a rock star.

Excellent.

Well, that's a great choice. It's our first pink number, actually. So congratulations, and thank you very much again. Thanks to you, Gary, and thanks to you all for listening. We hope you enjoyed this episode of The Company Doctor. For more information on attracting 5-star employees, and how it can benefit your business, head on over to 5staremployees.com, using the number 5 rather than the word. Thanks again to Danielle for being a brilliant, informative, and energetic guest, and a big thanks to you all for listening. See you next time!