Mike Ames: A Masterclass On Scaling

Welcome back to another episode of the Recruitment Mentors Podcast. I'm your host Hishem Azzouz, and on this week's episode I was joined by Mike Ames. A bit about Mike, he started in recruitment in 1988 and since then has sold two businesses and been involved in two businesses that have sold. And the first one was his very own, which sold for £24 million in 1998, and the second one was a business which he had shares in and was involved in very heavily at the start, which he then achieved and was part of the business exit in that business. So two events, two moments which a lot of recruitment entrepreneurs and people in recruitment dream of. But when he achieved that outcome of having a ton of money, no longer working or needing to work, was when Mike was actually in his darkest moment. And we spoke a lot about that. And since then, from 2004, he's had his very own business again called Flair, where they're a consultancy. They help small growing recruitment businesses scale with more predictability. We spoke about 360 models— are they the right ones? We spoke about systems and processes that are going to help all of you that are running recruitment businesses scale with more confidence. There's so much value in this conversation. I'm really excited for you to listen to it. Enjoy. Mike, welcome to the podcast.

Well, it's great to be here. Thank you for inviting me on. Looking forward to it.

Yeah, so for those of you, uh, that don't know Mike, um, I'd be surprised very consistent in doing LinkedIn Lives, sharing content on LinkedIn, which is why I was really excited to have you on. And for me, I just think it's a good place to start by just giving everyone immediate context on like where you are on your journey, what you're up to now, but most importantly, yeah, the journey that you have been on. So this has been a quite long journey for you, so I've got some key sort of moments, some bullets that I think be relevant for people listening. But if I do miss anything let me know. Yeah, um, so got here, started in it, but then switched to recruitment in 1988, uh, set up your own recruitment business in April 1989, uh, but, um, by 1990, unfortunately, your business partner passed away. So then you found yourself running this business, uh, by yourself and moving forward. Um, you sold your first recruitment business, uh, for $24 million to Modis in 1998. You then stayed on for another 2 years before leaving with around circa $8 to $9 million. You then was involved with a business called Crimson from 2001 to 2010 and helped in a number of different ways, various different ways, but then left in 2010 and kept your remaining shares in that business. You then actually was involved in an exit and part of the sell in that business at Crimson. And then now the journey that you've been on is with Flare, which you started in 2004. Which is ultimately focused on micro and small recruitment businesses and helping them scale. Probably worked with over 100 recruitment businesses as a consultant over that period. And this is the journey you're on now, building Flare, having a recruitment company. So probably haven't done that justice on trying to condense all those years into some bullets, but there's some of the key moments.

Well, it is just the highlight to me, Hishem, I'm going to be honest with you. So yeah, I think, I think that's a very good summation. Of the last 30, whatever, 35 years, 36 years. But I think it has been a journey when you explain it in that way. I think of all the things that I've learned and all the mistakes that I've made, which have been like huge numbers of them. So I'm not afraid of failure. So just give it a go and see what comes out. I'm coming to the end of that journey now. It's funny when you describe it, I am coming to the end of it. I'm not gonna work forever. And it's all that knowledge I was afraid would disappear. And just disappear into the ether. And that's one of the reasons that we're recording all these videos and doing all this work, to try and suck all of this stuff out of me and stick it somewhere where people can get access to it all if they want to. I mean, they might not want to bother, of course, but that's, that's the journey. That's where we're at at the moment with the journey.

So basically, I normally start with like the million-pound question, but I just wanted to start in a bit of a different place here because I'm just really keen to dig into Mike's perspective, Mike's beliefs around successfully scaling a recruitment business. So I just wanted to start by like, like, how would you describe, uh, what you do? Let's start.

Okay. Um, what I do is I give people a map of the maze. So everybody's journey is like a maze. It's full of attractive cul-de-sacs that you think, yeah, I'll go down there and you get there and then you realize it is actually a cul-de-sac and you've got to come back and start again. Having traveled it many times, twice for myself, as you quite rightly pointed out, and well over 100 for my clients, I kind of got a map of the maze. So what I do is help people to get to where they want to be faster and for less cost and for considerably less stress. Um, and I mean, we can talk as long as you like around that, but that's essentially what it is— providing people with a map of the maze, a lot less attractive cul-de-sacs, Hishem, those things that seem to be the right decisions but they're not. But you only realize that when you've taken them.

Yeah. And then, and then just to add a bit more context on that, uh, which is why I was really also excited to speak to you, is the, the business that I'm building, we typically find ourselves speaking to recruitment owners that are anywhere between yeah, 5 to 30, 40 heads, have aspirations to grow, um, and oftentimes find themselves yo-yoing from maybe 10, 15 people back to 8, back to 9. Uh, so your sort of sweet spot is those types of founders? Yeah, I know not all of them, but that, that tends to be the sweet spot for you, right?

It is. Yeah, I think if you were to describe an ideal client, you've got certain characteristics about the company, which is their size and what they do. I really don't do very much with high street type businesses. It's not really something that I work with. So tends to be professional services or more senior hires, probably up to search, do quite a lot of search work. And the bottom line is, is what they're looking to do is grow, which isn't difficult, just hire some more people, but to grow and keep their shape. So that means to not lose profitability, because when a business grows, a recruitment business in particular, One of the things that tends to suffer is the percentage profitability. They become what's known as a scissor company. So if you imagine a scissor, the top finger there is the turnover, it's going up, the bottom finger is the profit and that's going down. So they want to maintain their profitability. They also maintain their service levels, which again often drops as you grow. The clients become dissatisfied. And also you still want to remain an employer of choice. Very often as you grow, you become less attractive for people working there. Just, it's not the same as it was, you know, people say. And of course what happens then, you lose clients, you lose staff, it shrinks. And then guess what? You do the same thing all over again in exactly the same way and get the same results really. So what I do is help people to build a scalable business based on 7 pillars, 7 components. And it works for any service business. It doesn't have to be recruitment. But it works really well in recruitment. And my background being in recruitment is very tailored to that. But it's just building a business which is safe. You know, there are 3 real priorities in a recruitment business when you're growing it: profit, value, and safety. So if you've got to have all 3. So if you have a profitable business that's building in value, but it's not safe, then something can happen and set you back. Say, for example, the things that happened to us in 2020. And you can have a business which you think is worth a lot, but actually its profitability probably means it isn't. So you need something which is very profitable, which is going to give you value, and ultimately which is safe. And so that's what we do with these 7 pillars. Makes a huge difference if you focus on that. Do you think, I was going to ask you actually, do you think that recruiters spend too much time on some of the more external measurements, like how many staff that they've got, their headcount, or their turnover, or number of offices that they've got, or the number of countries that they operate in. Do you think people sometimes get sucked into that little bit?

I think sometimes people can, because if you go down to the pub or you meet up with your friends and you have your own business, one of the first questions when they go like, how— like, how's it going? Like, sort of oftentimes people say, oh, like, how many people work for you now? And these things, right? It's typically a lot of the time what sort of people ask, or you're expected, uh, a lot of the time to grow because you have your own business. So, um, yeah, I, I do think sometimes people can get caught up with that. But actually, I think what the actual challenge is, is people, uh, aren't clear on what type of business they want to build. So they find themselves sort of not clear on, do they want to hire? Should they be opening more offices?

So yeah, it's interesting you say that. Can I just dive in on that point? Because that's a really interesting point, right? If you own a business, any business, doesn't matter what it is. So your business, my business, anyone's business. As the owner, you have a core mission. So you might have a general mission that you publicize to everybody. We want to be the best at this, that, and the other. That's fine. But you've got a core mission as the owner. And I think too many owners forget this. They move away from it. They don't really focus on it. And that is to give you the lifestyle that you want, which is a combination of disposable cash and free time. You know, it's no good having loads of money but no time, and vice versa is not much good either. The second thing is freedom at work. So when you get to work, you're free to do the things you like, to do the things you're good at, and to do the things that have the biggest impact, and pretty much nothing else, what they call the $1,000 tasks. And the third thing is to become independently wealthy, to reach a stage where you can say, do you know what, I've had enough, I'm out of here. Too many people lose sight of that core mission. And I think if you've specified those 3 things, written them down, put numbers on them and understand exactly what it means, I think that gives you a perspective to tell you what you should grow. Because you can even sketch out the size business that will give you those things. And often it's smaller than people think it needs to be. If you grow that business and make it work well, you keep that team together. What happens with a team that stays together? So you don't keep adding people to it, losing people. It goes into profit overdrive. And I've seen it countless times. In fact, the, the show that I did recently with Matt Ellis, you know, they trebled their profits. So they were a big profitable business in the first place because their team became stable. In a, in a, in a team that's chopping and changing starters and leavers never get to this stage, but you reach this stage and suddenly your profits double or treble, but your costs are going up. It's amazing when it happens. And that starts with a recognition that you don't have to keep growing all the time. You don't have to do that. You grow, then you stabilise, which means you get your profitability back up. You make sure the service levels with your clients where they need to be, make sure everyone's happy. Then if you want to, you can grow again. You can, it's like a step really. And it's interesting when you look into this in the detail of it all really is that the thing that drives people to grow is often what you say, it's that, you know, those recruiters and we all know they're a dying breed now, but the Rolex and loafer brigade, you know, that it's, yeah, yeah, we got an office in Dubai. They seem to want an office in Dubai. I don't know what that's about, but, and then they're not making money or they're not making vast amounts of money. Because they've lost track of it all. It's there to serve you. Be very clear what you want the business to do for you, and then construct a business that delivers it. And that will answer most of the questions of should I do this or should I do that, just by doing that one thing. And it's, it's enlightening when you go through that process, Hishem.

No, I can imagine. So I do— before we just go into all the sort of your strategies, beliefs. I have a ton of questions on that, and I'm sure that's what people are dying to learn from. I just wanted to ask you, if I'm honest, you touched on it, touched on it earlier, but you just mentioned there around getting to a point where, uh, yeah, time freedom or financial freedom. Like, why, why are you doing what you do? Because you don't have to be doing this right now financially, right? I'm just curious.

Like, that's an interesting story which we which I shall suppress, right? So when I was running the first business in the '90s, I was desperate to get to the stage where the business didn't need me on a day-to-day basis, right? Desperate to get to that stage. Reached it and realized it was horrible. I like to be involved. So that's when we decided to sell. Didn't like working for the Americans, but needed to work just for my sanity really. And then I gave up work in 2000 and my business partner had left as soon as the sale went through, and he just had this great life. He bought this farm, he bought this place in Spain, he traveled, he bought these bloody horses and sheep and God knows what else, and he just had this great life. And I wanted it until I started to live it. It was horrendous. My idea— I was 40, I suppose, then— was to stop working and retire and never work again. In the end, I had to have counseling. I had to have counseling because I was all messed up in my head. And she said to me, in your case, you are what you do. So your value in life is what you do. It's not how much money you earn or how much money you've got. It's the fact that you do stuff and people recognize it and you make progress and you like the journey. And she said, if I were you, I'd get another job. That's what she said to me. So I've got another job and I'm never gonna let it go now. I'm always gonna work. I'm always going to work. I'm always going to have something that I'm striving towards, be enjoying where I am at the moment, work with people I like working with— mostly my family these days, to be honest, but nonetheless. Um, and what I'd like to do is just work a little bit less. I'd like to be on a 3-day week, but I want to work until I keel over. My dad was 82 when he stopped working, and I told him before he died, I said, I'm going to beat that, going to be 83. So That's an ambition for you right there. In answer to your question, it's part of me. It's what makes me me. Yeah, to have that need to work. Love it.

No, it's amazing. Thank you for sharing that. I mean, can I, can I just— I just want to ask something on this really quickly and then we'll move on, just because I think, I think this is important. Like, a lot of people that listen to this podcast have aspirations of reaching the mountain, um, getting to that point that might be, I don't know, getting the, uh, earning 100 grand. It might be exiting a business, right? And we put so much weight on reaching the top of that mountain to then realize that there's another mountain, right? So would you mind just sharing— like, I really appreciate you sharing that you found yourself, um, getting help and it enabled you to realize, yeah, like, you are, you are what you do. But like, what, what did that actually feel like? You know, like, talk to us a bit about what did that actually feel like, where you thought you wanted this life you've had million pounds and, uh, tons of money in the bank, you thought you wanted this life of living on a farm, not worrying about too much, you know, the typical thing that we get sold. Yeah, I want to retire, I want to sit on a beach, drink cocktails, all these things. Personally, that scares the living hell out of me because I would feel worthless. I'd want to be doing things. But you, you experienced that first time you got there. What is it that you actually felt like? How did you actually feel when you arrived at that point which you thought you wanted?

It was horrendous, you know, to just thinking about it now. I'm kind of reliving it as I'm telling you this. I've started to feel a bit panicky. I— it was horrendous. Was because, because I grew up as a— in a working-class background, right? So this all came out in my therapy. I grew up in this working-class background in the '60s. Everybody worked. All the men worked. A lot of the women worked because we were a very working-class area, right? So no one didn't work. It's like everyone works, really. So, and by working, it means that I had a counterpoint. When I went on holiday, I really looked forward to my holidays. I really looked forward to a long weekend if we did that, or spending time with friends abroad. We've got a little place in Wales, you know, we can go there. Really, really love that. When you don't work, there's no counterpoint. Every day is a Saturday. Every day is a holiday. I got to the stage where it was so desperate. If you'd have rung me up and said, Mike, can we go for a game of golf on Tuesday? I check my diary and say, oh no, Hishem, I'm having my hair cut on Tuesday. I could only do one thing a day because I like to spread everything out, right? It was terrible. I watched all the Star Wars movies about 3 times. And it was my wife in the end that said, you know, this has to change. This— you cannot keep doing this. I was deteriorating big style, right? Everything that had driven me, the excitement, being part of something, the journey. And I had my needs analysis done. I don't know if you've ever had that done, but, but people, to be happy, you've got to line up your passions with your talents and your inner needs. Passions are easy because they're the things you think about all the time, are interested in. Talents are easy because you just discover you're good at things, you know that. But the inner drivers are much more complex to work out, and they last forever. They were the things that drove you when you were 5, 15, 25, 105. It just comes out in different ways. So I had these drivers done, and I found that I needed to be on a journey. So I needed to have been somewhere, be somewhere, but going somewhere. I need a big risk of failure with pain attached to it. So just having a risk of failure with no consequences don't mean anything to me. I need to be in a constant place of discovery, learning new things. Well, of course, all of that was taken away from me instantly as soon as I went away from that, that building in Henley Norton and left it to the Americans to run it. From that point onwards, everything that had made me what I was had been taken away, and you just spiral into a pit of despair. Never had as much money in my entire life, honestly, but it meant nothing. And as soon as a couple of guys who worked for me at Software Knowledge, which was the first business, came to me and said, we're gonna do this thing called Crimson, would you like to be involved? And my wife said, said yes, he can start Monday. And that was that really. And I was in and I felt instantly better, even though I couldn't work for them immediately because of my restrictive practice clause. I felt instantly better. I've got purpose and I just felt better. And I've never lost that. That's one of the reasons I did Flair really, was because I wanted something to give me those things, that purpose and that place of discovery in that journey. It's a weird thing. If you haven't done it, if your listeners haven't done it, I would recommend you get the needs analysis done, figure out what really makes you tick, because often it's not what you think.

Yeah, no, thank you so much for sharing that, Mark. I really appreciate that. I'm just so fascinated by that, just because I'm sure, right, like, we'll move on here, but like, why I'm so interested in that is because so many people outside looking into Mike Ames's life would probably want— would, would love to switch places with you, right? Millions in the bank, not having to work. And I just find that fascinating that when you arrived at that, you found it really difficult. You clearly, yeah, like figured out what it is.

I've never been suicidal. I've never, never reached that stage, you know. And I know people that have reached that stage, but you think of all the famous, rich and famous people that do do end their lives. You know, it's not just about the money and the— not that I'm famous, but not about the fame, not external things. It's, it's the drivers. You have to have your drivers ticked. And we're all different, you know, we've got our different things. And then if you line that up with things you're passionate about and interested in and things that you've got a talent for, you're going to be happy. You're going to be happy. And that's the main thing in life, seems to me, to be happy.

I appreciate that. So let's just get straight into the granular here. Because I really like the way that you talk about things. So I've been looking at a couple of your LinkedIn posts, things that you share, things that you talk about. So I wanted to start here because I think this could be a really valuable place for people that are listening, that are on that growth journey, um, and find it difficult. So what I just wanted to sort of go to here, I'm just going to share some things with you. So did a post here around the Golden Circle of Growth. So a scalable recruitment business requires more than, more than the golden circle of growth. This being win more clients, fill more vacancies, make more money, hire more staff. Some of the common language that you'll hear people that are trying to grow their recruitment business, right? So this approach that you shared can oftentimes mean that you might find yourself at 15 people, but then you drop down to 6 to 8 again, and you find yourself sort of yo-yoing back and forth. And I hear this a lot, and this is a lot of the time the types of recruitment companies that I speak to, with a lot of the UK recruitment agencies being small to medium size. So what you said in terms of what you need, and this is what I guess I wanted to talk to, is strong employer value proposition, a system to win high-value new clients, a client care system to make you the number one supplier, a zero-cost marketing engine, and a data-based management framework. Let's talk about these. Why, why do we need these things?

Okay, so let's start with the yo-yo thing. For a minute. Why does that happen? Well, it happens because you outgrow your management strength. That's essentially it, you know, up to about 8 people, it starts to, the wheels tend to start coming off around about 8 people. And if they're going to tip off completely, it's before you get to 15. Normally, it's that kind of space, right? And so you're used to managing by proximity, you're managing because you sit with everybody, you know what the heck's going on, you know, it's everything, it's small enough to know what everyone's doing. Where they're at, and it's easy. And the management information that you have, the dashboards tend to be more financial. So, you know, what's your debt-to-days, how much money did you make, what's your turnover, how much money you've got in the bank and so on, which is important, of course. But you don't need anything else because you can manage by proximity. You get to that magic 8-ish number and suddenly it's more and more difficult to manage by proximity, particularly if you've got work from home. Part of your crew are working from home, it's difficult to know what the heck's going on. So the things that slip are service levels. So the client is very happy with— when you were smaller, you were in charge of making sure everyone was— everything was being done as it should be. Suddenly you can't do that. So some of your people perhaps aren't as hot on your client services as you are. So you're starting to get clients that aren't quite as happy. They're perhaps giving work to other companies and keeping you there. Maybe in worst-case scenario, they throw you out completely. Same goes for staff, really. You know, it— there's no such thing as a team, really. There's just individuals, and you should see them as that when it comes to management. Their strengths, their weaknesses, the things they want to achieve, the things that make them happy, the things that make them sad. You get to know them as individuals, and then you work with them to get the most out of them. I mean, that's the bottom line, to focus them where you can get the most from them. Well, of course, There's too many now. There's 10 or 15 people, they're not all working in the office, you've lost control of that. So now you're getting people who aren't as happy, aren't as motivated as they would have been. And they're not really delivering in the way that they've delivered before, which means profitability tends to drop. And then the final piece of the jigsaw is that profitability piece. And that means that you're growing too quick. Growth is expensive, it costs money to grow. Right? And so what often, often happens is you grow, but the profits don't keep up with the money that you're spending and the turnover that you're bringing in. So that's why your profit degrades. So if you don't change your management structure, the way in which you direct and control your business, you'll outgrow it. And then it's luck of the draw if you're successful. It's luck of the draw if you get through that. And I think that's a pretty poor way of running a business, quite frankly. I think you need to organize a business in a way that scalability is not affected, doesn't affect your profitability, your service levels, or your staff motivation. We've got a saying, you can't make a butterfly by making a caterpillar bigger. It just can't, just get a really fat caterpillar. What you have to do is reform it in the chrysalis, and then it can come out as a beautiful butterfly and it can fly away. And it's like that with a business really, you have to reform at certain times. And about 8 to 10 people is the first one. 20s, late 20s is the second one. And then around about 50 or 60 is the third one. And probably after that, but I never got that far, quite frankly. So I'd sold the business by that stage. But, but I think this recognition that your business needs to change its shape in order to keep your profitability, your service levels, um, and your staff satisfaction, motivation levels is alien to most people 'cause they're just locked into that golden circle. We'll just hire some more people. I'll get some more people and we get some more vacancies and then we'll make some more money. And it's like, really? Really? Is that really? 'Cause that's not gonna fly, man. If you don't get a handle on that, then you'll have a pretty miserable life putting out fires all the time. That's what it turns into. It's horrible. You know, it's not a good thing at all. So the reason for that particular post was just to bring people this attention that actually, no, you kind of need more, you know. It's, that's one of the 7 pillars, right? You've got 7 pillars. One of them is fulfillment, which is that really. It's about getting more vacancies, making more placements, okay? Whereas if you think of the assets, the structure that your business is made up of, the first one is direction and control, which is a recognition of what the business has got to do for you as the owner. Your cool mission that we talked about earlier, the dashboards that you need in order to know what the heck is going on in your business as it grows. And then what you do with that data, the meetings that you have, the changes that you make, and the plan that you're running to move the business from where you are to where you want it to be. Then you have your fulfilment. I'm not a big 360 guy. It's a nightmare really, I think. Makes life 10 times more difficult, you know, much more of a layered approach to fulfilment. Then you have your marketing machine, which supports getting new staff in, get new headcount in, getting new clients and looking after existing clients. And then at the end of it, it's just that support services that you can just outsource most of them, to be honest, but they have to be done. And you need all of them to reflect not the size business you are now, but the next iteration of the business that you want. In other words, if you don't change in advance of the need, you're always running hot. The thing is always under strain. It's never comfortable. So if you're gonna have a growth spurt, put things in place that you can grow into. You know, like when you're at school, we were very poor, so Mom used to buy me enormous trousers, right, in, in September, and Um, it was— sorry about that— it was, um, by the time they fitted me, by the time January, February time came, and then I reached sort of May, June time and they were really tight, and then the process started again. Well, you're, you're creating a business which has got big trousers, you know, so you can grow into them. And then don't get us— don't wait until the trousers are tight again, grow another big pair, you know what I mean? I'm not explaining that terribly well, but It's about creating a business ready to grow into. I think that's probably—

that makes, that's, that makes, that makes complete sense. So I'm gonna, I'm gonna— I wanted to— I had— that was one of my questions around the 360 and the factory model, so I'm gonna ask you about that. But just to get a bit more granular here, thank you for breaking that down. And look, I'm a big advocate for that for my own business. I mean, there's, um, there's only 3 of us, but my mentality has been I want us to be 8 or 9 by the end of the year, and I've really committed to having processes and a bunch of different things that I think I'm going to thank myself for in another 12 months' time. And I think, yeah, you're completely right. A lot of recruitment owners that I speak to are just unproductive chaos, and there's just like, like I said, just strain fighting fires. I'll worry about that when we have a couple more people in the business. And I, whenever I sit down with people, it's like, one of the best things that you can do is build those processes and do things today that you are going to thank yourself for in 6-12 months' time. And you've got to think about Yeah, um, act as if you are a business of 10 people before you're already there. So can we just take a moment then to think about, if I'm listening to this right now, I am that chaotic business where we're getting some good amount of jobs in, we've got people in the business, probably 360, a bunch of 360 recruiters. Um, yeah, I am not thinking about, uh, I'm more thinking about, yeah, let's just get more jobs on them, hire more people. Uh, but if I am going to listen to your advice and take your advice on, right, actually I do need to make decisions today whilst I'm in this position to make it easier as we do grow. Like you said, have, um, build bigger trousers to, to grow into, right? What is like the first step? Because a lot— it's overwhelming. Where the hell do I start? I've got all these different things you just mentioned, like how many different things, a marketing engine, like all these things. What is the first step? Like, what is the first thing you would advise me to do that can be the domino effect?

I can answer that. There's two things actually, one after the other, and you have to, you have to do them both really. So the first thing is going back to that core mission, you should be very clear what that business has got to do for you. And too many people aren't. They've just got some sort of vague idea that they'd like to retire when they're 50. I don't think that's good enough at all, right? So you really need to understand and document and discuss with your family because it affects them as well, to discuss with them what exactly it is this business that you own that it's a slave for you, not the other way around, at least it's not supposed to be. What is that business going to do for you? Define that core mission. That's a big step forward because now you've got clarity on exactly what the business has got to do for you. It's going to give you clarity on the size that you need it to be. You don't have to restrict it to that size. You can make it as big as you like, but you've got clarity over that because then you can begin. The next thing you can do is shape a business. You can sketch it out. Numbers of people, really, kind of what profitability you would like to do, where you would like to work. None of this costs any money to do this. You can just do it in the evenings or at weekends. It's not even time intensive really. It's just dreaming, I suppose. But it's dreaming based upon what the business has got to do for you. And that's a different kind of dream, right? But, and that's well and good. You can, anyone can do that. You could do that now if you wanted to for your business, right? It's not difficult, but what you really have to do then is begin to look inwards and begin to look at the business that you have. Now, there's an old-fashioned device that we all know about called a SWOT analysis— strengths, weaknesses, opportunities, and threats. Well, um, the first thing to do is to do a SWOT analysis of the business and get everybody in the business to do their own version of it. Bring it all together and you have everything on a piece of paper that tells you What's great about your business, the strengths that you need to leverage, make more use of and do things with. The weaknesses, where are problems in your business, the things that you need to fix and sort out. Opportunities, which are effectively things that you could make more of in the future. I don't tend to go excited about those while I've got weaknesses and threats on the board. And then you've got threats, which are just problems in waiting. They're not a problem now, but they could well be in the future. And so your first step is to take that information and begin to think about what immediate changes, fixes really. So we're not doing anything strategic now, we're not doing any of that, we're just looking at some fixes. And those fixes are going to drop in those 7 different pillars. Guaranteed, they'll be that you've lost control, so you need to put some control back in. The fulfilment isn't efficient, you know, when you put your metrics in, you realise that you're not really your ratio between profit and payroll, which is a good ratio to measure by the way, is too low and it's not going in the right direction. You know, your payroll is going up but your profit isn't going up at the same rate. So you need to do something around fulfillment. Marketing is a service to the other 3 pillars. So wouldn't worry about marketing just yet. But are you, do you suffer from high staff rates of attrition rates. If you do an analysis, if you ask, they call it the VOTE, don't they? Voice of the Employee. If you do an anonymous VOTE, what will they say about working here? You know, it's a good thing to do that. Do you need to do something about plugging the gap of people, good people leaving and trying to get new people in? Do you have enough high-value new clients? Because as we've talked about, you and I before the show, there's two types of business development. And there's tactical business development, which is basically give us a vacancy or I've got this great candidate, which is what most of the industry does. But you don't build empires on that. You build an empire on strategic business development, where you're chasing a relationship with a high-value client. It could take months or even years to get in there, but when you get in there, the money flows. So how's your business development function working? And of course, with client care, are you maximising the value? Are you the apex supplier? For at least 20% of your clients? In other words, are you their first choice? Well, your SWOT analysis will bring all of this in. It's not that difficult, and you can begin to tactically plan how you're going to sort out these weaknesses, because that's the first thing. Really think about the threats. Are any of them imminent or catastrophic? Because if they are, you need to mitigate them. Then you can move on to your opportunities and your strengths. Should we make more of our strengths and can we capitalize on these opportunities? Rocket science at all. It's incredibly simple actually. Having done that, I think the next stage— does that make sense, by the way? Am I— is that—

yeah, yeah, yeah. I think, let— no, that, that does— that's like really helpful because I think oftentimes when I do speak to people, they— all they see directly in front of them are like the, the problems of that week or the problems of that month and I think if people are being honest, when did they last take a step back to really realign or have clarity on what they want personally? And then also, yeah, actually look in the mirror and go, right, what are we really good at? What are we not so good at?

Well, that's an interesting thing because a lot of people, all of us human beings, to a greater or lesser extent, driven by ego, you know, what we think about ourselves and what we want other people to think about us. And if we admit that we've got something wrong, we have a weakness, that can be construed by some people as an attack on themselves, and nobody likes that. So much better to deny we got a problem, much better to desire that there are no weaknesses, because then we don't have to worry about it. We're cool, we're great. And I think it's so much easier to put your ego in the box and go with the data, you know, what they say, facts don't care about feelings. And if you got a problem, you got a problem, you know, you may as well admit it. And deal with it rather than, well, hope it goes away or pretend it's not there. I did a, um, the show today, Thursday we're recording this, and we did a show on leadership mentality because it's massively different from recruiter mentality. And you get a lot of people who run businesses, quite big businesses sometimes, who are basically still just recruiters. Even if they're not doing recruitment on a day-to-day basis, their mentality is recruitment. And one of those things in, in one of those 7 characteristics of a, of a scalability mentality, a leadership mentality, is this ability to not feel guilty when you're not on the tools, when you're not working in your business, you're working on your business. So you're building a strategy, you're building plans, you're executing the plans, you're going out and listening, you're listening to your show, right? So you can You've got some interesting guests coming on sharing what they know. You're feeding yourself with new ideas. Shouldn't feel guilty about that in the same way that you shouldn't feel guilty about taking holidays. They're necessary business investments. And if all you do is work in your business, that's all you will ever do. The more you work on your business today, the less you work in your business tomorrow. And if you want to scale, you've got to put some time, time forward. And I would say if you're a small business and you're not doing anything, a day a quarter, which is a strategy day. So no phones, no emails, just a strategy day to think about the strategy and plan. And then you need an execution time. It's already well having a plan, but if you don't execute it, there's not a lot of point having the plans. So then you need to put aside some time each week to execute. One of my clients has just finished with me, so he's been with me for 18 months. He began to execute on a Saturday morning. That was his time before the kids got up, 2 or 3 hours on a Saturday morning. That made enough time then for him to be able to execute in the week. So he was not just working in the business in the week. He got to the stage where he was doing a 4-day working in the business and a 1-day working on the business. And of course, as soon as you do that, your potential accelerates, you know, it just massively accelerates because you're actually making changes to the business now and the people who are in it. And I think the more that you realise that working on the business for a leader is more important than working in the business as the business gets bigger, the sooner that you'll make that transition to a scalable business.

Hey everyone, a real quick one from me. This podcast would not be possible without our amazing podcast partners, Vincere and Sourcebreaker. Because you listen to this podcast, you were able to get your hands on exclusive savings on both of these award-winning products. If you're a growing recruitment business, you have to check out Vincere, who are an all-in-one operating system for your growing recruitment business. With Sourcebreaker, if you want to make sure that all of your recruiters have the best tools on the market to stand out and beat their competition, then you have to check out Sourcebreaker. Use the link in the show notes, in the comments below, and you'll be able to get yourself exclusive savings on these amazing products. So just to, just to continue this for a second, again, just to give people some more tangible advice. So what I'd love you to just to talk through, maybe you could describe it or talk about the fundamental differences. If I was a business owner of a 20-person recruitment business that has invested in processes, infrastructure, uh, that has enabled me to grow to that right, rather than trying to get to that point with the mentality of getting more jobs, hiring new people. Like, what— how, how different would that business look compared to a business of around 8 to 10 people?

What are some of the fundamental differences, you mean, if you'd actually made the transition?

Yeah, so I guess what, what I'm keen for you to share is— maybe I don't need to add that context. The main context is what— like, to have like a successful profitable recruitment business with 20 people, what are the— how fundamentally different will that look? The makeup of it, the infrastructure, how different will that look compared to a business of 8 people, which as you said is probably the tipping point?

The biggest difference will be in the, in the first pillar, which is direction and control. Because every time you grow to the next stage, you need to revisit how you're managing the thing because it's bigger, it's more of it, right? So that company would have dashboards which told the leadership team exactly what was happening in the business. And I don't just mean on conversion rates for vacancies or debtor days or any of that sort of stuff. I mean, in terms of, say, new business development, you've got the pillar, right? So it would tell you how many people you've got in your relationship pipeline, how many people you have in the revenue pipeline. You'd understand the rate that those are being developed, called sales flow. And it's the speed that those relationships are getting closer and closer to becoming clients. All of this data, if you set it up properly in the CRM system, can tell you what the heck is going on. And if you're not putting enough effort into that, for example, then at some point in the future, you're not going to have the work that you need. You'll have run out of work for the sustainability of the business that you have. So these dashboards will tell you what's happening in different parts of the business. That would be one difference. A really big difference is, so the first level of scalability is when you break, break the link between how much you work and how much you earn. So you're one-man band or solopreneur, and if you don't work, you don't earn money. Then you hire some people, so get some people in there, you can take a bit of time off and they're doing the work. So you've broken that link between how much you earn and how much you work. The next level of scalability is that there's no one person in your organisation, in any part of the organisation where the success of the things that that person does depends upon them. In other words, you've massively reduced key person dependence. So you think for small business, say the owner is the person that brings in the new business, or they got that really good 360 that brings in these clients. If they weren't there, that function would fail. In scalable businesses, there's a tremendous amount of or less dependency on people. I mean, obviously if someone leaves, there's going to be an impact, but it is, there's less of an impact if someone leaves because you've replaced individuals who are the system effectively. They are the person that brings in the new business. They are the person that looks after the staff and you've replaced it with a system that people work in. So if they go, well, you just get someone else to work in that system. And I'll be very clear what I mean by system as well. Just, just, Clarify this. Processes are important, of course they are, but most people don't follow processes. So to be honest, they're only of, they're of good, they're a good use, a good way to communicate best practice. So they're good for that, right? 100%. The biggest impact on a business is tools. And I don't mean software tools, by the way, because what a tool will do is simplify, is standardise and speed up. And it doesn't matter whether that's a tool in the office or a tool in the kitchen or a tool in the workshop. That's what tools do. So if you tool up, what you're doing is de-skilling. Because the whole point of what we're trying to achieve here is we're trying to achieve outstanding results with average people. Because the majority of people you employ will be average, obviously. That's what average means. And one of the ways that you can do that is tools. To de-skill, to speed up, you know, to standardize. So that you get that great consistency of output. Well, a company of around about 20 to 30 will have invested in tools, some software to be fair, but other tools as well that are doing this for them. So now there's a less dependency on individuals and their individual skills and their knowledge and their experience and their network for success. It's the fact that they've become an operator of a machine really, in a sense.

Give me an example of a tool. In the business and the fulfillment business development area.

Okay, we could spend the rest of our time talking about tools, but I'll just pick one which is easy, which is business development, right? Because I know people talk about business development, right? So I don't believe in cold calling. I just think, you know, it's tactical business development at its very worst. It's horrendous really. And it's such a waste of time and effort and blah, blah, blah, right? So supposing then, supposing we, worked out a series of interactions that we could focus on the target market. And they're all pre-written and pre-tested. And we just have to run it like a big computer program, really, in real life, though. And so I'll give you an example. I'll make it real, right? Supposing we sent a postcard through the post, traditional picture postcard, handwritten on the back that said, I'm going to send you a little package in a couple of days. Just look out for that. Grabs their attention, begins to build a bit of interest. Okay. Couple of days later, there's a package comes. And in the package is a nice little box of chocolates and a letter that says, look, you know, in the position that you're in, do any of these problems or any of these issues that you have with agencies, do they resonate with you? The reason I've sent the chocolates, give you something to nibble on while you're just reading through this. If they are, I'm going to email something to you, which I think you're going to be interested in. It's an ebook. Couple of days later, the ebook comes through on an email. And at the same time, we invite them to connect on LinkedIn, which is a sort of a test. And in the ebook, it describes exactly what people can do to get around these issues, or the way in which they can manage whatever it is that the problem relates to, in order to diminish the problem or make it go away. And then, and that's on an email. And then following that is an invitation to connect on LinkedIn. And then there's a final email, which is just a video that says, look, you know, You've got all this stuff, don't know whether it's interesting. I'm just going to give you a call. If you don't want me to give you a call, please just say so and I won't. But I'm going to give you a call next week. I'm not looking for a vacancy. I just want to establish whether your values and my values are the same and my flavour of recruitment is tasty for you. Right? You can develop that. That's loosely based on one of the campaigns called an ADA campaign. We can develop that and make it work. And you keep testing it and testing each of the individual parts until it works all the way through. And it gives you what they call a 1 to X conversion rate. So 1 conversation to X number of campaign people that you put through the campaign. That's a tool. So we use that. We don't use it at the moment because most of our leads are inbound, but we did used to use it. And my PA used to run it. I developed it and designed it and she used to run it, massively de-skilled it. I ring in at the end and they're waiting for the call. Sometimes they ring you. Bizarrely enough, if you do a good enough job, that's a tool. It speeds up the process. It's a 7-day process from beginning to end, right? The end of it, that beginning, they don't know who you are. At the end of it, they're speaking to you on the telephone. Massively simplified the whole process. Pretty much anyone can make that call. And it standardized it. So there's a standard set of messages which are going out to the clients. You see how that works? That's just one example. There's loads of these that you can do, tons of them. Recruitment is riddled with opportunities for tools, and I don't just mean software. Problem with software, of course, is anyone can buy it, so it's not much of a differentiator really. But these kind of tools, you can really differentiate them. Very powerful stuff.

Yeah, they're probably— it's really interesting what you're saying, because I'd probably— the terminology that I'd probably use to describe that, obviously I know because we're talking specifically around BD, but you can take the same framework and principles to other parts of your business. Yeah, I'd call that almost like an engagement strategy. Like, what is our process? I know I keep using the word process, but what is our tool? What is our system that we follow that turns Mike, our sort of ideal customer, a company or a hiring manager that we assume has a lot of the challenges and problems that we know that we can probably help? Until we actually speak to them, we can clarify that. But we thought about who can we help most, and we've got sort of a track record of helping these types of people. And what do I do to turn that person into someone that interacts with me or knows how I can help them, um, and there's an opportunity to connect and start building a relationship with them? Because this is something, yeah, I spoke to a lot of recruitment owners about this where I said to them, like, if you're being honest with me, if you were to round up, uh, 20 of your recruiters and, and ask them to explain to you and talk through how they turn people who are in their target market that don't know about them into people that are booking in meetings with them? Do you think they'd be able to sort of describe and articulate how they do that? And obviously, more often than not, the answer is no to that.

No.

And this is what we're talking about here, right? Like, and the thing is, what I found— I don't know if you found this, I speak to one of my friends about this who's in recruitment— is what's really funny is there are probably tools that people are using in your business right now that you're not even aware of, or the entire team aren't aware of. And what's really missed is this intentional sharing of what's working. And one of the best things that you can do is round your team up together and go, hey guys, what's working? What are you finding working right now? Like, what are you finding that the hiring managers are trying to speak to, um, bite a lot on? Like, what are the problems that you're finding really resonate with people? And a lot of this information and tools and knowledge is often actually in your organization and a couple of people might be doing it, but they're just there. There's no intention. There's a name for that.

It's called, um, it's called positive deviance. It's actually a name for it, and it stemmed back to the Vietnam War. I won't tell you the story, but it's a good story actually, but we just don't have the time. But basically, sometimes when we have a team of people, we look at the underperformers, we look at the people that aren't hitting targets, we zone in on those guys. Clearly we do, because You know, we want to lift their performance. But what we often do is we ignore the overperformers. We ignore those people who are doing something different, but that difference is delivering much better results. Positive deviance is what they are. And those cats, if you look at those guys, right, some of those things that they do, only they can do because of their particular experience or skills or whatever. Fine. Many of them anyone could do. It's just that they do them and nobody else does. And the best way to find positive deviance is to start with the numbers, because if somebody's doing something different and they're doing it well, that's going to show up in the figures somewhere. It'll just show up because there's a consistency to it, and that's your starting point. The other thing that you can do is you can talk to people on a one-to-one basis, and you can go through exactly how they do things. Talk me through how you do it. Now, it's better to do that on a one-to-one basis because some people don't like to talk in a group. They feel awkward or a little exposed, or people are going to make fun of them if they say something. But if you do it on a one-to-one basis, you suddenly realize that they're doing this, no one else is doing that. That's pretty cool. Why do you do that? No, I've always done it, really. If I do that, I get this. Ah, wow. And these positive deviant kind of people in your business, you will have them. Pretty much everybody does, you can unlock so many ideas and efficiencies from that and bring that into your business for zero cost. Because in many cases, it doesn't cost them to do the thing that they're doing in the way that they're doing it. They just do it that way. And I think it's brilliant. I mean, you've got a very good point there.

Yeah. Now look, I know, look, we're going to overrun a bit here because there's a couple more things I really want to make sure we speak about, if that's okay with you. Well, normally we sort of run the hour mark, but let's just go over slightly, if that's all right with you. Um, I wanted to make sure that I asked you here, like, I'm again, because we're thinking of the types of people that you speak to a lot, uh, speak a lot to, um, this recruitment business that are trying to grow. Like, yeah, I've heard you, I saw, I watched one of your videos around like the debate around the 360 versus factory model. So I want to make sure that we speak about this because, so my perspective on it, I heard you say a little 360 is entirely flawed. So I want to hear like why that, that is and why you believe that is the case. Okay, but just quickly, just let me just add my context really quickly. So I don't know what your perspective is right now, um, but for a lot of, um, recruitment companies that I'm seeing or speaking to, a lot of them want more of their teams to be more self-sufficient at winning new business, um, and a lot of people in their organization aren't capable of doing that and they need more of their people to do that. And like you said, they're feeling vulnerable. There's only 1 or 2 people capable of it. And that's something that's really important to a lot of companies that I speak to, that they want more of their people to have the ability to win new business. Now, the thing that I'm seeing is a lot of the redundancies and people not losing their jobs or companies sort of shrinking, a lot of the time, from what I can see, it's a lot of these businesses that did go down the talent partner, RPO model, or really sort of grew too quickly, like you've just said, is probably part of it, where they had these people in their business on really high basics, $50 grand, $60 grand, $70 grand, because these recruiters are really high in demand over the last 2 years. But then when all of a sudden projects get pulled, companies who said they needed to hire 800 people next year are now only hiring 20 people, and you've got these, uh, people that don't want to do business development, aren't capable of doing it, and are on really high basics, uh, are being made redundant. And they then want more of their people to be able to win, um, new business. So I don't know, I just feel like I'd love to just hit your take because I do feel like for a growing recruitment business—

yeah, I can do that.

It's really important.

Okay, so, um, well, there's a lot to unpack there. I'm going to do it real quick because I'm conscious of the time. First thing to say is, as I was saying to you earlier, my deepest, firmest belief, the root belief of everything I do is you've got to build a business that delivers exceptional results with average people. Because statistically, if you look at a distribution curve, most people are average, right? So if you're holding out for those top 10%, well, you're competing with Michael Page and all these others with the big money. So I'm not sure I would go down that route. As soon as you accept that, then clearly things like tools that we talked about earlier come into play because they de-skill things, processes because they standardize things, dashboards because they tell you what the hell's going on, right? So you're already going down a route which means, well, hell, you know, we don't need somebody to do everything like Henry Ford, who used to have people build entire cars, and if someone left, he couldn't finish the car. No, we just need someone to put a wheel on, 'Cause we can make 'em real good at that. We can make 'em real good so they put that wheel on real quick. And if they leave, we'll just get someone else and train them to put a wheel on, no big deal. And it's the same really. I think people haven't caught up to it because they think that 360s is an easy way to grow. You just imagine yourself at the front of the office, a whole bunch of 360s, and you're kind of surveying this group of people that don't need you or anything really. They're just knocking it out the park. Well, you know, that doesn't really happen very often, does it? You know, and if you get somebody who's a really good 360, if you're looking over the office and you're looking at them right now as you listen to this, you're probably looking at your future competition right there, right there. Because if they can do everything, why do they need you? Why do they need you if they can do everything? I believe you should build dependencies into your people. Sounds terrible, doesn't it? But I think you should make people dependent upon the business for their success. Have you ever heard of anyone taking, like, a real top biller from a real big company, say like Michael Page or whoever, bringing them into their smaller business and they don't deliver? The reason that they delivered, or part of the reason they delivered when they were in a big organization, is they were just part of a bigger system where they spend a lot of money on marketing, they've got all these computer systems in place, they've got support people doing this, that, and the other. They've got all this stuff and this person who believes it's all down to them because they're fabulous and they're 360, they're not really 360 at all. They're not. They think they are because they're told they are, but they're not. The business itself is providing a lot of the stuff that they need. Take them out of that environment, put them into a smaller environment and they can't do a lot of the things they did before because the support isn't there. So the idea is to build in those dependencies, make people just do one part of it. Because if you think of a 360, just how many skills are you going to need to be a successful— I mean, how many masteries do you need? I think that's really hard. I don't think average people can do that. Right? I don't think that at all, really. Can you get someone who can find really good candidates? Yeah, sure. Yeah, you can do that. That's no problem. Can you get someone who can make a placement? Yeah, my aged aunt can make a placement. Now, how can that be if I've got a good candidate? Can I find someone who can manage a client to make that client feel special? Well, that's harder, but yeah, we can do that. That's not difficult. And then you're just left with this new business thing. Now, now, it's a really important point on this is that most recruiters view business development as what we would call tactical BD. Gives a job, gives a vacancy, or I've got this great candidate, I kind of spec them in, right? That's okay, but that's very transactional. And if that stops, immediately you run out of work. I'd like everyone listening to this, to this podcast there, to think of their best clients, the client that gives them the most money, profit, right? Not necessarily the one that they get the most placements with, because they might be really crappy deals, but the one that makes the most money. Supposing you had 2 more of those every year coming into your business. Just two, one if you like, but just, and you knew they were going to come in, how would that change the world? Well, over time, what it would mean, you would need to do less and less tactical business development because these companies would come in and start to unleash, feed vacancies into your business. That's what strategic business development does. It's completely different to tactical BD. You only need in an average business. So I had a, my business was about £40 million, I suppose, when I sold it. 70 million in today's money, I guess. And we had 3 strategic business developers that fed that entire business, possibly 4, 3.5 I'll go with, right? You don't need a lot. You don't need everybody to do strategic BD. You just need one person in a small business to do it. And twice a year you get a drop of a new client, more if you're effective at what you do. Now you compare that to what we have now. In a bull market, in an active market, anybody can do tactical business development. It's easy. Because there's a shortage of people. So if you ring in and say, I've got a great candidate, can I make a placement? Or if you ring in to say, can I have a vacancy, and they've struggled with their existing agencies for months and not got the right person, yeah, okay, give you a crack there. But if the market tightens, then they don't need to do that. So that business development don't work anymore. Strategic business development works all the time because what you're doing is building a relationship. You're building a relationship which we both recognise is actually a business partnership. That doesn't work with everybody because some people don't want that. Some clients just want the best deal they can get, and that's fine. And if you want those as clients, good luck to you. I want clients that are going to value me and have a steady stream of work coming in that I can rely upon, and I want more and more and more of them. It's a completely different way of building a business. To begin with, you need tactical. Then you need tactical and strategic. If you do it properly, you just have strategic in the end. And people are doing a little bit of speccing if they can, you know, that kind of stuff, right? And that's why I don't like 360s, because they're expected to do something which the market isn't particularly conducive towards now. I mean, it's not bad, it's not a bad market, but it's not as good as it has been in the past. And if it gets worse, tactical business development just won't work. Then what are you going to do? How's that going to work then? What these people can actually find candidates and they can place them, but no one's giving them the vacancies. It's the businesses, in my mind, it's the businesses, the company itself, it's their responsibility to set up a business, set up a function or a system that brings in these vacancies from these high-value clients. Then you can just go and do what you need to do and you can't go anywhere else because you can't bring business in. So you stay here. We're building those dependencies in the business. 360 is exactly the opposite. We're gonna make you independent, but we're still gonna take 60% of the revenues that you earn, right? Well, no, that doesn't, no, no, no, no. I do all of this myself. I don't need anything to set up a recruitment company in my back bedroom. Hell, most of the people listening to this podcast that own a business did that. I did it twice, right? We started a business on the back of someone else. Well, as you're listening to this, somebody's having this idea. I'm a great 360. I can bring clients in, I can get vacancies, I can find candidates, I can place them. Why do I need to give 60% of my revenues to these guys? I'll just go and keep 100%. That's what we think. I mean, the truth is a bit different to that. And that's really why I don't like 360s. They're hard to find, they're hard to train, they're hard to keep. And if they do go, they're going to take a revenue stream with you. Much better And you need really good ones, right? Really good ones to make it work. Much better to build a business that doesn't need them because it's safer for a start. Profit, value, and safety. Safer. If they do go, they can't take all your tools and processes and support systems with them, right? Good luck to you, mate, because that's not going to fly. And you can build in this safety mechanism into your business that means you grow steadily and predictably because you can always get these average people. There's loads of them around. You're not paying the earth for them, right? It's the system that has the value, not the people. And that would be my advice if I were you, if you were a— whether you're a 10, 12, 112 company person— is to build those dependencies and get away from 360s as soon as you can, or at least minimize the amount of 360s you've got in your business.

So can we just end— like, I just want to go a bit grander here because I know people will be thinking of this. So I've heard you say when you talk about the factory model, it isn't just about the fulfillment, the 180, the 360, whatever, which I do think a lot of people think, right? When you talk— when they hear you talking about here, they're going, okay, Mike, well, what recruiters do I hire then? What do they do? Because I know you're talking about the entire organization and having depend— um, yeah, the, uh, yeah, having dependencies on the company for marketing to perform and the different parts of the business. So can we just focus on fulfillment for a second? Because that, that is, that is what a lot of people think about, and, and that is what's most important to them. So can you just explain to us, if we don't have— so if I'm a team of, um, 15 people and right now, um, 10 of those are 360 recruiters, they're building their own patch, um, and let's be honest, I do completely agree with what you're saying, and I think it goes in line with what a lot of people say, which is it's like running your own business within the business, right? And the story is exactly the same each time, but I think a lot of people are entirely unaware on what what is the other option? Because from what I speak to people, it's like that option, or we have people that just do the candidate side, we have people that just do the BD side, and they're my two options. So what, what does this, what does this actually look like? Like, what are the job titles? What are their responsibilities? Can we just talk about that for a sec before—

what I need you to do is first of all think of functions and then think of roles, so separately. So let's talk about recruitment functions. We need finders that can find candidates. We need qualifiers that can make sure they're the right candidates for the job. We need placers that can take a shortlist and present it to the client and negotiate the— arrange the interviews and do all that sort of stuff that sits on top of that. We need carers that look after clients to make sure that the clients come to us first and keep the competition out and we max out the revenues from that. We need hunters who are going to get new clients and possibly getting tactical business development as well. And we need leaders, someone that can control the whole thing and hold it together. They're not roles, they're functions. So when you start off, you're a one-man band, a solopreneur, I should say, you do all of them. You do all of those functions. You've got all of those hats. We usually use hats when we're demonstrating this. You've got all those hats, you need to do them all. Then you hire an offshore resourcer. Well, okay, that's the finder. Someone else is doing the finding now. I'm still doing everything else, but I'm doing the finding. And so what you can do is you can build up your job titles, the roles, whatever, based upon those different functions. And you can decide to cut it how you like. Personally, my own personal view, having done this several times, various different size companies is that the first thing you say to people is, look, here's the deal. We're going to run a factory model now, and within that factory, we're going to have a layered fulfillment model. You choose, you can stay 360, and that's fine. Or you can become layered. So you're going to be in a layered, you're going to be doing something in this layer, one or two of these functions. I don't know, it's going to cut, right? The chances are you'll have an easier life. You'll have less stress and you'll make more money if you go in the layered route. But you won't think you will because you'll think, oh yeah, but I'm giving up some commission. Well, fine. Right, okay, well, carry on the way you are then. But what we find is the people that move into layered are doing the things they like, they're doing the things they're good at, they're doing the things that have the biggest impact on the business for them, and they make more money. I don't know whether you watched the video that we did recently of Matt Ellis from ENG. Their top billers went from £300,000 to £600,000 billing using this layered model. So we're talking an order of magnitude here, right? We're talking a big number. And if somebody gets wrapped up on that, well fine, stay as a 360. I don't mind. Do what you want to do. And he did that. He said to people, what do you want to do? And some people stayed 360s. Awesome. You know, they benefit anyway because the factory has got a marketing function and they'll benefit from that. They don't pay for it. So that's cool. But actually it's the layered people. They've got, they've got a career path, they've got— they go to work and they do what they're good at, they do what they really enjoy.

And because they're typically chopped up then, because that's what I know what people think— how have you seen that typically be chopped up in terms of like, do you know what I mean? If we're thinking of people and the layers, like out of all those layers, do you know what I mean? How is it typically chopped up? Do you have one person typically being a hunter? Do you have typically have one person doing the hunt?

Okay, so we've got the functions. Now what we're talking about is the roles. Right, yeah, that, that varies from company to company because basically if you're starting from scratch, it's easy. You're the owner, you do everything. First person you bring in are the finders, then the qualifiers, and then you have a consultant that does placing. And there's a route, there's a path, so I don't have the time to go through, but it's pretty straightforward. You can't do that with the existing company because you've got a company. So you have that conversation. Do you want in the layered or do you want to stay 360? You know, you This is how it works. These are the finances. This is how you used to get 100% of the GP going into your commission properly. It doesn't work like that now because you're outsourcing some of the work that you don't like or you're not good at to somebody else in the business. You've got to pay for that. But the fact that you're left doing the things that you're good at, you know, so typically in a typical small business, you're going to have consultants and what they'll probably do, they'll do placements for sure. and they'll probably do qualification, but somebody else will do the finding, probably offshore, would be my advice to you. Get a good offshore person and send it out. You don't have to, you can do it onshore if you want. So you've got consultants that do in-placing. Some of them perhaps do some client care. You let them loose on clients. Some of them you don't. You just give them vacancies, right? And they just work on them. And then you have a pod leader. It's all organised in pods. A pod leader manages the pod, manages the team, probably does strategic business development. So they're the person that's actually building these relationships over the months and years to bring in the bigger, higher value clients. They probably do that. They may do a little tactical, they may not, depends on the size of the team. Some of the consultants may do some tactical BD, you know, gives a job, we've got this great candidate, or you might outsource some of that to the marketing department. So I know it's not a very good answer, but every single, every single one I've done has been different. I mean, they're never the same because they're people. But essentially you take what you've got, you take on board the people that want to get in the layered route, you figure out what they're good at and you assign them then to that particular role. You give them the functions that they're good at and they want to do, and then you fill the gaps with new people. It's not, it really isn't that difficult. I've made it sound a lot more difficult than it is, Hishem. It's not that hard at all.

No, no, I appreciate it, Shannon, because I know that's what people will be thinking right now.

Yeah, it's the question I get asked all the time. How can I convert to 360 to layered? And over a period of time is my answer. But, um, but it doesn't happen overnight. And you— most people end up with a blended fulfillment function. So it's, you know, like a 20% 360s, they don't hire anymore, but the ones they've got are okay, so leave them be. and then it builds up from 20, 30, 40, 50, 60, 70, um, layered.

Cool. So look, let's come to the end here. I appreciate sharing all those insights, and I know we've gone really granular in a few different things here, but I do really believe that people listening, particularly on the entrepreneurial journey, will find the things that we've spoken about most, uh, interesting. So I just, I just wanted to sort of end, I guess, on asking you just a really simple question, uh, which is, look, you find yourself working with so many different recruitment organizations who are on this journey. Uh, what, what is like the most common bit of advice that you find yourself giving time and time again? Because it's probably around the same challenge that you hear time and time again. I don't know if there's anything specific that you find yourself going, this is the fifth time I'm saying this this week. What is the most common bit of advice you find yourself giving to entrepreneurs that want to scale?

Okay, so I, I'm gonna give two answers real quick though. First thing, plan to move away from 360s, 'cause damn, that's hard. You're taking a hard trip there. So plan yourself out of that 360 trap would be the first thing. The second thing is something referring back to what you said. Oh no, actually 3 things now. The second thing is something that you said earlier is make the most of what you have. Figure out what you have that you're not using fully. And make the most of that. And whether that's a software tool, a piece of software that no one really uses, or whether it's a piece of collateral that no one actually uses but it's great, or whether it's a technique or a way of doing things that some people do and some people don't, positive deviation. But figure out what you've got already that you could just make more of. And then the third, and the thing I say to everybody is do a SWOT analysis. Get everybody in the business to do a SWOT analysis. Find out where the heck you are now. Because you can't navigate from where you are now to where you want to be unless you know exactly where you are. And that SWOT analysis will give you that grounding. This is where we are. Well, okay, let's plan our way forward. 100%. Love it. 3 for the price of 1 there, Hishem.

Yeah. No, look, thank you so much. Like, I think real privilege sort of picking your brain on this. Kudos to you on, yeah, like just, yeah, you've been on a real journey, you know. Obviously found yourself in difficult moments, but I can really tell that you're enjoying what you're doing. You're— there's a, there's a lot that you want to share. And I think that's really coming from an authentic place, that you want to share the knowledge, share the challenges and mistakes that you made so other people don't have to make them, or it's not as painful, uh, for them. So where, um, look, I know you're super active on LinkedIn. If you're listening to this right now and you're not connected with Mike, absolutely connect with him. But like, when it comes to the, the things that we're talking about, I know these are the things that you talk about on a daily, weekly basis. So let's just end on, like, if someone is listening right now, they're a recruitment entrepreneur Like what, what's the best way to connect with you and talk about some of these systems and your pillars and these things?

The best thing to do is to connect to LinkedIn, as you say, and we run free workshops and 90-minute workshops that explain the 7 pillars to a great level of depth. We do probably 4 or 5 a year. They're free, they're online. You register, you get a video afterwards and an ebook and everything that goes with it. That's the first stage because you're either going to see that and think, Yeah, that is for me. And then we've got plenty of ways that we can help you. We've got 3 different layers of service, if you will. The thing that comes after that, if you want to go to the next level, some people do, some people don't, is a 1-day masterclass, which we have one next Wednesday. It's full. I know this isn't our timing thing. This is a podcast, but they fill up very quickly. But that's the whole day spent on the 7 pillars. So if you like the workshop, you're going to like the masterclass. That's for damn sure. But I think you just ease yourself in gently with us. Pick up our free content. We've got loads of it. Tune into the Mike Ames Show on a Thursday at 12:30. Get the stuff that we give in the vault that we have with all this free content. Take from us and see whether, you know, what we talk about is, do you share our beliefs and values, I suppose.

Love it. Mike, thank you so much. Thank you so much for listening to the episode. I hope you enjoyed it and got value from the conversation. If you did enjoy it, Please don't forget to like, share, and subscribe, and we'll see you in the next episode.