Avoid Bad Hires: Save $200k with Accountability!

If you make a bad hire and you keep them because you don't have the right expectations in place and you have that soft heart and you think they're going to turn out, they cost you 200,000. Every bad hire costs you 200,000 that you keep for more than six months.

So you're dovetailing, I think, perfectly into the concept of accountability. If you set the non negotiables around what they are to do and not do, then they're the ones who make the decision. They're making the decision as to whether or not they should be there or not be there.

So really think about that. Like, hey, okay, if I took two steps back and I just got it really clean on, hey, this is the role, this is the clarity on it. This is how you get paid for it. These are the expectations of it. So that when somebody came in, you could talk clearly about it, communicate clearly about it, so that the ones that don't fit it say, nope, I'm out. And the ones that do fit it stay even if they don't perform, you can say, hey, wait a minute, didn't we talk about this? This is exactly what it says. You're not doing it, you've got another shot. I'll put that first one on me. Maybe we didn't get you everything you needed training wise, but second time around that's on them. And that usually leads, if you do it right, to them coming to you, saying, here's my iPad, here's the key to the door, here's the stuff. I know I'm not cutting it. So when somebody says the words HR and accountability, like, what does that make you feel like?

So HR obviously stands for human resources. And I would say that for the longest time it's not an appealing component. And I think like anybody who has a personality like mine probably conflates HR with somebody constantly saying no or correcting things to make them compliant so that you're not breaking any rules of some kind. That's how it feels. Although I know that isn't actually what it is.

Yeah. I always think of it as like this idea that this person that's hired for you is a resource. The human part is kind of taken out of it. It says human resources, but we don't think human, we think resource or asset. And they're worth a dollar figure of some kind of something to be used. Yeah. Which is why whenever we talk about it, we try not to use that terminology. We try to explain the difference, which is one of the reasons why we Wanted to share. This is. I want to think more team performance. How do we bring a team together so they perform at a high level? Because our whole job as owners and leaders of our businesses is this idea of having people reach their fullest potential, connecting what they do to how it affects the rest of the team, how it affects a client, how it affects vendor partners, what their role is in the community, and how what they do makes a difference much further and farther beyond what they may perceive. In just looking at what would be a normal job description, do you see it like that, too?

I do. I also see HR as. I think when it's done right, it can be a very loving component of your business. It's there to help. It's there to advocate for your people. It's there to protect your people from the leadership to. From the bottom to the top, and the top to the bot bottom. It's there to clarify. It's. And sometimes it's there to do the boring stuff like the paperwork and the taxes and the, you know, payroll concepts and your benefit packages and all that kind of stuff. But that hr, the employee performance component, is necessary. And what's funny is, is that, is that we're almost always addressing it. We just don't call it that. So when you think about leadership and you think about your processes, you think about the way in which you work with your people, you're probably inputting some level of HR essentially, in what you're doing. We just don't couch it that way. Especially when our business is smaller, you tend to think, I gotta go have a hard conversation with Billy. Well, when your company becomes really, really big, that hard conversation might have to include somebody to make sure that everything goes okay, somebody who has. Who's an expert at making sure that that goes correctly. What's funny, the better we are at it, and perhaps the bigger our company is, the more we involve other people in that rather than when we're small. We just sometimes, like a bull in a china shop, just go smashing into that situation.

Yeah, it's one of the biggest mistakes that I see whenever we first engage with somebody. We're talking coaching and stuff like that. And I admit, you know, whenever I owned my company and ran it, it wasn't the first thing on my mind. I mean, the first thing on my mind was, hey, I have an opportunity for you. I think it would be great to be here. Part of that opportunity is you're going to financially benefit greatly by working here. You're going to learn some awesome stuff and it was always this verbal exchange of information instead of something that was documented. And so while you may have shared it verbally and set expectations, you thought appropriately, there was nothing that actually backed it up. And so whenever you go two, three, four months down the road and something's not quite going as smoothly as you thought it would with the person that you have, there's this he said, she said thing going on, and it sounds different with each person that you talk to. And so one of the keys to having a team perform at a high level is to ensure that you set expectations of what that performance looks like, how their job is defined, how they play the role from day one. It's not just part of it, it's all of it. And we tend to share little pieces along the way as somebody grows with us, instead of defining it from day one saying, hey, this is exactly what we expect out of you. I think a lot of us operate from a place of almost desperation, of hiring people, instead of this expectation, really challenging the people looking hard for great talent. And the funny thing is, the more challenging you are, the higher you set expectations, the more clearly defined they are and challenging they might be. The byproduct of that is better talent wants those jobs. They want to prove that they can actually do it. So whenever you connect those dots and talk about it from day one, what will end up happening is your team will perform at a higher level if you do the key part, which is to hold them accountable. And so what's the key to getting those expectations in place and defining the roles with job descriptions and clarity, Possibly handbook. Nobody wants to do any of that stuff. That doesn't sound like fun at all. But when you start to look at it from this perspective of how they benefit from it, the joy that they will have working with your company, how they interact with either each other, the impact they'll have on each other, building those actually starts to become fun. You start to identify what the roles are in a function like sales. And these are all the people. Sales managers, salespeople, canvassers, marketers, whoever it may be. And then what do they actually do in their role? And what's the most important thing that they do to the least important thing that they do, and then connecting the dots to why they do it and how it affects everybody. If you define that, first off, the key is holding them accountable to it. And so my question for you is, where do you see people fail in that piece of it, of the accountability side? Because everybody talks about how my team isn't performing at the level I would want them to perform.

Well, my question might be if you're thinking about developing, because most of, most of the folks we're working with are not, you know, 300 million dollar companies that have an entire HR department, right? Or even 100 million. I mean, you've got an HR department probably by the time you're at, you know, 15, you know, you've got at least one dedicated person to hr. So if you're one of these smaller companies and you're going, you know what I do need to think about, like my organizational structure, I need to think about people fit and how those puzzle pieces fit and how do I want to lay that out? How do I want to lay that out so that I can kind of like. Because you and I always tend to look at things as a process. If you want this outcome, we need to start here and build these things so that that outcome occurs. So if you're a smaller company, let's talk a little bit about what does that process look like when you're approaching team performance and how would somebody start? Where would you start?

That's key is knowing where you are in your growth. We call it this contractor quest. We're all in this quest to achieve this goal of building this amazing thing. But some of us may be back here and a lot of times we might get convinced that we need to do this whole HR thing. We need to have handbooks and job descriptions and videos on it and the whole bit. We need to have an HR person in the beginning. You don't really need that stuff. What you do need is you need to know, hey, what do I want my team level to perform to? What do I believe in? So what do I like truthfully believe that somebody can do? I've proven it. Probably in most cases I can go out and sell this much. I can go and do this much work in this amount of time. And we start to set those up as like the criteria of what we want our team to perform at. One key to that is if you are the owner is nobody's ever going to perform at the same level you do because they don't have the same benefit that you do. Our goal is to try to get people to perform to 75 to 80% of what we would do. And so in thinking about that, if, for example, I want somebody to sell 10 jobs a week, like that's the number I want them to perform to, well, then I'm going to have to write my job description, their expectations, responsibilities, what they need to learn in a way that I connect the dots to that if I want them to perform. Because at some point we will need to hold them accountable. That's why I talk about those two things at the same time. While they are separate functions, team performance and accountability, if I don't know what I want to hold people accountable to, makes it very difficult to write, hey, this is the job description.

That has a huge cascading effect as well. So if you don't know what you're holding somebody accountable to and then you're struggling with that person, and now it's at some point like, we need to create, perform, like, how can we help them to perform better if we don't know what better is? You know, if we don't know what, if we don't know what eh and pretty good and better is, then how do we help those people improve, number one? And then in the cases where maybe we've hit that point where somebody has to be let go, you should have a good reason why this isn't working out. And it can't just be, well, I don't like this person, or I don't think they're doing very well. That's not fair to that person. For you to just say, well, you just don't seem to be working out well, what do you mean I'm not working out? Because if we do have to let that person go, they probably want to do better somewhere else. And maybe they need to know where it is that they just didn't perform well or why it didn't work out. But if we don't have that and we're just kind of making this up as we go, that's not real. That's not great leadership, number one. And number two, you're not actually helping that person or whoever that person might go to work for. And you might be damaging your own reputation as well.

That's why HR or team performance comes where it comes in the blueprint. If you'd started with that, you'd be out of order because you wouldn't have your culture defined. You may not have the skills to be the leader that you need to be. You haven't defined a process that you can even identify who's doing what and what they need to perform to. And so that's why it falls right here in that blueprint of what we do in our businesses. If I don't know how clear my culture is, if I don't know how I want people to behave, if I don't know what My vision is, if I don't know those things and what our process is, how do I define a role for a salesperson? What I'm doing is I'm making it up. I'm shooting from the hip all the time. I'm just asking to do whatever I did all the time instead of saying, hey, this is what I want everybody to do, to become repeatable. Because when you become repeatable, you become scalable. And that's why we do, like process before team performance. It defines all the steps and everything, and who does them, who fits where. Now I can take that information and start to build out job descriptions, roles, responsibilities, expectations, those type of things to set the right tone for whenever I am bringing somebody in. Because team performance starts with recruiting and hiring. That's where they're gonna first interact with you. And so for me to have somebody come in and not have something prepared for them to say, this is what I expect, or if it sounds different every single time I talk to somebody, like, that guy seems really good. I think he can sell 2 million. That guy's kind of average. I think he can sell a million. So your conversation changes your numbers that you're expecting, people change. And then you're trying to remember all the time what it was you said. And then down the road, it doesn't go the way you remember it being said. And this person's remembering, oh, you didn't say that to me. Well, if we don't have that in some format of documentation, neither one of you are. Right. Right.

So I think that, you know, especially if you're. If you're watching this and you're listening to this conversation, before you can really start drilling down into your team performance, you have to start with your processes, like what exactly happens inside of your business, and then who does it and when do they do it? You have to have those things kind of laid out to create a job description for somebody. And the job description is the thing that helps you understand what you expect of them and what helps them understand what's expected of them. And then with that job description and that set of duties and responsibilities, now you probably have a better idea of what compensation might look like for that person. And we have a standard to hold them to. Okay. So you gotta have to. There's a flow to being able to establish that it's really hard to create a job description when we don't know what they're supposed to do inside of our business. And so the other component, too, is having an understanding of what your structure inside your company is gonna look like. I mean, how many times have you heard the term well oiled machine? Or I want my business to run without me being involved in it every single day. Well, in order to do that, you have to create a structure to your business that removes you from all the day to day things, otherwise you're constantly going to be involved in them. So what is that structure that you want to build? What's your chain of command? Who do people bring things to when they have a question or when they need something or when there's a problem? If you're in between them and their solution all the time, then they're always going to be bringing it to you. So starting with the process, we have to understand an organizational structure. And that organizational structure doesn't have to be super complicated. As you add people and your company grows, it's going to create some complication. You might start to see mid level management and then leadership and executive stuff. But for the meantime, just saying, hey, this is the person who's responsible for helping you to achieve what it is you're supposed to achieve. You work with them and if there's a problem of some kind beyond that, they can come to me and I can step in to help. Doesn't mean you can't talk to me at all, but I'm here to help you. Okay, but you want to know if you can take a few days off or you have a question about this part of the process or something. This person right here is your man or your woman. So that, that organizational structure and then your processes defining how you create your job descriptions and that compensation structure. And then, and then as you get bigger and bigger, you start to notice the other things, right? HR is not a problem until it's a problem. And it's almost always that one person, that one person who either we just were never going to do right by or maybe we didn't do right by. And then all of a sudden we're like, I've never been sued by a former employee before. I guess HR is kind of a thing. And so now we start talking about concepts like, concepts like an employee handbook and your standards and practices and your code of conduct and all of the other things. People think about a training manual, but an employee handbook is not the same thing as a training manual. And so, right, like how do you act when you're on the road and how much money can you spend on a hotel or your meals for the week? Like all of that stuff just starts to get more complicated and Honestly, that's why we have an amazing specialist coach for that kind of stuff because we are the last people you want to help you with your hr. If you saw our blooper reel, I would probably be in some litigation somewhere.

Yeah, we're small enough still that we haven't had to bring an HR person in to get rid of you yet. So that's been a joy. Let's reel it back in for a second because I think a lot of people that may be watching this are probably on the smaller end of the scale. Those of you that are bigger, you've probably figured some of these things out, maybe even been coached by us or somebody else. More power to you and kudos to you. But if I'm smaller, I'm thinking about what do I want it to look like in the future. And you need to really kind of identify what type of organizational structure you're going to have. Are you going to be really corporate Y like is that the deal? Like you want to be Mr. Corporate America because you're going to grow this business to be 100 million, 200 million, 300 million billion dollar business. We actually have clients that that's their goal is to do a billion dollar business. But we started with them, they were 3 million. And so we want to help them achieve those big goals. But you can't go, hey, let's build everything you need for a billion dollar business. What do you need today that's foundational to get to that $50 billion business or $100 million or whatever the number is. And so when they're thinking about like there's all different kinds of organizational structures. You have the corporate one with C level executives and mid level management and that type of feel to it. There's an org chart on the wall, you know who your direct report is. Even the people have a culture about them that's a little bit more stuffy you might call it, or it might not be the professional. Professional, okay, that's maybe a better word. See HR right there, I need like, right communication, right words. But that might be the right fit for somebody's culture. And so culture has a big impact on team performance, organizational structure and those type of things. But then you have like the multi level marketing type culture. Like everybody's recruiting everybody and the next person down the line is coming into the equation. And there's nothing wrong with one or the other and any of the others that are out there. There's warlord cultures, kingdom cultures and not cultures, but organizational structures, structures. Right. And so whenever they're built because of the culture, but the structure of it itself and who they answer to varies. Because, for example, in like a warlord culture, you usually have three or four strong individuals that are in there leading a group of people, and they have their own little group of people that are totally beholden to them. They're bought into that leader. Maybe not the company themselves. I've seen those be very, very successful. Successful. They have their own inherent problems as well. But we need to know exactly what type of structure we want to have when we're communicating. I talk a lot of the times about managing or leading too many people. It's what breaks down, number one, your capacity, and number two, your ability to communicate and effectively work with those that you're leading. I try to tell everybody, especially when you're smaller, try to keep it to three to five people maximum. Like, don't try to lead anything more than that. Once you have those three to five people, then you can start to add the next person that's a leader to take some of those people in so you can add more.

That is. That's huge. We hear that all the time from you folks out there. Who do I hire next? How do I know who I'm supposed to hire? How do I know I should hire? And the stuff that we're talking about right now are things that you should be considering before you hire. One of my. I mean, a lot of people acknowledge this, but I feel like sometimes it's tricky to live out the most expensive solution, which that's a big deal, especially when you're smaller. The expensive things matter, and it adds up quickly. The most expensive solution to any situation that you're dealing with inside your company is a human. Is to add a human being. So it's always the most expensive solution is to say, well, we're all super busy. We got a lot of things going on, and we don't feel like we can grow because it is so chaotic. Let's add another person. So all we're really doing is adding another person into this cycle and system of chaos that we have, and we're paying them probably a significant amount of money. And maybe even if it isn't a significant amount of money, any person who's running inefficiently and getting paid, it's probably too much. Not that you're paying that person too much, but we're paying too much for chaos. And so having these components in place is so. Is so vital inside your business. And like you're saying, it is critical to Build just what you need when you need it. You don't need to, you need, you don't probably need to have a full time dedicated HR person when there's only like 5 of you in the whole company. Right. There's somebody handling those duties and responsibilities probably in addition to a bunch of other stuff that they do. But there are stages to this where it matters that you have this. And then as you grow and you get bigger, then you're going to need to add these things and add these things and add these things. Plus there's actual, just straight up compliance rules in your state, whichever one you live in, that are going to dictate to you what things you need to have so that you can stay compliant.

Even at a federal level. Yes, there's several companies that some want to be employee, some want to be 1099. They're not real clear on what to do with employee or what to do with 1099. What can I give them? What can I not give them? Those are all really big questions. And we could do a whole video on that. We want to talk a little bit more about why you might choose one or the other. That's certainly something we can talk about today. But I want to go back to what you really hit the head on. I want to make sure everybody heard that, how expensive it is to hire somebody. Because we don't think that way. We think, oh, this person is going to make us money. It's going to create, solve problems, create money. But the reality is it costs about 50 to $75,000 on the low side to hire somebody. That's the low side. And think about, you're like, well, that doesn't cost. I can just start paying them what I pay them, $1,000 a week or whatever the number is. But think about the training time that's necessary. That amount of time takes away from opportunity. That could have been a sale, could have been something else that we might do. So there's lost opportunity that you have to consider by taking the time to train somebody. Lost opportunity to chase another initiative. So you have all of that factor in place, plus you have all the gear they're supposed to wear, their insurance, there's all these other things. Even worse than that, if you make a bad hire and you keep them because you don't have the right expectations in place and you have that soft heart and you think they're going to turn out, they cause you 200,000. Every bad hire costs you 200,000 that you keep for more than six months. So really think about that. Like, hey, okay, if I took two steps back and I just got it really clean on, hey, this is the role, this is the clarity on it. This is how you get paid for it. These are the expectations of it so that when somebody came in, you could talk clearly about it, communicate clearly about it, so that the ones that don't fit it say, nope, I'm out. And the ones that do fit it stay. Even if they don't perform, you can say, hey, wait a minute, didn't we talk about this? This is exactly what it says. You're not doing it, you've got another shot. I'll put that first one on me. Maybe we didn't get you everything you needed training wise, but second time around that's on them. And that usually leads, if you do it right, to them coming to you, saying, here's my iPad, here's the key to the door, here's the stuff I know I'm not cutting it. And it starts to put us in this position of not having to fire people. They literally leave because they're not hitting the expectations we know are achievable and others are doing, hey, have you heard that there's a social network just for you? Well, if you haven't, you're going to to. It's the Contractor Collective. It's a purpose driven social network that we built just for you. So you have a community that's just like you, sharing information to make us all better. No negativity, no distraction. If you're anything like me, you hate social media because of all the distraction and ads and all the other garbage algorithm telling you what you want. This allows you to create your own algorithm to follow the people you want to follow and get the feed that you want to have. There's also all kinds of other training, content groups to join. Fun stuff to do as a community of contractors without the distraction of traditional social media. If that sounds like a good thing for you, go to the Play Store, go to the App Store, download the app and join today or join right below. In the description there's a link. Invite all your friends and we'll see you inside. Contractor Collective.

So you're dovetailing, I think, perfectly into the concept of accountability. Yeah, because you're right. If you set the non negotiables.

So favorite words.

It's a great, it's kind of been a theme for us the last few days. You're setting the non negotiables around what they are to do and not do. Then they're the ones who make the decision. Yeah, they're making the decision as to whether or not they should be there or not be there. Now, it could just be a bad fit. That is 100% the case. Some people take a swing at doing something and then discover they don't really like doing that. I've done that myself in my life before as well. It's been like, I'm gonna try this, and then this isn't actually for me, and that's okay. And then in some cases, you know, when somebody lays out a set of standards and you know you're not hitting those standards either because you just don't like doing it or because for some reason you're just not well built for that thing, then there isn't any question. And then you're right. Then people, people kind of. They just decide on their own that this isn't the right spot for me. And so that this idea of accountability starts to, starts to, starts to come in flowing off of this HR organizational structure. What I feel like is sometimes some of the stuff we feel is kind of dry but is super necessary and then starts to flow into, okay, if you have these things now, we've created some standards, we've created some posts, some marks, some beacons that people can aspire to or that they know they have to hit. You can't hold somebody accountable to something that either A, we haven't talked about, or B, they're unaware of that isn't documented. Because then you get into the he said, she said. So let's talk about this concept of accountability then. If we have.

Before we go there, before we go there, let's talk about that organizational structure a little bit deeper for the importance of it and the big problem we always see with it. So this small company has started to get some of that structure in place. They've laid out their processes, decided how to do a job description, getting some people in. They didn't make the wrong first hire, which is usually to hire a whole bunch of salespeople. That's our first instinct. Hey, generate more revenue, hire more salespeople. So reality of it is it depends on you, number one. Like, are you the sales guy originally, or are you more the production, the performer of the work? If you're the performer of the work, that might be the right first move is to hire a good salesperson. I still might challenge that a little bit, because your work then is coming word of mouth, because of your performance. You do it well. Because you do it well, you get more Work, you get referrals, and then you think, hey, if I could get a salesperson to go sell those four, I could perform more work. And the reality of it is that whether you were that work performer or the sales performer, the right first person for you to hire, nine times out of ten is somebody administrative. Think about all the stuff you don't like to do. And this pretty much goes for the work performer and the sales performer. You usually don't like the administrative stuff. The paperwork, the books, the invoicing, that kind of stuff. That's not what we got into business for. We either want to do what we do really well or we want to go sell a whole bunch of it. Oh, man. All those details and stuff, that isn't my jam. But instead we go and hire more people that do what it is that we do. That just creates more chaos, more paperwork, more invoicing, more systems and processes to follow that don't fit our nature. And so that right first person is normally an administrator. Would you like.

Generally speaking, I'm going to agree with that. Administrators, they're the ones. They will almost always end up being the glue. They're almost always the glue that holds that place together. And if you think about any job you've ever had in your past, most of us didn't pop out of the womb and then start a business. So most of us have worked for other people. We've been underneath other people's leadership and been inside of other people's organizations. If you just think back a little bit around some of your career experience and just think about that silent person, you know, that. That we. That isn't the loudest. That it's probably an admin or an office manager in there who constantly made sure that this thing got to hear and that this thing got paid for and that this person found out about that and that the. The company party actually got planned and we actually booked the room and that, you know, that made sure the lights stay on. You know, the person that the owner.

Goes to and goes, what's really going on?

Yeah, what. What's actually happening inside here? It's gonna be an admin of some kind almost every time. And they're the ones who. Who do the things that if they don't get done, they quietly build up and then the whole company will seize up. Like an engine without oil.

They tend to be the person that when you give them a task, it's done before you can turn your head around.

Or they already know that that task is coming. And by the Time needs to be done. They've already done it. Like, they can be. They. They are that powerful. And I would challenge you. The next time you're at a networking event or you're talking to somebody who has a business the size that you want yours to be, ask them about their admin person and ask them who.

Their key people are.

And they're going to. They're key people. One of them will be an admin and they'll be like, without that person, this place would fall apart. And there will be an admin in that group of people.

Yeah. And as you grow, you gotta mitigate that risk, too. Like, if they do leave, what happens.

If Kathy gets hit by a bus? We can't have our entire business coming to a screeching halt. So even that ends up getting scaled. But I would agree it's almost always gonna be that that right hand person is going to be an administrator in one form or another.

So let's talk like, I'm owner, I got an administrator, got my world kind of straight, taking care of my stuff, which creates time for me to go do what I do better. Really. And truthfully, one of the things you could do that would solve the most problems for you is to sit down and write down everything you hate doing and then build a job description off of that. And that's the first person you hire.

Well, and I'm going to throw a caveat with that one, too. Oftentimes we will attack trying to offload some of the biggest, hairiest, gnarliest stuff that we deal with because we don't like it. But I will say this. If it's big, hairy, gnarly, and time consuming, it'll be the most difficult thing for you to offload. So be careful about saying this thing here, I got to get this off of me, because that's going to be the hardest thing to put onto somebody else, even if that's something that needs to be done.

So you can't just drop it on them without giving them any training or guidance.

So if we need to, we need to think about the easiest, fastest win and the easiest, fastest win when it comes to something like this is all the little things. The little things that maybe aren't that difficult and that maybe don't take up a ton of time individually, but collectively, if I was to get rid of all of these little things right here, if I got rid of all of those, I buy myself 10 hours a.

Week, most of the little things, and.

They'Re the easiest to train. And finding somebody who's capable of doing those things is also easy. Finding somebody who's capable of handling a big, hairy, nasty thing that you'd got to deal with, that person's going to be harder to find, more expensive, and take longer to train. But finding somebody who can handle those little things, easier to find, less expensive, and quick to train and pick up. Pick it up.

And I would say that in most cases, the little things are the things you hate doing the most. They're usually repetitive, they're time consuming, they're tedious. Just doesn't fit who you are as an owner. Because you're trying to build something. You have a big vision that you're going after in a lot of cases.

And this. But this also applies because if you're capable of figuring this out as an owner, and then when you think about your leadership component, this applies to your sales manager, your production manager. Like, don't. If you have a production manager and they're like, I spend a ton of time doing this right here. And you're like, well, that's actually your job. What's keeping you from doing that? And the production manager goes, I got all these little things over here that I got to do. Let's find somebody to help you with those little things. The way I did when I was a solopreneur. So it's funny, I've started coining a term for this and I started to coin the term micro scaling. And the reason being is because we hear a lot of content around scaling. Your business get big, huge, but scaling. And maybe we'll talk a little bit about this later. So maybe I'll just kind of save that. But this idea of micro scaling.

So let's lead into that because I think that's where I want to head next. It's like I've now hired my person that I need to take the little things off. So now my company grew a little bit, and then I maybe hire a few salespeople and they're doing okay. I'm leading them now. One rises up and now I have a sales manager. So I'm starting to scale, doing some of that micro scaling you're talking about. But I put somebody in a place of authority, so I give them empowerment to run this thing, whether it's an office manager, production manager, sales manager. What's the biggest thing you see owners do whenever they make that first step? That's their biggest mistake.

They probably step completely out of it when they hand something off is the biggest mistake I see.

I would argue that they don't let go of it. They stay involved because they have the relationship with those salespeople. And they raised one of those salespeople or maybe brought somebody in from the outside to be the sales manager. And those salespeople do the mommy daddy thing. They try to get something out of the sales manager, and the sales manager says, no, that's not the way our system works. Not the way we do things. You have to hit this criteria to get this thing, or you have to turn it in this way. And they go around that guy to the leader, the owner, the true person that has the power. This is, hey, man, I really need to get this job through. I need to push that thing through. Or can we cut. What he's really saying is, can we cut this corner because I'm special. And the owner truly believes he is and actually gives him what he's looking for. What's wrong with that?

They just subverted their leader. They put in place and they set a precedent. They set a precedent that if you want to get. If you. If you want to get what you want, you can't go to this person. You have to go to the other person. So the mommy daddy analogy is quite true, right? But that's no. Mommy says yes or vice versa.

That's why that structure is so important. If you put somebody in a place of authority, you have to allow them that authority. You have to sit there and go, oh, sales guy coming to me. Uh, you need to go talk to your sales manager. I don't do that anymore. Nice job. Swat on the butt. High fives. You're doing a great job. I love you, brother. And let that salesman, that's what you're paying him the big bucks for, is to lead that group of people. You have given him the criteria on how to lead that group of people. Allow him to do it. He's going to make mistakes. He's going to do exactly what you did when you were learning. Let him do it. And he will learn from it. If you do it for him, you will always be expected to be the sales manager. You're just paying somebody 100 grand, 200 grand a year to do the little things for you, not to truly take that thing off of you. Because when you can take that thing off of you and have it fully led, that's when you start to become an owner of a business. Truly. You start to lead leaders instead of lead everybody and have your hands in everything. It's this idea of a control freak. That was me, like, I had a big Problem with that. And I had to learn that art of delegation and I still struggle with those things.

I was gonna say was, yeah, I.

Knew that was coming, so went ahead and subverted it before. I subverted it before it was. So let's. We kind of got a lot about structure talking about. So that structure sets the expectation for what we hold people accountable to. And that accountability side of things has to do with compensation. Like how we get compensated for what we do has to do with how much of what we're supposed to do in a certain amount of time has to do with the behaviors that we should have within the company. So explain a little bit about how those two things tie together.

So in my own life, accountability is one of those is another word that's a little HR ish. In other words, we hear HR and we go, I don't really like the term HR or it conjures up things. And then you hear the word accountability and you tend to get. A lot of us get the same thing. I think about accountability, all I think about are the negative aspects of being held to account for having not hit the mark. And that feels. But what I can say is that accountability has been the number one thing that has led to my own growth. Being held accountable, having somebody say to me, nathan, I know you can do more than this. I know that you can do better than this. I know that you can hit this place. I know you can do this thing. And I am going to be here to help you and hold you accountable to hitting that mark. That has been one of the number one keys to my growth in my life ever. And so the impact of accountability now. And here's, here's part of what I see with owners too. Once they start hitting that mid company level, it's not that they have two or three people. That's not that difficult because each person is up in the other person's business like crazy all day long because there's not that many people. Once you start having other people inside your business now, all of a sudden there's things going on that you may or may not be aware of on a day to day basis as a leader, as owner. And then all sudden you find out about this stuff and you're like, how come nobody did anything about this? Or why is this allowed to go on further? Or why are we not hitting our numbers now all of a sudden you're asking questions of your people. And then when I talk to owners in that stage, you say the word accountability and you'll watch their Eyes light up or you'll watch their head go back down. Either way, it's the same response, really. They're going, I need accountability. And I know my people can do amazing. And I know that we're not doing what we should be doing. How do I do this? And so making sure that you had a lot of the structures we were just talking about before is key number one. And then number two, this is, and this is tricky. We got to track it. If we have a metric or a number or a standard that needs to be hit. If as much as absolutely possible, and it's not always possible, but as much as absolutely possible, we need a way to measure somebody's progress towards hitting whatever that standard is.

One of the biggest mistakes we see is literally like, it seems so simple. It boggled my mind whenever I got into this industry.

Well, this is perfect, right? How many sales managers have a sales guy who, who's underperforming? And your go to is what? The guy is.

Weak, Lazy. Lazy. Yeah, he's lazy.

He's not. He's not putting in the work. He's not grinding. Well, do you know that for sure? Because here's the thing. Odds are he probably is a little lazy. Sales guys, all of us, I'm a sales guy. As a sales guy, like, we do tend to be a little lazy at times. We want the path of least resistance.

Sometimes that happens because we're trying to manage more people than we can affect effectively manage. So we leave them out on an island and we perceive them as lazy. But they don't have direction, they don't have motivation and they don't have to.

Have those metrics that'll be your go to. But what, what if you got a guy that is hustling and is grinding and is putting it in and you have no way of knowing that that's what they're doing. Now all of a sudden you're hammering them over being lazy or not putting in the grind, and they're going, I am, but it's something else. And so accountability requires having the standard and then being able to track it. Being able to track it and point at it and say, you're doing these things, you're not doing these things, you're doing these things, you're not doing these things. And then you know where to improve your people and you hold them accountable. Because I'm telling you right now.

There.

Are a few unicorns running around in the world who don't care what the standard is, they're going to blow it. Up, they want to blow it out of the water. Doesn't matter. When you say our best guy did two and a half million in sales, or this admin over here is capable of processing this many files in a single day, or this person does this, can produce this many jobs or handle. You're, you're going to bump into those people who go, I don't care what, what, what's the best. Like, like, what is it? That was it John Daly who said, what's the course record and where's the first tee box or whatever.

Right.

Doesn't care what, what the, the bare minimum is or who did the best. They're gonna crush that. Those are the unicorns. They're rare, your average people. And don't hear me wrong, we love average. Like, we love the average people. The people who do exactly the amount we're hoping and asking for them to do. They're the ones that pay the bills, by the way.

They're the workhorses.

They're the workhorses. Okay, we love those folks. Folks, your average person, though, is going to do it. Will generally do. Just get to exactly what you're asking of them and they won't generally push way too far, but they, they are capable of rising to that. So you have to be very cognizant that when we want to hold somebody accountable, are we holding them accountable to the bare minimum? Because that's where most people will just rise to the bare minimum. And then they'll celebrate it. They'll go, ooh, I hit my numbers this month. Meanwhile, you might be going, that was terrible. That's not what I want. But what did you tell them?

Well, that's one of the things I think is one of the biggest weaknesses of owners in this industry. Because there's something inherent about our industry that puts us in a position to fail at a high rate. 80 to 85% of people in the home service contracting business fail within the first three years. And the reason is, for lack of a better term, it's a low barrier of entry.

Well, I mean, reason number one is probably finances. They don't know their numbers. And so within that first three years, they, they, they just kind of lose track of where that's going.

And business acumen, like understanding how to run a.

Leadership.

Yeah, leadership and business acumen, like how to actually run a business. And so one of the key things, and I noticed it when I first got into the industry, was how much am I supposed to do as a salesperson? I was a sales guy and they're like, as much as you can. But as we've looked at more and more companies, whenever they hire people, they don't have a minimum standard or an expectation or even a goal. That goal might be really out there and nebulous. Like, hey, sell a million dollars. That's what you try to get to. Or, sell 2 million, and that's what you're trying to get to. But there's no, like, what are you supposed to do this week? What are you supposed to do this month? What are you supposed to do this quarter? What is our quota that gets you on the team, but you're in jeopardy of losing your job because I'm trying to find somebody to beat that number. This is expectations. This is where we need you to be. And if you're out there and you're hiring people and putting them into your business and you're just giving them the guidance of do as much as you can in the amount of time available, you are doing them a disservice, and you're doing yourself a huge disservice.

You're also putting your company in their hands, by the way, because your people, whether they're a salesperson or an admin or a production person, will only get to as much as they think is okay, because no other number, no other standard, nothing else has been thrown out there. And so what happens is, If I have 10 people all just doing as much as they, for whatever reason they think is the right amount, then the only way to grow my company is to add more people who hopefully also have some number in their head.

Well, human behavior tells us we'll work to as little as we can to make the money we need to survive. That's what human behavior for most people will lead them to. So, hey, if I got to make $65,000 to pay for my house, my car, and all my stuff, I'm going to work to that level. But we're doing them a huge disservice because we're not helping them achieve their true potential. I believe that's our job. Whenever we are setting our organizational structure and our standards and then holding people accountable to those standards, we're helping them achieve their true potential by giving them enough challenge that is proven and acceptable to do to show them that maybe they can do a little more than they thought they could.

So from time to time, it is going to be negative. Accountability comes with a carrot and it comes with a stick. And that's where I feel a lot of owners, they don't like the stick part. But they know they need it, and so they don't want to have that conversation. Neither do I. I don't like having that conversation. I like having come to Jesus conversations with people when it's, like, time for accountability. But what I can say is that some of the most impactful moments that owners have with their people, that leaders have and that I've had with coaches, are those hard conversations. They are the hard conversations. So do not be too afraid to do that, because sometimes people are waiting for it and they actually kind of want it.

It.

They know that something difficult is coming, and the fact that it hasn't come yet is stressing them out.

Yeah. When things get quiet, you know, problem.

Sometime, I know this is coming. So there is a stick component to accountability. And so, yes, we do need to lay down those standards, and we do need to go, why are we not hitting this standard?

But if we. If we love and care enough for the people that work for us, we will apply that accountability because we want them to reach their potential. We want them to achieve what they're actually at, because we talked to them whenever they first came in. Remember, we set the expectations to start with. It's not that we're asking them to do something new. They're not achieving what we asked. Our job is to help them reach that potential. If they just don't have what it takes to cut the mustard, we're actually not being kind or loving. By keeping them, we're doing them a disservice. We're not allowing them to leave and go find the thing that actually allows them to reach their potential. This is why they're costing you $200,000. They're holding down a seat inside of your business that the right person could be feeling and you could be pouring into that would generate that revenue for you. And that's why they're costing you money, money. Every day that you keep them, you're also costing them their lives. You're costing them their potential. And we all think we're doing it out of kindness and lovingness. Love is both kind and hard. And sometimes those conversations of conflict, we do them out of love because we care enough about that individual, that human being, that person. Hey, look, we're not cutting it. Let's put this action plan into place. Let's see if we can get it done. We put our effort in, and they just can't do it. We have to say to them, hey, this just isn't the right place for you.

Accountability is literally the key to helping your people knock it out of the park.

One nice thing is they might have a different seat in your business. It might not be their thing. They might be in the wrong seat on the bus. And maybe, maybe there's a different place. But even if that different place doesn't work, it's got to be, this is not the right place in general.

So I don't know. That seems. That seems pretty, Pretty strong.

Yeah, I feel like that covered because it really is. Human resources and accountability creates team performance. Sam.