All In — Mike Michalowicz

So a quick note before we dive into today's episode. If you're trying to grow your business and you're wondering where the real gaps are, we built a free diagnostic tool that we're calling Q20. Give us 10 minutes and you'll get a custom analysis back. No pitch, no call required. Scalingcoach.com/q20. Go there now. Scalingcoach.com/q20. I'm just going to sit here and enjoy the music for a minute.

I'm jamming my way in. Like a '70s vibe.

A little bit. Yeah. Because I'm a boomer. So, hey, you can't do anything significant on your own, right? Anything big you want to do, you're going to need a team. And that's what our subject of our conversation today, a great new book on the subject of building great powerful teams. My name is Bill Gallagher, scaling coach and host of the Scaling Up podcast. Our show comes to you every week, a couple of times a week, with something to do with helping to grow your company, get your team right, dial in the strategy, execute better, optimize the cash, get the value up, and lead that whole thing. You, the person in the mirror, the person between the ears hearing this right now.

Yes.

So all our show back catalog, all that kind of stuff. Over 500 shows now at scalingcoach.com. Our tools, downloads, coaching programs, everything and more. Scalingcoach.com is where to go and find all that. Hey, I'm joined now by Mike Michalowicz. Mike is a friend. He's a past guest of the show. He's a prolific author. He's one of us. He's an entrepreneur. He's grown several companies, uh, past that multimillion-dollar mark. He's even sold some. And that led to one of the books. So, you know him for Profit First, Pumpkin Plan, Clockwork. I don't know, I'm missing some, right? Yeah, but you're pretty close.

I got them all positioned behind me if you want.

I read them on the wall. So anyway, and Mike's also a personal friend. My wife and Mike are in a mastermind forum type group together for years now. So we know each other really well, and it's just great to have you back on the show again.

It's good to be back. I'm going to call you Billy Fever with that '70s funk music. You're on WKRP in Cincinnati late night with Billy Fever.

You know what's funny? So I was a DJ, of course, years ago, and I still have some recordings of me 40 years ago on the radio, and it's kind of cringy. And then— but I didn't have— we, you know, you listen to your voice as a 20-year-old and it sounds different. And I just used— I was just Bill Gallagher. I didn't have like the cool name, right? But my daughter, in like a blink of an eye, goes, oh, that's easy, you're B. Ill. I'm like, oh, B. Ill. Yeah, I love it. It's so easy, so obvious. I'm just so obvious. Yeah. All right. So anyway, uh, welcome. Thanks for joining us to talk about your new book. Uh, so Mike has a new book, All In.

It's going extremely well. I mean, it literally just launched, uh, January 2nd. So we're, we're doing this on the 8th, so 6 days ago. And what's nice is it's my first foray into something outside of entrepreneurship alone. This is extended to leaders of organizations. And just today we had a large corporation a coding company, um, reach out and ask, hey, can we deploy this with our team? Yeah, which is new to me. Yeah, typically not the folks to speak to.

Yeah, yeah, the big company stuff.

Yeah.

So, um, we're going to talk all about the book and the ideas in it and share some of the stories from it and that kind of thing. But, uh, why don't you start off with the, like, why this book? You, you love to write books and you're you're becoming the most prolific author in, in the world of business?

I, um, there's two reasons. There's a personal story, personal experience that was my aha. And then there was the greater motivation. The, the greater motivation, I'm very lucky, Bill, is, um, to have some readers that I'm engaged with and having a dialogue with and just asking what's the challenge now?

Right.

And pre-COVID, it was recruiting and retaining and raising the bar at your organization. COVID hit and what was formerly desires became expectations. I wanted to work from home. Now I expect to work from home. I wanted flex hours. Now you better give it to me. But the, the personal realization why I always knew this book had to come out of me. My second company was a forensics business, computer crime investigation, and I was running and crunching numbers for a full day in my office and figured out, my gosh, we can achieve $10 million in revenue this year if we simply do X, Y, and Z. And I was ecstatic about it. I came out, this brick and mortar back in the day, I had 30 colleagues. I called everyone in and put it on the wall. I put like one of those big sticky notes in front of the number $10 million so you couldn't see it. Cued up Eye of the Tiger. It was like total Cheese Factor. And I'm like, this is the year we're doing $10 million of revenue. And I rip it off the board. You're right. And then it was like this big, air out of the balloon moment. Like, no one cared. I'm like, why is everyone pumped about this? And that was it. That's exactly it. And my assistant Patty, amazing, she came to me and said, Mike, if we achieve $10 million in revenue, you get the bigger house, you get the brand new car, but why should we care about this? Yeah, it was the first time I had a realization that my colleagues, my employees have visions and dreams of their own. And the vision for a business is not the vision for the entirety of the team. And that was what I construed to be the same. When we set a vision for the company, it's what the leader wants. It's their own selfish interest and it's wonderful, but it's ours. We have to understand what our team members want. Someone wants to learn Spanish, someone wants to buy a house, someone wants to learn to play guitar. And once they start achieving their collective dreams, and I as a leader am supporting them and blocking and tackling or just keeping that dream in front of them. As I prioritize their vision, they prioritize the vision of the company. When I had that realization, I started transforming my businesses and how I lead them. And it's been transformative for me. And I think for my colleagues too.

You know, I love hearing this cuz I'm, I'm very like recreated by, by the sharing. I, I had a, a CEO that I was coaching and he'd reached out to me. He's like, Bill, I've heard you talk a couple workshops and I, I think you're the guy, like a lot of Coaches bug me, but like, you're a style fit for me, and I know Scaling Up's good stuff, and I really want to grow my company. I'm like, great. So we start working, and we started doing the plans and things like that. He's got big ambitious plans. And then by our, I don't know, maybe our second, third session, he says, I don't know what it is, but like, we do all these things and they make sense for me and they work for me, but like, they don't seem to move the needle in my team. And I'm like, I don't know what will motivate them. I've tried SPIFs and I've tried games and I've tried bonuses and I've tried more commissions and like, I don't, it just doesn't seem to matter. And now like, you know, he's got a great house, building another house and cool cars and all that kind of thing. And he owns the business and right. And I'm like, and we share this, you know, we love the same cars, that kind of thing. And I'm like, okay, but what do your people want? Why would they want to help you build this thing? Right. Which is the problem. Every time a leader comes to us with a BHAG of $100 million or a billion or whatever, it's like you could get your $100 million, billion, whatever it is for you, uh, but most of your team's not going to be super rich. And so what are you going to do for them? Why would they care? What do they actually want? And so I asked him, what do you— so what do your people want? Why would they care? It's like, I don't really know. And I'm like, I just, you know, I create a spiff or a whatever. And I'm like, okay, well, let's go figure that out. Let me go like test the waters a little bit and come back and probe with you, because maybe you know more than you think you do. So I go and I, I walk around the office for a couple hours and, um, I talked to a handful of people and I come back to them, I'm like, okay, who is ready to start a family? Don't know.

Well done, man.

Who wants to buy their first house? Don't know. Who's never taken a vacation outside the United States?

Yeah.

Yeah. Who wants to go back to college? Maybe that one. Okay, good. That's why those people would want to perform. If you could somehow connect your increased performance to them getting what they want in life, then you might have some people interested in playing with you.

I love it. You know, I, I argue no one's looking to get rich. We're all looking for meaning and wealth is an expression of meaning, but also to getting that house or traveling outside the country for the first time.

What is it?

And so our job as leaders, yeah, is to identify and understand the meaning or meaningfulness everyone's trying to achieve.

Yeah.

I also feel, and, and we've tested and, and proven this effectively, that the job of the leader in the company is not to satisfy that. The company does not buy the house for that person, does not get the ticket so you can fly outside the country. That's called gifts. And gifts are nice, but gifts are not meaningful in that they're not accomplished. So they're not satisfactory in many ways. Uh, a great example, a friend of mine shared, he goes, Mike, Imagine this year they said, you know, we're going to skip the entire NFL season. We're just going to pick the Philadelphia Eagles and say, you won, you won, and you are the world champions because we just don't want to waste the effort. And plus, there's going to be so many injuries. What kind of season is that? It's the games and the journey that causes that accomplishment to be significant. We have to realize this for our team members too. We're not here to just gift them the Super Bowl. Our goal is to identify what their Super Bowl is and then keep that objective in front of them. The job they have within your organization usually is a means to the end of that meaningfulness. It helps them serve that. And when leaders receive that or understand that, reciprocity kicks in. Mm-hmm. If I care for you getting that first house or whatever it may be, taking that first trip outside the country.

Yeah.

You will reciprocate and say, I care about your dream, leader. And your dream is to achieve this size business or to introduce this new product line. And I'm more invested because you're more invested in me.

You know, it's interesting, as you say that, what comes to mind for me is the Olympics. And when somebody, uh, takes, uh, gold, silver, bronze in the Olympics, right, they step on a podium step and then they, they put a medal around their neck and then people clap and they play some music. But if I went downstairs and I grabbed some old metal and I put it around my neck and I played some music and stood on the landing, I wouldn't feel anything. It's what went into that moment that we ritualize and signifies something.

I tell you, the music would be damn good if B. Ill is playing it though.

I threw an event like a thank you event for my team, a celebration some years ago, and we had in a surprise catering, catered lunch with servers and champagne and music and like it was a whole cool thing, right? And, but if I just did that, whatever, in the middle of the day, it wouldn't have meant something except that these people went from near collapse to doubling the company in a year. And that meant something. And so then it was a very powerful event, right? Yes.

Yeah. Recognition of accomplishment. Here's a couple of things I've discovered when I was writing All In. The way people like to be recognized varies. I always thought it was public recognition, like, you know, bring the person up on stage and put that medal around them and say, look everyone. But, um, we created a concept called POMs or personal operating manuals. This is, um, when you buy a computer and it's that quick start guide, you know, the first page, you don't have to read the whole manual, how to get the computer up and running. For every employee at our company, including myself, there's a POM, a personal operating manual. How I like to communicate, um, what I'm good at, what I'm not good at. It also says the way I like to receive appreciation. Mine happens to be public recognition, words of accolades, but, uh, another colleague is a gift and, uh, or momentum. Another person's active service. So, uh, Erin, who's my personal assistant here, just did some Herculean stuff. And, um, they recently, her family recently experienced a flood at her home. Um, we took some actions to help her with that. As opposed to just saying, you know, you got this, or, or even gifting the solution, we took actions. And she is a person that is, uh, receives recognition through acts of service, was so appreciative of that. So a great leader will recognize that everyone receives accolades different ways. Mm-hmm. The other thing is, um, also recognizing individual accomplishments. I love that you did that amazing, you know, celebration for the company's accomplishments. I wouldn't be surprised if you also recognize people's individual accomplishments during that. Yeah, of course. In our company here, we recognize individual accomplishments to the level of personal vision satisfaction. So we have one colleague here, Amy, who is looking to be cancer-free. Uh, she's been that way for 5 years and wants to do a 6th year. And every, as long as it's important to her and she's willing to share this, uh, every year we recognize that. We have a tree, it happens to be outside my office here. It's barren. But we have little leaves, and when someone achieves a personal dream, learn the guitar or be cancer-free for another year, you fill out the leaf and you put in the tree. This tree has bloomed massively, and it's just a real cool way of codifying or materializing recognition of individual accomplishments.

Yeah, it's really great. Uh, you know what, it also comes through in that is the, the need to create traditions, rituals, touchstones around things. People want to create powerful company cultures, and I'm like, okay, well what does a culture look like? Think of another culture. Right? You have foods and symbols and holidays and sayings and special words and colors and like build that intentionally around your company and create a positive culture that is one you're proud of like that, right? That's how you enshrine this stuff. And then, you know, it'll repel some people, which is great too.

That's great too. It's great too. And what's interesting is I did a lot of investigation to culture versus community. And I think when we use the term culture, we're actually talking more about community and the collective values. I think traditional organizations, or traditionally we've been taught, what are the values you as a leader have? And then emanate, emanate that throughout the organization, expecting people to comply. If you replicate the values, you're a fit. If you don't, you're outside. But that mentality is, I am, therefore we are. I believe community is actually now the stronger model, which says we are, therefore we are, where leaders are intentionally seeking diversity. We're seeking people with different backgrounds, different experiences who actually may have different values. They have a common goal. They're trying to move the business forward in a way that's serving the client, also satisfying their individual goals, but they bring in different perspectives. Inevitably, that collective perspective, uh, causes or builds a stronger morphic, changing organization, and it doesn't cause an organization to get stale. And I'll give you an example of my own company. For the longest time, one of my personal values is no dicks allowed. I think it's, it's funny, but it also speaks to who I am. I don't want to deal with dicks. I won't deal with dicks, but I won't be a dick either. Like, that's not permissible for me.

Mhm.

And so now, as we've grown, we've got 20 people working here. I came out, uh, at one of our meetings 2 or 3 years ago and said, hey, we really gotta stick with this value of no dicks allowed, and you were ever treated that way. And one person raised their hand and said, Mike, that's really bro-y, no dicks allowed. Why don't we modernize this? And we started having this conversation of what's our collective values. And it wasn't no dicks allowed. It was be the Ted Lasso, which is a new fresh perspective on something that I appreciate, but is different than I was espousing. The Ted Lasso, if you've ever seen the movies, is be the eternal optimist. Um, you know, flourish in kindness, but also face The reality of what life is, but see the positive side and act accordingly. And a whole new set of values came out every year. We're sitting down and saying, how's our values matured? And that has been different than having static values. Like I used to believe I had to have in the past.

You know, I love that you had distinctive values and you went ahead and changed them. I encounter a lot of companies and they're like, we've done our values. They're really good. And I look at 'em like, yeah, they are done, but why not make 'em a little richer? Why not keep them alive and keep refining them over time? Like, you know, No dicks, like you could go no assholes. That's a popular book also, right? And yeah. And, and a popular idea, but gender neutral, right?

Yeah, exactly.

But you flipped it into a positive one instead, like, you know, really great people there. And the, the Ted Lasso, you know, depending on how lasting he is, right?

For sure. And that's why it may change.

It may change over time, right?

Yeah. And a brand new one came out too. From that meeting, the team came back and said, we are about profound simplicity. It's actually on the wall here. I came in a week ago and someone, I don't know who did, but someone put it on the wall right next to my office. Profound simplicity. And every time I walk out, I'm like, yes, that's what it's about.

That's great.

Sharing that, um, we can be of the greatest impact doing the work we do is if we can make it impactful in the moment people experience it. And That was something brand new that maybe was always there, but just hadn't been enunciated before.

You write about Elliot being maybe a cautionary tale. Um, yeah. Tell us about Elliot.

Yeah, but Elliot is a cautionary tale, really, again, reflective on me. Uh, he was one of those hires I made in the traditional sense, and I learned a lot from his experience. Uh, I went through the interview process and as a small business, You know, if you get 10 resumes that you think are of pseudo value, even if it doesn't really match the goals perfectly, I'll consider 'em. I did 3 interviews. By the third one, I was exhausted of the process and said, Elliot's the best of, of these folks. But, uh, Elliot went on to, uh, to do less than ethical things, including pretending one of his family members died so he'd get a, a paid vacation. But at the end of the day, in reflection, at first I was pissed and I was like, God, he's a real C player, a real cancerous person organization. I found that his story was in a big way a representative of my leadership at the time. You know, learn through the burn, um, go on the job learning. You just go out there and do things, right? Very minimal direction, total authoritative control, micromanagement from me. At a certain point, he started to reverse the golden handcuffs, or handcuffs I put on him, and he did them to me. And, and this is a danger that some leaders will fall in where an employee starts building a fiefdom. He started serving certain clients. We were in the tech space at the time, and he used to have passwords and so forth that he would only know and he wouldn't share with us. And then the day came where there was a little bit of a shakedown. He said, hey, Mike, you know, I'd hate for these networks to collapse because I'm not around. And I don't think I'm being paid fairly. I don't think you think I'm being paid fairly either. We better fix this. I'm like, oh my God, I'm getting a shakedown. So you gotta be careful of that golden handcuffs. But again, it points to my leadership. I didn't spend the time necessary to understand the person. I didn't understand his personal goals. There's a reason he faked a family member dying because he didn't feel comfortable coming to me saying he had an opportunity to get some vacation time in, in a really unique way and expect me to accommodate it whatsoever, even though I think I would have. I didn't know him well enough. Yeah, the little button or bone of the story is Uh, only about 10 years later, I'd sold my second company now to a Fortune 500. I worked for an employer who did the same thing to me, told me just go out, be billable, on-the-job learning, micromanage me. And I behaved like Elliot, uh, resistive, um, trying to get payback at the man and ultimately got fired. So I think the leader is the key factor there.

I like that you say in there, treating people as human beings rather than human resources. And that I thought that that line was particularly good. Like, we tend to be like, oh, I need somebody who's got this kind of background and I'm just going to slot them in there and then cut them loose and tell them to do their magic. And, and there's no, like, connection there. We fail to understand that, that deep background. Time and again, a bad hire like that, you discover something. It's not just that they're a liar, it's that they— your whole communication was broken. They didn't actually belong in the role or the company sometimes.

I don't know if you read, uh, David Marquette's book Turn the Ship Around, Bill.

No.

Oh, it's something maybe you want to discover. I write about it in, in my book. Uh, the Navy's worst performing ship was a submarine, and this is back about a decade ago, maybe a bit earlier on, early 2000s. And, um, all the people were filling in roles, they were human resources, but they were performing as C players. They all kind of stunk. They changed one person on that ship and the whole ship turned around. They became the number one ship in the entire naval force within a year. And was the captain. So all these C players became A players. And what he did, what David Marquette did, was he didn't treat them as human resources. He treated them as human beings. He understood that everyone has their own vision, their own mission for themselves, their own desires and wants. And once he started to understand it, He tried his best he could to accommodate it, but they started to do the same. They started to understand the, the greater picture. He removed micromanagement. He empowered people. There's this whole concept of the psychology of ownership that I explore in All In, in the book, um, of how when we say we want employees to act like owners, you can actually do that through the deployment of psychological ownership. And he did that in a big way.

You know, I, I, it's funny, I have a client right now who's got a couple, uh, well, I have a few clients that have more than one company. And one of them is like, look, I know you always say it starts with the leader, but I have two companies and one is really healthy and great and the other is a little— there's some toxic shit going on. And I'm like, okay, it's still your fault because you're the one who allowed that to develop in the other place and you just didn't allow it in the other. It's too soon or something like that. And so you could still be responsible for it. I said, but so tell me about it. So he describes that there's like 2 or 3 people who are really kind of a problem. I'm like, So let's figure out which one you could fire and what it's going to take to fire them without fear. And, and then just let them go. And I bet not everybody needs to get fired. I bet you don't need to let go 2 or 3. I bet that you've got at least one of those others that's just kind of acting out because something's been allowed and tolerated. And you pick the worst of them, figure out how to fire it without screwing up the company and and the others probably snap out of it.

There's 100%. It's so funny, I've experienced that. I have a membership organization of accountants and bookkeepers, um, for Profit First, and we have 600 folks in there.

Yeah.

And occasionally there's someone who'll start speaking negatively about the organization for whatever reason, um, they feel that way, right? But it can get excessive, right? And the only way to sustain that energy is by attracting people to speak the same thing. So they start recruiting others to parrot what they want to say. It's hard to be a militant when no one else wants to join the force.

No, you got to bring—

it's a recruiting platform. And you're right, removing that person is one way to do it. But the other thing is also just, um, confronting the issue. Letting it sit is never the right thing, but sometimes going to the person saying, listen, I am aware of what's happening. I know you're saying and feeling a certain way. Maybe this organization is really bad and you don't feel you're a fit, Or maybe there's something that needs to be fixed, but we gotta have that hard conversation about this. And I like to make this public with the other people once this conversation's done. Sometimes that person will change their tune. Maybe there's a, there's a, a wound that keeps getting salted on and we gotta fix that. I'm not saying it's always the case, but a hard conversation and sometimes, and sometimes as often that person needs to be released, I'd say, to pursue opportunities elsewhere and you don't wanna retain them for the long haul. The worst thing is to do nothing about it.

Yeah. Freed up their future. You know, I like to think about it. A lot of times people, they're like afraid. Well, they're a single mom or they're this or that or like— Sure. And they worry about it. I'm like, listen, every day you keep them in your company is a day that you're not only hurting your company, but you're keeping them from being awesome because they could be awesome somewhere, just not in your environment. Like, I firmly believe there's a place for everyone. And if they're not winning in your environment and never going to win in your environment, every day you keep them around, there is a day that that you keep them sucking in life. And, and sure, the transition is probably going to be hard for them. So have compassion for what's about to happen. But ultimately, it at least creates the opportunity for a better thing. Now, they could go and make the same mistake again, but they could, they could.

But maybe they will flourish elsewhere. I, I was very fortunate to have a lunch with Kip Tindall. He's the co-founder of Container Store. I originally met him through the group we're in, you know, EO and stuff.

Yeah.

Yeah. And, um, he did the, that 1A equals 3B. I'm sure you've heard of that, right? Mm-hmm. And he goes, I got a surprise for you. I go, what's that? He goes, everyone's actually an A player. And I'm like, hold on, you said 1A equals 3B. He goes, everyone's an A player. He goes, most people are an A player in waiting. They need to be matched up with the opportunity that speaks to their talents, desires, and interests. So when you have someone that is cancerous to your organization, uh, is resistant, is, is the militant. Part of it may be a, a desire to seek what really satisfies them elsewhere, and they can't, or they don't feel comfortable asking for it, so they do it by sticking out the elbows.

You know, the work you do isn't for them, the culture isn't for them, the commute is wrong, like something is off. You share, um, a great story in the book about a part-timer putting in a full-time effort, somebody really going and caring. Talk about that, the story of dedication.

Amy, there was a study that came out of England, mm-hmm, uh, about knowledge workers that was fascinating. They said the average knowledge worker produces 3.2 hours per day regardless of the hours worked. So if I work a 4-hour day or 6 or 8 or 12, I'm still producing 3.2. And the reason is, you know, we may need to recharge. We may look active, but our brain power kind of dwindles. So we hired Amy and she came on. She was specifically looking for a part-time job. There's a massive community of employment opportunity for part-timers. And, um, when she, her first day came on board and she was on board and so forth, I gave her a work schedule and said, here's what I need you to do, a list of stuff. But I gave her 8 hours of work. Forgetting that she was only working 4-hour day. And the next morning she comes in, says, got all done. And I'm like, oh, okay. She goes, what's, what's my assignment for today? So I gave her 8 hours this time intentionally for 4-hour day and she got all done. And that's when I came to this realization, it's called Parkinson's Law, that as we compress availability of time, we actually work more efficiently and we can max out around this 3 or 4-hour mark. So Amy was cranking stuff out, but I think the greater thing was not that, It was that myself and our team here was caring for Amy. She's actually the one who is fighting cancer. She's, she's defeated it. We just want to keep it defeated, right? And we cared for her during that process and we cared for her and her family, uh, when they need flexibility for her health schedule and so forth. Well, I was in one morning on a Saturday. I came in early to work, um, just to be here, disconnect from insanity that was happening at home over the holidays. And, uh, just disconnect. And all of a sudden the door opens and in comes like these soldiers carrying all these books. And I'm like, what's going on? And behind them comes Amy, the drill sergeant. It's her husband and her kids. And it was like 1,000 books or something. I'm like, what are you doing? She goes, oh, um, we had a logistical issue happen last week and we couldn't take, receive these books here. But I was thinking for us to satisfy this and that, we need to get the books. So I redirect them to my house. And I recruited my family to, to pack, ship, and move these books on her own dime, on her own time. And she doesn't manage book logistics. The person who does was out. I couldn't believe it. And what it boiled down to, I asked her, said, Amy, why do you do this? She goes, I love this company so much because you guys love me so much. And that was, that was clear then. Reciprocity.

Mm-hmm. Mm-hmm. Yeah. Care for them, they'll care for you. And, and some people just really care about what you're doing and they, it's their, that's right. And they're a right fit for the company and a right fit for that time because they'll put it in. I remember once I had to make some layoffs when the recession hit and I had to let go somebody that had worked for us for very long that I trusted a great deal among some other people. And I— and so I said, listen, I just don't have the money to keep you. And I don't know that we have the work and that kind of thing. And I'm really, really sorry. And I know this is going to be hard and I hate to do this, but I have to try to keep the company alive, and maybe there'll be something for you in the future. And, um, and I was like, in that moment, I was really clear that this could be really hard. And, and she said, I understand. Um, she said, listen, I come from a poor background and I know how to get by. It's gonna be okay. And, uh, and then she said, you're a good man. Oh.

How often do you hear that in a situation like that?

And then she came out of her chair onto her knees and she took my hands and she said, "If you need me to come in at night to work for free to help you get through this, I will." Wow. I was like— and, you know, certainly I was validated for being honest and caring, but I also was inspired by what people— like, the beauty of human beings. Like, yeah, like, you know, and there's a person that, you know, to this day I call her a friend. And I knew that at 3 in the morning, if I needed to, I could call her up and she'd come over.

You know, I just kind of parlaying the story, one of my most difficult days was with my forensics business. After that $10 million big announcement, it was only 6 months later that we hit the wall. We didn't get big jobs and things collapsed, and I had to get rid of 15 of my 30 people, half the staff, because it was that dire. And it was not their fault, it was mine. But I had to make the announcement, and I was crying the whole day. I was just sobbing as I was letting person go after person go. I followed the stories of every person let go and Everyone to the person ended up within a year in a better position in life. One person was, she was our in-house counsel, wanted to be a judge. She became a judge. Another person was always talking about sailing around the globe. She did it. Uh, another person got his dream job at a, uh, competitive forensics company, but in the role that we would've never had available.

Yeah.

What's interesting is as painful as those moments can be when they're done through integrity, Um, I think we can always sleep well with ourselves, but we can also maybe maintain that link where we can see what happens to people. And at least in my case, it was a— I was batting a thousand— not about a thousand, but every person landed in a better position, and they would never— if I kept them in my struggling company, they would have been worse off.

Yeah, yeah. You know, uh, the, the long story and short of it is that we did get through that thing and it came back stronger, and we did hire her back, and she worked for us for several more years. So that's awesome.

That's awesome.

So it did turn out well for everyone and we're still friends to this day. One of the other funny stories, I think, you know, I used to do some— I did some photography, rock photography and stuff when I was on the radio and that kind of thing. And one of the shows that I photographed was Van Halen and in the David Lee Roth days and And I took one really, like, interesting photo in that show. But the Van Halen shows have been written about and talked about, and you write about Van Halen. They get a mention in, uh, in, uh, Checklist Manifesto. And so talk about, um, talk about developing talent.

Yeah, this is not about the red M&Ms. Um, this story is about finding the best people for your team. And what I discovered is most businesses try to evaluate based on experiential talent and what they call innate talent. Experiential talent is what is demonstrated in your resume or CV. The past is indicative of the future. And, and we know that's not necessarily the case. And we know from hiring practices that looking at resumes alone ain't that good. Um, there's better tools like Predictive Index or Enneagram or Myers-Briggs. There's all these The DISC, all these things that look for innate wiring, and those are helpful. I wish more companies would do that. But there's another component, and this is what I wanted to explore, that almost no company's touching on, which is the most important. And what is this potential talent or potential ability? The right person in the right role. What would happen if we hired the person with the most potential? And if you do hire the person with the most potential, my gosh, now you're hiring rock stars alone. So of course then the question is, yeah, that's, of course that's true, but how do you do it?

Yeah.

So, um, there's a whole industry around this. It's called sports. It's over a half trillion dollars in revenue. They don't run interviews. You don't give 'em your, uh, resume. You go through camps. Uh, and what it means is you get trained on a process and then they're observing who the best participant is, who the most curious are, uh, who people that show the most desire and thirst, and then they're inviting them to become a player on the team. So everyone gets elevated. but you cherry pick the person you want. And I'm getting to, I'm almost at Van Halen now. One more story. Home Depot. Uh, next, next time you see that Home Depot is doing a birdhouse building session, I want you to know that is a recruiting platform. They're doing a workshop where you learn how to build birdhouses, but they're observing who are the people that are the most engaged, who show the most propensity. They tap you on the shoulder and say, gosh, you should work at Home Depot. It's a recruiting platform.

Mm-hmm.

We need to do the same. People express potential through workshops or camps. So back to Van Halen. What I talk about Van Halen is say you and I, we decide to start a band. Bill, you're a lead singer. You got the voice. Uh, I, I'm, I'm not so good at percussion, but enough. I can, I can handle it. But we want a rockstar guitarist that's gonna carry us. Well, it'll be very clear if Eddie Van Halen's still alive, he's our guy. But if we called him, it would be a joke. He, he's got a band, he's, he's doing okay financially, I suspect. But if we called him when he was 11 years old, he would've surely been curious. And so what we wanna do is find people when they're first start expressing their potential. Now we, how do you know Eddie's gonna be Eddie? You run a workshop. If we have a band, we can say, hey, we're running a guitar workshop. I don't play guitar. You don't play guitar. Maybe, uh, let's get in a great guitarist who's gonna teach it. Then we find all these kids who might be interested in the workshop. You have 'em pay or their parents pay, so they had to make an investment in it. Then our job is to teach and observe. And it's during that observation, we're like, oh, Eddie can't put the guitar down. He's asking tons of questions. That kid's showing desire and ultimately thirst where he can't stop doing it. That's when the Eddies are discovered. So what employers can do, and I have a whole section dedicated to this, is stop the interview process, replace that with these workshops where you're giving people experiences so they can demonstrate their level of potential by doing the work. And then you got to cherry-pick the best suited people. And the people who are not necessarily a fit for you have gained experience they can use elsewhere. Everybody wins.

You know, I, I— the resume is an interesting thing, right? It gives you something, uh, use it as the opening. But I love that you reference two things, and I think it's important when you use all of them together, right? That, um, using some kind of assessments. And I like using assessments just to discuss from a different angle, right? If we just talk about your experience, but if we talk about your interests and your behaviors and your aptitudes and things like that, I use StrengthsFinder. It's not recommended for interviewing. I still end up using it, but PI.

Yeah, I use it too.

PI is a really good, but I use it like, tell me about what that looks like and what does that mean for you and how does that affect these jobs that you've got? So I use it as a conversational tool to start to get some insight and to get past the pat answers that people have, right? But the other thing then, like the camps, is how do we create some practical tests? And I've learned with our clients and with our own companies that creating practical tests for things, experiences where we could do it. We were recruiting for a marketing VP some years ago, and we had just created an inflection. The company was taking off, and we knew it was time to level up. So, we did that. We got down to 3 finalists after getting scores and scores of resumes. And, uh, and one of them was like this super powerhouse resume, like super blue chip thing. The other one was kind of like a competent person in our industry, a typical thing you'd expect. And, and then the other one was like this wildcard young person. And, uh, we're like, ah, there's something here. There, there's— she's kind of special and got some passion. And so, and the The big shot came in and he gave his very corporate-looking thing and it was solid and professional. And we were like, wow, this guy could really take us to new levels. And but, but I ended up going, is he expecting to have a whole department?

Right, right, right, right. It was the environment he needed.

And agencies and vendors and a budget that we're never going to have. And I just didn't believe it. And then the other, the industry person just gave us like this shotgun scattershot of like everything that could be done and we had done and maybe should just do a little bit better at. And the last person did this really elegant, beautiful thing, just focused in on this one little— here's how I'd kind of do this here. And you could see the thinking and the passion and the fresh eyes on the whole thing. So we hired her and we thought— and Lori and I turned to each other and we're like, we probably only have her for a couple of years. And in fact, she helped us go through a period of doubling the company a couple of times. And then she went off and she started a company on her own, a company called GoldieBlox, which was total badass, like you know, CEO founder move. Amazing. Yeah.

So, um, yeah, it reminds me of a couple other stories that play into this. Uh, one was that I called the University of Chicago, or I interviewed the University of Chicago, the medical department specifically, the recruiting team. And what was so interesting is back in the '90s, there was an experience there that I think defines the difference between just interviewing alone versus, as you shared, kind of that package deal. They had a recruiter who was hiring people, and it was not representative of the ethnic mix in the area. The union called it out and said, there's a lot of white people being hired, and this is more of a colored community. So he said, this isn't working. The recruiting director responded and said, well, I know how to hire, and based upon my interviews, I know who's good or not, but I'm willing to try something else if, if you guys require that. They then did the workshop. Where the same people that interviewed— they had 50 people interview, then went through the workshop experience. And this was for an administrative position at a hospital. One of the things was check-in. And the check-in, the person working that station, the, uh, interview manager, if you will, emulated having cerebral palsy. Her roommate had it. She knew that fine motor skills is very difficult. Takes a good minute to take your license out of your purse or wallet, right? The people that went through station— what was interesting is one candidate was so good in interviews, very confident, strong, powerful. When she went to that workstation, she, when she was taking a long time to get the license out, rips the license out of her hand, says, just give that to me. Where other candidates were like, take your time, or may I assist you with this? They ended up hiring the people that demonstrated through the workshops the best ability, and they have been their best hires of all time. What was interesting is the people that demonstrated the confidence, the strength, in, in the interviews have a great skill at interviewing but not actually great skill on the floor. So that's why it needs to be tested. Yeah, but, but the hero of the story is that recruiting director who said, I know how to hire great people, but I'm willing to try something different and prove myself wrong.

Yeah, that's a, that's a useful thing to do. If you've got somebody who's willing to try and approach and who's open and set aside their experience, that's a great leader. Uh, before we run out of time here with the show, you've got 4 basic ideas, uh, in this book: fit, ability, safety, ownership. Let's just kind of talk through those. What are we talking about? Distinguish those for us, if you would.

Yeah, so I'll do it super quick. Fit stands for, um, how we evaluate someone and their fit into our organization. And most organizations match the title they have to the talent they're evaluating. And I find that is actually a mistake. Because titles put people in a silo. I need a receptionist or a chief marketing officer. It's actually all the tasks within there that matter. So our job is to match talent to tasks, and it causes a much more morphic type of formation of a company. Instead of that very rigid pyramid structure, command and control, now we have a web-like structure where someone who may have only been a receptionist before, who's great at, um, engaging with customers on the phone and direct them, may actually be a frontline sales manager too. Great at farming relationships. So match talent to task as opposed to talent to title. The ability component is what we already talked about. Most businesses still, believe it or not, nowadays look at experiential ability only. What you've done in the past indicates your future. Let me show you, see your resume. We need to go further. StrengthsFinder, Predictive Index, all those things. Is good. I want to go even further and go into workshops. Let people have a hands-on experience in the consideration process. Or even better, don't make a consideration in the first place. Make it a recruiting ground. We worked with a large preschool system on site directors. They ran a course on how to become a site director, managing sites. They went to their competition, said, hey, send in any of your teachers, we can teach them to be site directors. The competition sent in their employees to be trained on this process. And then this company said, hey, to the right people, you'd be a great site director. We'd love for you to consider where you're currently employed, but if they're not a fit, we have a job here. They got so many recruits that weren't on the market by doing a workshop. S stands for safety. We need to have physical safety. Even nowadays, people circumvent that. Our own company, I didn't realize we have a dark alley behind our building. When we ran an anonymous survey, Uh, about 12 of our employees said, I feel unsafe walking out of the building at night. Mm-hmm. Because it's dark. We simply installed lights in the alleyway and it made people feel safe. And now at 2 or 3 o'clock in the afternoon when the sun's starting to set, they're not worried. There's physical safety, there is financial safety. Open books brings about a sense of where the business is heading, heading financially. So we wanna have open books. We found even though, um, many businesses avoid this, When people, employees know the financial direction of the business, they feel more comfortable in their own financial welfare. So open books.

Yeah.

And the last part, O stands for ownership. There's what's called legal ownership and psychological ownership. Legal ownership does not translate into commitment. Psychological ownership does. Give you an example. I own Ford stock. I don't drive by a Ford factory and point at the building and say, I own bricks in that building. No, I simply say, I own stock. Where's my money? Mm-hmm. But, uh, my car, I have psychological ownership. It's in my driveway and, uh, I actually don't legally own it. The bank does. I'm doing my bank payments, so they own it, but I feel like I own it. Why do I feel like I own it? That's the key. Well, I have control over it. I park it where I want. I drive it when I want. It's available for me. I have the ability to personalize it. I program the radio stations. I put the bumper sticker on the back, and I have intimate knowledge. I know every function, every button, everything in that car. The more someone knows something, the more they can personalize it and make it sort their own. And the more they have authority over it, the more they feel they own it. With our employees, we need to avail that to folks. One word of a warning is if you give too much, fiefdoms will occur. They'll block other people out. But if you don't give any of it, they feel they won't own anything and are not committed.

Yeah, there's a balance there, um, within your overall company culture, um, and your company values that's really critical to find. Fasso.

Fasso.

It rhymes with lasso. Fasso, lasso, Ted Lasso.

There you go. Yeah, it's all coming together now.

Ned Flanders.

Bill. B-L. E-J.

The book, All In by Mike. allinbymike.com is the URL. There's the COVID It's on Amazon. Get it there. Um, Mike, thanks for joining us once again to talk about the book and your latest.

Always a pleasure being with you, Bill.

Shout out to the folks at Storion who get our show produced and ready every week, and the editing at Podfly Productions. My friend and mentor Vern Harnish, who created the whole Rockefeller Habits and the Scaling Up Framework that we use at the core of our business. Thanks again to everyone for watching, for listening, If we can help you out in any way, find us wherever you find us. Like, subscribe, download, turn on your notifications. Pause right here. Share it with somebody who could benefit from this as well as you could. That would help them and us. And of course, if you want to find us, ScalingCoach.com is where all of our coaching programs, that kind of thing are. Thanks again for watching, for listening. We'll talk to you again next time. Keep scaling. Thanks again for listening. I'm writing a book now called Busy Is Broken. If this episode resonated with you, you'll probably enjoy the book too. It's coming September of 2026. To follow along, go to busyisbroken.com. That's busyisbroken.com.