How to Build Managers Who Think Like Owners

Hey, everyone, it's Mike Andes and today we're talking to Joel Heck, who's an owner of Augusta Lawn Care out in Colorado. And he has two locations and one location is doing 550,000. He just put it into profit mode. And he's recently started a second location that's doing around $50,000 in annual revenue. Just getting started with about 40 customers. He does a great job, around $100,000 in revenue just on Christmas lights. But he's really trying to figure out how to manage his managers, how to be a great regional manager, and also how to give them feedback when he sees certain things that they doing that might not be exactly correct. And he doesn't want to come across as overbearing or put them off with his feedback. So this is going to be really beneficial if you have general managers or managers of any sort that report to you and you want to give them feedback. Let's go ahead and roll the tape. Lafayette's doing around 550 this year. The what's Glee? What's the other one? We have Broomfield. That one's making like 50,000 this year. Kind of brand new.

This year. First year of profit at Lafayette. Second quarter profit sharing happened. Expecting good ones in Q3 and Q4. Third year of business. So kind of right on track. Don't know how much working capital you have, but going heavy in Christmas lights. Turn 100 grand in Christmas lights. 40k. 40k in working. Fantastic. Cool. Anything else? We've already talked. I went to a shop space.

Well, actually, I had a new question as we were kind of talking here.

I think one of the biggest issues is I have. Maybe it's just this kind of season because of the baby. I wanted to be home. A fear of having to go back in the field because manager doesn't work out. We do the weekly scorecards. I've done them for over a year now.

How do you, I, I guess give negative feed or like, you know, there's issues. How do you kind of work with your manager to point them out, get them on board with fixing them, improving performance.

Like, how do you have that conversation and kind of what's the plan? The pip that you may have to do to improve performance or say we gotta do something different. Yeah.

I will say pips are like a 20% chance of working. Usually when you give someone a pip, it's kind of like the way of saying you're fired to most people. That's how they hear it. I have had some pips work and like people make A radical change, but it's very rare. So I am much more now of the opinion, like, I'm either gonna fire this person or I think sometimes pips have been helpful when someone comes out of like a life circumstance negatively impact their professional performance. And I need the pip to kind of like, hey, just FYI, you're not up to standard. Like, can you kick it back into gear?

One thing that I would really lean into is talk to a coach and be like, hey, my GM has had this problems. I'm gonna have him book a call with you. And I kinda need to go over these things. Like the indirect approach, right? That's the nice thing about Augusta is like, I've had that before too, where like, hey.

I want my GM to hear this. And so I'm gonna slide some notes to the coach and then they're hearing from someone else.

The thing that is the easiest is when it's metric based. Like, they're not hitting the number of budget hours per week. They aren't hitting growth metrics. Those are the easiest things to do. But sometimes if your base pay is high enough for a general manager, they don't really care because they're happy with 70 grand a year.

So what we've done, my locations, is when we give them on target earnings, that is actually the standard. Anything below that becomes like a derogatory market. So when I say, hey, your base is 70, you should have 105,000 based on on target earnings. If you make 103, that's like, you do not do good. Like, the locations will be improving. Like, especially in your profit mode, you're raising prices like, things are becoming more efficient. And so I would really get clear with what on target earnings are and then what on target metrics are. So like, hey, this location should be improving efficiency score. Cause we raised prices and your budget hours went up. So getting really clear about, like, what on target is, it becomes a whole nother issue when they see that they're not performing in a metric and then they don't care. That's what I'm usually gonna fire someone or I'm gonna gracefully let them go. And I've done that recently, right? It's like, hey, it's a function of, like, hey, they're not hitting it and they don't seem to really care about that. And I see that as a problem in three months from now. But they're looking at the bottom line and like, oh, it's great. And I know it's about to come. So that's when you just gracefully let someone go and the simpler you can make their position, the easier it is to backfill that.

Being managing a manager, you're not there with them every day, like they might be with a field tech. And so you're kind of hearing, you're seeing the metrics, but you're also hearing what they say. And so it seems like they're doing things that they should be doing and earnestly trying, but they're just not getting the results. It's just like, sorry, I don't know what's going on, but we're not getting the results, we still have to leave. Or like, how do you handle kind of that.

Yeah. So I try to have an upfront conversation with them, like, hey, if you don't hit these metrics on the scorecard, kind of a red, yellow, green is sometimes helpful. Say if it's not green, it's a problem. I expect you to come up with a solution and then you'll run it by me in our meeting, and then you will execute. And so if they don't see certain things as a problem, that's when the metrics can usually give, hey, this is a problem. But if they can't identify the solution, I'm gonna fire them. Cause the role of a general, of a manager, is to create solutions, not to come to you and be like, I don't know what's going wrong, like, they're the closest one to the fire. They should be able to know why efficiency's down, why close rate is down, et cetera. And if they can't, they're not a manager. We can use the numbers to identify the problem, but if they cannot identify the solution, they are not a manager. And honestly, it comes down to kind of the whole notion of, if I had five locations, I cannot be the person everyone just comes to with their problems. It's not working. I don't know why, then you're not up for this position. And that's why a lot of times I see churn in their first couple managers is because it sometimes takes a while to realize early on that this person is great in execution. They just stink at figuring out what solutions are. So, like, problems very easy identified. We're doing scorecards, they're great executing, but they never come with solutions. What do they do? They come back to me like, I don't know why we're not profitable. I don't know why the close ratios. If they can't come up with a solution, I got to let them go. Especially because when you have three, four or five locations, if you have four general managers that can only identify problems and execute, you will just become the constant errand boy of like, oh, you need to solve this. And here's how you fix the closer. They need to be able to come with solutions. Solutions. And that's like, very difficult because you can get a working gm, especially if location is really simplified, to kind of operate at a decent margin and do pretty good without coming up with a lot of solutions, because there's not a lot of problems. But as you begin to scale and you become less and less involved, there will be problems like employee HR problems, pr, like that stuff happens. Customer complaints. They'll need a couple solutions. And if they're not a solutions, like, if they can't come up with a solution and I've gotta come up with it all the time, I'm gonna fire them. Okay. And so when you look at Nick Lee and Liz in Augusta, the thing that I like, you ask them. I never tell them what to do. I never manage them. I never ask them hours. The reason is, cause they have proven to me that if there is a problem, they know the solution before I've come up with one. And then they're already executing on it. And so that's a sign of a great manager, someone that when they come to you with a problem, they have already identified a solution and either running it by you. And most time, what I then do as time gets on and they have proven me that they can find solutions is I tell them to execute before talking to me. That gives them a lot of confidence. And then the goal is that, like, you never have to be there because they can go through that process without your input.

Hard to find general managers like that. That's why it takes a few times to find a good general manager. Cause it's so easy to find someone who does good in the field. Like, oh, they can execute great. But if they can't identify a problem and then figure out the solution on their own, you're just the constant, like, jumping in person or the person that you're like, what are they not gonna see this? Did you not see that they're sitting there for 20 minutes before. And that's very aggravated. And whenever I've felt that way, that general manager usually doesn't end up lasting. And it usually shows up in the numbers, like, a few months later. A lot of the concepts that I'm talking about with Joel and the owners at Augusta are all contained inside of this book I just released. It copy paste millionaire home service, blueprint to make $3 million with multiple locations like Joel is doing or growing one location with mid level managers. Go check it out, we'll see you there.

After two and a half years of being operation I find hiring and training just be difficult and it kind of goes back to our conversation earlier about white collar versus blue collar. Whereas for me in my experience.

Kind of self taught online training, kind of repeatable, things like that make sense to me and I tried to implement that into my business. I don't think it's worked out that great. It seems like and I hear from other companies that kind of the hands on training, the face to face, the show review, tell show review kind of process is the way to go.

How do I like make that a repeatable process for my managers? Like teach my managers to teach people to do that and like especially.

Kind.

Of more abstract things like team policies and kind of things that you should be looking out for as opposed to just like here's how you mow, how do you make that more make that repeatable and make sure that actually gets done. Especially when a manager is like their hair's on fire because we're overworked, understaffed and there's problems going on.

That part is the hard part because if everything's going well, that's when it's like okay, great, we're going to have day one and day two. They learn these things. We have a trainer that signs off of them, the trainer is incentivized and the second paycheck of the trainee based on if they hit above base pay. Like that's when everything's going well. That's not how the real world works. The real world works, you got four new hires because you're in the middle of spring rush and you need tons of budget hours done. You just need hands on job. And so that is the challenging part. I think that's why I don't recommend putting a general manager in a location until it's in profit mode. And actually profit mode which is like we are raising prices only we are not getting more customers because there's less likelihood of hair on fire. The only hair on fire situation happens is if they miscalculate the demand for spring rush and they have like two or three people leave at the same time, which can still happen. But I much more tend to think this is a feature, not a bug of the industry. And to counteract it, I simply build the business in a way that when I hand it off to a general manager, they don't have to worry about it. Because the hardest part about spring rush is when you're growing. Because if you grow by 50% compared to last spring rush, that's another truck. Two or three more employees, way more difficult to manage versus just being like it's the same as last year in terms of trucks and employees. We're just raising prices to increase our increase revenue. And so that's why I'm a huge fan of getting it there first, actually having a year of it being in that profit mode and then handing it off. So I think like next year it'll be a lot easier for your Lafayette location, not because the general manager been longer, simply due to the fact that like it's actually going to be in profit mode compared to the year prior. Right. So if you did 550 this year, it's probably 650 or 7 next year. That's easier than making realistically a 50 or 60% jump this past year. Right. So I always think of it like it's a feature, not a bug. And I'm going to just make sure I build the business in a way that when I hand it off to gm, the likelihood of the hair on fire thing happens less frequently. I also like to reduce the budget hour capacity of my team. So if you can get them like right now, if you're say scheduling for 30 budget hours, bringing that down to 28 or 27 dramatically decreases the chance of hair on fire. So when my locations get into profit mode before I hand it off, I just ask all the GMs, I'm like, I want you to run everything at 27 to 28 budget hours per week or even less like 25. The reason is because there will be one or two people that will call out. That always happens. And also if one or two people leave, I'll still be able to make it. So I'm much more like, and I know I'm leaving some margin on the table. I'm probably leaving 2% margin, so like an extra 15, 20 grand of payroll a year by them being a little overstaffed. And some people will leave because they're only getting 35 hours in a week. But my objective is that we never have hair on fire. Like I want my GMs to be able to go on a one day vacation at least during the middle of spring rush. To do that though, they have to have everyone under capacity and over hire. And I'm okay with giving some margin up by them training people earlier in like February. So that way when they go into March, April, May, June, that there is less hair on fire.

The hair on fire part aside, like, how can I train GMs to be trainers or train them to train a trainer to be a trainer? That's the part that I kind of.

Because one, I'm not there, so I can't. Or maybe as a problem is, I should be there when they're training someone so I can give feedback as they're giving feedback, or if I'm not there, kind of, how do I make sure that they're doing a quote, unquote, good job with that?

Yeah. Like, I think.

One way that's really helpful is to do interviews of new employees after their training and ask them how to improve it. So we do this now with all owners that come through Augusta after their training at Augusta is like, hey, like, why did you not get P4P? Now we made basically all that feedback into the six weeks afterwards those calls. I would do the same thing with new employees. So the trainer ranks the trainee and the trainee ranks the trainer. Okay. And then like, what are the gaps? What do you not know? What do you not feel comfortable? I don't. I do not feel good with the riding mower. Okay, great. We know we need to improve that part in training. So I would survey them and then also have them rank your trainer. Because if you get three new employees for a new gm, for example, and they all rank the gm, or like, survey them as poor trainer. Like, they never told me what to do. They just like, threw me out there. And like, we got all sorts of yellow slips. That's a huge red flag to me as an owner. Right. So I would create an automation inside copilot based upon their start date. I would do like a six week, like a four week, six week, eight week on, like, hey, you could change how I feel. Like, Google forms are great and just be like, hey, based upon so far at Augusta, what's your experience with training? What about your general manager direct report, and that's coming straight to you.