Is Avoiding Conflict KILLING Your Business?

Ladies and gentlemen, boys and girls, welcome to the Home Service Millionaire podcast. My name is Mike Andes. I'm the founder of Augusta Lawn Care. And today the producers created five questions for us. And our topic today is, you're avoiding conflict and it's killing your culture. I have not seen the questions. If you'd ever like to submit your question of your own via video, go to mikeannies.com? without any further delay, let's jump right into the docket number one. How many good people have you lost because you refused to confront one bad one? Yeah, this is, this is something I've always thought about. And it is the, the least promoting thing and the most damaging thing you can do to a grade A talent, the best people, is to make them work with B and C players. And so even with pay for performance for your technicians, I believe that by creating a meritocracy, you weed out the lowest performers and you allow the highest performers to make more money. But you also create a work environment for higher performers to feel comfortable because they don't want to work with someone that sleeps in the truck. They don't want to work with someone that drags their feet all day long and is complaining and is lazy and is stopping 5,000 times at gas stations and smoke breaks. They don't, they don't want to work with them. And so as much as P4P is very much around compensation, it's also a matter of self cleansing for the culture of the organization. And so whenever we. I have yet to fire someone and feel bad about it. I don't think I've ever fired someone. Like, man, we shouldn't have done that a week or two later. Me, like within 24 hours. Like, oh man, it hurt. That was painful. I didn't like that. I never have liked hiring people, firing people, ever. I always was way too slow at firing people. And, and so operations managers now in every department do the firing and hiring because I do not like firing people. I, I hold on people way too long. And so it's not enjoyable and it's painful. And even when they fire people, I'm like, I don't know. And within a matter of a couple days or weeks, it's like, that was the right decision and I have yet to fire someone and feel bad about it a couple weeks later. And so when I say feel bad about it, I'm like, the overall organization, the team is in a better place because of that firing. And it has every single time unequivocally been positive. Weeks later. Now not days. Sometimes there's a little bit of kerfuffle or people's feelings get hurt, or people that knew them or friends with them. But for every single hire or fire that's ever happened, getting rid of a B or C player or someone that's sapping the energy from the company, and maybe not performance wise as bad, but just from a cultural perspective is draining the team. My goodness. All of a sudden you hear the stories of what they were doing and the things that they were saying behind your back and about the company, about other teammates, their level of performance. All of a sudden you start digging in their role and realizing there was no systems, they were doing a lousy job, things were falling through the cracks all the time. And so you gotta get rid of these people as fast as possible. And creating systems and ensuring that people follow the systems gives you the confidence to cut out. Poor performers, low performers, bad cultural fits very quickly because now the company doesn't, doesn't hurt financially. The reason a lot of us will hold on to low performers or people that we know are not good for the culture is because we know that financially the business needs them to stay afloat or just make ends meet. And so, well, that's in the short term. In the long term, you got to realize that that person is potentially the one that is causing you from actually being profitable and financially moving forward because they are pushing away top performers. And so I have seen it where a bad general manager keeps three or four really good technicians that would otherwise have stayed with the company. They leave, they jump ship, and all of a sudden that location loses huge amounts of profit. Their best performers are leaving or they don't attract good talent like a great general manager. A great manager of any department should attract great talent. The hallmark of a great leader is they are able to get great followers to follow them. And so.

I can generally judge the weight of an entrepreneur or a leader or a manager based upon if I just look at their team. And this is why managers and coaches in professional sports are the first person to get nixed when the team is underperforming. Because a great manager, a great leader, a great coach on a team is able to attract a great team of individuals, individual contributors, technicians, people underneath them to work and get things done. And the amount of leverage on the leader being changed out can dramatically affect the results. And so you, you holding onto someone that is preventing good people from working for you is costing you way more than you think. And it doesn't show up on a P and L It's very hard to be like, yes, Sally, you know, she cost us $60,000 last year, but she cost us $933,000 in lost productivity. Cause the rest of the team is talking behind her back, backstabbing her, trying to put the organization down because she's not a good manager. Like, that's hard to quantify. You're not able to do that. But if you release. Let them go into the. Into the world, you release them. If you go do other things and be successful in some other business, they might be more successful. Like, nothing against the person. It's just like, if they're not a good fit for you and your organization and they're not considered a top performer by the cultural definitions you've set out for your team, let them go as quickly as possible to go find the thing that they might actually be successful in. And a different code of ethics or a different code of the organization that allows them to succeed. So, like, let them go as quickly as possible. And therefore, don't discourage the people that are in the organization that have, have signed up for and are hired to abide by the rules you've set out. And they just want that to be enforced. And so as the leader, the hardest part about leadership is enforcing the rules that we've all agreed to. No one likes to be pulled over. Like, I don't care how pro law enforcement you are, no one likes a speeding ticket. All right? So as much as you like, I like having organization, the team and systems and procedures. No one likes to be called out. No one likes to be said, hey, this has got to change. No one likes that. So we all avoid it. But if we just let everyone speed down the road and blow through red lights and just go as fast as they want, we have chaos. And so the same thing is true in your organization. And if you don't hand out the speeding tickets, if you don't call people out, if you don't fire or release them, give performance improvement plans, all of a sudden, you fast forward very quickly, three, six months later, and that organization can be in a state of total chaos. It's not comfortable. But you've got to hand out speeding tickets. You gotta abide by the rules that you set out. And that might mean giving disciplinary action to people that you think are high performers or are actual amazing team members. But you still gotta have disciplinary action to keep the rules enforced. And again, they can be great team members the same way that great citizens still don't like speeding tickets. But we gotta give Them speeding tickets to make sure the rules for everyone are the same. Number two, when a manager underperforms, do you coach them, replace them, or just lower your expectations to avoid being the bad guy? So I think the hardest part here is understanding if your expectations are reasonable. That's the hardest part because it's very difficult to measure that against other people. This is why having a community is helpful, because you can kind of get to know what other people's expectations are and are like, am I expectations so high? I'm simply going to burn everyone out. And I had to realize back in the day, like I had way weird expectations because I expected everyone to work seven days a week and I can expect that of myself all day long. But expecting of your, of your managers to burn everyone out and what you, what I was losing was the tenor of individuals that wanted to keep at that frenetic pace for so long. And so I had to lower my expectations that people are not going to work seven days a week for 12 to 14 hours a day. They're just not going to. And if you want that as someone, they might do it for a short time, short term, but it's unlikely that a mid level manager is going to do that for years and years and years. And so adjusting my expectations and taking ownership first is what I would say. Then it just becomes a matter of are you actually just avoiding the fact that you know they aren't a good role, that they are underperformer or that you don't have the time to coach them? So we have underperformer. We have, should I coach them or should I replace them? And in each of those situations, like a lot of times if they're underperforming, a lot of us just like kind of navigate around it and we kind of like fill in their weak spots, hope they kind of do a decent job, hope they kind of improve over the long term? The second part, do we coach them? A lot of us are so busy doing other things, we don't actually give them the correct coaching that allows them to be successful in their role. And so again, I'm trying to take extreme ownership when anyone else is underperforming. Because before I start firing or giving any sort of disciplinary action is like, did I not coach them correctly? Did I not onboard them correctly? Did I not give them the correct expectations? Did I not give them the right systems? Did I not give them the right metrics? Did I not figure out a way to make sure that their incentives were aligned with the businesses I'll try to figure out all that stuff before I start jumping to conclusions. Like I should replace them and so be very careful. And this is like, again, remember, I am the person that usually fires too slow, but I usually try like all aspects of trying to take ownership of the problem and solving myself before I'm like, okay, you're not a good fit. The thing is, usually I have been probably looked at as being very decisive when it comes to firing. Mostly because I have tried every other avenue of like, can I change their compensation plan? Can I give them different benefits? Can I change their work schedule? Can I change who they report to? Can I change their metrics and their dashboard? Can I change it? I have looked through everything possible and if I can't take ownership of any of those things, I have to just simply state the fact, okay, maybe if I'm gonna take ownership of this, I am trying to avoid the fact that this person is not a good fit. And so then you gotta fire em, gotta let them go, you gotta release them into the wild.

So lowering your expectations is a real thing though, especially if you work so much and if you're, you have strengths in certain areas, like if you're so good at sales, you, you might have too high of expectations that someone that you've trained for one week is going to step in and suddenly be able to do the sales the way you have. And so I would always try to replace high expectations with great systems. So if you have high expectations and you're so good at something, you have high skill, you're going to have to create more systems, more playbooks, and create more infrastructure if you're ever going to think someone else is going to get to even 80% of what you do. So I would lean heavily on that. Number three, are you protecting morale or just avoiding discomfort while your best players quietly disengage? Yeah, this goes back to the fact that the most demoralizing thing for an A player is when they have to constantly be dealing with a bunch of B players and C players. This is why I've been very careful in team meetings to address the whole over issues that two or three people are constantly doing. So if you have a team of 10 and a whole bunch of technicians and two or three of them are constantly doing this, I am not going to beat a dead horse in front of the entire team because the other seven people eventually start to be like, this is annoying. Like, why don't we just get rid of these people? And so if you're saying the same thing all the time in your team meetings, safety, this, don't forget to clock out, don't forget to do this. And it's the same two or three people, you got to let them go to allow the other people who are otherwise just frustrated, frustrated, especially if they're on P4P because they're standing around at a meeting hearing about things that don't not relate to them, that they've already solved, that they've done the hard work to make sure that they are not doing it. And all of a sudden now they're stuck in this meeting listening to you basically to say the same thing to the low performers and in their mind like, get rid of this guy. And so time and time again when you I have gotten rid of low performers, the higher performers perform better, they make more money on P4P. Same thing with management, by the way, they make the business becomes more profitable, they start to make more money and they make up for the lack of extra firepower and manpower that we had when we had low performers. And so protecting morale is. It's quite the opposite. The only people you're protecting is your low performers when you're worried about letting go of your lowest performers. So think about like this. If you're going to classify like your lowest performers, your average performers and then your great talent if someone needs to get fired and, and you're worried about average talent getting discouraged. Like you gotta back up and realize that your top performers probably do two to three times as much work. Two to three times more efficiency and productivity and profit for the business compared to an average person. And they're probably two or three times better than someone who's an underperformer. And so stop thinking in terms of like, oh, like so and so is 10% or 20% better? No. Your best technicians produce two to three times more profit for the business than a low performer. And especially if you're not on P4P, your best managers can produce two to three times more profit for the business than a low performing or average general manager. I went to business school for two years to get my mba, my master's in Business administration. I've compiled all that information into over a hundred videos that are useful for small business owners. You can find it MBA for entrepreneurs dot com. It's completely free. And it takes those two years of business school and smashes it down an online course completely free. And so instead of thinking in terms of oh man, if we cut them, we're going to lose 10% of the workforce. No. When we cut Them we're going to release 20 to 30% of our workforce to go double productivity, because now the standard is enforced. We all understand what the standard is because they got someone else got fired over it. And now we can all actually build our careers on top of the standards that are actually being enforced. The reason that we can have the police give everyone ticket is because it states on the side of the road how fast you should be going. There's a standard that we've all agreed to, and unless it's enforced, it's just a suggestion. And so I've always said, until you fire someone, it's not a standard, it's a suggestion. And so if you're going to have this ideology on protecting morale, that's the equivalent. Like, I will let Bobby go 70 miles an hour because I love him, even though it says 50 miles per hour is the speed limit. Eventually little Bobby gets hurt, and eventually someone else in the organization gets hurt. And you're responsible because you weren't the person that just pulled the trigger and actually pulled them over, gave them a ticket or fired them. And so having disciplinary action is never fun. You think you're protecting morale. And in the short term, Bobby's happy because he gets away speeding down the road. But in the long term, if Bobby crashes his car into Joe, Joe is kind of able to point fingers at you and be like, you should have let that person go. You should have disciplined them. You have said that the speed limit was 50. You have said that we can't show up to work late. You have said we need to have a uniform. Why aren't we upholding those standards? And now other people in the organization get hurt in the form of them leaving them being discouraged. And morale does get hurt when you stop enforcing the standards that are posted all over your workplace. Number four, have you built a team that can handle truth? Or one that forces you to sugarcoat everything to keep the peace? Okay, so I generally am a pretty blunt person. I'll just say it the way it is, but it doesn't come naturally. I like to sugarcoat things, and I think it's different. There's a fine line between being blunt and being irresponsible to hurt people's feelings. And so I do not want to hurt people's feelings. I don't think that's good for the team. I don't think that's good for culture. But I want to make sure that when people leave, they know exactly what I mean. And so sometimes that means being taken as blunt and so if I'm ever thinking I need to keep the peace, I want to make sure that the standard is very clear. And so a lot of times, again, if we think about the traffic example, the reason that people feel like they need to sugarcoat things is because this speed limit sign is not clearly displayed. And so, like, they're speeding. It's like, well, they haven't seen a speed limit sign in, like, 20 miles. Okay, can I take ownership of the fact that no one actually knows what the standard is? So I truly believe, instead of trying to think about sugarcoating versus keeping the peace, it's like, am I clearly making the vision present to the team? Like, do they know what the standard is? Do they know the vision of the company is? Do they know what the goal, the mission? If that's not clear, I can't hold them responsible. And therefore, I as like, the cop trying to enforce the standard is like, well, do you see that speed limit sign, like, 20 miles back? This is the equivalent of like, oh, like, yeah, it's in your employee handbook. That was, like, a year ago. And so if you're not making the standard very, very clear, it'll force you to have to sugarcoat things. It'll force you to have to be blunt and hurt people's feelings if you don't. Just make it very clear what the standard is and then make it very clear to. If you don't do this, these are ramifications. You get fired, you get laid off, you get. You get demoted, you get a pay cut, you get money taken off your bonus, whatever it is, make it very clear. Because then when things happen, you don't have to sugarcoat anything. It was very clear. And people were reminded constantly of what the standard was. And this is why, as you grow an organization, I found this recently, is like, you come, you feel like somewhat of a broken record. Once you pass, like, 5 million in revenue, even 10, I'd say even 20, you start to become very much like, oh, I just say the same stuff all the time. Like, I feel like a broken record. What are you doing? You're stating the standards of the business. You're stating the vision of the business. And those are the speed markers by which everyone underneath you is able to determine, how fast can I go? Where do I need to turn, what lane do I stay in? When do I wait, when do I go? These are traffic lights, et cetera. This analogy, that's what the vision, the mission, the standards of the business. As the founder, that's what you start preaching that's like, you just keep seeing the same stuff all the time. Because what you're trying to do is make it very clear what the standards of the organization are, thereby allowing your managers to fire and hire and do disciplinary action based upon very clear standards. So like, think about the legislation and like the sheriff getting together and like we're gonna make the speed limits great. You gotta make those very clear and post them all over the county. So then our sheriffs and our mid level managers can go out and actually hand out tickets. They can hand out disciplinary action. The lines are painted. Like if the lines aren't painted and someone's crossing it, you can't give them a ticket. But if it's painted, it's very clearly stated that you can't cross this double line, then we can hand out tickets for it. And so I would first, when it comes to, am I doing a sugarcake? Do I need to keep the pieces? Like, have I made it very clear? And if you have, there's really no sugarcoating or peacekeeping that's required because everyone knows what happens when someone crosses the line. Number five, does your team respect you because you're fair or you fear you because you finally explode after months of silence?

This is a good one. Okay, so I actually think. Okay, let me give a balance here because what this question implies is that exploding to your team is a bad thing. I agree with that sentiment. Exploding usually does not get the benefit or the desired outcome. However, shutting up and letting things play out has served me well and I'm not very good at it. And that is sometimes you will need to let things go on and allow for a manager to learn a complex uncharted territory without you jumping in and solving everything for them. Because if you do solve everything for them right from the rip, you become dependency and you become the bottleneck. If you let them forge ahead, make some mistakes, and then come back to you and ask for advice or say like, hey, I messed up for X, Y and Z reasons. What can I do to improve that? Advice will be so much, well, better received compared to you just telling them what to do and then feeling like an errand boy or errand girl just doing exactly. He's like, here's my checklist. If your mid level managers are simply just taking out job notes, they're gonna feel completely unempowered, like they have a dead end job that they just carry out tasks for you. And so in my opinion, I will allow them to go for periods of time where I don't say Anything. I just won't blow up over it. I'm gonna wait for them to come back to me, and then I will give them very clear advice. And sometimes it can come across blunt or harsh, I would say, even at times. But I don't ever explode. I think the exploding part is something that you probably need to think more inwardly about. Like, what are the triggers? Me, personally, why am I exploding? Instead of being like, why can't I just analyze this, this. This decision that was made or this behavior that took place, I'm unhappy about it. I'm mad. Here's why. Here's the problem. I will attack the problem, not the person. So explosion always a bad thing. Any explosion of emotion is probably 99% of a bad thing. As a leader, the reason I say, because there are 1% of people that respond very well to when you explode occasionally. I've had it before where I have never treated someone in that regard, and they went. They went so far without asking for advice. And, like, eventually I had to just, like, kind of explode. And they probably were, like, so shocked by that behavior that it was like, okay, we're back on track. I never want to do that. I never, ever want to do that. That's the last resort. You never want to get there. I want someone to figure things out on their own. I want them to see their weaknesses and come to me and ask for advice. And then showing that emotion can be helpful for them to show how much you care about the department, care about them, care about their team. But you do not use emotion frivolously. As a leader, in my opinion, one man's opinion, you can take it or leave it, but showing too much emotion and getting all riled up over little things in the business is like emptying your cham for the one time. You do need to get a point across or you do need to show emotion, they don't believe you because you don't got any ammo. Like, you've been blowing up over the fact that the tagging's not done correctly. You've been blowing up over the fact that they don't answer the phone correctly. You've been blowing up over the fact that they're not putting the string trimmer line incorrectly. You've been blowing up over everything. And so you have no ammo. When you really want to get a point across to drive the point home because you've been emptying your chamber and all these little things. So what do you do? I recommend when you see all the little things, you create A system for it. And then you incentivize and make sure that you do everything in your power as the owner to align their incentives with yours so that those little things get ironed out or that they get feedback or you address it in a one on one in a few weeks from now. I'm not going to blow up over in the immediacy so that when the time comes I need to show emotion. And I'm talking like you use this maybe once a year and like you very careful with this like explode. The explode is a harsh term. I will, I will reduce that to showing high levels of emotion. And again I am showing the motion towards the problem and not the person. And I would say does your team respect you because you're fair? I think, I don't think that being fair is necessarily something that people that I want to be around put on a pedestal. I don't think being fair like being fair is a fundamental table stakes for being a decent leader. And that is if, if someone's speeding, I'm giving you a ticket. Regardless of who you are, regardless of how you know me, how long you been with the business, like that's against the law. That's fairness. And having clear standards is important. But I don't think someone acting out of fear is ever going to serve me or the organization or the people that they lead if they're a mid level manager in a good way. Someone operating out of fear in the short term will take action very quickly. And what we can get rewarded as entrepreneurs is when you do blow up, you get immediate feedback, you get immediate action. If you blow up about the phones being answered incorrectly, guess what your office does tomorrow? They answer the phone correctly. Fantastic. And so what we start to do is start to blow up over a bunch of little things thinking that that's how we solve problems. Because we have been reinforced and rewarded for that in the past. And when we blew up, we saw something good happen. And when we got mad at the team about the spool and the wire and the trimmers, all of a sudden they started doing it correctly. And so we start deploying that energy towards every little thing in the business, not realizing that they are simply reacting to your explosions. And now you are emptying your chamber on little bunny rabbits instead of the massive bear. Like if you take a massive shotgun and start shooting every little thing that moves in the forest. These are the little problems in the business, little minor mistakes that you could easily solve with, with systems and a little bit of time and think about incentives Instead, we deploy all of our ammo and that instead of the bear that comes out once in a blue moon that we actually need to deploy that leadership capital towards, and we don't have it. And so if you've been spending the leadership capital and all these other things by blowing up over these small things, you cannot deploy it once in a blue moon when you need to, to show how much you care for the team, for the customer, for the business. You don't have any ammo to actually deploy towards it. And I have learned this the hard way. So I hope it is helpful for you. And I hope that when you have that emotional response that you want to explode. Instead of doing that, figure out, how can I create a system, how can I create an incentive? How do I make sure that I don't have to address this again and I don't deploy a huge amount of emotional energy towards this to solve the problem, because that emotion, it won't solve it down the road. It is a band aid. It is a band aid. You're slapping band aids on every little problem in the business and eventually you just become this professional band aid. Instead of like, let's address the root cause of the problem and do surgery. And that means a system, a procedure, a standard operating procedure. It means having a meeting and making sure there's incentives that are aligned around that problem. And then you'll have ammo. You have relationship capital, you have leadership capital to deploy against the big, hairy, audacious goals you have that occasionally walk into a business. And I'm talking every six to 12 months. All right, I hope that was helpful. I'm Mike Andes. This is the Home Service Millionaire podcast. Go to mikeandys.com? submit a 60 second video of your question. We'll answer it on the next podcast.