Why You Can’t Keep Good Managers (And What They’re Not Telling You)

Today on the Home Service Millionaire podcast, we're talking about why you can't keep good managers and what they're not telling you on their way out the door. We're going to talk about leadership for the business owner in the home service industry that's making over a million dollars in revenue and starting to have general managers, operations managers, office managers. And dealing with these mid level managers is a new skill you might be learning. So hopefully this is helpful. Let's go ahead and jump into the docket. First, from the producer, we got a question. Are you promoting your best technician because they can lead people or because they've just been around the longest and you feel like you owe them the next step? This is very common and this is why a lot of times tenor doesn't really play well into who gets the next spot on the team as the business grows. So now with my locations, it's very, very clear, the hierarchy, you have technicians and you have one general manager at the top. And that business can do about $1 million, maybe $1.1 million with that structure and command center doing admin. Now in the past, when we start going to 1.5, 1.7, 1.8 million in revenue at that same location, I was having a full time estimator, I was having people in the office, a few people in the office during spring rush. And so it started to become difficult when I would want to promote someone because I knew they had the skill of sales, the gift of gab, the gift of communication, talking with customers. They were confident in their skills, I wanted to put them in sales, but someone else had been around longer and kind of felt like they were entitled to that position. And so what I would do in this scenario is make it very clear what specifications are required for every role. And those are like the hard skills, for example, years of experience, certain certifications that might be required. And then I would also make it where everyone can interview for the position. So it's like, hey, look, we got a sales position coming up or we got an operations manager coming up. We're going to be putting this up on. Indeed, we're going to be putting this out for job posting, but if you'd like to apply, you can. And then they have to reapply to the job instead of it feeling like it's entitled that, hey, I've been here the longest since we're growing, I should be the operations manager because just because someone's been around a long time, that means that you could be taking your best technician and making Them a horrible manager. Not all great technicians make good general managers or operations managers or office managers or sales managers. Like you have to think about the fact that they applied to be a technician. That was their role when they started. That's what they applied to be doing every single day. And so if you just change their role, you very likely are putting them in a scenario where they're actually not good at those skills. Because a great technician that works hard is super efficient, great with morale, builder for their team, takes control of the project, communicates with the customer, could be a horrible communicator when it comes to interpersonal communication, talking to other people on the team, one on ones disciplinary actions, accounting for pay for performance, keeping track of track the numbers and all the things that are required for a manager to be successful. And so I actually think that a lot of times technicians think, oh, cause this new position is a management position or I'm gonna make more money, Therefore it's what I should be having cause I've been here the longest. The way around this is to have clear steps of what is required from a hard skills perspective. Again, certifications, years of experience, certain things that they have to do do in terms of services in the business and then they have to apply for the position once it becomes available. Again, you're going to have this same exact interview process that you would have for someone outside the organization as someone that is from inside the organization. That way it has nothing to do with title, it has nothing to do with how long you've been around. It's like, look, if this position comes available as we grow, you can apply for the position. This is the simplest way to keep it. And what you have to play with also is the fact that you're going to have some people still feel entitled to that position, go through the interview process, you decline them and then they might leave. And this is a challenge with all growing organizations as new roles are built, you want to make sure that you make it very clear to your team that we are going to hire the best candidate for the role. It's not based upon long who's been here and who's been around the longest. And I like to say on my team, like, look, I would love to hire from within, but in order to be able to move you up inside the organization, you need these skills. And in order to get these skills, you need to do these things like listen to this audiobook, listen to this program, go to this course, go to this conference, you have to do these things on your own time. If you think that you're going to be able to interview and get hired for this new role, that will open up in the future. And so if you have certain audio books or podcasts or materials, they can gain skills that would set them up for the next stage of their career. I would recommend giving that to them. And don't make it like, hey, watch these things and you will have this position. It's watch these things so that when that position opens up, you, you would have the skills necessary to interview and be hired for that role. So number two on the docket, do your middle managers actually want higher pay or are they quietly begging for less chaos, fewer last minute pivots and a clear lane of responsibility? So any organization has mid level managers is starting to get of size where it's like comparing a little.

Motorboat. It can change directions very quickly. You know, if you have one of those things in the back where you guide it with your hand, you can just jam that thing over to the left and all of a sudden the boat just immediately reacts. Whereas if you have like a cruise liner, it could take a solid few minutes to turn that thing around. And so the bigger the business, the slower it usually is to change course. And a lot of times this is grouped in with, oh, it's bureaucratic, it's slow moving, can't get anything done in the company. When reality is simply just a matter of there's so many people on the and so many stakeholders that changes that are dramatic do take more time. Now the positive thing about this, and you're like, well then that means that's why every business fails. No, big businesses make a lot more money than small businesses. The reason why, because sometimes making less decisions, having less initiatives, changing services, changing your systems less often is many times very, very good for profitability. Because every time you make a change, Alex Hormozy has talked about this, often expect like a 20% decrease in efficiency and then over the course of a few months, let's just say it's a really good change down the road, you might reap the rewards of that 10 or 15% bump in efficiency. But if it's only going to incrementally move things like 1 or 2%, it's probably better you just leave people as is. Let this cruise ship just keep gaining steam straight forward. And so I think that by having mid level managers, yes, it can seem like I can't navigate, I can't pivot as quickly, I can't come into the office one day like we're Rolling out this new initiative, we're rolling out this new service, we're doing this new upsell thing. If you do that consistently, you will make mid level managers leave your business. And they won't tell you, they won't say, that's why, they'll just say something along like the scapegoat is the classic because of pay, you know, they have better opportunity come along. And if you're wondering why are they leaving for another location or another business that's offering them like a very marginal more amount of money or less money, it's because of the manager, it's because of you. And I don't say that in terms of pointing fingers. I have had great general managers that I have lost or management in general, and I've lost them simply due to the fact that I stink as a leader. And so the liberating thing about that is if you take ownership of the fact that they're leaving because of you, it means that they can stay if you change. And so one of the biggest things you have to remember that is a manager as an employee is not trying to go start their own business. They might be entrepreneurial, but they're still an employee and they've made the decision to get a paycheck and thereby they tend to have less risk than an entrepreneur that's going to risk everything and take out their, you know, cash out their 401k and take debt on and go start a business, make no money for the first 1, 2, 3 years. They're less risk aver, the risk prone. And so you have to ask yourself, are they the type of person that every day want to be navigating and changing and making big changes in the business? And we're changing our Facebook ad strategy this, and now we're doing email and now we're going to post on social media like this and now we're doing Instagram. It's like, look, do one thing really well and get great people to do that thing and let them run a lot longer before you make changes to the way in the direction that they're going. Because so often the time, the entrepreneurial bug that you love, that you love starting new things is the very thing scaring away mid level managers that do not seek out starting, they seek out the, the dependability, the reliability of their paycheck. They seek out constant improvement. They seek out tweaking and modifying and adjusting by 1%, 2%, 3%. And as an entrepreneur you're like, we're changing this mass, 20% change 50% change, we're changing the business model. You will freak out mid level managers. And furthermore, if they do not have the skill to navigate the entire company that fast and that to such a massive degree, everything will fall back on you as the entrepreneur because you will have that skill, you will have the ability to make up the meeting, create the training real quick overnight. And you're like, let's just get this done. And I'm speaking to the choir here. But the mid level manager wants things more refined. They want to really think through things, they want to test it, they want it to be rolled out slowly. And to you that seems limiting. That seems like we're going so slow. But that is first off the thing that leads to better execution and a higher batting average versus just swing, swing, swing, swing, yes, home run, swing, swing, swing, swing, swing, home run. I'd rather be like single, double, single, bunt, steal. And that second measure is what a mid level manager is really good at. That constant tweak, change, modify the process and eventually done over the course of time. Very valuable business. The constant swinging for the fences that entrepreneurs love and I'll put myself in that camp and starting new things all the time will absolutely discourage someone that does not like that constant change. And I say, I don't mean constant improvements, I mean constant changes like dramatic and radical changes to the business model. The way that we get leads, the way that we follow up, the way that we communicate the software that we're using, new ad strategies. If you're just constantly throwing this at mid level managers, they will leave. Because most mid level managers, if they could do that, would just go start their own business. If they had that risk tolerance, if they love that huge amount of variability in their day and from week to week things changes and modifying and adjusting, they'd probably go start their own business. Now you can be an entrepreneur inside of a company and you can make changes very quickly and still have the reliability and dependability of a paycheck and without the downside risk of going into debt and all years of not having a paycheck. And so to be able to keep those people, you allow them to make changes inside the organization without your supervision, without you jumping in all the time. And okay, you got to run everything by me. So you keep an entrepreneur and a mid level manager position by letting them run without getting in the way of going from them, identifying the problem, seeing a solution and executing, let them keep running that path. That's what an entrepreneurial person inside of an organization can do. An intrapreneur or someone that more importantly is much more common when it comes to mid level managers is someone that does not like radical change. They want a system, they want a playbook and they want modifications that they are able to make and adjustments to make the process more efficient. And I would highly recommend entrepreneurs before you get mid level managers, get the playbook to 90%, not 100%, it'll never be there. But get it to 90% so that when you hand it off to someone that is much more systems oriented and likes the tweaks, they can do their magic without you constantly like, oh, we're gonna change the services, oh, we're changing the business model, we're changing the truck setup, we're changing the type of equipment, like just stop, just slow down. That's what they want to tell you. But they will leave and they will get discouraged because they will see you as this kind of fire brand, walk in and throw dynamite. Every time you walk into a meeting, you control the whole thing. You never listen. You just use my idea and we're doing it tomorrow and it's basically half rolled out. I already told the team and now I'm telling you as a manager, you're just taking all of the ammunition out of their guns that your managers have and taking all of the accountability back on you. And you'll never be able to systematize, you'll never be able to delegate and they'll never feel in control enough to want to stay inside the organization. So the only people that you will attract is B and C players that you just keep telling them what to do. And those go along with your shenanigans of constantly making rapid changes versus being able to retain a players that are so good at refining 1%, 2%, 3% little changes throughout the year. And all of a sudden by the end of a year or two goes by, they have made 20, 30% incremental changes without you jumping in every week with a 50% change. 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 100 videos that are use for small business owners. You can find it mba for entrepreneurs.com it's completely free and it takes those two years of business school and smashes it down an online course completely free. Third thing on the docket for today, we're talking about again why you can't keep good managers and what they're not telling you on the way out the door. Number three is why do Your strongest managers always seem to burn out or check out after 18 months. And what part of your leadership structure makes that almost inevitable? I think a lot of times building a great organization takes a lot longer than one thinks. He's like, oh man, within six or 12 months, this manager will be up and running and they'll have their team set up and I'll be like, set back. I've found this to not be the case. You can simplify and standardize things a lot in order to reduce the time it takes for someone to really get in the swing of things. But a lot of times I find around 18 months is they have hit the swing of things, the business is doing well, and all of a sudden you have not given them any latitude to move forward in their career or make a changes to the business. So a lot of times this comes into place, comes in the form of you are now hired as a manager, great, you're making more money, you're on salary, you're in the management position, you're maybe not in the field as often, all wins. Eighteen months later they're like, okay, I'm kind of sick and bored of tired, doing the exact same thing and feeling like I'm just a cog in the machine. And so instead of feeling like the autonomy of being a technician and going out and doing their job throughout the day and getting their hands dirty, now it's switched to now they feel like a cog in the machine. The reason they feel like a cog in the machine is because you are still integrating yourself into every decision inside the business. And so they just feel like the middleman between you and the technicians. And they're like, okay, so let me get this straight. I'm going to hire this person, I'm going to train this person, but then you're always going to tell me what to tell them. And they just feel like this middleman. And so I personally want my middle management to feel empowered to run the entire team. I am only stepping in for metric based accountability. So looking at dashboards, KPIs that are going off track and when they need help. And here's the thing, if you're so smart as an entrepreneur, I speak to myself again when I say this, when I say entrepreneur, I'm speaking to myself. If you're so smart as an entrepreneur and you always have the right answer, the one off occasion they do need help and they come to you and you're able to solve their problem, it will reinforce the behavior and they will come to you more Often. However, if every single time they encounter a problem, every single time they encounter an obstacle, you jump in with your opinion, you will start to be wrong. Occasionally, God forbid you're wrong once in a blue moon, but that will be held over your head. And when you really need to give feedback, there won't be any relationship capital to be able to bring the hammer down and actually drive change in the organization. And it's a whole lot better when your mid level manager takes accountability for all their decisions and comes and bounces things off of you versus you telling them what to do. And then they're just the person that carries out the orders. And when I go to the company, I saw this on a turnaround not too long ago, the mid level manager that had so much credibility with the team basically was just carrying out orders from the top line, top the business owner in the form of, well, so and so said this and so and so said like I'm just, hey, I'm just the messenger, don't shoot the messenger. I'm just the, I'm just the manager, but I'm opting on behalf of the owner. And there's times when that, that sort of intermediary can be very effective. However, for the vast majority of communication with the team, I want my manager to be coming from the place of this is the decision I made. We are making decision because it's in the system. This is refining, this is better for the business, this is together for the team. We're going to make more profit and more profit sharing if we do this thing versus I'm just carrying out orders from above. This is why the politics of the military can get so daunting for some people and seem very limiting is because people are just carrying out the orders of the person above them. And in a, in a private organization where you can quickly lead to a different team that is a different business, people will do that when they feel like all they're doing as a mid level manager is carrying out orders from above. And so a lot of times after 18 months, the initial freedom that comes along with getting out of the field, being a manager, having a higher pay starts to wear off and they start to feel like a cog in the machine and simply the person carrying out orders and telling everyone else what the boss wants to say and doing all the dirty work and doing the dirty laundry for the entrepreneur. And so my recommendation is they do need to do that. They as a manager do need to take care of the dirty laundry. You're delegating a lot of that day to day operational tasks to them. But also give them the freedom to make changes in the business, give them the freedom to identify problems, identify solutions and execute without you interjecting yourself. And there will be times they will make mistakes, but if you created the relationship to where they don't look at to you as an adversarial relationship and like you telling them, see, I told you you ought to do that. See, look at me, look at the numbers, so much better when I as long as you don't do that, they will eventually come to you and ask for your opinion. And if you've thought things through, if you stayed accountable to the numbers, if the metrics are clear to you and you're able to give good advice down the road, they will come back to you more often because they start to see the impact of your decisions and the positive feedback that you do give them. However, when they take action, they take accountability and ownership of the decision. And I would rather, I would rather have a manager that has 80% of the time makes a good decision but 100% of the time execute on as if it's their own idea versus getting it right 99% of the time. But every single time they go out and execute they're carrying out my wishes and the orders that I have given them. Why? Because the team picks up on it. The frontline team understands when their mid level manager is doing this out of obligation to the boss. And the boss told me what to say versus this is an idea that I am testing, this is something I am working on. And all the discretionary effort that is locked up inside of your managers will stay that way. As long as you just give them orders. The minute you give them the ability to be able to find problems, identify solutions and then go execute, you unlock this discretionary effort. What's that? That's discretionary effort. That is after hours, that is on the weekends, that is when they're in the shower, you're not paying them. But they start thinking about the solution to the problem they identified yesterday and they start thinking about how they could execute on that solution in the future. That's discretionary effort and that's the difference between an A player and a B player. But you'll lose all the A players if every time they come up with the idea in the shower, you shoot it down. Every time they come up with the idea in the shower, you want it to go through you. So give them the freedom and the autonomy. Realize they will make mistakes, but in the long run to retain an a player after 18 months after the injury, initial love affair with a new position and new money is once that's gone, a year and a half, 18 months, they need the autonomy to be able to go from problem to solution to execution without you interjecting. Number four. If you have to work under your own leadership system, same meetings, same communication habits, same accountability, how long would you last before getting frustrated? So I don't think it's a great question. I love the producer, but I don't know if this is a good question. The reason is because.

If you were in your same org, you would probably not like it because that's why you started your own business. And what I've had struggle with is like, well, I see all these things as negative in terms of limitations, less change, more meetings. But to a mid level manager that is looking for more stability, more reliability, for a paycheck, less risk, this is exactly what they need and this is exactly what they want. And so if I was to step in my organization, I would probably feel like it's too slow, I would probably feel like there's too many meetings, I would probably feel like we are testing things too long. However, I would not go get the job underneath me. I would go start my own thing. And this is where building your organization for the version 2.0 of you is a problem. Because the worst thing that could happen is you hire someone just like you. And if you hire someone just like you that thinks just like you, they will go start another business. They will go do exactly what you have done, which is go be an entrepreneur and start something on their own. And so if you have this problem of like I can't retain any mid level managers, you might be building a culture that mid level managers are only welcome if they think like you. And if they only think like you, they will go start their own business just like you did. And so sometimes you have to build a culture that is actually not one that you would be comfortable with. You have to build a culture that attracts the talent that you have deficits in and realize that as an entrepreneur, if you're type A, go change, make the systems people come in and it might feel like they slow you down, but you've got to create a culture to make them feel welcome. You've got to make sure that intrapreneurs and entrepreneurs inside your organization have the autonomy to make changes without your interruption, without you interjecting on every single aspect. This happened this morning. A manager had a great idea and I didn't Ask, hey, I want to be involved in this. They said, hey, I have an idea, I think it's a solution. Could I run it by you? And I had a very similar idea two days ago, but I figured they'd probably come to the same solution, the same idea, and if they brought it forward, I'd be like, yes, good, awesome. And also, by the way, I thought about one, two or three, but excellent job. The reason that's so important is because when they execute, it's going to be a huge win for the organization. I'll be able to credit all of the upside to them. It wasn't my idea and even though I came with the idea, I held back a couple days knowing they'd eventually get to that end result or that conclusion. But now it's their idea and I get to put all the praise on them when things go well. And the reason that's so important is because I have found that yes, it will stroke your ego and you will feel better about yourself when you come up with all the ideas and you're the wizard that comes up with the solution to every problem. It is so much more, more liberating when, without your interaction, your mid level managers come up with solutions and execute on them without you having to step in. And when they do have questions, you give them feedback or ask a question or two, but they still take ownership of that and they'll execute far, far more. Like, I was talking to a manager today that was extremely sick. He had like two hours of sleep last night. Most people would have called in, but the fact is he has been given the autonomy to make decisions in the business and he, he's looking forward in the next like four to six weeks to changing the way that he does management, changing the way his schedule looks like in part because he's been able to delegate, execute on certain problems he's seen in the business and now like, there's opportunity to like flex his wings. And when you allow managers to do that, you unlock that discretionary effort. If people are clocking out like, oh yeah, I didn't sleep well last night, I'm going to like take a day off and probably tomorrow and I'm not going to look at my phone ever. You're not unlocking discretionary effort. And it's not to say that you need to go hire someone else. Look inwardly and ask yourself why is this person not giving discretionary effort? Because an a player wants to, like, they want to think about solutions, they want to think about how to make it better for Their team, the people they hire and the people that they train and the people they care for. And they also want the business to do better because they get a piece of the action as a, as a manager. And so don't get in their way, in my opinion, by constantly creating roadblocks and obstacles to them greasing this wheel of problem solution execution. Let them run with it. And if you do that, you have to realize you have to create a culture that you would probably not feel comfortable with or you would not enjoy. But the type of person you need, as usually an entrepreneur, is that type A. You need the systems person. That systems person likes a different culture. Create the culture for them to stick around. Cause that's the weakness. You have to be able to scale the business. Next on the docket number five, are you developing your managers with coaching authority and autonomy, or are you just expecting blind loyalty until they finally get tired of cleaning up your messes? Wow. Okay. A lot to unpack there. I think the biggest thing is how you handle people that come against you with your ideas. And.

For myself, I am okay with some contention at leadership. And this is not for everyone. This is. This, this part is very personalized. I wouldn't say this is instructive. This is just how I like to roll. I will push back on people when I agree with them just because I want to see how well they thought through an idea. And I really like when people push back on my ideas because it also does the same thing for me. It refines my ability to be able to communicate an initiative, a change, an idea, if someone else is willing to challenge my ideas. And again, this is the part that this is where it gets gray. You challenge the idea or the initiative, not the person. And this is where a lot of times when I say this, people will. Instead, they'll attack the person and their credibility. The way that they handle themselves, their communication, it's like, no, no, no, let's handle the problem. Like, by identifying the problem and then looking at the solution. And then, like, everything is just. We're putting bullet holes in that. The reason this doesn't happen to most organizations is because people intertwine their pride and their personality with their ideas. Instead of just being able to put the idea out here and be like, okay, guys, let's shoot it, let's kill it. Let's just like, poke as many holes in this idea as possible. It's like, all right, guys, I have this idea, and this idea came to me and it's great because of this. And now when anyone wants to poke holes in it, they have to actually poke holes in you. They have to poke holes in your personality and the way that you're communicating. And then it becomes a warfare against a human being, like person against person. And that's where conflict comes into play. But if you can get in the habit, this is something that's very difficult to do. I'm not even great at this. It's like, here's this idea. What problems can we see with this? Yes, I did come up with this idea, but it could be flawed and I want to see all the problems with it. And let's poke holes in it together. The more you do that as entrepreneur, when your managers bring ideas, they'll start to present them more in that way, which like, hey, I had this idea. Poke holes in it. Hey, go ahead and steal, man. We use a steel man, which is basically, let's take the opposite side of this just for the sake of poking holes in it. This allows it to be a safe place to be able to disagree with someone's execution, disagree with the solution that they're presenting, but not make it personal. And so, in my opinion, I do not expect blind loyalty. If someone is super loyal to the mission of the business, they will work hard, they'll execute super well, they'll be very valuable, they will many times be an excellent manager to the frontline team because they demonstrate loyalty, commitment to the business, they work very hard. The next level, and this is when you start talking about business that's doing 5 million plus the next level, like a C suite person, the expectation is that they are able and capable of being able to take feedback against their idea without taking it personal. And they're able to give me feedback without making it personal about the ideas that I have and challenge them. Because if they're just going to say yes to everything I say, they're not super useful in terms of coming up with ideas. They could be great at execution. So we think about problems, solutions and execution. Someone who is loyal to the business to a fault and literally just does everything you say and basically is what it's a blind loyalty. Great, excellent at execution. And you need these people. You need them. Let me be very clear. Especially from zero to a million, zero to 3 million, like you need them. As you get multiple levels of management, you start getting above 5 million, you now need people that will come up with problems and solutions and put holes in yours. And that is a different caliber person, that's a different pay grade. But that evolution from a million to 5 million happens with that next level of leadership that actually challenges your ideas and doesn't challenge you, but challenges your ideas. And the same thing is back to them when they come up, when they mess something up, you don't not attack the person and how they handle the situation, their situation so lazy. They don't then show up on no like there is a structural problem, let's identify the problem and then like let's come up with a solution together and then poke holes in it and not each other. We're all third parties looking on at this problem and we're going to attack it together. The pro, the the enemy is the problem. It is not each other. And so I think that's what differentiates someone that is extremely valuable. Again executes like a blindly loyal person is who you need to execute. This is why many times I think of it as like at a five to $10 million organization you kind of have your, your CEO and your C suite and then you have your mid level managers and then you have your frontline team. Those mid level managers at that point that are actually hands with the team getting things done all day long. Very valuable if they have blind trust and they just have loyalty to the company, the brand. They believe in the mission and they're just super hardworking. The level above that though needs to be able to have their ideas challenged without being offended and they need to be able to challenge other people's ideas without the person that they are talking to being offended. So. All right, that's it for today. Hope you enjoyed the Home Service Millionaire podcast. What questions do you have? Go to mikeandys.com? submit a 90 second video, 90 seconds and you're gonna get your video to me. I will answer on the next show. Mikeandys.com?