WHY your employees are LEAVING!
Mike Andes advises a $4M company on keeping managers from leaving. He says they need a clear 5-year mission beyond profit targets, challenging work like franchising to retain A-level leaders, and to use recessions to acquire competitors if they have credit.
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Hey everyone, it's Mike Gandies and today this is actually a special clip from a private consulting call that I had a while back. The company was doing over $4 million in annual revenue and was really trying to think about what the next step in the career in the business evolution was. And so I talked a lot about two things. Number one, how to take opportunity during this coming recession and how you should be positioning yourself in terms of buying out competition or growth or profitability and how you should be thinking about that. The second thing we talked about is the importance of having a mission, a mission statement and actually having a clear goal and direction for the business. Not just from a financial perspective but also as a way to retain talent of your mid level managers. So as you get past millions in revenue you need mid level managers and sometimes you'll make decisions in the business not because of just the finances but simply to retain and keep those individuals challenged and on the team. So without any further delay, let's go ahead and roll the tape and I'm just going to show you a piece of a call that I had and it'll be really helpful. Yeah, number one is retaining your leadership. Right. In terms of making sure that they know the vision. That's my biggest fear when I read your thing is actually you have a really good system. It sounds like it from a leadership perspective but if you don't have a vision you'll lose your A talent when it comes to leaders. You might keep your leaders out in the field because they're just looking for a better paycheck and you can afford that over competition but you won't hold on to an A class manager that if you don't have a clear direction of where the business is going. And so you know, the only reason I actually started franchising probably a year sooner than, probably two years sooner than I thought I was going to, is because I wanted to retain my mid level managers and I knew that not doing the franchising was not going to be.
It was, I need something hard for them to work on. I need something that they could like really sink their teeth into and get messy with. And so if you have that type of talent, and I know, I don't know if you do or if you've just kind of grown them up from nothing but if you have grade A incredible mid level managers know you, you need to have a really clear direction of where the business is going so they get involved in that because you're not going to be able to compete when it comes to the pricing power of larger companies coming in and needing that type of talent. They'll come in right now and offer them 100 grand. You're like, I can't afford that. Like, they're just an office manager. Well, they might stick with you if you can offer them 50 or 60. But you have the vision of where the company is going and they're able to be part of that. And they see themselves growing at the company and they're like, hey, I'd rather take a haircut the next few years in terms of salary, but be part of something that as we build it, if you wanted to sit back and have more time and let the business run, you can do that. If you want to grow and expand and just like grow the thing massively, you can do that. So it's got to be really, really clear what you want and why you want it. Otherwise you're going to keep flip flopping and you'll just keep making your managers mad because they'll be like, where's the direction here? Why are we growing? Okay, the next minute it's like, oh, let's focus on profit maximization and consolidation. They've got to have a very clear direction of what you want. And that might mean, okay, a year or two of X, which is profit maximization institute P4P. And then in this year, two years from now, we're gonna go on a massive offensive using those margins. Whatever it is, it's clarity of mission that is required to get to the next level and the clarity of why the organization exists. Cause in the past it's just simply been how do we serve customers better? And that's a great mission to start on. But as the organization gets larger and you get removed from customer service and you get removed from the daily oper is not motivating to you anymore. Right? It's going to be development of other people. It's going to be expansion and brand awareness in your local market. It's going to be recognition, it's going to be fame, wealth, whatever it is. You're just going to be really clear what you want. I feel like the next level from where, you know, just going from 5 million to 100 million, for example. That step simply is based upon having and attracting great talent. That's simply what it comes down to. The type of talent is going to grow. An organization from 5 million to 100 million will need something hard to chew on, will need very clear direction. Their compensation will need to be tied to the goals and objectives of that plan. And so someone that has a five year plan of where they want the company to go, benchmarks strategic initiatives at each year, what the profits and revenues are going to be each year. That's something that grade A talent is attracted to. Because the alternative that grade A talent is to just go work for another massive hundred million dollar company and make a really good salary, but not really being invest in any sort of a strategic plan other than next quarter. We have to make X amount for the investors. Right. And so that's your leverage point to attract that $100 million talent is to have a goal and some sort of plan that they have alignment with. Right. And so I'd be strictly focused on how laser like focus can you get on a five year mission of what you want to go, where are you going to want to go and why, what the plan? If the plan is maximization of profit, why if we want to grow and become massive in terms of revenue, why if we wanted to diversify or if we want to consolidate services, why like those only be very crystal clear so that when you present to a manager or you present to a potential CEO, down the road, as you get to 10, 20, 30, you've got to be very clear why this is happening. Because you otherwise will not be able to get the $100 million talent. Those go to $100 million company and get paid more, better benefits, better stock compensation, et cetera. But they'll do it with you if you have. Because building something is so much more fun for that type of individual that's type A than just joining something that's already been built for five year for Augusta is definitely to change the level of professionalism in the landscaping industry. Right. So that's almost an infinite goal. Like you can't necessarily ever achieve it. Right. And that's with design. Because I do never want to hit like, oh, we wanted to get 100 million in revenue. Well then what happens when we hit 100 billion, then where do all my top people go? Where's the team? What are we supposed to rally around then? Right. That's a never ending goal. We will never actually be like we did it right. But we will always be able to work towards it. Right. And so for you it's a matter of like, well, what are you passionate about outside of just the numbers? Because the numbers won't motivate anyone outside of just their paycheck. That will get people short term, but what's the long term thing outside the money? And that could simply be that you're passionate about Taking a frontline staff member and turning them into a millionaire, or taking a frontline staff member and giving the skills to become a manager and make six figures, whatever that metric is, that's going to be much more tangible. Outside of money is usually the thing that you can get people to rally around, right? Like you and I both need $100 million CEO type person that's done this before to step in. The only way they come and step in is because of a mission, right? And ultimately that's the only reason why I started franchise is to retain that talent, but ultimately to attract that. Because you will need people to be coming to your organization if that's the end goal and only way they're going to come in is for some outlandish goal that you're going for. You can think about like something we track, for example, is number of guys that start off in the mowing field and become owners, right? That's a big thing I track how many of our franchisees become millionaires. Something I track, right? Those are the intangible things that will motivate you and keep you motivated beyond just the money. Because the money at this point, like when you're tossing up, do I grow or do I go to a beach? Money has become inconsequential, right? Because either way, like, I'll be fine. Either way, it's not going to really impact me. Do I really even want to do lawn care? Do I want to go invest in real estate? If you're in that transition, that's when it's like you need something besides money, right? And you just got to be really open and honest and clear with yourself as to what that is. And just, hey, if it's where you, if you want to be famous, great. Like that's what everything should be pointed towards. And it's not to say like that's bad or wrong. That's what you want. So do it. Right? It's just about being really clear why, like, what is the goal here? Because it'll keep you more focused instead of flip flopping back and forth. I think if you had an offsite meeting with your managers or even I'm sure you have as part of eos and things, but like, when you do that, I would assume some of the things that they're thinking about is like, okay, I've been with this company for several years. We've been grow, grow, grow, and now we're having a down year. What's up with that, right? Why is that happening and how does that relate to the mission. Because if they've stayed with you because of growth and they're constantly having something hard to chew on, new services, bigger contracts, offering different types of snow plowing and all these other things, if that's what has kept them, now all of a sudden that becomes in question, right? And so if growth is the only thing that's kept them, you've got to now clarify the vision outside of growth because that they'll get disillusioned. I think honestly the down year is going to be more about labor. It's going to be who, when as we go down into it into a more higher unemployment, who sucks up all the talent. And so the down year, like it's simply like who becomes the biggest lawn care landscaping company. Yes, it's going to be who buys out the competition, right? But ultimately there's other opportunities in a down year, right? Like there's real estate that all of a sudden is really cheap. The stock market's really cheap. Everything gets cheap, right? So it's really going to the play is who's built their business now in a profitable manner that when you have a down year, you can actually cash in. Because everyone wants to cash in a down year, but they just don't have the resources. They're tapped out and they have. No one wants to give them debt. If you can get, if you can convince.
Someone to finance you during a season of a down year and you're credit worthy, like you just take the market over. That's when you go into, you go into higher leverage when everyone else is just trying to get by.
