Why Your Managers Don't Care As Much As You

Hey everyone, it's Mike Andes. Today on the Home Service Millionaire podcast, we're talking about your managers and why they don't care as much as you. And if you feel like you've been rebuilding your mid level management and your entire team every single year, this is the podcast for you. This podcast, the Home Service Millionaire podcast, is built for the operator that's already doing over a million dollars. So if you're just getting started, this might be for your future, but this is really built for a seven figure business owner. Let's jump into the first of five questions on this topic. This actually came from one person that was having trouble and I kind of had the producer break this up into five different questions from this specific person struggling with their mid level managers. All right, let's read the first one. Mike. I've tried everything. Bonuses, incentives, praise, flexibility. But my managers still act like employees, not owners. How do I get them to actually care? Yeah, like the first thing is if someone's not money motivated, it's very difficult to, to incentivize them because everything else is very hard. Is harder, I should say, to measure. It is harder to measure the morale of the team. And I can have a high morale team and a low profit or negative profit business. Once you become absentee or you can't be there on a consistent basis, I need to determine what is the most important thing to me. And when I leave a business and I have management in place, or I leave a department and, and they're supposed to grow it, I am caring about one thing and that is net free cash flow. How much money can I take out of this business or this department? So for example, if you're like trying to go multiple locations or you're trying to go from one department to another, you can take the cash from one department into another. I am thinking about how much money does this actually pump out like a machine? And so it's very difficult to talk to a manager, a general manager, operations manager, admin manager, sales manager, that doesn't care about money because that's the language I'm speaking. And it doesn't mean that it's the only thing that matters. It doesn't mean that's the only thing that they should care about. But when it comes to incentives and bonuses and their compensation, hard to, hard to quantify things that are not numerical. And so, and it's impossible. I just, as an investor type, when the business is running without me, I need to think about that. And the reason I do is because I know that if customers are unsatisfied and it will eventually hit the bottom line, I know that the team doesn't have a good morale and they can't retain their employees that they're managing, it will also affect the bottom line. Ultimately, everything leads to the bottom line. And so if I can focus on the compensation, the bonus being revolving around that, theoretically they should think like an owner, especially if I give them a very, very high ramp as that increases. If the person doesn't care about money though, I have a hard time talking to them. I just do. I have a hard time praising them. I have a hard time being flexible when it comes to the things that you've mentioned because it's very clear what winning looks like. And in my opinion, for any manager, any department, it's like, I need to know what winning looks like and then I'm gonna incentivize them based upon that. And for me, winning looks like lots of net free cashflow. And if they don't care about net free cash flow, we have a problem. And so I would first think about finding a GM or any manager that is money motivated. Because if that's the language you're speaking, and I would assume when you talk about them not caring about, you're thinking like them thinking like an owner. Usually people mean they don't think about the profitability of the business, they don't think about efficiency, they don't think about things breaking down, they don't think about the long term consequences of their decision. Great. A lot of times it's because they're not incentivized against the profits of the business. They're not incentivized like an owner. And so if they have the incentive of an owner and they have the information of an owner, they should, should theoretically be kind of acting like an owner. Especially if you give them a lot of incentive and you give them all the information. If they're not, and they're not money motivated, I have to leave the game. To be honest, I have to let them go. And I've had really good people, really great people that I would love to be friends with, but they are not good managers because they do not play by the rules of the game that I've set out, which is we, we need to make more money. And if we can't speak the same language and you're gonna tell me all the good things you've done, but it doesn't lead to net free cash flow, we're just gonna be speaking different languages. And so I have just come to the determination. It is easier if I just find people that have the same incentives as me and then I give them lots of it. And I would say even if you have done that and they still don't care, it might be that they don't care about money and then we got a bigger problem in our hands. Also keep in mind that, that if you've made incentives that are impossible for them to hit, they might be money motivated. But because they have seen now the dirty laundry of the business, they realize it's almost impossible to hit those incentives. And so before you make the jump to conclusion of oh yeah, they don't like, they don't like money, be very careful. Most people do like money. And so I do think it would probably be something deeper than that. Assuming that they, if they like money and you create very clear incentives and it's obtainable incentives for them to get onto a ramp, I think there's actually something that is beyond the incentives, beyond the information, beyond them thinking like an owner. And I think we'll probably get into that in the next few questions. All right, number two in the docket. Every time I finally train someone up, they either burn out, check out or leave. What am I missing in how I hire or lead? So this part leading to burnout or checking out or leaving, or does they not showing up? This is a lot of times comes down to misaligned perception of what the job entails. And so if you get a manager, especially if you bring them from outside the organization, this is usually when this happens is you sell them on the job and they're a great person and all of a sudden their expectations are very high and they get into the job is like, oh, it's not really that. This is something that we really had to nail down the past couple years, even at Augusta, for generation before becoming a gm. You got to be really clear that as a GM here, you work in the field. When it's slow, you work in the field. Now if we have seven, eight crew members, we're super busy. We're doing 120, 130,000 in monthly revenue. Yeah, you're going to be driving around, managing the team, leading the team, training the team, doing estimates, etc. But when there's 40 or 50,000amonth in revenue, you got to be putting boots on, rolling up your sleeves and getting out and doing work. And if you have a problem with that, then you're not a good fit for this role. Being very clear with expectations is important because most of the time when A mid level manager is hired from the outside. If they're really, really good, you have tried to sell them on the position and you need to be careful because of course I want to attract great talent, but if I have their, what they think is going to happen in terms of compensation, in terms of their work schedule, in terms of the working conditions and then it doesn't align with their expectations. That's usually when people leave within the matter of a first few weeks in a management position. Because usually in a management position they have really done a great job of the interview process or the first few days or weeks and you're like very impressed with them and that's why you offer them a management position. So they usually aren't like why like they're not, they're not like unprofessional or they don't know how to be able to manage themselves or their time. Like these are professional managers and if they're, if you're bringing some of the outside that is that really, really good quality candidate. I am immediately asking myself what was pitched? Like what was in the job ad? What did you say in the interview? What did your on target earnings say? What was the result though over the next few weeks or months when they started, did it actually align with what the job listing said? Did actually align with what you said in the interview or did you start adding other things that they didn't really expect to be doing? Did you make sure that they understood that their role was going to include certain aspects that aren't super fun? That's why I wanna be very open and blunt and honest with someone. Especially if they're stepping into a role where they have to kind of create the role. Like if you're, it's your first manager, they they you are not going to have the systems required or the skill required to know what systems to give them to set them up for success. It is going to be a function of they're going to have to help you develop the systems for their role. And we've talked about this earlier in the podcast a different episode where it's like when you hire someone, you actually set the expectation that they are going to help you build the systems for the role. You do that when you don't have the systems built out yet. So that way they have the expectation that you don't know quite yet what to put on that job listing and you show your cards because if you come out like, oh yeah, this is how it's gonna roll and this is what's gonna happen and all of a sudden they start realizing, oh, like there's other things that weren't included on the job listing. And like, I'm not making quite as much money. And in order to hit that target that they told me I was gonna make, that would take like a year or two for me to hit that. And I have to like get rid of my entire team because they're not great and I don't like them. And they were like handed to me as like, I thought this was gonna be a great position and now it's not. And so alignment is very important. I would also say checkups with them in their first few weeks. If you're bringing out a mid level manager and they're immediately going into management, I want to check in with them quite a bit in the first few weeks to make sure that what they expected is happening. And that's what I'm trying to, I'm trying to recognize. Okay, is there anything that has popped up in the past week that you weren't expecting? Okay, good, bad, ugly. Oh, this is more, this is better than you thought. Awesome. Oh, you mean more money than you thought. Great. Okay then. On the, on the contrary, I don't think this, this target is reasonable. I don't think I'll be able to hit this on target. Earnings that you showed me. Get those things out early and address them up front and set the expectation in the interview process that when they get hired, there's going to be checkpoints along the way. So I just hired a manager of a department. They're definitely not starting at the beginning. They're actually coming in above people that have been inside the business for six, seven years and in the whole application process, interview process, and then in their job offer, I have 30, 60, 90 and 180 day targets. And at each of those it gives me a very natural way to be able to check in with them and compare expectations that they had going into the job versus reality. So expectations versus reality, not having a mismatch is a lot of times what leads mid level managers to leave within a matter of a few months. And so be very clear up front, make sure the expectations are clear, make sure you're very honest about the downsides and the upsides of the position. If you have general managers, operations managers, admin managers, and you're trying to figure out how to compensate them, how to find them, I actually tell you how to do all of that. Inside of this book I break down sales, operations, admin, how to find a great manager and how to compensate them correctly, they're incentivized to grow. The bottom line. Go check it out. Number three. It feels like I'm the only one who actually cares. How do I build leaders who think long term instead of just clocking in for a paycheck? Okay, so leadership is a skill. It can be taught. And I actually did not believe that for quite some time. I thought, honestly, Jocko said that because he was selling leadership training. So I'm like, well, of course it makes sense for him to say that. As time has gone on, I have realized that I was wrong and that leadership can be taught. The question has to be asked, do I want people learning on my bill? Like, do I want to have to train them or do I want to pay for them to be trained? Do I want to have to pay for the mistakes they will make while learning about leadership? And this is really the calculus you have to figure out when it comes to, do I cultivate talent and they grow up inside the organization, or do I go out and find great talent? Because, for example, the person I just hired, I do not have the time to get them up to speed in their department in terms of leadership. I need them to step in and have leadership skills, which means they're going to get paid at a much better rate because I expect them to have skills of leadership, stepping into the role, and immediately be able to hire the right people, immediately be able to know how to put systems in place. So you're going to pay a lot more. And so for a lot of home service businesses, whether you're starting your first operations manager or your first admin person in the office, or you're starting a second location, you're getting a general manager. A lot of us are trying to do things on the cheap, and I don't blame you. I do the same thing. My first management overhead position was 17 bucks an hour. And that was for Liz in the office. And so if you want to build leaders and when, quote, that I always, like Liz says all the time is like, the best way to know if someone is a leader is to see if they have built a leader themselves. And so. And that person has also then created a leader. Like, can you actually replicate this and hand this leadership skill thing down? And so that's why one of the most fulfilling things at Augusta for me has been seeing the 3F program franchise fee forgiveness, where technicians have been inside the system, become owners, and then they. They also have employees that are doing the same thing. Like, that is the coolest feeling. And so when it comes to leadership and building leaders and thinking long term, it is difficult, I will not lie, especially when you have financial stress because there are leadership skills that have to be taught and it will cost money either in the form of a higher paycheck to bring that skill in, that skilled manager, or and again, I'm not talking like 30 bucks an hour, I'm talking like six figures to bring in someone that really knows what they're doing. They have done this before, they have all the leadership skills required and they make decisions better than you from day one. And you don't have to teach them anything. Then you're talking about the other side of the equation. The person that they're cheaper, they get started. But you're gonna have to give them a lot of checkpoints, you're going to have to show them what to do. You're going to have to use a lot of your skills of communication to be able to give them praise, to then also be able to give them some constructive criticism. Then also keep your hands kind of dirty in the business to be able to give them feedback and actually stay sharp in the day to day operations. So you know what to tell them. That's very difficult. And so when it comes to builder to building leaders who, who are thinking long term, they're not just in it for the paycheck. I am usually looking for care. This is like the most nebulous term. I don't like using nebulous terms but like do they care and care if you actually start trying to define it difficult. However I can look for does this person care or not and to what degree do they care? So for example, I am looking for leadership prior to them becoming a manager if they're in the organization by things like when we have the seven stages of success for technicians, one of them is having stage four. Technician is supposed to lead two team meetings. How they lead that team meeting shows me how much they care. Do they show up 10 to 15 minutes before the meeting and ask me for some notes or to debrief on some of the topics they're going to be going over. If they do shows they care more if they roll in a minute before, grab the notes out of my hand and start having the meeting? Probably shows less care. Doesn't necessarily mean the meeting goes bad. They could absolutely wing it and do fantastic because they're just really good at communicating. But I know that a great leader cares because if they care, they will do the hard work required to make changes. And the person that can wing it and has some organic skill that's kind of baked in, has some natural talent in gift of gab. For example, a lot of times we put into management positions without the proper vetting of does this person actually care? Because if they actually care for the customer, they'll go the extra mile. If they actually care for the team member, they'll make sure. This is again another stage of, of success we have for technicians. When they are training other technicians, do they show up early? Do they actually create a plan for the technician that they're training? Do they check in with their trainee at the end of the day? Or they're like, yep, I'll see you tomorrow. Do they show up, do they tell their trainee to show up 15 minutes early even though the boss said 7 o' clock, you're showing up at 6:45 and we're going over our job notes and our estimate videos before the day starts and then does the person they tell them that their trainee do they actually show up 15 minutes early and do what they say? These are all early indications that I'm looking for of do they care and then can they lead? If they care, they would tell the person that they're training to show up early, they're over their job notes, they're going to go over the checklist together, they're going to go the extra mile. And then does the person that they're leading also start to care? Can they hand that trait down of care to the people that they're leading? These are the early indicators that I am looking for and this is why I love being able to hire from within. People have said negative things about me taking my team that I built around the company and moving up inside the organization. Me perfectly knowing well that they were going to make mistakes and they don't have certain skills. But the reason I've done that is because there is so many instances of seeing them care and being able to lead that I know whatever they encounter next, they will be over to eventually overcome it. And there's a higher degree of risk to me to hire someone from the outside that might already have this skill and be able to conquer this devil or this demon like the current obstacle we're facing the business. But if they don't care and they can't lead, they'll eventually hit the next bottleneck as the business grows inevitably and they will not be able to overcome it. And so in my opinion, the leaders that I am looking for is not necessarily the one who has the skill. Cause the skill is like the ultimate trump card of like, you can pass the test, you can solve the problem, you can overcome this obstacle, you can continue grow in the business. But what it does not guarantee, if they do not care and they cannot pass that trait of leadership to their team members that they are, that they are leading, they will eventually hit an obstacle that they will not be able to pass and I will have to hire another person. Likely, this is when it gets ugly. You have to hire above them. And now they leave because they don't have the skill of leadership or caring enough to lead their team. And those are the traits that are so soft and hard to find. But once you find them, you, you're willing to invest and take longer with somebody. And so in terms of building leaders, I am looking for early indications of someone that can care and that when they lead other people, they lead people to also care. And the people that they lead begin to care more. They show up early, they start to do what their trainer said. The people in the team meeting, when that technician is leading the team meeting, start to change their behavior. And if I can get someone to care, change people's behavior and then lead them very high degree that when they hit an obstacle in life, in the business, in their leadership, in their department, in their location, they will figure out a solution because they care enough to go the extra mile. And that when they lead, they pass that care along to those that they are leading. Number four, why do my managers stop performing the moment I stop watching? Do I have a people problem or a system problem? Okay, so I never like saying we have a people problem because it puts blame on someone else and therefore I cannot control it. I'm going to take ownership, I'm going to try to figure this out. And so I'd never like to say it's a people problem because that's a quick cop out. Now, it will feel that way when you constantly are burning through people. You're burning through managers, you're burning through technicians, you're burning through crew leads. You're like, no one cares. Okay? If you turn your back and people start to behave in a different manner, you have to ask yourself, what is different when you are there? Well, there is a system of accountability, which is you see everything they do. And so I am simply trying to think about how do I have a system of accountability that is the exact same as when I am there. So instead of thinking, oh, they just change, they start performing less. What do they actually do differently when you are gone versus when you are there, and then create Incentives and systems to ensure that the things that they do when you are there continue to happen. You're like, well, when I show up and I'm there in person, they show up earlier. When I'm there, they make sure that the manager will stay until all the team members are done for the day. Okay, all right. Make those behaviors mandatory or required. And this might mean that the person that doesn't care once you turn your back and they stop performing, you got to get rid of them. But when you hire now, you have the ability to be able to say, you leave after everyone else is done. And guess what? When you tell someone that, all of a sudden, they start to route jobs better, they start to manage their budget hours better, they start to make sure maintenance is better because you have set the standard and the expectation prior to the job starting. And so the reason I want to call this a system issue is because you hired them wrong. You hired them and said, get the jobs done without saying, these are the things that are expected of you, and you must do them. And if you do these things, you will be rewarded in these ways. And so I'm always looking at the system, and I'm wanting to break down what performance looks like. So, again, when you say that managers stop performing the moment you stop watching, I'm asking, what are they doing differently? And then I'm gonna create a system around those things. And it can't just be like, well, they don't try as hard. What does that mean? Like, does that mean they show up later? Does that mean that they don't get all the budget hours done every day? Does that mean that if there's a rain day, they don't really try to catch up? They push everything off to next week. Is it that they let everyone off early instead of waiting 20 minutes when it's pouring down rains? Like, guys, you know that there's good weather in the afternoon, just wait around for a bit, but yet everyone go home. Like, what are the actual things that they do differently when you turn your back? Because it's very difficult to say, tell someone to perform better. It's a lot easier to say, you do this when this happens, and when this occurs, this is what you do. The closer you can get to that before you hire them, the better. And it'll also prevent them leaving because, again, their expectations of the job versus the reality, if those don't align, that will usually lead to term within the first 12 months. Number five. At this point, I'm scared. My business will never run without me. How do I build a team that doesn't need me to survive? Okay, so when we think about a system, I've always said this, I try not to define too deeply, like every system in a business. Instead I try to ask myself, in what conditions, in what environments does a system produce itself? It become easier to create a system in. And that is I am going to try to create an environment where there is simple services. Simple. Everything. Simple. Simple. Simple and standardized. Simple is like easy. It's basic. Standardized is we do it the same way every single time. Okay? Now the opposite of that is an environment that makes it very difficult to create systems. And that is it is custom. In other words, we do it differently every single time. And it is complex, it is difficult, it is hard, it is hard to train, it is hard to pass along. And so I'm constantly trying to do is, I'm pushing towards simple and standardized. And I'm trying to reject anything that's custom, anything that is complex at every single part of the business. And so if the business can't run without you, it is likely there are certain parts that are complex or custom. And this a lot of times comes down to your entrepreneurial desire to constantly add change to the business and constantly be wanting to make new ideas and new initiatives. And the reason that you keep doing that once every month or once every week, all of a sudden you have 50, 100 different little things that you tweaked in the business. But only you know how to do it. Only you know how to edit the text templates, only you know how to edit the email templates, only you know how to go and do the automations or the do it the way you want. And that is custom and that is complex. And it's very difficult to hand that off. And this is why, as time has gone on, I've realized that making changes to the business is less and less required. Making tweaks. I'm going to adjust this and I'm going to make this better. I'm going to improve this. I'm going to make this new initiative, new automation, new software. All of that if just left to a great general manager or a manager of any department that is constantly just taking what you've currently given them and just making it better. Then making it better usually comes in the form of simplification and standardization. The opposite of simplification and standardization is you constantly changing things up. And so I would say the number one thing you can do to help your business run without you is stopped adding new things New services, new ideas, new upsell strategies, new tagging system, new software, new trucks, new setup of equipment, new dealer, new shop space, new, like in everything is new. And it's very, very hard for an employee or a general manager that likes more routine and likes optimization. And if every single time they walk into the office, you're changing things up on them and you're like, well, how does that really relate with like the business run without you? Because the minute you leave, they don't know a lot of those things. It's all been in your head. It's. You haven't documented the processes for the things that you have thought up every single weekend and changed in the business. You've just done it. You're like, well, we need new fuel systems. Okay, great. So you went on and you searched the fuel tanks and then you, you got them installed and you got them set up. So when you leave on vacation, guess what happens? Something breaks, who they're going to call, they're going to call you because you came up with the idea and then you went and just executed on it. And this is why I've said over and over on this podcast, the sooner you can get to where managers identify a problem, identify a solution, and they go execute, the better, because that process can be systematized. It is simple as a standardized is 1, 2, 3, and then they can hand it off to another manager. But if you're constantly finding problems, going and finding the solution and then executing without them, almost never is a system created. And almost always those are the little leaks in the business that show up when the business owner is gone. And for the business owner that says, well, this is impossible. I hear this in home services. Sometimes it's impossible that anyone would ever care as much as the owner that the business can ever run without the owner there. And every single time I go on vacation, something's popping up. I'm getting pulled back and I'm getting dragged back into things. I can't go away for two or three days without my crew manager or my crew leads or something bad happening or customer complaining. And I will say this, it is almost always the owner in that case that is so entrepreneurial and is such a good entrepreneur. But they have failed to actually enable their managers to think without them. Their managers have never had a novel thought that they've been able to execute on because the owner and the entrepreneur just constantly keeps jumping into the business and adding new stuff, and they're the ones constantly finding problems, creating solutions and executing. And. And then when you leave, they do not have the skill of seeing a problem, identifying a solution, and going, then executing on it without you. And then you become the bottleneck. And then you feel like you can never run the business without you being there. And it is possible, but it will require the humility to say, I am not instituting this change. As much as I think it is a good change, as much as I think this is a positive thing, as much as I think this new idea, new service, this new way of doing something is good, I'm not going to do it because I'm going to allow my current team to take what I've currently given them. They're going to do it more, and they're going to do it better. And I'm not going to constantly add new stuff. Because when you add new stuff, almost always you have identified a problem, you came up with a solution, and then now you're executing on it. And as soon as you take that loop over, you become the bottleneck for the business. You become the one that's coming up with all the ideas, all of the solutions, and you're doing actual execution. And when something breaks later on, like that fuel system that you install that you looked up online, and you're the one that contacted the sales rep and had it installed with concrete guy out in front next to the shop, you're gonna be the one that gets contacted when it starts to work and you're gone. All right, everyone, that's it for today's show. If you have a question, go to mikeandys.comquestion and take 30 seconds, record a video, submit it, and I'll answer it on the next show.