Accelerator Performia

So, thanks for coming out so early. I'm not sure how many of you are normally up and about and in your office at 7:30 in the morning. And personally for me, I like to start early, so it's my part of the day. A little bit about Performia. Performia is a global HR consulting business. We have about 25— we're in 25 different countries, over 50 offices. And I look after the Asia-Pacific region. We have offices in Japan and China and obviously in Australia. What we do for our clients is we actually give them a different way of being able to attract and know who they should hire. And this becomes really important when it comes to executing strategy because, you know, I think you'd all agree that, you know, how well you roll out your expansion or roll out your plans depends a lot on the who you put into your team. And what that's allowed us to be able to do and see in practice a lot is what we're going to go through today. So normally, our normal presentation goes over actually how our screening system works and understanding more about people, and I think we've presented that to one of the EO groups. And today I put this presentation together, which is, like Lionel said, is new. And comes in from a different angle on exactly how we apply a part of our product to executing for our clients to be able to execute their strategies. So it's going to be pretty simple. We're a group, it's morning, so I'm happy for anyone to yell out and abuse me, heckle me, because that'll keep us all awake. You can ask any questions as we go. And of course, just because I stand up here and present this information to you doesn't mean it's true. That's right. It's only true really if it works for you, right? So, you know, if you look at a concept here, what we go through, and you go, what a load of crap, just, you know, give it a go and decide if it's crap, if it doesn't work. And if something you think, that's just the most amazing thing I've ever seen, and you try and use it and it doesn't work, then it is crap. So, you know, this is a point of integrity, so make sure that, you know, It's really something that, you know, you can embrace and use, and then it'll be true. So, we get started. Strategy is really a simple thing. It's basically, it's, you know, it's a plan or a major plan that's developed by either the founders or the owners of the business or the board of directors. It's documented, obviously. So it can be executed. But in a lot of cases, when I meet business owners, they don't actually have a documented strategy. But it's pretty rare that you sit down with someone and they have no strategy if they're a business owner or a manager. And I find that when we talk to businesses, if they have a documented strategy, usually it's not known about where it should be known about. Or if it is known about, it's a strategy that's like, it's so complicated and long that it's like no one really wants to get that interested in it. So just as a little survey, who here has a strategy for their business? Yep. And who has it documented? Yep. And who's able to actually— like, who feels like they're actually following it and being able to execute it? That's pretty good. You guys are a bit more professional than a normal group. So the thing to look at With strategy is to make sure it's simple, and I find that when we sit down with different people, it's like a strategy can quite often be very complicated, or it can be something that's just way too long. But a strategy, if you look, you know, say in the battlefield, a strategy will be just like you know we need we need to take this whole continent, or we need to get the Japanese out of the. Pacific. That's— that'll be the objective. And then the strategy will be like maybe 1 or 2 paragraphs of like what will occur to make that happen. And so they over— it's the overall major plan that occurs, and I'm sure you know this. So the thing is, is under the strategy is we create tactical plans. So a strategy is what needs to be done on an overall An overall objective or a goal to be achieved. And then that would normally go down to the managers, which in some cases, if you're a small business, will be yourself. And then you'll write up a whole bunch of tactical plans, and they can break off into many, many areas. So, to give you an example of a really simple, to-the-point strategy, we could say, you know, here we have an objective is to— you probably can't— can you guys read this down the back? It doesn't really matter so much. Let's say there's an objective is to basically, you know, increase sales, increase margin, you know, and overall, you know, by lowering overhead and whatever it might be. It's a really simple objective, and every company has some sort of objective they want to achieve. Sometimes it's a recovery objective, and sometimes it's just to build on the success of the organization. And then we can say the purpose. We can go into a purpose about why we want to achieve that strategy. And then what would be the strategic plan? And you can see here that this can be enough. This is actually just taken from a business that does about like $10 million a year. This is their 2016 strategy. And from that strategy then is built all the different tactical plans and projects to be able to execute it. So strategy is really actually an easy thing. I find that nearly every business owner has a really good strategy in their head. And usually, I remember when I first started in business, it was actually when, you know, I think it must have been about 8 years after I started in business because CD-ROMs were invented. And I remember seeing this ad, I think it was called Master Plan or something, and I bought this $400 CD-ROM to do my business plan. And I remember putting it in and it's like the CD-ROM, it was like, it must have been about 300 pages of documentation. And I looked at it a few times and then I put it back in the box and a week later I pulled it out and put it back in my computer and looked at it again. But it was so complicated that I never did it. In actual fact, I think for the first 10 years I was in business, it's like I never really did a strategic plan. I used to write a lot of stuff down. I had different consultants would come in and they'd help me do strategic plans. And then I'd say, I'd basically get the plan and I go, wow, that's so nice. I've got my $20,000 worth and I put it in my drawer. And then more recently, it's like just making these really simple plans, it becomes so much easier. But one of the reasons it gets so much easier is because what has to happen after you create a strategic plan, and it needs to be executed. So having an idea or getting this information and putting it onto a piece of paper or making it look beautiful is the easy part. Obviously, it can take quite a bit of analysis. It's like some people are very entrepreneurial and they can see great opportunities and have fantastic ideas and their strategic plans. But the true business person, a successful business person, can take that idea and get it into action and get a result with it. And the really good business people can take the idea, get others to put it into action, and get them to get the result. And that's where, you know, that's one of the toughest things to be able to achieve. So if we look at strategic execution, what normally happens is the founder, the owner, the board of directors comes up with a strategic plan. And let's say it's a new business, there's one person, there's just the founder. And he or she, they go out and they start the business and obviously they work hard, they're excited, and of course they start to get really busy. So now they need to hire someone. And so usually one of the first hirings is someone to help them in production. So let's say, for instance, you know, this company, this company is a retail shop. This person opens a shop and they sell products and they're getting busy. So what they do, they hire a new shop assistant. And then as it gets busier and busier, they see an opportunity where they can sell online and they can take the product and maybe sell to others. So now they hire a salesperson. And so now they go from being a business starter, or you could say an entrepreneur, this person that starts the business, they now go to being a manager because now they need to manage staff and they're managing their shop and they're managing finances. And so they obviously have a lot of— they start to get busier and busier. And if they're like me, when I started in business, I didn't know how to do any of this stuff. It's like I didn't do a lot of schooling. I didn't go to university. I was really good at what I did, and so I just started a business in that. And next thing I knew, I was all these things, but I was 22 years old and I knew how to do none of them. It was fun to find out and expensive as well. So then as time goes on, they want to start to get someone to run the administration and the accounts, so they get an office manager, and then they bring in someone now to manage the store. And they open— they run around and open more stores. And this is a pretty traditional model, would you agree? Yes. And it's pretty tough because along the way, if they've hired 4 people, probably, you know, 1 or 2 of them haven't worked out so well. And so they've had to keep hiring. So, you know, they get better and better, or they get more and more experienced at knowing that hiring is dangerous. So, you know, I'll meet a lot of business owners that only get to a certain point because they don't They hire someone, they come in and they leave, or something goes wrong and they lose their whole purpose to expand their business. But there's another way it can be done. Oh, sorry. And then quite often after a few years goes by and the sales increase, it's like they decide then, you know, maybe what I should do is hire someone to run my business for me because I'm exhausted and, you know, finally I have made enough money, so I'm going to hire someone in. To do the job and run my business. And who here has ever hired a general manager for their business? I have. So when you hire a general manager, quite often we find that it's like one of the toughest hirings to do because it's like getting the right person and being able to hand over the right things for that person to do becomes very tough. So it's pretty rare we see any of our clients hire their first general manager and it just works so well for them. In fact, normally this is where we come in because they've had a lot of trouble in that area. So another way to look at it is instead of hiring all these expensive people and having to learn along the way and having to handle all these different things that occur, it's like as a founder, a person that starts a business has a particular skill. Would you agree? In actual fact, you know, not many people can run— can start and run and build a business. It takes, you know, a lot of guts. It takes a lot of hard work, and it takes a lot of wanting to be adventurous. And most people, 99% of people out there, it's like, can't do it. So it's really horrible when a person starts a business because they have a great idea or they're so good at what they do And then the next thing they, you know, is they're stuck now trying to build that business because it's like not their true skill, not their true passion usually. So what we can do is move off. The founder should move off to the side, and really one of the first or early hirings that should be done in any business is to hire a general manager. And so even this person that's running their store, they may have a passion. They've got this idea they can build this store into being a national organization. They can roll out hundreds, if not thousands, of these as a franchise model or even as a company-owned operation. But if they're stuck building the business, if they're stuck in the running this shop or running their second or third shops, it's like it's going to be really difficult for them to pull it off. So then this person has their problem, their challenge of actually setting up the organization. Well, this person can go off and do what they're really good at, which is usually coming up with the ideas, the strategies, you know, all the things that it's— you can't really replace. You think about how you started your business. It's like, imagine hiring yourself and your skills in. It's not so easy. You have a particular set of ingredients that created what you've created. Yeah, I might have got that right. So one of the issues that occurs though, one of the issues that occurs when you hire in a general manager is if the business is fairly new or a startup, Most organizations or most entrepreneurs don't feel they can afford the money it costs to hire a general manager. And so we need to look at this. So what we call this that we just went through is what we call our mission-based strategy, mission-based strategy execution. And the reason mission-based is because you'll see when we want to build the business this way, we need to make everything about a mission. When we make it about a mission, it creates challenge, and that challenge is what's going to empower what we need to do our next steps. So if we go through this, the first thing is obviously that as an entrepreneur, we have a great idea or a really good skill that we can take to the market. We have to prove that idea to some extent. So generally, it's not that easy unless you're someone that's already been successful in business. It's not that easy just to talk to people. to someone and go, hey, I have a great idea, you should come on board. Generally, you need to prove the idea a little bit, even if it's minimally by survey or if it's out to the market. And you see this, I'm sure all of you watch Shark Tank and you see these— one of the questions that always comes up is, what's your sales? Because these guys, they don't want to do seed capital, they want to do venture capital, so they're always finding out like what— how is the market receiving the product? Is it proven? That your product is needed and wanted and you can make money out of it. Obviously, you need a broad strategy. So, the broad strategy when you start something is different to after you prove something. So, when something started, the strategy is, you know, I've got this idea, I can get this product, I can get this market, I know my margin, I'm going to go out and just see if I can get something happening. Once it starts happening, the strategy will change because now you can go, right, how can I expand? How can I expand what I'm doing? How can I expand and take what I've proven and make it into a viable or really large operation? And then, as early as possible, bring on a general manager to take on the general activities that are required to take and execute that strategy. So we look at when we hire a general manager, it's like, you know, we all know that general managers earn, you know, $100,000, minimally $100,000, $200,000, $300,000 a year. So unless you're really cashed up, it's really hard to hire a general manager on a startup, or even, you know, probably for a lot of you right now, it's like, how would you go afford— how would you be able to afford $200,000 a year? It'd be tough, right? Yeah. Also, when you pay the manager, you give them— you bring them in, you pay them their salary. Generally, it's like because you're giving them a good salary and looking after them, it's like they don't have to take a lot of responsibility for what's going on. So, you know, you work hard and you pull on your reserves or your savings or your profit to make sure that they're getting paid. And if things are going really well, you may give them some bonus. And if they're not going so well, it's like it's not not such a big deal for them because they'll be getting their salary. And this is a general— what happens in the corporate world. So when we, when we put general managers on large salaries, or actually any senior executive in an organization, or any person we hire, when they're on just fixed salaries or really good salaries and not much bonus or no bonus, They're obviously motivated more for the position or the money, or more likely to be, than they are motivated for the success or the outcome. So, if we turn around and look at mission-based hiring, and so for our clients, we've partnered with them because we're not actually a recruitment company per se. But we partner with our clients and we work through this with them and we help them to hire their senior executives on a different system or a different non-traditional method. And so when we talk about mission hiring, the first thing is the salary for a senior executive or a GM can actually be zero. But it's, you know, it's— you don't want to ever pay senior people in your organization big money. It always should be low salary, if not no salary. So the people— anyone in here have anyone, any staff on no salary? Only they're only getting paid on bonuses? Good man. And don't include yourself. So I need someone, you know, it's very interesting when you do financial planning that, well, when you do a strategy, how much money really the organization has would be classed as one of the resources we look at when we do a strategic plan, right? So there's no use doing a strategic plan that's like, goes, takes me from, you know, zero to hero when I need $1 million to do it. I don't have $1 million. But there's a really key thing in strategic planning is it's like you don't necessarily need to plan to what money you have. It's just when it comes to tactical planning now, the less money you have, the smarter you need to be. And so when you have no money, it's amazing how you can get a lot of things done with no money. Then 10 years later, you have a lot of money and you look back and you go, you know, I used to do all this with no money and now it all costs me so much money. You know, you probably— a lot of you have hired a salesperson, right? And I, you know, I'd start a business, I go out and I'm the salesperson when I start it. And usually it's like, you know, if I'm lucky, I've even got business cards. I don't even know really what the product is or how to pitch it, but, you know, I get out there and I start to sell it. Then you hire your first sales guy and he's like, I need business cards, is there a script? They want a whole list of stuff before they start. I mean, I don't need any of that stuff. But as we get more money and more resources, we can put them there and it makes our job easier. We can be a little bit lazier, or we can even— we can say, let's pay for that service rather than I've got to burn the midnight oil and do it myself. And so then we need to reward the general manager for executing the strategy. So it's like quite— it's sort of difficult to think that you may be able to get someone come into your organization and work for no money. But if someone wants to take on a general manager role, if you're sitting in an interview with them and they said— you said, listen, I just want to let you know, there's like a— I can't pay you any salary. Could you imagine saying this? No. But if they turn around and go, oh, well, that's horrible because I have no money and so I need salary. And it's like, if this person is going to be a general manager, would you really want to hire someone that has no good financial planning in their own life? So generally, it's like, I can sit down with someone that's come off a job in the corporate world or they're in a job on $200,000, $250,000 a year and say, listen, this job we're talking to you about has no salary. Well, okay, interesting. Would you be able to work for a year with no salary? Well, yeah, I've got plenty of money, so that's not an issue, but this is intriguing. Like, how would you— how come you're paying no salary? Well, because the company has no money right now, but here's their strategic plan, and the strategic plan, well executed, should be able to bring you in a lot more money than you earn now, but based on your results. Okay. Now, if this person's not confident in their skills, what do you reckon they'll do at that point? They'll be like, yeah, I think I'll just go off and take those nice salary jobs. But you know, there's a lot of really competent people out there. It's like, you know, you've ever looked out the window of an airplane and you see a whole city, you know, and I'm quite amazed at how good we are, how many good people we are, because to build that To build a city and be as organized and as civil as we are takes a lot of really good people. Would you agree? And quite often when you go to try and hire, you wonder where all those good people are. And so if you want to know where good people are, it's like good people live off challenge. Would you agree with that? Yes. It's like, tell me, any of you, did any of you start a business just because you wanted to be rich and Because you wanted to, you know, have, you know, be lazy. I'll guarantee every one of you started the business because it's like you weren't challenged enough where you were. It's like you thought, I can do this better, I can make it bigger, I can, you know, have a dream, I can help more people, I can change something. And that was motive, that was a challenge motivation, a mission motivation. And so when you want to find good people, it's like you need a mission. It's a bit like Mission Impossible. It's like you want to actually— the better person or the more productive you want a person, the more impossible you should nearly make the mission because they're the best people, the ones that go, wow, this looks impossible. That's for me. The other person that's going, oh no, I need salary and let's just create— you want to expand 15%? Over 2 years? That's like, you know, 5% is a lot. This is not the person you really want to hire, right? Until you've got your corporate empire and 15% is a big expansion. So we need people, we need this person to come in that has to be motivated by challenge, motivated by accomplishment. And it's possible. In fact, it's more than possible. We see it all the time. I think you guys are sponsored by PricewaterhouseCoopers, right? PwC? If you talk to senior executives, like the PwC guys, they're all senior executives, aren't they? But if you talk to senior executives, it's like they're in awe of entrepreneurs. They look at people that start their own business and they just can't believe it. They can't fathom how someone can go out and take that risk and start their own business. And some of these guys are amazingly skillful. They've had so much training, they've had so much experience of building things and making things go right, and their production records are amazing. And you talk to them and it's like you're in awe of them, but they're absolutely much more in awe of the person that gets out and starts their own business. They want to start their own business. They can't do it. And so many of them are stuck in the corporate world and they hate it because at some point they were able to get up the corporate tree because they were so good at accomplishing things. And then they get to a certain level or the ownership changes or the wrong hiring happens so people that work around them become politically motivated. They become career motivated. And then these people don't like their jobs anymore. And these are good guys, people that don't like their jobs because they can't accomplish what they were accomplishing in a large company. These are the guys that we want working for us, and so we need to attract them. So the problem comes into it, it's like whenever we want to bring someone into our organization— now when we bring a general manager in, to our organization is a very key hiring, would you agree? Yes. So, you know, I've seen some pretty interesting horror stories of people when they bring general managers in, just how it went a lot worse, it cost a lot more, you know, did a lot more damage to the company than if they had never hired the general manager in the first place. And we have the usual problem when we hire. Because when we hire, when someone sits in front of us, it's like we can have the person who looks great, great resume, it's like, you know, fantastic background, and, you know, absolutely from the first meeting of this person, we want to hire her to be our general manager. Then we have this guy comes in the same, he's just even more amazing and more fantastic. It's like, this guy, he's going to run my business. I go home to my wife and I say, you know, we're going to take this guy on and you know what, we're just going to be able to pretty much take the year off, spend it with the kids, then I'm going to be able to develop my new product and write my book. Oh, it's just going to change. It's going to be beautiful. This girl here, so, doesn't look so good. And this guy, he comes in. And doesn't really speak. And you know, when I ask him, you know, do you like to work hard? He goes, no, I don't like to work hard. So anyway, let's look if I hire each one of these. So I get this girl in, I put her on as my general manager, and she actually like really blitzes, grows the business, and she's a great hire. So big tick. I get this guy comes in. And he does nothing. After 3 years, the business is just still sitting where it sits, but I've had to pay him all his salary along the way. I was pretty desperate, so I hired this girl anyway, and she proved to be terrible. So after 2 months, I knew and just got rid of her. And this guy here, Boris, I hire him, and he turns out to be just about the best thing I've ever done in my life. I find out he doesn't like to work hard, and so he's so effective at what he does that he doesn't have to do much at all. So he couldn't answer the questions well, but goddamn, can this guy produce a good result. And so whenever we want to get someone in any position in our company, but especially into senior roles, it's like we want to make sure that they sit in this region. There's really no point Getting people that can't actually add value to the organisation, is there? And of course, this person is going to be much cheaper to hire than this girl. This girl, her resume looks right, she's got all the right background, the right experience, she just presents so perfectly in the interview that she's going to have the choice of 10 companies to work for. So you get into a little bit of a bidding war with this girl. You've probably had this experience before where you wanted someone to work for you and it's like, damn, it's like, really? Is that much? Someone's offered you that much? This guy, because he doesn't present so well, he's a bit dull and actually, you know, doesn't— you know, he's too honest in the interview to get a job. This guy here can actually be quite very effective and quite to hire. Now, out of these 2, which one do you think would be a worse hiring? The guy that looks good but is not good, or the girl that looks bad and is bad? The guy that looks bad. That's right. This guy is a shocker because quite often these guys come in, not only do they not add value, they actually can take a lot of value from the organisation. And because I love this guy so much, I make the decision to put him on. I go home and tell my wife how good this guy is going to be, and then I tell all the staff how good this guy is going to be. When he doesn't turn out so good, what do I do? Persist. Persist, exactly. It's like, oh no, no, I know he's a good guy, so no, I'm gonna go help him some more. And I go see him, I go, hey, what's going on? You know, remember I told you we should do that half-million-dollar marketing plan? Well, you haven't approved it. If we approve that, then, you know, it's gonna all go— All right, so I approved the plan, and a year later, no change. Well, what happened? And so we persist with these guys, and they look good because they could trick us in the interview. So of course they can trick us indefinitely when they're in the job. It's everyone else's fault. It's everyone else's this. They can introvert you and make you think it's your fault. And they become really dangerous in the organization. And so obviously we don't want these people in our organization, and we want these people. And this girl's a little bit easier to spot. Like, you can, you know, if you've got a little bit of nous about you, you'll spot her. This guy is really hard to spot. And also this guy's hard to spot. So we need to be able to know how to pull these sorts of people into our organization. If we said to this guy, "Look, we're our general manager position is zero salary." Do you think he'll take the job? So these sorts of guys, they don't like to be in positions that are too heavily measured because they can't produce a result. So they need to be in jobs where it's like you know they're surrounded by others that might be able to do the job or. They're in a place where the measurement system is not so accurate. And of course, if they're paid purely on production, this is horrible for them. So if we look at a usual way we would bring someone into an organization, we can look at these 4 factors. Because normally, you know, someone's got to have some experience. You want them to have the right motivation, cultural fit. They need to have certain personality traits. that make them fit, and they need to have some sort of ability to produce the result. So the first thing we do when we look at individuals is we look at their resumes. And we get a big stack of resumes come in and look through them. Who's looked through a stack of resumes in their life? Me. Yeah, it's good fun, isn't it? And so you've got to have a system to flick through these resumes and decide you know, who is going to be a good general manager for you? I mean, how do you do that from a resume? Has anyone got any ideas? Experience? Yeah. References? Good.

How well the resume is written?

Yep. How well the resume is written. Yep. If they're, you know, for some people, is their surname Anglo or Asian? You know, there's, you know, there's a lot of different ways of screening. Personally, if the stack's really high, I like to just grab the top 80% of those ones and throw them in the bin. So then I just hire— look at the lucky people. That's a joke. So the thing is, so the first step is you should look at resumes and try and screen in and out. So if we go back here, from a resume, it'd be pretty easy to screen this girl or this guy in, wouldn't it? From the resume. It's like, because now we're looking at who's a better resume writer. Because, you know, a person can write anything they like on a resume in any form they want, and they can delete— they can omit things that they don't want you to see, and they can add in things that, you know, make them look a little bit better. So we look at the resume. Of course, then you have an interview with the people that you like the most. Check their motivation, like, you know, why do they want to come and work for you? And then usually have another, a second interview, because now you've, you know, you did 10 interviews to start off with and you get down to 2 or 3. In the interview now, you check more about their personality and check behavioral questions with them. And it can become, if you're not using it, it can become quite a laborious task. And if you use a recruitment company, it's like, well, really, what's their motivation in this whole thing? Do they want to give me the best person, or are they just going to give me someone that looks right so they can grab their fee? And so now you hire the person, and now you test performance to see, to see how well they produce in your organization. So your organization becomes a testing ground for your new staff. So, do you agree it's a pretty traditional model for hiring? So, if we do a mission-based hiring, the first step of analyzing anybody is to basically look at their performance. Not even look at resume, but analyze their performance, like how much value were they able to add to organizations in the past. And we have a very particular system of doing this, and this is what we cover in a separate seminar and separate training. That's the training that Linus did first with us. And so from this perspective, it's like our first filtering point is like, were you able to add value to organizations in the past? And there's a very simple interviewing technique or even an online questionnaire that can go out that basically like goes, okay, This person we're interested in because they can kick goals, and all these other people we're not so interested in because they can't demonstrate how they've been able to kick goals in the past. Because if I was a soccer coach and I wanted to hire a new team member— that's so funny watching you guys eat and trying to be quiet. If I was a soccer coach and I wanted to hire a new soccer player, you know, that could kick goals. It's like, what would be the first question I would ask this soccer player? Yeah, how many goals did you kick last season? And if I asked this soccer player, how many goals did you kick last season? He's like, oh, last season, last season, last season I had a knee injury, so, so many games. Okay. The coach asked, well, what about the season before? Ah, the season before that season? Yeah, well, we played down in Eastern Victoria, and you know how much it rains down there. It didn't stop. Every weekend it rained. And, you know, hardly anyone kicked any goals that season. So, yeah, that season, not so good to ask about. Okay. Well, what about the season before that? This soccer player, he's like, aha, I'm so glad you asked about that season. That season I would have kicked so many goals, but the team wouldn't pass me the ball. So what do you think the coach is going to say? Next. It's like he's not interested in this person. Doesn't matter how enthusiastic he is. how good he looks or anything. It's like, this guy can't kick goals. And so, this needs to be the first check all the time. It's like if someone wants to come and work in your organization, the first thing to always look at or ask them is, well, then show me how you've been able to add value in the past. Their resume is really— and their experience, everything else is a little bit Inconsequential at that point. Of course, if you need particular training or skills, it's like, you know, you may need to check those things are there. But it doesn't matter how good their knowledge or their motivation or personality is. If they can't demonstrate they've added value, they're really useless to the organization. And that's what you find out when you go this way, is you find that out 6 months or a year or 3 years into the job. And it's a very expensive way to test candidates. So then once you know the person can add value, now you're interested in their personality. And you should have some sort of system of testing or analyzing personality so you know if the person fits your culture, fits the job, you know, they're going to stay or how long they're going to stay for. You need some system in that. And then From here, you can screen the results. If the person's personality or their production personality is too low or doesn't fit, you can reject. If it does fit, now you can start the harder work of, you know, looking, interviewing, and looking at resumes. So of course, motivation, you need to learn to interview. You can check experience. Checking experience and knowledge is not so hard, is it? It's like in most jobs, it's not that hard to check knowledge and experience. The thing that is the hardest to check is actually this first point of performance, is really knowing if I've got someone here that's really good at bullshitting me, or if I've got someone here that really actually can add value to an organization. And what we also know too, that if a person has got good production record, if the person's got the right fit for the job and the right personality traits we require, they're motivated for for challenge and they're motivated by accomplishment, that the experience doesn't matter so much. It's like these people will pick the experience up quite quickly. Because I'm sure you've hired someone before, and in fact, I'm sure you yourself have gone into different roles where you've had no experience. One of them would have been starting a business. I mean, how many people here did an MBA? Did you do it before you started your business? You cheater. So here it is, you go start a business and you've got no training in it. So if you were hired to start a business off your resume, would you have been hired? No. No, you would have sat in the interview and they go, ah, I see you've never started a business before. Sorry, we need people that can start a business. But all of you have proven you can actually accomplish that role. You can add value, you can start businesses. So As much as it takes a lot of knowledge and experience to be able to start new businesses, most people who start new businesses don't have that credential. They have the first 3 in. They're motivated, they want to start the business. They've got the guts to start it. They've got the right personality to get out there and take a risk. And they're obviously quite productive because when you go and start a new business, you're only paid based on production. So, you know that I've got to be— I know I'm productive, so I know if I go out and take this risk, at some point I know I'm going to get some money come in and reward for it. And we need to hire in, especially senior executives, need to come into our organization on the same rules that we're on. So, let's look at the 3rd principle. What we call the mission steps. Because to be able to do your mission-based hiring and mission-based strategy, we need a few things in place. So the first thing is just a simple strategy. The strategy is going to be so simple that you can actually fit it into a job ad. All right, if the strategy is more than like really 2 or 3 paragraphs or a couple hundred words, I think you should simplify your strategy a lot. And you've got to realize that split out the technical plans. And in actual fact, you know, the technical planning maybe even shouldn't be your job because it's like, you know, I don't think, uh, MacArthur during World War II wrote many tactical plans, but he definitely wrote lots of strategies. Assess your readiness. There's a formula. If you're gonna— let's say you do hire a general manager on zero salary. Do you think they'll want zero salary forever? Do you think they'll want no money ever? No. So if you run a volunteer organization, the Red Cross or something like that, maybe, because the motivation is different. But if you're running a for-profit organization, eventually people want to have some exchange, and not just the sense of accomplishment or the sense of being a part of a successful team, but they want money as well. And so simply put, and we'll look at this a bit more in detail, if you need to be at a point where you can reward— if you put someone in your organization on low or no salary, you need to be at a point where your strategy will allow them to earn More money than they normally would if they came in on a salary. Does that make sense? Yes. Obviously, you've got to prepare the mission. And now, if you're going to go to the market, you're going to have to start to go out there and say, right now I'm looking for a general manager. And you need to put out not a sense of, we're a really successful company, but a sense of, we're a really tough company and we have tough targets. Because the most productive people actually look for challenge. They look for something that's not easy. This comes down a little bit to actually, like, you know, what makes people happy. Because generally someone that sits at home all day and watches TV is not so happy, are they? No. Someone that actually gets out in life and takes on challenge after challenge after challenge and they accomplish them and take the next challenge and accomplish them and take the next challenge, it's like they're a person that's fairly happy in life. They're usually satisfied. And so, happy people, whether they know it or not, are always looking for the next challenge. And we've proven this over and over again just by the way we put ads on the different job boards. The type of different ads that have different wording, what sort of people they attract. Also, you need to talk tough. Never ever sell this position. In fact, never ever sell any job to anybody. Quite often you can be sitting opposite someone you really want to work for and you start to say, I mean, you're going to love our company. We are the best company. We've got these plans. We have this technology. We have this. Come and look at our office. And you start to sell the job. And pretty much, at that point, firstly, you may lose the person that's actually really productive. Secondly, it's like you can actually be, to some degree, lying. Because it's like when we start to sell, we normally gloss or embellish a little bit and we sort of leave out the part where actually right now we're— You're thinking in the back of your mind, I've got no money, or I can't really afford this guy, or whatever else. It's like you're a bit scared to say the truth, those things. But funny enough, when you hire senior people, really anyone, it's like the truth is amazing. It's like you see the person sits there and goes, I can't pay you any salary. Why not? I have no money. Really have no money? Oh, why is that? Well, this is what happened, and we had this happen and that happen, and you know, I realized that I'm not the person to be running the finance in the day-to-day. That's why I'm talking to you, but I can't pay you, probably. You know, this person starts to get interested. Wow, can I look at the financials? And this is how you want someone to come on board, someone who wants to come and help and be part of your mission, part of your strategy. So advertise tough, talk tough. It's like when you talk to a person, you nearly need to list out before the interview, before you talk to the person, go What's everything horrible that I do to other people? What's everything horrible about my company? So, who here has ever yelled at another staff member? So, in the interview, do you tell the person, it's like, I just want to let you know, I sometimes get angry and I yell at my staff? Is this something you say in your interview? No. Hey, what's that?

It's a crying thing.

Yeah, but you know what, you know, say these things. Say, you know what, I can be really— I get really upset sometimes. I'm going to yell at you. In fact, I've actually yelled at a staff member once and they started crying. I just want to let you know that. I don't want you to come and work here if you don't understand this. I don't want to lie to you. And I want to let you know that the guys in the office out there, they swear a lot. And, you know, go through, list all this stuff out because you don't want someone coming to a job and it's like 6 months later, they're like, oh, I can't handle it here. I didn't know you yell at me. And you won't even know why they're leaving. They'll just tell you they've got another job or it's not for me. But it's much better that you tell them everything about it, and then 6 months later they're going, it's actually not quite as bad as Gareth Holman. He's only yelled at me 3 times. And of course, if you're going to hire a general manager, It's like part of the tough talk is like, look, I'm going to hire you in and I'm going to expect you to get all the results. And I'm probably not even going to help you. I'm probably going to trip you over quite often. And when you need my help, I'm probably going to try and stop you. And when you need this bit of information, I'm probably not going to want to let go of it. And when you want to change something, I'm probably going to like fight like a bitch and try and stop you. Because this is the truth when a general manager comes into a founder's organization. It's like I'm going to adopt my child to you. And so it's like you need to go through these things because the person sitting there, it's like they can probably do the job really well if you're not around. But the problem is you're going to be around. And I'm sure for those of you that have hired general managers, it's like you know what I'm talking about. And of course, When we're screening, as I said before, we need to screen these people for results. And then we need to put together one mother of an employment contract. And it's pretty simple. It can just be really one page, which, you know, well, here's the mission and here's how you get paid by accomplishing it. And, you know, so it doesn't need to be complicated, but it definitely needs to be very explicit. We'll go through that a little bit later. Now, an interesting thing is when you hire senior people, if I'm going to say to you, look, I can only pay you $100,000 a year, right, which is really low end for a general manager, especially if it's a larger organization, then they're probably coming off maybe a $200,000 salary, it's like we're asking them now to invest in your business. So they're basically going to invest. Let's say over 3 years they look at the deal and over 3 years they can make $700,000 in salary and bonuses, but they're only going to get $100,000 a year. They need to look at, well, I'm really making a sweat investment. I'm putting in my time and getting less money. So effectively, in the first year I don't get $100,000, I'm investing $100,000. So they need to come and do their due diligence on you and your company and go make sure that you're not really leading them astray. So in the hiring process, it's so important that firstly they should ask this question. You should never offer them. If a person— if you get a general manager that's earning $200,000 a year, you say, man, I'm only going to pay you $70,000. Great, where can I sign up? That would pretty much be the end of hiring because the person you want to hire would go, okay, I really love the concept. I really like you. I've looked at and researched your website, but now what I'd like to do, can I see your financials and see— I want to learn more about your company before I make this decision. And sometimes the process can be That person coming and even working with you for a week or a day or longer before they'll make it, they'll really commit. They want to get all the information together and work out in their own mind, is your strategy achievable? And if it is achievable, will it create the profits and the milestones that will trigger my bonuses? So it's probably a little bit tougher and longer process, but this process done right means that it's like now you have someone that's like a lot less investment for you. Because if you're going to pay someone a high salary and bring them in, it's your money you're investing in them before you get a return. If it's their money they're putting in, it's like it's really important they get a return. It becomes their big problem if they're not Producing the results. It also means if they're not working out, they will leave a lot earlier. If they see after 6 months that they're not achieving the targets, they'll be like, hey, Gareth, it's not working for me. Okay, okay. When you're paying them a big salary, it's like they're not in such a rush to get out. Oh yeah, look, I reckon within another 2 years I'll probably have it right. Really? That's going to be another $400,000 of salary for me. So the due diligence step is really important. And of course, then I'll start. So let's look at one step here. Let's look at, say, the ad, because the ad will give you a good idea of how tough you can be. So this is a traditional general manager ad from Seek. And Seek is really expensive to advertise on. Wouldn't you love a website where everybody pays the price of a website for one ad? So of course, because we pay so much money, we want to get our value and write a lot of stuff. And generally the ads start off like this one does. It talks about the company, well-established leader. You have the usual blah, blah, blah, and then it goes into how it's an important role and how the key things to do in the role. So it's a very traditional ad. And general manager ads are one of the most popular ads. If you place an ad for general manager, generally you can get 100 to 200 applications. It's a very popular job. Because there's a lot of people that, you know, there's pretty much for every general manager, there's like, you know, usually at least 1 to maybe 10 managers just below them that want that job. And so, you know, until that general manager that they're working with leaves, they're never going to move into that job. So it's interesting that even people that aren't looking to leave their job are quite often looking at Seek or other job boards to see, are there other opportunities out there? Because even though I like it here, it's like My next step could be 10 years away. So if we look at a usual ad we looked at compared to a mission ad, I'll read this out for you. This is an idea of an ad you could place for a general manager. Your mission— this is the first 2 words of the ad— your mission as general manager of our business will be double sales and triple profit over the next 3 years while extinguishing debt. Don't you love it? Beautiful. And I can tell you one for one, when people are placed off these ads, it's like you go, hey, how come you applied for this ad? Oh yeah, why'd you apply for the job? Sorry. And they're like, oh, your ad really intrigued me. It was like it was just straight to the point and You know, I could see that this was going to be a no-mess-around job. The next one says, it will be quite tough as many things need to be sorted and implemented to see the mission attained. And you can say, like, this can range from, like, you know, extremely tough to very tough to tough to quite tough. But the wording will change a little bit. So if it's, say, if it's a general manager to be the first general manager in an entrepreneur's business, it would normally go extremely tough. Because let me tell you, they are the toughest roles for general managers, is to come into, you know, a family business or an entrepreneur's business and start to take the reins. Salary not so high, with rewards for attaining the agreed results. And sometimes it can be like salary, very low salary, or no salary even. It's really interesting because sometimes people will apply for the ads or write back and say, how dare you place an ad saying it's low salary? And we're like, yes, another one that didn't apply, perfect. Because salary, if salary is a motivator for a job, it's like, firstly, what you have is a fairly unhappy person. Because money by itself is like the lowest form of motivation. You know, you could say duty is the highest form of motivation. You know, if you look at a guy that joins the army and packs his bag and goes over to Afghanistan, it's like this guy's not really money motivated, is he? Because I don't know if he could pay me enough to sit there. It's like, even if I paid a million dollars, like, no way I'm not sitting in front of those bullets. Yes. Yes. Yeah, I mean, you look at Seek. Seek's one of the most visited websites in Australia, and I believe you probably know better than me, but it used to be back going back 5, 10 years ago. But it does, it gets a lot of hits every month, and a lot, they get a lot more hits than they do people applying. So we know people About ten times the amount of people that are looking for jobs are perusing seek every month. And so what we want to do is we don't see we don't necessarily want to pick up people that are applying for jobs. We want to pick up people that are just looking for a bigger and better challenge. You will need to have a verifiable past of creating growth and efficiency. So this pretty much— this line in itself, because this is our first point of screening, would you agree? So this line here cuts out anyone that's gone, oh wow, the last 3 companies I worked for, they've all shrunk. It's going to be a tough one. If this type of mission— if this is your type of mission, apply now to get more information. And like I said, this role here, the general manager role, very popular. This sort of ad will attract maybe 100 to 200 applications out of it, which means there's a lot of screening. And out of it, we may get 3 or 4 people that are sort of interesting to talk to. And if you're screening by resume, it's a lot of work. If you Even we screen with our system, which is not a lot of work, but once we get through all the screening, which might take an hour or so, there'll be 3 or 4 people come through that go, okay, sort of interesting. But they also could be quite expensive. So when you talk to them, it's like these guys, the best guys that come through might want $200,000 a year. And when you talk to them and go, oh no, but it's really low pay, we can't afford that. Oh, well, okay, not interested. This one here might only get 10 applications, but out of them, quite often, you know, 8 out of those 10 are people, every one of them better than all these applicants through here.

Yes?

General manager? No. General manager, it's like quite often, and I say because there's never an always when it comes to staff. But quite often it's like you're better off not having them industry-specific, because if they're industry-specific, they tend to drop down the organization to handle things sometimes. You just want them— the only skill they need is they can grow things at this early screening point. So that's why in the ad we don't mention the type of industry. So of course, if someone comes in and they're, let's say, going to be general manager of a construction company, and they come in and they've got lots of contacts You go, oh, that's interesting. But generally it's like you don't want industry-specific. And so if you need— there's actually a whole science to writing ads. It's no different to marketing, writing marketing copy. There's an exact science to it. And so this is not the sort of ad you would write if you're looking for, you know, a coder or something. Because you write this to a coder, they're like, ahhhh. But in actual fact, you could write to a coder and say, you know, we've got a mission to create some code that's never been created before, and this might attract the best coder. Like, really? You know, you've probably heard of a company called SpaceX. Have you heard of that company? No. I think one of the great entrepreneurial successes. Like, here's a guy, you know, designs, sees designs up a bit of a better rocket engine, and instead of selling the technology, he goes, you know what, I'm just going to build my own freight company and then NASA will buy my freight from me. It's a pretty cool concept. But, you know, you see the way he does his R&D. He creates a competition every year. And so all the best people, they earn no money and do all this research and development to win this prize. And so, you know, they have all different categories for speed of rockets and efficiencies and that sort of stuff, and they all gather together for a convention, and then he just gives big prize money out for the best one. In actual fact, he just bought himself like $100 million worth of R&D for $5 million. And so, you know, money is not the motivator. Challenge is the motivator. So we talked about readiness before. And so once we know what needs to be achieved by the GM, which is basically here's the strategy, start. And you know what, there's GMs out there that they're good enough that you could only go, here's the strategy. It's like, I'm actually not going to be here for another year. So when I come back and you just have it done, you laugh. It's not real for you. But see, whenever I have that thought that that's not possible, well, then I look out the window of the airplane again and go, you know what, I didn't build every one of those buildings. I didn't project manage every one of them. So someone else must be out there that's better than me at doing that. So we need to have what needs to be achieved. Obviously, you need to put in some sort of milestone. Now, occasionally, we help companies out that actually need to be rescued. You know, they've been losing a lot of money, losing hundreds of thousands, millions of dollars a year. And it's like, Because the founder's still in there, or they have the wrong GM or the wrong executives. So when it's a rescue, it's like, you know, quite often the first milestone is like, okay, let's make a date, an agreement on when the company's going to be profitable again. And also what's interesting is there's people, there's general managers out there that specialize in rescuing. It's like once they've rescued a company, they get bored. So, you know, this is a very interesting point, is that as a business changes, you really need to change the management people in the business. Yeah. Because you're the first manager. You get in and you get the company started and you do all this work and it's like it's growing like crazy. And then there's something that you're either not good at or don't like doing. I don't see many entrepreneurs that just love that. At night, they sit down all night and write job descriptions. Like, yeah, I can't wait. In actual fact, if you want to move to the next level, that's what you really need to do because you've been holding every job description, every job, and you know every job description. So then, you bring in a general manager and they start doing all that stuff and the company grows quite rapidly. But companies can't grow at 100%, 200% per year every year forever, can they? No. Well, maybe they can, but it's not— I don't think I've seen it before. They get to a certain point where they can only grow at a certain amount because they're so big. And so then now it takes a different manager again because you've got you, the entrepreneur, the startup. You're like the seed sweat, not the seed capital, the seed sweat. And then you have the venture sweat. This is your next general manager because they come in and they get it to that next level. Now the company is running at a point where now it needs maintenance sweat. It needs a general manager that comes in and doesn't like to change things, doesn't like too much adventure. Because now the company is so big, it's like there's no longer a jet ski. It's now an oil tanker. So I need to plan out and know I can't turn my ship. I need 3 miles to turn it, not 3 centimeters. And so you need a different type of general manager again. And so when you're building a business, there's really— I don't think there's such a thing as hiring for life. Hiring for life is, you know, Procter& Gamble. They hire someone, they go through school, they love art and different things, and they go to university, so they do marketing, and then they go into Procter& Gamble and they become a marketing internship, and 43 years later they pick up a gold watch from Procter& Gamble. Imagine you hire this person into your business to grow it from 2 staff to 100 staff. They can't do it. It's like, this is not the person, is it? You need the Procter Gamble person that went to China and started the China office and within 2 years took it to 2,000 people. This is the guy you want. But when your business is at 1,000 staff, you want the other guy. Does that make sense? Because now you can't go and do stupid fast things and quickly correct them in a large organization. So anyway, you need your milestones set out. Now, you can't always work out the milestones. Like if it's a recovery, the first milestone, let's just get it profitable. Let's just cut the losses. Milestone number 1, usually during the due diligence process, because during the recruitment process, you don't want to share your plans too much. Just show the strategy. If you've got 100 technical plans, don't show them because it's like, you know what, this guy might have better ideas than you and better plans. Plus, you want to see what his ideas are. So, if you feed him all your ideas and all your tactical plans, or her of course, then it's like you're not really learning about this person. And, you know, you might hear their plans and get your tactical plans and quietly just put them in the bin. Okay, good plans. So, really, the first Milestone is normally like the first thing. It's like fix the hemorrhaging, or after the first 2 months is a total review and all the tactical plans put into place. Because if you wrote tactical plans and you enforce the tactical plans onto this new general manager, you're stopping them doing their job. Because it's their job to come up with tactical plans. Of course, you sign them off. You can have input into them, but it's got to be their plan. I remember reading a really cool book called Bravo Two Zero. It was about these British SAS soldiers that were dropped in the middle of Iraq and they got stuck there during the first Gulf War. It was a very cool book. The thing I mostly learned about that, apart from enjoying a lot, But here's a guy who, he was like a— I can't remember his rank now, but maybe he was a sergeant or something, and he had a team of 5 guys. And some colonel came to him and basically goes— because he had this plan, or there's a strategy where they had to cut off— these missiles were coming down this road all the time to come to the border of Kuwait, and they had to basically go and destroy the road and cut the communication lines to stop These missiles going along from the north of Iraq to the south of Iraq. That was the tactical. That was basically the strategy. And so they went to this guy who was the sergeant way down. The guys want to go out there and they go, "Okay, we need your tactical plan about you know by 0400 tomorrow." And I was amazed. I was really amazed because at that point I'd sort of done everything for everyone in my company. And I thought, how come these guys that They're the guys that are going to do it. Why are they writing the tactical plan? And then the tactical plan was just so detailed and perfect, of course, because if they get the tactical plan wrong, what happens to those guys? They die. And that's where it's like, don't take away the power of your new manager that comes in. It's their job to create the tactical plans. You can be involved in it, but it's like you're a consultant or you're a subordinate to them in that process. At the point of when you need to approve the plan, now you're their senior again. Does that make sense? So you need to change hats. Because as soon as you enter in to bypass them or start to do their job, it's like not only can they not do the job, now you've got the job back again. And when something doesn't go quite right, it's like, you know, it's hard to know who's responsible for that. And on the other side, if something goes really right, who's also responsible for it? Because if you're the owner that goes back, go, yeah, see that idea I gave you in that plan? Hey, look what it did. And maybe you just disempowered the GM again. So now you need to know what the value of those improvements and milestones will be, because if you can value them Now you can start to actually work out what you can pay or reward this manager, general manager for. Generally, it depends on how hard the mission is, how young the company is. But generally, as a rule of thumb, you will normally pay them as much as 20% of the value they add. Alright, but it can be a lot more. If you're bringing someone in, let's say I've just started a— I've just started my new shop. It's been open a month and the sales are going crazy. So I hire a GM. It's very early days. So when I go to this GM, the mission is to get 50 stores open within 2 years. Quite often, if the GM at that point— some of them will actually even ask for equity if they make the target. You know, they might, you know, so because it's— and they deserve it. Because if they come in and you can basically go off and do the thing that you're best at and they can build the business, it's like, you know what, you would give them a good chunk of equity. They become your partner. And so quite often we do this process when we talk about and get to the contractual stage with the owner, owners, and the GM. Quite often the discussion is about the GM wanting to come in and be a partner or take shares in the business. And, you know, I don't think it's silly to consider it, but they've got to prove themselves. It's not— it's never the cart before the horse. Yes, the real value. Well, yeah, the value could be profit, but it also could be business value as well. Because if someone comes into your organization and takes it from a shop that's been open one month, what's that shop worth to sell? Zero. Zero. You know, you may be able to sell the hope of it. But if this person comes in and they get 50 stores open and they're all profitable within 2 years, it's like the business might be worth $20 million now. And so part of it might be that it's like, you know, they do have some options or they'll get, you know, that might be part of the package as well. You can be really clever with it. That's why sometimes you won't even be able to— sometimes you can't work out the bonuses and commissions sometimes until the tactical plans are done. And so in their initial contract, which you could say is more like a heads of agreement, it's just the rules on how this has worked out. So you'll say, look, basically, what I don't know exactly what the milestones will be. All I know is this is my strategy, and even that's up for grabs if you come up with a better idea. But just say, like, my idea is that it's like, you know, you can take 20% of the profit improvement and 5% of the value of the company improvement. And then, you know, that's sort of what I want to have in mind. And I'm— I've done some rough figures here that if you can pull these things off, then it can basically— this is the sort of rewards that, you know, you may be able to produce for yourself. And notice the language. The rewards you can produce for yourself. I never use the words we when it comes to these interviews because it's not a we, it's a you. Am I being a bit harsh? No. Also too, and it's so important, and this is in any job but especially at this level, it's like you've got to have the conversation, even put it in the contract to say, No matter what the excuse, no matter what the reasons, unless it's a natural disaster, it's all your fault. Basically, it's like sales in, it's you. If staff leave, it's you. If no one wants the product anymore, it's you. Because you can't have excuses, can you? That's why I'm hiring. So I have excuses because I own the business. I can make my own excuses. It's my money. But you know what? Now this guy, I don't want excuses. It's like you're hired to take care of these things. So there can be reasons why things happen, but you don't want to sit there a year or 2 years later and go, oh, you know, my bonus, it would have been this much, but the market changed, so I lost out. And that's why I think I had it in there, you know, I hired you to help predict these things. So also too, it means that if you do If someone doesn't make their target or whatever, and you've got really strong language around that, that it's like, you know, the target's a target, there's no reasonableness, and it's all your fault. If you decide to give them extra, they can see that it's you giving them extra. It's not them deserving something. So it's truly a bonus. Because really, by definition, a bonus is something you sort of get out of the blue. You don't expect it. Would you agree? So when you actually put in and say, here's your bonus structure, it sort of took away the idea that it's a bonus. It's really more of a production-based structure. So it's always nice to have something in your back pocket, a bonus that you, in your own mind, you go, if they make this, I'll probably give them that. This will be their bonus. And I think it's always nice to surprise these, anyone in your organization with a bonus. Why, you know, If someone expects a Christmas bonus every year, they don't get it one year, they hate you. They don't sit there and go, wow, I love my boss so much for all the past ones. They go, no, I hate you for not giving me this one. Then it's always good to model a possible worst-case and best-case scenario. And the worst-case scenario is really easy because the worst-case scenario is just their base salary. Which could be zero. And you always got to put that scenario to them. And you'd ask them the question like, hey, if we get down to 2 years down the track and we're at worst-case scenario still and you haven't earned any money, are you going to be able to— can you financially afford it? It's a little bit like when you want to go to America for 6 months. It's like, hey, we want to see if you've got enough money to live here without working. Because it's also part of really checking the person out is you want to know what's their financial situation. If they've come from working on $200,000 a year salaries and they can't work for you with no money, it's a little bit weird, isn't it? Don't worry if you're an entrepreneur because entrepreneurs usually never have money. Because as soon as they get money, it's like, what's my next idea I can go waste it on or blow it on? That's why entrepreneurs need general managers that basically Keep the money safe for them. And it's a really good point too, is just because you have a weakness, it's no reason to expect they have that weakness. In fact, if you have a weakness in an area, they need to have a strength in that area. So one of the things too, when you look at your strategy, is the strategy is always handling some sort of situation. And, you know, hopefully it's always a growth situation. You want to grow, you want to be more profitable. Sometimes it's handling other situations as well, or there's a reason you can't grow as fast as you want to. So it's either that you work too much and you're the only resource, or it could be that you're just bad at managing money. It could be that you don't sell so well, you're not a good marketer. And so when you're looking for a general manager and you talk about industry-specific, let's look at skills-specific. Because if you're not a good marketer, let's say your organization relies on social media, or, you know, if the social media worked really well, it would basically, you know, it will be the answer to it. Then it'd probably be smart to, you know, if you look and go, hey, this guy grew an organization by implementing a whole social media strategy and at work. So you know what, this person is probably going to be more suitable. Not the person, it's just one of the things to weigh in. But look at your weakness, or look at what you like doing most and you don't like doing. And you know, just because you don't like doing something doesn't mean that that person doesn't like doing it, because every job out there, every job that exists in Australia is the perfect job for someone. So think of the very worst job that you would hate to do. That's someone's dream job. So don't be scared to just have that discussion and really put it there as part of the tough talk. I want you to know, it's like, you know, I hate getting out of bed early. I hate, you know, I don't like this, I don't like that, so I need you to be the person first then and there. Go through all that stuff. Get it out on the table right in the beginning. Yes. Sure. It's a fairly broad question, but my answer would be that generally you can measure everything in some way. Because if what it does doesn't contribute value somewhere that can be measured, then it's probably not a really necessary job, or you're just not seeing the value it adds. So it's a matter of brainstorming, like how— but this is the This is what I do, this is the result it creates, and this is somehow— there's always a way of measuring that value. But if you want to give me the specifics though, do you have the specifics on it?

Well, you know, you can see things make some achievement with a particular product or a certain platform. Okay. You can see that the problem is really in curation, so then you use the results tool.

Okay, yep.

development, but one of the main roles in the building is actually doing the programming of all the playlists and everything like that. Yep. To allow me to work on a few other areas.

Yep.

So the programming is something that's integral to our people because it's actually like the sort of client habits and stuff that actually— that they're already used to clients being involved, you know.

Absolutely. And so this person's titled general manager, are they? Of curation. Yep. No, that's cool. Yeah, well, look, you said it makes the customers happier, right? So if the customer is happier, what financial effect does that have? Absolutely, but if they're unhappy, will they stay on subscription? Yeah, but there'll be some way to see if he's improving it, either by survey, which is always a little bit tough and clunky, or just by looking at, you know, subscriptions, sustained subscriptions and new subscriptions and subscriptions that fall off. I'm sure you can measure it that way. And then if you give him— is it a guy? Yes. That's your measurement and I'm going to reward you off subscribers that stay, then you can actually penalize him for subscribers that fall off as well, then it's like then he really has something to focus on. So his playlist will become focused on like how can I make subscribers stay and he actually should go out now and survey and go hey, why do you stay on subscriptions? He'll research it more because it's his role now to make them stay. But at the moment, it's probably your role to make them stay, isn't it? It's your responsibility. Yes. Yes, so maybe even changing his name to General Manager of Subscribers. I don't know your business, I'm just throwing maybe dumb ideas out to you. But every person needs to have an exact result that's measurable that they work for, and whether you pay them any differently for it or not, At least you know when to pat them on the back. At least you know when they come and sit down in front of you and I want to resign, you're going, do I want to save you or let you go? And you could say it's like, you know, management by statistics, management by mission. Does that help? Yeah, absolutely. If you can't quantify his work, it's so tough because this guy could even be doing a whole bunch of stuff that if he wasn't doing it, maybe the business goes better. Have you ever had that, that someone leaves and everything goes better? Uh-huh. I haven't replaced them yet, but it's better. Pleasure. So basically, these steps go through and just work out, you know, is the business— it should say actually, is your plan viable for your business? And, you know, I'll challenge you that it's actually never a wrong time to hire a general manager. Because if you can't pay any salary, it just means that your idea needs to be more solid. People will buy into ideas, not buy into hope. The further down your rollout and maturity your business is, the easier the process might get. But I say might because if someone comes in and loves your idea, they go, hey, I'll come, I'll push this, I'll work for nothing because I can see that this is going to go places. I love what you're doing and this is the reward I think I would like to get out of it. So, if it's not, if it doesn't work, then just rework your strategic plan because let me tell you that if you plan out, and I'll show you a little bit of a detail how we do this, but if you plan out into 3 years into the future and it's not viable to put on a general manager, Then maybe, you know, you shouldn't be the general manager either. Does that make sense? If you can't make it work in your business for someone else to come in and over 3 years earn a really high salary, then it's like your strategic plan is probably not so solid. Because as much as, you know, we all love the challenge of starting up our new businesses, it's like if we don't finally get financial reward out of it, it's like it's It's depressing. It's like we don't have the score. It's like, yeah, I have 7 businesses, but I can't afford a new car. It's just not right, is it? And so rework this because if you're working in a business that in 3— over the next 5 years can't generate $500,000 in profit after it pays you, then either you've got a really good long-term plan or you'd like to help people. A lot and not get paid for it. So basically, you'll know whether you're ready or not. And it's really those calculators we use, we have little templates and stuff where it just really simply goes through like, you know, sales and costs and— got 5 minutes? It just goes through the sales and costs and it's pretty simple to just fill out. We think so anyway, but a lot of our clients have to sit down and spend a lot of time with them on this. Because you just look at, okay, what are the sales types and what can— what will they be? What were they for the past financial years? What will they be? And I'm sure a lot of you have done this sort of planning already. And then just a little reason, a basic idea why those sales will increase. There's no point just putting, yeah, we're going to double sales, but why are you going to double sales? Like, what's your idea of the tactical plan? You may have a very detailed plan, but for some people, they go, yeah, look, I know it'll double because we doubled it last year. I know that there's these new distributors in the pipeline, and we're going to put another sales— there's an idea that backs it. Not just, yeah, we're going to double in sales. How? I don't know, just because it doubled last year. How did you double it last year? I'm not really sure. Because again, when the GM or the prospective person is buying into this, they've got to see that, okay, there's possible. And the same with your margins, the same with your overheads, because these are all things that can be affected with efficiency and marketing and better sales and product development, all those sorts of things. So Obviously, when we screen, we went through this before, the hiring. One of the things to help speed the process up, especially if you can get like 50 or 100 applicants come in, is you want to write to them. And it's pretty easy now because you just do an automated return email. But basically write to them and tell them more about the job. So when a general manager or anyone really applies for a job, you should write back to them. We call it a scary letter. Because generally what it does when you get applicants write in and you send them this letter back, it scares off somewhere between 40% and 60% of the candidates. They don't continue. They exclude themselves from it. Now, if you have— if you've got pretty demanding production-based pay systems, it's like you could scare off 90% of the people. And so you don't want to deal with people that aren't interested or aren't interested in backing themselves. You don't want to scare off too many people either. So, getting these right is really important. And quite often when we put in— we were doing a hiring or we were partnering with one of our clients. He was hiring a new general manager and in the scare letter it had— he was an electrical company turning over multi-millions of dollars, losing money hand over fist. And one of the issues that he had was like his billable hours were 70%, which means out of the hours he pays his guys versus the hours that he's billing his customers, there's a 30% gap. So we put this in the ad saying billable hours are currently at 70%— not in the ad, sorry, in the letter we sent back to the GMs. Billable hours are currently 70% and they need to be up to 105%. That sounds a bit odd, doesn't it? How do you do 105% of billable hours? But see, for the right person, they'll understand straight away. So some people are writing back going, are you guys idiots? How can you have 105%? But the other guys, it's like when we sat down and talked to them, it's like, yeah, look, I've had a service team at 115% before. It's like straight away they're into it because 100% is never the max. Go more. How you go more is just charge callout fees. Do 4 callouts a day, there's 4 hours plus your hourly rate. So you charge another hour, you've got 12 hours, you pay, you pay, you've got 8. So you just made 150% on that. So people understand service businesses straight away, you can see that. So we go in, in quite some detail for these jobs in a schedule. We'll go through the numbers and a little bit of like what's got to be fixed. So Just to recap for today. So I think the most important point of today is you need to hire people based on challenge or mission. And it doesn't matter where they are in the organization. It's like it's a different degree of challenge as you go down the organizing chart. But people, people that are motivated for challenge and motivated to see something get improved Or become bigger, you know, or to be solved. These are the people you really want to have in your organization. The second thing is, it's like, just because you don't have enough, you can't afford to hire someone, is actually not true. When someone goes, I can't afford to hire someone, it's like straight away I go, you know, this is not true. You can always afford to hire someone. You may just need to be smarter with how you attract the right person and how you pay them. And the general rule that I apply, it's not a law, but as a rule, it's like the more risk the person takes, like as a lower salary, the more bonus or production bonus they can earn. So, you know, if someone's total salary, okay, $100,000. If someone wants to cut their salary to $50,000, it's like, now you might be able to earn $120,000. Okay, someone wants no salary, it's like, okay, well, maybe you can make $150,000 if you pull it off. So the more risk they take, the more reward. The less risk, no reward. It gets to that extreme. And as early as possible, hire a general manager because if you need right now a retail assistant or a store manager or any other position, it's like hire a general manager in. If you're running your business, you're the general manager and you want to hire an office Why not just hire a general manager? In fact, the general manager will probably cost less on salary than the office manager. So, you can bring someone in that cannot take just this little part off, they can take this big chunk off your plate. Now, you can go like, whatever you think you're able to expand based on your own effort, you may be able to multiply that out to the power of something. So, you can really speed it up and improve your quality of life and improve your work enjoyment because you can work on things you like. And the key to it is having a really screening system that makes sure you're screening in people that are going to be the ones that can produce the result and they're going to be the people that make the environment more fun and more safe, not more dangerous and destructive and you can't sleep at night because things are going haywire. So, do we have a question time? Or have I gone through that as well? No, you're good. I think we have a little survey as well. If we just hand that out while we ask questions, so just so I can get a little bit of feedback from you. But yes, you had a question. Interesting question. I haven't done a lot of rural hiring, but my suggestion would be without— I don't have experience, but this would be my suggestion. Whereabouts are you?

Wonthaggi.

Oh, yeah. Well, it's only a suburb of Melbourne now, isn't it? Wonthaggi. So my suggestion would be that firstly, just advertise it as a standard job Yeah. Especially senior jobs, don't tell people where it is. Do that when you actually talk to them or at a later point because again, if the challenge is right, you don't want someone to screen you out because you're in Montague. Because if the challenge is right and they like it, they'll move there or they'll make it work. So that would be my first suggestion. But the other side of it is when you're in a tighter market, you definitely need to be much better at managing your staff because it's like You can quickly build the wrong reputation or quickly run out of people to hire. I'm sure you've experienced this. What's your business?

Housing manufacturer.

Oh yeah, interesting. Must be a big production line.

Oh, we've got 50 people working there.

Yeah, that's really cool. What's the name of the business? Archiblock. Archiblock. So you're making actual— are they just homes or multi-levels?

Multi-levels.

That's really cool. So what jobs do you find hard to hire down there? In here? Management? Management. Yeah. Yeah, look, I think try that. Just try first stop. Don't put the location in and just get people applying because there's a lot of people that too, like, it's not— I mean, one thing is a nice area to move to. It's not too far from Melbourne. Yeah, if it's the right opportunity for someone, the right challenge, I'll make it work. The other thing too is you can make them contractual. Just tell the person, look, we'll just come there for 2 or 3 years. It doesn't need to be a forever job. It's totally okay for someone to use you as a career step because you're going to use them to make you money. But just have the conversation upfront because they might look at it, okay, I'll come down. Because if you try and make it a lifetime decision, it's going to be a lot harder for them to make that decision. And because you want to hire people who've got good integrity and they're honest and ethical, it's like, you know, if you don't have that conversation, it's harder for them to make the decision. They don't want to say, oh, look, I can only do 2 years or 3 years. Any other questions? Yep. Yep. No. Okay, so the question here, the question here is, what's your name? Lydia. Lydia wants to hire— I see some guys got to go. That's alright, guys. Lydia's asking, she's going to hire a sales assistant, would she make that a sales role or would you make it a general manager role? And my answer would be, you know, without knowing exactly your strategy, but if your strategy is to expand and have lots of something, I would make it a GM role. And about the persons that— Yep. No, no, that just really— thank you very much. That just really depends on how they roll out the tactical plan. So they may look at it and go, you know what, I need to go and build up the finances and build the sales and work out how that works, and then I'll document it, and then I'll start to build a sales team. Yep, absolutely. Yeah, but how many stores do you have? And so you're the store manager right now, right? Yeah, so no, no, it can still be the GM, but obviously for them to get out of the shop That's part of their tactical plan. So are you going to open more stores?

Not right now. Yeah, my previous company.

Yeah, so yep, still can be a general manager. So hire for a GM, use this system.

And still lock them in the store.

Well, you're not locking them in anyway. They're going to lock themselves in the store because that'll be the right thing to do. You see the difference? It's their tactical plan, not yours. You can go, look, I think that the way this will roll out because of finances and because of everything is you'll have to stay in the store, but you know, it depends on how you roll it out. So they might come in and go, oh look, I'll come in the store for the first month, but I've looked at it already. I reckon we get 5 stores open within 6 months. Look, he's my— he already did a technical appraisal. You know what I mean? People are there. Yeah, we've used a lot of different websites and formats, but Seek still has one of the best attraction and conversions for every type of media. It's the same rules in marketing. The more you put it out there, the more you put it out on Facebook and every other social media, the more people you're going to drag in and the more choice you have. Thank you for the welcome. Ah, cool. All right, good.