Episode 2: Building a Games Culture: How to Turn Your Business Into a High-Performance Team

One of the nice purposes to have with building a business is wanting to have a really cool team of people that you really like working with, that you want to take on your journey and make their lives better as well.

Well, sometimes if you hire the wrong person, they're working against you. Any advice or ideas or tips to listeners?

Look, just what I said before. You know, it starts off with deciding to play a game with your business because, you know, as much as business is about everyone has their different purposes and passions why they want a business.

You know, what would be the key? What would be one of the most

Well, the absolute key statistic is on your overall profit and loss is your cost of labor, you know, as a percentage of sales.

What are some KPIs to really look at?

So I think—

How do you really know as a business leader if we're doing a good enough job with our hiring?

For me—

Today's chat is all about transitioning your business from being a place where people go to do a job a productive, fun, and safe space, creating a playing field where you and your team can tap into a whole new league of energy, motivation, and drive for success. Hey Gareth, so we're back with a new episode, and last time we talked a lot about Moneyball, different ways of hiring, some challenges that businesses face, which makes a really great segue into today's episode. We talk a bit about sort of this games culture, how would you define that first?

I think to define that, it takes a little bit of a story and, and, or, you know, pulling things apart. The, you know, it's always— it used to really, um, take up some of my thought was, you know, why do people— well, why would someone go and play sport, you know, is it voluntarily? So they turn up and they go to training and, you know, this was You know, I played team sport and individual sports. And I'd turn up, I'd train my butt off, I'd be exhausted. I'd have the coach would be yelling orders at me and then telling me that I'm useless some of the time and then patting me on the back and saying I was amazing. And I wouldn't miss training, you know, for anything. I'd make sure I was there. It's like it was a commitment I decided to make. And then I'd turn up to the game and, you know, and play the game and, you know, quite often injure myself. Um, you know, and, and I'd do all that and actually have to pay money to do that. And then on top of that, I'd volunteer to help out on, you know, pie nights and different things. And, and yet now running a business, I'd look back at that and go, it's like, why does it feel different? Firstly, you know, I have to pay people, which makes sense. You know, we all, we all need money to, to live. But I was like, why can't I have my business where people wanna arrive the same way that I want to arrive for sports? And then I also noticed that actually through my career, which I started when I was 15 as a full-time apprentice, it's like, you know, very quickly I went from just having to, or being exciting 'cause it's a new job, then going through like— Boring. Sort of having to pull myself to work because it, you know, wasn't that excited about it. To all of a sudden, I sort of learn enough to make it a game, like a sport, and then I just look forward and love to be at work. And then by the time I became a site manager at a very young age of 18, it's like the clock was nothing. It's like everything was about getting a project done, getting as fast as possible, playing the game of coordinating with other trades. And, and, you know, I was Working 70, 80 hours a week, and sometimes I was working at the max. I worked 70 days straight without a break, never exhausted, just didn't you know had so much passion, and that made my life so enjoyable because work was so much fun and enjoyable. And of course, I was getting paid good money as well without even ever asking for a pay rise or anything else, just because I was there. I was a go. I became the go-to guy without any conscious. Um, thought of becoming that person. And so when I was, you know, started running a business, firstly I thought that's how everyone would be, but secondly, you know, it didn't take long for me to be disabused of the idea. And then all of a sudden I'm sort of having to drag people along, having personnel issues.

How do you, how do you mean by getting disabused? Like, how did that come about?

Um, well, like, it came about because of the situation. It's like where people, it's I had the idea that, you know, I started business, I employ people, they would just have my same attitude. And for the first few hirings, which I think a lot of small businesses, it happens, they have— they get good people because they bring over the people that were similar to them. Mm-hmm. But then they've got to go outside of their contacts and they've got to go outside of their family members and the people that were really, you know, they work closely with and work well. And then they start having to hire the market at large. And that totally changes their culture. And so the real circumstances of hiring outside and bringing in just people that had the qualification experience, that's what disabused me of the idea that it's like everyone will just have this passion-driven, working like we're playing a sport to win the game every week. that idea went away. And so to describe a games culture, it's literally people that come to work to play the game of just getting stuff done as quickly and as efficiently as they can and enjoying the problems that come from that, enjoying the tough situations that need to be solved, enjoying seeing things progress, seeing that there's targets and going, you know, how can I just smash those targets out of the ballpark? And that's what a games culture is.

Yeah, and I think it's really important to get the workplace, you know, to be as far away as possible from that idea of I'm just going to get paid.

Yeah,

just going to do a job. It's like if you're at that— and look, sometimes, sometimes you have to— you're doing a job it's not your career job, it's not what you trained for. Maybe you're doing it because survival mode or something. But I think if you can still find that enjoyment out of it or how you can do it better, make a game out of it, it makes it still fun for you.

Yeah.

Even for that moment.

Yes. And look, I think it starts off, If a person has pride in, you know, in them, within themselves, and then they want to expand that pride outside. So they want to have pride in how they present themselves. They want to have pride in what their work looks like. They want to have pride in their targets. They want to have pride in the workspace they're in. They want to have pride in their house. It's like, I think that's a big driver. And it's like, you know, I know for me, it's like, I really, I love things to be in order. I love things to work efficiently. I love seeing other people enjoying themselves because of something I've set up. And, and that's all— it's that, you know, it makes me proud. And it's like, so when I see something that's not right, it's like, you know, first I'll look at it and sometimes I might get a bit frustrated or get a bit, you know, oh my God, this is not going right. But then it's also at the same time, it's what really gives me another problem to solve and something to jump in and keep moving more and more to this better and better, you know, different worlds that I build in my life. And then, you know, I want those worlds to become— be able to be better lives for the people that I'm associated with as well. And, you know, so, you know, I realized, and not so long ago, but it's like I realized, you know, I manufacture constant issues for myself to solve. And, you know, I used to always be like, oh my God, when's this ever going to be right? When's this— when am I ever going to have this right? But then I realized it's like I never actually wanted to be right because then I'll just— what am I going to do? What's going to stimulate me? It's like, you know, the champion footballer who's now, you know, played in 7 AFL teams and, and won 7 premierships It's like they go back to the bottom of the ladder because it's like they, you know, they're not interested in winning an 8th premiership. It was that easy. They want to go, let's see if I can do it from the bottom of the ladder.

Who was it? Was it David Beckham that—

Well, David Beckham in soccer, like, I mean, you know, he went and played. I don't know the full story. I watched the show on Netflix, I think it was Netflix, which was so— I loved it so much. But, you know, he went to LA, you know, this down-and-out team, and, you know, it's like you could just see he'd loved playing soccer. And it's— I don't think, you know, he loved— obviously everyone loves winning, but you could see that if he was winning easily, it wasn't fun for him. It's like, you know, and he loves the sport so much and he's giving so much back to it.

And it comes to challenge.

That's right. It's— and that's it. It's like, so if you want to have, um, you know, this team in your business, it's like a sports team where everyone's high-fiving and everyone accepts loss and they've got to basically get better to not lose again. And when everyone wins, they celebrate it together and they'll feel like they contributed. Then you need people in your organisation that want to be challenged. You need people in your organisation that aren't looking so much for an easy life, thinking that'll make them happy, happy, but looking for a life that throws constant challenges at them that they sit there and they need to solve. And from solving them, they feel like they've attained some satisfaction from, from that, um, because that's what drives a sports team, that's what drives an athlete, you know, and that's what drives, you know, the, the drivers that are in industry and, and hold our society together.

I mean, we talked about this last time, but it also comes down to the goals of that team. If they're surviving at a social level You know, versus you're competing to get into World Cup and, you know, keep going up. It's a different, different game again.

Yeah, it is. And, you know, um, everyone has the right as a business owner, um, or a manager, as long as the business agrees to it, to run the business at the level they want. And, you know, if someone wants to run their business like an under-10s soccer team where they decided not to keep score because they don't want people to get upset if they lose or, you know, feel like they're not being including everyone, and that's totally fine. It's like you don't need to keep score if you, you can do that and you enjoy your business and you make some money out of it to survive, that's great. On the other end of the spectrum, you know, if you want to be the world champion team That's going to take the same discipline, the same effort, the same investment sometimes of time and money as it does take the best soccer team or the winning Formula 1 team or the winning Rugby World Cup team. It's going to take that same effort of just basically, you've got basically a whole— Team. know, things set up to basically how you're going to recruit and attract the talent into your team, how does it get paid for, how you get your sponsors, and you have, you know, 20 different coaches in all different specialties.

You keep training and developing your existing team.

Yeah, and that's, that's very demanding. And, you know, I'll be honest with my businesses, I'm not at that level. I'm not going for world championship, but I definitely want to be, you know, state champion. I want to— I'm not I want to be run as a professional team. I want to be basically knowing that I'm leading my industry that I have that business in. And I want to know that my team are all able to earn more money in my business because they're contributing well and the business runs well so that it has money available to pay really good wages. And I want to know that we're delivering a product or a service that is like up there or better than anyone else can offer. And, you know, so I'm not— that's the level I want, and I know what that takes. And, you know, to go to the next level, it's like, you know, I don't want to do it big, you know, because that's not my enjoyment level. For some people it is. And I'm also not going to go below that level because I want to have something that's really shiny and polished and everyone's enjoying and winning. And also winning financially.

I love that. And you know how you spoke about at the start that this is how you operated? You had this sort of mindset of wanting to kind of create a game out of a lot of things and, you know, have that enjoyment. So let's say a person doesn't quite think that way, doesn't quite operate that way at the moment, but they go, hey, I have a lot of maybe issues, or, you know, or maybe, you know, sometimes I feel like when you have personnel issues or you have challenges or problems, it's because actually people don't have a game or they have too much time on their hands, you know. Or, um, but let's say a business gets inspired or they want to push for that extra few percentage improvements and they want to get into this. How, how do they go about it? Like, what comes first?

So Look, as a first step, you know, my advice would be to have this concept of constant improvement. So, you know, in the Japanese call it kaizen, and we call it constant improvement, whatever you might call it. But it's this idea that it's like, let's see how we can improve everything in our business. Um, I find the best first step of that is go, well, let's look What are our sales? What's our cost of goods sold? Hence then our gross profit. What's our overheads and what's our net profit? And I look at those 4 very high-level KPIs and go, well, how much should we increase sales? And even should we increase sales? It's like, because one thing is if you increase sales and you've got really low margins, that's not the smartest thing in the world to do. It's like, you know, I think the first and most important thing is go, how can I get my margins that are ahead of industry margins? And, you know, the benchmark or the way to assess what your margin should be is I use this. I basically, I look at how much is my, how much can I sell my product for? How much do my competitors discount? If they discount to the maximum level because let's say the industry goes quiet and everyone starts sort of dog eating dog to win work, can I still make money at the point where they're not making money? And so I need to have my margin a good few percent better than their lowest margin. And that's one of the key points is that's long-term survivability. But beyond that, it's like, It's like if your margin's not good, don't go and push for more sales because that's just gonna usually grind your margin lower. And you'll turn to a point, and I did this in the '90s, I remember looking at my profit and loss going, I was making so much money when I was turning over $5 million a year. Now I've got to $10 million a year and I'm not making as much money. I'll push it to $15 million next year. And of course, what do you think happened when I pushed it to 15?

Even lower margins.

Exactly. And now I was losing money. So I'm making like pretty much 20% net profit on $5 mil, 5% on $10 mil and minus 1 on $15 mil. I didn't, my solution back then, it wasn't in my 20s, was I'll just grow bigger.

Yeah, you can't outgrow the problem in that way, in that situation.

Yeah, and I look back and I go, oh my God, how dumb was I? But at the same time, when you're in your 20s and you're building a $15 million business, it's everyone's patting you on the back and

I think that's fantastic. You just needed to fix the bottom line of it.

Yeah. And of course, at $15 million to fix a problem, that's such a big problem to fix. Now it's 10 times bigger than when I was at $5 million. But at $5 million, it's like our systems worked because at $5 million, I had 40, 50 staff, something like that. And I could pretty much, you know, if I look back, I was able to basically stay included in every process. When we went to 10 million, then I didn't hand over. I didn't even recognize what I was doing. I would just hire someone and go, good, I don't have time for this anymore. You do that without any more instruction.

And you probably had successful actions that you also didn't pass on.

Yeah, that's right. And it's like it took me— it's another skill, was this actual skill in learning how to recognize your successful actions. And I didn't really have that skill. And, you know, it's a little bit like if someone is naturally really good, say, at skateboarding, it's like they can't teach someone else how to skateboard. Mm. And if you wanna find the best skateboard instructor, find the person that was really a bit uncoordinated and had to basically watch and learn step by step how something happened. And I had a bit of a natural sort of talent for just basically, you know, on the technical side with my commercial refrigeration skills and my site management side, I was just— I would fall on my feet and I couldn't— tell you what I would do to fall on my feet until things start falling apart and you go, all right, I've got to go and work out what I used to do. And so with this constant improvement, once you look at these 4 numbers and go, well, where should I push my sales to? It's like, where should I get my costs of goods sold? My direct labor and direct material costs. How do I get Where should they be at? What should I get my overhead to? And then what I would do over the years is basically go, all right, I'm not going to— I used to push sales really hard and then I stopped pushing sales so hard. And then I would basically go, well, the business is here really for shareholders. Primarily the purpose of the business is to create a profit. And so I'll go, okay, what should the shareholders be targeting out of the business? And then now look at the costs from above that line, go, all right, well, what can we do with sales? What can we do with overheads? What can we do with cost of goods sold? And all of those, I would just move them slightly and a percent. If you drive your sales up 10%, which sounds really low, but then you can drive your cost of goods down 1% and you can drive your overheads down 1%. It's like, that's a fairly healthy profit improvement. Yeah. And if you do that year after year after year, you actually can get a business that's, you know, it's not necessarily doing huge sales, but it's making, you know, $1, $2, or $3 million a year and it feels fairly easy. And you've also got a margin where if something changes in the market, it's like, you know, you can still, you can drop your prices to their costs and still be making some money and the business can survive. And what that does though is when you do these little 1% changes, that's got to create some sort of plan or program. And this is where you can get your staff involved. And it's like, this is the first step of playing a game is go, hey, last year our labor costs were 23% direct labor costs. And you can get your labor team together, whatever business you're in. For me, it was in construction. So you can get your site managers together and have a little 2-hour meeting. And literally that's all it would be. And we go, hey, how do you reckon we can get this cost down? And they'd give you the stupidest, most basic things. Like, I think we need trolleys. Okay, good idea. So $500 of trolleys. And I think we should do this process and do that. And then it's like, so a 2-hour meeting and it's like, I remember one year I think we drove cost of labour down from like 23% to 19%. It's like $100,000, $150,000 saving just in a 2-hour meeting and a couple of thousand dollar investment. And then you can look at the overheads from administrator, you look at your staff and go, how can we do different things? And in saying all this too, it's like at the same time, labor, individual salaries going up and bonuses going up because obviously as the profit goes up, always share off a portion of the profit to go back to the staff in bonuses. It's in construction, wages have had to go up a lot. So in all this time when the industry is meant to have been bleeding, especially post-COVID, in that particular business that's been able to produce more and more savings, better margins, better profits, better wages. And with only increasing sales slightly, I mean, we've been very disciplined not to overwhelm the business with having too many things to deliver that didn't allow to deliver on the efficiencies. And what that does, that's the first step of creating this sort of games culture. And I think, I know for myself, I sometimes get too distracted in running the day-to-day things in the business without going, Now I look at, well, how can I create more of an overarching game? And it's actually quite a simple, undemanding process that just starts getting people on board and engaged.

That's a really great way to break it down, which really starts with, let's not just go and set targets and go, okay, you're doing 2 of this, now do 4 of that. You're actually starting from the most important results overall impacting the business and bringing that constant improvement in and then going, how does it trickle down? And also I think it's fantastic to bring everybody into it that it relates to. You get their buy-in, you get their ideas. They're the ones on the ground dealing with it as well. And I think that's great way to get engagement.

Yeah. What it does too, if you're not bringing— and all your staff need to be involved in some way or another. It's like from trainees or apprentices or graduates that come in right through to the most senior people. Involve everybody in the process. Because what it does too, it makes— if you don't have your team involved in these things, then the smallest things become the biggest problem. And what this basically does is it grows their world so that the problems they have in their workaday world look much smaller. Because their world went from just what they're controlling, which is if maybe just one site with 5 to 10 people on it, but now they're involved in the whole business that has 10 sites and a lot more people.

So would you talk about, would you, let's say someone is in an admin role, for example, you know, and you're trying to improve the efficiency, like the profit and the revenue and so forth, and you've worked out that if they can do X amount more, it's like that's going to drive up efficiency, which means they can produce more and so forth. So would you still share everything to do with the business and go, this is what we're doing, this is where we want to head, these are the targets, and then this is how we feel your position sort of fits into improving this.

Yeah, absolutely. So, and, you know, so you— everybody will be involved from, uh, with a simple explanation what's going on. And, you know, if you've got— you know, we have in that business that we have like 16-year-old apprentices that— so to be talking about we're gonna, you know, cost of goods sold and overhead and 1%, it's not the conversation.

Yeah,

the conversation over for the whole business is like, hey guys, we're out there, we want to be really good at what we do, we want to deliver really well to our customers, we want everybody in the business to be earning, you know, great money, and most importantly, we want everyone to come to work and really enjoy it. And, and I'll even talk to them about like, you know, we want this, we want you to be as excited to come to work as you do when you play sport or, you know, when you go and engage in your hobbies. So they know that and we want that. And that sets the scene for the sort of things they should be complaining about if they've got complaints. Mm-hmm. Like, you know, I don't want someone to complain that, you know, oh, Joe yelled at me and it's like, you know, I feel uncomfortable. It's like, yeah, they should complain about it, but I'd prefer to complain, go, hey, it's like, I feel like I, I really want to learn about X, Y, or Z because I want to get into this part of the industry, or, you know, I want to do this or do that. And they're the things that, you know, and if people know you want to constantly improve, and, you know, we have little processes like we have— we, we rolled out a skills matrix that we're still refining, but the idea of that is it's like we survey all of our guys, and I think there's about 200 or 300 skills that we realize are required to basically be able to do any of the technical parts of the business. And we get people to self-assess themselves on how skillful they are and all of those things from 1 to 5, 5 being, um, I can teach others, 1 being I've never heard of it. And then we get them to— second to that, once they self-assess on them, and there we get them to— we ask them on the same thing, well, how desirable is it for you to know about this? You know, and 5 being I absolutely feel I must know to do my job better, and 1 being I have really no interest at all. And that not only helps us to see where people are at, it helps us see what they want to know about or learn about. And sometimes if enough people want to know about something, then we'll work out how we can do sort of group training on it. If it's just a ham low amount of people, we'll try and team up with a, with a person that feels like they can train the person in that area. And so that creates just a whole nother game and a feeling that we care for our staff. But on the flip side of that, it's like it just keeps creating obviously better and better staff members as well. And we're not training them on what we would think they should be trained on, even though that sometimes needs to be done. But we, we take them down a path that they're telling us they want to go down. And Um, so, you know, that's, that's, you know, at a more of a micro level. So, and then, so we give the overall, the overall view or, um, sort of concept of where we want to take the business. And, you know, where— and we talk about the areas that we want to create improvements in. And I always talk now like in slight— we want to do slight improvements, we want to just nudge this along a bit. And I've realized those slights and those nudges when you do them in 4 or 5 areas can, you know, sometimes double your profit. It's like I've done the old, like, let's just hack into something and change it so much.

And it reduces the feeling of overwhelm. Correct. We're going to change everything.

Yeah. Well, as you know, it's like we, um, we— I got really excited, was probably 8 years ago now, we went down the EOS path. And, um, was it called the Entrepreneurial Operating System?

Yeah, I think so.

Sensational. It's such a good system. And it's, um, we, we put it in, we're running it in our different businesses, and you were part of it with Performia and running in other businesses. And, um, and it was dynamic, it was exciting, and but oh my God, the pressure of it was insane. And, uh, one of the businesses we put it into, it's like within a year I think it took it from like 8 to 14 million dollars in sales, and and I had the management team sitting there going yes we're going to build this into a 50 million dollar business. Anyway, but went to 14 million dollars of the sales, and if you you know EOS system is definitely something to look at, but it's a really demanding system because it's like it has weekly pulse meetings, it has the

90 day rocks,

90 day rocks, and You gotta choose these rocks and then you have these meetings. If you don't make your rocks, you're made to feel like you're just a loser. Yep. And so basically what happened, the pressure of taking that business to $8 to $14 million along with these constant meetings and doing the rocks, the rocks being sort of some major program that you gotta roll out to be able to improve things. It's pretty much within 9 or 10 months, it's like I'd lost half that management team. that were basically saying they were gonna do all the hard work. And then I was left picking up the baby and had to repair it. And as usual, it's like the profit dropped off. So yeah, profit dropped off from the $8 to the $14 million and physically dropped, not just percentage-wise. And so then I was left basically going, okay, that was a rocket ride. And it literally is a rocket ride. Hmm. But it wasn't the way I wanted to run my businesses. And that's what actually made me aware that it's like, we don't need to go and try and change things so fast. We don't need to drive this massive sales increase. And I'm not saying that's not wrong, 'cause I really admire these people that can go and they run these businesses and 5 years later they're $100 million. It's like, that is just so admirable.

You gotta be ready for that game though.

Yeah. And you've gotta also too, the people that do that, It's like they also have really made sure their margins stick in place. And so it's possible if you make sure your margins stick in place and you need a lot of margin too, because you're going to make a lot of mistakes along the way and you're going to need to spend a lot of money that you'll end up spending incorrectly to continually support that amount of growth. And so if you're going to start off trying to go from $10 million to $100 million in sales, my advice would be be making 25% net profit, have $5 or $6 million in the bank, and then you've got time to catch up to that sort of growth. And unfortunately, that's not what I was doing in my 20s. In my 20s, I was just an empire builder. When we decided to do EOS, amazing, learned so much from it. And the biggest thing I learned was we can do constant improvement like EOS pushes, but We don't need to do it with that much pressure. Hmm. And, you know, the, the way to do it is have people that are coming into your business the same way they go and play sport and train. They just want to be there and want to contribute, and then just nudge them along to improve. And their improvement improves their group, that improves the business and allows their, you know, wages and their bonuses to grow. And there you have, you literally have a voluntary sports team that at the same time is getting, it gets money, they get salary.

Yeah, and something you mentioned before about getting your staff to complain about the right things, that's also a really important point because from a management point, if you don't handle those things that rightly so people are frustrated by, that's how you can also lose your top producers.

Yes,

as well. You know, sometimes people leave because they go, I really wanted to get more of this done, and I really wanted to triple this, and I wanted to do this, but it's just the business wasn't supportive or didn't care, or they were trying to fix something else, put some other fire out. And that's why a lot of good people actually leave.

Absolutely. And yeah, it's like, it's pretty much the only reason— oh, you know, it'd be 9 out of 10 of the reason why your top producers leave is they just feel frustrated they can't get the job done as easily and as fast as I want to get it done. And it's, you know, it's something that I was just handling this week with one of my top producers. He's like, you know, I answer the phone and the first thing he goes, I'm really frustrated. And I go, oh, got it. And so I had to build the bigger picture for him again to sort of pull out of that, this micro problem on this project he's trying to run and go, Okay, I get it. And so it's— yeah, they don't like it.

Yep. Yep. So one of the things we've also talked about is that the average retention of people is a lot longer than we're made to believe. Like, I think it's rather 10 or 12 years, which does create another situation with potential staff complacency. And one of the things I've heard is like, you know, people stay for long periods and flat-out long retention is not always a good thing, is it? It's like we want retention of the right people. You know, it's got to be right for both ways. And if the person's just filling a seat for long term, but their production or motivation or contribution has dropped, That's not ideal either. So I guess my question is, how do you bring— and this might be 2 questions, but it's like, how do you actually introduce this game to people that are maybe good team members, maybe they are contributing, but maybe they're kind of also just okay doing what they're doing, or they've maybe become a bit complacent? So how do you handle that?

Everyone has a different level of game they play. It's like, you know, you shouldn't, you don't want people in your business that basically have the attitude, it doesn't matter how hard I work, I still get paid the same per hour. That's, you know, you don't want that sort of person. Minimally, you want a person that's going, oh, I get paid, I wanna, I just wanna feel like at the end of the day I've contributed and I feel worthy to earn my pay. This is a minimum standard. That sort of person is at least already playing some sort of game because at least they're playing a game versus their wage. And for them in life, exchange is important. You know, they don't want to take any more than they give or give any more than they take. That's, that's a, that's a sort of a good minimum standard. And so if you've got someone, a person like that, it's like, you know, doesn't mean you need to get rid of them. It doesn't mean they need to play the game. But you just don't want people that are playing against the game. And some, you know, if depending on of course how you select people into your business, if you're selecting game players, and of course in Performia this is like our whole system is, you know, you can know who these people are and you can make the choice of whether— at least have the choice before you hire someone to know, or Do they have the potential to play, to want to play the game? But it's like, you know, you just need to make sure that no one's going to play against you. And if some, you know, if people— some people will really engage in it and relish it, and some people will just go along for the ride. And it's not wrong to just tolerate those people that aren't working against you. And it's not wrong to also go, you know what, I want everyone to be relishing it. And if you want to play the game of everyone relish it, then you've got to become a really good talent scout.

And be willing to go through that.

Yeah, you've got to be now go, I'm willing to lose the people that don't want to relish it, and I'm going to put a lot of time and effort and find the right tools so I can find and get the people in that are going to relish it. But, you know, I would say that I, I know of some people that work in our businesses that don't relish it, but they go along for the ride. They contribute, you know, in, um, they, they, they add value to the business, but I don't need to be replacing them.

What if they're quite like that but performance has sort of gone down a bit? Maybe they're not meeting targets as much as they would, but they do hold an important role because they're they're not terrible, they're doing— they're generally a really good person, but their performance has dropped and they hold a role where, you know, maybe they're dealing with clients, important clients. They've got too much information now, knowledge. It would be very hard to replace that. How do you handle that? Because also as an owner, you might now be like, oh my God, I don't want to have to go through the whole pain of rehiring, replacing for this. And yeah, sometimes they end up just sort of going, well, I'll just keep putting up with it. bit longer or?

Yeah, it's really interesting. And as you're asking the question, I'm going, how am I going to answer this? And so this is how I answer that question. It's like I have my slight targets, a little bit of improvement on cost of goods, a little bit of improvement on overhead. We grow our sales, it's like, you know, we get our money. And so if all those are heading in the right direction, it's like, I'll probably go, I don't need to really handle it. I can have a little bit of a social— socialist attitude, probably I should say, to it. It's like, you know, we're making our targets, we're improving. Do I really need to go down this path and make more work for myself? And this person's not doing as well as they probably should. On the other side of it, it's like, you know, it's also quite easy just to have a bit of a conversation with someone, find out where they're at, find out what they're doing, and decide, do I need to push this person? Will this conversation be enough? And so I suppose the real answer here is go look at the bigger picture for yourself as a business owner. What fights do I need to pick off? Do I need every person on my team to be at 100%? Can I have I got room? Am I making enough money? Am I making more money this year than last year that I really need to get involved and fix that thing? And if the answer is, hey, my profits are going up, my my product that's going out to the market is improving. It's like I'm getting the wages and conditions better for my team. It's like you can buy yourself this. You can buy yourself. this serenity where you don't need to handle everything. Now, of course, if profits drop off, and, you know, then, then I'm gonna have to start going, oh my God, now I've got to go and do the hard work. But, you know, I like the idea that I've built a— building businesses where, you know, we have a substantial amount of cash in them, we have substantial other reserves, and, you know, we have great margins, and we have all these things that I just, I have, I have, I don't want emergencies, probably pretty much. I've bought this, I've built this structure. I don't have to have emergencies.

So what's an advice though to businesses? Let's say they're having a tough year, stats have been dropping, results have been dropping, and meanwhile they've got a couple of these situations, really good people. Normally it's like great person holds a responsible role, but they're also not beating their targets. and the owner feels a little bit backed off from pushing this person, like, and because of all the other potential consequences and fears around even how to have the conversation and, you know, how to nudge this person without the potential of losing them. Like, what's some advice to that owner on how to handle this?

Yeah, look, there's so many different circumstances and situations to go. There's is one thing to do. But it's like you said in there, the owner's backed off. And is the owner backed— like, I always look at if I'm backed off on handling something, I, I ask myself the question, why am I backed off? Am I backed off because I've done something to this person that I shouldn't have? Have I let this person do things that I haven't, um, handled them on? And then now it's hard to basically— because I've made it okay that they did this now because I didn't say something. Or am I scared this person's going to leave, but they're important? Am I underpaying the person? And so I run through this little list in myself and go, where can I take responsibility for the fact that I'm not handling this situation? And of course there's the 5th, I didn't count how many things there were, but I think it was number 5 is, am I just deciding I don't need to handle it because it's not really affecting our profit? And so I think that that's the first thing is look inwards and go, why am I backed off? It's like, what am I scared of? Because, you know, when you've got a very easy to run business, part of that is because you've got a great team. The other part of it is because you're actually doing everything sort of cleanly with that team, including, um, your approach. You know, you're making sure they're getting paid what they should be getting paid. Those sorts of things. And the worst scenario here really is you backed off because the person has sort of made you— you sort of feel like this person sort of made it feel like that if you approach me or push me too hard, I'll leave. And then, but you need me. Hmm. And you have this chance that the person is actually— you're probably better off not having that person in the business. And I've found that quite often the person I've been most scared of leaving has been the person that actually needed to leave. And when I've actually finally been forced to handle them and it hasn't gone well and they've left, or it's like I've been pushing so much that they've resigned, or, you know, it's like I found that the— that person I was really scared of leaving, when they go, it was actually no big deal. It was actually like it was better that they were gone and things freed up. And, and, and, you know, it was like I'm thinking, oh my God, How did they trick me into thinking they were so important in this business? But it starts off with, you know, you're saying backed off, but it starts off, you've got to have the conversation.

And I think that's actually a really good— yeah. And something else you said earlier was that if they're also a good team member, it can really go two ways. And if they are a good person, it's just for some reason their motivation drops. Having that conversation with them might not actually be what you fear, that they're going to leave. it might actually just lead to a better situation for everybody.

And, you know, sometimes you've got to have a conversation before the conversation. So sometimes it's, you know, it's— if, you know, from my personal experience, if someone's— let's say someone's not really performing the way they should, and quite often because I like them or because I sort of empathize I mean empathy. I have some empathy with what's happening. It's like I don't really handle them, so I sort of start to drop out of communication with them a little bit. But you know, sometimes you just got to have that, you know, light conversation where it's like, "Oh, hey, Negar, I'm chatting for a little while. What have you been up to? What's been happening?" Oh yeah, it's like da da da. And then you might need to do that once or twice over a few days, and then just have a comp. And then you've you've broken that ice and reestablished.

It's not a full. Serious meeting. So you might be on your way making a coffee. Exactly.

You've just re-established some affinity, and then now you can actually open up the conversation with, hey, it's like you reminded me, I saw it a couple of times, and it's like, you know, I want to just go over some of these numbers. I want to have a look and see, you know, how, uh, what's happening here, because you're actually, you're my, you know, usually my stable person to get these things to happen. and they haven't happened as they normally would. So I want to understand what's happening there. Because it's like as soon as you go into like—

You're not delivering.

Yeah, it's like the person's gonna have to defend themselves. And you don't want to have a discussion of the person defending themselves. You want to have a discussion that leads to solutions.

And also, how do we do it together? It's kind of like you're sitting across the table versus sitting next to each other.

That's it. And the first step is understanding it. It's like, you know, you might just by understanding the situation I'm explaining to you realize, oh my God, I can see what's happening. I know how to fix this. Hmm. It's like, you know, oh, I said that? Oh my God, I didn't mean this. I didn't mean you to take that and do it that way. And that's happened to me before as well. I've given some sort of order, or not even an order, but said something, and someone's taken it and they're rolling with it. And it's like they're doing what I thought they wanted to do do, which is causing the problem. Hmm. So it's really important to be able to just, um, be able to communicate with anyone that's in your organization at, at a friend level. I'm not saying you have to be friends, but at a friend level, and be interested in something about them. Like, be interested in your team members, be interested in that they're doing well. And sometimes you have to take that bit of extra responsibility for them because Sometimes they appear to— they can be a little bit self-destructive sometimes, like, because they, they don't feel like they can approach you, or they don't feel like they should complain about something. And so then this is why they sometimes roll off and just find another job and not tell you.

And I think sometimes if you have really good people, they— well, not sometimes, I think all the time when you have good people, they actually feel bad themselves if they're also not doing well.

Yes.

So they kind of Internalize that.

Yeah, they hide from you.

Yeah, potentially. Yeah.

Because they feel bad, not because they want to— they're hiding to not be sacked. They just feel bad.

Yeah, yeah, that's right. And I think also one of the things I do is I want to know, like, I, I know that person's a good person in the team, and I know even if something is down, it's like, I know they're working, they're going to be working hard because I know them. At a personal level, as in I know what kind of person they are. So I'm more I'm interested in hey, what can I do to make your job better?

Yeah.

What can I do to help you? Is there anything I can do to help you to make it easier for you to make it more productive? You know.

Yep.

And they're the best person to tell me that.

Yeah. And here's the underlying important reason why we need to be doing this is because when you have a staff member in this situation. it's like they're not as happy as they should be. And if they are as happy as they should be, you don't want them in your organization.

Yeah.

And so I don't want staff— I don't want people to think or feel like they're losing or not doing enough, because then they're just not feeling good about coming to work. And then when they get home from work, they're not having that good feeling of having a good day at work. And sometimes it also means actually terminating people to make their life better. If it's not working for them, if they can't be productive in your organization, then terminate them and do it as a favor, not as a chore. And because it's like you're going to allow them to go and find that job or that organization where they can win.

I have a question on this because you brought up the hiding part. Now couple this with the work-from-home hybrid type arrangements, and some people are now Going, I want to work from home a lot more, and add that to the challenge of going, okay, I need to have a conversation with this person who is usually a great team member, but stats are dropping, but they're also doing most of the time now working from home. How— and this has gone for a while— how do they handle that to go, I need this person back in the office, I need to have this conversation?

Yeah.

And I also don't want to lose them.

Working from home is such an interesting topic. And, um, it's like, in fact, in all my businesses, if a person has a job where they can do it from home, they all have the option to work from home. And what I find is that most days of the week, people are actually not working from home. So in Performia, you would know better, but I don't think, you know—

No, maybe one day one person might Work from home. But yeah,

yeah, for a week. For the week, you mean one day a week?

Yeah, one day, one day per week. Yeah,

yeah. And, you know, my other business, it's like, it's, you know, pretty much own people only work from home because something's happening at home. Like they have a plumber coming, or they're gonna do this or do that, or, you know, the West Gate Bridge shut down, so they go, it's gonna take me 2 hours to get to work, you know. But they all choose to come into the office and Now I think working from home is an amazing concept because it allows employers to basically find people all around the country, if not the world, which creates another problem because working from home people are actually showing that their jobs can be done offshore, which is a problem for the employee market and for the country. Interesting, yeah. But it does give the employer this opportunity to find people all around Australia to work for them. It gives employees the opportunity to basically live a life out of the city or in a rural location or be more connected with their family. You know, there's like, there's so many benefits to it. But the downside is it's like, yeah, you do lose that. I think one of the, you know, one of the things that the workplace provides is this feeling of camaraderie, this feeling of being connected. And I, I sort of a little bit worried that if we, you know, when if you have whole companies or some people that just want to— don't want to go in the office, it's like, they— are they hiding or are they doing a lifestyle choice? And so yeah, it's complex. And in really large organizations, I don't understand implications of it because I haven't never worked in a really large organization or have that experience. But I know from, from my experience, it's like the people want to come into work. Um, you know, and personally, I've actually worked from home because when my children were younger, I used to spend, you know, 3 to 6 months of the year snowboarding with them around the world and working from all over the world and, and doing things. And it definitely, in a lot of ways, it created a lot of efficiency for me because I wasn't distracted by what was going on in the office. But on the other side of it, I would miss a lot of things too and start to feel more and more disconnected from people. I noticed the longer I spent away, the more critical I became of my team because I wasn't seeing the person and building the affinity, you know?

Yeah. Yeah. And I mean, it depends, obviously. And we're talking about when you have a physical office in the same city. Obviously at Performio, we have people who are working in a different country. You know, and, um, we're working for Australian sort of side. And the only reason that works is because we've hired the right person. We trust in them totally. The fact that they're not in the same office as me has zero impact on my confidence in that person.

Yeah. And look, and that's something too, like, I've been— I've probably got the record for hiring the worst team ever. Then I obviously found Performia and then loved it so much that it's like, I love it so much I bought the company. But I loved it so much that I rolled it out in Australia and opened up the office in Japan and in China. And then now I feel like I've got the record for creating the best team ever. And the difference is when I was creating the worst team ever for First, it took me quite a while to realize I was creating the worst team. Then it became the worst team is just normal. And then it became I just didn't trust anyone to get anything done. And then actually, then you start— I lost confidence in myself because I felt like there's just— I'm not a good business person because everything that I suggest and try doesn't work. But then now I produce such a great team, you realize that all those things that didn't work were actually because of the team. And the team literally convincing me that it's like they were bad ideas and they didn't work and this and that. And then, you know, then you're going into loss and going, oh my God, I'm the worst manager ever. But I wasn't. I was just the worst recruiter ever. My recruitment part of me, of my— that became my businesses was terrible. And now I have a team where it's like I never need to worry about are they doing enough. Are they moving fast enough? Are they— you know, I don't monitor— we monitor their hours because we do have different apps and stuff like that. But it's like if they work 30 hours or 50 hours and they're salaried, it's like it's not my decision, it's their decision. Hmm. And, you know, it's so— I don't— so many things I had to control and manage and be concerned about. It's like I don't have that. They're not there anymore. It's like— and that makes business again that whole just different level of just, I run a business, team of people, we run around on the field, we kick the ball, we have fun, and we're close to winning a championship. Feels good.

Yeah. And competitions are fun as well. And we talk about games and obviously there's rewards of it. There's official financial bonuses, but it's like also rewards and competitions don't have to be always you win $1,000 or $1 million. If we look at Performia, We're in 26 or more countries and we play this game.

The expansion game. The

expansion game. And it rewards different things. And do we get something? And we get a little trophy and that's worth like, I fought really hard to get that special star that they gave us. But you're part of the game. Everyone in the worldwide team is performers. And we're all learning off each other. And it's a fun game. And we fight for points, need to get this extra. And they're not all based on sales and expansion. There's different metrics and it's all about— they've had the different leagues, the different competitions, and it's just fun.

Exactly right. And in the construction business, I'm involved in. It's like there's not— there's quite a few bonus people that work on production-based pay. We have subcontractors on hourly rate, full-time staff that work on salaries. And on top of that, there's all— every time there's a distribution of profit, there's always some of that split off and with discretion given to different people. It's not a mathematical thing so much as it's like, well, Let's say there might be $100,000 or $200,000 to be split up to the staff. It's like we'll sit down as the shareholders and go, where should we put this? Which people really we feel deserve it? And of course the majority of that is like, this guy's making us a shit ton of money, so he's gonna get really rewarded. And she's basically just really stepping up. And then sometimes it's like, oh, but she's Gonna go on maternity leave soon, so we'll give her some extra. And so we can be social, we can, you know, we have that discretion, which I enjoy. But apart from that, we, you know, we have the little improvement games that we constantly run, like how can we go? And like the guys can get excited because they find some new machine or equipment that can speed things up. And they'll send me— we use a lot of group chats— and they'll send on a group chat and I go, it looks amazing. And if I don't think it looks amazing, it might be $400. I buy it, send it to them, you know, and they get excited. It's playing a game for them, you know. And then, you know, I'll share my frustrations, say, we might be having with a client or an issue with them. And even though it's not— doesn't have a lot to do with them, it lets them into my game a little bit. And then when I've solved it, and I might talk about the process with them, it's like then they they feel like they were part of it and they were cared for enough. And that's why I think it's important to don't keep all your business problems to yourself, even if they're not to do with your staff members, share them. Run outta your office and go, oh my God, this client is demanding this and that and they're using a contract and demanding. It's like, all right. And someone will go, how do you wanna help? I've gotta solve it myself, but I want a vent. And then you can come and go, hey, they called back and they're really happy. And everyone's like, oh good. And it's good to keep people involved. Yeah. And with the right sort of drama, because it's like the business drama is good drama, as in what's happening in the drama of your business.

When we look at when everyone's really united or you have a common goal or enemy, it's like everyone really goes on the same side. And I think the one thing I also want to add is that if someone's like, okay, yeah, cool, I'll, you know, I'm, I'm vested into this game, this sounds really good, what am I going to get for it before I get involved? Is that's also the wrong sort of attitude because this is innate, isn't it? It's like it starts from how we attract, how we hire people. They've got to kind of come in with that interest to want to do things better and—

Yeah.

Want to play that game because like, yeah, I play lacrosse, it's like Yeah, no one gives me anything when we win, you know. Aside from that, it's that sense of satisfaction. You overcame something that was tough. Yeah, challenging, you know. You united together.

Yeah, exactly. And lacrosse, actually, just— do you— they call goals— you score goals?

Yes, absolutely.

So how many goals in a match is normal in lacrosse?

Really depend, but it's a high— can be a high-scoring game. Could be 10, 20.

What's the most amount of goals you've scored in a match?

Our team.

Um, you personally?

Um, I, I play more defense than midfield, so—

Oh, okay.

I've done assists though. I've done— pardon?

Okay, that's your excuse.

Yes. Oh no, I've done assists, and assists are very important because you set it up.

Yeah, I got it.

But I can tell you how many balls I've defended from going in.

And so what's the— if someone scored 5 goals in a match, that would be really good? Uh, not necessarily.

Yeah, that can be pretty good. Yeah.

Yeah. So imagine this person— do they give it— are they like a full forward? Do they have a position or attack or—

Yeah, attack, midfield, defense.

Yeah. So let's say this person that can score 5 goals every match because they're so good. Imagine the coach is patting them on the back and they're going, all right, I'm relying on you today again to score 5 goals. And this person goes, okay, well, before I decide to score 5 goals, what will I get?

Kicking the butt.

But this is what we— we employ people that do this. It's like we employ people that go, all right, I can kick goals, I can score goals, or I can— in lacrosse, we throw goals, right? It's like, but imagine in a team, if someone in a team playing sport said that, you'd be going, oh my God, I don't want you on the team, get out.

Yeah, where is that? Where is that team spirit? That's just not good sportsmanship.

Whereas employers, we seem to think that it's actually okay, that's pretty normal. Yeah, someone should just demand what they want, you know, when I— before, you know, what they're going to get before I ask for it. And also too, on the other side, it's like fair enough if a person does kick goals, let's say they do score these 5 goals and get no acknowledgement for it, that would be horrible.

Absolutely. And that's why in sports you have the MVP, the most valued person that the team votes for. There's the awards end of season for that.

And also, but in the workplace, if you've got people that are making you really good money and you're not giving them something extra for it, it's like, don't expect them to hang around. And they're not going to ask for it. I find that the really good and productive guys, they don't know how productive they are. They don't even know how much more money they're making.

They just feel that something's out.

Yeah. And so if you are not just basically going up to them and going, hey man, that was an amazing project, or we had an amazing year, here's a bonus. And it shouldn't only be, or maybe not even just cash, but it's like give them hotel tickets for a great hotel and a dinner with their spouse.

Even take them out for a lunch, give them attention.

Yeah. But I find it's better to give them something that involves their wife or their husband as well because then, you know, it sort of forces them to go, oh yeah, this is because of my work, because, you know, I get— my boss gave it to me because I did such a good job. So it helps them with their spouse.

They probably do hear a lot of vent. Yeah.

And then the other side of the spouse going, oh, what a great company, I'm glad you're there. And so, you know, you want to— it's not wrong to try and want to get that family and that spousal support because, uh, you know I've had quite a few people resign because they're going, oh, my wife told me that I'm not sleeping well because of the job and I've got to resign. And you're, oh damn, but you're so good. Yeah, I know, but I take the job home with me. And you know, so yeah.

Well, this has been a very, very interesting chat. I feel like we've covered some really good points and I certainly hope it gives ideas to businesses no matter where they're at. So thank you so much to everybody who's watched or listened. Any questions or comments, send it to us and we look forward to answering them for you. Thanks, Gareth.

Thanks, Negar. Thank you.