22 minute TRAINING to get your employees to WORK HARDER and STAY WITH YOU FOREVER...

What is up? Welcome to my channel. If you don't know who I am, my name is Leila Hormozi. I'm co-CEO of Acquisition.com. And my mission with this channel is really to help you get from, say, wherever you are to between $3 and $10 million in revenue. And so I really am trying to dial in tactical tools and processes and systems for you to do that. And so this is actually one of my more tactical trainings today, and it's a little bit longer, and it's the 4th out of 5 in trainings on how to manage in a company. In this one today, what I really want to break down is recognition. And it's something that I think when you start off and you're small, you don't realize how important it is until you get bigger and it's already gone and it's not happening. I really want to help people understand when you're at that point where you're, say, doing below less than $3 million per year, what should you be looking at? How should you be systemizing things so that you can actually make it to $10 million a year by having these things in place? And so that being said, uh, tune in and, uh, let me know what you think in the comments. All right, like I said in the introduction, this is part 4 of my high output management practices. And today we're going to talk about recognition. And frankly, this is something that I actually had a lot of fun putting together because it forced me to really systemize how I think about this and what I do. And so it's something I've been working on for a little bit of time, and I'm excited to share it because frankly, this is something I have sucked at most of my life, and I have to be really intentional about this in order to make it work within my company. And so let me just define for you what recognition is in terms of what we're going to talk about today. So recognition is the acknowledgement of a person or team's behavior, effort, or business result that really just supports the organization's goals and values. Put it in layman's terms, it's just recognition of what you like. It's recognition of what you like in the company. And the reason that I have always— I've sucked at this and I'm way better now. It's just because I am really like, I will recognize someone in my head and it's like, I won't verbally do it, right? So it's like, I'm like, what are you talking about? You're doing a great job. And they're like, well, I didn't know. You haven't told me in 17 weeks. And I'm like, oh shit. And I think that so many of us do this. And it's such a thing we get caught up in because we have so much going on in the business. It's like, you know, we're playing sales and marketing and customer success and all these things at the same time. The last thing that we're gonna remember is like, let's tell Mark you did a good job last week. And so that's why I feel passionate about helping people get this into their business as a formal practice, because I don't think that most people even know it's a formal practice and that there's recognition programs. And so that's what I really wanna talk about today is I think that it's a little bit intimidating because the stuff that is out there honestly is for companies that have like 500 people in it. And so, Teaching something like that, not very useful. But what I do want to be able to teach you is how to dial this down so that even if you have, if you have 2 employees, if you've got 5 employees, if you have 10, 20, 30, 50, 100, this still applies. So that being said, the reason that this is an important topic is I don't think most people realize how important recognition is, right? And I really like this phrase, which is there are 2 things people want more than sex and money. It's recognition and praise. And I think if you ask a spouse, for example, they will tell you 100%. My favorite thing that you do is tell me I did a good job, right? I think that's what most people want at the end of the day. It's like they want to be heard, they want to be seen, they want to know that they're doing well. People like outside validation. Like, we would like to all think that we are above and we're Buddha and we just need to recognize ourselves and validate ourselves, but like, the reality is people love hearing it from other people. It drives so much behavior. It's like people say they want to be famous. They want to be famous because they want validation by the masses. People say they want to be rich. It's because they want the money to validate that they are valuable. And so it's all just forms of validation, which comes from recognition. So think about this, right? There's two wives, or let's say there's two husbands, right? One husband, his wife cooks him a fantastic dinner and he says nothing, right? He says nothing to the wife. Do we think she's going to want to continue to make these immaculate, fantastic dinners for him? Now there's a second one, right? So say the wife cooks this amazing, immaculate, fantastic dinner. The husband tells her, oh honey, this dinner is amazing. It's so good. I love this. When you cook, it just, it's always so amazing. You do such a good job and I just love you so much. I can tell you, being the wife who cooked a homemade dinner for 5 years in a row, the reason I liked cooking dinner and I always cooked dinner for Alex is because he always told me I did a good job. He always was like, you're such a good cook. You make such good food. You're so good at this, et cetera, et cetera, et cetera. And I loved it. That's why I did dinner. People are like, "How would you cook every day?" I'm like, "Well, if your husband told you every day that you did such a good job cooking dinner, you would want to do it more." The same goes for the wife and how she tells her husband, "You did a good job taking the trash out." Is the husband whose wife says nothing when he takes the trash out more or less likely to take the trash out again than the husband whose wife says, "You did such a good job, honey. Thank you so much. That really helped take a lot off my plate." And so what that teaches us is that recognition reinforces behavior. Right? And so that's why this is such a useful tool within a company. It helps you build your culture and it helps you show people the behavior that you want, which, you know, comes from the expectations and accountability. And so that being said, I don't think a lot of people realize that in business, this can be one of your biggest competitive advantages. Okay, let me explain. There's 5 places in the business that recognition affects more than others. There's— honestly, it affects the entire fucking business, but these 5 areas are most important, which is 1, employee turnover. 2 is culture, which you could consider morale. Uh, 3 is profitability. 4 is engagement or productivity. And then the last one's recruitment. And so this is how having good recognition or formal ways of recognizing in a company actually affects the company. It reduces employee turnover by 18%, which is crazy because if you, for every employee you lose, if that employee makes more than $40,000 a year, it costs on average $40,000 to $50,000 on the company. So imagine if you reduce that by 18%, it's bananas. The second is the culture, which is essentially morale, and that increases culture by 66%. And so I consider culture or morale to be a leading indicator of everything else within the company. So if you can increase morale, everything else follows. Profitability goes up by 23%, which is again nuts because you think about the amount of initiatives and the amount of things that people have to do that take so much resource and time and energy from a company to increase profitability by that much. When if you just put in a formal way of praising people and recognizing their efforts, you can do the same. It's insane. You can increase productivity by 14%, which again, think about how much more efficient you can be as a team if everybody is 14% more productive. It's exponential. And then lastly is you get 56% more referrals if you have good recognition. And so that being said, that's why this is saying that is one of the 5 high output management practices because it is underutilized Most people don't think about it, and most people don't have a true system for implementing in their business. And that's why I want to break that down for you today. And so really the question is like, why does it matter to you? Obviously you want to affect those metrics, but I want to explain where this comes from, which is, you know, in 2016 we had a small team and it was growing. I think we went from 7 people to 21 people that year. And in the beginning, when you have like less than 5 people, it's not super hard to recognize people. It's informal. You kind of see what everyone's doing. So it's like there's a lot of opportunities for you to recognize people and you don't really have to think about it. But if and when you grow, what you notice is it's much harder. It's harder to recognize people. You can't be the only one recognizing people. You don't even know what half the people on the team are doing on a day-to-day basis. You don't see and have opportunity to recognize them. And so you start to notice things start to happen if you don't put this in place. More people demand higher pay. This started happening with us. I felt like every fucking week people were like, can I get paid more? And I was like, what the hell? I was like, you're already paid on the high end of the spectrum and now you're asking me for more money and you literally worked here for 3 months. I'm like, what the fuck? Then on top of that, people ask you for more pay but they're taking more time off. And I'm like, you never hear— and you want a pay raise and you're constantly taking time off. But I was like, okay, this is a pattern. I'm starting to notice it in more people. And then those same people that wanted higher pay and were taking more time off were the same people who left. And so we had higher employee turnover. What happens with that is then I had lower customer retention, lower customer conversion, and lower profitability overall. It's like our revenue was growing as a company and our size was growing as a company, and yet we were not as profitable. I was like, what the fuck? Like, who wants to grow if it means you're less profitable? Not me. And so that's when I realized what you do You do unintentionally when you're small is what you must do intentionally as you get big. And so people think that systems are in place that slow them down. The reality is that almost every system you need in your business in order to grow is there to replace the things that you once did unintentionally because it came naturally, because it's easy. And now you must be intentional about them in order to grow, in order to not lose what you have. And so that being said, that is why what I wanna explain is how to have a recognition program or method in your business. You don't need to call it a program, you can call it a method, you can call it a system, you can call it whatever you want. You don't even need to have it formal, but something to recognize people. Because if you don't, that is what happens is your culture crumbles. And I have watched it myself, and it all starts from the top. That's why I told you at the beginning, like, this is not something that I am naturally good at. I have to really practice because I will see people doing something good and I'm like, what a good job, Sarah did great there, and then I don't tell them. And then they come to me 3 weeks later and they're all nervous. And I'm like, why are you nervous? You're like one of the best employees here. And they're like, oh my God, you think I'm good? And I'm like, wow, fuck, I suck at this. Right? And so I think we all need some sort of system in place to help us recognize people on the team. And so what is really like a recognition program? It's just an employer initiative to formally acknowledge a person or behavior that we want to reinforce within the company. And so this is what I've boiled it down to because there is a lot out there, like I said, that can help companies that have 1,000, 2,000 employees. And I've read all of those articles and I've read all those how-to guides and it's really not useful because it's like, like, okay, I'm an entrepreneurial company that has, you know, less than a couple hundred people. How am I going to implement this in my, my own company? And so I really broke it down to there's, there's 4 aspects, which is there's what, who, how, and when. And so what I want to do is I'm going to break down each of these pieces for you, and then I'm going to show you how they all fit together and how you can actually implement this today, tomorrow, this week into your business. So first is the when. When are you going to recognize people? That is probably the most important question because it tells a lot about your company and it is what you can use to shape your culture. So the first one, which is the most clear in my opinion, is outcome-based, which is recognition tied to the completion of a goal or outcome that is important to the company. So really simple. This could be when someone completes a project. This could be the achievement of a quarterly goal. This could be when someone hits quota. They are recognized for those things. It is very definitive. It is easy to measure. It's easy to track. That's why most companies have heavily, you know, like swayed recognition programs that value outcome. It's just easier. Now the second one, which I actually like more, but is harder to measure, is effort-based. And effort-based is the recognition of employees whose behavior is most likely to drive outcomes for the company that are favorable. So if you think about it, the effort is a leading indicator for the outcome. And I like to get people more excited about the process than the outcome because it's also important that they adhere to our values during the process. And so something that would be effort-based would be, you know, behaviors that you wanna reinforce, like doing more than they're required of the job. So you see somebody who's like training someone else who's new, even though they're not the manager, but they're helping them anyway. That would be something I would want to reinforce. It could be asking for help because a lot of people don't ask for help. And you know, if they ask for help, they're more likely to succeed. It could be seeking mentorship and they're investing in their own personal growth. And so really anything that is effort-based that you know is going to lead to the ideal outcome is something that we want to recognize. And then again, milestone. Milestones is also something that you see, uh, big corporate companies have tons of these. And I'll kind of give an example, which is really just recognition of an event or action marking a significant stage in the development within the company. And these you can obviously have as a company as a whole, as departments, as roles. When I worked at 24 Hour Fitness, for example, they had them for a number of sessions that you'd taught and also years in the company. So as a trainer, if you taught 1,000 sessions, you got this really cool jacket. If you taught 5,000 sessions or 10,000 sessions, you got to attend these certain workshops within the company. And so that would be a milestone, right? A lot of ones are, you know, your first 90 days. It could be an anniversary. It could be your birthday. It could be Employee Appreciation Day. They're milestones or events that people want to recognize within the company. And that is, again, probably closest to outcome because they're really easy. They're finite. Like, it's really easy to identify them. And so for big companies especially, they're probably more heavily weighted towards outcome-based and milestone-based. Where I think the advantage of small companies is that you can be effort-based and lastly, value-based. So value-based recognition is recognition of behaviors that exemplify core values of the company. So it's pretty self-explanatory, which is like, you know, if your core value is speed is king, then when someone does something really quickly, you would recognize them for it, right? If your core value is something tied to quality, then you're going to recognize people for quality. If core value is tied something to customer-centric or vulnerability, then you're going to tie it to customer-centric or vulnerability. And so it's pretty simple. You just want to tie behavior to core values and always showcase when people take behavior or take steps in line with the values that you have as a company. And so those are the 4 kinds of recognition, and I will show you in the end how to select which one for yourself. So the second piece of this is, is the who, right? So now you're like, here's when we're going to recognize people, right? Well, who's going to do it, right? And so the most traditional way is manager to employee, which I don't think if you're starting off and you don't have anything in place, I don't know if I would go with this one because this happens most naturally because managers see what the employees are doing. Managers meet with the employees constantly. Managers have one-on-ones. Managers have quarterly reviews. They have so many opportunities. This isn't something you typically need to encourage. At least that's what I've noticed. Because people already get a lot of this. And I actually have polled my teams and said, who do you want more feedback from? You know, as a teammate. And they always say from my peers or from the whole company. Like, which what that means is like the founders. And so that's why I really like these other two more, which is company to employee, which is when the company, which is usually like the founder, the CEO recognizes, right? The employee. This could be something like being, uh, MVP, most valuable player. This could be employee of the month. It's coming from the company. It's a company email, it's the company monthly, uh, call that you're on, it's the founder saying it to you, right, on behalf of the company. And so it's a representative of the company recognizing the employee, which I think people really value this because public praise is favorable. And then lastly, there's peer-to-peer. And this is the one that is probably the least utilized, I want to say, because it's harder to facilitate. It's like telling a peer to recognize a peer without it seeming inauthentic is difficult. And so you have to create systems in place, which I'll talk about later, so that you can kind of make this a little more lubricated for them. But this is super powerful because like you think about this, right, which is like there's being accountable to your manager and wanting to be recognized by your manager, but then there's wanting to be recognized by all your peers. Much more powerful to be recognized by all your peers. There's more of them. They are in your shoes. They are more like you. And so a lot of people don't utilize this one as much because they're just not sure how to put it in place. Honestly, the most powerful one in my opinion. So now that we've covered the who, let's talk about the what. So there are two kinds, right, really, of, uh, recognition in terms of like what, which is formal and spontaneous. Okay, so formal recognition is a predetermined and predictable way to formally acknowledge behavior and accomplishments as a company. And so formal recognition is usually set on a cadence and you know it is coming. Everyone knows that we celebrate this here, we have this here. It's almost like, um, you know, as a country, you know what holidays you celebrate. It would be like as a company, we know what behavior, or what recognition we have in place. So it might look something like yearly, you've got MVP of the Year, you've got your annual bonuses, and you've got Years of Service awards. Quarterly, you've got quarterly reviews, attainment of quarterly goals, and a Jedi award. That stands for Just Effing Do It. It's an award we had in Gym Launch. Monthly, you might have Employee of the Month, attainment of a monetary goal. And then weekly, it might just be celebrating birthdays and anniversaries. This is an example of a formal recognition program. Obviously, it doesn't mean you do all of these. It also doesn't mean you only do these. You might have more than this, right? These are just examples, but it typically falls on a cadence such as this. And it is predictable. Everyone knows it is happening. People aim for it. They're like, I want to be the Jedi. I want to be the employee of the month. I want to be the MVP. The downside to this is that it's delayed gratification. It's not immediate. And so that's why I like a mix of the two because I like to mix formal and spontaneous. Spontaneous recognition is a flexible and timely method to formally acknowledge behavior and accomplishments, right? So spontaneous might be someone does something really great. You shout them out on the huddle the next day. It might be you send them a handwritten card that goes there overnight. It might be that you send a wow gift to somebody who did something really great for a client. It might be that you send somebody a t-shirt, right? And it exemplifies— the t-shirt has the core tenet that they have exemplified on it. And we did this at Gym Launch. This is my absolute favorite thing to do, which was anytime someone exemplified a core tenet, a peer could send them the t-shirt that had that core tenet on it, which is pretty nifty. I loved it. And lastly is you could, you know, spontaneously highlight them in the company email. Right? And so it's something that's unexpected. And the reason that this is nice is that people like surprises, as long as they're good surprises. And so you kind of want to have a mix of the two. There's no right or wrong, and you might start with one or the other, and you might already be doing one or the other. And if so, I would encourage you to try and weave in the opposite. And that being said, I kind of just put these in there. There are so many, um, I want to say hubs, softwares that you can use to track both formal and spontaneous recognition. And so after this, I would go check out maybe one of these 3. There's hundreds that you can use, and they're all very different. And so kind of explore and see what might be best for your company if you really want to put this in place. Now, that being said, then there's the how. How am I going to recognize a person? What's the delivery vehicle for the recognition, right? There's really 3. There's written, verbal, and reward-based. So written, pretty self-explanatory. It's just writing it somewhere. This could be in a company newsletter. This could be highlighting them on LinkedIn or Instagram on your social media account. This could be sending them a handwritten card. And I think out of these, I like social media and handwritten because they have an element of public as well to them. And I think people like public praise. The second would be verbal, which this could be a shout out on a meeting. This could be one-on-one praising somebody on your meeting with them, and it could be acknowledging them to your boss, right? So like in front of their boss, giving them acknowledgment. And lastly is reward, which is planning an activity for them. Maybe it's like, you know, they're taking a day off and you want to buy them like a spa gift card. It's giving away a bonus. It could be sending them custom swag. It could be saying a trophy that has, you know, MVP. It could be an award like a plaque or sword. It could be giving them something for free. And so those are really the 3 ways that you can deliver the recognition. Now, I will tell you that most people steer towards written or reward-based. I believe that most people actually really like verbal more. I think most people like to hear that they did a good job. And so I sometimes like to pair those. It's like you do the verbal and then you also send them a card, or you do the verbal and you also give them a reward, because I just believe that there's, there's something about recognizing people verbally that is just— it just hits more. And so ideal scene with this is that you want to start small and you want to add in variety. And so you're probably thinking, how do you put all this into play? Because like, I have a lot of information now, but like, how do I actually implement this into my business? And that's what I want to explain. So I put together this, which is, uh, what it dissects, how I think about recognition and how I deliver it. And it's the Recognition Scrambler. And so really what this is, is you're just going to pick one from each box. That's it. So if you're watching this right now and you want to teach this to your team, or it's something you want to put in place this week, screenshot this, And all you're going to do is pick one from each box and it will literally tell you what kind of recognition you're going to give somebody. So for example, say I pick formal, reward, company to employee, outcome-based. That might look like MVP or most valuable player of the year. And I'm going to announce it on the company meeting. Pretty simple. It's the first one. Another example of this would be, say I do spontaneous, it's verbal. It's employee to employee, and it's effort-based. That might be a shout-out on the huddle of me saying, Sarah, you did such a good job the other day, uh, getting on the phone with that client. I know you really helped them work through that problem. Like, I just want to give you a shout-out for working so hard. Simple, right? And so that being said, I want you guys to rate yourself on a scale of 1 to 10. 1 is this is abysmal, I have none of it, this is terrible, and I've just now been exposed after this video to realize that I am— I just suck. And then 10 is, uh, I wasted my time watching this video, thumbs down, Layla. And I think that that can kind of guide you into realizing, uh, what you can do next. So if you're closer to anything below 5, I would say first you just want to teach your team. And so I would be going back, I'd be screenshotting that scrambler, and then I would be bringing that to my team and I'd say, new thing, every week I'm going to hold you on accountable to using the scrambler one time. That's it. I just need you to use this one time with your team. I would be doing that if I were below 5. If I were above a 5, I would be saying, not only am I going to use the scrambler, but I'm also going to get a formal piece of software, which they can be super cheap, in place to start encouraging more different kinds and more variety of recognition. Because as you add on more layers of recognition, you're probably going to want to explore a software so you can keep it organized. And so I know that in the beginning, and what I'm even going to do now and do now in acquisition, is I use the scrambler and I just think to myself, Who am I going to recognize this week and how, right? And I do this. I yesterday sent somebody flowers and chocolates and a little note because I want to recognize them, and I sent them a message on Slack. But as you grow and get bigger, there's more layers to this. You want to have peer-to-peer, you want to have company-to-peer, you want to have employee-to-manager. It's harder to keep track of and to keep encouraging as a leader. And so I do suggest that you look into those softwares, and there's different kinds for different kinds of companies. And so that being said, I hope this was of use to you. I just This is something that there's a science of business and there's a soft side of business. And most people focus on the purely the science of business because it's quantifiable and you can measure it. And I know that this is harder to measure, but I promise you, you will see the results if you implement this. I promise that within 6 to 12 months, you will have a different company culture, a better company culture. And I don't think most people, it's like if you want to be a business Unlike any other, you have to do what others won't do, and most people don't have the patience for that. And so I encourage you, do what took me years to learn, which is be patient and put these things in place and watch how it changes your culture. And so that being said, I hope that this was of use to you. If it was, leave me a comment, let me know what you think, if this was a simple enough breakdown, and I will see you on the last and final video.