Old Ways To Manage Are Out—What You Need To Know About Management Today

Hey, it's Mark Podolsk, the land geek with your favorite niche real estate website, www.thelandgeek.com. and before we introduce today's guest, and I have put him on my anchor, my anchorman voice because he's a big.

Deal.

We got to properly introduce my co host, Six Sigma. You know him, you love him. He's over 150 deals so far this year. I don't know Scott, what's the count now?

We topped 160 today.

160 deals. Scott Todd from scotttodd.net landmodo.com and most importantly, if you're not automating your craigslist postings, posting domination.com thelandgeek so before we talk to our guests, I do want to quickly plug Loan Geek is really coming along fast. Scott Todd, we now have a primary payment account. We have a secondary account, the primary, you know, credit card. Their credit card fails for some other reason. When they're making payments to you on their note, it'll charge the ach on file automatically.

Automatically.

AUTOMATED we're going to get paid one.

Way or the other, aren't we?

We're going to get paid if you want to get paid. If you want them to default, then.

Just do the one go somewhere else. Right?

Exactly, exactly. But we got reporting done. It's awesome. So I'm really excited about that. Learn more at loanegeek IO enough plugging away. Let's talk about David Burkus from davidburkus.com he's a best selling author, an award winning podcaster and associate professor of management at Oral Roberts University. His latest book, under New Management, challenges the traditional and widely accepted principles of business management and proves that they are outdated, outmoded or simply don't work. And then this is what's even better. He reveals what does work. He's delivered keynotes to leaders of Fortune 500 companies, the future leaders of the United States Naval Academy, and David is a regular contributor to a little, little rag we've all probably heard of called the Harvard Business Review. Finally, David is on a prestigious podcast. David, congratulations. Art of Passive Income podcast. How are you?

Yes, a pinnacle achievement. I'm excited for it.

Thank you.

As a podcaster myself, it's always kind of cool to be a guest on other people's show more so to see how they do it and steal stuff and use it for myself.

No, I hope you can steal a lot from us. We would be flattered. So David, let's just get into it. What made you want to become an expert in management. And what about the old way of managing? Does it work? And what does. That's a two part question.

Yeah, those are two really big parts. So I'm going to do the politician trick and just answer the one I want to answer. Your first part of the question was about me. Um, I, I defaulted into all of this. So my background came from. I went to university as an English major and knew I wanted to write books, thought I wanted to be like Jack Kerouac or, or Ernest Hemingway maybe with better end of life outcomes, but you know, one of those type of people. And then while I was studying, that was the first time I read a Malcolm Gladwell book. Followed shortly by, I read back and I think read a couple things from Daniel Pink and really sort of discovered the genre of social science writing. So that's what I kind of was like, okay, this is, this might actually be what I want to do. So what do you do when you want to be that? Well, you've got to like learn more than just how to put together a sentence. You actually have to learn the science. So that led to graduate school for first a master's in organizational psychology. Then I spent about, I've lost count of how many years in the regular world. I worked in the pharmaceutical industry for a number of years, partially for experience, partially because my wife was in medical school when she got done with all of that and I could go back to graduate school and work on a doctor, that's when I headed off to that. Always the goal though was to take ideas from the world of research, take ideas from the top thinkers in social science and management science, et cetera, and make those more applicable because I felt like the world sort of really needed those. So that's the me question. And that's essentially that goal is essentially what I'm trying to do with under new management. Under new management comes from a place of realization that most of the rules of how to run a company, how to manage a team of people, were written in an age where we were doing industrial work, we were doing routine work, we, we were churning out widgets, we weren't leading teams to solve creative problems or design new software packages, et cetera. We were doing work at such a low level of creativity that that didn't really get factored in. And when it comes to this newer higher level of thinking work, a lot of those assumptions are breaking down. And so the goal of under new management is to point at the companies and the leaders that are doing things a little bit Differently. And my part is to bring the social science research that shows. Here's why this might actually work better than what we used to know.

Scott Todd, how many people did you manage.

At the peak? 181 within my entire organization. Not just direct reports. Direct reports, peak. I had like, way, at one point, had way too many. I had about 20.

That is a huge span of control.

Yeah, it was too much. And what happened was people started, people. We had, we had people leaving the organization. This was during like the Great Recession, you know, people leaving because we had to get rid of people.

And that's not really people leaving. That's people being invited to work for the competition.

That's right. Invited to work somewhere else. Well, that's what happened. And then, so I started assuming more. More groups and 21, never forget, we did, you know, biannual performance evaluations. And to do 21 of them, I was just like, I can't deal with it.

So essentially you did 40 a year. 40 plus a year.

For a year. It was over. Just over a year. And then it shrank down and then. But, you know, the largest team I've managed was over 181 people globally. So I'd see that when you have to think globally as opposed to kind of just in one office or across multiple time zones, it really does take managing to a different level.

Oh, totally. And now I understand now with the 40 plus performance appraisals, why y' all reached out to me. Because we've got a chapter in there on ditching the performance appraisal and replacing it with something that gets feedback more frequently and takes away less time. Yeah, totally. Now I get it. It's all coming clear to me now.

So.

So I mean, I mean, that is a. That's a valid point. You know, like a company, for a company to sit down with an employee twice a year, you know, it sounds phenomenal on paper. You know, like, logically it says, well, wow. I mean, there are companies where people don't even talk to their managers like, hey, this is what you're doing, right or wrong. There's no feedback. And, you know, one of the things that I just always did, and I've done it now that I have more of a virtual team here in my own company is, you know, I provide feedback on an ongoing basis, not just. I mean, it's almost like a daily. Just rhythm. It's not something that you should do, hey, you know, once a month, or to me, once a quarter, once every six months. It should be just in the normal conversation, hey, this is a way that you can improve. This is a way that you know that. Here's some feedback for you. What do you think? How could you execute? On what, on this piece of information or how would it take this project and do, how would it, how would you have done the project differently had you known this or seen it from this aspect? So I mean, I do agree with you. Performance evaluations, whether it's once a year or twice a year or even quarterly is ridiculous. It should be an ongoing day to day ebb and flow.

Yeah.

And David, I've never worked for a big company. You know, my company now is basically all virtual. And you know, I don't even think of myself necessarily as a manager. I think of myself more as somebody that just gets stuff done. And hopefully, you know, the people that are aligned with my mission are working as passionately as I am. I don't have any kind of structure or, you know, you know, HR policies or anything like that. Like, we just want to get stuff done. And if it's getting done, then we say things are getting done and if they're not getting done, why aren't things getting done? And it's, you know, so I think that, you know, I'm on one end of the extreme, that was on the other end of the extreme. You know, who, whom is under new management for, I mean, assume it's for everybody because everyone at some point needs leadership training. Am I thinking about this correctly or am I off?

Yeah, well, I wouldn't, I wouldn't say it's for everyone because like if you want tips about dog training, that's, it's not your book, but okay, yeah.

Anyone that's interested in, let's say in.

Yeah, totally. Well, if you, I mean, if you use a great term, which is we just try and get work done, we just try and get stuff done. If that's the goal, then yes. Now whether that means you have any power according to the organizational chart or not, there are things in there that you can sort of benefit from. Ideally, you know, like, I wish I could like secretly put a copy of this in the mailboxes of all of the Fortune 500 CEOs and hopefully this becomes a top down thing. But the reality is the most common person that picks up under new management is the person that, oh, I've got a team of five or six people. I'm frustrated because the systems that I have to do as mandated by the company or in the case of an entrepreneur, the systems that the company I left to start my company did, and hence I emulate them, are clearly not working. What else is out there? And you know the goal isn't to give you a model, right? I don't have like, you know, a slideshow with four boxes and a pitch for a consulting gig at the end of this book. My goal is just to. To share stories of these are different ways that companies are doing it in line with the principles of what tends to work now so that you can figure out how to either copy it exactly or do something similar. And hopefully not just in the case of here's what you do with your team and your company. But even an individual. Like I've had a lot of people write me since the book came out and say, you know, like, hey, this was a great read to understand why I'm so miserable and thank you for helping me figure out like where I go from here.

Okay, can you. Would you mind sharing a story of the old way managing and then contrast that with under new management's principles and how it should be done?

Yeah. So there's a bunch of different practices we go through in the book. Lucky number 13. Actually that just was a default to what we arrived at. I wasn't intentionally trying to do 13. And probably one of the most interesting that resonates with what we've been talking about right now and resonates really with you and what you do, Mark, is there's a chapter called Fire the Managers. And it's not about getting rid of management, but it's about this kind of realization that for a lot of teams, the tasks that a manager does can be spread out among the team or can be largely given to one person who is also sort of a team member in the muck and the mire doing the work with them. Part of that is because of automation and the ability to kind of keep tabs on more people. As Scott proved, you can keep tabs on 20 people. It's a little mind wrecking, but if you streamline some systems, you can keep tabs on more people or you can have the same number of group but also be a manager contributor type of role. But that's really kind of this core idea is not get flatter for flatter sake, but this realization that truthfully, the whole idea of a manager came out of an era where our job was to run a factory. Our job was to create a widget. And how we make that widget only changed once a year when we made the updated version 2 widget. Right. Think about it. Like a car company, for example, we only do one model a year, so we only actually need to redesign stuff once a year. The rest of the time we need to tell employees exactly what to do and have them do it again and again and again and again and again for that year. Well, if that's the case, then the management role as an individual becomes really easy because it's easy to get your head around what they need to do. But when it comes to solving sort of complicated problems, we have this, you know, we have this job to do. We don't know what obstacles we're going to hit when we begin this task. We don't know how we're going to get delayed. We don't even know what the constraints of the problem we're trying to solve are yet. When that happens, it's a whole lot harder for a manager to dictate out exactly what people's roles are. It's a whole lot more effective for them to come alongside and say, okay, my job is to get you the resources you need to be a resource to you. But I have to trust that you know more about how to do the work than I do, because you're the one actually in it, doing the work.

You know, I think that David, you hit on a key point about, you know, like the automation, getting rid of the manager piece. I mean, you know, like when I think about, you know, some of the, some of the challenges that I see employees continuing to have in the workplace, you know, a lot of the systems that they deal with, they have not kept up. Employee facing systems, internal systems are like behind the curve. Everybody has invested in kind of customer facing systems, you know, like kiosk or technology that the customer can see, websites that make things streamlined. And then on the back end, especially in some of these older companies, is very heavy systems, you know, that are still probably analog kind of systems that are paper, you know, kind of paper intensive. And then the employees are like, I need more people. And there's no streamline that's been built up because there's been no automation of the work. You know, and I think that if you're able to go back and companies, you know, whether they're small starting out or older, think like, how can I automate this? How can I automate this so that you don't necessarily have to have that manager per se, but you can have someone that oversees the work and oversee this group because the systems kind of run the business for them.

Yeah, well, and you know, you actually, you hit on a much Bigger point there about employee facing versus customer facing. And this is actually one of the other practices too is this idea of, you know, we have a mentality that we need to put customers first, that all of our investment dollars need to go towards increasing customer satisfact and a bunch of other things. And the truth of the matter is that customer satisfaction isn't a goal, it's a result. The goal is employee satisfaction. The people who actually touch and interact with the customer, they're the company to that customer. Doesn't matter who's back of house. The people that are front of house interacting with customers are that company. And so systems that put customers first at the expense of those frontline employees are almost doomed to fail. But the companies and the systems that put those employees who interact with the customer first, give them what they need, become a resource to them in some cases. You know, I look at, in the book, I look at companies that said they flipped or at least turned the hierarchy on its side to really emphasize this idea that our accountability is to the people who interact with the customers because their accountability is the customer. That's really the only recipe for lasting customer satisfaction.

You know, it's interesting is I just read an article about Danny Meyer, Shake Shack and, and David is shaking his head. David, you'll probably tell the story better than I do.

Well, I mean, Danny's a great example because I mean, he's the founder of Union Square Hospitality Group. I actually don't currently know at this moment what his official title with Shake Shack is because after they went public, all sorts of stuff changed. Thank goodness the recipe didn't change though. It's still amazing. But all of his restaurants, whether that's the bigger high level Frou Frou ones or Shake Shack, have this idea of we need to figure out what we can do to put customers first. Because the only way we get raves from, the only way we get repeat customers, et cetera, are from waiters and cooks who are fully engrossed in the process and know that we have their back toward that end. He's also, I mean, he's been experimenting with a bunch of different things. He was one of the first people, large scale people in the restaurant industry to look at whether or not tipping made it like more difficult or less difficult for employees to do a great job. And some of his restaurants now have experimented with eliminating it entirely. Which the thing that I found was most interesting is what he pointed out is that while tipping might have a good increase in like incentivizing employees, Waiters, front of house people to treat customers better. Truthfully, if you screen them out in the interview process, you get people who will treat customers well. But what's happened over about 30 years is back of house cooks, chefs, et cetera. Those salaries have not gone up. They're not tied to tipping at all. And so he basically saw it was like, that's not fair. We need everybody who's touching the customer, whether it's cooking their food or interacting with them, needs to know we have their back so that they can do their best work.

So how does this apply to someone like, you know, Scott and I that might be working with virtual assistants, let's say in the Philippines or India or Czechoslovakia, Name the country, right? And then we might have somebody US based. You know, how do you think about management from that perspective? Or is it not different at all?

So, I mean, some things are obviously very different, others are not all that different. And truthfully, this is something that is universal. I think most companies are having to deal with the idea that this full time employee, part time employee, independent contractor, those three buckets are no longer sufficient to describe every type of person who works for an organization's goals. Really, to me, I think even if you don't have employees, if you manage just a fleet of independent contractors or they are employees, but they're in a variety of different locations, you still to some extent need to sketch out what is the value zone of the organization. So who are the people that your customers interact with? Probably one of the most commonly outsourced things to other countries for US based businesses is things like executive assistant and other kind of administrative tasks. And that works great unless you also need that person to interact with potential customers. I can't tell you how frustrating it is to interact with sort of those virtual assistants as a customer when you're trying to schedule something with that person or whomever because they're not actually there. Right. So I have no problem with EAs and virtual assistants and that sort of thing. Unless they're in that value zone. Then we need to think about how close to us do they need to be? How much interaction does there need to be between us and them? Do they have everything they need in order to interact with customers? Well, so it begins there with really deciding what's the value zone. By definition, the value zone is any role that actually is customer facing. That's where we need to focus on, am I giving them enough resources to do their best work?

Scott Todd, what are your thoughts?

I agree.

I think that, you know, I mean, how do you do with the doctor?

Right?

You got it. I endorse them.

As my wife would point out. I'm not, I'm not a real doctor. She's actually the real doctor, like in the hospital saving people's lives. I'm just trying to make better, like trying to make little parts of their work day better, that's all.

You're a doctor to me, don't worry.

Thank you.

So David, who's doing it right? What CEOs or what companies you admire and why?

So the two, I mean there's a bunch of, I think there's 50 plus companies that are profiled in the book. The two that come to mind the most, I'll give you one that is largely everybody's in the same room and one that is super virtual. So the first would actually be the company Sumall. They're a social media analytics company and I initially reached out to their founder, their CEO, Dane Atkinson, about one of the practices and then this weird thing happened. I was interviewing him, I think the second time I came, I had an in person interview with him the second time and we're chatting and we're talking and he kind of started interviewing me because he wanted to see what else I was going to be writing about. He wanted to learn what else maybe he could do and implement. But as we went through the list, he was already experimenting with probably five or six of the different practices. And that's not normal. What's usually normal is that a company will get it right in like one or two areas. But he was really committed to constantly iterating and experimenting with their practices, their policies to make sure they were doing it right. So some, all in New York City. The other is actually Automattic. We know Automattic, they are a hugely virtual company. Matt Mullenweg is their founder, their head. They create WordPress which powers like a quarter of the Internet, right. And a bunch of other really cool tools. And, and I mean they do a bunch of things. Well, their accountability systems are great, but one of the things I admire the most about them is their use of trials to make smart hiring decisions. So when you come on and they, and they want to have you, it doesn't start with an immediate offer. It starts with about a four to six week trial. You're on a real project, you're getting real security clearance, you're working with real customers, all of that sort of thing. But the idea is, let's see how you work then. Truthfully, why I admire this so much Is that, I mean, I believe from a management standpoint, whether you're a middle manager or whether you're the CEO, the single most important job of people who are in authority, the single most important thing they do is decide who comes into the company, what new people are brought into the company. And so in Automattic's case, the thing that they've decided is the best way to do this is to see how they work in the company and then make that decision. And I really admire that. I think it makes for a strong culture and it makes for a lack of really bad hiring decisions. I think that you can count the number of sort of hiring of yeses that didn't work out on one hand that they had. They dramatically reduced their error rate when they moved to this trials process.

Yeah, Mark, I mean that's, that's, I mean, you know, to relate that back, I mean that is really what we, you know, you and I, we kind of teach that through hiring A VA's, is that, you know, the thing about our virtual team is that what's nice about is that we're not making this long term commitment up front to, you know, freelancer. We're saying, hey, here's a project for you. Let's see how it works out. Let's see if you're a fit for our culture. And if they're not, then, you know, we were okay to move on. You know, we can test it and you know, if they, if they fail at it miserably, then we move on. If they are close, we can coach and help and engage and get them going. We do that. And you know, if they're just a solid fit, then we start giving them more work immediately.

Yeah, absolutely. I mean, we had a VA that was trying to work our posting domination system. Two weeks later, fired. Didn't work out, but it was, you know, it was, it was a, it was a small bet. Right now we're doing so you know, somebody else. So, David, I'm gonna give you a tough question. Okay, Tell me or tell me. Tell us something we don't know about what makes a manager great.

I would say, oh, I can't, I can't. I'm. Do the politician thing again and answer the question I want to answer. I don't know what's going on in your head, so I don't know what you don't know. I'll tell you what I didn't know. That's why it's so challenging. I know, right? I'll tell you what I didn't know when I was writing the book and realized after other people had read it and we were talking about it, and that is that there's 13 different practices in the book. And they all, on the surface seem to be things to implement, things you should add into your business. And the truth is it's actually kind of the opposite. In almost every story, what you find is there was something blocking employees from doing their best work and the manager or the leader eliminated it. Right? So whatever it was, whether that was performance appraisals like we talked about, whether that was the structure, whether that was the method of communication like email or whatever it is, they're all actually practices of elimination. And so that's, I think, you know, obviously number one thing a manager can do is decide who comes into the organization. But maybe within the top five is figuring out what things are holding your people from doing their best work, what things are preventing them from doing that, and finding a way to eliminate it so you can set them free. It's not genius, it's just something I didn't even realize till after I wrote the book.

I think it's, I think it's, you know, I mean, but that should come from just constant feedback, right? Like that should come from the normal everyday feedback of hey, what's, what's standing in your way? What's, you know, where are the challenges? You know, all that stuff.

Oh no, it totally should. It doesn't, but it totally should.

All right, well, David, we're at that point now in the podcast where we get to put you on the spot. Ask for your tip of the week. A website, a resource, a book besides your book that is actionable, where the art of passive income listeners can go right now, improve their businesses, improve their lives. What do you got?

Okay, so my tip of the week as far as resource, website, et cetera is probably my own. I know that seems self serving, but@DavidBurkus.com resources maybe you're not the reading type, but you want to get all of the gems. We have a ton of different resources from under new management, from my book before that, the myths of Creativity and then just a bunch of other evidence based stuff to be able to work smarter, lead smarter, et cetera. So davidburgus.com resources I would take that action now. You're probably listening to this on a smartphone anyway, so I would just pull open your browser and go to that. And while you're in the podcast app, you may also want to go over and type in the phrase radio free leader that's my podcast. If you like listening to shows, you'll like it. If you hate this show, I don't know why you're listening to it, but you'll also hate mine. So whether you love it or hate it, Radio Free Leader is a great resource similar to what you love about Art of Passive Income.

All right. I love it. Scott, Todd, your tip of the week.

All right, Mark, this one. David is familiar with this one.

One.

It's one that I actually, actually did this back in February. And it really changed, changed my view of myself in the world. And I see that he actually just did a podcast with this person. So you got to go over to howtofascinate.com okay, howtofascinate.com and you take this quick test, and this test will tell you basically how the world sees you. And you know, when you normally do these management tests, they always tell you, like, how you see yourself. But if you can, if you can get insight just by answering a few questions on how the world sees you and where your strengths are, it allows you to go all in on your strengths and know where those weaknesses are. But why not exploit or use to your advantage however you want to say it, the things that people see about you? And I did this back in February. I did it on my own, like February 1st or February 8th, something like that. And it was amazing to me to see how the world saw me. And then once I, once I had that insight, man, I've been leveraging that like all year long. And I can tell you it's probably been. It's been a phenomenal year.

Wow. I, you know, I just heard Sally Hogshead on a Jo Polish podcast.

Yeah.

From Genius Network. She was talking about how to fascinate.

Yeah. And she's incredible.

That's fantastic. I'm going to do this right now. In fact, you can just finish the podcast, Scott, while I go through my assessment. My tip of the week, it's going to be get the book right. It's David Burkus dot com. I'll have a link to it. Under new management, how leading organizations are upending business as usual. Found at all the finest bookstores that are still left in business. Their managers were not following. David. It's nice. But that being said, you know, I do think that the TED talk that David did is really, really important to watch. David, you were at TEDx, is that right?

Yeah. So I spoke at TEDx, University of Nevada, and then the talk was chosen. It's actually really cool. The ted, the Folks from TED email you and say, you know, hey, we need your script, we need all of the angles from all of that. They re edit the entire talk and they put it on Ted.com, which was really cool. That happened in about I think September. It showed up on the front page of Ted.com and it's been, it's been a crazy ride. Like 1.2 million views or something like that and counting. Which, which means I get lots of really, really cool emails and lots of really, really hateful emails. But that's, that's making an impact. You're going to get some haters.

No, it's, you know, absolutely. And if you haven't read Jay Bears hug your haters, that's another tip of the week. So why you should know how much your co workers get paid. I'm a big TED fan and that has been on the front page for like a long time as David said. So now I get to name drop all month. And so David Burkus, thank you so much. Are we good?

Yeah. Thank you so much for having me.

Is there anything we forgot to ask you that we should have asked you?

No, this is, this is really, really pretty solid. It's kind of funny that Scott's tip of the week was Sally Hogshead because I just was posted that on my show today and was re listening to it and she is just brilliant. So I could, we could go another 20 minutes on her. But to save your listeners, we'll just have to have her on your own show.

We will, yeah.

What are you though?

What are you? What, what is, what is your.

I am a victor.

So am I.

That makes so much sense.

Yep.

Victors unite.

Totally.

All right, now I've got to go through this. If. And if I'm not a victor, am I going to feel badly?

No, no, no. It's only the best classification. It's okay, Mark.

Great. I'm not going to do it. I'm scared to do it. But you know what? I'll do it and then I'll just lie like I'm a victor too.

Yeah, I think we'll know because it's a test about how we see you. So I think we'll know if you're lying.

Yeah. Oh, okay. So am I Victor.

I don't know.

I don't think so.

Alright, well, I want to thank David Burkus@DavidBurkus.com Scott Todd from Landmodo.com ScottTodd.net and posting Domination.com TheLandgeek and the only way we are going to get the quality of guests like a David Burkus to continue coming on this podcast is if you subscribe, rate, and review the podcast. And if you do so, we're going to thank you by giving you for free the $97 passive income launch kit. Just send the screenshot supportthelandgeek.com and again, this podcast is sponsored by Loan Geek, LoanGeek IO. Automate your payments. All right, should we do it? Are we ready? Ready let. I'm gonna do a countdown.

We'll do a countdown. Ready, go.

One, two, three, let freedom ring. David Burkus is like, this is the last time.

You totally didn't warn me about that one. I didn't know that was a thing.

Because, you know, if we did, I don't think he would have done the podcast.

Well, no, I just wouldn't have done that.

Oh, okay. Now he's taking notes. Do not do any kind of tagline at the end of my podcast.

Under new management.

No.

Pass. I am probably going to steal the idea of the smart bribe of a $97info product to get a subscribe rate and review. Definitely stealing that. That's genius.

Thank you. Thank you. I try. All right.

You guys must be good at passive income stuff. That's what I'm learning from this interview.

We're really good at it. In fact, you should have us on your podcast. We'll talk about it and then get us into a TED Talk. All right, I think everybody, think all the listeners, and we'll see you next time.