Today’s special episode features part 2 of a platinum-level coaching call Cameron Herold had with his coaching clients, with an in-depth analysis covering various topics from casting your vision to bringing the best out of your projects.
This episode continues on its offering to bring clarity with real-life examples as told through the experiences of the other guests on this call. You’ll learn several methods to set the right culture and how to manage your team to get the best productivity.
In This Conversation We Discuss:
- How to automate and get more done with fewer people
- Using situational leadership to gauge your employees based on their skill and commitment to doing the job
- How to determine what your team is good and bad at
- How to get the maximum ROI out of your team
- The impact of inflation on business
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I’ve had to do this with so many clients over the years. I’ll tell you what I tell them first and I’ll tell you where I learned second. What I tell them is once you’ve listened to all the reasons why they can’t fire somebody. If you got a phone call now and you found out that Bob had been hit by a truck and was dead, you would have to replace him. “He’s dead. Sorry, you don’t have any time.” You would quickly make a list of the five things you have to do to cover for him and start recruiting.
What are the five things you would do? Make that list, fire them, start working on the five things, and get recruiting. Where I learned this was one morning at 1-800-GOT-JUNK?. At 8:00 in the morning, the phone rang. I got a phone call and Brian got a phone call at the same time, and we both turned to look at each other. I was speaking to the Portland Franchise owner’s general manager. Brian was speaking to the Portland Franchise owner’s wife. We found out that he had just committed suicide.
We didn’t have a plan for what would happen if a franchisee died because we only had twelve franchisees. We weren’t at the 330 franchises yet. We didn’t have systems for this. Brian broke down crying because he’d known him forever and helped recruit the guy. I was pretty new, so I went into the COO role. I went into the boardroom. I said, “What are all the things we need to do to cover this?” I realized Brian couldn’t even handle that. I’m like, “You go home and decompress. I’ll figure out a plan.” Within a week, we had the whole thing completely operational. To your point, you have to rip off the band-aid. Folks understand this. Women still have little tiny hairs, but you got to rip that off. It doesn’t make any of the hairs hurt any less when you’re ripping the thing off.
It’s crazy because you always coach us, Cameron, that the other team members will step up. They’ll perform better. You can perform better with fewer people, etc., and it’s crazy how it’s true every time.
You think about the hockey team analogy. If you watch any hockey, a team can have somebody in the penalty box and play shorthanded and still score a goal. In some ways, I’ve always felt like they sometimes should play shorthanded because there’s one less player on the ice screwing things up and getting in the way. I know you can be a little nimble.
The working title for my first book, Double Double, was How To Get More Things Done By Less People Faster. As a company, I think we have to revisit that as a strategy meeting. I did this with a client. It was Guy Berry from Redirect Health. It was his CEO. I said, “What would you do if you had ten times the amount of customers coming in next month? What would you have to change?”
He was worried that they were growing too quickly. They’re scaling fast and he wants to slow down on marketing. I’m like, “Spend more. I want you to grow even faster.” What we’re looking at is what are all the things he would have to change if he had ten times the amount of clients without adding people. He looked for things in the business that could be systemized, automated, and optimized, and how they could do things as a group.
He realized they could change a few things that are pretty simple that would allow them to scale even faster, but we often don’t stress test that. The mid-level manager, the early stage manager like the more junior managers who are managing people for the first time, one of the core problems that you have with these people is their solution to every problem tends to be, what?
We need more people.
“I need to hire someone to do this.” No, you don’t. Maybe you do but we’re not going to hire someone. I think that’s where we have to get it to. We can’t let their solution be hiring more people. We need their solution to be optimization, automation, saying no more often, skill development of their people, and helping their people with productivity. Josh, you even said this earlier, “We’re hoping that she’ll work harder to get better results.”
Working hard isn’t the solution. You’ve seen a fly on the window working hard trying to get out the window. Sometimes, it’s smarter if the fly turns and goes out the door that’s right over here, but working hard they often end up dead on the windowsill. That Protestant work ethic was a bad lesson that our grandparents taught our parents, “Work hard.” This is where Gen Z and Gen Y get it more than Gen X and Baby Boomers.
They’re all about optimizing stuff, automating stuff, outsourcing stuff, and offshoring, so they don’t have to go to work. They’ll offshore their job and they’ll work for an hour managing seven people in the Philippines to do work with them. That’s not illegal. It’s just smarter than their bosses. We have to look for those opportunities in our businesses as well. How do we get more done with less people faster? How do we optimize the business? How do we automate the business?
Anybody that has good resources, that’s my biggest worry. We have a manager who’s getting ready to have a remote employee due to family circumstances. She sits right next to her team now so she can manage what they’re doing. This will be a totally new experience for her managing a remote employee. My job is people development. I want to help her understand what would be best for her to do in order to manage her employee so that he is productive. We know he’s a productive guy in general. We wouldn’t be allowing this if we didn’t see success but I am a little concerned.
Some people hate this but it works. It’s daily stand-ups like daily check-ins. If they’re on Zoom or whatever, it’s 15 or 20-minute in the morning or afternoon just checking in. It keeps them engaged, and the manager will know exactly what’s going on.
Are you on the right stuff? Are you worried that they’re not working? What is it you’re thinking about, Heather?
A little bit of both because it’s a new situation. I worked from home for ten years. I remember transitioning from being in an office into a remote position and wanting to stay in touch and wanting to be a part of the culture and the community still. My manager was hands-off, so I didn’t necessarily engage in that. I had to figure it out myself. I want her to be more proactive and I know I need to train her on that. I didn’t know if anybody had, other than they will do daily huddles. She’s great at her daily huddles. I was like, “You got to make sure we have a plan for that,” but what other things, especially to make him feel engaged still because we do a lot here. Being in-person, we do a lot of stuff that is incredibly engaging with our employees.
Is anyone using any of this software that exists now that kids are using where they’re doing virtual study halls, where they’re sitting and studying and listening to music and doing work together but they’re all over Zoom?
Study verse. We haven’t.
Do we use that, Matt?
No, but I think we taught about it on this call and I have it on my notes. It looks cool.
I don’t know if that’s the thing. Heather, how about having your company do Vivid Vision or even asking them what they want to be working on? Have you had them decide the core areas of the business that they want to be focusing on, and getting them more engaged? Something about Gen Y that’s interesting is they have to see value in their work. They have to see the work that they’re doing matters. If you often show them the goal and allow them to be part of the planning and figuring out how to get to the goal, they’re going to be more engaged versus telling them what to do.
That totally makes sense. I think that if they do feel like they’re doing something rewarding and they can see the end result and what it’s contributing to, it would help.
I’ve even seen it with my kids. I used to ask my kids like, “What do you guys want to do for dinner?” They’d give me the three different places that they’d want to go. I’m like, “No, I don’t want to go there.” As soon as I shut down their ideas, they didn’t buy into dinner at all. I realized that if I gave them a theme and said, “I feel like Italian. What Italian restaurants do you want to go to? I’m thinking Italian or Mexican, where do you guys want to go?”
If you give them that rough direction, that may be something that helps them as well. It’s like, “Here’s our goal, here’s where we’re headed, what are the core projects you want to work on? Here are three projects we need you to do.” This is where situational leadership comes in. If you think about that module in the course, as well as investing in your leaders. Situational leadership, the reason it’s the first module is it’s the core skill that every manager and owner needs to be good at.
Let’s do this as an exercise. Heather, write down five projects that are on his plate. Josh, I want you to pick an employee. All of you pick one person who reports to you or that you work with. Put down 3 to 5 projects that they’re working on now. Write down what those projects are. You can short-form it, scribble it, or however you want to do it.
Once you’ve got your five written down, put your hand up so I can see that you’ve got it done. Now for each of those projects for this person, the way situational leadership works is we lead people on a project-by-project basis differently. We also coach and lead people differently. You could have two different people running the same project. You could lead them differently, or you could have one person running five projects, and you have to lead them differently for each of the five projects.
You lead them based on two things. Their skill development and their commitment on a project-by-project basis. For each of these projects, I want you to give them a rating of 0, 1, or 2 for skill. How much skill do they have at this? Zero for no skill, 1 for some skill, and 2 for high skill. On this project, 0, 1, or 2, and do it for each of the five projects.
After you’ve done that, I want you to give them a rating for commitment. Commitment can sway or vary based on if they’re overwhelmed, or if they’re busy with family stuff or they’re worried about screwing up or if they’re new and they don’t want to disappoint. Maybe they don’t like doing it. What’s their commitment level? They’re either not into doing it which is a zero. They’re into working on it which is a 1, or they’re excited about working on it, that’s a 2.
Give them a point value for commitment 0, 1, or 2. Now I want you to add up the points for each project. Project one, they either have a total of 0, 1, 2, 3, or 4 points, project two, project three. For each project, what are the total points for that project, 0, 1, 2, 3, or 4? Do any of you have a project that someone is working on where they have a total of zero points? Give it to someone else. They’re not into it. They’re not good at it. You’re pushing the rope. Find somebody else who is into it and good at it, and give it to them. No judgment. It’s like a CEO who’s like, “I suck at IT. I’m going to hire a head of IT.” It doesn’t mean you’re a bad CEO. It means you’ve hired somebody who likes IT and they’re good at IT.
Does anybody have a project where you have a total of one point? They have a total of one. This is when you micromanage the crap out of them. This is exactly what they need. They need to be micromanaged. They need to be given step-by-step instructions on what to do and how to do it. They don’t need to be told why it happens that way. They need step-by-step instructions. It’s like a two-year-old that you’re teaching how to pour juice. They don’t need the theory of why water or liquids flow the way they flow. They need you to show them how to do it, exactly how to do it, and hold their hand while they do it, and then cheer them on when they’re doing it because you’re going to raise their confidence as they’re doing it.
If they have a total of two points, you’re going to show them the plan, give them the whole step-by-step instructions, cheer them on lots, and you’re going to explain why we do it that way. You’re going to start giving them insights as to how and why you come up with the plans like that because you’re going to grow their skills so they can start coming up with their own plans to do things as well.
If they have a total of three points, you let them come up with the plan. This is like that woman who you want to do better. If she doesn’t have the skill or is worried about getting fired, you might need to create some plans for her to get better. She might be too nervous to come up with her own plan or maybe she’s not. I don’t know. What situational leadership will tell you if she has three points, she comes up with the plan. You make sure that she knows or that they know. You have an open-door policy. You’ll be there to support them. You’re going to cheer them on if they need it as well, but they’re going to create the plan and you’re going to help them with the plan if they need it.
Lastly, if they have four points on the project, does anybody have somebody with projects with four points? Give them the project. Tell them what the output or the goal needs to look like and what completed is like, and let them go. Don’t follow up. Don’t cheer them on. It’s like my son backpacked around Europe for two months by himself, organized everything, and planned all his flights.
When he was with us in Estonia, he had to get from our Airbnb to the airport and I was going to book him a taxi and wake up in the morning. My wife was like, “He just traveled for two months around Europe. He can get to the airport on his own.” I didn’t need to do it for him. Secondly, if I said, “Good job getting to the airport on your own.” He’d be like, “Dad, I just traveled for two months. You’re cheering me on for something I already know I’m great at. It’s pointless. You’re patronizing me.”
Our style has to adapt. You don’t want to cheer people on. It’d be like me saying, “Scott, good job walking.” You’re like, “I’ve been walking for 25 years.” Be careful. I don’t coach any of my clients on what they do. In coaching the team at wishing you well and Tyler, do you know that we’ve never once spoken about the Amazon platform and selling anything on Amazon? I don’t know how to sell anything on Amazon. I don’t coach him on that. I don’t coach on SEO. I’m terrible at SEO. I don’t coach on what you do. I coach on how to grow companies.
Cameron, I have a question.
Go ahead, Josh.
My COO, Richard, is an incredible student of the COO Alliance. He soaks up all of the stuff and brings it to our company in great quantities. It was about two years ago, he brought to us the situational leadership framework altogether. We had a company retreat. We spent an hour and a half. I think we watched a video of you explaining it in different segments. Since then, we’ve integrated it into our quarterly projects system, according to which everybody on the team has between 2 and 5 specific projects or rocks as they’re called in the EOS methodology.
Here’s my question. Right now we’re having each individual self-report basically give their own assessment of what is their skill level and what is their commitment level. What hit me is that I don’t think we’ve had our managers review that critically and ask, “Does this seem reasonable?” I took a moment while you were talking to look over our current quarter’s rocks. I’m seeing a ton of 2s for skill level for things that people have never done before.
They’re rating themselves too high. By the way, you’re doing good practice with it. Bring it now into your weeklies as well like on your weekly coaching, one-on-ones, and leadership team meetings. Review the situational leadership style on every project all the time. Make sure there’s a meeting of the minds with the leader and the subordinate so that both people agree on how they need to be led and how to lead them and how to support them. It grows them. It grows their skills and it grows their confidence in saying, “I suck at this and that’s okay. It’s not like a shame thing.”
I was coaching the CEO of Sprint. He ran the 82nd largest company in the United States and he was asking me for advice on some stuff around people. If Marcelo Carré can turn to me and ask for advice when he’d already sold his first company for $1 billion, maybe it’s okay for a first-year manager to say, “I don’t know how to do something.” We need to give them the confidence that it’s okay to do that. Sometimes that’s by us as leaders saying, “By the way, I’m only at two points on this project. I’ve got one on one, or I’m high skill but I don’t love doing it because it drains me of energy. Can somebody take this project for me?”
Is it better to have people self-report for this or to have their manager do it?
It’s both sides. The self-reporting is the next level where you’re getting them to ask how to be led, but the meeting of the minds is the manager also saying, “How do I think they want to be led? Are we on the same page?”
I think that’s what’s missing. The manager is not thinking critically and they’re not using it to inform how they manage people throughout the quarter. We’re asking every week, “Is this project on track or is it off track?” If it’s off track, then that becomes an issue. Maybe if we have time, we can figure out how to get it back on track. We have an issue in and of itself of people being over-optimistic with their rocks. Sometimes they say it’s on track when it’s barely hanging on by a thread.
That’s the key. The good thing is they both understand what it is, then it’s practicing it and working on it. Situational leadership is something that the team at Starbucks and the leadership team at Starbucks work on every quarter. They get more training around it. I would have all of your employees read the book, The One Minute Manager by Ken Blanchard, which is based on the theory of situational leadership.
I would have them all watch the module and the Invest in Your Leaders course but watch it again three months after first doing it, and watch it again three months after the second time doing it. Keep revisiting and keep learning it because then you keep taking it to the next level. What I do, let’s say I’m ready to phone an employee or hopping on a one-on-one coaching meeting, I very quickly think to myself, “I’m going to coach them on this. What’s their skill level? What’s their commitment level? How do I coach?”
I try to cognizantly think about that. If I was in the physical office and I was going to hop up and walk down the hall to Brandon. As I’m walking to Brandon’s office, I’m thinking about, “Is it S1, S2, S3, or S4?” I have franchisees that worked for me at College Pro Painters 30 years ago now back in 1993, who will call me up and say, “I need you to S1 me on something. Tell me what to do here.” I’m like, “Okay, awesome.” It’s not a bad thing. It’s saying, “Teach me this.”
These are the stuff that it’s why when we grow our people’s skills, it starts to supercharge the organization because they’re all speaking from the same playbook. If you build it, we had a mantra of the no-blame environment that people don’t fail. Systems fail. It’s like the Michael Gerber mantra. Our employees didn’t feel bad about saying something was broken or something wasn’t working because they realized it was no one’s fault. It was a system that was missing or a system that was broken.
They didn’t feel bad about saying they didn’t know how to do something because they realized that we got excited about getting to coach them and grow their skills and grow their confidence. I had somebody say, “Are you worried that the remote employees aren’t doing their job?” I said, “If I’m worried about it, it means I have the wrong employees.” If I hired the right employees who are the right cultural fit, and who are driven, I don’t care if they’re working nine hours a day. I care if they’re getting the results that I need for the money that I’m paying them, then can I continue to give them more stuff so that they can get the results for the money that I’m paying them or do I have to pay them more to get those results?
All I care about is the ROI. I don’t care if someone works from 9:00 to 5:00. That’s a pointless archaic process. I don’t want to think in my mind that I’m paying them to do 50 hours work and it’s only taking them five. I should know more about what they’re doing. I should understand their jobs more to know what’s getting done and that I’m paying for the ROI.
Sometimes that’s getting an activity inventory, where you ask them to show you all the stuff that they’re working on and how long it’s taking so that you can understand optimization, how to coach them better, and how to automate things, or how to outsource, or how to get some stuff off their plate that could be outsourced to the Philippines or could be automated. Does anybody do much of where you dig in and look at the stuff that’s on people’s plate, and you look at the projects that they’re working on, etc?
We did this with our Philippines team. We had five Philippine employees and everybody was saying to hire more. I sat down with the managers of the Philippine employees. They were all like, “Nobody’s played us full.” I’m like, “Okay.” We had two new positions available and we took the five employees and basically moved two of those employees that we trusted into these positions, and then reallocated resources of the other three, and found out that we can still do even more work with those five people. It was fascinating for people to think, “We need to hire more,” and there was no need. They were begging for more work.
It’s often again because the managers don’t understand how to manage, how to lead, how to measure productivity, and how to look for what the ROI is supposed to be. They don’t understand activity inventories. They don’t understand how to even approach the situation without feeling like a jerk. Our job is to grow them in those areas. The amount of money that can get wasted in a company that isn’t operating efficiently is the difference between massive profitability and none.
The only time I’ve seen and the only caveat to that is I was coaching somebody who was based in India. We were talking about a problem one day. He said, “I’ll hire ten people for that.” I’m like, “No you only need one.” He goes, “Cameron, one employee is $3,000 a year. I’ll hire ten.” I’m like, “That’s so not fair.” He would throw bodies at a problem because it didn’t matter.
That’s still $27,000 that could be used to improve somebody else’s quality of life.
You take that money and spread it over the rest of the employees too. I definitely see inflation is real. We’re seeing that everywhere. Is anybody working around that or struggling with that or seeing the impact of inflation on their business or on labor?
We are for sure on products. All of our clients are raising their prices, decreasing our discounts. Pretty soon, we will be passing that on to the end customer but it’s insane. Amazon in our world can charge you for anything. Even in Q4, we’re going to see an increase. I believe it’s going to end up being $135,000 more than what it is normally for storage fees due to the holidays. That’s even more than it was in last year, but we’re seeing it big time.
What are you doing? Are you raising?
We’re going to have to raise the prices to the end user on Amazon. We have to work through that with each of our brands because it’s a balance between what they’re selling on their own eCommerce site, and also at big box stores. It’s a very hard conversation to have with them about, “On Amazon, we can charge more because of convenience. If you’re not going to give us a discount on this end, we’re going to have to charge the customer more.” It’s a tough discussion to have with them.
It is for sure. I don’t know your business well enough but I think you have to, as a team, sit down and figure out how can you go to your customers and ask for more money as well and blame it on COVID and inflation. We’ve at least now been socialized by so much in the media about it and that it’s real that they understand, but we need to get them to raise their prices as well.
It’s more coaching too because again, it goes back to how to fire somebody. It goes back to not being too scared to ask for more from our clients. It’s not easy for some people. Some people are scared that the clients are going to say no or fire us because we’re asking for more.
They may. The reality is that if we have unprofitable businesses and clients, sometimes it makes more sense to get rid of those people. We can remove some overhead as well. We’re not in the nonprofit business. That’s why Steve Jobs got rid of 75% of the products at Apple when he came back in. He realized that he needed to work on the critical few products that were profitable and had enough gross margin and get rid of all the unprofitable products.