From zero to good: How to build your practice
Content Copyright © Cameron Herold 2017. All Rights Reserved.
I'd like to talk about being entrepreneurs, the journey of entrepreneurship, and how we can build better companies. Around the world, I've done paid speaking events in 26 countries on five continents and it's all related to how do we build world-class companies. So I'm looking at all of you as business owners—disregard the fact that you're in the industry that you're in. We're going to talk about the business of business.
So I want you to think of these two companies for a second: Google and Microsoft. Which of these companies do you think as being one of the best companies to work for? Almost no one says Microsoft, because Microsoft never really had the discussion about culture. It never really had the discussion in the early days, or even in the last 20 years, about how to build a world-class environment for people. And Google decided when it was starting that culture was critical. So we're going to talk a little bit about culture and how to build an amazing company that attracts employees to you. Because you're in a very competitive environment. You're not only competing against your business environment for new employees and customers, but you're also competing against every other business out there as well.
I also firmly believe that the number one metric you should have in your company is not revenue and is not profit and is not customer engagement. It's employee engagement. You should be obsessing about how happy your employees are. And if you take care of your employees, they'll obsess about your customers, and that's where all of your referrals, all of your profit, and all of your revenue are going to come from.
I think that too often we have that backwards; we focus on revenue, revenue, revenue, and we forget. Or we focus on the customer, customer, customer. The customer is not always right. Sometimes there's an exception to every rule. Sometimes the customer is wrong. But if you actually obsess about your employees, they'll take care of your whole business.
Twenty years ago, I was in Vancouver, Canada, where I was living, and I was invited to a breakfast. They invited 120 CEOs from Vancouver to the breakfast, and only 16 of us showed up. They were talking about vision. A high-performance sports psychologist talked about looking into a crystal ball. When he started talking about this while looking into a crystal ball, we all thought that he was a little bit flakey, we thought we had wasted our morning, and we weren't really sure why we were there.
What ended up happening was very profound. We learned how athletes visualize themselves performing the event and how they would literally lean out and picture themselves over and over again performing the event. In the business world, we have a similar process, but we've never tapped into it. And I'm going to teach you that process today. But high-performance athletes, the best athletes in the world, use visualization.
Now, in the business world, we found an example that works quite well. In the business world, there are homebuilders or contractors. Have you ever built a house or done a renovation? Remember the point in time when you were building a house or doing a renovation—you were really the CEO of that project. You didn't know how to do the electrical; you didn't know how to do the plumbing; you didn't know how to put in the cabinets or put in the Wolf stove. But you knew what you wanted it to look like.
Well, in the business world, the CEO or the entrepreneur is the same. Our job is not necessarily to know how to do it anymore, but it's to clearly articulate what we want it to look like. And when you're doing a renovation project, you give sketches and drawings and pictures to contractors, and they go away for a couple of weeks, and they come back and show you the blueprints—the blueprints that will make your vision come true. And then, when you sign off on the blueprints, they give the blueprints to the employees, and the employees can literally recreate your vision.
Well, in the business world, each of you has a vision of what your company looks and feels like. If I ask you over a beer to sit and talk to me about what your company will look like three years from now, you'd be able to really describe to me what your company would look like. Maybe you'd be going to 50 employees or 100 employees. Maybe you'd be doing $5 million in net income or you'd know the culture of your office. But you have a vision and an idea of what it looks and feels like.
The problem is, we often don't explain that to our employees. So the concept that I've created, or the system I've created, is called a vivid vision. This is being used by some of the top companies on the planet as well. The second-in-command of Sprint is a client of mine. I coached the person who owns the country of Qatar, the absolute monarchy. So this is being used at big companies, but also in most entrepreneurial companies around the world as well.
Have you heard of a company called 1-800-GOT-JUNK? I was the chief operating officer of that company. I took it from 14 employees to 3,000 in six years. And this concept of vivid vision was the number one thing we did. So I'll walk you through how to build it.
There's a very famous scene in the movie The Sound of Music where they're having a picnic. Imagine if you were to organize a company picnic, but it needs to be just like in the movie The Sound of Music. Do you have any idea what it looks like?
Is the picnic in the mountains, at a lake, or in a park? And where do we get the food? Do we get it from a hut, do we bring it in baskets, or do we get it from a grocery store? And, then, are the kids playing croquet, dancing, or playing baseball? I've had some people say the picnic was at a lake, they were playing croquet, and we bought the food at a grocery store.
But if you can't see what I can see, how can you possibly recreate what I want you to recreate? And, in the business world, we as entrepreneurs get frustrated. We talk to our peers and say, "I'm very intuitive. I have all this intuition, but my employees are idiots. I go away for two weeks, I come back and they've made all these mistakes. Why can't they read my mind?" Well, the problem is, you've never shared anything with them that allows them to read your mind. If you're the only one in your company who knows what the future of your company truly looks and feels like, when they're trying to recreate that future, they have no idea.
Do you have a vision statement or a mission statement? In classic business school, we were taught that a one-sentence mission statement was going to align people. But we all got our favorite employees in a room. We put our words up on a whiteboard. We voted on our favorite words. We took the seven words that were left, and that was our mission statement. Go team. It doesn't inspire, it doesn't align, and it confuses everyone, including ourselves.
The vivid vision is a four-page document describing your company three years from now. And it describes every aspect of your company. It's as if you're leaning out into the future describing your company. And you share that written document with everyone in your company. Now, if you're writing a vivid vision, you've got to get out of the box. You can't sit in your office and write this. You have to go somewhere around nature, somewhere that inspires you. And you take no laptop, no iPad, no technology with you whatsoever. You take a notebook and a pen. Even a few colors of pens. And you start thinking as if you went into the future.
I want you to design your business as if you're standing in December 31, 2020. You've leaned three years out from today, and you do a mind map describing every single aspect of your company. I want you to describe marketing, describe IT, describe finance. Think as if you're standing in your business three years from today, and describe every single area of your company. Maybe you put three points down about what your customers are saying about you. You put three points down about what your employees are saying about you. You put three points down about what your media are saying, what your competitors are feeling. You talk about your meeting rhythms, your company culture, your office environment. You describe it just like you were building a house. Then, your team can figure out how to do the blueprints to make your vision come true. But you describe it as if you're standing in the future.
Back in 2009, I was invited to MIT to do give this presentation to a group of entrepreneurs from around the world. One of them was a guy by the name of Sebastien Tondeur. Sebastien was from Geneva, Switzerland, and he owned a convention and meeting planning company. His company, MCI, organized meetings, just like MDRT does, all over the world. Now, Sebastien's company at the time was doing $120 million in revenue. He was making money, not a ton, and he was 34 or 35 years old at the time. He decided to do a mind map describing his company in 2012. And he organized all of his bullet points, all of his rough ideas, as to what his company would look like three years later. He then wrote the first draft of his vivid vision describing what his company would look and feel like and organized a four-page written document. And then he handed it off to a copywriter, who made it pop off the page.
When Sebastien decided to visualize his company and then share that final document with all of his employees, he had described the company three years later doing $500 million in revenue. It turns out that, three years later, he did $506 million in revenue with a $108 million in profits. In three years, he went from $120 million in revenue to $108 million in profits. In 2012, he leaned out again to 2015 and described his company as doing $1 billion in revenue, operating in 20 countries around the world. A fairly audacious goal for a then 38-year-old. He ended up missing the $1 billion; he came in only at $820 million in revenue.
But imagine taking your company from $100 million to $800 million in six years without worrying about how you do it, but clarifying it in so much detail that your team can start to figure out the planning process.
So, again, your job as the entrepreneur is not to know how to run your company. Your job is to know what needs to get done and then get the right people in place who can figure out how to make that happen for you. The vivid vision in your job is to get the rough draft done, pass it to a writer, and then get the design elements into it so that it really feels like your brand and it feels like your culture.
Now, I want it to be like a magnet. I want your final written copy to magnetize people and pull them toward you. A magnet attracts, but what else does a magnet do? It repels. I want your vivid vision to push some people away as well. You don't want to write this as a big kumbaya group hug. You know this. There are a lot of customers you don't want. You don't want somebody making $65,000 a year coming to you to buy insurance. It's just not really your target client. So you actually write your vision to push some of those people away. You actually publicly say, "We don't want you."
I met a woman the other day who only does insurance work for high-net-worth children of billionaires. "If your parents aren't billionaires, don't talk to me. And if you are the billionaire, don't talk to me. But if you're the child of billionaires, I will talk to you."
I know another woman who's in the insurance space and who only deals with female divorcées. "If you're a male, don't talk to me." She's written the vision for her company in such a way that she's pushing 50 percent of the demographic away, and that's OK because the other half is starting to think, Well, maybe you actually care about me.
In my world, I won't do work for governments. If a government wants to hire me to teach it how to run government, you've got to hire somebody else, because I don't like government. I don't like anything about government. I'm a huge fan of cryptocurrencies right now.
When you write your vivid vision, write it in a way that attracts people and pushes them away. The key thing that will happen here is that it will start to really align everyone. The people who matter will all know where you're going. Your employees, your customers, your suppliers, your potential employees are all going to be reading this vivid vision, because you're going to share it with them so that they all know where you're going, and they can help you make it happen.
I'll show you a video of what it feels like to roll out a vivid vision for the first time. When you roll one of these out, no one around you understands what you can see because they're still kind of caught back in the 1970s thinking about a vision statement. And they're only looking at your company today. They don't really understand or buy into the future yet. So, for the first few months, it feels really stupid rolling out a vivid vision. Let me show you a video of a guy who had an idea. Pretend that this is you the day that you roll out your vivid vision to your employees. [video]
You've got an idea that if you dance, something might happen. And you know in your head what it is, but you haven't shared it with everyone. So everyone around you doesn't know why you're dancing. But you're convinced that if you dance, other people will join you. While in your world this is rolling out your vivid vision, you're convinced someone will join you. Sooner or later, a salesperson usually joins in first. You'll get a salesperson in your company who will understand you, but your accounting or your finance people are going to think you're nuts. Your spouse will be finally convinced that you've lost your mind because, again, they can only see today, and you keep talking about the future.
Your job for the first six months after writing this is to communicate the future and share it with anyone who will listen. And talk about it over and over and over again, and keep dancing until someone else dances. But it takes a long time because everybody else can only see today. So you keep talking about the future. A marketing person joins in second. The sales guy runs away. You're going to keep dancing until somebody else dances. You're going to keep sharing your vivid vision until people buy in. The sales guy comes back. All of a sudden, a couple of people from operations join in. One of your accounting clerks kind of likes this. Somebody at the head office thinks this is kind of cool, and he shares it. A couple of more people at Top of the Table share it with others, and, all of a sudden, you're getting a little bit of a buzz around this, but still people can only see today. And you know that if you keep communicating the vivid vision over and over again, people will start to buy in, so you keep dancing.
Your job as the CEO is to communicate vision until people are making fun of you. Keep sharing your vision until people are making fun of you because then it starts to stick. Now, look at the bottom here where some of the people are sitting down, and they will never stand up. [visual] These are the cultural cancers in your organization you have to get out. These are the naysayers, the negative people who will never get it. You have to get them out of your company. This is when the media start writing about your company in the future. Potential employees want to join you because they're excited about what your company looks like in 2020 even though it's only 2017.
This video goes on for about another minute and a half until 45,000 people are dancing. And they danced because one guy was going to dance until everybody danced. Your job as the entrepreneur is not to know how to grow your company. It's not to be involved in the decisions of what to do anymore. It's to communicate where you're going with such clarity that everyone else around you understands it. And they start adding together and joining the dots.
I had breakfast this morning with two local CEOs whom I've known for years. And I was talking about the future of one of my companies, the COO Alliance. I've created the only network in the world for seconds-in-command. There are 1 million groups for entrepreneurs, but there was nowhere for the COOs. So this group, the COO Alliance, is to grow them. And I was telling them about it, and he's like, "I know two people to connect you with—one who can actually put his COO in the program and one who can help you with some of the sales side of it." But when I was sharing what the company looked like three years from now, he got excited. If I was talking to him about what it looks like today, he's like, yes, pass the Cheetos.
So your job is to communicate vision. But also remember, as Thomas Edison said, that vision without execution is hallucination. You can't roll out the vivid vision and just expect it to come true. You have to put some stuff behind it. I share copies of the vivid vision with every employee, every customer, every supplier, my accountant, my lawyers, everyone who will read it. And I share it with them every three months, asking them to read the four pages, so that they're clear on where we're going.
What ends up happening can start reverse engineering the future. You can start looking into the future and working it backward. And then you get your employees to pick the low-hanging fruit, get them to pick the easy-to-implement systems, processes, or projects to start making it come true. And, over time, you'll start to see that building your business is like a jigsaw puzzle. The vivid vision is one cornerstone of your business. The vivid vision is one cornerstone of your business. The other three corners—your goal, your core purpose, and your core values—are what you build your business off of. And, too often, we get focused on it being sales or marketing. But if not everyone knows where you're going, you can't actually get there.
So every quarter you take a Word document version of your vivid vision, and you highlight each sentence as it's coming true in green. And, every quarter, you'll see the document start to become more and more real. Again, this is different from everything you've been exposed to in the past. I have a video of this stuff if you want to download and watch it online or share with your employees. You can get it from my website, cameronherold.com. This is different from everything you've been taught in the business world. But everything in the business world is dated now.
If the rate of change outside your business is greater than the rate of change inside your business, you're out of business. You have to adapt and start to change, which means that you can't be the only one who sees the movie. Everyone has to know where you're going so that they can start having the same intuition that you had.
So that's where we start: with vision. After you've got vision, it's about people. Now, we talk a lot about people. You'll have speakers who will teach you about interviewing and selection. But Jim Collins, in his book Good to Great, talks about getting the right people on the bus, the wrong people off the bus, and everybody in the right seats. This is the bus that he was talking about.
Back in the early 1960s, a group called the Merry Pranksters, who were led by Ken Kesey, drove around the United States tripping on acid. And their mantra was that you're either on the bus or off the bus. And what they meant by that was, you're either part of this or you're not. You either get it or don't. Either you're a part of this vision that we're building or you're not. Now, I'm not suggesting that you and all your employees do acid. You'd have some pretty amazing vivid visions. What I'm suggesting is, we have to focus on getting the right people on the bus. But we also have to focus on getting the wrong people off the bus. And I have not found a single company yet anywhere in the world that works hard enough to get rid of the wrong people fast enough.
If someone, a doctor, told you that you had cancer in your body, you wouldn't leave it there for six months to see if it would change. You would have it removed. If you know that you have a cultural cancer inside your company, you have to get it out, and you have to do it today. And we'll talk a little bit about that.
I learned a lot about recruiting and interviewing employees when I was hunting ducks. Have you heard of a company called College Pro Painters? I was one of the top 30 people in that 9,000-person company. I opened the West Coast of the United States for them. College Pro is the largest residential house painting company in the world. And, every year, the 60 people at the head office would go out and recruit 800 franchisees, and those 800 franchisees would recruit and train 8,000 college kids to paint houses. And then September 1 everyone would quit and go back to school. And the 60 of us at the head office would say, "OK, let's do it again."
We learned how to do the recruiting while hunting ducks. It sounds like a weird story, but one of my grandfathers owned a hunting and fishing resort. We were out hunting ducks one morning and were sitting out in the duck blind. There were these ducks about two miles away, and they were flying. And I said, "Grandpa, call in the ducks." He said, "Those are the wrong ducks." I'm like, "I'm not even sure if those are ducks, they're so far away. I don't even know if they're really birds up in the sky." He said, "No, I can tell that they're the wrong ducks, because they're either too low to the water or too high, and their wings are flapping the wrong way. They're in the wrong formation." He said, "Those are fish ducks."
And he tried to explain how these ducks—these blue-wing and green-wing teal—would fly and how to know where they were and what they would look like so that we could call the correct ducks into the blinds. His point was that when you're looking for employees, you have to decide what the cultural traits are, and the behavioral traits, and you have to know the cultural fit of the employees before they even get to your office.
Too often we look to hire the skills, or we hire for attitude and then train for skills. You actually have to hire for the cultural fit and the skill set both.
When you're duck hunting, you put decoys out to attract ducks into the blinds. I want you to think about your company for a second. What are the decoys you use to attract ducks into your blinds? What do you use to attract ducks into your duck blinds? Or what are you using to attract employees into your company?
Your company's website is one tool. You have a company website for your brand for your business. I want you to look at your website and ask yourself, Am I attracting people, or am I pushing them away? If Richard Branson owned your company, or if the late Steve Jobs owned your business, what would your website look like? Would it change, or would it be the same?
Another decoy is your dress code. If you're going to have your friends over to watch the football game, are you going to put on a new tie?
See, we don't love wearing ties. We put up with it. We know that it makes us look powerful or is the dress for success from the 1980s. But did you know that IBM banned the tie in 1989? Twenty-eight years ago, Big Blue said to stop wearing a tie because the data said that it's turning people away from you, not turning people on to you. I'm wearing a French dress shirt with cufflinks. I've got a suit that costs more than it should. I'm wearing nice leather shoes with leather soles. But I can't wear a tie because I can't stand wearing a tie. The last tie I wore was to my mom's funeral 15 years ago, and I did it out of respect for her. But I hate them. There's not a single gentleman who wears one and likes it. And the data say that the open neck vulnerability attracts people toward you.
When my grandfather was 96 years old and on his deathbed, he gave me all his final business lessons. He said that your tie no longer makes you look important; it makes you look impotent. The data say that if you want to attract people to your company, such as customers, employees, and suppliers, you want to have more of the open vulnerability than the closed-off tie, because we all think you're hiding something. When you put on the tie, I know you're trying to look important, but I want to know who you really are.
I'm not saying you show up in ripped jeans. But think about that for a second. What are you using to attract people to your company? And trust me, if you can be more open, more approachable, you'll attract customers, you'll attract suppliers, you'll attract more money to your business. You have to remember: If the rate of change outside your business is greater than the rate of change inside your business, you're out of business. Think about that.
The other thing I learned about when you're hunting ducks is to use a shotgun. But when you're looking for really good employees, you need a rifle. Now, I'm over-translating—I'm not saying to shoot your employees with the rifle. What I'm saying is, you have to use search firms to go out and poach people. A Players, your top A Players, your top employees are never looking for a job. They're not on Monster or Indeed. They're not on industry job boards. A Players are never looking for a job somewhere else. They're already working. They love where they're working. They have no intention of leaving. But you have to know where they are, and you have to go and poach them. And you have to be very intentional.
I use a group interview to interview our potential candidates. It's different from what you think. This is when I will bring eight potential employees together at the same time. I'll have one person from my company interview all eight of them. And I'm only looking for two things: cultural fit and leadership. At this stage of the process, I don't care if they have the skills. I'm just looking for someone who vibrates like I vibrate—who feels like the brand that we're building; who feels like the customers we're interacting with; who can build the rapport and engagement.
In a group of eight, you ask a bunch of questions. "What do you do for fun?" Everybody answers. "What's the most stressful time in your life?" Everybody answers. "Favorite TV show?" That's a trick question. If you name a lot of TV shows, it's generally a bit of a hit against you. We want people who are actually really driving toward stuff in life, doing stuff with charity, doing stuff with hobbies, who are out doing stuff instead of watching people doing stuff.
The last two questions we ask are these: "If we were hiring two people, you plus somebody else, who else at the table would you hire?" That's when the strongest leaders will sell you on hiring somebody else at the table. And those are the people you want in your organization. The final question is this: "How much money do you need to make this year, and how much money would you like to make over the next three years?" And, all of a sudden, you'll notice: "Well, I need 100, I need 98, I need 97." She says, "I need 110, but I'll work for 96." The price of your talent will drop by about 10 percent, and it's legal to ask that question in every interview. In almost every country I've ever been in, it's legal to ask that question.
So you're using that stress test to find the right people. You also share your vivid vision with potential employees to see if they love it, because you don't want them to come to work for you unless they're excited about the future.
Steve Jobs used to give the wooden prototype of the Mac to employees, and he said that if he didn't see the sparkle in their eyes, he didn't bring them in to see if they had the skills because he didn't care if they had the skills.
If you're not the right cultural fit, I don't care if you have the skills, but once I know you're the right cultural fit, then I'll find out if you have the skills.
Part of your cultural fit is your core values. If you have core values in your company, I want you to remember something. Even Enron had core values. But Enron didn't live its core values. Your core values have to be so important that you're willing to fire people who break the core values.
I went to church with my dad when I was about four years old. We went lots afterward as well, but when I was four years old, we were at church and my dad went to confession. And confession is this little room that you go into, and I thought he was going to the bathroom. So he came out of the little room, and I said, "How did it go?" He said, "Good. I was talking to the priest." I'm like, that's weird, and said, "You were in the bathroom." He said, "No, I went in to tell the priest about all the bad things I've done." I'm like, that's even weirder. I said, "What happened?" He said, "Well, the priest told me to say a bunch of prayers, and then everything was good." And I remember at four years old thinking to myself, Wow, when you find out about all the bad things I've done, we'll have a very different discussion.
See, for me core values are so important that if you break them, you're fired. You don't get to work here anymore. Now, we can have other values that are aspirational values, things that we'll strive toward. But in my companies that I coach or that I run, we have a maximum of four or five core values, and they're not single words. Single words are confusing. Core values have to be very short phrases that are easy to understand and that need no further explanation. And you don't want to have some fancy acronym. You just want the core values. You're not looking for a darn acronym. You're looking for five things that you will literally live for.
One of the best examples I've ever seen is College Pro Painters. It's had the same three core values since 1971: Deliver what you promise. Respect the individual. Pride in all you do. About 10 years ago, it added a fourth core value: Find a better way. That's it. Those four. Virtually everything can be stress tested by those four. And it hires people who already live those core values. So build that into your interview process to know which ducks you're attracting. Make sure that your job postings push that out.
By the way, another thing to remember is that when you put a job posting out there to attract people, have your job posting written, but then send it to a copywriter to make it pop off the page. You can get copywriters off HireMyMom or Fiverr or Upwork, and they'll literally rewrite a job posting for you for $20. But then it will look like a marketing piece rather than some boring industry job posting.
Remember, your competition for talent is getting more and more fierce now. You would never write an ad for your services without going through a copywriter. Don't write a job posting without having a copywriter do it as well.
Once I know that I have the right cultural talent coming in, then I use the systems from a handbook called Topgrading, written by Brad and Geoff Smart. Another book, Who, written by Geoff Smart and Randy Street, is very easy to understand. Basically, it starts this way: If you're hiring somebody, I want you to think about what the five big things this person has to get done over the next 12 months. And if that person gets those five things done, you will be thrilled at your decision to hire him or her. So write down, "What are the five things this person needs to get done?"
Let's say that you are hiring a swimmer. Most job descriptions would look like this: "I want a fast, strong swimmer who's experienced with all strokes. Competitive and a team player." That's not really measurable, though. What I want you to do is to think about what a person needs to achieve over the next 12 months. So my job posting would look like this: "I want someone who has won Olympic gold across three to four strokes. I want someone who broke world records, and I want someone who won in individual and team events." Now, when I'm interviewing, I'm going to find someone who has done this before, not someone who knows how to do it. The key is to interview people who have done it, not people who know how. So this is the key. And if you don't do that, you're going to end up with a guy like this. [visual] Now, he's a fast, strong swimmer. He's experienced. He's competitive. He's a team player. But he's not going to grow your business.
When we built 1-800-GOT-JUNK?, we went from $2 million to $106 million in six years. We did it with no debt, and we gave up no equity. We did it because we had the right people in the right seats who all knew where we were going.
Your job is to hire people like that. Those are the people who will grow your business. Your job is to raise the bar. Every time you hire a new person into your company you raise the average of the group. So I ask myself, What would Jack do? Jack Welch, in his day, was the CEO and chairman for General Electric. Jack was a very famous CEO, a very well respected CEO, who really understood people. I asked his successor, Jeff Immelt, one morning while we were having breakfast together, "Jeff, what is the system that Jack used to use at GE that you use today?" He drew this diagram on a piece of paper. [visual] He said that every six months he draws this diagram, and I suggest that you do it as well. He drew this diagram, and on the y axis, the up-and-down axis, he has results. He has low results at the bottom, high results at the top. And then across the x axis he had low values on the left and high core values on the right.
So if someone ends up in the bottom left-hand corner, what do you do with somebody's name? You're going to write the name of all your direct reports in one of these four boxes, and then you're going to write the names of anyone who directly reports to you in one of these four boxes. [visual] Now, for the side companies you're running, I would take all of your employees and write their names in one of these four boxes. Every six months you do this.
What are you going to do with someone who ends up here with low values and low results? Right, you fire them; that's easy. Now, what do you do if someone is up here? Super-high core values, super-high results? Maybe promote, maybe pay that person more. Think 50 shades of gray. No, you don't whip them. You handcuff them to your company. Just to your company. You handcuff them to your company for at least five years. But, remember, it's very different for every single A Player.
Let's say that I took these first two rows and said, "These are my 'God forbid they ever quit' people of the whole room. These are my true, true A Players. I can't have a program to handcuff them because they all have different needs. Some want more free time. Some want more responsibility. I'm not going to be able to read all the names—but more autonomy, more visibility. They want to work on their executive MBA; they want you to spin off a division and let them run it. They want flextime. They want more results on work environment. They want more vacation time. They want equity. They want phantom stock. They want visibility with the press. They want visibility at the Board of Directors." There's a different reason why everybody will love your company. Your job is to understand what they're looking for and to turn your company into something that serves them. And that's how you can handcuff them to your company.
I had a CEO whom I was coaching years ago, and on our second video call, he said that his COO had just quit. I said, "I thought she was amazing. How did you lose her?" He said, "She quit for 30 percent less money to go somewhere that would give her more vacation time. I gave her a 25 percent pay raise every year for four years, and she left for less money and three weeks more vacation." He missed it. He didn't understand what was important to her. It's not always money. You have to truly understand what the satisfaction is and what the needs are of your employees.
Now, what do you do if people have high values but low results? What do you do with them? We all say coach and train. It's the wrong answer right away. I used to say the same thing. Jim Collins gave us a clue. You make sure that they're in the right seat. If they're in the wrong seat, don't coach and train them. Think about this for a second.
I had a tutor for 18 months in French. I was really bad in French. I grew up in Canada, and I had a tutor. I biked to this tutor's home two days a week for about a year and a half. And at the end of a year and a half, I was still terrible in French. I hated French even more. And I don't even like French people very much now. Because I was in the wrong seat. But if they had said, "Wow, you're really good at this. Let's get you a coach at what you're great at," imagine how much stronger I could have been. Imagine if they had said, "You're a really good speaker." I won citywide public speaking competitions in grade school. Imagine if they had said, "You're a good speaker; let's get you a speaking coach." If I had had a year and a half with a speaking coach, I'd actually be really good. But they got me a French tutor.
When you coach your employees, if they're in the wrong role, you're just frustrating your employees. Figure out the right seat for your employees, and then they might excel. You might find someone in accounting who wants to be in sales. You might find someone in sales who wants to be in customer service. The right seat might even be at another company, and that's OK. When you get them in the right seat, then you can coach and train them.
Now, what do you do if you get someone with high results, but low core values? What do you do with them? You have to fire them. You have to get them out of your company. And the data say that the cost of keeping the wrong person is 15 times his or her annual salary. You have to get these people out of your company; you have to do it today.
I had breakfast one morning with a mentor, a guy named Rob Hunt. Rob worked for one of the billionaires in Canada, The Jim Pattison Group—he was one of the six admirals. We were having breakfast on a Tuesday at 7:30 a.m. He said, "Is there anyone in your company you know you have to fire?" I said, "Yes, I've got this one guy." He said, "What's his name?" I said, "Tyler." He said, "How long have you known you should fire Tyler?" I said, "I don't know—probably six months." He said, "Why haven't you done it yet?" I said, "I'm chicken. Yes, pretty much." He said, "Give me every reason you haven't fired Tyler." I gave him all the reasons: Maybe he'll change. I've been too hard on him. Maybe I can coach him a little bit more.
He just kept shaking his head and said, "When are you going to fire Tyler?" I said, "I don't know. I'll do it by Friday." He shook his head and said, "Don't tell me when you'll do something by; tell me when you're going to do it. And Friday is not soon enough." So I said, "OK, I'll do it on Wednesday, tomorrow." He shook his head. I said, "Fine, I'll do it today." He said, What time today will you fire Tyler?" I said, "I'll fire him at 12:00 p.m." He said, "Good, call me at 12:15 p.m. I'll be there for you because I know this is going to be a hard one." But he said, "You make darn sure that you're there for Tyler. Every day for the last six months, you've picked on him. You've excluded him. You've told him all the things he's doing wrong. Every day for six months, he's come to work expecting to get fired. He didn't quit because he was scared and didn't want to leave you high and dry. And he's been trying his best. But every day, because you were too scared and too weak as a leader, you've crushed the will of a human being. So go back to your office, fire Tyler, but make sure you mentor him until he's back on his feet. Because you owe him that."
So I went back to the office—it was 8:00 a.m. I put my bag down. I said, "Ty, can I grab you for a sec?" We walked into one of the meeting rooms, and as I shut the door we both started to cry. He's six foot four as well, and he looked at me and he spoke first. He said, "What took you so long? I told my mom three months ago you were going to fire me." We basically replayed the lesson. At the end he said, "I know this is the right decision. I just wish you'd done it a lot sooner."
So Tyler left. We mentored and coached him. He got his own PR company up and running and was really successful. He used to send me emails and text messages: "Hope you're well." "Thinking about you." Years ago, I got an email from Tyler saying, "Thank you for firing me that day. Thank you for making one of the hardest business decisions of your career, but one of the best of mine. Thank you for setting me free."
I got a call about four years ago that Tyler had gone on a hike from Squamish to Coquitlam, which is a five-day hike that hadn't been done in 90 years, and he'd gone missing. We've never found the body. It was the largest search in BC history—it was 7,700 hours in search and rescue. We found ski pole tracks and footprints and two campfires, but we never found Tyler.
I can live with myself because I know I set him free, but I wish I'd done it sooner, and I lost my best friend.
We come to MDRT to hang out and to have fun, to party until 3:00 in the morning, I've heard. But we also come to become better leaders. So I'm going to ask you one question. I want you to think of your employees today and if you have one or more employees whom you should fire because of either low results or because they don't fit with the culture or your core values. What I'd like you to do is, when you get back to your office on Monday, fire them. Set them free, but do it with integrity and do it as if you're firing your sister or your brother. But you have to set them free.
If you don't do it, I want you to see Tyler looking back at you every morning from your bathroom mirror asking you to set him free.
Now I want to talk about meetings for a second. I know you're saying meetings suck, right? My second book is called Meetings Suck. This is one that every single employee at all of your companies should read. It's how to actually run great meetings. And the problem isn't that meetings suck. The problem is that we suck at running meetings.
Most of you will complain that meetings suck. Most of your employees will complain that meetings suck. And almost none of you has ever been trained on how to run great meetings. You would never send your kid off to Little League baseball without teaching him how to hold the bat or catch the ball or throw a ball. You would teach him the basics because you wouldn't want to set him up for embarrassment or failure. And yet we allow our employees to come to work every day and complain about something they've never actually been trained in.
I want you to read a sentence out loud for a second. I wanted to show you the reason we need to have more face-to-face meetings or video meetings. Because a lot of our problems come from written communication. I'd like you to read a sentence out loud, and put the emphasis on the first word. Read it again, and put the emphasis on the second word. Read it again, and put the emphasis on the third word. Read it again, and put the emphasis on the fourth word. Read it again, and put the emphasis on the fifth word. Read it again, and put the emphasis on the sixth word.
So there's a six-word sentence that means six completely different things, depending on which word you have the emphasis on. And that's confusing if we read only English. If your second language is English, forget it. All bets are off. But even if you speak English as your first language, that six-word sentence could be misinterpreted five out of six times. And that happens every day with your text messaging, Slack, email messaging, chat, Facebook—all of it could be misinterpreted. We actually need more meetings, but we need to know how to run them.
So I'll give you a crash course in it, but I highly recommend that you get all of your employees to read the book Meetings Suck. It's available on Audible, iTunes, and Amazon. I'm not trying to sell books; I'm trying to stop the complaining about meetings.
A meeting is anytime you have two or more people on the phone or meeting face-to-face. That's a meeting. Every meeting should have a clear purpose. Just one sentence: Why are you here? Every meeting has a maximum of three outcomes. What are the three things you're going to get done?
Every meeting has to have an agenda. What are you covering, in what order are you covering it, and how many minutes are you spending on each agenda item? Allow your employees to say, "No agenda, no attenda." Why would I say yes to accepting this meeting if I don't know what we're covering and what the outcomes are and what the order is?
Every meeting has to start on time. Now, I want you to think about something for a second. If you're an Olympic athlete and you were in a swim race, and your swim race started at 9:00 a.m., would you show up at 9 a.m. and go, "Hi, I'm here"? I actually had commissioned this cartoon. [visual] I paid someone to draw this cartoon for me to illustrate the point. When you say, "Sorry I'm late," what you're really saying is "I'm disrespectful; I'm a jerk. I don't value your time. My time is more valuable." Because if you actually cared, you'd show up on time.
You do one thing with your customers or your potential customers and that is to be on time for your phone calls, be on time for your meetings. In fact, if you're not five minutes early, you're late. And set that example with all of your employees. If you say, "Sorry," that's actually what it means. So don't say, "Sorry." Show up early. And "early" means sitting in the room with my cell phone at the door, because I'm not using my cell phone during meetings—I'm here, I'm engaged. If I can't sit and be engaged, I'm not going to come to the meeting. That's another rule: Don't come to the meeting unless you can be there without your phone and be completely present so we can get work done.
Now, I also want you to remember that you have to finish every meeting five minutes early. And here's why. Let's say that Marcus and I were meeting from 9:00 a.m. until 9:30 a.m., and then I have a phone call with Sarah at 9:30 a.m. I'm on from 9:00 to 9:30, "Yadda, yadda, yadda, yadda—got to go, it's 9:30," and I go running down the hall, grab Sarah, and say, "I'm sorry I'm late." She's shaking her head already. Wrong person, right? She's shaking her head already, going, No, you're not sorry you're late. You're a jerk, you're selfish, you're disrespectful. I was here on time. If it was first date, you'd be on time. If it was your wedding, you'd be on time. If it was a job interview, you'd be on time. Be on time for everything. The way you do that is when we start our meeting. I say to Marcus, "By the way, I know we stop our meetings five minutes early. That way we can show up on time for all of our phone calls and meetings. So we're on from 9:00 a.m. to 9:30 a.m. We'll be done at 9:25 a.m." Review purpose, review outcomes, then, "Yadda, yadda, yadda, yadda. Oh, 9:25, got to run. I know we have two outstanding items still. We'll talk about those next week. Have a good weekend with your kids, man." I walk down the hall. I talk to my assistant. I grab a cup of coffee. I go to the bathroom. I sit down at my desk. I pick up the phone, and it's 9:30 a.m., or actually I'm on Zoom for a video call, because I want relationships with people; I don't use phones anymore. "Sarah, good to see you again. I know we're exactly on time for our 9:30 a.m. call." Look at her—she's nodding and she's happy. That costs you nothing. It costs you nothing to show up on time. It costs you nothing to finish your calls five minutes early.
You change that one behavior in your company, and your business will grow. In fact, if you change that one behavior in your company for all of your employees, you'll double your company in three years or less. My first book is called Double Double. All you need is 26 percent growth three years in a row. That's slow for me. We did six years of 100 percent growth. That's the kind of stuff I like. Seven to twenty percent growth is really boring. It's like glacial.
But you have to change behaviors. I can't force you to put in a buffer, but we can stop five minutes early.
Book your meetings for half the time you first think about booking them for. If you're going to book a day meeting, book it for half a day. If you're going to book an hour meeting, do it in 30 minutes. You can book a meeting shorter, but we just don't think about it that way. Why are we booking all of our phone calls for half an hour? Why don't you book them for 20 minutes? All those incremental times really add up in your business world, and it also respects other people. And then you don't waste time; you control the idle chatter.
You need three roles played in a meeting. You need a moderator, a timekeeper, and a parking lot. The moderator makes sure you stay on topic. The timekeeper makes sure that you hit every bullet point on time. And the parking lot is where you write down ideas that need to be talked about after the meeting is done or if you get it done faster, stuff that really wasn't on the agenda.
So in the business world, I think we're inviting way too many people to our meetings. We don't want to hurt their feelings, so we invite them. Here's the deal. There's three of us right now. We have a role to play. But I want us to be like the Navy SEALs. Marcus's role is, when we go into this room, to kill what's on the other side of this door. So your job is to only look this way. Please trust that I've got your back. Because if you look around to see if I've got you covered, I might die because someone over here might kill us. So you're going to look this way.
Sarah's job is to only go this way. Gun out. Your job is to only look from here to here. Gun out. You're looking this way, from here to here. Now I've got you from here to here.
So as we go busting into the room, that's our job. That's all I need for the analogy, believe it or not. You'll understand this in a second. Remember, if Marcus doesn't do his job, I might die. If I don't do my job, I might die, and I know that they've got my back.
Basically, what I'm saying is, every employee has a job. And sometimes an employee's job is not to show up at the meeting. Sometimes the job is to sit at a desk and crank through the projects. We have to get better at saying, "You know what? It's not that I don't like you; it's not that I don't want you—I think you're amazing. I want you working on this project. I don't want you sitting in this meeting. If I have you come to the meeting, you'd better be participating as well." So what you want to do is to start putting rules in place that you only bring enough people to the meetings that can be fed by two pieces. This includes board meetings as well. What an unbelievable waste of time board meetings are. You've got all these people doing nothing, talking about nothing, with agendas to go over, wasting all that time. Why don't we just say, "Why don't six of the board members go and work on project work to drive something forward and the other ones will get some stuff done, and then we'll trust that you've got my back and I've got your back and they've got their back?"
You have to run your company more like the Navy SEALs do. I have a friend who's on the SEAL team—he's actually on the elite group of SEAL teams. These guys are the craziest of mothers of the crazy mothers. But they trust each other implicitly. We were at a wedding a year and a half ago, and when they walked into a bar, they walked into a bar that way. One guy was looking this way. It's crazy. They've always got each other's back. Nobody ever sits with their back to the room; they're always scanning the room. They know everything that's happening. But they trust each other implicitly. We have to teach our employees to trust that the reason they are not invited to a meeting is because I need them to do this work, and the reason you are invited to the meeting is that I need you to participate.
Now, here are the meetings you need to have in your company. Every company needs to have an annual and a quarterly retreat. Your annual retreat is when you get your leadership team or your management team off-site for one to two days and you plan out your core goals for the company. Your core goals are your employee engagement goal, your customer engagement goals, your profit goal, and your revenue goal. In that order. You use the employee net promoter score, customer net promoter score, then your profit, then your revenue number. And then some kind of a strategic thrust.
You need to have a little bit of team building—not hokey team-building stuff. But you're actually going to have your retreat, maybe, in a cool Airbnb location, like an eight-bedroom mansion, and you hang out wearing shorts and T-shirts. And you make breakfasts, lunches, and dinners together. That's all the team building you really need: hanging out and working together.
And then you need a little bit of skill development, and maybe once a year you get another personality profile done on everybody so that you can learn more about each other. One year you do PSI. One year you do DiSC. One year you do Myers-Briggs. One year you do Kolbe. Always learn about your team.
And then, every quarter, you do a half-day to a full-day retreat to look at the projects again to figure out what you're doing to hit your goals. That's the rhythm.
Every quarter, I get all businesses to commit in writing to the top three things they're going to get done. Every quarter, I get all employees to commit in writing to the top three things they're going to get done that will make their business goals happen. That's every quarter.
Every month, we have a strategy meeting. We learned this from J. D. Rockefeller. This guy was a billionaire 100 years ago. We figured, if it was working for him 100 years ago, maybe it will work today. You get off-site for half a day once a month to talk about stuff at least a year out on the calendar. What about artificial intelligence? What's happening with deep business learning, and what's happening with the way digital marketing is happening right now? What's happening if there's a recession? What if? What if?
I had breakfast one morning with the head of Cantor Fitzgerald. Years after, we were at the main TED conference, and I said, "Cantor Fitzgerald was a company that really lost all 250 employees. They were at the top of the World Trade Center. How did you survive this?" He was the guy walking back after dropping his kids off in kindergarten. The reason it survived is that it had contingency plans in case something like that would happen. It's done its time on strategy, strategy stuff that you don't have time for. But when you need it, it's too late. You bake that into your calendar every month.
We also have our weekly action review or our war meeting. Our war meeting is when the leadership team meets for 60 to 90 minutes. During the first third of the meeting, we do our five-minute updates—what's going well, what's not going well, what you're working on, and where you're stuck.
During the next third of the meeting, you look at your Dashboard, you look at your KPIs, and you make sure that you're looking at the pulse of your business every single week. And then, during the last third, you take areas where people are stuck, and you help with the team to unstick them. That regular pulse is our war meeting.
Every week we have all of our employees write down the top three things they were going to get done, and then last week's are shown to see if they hit or missed, and if they missed, why they missed: "You didn't kind of get it done—you missed, right? You didn't kind of make it to Court of the Table. You either missed and you're outside, or you hit and you're here." You have to tell people the same thing with your goals.
Every week, we coached our employees. We would flip our org chart upside down with the CEO at the bottom supporting the VPs, supporting the managers, who supported the customers. Every week, I would coach the VPs, and it was a balance of three things: direction, development, and support. It was making sure they were working on the right stuff and then giving them skill development if they needed it and the emotional support in their daily life and in their business life. It was removing obstacles and helping them problem solve stuff. And then, every day, we had all of our employees commit to the top three things they were going to get done.
I had a CEO whom I knew about five years ago who heard this session that I was running and went out and created an app called CommitTo3. And it's literally an app in which you commit your daily top three goals to another businessperson or to teams of people. It integrates with nothing, and it forces accountability. Try getting that into your business, and watch how fast you scale, when the first thing people do in the morning is to commit to the top three things they're going to do instead of getting business with email work.
We're all too busy being busy instead of actually focusing on the critical few things versus the important many.
Every day, we had a daily huddle meeting where we would get all of our employees together, and we would all meet and share good news and share missing systems. We could actually put all the numbers up on the Dashboard.
Then, we would have our huddle, our board. So every single day for seven minutes, our entire company would meet at 11:00 a.m. From 10:55 until 11:02, we shared good news, missing systems, the key numbers for the week, and that regular pulse, that regular huddle, that regular energy boost. And the reason we rant at 11 a.m. is because it's the first time of the day when the energy level drops, and we want to boost the energy. The second time of the day that it happens is 2:00 p.m.
We would also use Zoom video. Skype, when it was bought by Microsoft, got all buggy and weird. Switch over to Zoom—it's free; it's very high-definition video. It's an amazing platform, and you can do face-to-face meetings with people. Face-to-face with your customers allows you to actually lock up the relationships. You'll never lose them.
The last section on building an amazing culture is around communication. This is actually a leadership team photo. [visual] This is a photo from a company like yours—the leadership team page. It's their "About Us" page. Now, Elaine's bio says that she's the vice president of engineering. Her bio says, "Hi, I'm Elaine. I love shoes. In fact, I really love shoes. I have shoes for tango and shoes for dress up and shoes for hiking. I just recently came back from a trip in the Himalayas. I know you don't care about where I went to university, but I did my undergrad at Dartmouth and my PhD in engineering from Stanford. But don't call me about that. If you'd ever like to chat about where I'm traveling next or where I'm wearing my shoes, here's my email address."
And you know what you do after you read Elaine's bio? You read Bob's, you read Marcus's, and you read Sarah's. You spend an hour reading all these bios from their leadership team because you actually care. Because they wrote to us to attract us. And they have photos that will pull us in instead of a guy with a suit and tie going, "Hi, my name is Bob, and I went to Dartmouth." Ugh. Pass the Cheetos.
You've got to remember, the world is changed and is switching. I also want you to think about your employees. And think about all of your employees and their 101 goals. Or their bucket list. We learned this from a book called The Dream Manager by Matthew Kelly. It's an amazing book and has had a massive impact on our companies.
If you could get all of your employees to write down 101 goals, 101 places they want to go, things they want to learn, and experiences they want to have, you get so curious about them that you actually understand their passions, their joys, their fears, and their insecurities. And when you try to help them make those things happen, your employees will go through brick walls for you.
When you're walking around your company, I want you to remember the MBWA time—management by walking around—which Tom Peters talked about 30 years ago. It's so relevant today. Our employees are so busy and so stressed and so freaked out and so overwhelmed, and we're often sitting in our corner office. We've got to get out of our corner office and go sit on the floor with them and work where they're working and actually get to know them and see what they're working on. Ask them how it's going and see if you can help them and mentor them.
But your management by walking around time, by just hanging out with them and spending time with them, can be hugely powerful. Don't shoot the messenger. When you've got employees who come to you and give you a problem that's happening, or tell you something is wrong, just listen. God gave us two ears and one mouth—let's use them in that ratio. Just empathize with them. Just listen. Don't "yeah, but" them. They know that you may not take their ideas. They know that you may not fix the problem right away, but they just want to be heard. So just listen.
Another thing that Rockefeller used to do was go for a walk every day—just go for a walk in the middle of the day to slow it down and decompress and relax. And he'd grab one of his employees and say, "Hey, Glenn, do you want to go for a walk?" Glenn would say, "Sure, what's up?" "Nothing. Just going for a walk. Want to come? Not hitting on you. Going for a walk." And it's actually amazing when you can just go for a walk or play tennis or work out in the middle of the day, or you can go to a nice, relaxing restaurant and have a nice lunch and not even talk about work. The tone that that sets for your company is that it's OK for them to relax and breathe as well. No one wants to work for a workaholic. No one is inspired by a workaholic. And we're not getting our best work done when we're so wound up and tense. We have to breathe. We have to relax.
We had a "booze fairy," a person who worked for us, and every Friday that person's job was to walk around the office and hand a beer to every employee. We knew that Friday at 5:00 p.m. or Friday at 3:00 p.m. you didn't want to be there anyway, so you can at least have a drink while you're there.
We had systems to celebrate everything. I don't ever want you to have another going-away party. Here's why. They're leaving. They're not going to do any value for you anymore. So what I want you to do is to take the average cost of the going-away party and bring it to day one. I want you to welcome employees with a big whiteboard that says, "Welcome to our office." Add balloons and streamers. I want a gift basket to show up at their house at the end of the day with dinner for two at their favorite restaurant. And you learned about the restaurant during the group interview. On the morning of their first day, have them meet everybody, and then give them a two-page Yelp printout of all the cool places around your office, the free parking, the cool lunches, a place to get the quick haircut, the cool drinks, the best place to go and kind of duck out with your friends for lunch. It's going to take six months for them to learn all that. How about giving it to them on day one?
And then, at lunch, you have pizza and beer, and they read their bucket list out loud, because one of their first jobs in the morning is to write their bucket list of 101 things that they want to do before they die. They read it to their teams and their teams read theirs as well. That's how you welcome employees to your company instead of giving them a party to go away. Why don't you give them a party the day they show up?
Your job as the CEO is to be the chief energizing officer. It's to stir the Kool-Aid. My very first mentor said that an amazing business has to be slightly more than a business and slightly less than a religion. It has to be in that zone of cult or culture. Your job is to be that cult leader. And your job is to decide if your company is going to be the Google or the Microsoft.
Cameron Herold is known around the world as “The Business Growth Guru” and the mastermind behind hundreds of companies’ exponential growth, helping to guide his clients to double their profit and double their revenue in just three years or less. He is acclaimed as a powerful and effective speaker at leadership events around the world.