Is it challenging to get your employees to work together as a team to achieve your business goals? Are your employees not on the same page and is your team culture out of control?
OWEN: My guest today is Chad Lawie, and he’s the founder of longerdays.com. Chad welcome to the show.
CHAD: Hey Owen, it’s good to be here.
OWEN: What exactly will our listener be able to do with their team or employees after listening to this entire interview?
CHAD: I hope and I believe that they will be able to build a really strong and awesome team and environment that they love being in. I hope that they have an environment that makes them excited to get out of bed every day and come to work if they’re not feeling that well already.
OWEN: Basically, we have a team that is not moving on the right track, maybe they have a culture that is misplaced. By the end of listening to this interview they’ll be able to see what you did and be able to take the examples of your own situation and be able to get their team back on the right track, right? That’s kind of what they’ll learn today.
OWEN: Let’s talk about some mind-blowing results that you now experience as a result of going through the process of restructuring your team.
CHAD: I think at the top of the list I’m going to have to put profit.
CHAD: Yes. It’s not all about money, but we do need money to pay the bills. So at this point our profit is much more stable than it was before. It had been really erratic for a while. It’s back up to a good level. It’s stabilized, less erratic. We have a much more functional team. We have an awesome vibe in the office. It’s really improved for me. In the office people are coming to me, telling me that it’s good. Everybody works together really well, we’re a strong team. It’s like a really tight jazz band. That German knows what the saxophone player’s going to do next. Our staff is more knowledgeable of the inner workings of the company. We’re just more open and more transparent about the way the business actually functions so that when people can help me with issues that I’m struggling with, which is cool.
OWEN: Just so you know, I want listeners to know that for all these resources you just shared, at the end of the interview you’ll actually be sharing specific metrics to back what you’re saying. We’re not just telling that we would increase profit and all that and ending it there. If you’re with all the way to the end of this interview you’ll even here Chad tell you specific metrics behind how he’s been able to improve the team and the metrics behind all the things that you’ll be hearing today. Next thing, I think we already give them the premise that if their team is off-track, is not moving in the right direction, the whole point of this interview is to tell them specific steps to take to get things back in the right order. I want to learn from your stories. What went wrong in your case?
CHAD: It was interesting and its good problems to have but really what went wrong for us was really quick success, rapid success. After we achieved the success I kind of had a fear of being paralyzed. I just started this company in my living room and it just kind of took off. I didn’t really know how to deal with that success. We were doubling in size, doubling in staff every year. That’s both staff and sales. It could be even more than that. For example in 2011 we grew our sales by 350% just that year.
CHAD: Things were going through the roof. We had more customers than we could handle, we had waiting lists, so customers were waiting to use our service. Those are all good things but I got really scared that if I made a decision or made a change, it was like, “That’s great, we’re successful” but it’s because I didn’t really understand it. I was scared that making decisions were going to mess it up. I was accidentally going to just screw everything up.
OWEN: You also mentioned during the pre-interview that you got scared to say no to your employees and project ideas that they were coming up with, talk about that.
CHAD: Yes, definitely. One thing I think that contributed to problems is that I didn’t really have a strong vision for the company. We’re kind of just going with the flow, seeing what worked, just plain jazz, innovating. For awhile that was fine, but as the company grew and there were more people, there were less people to take it in different directions. One thing about our staff is the really resourceful… Most of the people that we hire, it’s about 50/50. Some of them have college degree, some of them don’t. A lot of the people that we have on staff are self-taught. So that makes them really resourceful, really quick to learn, they had no problem hopping on YouTube and figuring something out, or jumping into a new software, just intuitively figuring it out. And our customers are always trying to give them the most value that they can out of our service. They’re pushing our staff to learn more and more and they’re looking at us the same way, saying, “What can I get these guys to do…” Our customers are playing jazz too, I guess they’re improvising with us as well. They’re pushing our staff to utilize the fullest potential of their skills. That’s great and everything. I love providing the most value possible to our customers. But it turned into a problem because it resulted in a disparity between the more veteran members of our staff who had been around for a long time and accumulated a lot of experience and knowledge, and the new people who had just come on staff. We’ve got these veteran staff members who have developed this amazing relationship with their customers and really high level of work. Then that customer goes and recommends us to another business, and the business signs up. We give that business to a newer member of the staff. Suddenly I’ll go, “Wait a second. What’s going on here?” That wasn’t good.
OWEN: Just so the listener can get some context as to what exactly your company does as we tell the story. That way they understand what’s going on.
CHAD: Fine. We’re a virtual assistance company. We have 5 core services, admin, reception, graphics, web, and creative writing. That’s the 5 areas of work that we really focus on. We’re a team of people all based in the same office here in the United State, providing virtual assistance to businesses located around the country. What’s really powerful about our services we allow customers to access that team basically on demand or by the minute. If you’re a business owner and you have a part-time budget, you can access us full-time. Monday to Friday, 9-5:30 for just as much, you’re only paying for as much time as you need. It’s a really compelling offer or value proposition to our customers.
OWEN: Okay. I just want to give the listener a context as to why you were saying all these. The next thing you also mentioned during the pre-interview was kind of wrong at that time. You kept giving mediocre employees another chance, Can you talk about that?
CHAD: Yes, I can. Let me think about it, let me organize my thoughts on that for a minute here. Giving mediocre employees another chance. We had people and staff who were doing great work. And instead of focusing on those people, or rewarding them, or bringing them… “Hey, you’re doing an amazing…” I ended up spending all of my time on the people who are creating problems, the people who are creating headaches. We did have a top employee come in and say, “Hey look, this person next to me is always showing up late.” I got really scared to confront that person about it.
CHAD: I think it was really an irrational fear. I got scared that if I said, “Hey, I really need you to be here at 9.” And that person would just say, “You know what, I’m out of here. I quit.” And that was just totally not the case, but that’s just the way that it came down. And it really comes down to fear again, and that built on itself.
OWEN: You also mentioned that as a result of this too that fear led you to giving more time to people who do not deserve your time too.
CHAD: For sure. I was giving them time. On the one hand I can say that I wasn’t confronting those people about the issues that they had that they needed to address. But I did talk with them or work with them a lot. I was having meetings with the more mediocre staff and giving them chance after chance to turn it around. That consumed a lot of my time as a manager, and that wasn’t good. I guess what I would say with that… On the one hand as a manager I thought that I was supposed to be working with those mediocre employers, so try and get them to turn around. But if you think of it more in terms of like a chef. If you’re a chef at a famous restaurant, you don’t always serve up bad recipes. You don’t keep on trying recipes that don’t work. Eventually, you have to spend your time focusing on the recipes that really do a great job, or well received by the public that people love to eat. That’s when I realized my job as a manager was, to work on a recipe. If I’m the chef, I’m going to work on a recipe and tweak it, see if I can make it work. And if I can’t “Look, this is just not going to fit in at these restaurant” and that’s not a bad thing. If you’re an Italian restaurant you shouldn’t be serving burritos. It doesn’t mean that the bridges are bad, it’s just they’re better place at a different restaurant.
OWEN: Another thing you mentioned to was that you found out that you were helping employees ignore problems that they had with themselves. Talk about that. That’s like fear of avoiding conflict, but talk about that in detail.
CHAD: Can you repeat the question?
OWEN: We’re talking about how things that went wrong with the team. And one of the things you mentioned during the pre-interview was how you found yourself helping employees ignore problems that they had with each other.
CHAD: Definitely. That kind of comes back to those top employees saying, “Hey, I’m here on time every day. The guy who sits next to me always showing up late. Instead of going to the guy who likes showing up late and say, “Hey, I really need you to come in on time.” I would go to that topic boy who is always on time and say… Actually, I just wouldn’t say anything, I just kind of ignore it because…
OWEN: You think it’ll squash itself.
CHAD: It would just go away if I’d ignore it. And that really did happen. I would look at it and I’ll go, “Well, his clients are pretty happy. Yes, he shows up late but his billable time is pretty good. But really, it was disruptive to the team because you got somebody who’s making an effort and they don’t see the effort appreciated. So it really causes a problem for the team. People need to be conservative.
OWEN: I think you mentioned that as a result of that some of the good ones, when they saw that you were not doing anything they actually left, right?
CHAD: Yes. We had some great people who just left. And that really comes down to them not willing to lower their standards. If you got employee who always shows up at 9 o’clock and employee B who always shows 10 minutes late, employee A isn’t going to show up 10 minutes late. Because they’re proud of the fact that they come to work on time and they’re not going to become the kind of person who would show up late just because somebody else is lowering the standards. Yes, ultimately they’re going to go to a place where they’re appreciated.
OWEN: I like how you mentioned some of the things that went wrong. But there was a specific time that was the lowest point when you realize that you had to do something to transform your team. Let’s talk about that.
CHAD: Yes. Let me build up to the big one. I could talk about this for a while. Really, it sort of deteriorated, the culture of the company was going bad. We had a great culture in the beginning, we’re a small team, we’re very close, we worked very well together, this great culture. But then it just started to go bad around 2013. I was feeling it too. I was unhappy, the staff was unhappy, the team was becoming dysfunctional but I didn’t realize it. One of the problems was people weren’t conforming the way that I wanted them to, Instead of explaining to them why it mattered or how it affected the rest of the team I would just create a policy, and then created another policy, and a policy for the policy. That is a motivation killer. People don’t really want to work in that environment where they had to be like a lawyer to read through your handbook to keep their job.
OWEN: Yes. You were basically putting Band Aid after Band Aid on the issue instead of ripping all the Band Aid and fixing the wound. That’s kind of what was going on.
CHAD: Instead of me just going up to the person and saying, “Look, show up on time.” or “Hey dude, do better work.”
OWEN: During the pre-interview you also mentioned that you were actually policing them too, like literally it was like, correct me if I’m wrong, but it was like micromanaging it at one point too.
CHAD: I don’t think it was so much micromanaging but policing and policy…
CHAD: I guess you could say it was micromanaging but really it was me being scared again of confronting conflict instead of just telling somebody straight to their face, “This is what you’re doing wrong.” Here’s a great example actually. We’d have these company meetings, and these meetings used to be awesome. We would get together at the end of the week and it was like a celebration. We’d have a beer, we would talk about the good things that happened, learned from the bad things. They were really positive meetings. And they turned into this negative thing because if one person did something wrong, we would go into that meeting and we’d say, “Don’t do this” or “If this happens, make sure you don’t do that” or “Do do this”. We’re telling everyone, when we should’ve just been addressing it to one person. Or we’re creating a policy and that wasn’t fun for me, it wasn’t fun for the staff. That’s when we started losing our best staff members and we ended up being left… I would say we’d lost all of our best staff members. We had a lot of great people still on staff. But I could see that if we continued down the current path we’re going to be left with basically just a bunch of headaches.
CHAD: People who weren’t a good fit. That was really a result of me doing a bad job as a manager, allowing people to settle into a routine and not…
OWEN: Another thing you also mentioned to was that you tell them how the business started out of your passion. Talk about that.
CHAD: Sure. The company, it started with just in my living room and it was a shock to me that I had the skill that people were willing to pay for. It was an awesome experience because for the first time in my life I was able to really contribute to something. Customers were over the moon with what I was providing to them. They were so happy with the work and it felt great to find out that I had the skill that made people so happy. That’s really why I wanted to grow the company, was to share that passion with others like myself who, I didn’t know what I wanted to do with my life so I was kind of just wandering around. I didn’t get into this because I woke up one day and say, “Hey, I want to be a boss so I can tell people what to do.” I didn’t know it. I wanted to create a process. I wanted to share something that I loved. It’s like music. When you hear a song that you really love you want to share that song with people you think will love it to so you can all love it together. We started to lose that.
OWEN: Another thing you mentioned was how your billable hours became horrible, as well as the utilization rate. Can you talk about that?
CHAD: Yes. As things started to get bad at the company, as we started to… I fear of confronting conflicts, fear that if I gave anybody constructive criticism they would just walk out the door. That kind of translated into people not really staying in focus that works, or billable hours were dropping, which is basically our utilization rate. Which is if we have a hundred hours that we are available to sell to our customers, and they buy a hundred and we only bill 80% of those. Or not even that. Maybe we’d got $100. People are coming to work 8 hours a day but they’re only really focusing 4 hours a day. It means we’re wasting 4 hours a day, roughly speaking. So that’s not good. That was going down. We were just really in a downward spiral.
OWEN: Do you even remember when exactly when you now realize that you needed to make a change. You had to overall make a change. What happened?
CHAD: Yes. Things are getting bad, I wasn’t feeling good, but I was kind of feeling invincible because the company had been so successful. We’d still been growing rapidly. And even when things are bad, this is really around 2013 that things were getting nasty. Some months we’d have a great promise, some months bad. I would kind of justify it. I’d say, “Oh, we had a problem this month.” We knew that project was going to end or we had 3 payrolls this month, so it’s justified our low profits when they were low and whatever. But towards the end of the year I had this meeting with some business advisers and one of them said, “Hey, your profit’s going to be off by 70,000 this year. That really snapped me out of it. I walked away from that meeting, took my rose-colored glasses of and went back to the company and realized that we really needed to make some changes if we’re going to turn this around.
OWEN: Yes. How exactly do you now fix the team and get them back on track. Let’s talk about steps you took.
CHAD: Sure. The first thing that I did. Somebody gave me this book, Five Dysfunctions of a Team, it’s by Patrick Lencioni. I love that book. I probably read it 3 times now, and it really kind of spelled out how to turn things around. I can’t say that I really related to the problems the team in the book was having, but there were elements of that dysfunction going on at longer days.
OWEN: So what are those 5 dysfunctions of a team that you learned?
CHAD: The 5 dysfunctions are lack of trust, failing to confirm conflicts, not committing to goals, not holding people accountable, and not focusing on team results.
CHAD: Lack of concern. So to build a positive team you just need to reverse all those. What we basically did was build trust, we confronted conflicts, we talked about our goals, and committed to them. Once we commit to a goal that allows us to hold people accountable for the actions that they’re taking and the effect that it would have on the goal. The other thing that we did, as far as holding people accountable is we’re matching up the results of the team with individual results. We kind of made them one and the same I guess. But focusing on the team results is the last one, and it’s a good one as well.
OWEN: Another thing you mentioned too was you realize that this whole fear of confronting people and fear of not wanting to step your role as a leader is more of a mindset thing. Talk about you had to change your mind set.
CHAD: Yes. As the company grew, in the beginning we didn’t have anything to lose. I was unemployed, the friends that I’d hired were unemployed. This whole fell apart, it was no big deal. Then it became really successful and didn’t really understand why. I got scared that if I started making major decisions, like I said earlier I didn’t really have a grand vision for the company. I was scared that if I put one in place it would be wrong
CHAD: I was scared to be the wrong and people were upset, our customers, it would ruin this good thing that we had. So I tried to maintain this artificial harmony. I tried to freeze us.
CHAD: I tried to freeze us in one spot. Because I was scared that if I made a decision I was going to ruin what we had going at the company.
OWEN: Go ahead. I think you also said that you realize that by not making decisions you would actually still make a decision but the wrong one. Talk about that.
CHAD: That’s exactly it. No decision is a decision. Instead of making decisions myself I would just sit back and ignore decisions. I would tell people, “You tell me what you want to do and we’ll talk about that.” Other people started controlling the direction of the company. That was not good. That sent us down rabbit holes that were unproductive.
OWEN: Yes. Another thing you realize when you were trying to fix the issue was that it’s not about the money or finding talented people. I want you to expand and explain on that.
CHAD: Yes. I guess coming back to that fear of conflict. I would look at people and say, “This person might not be the best team player, or he might be doing something that’s disruptive to the team but he’s really talented, or she’s really good at what she does so I don’t want to rock that boat, I’m just going to leave that person alone.” Or, “This person misses a lot of work but when they are here they’re really on their game when they’re here. Unfortunately they’re only here 4 out 5 days every week. But those 4 days are really great.” I would look at it like that, and that again kind of ruined it for me because I was working with people who might have been talented but they were really causing headaches for me, because they weren’t showing up, or they did things that upset other staff members. But I thought we had to hold on to those people because I thought maybe those are the people who are making us successful, or something. But as we started to lose control of the company, as that adviser said to me, “Hey, your profit’s going to be off by 70,000 this year and I’m watching the utilization rate drop, drop, and drop, and our attendants isn’t getting better. Our people are showing up late, the whole thing is just like a circus.” I got to say that it’s amazing that we had as many satisfied customers as we did during this time. We really held it together.
OWEN: They don’t know what’s going on behind the scenes. That’s what this interview is about. It’s going behind the scenes to see in this case now steps you took to get your team back on track. I think as a result of realizing this whole thing is not about the money or finding talented people. You actually took action as regard to your web team. Can you talk about what happened?
CHAD: I feel like I didn’t quite get to the ultimate answer to that.
OWEN: Okay, go ahead. Hit them with the ultimate answer. Go ahead.
CHAD: Yes. We had these people on staff and I could see things, we’re going negative. I thought we had to maintain these people on staff to maintain the success of the company. But it turns out that that was really actually kind of killing it. I realize that by trying to maintain it the profit was dropping. We were going to lose it. We were going to go out of business if we continued on the current trend. I realized it didn’t matter. I realized that by making bold decisions I might run the risk of ruining the company. But if I didn’t do anything I was going to ruin it by not doing anything. So I just forgot about the money and I said it’s not about money, or talented people, it’s about finding people that I really like working on projects with. People who I enjoy working with. I come to work and they make me laugh, they make me feel good, that we work well together. That’s really the kind of where I came to that. Actions that we started taking, the question you just asked me talking about the web team.
OWEN: The web team, yes.
CHAD: Yes. So coming back to me not defining the vision for the company and letting it go in random directions. Again, it kind of ties back to that really resourceful staff that we had. So people come in, super resourceful, kind of self-taught. They developed their skills. We have these guys, we got a growing group of people on the team who had developed these amazing web skills, and they wanted to develop a premium web service within longer days. And we spent a year developing this premium service. It was great. We were doing great work, customers loved it. They were banging down the door to use the service. But the problem is we weren’t charging for it. We were doing this high-level work and we’re charging for our virtual assistant rates, and it was really causing this rift within the company, and confusion with our customers and our staff. When I realized that I need to start making decisions and kind of gain that mental freedom. Again, this comes back to the money thing. I thought, “We’ve got to keep doing this web thing because customers love it. It’s making us money. I realize that, again, things were going down the tube. I could just focus on the money. That really freed me up to say it took the handcuffs off of me.
OWEN: And it was scary too for you because I think during the pre-interview you said it was scary because letting go of the team meant losing 20% of the business.
CHAD: Exactly. That website, the first thing I did after gaining that freedom was going to the web guys and saying, “Look, this is not going to happen. We need to cut this service. “That was scary. It was about 20% of our business, we had 5 people on staff who are just 100% dedicated to developing websites. That’s a big…
OWEN: That had to go.
CHAD: Yes. It just had to go.
OWEN: What happened next? Now we’re talking about things that you did to get things back on track I think one of the things you mentioned next was regaining control of the decision making process. Talk about that.
CHAD: That kind of ties in to what I was just talking about. Before we move on to that question I just want to fairly note that it’s not like on Friday the guys came in and we’re like, “Hey, sorry Monday you don’t have a job.” It’s more of a drama thing. I help them all find new jobs at local companies that we had connections with. They all moved on and ended up very happy at their new positions. There was a happy ending to that story.
OWEN: Okay, good. What happened next then?
CHAD: Regaining control of the decision making process, that kind of comes back to the [Unintelligible 00:27:27] saying, look, this isn’t really for us, let’s get rid of that, the web team or the web service. Being able to look at the company and feeling so free about it that we can just openly and honestly talk about the issues of the company [No audio 00:27:47] where we’re going to take it and you being honest. I guess for a while there I felt like maybe, here might be a good example. As a company crew that kind of became part of our culture there. We were rapidly growing. That became one of the things that we were excited about. I felt like people had this expectation of me that we were going to grow to 100, 200, or 300 people at the company. By regaining control one example is that I said, “Look guys, I don’t want a 500-person company. Let’s shoot for 40 people, let’s see if we can hit that mark. Let’s not talk about 50, 60, or whatever.
OWEN: Regaining control of the decision making process, I like that. Another thing you mentioned too was you realized that the company was too big for you to maintain relationship with every single person on staff. Talk about that.
CHAD: Right. That comes back to the book Five Dysfunctions of a Team. One of the core things to build in a team that I found is trust. To build trust I found this really cool tool or podcast. It’s Manager Tools. Honestly, I have listened to too many of them but I’ve listened to their podcast on one-on-one meetings. It’s actually 3 podcasts that cover one-on-one meetings. It’s a great way to build trust. I highly recommend it, go and check it out. What the podcast basically says is that you should sit down with each person on your staff, each direct report, each person who reports back, you should sit down with them once a week and have conversations with them. It’s not a meeting. It’s not where you’re talking at them. The idea is it’s building a relationship on company time. It’s investing in a relationship. One thing I realized as I’m listening to this podcast. At this point we’re about 20 people on staff and listening to this podcast. This is a great idea, this is a great way to build trust, we should do this. But I’ve also got my eyes on growth and how we’re going to scale this. I realize the company is going to be too big for me to maintain a relationship with every single person on staff.
CHAD: So we had to put this management structure in place. That took a lot of time. That was a learning experience for me. I’ve never put managers in place before. I had a couple of failures. You fail, you try again. You figure out a good way to go about it. And that’s actually a lot of fun. Now we have a management team that is just really solid and just knock them out of the park.
OWEN: You know what I love about that? You figured out the framework… Basically saying that one-on-one meeting is what will help to build trust. You realize that as your company is growing you’ll be able to do these one-on-one meetings with everybody. But what you now did is using that framework you’re able to train your managers to use that framework, basically take over, and do one-one-one meetings with their own individual direct reports. I think the next thing you mentioned that you did was you…
CHAD: Can we hit on that a little bit more?
OWEN: Go ahead.
CHAD: I think there’s a really good plan about a way that this changes the company. Looking at it from the dysfunctional team standpoint or a bad culture at the company, what we needed to do to fix it, realizing that we needed to build trust. Or the staff members weren’t getting enough one-on-one time with their managers. That’s a really fluffy thing I guess to talk about. But when you look at it from a practical standpoint that made me realize that, “Hey, we need to put a management structure in place if we’re going to continue to grow this thing. That’s a structural change that we made to the company that really actually by focusing on culture and the experience that our staff was having. That forced us to make a change to the company that has made us stronger and made us more ready to grow and scale into the future. I think that’s a really good point about how a seemingly fluffy topic can actually have…
OWEN: I don’t think there’s anything fluffy about it. No successful person is ever successful without the team. It’s critical.
CHAD: For sure. I just think that’s a really good example. That really changed our team. It changed our company in a much better way.
OWEN: You also mentioned that part of the changes you made was you set-up a metrics dashboard, one for each member of the team, and then one for the entire company. Let’s talk about that.
CHAD: First thing we did was build trust. We did one-on-one meetings to build trust. Second thing we did was confronting conflicts. There’s a problem we would talk about that. That’s not good. Let me start over a little bit here. Step 1, build trust. Step 2, confirm conflicts, Step 3, hold people accountable. Committing to results and hold people accountable is kind of the same thing. To accomplish that we set-up these dashboards. We’d like people to know, “We need you to accomplish specific…” When you hit certain expectations or exceed certain goals. We set-up dashboards that would have utilization rates. How many hours are people building a day, or what’s their attendance. So we said, “Look, we needed to hit 6 hours build a day. Here’s a dashboard that shows you how many hours your billing over the course of a month on a daily basis. On the first you build 4 hours, on the second you build 5 hours, on the third you build 6 hours. Great, now you hit the benchmark. Just keep maintaining that 6. It gives people a way to gauge their performance against the benchmarks that we had set. We set up dashboards for billable hours. Attendance, how many hours they’re in a day. And customer satisfaction.
OWEN: I like that. Because basically now you want an action to come out from that. You want to set the standard. Also on top of that, it’s kind of like if you want have something happen and you’re not tracking it then how’s it going to happen? When you measure it you keep it in place and people will lead by that standard because in this case you have trackable metrics dashboard.
CHAD: Right. It makes sense because these things kind of all tie together. The trust is really the foundation. When it comes to confronting conflicts, committing to results, and holding people accountable, those middle three, they really kind of all tie together. Because when we set-up those dashboards and say, the benchmark they’re aiming for is 7.5 hours work today, or 6 hours build in a day. That might become a conflict that we have to confront. So we built this trust that enables us to say, “You’re not hitting the benchmark. Now we’re going to sit down and talk about it. It’s not going to have to be something we delay, kick down the road, or draft up a big performance statement about. We can just sit down in the one-on-one meeting where we build trust with each other every week and say, “Look, your billable hours they’re kind of the lower. We’d like to see them. You have a dashboard, you know that that’s the case, you know what the benchmark is.” By setting that expectation we’re going to hold people accountable. That kind of flows into the last one as well. Let me recap one more time just to kind of drive the point home. First one, build trust, that’s the foundation. Number two confront conflicts. Number three and number four are holding people accountable and committing to results. Number five is focusing on team results. It kind of flows up to the top of what are we trying to achieve together. If you think of it like a basketball team. I’m not a sports guy, I’m a computer geek, so excuse me for this whole… But it’s a really good example. If you’re in a basketball team, let’s say the NBA professional team, everyone on the team knows that the goal is to win the game. And after winning the game the goal is to go to the playoffs and then to win the playoffs. Everybody is very, very clear on the goal. When it comes to an NBA team you might have a point guard, defense, or offense, whatever it is. The ultimate goal is did we win the game? It doesn’t matter. It’s not about ego, it’s not about who’s the most talented and who contributes the most, it’s about did we work together as a team to achieve the team results. That’s really what that last step is. It’s saying forget about it.
OWEN: There’s no I in Team basically.
CHAD: Yes, exactly. I kind of messed up on that too. I talked about it earlier. When I was talking about… We had this talented people and stuff, and I would think, “We can’t lose this person because they only show up four out of five days but when they do show up they’re really happy. If you look at that from a basketball perspective, it’s 5 on 5, right?
CHAD: If it’s 4 on 5, if you don’t show up that doesn’t mean the other team drops a player too. Now it just becomes 4 on 5, so that’s a problem.
OWEN: You also mentioned the last step you guys took was transparency and opening up your books to your staff. Let’s talk about that.
CHAD: Talking about a hot topic. This whole system of building a strong team. The whole system, we’re buildings for us, confronting conflicts, that deal. That happened on 2 different levels. The managers and the staff had to go through it. And I had to go through it with the company as a whole. So that means that I had to build trust with people. Because I wasn’t sitting down and have a meeting with people every day, in order for them to trust me I had to show them that I trusted them. That meant letting them know that I believe they were capable of handling the issues that I was struggling with or whatever it was. One of those things were profit. I was really stressed out about profit. So I wanted to let people in on that so they can help with that issue. That led us to opening up the company books. Now we want to install transactions to revenue, expenses, or profit. You can’t just open that kind of stuff up without it causing changes in your company. That could definitely scare people but I think ultimately it was a really positive result for us. One thing that it led to was profit sharing. I realize, if we’re going to tell people to profit they’re going to look at that and say, “Man, look at this. I’m coming to work every day, I’m working really hard and look how much…”
OWEN: He’s just going to chat, huh.
CHAD: Yes. That’s not cool. I think that’s a good thing. We set-up profit sharing and that kind of let us set-up a big dashboard for the company that said, look, we got this capacity. We have the availability to work 2,500 hours this month. If we can work that many hours for our customers… It’s not like… By the way, we’re obviously making sure that we’re providing quality work because I’m trying manipulate our customers into buying more time. It’s basically letting the staff know, “Hey, you’re at work full-time.”
OWEN: It’s hard just making money.
OWEN: Now they can see that because the book is open to them to see. They’re also taking part in the profit so they can steal from themselves if they’re taking part in the profit. And so they can be idling their time doing nothing.
CHAD: Yeah, it’s laying it all out there. I’m saying, “Look, if you’re going to get on his Facebook during work, that effects…
OWEN: You’re staling from yourself.
CHAD: Yeah, you’re stealing from yourself.
OWEN: And from the team.
CHAD: Hence the team, yes, and the co-workers. I think it’s a better way of doing business setting it up that way.
OWEN: What are the additional steps did you take? And if you want to finish your last point, go ahead, but I just want to know what additional points did you take, and also to get the team back on track. I think we talked about during the pre-interview how you re-arranged the office physically.
CHAD: Yes. That comes into setting up the management structure and the ways that it failed. Actually, let’s talk about that. Let’s talk about for a minute here setting up that management structure and how I messed it up. The first time we set-up the management structure we say, your new bosses, I’m going to actually use their really names, Terry and Andrew are the names of the managers. We lay out this piece of paper, we say, “Look, your new manager’s Terry” and people were like, “Yeah, whatever.” It’s a paper change to them, it didn’t make a difference. They were still talking to me. No change. One thing that we did after that, first structure basically failed as we said, “Look, we need to make this change invisible. So we separated the teams out physically. Terry’s team works on one side of the office, Andrew’s team works on the other side of the office. Another thing that I just mentioned was that people would still come to me. So we may have set-up a team a structure or management structure on paper but I was still very involved with the staff on a day to day basis. They were used to working with me. So if they had a problem, they would bring it to me. They knew that I could give them a solution. And because this company, it’s my baby. I want to provide the solution, I wanted to be as efficient as possible with getting the answer that they need. But that was ultimately undermining the authority of the managers that I had just put in place or was trying to go to. What I did, we physically separated the office and then a third try business, this really comes to a third try setting up management structure. We physically separated the office and I just walked away metaphorically for a week where I left my office, I went to a different office, didn’t tell anybody where I was going. Instead of allowing people to contact me on Skype I set-up a new Skype name that only the managers have. That served a purpose of training both the staff and me that you need to go to the managers. If that staff needed to talk to me, if the staff had a problem they had to go to the manager. If I had a problem with what somebody was doing on staff the answer wasn’t me going to that staff member, the answer was me going to the manager and letting them handle it, because that’s what they were hired to do to solve problems and be a manager. That’s why they’re the ones I’ve enlisted. What it means is building the trust, and they’re the ones constantly converting those conflicts. It’s their team.
OWEN: Can we just quickly summarize some of the big points we’ve gone through so far so the listener knows what we’ve been saying so far. I think one of the things we talked about was the manager tools. Yes, go ahead.
CHAD: Yes, I’ll go for it. Just to recap the 5 dysfunctions or the 5 ways to build a strong team. Building trust, confirming conflicts, holding people accountable or [Unintelligible 00:42:36] to results basically, and then focusing on team results. The first step for building trust I would go to manager tools, download the one-on-one podcast. Learn how to do one-on-ones with your staff. That will help you build trust. That’s really the foundation. You can’t have a functional team without trust. If you’re going to build a strong team it’s got to start with trust. Again, you can go back to basketball. If you’re 5 guys on offense and you’re running down the court and you’re going to try to score a goal or whatever they call it in basketball.
OWEN: I don’t even know what it’s called. Go ahead.
CHAD: You need to know that your team that if you’re running the play you got to be able to trust that your team member’s going to be behind you if they’re supposed to be behind you. And so, when you pass that bob they’re going to be there to catch you. You got to be able to trust your team.
CHAD: So if you’re practicing that play and your team member’s not where they need to be you need to have that trust, you’re going to be able to confront conflicts and let them know, “This is what I need you to do for this play to work.” Confronting conflicts helps you work together. Really those first 2 steps, building trust and confronting conflicts, in my opinion, that took us 75% of the way towards building a strong team. That was huge for us. The management structure caused us to split out the teams, splitting out the teams, let people know, okay, I sit with my team, allow them to build camaraderie, and recognize that, hey, these are my team members and have pride in their team. They actually gave themselves names. This happened organically. People said, “Hey, we should give ourselves a name. We should have the logo. Let’s make t-shirts. There’s kind of like rivalry now between the teams which is pretty cool. That really all just came out of building trust with one on one meetings, and confronting conflicts. The rest is really setting goals, committing to the goals and focusing on team results. That’s really just the last little bit that’ll push you the rest of the way.
OWEN: Awesome. We promised the listener earlier on what they were going to learn and we told them to wait all the way to this point so you can give them specific metrics on how the team has changed. Let’s talk about some of the specific metrics that your team has been able to… Go ahead.
CHAD: Aside from metric, just the overall morale and spirit of company, it’s back to what it was like when we were first starting out. I want to say that it was horrible at work, but we’re definitely had to point out, we’re like yeah, I love it here this is great. As far as specific metrics, our utilization rate or our billable rate is up 23% from its lowest point. Then our attendance is up about 16%, those are pretty big numbers, yes. If you think about it 23% utilization rate, that means that we’ve been able to grow our sales essentially without hiring anybody new or adding any infrastructure. That’s just using the existing resources that we had. That’s awesome. Who doesn’t want to do that? I mentioned earlier in the talk that our profit was like a roller coaster, up and down. Right now we’re hitting about… But our profit is much more consistent. It’s still got room for improvement, it’s not bad, but…
OWEN: Can you give a percentage. Since we’ve tantalized them with metrics can you give us a percentage. Not necessarily the amount which you shared with me earlier on. Not the amount but a percentage of how it’s growing each month.
CHAD: Great point. Let me find a good way to explain this. Our profit right now, it’s stable and that’s good. But it’s kind of at the starting line. I don’t really have a percentage of how it’s improving. Everything that I’m talking about we’ve seen increases. For example our utilization rate is up 23%, our attendance is up 16%, our profit has stabilized. But really, the results that have really excited to see in our profit are yet to come. We’ve got a management structure that is ready to go. We have a team that is solid. They’re more ready than they ever have been to deal with the incoming customers. As a company we’ve always struggled with having customers sign-up faster than we’ve been able to hire people. We just struggled to keep up with the rate of incoming customers. At this point our team is just ready to go. We’re ready for new customers to come in the door. That’s really where I think we’re going to see a difference in our profit going forward in the next 12 months. Our team is really strong. Like I said, there’s really not a single person on staff that I would say, “This person’s got problems” or “We need to work with that person.”
OWEN: Everybody’s A players now.
CHAD: Yes, everybody’s A players and that’s awesome. Again, our waiting list is down. We’ve had a waiting list up for probably 20 of the last 24 months.
OWEN: When you say waiting list what do you mean?
CHAD: I mean customers who were saying, “Hey, I want to use your service.” But we would say, “There’s nobody for you to work with here. We have a limited amount of resources.”
OWEN: Yes. How will you say your personal life has been transformed as a result of transforming your team basically.
CHAD: Yes. Let me drop this bomb on you.
OWEN: Bomb away.
CHAD: It’s the ultimate goal, it’s the reason people start businesses. How has my life been transformed? Actually this summer I spent 2 months on a sailboat with my wife, my kids, just relaxing, travelling, taking a break from the company. Back in the [Unintelligible 00:49:05] ran itself. The management structure I put in place, it took on new customers, they hired new staff, they addressed problems. If there was a major problem and somebody needed to be let go they handled that. The company ran itself. Isn’t that really every business owner’s goal? This is my opinion of this.
OWEN: That’s awesome. I’m even jealous of that. Two months on a sailboat, that is awesome. That’s basically saying you can rely on your team that much and not really have to be there, and they handle everything. That’s awesome.
CHAD: That’s [Unintelligible 00:49:38]
OWEN: What will you say is the very single next step that the listener who’s been listening to this interview all the way to this point should take in order to get started with getting their employees back on the right track?
CHAD: The very single next step, build trust. Go over to Manager Tools, download that one-on-one podcast, and put a meeting on your calendar every week to talk about every number on your staff and invest in that relationship. A one-on-one meeting can last anywhere from 10 to 30 minutes. If you think it’s 30 minutes that’s nothing. Thirty minutes a week is such a small part of your time. So that’ll be my first step.
OWEN: Yes. What will you say is the best way for the listener to connect with you and thank you for doing this interview?
CHAD: Yes, you can email me, email@example.com, or give us a call from numbers 800 507 1622. I actually answer the main phone line here at the company, so you’ll get me right away.
OWEN: So far, is there a question that you were wishing that I asked you during the interview that I didn’t ask you? If so, what was that question and the answer.
CHAD: All sorts of questions. It’s got to be all business with you Owen, you didn’t ask me about…
OWEN: Just go ahead and post whatever you want to post, it’s okay.
CHAD: You can ask my favorite pizza place, what kind of movies I like… No, you pretty much hit them well, man.
OWEN: That’s good. I’m speaking to you the listener now. I hope you’ve enjoyed the interview like I’ve enjoyed interviewing Chad. What I want you to do is if you’re listening to this interview on your iPhone. I want you to go to iTunes. You go to sweetprocess.com/iTunes. Or if you’re listening to this interview on an Android phone you can go to the Stitcher app, and that’s sweetprocess.com/stitcher. What I want you to do is leave us your review. Hopefully you’ll leave us a 5-star rating. The reason you want to do that is because the more reviews we get the more people will want to read why you’re reviewing us and check out the podcast. The more people are checking out the podcast, the more we’re inspired to go out there to get entrepreneurs like Chad who’ll come in and tell you in this case how he revamped and transformed his team. The step-by-step process behind how he did it, because this is the Process Breakdown Podcast. If you enjoyed this interview I want you to share with another entrepreneur out there who you think will find it useful. Finally, if you’re at that point in your business where you literally have to get everything out of your head step-by-step so your employees know what you know, I want you to sign-up for a free 14-day trial of SweetProcess. Chad, thanks for doing the interview.
CHAD: Owen, thank you so much for having me. It was great talking with you.
OWEN: We’re done.
CHAD: All right.