John (00:08): Hello and welcome to another episode of the Duct Tape Marketing Podcast. This is John Jantsch and my guest today is Mike Michalowicz. He's an author, speaker, and all around great guy. He's also the author of Greater Really of the Profit First, which is used by hundreds of thousands of companies across the globe to drive profit books like Clockwork Fix This Next Get Different, and today's book we're going to talk about all in how great leaders build Unstoppable teams. So Mike, welcome back to the show.

Mike (00:38): It's good to see you. One thing for my bio too, apparently I push alcohol on you. We ran each other in Whitefish. First of all, who does that? Who runs on each other?

John (00:49): Well, the funny thing was we talked about it. I mean, we knew we were going to be there, but then I just kind was like, well, he's busy. I'm busy. And then we've run into each other in the same dang restaurants.

Mike (00:59): I know totally unrelated things. We run into each other in the restaurant. I get you the obligatory drink, which is the Huckleberry Bourbon or something, or Huckleberry Vodka of Montana. You and your wife are walking out and I'm like too late and I had to drink hands. No, we're coming back in and sure enough, you are true to your word. I saw you walk back in, you must've been there for another five, 10 minutes before you and your wife walked out. So I'm impressed. I'm very impressed.

John (01:24): Yeah, we sat on the little bench. I'm sure they wondered what in the world we were doing. And by the way, huckleberry bourbon is really bad.

Mike (01:31): You got a KAR drink to, that was the bonus.

John (01:36): Alright, first question. What possessed you to write a book about, well, it's called All In, but really about building teams and building leaders.

Mike (01:46): Yeah, this is what it looks like. So the book, the subtitle is How Great Leaders Build Unstoppable Teams. How it came about is pre Covid, you get this too. People in my community, my readers, we have coaches, experts. I'm in a regular dialogue and my most common question is, what's the challenge you're facing now? And I look for that common thread. It was recruiting, retaining, raising the bar, and I think people were kind of blaming it on millennials, a new generation and sure, new generations, new needs. But that was, it's true for every generation. And so I started researching and testing, but then Covid hit and we went into Hyperspeed. What was formally a desire became an expectation. People wanted flexibility in their work schedule. Now it's an expectation that's available. People wanted to work from home, remote access. Now it's expected. And so when Covid hit this went into Hyperspeed, we finished testing out through our companies. Other companies codified the system and produced

John (02:41): The book. Yeah, it's funny, a lot of people talked about the great resignation. People just don't want to work anymore. And it's like, no, people just don't want to work for you anymore. You'll still want to work. Right? That's the reality, isn't it? People just decided they don't have to take it anymore and that they can go find a job that puts their priorities as priorities.

Mike (03:06): When I was in Whitefish, I hosted or spoke at an event and I asked the audience, it's pretty big audience, a couple hundred people, which for Whitefish is massive. And I've been asked this question to a lot of people. I said, who here in this room is an A player? And now these are business owners, managerial leaders. Every hand goes up, everyone's an A player. I'm like, don't be bashful here. I don't want you to pretend that you are. That's great. Then I asked with their hands up, I said, what percentage of the population are A players? Just shouted out the biggest was 10%. And I'm like, okay, everyone's hands up in this room. That's a hundred percent yet we're saying it's only two to 10%. What's wrong here? And my argument is they are right. Everyone actually isn't a player, but most are a players in waiting.

(03:52): You can pick any human being on this planet and they aren't a player if they're put in the right environment where they could thrive. And most cases it is not with your business. If we're a small business, I got 20 positions here, I can't support most people. So my job as a leader is identify, do I have an opportunity for someone to flourish here? And if I don't, then can I guide them to somewhere else? They can flourish. So to your point, if people don't want to work, it's because they really don't want to work for you. You're not setting up an environment where they can flourish and maybe you don't have that environment and that's okay too, but we have to acknowledge it.

John (04:24): So if somebody is going to pick up the book, one of the things I know you're going to teach is this basically some strategies for developing structure. So if somebody feels like, Hey, maybe I've got the wrong people or maybe I've just got the wrong approach, what are some strategies they can start employing to develop those folks that to date they've seen as C players?

Mike (04:44): Yeah, typically me identify a common approach we use and see what the results are and if it's not working, probably the common approach isn't right. So a lot of my theories or approaches seem contrarian, but it's simply whatever we're doing now is not working. One of the most common things, and I was guilty of this, I remember about a decade ago with my companies, I came out of the office and I wrote on the board, I called my 30 employees together and said, I've spent the last day running our numbers and my God, we can achieve $10 million in revenue this year. This is our corporate mission and we're going to do it by doing X, Y, and Z. And I had the tire playing in the background just for emphasis, and it was total silence and I'm like, what's going on? Why isn't everyone pumped about our corporate mission?

(05:30): My assistant Patty came to me, John and said, Mike, you get the bigger house, you get the new car, but why should we care? We have our own dream. And that's the moment I said, oh my gosh, a great leader, John, if you don't have an invigorated team, it's because it's not because your corporate mission isn't right. It's the realization. The corporate mission is really the dream of the owner or the leader or the leaders, but everyone has their own dream. Someone wants to learn this new language, someone wants to buy first, car, learn, play guitar. Our responsibility is to learn about the visions that our team members have for their lives and make that a priority. The job is a vehicle to get there. It's maybe it's an expression of themselves, but it's also a means to achieving those goals. But if we don't what the goals are, we can't support it. So our job is identify their personal goals, then align their accomplishments along with the corporate accomplishments and reciprocity kicks in. If I'm supporting you helping you get your first car, I'm not paying for it. I'm keeping your dream in front of you. I give you a work environment that can support that. Then you're likely to reciprocate and set a work environment that supports my dream, the corporate mission. That's what we need to do.

John (06:39): When people talk about acquiring talent, one of the challenges is just recruiting. I mean that was for a lot of companies. There was just so much competition for that over after post covid, but you present an approach, I think you call it camp recruiting, that I think if people wrap their heads around, we'll see this really innovative and I think it offers some opportunities beyond recruitment, but I'll let you explain the approach of camp recruiting.

Mike (07:07): So traditional recruiting is run an ad on the platform de jour. It used to be monster, now it's indeed. Then interview someone. The result is about 10% of hires are long-term meaning say over five years and considered a players meaning top performing members. Most hires don't work out. It's a hard system, but I did find an industry, and I want to say it's a trillion dollars in revenue. I actually got to look up the exact number that does not do a single interview, and yet they get top talent constantly. It's the sports industry. Just a personal story, I played sports in high school, I played lacrosse and I went to a camp in Northeast called Hobart. They're a preeminent lacrosse college. I went there with 300 other kids and all of us improved. They coached all of us to get better, but certain kids were being tapped on the shoulder saying, Hey, there's another field we want you to go over to even further your skills.

(07:58): What they were looking for was people with the most potential, the spark, and at the end of the camp, two or three kids were ultimately invited to play at Hobart. Not one of them, but they did. But I will tell you what happened to me. I played collegiate lacrosse and the reason I did was because in part that camp, it's a cool environment that everyone gets better and certain people are cherry-picked well in our business environment, we can do the same. Instead of doing interviews, run a camp. This is where you educate your community. You need to hire a bookkeeper. That's great. Run a bookkeeping camp or course, learn to be a bookkeeper, learn the skills. What our job then is to teach everyone and prove everyone, but in the process, who's showing the most interest, the most desire, the most thirst ultimately, and those people have the most potential.

(08:42): Now, one last thing is this is not just theory and you should try it out. It may work. There are corporations doing it just if you're not doing it, you got to do it. Now, home Depot, a mega corporation. The next time you see build a workshop that is a camp. What they're doing is they have you come down with your kid or some other people and you start selling birdhouses. Yes, they're ingratiating with the story, you're getting familiar with it, you're learning skills. They have an employee there observing the best participation. Who's the parent that's helping out other parents, who's learning the most, who's answering questions. When people have a question, they then tap that person on the shoulder and say, you're the type of candidate we would love to have work at Home Depot. Have you ever considered employment here? It's a great recruiting mechanism.

John (09:25): I recall you playing at No Bart,

Mike (09:27): Right? No Bart. Sorry, help myself. I did. I played. I played. My position was left out.

John (09:34): Talk a little bit about, I know one of the things you talk about and promote in your business as well back into Profit First even, but is this idea of financial transparency. I think a lot of times you talked about the $10 million goal, and so you get the new house. I think a lot of people think of it that way. It's like whether it's true or not, they think the boss is making a whole lot of money and that's like a demotivator, right? And so talk a little bit about your thoughts on how transparent we should be as part of this idea of building a teams.

Mike (10:04): There surely is an educational component to your point. The revenue of a company is usually the perception of the owner's income. When you're making a half a million dollars in revenue, they think you're taking home half a million when most business owners are actually getting further in debt to cover that half a million in revenue. But there's another component and it's based upon Maslow's hierarchy of needs. All of us need among other forms of safety, physical safety, physiological safety, we also have what's called financial safety. We need to have security. And if you've ever been broke or in dire straits financially, you know the stress it puts on you. So the employer has to bring about that safety. Now, there's two ways we do it. One is through the compensation of an employee. I'm not saying unreasonable compensation, you can't pay someone beyond what you can reasonably afford and what's appropriate for that position, but we do have that responsibility.

(10:55): But the other part is the open books. What's so fascinating about Open Books is it gives our colleagues confidence and understanding of where the business is headed, which brings a sense of financial security. So open books isn't just about an education to the team, it's actually giving them comfort of where the business is headed. Some people say, well, I got to show the good stuff. No, you show the real stuff because business just like life because it's ups and downs, but people have confidence because you're exposing it that they're hearing the truth from you and that they're more comfortable in the position.

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Mike (12:52): I'm not necessarily a fan yet. We congeal everyone's salaries, but the numbers, how we display them is if you decide to make the effort, you could figure it out. You could figure out exactly how much I'm making. We disclose when we do a profit distribution as an example, I share 20% with our organization, the owners of the company. And in this case, I just own my company exclusively. I get 80%. So you can figure out the exact profit distribution I'm taking. You can see everyone's compensation in one package. In my parts, I'm part of it and you can figure it out. I think disclosing it takes away a sense of integrity and some negotiations and confidence. So that's why we don't do it, but it's definitely figureoutable. Do you have a different opinion? I'm curious.

John (13:35): I think I'm probably a little bit old school that I think it just seems so foreign that I think even some of the open book things, it seems a little foreign from people, but I think it's, it's going away as all organizations are going away from top down. I think as far as how they're structured even So I think that it's eventually, as long as this system is set up fairly, where I think people get in trouble is they publish it and it's like, well, why is that person making that much more than me? We're doing the same work or something. So I think it has to be fair and people have to understand how they go the next level, what their career path looks like and the objectives to meet that. And I think as long as you do that, I've always probably erred on the side that it's just a lot of work to set up a system that is that transparent.

Mike (14:24): One thing that's interesting is in the sports industry, that's where I took this work camp or camps, work camp is not the right word. Camps or workshops I should say, where concept. They also disclose salaries, how much the coach is making, how much every player's making and players in the same role are making different amounts of money based upon their contribution. So the starting quarterback makes more than the second string quarterback,

John (14:47): Especially in the NFL. You hinted a little bit of this helping a person meet their own personal goals and then obviously contributing to the organizational goals. Do you ever find that there's a balancing act there where it's like it's none of your business to help them reach your personal goals? Again, I'm citing some things I've heard before and it's like I don't need to get into what they do in their off hours as opposed to I want to support what they're doing in their off hours. How do you balance that?

Mike (15:18): Yeah, we only support what they volunteer to share. So people do have certain private matters or something, right? I'm running a drug ring on the side, I need help with that. Some people may not disclose that, nor would I decide to help with that. How we help is in very rare circumstances do we ever help fiscally. What's interesting, what we found, and this was through research I did with a company called Jan coa. They're a janitorial firm in Cincinnati, 700 janitors, the founders Mary Miller. She shared a great story. She said, Mike, when someone becomes a janitor, it wasn't like this was a dream of theirs. No one dreams of being a janitor, but they all have dreams. And so I said, well, do you help fund that purchase of the house or do..