VANNOY:
Managing Talent Secrets to Small Business Success. I’m Mike Vannoy, had a marketing at Assure and I have a great guest for this topic today. If you’re watching the show regularly, we typically talk to lawyers and shrm, certified HR professionals about HR topics and compliance topics. But today’s a cool conversation. I think we’re talking to an entrepreneur’s entrepreneur. You may know Elizabeth Gore. She was on the show recently. We invited her back. I thought the conversation was so great. I’m going to introduce you here. Elizabeth serves as the co-founder and president of Hello Alice, which helps businesses launch and grow by providing access to funding networks and services through a network of over 1 million companies and all 50 states and across the globe. Hello, Alice is building the largest community of business owners in the country while tracking data and trends to increase owner success rates.
Elizabeth previously served as entrepreneur and residents at Dell Technologies there. She drove initiatives to support Dell’s goals and helping small and medium sized businesses scale and prosper. She’s the emeritus chair of the United Nations Foundation’s Global Entrepreneur’s Council, and previously served on the UN for nearly a decade as the first ever entrepreneur and residence for the foundation, as well as Vice President of Global Partnerships. People Magazine named her one of the top 100 extraordinary women. Fast company called her one of the most creative people in business, and she was named one of entrepreneur magazine’s Women to Watch. She has been covered in media outlets like A, B C C, B, SS, C N N M S N B C, Fox Business, fortune, glamor, and Time. Elizabeth Gore, welcome back to the show.
GORE:
Thank you so much for having me. Glad to be here.
VANNOY:
So Elizabeth, on this show, we talk so much about talent. We talk about trends in the labor market and the supply of the workforce, unemployment rates and all kinds of compliance stuff. You come at this probably from a little bit different angle. You are an entrepreneur yourself, but you’re an entrepreneur in the business of helping entrepreneurs and in talent. Man, you go back to pre pandemic, it meant one thing during the pandemic. It had two or three phases from thanks, I have a job to great resignation, to silent, quitting to now. I watched the news this week. The latest I’m hearing is loud quitting. We’re in a tumultuous time when it comes to talent. Let’s just maybe start with how you see talent as specifically as it relates to entrepreneurs and small businesses.
GORE:
Well, sure. Well, again, thanks for having me. And talent is critical to any business, whether it’s you managing your own time, your very first boss is yourself, right? And then I think the first five is our critical that you hire and then suddenly you jump to 30 and a hundred. But there’s the old adage that I still fundamentally believe in, whether it’s pre pandemic or now, which is higher, slow and fire fast. Easier said than done in many cases, but I don’t think that has changed. I do think things that have changed is why people take a job. What is their passion point? What are they negotiating for and with? And I think there is an advantage to small business and entrepreneurship right now. A lot of folks have really changed their tenor about climbing the corporate ladder. They’re looking for flexibility. They’re looking for something that’s very purposeful.
They’re looking for something, they feel ownership in whether than being one cog in a big wheel. So I do think that behooves small business and entrepreneurs, unfortunately in some cases right now there’s a backend benefit as well is there’s a lot of large layoffs going on, particularly in the tech and finance sectors, which is tough for those folks. But it also is positive for small and medium businesses where we’re not competing with those higher salaries and more aggressive jobs. So interestingly enough, most of the trends that I see right now benefit small business and entrepreneurship. I also think that notion of labor shortage is starting to change and evolve. People are going back to work as it relates to part-time jobs, which we need a lot of in small medium business as well. So I do think we’re on an upward swing as it relates to small business entrepreneurship as it relates to hiring.
VANNOY:
Let me ask this. You used a phrase that I think all of us have heard a million times. I don’t know if everybody really understands the why behind it. When you say hire slow, fire fast, put some definition behind that and more importantly, what’s the why behind both ends of that spectrum?
GORE:
And again, I’m teaching, but I’ve certainly made mistakes here. When you’re desperate to fill a position and you’re maybe cut a few corners or don’t look at all, at least three candidates when you fall in love with one, there’s a million reasons why we all cut corners here. But hiring the right candidate is so important because what you don’t want to do is get in there and someone is not good and then you’re stuck, right? Or you’ve wasted all that time. And so I think really taking the time and always having a minimum of three folks that you’re taking quite seriously. Even if you fall so in love with one specific candidate, you’ll always be surprised of what other people can bring to the table or the leverage you learn when you interview different folks. And then also making sure it’s not just the one you like the most, but they have that right talent.
And sometimes you’re looking for something really specific and maybe someone has almost all of it, but you’ve been looking for a long time and you just really want to jump in there. And generally that will not do well. So taking the time to make that right hire, making sure you’re talking to multiple people, doing those reference checks is quite critical. Even if you’re just desperate to get that talent in the door, it might cost you in the long run. I will say I’ve been okay at that. On the flip side, firing fast, that’s a tough one. So generally when someone is not either performing in the job or they don’t have the right skillset, passion, whatever that means, most of the time that is not going to evolve, particularly if you’ve really coached them, you’ve given them maybe a 30, 60 day window to improve.
Generally we tend, especially if you’re a compassionate individual to hold on too long to candidates, which is also quite costly, the time you’re spending it as a manager on an individual, the time that you’re losing by them not performing, others have to plug in. You can also lose other good people if you’re keeping one bad apple on the bunch. So letting people go in a way that you’ve tried, you put them through performance metrics is just not happening faster than normal. I don’t think I’ve ever regretted letting someone go. I’ve certainly regretted hiring the wrong people. And then there’s nuancing. Many of us have had to do layoffs which stink particularly in this economy. We certainly did, and that’s a whole nother ball of wax we can talk through later, but that’s the whole, if you can take your time to hire. But on the flip side, if someone’s not doing well, let ’em go quickly.
VANNOY:
I feel like I’ve spent time at small companies as an entrepreneur, as a founder, spent plenty of time at big companies. I’m doing both right now. I got some side hustles, but I got my day job here. I feel like when you’re at a bigger company, it’s easier to take risks of being wrong, but when you’re an entrepreneur
Man, you’re just literally dying. You don’t have enough hours in the day so you can feel rushed to hire. And on the flip side, it’s like you feel tremendous guilt. It’s like, okay, if I do let this person go in my bones, I know that they’re not a right fit, but if I let ’em go, I don’t have anybody to backfill. Am I going to go back to work 80 hours a week again while I’m still trying to backfill? And I actually, I think a lot of founders especially, they feel guilty. Oh man, I actually like that person. They’re not performing the way way I want, but they let ’em hang on just because their own guilt. And that’s not helping the employee in the long run. It’s not at least it certainly isn’t helping the company.
GORE:
It’s so personal. It’s so personal. People that say business is not personal, it’s such full of crap. And I will say many, many early entrepreneurs and founders hire people that they’re friendly with already, family, former coworkers, neighbors, it’s there’s a sense of trust there. They’ll usually work for you cheaper. They get excited about what you’re doing. So nine times out of 10, there’s a personal connection in those early years with the people you’re hiring. So that makes it even harder. But I love Brene Brown, the leadership coach, and she says, clear is kind if you lets things drag on and it’ll tend to get nasty on all sides. And you made me think of something I wanted to go back to on the hiring front. Just a couple of tips that we learned along the way. I really liked because it is just so hard.
You hire five people, one of ’em is probably not going to work out. It’s really hard to get a grand slam on all that. But a couple of things. One is can you hire someone for a trial or part-time or not full-time yet prior to onboarding them fully? Of course every state will have different laws around how long or and what capacity folks can work. But I do think if you can bring someone in 30 hours a week or on a project before you bring ’em in as an F T E, that’s something some states will allow a three month window of no fault. If it’s not working, you can let them go or before you start paying unemployment. So I do like that style of when you’re still small, can someone come in on a project or a part-time or some kind of trial braces before because once they’re in full-time, you’ve done all the legal that it’s just such a different ball of wax. So I do like that notion as you get larger, I think that’s harder to do, but in the early years, I think it’s quite effective.
VANNOY:
And so I’ll put my HR legal hat on for a second. I mean, there are at-will states and not at-Will states, the HR practitioner in me would say whether it’s an at-will state or not, you can still get sued. That doesn’t mean they’re going to win or you’re going to win, but you still could still have the cost to defend for wrongful termination. Laws help. But no matter what, being respectful, having great record keeping and documentation and clear communication around expectations, including whether it’s not we’ll state or not saying, Hey, we are in a probationary period. I think here’s just the more you can communicate, the better, safer you’re going to be.
GORE:
Absolutely. Absolutely.
VANNOY:
Elizabeth, I want your thoughts on this. So anybody who’s been doing this for more than a few years, that the talent seems to come in waves, right?
GORE:
Very true.
VANNOY:
I’ve been through seasons where I’m trying to hire and build a team and there just aren’t the applicant’s period, let alone whether they’re good applicants or bad applicants. There just aren’t many and there are other seasons. So if you’re hiring in tech right now, I mean a lot of the big companies have had tech layoffs, there’s more tech talent than there was. I mean, way more tech talent right now than there was nine to
GORE:
18. Absolutely.
VANNOY:
Right. So what’s your guidance for entrepreneurs? How do you try to stay disciplined to the higher slow knowing that talent does come in waves?
GORE:
I think of it as the housing market. Sometimes it’s a buyer’s market, sometimes it’s not. It’s very cyclical. But a couple of things. One is I feel like CEOs should always be hiring in their mind and recruiting, keeping your eye out for talent, developing relationships. My co-founder giggles, I’m always like, we should hire that person someday, and we really kind of keep up with those folks. A second thing though is I do think there are environments where you can consistently show up that when you do start recruiting, you’re not a new face there. So we work a lot. We are in the business of helping small business, so we do a lot with the US chambers. We also have a real commitment to diversity and inclusion on hiring. So we work a lot with Bunker Labs for veterans. We work a lot with the naacp.
We work a lot with environments where once we do start recruiting, where it’s not the first time we’ve showed up at those places, we do a lot with an A to B. We do a lot with lesbians through tech. We are at these either shows, conferences or we show up to speak and mentor so that when we are posting on a job board or we are recruiting, it’s not the first time they’ve seen our brand. So that’s something I think is really important. I also, I think our best recruiters are current employees. So once you do get two or three employees and you really like them, you trust them, they’ve great values, they’re going to have their own network. So we actually put into place $500 for if someone brings in a candidate that we hire. We have this cluster of engineers in the Carolinas that all have come out of one amazing guy, John Zarin, and he has a great university network.
And so I think your employees can be a really good tool and asset there. And then finally, your own activity. Again, I know there’s only so many hours of the day, but you’re on LinkedIn or Twitter or these other services and being out there advocating for different groups, speaking on behalf of those groups. So I think you’re always in your mindset recruiting, whether it’s developing relationships, showing up as events, ensuring your employees are active. It’s not just about posting up one job description and hoping it’s out there. One other thing I’ll say is whatever industry you’re in as an entrepreneur, I think there’s a lot of value in being involved and engaged as a C E O in those industry groups. I think that is a great place for recruiting. Again, for us, it’s unique because we’re small business, but we have engineers and accountants and we need subject matter experts in different areas. So being involved in some of those groups are important because also you see people that level up to the top, they’re really passionate about what they’re doing in those areas.
VANNOY:
When you talk about groups, you’re going to inherently get people who are passionate about that industry or that topic, whatever that thing is, right? Maybe it’s a mission oriented company. My sister’s an executive at the Red Cross. She could probably go make a bunch more money somewhere else, but she’s passionate about the mission, right? When you associate with people like that, that’s your networking pool.
GORE:
Absolutely, absolutely. And the one counter I’ll say is to make sure so you have a diversity of ethnicity, gender, talent, even the way people think that you do step out of your own core network and into other networks. I think that’s super important. So obviously I have my group, I have folks I network and talk to, but I need to make sure that I’m not a tech person, for example, so I need to be showing up. I’m a sales finance person, but to make sure we’re recruiting engineers or folks that identify in a different way, you need to make sure you’re stepping out of your comfort zone and stepping into those circles as well.
VANNOY:
Yeah, right. We recently did a study hop on our website, you’ll see our latest ebook. It’s the SS M B HR Benchmark Report asked. We had 2065 respondents. Over 2000 small businesses responded five questions in eight areas of HR from pre-employment to post-employment. And one of the areas we asked is about employee referral program. And it’s clear that in the final question we ask in the survey is, what best describes you last year? Fast growth flat or was it a down year? And so that we correlate the implementation of HR best practices to revenue growth. And it’s overwhelming just the basics. Do you post on job boards? Do you have an employee recognition program, employee referral program? Do you just do these really basic things? The fast growth companies, there’s something like a 0.7, four five correlation, crazy high correlation to just simply doing these basic things as part of hiring and finding and retaining talent.
GORE:
Very true, very true. Also, another thing to think about on retention is mistakes that we’ve made in the past is really talented, amazing people that have been a big corporate who have jumped in the entrepreneur environment and it hasn’t worked. So if you’ll bear with me on a second on that, when you’re going to a company with less than 50 employees, you will not be a specialist. You’re going to be a specialist slash generalist. We have a company motto. Everyone takes out the trash. A big part of that is when you’re in a smaller company, you don’t have the luxury of someone just doing HR or just doing legal or just doing marketing. You’re probably going to be stretched into other areas. Also, it is constantly changing. Iteration is part of being a startup. You’re changing, you’re evolving, you’re trying to monetize, you fail, you try something else, you win.
And so in the interview process, it is critical for folks to understand the environment they’re stepping into because sometimes you’ll have someone who’s incredible expert in marketing, let’s say, but they’re very used to a long-term plan that you set a goal, you go after it, it’s very focused. You have a lot of resources behind you. So it’s also that retention thing is also about being very transparent about the work style of being in a entrepreneurial environment and making sure that you push because there are really talented people that just don’t fit some work styles, right? It’s just like I would be driven crazy to go back to big corporate. I wouldn’t be able to do it. I used to be there, but now I think I would go bananas.
There’s a one-on-one thing there that’s just make sure you have a really solid job description. What are the talent and resources you need? What is that person going to be doing? But what you can’t put in a job description is, look, this is the environment we’re in. We’re very fast paced. Every quarter we have new KPIs because we’re having to evolve or we’re a venture backed environment, so if something’s going down, we’re going to have to go all in and make sure we raise it up. So just making sure that people understand the environment they’re walking into, that it’s not just the job description, the requirements and the qualification. It’s also the culture of that environment.
VANNOY:
One of the things I think is important there, Elizabeth, is I think so many times founders and CEOs of small businesses, they’re so wrapped up in the day-to-day, whether it’s the remodeling of a kitchen or the landscaping crew, the painters, retailers, whatever, the architect, whatever my business is, I’m so focused on that, that they’re working in their business, not on their business. And so the advice you just gave, there’s a prerequisite that they first have to be aware of what the culture is.
GORE:
Very true. They may
VANNOY:
Not be right. And so I think that speaks to being deliberate about, I’d say self-aware and deliberate. What is the culture really? Not what you want it to be really, but also what is it that you want it to be? Because you are going to hire people that will hopefully shape and fit into that mold. What’s your advice for entrepreneurs to become more self-aware about what the culture is for determining that kind of a fit?
GORE:
Well, I think step one is your own personal management. Really reflecting on are you, and neither of these are right or wrong, it’s just your style, right? Are you a micromanager, a manager, or are you such a doer that you hire people, give ’em an objective and then you see ’em in six months and you’re way up here. And again, all those are different styles, but some people, especially maybe young, new people to the workforce might need a lot more guidance and need you to meet with them every day or three times a week. If that’s not your style or you literally don’t have time to do that, you need to make sure you’re hiring full self-starters who don’t need a lot of oversight, right? On the flip side, maybe you’re someone who is in the weeds, you want to know what’s going on, so you need to hire someone who’s conducive to that kind of oversight and that relationship.
So I think that’s part one is just your own style. And I don’t know that that changes a lot as the company grows, it’s kind of who you are. And then the second thing is, where is the lifecycle of the company? If you’re in an early startup, just being very clear, we might look 200% different in 12 months, which most startups should. The whole point of being a startup, if you’re maybe in a growth organization, you’ve been around eight to 10 years and you’re a little bit more steady, I think you should be very transparent there. I’ll give you an example. Our chief product officer, Kelsey, I think is the best in the business. And I tried to recruit him before we even closed our series A. So this is early on, and he was more self-aware than me. He was like, look, you shouldn’t hire me yet.
First of all, I’m a dad with three daughters. I got to have more of a steady company. But then second, I’m a growth guy. I build once things are big and resource with big teams. And after our series A closed, and I dunno, it was a couple of years after that, I actually went back and he’s been with us ever since and he’s the most incredible leader. But that is a time when he was more self-aware than I was of when his talent was appropriate for the lifecycle of our organization. I think it’s your personal management style, where is the lifecycle of your business? And then I think the third thing, again goes back to the culture is what is the style, the work style of the overall company? So I think those are the three things I’d be asking myself before I even went out and talked to a single person.
VANNOY:
All right. So we talked about different ways to recruit, where to find talent, the importance of talent hiring for fit, not just job skills and job requirements, but actual culture fit in stage of life. What are your thoughts on developing talent? What are the things that really jumped out to us? I think it was of all of the 80 questions we asked, the one that had the largest gap between the shrinking companies and the fast growth companies is do you assign stretch goals to your employees And shrinking companies, generally speaking, don’t and fast growth companies do. And I think about an entrepreneurial environment where things are changing so fast, maybe they don’t even think about it as, Hey, I’m thoughtfully, deliberately assigning you a stretch goal so much as, oh my God, we can’t keep up. I need to do this. I’m sorry you don’t know how to do this, but I need you in either way. They are stretching their employees. I’d be curious for your thoughts on stretch assignments, but just in general, what do you see the best practices for developing employees?
GORE:
Yeah, I mean, I’ll just start out from a general standpoint. I personally am very passionate about this and also not very good at it. So it’s something that, and mostly it’s a doer and I’m taking out the trash myself, so it’s hard. But I actually think that we are in a stage right now in the workforce where we’re in a really cool place with employee growth and both interpersonally, professional growth and so on, where again, it used to be we lose talent, not a lot of room to grow up and down, like up the ladder, title changes, big salary changes, which is just impossible in a small organization where we can do a lot, which is exciting is that the growth of an individual. So their skillsets, both professional and interpersonal, helping them build their networks, helping them take on more responsibility, helping them see things through fruition, mentorship.
So I think that that is so much more valued in this generation of work, not just age, but this current workforce, which is really gives us a leg up because again, sometimes it’s really hard that you’re not going from an associate all the way up to a senior vice president in a 50 person company. The things that I’ve seen that I’ve loved is I started with this, but one is skillset. So every one of our employees, for example, we offer them coaching around public speaking. Everyone can actually represent our company, whether it’s on social media, it’s in events. So is that a skillset? All of our folks that have any kind of engineering background, we are trying to help them get the certificates they need for their next job, any kind of training they want for that. Another area that we really like for advancement is coaching.
There are coaching models from $150 an hour all the way up to 30,000 a month retainers for individuals for professional development. I think that is a great area that depending on your budget, you can offer your employees. So I do think there is a lot that you can help your employees grow personally, interpersonally, skillset, no matter what size your organization is. The second thing is, a big thing around employee retention we’ve seen is recognition. And I don’t mean you’re throwing a party every time you have your sales event, but there are softwares out there. We use bonusly. I’m a big fan of it where there’s a point system where we use it through Slack where one employee can give points to another employee whenever they do something. Well, they can buy things from that, they can donate it. We make sure that we every quarter allow employees to recognize other employees publicly. So I do think that recognition aspect is important. And then I do think feedback and accountability is important, which is kind of the counter. So where people can improve is I think just as important as the rah rahs, right? Ensuring you have a good our system and that you are recognizing rewarding, but also here are areas to improve and here’s where we can help you.
VANNOY:
I want to come back to that, and I know you’re not saying carrot and stick, but there’s a little bit of a carrot stick. So our data made it really clear that employee recognition is the fast growth companies do it, the shrink companies, right? If you’re an entrepreneur that’s really on a budget, and by the way, things like Bonusly, there’s a ton of tools out. You don’t have to spend much money. You also don’t have to spend any money. So
GORE:
Yeah, I agree with that completely.
VANNOY:
What would be some of the things that you, just practical advice you could give to an entrepreneur that are free around employee? Yeah,
GORE:
Absolutely. I mean, the biggest thing is peer recognition. I mean, in your staff meetings it’s one thing to come from the boss, which is important, but ask for just over email. Please nominate anyone of your peer sets that we can announce at the next staff meeting. Even if you have four people, I mean employee of the month, when you walk into a small convenience store, that stuff matters to people. It matters. The second thing is, and I said this, allowing folks to own a project all the way through. Sometimes it’s hard I think to do part and parcel, but if someone can feel the ownership on something all the way through, I think that tends to be really important. The other thing is your own mentorship. Don’t discount how valuable you can be to your employees. So time is really tough. I know, but outside of just your regular meetings and so on, when’s the last time you offered employee 45 minutes over lunch? Ask me anything about my career, about lifestyle, about anything? I mean, that can be incredibly valuable. So those types of things I think go a really long way.
VANNOY:
Something you said a second ago about assigning projects, whatnot. I just think about tying back to stretch goals. So in developing my employees, assigning them something that I know they aren’t even fully capable of, it’s a stretch. I’m expecting them to grow into it. Maybe the thing doesn’t even work out as well as you would’ve hoped. That doesn’t mean you can’t find opportunities to still recognize saying, Hey, you know what? I gave John this project. John had never done anything like that before. Here’s some of the challenges he faced. And we didn’t actually, we may not have accomplished exactly what we set up for, but here’s what John did. It was really awesome. He learned this new skill as a company. We acquire this muscle memory and now we’re pivoting this direction and we owe it to John. So recognition doesn’t require first place trophies. No.
GORE:
It’s
VANNOY:
Recognizing good things because people need to feel recognized.
GORE:
Right? Exactly. And to your question on stretch goals, I admittedly struggle with that a little bit. I think in the entrepreneurship environment, we do have to change a lot. We have to iterate. There is, especially in tech and important culture of if something isn’t working, cut it off and pivot. And so I actually have come back to, we have our one year, two year company-wide objectives and key results, but we’ve actually pulled down our employees to quarterly. And the reason why is just the shifting landscape right now, the economy post, I mean, so much is changing. And we actually started to see some low frustration in just, oh, we’re trying and not reaching things. So we actually pulled back of like, let’s just try and crank out per quarter these shorter objectives. They’re still laddering up, but incremental wins I think is the right way to say it, is what we’ve been looking at.
And I just shout out to a lot of the small business owners right now, particularly brick and mortar storefront, anyone in retail or commerce, I know they’re all going through that right now, are receipts up? Are they down? Should I hire, should I not? Where’s this economy going? And even for the founders, their own personal mental health and their employees right now, it’s okay to be, I think just quarter by quarter. Just really be smart about listening, learning, pivoting, and allow your employees to have that short-term win as well. Everything is so up and down right now,
VANNOY:
Elizabeth. So you gave me an idea. My brain is going down a different path, but you talk about incremental wins, A trend that I see, I’ve been trying to implement it here. I see it in LinkedIn. You’ll see somebody that’s an entry level job and every six months. So where it used to be, it’s after a year or two you get your first promotion, then a couple years later, then three years later, then five years later and after a few 20 years you got a career that, but stereotypically, but there’s a lot of validation in it around maybe millennials, gen Z, they’re anxious, they want to contribute, they want to be recognized. And I’m seeing more and more companies, big and small chunk up the job. So if I have what was formally say, a sales development rep job that was a, okay, do this for two years and you can get promoted to an outside sales rep. Well maybe there’s an S D R level one, an SDR level two, then there’s a senior S D R, and you break these things up and you see people on LinkedIn proudly displaying. I’m proud to announce, I was just promoted to fill in the blank. Level two, fill in the blank. Level three. What are your thoughts on micro segmenting the jobs and laddering a career path like that?
GORE:
It’s so funny because the 46 year old in me is like I worked eight years before I ever got any notion of recognition, but that’s not the way it is anymore. And I also don’t like that every single person gets a trophy. So I struggle to answer that. I am myself trying to figure this out. But I do think we are in a fast-paced short-term society right now with a very short attention span. And if there is a tactic like that, that is increasing performance and retention, why not? Is the way I see it. I mean, if that is the way of the workforce and you can pull that off, I think that’s quite interesting. One thing I’ll say though, sorry, consistency. I have learned this over time. If you’re doing it for one person, you better do it for everyone and it needs to be consistent and clear what you’re offering. So that’s one thing I would say.
VANNOY:
I think one of maybe the hidden benefits, I mean the reality is I’m pretty anti participation trophy guy myself. And I mean my screen saver literally says nobody caress, period, work harder, period. I mean mentality. So the thing I like about it, it’s not an appeasement to a different generational issue. I think there’s maybe a component of that, but if you’re going to carve out, say here’s the first 90 days level of the job, and then there’s a level one, a level two, a level three, it forces you as a boss to actually think through what their development stages look like and what that’s
GORE:
Very true
VANNOY:
Must be.
GORE:
That’s a very good point.
VANNOY:
So the win for the employee is, okay, they’re getting wins along the way and they’re not participation trophies. If you don’t hit the certain KPIs and metrics and outcomes, you’re going to be stuck at level one forever. So there is performance based, but I just think as an employer, it forces you to more deeply think through the roles. And by definition, if you do that, you going to be a better manager. You you’re naturally going to have better performance management processes because you’ve benchmarked what the expectation is. There’s all kinds of goodness I think that comes with it.
GORE:
Yes, that’s a good point. And I said earlier, I very much care about this, but I’m not great at it. And so one of the things I would share as a tip to entrepreneurs that are in fast growth companies is if you don’t have the time or you’re not great at it, maybe pluck someone who’s really good at it and very passionate. Who’s on your team that can really help you through this? And I don’t mean traditional HR, by the way. So we have a chief of staff, Jillian, Ben Vanu, she’s incredible, been with us. She was our first ever hire at Hello Alice. And she is so good at culture and recognition and really understanding when our employees need more, less. So that is part of her job description, is our recognition program, mentorship, how we run staff meetings, how we run, and then performance management.
There’s the growth side, but then there’s the O K R side. Our O K R side sits with HR very traditionally, but growth, skillset, interpersonal growth really sits with Jillian and she’s so good at it and her and I meet every other week about it, but that is part of her wake up every day and ensure that we have a culture that’s allowing our employees to grow. No matter if we’re in a down economy, up in economy, we’re doing layoffs, we’re hiring. And so that has been just wonderful because it’s something I care about and I stay awake at night. But whether it’s right or wrong, I’ve prioritized our finance and fundraising and everything we’ve had to do. And so it’s just something to think about. Once you hire your third, fourth employee, maybe you carve out a piece of one of their jobs if it’s not your specific skillset.
VANNOY:
I love the way you even said that, carving out a piece of someone’s job. I think a mistake too many entrepreneurs make is, oh, I hired him to do this, therefore I can’t ask him to do that. Right?
GORE:
Right.
VANNOY:
That’s nonsense right Now, the bigger you get, your roles are going to be more specialized. You’re going to have employees who want to do specialized work. So there’s a whole conversation around fit, I guess. But it goes back to stretch goals. There’s no reason they joined a five person company. It’s obvious you’re going to have to wear many hats, right? Yes. I’m going to pivot a bit here. So we’ve talked a lot about recruiting talent, bringing that talent on, make sure it’s a right fit, developing talent. What about when it comes, and I’m kind of going to lean back towards your higher slow fire fast, what about performance management? And let’s talk the good side and the painful side, the good side. How do you manage performance to keep on raising the bar
GORE:
And get
VANNOY:
More productivity out of your team? And then the other side of that same coin, how do you manage performance to make sure that slackers don’t stay right? And maybe it’s purely productivity, maybe they’re high producers, but they’re cancerous to the culture. I guess in general, talk to me about performance management.
GORE:
Sure. Well, step one is you have to do it, I joke. But again, in the business versus outside the business, I think a mistake a lot of entrepreneurs make is it’s an afterthought. You’re either doing it or you’re not, versus being really systematic about how it works. Do you use OKRs, KPIs? I mean, what system do you use? And I don’t mean electronic system, I mean you culturally, and then you have to take the time to actually follow that protocol. And so I know it’s a very painful once a quarter to carve out two days to sit with people and give them feedback. It’s also can be very uncomfortable and usually have to prepare for those two days. So there’s work that goes into it, but it is critical. And I think a lot of entrepreneurs wait until they’re at 10 people or they’ve been in three to four years, and by then you’re playing catch up and it’s, I think the day you have your first employee, you need to have what you feel right of what performance management system are you using?
How are you measuring? Are you quarterly, monthly? What is that? What is it that you are giving feedback on? There’s some things that are very easy sales, are you hitting your numbers? Even engineering, I mean, we know every keystroke at this point, but there are other areas like marketing that can be softer. There can be operational, that can be harder. So you’re going to have to put in place what you’re measuring on. God forbid you got the slacker. And if you don’t have that in place, it’s very hard to let them go legally. And then additionally, a lot of people now are like, give me specifics when you say it, give me specifics. So if you’re not writing it down, documenting against whatever that description was. So again, not in jest, you’ve got to actually do it. I think that is so important. And if it’s hard for you in your mind to carve out the money time and exercise for it, just know you will make more money, you’ll be more productive and you will save time in the long run to do all those things.
All this said, we do run on and objectives and key results, a classic O K R system. And as I said earlier, we try to be crystal clear with our whole company of what is our 12 month objectives, but then we have a waterfall down of department and then employee on the quarterly metrics, and then our employees are then measured based on that, and then their manager assesses that every quarter. So I would say again, the challenging part is not everyone are good managers. Maybe they’re very good at engineering or marketing, but then when they get people underneath them, you have to make sure they actually know how to do this as well. So I just say that because every hire you make, you need to be planning your own time to manage the manager and so on and so forth until you have a luxury that you’re big enough to hire people that are HR professionals that can help you through it.
VANNOY:
I love these more mature models of the OKRs and KPIs and cascading goals. It’s probably a conversation, maybe we do a talk on a different show just on that topic, how to implement concepts like OKRs for small businesses. I think maybe the place I would guide small business owners and entrepreneurs the most. I think so much of the time, if first set objectives set your key performance indicators, but the purpose of doing that is to focus on outcomes and to focus on outcomes. What precedes outcomes is observable behaviors. So much of the time, a trap that entrepreneurs fall into, all humans fall into this. I mean, shoot, just turn on the news. Doesn’t matter which side of the aisle you’re sitting on, it’s the assigning intent to the other person. You did this because you believe that you’re not making enough sales calls because you’re lazy. You’re not resolving enough support calls because you don’t have a friendly enough personality. Don’t assign the because focus on the outcomes and focus on the behaviors. So as you’re managing performance, the outcomes should be relatively easy to come up with, but it’s a trap to fall into, you do this because you are that or you don’t have this or whatever that don’t assign intent. Focus on the behaviors that you can observe because that’s something that the employee can’t disagree with you about. You observe. Very
GORE:
True.
VANNOY:
Yeah, three out of five days this week, you came in late and it was only a couple of minutes late, but late is late,
GORE:
Late, late versus,
VANNOY:
Hey, you seem kind of disorganized. Well, I’m not disorganized. You have no idea how hard my life is, right? Versus the observable behavior is you were late.
GORE:
Right. Exactly. And go ahead. Go ahead.
VANNOY:
I was just going to say, what other guidance would you give entrepreneurs around performance management?
GORE:
Well, one of the things you said earlier, I forgot the way you phrased it, but someone who’s doing great on their metrics, but they’re a jerk, actually. I think a jerk is a jerk, and they got to go. You will end up spending more time, even if they’re killing it, managing the people around that person who they’re driving nuts and then that’s taking your time away. I do believe one bad apple, particularly in a small company, can really upset things. And also in a small company, they’re representing who you are and who your brand is and so on. And so one thing that I do think we’ve been very good at, there’s people who are wonderful at interviewing and they can fool you and they slip through the cracks and you got a jerk on your hands. And that’s when I don’t care how good they are at something, generally, you’ll end up spending more time on them than you want to spend, even if they’re hitting their metrics.
VANNOY:
This comes back to cultural fit, right?
GORE:
Yeah.
VANNOY:
I mean, it sounds icky to me, but some businesses actually want to have a ruthless culture, right?
GORE:
Yeah, that’s true. That’s true.
VANNOY:
And so I think it comes back to culture. So if you had spent time at a big company, it might be familiar with the nine boxes. So imagine the XX is performance low performers to high performers.
GORE:
IX
VANNOY:
Is cultural fit, not a cultural fit to high cultural fit, and it’s easy to fire somebody who’s a low performer and not a fit, right? Right.
GORE:
Yes. It’s those
VANNOY:
High performers that are not a fit pose the tough ones for entrepreneurs, because if you’re a 5% company and one person is, they’re performing, but they’re not a cultural fit. That’s of your workforce, that one human being. But the phrase for those folks is they’re onboard terrorists, right? You are not going to get to the next level if you’ve got the poison pills sitting there, who isn’t going to allow your culture to be the kind of company that you want to be.
GORE:
No. And you mentioned growth. I want to bring up one other thing. I think it’s really important for growth organizations. So you might have the best 10 employees for the first three years of your company, and they’re amazing. They’re great at their job, they have great cultural fit, yet you get to 50 or a hundred employees and suddenly those 10 or five of the 10 aren’t working out anymore. And that can be incredibly difficult, particularly our folks who are passionate and been with you from the beginning. It is the unfortunate, difficult side of being in a growth organization when sometimes you do grow past your talent. And a mistake I think a lot of people make is they drag folks along and it’s usually out of kindness and empathy and loyalty, but it ends up either not allowing your company to grow where it should, and that is your responsibility as an owner. Or two, it ends up getting nasty or it ends up embarrassing these individuals. And so again, unique thing to I think a companies that’s going from five to 10 to 50 to a hundred, but nine times out of 10 there will be a few people and it’s painful. Gosh, Caroline, I’ve been through this a couple of times and we’ve lost wonderful relationships over it. But you’re going to have to make some of those tough decisions at some point where actually you’re not retaining people. You have to get different types of talent in the organization.
VANNOY:
Yeah. I’ll just give an example because it’s probably a painfully obvious one, but think about a finance person. When you’re a five person company, you probably have an office manager who does bookkeeping tasks and you have a C P A who does your taxes, you get a little bit bigger. You might maybe a lot bigger. Maybe you have a director of finance, maybe you even have a VP of finance. That is a very different skillset than clearly the office manager bookkeeper doesn’t have. You get to maybe even a publicly traded company. I mean, you could be a brilliant VP of finance for a private company, but if you’re not a certified public accountant, you can’t sign the books. I mean, there literally are just different skill sets there. That’s a self-evident example. But the same is true when you go from five to 10 to 25 and 50 employees, just what it means to be a supervisor of a team of five who is maybe in one office versus the supervisor, the quote leader of that same function, but now it’s five teams across three states. It’s a different skillset.
GORE:
And again, that’s the tough thing about success sometimes in growth. And look, I love when you can grow people into different roles or a different job, but sometimes it just doesn’t fit, but it’s part of learning.
VANNOY:
I’m going to give you the opportunity to kind of bring us home.
I believe in the way I introduced you. You’re an entrepreneur as entrepreneur, right? You help and coach and guide other entrepreneurs to grow their business, but you walk your own talk, you live it, love your humility. You talk about what you’re passionate about, but maybe what your own strengths and weaknesses are. For the most part, if you start a company, it’s because you want to grow it. There are some lifestyle businesses out there, but for the most part, either you’re growing because you want to be, you’re not growing, but you’ll want to be, or you got a lifestyle business. So let’s say we’re talking to two thirds of the audience here who are attempting to grow their business. What’s your best advice for them? How they should be thinking about talent, recruiting, developing, retaining talent so that they can get over these plateaus to the next levels of growing their business?
GORE:
I would say that the three things I think about the most and that I think every c e o should is that your time talent and your cashflow and the talent piece of that, you’ll never be able to outsource that. You’ll never be able to delegate. That really should come from you as a leader, meaning who you’re hiring, what is the culture, how are you measuring it? How are you onboarding people? How are you growing them? And that is an important responsibility as you grow your company. You’re going to have to carve out a part of your job description no matter if you have an HR function or not, to always be thinking about it always. And there will be difficult times where you have to lay people off, they will be awesome. But also difficult times when you’re in a blitz hiring where you got to get people in the door. And then there’s just those pretty times that are just this nice slow growth. And that’s though when you should be growing your people and really measuring them. So I would just say, just know that it’s a critical part of the job always, no matter what size your organization is, and you got to take time and put a lot of effort into it.
VANNOY:
They say, if you want to go fast, go alone. If you want to go far, you got to have a team, right?
GORE:
That’s right.
VANNOY:
I suspect if you’re going it alone, you’re probably not listening to this show today. You don’t care about employee issues and HR compliance issues. But if you want to go far, then you’re going to need a team and you got to think about talent. So Elizabeth, I always enjoy the conversations with you. Thanks for joining me today. Thank you.
GORE:
It was a real pleasure. Appreciate y’all
VANNOY:
Everything I learn every time I talk to you. So thanks so much and thanks to everybody else for joining us today. Until next week, we’ll talk to you then.