EP24 (Part 1) Getting and keeping the best people.

In this episode, Mike discusses the importance of getting and keeping the best people in a business. He emphasises the need for businesses to have a deliberate and intentional process for hiring and building a strong team. Mike highlights the significance of creating an ideal organisational structure, designing job descriptions, and implementing a rigorous interview process. He also emphasises the importance of marketing to attract talent and aligning values with the hiring process. Additionally, Mike emphasises the need to set clear expectations for the first 90 days of a new hire's job.

Takeaways

• Building a strong team starts with a deliberate and intentional hiring process.
• Designing an ideal organizational structure and creating clear job descriptions are crucial for attracting and retaining the best people.
• Marketing to attract talent is as important as marketing to attract customers.
• Setting clear expectations for the first 90 days of a new hire's job is essential for their success and integration into the business.

Chapters

00:00
Keeping and Getting the Best People

02:19
Building Businesses that Thrive

04:41
Designing the Ideal Organizational Structure

06:38
Creating Job Descriptions and Interviewing Process

08:49
Internal Referral Schemes

10:13
Having a Clear Owner for the Recruitment Process

11:11
Marketing to Attract Talent

12:30
Building a Hiring Process

13:51
Fire Fast, Hire Slowly

15:43
Gut Check in the Hiring Process

20:22
Values in the Interview Process

25:08
Setting Expectations for the First 90 Days

Find out more about working with me. mike@smbmastery.com.au or https://www.linkedin.com/in/mikeadamscott/

Transcript

Mike (00:01.558)
Hey guys and girls, good to be back. So today as promised, I want to do the first of two episodes, part one and part two. So part one, the title is going to be keeping and getting the best people. And part one is going to be, let's say up until we have hired people into our business and part two is going to be now that we have great people into our business, how do we, how do we keep them?

How do we get the most out of people? How do we bring out the best in them? Make them want to stay and make them love our businesses, et cetera, et cetera. So with that said, let's get into it. So business, in my opinion and observation, is largely just people doing stuff with other people. And yet also in my observation, and this is of other founders, but also in myself for a long time until I changed this, most SMBs,

small to medium sized businesses don't put enough effort into how they think about and execute on getting and keeping the best possible people in their business. It's kind of an ad hoc thing. It's done organically. And it's just not done well enough in my experience. And then people wonder why they don't have amazing people in their business. And they wonder why they don't keep people in their business. So my hope is that in the next two episodes, I'll be able to share some of the stuff that's worked.

very well for me in my businesses and that I've observed working very well for others in their businesses. Certainly, this is not exhaustive, but the idea is that depending on how mature and effective your processes are, my hope and my expectation is that there should be enough here for you to begin to make some meaningful improvements. As with anything, if you want to be excellent, you need to put in the effort and the intention.

Sometimes it's a lot faster to work with somebody that's done this stuff before. So if you get value from what follows and think that I'll be able to help you accelerate your learnings and improve your business, get in touch and we can see if there's a fit. Okay, so getting the best people, in my opinion, actually starts with process. And you might be going, wait, what are you talking about? And let me just explain this. So Michael Gerber in the E-Myth, Vern Harnish in Scaling Up, Gina Wickman and all the contributors to the EOS model.

Mike (02:19.958)
They all validate this in my opinion. And what I mean is that we need to create businesses that don't rely on having amazing talent just to survive. We want to build businesses that can thrive, even if we have mediocre people in our businesses. And then if we put a lot of focus and investment in getting the best possible people, then things really, really go well.

Relying on individual heroics in your business is risky and it creates key person dependency, it creates a lot of stress and it often creates a pretty massive loss of control for the founder. I've certainly been through this before and it's something that I really want to avoid ever having to go through again. And if I can help other people avoid having to go through this, I'm certainly going to try. So really a key learning here is that getting and keeping the best people is actually very close to linked to building really strong core business processes into your business.

I'll do an episode on that soon, but it's important to just sort of keep this in the back of your mind. Without going into a lot of detail here, why I'm saying this is really great people look for well-run businesses. Really great people look for environments where there is opportunity to grow, where there's accountability, where people are held accountable to doing what they say and what is expected of them and what they agree to. And they look for...

environments where they're not going to have to carry everyone and everything. And a lot of the stuff can be solved through really strong, rigorous process together with accountability. And that's that kind of, you know, usually equates to, to good execution. So just keep that in your back, your mind, why are we going through this is that you can have the best people in the business, but if you're just running a chaotic business, those people are unlikely to stay and even some people won't join because they'll look at the business and go, geez, this is an absolute mess. I'm

I'm not interested. So just keep that in the back of your mind as we go through this. So, okay, so to begin with, we need to build out what we want our organization to actually look like. So not necessarily what it looks like today, but what is the ideal structure from a people and roles perspective for us to level up our business without us just scaling chaos and everybody wearing a hundred hats and just consistently putting out fires. Ray Dalio speaks about this in Principles, it's how they built Bridgewater Capital.

Mike (04:41.95)
In the EOS model, this is referred to as the accountability chart. And you'll find different versions of this. In my opinion, it's all pretty much the same thing. You'll find it all over the place, but in essence, it's going through a process of creating an artifact that shows the structure of your organization, but it's not focused on titles and reporting lines, but rather it's focused on the roles. And then it's focused on just the handful of things that each one of those roles is accountable for. So to illustrate this as an example, a very easy one.

One of the easier ones to illustrate this with is, let's say you have a role that's called marketing. Their title might be CMO or whatever, head of marketing, marketing manager. I don't really care what their title is, but their role is marketing. And within that role, there are thousands of things that person needs to do. They need to have our logo designed. They need to create campaigns. They need to create events. All sorts of things, right? But really what they're accountable for is probably...

Pretty simple, it's probably generate leads and one or two other things. If they have people that they manage, they probably have to be accountable for managing and leading the people underneath them. They might have literally one or two more of those things. But really the point here is you have the role. What is the role in this case, it's marketing. And then what are the sort of maximum, I'd say sort of three to eight things that role is accountable for. It's not about...

the millions of things that they have to do. It's the deliverables. It's the things that can be measured. And it's the things that will have a metric next to it. So just to repeat what I was saying, they might have a ton of activities to do, but the main metric they're gonna be measured on is gonna be number of leads generated, and then probably quality of leads. And then if they have people underneath them, it's gonna be how well they are managing and leading their team members. So again, there's probably a whole episode in this artifact in and of itself,

Really, it's important to start with getting this down into an artifact with your leadership team to really design the structure that you want your business to look like over the next, you decide, but let's say like six to 18 months. Because without this, it's quite ad hoc then, the way that you're sort of making hires. You're doing it usually when it's too late, or you're doing it outside of a strategy. So it's a really important piece of the process to design this artifact that goes, okay.

Mike (07:05.966)
Now we know what we want the organization to look like. We know what the roles are within the organization and we know what the accountabilities are for each of those roles. Great, now we can take us from where we are to where we want to be. So once you've got that, you fill in the names, right? This process is done structure first, people second. So you don't design the org based on the people that you have, you design the org based on the ideal situation. Then you say, okay, well, which people do we have in the business?

Where do they fit? And then pretty clearly, it gives you a sense of where the gaps are in the business, who's in the wrong seat, where you need to hire in, where you might need to hire, but your budget just doesn't allow it. So at least you now have a real and honest view of what's happening and you can communicate and sort of share roles realistically now. But it's important that we do the structure first, people second. This artifact will give you a really solid view of the gaps, where you're strong, where you need to hire, et cetera.

This can be a really good starting point for beginning to build out a little bit more of a process for who we're going to hire, what skills we need, and how they relate to everybody else. From this, you can build out your job descriptions and you can do them in quite a nice concise way. And this also gives you an artifact that can help you with your interviewing process to show how everything sort of sticks together and to really get really clear and concise about, hey, we're hiring for this role.

these are the sort of three to eight things that this role is gonna be accountable for. Let's talk through these. Like tell me about times when you've delivered on this. Tell me about times when you've delivered on that. It really brings the conversation into a really nice tight focus.

Mike (08:49.314)
From here, advertise wherever you need to advertise. Just something to remember, a referral is always going to be the strongest. So it's a good idea to build internal referral bonuses if you can, if your numbers allow this. We definitely did this quite a lot. Developers were, and still are, good developers are very difficult to find. We had an internal referral system where we actually gave quite a decent referral bonus if somebody referred a...

develop it to us in the business that we ended up higher. And I think we had to stay for three months in order to qualify for the bonus or something. But internal referrals are usually the best, just like in sales, referrals are always the best. So have a serious think about building in internal referral schemes, because if you have good staff, they are the best advocates for your business. If you're running a good business, they'll speak the best to other people about your business. They're gonna have friends that do similar things to them. You really wanna try and incentivize them to bring people that are great into the business.

Okay, so this next point is something that we learned the hard way. It's quite a simple one, but it's a really massive one. And that is that you need to have an owner for the recruitment process. This was a hard lesson that we had to learn. And while many of the business, pretty much everybody in your business should touch the recruitment or onboarding or interviewing process, especially in a small business, there should be one clear owner and we made this mistake. We shared this ownership.

for a long time and it just was incredibly inefficient and we were not that good at it until one day we said, hey, actually we want this one person because he's really good at this. We want him to fully own this process, which means we need to carve out a bit more time out for him, but he needs to own this recruitment process. And when we did that, we started having much, much more success. So like anything when multiple people are accountable, nobody's accountable. So get clear about who owns this recruitment process in your business.

many people, in fact, there will be many people that are involved in it, but there should only be one clear owner. That's an important part. On that point, there's something to think about, like a lot of people don't think about this in this way, but I find this very useful that you have two types of marketing in your business. You've got marketing to get business in the door. Most people understand this. You probably have some form of formal or informal marketing strategies and processes. What a lot of people don't think about those, you also have a marketing

Mike (11:11.286)
that say strategy in your business, whether or not it exists, is marketing around talent. So the message you're telling the world to get business in the door is one thing, but there's another message that you need to be telling the world and you need to be clear on around marketing to great talent. And thinking about this can be very, very useful because if you sit down and you draw up a marketing strategy for your business, you're going to think about, you know, who is our target audience? Why do we want them? Who are the personas there? Why should they want to buy from us? What do we need to look like?

What are our unique value propositions, et cetera, et cetera. That same process is necessary if you want to attract and retain really great people. You need to think about what does our talent profile look like? Like what is a perfect fit for my business actually look like? Have I thought about this? Where do these people hang out? What about us appeals to that type of person?

How do we reach them? What is the narrative? Why should they come to us and not the other guys, et cetera? It's a really important part of this that a lot of people overlook is to think of marketing in two ways. One, to get business in the door. Two, to get talent in the door and then to keep it. The next part is have a process. So we ended up with a process, I think it was about eight steps for our, let's say hiring processes. It started with how we identified a talent need. So just literally like,

What is the process for saying, hey, we need to hire somebody. It then went to a very simple kind of checklist or process that said, these are the conditions under which we will trigger a hire. So usually it was kind of a combination of how much cash runway have we got? What are we projecting in terms of, um, work? So like, do we have work lined up for the next three months, six months, et cetera? Or do we have people on the bench? Um, and there were a bunch of very, very simple things. This should be very easy, but it helps you to de-emotionalize the whole thing to go.

Hey, when we meet a really great candidate, you know, do we just pull the trigger and hire them? Because they're that good. Or do we run them through a process? When we land a new project, do we just go and hire people willy nilly, or do we run them through a process? That's an important part of this early stage of the process to just have a clear like set of criteria that we have to meet before we just go and pull the trigger on a hire. Every now and then we would break that rule. Sure. Sometimes we would meet someone that was just that good.

Mike (13:27.618)
that we would say, hey, we actually gonna take a bit more of a risk on this person because we need them in the business and we back ourselves to go and follow the work. But that shouldn't be the case for every single hire. So we have a process, it's about eight steps. As I said, it starts with just like, how do we identify talent? And ended pretty obviously with an offer being accepted. Those steps in between there will differ for every business.

There are things like technical interviews, very high level first interview, then there's a full team interview, then there's the team that they're gonna be working with interview, there's the CEO interview, there's a whole bunch of these steps, but it's really important to just identify the steps in the process, why you're doing them, and that it's a repeatable process so that everybody that's coming into the business or that's being interviewed goes through the same process. It's also a really good.

way to reduce the amount of time and overhead because in the early steps, you probably just want to be having something like, you know, one person who's very good at assessment gives a candidate a call. It's a 30 minute call and they can kind of triage, I guess, for lack of a better term, very, very quickly. It should be the same people doing the same steps. I've heard so many times that during this process, both in my own business and with other businesses that I've worked with, that the reason that a great hire chose to work with us

is because our hiring process was so rigorous and it's a little bit counterintuitive. So, even in an incredibly tough talent market, we had a very hardcore hiring process and quite often people would drop off out of the process. And although it hurts at the time, it's actually a bit of an indicator because we cared very deeply about quality and being intentional about stuff and doing stuff thoroughly. And if people dropped out of the process because they were like, oh, this is too arduous. I couldn't be bothered. I'm just gonna go with another job that's easier.

That's an indicator that there probably wouldn't be a great culture and values fit for our business. And many times I've actually heard during the process, people saying, geez, this has been a hell of a arduous process. It's a bit exhausting, but, but actually this is really good because if this is how you do your hiring, then I'm pretty sure this is how you're going to run your business and I want to be a part of that. So having a rigorous defined and well-run process is in and of itself. Part of the interview process.

Mike (15:43.306)
Recently, a client that I work with was hiring a sort of GM type role for their business. Um, and they experienced the very same thing. They had a really strong candidate. The candidate had multiple options. And actually the candidate was really drawn to the company because of how extensive the interview process was. This was a small company. It was like less than 20 people. And this person had tons of different meetings that actually met every person in the business before they got hired. And in this particular case, something I really love is that the founder actually got his wife to interview this candidate, which I think is awesome. He trusts his wife's.

judge of character and he was like, hey, I know this is odd, but I actually really love for you to meet my wife. And I just love that. And the point here is you want to get as many people in your business as possible to be part of this hiring process. You're running an SMB, you don't have hundreds of staff. You can do this. And it's a really important thing that you do this. You want as many people that are going to be working with this person to have been part of the process. And there's two reasons for that. The one is that

You just want to get as many minds and gut checks in the room as possible to pick up things that you might not see. But the second thing is you're going to get buy-in if people in your business are part of the interview process and they're sitting there going, yeah, we were part of this. We asked questions. We had the ability to have our say. When you bring that person on board, especially if they're a very senior person, you're just going to have so much more buy-in. I've seen this done very poorly and I've seen this done very well. When it's done poorly.

people are like, what the hell, man? Where did this guy or girl come from? I didn't have a say in this. Like now they're my manager or my boss. Like this is not great. I would never have signed up for this had I had the choice. And when it's done really well, they're part of this process. They get to ask these questions during and before this person comes in so that when they join the business, A, there's rapport that's been built, but there's credibility there and it's much, much higher chance of succeeding.

Mike (17:41.43)
As Jim Collins says, fire fast, hire slowly. To be very clear, this does not mean that you should waste time and be slow in terms of hiring. It just means that you need to be very intentional, very thorough and follow a process. In fact, I don't think you should be slow at all. I think you should also hire fast, but really it's the phrase fire fast, hire slowly is be very intentional about who you hire.

how you hire, how you think about it, what the process is. In terms of fire fast, we won't talk about that too much in this episode, but in my experience, when you know, you know. And very rarely have I been wrong when I've had a gut feel about needing to get someone out of the business. And the same I've observed in many, many other people. When you know, you need to act on it really quickly, but we're not gonna talk about firing today. We're really only talking about hiring. So, you know, fire fast, hire slowly. Slowly there means...

Be deliberate, be intentional, be thorough, and be consistent. Have a process. Get as many people as you possibly can to interview, as I mentioned earlier. Good people want to work with good people. So don't let people find out who they're gonna work with when they are already hired. Let people be involved in the process. I can't stress this enough. It's also a good stress test on yourself. If you don't want people to be interviewing that person, why not?

What is your reversion to it? What is it telling you that you're not necessarily acknowledging or seeing? One of the points in the process, and I'm not even kidding about this, was the gut check. So a number of times in my business, and I've seen this happen numerous times in through observation, not in my own business, is everything on paper is going well. The candidate is great. Like

All the right questions are being answered, but there's just something that feels off. There's just a gut feel that this person is wrong. Every single time I have ignored this, it has been a huge mistake to have ignored it. It really has. And this became something that we literally had like in the process, like, what is your gut check on this person? And we had the discipline such that if somebody said,

Mike (19:53.986)
Hey, I can't tell you what it is. I just have, you know, my Spidey sensors are just telling me this is not a good idea. As difficult as it was, we would listen to that. So build this into your process to just say, cool, everything looks good. The questions are being answered. Seems like a nice person, et cetera, et cetera. Literally ask the question to yourself and to your team members. Hey, is there a gut check problem here? Does anybody have weird, you know, weird feelings about Spidey sensors or anything here?

Do we need to just address anything like this? As I said, every time I've ignored this, I have paid very dearly for this. It is difficult to undo a hire. And we all know this. So before we pull the trigger and make an offer and bring someone on board, we need to really think about, do we want this person on board? There's a great, there's actually a book written by Derek Sivers called Hell Yeah or No, I think. And we had a policy here as well, is that when we hire somebody, it was a hell yeah or it was a no.

Another way to think about this, I can't remember where I read this. I think it was in the hard thing about hard things. But another way to think about this in hiring is hire for strength, not for lack of weakness. So if you can't articulate what strength this person brings to your business, it's probably not going to be a great hire. If you're hiring because you're like, yeah, everything seems fine. Doesn't seem like there's any problems. You know, in other words, a lack of weakness, that's usually not going to end very well. So hire for strength, not for a lack of weakness. Okay. So

The next thing that I want to talk about is the values portion. Now, I'll probably do a whole episode on values. In fact, I will, I'm sure. Because there's a lot to speak about on values. But if we think about values as the behaviors that we need everybody to agree to in order to work in this business, right? Everybody starting with the founder, by the way, this has to be modeled by you as the founder. If you're serious about these, which I certainly believe.

very strongly, you need to be serious about values. Then you need to build them into your interview process. And what I mean by build them into your interview process is not to just tell them what your values are, right? But to actually build them into your process to say, hey, these are our values, they're very well articulated. They're not just words on a wall. These are what they are, this is what they mean. The stuff should be written down. It should be visible everywhere. And then you need to say to these people like, hey, are you happy to sign up to these? Are you happy to kind of...

Mike (22:20.514)
Put your name behind these if you work in this business. And if they say, yes, that's great. But then you really need to ask them like, hey, tell me about a time when, and that needs to be how you sort of test for these values. So if I think about one of our values, it was continuous improvement as a way of life. We would say things like, hey, so these are our values. Tell me about a time that you really displayed or were impressed by somebody for this value, continuous improvement as a way of life. Another one of ours would be take ownership. Tell me about a time where you really took ownership.

of something that was difficult, et cetera, et cetera. So get into a conversation, allow people to just kind of talk to you about how they have demonstrated these behaviors that you have determined are so critically important in your business. These really can be the difference between failure and success. In my experience, when you have spent the time discovering your values with your team, really getting them wordsmithed very nicely so that they are easy to understand.

Really spending the time to have a paragraph or two explaining what the values mean in the day to day. How do we actually use these as behaviors in the business? Bringing them into your hiring process can really be pretty powerful. To share a quick story with you, I had a, now someone who's actually a good friend of mine, he used to work for me at Nona. We've since become good friends. He asked me for a recommendation. I always have a standard response to.

anyone who asked me for a recommendation, as I say to them, cool, you write it first and then I will edit it. It's a very good sort of discipline and people, A, doing some self-reflection and B, sort of, you know, putting them a little bit out of their comfort zone, which I always think is useful. And he wrote this really, really good recommendation of himself in my words, which I then edited and then I gave him a recommendation. And what he did was he basically

He spent a long time and he was very thorough as he normally is, but he, he literally wrote the recommendation in the context of the values. So this is not like two years after the fact, um, he wants a recommendation and he's literally gone cool. So working with Mike at Nona, the way I'm going, the way I want to sort of go about this is I want to, I want to sort of assess my value based on the business's values. I mean, that is absolutely awesome that that's still ingrained in his mind. And it shows how powerful this can be. He is a very, very high value contributor.

Mike (24:40.314)
And I love it because he indexed around these values, right? Which is really, really useful. So you want to be building these values into your interview process. So assuming that all of the stuff goes well and you're now sending out an offer and your offer gets accepted, a really crucial part, especially for very senior people in businesses that I very rarely see this being done, and I certainly don't see it being done well very often, is getting very clear on the first 90 days of this person's job.

So depending on where you are in the world, you're gonna have some form of probationary period, and this should be used to everybody's advantage, not just yours from a risk perspective, but one of the most important things if you want people to be motivated, engaged, et cetera, is for them to have serious clarity on where the business is going, what the expectation is of them and how they will be measured. Like how will we know somebody's doing well? And this is not always easy. So,

you have an amazing opportunity right up front to think about things in a 30, 60 and 90 day world. So to get clear before the person even starts, hey, in the first 30 days, these are our expectations of you and this is how you will be measured. How does that feel? Are you happy to sign up for this? Are we aligned on this? Same thing for 60 days. By day 60, this is what the expectation is. This is how you will be measured.

And lastly, by day 90, by day 90, this is what the expectation is, and this is how you will be measured. This is quite a difficult thing to do very often, but it's an incredibly valuable thing to do because this should actually be done for everybody all the time, ongoing, right? Not necessarily in 30, 60, 90 day windows, but very often we actually can't articulate exactly what's expected of everybody. And therefore, it's really hard to create measurables, KPIs, whatever you wanna call them.

on their performance, which therefore gives people, it's difficult for them to be deeply bought in and motivated because there is a lack of clarity. And we know this now in so many people's work. You know, the first one that comes to mind is Greg McEwen's work with the essential intent is that when we don't have clarity, when we have confusion, we begin to make up our own games that we can win. And usually what this comes in, it comes in the form of

Mike (27:02.562)
politicking and trying to get our managers attention and trying to look good rather than actually do great work. So if you can build in the discipline right at the beginning, before somebody even starts to go, these are the expectations, this is how you're gonna be measured in a 30, 60, 90 day world, there is a massive chance that you're setting up for high levels of accountability. You're forcing yourself to actually get clear on what are the things that really matter. And this is an exercise that can really be a phenomenally powerful thing. So.

I think that's it for this first part of the episode. This certainly was not exhaustive. The idea here really, hopefully, if it's not clear, just to sort of recap, is that we need to not just wing this stuff. We need to be deliberate, we need to be intentional, we need to have a process, and that's gonna give us the best chance of attracting really good people. Also gonna give us the best chance of not making bad hires.

It's also going to give us a much better chance of having this person integrate better into your business with your existing team members, because you've involved them in the process throughout the process, and it's going to help you to actually get clearer and clearer on what are the roles you want in the business? What type of people do you want in the business? What are the expectations of those people? And that's a massively important part of business, right? Because as I said in the beginning, most businesses, in fact, every business I've ever come across.

is just people doing stuff with and for other people. So we need to be more intentional, deliberate and put more execution power into the people aspects from before they join our business. The next episode that I'm gonna do will be part two of this. This sort of small series is called getting and keeping the best people. Obviously today was all about getting the best people. And then part two is going to be keeping the best people. So more about like, okay, now that they've joined and are in the business, what are the things that really

help us to create amazing environments for people to get their best work done and to want to stay in our business, even if we can't necessarily pay them as much as, I don't know, the incumbents, the banks, the big guys, whatever. I hope this was valuable. And as always, reach out if you wanna talk about working together. Ciao.