Episode Transcript
[00:00:00] Speaker A: Welcome to the Independence by Design podcast where we discuss what it means to be a business owner and ways to get unstuck from the day to day so we can design a business that gives us a life of independence.
Most of us are familiar and or use behavioral assessments, but the question is, can your leaders think and can they own outcomes? I have been on a mission to try and figure out tangible and quantifiable ways to answer that question.
And Cindy Grave is back on the show. She was on a few months ago talking about her unique way of thinking about leadership and leadership development. And we dive into some super fascinating assessments and tests that she has to challenge people's cognitive ability. And I think learning if people can think and understanding if people can think, own outcomes, create a problem, solve, is going to be more important than ever in the world of AI and the demographic cliff that we're running into and how important leadership is in order to actually hand off the baton of the machine that you've built out to someone that doesn't screw it all up. This is going to be an episode you're not going to want to miss. Cindy does some screen sharing, walking through some of the assessments that she is familiar with. And I know you're going to love it, so check it out on Spotify or YouTube if you want to watch the video. Otherwise, stay tuned. I know you're going to love this episode with Cindy. Cindy, so excited to have you back. You were so diligent. I think it was January 2nd. You're like, it's now new, the, the new year. You said, you said what's going.
[00:01:27] Speaker B: You said contact. You did? I did.
[00:01:29] Speaker A: Here we are. What I was talking about before we hit record was I will give us some context of what I know that my clients are very interested in learning more about for the leadership team, developing out their leadership team. You had some. As we were wrapping up the last podcast, which I'll put the link to the that podcast in the show notes so people can go back and check that out if they hadn't so far. I was started getting super intrigued about some of those cognitive tests that you were using to actually quantify if people were thinkers or not. But before I jump in and do my like probably five minute tee up that I want you to help us unpack some of those thoughts. Why don't you just give the listeners, if they haven't caught that previous episode, a little bit about just kind of give us the cliff note back backdrop.
[00:02:15] Speaker B: So the Metis group, we're behavior experts at work we're all about people processes in the workplace. How do you make sure you get superstars in the right people in the right seats and extraordinary performance out of them? That's really what it comes down to. Now, if you've hired superstars and you're not getting superstar performance, it might have something to do with the person in the mirror, because we all work differently under different leadership. And so a lot of the accelerating performance comes down to helping leaders understand how to get that more out of their direct reports.
March 5th will be 30 years in business.
[00:02:50] Speaker A: Congrats.
[00:02:50] Speaker B: That's awesome. Thanks. I am a recovering HR person, so some of this stuff now, not the compliance part, don't hit delete.
[00:02:59] Speaker A: Oh, we're gonna be talking about open enrollments.
[00:03:05] Speaker B: So, no, this is all about the quality of the talent, the culture, not just a warm fuzzy. Do we have a nice culture? But do we have the culture we need to achieve the results we're looking for? And how do we get that consistent consistently without making us or our director boards crazy? Obviously, I've been a business owner. I lead other people. So I. These practices have to be one that an entrepreneur has the patience to put into place. And we got to keep it simple. Because even if you're not an entrepreneur, you probably didn't go to school to become a leader. You probably went to become an architect or an accountant or whatever.
And then all of a sudden you did so well as an individual contributor, they threw you into a leadership role. And you're trying to figure that out. So this really is the. It's kind of an MBA in. In leadership without having to go through all of the useless classes.
[00:04:01] Speaker A: Well, and what I found useful about our previous conversation and shout out to Bill DeBoer from. He is one of my clients and he is the one that saw you in his visage group. You and I had a couple conversations and in the last podcast is you've. You've created a lot of tangible tools to help with. I think this thing that has become very fuzzy. Another shout out. Jeff west was a guy that was on my podcast. We titled it Redefining Leadership and he's got it. Lee Thayer is a big proponent. He's a big proponent of Lee Thayer. But what I'm trying to do, Cindy, is I'm trying to get out of the fuzziness into the tangible. How do we actually grow our leadership team? Because for the ownership operating system, if someone's really going to extract themselves from the operations to give themselves a lot of choices, we have outcome based Leadership team members who are owning outcomes, who also have the morals and values and the culture fit, but also like the intrinsic motivation, can use their brain to think about outcomes and problem solve. And I, I saw glimpses of that in our conversations before. Like, you have quantifiable tools to help us through this. That's why I'm excited to, to jump back on.
[00:05:13] Speaker B: Yes, great. And yeah, we do have quantifiable tools again, because when I was in my previous life as an HR person and I would have leaders come to me out of frustration, I can't hire the right person, or God, I thought I hired the right person. But I'll be darned if they can find anything with both hands. Right. And so they get very frustrated and I would need to give them something, a process, simple process they could follow, go from step one to step two to step three so that they could remember that from the time they left my office and went back to theirs. Right.
[00:05:45] Speaker A: You can like reverse engineer. You've got like an actual tangible thing that everybody can use to communicate.
[00:05:50] Speaker B: Right, right. And it also helps all of the individual contributors because if you were working in this department, you got transferred over there and this person's using a completely different process.
It could take you months to understand how this particular leader works. Right. So the more consistency you can have, the easier it is for cross collaborative teams to work together, for new people to come on board, because everybody else can say, oh, this is going to happen next. Right.
[00:06:17] Speaker A: And so, and I do highly recommend people go and check out the previous conversation that you and I had, because I'm going to take some assumptions that people either watched it or can go back and watch it. You and I did some screen sharing. We walked through your employee scorecard and I came. Is that what it's called?
[00:06:32] Speaker B: The job scorecard?
[00:06:33] Speaker A: Job scorecard. Unbelievable. How to quantify, like the buckets of things that people have to do, how much time they spend in each of those buckets and then what the outcomes are. I mean, unbelievable way of like taking it from fuzzy to quantifiable. I'm gonna. So what I'm gonna do, Cindy, is I'm gonna screen share.
Because what I would like to do is get your reactions to how I am thinking about the leadership team, some of the challenges that my clients are going through, and kind of how I frame up how I think about business and in the leadership dynamic and problem. Because I think what I'm excited to unpack with you is how do we actually nurture the internal people to own Outcomes when they might not have been described the vision before.
You know, I think there. I think that the shortage of talent, Cindy, we're going to have to figure out how to nurture our internal people and we have to figure out how to recruit the external people. Because the thesis that me and my clients have is given the demographic cliff that we were all in, if we don't do this, it's a very big problem. And every five boomers that are retiring, there's essentially one person to back them up from the people that I've been talking to. And I think the problem is going to accelerate. So talent, nurturing, development and recruiting, I think is the name of the game. And if someone really wants to step back, we have to have people that can think, problem solve, develop, and we can't just hope.
So that's kind of the big, big idea.
[00:08:07] Speaker B: Now, the one thing that I will challenge everybody to think about. I agree. I have been saying for a long time that we have not been producing enough humans in general for decades.
[00:08:19] Speaker A: So yeah, here we are 30 years later that we can't go back and create 30 year olds or we can't. We can't manufacture 30 year olds right now.
[00:08:25] Speaker B: Exactly. So the fact that AI can replace 30 some of the easy jobs is going to save us because we don't have enough of them. However, as much as I hear people whining about fill in the blank on the generation. Right, because most people don't realize this, but the generation that preceded me complained about our generation too. Every generation complains about the.
And you heard about the best thing that happened to millennials.
[00:08:52] Speaker A: Gen Z.
[00:08:53] Speaker B: Yes, exactly.
[00:08:54] Speaker A: I hadn't heard that, but I just took a guess.
[00:08:56] Speaker B: Yeah, that makes sense.
But what I ask people to remember is, and Ryan, you have more than one child, Right.
Can you parent them the exact same way?
[00:09:08] Speaker A: No.
[00:09:08] Speaker B: They're twins, right?
[00:09:10] Speaker A: Yeah. So it's even double down on your bottom. Your point? Yeah.
[00:09:14] Speaker B: But clearly they're the same generation because they're your kids and you can't parent two kids the same way. So what makes us think we can lead an entire generation of one workers the exact same way? This is not generational. For the most part, it is maturational.
So there are some things that people can mature and get better in. The other thing is we can't generalize to a whole generation. And when I'm in those vistage groups, I will often ask people, raise your hand if you regularly go to your class reunions, and maybe one or two will raise their Hand. And I'll ask the rest of you who do not go, why?
And they're sheepishly trying not to answer. And eventually somebody comes out and says, who cares what those people are doing? They're doing the same thing they were doing when I was in school with them. We're not in the same league. I got nothing in common with these people. Exactly. You're in those vistage seats because you were the cream of the crop.
We have to find this generation's cream of the crop and lift them up. Those are the folks that have to be elevated. You're not going to elevate everybody from that generation. You can't from any generation.
[00:10:27] Speaker A: I like it a lot. And what I think is fascinating is, let me throw, because I do have a couple of slides that I want to show you. But before I do, this is helpful context that the listeners are going to get is when I'm working with my clients, I have watched their ability to then what I call the ownership red pill. Like the red pill in the matrix. Like they like, oh, like I now have a clear plan that I can articulate to everybody what I want to do with this business. Not like 30 million like that, like. No, I'm talking about like an articulated view of over the next five years. Here's what we want the business to be. They understand how it's going to impact their goals.
So there's so much responsibility I want to put on the owner operator where you have to do that. Because a private equity firm, it's like we need to 3 to 5x our money in the next 3 to 5 years so we can get back to the pension fund and everybody. Whether you like it or not, it's a clear mandate. So once we get that clear goal, it now has a, A, A, a plan that can encapsulate the rest of the operations and the people. So if we assume for a second that there is someone coming at this problem with some sort of that clear vision, not just a vto, but like a clear ownership vision, then when I, you know, I'm going to screen share and people listening in, I will talk through this. So you have an idea of what I'm saying here.
So this, this graphic Cindy, I've been showing to people for quite some time and there is some dysfunction that I see with eos. So this visionary integrator, I personally hate it because I don't know what it means. Like private equity firms, they buy a company and other people run it and then they have to deliver the rate of Return. So I like the way I think about business is through objectivity. And so when I'm looking here, everybody I've got in a kind of a high level org chart. So over here, Cindy, is the board.
The board and the ownership structure of the shareholders dictate the cash flow and valuation return in a timeline.
The people that are ownership operators just generally haven't put those constraints in. Private equity firms have a clear mandate. VCs are different public companies. So like the flavor of capitalism is wrapped around from the board, but they're going to dictate the timeline, the growth and the constraints. Then what we do is we have that board that then is giving the CEO the mandate. The CEO is responsible for delivering all of operations to the board.
So like the, like the, the CEO says, okay, here's your cash flow, here's your valuation, and in what timeline. And then the CEO manages the three functions, which is revenue, margins and cash.
So that are. Those three functions are the three buckets of the income statement.
So we have three KPIs revenue, we have gross profit, which is the dollar amount and margins, the percentage and then cash flow. So CRO, COO and CFO.
I had my buddy Nick Bradley, who has done $5 billion worth of private equity deals on the podcast last week. This is what they do. Like this is the playbook and it's objective. I mean even if it's an esop, the board, which I've sat on, the board of, an esop, the board is responsible for making sure that there's cash flow, valuation. So here's where I'm going to propose this challenge, actually maybe before I jump in that this is the scorecard, Cindy. So just to walk through like time, cash flow and wealth is the owner's goals year one through year five. And then we double click on this valuation and that leads to this market valuation target. So it's years one through five and we want to watch the revenue normalize, ebitda, the multiple and the valuation grow just like, just like if you were a beaver. So here's what I see as a massive challenge and I think you, before we hit record, are going to be able to fill in some gaps for us.
I've got clients that span between 8 million and 190 million. So it's a big, big wide range. The infrastructure can dictate whether this is possible to get right off the bat. So here's this dynamic that I've been wrestling with is a CRO. If we wanted to label that acro, you know, they might be 250, 300 grand base pay. A COO that is truly a COO that is like off the shelf. All of these three might be a quarter million dollars base pay plus annual comp, plus maybe phantom stock. And then the CEO is maybe half a million bucks. So you're talking like a million plus in payroll for the people that are out of the box for these things.
That becomes a challenge and or it is not appropriate for a lot of companies as they're growing.
What does not change is every company has an income statement that has revenue, gross margins and normalized ebitda. And there are three outcomes. We need revenue, gross profit, and normalize ebitda. And that income statement will generate cash flow or not.
And it will either be tied to evaluation to the ownership goals or not. So this becomes, whether you're a lemonade stand or Amazon or Apple, this is how it's structured. The challenge is, and I'm just quit sharing now, is how do we grow into this?
When like, we know that we can start to flip this around for the people to say we have outcomes that we want to help people strive for, but we can't. You know, we might have a controller who's 110 or 120 grand and only knows how to do controller work, or a director of sales or maybe, you know, an ops manager that does. So like, we want to like elevate these people in and grow with us over the next five years and, or figure out like, when do we bring in outside people. But like, it's this whole like leadership roadmap, Cindy, that we are really struggling with trying to figure out how do we hire into this, how do we elevate people?
So that's a lot. And I appreciate you letting me put the context here, but it's a challenge that we're all struggling with.
[00:16:43] Speaker B: Yes.
So I understand the challenges. I understand where you're going. And I don't want to sound like a broken record, but this is going to go back to the job scorecard. Okay?
Part of it is for your $190 million company, those C suite roles make all the sense in the world for a $9 million company, if you ask to fill a C suite role, they are going to expect a quarter of a million dollars in compensation.
But out of that $9 million in revenue, they may have 600,000 in profit. So there's only so much, Right?
[00:17:23] Speaker A: Well, that's why the infrastructure can't afford these people. But that's where I was saying the
[00:17:27] Speaker B: Outcome
[00:17:29] Speaker A: manage which is becomes the challenge and you start going down the fractional route. And fractional people are just, you're usually paying this market rate for a fractional person, but they don't actually know how to do this stuff. And so yeah, it's so the challenge
[00:17:43] Speaker B: with the fractional roles in my humble opinion and in my experience, which I admit is limited on fractional roles. And usually they are fractional people that we'll even introduce to some of our clients when they need a transitional band aid until a full time person can be inserted.
So one of the challenges is they take on fractional because they would like to help multiple organizations at the same time, maybe three or four.
Which means they can only possibly be working at the very strategic level.
But at that 9 million dollar company with $600,000 worth of profit, you need to do both. You need to be doing the strategic, you need to be doing the tactical and tying the two together.
And those fractional folks first of all don't want anything to do with the tactical and they don't have time for it.
[00:18:44] Speaker A: So yeah it's. And let me, let me continue on that because I like how you frame that and my experience is similar.
What I see. I'll start with what I've seen work and what I've seen not work. So like my, my old business partner and my current collaborator Pat Hobby is a fractional cfo. He's a freaking. He's the, he's the best. He will integrate in. He works call it 10 hours a week. He manages the controller, the bank relationship, the accounting firm. Because he's managing that function for the outcomes.
[00:19:17] Speaker B: Yeah.
[00:19:18] Speaker A: And then he is then delegating down and it works because they're.
[00:19:22] Speaker B: If we don't have who he can delegate. He's not posting debits and credits 100%
[00:19:28] Speaker A: and, and the in what works is because he knows what good looks like. So he can get more effective use from those people. I've seen fractional marketing or sales or you know, fractional integrators and major quotes and like the, the cost structure ends up being, you know, and by the way, Pat's by himself. There's no, there's no large infrastructure to charge. But like if you go to another firm they're doubling an hourly rate of someone that might be a controller pitching them as a CFO or same thing on all those different levels. Where what happens is, is if the.
My experience is it can be very effective with what you said if the person actually owns the outcome and treats it as if it's their full time job. It's just the size doesn't dictate all of that. But the problem is then like finding that person to work with for like one or two years is almost impossible because it's just a bunch of firms that are collecting fees that don't risk, that don't have that outcome that they're tied to.
[00:20:27] Speaker B: Right, right.
So where do you want to start on this?
[00:20:33] Speaker A: Well, the channel I think the challenge that I'm seeing as like we, we, we have to come up with a plan to not only assess can someone own that outcome or get elevated, how do we determine whether someone's capable of thinking? The cognitive ability. Because like I think that the challenge is a lot of these executives that I've worked with, Cindy, they've never been taught how the actual role works.
[00:20:59] Speaker B: Right. The best minted MBA has rarely if ever taken a leadership class.
And mo like most, like I said, most of us went to school for something way other than leadership. Right. So we wound up being extraordinary in whatever discipline we were in and had to figure out the leadership stuff on the fly. So let me.
[00:21:22] Speaker A: And sorry to interrupt it and what an actual COO or CRO or CFO actually does because they've never seen the whole business tied together and because I mean I was on a, I'm on a board where there's three MBAs and like they know how to do multiple choice.
But like, yeah, but I struggled them thinking which is why I was so interested in that last test that you'd shown in the last one. So it's the leadership stuff and also the holistic business stuff. And I, I hope that if we can teach them how we think about a business from the operational side, then we can isolate their cognitive and leadership abilities to then like should we invest in this person?
[00:22:04] Speaker B: Right.
One of the big questions first we have to define what needs to get done out of the job and then what are the skills we need to do that job? Hard skills, soft skills, I don't care what they call the role. I can't tell you how many times now we are operating system agnostic, but because Gino Wickman has done so such a phenomenal job marketing EOs.
We happen to work with a lot of organizations running on EOs.
That's more coincidental. But Gino and I knew each other since before we wrote Traction, so kind of grew up in business and didn't want our stuff stepping on each other. Right.
And there are other operating systems. Pinnacle, Execution Maximizer. There's several other ones that will either talk about a org structure like you had, or the visionary with the integrator and everybody reporting to the integrator to give that context, which I know makes you insane.
When Gino started that, he first loved, he says, I love herding cats.
That's his favorite thing to do. So when he found an entrepreneur who had eight or 20 people and they started the business because they had this brilliant idea, whatever that idea was, or a new recipe for a microbrew or whatever, they wanted to stay in that lane and keep inventing.
And then they realized, I gotta do payroll, I gotta do invoicing, I gotta do all this. And when I'm in that mind space, I'm not inventing anything. Right. So his goal was, you stay inventing and let somebody else do all of that running of your business. And you just have to supervise the one person. So it's almost like there's co CEO, there's the one that you have who has those three direct reports, sometimes a fourth, a chro.
And then. Or the one who has like. They realize they're a savant, they have brilliance in one area and you can't grow a business that way. And they need yin to the yang Yang. Okay. So that's really. When you put it in the context. There are a lot of organizations who have tried to extrapolate EOs to much larger businesses, which can be done, but it becomes much clunkier when you have a real board and they expect a real executive team. But you can run those divisions. Like the head of one division might be the equivalent of an integrator and so on.
[00:24:39] Speaker A: Yeah, and. And I follow that too. And. And I think there is a time and place for all these different systems. And I am also agnostic to all this stuff. And I actually have in module or milestone 18 where an business operating system should be implemented. When I look at that structure that I showed you is like what I like about like. So Nick Bradley, the private equity guy last week said, there, there's people in numbers. It's like ding and yang.
And we have to talk about the people just as much as we talk about the numbers. But we can't talk about one more than the other because at the end of the day, we have a revenue bucket, a gross margin bucket, and then a net income bucket. And that either kicks out cash flow for the ownership group or not. And so the outcome becomes a leveraged way as the owner is moving towards delegation, doing it through what actually is reality in the income Statement becomes a good way of thinking about where every single month revenue needs to hit on the income statement by product and service line.
Otherwise someone's failing. Same thing with margins for the cost of goods and same thing with overhead. So then when I think about framing it up like that, we can elevate people if you scrap all these titles and all that stuff. So we still need, regardless of your $8 million or 180, you still need someone to manage revenue. And if you have more than one person, there's your source of conflict.
[00:26:01] Speaker B: Correct. Because if everybody owns it, nobody owns it.
[00:26:05] Speaker A: Right. And so that when I think about what I am hoping like as for my clients is like we once the job and I think you and I could do some work as you come into my group. Like we maybe unpack the job scorecard for each of those top level where it's like whatever we want to call that, that title. This is the outcome that each of those functions need to hold. How do we then figure out how to assess the current people in the organization as we reshuffle people around and as we grow over the next five years?
How do we, you know, get these people to elevate as they're continuing to swim forward with us and then we, you know, backfill other people or we have to figure out how to slide someone in up top. That becomes the question that is not very obvious to most of the people I work with.
[00:26:57] Speaker B: Right. So let me. Can I. Do you mind if I screenshot?
[00:27:01] Speaker A: Absolutely. Let me get permissions here.
Child lock on.
[00:27:08] Speaker B: Sometimes they need that all right here.
So in our website, if I can get these things to go away, just to cut to the chase, I'm going to go to the hiring process coach, which is what I think we used on the last.
And I'm going to go to C process and just I'm going to make this real quick to get to the job scorecard I want, which is it starts as a job scorecard over here on the far left. By the time it gets over to the far right, it becomes what we call the performance acceleration tracker. So it includes everything. So I'm going to click on this and let me try to make this a little bigger.
So it says it's a sample executive assistant, but this can be done for any job. So let me tell you the reason I give you the background on being operating system agnostic is sometimes we will get a call from somebody saying, oh man, everybody in my forum group's telling me I got to get an integrator this is it, man. I got to have one. This is going to be awesome. We walk them through our whole process. They're like, yes, yes. Okay, so long story short, it takes two of us, two two hour sessions, so a total of three or four hours to knock out one of these job scorecards.
And we start with a laundry list of all the stuff you need done out of that role.
In no particular order. In fact, the first things that they spit out of their mouths are often the most important, even if they seem the most minuscule. The reason neurologically those things came out first is either because it's missing or because it's getting done right now. And there's a terror around the idea of losing it. So there's an importance that comes with the things that are carried out first. So once we go through what are all the tasks and activities we need done, then the two of us facilitating it take a short break and we take those activities and we break them into the three to five buckets you see on the left hand side. Never more than five. The average brain can't remember more than five things at any given time.
We lead them through some exercises then that go through what are the priorities and percentage of time. There's no correlation between the two. Sometimes the smallest thing you do is the most important, but if it's not done well, it throws everything else off. So think about that sales role.
If you aren't spending 10% of your time putting a sales plan together, then your salespeople look like they're in a human pinball machine running all over the place. Right. So it might be the number one priority. Smallest amount of time is putting the strategic sales plan together. But then that gives us the roadmap.
[00:29:47] Speaker A: Yep.
[00:29:48] Speaker B: And then we go through success back. Go ahead.
[00:29:50] Speaker A: By the way, I was gonna say that I think that correlates with if a fractional person's in there, maybe a fractional person is playing the 10 to 15% of the strategic time, which allows us to then build out the. And that's where there's probably a very tangible way we could actually unpack this for people. Because that's where, like I've tried to say, like, if we just fire a hire. Not fire. If we hire a controller at that dollar amount, they can actually do all of that stuff. But it allows us to hire the right person because we're taking that 15% out, which becomes unbelievably important that we have to have. But then we can assign it to someone else.
[00:30:26] Speaker B: Right. And then we go through the success factors.
This is the minimum threshold to keep your job.
It is not the holiday wish list. This is what it takes to earn your salary.
So that means. And when we are going through this review, once a quarter, this should, for the most part, all be green.
Every. This is a lot of yellows with a couple of reds. Unless this is a brand new employee, I would say this person's job may be at risk.
Okay. Because there's a lot of yellows and a lot of reds. If they're brand new, it could say, oh, this person might need some training in this category. Right. Or a little bit more.
Whatever there. Or finding out like it's. It's a collaborative document at this point, not a top down review. It's a.
So we're off track on projects were met on time and so what. Let's unpack what happened, what could have gone differently.
[00:31:24] Speaker A: I'm transparent to both people.
[00:31:26] Speaker B: Right. I might find out as a leader, I need to remove more obstacles or deploy more resources until we unpack it. Or this person just was like, well, I didn't take the deadline seriously. Right. I just thought it'd be nice if it were done then. Right. So.
So it gives you an opportunity to figure that stuff out. So when we. I distinctly remember this one guy was all fired up. He had to have an integrator. We went through this, created this with him, and he needed an executive assistant.
[00:31:56] Speaker A: I bet you that happens way more than most people would think.
[00:32:00] Speaker B: I tell people, I don't care what title you give us one to start with, the odds are 40% of the time we'll wind up with a different title at the end.
[00:32:10] Speaker A: Interesting. Yeah, I believe it.
[00:32:11] Speaker B: Now we're looking at the work that needs to be done.
Given your CFO role.
Most people really don't understand the cfo.
They think it's a glorified controller, which it's not. Right. So a controller is looking backwards a lot.
The CFO is helping you look around corners, predict things in the future, helping you make strategic plans about what to do based on what's happened historically.
[00:32:39] Speaker A: You know what we should do, Cindy? I have a podcast and a crazy amount of material about what a good CFO does.
Pat and I have done like probably a half a dozen podcasts. I've got like probably 15 videos and I'm building out the financial module, my training based on his gold standard. And then I have one with Kim Clark for the chief Revenue officer. I bet you we could cram and we got a bunch of material that she has for her module and her videos and training. We could probably create job scorecards for both of those different outcomes or figuring out a way to.
[00:33:17] Speaker B: You could get close. I will tell you for as long as we've been doing this there are. There have never been two jobs that have been the same.
So it really needs to be done for the job in the culture of that organization.
[00:33:33] Speaker A: I can see that.
The way that I'm coming at this is like when I look at the functions of a business revenue being driven based on a user journey that has conversion rates that has to land on the income statement in a client acquisition cost has to be done. That is a objective fact of going
[00:33:56] Speaker B: to be a subset of stuff that has to be included.
[00:33:59] Speaker A: Well and it's more like the rules of the game. Yeah, like. Like that is like that Let me put it this way is I believe that to be a source truth regardless of whether it's like it's not my opinion like income has to land on the income statement every month within a specific client acquisition cost no matter what. So someone owning that whole user journey womb to tomb will when I say someone let me go back to then the cfo. There's a certain things of budgeting and then making sure that they're reporting and viewing the financials and there's a lot of stuff inside of that. My point is is if we started the base case that says this is how business, the game of business is played now. Like whether it's that 8 million dollar, the 180 million dollars. Now you then start using the standard to then deviate.
[00:34:51] Speaker B: Yeah some of those success factors too.
But in the beginning it may be a very tactical role.
So here's. Here's part of the challenge. Now this is not a leadership.
[00:35:06] Speaker A: That's an executive. But I get the concept.
[00:35:08] Speaker B: So when someone is leading others of the five categories, there's always going to be a team category. This is the stuff you do to wear the team colors that the activities may transcend all the other categories or they may be the things you just have to do because that you're part of the team. So as an example, living the core values of that organization is typically going to go in the team category.
Being a company ambassador maybe this group in particular is big on community outreach. That kind of stuff gets put into the team bucket because you got to know that's what you're getting in for.
When it's a leadership role there is always going to be an oversight category and a talent management category. Think of breaking it up by the behaviors or the brain space that's needed in that category. So if I am overseeing the tasks of others, I'm measuring to are the things being delivered on time and on budget, are we meeting our key metrics, et cetera. The work that I'm doing there in overseeing those activities doesn't change no matter who's in the roles of the people reporting me.
But in the talent management where I'm mentoring people, I'm coaching them, I'm helping them put a development plan together that's going to be unique to each person in my group and my leadership practices are going to change. If I have a bunch of young pups, if I have a bunch of senior people or a mix or whatever that's going to be. And those two categories require very different skills when they are mushed together into one category.
And you have somebody that excels in one, but not the other. I'm really good at holding people accountable, but I don't have time for that people crap.
They focus on with a, you know, whipping a chair, getting them to deliver on those metrics. But they have enormous turnover. Right. Or if they're really good at nurturing people but I'm not comfortable holding them accountable. Right. That's going to be a problem too. So measuring them as separate categories makes a big difference.
[00:37:21] Speaker A: I like that.
[00:37:22] Speaker B: Sometimes there's what we call a do it bucket.
So you could have a CFO whose do it bucket is board interface on all the financials. So they're putting all the quarterly reports together. You know, like the stuff they do to prepare and deliver to the board. Right.
That could be theirs. You could have a different CFO at the $10 million size company who was doing some of the higher level analyses that the controller really can't do at that level.
Okay, so now when you have these things laid out and you have, let's say you are at the $10 million mark and you've created a job scorecard for the sales executive, just the salesperson and the. And you have now you have two or three salespeople. And so now it's time for a sales leader.
You would create this for what the sales leaders job scorecard would look like.
There's another session that takes us about an hour and a half to lead the same group of people, the same stakeholders that helped us create the job scorecard to understand what success looks like, to take three assessments on behalf of the job, to say what would the ideal human look like to do this job in this culture?
Now we know if we're evaluating somebody from the outside and we can ask them the behavior based interview questions, we can give them the assessments, we can see if they have the capacity to do it. If I have somebody internally who's been a phenomenal salesperson and they want to be the next sales manager, you need to ask why? Because a lot of times people who say, I'm ready for the next, the next logical step in my career is a leadership role. This is code for I want to make more money and I don't know how else to do it besides taking on that leadership stuff.
Yeah, you're not hearing, I love bringing a bunch of superstars together and helping them realize like they can win the Stanley cup if they learn to play on the same team and play extraordinarily well, or to help people who didn't realize their potential. Right. That's a leader. That's a real leader. And oftentimes the people who were the best individual performers are not going to be the best leaders.
So you need kind of a different reward structure because you don't want to chase away your best individual contributors. But you need to be able to reward the leaders who can get, instead of giving 10% more themselves, can get 10% more out of each one of their direct reports. There's a value to that and that goes directly to the bottom line. Right?
So if you had, so you have this salesperson and you have a job scorecard for the sales manager role and they think they want to do it and you show them the job scorecard, now they know they're going to be held accountable to it because they've been held accountable to it in their current role.
So when you look at this next job, which categories do you feel already prepared for?
Which one do you have some questions about or do you think you're going to need the most support where you need support, what does that look like? Okay. Now if they're honest about some of that stuff and they say, I just never really done leadership before, I don't mind learning, but I don't know how we can give them the assessment to see if there's even some of the basic foundations that say, yeah, this person might have the job sport, and then we can decide what leadership program to give them to help strengthen that before we drop them into this role. The last thing you want to do is take a good individual contributor, drop them into a role in which they have no chance of being successful. But most of the time showing them the scorecard first is about all they need to go, oh, that's not what I thought the job was.
I thought I got this.
[00:41:32] Speaker A: Yeah, no, I'm loving everything you're saying. And the job scorecard becomes the gap assessment as well. Essentially saying, okay, here's what like. So back to one of my earlier questions is if we're building out a multi year leadership roadmap, let's say you do have a fractional firm that's in one of these areas because they're taking the 15 or 20% of the strategy part, then there should be a path to say when the controller can do this bucket or these two buckets, then you can actually become, you can go from director finance to the con, the, the cfo. So you're, you're then you and you're then using that as a, as a bridge.
[00:42:14] Speaker B: The other option you have same logic is if somebody is used to being the tactician and you want to slide them a little bit more. If it's a continuum from tactical to strategic and you want to them a little more towards the strategic, it is very difficult for them to let go of the tactical stuff to make time for the strategic.
[00:42:43] Speaker A: Oh my God, have I come across that before?
[00:42:47] Speaker B: Every time. And we've seen this a ton in hr. You know, I can't tell you how many times an HR person signs up because they think they're getting a seat at the strategic table. But oh, by the way, they have to do, to your point, open enrollments for healthcare, they have to do compensation, they have to do all the requirements recruiting, they have to do the compliance crap, they have to do the 401k stuff and they never have time to get to the good stuff and they know that other stuff is important and urgent must be done.
So in those circumstances and in your CFO role, look at the bucket that is the most tactical and maybe go to Robert Half or one of the other temp agencies that focus on the tactical stuff, which is less expensive by the way, outsource that.
Let this person you want to elevate manage the temp or couple attempts while they're now, now they don't have the excuse for getting sucked into that because if you can't figure out how to manage them while you're trying to do the strategic, it ain't gonna work when we give it to you full time.
[00:43:59] Speaker A: I love this, to use your words, now that I've got some concepts, maybe you can then help me figure out how we want to keep going with this is I believe that there's A strong argument. Most people should elevate their internal tactical people because there's a lot of tacticians. Is that the right word?
[00:44:20] Speaker B: Can I just make that up?
[00:44:22] Speaker A: Didn't sound right for a second. And getting them to think strategic. Elevating them because it's way easier to hire the tactical.
[00:44:31] Speaker B: Yes, yes.
[00:44:32] Speaker A: So that becomes the back filling and because it's more cost effective. Because like in, and I think the how many people get burned because they think that they're going to get the strategic from a fractional firm. But the problem is the person that hires the fractional firm doesn't actually know the outcome. They don't have a scorecard like you're talking about. They're hoping this magic bullet happens. You're paying 5 to 10% grand. Like, oh, I've still got no strategic. I've now just got more tactical stuff going on and no thinking. So I, I, I believe that the internal people, if we can find these people who know the business, know the culture, know the industry, and we can figure out a path to elevate their strategic thinking and backfill this. The tactical.
What is a way and resources and tools that we can do that.
[00:45:24] Speaker B: Yep. So there's, there are two pieces that require a lot of vulnerability and honesty.
One is how much patience does the supervisor of that person have?
And I'll explain why in a minute.
And the second is how much investment and initiative does the person in that role have in investing in their own development?
[00:45:57] Speaker A: How much will to invest initially? Okay.
[00:46:00] Speaker B: Yeah.
So, you know, if I hear one more person say, just tell me what you want me to do and I'll
[00:46:08] Speaker A: do it, I'll tell AI what to do and how to do it.
[00:46:12] Speaker B: Exactly.
If I have to do that, I don't need to. Right.
[00:46:16] Speaker A: Okay. Now we're getting to the root of what we're both trying to solve for. Yeah, exactly.
[00:46:20] Speaker B: Like, this is not a statistic thing. This is a Cindy opinion. If I am paying you $45,000 a year or more, I am paying you as a knowledge worker. That means I want you to use your brain.
Okay. Wow.
[00:46:33] Speaker A: You got a way smaller or smaller bar for the dollar amount than I do.
Well, because it's, I've seen it like, as a chronic issue all the way up the hierarchy of like, just tell me what to do. I'm like, the amount of money you're getting paid.
[00:46:49] Speaker B: Right.
[00:46:50] Speaker A: And I have to tell you which way to wipe is unbelievable.
[00:46:53] Speaker B: Right. So here's part of the problem. I think we talked about this in the last podcast, but it bears repeating.
The brain is like any other muscle, and if it's not used, it will atrophy.
[00:47:07] Speaker A: Is that why everybody's saying that everybody's getting dumber by using AI?
I think that was Robert. Well, that's some of the abc. Or someone's report was like, everybody's getting dumber. Like, okay.
[00:47:17] Speaker B: But when they got dumb was by Covid.
That was. That was a side effect.
No one saw it coming.
So here's what happened.
[00:47:28] Speaker A: Yeah, tell me more.
[00:47:29] Speaker B: We were all mandated to work from home.
So, okay, we all worked from home, and we didn't have a lot to do at the time because everything was changing. The laws we had in the morning, the laws changed by the afternoon.
So we were all thinking, what's now? What's next? What's now? What's next? That's all we got. Which is not strategic. That's very tactical.
Now, some of us who run businesses could only stay in that mode for a matter of weeks. And then we're thinking, all right, we gotta think of, like, next month. Let's pretend this behind it, like next month. And then we thought three months out and a year out and whatever. So we were stretching it. Everybody else who still work from home, I have a cousin who's probably one of the sharpest people I know, and she's an executive assistant to nine litigating attorneys in Manhattan. She is not an idiot, but she was working from home for two years.
[00:48:24] Speaker A: Good Lord.
[00:48:25] Speaker B: Right? So everybody who's working from home has a list.
And as soon as I can check off my list, I can take the dog for the walk, I can go shopping, I can golf, I can do whatever I want as soon as I get the stuff done off the list.
That list is tactical.
I have never heard anybody who's been working from home who looks at their list going, you know, these same three things keep coming up on my list.
Huh.
I wonder why. Let me spend some time trying to do root cause analysis.
Let me get with Ryan. We'll work together, we'll collaborate, happen, working from home, and we'll see if together we can. And then we're going to come up with a solution, see if we can pilot it, and see if we can get a couple of other people to put it together.
This does not happen.
So during COVID I don't care if you were home for six months, a year, two years, your brain has atrophied.
And unless you are actively working to stretch it out to think farther, you're just looking for the shortcuts. And we can show this.
I don't have a way of looking at what happened pre Covid and post Covid necessarily with the same people, but we have a way of measuring, not in the Watson glacier, but in the trimetrics, the other one, the extent to which you focus on understanding people, the big picture and the pieces that make up the big picture.
So it's like the strategy and all the pieces that make the strategy happen. And we know using common sense is a combination of the strategic and the practical being well developed and well balanced.
If they are not well balanced, I'll give you an example. We hired this fractional marketing guy. I finally said to my husband, you're going to have to deal with him because he's killing me.
So he kept saying, I'm all about the strategy. I'm not the technical guy. I'm all about the strategy. And he would come up with this, and it was like he would say one sentence and mic drop and walk. And I'm like, the hell are we supposed to do with that? Like, there's no roadmap to get from here to there. Like, I'm not saying I don't believe that, but I don't get marketing. Give me the roadmap. Right. There are other people who can see all the pieces, and they're the ones who are busy all the time without making forward progress.
And that's typically the people who attack their list by what are the things I can get done fastest or easiest, not which are the items on my list that are going to have the biggest impact.
So it is possible to help people understand this and work on this. But what it requires is, is their leader say, so the person comes in and goes, here's where we're supposed to be on this project and here's where we are.
Okay, so what do you think we should do next?
I don't know.
Give it a thought. Throw anything out.
Well, I guess we could do this.
Okay, why'd you think that was a good idea?
What other ideas did you throw out?
If we do that idea, what's the worst thing that could happen?
If we do that worst thing, what can we do to get it back on track?
The leader has to be very patient, asking tons of questions.
Most of us in an executive role do not have that much patience.
That's why I'm saying it requires both an individual who wants to invest in their learning and their development and a leader who's patient.
Now, if after two or three times, somebody comes in to do the dump and run on you. And they're giving you this stuff and wanting you to figure it out. And you keep asking them these questions.
First of all, just like if you've had your arm in a sling for six months and you go to the gym, you can't start lifting 50s. You got to start small and build up. So that's what those questions are, are that the leader is asking. Eventually the person knows, all right, when I get to the gym, they're first going to have me do reps on some small weights. So I have to have that prepared before I go into scene. And it'll get better and better and better, but it is a slow process. You're not going to wave a magic wand and have this person suddenly thinking more strategically. And they can't. When there is an excuse or a distraction of too much tactical stuff to deal with.
[00:53:07] Speaker A: I have watched this play out in a successful way with one of my closest clients. And he'll know who I'm talking about because he'll be listening. I'm going to tell you why I think it's successful and why this. I. I think it becomes way more difficult to do this than most people think. Is the leader of the.
Who I call the owner operator. They own the company, but they also are the main person.
They don't know what the hell their goal is. So what happens is the only goal that's acceptable to me is someone that clearly articulates their time, cash flow, and valuation in five years.
The only way we can see our constraints is to have that goal. Because otherwise we're just making shit up. Because if you told me you wanted to have a $30 million valued company in five years, but you're doing $1 million in normalized Z, I'm like, you have to grow like crazy and burn cash. And you're like, well, my million dollars in distributions. I'm like, well, I'm not Jerome Powell.
[00:54:05] Speaker B: I can't print money.
[00:54:06] Speaker A: So my point is, like, the only way. Cindy. And I'm. And I'm. I'm starting to get unapologetically straightforward with this. Like, because I'm.
[00:54:16] Speaker B: I've been.
[00:54:16] Speaker A: I'm spending. So I've spent so long trying to figure out why is this not the. The case. And then, like, and I was talking to my buddy Nick Bradley. I'm like, this is just how it works. He's like, private equity. He's like, here's the deal. We buy a company. We know what our. Our return in five years and that just is what it is. And someone can say, well, it's not
[00:54:33] Speaker B: all about the money.
[00:54:33] Speaker A: It's like, well then you're a nonprofit 5oc3 or you're trying to generate cash flow. And so the valuation at a point in time is the only thing that will give us context to all of our goals and all of our decision making.
I have not seen anything else that can tell me otherwise. All of the derivatives of like customer happiness or employee satisfaction or impact in the company and all the stuff that really matters are derivatives of a healthy, valuable business. So if we have that five year goal, I think it allows the leader to guide the questioning because they're now confident in themselves. Where if you don't know what the f you want and where you're going, people don't have the patience because they don't know what questions to ask. And if it's like the Socratic approach and hey Cindy, you know, we talked about the fact that we needed those five milestones in the user journey to understand the client acquisition cost and the user conversions to get to the revenue forecast. Is there a reason that you only have three conversion rates?
Is there a reason that this one's down? And like because the owner operator can then they have competence in themselves like a parent to guide them. And so I've watched that with one of my clients be unbelievably successful where they, We've had six board meetings now where they've elevated their people because he knows what's at risk if the person doesn't do it immediately he's like, okay, we got another couple of board meetings to let this pan out. So I think it's just there's.
My final point is without that clear vision of like where we're going and why and how like all the constraints and trade offs work, the panic mode is always, it's like the cortisol. The cortisol is always going. So it's even unfair to the leaders to go like, you don't know where we're going.
How can you ask me questions about it?
[00:56:23] Speaker B: You're absolutely right. Now if you take that at the top, most top level and then those three roles under the CEO understand that their goals and everybody's got their clear job scorecards that align to those things, it becomes much easier to have the right conversations.
There are leadership, there's plenty of leadership programs, including on our website, where you can develop real leadership skills. How to give somebody feedback, how to delegate a project and not lose control of the project. Right. All of those things are basics that people can be taught their processes. Follow these steps and you'll get there. But to understand the goal, and part of it is aligning the goals from the very top through all of the levels until you get to each individual having three to five things they're working on that tie to the 3 to 5 of the department that tied to the division that tied to the corporate. So there's a clear line of vision between what I do and what the company does. And I understand how I do matters.
But as far as the critical thinking that has just atrophied to your point, across all levels of the organization, anything
[00:57:43] Speaker A: to do with TikTok and social media, like, let's just like. I mean, it's like, how much of you, like, is this, Ryan, Making up into my head, bro? Like, I'm at, like, sporting events with my kids, or I'm walking around the supermarket, or I'm at the airport and I just watch people drooling while scrolling. Like, how bad is this? Just me being cynical because I'm now looking at the. The other generation. But I think it's across all generations.
[00:58:08] Speaker B: It is across all generations. But I don't know that there's a couple correlation or causation between scrolling through those things and the critical thinking. I mean, I do think there's a place for mind candy. I don't. I don't care if that's reading fiction books or watching something stupid on TV or scrolling through your phone.
[00:58:26] Speaker A: I don't disagree with that.
[00:58:28] Speaker B: It can't be obsessive. Right? Yeah.
[00:58:31] Speaker A: All right, we'll move on.
[00:58:35] Speaker B: So let's.
[00:58:35] Speaker A: Let's talk about. Because I think we've isolated one of my core questions on. Okay, we got the scorecard. And like, I believe if we have the owner's goals of cash flow and valuation and a specific timeline, we can back into isolating then the income statement, all the KPIs, ripple those throughout the entire organization. We have.
I think we need to do a lot more. Me and my group of clients in my community needs to do a lot better job with these scorecards that you've outlined. I think that that will level up a lot of people's game.
Identify which ones are tactical, and then over the next handful of years, as we grow, how do we level up that strategy?
Do we want to talk about how you actually assess that strategic thinking and then how do we actually measure it? Because you had some really cool stuff that, like.
Because, I mean, so far my clients and I are like, okay, do we think that person's a strategic person? And we. We give them projects in their recruiting phase which are just about like, can you think about outcomes and managing the outcomes? But you've got some cool stuff, I think.
[00:59:40] Speaker B: Go back to sharing and let's go back here.
Process, sorry.
Trying to figure out the fastest way of getting placed. Let's go to assessing the soft skills here.
So this is the Watson Glazier critical thinking test that we talked about.
It's a 40 question test.
I have never seen anybody get a 40 out of 40.
I think I've seen two people get 39s.
We never change the norm group, so we just tell everybody to ignore the really pretty blue continuums. I know they jump off the page because they're so pretty, but they just screw you up. And the reason is it really comes down to the raw score.
Again, I haven't found this anywhere other than our observations for using this for years. We have found if someone scores a raw score of 28 or higher out of 40, they have the capacity to initiate and contribute to strategic conversations than pretty much any executive team.
There's something magical about getting to 28. At 25, 26, 27, they will probably follow along pretty well. They may not initiate the strategic conversations.
And below a 25, there's at least sometimes you're going to have to help them connect the dots.
[01:01:05] Speaker A: Interesting.
[01:01:07] Speaker B: So we look at the raw score, and then the subscale performance is right below it. And the reason we don't change the norm group is, let's say you have, and I don't know these numbers, but this one's a 32 and it says this person's in the 75th percentile, approximately 74th.
What happens if you are using an executive assistance norm group and you have somebody who's in the 60th percentile, but they scored a 24.
That 24 can never successfully work for this 32 without the 32 choking them.
[01:01:50] Speaker A: Interesting.
[01:01:51] Speaker B: Okay, yeah, we want to know the raw score.
It's also very difficult if somebody is not a critical thinker, to hire people who can think more critically than they do.
Right.
So there are actually five sections that are evaluated in this test, and this one's a test. The other ones are assessments the government's very clear about. Don't call one the other.
[01:02:18] Speaker A: Before you keep going, would you mind just like, okay, why did you land on this one?
Just maybe a little bit of, why did you pick this one? And why do you like this assess or what is it assessment? Not A test or whatever.
[01:02:32] Speaker B: We looked at a lot of critical thinking tests. Some of them aren't really critical thinking.
So people use the wonder look. That's not critical thinking. That's math and verbal skills. And it's timed. And so people who are very analytic typically do not do well on that test when it was timed. There's a bunch of different reasons. Coincidentally, we have yet to find any place on the Internet where the answers are provided for this. So you can't Google the answers.
Interesting. You can, if you're interested.
Ask Chat to teach you how to prepare for the Watson glacier.
But you'll need to invest two to four hours in learning how to think more critically before you okay with that? If somebody's willing to invest in the critical thing before I'm in. Sign this guy. Yeah, like.
[01:03:28] Speaker A: Well, you've already, like, that's like a threshold in itself, right? Yeah.
[01:03:30] Speaker B: Yeah. That's awesome, right? Most people aren't going to spend that much time.
So this is a very great tool. It matches with the psychological and neurological sciences that we follow and is a good complement to the trimetrics, which I'll show you in a second.
[01:03:51] Speaker A: And just before we keep going, because I want. If people are like, I'm just picturing some of the people I work with. I'm a culture index person or a predictive index person or a Colby person or a discovery Insights or disc or. Or Myers Briggs or like, how does this compare to all of the ones I just.
[01:04:06] Speaker B: Except for Colby. All the other ones are behavior assessments.
[01:04:09] Speaker A: Okay.
[01:04:10] Speaker B: Nothing to do with critical thinking. Colby has nothing to do with critical thinking. They try to tell you Colby is conative and they tell you, depending on which consultant you talk to, they'll tell you what it really. When you get into the science and you look at what it's trying to measure, it's trying to measure how you process information when you're making a decision.
Not all the time.
So as an example, in a Colby, I will always come out as a quick start.
But if you know me when I am in problem solving mode, I am a very high fact finder.
I would have made you crazy during COVID when I was trying to figure out what was going on and how we were going to beat the system.
I was major league into fact finding, but I never come out that way because it's not asking me when I'm in. It's not.
[01:05:06] Speaker A: Yeah, I'm tracking. I feel the same way because. Yeah, I mean, I'm a quick start too, but I've spent 11 years trying to figure out understanding weighted average cost of capital and cash flow statements like, okay, well, explain to me that it can't.
[01:05:19] Speaker B: All things considered, it's probably closer to a behavioral assessment, but still not that I.
I have my own thing about Colby, but that's another story.
[01:05:30] Speaker A: So, okay, so critical thinking is helpful because it's different than those other behavioral ones.
[01:05:36] Speaker B: Oh, yeah.
[01:05:37] Speaker A: This is about critical thinking, and it's
[01:05:39] Speaker B: not to take away from those.
There is a good value on those, but it's not going to help you figure out critical thinking. And we happen to use the critical thinking, the Watson Glazier critical thinking short form E.
There is a long form, which is the one.
So when we were evaluating this, we got one of our clients who we always thought was pretty sharp. Like when we were trying to problem solve for something or figure out a new service offering or something, this was the guy we always tapped on the shoulder and said, hey, Scott, what do you think of. Right. So one day, the three of us took the long form, which is 80 questions.
So, you know, the 40 questions takes about a half hour.
So this is taking an hour. And I'm telling you, your brain is fried at the end.
And so it's 80 questions, and everybody, we all tease each other. Scott scored a 75, John scored a 74, and I scored a 73.
So, I mean, that would translate. If you cut it in half, Right? That would translate around somewhere between 35, 36 for 37 for most of us. Right.
But we were like, we cannot ask the average human to spend this long an hour ago.
[01:06:53] Speaker A: And that burns. Yeah.
[01:06:55] Speaker B: So then we took the short form and felt this was plenty strong enough. There were enough questions. So the reason there are some longer and shorter versions. So there's a behavioral assessment out there that takes minimally 55 minutes to complete. That's insane. Most behavioral assessments will take you five to 10 minutes to finish 55. Minimally, you. They're just trying to ask the same question over and over to make sure that it's not getting gamed or whatever. Like, at some point, there's a diminishing returns, Right?
[01:07:28] Speaker A: Yep. I love it.
[01:07:29] Speaker B: So this 40 questions seems to be sufficient for all that kind of questions.
[01:07:33] Speaker A: Are they asking.
[01:07:36] Speaker B: They're like math questions for. They're like algebra questions for business.
They give you a scenario. So I'll give you. So there's actually five sections, but they break the answers into three categories. So recognizing assumptions is being able to read between the lines. See this down here? Read between the lines so you can understand what's meant, not just what's said.
Evaluating arguments is really fascinating. And we see some correlation between this and the critical thinking and in the workplace, motivators in the trimetrics that I'll show you in a second. So evaluating arguments is seeing a situation, being able to pull out the most significant components and evaluating the strength of evidence without your own personal biases coming into play.
That's fascinating.
So you can imagine if people have a really difficult time compartmentalizing their biases.
This piece is evaluating arguments. This particular sample, the guy got 11 out of 12.
When you see a three or four out of 12 and you're like, oh, this might be a problem. Right. So it's not just the overall score, but you look at the sub scores and then the last piece is the drawing conclusions. Can they come to the right conclusion? So sometimes we'll see 10 out of 12, 11 out of 12, and 5 out of 16.
Well, go back to the conversation we were having about the strategic and the tactical.
If you have especially a young person right out of school who's not been allowed to contribute strategically and they just. Then that part of their brain has either atrophied or has just never developed and they can see the other two pieces well, but they don't understand what to do with it.
That, to me, that one's easy to develop.
You see what the recognizing. You see evaluating. You just need a little coaching on how to draw the right conclusions and pulling those things together.
[01:09:33] Speaker A: Interesting.
I love this so much.
[01:09:39] Speaker B: So now when we go to the trimetrics. Hold on. We should be right below this. Yes. Close your eyes. I'm going to scroll and I don't want to make you seasick.
[01:09:47] Speaker A: I just, I just think about how you.
I, I mean, I've not, I've not personally come across this, the, the Watson before. And like, I just think of how important those three things are that you just mentioned. It is crazy. Like, reckon. I mean, seen between the lines.
Evaluating and recognizing assumptions versus evaluating arguments, drawing conclusions. I mean, I mean, yeah, right.
[01:10:15] Speaker B: Yeah, it's.
[01:10:16] Speaker A: It's so good.
[01:10:18] Speaker B: All right, hold on. I'm trying to find the.
All right, here's the workplace motivators. Now this graph. I'm not going to show you all the other stuff.
There are six motivators we all have to one extent or another.
We tend to use discs. I'm not going to bother showing you this. So the trimetric stands for three. One piece is the disc. That's Behaviors. Are you an extrovert or an introvert? An analytic or a creative? Most of the assessments that you'll find out there that you were naming earlier are based on behaviors.
Disc, predictive index, culture index, McQuaig, Oad, Myers, Briggs, they're all right. And that's good to understand. It is good to understand if somebody is far more of an introvert and you're putting them in an extroverted role, you know, let's not stress them out like that. It's not useful, but that's different than what motivates them. So I've had somebody who was a culture index person who saw my profile and say, oh, you're very motivated to work with people. I said, no, no, I'm good at working with people only because I am motivated to help for profit businesses achieve their goals. And I'm good at aligning the talent to get that done.
So the utilitarian is this guy's first. That's somebody who wants to be. He's motivated to be efficient with all resources, not just money, but time, effort, talent, all resources.
They don't like to waste resources. And here's the mean, right? So you can see this person is motivated that way. Oftentimes you will see that in a revenue person. You may see that in a cfo, maybe, maybe not. I'll show you an example.
Individualistic is the extent to which you want to control things. You want to be able to call the shots.
So somebody who is passionate about leading will typically have a higher individualistic. If they're so high, they're up here and they're in a lower level position and they don't get to call any shots, they're probably not going to be happy for long. Right? That's their motivation.
The theoretical is a passion to acquire knowledge and truth. They love to research, they love to write yours. If I were betting you haven't taken the assessment, I bet you you have a utilitarian and a theoretical. So the theoretical wants information on the stuff you want information on the stuff you want to figure out. But the utilitarian only wants useless, useful information.
So if you have the theoretical way higher than the utilitarian, you can have somebody who'll just go study aquatics in Mexico. You and I aren't doing that unless we have a vacation plan there, right?
So that's where that utilitarian comes into play. The aesthetic is about form and function. And because it's about all five senses, it tends to be very experiential. Employee experience, customer experience, the Social. Think of it as society, not socializing.
So it's the altruistic motivator, this self sacrifice for others.
We see that much higher in not for profit organizations. Right.
Sometimes you see salespeople who've been told all other lives, you are so nice, you are so sweet, you should go into sales.
If they are a high social, the odds of them asking for the money is.
Right.
[01:13:47] Speaker A: Yeah, exactly.
[01:13:48] Speaker B: And then the traditional is someone who has a. When it's above the mean and certainly if it's in the first or second priority, it's somebody who has a systematic way of living and things fit in the system where they don't, they're right or they're wrong, good or evil, there is no gray.
All right, so it's more than just being a high C from a disc perspective where you follow rules set by others. This is your own book of rules, which may in fact violate laws. It doesn't matter. So in, in an extreme, a high traditional could be Osama bin Laden, it could be the Pope.
It's their book of rules.
[01:14:26] Speaker A: Yeah. Yep.
[01:14:28] Speaker B: Now here's the one that you're gonna find most fascinating. Bear with me when I get to it. I saw it down here. Here it is.
[01:14:34] Speaker A: I mean, is. It's it. Do you have a correlation between those motivators and values?
Like how those match up with like culture and company values? Because.
[01:14:45] Speaker B: Oh, yes, yes, yes. Yeah, for sure.
So we know one organization we have is very high utilitarian, very high theoretical, and we've seen people come in with a high social and we're like, all right, so here's our challenge. So we give them the follow up questions to flush this out. Sometimes that happens because there's a special needs person at home and that social is actually very compartmentalized to being at home.
[01:15:11] Speaker A: Oh, interesting. Yeah.
[01:15:13] Speaker B: Right. So I mean, you can't make any go, no go decision based on assessments. It gives you an opportunity to flush things out. Yeah. Yes. Yeah.
So this is the other piece that I find fascinating, especially when it comes to thinking. So this is the Hartman value profile. To the best of my knowledge, it's the only one that it's based on the deductive science. So most of the other assessments ask about your preferences and using inductive reasoning, try to figure out how you think.
This one has you rank order 2 sets of 18 statements from good to bad, and as such, it's based on a deductive science. How do you think of this statement relative to this one? Close or farther away? Right. So it actually can come up with a reliability score which is down here.
You still, from stats perspective you need a 0.70 on either side of the hyphen to say this is reliable enough to to say there's a real pattern. In this case we're 96% sure this is how this person views the world in which they operate and 89% sure this is how they view themselves, which is pretty strong.
This is how well they understand people.
The system's judgment is the extent to which they understand that big picture, the system at large, the strategic and this is the extent to which they understand the pieces that make up that picture.
So in this case we would say those two are very well developed and very well balanced. If they are within 5 points of each other, they're well balanced. Anything over 80 is very well developed. Well developed is at 60, very well developed is at 8.
The internal looks at basically the self esteem, their understanding of their current role and what they're seeing in the future.
This role awareness has a lot to do if not a direct correlation with personal accountability.
If someone is not clear about the expectations of the role, hence the job scorecard, it is impossible for them to say oh I screwed up, I'm sorry, that was my bad. They didn't know was their responsibility to begin with.
So in this case his clarity of his role is very low and he's not happy about it. He could be unemployed, that's pretty low. Or was just transitioned into a new job. He does not like when someone is changing jobs either their future.
So either what they're doing or where they're doing it is going to be negative. That's why they're looking for a job.
So you have to ask follow up questions to figure out what are those questions in their head to make sure you're not replicating them in the new role.
But you can imagine how some of this stuff impacts their critical thinking.
[01:18:04] Speaker A: This is so cool.
[01:18:05] Speaker B: Yeah, isn't it cool?
[01:18:08] Speaker A: You gave yourself a thumbs up.
[01:18:09] Speaker B: Did you say that? Oh yeah. I didn't mean to do that.
How do you get rid of that?
[01:18:13] Speaker A: I don't. Keep it. I like it. Let's go with it. This is why I like our conversations because you're like these are, we need more intrinsically motivated outcome focused thinkers.
And like I don't even know what else to say other than that. And like, like all of the tactical shit is going to be figured out how to automate through AI. And like we want to continuously like, like strategic generalist thinkers are going to Be the ones that have jobs for a long time, in my personal opinion. And, and so I like, I've, I've not seen anybody quantify between the scorecard and two tools that are like, I mean, people love the behavioral assessments and they. I look at and go and. Because, I mean, I like every. I'm just like everybody else. I like talking about like, oh yeah, this is what the world thinks of me. Cool. It's like a fortune cookie.
[01:19:12] Speaker B: But like, yeah, yeah, what do we
[01:19:14] Speaker A: do with it actually? And when you, when you were walking through that stuff, I mean, because the, the make or break, it is like, is someone able to take the monkeys off of the back and own the outcome and just get done.
[01:19:28] Speaker B: And you know what, what makes me crazy, we've got a couple of clients who've been with us for over 10 years now in, in. Well, we've got tons that have been with us for almost 30. But it. Two in particular make me crazy.
One insists on doing just the Watson Glacier on their people.
And nobody else is allowed to do this. We let them do it early on. And the challenge with that is you could get really somebody really smart. And I would say my one brother who never took it, I bet you he, if anybody was going to score a 40 out of 40, he could have done it.
But he had the personality of an enraged porcupine. I mean, there were times I would look at him and think, that's a
[01:20:10] Speaker A: quote for the book.
[01:20:11] Speaker B: Michael, do you have to practice being a jerk?
[01:20:15] Speaker A: Was he a litigator?
[01:20:17] Speaker B: No, he was an engineer. First he was an electronics engineer, then
[01:20:23] Speaker A: a doctor, then an attorney.
[01:20:25] Speaker B: He close. And then we didn't do any electronics stuff or that we cut out the defense industry.
So then he taught himself how to write several computer programs. And so then he went to work for AT&T. Bell Labs. And then that was broken up. So then he said, screw it. Nobody's going to mess with the medical profession. And so he was studying to become a nurse. And I remember saying, you don't like people.
How are you going to be nurse
[01:20:54] Speaker A: Bedside manner not part of the.
[01:20:56] Speaker B: No. And he said, I'm going to be a surgical nurse. They're going to be knocked out before I have to deal with them.
Except for the doctors. Right. But, but yeah, so, so you. If you only use the Watson glacier, you're still missing how that brain power is being used. We have another person, the HR person scored very poorly, like very poorly on the Watson glacier, like an 18. And I keep telling people if my dog Walked across my keyboard. He should be able to score 20 out of the 40.
So either she wasn't paying attention, she was distracted. All things we tell them not to do or she's dumb as a pet rock. Any one of those is a problem.
And so she refuses to use the Watson glacier. She only use the trimetrics.
So they have no idea. And I can tell you the two owners are wicked smart.
So the only reason I think they can screen out the duds is because they can. They have the patience of a gnat in an interview if somebody can't keep up with them. And that's.
[01:22:03] Speaker A: That sounds.
[01:22:04] Speaker B: Yeah, yeah, but she's. But here she is the keeper of the keys to the kingdom and she doesn't believe in the critical thinking piece.
[01:22:15] Speaker A: I mean, what I want to continue doing with our collaboration in whatever shape or form it comes to be.
I have this vision, Cindy, in my head of like, okay, if you like I picture, I, I stack all these concepts on top of each other. Like, okay, I showed you that scorecard. If someone wants to get here for their, for their ownership goals, but then we nest the company's operations inside their ownership goals, then the, therefore all of the operations has a very knowable KPI that has to be hit. If it's thought through, then what we should be able to do is then like if we take, if we go and we extrapolate. So if I'm looking at the financials in my head, like there's this five year financial forecast, but then we extrapolate the payroll tab in line inside of SG and any. And then what we do is we double click it and we turn it into an org chart with your layered on scorecards. But then that org chart should evolve every single.
I'm thinking about these as columns and say like we just want to evolve these scorecards in this org chart to the five year target and we're pulling people forward with the strategic thinking so we can be backfilling the tactical or automating it with AI.
[01:23:35] Speaker B: Yes.
[01:23:36] Speaker A: And I don't know how all these things come together because I've very much systematized everything else in the ownership operating system besides this leadership development roadmap, which I can see in my head, like how it should be put together. I, I feel like. But then as you continue to layer in your scorecards and then the critical thinking test is stuff that I've never seen and it's like the functions of a company kind of like when you like, you know, Gino has got his his they call it. What do they call it? The function accountability chart. I.
I don't know.
[01:24:09] Speaker B: Like, simply. So the EOS implementers love our job scorecard because it's like the accountability chart on steroids, right?
[01:24:15] Speaker A: And the way that I'm thinking about it, though, is I've kind of flipped the entire thing on its head where, like, I just don't think most of this should be starting from scratch. Like, a company has revenue, a company has operations, a company has finance. And so, like, there's like this structure of a company.
You know, whether you have customer service, is it, like, where does it go in the income statement is like, everything has to have a function. And Jack Stack, who is on my podcast, the Great Game of Business, he's like, the best KPI dashboard is the income statement. I'm like, amen, brother. And so, like, I think about, like, as we grow a company, like, there should be, like, scorecards based on the.
It's like a sports team, right? Like, this is how it works. And then explain to me why. So someone should have a good argument of why they deviate from it.
[01:25:06] Speaker B: So you're really going to hate this next part. I'm going to tell you, but I'm
[01:25:11] Speaker A: going to drop it now. I want it even more. Tell me.
[01:25:14] Speaker B: I'm going to drop it on you and let you noodle through it, because then you're going to come back at me. Like, I love it. Even if it's not this time. You're going to come back at me another time. And I love being challenged. But we have tried to find shortcuts to creating the job scorecard.
When we created Job Scorecard, the primary stakeholders of the job are the ones that help build it out. Hear me out.
So let's say it's a CFO role.
Then the people who report to the CFO are in it. Certainly the CEO is contributing to it.
The revenue guy is in it. Maybe some of the other sales were like, who are the people who understand what it takes to do that job well or who are impacted if the job's done poorly?
Those people are in the room helping us build it out.
In certain roles, there's not that much difference from role to role. The three jobs that have the biggest variation across companies are executive assistant, HR and sales.
So those have to be done.
But the biggest difference is getting the buy in of those people.
If you put it together and hand it to them,
[01:26:34] Speaker A: I'm tracking it. Let me, let me, let me jump onto this. So, no, I agree with you. I guess maybe the way I would describe it is if you have five buckets of a scorecard and you said that one of them is like team
[01:26:50] Speaker B: bucket, the team might almost carry along for each one with one or two lines.
[01:26:55] Speaker A: Oversight, talent management and team like. So there's going to be. So maybe what, what I'm thinking is, okay, like if, if the scorecard has five buckets and like three of them are the tactical buckets that like a controller has to do, a director of sales has to do, a COO has to do, a, you know, an IT director has to do. Like it's not negotiable that an IT director has to make sure active directory is up and running and that we have antivirus and that we have spam filters and like we have a COO that has to make sure that re recognition and margin. Like there are certain puzzle pieces that just have to be done if we're going to play the game of business. And then what we need to. What I think most companies struggle with that do need workshopped out is okay, Here are the 25 puzzle pieces that have to be done. It is non negotiable that these KPIs have to be owned by someone. And that's what I think is missing is like the, like these things have to be done. Then it's like given our, our 9 million versus $100 million, like, you know, Cindy's gonna, we're all gonna workshop out like our CFO in our company is gonna own these five different things. Then you stack on team management and oversight or something. So it's like trying to figure out who owns the puzzle pieces.
[01:28:07] Speaker B: Right?
So I don't have a problem with the facility. So there's always two facilitators for each of these sessions. And it takes three to four hours virtually or in person to build out a job scorecard. Right.
You will spend more time, Jerry, rigging certain things you guys have all agreed on into this format. And you don't start with the categories. You have to start with a laundry list and the categories appear and what one. I mean, we got into a conversation today with an organization that doesn't like the word job scorecard.
I don't care.
Call it whatever the hell you want.
It doesn't matter.
But it sounded too competitive. I'm like, you're keeping score on whether or not they're doing their job.
Like most people want to know who's winning, but getting their buy in is worth the three or four hours. If I come up with the Most elegant job scorecard. That's exquisite. It covers everything. And I go, here, Ryan, do you think I missed anything? You're going to look at it, maybe give me one item or two.
[01:29:15] Speaker A: And they go, no, that's fine, I'm tracking. So maybe I, I, I want to be a little bit more clear because I feel like you might agree with me is it's not having a templated job scorecard.
It's saying, Here are the 30 things that have to be done already. Like, we close our books every month. We have a CRM that has conversion rates. We, we have a project to budget actual for margins, for working capital. Like non negotiable. No more fluffy kumbaya. Like everybody's fired if they're not agreeing that this shit has to be done. So it's more like here are 30 puzzle pieces. And if a puzzle piece is one of the buckets, we say you, what we have to do is we have to take and identify the scorecard. But what we have to do is by the end of this workshop, all 30 of these puzzle pieces, they have to be on someone's scorecard. That's more of what I'm thinking of.
[01:30:12] Speaker B: You're absolutely right. So, yes. And the facilitator has that list. So before going in, if we know we're going in to do a sales role, the facilitator does some research. They not only look at previous sales roles, similar companies that we've done, goes out to see if there's new stuff being introduced out on the Internet and comes in prepared for those things. But as an example, one of the things we run into with controllers.
Okay, is this person responsible for closing the books? Yes, for the success factors. How many days after month end does it have to be closed?
So long as it's done before the end of the next month. What, how do you, how do you wait 30 days to know what your numbers are? That's insane. And so we'll say something like must improve or the number of days to. I'm just thinking, how do we do this? Recently, number of days to close books was less than.
[01:31:12] Speaker A: Well, that's kind of where I'm going with this, Cindy, is like, get down
[01:31:15] Speaker B: to two or three. Right?
[01:31:16] Speaker A: And like, and I have strong opinions of like, I could list probably.
Let's call it 30 things and at least 10 mandates on each of those buckets. Revenue margins and SGA. Like non negotiable. Like, and it's probably a list of a hundred things. And it's like we're not looking for opinions on this. We're going to figure out who's going to own the closing of the books, who's going to own the controlling of the metrics of the leading indicators for the sales funnel, who's going to control working work in progress and budget the actual and the service tickets. And so then it like that's where I do want to like with me and my operating system and my or my community, it's like these are like we're going on the. Whether it's a court or a field as a, as a, as a team, these roles have to be filled. But then if we're kind of molding the team because we're going to be growing over the next five years, I think that scorecard and scorecard revision, figuring out who's doing what as that grows over time becomes a collaborative thing for sure. Because again CFOs and controllers, do they have HR and it reported them or not? I mean that's wildly different per company, right?
[01:32:31] Speaker B: I agree completely. So yes, there are some standards but rather than us telling them these have to be. We hold it back and then we offer up as best practices and we let them accept and reject if they. But if they come up with it on their own, which is even better.
[01:32:48] Speaker A: Yeah. Yep.
[01:32:49] Speaker B: It's better that they're already thinking that than us spoon feeding them again. We're making the great work.
[01:32:54] Speaker A: Yep.
This is all fun. That time flew by. I'm excited to have you in the group. We can do some more pen to paper on some of this stuff. I am excited to continue to collaborate because I think I've got, I've got some ideas on how we can noodle on some of this stuff for the ownership operating system and what we're doing for people because this is tangible and actionable. Tangible and actionable stuff. That's more on the objective side. I know there's a lot of subjectivity as how you're building the scorecard or who, what people go in there, but it's not total kumbaya.
[01:33:31] Speaker B: No, it's not. There's a process. All of our stuff has a process. So it's repeatable. And I'll get with you on some stuff I think we can use for your small groups, either your Monday or Tuesday groups, what do you call them? Small groups.
[01:33:44] Speaker A: So Mondays are open office hours and then Tuesdays are the owner's academy.
So we're just jumping in. We're bringing in experts like you and I got Pat that comes in on the CFO side or Kim Clark on the revenue side and strategic planners or investment bankers and just anybody that's tied to the owner's roadmap stuff that people are working on.
[01:34:02] Speaker B: So open office hours is Monday and what do you call Tuesday?
[01:34:04] Speaker A: I'm sorry Owner's Academy.
[01:34:06] Speaker B: Owner's Academy. I couldn't write fast enough. Owners. Yeah.
Great.
Cool.
[01:34:12] Speaker A: I'll put the previous podcast in the show notes below as well as your link to the Metis group. Anything else you want to drop the listeners with?
[01:34:24] Speaker B: We always have our own podcast on a relevant leadership topic or selection topic third Tuesday of the month. You can sign up for those anytime on our website. I know you're putting link out there
[01:34:38] Speaker A: so they can join and very much recommend going to your website. All that stuff is I mean and you've had a lot of good feedback from people I know.
[01:34:45] Speaker B: Great. Thanks Cindy. Yeah, appreciate it included. Have a great one.
