Speaker 1: This is Bloomberg Business Week with Carol Messer and Tim
Speaker 1: Stenebeck on Bloomberg Radio.
Speaker 2: Well, you hear it over and over again from CEOs.
Speaker 2: The most important asset a business has is its people.
Speaker 2: So what's the secret to building and maintaining a successful team.
Speaker 3: It's a question that our next guest ventures to answer
Speaker 3: in his latest book. Mike Mcalowitz is an entrepreneur who's
Speaker 3: founded and sold two companies, OMC Systems and the data
Speaker 3: forensics firm PG Lewis and Associates. He now owns seven
Speaker 3: more businesses and he's written seven other books. His latest
Speaker 3: book is called All In How Great Leaders Build Unstoppable Teams.
Speaker 3: He joins us on Zoom from New Jersey. Mike, good
Speaker 3: to have you with us this afternoon. Congratulations on the
Speaker 3: new book. Why I'm curious why you've written six other books,
Speaker 3: seven other books? Excuse me, why is this one your
Speaker 3: eighth book? Because building the right team seems like one
Speaker 3: of the most basic things an entrepreneur has to do
Speaker 3: to get it right.
Speaker 1: Carol, Tim is a joy to be with you, so
Speaker 1: thanks for having me. The reason I wrote this book
Speaker 1: now is particularly the COVID pandemic. It shifted what was
Speaker 1: prior desires into expectations. We wanted a flexible work schedule,
Speaker 1: we wanted the ability to work remotely, but now it's expected,
Speaker 1: and as leaders, we need to change that in other dynamics.
Speaker 2: Well, you know, it's funny. One of the things I've
Speaker 2: thought top of mind that I wanted to ask you is,
Speaker 2: what's the first leadership mistake you've made in your life?
Speaker 2: You've built, sold companies, you've got a bunch more. What
Speaker 2: was the first big mistake that you made as a leader.
Speaker 1: Oh, it's embarrassing, so thanks for starting me off with this,
Speaker 1: but you're welcome. What I did once when I had
Speaker 1: my forensics business, we were going to achieve ten million
Speaker 1: dollars in revenue if we pulled the right strings and
Speaker 1: made the right moves. I spent a day calculating the numbers.
Speaker 1: I came out of my office. We were brick and
Speaker 1: mortar at the time, and there was thirty of my
Speaker 1: employees there. I called everyone, and together, I truly did play.
Speaker 1: I have the tiger in the background for this momentous moment. Yes,
Speaker 1: and announced we're new ten million dollars of revenue, expecting
Speaker 1: great fanfare, and there were silence, people slumped back to
Speaker 1: their desks. My colleague Patty came up to me and said, Mike,
Speaker 1: if we achieved ten million dollars, you get the bigger house,
Speaker 1: you get the new car. But why should we care?
Speaker 1: Don't you care about our dreams? And that became an
Speaker 1: epiphany for me is that the vision for a company
Speaker 1: is inevitably the vision for the leadership team or the leaders,
Speaker 1: but it's rarely the vision for the colleagues that work there,
Speaker 1: the employees. So to set that as an expectation is
Speaker 1: unfair and unreasonable. What we have to know as leaders
Speaker 1: is what is the individual dreams for our colleagues. I
Speaker 1: have one colleague who wants to buy a house, another
Speaker 1: one who wants to learn to play guitar, someone who
Speaker 1: wants to spend more time with their family. And once
Speaker 1: I started understanding their dreams and started prioritizing those visions,
Speaker 1: then reciprocy kicked in and they prioritized my vision. So
Speaker 1: we have to work on our goals in concert. It's
Speaker 1: not just the company's goals, it's everyone's goals.
Speaker 3: What would you say to somebody who said that all
Speaker 3: sounds great in a company that doesn't exist and doesn't
Speaker 3: make profits Because somebody who you know has a priority
Speaker 3: or a dream of learning how to play guitar or
Speaker 3: spending less time working. That isn't a goal that necessarily
Speaker 3: aligns with you getting to ten million dollars in revenue.
Speaker 1: Yeah, and it does sound a little kumbaya, admittedly, but
Speaker 1: what I found is my job is not to facilitate
Speaker 1: the guitar lessons. My goal is not to pay for
Speaker 1: their home. It's just to remind them that dreams important
Speaker 1: and that their job is a means to achieving that.
Speaker 1: Now I do some block and tackling, I will be
Speaker 1: flexible on schedules, But when I prioritize their dreams, I'm
Speaker 1: not expecting them to compromise their work effort. In fact,
Speaker 1: I find that most people double down their work effort
Speaker 1: because they see that I know their work is not
Speaker 1: just about caring for the company, It's about caring for
Speaker 1: their dream. So it really is reciprocity, and that's human nature.
Speaker 1: When we care for someone else, they inherently will care
Speaker 1: back for us.
Speaker 3: Hey, like, how important is compensation in this equation slash
Speaker 3: equity in a company that you're building?
Speaker 1: So compensation of course is important, but often money is
Speaker 1: a demotivator, which is kind of surprising. And what I
Speaker 1: mean by this is if someone feels they're being shortchanged,
Speaker 1: not paid equitably, they're going to resist that and they're
Speaker 1: going to be frustrated. I've never found though I can't
Speaker 1: think one case teim or I've given someone a raise
Speaker 1: and as a result of the raise, their work performance increased.
Speaker 1: Maybe for a week or two, they put a little
Speaker 1: more effort in, but we go back to this thermostatic homeostasis,
Speaker 1: we go back to our own standards. What I found
Speaker 1: is we need to compensate people fairly and appropriately for
Speaker 1: the work they do competitively, without a question. But the
Speaker 1: real motivator is are we helping them achieve their own visions?
Speaker 1: Are they doing something of significance that maybe speaks meaningful
Speaker 1: or meaningfully to their life, maybe part of their life's mission.
Speaker 1: And it made it sound kind of weird. You could
Speaker 1: have a business that manufactures toilet paper and you know
Speaker 1: who whom name who wants to associated with that. But
Speaker 1: maybe some of the employees are concerned about the ecology
Speaker 1: and the environment and the impact that has there. And
Speaker 1: if we can correlate what we're doing to be of
Speaker 1: service to that greater mission. Those are ultimately the greater motivators.
Speaker 2: So, Mike, would you be cool like if an employee
Speaker 2: came in and I'm listening to what you're saying, because
Speaker 2: I have actually a brother who says this. He's like,
Speaker 2: I don't live to work, I work to live. He's
Speaker 2: done very well and he's been like a stellar employer
Speaker 2: employee throughout his life. But it's kind of interesting he'll
Speaker 2: say that I don't work to live, I live to work.
Speaker 1: Yeah. So I was at a conference once I was presented.
Speaker 2: Oh right, no, yeah, not live to work, I work
Speaker 2: to live.
Speaker 1: Right, I know, I understand what you're saying. I was
Speaker 1: at a conference once and I was presenting there there
Speaker 1: was a couple hundred folks in the audience. I asked
Speaker 1: the audience to say, who here is an A player?
Speaker 1: People who work to work? And every single hand went up.
Speaker 1: And then I said what percentage of population are A
Speaker 1: players to the same group, and two percent was shouted out.
Speaker 1: Five ten percent was the most gracious number. And isn't
Speaker 1: this a strange statistical anomaly? Everyone in this room is
Speaker 1: an A player, yet almost known in the population is
Speaker 1: how could this be? And what I wanted to reveal
Speaker 1: there is everyone is an a player in waiting. I
Speaker 1: believe that everyone has a talent of some sort inside ourselves.
Speaker 1: It may not be with my business, it may not
Speaker 1: be in the company that I lead. And when the
Speaker 1: talent doesn't reside within my company, that I can't help
Speaker 1: them flourish. It is my responsibility to pointment and direction
Speaker 1: that will serve them. At the end of the day,
Speaker 1: we're all here on a human journey, and yes, we
Speaker 1: want to have a profitable, healthy business. It's absolutely a priority.
Speaker 1: But at the same time, we can be of service
Speaker 1: to people. And sometimes someone may not be sued for
Speaker 1: our organization, but I will help find them somewhere where
Speaker 1: they're more suitable. It will have a more joyous, more
Speaker 1: fulfilling work experience.
Speaker 2: If we may go back to also what you were
Speaker 2: talking about, if you give somebody a raise, it's not
Speaker 2: like that all of a sudden there were working more
Speaker 2: are giving more. Having said that, it's an interesting time.
Speaker 2: We've spent a lot of time talking about the labor
Speaker 2: market because of a lot of data points that have
Speaker 2: come in as of late, and it's interesting. Sometimes the
Speaker 2: dynamics of people saying, well, wait, we're paying workers more,
Speaker 2: and like it's a bad thing because it's going to
Speaker 2: cost companies more. It's going to hurt their margins. And
Speaker 2: I feel like for a long time, workers who have
Speaker 2: helped create really wealthy companies have kind of been shortchanged.
Speaker 2: And so I'm trying to understand the balance of really
Speaker 2: appreciating your workers, not just paying the minimum or what
Speaker 2: have you, but really letting them share in the gains
Speaker 2: of a company financially.
Speaker 3: Yeah.
Speaker 1: Yeah, I one hundred percent agree. In fact, our own
Speaker 1: organization here we do profit sharing. Twenty percent of the
Speaker 1: corporate profits go out on an equal distribution to every employee.
Speaker 1: What I mean by that is, if you work part time,
Speaker 1: or you work full time, or your salary is different
Speaker 1: than someone else's, you're still getting an equal piece of
Speaker 1: that high and it can be pretty significant. But I
Speaker 1: also found that when it comes to conversation and bonuses
Speaker 1: and the monetary component, we have to realize that there's
Speaker 1: additionally something that serves satisfaction if you will in their job. Again,
Speaker 1: we have to offer a competitive salary. We have to
Speaker 1: care for people, there's no question about that. But there's
Speaker 1: something more that's often left out, and it's giving people
Speaker 1: a degree of autonomy, a sense of control, the ability
Speaker 1: to personalize their work. I think the traditional mindset for
Speaker 1: business was we were matching people's talents to titles, meaning
Speaker 1: we're putting them in the silo. You are the receptionist
Speaker 1: or you are the salesperson, and you have to fit
Speaker 1: in all these roles. But what I found is people
Speaker 1: are good at specific talents or tasks I should say,
Speaker 1: but not naturally everything that fulfills a title. So I
Speaker 1: think organizations should look at a more dynamic structure. I
Speaker 1: considered a web like structure as opposed to the traditional
Speaker 1: pyramid structure of an organizational chart. And we should match
Speaker 1: people's talents to tasks. And so now someone that maybe
Speaker 1: is serving in your sales role and is great at
Speaker 1: closing the deal right, also can serve a part of
Speaker 1: the reception component of greeting customers and so forth, And
Speaker 1: maybe that person was in the reception area can also
Speaker 1: be helping fulfill some area in the space in the
Speaker 1: accounting space, because that's where they have talent. I think
Speaker 1: that's what we need to do in addition to paying competitively.
Speaker 2: For sure, interesting all right, hey, Mike, we're going to
Speaker 2: continue the conversation. We do a little bit of news
Speaker 2: and come right back to you. Mike mccallowitz is with
Speaker 2: us his new book, All In, How Great Leaders Build
Speaker 2: Unstoppable Teams. Will continue in just a moment.
Speaker 3: I want to get back to Mike mccallowitz, an entrepreneur
Speaker 3: who's founded and sold a couple companies. He owns seven
Speaker 3: more businesses. He's written seven other books. His latest book
Speaker 3: is called All In, How Great Leaders Build Unstoppable Teams.
Speaker 3: He joins us once again on Zoom from New Jersey.
Speaker 3: MIKEL want to ask We're going to ask about some
Speaker 3: leaders in a minute, but before we get to that,
Speaker 3: I just want to ask about building a team like
Speaker 3: you described to us earlier in an environment of hybrid
Speaker 3: and remote work. How do you do that?
Speaker 1: Well, we have to give that tactile experience whenever we can.
Speaker 1: We're missing out on that. And they talk about the
Speaker 1: water cooler's conversations, and what was so important about those
Speaker 1: was not necessarily ideation or concepts or business ideas that
Speaker 1: came out of that, but trust came out of that.
Speaker 1: You and I would talk at the water cooler and
Speaker 1: share stories and that builds connection. So when people are
Speaker 1: in a remote environment, we need to bring that about.
Speaker 1: Now it's not always possible to bring people in. If
Speaker 1: you can orderly have a meetup, that's a wonderful thing,
Speaker 1: but otherwise encourage that social time, actually make that part
Speaker 1: of the agenda, because without that connection, we won't have
Speaker 1: the trust. Trust fosters growing a business together, collectively ideating,
Speaker 1: brainstorming and so forth.
Speaker 2: You know, it's interesting you lay out, you know, ideas
Speaker 2: and you talk about strong leadership and different things that
Speaker 2: a great leader needs to be doing. Can this apply
Speaker 2: to all kinds of companies? Mike and I ask that
Speaker 2: because I think when you run a small business, which
Speaker 2: we often talk about being the backbone of our economy,
Speaker 2: you know you're just getting by. So when you think
Speaker 2: about this, is this for small, mid sized companies, large
Speaker 2: capca is it for everybody? Or would you concede that
Speaker 2: it's going to be a little bit harder if you're
Speaker 2: running a two or three man operation.
Speaker 1: It's different. I don't know if it's harder. I worked
Speaker 1: with everything from the University of Chicago doing research on this,
Speaker 1: their Medical Center, which is a larger organization, down to
Speaker 1: micro enterprises. A laundry mat that had two employees that
Speaker 1: were just managing the machines and so forth. But we're
Speaker 1: wearing multiple hats. What happens in larger businesses we can
Speaker 1: have a more defined role, and in a small business
Speaker 1: we need more flexibility. At the end of the day,
Speaker 1: we want to invoke a concept called psychological ownership, and
Speaker 1: this works in businesses of the most smallest size, the
Speaker 1: micro enterprise, to the largest businesses. And psychological ownership is
Speaker 1: the feeling that we own the business even if we
Speaker 1: legally don't. So just just a quick riff on this,
Speaker 1: I own some stock and Ford not a stock tip necessarily,
Speaker 1: but when I drive buy the Ford factory, I don't
Speaker 1: feel like I own that factory, at least a part
Speaker 1: of it. I don't point to the bricks on the
Speaker 1: wall and say their mine. Conversely, I own a car
Speaker 1: and I treat that like it's my quote unquote baby. Now,
Speaker 1: the funny thing is I don't legally own it. The
Speaker 1: bank does. I'm making installments. And when it comes to
Speaker 1: our employees, we can invoke that sense of ownership without
Speaker 1: necessarily having a legal ownership. And how you do it
Speaker 1: is you give people, Autonomy, the ability to give direction
Speaker 1: and control over the outcome of the roles. So instead
Speaker 1: of micromanaging, we need to move to outcome management. Where
Speaker 1: do we want to go? And encourage our colleague to
Speaker 1: help navigate the path there. Yes, we may have best practices,
Speaker 1: but they can navigate their own path. Also the ability
Speaker 1: to personalize it, make it their own. And lastly, gain
Speaker 1: intimate knowledge about what they're doing. If we can facilitate
Speaker 1: the three elements, they will excel in big or small companies.
Speaker 2: All right, So we're listening to what you're saying. We
Speaker 2: were thinking you must have some thoughts on you know,
Speaker 2: good leaders, good companies. We're gonna throw some names at you.
Speaker 2: Elon Musk good leader.
Speaker 1: Maybe maybe not my type of leader, but you know,
Speaker 1: getting results. So there's the statistical measurements and the data
Speaker 1: doesn't lie. But there's also the humanness and all my
Speaker 1: research points too. You want to be a you want
Speaker 1: to be a human to lead humans, and the more
Speaker 1: humanness you bring to the table, the better the long
Speaker 1: term impact.
Speaker 3: What about someone like Read Hastings, who is the founder
Speaker 3: and co CEO now of Netflix. Netflix is known for
Speaker 3: having a very strange culture. I think for a lot
Speaker 3: of outsiders, Read Hastings has talked a lot about treating
Speaker 3: employees like they're on an elite professional sports team and
Speaker 3: then cutting those employees every season who don't actually make
Speaker 3: the cut. Yeah, what do you think of that?
Speaker 1: Yeah, well it does sound ruthless, But I do want
Speaker 1: to share that cutting does not mean destroying. I think
Speaker 1: when we hear that someone gets cut, that we've cut
Speaker 1: off their opportunity. But sometimes someone does not fit even
Speaker 1: my little company here, I won't have twenty employees my
Speaker 1: current organization, and we at least recently let someone go.
Speaker 1: They weren't performing well as organization, but her dream was
Speaker 1: to be a firefighter, and so we moveles on and
Speaker 1: we helped her pursue that. One year later, she's performing
Speaker 1: extremely well in her new role as a firefighter in Georgia,
Speaker 1: and she even came back to our office during one
Speaker 1: of our retreats on our own dime to help us out.
Speaker 1: So I can't speak to Read Hasting's nature of why
Speaker 1: he's terminating people. I don't know necessarily if it's as
Speaker 1: ruthless as we see. Sometimes letting someone go is the
Speaker 1: best thing you can do for them to find what
Speaker 1: they really are called to do. Yeah.
Speaker 2: No, I think that's a really really smart point and
Speaker 2: something very thoughtful that sometimes you got to just let
Speaker 2: somebody go. Having said that, I'm not going to ask
Speaker 2: you to say like, dislike, but sorry. When we look
Speaker 2: at the political life landscape, and one of the things
Speaker 2: that is definitely on global investors' minds is what happens
Speaker 2: in our November political race. So when you think about
Speaker 2: what are likely to be a race or what is
Speaker 2: likely to be a race once again between Joe Biden
Speaker 2: and Donald Trump, what are some thoughtful things about each
Speaker 2: of them, maybe as leaders that you think might be
Speaker 2: helpful to our audience or just the audience at large.
Speaker 2: And just got about a minute or so left hair
Speaker 2: a minute.
Speaker 1: Yeah, there's great influence out of concise, clear statements and goals.
Speaker 1: So the leader who speaks clearly, even though it may
Speaker 1: not speak to the desires of everyone, the clearer the presenter,
Speaker 1: the clear the speaker, usually the more we trust them. Ironically,
Speaker 1: I think the leader who also shows a humbleness has
Speaker 1: an advantage to show that they aren't perfect. So this
Speaker 1: perception of being pristine and we get nothing wrong. Ultimately
Speaker 1: people say there's something hidden behind that, and we become
Speaker 1: we question that individual. So there's this balance, and I
Speaker 1: think those leaders could represent not collectively, but independently parts
Speaker 1: of that. This curt concise way to present, but also
Speaker 1: another one maybe shows a humbleness or a humanness that's
Speaker 1: very appealing. The person who packages the combo wins.
Speaker 2: And I would just to build on that. Because your
Speaker 2: book is about great leaders building unstoppable teams, I think
Speaker 2: it's fair to extrapolate off of what you just said
Speaker 2: that to also look at candidates and their teams around
Speaker 2: them to kind of get an idea of what an
Speaker 2: administration would look like or leadership would like. That just
Speaker 2: ten to fifteen seconds. I hope I'm not putting words
Speaker 2: in your mouth.
Speaker 1: You're not, and that's absolutely right. The people that stay
Speaker 1: engaged with a leader are representative of that leader. So
Speaker 1: look at who the long term followers are, and there's
Speaker 1: a good way to judge what that leader's character is
Speaker 1: all about.
Speaker 2: Mike, this was a lot of fun. Thank you so much,
Speaker 2: really appreciate it. Mike mccalowitz joining us here, as we said,
Speaker 2: has sold companies, still owns a bunch and runs a
Speaker 2: bunch of businesses, his new book out All in, How
Speaker 2: Great Leaders Build Unstoppable Teams. Joining us on Zoom in
Speaker 2: New Jersey,