Ep 62 - "Let's Talk Money"

0:07 Welcome back to the Head, Heart & Boots podcast. I'm Chris. And I'm Brandon. Join us as we wrestle with what it takes to transform ourselves and the businesses we lead. Man, I love this industry. Christopher. Yes, sir. Now I'm a bit gun shy with our opener because every once in a while you jump in there and steal the opener, which I've claimed. I've put a real estate sign out in the opener yard. Dude, how are you? Really good. Really good. Yes, really good. Okay. Do we narc you out? Do we explore the pause? You're like, oh, dang, dude. That was a high minute pause right there. Geez. Were you contemplating your tech purchase?

0:47 What happened there? You know, I was just thinking about this National Podcast Day. Oh, baby. Yeah. And we posted kind of a... A salty post. We kind of did. We did. We broke a barrier here, folks. We decided to finally use a version of the F word in some of our brand communication because the reality is, it's funny that I think... The restoration industry gave me a mouth like a sailor. That was one of the gifts the industry has given me. I used to be not really a cusser and I've become more of a cusser. Anyway, it's just real. It's part of who we are. It's part of the package. I'm a little nervous. Look, I think part of what you and I were thinking about with this is, look at our industry, man. Look what we do for a living.

1:27 Our fellow restorers, that's not even fair to say. You warriors out in the trenches right now, growing, building and serving our industry. Come on, man. Is the fuck we're really that audacious? Let's think about that. I mean, you and I were just talking about this. One of our commitments I feel like we've made to our community is authenticity and just keeping it real. We talk about serving the whole person. And I There's a lot of times we hide certain aspects of ourselves. We only show it to certain people. So we're trying to control people's perception of us. Yeah, all of us do it. And you and I have been mulling over this for a while. Like saying the word fuck is not something like we're proud of.

2:07 Like we cuss, you know, or like there's some image or something we're trying to create. I think it's just how you and I talk sometimes. And we've just become aware that we're careful. We're hyper conscious of what are the people going to think. And more and more, some of the leaders that we respect, we see them just kind of leaning into that authenticity piece, which means, hey, if I cuss when I'm chatting it up with one of my PMs I'm coaching or one of the owners, that's just part of how I roll. That's part of how we roll. We sometimes get colorful and salty. Yeah. Don't get us wrong. We certainly will filter a bit based on audience. That's professional. I don't want to intentionally walk into a room where I know that that kind of thing would be offensive and continue to do it.

2:49 That's just stupid and prideful. That's not what we're talking about. But it's just more like, especially in this particular platform, the reason that we do this show is to be authentic. And to really just kind of provide some just side-by-side energy. Like at the end of the day, we're just all people. We're all humans. We're just trying to look at this realistically and be honest about who we are and what we're doing, where the rough edges are, where the opportunities for maturity and growth are. I think in general, Chris and I are just trying to get more and more aligned with what's real versus presentation and staying in that zone. Do you think we already gave it too much airtime? Is our audience like, guys, get over yourself. It's just a word. Nobody cares. Yeah, probably. Yeah. Okay, so National Podcast Day, since we beat that word up a bit.

3:31 I don't even know what that really means. I don't know if there's some kind of weird following. It's a day for everything. I mean, I feel like I was seeing too that it's also National Coffee Day, which I'm in support of. Yeah, which we are always there. Let's just take a minute or 12 as you and I go. What's happening with Head, Heart, and Boots? Why are we doing this? Oh, I thought you were preparing for a moment of silence. I thought that's what you were about to say. I'm like, this is different. Right. We're going to have a moment of silence for International Coffee and Podcast Day. No, post that silence. What is Head Hard Boots about? Yeah, what's going on? I know a lot of people are listening and they're starting to get kind of the vibe in terms of what the shows are and the kind of topics that we're covering. And it's like, hey, just join in, listen. There's going to be episodes that really align with you and you're able to do something with it, execute it.

4:15 And there's going to be some stuff that maybe doesn't apply super well to you. The shoe doesn't fit. And or you're just not willing to admit it. That the shoe fits, right? We go through that too. But what are we doing? What is the mission behind Head, Heart & Boots, really? Yeah, that's good, man. I think a big part of what you and I are trying to do is to create a community of sorts. Yeah. One of the things that you and I felt over and over and over again in conversations with other industry peers and colleagues is it's so stabilizing, right? Like when you have these conversations with people and you realize I'm not alone. Right. Like the shit that I'm dealing with in my head, with my teams, with my business and trying to create vision and trying to get somewhere, create something, create something for other people to bring people along with me.

5:01 All that stuff. Like sometimes you can just feel so alone. Yeah. Yeah. as an owner, as a leader, the old phrase of it's lonely at the top is so true. It doesn't have to be, but it gets that way, right? There's a part of it that's necessary, but then I think part of it's on us to find community and to engage with others so that we can not feel so alone. Because that's when bad shit starts to happen. When we're isolating ourselves, we're afraid to go to somebody and say, Hey, here's what's going on in my business or in my marriage or anything else. Do you ever deal with this? We're afraid to do that because we're afraid we're alone. We're afraid the answer is, Oh man, you're still dealing with that? Yeah. As though we're behind the eight ball or we're afraid of feeling small and inadequate.

5:43 And we're constantly comparing ourselves to other people. We're comparing to what they're showing, what we're seeing on Facebook, Instagram, LinkedIn, presenting. So I think that's one of the things we're trying to do is just to bring people along on the journey that you and I are in. And some of that is sharing the stories of our floodlight community, of what we're seeing and hearing. And the head, heart, and boots thing is just kind of covering the whole spectrum, right? It's this belief that we're all people first. Our employees are people just like us. The work we're doing, the nuts and bolts work we're doing is important, but how we make people feel. These are some of the themes that I think we want to build community around.

6:26 And based on the feedback we're hearing from folks as well, is really addressing the whole person and saying, hey, we're all made up of talent and skill, but then we all have a heart. There's an emotional... piece to life that every single one of us deals with. There's a spiritual aspect to life that most of us don't fully understand and we're trying to figure out. But we're interacting with it somehow. Yeah. We all have some kind of family connection that we're trying to figure out and manage and So I think you and I are just wanting to bring people along with us. Yeah. We do teach. On Head Hard Boots. I mean, there's some things like, hey, we've seen this work over and over and over again. We'll talk about those things or we'll learn new things along the way.

7:06 You and I, I think that's another thing we love doing is when we pick up on something really cool or interesting, spreading that. That feels pretty gratifying. I don't know. You're there. At the end of the day, our core focus with the Head, Heart & Boots podcast really is to provide something that's extremely approachable and builds this kind of community engagement. Our goal with this is, and we've talked about this a lot, is we love our industry, man. We love it. This industry has done so much for us. It's given us so many opportunities. It's been the industry that you and I probably did some of the most core development and personal growth and professional growth that we've experienced in our careers.

7:47 I love it. I love the industry. I love the people in it. I believe to my core that this is still a superhero industry. And I think part of what we're trying to do with our podcast is remind people that they are heroes, encourage them with techniques and systems and processes that helps them live that out more consistently. But at the end of the day, we want to elevate the industry. We want to be a voice that's supportive and productive and creates value and creates a community where people are getting better. Their businesses are getting better. Their families are getting better. Their employees' lives in the sphere of influence that they manage and steward as an individual is getting better. I think that's really at the heart of what we're trying to do.

8:27 It's not a pitch fest. It's not any of those things. Come ride with us. and let's figure this thing out together. Let's build something together is really the core. One of the things I'd like to see more of as we continue to move forward is I just want to find more and more ways to get our listeners to speak to us and be sure that we're hearing from them needs, wants, visions for support that our team here at HHB can continue to provide. So Anyways, guys, it's not a pitch. We love this industry. We really believe this show gives us the freedom to just support you without having any kind of tag or thing attached to it. And really, at the end of the day, if we can build something over the next handful of years that really provides community and sense of, like you said, you're not alone.

9:11 And all of us are pushing towards this goal of just raising the industry. elevating what our employees experience, what our customers experience, what this industry provides. I think for us, that's a W. That totally is, man. We've got a topic. It's kind of an interesting one today. Pay. Boom, boom, boom. Money, money. Yeah. Where do you want to start? Well, a lot of the source of our inspiration is at any given time, we got 10, 12 one-on-one consulting clients we're working with. And it's really rad because we're seeing from the inside out businesses, restoration companies of various sizes. And it's just really interesting. We're having a convo recently with one of our larger clients who's been doing some reorganization in their teams.

9:54 Yeah. moving people into different new roles. And we got into a compensation chat because this owner had realized that they were adding some significant responsibility and authority to somebody's plate. And this person readily took it on. It was that kind of person. So you've got a real high quality, engaged A player who when you hand them a bunch more stuff, they just readily take it on. And there hadn't yet been a conversation about comp But I think what you and I just really admired and recognized in this owner, this one owner client, was they proactively came to you and me, brought it up in our session and said, hey, I want to talk about this.

10:35 My employee, this key employee, hasn't said a word, but I would like to give them a raise proactively. so that they realize how much I appreciate them and what they're taking on. So that's first thing, is I think there's a lot of wisdom in that. And so I wanted for us to unpack that a little bit because the psychology of our team and just us as humans is interesting around money. Yeah. So I think we could dive into that. And then I also thought along those same lines too, pay is just a really tricky subject. And we've seen this with our clients and we felt this internally that pay is like constantly a moving target with our team. If other people's experience is like ours, you're going to routinely have technicians, PMs, estimators, office staff that come to you and say, hey, I need a raise.

11:20 I'd like to talk about having a raise. Yeah. And what do you say? It's a tricky position. I think sometimes it can feel hard to say no. Like we don't want to say no. But then you get into this awkward negotiation. Like not now, but maybe in the future. Or then you try to tie some sort of achievement to it. Or anyway, so it's just a tricky thing. Especially in this environment, because we know it's still an employee's market right now. Sure. And so a lot of us feel desperation brain. So if we get an employee that comes to us and wants more dough, maybe our desperate urge is just give them whatever they want. Yeah. But then we kind of become an open checkbook. And then the next good thing that they do, or the next project they bring in over GP, like, hey, look at how awesome I am.

12:03 I'd like another raise. And then we just get in this never-ending cycle of, they're performing well, and so therefore I deserve more money. Instead of us attaching our compensation to concrete and specific effort, volume, achievements. I knew concrete and specific was coming. Yeah, right. So anyway, I thought maybe we open with that. I like it. Talk about how we can handle that. Is there a way we can apply some standardization? Yeah. When it comes to our compensation structures and programs in our company? For sure. And then when we have our key influencers or those players on the team that have very ambiguous roles, far-reaching roles, high-level leadership roles, how do we deal with compensation there?

12:44 Because oftentimes the assignments as we grow, the responsibilities and authority changes very quickly. Yeah. Yeah. How do we deal with that? I was actually thinking about this on the way in to the office this morning. I was thinking about how Keith Cunningham's book, The Road Less Stupid, you and I have both been kind of grinding on that. So good. Which I love, which he's kind of a, I don't even know if this is fair to say, but he feels a little bit under the radar. He's not like these other huge leadership gurus, although I think he's got quite a following of his own. Well, didn't Warren Buffett write the forward in the book or something? Or it was like Stephen Covey or some really famous person. He's definitely hung with the big hitters. But part of what he talks about, and again, it's just a great reminder, is he just refers momentarily back to this idea, what you measure is what you manage.

13:29 Okay. And it's funny because you bring up this compensation, but really there is the heart of that. What we measure is what we manage that is key to this conversation. There's kind of like two things I just want to lay over this as we have this conversation. One is being crystal clear about a scoreboard. What is it? And we have to do this at every role within the organization. What specifically do wins look like? Because what we see all the time, you and I have talked about this quite a bit, is this weird perception gap between my employee and myself in terms of performance and how we're doing.

14:15 And the whole time I'm disgruntled because I really want them to be doing why. And so I think one key layer as part of this is owners and key leaders think about compensation is first, as a team, have we established very clear measurables in terms of performance And are all of those measurables something that this individual has a direct and massively controlling impact on? Yeah. It's not, I'm dependent on XYZ in order for this number to be good, right? It's me, my performance. Because how often do people approach us after closing out a great job, making a bunch of GP, whatever, or they had a great quarter where they had some achievement in some aspect of their role.

14:59 And then when we start to investigate, there's a lot of other aspects of their role that fell by the wayside. Right. And it's like, hey, I'm a winner. Look how much I'm winning for the company. But then there's this wake of other corners cut, documentation not provided, photos not attached, aspects of the process that they just whiffed in the pursuit of this other achievement. But the net effect of the team is, well, yeah, you did what you were supposed to do. You ran your jobs in a profitable manner. Great. But then there's these other aspects that really had a negative effect on the team because you let these things slip. How often does that come up, right? It's like, I just begged 52% on my last recon project.

15:41 It's like, well, you're kind of supposed to. Maybe not 52%. Well, no. Oh, but I mean, great, you made a profitable job. Like, that's why we pay you that 60 grand base or whatever it is. And then, oh, by the way, you have a bonus incentive. And so now you're coming, you want 80K. It's just funny how without very clear standards of what running is, our team will grab on to some achievement that they feel like entitles them to more money. Right. Now totally disregarding the other things we're paying them to do that are mission critical. Because yeah, they may be just killing it on their GP, on their jobs, let's say as a recon PM. But then they're creating a wake of incomplete document packages and invoicing packages for the team to deal with as they're trying to collect on... You know what I mean?

16:27 Right, yeah. That ultimately has an even far greater negative effect. Or even how it's impacting the customer's experience. That too. We hired the cheapest sub because we can save the most margin. There you go. But then the experience is totally full of friction. So no, I think you're on point. So I think, again, just thinking about that as key leaders is, we have to start first. If we're going to create any consistency and remove this on-the-spot pressure about pay increases and wage negotiations is, let's start first by identifying the scoreboard. for each role. Really, I almost said key role. It doesn't matter. Each role, because everybody wants to know how they're doing. So I think there's that. I think there's also this rhythm of how often are you doing some kind of battle rhythm that allows you to speak into that individual's performance, right?

17:15 And so if that's a quarterly one-on-one, as an example, where it's private. It's with that individual and you're really talking about their performance, their future, their goals, the kinds of things that they want to do or move into at the organization. What function do you like the most? All that stuff. There's got to be a rhythm for that because that's where you learn the potential of some of these gaps between perspectives and you're able to close them and coach into them. I think the other thing that we need to remember too here is Eugene talks about this a lot, our friend over at Declaration. Awesome consulting firm. We absolutely love he and his team. Respect the hell out of him. He has a really, I think, unique at this point perspective on the file coordinator project coordinator role.

17:58 We won't go into the details of that role right now. But one of the things that he was talking about with us yesterday as we were unpacking this with him was this idea of he got excited when he says, and the cool thing is, I get to pay them more and I get to hire a higher caliber performer. So I think it comes back to this, there's this message of what I really appreciate about guys like Eugene is he was excited about this role and the type of tasking and responsibility because it gave him the ability as a leader to hire a higher caliber performer and pay them more because of the way their function affects the business as a whole. And so this other layer, these 30,000 foot layers, I think leaders need to think about is, what are we doing in terms of what we're asking our employees to be responsible for in their specific job titles that puts us in a position where we can't pay them?

18:53 Because we limit what they produce as a result. We limit the level of independence that they can function at. We limit the influence that they have to drive the customer experience. Or we've overstaffed because we've hired more entry-level people So we need multiple people to cover potentially a single scope of work. One of the things he was saying in particular about this coordinator role is, oftentimes, we'll hire a coordinator at $18, $20 an hour. It tends to be more of that entry mid-level admin role. Yeah, almost admin support. Almost an admin, like an assistant kind of entry-level role. And the role that they've scoped out is much more sophisticated.

19:37 And it allows you to pay that person $30 an hour and still win. Yeah. And still win big because you essentially are combining a couple admin roles into that function. And on top of that, it causes the whole operation to function more smoothly and with more consistency. customer experience, all that stuff. I mean, we talk about this a lot when referring to military small team tactics. If all of us, most of us, not all of us, that's assumptive, but a lot of us can have at least some basic understanding of how special operations teams work. Many of us, especially the males in the industry, have grown up watching action movies and watching Rambo on his own go out and slay the bad guys and do the thing. I probably just dated the hell out of myself. Anyways, the idea is this very small group of individuals who are trained extremely well, who are bought in, they're high-level players that understand the load that they're committed to carrying, and they outperform large numbers of soldiers day in and day out.

20:32 What a special forces team can do in comparison to a large leg unit standard army unit of sorts. It's unbelievable. There's just so much power in having the right people that are motivated by the right things, what they can accomplish. And I think you're right. I think we have a tendency, we look at our team's productivity. I've done this. And we see holes. We see misses in terms of what our team's getting and what our client's experiencing. And our answer is to hire more people to do the same amount of work. And that will inevitably force us into a position where you can't continue to pay those people top dollar because you can't afford it. It will have a negative impact on our P&L. Whereas when we have the right people doing the right things, you can actually compensate very aggressively, even in our industry with some of the cost controls that we fight.

21:20 It can work. Those are two theories that I think I want people to just hold on to as they're thinking about wages. Now, I think there's some details we can get into in terms of how to execute on this. But again, let's just think about that as Chris was talking about is, let's make sure A, the scoreboard's really clear. What do wins look like? What are we measuring so that we can manage it? And we can close that gap between their perception of performance and mine. And then this other piece is, where in your business do you have multiple people doing the performance of what one good person could do? And in context of that, what if you just paid the really good person almost double? Whatever the number. Right.

22:00 Could an $80,000 person replace three 36 or 40k people? It's quite possible. Possible. It really is. Especially when we start talking about some of that tasking. But now, again, what's critical to all of this, and I think some folks are hearing it, is proactivity in what we're developing in our business. Because if the goal is to not give anybody any tools, resources, training, and support, and you just want them to answer problems, you're going to be frustrated and they are not going to perform the way that you want them to. It's not always a matter of just drive. It's not that black and white. Yes, intelligent, fast on their feet, people can adapt and overcome. But we don't build businesses just purely based on chaos and adapting and overcoming.

22:43 You do it with systems and process. And that system and process has to articulate very clearly what people are doing, why they do it, and how they went doing it. Once we get that in place, it becomes a little bit easier. So that's all up here at 30,000 feet. Let's get into some of the beans and bullets. What does it look like, for instance, for us to, I guess, set up a schedule where we can remove some of the folks coming to us to ask for the raises? What can we do as leaders to be more proactive in the leadership of that conversation and or the timing of that so that the team also feels valued and rewarding? Think about this from our clients' perspective. We talk about the fact that when a great PM is really proactive, identifies a failure to meet a standard in quality of work, and proactively reaches out to that client and says, hey, client, this happened.

23:35 I don't like the result of it. Here's what I'm doing to have it fixed. I'll follow up with you when it's done. Or client comes home, sees the shoddy work and calls you as the project manager. And you did see it. And your response is, oh, I know. I saw that this afternoon. Don't worry. I'm going to do X, Y, Z. completely different impact on the relationship. A world of difference between those two interactions. Massive. Even if you walk away and go, it's okay, the client knows we knew. But that client, the trust factor, right? All the things. Same thing applies to our people. If the person comes to you to talk about wages, you've already started to lose some of the control that you have on guiding, leading, and preparing that individual.

24:16 Some trust has walked out the door because they had to come to you to ask. Some people have a handout all the time. But there's a reality that most people are doing what they feel they need to to take care of themselves because nothing in the system is giving them a different perspective. So let's just call a spade a spade. It's difficult. Yes, some people just, you can't out give a taker. But most of the time, it's just people trying to survive. And if there's no consistency in our communication, if there's no scoreboard, they don't know where they stand, they are going to come to you to protect themselves, which we would too. Well, let's face it too. I mean, part of the behind the scenes info, this whole conversation is our people, our frontline, our field operations staff are, Without a doubt, I don't think anybody would argue this.

25:03 They are the ones that are experiencing the brunt of the inflation, rising housing costs and stuff, even more so than most of us that are owners and senior executive leaders. Many of us are in a little bit different income bracket. And or we were already homeowners prior to this. We got our mortgage six years ago, 10 years ago at 2.9%. It's like our frontline staff are disproportionately affected by just the state of the economy right now. That's real. That's real. Like up here, we're in Oregon, right? It's like a single bedroom apartment in our town right now where we're recording this podcast is averaging like $1,400 a month for a one-bedroom apartment. Yeah. A family, a three-bedroom house here is upwards of $2,500 a month.

25:46 So there is this reality too. And one of the reasons why I think we brought this up is, I think we're going to have to deal with this more and more over the coming 12 to 18 months. Because while we have reasonably stable industry in the face of economic downturns and stuff like that, our people, their households are still just like any other household in terms of what their rent and food costs and all that kind of stuff is, right? That's right. Well, and all of this does end up trickling back and affecting our financials as a business, right? For sure. Fuel costs and shipping costs and all those things add up because then our business owners and key leaders have that piece in the back of their mind that's pushing up against this employee that again is approaching the conversation from, I'm just trying to survive too.

26:30 And so I think maybe what you're bringing up here that needs a little bit of attention is this idea of... Well, it's kind of like in our intro, we were talking about just people are people. And our people are people. Not every employee you have is coming in with malicious and self-centered intent. It's like, no, they're a wife, a husband, a partner, and they've got kids and responsibilities outside of this company. And they're just trying to marry up. what they do to get paid along with how do they survive? How do they make it all happen? And so I think just kind of helping us start from that versus it's the employee constantly begging and asking for something. And it's the wise business owner that struggles with how to tell them and educate them that money doesn't grow on trees.

27:12 Hey friends, hey listeners. We're doing something a little bit different with our ads. So you've been accustomed to hearing some ads with our favorite partners and companies in the industry. Now we actually have a product page, our partners page on our website. So floodlightgrp.com forward slash partners. We want to give you a quick rundown though of the people that we're partnering with and we believe in as really go-to resources in the industry. The first one is restorationerp.com, right? ERPs are an important part of our sales process, our customer development process. And why reinvent the wheel? The Restoration ERP platform is awesome. It can be customized to your business branding and all that kind of stuff. It has all the components to really create a value add for your commercial client.

27:52 Accelerate job management software. Everybody needs job management software. And we have just found Accelerate not only is their team just really great to work with. When they get ideas from customers, they throw it into the product roadmap and they implement it. They're really advocating for the contractor and trying to create a software solution that works for them. Actual insights, we recommend actual insights all the time, right? All of us as restoration operators are looking for turnkey resources and training solutions that we can take our team to the next level. And AI, when it comes to estimating and Matterport and a lot of the other essential tools we're using, They're an awesome resource and they're always coming out with new great stuff.

28:34 Yeah, super influential in the industry. Super Tech University, soft skills development training for your technicians, for your frontline personnel. Let's face it, frontline personnel are the heartbeat of our company. They are the ones that connect with our clients and create the customer experience. There's no better investment than investing in technology. the ability for those individuals to represent themselves, our clients, and our brands well. So Supertech University, surety, they essentially are cutting down this lifecycle between delivering service and then getting paid, stepping in, removing the middleman in terms of mortgage companies, refining that pipeline, making sure that there's as least friction as possible.

29:15 So we can go out and do a great job. And then our businesses don't suffer while we're waiting to get paid. The money's coming and it's coming quickly. And then the last one, guys, is Liftify. It's kind of a newer entry to the industry. They're driving Google reviews. So they're a turnkey partner that we can literally go out, provide a great customer experience, hand that name off to our trusted partner in Liftify, and have them go chase that Google review. 25% conversion rate, which is industry-wide. People tend to average 5% of the people you ask for review actually convert. Liftify bumps that to 25%. We were such a big believer. We were a customer and they've been generating all of our floodlight reviews. And in a matter of a week and a half, we're up to, I don't know, close to 15 reviews in just a short period of time.

29:58 And I think people just underestimate what happens organically with your SEO search activity when you're getting these new and active five-star reviews from our clients. And we just can't let the pedal up on that because of the effect on our businesses long-term. It's a big deal. So check it out. Check out our partners page. Do business with them. You won't regret it. We're confident in that. floodlightgrp.com forward slash partners. Thanks, guys. So I'm sort of a technician and crew chief level. You and I, our teams had a very clear outline of roles and required skill sets, certifications in some cases for people to sort of jump to the next wage level.

30:39 Yeah. Do you want to talk about that a little bit? Just kind of having that specific and concrete outline of... associated work scope and skill base with a level of wage that was very plain. It was very cut and dry. You want to talk about that? Yeah. And just in full transparency, we were really rad at that in moments and not so rad, right? It definitely felt like sometimes it was more theory than practice. And so I always like to say that because we're humans. Yeah, we did some stuff, but we certainly effed stuff up too. But So I think the idea behind this principle is, again, okay, it's going back to this public scoreboard, creating clarity around expectations and what wins look like is, let's just talk about technician development.

31:20 As an example, we talk a lot about creating career maps, like, what are the things if I were to just automatically under my own control, what do I need to do, understand and accomplish in order for me to go to the next move? And then what's the next move that's potentially in front of me? So let's talk about career progression for a mitigation or EMS technician. The idea is, and we kind of have talked about like tech one, two, three, you might have tech one, tech two, senior technician, large loss, whatever. It's irrelevant. The point is, though, is establish what competencies are required in order for them to be seen as, for example, a tech two. We have a brand new technician. Within their first 30 to 45 days, there's this training outline that you process through.

32:05 And at the end of that training outline, there's some key competencies that they're responsible for meeting. And maybe at the end of that, it's a water cert or fire cert or something like that. Right? Okay. Well, that individual knows. So let's just talk about tech one. For the first 90 days, their pay might be X. And it's that because they need to go through the training and competency to become a solid TechOne, meaning they can produce and own the level of responsibility a TechOne has in our company out in the field. And when they meet that, we automatically give them an associated pay increase. And we can actually talk to them about this in our onboarding. So tech one, you come in, let's call it 18 bucks an hour, whatever. At 90 days, we do a review.

32:46 And as long as the entire training outline... Oh, by the way, here it is. We're going to talk more about this in the coming days. As long as those are met and you've passed your certification, I don't know, I'm putting some examples out there, you immediately jump up two bucks an hour. Okay, all right. So here's how you're going to get this training done. Here's what it's going to look like. One day a week for an hour in the morning, you're going to meet with so-and-so and you're going to go over these competencies. During the week, you'll be riding shotgun with so-and-so and they're going to be talking to you about each one of these pieces as you go. And then eventually at such and such day, me as the mitigation manager, I'm going to ride with you and you're going to walk me through these tasks, these steps, right? Signatures, we get it signed off, right? So what we've done in that, and this is important, They know what they need to accomplish.

33:31 They know who on the team will help them go through that process. And they know what platforms or systems are in place to help them go through the learning to ensure they are armed with that competency. That is critical. We can't give someone a map of how to win and then remove and or not provide the direction, the people, the system that they will follow in order to earn that. So in that model, I'm the one that schedules the 90-day as the MIT manager. I'm the one that schedules the 90-day review. We've got a process in place and we have clear black and white things that have to be learned and understood before that pay increase happens.

34:13 So right at 90 days, I set the stage for this individual that I'm proactively managing you. giving you the tools and resources, and boom, baby, when we're on the same page and we hit the trigger, I'm paying you more. Tech one to tech two, right? I don't want that individual to come to me in six months and find out or want to know where their pay is headed. What I'd rather do is, hey, individual, great job meeting tech one standards. So awesome, so excited to give you your first pay raise. Man, things are headed in the right direction. Here's the next series of things that you need to accomplish in order for you to meet the tech two standards. A tech to for us means XYZ. You get assigned a vehicle, right? Here's the things that you're responsible for.

34:53 Here's the competencies, again, that you need to have mastered. Normally, it takes somebody roughly six to nine months in order for them to meet these standards, just to give you a reference. Here's who, here's what, here's how. You're going to learn and train and get these tasks accomplished. And then we're going to do a review. As you get closer to these things being checked off, we'll establish another review and we'll talk about this. Right now, I'm going to put it out at six months. As an example, whatever. Again, the whole point of this system is we've put the control of advancement in the hands of the individual. It's not a secret. It's not some knowledge that I own as the key leader that they don't have access to.

35:34 And it constantly keeps us on the same page. Your performance, your knowledge base, your experience is the same as what I'm looking for in order for me to reward you with additional pay. And I think what's interesting about a system like that, one is it's a lot of damn work for leaders. You've got to build systems. And if you've got HR leadership, if you're a GM or a business owner, you're going to have to hold your leaders accountable to following through with the system. It is a lot of work in the beginning, right? But the power in it is that you are leading when these conversations happen and what standards are being met before we even talk about it. Like there's no sense in talking about somebody that can barely do demo work on their own.

36:16 about tech to senior technician status and the pay that's associated with that. So it gives us a clear scoreboard. It allows the individual to own their progression. And then they see that we are proactively reaching out to them and establishing these opportunities to increase their pay and their value to the team. That is a different standard than us ignoring an inevitable pay increase conversation until the individual employee makes us have to have it. Because how many of us do it that way? And then when we sit down to have this conversation, it's like, I'm scared. I'm going to lose my employee if I say no. But at the end of the day, their performance is nowhere near what I need in order for that role to be successful.

36:56 And you know what? I'm getting preachy. So Keith's book, Keith Cunningham, right? This Road Less Stupid. He writes a letter. Okay, hang with me here. You must be a further X. I don't remember this letter. It's like chapter nine or something. Yeah. So he goes to a five-star golf resort, stays there for 10 days or something with his wife. Five-star. This is creme de la creme, dude. Sure. Top line. And he writes a letter when he gets home. And he starts out by basically saying, the service was horrid. The food was garbage. Basically, the entire experience was total soup circus. And he says, it's one of four things are happening. And he talks about either there's a desperate level of incompetency by your employees, or there's a lack of clarity around what it looks like to basically win or be successful at your business.

37:42 Or your leadership does not know what's happening amongst their ranks. And then the fourth, I can't remember. His whole point is, Henry Cloud, you get what you allow or what you create. And basically what he says to this is the GM of this five-star resort is, you are failing catastrophically as leaders and your guests are experiencing the brunt of that. I'm going to go back to this. When our team members are failing, it's still our fault. We are either allowing the wrong fit to remain on our team, or we have not done the proactive leadership that's required to clearly articulate for our people what winning looks like. And we have not equipped them with how to pursue winning.

38:24 And we put everybody in a bad situation, right? Because here's a situation that we've encountered personally and we've heard from many of our clients. And that is, yeah, you get this technician or PM or anybody else come to you and oftentimes they already have another offer from somebody. Many times by the time they come to ask us for money, it's because somebody else has already offered them more. Yeah. And so at that point, we're in a bind. Because oftentimes, two things are happening here. One, they're hanging their hat on one or two aspects of the job that they believe they're doing really well. Totally oblivious to all the other things like we talked about earlier that they are not doing well at. Right. Right. And yet they've already received affirmation, potentially from another company or employees that are also sort of colluding in this, we should be making more money kind of thing.

39:13 They've had that belief reinforced. Oh yeah, your GP is great on your jobs. You're really awesome. Wow, they're only paying you that much. They're getting that view of their performance reinforced by others. And then they come and sit down with us, feel like they're coming from a very strong position. Yeah. And because we weren't proactive in addressing this and meeting with them and so forth, we're faced with losing an important slot on the team. Desperation brain sets in and we figure out, man, I got to figure out a way to keep this person. When in reality, a lot of their performance is collectively, it's mediocre. Yeah. Oh, they do great on this, but then they create messes for the rest of our team in this area.

39:53 But our desperation brain clicks on. We're like, oh, I got to find a way to keep them. I can't lose another tech three right now. We're having a hard time even just getting heck ones into the system. I can't lose them. And so then we go to match the pay they're being offered by somebody else. So we're spending more money on this person now. And in the end, they're not even happy. Because what is so many employees told us before that we've taken from other people? Oh, yeah, my old boss, he countered, but he wouldn't have given me more money unless I'd asked for it. So they must not really value me very much. Right. How many of us have heard that when we've sniped someone from a different company? Yeah. Well, they obviously don't appreciate me. Well, of course, they countered because they just don't want to lose me.

40:36 But that is the net effect, right? If we're not proactive and we're just simply matching pay or we're agreeing to what their demands are, it's not actually gratifying to the employee either. No. Because like, well, yeah, they wouldn't have done anything unless I'd asked. And really, it felt like a lose-lose negotiation. You didn't really go into it with this. I can't wait to give this individual a pay increase because they're such a contributor to the team. Like, it's a total different monster when it comes to that perspective. And again, guys, at the game level, like out at the individual institutions, this conversation, the nuance with it is so varied based on the role, the type of tasking that you've developed for that individual. Because there are lots of different ways to skin a cat.

41:17 But I think it's these principles that we want to hone in on. And that is just create the scoreboard. Make it really clean and simple. Competencies required, timeframes may be required, certifications that you want to see accomplished. What does winning look like at each stage? And then what are the systems in place to ensure that that person gets talked to and reviewed? So they know with confidence, hey, every so often, I'm going to be able to have a really intentional audience with my key leader and talk about my performance. So they know there's safety and security in the fact that movement is inevitable if I do my part. That's so critical. Now, we kind of talk about stepping over dollars to pick up dimes too, where we can get caught in our mind thinking, oh my gosh, I'm already paying this person so much more.

42:05 Gosh, the industry is really driving up wages right now. How can I afford it? At the end of the day... There are teams that are compensating their players at really substantially high ways, but they're doing it purely because that team is performing. The capacity justifies it. The capacity, that's exactly right. Yeah. I think almost every scenario, if you look at it, when you've got a really top grade player, I'm just winging a number here. What is 10 or 12 grand a year in the whole scheme of things? If this person consistently performs the way we want, they always earn us another opportunity. They always protect the profits. They always protect our team and our referral relationships.

42:48 They're the kind of person on our team that has built our brand. Meaning they epitomize... What we do as a company, what we prioritize and how we win, if they're really in that zone, I would really caution people not to get too wrapped around the axle about 10 grand or a few thousand bucks. It's stupid. But what you're saying, though, I mean, this makes another point, though, which is it's just mission critical. We understand our numbers. Yeah. That's a whole other podcast, right? But that does sit underneath this whole compensation conversation is that you and I can look at somebody's P&L and we can cost justify what we're considering paying that commercial sales rep or that PM. We can break down the numbers when you say, hey, here's how this overhead cost or this cost in this role will affect the bigger picture.

43:34 And we can justify it out or we can't. But I think what we more often find is when we do know the numbers, when we've got a good, clean chart of accounts, somebody who's got their QuickBooks in order, we look at the numbers. The reality is, as long as you're getting the right quality of person, we can often afford to pay more than what the rest of the industry is telling us. Or what we just think. Or just what we think, just like what has been customary. This is where we've always started somebody. And here we got somebody asking for Y when we've always paid X. Well, when you start to break down that Y number, like, okay, well, as just a standard expectation, it's a lot to pay for this level of performance, but this person, everything is pointing at them being able to achieve at this level.

44:15 Yeah. And you can justify it out that way. But you do have to know your numbers, being willy-nilly and just, hey, I'm sure they're going to be great. Yeah. It's like, well... Let's talk about the cost of that role and how it's going to impact the rest of the picture. I think, honestly, what it boils down to, guys, any pay conversation is going to be some version affected by how good your scoreboard and how well do you know your numbers. And how committed are you? to hiring the right people and not allowing desperation brand to just plug holes. Because one of the things we've seen is sometimes B players are the ones demanding, well, you guys are offering 24 bucks an hour. I want 30. That does happen a lot. It's the B players that are demanding the dollars.

44:55 And if we let desperation brand take over, You're like, oh, geez, well, I guess the market... Well, no. That $30 is for somebody who's an A player. And they're not. Just because they're demanding it doesn't mean it's justified. So anyway, back to the original sort of what provoked this conversation initially was this person is taking over a new executive role. There's a lot of that happening right now. I mean, there's many of the people listening to this podcast, right? That's not unique right now. Lots of expansion in the industry, a lot of new executive roles being created, people being promoted up. I loved how this conversation played out with our client. This is basically what our client said. Hey, guys, I need to talk about so-and-so's compensation. I'm putting a lot more on their shoulders. As we grow and expand, I can already tell.

45:36 They're getting spread thin. They're giving a lot. And I do not want them to start thinking about money and wonder what I'm thinking about them or whatever. I want to be proactive. And so I'm thinking I want to do a pretty substantial raise. Also, when I bring them this raise, I want it to be generous enough that they're not even motivated or feel like they need to negotiate. And I thought, God, that is really wise. Because there is a psychology to this that all of us have around money and compensation. I think sometimes as owners, we can get a little detached from it if we haven't been on payroll for a long time. But when somebody gives us a raise and internally, we're like, I was hoping for more.

46:18 I needed it to be more. I feel like it should be more. As soon as the thought creeps in, all the value of the extra payroll you just committed yourself to just went out the window. Yeah. Yeah. And if you'd just been a little more generous on the generous end, instead it might have been received with a hell yeah. Yeah. Wow. Thank you with gratitude and loyalty. Yeah. What is that number? We don't know. There's no science for that necessarily. But we kind of know when we're erring on the side of generosity. And it was really clear as we were in this conversation with this guy. Like, man. They were. They were. They were. And yet, again, if you know your numbers, you know what you can put on the table.

46:59 And what the individual is providing. I think that's what's key there is this particular owner was looking at the situation and clearly had defined for themselves, what does a right hand for me look like? What's a real A-grade player for my business look like? The kind of player that helps leverage my time so that I can be spending it elsewhere in specific aspects of the business. or is there something that they do to contribute to the culture, right? They're looking at it and they're saying, look, the long-term value of this particular individual's contribution to my business outweighs a short-term, somewhat painful commitment to a pay increase of some sorts, right? And I don't even know that it's painful, but my point is that generosity isn't just being it so that you can say you're generous.

47:45 They looked at it and they said, over the next decade, of me owning, building, and developing this organization. This is the kind of person I want on my team. There's value, long-term value to having them on my roster. I'm willing to up the ante a little bit on this pay piece. And I think that's really what it boils down to. Again, it's proactivity, and it's looking out on the horizon and really trying to value or evaluate the return on your investment, less about this fiscal year and more about what does this do for my business in the long term. Now, I know some of you hear that and you go, but what if the person leaves? Okay, let's just... What if?

48:26 It's like the whole, what if I pay to train people and then they leave? And then it's like, yeah, but what's the cost of you having a bunch of people on your team that aren't properly trained? If you don't do these things, you will lose them. That's 100% guaranteed. Yes, there's a fractional opportunity that you may lose them even if you invest in them. It's worth the chance. Absolutely. It's just worth the chance. And I think most people don't walk when they see proactive leaders telling them how to win and then they're rewarding them consistently and proactively for winning. As we talk about this out loud, it seems on one level really obvious that, yeah, take care of your good people, be proactive, all that kind of stuff. But listen, we can get the blinders on. Yeah.

49:06 And we can just keep charging ahead, especially with our rider dies. Those people on the team, our right hand, our core group, maybe when it started with your company and now they're your executive leaders, we can lose track and we can take advantage. We don't think we're taking advantage. Our people can start to feel taken advantage of because as the company grows and salaries and wages rise down below and the delta between their income as a senior leader and the frontline staff starts to shrink, those thoughts can start to enter their head of, God. It's been a while since my pay has gone up and everybody else's pay in the company has been rising. My responsibility has increased. But I think sometimes our right-hand people, we just assume they're just going to stay in the trench with us and they don't have these concerns.

49:50 And the opposite is true. where we have a legacy player that's been on the team for a prolonged period of time. They're really not adapting anymore. They're not really changing with the organization. They're not really stepping into these leadership roles that are available to them. Like, hey, we've expanded. We're now here. This is what I need now. You've been a trusted person. You've been on my team a long time. Are you ready and willing to take on this kind of responsibility because there's pay associated with it? I'm not just asking for more, but I am asking for transition into a different level of responsibility. And there's a reality that we have people that will not make that change. Either they don't want the added responsibility, the stress, the weight of it, whatever.

50:32 But we have to keep their pay then. in alignment with what they're providing to the organization. So true. If they're still operating at a project manager level, but they want to be paid like a GM, keep wanting. Yeah, there's nowhere to go. Because ultimately, we're going to need those finances to pay the GM, to pay the whatever individual the appropriate level because they're taking on the responsibility and providing the value the company needs currently in the company. And that's a wrestling match. It's very difficult to do, but it's a reality. And as long as we're clear with our communication of, hey, I want to give you these new opportunities, but understand there are things required by taking those roles. I'm going to pay and reward appropriately, but there's a commitment on your part.

51:16 Just because you've been here forever doesn't mean... That's so true. It's the whole, what got us here won't get us there. And our teams have to contribute to that. And sometimes they're going to make a decision they can't or won't. And that's okay. The theme here is being proactive. Yeah. Right? We lose a lot when our people come to us to ask for more money. Yeah. We almost always gain something by us proactively coming to them and saying, Hey, I'm seeing your performance. Right. You've checked all the boxes. Yep. and you've gone above and beyond, you are taking more responsibility than we've even asked you to take in there for. I want to honor that. That's right. So, which is kind of in summary. I just took your summary. Yeah, yeah. Let's do it, man. You like this? Let's feel it, yeah. Be proactive when it comes to compensation.

51:56 We're in a really unique wage environment. Most of us haven't seen really, like in the last decade or so, there's this real serious need for labor. And it's got some of us on our heels. We don't want to be on our heels. We want to be on our toes. And honestly, who cares if it goes back to some version of what it was before? There's still competency. Still applies. Yeah, right. It's a success behavior. Let's be proactive in all things, including how we're compensating our people. I think with that too is, let's consider the way we make people feel. We talk about that in terms of service delivery, but you're delivering service to your core employees, right? So let's think about when we're going to do wage increases, how we approach it like our client we described. Instead of it turning into this sort of cold negotiation, I was really hoping for more.

52:42 What does it look like for us to look at our financials and for us to be as generous as we can in the offering? What's the value of that? How's it going to make that key employee feel? Is it going to create more loyalty? So how does it feel? And then I think also creating very, very clear standards, a roadmap for what does it look like to win here? And then with that, including the baseline standards of this is just how you stay on the team. Because I feel like there's bonusable behaviors. Yeah. There's incentivized behaviors. That's a whole above and beyond thing. But what is the above and beyond? What's the baseline that it's like, no, dude, you're supposed to do that?

53:22 Yeah. Reminds me of a Chris Rock skit. Anyway, I'm not going to say the title of it, but you're supposed to do these things. Yeah. Like if we make that really clear, like, hey, everybody on the team has to do this. This is what we pay your wage for or your salary for you doing these basic things that make the company work and make the company money. Bonuses, incentive, growth in your pay is you taking that, doing that, and moving the company forward in your way. And so I think being very specific about these are the minimum expectations. Yeah. And then these are the ways you can grow into higher and higher value for the company. Here's how it's mapped out. Yep. Love it. All right. There we go. All right, gang. Well, thanks for joining us. We'll see you on the next one. Till next time. Bye.

54:03 All right, everybody. Heath, thanks for joining us for another episode of Head, Heart, and Boots. And if you're enjoying the show, but you love this episode, please hit follow. Formerly known as subscribe, write us a review, or share this episode with a friend. Share it on LinkedIn, share it via text, whatever. It all helps. Thanks for listening.