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Getting employees ‘in the game of business’ by sharing numbers and profits
67 Plays8 months ago
Ryan Markewich is a business coach and a Great Game of Business certified practitioner. Having run a successful landscaping company for over 29 years, he’s passionate about teaching other owners how to create cultures of ownership, accountability, and transparency that drives performance and profits.
In this episode of the First-time Founders Podcast, Ryan shares his knowledge and skills in Open Book Management, a proven system that empowers employees to think and act like owners, and aligns them with the company's goals and vision. This is a ‘must listen’ if you want to increase your profits, have more time for yourself, and find enjoyment in the process along the way.
Interested viewers can reach Ryan via https://www.linkedin.com/in/ryan-markewich/ and Rob (https://www.linkedin.com/in/robertliddiard/) at Rob@mission-group.co.uk (or to book some free time with Rob, visit https://www.eosworldwide.com/rob-liddiard). You can buy a copy of the Great Game of Business via Amazon here: https://amzn.eu/d/5Lyo2xe.
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Transcript
Introduction and Overview
00:00:00
Speaker
Hello and welcome to the First Time Founders podcast, the show where we talk about how to start a business from nothing and grow it into something meaningful.
Who is Rob Lidyard?
00:00:08
Speaker
I'm Rob Lidyard. I was the founding CEO of a software business called Yapster that was acquired in 2022. And I'm now a professional implementer of the Entrepreneurial Operating System or EOS.
00:00:18
Speaker
which means I work with entrepreneurs and entrepreneurial or leadership teams to help them get what they want from their businesses. That's my day job, but in my spare time, I love talking about the entrepreneurial journey and particularly the first time founder experience with friends that have done that ride where we share the scars that we accumulated along the way and hopefully a few tidbits of wisdom for those coming down the entrepreneurial track behind us.
The Great Game of Business: An Introduction
00:00:42
Speaker
Today, I'm speaking with Ryan Markowitz. Ryan and I were connected after I posted to LinkedIn about this book, The Great Game of Business. I'm holding it up on screen for those that are listening just by audio. um It's a really interesting book on open book management, this idea of sharing your numbers as a leader and creating education around the financial performance of an organization, market conditions.
00:01:08
Speaker
And in the best cases, incentivising colleagues to play the game of business more effectively so that they can can can share in the proceeds of of growth where a business exceeds the base level requirements of the of the shareholders.
00:01:24
Speaker
It's a really great book. It talks a lot about how do you get the, how do you engage people? How do you make people feel motivated and rewarded critically without creating an entitlement culture?
Meet Ryan Markowitz
00:01:35
Speaker
Now, Ryan is a certified coach for the great game of business. But interestingly, he's also the founder and now part owner after I think an employee, um transitioning ownership to employees of creative roots landscaping.
00:01:49
Speaker
It's a 30-year-old landscaping business in in Ryan's um home region of of Canada. So he's ah he's an entrepreneur, he's a leader manager and a certified business coach in this very interesting approach to employee engagement and financial literacy.
Comparing EOS and The Great Game of Business
00:02:06
Speaker
I think it's interesting because although I'm hugely into the entrepreneurial operating system and EOS for aligning organizations around the vision, figuring out where we're going and how we're going to get there, executing with more discipline and accountability and building team health, EOS doesn't really have strong opinions on financial core processes. We typically leave that to client organizations, leadership teams and their their their colleagues across businesses to determine what their core processes should be. we We encourage them to document those core processes, but don't typically have an opinion on what those processes should be. And so I think there's really interesting content in great game of business and open book management that can be used.
00:02:46
Speaker
to increase the financial fortitude of an organization, make it better at planning, hitting forecasts, exceeding profit targets, and then motivating and sharing the proceeds of success with a workforce. So I fully intend on implementing some of the teachings from The Great Game of Business. I hope you get a lot from this episode.
The Origins of The Great Game of Business
00:03:06
Speaker
um I'll include the link to the book and to Ryan's social profiles in the show notes. So if you enjoy this conversation, do read the book, do reach out to him. So without further ado,
00:03:15
Speaker
My conversation with Ryan Markovich.
00:03:24
Speaker
Ryan, welcome to the First Time Founders Podcast. Thank you so much for doing this. Oh, you're welcome. I appreciate the invite. ah So today we're going to talk about the great game of business and how do you describe that whole kind of movement? I mean, you don't just describe it as as a book, right? it's You use the term before we came on the call.
00:03:43
Speaker
Yeah. So I would say that, you know, the great game of business was a business name that kind of came out of the necessity of of ah a re a failing.
00:03:55
Speaker
an effort to save ah um a very large business in the United States that became wildly successful. And um let me turn that off. Okay. ah That was, it became wildly successful and people were saying, well, what do you, you know, what do you call this? You know, and it was originally termed open book finance and then there was open book management. And then I guess what you would say is they created a business out of teaching people open book management and they called it the great game of business.
00:04:24
Speaker
you know and They didn't want to call it a game to trivialize you know doing business because business is serious. right and We all got to wear you know suits and go to Ivy League type things. but you know There's players, there's rules, and there's an outcome, win or lose. It really is probably the largest game you'll play. and so you know and and and People like to have fun and people like to win.
00:04:50
Speaker
So the great thing about business was born out of out of a bunch of people that were getting asked, well, how did you turn this large conglomerate of a company um into something so
Ryan's Journey in Business
00:05:02
Speaker
successful? And it's it's one of the, you know, the US's, I'm in Canada, but US is um like best, you know, told and untold success stories. Totally. And can you just share a little bit about how this this idea, this movement came into your life?
00:05:19
Speaker
Yeah. So I have a landscaping business. I started in 1994 and I just started with a lawnmower and a truck and I needed to, you know, pay the rent and, you know, and, uh, buy beer and you know all that other stuff and, and, uh, kind of figure out while I was figuring out what I was going to do with my life and, and, um, you know, I was knocking on doors and,
00:05:40
Speaker
yeah One thing led to another. I've always been a student of business. I'm always been very good with my hands. So it was very natural for me to to to learn ah quite rapidly the actual trade. And I ran that for about 12 years as is.
00:05:56
Speaker
you know got the company up to you know just shy of 20 people say and 1.3 or 4 million in sales, ah but that was that was at a great expense. um to so and In some degree, i don't call it I don't necessarily totally believe it was an expense because I learned from it, but you know I was tired and um and and i and I could see at that point that just wasn't scalable.
00:06:18
Speaker
So ah one day when I was ah complaining to a friend, like I did, you know, pretty much monthly, he said, you know, why don't you, I read this book. He said, I got, I found this book. I read this book. You should, you should read it. And I did. It was called the great game of business. So I read the book.
00:06:35
Speaker
And I say, wow, this just seems like the most sensible way to run a business, inclusive, transparent, you know, more hands lifting, more, and more, um, you know, educated players, um, more people focused on the actual goal, uh, knowing how to work together, you know, better huddles, better communication, you know, more focus, all that stuff. So I flew down to Springfield, Missouri, which was kind of the headquarters and the founding.
00:07:01
Speaker
you know, place of the great game of business. and I did a two-day workshop and I just said, that's that's the way I'm going to run it. And from that point on, I just, I was, I don't know, I guess maybe a little obsessed with it. Yeah. I read that book probably 20 or 30 times. Yeah. So, you know, it just, oh, there's always something to be learned in business as you know, Rob. Totally. Yeah. I mean, look, EOS came into my life in the same way I was whinging about ah my B2B software business in 2020. We sold to the hospitality industry primarily, which was completely shut down by COVID in the UK that year.
00:07:36
Speaker
I was crying into my virtual pint and a friend pointed me towards the book Traction, which introduced the entrepreneurial operating system. I think today we're going to talk a little bit about the interface between the systems, aren't we? But I hadn't come across a great game of business whilst I was still in the CEO of the App Store. It was recommended to me after we were acquired as I began to think about mobilizing a workforce and galvanizing people around a vision, as we talk about in the US world. And then I was directed to you, so I'm so excited to have this conversation. So I mean, we're going to have an unstructured conversation today. But where, where do you want to start? Is it better to talk about some of the fundamentals of the great game of business? is Do we want to dive straight into how you see it kind of playing in, in an EOS world? Or
EOS vs. The Great Game of Business
00:08:23
Speaker
I'll be led by you. You know, it's, and it's interesting, you know, I've read, ah I don't know if I read it all.
00:08:27
Speaker
everything Geno Wickman has put out, but I read Traction and how to be a how to be the great boss and you know rocket fuel. I got a lot of a lot of good information from that. There are aspects of EOS that we did implement as we went through them, as we went through the books and you know there's a one-page strategic plan. but you know that That doesn't belong to to EOS. I mean, Great Game has one. ah Vern Harner, she was scaling up, has one. the It's just one place to organize things. But I found it's an interesting, we had a conversation as ah as ah as a coach collective amongst the Great Game of Business, because I am a certified Great Game of Business coach and and the only one from the green industry on the planet yeah that that that coaches this this particular methodology.
00:09:17
Speaker
And the conversation was, was, was revolved around, you know, what makes us different? Why are we different than three hag and scaling up in e-myth mastery and, you know, EOS and everything else. And, and the the primary difference we would say is that we're driving that financial education and we're at at a high level. and We're not teaching them to be accountants or anything.
00:09:40
Speaker
But we're, we're certainly driving the financial education, which is the true language of business, in my opinion, you know, and, and, and the involvement right down to the frontline at all times, you know, and so, and I know EOS isn't just for C-suite members, but, um, that, I guess that would be the difference that I see in the two methodologies. Yeah, agree. I mean, I don't, EOS doesn't have an opinion on how you,
00:10:08
Speaker
share the proceeds of growth and how you motivate people beyond kind of leading and managing effectively, which is about understanding their their drivers being honest about your values and vision and then hoping that you get the right people that are Intrinsically motivated by that. Yeah, which is wonderful, but it's sort of it's it's it's clearly um It's important, but it's not necessarily enough on its own, which is what led me to you Okay, so let why don't you just go deep into into your world then? um How do you when you when a ah client brings you in like what broadly is the process like how do you how do you explain to them?
00:10:43
Speaker
the system and the process, like, I appreciate, we're not going to be able to consolidate everything you do in a half an hour introductory conversation. But it'd be amazing if we could just have a chat that gives people a feel for,
Implementing The Great Game of Business
00:10:54
Speaker
sure, sure. Yeah, the material whatever you know you you find it easiest to to communicate it. Yeah, absolutely. So you know, we would say, Look, if you're interested in getting in the game, um which is, you know, kind of um engaging your It's it's ah engaging and in your employees right down to the front line um by appealing to a higher level of their intellect um yeah through through education, through teaching, through talking the language of business, which is marketplace driven. you know There's the economy, the macro and the microeconomics of the economy. there's There's the balance sheet. There's a profit loss. There's a cash flow statement.
00:11:31
Speaker
you know and and and and And then there's your drive to to gather information across customers and employees and market driven information and get everybody focused on something that no different than saying if you're in a soccer game here on the football field, like that's that's your target today. That's the goal at the other end, and so to speak, right? And so at any rate, there we say there's three ways to get in the game. you know So let's say if you wanted to get in the game, well, you could you could read the book like I did.
00:12:02
Speaker
You know, I, i have and by the way, I do want to get in the game. I think it's awesome. So yeah, like, let's, let's go. Right. I've read the book. What's next? Yeah. So, you know, there's, there's, you can do it like, uh, you could read the book and just, you know, try to do it yourself. Yeah. That's fine. That's fair. Um, you could read the book and hire a coach, you know, part-time to give you a little bit of information that might take you, and you know, 10 years to get decent at it. Like it did me because I was cheap and I don't know. And.
00:12:29
Speaker
Ignorant, I guess. um Or you could you could, you know, you could read the book and you could, you know, do a bunch of YouTube videos, you can get some advice, you know, you can go down and get a soccer ball and you can jump on the field, you're you're getting a little more, or you could hire a coach.
00:12:45
Speaker
you know, someone who's been through it. So there's three different ways to kind of get in the game. um Obviously, the fastest route is to hire somebody who's or have somebody with you that has done it before. And because there's a lot of nuances, you know, when you're dealing with people. So so so similar to EOS, in that sense, you can read the book course and you can self implement or you can work with one at one of us. So let's let's assume someone would would value the coaching to accelerate their journey, save all the mistakes that they're otherwise going to make. um I mean, is it easiest to talk about, like, a landscaping business, either your business or an illustrative business? Like, where do we... No, no. I'll explain. soon I'll explain, yeah. No, I don't think it matters what business here is. We just have, you're in, we just happen to landscape. And, um you know, there's open book management, great game, and US companies that do everything from, you know,
00:13:33
Speaker
you dental work to you know legal work to you know manufacturing, you know to construction. It doesn't really matter. We're just a bunch of people doing stuff in my mind. And so ah we would say, realistically, if I was talking to you, um Rob, about this, I would say, look, there's three ways. There's three stages. One is let's design the game. And then second one is let's play the game. And the third is let's sustain the game.
00:14:01
Speaker
So the first one, how we get into that is we choose a ah design team from your organization, which will include the owner and maybe the CFO and potentially depending on the size of the company, maybe up to seven or eight.
00:14:15
Speaker
ah various voices but you know um people that care about the company and care about moving forward and we learn the basics of business. We learn the basics of financials and we start with the right leadership. There's 10 particular steps. We share the why before the how because people get more excited about how when they understand why.
00:14:36
Speaker
um we We open up the books and start teaching the numbers through some formal and informal training. Just teaching people how hard it is to make a dollar. A dollar in profit, right? Not just revenue. Yeah, exactly. So that's the thing. I come from the tech world, right? people People only just started talking about profit in my world.
00:14:56
Speaker
Yeah, yeah, exactly. So Rob, like if if you walked up to your employees when when you you know when you're in business and said to your employees, say how much how much of every dollar after everything was said and done and paid for, do you think is left at the end? What do you think the answers would have been? Yeah, I mean, they would have known that we were burning money, for sure. but Yeah, I think like I mean the VC world in particular, I think one of the reasons I'm so fascinated by what you do is this kind of this this sort of fake growth at all cost type model. Great, some very weird behaviors. I'm 41. I'm there are very many people about my age that have
00:15:39
Speaker
never worked in a business that needed to to meet the profit objective. Right. Okay. So yeah, you might be the wrong guy to ask, but I'll tell you, typically, typically well, you could take a guess. If I if i walk into a room and landscapers and I say, how much do you think's left over at the end of the day? you know I get answers from 50 or from five cents on the dollar to 60 or 80 sometimes.
00:16:01
Speaker
Totally. awesome And so, sorry, just and Brian, just to be clear, one of the things that i has got me so excited about your world is I now spend a lot of time with bootstrap founders, right? they're like They're like the cool kids now. They've gone from the sort of the geeks to the prom kings and queens. It's amazing. It's awesome.
00:16:17
Speaker
And those folks are still running businesses that tend to have incredibly high gross margins, fixed costs that once they break through the fixed costs, they're just money printing machines. And so all of us that were pursuing investor driven growth, are now looking enviously at these folks running businesses that wouldn't have been quote, sexy to venture investors, right, that seem bloody sexy when you're a burned out SaaS founder that, um yeah, that's now admiring their their cash printing potential. And so of course,
00:16:45
Speaker
you know, they have frugality and profit maximization at their core. So I'm being slightly good saying, in my business, it wasn't the driver. But that's the opportunity, right? So many of us want to make that switch. But it's not in the DNA, which is why importing a philosophy and a model like yours, I think is incredibly attractive to, to my world of of ah founders pivoting from growth, subsidised growth at all costs to more than profit.
00:17:10
Speaker
The boot stoppers are even just no different than me. I was making good money at the time, but that was me. right So when I when i when i finally you know, started to wanting to go together rather than alone. I don't know if I ever wanted, started wanting to go alone, but that's what it ended up being. Cause you couldn't scale past you doing everything. So how are you going to do that? You need engaged people. How are you going to engage them? Well, you got to talk business with the people you're in business with. That's what I say. I mean, that's, that's and and what is, what is the language of business? It's the financials. It's the, it's the marketplace. It's the realities of the marketplace.
Strategic Planning and Mini-Games
00:17:40
Speaker
So that's the the designing the game phase, right? This is yeah figuring out like what business are we in? What are the economics of it?
00:17:46
Speaker
Yeah, so I mean, I have these conversations right here with everybody in my company, Rob, I don't go to, on um you know, a Saturday brunch with other owners have the conversation and come back and try to force it down, you know, the new the new, let's get our employee motivated.
00:18:05
Speaker
style or you know trick. and I have these conversations with the employees. you know So so you know number step three is open up the book and teach the numbers. number Step four is focus on the critical number, you know identifying those one to two things on an annual basis that would most likely have the greatest effect on the company, positively and negative. If it's an opportunity, yeah that's absolutely we agree that that's important. We need to do that in order to reach our longer term strategic objectives.
00:18:35
Speaker
Makes sense. This year for us, again, it's profit for taxes and it's people development. So our, our scoreboard, our three second jumbotron that you can tell the score on by looking at it in three seconds, we'll have those two metrics beyond that. The next step, step four is act on the right drivers. Right. Sorry. Step four is focus on the critical number. Step five is act on the right drivers.
00:18:59
Speaker
So the drivers, what are the two to three key metrics? KPIs, drivers, whatever you want to call them, that best support um those those critical numbers.
00:19:11
Speaker
So we're just kind of doing some cat like cascading style scoreboards. And that's what we're teaching in this in this implementation. ah This first step design the game implementation would last about 24 weeks, 12 of which would be with the design team. And then it rolls out to the balance of the company. And then 12 of which would would be going all together.
00:19:34
Speaker
ah So then, so step you know the next step is is a really important one-on-one I overlooked for a long time was minigames. We have these short-term improvement challenges. Right. I saw that in the book. I thought that was cool. it's Yeah. you know So many people think, oh, you it's goofy. It's minigame. you know the The prizes are goofy.
00:19:54
Speaker
it's It's huge, Rob. it's It's absolutely huge. When I see my team and the games they're playing, they got a bingo one going on. they had They've had development on fire. They had organized orangutans. they had you know I've seen ones called liftoff, takeoff, ballgames. There's so many different themes that the teams come up with. They create them, so they support them. And in true great game fashion, people support what they help create.
00:20:21
Speaker
Yeah, the issue most companies have is they don't know how to engage or what to share that will get people engaged in helping create something. Okay. And so these are the steps, right? How's a part of the steps, right? So so it's so you know, I'll finish off those few steps. So step six is creating an early wind with many games. Step seven is um so follow the action and keep score. So learning how to, you know, put the proper scoreboards up.
00:20:51
Speaker
and and um And then the other one is communication, basically. So creating a huddle rhythm. I'm sure this is EOS, this is traction, or this is um you know ah scaling up. and Just when should we meet? How often should we meet? What should the agendas look like? um Most of our thing in great game is forward forecasting. We want to spend about 80% of our time talking about the future based on the information we have from the past.
00:21:18
Speaker
and then And then step 10 is high involvement planning, which is an annual kind of rinse and repeat of the entire process company-wide. So there's 10 specific steps in in state in the step one, stage one, which is design the game, play the game.
00:21:36
Speaker
you know stage, then then you move on from that to more some more deeper level stuff like creating a vision of greatness and and you know really diving into your core values and and contingency planning and more so more of the strategic longer term stuff. But first, we've got to teach people the game they're in.
00:21:54
Speaker
Well, that's what I was going to say. if Forgive me, I just get i get excited as well. I was jumping out. I shouldn't do that. People that listen will be like, Rob, just shut up. We're here to listen to this guy. Oh, no, not at all. i'm Please. i yeah Talking about step one, can we like really
Real-World Application in Landscaping
00:22:09
Speaker
bring this down to the ground? So I think a landscaping business is a great business because anybody that's listening that's an aspiring entrepreneur or an existing entrepreneur, I think even if they would suck at running that business, they can at least picture what operationally might be involved or at least think they can.
00:22:23
Speaker
So we've got a landscaping business. It's a couple of years old. I've got 10, 15 folks. Classically like difficult to recruit and and motivate generally. Employee demographic, I think that's probably fair to assume. So can you just talk talk talk me through? like where So what are some of the What are the some of the key? im I'm sure you don't want to spoon feed clients the magic numbers, because it's important that they come up with the things that they care about. But just for illustration purposes, are you able to talk through the example from your own business or an illustrative example inspired by your own business? I think everything you've said makes sense. I'd love to bring up a life of someone picturing it. You you mean of metrics that would be important to follow? Yeah, just like just imagining that, that, that, that landscape in business, all those 10 steps you've just talked to. So it'd be, I'd love for people listening to be able to picture what getting the game, getting in the game might look like for a business in, in that space. Yes, I should have, I should have done it in our, in our war room and I could have had the scoreboards in, in, in the background. Um, I would love that next time. Yeah, I could have. Yeah. Next time for sure. I can walk over with the mic and we can actually talk about them. That would be, that would be pretty powerful for people who are able to watch it. Right.
00:23:35
Speaker
And so instead of just listen, but tom yeah, you're you're right. It is very company specific. We've always been a profitable company and for various reasons, but we've never pushed for really high growth. So we've never run into cash issues. So cash, critical number has never been in our in our um you know game.
00:24:01
Speaker
but um But they tend to be subscription contracts, like whether it's domestic or consumer, people are ah ah ah ah buying a recurring service from your organization most commonly. um No, not necessarily. So for, I mean, the landscaping? Yeah, landscaping. Yeah. So we're about 65% design build. So those are one-offs and people who want enhancements in the future and and the balances maintenance.
00:24:26
Speaker
So right we only work ah we only work on custom um ah luxury residential. count yeah okay yeah And um that's just what we've been very good at, you know, it's kind of, um it was challenging and complicated.
00:24:42
Speaker
and and dramatic, probably a little bit like me. And you know, the the business usually follows the owner's personality, right? but right i'm I'm not the future of the business. i'm I'm literally almost completely out at this point. I've brought employees into ownership. And you know, I just think about that's another thing, right? i I don't think I understood my business really until I tried to sell it. Yes. And you realize like, who would you sell to? Well, you want to sell it to people who who can you can run that business.
00:25:14
Speaker
Well, how many employees and landscaping businesses do you think can, you know, do three, four, $5 million dollars a year and just take over the business and keep it at 10 to 15% net profit? Very, very, very few. Yes. I have. And so when I had, when I sold to my employees and I'm still part owner, and of course they needed to pay me out of the proceeds, I had no no worries whatsoever that the company would do well. Why? Because I had been talking and doing business with the people I was in business with for 10 years. We all spoke the same language. We all subscribed to the same notions. We all worked together to create the core values, the vision, the value the the mission and all that stuff. So it's that very inclusive and transparent um way of doing things.
00:26:07
Speaker
And so what are the drivers of that sort of business? Like, I mean, so if it's 60% project based, then you presumably got some sort of business development aspect, so you got payroll. So maybe for your listeners, quickly, I'll just give an example. Like, you know, if the critical number is to lose weight, you know, Rob, what do you think the two drivers are going to be?
00:26:27
Speaker
calories exercise, maybe? Okay, yeah, pretty simple, right? It's no different here. So if one's profit based, or for instance, we'll use our second one, we have a secondary critical number this year, that's more on the the strategic side is people development, right? Everyone's going through this hard to find people hard to keep people. Well, there's lots of reasons behind that.
00:26:47
Speaker
You know, besides you're not paying them enough for a year, you're yelling at them too much or whatever it might be. It's, there's lots of reasons behind that. And one is, you know, people are scrambling. Life isn't easy. It's expensive. And you knowll they'll drop it. They'll drop the hat if they think that they're going to get even a dollar more in the same treatment somewhere else. So, um, they, and if they don't see a career path, they don't see something else. If they're not included, if they don't feel wanted, you know, there's the the sense of loyalty will never be.
00:27:18
Speaker
the same as as it is if if people are included in things. So people development's huge on ours. We got our team involved to further our, we call it a passport, which is basically a career ladder. um It and involves skills through the various you know roles and um and things that a landscaper needs to do, but it also involves involves business education. so you know So people development's a big one.
00:27:47
Speaker
And so um that's our critical number. Then we go over to our drivers, you know our key performance indicators. you know And so if a driver is, if the critical number is people development and our driver is you know passport skills, you know it's measured by the the number of ah passport a number of events completed on the passport skills calendar.
00:28:17
Speaker
It's owned and reported by NOAA. Our target is 80% minimum. it's It's reported and talked about at our bi-monthly huddle. So we have these scoreboards that show us the one to three drivers per department that best support our critical number. Critical numbers, profit and people development.
00:28:43
Speaker
Got it. And so so for one i've got cool yeah, I'll give you one more example, please, please. Yeah. So, um, we as a company agree that, you know, building strong relationships is super important. You know, especially if, you know, in different markets, you know, in the last five years, the stronger relationship with your employee through the COVID times, the better off you are going to be.
00:29:07
Speaker
people who get the people, the companies that get the people part right are going to dominate. That's, there's, I don't think anyone would argue with that. You know, now we're in a, we're in a position where, okay, the government stopped giving free money of the COVID interest rates are up cost of livings up. And guess what, more people are coming back to the, to the, to the working world, knowing that they have to work for a living. So we don't have such an employee issue now. Right. But Our customers are also feeling the heat of that. So maybe they're not spending as much. They're waiting for elections. They're they're waiting to see if the interest rates come down to make another investment, et cetera. So, you know, so maybe in our strong relationships from one year to the next, we're focusing on a more on a customer base than we are an employee base, et cetera. But we have a calendar.
00:29:59
Speaker
that it says building relationships intentionally. And we defined who do we need to build relationships with? It's ourselves, um our team, our community, our customers, our subcontractors, our suppliers.
00:30:15
Speaker
just to make sure that everybody knows that we care and not in a gimmicky way. We just, if we don't care, we don't care, but that's not going to help us any. So we just want to make sure that whatever we're doing, we're doing it intentionally. So on one of our drivers towards people development and and profit is building relationships. So we populate a calendar of events and we we follow the action and keep score on the calendar and on the scoreboard.
00:30:43
Speaker
What are some of the examples of the benefit to the players of the game? Some of it's hard financial benefit, right? um Yeah, so we share profit. We have a profit gain sharing um called a program or initiative. So we as a company on an annual basis, we we build a budget like most companies would, and we determine a threshold. That's the minimum amount of cash the company would need to retain in profit ah before before it shares any.
00:31:17
Speaker
And will we call it, hey, we say every year we need you know a level wheelbarrow full of cash. right And that wheelbarrow can change year to year because we might need to do something different. Maybe the the owners have foregone a return on their investment for a number of years for whatever strategic reason, um or there just wasn't enough, or whatever it was. And and then maybe and so we have different size wheelbarrows from year to year slightly.
00:31:45
Speaker
And if you needed to invest a whole bunch of capital and you couldn't gain, get funding or you didn't want funding and you wanted to self fund, well, then you'd need a lot more cash. Well, there'd be less to share with the employees of that year. But at least they understand they were a part of the entire process. So there's no finger pointing at that. um Typically, you know, so we build this threshold and we have 15 levels of profit share, sorry, 15% of, I'm going to start that over.
00:32:14
Speaker
We have 10 levels of profit share in our company that range from 1.5% to 15% of each employee's gross, of their gross income.
Profit Sharing and Employee Motivation
00:32:25
Speaker
So everybody everybody who is in the company um participates in the profit sharing program from the day they start and they can earn up to 15% of their gross earnings based on the profitability of the company. So there's a part of a stake.
00:32:42
Speaker
there's you know there's the stake and There's a stake in the outcome there. um We're also big on just you know just making sure that we we are rewarding people for achievements and recognizing them, you know you know making sure that they feel loved. in In your experience, how important is the quantum of the financial incentive? Because I guess some of the kind of hyper-logical tech people that might be listening to this You could imagine that they get into this theme and they immediately start thinking like kind of investment banker type. It's just assumed that it has to be very, very aggressive, like life changing type numbers thrown around. But yeah I'm reading between the lines that that's not actually the case in your experience. Um, no, I mean, maybe it's because we're landscapers. I don't know, but I mean, I don't know anybody who doesn't want more money.
00:33:34
Speaker
right For sure. How much money that is. um and But even it goes to our culture too. We're we're not looking for the you know gregarious, um you know look, get out of my way. I need to drive a Ferrari next year type people. and and if you're and And that's fine if you are that person. But i mean the reality of it is, if you're in the landscaping business and trying to do that, it's probably not going to happen anytime soon.
00:34:00
Speaker
So, you know, and so there's so important, I guess yeah why you have to connect this to the strategy and who you are and why you're there. There is, but that, you know, and that said, but I mean, you know, it's, I think last year we paid out, uh, like a level eight, uh, no last year was level six, I think out of 15. So you look at, you know, an employee, you know, a full-time employee, a seasonal employee, you know, I think it would take home about four or $5,000. And, and that's not what that's never becomes, um,
00:34:31
Speaker
an entitlement. It doesn't carry over year to year. It's based on the reality of the business. People understand the reality of business because you're talking business with them. You're sharing that and you're getting them. And you know what? the The profit share is great. There's no question about it. There's nobody that doesn't want more money. But I'm telling you, if if you were just, and I've had this before, hey, can you teach me how to do that profit sharing? They think that's going to save their company. It won't. The profit sharing without the education will become an entitlement like that.
00:35:00
Speaker
and if you think I was going to ask you to talk about entitlement because, you know, famously the tech sector in every country has got a horrible reputation for entitlement culture now after 20 years of virtually zero interest rate, no profit, you know, profit pressure, yeah sort highly educated, snowflake type characters. I mean, um it's a character, but some of it's true. Can you talk about how or what entitlement culture looks like and how you guard against that when you're playing the game?
Creating Inclusive and Educated Business Cultures
00:35:30
Speaker
Well, I think, I think by the very nature of, of teaching people and shit and kind of discovering, you know, what the marketplace actually is, you know, um, there's lots to it, but you know, there's, there's economic cycles and, you know, there's people who can predict those. And if you're having conversations that rally around, you know, Hey, this is the reality of it. You know, look, like there is a recession here or, you know, could be a coming depression when the baby boomers finally retire here in 2030.
00:36:00
Speaker
you know, the company's gonna, you know, unless we really do and become the company that of choice on all levels, ah there's a good chance we're not going to have as much to share. So in in one way, you're kind of looking into the future into a crystal ball and saying, okay, what do we need to do? So then you're choosing your critical numbers from that look into the future, which is kind of cool, right? Because you're using as much information as you can to say, okay, what is it? you know I see that train coming, how will we dodge it? And better than that, how will we you know make out like bandits? you know and so But anyways, getting back to whether it's you know the entitlement part, and some people will always think they they deserve more. i mean i think is I think if you get employees involved in in the conversations revolving um base compensation,
00:36:55
Speaker
and and being fair following you know following the standards that your government sets out as opposed to trying to you know weasel around them. you know you pay You pay overtime after eight hours, you you know you pay double time after 12, you pay your statutory holidays, you don't try to bank hours and not pay... like it' just like if you're always doing If you're always having conversations and involving people and understanding why it is we're doing things, um I think that for the most part they understand and it doesn't become an entitlement.
00:37:25
Speaker
i I could ask you questions about this all day. I can't believe how quickly half an hour has passed. but Before I let you go, is there any firstly, I'm going to put the link to the book in the show notes. I'll put the link to your LinkedIn with your permission. Thank you. Happy for people to reach out to you. I'm assuming that some think this is cool, but don't reach out. Is there anything that that I should have asked that I haven't? Anything you'd like them to to take away and think about as a result of you introducing them to this world, perhaps before they have a conversation with you?
00:37:56
Speaker
um I think i' so i've and I've spoken to a lot of the you know the kind of theories and and thought thought process of of ah creating a business where you know you're not you can add value but you're not needed.
00:38:10
Speaker
and I don't have to go to my business for it to do well. Of course, I've been 30 years in the business. I can add value, you know, whether it's my hands or my mind or well, maybe not my back anymore, but and your good looks. Yeah. Yeah. Yeah. Well, that's questionable. Um, but yeah, so I mean, you know, creating a business where you're, where, you know, you're really thinking about, um, you know, involving people because you can't go alone.
00:38:36
Speaker
And if you end up if there's any point in your career as an owner, there were you feeling you're feeling lonely and you're you're thinking that of that old saying, it's lonely at the top, now throw that out the door. Because if it's if you're really on top, you're not lonely. And if you if you are if you are feeling that, there's a reason for it. And I really think it's because you you you're not sharing enough. You've got this fear.
00:38:59
Speaker
i mean I've had people say that so many times. well What happens if you tell them how much money you're making? so They already assume I make more than i that I'm making. you know What's going to happen? Are they going to run up and down the streets? you know So you know go together. people People support what they help create. um With every set of hands, you get a free brain. Utilize it. Read the book. Tell me if it makes any sense to you. Reach out if you want. I'm happy to have conversations with people. and and and and maybe even support someone's journey through the process. And um yeah, that's it. Amazing. Thank you so much. This has been amazing. What a great taste. I'm sure people are going to reach out. Yeah, anytime. Let's do it again.