Tom Bronson (0s): Welcome to the Maximize Business Value Podcast, brought to you by Mastery Partners, where our mission is to equip business owners like you to maximize your business value and achieve the exit of your dreams, whatever that means to you. With insights gained from over a hundred business transactions, we share real world strategies, lessons, and expert advice to help you build long term sustainable value in your business.
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Amy Morin (1m 2s): Hi, I am Amy Morin, and Welcome to the Maximize Business Podcast. It's a podcast for business leaders who are passionate about building long-term sustainable value in their businesses. And today I am super, super excited to introduce you, Jonathan Reynolds. Jonathan is the CEO of Titus Talent Strategies, a company that I have known and worked with for several years now. We do happen to share some clients together. And so Jonathan, it is with all pleasure to welcome you to this podcast.
Jonathan Reynolds (1m 37s): Thank you. Amy gonna be here with you.
Amy Morin (1m 39s): Yeah. Great. We are gonna talk today about exit planning and really in the context of how does exit the human capital, Jonathan, you're a human capital specialist, really, and how does that human capital and all the levers we can pull to use that to increase not only people's lives, but the value of a business, right? Yeah. So that human capital is a big aspect of a company. So I, let's just dive right into a subject that most people, again, you know, when I'm talking to my EOS clients, I hear it all the time.
Oh, we made a bad hire, you know, and, or, or we made a bad hire and we just, we hired too quickly and we're having a hard time letting this person go. So from your perspective, Jonathan, what would you say the hidden cost of making bad hires are? Because it's not just a financial cost, there's so much more to it. So if you could speak to that, that'd be great. Yeah,
Jonathan Reynolds (2m 41s): Yeah. Well, I don't know how, it's probably not that hidden anymore these days. We've got data on everything. Yeah. We've got people right in front of us. We realize the, the cost of turnover is really expensive. Okay? So the cost of somebody leaving, the cost of recruiting and hiring is very expensive. And unless you've got this phenomenal brand where you've got people lining up at your door, where on a waiting list to join you, but that probably wouldn't be the case if you had a high turnover organization anyway. So, but yeah, the, I mean, they, some of the, the Society of Human Resource Management estimates some of between one and five times the equivalent of the salary is the cost of a bad hire.
And they say one to five, it depends on the type of role it is, the higher level the person, or if you've got somebody out, very, very client or customer facing right on the front lines, it's a bad hire out there. And reputational damage can be massive. And so you've got a really bad character, bad apple on your front lines in business development say, or account executive or sales, and the reputation they've got go after all of your ideal prospects and clients, and they're just, just not a good, not a nasty person, bad character, or slimy.
All of the kind of feelings that come up with a bad salesperson is you can say, oh, we, we have a new person now. But the reputation is so bad is very hard to claw back that, you know, you put somebody in a senior role who has a lot of teams, departments, reporting to them maybe a second in command, you get that as a bad hire is really hard to regain that ground that you were, were making to go, I'm so sorry. Ever we made a bad hire. And who wants to say, I made a bad hire? Nobody wants to admit it was them, you know?
But we all wanna take credit when it's a great hire, but when it's a bad one or it didn't work out, you, you hear it all the time, it's kinda like, we are so excited to announce that we've made this great investment and we've so and so's on our team, and we believe they're gonna make a positive impact here. And we stand 'em up in front of the whole company and we let them take the floor and it's all wonderful. And that some point in time we're like, yeah, they just weren't a good fit. They, you know, they weren't that good. You know? I'm like, well, when did they become not good? 'cause you told the whole company they're gonna be great.
So did you, did you make them bad or did they be like, where did they go wrong? And so that, yeah. The recognition that we have to look in the mirror at us and say, okay, am I really good at hiring people or am I not good at it? Yeah. And good at it. I'll tell you what makes me really good at it. All the ones that are working out, all the ones that didn't work out, we just won't talk about that. So it's like, okay, how good are you at this thing? And it's very rarely has anyone had training on hiring people? Very rarely.
Yeah. Wasn't that HR type stuff? Like, okay, but really, do HR make the decisions on hiring? No, it's the hiring manager usually want to have the decision. And so they all come up with their own special processes, this gut feel, I've got this great gut, I've got a great read on people and like, really? So would you write that read down into a process so that we can all follow it? And so it ends up being, we called gladiator hiring. I remember the old gladiator movie of Russell Crow, kinda like thumbs down, like kill. Yeah. You see it after interviews.
Like, how did the interview go? I'm like, great one, you know, like, what do you mean gonna be a great culture fit? Or nah, not a good culture fit. What do you mean? I dunno, I just can't imagine. Can you imagine them being at like the, the company party? Can you imagine them going for beers and on Friday? I just can't see them fitting with the department. You're like, so we are hiring them because they don't fit going out for cocktails. What? You know, so, so that gut feel is not a good process. Like, we like to celebrate it when we're really good at it, but it's probably just can't.
So Yeah. Yeah. There might some thoughts there.
Amy Morin (6m 35s): I see it sometimes too, like when I call it the honeymoon period is over, right? I mean, you know, Hey, we made a great hire. And you're right. You stand them up in front of the whole company and, and then, you know, at the 90 day or the six month mark or whatever it happens to be, you know, the rubber starts hitting the road and they're either a great culture fit, but maybe they're pushing a little bit harder than the culture is used to. Or, you know, may maybe they're having an I issue working with the visionary, right?
That honeymoon period. 'cause you know, if we're talking about the integrator or what we would call the integrator in an EOS operating company or a COO, somebody who's running the day-to-day operations, you know, sometimes that dynamic duo isn't really kind of syncing up together in order to move forward. So what do you, what do you see around that?
Jonathan Reynolds (7m 30s): Oh, it's, it's, and this is not a cop out answer.
Amy Morin (7m 35s): Come on Jar.
Jonathan Reynolds (7m 36s): It's good to frame it saying, we're not dealing with bots, we're dealing with people, and people are complex. Okay? People are messy. And If you think of, you know, for anyone listening here, if you think of your own life and just look back at the last 12 months, has anything changed or impacted your world? That affects how you show up, that affects your patient's level, affects your grace level with people around you. Maybe it's a, a sickness in your own physical body.
Maybe it's a sickness or something that's come up in one of your close family members, a dependent or significant other that affects how you show up psychologically and emotionally, your irritation level and patience with things. And people may just be a little bit raw and a bit more sensitive. You may have had some type of a crisis at home or whatever. Okay, that's just a few. And I could name, you know, you moved house. Yeah, you moved house in the last year. You know, you've moved across the country now, no doubt that affects how you show up.
Now, mul multiply that by all of the dynamics of everyone that you get to work with. They all have stuff going on, right? They all have things impact their world and it shows up differently for different people. Okay? Some buried down, some process it, well, some are very self-aware and some are not so self-aware, okay? So there's just to say, people are messy. There's dynamics going on, and we don't really, we don't want to carry everyone's baggage and we not, it's not that we should be carrying everybody's personal wives at the same time, but it's good to frame it and recognize that people are messy and they're complex and there are things going on in their world.
So now you bring two people together, like in a, even in a romantic relationship. And we go, wow, the, the further on in life you are like, and maybe you carried with you some broken relationships, hurts and bad experiences, that all still shows up unprocessed pain and hurt. Well, it works exactly the same in the business world. If you've had five or six different career moves or jobs and work with different dynamics of people, all of that baggage is there. Well, this manager treated me this way, this team won. I don't trust people like that.
I don't trust people who sort say these kind of things. So they're triggers. And so all of that dynamic is right there. When you bring a visionary and an integrator or a second in command, whatever name you wanna be a COO, you bring those two people together and say, we're gonna work really, really well together for the good of this organization. And as self really highly self-aware people, we say, we're doing it for the greater good of this organization. However, both of those two individuals also have personal desires, hopes and dreams and career aspirations.
Yeah. So we say we're gonna do our best to do it for the good of all of the team and People First and all that. But I also need to recognize I didn't come here as a volunteer worker. I'm also getting paid in exchange for the value creation that I bring. And so there is an emotional filter here. Like, I want to know that I'm doing something that's impactful, valuable work, and if I feel that you don't value me or you're not gonna reward me for that work, or if all of these people that I'm leading or impacting and affecting the value that I bring or can bring, or what I'm trying to prove that I can bring, that's all stuff that's going on in here in the head trash, I would say at a heart level as well, from a values and emotive.
It's like, wow. You just, just kind, when you take a step back, go, that's a lot. That's a lot going on. Yeah. You know, it's like blended, blended family dynamics all day, every day, wherever you go, right? In the business world. Yeah. And then on top, unlike family relationships, you actually have a scorecard. You actually have goals and objectives that must be hit. And if they're not hit where somebody is gonna get pointed out and go, well, you need to be held accountable for that.
Yeah. And so it's like you're looking at scorecards on a weekly and a monthly and a quarterly and annual basis. It's like, ah. Right. You know, all of the layers of dynamic, all of the goals and objectives. And then we go, who's a good leader? Who's a bad leader? And you're like, my gosh, it's like unbearable in many ways. Yeah. So doing this, you have to have somebody who's very, very committed to all understanding all of those dynamics, valuing and appreciating that they exist, and then removing the distractions, keeping everyone focused, reminding people of the greater good, reminding people of what we're trying to do, reminding people of why we're trying to do it, and then somehow tie every individual into helping them see how they fit into this big picture.
Yeah. And building up the, the sense of what I do here is purposeful, it's value valuable, and I'm getting rewarded fairly for the work I'm doing. All of those things are incredibly complex. Yeah. That has so many dynamics to it. And so to think just like hiring right person, right? C Okay. It just seems very simplistic and it's kinda, oh, I just got all these levers, right? I'm like, yeah, but they change all the time. 'cause those dynamics in people's lives are constantly evolving, so Yeah.
Amy Morin (12m 47s): Yeah. They are. So that, yeah. That brings me to our next subject matter, which kind of goes with this, and that is creating high performance teams, right? Because when we think about the human capital side of an organization, as one of those intangible capitals, we want to strengthen that human capital. And one of the ways we do that is individually, right? We treat people as individuals, hold, holding them accountable to the greater good of the organization and bringing value to that organization based on the seat that they sit in.
But now we also wanna create high performing teams, right? And so one of the things that I teach in EOS is at our annual, we do the Lynch, the pyramid, right? Based on his book, the Five Dysfunctions and Trust being that very, very bottom layer of, of the pyramid. So how do you, where do you see that companies get the biggest benefit from like really building a solid foundation on that vulnerability based trust, right?
Where, where you're willing to take down the armor and, and say whatever you need to say to get into that healthy conflict, to get into the commitment, be held accountable, and then get the results of a high performing team.
Jonathan Reynolds (14m 10s): Yeah. I I, I'll come from the angle just personally Yeah. Rather than a business strategy. But personally, I want, when you, if you're gonna have a foundation of trust, the opposite of that for me was like gossip environments where you feel like people talk about you behind your back, but won't tell you to your face. And so I think that's an ero, like a, a culture that erodes trust really quickly. It's all, it, there's something about, you know, there's a great wise book that talks about gossip, is like these tasty morsels, we want to hear them, but we don't wanna be the one who's this topic.
So I'm like, yeah, yeah. What did they do? Who said what? Why do we,
Amy Morin (14m 50s): You
Jonathan Reynolds (14m 50s): Know, or somebody goes, well, you know, you know, that's just, that's just Jonathan. He always does that. And we're like, yeah, we can all relate. So let's all, let's all sort of trauma bond together around Jonathan's craziness, his insensitivity, his whatever. Like all of the negatives that we all have negatives, right? So, but is anyone willing to tell me that that's how they experience me? Is anyone willing to say to me? And it's harder to do, I understand it's harder to do with your boss or your boss's boss. Like when you feel like my, my income, my career, everything's dependent on this person.
They're really erratic, they're not self-aware, or they're going to be personally offended to the point where they want me outta the organization because they can't handle the fact that I don't adore them a hundred percent of the time. Yeah. Like, woo. You know? So it, it's, it's hard, hard when you have a hierarchy in an organization which is there whether you like it or not, we're very flat. Well, it's still there, you know? Yeah. So I think the coming to the place where one of the things I, for me is the do unto others as you that you'd have them do unto you, I want to know how I come across if I have lettuce in my teeth, please, somebody tell me.
The worst is when you get out of a situation. So do you know that the entire time you had lettuce in your teeth and you're like, you are not a good friend? Like, yeah, I would rather you come and told me, you know? Yeah. I would rather you come up to me and whisper to me that my zipper's undone than let me stand there the entire talk. You know, like, yes, rescue me care enough about me, because that creates trust, right? So yeah, I now, I think it still is a really hard thing because I might say, I would rather you tell me, I'd rather the, the short embarrassment of you telling me right there, and I kind of pass it off and go, oops, my, my zipper was undone, or whoops, I yeah.
Lettuce in my teeth or whatever else than the regret afterwards. But not everybody, some people are like, why did you do that in front of everyone? I'm like, well, I didn't know how to handle that situation. So, or I came and told you privately and it, it was a lot, but I wanted to let you know, I care enough about you to tell you exactly what people are saying. And yeah. Right. Here's an opportunity for you to adjust and it's okay. I am committed to you. If I didn't care, I wouldn't tell you.
Yeah. I care enough to tell you. And I think if you create a culture where people know exactly where they stand. Recently, somebody, one of our senior leaders said, Hey, I saw you gave this opportunity to this other team, or this other department, this other leader, and I've been working really, really hard and I'm kind of top ranking in this area. Why? I just wanna know why did I not get this opportunity? Yeah. And I say, I'm glad you asked. And I didn't have an answer for them. I'm like, let me think about that. It wasn't, you are not getting it.
Because it was more of a, Hey, these would be a great, great team to do this. Let's give him a chance. And, and I'm glad the person came to me. He's like, I really wanna know. He wants to be a self-aware leader. And so he said, yeah, is there anything about my leadership that would prevent me from taking on more responsibility in these areas? And when I, I said, let me actually think about that one. I don't wanna be a quick response. 'cause I'm pretty sure I just didn't think about you in it. It was actually, I thought there was a great opportunity for them. And I came back and said, there actually isn't. I keep tr you know, giving you this opportunity, this opportunity, this opportunity.
You're doing a great job now that you brought it up. Nothing to do with the situation, but I do think you could improve in here and here and here. And they're like, thank you. I wanna keep going and growing in the right direction. Brilliant. You know, is, is well received. But I think that number one, self-awareness and humility to ask, how am I perceived? Is there anything I can do better? And the other is creating a culture where people feel safe because they know that people aren't talking about them, or they're not labeled as not good enough.
Yeah. Or not qualified enough. And so I think if, if somebody is put in a box, a bucket, or a box of, they will never grow beyond here in this organization. This is a tough one, but I think it's fair to tell them.
Amy Morin (18m 56s): Yeah.
Jonathan Reynolds (18m 57s): Because they need to make a choice. Otherwise, there's, there's a, there's a hope that they're gonna keep going and growing in their career, career, but actually they'll never get there because the leaders around 'em said, have deemed we will never promote you. We'll never give you another opportunity. So it's, yeah. We should be honest with them enough. Say, Hey, I just want you to know because of this, this, and this. Here's where you're captain in the organization. If you are okay with that, totally fine. We really value in this role, but we just never see you here.
Amy Morin (19m 23s): Yeah. Right. Yeah. Perfect.
Jonathan Reynolds (19m 25s): Who wants to actually say that though? It's a really tough thing to say and a tough thing to hear.
Amy Morin (19m 28s): It is. It it absolutely is. But would you, the format for doing that, right? We've got weekly one-on-ones. We've got quarterly conversations, we have, you know, annual performance reviews. Where do you see that happening, Jonathan?
Jonathan Reynolds (19m 44s): Well, I think naturally it should happen in with your direct managers and direct leaders. I think sometimes it doesn't happen as well. Yeah. And so I've had conversations like this this year actually. I'm like, okay, hey, this person, you know, ask, ask a question about somebody in the organization. I'm like, okay, is this even with our clients? I'm like, so are they this person? You said they're, they're kind of the natural person to be promoted into this role, but you don't feel good about them doing it.
So we're gonna go and hire somebody from outside. And I'm like, oh, okay. Just a matter of interest so I can understand your culture. Does that individual know that they're not being considered for this role? Yeah. And they want the role, they wanna be considered, but you're not gonna sit consider 'em because have you ever told them that? Well, no. And I'm like, okay, they're going to feel it when we start hiring somebody from outside, they're like, why not me? Yeah, for sure. And so you are gonna lose a part of their heart and trust if you aren't really clear and honest with them.
So somebody needs to be honest with them. And we have some clients who will hide a little bit and say, well, can you put them through the interview process and then disqualify them? I'm like, what? Only if they're disqualified. Like only we're not gonna lie. Like, then you're like, wow, okay. You need to have the tough conversation. Like you are, yes, we could be a part of this. I'm fine to put 'em through our interview process so they know that they had a fair chance. Only if it's fair. Yeah. And if at the end of the day, our scorecard show, this person is not going to meet the, do they get the role?
Do they want it? Do they got the right capacity to do it? And our, we have a whole scorecard around, we call head, heart briefcase. Yeah. If they are not, don't meet the, the, the standards or the, the, their qualifications for the role, then we, they're not our employees. So you are gonna have to have that conversation with 'em. As long as you agree to that, that's okay. You know? Yeah. Yeah. Back to our, our, our team. I had a conversation with one of the leaders. I'm like, so did this person know explicitly like, oh, we've had lots of conversations. I said, okay, so if I went to them right now and said, I know you've had these conversations with your manager, what are they gonna say?
And like, well, hold on a second. Well, maybe they might not say it. And I'm like, okay, that's not explicit, you know? Yeah. It's clear enough that's that you've written it down. And so I'm like, okay, this is tough. Like, I think it's a tough leadership competency to articulate and sometimes leaders just say, I can't do it. I can't have the conversation. It'll be too difficult. Yeah. Then for I can say, okay, well it's either you or me. Yeah. Somebody's gotta have the conversation, you need to do it or I will do it. Yeah.
And so those are tough. Those are really, really tough. Yeah. 'cause when you, when you have a heart and you have a yes, you care about people, we talk about People First in our organization, the lens in which we look is what's best for our people, then our partners, and then our profits in that order. Yeah. Well, they all work connected. If you don't have people, you don't have customers or partners for us. And if you don't have partners, you don't have any profits, and then you cut. That's right. How many people, you're not profitable. So they're all very connected. So I can say this's the lens in which we look, but the reality is they all interchange in symbiotic in, in every way.
So, but if you, if you're not gonna have these real raw conversations, I don't think coming back full circle here is people don't feel a sense of trust if they wonder what people are saying about them behind closed doors.
Amy Morin (23m 6s): Yeah, for sure. For sure. I agree. Part of going up that Lencioni pyramid and creating really high performing teams, right? Is this the, the fourth rung is accountability, right? And here's where I see in the companies that I coach as an EOS implementer, is that accountability. They wanna hold a whole bunch of other people accountable. People hate to be accountable themselves. That's one of the things that I see. And the second thing that I see teams struggle with is fear accountability.
Speaker 4 (23m 41s): Thank you for tuning in to the Maximize Business Value Podcast. This episode is the first of a two part release. Part two will be posted next week.
Tom Bronson (23m 52s): Thanks for joining us for another episode of the Maximize Business Value Podcast. I hope today's conversation sparked new ideas on how you can continue driving value in your business. But remember, it's not just about listening, it's about taking massive action. Visit our website mastery partners.com for more resources. Grab a copy of any of the books in the Maximize Business Value series on Amazon or via the links below.
And don't hesitate to reach out if you want to know how to apply these concepts to your business. So until next time, I'm Tom Bronson reminding you to relentlessly execute while you maximize Business Value.
