Get your business in the Hot Seat by going to smallbusinesssucess.com/quesitons.
Shaun Buck from The Newsletter Pro steps into the Hot Seat with Clate and Scott, and asks what to do when it’s taking too long to make a necessary change with a loyal employee as they struggle to keep up with the growth of the company.
Clate and Scott answer with the three key concepts: preventing surprise with frequent courageous conversations; establishing objective, measurable goals; and highlighting previously success to add context to role changes.
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Scott Martineau: Welcome to this episode of the Small Business Success Podcast. I'm Scott Martineau.
Clate Mask: I'm Clate Mask. We're co-founders of Infusionsoft and today [00:00:30] we've got Shaun Buck on the line with us. Shaun, great to have you.
Shaun Buck: Great, Scott. Great to be here. Appreciate you inviting me.
Clate Mask: Yeah, you bet. Why don't you take just 30 seconds and tell us what the Newsletter Pro is. Your company obviously, just give the listeners a little background on who you are and what the company does.
Shaun Buck: Yeah, so we create custom print newsletters that help companies generate more referrals, decrease churn, and close more sales. We do it all via print, instead of online, and in a [00:01:00] newsletter format.
Clate Mask: All right. Very good. Give us a sense, how many employees do you guys have? When did you start? Little bit of background that way.
Shaun Buck: Yep, so we started in 2011. We have about 60 some odd employees right now and have been growing pretty rapidly over the last six years or so. Hoping to keep that up and continue that and get all the fun excitement of the growth and all the problems that come with that too.
Scott Martineau: [00:01:30] Fantastic. Well congratulations on your growth so far Shuan. In our episode today we're going to go with the hot seat format, and that means Shaun gets to ask us a really hard question. If it's easy I'll answer it. If it's hard, Clate will and so Shaun why don't we take it away. What's top of mind for you today?
Shaun Buck: Okay, so as we've grown, what's happened is we've had to adjust our management team. Our management team hasn't necessarily been able to keep up with the speed of growth. [00:02:00] That causes a lot of problems, as you guys might imagine, both in ... The team really likes the management team, right? Any time you're shifting managers, there's challenges that that creates. One of the biggest challenges for me is that I feel a lot of loyalty to these people. They've helped me grow this company and so when I'm faced with the decision that maybe this person's no longer a good fit, I struggle [00:02:30] and unfortunately that struggle sometimes takes a year before, usually mutually is what happens, but mutually we decide to part ways. I can see the pain and the damage it does to the company, and so I really have a hard time with ... What do you do with someone who's been super loyal like that and has helped you get there, but now they're just not the right fit anymore?
Clate Mask: Okay, so the recap then is you've got, and this is super common challenge as companies are growing, so thanks for sharing it Shaun, but you've got leaders [00:03:00] who are struggling to keep up with the pace of growth. You're seeing it. You're feeling it. They probably are too, but maybe it's taking too long for you to come together on the recognition of what's happening and what needs to occur. Is that right?
Shaun Buck: Correct.
Clate Mask: All right.
Scott Martineau: I think, just one call out, I think it's the-.
Clate Mask: Since this is such an easy one Scott, why don't you take it?
Scott Martineau: Shaun, this is a piece of cake problem. I don't know what your problem is.
Shaun Buck: I need to just man up, right? Is that what you're going to tell me?
Scott Martineau: [00:03:30] I think, you know we say a lot of times at Infusionsoft that you can only grow as fast as your leaders can grow, and so I think, just calling this out is really critical and to Clate's point, this is a really common thing. You called out two different aspects of this. One, you seeing the loyalty of the leader and two, the teams appreciating them. There's probably a few different angles here, but I would say the first thing is to, you've got to really stop to understand [00:04:00] that success for this leader, the idea of leaving the person in the seat for longer, is only exacerbating the problem. I think time is of the essence in terms of beginning to have the conversations.
My opinion is that when you get to this point, that's there's probably a lot of conversations that haven't been had, and so the first point of advice that I would be giving is you need to start these conversations the second that you become aware of opportunities. [00:04:30] I think the more clarity that you can create early on in those conversations the better. That helps people to understand. I think the hardest thing is when your dissatisfaction comes as a surprise to your leader and they feel like, "Hey man, it's been going great. It's been going great," and all of a sudden they're hit with this completely different story, that maybe you felt all along but it hasn't been expressed.
I don't know if that's the case. Is that the case with some of the leaders that you're dealing with now, where they're maybe the conversations have not [00:05:00] been open or do you feel like you have had the open conversations, but there's a disagreement on the performance?
Shaun Buck: I think it's hit or miss, right. Definitely in the earlier days, because this is our second go around on this challenge. I didn't have those conversations and I just wasn't a good enough leader to have them at that time. Right? I've done better this time around, but there's a lot of ... Even the ... [00:05:30] You know there's just a lot of emotion and baggage that comes with say a three year relationship with someone that you're working that closely with on a regular basis in the sense that, they have done great things. Sometimes I will brush the concerns under the rug because I'll point to their previous successes, in my mind, right?
Clate Mask: When you say, so let me just make a couple comments here. First of all, Scott's right. This is the most common thing for leaders is to not talk about [00:06:00] the progress or lack of progress with the employee the way that the leader needs to. When you say it's hit or miss, in the leader's mind if it's hit or miss, it's miss in the employee's reality because it's not clear enough to them that they're not making the progress that you need them to make. As leaders, we've got to communicate this more clearly so it's not a surprise and it's [00:06:30] understood by the employee that the objective measures of what need to get accomplished are not being hit.
Scott Martineau: Which I think that's a whole sub-category in and of itself. Right? Objective measures really is the way that you can help make this be less of just a subjective thing. You can just look at honestly, hey are we actually performing in this area the way we've been talking about needing to perform?
Clate Mask: Yeah, and [00:07:00] I appreciate your self-awareness as a leader. That's critical. When you say I didn't used to be as good at it or I used to have, I struggled with it even more, that's right. That's the good news. The bad news is as the company gets bigger and bigger, you've got to be more and more self aware. It's like the self awareness that you have today was adequate for what you needed a year ago, so you've got to like really push that awareness up and recognize if I think it's hit or miss, it's not clear enough to the individual.
I got three [00:07:30] quick thoughts for you on this. The first one Scott already shared, which is you've got to have the crucial conversations. You know these are the courageous conversations you have with an employee that's really born out of care for the employee because you're not doing them any favors by keeping them in a seat that's passing them by. That's the first thing is you've got to have those crucial conversations. If you don't build in a structure to have those conversations, it's way too easy for those conversations to not occur. You have to have a way where you [00:08:00] rhythmically and systemically are talking about what the performance looks like.
Then the second point is, you've got to have the performance grounded in an objective measure so that the employee, and this kind of goes to what Scott was saying, but so that the employee and you agree on what success looks like. I think the third thing and the key thing, in my view, is actually to understand the reality of what goes on in growth companies. I think this is actually where the [00:08:30] problems lie. The hard reality is that most people, especially in leadership roles in growth companies, they aren't going to ... The general rule is they don't make it more than two stages of growth in that leadership.
What that means is, they can grow 10 times greater in the leadership role or in that leadership function from where they were when they started. If the business is at $2 million when the leader comes on, [00:09:00] that leader being in that leadership role, kind of at the top of that function, beyond $20 million in revenue, that's pretty darn admirable. Most people can't grow more than 10x. In fact, even good people will grow one stage change, which is kind of a 3x increase in size of the business. Great people will grow two stage changes. It's a very rare leader that can grow more than two stages. If you don't have that understanding from the beginning, [00:09:30] then people have this sense of failure or the sense of you know I'm not accomplishing what I need to.
My main point for you is to, in a very fair and kind and non-threatening way, talk about the reality of business growth. It doesn't mean that you can't have an individual grow more than two stages in that leadership role, but it's a rare exception. I mean it truly is an exception, and what this really does Shaun, is it sends the message to your people loud and clear, [00:10:00] that you've got to be pushing yourself very hard to grow and stay in that leadership position if you're going to do it for more than a 10x growth run.
Number two, it helps them understand there's no shame in it. There's nothing wrong with helping the company to grow 10 times and then helping them to see look how much you've grown in that process and how much better you are taking on either a different lesser leadership role in the company, i.e., someone gets hired over you, which most people if they don't have this conversation they feel like that's the kiss [00:10:30] of death or a demotion or they should move on, but reality is, maybe not. Maybe it's perfectly fine to have somebody whose seen the next stage of growth and now becomes a mentor for this person who wants to stay with the company because they love the company's mission, yet they are self-aware that they don't have the leadership skills to drive the company at the next stage.
That was a lot of words to say, set the expectations with your people of what reality looks like. Not in a threatening way, not in a bad way, but [00:11:00] hey, if you're at $10 million today, help people understand that getting to $30 million in that leadership role is really good. Getting to $100 million, that's incredible, and if they were with you for five years, they shouldn't be hanging their heads because they don't have the experience and the leadership to keep going in that role for another run.
Shaun Buck: That's good. Yeah. I appreciate that.
Scott Martineau: I think, while I agree with [00:11:30] maybe some of the practicalities of that, I also feel like you don't want that idea to deter your determination-.
Clate Mask: To develop them.
Scott Martineau: To develop them, yeah, because I think that's one of the most amazing opportunities that I've seen as business owners growing their company, the satisfaction turns to how am I developing leaders in my company? I think I hear your point Clate, which is let's not be discouraged if somebody [00:12:00] can't grow at that rate but I still think, you know, if you think about maybe somebody not being able to grow, if you reframe that in your mind as one of your key responsibilities. If I'm looking at my team and saying my leader is not performing, I need to take responsibility for not developing that leader.
One of the ways to develop them is to provide with clarity areas where I don't feel like this person is performing. I just think that, because you want [00:12:30] to have a culture. We had one of our early advisers was like the spirit of this always bothered us. He's like, "Yeah, I have the Wells Fargo Wagon horse theory."
Clate Mask: It was the Pony Express.
Scott Martineau: The Pony Express. I figure they both used horses. I couldn't think of the other. The Pony Express, we're going to ride this horse until it's done and then I'm going to jump on a fresh ... you know it's like.
Clate Mask: Just wear people out running.
Scott Martineau: Yeah, I mean like, I'm not suggesting that that's what-.
Clate Mask: Now that's not what I meant.
Scott Martineau: ... You were implying.
Clate Mask: The key thing though is, what I [00:13:00] said is, when you help people understand what the reality looks like. If you just look at reality across companies, that's what it looks like. What that does is it invites your great people to do better. To push themselves and to say, no, I want to do this, but it also kind of helps people understand what success is and it's not failure if you go for this certain run and you realize, you know what, we need somebody else in this role.
Now the key thing that Scott's getting at is, and I think this is probably the opportunity for you, [00:13:30] we're providing some advice and guidance, but there's a real opportunity here and that is, what is it your leadership development program? Do you have a program that helps people who say, "I want to grow. I want to buck the odds. I want to prove that I can lead this team and this function of the company longer." What does that look like?
Shaun Buck: Let me ask this. If part of that is that if I send them to a lead Mastermind if it doesn't work do I, can I call you guys up again? Like if that?
Clate Mask: You get your money back right? If it didn't work?
Shaun Buck: Yeah.
Clate Mask: [00:14:00] No, that's a great point and that's a component of it, to send your people to leadership training. Do you have a progression path that's clear to them? Okay, I need to do this. If I'm a manager and I want to grow to the next level because the company now needs a director over this function, do I have the skills and capabilities to do that? You've got to make that objective so they can look at a piece of paper and go, "Oh yeah. I'm not practicing it in this way."
[00:14:30] We've been in the process of rolling this out here at Infusionsoft and having conversations with people, and it really objectifies for the individual who wants to grow, what they need to do to move to the next stage of leadership progress and continue to lead the function of the business.
Scott Martineau: It's a good exercise for you to sort of force that articulation of what you're wanting.
Shaun Buck: Yeah. [inaudible 00:14:55].
Clate Mask: Just two kind of like maybe practical tips. One [00:15:00] is the concept of just a quarterly review, and we've been doing this at Infusionsoft for a long time. This allows you to take a step out of kind of the typical weekly cycles where you don't necessarily see long term performance and take a step back and just pause and say let's have an honest assessment of how we're doing. You know I understand that maybe in some situations you feel like you're at the breaking point and it's too late, but that's a good practice that helps you to make sure that you're doing that calibration with your leaders.
[00:15:30] Then when you have somebody who's off path, we create a specific performance plan where you're kind of taking the conversation to another level of seriousness and saying, "Hey look, we need to see this type of improvement if you're going to continue to be at the company." When you do that in the spirit of, "And I believe in you, which is why we're having this conversation versus why you don't have a job here anymore," that's an exciting opportunity for people who want to grow to say, "Okay, [00:16:00] now you've clearly called it out. We're clear about the improvement I need to make, and I've got a window here where I can demonstrate to you what I'm made of."
Scott Martineau: Yeah, I think that's a great point, and I just want to make one clarification. When I say help them understand the reality of what it looks like across business, that's not in a discouraging way. The whole point is to help people see the pride and satisfaction of helping grow the company three times, a stage change. The total satisfaction they should have in helping the company grow [00:16:30] two stage changes. You know, a 10x increase. If you've got someone that's been with you for five years, and they've helped you grow from $1 million to $10 million and then they leave, you know that's a celebration. They helped you grow. Help them see how awesome that is, that it's really a sign of greatness to help lead the company through two changes.
That's the spirit of what I'm sharing about setting the reality, is not to discourage. It's to actually encourage and help people understand that's what you're up against. That's what it looks like and if you don't set that reality then people [00:17:00] just kind of think, they begin to feel entitled to being in a role because they love the company and the company loves them. That's where you end up spending a year or two untangling the issue.
Shaun Buck: Yeah, that's good. Yeah, I appreciate all that.
Clate Mask: Yeah, you bet so kind of the summary is, help people understand the reality, set clear objectives so you can detect early on and they can detect early on, whether or not they're achieving the goals, and then have the hard conversations on an ongoing [00:17:30] basis so it's not a surprise and it's not a bad thing when you're saying, "Hey, we're not hitting these measures. We need to get this to change or it might be time to take a different role or to move on." Then, the other side of it, which Scott was saying is, your responsibility is to have a system, a method for them to grow, so they can objectively look at what they need to do to be able to continue in that leadership role.
Shaun Buck: Yeah, no that makes a lot of sense and obviously some of it we're doing, and some of it we need to [00:18:00] improve upon and some of it we need to add entirely. Yeah, thank you very much.
Clate Mask: You bet.
Scott Martineau: Well Shaun thanks for taking time. Again, congratulations on the success of your business.
Shaun Buck: Thank you.
Scott Martineau: We wish you the best moving forward.
Shaun Buck: Thanks guys. Appreciate it.
Clate Mask: Okay, thanks Shaun.
Scott Martineau: All right. We're going to call that a wrap of this episode of The Small Business Success Podcast.
Clate Mask: Thanks for listening. Don't forget to rate us, write a review, and subscribe to the Podcast on iTunes. If you're looking for more ways to grow your business, check out our knowledge center [00:18:30] at learn.infusionsoft.com. That's learn.infusionsoft.com.