The Formula to Managing a $100M Team | Ep 4

A job description is essentially a third-party agreement. It is what you look at and your employee look at, and then you look at it and it is agreed upon terms of what is expected by them. Think about how many times you would update a job description. If it wasn't a job description, it was a set of expectations for somebody in the role. How do you create an unshakable business? I crossed a hundred million dollars in net worth by the age of 28. Now I'm growing acquisition.com into a billion dollar portfolio. In this podcast, I share the lessons I've learned in scaling big businesses and helping our portfolio companies do the same. Buckle up and let's build. What I want to talk about today is my formula for managing a hundred million dollar teams. And the reason I want to talk about this is because most people come to me and they're like, "Layla, can you tell me like the systems, the processes, like I want to know what you use to manage the teams that makes this all work?" And people are usually asking that because there's some sort of pain, which you might not be getting the results you want in your business. People might not be doing what you want them to do. And oftentimes people come to me and they're like, "What is it? What system is it? What book is it? What is it?" And you have to understand it. It's an art and a science. And what I want to talk about today is basically my formula for doing so. Because if you feel like you can't get the results you want in your business, if you feel like things are kind of painful, if you feel like you're needed for most things, and if you feel like you're constantly following up with people on items, I want to share with you my formula behind how I actually get things done with a team. So the formula I want to share with you is called the accountability formula. And I'm going to get to that in a second. But what I first want to explain is how I know a company's lacking accountability. Because a lot of people are like, "Why do you think I'm lacking accountability?" Okay, if you have people in your organization and they have jobs and you have assigned them things to do, but you're not getting the result, you lack accountability. Accountability is essentially the glue between an action and a result. And so that's what I want to talk about today is basically what is my formula for that and then how to spot in your business if you don't have it. And so if you feel that way and you feel like you're not getting the results you want in your business, it's probably because you are lacking that accountability. And I can tell you that most of the time when we have businesses come into the portfolio, when we're analyzing businesses and they're below 10 million, below 15 million. So if you're anywhere between zero to 15 million revenue, most likely, something that's going to impede your growth more than marketing, more than sales, or in the operations, or in any of the tactical stuff. It's going to be a fact you don't have accountability. Because what if you get in that marketing person? But they're not driving the result. Like I gave them a job description. I'm paying them. They happen in a performance incentive. Why are they not doing it? You bring in that sales guy, but he's not closing deals. It's like why is he not closing deals? I mean, the closed deals are brown and closed deals. And so the impediment is often accountability. And some people don't like talk about it because they're like, "Oh, that doesn't sound sexy. It's boring. I'm just going to more marketing, more sales." That's how you need more of. You need more accountability. And the reason people don't like to do that is because it requires hard conversations. And it requires being someone that's constantly encouraging your team, coaching your team, giving your team feedback. And so ultimately, what I want to start with is explaining that accountability falls on us. Like I am the reason why my team does or does not execute. Am I holding the accountable? Because if I'm not, people are always going to fall to the standard that I set. And if the standard I set is I don't hold people accountable, then why would they be held accountable? They wouldn't. And so that's what I want to preface with. So I'll give you an example, which is we had a portfolio company that came to us. And they were super successful in terms of revenue. But the operator of that business basically came and he was like, "Lala, I feel like nobody is getting anything done." He's like, "I feel like this whole business is run off my brain and this one other person's brain," which was the co-founder. And I was like, "I think it is." And so every time he brought me an issue with a coworker or an employee, he basically pointed to that person. It was like, "They're not doing their job. I should probably fire them." And I was like, "Well, I think before you fire them, we should have walked through this framework to understand if you've done everything properly to hold people accountable." And after we went through this framework that I'm going to share with you guys, he realized that he was the reason his team wasn't succeeding. And so over the last eight months, that particular operator has just implemented having accountability in the team. And his team has brought their revenue up by almost 30%. People hear that and they're like, "I can't understand how that would be true." But it's like, think about this. If you have people sitting in your company, but they're not actually doing the job that you're paying them to do because you lack accountability, they're not going to drive the results for the company and the company's not going to grow up. So the formula for accountability, accountability is the bridge between accident and the result, is really expectations plus measurement times feedback. Okay, I want to explain that. Expectations, so telling people how something should be done, plus a measurement, which is how are we going to measure if that expectation is met, times feedback, which is letting them know how they could better meet the expectation or that measurement next time. And so feedback is an important piece because the only piece of this that can be amplified. And so I want to break these down one by one so you can look at your company and say, "What am I missing right now?" And then how can I fix it? So expectations, in layman's term, expectations are, "Tell me what good looks like." What does good look like in your company? And I could get fancy with it, but that's really what it means. It's just telling someone what good in their job looks like. Often these are unsaid rules or behaviors that are happening in a company that we're not extrapolating out when we bring someone onto the team. And so what you have to understand is that when you bring someone into the team and you put them in a role and you give them a job description, that job description at a different company means something completely different. And also, that boss that they had in another company wants something completely different than you want. And so you have to reset expectations for them. It doesn't matter how experienced this person is. It doesn't matter how much years they have on you. Maybe they're older than you. They have more experience than you. It doesn't matter. You've got to set expectations from the get-go. What is the you want out of that job? What do you think good looks like in the role? And so the question is, how do we set expectations? And there's really two levels of expectations that we want to set. There's organizational expectations, which then shape the role expectations. Okay? So organizational level expectations. You've got the mission or the vision. You've got the values. You've got a brand of promise. Okay? And so what those all in compass are the expectations of the business. Right? So the entire business and everything that encompasses it. Those are expectations that you as the founder should be setting for the whole company. And so it's setting the expectation of the mission. Right? The mission is basically the expectation of the company. What does good look like for the company? The values are the expectation of how we would behave in order to meet that mission. Right? What does good look like in terms of our behavior while we're trying to reach our mission? And then a brand of promise is an expectation that is external facing. A brand promise is taking the internal pieces of the company and facing them externally so that then the customers have an expectation. The customers now know what good looks like. So it's like, I think it was Geico. It's like, you know, in 15 minutes or less or, you know, your car insurance back to you. I don't even remember what it was. Something like that. Either way, that's an expectation that now they're giving as a brand promise for that customer. And so I want you to think about your organization. Do you have a clear mission? Do you know what good looks like for the whole company? Do you have clear values? Which is does everyone understand what good looks like in terms of how we behave to reach that mission? They're essentially guardrails as you go towards the mission. That say, do we go left or do we go right? Both ways take up us up the mountain, but which one is in line with our mission? And then the brand promise is the same as the values, except for its in terms of how we deliver to the customer. You can deliver to the customer fast. You can deliver good. The question is, which one is fit for this company? So if you have those organizational expectations, then it's really easy to go and look at role expectations. Because role expectations, the expectations you have as singular role are always going to stem from the department or from the company. And so if you have those for the organization down, it's really easy to figure out what the role expectations are. The thing about like this, role expectations are essentially the measurements or the expectations of that role. So it's what does good look like in customer service? What does good look like in marketing? What does good look like in sales? Okay, well, let's take customer service. What does good look like in customer service? For a company where fast is the priority, say like McDonald's, they're probably going to say that good looks like fast service with the customers. We get them their hamburgers in two minutes or less, right? Whereas if you look at Disney, they might say that good looks like we always exceed the expectation of the customers. It might be quality, which means it doesn't matter if it takes six to ten minutes to get them the hamburger, it needs to be cooked exactly how they want it. And to their preference and to their taste. That's what a role expectation looks like. And so I'll give you a couple more examples. In different companies, if you're selling to different customers, right? On an enterprise sales team, it might be that that sale is going to take five to 11 months to close the deal. And the whole point of the sale is to help someone make a decision. It's not transaction-based. There's no speed and they're not measuring timelines. What they're measuring is the experience of the person going through the process and then maybe the deal size that you're able to land, right? They're not caring about how long it takes. Whereas in a, say, a B2B SaaS company, that's not enterprise. It's a small SMB level. What they're measuring is how fast what you're trying to close. And they're constantly figuring out how can we get to time to close shorter. Because for them, speed is more important than quality. Because they're not servicing an enterprise customer who's paying $250,000 a year. They're servicing someone who's paying maybe $2,000 to $3,000 a year. And so it's more transactional. And so if you're thinking of what does good look like, well, if you take someone who's a sales rep at an enterprise company and you put them in a transactional company for a small SMB, do you think they're going to succeed? Probably not. If they still have the habits of serving enterprise, their volume will be slow. They're probably not going to be pushing the customer enough. They're probably not going to be needing your expectations. Because you're like, hey, this business doesn't have enough cash flow just for you going to slow with these sales. And so you have to understand that that a person always needs contacts. And so the best way, if you feel like right now, you're listening to this and you're like, "Layla, I don't think I have good role expectations within my company." That's totally fine and it's super normal. What you wanna do is what a lot of people don't understand is they're like, "Oh, job descriptions, yeah, yeah." I got those down, yeah, here's five bullets. A job description is essentially a third party agreement. It is what you look at and your employee look at and then you look at it and it is agreed upon terms of what is expected by them. And so if you think about it more like that, then you think about it like as this piece of paper that you have to have to get somebody to join your company. You're constantly updating that. Think about how many times you would update a job description, if it wasn't a job description, it was a set of expectations for somebody in the role. So if you can make that frame shift, you understand that setting these expectations for people is not too difficult. If you could do the basics well, it's doing the boring work that nobody wants to do. I think the awesome people think job descriptions aren't important because they don't understand what they're for. It's so that at the end of a quarter, I can go over your job description with you and say have you met the expectations outlined here. And if you think about it like that, you're gonna write them a lot differently. So the next piece of the equation is measurement. And I could give you a fancy description of what measurement means, but it means how do we measure what good looks like? What numbers tell me this is good? So if you have a sales rep, what numbers tell you that that position is good. If you have a customer service rep, what numbers tell you that role is good? That is what measurement is. And so the question is how do we measure in a business, right? There's two things I want you to think about. Typically with any role, you want to minimum of two ways to measure. And I like to think of it, it's almost like in a business, you have leading and lagging indicators, right? Which might be onboarding and activation and then churn. Right, it might be sales and then refunds and chargebacks. Like there's always two measures. The same goes for a role. So if you think about someone, say you have a sales rep that's doing upsells. They might have two measures. The first measure might be the number of sales closed. So it might be like percentage close rate, right? The second measure that you're going to base their performance off of might be something like retention rate of client sold. Because what you have to understand is that the way that a client sold is going to be determined how long they're going to stay with the company or how long they're going to be in the program. And so is it good for the whole company to only incentivize them based off of how many sales they make? I would say probably not. I would say it's good to incentivize off of how many sales they make as long as those clients stay, right? And so a lot of people like to say, well, Leila, they don't have a complete control over this number. The reality is that nobody has complete control over any number in the business. But what they need to learn how to do is to be a teammate that cross collaborates with other departments so they can get other people on board with hitting those numbers that holistically grow the business, not just their one role or their commission check. So a good way to frame this is you have a push metric and a pull metric, right? So like for a traditional sales team, again, a way that you could do this is that oftentimes people incentivize based off percentage of sales close. And then they also do a pullback, which is they have clawbacks, which is if this person drops out of the program before month one is over or month two is over, depending on the length of the program, then they claw back their commission. So that sales rep is thinking when they're selling, they're like, okay, I want to sell this person like, wait, it's just this person, the kind of person like, I sell them like this. So they're going to drop out in the first four weeks. Am I setting expectations too high? So you're getting in the thing twice about what they're doing. The same goes for customer service. So if you incentivize someone off of first response time, that's great, you're going to respond super fast to people. But then it's like, how long after that first response time does it take you to resolve a problem? And so it might be that they're incentivized off first response time plus time to resolution. Because you can be fast to respond, but if it takes you two days to resolve a customer's problem, then it's kind of useless, they're just annoying. So you have to understand there's always a push on a pull to measurements that you have in a role. And if you have both the push and the pull metric, you're much more likely to hold someone accountable to it. So if you're looking how you can tactically implement measurement into a role, what I like to do is I like to, on their job description, at the bottom, have their KPIs. So essentially it's saying, what results are you responsible for? What KPIs are you measured upon in order to meet my expectations that have been outlined in this role? And so it's super simple. I wouldn't start with more than two. And so I think you can do that for pretty much any position like realistically today. If you feel like you don't have a accountability in your company, you could redo their job description with all the expectations you have of that role. And then redo their KPIs, make sure you have one push and one pull, and you're already halfway there. The third piece, the equation, and the last piece, and arguably the most important piece is feedback. So if you notice on the equation, feedback is the only one that can amplify this. So you always need expectations, you need measurement, but more expectations and more measurement isn't going to do much incrementally for the amount of accountability you have with that role. But feedback will, because the more feedback you give, someone, the more accountable you are holding them. And so you can almost never have too much of this feedback. Because feedback, if you look at the definition when it comes to accountability, again, we're getting it stupid, simple here. It's how far or close are you to good? That's it. How far away or how close are you to what good is in this role? That's all it is. And so you just want to be constantly telling people that. So if you've got a scale of one to 10 in terms of accountability, you'd be like, hey, Sally, I just want to let you know. In terms of accountability, in terms of expectations in this role, I feel like you're around like 8.5 right now. And here's what you could do to get to a 10. So you're constantly telling people where they're sitting in their role. And here's the thing is that people don't understand, and oftentimes we think this, which is if someone's doing really well, we don't say anything, because we're not thinking about it, because they're not a problem. But on the other side, if someone isn't doing really well, we also tend not to say anything, because we're avoiding a problem. And so oftentimes employees don't know the difference. They don't know why you're not talking to them. So you need to be the one that expresses that narrative and tells them why. So a lot of people ask like, well, where do I get feedback? Honestly, you can get feedback everywhere. I think the best utilization is weekly 101. It might be every week, it might be every other week, either way. Having 101's people, that's the opportunity that you have to tell them, this is how good you're doing. And so imagine what I like to do is I like to let people run the whole 101. And in the last few minutes, because I like to let them own that time, I then get to tell them, I get to give them the feedback. Another way that you can do this is honestly, if you have slack or you have click or you have messenger or something like that, is you can just quick shoot them a message. Hey, you did fantastic on this. Hey, I love this. But if you could do this differently next time, that would be awesome. And so if you can consistently give feedback, what you want to understand is that if you can normalize feedback in your company, they're going to have a much higher amount of accountability. If you make it normal to tell people that you would like something done a little bit differently, then it's not a big deal when the conversation comes. Or on the weekly 101, when you talk about, hey, you didn't do it, they're like, I already know, you already told me, everyone said it, right? And so you want to just think about being able to normalize, telling them how far or close to good they are. So to break it all together, if you can set the expectations, you can figure out what measurements are going to tell you if those expectations are being met. And then you can verbally and written as well, tell people how close or how far they are from meeting those expectations. That is what accountability in a company is. And so right now, I just want you to take a look at your company. If you're not getting the results you want, which piece are you missing? And then go back to that part in the video and pull from it. What can you do? If it's expectations, let's redo their job description. And let's go over it with them. Let's set a meeting where we're like, we're going to go over your job description. I want you to also give me feedback using the Zachary. If it's measurements, you're like, I don't have measurements to place my one. It's like, cool. Let's just start with the push and pull measurement. Let's present them to the team. And let's say we're going to test this out for 30 days and see if these are the right measurements. You don't have to commit forever. And then the last piece is feedback. It's like, maybe you're nervous to get feedback, which is totally normal. It's not like, oh, I'm an introvert, I'm nervous. Everyone's nervous to get feedback. Everybody. It's just like you've got to get used to. You've got to build up that muscle. And so if it's feedback, maybe it's like, I'm just going to tell them that they could do 10% better by doing this. Maybe it's not, I'm going to tell her that huge thing that's like this giant elephant in the room. But maybe today, I can at least tell her, if you did these two things differently, it would be a 10 out of 10. And so if you can put all those things together, that's how you can run a really effective team. And listen, I know that this isn't the sexy stuff, but if you start throwing in marketing, you start throwing in sales, and you start putting together all these things without actually having the glue in place, which is accountability. You're not going to get the results you want in your business. And so at the end of the day, it's the boring stuff that's going to move you forward. And that's often why people aren't able to reach their goals. People ask me all the time, they're like, "Lil, why can't I get to 10 or 15 million? Why can't I get to 20 million?" I'm like, you have no accountability. And people don't believe it because it's not saying that they can quantify. It's not like you can measure that. But if you can measure how well you're doing those three things, I guarantee you that if you start doing one better, you will see more revenue, more results, less turn on your company. (upbeat music)