When Hiring Doesn't Fix Founder Dependency - Mads Singer

Hello and welcome to another episode of the podcast. Today I'm joined by Mad Singers who is a management consultant, who's consulted with over 800 clients and as an expert in people management. Today we're going to address managing staff and hiring new staff and where it does help founders get out of the day to day and where it doesn't, where it breaks. How are you doing today, Mads? I am. Meeting as always. Wonderful. Thanks for joining us. Yes, so a lot of founders will want to hire additional staff hoping that it gets them out of the day to day business and sometimes it does and sometimes it doesn't. So in your experience, where does hiring help to facilitate that specific game and where it doesn't at all? Yeah, so I will say particular for small businesses, there's a couple of key things. Even if you're a very poor manager, when you're hiring your first couple of people, as long as they're half decent, it usually helps you become way more productive, even if you're not delegating well, even if you're not doing different things. So usually the first couple of people is just a productivity win because in most businesses there's always stuff some people can do. What typically happens is after the first three or four people, management becomes way, way more important. Obviously, management with less people is obviously way more valuable than not having it, but with more people, what often happens is people start getting to five or six, seven, eight staff and yes, they're adding a little bit of extra productivity every time, but it often takes such a big toll on their time. So it's kind of like, you know, you hire for the extra, but really you get five to ten hours extra out of it because the cost to you of having them is difficult. And that is usually a good sign that if you're in that boat, it is because your management is struggling. Right. And so a lot of people in that boat and a lot of people kind of struggle to get, they don't know how to grow past that point. They don't know how to manage us within their teams that are actually responsible and gets overshed, right? And that's the difficulty and that sort of the starting point is that when you hire people for them to be as helpful for your business as possible, you want to make sure that they have clear ownership and responsibilities. So there's some of these really smart coaches out there who says, yeah, you know, when you hire people, just tell them, you know, build out a process, tell them exactly what to do and just repeat that they do that every single day. And while the process are fantastic and very important in a business, what is more important is to actually give people ownership and responsibility. Every single person listening to this podcast are where they are today because at some point someone trusted them. Even if their early journey was straight to entrepreneurship, what happened is someone paid them money and gave them some trust and said, hey, here's some money, figure out how to do this thing for me, right? For most people typically in a job where someone gives them ownership and responsibility and say, hey, we don't know how to do this. Can you go figure it out? And you go do it and you learn some stuff and you become smarter and you become more valuable to the company. So the core actually where most guidance goes wrong is that you don't just sit down, figure out how to do a process and then hire a robot to do that same process, 0101, what you always want to do when you have stuff is you want to give them ownership and responsibility. What does that look like exactly? Very simple. You tell them exactly what the end and goal of what they're doing is. So let's take something generally, like lead generation for example. Now what most people do is they hire someone that like, yeah, here's a process of how to reach out and LinkedIn. I want you to reach out to 100 people every day. And while that's a goal and it might be about a no goal, the real goal that you really want is you want to set to the employee what the core objective is. The goal is not sending 100 messages. The goal is scheduling five calls or getting certain purchases or the likes, right? So you really want to set that goal instead. And you want to say, hey, Kiran, I want you to do this. I'll reach out to LinkedIn. And my goal for you is that I get five appointments in my calendar every single month. And if you can do that, then life is great. Now when you do that, you can still have a process. You can still say, hey, this is how we normally send out 100 emails a day and they often get us to the right outcome. But the core thing with making sure they have a clear outcome of the top line objective is that that helps them add more value. Because if my only goal is to send 100 messages a day, I could literally open the phone book and send 100 messages, right? But what you want is you want the employee to be as responsible and to be as empowered as possible to try and reach that core goal. And if they don't have much influence on who their messaging or if they don't really care about the outcome besides send 100 messages, then they're generally knocked on it. You're good. There's two things that happened. One is they're not going to comment suggest how to improve your processes and many people struggle. Right? And two, they're generally not going to get ownership. Right? Like if you give me a goal and say I need five calls, like five calls scheduled every month, like I'm going to fight to get those five calls. If you tell me send a email, there are 100 messages every month, I'm going to send 100 messages and what I want to comment is, yeah. Right? So really great people ownership of the end goal that you're trying to achieve with the role or with the work that they're doing. That is the simple, that is the single most effective and important thing to do to get great output. Okay. And so where do you found a trip themselves up in doing that? I mean, one of the things I see all the time is they just don't trust their staff at all, but they've never bothered to test any of this or build a trust or do anything. And that's why they don't, that's one of the reasons why they don't issue them an outcome. Do it this way. Do it how I said and don't bother to do any of this. And I don't trust you to figure out yourself anyway. Like what are some of the barriers you seeing to them, providing that ownership that is necessary and yeah, your thoughts and experiences with that? Yeah, it's mostly in the mindset to be honest. Again, if I tell you, right, everyone started the same way. No one had become an entrepreneur, no one ever gave them ownership and responsibility. Doesn't matter. I've spoken to rooms of thousands of people. I went and I say that every single person put their hand off. Everyone had been true. Right. Now here's the thing. You have grown by being given ownership and responsibility. If you don't give that same ownership and responsibility to your team, they will never grow to become great like you. Now, unless your goal is to make sure your team doesn't grow on become great, then you want to give them ownership and responsibility. Right. Now, if you have a higher super, super crap people with no skillsets and no brain cells at all, fair, however, my experience is most people hire decent people at least. And reality is no one wakes up in the morning until a bad job. Like doesn't have, if someone doesn't know who or if someone is not delivering good results, either because they haven't had decent training, they don't have a particular skill set. They're trying to figure out all the likes. Right. So it's usually a lack somewhere. But it's like most people, particularly people, neutral job, like they want to do a good job. Like I don't know anyone who worked into work on their first week and just said, I want to do nothing. Like most humans like say they want to do a job. They want to prove themselves. They want to do cool stuff. Right. So that's the first part of the mindset, the second part of the mindset is understanding how businesses grow. So business is fundamentally like a thing. Right. In the beginning, the pyramid is often one stone, which is you the founder. But at one time, as the pyramid grows, there's more steps in the pyramid. Now, why is that relevant to a business? Well, the way you grow a business is that you look at the pyramid and you grow the hourly value in principle of every stone in the pyramid. Now for you as a founder to grow the business, you have to be doing more valuable things. If you're doing stuff that someone gets paid five bucks a 10 bucks an hour could be doing, then you have fundamentally wasting company resources. So the whole question as a founder, as a manager, is how can I do more valuable things? And the way you do more valuable things is to less of the least valuable things you're doing. So when you look at the pyramid, you can see that the pyramid is a big deal. a dual list and you're like, well, I'm doing this bunch of stuff that, you know, I could pay someone else less money than I'm worth to do. Well, that's a waste of company resources if you don't give that out. Now, reality is things take time. But in many companies, the real kicker is that sometimes it's better to even stop doing some other things that are less valuable, even if you stop doing them completely and do the more valuable things. Now, here's the question you can then use and say, well, if I have someone who's not great at it, who's figuring out how to do it, or it doesn't get done at all, what is better? Right. So that was sort of tree mindset areas that I typically play around with both my clients and the managers and my businesses and so on. Because if you get your head around those tree and you really learn to understand how to really grow a business, like I here's the thing, when people ask me, how do I get started delegating? And I'm like, well, number one, you make, you need to make a choice that you don't want to stifle your business. You don't as an individual. You don't want to be the reason why you're not making any more money. Right. Are you okay with that? Yes or no? Right. And most people want to make more money. Right. That's why they're in business in the first place. So because they want to make more money, there is no other option that could give people ownership and responsibility. Unless you want to make more money very, very slowly and yeah. Okay. So give me an example of someone they, so their understanding of delegation is here is the task and here's the process and do it. And their understanding is not here is his, his, his how we have defined success. Go figure out a way to accomplish that consistently. Are there any other clues as to I have delegated, I've delegated a task, but I have not delegated ownership and are some scenarios in which a founder can find that's like, I think I have an ownership problem specifically. Like the stuff has been delegated, but I'm still, I'm still having to catch off. I'm still having to do things. Like how can someone listening to this be like, yes, this, this appears to be an ownership issue, not a delegating of tasks issue at this point. Yeah. So so the starting point is pretty simple. When I delegate responsibility, I should be able to look at my KPI and check where people are. If I have to go into systems, if I, let's say I have someone doing customer service, if I need to go into customer service, if I need to go into a system or a tool to figure out if they're doing a good job, then I typically haven't given the right level of responsibility. Because let's say, let's say I hire you to do a customer service. Well, my goal to you would be, you know, I'm twofold, there would probably be a quantity on a quality. So one quantity made to it could be within 24 hours, every one of our customers need to have a respond to an email. Right. That's a high level goal. Second goal is every time customer had a respond, I'd at least end up a customer happiness survey, we want minimum 95% happiness responses or happy responses. Right. Now, those numbers, I can, I can put into a KPI spreadsheet and I can, you know, set up automation or get it done even by another person or whatever, but I can sit and look at those numbers. I can get a report on every Monday. I can look at that and I can say, is curing doing his job based on ownership? I've given him, yes, no. Now, does that mean I know what happens at every email? No. But I don't want to. Right. Right. So that whole thing is I've given you the ownership. I've chosen to trust you. And here's the thing, even if you fuck it up, even if you're the fault, the reason that one or two of our clients leave or something, the point is the time I free up to do other things, unless you do an absolutely horrendous job, the time I free up to do other more valuable things should always be more valuable than the cost of your fuck ups. Right. So the key thing for me is, can I look at a KPI and see if this person is successful and doing what they've been, or what we're going to do. Yes or no? Yeah. Yeah. So one of the, I love that. So one of the easiest ways to find out, does your stuff have ownership? Ask them to just tell you what they think the purpose of their task. So and you'll be terrified to find out they've no idea. They think the purpose of copywriting is copywriting. They think the purpose of development is development. They have no idea that there's some broader objective that they're trying to accomplish here. Even something as simple as like, what's the point of an account management of account management? They don't know. There's like, I, because I talk to clients that you prevent churn. And so you can find out pretty quickly. Do your stuff have any idea what the point of their jobs are? Spoiler it. No, they don't know. You didn't tell them it wasn't in the job description. It wasn't in, it wasn't anywhere. And then from there in correcting that, you have this opportunity to start asking the right question and start measuring the right question and start managing them based upon responsibilities rather than just tasks. Because if I'm assigned a task without any ownership, without any criteria for what good looks like, then yeah, I'll just do the dumbest fastest, easiest version of that task that is the least hassle. I'm not sharing the profit and the loss. Why do I care? So you kind of create a nightmare for yourself. If you don't, I mean, they would think of it in terms of surrendering control. But if you're watching the outputs and you're looking at the KPIs and you're seeing, you're measuring the outcomes, you're not really handing over anything. You'd just been like, I want you to increase your productivity and to do so in an autonomous manner. Great. Like, it's not, it's not, all right, you figure out where you're driving and I'm just going to go to sleep and I'll hope that we wake up not in a ditch. Like that's, that's not the scenario. You can absolutely put guardrails on all of this stuff. All right. So, yeah, it goes back a little bit to, so what you were saying, the point is, if you explain to people in goal of what they're doing, they're way more likely to actually understand why they're doing what they're doing. Right? Because when you're just giving a task, you're right, a lot of time people don't know why they're doing the task. But if you actually give them clear up your active and you say, hey, we need to, you know, they'll be like, okay, why am I answering emails? I don't know. Right? But if that goal, that goal often explains a lot of why they're doing what they're doing. Obviously, as a leader, you want to explain that to them as well. But the goals alone, if they're good and if they're sort of in goal, those goals will help with understanding, you know, why they're doing what they're doing as well. Yeah. Yeah. Client working with recently does a lot of content and they're stuff we're all talking about views, clicks, click through rates and signups and not revenue, which can, which absolutely is tracks. Like this affiliate link deals and the revenue is the only point. Everything else doesn't matter. And the number is right there. It's super available. But that has bled into every single process is written with the wrong assumption in mind, which is what the point of the, oh, we need to create consistent content. That's not the point of your job at all. That leads to a 0% increase in revenue. So the clarity of that and clarifying that and then organizing around that very, very, very high return on efforts implementation. Okay. So when you look at a lot of social media and many companies, that is suffering from that. It is suffering from my, oh, let's create one Facebook post today. Let's create tree linked impose a week. It's just a number with no specific metric and no specific end goal, right? And that's one of the reasons why most people get very little out of social media and general. Yeah. One of the easiest gigs you can get, do social media management for someone who has no idea what the point of that is and just thinks brand awareness is something that, yeah, will just magically lead to clients or something like that. The other really easy gig is get an offer, be an operations manager for a founder who doesn't know what that is and just just be, just be a very overpaid project manager. It's another very common good gig if you can get it. Okay. So let's say a founder genuinely wants to get out of the day to day, they have 7, 10, 15 staff or something at this point, like they've done the hiring thing. They're still not out of the day to day. What has to be true inside the business for them to finally extract themselves out of the day to day? So one of the ways I asked from us and I look at how they're growing is if there are people around them that's getting better at them, then them at their specialty. So if you have a CEO who have a marketing person, a sales person, an operation person, if they stay as to, if they're still the best person at marketing, if they're still the best to sale, if they're still the best at operation, then that is a clear view for me that they're not delegating. Because what happens is to where you stay the best at everything is you make all the decisions. Right. So you don't give out ownership and responsibility because when you don't do that, what happens very simply is that you end up making all the decisions, you end up as a bottleneck fixing all the problems. And therefore you be growing more than the team that you're fixing those problems for. My favorite method, so whenever I manage this in the business, I typically tell them as new manager. I say, "Nine months from now, I'm going to give you a one week holiday or two week holiday." The goal is that when you go away, your team can run everything without you. If your team ever needs to call you, if they ever need to message you, there's a problem. The goal for you is to make a company that can operate without your involvement. This obviously has a CEO level that's even more critical. I typically, personally, I typically try to get a minimum of three months a year where I just go traveling and I have minimum check-ins and so on. My goal to my executive team is bigger than when I left. That's sort of like, obviously we have different goals in different companies. But the number one thing for me personally is that companies keep growing while I'm away, which means we get more customers, we get more profitable when I'm not there. Because then I know that when I come back, I can light fire and things. I can, you know, double-focus towards particular projects or something that adds more value. But the point is that the business can run without me. And if you have a business that can run without you today, it's typically because it's not really structured as a solar business. Yes. Yes. Okay. So let's say I run an agency. I am exactly what you've just described. I am the go-to for account management, for strategy, probably not project management at this point, but definitely sales and definitely marketing. I haven't taken a holiday in two years. The idea of taking two weeks off, let alone a month off just seems ridiculous. If I have a child, I don't know. I need magic basically to keep the company alive. During that transition period, how do I go from A to B? How do I go from not being out of take a holiday at all no matter what to being out of take a holiday? What do you see as being required for that transformation? So let's start with the company. A lot of people don't get niching down right. So many most people think niching down is about selecting a business area. But it's not. Neshing down is fundamentally figuring out what is to one process that you can repeat over and over again and sell. So I work with a lot of people in SEO. And they want to do SEO for all sorts of people or many creative marketing agencies, for example. Like when you talk to a marketing agency and I say, yeah, we can do SEO, we can do PPC, we can do social media, we can do all this stuff. One, I know none of it will be good. And two, I know that margins are going to be racial thing. Yes. How do I know that? Because it's not a scalable, repeatable process. Yes. When you look at really successful companies, when you look at Microsoft, when you look at Coca-Cola, when you look at McDonald's, they figure out the one process, right? It doesn't mean it's one thing. Like yes, Coca-Cola for many years had one product. And because they just niche down and focus down on that, they're winning big time. Now, over time, now they sell other drinks and stuff as well, right? But it works. Same thing when you're looking at McDonald's, niching down doesn't mean you only have one type of burger, but it means you have a scalable, repeatable process that runs all 101, all again, and it can easily be executed by the same people, right? So that's kind of the setup. So where many, so for example, marketing agencies where they go into a trap is they say, oh yeah, we can do paperclip, for example. But the problem is they haven't figured out who they do it for. And it's not a scalable, repeatable process. So when you as a founder is needed every time a new client come in, that tells me that you haven't figured out the scalable, repeatable process that you're doing as an agency. And instead, what you do is you do custom work for every single client. And unless you're charging thousands of dollars per client, that is very well-eat a good strategy. The right strategy is to build out your repeatable process. And sometimes, and this is what most smaller business struggle with is sometimes that means saying no to potential customers. Right. So sometimes what that means is saying, hey, customer, I see you won't paperclip advertisement. However, we only do paperclip advertisement for e-commerce businesses who run and Shopify. Now, the reason why we do that is because we have a team that's experts at this and they can do it all 101 again. Now, if we get a client that is in a total different niche and doing some totally different, we need our founder to come in and figure out how to do this thing and nothing in the businesses worth that. Right. So many people think they will make less money doing this, but it is a complete opposite. When you need down at a process level, what happens is one, you can deliver more, so you can deliver more things faster because it's one process. You can take the one process and you can break it down into pieces. Right. So you can deliver more. You can deliver cheaper because you can get someone in to run a part of that process. It's very easy to train because it's a smaller skill set. So you can get someone in to run a part of the thing, train them up in a matter of weeks. Right. Now, if you're trying to train replacement for yourself, it's going to take three or four years because you have a ton of experience. Right. But when you break it out, you have a simple process. You break it down and it's the same type of customer, the same type of business, 101, 101 again, where you execute the same process. Then what happens is you can do it faster, you can do it cheaper. And most importantly, you can deliver better results because you know exactly what you're doing. Right. So instead of having make it result all the time, you know exactly what you're doing. So when you can do things faster, cheaper and get better result, and you can charge more money because you're doing it faster and get deliver better results. What happens is your margin increase time. So you can actually make money from the business. It's not like so many agencies have worked with. They have 10, 15% margins. Right. So they need to make millions of dollars for it to be very fine. Right. Whereas in the end of the day, what matters on you keep. Right. So really going down to that level is key. So if you've nailed that down, if you have your process, if you're doing that well, then the second aspect is getting into right people and giving them ownership. Right. So as we talked about earlier. But many people are struggling with that step because they don't have a business that's set up in a good way. They're doing custom work all the time and they're afraid to turn potential customers away. But reality is when you're new, what happens is your marketing becomes easier because you can tell people exactly what you're doing and exactly what you're doing it for. Whereas when you're like, yeah, we're doing marketing. It's like what the after-stop being. What are you good at? Right. So yeah. Yeah. Totally agree. I think it's the biggest problem that marketing agencies have is it's like, I don't mean they ask us for PPC. We can kind of do PPC, I guess. Now they ask us for social media management. I can figure that. I had never asked for websites and the rules king asking for a CRM integration. Now they're also asking for a CRO strategy. Now they're also asking for us to figure it had a film content. And it's like, in what world is this going to be delegatable long term like that you can get out of it. You're just selling, selling additional services so that you don't have to do any marketing at all to acquire your clients. And out competing no one, you cannot compete against anyone on cost, on quality, on timing, on anything. It's just, it's the lack of a coherent business strategy really. And processes don't fix it. And hiring doesn't really fix it either. Like this is a structural, structural, structural problem that requires some confidence and balls to be like, all right, going forward, what is the focus of this business really? Right? Because if I want to be able to get out of this or I want to be able to sell it or something like that, it can't be whatever the hell you want. I'll figure out a way to provide it no matter how much founder time involvement is required. Like that's, that will continue to not work for the same reason it is currently not working. So redesign the structure or don't bother. Like that's, that just is the thing. And it doesn't think many people takes trouble five years when they're building an agency getting to a good point. And it's typically because they spend so much time trying to figure out who is their real customer. The second they're like, oh, now we have had three dentists, they're brilliant customers. Let's just do dentists. Suddenly their company blow up or, you know, let's just do this one thing for dentists or let's do this thing for a real estate or it's typically they have a whole bunch of client doing a lot of different stuff. And the second they figure out exactly what they do and who they're doing it for, that's typically when the business take off. And it is more scary in the beginning to say, hey, you want services and I actually know how to do it, but you don't fit my customer approach. Of also not going to take you. That's more scary in the beginning, but the people who do it, right? I mean, I've been multiple, multiple billion dollar companies by the stage, right? And if you want to grow fast, you just you nail that down to start and your growth is way, way faster. Yeah, the two types of clients I see that make way more money than their skills should seemingly justify. Like their profit and their revenue is much higher than you would expect from the founder skill set. One is people who have a crazy social media following. They can just sell anything. And then the other is people who really niche down. It's like I only help automotive. I only help lawyers. I only help doctors or something like that. And how good are their managers really? How good are their processes really? How well do they understand marketing really? Maybe not that well, but it's just a profoundly simpler business model and it's just profoundly easier to run and profoundly easier to scale. You need to hire less staff to do less things with less training with less errors with more relevant experience that they're going to get from every client. Things can go wrong in less ways for less clients for less reasons. And all of that adds up. Like you are trying to organize a team around solving what is either a complicated set of problems or not a complicated set of problems with either a complicated set of new solutions or not a complicated set of new solutions. So just the physics and the math on running a scalable niche down or not is incredible. And no one who's scaled who niche down is like, oh, it was a terrible idea. I wish I'd never niche down. I wish I'd stayed broad because you can go broad immediately. Right. All right. Well, thank you very much. Mads, where can people find you? You man in the world right now, at least with that name. So yeah. All right. Just google mads singers or go to mads singers.com or check out his YouTube and his LinkedIn. All right. If you got this far and you found this useful, please share this to someone else who's also going through similar situations. If you want a free structural diagnosis call, you can schedule one from the link below for me. Otherwise, hit up meds and yeah, get yourself out of the bottle neck, structure the business properly, make more money. Thank you very much. Just go.