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People Process Interviews: Linda Brown

Good morning, Ladies and Gentlemen. Welcome to the People Processes podcast. My name is Rhamy Alejeal, and today we are interviewing Linda Brown.

Linda is awesome. She is a Master Certified Profit First Professional. She’s a Certified Preventive Growth coach and she’s the founder of Spire Business Inc. Linda supports entrepreneurs in demystifying their business finances and providing guidance to increase business profits so that they can bring more money home. She’s often referred to as the Voice of Reasons by her clients, Linda Equis, business owners with the tools, strategies and skills they need in order to create sustainable growth in their business and profit. We’re excited to have you on, Linda.

Thank you so much for having me. It’s a wonderful opportunity.

Well, we’re glad you’re here. So my first question is, and I have to ask this for our people in our field, most kids don’t dress up as CPAs and accountants and bookkeepers when they’re kids. How did you wind up in the field and doing what you do today?

By accident, but most people kind of fell into that one. I was actually in corporate America for about 14 years where I was a securities analyst for mutual fund companies. I didn’t have enough people interaction, so I went there to make a profit. Let’s just say I worked on a lot of estate plans. But what I realized is that, all entrepreneurs , when they were having their estate plans done, they didn’t actually know how much money they were making or how they would bring it into their business. Interestingly enough. At the same time I was a financial planning, I also had started a boat dealership with my husband. So I literally went out on maternity leave and within six weeks, my CPA came up to me and said, “Hey, you know, QuickBooks? I have a couple of clients that need some help. Would you please help them sell for the first five years?”

I actually did this for free. They didn’t charge it all. I charged nothing. I went home on maternity leave. I said, “Hey, this is really cool.” I didn’t go back to work. I just helped a couple of clients that the CPA sent to me. Yeah. It was, will you work for free? The answer is yes, I did. I helped businesses grow tremendously and then all of a sudden saying, Hey, I’m helping all these businesses grow and I’m not making any money. There’s something that’s not right here. So then I started actually creating the business. So if you were one of those lucky clients between 2002 and 2007 and there was no charge.

Well, that’s it. That’s tuition, right? That’s you. You got to really learn and do the real life work. That’s a great journey. Well, having back in 2002 you’ve been doing this a while now. A lot of our listeners are CPAs and bookkeepers. Most of them though are entrepreneurs or HR leaders who are in charge of the staffing and organization inside their company when they’re listening. A lot of our guests are very successful people like yourself. I try to bring that back because the biggest learning doesn’t come from talking to somebody who knows everything. A lot of times it comes from the big mistakes and the problems. So I’m hoping Linda, you will take us to your greatest entrepreneurial failure mistake bad day. And tell us that story, how you got there and what happened.

My bad day is actually digging out of the hole right now. To be honest, as most entrepreneurs, I was really good with numbers and business and could run my business really well. And most entrepreneurs start their business for whatever reason they start their business. Yours is HR, someone else might be interior design or engineering, but that doesn’t necessarily mean that we know all the aspects of business to run our business. So mine was the numbers. I was really good at the numbers, but the marketing, not so much.

I grew for the first 14 years by word of mouth. It was really good. I had enough time to do my stay-at-home mom’s stuff and I had enough time to do business stuff. But when I decided, okay, it’s time to get serious, my kids don’t need me anymore. I had absolutely no idea on how to market. I took marketing class after marketing class and basically what they taught me is what you should do but not how I should do it. And so I got very frustrated and so I’m still digging that out. Now, learning how to dues, not what to do.

So when was the kind of moment of realization that you needed to really start investing in the marketing side of the business?

Believe it or not, it was when I joined profit first and Mike McCalla woods is a big believer in having a niche. And when I met Mike McCalla with some profit first, I had 44 clients in 44 industries. Mike’s like, you need to niche it down. You need to set up a system and processes within this one niche. And I realized very quickly that he was right because when we see my first profit to profit first clients, I couldn’t bring on staff because each individual client had an individual process or procedure. So I couldn’t actually bring staff on because there were no systems and processes. So to set up my systems and processes, which meant I made it to me show that all my clients were the same and then I could start marketing and growing it. Should you wind up both focusing totally? Actually it’s dual because it’s female entrepreneurs that work in the coaching and the design and staging industry for their homes.

Nice. Okay. Well, cool. Any lady, female entrepreneurs out there, especially those in the coaching or the interior design. We’ve got a specialist right here on the podcast for you. We’ll talk about how to reach out to her later. What do you think our listeners can learn from the kind of your journey and story? Why do you think they could take from that?

It’s not enough for two things. One, it’s not enough just to know what you know, you also have to find somebody that’s going to teach you what you don’t know. And by teaching, it’s not telling you what you don’t know. It’s how to solve the problem of what you don’t know. So just like yourself are teaching people how to get the HR into their business because it’s a big thing. Right? I can tell you, I don’t know everything. That’s why I come to you.

Right.Yeah. No and I’m in the same boat. I have a full time bookkeeper and two different CPAs and both of them, all three of them I know enough to hopefully tell if they’re trying to cheat me. That’s about it. Other than that, I’m trying to find the best people and letting them direct me.

And that’s the key aspect right there, is to find the people and know enough not to let them cheat you. I have quite a few clients who actually did just what you said. They went out and got a bookkeeper and got a CPA only to get audited and not realize they weren’t doing information correctly. So the course comes down to when you just blindly hand something over, are they actually doing what they’re supposed to do or not? And how do we as small business owners know and be able to track what they’re doing?

Right? But the reason I have two CPAs is because I still have a third party. I have a third party audit, right? Just to have someone go behind, it’s worth paying twice as much to make sure that the first guy does the job. Right? There’s a great quote by Steve jobs and he says, I don’t hire smart people to tell them what to do. I hire smaller, more smart people to have them tell me what to do. And I think there’s a balance between that and giving up the responsibility of running your own company. Right? You have to balance both. You need smart people telling you what to do, but that doesn’t mean it’s not your butt. On the line. So it’s still your responsibility, even if it’s someone else’s acumen that’s directing you.


Well, that is awesome. So what’s coming up in the next six months? What have you got looking forward to? That’s got you excited that you’re doing over at Spire?

Well, I’m really, really excited because we are switching over to group platforms in group training for our clients. We have a four step process of understanding the foundation of which to me, is your money. If as long as your money is working correctly for you, you should be able to do everything you need it to. So we have a money mastery class, a profit mastery class we have from the first implementation and then pump plan growth workshops going on.

So good. You’ve been doing those things for a long time, but now you’re focusing kind of on the group class version.

Right. I was doing it one on one and I realized that I wasn’t reaching as many people and my calendar got full so I was turning a lot of people away. So we’ve started implementing the cost strategy sessions.

Interesting. Are those already live? Are they up and running? Are you coming up on your first one soon?

We’ve done a couple beta ones that were word of mouth. But we’re starting to advertise this month for the first classes. That will be just 90 minute workshops in August, going into full classes in September.

Well, this podcast will air in August. So guys, we’ll talk about at the end where you can look up information on this. But by the time this is up in live, you should be able to check it out. And if you’re interested in a course , or a group class, that’ll help you dive into the money side of your business. That’s pretty cool. Well, let’s talk a little bit about what we call rapid fire questions. There’s just ways to maybe quickly share some of the key knowledge and bits that you’ve picked up. And one of my favorite questions is if you could recommend one book to maybe go alongside a people processes, how your people can be your organization’s competitive advantage, what book would you recommend for new business owners out there? Honestly, it’s a children’s book, the little engine. Yeah, I remember this book. I think my parents read to me the little engine.

What I find is that, most entrepreneurs need the mindset to know that they can go forward. I can do this, I can do this. We tend to get so discouraged and bring ourselves down, that little engine, he believed that he could get over that mountain if he just found the right partner to work with them. And so he went asking and asking and asking until he found the right partner.

Well that’s a great one. We’ll put the link in the description as well. We’ve had maybe a hundred 110 interviews or so. Never had that book recommended. And I think it’s an awesome one. That is so cool. Alright. So if you could go back in time, send a letter to yourself or whisper in your ear on the first, that first day you took maternity leave and we’re starting up your business, what would you tell yourself?

Oh, what would I tell myself? First of all, Linda, you can do anything that you set your mind to. Second of all, is set up the processes and the systems your business needs long before you need them.

Make a plan.

Well, make a plan. Yes, but more than the plan, actually have them. Because what we find in business oftentimes, possibly even yourself, is that we know the plan is there. We know what we need to do, but unless you actually have the plan working for you and the system’s there when you really need them is when you’re too busy to set them up.

Sure, sure. I have a joke that I do in a lot of my talks. It’s not a very good one, but it’s about naming your kid before you have it or at least before the epidural comes in. Because we had a very good friend who didn’t do that and then wound up having to change their daughter’s name three days after birth because she named the child after the epidural. Just saying, have a process in place before you need it. I often use it for maternity leave. If you’ve got employees, make your maternity leave policy before your first pregnant employee is wondering what’s going to happen to her.

Exactly. And I’m going to play, I was that person. I had two children, one six weeks early, one five weeks early. Neither one was named within the first 48 hours. I hadn’t gotten anything there.

And Hey, it works for some people and every once in a while you wind up with the infamous fun Yetta, as a child because that’s what you’re craving, right? Especially in all seriousness and business, you don’t want to be deciding, what’s your disciplinary policies going to be when it finally happens? You don’t want to, when you have five employees or 10 employees and you have your first complaint that you know, one of our clients harassed me or I’m worried that my manager isn’t treating me well because I’m a woman.

Those are things that are not fun to think about, but you really don’t want to be trying to figure them out in the hours after someone brings it up. Right. Oh my, I got injured at work today. Here I was, it’s an office environment. It’s a CPA or a bookkeeping shop and you know, getting into the office, I slipped and fell and I hurt myself. What do we do? Who do we call? Do we even, you know, do I go to mind? But doctor, do we, you know, just a little plans like that, that there’s not that many. But if you have a process or a plan in place when it’s actually needed, it’s going to save your butt.

Exactly. Not just the plan, but the process document. And it’s easy to find out because when we’re in the moment, we can get scattered.

Right? And it needs to be, I mean, in the long run, it needs to be accessible, right? It’s not just written down. It can’t just be in a binder that one person knows. It needs to be accessible. It needs to be communicated well. You know, someone needs to be responsible for it. Perhaps the most important thing of having processes is how, and when does it get updated? How do you review it and improve it over time? All of those pieces, the differentiator between businesses that can scale and those that don’t. Right. Exactly.

That’s where I think most people want to go. They want to be able to scale. We want to have the infamous four week vacation.

Right? Absolutely. Well, let’s go on. So outside of the wonderful book of the little engine that could, and that you have told yourself back on the first day, you can do anything and to think big and also that you need to have actual processes in place. What is the best business advice you’ve ever heard from someone else? The best business advice someone’s passed along to you?

My very first employer as an adult, I’m actually on the very first day of my job with him, said, “I don’t care what you know, I don’t care what you don’t know. The most important thing that you will ever have is who you know and what they know is. So get good contacts, find out what they know, what they’re experts in.” You know, because everybody has a background, right? Especially entrepreneurs. We all have some type of corporate background or knowledge behind us. So figuring out what they know as well so you can go and ask questions because you don’t need to know it. You just need to know the person that does.

I like that. I can’t remember who said it, but it’s something like in business there’s never a how problem. There’s only a who problem, something like that. I always keep in mind whenever I’m trying to figure something out is like, how are we going to do this? What are we going to do? Well, the real question is who, who do I know who can do this? That’s the reality.


Well, I like that. We’re an HR podcast. Of course a lot of people listen to us to think about scaling those people operations side of your business. What do you think is the number one policy, procedure, system training that’s had the biggest effect on your clients or your company internally?

Two-fold, if I may. First, it’s figuring out, because I work with a lot of entrepreneurs. Are they in fact an employee or are they in fact a contractor? So that’s first and foremost for any company, especially the small employer who doesn’t want that person to be an employee because it’s going to cost them extra money. So in the long-term, figure out who actually needs to work for you and then get them set up correctly. Bring in the expert HR person, make sure you’re covered with your disability and your workers’ comp. Have your employee manual inset. You really don’t want to mess up when it comes to people’s resources.

Oh, I like that. But yeah. So number one, is get your people right, especially the classification independent contractor versus employee.

You know, I always say, money is the foundation of your business. You can float by for a little bit. If something gets undone, you cannot float by if something ever happens to your people.

Right. So, money is the foundation, but money’s important because you gotta pay your people. That’s the number one reason, right? The people are the thing that executes nothing but nothing, but people execute anything in it.

Exactly. And you have to make your people happy so that your business is going to grow. Because even times these solo entrepreneurs, right, their worst boss is themselves. They could have worked in corporate America for years and years and years, but the worst boss is themselves. So yes, money is key and fundamental, but you need to make sure your people are done right because they’re going to be the ones that support you and grow with you.

You said there were two parts, the first one is getting that right.

First part is getting the people right, but the money, you really need the money as the foundation. Hence the fact that I’m here. But you are definitely the human resource aspect of any business that has to be done. Right?

So in terms of like a financial process that you put in, what would that entail? What’s it look like to actually have a process around that?

So most of my clients, I actually have trained to do their own bookkeeping and five minutes a day, the biggest problem was even if you went through and became an MBA or you’ve become a CPA, you learn the theory of business. You do not learn how business practically applies to you. So I even have actually an auditor from Deloitte and Touche who left and went out on his own, came to me and said, “Hey, can you set up my chart of accounts with me and teach me how to use QuickBooks? Because I only know how to look at it when it’s all done. I don’t know how to get it where it is.” And so we sat down and we worked through it with him. And so it’s really important that anybody understands how money comes into the business, how to have it go out of your business and how to categorize it when it’s in there.

So sitting down with an expert to really design that chart of accounts, that general ledger, so that it actually reflects what’s going on in your company. Not just like using the default and trying to hope that it’s sorts automatically correct.

Right. So whether you’re doing it or you hire that CPA to do it, because oftentimes that CPA’s trying to do tax savings for you, they’re not thinking exit strategies or growth strategies or you’re going to need a loan in five weeks or five months or five years strategy. So we need to make sure that not only is your profit and loss being calculated correctly, but that your assets are truly shown where they need to show.

Interesting. Honestly, I think you’re giving most CPAs too much credit. I love CPA’s and they’re half my audience, but most of the people listening I think would know that the majority of CPAs, at least the ones I’ve worked with.

If they’re actually looking for tax savings for you, they’re there. They’re in the top 10% already. The majority that I’ve ever worked with are just purely transactional. I’ll get the darn taxes filed one way or the other. I think it’s even a top 10% that will put the time in to advise you on how to better structure your taxes much less, go into the depth of design and that you’re talking about.

Well, I actually have created partnerships with a couple of CPAs that are tax experts. Specifically because I want to make sure that the books and my niches are set up to help the individuals but also help them tax effectively. So we’ve actually gone back and forth on, I need to see this as the bookkeeper who’s tracking the pennies too. I need it to look like this for the tax return to get them the biggest impact. So very interesting. Yes. Partnership.

I have a friend who’s not a client, he’s a small business ,who’s a contractor. He does some of the work on some of my rental houses and he set up his business about a year ago with his brother. He didn’t come to me to do any, you know, work or really a CPA. And of course almost as expected. He and his brother had a falling out and now they’re in this world where none of their books are right. They don’t know who I was. They filed an extension April 15th. Then I was telling him and he was mentioning that he wasn’t even clear that he owed his taxes by April 15th if he filed an extension. He just thought the extension, you know, gave him till October 15th. It is shocking, the level of financial knowledge that many small business owners have. They don’t really need to know more until, until they really do.

I mean, I think you’re exactly right. If I were advising any company that any new business is getting started up, I’m going to go register my company tomorrow. You need to know who’s an independent contractor and who is an employee. Get that right from the beginning and you need to get a financial process so that you know what dollars are coming in, where they’re going, how they’re being spent, how they’re being categorized, how to spend them. I think that’s awesome. I think those are the basic one and two for becoming someone other than an independent contractor yourself. To become something other than just the guy who does the work to actually run a business.

Even the independent contractor needs to know the money. No, that’s very true. That’s very true because it happens time and time again. You think you’ve got things done right and Oh, you’re mixing personal money with business money or Oh this wasn’t really a business expense. So what happens often times is that one or the other can get audited and because you’re mixing money’s up now if your business is getting audit now you’re personally getting audited or if you were personally getting audit, now your business is getting out of it. Right. So gosh, one audit is hard enough at a time. You really don’t want to have to go through two at a time.

Makes a lot of sense. Well, if we have listeners on here who are interested in reaching out to you, how should they find out more about you and what should be the trigger in their mind for when they should?

I’ll reach out before you think you need to. So if you are a small business, I would say it’s time to reach out. But they can either go to my website which is S P I R E or is our email. 

Awesome. And are you on social media?

I am on social media. I am N S L I N B coaching or Spire_business.

Nice. We’ll put links in the descriptions below. Linda, thank you so much for coming out today. It was great to talk with you.

Thank you for having me. I really enjoyed it.

All right, ladies and gentlemen, that’s it today for our interview with Linda Brown of Spire business, I’m excited to have her on. We covered some very interesting pieces, some of the key takeaways. I really liked that she crystallized that to really start a business, you need to have a financial process in place. You need to. It’s a basic setup, but you need an expert to come in and it’ll be worth its weight in gold to come in and help you design how that money’s going to come in, how can be categorized, how it’s going to be spent. I appreciate her plugging the HR side too. I’d love to help you out there. Of course. In the meantime, check us out and If you haven’t subscribed yet, you can get subscriber only content, like our new on-boarding checklist for small businesses that we’re really excited to share with you. You can also find us at Poplar Financial on LinkedIn, Facebook, and Twitter. Love to see you there. Now it’s time for you to go out there, have a great day, and get your work done.

People Process Interviews: Lee Caraher

Good morning Ladies and Gentlemen. This is Rhamy Alejeal, your host of People Processes. We’re so excited to have you tune in today. Today we are interviewing Lee Caraher.

She is the founder and CEO of double forte PR, did a double forte PR and digital marketing. She is the author of “Millennials and Management: The Essential Guide To Making it Work at Work.” She based the book on her experience with epically failing and then succeeding at retaining millennials in her business. Her second book, “The Boomerang Principle, Inspire Lifetime Loyalty From Employees” was published in 2017. It’s a pragmatic and actionable guide to creating high performing work cultures ready for the future. And we are so excited to have her on. Lee, are you there?

I’m here, Rhamy. Thank you so much for having me.

Well, I’m ecstatic to have you. I want to start with figuring out how you got into your current business, doing PR and really writing a lot about HR work.

So I started my PR career after college. I graduated from Carleton College in Minnesota with a degree in medieval history. Very helpful. I did not know what I was going to do when my friend Ramona and I were talking and she said, you should really check out this PR thing. I think you’d do well in it. And so I checked it out and here I am almost a little more than 30 years later having been in the public relations career and communications career my whole career.

30 years, man, you must start it at I guess what age, age to age, three rolled right out of college.

Sorry. You know, I’m very enhanced.

Sure. Well, in 30 years of doing this, I know you’ve had some crazy highs and some probably pretty rough lows. So what I love to do is start with our guests talking about their toughest time, because I think our listeners learn more from the failures in our guests stories and they do from the successes. So why don’t you take us really to that time, maybe even like a specific day you realized you had a problem, what happened and tell us that story. Then we can talk about maybe some of the things that our listeners could learn.

Sure. So I started my company with a co-founder, a very good friend who we’d worked together many years before we started the company. In four years he said, I really don’t wanna do this PR thing anymore, Lee. He left the company and actually he came back and then he left again. Which is about my second book, boomerang. But well, going forward, a few years ago I was thinking about what is next for the company. The company needs to transcend my tenure there and who would take over for me. There really wasn’t anybody in the company who either wanted to or could become the CEO of the entity. So I was intent on bringing somebody in. I did that. I brought someone I knew pretty well.

I thought of the company and some cultural things were a bit different as you always will. You know, everything is not static. But my gut, I was very intent on finding this person and getting that person in place which I did. After a couple of years, that thing happened, it was like, Oh well, it’s just him. He’s just different than me, etc. And then one day or one week, he lost four clients all at the same time, really for the same reason. Not for our performance, but really about him. And I was like, okay, ding, ding, ding, ding, ding. I go, you have to listen to your gut. So, we parted ways and I wished him well. But it takes a long time to recover from that. You know, you don’t just like one day have a succession plan and the next day, get rid of that person and say, okay, everything’s okay. You really have to read it.

Right. The cascading. Yeah. We had a guest not too long ago, in a very similar situation. Brought on a COO with the idea of this person eventually taking over in the the investment and transition time to getting them up and then, that person not working out. It’s a morale hit, if nothing else, not to mention operational hits your bottom line as well. Right. So, yeah. Not to mention, big piles of money. Absolutely. Well, I’m sorry to hear about that. So if our listeners are in their first couple of years of business and they’re thinking about similar concerns you had. What do you think maybe they could take from your story and they could learn from your mistakes? What should they do when they’re trying to accomplish something similar?

Beginning of your business and you have a partner, make sure that you have a great prenup. Whatever that agreement is between the partners on how they will leave, what the calculation will be for an earn-out, what are the conditions, whatever that is, batter that out before you get started because you will hate each other one moment in time for sure. It’s going to happen. You can get past it if you have really good agreements. So, that was on my co-founder,, it was very clear what had to happen and what he had to do to get the maximum value out of the company for himself, which I was very happy to write the check for because he fulfilled all the agreements we had put in place before. On the second piece, bringing a successor in. Very tough. You know, it’s one of the things that big companies struggle with so much. I think that if your gut is telling you something about the person, no matter what their credentials are, no matter how much you’ve known them, no matter how much success they’ve had in the past, if your gut is telling you something, you need to listen to it. And don’t ignore what’s happening just because you want it to work out.

I like that. So on these big decisions, these succession issues, listen to your gut. If you’re feeling something wonky, timed up. Time to really zoom in on that and pay attention. I like that. Well, your book, which came out in 2017, is the boomerang principle. What is the boomerang principle? What does that even mean?

The boomerang principle is the idea that those companies and organizations that don’t just allow but actually encourage people to return to them as employees once they’ve left. Have a strategic advantage over those that don’t. Something that we’ve practiced on that one fourth day since the beginning. We’re a small company. We have 37 people right now. We have rehired 16 people and we rehired four people twice. So across the board, if you look at those companies that do rehire people, these people are the highest performers they have in their entity. So the more we will to that sort of point of view of having people return to the company when they’ve left, the better it is for the people who were there. And the better it is for your bottom line.

That’s very unique. I mean, just an interesting idea. We’ve had, you know, this is an HR podcast. My company, Poplar financial, we work on the processes and systems around human resources. So systematizing things like on-boarding and off-boarding which everybody goes through. We talk about it all the time, it’s a huge part of that. But everyone focuses on retention. How do you keep people from leaving? You’re saying, no, no, no, no, no. Allow them to leave and in fact encourage exploration, but make sure they come back. Is that the idea?

A few things. One is when you create an environment that people return to, you’re creating an environment in a culture that people have a hard time leaving, right? People don’t return to something bad. They only return to something good, number one. So if you have an environment in a culture that helps people return, you actually have a culture that helps people stay longer and retention is built into that. Number one. Number two is when you actually have someone return to you, they are more valuable to you the second time around then they were the first for many reasons. One is you already know that they’ve worked well with you in your culture. They already have proved themselves as one of you. Whatever that culture company is.

The second is they’ve gone out into the world and learned other things that they’re bringing back to you. You can apply a more worldly view to the work that they’re going to be doing. And we all know, and there’s a lot of data that says, the more different inputs you have, the better decisions you make. And the problem with retention sometimes is that we can become more inwardly focused. Right. It’s really a challenge to get outside of view into a group that stays together for a long time. And I found this in my own business now. But when you have someone come back, right, they go, I learned this thing out there. What if we do it here? They bring other things back to you and they know what could and could not work. And the third is they come on board, you know, it doesn’t, they’re not a hundred percent day two. Right. But they’re 100% around day 3540, which is so much right of a new employee. Right. A new employee takes six to six months to one year to become fully functional in any answer.

Yeah. And such an interesting idea. Obviously they’re more valuable and also, the grass is greener on the other side mentality, which has been, if they’re coming back, they’ve seen the other side. Right, right, right. I guess. Oh, interesting. So why I guess that makes sense. If an employee is going to leave you, you want them to come back, I’m assuming you didn’t like to throw them out because they’re thieves or something like that. Yeah. So how do you do that? What are the steps to actually creating a system that encourages return work?

Yeah. Well it starts on day one, right? It starts on day one. I meet every new employee in the company, in their first two weeks. And one of the first things I say to them, Rhamy is, “Hi, I know you’re going to leave us. So it’s really important to us that when you do leave here, you never take the devil to take off your resume.” And that is a point of pride that you were at double forte. And I hope you’re here for a long time. And I hope that it’s mutually rewarding. I hope that you grow, learn new things and achieve your own personal goals within the constructs of our company. But I know when you hire someone, they’re going to leave. So I know you’re probably not gonna stay in for the rest of your life, but I hope when you do that, it’s good that it’s positive and that when you’re no longer interested, come and talk to us and we will help you find what’s next. Then I hope you come back.

I say that in the first week of their employment. And of course some people are like, just got here. But I think it’s important to like to set the tone. I said, the tone I want to set is double before two, we want double forte beat to be important to your career. And we’re set up to do that. We’re also set up to do really good PR, digital communications and we have to do those two things together. And that means one, we have very high standards of work and that we’re going to be training for, be mentoring for, be fostering. And two, it’s going to be a good conversation with every employee around, what is it that is their goal? How do you see yourself? What do you want them to know about this job?

If it’s an entry level person, they don’t want to know that it’s only one path. What are the past they could take? And to have really good conversations with these people, not just at review time, but throughout the course of the year. See what’s going on. What are you interested in? My own assistant who came to the company, he’s actually just left, but he was at the company for almost five years. He came from Michigan. He wanted to be an actor, but he knew he wasn’t gonna be able to do that full time. So he wanted to be an assistant so he could then sort of get out by 5:30 and go act. And he did that. And then one day I turned around, he’s great at it, and I turned around and he was drawing a greeting card for his mother and it was amazing.

And I’m like, David, did you do that? He goes, yeah, it’s my lunch hour. I’m like, Oh man, I don’t care about the lunch hour part. I’m like, I didn’t know you were an artist. You didn’t tell us you were an artist. Well, I didn’t think you’d care. What do you want to do here? Do you want to use it? Oh, I’d love to do that here. I mean, who knew? Right? And he told us he was leaving and one of the reasons he stayed so long and was five-year for somebody under 30 is a long time in San Francisco. When he told us he was leaving, he goes, one of the reasons I stayed so long is, because I got to do the things that I love at double forte and help the company doing those things. So when you can find those interests and they can be so much more valuable within just the job description you hire, or because the job description is just one facet of those pictures, but people’s role is how people show up in the world.

So you know, he’s gone. I hope he comes back. He’s already sent us to people who might be great employees. So already, he’s come back to us in a way he didn’t have to do that. And that’s the loyal part, right? It used to be the old paradigm used to be, if you leave me like when you work for me, you’re not loyal and you’re dead to me. Well, actually not when you’re getting paid. That is a transaction. I will give you a paycheck. You’re supposed to show up, which frankly is not a skill, but you need to do it. And that’s a paid transaction. Loyal act is when you don’t expect anything in return that you’re out there in the world and you go, you know what? I met Joe. Joe would be awesome at double forte. I’m going to give Lee a call and say, Hey, you should talk to Joe.

You didn’t have to do that. You don’t have to do that for me to know that for Joe and to do it for himself, but that’s a loyal act. I’m thinking about the betterment of whoever you’re talking to, right. When you don’t expect anything in return. So that’s what I’m talking about in the boomerang principle is if we get away from thinking about loyalty just when we pay people, right? Thinking about, Oh, I want someone to be loyal to the company for their entire career. Well how does that work? What does that look like? That looks like them going out into the world and always keeping in touch with us, always being connected to double forte. And when something comes across their viewpoint that could benefit the company, they pick up the phone and they make it happen. That’s a loyal act. So how do you keep them involved after they leave? I mean, so you treat them when they’re with you, you on-board them with the expectation of understanding.

Also, one thing about your first week conversation that struck me is it also gives you a little bit more. I think a lot of employers, as you said, they’re pretending or kind of inferred anyway. I inferred, they’re pretending that when they hire someone at 27, that they’re going to retire from minutes. Right? And they’re like, well, 68. Yeah, we want you to work for us forever. And that’s our goal. And when you state your goal is that, one thing that puts you in a position is when an employee’s not though, right? When an employee has needs, whether they’re temporary or permanent, that does not fit the company’s needs. So I don’t know, maybe they don’t have the skills to generate salary or they have some issues that need to work on before they move to another step or something.

You’re putting a weird position in saying that we want you to stay here forever, but also, we can’t satisfy the immediate needs you’re presenting. Whereas, if you’re saying, look this is the place for you for now and we want you here. We want this to be your place forever. But if it’s not, we want you to stay loyal and we want you to join us at the moment, we want you to come back and be a part of us long-term. You’re also implicitly stating, if this isn’t the right fit for you, get to move on and we’re all still friends and we can continue to work together. And it takes a little pressure off the company to be like, we have to meet your immediate needs, all the time. Forever for the entire future of our lives.

Well, it also takes pressure. I think it takes pressure off both sides. Right? It’s sort of like, stating the obvious and as long as people aren’t pretending, you’re just removing a lot of pressure and anyway. Right.

Right. It’s not like any other company is going to give you a pay. Yeah. It’s just that you’re being more honest.

That is what used to be the expectation, right? The expectation used to be when my parents were working, you come, you go, and when you go, it’s when you’re getting your watch and you’re retiring. I mean that has changed,, that used to be the American dream and we could talk forever about this, Rhamy. I have a lot of statistics and data and maybe we can talk about it some other time, but that’s just not reality anymore. And instead, particularly for younger people who they already know, that whatever job they have today, will look different in five years. Unlike people my age were like, Oh, I’ve learned a skill. I can do it for the rest of my life. It’s not true anymore. And anything you do today, if you have a job title today, that job titles will look very, very different in three or four years.

So you’re also setting the expectation if it doesn’t work, we’ll help you find something that does help you be successful somewhere else. That’s what we’re all about. Right. How do you keep the most productive organizations are the happiest organizations? The happiest organizations are the most effective organizations. So you have to have the most positive high producing teams, ones that are very clear on mission, very clear on their own role and very clear on who they are as people and how they want to move in the world.

So when someone comes to you and says, look, I don’t think I want something new. I know, I’d love to see if it can be done here, but if it can’t be. I mean, do you guys as a PR firm or are you, like you said, you’ve mentioned a few times, we’ll help you find somewhere else. What does that mean?

So, as long as you’re having a conversation with us, we can do that. Right? So I’ll give you a couple of examples. One woman came to her manager a few years ago and said, she really wants to be a nurse. Well, you can’t be a nurse and be about double forte. We’re just never going to be a hospital. Right? So it was like, well, how can we help you do that? Well, we could help her do that by allowing her to work different hours with a different structure so that she could go to nursing school during the day and during the night, get her schedule. So she worked for us for probably nine more months. Her schedule was wonky and she didn’t have all the responsibilities she had before.

But you’ve got a lot of work done for us while she went to nursing school. So that’s us helping her. Right in the end, she actually had to move home to where her parents live because her father’s ill. She didn’t go become a nurse because she needed to be that earner now for her family. And she went into PR. So again, she had another PR firm. And so when she told us this is what she was going to do, I was like, give me the companies you want to talk to. I will call them all right now. So that was one way.

Another person I’m leaving actually this week is his last day is tomorrow. You’ve been with us almost eight years. I’ve been talking to him for about 18 months. And when I say I’ve been to, he came to me and said, I don’t know what I want to do, Lee. I don’t know if this is what I want to do for the rest of my life. I’m like, okay, well you don’t have to quit because you don’t know what you want to do for your life, but you do have to keep up your standards and keep being double forte and what end basically we’ve been talking on and off for 18 months. At the beginning of this year we talked some more and I knew that probably this year he would leave, but we had several big things happen all at the same time.

When one of our people lost her husband and was on bereavement and he filled in for her and we had two huge projects that ended around the same time and those projects ended. This woman came back from bereavement and he came to me and said, I still don’t know what I wanted to, but if I’m going to leave this year, now is the time before I get redeployed. So then he gave us seven weeks of notice. So it’s seven weeks of notice. He’s been in conversation with us. I’m like, how can I help you? He’s like, I don’t know yet, but I’ll ask when it happens. And we were talking last week and he was basically in tears. He goes, how do you leave a company you love? I said, I don’t know, but you’re doing a good job at it.

If you go join the circus and it doesn’t work out in six months, I hope it comes back right.

We’ll come back in some way. For sure. Not at all. But what can we do to help those people fulfill their own goals? Because frankly, the most loyal act an employee can do is leave when they’re no longer excited about what they’re doing. Most loyal act, an employee who you’re paying can do, is explore other things in the company, see if there’s another opportunity for themselves. And if there isn’t to say, you know what, I need to do something different. I love this place, but my own life, these are the things I need to go. Okay. How can we help you? You know, congratulations is really the first piece of that like, Oh well, and never counter. I never ever counter because it means I did something wrong beforehand. So I need to acknowledge that mistake and not counter during the whole thing.

Yeah. I’ve stressed that in the past that I’ve probably seen, in 10 years of working inside hundreds of HR companies I’ve seen hundreds of companies that counter decision I have never, ever, ever seen it come out. Right. I mean, you kept something, a lot of times I keep the employee, but then two years later you’re in a way.

You’re in a worse position because you think everybody doesn’t know that they’ve encountered every right, just start the whole yo-yo of dissatisfaction.

Well I think you have that’s such an interesting idea and I just think it’s awesome and it’s interesting. A lot of people write books inside there. Well look, if you run a PR company, you could probably write a book about doing PR. That’s the idea, right? So I think it’s awesome. You’ve written this book and I think the concept is just staggeringly interesting. We could talk for hours, but our shows lasted only about 30 minutes. So I’m moving on to a couple of rapid fire questions, but I want to ask one question, which is like, what are you trying to accomplish with this book? I mean, do you think that you’re going to your books, I mean, are they going to write, are you going to sell 40,000 copies and make lots of money or like why’d you write it?

You know. I wrote the book for a couple of reasons. One, in the business communications, it’s all about leadership. It’s all about community. It’s about connecting, about making sure that what you say is what you do and is what people understand. And as a leader of a company, you see you have a company that I run. A company that does, right? But the company part is about leadership, about people, about vision, about the future. And that’s actually also the work that I mostly do with our clients. I mostly do deal with the C suite of our clients who are worrying about the same things I am as the CEO of my company. So at the time of my first book, when everyone was failing dramatically with millennials, I mean, you said at the beginning I had Epic failure, right?

So I had six, I had hired six people who were in the millennial category within eight weeks of each other. And within three months they were all gone. We walked in five. Walk themselves and I’d never in my life had 100% failure in retention ever. And it was a wake up call. I think for me, I was just like, okay, that can’t be us. I mean that can’t be recruiting because we are good recruiters that’s got. It can’t be them. We couldn’t have hired six bad people all at the same time. We had to start looking at ourselves, what did we do wrong? And they started looking at it and everything I read about any normal was negative. And I was like, it can’t be true that 80 million people are entitled and terrible.

They decided to ignore everything I was reading and just go back to the basics and do my own research and figure it out myself because everything I was reading was not helpful. There weren’t very many books or articles written by people actually leading people. They were written by journalists or they were written by consultants, are they written by people who actually weren’t doing anything? I really had a visceral reaction to what I was reading. I was like, every once in a while I wind up here with a consultant kind of. Right. You know? Well, it should be. They always have good information. But one of the things that really bugs me is when we’re talking about people leadership and they’ve never had an employee. No, it’s not the same.

I’m just like, it’s like the people who are in strategy and companies and go, why didn’t you get that done? Well, have you tried to warn a business? Thank you. Anyway, so I was doing all this work for my companies in the same things that we learned for ourselves, right. To a lot of trial and error, a lot of interacting, this kind of stuff. And my clients were like, you should just write a book leave because it makes it a lot easier for yourself. It’s like, yeah, no one wants to hear from me on this. And because I write, I’m a PR person, what do I know about leadership? Well, apparently I know a lot and I’m good at it. My clients would just keep on pushing me to write this book. I was meeting with the publisher for some totally different answer and something happened in the room and she goes, Oh, publish that book.

I’m like, what book are you talking about? I don’t have a book that looks about millennials getting that done. So I was also in EO. E O is an entrepreneur organization. It’s like the YPO for entrepreneurs and very much a gestalt organization sharing our experiences, not telling you what to do. More and more of the EO chapters around the country were asking me to come talk about what I was learning in my company, my little baby company. I just thought it would be valuable. And so based on that, I published the book and I think the next book came out of the reaction to the first book cause the Dorian principle came out when I was speaking around the country about the staff. I really feel passionately about who you are saying don’t lie, see what you are, do what you say and make people understand it.

I mean that as a question, right? PR is right up my alley because I believe that makes good in the world. Helping people understand how to do that, from a leadership perspective helps people have better businesses. And that’s what the books are about on the boomerang principle. I’m going around the country talking about millennials and management. And every time, every single talk and I did over a hundred of these talks, someone raised their hand and went, I’m not putting any time and it’s millennials cause they’re going to leave me. And as soon as they leave me, they’re dead to me. And I’d be like, no, that’s wrong that way. I knew that was a huge problem. So that’s why I wrote the second book around. It’s the same thing written from a different point of view.

How do you create a relevant now, today that means intergenerational, right? In a generational high-producing positive workplace. And that’s what I did, right? And of course people don’t realize, but this year is an interesting year because millennials will outnumber any other generation. Correct this year. But also we’re all working long, right? 65, that is a glimmer, right? When I started my career, I was in my last year of boomer. We all thought we were retiring at 50, all of us, right? Well that came and went and I know so many boomers and silence who are still working because they lost so much money 10 years ago and they’re still recovering from that. So we’re all working until we’re 70 or 80. And if you think about life expectancy today, if you’re born today, you have over 50% chance of living until you’re 110, right?

Well, if you’re 110 and you’re retiring at a 40 to 50 year retirement plan, the 1% of the 1% is the only ones who can afford that. We’re all going to be working much longer. We’re all gonna have the brain power to work too much longer. So we just have to be thinking about working in a fairly different way than our parents did, right? It’s a transition that we have to get used to, knowing that probably if we do the same thing our whole lives, we will be bored to tears. Right? It’s a lot of work life, right? So part of this for writing, for my book, the purpose of them was to explore other things that I can bring to my business or the things that can bring to the people I care about. Other things, other good things that can be put in the world because we’re all changing so much.

That’s awesome. Well, let me ask you a couple of rapid fire questions just to get a couple ideas out there. One, if you could recommend one book to go alongside the boomerang principle and of course people processes, what would you recommend for a new entrepreneur to read?

I would say, Hire the 18 by Winnie Johnson.

Cool. That’s in the show notes down below, if you could go back in time and whisper in your ear back on your first day of setting up double forte, what would you tell yourself?

It’s actually going to last more than five years. Be a pair.

Take a long, long, long term plan, a long term plan. Very interesting. Awesome. Okay. Well, what’s got you most fired up, excited in the next six months with your business? What’s coming down the pike?

Well, I’ve just moved my with my family to Eau Claire, Wisconsin, which is, I’m in the middle of the country and we are opening an office here from San Francisco, big change from San Francisco in New York, which is where I’ve been spending most of my time for the last 20 years. So I’ll be sharing my time between Auclair, which was in San Francisco in the bit of New York, but we think that there’s a lot of opportunity here in the Midwest. I’m looking forward to figuring that out.

Well, when should our listeners, I’m sure some of them are interested in your services or what do you think should be the trigger for them to contact you and how should they go about doing so?

Yeah, if people are interested in my leadership ideas around boomerangs and millennials and positive workplaces, they should go to L E E C A R A H E And you can find my books and my writing and my Twitter and all that kind of stuff there. I’m @Leehereverywhere. I’m very easy to find. If you’re very interested, you can also find my agency, they’re double forte. If you’re interested in double forte’s public relations, communication services, you can go to or you can email me at

That’s awesome. Well, thank you so much for coming on the show today, Lee. I’m sure there was so much good value you dropped. I’m excited to learn more about your processes. I’m definitely paying attention to you going forward. There’s anything you would like to come back on the show and talk about you. Let us know when your next book is coming out. We’ll do that. Have a great one. Thanks. Bye. All right, ladies and gentlemen, that’s it for today. Show appreciates Lee coming on. Shared some amazing value information. The idea of creating a workplace that people return to staggering. Now it’s time for you to go out there, have a great day, and get your work done.

Learn more about Lee here:

Twitter: @Leehereverywhere

People Process Interviews: Jacob Baddsgaard

Ladies and gentlemen, welcome to the people processes podcast. I’m your host, Rhamy Alejeal and I am excited today to welcome Jake Baddsgaard.

He is an amazing entrepreneur. After growing one of his first pay-per-click clients from 25 to 250 employees, Jake realized that he had a gift for using Pay-per-Click marketing to drive dramatic business results. To help more companies succeed online. Jake found a disrupted IV advertising, PPC and CRO management agency that has helped hundreds of companies realize unprecedented growth and profitability from online advertising.

Of course, as an HR channel, though we’re more interested in that. In the last six years since its founding, disruptive advertising has grown from two employees working in Jake’s basement to a flourishing agency with more than 160 employees and a run rate of over 20 million, puts it at number 145 on the 2017 inc 500 list and is listed as one of USA today’s best places to work in Salt Lake City in 2019. So we’re ecstatic to have you here, Jake. Thanks for coming on.

Thanks for having me, Rhamy.

Well Jake, on a lot of kids don’t necessarily dress up as marketing guys and business owners when they’re eight years old, you got to tell me, how did you wind up getting into this industry?

You know, you’re right. I never did dress up as a marketing agent, right? Well, and how many of our businesses were even around when we were kids, right? Like, this is a whole new world. It’s interesting that you asked that question because there’s probably a trillion things that happened that ultimately led to where I’m at today. And I look back from the first job I had when I was eight years old. The first business idea I tried to execute on at a young age. Ultimately I would probably almost pin it down to the moment that I experienced in my corporate career. Before going down this entrepreneurial path, which I kind of just had realized, that moment in an annual performance review where I realized I will no longer have the growth as a person. Professionally or financially that I’m looking for from here. It was my moment of either choosing to settle or choosing to move on and, and to create that environment for myself. I would say, that was probably more of the real moment that kind of catapulted me down the path that I’m on. I was realizing that I wasn’t gonna find the fulfillment I was looking for in life if I didn’t take that chance. Unfortunately, my wife was supportive in that decision.

Yup. A good partner is everything, isn’t it? Yeah. Well, you’ve been in business a while and of course you’ve grown to a very successful company with a great revenue and good employees. But a lot of our listeners are in an earlier phase of their company. They’re still about maybe bridging out on their own or they’re part of a larger organization. I think a lot of them kind of get caught up in thinking about what success looks like. But it’s the failures along the way that teach us the most. So I always ask my guests to share with us their largest entrepreneurial mistake, failure, really, really, really bad day. And tell us that actual story, like what happened and how’d you feel and how did it come about? And then we’ll talk a little bit about what our listeners can learn from it.

Yeah. Well, you know, when you asked that question, I imagined myself holding a scroll with all of the failures that I’ve had as an entrepreneur and like opening that up, letting it drop to the floor, and it just keeps rolling. Right? It’s the hardest thing for every entrepreneur I ask. Yeah. It’s hard. It’s a journey of ups and downs, but, I want you to think of your worst one.

Well, let’s just go ahead and get personal on this one. A lot of this becomes more in focus with a little bit of hindsight in perspective. And what I realized at what probably the biggest failure that I had, and I’ll relate this to a specific experience that I went through. The illusion that finding success as an entrepreneur would fill my cup. Filling self value, build my esteem, giving me the success and fulfillment that I was looking for in life that would help me get to some level of easy street with lots of money and would solve all my problems. And finding success with meaning. Yeah. And so when I saw that turned into a failure and how that manifested in my relationship with my wife and with my kids as well, but primarily with my wife. It wasn’t until two to three years into the business where we were just at a sink. It felt harder than it needed to be. We found a good marriage counselor that we were working with, because of course, Rhamy, this wasn’t my problem. This was my wife’s problem.

Oh yeah, yeah, yeah. I’ll see a counselor if you’re all right. Yeah.

And you know, it was really interesting. I’ll never forget that moment where we were sitting down together and we’d had some productive sessions and read some good books together and we’re making some progress. But, I didn’t have that epiphany moment. Until one day we were sitting there and he was asking something about the business and it was doing well and kind of asking some questions and saying, Oh, that’s great. Like, what is your business partner? I think about that. I said it wrong and I answered it wrong. And I said, what do you mean? I don’t have a business partner. And, and he said, Oh, you don’t? And he looked at my wife and he looked back at me and then he just continued on.

The moment where I’ve got to tell you, it just hit my, my heart, my mind and my soul, like a ton of bricks in realizing that I didn’t see my wife as a partner, right. Like not only in the business but in most aspects of life. And it actually had nothing to do with her. It had to do with the insecurities that I had and that I needed to over-inflate the value that I was providing from the business success to justify being controlling or manipulative or not being the type of partner that I needed to be and using the business as any sort of justification to feel better about that. You know. No good story doesn’t have some resolution or outcome on that. So that was probably what I wanted to say three years ago.

 I remember driving home from that session and just saying, do you feel like I see you and treat you like an equal and having verbalized the answer that I already knew was true. Just really deciding that I needed to make some personal changes there. And what I will tell you Rhamy is, for our 13th anniversary which was this year, we were just having a weekend getaway. And on the drive up I asked her the same question and said, how do you feel in our relationship? Do you feel like I see you and treat you like an equal? And to have that answer come back and say, yeah, I do. I do feel that way now. And this is by far the best year of our marriage so far. Not a little bit, but like a lot of it. Right. So that was probably the one that I would point to in terms of a failure that became very prominent to me. It helped me to learn and grow as a person and a professional.

Well, I appreciate you sharing that. I’ve done about 150 interviews and you know, the stories that always touch us are the personal ones. They’re the ones that really do matter. My biggest failure is that time, I lost that one account and then I turned around and got it back. It’s a story I get every now and again. And I’m like, ah, well you haven’t been in business long enough yet. It must be the, you know, the big hit. But man, I appreciate you sharing that. For guys and gals who are out there starting up, what would you think maybe they can learn from your story that they could put in place earlier? It’s not later. It’s not big. It’s able to be headed off, right. An ounce of prevention versus a pound of cure.

Yeah. I think really that comes down to whether as an entrepreneur or in whatever relationships that we have. No one or nothing can fill our cups for us. We can only do that for ourselves. The way that I’ve found more success is liking who I am and feeling that inner confidence. Independent of how my marriage or business or things are going is identifying those daily routines that helped me to be my best self, which are simple things like, silence, visualizations, affirmations, exercise, reading, and doing religiously. Doing those things on a daily basis that allow me to be the person I want to be each day and to fill my own cup so that I don’t show up and have unhealthy expectations in my relationship or from the business or really stretched to have things or people fill my cup for me, which is just they can’t do. And it’s actually pretty unhealthy to expect that. So I would say that , if we can get our head right there and place the focus and energy that can really get us where we want to go and not go down the path that I did, which was trying to solve it in a way that was never really gonna fix it.

Makes total sense. Well, I appreciate you sharing that. So now that you’ve been through some of those harder times, your wife is happy with you. Again, your company’s kicking butt. What’s got you most excited in the next six months or so? What are you doing in your company or personally that’s got you getting out of bed and super excited?

Well, let’s see. Let’s do one of each person. Personally, I am training to run a Boston qualifying time for a marathon 90. So that gets me up early. And so that’s going well. As a family, we’re actually having our fourth child and our first boy, in November. So that’s coming up sooner than I think we realized and then as far as the business is concerned, I am just so passionate about some of the programs that we have put together to focus on helping ourselves. Myself included and people in the company with optional programs to help people develop some of the same skills that we just talked about. And so I’ve actually put together courses around personal leadership and financial development to teach the skills and to create the accountability systems for people and myself to just be great in those areas. And I have just found so much passion in doing that as a company. We’ve actually had about 65 already go through the first course of personal leadership development and they have graduated from that one to then go through the financial development course. And it’s just so exciting to feel like, Hey, we’re here to win at life and business together. And so that’s what I’m the most excited about right now.

 I saw on your bio of course you’ve grown this company hugely and it seems like a lot of that has been from these, perhaps a more personal focus on your employees in that manner by investing or training in the personal development or leadership development as you called it, of your employees. What does that actually look like for your employees? What are they participating in that you feel like and what’s from a purely pragmatic standpoint, what’s the benefit to the company itself for doing that?

Yeah, so it’s a 10 week course and it actually has a $500 enrollment cost. So it costs money optional. It’s early at 7:00 AM on Monday mornings. If they graduate the class, they get their $500 back as well as a $500 bonus. If they fail to meet the very strict requirements of the class, they have the opportunity to lose their bonus opportunity and their investments. So one big mistake can cost someone 1000 bucks. So there’s just some really strong accountability and skin in the game. Interesting. Have you had anybody fail? Yes.

Oh man. All right. Keep rocking. Yeah.

Many, not many but certainly some people have lost their money or their bonus. Unfortunately, a situation or two where people have not been able to make it through the course but very like one or two out of 16 or something at this point. The first portion of the class is purely based on the book called the miracle morning and just developing those good daily habits.

When you earlier said it’s those daily, you know, I could hear you saying savers, I was like, I feel like he’s saying lifesavers.

Yeah, that’s exactly what I’m saying. Everyone agrees to start doing that. We also agree to how we can use our phones for the 10-week period, which is for nothing other than GPS texts and phone calls. Then everyone has to show their screen time every week to prove how they did demonstrate with their journal and the readings and quizzes and completing the assignments. The next portion of the class is to change the world by changing yourself, not trying to change other people. And we read the book leadership and self-deception by the Arbinger Institute and work and practice on those principles and everyone gets to choose someone in their life to work on that with. And then the third section of the course is developing a life map and getting a better understanding of where they’re at and where they’d like to go to with an action plan of creating what’s more commonly referred to as a vision board. But I refer to it as a painted picture and creating, Hey, this is how I see myself three years from now and here’s what is a part of my present or past that would hold me back from being that person and then getting after it. Right. And so that’s how the course works. And then there’s a follow up on accountability group for people that want that ongoing accountability. Where about a third to half the people continue to participate in that just ongoing forever after that.

So how do you get any push-back from employees who are saying, look, this is my business. I mean, I guess you’re not requiring enrollment in this year. You’re actually optional. Do you feel like there are people who maybe don’t participate in that? Who would feel somewhat negative or resentful of it or if you’ve not really seen that? Let me just ask him. We’ve got a bunch of people out here.

I’m pondering that I haven’t gotten that feedback specifically. I mean clearly there’s a lot of people that haven’t taken it. That’s a good question. I don’t even have the answer to that and I should probably look into it.

Yeah. We’re often involved in wellness programs. Whether that means mental or counseling kind of wellness programs similar to what you’re talking about life skills and development or even physical. Let’s get you guys to stop smoking or can we help you? Can we pay for six months of Weight Watchers or something? And there are many people who took advantage of those and probably half are people who were already fit or already mentally exploring those ideas. And half of the people who take advantage of really excited about the opportunity, some fail. So I’ll make it through and it does move the needle but then, there’s up some portion of most populations who probably need it most, but choose not to participate and they feel somewhat cut out of something like right in the right. Like even as simple as a wellness program, you don’t have to participate. If you do, we’ll give you Amazon gift cards, something like that. And then they say, well, I’m a working mother or I’ve got no time to do any workouts. I’m never going to go for a walk. This is ridiculous. Something, you know, there’s always an excuse, but there’s some push-back to it. You haven’t seen that in your company,

With these programs specifically? I did get a little bit of push-back because we have a financial course that at the end of it, they put together a six month budget and if they stick to it, we actually contribute an amount to their goal. But, you have to graduate from the class first. I actually did get some push-back from saying, how can we have to take this class first to do that. And I said, well, because I don’t trust people that don’t have good daily habits to follow through with a budget. So I want to make sure that we’re building, you know, step on step. So I got some push-back there. But with context, it felt like it sun-settled relatively quickly. Aaron liner. So I’ll have to look into that a little bit. One of our core values here is extreme ownership.

So if you’re recruiting the right view from the beginning, then you won’t have that issue. Very interesting. I mean, I don’t want to use the word paternalistic because it has a negative connotation, but it’s a true involvement in your employee’s lives that I think a lot of it happens in 5 men, 10 men, 20 men companies, very few hundred men. Companies really have that level of development and involvement in their employees lives. It’s very interesting. So what sort of results have you seen? I mean, how’s it gone for the 65 people who’ve gone through there?

Yeah. You know, it’s interesting. I think that it’s pretty clear that when people develop these types of traits and habits in their life, that it spills very quickly into business success as well as you might imagine that people that have gone through and graduated from the course and now doing the financial courses. I look in the room and I’m like, these are all my performers in the company. It’s pretty natural to see that occurring. Here’s the thing, I do it because I love the people I work with and I care about them, but I’m also selfish and I do it for myself because I am not the teacher that has it all figured out. I am the facilitator and a participant of those classes. Everything that we review, I am doing myself. I am being accountable to the class, because I want that accountability in my life and I want those things as well. I do it as much for myself as I do for anyone else and I’m okay with that. I think that also helps it to feel a little bit more authentic because I’m not there to teach something that I figured out. I want, Hey, I’ve got some experiences I’m going to share and let’s figure this out together.

Very interesting. I want to transition a little bit. A lot of our listeners and many of my clients, even in the HR space, are in a position where they’ve grown an operation or service team, a delivery team, but they’re still stuck in the owner as the salesperson. And I know that you have had success in transitioning from that model and I’m wondering what sort of insights you can give us on how to actually make transitioning from that founder or owner based sales team to having a sales team.

 Yeah. A high level response and then we’ll get into the specifics. Yeah. It is way harder than I wish it was and way worth it. Specifically the way that I initially approached, it did not work very well, which had nothing to do with the people that I worked with. It had to do with my approach, which was, Hey, I’m going to hire some experienced people and assume that they can just take sales off my plate. Tried that and failed multiple times. Of course I wasn’t the problem. Right. It was clearly as they’re brokering the wrong guys, bad luck, clearly. You know, in hindsight, I’m like an idiot. And I did not set these people up for success.

I’ve told that I have an employee who worked for me about six years ago. She worked for me for two years. She’s great, we’re still great friends. But she moved on to another job and at that time, that was devastating. And I just remember telling her like six months ago, like, man, I’m glad you came to work for me, but gosh, you got to admit at times, look, we made some mistakes here. Really didn’t give you a road-map to run on. Well, yeah, so simplistically what I ended up doing that, has paid big dividends down the road. I hired someone that was more multiple, still good at sales, but a little younger in their career and just said, Hey, I don’t know exactly how I’m gonna help you be successful. So how about I just close deals for you and you like to participate and I’ll even pay you the commission on them. And like, let’s just tag team this for a while and then as you know, let’s start to wean off that and allow you to become more independent and do that for yourself. So I invested in more like a 12 to 18 month process in developing two individuals. One of which has ended up becoming my head of sales and building a 15 person team that’s now regularly hitting and exceeding their quotas and those types of things.

I was really just taking the time to say, let’s do this together. I’m not going to just toss this over the fence and hope you figure it out. It is really important that you understand my vision, how I sell, what works, what doesn’t work, what are the right type of accounts, the wrong ones, the things that I’m thinking about when I go through this process. And I invested in seeing this through. And that was quite the process. You know. You’re kind of paying money for not getting a lot of output for a while. What happens if you put in all that time and energy and it didn’t work out with those people. And so it was, but it paid off and ultimately allowed us both to grow and progress beyond that. And so now I’m very rarely involved in the sales process, you know, occasionally on a very large or strategic feel. But that’s just kinda because I want to, not because they need me to. So it’s been great to see that transition happen.

Can I ask a couple of questions just about how you’ve structured some of that please. So did you bring on two people at once or did you just bring on one guy and then another guy later?

When you brought them on, you mentioned they basically got the commission. Did you pay them salaries and a commission or was it, when I close deals you get paid. You did both. Did both. So you’re putting a lot of money on, you’re putting in a salary. And then on top of that, when you close deals with them especially their first few, it’s just like, here’s the commission. Yep. For your sales team, have you ever considered, or do you currently do any sort of like transition to full commission or is it always salary and commission?

We do not do a full commission. Oftentimes, when we have new people joining the sales team, we do have a ramp down to a low. So they start with just a higher base and then ramp down to a lower base as their commissions should catch up in their ramp up time period. But for per industry averages, we do have a lower base and higher upside and commissions. So we skewed a little bit more that way. But I do like to keep a base involved there as well.

I think that’s very reasonable. We get that question a lot from people when consulting us about compensation. The pure commission move is fairly very, let’s just say difficult. I don’t recommend that. So, all right, so you brought on two guys and then you didn’t know necessarily have a formalized sales training program. You basically had them shadow you and go on you with meetings and close with you. I’m assuming just on easier accounts, you slowly move to where they’re taking the lead. Yep, yep. Just went through that natural progression. And then as you did that, were you developing sales training materials? Are you still following that kind of shadow or mentorship of you are bringing people on or is it much more structured and classroom style now?

Both. So I definitely built some of that out along the way in terms of, you know, with a lead, how we reach out, how frequency of touch, depth of touch and how we’re going through each of these stages. And we used a sales methodology that was by a local group here. So definitely a decent process that has gotten better over time and a lot of shadowing as well to get up to speed. So kind of use a hybrid. Yeah. Very cool.

When you were developing this and having them shadow you, I mean as the CEO, you’re not able to sell 40 hours a week unfortunately, right? As the founder. Right. So in the beginning, I’m assuming in their first few weeks they probably had many hours where you were trying to find things for them to do. Did you get into that or were they always pretty slant?

Sometimes, but that usually wasn’t the issue. I mean A, B, C because we’re actually good at what we do for our clients. We do it for ourselves and leads have not ever really been the issue.

Of course. So your organization, that of course is splitting the sales and marketing role. You have marketers that are working internally. It’s really at the lead generation stage that these are the lead on a discovery phase at that qualification phase that you’re bringing in your sales team. Awesome.

As far as the marketing to generate those leads, that’s all. That’s very much in your wheelhouse. That’s what you do. So, yeah. You know, that’s our jam. We actually have about over a thousand businesses a month that reach out to us now. That’s a lot of leads. Yeah.

Wow. Well, I think that’s an awesome kind of road-map for a company who wants to get into it. To check out, what would you recommend? Do you have any resources you might recommend them checkout if they are trying to make that transition themselves?

On the sales side or on the marketing side, I’m sure we’re going to get to where your website is in just a minute. Sure. You know, that’s funny. I have not read a lot of sales books. Okay. All right.

I was just curious if you had great luck, you had great book recommendations on life coaching, wasn’t sure if you’d done the sales book side of it yet and not so awesome. Well in your company, then you obviously have many different processes from sales to your actual operations in terms of generating marketing for your clients, internal HR procedures. If you could identify one that maybe has changed in the last 12 months that you’ve seen have an outsized impact, what do you think would be a process that you guys have implemented that it’s really kind of moved the needle for you?

Yeah, so our strategic initiatives this year were really to improve the employee and client on-boarding experience to make sure that it was just fantastic. And we kind of took that one level further. Obviously we don’t bet a thousand, not everyone that works here is going to work here for life and not every client that we work with we’re going to work with for life. As we kind of started, to better understand what was the vital behavior that was ultimately contributing to employees or clients not working out, it kinda came down to if they don’t see a clear path of growth, then they move on. Some simple things that we’ve put in place is just a 90 day on-boarding program that we make sure as 100% followed through on to create that experience and set clients and employees up for success.

So move the toe to maintain the adherence to the systems. You move the sign off to the end user, right? So kinda like in HR one-on-one, you have your employees sign off their time-cards, right? You did work these hours. We’re not just making it up, you’re saying that. But with your performance management systems, your client’s systems make the end user say, yeah, that’s what I want.

And if there’s a problem, then you identify it there. I think that’s an excellent process. Yeah. Rather than letting things faster. And that’s usually what leads to not only a failed relationship, but one that didn’t need the end the way it ends. Right? Like if it’s not the right fit, let’s come there together.

Right. It’s not a failure or is going to happen. It’s those ones that you could have done. Right. It’s just that we just didn’t know. Or same with an employee’s needs. Like this employee could have been great. We had something wrong here.

We didn’t quite see it lineup.

This removes that word or at least mitigates it hugely by giving them the opportunity to speak up. Do you do your one-on-ones each month? Is that your kind of, is it a monthly one-on-one thing?

Yeah, it’s kinda like a quarterly deep dive. Monthly check in and action items for the month to work on with one’s manager in each of those areas. And then the side by side time comes to. Here’s what we’re working on, here’s the progress we’ve made this month, here’s how we’re going to work together this month as we get together to make progress in each of these areas.

And your organization, what’s your kind of manager to employee ratio, your team size, a scope of work, scope of scope of team? Some companies, you know, say a manager should never have more than five direct reports. Some say 15. I’m just curious where you’re at.

Yeah. And you know, it depends on the world, depends on the role of the department. I would say if I were to just stick a number that I don’t like to go beyond is, six to eight max for a senior manager in the right situation. And prefer to be more in the three to six range actually.

 So with three to six, do you have a pretty flat organization, lots of small teams or do you have a kind of a, you know, super team, lead manager, assistant manager, manager kind of stacks. How vertical would you say your organization is?

You know, it’s been relatively flat today. We do have a lot of small teams, but it does now roll out through, you know, team leads, directors and then VPs. Some of that more traditional hierarchy has introduced itself over time.

It gets a bad rap in today’s, I don’t know, Google a Google centric world to have a hierarchy.


But it gives people places to grow too. It’s an intuitive way of organizing the company. We recently did an interview where someone was working on, it’s a very interesting company. It’s actually a game design company and they wound up, they had around 35 to seven man teams per manager. So it’s like each, there are 30 teams with a C with a S with a manager of five to seven people. And then this one guy has 30 teams reporting to them and it’s very, very flat. They wind up in competition.

It’s very interesting. Thanks. I’m looking for feedback and interesting ideas as we just talked with more of our experts on the podcast. So I appreciate you giving me that well, Jake. You of course work in the P P P pay-per-click in this world of online marketing. If our listeners have been hearing you talk and they go, man, this sounds like a great organization work with, I’d like to learn more. What should be the thing that triggers in their mind that says, you know, I should reach out to Jake and his team to see if we can work together. What’s a scenario they’re in that maybe would be a good reason to reach out to you?

Yeah. We’re struggling to figure out how to get it to grow or be a little more profitable, but it’s a viable model and we lack the bandwidth or expertise in a digital marketing perspective to accomplish that. And so that’s where people reach out to us. Like I said, we have a lot of companies reach out to us and we actually tell like 80% of them that we are not the right fit for their stage, for their industry, for what they’re trying to accomplish or that they just don’t have realistic expectations.

Right. I have $300 a quarter to spend. Can you set up a PVC?

Yeah. And we’re still glad to have those conversations because we can point people in the right direction. We have a blog where we publish, we have no secrets. Feel free to follow that on we shared that we spilled the beans on everything that we do and companies that are in that stage of, Hey, we either lack the bandwidth or expertise to effectively advertise on Google, Facebook and Instagram. That’s where they hire us to do it for them or support them in that process. And that’s why companies reach out to us. That’s where we help them. We’ve actually now got thousands of companies under our belt and done research that shows 76% of ad dollars spent on Google. Facebook and Instagram are wasted because they lack the bandwidth or expertise to do it right. And that’s where we step in, help get a better bang for the buck and improve output and growth for the company.

Yeah. I’m a very tech savvy guy. Built a lot of the tools we use here at the company. And all of my growth has come from pretty much traditional stuff podcasts as well. The book does well, that kind of stuff, but that leads to just very basic, you know, connections and referrals and that kind of thing. Every time I’ve tried to truly explore the world of online spend $1,000 here, $1,000 there, I don’t think I’ve ever really gotten a true, I mean, I may pick up a client for, you know, $17,000 in ad spend and then give up and say, I’m never touching social media again. So we post all the time. And then like every once in a while, I have a marketing person who really works on our referral channels and our partnership channels and that kind of stuff. And everyone’s while she’s like, Hey, we should run a, you know, this is a great podcast.

We should promote it for 200 bucks. Sure. Go for it. But we don’t actually expect that to turn any into any business. I think a lot of companies haven’t quite figured out that online game. What would you say the smaller size, what would be kind of the intro level size that someone should come contact you at? Yeah. So that will depend on the industry. In some industries we’re paying a couple of dollars per click on an ad and others we’re paying like $100 for a click on an ad. And so for some industries, you know, we’re operating with between management fee and budget, and like the $5,000 range is probably on the small end. Our average clients are usually spending between like 10 to $100,000 a month on those channels. And we just helped them get a lot better performance out of them. And of course we’ve always got a couple of dozen enterprises or 500 fortune, 100 type companies that we’re working with as well. And so, that’s probably a good summary of how we kind of fit in there.

Well, Jake, man, I sure appreciate you coming on the show. It’s outstanding to talk to a business owner like yourself, grown up. Everybody check out link in the description below. Go on there, take a look, check out their blog. If you’re trying to start out on the marketing side yourself internally. I’m sure there’s a lot of great tips and tricks on there. If you’re one of our larger listeners who has an ad budget and wants to talk to maybe get an audit to have someone else take a look and see if you can get more bang out of your spend. Definitely reach out to Jake now. Jake, where can they find you? A and where else?

That’d be the best place to reach out to us as a company. And I’d love to connect with you on social media at Jake bad’s garden on Twitter or throw in some A’s and you’ll find me on LinkedIn as well.

We’ll put the link below. I’m with you. It’s a hard name. We’ll make sure there are links below to connect on there. Reach out to Jake if you guys have any questions. Well Jake, thank you so much for coming on the show. I very much appreciate you coming out. Thanks. Appreciate it. Ladies and gentlemen, that’s it for today. Hope you enjoyed our interview with Jake. Bad’s guard over at disruptive advertising. I think you gave some great insights. It’s an interesting organization that he runs and one that’s deeply involved in his employee’s personal growth and development and it really, it’s unusual in a company of that size. Of course in the 10,000 man companies, there’s always some personal development focus. I find the idea of, you know, having them do buy in and then doubling their money.

What an intriguing idea. If you guys have questions about this or want us to explore it further, maybe do a white paper or bring Jake back on or his HR people to talk in more depth. Let us know. You can of course, find us on LinkedIn, Facebook and Twitter at Poplar financial. Check us out at subscribe on there if you haven’t already. You can access some subscriber only content, and of course you can find us on whatever Podcatcher of your choice, whether that’s Stitcher radio, iTunes, Google podcasts, a subscribe on there for updates and upcoming episodes. Thank you so much for tuning in. Ladies and gentlemen. My name is Rhamy Alejeal and now it’s time for you to go out there. Have a great day, and get your work done.

Learn more about Jake here:



Twitter: @jakebaadsgaard

Skype: jake.baadsgaard

Q&A: Does Workers Comp Count against FMLA?

Good morning, Ladies and Gentlemen. Welcome to the people processes podcast where we dive deep into the tools, laws, and yes processes that you need to scale and grow your people processes. I’m your host, Rhamy Alejeal, and I’m the CEO of People Processes. My company helps organizations all across the United States streamline, optimize, implement, and revolutionize their HR operations. We’ve helped hundreds of companies and thousands of HR leaders across the world get their people processes right. Today, we’re going to be answering some questions that have been submitted either by our clients or through our social media. Please check us out over at Facebook, Twitter, Instagram, LinkedIn. You can find the links at where you can ask any questions like these that are going to come up in our Q&A today. Specifically, we’re gonna be talking about FMLA and workers’ compensation. We’re going to be talking about required religious holidays and a few more topics. Before we dive too deep, though, I want to ask you, please subscribe to our podcast. You can find us on iTunes, Google podcasts, Stitcher, Spotify, pretty much any pod catcher of your choice. You can also subscribe at which will give you exclusive subscriber only content.

Now let’s dive in. Okay. First question.

Are employers required to grant employees time off from work for religious holidays?

That’s a good question. Title VII of the Civil Rights Act. It says that covered employers must make a reasonable accommodations for employees religious observances. So if you fall under title 7, which generally applies to employers with 15 or more employees, though many state laws create similar obligations for smaller employers. But at a federal level, 15 or more, you fall under the title 7 of the CRA. The act clearly States that, an accommodation for an employee’s religion must be made. The only way you’re out of that is, if the employer can demonstrate that they are unable to reasonably accommodate the religious observance without undue hardship. So that means upon request, you would open a file, you would look at it, you would say, this is the request, this is the burden on the company. We cannot support that burden. That burden is undue.

According to the EEOC, an accommodation may cause undue hardship if it is costly compromises workplace safety, decreases workplace efficiency, infringes on the rights of other employees or requires other employees to do more than their fair share of more than their share, no fair of potentially hazardous or burdensome work. So the way I would do it if you’re a smaller company and you’re worried about this. Request, wants religious holiday, employee name, date of request, who was requested to a manager name or whatever. And then the HR or a small company business owner stick this definition right there at the top. EEOC says this and then determination. This would or would not cause undue burden. And then resolution granted leave. One thing to know. Federal law does not require employers to compensate employees at all for time taken off in observance of a religious holiday practice or belief. So if you don’t have a PTO policy or something like that, you can let them off unpaid.

However, an employer must offer the same options for religious holiday requests as it does for other time off requests. So you have to let them use their PTO if they’re going to use that, whether it’s vacation or personal leave, those sorts of things. Hope that answers your question. Again, start a file. Do your EOC check on undue burden. Make your determination. You do have to check it though.

Okay. Next question.

Can an employer require its employees to use their accrued PTO during an employer-required lay-off or time-off or furlough? And If salaried exempt employees worked during the furlough, how is pay calculated for these employees?

Okay, those are good questions. An employer can require employees to use PTO accrued, if that’s vacation or personal, whatever it is during a furlough, during a layoff. If an employer has no accrued time off, the employer can even put the employee into a negative pay leave balance if you would like. So you could continue paying them, let it go negative, require that be paid back upon resumption of work. Even while furloughed, however, FLSA applies to employees. So the fair labor standard act mandates compliance with the salary basis requirement for salaried exempt personnel. So if an employee performs any work during that week period, for a salary basis employee FLSA exempt, the employer may not dock the employees pay for the absence. When a furlough is for one week or more a full week, something like that. Federal law generally does not require payment to the employee. So if you’re going to lay someone off or you’re gonna have to do a temporary shutdown for a low, you’ve got to look at whether they’re salaried or hourly. If you’re going to do salary, you got to pay him for the whole week period if they work any hour of that week. One thing to also keep in mind that I didn’t ask about this, but during a furlough for the legal term of that, you are required to continue occurring vacation days, sick days, personal days, and to continue to receive other benefits such as health insurance. So hope that helps you out there.

Next question.

Does workers’ compensation leave count against an employee’s FMLA leave entitlement. And how do temporary disability plans fit within the Family Medical Leave Act?

Okay. Let me clear something up. FMLA leave a family medical leave act. It protects the employees job and benefits during the leave for up to 12 weeks in a 12 month period. There are some exceptions to this. The spousal exemption is actually my favorite, most common, where you share these things in a lot of ways with a employed spouse at the same organization. But the key is FMLA leave is unpaid. It’s a job protection and benefits. It is not related to pay. Workers’ comp provides for treatment for a work related injury or illness and partial wage replacement. So it’s a disability policy. It would run concurrently at the same time with leave under the FMLA at leaves you, what you should do is designate the leave is FMLA.

As soon as FMLA leave starts, as soon as that eligible workers’ compensation illness or injury starts and it requires that the employee be out of work, it starts then. That’s their 12 weeks of protection. But the pay is related to the worker’s comp. If your company, if your employee qualifies for any sort of partial disability plan, whether that’s workers’ comp or some other disability plan, it’s going to run concurrently with FMLA leave disability plans, workers’ comp, they provide for wage payment. FMLA provides for job and benefits protection, but not pay. Hope that clears up for you. In the process of our last question of the day. Hope this has been interesting to you so far.

In the process of auditing I-9s, we found some I-9 forms containing incomplete or inaccurate information. What should we do?

Okay. You do not want to get new ones. Let’s start with that. If information on an employee’s I-9 is incorrect or incomplete, you can make corrections near the incorrect or incomplete space in the employee’s I-9 that had the errors. The employer and the employee have to work together on it. What you want to do is draw a line through the inaccurate information, write the correction on the form using a different colored pen. If you did this digitally, you need to print the copy, do this on paper, scan it back in. Okay. So anyway, I’m sorry. I printed it off, draw a line through the inaccurate information, right? The correct information on the form. Use a different color pen and then initial and date the correction, both the employer and the employee. Missing information should be provided initial dated and a written explanation. I’d put it on the front as to the reason for the change attached, not on the same form, like an extra one.

I would make a note that the file was a self-audit that was completed on that date. So if you have like five or six changes or 50 or 60 changes to make, I do your I-9, I’d put up, you know, internal memo in a self-audit was completed on December 31 2019. The following twenty I-9s had corrections brought with the employee, make those pieces, make sure the signature relates to the attestation. So remember that there’s a signature line of the I-9. It says, “I attest under penalty of perjury…” So you want to put that, you want to make sure you’re signing near there. If you have a cover letter, you want them to sign on top of it. I wouldn’t do that. I would just have them initial and date the corrections and sign at the bottom

If your company is audited, the examiners will want to have proof that you exhibited good faith effort to audit your records and correct the deficiency. So it’s a good thing to do. You’re not going to get me in worse off shape. Having audited founded errors and corrected them. You just want to make sure that it’s obvious that you’re not covering it up. You used a different color pen. You got it straight, cleared up, made a note, signed at the bottom. It’ll take care of you.

Okay, ladies and gentlemen, that’s it for today. I hope that was helpful to you. I hope you learned a little something. Please check us out on our social media pages and subscribe at or on the pod catcher of your choice. We’re going to be coming out with episodes every week. We’ve got a lot of interviews coming up for 2020. I’m very excited to get to know some of our new guests and share their wisdom with you. Thank you so much for tuning in. My name is Rhamy Alejeal. Now it’s time for you to go out there, have a great day, and get your work done.

Do you have a Performance Based Bonus Plan?

Good morning, Ladies and Gentlemen. Welcome to the People Processes podcast where we dive deep into the tools, laws and yes policies and processes that you need to scale and grow your people processes. I’m your host, Rhamy Alejeal and I’m the CEO of People Processes. My company helps organizations all across the USA streamline, optimize, implement, and revolutionize their HR operations. We’ve helped hundreds of companies and thousands of HR leaders across the world get their people processes right.

Today, we’re going to take a look at a new study that’s come out. A survey that says, the pervasive use of short term incentives among private employers is now at 99%. We are talking about what that is, why it’s important and why if you are one of the smaller private companies, you need to be taking a look at it too. Before we go deep, I want to ask you to please subscribe to our podcast. You can find us on iTunes, Google podcast, Spotify, Stitcher, pretty much any podcast or of your choice. You can also subscribe at which will give you exclusive subscriber only content. Okay. Let’s dive right in.

Short term incentives is this, the use of it across almost every larger size private employer shows the desire to reward employee performance and compete for talent in a tight labor market. Even nonprofits and government organizations, 68% of them make use of short-term incentives. These are the two of the primary findings caption. The 2019 incentive pay practices, privately held companies and 2019 incentive pay practices, nonprofit government organizations which were conducted by worldwide work in partnership with compensation advisory partners. These surveys go all the way back to 2007 and have now run every year. Some of the key findings in this report is that spending on STI reflect 6.5% of all operating profit at median up from 6% or down from 6% in 2017 and up from 5% in prior years.

So 6.5% of operating profit at medium, up from 6% in 2017 and 5% in prior years. Got my columns off wrong. Companies are allocating more to reward, attract and retain talent. Let’s talk for a second about what an STI is. A short term incentive. That’s basically a bonus tied very tightly to a specific project, a KPI, a weekly, monthly, quarterly project. It’s not an annual bonus or it may be an annual bonus but it’s not something based on like long-term company profitability like equity. Like large companies a lot of times offer stock options. Those are example of a long-term incentive. Short term incentives are, Hey look, we’ve been this year or this quarter or this month you’ve got this project done, this job, we’re going to do a bonus. And if you look across larger privately held organizations, now 99% some method of that short term incentive and end the nonprofits 68% and small government are using it is blowing me away. Annual incentive plans are the most common type of STI. Those are at 86% compared to spot awards. Project bonuses as firms seem to be consolidating their STI spending unstructure. Structured annual incentive plans that can incorporate company-wide financial metrics and other objectives rather than it being that more project-based. There is an uptake in long-term incentive plan, 62% versus 54% in 2017 which means that they are as a lot more people who are offering equity or profit sharing match over the long-term, those kinds of things.

One of the most compelling takeaways of the 2019 survey is the increased use of LTI plans by private companies said Sue Holloway, CCP CCP director of an executive compensation strategy world at work. She went on to say private companies realize they need this total rewards component to up their game to compete with public companies for top management talent. Regarding the nonprofit sector, three out of four, 76% nonprofits use STIs in some way or another. For these organizations, STI spending is around 2% of operating budget at meeting median. So take all of your operations budget, which a nonprofit is like most of it. 2% of that is going to some sort of a short term incentive. On average, the most common type of STIs are still those AIPs, the annual incentive plans. But, spot award programs are much more common or more prevalent in nonprofits compared to AIPs, in at least compared to private industries with discretionary bonuses, project bonuses, team, small group incentives and profit sharing plans.

Also in the mix, STI plans are being simplified as nonprofits getting used to having these plans as reward tools. The prevalence of organizations using 10 or more performance measurements in their annual incentive plans decreased in 2019 and more. Organizations now report using four to six performance measures. Long-term incentive plans are used by a small minority with only 22% reporting and LTI plan in 2019. A lot of those LTIs are probably for HighQ,. High end executives, right year over year over year growth in your nonprofit, perhaps the, executive director or some of your executives may have some long-term incentives. One of the most interesting trends this year is the decrease in the number of performance measures used by nonprofits, said Bonnie SJ, Lender, principal at CAAP. Four to six performance measurements are now prevalent reflecting a move towards more holistic but manageable incentive management frameworks.

Discretion also continues to play a role in incentive decisions given the difficulty in measuring performance objectively without a true profitability metric. So this survey is very interesting and I just want to kind of hit on a couple of big ideas. If you are a smaller nonprofit or a private company and you’re doing a flat Christmas bonus, everyone gets $50, nothing wrong with that. But short term incentive plans, annual improvement, annual incentive plans are huge and everywhere. They’re a great way to control to incentivize good behavior. In order to do any good performance management, you have to take a holistic approach. You have to know what the objectives key results are you’re trying to accomplish in a year. You have to know what KPIs measurements you can use that are objective to measure the performance of your employees. It’s a big process.

At we have a week-long deep dive into performance management where we dive in deep on how to structure all of that and bring ideas. Even have templates and that kind of stuff you can use to distribute to your organization. But for those of you who already have one, just keep in mind that the good numbers are 2% of operating budget for nonprofits and 6% of operating profit is going to STIs. So if you take your profit last year, take 6% of that, set it aside. That’s about your short term incentive budget. A 6.5%, actually now in 2020, 19 up from 6% in 2017 and 5% in prior years. So take a look. If you’re looking at your profit and you go, Hey, you know what? I don’t know how much to allocate to bonuses to, to this kind of stuff.

That’s what you want to do, but you don’t want to just do a blanket. Let’s say you had $1 million in profit last year. You want to say, all right, my budget is 65,000, but you don’t want to just spread it out among your employees, not evenly based on their salary. You want to have a plan in place. If you’re thinking about jumping into this, put your plan in place in January or February, run the whole year and do it at the end of your next year or however your fiscal year runs. Nonprofits, like I said, around 2% of operating budget is the most common. Let me know what you think. Speak in the comments message as you can always email us at service,at people processes or find us on Facebook, Twitter, LinkedIn, Instagram, and message me on there. I’d love to hear your thoughts about, does your PR, does your budget reflect a 2% for nonprofits into short term incentives like bonuses. What about your company profit? Are you doing around 6%? Are you doing a lot less? I’d love to see how this applies down into some of our local companies.

In the meantime, take a look at what you’re going to do for 2020. If you’re thinking about pay raises or budgeting for bonuses, lean towards bonuses, this is going to be a great opportunity to truly control. To provide the right incentives for the behavior you want. And this as a manager or an executive going to be one of the biggest bang for your buck in terms of both spend and time spend that you take to put this together. All right. That’s it for today. Ladies and gentlemen, I hope this is helpful. On our website we have all these numbers laid out. Hey, listen this on the podcast. If you want to check us out there, I’d sure appreciate it. Subscribe on there for some special subscriber only content. Follow us on LinkedIn, Twitter, Instagram, Facebook. Love to hear from you on there. Now it’s time for you to go out there, have a great day, and get your work done. Thanks for listening.

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