Podcast Transcript

Narelle Andersen, founder of Envirobank

[00:05:17] Narelle Andersen: In business, it doesn't matter what the business is. We're not quite in the robot area yet. So, every business relies on people. And there is a saying that a business is the sum of the people that work there. And I do strongly believe in that, if you have great people, you have a fantastic business. And so, the challenge for any Founder is to find those great people. And whenever I talk about people and talk to my people. We always talk about being on the bus. So, running a company is a journey, owning a company is a journey. You know, we talked about the growth at the beginning of this chat, the growth of Envirobank.  Well, that's a journey, you're not the same company at 5 million that you are at 25, that you are at 35 and along the way you need different. So, if you think about that as a bus ride, different times we need certain types of people on the bus to drive us and get us to the next station and then we need to swap out. 
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[00:06:20] So, it's really for us about being very transparent with people that come to us, finding out really what they are looking for in terms of their career journey. And we really make a concentrated effort to enable people and give people the skills for their next stop. So, gone are the days when people came into a company and stayed in the company for 10 years, and that was like a badge of honour. We do have a number of people that have been with us for that time. But more often these days, you see people changing roles in the three-to-five year mark. So, we just need to… we put systems and processes in place to make sure that along the way, while people are adding value to our business, that we are adding value to them and to their potential career path. And for me, I get super excited about that. So, more recently, one of my team leaders up in Queensland wanted to tell me that he was leaving to start his own business. And I was over joyed, super sad to see him go because he was a rockstar, but super excited that he had learned some things that Envirobank that were going into enable him to start a business on his own, and we offered him the opportunity while that business was starting up to work with us casually, because cashflow is a bit of a challenge, and I think he was a bit surprised. But you know, I'm always super excited to hear what people are doing next. And when you do that, you get people that are more engaged. 
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 Anneke van den Broek, founder and CEO of Rufus & Coco

[00:08:02] Anneke van den Broek: I think the other thing is people. At the end of the day, there's 24 hours in each day. And we need great people to get things done. And I think my entire day yesterday was spent on people problems, actually, everything from hiring to dealing with problems, to dealing with all sorts of… I spent my entire day yesterday dealing with people. And so it can be really tricky, but it's just a necessary part of growth and getting the right people in the right seats is actually something I do relentlessly all the time. And then making sure that if they're on the right seats, are they still the right people for the next five years, next five years. And this thing we've got a checklist where we as a leadership team say would I enthusiastically rehire this person. And the word enthusiastic is very because it's like, oh, they’re really good because they know a lot about everything. I'm like, yes, but are you enthusiastically rehiring them. And you know, obviously we're working to always develop and grow our people and many of them have done things that they’ve never dreamt of doing themselves, which is so cool to see. 
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Matt Forman, founder of XPON

[00:09:23] Matt Forman: Yeah, absolutely. And I think one of the symptoms of it is blame. Because I think if you're in an environment where you don't feel psychologically safe and you can't say what's on your mind, or you can't make mistakes and learn from them, then you start blaming others. You start blaming everything but yourself. So, like you see that manifest itself very, very quickly instead of…it was one of our core values is, own it. So, you know, you own your outcomes no matter what happens, if you've made a decision, you own it, good or bad. And sometimes for their words, and they're nice words, but actually living that day to day, you see people on a different kind of spectrum of how they respond to that. And as they start to feel safe, then they go, okay, it is okay if I own this, I don't have to try and place blame or shift blame or anything like that. So, I think that's one of the symptoms of it is, is that most definitely.
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[00:10:13] I think the biggest challenge I’ve had as the Founder and the CEO is getting the balance right between autonomy for my team, my senior executive team. And like I said, we brought businesses in that have founders, so they're used to being autonomous as well. And that's part of the secret sauce for Xpon is, you've got this Founder led mentality. But trying to get that balance right between giving them too much autonomy and then things happen in silos and they're not consistent, and being able to provide enough sort of structure and influence, I guess, to say, well, these are the things that are non-negotiable as far as how we need to do things at Xpon right now, because you don't get economies of scale if you've got different people in different business units doing different things, and that's simple things. Using different CRMs, for example, because you were buy a business that using one, we've used a different one. And, you know, I think their growing pains for any business that has acquisitions, as well as those systems integration, that people integration piece.
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[00:11:12] I had a mentor. I was a general manager of a company where I had a job back in the early 2000s, so very early in my career. And he said to me, when it comes to recruiting, he said, "If you need to talk yourself into it, talk yourself out of it.” And that stuck with me. And I say that to all of our team when they're hiring as well, is if you're sitting there going, oh yeah, maybe, and you're trying to convince yourself, not the right fit. Talk yourself out of it and move on. Hard in a very tight labour market to be true to that. But you have to, otherwise, you're going to bring people in your business that don't fit your culture, might not have the right skillset, and that's going to impact your customers as well. So that, for me, simple advice, but I stuck with me and I use it every day, still 20 years later.
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Bryan Watson, co-founder of Ovida

[00:12:00] Bryan Watson: What we could do though, is we could get really smart, robust, ambitious people who valued the ability to grow and develop in a great team above the immediate benefits of higher salary or the corner. So, we looked really hard for people who are motivated by personal growth, possibly quite early in the career. And we looked for the diamonds in the rough. We looked for people who maybe didn't have that massive corporate career behind them, or they didn't have a massive job lined up, but there was something about them that we liked. And we recruited hard and heavily and spent a lot of time talking to people, and in the end we ended up with a team of people who were responded really well to autonomy. And I guess a step back is what kind of culture were we trying to create that we sold to these people, it was massive amounts of autonomy. It's a small business with a lot of ambition. We’re not going to micromanage you. We're not going to tell you what to do. We're going to create opportunities for you. And we're going to spend all our time creating opportunities and pointing you in the direct of amazing opportunities and things that can be done. And then we want you to go, we're not going to hold you back. We're not going to bog you down with bureaucracy, we’re also going to have an incredibly open and transparent, a radically transparent culture where everyone talks about everything and we all learn across the business. 
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So, one of the pitches to our sales guys, you're going to come in, but you're going to learn about the factory. You're going to learn about the product in the back end, because we are not siloed, and everyone speaks to everyone all the time. So, we, as a senior team, our job, we believed our job was 90% just talking to our teams and our customers. It was constant communication, constantly putting people together, making sure people were learning. And then a huge amount of individual, sort of independence. So, if you wanted to go and surf in the morning and come in at lunchtime, there was no one going to hassle you about that as long as you were performing. And so, we allowed people to balance their life with their work, but we asked a lot of them at work in terms of what they delivered, but then we also gave them a huge amount of space to determine how they delivered that and when. And as a result we attracted, self-motivated, driven, ambitious, creative people who valued the opportunity they'd been given and didn't resent the fact that the office wasn't that great, or they didn't have the best parking space, and it resulted in very little politics, because those kind of people are all pulling in one direction and they're too busy to be political or complaining or whining or getting involved in criticising the factory because something wasn't right. And then that culture builds in itself. So, people start saying, this is a great place to work and then great people find great people, right? So, after a while, our best people came through our people. They tell other great people that it was a great place to work. And so, I think we ended up with a team that was vastly more competent than we probably had a right to deserve in the kind of space we in.
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[00:14:56] Our transparency went very deep into the business. So people, a long way removed from the sort of executive C-suite understood the impacts of the actions on the financials of the business and why it mattered and were therefore able to make good decisions in the absence of a senior person telling them, you know, you can do it within this range or within that range, or… and so the principle was push decision making as far from the centre as you can, as close to the customer and to the factory floor as you can to do that, you have to spread information as far out from the centre as you can. And that requires trust because people get information that can be used competitively against you. And we had some instances where people abused information, but the net benefit way outweighs the risks. And we had the same approach to buyers and potential strategic partners.
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We were consistently more transparent than they expected us to be about what was going on inside the business, what we were developing, what our financials looked like even, and that transparency brings to the risks that people could come and compete with you. My argument was always if knowing one or two financial metrics from our business helps someone come and beat us, then we've got a very tenuous, competitive advantage. Our competitive advantage has to be deeper than someone with a look at our EBITDA margin can come and compete with us. That just can't be, if that's what you're relying on, you're in serious trouble as a business. And the second one was, if you're transparent with people and they're see you being consistently transparent, then when you do tell them something down the track, they trust you because you've been transparent. And I think that played a really big role in our exits. You know, we had two consecutive due diligences by international list of businesses, one from Italy, one from Sweden, and they sent teams of lawyers from London and the us and the feedback we got at the end of those due diligences was it's exactly what you told us. There's nothing that you didn't tell us up front. And we are a little surprised and concerned that we can't find anything that you haven't told. 
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And so I think for me, that process of establishing trust over a long period of time by being transparent and consistent is a hugely important driver or value in a buyer's mind when they're buying. It takes away a lot of the risk from them in terms of, is there something here that I'm missing? And we had the same rule with our board. It was absolute transparency on bad news, when there was bad news in the business, they knew within 30 seconds, I was on the phone. This is what's gone wrong. This is what's happened. This is why. This is what we messed up. This is what we're going to do to fix it. And so, when you're bored here instantly from you, that there's a problem, then they stop asking you questions all the time, because they know you're going to tell them, they don't have to dig. Same with buyers, and same with our staff internally. They didn't have to think/wonder if there was a subtle underlying agenda because it was just open. This is what we're trying to do. And that transparency has risks and some people really don't like it and it doesn't fly in some environments, but for me, it's simplified the matter of building trust; massively and trust is central to achieving anything great in a business.
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[00:17:57] The first is you'll hear it all the time. You'll never get there without the team, the team and the everything, most important asset of people. If you truly believe that, then you have to take that all the way to its logical conclusion, which is I will trust these people with everything, I will align with them on everything and I will show them everything. And if you find high potential people with lots of ambition and you show them open green fields and say, go get them, I've got your back no matter what, I've got you, but I want you to be brave. I think you would be astonished what a team of people can achieve. And I was constantly astonished by what our team achieved. From the size of operation we were and the people we were competing against, we just punched above our weight all the time. And it was down to one thing and one thing alone. And that's the incredible group of people who were doing it. And now as a Founder in a smaller business, I'm sitting at the other side where I'm not building a team off of an existing base. I'm building a team off of nothing from a start. I'm just becoming deeply aware again how central it is that the people you get along for the journey are the kind of people you want to be with in 3 or 5 years’ time. So, yeah, getting the right people on board, getting the right people on board as early as you can, being prepared to take the risks, to give those people responsibility and let go of the regins and let them exceed, what you could do is the difference I think between an average business and a great business. 
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Liz Wiseman, best-selling business author and leader

[00:19:29] Liz Wiseman: Finding people with the right kinds of mindsets, I think you can use a lot of the ideas from behavioural-based interviewing to do this and like kind of the little acronym for that is a star situation, a task, an action result. So, behaviour-based interviewing is the assumption that people's past behaviour is the best predictor of their future behaviour. So, if you want someone who takes the lead, you ask them about a situation where they had to take a lead amid ambiguity, what was the thing they had to do? How did they do it and what happened? So, my recommendation is to adapt that technique a little bit. I call it a SOAR - a Situation, an Outlook, and Action, and a Result. So, you know, if I want people who are comfortable with ambiguity, with messy problems, like tell me about a time you dealt with a really messy problem where, which is really unclear. You know, like it didn't belong to anyone and then I don't want to go right to what did they do? Here's the piece, it's the O part of that is I want to know their outlook. I want to know how did they think about it. Was this messy problem an inconvenience? Somebody else's job that they had to come in and save the day, or was this ‘Hmm, sort of a delicious problem.’? Like, oh, this is interesting. Like it's not really my job, but actually, but this was like the most important thing to the company. So, like, this is like… and so I want to like spend a lot of time understanding how they thought about it, because how they thought about that is how they're going to think about these problems.
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So, use this SOAR technique and really… It's funny, I've used this myself and everyone wants to move off of like the O part and get right to the A, the action. So, it's Situation, Outlook, Action, Result. And I'm like; no, tell me a little bit more about how you thought about that. Like, what was the assumption? What were you telling yourself? And it's funny to be like, people, like, why does that matter? I'm like, oh, that's what we are hiring. We're hiring a mindset, not a skillset.
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[00:21:34] It's not even about finding those people. It's about deserving them in your organisation because if you…Like, I think, you know, I've studied these people. I've worked with these people and they're not going to go work for just anyone. And if you hire someone who is rangy and flexible and adaptive and like moves towards ambiguity, and then you put them in a box.
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And you know, you have to be the kind of leader that those people would want to work for. And you have to build a culture where those people will stay and you have to probably most importantly, build a culture where that mindset can spread. Because I think the impact player mentality, it's like sourdough bread, which we hear in San Francisco are pretty good at. And it's all about a starter. And if you have the starter for the sourdough in the right environment, like you keep it warm and you kind of feed and nurture that starter, like it spreads like crazy. And I think this way of working is how most of us want to work. But if you create an environment where that's singled out or not supported or diminished, it won't spread on a team and then you'll get those people who aren't growing, or they're overly taxed. You get jealousy issues. Like how do you spread the mentality?
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[00:23:06] Number one, define what I call the win. What's important now? Like let people know what the agenda is. What's important in their organisation so people can flow to it. Like, don't keep that a secret, keep reminding people. Here's what's important. Number two, we talked about it rotate leadership roles, treat leadership as temporary, not a position on an org chart. You know, number three, if you want people to finish strong, define the finish line. Like here's how we know we've done a great job. Here's how we know we're done with this job so that they can get all the way there. You know, give people performance intel, not feedback like intel that helps them adapt and adjust. It's like kind of stripped-down sterile information. Hey, that's off target. We need more of this, less of that. And lastly, if you want people to be easy to work with, just state what you appreciate, like when you do this, man, it makes it easy for me to make a fast decision and let people like, describe that pause of behaviour and let people move toward it. And then if you want to create a warm environment for impact players, just bring together two things; safety and stretch. I'm summing up like everything I've studied for a decade on leaders who multiply talent is they create a safe environment, but they create a stretch environment. Do those, and that mentality will spread.