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In this episode:
02:15 – From lawyer to business owner
03:28 – When you don’t want to be the front man
06:38 – What is a customer worth to your client?
08:16 – The key to hiring great talent
10:54 – Systematizing the hire
13:48 – After setting coordinates…
20:48 – When you need to let them go
24:43 – Do people like working for you?
30:46 – Roles with the most leverage
32:08 – The no news update
36:37 – Wrapping does count
41:05 – A team horror story
45:03 – Summing things up
Build your team with direct help from James who has been there and knows how to do it.
James: James Schramko here. Welcome back to SuperFastBusiness. We have a special episode today. We’ll be talking about team, and we’ll be particularly focusing on the topic of building a team from your Western labor force, not just an offshore team, which we talk a lot about on this show. So, it’ll be really fun to have a discussion around this. I’ve invited a special guest, Raj Jha, welcome to the show.
Raj: Hey, James. Thanks for having me on the show.
James: This is an absolute privilege for us because I’ve been tracking your success for a number of years now since we first met in Los Angeles at a Strategic Coach workshop. I’ve watched you evolve your business model, because I think you’ve gone from being a practicing lawyer to building out a successful agency catering to law firms. Is that about the gist of it?
Raj: Yeah, that is, and even within that, some of the changes from a relatively low-end commodity service business to something that commands a significantly higher price point, so we’ve had to undergo a lot of changes to do that.
“It’s healthy to embrace change and to see the opportunities in it.”
James: Yeah. As we all do, we have to navigate the changing fabric of business and adapt. And I think it’s healthy to embrace change and to see the opportunities in it.
Today, I think it will be worth covering some of the things that have happened to you over this journey. You run a firm called PracticeAlchemy.com, which I’m sure would be very appealing to any lawyers listening to this, especially if they’re United States-based and they need some help with their marketing. But assuming that not everyone listening to this as a lawyer, a lot of people who listen to this show do have service agencies or are building a business where they need to have team beyond just themselves.
From lawyer to business owner
So, I guess we should start with this first part, and that is, let’s talk about the shift that has to happen when you go from Raj the practicing lawyer, to Raj the business owner. I imagine there’s a few steps that have transitioned there.
Raj: Yeah, in various ways. I mean, fortunately, when I was an attorney, I did build a firm that had a team. So, I had some exposure to that. Subsequent to that, I also went to a client in-house and was a chief operating officer, so I had a little bit of experience there, but kind of more salient is you jumping into a whole new field. And I went from attorney to marketer and running a marketing agency.
And of course, you start just as yourself, and you have to master the doing of the thing yourself, and then, ‘Oh, I’ve got too much’, and you hire an employee, and then you try to leverage yet more. And then, you know, you talk a lot about having teams in the Philippines, which is one of the ways I started as well. And it kind of grows a little bit organically until you wake up one day and you realize, ‘Oh, there’s a bunch of people here and I really need to get more disciplined and organized about who I’m hiring for what and why.’
So, I would say that probably the first two or three years was little more than learning about that, that makes about what you’re delivering, how to deliver it, and who best to have on the team to do so.
When you don’t want to be the front man
James: And I think one of the really important distinctions here, and I see this a fair bit with agencies who aren’t coaching in particular, you can’t hire people in the Philippines for some of the roles that you will need in an agency, especially if you don’t want to be the frontman and you have a high-level of customer communication. Are you finding that?
Raj: Yeah, I probably am finding that on an extreme example from many other services businesses, because we work with lawyers. And lawyers, as you know, are so particular about language that a misplaced apostrophe or comma can cause them to question whether or not you know your grammar. So, you know, very minor things such as that can cause significant issues. So, I’ve had to wholeheartedly embrace a hybrid model of certain backstage roles can be offshore, but predominantly all of the front-facing interactions have to be US-based and have to be fairly high-level team members who can talk to a very sophisticated client. So, I definitely had to address that so that I am not the only front person.
James: You know, interestingly, my first retail agency customer was a lawyer, and I was the primary person dealing with them. And I had that client for about seven years. And the reason I didn’t scale past two also agency-level customers that I had is I didn’t want to hire salespeople and I didn’t want to hire customer-facing support. Because a couple of things happen there. It definitely changes your business model, but you’re certainly going to be paying a lot more in wages, and it becomes a high-stakes game.
And you really have to commit to that model, you have to lean into it a fair bit if you’re going to go down that path. It’s not something you run from your basement as easily as you go into out of more traditional sort of office setup, or at some level of scale, I think you’d have to be doing some reasonable scale for this model to be a viable model.
Raj: Yeah, I think that’s 100 percent right. I mean, as I mentioned it, we started out as a much lower price point. I mean, my very first offering to the market was about $600 a month, and then eventually went to $1800, then $2200. And even at those numbers, if you think about a cost per sale of acquiring the client and what they were worth, the math doesn’t work out terribly well. And you almost need to jump to a different category of customer who is willing to pay a much more significant fee and of course, expects more in return. But then the economics start working at the cost of complexity. So, it is a delicate balance to find where your sweet spot is.
James: Yeah, my clients were paying around about $5000 per month for reference. And this was 10 years ago, for seven years into that. But they got me for that. And it only took two clients, and that was really the stepping stone for me to quit my job. However, I quickly recognized, if I’m going to start dishing a lot of that back out then it’s it needs to scale.
I was fortunate to find good backend supply in the form of my own team, but also I had a Western AdWords specialist. Mike Rhodes was running my campaigns for so many years at a highly competent level. I mean, he’s probably one of the best in the world at this, literally wrote the book on it.
What is a customer worth to your client?
So, let’s talk about this. As you navigated these scaling exercises, you increased your prices. And there’s a huge lesson in that. And I think the thing you didn’t mention, which is probably obvious to you, but may not be as obvious to someone listening, is it’s worth thinking about what a customer is worth to your customer as well as what it’s worth to you. And I think when you’re dealing with lawyers, I realized that my lawyer paying me $5,000 a month, they were generating from the leads that we were bringing in, they only needed one deal that could potentially make them somewhere north of $60,000. And it was easy for me to say, look, if we just get one deal a month, you’re making a 10 times investment. So that’s a quick leverage point to increase your rates, is if your customer happens to make a lot of money per sale. So that’s one thing to think about.
Raj: Yeah, if I could add one more thing, Sorry to interrupt, James, but you know, one thing to add on to that for if you’re selling to service businesses is their opportunity cost. Not only can you acquire customers for them profitably or clients for them profitably, but many services businesses which are charging either by the hour or by the labor of their partner owners, there’s a significant opportunity cost to them doing activities that are not their genius, versus in the execution. So, you actually have both elements in your own sale to your client.
James: Yeah, I remember dealing with the lawyer in the office who is my handler, if you like, and I’m sure his hourly rate was somewhere in the region of five or $600 per hour. And I just thought it was hilarious that lawyers are paying me to talk to them, because it’s so expensive if you get it around the other way.
The key to hiring great talent
James: So, as you started this journey of hiring, I know you’ve landed some amazing people. You have a project manager who’s got Lean Six Sigma skills, worked in the Pentagon, that sort of level. That sounds unbelievable, that you could find talent like this as a small business operator. What’s the secret?
Raj: I think the secret is that there is no secret, to be honest. It’s that there are so many good people that if you are willing to, in my case, let go of geography and run a distributed team, you can run a search for exactly the kind of person that you want and find them anywhere. So that project manager of mine who’s, you know, Lean Six Sigma, worked at the Pentagon, former army project manager, very disciplined, runs things, he’s in Virginia. And my social media lead is in Alabama and you know, some of my folks are in Washington State, so they’re all over the United States and I think that part of the ability to do so is the willingness to be geographically independent.
So as much as we talk about distributed teams, and very often, as you mentioned, the Philippines is mentioned a lot in this, but it can work in the United States as well. It should just, wherever the talent is, we have the opportunity to get it, which opens up your employee pool significantly more. And I think I also, to a degree was, I wouldn’t say forced, but I chose to go that way, because I’m in the San Francisco Bay Area, which is one of the tightest labor markets out there for very highly qualified people. So I kind of blundered into it by living in a very expensive place.
James: Yeah, you’re competing with the huge Silicon Valley type companies, right?
Raj: That’s right. And maybe about two years ago, we had a perfect candidate who interviewed for us, we put out an offer, she was about to accept, and that day got a call from LinkedIn to be a pretty senior marketing person at LinkedIn, and she accepted that offer on the spot. So, that was just one of those things. OK, I can’t compete with a company like that, who can pay more, who has the cachet when I’m a small business. And that was just one of those signals that we really have to start looking for the talent where the talent is, which is here, but we can’t afford it. So, you know, we got a big country, a big world.
James: Yeah, I think this is the advantage of being a small business with the internet technology. Even in my own business, we have our core team in the Philippines, there’s five of us there, and then we have some people elsewhere. We have our programmer expert in Boise, and we have our superstar designer, Greg Merrilees, in Melbourne. So, you can cherry pick the best talent at what they do from anywhere in the world.
Systematizing the hire
I know I’ve been tracking some of your posts inside our SuperFastBusiness membership, and there was a pretty epic hiring discussion, and you often make great contributions about job descriptions and how well you’ve been going with that. I’d love it if you could just give a little overview of this point where you’ve arrived at saying, OK, here’s something that needs to be done in the agency, it’s not going to be done by me. We don’t have someone here who can do it. We’ve got the blank computer screen or whiteboard – how do you spec out the job, and what are the little steps that you would go through?
Raj: Yeah, so there’s a bunch of tools that I use for that. And the reason that I use tools and frameworks is not only that it’s kind of best practice, but there may be some folks listening now who are like me, not really people people, right? I mean, you often think about the office and the water cooler talk in the office. And I’m not like that. I like to get to work, I like to do great quality work and get it done, and then move on to my personal life. So part of it was, how do I systematize things so I know that I’m getting the right kinds of people who can do the right things?
“What kind of office do you want, once you start having people?”
There’s an abundance of people who can tick the box of, they have a specific skill. But there’s an entirely different thing about culture and fit and growing an organization like you want to. So, I think the first step is to take a step back and say, what kind of office do you want, once you start having people? Are you all in the same physical location? Do you want to shop talk, “What did you do this weekend?” Do you want to just get down to brass tacks? And I think people don’t always make that first decision, and then they end up with a team which has different social needs from what they have in their own company.
James: Yeah, I guess that’s probably part of the reason why some people really dislike Slack and other people absolutely love it. It’s quite funny, observing that some people think it’s an interruption factory, as is going into a physical office can be very distracting. I don’t. For the last decade, I’ve been hanging out at home. I don’t go to co-working spaces. I’m not interested in being chatty or social. I guess I’m much like you in a way. But I do travel and meet people. So, I get out and about, that’s how I met you, actually.
Some of the absolute best relationships I’ve made are face-to-face. But when all things are said and done, I like to just retreat back to my little quiet space and limit the amount of time that I spend on technology these days.
So, you decide what sort of office you want. I guess we’re sort of touching on almost the values here. That’s the spine of our business, is what does it mean to work for SuperFastBusiness, and what are our core values? And that defines the type of people and also gives us an operating system, a means to which to hire and a means to which to operate on a day-to-day basis, and also if required, and it’s very rare that this is the case, it could be a means to end the relationship if the values don’t meet the criteria.
After setting coordinates…
So, let’s say you’ve set some coordinates, what do you do then?
Raj: So, we set the coordinates, what kind of organization do you want. And then very typically, it’s a need for a typical, or a role of some sort, right? And the role can be either a narrowly defined thing, so I need an AdWords specialist, for instance. And that might be based on a lack of skill set that you might have in your business. Or it may be by examining the things which for you, as an individual owner, are the first things you want off your plate to free you to do higher level tasks, right?
“For each one of those roles, you want to define, what does success look like?”
So, in an agency business, which is what I’m running now, things like the writing of the content – that shouldn’t be me, correct? And then social media, and then paid media management. So, you start building out things around you. And for each one of those roles, you want to define, what does success look like? So I have a little scorecard that I created by, (and I won’t take any credit for it) but mutating several other ones that I found from various colleagues to say, what does success look like from an objective standpoint for this role? And color coding it between green and yellow and red for what success looks like, and then designed the entire interview process to be as predictive as possible to, will this individual succeed with these specific criteria, those criteria being both the technical aspects of the role and the cultural aspects of the company that you want to grow.
So I use that, I’ve created that framework so that I can take a step back. And instead of just going by the usual terrible method of, I’ll get three resumes and pick the best one, which is the worst hiring paradigm ever to, if this person can’t fulfill these, the role and the culture, I shouldn’t make a hire whatever the cost.
James: Agree. I remember sitting there in Victoria at dealer principal training, it was about the year 2000 or so. And I learned this similar process, to write down, like, the minimum criteria that would be required to be able to do that job, and then a couple of desired criteria. And that formed the basis for the training system that I put in place for many years after that to hire salespeople. But I remember speccing out each line and knowing that they would have to be able to succeed with this thing. And especially in the interview process, they would have to be able to demonstrate historically that this has already been achieved or this is already present, not hypothetically in the future.
So, it became an interview checklist. And just by filling that out, I agree with you 100 percent there, we would get 115 applications from the advertisement that I ran in the newspaper. And then we would invite 21 people in for interview on Monday, Tuesday and Wednesday. So it’d be seven a day for three days. We had Thursday for reference checking, and Friday was a callback for about six people. And then from there would hire either four, three, two, one or none based on who made it all the way through. And that’s how I built the best sales team in the business. And it was just basically making the teacher’s answer sheet and applying it to the candidate and seeing who got the highest score.
Raj: Yeah, and I think one of the things that might be shocking to some in what you just said, but is 100 percent true, is the numbers of people you need to even consider before making a hire. So, we just hired a producer editor, we recently launched an entire video aspect, a video marketing aspect of our agency. I went through about 440 resumes to get down to only two people who got interviews to find one, and he’s fantastic. But the numbers that you have to go through, you know, the whole get a few resumes and pick the best one, you’re doing yourself a real disservice if you don’t play the numbers game and realize that there’s a diamond in the rough out there. You just have to be willing to mine for it.
James: That’s so true. My wife has a recruitment business and the candidates that she’s presenting to the people who are looking to hire is the thin edge of the wedge. It’s the sifted, sorted, screened and tested gold at the end of a big coal mine, you know?
That’s right. You do have to put in the work, and if you put in the work, and one thing we had a discussion on a previous podcast on SuperFastBusiness about how quickly you should hire, but the counterintuitive advice here is you might have volume, but definitely don’t dilly dally because you might lose your good candidates to other prospective employers who also see the gold in your candidate.
Raj: Yeah. And you know, I’ve heard different philosophies about this, the hire slow, fire fast, etc. I think it’s not as black and white as that. I think it’s a combination of, you still have to do your diligence, so you can’t hire so blindingly fast. On the other hand, we at this point always make every hire a probationary period of 60 to 90 days, in which we’re looking at that scorecard and asking ourselves very critically on a weekly basis, is this individual living up to those elements of the scorecard? And they know it, because of the on day one, we do an introduction to core values; we talk through the scorecard, the objective criteria for success, so they know it, we know it. And if there’s drift off of that in those 60 days, we also know that that individual really isn’t focused on what the business believes is the criteria for success in the role. So, a lack of attention to that on the part of the individual is a sign in and of itself.
James: You know, there are signs from the very beginning of the process. I’m speaking to someone later today. And they wanted me to send them an invite to Skype rather than being able to add themselves to. And like, that’s the first sign that there’s going to be trouble here.
And also, I think most people can hold an act for a week or two, but it starts to water down after that. They can’t sustain it forever. That’s why a little bit more time will reveal that the real candidate, you go from the performance mode of interviews, and it can be a mistake some people make, they hire the best performer and not the right person, because they went well through the interview phase. You have to be able to look past that.
“It’s in hindsight that the real power of a decision is revealed.”
And I love what Peter Drucker said, and that’s about the power of decisions. It’s not in the time you take to make it; it’s not necessarily all the process in the moment. It’s in hindsight – that’s when the real power of a decision is revealed. Did you make the right decision? Were your theories validated in practice? When you did take this person on, did they pan out to be what you thought?
Because I’m sure we all have confirmation bias. And we tend to be Pollyanna as entrepreneurs, sometimes. We want to see the opportunity in everything. And we sometimes, in our own vanity and ego, need that person to perform as well as we thought they would, if we gave them the vote to bring on board. And I think sunk cost fallacy comes into play a little bit here. And that’s why it can be a bit tough to recognize when you haven’t got the right fit.
When you need to let them go
Let’s talk just for a moment while we’re at this point about letting someone go if you find out that they haven’t matched the criteria, that they weren’t reaching your success metrics that you’d hoped for.
Raj: Yeah. So I mean, there are the objective metrics of success, and let’s say someone is not meeting those. There’s another process that I go through on a monthly basis. Credit for the genesis of this idea is to Gino Wickman in the book, Traction.
They’ve got a people grader tool, which you take your team and you grade them on the core values of your organization. So, in the case of our agency, excellence, enthusiasm and teamwork are the core values. And then they have another section for the right seats, do they get it, do they want it, do they have the capacity, which is getting to their energy around it.
And they have a very simplified way of doing this, where you kind of put a plus or a minus in each employee’s column. So, let’s say I’ve got an employee (actually have to pick a name I don’t have, right?), so let’s say Bob, who’s on your team. And I grade Bob on a monthly basis with the excellence, their work product excellence; their enthusiasm for learning; their teamwork, working with other team members. And in the original model, which I used for a while, it’s great, it’s a plus or minus. A plus means Yep, they’re doing it. A minus means they need some work and you need to reevaluate them.
But I actually found that adding two other states could be very helpful. They had a plus and a minus, and one day I thought, what if I add a multiply and divide as well? Because on a culture basis, I find that it’s great to say OK, they’re a plus, they’re additive, meaning it’s thumbs up, or its subtraction, it’s something to work on. But there’s also a divider. And I learned this the hard way with a team member who was really poisoning the well, if you will.
So, I added a little state, my little drop-down selector on that nice sheet there called a divider. And the divider is someone who is either causing other people to not be consistent with the core values, or is in other ways undermining either the clients or the organization, and that’s an instant fire. And then there’s a multiplier, which is somebody who really needs to be rewarded in the moment for what they’re doing and what they’re doing well.
So, what I do is I look on objective criteria of success – if they’re not meeting it, why? Is it fixable? And then, are there certain conditions under which somebody should not be on the team? And that’s the decision making that I go through on this, because it’s toxic to leave the wrong folks in the organization. The long-term ramifications there are so much worse than the pain we feel in having to let someone go.
James: Yeah, gosh, it’s interesting hearing you describe that. I can’t help but think of a metaphor of battery hens, you know, in their organized cages with their measured out feed, laying, you know, a strict criterion of eggs. And I feel like I’m running more free-range chicken farm these days. I think if I reflect on the last 20 years, I’ve probably loosened up that kind of monitoring and measuring.
So, I just want to flag here that there are different styles of management, and there are different stages of your business, and there are different degrees of seriousness that one needs to have with their business. But I think when you’re at the stage you’re at with the agency you’ve got, I think you need to have a way to know who’s good, and I absolutely agree with you. If you find someone who is poisoning the well, it’s not good for anybody.
And another one you can have is when you have a superstar and they get star syndrome. And they think they’re special and better than everyone else. And that can really cause a lot of negativity.
And then there’s a whole category of things that can be quite interesting and have the reverse effect on the team, such as employee of the month. It’s like, that’s the one person who’s not pissed off for the month. It’s like every other person in the business is not the employee of the month, and it’s like you’re demoting everyone else in the business.
Do people like working for you?
So, it’s fascinating how this stuff can play out in cultures, and I’ve seen it all. But you have to start with something, and I think a lot of this comes around to personal style.
Do you think people like working for you, and they like this system?
“The whole intention is to take the who’s whose favorite out of the equation.”
Raj: I think that they do. Well, I certainly hope they do. I view my job as creating other leaders, not as being… I mean, it sounds very systematized, what I do. But the whole intention of it is to take the who’s whose favorite out of the equation. And my if my job is to create leaders and create harmony on the team and to challenge what’s broken and allow them to step up and allow them to gain experience and opportunity, that’s the half of the bargain that I’m giving them.
The other, conversely, what am I getting for that, is that they’re giving me freedom, which is freedom to operate my zone of genius; freedom for my time; financial freedom. So, if you look at it from that perspective, if they understand that the bargain is ‘I’ll help you get better at what you do’, because, you know, it’s not just a financial reward situation, they have to want to do better to succeed here, then I think from that perspective they understand that lone wolves don’t work in my organization. You can’t deliver what we deliver as a solo operator. So, I would hope that they enjoy working here. And if they if they don’t, I would also hope they would speak up.
James: Yeah, well, that’s the thing. We go through a lot of applications, and then the good candidates can pick from their employers. So, it’s a double-edged sword there. We want to be an employer of choice.
I wholeheartedly agree with you. It’s a team collaboration. I absolutely adore my team. We’re at this mature phase now where they’ve been working with me from between, and it depends who you count in this, I’ve been working with my programmer for about 12 years now. And my team in the Philippines, ranging between five and nine years. That’s our sort of maturity level.
So, I gave them a new project last week, brand new project, completely new, start from scratch, and just gave it to them, and said go for it. And I just love this. I have so much confidence in them, and they just naturally find their areas of talent and lean into it, and I can see what they’re doing with it already, with zero instructions.
I did what you said – I talked about what success looks like. And I guess I learned some of this from a friend of mine called Dan Dobos, who has been on this podcast a few times. But he’s quite smart, and he helps people get good scores in results. And he told me the reason students often struggle to get an A in their paper is they’ve never seen an A paper. So, I like to help my team see what an A paper looks like. And if we can do a success with something, then it’s great to introduce a new project and say, let’s do the same again with this. Because now we know what it looks like, and we can move quickly to that.
So again, it’s going to depend where you’re at with your team, how long they’ve been there, what your personal management style is. And we’re all individual. So I’m definitely not making any criticism here, I want to point that out. I’m talking about understanding where you’re at in the life cycle of a team, of a business, and your own personal style and what you’re trying to do. I would actually go so far as to say I think my business is a little more lifestyle business oriented for my team, as well as for me, than we used to be even five years ago. We’re probably a bit more hardcore, and a little bit tighter, if you like, and I guess I’ve leaned into more Ricardo Semler stuff over the last few years and relaxed the controls.
Raj: On that point, I think an important distinction that folks need to think about is, I mean, you’ve leaned a little bit more, you’re saying, to the lifestyle. I have changed, over time, my own management style, but in part, it also has to be driven by the economics of the particular business, right? Depending on the margin characteristics that you have, especially if it’s a labor-heavy business, because you can get in certain businesses, and that includes the current client base that we have right now. If there isn’t an attention to the cost of delivery that is beyond what I might do if this were a coaching business, for instance, it can be very easy to actually go upside down on an account. So really kind of monitoring this and how people do it.
You know, there’s one thing, the aspirational style. Might I think, I’d love to have more like James’s business? Yes. But the reality is, if I want to use this vehicle to get me where I want to go, I have to do things that might not be my ideal today. But until I get there, I have to find my own balance between, you know, this draconian hyper micromanagement and free-range chickens.
James: I’m not saying “draconian”. You know, like there’s a place for these things, and apologies to any vegans I just want to acknowledge that. We may have been discussing some disturbing content here.
Raj: Free-range tofu.
James: Right! But look, I feel what you’re saying there, especially when I had the website development business. There were some jobs where the customers were getting websites for below cost. It cost us more in labor to build the site than what they paid us. When something blew out, or there was a problem or a miscommunication, or we’d spent a stupid number of hours developing something that went way past scope, it didn’t work out economically. So, you have to have these measures in place. And I certainly did.
And so, I think that’s such a good point, Raj, it’s what kind of business model do you have. It would be impossible for me to have a blow out with my business model, now, because of the nature of the business. It’s all subscription coaching and my team is a small cost to my business compared to a Western-facing service business such as what you’ve got. And I think that that actually shaped one of the reasons I didn’t go down that path. I think there’s huge rewards if you want to tackle that business and take it on and grow it, and I’ve seen that happen.
Roles with the most leverage
So, back on topic, what kind of roles have you found the most leverage in hiring?
Raj: That’s a really good question. Are you talking about financial leverage or time leverage? Because they’re not always the same thing. So, let me answer both. On the time leverage standpoint, project manager, no doubt about it. It is one of those things where you hit a certain level of complexity in the business where… you know, I was losing sleep over, Oh, did we get back to this client? Are all of the pieces going to converge into the deliverable at the right time? And the answer too often was no. So, I would say from a personal time and sanity leverage standpoint, a project manager was the thing that I delayed too long in getting on the team.
From a financial leverage standpoint, I think it depends on what your product is. In our case, video has been a great financial lever, because our ability to add that to our portfolio of services at the cost of production and editing of that has been an excellent addition. It’s allowed us to gain clients we couldn’t have otherwise gained. So, I think, two very different things, but for each business, you probably have to look at it from multiple angles of leverage.
The no news update
James: I really liked the project manager, that’s something every service agency could deal with. I went pretty heavy on support. When we had a team of 65, we had about seven or eight people in our support desk. I have this philosophy with customers, if they’re asking you where the project’s up to, you left it too late. So, we even developed a technique called the no-news update, and I learnt this back from my car dealership days.
I used to sell cars that were future order build. So, someone would come in and want a particular combination that we didn’t have in stock. And being in Australia and the car being manufactured mostly in Germany, but sometimes in the US, and sometimes in South Africa, it would take four or five or six months for that vehicle to arrive.
But it would blow me away. They’d come in and order the car, and we take the deposit and we’d send off the order to head office, and then the next month, they’re like, how’s it going? I’m like, hang on, it takes five months. You only ordered it last month.
Then I finally realized it’s not enough communication. From then on, I would give no-news updates. Like the month later, I’d call up and say, “Hey, Raj, just letting you know, your SL65 is still in the queue for production. It hasn’t been built yet. But everything’s on track.” And then you’d say “Thanks, that’s great.” And then, “Hey, just saying your car’s now being built in Germany, it’s on the production line and it’s due to get on to transport soon.” “Hey, it’s just been taken to the wharf.” “Hey, it’s on the boat.” “Hey, it’s halfway across the Pacific Ocean.” “Hey, it’s docking.” “Hey, it’s docked.” “Hey, it’s now getting prepared and customs certified.” “Hey, it’s on the way to the dealership.” “Hey, it’s in the workshop now and it’s getting detailed.” “Hey, let’s talk about you getting that bank check for the final settlement and picking it up in the next three days. What do you think?” So, all these updates for this thing that could really just be saying “Hey, we’ll let you know when it’s a couple of days out.”
“We should always have our client glasses on.”
Raj: Yeah. I love that because it speaks to something we should always be thinking about, which is the psychology of the client at any given time. They have made the mental commitment that they’re getting this car, and they forked over some money, right? Or whatever the deliverable is, this website. There’s this period of excitement that you’re getting the thing. And then it that excitement turns into, really, tension. Am I ever going to get the thing? Unless you brought back to life and you can keep that excitement buoyed over time. So I think that’s a very valuable lesson that we should always have our client glasses on.
James: It’s an open loop I just ordered a surfboard last week, which will take five weeks to arrive. That’s the typical time. It’s quite strange. With surfboards, I think it’s fascinating, You could pay an extra $50, and you can have it painted in any color you want, for example. So, like, tiny little extra investment, and you can have it completely customized.
So, I’ve ordered the thing, and I’m sure once the order’s in, nothing will happen from their side until it pops up in the queue. But if the retailer is very clever, they could send a little bar of wax or something, saying “Hey, just a little update. Your board’s just going into production now, and we thought we’d send you some wax to get ready for it, because it’s coming in a couple of weeks. Then they could tell me when it’s been shaped, and then they could tell me when it’s been glassed, and the really good ones could take pictures of it through the various stage. Because at the moment, what I need to do is I need to follow the surfboard shaper and the glassing manufacturer on Instagram. And you can sometimes see a glimpse of your board being shaped or glassed, but if the person who sold it was doing that for you, that’ll be an incredible experience.
And I had this happen to me when I ordered a custom shirt. They actually sent me pictures of the tailor cutting the fabric and then stitching the collar and then putting it into a bag and then it arrived shortly after. That was an amazing experience.
Raj: That’s fantastic. The Instagram thing, it’d be even better if they tagged you. You’d share it with your friends.
James: Sometimes they do. One of the best ones at that is Mark Richards, who’s a four times world champion, but as humble as pie. He will tag enthusiastically. He actually, when he sent me a board that he hand-shaped for me, I took a picture of it. I was very proud of it. I took a picture of it and sent it to him. And you know, as if he could care less, right? And then they’ve replied back, saying, “We’d love to feature this on our Instagram, is it OK to publish?” I’m like, “Sure.” And they did and it was just wonderful that there was that connection.
Wrapping does count
So, I think support and project management is a part that that people often let drop. In fact, if you go a bit heavy on support, you can probably go a bit lighter on some of the actual technicians, because your customer’s going to be so happy that you’re controlling the experience. Because sometimes I think we think that if we just do good work, but we don’t wrap it well, the customer will be happy. I really think that people buy the cover, not so much the book. And the evidence is there. If you look at the Kindle stats, most people who buy Kindles don’t actually ever read it. I think more than half don’t ever open it. Not once.
Raj: Well, we see evidence of that in my market. I mean, as a former lawyer working in the legal space now, there is no way to tell how good a lawyer is before you hire them. So, all you have to go on is the wrapping. And two lawyers might be equally competent, and one is charging $200 an hour and the other one’s charging $700 an hour and all that price conveys is a signal of their confidence in their own ability, nothing else. So, in so many markets, you can see that the wrapping and the pricing and the framing have more to do with the perception of the client than the actual thing.
James: Right now, I’m planning an event for April 2019 for SuperFastBusiness Live. And of the two venues who I’ve contacted, one of them never calls back, can never get someone on the phone, and the other one replies back the same day. So the difference in the process, so I’m like, I probably may never get to the stage where I even find out how much the other one is, even if they could be bothered to contact me, because the other one’s just separated themselves with superior wrapper. They’re on there on the job.
Raj: Yeah, and to your point, that’s a team member that’s doing that. It’s not the owner of the venue that is doing that. They have found somebody who understands and leans into the whole process of prospect and customer delight. And so, you have confidence that you’ll be treated like that. But that all goes back to team, right? Which is what they’ve hired, the right person to carry you through that.
James: You’re right and his values. And here’s the fascinating thing. In the five or six years I’ve been dealing with this venue, I’ve dealt with seven different reps. So, every single year, they churn their event manager. It’s like a rotating door on that joint. So, I’d have to say that the core is rotten. There’s something not right in the values or the way they’re hiring or the philosophy of, you know, what’s actually facing those people when they’re in there. It never works out. And that’s just, it’s a bad impression on the outside. But it must be hard for the people on the inside as well. Just a bad business.
Raj: Yeah. I mean, one of the yardsticks I use is, I ask myself every week, what feels heavy on the team, right? If there’s a relationship where something’s not sitting, right, that’s an early warning that I need to explore it more. Now it might be nothing, it might be just situational. But as a business owner, you kind of have to trust your gut, because ultimately the team members are there to deliver on the vision that You have, and if you let it sit it’s not doing anyone any favors.
So that business has checked out, but you’ve gotten to a place in your business where you have complete faith in your team, you have a fantastic team. Likewise, I now, you know, all the negative Nancys from the early days have been purged out of our team and really, it’s a very positive experience of people who are dedicated to their craft, whatever it may be, and a shared vision of where it’s going. So, it’s really important to drive to that and ask yourself… if I’m waking up in the morning and it’s like, “Aw, I have to deal with these people,” well, something is very, very wrong and that is one of the first things as a business owner you should look into.
James: Absolutely, if you’re not feeling love for your team, you’re doing it wrong.
Raj: Yes. 100 percent.
James: And please, don’t wait a year for some bullshit 360-degree review process or whatever. Those things, they’re not great. If you’re not in tune with your team on an ongoing basis, then change the way you do it. You should be sensitive and feeling when someone’s not in it or their head’s not there or they’re not loving the work they do. Have an open dialogue. That’s what I certainly encourage.
And if you do have a team that’s not in a physical location, I would recommend visiting them or bringing them together a couple of times a year, if it’s practical. You can have significant gains in culture if you do that. You don’t have to have work sessions, either. It could literally be eating a meal or doing fun activities, but just things that you can do together so you can start to synchronize better. That’s it. It’s like meshing the gearbox. We synchro-mesh, just making sure everything moves smoothly.
A team horror story
One final topic Raj, is maybe you can pull out a horror story or something. I see something happen a fair bit in western agencies in particular. It’s not really an issue with the Philippines, but it’s very common in Western businesses. You hire in a key role, a pivotal role, high salary, they get to know your customers. They either get ambitious or resentful or jealous of the business owner. They say, “OK, gosh, Raj is making all this money, he’s got it easy. I think I could do a better job. I’m going to go and set up my shingle and supply a similar service. And I’m going to get in touch with the customers.” This is the classic Western poach maneuver. Very, very common with sales people.
Have you seen this before? Have you got anything in place to protect this? And I suppose, you being a lawyer, you probably have a fairly decent contract of some kind. And if so, are they even enforceable?
Raj: Yeah, it’s a good question. So, I haven’t directly experienced that. Do I have a whole stack of papers? Yes, of course. But the fact of the matter is, the way that I look at it, with the poaching at least, is if that’s an issue, it’s an issue of how I’ve dealt with the client, right? Not me personally, but the organization. So, even if you have a key role, if the client is connected with multiple team members, they understand that the organization is just not… the role that we call it is a marketing strategist, which is kind of the chief marketing officer that we install in our clients. The clients don’t just know that person, they also know their writer, the social media manager or videographer, so it’s the whole team. And even if someone were to peel off, they’re not going to rip out half the company and take them with them, which is very unlikely. The clients know that they can’t get the full team delivery if just one person is there. So, as a pragmatic situation for me, that hasn’t been an issue.
I mean I have had a horror story, which is an employee that quit with zero days’ notice, and that was after being given several major accounts. And that was a very trying situation in that I didn’t see it coming. And one day, this particular person who was a marketing strategist just kind of up and quit. And that was a learning experience for me, because I had kind of let go of the reins a little bit earlier because I was overwhelmed with other things, trying to grow the business.
And it caused me to think a little bit more about OK, well, what are the early warning signs that something might be amiss? And in this case, we thought back and we did a kind of a post mortem, if you will, on the situation and realized, well, a client had criticized this person’s work and she dropped a couple of deadlines, and then, Aha! Her performance started to decline and we really weren’t watching it terribly closely. So really what that came down to is, again, as a team, kind of holding one another accountable to performance is really what we need to be doing a little bit more of.
So, you know, learning experience on my part. Of course, we got through it, and that’s OK, right? Just like a firing. And you know, if someone ends up being a divider, as I called it earlier today, I’m willing to pull the ripcord right away if they’re impacting my clients or our organization, even if that’s painful, but it’s the right thing to do. So, really just thinking proactively about that and what’s the customer experience and your team’s experience through other people’s eyes? I think that’s the right way to do it.
James: Yeah, that was great. Thank you for sharing that. I know that it’s painful reliving those memories. And we’ve all had them. I mean, I’ve had some absolute classics. In the dealership, I’ve actually had police walk out employees in handcuffs.
James: You know, like for fraud. Nothing surprises me now, when it comes to what can happen, especially at scale. And you know, with humans, we’re dealing with different people. We’re different. I think even us, as the business owner, we go through changes, if not on a daily or weekly or monthly basis, but definitely over years, we completely change as people. And the people we hire change, and if we can find a framework that lets them grow and us grow, then it all works out just great.
Summing things up
Look, I just want to say thanks for coming along and sharing this. I know it’s not really your core area. You have nothing in particular to gain from sharing lessons like this, and you’re doing it to give value for my audience. And for that I’m super thankful.
We’ve talked about agency hiring stuff and a little bit of law firm things, but there’s been some lessons there. Whether it’s from working out a success criteria scorecard, some ideas on hiring and letting people go and what to look for. It’s been generous of you. And I also want to say I appreciate the contributions you make in SuperFastBusiness membership. You’re such a valued member and obviously have a great business going there, Raj. So, thank you for that.
If you want to connect with Raj Jha, then look him up on LinkedIn. Join his network there. Raj Jha. J-H-A. If you are a lawyer and you need some help with marketing, I imagine they’re running a pretty good service there at PracticeAlchemy.com. Thanks, Raj.
Raj: Well, thank you James. It’s great to be able to contribute to the community and to your podcast. I’ve certainly gotten a lot of value there. So, thank you for everything that you share as well.
James: Do you think you’ll listen to this episode?
Raj: Of course, I’m going to listen to this episode. you’re on my podcast playlist. So why wouldn’t I?
James: Let me know how it goes. I never listen to my own podcast. Thanks Raj!
Raj: Alright, thanks James.
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