Luis Scott 2:14
Absolutely, you know, I read this book in one sitting, it’s an incredible book. It had me so entertained with some of the stories that you were telling and, and like the transition that you’ve had in life, and I don’t think people really realize how important office culture is to the production and profitability of a business. And so I really want to know how you’ve transformed your business using the strategies that you’ve put into this book. But before you get there, telling us a little bit about how did you get into business? How did you get into law? What started all of this in the first place?
Eric Farber 2:48
Well, getting in a lot of easy, right, you go to law school, but for me, it was it really was, I was one of those people as a child really looking at, and thinking about, you know, human rights and civil rights. And it was something I was interested in from a very young age First Amendment. And we moved here, we moved to the states from Canada, when I was about 12 years old, and becoming into a new country, I think a lot of people don’t really think about the differences, but it was very, that was something that was really, you know, striking to me. And as as a kid in it, I think I kind of always knew that I was going to be a lawyer. And somewhere in in, when I was in college, I really started gravitating towards the arts, my mother was was an artist. And, and so I gravitated towards the arts and culture, pop culture, so to speak. So, and I’d spent a couple of years after, after law school in LA, working in the entertainment business directly in the entertainment business for one of the agencies there and then and then Sony company based at Sony Pictures, make movies. And so I I missed being a lawyer in and and literally gone to court and I switch back came back to San Francisco, where I went to law school and started up a practice again, and was introduced as somebody who was running the Tupac Shakur estate. And I started doing trademark infringement and copyright infringement cases for them and sort of just bled more and more into and I’d actually throw in that when I first became a lawyer, I met a sports agent. I ended up doing all the work for their agency. And that’s how I ended up getting into sort of a sports business and which I, I always wanted to be in the sports entertainment business right long time. And so as a lawyer because sports and entertainment are really two different things, as long as industries. And so I ended up doing that doing stuff for a lot of individual athletes. And in sort of just went from you know, kind of one thing to the next thing and and I was representing the Tupac Shakur state have also done K, I also did cases for Dr. Dre and worked on for Snoop and Death Row. And so there’s a, you know, I shut down, one of the earliest things I did was actually going after going after different different websites that were infringing on the work, right. So right, somewhere out there, there’s actually a song where some guy was very unhappy and kills me. And I was trying to find it actually is probably about 18, 20 years old now. And, and so somebody asked me about it, and I, it’s on an old iPod, I got some work. So still trying to still trying to dig it out. Because there’s pretty good.
Luis Scott 5:59
That’s funny, you know, it, there’s a common theme with a lot of the entrepreneurs and business owners that I that I speak with. And that’s that networking, the power of networking and connecting and moving from, you know, one relationship to another relationship. And I think that if you’re out on an island, trying to build a business on your own, it’s, it’s not as easy you really have to be engaged with with people outside of your business so that you can network and make those connections. And, you know, you mentioned that you met one, and then that led to another led to another and it’s, that’s really a powerful lesson in the world of entrepreneurship just to begin with. Now, I want to
Eric Farber 6:34
throw in everything I’ve done, including Pacific Workers’, which is really my main and only business right now can be led back to one interaction. That happened two weeks after I grabbed my bar license. Wow, literally can be led back all the way back to one chance meeting. When I took when I when I took some guys who were trying out for the for the Arizona Cardinals at the time. And one of their one of their brothers was in the NFL and being represented by a big agent, we go to a restaurant, he happens to be sitting at the table next to us, we end up meeting with him, he says, Hey, we just fired our lawyer, for our sports agency, do you want to come talk to us, and that led all the way, you know, to almost everything that I did. And I can literally connect the dots if we had the time. But it even led into into this because into the workers comp worlds because it was we started out in the workers comp world representing athletes in the workers comp world. And that led to recognizing the business opportunity.
Luis Scott 7:44
I mean, that’s just so powerful. Because I used to when I was younger, I would always like have these affirmations, and one of the affirmations I had was, you know, today I’m going to meet the person who’s gonna change my life. And it’s so true. Like if you’re if you have that, like open mentality, open heart, any day could be the day that your life completely changes. And I think that keeping that that level of positivity, so important, I do want to dive into culture, because I believe that somewhere along the lines, these connections and relationships really lead you to the philosophy that you have in your book about culture. And you said something that that really resonated with me, and that is whether you purposefully decide to have a culture or you just don’t purposely decide to have a culture, you have one. I’d love for you to expand on that. What does that mean, as it relates to running a business?
Eric Farber 8:38
Well, culture is, you know, the air that a company breathes, there’s a there’s there’s many different sort of definitions of what a culture is. In, in many ways, it’s how people are inspired to get things done, when you’re not there. Right, telling them how to do things. A culture is a shared language and culture is a shared goal. It’s, it is a lot of things for culture. For me, it was very difficult in the Bay Area, you have a very similar type of law firm in Atlanta. And I can tell you that the Bay Area is a different kind of place. Because people are living off of a lot of investor money and you know, VC money type of thing. And these companies are overpaying. And to keep people around, you know, you have to pay, you know, pay a lot of money. And if you can’t pay a lot of money, you better make sure that you’re not an asshole, right? To keep people around, but in many ways, we had sort of a revolving door so I have people coming in and out especially when you’re young company, it’s hard to, it’s hard to show them the future. So in you know, I started realizing just how much money it was costing us to have turnover. And so I started looking at Different ways to reduce reduce turnover. And that’s really with employee engagement and making people happy. And the cost of turnover is just is astronomic, you know, some, some would say that it is as high as 10 times their salary. Why is what it’s costing you on a on a lengthy basis. So if you’ve got basic roles in the company that are paying $50,000 a year plus benefits, you’re looking at $600,000 decision, I can tell you that 48% 48% is the general number in turnover. And in American companies, we are less than 15%. Now, in fact, we’re probably about 10% over the last over the last year, which is incredible, right? The amount of cost savings alone, if you look at from an on an entrepreneurial basis. So you’ve got a culture, if your culture is about yelling and screaming, that is the culture. If your culture is a directed culture, that is that is a culture, I choose to have a culture that’s planned. that’s intentional. Because I know that if I can, you know, at the end, the goal is is to get work done serve the clients, that’s the purpose of a business is to serve the clients serve value, increase value. If I can do that, then I’m going to try to do that. And it just makes for a much better place to work for me too. I’m just one of the workers. Right? Of course. All right. Yeah. So but what that allowed me to do is sort of grow. And I love you mentioned John Barry, you know, I’m a big fan of John’s because he uses a military style culture. Well, I think a lot of people think of a military style culture as sort of yelling and screaming, right. And it’s not yelling and screaming. It’s just being disciplined in the execution. And, frankly, the military, there’s probably no better place to actually look at what a great culture actually is. They listen to the people down below them. The generals might be making decisions, but they’re always getting information from the front. We do to send you that.
Luis Scott 12:08
Yeah, yeah. And the thing is that sometimes we have to learn lessons the hard way, you know, I read the, the story that you gave about that hostile employee who wrote the, you know, the email, and was saying, you know, calling you a negative name, and I and I thought to myself, man, I would just cringe having to come to the office to work with that kind of person. What is what is something that you took away from that experience as you develop your culture and the business that you have?
Eric Farber 12:37
Well, hiring better is a is one of those. That’s for sure. But I mean, it was, it was one of the things that it was one of many things that sort of set me to, hey, what are we doing wrong, that we could create that kind of hatred and anger and vitriol with our people? Right? And so really looking at it from a much more human way. Right? So and, and there’s plenty of stuff that’s out there, in in books and articles and talking about culture, and they talk about culture, there’s many different ways to talk about it. But at the center of it, is the fact that you’ve just, you’ve got to create a human environment, and an environment that allows people to raise their hand and say, Hey, I don’t know what I’m doing without repercussion. Right? And then one that, you know, really focuses on them. I think there’s been a huge problem. And I think it’s a problem of the difference between a stakeholder and shareholders mentality. And you’re hearing this a lot more right now. Simon Sinek, who actually wrote one of the first books on culture that I read, who wrote there’s there’s two basic books, Start With Why and Leaders Eat Last, Leaders Eat Last, a little bit more about culture. But he just wrote a book called The Infinite Game. And it’s very much about this shareholder stakeholder stuff that I talked about in my book as well. And it’s the idea that it’s the difference between the purpose of a company and we talk about the purpose of a company is to make a profit. And that’s actually codified in a lot of state in a lot of state codes. And, and it’s why we’ve got CNBC running all day long. It’s why the Dow Jones is on the corner, you know, of the screen on CNN every day because they got to report quarterly earnings to raise those share prices. And when you raise those share prices based on quarterly earnings, you are very often for going long term benefits of a company and my partner and I took far less money out of the company that we could have Just to put it back into the development and the growth, and the salaries and the benefits and everything else we could with our people, because we said if we invest in them long term, and now we have people who’ve been there, we’ve only been around six years, we have people who’ve been there six years. And we have people who’ve been there five years, and four years, and three years. And, and now, when somebody new comes in, we can say, we have something to offer somebody new. Right? We we post an ad that says, We have a great culture, but we prove it, we offer these benefits we offer, we offer a place of growth, we offer a place of development, I mean, one of the greatest human needs is to grow, right. So when somebody comes in, and one of the things we actually say to them is the chair you occupy the seat, the wall you walked by is temporary, you’re holding it for the next person while you move to the next job. So learn it well enough to teach it to the next person, right? Giving people that growth, giving people that that ability and that knowledge that they’re going to be part of a larger, growing organization. That’s sort of a stakeholder mentality versus the shareholder mentality. In law firms, you are part owner of your firm, were last on the totem pole. And as an entrepreneur, when you’re getting started, you have to realize that your last on the totem pole, you come after everybody else. If you do it, right, that benefit really benefits you in the long run. Yeah,
Luis Scott 16:37
I mean, if you treat the people, right, you’ll you’re going to grow exponentially, hopefully. Now, the the concept of paying people more because this is part of the culture you’ve developed as you pay them more, you’re going to make more because they’re going to be committed more to the cause to the place. They’re, they’re taking care of their basic needs. You talked about the basic needs that you have to take care of. There are entrepreneurs out there I would I’ve consulted with some of these business owners, they’re scared to hire a person, they’re scared to add more payroll, to their to their books, because they don’t know necessarily where they’re going to get the business. So how does a person go from? I know, I need to pay people more. I know, I need to satisfy all their basic needs to then actually doing it like, what’s the mindset shift that has to happen to make that that transition?
Eric Farber 17:27
Well, you know, I even say this in the book, if you can’t afford to pay more, maybe you shouldn’t be in business, right? Sure. Business is two things, strategic innovation and marketing. It’s Peter Drucker. And you better know how to get there, then you better know how to plan. I mean, there’s a lot of different skills to being an entrepreneur. And, and we throw out the term entrepreneur all the time these days. And, and it is a revered thing out there in American culture. Now, Shark Tank was one of the big things I mean, hell, we have the quote unquote, entrepreneur in the White House. Right? Right. And it is, it is the admirable thing, as a friend of mine says, the American dream, though, has shifted, the American Dream used to be owning a business now the American dream is to sell a business. And it used to be that the American dream was to have a good job. Good job that, you know, took care of you. And you could buy a house and take care of you and your family and your and and the next generation would do better. What I say is an entrepreneur better have a great plan, how are they going to get new business? How are they going to sustain? How are they going to go? How are they going to build a foundation that is going to take them to the next level. And that next level very often is simply having a plan, having the things written down. If you do something three times you better wrote it down. That’s a process. Right? If you choose not to write it down, you’re choosing not to have processes. Right? So they they have to, they have to look and say, am I am i is it sustainable? Am I a sustainable business that can grow? Can I get more clients doing this? Right? If you’re if you’re making offers where it’s $100,000 a piece, you know, for each sale, you better know where you got people who can afford $100,000 sale, of course. And so they’ve got to set themselves up and see, can I get to that next level? What I did from the very beginning, and it was literally from from day one, I spent a huge amount of time from probably three to four in the morning. It was kind of generally where I wake up, planning out, saying what’s the next step? Five minutes before we got on this call. Literally, I was planning out the next level of expansion and we went and in six years we’ve gone from four people to about 1665 people Wow. And so it’s always planning what the next step is. But the first question in my mind always is, can I sustain the new clients coming in the door? So, can we continue? You and I have had that conversation before you guys sign up a huge number of clients, it’s very admirable. But if those clients stopped, what would happen, it all fell apart. So you’ve got, I mean, there’s all sorts of different moving pieces, but you’ve got to recognize what the most important one is. And it’s generally getting new clients. Right? Because if you’re not getting those inquiries ain’t gonna happen. So, if you’re a solo practitioner, as a lawyer, you got to say, okay, am I ready to get more clients? Where do they come from? Is it a repeatable thing? You know, I don’t care whether you play tennis, or golf, or basketball, or whatever it is, if you’re going to get the ball in the hole, if you’re going to get it over the net, you got to have a repeatable swing, you got to have a repeatable thing, right? Get a repeatable jump shot to be LeBron James, you got to have a repeatable, you know, fit, whatever it is that you do, whatever that hobby is, it’s the same thing in business, do you have a repeatable swing to get the new client in? Right? I, I’ll never forget my original, my very first marketing company, we were only spending $500 a month and I was putting it on a credit card, okay, 500 bucks a month. That was that. And the guy says, he got it, you got to put more money in, you got to put more money in. I said, Not until you can show me on paper that if I put my money in, you’re going to be able to get me more clients. Right, if you can do that, I’ll sell my dog and mortgaged my house. And that’s what he finally was able to do was to prove to me that he could scale our marketing, once you can scale the marketing, then you just got to say, Okay, what are all these job duties, so I can go hire somebody else and pass one thing off. And I pass another thing off with another person. Right? So a lot of work in those early years. It’s why it takes, you know, an average of seven years for a business to truly get off the ground, even when it’s grown.
Luis Scott 22:21
Absolutely. And you know, one of the things that that you mentioned there is that really the problem with paying people more and the problem with hiring people comes down to your insecurity of developing new business. And once you shore that up, then it’s really just a no brainer. It’s just continuing to bring in highly qualified people into the into a good organization into a good culture. You know, you quoted a book called An Everyone Culture: Becoming a Deliberately Developmental Organization. And I want to read this quote, because this, for me was an aha moment. It was a moment where I something that I kind of knew, it became very, very real. To me, and it was it was this quote is, it’s in an ordinary organization, most people are doing a second job. No one is paying them for in businesses large and small in government agencies, schools and hospitals in for profits and nonprofits. And in any country in the world, most people are spending time and energy, covering up their weaknesses, managing people’s impressions of them, showing themselves to their best advantage, playing politics, hiding inadequacies, their uncertainties, and hiding their limitations. And an organization is responsible for creating a safe environment where employees do not feel compelled to hide, but safe to address their weaknesses. And I read that my mind was blown because the imagery of having insecure employees being treated as a second job, like it was like, Okay, I know employees are insecure. That’s why we, as owners, we have to be very careful what we say. But the imagery that they are carrying the weight of a second job was was like it literally blew my mind thinking about it that way. When you think about that, how does that help you lead your team? And how should that really change the way we lead our teams in business?
Eric Farber 24:13
Well, there’s a couple of things and things that we actually do. One is we incentivize people coming forward to say, I don’t know how to do that. And we’re very, you know, we’re an organization that values the people’s opinions. So we’re constantly calling on the frontline people to say Hey, what’s going on, and then we’re trying to be human with them as well. We want to make absolutely sure that if they’ve got a problem, they don’t know how to do something that they can just go to the neighbor for help. It’s been a little bit more challenging because we sent everybody home. And right now when they you know, your your, your neighbor is just on a zoom, you On on Microsoft Teams. But we we instill in people that it’s absolutely okay to make mistakes. Right? That you’re never going to get punished for making mistakes, you get punished for the cover up. Right? You get punished for you get punished for not saying something. Right, right. And we incentivize ideas, we incentivize what we’ve got is called a failure log. And, you know, you got to be careful with language, right? I started out as calling it the idea log. Right? You have an idea. But then after a while, we said, okay, we’re going to call it what it really is the failure log. So anytime that somebody you know, that somebody writes something down, that somebody sees a mistake, I don’t care how small it is. They write it down, and they share it with their immediate team, and then it gets fixed somewhere along the line. And sometimes that leads to a full blown process change. Right? So we incentivize that. The full blown process changes, people make these suggestions called canonize constant, never ending improvement at our last holiday party. we incentivize him so much, we get $5,000 to oh my gosh, to the best cannot, it actually wasn’t the best. We just said, hey, you’re going to submit canonize, we’re going to choose them, we had about 20 or 25 of them that we put the names into a hat for each Can I you, you submitted, you got a raffle ticket, and then somebody won $5,000 just to show them how important it is to make sure that we want to listen to what they have to say about the changes in our company. How does that come back to exactly what you’re saying? People are doing two jobs, they literally spend 50% of their time hiding the fact that they don’t know fully how to do their job. So one of the things that we set up was literally an online university. We called them Civic Workers’ University, and you know, an online learning system with all sorts of videos, modules, everything else, they can go back, and we now have somebody that is just does training. That’s it, right? That’s what they’re there for. And they are just the nicest people in the world. And they’ve been with us since the beginning. And they’re just a comforting person. Right? So when somebody says, I don’t know how to do that, the response is How the hell do you not know how to do that? Now the response is great. Talk to me, what’s going on? I’m sorry. And then we just, quote, retrain them, so to speak, right? In a really easy, comfortable, soft place to land type of situation. So they don’t feel like idiots. We’re not there to make them feel like idiots. We’re there to empower them. And the more you get them empowered, and they get on this roll, right? They start taking things on on their own, and they can drop the fear.
Luis Scott 27:56
Yeah, I mean, I love that concept. Because when you think about if you can remove a second job from a person, imagine how much more productive they are. And so that’s what I love what you’re saying. And I think that, you know, having a culture where you’re incentivizing people to actually be proactive in fixing problems and coming up with suggestions. That I mean, it’s it just it seems logical. But I think that that until I read that I didn’t understand how heavy that insecurity responsibility really was on people. And you know, you that that kind of leads me to belonging, where you talk about a sense of belonging, people want to feel like they belong to something and that your organization does 50 events a year for your team? You know, some entrepreneurs, they can’t afford that. They can’t do that. What would you tell them? You know, if they wanted to start off, they want to start having events where people can feel a sense of belonging, what would you encourage them to do?
Eric Farber 28:52
Well, the super easy one, and it doesn’t have to be, you know, we actually do a lot more than 50 because we have, we have a team get together every week, Friday afternoons. We have a team get together then we have quarterly happy hours. We have we have big barbecue, we have a get together sort of an anniversary. And then we have a holiday party. We have various things. Sure. Our holiday party. Our holiday party literally started out with you know, takeout and has grown to, you know, a super fancy place downtown, you know, in our town, you know, overlooking Lake Merritt. And we spend way too much money on it. So, but the all you have to do is get together. It literally can be you know, sending out for some sandwiches when we started out it was from my pocket and it was sandwiches. And, and but it’s getting together in a real way. And just being able to rub elbows and get to know people as humans, right. Yeah, you Learn about them learn about their families, when people start sharing things, they start feeling more connected. And that’s the important piece, right. And so, you know, it doesn’t really cost us anything to have these Friday, quote, happy hours. And we’re just sort of getting together. And then we stuck in, you know, we have a wheel and we spin it. And people talk about, you know, wins of the week, and things that they did great for clients, or they had a breakthrough, or I finally understand this, that type of thing, it doesn’t have to cost a lot. And they’ll just appreciate that. When we first started this company, Pacific Workers’, I went into my own pocket for this stuff, right? And, and you got to kind of do the same thing. And they’ll start to see that, they’ll see that and they become more connected. And then there is a sense of blindness, I’m gonna throw in another thing as you’re, you’re creating a culture, right? And a culture is at its core, a cult. Okay, word cultus. So you want those things like shared language, and you want those things that you’re, you’re constantly talking about the same thing. So we have things like we call a failure log, and can I and all these different short forms, that that sort of, it’s the secret code, right. And once you come in, you start learning the secret code. And that’s how you start building a shared message. Right. And once you start building that shared message, the belongingness becomes more and more.
Luis Scott 31:30
I definitely agree. I mean, you have to create points of connectivity for your team. And at the at the end of the day, it’s really the responsibility of the ownership and the leadership to do that for your team, because many of the people coming into your organization, they don’t know each other. And so if you don’t create points of connectivity, they’re never going to connect in a positive way. I read a concept in the book that that was kind of, I’ve never heard it before. I’ve never thought about it this way before. And the concept was this, it was culture without adequate pay results in people leaving, that makes sense. But then you said, Hey, so if you pay people well, but you don’t have an adequate culture, then people are just less productive. And I found that fascinating, because I think a lot of times what many entrepreneurs, many business owners think is, oh, I’ll just pay the person more, and therefore they’re going to produce more, they’re going to be happier. And what you’re actually concluding is No, that doesn’t actually happen. If your culture sucks, no matter how much you pay them, they’re not actually going to produce more. Tell me a little bit more about about what that means to you? And how, how did you come to that conclusion?
Eric Farber 32:37
Well, I came to that conclusion, because you can just kind of see it, but also, I’m a data driven person, very much a data driven person. And you know, so you’re going to ask me, it’s been a while since I wrote the book, but you know, coming hot off the presses, I can sort of give you every, you know, every stat in there, but the basic is good culture is you know, you’re going to be about 12 to 20% more productive. But when you create when you simply just paying people let me back up for a second, as we talked about, from the beginning, culture is a whole lot of different things. One of the things is is is is there’s discipline, culture is not about the foosball tables. Culture is about creating an atmosphere of productivity. One of the great cultures out there is Ray Dalio, his company, Bridgewater Capital, that’s how, you know, a company with a good culture is generally a tough place to work. It’s not an easy place to work, to tough place to work, because it’s because it’s got standards. It’s got shared mentality, it’s got it, it has productivity written all over it. So it’s not an easy place to work. You’ve got to to drop, you know, the easy place to go for somebody who doesn’t know how to do something, is to hide it. That’s actually, the the general and easy way for somebody to do it, the hard way for somebody to do it, is to raise their hand. So it becomes a difficult, it’s a difficult thing to do. Right? And it’s a difficult place to work. They’re not easy places to work, right? So if you’re just paying people with out creating that high productivity environment without creating that, hey, you’re gonna come in here and want to work hard, right, but it’s gonna be rewarding, then they’re not gonna do anything. They’re just gonna write a check, right?
Luis Scott 34:41
And they’re still gonna end up leaving you because they’re not going to be happy about the environment.
Eric Farber 34:45
Absolutely. Because all of a sudden, it just becomes look at my worth.
Luis Scott 34:50
Right? Yeah. And that’s, that’s one of the things that you know, to be to be transparent. We’ve suffered even that just Hey, if we just pay the person more, they’re not going to leave it. And then they end up leaving. And we’re like, oh my gosh, they weren’t appreciative, but it was because we had not yet developed the culture for them to stay. And so that’s where it became really important for us. You know, I saw that or I see many times you go to a company, and they have their values posted on the wall, right? Everybody has their values posted on the wall. And you talked about values, how do you have to live by them? How do values influence culture? When I consult clients, I tell them that they have to have their values, they have to have their vision, their mission, their values. And many times they’re like, well, I don’t want to do that. I want to learn how to market I want to learn how to do these other things. But I believe values are super important in culture. How do you best use those values in an organization to drive your your productivity? http://smartbusinessrevolution.com
Eric Farber 35:40
Well, I think they come up, they that’s the shared, that’s the shared language, right? is developing those values and really thinking about those values. And generally, you know, for law firms, the mission statement, the values, they’re easier than a lot of other companies, right? It’s easier than to, to excuse me to talk about those, those types of things, but they become the shared language. So I just received this in the mail, or sending stuff out nice. I just received in the mail. And it’s a little card reminding people of the values of Pacific Workers’, which is now down to, and then how to, it’s the mama steps to, to bring people back. Right, I’m an upset client. Right? So we’ve distilled that down to a little card. Right? So people remember this stuff, it’s first and foremost, right? on their minds at all times. And that’s a really important place, right? It’s a really important place to be,
Luis Scott 36:46
I think, reconditioning people for the, for their, their values, and, and what you stand for, is what drives them every day, you know, preconditioning, for that for that process,
Eric Farber 36:56
and we reinforce it on a on a constant and consistent basis. Right? Absolutely. So on those every week, on Fridays, I write a thing called Five bullet Friday, got it from, you know, Tim Ferriss, if you guys are entrepreneurs out there, then you should be reading Tim Ferriss stuff, great stuff. And, and so basically, I put in, you know, things that are happening around the, at the company, when we get a new person, in celebrations, anniversaries, you know, something happened, that was really great. And then we talk about something about customer service values, or just values, how we contribute to the community, how important our role is within our community. And so to keep reinforcing, and then on Friday afternoons, come back to how do we all spend, we always have, even if I’m not there, somebody takes it, you know, takes the mic for me, so to speak. And, and we’ll do the same thing. We’ll talk about the celebrations. And talk about those customer service values.
Luis Scott 38:06
Yeah, those are great ideas. You know, I think that it’s super important to keep values at the forefront. Like I said, it’s it’s part of, it’s part of the fabric of the business. Now. You’ve grown very fast, you said from four to about 65 people in, in a in six years, this is something we’ve struggled with in our business I know a lot of people have struggled with as well. And that is sometimes you grow, and the person that could handle that job gets promoted along the way, and then you realize they’re not the right person in that seat. How do you manage that situation? without hurting morale and maintaining the culture that you have? Like, how do you do that?
Eric Farber 38:47
Oh, wow, well, it’s a pretty tough one, it’s a pretty tough one, my, my preferred method is to actually try to coach them into the position until they’re good. Okay, and support that, because generally, it’s a pretty good person. And it’s actually what you’re talking about is actually called the Pareto principle, right? Where you promote people into jobs that they that they shouldn’t have. And, and they basically say about 50% of America is promoted into jobs, that they shouldn’t have a huge number. And it’s why so many companies are in bad shape. I prefer to try to coach that person. And then if it’s still not working, then I’m going to try to move them to what appears to be a lateral position in a different or in a different environment. So it doesn’t feel like a demotion down. Because you can pretty much guarantee that if you demote the person back to where they should have been, they’re going to be out the door, which isn’t necessarily a bad thing. If you’re going to transform a culture, you better get used to the fact that as we talked about good cultures or tough cultures, you better get used to the fact that probably 40% of your people are going to leave, you’re going to recycle before it gets great. All those people who can handle who just want to hide, who just want to collect the higher money paycheck and don’t want to participate, they’re gonna be out the door. Yes, we all know James Comey, right. been in the news, the last couple of years, the FBI Director ceremoniously sort of asked to be loyal to, as he says loyalty to the President. And then was then left. Right. So he was he was actually the General Counsel of Bridgewater Capital. And I think it was in Ray Dalio, his book Principles, but it may have been somewhere else. He writes a couple of pages in a letter talking about Bridgewater Capital being the absolute hardest job he ever had. And the most rewarding job he ever had. But the level of confrontation on the decisions that you make, on your participation on on your thought process, and I call it confrontation, but it’s really just, you’ve got to be ready, in a strong culture to be able to defend your decisions. Of course, you’ve got to because you’re trying to get things right. I’m not I’m never trying to be right. I’m trying to get things right. Right, yes. And that takes a lot of people around there. So if you’re sending somebody down, because they didn’t get it right, and you want to get them back, they’re generally probably going to be out. Unfortunately, they were probably good at that first job, where they just were there too long. So you promoted them, it’s probably okay that they’re going to be out, because you’re going to get somebody better into the cycle. But generally, I say it’s about three months, if you promote somebody, and then you send them back down. But if there’s one thing every entrepreneur needs to know, more than him analysis, hire people that are better than you. Right? Or people who know what the hell they’re doing, that are better than you at whatever it is. I’ve decided that there’s probably people out there better than me, and just about absolutely everything with the exception of one thing. And that is customer service experience. Right? That I have a vision of a customer service experience, once I actually because that’s our next major step in our company, create that customer service experience, all hire somebody who’s even better than me at that. Right, right. But until I sort of get that vision out onto the paper, there’s, there’s nobody that’s going to be able to do it better than I can. But once I get it down, once I refine it as to what that level should be about our brand, then somebody else better than me can take it over. Of course,
Luis Scott 42:55
I mean, that’s good. That’s good to know. Because that’s another great point on entrepreneurship is that you have to know what you’re good at. And you have to know what someone else is going to be better at. So that way you can hire the right people. So I appreciate that word of advice, because it’s tough when you put somebody in a position that they’re not going to succeed in. And now you have to make a very hard decision, especially the person who’s been with you 2, 3, 4, 6 years, you know, to have to make that decision, it gets really, really tough at that point. So as we conclude, I want to ask you one question, and this is a question that that I think a lot of entrepreneurs probably have, and that is, what is a piece of advice that he would give in today’s environment to really grow your business and scale it, like like you have, where you’ve grown 13 100% in just a couple of years, what what advice would you give a person?
Eric Farber 43:42
Well, there’s a lot of different pieces of advice, of course, be a reader. absorb as much information as you can understand what your product is, understand what your service is really about. understand where your brand fits into the marketplace. Don’t and, and expect that, you know, I’ve seen those memes a bunch of times, right? It’s like an entrepreneur is somebody who will, who will gladly trade 40 hours a week for 80 hours a week. Right? You better expect that it’s going to be far more time than you ever thought possible. Yeah. And, and that is, you know, I’ve got I worked from my dining room table these days. As I said, I’m not sure if I’ll ever kind of go back to the office in the regular way. I’ve got books all over the place notebooks all over the place. You know, because I’m constantly reading and I’m constantly taking notes. That’s my job. Right? Right. That’s my job is to it at this point. But if you’re going to start something, know where your marketplaces and, and the other, the real basic stuff really planted out. If you’re doing something right away Down build process notebooks. So you can hire that next person to do the next thing you know, so you can finally get some of that stuff off of your plate. Right? Start creating the vision of what you want it to look like now. Right? And that will help you get to that next level.
Luis Scott 45:20
Absolutely, absolutely. Well, thank you so much for being here. It’s been a real treat. We’ve been talking to Eric Farber, author of The Case for Culture, Eric, where can people find you?
Eric Farber 45:30
Oh, we I have a website called thecaseforculture.com. If you want to sign up for a newsletter, I generally put out a an article a month. And I also have a reading list because I read a ton of books. There’s a great reading list on there. And I’ll put out various stuff about various authors and various books, generally once or twice a month. And so you can find me there. You can find me on Twitter. I’m not all that active on social media. Sorry. Sorry, but, and you can get the book on Amazon. It’s a number one bestseller on Amazon. And it’s also available on Audible as well.
Luis Scott 46:10
It’s an absolute read. If you are a leader and you have a business and you want to have a great culture, you want to read The Case for Culture, and you’re not going to be disappointed with it. So there you have it, guys, leading a business with a great culture is the key to happiness. It’s the key to a good life as a business owner and anyone can do it. But it’s going to take guts, courage and hard work. And remember if you love this episode, be sure to subscribe so you never miss a show. You’ve been listening to The Guts and Glory Show.
Outro 46:36
You’ve been listening to The Guts and Glory Show with Luis Scott. If you enjoyed the show, be sure to share. For more information on this episode, please see the show notes at www.theGutsandGloryShow.com. And join us next time as we talk to another leader in business that had the guts to overcome all odds for the glory of success.
