BigDeal - #27 How to Be a CEO People Love

Starting point is 00:00:05 Hey and welcome back to those who put in the work. I'm Cody Sanchez and this is the big deal podcast and this is a moneymaker. Little bite-sized episode for people want to make some more money by building things. You guys are rare. All right, let's get into it this week. So this week is perfect for how to be a CEO people love, often an oxymor. And also what does it even mean to have your people love for you? Because it is tough love in some ways. When I think about my business here, I can train thinking. And we've been building this bad boy to have a nine figure holding company, multiple businesses that do eight figures. each, a team that's locally based, I've wanted to build this business different than just about anything else. So when I was in finance and I built multiple businesses at First Trust and State Street and entourage effects capital and all these different businesses, in finance, the thing is you have a very small group of people. So for instance, Warren Buffett manages a business that does hundreds of billions of dollars a year with 37 people. And in private equity, that's pretty similar. So you have these small teams that are super high performing. You really don't have a lot of entry level or low level talent. People come to you fully baked. You also typically in finance have

Starting point is 00:01:10 very strict incentive structures. So like if we do this deal and we make money, people make money. And so it's a very direct one-to-one correlation. This is important because most businesses aren't run this cleanly. And so as I've built a media business, I've realized, oh, wow, the way that I build this business has to be totally different. So obviously I love creating content. We post like 50 pieces of it across all my platforms. And if you've ever created content, you know the uphill battle. It can be to ideate, write, produce, film, video, and then you have to edit it all. So one of my favorite tools to use for this is Riverside. You've probably heard about it before, but I don't think people realize that it's revolutionized the podcast space by allowing creators all over the world

Starting point is 00:01:51 to do the recording in 4K, regardless of internet speed. But they've just released an update that I think any creator is going to love. So along with the high quality video and audio that they've kind of become known for, you can have editing software so you can edit any video content directly in Riverside. If your team's a little bit more bougie, like mine, and wants to record the video themselves, and then you can upload it to Riverside so you can use their amazing AI tools afterwards. It can transcribe your video, add customizable caption, analyze that transcript to cut out any dead space in the video. And my favorite part, they have this AI editor feature that will pull short form from clips from my content so we can squeeze all the juice of it out

Starting point is 00:02:30 from the many hours it takes to create it. If you think time is money like I do, then Riverside has given me and my team back lots of time, aka money. So I love these guys. And because I love you, I got you guys a deal. So try Riverside for yourself with the link in this episode's description. You can sign up for free using the link and discount code Cody at checkout for a discount on any paid plan. I cannot be the type of CEO I was before when I ran a finance company. And I was like, hey, you either hit these numbers by the end of the week. You either hit these numbers by the end of the quarter and you make millions or you're fired, which is really how finance works. It's like you either are a top performer and you make millions of dollars or you're fired or we burn you out

Starting point is 00:03:10 like crazy. So when I worked at Goldman back in the day, you know, we worked 70, 80 hour weeks. There was no time off. We were in the office nonstop. I was in a cubicle all day. I had to wear a suit the entire time. I was always in before the boss. I never left before the boss left. That was just like what was expected. And now the culture has actually shifted. And I do not think you can run teams like that anymore, which is probably why the biggest consulting and financial companies have the highest turnover. Goldman Sachs used to cut 20% of its staff every single year, no matter what, dead. And the big top performers, on average, an analyst stays a Goldman about two years, which is about how long I lasted. Anything past that does show that somebody has a

Starting point is 00:03:52 high level of grit and dedication because it's super tough, but it's also not that much fun. And, you know, I was talking with one of my other girlfriends who was, she stayed at Goldman for a long time. She became super senior at the company. And she was, she said it was really interesting because she watched one of her fellow MDs when her mother got sick. She had to take a lot of time off. She was an investment banking. And when she had to take a lot of time off, her call started slowly stealing her investment banking clients. So she had this woman that had been at Goldman for 10, 11, 12 years and had committed her life to Goldman. Like no kids, no marriage, she was married to this place. She made a lot of money for it. But the second that she couldn't pour everything back into that

Starting point is 00:04:33 business, her friends, her colleagues, started stealing her clients. And I think that that is a perfect example of why those cultures don't last long term. Because who wants to work at a place where you know the second that life happens to you, and it'll happen to all of us, they're going to not maybe fire you immediately, but they're going to steal from you, not help you cover. And then eventually, if you don't hit your goals, you will be fired almost immediately. There's really no second chances. And I think that is why most CEOs aren't loved, because sometimes business does necessitate a wartime CEO, which was famously popularized by the CEO of Dell, that you can have a peacetime CEO, nice, buddy buddy no big deal foosball tables that was everybody in tech up until the last two and a half years and then

Starting point is 00:05:19 over the last two and a half years we've realized oh my god we have to hit our numbers and become profitable and so people turn and become wartime CEOs I think you have to have a mixture of both today I want to dive into some ways that you can lead with a little bit more love and maybe a word that I don't think is used enough in leadership which is humor so I think humor is one of the most underrated business tools that we have in relationships in life and everybody. I do believe the truth that you shouldn't call people in your business, your family, because at the end of the day, you're probably not going to buy her mom and dad unless they're really fucking awful, but you might have to let somebody go from one of your businesses. Now, I do think you can say that they are your friends, and I do think

Starting point is 00:05:59 you can say that they are your team. Because a high performing team is really what? It's a group of individuals coming together with a shared goal and mission for a period of time in their life that may become incredible friends together, but may not travel through time together on the exact same team. But even after a member has left the team, they could still be buddies over the long term. And that is what I aim for at my companies, a high-performing team with a bunch of people that are friends. Because I do think you can be friends with your employees. Just not the negative way that people think about it.

Starting point is 00:06:28 If I couldn't joke and be friendly with my employees, it would be miserable to come to work every day. We spend way more time here than just about anything else. And so why wouldn't we choose to do business with friends? It's way more fun. What's interesting is if you break this down sort of mathematically, 25-year-olds spend on average about 275 minutes per day alone. But the next biggest segment, they spend about 200 minutes or two and a half hours a day

Starting point is 00:06:52 with their colleagues outside of work. So the average person spends about 90,000 hours, they say, of their lifetime at work. So if you do not get to work with your friends, then what are you doing for the entire day? If you've ever worked alongside somebody that you don't like, you know how perfectly miserable that can be. And I've been there. And what you have to realize as a leader is that your team feels that on steroids. Because if they have to work with somebody that they don't like, unlike you as the boss, you can control the narrative, right? You can walk away. You can tell that person you don't want to speak right now. You can not have a meeting. But if they are a fellow employee for your employers, for your employees, it's a lot harder for them to create their own boundaries.

Starting point is 00:07:32 And so every time you have somebody that your teammates do not like, it's one thing. They don't have to be best buds. But if there is something toxic happening in the culture, you've got to move them on. Because I truly think that half the world's problems for young men and women today could be solved with long nights building something that they care about, together, becoming better humans. And so that includes friends. So how do you bring humor into your business and into your employer?

Starting point is 00:07:58 Well, I think first it starts with you. Nothing better than make it a little fun of yourself if you want to start showing other people that it's okay to loosen up slightly. Especially as the CEO, sometimes you could be sort of intimidating. I've gotten told that I am sometimes. I remember I really knew that one of the CEOs I hired, shout out Bobby, I was going to love after members of his team started giving him a hard time. You see, Bobby drinks like an insane amount of monsters. Like he's a very large human, but he drinks way too many monsters. I like that because I think anybody who's like psychopathic enough to midday. monster drink. Early morning monster drink is probably going to be an animal and absolutely crush it at work and that is exactly what he does. But more than that, I loved it because I saw his team when he came over and started running a business for me. His team would comment on the things that he talked about with monster emojis. And I thought that was really funny. It kind of showed that his team knows who he is and makes little jokes about it. Now, he's hard driving, but they've all sort bonded over the hard together. A lot of people ask me, you know, how could you get better friends?

Starting point is 00:09:00 How could you get people to go through time together with you? You and Chris seem like you have a great network. The best place to start that is where you work. Because when you go through hard things together with your friends, the bond solidifies. And so that's why I like building hard things in business because I get to see who shows up. Who's the type of person I want to spend life with? And Bobby was exactly that. One of the examples that I did in the beginning, which the team will laugh at about this, is when I first started on the internet, I said I would never dance on the internet.

Starting point is 00:09:28 And I still stand by that statement, except, one time I did on TikTok. I did a horribly embarrassing dance that I will not repeat now. And that dance I circulated as like, oh my God, you guys look at this. This is so embarrassing that I did it. That dance has followed me for like the better part of a year and a half across multiple team members that's been gifted down by people who have changed job positions. And anytime, you know, I'm saying something silly or they want to make a funny PowerPoint, they throw that up in there. So how can you make fun of yourself so that your team feels comfortable and feels like you guys are I think that easy way to do it is, is you kind of turning yourself into a meme. So at our company,

Starting point is 00:10:07 we got a big meme culture here. And, you know, starting a couple different ways, but I have a friend, Nick, who he only sends messages to me that are memes. Do you guys have any friends like that? Like, it's like, you don't actually talk. It's just memes back and forth. And what I thought about when I was watching that is, man, every time Nick texts me, what's my natural reaction? Well, my physical reaction is to laugh. So when I get a text message from Nick, I open it because I'm like, I bet this is going to be funny, right? He has trained me like Pavlov's dog to think that I'm going to get a little treat when I get a text message from him. Now, you know, sorry mom, but you know, like, how when you haven't talked to your mom for a while, she'll be like, well, I miss you too, honey.

Starting point is 00:10:48 Well, I haven't seen you in a while. She's like text you stuff like that. And so I know when I get a text from my mom, I'm like, oh, man, you know, what did I do? You know, is she going to tell me it's bad that I haven't called her in a while. Probably all of you have a friend that like, our friend or a family member, we're like, oh, no, who's, what's going to come up with this text, right? So you train people the way that they're going to respond with you. And it's the same with our team. So we had a member of the team, Joe, and he sort of famously kept this thing called a meme folder, which I thought was genius. And inside of the meme folder was a bunch of memes from the team over the years. And he actually passed it on to another member of the team when he left to go build his own business. And I thought

Starting point is 00:11:26 this was so funny because, one, you're leaving a little bit of a legacy, and two, you can be sort of the vibe giver inside of a company. And so I think that is a really cool idea to do continuously. One way that I install memes sort of nonstop and what I do is I think about selling inside of my company just as much as I think about selling outside of my company. So I probably, I thousand percent do more presentations internally than I do externally. Then those presentations often will have a little meme in them. One of our like more famous memes at the company that we use a lot now is called Hold My Beer. And so at the company, when we try to hit a goal, oftentimes people will be like, all right, it's a hold my beer moment. This allows you to have

Starting point is 00:12:04 group, interaction and verbiage and language, which is one of the most important parts to cult building, also culture building, which is really not that different at a company. We just took our portfolio company insights and put it into a step-by-step scaling course for you and anybody wanting to scale a small business. It's linked in the show notes if you're looking to grow your business to make a little bit more money with less pain and more profit. This thing is for you. Visit BetMGM Casino and check out the newest exclusive. The Price is Right Fortune Pick.

Starting point is 00:12:37 BetMGM and Game Sense remind you to play responsibly. 19 plus to wager. Ontario only. Please play responsibly. If you have questions or concerns about your gambling or someone close to you, please contact connects Ontario at 1-866-531-2,600 to speak to an advisor, free of charge. That MGM operates pursuant to an operating agreement with Eye Gaming, Ontario. The next thing that I think is really important to talk about is your people are watching every move that you make.

Starting point is 00:13:07 They're listening to what you're saying, but they're really watching the moves that you make. And so I do something that I call Leave with a Shine. Your people actually are watching the way that you let people leave a company more than anything else. They are watching the way that you let high performers go and the way that you let low performers go. And when you let a high performer go and you talk shit about them, they will never forget that. Because they know that if they're a high performer, that is how you are going to treat them when they leave. And so it's really important to watch the way that you let people leave your company, even if they're the ones leaving or if you let them go. Now, I'm not a believer in bullshit in people.

Starting point is 00:13:45 So if somebody leaves my company and is let go or leaves what wasn't a right fit, I'm not going to lie to them and be like, they were an incredible performer. or thank you so much for everything that you did to this company while you're here. If they didn't do that much, I'm going to say, I'm excited for your next opportunity, and I wish you the best moving forward. I'm going to be honest. And I'm not going to sugarcoat it for people that weren't a good fit for our company. I'm not going to make them look bad, but I might say at our company, it is required for you to do the things that you say that you do.

Starting point is 00:14:15 And we can't have people at our company that don't do the things that they say that they're going to do. And so we've decided to part ways and wish them all the best, but this was not the fit for them. And so I think your employees want to know, you're going to be honest, you're also not going to talk shit. And so, for instance, we had a member of our team

Starting point is 00:14:30 that I had mentioned before, Joe, he was based in Minneapolis. And we, the team, are all in Austin, and we just really needed somebody here locally to manage the content. And it was becoming too hard with Joe being remote. Too many things were getting missed.

Starting point is 00:14:43 And he actually proactively brought it up to me. It was like, I don't know if this is working that great that I'm not here. Now, I, of course, tried to talk him into moving and love you, Joe. I think that this would have been an incredible opportunity for him to build here in Austin. But with all due respect, he had a new fiancé. They're very tied to Minneapolis and he wanted to stay there.

Starting point is 00:15:01 And so that was incredible. I wished him well. I told him that, hey, when you need your first investor for your new company, when you need help and you get stuck, call me. We text each other still to this day. And when he left, I told everybody this story. I said, you know what? Good for him. You know, he could have drugged this Almore.

Starting point is 00:15:18 And he was riot because when he left to the company, we like, like two to three X are short form growth because we were just able to move faster locally. And thankfully, that's not really saying anything bad about Joe. It's just saying he had the foresight to say that. And I thought that was really incredible. And your people are watching you when your best people leave. So be careful how you treat them. The other thing I'd say is as an employee too, always really good to keep your options

Starting point is 00:15:44 on the table as opposed to burn the bridge. You know, Joe let me have 30-day notice, which I thought was pretty incredible. Joe helped me try to find the next new person. And as often as you can do that and not taper off poorly at your prior company, those people will end up helping you for life. And, you know, there's many instances where I ended up investing in somebody's company because they were awesome with the way they left. One more thing. Anything that you tell your employees at your company is going to get repeated. So be really careful the words you use and hold other people accountable for the words that they use in your company. So, for instance, I had one employee. This was at my last firm

Starting point is 00:16:21 First Trust. This employee, she called one of our clients an idiot. And not to his face, but, you know, in what was slack at the time, we used a different system. But, you know, basically said, hey, you know, oh, yeah, typical idiot, you know, client wants X, Y, Z, wants all the money with none of the headache, blah, blah, blah, kind of said something like that. Seemingly innocuous. But here's a problem. If we treat and talk about our clients as idiots, do you think that we will serve them better than anybody else? Do you think that they will want to buy from us? Will they feel like we think highly of them when we're calling them idiots behind their back? Of course not. So I immediately sat down with her and I said, hey, at this company, we can't eat, we can't go on trips,

Starting point is 00:17:03 we can't have this nice office unless we get really smart people to buy from us. And so we can never, even if we disagree with a client, call them names. That's just a rule I have here. And listen, you can do whatever you want. If you want to call people an idiot and that's how you want to communicate, you have every right to do that. You just can't do it at this company. So you get to kind of choose between the two. And of course, she said, oh, hey, I won't do that again. But it is a really important reminder that I said, now you did this in a group channel. So other people saw it, which means that I have to now address it with the company. I'm not doing this to call you out, but I do have to call this action out. So you're aware. I'm not asking for her permission to do it. I'm making sure that I set the vibe. I set the culture fit, which is really important inside of your

Starting point is 00:17:50 company. And then another thing I think we've got to realize with friends is that friends and team members both can have boundaries like we talked about in the beginning. On the last Chris Voss episode, if you guys haven't watched it, you should go back and watch it. It's incredible. He talks about there are three types of negotiators, but really I say communicators. And communicators just made another employee in the company. There are accommodators. There are analysts and there are assertives. When you get together with your friends and with your employees, you're going to find that you probably employ all of them. I am an assertive, which means that mutual respect first is important to me and I can come off as emotional,

Starting point is 00:18:30 like aggressively emotional or harsh. I know that about myself. Now we've got an analyst. They're like data first mindset and they can come off cold as distant. And then we've got accommodators who are relationship first and they're friendly, but sometimes they can be too talkative. So can you imagine what happens when you get people in a room where one's super assertive, harsh, respect first, one's data-oriented, quiet, kind of cold-seeming, and another one is chatty-caffy and also all about the relationship. Well, the relationship employee only really wants to engage for you to feel good. That's the most important part to that.

Starting point is 00:19:08 We want to make sure everybody feels good. The assertive's like, I want to get this done. I want to be efficient. I want to be fast. And so you have to realize in your friends and family, you're going to have to set some boundaries because you guys are going to communicate differently. And so, for instance, at contrarian thinking right now, we have one member of the team who is a total accommodator, which means incredible employee, works really hard, wants to talk forever. As an assertive, that makes me want to bore my eyes out. And probably when I communicate with her sometimes, she's like, God, could you stop being so intense? and can we just have a nice conversation because I want you to feel nice and we both want to like each other. We had to have the tough conversation of like, hey, my communication style is pretty abrupt and specific and to the point. And I realize that yours is much more, you know, wide ranging, broad, and you really want to get to know me. In order for me to get done what I need to get done, I can't communicate in this way. But I want you to know that it's really important to me that you know. And then I listed off a bunch of stuff that I knew about her.

Starting point is 00:20:06 Hey, that, you know, Brad, your husband is super important to you, you know, that I'd love to have, you know, the cat over to hang out with the dog one time. That, you know, it's really important for me to go paddle boarding on the weekend, too. And we could do some of those things together. But in this office setting, this is the way that I have to communicate. Just because your friends doesn't mean you can't have boundaries. In fact, the worst thing you could do in the world for an accommodative is not tell them this stuff and they're always wondering why you're running away from them. So think about that with your team. When it comes to being a CEO that your people love, make sure that you don't confuse being loved and being liked.

Starting point is 00:20:43 There are very many CEOs that I loved the way they pushed me. I loved the vision that they had for the company. I loved their ability to speak. I loved the way that they got things done. But I might not have liked a lot of the things that they did. I might not have liked them as a human. We might not have been best buddies. The hard part about being a CEO is you've got to give people the tough truth, or what I call sort of the tough love.

Starting point is 00:21:08 And the tough love in some instances is in things like, you know, I had an employee, she was at my financial company and she could have been amazing. Like she just had that fire in her, you can tell. She always did what she said she was going to do. She was going to be one of my MDs, my managing directors in Latin America. I wanted to promote her badly from an inside sales rep where you're in the office making phone calls all day to somebody out in the field that goes and meets with financial investors. And that's a big change. We're talking a difference from making, I don't know, $150,000 a year to you could have made a million dollars a year in the outside sales reprim. And this young woman had just gotten married. And her husband was also in finance.

Starting point is 00:21:46 And her husband was not very supportive of the thing that she wanted, which was to go and work in Latin America on this incredible opportunity and potentially make a million dollars a year plus. And I sort of watched her wither away from the person that she could have been trying to be the person somebody else wanted her to be. Now, there's no more sacred union than a husband and a wife. And I would never get in between the two of those. And so I really kept my opinions to myself and just said, hey, this is an incredible opportunity. This is what it is. You need to think about what works for you.

Starting point is 00:22:18 But eventually, she said no. She got passed up. Somebody else got the next role. And she eventually no longer worked at the company. I think probably it's pretty painful to watch somebody else achieve your goal when you know that you could do it. And I always remember that because at the end, right before she left, I sat her down and I said, I do not want to push you one way or another. But I want you to understand what you're giving up because at least then you'll never have a regret if you make a decision based on having as much context as you can.

Starting point is 00:22:49 And we talked about the situation and we talked about the business and the opportunity. and she still decided to go the other way. And, you know, I'm not going to get into her personal life or what ended up happening from there, but needless to say, she did not love that conversation where I said, I think that you are going to regret this decision and you need to at least have a very hard conversation with your husband about it and make sure this is what's right for your family because you probably won't get another shot at this, at least for another five years. You as the leader sometimes have to do the thing that nobody else wants to do, which is tell

Starting point is 00:23:20 people the truths, even and especially when they're not going to like it. All right, moneymaker series, how to be a CEO that people love, and sometimes the CEO that gives people tough love. The difference between a business that you hate and one that makes you a lot of money and it's fun are your people. And if you don't take care of them, they won't take care of you, and that I can promise. If you haven't subscribed to the channel, make sure you do. Make sure you give us a little review wherever you're listening to it. That is the only way we grow. And I want to make sure that we make some more podcast for you guys. So tell me in the comments what else you think we're missing. What else you want to cover? What other burning questions you have? And those questions will become the next podcast.

Starting point is 00:23:56 See you next time.

BigDeal - #27 How to Be a CEO People Love

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