EntreLeadership - How Do We Set Up Our Company to Outlive Us?

Episode Date: February 13, 2023

Today, we hear from: •      A business leader who wants his family business to outlive the founding generation •      Craig Groeschel on how to finally change your bad habits •      A business owner who wants to switch from contractors to team members •      A leader who is trying to figure out if his team member is overloaded or underperforming Links mentioned in this episode: •      The EntreLeadership Podcast: https://bit.ly/TheEntreLeadershipPodcast •      Craig Groeschel’s website: https://bit.ly/3AxqwJA •      The Power to Change by Craig Groeschel: https://bit.ly/3lql862 •      Craig Groeschel Leadership Podcast, 8 Habits of Great Leaders, Part 1: https://bit.ly/3YEbA5x •      Find a tax pro: https://bit.ly/3RQZSlO •      Learn more about the EntreLeadership system: https://bit.ly/3J2BCJ0 •      Get your ticket for EntreLeadership Summit 2023: https://bit.ly/3LRiZJH •      Have a question for The EntreLeadership Podcast? Leave a voicemail at 844.944.1070 or submit your question for your chance to be on the show with Dave Ramsey: https://www.entreleadership.com/ask Support our sponsors: •      Hite Digital: https://bit.ly/HiteDigital •      NetSuite: https://bit.ly/NetSuiteEntre •      BELAY: https://bit.ly/351P9AE •      Payority: https://bit.ly/3IaA5SK •      Staples: https://staplesbusinessadvantage.com/ramsey Learn more about EntreLeadership Events: •      EntreLeadership Summit: https://bit.ly/EntreLeadershipSummit •      EntreLeadership Master Series: https://bit.ly/EntreLeadershipMasterSeries   Learn more about EntreLeadership Coaching: •      Elite: https://bit.ly/3tI2fN8 •      Advisory Groups: https://bit.ly/EntreLeadershipAdvisoryGroups •      Executive Coaching: https://bit.ly/EntreLeadershipExecutiveCoaching •      Workshops: https://bit.ly/EntreLeadershipWorkshops Listen to all the Ramsey Network podcasts anytime, anywhere in our app. Download the Ramsey Network app: https://apple.co/3eN8jNq Learn more about your ad choices: https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy: https://www.ramseysolutions.com/company/policies/privacy-policy Learn more about your ad choices. Visit megaphone.fm/adchoices

From the headquarters of Ramsey Solutions, this is the Entree Leadership podcast, where I take calls from leaders like you about what it takes to win at any stage of business and leadership. I'm Dave Ramsey, your host, with over 30 years of experience leading in the trenches right alongside you. In other words, this is not a show about theory. This is a show about how I actually run this business, how I grew it from a card table in my living room. And I've done a lot of stupid stuff, so I can help you avoid. some of it. If you want to talk about your business, you got questions about leadership. The phone number is 844-9-4-1070, or if you want to drop a line to us, we'll get you on the line by going to entreleadership.com slash ask.

Entreeleadership.com slash ask. David's up first in Richmond, Virginia. Welcome to the Entree Leadership podcast. It's nice to be here. I've actually talking to you. I've read all your books, and I've been a part of your classes like three or four times just because I like doing them. Thank you. My question for you is from the perspective of a founder of a now family enterprise, what suggestions would you give someone who is of, I would say, a newer generation of a family business that we can foster stronger relationships within the family in the business so

we can keep prospering going forward? I don't know what you mean. Okay. I'm the fourth, I'm the fourth generation of my family's business with my sister and my cousins and I. We're in the construction supply industry. Okay. And so my great-grandfather, my grandfather, both were the founding family members of the business. Gotcha.

My grandfather's still around. He's in his 90s. Wow. My dad is our CEO. My aunt is our executive vice president. and we've got over 175 employees. And now I'd say the fourth generation, myself, my sister, my cousins and I, are in, I would say, positions within the company that we actually have more interaction with my dad, my grandfather, my aunt. But we've never really worked together.

And so what I've tried to start doing with my, the fourth generation is us meeting together regularly. And now as a family, we're having legacy conversations very much. much to your book, The Legacy Journey. But I don't know what else to help do Disprosper. I feel like there are a lot of conversations of kind of like when people die, you know, who gets what? And I'm kind of like, I just want the business to keep going another hundred years. I don't, you know, it's like, and I don't know what else to do.

So I'm speaking advice. Very good. Okay. The Kathy family, we've talked to them a lot about this at Chick-fil-A, and they've done a great job with it so much so that Harvard has done a case study on their transition plans. They do have generational meetings, like you're doing your Gen 4 meeting that you formed, very wise, good move.

And they'll bring in some of the people from the other generations to coach that generation. So your grandpa, his 90, is he still sharp? I would say he's very sharp, but, you know, he's not getting any younger. Yeah, why don't you have him attend some of your Gen 4 meetings? and coach you guys. Okay. I'm writing it down right now. I can't think of anything more rich than to say, you know, my grandfather, my,

you said your great-grandfather and your grandfather started it, right? Yes. And your grandfather is 90. Yeah. Yeah. And so he's just gen 2, but he was a founder. And he can come in and share and go, hey, guys, we didn't form this for you all to squabble over who gets what when we die.

We formed this to serve the customers. and for the family to enjoy the profits. But it wasn't to squabble over. And he can set tones on stuff like that and say things you won't say or can't say. I like that. Okay. And you could actually prompt him before he gets there. Like, you know, Grandpa, one thing that's happening with this generation that I'm worried about is they're more worried about what they get when people die rather than worried about how we can make the business prosper.

Can you speak to that when you come? you know, give him a script, give him a little prompt, and he loved to say that stuff, I bet. Yeah. And, you know, they'll take it from him. They won't take it from you. Right. And now, are you guys doing a really good job of separating ownership is different than working in the business? Yes.

Actually, that's one thing my dad, my grandfather, and my aunt have done very well. Like, you know, the ownership is truly separate. I mean, our actually president of the company is not a family member, which actually, I think, is helped because it's like, hey, you don't have to be a family member. But, like, my dad says it this way, you need to be willing and capable. And, you know, it's like, like, otherwise you could work here, but it's like you, that could imply to any person who works. So it's not a guarantee, you know, just because your family member doesn't mean that you're going to be. Yeah, because, I mean, the proper model is if a family member works in the business, you know, they get paid for their job that they're doing and nothing else working in the business.

If they also are an owner and there's profits distributed to the owners, they also get that. But they would get that if they didn't work there. Right. And my grandfather's been very strict on nobody who doesn't work in the business profits from the business. Okay. So he doesn't want owners in the family that don't work there. Yes. Okay.

And so that's your family charter in a sense. Okay. Then that's your all's decision. So if you want to be an owner, you've got to be in the, you got to be also have a job there. Yes. Okay. All right. I still would separate the pay for the job from the ownership calculation.

Yeah. The ownership is totally separate from like that everyone has an actual job that they perform and get compensated for. And here's the thing. In your case, in your case, though, what's going to happen is. is they're worried about what they get, what everybody gets when somebody does? Let me tell you what else happens. What about when somebody quits? Right.

That's going to change the divvy. That's going to change the percentage of ownership, right? Right. And what happens to that person's portion? Do you all know? Is it written out? I believe my grandfather knows, but that's something I don't know. It's something to ask.

Okay. Yeah, I mean, let's understand that. And then everybody kind of goes, okay, if I leave, I'm not only leaving my salary, I'm leaving this portion of ownership behind. Yeah. And that's going to be redistributed among my brothers or sisters or all the cousins or whatever, however the formula is working. But if everybody knows that, then it's real clear.

And then you can keep a good, healthy conversation going about just being excellent at your job, which sounds like your dad has been doing a good job of that. Yes. He's an fantastic job of growing the company and growing the family culture very much like our customers tease us as being the chick-fil-a of the, I would think, you know, construction supply industry. Good. And that's what we want because we want, we want people to feel like they're known and

Well, they're teasing you because they're jealous. Yeah. They want to be you because you're doing something very unusual and very intentionally. It sounds like you guys are way ahead of the curve. Congratulations. And hats off to your grandpa and your dad. They've really, in your aunt, they've really pulled together a great thing. thing here. And obviously they've mentored you well because the way you're, your knowledge base on

this and the way you're asking these questions is wisdom. So very, very well done, David. Very proud of you. Good stuff. Excellent, excellent work. Yeah, family business is a lot of fun if it's done right. But your family business is never going to be any more functional than your family is. So if your family is, by and large, crazy, don't expect them to come down to the office and be sane. It's not how that works. Whatever's strong about the family will be strong at the office. Whatever's weak about the family will be weak at the office. Expect that to duplicate itself.

This is the Entree Leadership Podcast. Welcome back to the Entree Leadership Podcast. If you want to jump in with your phone calls, we'd love to hear from you. It's not theory around here, baby. This is practical stuff. 844-944-1070. I'm Dave Ramsey, your host. One of my favorite people on the planet, a good friend, Pastor Craig Grohstrom.

Shell joins us for a segment here with a brand new book, The Power to Change. This guy, man, one of the best leaders in America today. He leads one of the largest, if not the largest church in America today and teaches leadership all over the world and the power to change. People need the power to change. Welcome, Pastor. Hey, Dave, it's great to be with you again. And it's a kind introduction, but I cannot barefoot water ski like you.

I'm sure what that has to do with anything. But I don't know, but I don't care what it has to do. I just need to say that if people don't know that, Dave Ramsey can barefoot water skis. And I can't practice jujitsu like you do. So there we go. So we're even. We're straight up even. I love it.

Hey, man, you and I have been friends a long time. And I've observed and watched your leadership path and watched your growth. It's been incredible over the years. Thank you. The inside jacket of this new book, we've talked about all the pieces in the interior, or what the book's about, the thesis of the book, over, you know, coffee and hanging out with our wives. And, you know, this subject is just something that's near and dear to both of our hearts. Few things in life are more frustrating than knowing you need to change, wanting to change,

and trying to change, but not changing. Pastor and bestselling author Craig Groshell knows what it's like to be caught in that demoralizing cycle. The power to change, mastering the habits that matter most. It comes out this week. Go ahead and get it right now. This is an absolute must. Craig is a regular speaker at Entry Leadership Summit, and there's a reason, and you're going to find out why, as we spend time together here. So when it comes to mastering the habits, your subtitle here, which I love a great subtitle,

mastering the habits that matter most, what are one of the two of the personal habits that matter here? Well, first, thanks for the confidence on the book. And I would say, you know, the core message of this book really is what you do all the time, Dave, as you're helping people change kind of their identity and their financial habits and so much more than that. And so what's interesting is a lot of people talk about, you know, what habits do we need? And I would start and say, before we look at what you want to do, take a step back and say, who do you want to become? And a lot of times people are trying to really change external behaviors. But if we're just changing external behaviors without changing our hearts, the behaviors

tend to go back to where they were. And so before we start with the do, what I like to do is try to start with the who and say, who do you want to become? Because if you think about it, what is it that drives our habits for better or for worse? It's typically our identity. I could say it this way, if you want to sound like Dr. Seuss, that you do what you do because of what you think of you. Our identity tends to determine what we do. And there's an interesting study, Dave, that I quote in the book, and I don't know how they came up with this as way, my pay grade, but this one study shows that in any kind of situation, whenever you face a decision, some kind of potential confrontation or whatever, you subconsciously in a millisecond

ask three questions, that in your brain you ask some version of, what type of a person am I, what kind of a situation is this, and what is someone like me doing a situation like this? And we do it over and over and over and over again. So if your alarm goes off, what kind of person am I? I'm the type of person who hits snooze and stays in bed. Or I'm the type of person that jumps down to bed and tax a day. So your identity drives your action. So before we look at the external habits, we start with the internal identity.

And I would ask the reader, who do you want to become? Who do you want to become? And then, to answer your question, based on who you want to become, I would say, what habit do you need to create or what habit do you need to break? We'll start with identity, and then that will drive our habits. I am a night person by biowrhythm or whatever you want to call it, right? Yes. And yet, for the last 20-odd years, I've gone to bed at 9 o'clock and gotten up at 5.

Interesting. Because I discovered that fresh in the morning, I can get an exercise regime in, prayer time in, time with my wife, set the foundation of day and I just figured out, I'm watching successful people do that. And so I'm going to, I am a successful person. I'm going to be a successful person. And so I'm going to do that. And I reset that. Now, I still have energy at night. I mean, that didn't stop happening. But I didn't try to go, okay, I'm going to do my workouts at night because there's no chance I'm going to do that from a schedule standpoint. There's always something else going on. You know, Sharon and I are going out to dinner with you guys or something, or we're, you know,

we're traveling to go speak somewhere. There's always something going on at night. And so I am not going to sit and read unless I'm on an airplane at night. I just don't. Well, I'm generally on the go. So anyway, I just had to figure that out, how to reset that. And that's kind of what you're talking about. You just identify who you are and where you go from there.

And it's a little bit like those three questions, that's interesting research, because it's a little bit like you and I have taught in leadership. to make sure that the leadership team knows what our principles and our values are. And then when something comes at us, we already know what we're going to do. Because we set it ahead of time with that value. We value this. And so when this situation comes, the decision is already made. Correct.

Right. The only pain that's left is actually executing the decision. This person, we don't tolerate that kind of behavior. This person is fired. Now, we've got to go fire him. Right. But they violated a value so extremely that, you know, ladies in the building don't feel safe because the way this guy's behaving, he's gone. You know?

And we're not mad at him or something like that. But that decision's already made. We don't have to fret over the decision. The values made the decision. Our identity made the decision. That's the same thing you're talking about, right? Yeah, 100%. You've taught that in leadership well.

And I've always admired that you're. you're going to create a culture based on your values. And so we're the type of organization that celebrates this type of work or we're the type of organization that doesn't allow this kind of behavior. And that's the same thing we're going to do is in our mind is we're going to say, I'm the type of person who, what, this is who I want to become. And then when you know who that person is, let's say I look at you and let's say, you say, okay, you get up early in the morning and then you work out and you read.

And I say, okay, Dave is successful. That's part of his story. So I want to adopt one of those mindset. So my first one might be I get up early and I'm going to start there. And then once I get up early, that's going to reaffirm the identity that I am a successful and disciplined person, that I may take another one of your disciplines and I'm going to read my Bible in the morning. And that's going to reaffirm I'm a successful. And then over time, I'm not trying to be someone who gets up early and reads the Bible and works out.

It's a part of my identity. So my identity drives my habits and my good habits, reinfect. force my identity, and then we're not trying to be something else. We're actually, this is who we are. And the fun thing is that it's really, a lot of times people get overwhelmed by change. Like, I have to change all these things to get there. We talk about just doing it one small thing. You say baby steps, right?

You take this one baby step, followed by another, then you get the debt snowballed. And this is similar to change, as one small change at a time. and you start getting the cumulative exponential power of a totally transformed life. Absolutely. You move one degree at a time. One degree at a time. And, you know, you read two pages a day. By the end of the year, you've read a bunch of pages, you know, but everybody's all worried

about the whole book. And so this incremental constant rhythm of change, constant rhythm of application of the new discipline is more important than trying to swallow the whole frog at once. It's just, you can't get it done. Craig Groschelle is my guest. He has a new book called The Power to Change. You need to read it immediately, mastering the habits that matter most. Now, some people watching or listening to our podcast, the Entreat Leadership Podcast, don't know. You have a very successful leadership podcast as well. I am a consumer of it. I listen to you on my walk or my drive to work or whatever I'm doing in the morning. It comes out, if I remember Thursday,

one Thursday every month, right? First Thursday every month. If you listen to it, which I am humbled by, you would have heard yourself two times. You're one of the only two-time guests on the podcast, and your leadership contribution, both personally and publicly, has made such a big difference in life.

Well, somebody canceled and you had to get somebody. Hold Dave. I think he's available. Oh, yeah, Dave will do it. Dave will do anything. All right, and I will for you. So the, but I was listening a couple of weeks ago, and you're talking about this book, and I loved the eight habits to create this. The hard right was, I mean, the no snooze was really good.

I like that too, because I am a no snooze. And I always have been. I actually wake up about six minutes before my alarm goes off almost every day, and I get up immediately. And I'm thankful that I can still do that. I can still get up. good. I do pre-decide a lot of things. So those were easy for me. I was just looking at it through my own eyes, user experience, but the hard right is a really good way to describe a little bit of what we were talking about a while ago, making a decision based on values. Talk about that one.

That's exactly right. Well, the principle we talked about in the podcast was choosing the hard right over the easy wrong. And you know this in your leadership that so often when you're faced with a situation, there's something that there's a little less resistance. There's something that something that appears easier. And generally speaking, not always, but generally speaking, the harder option is usually the right thing. It might be hard to say no to temptation, or it might be hard to have a developmental conversation with someone. But the principle and the habit that I'm trying to create as a good servant leader is that any time there's a situation when I know what the hard thing is, and if it's right, is to choose it and then to just let the results fall

where they may. And what's interesting is usually the easy wrong may be easy in the moment, but over time doing the easy thing, when it's the wrong thing actually becomes really, really difficult. And so sometimes ripping the Band-Aid off or doing what's right in the moment may seem more difficult, but over time it actually becomes better. So I had a theory as I was listening to that. I want to run it past you. Yep. My theory is that the more you make the hard decisions based on doing the right thing, the easier it gets.

You build the muscle to do that. You do. You do. I mean, the thing that flashed through my mind when I heard you're talking about on the podcast was, I mean, I'm bombastic, wide open, but tender-hearted in the middle of all that. And so early in my married life and early in my leadership life, I was just hard charging and blow on by and just leave muddy boots all over everything. And never bothered to apologize. Apologizing for screwing up was very hard for me to say I'm sorry.

Now I say it all the time because I've got a lot of reasons to be sorry all the time. I screw stuff up pretty regularly. So, I mean, I have built an I'm sorry muscle. I do that. But it was very difficult for me to learn to do that. No, that's exactly right. Same thing with getting up early. It might have been more difficult for you. But after a while, your body adjust, your mindsets adjust. When it comes to diet, it might be difficult. It was really difficult for me for years and years to say no to certain food. But after a while, I developed a taste for the ones that were a little bit an appetite for what was a little healthier for me. And now it's easier to say, no, I've built a muscle. And that's the perfect analogy.

if you go to the gym and you're trying to curl 10 pounds at first, it's difficult. The motion seems awkward, but the more you do it, the more you get in a rhythm. And then it becomes a habit that you don't have to think about. And that's what we want to try to do is create multiple good. And neurologically, we're creating new neural pathways in our brain. So doing the right thing becomes easier over time. And the more we do it, the more affirms our identity. And then, like, your story is a great example.

what a lot of people don't know is like, I met you when you had two radio stations. I think that was all that you had. And people don't know the consistent behind the scenes, faithful, hard work, small right decision, small hard right decision by the next one, next one, next one. And compounding over 20 some odd, almost 30 years later, you've got a international impact. But that was the result of making lots of hard, right decisions over the years when the easy wrong. might have felt better at the time, but you wouldn't be impacting nearly the people you are otherwise. The book is the power to change.

And, you know, change is doable. And if things aren't working, change is necessary. If things are going to get better, you have to change. You can't keep doing what you've been doing. Expect a different result. That's the definition of insanity. So Craig Rochelle is our guest, this segment. Be sure you pick this book up immediately.

And if you stay tuned to Entry Leadership Summit and you come. come to our events. You're always going to see pastor speaking from time to time. He's a regular with us. He and I've been friends for a long time, for a lot of good reasons. He's one of the top speakers and teachers on leadership in America today, as well as one of the top pastors in America today. Love you, my brother. Thanks for hanging out with me. Hey, thank you, and I look forward to hanging out with you in the evening again, although you always have more energy than I do in the evening. So I appreciate your friendship. Take care, Dave. Be good, brother. The power to change is the book from Craig Groschelle.

Hey guys, you guys, be sure you pick this book up immediately and anything else he writes. And join him on his podcast too. Again, I'm a consumer of it. You guys are here for leadership podcasts. You're here for learning. There's several of people that are friends of Craig's in mind that have podcasts. I listen to all of them. And I learn something from them all the time.

So jump in there and pick all this up. This is the Entree Leadership Podcast. I'm Dave Ramsey, your host. This is the Entree Leadership Podcast. Thank you for joining us. If you want to participate, you've got a business question, question about your life and your business, because this is what it is when we're small business people, right? Just dial us up 844-9-4-1070. If you haven't registered for Entree Leadership Summit yet, why not? It's a pastime. Summit is hands-down the best leadership conference out there.

I'm bragging, yes I am, but I tell you, I go to all of them. Nobody. This is amazing stuff. We're going to be in Nashville, our hometown this year in 2023, May the 30th through June the 2nd. It is almost sold out. There's a handful of tickets left. Dr. Jordan Peterson will be with us. Malcolm Gladwell will be with us. Dr. John Deloney. I'll be speaking.

Ken Coleman will be speaking. We brought the speakers together. Willie Robinson from Duck Dynasty is going to be coming. This is not a conference you can afford to miss. This is not a sales tactic. It's just the truth. This is going to feed you and fill your tank up. Entreeleadership.com slash.

summit and get your tickets before they're gone. Again, it's here in Nashville, in our backyard, at the fabulous Opry land, a hotel complex, it's a resort deal. It's amazing. Got a river running on the inside of it if you've never been there. It's cray-cray. So in May 30th through June the 2nd, the Entree Leadership Summit, get your tickets at ontorrileadership.com slash summit, and that'll get you rolling. Trafina is with us next in Tampa, Florida. How, Trafina? How are you? Hi, Dave, I'm doing well. Thank you for taking my call. Sure. What's up? Yeah, so we are a Schedule C right now. We're at LLC with a Schedule C like pass-through tax setup.

Sure. And we're looking to transition from contractors to W-2s. And I want to know what kind of like structure, business structure we should be. Like what kind of corporation should we establish? A little C is fine. Another wrong with that. Oh, okay. It doesn't affect anything at all. We're in LLC and we've got 1,100 on W2. So, yeah, I mean, that's a fairly standard process. How many people will you be doing payroll for?

Five. Okay. All right. I'm going to investigate the possibility outsourcing the payroll process. Okay. With a payroll company. At five people, it may not make sense. When you get to 50, it always makes sense.

Because, you know, it requires a certain. amount of time to actually process the check or a direct deposit. No one does check anymore, but the direct deposit, and the withholding, which is the 941 forms, 941 forms have to be filled out with the IRS. And, I mean, you can have an accounting firm locally help you with that, or you can have a payroll company help you with that. But again, I'm not positive. It's going to make sense financially to hire a payroll company to do it for five people. But, it's a pain in the butt. So outsource it.

I mean, all the paperwork, it's just awful. And so, you know, get people that like doing that kind of crap and, you know, it'll move you in that direction. So, yeah, go to Ramsey Solutions.com and click on tax ELP and talk with a tax professional. And they probably do bookkeeping and maybe help with small businesses. And they may be able to give you some direction, too, on that. and just do a little bit of research on a couple of payroll companies in your area, and they'll help you make that.

But you don't have to do anything really super complicated to make that happen. So, guys, that leads us into another idea. Let's talk about this for a minute, unpack it. Okay. You start with, when you start in business, we call you a treadmill operator. A treadmill operator is the person where too much of the business relies on you. Oftentimes it's one, two, three people, something like that. like that. And you've got to level up, you've got to get where the business doesn't rely on you to

show up. And then you move up to Pathfinder, which is pretty much where she is. Okay. At Pathfinder, your team, if you want to level up there, you've got to get the whole team engaged and in a shared direction. But she's got some operational stuff she's doing there at that Pathfinder stage, and that's probably where that business is. And you've got some processes. And you've got some processes to put in place, and you've got to start looking at, oh, it's hard for me to do this. I had to start looking at hiring people to do work that did not create revenue. See, I'm an old sales guy, and so I wanted everyone I hired to make me more than they cost me. Salespeople do that.

They make you more than they cost you, right? people that are producing revenue of some kind make you more than they cost you. If you've got a digital marketer and they're helping you buy keywords and work on your SEO, they're making you more than they're costing you. And those positions are emotionally easy to fill. It's harder to fill a position of a bookkeeper who does your payroll for you. Because that doesn't create any revenue. It just manages the processes in the business.

Now, I say harder. By harder, I mean, it's emotionally harder for a revenue-driven mindset entrepreneur. And so she's not, Trevina is not at the level with five team members to hire someone full-time inside that business to do payroll. But they may have some bookkeeping plus payroll, plus some purchasing, rolling up a whole bunch of finance and accounting functions. into one job, into one job description. And I did do that fairly early because I didn't want to fool with those 941s and all the forms of stuff. They suck. I told you that a minute ago. It's hard. I didn't want to mess with it. It drove me nuts. That kind of stuff does. And because I felt like when I'm working on that, I wasn't working on something that made money. And so I quickly

found a way to delegate that. And then I quickly found a way to bring it in-house. Now, some people are very comfortable outsourcing that kind of thing extensively. I'm going to bring it in-house. And again, what you're doing in the people driver, the six drivers of business, and the people driver, what you'll do oftentimes say at that peak performer level, it's not unusual for, if you've got 10 or 15 people working for you, for each person to have like four jobs. Like, you know, again, this, you know, you've got one person that does all the accounting, bookkeeping, and purchasing and payroll. and so they got several different jobs under the heading of their our bookkeeper or our controller

or whatever it is, your first accounting person, finance person you hire in. It's not unusual at all. Your first HR person is going to be a recruiter. They're going to be an HR person. They're going to be benefits manager. They're going to do a whole bunch of different things. And then what happens is as you grow, you hire someone to take two of the four jobs that's on that other person.

And then you hire some, it's like a, like a cell splitting. Okay. They start with four jobs on one person, and then you've got two jobs on each person, and then we've got four people for four jobs. Once we get enough size and there's enough work to justify that, and it moves you up to that level at that point. And so, yeah, that's where we'll go. And so that's what you're looking for.

You've got to build processes where the business doesn't count on you and then you're moving from treadmill to peak performer. You're moving up through the processes here. And it's going to feel like that cell division thing. And it's okay for somebody to have a whole bunch of jobs because when you started, you were the CEO by yourself, the chief everything officer. This is the Entree Leadership Podcast.

I'm Dave Ramsey, your host. This is the Entree Leadership Podcast. If you're struggling in business, we're here to help. If you've got nightmares about your leadership, situation, we're here to help. If you're winning, we're here to cheer you on. And we'll hear just your brag story. You can just call up and do that if you want. The number's 844-9-44-1070. Yehuda is next in Baltimore. Hey, Yehuda, what's up? Hi, Dave. I'm better than I deserve. How are you? Just the same, sir. How can we help? I've been wanting to say that, like, since I started listening to you.

Thank you. And I just, before I get into my question, I just want to express my men's gratitude to you've definitely changed my life, both you directly and the Ramsey personalities. I'm so grateful. Well, thank you, sir. So I started my first leadership role at the end of November. I have two employees, and one of them has been behind since I started. How do I know if she's underperforming or if it's just the role and the responsibilities are too much? Well, I've gotten this wrong a bunch of times, and I'll probably get it wrong again,

because my first tendency is always to think I've given them too much. And then after they're gone and I've replaced them with a high-capacity person, I'm going, oh, well, they really should have been able to do it. They just didn't have the stuff. And so I tend to blame myself saying I put too much on them as my first knee-jerk reaction. and go, okay, why do we have, why do we have this, you know, these developers can't seem to get this webpage up. What's the problem?

And it's, they're slower than Christmas is the problem. Or, you know, our, you know, our timeline is unrealistic. We're asking people to do something in a time period that just doesn't work. So the truth, the truthful answer to your question is, how do we know which one it is? We don't. You don't. I don't. All we can do is look at it and try to make our best guess.

on it and go, okay, one way you can measure, let me, here's one thing else, I'm making this up as I go, but here's what I really do. I wonder if I can do it. They can't get it done in that period of time, but I can, then that tells you somebody else can. You got the wrong person, right? They're not high capacity, high performance enough. They don't have enough juice, okay? And so whatever it is, if they're that. So like, for instance, a sales position, I've said a million times I'm an old salesman and so okay this guy this gal or this guy you know they're not they can't seem to they can't seem to sell this product and then I jump on the phone and I go like I can sell six something in 20 minutes you're not even on the phone and you

don't know how to talk and your narrative's awful and you're in the wrong position so it's not the product it's not the price it's not the it's the person you know and and so but so one thing I gauge it against is can I do it now some things I'm hiring for it's harder to judge because it's a special discipline that I don't know how to do. Like, for instance, writing code. I've never written a line of code in my life. So I can't really go, oh, well, I could do that. And why the crap can't you?

You know, I can't really apply that principle there. So I have to just gauge it and look. And then I'm going to start asking around, what is the person doing that you think you've overwhelmed? What are they physically doing? I mean, they're a bookkeeper. And the specific challenge here is that, like, the company's behind. So I'm basically having to choose. My approach was, like you said, I would want to do her role and see how long it took me.

But I really can't because I've chosen to prioritize, like, filing, you know, year-end, year-end things. Okay. Her job is to keep the books and she can't keep them up? And they've been behind, yeah. Why? Yeah. There's that much volume in a three-person business coming at one person to keep the books that they can't keep it? It's a much bigger.

It's not just three people. So I have two people who report to me, but that's just the finance team. You know, ops is way bigger. It's actually like I think we have made two, three hundred ops employees. Okay, so what are the items, the bookkeepers obviously keeping accounting books? books, right? So they're trying to do general ledger entries, and they're trying to do payables, and they're trying to do receivables? What are they doing? Yeah, is that, I mean, it should include big reconciliation. So when I came in, like, they were

a few months behind, and I came in, you know, in November, and they were, like, doing August. And the previous year, they were, like, an even worse, you know, they're just behind. And I have to choose to catch them up, you know, with compliance. And so, So I haven't been able to spend the time that I would like to, like, check out her role and, like, see how long it takes me. I've done that for specific things, but I haven't like done a whole role. So what I'm going to do is I need to do a bit of a work study here and say, okay, I've done it to be super complicated, but you need to spend a few hours understanding the actual what this person actually is supposed to be doing. Okay. Right.

and exactly what the elements of that are. And then you can pick up the phone and call someone else in your industry and say, hey, how much volume should a bookkeeper doing if they're doing this? How much volume should they be able to handle? Because we can't seem to get caught up. And I don't know if I've got too much volume for one person or if I've got a slow person. Tell me. And get somebody else around the business or call an accounting firm even and say,

hey, I've got a bookkeeper and this is what I'm asking them to do. But you can't describe yet enough what their daily job entails. from a work study standpoint to be able to get an answer from an outsider. Right. You need to get your hands in this because you're going to lose this person or you guys are going to get your head taken off

by not keeping up with your numbers. So you've got to get this fix. This is on fire. Not having your books up to date is major. That's a problem. And it's been that way a long time, which means there's a lot of chaos around this business. And when you smell chaos like that,

That tells you that's one of the things that's holding you guys back from leveling up to your next stage of business. And so you've got to get processes in place. And that's either going to involve doubling up and on hire here. You're going to have to go to leadership and say, look, we're not going to get caught up and we're going to continue to limp in this place. If we don't get this caught up because we just simply have more volume than one person can do. Or we've got the wrong person and we've got to get a person in here that can actually do twice as much. because I'm amazed that some people can type faster than others. I'm amazed that some people can enter their brains work faster than others on this kind of thing.

And I'm amazed, you know, different people have different capacities. And it could be that if you just kind of help them prioritize, it might streamline it and might speed it up. But because of being overwhelmed also causes paralysis and slows things down, sludge in the machine, right? And so, you know, there's a couple things you need to do as a leader here. you're going to have to step in and your job is to serve your company and this person by getting this mess cleaned up. So I appreciate you asking the question, but you don't have the information yet to answer the question.

Is it the person or is it the workload? Because you can't even describe the workload yet. So you're going to have to get in there and really understand that workload. Take about two minutes and then either streamline this and get the sludge out of the machine by creating a streamlined process and then tell them that this is what we're going to do, and you're going to look over their shoulder until they get it done, even if you don't physically go in there and keep the books, or you're going to leadership and saying,

we've got to add another one, or you're going to leadership and saying we have to change this one out. It's a bum one. This person can't seem to do it at a reasonable speed, so we're constantly behind, and it's not okay that we're constantly behind because it's not okay, dude. That's a problem. So, yeah, the house is on fire here,

and waiting a year and saying, oh, we're still, we've struggled for the last three years. Oh, bull, you need to fix this. Now, you know, like if you're on my team and you come to me with this, I'm going to give you like 30 days to have it completely solved. And I'll help you run some of the blockers if I'm your leader. But I'm going to get, I'm going to put a deadline on you as the head of this area to get this crap fixed. and light a fire under everybody here because not keeping the books is just scary. Really, really, really scary. Hey, guys, that's what this is all about.

It's the nuts and bolts of running a business. It's the leadership aspects of running a business. It's the fears and the victories of running a business. It's called entree leadership, this wonderful, magical combination of entrepreneurship and leadership. When you put them together, man, you get small business. You get the free enterprise system. And we get people like you that are listening. Thank you for joining us, America.

This is the Entree Leadership Podcast.