The Learning Leader Show With Ryan Hawk - 159: Henry Ward & Josh Merrill - CEO of eShares: How To Hire, Manage, & Lead

Episode Date: September 14, 2016

Episode 159: Henry Ward & Josh Merrill - CEO of eShares: How To Hire, Manage, & Lead Henry Ward is the CEO of eShares. Josh Merrill leads product and Marketing at eShares Hiring Principles: Hiring means we failed to execute and need help Startup employee effectiveness follows a power law False Positives are okay, False Negatives are not Culture is defined by who we hire Hiring Heuristics: Hire for Strength vs Lack of Weakness Hire for Trajectory vs Experience Hire Doers vs Tellers Hire Learners vs Experts Hire Different vs Similar Always pass on ego Episode 159: Henry Ward & Josh Merrill - CEO of eShares: How To Hire, Manage, & Lead Subscribe on iTunes  or Stitcher Radio The Learning Leader Show "The success of a company is the sum of the people in it." In This Episode, You Will Learn: Patience, long term thinking, and understanding that your success will be determined by the people you surround yourself with will lead to sustained excellence Product focused and understanding "The Artist's Dilemma" The best produce it for themselves How eShares was created Why their partnership works so well What Josh feels Henry doesn't do well (Interesting moment!) Why don't more companies publicly share what they believe in? eShares hiring process Why you shouldn't hire someone because they are a "culture fit" Why you shouldn't have performance plans -- Once you've deemed the person is not working, then fire them immediately Hiring for trajectory vs. experience How it's similar to the LA Rams drafting Jared Goff with their #1 pick... Being patient to develop him How should you grade employees? Don't... Teach them to grade themselves. Don't give people a number grade -- "How am I doing?" "You're doing a 2." How to fire someone: Give sincere explanation for why Don't make it one-sided Help them with what's next Be intrigued about what you do -- "eShares is a learning experience for me. I'm doing things I've never done before" "False positives are okay. False negatives are not." Continue Learning: Read his Henry's posts on Medium: medium.com/@henrysward To Follow Henry on Twitter: @henrysward To Follow Josh on Twitter: @josh_io To Follow Me on Twitter: @RyanHawk12 You may also like these episodes: Episode 078: Kat Cole – From Hooters Waitress To President of Cinnabon Episode 071: Nate Boyer - Green Beret, Texas Football, The NFL Episode 047: David Marquet - "Turn The Ship Around" Episode 107: Simon Sinek – Leadership: It Starts With Why Did you enjoy the podcast? If you enjoyed hearing Henry Ward and Josh Merrill on the show, please don't hesitate to send me a note on Twitter or email me. Episode edited by the great J Scott Donnell The Learning Leader Show is supported by Daor Design - Daor Design will help you build your brand like nobody's business. Most of their work falls into one of four categories: Logo Design, Print Design, Web Design or Digital Marketing. They pride themselves in being a trusted, valued resource for their growing family of clients.

I, you know, was intrigued me about what you do and your podcast in general is, you know, we talk a lot here about the journey versus the destination. And, you know, it goes back again, going full circle around patients. And I think most companies and most managers, like, they feel like they're graded on the output. Where here, we really feel like we're graded on the progress. And to me, progress is about learning. Progress only happens when you sort of get better at what you do. do and a big part of getting better at what you do in a knowledge business is to acquire more knowledge. Are leaders born or are they made? Our host, Ryan Hawk, believes that leaders can be made

through determined, focused work on learning the art and science behind the makeup of other successful leaders. Now it's time to inhale knowledge and exhale success. You're listening to The Learning Leader Show with Ryan Hawk. Hey, and welcome to the Learning Leader Show. I am Ryan Hawk. Thank you so much for being here. I love trying new things on this show, and it was cool to have two featured leaders tonight. It's Henry Ward and Josh Merrill. Henry is the CEO of eSharets,

and Josh runs product and marketing for Henry. I found these guys based on the work they put out on Medium.com. A few of the topics they write about. A manager's FAQ, a better offer letter, and how to hire. If you are in any type of leadership role, whether it's a small business or a big one, I will guarantee the work these guys put out for all to read will help you. A few of the topics we got into. Why you should hire for trajectory and not experience.

Why false positives are okay, but false negatives are not. We went much deeper there. Fascinating. Then how to know if you're a good manager, it's defined. And why you should not grade your employees. this and so much more on this great conversation with Henry Ward and Josh Merrill. Really excited for this episode of The Learning Leader Show. We got something new that we have not done before, and it's been 150, 160 plus episodes.

And joining me, the CEO of eShares is Henry Ward, as well as the leader of product and marketing, Josh Merrill. So Henry and Josh, welcome to the show. All right. Thank you. I'm excited to get to bounce some ideas. and thoughts off both of you guys. This is, like I mentioned, a little bit different for me

because usually it's just a one-on-one conversation, so I think this could add another really interesting element to it. And my question for both you guys, and I'm guessing you might have different perspectives based on your careers and your histories leading up to this point. And that is if you had to identify the common characteristics or themes

amongst leaders who have sustained excellence over an extended period of time, what are some of the themes that you have seen in those people? I guess I can go first. You know, I think two themes come to mind for me. So the first one is patience. You know, when I think about, you know, the CEOs that I admire, you know, now and historically

and the kind of CEO I'd like to be, they're all very long-term thinking, right? They have a vision of the future and they're very patient and, they're very patient and working towards that. They're up and not in a rush, right? You look at Amazon, you know, they started with books and got into other businesses, including cloud software and so on. And it just, there's just clear patience around how they want the world to look and they're going to spend 40 to 50 years doing it. And so I feel like that's a big part of how we work and how I want us to operate. You know, we often talk about, you know, we want to be the financial institution a hundred years from now.

And it takes a long time to do that. So I think patience is one for me, and the second is a very sort of, the success of a company is the sum of the people that are in it. And that's not taking anything away from, you know, great visionaries like Albert Sloan and Henry Ford and all the great entrepreneurs of the last century that build massive, you know, manufacturing organizations.

But that's just not our business. our business is a people business, our asset is individuals. And so anything that we, anything that we want to do has to be built around, how do we get the right people in the right place to do the right things? Our competitive advantage isn't that we're slightly better at assembling a manufacturing floor. And so when I look at the great entrepreneurs that I admire, it's all ones that have figured out how to get the best people working on the best stuff. Those are my two.

Completely agree, Josh. What about you? Well, you know, my sort of first love is product, and so I tend to think of sort of product-focused CEOs as my heroes. You know, one thing we've kind of talked here at e-sharees is about sort of the artist's dilemma. Like, does the artist produce art for his audience or does he produce it for himself? And when I think about the CEOs, I really admire what they tend to have in common is they produce. They produce the art for themselves. They're willing to do something because they know it's the right thing to do. And as Henry said, they have the patience to let the world catch up with them.

I mean, when I think about, you know, I would say Elon Musk is probably one of my favorite leaders right now. When I think about everything he's done with Tesla and with SpaceX, it's really, really remarkable. But at the same time, you could also say we really haven't seen anything from him yet. It's interesting, Josh, I'm glad you brought that up because the phrase and the term that I think a lot of people have heard is starving artists, meaning these are the sometimes can be the artist who are focused on simply doing what they believe is beautiful and creating art for themselves. But if they're not able to ever generate something that other people either they like or it makes their lives better or they're willing to pay for, then they are. starving artists for life. How do you compartmentalize between, I don't know if that's the right word, but how do you take a view between being a starving artist and making something for yourself, but also

understanding maybe from your point of view, like product market fit, for example, to make sure that, you know, you can make a living and create something that can employ many people and potentially be the place that is there 100 years from now helping people? Yeah, I mean, it's interesting. Like, when I look at somebody like Jeff Bezos, he's incredibly customer focused. He is very determined to deliver something to the customer that they will pay for. At the same time, he is very, very willing to run experiments that for a lot of people kind of come out of left field. So I do think there's a market focus that we can never really let go of.

I might contrast that with, if you look at. somebody like Steve Jobs in the 80s, you know, in 1984 with the McIntosh, that to me would be an example of somebody who was sort of focused on, you know, building this incredible product, but really at the expense of building a business. So let's take it back both, both of you guys, Henry and Josh, when it comes to what you guys do at eShare's. Henry, could you share briefly the story of your initial thought to create e-shares and what exactly you guys do for your customers? Sure.

So the idea really came from this observation that in the public world, I can buy general electric stock for $7. It's all online. I just push a button. The money gets transferred. Everything's easy. But if I were to invest in, or if you're an investor and you were to invest in two founders in a garage. It would take a couple of months. You may or may not get a paper stock certificate in the mail. You cost $15,000 in legal fees and a big pile of paperwork. And you just seem this obvious

sort of disconnect between how the public world and the private world works. And we looked at this problem. And when it became interesting, so it's an obvious problem. When the solution became interesting was when we looked at how they saw this in the public markets and sort of one of the largest companies no one's ever heard of is the depository trust corporation in new york and and they're the master clearinghouse so if i sold if i sell you ryan 100 shares at google this is the database that updates now i sold you 100 shares at google and you know they settle something crazy like a trillion dollars a week or something like that and um and we said what if we build that database but for private assets So anytime a company issues or transfers stock, they do it on our database or our system, and we track that for them.

And the MVP or the beachhead into collecting this data, collecting this information is we'll build a product where companies will come and will make it really easy for them to issue securities in a compliant online way. And so a company will get set up. they'll authorize designated administrators of the company to issue securities on behalf of the company. It'll go through a compliance workflow where the right people have to sign off on a new security issuance. That's new financing, for example, or issuing option grants. When they do sign off on it, the shareholder will get an email with a secure token or they click on this token and the shares are deposited into their e-share's account. and that's what binds the transaction together under one system.

And what happened, there was a very simple problem to solve it. That's really all we do. That's our core competency. What's fun about this business and interesting about solving that very simple problem is it creates a – that atomic transaction allows us – owning that atomic transaction allows us to solve a host of other problems. So if I took all of the – all of the securities that a company is issued and I put it on a web page, It's called a cap table, and it's the capitalization of the company or the liabilities of that company. And it turns out companies will pay money to more efficiently manage that.

So that's one part of our business is our corporate cap table business. On another side of the business, we're effectively the brokerage for the investors. So we have all their securities. We know how much they paid for them. If the company has done new financing, we know what the new price is. We can push that information of them. or effectively the fidelity or e-trade for the private investors. So they can log in and see all that.

And so now we sell investment management software to that side of the marketplace. We're now in the valuations business where we value these assets, both on the company side as well as on the investor's side. So we have a valuations business because most evaluations are basically done on the financials and the capital structure of a company. We're obviously looking forward towards liquidity, which is how do you allow companies to raise more capital? How do you allow investors in those companies to sell their states in those companies?

And so it's one of these fun businesses. It's like the inverse of an onion. Sort of every problem we solve opens up a whole new set of problems we can solve. But anyway, I think it's one of the – I'm sorry, I'm a little long-winded. I think it's a great story because I think one of the things that's often missed in, I think, venture, entrepreneurship in general is this idea. Like I have to have a big idea from the beginning. And I think that it is really not true.

And I, in fact, think that a lot of the best ideas start with a really small idea that you can concentrically build more ideas around. And I think that's that's been our core competency. Thank you, Sharon. I appreciate the background on that. And I have to share the way that I learned of you initially, Henry. and I'm guessing this is how others have too. So, first let me ask, how many employees do you have at e-shares? About 100.

100 now, okay. And it started with just you, correct? Yep. Just you. Okay, when did you start? We incorporated July 2012, so we're about four years old. Wow, okay. And now you have 100 employees.

I found out about you because people were sharing your articles. I guess you could call them, your writings on medium. And they were getting shared all over the place via social media. And I remember just reading through them and being blown away. And so immediately, this is how I normally operate. If I ever read something or watch something and I really like it, my next immediate action is to find a way to get in contact with the person who did it. And so that's what I did.

I reached out and got a hold of you and then you mentioned to me that you and Josh write these together. And so for anyone who hasn't looked them up, I would just Google Henry Ward and either a manager's FAQ, a better offer letter or

how to hire. And so I'd like to focus on a few of those if you guys are cool with that. Specifically, the first one I like to talk about is how to hire the article you guys wrote. Are you good with focusing on that for a minute? Yeah, great. Sure. Okay. So you have hiring principles and just the detail that you go. It's not just the highlights, but it's the detail that you share and the fact that you're so transparent with it.

I have to believe has, before I get into it, actually, how has this helped you guys from a recruiting perspective being this transparent with the CEO's name on the writing, sharing exactly what you believe? that has to have been, I just spoke with the CEO of HubSpot and he talked about the inbound recruiting, how people are constantly flocking to their business. I have to believe the same is going for you guys, but I'd love to hear it. How has this affected your recruiting? It's funny.

So a lot of people look at it as, gosh, you write this stuff and you get a lot of people who are like, oh, God, I want to work for that company. And it's kind of true, but I would say the thing that's probably most effective about that is all the people that are like, I don't want to work for that company. And it's a very quick, I mean, the reason we wrote it in part, you know, is to help our employees go through hiring, but it was also to kind of share how we do things.

You know, if you look at like eShars 101 and some of the other stuff we put out there, if you are a candidate who's considering eShares, you very quickly can decide whether you want to come in and meet us or not. And I think there's a lot of people that don't. I think there's some that do. And so I would say the biggest impact, I'm curious of Josh, because just has a lot of recruiting as well. You know, the biggest impact is not that we don't have this hub spot. Like we just get tons of inbound marketing or inbound interest.

The biggest thing for us is that when we do get interest, our close rate is extremely high. And so we are very hiring efficient because by the time they get to each year, shares like candidates really know what they're getting into they're already bought into the way we do things there's no surprises and they've self-selected themselves into an environment where we think they'd be successful and they think they'd be successful yeah i would say um you know one of the things i love you know there's another post e-shares 101 which is basically the the monthly class that that henry delivers to new hires uh in blog format one of the things i love not having to explain to to candidates is that we start at 8.30 a.m. every day. And that is, I believe that's a huge

self-selecter out. It's such a great example. There are not inbound requests. We're not getting flooded with emails of people going, gosh, I really want to start at 8.30 a.m. You're the only company I can do that with. I was just reading through. You sure is one-on-one before we got started too. The immediate thought is, why don't more companies do this? It's a really good question. they're you know when you kind of look at the the origin of these posts they really have pretty humble beginnings what they tend to how they tend to originate is we just find ourselves saying the same things over and over again internally in meetings you know every every day every week and then they sort of become like a they'll become like a slide deck that will deliver either as

training or in a company presentation and then and then the final iteration is to actually put them into pros. It's a really good question, though, why more companies don't do them. One thing I will say is that they're really hard. It takes, you know, when you look at something like how to hire, the actual post took, gosh, maybe that was four weeks of work. But the ideas behind them just took, really took years. It was sort of years of experimentation and iteration on what our hiring practices were.

And I got to believe, I think just getting it down on paper, it's amazing. I think there are some companies that exist for quite some time that the beliefs, like in detail, like you guys put it out there, they're not written down anywhere. So nobody really knows. So I just found that really interesting. So I'm going to dig into some of them now, especially hiring principles. So if you guys could, well, first, can you explain your process for putting these things? Because Henry, you made a very good point when we spoke on the phone prior to this to say, hey, I want to make sure Josh is with me. And so could you talk about how you guys work together to put these?

Because I think sometimes writing with another person can be a challenge. And so what is your process for making it work so well? Yeah. So, you know, how to hire specifically came out of a talk that I gave last November. and that talk came out of a lot of conversations, largely with Josh, but also just generally with the team, about how do we scale hiring? You know, before it was just me and Josh hiring everybody, and then, you know, other people, you know, we couldn't do every interview. And so other people were getting involved and we ended up having a lot of the same conversations. We have a lot of, you know, people that are new to management, young people who have never hired.

And so a lot of these conversations, I said, well, you know, we've got. I need to, we need to train people. So I put together a sort of a deck, ran it by Josh, you know, for help on, you know, what we should talk about. That turned into a presentation, which then we said, we should probably document this. So, so I started sort of skeletoning out my notes into medium, pass it over to Josh, who helped, you know, help fix sections, add sections, remove sections, until we sort of felt like it, it had, it had, it, it had, said what we wanted it to say and then we just hit the button it's not the process

is I think there's sort of this view like we're definitely not writers you know there's this view like we have a system for doing this and it's very much hey I got some free time should we try to write some of the stuff down and hope something good comes out so when it comes to one of the principles number three is false positives are okay

false negatives are not can you expand on that Yeah, that came from the early engineering hiring where there was this incredible fear that we would hire a bad engineer. And we were just rejecting everybody. And it was really one of these things like the cost of not having someone to help versus the cost that we got someone in who couldn't help. It just seemed that we were way over-competiting on one side of that. And so we started taking more risks on the hiring engineering front. And what we very quickly learned is we got lucky. You know, history could have changed completely if we had not gotten lucky,

and the first three engineers we hired were terrible. And we were right that they were terrible. But it turned out that we didn't think they'd be good, and they were amazing. and we just really realized we're really bad at this hiring thing that there's probably a lot of people we rejected that we shouldn't have and it completely changed our paradigm or thinking around this. The example you used too is Facebook passing on.

Is his last name, Brian Acton? Is that how you pronounce it? The co-founder of WhatsApp and he actually, and I remember reading the story in another article, interviewed to work at Facebook, and they declined, and he then went on to go co-found WhatsApp, and then it ended up costing Facebook $8 billion in a board seat to eventually get Brian to work for them.

A really, I think, meaningful example to share when it comes to the fact that it's not okay. Like false negatives, you've got to be right there. It's okay to have false positives. I thought that was a really fascinating example. Also, when it comes to culture, because this is a hot topic, I think, whether it's big companies, small companies, startups, everything in between. And people say, this person, I'm not talking about your writing,

but you hear this a lot, this person, they need to be a cultural fit. They got a fit with our culture. And whether you study your writing at e-shares or maybe somebody like Adam Grant, who says that stop hiring on cultural fit, that's a great way to breed group think and why you should not do it. I found it interesting that that's one of your principles too

is your culture is not defined by what it is. It's defined by who you decide to hire. Yeah, I mean, there's another section of the post later on which is sort of similar versus different. And some of the, I mean, I could not imagine our culture today without some of the people who we've hired who we did not necessarily think were culture fits at all. So again, why do you think this hire for culture fit is such a, and maybe this is more in bigger

companies. I don't know. I'm not, I'm not sure that that's a problem where you, whether you talk with an HR professional or a CEO, sometimes they'll say, like, we've got to make sure their culture fits. Why do you, why is there a disconnect there when we've seen the, the research suggest that the best companies don't do it that way. But the majority of them do. Why do you think it is? Yeah, I think historically, getting people that fit the culture and had high alignments with the vision of the executives was actually a really good thing.

You know, Bill to Last, and I mean, the Bill to Last has gotten a lot of criticism recently, but I thought it was a brilliant book when I read it in 2000. And I still think, you know, in its day, it was a brilliant book. And the idea that someone even looked at culture at that time as a competitive advantage for a company, I thought was really important. I thought it was, you know, a game-changing book for its era. The problem, I think two things happen out of that. So one is the idea of work and the leverage that individuals have, particularly in technology, I think has changed the equation around what does culture fit mean.

So if you're building a, if you're creating a factory and you want people to come work at this factory, getting difference is not necessarily better. Like you actually want an archetype of a great factory worker and then multiply that a hundred times. And so the idea that we actually want people that fit the culture or what we want to do and the work that we do and do it again and again, like culture fit actually makes a ton of sense. If you were, you know, on the other side of the spectrum, you were recruiting a group of artists, let's say, to create a huge mural, right?

It actually helps to have people from different areas. Like you actually don't want 100 artists, identical artists. And so the idea that different culture or bringing in culture contributors rather than fitters makes a ton of sense. And I think certainly in our world, and this goes back to my first point, comments about sort of people first, like the success of the organization is dependent on the

success of the individual at e-share is that if you believe that, you have to find people that will be very successful in different ways. And so that means you need to expand culture rather than contract it. That doesn't mean contracting is bad. I think it's gotten a little bit of a negative vibe here. But there's a, you know, if you are recruiting for the Navy SEALs, you want culture fits, right? But if you're if you're doing creative work like we are, you want people who are different. Another, I think, frustrating topic for some people, maybe some that I mentor who are a little bit earlier in their careers, but I think they have immense potential is the fact that you guys say you hire for trajectory versus experience.

And the frustration amongst people who are less experienced, obviously, is that that tends to be the primary feedback they receive when they don't get a potential big job that they go for. And sometimes it's cop out and it's used by the hiring manager because it's just easy. And sometimes it's real. They just, they say, oh, I just, I don't feel comfortable because they haven't done this before. How do you get that right? I know the tell is, you know, they get, the candidate is getting excited about what they could do rather than what they've done. But how can you, how, what do you do to best ensure that you're getting it right when you hire somebody with little experience but potential for a high trajectory?

It is very, very difficult. And that's sort of the basis of the false positives, false negatives. When we look at the people who we hired who came to eShare's and just exploded, there was nothing, typically, there was nothing or very little in the interview process that tipped us off that that was going to happen. I would say that it's much more function, it's much less the function of trying to predict who's going to be that 20x hire and much more function of making sure that when we do get somebody in, we're doing everything we can to support them to be successful and in cases where that's not possible to sort of let them go humanely.

So if somebody's listening who's in a hiring position and they're making important hires, I get a sense, do you go with your gut feeling? I mean, I want somebody to walk away from this episode. And Henry and Josh, I know both prior to us talking, you said, please find any way possible to challenge us. And so for me, I would say this could be a moment in the conversation where I'm thinking, well, I need something more because that just feels like do you go with your gut?

What's something practical that someone that's an interviewer could implement right now after they get? get done listening to this episode that could give them a better chance to hire for somebody with high trajectory verse experience. Yeah, it's a tough one. So I think there are a couple things. One is very practically, you're probably going to get it wrong. So like throw that out there.

Two, you have to be very quick at removing people, not just letting them go, but putting them in new roles, give them the top. feedback, all of those kinds of things. So that's two. And then three is it's effectively you're kind of, you're pulling in people you think might have good trajectory. You give people benefit the doubt. And then most importantly, I think this is what often gets missed, is you have to really

double down, triple down on the people that are making it work. And I think that's what a lot of managers miss out on, right? They find someone who's really good. Like, if you find someone who's really good, you know, early on, like throw more at them, you know, put all your chips in on this person. You know, I'll use the analogy, the sort of sports metaphor again. You know, yeah, they do the NFL draft and all this kind of stuff, but, you know, it's training camp, right? They bring tons of people that want to play professional football in their training camp, and they watch them,

and they pick the ones that are best, and they double down on them, and they train them, and they nurture them, and they put them on the field. And I think that model is more our style, where we want to give people as much opportunity, as we can and we're really we may not you know we don't think we're the best that predicting that this person's going to be fantastic but but boy we can watch somebody play on the fields and pretty quickly know that they're great and we should put them on the field more it reminded me i don't know i just watched an episode of the show hard knocks on hboh i don't know if you guys watch that show have you seen it by chance so they're they just draft

a jared gerard golf the the number one overall pick in the draft and it's interesting to see the way that they handle him from a coaching perspective. It sounds similar to what you're saying in your analogy and the fact that there are extra sessions with him with multiple coaches. They're very patient with him. You can tell they're getting him the reps that he needs, but they're not forcing him to be the starting quarterback

to start the year. But to see the way even the offensive coordinator, the quarterback coach, the head coach approach him. I'm not going to say they do it with kid gloves, but they are very attuned to what's going on. They want to make sure that they're doing everything within their power to protect that investment and hopefully help him put them in a position to learn and to grow into the role that they drafted him for,

which is to be the franchise quarterback of the team. I just watched an episode prior to us recording in your analogy. Made me think of it. I thought it was interesting. And so it sounds like that applies to you guys when you make a hire at e-shares. Yeah, it's a great analogy. I would say that they're developing, you know, they're

developing their player. And I think in the business world, understandably, right, oftentimes you hire somebody, you see their resume, but you didn't get to watch videotapes of them playing in high school for four years. But largely when you look at sports teams, they don't

optimize on the selection process. You know, they invite as many people as they want to training camp. They optimize on, once I see them, who can I work with and who can I develop? And I think for us, you know, what Josh and I do every day, and I would say that the thing that we have to be best at is developing our players. And that's really, I think, missing from a lot of the hiring discussion is, hey, how do we

just get the right person as opposed to how do we get people in and develop them? And again, it goes back to my first comment about patience. Your story of this player is a fantastic one, right? They are clearly being very patient with them, right? They're taking their time and developing him at the rate that he needs to develop that. Where I think a lot of managers are like, I hired this person to solve this problem and they're not saw him as problem. And I made a bad hire. And I think taking the long, playing the long game and developing your players and seeing who develops the fastest and the best.

That's our strategy at least. Not to bounce around, but there's so much, so many, I'm not going to get to everything. but the manager's FAQ, again, must read one of the best articles on leading and managing and coaching that I've ever read, seriously. So I commend you guys for putting it out there, and there are a few parts of it that I'd like to pull out. Specifically, at most companies, employees get some type of a grade, whether it's a number in a lot of places, where they're like you're a certain number, and that means that you're doing a, fine job or that means you're doing a great job or that means you're doing a below average job. And when you talk about from a manager's FAQ, you talk about how should I grade employees

and your responses don't teach them to self-evaluate. Tell me how you came up with that. Yeah, I mean, it's it kind of comes, comes down to this idea that when an employee is is doing a great job or whether they're underperforming, they will, they will recognize that. long before their manager will. And in the greatest, in the best discussions that I have with people here, it's them coming to me and saying, you know, I really don't feel the last couple weeks that I've been doing my best. Otherwise, there's a very different discussion that has to be had

when it's going the other way of whether they agree with you or not, whether they share your opinion. Yeah, it's really funny. you can give an employee, like, you know, employee asks, hey, how, like, Josh, it'd be really funny. Josh, hey, Henry, how do you think I'm doing? Josh, you're doing a two, right? Like, the guy runs, you know, half the company, right? Like, what does that have been mean?

What can he do with that piece of information? So it means absolutely nothing. Well, so it means actually, it means nothing helpful. And then what happens is, you know, I go, okay, Josh, you're a two. and then I tell our head of engineering, hey, you're a 1.8 and in this scale,

let's say 1.8 is better. You know, you're a 1.8. Josh is upset that he's at 2 when the other guy's at 1.8 and nobody cares. You run into the you know, the Harvard, Larry Sundar's comment, right?

The arguments were so high because the stakes were so small. Suddenly, like, and I see it all the time in big company. with my friends. I had a friend. He got a huge bonus, but it was like a $50,000 annual bonus.

He got this huge bonus. And he couldn't, you know, we're going out for dinner and he couldn't enjoy it because he was so pissed off. He got a slightly above, or meets expectations as his review as opposed to kick, you know, awesome, right? And I was like, dude, you got a $50,000 bonus.

Who cares that you got a two on a three-point scale? But that's what they focus on. yeah so how do you do that like when it comes to do i mean i just do you have an hr department no very small yeah okay okay so have you guys have either you worked at big companies before yes i i have been ranked and uh so what did let me i'll be curious because uh this is not it's not necessarily how i expect this to go but this is this is really cool so when i was a my very first job i remember when i got done playing football after college I took a, had a notebook.

And in that notebook, I said, you know, I want to be in a leadership role someday. And I was just an individual contributor at a big company. And I said, so I'm going to write down everything that I really like about my manager. And I'm going to write down everything that I don't. And so when I become a manager, I'm just going to make sure I don't do the things that are stupid that I'm writing down. I'm going to try to do the things that I really like. So I can always say, I remember what it's like to be in that position. Did you guys do something similar when it comes to working at big companies, getting a number?

Because it seems like a lot of what you're writing goes against what is happening at other places. I mean, I definitely was not as diligent as you are. I think you're better at this than I am. But certainly, I mean, the reason I started a company, my last company and this company, was not necessarily because I wanted to be a CEO or anything like that. It was I wanted to build a company that I wished I could have worked for. And, you know, I had this mental checklist of stuff that I always thought was crazy that the world worked this way. And I wanted to do differently.

And I had to build a company to go do it the way I wanted. Josh, what, I'm going to put you on the spot. What, if you had to talk right now, front of uh do you Josh do you report to Henry I assume is that how this this struck okay what is is is what is something that Henry is not good at oh gosh I mean we we talk we talk every day about the things we're not good at um it's hard to even know where to start did not mean to put you on the spot but I just thought of it that this could be a really good question I could give you a much longer list of things I don't

think I'm good at then I And before I could give you a list of. Most really successful people are really good at pointing out what they're not good at. So I don't doubt that both you guys could point out what you believe you're personally not good at because you wouldn't be successful without it. But I'm curious from each other's standpoint. You know, probably the easiest way to do it is to look at what I think I'm good at. And then contrasts that with Henry's ability.

So I'd probably put design on that list. So what do you mean by design? As far as putting together a website, or are you talking something completely different than that? Yeah, so sort of the usability and the aesthetic qualities of our product. You're going to be more blunt. Please, yeah. That's been an area of focus. That's been something that I think I've been able to contribute my talents to.

And in some ways, make sort of compensate for Henry's lack thereof. John's extremely debilmatic. I remember the first time I showed him product and his comment was, well, it works. And that's why this working relationship works. Well, part of how you guys hire and think about it is you hire for your strength. So, Henry, what is something that you believe, what differentiates you as a C. CEO, what are you really great at? You know, I think the thing that I, I think I did two things pretty well.

So one is I'm good at sort of the people stuff, you know, and I, you know, what I write about. Well, I shouldn't say that broadly. I actually say broadly, I'm probably not great at it. But for people that agree with me, I'm really good at people's stuff. What about if they don't agree with you? I kind of self-slected into it. And I think on a business side, I think I'm lucky in that I have a natural intuition for the levers of an organization and how I can push on them. And so I'm very quick at going, wow, that just isn't working.

I need to kind of go over there and sort of figure out what's not working. You know, we have a lot of problems. You know, every company that's like us that's growing quickly has tons of problems. I would say the thing that I, my competitive advantage personally is I'm really good at seeing them and going to addressing them. And I think where I'm weak is that a couple areas, a couple big areas, one is Josh Benson's sort of design and aesthetics and marketing and like communication event, even though like the writing maybe contradicts that in some sense.

I don't think I'm a very good ambassador of our vision necessarily. And so, you know, it works really well that Josh is fantastic, and that's why he runs product and marketing. And then I'm also, you know, really weak on organization. And so I've hired, you know, David and other lieutenants that are just, you know, they can take a spreadsheet and a task list and just grind it out. And they're fantastic at that kind of stuff. So I've been very fortunate to be able to find people.

who allow me to do what I think I do well, and then also kind of come in and fix the stuff I don't do well. And, you know, another part that I love of this. And this is a great part for anyone who is in a leadership slash management role or who wants to be. And you guys asked a question, how do I know if I am a good manager? And it's such a simplistic view, and I love it.

And the answer is employees ask you for your advice. And it made me think so much back to, you know, how often do people come to you as a leader and ask for your advice on multiple topics? And I think some managers at times maybe they get tired because people come to them a lot. But in reality, that shows them that they are a good manager. And people come to them, they value their advice. And obviously the inverse is when your people start going elsewhere. So if you find yourself in a leadership role for anyone listening and notice that your people start going elsewhere to get questions answered, what is happening is the fact that you are probably not a very good manager.

And that might be hard to swallow for people. But I thought that was a very simplistic, but yet such an accurate viewpoint on defining what, is a good manager. Yeah, and it's something that I didn't write or we didn't write and I talked to Josh, maybe we'll have to do a manager as FAQ part two and this would go into it is they will come to you for, if you're a good manager, they'll come to you for advice. But if they come to you to, for you to tell them what to do, you're actually a bad manager. And I'm actually worried that a lot of people are like, well, you know, my employees come

and ask me what they should do next. And so therefore I'm a good manager. And actually, that makes you a bad manager. And it's a subtle but important difference. If employee comes to you to ask you what they should do, it means they don't know what to do, which means you're a bad manager because you didn't explain to them. They don't already know what they should be doing.

And advice is very different. It's subtle but important. You know, advice is the employee knows what to do. They're needing help on how to do it. And I think that nuance is really important. It's a great point. I'm glad you said that. But it's definitely true because your job, I think, as a leader,

is to hopefully empower and create more leaders amongst your team. Absolutely. And if you look at a lot of managers, like, you know, my employees come to me all the time with asking what to do, right? And I'm just so tired of it. And, you know, I'm too good a manager. And in fact, they're not. And I think if you actually cut out all the employees that are asking, you know, what to do or all the questions and really distill it down to employees that ask for advice, it is a very small fraction.

Very, very few managers are lucky enough to have employees that come to them to ask for advice. You know, I think I'm like pretty good at this and I think I do have employees that come to me for advice. but honestly, like it happens once or twice a week maybe out of an employee pool of 100. And I think that's low, right? And I'm constantly thinking, like, how come I don't have more employees coming to me for this? But I actually think it's very rare for managers to have this happen often. And when it does, you've got a phenomenal manager. What about when something goes bad?

And it's time that you've deemed you need to move on and fire somebody. what are both your guys' approach and maybe without naming names you could share an example of what it sounds like when you have to fire somebody yeah it's always difficult you know even as i i don't want to scare people off like i don't haven't done it a ton but but i've done it enough that you'd think i'd be you know better at it and every time it's it i get butterflies, it's nerve, you know, it's nerve-wracking, it's scary. I think there's often this view that, you know, for an employee, like, it's, it's super scary to get fired. I think oftentimes people don't understand. It's also often really uncomfortable for the manager doing it, too. It's a very awkward thing, and even as I've done it, it's still tough and awkward for me.

The thing that helps me do it and do it in a way that I can feel good about the way I'm doing it, to always come back to sort of one of our core principles at e-share is just to be helpful. You know, it's a life-changing event. To be helpful to the employee, it's a life-changing event for this employee, you know, to be a former employee. And anything I can do to help ease the transition is how I should do it. And so if you ask employees after the fact, like what's helpful to them in an exit and termination process, it's largely boiled down to two things. You know, give me a sincere explanation for why so I can understand it and get my own closure around it.

And two, well, I should say three things. A sincere explanation of why. Two, don't make it one-sided, right? Like every story's got two sides and understand and appreciate the challenges that I had and own up to the mistakes that the company made. And then three is help them with what's next. And, you know, short of misconduct stuff, I'm very open about, like, I hope you'll keep in touch. And I know you're going to be looking for work.

I have a large network. I'd be happy to help you. This is what I would say if you put, feel free to use me as a recommendation if you'd like. And this is what I would say if someone called. And I wouldn't lie for them. I would be honest. but I would talk about the things that I thought that person was great at. I would also be fair about the stuff that we didn't think was great.

But I've been fired multiple times. Just getting fired does not mean someone's not good. It just means it wasn't the right fit. So I always go back to how can I help this, you know, now former employee sort of move past this as best they can. Obviously, word gets out when people are terminated and they're going to tell their friends and colleagues, and they're obviously, they probably have friends who potentially might want to work for you someday, and they're going to want to know how you handled the toughest moment of that person's career at E-Share. So I could imagine that.

It's another opportunity, as weird as it sounds as it sounds, it's called an opportunity. Another opportunity to show why you exhibit great leadership amongst a stressful time for both people, certainly. I know we got to just a couple minutes. for both Josh and Henry I'd love for you maybe Joshua first when you heard that you were going to go on a show called the Learning Leader

show and record a podcast what was the first thought in your mind when you heard the phrase learning leader it's a really good question I feel like so just the term Mm-hmm.

E-Share's is a learning experience for me, and I find myself just every day and every week doing things that I've either never done before or frankly didn't even think I could do. So to me, it's, to me, it represents sort of the, I don't know how to describe it, kind of the lifelong experience of learning. I love it.

Love it. What about you, Henry? Yeah, you know, we talk a lot about, you know, one of the reasons I don't, or historically have not done this very often, I tend to sort of tend to feel like CEOs that spend a lot of time on podcasts, like don't they have a real job, you know, kind of thing. But I, you know, was intrigued me about what you do and your podcast in general is, you know, we talk a lot here about the journey versus the destination. And, you know, it goes back again, going full circle around patients. and I think most companies and most managers, like they feel like they're graded on the output, where here we really feel like we're graded on the progress.

And to me, progress is about learning. Progress only happens when you sort of get better at what you do and a big part of getting better at what you do and a knowledge business is to acquire more knowledge. And so I do these management discussion groups and talk about, you know, management and managing and being a better manager is about incremental improvements in practice. So anyway, you know, when I saw your podcast and you reached out, it totally, I connected with it.

I appreciate it, guys. And thank you so much for investing your time. I realize how valuable it is. And so I'm very appreciative of the fact that you've made the choice to come on the show. Where would you send my listeners to learn more about you guys online? If they just go to eshares inc.com or Google just eShares, we'll be right there and check us out. And definitely check out the post on Medium. I mentioned a few of them, but they're all good.

Just search Henry Ward, I guess, on Medium, right? And they'll all pop up, but they are phenomenal. I'll link most of them as well in the show notes on learningleader.com for this episode. But thanks again, guys, for being here. I really appreciate it. I'd love to continue this dialogue as we all progress. Yes. Great.

Thank you, Ryan. Right. Thank you. This episode of The Learning Leader Show is over, but we have plenty more to keep you locked in until next time. Head over to LearningLeadershow.com for more information and to request your favorite entrepreneur, CEO, world-class athlete, or anyone else that inspires you. You can also talk to Ryan directly by reaching out to him on Twitter at Ryan Hawk 12. Thanks again, and we'll see you next time on the Learning Leader Show.