This is Bloomberg Business Week with Carol Messer and Tim Stenebeck on Bloomberg Radio.
Well, you hear it over and over again from CEOs. The most important asset a business has is its people. So what's the secret to building and maintaining a successful team.
It's a question that our next guest ventures to answer in his latest book. Mike Mcalowitz is an entrepreneur who's founded and sold two companies, OMC Systems and the data forensics firm PG Lewis and Associates. He now owns seven more businesses and he's written seven other books. His latest book is called All In How Great Leaders Build Unstoppable Teams. He joins us on Zoom from New Jersey. Mike, good to have you with us this afternoon. Congratulations on the
new book. Why I'm curious why you've written six other books, seven other books? Excuse me, why is this one your eighth book? Because building the right team seems like one of the most basic things an entrepreneur has to do to get it right.
Carol, Tim is a joy to be with you, so thanks for having me. The reason I wrote this book now is particularly the COVID pandemic. It shifted what was prior desires into expectations. We wanted a flexible work schedule, we wanted the ability to work remotely, but now it's expected, and as leaders, we need to change that in other dynamics.
Well, you know, it's funny. One of the things I've thought top of mind that I wanted to ask you is, what's the first leadership mistake you've made in your life? You've built, sold companies, you've got a bunch more. What was the first big mistake that you made as a leader.
Oh, it's embarrassing, so thanks for starting me off with this, but you're welcome. What I did once when I had my forensics business, we were going to achieve ten million dollars in revenue if we pulled the right strings and made the right moves. I spent a day calculating the numbers. I came out of my office. We were brick and mortar at the time, and there was thirty of my employees there. I called everyone, and together, I truly did play.
I have the tiger in the background for this momentous moment. Yes, and announced we're new ten million dollars of revenue, expecting great fanfare, and there were silence, people slumped back to their desks. My colleague Patty came up to me and said, Mike, if we achieved ten million dollars, you get the bigger house, you get the new car. But why should we care?
Don't you care about our dreams? And that became an epiphany for me is that the vision for a company is inevitably the vision for the leadership team or the leaders, but it's rarely the vision for the colleagues that work there, the employees. So to set that as an expectation is unfair and unreasonable. What we have to know as leaders is what is the individual dreams for our colleagues. I have one colleague who wants to buy a house, another one who wants to learn to play guitar, someone who
wants to spend more time with their family. And once I started understanding their dreams and started prioritizing those visions, then reciprocy kicked in and they prioritized my vision. So we have to work on our goals in concert. It's not just the company's goals, it's everyone's goals.
What would you say to somebody who said that all sounds great in a company that doesn't exist and doesn't make profits Because somebody who you know has a priority or a dream of learning how to play guitar or spending less time working. That isn't a goal that necessarily aligns with you getting to ten million dollars in revenue.
Yeah, and it does sound a little kumbaya, admittedly, but what I found is my job is not to facilitate the guitar lessons. My goal is not to pay for their home. It's just to remind them that dreams important and that their job is a means to achieving that. Now I do some block and tackling, I will be flexible on schedules, But when I prioritize their dreams, I'm
not expecting them to compromise their work effort. In fact, I find that most people double down their work effort because they see that I know their work is not just about caring for the company, It's about caring for their dream. So it really is reciprocity, and that's human nature. When we care for someone else, they inherently will care back for us.
Hey, like, how important is compensation in this equation slash equity in a company that you're building?
So compensation of course is important, but often money is a demotivator, which is kind of surprising. And what I mean by this is if someone feels they're being shortchanged, not paid equitably, they're going to resist that and they're going to be frustrated. I've never found though I can't think one case teim or I've given someone a raise and as a result of the raise, their work performance increased.
Maybe for a week or two, they put a little more effort in, but we go back to this thermostatic homeostasis, we go back to our own standards. What I found is we need to compensate people fairly and appropriately for the work they do competitively, without a question. But the real motivator is are we helping them achieve their own visions? Are they doing something of significance that maybe speaks meaningful or meaningfully to their life, maybe part of their life's mission.
And it made it sound kind of weird. You could have a business that manufactures toilet paper and you know who whom name who wants to associated with that. But maybe some of the employees are concerned about the ecology and the environment and the impact that has there. And if we can correlate what we're doing to be of service to that greater mission. Those are ultimately the greater motivators.
So, Mike, would you be cool like if an employee came in and I'm listening to what you're saying, because I have actually a brother who says this. He's like, I don't live to work, I work to live. He's done very well and he's been like a stellar employer employee throughout his life. But it's kind of interesting he'll say that I don't work to live, I live to work.
Yeah. So I was at a conference once I was presented.
Oh right, no, yeah, not live to work, I work to live.
Right, I know, I understand what you're saying. I was at a conference once and I was presenting there there was a couple hundred folks in the audience. I asked the audience to say, who here is an A player? People who work to work? And every single hand went up. And then I said what percentage of population are A players to the same group, and two percent was shouted out. Five ten percent was the most gracious number. And isn't
this a strange statistical anomaly? Everyone in this room is an A player, yet almost known in the population is how could this be? And what I wanted to reveal there is everyone is an a player in waiting. I believe that everyone has a talent of some sort inside ourselves. It may not be with my business, it may not be in the company that I lead. And when the talent doesn't reside within my company, that I can't help them flourish. It is my responsibility to pointment and direction
that will serve them. At the end of the day, we're all here on a human journey, and yes, we want to have a profitable, healthy business. It's absolutely a priority. But at the same time, we can be of service to people. And sometimes someone may not be sued for our organization, but I will help find them somewhere where they're more suitable. It will have a more joyous, more fulfilling work experience.
If we may go back to also what you were talking about, if you give somebody a raise, it's not like that all of a sudden there were working more are giving more. Having said that, it's an interesting time. We've spent a lot of time talking about the labor market because of a lot of data points that have come in as of late, and it's interesting. Sometimes the dynamics of people saying, well, wait, we're paying workers more, and like it's a bad thing because it's going to
cost companies more. It's going to hurt their margins. And I feel like for a long time, workers who have helped create really wealthy companies have kind of been shortchanged. And so I'm trying to understand the balance of really appreciating your workers, not just paying the minimum or what have you, but really letting them share in the gains of a company financially.
Yeah.
Yeah, I one hundred percent agree. In fact, our own organization here we do profit sharing. Twenty percent of the corporate profits go out on an equal distribution to every employee. What I mean by that is, if you work part time, or you work full time, or your salary is different than someone else's, you're still getting an equal piece of
that high and it can be pretty significant. But I also found that when it comes to conversation and bonuses and the monetary component, we have to realize that there's additionally something that serves satisfaction if you will in their job. Again, we have to offer a competitive salary. We have to care for people, there's no question about that. But there's something more that's often left out, and it's giving people a degree of autonomy, a sense of control, the ability
to personalize their work. I think the traditional mindset for business was we were matching people's talents to titles, meaning we're putting them in the silo. You are the receptionist or you are the salesperson, and you have to fit in all these roles. But what I found is people are good at specific talents or tasks I should say, but not naturally everything that fulfills a title. So I
think organizations should look at a more dynamic structure. I considered a web like structure as opposed to the traditional pyramid structure of an organizational chart. And we should match
people's talents to tasks. And so now someone that maybe is serving in your sales role and is great at closing the deal right, also can serve a part of the reception component of greeting customers and so forth, And maybe that person was in the reception area can also be helping fulfill some area in the space in the accounting space, because that's where they have talent. I think that's what we need to do in addition to paying competitively.
For sure, interesting all right, hey, Mike, we're going to continue the conversation. We do a little bit of news and come right back to you. Mike mccallowitz is with us his new book, All In, How Great Leaders Build Unstoppable Teams. Will continue in just a moment.
I want to get back to Mike mccallowitz, an entrepreneur who's founded and sold a couple companies. He owns seven more businesses. He's written seven other books. His latest book is called All In, How Great Leaders Build Unstoppable Teams. He joins us once again on Zoom from New Jersey. MIKEL want to ask We're going to ask about some leaders in a minute, but before we get to that, I just want to ask about building a team like you described to us earlier in an environment of hybrid
and remote work. How do you do that?
Well, we have to give that tactile experience whenever we can. We're missing out on that. And they talk about the water cooler's conversations, and what was so important about those was not necessarily ideation or concepts or business ideas that came out of that, but trust came out of that. You and I would talk at the water cooler and share stories and that builds connection. So when people are in a remote environment, we need to bring that about.
Now it's not always possible to bring people in. If you can orderly have a meetup, that's a wonderful thing, but otherwise encourage that social time, actually make that part of the agenda, because without that connection, we won't have the trust. Trust fosters growing a business together, collectively ideating, brainstorming and so forth.
You know, it's interesting you lay out, you know, ideas and you talk about strong leadership and different things that a great leader needs to be doing. Can this apply to all kinds of companies? Mike and I ask that because I think when you run a small business, which we often talk about being the backbone of our economy, you know you're just getting by. So when you think about this, is this for small, mid sized companies, large
capca is it for everybody? Or would you concede that it's going to be a little bit harder if you're running a two or three man operation.
It's different. I don't know if it's harder. I worked with everything from the University of Chicago doing research on this, their Medical Center, which is a larger organization, down to micro enterprises. A laundry mat that had two employees that were just managing the machines and so forth. But we're wearing multiple hats. What happens in larger businesses we can have a more defined role, and in a small business
we need more flexibility. At the end of the day, we want to invoke a concept called psychological ownership, and this works in businesses of the most smallest size, the micro enterprise, to the largest businesses. And psychological ownership is the feeling that we own the business even if we legally don't. So just just a quick riff on this, I own some stock and Ford not a stock tip necessarily, but when I drive buy the Ford factory, I don't feel like I own that factory, at least a part
of it. I don't point to the bricks on the wall and say their mine. Conversely, I own a car and I treat that like it's my quote unquote baby. Now, the funny thing is I don't legally own it. The bank does. I'm making installments. And when it comes to our employees, we can invoke that sense of ownership without necessarily having a legal ownership. And how you do it is you give people, Autonomy, the ability to give direction and control over the outcome of the roles. So instead
of micromanaging, we need to move to outcome management. Where do we want to go? And encourage our colleague to help navigate the path there. Yes, we may have best practices, but they can navigate their own path. Also the ability to personalize it, make it their own. And lastly, gain intimate knowledge about what they're doing. If we can facilitate the three elements, they will excel in big or small companies.
All right, So we're listening to what you're saying. We were thinking you must have some thoughts on you know, good leaders, good companies. We're gonna throw some names at you. Elon Musk good leader.
Maybe maybe not my type of leader, but you know, getting results. So there's the statistical measurements and the data doesn't lie. But there's also the humanness and all my research points too. You want to be a you want to be a human to lead humans, and the more humanness you bring to the table, the better the long term impact.
What about someone like Read Hastings, who is the founder and co CEO now of Netflix. Netflix is known for having a very strange culture. I think for a lot of outsiders, Read Hastings has talked a lot about treating employees like they're on an elite professional sports team and then cutting those employees every season who don't actually make the cut. Yeah, what do you think of that?
Yeah, well it does sound ruthless, But I do want to share that cutting does not mean destroying. I think when we hear that someone gets cut, that we've cut off their opportunity. But sometimes someone does not fit even my little company here, I won't have twenty employees my current organization, and we at least recently let someone go. They weren't performing well as organization, but her dream was to be a firefighter, and so we moveles on and
we helped her pursue that. One year later, she's performing extremely well in her new role as a firefighter in Georgia, and she even came back to our office during one of our retreats on our own dime to help us out. So I can't speak to Read Hasting's nature of why he's terminating people. I don't know necessarily if it's as ruthless as we see. Sometimes letting someone go is the best thing you can do for them to find what they really are called to do. Yeah.
No, I think that's a really really smart point and something very thoughtful that sometimes you got to just let somebody go. Having said that, I'm not going to ask you to say like, dislike, but sorry. When we look at the political life landscape, and one of the things that is definitely on global investors' minds is what happens
in our November political race. So when you think about what are likely to be a race or what is likely to be a race once again between Joe Biden and Donald Trump, what are some thoughtful things about each of them, maybe as leaders that you think might be helpful to our audience or just the audience at large. And just got about a minute or so left hair a minute.
Yeah, there's great influence out of concise, clear statements and goals. So the leader who speaks clearly, even though it may not speak to the desires of everyone, the clearer the presenter, the clear the speaker, usually the more we trust them. Ironically, I think the leader who also shows a humbleness has an advantage to show that they aren't perfect. So this perception of being pristine and we get nothing wrong. Ultimately people say there's something hidden behind that, and we become
we question that individual. So there's this balance, and I think those leaders could represent not collectively, but independently parts of that. This curt concise way to present, but also another one maybe shows a humbleness or a humanness that's very appealing. The person who packages the combo wins.
And I would just to build on that. Because your book is about great leaders building unstoppable teams, I think it's fair to extrapolate off of what you just said that to also look at candidates and their teams around them to kind of get an idea of what an administration would look like or leadership would like. That just ten to fifteen seconds. I hope I'm not putting words in your mouth.
You're not, and that's absolutely right. The people that stay engaged with a leader are representative of that leader. So look at who the long term followers are, and there's a good way to judge what that leader's character is all about.
Mike, this was a lot of fun. Thank you so much, really appreciate it. Mike mccalowitz joining us here, as we said, has sold companies, still owns a bunch and runs a bunch of businesses, his new book out All in, How Great Leaders Build Unstoppable Teams. Joining us on Zoom in New Jersey,