CHAPTER EIGHTEEN:

Getting the right people on your bus is 90 percent of the business. You have people who want to grow. They want to make a career for themselves. They want to make money. They want to run a business. They want experience. Providing growth opportunities for exceptional people is fundamentally my business strategy.

Your growth as a company is limited only by the number of great people (“A” players) in the right positions. Jim Collins, in Good to Great, says that truly great companies focus on “First who, then what.” He says you must start by getting great people and then decide where they will take the company.

It is hard to hire the right people, and it takes a long time. The only thing more costly in the long run is not hiring the right people. Hiring the right people allows you to move on to tomorrow’s opportunities without having to micromanage yesterday’s problems.

If you hire people with the potential to grow and hire other great people, you’ve unfettered your potential for growth. The biggest mistake most leaders make is not hiring people who will challenge them. If you don’t find the right person at first, keep looking or try another recruiting firm. Don’t settle.

Here are some questions to ask about yourself and anyone you are considering bringing onto your team:

• How long into the future can you work and plan without any guidance? The best leaders have the longest time span.
• How long into the future can you hold your vision while simultaneously acting on short-term steps that will get you there?
• What is your span of control? The highest-level leader can keep a maximum number of complex parallel and conditional initiatives operating simultaneously and integrating each as necessary.
• What caliber of people do you hire? Are you afraid of hiring people who can replace you?
• What is your level of emotional fortitude in making decisions? Do you react emotionally in times of stress, or do you react analytically?
• How close to reality are you? Do you face the brutal facts, regardless of consequences, or play politics?
• What is your level of self-awareness? Do you accept critical feedback as a gift to make you better, or are you defensive anddo not listen to the feedback?

Even when you do everything possible to hire the right person, sometimes they will turn out to be the wrong person. As soon as you know someone can’t thrive in a position, let them go or move them to another place on the bus.

Ask yourself: Would I hire this person again? If you wouldn’t hire them again, they should not be on the team.

You are what you tolerate. If you tolerate people who don’t fit your values, your values don’t matter. If you keep people who are mediocre, excellence doesn’t matter. Think about the times you’ve had to let people go. How many times have you said, “I should have done it sooner?” Almost never do people say, “I really should have waited to let that person go.”

The biggest obstacle to adding “A” talent and removing “C” talent is that it takes hard work and persistence in the short run. However, if you get it
right, your job is a lot easier in the long run. You now have time to tackle new opportunities. The most common way to stop growing is to stop hiring “A” talent and people who challenge you.

Ask yourself, “Would you hire this person again?” If not, move them off the bus or to a different spot on the bus. Also ask yourself, “If they quit and came back a week later, saying they had made a mistake, would you emphatically rehire them?”

Once you’ve decided you have the wrong person, no one benefits from delaying action. The employee in question is under great stress and will become a negative, toxic influence on the culture.

Management is a fallacy. Most management activity justifies the existence of management instead of focusing on results. That is why, in the aggregate, small businesses grow faster, are more profitable and create more jobs than larger ones.

At the core of the fallacy of modern organization management—in business, government, the nonprofit sector and even the family unit—is a lack of trust. The theory of leadership common in most organizations today is that followers must be told what to do. This theory of leadership is expressly based on a lack of trust and a lack of confidence in the followers. That lack of confidence and lack of trust will become a self-fulfilling prophecy.

People will either rise to your level of expectation or fall to your level of disregard. If you expect those whom you lead to be independent, they will
be independent. If you expect them to be dependent and disregard their talents, most will comply and become dependent.

I’ve made this mistake numerous times by assuming that someone on our team is not capable of making the next big step in their career development. When
some of these people were turned over to another leader in our organization who had a more open mind regarding their potential for growth, they thrived.

In organizations without such enlightened management that gives people opportunities to become independent leaders in their own right,
layers of hierarchical control develop to accommodate for the fact that no one feels comfortable making a decision.

If your child is empowered to make their own decisions early in life, your job as a parent will be a lot easier. The same is true in any organization.

In big corporations, over-management is a much bigger leadership problem than under-management. This is why, in aggregate, small
businesses soundly outperform large ones. Likewise, “over-parenting” is a much bigger problem in families today than “under -parenting.” Kids are raised to be dependent and obedient.

This doesn’t mean you abdicate. Empowerment requires very clear accountability and authority. What you will deliver as a leader each year is the most important conversation you will have with your team—the “Accountability Conversation.” This is not an easy conversation, especially if the person is afraid of failure or afraid of commitment. Once this conversation is done, step back and allow people the freedom to achieve.

This “federation of independent businesses” has been at the core of the Global Growth operating philosophy since day one. We kept adding businesses to our group and gave them a wide latitude to perform. The worst move you can make when you are growing is to layer-on top management hierarchy that adds self-justifying overhead.

In the past, when I was more hands-on with the business units, I would tell people, “If things are going well, and you are on-plan and building your business for the long term, you won’t hear much from HQ unless you ask for help. No news is good news. Meanwhile, if I show up at your office and tell you I’m your new co-pilot, this is not a good sign.”

These have been the foundations of running a federation of associated
businesses, and they apply to leading an organization of any size.
Don’t force leaders to become “part of a big company.” Ego and empire-building, which in the end is seeking glory, are always trumped by the fundamental truth that answers are found on the front lines—with customers and those who serve them—not at HQ. The leader in the room is the person closest to reality, and reality starts with the customers and the market in which you operate.

The right role for any centralized leadership function, from family to business, is sharing knowledge and values. When values are clear, and knowledge flows freely, behaviors don’t need to be controlled. They are prescribed by shared values and shared knowledge. This approach avoids the demotivating effects on the human psyche of not being trusted and being told what to do. Children want to be trusted and everyone on your team wants to be trusted.

After the end of World War II, new governments in many Western democracies were formed, with rules and regulations that were simple and
straightforward for everyone to understand. As successive governments passed more and more regulations, these rules have become ever more
complex and indecipherable. The message of the millions of pages of laws and regulations that entrepreneurs must navigate is simple: the
government is going to tell you what to do and how to do it.

This “movie” always ends in the collapse of the Leviathan under its own weight. People simply stop taking the initiative because of their learned helplessness and constant reminders from the Leviathan that they are unworthy of making their own decisions. It is similar to a child who was raised by a domineering parent and was told constantly they were not permitted to make decisions. This child will ultimately give up. The Leviathan, through all of its rules, regulations and “programs,” is saying it owns the problems. And, if you own someone else’s problem, they can’t own it.

Instead of a complex set of rules and regulations, what works is a simple set of values and shared best practices. Western democracies all start off with this simple set of core values. Successful families and businesses do the same.

“If you try to change it, you will ruin it. Try to hold it, and you will lose it,” Lao Tzu notes. His advice is relevant for any relationship you have in life—your friends, your family, your lovers, your co-workers and your employees. The tighter you hang on to something, the more likely you are to lose it. Global Growth has done a lot of acquisitions, and one of the most important reasons we are successful is that we work very hard to preserve and enhance the original essence of the business we acquired. Often, this starts with keeping the business and its brands intact and not attempting to integrate the company.

What works instead is a simple set of shared values and expectations:

• You must achieve your earnings targets.
• You must have a coach and be on a continuous path of self improvement.
• You must build your business for the long term.
• You must be growing faster than your market.

Global Growth’s “federation of associated businesses” model will always beat the “central planning” model of many large companies.

Good leaders need coaches, not bosses. The more you can empower your leaders to do their best without interference from a boss, the better they will do. The more you can empower anyone in your life to do their best without your interference, the better they will do. People almost always rise to your level of expectation. Ownership thinking and empowerment generates leaders at all levels: salesperson as leader, telemarketer as leader, customer service rep as leader. You might think this would lead to too many bosses and not enough workers—but the opposite happens. You have a team of independent, confident, scrappy workers who are determined to deliver their best and know it is their responsibility to do that. And that is the attitude you want everyone on your team to have.

At every stage of the development of the Global Growth group of
companies, we faced the same challenge: Control or let go. Early on, I edited every single newsletter issue that went out and every single
marketing piece. I learned to let go and trust that the people I hired would produce high-quality content.

At one point, we were running diverse companies under one
management structure. We could build a more complex management
structure, or we could let go. We chose to let go. We brought on
competent CEOs and gave them the reins. Our oversight consisted
of enforcing company policies, compliance reviews and strategic
planning reviews.

Then, we realized we were assessing strategic plans for businesses for which we had never met a single customer; and we were enforcing compliance rules in countries we’d never lived in. We could create more comprehensive strategic review and compliance teams, or we could let go. We let go. We hired competent, entrepreneurial portfolio leaders to drive the strategy for their portfolios and enforce compliance.

It might seem that the lesson here is that strategic reviews and compliance aren’t important. The lesson is just the opposite. They are so critical that they should be tackled by experts, not dilettantes. Each leader must have accountability and authority. Every organization and every person in each organization must understand clearly what they are accountable for delivering, even as they are given flexibility in how to deliver it.

Empowering your staff, children, or other people in your life to be more independent requires that you help them first build confidence. Here is a tangible way to do that:

Have them pick a positive affirmation, such as, “I speak my mind every day, regardless of what people think about me.” Then, repeat it every day. It
becomes a habit, and this habit forms part of your character.

A few suggestions: “I am disciplined, rigorous, relentless, dogged, determined, diligent, precise, fastidious, systematic, methodical, workmanlike, demanding, focused and consistent, accountable and responsible, adaptable, and flexible, and I act with ferocious resolve to achieve my goals.”

The credit for this list of affirmations goes to Jim Collins, who lists them as attributes of the culture of companies who make the leap from good to great. They help me overcome fear every day. I must have recited these affirmations a thousand times before I went into the nine-hour surgery that successfully removed my brain tumor.

As I prepared for a seven-year prison sentence, these affirmations guided me and strengthened my resolve to win my case or die trying.

Create your own positive affirmations today, and help your staff create theirs. Write them down. Recite them daily, out loud, with conviction, confidence, and passion. Visualize yourself acting in this way. Visualization is the most important part.

Three basketball teams were studied over a two-week period: Team #1 was told to practice daily as normal for two hours. Team #2 was told not to practice at all. Team #3 was told to visualize practicing daily for two hours.

The results: Team #3 (the team that practiced mentally) achieved nearly the same improvement in results as Team #1, the team that practiced physically. Team #2 performed substantially worse.

Your action item: Create a clear vision of who you are after you have achieved these positive affirmations. Then, review this vision daily and in detail until you can see your success as clearly as your current reality. Then, the most important step: emotionalize these affirmations in times of great fear so they become part of your reptilian brain, which can only be programmed via emotional input.

I emotionalized these affirmations going into surgery, preparing for prison, and numerous other circumstances for which I would normally be overcome by fear. These affirmations are so far- driven into my reptilian brain that I get teary-eyed just thinking about them. Auto-suggestions as positive affirmations can help you overcome any fear, especially the fear of opinion.

Politics and social climbing have no place in any effective organization. Team members who are wasting time on politics aren’t producing results. Results are the only thing you should value. One effective way to reinforce this culture is through how you run meetings.

At Global Growth, we suggest a meeting code along these lines:

• Face the real issues directly; that is, the elephants in the room that no one wants to talk about.
• Participate. If you are quiet in a meeting, why are you there?
• Praise and criticize publicly.
• Share financial information.
• Bring all issues to the group. No subgroups, private conversations, etc. Ask yourselves, “What are we afraid to talk about?” Then, address those issues.
• Offer analysis. Not just numbers, raw data, or speculation.
• Be inclusive. Ensure the meeting is equally productive for all participants, regardless of location.
• Listen attentively. Don’t hold side conversations, and don’t interrupt.
• Be accountable. When action items are discussed, agree on who will do what and by when.
• Be respectful of the group’s time. Only hold detailed discussions of issues relevant to the group as a whole.
• Be prepared. Have an agenda, send out information beforehand when possible and bring all information necessary for the scheduled discussion.

Susan Scott, author of Fierce Conversations, suggests you ask these questions in your meeting:

1. What has become clear since we last met?
2. What are you trying to make happen in the next three months?
3. What is the most important decision you are facing?
4. What topic are you hoping I won’t bring up?
5. What part of your responsibilities are you avoiding right now?
6. What do you wish you had more time to do?
7. If you were hired to consult with our company, what would you advise?

Use these principles in EVERY conversation you have, especially ones you think are “private.”

The true culture of an organization will show up in what you say when no one is looking or, in my case, when I didn’t know someone was looking. As C.S. Lewis said, “Integrity is doing the right thing when no one is watching.” Not knowing I was being recorded, here is what I said: “We’re gonna do it right, and we’re gonna do it with every single piece of law out there.”

What are you going to say when you think no one is listening? Your freedom may depend on it. Stick to your internal integrity—regardless of the pressure from people who hold power over you.

When I was indicted in 2019, my belief in the value of independent leaders faced the ultimate test: I stepped aside and handed management of my businesses to my “A-player” leadership team. During my absence, my businesses grew both top and bottom line. That is test that I hope you never face, but it reinforced my belief in finding leaders who challenge you and act independently.

—Admiral Jim Stockdale, eight-year Vietnam POW

The leader in the room is the person closest to reality, the person who does not rely on hope as a strategy.

To continuously improve, we must receive continuous feedback on the good, bad and ugly. Managing without feedback is like bowling without seeing the pins.

In Good to Great, Jim Collins refers to the “Stockdale Paradox:” “Never confuse faith that you will prevail in the end with the discipline to confront the most brutal facts of your current reality.”

Humans can survive just about any adversity and turn it into a greater advantage. The first step is getting to the cold, hard truth about the adversity you face. This means I am preparing daily for a lengthy prison sentence. Prepare for the worst, aim for the best.

Twenty years ago, everyone subscribed to print magazines and newsletters. The industry was bullish on print, even as circulation numbers began to fall. Publishers found articles entitled “Why Print Will Never Die” and circulated them among themselves. At every conference, there were feel good presentations about how nothing would ever replace the “weight” of a book or magazine in your hands.

Some publishers faced the fact that print and mail were getting more expensive, while free content was becoming more and more readily available on the web. Some of these publishers started testing workflow products and software. Others came up with creative ways to monetize Web content. Still others began using their content to sell products. Those companies look very different than they did 20 years ago. Some aren’t even recognizable as publishing companies, but they are thriving.

The companies that spent their time telling each other that print would never die have failed. How were the successful companies different? First, they had leaders willing to face realities head-on and who fearlessly tried and failed with many models, knowing that one would prevail in the end.

Second, they had a culture of reality. Winston Churchill personified resolve. He believed England would prevail against Hitler’s war machine against all odds. He knew there were almost insurmountable challenges in their way. He knew his intelligence personnel were discovering new facts about Hitler’s growing munitions factories and troop movements every day. He also knew he had a huge, challenging personality and that few people would be willing to tell him bad news. So, he created the Statistical Office. This ministry existed outside the regular chain of command. Its sole purpose was to feed him unvarnished facts.

You want leaders with big personalities. You want strong, aggressive leaders. However, those traits can also create an environment in which people hesitate to come forward with bad news. That is why you must create a “culture of reality” via which people are encouraged to speak up, no matter what.

Ask yourself, “How often do I get bad news before it shows up in the numbers? Do I get it early enough to act on it instead of reacting to it? How short is the path of information from the customer to my ear? How do I know what customers think about my products?”

Use these strategies to create a climate where brutal facts are shared:

• Make sure all employees are trained on your values.
• Lead with questions, not answers.
• Engage dialogue and debate, not coercion.
• Conduct “autopsies” without blame.
• Build red-flag mechanisms.