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Good morning,

Last week, a group of our clients flew into Nashville and we spent a day training on TEAM, compensation, and organizational “operating systems.”

Sexy stuff.

By the way — if you would like a small sampling of the training (we recorded it), and if you are in the stage of business where you have a team (or need a team, soon)… we will send you a 20-minute snippet.

Hit reply to this email or comment below and a team member will reach out with a link (easy).

Here are some notes & takeaways.

  • Marketing department is responsible for acquisition & reputation. The two factors balance out one another.
  • Sales department is responsible to steward the relationship from prospect (or customer) to client-for-life. Taking the wrong clients removes the “for life” part, which is the main target.
  • Operations department is responsible for humans (quality of humans on team, proper role/fit, and compensation metrics) & systems. Everything that can have a system should have a system.
  • Finance department is necessary but nobody really likes it. Their job is to protect the financial health and wellbeing of the business. Don’t mix operations & finance because finance people tend to operate from fear/worst case scenario. You don’t want this impacting client services or hiring.

On Compensation

There are two costs associated with TEAM:

  1. The cost of compensation
  2. The cost of competence

Low competence is far more expensive than the cost of compensation. It is almost always better to get the best (or second best) and pay them for their competence.

In the training recording, we talk about how to do this without increasing your fixed burn/expense ratio. It IS, with the right framework, possible and plausible to get the best talent without risking your financial position to do so.

We’re going to send the whole thing out to our Consulting Memo subscribers next month as well — so you can either comment below to get a snippet, or you can subscribe here to get the whole thing.

A few more thoughts:

  • People see what they are incentivized to see (don’t remove negative feedback loops from the organization)
  • Team members need to feel “safety” mixed with upside that can only be accessed if earned (in other words, don’t hurt them by giving them $20,000 in fixed pay… they’ll be worried about how to live — but don’t come out the gate at top of the market, either)
  • Bonus structures should be tied to GOALS & targets (not just profits)
  • Profit sharing is an inferior form of compensation (and it is very easy to be abused — most of the investments that build long term organizational health will EAT INTO profits)
  • Replace what you do first, then teach people how you think (outsourcing decisions is more productive and profitable than outsourcing labor)

Can’t wait for you to see this training.

And hope your week is going well!

I’ll see you in November,


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