We Tried That Brand Thing. It Didn't Work.

Introduction:

This week, Shawn Busse, Paul Downs, and Jay Goltz talk about the tendency of many businesses to obsess about their logo, their website, and the need to drive more leads. To which Shawn suggests concentrating first on customer experience. And Jay agrees: “It’s better business,” he says, “to make your customers happier than to keep trying to find new customers.” But Paul has his doubts: “You can have your internal house in order, as I do,” he says. “And you can have a great website, as I do. But it’s not driving new business to us at the moment.” Plus: Shawn, Paul, and Jay react to recently publicized strategies to address the labor shortage, such as giving out raises more than once a year and encouraging new employees to take a vacation before they start work.

— Loren Feldman

Guests:

Shawn Busse is co-founder and CEO of Kinesis.

Paul Downs is founder and CEO of Paul Downs Cabinetmakers.

Jay Goltz is founder and CEO of Artists Frame Service.

Producer:

Jess Thoubboron is founder of Blank Word Productions.

Full Episode Transcript:

Loren Feldman:
Welcome, Shawn, Paul, and Jay. For a few reasons that I think we’ll get to quickly, I’d like to talk about branding today. And I want to start with you, Shawn. I know you’ve been thinking about what branding means for small businesses, and what that suggests about how you position your own business, Kinesis. Can you tell us a little about that? What are you thinking?

Shawn Busse:
Yeah, this is sort of sparked a little bit by an earlier conversation we had on the first show I was on with Jay. And I was trying to describe how we work across multiple areas of the business and not just marketing, which has kind of been our history, in terms of brand awareness. So we’ve really been kind of searching for a term to express, “What does it mean when you align your culture and your people and your customer experience, and your market presentation?” It’s a tough idea that maybe doesn’t have just one word. But somebody in our group is really pushing for the idea of owning the idea of brand as an entry point to what we do.

You know, when we wrote Marketing From the Inside Out, there’s a framework in there that kind of starts with the core, which is your mission, your vision, and your values, and then works outwards to your customer experience. And in between is employee engagement, your way of working. And whenever I would talk about that idea to clients or potential clients, I would really end that and say, “That’s not really marketing that I’m talking about. Really, what I’m talking about is brand.”

And I think most people get it. But I’m not sure, because there’s still a lot of folks who hear the word “brand,” and they think logo, or they think website, or they think visual design. So we’ve been thinking about it holistically internally, and that’s how we approach our work. But I’m really curious about the larger market, and if it’s ready for that kind of idea—and if it’s the right way to talk about it.

Loren Feldman:
Paul, in a conversation you and I had just a couple weeks ago, you said that you think your company doesn’t have a brand. How do you react to what Shawn just said?

Paul Downs:
I think it’s entirely misguided. It sounds to me like he’s describing culture. And to the extent that culture is waved as a flag at prospective customers, that could be a brand. But to me a brand is: Does somebody think of you when they think of the thing you do? That’s it. And so we have a great culture, and I don’t think that anybody was like, “Where do I get a custom conference table? Paul Downs!”

I just don’t think that anybody does that. And to the extent that they don’t, I don’t have a brand. Now, we’ve found a different way to connect with clients, which is through Google. But Google doesn’t require you to have a brand. It doesn’t require that we have anything other than the ability to be a good answer to the question, “Who makes conference tables?”

Loren Feldman:
Jay, what do you think?

Jay Goltz:
I have a completely opposite answer, though it’s close. I’m going to argue that, Paul, you have a tremendous brand. You’re talking about brand awareness, which is very different. When you go to your website, your website is first-class. This morning, knowing what we were going to talk about it, I Googled “high-quality, custom conference table.” Boom! You came up first. So you’ve got a great brand, a great story. I love how you’ve got everybody’s picture on there. It’s a lovey-dovey, beautiful website. You’ve got the American flag. I think you have a tremendous brand. But yes, clearly, you don’t have high brand awareness, which is not brand. That’s called marketing.

I think brand is: What do people think of when they think of your company? Period. End of the story. And that means everything: What does your truck look like? What do your invoices look like? What do your business cards look like? What do people look at when they look at your website? It’s how you present yourself out there.

I had a funny experience. I was doing a speech probably 15 years ago to the Appliance Dealer Association, and I had these people in the room. And I started to talk about brand, and these two old guys in the front row—they were like the two old guys in the Muppets, whispering to each other, whispering so loud because they’re old guys—he goes, “We tried that brand thing. It didn’t work.” And so I said, “I heard that.” I said, “You have a brand either way. The question is: Is it the brand you want? But you all have a brand. Some peoples’ brands are, ‘I run a dumpy-looking store.’ That’s your brand. Everybody has a brand.” They do. The question is: Is it a good brand?

Paul Downs:
I don’t know. I mean, that sounds more to me like culture.

Jay Goltz:
No, culture is a whole different thing.

Paul Downs:
The reason we have a good website is because I enforce a culture of craftsmanship. And I want everything that we do to be well crafted. But I know a lot of people who do very similar business, who just don’t have that culture. And so it’s just different.

Jay Goltz:
What drives it or not is a different story. You’re saying culture might drive your brand, but the brand is the brand.

Paul Downs:
Okay, well, let me throw this out. It sounds like you guys think of culture as being part of the brand.

Shawn Busse:
Correct.

Jay Goltz:
Yeah, sure.

Paul Downs:
And I think of brand as being part of the culture. In other words, there’s a fundamental way of being a Paul Downs Cabinetmaker, that if everything is done the way I want it to be, the brand ends up being the thing you see. But your definition doesn’t really address… Like, okay, what’s the point of a brand without brand awareness?

Jay Goltz:
Let me explain that. So you could have a brand. You could look great from the outside—except you could be a complete jackass. But if no one knows that you’re a complete jackass, your brand is still your brand. “Oh, look, there’s a nice company.” That doesn’t mean you are a nice company. But you look like a nice company. So my argument is: Your brand is the perception of what people see. Now, to your next question of what good is brand without brand awareness? Yeah, sure. You need to market your brand and get it out there. No question about it. But you are doing that. I Googled just those few phrases, and you came right up, number one.

Paul Downs:
That’s great. I’ll send a thank you note to Google, because they did that.

Jay Goltz:
No, they didn’t do that. You did that.

Shawn Busse:
I want to address Paul’s comment, because I disagree with him pretty vociferously. So my belief is that every company has a brand, whether they like it or not, right? It’s the perception of the organization from, quote-unquote, the outside. Now, where I extend that idea is, I don’t just think of customers. I actually think of the employees.

So the employees have a perception of the company. They have an experience with the brand. That experience is something you’re trying to shape, Paul. You’re trying to focus on craftsmanship, attention to detail, and those employees talk about your company when you’re not around in a certain way. Now, ideally, they talk about your company in the way you want them to, and your customers talk about the company in the same way.

And I think that’s the opportunity for small businesses, is to align those internal forces and that external awareness. I agree with Jay a thousand percent. What you’re talking about is brand awareness. It’s not brand. Brand awareness is people being aware of what’s going on out there and that you’re the go-to source for conference tables. For example, that’s customer brand awareness. You might also have very low employee brand awareness. You may not be somebody that people think about going to work for because you haven’t done a good job of articulating what your culture is and what it’s about. Whether that’s true or not, I don’t know.

Jay Goltz:
I’ve gotta tell you though, if someone goes to his website, it reeks of just nice, happy company. So if someone does nothing more than just go to his website, I think he’s already ahead of the game with that. And every day, just about, I see a company that’s just doing a terrible job with brand management. Just like you get, I’m sure, I get 10 emails a day about people trying to pitch me on services. So this one guy calls me, follows up on his email, calls me two or three times, and does a good job. So I did something I almost never do. I actually called them. He’s selling freight management services.

I called him, I said, “I just have to give you credit. You did a really good job of following up. Most people never follow up.” He didn’t put a bunch of baloney in there. It was right to the point. And as I’m talking to him, though, I pull up his website, and I hit “About Us,” and there’s nothing there. It’s about, “We started in whatever year.” I go, “Who owns your company?” He couldn’t even tell me. I go, “You know what? I’m not doing business with a company if I don’t know who’s behind it.” And that’s my new philosophy, as of yesterday. Any company that’s pitching me, if I go to their website and they hide, I’m not doing business with them.

Shawn Busse:
See, I think you put your finger on the thing I’m trying to address, which is that most businesses do not appreciate that interconnectivity between the culture and the internal brand and the external experience. So right there is a perfect example of that, right? Like, your interfacing with him created a perception of the company that then got kind of screwed up by how they’ve managed it in the public presentation.

Jay Goltz:
Somebody made a decision. That wasn’t an accident. They made a decision. “Oh, no, I don’t want my name on there.” Oh, you want me to give you all my inside information about my shipping prices, and you won’t even tell me your name?

I can tell you, somebody called me last year, really good pitch. He works for one of the biggest brokerage firms in the country—you’d know it in a second—a private wealth group. And he’s pitching me on why I should have my portfolio there. And he did a really, really good job, surprisingly. So I Googled the name of his company. I see who the three principals are. The first thing that came up? The guy’s name. He was being sued for drugging and raping a woman and leaving her for dead. In The New York Times.

And better yet, hit this button, a video. It’s a video of him dragging the woman into the elevator in a hotel. A video of it! And I’m thinking, “Wow, there’s some branding.” So he called me back. I said, “You know, I’ve gotta tell you. I did a little research on your company…” “Oh my God, that’s a nightmare! That lady’s crazy!” And he goes into his whole thing. And I thought, “Not cool. Were you there? Do you know what happened?” I have a video in front of me watching him drag this woman. He should have said, “You know what, that was a really bad situation. I wasn’t there. I can only tell you the case was dismissed. If you’d like, I’d be happy to have you talk to one of the others.” And all I’m thinking is, “These guys are managing millions, hundreds of millions of dollars, for people. And that guy’s picture is still on their website.”

So I have an idea for you. I think you should do something called a “brand audit.” You go into a company. There aren’t 500. I’m sitting here, as we’re talking, and I made a list. I think there are probably 30 things you could look at—everything from their invoices, to business cards, to websites, to the trucks, to their cars, to the way they dress, to their hours, to the way their office looks, to where their office is, and you could just do a brand audit and say …

Loren Feldman:
Who are you saying to do this, Jay? Who should do an audit?

Paul Downs:
Not me. It’s not you, Loren. I think that leaves just Shawn.

Jay Goltz:
What’s the problem?

Paul Downs:
No, I think it’s a good idea. Actually, can I jump in and say, we’re talking about brand as if it’s one thing, but actually brand for a small business and brand for American Airlines? Two completely different things. Jay, when you pick up a Coke and drink it? Do you give a damn whether the CEO paid his taxes last year or not? No. There’s different scales to it.

Jay Goltz:
Wait, I’ve gotta tell you, though. Maybe I don’t care if he paid his taxes, but I might care if I knew he was giving a lot of money to a cause that I’m adamantly against. That would make a difference.

Paul Downs:
Okay, what’s in your fridge?

Jay Goltz:
I don’t drink Coke. I think it’s poison.

Paul Downs:
Well, what do you drink? Tell me what the CEO is up to on every single product that’s in your fridge?

Jay Goltz:
I’m not looking into it.

Paul Downs:
I’m perfectly happy to say that, when we talk about small business brand—which I think is where Shawn started—yeah, that’s a different conversation, and that some of my comments on the value of brand are more thinking, “Okay, we’re incorporating this concept, which is, ‘Do people know who you are?’” And the part that we haven’t talked about yet is: Do people care about all that back office stuff if the product itself is satisfactory?

Jay Goltz:
I have the answer to that, and the answer is: People can dismiss every single thing I say. “Oh, no one cares what your car looks like.” And the answer is, “Okay, you’re probably 90 percent right. But 10 percent of the people do in fact pay attention whether your cars look a certain way.” Some people do care if the partner in charge of their finances is a rapist. Some people care, some people don’t care. But there’s probably—I’m guessing now—30 things you could put on this audit sheet to decide whether the impression they’re giving to the outside world matches what they think they are.

Loren Feldman:
Let me cut in here for a second. Before we get too far away from the disagreement between Shawn and Paul about Paul’s branding, or lack thereof, is this just semantics? Does it matter what you label it? I mean, we all agree that Paul has a great brand. Well, we don’t all agree. We all agree that Paul needs more brand awareness, and he is thinking about ways to achieve that. Does it matter what we call it? Is this just semantics? Or is there something deeper here?

Shawn Busse:
I think, man, we’re just bringing up so many rich topics here we could talk about, but part of the reason I brought brought this to the table is I was curious what would happen, because when I am out in the marketplace, and I say, “Kinesis provides marketing services,” for example, immediately people frame in their mind what they think that is. And if I then say, “Part of our services is we help people reinvent their hiring process and rewrite their job descriptions,” they’ll be like, “Wait a minute, that’s not marketing.” And so then there’s confusion, or in the best case, it’s curiosity. That’s great.

So I think that, yes, it’s semantics. And there’s no agreement, in terms of what this word means. Just listen to the three of us. We’ve all got various versions of this truth. But I do think it’s an important thing, at least, that’s been my experience. When I see small businesses get it right, they really dominate, because it’s an alignment. I mean, back to Jay’s point several episodes ago, it’s an alignment opportunity. It’s saying, “Internally, this is what we believe, do, and say. Externally, this is what we present, do, and say.” And I think the problem for small businesses is when they don’t recognize that they have a brand—a public-facing brand—and also an internal way of living in the world. That misalignment is what pisses customers off the most.

Recently, as an example, I use a big brand, Sonos, which is a speaker company. I love the product. It’s great, it’s wonderful, I have a bunch of them. I had one break, and I engaged with the company through their customer service. It was a terrible experience. That was the first time I really had a bad experience with that company, and I reached out to their kind of next level support. And I was like, “This is what happened. This is my experience.” And they were amazing. They made it right. They went above and beyond. So it’s like, companies have a real opportunity to impact their customer experience, as well as their customer loyalty and advocacy.

And I think that word they want to use when they say that is “brand.” And I can’t think of a better word, because if I say… I don’t know what to say. That is a brand experience. Yeah, it’s a customer service experience, but it’s everything. Right now, my perception of the company has really been salvaged, and now I’m an advocate again. And I think the more small businesses think like that, they think about, “Hey, if I don’t hire great people internally, we’re gonna lose customers.” And I think that’s part of the brand, and I think most companies do that intuitively and without a deliberate thought. But I think that’s actually an opportunity.

Jay Goltz:
I think what you’re doing is having operations alignment, so that their brand matches their intentions. You’re not putting lipstick on a pig here. You’re not going there, and saying, “Oh, we’re going to get everyone to believe that you’ve got nice people working there.” No, you’re fixing their hiring process. You’re fixing the operation. So I think what you’re talking about is matching their operations with their intent, and then making sure that their brand matches both of those things. And you’re right, a lot of companies aren’t doing that.

Loren Feldman:
Jay, let me ask you: Do you feel your brand is where you’d like it to be? Do you think, in Chicago, people know there’s a difference between your framing stores and other framing stores?

Jay Goltz:
I work on it regularly. I make sure my website looks better. I make sure the front of the building looks better, my storefront looks better, my storage side looks better, I’ve got better people. Have I figured out how to make sure that I can communicate that in the best possible way? It’s difficult, because the fact is, my frame business is 20 times the size of the average frame business. And as a result, I’ve got much better resources. I’ve got a much better inventory. But it’s difficult to advertise that without just sounding like you’re bragging or something. An ad line saying, “We’re 20 times bigger than,” is not necessarily gonna sell more picture framing. But there are some inherent advantages to the fact that we are much bigger.

The other thing is, we’re much bigger because we do a better job. It’s not any more complicated than that. It really isn’t. It’s not like I’m spending $8 million a year on advertising. We do a better job. My retention is way higher than most places.

Loren Feldman:
Do your customers know that?

Jay Goltz:
I think so. We try to communicate that.

Shawn Busse:
I think they feel it. Here’s the thing: I think they feel it.

Jay Goltz:
Do you know why? They walk in and they see the same person that’s worked here for 20 years.

Shawn Busse:
Yeah, yeah. They feel cared for.

Jay Goltz:
I’ve got three people in the showroom who have been here for 20 years. I don’t have to, they see it. And then if there’s ever a problem with anything, then we always take care of it. Are there some people who are mad at us for some reason, because they think the price was too high?

Somebody was mad—and I feel bad about this—we delivered their artwork to their condo, we gave it to the concierge, and it was in a clear plastic bag. And he was mad that his neighbors could see the art. And like, it sounds silly, but I get it. You know, I didn’t think about it. We don’t do that anymore. I mean, there are some people who are mad about something, but we take care of customers. It’s not any more complicated than that. And I can tell you, because I know this number for sure, 93 percent of our customers are either repeat or their friends sent them in. I mean, my business was not built by advertising. It was built by keeping customers happy.

Paul Downs:
Well, I think Jay’s idea of a brand audit is actually very good. That’s a great service, and it’s probably not a ton of work, and it would be a great way to open a conversation with a client.

Shawn Busse:
What we found is, when we say to folks, “Hey, you can’t read the label from inside the bottle,” most everybody is kind of like, “Yeah, I know.” And it even goes for us. We’ve hired people to evaluate us. And part of that process is interviewing our customers, because customers will tell a third-party things they won’t tell you as an owner—both good and bad. If you’re really concerned about your brand—whether that’s public perception or employee experience, which I think is more and more important—many of these businesses are in fierce competition with what they do.

I mean, Jay is a great example of this. Building frames and putting art in frames is something that a lot of people could do, but somehow, he’s figured out a way to win out over the competition for many, many years. And I would argue a large part of that is the experience the customer has, which is a direct result of the employee engagement, which is a direct result of his care and compassion for his employees. I can just draw a straight line to that.

Jay Goltz:
I can give you some simple math. I tell people, “If I keep 95 percent of the customers really happy, and someone else keeps 90 percent happy—simply because they close early sometimes, or the lighting is bad, whatever, lots of reasons—that, over 40 years, is going to be the difference between having a really big business and not a really big business.” We’re talking about being 5 or 10 percent better. That’s all we’re talking about. And over time, that’s what separates the companies that grow and the companies that don’t grow.

Paul Downs:
So, let me jump in. Shawn, if you think the things that I think are culture are brand, what in your mind is culture?

Shawn Busse:
I think it’s sort of like asking the question, “What is sautéing vegetables?” It’s a form of cooking, right? So I’m thinking about cooking. I’m thinking about the whole act of preparing a meal. And a culture is a component of that—and I think a really important component. But I really like to think about it through the lens of brand, because I want to see culture aligned with the external presentation. I want internal culture to match customer experience and expectation. And I think brand can be a way to unify those ideas, and the more we see people struggling to hire employees, it’s no longer, “I want to hire an employee to do a job.” It’s like, “I want to hire an employee to be part of something.” And those are your best candidates. Those are your best employees.

And to do that, I think you have to present them with a larger narrative of purpose and meaning, whether that’s, “Hey, be part of a group that cares for one another.” It can be as simple as that. It can be, “Be a craftsman and the best person at your art.” That could be part of your brand. And then that’s something that customers, I think, care about, Paul.

So I see culture as a subset of brand that’s probably as or more important than your public presentation for small businesses. And I think that’s a little bit controversial, because I think the emphasis is almost always on, “Well, how do we look better? How do we have a better logo? How do we have a better website?” And that’s important, but I think the experience the customer has, from a long-term perspective, is how you build compounding returns. Because if you create a great customer experience, and they come back to you, and they refer business to you, that is so much more valuable than paying a ton of money to go get new clients. At least, that’s been my experience.

Jay Goltz:
That math would back that up. It’s cheaper, it’s better business to make your customers happier, than to keep trying to find new customers. And I actually believe I have—at least for myself, I’ll just say for myself—I feel very comfortable that I can define corporate culture in three things.

Simple: One, how far will you go for a customer? We do whatever we need to do. Two, what do you expect from employees? I don’t want to run a place where people are working 70 hours a week. I think they need to be here when they need to be here, but I do not push people that hard, and I don’t want to run a place like that. That’s just my personal thing. And three, what are your expectations or standards for the way they treat each other? I will not have people working here being disrespectful to each other.

And I have had some very painful firings that I’ve had to get rid of some people that were really valuable who just couldn’t stop being jerks to other people. And after three or four conversations, and after saying, “If this happens again, you’re going to leave me no choice but to fire you. And I’m gonna be sick about it, but I’m going to do it,” I’ve had to do that several times, because some people just can’t stop being jerks. So I think that’s what corporate culture is personally.

Loren Feldman:
Paul, did you get an answer from Shawn and Jay?

Paul Downs:
Oh, yeah. Did you hear any of that, Loren? The day we don’t get an answer from Jay…

Jay Goltz:
That’s my brand.

Loren Feldman:
All right, here’s the most important question then, and be honest: Do you guys think 21 Hats has potential as a brand? Anybody?

Jay Goltz:
I think it already has a brand. I think you have a brand of having honest conversations about things that you’d never hear—that I’d never hear—anywhere else. I think that’s the brand: Real life conversations with real life business owners.

Paul Downs:
You are in a particularly difficult situation, because your space is dominated by other brands that are up and functioning, and you’re competing for attention with people who’ve had a lot of practice at grabbing attention. So I think that’s the part of the discussion that we haven’t really touched on yet, which is: What’s the value of a brand? I mean, I agree with Shawn that it’s very important that you have an internal brand-slash-culture that is not repellent to new possible job applicants, particularly in this environment. Let’s stipulate, yes, that’s true.

But in terms of being out there in the wide world, hoping that somebody who’s looking for a good or service is going to connect with any particular business, their brand is functioning in a slightly different way. And you can have your internal house in order, as I do. And you can have a great website, as I do. But it’s not driving new business to us at the moment. We’re still stuck on Google. And Loren, you’re in exactly the same situation. You’ve got a great product. And you—I mean, presumably—the voices in your head are all in alignment, because you don’t have employees.

Loren Feldman:
Did I tell you about the voices in my head?

Paul Downs:
If you don’t remember, then that’s a bad sign. [Laughter] But do you know what I’m saying? It’s that it’s not just an internal set of decisions. It’s about how it operates in the marketplace. And I think that that’s an entirely different discussion. So I’ll just throw that out there and Shawn and Jay can have at it.

Jay Goltz:
I think you keep mixing up brand with marketing. Everything you just described is marketing. It’s taking your brand and getting it out there to get business—that’s called marketing. And in my mind, I think there is a very clear distinction. Your brand is what you are, and how you come off, and how you go to the public, and marketing is how you get that out there. And I think that you’re right—21 Hats, while I believe it has a very strong brand, clearly it’s difficult for Loren to compete with American Express when they want to go out there and pitch their whatever.

Paul Downs:
Okay, let’s put it a different way. Unless you’ve succeeded in your marketing, you don’t have a valuable brand. You just have a logo and some letterhead or whatever you’ve got.

Jay Goltz:
Okay. I won’t argue with that one.

Paul Downs:
Looking at it from what’s happening in the marketplace, and just saying, “It’s a marketing problem,” okay, yeah, it’s a marketing problem. But how do we solve the marketing problem, particularly for smaller businesses? What do you have to do so that you start to build that awareness? That’s where I’m stuck, because my brand is not bringing me new business. New business is bringing me the opportunity to build the brand that I want.

Jay Goltz:
Wait, wait, wait, wait. How can you say your brand—your website does a lovely job of communicating your brand. And you just said you get lots of traffic—

Paul Downs:
Because I got business when I had a crappy website. The way customers find us is really driven by Google—not what I have on my website.

Jay Goltz:
Again, that’s marketing, not brand. You have a very solid brand. When they do find you, they find out, “Oh, this guy cares about what he does and does a nice job.” That’s your brand.

Shawn Busse:
Can we circle back to Loren for a minute here? I think Paul makes some great points, as usual. You are in a bit of a crowded market. There are a lot of folks giving business advice or giving insight into business. I think your brand position is unique, in that you’re looking for authenticity and deep conversation. And that’s really different than the bullshit that all these other companies are putting out—whether it’s American Express or the Incs or the Forbes, right? They’re putting out, like, “The 10 Things You Need to Do to Make Your Business Prosper.” Right? It’s just really surface-y shit.

Jay Goltz:
Written by journalists. [Laughter]

Shawn Busse:
I just don’t think it’s very meaningful. And so when I tune into the podcast—and when I did when I was not here—I appreciated the fact that you were having real conversations with real owners struggling and trying to achieve things. Like, from a brand position, you carved out a very unique space.

But I also think Paul is right, in that you have an awareness challenge. You have a marketing challenge of getting the word out there, getting people aware of it. You have a competition for time and eyeballs challenge, because everybody’s trying to go digital and podcast now because of the pandemic and other reasons. So there are different challenges. I think you have a brand. I think you have a position. You have a point of view. You have an experience people have when they use it. Those are all really great things.

Loren Feldman:
Is 21 Hats a good name?

Shawn Busse:
Well, you’ve used it for two years. So you know—

Paul Downs:
Yeah, that’s your brand at the moment. And that’s literally your brand. The brand is the thing you stick on the side of the cow, and then it’s marked after that, right?

Jay Goltz:
There are 21 things an entrepreneur needs to do, and that’s what we’re talking about.

Paul Downs:
It should have been 99 Hats. [Laughter]

Jay Goltz:
No, there are 21 Hats.

Shawn Busse:
I don’t think that’s the question for you to be asking, Loren. I think you’ve worked on building a brand around that brand identity. So you have a brand identity, which is 21 Hats, and that has a visual presentation. You’ve invested in those for two years, so there’s some equity in it. And then the question is: How strong is that equity? Is there brand confusion with other companies? That’s a deep, long-winded conversation. And I would just say, probably it’s fine. And you should just stick with it.

Loren Feldman:
All right. That’s what I was looking for.

Jay Goltz:
Would either of you say that my explanation of what I believe corporate culture is—how far you go for a customer, what do you expect out of employees, and how they treat each other—does that fit? Paul? Does it fit?

Paul Downs:
That’s culture. It fits what I think culture is perfectly. I think that brand can be very different. And you can have a great culture and not have… Like, what if you’re in a business that doesn’t engender warm and fuzzy feelings? Suppose you’re running a tow truck or something that just picks up people who just had a crash by the side of the road. Do you care about a brand? No. But you can have a kick-ass culture. You could have the most wonderful tow truck experience, but nobody is gonna care whether you have a brand, because they don’t use that product or service in a way that gives a brand any value.

Jay Goltz:
All right, you just walked into my trap. You said exactly what I said you were doing: “No one cares about your brand.” And I would argue, if you just had your new BMW in an accident, you want a truck driver showing up who’s not going to wreck your car worse than it’s already wrecked. So I do believe some people are going to care about your brand when the tow truck shows up.

Shawn Busse:
I just think what you’re highlighting, Paul—which is really cool—is the idea of: How much friction do you have in your organization? So in the tow-truck example, I think it’s a really good example, because there are companies like that where either the activity they do is not exactly amazing, or it’s perceived as… Payday lenders is a good example of that, right? You can work really hard to make that internal culture rah rah and exciting, but at the end of the day, when somebody goes to a party and says, “I work for a payday lender,” the person probably is going to wince and go find somebody else to talk to. And that has an impact on the people working there. It’s friction.

You can overcome it. Just like the tow truck, you say, “Yeah, I work at this tow truck company.” People are like, “Oh, tow trucks, man…” There’s a public brand perception. So I think most business owners don’t have that problem, hopefully. But if you don’t have that problem, then why have artificial friction? And that’s my point. It’s like, let’s say Jay had a really great internal culture and treated his people really well, but yet, when somebody showed up in the store… How about this retail experience: when you walk in at 10 minutes ‘til close, and the first thing somebody says to you is, “Hey, we close in 10 minutes.” It’s like, “What!!!???”

Jay Goltz:
And I can assure you, that’s one of my things that my employees would never—

Shawn Busse:
They never do. Right? So that injection of friction just makes more work for Jay and makes the customer experience worse, makes it more expensive to get customers, and turnover higher. So I think the elimination of that friction between the internal brand and your employee experience and culture and your external presentation is often a really cool opportunity.

Jay Goltz:
I do think that the brand out there is, “We’re doing a good job.” But that doesn’t mean that I think I’m doing the best possible thing with brand awareness, because I am always trying to figure out—you know, on public radio, they give you 15 seconds and they’re extremely restrictive about what you can say. You can’t use any accolades. You can’t say “rated best framer in Chicago.” I’m constantly trying to figure out, “What can I say to get the message across that we really are better?”

Loren Feldman:
That’s because they’re trying to maintain the fiction that they don’t take advertising while they’re taking advertising. But let’s stop here. We’re just about out of time. And I want to run a few ideas past you that I’ve been reading about recently about companies addressing the labor shortage. But first, let’s take a quick break to hear from our sponsor.

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Loren Feldman:
And we’re back. So this labor shortage isn’t going anywhere, and I keep reading interesting stories about companies trying different things. I want to run a few by you guys to see what you think. We recently highlighted in the Morning Report that some companies have decided that annual raises are not enough. They are going to review raises more often. Have any of you guys thought about doing that? Do you think it’s a good idea?

Paul Downs:
I don’t do an annual raise to start with.

Jay Goltz:
What do you do?

Paul Downs:
I do an annual pay cut. [Laughter]

Loren Feldman:
Now, that’s culture.

Shawn Busse:
Paul gets an annual raise. His employees get an annual pay cut. It’s great.

Paul Downs:
No, I mean, first of all, I think that once a year sitting down and having some big, scary conversation about pay hasn’t worked for me. I tried it for a while. It’s just not a good fit for where we are. And the second thing is that my ability to pay people is very closely tied to how the company is doing, and so I put a lot of effort into keeping everybody abreast of that constantly. And generally, I try to even get out ahead of anybody who needs better pay.

But I’ve given people raises much more often—probably a 10-to-one ratio—to people who’ve asked for them. And that may be because the rest of the culture is pretty amenable, and we try very hard to make this a good place to work. There are 10 million surveys that say pay isn’t the most important thing, and I tend to agree with that, in my experience—as long as you’re paying people sort of a baseline. Can they support themselves? And I’m doing that for all of my employees.

Loren Feldman:
All right, here’s another one. We just published something in the Morning Report in the last couple of days—there are companies now that are offering two weeks of vacation to employees before they start. You sign up for the job, you set a start date, but you get paid for two weeks before your first day of work. Thoughts?

Paul Downs:
That’s just a signing bonus, isn’t it?

Jay Goltz:
Not necessarily. If they’re truly giving you your two weeks vacation, which means at the end of the first cycle of the year, you no longer have any vacation accrued, it really isn’t a signing bonus. They just gave it to you upfront. That’s a gray one. We don’t know whether at the end of the year, are they getting another two weeks then? Or does it go back to, you have to earn it?

Loren Feldman:
That’s a good question. I don’t know the answer to that.

Paul Downs:
I wouldn’t do that. But that sounds like it might be good in a situation where a company doesn’t normally offer vacation. I mean, what are we talking about here? Are we talking about people who are trying to staff a burger stand? Are we talking about software engineers? Or what are we talking about? So those are just different.

Loren Feldman:
I think it’s skilled employees at higher-level salaries.

Paul Downs:
Honestly, I would never do that. Because anybody who would take that offer, I wouldn’t want to hire them anyway.

Shawn Busse:
Exactly. I mean, this just feels like A) a publicity stunt, and B), a continuation of the transactional mindset that has gotten employers in this position in the first place. I find it to be insulting. It’s like, “Well, we’ve treated you like crap for so many years, but now we’re gonna do something special for you.” It’s like, people see through that shit. They look on Glassdoor, and they go, “What’s it like to work there? And do the people care?” And I don’t know. It just seems like—

Jay Goltz:
It’s a gimmick.

Shawn Busse:
It’s a gimmick, yeah.

Loren Feldman:
Another story that we highlighted recently talked about companies that are all but giving up on resumes and focusing on skills tests instead. And they’re doing this for a number of reasons, including to try to improve diversity in their hiring. What do you guys think of that?

Paul Downs:
Well, I’ve been giving skills tests for years—for 20 years. But that doesn’t mean I don’t look at a resume. What it does is, it gives someone whose resume may not be exactly to my liking an opportunity to show what they can do. And it’s also a very useful double-check on people whose resumes are quite impressive. Can you actually do five relatively simple things that you’re going to need to do in this job? So it’s all of those things. That really gets to the hiring process, and a lot of small businesses don’t have a hiring process. They just do it when they need to, and it’s a scramble every single time.

Jay Goltz:
It’s just another gimmick: “Oh, don’t worry about resumes.” And I’m not saying skills testing is bad. Do both. But to suggest that you shouldn’t know where they’ve been for the last 10 years, and how long they were there, and what they did, and who you can call for a reference? That’s just ridiculous.

Paul Downs:
The other thing is just like, I ask people to send me a resume—even for any job—because I want to know whether they can respond to a very simple instruction. You know, you’re looking for a job, you should probably have a resume. And there are some cases where I don’t do that.

For serious blue collar work, if someone is highly recommended to me, “Oh, I worked with this guy. He doesn’t speak much English, but he’s an awesome worker,” great, I’ll hire him. I don’t need a resume from that guy. But for most people, it’s just a question of: I’m asking you to do something. Give me a resume. And then when you look at the resume, you can tell a lot about someone. Did they use a spellcheck? There are so many things that are relevant in just the act of handing a resume over to my particular work situation.

Jay Goltz:
I’ve gotten resumes that say things like they live in Chicago, comma, Michigan. Like, oops! Forgot to change the state. I mean, people send resumes in like they did it in the dark. So I think that’s just another gimmick that got into the newspapers so that Loren can read them.

Shawn Busse:
I think what Paul said has been my experience as well. It’s really valuable to get a glimpse into how somebody operates in a real world environment. And I don’t think an interview is a very good indicator of that always. It’s hard. Sometimes people get nervous. They fumble on questions. But they might be actually really good at a job.

Jay Goltz:
And the opposite: they’ve gotten really good at interviewing because they’re horrible employees and they’re constantly getting fired. So they’ve got lots of experience looking for jobs.

Loren Feldman:
One aspect of this is to try to de-emphasize credentials that may not really be important when it comes to the job. I mean, for some jobs, do you really need a college degree? Or maybe you don’t? And that’s part of the thinking here. Does that make sense to any of you?

Jay Goltz:
Sure.

Shawn Busse:
Totally.

Paul Downs:
The premise of the question is: I am an organization that can’t be bothered to take a look at people as individuals. I have a process that I’ve set up to, “You’re going to do this, and we’re going to take a superficial analysis of whatever kind of bullshit this process is. And we’re going to pick a few out. And at the end of the day, it doesn’t really matter whether they’re great or good or mediocre. We need people. We harvest this pile of resumes.”

That’s not the situation I’m in. So my process is about treating people as individuals, and if somebody has potential in any of the number of different things that I’m looking at, then I might overlook some of the other things. But all of these, “Some employers are doing this!” They don’t really fit a small business, because a small business has the opportunity to treat people as individuals. And if you’re running a small business, and you shot somebody off the hiring list because they didn’t go to Harvard, you’re an idiot. You’re gonna fail, and you’re gonna deserve it.

Shawn Busse:
Amen. I have a really wonderful employee named Susie. She’s going back to college. I hired her. I didn’t know she didn’t have a college degree, and she could not get a job to save her life. People passed her over, because they’re like, “Well, you don’t have experience in this,” or, “You don’t have a degree in that.” And I found her blog, and I was like, “Oh my God, you are such a good writer. You’ve got a job tomorrow.”

Jay Goltz:
I’ve got 50 of those people.

Shawn Busse:
And it’s like, today, she is such an incredible team player. I can’t imagine Kinesis without her. And I just think about like all those fools who passed her over, and I’m just like, “God bless them.” You know, to Paul’s point, that is our competitive opportunity as a small business. We can work outside of that space.

Jay Goltz:
Absolutely.

Paul Downs:
I would say that four of my best employees never completed high school, and one never even entered high school. But they can do the job, and so your opportunity as a small business boss is to find those people because, yeah, they’re way undervalued in the market.

Jay Goltz:
Diamonds in the rough.

Loren Feldman:
So we’ve managed to end on a note of agreement. I do want to note that just kind of by the luck of the draw, we wound up with three guys in this conversation—four, if you include me—and we also set a record for profanity, but by a wide measure—and I’m not sure what that’s going to do to my brand. But my thanks to Shawn Busse, Paul Downs, and Jay Goltz. This has really been fun.