When CEOs Behave Badly
Introduction:
This week, our conversation starts with Shawn Busse and Jay Goltz trying to understand why CEOs keep going viral for their misguided attempts to rally the troops. Shawn suspects CEO screeds have always existed—they just haven’t been recorded. He also thinks they tend to come more from public company CEOs who are beholden to shareholders. Jay thinks they’re just morons. “I really don’t understand how someone could be smart enough to run a big company like that,” he says, “and be so completely ignorant. It’s shocking to me.” Of course, CEOs of both publicly owned companies and privately owned companies do have to do unpleasant things sometimes, but Shawn and Jay say they’ve learned from their own experiences handling layoffs and recessions. “Do we have to go out of our way to be callous about it?” Jay asks. “I don’t think so.” Plus: the very different ways Shawn and Jay manage their hiring processes. Oh, and, what would happen if Jay applied for a job at Shawn’s business?
— Loren Feldman
Guests:
Shawn Busse is CEO of Kinesis.
Jay Goltz is CEO of The Goltz Group.
Producer:
Jess Thoubboron is founder of Blank Word.
Full Episode Transcript:
Loren Feldman:
Welcome, Shawn and Jay. It’s great to have you here. I want to start today with we seem to have had a spate lately of CEOs going viral for the wrong reasons—for talking to their employees in a way that can seem, I don’t know, a little tone deaf. In one, the CEO told her employees to stop whining about not getting a bonus and to get to work. “You can visit pity city,” she said, “but you can’t live there.” And another CEO complimented one of his employees for selling the family dog so he could return to the office. He also challenged the idea that you can be the primary caregiver for a child while also working full-time. I don’t know, my CEO friends, what are we to make of this?
Jay Goltz:
You know what? You used the word “tone deaf.” I think that’s a little weak. Just morons?
Loren Feldman:
[Laughter] Okay.
Jay Goltz:
I don’t know. Certainly, we all at times maybe have said stuff that’s tone deaf. This is so huge, their CEOs are big—and one of them makes $4.9 million, and doesn’t think about the fact they make $4.9 million a year, and they’re talking to people like that. I don’t think that falls under the category of tone deaf.
Loren Feldman:
Not just talking to people. Telling people not to complain about not getting a bonus.
Jay Goltz:
Yeah, so I think that’s a little soft sell, calling that tone deaf. I think that’s just—
Loren Feldman:
Well, I wanted to start—
Jay Goltz:
You did. It was a good warm up. You put it right in the middle of the plate for me, and I’m hitting it. All right, it’s just like, wow, seriously? And my guess—I’m no expert in this. I’ve never looked into it. I’m guessing this—if you looked into the background of all these people, they’ve never been at the bottom, anywhere. That’s my guess.
They went to the right schools, and they just can’t identify with regular people. That’s my guess. I could be wrong, but I don’t know how you could grow up—or, especially in my case, start a business where I had a bunch of people not making much. I wasn’t making much more than they were in the beginning—and not empathize and understand—versus you’re making $4.9 million.
Loren Feldman:
Shawn, how did these hit you?
Shawn Busse:
I mean, I have a couple of thoughts on this. One is that I suspect these types of conversations have been happening for a long time. It’s just that now with the prevalence of Zoom, and remote meetings, and the ability to record things, just like with social media, we’re just seeing people for who they truly are, in some cases. And so it’s like, you used to be able to get away with it, I think. And now it’s harder.
And then the other thing, speaking specifically to the “pity city” CEO—or the pitiful CEO—if you watch her, she starts out pretty calm and collected. And then there’s just a moment, you see her amygdala just hijacks her. She just goes into this totally different space. And then when she finishes it, she just sort of raises her hand like she did a great thing. And I think she thinks she was motivating and rallying the troops.
Jay Goltz:
Yeah, like mic drop, mic drop.
Shawn Busse:
Right, the mic drop moment. Look, if I can be empathetic for a minute, she’s running a company that does commercial office furnishings, which is probably one of the worst businesses you could be in in the last few years. And so I’m guessing she’s getting all this pressure from the market and from her board to perform. And she’s just pushing that down onto her people.
Jay Goltz:
But she still got a bonus, though. Did you notice that? She still got a huge bonus. I’m having a hard time trying to be empathetic to her. But I’m having a hard time understanding. Like I said, you know, maybe we’ve all said things that were—maybe it’s just me. I’m sure I’ve said things that have been tone deaf, but this is so beyond that. I just say to myself: How could you be that ignorant, and not at least, as a leader, say, “Listen, I know it’s upsetting that you’re not getting your bonuses”? It’s like, “How dare you ask?” And it’s really remarkable. I don’t know. And I’m sure, to Shawn’s point, this has been going on for years. This isn’t a new thing.
Shawn Busse:
And I think two things can be true at once. One is, I think leaders are under a lot of stress, and have been under a lot of stress across all industries. And also, I think she’s a terrible leader. I think they’re both true. I mean, everything about that—the lack of empathy, the size of compensation she gets in relationship to the other people, pushing down on people, motivating through fear and threats. I mean, it is text book terrible leadership. Honestly, I don’t think she’ll survive this. I think she’s out. I might be wrong, but I just don’t know how the company goes forward with that kind of behavior. I mean, they’ve got to do something.
Jay Goltz:
My daughter-in-law is a labor attorney, and she just went off on her own, and she’s doing a seminar today. And she’s speaking about the intelligent way to do layoffs—in the last two weeks, there have been some horrendous examples of it—and I said to her, “You know what? You’re really doing three things.”
First, as a lawyer, you have to explain the legal things about it. Okay, fair enough. Then you’ve got to think about brand. Your company’s going to be known for this. How do you look if you go and lay off a bunch of people and are cold about it and don’t do it in the proper way? Then you need to think about if you’re going to be calling people back.
This is a true statement I’m gonna tell you: I’ve done speeches to hundreds of people. I have never met one, when I say, “Do you know how unemployment works in your state?” No one really understands it who I’ve talked to. I’m sure there’s someone somewhere. They’ve guessed at it, and I go, “No, that’s not how it works.”
The reality is, in Illinois, if somebody is making more than, like, 50 grand, it’s probably gonna cost like $27,000 of unemployment. You don’t get a bill from Illinois. It throws into your rate, and it slowly comes out of your thing for the next three years. But most entrepreneurs don’t know what their unemployment rate is. So it’s expensive to lay a lot of people off.
So the point is, if you’re thinking you might have to bring them back in four or five months, you know what? You just paid $27,000 out, and now you’re going to bring them back. So you should consider that. Maybe there are furloughs, maybe there are other things you do. And then, lastly, it gets to another level of: Do you want to be a decent human being? I mean, this is disturbing to people. Forget about the brand. Forget about the money. How about trying to be a decent human being and recognize people are traumatized by that sometimes, and try to be nice? How about that?
Loren Feldman:
There are some interesting issues in that, Jay, and things have changed because of the pandemic and Zoom. Wasn’t it McDonald’s recently that told people not to come into the office so they could be laid off on Zoom? They wanted everybody to be at home. And that was an interesting question. Some people took the side that that is the humane way to do it. Let people be at home and not in the office.
Jay Goltz:
That’s funny you say that. My nephew just took a job there, a pretty decent job there. And he told me he wasn’t sure if he was getting laid off or not. And I understand that running a corporation with tens of thousands of people is different than running it with 50 or 100. But there probably is an argument as to what’s the most humane way to do it. What, are we supposed to have a meeting with 10,000 people? I’m not at all saying, “Oh, no, it’s got to be one-on-one in person.” Maybe it can’t be. I understand that. But there are still ways of doing it that are decent and humane as much as you can be. I mean, some people are just gonna be upset. I got it. But do we have to go out of our way to be callous about it? I don’t think so.
Shawn Busse:
Jay, I’m curious, in your career, have you had to lay people off for financial reasons?
Jay Goltz:
Listen, I’ve lived through, what, five recessions, six recessions, in 45 years? Probably, a couple of times. Like the bad one, 2008, I cut everybody back to 32 hours. We were doing furloughs, and I didn’t lay anyone off. If there was someone who was marginal or who was just barely holding on, and we just hired them, yeah, sure, I would lay them off because it, but I’ve never—
Loren Feldman:
So you did lay some people off.
Jay Goltz:
Very minimally, though, very minimally. And all these years, maybe three people, I don’t remember. I’ve never laid off like five people or something. And if somebody was barely holding on to the job, it’s like, at that point, it’s not fair to the ones who have been there for years. You have to balance out. You know, furloughing ain’t great either and cutting hours isn’t great either. So there is a reality to, you can only cut people’s salaries so much to where they can’t put food on the table. So can you cut people from 40 hours to 36? Yeah, probably, but you can’t cut them to 25. Now, people do that, but it’s just a mess. And I’m not doing that.
And you know, I’ve read this once. Somebody once said, “Any company that lays off people is an indictment of management.” I think that’s a ridiculous statement. It happens. It happens. I’m sure sometimes it’s done in an irresponsible way, for sure. But, you know, the pandemic, all the high-tech companies are doing so well, they hired a bunch of people. Oops! I mean, who knew it was going to drop off? I mean, layoffs happen. Not here so much, but other places.
Loren Feldman:
How about you, Shawn? Have you had to do it?
Shawn Busse:
Yeah, let’s see, how many recessions have I survived? So I started in 2000, that was a recession; we had 9/11, that was kind of a mini-recession; 2008; and then the pandemic, which behaved differently than a recession, but kind of has similarities. So three, four, and 2008 wiped me out, like totally wiped me out. And it didn’t hit me until late in 2009, and I was at a point in my career where I honestly was still trying to figure out how to run a business. And I just didn’t have a good business model. That was really important learning for me.
And we just got wiped out. All our customers stopped buying, kind of all at the same time. And so we had to pretty much lay everybody off, including myself. You know, if there had been any jobs in the market, I probably would have taken it and had just become an employee, at least for a little while. But yeah, that was rough. That was really emotionally very hard.
Jay Goltz:
How long did that go on?
Shawn Busse:
You know, that’s the funny part about it. As I looked back at it recently… because it felt like forever. It felt like: Wow, we were really suffering for a long time. And the truth was, the momentum was building, probably within eight-nine months of that low point. And then within a year, we were rockin’ and rollin’ again.
Jay Goltz:
Wow. I mean, the reality is, you’ve got to keep the business in business. The worst recessions? Like I said, I’ve been through, I don’t know, six or seven. Did my business ever drop off 20 percent? Yeah, in 2008 it did. But by cutting back the salaries and doing some furloughs, we squeaked through. It’s difficult, but I see some of that with the last two you mentioned doing these things. And I really don’t understand how someone could be smart enough to run a big company like that and be so completely ignorant. It’s shocking to me.
Shawn Busse:
Well, you have a superpower or secret weapon that these publicly traded companies don’t have, which is, you are beholden to yourself and your employees. They are beholden to Wall Street and shareholders. So, once profits fall below a certain level, they have no choice but to eviscerate the company. And you can choose to take less compensation, you can choose to reduce wages, you can ask people to sacrifice. I mean, that’s why I’m so passionate about owner-run businesses. It’s because they can actually be human. I don’t think that MillerKnoll CEO had any choice, to some degree, except to do crappy things. And being a crappy person and being forced to do crappy things is a pretty bad combination.
Jay Goltz:
You know what, you bring up a fair point. I don’t know what it’s like to have to answer to shareholders and stuff. And I call it “selling your soul.” I’d like to keep my soul. So that’s why I run my own business. I can do what I want. But you’re right. I’m not even criticizing him. I just say: I don’t understand it.
But that’s kind of it. Now that I’m thinking about it, though: Okay, maybe they had to lay people off. No problem. They don’t have to be jerks about it, though, saying, “Stop being a pity party.” Jeez, I mean really? That didn’t save any money. That didn’t help the shareholders any. I mean, what’s that about? That was just like a flagrant foul for no reason.
Loren Feldman:
Shawn, when you had to lay people off, did you feel like you handled it as well as you could? Or did you learn from the experience? How do you look back on that?
Shawn Busse:
I was really kind of a baby business owner at the time, and we were very small. So maybe there were like four or five of us, total. And you know, I’d never had to do that kind of thing before, and I had never had any guidance on it. I didn’t have any mentors. So it was just really emotional. I felt like a complete failure. Just to be completely candid. I was breaking down in front of my employees. I just felt like such a loser. And with the benefit of time, I’ve become a lot more easy on myself. But in the moment, yeah, I felt like I was just such a disappointment. It taught me some good lessons.
Jay Goltz:
I had a really interesting meeting in 2008, when it really got bad. I sat there with, I believe, four other people. And I said, “Look, we’ll cut the salaries by X amount, and then the hourly, but I’ve gotta tell you: if we cut the hourly any more than this, they’re gonna have a hard time putting food on the table.” And one of the people around the table, who was young at the time, said either—I don’t remember which it was—“That’s not my problem,” or, “I don’t care.” And it kind of sucked the air out of the room. And that person is still here, and is doing a very good job, and I wrote that off to being young or whatever. But like, I’ve gotta tell you, I still remember it 15 years later, because it was just like… wow.
Shawn Busse:
Yeah. So actually, Loren, what changed, I’d say, in the early pandemic, I was convinced we were going to go into an economic ice age. I saw no path forward that was going to be positive for us, or a lot of businesses. Because you’ve got to remember, this is before PPP. This is before vaccines. And so I was looking at the landscape and was like, “Holy crap, this is going to make 2008 look like a freaking walk in the park.”
And so what we did, which was so different than 2008, is we went into action mode right away. And we put together a plan. And the plan was all about getting really close to customers, being empathetic with customers, and supporting them. We offered many customers, like, “Hey, you don’t have to pay us if you don’t have the money. Like we literally will keep working for you. If you can’t pay us, it’s okay. We want to help you.” And the goodwill that that bought was amazing.
And the other thing we did is we built a huge spreadsheet that showed, “Okay, phase one is senior leadership”—because now we’re bigger, right? We’re a lot bigger than we were in 2008. So we could take the hits. We had cash reserves. We were making good wages, unlike we were in 2008. So I was like, “Okay, phase one, senior leadership takes a pay cut of this much. Phase two, senior leadership takes another pay cut. Phase three, middle folks take this pay cut. Phase four, the lower-paid people take a small cut.” So it was really this tiered program. And we shared it with the whole team. We were totally transparent about it. “This is what we’re going to do. And our goal here is to extend the runway in hopes that something good happens.”
And as it turned out, a lot of good things happened, in terms of the government not treating it like they did in 2008, which was to just basically let everybody twist in the wind. So the combination of PPP gave customers confidence to keep going. The goodwill we had built, the better business model we had built, all those things in combination made it so that we actually didn’t suffer at all. And then by the end of 2020, we had our best year on record—best year: record profits, record revenues. And I really think that those first months made a huge difference, because it demonstrated to the team that we, as the leaders, were willing to sacrifice long before we asked them to sacrifice. And I think that’s why we had such good retention throughout the pandemic while everybody else was having tons of turnover.
Whereas, if you contrast it with other companies, as soon as things got rough, what did they do? They laid their people off. And then they realized—to Jay’s point—“Oh shit, we need those people back.” And then they tried to hire them back, and they’re like, “Fuck you.” And then they couldn’t find people. So I think that there’s a big difference in how you treat adversity, whether you do like our pity city CEO did, or you actually work together. So that was my lesson.
Jay Goltz:
I mean, the fact is, the first thing you should do is not knee-jerk. I mean, the second you fire them, like I said, you’re just paying an annuity. You’re gonna pay it in unemployment for the next three years. So you should think about, maybe it’s worth carrying it for a little bit, because it’s not free to lay people off.
Loren Feldman:
It’s not just unemployment. I mean, a lot of companies pay severance as well.
Jay Goltz:
Right.
Shawn Busse:
And recruiting fees. So then when they need people back, they pay recruiters all this money to go get new [people]. It’s so expensive. It’s crazy.
Loren Feldman:
It’s spending a lot of money to do damage to your brand.
Shawn Busse:
Right.
Jay Goltz:
The more I’m thinking about it, you’re right, Shawn. We don’t know what they have to deal with. Okay, that’s clearly part of it. They have to deal with stockholders. But I really think the other strong part of it is, they didn’t work their way up from the mailroom. They just didn’t, most of them. They went to Stanford or something, and they got recruited, and they got put into these [positions]—they really don’t empathize.
And I think the way they’re talking to these people about, “Get over the pity party.” This is what they say to themselves. I mean, they’re very successful. They probably have a strong work ethic. And they’ve got persistence. And that’s how they want someone to talk to them. And they go, “Yeah, you’re right.” They’re not talking to themselves. They’re talking to someone who’s making $43,000 a year and is trying to make their car payment. They just can’t identify with what the real world is about, it seems to me, and that is not what the typical small business owner is at all.
Shawn Busse:
Yeah, it’s a really different universe. When we wrote the book, talking about how to do marketing in an owner-run business, a lot of it is contrasting corporate America and what’s called shareholder primacy, which is where the shareholders are the customer. They’re the primary customer—meaning in a public company, it’s the stock market. And in a privately held business, you can pay attention to lots of different constituents, including your employees, including your community, including the environment—you know, on and on and on and on. So I think it’s just a systemic problem that is really hard to get around. I don’t really know what the answer is to it. But I know I don’t want to be part of it.
Loren Feldman:
You know, the second company that we referred to was Clearlink, a digital marketing firm. That’s the CEO who complimented his employee for selling his dog. I don’t think that’s a public company. I’m not sure.
Jay Goltz:
They probably got private equity, though. Probably.
Shawn Busse:
That would be interesting to see. I mean, you can be a jerk and be a privately held company.
Loren Feldman:
That’s kind of my point.
Shawn Busse:
Yeah, I have definitely seen those. But then it’s more about: What is the characteristic of the leader? Because you can really see it on full display, versus some of these folks where, you know, I’ve known companies that were wonderful, and then they became owned by private equity, and they became not wonderful anymore.
Jay Goltz:
I’ve seen that, frankly, almost every time. I’m being generous when I say almost—I can’t think of one that I dealt with that didn’t go the way that went. I mean, it’s very painful to watch a good company with a caring owner, the owner sells it, and then all of a sudden, the cuts start, and the, “Oh, we don’t do that anymore.” And the rules, and the policies, and next thing you know, the whole business is just a shadow of what it used to be,
Loren Feldman:
You know, a lot of this starts with hiring. If you do a good job of hiring, and you hire people who you’re happy to have as employees, I think you’re going to look at these situations differently and try harder to handle them better. So it gets back to the question of how you hire people.
And I’m curious, do you guys have a routine when you’re involved in hiring at your companies? I’m sure you’re not the front line, but if you’re doing an interview with an important job candidate, do you prepare for that in any way? What do you do before you talk to them? What are you thinking about?
Jay Goltz:
I don’t really get involved with it anymore.
Loren Feldman:
Even at the end?
Jay Goltz:
Sometimes, but not a lot. I’d say 90 percent I don’t even… I can’t think of the last time I was brought in. You know, I hired a CFO, and I was involved. No, I’m not brought in at the end. And I feel really good that I’ve got people who understand our DNA and know what we’re looking for. And they’re better at it than I am, for sure. It’s true. They’re better at it than I am. I’m a sucker for the hard luck story of someone who’s trying to pull themselves up. That’s my sucker pitch, and then I hire them, and it doesn’t work out sometimes.
And I’ve said to numerous people, “The entrepreneur is frequently the worst person to be doing the hiring because they’re totally into their company.” So they talk about it too much. And they like people. Liking people too much is hard when you’re interviewing. You’ve got to take that off the table for the moment and say, “Guilty until proven innocent.” And then lastly, they literally have 21 other things to do—maybe 20, because there are 21 hats. They’ve got 20 other things to be doing, so they hurry through it, and that’s a recipe for disaster.
I’ve talked about this before, when I hired a woman to do my hiring, my business changed. My business has changed to this day. The people she hired for me 18 years ago are still here. She was way, way, way better than I am at it. And I believe the first step is to figure out who should be doing the interviewing.
Loren Feldman:
How much do you get involved, Shawn?
Shawn Busse:
I’ve had a real journey with this. In our period of really fast growth—so, say 2011 to 2017, especially—I was in it hard. I really believe that at our size—and for context for anybody who’s listening, we were about a 13-, 14-person company at that point—I just believe you can’t afford to get it wrong at that size.
You think about, you have a miss-hire at 10 people, that’s 10 percent of your workforce. It’s not a good thing. So I was the frontline in that case. I would meet people informally and take them out to coffee. I would do a deep dive interview with them. I really took control of that process. And it yielded good results for me.
Jay Goltz:
That’s the question: So you think you’re good at it?
Shawn Busse:
I’m good at it.
Jay Goltz:
Okay, good.
Shawn Busse:
Yeah. I mean, my superpower is EQ. I can read people real fast.
Jay Goltz:
Wow. Good to know.
Shawn Busse:
It’s good for clients, too, because you can sense it. You know, “Oof, this one’s going to be tough,” or, “We shouldn’t take them.” But every superpower has a shadow side. So the shadow side is that when I miss… Like, I’ve missed in a big way, once or twice. And I have learned that I’ve gotta be really careful.
Loren Feldman:
How do you explain that? Why do you think you miss in a big way when you miss?
Shawn Busse:
I had an employee once who, I think the archetype for them is what’s called the political actor, which is that they’re really good at building alliances within an organization and using their political power to climb a ladder. But it’s a very manipulative way of working. And so they also probably have a very strong EQ, but they’re kind of using it for bad purposes. So I have to be really cautious of that person.
Jay Goltz:
So you’re hiring batting average is what? Ninety percent? Eighty percent?
Shawn Busse:
Yeah, if I were to look at that, over time, the ones that I hired? Yeah, it’s probably 80, 90 percent.
Jay Goltz:
And mine in the beginning was probably 25 percent. Because I was just hiring whoever seemed nice, and I didn’t understand the process. And when I do get involved now, I think I’m probably at 75 percent. But there are people who are better than me at it. So it takes a long time. You really have to make a lot of bad hires before you finally realize that this is trickier than it looks and pay more attention.
Shawn Busse:
I’d advocate for a process, too. That’s one of the things that I wanted to get it past just, “Use Shawn’s gut.” And we started putting in place a really lengthy process that in today’s market might be too lengthy, but it really produced good results for us. And the key to that, the real win on that one, was the last step where we would pay people to do kind of a sample presentation. And so we could actually see how they worked and how they interacted with groups of people.
That was a big deal. That change really helped weed out some of the folks who seemed pretty good, but we weren’t real sure. And they’d either rise to the next level, or they would plummet. That was a big change for us. It really helped. And we still do that today. And when we didn’t do that, we had some bad hires.
Jay Goltz:
And how long does it take you in general to figure out the one you hired that you shouldn’t have? Does this go on for three months? A year? Three years?
Shawn Busse:
Yeah, that’s a great question. And something I’ve been thinking about a lot is that pre-pandemic, I think we knew the truth about the person within three months, and then we accepted it within six. In the pandemic, those numbers doubled. So it was like, at six months we’re like, “I’m not sure,” because we’re working virtually, right? It took us almost a year before we’re like, “Shit, we gotta move on with this person.”
Jay Goltz:
I think there’s two things. One is we get better at hiring, and the second one is that you get better at firing, seeing it earlier on. I had one. I couldn’t make this up, it’s so preposterous. I hired a guy probably 30 years ago to be an outside sales guy. We go to lunch, we come out, and there’s a ticket from the parking meter—he didn’t put enough money in. And he says, “Oh, this is what I do. I take the ticket off my car, and I put it on the car behind me, and I flip tickets. Sometimes they pay it by accident.” [Laughter]
If that happened now, I would smile, say, “That’s okay, we won’t do that.” I’d come back to work, and I’d fire him and say, “We’re done.” Back then, I don’t know, I kept him for a few more weeks or something. Anybody that would do something like that? You don’t need them in your business. I can think of lots of times where I should have known better and done something about it. And I let it slide too long. And it’s always too long.
Shawn Busse:
I mean, Jay, you’ve done something that is really, really, really hard. Which is, you’ve turned your company into a hiring engine that doesn’t rely on you. And I think a lot of owners struggle with that. It’s really hard.
Jay Goltz:
Yeah, I guess.
Shawn Busse:
Maybe because you were so bad at it to begin with. [Laughter]
Jay Goltz:
No, because I’m the opposite of many entrepreneurs. They’re control freaks. I’m the opposite. I don’t want to do the day-to-day stuff. I want to go off and do my thing. Lookit, I’m on the podcast now. It’s symptomatic of, I like to do what I like to do. I don’t want to go through reports every day. I’m 80 percent entrepreneur and 20 percent manager. Now, I said that to my production guy who’s been with me for 20 years. He goes: “No, no, Jay. You’re 100 percent entrepreneur.”
Shawn Busse:
And zero percent manager.
Jay Goltz:
Yeah, but I really don’t want to do it. And the key is, keep in mind, the people who I’ve got doing the interviewing? They’ve been with me for 15-20 years. This isn’t like I hired someone, and three years later, they’re doing all the hiring. So they know it better than I do, in some cases. Plus, they’ve got another advantage. They’re not talking to the boss then. They’re talking to a co-worker. They’re gonna give a different view to them than they’re gonna give to me.
Shawn Busse:
Let me ask you a question. So did these people who are good at it now, did they go through a season where they kind of sucked and struggled? Or have they always been good at it?
Jay Goltz:
No. I’m just thinking in my head. I don’t think there was a big learning curve. They were here for years. They know what we’re about. No, they were just good at it. And like I said, I know what my weaknesses are. I love them pulling themselves up by the bootstraps. And I’m a sucker for giving people opportunities. And the fact is, it works a lot. But sometimes it doesn’t work. That finding the diamond in the rough? Sometimes it’s not a diamond. It’s just rough.
Shawn Busse:
A big lump of coal.
Jay Goltz:
Yeah, that’s how it works. But I’ve got 20 stories of people to tell you that I found the diamond in the rough who are great. There are 20 of them. But then there are the other 10 that, oops!
Loren Feldman:
Shawn, do you have an approach that you could articulate, what you want to hear, what you want to ask with a candidate?
Shawn Busse:
Yeah, I mean, I even have a post on it on LinkedIn, like the three favorite questions I like to ask in an interview. So like, if somebody wants to work here, even just if they’ve read that, it gives them a leg up. But really what I’m looking for is, I’m looking for a history of commitments.
And actually, I do have some overlap with Jay here. I like to see somebody who’s actually demonstrated they’ve worked on something and they’ve struggled and they failed and they’ve tried something. I mean, one day, I discovered that a ton of our employees were children of entrepreneurs. And I realized I was probably filtering in for some of this, which is, comfortable with risk, comfortable with uncertainty, knows what it’s like to struggle. And we’re not talking children of entrepreneurs of businesses where they were just rich and lived that privilege. So I look for stories of work, effort, struggle, triumph, and failure.
Loren Feldman:
How do you get at that? What are those three questions?
Shawn Busse:
One of them, as an example, is the you’ve-won-the-lottery question. So you won the lottery. You just got $500 million after tax. What are you gonna do with it? And so I like that question, because it’s, first of all, an open-sky question. What are you going to do? And it’s really interesting, because it really shows me very quickly what the values are of the person.
So I’ve heard everything from, “Well, the first thing I think I’d do, I would pay off my parents’ house.” And that’s really interesting, because it tells me that they’re thinking about: How do I establish safety and security for people I love before, “Oh my God, I would go to Hawaii. And I would do this and I would travel the world,” right?
I look to: Do they put others before themselves? Do they think about something bigger than themselves? So I’ve had people say, “I would start a foundation for decarbonization, and blah, blah, blah, blah, blah, blah, blah, blah, blah, blah.” And like, wow, you have a passion other than just this job, which I like. I want you to have something you care about other than just the job, or telling me that you want just the job. And then on the flip side, I’ve heard stories like, “Oh, man, well, I’d quit my job. And then I would go live in New Zealand, and I would live in this really big house,” very kind of self-centered.
And we all have dreams. We all have things we want to spend money on, but it’s really evident very quickly. Do they view the world through the lens of themselves and what they care about all the time? Or do they view the world through a larger lens? And that’s been a great kind of mechanism to see what people care about.
Jay Goltz:
That was a West Coast thing done nicely, the whole self thing. [Laughter] Got it. Okay, and I’ll give you the Chicago version. Now, I want four things: B-A-T-H. B, do they buy into the concept? I want to ask them, “So tell me, what did you do in your last job? Tell me a difficult situation you had with a customer? How did you deal with it?” And you can tell—that one’s very revealing: “Well, listen, sometimes customers can be difficult.” Versus, “Oh, customers are jerks, and blah, blah, blah. I want honest answers. So that usually gets me something good. A is able: Can they do this job? Did they do it at their last job? And try to find out what they were doing.
Here’s a big one: team player, which I have a very specific definition of. I want someone to be honest. Just tell me what’s on your mind. I always say to them, “Listen, I’m giving you authority. Ask me anything you want about this company. Ask me a question that when you go home, when you tell your friends, they’re gonna go, ‘Oh my God, did you really ask him that?’
Loren Feldman:
How does that indicate whether they’re a team player or not, Jay?
Jay Goltz:
Because you can tell if they’re comfortable having an honest conversation with you, which a lot of people aren’t. And this is the one that brings it up. “So tell me why you’re looking for a job?” “Well, it’s just time.” And then I say, “That sounds like a lot of bullshit. What does that mean, ‘It’s just time?’ I mean, did you get fired? I guess I want to hear why you want to leave your last job. Tell me what is it about your job that you want to leave? And I want an honest answer.”
And I tell them that. “Perhaps you’ve read articles or talked to people who say, ‘Don’t say anything.’ I’m telling you, that’s not how I operate. I really want to understand why you want to leave your job. Do you have a bad boss, or they’re not paying you enough?” And people will usually let their guard down and tell you the truth. And I find that to be a tremendous indicator as to what am I getting myself into? Because whatever they’re saying about their last boss could be true about you. Or maybe they’ve got a legitimate reason for leaving.
And then the last one is, I need people who are a little hungry who need to work instead of just wanting to get out of the house. And I’m not the kind of place where they’re working 60 hours a week, but I need them to work their 40 hours. And like I said, I’ve gotten way, way better at it than I used to be.
And then, another piece from what I’ve learned talking to lots of entrepreneurs: the reference check. Can’t emphasize it enough. You are asking for it if you don’t check references. Now, Shawn, I think you’ll agree with this. Nine out of 10 times, kind of a waste of time. They tell you good stuff, they work out. That one out of 10? Oh my god! This person must not have a lawyer. They just told me, “Oh, that guy. He’s a drug dealer.” I mean, people say stuff. I think to myself, “Have you never been told by a lawyer that you shouldn’t say stuff like that?” But they do, because I’ve learned people do not want to lie for people on a reference check. They just don’t want to do it.
Shawn Busse:
It’s true, and they speak in coded language, too, because if they know the law, they know they need to tread very carefully. But if the person is a great employee, they will go out of their way to tell you that over and over again.
Jay Goltz:
Absolutely. That’s the point. So I call Costco. This woman was going to work in my flower department, and I called the guy, and I asked about her. And I forget what he said, but he says, “I don’t want to elaborate.” I thought, “Oh, great.”
I swear this is the truth. She comes in for another interview. I said, “You know, I have to tell you, I called your reference. It was a little troubling. He said he didn’t want to elaborate.” And she blurts out, “Yeah, I’m difficult to work with.” So you know, I’m looking for honest. “Great. When can you start?”
Shawn Busse:
I think something that’s really important, to what Jay just said—and I’ve been thinking about this, too—it’s like, you talk about asking experiential questions. You know, “Tell me about a time you did this.” I think that’s really critical. And I also think it’s really critical that you’re evaluating, “Can they do the work? Do they have the skill-set?”
And so my lottery question is also a lot like my sports team question. I ask people, “Pick a sport you’re familiar with. It’s a team sport. You can be any position you want. What position would you play?” And that tells me a lot about how they think about themselves, how they see teams. So these are like totally different paths. Whereas I have other team members focus on: Can they do the skills? I’m looking for persona and values. And both of those are really important things.
Jay Goltz:
Okay, so if you were interviewing me, and you asked me that, I would say to myself, “Oh, please. Stop.”
Shawn Busse:
Well, yeah, Jay. You’d make a terrible employee. [Laughter]
Jay Goltz:
Which is why I’m not working—I quit. I quiet quit. You can’t fire me. I quit!
Shawn Busse:
I wouldn’t hire you in the first place.
Jay Goltz:
Yeah. All right. I’m glad we’re on the same page with that.
Shawn Busse:
No, just even your response to that, right? It’s like, that’s why you’re an entrepreneur.
Jay Goltz:
Yeah, no, I’m sure that’s true. I just don’t want to do a sports analogy. No, yeah, I’m sure you’re right. I’ve taken back my resume.
Loren Feldman:
I want to ask you both one more question, which is this: Has your thinking about making a counteroffer to an employee who’s got an offer somewhere else changed at all? I think people traditionally have not liked to pay people to stay in their jobs. But I’m wondering if that has survived the pandemic.
Jay Goltz:
I haven’t had one example of that. I’m telling you, I went through a few people, but it was mostly by choice. No one’s come up to me. I haven’t had someone quit who’s taking more money somewhere. And I don’t think in 45 years I’ve ever done that.
Shawn Busse:
I’ve never been asked, and I wouldn’t do it. Because fundamentally, if somebody is unhappy with their compensation here, I would want them to talk to me about it. And I could look at myself and say, “Have I created an environment where they’re comfortable talking about it?” But that whole thing of somebody’s taken a job or an offer and then they come to you with that offer? Man that is just a freakin’ landmine. They’re gonna leave you eventually.
Jay Goltz:
Yeah, I think statistics have shown that. But I have to say—this is just my own little experience—I have not had a lot of people quitting for more money. And I think if you pay people properly and appropriately, they shouldn’t be leaving for money all the time. Unless, if you’re in the computer business, I’m sure that you couldn’t control that. But like any normal old-time business like mine, I have not lost a lot of people over the years for that.
Shawn Busse:
Yeah, I think if you’re reasonably in the market, if somebody’s coming to you with a competing offer, you’ve got bigger problems there. If they come to you with a competing offer, and you really are underpaying them in the market, then maybe it’s worth examining that issue.
Loren Feldman:
All right. I’d love to keep talking to you guys, but I’ve got an appointment to sell my dog. I have to run. [Laughter]
Jay Goltz:
Consider renting the dog instead. You can have an ongoing annuity for that.
Shawn Busse:
Loren, you can travel to pity city, but you can’t live there.
Loren Feldman:
My thanks to Shawn Busse and Jay Goltz, and of course to our sponsor, the Great Game of Business, which helps businesses use an open-book management system to build healthier companies. You can learn more at Greatgame.com. Thanks, guys.
