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I first heard Dave Kline speak at E-commerce Fuel Live in New Orleans a few months ago. It was an awesome event, and Dave's talk was a highlight for me.
Dave is a seasoned leader with over 20 years of experience working with teams at Bridgewater and Moody's. Dave shares his candid take on how to level up our leadership skills, spot great talent, hire the right managers, and build a team that drives business growth and success.
Key topics and lessons discussed:
- The importance of simplifying processes and avoiding unnecessary hiring by focusing on the most critical problems in your business.
- How do you identify the right roles to hire for and avoid compromising on character when bringing in new talent?
- The benefits and challenges of promoting from within versus hiring external candidates for management positions.
- Strategies for maintaining a flat, collaborative culture while introducing a management structure to support business growth.
- The significance of setting clear incentives and codifying cultural values to encourage desired behaviors and decision-making processes.
- Creating rituals and intentional moments for feedback and idea-sharing to counteract the potential drawbacks of a hierarchical structure.
- Balancing the measurement of managers' performance based on team output and the sustainability of the team they lead.
- Embracing the concept that being a good manager now requires leadership skills, such as being kind, direct, developmental, and coaching team members to reach their full potential.
Here are a few insightful quotes from the podcast:
"Leading is just being kind and direct. Leading is being developmental and coaching. Leading is helping people be better than they, maybe themselves, even believe they can be."
"People will cut a lot of corners for short-term gains, and you end up eroding the long-term sustainability of the team."
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Chapters:
(00:00) Introduction
(02:35) Dave’s Background at Bridgewater
(17:13) Minimum Viable Management Explained
(20:12) Common Hiring Mistakes to Avoid
(35:54) The Benefits of Maintaining a Flat Organizational Structure
(43:01) Strategies for Creating Clear KPIs for Managers and Teams
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Show Notes:
- Dave Kline (LinkedIn)
- MGMT Accelerator
- MGMT Playbook
- Bridgewater
- Principles
- Ray Dalio (LinkedIn)
- Moody’s Analytics
- ECF Live
- Andrew Youderian (LinkedIn)
- Working Genius
- Patrick Leovinci (LinkedIn)
- Radical Candor
- Kim Scott
- ECF Live
- Adam Grant (LinkedIn)
- Give and Take
- Snowflake
- Frank Slootman
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Connect With Brett:
- LinkedIn: https://www.linkedin.com/in/thebrettcurry/
- YouTube: https://www.youtube.com/@omgcommerce
- Website: https://www.omgcommerce.com/
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Past guests on eCommerce Evolution include Ezra Firestone, Steve Chou, Drew Sanocki, Jacques Spitzer, Jeremy Horowitz, Ryan Moran, Sean Frank, Andrew Youderian, Ryan McKenzie, Joseph Wilkins, Cody Wittick, Miki Agrawal, Justin Brooke, Nish Samantray, Kurt Elster, John Parkes, Chris Mercer, Rabah Rahil, Bear Handlon, Trevor Crump, Frederick Vallaeys, Preston Rutherford, Anthony Mink, Bill D’Allessandro, Bryan Porter and more.
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Other episodes you might enjoy:
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Transcript:
Dave:
But my real goal was I think you could manage excellently with eight post-It notes.
Brett:
Well. Hello and welcome to another edition of the e-Commerce Evolution podcast. I'm your host, Brett Curry, CEO of OMG Commerce, and today we are diving into what could be the most important topic for the future and the success of your brand. We're talking about leveling up your leadership, how to spot great talent, how to hire good managers, how to build a team and lead a team. So we're not going to get into the tactical business growth stuff on how to improve with Google ads or YouTube ads or Facebook or things like that. But this will permeate every aspect of your business, impact your growth. Now, if you want to sell your brand one day, which I know a lot of you do, this is going to be critical for that as well. So my guest is Dave Kline, and Dave has 20 years experience leading teams. He spent 10 years at Bridgewater, he was at Moody's, so he worked for Ray Dalio's team at Bridgewater.
And I first met Dave at E-Commerce Fuel Live, Andrew Ian's event in New Orleans. We're both speakers there, got to hang out at the speaker dinner and really just loved his content. It was one of the highlights of that entire trip. And so we're going to unpack some of his wisdom, as much of the wisdom as we can cram into 45 minutes or so here. We're going to do that. Dave, now he and his wife lead management accelerator and they've worked with over 800 leaders, built a community of 200,000 leaders. And so with that, Dave, welcome to the show man, and thanks for coming on. Hot Damn,
Dave:
Brett, first of all, you must be a terrible manager because you just raised the expectations on this podcast so high. There is no way that I'm possibly going to clear that hurdle, but I appreciate,
Brett:
I'm a hype man, dude, that's what I do. Have you ever looked at the working genius? Patrick Lencioni and his framework
Dave:
Know, I know some of his other stuff, but I don't know the working genius.
Brett:
Yes, it's pretty cool. So anyway, there's one working genius that's called the Galvanizer. Someone just galvanizes the team and motivates the team and that's my genius. So if the whole marketing thing owning an agency, if that ever fades, I'm going to be a hype man. That's alright.
Dave:
You're my Michael Buffer. Let's do this.
Brett:
Awesome man. Well, so love to kind of dive into your background. I know a lot of probably Ray Dalio fans out there. I confess to you, I read a lot of the book that book Principles man, that is a tome man that is not an easy read, but it's rich with great content. So everybody knows Ray Dalio. What was it like though working part of his team working at Bridgewater? What was that like?
Dave:
It was pretty wild. I mean I spent a decade there and honestly probably one of the stories that catches a lot of people's attention was before I even showed up, and I know we'll talk about recruiting a little bit later. So I did my first round interview there and three different interviews. The third one was with two people, including a recent undergrad and sort of a mid-level manager. And the topic was, should there be a market for human organs? And they're like, okay,
Brett:
You're applying for a management job and they want to know, should we be harvesting kidneys? Yes,
Dave:
Well should there be a market to trade kidneys? And they look at me all seriously. I'm like, okay. They're like, we'll be back in five minutes to discuss. And I'm like, well, what's the rest? What else is there? The direction was should there be a market for kidneys? So we then spent the next hour debating it. I had to make my case, they were taking the counter. Part of the reason they have a junior person in there was to sort of be needling and obnoxious. Could you take feedback from someone who might be 10 years your junior, but twice as smart as you? And if I'm being honest, I sucked at that process. You do not want me making the case for human organs if we need one. And so anyways, the day ends, I'm debriefing with my recruiter and he's like, how'd the day go?
And I was like, I crushed this interview. Love this guy. Great conversation here. I think we're really aligned. The organ market one, I sucked. Here's what I could have done better, blah blah, blah, blah. Here you go. And I thought we were done. You don't bomb an interview at Bridgewater and keep going. And so the next day I get an email and it was my feedback on the interviews. They were now transparently sharing all the raw unvarnished thoughts from the three interviewers and it says they want you to come back because your self-assessment and their assessment of you was identical. So I had this brutal
Brett:
Feedback. This guy is self-aware is one key thing they identified.
Dave:
And so it was just interesting to sort of see them showing versus telling, right? That it wasn't necessarily that you had to be perfect all the time, but and understanding how you fit into the overall machine, where you would call your own number because you're strongest versus where you'd rely on your peers because they're et cetera. They valued that way over my ability to decide whether livers should have futures anyways. And that was before I even locked in the door. And then 10,
Brett:
Give us your top 10 headlines for selling human livers go. But it turns out their thing wasn't so much, how are you going to defend that? Although I'm sure they were looking at how quickly you think on your feet and how can you be persuasive and how can you be logical and handle criticism and stuff. But it was almost just as much the feedback and can you handle the feedback. I know that was a really rich part of the culture there is everybody gives and receives feedback. So yeah, maybe it was as much, it sounds like it was just as much on the feedback portion as it was how you did it. It
Dave:
Was, and I tell this story all the time, a lot of people dunno, but we had a tool in-house where everyone had an iPad and you could rate each other real time and it showed up on the other person's iPad and not only the other person's iPad, but it showed up on, well, it's effectively a Twitter feed of feedback to anybody in the company. So if you're bored at lunch one day or if I'm bored and I'm just curious, what's Brett been up to? Can just go into your profile and be like, whew, Brett had a tough podcast this morning and
Brett:
Nobody liked that intro. Dave liked it, nobody else did. Yeah, exactly.
Dave:
Which while you're in it, it feels like a fire hose, right? You're just constantly good, bad, good, bad. It's so overstimulating, but it's also working five years in every year. So many other people who are smart and see the world differently cheering you on, calling you an idiot when you're an idiot. But you just get really clear and get really good at metabolizing that and saying, how can I use this to be better so I wouldn't trade it?
Brett:
Help me understand this. So you are leading a meeting, right? You're standing in front of a group, you're leading a meeting, you've got your iPad, other people are rating you in real time on what they liked, what they didn't like. This was convincing, this wasn't, you really didn't handle yourself well here. That joke was terrible, whatever. You are getting that feedback as you go or you're unpacking it later
Dave:
In the meeting there's a grid and down the left side is givers and down across the top are receivers. And so there you would be as a receiver and you would just see this red column just like, because the expectation is if you were in a meeting, you were giving feedback. And a lot of ray's belief is that we constant, everything was another one of those. Everything was a case to be studied and learned from. So a lot of times he would have a meeting with six participants and invite 80 observers. The only expectation of the 80 observers was to constantly give feedback as a way to test whether they were seeing the things the same way. So you could make one gaff and get 80 people hammering you on that one thing within 30 seconds.
Brett:
Dude, that would be so nerve wracking. Did it take quite a bit of time to get used to, okay, this is not just a meeting, this is a meeting plus a performance I've got to be on because I'm going to be judged in everything that I say here.
Dave:
It did. I would've said it was funny. You're making me harken back to a story I hadn't recalled in a while. First week there I'm in a meeting and I don't know, I think I checked my Blackberry or something because it was kind of a meeting for context, but I wasn't an active participant and my boss took me aside and he was like, I don't think you understand the expectation of a meeting here. And I was like, okay, well what's the expectation? He's like, the expectation is you're so mentally engaged actively that the person running the meeting could leave and you could step in and no one would notice a difference. And I was like, okay. And then realizing super meeting rich culture, because a lot of that culture was premised on this idea of, well, we're trying to uncover alpha. Alpha is a highly competitive zero sum game.
And so the best way to do that is to get really smart people with dissenting points of view and have them debate until we figure out what's true. And then that permeates everything. So it's like a meeting rich culture heavy in debate. The expectation is I could run any meeting that I'm in, if someone stepped out and my wife would talk about it for the first six months, I'd come home and she'd be like, how was your day? I would just be like, I don't think I have another word in me. You know what I mean? I don't have, I've been on for 12 straight hours.
Brett:
I can't think. I can't process, I don't remember my name. We're going to have to talk
Dave:
Later. So the good news is by the time this app shows up with all the red dots, you're already used to playing every meeting as though as your last, so a little bit performative, crazy. I dunno. Just another piece of the puzzle.
Brett:
So interesting. So what of that do you think is applicable to most businesses? Because some of that I think would borderline be unproductive impossible in a lot of organizations. What translates, what doesn't?
Dave:
Look, I think I've talked to a lot of folks who've spent time there and we're all now in the world working in different domains, working for different companies, running our own companies. The consensus seems to be that 65 to 70% of it sort of seems to be the number was pretty broadly applicable to some degree. There's this one idea that we should have shared mental maps and say, okay, well that's Bridgewater code, but what does that actually mean? It means if we're going to accomplish something together, we should at least agree on the core concepts of what we're trying to accomplish and how we're trying to accomplish it. And we should decide what that looks like before we do it. And then that way we both know what we're going to go do. We would just shorthand that as clear expectations, good communication, but there was a lot of rigor put into it.
There was a language around it, there was value. So I'm like, oh, well, that you tell it to most CEOs and they're like, oh, I'd more of that in my company. I'd like my team to have the shared mental map so they operate together better. So you're like, oh, that's exportable. And then if you ask people, well, do you give feedback was prevalent, should it be the 11,000 pieces of feedback that I got publicly put inside of every meeting? Probably not. But if you ask again, most CEOs, most executives on a scale of you guys give way too much feedback to you. Give way too little. Almost everybody's over here 100%. And even in the feedback they give, they have a tendency to sugarcoat it, couch it, Hey, the famous sandwich.
Brett:
I've been guilty of that one before, Dave, of the, Hey, you're doing really great here. This kind of sucks, but you're really super great over here too,
Dave:
So bad. So I think that part is also exportable that the test, a lot of the leaders we'll work with will say, well, I want to be able to give feedback more, but I'm a really empathetic person. I'm a really kind person. I don't want to be seen as mean. And so I hold back or I don't tell 'em the whole thing or I surround it with a lot of other stuff. And I said, well just play a game with me for a minute. Imagine you're working for somebody and you are constantly coming up short in some way and they notice, but they don't tell you and then you come up short again and they notice and they don't tell you. And right now they're forming a picture of what you're like. And then three months down the road, that picture has hardened you are incompetent and incapable of this thing that they're imagining they've never told you once, but now they don't even have this observation that you could have a conversation about. They've decided and then they share that information with you and you're now mad at two different things. One, why is this the first time I'm hearing of it? And two, you are the person who's supposed to be most invested in my career after me and you're not even willing to tell me when I'm screwing up. Does that feel kind? And then everyone's like, well no, that's not kind at all. And I'm like, well, that's what you're doing.
Brett:
Yeah, it's so good. It's so good. I love, there was a quote from Steve Jobs, I actually heard it in the book, radical Candor, which actually is a funny story that you were just telling me before we hit record, which I want to explore in a second. But there's this quote from Steve Jobs where he was talking to Johnny Ive and the head of design and stuff, and Steve was like, Hey, this sucks or whatever. He probably used more colorful language than that. He like Johnny W told your team. And John was like, well, they're working so hard, they're overwhelmed. I'm empathetic or whatever. And Steve said, no, Johnny, you're just vain and you want them to like you, which is pretty direct. But I'm like, yeah, that's probably true. In a lot of cases we definitely, I want people to feel loved and accepted and things like that, but there's also probably an element of that that I'm just being vain and I just want to be liked, right? But we have to get past that and say clear is kind and giving feedback is kind withholding it is actually the
Dave:
Opposite. It's funny, I thought the quote was going to be different. I thought the quote was going to be, why are you letting them work so hard on something that sucks? Do
Brett:
You know what I mean? That's good too, actually. Yeah,
Dave:
Because we all want to do things that matter. And so please don't hold back and tell me I'm pouring myself into this thing that is terrible. I'd rather know as soon as possible so I can actually pour into something that's going to
Brett:
Be used. Totally. Yeah. Really, really great feedback as well. So yeah, we had Steve Jobs feedback, Dave Kline's feedback. You mix those together and man, got some powerful stuff there. So yeah, I was telling you before you record, I'm a big fan of the book, radical Candor by Kim Scott. Read it multiple times. Our team has gone through it. We talked about it because we tend to be, we're a work culture. We're big, we hire on culture, we talk about culture a lot. We tend to be too nice. I think as a culture that probably starts with me. I'm sure it starts with me. We give feedback. We need to give more. And so we've kind of gone through some of the trainings and stuff, but I believe you got maybe into a bit of a Twitter, Twitter feud or a back and forth with Kim Scott. So we got to hear this.
Dave:
We sorted it out. We sorted out. Eventually. I had have to dig it out. It was a couple of years ago, I wrote a thread when threads were the thing, and it was very much about feedback and very much premised on my time in Bridgewater. And then at the end, I think I included a framework from Ray, and then the next one I included a framework from Kim and sort of tagged her and just sort of, I think for most people the truth is somewhere in the middle I would say the primary, the difference between the two Ray is probably more extreme. Where he would actually thought, and you'll see this in the book, sometimes it was necessary to dial it up that he called it, put some pepper on it. Or if you have to choose between function and style, choose function, it's all very much like it's true or it's not true. It doesn't even matter if I think about how my words are, I just transmit it up to you metabolize. And I would say I didn't really land there because the thing that always was in my mind, managing teams, even within that organization is it's not about my transmission, it's about their reception. The reason I'm giving feedback is because I want them to improve in some way. And so if I do it in such a way that they shut down, then I'm wasting my breath and I'm wasting their time. You missed
Brett:
The point. They can't metabolize that feedback and now you've just wasted your time and yours.
Dave:
And I thought radical candor is a little bit more of that balance between challenge directly and care. Personally. Funny, I had it in there, but she went line by line of my whole thread and commented on each individual one to be like, yeah, I'm with you on this. No, you're an idiot here. Back and forth. And we, it was this crazy Christmas tree. It's like
Brett:
Dave, I'm saying idiot, but it's not mean. It's clear.
Dave:
And I care. I care personally. I care about you even though you, yes, I care about you Strange Twitter man, but all as well ends well. So
Brett:
Yeah, it's awesome. But it's just really cool that you got into a back and forth Twitter debate or discussion with Kim Scott, which is awesome. So let's dive in. Let's get practical here. So listening to your talk at ECF Live, loved it. You introduced a concept that I'd never heard before called Minimum Viable Management, heard of MVPs, minimum viable products, but never heard of minimum viable Management. What is that? Why is that a thing? Kind of lay that out for us.
Dave:
You haven't heard it? I think I made it up the night before. I'm either, oh, did you really? Yeah, I'm either the best of the worst.
Brett:
That's
Dave:
Awesome. But
Brett:
Hey, okay, so we got to pause for a minute. So I'm notorious, I get to speak a lot. I say a lot, 7, 8, 10 times here or something like that. I always, always, always 100% of the time tweak my deck the night before and the morning of when I speak every time, I don't know why. I'll plan it out. I get there, kind of read the audience, or I'm more inspired when I'm in the moment. I always change it. It drives organizers crazy, but I feel like I deliver. So it's okay.
Dave:
Well, I I'm glad to know that because sometimes you come in the night before or the day before you get to start chatting with some people. And I was chatting with a bunch of the folks at ecf and the thing I kept hearing was this somewhere between reluctant and accidental manager. A lot of people started to side hustles and then became a business, and the business had employees. And all of a sudden they're like, I have all these people who are responsible running team, be managed, and somebody wants to be promoted and someone's not good. I might have to fire them. And so there weren't that many people being like, I want the all singing, all dancing masterclass of management. It was like, what is the least I could do to manage well? And I'm like, oh, okay. And I'd be like, well I, I'd probably do these five things.
And they're like, okay, but if I could only do three and then I'd be like, okay, well maybe these three. And they'd be like, okay, but which one? And that's when the light bulb went off. And I'm like, if I really had to strip it down and say, I think you can out manage 90% of people if you did these things. And I just sort of jotted it down and on eight post-it notes everything from should I hire to what should I hire to, how do I hire them to then once I've got set the expectation, give them the work, oversee the work, give them feedback and decide if I need to hire more. That was sort of the super simple version. We can click into any of those where it's helpful. But my real goal was I think you could manage excellently with eight post-it notes.
Brett:
Yeah, isn't that great? And I do think the ability to simplify is such a rare skill and a valuable skill and I think it takes more brilliance to simplify than it does to make things more sophisticated or more complicated. And so I want to definitely double click on a few of those things. Can't unpack all eight, although I wish that we could. But let's talk a little bit about the hiring process. And maybe you want to dive into, I'm evaluating the need because I know that's something you talked about in the event, or I'm actually trying to choose the right person. But where do you find brand owners, CEOs or just company owners, where do they make mistakes when it comes to hiring managers?
Dave:
Perfect. I'm going to go one step back. You said something that connects to the very first one too, which is it takes more elegance, it takes more thought, it takes more courage to simplify than to add. And so even in that first step, which I think most people would skip, it's avoid hiring. I think a lot of us naturally we run out of capacity in our automatic instinct. Your first instinct is lemme hire somebody, lemme get some help. And I'm trying to get people to flip it and say measure of last resort. And so what are the alternatives if that's your last resort? Well, one measure is to stop doing some stuff. We worked with a company, I'm an advisor for teams overwhelmed. They're growing gangbusters. The word burnout was popping up way too often. And so we sat down and just like, well, what could we stop doing? And the first place I started was like, lemme see your client book and show me profitability by client and effort by client. And what you saw was a very common phenomenon, which was some of the most demanding clients were unprofitable. And I was like, great fire them. And it was like heresy because these were like, this company
Brett:
Was, can't do that.
Dave:
Yeah, the company was now eight years old, but these people have been around a long time. There was loyalty. What do you mean fire a customer? I'm like, you're literally losing money them by them being
Brett:
Losing money and burning at your team. Why are we doing this?
Dave:
And I was like, and you don't have to be cute about it, you can fire them with price. So just take that little tranche of 10% and double the price. And what ended up happening was most of them left and the remainder that say were now profitable. And all of a sudden the team got back like 20% of their capacity, they were making more money. And they're like, oh. And I'm like, you didn't have to hire
Brett:
Anybody. So brilliant. And what's so cool, they made me think of a Peter Drucker quote that I think you'll like if you haven't heard, you probably heard it. But he likes to use this test of, Hey, knowing what you know now, would you hire this person, start this project, keep this client, take this client on knowing what you know now, would you do those things? And if the answer is no, then why do you persist? So if now knowing all the details, why are you continuing to go down this path? Just make the
Dave:
Decision a hundred percent. And then there's all some of the common pieces beneath that. So maybe you can't quit things, but automation can you streamline, et cetera. And it's shocking the number of things that just because of that natural tendency to add is sort of build up barnacles on the front of the boat. And occasionally as the leader you just come in and scrape 'em off. And let's get back to the basics and you'll be shocked sometimes that's all it takes. I've seen countless teams where actually the move to add capacity was to remove the one person who was underperforming and toxic.
Brett:
Wow. So rather than hiring, it's actually getting rid of somebody to free everybody else up mentally, emotionally, time
Dave:
Wise, it's one of those people, when you let them go, the rest of the team is like, what took you so long? And so anyways, I know your question was about actually finding good talent, but it's more the
Brett:
First step is do we actually need somebody or what else do we need to change? Maybe there's just a whole bunch of stuff we need to stop doing. Maybe we've overcomplicated our lives so much that we're spending 30% of our time checking off tasks instead of doing actual work
Dave:
Or whatever. Exactly. Then I think when you're like, okay, yes, I've done all that, but I do need to hire, I'd say probably the most common mistake is people hire off what I'd call a very squishy visualization. They haven't really taken the time to say, what is the system that I currently have? What is the most important place for me to put new talent? And I might want to, the distinction I make is every company has a bottleneck at any point in time. I think I may have told the story at ECF, but we sat down with these people who are sort of in the training consulting, same business we are, they're 20 years ahead of us. And it was over lunch and he's like, what's the plan for the next year? And I was like, oh, we're going to social media and newsletter and courses and programs and coaching and speaking.
And he was like, yeah, what if you had to get rid of one of those? And I was like, oh, it's all interconnected. It's a flywheel, it's beautiful. He's like, yeah, yeah, yeah, but humor me. It's just lunch. I was like, well, I guess I'd cross this one out. And he is like, what? Okay, but if you had to get rid of another one. So anyways, where the story goes, we cross out everything but our cohort program, which is kind of our flagship, it's where we impact the most people. It's very profitable for our business. It's great. And he was like, well, how hard is that? You teach that full-time for a month? And I was like, oh no, we teach for four hours a month or four hours a week for a month. And he's like, oh, so you could do two a week.
And I was like, yeah's, like that's actually only eight hours. He's like, you could probably do four a week. And I'm like, I could, I guess. Yeah, it would be a lot, but I could teach four times a week. And he was like, so your business problem is demand. He's like, do you have 200 people waiting in line to fill up four of these next month? And I was like, well, no. And he was like, so the only problem in your entire business is you don't have enough people who want to take the course. And I was like, how dare you? How dare you dare you
Brett:
Make that so simple and
Dave:
So clear over lunch. I bring that up.
Brett:
I think you
Dave:
Even, sorry,
Brett:
Go ahead. Sorry.
Dave:
No, I bring it up because it's so easy to miss in your own business. Everything that I had was just elaborate, beautiful plan, flywheels and all the right things. And in 20 minutes he sort of reduced it down to you only have one problem to solve and all the rest of the problems you're trying to solve don't matter until you solve that one problem. And so I think that to me is like, can we all get that ruthless about our teams, our business and say, what's the one problem? And then am I going to solve it by freeing up somebody I have to focus on it? Or am I going to solve it by bringing in someone who has the expertise to solve it for me? And that's how I, yeah, it's so
Brett:
Good. I think sometimes we just jump right ahead to, okay, well give me the tips and tricks to hire somebody or what's the best tool or the best website or the best whatever to hire somebody. And you're like, well, wait a minute, do you need to hire someone at all? And then you're like, well, okay, but you're going to hire someone. You sure you need to do that? But what is the problem you're trying to solve? And get super, super clear on that. Take a few more steps, take a little more time in the beginning because man, this is one of the biggest decisions you make. That's one of the biggest expenses you make. You get this wrong. It's so hard to unravel when you've got the wrong person. Even the process of firing them or letting them go is really painful and really hard. And you got to make sure everything is buttoned up, especially as you get bigger. We've over 50 total team members. You got to be careful when you fire someone. So getting this decision right man, you better take the time upfront to make sure you're crystal clear. So love that. Other mistakes you'd point out,
Dave:
I think the other one is you sort of work backwards from your point of like, okay, you had to fire the person. Why didn't it work out? Almost? I would say the 70%. One is not, this person didn't have the skills or the credentials. It's this person didn't fit to the culture, they didn't align to our behaviors, they didn't operate the way we operated. And so often when people are hiring, it's from this point of desperation, it's like the team is burning out, everyone's overstretched and you're like, I just need the capacity. And they make the trade off, they trade off. I need to bring in the credentials and I'll give up on the character. And every time I have yet to make that move and be surprised on the upside, I always pay for it down the road. And then I'm in that expensive death spiral of managing them out, having to do that thoughtfully, start the recruiting process over all, it's six to nine months when you get that wrong. And so I dunno, the other thing I encourage people is to be very clear what are the behaviors that are non-negotiable for your team? And then B, devote sufficient amount of time to assessing for it. And then C, don't compromise. If they are showing you signs in the interview when they are trying their absolute hardest to convince you to hire them, it is not going to magically become better when they come in two weeks.
Brett:
Totally. One of the things we've adopted, and this is not mine, I heard it on a podcast, I think, but if it's not a hell yes, it's a no. And so we've tried to let that bleed to hiring as well. And one thing we've done pretty well is hire for culture. We have very clearly defined culture values. We talk about them a lot. So we hire for them, we fire base on them, things like that. But on occasion, there have been a few people, and I'm thinking of one very clearly where this young lady, she applied, she kind of impressed me. She was very smart, she impressed my COO. But the two team interviews she had, they were not a chance, do not hire this person for these reasons. We're like, no. And this was me being like, no, I've got a pretty good pulse on things.
I've got a pretty good read on people. I understand people. She's going to be a winner. And so we ended up one girl who's been with us forever, she's like, okay, I want, if you end up firing her, I want you to buy us a cake. And so we made this wager and we had to fire her and it worked out just as the team predicted. And so what that's taught me is there's several checkpoints along the way, so our gut is right a decent amount of the time. But if I had just listened to my team and just said, okay, you're right. They're like, these things are impressive, but you're right. Or I'm trusting, right? So this is going to be a no. Anytime I've tried to force through that, always bad things happen. Always.
Dave:
There's this Adam Grant wrote a book give and take, and there's this amazing study he cites in there. It's about this school in California. And it just ties to this exact point where this company comes in and is like, oh, if you let us interview all of your students, we can identify the high potentials so that you can appropriately support them. And so the school's like, great, we we'll totally do that. They go through the thing, they come in, they deliver the list to the teachers. They don't tell the kids who the high potentials are. They tell the teachers the year plays out, they come back, they look at the test scores, engagement, happiness by every dimension. These kids were thriving. They had cracked the code, they had been able to predict who was high potential and then they revealed the methodology for identifying 'em. And it was a random selection. The only thing was yes, the only thing that was different about them was the teachers believe,
Brett:
Wow, the teachers
Dave:
Shifted. The teachers started to assume, oh, this high potential student didn't get the explanation. It must be me explaining it, not their ability to retain it. And so they gave them the benefit of the doubt they operated differently, et cetera. And so I share that because in some ways this ties to your team. As soon as your team had decided that this was not a high potential hire, it had basically been decided.
Brett:
Interesting.
Dave:
And so to your point, it's like if it's not a hell, and again, I'm not saying it has to be consensus, you don't have to have every single person, but it sounded you like you had a couple strong yeses and a couple vetoes going on, and there was
Brett:
A lot of nos, like an overwhelming amount of nos except for me and my COO and we're like, Trump card, it didn't work out. But other hires don't have to be unanimous, but it does have to be, there's strong
Dave:
Support here. Yeah, we said two. Hell yes, and a novito. I didn't want anyone to say absolutely not, but I would take maybes and yeses as long as there were two people who would fight over the person.
Brett:
Yep, yep. Love that. Love that. So good. Cool. So one question that comes up a lot and something that we've even wrestled with, and as we grow, we're looking at different things, but you're hiring a manager, do you favor promoting from within? Do you favor going out and finding the expert? I know for some teams it's like, well, there's only me on the team, so I've got to hire externally. But if you've got a team and you've got a bench, and do you develop talent? Do you recruit talent? Is it both? What's your opinion?
Dave:
I hate to say it depends, but it does depend a little bit. Let's call it all things being equal. If I could promote from within, I would promote from within. I think that for a couple of different reasons. One, there's just sort of the probability of success. You already know that this person fits into your company. You already know they work well with the team. Lots of things that no matter how much you vet an external hire, it'll be a way lower fidelity. And if you just do math, the expected value of that new hire is lower. The second thing is I think it just creates, if you want to have a higher performing organization, you want to have this belief that I can be rewarded, I can grow, I can thrive. And you could say that all day long, but if you're not showing that, it doesn't matter.
And so I get the benefit of the rest of the team from them seeing that happen. The reason I say it depends a little bit is I think the common mistake is to say, who's my highest performer in whatever function it is, they should become the manager. And they may be a high performer for capabilities that are different than the capabilities of a manager. And a lot of times if you get those really high performers, to be honest, they don't want to manage. They don't. They've developed a pride of craft in software development and graphic design and whatever it is. And we're saying, take half that time off, succeed only through other people, devote yourself to their improvement, their growth. And you sort of lay that out and you just usually see the body language. The people who genuinely want to lead and manage are like, yeah, I know. And the ones who don't are kind of like, I would endure that for the race.
Brett:
Well, it's kind of like, yeah, you take the best salesperson, you make them a sales manager, you take the best coder, you put them in charge of the development department, and that often does not work. The best player doesn't often become best coach. It's a really unique skillset to lead people and manage people.
Dave:
And something that I see people do more and more is sort of say, well, how can I actually get both? And so you have this expert salesperson and you might say, well, there was something in my instinct of wanting them to be in charge. And it's like, well, maybe it's their approach. Maybe they have really high standards, maybe they're good at evaluate. There's things that they're
Brett:
Good at teaching but not good at managing or something like
Dave:
That. And so you could say, well, maybe I'm going to promote the manager and then I'm going to say, Hey, manager, this is like your subject matter expert and I want you to work together. You get to have more impact on the team because the subject matter expert gets to have more impact because their approach, their methodology, their evaluation cascades through and the manager gets to do manager things, people development and development plans and assessments and et cetera. And you can sort of make it where one plus one equals three. And so you don't even have to, I'm seeing more and more companies be a little more agile with how do you combine the capabilities as opposed to, I've got to be holding to a title, love that.
Brett:
Or, okay, this person's going to be the director, they're going to be the manager. So they have to have the entire package. They got to be the smartest, they got to be a teacher, they got to be a manager. That's pretty rare, pretty unlikely I would say. One question that I did not prep you with at all, but I know I can tell you're fast on your feet. So this is something we've been talking about a lot. How do we have managers in place, leaders in place, but also maintain a flat culture, right? Because it just seems like as we've grown, as I've watched other companies grow, things can become kind of hierarchical and then where people are disconnected and the person at the very top doesn't hear feedback from the rest of the team, how do you like to structure teams? Any rules of thumb or anecdotes on how do we put in place but avoid being this bureaucracy or hierarchy that really slows things down?
Dave:
I will answer, but let me ask one question to clarify. There's some inherent goodness you're seeing in a current flat hierarchy. What's the goodness you're hoping to retain while adding in a little bit more management?
Brett:
So I think the best parts of a flat structure is that ideas come from anywhere. And often the best ideas to improve our Google ad service, our Amazon service comes from the people actually doing the work. And so how do we make sure those ideas are surfaced and those ideas then are spread throughout the organization rather than a situation where the manager is expected to come up with a solution or whatever. And so I think that the collaboration and the more ideas coming from all over versus just from leaders
Dave:
And what's the badness you're trying to correct by having more managers?
Brett:
So just in my experience, and this isn't always OMG, just observations. Sometimes having managers in place slows things down. How can we, I'm trying to think of the saying, but if you have more marketing people, they want to have assistance and you have more salespeople, they want to want to add these layers to the organization, whatever. It seems like as we add managers or leaders, things become slower. The manager's like, Hey, my goal here is to create a really well-defined process well, but it's also to get this thing done for the client and then to make this thing work. So I think speed and still without the wheels coming off the bus speed, then how are we still accomplishing our mission and serving clients? So So collaboration on the flat piece is what you want to preserve. And I think speed and speed to innovate on the things we want to avoid with the hierarchy. Got
Dave:
It. Super helpful. I don't want to just give you the one size fits all.
Brett:
Yeah, I
Dave:
Love it. I think in that this is
Brett:
Live coaching, Dave, people are sitting in on a live coaching session, this is awesome.
Dave:
So look, if I'm in your shoes, I think, and you sort of pattern match to companies that have tried to do this. And again, I don't think that there is any optimization that gets you everything where we have the simplified communication and decision making of a three person company while having the structure and organization of a 60 person company. So there's going to be some trade-offs. I think as people get to this 50, right, around 50 employees, they feel this need. It's like the founder can no longer touch everybody and really understand each person Ray would talk about at that level is when he couldn't send gifts the holidays and know what people wanted anymore. So it's just very natural. So you need that to be in there so that people do have a go-to person who's caring about them, who's helping their career, who's helping them make sense of the bigger org.
I think the three things that you would look at to set that up well, and one will be incentives. And so you need to be careful about how you incentivize these managers. If you incentivize them competitively, then they're going to hoard things that give them power. And what gives you power in a knowledge business is going to be ideas. So if you want the ideas flowing very flatly, you can't incentivize them to sort of be in a winner take all you need to incentivize them to promote ideas and things like that. So I would think about one, what's the incentives that these new managers have? Two would be, and you sort of talked about, you probably already have this as I would just go back and make sure they support it. It's like what aspects and behaviors of your culture have you codified? So an example that comes to mind, snowflake, Frank Sluman was the CEO.
He took over and sort of helped them go through the scaling. He had done it two or three other companies, they added a value of go direct. And so the idea was even as we get bigger and create different fiefdoms, the first place you should go to make a decision is direct to your counterpart at your level in the other part of the organization, not up love that they thought when people didn't go direct, it was a break worth diagnosing. And so if you think about the transmission of information, and I'm an analyst and it goes up through my manager, to my vp, to my director or over to this director, back down through the vp, like holy moly, and even the semi, you're
Brett:
Never going to get an answer fast enough to do anything.
Dave:
And so the idea was they codified that. So people were very clear like, oh, when in doubt I should see if I could figure it out with my counterpart. And only then if we can't do we escalate and get help. And so I would look at how do you codify that within your values and then connected to that, I see this a lot with remote work, but I think the same thing. It's like anytime you have transformation, things that may have been happening organically, you have to reconstruct with intention. And so when people went remote, just take feedback as the example. You and I were walking back from a meeting, we're going to grab some lunch. I'm just like, Hey, I thought this part of the thing was great. I think you kind of missed the note on this. It's super casual and feedback's flowing and happening.
But it happens today and you and I are in two different countries and we finished the zoom meeting. That feedback has nowhere to go. And so I now have to intentionally create a moment where we're back together hopefully relatively soon after the thing, while it's high fidelity in all of our minds, but it's just the thing that could have been accidental now has to be on purpose. And so I'd say you need to think about the reason I was asking you what is the goodness you want to keep is because you'll probably have to put some sort of ritual in place to catalyze that goodness to push back against the hierarchy. Do you know what I mean? And so that could be
Brett:
So good, so good.
Dave:
So if it's ideas and you're like, I really worry that the best ideas are going to get tamped down, you're like, we have a ritual where every Friday it's a all hands and everyone comes with an idea. There's no hierarchy in that room or we're riffing fast. But I think if you have incentives, you have it codified in your culture and you have some sort of ritual to push back, you probably keep most of it.
Brett:
Dude's so good. I am looking at the time and I want to book another hour with you. This has been fantastic, but I do have one question that we'll kind of wrap up with you. I know you're up against it, I'm up against it as well. But how do we create clear KPIs, key performance indicators or measurements for our managers and for our teams? I do think a lot is tied into that, being aligned on direction, being able to give and receive good feedback. A lot of that ties to KPIs and measurements. And so how do you advise people construct those
Dave:
For measuring the quality of managers? That could be another hour.
Brett:
Lemme just throw the biggest question. The day out here as we're
Dave:
Nearing the, here's the two minute version, I would say whether you're setting goals, using OKRs, whatever else, there is probably some set of objectives you're going after as a company. I'm not a big believer in the perfectly cascading OKRs where someone else's key result becomes your objective and it's perfect because by the time you get that plan together, it's obsolete. But call it loosely coupled versions of that I'm a big fan of. And so if I'm then going to translate that to managers, I would say mostly I want to measure my managers on the output their teams produce. I don't know, that might be 80%, the other 20% might be the sustainability of the team they run. Do the people feel developed? Do they have good retention? Do they have good velocity, et cetera. Again, you could sort of play with the reality of your org and how you would weight those. But I find when people put too much emphasis on the craft of management, bureaucracy runs rampant. And when you basically say only the objectives of the team, and I don't care about how you manage people will cut a lot of corners for near-term gains and you end up eroding the long-term sort of sustainability of the team. So that's
Brett:
Love that. So it's to 80% output, 20%, how are you managing, how sustainable is the team that you're leading? That's brilliant. We will have to do part two because I've got a lot more questions, but this been so good, man. It's been so good and so fun. As people are listening to this and like, dude, I got to get more Dave Kline in my life. I got to connect with this guy. I got to understand the management accelerator and things like that. How can they connect with you and what are some of the ways that you help?
Dave:
Three easy ways. We're busy on social. So Decline II on Twitter, Dave Kline on LinkedIn. We have a weekly newsletter called the Management Playbook. It's always under a four minute read, super practical. And then we do run our management accelerator publicly three times a year. Next one is April 30th, and otherwise we're in-house running our program at a lot of companies. And so big, anyone has questions, we would make it very easy to reach out to us. You can do it on any of those platforms.
Brett:
Love it. And what's the u rl one more time for the management? It's
Dave:
GMT accelerator.com.
Brett:
Awesome. I'll link to everything in the show notes as well, but Dave, this was brilliant. Thank you so much serious about part two. We'll have to do that. Any parting words of wisdom? Anything you want to close the show with
Dave:
That's even more pressure than the OKR thing? No, look, the last thing I'd say is this. There's all this like, oh, I can be a good manager, but I don't have to be a leader. And those days are gone. The expectation table stakes now for people who are in manager roles is like you have to lead. And like you said, leading is just being kind and direct. Leading is being developmental and coaching leading is helping people better than they maybe themselves even believe they can be. And so I think once we embrace that, then we can start to get good at it.
Brett:
Got to lead in management. Dave Climb, ladies and gentlemen, Dave, you nailed it. Thank you so much. Thanks for having me and I look forward to doing this again. And as always, thank you for tuning in. We'd love to hear from you. Give us that feedback. Hey, give us that clear, candid, no holds barred, Ray Dalio style feedback. Maybe do that privately, not publicly if you got anything that you don't like about what we're doing here. But in all seriousness, do want the feedback. Love this community. Thank you for tuning in. And with that, until next time, thank you for listening.
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