‘I Had to Fire the Guy’

[Music] hello everyone welcome to the 21 hats podcast I'm your host Lauren Feldman this week Paul Downs Jay goz and Sarah seagull talk about sexual harassment and where you draw the line with employees is it sexual harassment for one employee to ask another for a date is it sexual harassment task twice does it make sense to have a policy of zero tolerance or is it better to leave room for discretion and judgment the conversation was sparked by a recent situation Jay experienced with an employee who had been with the company for almost three decades having started at the age of 17 it was a very sad thing Jay tells us plus Zarah seagull asks whether it's better to build her business on a bunch of small clients or a smaller number of large clients and is being CEO a health risk We Begin the episode by talking about an eye-catching story The Wall Street Journal recently published noting that an increasing number of CEOs have been dying on the job presumably because of the heightened levels of stress I asked the three CEO on the episode if they've been taking care of themselves but they weren't having it instead of thanking me for my concern they chided me for highlighting an article they consider complete BS which of course is what we love about these guys they call them the way they see them even in Good Times owning and running a business can be a lonely Pursuit our hope is that these weekly conversations brought to you by a principal sponsor the great game of business will let owners know they are not alone in facing challenges same thing with our daily newsletter that the 21 hats Morning Report which Inc magazine named the best newsletter for business owners and which you can subscribe to for free at 21h hats.com where you can also find transcripts of our podcast episodes and lots of other articles and interviews joining me this week on the podcast are regulars Paul down CEO of Paul Down's cabinet makers which is based outside of Philadelphia and makes custom conference tables Jay gos CEO of the gos group whose companies in Chicago include a picture frame business our frame service and a home furnishing store Jason home and Sarah seagull who's founder and CEO of seagull Communications a public relations firm based in San Francisco the episode is titled I had to fire the guy welcome Paul Jay and Sarah it's great to have you here I want to start today with a Wall Street Journal story that I recently highlighted in the morning report it's about how being CEO can be hazardous to your health in fact more CEOs died in office in 2023 than in any year since 2010 not surprisingly the story focused on the stress of the job on people working too hard on not taking care of themselves and right after I published it I got an email from a regular on this podcast who said she's been really sick since Monday she can't walk up a flight of stairs but she has a meeting scheduled with her biggest client um which leads me to ask are you guys taking care of yourselves can we talk about the article first because I have to tell you what what kind of Journalism is it 19 19 out of out of a 100 out of 10,000 out of a million what if the average CEO is 58 years old the odds of them dying in a year is 1% so what kind of context is that 19 CEOs died yeah I was going to say the same thing Jay it's complete yeah yes thank you well the the 19 number um is ridiculous you know all they told us is that it the number went up but that doesn't mean that there isn't a an issue here with CEOs stressing themselves no you're leaving out the fact that in the last 10 years the Baby Boomers are now getting older and for all we know the average age of the CEO has gotten older and that it's turning now because I'm a middle baby boomer I'm 67 the average age of the CEOs might has gone up over the last few years and it will start to go down as the Baby Boomers are retiring so there's so many things missing from that that to act like this is actually means something I think it's kind of silly because they gave us no information I was also struck by the the source of some of the data it was from Chief which is like a women's group I mean to me I just looked at that went oh they did some sort of survey so they could get PR out of it yes and I don't like using this phrase but Sur seems like fake news yeah I mean the down at the bottom or in the middle of it here we go most of the more than 1,600 CEOs in the study lived into their 80s longer than average for the general population but shorter in some cases than they might have lived with less stress well there you have it folks a my headline is not true and B if it is I can't prove it so what kind of story is that so there there's also the question is like the average CEO the lifespan uh and the career span of a CEO usually tends to be pretty SL short CMOS as well they like the average job T duration is like 16 months to 2 years maybe so it's like how do these shortterm gigs add up probably it's you know it's the stress of the job but bouncing from job to job as well is provides a level of anxiety and stress for a lot of these folks it's a bad control because the fact is the average quote unquote CEO has topnotch medical care probably doesn't smoke cigarettes probably so it's just it's a non-controlled study that has absolutely I don't know how you can draw any conclusions from that there was one point in the article that did sit with me a little bit um and it's how female CEOs tend to suffer in silence a little bit more than men I was listening to I don't know some podcast or uh a Tik Tok the other day and was talking about how you know women if they indicate that they are you know dealing with any help or or mental issues as a leader I feel like that there's still a double standard in terms of expectation like oh she's weak as opposed to a male CEO who would be it would just be like well it's a stressful job you know um but that's just my kind of novice perspective so I think everything you guys are saying makes perfect sense to me you're raising legitimate criticisms of the story but I doubt you're suggesting that the whole phenomen and is wrong I mean there's a lot of stress in these jobs what I would say um is that I think pinpointing stress and jobs to a particular title is wrong cuz um my my mother became ill and passed away and she had a very high stress job and we always thought that the demands of her job and the stress that she felt impacted her physical well-being and I think that that's across the board it doesn't have to be a CEO it could be a CFO it could be you know a rank and file person could be a doctor a doctor right 100% yeah I don't I think that if you compare the stress of being a CEO to the stress of being a single mom who's got to take a bus between three part-time jobs where they never tell her at the beginning of the week when she's working I'll take CEO any day absolutely I just don't think that this is a meaningful article it's just clickbait all right so let's talk about a got got anything else for us lur yes I do poor Lauren sorry wait a second don't apologize this is what we're here for we are here to bring reality to uh to every situation that can affect the uh the running of a business so you guys are providing a service all right let's talk about real stress Jay you recently had a stressful situation with an employee a longtime employee who got in trouble and forced you to make some difficult decisions can you tell us a little bit about that not much for his own privacy but with me 29 years since he was 17 years old and falls under the category of sexual harassment and it's it was just it was just a difficult situation of which there's some lessons from this sexual harassment if you think that it's not happening at your company maybe it isn't maybe it is it's it's if you've got 30 50 I got 130 employees it's a problem and you can have all the training you want which we do we do the training but it's very difficult and one of the worst phrases ever made in my mind usually usually is zero tolerance because it takes out judgment and the fact is things are not always black and white is it sexual harassment for someone to ask someone out for a date is it sexual harassment when they ask him twice is it sexual harassment when they close the door and they grab their arm it's not black and white and anyone who goes well people should speak up I fully understand that especially for a woman it is very difficult to speak up it's embarrassing they're worried about getting in trouble they're worried about losing their job it's it's very complicated and then they worry about oh the manager is tight with the owner so they're not going to do anything at the end of the day I had to to fire the guy and it was a very sad very sad very sad you did the right thing I mean it's a hard thing but you have to as the owner I mean it all comes down to you if you hadn't acted then I think that the the the risk of being held liable for for something would have been too high that's part of it let me tell you the other part what does it say to the rest of the employees that's a problem it's both with the risk with the one employee but then you got to take a stand sometimes because everybody's watching this stuff and it's a problem and I will also tell you that which is all part of why we do this this podcast did I sleep that night yeah like I gotta tell you I'm a warrior I've I've had to fire people f for all kinds of reasons over the years and like it was a very sad moment with him and he was very upset didn't argue with it but if you're in business and you've got a lot of employees you better just toughen up because this stuff happens if it's not this it's something else and I haven't had one in many years that was was personal like this where I knew the guy for a long time but like whatever I you know I do what I got to do and I'm not whining about it Jay what was it obvious to you that you had to take this action uh here's why this is going to make it this does make it black and white this wasn't the first time 10 years ago there was something else and that's why it wasn't that hard cuz it's like okay I'm big with Second Chances I'm not big with third chances and and if it wouldn't happened before maybe the outcome would have been different but uh this is the second round and like enough just yeah I was going to ask what what the timeline was on all of this how long did this draw take yeah it starts and this is I don't think this is unusual we had to fire a coworker of hers who just wasn't doing the job if blah blah blah and she decided to be The Whistleblower and she's the one that made the complaint and then revealed that he was harassing so and so and that's how we found out about it so then we interviewed the person and she told us the whole story We immediately suspended him while we were doing this investigation and it the whole thing took a couple weeks and I might add my daughter-in-law is a labor attorney and she does this for a living investigations I didn't bring a lawyer in because I didn't think it was necessary and I it wasn't but it took a couple weeks but we immediately took action normally if I have an employee who is misbehaving in some way we have a procedure to tell them what the problem is what the solution is how we're going to help them but they get a second chance in many cases sure and I'm curious whether whether sexual harassment sort of it in in not like an obvious grabbing someone and you know whatever right right but just a just a remark or something whether that's something that it's okay to give that person a second chance or is this are we in a world where you you basically got to get rid of them immediately no no I that's why I started out with this zero tolerant I don't believe that phrase I'm sure there's some cases I think that phrase is overused I don't think it's practical if someone makes a bad comment yes I absolutely believe they get one warning it's it's just not that complicated you get one people say stupid stuff men women it happens but to your point yeah they grow okay there's certainly some stuff that yeah it's that's it I got to tell you somebody calls someone a a racial slurve that probably would be it I I don't know that that's a warnable offense because I don't think you can undo the damage from that so I'm not saying there aren't things that aren't Zero Tolerance but not many what's the complaint process for your company well I have an HR person which most companies don't because until you have 100 people the fact of the matter is 99% of small companies don't have an HR personz because they're not big enough to justify so I do an HR person they would either go to the HR person or they would tell their manager and then the manager would go to HR and then we would do an investigation on it it hasn't happened a lot because I mean we do try to keep an eye on things am I torturing myself on oh this was going on too long we should have known about it uh that's that's easy to say but what's going on in in an office I'm not going to indict my other managers because I don't know that they had any reason to think this was going on J you have a policy about dating or not dating it uh now that's interesting you ask that cuz 40 years ago oh there's no dating here and like you know what why don't you make a policy that the sun can't come up anymore cuz I don't like it it's too bright in my eye I I don't know that you can have a policy that says there's no dating at work I you can try and I have tried but I just don't know if that's practical and I will tell you I've had five people that were dating here that got married over the last 45 years of the five uh two were really disruptive of the company caused major problems and I had to fire the people and they were married it was a bad it was a blow up but there were some others that they got married I don't think I don't know that you can do that you can try do companies really do that anymore is that normal like I don't think so to prevent people from having a personal I would I would think that that would be how would you even do that yeah I can remember that when I first started in my career there were weird things like I worked for for a company that men were not allowed to have facial hair and women were not allowed to wear pants yeah and I don't think you're allowed to date within the within the company just on a practical sense you're not going to stop it who are we kidding you're just not going to stop it I mean that's just ridiculous I mean so yeah so the question is do you try to put a policy that is reasonable like the boss certainly shouldn't be dating the employee that one is a black and white one when you say the boss Jay you're not referring just to you you're talking about managers no I'm talking about the manager a supervisor I mean you see it on the on the cop shows all the time where they're dating the the other cop you're watching a lot of TV Jay well I know I got to do something to get my mind off of business so I I think you could have some policies about that but it's very um naive to think oh I'm just going to put a policy there's no dating at work and think that's going to hold because I no it's not I think these days most people are kind of aware of the the risk they're taking like if somebody was dating someone farther down in the in the power structure that that is a risk that TV show Jennifer Anderson's in morning show everybody that's in business should have to watch that because it's extremely painful to watch what happen in the company and Steve Carell is the big boss and it's extremely painful and you realize that sometimes the boss just doesn't understand what they're doing no that never happens Jay I love that you like analyze everything based on a television show well it's just not everything on the TV show but I certainly learned things from TV once in a while Jay back to the matter at hand for just a moment here you said I think that this person had been at the company for 29 years I think started when he was 17 you had a personal relationship with him I'm C were you involved in the firing did you do it yourself no that's a good question I stayed out of it everybody took care of it but I feel a responsibility cuz we all I want me say we I'm always balancing being the boss and Humanity I try to be the best human I can be at the same time be a boss there's there's a balancing act going on there so I thought it would be irresponsible and cruel to just have him go on and not say something so I went over there I waited for it to get done I called him into the room by myself with him and I said to him look I'm not mad at you cuz I know that would torture him I'm very sad this happened and you made some real bad choices but I want you to know pick yourself up you know dust yourself off and I gave him a hug and he sabed like a baby and said you're like a father to me it was it was a very sad thing but I have to tell you compared to me 20 30 years ago there was no second thoughts in my head I didn't think oh my God what are you doing I knew it was the right thing and I was sorry for him but he screwed up twice like I said if it was once I don't know that I would have done it do you do a soft Landing package for somebody like that I've absolutely given lots of severance payout in my life just in in the last few years I had a couple people that left after years for various reasons but in this case it was not appropriate to go give him months of SE it just wasn't so I gave him some severance pay but not what I would have given them if it was like G or over your head or whatever I mean I'm pretty um generous with severence pay but I wasn't in this case because I don't think it's appropriate would you give him a reference you know that's another good question yes my manager gave him a very lovely he was here for x amount of years he was great at this and this and this and he left to pursue a new opportunity I have zero guilt about it I feel like I owed it to him and if somebody's dumb enough to hire someone after 29 years that's out of work and doesn't think to pick up the phone that's their problem well if somebody calls you what are you going to say uh first of all here's the part that you should know no one's going to call me trust me trust me I've been in business 45 years I've gotten four reference calls hundreds of employees people don't generally not everybody most companies don't do reference calls which is insane as far as I'm concerned so uh if he call if somebody calls the manager and they say well why' he leave I don't think we're going to go say what happened it's this is part of the business game you're supposed to figure it out if I had a resume from someone after 29 years and they're not working working and they're looking for a job I'd be saying there's something wrong here and I would interview the person and say I got to tell you this doesn't make any sense what's the real story and they usually tell me so It's Tricky but I felt good giving him the letter I don't want him to not work he worked very hard he was very dedicated to the company I want him to get a job do I think he'll do it again I would hope not I would think not and just empty clear it's not like he did something horrendous I that's another story I'd have him arrested if that was the case but that wasn't the case it was the asking out and the not letting up on it thing did you feel you had to offer some explanation to other employees yeah you know what I really wasn't involved personally but yeah sure I think that's a controversy in the world there are some people and this is an opinion there are some people that think you got to keep everything private and though I think Jack Welch may he rest in peace was a horrible human being I once watched him say that he thinks you owe it to the rest of the employees to let people know what's going on I don't disagree with that part I think you owe some explanation otherwise they make up their own story and I don't think that's healthy so yeah everyone knows what was going on to a degree that's a tricky one though I mean you're trying to balance personal privacy with other people that work there thinking like what do you mean so and so doesn't work what happened and then somebody can make up oh I think it's because remember that order last year I mean they could miss everyone draws their own conclusion and they're not healthy for your environment well that's one of my rules you always have to provide a story otherwise someone will make something up and it may be way worse than what actually happened yeah for sure so I haven't had too many situations like this but when I terminated someone I made it clear to the rest of them that we'd done this because I want them to know hey there's things you can do that will get you fired but B that I did it because I wanted to defend the Integrity of the group I usually fire people because I think that what they're up to is something that the group won't tolerate more than I won't tolerate that do you have any women working for you I do now it's been an interesting year the last three hires I've made have been women so we now have more on the shop floor than we've ever had we have another one starting on Monday and um I believe it's going okay uh this might give you an opportunity to have a whole new experience down the road could be uh we'll see I mean I'm certainly certainly I'm my my eyes are open for issues because I think a that it's it's good to have uh people who didn't used to work in wood shops now be available to work in them like I'm going to need workers I want whoever is out there who wants to do the job and it's easier to get uh the next hire to see what we're all about when there's not just a bunch of of white guys out there I can tell you the profound difference between me now and me at 30 years old I have had to deal with some really uncomfortable able sticky problems with employees and I used to say oh my God they don't teach us in business school why do I have to deal with that and now I understand if you're in business you have employees this is this is part of it it's you're dealing with human beings they're coming to work and I don't complain about it I don't whine about it it is what it is and I accept that that if you're in business yes you are going to have to sometimes play psychologist and you're going to sometimes have to play Dad or Mom and there's a limit though obviously how far will you go for who's having a hard time Paul we've talked about that I certainly cut some slack and we'll give it a month or two to see if we can fix it so I do balance the humanity part with the business part but you got to make sure you got that balance right because if you go too far to the humanity part you're going to end up with a lot of pissed off customers and pissed off employees and if you go too far to the other side I just don't want to live in that world that every you know I don't want to be Jack Welch I mean he was heartless I have a question for you guys how deep into people's relationships do you get like you know I've kind of learned along the way where it's like I have a relationship with my staff but like I don't get into the weeds you know I don't really need to know the day-to-day necessarily um because I have found that in the past that can complicate things where there's this this assumption that because I understand um you know something that they're going through that I am going to have a lot more um flexibility in terms of you know deliverables because I'm been looped into things so like I try to like you know have a relationship with the people I work with but like still have kind of a mini wall up in terms of I don't want to know too much I don't I don't want to know anything about your your the specifics of your personal life I can tell you from my perspective of my key people I there's no wall there and I know everything and it's not a problem and it's never been a problem though there are certainly other people that work here I know very little about if nothing uh it depends who the person is and their position and I also believe there's work withs and there's work for us the work widths are a gift from God and they work with you and there's never an issue with that and then there's some people who need rules and need instruction and you got to stay at them coming and it's and you got to know which or which but I would never say oh you you got to be careful not to get too personal I I would never make that comment because I have people with me for 20 30 40 years that I'm real tight with and I and it works you've never had anybody try to take advantage of that I'm I'm thinking about I'm processing this I'm saying this I don't think I can think of an example where somebody that I knew about their issue and they expected me to just okay I guess I'll pay you for the next six months and don't come in I I've never had that and I I think it's because if you've got the right people they get it they're not unreasonable so no I I I really can't give you one time where um I feel like someone's taken advantage of my relationship with them I could give you a hundred examples of where you know I always say sometimes you got to fire the unwilling the unable or just the unexplainable where people do stuff and you think like oh my God what are they what were they thinking when they did I certainly have had lots of weird things that have happened but I've never had an employee who I had a good relationship with that I can think of oh wow I wish I wouldn't have gotten so friendly with them because now I got to fire them I mean I haven't had anything recently but um so when I first work in agency side I was working with a friend of mine and she was like she gave me the advice that I still do is she's like or I try to do um where she's like you know go to happy hour but don't stay at happy hour you know like don't try to be BFFs with the people that you that work for you okay now then I don't disagree with i that part I don't dis I'm not going to their parties I'm not no no that part I absolutely agree with yeah yeah I think if you're trying to use your employees as the basis of your social life that's probably a really bad idea or if you're naive enough to think they want you there like I stopped just recently they'd have bowling parties and I used to go to them and I said they don't want you there you know what they don't need me there I don't they have to act differently in front of you right I'm also I'm no longer their contempor you got to remember I started at 22 I used to be their contemporaries now I'm old enough to be their father one of them said you know Jay my grandmother's younger than you are did you fire her well we laugh but her mother had her at 18 and her grandmother had her at 18 so I I just I realize I'm old and I'm not even old to be their father anymore I'm I'm past their fathers and most of their fathers are younger than I am so I recognize that it's okay I don't get hurt feelings I don't get invited to the weddes it's okay I try to be aware of of what's going on in my employees personal lives because I do want to make accommodations if there's trouble and what I found is that for valuable employees it's no problem you know it's good to know what's going on at home and because the pattern of of my interaction with them is 99% of the time they're great employees and 2% of the time they're dealing with some disaster at home that's okay the ones that have been all disaster all the time you don't want them in your company anyway and uh so I've noticed a correlation between sort of dicey or I need a warm body hes and you end up finding someone who's not all that qualified those people bring trouble to you constantly and it's because they're a mess and you can't really run a manufacturing organization with people who are a mess so got to get rid of those people or any business yes that's true what happens if like my concern is more the the snowball effect of it you know like we had a this is a long time ago we had a a nanny for our children and the nanny started having some personal issues and then she would tell me about her relationship issu isues and then her friend got injured and this and that and it became this like every conversation we had was about her personal life and her issues and then there was like requests for accommodations and I try to be flexible but those just keep going and then when you look at them and you say you know listen you need to show up cuz this is your job and this is what you do and I have an understanding about your personal the stresses that you have right now but you know I'm also paying you for a job and you're not delivering on that job and then they look at you and they say well but you did it before you know and it's that's what I I'm that's just your your classic mess of a person that that's what it looks like that there's a constant constant drama constant ratchet up and then they're astonished when it turns out that they can't leech off you forever you know what wait wait wait Paul wait let's be fair here you just said they're a mess they're a leech maybe they really have a A Life That's horrible and it's falling apart and listen i' I've I've been through I've been through that and here's what I say to people like that I say whatever is bad about your life now it's going to be way worse when I fire you so straighten up like I'm happy to help someone who's making an effort or someone who you know has a has a bad patch but it's basically a decent person but these people are just trying to ratchet it up it's like what do they think they're going to get fired they're used to it in my experience most of the people that I've encountered like thatum jump from job to job and they do the same thing every time they try to suck as much life out of it as possible and then you get rid of them and they're not even surprised they've done it before there are certainly people like that out there I'm certainly not arguing that I'm just suggesting whether they're doing it because they're irresponsible or whether they really got horrible problems it doesn't matter at the end of the day this is what I said before I have to balance taking care of the business and being the best human I can and sometimes you have to say to them I'm sorry you're going through this but I got to tell you I need someone here at 9:00 in the morning if you can't do it I'm going to have to fight it's it's just I'm not going to indict them with they're trying to suck off me they're leaches they're screw I just you need them to come to work every day so yeah there is a point to where there's no question that sometimes you just got to take care of the business and that's unfortunate but that is the way business is you just can't always be a humanitarian you just got to learn to see it and Sarah it sounds like sounds like you ran into a person like this we had a a member of the staff um who had kind of announced that she was going to go and work remotely on the other side of the of the world um and you know I'm a relatively flexible person and so I didn't say anything about it and I was like okay we'll we'll make it work and and it didn't work it ended up really not working at all for a wide number of reasons not just in terms of the distance and so I looked at the team I was like I can't do that again that's not going to happen again if you want to work remotely within the the four time zones of the US that's fine and they all looked at me and they like they're like no you're wrong it depends on the person and you know what like we can make it happen and so now I have a person on my team who's going to go on to the other side of the world um and work for a couple weeks and and I'm fine with it I think I just was a little bit shellshocked by you know bad experience I would have added just one word to that instead of saying we'll make it work I would have said we'll try that's all we'll try to make it work and that's all but that there's nothing wrong with okay we'll see but yeah there is a balancing actor regularly and it's not black and white and I got to tell you I don't have those struggles anymore simply because I know I got to take care of business and but oh my God 30 years ago I H one drama after the other I mean it was a weekly events and it was largely because I wasn't hiring properly and I wasn't checking references it all starts with the hiring process do you have a red flag that's a tell like oh my God we're not going to do this or somebody like okay that's going to be a fit for us like you have anything that you specifically look out for both of you um I can tell you our success rate for hiring now is probably 80 85% it used to be 20 when we interview someone if somebody first question I ask is are you working now no did you get fired or did you quit well it was a mutual thing really so you came in on Thursday and you went to quit in the boss goes what a coincidence I was about to I said that sounds like complete B like what's the story why they left their job or why they want to leave is a critical piece of the puzzle I want to know but my people are better rated than I am and very seldom very seldom do they interview someone they go oh my God I love this person very seldom does that not work out but it's about setting your head to yeah we're going to spend a lot of time interviewing people because it's worth the trouble and I can't tell you what a profound difference it had in my company I've talked about this before I hired a woman who was great at it and when I interviewed her like 25 years ago I said to her you running a lighting show and there's four employees how many do you have to hire to get to four good people she goes just four and I laughed out loud and I said well either you have lower standards than I have you're a hiring Savant she was a hiring Savant all right hey I've got a I've got an alternate path which doesn't rely on finding that one genius out there we write an ad that's very clear about what kind of company we are and what we're looking for both of those things not just we're looking for something but try to explain this is what the company you're joining is like then I review all the resumés bring people in for interviews in the resumé reviewing phase I've got a spread sheet that scores it's got like 10 questions and I give a point for each yes and a zero for each no and they're just relevant questions like how far as the drive if someone's got to drive 3 hours to get to work every day ain't going to ain't going to happen I'm with you absolutely how fast did they respond to you know whatever the the communication was do it look like they can spell can they write have they had training have they been in another similar job just a bunch of things that I think are relevant and so if you're trying to evaluate a whole pile of candidates if you put them all through one Matrix you'll get differences in the score that'll give you some information about who do you want to bring in for an interview then for the interview it's the same thing thing we not only give it skills test but also did they show up on time do they have a pencil did they dress up at all uh you know like any anything you think is important go ahead and make the score and I find that it really helps weed out people who are not going to work because you could be like this is a lovely person but they've had no training they've never worked in the industry blah blah blah blah blah sorry about that and you then have to apply your soft skills to it but just trying to systematize the Hing process and make it into something which isn't different every time is a huge step forward in getting decent people I agree 100% And there are many business owners that will go oh it's always a crapshoot that's not true that is simply not true it isn't a crapshoot right it's not a crapshoot nothing's a crapshoot there's no such thing as a crapshoot you use a good word you have a process and when you have a process that makes sense your hiring success goes from 25% up to I don't know that anybody's got 95% but maybe people that are great and have got it to 90 but what a difference that makes in your company I mean the amount of energy it takes to hire and fire and redo it starts with the hiring and from my experience talking to business owners most of them that I talk to put very little time into it and they pay the price for it Sarah this is the first time you've been on the podcast in a little while how are things going how's your year started so January 4 marketing and PR tends to be a very slow space because um most brands are um figuring out their budgets for the year and just kind of starting to get out there we came into January um in a good space we um have two new part-time people that are working with us what we're excited about and um we have a nice fluid um workflow um I have worked really hard to kind of get myself out of the weeds um so I've really been focused on you know doing everything I can in terms of building New Biz specifically doing a little bit more when it comes to responding to request for proposal um which if you have ever worked on one of them um can be like a college application I just got one from the city of San Francisco that's 120 Pages um so trying to create kind of a process for responding those um uh and also just doing things that will make us more visible for those larger Ono going government contracts specifically um looking into registering ourselves as a a women owned women run business um I was told by a couple different sources that can be beneficial just in terms of our win rate and getting in on bigger projects so we're working on that which is also like a college application Sarah would do you think that would help in general or specifically going after government work going after government work so the one thing that was interesting for us is that we apply for government work you know even doing like tourism or PR for a city or a town we would respond to these pitches right with a great package and this and that we would get to the very end and they'd look at us and they'd say we really loved you you were the you know the one of the last two people that we group companies that we considered but you don't have a org um you've never worked on a.org or.gov and so last year um by happen stance we got pulled into working on the big Apec conference here in San Francisco and so we ended up working with the city of San Francisco and and doing a lot of work so we got our.gov and so now we have um doov experience so um we're putting a little bit more work into to some of these larger government contracts and the reason why is that you know that that money is stable like once they allocated they allocate it and it's usually for um you know three-year contracts so it would be nice bread and butter for us us um and uh I think that would be a nice kind of just a basis of revenue for for the company so we can you know still have fun with um some not so stable clients um and still do those projects that we like to do like um we just did uh Fan Expo which is a big ComiCon here in San Francisco but that's only you know a couple months a year that we're preparing for that so we need those stable um clients where we know the paycheck is always coming how many different organizations do you have to get quote unquote certification from for like a better word is it's not just one right is it is there a bunch of them city state US government for women-owned status I would say that the the in my experience the the basic one to get is to is the federal government designation that most once you're in those databases most other organizations are fine with that CU we we had to go get you know it's not a huge lift but to get certified as a small business yeah to be eligible for certain federal contracts did you do it yourself did you or did you hire somebody to do that for you no I did I did it a long time ago and there are pitfalls but it wasn't impossible for a moderately dedicated person to figure it out I wouldn't start with a consultant for that that's pretty straightforward yeah we have one issue though so my company wasn't my company for 2 years I had a parent company so sometimes they ask for um Financial records that we don't have cuz we were just filing our first year taxes um back in business by ourselves so I haven't hit that question yet but I'm I'm bracing myself for it well that yeah that that that might be a problem when I when I applied for all this stuff it was probably 1999 or something and I'd been in business for a couple decades at that point and uh so when they ask you for I can't remember what the what the burden of proof was one thing is you might have to get state certification because we just had to go through that I don't even know Paul what are you talking I mean I get the woman owned what kind of small business certification I've never heard of such a thing well are you under a 100 million a year under 500 employees I mean yes most of us are but that opens you up to the there's a lot of contracts in the federal government that are set aside specifically for small businesses not micro businesses but just small by their definition which is can be fairly substantial business but the other thing is that when you're working in certain contracts the main contractor ack Martin or somebody like that is often either required or encouraged to do subcontracting with small businesses there's a percentage of the contract that has to be given to a small business yeah so it can be it can even be a larger marketing agency that like wins a major contract but because they're above a size they have to Dole out some of it to smaller agencies right I mean once you're in the world of federal Contracting there's all these different designations and there's a lot of organizations that exist merely to be one of those designations like service disabled small veteran owned business or whatever and there's just a huge ecosystem of people who have that do nothing but identify Federal contracts and then start looking for somebody who can actually do the work I'm working on a job like that right now where there's a uh a contractor who's got a special designation who's sort of got the inside track to get this work on a military base but they don't have any idea how to do it so they they went and found me and you know it might work out we actually get quite a few opportunities that are like that where there's a contract there's somebody who's got can check a lot of boxes and then they then we're the subcontractor for that see you're in a real business you're in office Furnishing I'm not in a real I don't think picture framing or art or I don't know that there's such a thing as a big vendor they're own to anyway so I don't know if I don't know I mean you think about like a major museum for example you know like the National Archive or or something like that they probably have framing services that they need and there's probably part of that contract that has to go to a smaller business um from what I know about that they usually do it internally because they're dealing I and that's not something I don't want to be dealing with $3 million pieces of art so all right well that's you Jay I mean there there might be somebody out there listening who thinks it's useful oh I get it it makes sense well congratulations s it sounds like you're figuring some stuff out and you got a good plan I am it's not you know it's not a seamless process I don't know you know I I I listen to a lot of podcasts I read a lot of you know insights I I haven't figured this out I'm learning something new every day I make mistakes every every day um and I'm really just trying to build a business and get past you know the revenue number that we've been at for 2 years you know like it's how do I do it and last year was terrible I mean last year we um had you know a number of clients leave because they ran out of money and the the economy wasn't so great and people are starting to come back but it's slow and I'm also a little bit more um apprehensive about jump diving into to deep where you know you look at these big these companies that say oh well we have this money for a retainer and we can do this and that and then the first thing that goes is outside agencies when things get hard so how do I staff up for a new client with you know you just never I feel unsettled still Sarah what do you mean by diving in to deep are you referring to hiring people to take on a client like that not knowing for sure that the work's going to remain right I love staff I love having staff I love people being on staff I love giving them the perks and creating an environment that's welcoming and you know doing all of those things but you know if if a client comes to me and and you know says hey I'm going to give you this huge retainer and I'm still going to be apprehensive about hiring people onto staff because I've been impacted um by retainers leaving because their business didn't go well right like so I'm gunshy31 and here's the here's the thing Jay is that you know you talk to so many agency owners and they'll be like oh well we don't do anything for under $10,000 a month to me I find more security if I were to have 25 clients at $5,000 a month versus 10 clients at 10,000 because one of those goes I'm fine but one of the big guys goes and I'm like okay this is like this keeps me up at night so like like do I build a business that's based on smaller retainers so let's do some math on that though so let's say 5,000 a month is 60,000 a year sure and let's say that PR is a quarter of their ad marketing budget so that means their marketing budget's 250 Y which means this is probably A5 to10 million company yeah we we're when we look for new businesses we're really the the minimum for us would be a $5 million company which makes perfect sense because the person doing three is simply not going to have the resources or the well and it's it's money too close to their pocket you know they take it personally um and they usually don't have somebody dedicated to managing an agency you're talking to someone who it's been all of them I I was the $3 million company I was the $5 million company so now I'm big enough that I do have a person dedicated to it so you're right I I'm it makes perfect sense what you're saying because in the beginning when you're doing five it was like an idea your brother-in-law told you at dinner like why don't you get a PR for oh yeah we should do that and then they don't know what they're getting into and then they're well wait it's been a month I haven't seen anything you know the tough learning curve and then yeah it's it's so I I think you're right I I think the $10 million company been around for a while doing enough volume probably understand the pr World a little more and it's probably a more stable client who is had experience having a PR agency those are the ideal you know yeah the people that understand the value of PR and have worked with an agency in the past those are our ideal customer that said we work with a lot of really cool interesting startup companies that have never had PR but they also have something great stories to tell and so we get excited about them and then some of them are just like you know they work out really well and then there are others that like you know want to be on the front page of the Wall Street Journal within the first two weeks of working with them and we know pretty quickly that they're not going to be a long-term client well that's crazy we know take that takes four weeks or five weeks so you know yes or five years yeah unfortunately we are uh out of time here my thanks to Paul DS Jay gz and Sarah seagull and 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 Great game.com thanks everybody wait wait don't leave yet if you have a question or a comment that you'd like the 21 hats owners to address send it to me by replying to your Morning Report or by email at Lauren 21h hats.com that's L ren21 hats.com do it now before you forget and don't be afraid to tell Jay what you really think you can take it and if you got something out of this conversation help us reach more business owners tell a friend subscribe and review us wherever you get your podcasts follow us on Twitter subscribe to the morning report at 21h hats.com this episode was produced by Jess thubron founder of blank word Productions okay now you can leave thanks for listening everyone [Music]