When Your Biggest Hire Ever Is a Bust

[Music] Hello everyone. Welcome to the 21 Hats podcast. I'm your host, Lauren Feldman. This week, Jackie Russo tells David C. Barnett and Kate Morgan how the hiring of her agency's first tople salesperson went wrong. About 4 months ago, when Jackie first told us about this big step, she sounded thrilled. She said her new sales chief was a delight to be around, had hit the ground running, and had already lined up at least one impressive client. Unfortunately, none of that panned out. But Jackie, who is hardly the first business owner to have an important placement go off the rails, offered to walk us through her process to see what lessons we could all learn. Were the interviews flawed? Was the onboarding effort insufficient? Was it the executive recruiting firm she used? Was it the compensation structure? Or was it the remote work arrangement? Plus, we also discuss the mounting evidence that companies have stopped filling entry-level positions. And should that trend continue? Where will owners find the next generation of leaders? Even in good times, owning and running a business can be a lonely pursuit. Our hope is that these weekly conversations will let owners know they are not alone in facing challenges. In fact, that's the whole idea behind the 21 Hats community, engaging with other owners to get the kinds of insights only another owner can offer. If you're interested in learning more, you can sign up for a free trial of the Morning Report newsletter, which highlights the most important news of the day for business owners and shows how other owners are confronting challenges and seizing opportunities. Just search the 21 Hats Morning Report to subscribe. And if you like the idea of helping out another business owner on Tuesday, August 19th at 3 Eastern time, we're going to hold another 21 Hats brainstorm. This is where we gather virtually. One owner presents a challenge and we all try to offer support and suggestions and then we turn it into a podcast. Our guest of honor this time will be Elan Daniel, who's trying to decide how big a business he wants to try to build. If you're interested, let me know by replying to your morning report or by shooting me an email at lauren l o r e n21 hats.com. I'll send you all the information. Joining me this week on the podcast are regulars David C. Barnett who is based in New Brunswick, Canada and helps people buy and sell businesses. Kate Morgan, who is CEO of Boston Human Capital Partners, which is based in Boston and offers recruiting and fractional HR services, and Jackie Russo, CEO of Brand Russo, a marketing agency based in Lafayette, Louisiana. The episode is titled When Your Biggest Hire Ever is a Bust. Welcome, David, Kate, and Jackie. It's great to have all of you here. I want to start with a actually a quick thank you to all three of you, but especially to Jackie. Three or four months ago, Jackie, you told us on the podcast that you had made a big important hire, maybe the biggest and most important you'd ever made. Uh this week when I sent out an email to all of you asking if you had anything you'd like to discuss, you volunteered that we might want to talk about that hire, which did not work out precisely as you'd expected. And I just want to thank you for that. before I start poking my finger in your wound. So, with your permission, Jackie, I will now remind you of what you told us 4 months ago, shortly after this hire. So, you hired a business development person. You told us you had been doing okay in terms of business development, but you needed to hire an adult, someone who has a real program that's focused only on business development. You hired a recruiter, an expert in search, specifically in sales, and you gave this person a checklist of what you wanted. They gave you back someone who checked none of your boxes. None. >> Correct. >> Uh but who you told us then was exactly the person you needed. Someone who hit the ground running and was already lining up opportunities in her first 3 weeks. She revamped your CRM system and had just been a general delight. You mentioned that your search firm had worked with her previously and knew she'd be a great fit. Jackie, you're still there, right? >> I am. So far, so true. >> When we talked about it, I asked you what boxes she hadn't checked for you, and you kind of apologetically said you thought you needed some hot shot east coast, west coast, big city dude who'd come in with all the slick talk. Instead, you hired this very nice lady from rural Georgia who was at that point killing it. Uh, in fact, you you didn't want to give her last name because you didn't want anybody to poach her >> or first name. Uh, no names for sure. >> I I asked you if the recruiters had had to sell you on her since she didn't check your boxes. And you said that, you know, in your field, you're an expert. You hope that people will take your advice and you reminded yourself to shut up, sit down, and follow directions. And so you took the meeting with this person and 10 minutes in you were like, "Oh my gosh, I am so glad they matched us." And you were off to the races. So maybe now you could bring us up to date. What has happened? >> So that is a very accurate recitation of exactly what I said 4 months ago and I stand by all of it. I tell you that, you know, the firm was reputable. She came highly recommended. I had all those thoughts. I felt all those things. I really thought that this was like a gamecher. She made all those changes. They were very expensive, but I supported them and um it has become an an expensive lesson in a list of the expensive lessons of entrepreneurship. So here we are um starting over again. >> Well, tell us what where did it go wrong? >> So the end unfolded um in an odd way. So, fast forward from the quotes you just gave, fast forward 3 months and nothing has developed and we met daily for two weeks so that I could really download everything I thought she needed to know. Made sure she had all the right resources, access to the library of all of our documents, all the things. She wanted to make some big changes, move us away from kind of what I would think of as a baby small business CRM and move us into Salesforce. hired an integration firm um brought in Zoom Info. I mean all the things. So right there I would say is thinking about us maybe as a bigger company than we are. You know she previously worked for much bigger companies but some startup she had some startup background so that didn't raise any red flags. She did walk in with somebody that she thought would be a great client. They were not in our um target markets. They they weren't the kind of company that we typically do business with, but she had a relationship with them that fizzled out, but I mean, you know, those things happen, so I'm not not too worried. >> Were they not right for the same reason? Because they were too big for your business? >> No. Uh, they were actually smaller than our typical client, but not a good fit in terms of matching up our industry expertise and process. they would have benefited from us, but I' I've realized later they were never going to get approved budget-wise. Um, they wanted a $500 a month solution and we're not that. So, you know, but no big deal. So, first month goes by, there's no big opportunities, but I'm still allin because it takes time. Like, who pulls this off in four weeks, right? Second month goes by and I'm starting to think surprised. I think I would have had some meetings by now just based on the people that I know and pulling in some relationships. I mean, the agency at this point in two months has probably had 10 discovery meetings and signed a new client. And so, um, I'm starting to wonder now. We're in month three and I'm definitely starting to say things like, you know, what can I do to support you? This isn't moving as quickly as you predicted. you know, she wrote out a go-to market strategy that had very clear path forward and we are well off that path. And so I'm sorry to say what if and I actually was uh heading to London and arrived and so she had sent an email while I was on the plane that said, "Hey, I want to um to do some things differently." And I'm thinking, "Okay, I mean, she sees the same thing I'm saying. What's happening up to now is not working. We're going to make some changes." And that was this odd like almost fall off the cliff for the next three weeks. It was just a rapid downhill descent. Um it was like she lost her confidence. She was no longer kind of organized and on top of it like she had been at 3 months. I honestly at one point was concerned that maybe something was going on with her personally, but she said no. And I reached out to the placement person and said, "Hey, this isn't going well. I don't know how to fix it. I'd like your advice. Here's what I'm seeing. And I sent, you know, reports, some email correspondents, some thoughts. Wow. Yeah, that's surprising. Give me a couple days to think about it. I said, okay. Came back with an incredibly thorough breakdown, step by step. I I think this needs to be different. I think maybe try that. I thought, oh, this is great advice. Yep. I've done three, four, and five, but oh, six and seven, that's really good advice. Okay, great. I'm going to start working on that with her. And then I get a two sentence email that says, "This isn't working out. I tinder my resignation effective immediately." And I was like, "Where did that come from?" >> Wow. >> And so here we are. >> So, first of all, Kate, you run a recruiting firm. Any immediate reactions to that? >> Yeah. Was it a contingency search? >> Um, meaning >> you paid a a finder fee? >> Yes, I paid a finder fee. >> And you had three months to make it work. Did you have to because usually there's a a 90-day guarantee. Did you leave before the 90 days? >> Well, we we started to realize it wasn't going well before the 90 days. Um there wasn't a time limit put on or there was I didn't go back and look at the document to see. I reached out though to the firm and they were like, "This is shocking. We've placed her before and it's been a great success. We are stunned. if you will trust us, um, we would love to write this situation and do that work again and find somebody who's a better fit. No charge. So, I have no grievance with the firm. I feel like they are absolutely handling it the level that I would if it was me. >> Yeah. No, that's that's fantastic because we hear of situations where they'll sandbag >> somebody so they can ensure that they'll get the full uh contingency referral fee. Uh to the point we had a uh somebody that was relaying the story that the person wasn't wasn't really working out, I guess. And again, it was the the candidate had buyer's remorse. Roundabout Channel found out that they paid the candidate a thousand dollars to stay until uh the 90 days were up. >> Wow. >> When you first stay Yep. They the person gave their notice. >> Wow. >> That's low ball. >> Yeah. Yeah. >> I think that might be I mean that's a conflict of interest bordering on fraud, isn't it? >> Well, because welcome to the world of recruiting. It's pretty it's pretty shady. >> I'm not sure it's bordering on fraud. I think it's the definition of fraud. >> Yep. It's uh it's dodgy, but it sounds like they they were at least honorable. >> Yeah, I don't think this is that um at all. I I am stunned. They are stunned. The way she started to the way she ended, it's almost like a personality um Jackal and Hyde thing. Mhm. >> Well, it sounds like she she probably got another offer while this was all going on. For whatever reason, it was a better fit for her, so she started going down that path, leaving you high and dry. >> Maybe uh I don't have that impression. My takeaway after many many nights of thinking about it is that she's maybe been a part of a bigger team and had the luxury of being in a crowd, you know, like that high school group project thing and all of a sudden she's a unicorn and there's only one and all attention's on her. And I think the pressure I think she cracked under the pressure, not pressure I put because I think I'm I'm pretty laid-back. And I checked with my team. I went back and rewatched the um all of our meeting videos, plugged them into Chat GPT. I was like, what could I have done differently and chat GPT and I think that um she isn't used to carrying the weight on her own and it broke her. Yeah, that we we see that a lot particularly because we're focused on a lot of the work that we do around sales is the first salesperson into a company. And yeah, that's you're you're actually looking for a very different person than most uh company larger companies that are looking for just another account executive or sales rep. >> Right, >> Jackie? How are you paying her? >> Um a salary plus commission. And and what what what kind of salary was it? Like a would you say it was a low, medium, or high salary? Like is somebody going >> I say it was high. >> It was it was high. >> It was It took my breath away. >> So somebody who took on the role could have presumably lived on the salary without actually making any sales. >> Yes. Unfortunately, and I did think about that at the time um and and quite a while thereafter, but it was not as high as they originally wanted it to be. So my theory was and and when we talked it all out that the salary plus commission was going to be really, you know, awesome, but just the salary wasn't quite as much. It was more than I wanted, but not as much as they wanted. And so I thought that still left enough, you know, because I think sales people need um they're competitive by nature and so they need a little drive and a little push. And so I felt like we left room for that. But now I think maybe it was too big. And before this were were were you the only person kind of doing sales or has someone else filled this role before? >> Well, that's an interesting question. So, we are blessed and fortunate that we get a really nice steady stream of inbound from thought leadership, from consulting work, from current clients, and that that keeps the pipeline, you know, full enough. Not as much as I'd like, but it's steady and good. This was the goal to um double our efforts so that now we had a really great uh two-prong approach over the years. This is not the first time we've ever tried to hire a salesperson. Um we have done this and I can tell you this is the first time we've ever hired someone of this caliber, at this level with this approach. Otherwise, it's been friends or somebody who's, you know, just gotten laid off and and they need a landing spot. And I thought, well, maybe you can make this work. But this is the first time we've been really like hired a firm, been diligent, dedicated resources, all in. >> So, in looking back, Jackie, are there things that you've decided you would do differently the next time? For for example, just the issue of the checklist. You hired someone who didn't check any of your boxes. Do you think that was a mistake or do you think you would respond the same way to a a person put forward by a firm that you were trusting? I am inclined to believe that my checklist is uh based on the rantings of a lunatic who doesn't know better. And so I would not hold anyone to my checklist because of everybody involved in this, I am the least qualified to decide what I think the search firm knows more and the candidate that I the successful candidate will be smarter better than me at their job. So I'm fine with the checklist being wrong. What I do think though, because I have two interviews set up for next week for a replacement and um I do think that I'm going into those with eyes much wider open. I have a whole new set of questions based on my experience that I wish I had asked last time. I'm a fall hard fall fast kind of person. Um, and so where in this case the now gone employee, they were a good salesperson that they sold me on them. And that that was my mistake. I'm going to own a whole lot of places where I there are red flags in retrospect that I never saw. And so I do feel like I really have to reset myself because I'm tempted and I I know I'll get it in check, but right now I'm tempted to go hard in the next set of questions and it's going to be like a firing squad because it's like, wait, what about this? What about this? Because I feel so burned. But I I think I I think I've got it in check. I've worked out a really moderate tone to my questions. It will not be as much of an inquisition, but it'll be better set than it was the first time because I want to know more about have you been in a team? Have you been first salesperson in before? You know, can you take this program that we have that works okay and turn it into something that's really for you? What are you thinking in terms of expenses of throwing away all the money we just spent and doing it your way? You know, so I have more questions now. Do you think maybe since it sounds like this was the first time you hired uh a recruiting firm, especially at this level? >> Yes. >> Do you think maybe you thought you could rely on them more than was appropriate? >> Yes. Yes. Absolutely. I felt like it was kind of like one of those matchmaking services where you just show up at the altar and it's a perfect fit and you're married for the rest of your life because, you know, that's what I want. I don't enjoy the interview process. I find that I either talk too much because I want to sell them on how great we are or I'm a better listener just to listen versus listen to ask the next question. I'm not as great an active listener in the good way. And so it's it's more of a conversation than an inquisition. And so I got to move that pendulum a little more to the middle. >> Kate, is that something you see where people kind of have to learn how to use a recruiter? Yeah, I mean we because our model's a little different, we really do view ourselves as more people strategists. So we will coach our clients on how to better interview and prepare for it particularly around sales because if we're working say with a technical co-founder, the last thing that they've ever thought about doing was going into sales. So, we need to really help arm them and prepare them for what they're looking for. And a lot of default, and I I caught you, David speaking about this was like inferring about, well, maybe you pay them too much money. Well, it's actually the the challenge if you underpay uh the people who are super money motivated, if your sales approach, if if it's hard, if it's a long sales process, they won't stick around. they're going to go do something, find it easier. So, one of the best examples of a response when I was looking for a first um sales hire in the UK for a client, I talked to this woman and her response was that she looks at her desk like her own franchise. And that conversation I had with her was about 20 years ago. And it stuck with me because that's really what it is. is it's not so much about the money, it's about the entrepreneurial spirit that sales people have. They just don't have maybe the visionary focus to to launch something on their own. But you still need to have that working relationship where you can get the, you know, life cycle, the so full understanding of how they're approaching the the potential customer. You want to have that that open dialogue. Um, and entrepreneurialminded salespeople tend to do that. They tend to enjoy it. >> Can I offer a bit of a thought experiment for Jackie to help her get ready for this interview process? Um, Jackie, if you can imagine the future of your company and let's imagine that the revenues are 10 times bigger than they are today. So, this is some point in the future. What different roles do you think might exist in the sales department? >> That's a good question. I imagine that we would, you know, at that size to scale like that, we will have had to now have in this um hypothetical scenario a team of salespeople. Uh because to get to that, there's no way one person's doing it. So, we've got, you know, three or four of them. Uh I would imagine there's a uh more intense process around uh the data because we'll have multiple of that as well. And um yeah, the whole thing is just bigger. >> So you you'd have salespeople who are trying to make contact with prospects and then you would have some kind of sales manager and there would be some kind of strategy function in there too either by the manager or maybe with some other people. >> And so when you hire your very first salesperson, uh all of those tasks still need to be done, but you don't have a team. And so you have to figure out which of those specific roles and tasks are you going to cover or someone else in your team right now going to cover and which ones are going to be covered by the new person, right? Because because the the salesperson that you hired could be very, you know, to your point may have been on other teams before where this path was well trodden and people were able to say this is how we approach people. This is what we say here are here are the value bites we say in the conversation and this is how we you know whatever. But a lot of that has not been established yet at all in your business, >> right? >> And so there's a lot of construction that has to happen. And if if there's certain aspects of those things that the the future sales department would have to do that you're not doing today or you're not conscious of doing today, then you you have to figure out who is going to be doing those things in your new sales department. And if it's not you doing some of those leadership roles, then it means the person you hire has to be able to do those as well. >> But David, Jackie, maybe I I I missed this, but it sounded like the person you hired, that's exactly what she was bringing to the table. Just looking at all the tools that she was looking to roll out, it sort of gives you this impression that she knows how to set up a high functioning sales process and and department. >> It literally said it and it was written on her resume that she had done that at two other occasions. Yes. >> Yeah. Did you check any references? >> You know, I didn't. I used the vouch of the placement agency. Um, I I have such a a sticky thing around the reference thing. Um, and so, you know, talk me off the ledge on this. My theory is anybody is going to give me the people that are going to say nice things about them and so I'm going to call and those people are going to say nice things. So, what are we learning? You're not going to tell me the name and number of somebody who doesn't say something nice about you. >> Yeah. But but here's here's something to think about her experience though because it it may absolutely be true that that she did set these things up in other companies. But is it because of a plan and a strategy or was it simply mimicry? So if if she was selling widgets in one company and then moved to another upand cominging company that was in a very similar or analogous industry, did she simply replicate her experience from before and it worked in that new place? >> Right? Because for you, I mean, you right now are not doing a sales function. You're you're using other marketing methods like the thought leadership and and putting yourself out there and sharing your ideas and you're drawing people in and and the outbound sales is a very different kind of thing. I think you need someone who's going to be able to figure out how they can get not only a conversation with prospects, but maybe even work to get your prospects in the line of fire of some of the other things you're already doing, right? >> Yeah. So developing relationships and all this kind of thing, it it may not be that you you're looking for someone who's going to cold call, you know, 100 companies to try to get three meetings and ex like it just may not be that kind of process. It may require a bit of iteration and and figuring out and I'm not saying that I I know exactly who it's going to be, but I think maybe if you think along these lines, it might help to inform some of the interview conversations you have. >> Jackie, I'm going to channel Jay Goldz here a little bit. He has gone off numerous times on this podcast about checking references. His point is that, you know, if you're g if you say to him 90% of the time it's a waste of time, he'll agree with that. But that one out of 10 makes it all worthwhile. And you know, perhaps this would have been your your one out of 10. He says that there are ways to ask questions that you can even if you have to read between the lines, you can get a sense. If you ask, would you hire this person again? Sometimes you can feel the emotion in their voice. Um, you know, people are inclined to say nice things, but often they don't want to just outright lie. And you just never know what you might turn up. >> There's a lot of techniques and questions. And Jackie, I'll I'll send you one of our templates that we use. >> Thanks. >> You know, the really setting up the call with the reference also helps. You know, I I joke whenever I get a reference on the phone. And I say, "Listen, chances are you had a good relationship, you know, cuz I'm on my second marriage and there's a guy and his mom out there I'm not going to list." And that usually gets them to to laugh about it. But then I I drill down and I say, "This is our our last attempt to make sure that we're going to provide an environment where this person can be successful." So, all of your your answers are going to help us determine that. Um, one of my favorite questions, and I usually wait to to ask this towards the end, is I'll ask the person what's their most memorable experience with the person. And that's so telling because I want to know, are they like dialed in and they're talking about a work challenge that they overcame or just how they kind of crafted a solution? And that has always been uh one of the most eye-opening reference questions I've asked. Interesting. Okay. I like that. I like that a lot. >> I'm curious, Jackie, are you comfortable with the move to Salesforce? I've been told many times that that's kind of overkill for most small businesses that it's too expensive, not necessary. There are plenty of solutions that are less expensive that work just as well for a smaller business. I wonder if that might have been a red flag. >> It definitely was, and it's something that I'm I'm figuring out what we're going to do. I'm pausing until we hire the next person. And then, you know, depending on what they want, uh that'll determine how we handle it. I feel as though it's a Maserati and I just need a Honda for school drop off, you know. >> Yep. >> Um so, no knock against them, you know, they are what they are. Uh but they are way more machine than my lead foot needs. Uh, so we'll we'll see how that's going to all develop and I I'm going to spend some time as we go through the process and figure out what makes sense for the next hire and a really good system for us moving forward. I've always struggled with this concept and Michael and I have talked about it extensively um through these past few weeks because I believe that this is a hirable skill. I do not think that I am the only person in the world that can sell the services of my company. I think if that was the case, we'd be the only ad agency, but there's like 84,000 others out there. And so all of those have somebody at their place that can sell them. That means there's somebody out there that can sell us. And I remember in the early days of our agency when we struggled with the scalability for account service and having somebody that clients would turn to and not always need to call me. and we've done that. I don't handle anything day-to-day for our clients. So, I know we can do that here, too. I just have to figure out how. >> Anything else that you're thinking about doing differently this time? Any changes to your process? >> Well, I think I'm going to ask much better questions this time. And I'm very excited about the cheat sheet. So, thank you for sending that over. I uh I I'm going to call references because I think we've had a good conversation around that. That's landed. And I think I'm going to do a better job of listening to them talk about their process. I'm not as detail- oriented as I wish I was sometimes, but I'm going to ask some very detail oriented questions and ensure that I have a really good understanding of their vision of how they want to do this. So, had they been in this exact spot before or has it just been a part of a team? Because I think that's a big piece of this. Jackie, I think you told us when you first four months ago told us about this hire that not only had you used a recruiting firm, but you had other people at your company that played more prominent roles in the hiring of this person and you were you were kind of the last person the sign off. Is that going to change? >> Oh no, we still do the peer interviews >> and you know I have accepted full responsibility welld deserve it for making the choice. So, I have uh empowered the rest of the team to dig deeper, have more time, ask more questions, don't rubber stamp it just because you think it's what I want. And I've brought in one more person to the circle who um clearly had some misgivings almost from about week two or three. And so, they're in the peer circle now. They get to be a part of the peer interviews because it turned out their instincts were right. And so I want that thought process during the interview process, not after we've hired. >> You know, there's one other thing that is a real low lift cheap way to also make sure that you you kind of understand what type of salesperson you have is um there if you use disk um so we we have a platform that we use uh TTI and they have a sales specific assessment that is super super helpful. >> Awesome. Yeah, we do Inog and DISC and I I didn't see any red flags there, so I missed it. Uh >> Jackie, in my own past, in my sales career, one of the one of the um models of compensation that that seemed to work well at weeding out the wrong characters really fast was a model with a very low base pay, but a an advance against commissions. So, I remember one sales job I had where it was a really tiny base. It was like 12 or 15 grand a year, but for the first number of months, they paid me a higher salary, but this was an advance against the commissions I would ultimately earn. And over this this period of of sort of onboarding. Um, I learned how to do things and I started to make sales and then then they they pulled that sort of advance minimum away, but by that time I was bringing in my own revenue from the commissions I was earning and I was great. But what I what I saw is that the people who were having trouble saw that cliff coming up and they usually pulled their own rip cord well in advance of the cliff. So there there could be some different ways to offer compensation that might encourage um either um you know performance or help people self- select themselves out if they didn't feel that they could pull it off. >> Right. >> It sounds like that's pretty much what she did, right? Because even without having a recoverable or non-reoverable draw, this person tendered their resignation. Correct. >> Right. Yep. Absolutely. >> What do you think would have happened if she hadn't? >> Um, well, I mean, I had requested a meeting that day so that we could talk about some discrepancies I had seen in Salesforce. Um, in looking at kind of the activity, it felt kind of sporadic. And so I was looking for how do we improve? How do we make this better? you know, what can I do to better support you? I think that eventually either we would have gotten her process fine-tuned and she would have started being successful or we would have let her go, but I wouldn't have done it that day. I mean, I was in for a penny, in for a pound. I wasn't going to cut the cord at all. I wanted to make this work. >> One other thing we haven't discussed here is you're in Louisiana. She was in rural Georgia. Do you think the fact that she was working remotely might have had some impact here? And are you rethinking that at all for the next hire? >> I'm fine with remote. I I I think that um I think it's good when we spend some time together, which is why we did those, you know, everyday hourlong meetings so we could really get to know each other and spend some quality time together. I don't think it has to be in the same room. Me personally, if that made them more comfortable, then sure. But I would um I think I would really lessen my pool of applicants if they had to live in Lafayette, Louisiana because it's a small town. So I I'm not going to have uh as many people to choose from as getting to pick from the whole rest of the country. >> What if you did a a oneweek onboarding in Lafayette? >> That'd be great with that. where the new hireer came to your office, got to meet the team, got more of that uh an appreciation for everything that's happening and who does what and everything. Do you think that maybe could help set expectations or make someone feel more integrated? >> And I would be fine with that. That would be absolutely great. There was a discussion of that at the beginning because I offered that because I thought that would be helpful and she didn't feel like it was necessary. So, she spent time with everybody on Zoom. And so, you know, I would hate to mandate it because I think not everybody's life is conducive to them just picking up and leaving for a week, but um I want to do what's going to help them be most successful. >> So, did you ever meet this person in person? >> No, only through Zoom. >> Kate, what do you think of that? >> It's so much easier to quit uh a company. I I'm I'm kind of on board with David on this is I I'd actually mandate that they be there for the first week. >> Okay. >> Um it just Yeah, Salis is hard. It's a grind. And if she wasn't used to this industry, if she was coming from a different industry, she probably thought it was going to be a lot easier. And when you're kind of out there on an island by yourself, it it feels even harder. Mhm. No, fair point. >> All right, Jackie, thank you for subjecting yourself to this. I I hope we're still friends. >> No, it sounds like a whole coaching lesson. I feel so much better prepared for my interviews next week. >> Well, again, you're hardly the first person to experience something like this, but I appreciate you're sharing it. I suspect a lot of people will benefit from the lessons you learned. I want to move on to another topic that's somewhat related. It involves hiring. The Wall Street Journal recently reported that AI is wrecking the job market for recent college graduates. Uh the story talked primarily about the corporate job market and how entry-level jobs are being um just taken off the board and uh college graduates are having a hard time getting started. One thing that was mentioned kind of in passing is that this is creating a challenge going forward for businesses because it disrupts the flow of people who could potentially become leaders in a business and it's not clear how that will happen in the future if these entry-level positions go away. So I guess two questions. One, do you think this is this applies to small and mid-size businesses as well? And any thoughts on how big an issue it is in terms of developing leadership? >> Well, I I mean, I'm I'm excited to jump into this because I'm talking to all these new grads, right? It's tough because I think some people think, well, it's got to be just because of AI, but I think the economic conditions are also helping in part. Um, but we do know that the unemployment rate for earlier careered individuals, it's almost 6%. That's unheard of. And if you're dealing with, you know, Boston, we're at 4.9% unemployment. The new grads are really, really feeling this. And then, yeah, you're not going to have these people moving forward. Everybody wants people to have two to three years experience because they feel like they've gotten something under their belt in that time. Uh, but moving forward, how are they going to learn anything? It's really a conundrum. >> You know, it's interesting. I agree. I don't think it's primarily AI because I don't know enough companies that have integrated AI to take people's roles yet. Will it eventually? Probably, but not yet. What I've seen for us is a shift in interns. We used to have all these super hungry interns in college who wanted to get experience, learn the job, and be an asset with real knowledge under their belts by the time they graduated. We haven't seen intern demand like that in five years. >> Yeah. Yeah. Well, and I think that's part, you know, we went from helicopter parents to the snow plow parents. The snowplow parents are saying, "No, don't get jobs. Your job is to go to school." >> And then they're they're turning them over to me and saying, "Hey, can you help my my kid? I what? They have no internships. They have nothing. And we're I don't even know what direction to point them to. >> Don't send them to me. >> But isn't isn't there a a parallel to this time? If you if you dial back to the early 90s, you know, new grads were graduating and there were not a lot of new positions. and the the the the story at that time was that the baby boomers uh hadn't started to retire and that you know the the corporate ladder was choked with with the baby boom generation not yet making room for new people. I think we've seen this sort of thing before. This is a hot topic of conversation in my house because I've got children that are six almost 16 and 17 years old. So they're about to make decisions about college and so we're talking about know what kind of thing are you going to study that you think will be valuable in 5 years time. It's tough to figure that out. My opinion is that developing like a toolbox of skills you know I have experience with this experience with this etc is going to make someone more marketable. I think the the real danger out there not is not necessarily for the kids or the businesses. is I think it's degree granting institutions. I think the value of a degree is about to shrink here dramatically. >> Absolutely. We know that 40% of um students aren't even working in their line of education. So the work of the the work in the field of their study, it's just it's not available. So big waste. >> Don't you think that's always been somewhat the case? I mean, do you think 40% is dramatically higher than it used to be? >> That's a good question. Um, being a college dropout with an interior design. >> There you go. >> Right there with you. College dropout, pre-law. >> But my kids are four for four on business degree, works in business, chemical engineer, runs a plant, filmmaker, now English teacher, and therapist, about to graduate and be a therapist. >> I think the issue of where leadership is going to come from is a very real one. I mean, I just think about some of the business models that we're all familiar with like like think about law firms. You know, law firms just are not going to need the number of associates they used to have. Uh it's going to be much easier to do research and um that creates the question of, you know, where are partners going to come from. Jackie, even in in your business already, I suspect you could probably get by with fewer people available to, you know, create content, to create proposals, things that with the help of AI, not turning it all over to AI, but with its help, you can do more quickly than you used to be able to do. Um, and we could just go on and on and name other uh industries. Kate, have you seen companies start to get concerned about this? No, because unfortunately we're working with earlier stage companies and they're they're living in the now. Me personally, I look out. But it also, you know, I I think even when I I my daughter was young, I told her your internships, you should almost be paying them to be an intern because you're you're amassing all this knowledge and you're learning and you're growing. But I we're not seeing uh students, young people thinking in those terms. Uh so unless somebody's going to be willing to take a risk on somebody, we're going to have this problem. And that again, everybody's saying, well, we're we're not going to be looking to the future. We need to think about our EBIDA. And if that means we're not going to hire some folks, great. >> And and that resilience you're talking about is kind of what I'm thinking about when I say you want a toolbox full of tools. things that that build your character and everything. You know, a hundred years ago there people didn't have all these degrees. They went to work for a company who hired them because of their their attitude or their promise and then the company trained them. And uh you know in my own business, I know that when I hire someone like on my analyst team, I'm going to have to invest 6 months into them before they're really are productive. This what makes hiring so difficult. uh you know, I want to make sure I pick the right person, but then I know it's on me to turn them into the person that I need to to to have them be productive on the team. And as people see less and less benefit in degrees, I think maybe we're going to be heading back into that kind of environment. I mean, what do you think? >> Absolutely. >> All right. My thanks to David Barnett, Kate Morgan, and especially Jackie Russo. [Music] One thing before you go. Everything we do at 21 Hats is created by entrepreneurs for entrepreneurs to help us all learn together. If you get something out of listening to these podcast episodes, consider joining the conversation. You can do that by joining the 21 Hats sounding board, a Slack channel where you can tap the wisdom of a very smart crowd or by becoming a founding member and joining our monthly Zoom forum where you can be part of conversations much like the ones we have on the podcast. You can sign up for both by subscribing to the Morning Report. If you have any questions, you can email me at lauren21hats.com. And if you get something out of this podcast or out of the morning report, please tell a friend, tell an enemy, tell every business owner you know. Your word of mouth owner to owner will always be the most effective way to build this community for all of us. Thank you. It means a lot. This episode was produced by another entrepreneur, Jess Stubberon, founder of Blank Word Productions. Thanks for listening, everyone. [Music]