← Scrum Master Toolbox Podcast: Agile storytelling from the trenches
Scrum Master Toolbox Podcast: Agile storytelling from the trenches
BONUS The Management Revolution Transforming Company Culture and Employee Engagement | Rob Gallaher
00:45:24
BONUS: Rob Gallaher Reveals The Management Revolution Transforming Company Culture and Employee Engagement In this BONUS episode, we dive deep into the transformative power of profit sharing with Rob Gallaher, CEO of Gallaher Co. Rob shares his...
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- [00:04]
A
Hey there, agile adventurer, just a quick question. What if, for the price of a fancy coffee or half a pizza, you could unlock over 700 hours of the best agile content on the planet? That's audio, video, E courses, books, presentations, all that you can think of. But you can also join live calls with world class practitioners and hang out in a flame war free and AI slop clean slack with the sharpest minds in the game. Oh, and yes, you get direct access to me, Vasko, your Scrum Master Toolbox podcast. No, this is not a drill. It's this Scrum Master Toolbox membership. And it's your unfair advantage in the agile world. So if you want to know more, go check out scrummastertoolbox.org membership. That's scrummastertoolbox.org Membership. And check out all the goodies we have for you. Do it now.
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B
But if you're not doing it now.
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A
Let'S listen to the podcast.
- [01:12]
C
Hello everybody.
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B
Welcome to a very special bonus episode to talk about profit sharing. We'll talk more about that and explain it in a second with Rob Gallaher. Hey Rob, welcome to the show.
- [01:24]
C
Thank you, Vascu. Happy to be here.
- [01:27]
B
So Rob is the CEO of Gallaher Co and he leads five companies across different industries. And since founding his construction firm in 2010, he's championed profit sharing as a catalyst for growth and he even wrote a book about it. It's called Profit Sharing the Power of Shared Success. And he also has some upcoming courses to reflect this passion for aligning employee and company success. And we'll talk a lot more about that. Rob, thank you for joining us. Before we dive into the book and the lessons that you wrote about what got you trigger that interest in writing this book.
- [02:09]
C
Well, I was, I started doing profit sharing in 2015 after five years of being in business and it was very successful. And then I had other business owners noticing the success and the growth that I experienced and they started asking me what I was doing and how I, how I was doing it. So I started telling them about profit sharing, amongst other things that I was doing at the time. I didn't really see profit sharing as this magic bullet that I discovered, but it was a big part of my success. And then I was like, come on in the office and you know, let's set up a lunch and I'll tell you all about it. Well, pretty soon I was spending a lot of my time every week coaching other business owners about profit sharing. And then it was distracting me from my day to day duties and My family, Not really. It wasn't like distracting me, but it was just taking all up a lot of my time. One of those guys asked, hey, maybe you should write it all down. And so that's what sparked the book. So I started writing things down and just becoming more efficient of telling others about profit sharing and exactly how to do it.
- [03:18]
D
Yeah.
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B
And of course that's kind of the external trigger to write about it, but you were trying to address something when you started back in 2015 with profit sharing. What were you trying to address at that time?
- [03:32]
C
Great question. So I started my business in 2010. You know, I lost my job from the 0809 housing crisis that we had. And I found myself to be pretty typical entrepreneur. I was working long hours. I was sacrificing family time. I had two young children at the time. And my. My wife was extremely supportive, but our marriage was stagnant. We just weren't able to spend a lot of time together. Our conversations were brief. And I started looking around at my life. And this was about three years in, so this is 2013ish. I looked up one day and I had 30 team members. I was making money, so I was successful financially, but my health was suffering. I was drinking too much. My kids, I might have saw them 30 minutes a day if I was lucky. I often left before they got out of bed and would get home just in time to wish them good night. And so I started asking other business owners about. About this problem that were in business many, many years and like, hey, there's. I just thought there had to be a better way. And I started looking around and trying to be aware. And I saw business owners that were in their 60s who were on their third or fourth marriage. They had some money and toys, but they did not have a great relationship with their kids. They were not healthy. Many of them were overweight, and they have that. That stressed red look based all the time. And I just thought to myself, you know, I was 28 years old, and I just thought to myself, I don't really like the path that I'm on, and I would like to make a change to this. So I started reading books, just figuring that there was going to be somebody out there that has figured out this problem and finding a balance and finding the problem I thought at the time was being successful in business, but also a good father and a good husband. So I started reading all these books and I learned a lot about operations, SOPs, marketing, you know, all the basic business stuff. Then I stumbled across this Idea of profit sharing. And it's. It's a fascinating topic.
- [05:47]
D
Right?
- [05:48]
C
People hear those words and they're like, tell me more about that. Because if you're an employee, you want to hear about it because you want to get some kind of. Some form of profit sharing from your employer. And if you're. If you're an employer, it's fascinating because, you know, when they talk about it, it's like, hey, if you do profit sharing, your teams are going to be united, they're going to be motivated, and your life is going to become easier and all these great benefits. There's really not a. You don't read about it as a losing situation. So I dove into this topic of profit sharing. Every book that mentioned it, I bought and read. Every podcast that mentioned the words I listened to, I googled, I searched everywhere, up and down about profit sharing. And I found a lot of people talking about it, but I did not find a how to manual to do it in your business. I did not find concrete examples with metrics and percentages and dollar amounts and spreadsheets of how to do it.
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B
And they're looking for something practical that would unlock that. That tool, if you will.
- [06:54]
D
Right.
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C
You know, if you look up communication, there's tons of rules about how to communicate and what to do and very concrete steps, practical, actionable steps to do in your business. But there was nothing like that for profit sharing. But I was so determined to try this. You know, the idea is amazing. And one day I said, fine, I've read it and listened to everything about it. I brought two of my leaders into my office one day, and I said, I have this idea. It's called profit sharing. I want to implement it in our business. So we sat down at my desk with a blank piece of paper and we started writing out what we thought was a good profit sharing system. And when you actually start writing it out, it's a very daunting task, and a lot of questions come up and a lot of what ifs. But we got through it. We came up with a profit sharing plan. That was in 2014, in 2015, the first quarter, we cut our first round of profit sharing checks, and it was an absolute disaster. The company paid out a large chunk of change, and I did not see, as the owner any ROI on that money. Nobody returned the checks. Everybody deposited them. But I didn't see a change in behavior that I thought I would see. I didn't see a change in attitude or culture or any kind of extra motivation from the team. And Because I did it very wrong and so I didn't give up. We made some changes. We, we communicated with the team that got profit sharing and we worked together and it took a couple of years to really hone in where I was seeing the ROI on a profit sharing plan. And in 2018, so fast forwarding here about three years, we never gave up, although I thought about it many times, we stumbled across a very successful, effective profit sharing plan. And since 2018 my businesses exploded and so that's what got the attention of others and we have fine tuned and improve the profit sharing plan ever since then. And it's, it's wildly successful and I feel that if I can help others do this in their business without going through what I went through to figure it out and all the mistakes that I made and everything we did wrong, then I would love to do that and help others be the rewards of a profit sharing plan that allows them to be a parent, allows them time to take care of themselves and just to be a happier, more prosperous human being in general.
- [09:35]
B
Let's start doing that right now, Rob. First let's define it right, because profit sharing is as you said, it's a high level term that many people will have an opinion or some thoughts on. But practice has a lot of details, caveats and so on, as you just illustrated in your story. So let's start by defining what profit sharing means for you in your company today.
- [10:00]
C
Great question. So profit sharing is in. Is a term that an organization would use to take the financial success of a company and share that with the individuals that helped create it. In a nutshell. So I have 10 rules that I write about in my book of how to do it properly. And every single one of these rules were from mistakes that I made figuring this out on my own, you know, month after month, year after year. And we can go through those rules if you want to.
- [10:36]
B
Yeah, at least some. Can you illustrate that?
- [10:38]
C
Yeah, let's go through the top three because I think those are the, those are the big ones that people have questions on and that a business owner listening right now can, can act on this today if they want. So the number one thing I learned about profit sharing was that it must be monthly. And this is a big one that I get discussion on all the time. When I started we did quarterly because in corporate America quarterly bonuses are pretty popular, widely understood thing you hear people talking about order bonuses and so that's how we started because that's all we knew. Well, what I realized was that, you know, a Couple years in that nobody talks about their rent in a quarterly basis. No one talks about their grocery budget quarterly. No one says, my cell phone is $400 a quarter.
- [11:33]
D
Right.
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C
It's always a hundred dollars a month. Rent is X amount per month. My groceries, my grocery budget is a thousand dollars a month or whatever it is. And so when we're paying out quarterly bonuses or quarterly profit sharing, we are not, your team members are not thinking about that money affecting their monthly budget. And if we're not affecting their monthly budget, we're not affecting their daily thoughts and activities because we get up every day to make money that week to get our paycheck because of our monthly bills.
- [12:06]
D
Right.
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C
So this doing it monthly has had people, I've saw people go from, okay, hopefully we get profit sharing in three months. Because in January, no one's thinking about the profit sharing that's going to be paid out middle of April from the first quarter.
- [12:22]
B
So there's kind of a disconnect between the reward, which comes much later, and the effort, which must come every day. Right?
- [12:30]
D
Correct.
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C
Exactly. I love that that you said that, because that for a profit, think about a business owner, you're going to be paying out money, and let's say you're doing a profit sharing on a quarterly basis, you're going to pay out a large chunk of change for success in that first corner. But nobody's thinking about it in January or February. They'll probably start thinking about it the second week of March. And then so your ROI on that money that you're paying out is only. You're only getting the effects of that one third of that quarter if you're lucky. And so I found by making it a faster system, you know, faster reward system, that people are thinking about it. And then they were asking questions like, what do I got to do to get it? You know, this is in four weeks, or maybe I had an unexpected bill pop up or I have a vacation I really want to save for. And my wife is asking me what the plan is. And my plan is, well, I'm going to do these little things every day that we all know in business add up tremendously over time. And so that, that was a huge one that I figured out. And once we started, going to monthly was a huge step in the right direction of seeing the daily activities change in my team to meet that monthly goal. You know, one example I saw is one of my companies is a construction. So we have estimators and project managers and superintendents that are on the road a Good chunk of their day every day. And what I noticed was instead of getting in their truck or in their car to go look at a job, instead of listening to the radio and zoning out to music, they were listening to podcasts about sales or leadership or communication, or they were listening to a book on tape that has to have, that has to do with something, business or self help. They were improving themselves to be better people on the planet. That would make them more valuable in the marketplace. And that was a really cool shift. I never told them, I never asked them. Now I do. Now I remind them, hey, what book are you listening to? Or hey, this is a great podcast on communication. But this was something that happened that I didn't think was going to happen or was even aware of. So then these people are investing in themselves because they're motivated to be the best version at work and at home, hopefully, and help the entire team win and get more profit sharing checks that are bigger. So there's a, there's one of the side effects that I solved by doing it monthly. The, another lesson that I learned is making it substantial. When I first started profit sharing, you know, when we first started, there was a percentage base and we had different percentages for different roles. Some people were getting profit sharing checks, you know, especially if there wasn't a lot of profit to share, they would get a check for $250. And that doesn't move people's needles. Maybe it paid for a nice night out with their spouse, maybe it paid for a cell phone bill, but it didn't really change their monthly financial budget or goals. And then it wouldn't motivate them.
- [15:40]
D
Right.
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C
It was just like a little extra cherry on top of the Sunday. But what you really want to do is make that Sunday bigger. And so I learned that making it the minimal profit sharing check, at least $1,000, a four digit number psychologically and in reality would change someone's financial month. You know, depending on where you live, it could be half their rent or it could be their grocery budget for the entire month or I don't know about nowadays, but you know, back in 2015, 16, $17,000 was a lot of money that would actually change somebody's financial needle.
- [16:17]
D
Right?
- [16:18]
C
So then people were thinking about it. It actually made a huge difference to them whether they got it or not. And they became more motivated to do those daily activities to help the team win. And so those are two huge rules if you're thinking about doing a profit sharing to. I think if out of all the rules you need to have those covered and, and do properly.
- [16:40]
B
Okay, so I think this is a good place to ask the next question because a lot of the people listening to us are in software business and in industries like software where there's also equity sometimes where there are performance bonuses that are typically already available, right? Like you still need to wait for your manager to agree that you deserve a bonus. But if you get it, you get it. And it's typically there, people already kind of expect it as part of the annual compensation package. What should companies that are in that space consider if they want to implement a profit sharing plan or approach that would really boost the success of their business?
- [17:24]
C
Great question. We're in the Silicon Valley of California here and I am surrounded by tech companies and I have a lot of friends in the space and even business owners in this space that either do supplies for the tech world and are in that business. And I asked them this question because you do hear about these startups that have stock option promises and they're using this stuff to motivate their team members. And what I found was that yes, no one turns it around, no one turns it away, no one disagrees to that, they all take it. But what I found is that the percentages of tech companies that make it to that level where their stock is worth a substantial amount of money and then there's is rare then, you know, we, we think about the Googles and the metas of the world where those people that got in early became very, very wealthy because of these options. But it's not the story I hear every day from all the companies. It seems to be a smaller percentage and I don't know exactly what that number is, but just talking to people that I deal with every day, the other thing I would say is that it's a long term plan, right? It could be years down the road where they would be able to cash out on it. And when they do, what is the question is what is that dollar amount really going to be? You know, is it going to be life changing where you can retire or is it going to buy you a, a new sedan? You know, it's probably not going to in most cases change your life. And I think that people think about it and I don't think it's doing, it's doing damage because it's one of those deals that the company wins, you win, right? So there's no, there's no, it's a win win for sure, but it's not changing people's daily activities to think Every day to want to collaborate more with their co workers, to, to improve themselves, to help make, to help meet the metrics or the goals of that month. That's been my experience.
- [19:25]
B
So this is a little bit like the instance of that first rule you shared a minute ago, which is this. They might be quite sizable packages in the end, but you know, maybe they vest in five years, the options, I mean they vest in five years and, and you don't even know if you're going to make any value because depending on how the market moves, the options might be what they call underwater, effectively worth zero. Right. Or they might be worth something, but you don't know. So what you're referring to is this profit sharing approach that you describe as being something that is constantly present, that people value because there's a return for them. And that return is of course shared by the business.
- [20:06]
C
Absolutely, yeah. I have a friend that worked for a tech company for eight years and she was promised a large amount of stock and the potential of that payout was quite large. Well, she spent eight years there. She was like employee number eight and they went out of business and it was worth absolutely nothing. And she worked 12 hour days year after year to get absolutely nothing, which is a risk that business owners take every day. And sometimes people take in those, those markets. And so I don't like it, I don't like that. I think it can be a false carrot a lot of times and create false hopes. And it's a gamble, right?
- [20:52]
B
It definitely is a gamble. Of course, yeah.
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C
That's a gamble. There's no question. Yeah. These people have, you know, they have families and they have monthly bills and groceries to buy. And I think this profit sharing system that I have created is much more practical, consistent and earthly, if that makes sense.
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D
Right.
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C
It's more, it's more for the common man.
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D
Right.
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C
We can all buy lottery tickets, right. There's always that chance, that possibility. And I'm not saying that the tech world and their stock options are, have the odds of a lottery ticket, but it just seems they have more daily hands on influence into that profit for sharing every month for their lives.
- [21:34]
B
There's also another aspect that very often comes with bonuses or bonus schemes in tech companies or other companies, which is this idea of the individual performance review. I very recently interviewed a CEO of a large logistics company here in the Nordics and one of the things that he said is performance reviews are. What did he say? He didn't say are a mistake, but he said that basically they are a very Bad idea. Because if you do performance reviews, it's a bit typically done once or twice a year and the feedback comes too late. And I'm thinking, like, if you do profit sharing, how do you then tackle the idea behind this performance reviews, which is this idea that higher performing people should get more money. I don't know how you do that. And how do you bring the idea of performance reviews, or if you bring it at all, into your profit sharing system? So what are some of the approaches that you've brought to your profit sharing system that either consider or actually go around the performance review dangerous zone when it comes to managing people?
- [22:46]
C
Yes, this is a great question because something that I've worked really hard on, and I actually don't like the word review because you're looking in the rearview mirror, which in your car is a very small mirror, and I want to look out the windshield, which is much bigger, and you can see the future and actually do something today to affect that. So I changed the word review to reflection in my companies. And I don't recall if I mentioned this in the book. Probably not. But this is something that I've been doing for a couple years now. And we do it every six months because every year is two. It's too far out.
- [23:25]
D
Right.
- [23:25]
C
Six months we find to be a much better time frame. I even consider probably doing something quarterly, like you said, you know, do something more often. And then I want to change, by changing the name, I wanted to change the tone and what was happening in those meetings. When people think reviews, annual reviews is a word that gets thrown around performance reviews, they think it's going to be a negotiation for a raise. And that's what people gear up and prepare for. And then on the opposite side of the table, you have a manager or a leader or even the owner, depending on your size. And what's going on, Gearing up to negotiate either no raise or a lower raise than what the team member wants. And so I found reviews to be this conflict of anxiety. People were worried about them, they were stressed about them, they spent a lot of time on them. And then you go into this room and it's a fight. And I just hated that because it didn't. And then. And then people leave the meeting and they're upset A lot of times, not every time, you know, you have some rock stars that deserve and earn what they're asking for. But I wanted to re. I wanted our reflections to be more about, hey, what's going on in your life? What's going on with Their job. And the first thing I say in every reflection, I did two of them yesterday. I do them all year round. So we're on the cycle where we're hitting everybody. And so I'm getting constant feedback every week from at least two members of every team that I have. And it's a lot of time at work for me because I have 130 employees together. And so I gotta click them off and I have to do them all year long or otherwise I'll spend two months straight just doing.
- [25:07]
B
Yeah, that's for sure.
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C
Not getting anything done. So. And so I'm constantly checking in with a couple members of each team all the time. And I'm getting feedback all the time. Not just once a year, every six months. So it's working out really well in that regard. But the first thing I say when we get in there is this is supposed to be an open, two way, constructive conversation. And the purpose of this is growth for both sides, for the team, for you and I. And that brings people's guards down. And then I have an agenda that we stick to. We start out with your performance, we start out with strengths. And then we go through. We don't call them weaknesses, we call them areas for growth.
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D
Right.
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C
And so then, and I found people to be much more receptive to this. And a lot of times, if the managers or the leaders are doing their job right, those areas for growth should not be a surprise.
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D
Right?
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C
They've heard this before and they're aware of this before. And then we track, we track it all, it's all documented, so we can go back to their previous reflections and see the progress of what they're doing. Another thing that I changed is we have six areas of standards, six standards that we want people to meet. We used to grade them one through five. We don't do that anymore because what was happening is somebody would get a 4, which is a really good score, and then they would spend eight minutes arguing why it's not a five. And I just thought, man, this is the most unproductive review because we're arguing about a four or five. You got a four, it's excellent, man. Let's move on. Like, so I just do a standard met or a standard not met. It's either a pass or a no. And then if there's any comments, you know, then you can put the areas for growth to improve on that area. If the standards barely met, per se. But we don't have numbers, I find that kind of. It just seems to spark conflict and People want to argue about that, but that's what I do. I kind of forgot your question was about reviews, but where were we retiring that together with.
- [27:14]
B
I was just about to prepare the follow up, which is okay. But it sounds to me that this reflection process that you have going on is not related to or does not affect the profit sharing scheme that you have available, right?
- [27:30]
C
Correct. Yeah, it doesn't. We don't come out of the reflection and be like, oh, this guy is going to get less profit sharing or not so. And a profit sharing has evolved and I have multiple systems that work that depend on where business owners are in their journey in their business. For example, the biggest one is when you start profit sharing. I recommend you start out as a flat rate and a minimum of thousand dollars. So you take your team. Let's say you're a, let's say you're a flower shop. You're a small, small business and you have 16 members, right? You have some, you have some guys cleaning and then you have a manager and then maybe two assistant managers. So I want business owners to make a new group of people we call DMs, decision makers. I want you to look at your entire team and ask yourself the question is who's making decisions every day that affect profit? And it's not everybody on your team. Some people are just there mopping the floor. They get told what to do. They're not interacting with customers, they're not ordering product, they're not doing sales. So they are not a decision maker. That makes sense. But the assistant manager, she may be ordering the flowers and deciding what bouquets to put together and deciding prices on that.
- [28:55]
D
Right.
- [28:55]
C
With another manager. So I suggest they get their decision making group together and you use that asset question, that acid test, that question. Who's making decisions that affect profit? And those, that's the group of people that are on your profit sharing program. And then to start out, profit sharing should be $1,000. When you make profit paid out monthly. And the way you figure and the way the business owner. Let's get actionable here, the way the business owner figures this out is I suggest they take 12 months of profit and loss statements, or income statements people call them, figure out what your average profit is. So let's say this flower shop is making $20,000 a month on average, right? And we all know flower shops are seasonal, right? Mother's Day, they're killing it. Christmas, they're doing well. Valentine's day, they're making $60,000 a month, right? But on average, let's say it's 20. And then I would take this particular example. We're talking about those three dms. Let's say there's three people that are making decisions that affect profit. The cost of that profit sharing plan is $3,000. And I would just add the $3,000 to the average net profit and we're going to call this $23,000. That's the profit sharing threshold. So when the business makes $23,000 or more, you pay out the profit sharing to those three people. Now, business owners listening right now and trust me on this, because I've done this multiple different ways in multiple different companies and I've learned this, they're going to say, well, I'm paying out $3,000 extra and payroll costs, really? And I didn't make extra money. The business still made $20,000. You're absolutely correct. What's going to happen is within a month, within three months, this is going to happen. Your team is going to get hooked on this thousand dollars profit sharing and they're going to start figuring out ways.
- [31:00]
B
Make it even bigger.
- [31:02]
C
Make it even bigger, right? Or get it all the time. Because they know, hey, maybe in August. Flower shops are slow. What can we do in August to still make our profit sharing numbers? They're going to start collaborating. They're going to, the morale is going to increase. The customers are going to feel that when they walk into the store, the customers that are getting deliveries, that person making the delivery is going to be smiling more and be more apt to provide the best service possible for that customer. These little things are going to start happening. They're going to start looking for ways around the business to save money. How many flowers are we wasting? Do we over order? Those type things are going to start happening and that profit of the business is going to go up. They're not going to try just to hit $23,000. They're going to overshoot it just based on all those things that were improved across the board. And I have a couple stories that I love sharing about this and one of them is in my car wash. And this is not a high dollar amount story, but the I want business owners to hear this because I have a car wash and we mow the our own lawn, right? I bought a lawnmower for 300 bucks when I opened it. And once a week the maintenance team mows the grass and there's two small areas of grass. It takes them probably less than 10 minutes to do it. And I drive by this car wash Every day because it's on my route towards the gym. And I noticed one time the grass was not mowed. One week. I didn't say anything, I just noticed it. Okay, grass looks a little high. I wonder what's going on. Another week goes by, it's even higher. I'm like, huh, interesting. And I have a really strong manager and a really strong team here, so I would just. I don't want to see what's going on. I want to. I didn't want to ask. I wanted to watch and see. Sometimes I'll let things go to see how problems get resolved. And so I assumed maybe somebody was on vacation, maybe it was a slight oversight. And then the third week, I drive by and it's looking good, it's mowed. So then I was curious, I called the manager and I'm like, hey, I noticed we didn't mow the lawn almost all month. And you guys just did it and it looks great. Good job, by the way. But I want to hear why it took a month to mow the lawn. And he goes, oh, our lawnmower broke. And the team was discussing on just buying a new lawnmower for $300. And somebody on that team in the, in the profit sharing program said, well, we buy a $300 lawnmower, that's $300 less of profit. The company has two profit share. And they were like, oh, yeah, that's true. Maybe we can fix the lawnmower. And so they got on YouTube, they watched some videos on this lawnmower and put in the issues it was having. Long story short, for a twelve dollar Amazon carburetor rebuild kit and about thirty minutes of the maintenance guy's time, they fixed the lawnmower and saved the company 288 bucks. And we just had, I had, you know, a little patience with the grass while they were figuring this, having this discussion internally. And so they saved the company $288. And that's not the. What I want business owners to hear. What I want them to hear is that I never got a phone call, an email or a text about a stupid lawnmower and that it was going down and I didn't have to make the decision on either to replace it or to.
- [34:36]
B
You did have to be patient though, right?
- [34:38]
C
Right. So I had to be patient and it's not a big deal.
- [34:40]
D
Right.
- [34:40]
C
If the tunnel was down, they would, I would have been right there.
- [34:44]
D
Right.
- [34:44]
C
They have to call me when the tunnel goes down. But the lawnmower, the lawn being mowed obviously, is not the end of the world, but I love that story because internally, they were motivated to save the company money, and they did it. And that is what some of the effects of profit sharing are going to happen. So just back to our flower shop example. Your team members are going to start doing these things, and you're not even going to know it. And if you're not paying attention, you might not know some of the things that they're doing, and hopefully that they're doing the right decisions. And, you know, you'll have to manage and keep an eye on things because people get some interesting ideas sometimes on saving money and cutting costs.
- [35:28]
B
And that's why we need those reflections to happen often. Right, because you don't want to know about the important things a year later.
- [35:36]
D
Exactly. Yeah.
- [35:38]
B
So, Rob, I mean, I think we've teased the audience enough, right? Like, people are saying, okay, right, I get it, I buy it, but I need to put it into practice. How do I get started? So for all the entrepreneurs out there that want to get started with this, what's the first step that you suggest they would take? Of course, besides buying your book? Obviously, the link is in the show notes, everybody, so make sure you check it out. But after reading your book, what do you suggest should be their first step?
- [36:11]
C
Well, the book's going to break it down for you, but the first step is that there's three things needed to have a successful profit sharing program. Number one, you need a business that makes profit. Okay. Obviously, if you're losing money in your business, you probably shouldn't read my book. You should probably read a book on operations and marketing and get that thing, creating value in the marketplace. Number two, you need to have a. And I. This is the big one that I see all the time. Fast go. That guys are missing. The mark on is you need to have accurate accounting. There's a lot of business owners I talk to, and I'm like, okay, let's see your P and L. Oh, well, we kind of look at it six months and every six months, and we have to do all these calculations, and I have multiple spreadsheets, and I'm just like, wow, that's. I just. It drives me crazy because you're literally driving. You're sailing a boat, and you don't know the direction the wind's coming from when you don't have financials. So that was something I learned early in business, and I've been a big. I use that to help steer the ship.
- [37:16]
D
Right?
- [37:16]
C
You got to look through the Windshield. And your financials help you do that. They tell you if you're winning or losing. And then if you're losing, you need to make changes, right? And if you're winning, you need to double down on what's winning. So you got to have accurate financials. The third thing that you need is you need to be a leader. People have to respect and trust you because when you're sharing profits, people are paying attention to what the company's spending money on. And if they don't trust you, they're going to question you, which is going to lower morale and they're not going to go the extra mile to help you make bad decisions. And dude, there's a lot of ways you can help that. Communication and being transparent is a big part of that. So we're getting into some rabbit holes here that we can go on for an hour, but those are the three things that they need. So if you like profit sharing and you're missing one of those three things, fix that first. And then if you have those three and you're like, okay, I'm ready to do the profit sharing. The book goes through all 10 rules of what not to do and how to do it correctly. We're also. I wrote the book and it's short, it's about a two, depending on how fast you read. It's about two and a half hour read. I, as a business owner with all my ADHDs that I have, I did not want a 8 hour, 600 page novel because I don't read those books. I want short, step by step, actionable things when I look for a business book or something to improve my life. And so I kind of geared it towards that audience. I kind of wrote it to where there's something that I think I would have read that would have actually helped me when I got done reading it. And you can read this book in one week if you just read it 30 minutes during your lunchtime. That's how fast it gets to the point. Has a few stories in there, but it really is just bang, bang, bang. Here's what all the steps, no screwing around, not a lot of fluff. And the first step is really taking your financials that we spoke about earlier, figuring out what your average profit is, figuring out your dms, how many people are going to get it. And I preach that it needs to start at a thousand dollars. This is entry level profit sharing. And I suggest that someone does this for at least a year before they get into the advanced profit sharing, which is more of A percentage base. And then I have positions in the company get different percentages.
- [39:48]
D
Right.
- [39:49]
C
But no matter what, everyone's getting $1,000 or extremely, extremely close to that. And that's what through my testing, because I have multiple companies. So when I want to test something, I can test it with one company first for a whole year before we put it in all the companies. Because if it's wrong or if it makes a mistake, I only get affected.
- [40:10]
B
In one area of my managing your exposure there. I love that.
- [40:15]
D
Right?
- [40:15]
C
Yeah. So that's what you. That's what you should start. And to get more detail, because the book is short and direct, we're creating a course that I put everything I know about profit sharing into and getting down into the nitty gritty details. If someone's really serious about doing this, they need to get the course, watch all those videos, follow along with the worksheets. I go through the spreadsheets that I use that you can have that make profit sharing calculating super easy. One of my favorite things about this profit sharing system is that it is simple. You know, we look. I think we should touch base on commission type plans too. Where I find they're complicated and they always create conflict. Sales guys do not work together. When they get paid commission, they work against each other. And I have. My thoughts and prayers go out to sales managers managing groups of commission paid salespeople every day because I think their job is harder than mine.
- [41:22]
B
Highly motivated, super smart and rewarded to fight against each other.
- [41:27]
C
What could go wrong? What could go wrong? Why is buying a car so stressful? Yes. So there's a lot there. But to answer your question, get the book. Start with that. If you like what you read and you think it's applicable to you, then get the course. And everything you need is right there. Absolutely.
- [41:49]
B
We'll put the link to all of those in the show notes. Everybody check those out. And Rob, before we go, if people want to find out more about you and the work that you're doing now and in the future, where can they go?
- [42:01]
C
Facebook and Instagram and LinkedIn. I got all those profiles beefed up and we're posting all kinds of stuff on there. We'll put the website in the show notes. The course is supposed to be out end of July of 2025. No, end of June 2025. So like in a couple weeks as we are recording.
- [42:21]
D
Right.
- [42:21]
C
And because by the time this gets released, I'm sure it'll be out and they can click on that website link and it'll take them right to the course, the book. We have a mini course if you're unsure that will help you give you more ideas. And that's where you can find me, connect with me and watch all my crazy ideas come together and what I do every day.
- [42:44]
B
Absolutely. Rob, it's been a pleasure. Thank you very much for the inspiring thoughts and ideas you shared with us. And of course, as you said, all the links will be in the show notes. Everybody check that out. But for now, thank you very much for your generosity with your time and your knowledge.
- [43:02]
C
Thank you, Vasco. That was fun.
- [43:07]
A
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- [43:46]
B
Dive interviews as well.
- [43:48]
A
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- [44:56]
B
I'll see you in the community.
- [44:57]
C
Slack.
- [44:59]
B
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