How to Build a Team for Your Business with Kurt Wilkin

Source: GeniusDen archive transcript checked against the recording. Administrative opening and closing material is omitted; the presentation wording is otherwise preserved with light readability edits.

So anyway, thanks, Joe, for having me.

Thanks, Virginia. I love the crowd. I love kind of the high-tech, high-startup kind of space. So I love talking with folks. One of my passions in life is to help people overcome challenges and kind of get to the next level. And so I take it from anywhere from my sports coaching with my three boys to any of my clients I'm trying to coach and help get to the next level to any friend or somebody who's out of work trying to find their next job, helping them think about their career. So I love challenges. Taking a company national, building a business, anything like that. First of all, a couple things you should know about me. So we've got HireBetter is based in Austin.

I did live in Dallas for six years, from 1996 to 2002, where I founded my probably my most successful company, which is called The Controller Group. I grew up in South Louisiana, and I went to the University of Arkansas, and I've lived in Texas for almost 20 years. So I've got Redneck, [unclear], and Hillbilly, and I've all rolled into one. So if you hear an accent, you've probably heard an accent. So I mentioned The Controller Group. Is this too loud, Joe? How are we doing here? Yeah, we're good. Yeah, we're good. So I mentioned The Controller Group. It's a little bit of history on me. So I founded The Controller Group really out of necessity back in 2001 after a dot-com stint, and started consulting, doing finance and accounting consulting.

Kind of picked up more work than I could do and think about, so I started hiring some folks. So before you knew it, we had a real company, and we grew that company to about $20 million in revenue over the next five years, and we sold it to Tatum, to Tatum CFO, back in 2006. And then I moved to Austin in 2002. So one other point of reference that is relevant for you guys. Most of my clients, ever since I really started my entire career, I've been in professional services, so I've worked with a lot of companies. And I deal mainly with what I call high-growth middle market. Joe talked about it a little bit. Generally, $10 to $200 million in revenues, most of our clients, and most of the folks I deal with.

So that's kind of the lens I'm dealing with. The other thing that you'll see is they typically grow north of 20%. So they're going through some radical change, and, again, there's a special – they're going through something special. But it's no different than what maybe a Dell or an American Airlines – there's anybody else growing quickly, or even a Genius Den or any of you guys growing quickly. You're going to have some of the same challenges as my clients have. So just notice the lens I'm talking through. And Vern Harnish calls them gazelles, if you're familiar with Vern Harnish, which I know a lot of people probably love. And the last thing is we're here to talk about teams and really building teams to not just survive and have a nice lifestyle business, but teams to scale your business.

And there's a big difference, and we'll get into that a little bit. So you're going to learn from – I'm going to talk about some of my successes, but to be candid, I'm going to be very raw and tell you a bunch of failures. I'm a big fan of learning from your mistakes, and there's no better lesson in life than hitting your knees and realizing that you made a mistake and you goofed up something and learning from it and getting back up and doing it better next time. So you can hear some of that as well. So moving on to what we want to talk about, we've all heard of the cost of a bad hire. You know that if you make a bad hire, it's going to cost X number of dollars.

I've heard anywhere from 15 times someone's annual salary or something like that. And that's all true. If you make a bad hire, it's going to cost you. I think some of that is a little bit of kind of the HR wonks. We call you respect the HR wonks. It's a little bit of trying to scare you into being very careful and don't make a bad hire. But what I like to think about is what if we flip the script? What if we made a great hire? So instead of being concerned that you're going to fail, it's concerned about what we can do if we really hit a home run. So, you know, if you had somebody on your team, let's say that you're – and I'll use my example. I'm pretty good at sales and relationships and good working with clients.

I suck at execution and operations. But what if I had somebody on my team who was my right hand who could really drive that point, drive our company's execution? What if I had somebody who could drive the marketing numbers, build a sales organization that could run our finance and accounting function to scale us to $40 million? What if I had all those people around me? It's a huge difference. I could write my own ticket. And so my weaknesses, I surround myself with people with their strengths and I can be much stronger. So that's what I want to talk about is those game changers. When I use the term game changer, I'm thinking about somebody who's kind of been there and done that, as we're phrased right here, somebody who's fought the battles successfully, somebody who's already traveled the road that you're looking to travel.

I call those game changers because those folks bring a wealth of experience that you don't have to take. So some people probably say I say this too much, but I recognize that you all heard the phrase, the smartest person in the room, somebody who's the smartest person in the room. First of all, I'm not saying I'm the smartest person in the room. Joe is obviously the smartest person in the room. But first of all, that's not a compliment to be considered the smartest person in the room in my opinion. In fact, I tell my team all the time that if I'm the smartest person in the room, then I'm in the wrong damn room because I need people around me that are smarter.

And if you're able to have the confidence to hire people that are smarter than you and surround yourself with them and let them run, you are miles ahead of anybody else. If you're so concerned about your own ego or the way you're perceived by someone else and you have to hire someone that's below you, you're destined to a long-term struggle because your team is never going to get over the hump. So that's a lesson I learned the hard way. And I'll tell you, I'm going to give an example, and I'm going to tell you, everybody in this room has got somebody on their team like this. But in the late 90s, I worked for a dot-com. I was a controller. And I was big four.

I was a Ernst & Young pedigree, a CPA, a smart accountant. And the reality is I'd never done this before. I'd always worked in consulting. I'd never done it myself. And so when my CEO asked me to do things, I'm like, yeah, I can do it. I didn't know what the hell I was doing, so I'm making it up. And so when I'm there to hire somebody, I'm hiring people that I didn't want to expose me. I didn't realize this at the time what was happening, but the reality is I was probably hiring people that were below me because I didn't want to be seen as a fraud. And what I did after the end of the road is I had built a team of underachievers. We worked our ass off.

We were hardworking, ethical, everything else you'd want to employ, but we weren't a very good accounting firm. The great thing is we never made any revenue or any money anyway, so we didn't have anything to count. That's another story. But I guarantee you, there's people on your team right now that are hiring below them because either they're concerned about their own, the way they appear, they're too busy, which is another reason that happens, or they're too lazy. And so that happens a lot. So you fast forward a little bit, and I learned from my mistakes. I found that the controller group we talked about, again, kind of out of necessity, but that's how I think a lot of entrepreneurs are built, kind of out of necessity or out of being laid off or something like that.

And I learned that while I've got my strengths, I'm very good at certain things. I'm very good at connecting. I'm very good at relationships. I'm very good at solving problems. In fact, I try to solve my wife's problems all the time. I'm too appreciative. But my strengths are not operations. My strengths are not accounting. And so what I learned is I needed to surround myself with people that can do that. And so I think I mentioned the controller group was a finance and accounting consulting firm, which is a little bit weird. A bad account starts an accounting consulting firm. But, again, I was able to surround myself with people that were strong.

So I want to tell you, to use an example. Again, there are people on your team who are bad accountants, they're bad technology professionals, they're bad salespeople, and they've risen through the ranks, and they're building a team around them that are not adequate to get you to the next level. So when you were a startup and you had all hiring within your purview and you were able to meet everybody, you may have had a better handle on it. But now that you've started divvying that up to other folks and having them help you hire, they're making mistakes. It's hard to fix. And sometimes you can still grow. Sometimes you can still grow nice and steady, but if you're really trying to make that a clutch point, you're really trying to get to the proverbial next level, and it can happen.

So I asked the question, does any of this sound familiar? Does anybody have anybody on their team that's overwhelmed or hit over their head or anything like that? I bet you work right for yourself. By yourself. So, again, the beauty is I know this about myself. And after we sold the controller group, I worked there for the next three years kind of building that and growing that to, I think we ended up with about $40 million. And I was kind of looking to see what I wanted to do next. As Joe said, I've done some angel investing. I've done some consulting. And I really determined that's not what I wanted to do. I wanted to really put all my energy and my capital and people behind something I could believe in.

And so we actually made a couple failed attempts at buying some other businesses. And we stumbled upon HireBetter, that Jonathan Davis and Joe talked about. And I looked at the world that I was familiar with, which is this high-growth middle-market world. And I firmly believe that if you have capital and if you have talent, any entrepreneur can do anything. If you've got those two things. And I'll just kind of paint a picture. If you have capital, you can weather some storms. You can weather the economy. You can weather 9-11. You can weather Katrina or Obamacare or something like that. If you have a bad team, you're just going to be stuck in the mud.

If you have a team that can flex and make opportunities out of those challenges. I was talking earlier with Bree about competition in the tech space. Competition is opportunity. Challenges equals opportunity. So if you're looking and staring at your face and saying, wow, the economy sucks or you can't find talent, that's an opportunity for you to make it. And good talent can help you make that happen if that makes sense. So I passionately believe that those two things can drive change, especially in this kind of high-growth space. So what if, if that space is so, if talent is so important to what we're doing to try to grow companies, it's so important.

Why is it served, why is it served, with all due respect to the recruiters in the room and all recruiters elsewhere, it's served by a relatively shady industry. The recruiters have kind of, the recruiting industry has built a bad reputation. We've got a transaction, a broker, a used car salesman, whatever you want to use. A lot of us have had experiences, bad experiences with the recruiters. We've also had some good ones. But as a whole, it's a tough industry. So I looked at the space, I looked at the need, and I determined this is an area that I want to sink my teeth into because I want to use this next stage of my career to make a difference in the talent world.

So that's kind of where we came up with in Hire Better. And the interesting thing about that, if I'm being totally transparent, I told you I'm a bad accountant. I'm also a bad interviewer. And my problem is probably a lot of entrepreneurs, I want to like everyone. And so I promise you, if we go to lunch or whatever, we're going to have a cup of coffee, I'm going to find something to like about you, even Joe. And whether you went to Arkansas, whether you've got kids, or whether you've played sports, or whatever, I'm going to find something to like about you. So when I interview, I interview like that. I want to find whatever I like about you, and I'm going to say, man, there's an opportunity here for this person to come work for us.

It doesn't always work. And I promise you, people on your team probably interview the same way. You've all kind of been down at the lunch table or a coffee table, and you sit down with somebody to interview them, and you hit it all? Like, yeah, I want to hire this person. Well, tell me about your background. I don't know. He plays golf. And that's kind of the mentality. Well, the good thing is, I recognize this about myself, and I've surrounded myself with a team who can vet, screen, qualify the shit out of you, for my friends, to make sure that you're a good fit for the team. My job as CEO is to then sell you on the vision of what we're building, and to sell you on the opportunity that we've got for you.

With the hope that my team has done a good, great enough job screening, but now I'm kind of in sales mode versus betting mode. And that's, you know, it goes a little bit to tell you what beautiful country you live in, that a bad accountant, a bad interviewer can start two consulting firms and, you know, be very successful. But that's what you can do when you've got talent around you. I've made that picture so that you kind of see where I'm coming from. And pardon my [unclear] here. Can you edit this out of the video, Joe? Yeah, sure. So I mentioned three things, and my hands are full so open, I'll try to write them anyway. Three things that you need to kind of write down and know when we're talking about talent.

So Joe asked me if I was a good, if I could write well. These will also be on the show notes on the website. All right. So is that big enough? Yeah. Form an honest appraisal of your team. What I mean by that is know what your capabilities are. If you're, let's say, $20 million in revenue now and you have your sights set on $40 million in three or four years, that's pretty rapid growth. And so if you take a step back, before you go out and hire a bunch of people because somebody told you you needed to, take a step back. Think about where you're going as an organization. You're $20 million now going to $40 million. Well, how are we going to do that?

Well, I'm going to open an office in Houston. Maybe I'm going to launch a new product. Or I'm going to acquire a competitor. All those answers are unique and they all require a different skill set. So then let's appraise our existing team. So I usually have eight functional areas that I think I'm going to do this exercise. Leadership, finance, operations, marketing, sales. You're going to go around through the functional areas. And think about who's leading to those areas. I'm happy to share those with you. Who's leading to those functional areas? And then I ask two questions, really simple questions. The first question is, can this person get me, do they have the skills and the expertise or experience to get me from $20 to $40 million?

And be honest with yourself. Okay? Maybe great guy, good friend, done yeoman's work. Does anything I ask him to, get over his head. Let's be honest. Second question is, knowing today about what you know about your company. And what you know about this employee, would you, this is a Vern Harnish term again, if you're a Vern Harnish fan. Would you enthusiastically rehire them to do the same job? And it's, again, simple question. Simple exercise. But it's so powerful if you're honest. Because what you're going to find is exactly what I just described. Good people that you would go to war with. And there may be a great individual contributor. People get promoted all the time.

We call it a title inflation. Get promoted all the time. Now I'm the CFO of a company when, you know, I'm really a controller at best. Or I'm the sales manager, VP of sales. Got five people that report to me. I'm a great sales guy. I suck as a manager. But that's the other thing with CMO. Okay. Actually, I've got a good example for you. So one of our clients is an Indianapolis insurance company. They're about $37 million in revenue. And they're about a 15-, 20-year-old company. They grew nice and steady over the years. And they built up a huge staff. And almost a founder-led. And the two founders were very hands-on. And so they kind of had their fingerprints on everything.

So as a result, they had no leadership team around them. They had a group of folks who kind of did what they were told. And they had become almost, I'll use the phrase, governmental in nature. With all due respect to people who work with government. And so there wasn't a lot of go-getter mentality. And we're going to get to $70 million type of mentality. In fact, when the leaders, when the founders went in and said, hey, Obamacare has given us this great opportunity to go out and double our company, everyone would say, no, we can't do that. You know, we're shying away from them. I was afraid of revenue. And so they brought us in. And we kind of did an assessment.

We did that exercise I just described. And the answers were no, no, no, maybe, no, yes, maybe, no. And just eye-opening. So it's a powerful exercise. So did you use assessment tools? We have a tool we call a strategic talent plan. It's not rocket science. It's something we created from leveraging other folks' work. So it's a big bar and steal from everything I can. And I'm happy to share any of that stuff with you guys. You want to just make a note of what you want. Sure. Okay, yeah. I've got another example. And this is, I think, going to resonate with most of you guys. We've all seen some example of this where an entrepreneur has a company, has some growth, needs somebody to keep his books, her books.

And so they're fraternity brothers, sorority, sister in college. You know, it took three years of accounting. Trust them. Why don't you come and, you know, keep my books for me? And so they learn QuickBooks. And they're trusted. And they kind of do a little part-time deal. A year later, they're able to take them on full-time. So now they call themselves a controller. And three or four years later, the title of the place is to become CFO. The company is now $5 or $10 million. And so they're actually, you know, a real company. And then as the company continues to scale, the CFO is trying to do more creative things. They're trying to negotiate a $10 million bank loan.

They're trying to sign a merger agreement. They're doing stuff that they have no idea what they're doing. And sometimes you can mentor that and coach that and help that. And sometimes they're simply in over their heads. And so we see that a lot where it doesn't mean it's a bad person. Let's maybe put that person back in the controller role or individual contributor role and bring in somebody who's kind of been there and done that again to steal that term. So that might resonate with you guys. Maybe not. We see it a lot in that area. Okay, the next one. I don't anticipate writing anything down. So it's not really that pretty. I feel like my seven-year-old.

Be prettier to write. I will, sir. No problem. All right. So plan, be proactive, and be patient. So what do I make when I say that? First of all, I know most of the people in this room are probably not patient. They probably don't plan very well. So I completely appreciate that because I'm not either. What I'm saying is let's, you know, most people when they're hiring, they hire quickly. And they hire whoever's available. They hire somebody who's out of work or a friend of a friend. It happens all the time. But let's plan for what we're going to do. If we do this exercise up above and we determine what we need long-term, let's make a hiring plan for the next 12 to 18 months so we can be proactive with our hiring.

Instead of a reactionary and fly by the seat of our pants and, oh, shit, my hair's on fire. I've got to hire somebody today. Let's hire somebody for four months from then. Then I can take my time. And I can make a great hiring if I can be proactive with my hiring. I've got some great examples on that, too, if we run it. If we have time, then I'll tell some stories. And the last thing is, this is my favorite. So leverage yourself and play to your strengths. What do I mean when I say that? Most people, most entrepreneurs especially, try to do everything themselves. Nobody is better at me than that. I've got to be the one that meets with that customer.

Or if nothing gets out of this door without me seeing it because it's so important to the market, I've got to look at all the marketing material or anything like that. The problem is it's not scalable. I think we can all agree it's not scalable. But also, you know, the term a lot of people use is called the calendar's trap. It's where you kind of get stuck in this kind of never-never land where you're doing everything yourself. It happens all the time. This is a little bit what I was talking about before. We're hiring somebody that complements you. So if you're the sales guy, let's go out and find something to use the operator. So I've got a couple of examples here, and one that you'll really care about and one that you won't.

And I'll start with the one that you won't since you're trying to listen. The one that you won't is myself. So I mentioned that I know what my strengths are. And so with the controller group, I had a partner who was an ops guy. He handled all the back office stuff. He handled all of our billable hours, all of our employees, all of that stuff. Well, I get to focus on clients and relationships and alliances. And it worked great because I had complete trust and faith in him and vice versa. With Hire Better, I didn't have that. I was doing it on my own, and I kind of fell into this boundary trap. I thought I had the operations person that was strong enough to do it, one of my former employees.

And I did exactly to her what I described that these good folks do with their CFO. I expected her to be more than she was capable of. And I set her up to fail, put her in a position to fail. And it sucked. And I love her to death that she's not that operations partner. So I'm, as a matter of fact, right now, I'm hiring a chief operating officer that I'm bringing in to essentially be my right hand and really help us scale. Because, again, it happens to all of us. So the example that you will care about, some of you have heard, I think, in some of the commercial material we had Deep Eddy listed there. Deep Eddy is a client. And Clay Christopher, who founded Deep Eddy's a friend.

And I'll tell you the story. It's a case study of ours, and I love it. It's a great story. So if you're familiar with Sweet Leap Tea, most of you may be. It's a national tea brand that's an honest tea or ozone tea. They were sold domestically a few years ago. And the way to give you some background, it was founded basically, and you can read this on his bottle, it was founded in his grandmother's bathroom, or his grandmother's house. And they actually grew tea in his grandmother's bathtub with pillowcases to hold the tea. And it's a great story about how they bottled it in the garage, and that's where they started. And they grew over an 11-year period.

They grew to $15 million in revenue. And the way they did it, they did it the old-fashioned way, I like to say. They rolled up their sleeves. They worked 24 hours a day. They hired interns. They hired cousins and their mom, who backed the boxes and everything you could think of a startup would do they did. And they got there. They got there, again, to $15 million, which I think we can all agree is a great success. And then about that time, they had attracted Nestle, who came in and put in. They didn't buy them, but they put in an investment, some investment capital, and said, let's take this to the next level. So they immediately brought in the sales expertise, people who had the relationships with the distributors and the retailers and everybody out there.

They had the operations experience, people who had scaled CBT companies and similar build. And they, again, essentially bought experience from other folks. And their revenue and their profitability did that. And three years later, they sold to Nestle, the whole thing, for $183 million. So great success story. And very few people have that kind of success. So fast forward a couple of years when he found the Deep Eddy Vodka. And he and I had some really candid conversations. And he said, Kurt, I've seen the light. I've seen what it looks like. If I can hire people who've got the experience, I can get there faster. So what I want to do, quote, I want to buy real events.

I want to buy their experiences. I want to bring people in and have that experience. And he did it. He started from the beginning. Actually, I think it was year two when he brought in the CEO. Too hot. I think it was year two when he brought in the CEO. And I'm not suggesting everybody brings in the CEO to replace them. But I am suggesting that you can bring in people who have that experience. So in Clay's case, they grew to $15 million in EBITDA in three years versus 11 years for Sweden. So, again, amplify growth. The rest of that story, it's not our case study, but it soon will be, is Deep Eddy sold about a month ago to Heaven Hill in Kentucky for a rumor between $350 and $400 million.

So if anybody asks me what we want to be as a firm, we want to be the firm that can amplify growth. Because everybody's capable of it if you can build yourself with a great team. So I'm happy to share whatever stories I can on that part of some things I can't share. All right? So just to repeat again on the hiring of the number two, I can't tell you how important that is to hire somebody who complements your skill set. Again, we see it very often with the sales-minded person bringing in the house. All right. So if you've appraised your team, you've planned and you're proactive and you've actually leveraged yourself, what is, like, the one key takeaway that you can go home with?

I'm not going to write this down because it's in you. What did you actually do to really try to make yourself better? Is it something you can take on tonight? You want to ask me? If you want. What can I do? What can I do? And my answer is this. It is take a look in the mirror. And I know that sounds a little bit crazy. But if you're trying to attract a game-changer that can really amplify your growth, take a look at what you have at all. Because game-changers aren't trolling job boards. They're not looking at LinkedIn. They're not looking at Monster or CareerBuilder or any of these other boards looking for jobs. They're gainfully employed and they're building someone else's company.

So when you're able to find them, in order to attract them, you need to have a story. Most people in the high-growth space, when they find somebody that they want to hire, they're used to hiring people off the job boards. So with all due respect on anybody on a job boards, it is not hard to attract somebody who found you on a job board. All you have to do is say, here's a paycheck for the most part. But if you're trying to find somebody that's gainfully employed at Awesome Genius Stadium, you're trying to pull them over to hire better, I've got to have a story. Not only do I have to have a story that sells them, but I also have to attract them with a market or above-market compensation.

I've got to attract them with a good place to work. I've got to sell them in the interview process. If I bring them in, like a lot of companies do, and I have a freshly printed resume on my desk, and I say, hey, Brie, tell me why you left IT Solutions. And then the four people in your company asking the same flipping questions, you're never going to attract a good person. You're going to attract the other-world person, but you're not going to attract the other person. So that's, I think, the biggest thing I can tell you to do is be attractive and sell yourself. There's so many times, even some of our best clients – not our best clients, but some of our clients – we can attract, we can find and identify game-changing, awesome talent.

And when they go into the interview, if they're treated like that, there's no way you're going to get them to come up. So I'm stepping up for getting it. Yes, ma'am? How many clients do you have that have really executed the plan and be proactive as well? Because I run into it so many times, it's just a matter of how they've budgeted for that year. So it's, okay, now I have the allocated funds, I've got approval, now I can hire for it, but I needed it four months ago. How have you seen that executed really well? Yeah, our challenge is we don't sell to HR people or to the hiring managers. We have to sell to the CEO because they get that and they can find room in the budget.

If we're selling to the HR people, they feel threatened. And if we're selling to the hiring manager, they just have the pain they need to solve now. They don't really care about the rest of it. So it's really a C-level type of discussion. But it does happen. And there are clients that don't get it and we don't work with them. Yes, ma'am? What if you have like an immediate need, you know, like you just, a client just landed on you and you just don't have the people to deal with it, you know? Generally or what we would do? Yes, generally. And what would you do? Generally is there are a lot of good people out there that you could bring in for a kind of an emergency situation as a consultant.

I would encourage you not to hire really quickly because it's harder to unwind that. It depends on the situation. If it's a model-solving position and it's easy to fill, right? If it's at the executive level or the VP level, I would take the time. Okay. And what we do is we actually start in the staffing division which solves immediate problems. Just in finance and accounting. Yes, ma'am. How about compensation? Great question. You can contract and sign them up, but if you can't retain them, you're screwed. You know, do you want to talk about retention or do you want to talk about compensation or both? Yes. So my belief is, and I think other people share this belief, people come for the money or they come for maybe the company or the system.

They stay for other reasons. And we've got to find out what that reason is. Maybe it's for a manager. Maybe it's someone that they work with. Maybe it's the brand. Maybe it's the healthy living. Maybe it's the community. Maybe it's the compensation. But understand. Try to find what that key is that drives them and what keeps them there. And some people call it a stay interview. You've heard of an exit interview? Think of a stay interview. Why are you here? What can we do to make your life easier, your job better? We value you. I personally believe that. But I'm sure the industry probably thinks that there's an easy answer in technology. So just to define who the gold hat and handcuffs are, a way to keep you to stay, you get a bonus.

My belief is that if you need gold handcuffs to keep them, they might not want to stay. And it can be awkward. I would rather, just for my own company, I would probably rather have you stay because you like the work that you're doing, I know you like the people you work with, and I prefer not to do that. But I have had clients who've had great success with, you know, someone makes stuff that maybe, like half their bonus goes into a pool that they get in five years. It just kind of seems awkward if you're having to stick around for that long to get a big check. And are you really happy? Are you going to take all the questions? Yes. Okay. What do you mean by – actually, the other gentleman had a question, but I'll give it to the equity conversation.

Okay. So how – what's the question? How that compensates people with equity. How to compensate people with equity? Would you believe in that? Okay. I still believe in it. I know that the dot-com bust, there were a lot of people that got burned by it, didn't really appreciate it. And as the CEO, I'll tell you that people don't appreciate equity as much as you think they would. And most people appreciate cash, cold hard cash much more than they appreciate equity. When we sold the controller group, we didn't have an equity package, but we compensated people as if we did. So we kind of put a pool of money and said, we're going to pay – you've been here for five years, and we'll kind of come up with a calculation.

And there was nothing worse than doing something nice for people and giving them a slug of money and having them be unappreciative. So the people that got the $1,000 were, like, ecstatic. The people that got the $50,000 were, like, oh, [unclear reaction to Kurt's gift]. You're an asshole. So – I don't know if that answered your question. Yes, sir? Would you bury your – Your point about tech, which is one reason why we don't do tech, is I don't have a tech team. I want people working on my stuff, right? I just don't want to do it for that stuff. That's another question, another topic. Yeah, so the same as Deirdre? Deirdre, sorry. That was Deirdre's question.

You know, there's – I think you have to be open to different options in the way to structure things. And that's why, as much as the recruiting industry has kind of become – people want to put a technology around it, and they want to say, we can solve your problem with a push of a button. It's not. And you can maybe screen – I don't know. You can do some of these things technologically. So much of it is an art. And you're trying to deal with a human being and trying to test that – find out their strengths and trying to sell them and trying to touch their heart. It's an emotional strain. So – yes, sir. What if your company – it's on number two. What if your company has a lot of traction because you have the staff that you can't just have them – if you hire a lawyer, you hire – they're good people.

You'd go have a coffee with them. They're kind of like the friend, the accountant friend. They complete the job, 75%. That's passing, right? But they don't fit the vision. And you're starting to get to the point where you're thinking, how much is that affecting my bottom line? How many customers have I lost? Because they aren't the type of person that I really – if you're out of here, here's your severance package. But then [unclear question about handling terminations across locations]? You know, you start creeping one location at a time and then hope that the work doesn't get out. Give me a little beer. And then hope that the work doesn't get out. There's, like, a vast exodus of all your employees.

Let me make sure – see if I recapture what you said. The first part was what if you're going so quickly and you don't have time to be proactive, I think, the part of it. The other part of it is what if you've made hiring mistakes and you realize a couple years down the road that you've made hiring mistakes. Is that right? Yep. So every situation – so when I say you're proactive, it's – sometimes you can't. Especially at the store level, you've got to get stores staffed and you need people. You probably have a pretty good system around that. Most people don't have a good system around executive level hires, and that's where I would for sure take the time.

Don't hire – you might maybe hire a consultant that wouldn't hire a permanent employee at the executive level. I don't know if that answers your first part, but let me address the second one. If they're underperforming or if they have a bad attitude or if they're losing customers over it, in my opinion, you're the last to know. Their teammates probably already know, and they're wondering when the hell you're going to fire these people. It's just reality. And so the sooner you can move on, I don't know about calling a meeting and getting rid of 50 people. That's a little different. I wouldn't encourage that unless you really were in the skid or something.

But Jack Welch believes in getting rid of the bottom 10% every year. I think that's a little draconian, but I think there is an element of making sure that all of you people, you know, for people you can rehire again. Remember the question, would you enthusiastically rehire them again to do the same job? And I think that's a healthy exercise, actually. And rarely are you going to hire somebody who's underperforming, bad attitude, not showing up or whatever, and anybody's going to be pissed. So how diligent are you on background checks? So there's different kinds of background checks. If you're talking about reference checks and things? Well, tell us about it.

Okay, great question. Okay. So there's multiple kinds of background checks, in our opinion. The ones, there's reference checks where you just check and see if someone's a good person or did their job and that kind of stuff. There's credit checks, you know, what their credit looks like. There's criminal reports and things like that. Anything I'm missing? Are you asking me? Because I'm the expert. He's a hard guy, yeah. Oh, shit. I told you I didn't know how to do anything. Let me call my team and see what you want to say. So I believe that the traditional reference check is a little bit crappy. That's the one where you say, give me three references and I'm going to call them.

Because it's their sister and their brother-in-law and their coworkers. Now, if you're a fan of Topgrading and Brad Smart and Geoff Smart with what they've done, they have a thing that they call threat of reference check, which is where you actually ask during your interview, you say, hey, so you were at the technology professionals and you did such and such. I'd really like to talk to your – who did you do that project with? I'd really like to talk to Jim. And so just that alone is enough to have somebody either not want to do the job anymore because you're going to call Joe or you can at least get them to be open for you to call him to Joe.

Now, legally, I don't think you're allowed to call Joe unless they introduce you. I do a lot of things that probably aren't legal where I would – I've got a big network. So I'd probably call Joe and say, tell me what's going on. I don't know if that should go on the Internet there, Joe. But I like to do kind of backdoor reference checks. And, again, I'm not an HR person, so I'd probably get vilified for this. But if I know somebody who worked at that company, I'm going to call him off the record, tell me a little bit about this. And with our clients, if we're doing everything above board, we actually are going to try to find folks who work with them that aren't on the reference list, and we're going to call them and get their permission.

I think that's a roundabout way of saying, we're legal, I'm not. That's what we did as well. Exactly. The other thing was – the other check. So if you're hiring anybody in the maintenance department or anything kind of in your operations handling cash and have access to inventory, that kind of stuff, do a credit check. It's relatively easy. Again, I'm not an HR professional, so that might not be legal. Is that legal, Joe? I think it's legal. Sure. It is, yeah. As long as they sign off on it, then they're – Yeah, permitted credit check. Yeah. And then the other is criminal. And criminal can – now, I think legally you can't hire – you can't fire them.

You can't not hire them based on something that you find, but it can allow you to ask questions about it. So things like a DWI or child porn or something like that, maybe you can ask about. If it's – if you have a – I'm going to give you my one piece of HR advice, and that is if you have a handbook, a handbook, you should spell out things that you would – you know, this is pretty – I just want to make sure I'm not telling you anything wrong. If you have – if you want to not hire somebody because they have a DWI or because it's child porn or whatever, you should have that kind of stuff in your handbook. And then you can point to anybody that says, we're not hiring you because of this.

You can't just blatantly say, we're not hiring you. I'm better at the culture stuff. Anybody have a non-HR – That's another startup speaker series lecture, yeah, how not to get sued. Well, it's interesting. I told you we don't really work with HR professionals much, even though I think it's a great career. HR professionals and anybody who has their own company, if you're an HR person, you typically have 30 things that you're responsible for. You've got a big job. You've got everything, people related. But you're only fired for doing – for missing certain things. You're fired if you miss compliance filing, you miss payroll, you screw up benefits, you, you know, any of these types of things.

You're not typically fired for not being able to hire you because there's always an excuse. There's a jerk. We're not paying enough money or whatever. You don't get fired for that. And you also don't get fired for having a proper culture. It's just a kind of innate thing that you can't really measure. You can measure missing the compliance filing. That's my little piece on the HR issue. How many people have I pissed off tonight? Because I've met the – how many brokers, how many – yes, sir. I was just going to tell you that you were talking about credit checks. You want to be very careful when you do that because you need to do a credit check.

[Unclear legal reference]—you can be subject to it. You can violate that in all kinds of ways. That's why I shouldn't be allowed to answer the question. You can avoid doing credit checks. You should avoid doing – You can't. I can't. I'm going to just repeat that so – Yeah, I think what he said was if you want to try to avoid doing a credit check, you have to comply with [the same unclear legal reference]. I don't know if you have a full legal name, but basically once you do the credit check, you're automatically subject to that. It's just like a parallel would be – what do you call it when you take credit cards? PCI? Yeah, PCI compliance. It's similar to that, but much more stringent.

It's been around many more decades. It's not something you want to be on the wrong side of. So you can avoid credit checks. I don't know why you want to do a credit check just to hire someone. Well, if you're hiring a CFO or an accountant, it's a middle of that. I hear you on that. I do suggest you can talk to a professional on that because there's some cases where I would definitely suggest to this point. So, Kurt, I'm going to ask my cleanup batter question and then we can ask one more unless there's two more, two more, if that's okay. And then we can always talk afterwards as we're wrapping up and putting the tables up. If anybody wants to help us move chairs, it's welcome to you.

Tell us about your – how important it is for you looking at the resume, which is my marketed version of what I want you to believe versus a career history form. Do you use them? How valuable do you think they are? And how much – how many discount points do you take off for someone that's taken time off to take care of for a reasonable reason like take care of a loved one or go on the vacation of their life for a while? I know a number of people that are really career-minded and are a little afraid of taking that six months off and they feel like that's going to be a gap in their resume. I know obviously that someone who's – I sat around and watched TV and was in depression is someone that you don't want to hire.

That doesn't go on the resume. That doesn't go on the resume. So in a career history form, tell us a little bit about the gaps in employment and how you tend to see those with A players, successful team members, that sort of stuff. Can you talk on that? I can speak very high level on this one because the career history form is a Topgrading concept and it kind of goes through your career history. We don't really use those anymore. Okay. So I can't speak too much on that. But I will tell you that a resume is – it's a lot of fluff because it's what we want everybody to hear or see. The reality is as much as we try to get our clients off of resumes, we try to give them a little bit more of a story.

So we're going to – when we work with our clients, we give them a profile of exactly what this person has accomplished, why we think they're great for a job, why there's things you need to ask them, some concerns. But really it's a story. And what most clients want to do is look at their resume. And I don't think most clients probably even understand the concept of what you just described. Okay. So what about career gaps? Good question. So what I'm going to tell you is probably the opposite of what most people would tell you. I believe that I want to understand what career gap is and understand – make my own decision about whether it's valid or not.

And I think there's probably a portion of the industry that would say you took six months off, you probably weren't drinking beer or sitting around watching – Give me some money. Did that mean anything? Yeah. Yes, sir. Go for it. Oh, wait. Let me ask my second question. What's used now instead of career history forms? For our company? Sure. We have – we do follow some of the concepts. We try to understand when we paint a picture with our clients of what we want this person to accomplish. We call it a blueprint. We are scoping out a job. We create what we call a blueprint. It's not a job description. It's more of a – because a job description is usually cobbled together with some bullshit wish list.

They get off the Google search for control of a job description. And we build a position – I'm sorry, a blueprint position profile. What do we want this person to accomplish? What does 90 days look like? What does one year look like? What does success look like? And then we try to identify candidates who have that same experience. And when we see it or hear it, we ask and validate it. So that's our approach is more – you say you've implemented SAP. Talk me through that – how that went. And, you know, that's where we might identify the people we've talked to and talked about. It's all about their experience. Okay, thanks. There are some people that just want opportunity and attitude, especially in the retail space.

And that's great, too. But for what we're doing, we're looking for experience and expertise. Yes, sir. Well, when you're talking to a client and, you know, they say, I want to go from $10 million to – you start thinking about the plan of, okay, here's our hiring plan. Are you usually trying to do a 12-month plan or are you doing a six-month plan? And then when you talk to the potential hires, are you going to them and telling them, okay, here's what your career path will look like, you know, two, three, four years down the road? Or are you just saying, hey, here's what we have to do right now? Good question. On the first part, we would typically try to line up 12 to 18 months.

The reality is in these companies, things change so rapidly. So the three-month plan may change. So we could typically identify the first couple of key hires. And that's where we would start or we would encourage them to start. And then we would check in every quarter and keep kind of redoing the next 12 months. Your next question about career path. So, again, the market we're dealing with is a high-growth middle market. There's not a lot of – there's a career path. But it's more – we don't know what it's going to look like, but we'll know when we get there. As opposed to, like, in the big companies, you can say, well, in two years you're going to do this, in four years you're going to do this.

We don't have a luxury. So it's really about selling the opportunity that we have today. And because we're growing, there's always opportunities for growth. And people who appreciate that, there are great candidates for your employees. People who want the title or want the – they want to know what their next step is for whatever reason. The right moment is, right, because I also believe that if you're hiring somebody, you should know enough, especially if you're hiring enough to be dangerous. Rephrase, repeat. Yeah, so the question essentially, I think, is if you're growing rapidly, how do you know what the right time is to bring in those executive level hires and really take the leap both monetarily and personally to make those big hires, especially your first time through and not your second time through this kind of transition?

How do you know? Is it a dollar amount? Is it a growth rate? Is it a three years in or whatever this number may be? I think the simplest way to put it, I would think, would be when we're – as entrepreneurs, we are working around the clock and we're doing things that we struggle at and that maybe we're not that good at. That's definitely a red flag, that we need to – there's somebody better that can do that. I mean, I've got friends that have $14 million businesses and they're still doing the flipping accounting as a CEO. And trust me, there are people better than them than that, and they can pay $50,000 for somebody to do that, and they can go create $10 million worth of value.

So when those types of things are happening, you'll know. If it's your second time through, you'll be – you'll just have that experience. And there's – I can't say enough for groups of folks who – surround yourself with folks who've done it before. So in my case, I'm very active in YPO down in Austin. It's Young Presidents' Organization, great organization. There's other ones, there's three or four chapters here in the town. There's EO, which is typically smaller companies but a similar type of concept. So the Young Entrepreneurs' Organization, now called EO. There's other professional organizations where you can surround yourself with people like you that are having the same or have had the same challenges.

And then you can have people to bounce off of. And there's GeniusDen. And there's GeniusDen. I didn't know you did that. That's a part of what we're – Well, I think I said it's true, hanging out with folks who – You can have four founders, yeah. Absolutely, great point. Thanks for that. And then there's business coaches and professionals who can help you with something. I understand you're a great side. There's also Fort Work, which is a coworking space. It has a lot of founders and a lot of great stuff. Warren's here and runs Fort Work. So Dallas is filled with phenomenal collections of smart people. And get plugged in if you're not already in one of these.

Yeah, let me touch on that for a second. You didn't ask this question, but let me phrase it. Let me say it. People who have had success, most of them want to help. And so you would not believe if you gave a phone call to somebody and said, you know, the name of your company and said, I really love picking your brain on something, can I buy a coffee? You would get probably five out of ten people who would say yes. At least in Austin. Maybe the numbers, a little less here or whatever. You're showing us the good people that would be willing to share. And that's a great idea. Talk through your challenges.