E-Commerce secrets to scale

047 - Building A Leadership Team With Mike Harvey

047 – Building A Leadership Team With Mike Harvey

E-Commerce Secrets To Scale is a marketing and entrepreneurship podcast that revolves around hearing the stories and strategies of successful entrepreneurs and e-commerce professionals to uncover scaling secrets that will impact your online store.

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Tanner: 

This week on the show, Mike Harvey from business growth domination joins me to talk about building a leadership team. If you want to hire an executive team to run your business for you and ultimately get the freedom that you started your business to get in the first place, then this episode is for you. 

Welcome to the show, Mike. I’m really excited to have you. Go ahead and introduce yourself to the audience.  

Mike:  

Yeah. Hey, Mike Harvey here with Business Growth Domination.  Serial entrepreneur, I’ve owned multiple different businesses in all sorts of different industries and helped launch different businesses as well for other people over the past 20 plus years, running teams of various sizes from one to two people all the way up to a few hundred, so.  I now spend a lot of my time, because the businesses are pretty self-sufficient that we still own, I spend a lot of my time teaching other business owners how to have that same freedom within their business.  

Tanner: 

So that’s really awesome man. So how did your career get started? Can you kind of walk us through that, all the different businesses that you’ve been involved with?  

Processes really do make a huge difference in a business. 

Mike: 

So, I started out working in the family business, family farm, really when I was 12 years old. And that initially kind of started, I got in trouble, I got suspended from school for being a knucklehead kid. I stole all the toilet paper out of the bathroom. And, but because of my ADD, I forgot my backpack in my teacher’s class. And then when my teacher went to figure out whose backpack it was, they put two and two together and figured out who stole all the toilet paper. So, when I came forward to ask for my backpack, they said, you’re the guy, you’re getting suspended. So, my dad said, all right, you don’t want to go to school, you want to get in trouble, you can go pick fruit out in the field. So that was probably one of my first ventures into working, but from kind of, more or less that point on, I worked for my dad every summer you know, worked my way up from the bottom. 

He wasn’t, you know, a believer in nepotism. In fact, he probably made me work harder than anybody else. I worked my way up from the bottom and to the point where, you know, by the time we left and, you know, I left, and we decided to actually sell the family farm. And it was, it was a decent size operation and we were doing management and stuff for other farmers. We had cold storage shipping facility, our own sales department, packing house, all of that stuff. So, but a lot of this developed over time. So, I ended up being the one to develop out the entire accounting department, develop out the entire sales department and really cut my teeth cold calling and doing other things there and then training other people how to do that. So, I learned how to sell there, but I also learned a lot of other really good business skills. Got to work with attorneys and accountants and you know, different people dealing with all sorts of different issues that, you know, might come up in, in a larger sized business. 

And I thought at the time, well, this has prepared me to go out on my own and run my own business. Little did I know how much my dad was actually still handling, even though I felt like I was handling a lot. There’s a lot of things I didn’t know. That said, I, you know, went out and started a business and was successful in that. And after a while, I decided that I wanted to, you know, switch careers and get into some other stuff. I helped launch a construction company for another friend of mine help launch some other local service-based businesses. Have helped launch different agencies and things like that. So, I had a lot of experience starting companies. And then I also have a lot of experience running companies. 

Right now, we have four different companies. IT services company, a cybersecurity company, a marketing agency and the coaching business. Again, because of the systems and the having the right people in place, most of those businesses run themselves. So, where I focus a lot of my time is on culture, vision, key relationships with either key employees or key relationships with key customers or clients, and then new initiatives and fixing problems or broken things. 

Tanner: 

Putting out fires, right.  

Mike: 

Not so much putting out fires, but like, if there’s a big, like, hey, this division has taken a nose dive, then I’ll go in and like, okay, we gotta lay off these people and replace them and put some systems in place or you know, cause sometimes that can happen, so. 

Tanner:  

Yeah, you know, I think the processes really do make a huge difference in a business, right. And I think that there’s so many people that overlook that and they end up stuck working in their business for the rest of their lives and they’re unhappy because that’s why they started their businesses in the first place, right. It was to get that freedom that they they’re looking for, right.  

I also really liked your story about working on the farm. I bet that taught you some really great work ethic and, and I’m in the same boat with you. So I worked for my dad’s business growing up and I did not get in a special treatment either. You know, I think a lot of the employees there probably thought that I did, but man, I was held to a much, much higher standard. And it was just horrible to be honest with you. So my, you know, given that you just gave us that story, what do you think does really has made a difference or impacted the success of your career?  

The greatest gift a father can give to his son is teaching him how to work. 

Mike: 

You know, to the, and there’s a balance and I’ve had to figure this out, you know, across generations. Cause my dad to this day still runs circles around me with working, but he’s at the, at the point of retirement and he’s like, well, what do I do with myself? Because all I’ve ever done is work. So, I make a point to spend a lot of time with my kids and with my wife. And so part of the answer to your question is actually having the constraints of not putting in that many hours has forced me to come up with having the right people in place and the right systems in place. That said, you know, I, in our coaching business, I help other people again, get freedom in their business and I define that as is not working, you know, 80, 90 hours micromanaging everything that goes on in your business. But, if you take that out of context, it can seem a little hypercritical or hypocritical because I still work quite a bit. 

I definitely make time for my children and my wife and my family and all of those things and also, you know, close friends. But, when I put in my work, I’m doing the things that I mentioned before, culture, vision, key relationships, new initiatives and fixing broken things. That’s just because I’m highly motivated. But I was talking with a friend of mine the other day who runs a sales agency. And I don’t know if you know him or not, but him and his partner run Sales of Senders, it’s a mastermind and they do some different things. He was saying that one of the new projects I’m working on, it’s like, man, that’s a lot of work and you know, everything. And I’m like, man, I don’t see that as a lot of work. 

And the other night, Saturday night as I was walking out to my car at 8:30 at night, I thought to myself, this is why I don’t see it as a lot of work and other people do, because I work, but I enjoy what I do. So I put in the time. I put in the energy. I put in the effort. And I think going back to the story about working on the farm, there was a lot of 40 hour days. My dad taught me a good work ethic and yeah, he was hard on me. He was a good loving dad at the same time, but I often attribute a lot of my success to him just keeping, you know, his boot up my backside and pushing me hard because now, you know, walking to my car at 8:30 at night after working on a Saturday doesn’t seem like a big deal.  

Yesterday, I put in 13 hours and I was like, eh, I’m ready to go home. But I wasn’t completely exhausted because I’m used to working way longer hours than that.  

Tanner:  

Yeah. I think the greatest gift a father can give to his son is teaching him how to work, right. And teaching them the value of putting in good work. And, you know, ultimately you have to find something you want to do that you’re going to enjoy. For me, working in a family business just wasn’t a good fit for me. It just wasn’t something I was interested in, but that work ethic carried over into my business. And I’m really grateful for that.  

Mike:  

You know, I, I do agree with that completely, teaching your kid how to work. And I do that with my children. You know, they ask me, oh, can we get another toy? Can we get this? They’re like, well, what chores can we do to make money? I’m like, okay, well you already get the idea of, of making money. But the other day I told my son, I said, listen let’s not, like, you’re having right now an employee mentality. Let’s figure out how we can start a business and make money, not by how many hours we can work, but by using our resources. So I do agree with you that teaching our kids a good work ethic, teaching them how to work hard is, is important. And I can be pretty hard on my kids, but one of the things I always say is as hard as I am on my kids, I need to give them double that amount of love.  

Tanner:  

Yup. And that’s really good point, you know I think that gets lost a lot of the time and, you know, my dad’s a hard ass and he was was really, really hard on me, but yeah, that love has to be there. Otherwise they’re going to think that they’re being punished right. Or that, you know, their dad hates them, which is of course not something that you want.  

Mike:  

Yeah, absolutely.  

Hire someone with the intention of having them grow into a much more important role. 

Tanner:  

So Mike, the topic for today is building a leadership team, you know, at what point in your business, are you really ready for that? How can you, like at what point, how do you know you’re ready to start building that leadership team so your business can run itself? 

Mike:  

You know I look at this as there’s four key components that you need to have right in your business or really five, right. But one is good legion and a good systematizable way to bring in leads. And there’s a number of different ways of doing that. Pick one and stick with it until it works.  

Number two is a good process for closing those leads. It can be through a website automatically. It can be over the phone. It can be in person, there’s a lot of ways to close sales as well. And you and I both know multiple different sales coaches and sales agencies that can, you know, have different methodologies and teach about that.  

But the, the third thing is the fulfillment or the operation side as I call it. And that’s, how does the work actually get done and implemented? And all of those things. The fourth thing is finances and making sure that you’re actually taking money home at the end of the day. And then the fifth thing is having good, solid vision and leadership.  

So to go back to your point, figure out and find out what areas you’re strongest in, and then fill in for the areas that your weak in. That’s not an excuse to, as a business owner, I believe you need to at least have a solid grasp on each of those areas, how it works with how it functions. That doesn’t mean that you need to be the one doing all the work. So for me, I’m very, I don’t know if you’re into EOS or, you know, the book, Traction by Gino Wickman. Maybe you can leave a link for that in the show notes. I think it’s a really great resource. I would start with what areas am I weakest in, right?  

So I’m a strong visionary. This is what I was saying is I’m a strong visionary. I need someone that can be an implementer to implement my vision. And also someone who’s a strong enough personality to push back on me when I have stupid ideas or wild ass ideas that don’t align with the company’s mission and values. And I do have, you know, good leaders in those positions to do that now. But for a while, when you’re first starting, especially if you’re starting with you know, bootstrapping, you’re gonna have to be, play both roles and multiple of those different roles. 

The first and easiest thing to start outsourcing though is, and this can be outsourced internally, or it can be outsourced to a bookkeeping firm or whatever, but those are your finances. So at a minimum, the first thing you want to do is get things like payroll, and even like, I work with both W2 and contractors, so get payroll and contractor payments off your plate. And as a business owner, you really want to have a barrier between people that you’re paying and yourself to the extent that you can. It helps you with relationships a lot if you’re like, they didn’t take care of you. Okay, I’ll go deal with them. I know for me being a strong visionary, I’m really great at overseeing and making sure stuff gets done. I’m not really great at implementation or execution myself. 

So that’s another thing. People will be better taken care of if you get the money part right, then that takes a lot of things off your table to worry about. So then that’s the first thing, get finances off of your plate so you don’t have to stress about that. Right. But at the same time, that’s not an excuse for ignorance or lack of keeping a good eye on things, right? So you want to get at least monthly reports, if not really daily. And there’s different reports that you and this is beyond the context of this conversation, but reporting is important and you’ve got to have weekly, monthly, quarterly, and annual reports. And they’re all different reports that you need to keep track of.  

So that the second thing for me, and this may be different for other people, but for me, because I’m a strong personality. I’m a strong leader. Sales and stuff like that is easy for me. The first thing I’m going to delegate is the operational side, like the implementation. If you’re stronger at doing the actual work, then find someone to go out and sell for you. I’m still gonna go out and find someone to sell for me, but that’s not necessarily gonna be the first thing I do. But you can start with contractors. But have somebody in the finance role, have somebody that’s in fulfillment and operational delivery. The next thing you want to take care of is for me, would be marketing. Again, have a good grasp on all these systems, all the things that are going on. So in the past, I’ve been in business a long time, we’ve not delegated, but abdicated marketing, right. And that has produced very poor results for us and really ended up just costing us a bunch of money. When I made a point to really understand and really grasp marketing is when our lead gen and all of those things really started producing good results. 

So the last piece I would put off my plate then is sales. But then after you start developing a team, what I would look for is initially as you’re continuing to build revenue, some contractors to fill a task, and then the next level is okay, once you have all those tasks being done, you’re the leader, what area do you want to grow? And the next hire should be a leader for that particular area. So and you can get like a fractional CFO, for example. And we have a couple of those guys that are going to be on our summit that we’re launching at the end of August. They’re going to talk about some of those financial pieces, but you can get a fractional CFO for a very affordable cost if you’re in business and they can be that leader. So they’re not necessarily a full-time, you know, a hundred, $150,000 a year employee, but they can still give you the vision and the management of those functional areas that you need.  

The next area you want to look at is, again, operations, but the next hire doesn’t necessarily have to be a high level general manager or chief operating officer, something like that. It should be someone with a good work ethic with somewhat of a project management background that is a quick learner and is a good culture fit because they can grow into that role. And each of the other areas, you wanna look at the same. Someone that can grow into the role that you need them to grow in. 

I’ve let people go and discovered that with less people we’re getting more done because that person was such an anchor to the rest of the team. 

Tanner: 

You know, I really like that, you know, hiring someone with the intention of having them grow into a much more important role, right. But I also really liked that you touch on a culture fit because that is so important. And if you don’t get that right, you’re never going to build this leadership to get away from the business like you want to, right. I think that was really excellent advice Mike. It really does depend on who you are as a business owner, what your strengths are, what your weaknesses are. And, you know, if I have some strengths in sales, like you said, my time is better spent doing that and hiring in those other areas like you talked about. 

So speaking of culture, you know, how do you make sure that leadership hires and ends with that culture?  

Mike:  

You know, it’s, it is a little bit of a trial and error to a degree, and you want to be slow to hire, quick to fire as they say. But, the bad eggs will rise. If you, if you have a company full of good people that are good culture fits, they’re going to point out the guy that does fit pretty quickly. And I think it may be, you know, I think most leaders in business have somewhat of a good level of discernment. Sometimes your employees may be afraid to speak up on things, but if your gut says something doesn’t smell right here, a lot of times more often than not, trust your gut. You’ll later learn that your instincts were right. 

And I can’t teach someone how to hone their instincts. Really it’s experience. But if you’re in business for any length of time, you’re going to experience a lot of things a lot faster than someone who’s just working. Trust your gut, trust your instincts. You don’t know how many times I’ve had employees or team members come to me and say, man, thank you so much for getting rid of that person. They were dragging us down or whatever. I’ve let people go and discovered that with less people we’re getting more done because that person was such an anchor to the rest of the team.  

Tanner:  

Wow. Yeah. And I think that happens more often than we think, right?  

Mike:  

Yeah. So culture fits very important. I would ask a couple things if I’m interviewing or trying to bring someone on my team. I would, first of all, get them to tell me what are their three or four core values that they don’t compromise on. And after you get those, you’ll have a pretty good sense for that. The other thing I would do, is do some kind of a personality assessment. DISC is a great one, but there’s several others. Enneagram is good. There’s multiple different tests that you can kind of see, you know, as someone, a good fit for this role, but then also lay out before them, these are our company core values, and these are the things that we don’t compromise on. And if you’re in alignment with those, then we should be good, right. But that doesn’t mean that you’re not going to make a mistake or someone’s not going to fool you. I have frequently taken prospects that are near the end stage and just spent some one-on-one time with them personally. A lot of times I’ll take them out with my wife and myself and try to get them to invite their wife and just get some time socially to see how they interact. 

How do they, for example, if we’re going to a restaurant, how do they treat the wait staff? If there’s a kid crying in the corner, how do they feel about that? How, how did they respond to that if we’re at a park how do they interact with others? So yeah, I generally make a point before I hire someone to spend some social time with them as well.  

Tanner:  

Yeah. I think that’s a, that’s a really good point. And it’s really cool that you do that. One thing that I do, and I’m not anywhere close to building a leadership team by any means, but I craft interview questions that directly correlate with our core values and based on their response to those questions, I can easily identify if we’re in alignment there.  

Mike: 

And there’s another good book to help with that, Topgrading. You should, I would recommend you check that out as well. And if you want to provide a link to that in the show notes for this as well would be awesome. I think it’s a great resource for people that are at the point where they’re bringing on other team members or growing their team members.  

If you have a good culture fit, the people on your team will enjoy working with each other. 

Tanner:  

Yeah, absolutely. We’ll definitely link that up in the show notes. So Mike, we talked about hiring someone with the intention of them growing into a better, or bigger, more responsible role. With that being said, do you think it’s better to hire for leadership specifically within or externally?  

Mike:  

I generally like hiring from within because you know what type of person you’re getting,  And as much as possible, I like referrals for hires a lot better than I would like dry candidates and we’ve had success with using recruitment. And I know that that can be very expensive. I have actually a really good recruiter that’s a friend of mine, also going to be involved in our summit,  going to be speaking on some really cool stuff there, Maslow’s hierarchy and how to apply that to your team and all that. But that’s digressing a little bit, but the difference between hiring a recruiter and just putting out a job ad is typically the recruiters are going to go find people that already have a job, right? So when you’re hiring and you’re putting out a job ad for something, typically the people that are applying are either people that are unhappy or disgruntled, which that can be problematic or more frequently people that already don’t have a job. And so you’re not getting the cream of the crop right off the bat versus using a recruiter. They’re going to go after the best talent that has a good resume, but they’re not actively looking for a job. 

Tanner: 

Right. I mean, it’s head hunting, right? They’re going after the best of the best, regardless if they’re happy at their current position trying to convince them that this other opportunity is going to be better than what they already have.  

Mike: 

Right. 

Tanner:  

So, you know, I think that makes a lot of sense.  

Mike:  

So on the flip side of that, the question then comes up about how do you make sure that your people aren’t headhunted, right? And a lot of that has, at least from my experience and my leadership style, has to do with not so much money but, and when I say that, don’t underpay your employees, right? We try to pay just above market rates for our team members. That said, money is not what’s going to keep them there. If you’re paying double market rates, but they hate the job, they’re not going to stay. If you’re paying under market rates and they love the job, you have a lot higher chance of them staying, right? So the best of both worlds is paid just a little above market rates, have some incentives, but make it an atmosphere and a work atmosphere that they love working at, that they love going to every day. And that comes back to hiring the right team and having good culture fit. Because if you have a good culture fit, the people on your team will enjoy working with each other as well.  

Tanner:  

Yeah. And you hit the nail on the head there. People are not motivated by money as much as we think they are like, sure, they’re not going to accept a job if they think they’re getting low-balled, right. 

Mike:  

Right. 

Don’t be in a hurry to hire the first person that comes along. And just because they say all the right things doesn’t mean that they’re going to be the right person. 

Tanner:  

But, I’m sure it’s just as likely for someone to accept a job because they’re getting paid a lot and then leave, right? So, I mean, I can’t stress enough how important it is to make sure that your employees are happy and sometimes all you really need to do as a manager or a business owner is sit down with them or video chat with them these days, tell them you appreciate them, tell them you’re grateful for them. Tell them thank you. Tell them that they’re doing a good job. And sometimes that’s really all they need. 

 Mike:  

Yeah, absolutely. And we make a point to actually like spend time together outside of work as well, and developing the relationship so it’s more than just coworkers or more than just a Boston employee so that you actually enjoy being around each other. And I know for me, I look forward to coming into work and working with all the people that we work with, whether they’re in the office or whether they’re on the other side of the world. And we do have people that are all over the world. But I enjoy spending time with them. And, you know, again, that’s important. And I think that’s part of why we do a lot of social stuff both before a hire and as well as after. If you can’t enjoy the people you’re going to be spending most of your time with, frankly, you’re spending more time with them than you’re spending with your own family. If you don’t like each other, you’re not going to want to be around.  

Tanner:  

Yeah, absolutely. And you know, I think that’s another thing that’s really important when it comes to making sure it’s a good culture fit. Could I hang out with this person? Like, could I see myself hanging out with this person and enjoying myself. If the answer’s no, then it’s probably not a good fit.  

Mike:  

Yeah, absolutely.  

Tanner:  

So Mike, what’s one piece of advice you could give any entrepreneur out there that’s looking to start building their leadership team? 

Mike:  

Don’t be in a hurry to hire the first person that comes along. And just because they say all the right things doesn’t mean that they’re going to be the right person. 

We need to standardize everything in our businesses and that’s the only way that we can truly scale. 

Tanner:  

Yeah, absolutely. That’s great advice. So what would you say your secrets to scale are? 

Mike: 

This is a little bit more nuanced because it depends on the type of business we’re talking about, right. But at a high level, have a repeatable and almost cookie cutter implementation method. So the way you do things, do it the same every time. That doesn’t mean you can’t tweak it and improve it, but don’t tweak it improve and change it every single time. You can stack upon that and make it better and better, but don’t, you know, this week I’m going to hand out shirts and hats to all of my new employees and next week I’m gonna give them coffee mugs instead. That’s a really kind of bizarre example, but figure out something that works, do it the same way and do it for the same type of people.  

So if, for example, you’re in an agency and I know you do this well to Tanner, but figure out who you serve and figure out what you do for them, what results you deliver them and do the same thing in a repeatable way every time. And so that’s for the operation piece. The finance piece is generally kind of easy because that’s always the same almost across almost any company. That’s why that’s the easiest thing to get off your plate and why I recommend doing that typically first. But you can, and absolutely should do the same thing with your lead gen and your sales process as well. You shouldn’t have three different sales guys, each doing it a different way.  

Tanner:  

Oh yeah. And I think that’s a good point. You know, we need to standardize everything in our businesses and that’s the only way that we can truly scale, right. Everything has to be repeatable, but more importantly, it makes putting people in those positions a million times easier because it’s always going to be the same. And you mentioned yeah, tweak it, make it better, improve it, build upon it. That’s all great stuff you know. Don’t just do the same thing every time, because you’ve always done it that way. But you know, you’ve got to have that foundation. You got to keep building upon that and that’s ultimately how you get away from the day-to-day.  

So, Mike, I want to thank you for taking the time to do this interview. What’s a good way for anyone listening to get in contact with you? 

Mike: 

The best way for someone to get in touch with me is, really go and join our Facebook group. It’s Business Growth Domination. And if we could leave a link for that in the show notes would be great, but you can go to mikeharvey.co/group, and that’ll take you right there. 

Tanner:  

Cool, man. Well, we’ll make sure to link that up in the show notes, as well as the couple of books that you mentioned. Thank you again, Mike.  

Mike:  

Yeah. Thanks Dan. 

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