The Key Factors to Managing Your Business Growth

The Key Factors to Managing Your Business Growth—with Shawn Johal

Our guest is Shawn Johal. Shawn is the co-founder of a company called DALS Lighting, an LED business founded in 2009. He has led the company to be profitable well into eight figures. Running the company which is over 50 employees, he went on to found Elevation, a scaling-up coaching business working with entrepreneurs and their teams to help accelerate their growth while helping them find personal balance and happiness. Shawn is obsessed with high-performance to the pursuit of happiness, and the power of mindset to fuel a successful life. He’s committed to bringing this message to the world. He has been featured in all the main media publications and is the author of the latest book on leadership and power of change, The Happy Leader.

I loved every part of this episode. He shared so much practical no-nonsense advice. We spoke about the danger of growth for the sake of growth rather than focusing not only on your top-line revenue but keeping the finger on the pulse at the bottom line. We also discussed how much people play a role in growing a company. If you are a new business or existing company, how to create a hiring process that will give you great people, and then how to maintain those great people on a regular basis to build a company that could give you the output and the success you’re wishing for. Finally, pay close attention to the practical tips Shawn provided to building a company culture, and what you could do in order to make sure people on your team are always happy. This is a great episode. As you are going to know, I asked Shawn to come back for another episode. I urge you to not only read this episode but maybe read it again and again. Maybe have other people on your team read it as well. Without further ado, here is my interview.

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Shawn, thank you so much for joining me on the show.

Thank you for having me. I appreciate it.

I love it when I connect to like-minded individuals because I get to learn first. I can start implementing immediately as I consume the content. When I was able to get to know you a little bit more and learn more about your background and what you teach other entrepreneurs, I resonate with everything you do. I feel that our audience will do the same. As my audience knows, this is all about no-nonsense advice. We’re going to get a lot of those no-nonsense advice in our conversation. For our readers, let’s get a little bit of a background to get to know when you started running your company. What did you learn from those days? What were the hardships and successes? What are you doing now?

Let me tell you the stories. It’s interesting for your readers. I started out in the corporate world. When I came out of university, I went to work for Rubbermaid. A lot of people know about Newell Rubbermaid. It’s an $8 billion company. You have a garbage can or a shed at your house that is branded Rubbermaid. People don’t know that there are a lot of other brands in that company like Sharpie pens and Bernzomatic torches. They are all owned by Rubbermaid. I got an opportunity to work with some amazing leaders in that business. I was a district manager across the country for Canada. It was the best learning school. They sent me to so many leadership academies and taught me much about being a professional individual. A lot of my growth came from that.

We had a family business. My in-laws, my father-in-law, my mother-in-law and my brother-in-law had started an LED lighting business in 1999 on the cusp of 2000. My father-in-law was a savvy businessman. He took a bankrupt company and he got it listed on the TSX stock exchange in Toronto. No one knows how he did it. You can’t take a bankrupt company and put it onto the stock exchange. He figured out a way to get it done and started raising capital. As he started raising capital, he also started buying businesses. We bought several different businesses and we’re growing this company. In those days, it was called Difcom. In 2004, as they were growing to about $20 million in size at that point, he asked me to join the family business.

It’s a tough decision. You got to be careful. It’s the in-laws. You want to make sure you do these the right way. It was a great decision in the end to join that experience and to be part of the family business. I didn’t come in as an owner. I came in as a national sales manager. I handled all of the sales. My father-in-law continued with the family buying companies. They brought all the way up to $50 million in size. That story sounds great. The problem was that there was a massive head office being created behind all of this. If you can imagine, all these successful businesses that you’re buying have accounting departments, sales departments and marketing teams. They’re successful and profitable but then you’re creating this head office. In the head office, you’re putting a VP of marketing, a VP of finance and a VP of operations.

What are those people bringing to the table when these companies are already doing well? You’re ballooning the costs a little bit out of control. The recession hit in 2007, 2008. Everyone will remember that. It’s an unfortunate time. A bad company purchase was made in the US, a business we should not have purchased as a company. It was a spectacular crash. Within twelve months, the company went from $50 million to almost nothing. We could not keep the business going. We could not sustain the growth that was coming through. It was a difficult time for the family as you can imagine. All we were trying to do is sit down and have meetings to say, “Can we pay the supplier enough money to get enough goods to get it to the next client to get paid?” We were trying to keep afloat. It lasted for about a year. At the end of it, we couldn’t keep it up. That was the sad part of the story.

The positive side of the story is that my brother-in-law and I had a chance to buy back three of the divisions. That was a mess. I don’t think anybody could have come in there and done anything with them. We knew what the mess looks like. We said, “We can take this mess and do something with it.” We made deals with the banks. We bought the inventory and assets. We didn’t buy the companies. We bought the inventory and assets and restarted a new company called DALS Lighting in 2008. We shipped our first order on June 22, 2009. I’ll never forget that date. We restarted on this new journey with this new company.

That’s the beginning of the story. When we started the new business, we couldn’t get a bank to support us. We’re two young guys, naive at this, right after the recession. I was having a baby. My business partner was having a baby. We’ve got young kids. We’re putting second mortgages on the home and we can’t get a bank. This was how we’re starting a new business. I look back and I’m thinking we were idiots. We didn’t know what we were doing, but being naive helped us. If we hadn’t thought it through, we wouldn’t have done it.

We launched this new business. We had to find a factoring company. I don’t know if you know about factoring. For the readers, factoring is when you get a company that’s giving you a loan at high interest anywhere between 8% and 12%. They own your receivables and they own your inventory. At that point, as you grow a little bit, they give you a little more access, but you’re paying this 8% to 12% every single month. It’s expensive but it’s your bridge to get to a bank. We did that for a couple of years. We got to a bank to finally support us. That was a big moment for us. We were getting our customers back and getting things going. From 2009 to 2012 were tough years. In 2012, we started feeling a little bit comfortable. Things are a little better. We have a bank. We started resting on our laurels. We started feeling like, “We got a real business here.”

It’s not that bad. At that point, we had hit a couple of million in revenues. It was significant for us. Our biggest competitor came out. He launched a product line that copied all 200 of our LED lighting products and put them at $1 less in the market. These were people who were part of our previous family business. They were like brothers to us. I’ve never had that feeling of being stabbed in the back more than that moment. My partner called me and says, “Go look at this website.” I got to see the catalog from our competitor. It was the best thing that happened to us. Looking back, it was amazing because it made us realize that we don’t have that strong of a business. If a competitor can come in, copy our products and go to market, what kind of business do we have? This business is not sustainable. It forced us to step up our game in innovation, technology and people.

Our team wasn’t that strong at that point because we had inherited 25 employees from these other businesses. We didn’t vet anybody. We brought everybody back in. It got so bad mainly to the point where they give you a perspective. We had two people in customer service. My partner and I could see them from our offices. When the phone would ring, neither one wanted to be considered a receptionist. The phone would ring and ring. It would get up to about ten rings. Neither one would even grab the phone because they were so adamant that they didn’t want to be considered a receptionist. Eventually, one would cave and there would be so much tension all the time. We realized, “This team is not the type of team that we want to have in this company.”

At that point, we said, “We need help.” We hit a wall. We don’t know what we’re doing. We went out and found a business coach. At that time, there was a program called Mastering The Rockefeller Habits, which was a book written by Verne Harnish. We took Mastering The Rockefeller Habits. We brought a coach in who had zero experience. We were her first clients. The only reason we hired her was because she could speak French. As a company out of Montreal, we needed someone who spoke French because our whole team was French. My partner and I are bilingual but most of the team was French. We said, “We have no choice. We got to take a chance with her.” It ended being a great decision.

Her name is Cleo. She’s still an amazing coach and a great friend as she helped us through. Without giving you all the stories and all the details, from 2013 to 2020, we were able to have nice growth, getting into the mid-eight figures and changed about 85% of our team. Out of our 50 employees, there are only 8 that are from our original group. That was a big change for us. We’ve had a lot of success as we transitioned from Rockefeller Habits to scaling up. That’s the story.

Thank you so much for the story. This is a typical story in everyday America as well. I’m sure everybody has their version of it. I want to go back to some of the pointers that you mentioned as you were sharing your story that we could elaborate a little bit. We’ll come full circle as well. Going back to the company prior to failing, prior to the recession, you mentioned the growth and managing the growth. If you look back at that time especially with the knowledge you have now, what are the lessons or the signals they missed that brought them into the stage they got into?

There are many amazing lessons. The first one was that there’s a real danger in trying to have growth for the sake of growth. There was no regard as far as I’m concerned for bottom-line profitability, gross margins and inventory management. None of it was looked at because it was the model of growth by acquisitions and get this thing ballooning as high as possible as you can. The company was never profitable and that was the problem. We never took enough time to look at the bottom line and say, “How’s the cashflow? How’s the profitability? How’s our cash conversion cycle? Are we getting paid quick enough?” There were all these things that we weren’t worried about. We did not spend that time on the cash portion of the business. That was a massive miss for sure. I’ll be honest with you. With the type of model it was, I think the numbers weren’t always being looked at in the purely objective eye.

[bctt tweet=”If a competitor can just come in and copy your products in the market, then what kind of business do you even have?” via=”no”]

This is an important point for our readers and for everybody, running a business is sometimes we get in our own bubble, which is all about the growth number. Unless you are a VC looking to do an exit or going public, and all you’re doing is trying to gain market share and blow up some industry, if you’re running a business that people are depending on you on paying for their food and so on and so forth, it’s all about the bottom line. People get stuck. I see it a lot in the eCommerce space. They’re going through the same type of cycle where there are a lot of acquisitions happening and a lot of brands being built.

You might have a rough quarter and gross profit but it’s better numbers in the net profit. Don’t look at it as, “We didn’t grow enough this quarter. We didn’t add enough SKUs.” It’s an important lesson. The overall lesson that I took out is it’s easy to grow a business, it’s hard to manage the growth. If you have some missteps in managing the growth, everything could come down crumbling. For people in business, regardless if you’re the owner of the company or you’re a C-level executive that you have a key function in a company’s growth, you got to make sure that you’re keeping a good close eye on the important factors. Most of the time, at least some of them are numbers.

I’m coaching businesses and I often see this. They don’t understand their numbers. They don’t understand the cash portion. They don’t understand their gross margins truly. They’re constantly talking about revenue. Revenue is vanity. At the end of the day, I always explain to entrepreneurs. I say, “You have a choice. I gave you the choice. You can have a $10 million business that’s wildly profitable or you can have a $100 million business that doesn’t make that much profit. What would you prefer?” Don’t forget, that $100 million business might be cool to tell people, but if you aren’t making money, the number of problem and stress that come with $100 million is going to blow your mind. You’re not going to be a happy individual.

You have to also understand as a business owner, you got to know that everything has a trade-off in life. I have a client that has a huge payroll, hundreds of thousands of dollars a week. He says, “80% of the week I’m busy making sure that I’m covering payroll.” If they could take the pressure and this is something that fits their lifestyle and how they want to operate, then great. You don’t have to copy somebody else just because they have that top-line revenue number. You don’t know what comes alongside everything else. That’s a great lesson.

I want to also move into an important lesson that you mentioned. This is going to lead us to the next part of the conversation. At one point, when you saw the competitor copying your whole catalog, right away you said, “I don’t think we have a business if somebody could come in and copy us.” Let’s elaborate on that. This is an important point. We know a lot of businesses struggle with that. They finally got a product or a service out there. They are constantly challenging themselves or afraid that the next day they‘ll wake up and somebody else is opening up around the corner.

It’s an important thing that maybe gets misconstrued a little bit. I have this amazing friend, Richard Mulholland, one of the best speakers in the world. When he speaks, he always says the same thing. He always challenges the audience and asks them, “Are you disrupting your own business?” Meaning, are you on a weekly basis looking at your business and telling yourself, “If I did this specific thing, would I be able to disrupt my own business?” He says, “You better know it because if you don’t know it, someone else will do it to you.” The whole key behind that is always looking at your business from a more objective lens. Taking that 25,000-foot view and saying, “Is my business viable? What would happen in the worst-case scenario?”

By the way, I struggle with a positivity bias. It’s diagnosed. I always think things are going to be rosy and everything’s going to be perfect. When you’re an entrepreneur, you have to take the opposite view. Sometimes you have to say, “What is the worst-case scenario,” and not get all freaked out by it. You should be able to discuss it with the team and say, “If someone did come out and copy us or go to our clients and offer better pricing, how would we react? What is it that’s keeping us in business?” This concept of disrupting and challenging your own business model constantly is something that’s rarely done. Most of the time, I see entrepreneurs who are looking at other businesses and they said, “How do people get market share? How do we compare to others?”

We shouldn’t be doing that. You have your own path. You have your own journey. There are going to be competitors. There are going to be people out there you’re fighting for business against but are you looking inwards and saying, “Do I have the best team in the market? Do I have the best products and services in the market? How is the customer journey internally at our place?” Don’t compare it to others. Compare it to how you want to be perceived in the market. By constantly challenging and disrupting yourself, you’ll be able to find better answers. For us, we had no choice but to do it because this company comes on. We’re like, “We’re going to go out of business.” There was loyalty. These are people from the industry. They had experience and reputation, and people liked them. We said, “This is going to be dangerous for us.” That’s when we decided that our biggest X factor was innovation.

At that time in 2012, 2013, LED lighting had been around for years but not truly around in lighting. It was just starting for us. That’s when my partner and I looked at each other and said, “Let’s go all in. Let’s go with the LED wave.” We see that it’s coming. We know people want it. It lasts 50,000 hours as opposed to 5,000 hours. There’s something here. We went full innovation and came out with products faster than our competitors in terms of new technology. In the end, that’s what won us the market and allowed us to have very profitable growth.

This is another important point that I took out over here for what you said. We discussed the concept of disrupting your own business. Sometimes people think that disrupting means that I have to change my business model or that I have to become the Uber to the yellow cabs. Sometimes you can be disrupting by changing the process, how you deliver or how quickly you could launch a new product. Maybe the old way is it takes me six months to launch a new product. I was part of a forum where a lot of CMOs, CEOs and C-level executives were speaking about companies and how they handled COVID. I could say that the common denominator between all of those CMOs of Fortune 500 companies and some of them even Fortune 100 companies was that we found a way to make change quicker.

In the olden days, decisions would take 6, 9 months to roll out a new service, a new way of ordering, a curbside pickup, whatever it is. Think about eCommerce changes and processes. All of a sudden, things happened. They said, “We’re not going back to the old way.” We taught ourselves that it doesn’t have to take every decision so long. Disrupting your own business is asking yourself, “Is there a better way of delivering the service? Is there a cheaper way to deliver the service? Is there a better way to utilize my people? Is there a better way to use innovation from within?” It’s not one-dimensional. It’s every part of the business that has to be looked at.

You’re bringing up a valid point. It’s incredible. There is a definite misconception that disruption means that you have to become the Uber. You have to redefine the entire model. This is not what we’re talking about here. What you’re talking about is amazing. It’s going piece by piece, small things. I love that example you gave of the products. It sounds like you already know my business model most clearly. It was all these tricks. It was taking us 6 to 8 months to launch a new product. Can we get that down to four? It was okay. We’re shipping orders by 5:00. Let’s ship them by 2:00. By giving people that service, if they get an order from us by 2:00, it will ship the same day. They’re getting it the next day as opposed to 48 hours later. All those little tweaks that we made in the business gave us the competitive advantage. It wasn’t the fact that we came up with this one LED product that revolutionized the whole world. It was all the small changes that led to massive success.

You mentioned people. Originally when you started, you took the people from the old company where you grew your people. Let me ask you point-blank, how important are people to the success of a company?

This is my absolute most important topic. I cannot emphasize this enough. Unless you have a business that has this crazy revolutionary product, which is incredibly rare, it’s all about the people. It took me a long time to figure that out. We learned that the hard way. We kept people around. It’s what I like to call the brilliant jerks. Those are the worst. Those are the people we protected forever. For the readers to understand what a brilliant jerk is, they’re someone who’s wildly productive. They get an incredible amount of things done. They hit their objectives. They might even be loved by clients but within the business, they’re cancer. They are poison. They’re constantly causing fights and disrespecting their teammates.

We protect them because as entrepreneurs and business owners, you always say to yourself, “They’re entering 1,000 orders per day. I’ll never be able to find someone else who can do that. The person is selling 50% over quota, I will never be able to replace that.” You’re destroying your company culture because this person comes in, blows things up left, right and center. They are not team players, only cares about their own pocketbook, only cares about their own happiness. That’s not the type of people that we’ll be able to be around if you’re trying to build a truly successful company. It’s not realistic. I’ve seen it so many times. That was why we ended up changing 42 out of 50 employees. I know it sounds dramatic. When I tell this story to people, they think maybe sometimes I’m some kind of monster. I’m the least confrontational guy that you’ll ever meet. I hate confrontation.

In my career, I’ve fired about 35 to 40 people myself in things that I had to do. There had been some tough moments. There had been some easier ones. I enjoy letting people go. I know that sounds horrible but let me explain it. Everyone has a place. Maybe you don’t fit perfectly at our business because of the type of culture we’re trying to build, but you might fit well in another company’s culture. Maybe I’m doing you a favor because you’re not enjoying this experience. You seem to not get along with your teammates and not care about our values so let me rid you of that burden. Let me give you an opportunity to go find another space where you’ll be happier. At the end of the day, there is a place for everybody. It’s just that you’re trying to protect your company culture. You cannot have people that are causing those kinds of problems internally. It will always come back to bite you.

I want to share with you a story. Years ago somebody came to me for advice. He has his key salesperson that he has to walk on eggshells in his own company. He can’t be around them. He sometimes tries to find meetings out of the office, not to be in the same building in the same room. He asked me about letting the person go. He said, “I don’t know how productive the person is and what he brings to the bottom line.” At the end of the day, it’s your company. You shouldn’t have to think twice about entering your company because of an employee. It never should happen. You have to make a decision.

He made a decision to let the person go. Do you know what happened next? He was called to a meeting from all the rest of the team members, all the rest of the sales team. They said, “I know how hard the decision was because I know how productive that salesperson was for the company. We are committing to make up for the loss.” That’s the rest of this team coming to this person, which means they have been walking on eggshells as well. They had been not at their A–game on the single day just because of the other person. Sometimes you’re held hostage by one person not knowing where success could come by letting yourself go.

[bctt tweet=”Are you disrupting your own business? You better be because if you aren’t, someone else will do it to you.” via=”no”]

The message that you said is so on target, which is important. It’s understanding how much people play a role. I remember one of the earlier shows I had with Brian Scudamore from 1-800-GOT-JUNK? and a Canadian as well. He spoke live at our events. He was one of the best speakers across all our events. He resonated well with the audience as well. One of the lines he used on the show which is phenomenal is, “Once upon a time, we defined ourselves as we’re an eCommerce business, we’re a service business, we’re a product business or whatever it is. Now, we’re all a people business.” You could have the best products run by the most unsuccessful people and it’s not going to go anywhere. You can have the simplest products. You could sell pens, toilet paper or Rubbermaid in your case. You mentioned it’s what you started. All of a sudden, they’re growing. They have a great culture. They have the finger on the pulse because the people are much committed, focused and a magnet for other successful people to be around them. It’s important.

I want to ask you for some practical advice. Sometimes I speak to business owners and they have that challenge of people especially if they’re growing. Maybe the information came to them at a later date that they have to reshape their culture especially if they want to grow. They hit the plateau and they want to get out of that. If you’re starting a new business, you’re an entrepreneur, you went to events, you listen to podcasts and you’re excited about, “I want my culture to be amazing,” if all of a sudden you had this a-ha moment to have to change stuff around, what are the practical things a business leader could start doing to start turning around their culture? What are the steps? Where do they start?

There are some important key steps. Some of the steps are regarding new potential employees that are going to come in and some are regarding the existing team. Let’s talk about new potential employees. You have to change your hiring process. People might be reading this saying, “Hiring process? I don’t even have a hiring process. If I need somebody, I put a posting out there and I hope for the best candidate.” You have to completely change your hiring process. I’ve developed a methodology. It’s inspired by Topgrading and the Who methodologies if you’ve seen those. I find those quite heavy. People read those books and they then tell me, “Shawn, it’s impossible to do.” Over the last years, I’ve developed a light version of those things.

You have to have a hiring process that allows you to attract, recruit and hire the absolute best talent at the salary range you’re looking to pay for. What does that mean? That means that your job descriptions have to change. You have to create scorecards first of what you’re trying to accomplish there. I got this trick from an incredible entrepreneur and friend, Robert Glazer. People know Robert from the Elevate and Friday Forward. We’ve been friends for a long time. He gave us this advice saying, “You should put something called a success metric on your job descriptions.” I was like, “What does that mean exactly?” He says, “I’ll give you an example. You tell the story to the future candidate of what success looks like for them in six months and what it looks like in twelve months but written in the future format so as if it’s already been accomplished.”

I started doing this and teaching this to my client and it’s revolutionary. It’s this little thing and no one ever does that. It changes the dynamic completely when you’re telling someone, “In six months, you already met all of our key clients. You will already be bringing in new products into these new territories. You’ll have analyzed the need for a West Coast distribution warehouse.” People will read them and say, “Either I’ve done it already or I want to do it.” That’s going to change the type of quality of candidate that you get. You then have to change your interview process completely. You have to change the way you do your phone interviews. Now, they’re mostly Zoom interviews. When you’re doing in-person, you have to change the format. You should have team interviews where you’re having at least four A-players from your company meeting the candidate. That’s how you will get the culture and value buy-in.

That’s the whole process. I would encourage people to say, “How can I change my recruiting process to only bring in A-players?” It’s proven. We have the numbers behind this. When you do a proven hiring process, your A-player will raise your goal from 10% to 40% to 90%. You’re increasing between 50% and 80% the type of quality of people that you’re bringing into the business. That’s number one for people when you’re looking for hiring. For your existing team, what I like to encourage everyone to do is on a quarterly basis, you need to do a talent evaluation. What that means is that every single quarter whether you have 2, 20, 200 employees, it doesn’t matter. You have to do it. Every quarter, you go through all of your teams.

I’ve developed this clear process that allows you to see. I stole this from EOS, which is a great system for scaling up coaches. I like EOS. The whole get it once it’s capable. You’ll know as a person, does the person get it? Do they want the job they’re in? Are they capable? You put them on the values of risk productivity charts. You say, “How good are the values versus productivity? Are they an A-player? Are they more of a B-player? Are they brilliant jerks? Where do they fall on the spectrum?” By the way, I strongly encourage the readers. Here’s the simple test to know if you have an A-player. They have top values. They care about company culture. They have the right values. They’re aligned with what the company’s vision is. They’re productive so they’re very good at what they do in their role in their job.

Here’s the absolute easiest way. Imagine you had a human cloning machine. I’m sure it exists somewhere on earth. I’m sure someone has one. Would you put that human being in the cloning machine? Would you want to have five mentees running around in your business because you’re so proud of what they do? As I’m giving this example, your readers should be seeing employees, colleagues or peers popping up in their heads. Whenever I give that example, they start seeing someone like Julie, Max, Samantha or someone who’s an exceptional employee who embodies being an A-player.

By doing that on a quarterly basis, it’s important. What you need to do as the last point on that is you need to be systematically recognizing your A-players. People have a hard time with this. It’s something that I have to explain over and over. We think as business leaders that we’re showing appreciation for our team members. I’m telling everybody here that 99% don’t. You may think you do but when you start talking to the employees, and I speak to a lot of employees on a weekly basis, I ask them, “Do you feel appreciated? Do you feel that people recognize you for the work that you’re doing in this company and your contributions?” Majority of the time I hear the same answer. “I do my job. Sometimes I get maybe a little pat on the back. Maybe someone mentioned something but generally, no. I don’t think I’m being appreciated.”

What better tool than to appreciate your A-players? Here’s a simple trick. It’s not all about money. This is where people get freaked out. They think I’ve been talking about bonuses here. This has nothing to do with a bonus plan. Imagine you’re on the strategic team and you want to recognize a key employee. Let’s call this key employee Julie. Julie has been exceptional over the last quarter. As a strategic team, you get a card. It doesn’t cost a lot of money, $1 here, $1 there. You buy the card. Everybody in the strategic team signs the card and says, “Julie, you’ve been a model employee over the last 90 days. You’re an important part of our team. We love what you’re doing. Please keep it up. We appreciate you. We’re so grateful to have you in this company.”

Everybody signs on and you give her the card. It costs you nothing, no time, no money. Imagine that person going home and showing their spouse, families, kids, parents or whoever it is, “Look what the company gave me. This little card is a show of appreciation for how important I am to the business.” It’s things like that where we got to get creative in showing our key players on a quarter-to-quarter basis how much they mean to us because they fit your company culture and values. You care deeply for them. Combining the hiring process with the talent evaluation process are two of the biggest tricks.

Trick number three is I would create in every single business what we’re going to call a circle. We’re not going to call it a committee because nowadays the committees are getting a bad rep. I would encourage every business owner and every team leader to try to create what I call an employee experience circle. What that is you go into your company and you pick your five topmost culture living people or people who embody your culture. Different departments don’t matter. Pick the top five people in your business that love the culture. You say, “You are in charge of making sure that our employees love their job that’s going to build a culture within the business. You’re going to plan any quarterly events. You’re going to take everybody’s birthdays. You’re going to find creative ways, maybe give back to the community or whatever it is.”

You want to put a recycling program or composting. Get creative, but your job is to build company culture here. Your job is to make the employees’ experience as amazing as possible. You let these five people work on a week to week, month to month basis. You rotate every year who that circle is. You let them take charge of it. It takes pressure away from the business owner as well. As business owners, often we’re the ones trying to plan everything, but now you’re letting a team take care of that and build a culture. Those would be my three biggest tips.

This is packed with information. I so much appreciate it. When it comes to employees, there’s a balance between the skillset and the type of person that’s fitting within your culture. If you look at 80% of those, both are on the job description that’s they’re putting out there on their resumes. It’s all about the skillsets. We spend so much effort on, “What’s your experience? What did you do in the old company?” That old company could be that they have the skillset but ran on a different way and culture than your company. You’re bringing in somebody with a lot of experience running exactly the opposite of what you’re trying to build over here. What you’ve mentioned is so important.

With the committee that you mentioned last, it’s an important part because so many times I sit with business leaders and I go through about company culture. The first thing I always tease business owners when I ask them, “How’s your culture?” They said, “I’m phenomenal.” I said, “How much time are you spending on culture?” “What do you mean?” I said, “Open up your calendar. I want to see how much time you’re spending on not problem-solving but speaking with your people to figure it out.” Sometimes they will say, “I threw this party and that party.” I speak to employees that said, “Don’t throw any parties for us. Be present. Acknowledge what we do. Speak to us. Listen to us.”

Sometimes it’s not even possible because the leaders are so stuck with the work they need to do. They’re lacking time and they don’t have it, but with this idea that you mentioned for our readers, you can take action. If you have a smaller company, it could be two people. Even one person outside of yourself and working with that person, could bring you feedback from the ground and say, “Instead of going to a restaurant, let’s bring in some food for the people once a month. Instead of a gift card, buy this for the office and we can enjoy it.” Those ideas sometimes come from within versus a leader thinking about, “What can I do for my people?” This is valuable.

I’ll give you one example for the group. At our LED lighting business, we have this amazing new group of people in 2021. They put on an event on Friday at 12:30. We decided to close the company from 12:30 to 3:30. We said, “We’re going to do an event.” We haven’t done enough of the whole virtual thing. Everybody was sent home. They were sent a box of ingredients. We had a cocktail party where everybody was given whether an alcoholic or non-alcoholic. You had a choice. We brought a mixologist onto the Zoom. The mixologist prepared all the drinks and how to put their ingredients in. For the first 1.5 hours, people were mixing drinks. That sounds fun. It’s a bit of a party style.

For the second 90 minutes, the entire sales team, the four key salespeople came on and they did a full presentation of all the new products launching. Who are the key customers? Who are the key targets that we’re going after? This was an amazing presentation to explain to everyone, “Here’s what we’re working on as a business. What’s more important in our business than our products and our customers? That’s where we’re focused.” By giving that visibility to people that are in finance, in the warehouse and giving it to everyone, it was not only a fun activity for the first part but the second part was much more around sharing key company information.

I would encourage leaders to do that. Use your events to also spread the wealth of information that you have. We hoard too much information. We think everybody knows everything, “I’m sure they know what the new products are.” You speak to the employees, “We’re launching new products this month. I didn’t even know that.” Get out there, communicate more and use the events not just for parties. It’s not about the party. It’s about how you’re getting everybody engaged.

[bctt tweet=”Find happiness in the present moment instead of waiting for some distant endpoint that never arrives.” via=”no”]

I want to talk about your book. I’m not sure if it came out or is coming out. I love the title The Happy Leader. You crafted this title intentionally. How important is happiness for a leader and describe what you mean by a happy leader?

The background of why I wrote this book is simple. I spend a lot of time with entrepreneurs. I’m in the entrepreneur’s organization. We have these forms. Where it hit me was that I speak to so many people and they always tell me they want to be an entrepreneur. They want to be a leader. They want to do these different things but yet when they are in that position, we do this thing called the one-word open at the beginning of every meeting and I swear to you, I don’t remember the last time I heard a positive word. Every time, the words are stressed, overwhelmed, anxious and freaking out. It’s always negative words. I thought to myself, “Everybody seems so stressed out and unhappy all the time.”

I would always ask these entrepreneurs, “Why are you running a business? What’s your goal?” They said, “Don’t worry, Shawn. I’ll be happy one day.” I say, “When will you be happy?” “When I sell my business. When I change my team. When I go on this trip.” It’s always this future point. I said, “You realize that you’re waiting for something to happen that may never happen. You may not have a successful exit. You may not change your entire team. You may not have those situations happen so you need to find happiness right here, right now in your everyday moment.” It’s in the present moment that we need to be happy. That was the basis of The Happy Leader. It is to say, “How we can find happiness in our habits, visualization, meditation and in everything that we’re doing so that we can enjoy the journey and not be waiting for some distant endpoint that never arrives?”

I could hear the emails coming in already when people read this episode and say, “We want to get you back for part two. This is somebody that you want to connect to because there’s so much that we can learn as leaders from his book and everything that he does in his own company as well.” I love when coaches and consultants come out and say, “I’m also running a business. I’m in the trenches.” It’s so much more powerful. Let’s close with the four rapid-fire questions. Are you ready?

I’m ready.

Number one, a book that changes your life?

A book that changed my life is Good to Great.

Number two, a piece of advice you got that you never forget?

Take care of people and all else will follow.

Number three, anything you wish you could go back and do differently?

No. I don’t see anything. My life was perfect.

We have 50/ 50. Some people say, “Yes, of course.” Some say, “No, everything worked out.”

Everything is great. I don’t need to change anything.

Last and final question, what’s still on your bucket list to achieve?

To do a full Ironman.

Shawn, thank you so much for joining us. I know your time is valuable. That is why in the name of our audience, we’ll forever be grateful for sharing some of your time with us.

Thank you. I appreciate it. It’s been amazing.

It’s my pleasure.