How I Built A 15+ Person Agency With No Management Skills

hey everyone Nick here I wanted to get a little bit more cerebral in this video than I've gotten on a lot of other videos and I wanted to talk about team building and this isn't specific to make. com it's not specific to automation this is specific to running a business and I really wanted to give this topic the attention and the coverage that I feel it deserves because as somebody that's operated a business now with between 15 to 20 people in it this is one of the most important things that you can get right and it's also wrong so your ability to build a team and more importantly a culture really is your ability to build a business in my humble estimation and uh yeah I got some thoughts on it so that sounds like something interesting to you stay tuned and let's get into

it so I have here a little notion document that I've written just a few thoughts on team building and how to build a strong successful culture with and one thing that I found while I was writing this out is that to really build a successful culture it's actually not so much about what you do it's more about what you don't do and there are a couple of extremely simple and very straightforward tweaks that you just need to make to the way that you manage people uh to essentially just build like an awesome culture that's organic that you know is filled with good emotions and that ultimately does what any business should be doing which is getting done now these are learnings that I've taken from a variety of books these are learnings businesses that I've worked in personally operated or operated as a consultant and it's really interesting because in my time you know building automations and now more doing operations for companies and partnering and that sort of thing uh it's just crazy that the diversity of cultures and diversity of organizations and organizational values that I see I mean I probably like seen or worked with in some way shape or form now at least 40 maybe 50 businesses maybe 40 businesses I want to say um and I've seen everything from like crazy cruel top- down management practice to like some extremely hyper efficient bottomup machines and I've seen everything in between as well and I've picked up all of that information and basically synthesized it into what I would consider a pretty solid operating road map for culture building and so I'm not going to share that road map with you but what I want to do in this video is just talk about the three big things that you should avoid if you're trying to build a strong culture and moreover a strong team so uh thing number one is to praise in public and reprimand in private a lot of you guys probably heard this before uh if this is the first time that you guys are hearing it it's okay praising in public and reprimanding is in private is quite simple it basically means that when you have a wi to share you do it in front of as many people as possible and when you have something negative to say or a piece of feedback constructive criticism to deliver you do that in private the whole idea behind praising in public and reprimanding in private is essentially just building up a flywheel of positivity and making sure that your culture uh is just always full steam ahead let's go go this is also for some weird reason literally the most common failure mode that I see in culture building where I was just on a slack the other day uh where you know there was some report or something that one person in the team had delivered and then in like a 20 Person Public slack channel uh he just proceeded to berate this lovely writer who had really poured their heart and their soul into this piece just in front of like 19 other people and I just want you to think about it from that person's perspective like well really just from like a human perspective we've evolved for like hundreds of thousands of years to have social shame be one of like the greatest motivators and also like the worst self-esteem impactors of all time like our ability to feel confident in ourselves and our ability to get things done basically rests directly on our perceived opinions of the other people in our lives if you want people to feel happy and to feel motivated and to feel encouraged to do a good job you know berating them in front of 20 other people is no way to do it um they're going to not respect you they're not going to respect a lot of the other people in the team and essentially just going to shrink away from it so yeah I mentioned here uh nothing and I mean nothing will ruin how a team member feels about you and themselves and the company faster than just telling them they did a job in front of like 20 other people so avoid that wherever possible my personal rule of thumb here just from like a management POV is I usually do either a weekly or monthly one-on-one with my directs if you haven't heard the term direct before it basically just means the person that you're managing and usually managers can have anywhere from like three up to maybe 10 directs uh before it starts getting unwieldly so you know on my weekly or maybe my monthly one-on ones if there are any issues I see with a person's performance I'll just bring it up then and I'll bring it up when it's just me and it's just them there's no other you know owl in the room listening there's no Observer and there's really nobody to stop them from laying down or laying out laying down laying out why they feel uh how they feel about you know their performance and maybe some strategies they think that they could use to make it better you really want to eliminate like the social status climbing or like The Virtue signaling as much as possible from any sort of work interaction uh virtue signaling and social status climbing this sort of thing is like a cancer in organizations and it's just a byproduct of Being Human it's going to pop up regardless of where you are what company you're in or what you're doing so you need to be cognizant of that but you know when you're delivering constructive criticism or feedback you're doing so because you want them to improve right and just the best way to make sure that they take or soak up 100% of that Improvement is just doing it in a private place that's not in front of anybody else so that's number one that's what I would say is probably the biggest failure case and just something that most of you guys can eliminate pretty easily in your own company praise in public reprimand in private the

second principle that I find extremely important is it's not actually about keeping everybody happy and I think a lot of first-time founders ERS and novice entrepreneurs tend to believe that in order to run a successful team everybody on the team needs to be happy that is not true at all happiness isn't the endl be all if you're attempting to create or run or build a successful organization happiness should be somewhere on your list for sure at least top five but it definitely shouldn't be number one you know performance should be number one um you know fulfillment way more than happiness right the happiness is something that's important but it's not like the main kpi or metric that you should be optimizing for but unfortunately because a lot of novice and young managers dread conflict and that sort of thing uh they'll usually like avoid anything that could disrupt client or sorry team member happiness wherever possible uh and when you do that for long enough your team just gets less motivated they get lazier they become lower performers and it's just sort of like a byproduct of like Humanity you know if we're always happy and everything's amazing like eventually we won't be you know eventually we'll grow dissatisfied with what we're doing and a lot of the time you know if you're working eight hours a day you'll project a lot of that onto the work that you're doing so yeah management isn't actually about keeping everybody happy um the effect of matter is a great book by the way if you guys haven't picked it up or anything like that highly recommend uh in it the author whose name I'm not remembering Mark hman uh in it he makes an amazing case for the two different types of stress so there's distress which is obviously when somebody is panicking they're anxious they're emotional they're feeling a lot of pressure essentially and when somebody's distressed they obviously don't perform very well but there's also another form of stress which is called UST stress and this is a real word if you look at up and you've never seen it before it's going to pop up like this and it's going to tell you that UST stress is a moderate or normal amount of psychological stress that's actually interpreted as being beneficial not necessarily detractive or destructive the whole idea behind UST stress is like when you're ideally perfectly stimulated um there's a principle here in I think it's like office performance or something like that called the yeres Dodson curve and essentially this is done I think well over 50 or 60 years ago now um but they did an experiment where they just modeled how people perform in response to increasing levels of stress and what they found was when stress was really low like down here at the bottom leftand corner performance was low when stress was sort of higher performance was higher at this like Optimal point then performances at this optimal point and then after as you proceeded further and further to the right of the stress graph performance then started dipping down and so nowadays this is referred to as the inverted U curve or the Y Keys Dodson law and you know we use this in organizational management principles all the time uh because the point isn't necessarily to just you know let everybody be happy and Pat them on the head and you know give them team hugs or whatever the hell a lot of these you know super crazy um mega Progressive companies are doing nowadays uh it's to you know allow them and help them to do big things with their lives you know people want to improve their careers they want to achieve large things and as a manager your job is to stress them or stimulate them to the optimal point when they can so what does this actually mean in practice well it just essentially just means having boundaries it means that caring about the performance of your staff members isn't like a negative um sure you should also you know care about their happiness but you should care about their performance first and foremost a lot of the time they want to do really good things they just need somebody that's constantly monitoring how they're doing on maybe a weekly or monthly basis and offering suggestions advice tips and that sort of thing to allow them to get better sorry I'm just getting a call let me just mute that uh you know there are other ways to do this as well um you can foster competitiveness in your staff members uh and I don't mean competitiveness as like hey if you guys don't do this you're going to get dropped I mean like positive competitiveness where you're offering some sorts of prizes or some sorts of like additional bonuses or something like that if somebody does a really good job these are all forms of positive stress or you stress that allow you know you to take people to the next level essentially as a manager and there are things that I think about a lot personal story time caring about people's happiness used to be the most important thing in the world to me as a manager and because I did that and I put that first and foremost my team never grew I was never capable of paying people what I thought they actually deserved I was only capable of paying people what I could at that moment in time my company was incapable of thriving really by not putting people's performance first and foremost like their economic productivity per se I was hurting them I was hurting their livelihoods I was hurting all the other great people that I could be helping and so you know when you put somebody's happiness first it may seem like you're doing them a solid and that you really care about them and that sort of thing but if anything it's selfish because you're just usually afraid of conflict you're usually just afraid of holding that person to a standard and in the long run you're not going to be helping that person you're going to be hurting them so yeah it's not actually about keeping everybody happy it's about making sure that they perform as well as humanly possible and uh it's about essentially bringing out the best version of themselves the last principle

that I find a lot of companies Miss is this notion of freedom and responsibility and I got this from Reed Hastings this is the founder and CEO I believe of Netflix who wrote a fantastic book called no rules which basically just broke down Netflix's counterintuitive management system and this is something that you know when the book came in everybody's like there's no way that Netflix actually manages like that that's stupid ain't no way and then everybody Netflix was like oh yeah that's actually like our jobs that's our day-to-day and I'm not going to go into detail about Netflix's specific management practices but they do have a couple of unorthodox things they do like completely free unlimited vacation you can clock it whenever the hell you want they do things like um they pay people a ton of money they pay people like incentive bonuses they pay way more money than a lot of other people would for a similar quality or skill position uh they give people way more flexibility in their job than most other people would right but you know there are a couple more things on that I'm just not going to beat uh beat a dead horse the two things that I think apply to us you know as young excuse me as young entrepreneurs or people attempting to grow a successful business U maybe in the agency space or the automation space or whatever business you might be running is that you know you can think of a company as basically operating in one of two diametrically opposed ways the first is the company with hawkish micromanagers that sticks everybody in cubicles and then roams up and down the Halls constantly looking over everybody's shoulder to make sure that they perform well this is a company that tries to squeeze every last drop of efficiency out of their staff members and I'm not going to lie to you this works there's reasons why companies do this when they Implement strong top down management practices like this companies actually do better I mean if you think about it like if they didn't then nobody would be doing it right so the whole cubicle thing with the roving managers like yeah that works that's why they're doing it but it's important to look at the time scale that works on and I think after you've run a company for a little while you realize that does work and you do squeeze every last drop of efficiency and value out of people but you do so in the short term in the long term that sort of mindset and that sort of environment leads to usually slightly higher turnover rates leads to people being less satisfied with their work it leads to people over a long period of time performing less than they could otherwise even though in a short period of time they tend to perform well and are more detail oriented and that sort of thing and generally speaking I want you to think of this as like a credit card where you know you are swiping and then you are taking performance away from the future of your business so that you can use it today so I'm not saying that you know this is a terrible approach and companies shouldn't be doing this like you know we're talking the economy here right so if you need a bunch of cubicle rats constantly running up and down and staring over people's shoulders to make money I mean yeah there's a reason why people are doing it and I totally understand but you're sacrificing the long-term growth and long-term success of a company uh by engaging in those sorts of practices this is what Reed Hasting talks about a lot he talks about like the difference between the super structured regimented environment and then what he calls the no rules how no rules rule uh which is what he recommends so there's that first idea where everybody's super regimented and super put into a box and constantly monitored and that sort of thing you squeeze more short-term productivity out of it and the opposite approach and the approach that this guy uses I use the approach that a bunch of other successful agency owners use is where instead of restricting people you basically just give them a ton of Freedom usually way more freedom than you would feel comfortable doing you define the what in their jobs so you define like the specific task they need to be doing but you don't actually tell them how to do that job you sort of leave that up to them and the idea here with giving people freedom and autonomy to do their job and you know hopefully do really good at it I mean I would hope so is typically if you just hire really good people like really smart really talented really high performers and you pay them really well they'll solve the vast majority of problems themselves within a month or two better than you would have been able to show them how as a manager if you had just tried to you know box them into some system immediately and so in that way you basically get to leverage their human capital to make the processes of your business and of that specific task more efficient you also get to Compound on the cultural benefits and the general satisfaction that people feel working in your because when you hire a bunch of admittedly higher paid professionals that are really stoked and really smart and really happy with what they do um they tend to collaborate much more effectively than people that are sort of boxed and isolated and given a routine list of Sops to follow and so autonomy in this way actually costs you more in the short term because you're not squeezing every last drop of efficiency with templated Sops and you know roving bands of hawkish managers but in the long run it massively improves your productivity and it also allows you to retain people significantly more so you spend less on hiring and on HR and turnover and that sort of thing and then also it usually allows you to hire um for larger and like more senior manage roles from just within the company uh and usually that person has significantly less training that they need to do because they've just spent all this time autonomously operating well within your business and so this is sort of the trade-off you kind of have two types of businesses you have that like dystopian 1984 orellan dream where you know you're just making a shitload of money but you're doing it at the expense of satisfaction and of long-term growth or you have this like bustling Progressive Utopia where people are autonomous and they can do whatever the heck they want have un limited vacation time get paid 300K a year whatever and you're sort of banking on that helping you in the long term which you know if you look at just any major tech company now this is what they all do uh it usually does just look at the stock prices so yeah these are the two real differences here and paradoxical ways that uh Reed Hastings talks about companies operating anywh who I have personally used these three principles to grow what I would consider an extremely thriving happy successful business with an amazing culture where everybody in my business is a high performer really enjoys being there we hold people accountable we don't just you know hold their hand through the entire process we let them spread their wings and we let them get better uh and it's just been one of the most rewarding things that I've ever done so just by following these three principles and of course being awesome um you know I think that you could probably do it too okay I hope this helps and you found value in team building or at least some of the more nuanced aspects of culture in particular I find that Mark Hastings uh sorry Reed Hastings no rules book to be extremely valuable so make sure to pick that up if you guys haven't already um if you guys have any questions about team building if you're team building in your own automation agency or maybe some other Service Agency or even like a SAS company and you know I didn't answer one of your questions or you just have some additional thoughts to share please leave them down below as comments i' be more than happy to touch on that if you guys like the video please click that like button subscribe do all that fun stuff and I'll catch you in the next one thanks so much for watching