Jeremy Weisz 4:10
Verne, about that mistakes leaders make in setting up compensation plans and what to do about it. Because, you know, as you talk about in your books, you know, we start off and we’re kind of feeling our way through these things. So I’d love for you to talk about the mistakes leaders make with setting up the compensation plans.
Verne Harnish 4:28
Yes, well, first, that they copy somebody else’s. Why don’t your first print design principle? How do you turn this largest expense into an strategic advantage? You know, the drives energy in the business instead of being a downer? I mean, that’s what’s sad. Here, your large expense often becomes a downer inside the organization. So the first thing is like your strategy has to be different. And it has to match both your culture and what is the second biggest mistake. Everybody thinks that this is a conversation In between the employee in the company, what’s best for the employee, what’s best for the company, but there’s a third person in this relationship, and that is the customer. And so ultimately, you’ve got to make sure that the incentives are designed to align with what it is that you need to deliver for the customer. And there, we hope we brought some important conversation.
Joshua Chin 5:22
Verne, you write in the book about companies paying employees based on their actual contributions? But how do you monitor that, especially for roles that are hard to measure in terms of its output, especially managerial type roles?
Verne Harnish 5:37
Yeah, well, we actually are, you know, principle number three is actually to be very careful and easy on using individual carrots precisely for what you said, unless you can precisely measure that this individual and that individual alone is achieving something, you probably are better off having broader base pay, pay bands, and do more profit and gain sharing across teams, if not the whole company. So you’re absolutely right, we’re because it’s so difficult to measure an individual’s contribution. As you’ll see many examples, Egon Zehnder, which is one of the top executive search firms, they don’t even have any individual commissions, they don’t even compare their 68 offices, because ultimately, what the customer wants is for them to find the best candidate wherever they are in the world, and they don’t want some office or some individual hogging a candidate, because they’re going to get credit for their own score. And they want those people to stay forever. And so the only, the only factor that figures into the piece of the profit pool that you receive, is your longevity. But they love the fact that the executive search person say a side of that fortune 500 Board of Directors probably has longer tenure than any of the board members or any of the executives at the companies that they serve. So that’s where aligning with what the customer wants, is critical side note Container Store did the same thing. And yesterday, in El Richmond, I actually had a former employee with the Container Store, she now running her own company. And she said, That’s exactly that. Every other retailer like Nordstrom, even though they’re known for great customer service, they’re gonna ask you, alright, who did to serve you. So they can then give them a commission, there’s not a penny of commission at The Container Store, because they don’t want anyone fighting over customers.
Elise Holtzman 7:33
Verne this is Elise one of the things you talk about in the book are several things you talked about in the book include fairness, individual incentives, and also negative side effects of inappropriately applied incentive schemes. So you just mentioned this idea of what is best for the customer. In many professional services, firms getting away from the product companies for a minute, such as law firms, partners are compensated largely based on the amount of client business they’re bringing in. And then you’ve got very good practitioners who aren’t bringing in as much business and they’re earning significantly less. So what do you think of that model of compensation, particularly in light of what you just shared with us?
Verne Harnish 8:10
Well, again, that’s why I love the professional services example of Egon Zehnder. They’re their executive search placement firms. But again, I think we have to be very careful. You don’t want to copy anybody else’s, it really is unique to how you’re driving that organization. If it’s a law firm that has its kind of you eat what you kill, I get that. But let me give you an example of fairness that could apply. And we just did it with our client as well. A lot of these companies have 401 K’s. And it’s seen as sameness, we’ve caught talking about fairness versus sameness. The sameness is, hey, we’re gonna match everybody equally. The problem is to your point, the law, the lawyers are making a lot of money, so they can contribute a lot. The support staff not so much. And so one of the companies that we feature out of Sausalito, California said, All right, we don’t think that’s fair. And so they took their pile of money that they would use for a 401k matching, they took 50% of it. And they said we’re gonna divide it equal among the 120 employees pay, the higher paid folks can still contribute more if they want to shelter their tax, but at least the frontline is going to get an equal portion, because they’re all contributing to the success of the firm, kind of to your point. Then they took the other 50%. And they raised their frontline workers hourly from $16 to $20. Because again, the law firm is going to be in trouble if it can’t retain a lot of that support staff in order to do their job. And so just taking the same pile of money and redistributing it, and essentially a more fair way is driven much greater success for everybody in the organization. And I think that’s how we have to think about it moving forward. This is a declareth
Adi Klevit 10:00
My question is around perks. You know, we talk a lot about compensation. And I’ve seen a lot of example, you know, there is the big you talk about Google. So Google is very known for the perks that they give, you know, the pool table, the beautiful restaurants, whatever it is, but also smaller companies, they tend to give perks out to employees in with the thought that that might offset some of the compensation or some of the no compensate, or the bonus or whatnot. So what is your viewpoint on the perks?
Verne Harnish 10:30
Well, you know, we don’t dig into it, because we wanted to really stay focused on the financial aspects of compensation. And we’re the first to admit, there’s all kinds of other factors that come into play. And there’s been so much written about that. And there is so much focus on it, that we thought there wasn’t enough for companies around and by the way, there’s a lot of books on executive compensation. But there wasn’t much for the rest of the folks in the organization. But I’ll give you a couple examples. I think one of the important perks is flexibility and schedules. So one of our clients Chula that is in the hospitality space. And man, that’s a space, it’s really difficult to get talent, fast, casual Indian, they said we’re going to close at eight o’clock, instead of 10 o’clock at night. Look, because you shouldn’t be late anyway, it affects your sleep, it’s not good for your own health. And they really want their employees to be able to get home in time for to put their own kids to bed. And they’re closed a little bit like Chick fil A not on Sundays, but they’re closed on all holidays, including the Indian holidays, so their employees can be home to celebrate those as well. A couple other examples that wipr is with on Tuesday, and our client as well. They are helping my client is helping every one of their frontline employees, if they stay five years, purchase their first not home. But rental property. You know, your home’s not an asset but a rental property is. And they think that’s going to be a great perk and additional perk in order to attract and retain more of that frontline talent that’s needed because they manage other rental properties. And yesterday, I was with a client where they’re actually helping their cleaners. They clean commercial buildings, but Simon Lim who’s an EO member in Malaysia, he said, Hey, we are now have an initiative to help every one of our frontline cleaners own their own home. They’ve got the first six accomplished, and that’s their initiative over the next decade. So I think the perks that are meaningful last comment, but it’s because of the perks, which is why I think Google made a smart decision to actually differentiate the pay. I think because of all the other goodies. I don’t think folks are going to leave over just that one decision.
John Corcoran 12:56
Verne this is John again. And going way way from Silicon Valley. You right about 125 year old manufacturer of welding products, Lincoln Electric, and Cleveland, Ohio, which has he have so many great stories in this book of these different companies have really creative, inventive schemes for compensation. But tell us a little bit about that one, because that’s a fascinating one.
Verne Harnish 13:16
Yeah, that’s the one we actually chose to open the book with, because it has such a draconian compensation plan, which to emphasize why you wouldn’t want to copy anyone else’s, but that you need to be different. And their comp plan is very simple. By the way, they make welding equipment, what does the customer want, they want a great quality piece of welding equipment at a great price. And so their comp is all eat what you kill. It is piece rate based, which means if you have a sick day, you don’t get paid. If you decide to take vacation, you don’t get paid. But if you want to work two shifts, you can make twice as much. And by the way, if you make a mistake that comes out of your pay. Now, this is not a place for everybody. But that’s part of the point. You want to be different. And so it’s attracted a type of talent who says alright, game on, bring it on, because if you do perform, you become one of the highest paid people in the manufacturing industry. And that is enough incentive to attract enough talent that’s powered this company for 125 years.
Jeremy Weisz 14:27
Jeremy Weisz here and John and I talk a lot about Verne about gamification, making things fun. And I would love for any talk about in the book talk about some examples of incorporating gamification,
Verne Harnish 14:38
your thoughts. Yeah, you know, one of my and one of the keys is that the gambling industry, let’s just be blunt about it. They understand human psychology probably better than any other industry. And that’s why comp is so difficult is because you’re dealing with people and people are not logical. They’re psychological. What is it about gambling is the fact that there’s the surprise, it’s not a consistent, we have a chance to win big or not at all. And that really gets that dopamine flowing inside the body. So I’ll give you a practical example one of my earliest clients, EO member up out of the Boston area, and they 60 employees, they make architectural steel, you know, stairway rails and that kind of stuff. And they had about 60,000 set aside as a bonus pool, and so average $1,000 per employee. And the reality was, they were getting no boost from that at all. We know for the research, the motivation of a bonus lasts about a day and a half. If that, then it becomes an entitlement. So we said, why don’t you do something different with the 6000 60,000 5000 a month? So back to their original question, we were able to identify important KPIs for each of the individuals or teams. And so here’s the deal. If you hit your number for the month, you get a chance in this bingo wheel. If you exceeded it, you get two chances in the bingo wheel. And so then once a month, gather all the employees together, announced the results of the month and then said, All right, let’s start the drawing. And of the 5000 3000 went to prizes. So first dinners for two movie tickets, then bigger prizes, flat screen TVs, golf clubs. And then there was a $2,000 cash prize. And I remember one of the months I was there, the wheels going around, we’re now going for this cash prize. And it’s one of the guys in the warehouse. Now, not only is he happy, but the other three guys in the warehouse are cheering as well. And we’re like, what’s going on? Well, you know what happened, they made a pact that said, law, Let’s support each other. And not only hitting our numbers, but exceeding our numbers. So we get eight chances in the bingo wheel. And if any of us wins, we’re going to split it like you know, folks do lottery tickets. And I remember the email returning to me and saying, you know, burn, I could have sent those four through a week long team building course. And it would not have done what the right incentive and gamification did in order to have some fun. So just an example, we’ve got plenty of them again, in the in the in the book.
Jeremy Weisz 17:16
Amazing. Thanks Verne
Joshua Chin 17:18
Verne, Josh Chin here. I’m interested in your thoughts around structuring compensation for risk taking or rather in line and risk taking. You spoke a little bit about crypto at the start of our interview. And I think that’s been a huge shift in the way that people think about entrepreneurship. And it’s getting younger and younger. A lot of crypto entrepreneurs are 1618 Not even graduated high school yet. And I see a lot of large companies struggling to keep up with the emerging changes in in a space. How do you incentivize, you know, innovation within an organization with compensation if that’s even possible?
Verne Harnish 17:58
Well, that’s why I love our friend, Steve Rothchild, the EO member seven employees with lighting access, and it’s his broad profit sharing plan, which we’re really in favor of gaining sharing, or equity sharing. Because what that does is first Steve was clear, he has no delusions that this is going to be motivational are all nobody’s going to work harder. And if you’ve already hired right, you’ve got motivated folks just want to make sure the comp system doesn’t waterboard them to death, in turn, because it represents about 20% of their pay, which is at risk, a very entrepreneurial thing. They’re thinking as much like owners as Steve, and that’s where you’re able to share the rest. Let me give you example, before the profit share, the broad profit sharing, they would go to trade shows. And honestly the employee saw them as these kind of vacation boondoggles a chance on the company’s nickel to go some cool place to wine and dine, hang out with some customers. But after they put the profit sharing in place, they came to Steve and they said wait a second, Steve, there’s only two of these trade shows that we think are worth it. And when we’re there, I don’t think we need to do all this wining and dining. Now it’s their money, which is how an entrepreneur needs to think about it and you do in crypto as well. Hey, this is my money that I’m investing and putting at risk. So that’s one example of by the way, if Steve himself, the owner, had taken away those trade shows, it would have been a major downer, he would have been the bad guy in the situation. Second with hiring, you know, when it’s not your money, the employees were constantly asking Steve, hey, we just need more help around here. But whose employees now are careful if they bring in an additional person that’s going to make the pot of money thinner for everybody. Now, they recently did hire somebody because they rationalized they’re going to deliver more to the bottom line. They And what their salary is. And so Steve, again, he’s got everybody thinking like an entrepreneur, not just himself, and it’s taken the pressure off of him having to be the only one making decisions, and everybody else just asking for stuff. And that’s what I think’s good about the marketplace, is you’re making decisions that affect your own immediate wealth or not. And that’s what the entrepreneurs do. So that’s where I think those gainsharing plans work for John.
John Corcoran 20:27
John Corcoran. Again, as a follow up to that, I want to ask you to talk about Outback Steakhouse, because you read about that in the book. And that’s a great example. And then we’ll go to a Elise after that.
Verne Harnish 20:37
Yeah, well, look at what I love about it’s not Facebook, it’s not Google, Microsoft, you know, it’s a chain of restaurants. And Chris Sullivan and his two co founders said, look, we’ve grown up in this industry. And what’s terrible about it, is the customer just wants consistent food, quality and service. But it’s very difficult to do when you scale. And so they peel back the layers of the bloomin onion. And they realize that the root of the issue was the fact that in a chain, it’s hard to keep a restaurant manager for more than six months, they’re constantly rotating around or they leave or whatever. So they ask the right question. That’s where you want to start with your comp system. If this is what the customer wants, what’s the number one thing we need to achieve? And that is, could we keep the same restaurant manager for five to 10 years, five to 10 years in the same location, we’re talking about 10 to 20x, more than the average in the industry. While they did it with one of the most innovative comp plans that you can read about in the book made 20 year olds millionaires. Part of it was that they had equity. And we’ve been encouraging even young companies like Ike, they went public at 3 million in revenue now worth, you know, market cap 125 million, that having that additional tool in your compensation kit is powerful. And Outback was able to use that, by the way to the point where they didn’t call him a restaurant manager. Back to Joshua’s question. They call them a proprietor, they could actually paint their name above the door and gold leaf, because they knew they were leaving anytime soon. That’s great, at least.
Elise Holtzman 22:20
So Verne Elise, again, some of the examples you’ve offered are innovative, right? They can feel a little risky, they’re exciting. And obviously they can have a tremendous impact. So I kind of have a little bit of a mishmash question. When you have people who are in a profession or in an industry where it’s kind of traditional, right? And you have you may be populated by a certain kind of personality, that’s not so much interest taking, you know, that they say the legal profession is overpopulated with people who are, you know, detail oriented and like to execute, but they’re not necessarily big picture thinkers and risk takers. What advice would you give to organizational leaders who are in who are in those kinds of more traditional industries or professions who see the benefits, but because of the culture of their industry? And because they’ve often said, Well, we have to do what our peer institutions are doing? What advice would you give them in terms of being able to shift in this
Verne Harnish 23:15
way? Yeah, well, first, I’d encourage them to read everything, Michael Porter, the strategy guru of Harvard’s ever written, which is the thing he emphasizes, you don’t really have a strategy if you’re the same as everybody else. So that’s one but I also understand and the question came in yesterday, which is why your question is right on target. If you’ve had a certain comp system, and you want to change, and change is difficult for people, particularly because you’re messing with their livelihood here. This isn’t just, you know, fun and games, whether we’re going to have a pool table or not. And you can try these things. This is their, their livelihood. And so we addressed that in the book. And we suggest that you run your new comp plan in parallel, as if it were in place. And you calculate what people would then earn in, in different from what they would in the old system. And clearly, you want to tweak that new system to show that, hey, you’re going to get paid more, given the results that we’re looking for, and what the customer is achieving. So you want to shoot bullets, then cannonballs, as Jim Collins would say, you want to test it out. I think that’s what Google’s doing with their decision. They’re going to know very quickly whether it was good or not, they can back off. But if it’s going to be a big change, run it in parallel as a phantom comp plan, and then show people at the end of three or six months, what it’s going to do to their pay. And if it’s making the better performers more money, they’re going to be in favor of it. And the lower performers, if they’re not happy with it. You know what? It may be good that they leave and you’ve got to choose And then to attract the kind of talent you need to scale.
Adi Klevit 25:05
Verne. Thank you for that answer. It’s a D, again, my question is a little bit broader. So from your experience, how much compensation actually plays a role in deciding for an employee, whether they’re going to vote for a candidate, whether they’re going to go work for a certain company or not?
Verne Harnish 25:22
Yeah, well, well, you’re right on. And in chapter three, we talk about the three what are called effects of financial incentives. By the way, the least important is what’s called the motivational effect. That is, you’re going to try harder. But that’s what everybody thinks incentives for. The second one is what’s called an inflammation effect, which is it needs to point people to doing the right thing, which is what Steve Rothschilds system is doing, hey, let’s only go to the trade shows that matter. Let’s not bring people in unless it really is going to be additive to the company. And the number one is exactly as you suggest, it’s called the selection effect, which is it ought to convince people, Hey, I ought to come work for you instead of the competition. And that’s what chewelah making the decision to shut down earlier, not work weekends, and I didn’t share their copies. But we think it’s a very conscious capitalism idea. It used to be a day’s work deserved a day’s pay. Now, if you’re paying workers every two weeks, particularly frontline, you’re really scaling on the back of their cash flow. And so a Chula you have an option through a lot of these new services that have popped up, they use what’s called active pay, where you can get paid daily. And that way, you’re not really leaving your frontline, particularly employees at the behaviors of payday loan sharks out there in the marketplace. Now, because of their hours, several other perks, and the fact you can be paid daily, provides a great selection effect for Chula so they’re able to attract the talent to their restaurant versus the competitor. So you’re absolutely right now, what’s the percentage? It really varies across the industry. So I don’t know what that number is. But it’s significant now that people are changing jobs a lot.
John Corcoran 27:20
Burn John Corcoran, here again. All right. You have a great story in the book about sharing the last 10%, a company had this happiness guarantee. Can you talk a little bit about that one? I have to have
Verne Harnish 27:30
have to have you share that? No, I don’t remember that.
John Corcoran 27:35
Okay, refresh your recollection. It was designed sort of stories designed serve any movers, wasn’t it? No, it was right around that though. It was Dan Caulfield design services agreements, it was a sales coach, they would sell 600,000 to a million dollar projects, and they’d hold back the last 10% With this happiness guarantee.
Verne Harnish 27:54
Yes, yes. Yes, yes. So there is I don’t remember it is we’re not allowed to say the name of the company, we barely were allowed to put that example in the book. So I’ve almost blanked it out of my mind about it. So we don’t get any kind of trouble. But yeah, we thought it was one of the more innovative ideas that said, Look, ultimately, we want to make sure that the customers happy with there’s big audio AV installations, which can be very complex down to if anyone has an AB system, just getting the remotes to all work can be frustrating. And so they make sure that they hold back 10% of the final payment. And only when the customer is completely satisfied, do they have to pay that and then all that 10% is then split among the employees. So now it’s not the customer pushing the issue as much as the boss as it is the teammates. And one of the things that’s important to realize, and it’s a foundational idea of Kontron compensation is that look, peers care more for their peers than they do the boss, let’s just be clear about it. They learn more from each other than the boss and they will work harder for each other than the boss. And so the systems that we share in there really take advantage of the team esprit de corps that you’re trying to create in the organization. So again, you don’t have to be the bad guy or the bad gal in that situation.
Jeremy Weisz 29:25
Verne Jeremy Weisz, you know, makes me think of I love all you talk about aligning incentives with the customer, because that’s ultimately what you want to make happy as well. It makes me think of bonuses. So I love for you to talk about bonuses and when they can backfire.
Verne Harnish 29:40
Yeah, they generally backfire, which is our message in that chapter. Obviously, you know, it’s a well worn example, but we saw what happened Wells Fargo, with you’re going to provide incentives for opening up new accounts. Hey, why don’t we just open up a whole bunch of accounts even if there aren’t humans or customers behind it, or we’re gonna open opened it up on behalf of customers that they’re not even aware of. So you got to be careful, you get what you reward. And it does need to align. So those are those situations but in reverse i That’s why I love the mini movers. And it’s kind of a gamification in that situation. You know, if you’re moving furniture, someone’s furniture, what’s the number one thing the customer wants? I don’t want a mark on the furniture, by the way, Number Two’s on time, but I’ll take it a little bit late. If you didn’t put a bone break at the high end, well, not a mark, I don’t even break it. I don’t even want to mark on it. Now, how does the industry handle it? Well, they have insurance. It’s roughly 3% of revenue. And so many movers down in Brisbane, Australia, Michael Hagen, he said, Look, why don’t I instead, provide that money to the team that did that specific move 3% of the revenue of that move, we’re going to make available split among the four or five folks that would be available that did the move. And by the way, it represents about 1000 Ozzie dollars a quarter in additional compensation, back to the selection effect an extra 4000 a year to work for many movers versus the competitor is well worth it. And again, the team is more likely to hold each other accountable that way before the customer gets upset, or the boss. And so that’s where the team incentive is often much more effective. Because we all affect each other’s results, then the individual incentive, which can cause people to compete against each other, which look, you got enough competition externally. I don’t need why you need it inside. Now I want to give one exception, and that isn’t sales. We cover that as a whole separate, you know, topic in the book, and a client I was with on Tuesday, a salesperson can make anywhere from 60,000 to 600,000. At his printing company, it’s a pay band of 10x, depending on your performance. Oh, Verne, that’s incredible.
Joshua Chin 32:09
I’m Josh Chin. I have a question around. When do you introduce a profit sharing? compensation model, especially with your key employees? When you were you’d be thinking about options plans and Phantom shares and all that stuff? Do you? What’s this sequence of events? Do you identify ownership mentality first, then reward with profit sharing or profit sharing that results in ownership mentality?
Verne Harnish 32:39
Well, first, let’s make sure you’re trending towards profitability. You know, if you’re, you know, if you’re Amazon, you know, and you’re going to go decades without making a profit, it’s going to be very demoralizing to have any kind of a profit sharing plan in there, because the employees don’t feel like they have any any say over the investments that the leaders are making in order to grow the company. And so we’re really careful to outline in the book, this the environments where it is effective and where it’s not. But if you come back to the second part of your question, we really do think the the incentive, it like it didn’t Steve Rothschilds company, they didn’t really have an odor mentality until now, it was going to affect their pocketbook. And it was amazing overnight, all of a sudden, they got it. So I think there is a chicken and egg here. And if you’re going to create an environment where you’re going to benefit from acting and thinking like an owner, first, you’re going to attract those type of people. And then they’re going to really contribute because they’ve got a stake in the outcome as Jack sac would say.
Elise Holtzman 33:51
Verne this is Elise again, there are a lot of different businesses have a lot of different models, obviously about whether they have employees, or they’re using independent contractors, right. We talk about the gig economy, and there’s been a lot of controversy over how and when and how much people are being paid. Do you have different suggestions for compensation? Do you have a different approach to compensation when people are using independent contractors versus what we would consider to be legal employees?
Verne Harnish 34:19
Yeah, you know, it’s it. At least it is a great question. I actually am using a company virtual hub. They’re actually a client of ours, and I’ve got a virtual assistant from the Philippines. And I think they’re, it’s more of a conscious capitalism decision. Like I went with virtual hub because of their compensation, their full comp plan for their assistants that paid holidays off, they’re getting their retirement and they’re getting a lot of the perks that otherwise some organizations aren’t providing to those independent contractors that you would have. So I think really That’s a core values decision that the company needs to make, and are we going to treat the independent contractors as if they are employees with all the perks and benefits or not. And with as competitive as becoming in the marketplace, I think it’s driving many companies to try to, you know, share the wealth with a much broader group of people. Now, that being said, one of the advantages of these unicorns is they’re able to scale really on the backs of people that aren’t on their payroll at all. So I was with some leadership at Microsoft a couple nights ago, naturally, the magic of their model, one, they went public early, so they’ve able to make more millionaires than a company, we compare and contrast that with SAS in the firm. But they also have 20,000, Microsoft solution providers, for which they’re out there in the market selling Microsoft products. And not one of those people is on Microsoft payroll, which makes them very anti fragile. So there’s the good decision around independent from a business model perspective, then how you look at compensating them, or how they’re being compensated by the organization’s you’re interacting with is a second more of a core values conscious capitalism decision.
John Corcoran 36:19
We’re gonna do one more question from Adi, and then we’ll wrap things up, buddy, go ahead.
Adi Klevit 36:24
Alright. So, Verne, my question is about the more about the games, right, the gamification, so how do you what are your suggestions in terms of creating the right game? Because, you know, the, the biggest fear, I think, is to create a game and then nobody is behind it, right? So then it’s not really incentivizing. And also the tension between instant gratification of playing the game for this week, as opposed to playing a game for a longer period of time, that might be better for the organization, because maybe you’re making money this week, but then you’re not making the next week. So maybe it has to be on a long term. But you as an employee, you’re playing the game, but you’re not getting the gratification right there. So they can be a tension there as well. So what’s your advice on creating the right game?
Verne Harnish 37:11
Yeah, and you’re right, it backfired. with United Airlines, United Airlines said, Hey, we’re going to give away a Cadillac. And it turned into be a big key motivator for their broad workers. So here’s the key. You’re taking just look. People want to be paid fair. And we know a lot of these fancy bonus schemes and that kind of stuff. Really don’t drive any people to, you know, work harder. That was Dan Pink’s book called Drive where you really exposed all of that my own team came to me and said, Vern, you know, we’re not going to work hard or less hard. We just want to be paid well and fair. So the game of vacation piece is really meant to have fun. Um, you know, I don’t think you’re gonna change anybody’s life. You know, if they want to flat screen TV or not this week. In turn, I love what Sara Blakely did when she sold her company to Blackrock last week. And she gave all of her employees $10,000.02 first class tickets to any place they wanted to go in the world, kind of this one time spot, everybody was clear. It’s not something we’re going to get again, as a way to just say, hey, here’s our appreciation. So keep it small, keep it fun. And, and if you’ve hired right, you’ve already got self motivated, folks. Now you’re just trying to be fair and fun. With your compensation. Get it right and out of sight.
John Corcoran 38:40
Verne this has been such a pleasure having you here. Sarah Blakely, longtime er, I have to point out there as well. But that was so cool. I saw the video you can see the video online. It’s so cool to see it. Before we wrap things up. You’re so well read everyone here loves reading books. And you you cite you give credit to so many other authors. In your books. Jim Collins, you mentioned Dan Craig pink, Greg Crabtree Top Grading by Brad smart. There’s so many books, what else? What other books should we be reading? Are you reading these days? What do you recommend?
Verne Harnish 39:09
Well, the book that I’m likely going to call number one for 2021. And it’s one of the finest business books I’ve read in a decade is Hubert Joly, the guy who turned around Best Buy took his stock from $11 to $110 in a very tough industry. And it’s called the heart of business. And I just think it’s an absolute number one must read for all business leaders in 2021. And then I think number two, Michael Dell’s book that just came out a few weeks ago. Also spectacular. So you got a couple of really great business biographies.
John Corcoran 39:39
And Michael Dell, I think was it one of your early EOH maybe the first 1am I right. I gotcha.
Verne Harnish 39:45
He was he was there at the beginning when it was just the association of collegiate entrepreneurs, and we’re just getting yto started. Hey, let me mention one a third book. I just interviewed him last week. Jim McKelvey, Co-founder of Square the multi billionaire his book called The Innovation stack, and how they took on Amazon, Amazon was gonna come in and crush them. And they beat Amazon. Nobody does that. And so how he was able to break 17 laws in launching square, how he’s able to get an entire financial industry to pivot, and to beat Amazon. The lessons in that book are spectacular as well. So the innovation stack
John Corcoran 40:26
burn Scaling Up Compensation is the book where can people go to get it and also to learn more about you and connect with you
Verne Harnish 40:33
ScalingUp.com my emails [email protected], you can get it on Kindle. It’s it’s only an e book Kindle or iTunes. And by the way, we’re sort of making a statement they’re printing books is really not good for the environment. They’re heavy, the amount of trance you know, transportation needed to move them around. When, if I’ve got a digitally I can even listen to them easily. I can no take. I can search them. You bet. So I hope folks don’t push back or we don’t have paper copies. Plus, there’s a massive shortage of paper right
John Corcoran 41:07
now. But get it on Audible, because we are we’re big audible people. So we’d like to hear that there. So hopefully, it’ll be on Audible soon.
Verne Harnish 41:13
Well, but there’s apps that will actually read it to you without having to buy the separate audible that’s true. Oh, don’t don’t wait, don’t wait. This gives you such a strategic advantage over the competition. I wouldn’t wait.
John Corcoran 41:26
Alright, Verne thanks so much.
Verne Harnish 41:28
You got it. Thanks, John.
