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Hammer & Grind : Built For Contractors

Hammer & Grind : Built For Contractors

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    Hammer & Grind : Built For Contractors
    Episode•August 4, 2025•51 min

    EP230: Hire-Train-Retain: The Science Behind Building a Winning Team with Mike Matalone

    It is impossible to overestimate the importance of effective hiring in the competitive business environment of today. Choosing the proper people is essential for an organization's overall health as well as the performance of specific teams. The use of behavioral science is one possible strategy to improve hiring procedures. This approach, grounded in understanding human behavior and psychology, provides valuable insights that can lead to more informed hiring decisions. In this episode, Brad and Mike of XP3 Talent talk about: Mike's background and the founding of XP3 Talent Key lessons learned from Vistage and their impact on hiring The significance of systems and processes in business Understanding employee engagement and psychological connections The role of personality assessments in hiring The importance of training and coaching in retaining talent Strategies for effective hiring and onboarding Insights on transforming B players into A players Mentioned: Website: http://www.xp3talent.com/ Instagram: http://www.instagram.com/mmatalone/ Facebook: https://www.facebook.com/mike.matalone LinkedIn: https://www.linkedin.com/in/mike-matalone-6029b87/ Book: Hire • Train • Retain Link to Resources: Grab Brad's tell-all book: The Contractor Profit Blueprint https://thecontractorprofitblueprint.com Help us get the word out to other contractors by leaving us a review or sharing our podcast! Hosted on Acast. See acast.com/privacy for more information.

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    Transcript

    0:02

    Finding people is the easy part.

    0:07

    Hey, welcome back to the show. I have another great guest with me today, Mike Madelon with XP3 Talent. Mike, welcome to the show.

    0:16

    Thank you, Brad. Appreciate it. Great to be here.

    0:18

    Awesome. So we're going to be talking about hiring and talent and all that stuff today. But before we get into all that, just kind of give us a little bit of brief background about you and your business and kind of what you do to help contractors.

    0:30

    Sure, sure. So I started XP3 Talent probably officially about 15 years ago. Prior to that, I spent five years as a Vistage chair, if you're familiar with Vistage.

    0:42

    I'm not familiar with that one.

    0:44

    So Vistage is the oldest and largest CEO coaching organization in the world. They've been around since the early 50s. There's typically about 12 or 15 CEOs in a group, non-competing. companies so that it's a free, open environment that they could talk about anything. The coach chair of the group, my job was to facilitate the meetings. They would come together once a month for a full day, as well as do one-on-one coaching with them. So from 02 to 07, I ran three different groups in the Virginia, D.C. metro area. And so had about 45 members on average in those three different groups where I would listen to them, bring their issues and challenges to the group. So what I learned through that, which is what got me to start XP3, was a couple of key things. Number one, to scale a company successfully, consistently, you have to have a system and a process for everything that you do. Almost every business problem, I don't care how it's presented, you know, whether it's a marketing, sales, production, finance issue, almost all of them are people issues in disguise. Meaning when we would drill down and figure out the root of the problem and why maybe there wasn't a solution in place from the internal teams at the companies is because they didn't have the people who knew how to solve those problems or issues. And usually it was a person that caused a lot of those issues as well. So I said, okay, systems and processes, people are the key elements and either the root of the problems or the solution to the problems. And the solution part came, the issue processing that we used in Vistage was, you know, you would say, hey, I got a financial problem, let's say. Right. The members would drill down, ask you questions. All right, Brad, tell us about this. Tell us about that. They'd go around a couple of times asking questions. You know, the old seek first to understand before being understood. So no one was allowed to give advice until we understood it. And interestingly, at the end of the questioning, you know, my job as the chair was to ask the group, OK, so the problem that Brad just presented and based on his answers to your questions, do you all believe that's still the actual problem we're trying to solve? Right. And probably 70 percent of the time the members are like, no, it's this problem. And most of the times it was a people problem. Right. And then after that, the process was, all right, well, now let's give solutions. So who's got solutions, recommendations, what Brad can do to solve this financial issue. Right. And then everyone go around and take turns doing that. And as you can imagine, you know,12,15 CEOs in a room. Right. Smart people. We usually came up with multiple solutions for that problem as opposed to just one, right, that the person could maybe choose and pick what would best help them. And that kind of taught me that, okay, well, if this group of people can come up with multiple solutions, then yes, why couldn't the people you have in place come up with that? That kind of motivated me, those two key lessons to say, all right, well, let me look around what kind of systems and processes are out there. And as you know, there's systems and processes for marketing, sales, production, finance, you name it, right? And even on the people side, I said, okay, well, what kind of systems are there? Well, I found hiring systems. You know, I found onboarding training systems, you know, ongoing employee development programs. But I never found a program that connected all the dots, Brad. you know, that through the full employee life cycle, right? So that's where I got the idea, okay, I'm going to create a system that is the full life cycle from the hiring to the onboarding to the ongoing development and performance management and ultimately the retention, which is the protection of your investment in all that upfront stuff. And that's how the XP3 talent system was actually born and where the idea came from.

    4:41

    Yeah, it makes sense. I mean, you were front and center of a reoccurring problem that you saw in every business, basically, and saw the need for that to be fixed. I want to ask you, though, you said there was three lessons. You gave me the first two. What was the third one?

    4:56

    Did I say three?

    4:58

    Maybe you didn't. Maybe I made that up.

    5:00

    Yeah, well, maybe you're getting that from our name XP3, which ironically, why we're there, X stands for Excelsior, abbreviation, Excelsior is really spelled with an E, but Excelsior is Latin means ever upward to achieve more. The three, and our name is the science behind everything that we do, and there's a science in the methodology of three. And if you're not aware, you'll start recognizing it now. So if you look around, you know, everything is done in threes because the human brain can comprehend, retain, and apply three things at a time easily. When you go beyond that, it becomes much more difficult, right? Sure. So if you look around, like, you know, you see it everywhere. The Father, Son, Holy Ghost, and religion. You know, the Olympics have three medals, right? Yeah. In geometry, the triangle is the most stable shape that's out there, which, by the way, is the triangle is our logo for the XP3 talent system chosen because of that. But even like take it to business, you know, that we rank people, A, B or C players, right? Sales, you know, hot, warm, cold leads. So everything we do, we try to do in threes, except for, I guess, my... reasons for starting the business.

    6:14

    I may, maybe I misheard you. No, you're good. I may have misheard you, but you said something in there, which is actually what I want to transition to. And I, and I know that with your material and stuff, you're very data and science driven. So speak a little bit about when you mean, when you say like, there's a lot of science in like hiring and data, what does that, what does that mean actually?

    6:33

    Yeah. So, so I'll go back a little bit further. So my education, I went to the George Washington University School of Medicine. not to become a doctor. I'm like a glorified paramedic, if you will. Okay. I was in their EMS degree program, but we went through their medical school and got a lot of similar training. So that's where I first got the science of understanding how the human brain works and psychology around that. Then the other part of the Vistage program, when we weren't solving issues, we would bring in resource speakers. So it was kind of like a living MBA program, ongoing education. These presenters would come in and they really were doing workshops. And so for half a day of that full day meeting, they would do a workshop and you name it, it was any personal or professional development topics. So, so again, three, three times a month, you know, all day meetings, I always got to hear, you know, a couple of really good speakers along with the group, but. One of the first speakers I ever heard was a guy that came in and talked about behavioral science and particularly psychometric assessments or what are better known as personality assessments. And that was back in 02. So if you're not aware, they've been around since the 40s. The DISC is probably the most popular. It's been around since then. This guy is actually using a tool called the Predictive Index. But he taught us about how to utilize that tool and science to make better hires. to be able to onboard people more effectively and to be able to manage, communicate, motivate people. And I was just blown away by the simplicity of that science as it applied to the work world. So, yeah, I pulled the guy aside after the session. I said, dude, this was amazing. Will you mentor and teach me? And that became my path down into the behavioral science side where everything we do is kind of grounded in that behavioral science. And then also the analytics side of what we do is making sure that everything has data to support and back up what we're doing. So that's where the science kind of stemmed from and how this grew out of that. And I can give you multiple applications as we get into different subjects we'll probably talk about later.

    8:42

    I mean, one question was like, how do we use the data in the science? and apply it to people whenever, you know, we are trying to hire them. Like, I know you can do, like, the personality test or the predictive index. Like, there's things you can do to help you give a better understanding of that person and their skill set. But if I'm a, you know, a contractor with three or four or five employees, maybe I still work in the field or not. Like, you know, I don't have a lot of resources or talent to, like, you know, apply a ton of data and science. But what is, like, at the basic core level, what do I need to know about, the science in terms of hiring people?

    9:19

    So the base level, what you need to understand is employee engagement. And at the base level, it's a psychological connection to the organization, which is grounded in your mission, vision, and values, right? So if you think about as an owner of a company, you are committed to do whatever it takes to help your company grow. Well, let's start with the premise that you have a mission, vision, and values, which is a... starting point, right? But even if you don't have them fully defined, you know, you started your company for a purpose, right? And that's your mission. Well, obviously you are connected to it because psychologically, because it's your mission. That's why you come to work and do what you do every day, right? Your vision, right? Again, even if it's not a well thought out defined one, you know, you have aspirations for where you're trying to get to, right? I want to double the company. I want to have owner independence and financial freedom or whatever those aspirations are. That's your vision. And then hopefully have some core values, right? So again, even if not well-defined, that's how you act day-to-day. That drives your behavior, right? Like using integrity as an example, a lot of companies have that, including ours. But integrity means different things to different people. So if that was yours, you would have a meaning behind what integrity means for you and how you apply that to your day-to-day. Well, because you have that psychological connection to your mission, vision, and values, you are willing to do whatever it takes to help your business succeed, right? The second part of the psychology that comes into play is a psychological connection to the work that the people actually do. And that's where the personality assessments come into play when they're used properly. Unfortunately, a lot of people do not understand truly how to utilize them. For example, like to make a hiring decision with based purely on a personality assessment is a huge mistake. And the reason for that is your knowledge and skill dictate whether or not you can do the job, right? And the more experience, more skill you develop, the better you get at execution, right? But the behavioral piece is connected directly to an intrinsic motivation to want to do the work. And that's that psychological connection. So for example, The one I like to use is attention to detail. So are you a detailed thinker naturally? Do you love doing detail work? Or are you like me where I'm good at it, I can do it, but I don't love spending my day doing detail work. I'm more of a big picture, strategic, close is good enough kind of thinker.

    11:53

    Yeah, it's funny. It depends on what it is. Some things I'm very detailed. Other things I don't want to do with any details. So I would say more strategic. Big picture, you know, generally that's how I am. Yeah.

    12:06

    Yeah. So when you use the personality assessments properly in the hiring process and even for your existing employees, which is even more important than just using them only in hiring, is you first have to get a baseline of what are the required behaviors to be successful at this job. So let's take a project manager, for example, right? Most everything a project manager do is about managing the details. Right. They're managing the budget. They're managing the, you know, the quality of the work. They're making sure everyone's there on time, that it's being built properly, that it's to code. Right. So all those details. So if you take a guesstimate, you'd say 75 percent of a project manager's job involves that detailed thinking and application. Well, you can learn to do all that stuff. Right. You can go to school or someone will mentor you and teach you how to be a PM. Right. You can go get. Six Sigma degree if you really want to, you know, take it to extended limits on the education side. But that doesn't mean that you're going to enjoy doing that work. You may be really good at it, but it doesn't mean you enjoy it. And the only way to get consistently productive at something is if you have both. You have to have the knowledge and skill and you have to have an alignment with your natural behaviors, which is defined by the way how your brain is wired to think, feel, And that predicts how you will behave most times, right? So if you need that detail work, you want to have a project manager who is naturally a detailed thinker, who loves doing that kind of stuff all day long, right? And that's what gives you that engagement level. So when we talk about employee engagement, coming back to where I started, right, that is what employee engagement is. It's a psychological connection to the mission, vision, values, the organization's culture, and then to the work that you're doing. And that's, by the way, that we created a success formula in another triangle that says, rather, when you're trying to fill a role or figure out if your staff are in the right role, the first thing you want to focus on is not a job description that's full of vague tasks, right? You got to focus on results. What does success look like for this job? And when do I need that success, right? So that's the first part of the success formula. So for the PM, Right. If you think about some success measures, bring the job in on time, on budget, no safety incidents. Right. So those might be some of the key things now on time. Right. Because I said the second part of the success formula is not just defining the results, but when do you need those to happen? So let's say you hire a new PM. Right. Who maybe was an assistant PM for a year as a little bit of knowledge. Not a lot. Still requires a lot of training, coaching. Well, then when you hire that person, you got to say, OK, well, how soon do I need that PM to be fully productive out there running jobs on their own? Right. And if you need them, you know, you're growing fast, you're urgent, you're shorthanded, and you need somebody that within a couple of weeks or a month of learning your stuff, right, can go out there and run jobs on their own. Well, then you can't afford the learning curve for a young, you know, new PM. You need to have someone who probably has already done it for several years or more consistently successfully if you want them to be productive that fast. Versus if you have the time to train and mentor and say, yeah, I don't need you to run jobs on your own for at least six months or longer, right? Well, then the level of knowledge and skill that's required in that candidate versus the guy you need to be productive in the first 30 days is dramatically different. So when you start with the results, figure out then when do I need those results. That dictates the level of knowledge and skill it takes to execute those results in that timeframe. And then the third component of the success formula is the alignment of the behavior, the target behaviors, like that attention to detail, perhaps maybe a sense of urgency to get the jobs done quickly, being self-confident and assertive to take charge, right? Then you find somebody who naturally has those behavioral traits. That is the formula to create consistently productive and highly engaged employees who thrive and love what they do. So that's a little bit of the science and analytics behind our system.

    16:27

    Obviously, I mean, this goes a lot more deeper. There's a lot more data, you know, to extract a lot more science that goes in there. And we're talking kind of surface level here. But it's just, it's kind of funny to me because, you know, for... And I get it. Like most blue collar people, they're not, you know, they're not a white collar trained, you know, they didn't, they weren't CEOs of a fortune 500 company and had all this formal training. They're out there winging it, right? Like they're just figuring it out. They were a good craftsman. They decided to start their own business and now they're figuring all this stuff out. And a lot of guys, it's just like, I need a carpenter or I need a PM. And I just look for somebody who has that five years, you know,10 years experience. And then I try to plug them into the system, you know, my business. And there's no training. There's no expectations. There's none of that. And then you see them fail, right, over and over and over. And you see the owner getting frustrated. And that's where you see there's nobody wants to work anymore, right? No, there's no good help out there. And I mean, obviously there's examples of that to be true, but it's not true universally. Right. Right. So like, what do you, when you're, when you're working with a new client, what is kind of like just blaringly obvious that you see in, in, in many businesses that they're not doing?

    17:47

    Yeah. So I would probably start with mindset, right? So what you just described is very common with most contractors. There's no good help out there. I can't find any good people. You know, I hire them. They don't show up. They're late. They're doing this, that. Why can't they be like me? Right. Well, you know, and they really believe that there's no good help out there. Well, what I know for a fact is that's BS. Oh, yeah, I agree. There's tons of good help out there. You know, I've been doing this a lot of years now and helping contractors all over the country and all different types of construction. And we're always able to find them good help. Finding people is the easy part. If they want to grow a company and not just be a solo practitioner, they have to adopt that mindset that, no, above everything, you are a training and coaching company. And the facts and the science and data behind that. Brad, is that over 60% of the working population we know are those B players, right? Or what we like to call high potential candidates. Very few people are those natural A players that we all seek when we're looking to hire. And that means that you have to transform those new hires into passionate, collaborative company advocates in the first 30 days on the job. And I don't care even if you get lucky to find one of those A players, right, who was doing the same job down the street for someone else, right, successfully. They have to learn your systems, your processes, your methodologies, your tools, whatever it is, right? The faster they learn that stuff, the faster they will become productive members of your team. Right. And if you delay that training and you're operating on a hope strategy, well, I hope they pick it up and figure it out on their own. Right. Because they're smart. They should be able to do this. Right. You're setting yourself up for failure. And that's what most people do. So it's the mindset of transitioning from I'm a contractor to I'm a training and coaching company is where we start.

    19:46

    Yeah, I mean, that's powerful. I mean, I've heard Brian say that before, and I agree 100% with that. But even like you said earlier, like, you know, the mindset of we're a training company makes sense. But the mindset that there are no good workers out there, you know, we got to eliminate that as well. Because when someone says that, I always say, if that were true, if there were no good workers out there, then how are there other companies that have employees? Because that can't be true. If that's true, there would be no companies. Everybody would be a one-man show out there working by themselves. So that can't be true. And so we can just kind of destroy that mindset of there's not good workers out there. Almost always, and I know you agree with this, but it's almost always the owner problem, right? Like 99.999% of the time, we're the problem with everything in our business, especially when it comes to hiring. What's your thoughts on that?

    20:39

    Give it to me in a question. I'm not sure where you want me to go. And as you're learning, I have a lot of fun. Well, I mean, I want to make sure I'm focused on what you want.

    20:48

    That's fair. No, I mean, like we have, like we were just talking about, you know, we have to have the mindset of, we have to destroy the mindset that we can't find good help, right? But as an owner, we have to also take accountability for the problems that we have with employees are usually our fault.

    21:08

    Yeah. So if I'm hearing you, so let me say this and see if that addresses, if not, cut me off, I'll go a different direction. But remember I mentioned earlier the hope strategy, right? A lot of new entrepreneurs operate on a hope strategy. I hope I can hire some good people. I hope this happens. I hope that happens, right? Hope is a terrible business strategy. So just like, well, we'll flip it to the other side. You know, you're going to go. build a house, right? Or whatever it is you're doing, put a new roof on it, right? Install windows, build a deck, whatever you're doing. Do you hope that the job comes out okay? Do you hope you ordered enough material? Do you hope that it stays together, that it's safe? Do you hope that no one gets hurt? You know, all that. No, we have a detailed plan. We know when we're building, right? That you gotta measure twice. It's a cut once, right? You got to have the right material, the right, everything has got to be done properly, right? And to code. So most likely, right, any even solo practitioner, you know, that's been successful has a system for how they built, right? A system and a process. Well, as I said earlier, you have to have a system and a process for everything you do. And if you're trying to grow a company, which means you have to build a team, hence being a training and coaching company at the forefront of everything, then you have to have a system and process for how you hire, for how you onboard and train. You can't just wing it and hope that you're going to get lucky. And that's what I found that most companies do. Most entrepreneurs do is they, for whatever reason, don't put the emphasis on the people like they need to, realizing that people are your greatest asset when cultivated properly. They can also be your biggest hindrance if you're just hoping it's going to work out. So did that answer what you're looking for? It's the system and process on how to hire, how to train, and how to coach, mentor, retain people.

    23:02

    Hey, just a quick time out from the show. If you're a frustrated contractor who's dealing with low profit margins, stuck working on the tools every day, or doing free estimates for people who are never going to hire you in the first place, I invite you to my private contractor community, The Profit Club, where contractors just like you are adding two to three times more profit each year without producing any more jobs and finally getting completely off the tools to never do another free estimate again. So if you're ready to increase your profits, stop doing free estimates and get off the tools, then all you have to do is click the link in the show notes to learn more about the profit club and see how it can easily two to three times the cash in your pocket, give you a proven sales process that will convert more jobs with ease and get you off the tools once and for all. And the best part is you can do all of this without having to produce more jobs than you currently are. Click the link to learn more. Now let's get back to the show.

    23:56

    Yeah, I mean, I think that's all good stuff. I call it the common sense theory where it's like, I just got to hire someone who has common sense and then they'll just instinctively know how to do things the way that I want it done. You know what I mean? Like just clone myself five times and then I don't have to train them or tell them. They'll just know how to do it. And I just know that like this, this plagues so many contractors, especially younger, you know, smaller. outfits. Obviously, when you start growing in size, you figure some things out and then you start hiring other people, HR or whatever, to kind of take over some of those things. But yeah, I mean, the common sense is like just hire someone with five years experience. They come in and take over. And that's, you know, that's the process. But what I hear you saying is we have to have a system for how we hire, how we train, you know, all of that. And so what I hear you saying, Mike, is that I can't just post an ad on LinkedIn or I'm sorry, on Indeed. that says, you know, I need you to show up and work and you better have your own tools and, you know, you better do good. And it's like, this is what I need from you. Like, I can't just post that on Indeed and then get my, you know, email flooded with thousands of A players.

    25:06

    Exactly. And another flip side of that. So what you just described is what most people do, which I've referred to as they hire one-sided. It's all about what I need. I need you to show up. I need you to have your own tools. I need you to do this, right? Well, in today's world, as we know, you know, it's not like it was even 20 years ago, you know? So, you know, people have a lot of choices in today's world. And that means you have to talk about what's in it for them. Well, why would I want to bring my tools to your company? Why would I want to show up for you every day and put in those extra hours, right? So you have to make sure your hiring is two-sided. And think of it this way too. It's like, you know. A lot of times, you know, and we have a recruiting division, so we do a lot of hiring for our clients around the country. But when they've come to us and say, hey, well, I need this, I need that, I need this, you know, I say, okay, great, I understand that. What's in it for them? Because most of the, probably 60% of the candidates we find, Brad, is what we call passive candidates. They're working for already, they have a job, they're happy, right? But that doesn't mean they won't explore. another opportunity if it's presented as an opportunity. If it's presented as a job with just a paycheck, right? Then no, dude, I'm happy. I like what I'm doing. I'm good here, right? But if you present it properly and say, hey, you know, hey, we might offer you, you know, better pay, better benefits, better work-life balance, an opportunity to grow and advance in our company, you know, and evolve. You start talking about those things in your ad. in the initial screening calls, the goal is you got to assume everyone you talk to, whether or not they are, is that star A player you're looking for. And you got to get them excited about the opportunity. And if you can't do that, then your ability to even attract the right people, let alone hire them, you know, goes down significantly.

    27:01

    Yeah, I like that. Assume everyone's an A player until they prove you wrong. Yep.

    27:04

    But again, you have to have a process to be able to assess and figure out, are they really, as opposed to... you know, hoping I'm going to hire them and then they're just going to work out. So one thing we actually do too, and I'll give a little idea here for the, for like, you know, entry-level skill laborers and stuff is we do working interviews, right? So, you know, we do initial screen, you know, put the ad out there, they apply, even if it's for labor, right? We screen, we have a screening call. Then we say, we explain the process. We say, hey, look, we're going to have you come in for a day and we're going to pay you for the day. Right. There's a checklist of things you're going to need to demonstrate that you can do for us. Right. But we also realize you're trying to decide if this is something you want to do. Right. So at the end of the day, right, the crew chief, project manager, whoever they're reporting to, will sit down with you and have a conversation. You know, if they think you did well. Right. Then the next question they're going to ask is, is this something you want to do? Not just can you do it? And that's where most people make a mistake. They only look for people that can do the job, but you also have to make sure that they want to do it. They want to be part of your organization. So that work and interview is a great way. It's a minimal investment, right? For 20 bucks an hour,25 an hour, whatever you're paying people to find out, you know, can they do it? And do they want to do it? Then. If both of those are there, then you make them an offer to come on full time and you will find your probability of success, even with laborers at that level or entry level carpenter will go up by at least 50%.

    28:36

    Yeah, I've actually done that. I've done, you know, the, uh, have them come in and maybe not like working on a job site, but like he's just in the shop, let's set up a wall, let's set up this, let's see how you hang drywall, how you finish it, how you install a trim, whatever it is you're doing. Um, you know, and it could just even be just a couple hour testing, but yeah. having that ability to see one, it's going to be, it's a little bit of a higher stress situation, right? So you kind of want to see how they're going to perform in that situation. But yeah, I think it's a great idea to do that.

    29:07

    Yeah. Well, even to what you saw, I'll give you one too, like at a roofing client a couple of years ago that we were hiring a sales manager for, right? This guy had been a sales manager for another roofing company down the road for the past three and a half years and was very successful. The assumption was, oh, he's going to step in here and do things the way we need him to do it. So one of the things they do in their first day of training is they teach ladder safety. How do you put up a ladder safely and climb it? Well, this guy didn't have a clue about how to put up a ladder. So they had to show him. And they were, of course, amazed that you've been in a sales manager of a working company three and a half years. You don't have to climb a ladder. He says, we use drones. Don't have to. And particularly as a sales manager, I never had to personally do it. Right. So then we found out climbing the ladder, he got about halfway up and froze. The guy turns out he had a fear heights. Right. And unfortunately, you know, this company was in D.C. And in D. C., you're not allowed to use drones. So, no, you have to be able to even as a sales rep. you know, put a ladder up and climb up there. And as a sales manager, you need to be able to do that to teach your reps. And if you can't do it, you can't teach our reps. So the lesson learned there was, okay, incorporate that putting up the ladder in the hiring process, not after you hire them, right? Which kind of goes to that work and interview concept. So whether it's in the shop and that's what they would do, they were in a two-story building. It's like, hey, for the in-person interview, one of the things you're going to do is put a ladder or put up a ladder and do that. Another client, you know, even like, you know, for laborers, they have to be able to throw an 80 pound bag of shingles on their shoulder and climb up a ladder. Right. So that's one of the things that we do during that work and interview. And like if you're not aware, too, by the way, over 33 percent of all new hires do not make it past the first 90 days. The number one reason for that is the I don't knows. I didn't know I had to do this. I didn't know that. I didn't know this. And that's our fault if they don't know it, because we didn't tell. Right. or test it. So we started incorporating that, that, hey, put the baggage, you know, shingles on your shoulder, climb up the ladder, show us, demonstrate you can do it. And by the way, not just that you can, but this is what you're going to be doing every day. Is that something you want to do? So by doing that within the first probably 60 days of implementing this work and interview process, Brad, we got their first 90 day retention rates up to 85%. Wow. Just in that piece alone. Well, I think like you said,

    31:37

    like there's certain expectations. They have expectations. You have expectations. But we never have a conversation or discuss if those align with each other. Right. And you mentioned and I wanted to talk circle back to about a lot of guys. I say guys, it can be girls, too. But guys is a universal term for me. Guys will they will like, OK, Brad, I hear you. You know, I got to hire an A player. Totally understand that. So if I just go out here and I hide this A player who is killing it at this other company, maybe I pay them more money, maybe I promise them something. They're just going to come into my business and then like fix everything, you know, and make it better. And it's like, no, you, that may be an A player because of the environment that they're in. Exactly. And if you take them out of that environment and put them into your, in your environment, they may flounder. Exactly. Especially if you're looking for someone to build your system. I don't have a sales manager. I'm going to hire a sales manager. Well, someone who's in a system that's already built is different than someone who builds sales systems. Yeah. Right. And like not recognizing the difference of those can be a major, major problem.

    32:42

    That's kind of the assumption like, oh, this guy, like that sales manager. Oh, he was a successful sales manager of a root company down the road. And, you know, references came back great. You know, they said, oh, man, we hate to lose this guy. We had actually sourced them. Right. And got him to resign and come to work for us. They were sad to see him go. You know, everyone we talked to and references said, oh, this guy's amazing. Right. But that was in that environment. He didn't have to do the same things the way he had to do it at this company. And we see that happen all the time, which, again, goes back to, you know, you got to have a system and a process for how you hire. There are no exceptions. I don't care if it's your mama. Right. If she's going to be successful in the role, she's got to demonstrate and go through that same hiring process, right, in order to prove that not only can they do it, but just as equally as I've been saying, they want to do it in this way. And the example I like to also use on that, Brad, is for me. You're familiar with Window Nation? Maybe so. So you'll know them now that I mentioned it. So they're probably doing four or 500 million a year now. They're in probably about 20 different markets. But in 2016, there's two brothers that owned the company who now they've since sold it. But they approached me and said, hey, we got a little problem. They said, you know, we're doing 63 million a year, only been in business nine years. At that point, they were just in three markets, right? And they said, little problem we have is we have over 80% turnover, right? So they said, you know, it's costing us millions of dollars a year, right? So, you know, we're really good at the sales marketing part, you know, their sales, their reps probably at the time, they had probably 120,130 sales reps. They, you know, and again, obviously just residential windows. They had a company close rate of 57% at the time, right? It doesn't get a whole lot better than that, right? You might have an individual, but as a company average, right? So they were obviously very good at generating leads and teaching a 10-step, one-call-close process to convert those leads. What they weren't good at is keeping those people. So hence,80% turnover. In fact, from January to June of that year, they had hired 230 people and turned over about 170, right? So they said, can you help us fix that problem? And I said, yes, I can. But the way I'm going to do it is by implementing the XP3 Talent System. training all your managers and you guys as the owners on this system and how to execute it successfully, right? If they said, oh, no, we want you to come in and use our system, right? Could I do it and learn it? Possibly, but that becomes much riskier, right? So I said, no, the only, you know, if I'm going to succeed, I got to do it the way I know how to do it. And then I explained to them, this is how it works, right? And as long as you allow me to do that, then I can fix your problem. Well, fast forward, you know, six months later, we had that 80% turnover down to 23%. But we also taught them how to convert these B players into A players. So rather than set yourself up for failure looking for the A players, just recognize almost everyone you're going to hire is a B player. And even those occasional A players still need to be transformed into those passionate, collaborative company advocates. And that happens in the first 30 days. So we didn't do anything about teaching their reps how to sell. We didn't do anything about teaching them how to do product knowledge. Obviously, they were already excellent at that. We taught them how to train and create a better learning environment. To that end, one of the key things, another takeaway I want to make sure all the listeners have here is that two things you always want to look for since you need to be a training and coaching organization when you're hiring is A, are they smart enough to learn what you're going to teach them, right? And B, are they coachable, which is very different. You could be the smartest guy in the world, but if you're a no at all and won't listen. Can't help you. So we converted our training to focus on those two elements. Then we taught the trainers how to train better. And by the way, part of that is not just on, you know, how to sell, you know, windows in this case, right? But the big picture, which we could now call the project journey, you know, how are leads generated? How much money spent on that? You know, the typical rep is always complaining, how come I get the shitty leads, right? Well, you know, what we taught them by having the marketing people come in and teach us is like, We put the same effort and money into generating every single lead. Yes, we realize some are going to be better than others, but it's not that we're handpicking which ones are good or not. So what that did is it taught them a couple of things. One, an appreciation for what their teammates did to generate those leads, an appreciation for how much money was spent on generating them. And as a result, we saw that the complaints about the shitty leads went away, right? We also then added to the training. We took them out on the job site. Right. It's, hey, this is how Windows are installed. And we let the PMs teach them and the installers show them. Hey, so when you run across this kind of scenario, rather than make a promise that sets us all up for failure, here's my cell phone number. Call me. Let's collaborate and sell a job that's a win-win for all of us. So what we were teaching them is how to collaborate and work as a team rather than in isolation. Because that's what they did before is just the only thing these sales reps knew was sales about Windows and that's it. So fast forward. The first class we did for them, we hired 18 sales reps, graduated 17 of them. Prior to that, the most they ever graduated was 50% of a class. They had to take a written exam and do a sales demo to graduate. Again, prior, the most, I think their average exam was like maybe 81% for class. Our first class and everyone beyond that, we averaged in the low 90s as an exam. And we graduated 17 of those 18 reps. The proof in the pudding, the real success, Brad, you'll appreciate, was in the next 30 days, right? So they go through a two-week boot camp and they were sent back to their offices, start running leads in week three. Those 17 reps sold over a million and a half in Windows in that first 30 days on the job, right? And one year later,16 of those 17 were still with the company, right? So that was, again, not teaching them anything about how to sell or product knowledge. It was how do you hire better? How do you train better? And really, it comes down to creating that engagement that we started with, Brad. It's like, how do you create the psychological connection? So one of the first things we did in that day one, one of the owners, the two brothers would come in and go over, this is our mission. This is our vision. These are the core values we live and die by, right? Making sure that that was foremost in their mind, trying to create that psychological connection to that. then that helping them understand the big picture was one of the other objectives you work on. Because if they only know sales or they only know production or finance or marketing, then they're going to operate in silos, right? And you need to eliminate those silos. They need to understand the big picture like you as the owner, right? Understands all these pieces and how important they are to work together. You don't need to know how to do those jobs. But you have to have an appreciation and understanding of what your teammates are doing and how to collaborate. That's part of the initial first week training that has to happen to create that psychological connection.

    40:05

    Yeah, I mean, the whole thing is training, right? It's like, you know, a lot of contractors like, hey, you're hired at the Smith job on, you know, Main Street on Monday at 7 a. m. We'll get started. So I know that you. I mean, the XP3 talent system, it's an entire system that you've developed and that's what you help implement into businesses. Are there certain size businesses that this works for or doesn't work for? Or can you just share that a little bit? Like if I only have three employees, do I need a whole system?

    40:35

    Yeah, probably not the whole thing, but for smaller companies like that, we can at least teach the basics of it. But what we have done, well, first of all, I'll answer the question. So if you have at least 10 employees, and probably up to 100 employees, that's where we found the most success because you're in that hiring mode and you've got to have that training and coaching. If it's only one or two people, it's much briefer elements, right? It's not as big of a need. But that's probably the sweet spot,10 to 100 employees. We've worked with companies with 500,600 employees, and we have worked with a lot of companies with three or four employees. And probably the bulk of them are 10 to 30 employees, right, which is the average contractor out there. What we created is a program called Talent Mastery. And basically, in 90 days, we will teach your team how to implement the XP3 talent system so that your team learns how to hire, how to train, and how to retain those people much more effectively. And in fact... We guarantee the results. That's how effective it is. We guarantee 100% satisfaction. If you do not see measurable results in the first 90 days, we give 100% refund back, which I'm proud to say we've never had to do to this date because we always get the measurable results. And the other part of it is you have to be able to dedicate about eight to 10 hours a month for that first three months in order to implement it. Now, after that... 90 days, then, you know, you're obviously not going to become a master at anything in 90 days. So then you have the option, the program renews in 90 day intervals, right? So, and our goal then is to help the team achieve mastery on how to do all the pieces in there. And it typically takes us about eight to 12 months for most companies to achieve that level of mastery to where now they can effectively hire, train, and retain a whole lot better than they did prior.

    42:33

    So if somebody wanted to learn more about your services,

    42:36

    what's

    42:37

    the best way to go about doing that?

    42:39

    Well, the first one I would say is my new book that just launched Friday. Oh,

    42:44

    awesome. Congratulations.

    42:45

    Thank you. Thank you. It's Hire, Train, Retain, the second edition. The first edition came out back in 2019. But what we did that most entrepreneurs like myself and you, those of us that have severe ADD, which most of us do, short attention span, we kept it. Real short, real simple, that you can get through it quickly if you wanted to in a weekend. But it was designed, and this one compared to the first one, was designed as a training manual. So it's in the order things happen now where the first one wasn't. And it's an instructional guide. And even through the Talent Mastery Program, and I think it's similar. I was looking at your website, Brad, and saw you have a lot of videos, and then you do live coaching and stuff. similar concept. We'll say, hey, watch these two or three, five,10 minute video modules on this topic, you know, then read this, you know, these pages or this chapter out of the book. Then we jump on and do a 90 minute implementation coaching call via Zoom. And that's where we say, okay, well, and what you also good to know, we also created a talent management platform. So software that has all the tools for hiring, training, retaining in it. And that's part of what we teach is how to use that. But on the implementation calls, all right, Brad, you log in, right? And let me see your screen rather than me showing you and hoping you learn, right? I'm going to say, no, Brad, click here, do this, go there. And at the end of that call, you will have that system implemented and ready to roll out, you know, as opposed to like, you know, I'm going to implement a new CRM system and six. 12 months later, we're still trying to figure out how to do that. Yeah. No, we're going to make sure in 90 days, all the tools are implemented, the processes are in place. And then after that, it's just getting you to achieve that mastery level. So you become really efficient at doing it.

    44:33

    So if I buy that book, it's going to, it may not, it's obviously, it's not going to tell me every single thing on, you know, about what you do, but it's going to give me a good headstart and be able to allow me to start implementing.

    44:44

    Yeah, it'll probably give you 90% of it. I mean, like design it to where, you know, hey, you could read this and self-implement a lot of the stuff. So like I said, our software platform or web application, you know, originally we were just using like Word or Excel documents for everything. Like for example, one of the tools we have is a knowledge and skill assessment, right? So for a project manager, for example. This tool, we'll break it down by job category. It could be pre-construction, then project management, safety, finance, customer relations, internal team. Under each category, there's a bunch of tasks they have to do. Then we give three definitions of what success either looks like or don't. So we describe unacceptable behavior, like take job site cleaning, keep the job site clean. We'll define what unacceptable looks like. We then will say, this is the norm, the standard, just for you to do a good job to keep your job. And then we describe what excellence looks like. So we attach that also to a career path. So we'd say, hey, you know, you're a PM. I would start you off as a PM1, right? But you can get your first promotion to PM2 in the first 90 days by learning our tools, methodology, systems. This tool helps assess that. And again, we now have it as part of our platform that's a whole lot easier to use. But originally there was an Excel spreadsheet. So we talk about the details, how it's created. So you could create it in Excel, right? If you wanted to do the work, it's going to take a little longer probably to do it that way. But we designed it for those people that want to try to self-implement and do it on their own.

    46:25

    So I can get your software. I don't have to like hire you to come out to my location. I can just get the book and the software and all that. Exactly. Awesome. Yeah. I definitely got to check that out. I didn't know you had the book launch. It's exciting. I'll definitely check that out myself. And then, you know, we can make recommendations to my clients and my listeners. So, Mike, I appreciate you being on the show and sharing all your knowledge with everyone. It's been great. Lots of great information. And thank you for being on. Well,

    46:57

    thank you. Appreciate the opportunity, Brad. And anytime I can help, reach out.

    47:01

    Awesome. Yeah. And I do always ask all my guests one, one question, one more question. Of course, you kind of cheated a little bit with your book, but you can't use your book. Okay. So I always ask everyone, what's a book you're reading or one that you would recommend?

    47:14

    I just started a new one, but I haven't, haven't got the yet. So I can't recommend it, but obvious there's a couple of books I'm going to recommend. Number one, Brian, besides my book, Brian Gottlieb's book, Beyond the Hammer.

    47:28

    Have you read it? Yes. Oh

    47:29

    yeah. Yeah, it's a great book, right? And great instruction, easy story format, you know, even on the audio version to be able to listen while you're driving, right? So Beyond the Hammer is one. The other one, let me grab it and show it to you. And he might be a good guest on your show as well. David Finkel's the author. The book is called Build a Business, Not a Job.

    47:53

    Okay, I haven't heard that one.

    47:55

    And again, it's a short. Now, David's a... He's a New York Times and Wall Street bestselling journal author. He's got like 11 or 12 books. This is one of his first ones and still my favorite because the other ones kept getting bigger and thicker. And I don't know about you, but I don't have time or focus to do that. I like the short condensed, but he describes that most people start entrepreneurs, whatever industry, they start off really just building themselves a job. You're working more hours than you did for someone else. You may not even be making more money, but even if you are making more money, you don't have the time to enjoy it, right? Because you're working 70 hours a week and you can't leave the business because there's no one there to keep it going while you're gone. So that's the premise and concept. Then he breaks it down into three levels, level one, two, and three business. So at different scales, and then shows you what you need to do at each level to get to the next level.

    48:52

    So nice.

    48:53

    This is another great book. That's been one of my go-to resources.

    48:58

    Yeah. I'm going to check that one out. I have not heard of that. Build a business, not a job for sure. I give, I actually give all my, all my clients that come on as coaching clients. I give them Brian's book beyond the hammer. I sent him a package and I give him that book. Cause it is a great book. Yeah.

    49:14

    And by the way, Brian wrote the forward to my book. So you'll. Oh, okay. Yeah. Yeah. So, so it, Just one thing I'll share on it and I would go on, but the opening to his forward, he said, five years and $500,000. Yep, that's my best estimate of the time and money I could have saved if I had this book in my hand 12 years ago. And then he goes into the why.

    49:37

    The hiring is such an important part of business and why people don't spend enough time and energy behind that kind of blows my mind. I understand it as a contractor, but. Guys, if you're listening to this, you have to invest in the hiring process. You have to invest in your employees. So obviously recommend Mike's book, pick that up. Is it on Amazon or where can they get that? Your

    49:58

    website? Yeah, and pretty soon it'll be in Barnes & Noble and a bunch of other places. Technically, it just launched on Friday, but I think they were already out of stock. So my publisher now is printing more up. Maybe a few days delayed on getting the orders out, but yeah, it's available on Amazon.

    50:18

    Awesome. Well, thanks again, Mike, for being on the show, guys. That's the end of it. You know where to find me on the socials, and we'll put all the links to Brian, or not Brian, Mike's information in the show notes. We were talking about Brian Gottlieb. But we'll put Mike's information in the show notes so you can go to his website, learn more about him and his services and his book. And until next time, guys, remember, profit is not a dirty word.

    EP230: Hire-Train-Retain: The Science Behind Building a Winning Team with Mike Matalone

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