How to Never Have a Trainer Steal Your Clients... Ep 148



In a candid discussion, a seasoned gym owner shares insights on scaling service businesses, emphasizing that while acquiring customers is crucial, managing and scaling services is the real challenge. He underscores that people management becomes increasingly complex with growth and that businesses must focus on operations, which are often overlooked yet vital for success. Drawing from Andrew S. Grove's book, he highlights that employees fail to perform either because they lack knowledge, motivation, or clear communication. To retain staff and prevent them from leaving with clients, he proposes a threefold model: incentivize with money, motivate with opportunities, and inspire with recognition. He concludes by stressing the importance of company culture, continuous training, and regular acknowledgment of employees' achievements to foster a motivated and loyal team.

Summary Notes

Introduction to People Problems in Service Businesses

  • Speaker A opens with a personal anecdote about a gym owner facing people problems.
  • The discussion is set to explore the challenges of running a service-based business, specifically how to prevent trainers from stealing clients.
  • The speaker acknowledges that after marketing and sales, service fulfillment becomes the next business bottleneck.
  • Service businesses are noted for being easy to start due to low barriers to entry, but difficult to scale.

"So I was having a conversation with a gym owner, an OG gymo owner of ours, and he was saying that he was struggling with some people problems."

The quote sets the stage for the conversation, highlighting that the topic of discussion is a real-life issue faced by a business owner in the service industry.

The Nature of Service-Based Businesses

  • Service businesses rely on training individuals to deliver a service, which can be a double-edged sword as employees can leave and compete.
  • The speaker contrasts service businesses with those selling products, noting that services are more dependent on people.
  • There is a balance between the ease of starting and the challenges of scaling service businesses.

"And if you're doing a brick and mortar service business, which just about everyone on here is, the product is someone else, right?"

The quote emphasizes the unique aspect of service businesses where the 'product' is essentially the service provider themselves.

The Real Bottleneck: Servicing and Scaling

  • The speaker shifts focus from customer acquisition to servicing and scaling a business.
  • The key problem identified is not acquiring customers but servicing them and managing the growth of the business.
  • The speaker suggests that managing people becomes increasingly complex as a business grows.

"But the wiser business owners will understand that once you have acquired enough customers, the problem with your business is not acquisition."

This quote reflects the speaker's view that smart business owners recognize that growth challenges lie in servicing and scaling, not just acquisition.

People as the Core Problem in Scaling

  • People management is highlighted as a consistent and growing problem in business scaling.
  • The speaker asserts that all businesses, regardless of industry, require scaling people to grow.
  • Operations, while not glamorous, are presented as essential to overcoming business growth bottlenecks.

"People will always be your problem because the skill set around managing people consistently gets harder and harder the more people you have."

The speaker points out the inevitable difficulty in managing an increasing number of employees as a business scales up.

A Threefold Model for Managing People

  • Speaker A promises to share three reasons why employees may not perform as desired and a model to encourage desired behaviors.
  • The intention is to provide a solution to the problem of trainers stealing clients.

"And so I want to give you is kind of three things of why someone's not going to do what they're doing or what you want them to do, and then a threefold model to get them to do what you want them to do."

This quote previews the upcoming advice on understanding and influencing employee behavior.

Reference to Andrew S. Grove's Operations Book

  • The speaker references a well-regarded operations book by Andrew S. Grove, former CEO of Intel.
  • Grove's insights are presented as highly valuable for understanding operations and people management.

"So I was actually reading this book, which is considered one of the best operations books of all time. Andrew S. Grove, he's the one."

The speaker cites a reputable source to lend authority to the subsequent discussion on operations and people management.

Grove's Two Reasons for Non-Performance

  • Andrew S. Grove is quoted as saying there are only two reasons an employee doesn't do what is expected: lack of knowledge or lack of desire.
  • Speaker A intends to add a third reason to Grove's original two.

"But he said there's only two reasons that someone is not going to do what you want them to do. It's either because they don't know how or they don't want to."

This quote from Grove's book establishes a simple framework for diagnosing employee performance issues.

Communication and Understanding in Team Dynamics

  • Effective communication is crucial for team members to understand what is expected of them.
  • Lack of communication can lead to team members being unaware of their tasks, despite having the skills and willingness.
  • It is a common issue that people are not clearly informed about their responsibilities.

"The third piece is that someone doesn't know what you want them to do, which would be communication, because some people might have the skill and might want to do it. You're not communicating well, and so they don't even know what you want, which happens far more often than you think."

This quote emphasizes the importance of clear communication within a team. It suggests that failure to communicate effectively can result in team members not understanding their tasks, even if they are capable and willing.

Fundamental Issues in Task Execution

  • When tasks are not executed, it's often due to a lack of ability, desire, or understanding.
  • Identifying whether the issue is related to skill, will, or communication is key to finding a solution.
  • Once the root cause is identified, appropriate action steps can be taken.

"They either don't know how to do it or they don't want to do it. And so when you understand that those are the fundamental issues, that is it. It is really that simple..."

This quote distills task execution issues down to two fundamental problems: capability and motivation. Understanding these issues is crucial for addressing non-performance.

Strategies for Enhancing Staff Performance

  • Regular training is essential for staff development.
  • One-on-ones, group meetings, and leadership trainings are methods to improve staff skills and service quality.
  • Staff are considered as products in service-based businesses, and their value should be increased through development.

"That is why having one on ones with your team are really important. That is why having group meetings with your team is important. That is why having leadership trainings, having skill based trainings with your team is important, because you are selling their ability to service clients."

This quote highlights the significance of continuous staff development through various forms of training and meetings. It implies that enhancing staff skills directly contributes to the value of the services offered by a business.

The Threefold Model for Retention: Incentivize, Motivate, Inspire

  • Peter Parks' model for keeping people includes three components: incentivizing with money, motivating with opportunity, and inspiring with recognition.
  • These components are used to attract, engage, and retain staff.
  • Public recognition is an effective way to inspire and retain employees after they have achieved their goals.

"And it's simply incentivize, motivate, inspire. And you incentivize with money, you motivate with opportunity, and you inspire with recognition."

This quote introduces a three-part strategy for employee retention, which involves financial incentives, career opportunities, and public acknowledgment of achievements.

The Simplicity of Effective Management Practices

  • Simple management strategies are often overlooked due to their perceived simplicity.
  • Consistently executing basic management practices is the key to success, even though they may seem mundane or boring.
  • Culture, which is a reflection of the business owner's values and investment in the team, is fundamental to preventing issues like client theft by trainers.

"But the reality is that it is the boring shit that no one wants to do, and that is why most people don't do it. Right, but it is the key."

This quote stresses that simple and consistent actions in management are often neglected because they are not glamorous or exciting, yet they are essential to building a strong business foundation.

The Importance of Culture and Vision in Business

  • A company's culture is a reflection of the business owner's commitment to the team.
  • Sharing the company's vision, goals, and values regularly with the team is crucial for alignment and motivation.
  • Observing the internal operations of a successful company can be highly educational for others in the industry.

"And that is a reflection of you, of you as a business owner, of how willing you are to sacrifice for your team, how much they know that you are investing in them, how much opportunity and how much vision you are projecting..."

This quote connects the strength of a company's culture to the business owner's ability to demonstrate investment, sacrifice, and a clear vision to the team, which is vital for maintaining a motivated and aligned workforce.

Organizational Values and Employee Recognition

  • Companies often have core values and regularly recognize employees who embody these values.
  • Employee recognition is a significant motivator and is celebrated in various ways, such as employee of the month awards and departmental acknowledgments.
  • Recognition can be more impactful than financial rewards in terms of emotional fulfillment for employees.

"Who exemplified these values? Our employee of the month. We have all of these things and we do them every month, right?"

This quote highlights the practice of recognizing employees who exemplify company values, suggesting that this is a regular and structured part of the company culture.

"Here's the recognition of who did an awesome job. And so each department also says, here's our star of last week or last month..."

This quote explains how recognition is integrated into the company's routine, with departments acknowledging outstanding employee contributions on a regular basis.

Employee Motivation Beyond Monetary Compensation

  • Monetary compensation is an initial attractor but does not provide long-term emotional satisfaction.
  • Non-monetary motivators, such as growth opportunities and recognition, are crucial for employee retention.
  • Employers should focus on understanding and providing what employees truly value to maintain high performance and satisfaction.

"Most people, most humans think they want more money. But the emotional increase that you get from having more money lasts like 14 days, and after that, you don't feel it anymore."

This quote suggests that the emotional benefits of monetary rewards are short-lived, emphasizing the need for other forms of motivation and recognition.

"You can keep your profit higher by giving them the other things that people want."

This quote implies that businesses can maintain or increase profitability by focusing on non-monetary motivators for employees, which can lead to higher performance and satisfaction.

Effective Team Management and Communication

  • Clear communication, motivation, and training are key to ensuring employees understand and meet company expectations.
  • Managers must evaluate whether poor performance is due to a lack of understanding, training, or motivation.
  • It is crucial to have the right team members; those who do not fit should be let go to maintain team morale.

"And if they are not accomplishing what you want them to accomplish, then you have to look at how am I motivating them, how am I training them, right?"

This quote emphasizes the importance of examining the root causes of underperformance, such as motivation and training, before making any personnel decisions.

"Is this the right person or is this the wrong person for the team? And then if they are the wrong person, get them out."

This quote underlines the necessity of having the right people on the team and the importance of removing those who do not fit to preserve team dynamics and motivation.

The Importance of a Winning Team Culture

  • A winning team culture in sports can serve as a model for company culture.
  • The coach, or leader, sets the expectations, processes, and culture that determine the team's success.
  • If a company does not feel like a winning team, it is the leader's responsibility to change that.

"If your company does not feel like the winning team that you remember when you were playing ball, that is your fault. You are the shitty coach."

This quote directly addresses leaders and holds them accountable for the culture and performance of their company, likening it to the experience of being on a winning sports team.

"And so if you're able to think about your company as a team and think about what it felt like to be on a team that..."

This incomplete quote suggests that leaders should reflect on their experiences with successful teams and apply those principles to their companies to create a winning culture.

Team Dynamics and Motivation

  • People often participate in sports for the sense of recognition and personal growth, not just monetary gain.
  • The desire to be part of a high-achieving team is a strong motivator.
  • Most people understand that they won't become professional athletes but still value the experience.
  • The analogy between sports teams and business teams is used to illustrate effective team management.
  • Regular practice, akin to regular meetings and one-on-ones, is crucial for skill development and team growth.
  • Recognition and investment in team members are essential for maintaining motivation and preventing company decline.
  • Daily motivation for a team is as necessary as daily personal hygiene.

"People play sports for free. In fact, people pay to play sports. So you can see that money is not the primary motivator."

This quote emphasizes that intrinsic motivations such as recognition and personal growth often outweigh financial incentives in team environments.

"Your practice are going to be the meetings. Your skill development is the one on ones that you're having."

The speaker compares business practices such as meetings and one-on-ones to sports practices, highlighting their importance in team and skill development.

"You have to recognize them when they do the things that they're supposed to do. And you have to do it regularly because people forget."

Recognition is stressed as a key factor in maintaining team motivation, with the reminder that it must be a regular occurrence due to the human tendency to forget.

The Importance of Leadership

  • Leaders must maintain the practices that lead to their initial success to prevent company decline.
  • A lack of attention and investment from leadership can lead to significant losses, such as clients or team members.
  • Painting a vision for the future and providing training and investment are crucial for team growth.
  • Leaders must face the reality that they are often the bottleneck in their business, not external factors.

"And then all of a sudden, you get surprised when someone leaves with 70 clients, right? But the indicators of that were from three or four months prior when you stopped giving a shit or they felt like you stopped giving a shit."

This quote warns about the consequences of leaders neglecting their team, which can lead to unexpected and severe repercussions like losing clients or team members.

"And the bottleneck is you. And that's what a lot of people don't want to face."

The speaker identifies the leader as the potential bottleneck in a business's growth, suggesting that internal reflection and improvement are necessary for progress.

Scaling Service and Team Growth

  • Scaling a service business is likened to playing on a sports team, where teamwork and coordination are key.
  • The speaker suggests that the ability to market and sell is not the primary challenge once a business has grown; rather, it's the internal team dynamics and leadership.
  • The speaker challenges the audience to recognize the importance of servicing their team, which in turn services their clients.

"And ultimately, if you were scaling service, you were scaling people. You were scaling people playing on a team together."

This quote draws a parallel between scaling a service business and scaling a sports team, emphasizing the importance of people and teamwork.

"But the reality is that you just don't know how to fucking service your clients, right? You don't know how to, more importantly, service your team, who is then servicing your clients for you."

The speaker points out a common issue in service businesses: the failure to properly service and support the team, which is essential for client satisfaction.

Engagement and Feedback

  • The speaker encourages audience interaction through comments, tags, and likes on the platform.
  • The speaker also requests podcast reviews to gather feedback and engagement.
  • The conclusion of the talk includes well-wishes and an expression of hope for the audience's continued success.

"If you feel like that, if you're actually listening on podcasts, if you can drop a review that'd be sweet, too. I don't even think I've asked for one of those."

The speaker is requesting reviews for the podcast, indicating the value of audience feedback and the desire to engage with the audience on a deeper level.

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