Imagine two agency owners: Lacey and Frank.

Both are trying to grow their agencies and need people.

But they go about it differently. Let’s take a look.

 

Agency 1 (“Lacey”) Focuses On Talent

Lacey isn’t content to fill seats. She wants a motivated, growing team.

She takes her time on hiring, looking for a good fit for the culture. Someone with the right attitude. Someone who wants to grow and have a better future.

She finds an ideal candidate: great attitude, strong character, good culture fit. (His skills are a little green, but those are trainable.)

The candidate has a number in mind. Lacey exceeds it by $5K per year.

The candidate is taken aback by how different the team is from others he’s worked with. They seem to believe in something. They’re working together, focused on achieving something. It turns out that Lacey has a clear purpose behind her business–a “why” that the right kind of employees can get behind and invest their emotional effort into.

Once hired, the new employee starts learning the job, but he learns it in the context of the agency’s purpose and values. One of the values is “There Are No Bad Ideas.” He remembers past employers who were hostile toward employee suggestions. (You know, the kind who go through the suggestion box trying to figure out who wrote what?)

Lacey invests a lot of time in the new employee, who feels trusted and cared about. Sure, the money is great, but being treated like a person is his favorite thing about the job.

Lacey has learned how to be a friend and a boss. She’s always kind and friendly, and knows when and how to give important feedback that’s empowering and actionable.

The new employee stays for the long term. There are ups and downs over the years, but in the macro, he’s constantly growing and improving, and emulates Lacey in his relationships with customers and co-workers.

 

Agency 2 (“Frank”) Focuses On Labor

Frank has filled this position 3 times in the past 18 months.

Everyone has left him for small pay increases. Or at least that’s what they say.

He’s frustrated by people’s lack of responsibility and commitment.

He’s offering a starting wage comparable to other agencies. And there are commissions. If people would just apply themselves, they could make great money.

Working for Frank is all about proving you have the skills. Not to say that everyone he hired has been stellar, but at least they’ve proven that they can do the job. Otherwise, they’ve been shown the door.

His latest candidate came from a different agency. She has 2 years of experience doing the exact same job. But she’s looking for something with a shorter commute, and Frank’s agency is 2 miles from her house.

Frank gives her 6 months to hit a certain level of productivity. She knows that it’s on her to make the cut.

She seems like a good person, but she’s coming along a little slowly. Frank spends as much time complaining about her as he does coaching her. After 3 months, her previous agent offers her a pay increase to come back. Poof! Gone!

Yet another new hire that “left for a few bucks.”

Frank starts over.

 

Conclusions

Here are some of the key differences between Lacey and Frank.

First, Lacey sees talent as an investment with a return. Frank sees labor as a cost to minimize.

Second, Lacey hires for fit and teaches skills. Frank hires for skills and laments shortcomings.

Third, Lacey motivates people with purpose, values, and care, where as Frank believes in the stick and the carrot.

Fourth, Lacey is thinking about the long-term development of a team. Frank is thinking about how to get short-term production out of an expensive employee.

Fifth, Lacey spent an extra $5K to take money concerns off the table. Frank spent 18 months of wages to get zero value. Lacey came out way ahead financially.

 

Summary

Lacey understands the principles that govern human behaviors and preferences.

Frank thinks people are fundamentally transactional, and he can’t understand why they keep letting him down.

I favor Lacey’s approach because it leverages high leadership skills in order to make more money and make more happy people. Frank’s approach leverages extrinsic motivation to get short-term gains and promotes attrition.