Don't think that you have to have a perfect resume in order to get great, influential jobs and be successful. Extroverts are more likely to get hired, but introverts actually outperform extroverts in the jobs. If you're not firing the a holes and you're not hiring people who clearly demonstrate the culture, there's no amount of incentives and rewards, no amount of training that's gonna get you to the culture that you want. Culture eats strategy for breakfast.

Doctor Jeff Smart. It's incredible. You're a founder of GHSmart, a global leadership advisory firm that employs almost 200 employees, serve Fortune 500 CEO's boards, billionaire entrepreneurs, heads of state. It's incredible. And you're helping them with hiring, developing leading talent teams. You have multiple books, but how did you get started?

Thanks, Ilana. It's a great pleasure to be with you here today. How did I get started? I wrote a business plan in graduate school for a new type of company. Let me tell you who my mentor was. Peter Drucker, the founder of the entire field of management at Claremont out in LA. It was for a class project where I thought, okay, this would be interesting. What if we would help people who run or own large companies to make better people decisions using science and using a lot more data than what's typically used around making people decisions in companies. And he liked the market facing part of the business plan idea. But what he said was, you're not going to be able to recruit the right people to join this organization, because you don't know anything, you don't know anybody, and you don't have any money. And so that was the beginning of Ghsmart. Alana. It was like a class project where the market need for data driven smart advisory services around people decisions was clear. But my ability to create a team and pull it off. Washington called into question by the founder of the field of management, which usually.

Jeff will scare the heck out of most people, and they would stop. What made you continue?

It was painful and inspiring at the same time. He also. There's another funny moment. You're giving me ptsd right now during a class session, right after, when he's handing back the business plans. He had a hot mic on, because he was old at the time. He was in his, like, mid to late eighties, he had a hot mic on. He comes over to me and he goes, and by the way, nobody wants to work for a know it all like that. And the whole class, there's 70 people in the class. They're all like, laughing. And I was just thinking, oh, this is a really rough beginning to an entrepreneurial journey. So here's what we did. So this guy coined the term culture eats strategy for breakfast. That was his whole thing. And so I took a blank sheet of paper, Alanah, and I wrote down what we know about what makes a great culture from scratch. Let's make it transparent. Let's make it meritocratic. Let's have a low jerk factor. Let's have people be able to work anywhere, anytime, and have high freedom and autonomy. All the things in my weird little field of industrial psychology.

That's where I got my PhD from, in the field of industrial psychology. But we know what people want in their cultures. So from scratch, blank sheet paper designed it, and then just started talking to people at top firms, trying to convince them to come over and join, and found that we were able to hire really amazing people out of some of the other top consulting firms, mostly because they felt like they didn't have control over their time, where they were. And I was giving them the opportunity to manage their own calendars, and they loved it, and they came. And so that was a baptism by fire desperation. Oh, my gosh. What can we possibly do to get these folks to come over and work with us? But we found a couple of key algorithms for the culture that really appealed to the target employee.

So, Jeff, let me take you back then. You're just starting this thing. Anything entrepreneurial, at least I know, is really freaking hard. I think most of our audience will guess that it's hard, and you decide to take on something, that there's other solutions to some extent out there, you decide to do it better, different, et cetera. Tell us a little bit. How did that start? How did you find your first people? How did you pay them? How did you find the first gigs?

I had done an internship at a venture capital firm a couple of years prior, and Arthur Rock, the legendary venture capitalist who invested in Apple and Intel and all these amazing companies, he was known for saying, nearly every mistake I've made in this business was not in investing in the wrong product, but in the wrong people. And so there was, like, this unspoken mythology around it's really hard, but important to invest in the right people, not just the right idea from the investors standpoint. So I tested that. I tested that with a PhD dissertation. This took, like, two years of work. The first person I called to try to get data to test this and basically look at if investors do a good job at evaluating the people part of a deal. Do they make more money or not? If they don't, then who cares? Like, this is just mythology. Or if they did, oh, my gosh, now we're talking. Now maybe there's a business here. So here's the first leap. Thing that took courage and I was met with failure is I called Henry Kravis, who had donated buildings to Claremont, where he went to undergrad, where I was going to grad school.

And I called and said, I'd love your data on how you evaluate management teams that you invest in, and then your returns. And his assistant told me, no, thank you, and she hung up on me. So that was one of those moments where you're like, ah, shucks. So I called back again, and I don't know why this is one of those moments. You talk to entrepreneurs, you talk to people who fail forward. And I don't know what the mindset is. My mindset was just like, stubbornness or ego or something. So I called her a second time. You said, no, thanks. I called her a third time, she said, no, thanks. And she was literally like, all right, enough, young man, stop calling me. I called a fourth time, and this is back in the days of the fax machine, Alana. And I said, look, I got your fax number. I'm going to send you a one paragraph description of this study I'm doing, which is relevant in Henry's field. And she goes, Mister Kravis's field? I thought, yes, relevant in Mister Kravis's field. Would you please just go read it to him? And if he doesn't want to do it, I won't bug you again.

But if he wants to do it, then let's schedule. So she goes, hold, please. And so she goes and talks to him. And apparently he's like, yeah, sure, sounds great. So I'm on the phone with Henry Kravis, billionaire founder of KKR. This is 30 years ago, and to his credit, what a generous guy. He allowed me to interview him about their practices and then share data. Once I got that one key anchor participant in the study, I got 76 more leading private equity and venture firms to give me their data. And then now I had this amazing database of practices for evaluating management and the returns. And what I found was investors who took a fact based, data driven, thorough, almost forensic level of detail, and how they evaluated the people made four times the returns of those who didn't. And that, my friend, is the spark of an idea where it's like, duh. Now I'm going to go back out to these private equity conferences. I'm going to give some talks. I'm going to put up this bar chart that shows huge returns and small returns, and I'm going to say, I've got the playbook for what these people do different from these people.

Anybody interested? And I just got showered with business cards and we're off to the races. And that was in 1995.

So first of all, that consistency of trying again, which has to be there for entrepreneurs, right? And not necessarily take no for an answer, but also there's going to be different stages in a growing business, which you know very well. And sometimes it's more like the market fit initially or the first type of client, but then it becomes processes, leadership, automation, it becomes different challenges. Talk to us a little bit about navigating that.

Navigating that came to a head in this moment. So demand from the beginning was very high because I did this study, I found this great finding, and then the interest in it was very high. And then the challenge became finding people. I didn't have any money, as Peter Drucker pointed out. And I didn't really feel like raising money for a services firm. You know, I wasn't buying a factory, I wasn't creating a product like it was more of an intellectual capital thing. So I contracted with seasoned pros in this field who needed clients, but were great practitioners of management, assessment and coaching and people diligence. And I brought them leads and I took a 30% charge on it and gave them 70% of the revenue, but we priced it up high. So they're actually making more than they would have ordinarily. They were thrilled. But then I remember we were sitting, this is maybe four years in, we're sitting with a prospective client that we really wanted to work with. And I had this contractor team, and no one had the same business card. Everyone was from somewhere else. And the client said, do you all even work together?

And it became clear that the contractor model had lived its lifespan of usefulness, but it was a good way early on without a whole lot of capital to have some bandwidth to be able to deliver. So at that moment, we just decided, okay, we have enough demand, enough client interest to merit hiring full time people and be able to pay them and not feel bad like we're going to go out of business anytime soon. So we switched it from a contractor model to a full time model. This is 2004, nearly nine years after I started the company. We switched models. And at that point the question became, how do we learn from other great firms on how they're set up and processes and governance and everything so that we can actually build it. So proving the market early, one, hiring people, two. And then the third step was really around, trying to build it to scale. That was scary and difficult and none of us had done that before.

Talk to us a little bit about that because I think there's also inevitable money fears and money worries that will come with that entrepreneurship endeavor. And you almost need to build such a robust trust in yourself and your ability to create the funds, to create the salaries, to hold this thing together. Can you talk a little bit about that?

Jeff I really appreciated and benefited from other founder and entrepreneur stories. Bill Gates put a year's worth of cash, held it on the balance sheet of Microsoft so that he knew that even if times are tough, we could still pay everybody for a year. We did something like that. Domino's pizza guaranteed. You got your pizza in 30 minutes or they would give you your money back. No high end management consulting firm would guarantee the accuracy of their work and the results for the client thought, all right, were going to do that. Were going to guarantee client satisfaction, were going to put it in our contracts. If you dont like it, you dont pay like a no quibble, no hassle, money back guarantee on the services. So that was another thing. This is just basically listening to and watching other successful models and sort of pick and choosing what they did. Somewhere along the line it became clear that we needed to invest more back in the business and training and light bureaucracy. Not heavy bureaucracy, but just light support structures and that kind of thing. That was painful. It felt like a waste of money.

I remember one of our biggest clients embarrassed me early on when he said at a steak dinner, sorry, I got to ask you, are you mailing me invoices from your desk? Are you personally putting invoices in the mail to me? I got to ask you this. And I looked at him, I got beet red and I said yes. And he said, okay, you need to hire a CFO and a back office team to do that stuff so you can be out with clients and out speaking and be an ambassador for the brand. And I thought, okay, so we hired our first CFO earlier on the journey that I think we might otherwise have based on really good feedback from clients. And that was a great move. So it was kind of like over relying or relying a lot on advice from others and just imitating what success patterns look like. And then that got us to about 2009 with the great recession and contraction and our revenue was off 20%. And it was like, a little bit scary. And at that moment, the next big leap happened where. And this really set us up for success.

Where I stopped managing the business day to day. And that's a moment that's very difficult for any founder, as founders were very micromanaging or super involved in these. This is our baby, right? But that recession burned me out enough. Candidly, I was thinking, tired of managing all the fires. And so I went to my most trusted partners, and we talked about who should run the firm. And we picked Randy street, who was the youngest of the partners, oddly, but had a great background, was an engineer by training, very steady, very smart, very planful. And I was more of that visionary founder. And so it was a good balance. And Randy, then he told me the most embarrassing, weird moment was when he said, great, thanks. Sure, I'll take the job, but you can't show up at management team meetings otherwise. He said, I won't have any authority. It'll be difficult for me to do my job. And I thought, well, hold on a second. Of course, founder, you have a big ego. You're like, how in the world could these management team meetings go well if I'm not there? Well, Randy taught me how to be a founder who is hiring professional management to run the business.

And we agreed on my role, his role. We agreed on communication, cadences, and this is all him. I give him all the credit for this. He was like, I want you to have all the info you need, when you want it, when you need it. Here are the clear decision rights that you have and the ones I think you're going to give me. We got really clear on all that stuff. It set up for a ten year, ten xing of our business from 10 million in revenue when Randy started to just hitting $100 million revenue over ten years, which is a 25% growth rate. So that was a lesson of it's not do less, but it's step back enough to give your really talented people space to operate.

And I love that you said that, because you literally almost need to fire yourself from different roles in order to let the firm to take over to other people to take over. And that's a really hard moment. And I think that's also that realization that I would love to talk about is then you need to bring the right people to the right seat in the right bus, right, which is not easy. And you talk a lot about that on how do you create that synergy of bringing the right people? Because, again, bringing a CFO at that stage was a really, really brave decision. It costs a lot. You need to know that it's going to be worth it, letting somebody else take over. How do you bring the right people and lean in to trust them?

It's easy for many business leaders to say, hey, talent really matters and we want to get the right people on the bus, in the right seats, Jim Collins style. But then the question is always, as you just asked it, how to do that, because everyone gets that. That's something you should do. Well, the good part of this story is that's the one area of focus we've spent the last 30 years really honing as a service for our clients. And we've practiced what we preach internally. So what we found and then all this, not to pump our book, but it's all what I'm about to say. And I'm going to talk quickly just to get it to your listeners ears. It's in our book who, which still just celebrated its 15 year anniversary and every year for the last 15 years has been the top selling book on hiring in the world. So that's weird because we wrote it, we thought it was good, but we didn't realize it had this kind of staying power. So it's still alive and kicking. But there are four steps that if you follow them, this is based on over 10,000 cases of successful and unsuccessful executive hiring based on data, not just someone's opinion.

And there are like many pitfalls which we can talk about that are funny. Some are a little bit funny. But the four things you have to do if you really want to nail hiring and be able to delegate, put the right people in the right spots are one, to create a scorecard of the criteria that you're going to use to evaluate all the candidates. Most people don't do that. They just intuitively gut feel their way into, oh, we're hiring a CFO. Well, step one, what do you need this person to do? Are we talking about a pre IPO type of CFO? Are we talking about a bookkeeper? Are we talking about someone who's got expertise in certain areas or what? So really articulating, what do we need into a scorecard? That's step one. Step two is sourcing. So how do you find, especially if you haven't hired for a certain role before, maybe you're hiring for an AI chief technology officer today, or maybe there's some important key strategic role maybe you haven't hired for before. So sourcing by getting your colleagues to source people, that's a wonderful idea. And by the way, paying them too, like a referral bounty, if they find someone, you pay them something.

That's something about 15% of business leaders do. With great success sourcing people, that's key. You want to have plenty of candidates. Step three is selection and select the right person. And you have to do long interviews with a small number of finalists in order to really understand someone for who they really are. So a bad way to interview people is to talk about just random stuff like sports or, I don't know, hey, what Broadway show did you see? You don't do that. That's bad news. Don't get that data. Also, this one's subtle, Alana, don't ask people in interviews hypothetical questions how they would do something, because what we found in what 100 years of research in the field of organizational behavior suggests is that if you ask people hypothetical questions and interviews, they give you hypothetical answers. So don't do that. It's not useful data. What you should do is spend a lot of time really understanding what someone's done throughout every step of their career. What were they hired to do, what they accomplished, who'd they work with, how did they get along with certain people they worked with, why they left their jobs, etcetera.

Those are the questions that end up giving you the most useful data, and then you really understand what someone's boundaries are, what their strengths are, what their weaker is, are. And you can make a good judgment for if they're a, a fit or not, both for the technical part of the role and even more importantly, for the culture part of the role.

How do you see, and I'm curious, hunger versus talent and skills. So how do you assess people? Because again, I've hired people from when I was in a startup before, from the oracles of the world, but then they couldn't deal with what I was trying to deal with. And on the other hand, I would hire somebody that didn't have the skills, didn't do it before, but they were so hungry to figure this out. So how do you see the balance?

In the who book, we say skill means nil without will. So I'm with you. I think the drive and motivation in a different line of research we look at, we call it our potential model, where we're looking at folks who are earlier in their career, DQ, which is the drive, the will, the hunger counts for a lot in predicting future performance. So relative to the skill part, it's probably at least as important, if not more. I'll tell you, the other couple markers of potential beyond just the hard work and drive, which is super important, is the EQ part. The ability to read a room and be persuasive and get along well, not just get along like back slapping style, but be able to work effectively with others, that's a predictor of performance. And the last one is around. We call it CQ, or the cognitive quotient. And cognitively, your thoughts. The key part there is being able to prioritize, being able to cut through the noise of everything going on and say, ah, for us to be successful. Miss Mission, here are the two or three things that matter most. And so those are the things that you can spot in people who don't have a very long track record.

And you can say, oh, wow, even though they don't have a super long track record, they have the heart for it. That's the Dq. They've got the social skills to adapt and be able to be influential in their business relationships. That's the EQ. And then they've got the cognitive ability to really prioritize what's important. So whether folks come out of military like you and they're really successful in entrepreneurship, whatever the context, you can pick up on if people seem good or not so good at some of those key potential markers.

And that's incredible. And you have a lot of great free resources in smart thought sites, and we'll have the link and you have a lot of interview guides. But if you can share a little bit, I'm curious, first of all, what are some of the, and again, you answered a lot of the interview questions in terms of really understanding where they've been and what they've done, etcetera. But if there's specific interview questions that you think are just, this is it. This really helps me. And then maybe, how does an interviewee rise above the noise? Because there is a lot of noise in the system. So I love to hear that.

The one that seems to give the best information is asking someone the name of a boss. Like, so when you're talking through their different jobs, they've had you say, what was your main boss's name and that job? And then if you really want to set the hook on this, you ask them to spell the boss's name. So, okay, now they've spelled the boss's name and you say, alana, if you advance to the next stage in this interview process, we might ask for your help in setting up some reference interviews, if that's okay with you. And then you, of course say, yeah, of course and then we say, oh, okay, and we might want to talk with Susan Thomas, your boss in that job. What was it like working with Susan in that job? And then you tell me what it was like working with Susan. Then we say, what do you think Susan will say your biggest strengths were back then? And what do you think Susan will tell me your areas for improvement were back then? This is the lottery of interview questions because there's some accountability to it. You're going to talk to Susan, she's going to tell you stuff, and the candidate doesn't want to look like they're clueless or unaware, so they'll actually tell you some really meaningful things that maybe Susan won't even reveal.

And I just think that this is a wonderful way to get some accountability into the selection process versus, you know, what happens if you just ask someone point blank, like, what are your weaknesses? And they give you fake weaknesses, but if you frame it up, like, hey, boss's name, spell it. If we advance, we'll ask your help in setting up a reference call with this person. What do you think she's going to say about you? Is really a nice way to get good sense for the strengths that someone has and the areas for improvement that they have. Also that, and here's a weird one, why people left jobs. You got to slip this quickly and don't make a big deal out of it. Be like, oh, you know, why did you leave that job? And listen for if they got pushed out or if they got pulled to something better, push versus pull. If you find people are constantly getting pushed down to their jobs, that's not a trendline you want to bet long on. You want to avoid folks who are costing and pushed out of their jobs. And it's subtle, too. This one character I remember, he was interviewing for a CEO job at one of our clients.

He resigned because he had a difference of opinion about the strategy of the business with the board. And I think he thought that was going to be a sufficient answer to the question. But instead we say, get curious as an interviewer. So I say, oh, what kind of a difference of opinion? And he basically said, well, and then he explained how he was as this division president at the time, he was losing revenue and the board was putting pressure on him. And then he sort of gotten into an argument with a board member at a board meeting. A timeout was called because it got heated. They went into the hallway, and then the candidate I was talking to was smirking and being weird in his body language. And I said, what happened in the hallway. And he said, well, the chairman of the board came and got in my face, and that was a mistake. And I said, well, why was that a mistake? And the candidate said, well, because I hit him. And I said, oh, you hit the chairman of the board at a board meeting? And the candidate said, yeah. And then I just, you know, looked at him with my professional interviewer face, and I said, well, what kind of a hit was it?

Apparently, bam. A big, open handed man slap to the face was the answer to that question. So that was the answer to the question, why did you leave that job? It's because he actually hit the chairman of the board in a board meeting. That's why he left that job. So Jack Welch from ge years, a million years ago, for some reason, I remember in his book, he said he really likes to ask people why they left their jobs because it contains clues about how well they performed in that job that moved them to the next thing. I think that's right. I. That's something non obvious that your listeners could take away, which is really understand the story of why and how people left jobs. Oh, it was mutual. I mean, that's a joke, right? Mutual. So I always ask the person again with a straight face because you want to be respectful. Alana. Oh, it was mutual why you left that job. Okay, who broached the subject first, you or your boss? Oh, your boss did. Okay, well, it was mutual. It sounds like you agreed to leave after your boss raised it as an idea.

So that's another interview question that might get overlooked. That's actually really useful to know why people leave their jobs and move on to the next thing.

I love this. This is so funny. I've never run into somebody hitting somebody. So, hey, that's a first. So you learn something new every day. And I remember I used to ask a little bit, what is one of the hardest things you've done in your life? And I would get really interesting question, like, is it just a little argument with the boss? That's the hardest thing that they ever cope with? Or is there something really hard that they needed? Anyway, was another one that I think I really like using. So, as a person right now, in the last, whatever, a few years, it is hard to rise above the noise. So, Jeff, what would you say to candidates? And again, you gave them really good hints about the drive and the EQ and the CQ. But what would you say to candidates right now? Maybe they were pushed out, maybe they were laid off. And now it's like, how do I recover from this. What do you say?

From the candidates perspective, from the job seeker. So I will no longer give the employers on the call the tips. This is for the job seekers. For this answer, I'm relying on a whole stream of research we did called the CEO Genome project, where we looked at how people move through their careers and what you can do in order to maximize the chance that you make it to the C suite and succeed. And actually, there's a new version of that that we're double clicking on to look for folks specifically who came from pretty tough backgrounds. You know, maybe they grew up in a really low income school district. But, like, what is it about the individual and the companies and the governments that allowed folks to move their way up and succeed in the C suite? So, okay, now I'm putting that hat on and I'm doing career advice. So one interesting thing is, even if you've been pushed out, even if you've had a rough go, we found that folks who make it and succeed in the C suite also have been pushed out and have had bumps in the road. So don't think that you have to have a perfect resume in order to get great, influential jobs and be successful.

That's one thought. It's just like, don't give up. You're not out of the running. Next is, I'd say, networking and then actual interviewing. I think networking takes guts in a way that this generation is so used to hiding behind screens and texts. For example, the Gen Z millennial generation, they don't really want to reach out. Or if they do, it's more broadcasty and less targeted. I found you can on LinkedIn or finding people's contact info pretty easily. Put a well written, custom, custom customized message together and senior executives will respond. I'll respond. Some chairman of a company people, when they just send me generic stuff, I don't respond. But if someone's like, hey, look, here's what you're all working on. This happened to me yesterday. I'm a top performer at Bain. I've got some international experience. I know that you guys are expanding to Singapore and this region, and I have worked there successfully. I'd love to have a 30 minutes conversation with you or someone from your team. And it's like, nailed it like that. Yeah. We are actually looking for people like you. So thanks. So a customized message is so much better than just a generic sort of thing.

So that's on that. On interviewing, if I were coaching someone I really cared about, on how to prepare well for an interview. There is some implicit or explicit scorecard being used to evaluate candidates. So read everything you can and try to figure out, or almost like reverse engineer what you think the outcomes are. They want you to achieve the culture parts that that company or that CEO talks a lot about that are important. It's not that hard. Everything's available online now. You can learn anything about anything. So I would like almost architect a little checklist, a reminder of, okay, this company stands for these values. This company for this role, clearly needs me to do x, y, z. And just be mindful of that as you come in and start telling stories about yourself. Lots of interviewers will do a bad job. So unfortunately, job seekers, you're going to hear biased, weird questions. You're going to hear nonsensical things. Semiconductor company senior executive told me he really likes to ask people what kind of animal they would be and why. And I thought, okay, who am I to judge? Does it work? And he was like, no, but interviewing is so boring, it helps break up the monotony.

And I'm like, okay, okay. So although cracking jokes and amusing oneself could be a goal of the interview, generally it's more about getting the right information. So I think that's it. And then finally anticipating a scorecard and sharing the right data about yourself with the interviewer, expressing a lot of just genuine interest in them and their story and their company and what they're trying to do and what's easy or hard about this stage of growth they're in, I think is very normal for very high performing people to do. Low performing folks who are kind of chronically lower performing don't even think about or ask about you and what are you trying to get done, and tell me about your story and that kind of thing. So I think that's just an extra tip for the job seeker to make sure they realize that learning more about the person interviewing them as along the critical path of getting a job just as much as sharing the right information about yourself.

Oh, brilliant. You need to almost re engineer this and think about all the questions that are going on in their heads even before they talk to you, because they already have questions in their head and they might even note say them. But you want to make sure that in your interviews you actually address them right.

What you're just mentioning here, I think is very advanced too, which is anticipating the obstacles to getting the job that you think your resume or you have and then addressing them head on. There was an introverted candidate for a very senior tech role in a big company. There were some more, like, celebrity candidates who are moving along the process quicker. And then this woman was very talented, but she was quiet, but it was a tech role. That's. It's fine to be for a job, but you're, like, brilliant at it. That's fine. We were able to pick up that she was a very forceful decision maker and very powerful, actually, in her leadership approach, even though her interview personality seems quieter. And we called that out to the client. We said, hey, look, if you really want to get this stuff done, it was a big transformation, big digital transformation. She's it. These other people are. I didn't want to say, like, stuffed shirt figureheads, but they'll talk the talk. She's going to get it done for you. And sure enough, she got the job and just kicked butt and took names. That's the kind of thing where bad interviewers will make judgments about people either based on their resume or on how they present themselves during interviews that will lead to bad decisions.

So if you're one of those people, you happen to be more introverted. And by the way, our CEO genome research suggests introverts actually outperform extroverts in the jobs. Extroverts are more likely to get hired, but introverts actually outperform extroverts by a small margin. But it's literally, it's not like extroverts win the day. Introverts actually win the day. But if you're introverted in interviews, like, be aware of the fact you got to really sell yourself on being a decisive, fast moving communicator influencer, even if you don't seem that way while you're talking to someone in an interview.

So interesting, Jeff. And right before that, you touched the word culture. And first of all, GH smart. Your company is ranked number one at Glassdoor among top firms. The consulting finance tech, which is really incredible, really hard to get, and really, number one, a great place to work. How do you create such an organization that teams really love?

I'm going to go from hardest to easiest ways to build a great culture that teams really love. The hardest thing to do is fire people who aren't living the values. It's hard to do. Maybe 20% of leaders do that if someone's performing financially, but being a jerk to others and really doing culture destroying stuff, 80% of managers will not take that person out. We do. It's so hard to get fired at GhSmart, honestly, we don't even have strict revenue expectations. That's a pretty low bar. It's really make colleagues happy, make clients happy. Those are the most important things. Live the values. But when someone maybe they slip through. Although we're the world experts on hiring, we have about a 90% to 95% success rate. So folks will slip through who shouldn't be here. And when you spot that and you give them warnings and you give them chances, and you really teach folks like, hey, look, you can't tell someone that they don't have choice on what client team to work on. When the whole firm is set up to give people free choice. You don't make people do a client project they don't wanna do.

We don't do that here. And so when you tell people a number of times and they still are mistreating folks, you gotta take them out. So that is pretty hard for many to do. I don't know, it's not that hard for us to do because it's so clear and it's all about match. And the most sacred thing in a culture is just having people actually live in the culture versus especially high performing financial folks who are mistreating others. So you got to take them out. Boom. So that's one hiring for people who are very diverse in background and perspective and style and all that is desirable. And they can't be outside of the ethics and communication and transparency. So I think there should be a small number of cultural values that are sacred and important. And then on top of that, you hire like very diverse folks from a bunch of backgrounds. But that's helpful too, on the hiring side. Hiring people who already naturally do the culture is a pretty easy way to perpetuate the culture. And then incenting folks and training, I think is a distant 3rd, 4th on how to promote the right culture.

If you're not firing the a holes and you're not hiring people who clearly demonstrate the culture, there's no amount of incentives and rewards, no amount of training that's going to get you to the culture that you want to think. So I'm going to summarize with firing first, hiring second, and then incentives and training third and fourth for how to promote the culture that you want. But I think it's a pretty straightforward process. It's like, hey, what's our business strategy? And who's our talent pool? And that intersection of what we need people to be good at, to deliver great value to customers and to clients, and what people naturally want to join and stay at a company. It sort of just look at the overlapping of circles and you put your finger on a couple of key things, then you just have to be very focused and disciplined in how you fire, hire and set and train people around. That's short number of key cultural attributes.

I wrote from before, low jerk factor. I love that one.

Not that many people are jerks. I don't know. In your experience, they're enough. Or weirdly, over time, sometimes people get too comfortable in a company and start misbehaving and you give them warnings and say, hey, like, knock it off. And if they don't knock it off, then you got to take action. I used to think hiring was everything and the first thing that determined the successive leap potential for a person or for organization. I don't believe that anymore. I actually think culture comes first because you have all the control in the world on the culture. You can design a culture how you want it, and then you can hire people for it. And if you have a great culture and it fits your strategy and it fits what your people want, then you deserve to be able to hire and develop the best talent who then take great care of customers and deliver great products and services, and then shareholders are happy. So it goes. I think it goes. Culture drives talent, drives products and customers, drives shareholders. And so if you believe that, then that suggests really putting a lot of focus and emphasis on getting your culture right.

I'm surprised monthly by otherwise pretty successful business leaders who act like the culture is like, not in their control. Or you inherit a culture, you can't really affect it. The hell you can't. You can affect it by who you fire, who you hire, how you incent, how you train people. Those are very actionable, tangible ways that you can make the culture what you want it to be.

And I think a lot of it is also their belief in the culture. So when you believe in the culture, you can start driving the decisions, the leadership, the mission. I think some of it is there, too, for sure.

You caught me revealing a few embarrassing moments in our journey early in this podcast. It's been a few minutes since I've told you an embarrassing moment, so I'll give you one right now. On culture. I was giving a talk at Harvard Business School. We have a few cases that were written about Ghsmart was like an innovator. The recent one was on our culture. But back when this story happened, a student raised her hand and said, you know what? I wouldn't work at GhSmart. And a couple of us were in the front of the room, mortified, like, why not? And the professor said, well, why wouldn't you? And she said, I like, but I don't love the work they do, but they just feel a little bit like they probably haven't taken the time to really even write down what their why is or what their mission is, what the purpose of the firm is, why they existed. And then she looked at me and she's like, did you write it down? Have you written it down? Do you have, like, a credo or some, like, statement of why you exist? And I was like, so mad.

But she was right. We hadn't taken the time to write it down. So we're, like, intuitive. And she was like, oh, don't waste my time. So we went and we walked away from that meeting, and we took 18 months, 18 months of work, gathering input from all levels of our company to create what's today, our credo statement. Johnson and Johnson has one that's really cool. The US Navy Seals has one called the ethos. That's pretty interesting. A good one should really not be generic, but fit the organization it's supposed to reflect. So we created it, and it's great. We then have a giant life size blow up version of it that everybody, when they join the team, they have to sign it. They're signing the declaration of independence, showing that they subscribe to the values and the culture and the credo. And it begins, tell me if this gives you goosebumps. It gives me goosebumps. The first line of the credo is we exist to help leaders amplify their positive impact on the world.

Boom.

And then it gives a bunch of other versions of it. But it's like, yeah, okay, so that's really important. Only about 10% of companies, I think, have done that. Goldman Sachs has a bunch of great companies, did it 100 years ago and still live it today. And they'll tell you, that's how they help. Some guide, how they hire, how they promote people, really, their ways of working come out of something. And having a written document that really tells people why you exist, I think, is a wonderful investment of time.

Wow, that is powerful. I'm literally writing this down now. So you are trying to run or you're running at that point, you're building a company from 10 million to 100 million, which is insane without venture capital in general. And meanwhile, you're writing three books and you speaking on stages, and you're giving all these things for free on your site. How do you do it all?

I really appreciate the question. I give myself a small number of things to do in a year, and then I'm a pretty big delegator, so I'm very, very comfortable doing the homework, doing the work, to select a great teammate, to lead something, and then I kind of don't bug that much. So that's an incredible way to lever your time is if you can bring teams together and then you really give them the space to do their work well, they're going to go do some stuff. And so having that mindset, I think, is one thing. Picking only just a small number of priorities for yourself in a given time period, I think, is the second thing. And that's hard to do. I mean, there's lots of things that you want to spend time on or I want to spend time on the. But to really narrow it into like two or three priorities, it's pretty hard down from twelve or so. So that's the second thing. Weirdly, I have like good work life balance, too, so you were giving me props for getting a bunch of stuff done professionally. On the work life balance front, family stuff doesn't bump.

So I think a lot of people make the mistake of letting work encroach on family time or personal time. I don't, and I don't know where I learned that. My parents were really good about that, about setting boundaries and sticking to them. So I'll give them the credit and a few other leaders throughout time that we've evaluated or coached or worked with, just set boundaries and stuck to them. And it sounds pretty obvious. Okay, well, what's hard about that? Well, what's hard about that is you could make a lot more money actually, if you let your personal life get encroached by your work life. You have to consciously be like, you know what? For as much financial and operating success as this business is having, I know we could have more if I had no personal life, but I choose that personal life. So you have to know that whatever full potential value of your business is, it's got to be lower if you want to have a life, too. And to me, that's an even more sustainable way to build something even greater in the long term. And I think that's a weird mindset to get your head around also.

And then don't say yes to lots of meetings. It's like death by a thousand cuts when people just agree to lots of meetings. I don't. And so remember Randy kicked me out of the management team meetings twelve years ago, so I'm not even allowed in my own meetings. But I think that's another thing, too, where people think that they're working when they just agree to be on a bunch of calls. Don't do that. Be pretty selective about the calls that you do. Schedule and have time. Have real work time. I think I half schedule my day, so half my days I'm doing my own work and the other half of the days I'm on calls. But I think a lot of people go back to back to back to back with the calls and they are fine that then they have to do their work in the evening hours or early morning and that's not so fun either. So it's basically like the boring answer is set your sight slightly lower than what full potential could possibly look like in success. Knowing that it's worth it to be able to run the marathon of a long, impactful career and a happy life, too.

But somewhere in that, taking on a smaller number of priorities and being more comfortable than not delegating and then getting check ins from people, but really letting them run free is a good way to leverage your time. I think some of our best clients, whenever there's a thing to be done, I swear to gosh, their initial reaction is, okay, who can I get to do that? Their initial reaction isn't, oh, I've got yet another thing on my plate. Their thing is, oh, that's worth doing. We call it a who what pairing. Here's a what and where's the who's the who? Bam. That's the work is assigning the who and the what and then agreeing on some plan and some check in cadences, but then they're off to the races as opposed to personally taking on an infinite number of tasks onto your own plate.

Absolutely incredible tips. I think there's another element which in today's world, there's a little bit of impatience, if you will. Everybody wants a success tomorrow. And again, there's also a little bit of. This is a 29 year old overnight success. So consistency is everything and you're somehow. Yeah. Prioritizing the things that will actually move the needle for you and for the company and for your family and chasing your twins of three and a half and.

Yeah, they need chasing. Yeah, exactly. I respect other lifestyle and career choices. I think you've spent time in tech. I totally get friends and clients who are in a very fast paced environment where you. It really is hard to have this, like, super balanced life. But what they do is they run in sprints where they've got, you know, these two years or three years, we are going to sprint super hard and they're either going to have an exit or there's going to be some new phase where then they can take time and reflect and reset. I think that's fine too. I guess the summary point maybe is just something like being pretty deliberate with what you want to see happen and being true to what you want to see happen. So if I was doing a sprint, I would just know, hey, I'm not going to have a lot of time for family for this sprint period. But then I plan on taking a bunch of time off or years off, having a big wonderful time and others do that. I'm more of a steady as we go. I would prefer to make the most of the time on kind of a medium hard schedule that then allows you to do decades and decades of that in a sustainable way.

But I get when other people, people who do military service as you did, people who do government service where there's, oh, you're hired for chief of staff to the White House for two years. Yeah. You're not going to have a whole lot of like Thursday afternoon Pilates classes. Okay? But that's fine. You say like, hey, for this two year period, I'm going to serve my country or I'm going to step up and work 100 hours weeks, like fine. But as long as that's the deal and you're okay with it, your family circle is okay with it, fine. But generally for folks who want to have happy, sustainable careers and family personal lives, I see those folks putting hard boundaries in place and sticking to them.

And I think boundaries are really critical. And I also think that life is in phases, right? Different phases will bring different things. Kind of what you alluded to when sometimes it's more finance, sometimes you need more growth and titles and learning and maybe reputation, fame. Sometimes it's impact, sometimes it's balanced. So you're going to rotate also different phases and you're just going to prioritize differently. So I usually at the end of our episode, we always ask for you to go back in time, Dev. And if you would catch yourself, your younger self, what would you say to them?

Early on I would have gone more international with our firm. Like, I just wasn't picturing global expansion early on, but I think we would have gotten going on international expansion earlier. It's a big world and you can reach the world with modern technology. There's no reason to have geography be as much a limiter. So I think that's one. I might have taken on a capital partner earlier to invest in new products and services that we have a lot of great ideas that are in the drafting stage that I think we've been underinvested in new business, new product expansion to a fault. So I think we did a good job of running a lean and mean business where we added people, we added clients, we grew in a very, in a nice up into the right fashion, but we could have grown with more of a bend in the curve had we put more money at stake around innovation. So I think we went lighter on that. I want to change that. By the way, in this next year, we're considering for our 30 year anniversary, doing a small private raise to put a little bit of liquidity for diversification for some of the aging shareholders, fellow aging shareholders who want to have a partial liquidity event at 30 years.

But more importantly, to put tens of millions on the balance sheet specifically targeted for very specific new product growth ideas and geographic international expansion that we know will be in places that have a high demand characteristics for these types of services. So I think that was first time founder growth person focusing on building a self sustaining, free cash flow growing business. But under investing in. Yeah, I missed every tech, basically every tech wave other than cell phones. I founded the firm in 1995 when these things became accepted business practice. So we were early. We had phones, we could do business anywhere. We didn't have offices. That was like the last time I took full advantage of available technologies. But I do think anytime there's a new big platform, whether it's switched to Internet or switched to mobile or now switched to AI, it just takes a lot of money and time and energy to rapidly experiment and try to create new stuff using the latest and great. I think that whereas we've been more of a plain vanilla grower organically in the previous years, I would say we're going to two to three or even four x our investment in bringing new technologies into our business.

And I feel like that'll be smart. I. So I'd say, yeah, international and tech would have been two bigger areas of focus earlier in my career.

So any last piece of advice? So people are really driven, really trying to figure out what's next for them. Is it entrepreneurship? What is it?

I think it's come through our conversation, but the mindset I'd love to leave your listeners with is to take a who mindset to their own career success and their leadership and management to not just give lip service to, oh, yeah, we should have the best talent. I'll tell you, there's a really inspiring person who authorized me to tell his story. So this is an approved story to tell. I wrote a little article about it in psychology today. I write a column called Work Smart. My name is Jeff Smart. That's why it's called work smart. And this guy Rob grabbed me before I went on stage at an entrepreneur CEO event. And he said, hey, you know what? I just want to tell you, your company and your work really helped me. About ten years ago, he said he heard someone from Ghsmart give a talk on having a who mindset. And at the time, Rob had an ed tech company that was doing course materials and communication tools for teachers and students and parents. And it was very manual, and the thing was stuck. At a $13 million valuation, he said, 13 million? 13 million.

30 million. And he was busy. He was busy. He was focusing on product. He had legal challenges. He had finance stuff. He was, like the CEO, and he was, like, so busy, so busy, but felt stuck because it just wasn't growing. They were turning over people as quickly as they were hiring them. It was not fun. And as he tells the story, he heard someone from our firm just basically make the argument for what if you spent more of your time getting the people part right and less of your time. We call it chasing the what. Chasing the what is like you personally making sure execution is happening and running around doing projects. So solving the who versus chasing the what. So he did that. And long story short, here's what happened. His $13 million business. Once Rob changed his time allocation from maybe 5% on the people side and 95% on the what, he switched it to about 50% of his time was hiring and developing great teams. And his business went from being worth 13 million, past 30 million, past 200 million. And I'm like, all right, you know, I'm about to go on stage.

Like, what did it get to? He's like, our last valuation this year was $5.2 billion. And he said nothing else was different. The market wasn't different. Nothing else is different. Same strategy. All that changed was I went from paying lip service to getting the right people in the company, in the right seats, to actually spending real time, real time, calendar time, like, days set aside. He told me every Wednesday, he sets aside for interviews, for example, like, the guys he knew, he did 295 interviews in the past twelve months. Like, he really went whole hog, as we say in America, on talent. But it really. I've just seen that story so many times by now, and it really is not conventional thinking, but I would just encourage your listeners to try it. And if allocating more time to getting the talent right. You find that you're really able to understand people for who they are. You have more confidence in who you hire. You have more ability to delegate and then spend your time on the things that matter most in your business and in your personal life. It really is a game changer. We've just seen it so many thousands of times by now.

That's the main message I'd love to leave your listeners with. It is doable. It's worth doing to maximize your impact, to for sure grow the value of your organizations and to find you have more time, which is the scarcest commodity of all.

Incredible. And I learned so much. Doctor Jeff Smart. Thank you.

Pleasure to be here. Thank you so much. Sadeena.