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This business coaching episode is about standards and system to use when ranking employees.

Results-Focused Training, Tools, and Workshops from Expert Business Coaches.

Featured Coaching Excerpt - Notes & Transcript, Part 1
  • After ranking each one of your employees, you must tell each of them what their ranking is.
  • Action Step: Write it down! Who is your C-player?
  • 11 Steps for Managing Your Team to Win: 5. Install an employee ranking system.
  • Lesson Nugget: Make sure to tell your employees why you give them a specific ranking so that they can improve. Upwardly mobile employees will LOVE the feedback.
  • "Cruel and Darwinian? Try fair and effective. If there is one of our fundamental principles that really pushes buttons, its differentiation." Jack Welch

[MUSIC PLAYING] netflix for small business management

-Install a yes or no. Check with every person in your bus. Yes or no. Should they be here? And a way that will help is actually this next principle in this small business management training, I think. It's installing an employee ranking system.

-Oh, Billy. Woo! That's exciting.

-Right, so we've got-- this is Jack Welch for our--

-I feel like it's TJ Jakes today.

-Oh yeah-- are notable quotable. And he was actually asked about his differentiating system, and he said-- it was actually-- it was called cruel and Darwinian to him. And he was asked what he thought about that, and he said, cruel and Darwinian? Try fair and effective. That was his response to that. What does he do with this system? -Well, Jack Welch, just so you guys know, he was the world's most successful CEO of all time when he was at GE. Now, certain people will say, well, now since then there's been more effective CEOs, but he's basically-- he took a company in GE that was struggling to just keep up with the economy-- they were struggling to make toasters and appliances, and now GE makes jet engines. These guys produced the "Seinfeld" show. They went from making refrigerators to the Seinfeld show. They created a massive credit company. They created jet engines. If you ever go to a doctor's office and have an MRI done, or maybe you're a woman, and you go to the doctor to have some medical testing done, they're almost all done on GE machines. You to an airport-- airport security, a lot of GE stuff. GE is like the technology leader now.

What he did, though, is he says everyone who works for you is an A, B, or C. OK? So what he does is he thinks you should know. So he says what you do is you take a group of 10 employees, and in that group you are forced to put one of them as a C player. You have to do it.

CALEB TAYLOR: You have to.

-That's the rules. Then you take seven or eight of them. They have to be a B, and one or two have to be an A. So this is the practical action step. If you own a business right now and you have 10 employees, go ahead and write down on the piece of paper who is your C player.

CALEB TAYLOR: Action step right now.

-Who is your C player? And if you share your account with somebody because you're a pirate, then go ahead and just use initials or use food items that somehow will make you help you remember that person's name.

CALEB TAYLOR: Or create a nickname.

-Yeah, create a nickname. Now, who is your B player? And then who is your A player? Now here's where it gets real. Uh-oh. Tell them.

-You have to tell them?


-Tell them you're the C guy?

-Yeah. Oh, yeah. I love it. By the way, I now love this, but I used to hate this. So as we're building the Thrive team, I think there's probably about 40 of us now that are involved in some capacity. The other day I had a talk with the guy. I said, hey-- and it's small enough now where we have these conversations. As it grows, there will be meetings and stuff like this, but tell the guy, hey, I just want you to know you're a C player.

CALEB TAYLOR: You just told him.

-Yeah, he was like do you mean. Well, you show up late. You never get stuff done on time. You're constantly yawning, looking tired. I'm not cursing. You're ask-hole. You ask questions and put a hole in my schedule with endless questions instead of just doing your stuff. Another guy I went to, and I said, hey, you're a B player. We have some stuff-- right now we have an opportunity for you to get promoted to have some more on camera experience, to be able to actually work in front of the camera, but you're not going to get that chance right now because you're not top performer.

-So why is it so scary to let people know where they stand?

-Oh, gosh, because, again, we go back to our home life, and we were thinking, if I tell somebody at home this, I'm going to get slapped. I'm not saying you do this at church. I'm not saying you do this at your community center. You don't want to walk into the nonprofit that you volunteer time for. If you're working in the Peace Corps right now, you don't want to walk up to one of the volunteers and say, hey, Dan, I just feel like you're a C player. Come on. Stop it.

I'm talking about any time you want to be productive you need to do that. But I'm just saying, when you tell people where they stand, if you tell them specifically why they're there and what they can do to get to the next level, people who are upwardly mobile love it. By the way, I love it. I love-- I love when a mentor tells me this is what I can do better.


-But I used to-- when I was an idiot, I used to not want any feedback.


-Because I would justify and tell you why. Well the reason why I'm a C player is because of this, because of the way I was raised.


-Because of the economy.


-Because of-- but now, boom. I love


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Featured Coaching Excerpt - Notes & Transcript, Part 2
  • The Four E's: 2. Energize: The ability to energize others around you.
  • The Four E's: 3. Execute: The ability to get things done.
  • The Four E's: 1. Energy: The energy that you bring to your job.
  • The Four E's: 4. Edge: The ability to speak truth.
  • 11 Steps for Managing Your Team to Win: 6. Engage everyone.
  • "Gallup states that these actively disengaged employees cost the U.S. between $450 billion to $550 billion each year in lost productivity." - Forbes Article, 2013
  • Lesson Nugget: Find the thing that each person is passionate about and use that to engage your employees.
  • Lesson Nugget: You must schedule time to work ON your business in order to have enough time to successfully engage each member of your team.
  • Ask Yourself: Is everybody on my team utilizing their talents and abilities to the fullest potential?

-So you give them specific reasons why they're in the category they're in. Are there specific categories you always bring up, dependability?

-Yeah. Four E's. I'l give them to you. OK. E. Energy. This is the amount of energy you bring to the job. Your personal energy. You come into work like, what's up guys? Or you come in to work like, hey dude. That kind of thing.

Then the other one is energize. Energize. This is your ability to energize those around you. So you come into work, and you're like, what's up, Caleb? What's up, dude? What's up, man? What's up? And I pump up the team. If I can get other people excited, I can energize. If you can energize people, you're awesome, because you can create your own momentum. I walk into the call center sometimes, and there's people in that call center who we've had-- there's one guy who use to work with us named Curtis. Curtis could walk into the call center every day, and he'd be like, I'm never nervous Curtis, and I'm here to bring the energy. Who's with me today? We're going to hit-- he would just get himself pumped, and by like 10 minutes into work, everyone's pumped.

-I love it.

-They're awesome.

-I love it.

-And then there's other people, like, well the boss isn't here yet, so I'm just going to try to maintain library mode. So energy and energized, two different things. Execute. This is your ability to get stuff done. Bottom line, to get stuff done. Cool? And the final one is edge. Do you have the ability to cut like a knife with the truth? Can you tell people where they stand? Can you make those tough decisions? Energy, energize, execute, edge. The four E's. Jack Welch, boom, ABC, differentiator.

-Practical steps, place people in those ABC categories.

-And then give them the E's.

-And give them the E's, and tell them why they're there.

-Boom, that's it. I love it, love it.

-All right. Let's move on there, into the next one, number six, engage everyone. Engage everyone.

-I love it.

-Now we read this stat. I'll read it again though, and that's 70% of U.S. Workers that do not like their job.


-They need some kind of-- something's got to change there.

-Well we have a guy, who's on our team here, who loves the movie, Noah, and so what we want to do is we want to engage this man.


-So just an example, though, if we wanted to have a movie review team at Thrive, I'm probably going to put this guy on the team, because even if I don't even agree with his movie reviews, they're going to be well thought out, very articulated, point by point dissertations. And so, but now also, moving forward, as I look around, I might say well there's someone our team who is really good at the piano.


-And I want to find a way to use his musical talents on the team. There's somebody else who really knows about Michael Jackson, and so I want to figure out how to weave him into the activity. And everybody here has different skill sets. So even like with you, I know that you've got a lot of college experience being on camera. You love working with people. You're passionate about helping people. I want to tap into your skill set. And then somebody else, I want to tap into their skill set. I got to tap into everyone's skill set.

-And that's the manager's job. It's inspiring and motivating them.

-To engage everybody.

-I know there's a recent Gallup Poll that said that disengaged employees costs U.S. Between $450 million to $550 billion each year in lost productivity. That's a ridiculous number.

-Yeah. That's huge. I mean the only thing I could think of that loses that much money would be the USPS. So I tell you what, I mean that's, honestly, that's a huge issue. People insisting on having people who aren't engaged. So look around your next staff meeting, are people excited.

-So, OK, so that's the practica step here? You look around and you try to see who's not excited, and where you can fit them better?

-What you want it is you want to look around your business, and you want to make sure that everybody-- asks yourself the question, is everybody utilizing their talent and potential to the fullest peak?


-So my assistant, Liz, is very creative, great at designing. Any time I have an opportunity to do some kind of set design or some sort of design work, I try to involve her in that, because she does a great job. And then I have another guy who works with me, who loves to writing. Anytime that I have an opportunity to involve something related to writing, I try to involve him. Just make sure you're engaging everyone.

-Why is that difficult? Why is it that most employers don't do that?

-Most employers don't do it, because one, we're not getting to work before 9. Between 4 a.m. and 8 a.m. is when we work

-In, on.

-Where we work on the business. And then from 8 to 5 is when we work in it. And you're not-- if you're in battle, you're not getting a chance to-- if you're in the battle 8 to 5, 9 to 5, you don't have an opportunity to look around, and go, I wonder if Caleb feels like he's engaged?


-Because I'm too busy putting out fires. But if I get there early, I can have that kind of conversation.

-Good, so you can't even attack this issue without being somebody who's working on their business, coming in early to do that.

-True that.


Featured Coaching Excerpt - Notes & Transcript, Part 3
  • 11 Steps for Managing Your Team to Win: 7. Only hire A & B players.
  • "You're only as good as the people you hire." Ray Kroc
  • "A" Players - Get to work early - Get their stuff done - Bring energy to work everyday
  • "B" Players - Never get to work early - Never stays late - Only fulfills the minimum requirements for his or her job
  • "C" Players - Are always late - Are always making excuses - Never get their job done on time
  • Action Step: In case you missed it... Get rid of your C players now!
  • Lesson Nugget: Weeds will spread and infect others around them if they are not swiftly removed.

Looking forSmall Business Management?

-Step number 7, hiring A and B players only, OK? Notable quotable here from Ray Kroc, founder of the McDonald's franchise. He says, you're only as good as the people you hire.

-This is a pretty simple process, but if someone's working for you right now and they're terrible--

-Keep them on?

- --customers think you're terrible. So bottom line, you're only as good as your weakest link, so we have to look around and whoever our weakest link is, that's how people perceive us. So I look around my staff all the time and if I see somebody who's weak-- again, this is not like, I'm not talking about taking these principles home-- but in business, if I see someone who's weak, I literally realize that people think I'm weak. Because the customer's perception is the employee they meet, so I have to look or I have to find a way to either help that person improve, or to get them out of here.

-So how do we identify the A players right away?

-A players, there's three traits that A players do. They get to work early, they always get their stuff done, and they bring in energy to work every day.

-So what's the difference between a B and an A, then?

-A B player never gets to work early, never stays late, only gets their job done.

-But a B player's not showing up late?

-Nope, they just get there right on time. They're funny about it, too. They'll get there, they're like, that's not my job. I did my job, that's not my job. You'll say hey, who wants to drive to Dallas this weekend to get this done? It has to be done. They're like, uh.

Or if there's a cool opportunity, they'll go-- I had one guy I talked to a couple years back. I remember we were so excited, we got a chance to go to Washington DC for an award we won, and this guy says, so do I get paid extra? Do I have to go to the award? If you ask the question, do I have to go to the awards? Probably a B player.

-And the C player--

-C player is basically always late, always excuses, never gets their stuff done on time. Now the problem is, if you're rating your team right now and everyone on your team is a C player, that means you're not hiring the right people and you're not casting a big enough vision. So your business is covered in crap and you're attracting flies.

-And I think you touched on it earlier, but as a business consultant, when you have a business full of C players, you start to look like a--

-You've seen it.

-Yeah, it doesn't look good.

-You've seen it, you've seen the businesses with a bunch C players sitting around. You have to get your C players out of there. You've got to do it. It's serious, man, like a heart attack. Get them out of there.

-And to get those A players, you have to cast the vision.

-Yeah, no one wants to come work for you if they don't have a big vision. C players love working for C companies.

-I've heard it said by multiple mentors over the years that running a business is like having a garden. You've got to just take out the weeds before they spread and infect everything.

-Well, here's the deal. When you have a business-- as you mentioned-- you have weeds that pop up. It's really simple. You just come over here and you neutralize it. You pull it out of the ground, you get rid of the weed. Nothing personal, you just take your little hand-- look at this hideous hand drawing here, whoa. Woo, that's awesome how I did that hand, little thumbnail.

OK, but you just reach down there, you grab the weed, you toss it out of here. Now someone's like, but weeds are people, too. I don't care. Just get them out of there.

-They spread, too. That's why I like that analogy. They spread.

-They'll spread, and it's not like somebody can't choose to be a weed or not. Now here's the thing, if you're candid-- you never fire somebody without telling them about it. You never blindsided anybody. You should never fire somebody without telling them where they stand... Small Business Management.

-They fire themselves.

-That's why you tell somebody, hey, you're a C player. Here is clearly your job responsibilities. Here is what's going on, here's how you can improve, and if you don't by a set time, I'm going to remove you.


-Like a weed.

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