As I've said in the opening, the surprising finding was a large number of these management teams and growing businesses are disfunctional. Well, it's a little bit like I do, I do some work, or quite a lot of work with family businesses, multi-generational family businesses. And I was, in fact, meeting with a, a founder of a very large company last night, and talking about it. And I said, every family business is dysfunctional. It's just a matter of degree. Well, management teams are not perfect. They're all dysfunctional. It's a matter of degree. And you can get large, big, dysfunctional, okay, results, when the people view each other as competition. When you got political games going on, right? When people are not open and honest, when they don't collaborate and share, when basically management teams look at different members as a race. You and I are in a race to see who makes the most money, or who gets the most gold stars, or who gets to the next position. No, no, and isn't this a great picture? Two beautiful children, isn't that nice? Playing so nicely in the Sandbox, that's what you gotta have. You gotta get people that play well together, and it's not going to happen unless you the leader. Set the ground rules about how to have open, honest, constructive conversations. And why do you need that? Because you need everybody aligned, role-modeling the right behaviors to the people that report to them. Aligned and being able to adapt and move in an entrepreneurial business to change the focus on a daily basis. Okay, and as we're going to learn from Mike Cody, you need everybody taking ownership of what their responsible for. And making sure they are accountable to their fellow teammates. High accountability, mutual accountability, it is a team sport. It is not a sport of stars. And why is it hard to do this? Well, it comes down to just personal dynamics, okay? If you have two people on your management team, how many potential interactions do you have? One? Two? If you have three people, if you go from two people to three people, how many interactions? Well, this person can interact here, this person can interact here. This person can interact here, this person can interact here. This person can interact here, this person can interact here, right? Look at all the interactions. And as you grow, the nodes, the number of nodes. You get 3 people, 4 people, 5 people on the management team. Each person can talk individually. Each person can be playing their own political games. Can be saying different things to people. I mean it's amazing how messy it can get. And unfortunately you don't have time for that. Your customers will lose. Your employees will lose. You will lose. And your management team will lose. Face the reality. People are scared to be honest with each other. They don't want to show weakness. They don't want, they don't want to be penalized. They don't want you to think they're not good. There is personal competition in politics, always. Human nature, okay, how do you limit it? And yes, how you pay people can either increase or mitigate the interpersonal problems. Are your people paid bonuses on their performance at the senior management level, or the whole teams performance. Or is a joint part individual, part team, what percentage? Because how you pay people, if you want your senior management team to operate as a team, a significant amount of their bonus has got to be dependent on the company performance. So that if something goes wrong and I ask Jim's help, it's in Jim's economic interest to help me. He doesn't say, I'm too busy, I've gotta make my numbers, I gotta do my stuff, otherwise I'm not going to get my individual bonus. So we're back to this alignment, team, culture, compensation. Do I reward cooperation? Do I reward collaboration? Do I financially incentivize team play? Do I financially incentivize? I gotta go back I love this slide. I'm sorry, do I incentivize people to play well in the Sandbox. Think about that slide. Indelibly imprint that. In fact, if Matt who works here in Darden Media, if he was here with his phone he'd do an Instagram of that slide. It's so cool, because it says so much about what we're trying to do. Put together a team that plays well together in the Sandbox. The need to upgrade, one of the most difficult things about success. Success outgrows people. I'm sorry. I mean, this is hard. Think about it. Think about it. I was employee number 3 in your company. I was employee number 3, and we've done well. I've worked hard, you paid me fairly, but I've helped you build a business. Now you've grown and now, you're coming to tell me that, Ed. I need you to get a higher level of skills, and I'm not sure you can do it. In fact, I know you can't do it because I need somebody at a higher level. And I'm going to have to make somebody else the manger and you have to report to him. How do you think I feel? I just gave you 3 years of my life. I helped you get to where you are. Now, you're saying to me I gotta basically put you on the sidelines. Now, I got two, three people that work for me. How do you think they're going to feel about how you're treating me? Yes, this issue of upscaling and the conflict between upscaling and loyalty. The conflict of the impact that loyalty and disloyalty has on the whole employee base morale is a major management challenge. So upscaling, there's 2 or 3 things you gotta think about. When do I have to do it? Who and what are the type of people I need? And three, what process am I going to use to find different seats for the people who have been loyal to me. And sometimes, okay, sometimes, you saw it in the Michael Cody case. Sometimes you find that people can go to another seat on the bus. Fact, sometimes they're relieved. Sometimes they can't. And sometimes they're going to have to take the next bus. And it's not something you do once. The need to upgrade never ends. And if it does end, you then have to think about whether I can consistently Outrun the bear. And if you took part 1, you know what I'm talking about. If you didn't take part 1, that's sort of the story we talk about, about how, in business, you have to outrun the competition. You have to constantly improve your customer value propostion better than the competition. Now, this has been, think about it. Think about this, this, this class. Is it as upbeat as the high-performance organization class and the high employee engagement class, which was all about this and this? No, this is now getting into some of the difficult people issues that you can't run from, that are not easy. And people don't like to have difficult conversations. These conflicts between loyalty to people and needed capabilities. How upgrading stresses a family environment. Everyone gets nervous. Am I next? Am I next? And as I said, it's hard to, for many to adjust to a different seat on the bus. And you, as a leader, as an entrepreneur. Have to learn how to do this. Have to learn how to this, how to, learn how to do this in order to make your business better but not to destroy your culture, destroy the trust. Destroy the high employee engagement that you have built. Can it be done? Absolutely, can it be done if you don't think about it? It's harder, can it be done if you don't have processes? It's harder, is it easy to mess up and make mistakes? Yes, warning. Warning, okay? Warning sign, early warning sign, upgrading. I got to focus just as much time on, what do I do with the people that are being upgraded, as I do on finding the new people, okay? That's a key lesson of this week. Key lesson of this week. All right. Quiz number two. Let's go do a little test here. Little test. Go to it.
