EP 9: Heather Haas - Growing Business Value with the Right People In the Right Positions

Ed Mysogland  1:13  
I'm your host Ed Mysogland. I teach business owners how to identify and remove risks in their business so they can sell at maximum value when they want, how they want and to whom they want. On today's show. I'm excited to welcome Heather Haas of advisor, Heather believes that there's no higher calling than helping leaders grow and improve her passion for fueling others success drove her from her beginnings as a classroom teacher and principal to her role as president of of advisor advisor provides assessments, customized management, training and leadership academies as well as high touch consulting and executive coaching. So Heather, welcome to the show. Thank you. It's a pleasure to be with you. Well, I gave the audience a little bit about you, can you go back and tell us a little bit more about you and advisor? Sure, what people may not know about us, in addition to what you shared, and that you know, we help leaders grow and improve is that we kind of work backwards. So we start by understanding each owner and executive business strategy, we try to understand their goals and aspirations.

Have you ever wondered how to find and keep and develop employees that are going to add value to your organization and make sure that they're not flight risks? Well, this past week, I had the opportunity to visit with Heather Haas. She's a president of advisor and she's been doing work with small and mid sized companies for a long time. And what she does is she provides assessments and workforce analytics, and training and coaching so that the business owner can make sure that they have the right people in the right spot. And those employees are being incented in the right way. So please enjoy my conversation with Heather Haas.

Heather Haas  2:20  
So that we can help owners increase the value of their companies through talent optimization. So that word, those two words, I think maybe are less familiar to some folks. But put simply, the process we use talent optimization is really a four part discipline that helps leaders intentionally design and align their people strategy with their business strategy, so that they can get where they're trying to go. So at the core of talent optimization is really the collection, analysis and application of PII data. So that data is really a game changer for CEOs who are looking to reduce organizational friction, and accelerate profitability in advance of an exit.

Ed Mysogland  3:14  
So tell me a little bit about the process behind the services, I realized that, you know, I have challenges with my with my infrastructure with talent, I've got attrition, I have all kinds of things that, you know, I'm growing, and I just need the right butts in the right seats. So I pick up the phone, I call you now what happens?

Heather Haas  3:38  
Yeah. So talent optimization is always informed by business strategy. So the first thing that I would do is get to know that CEO, that owner founder and try to understand what's your business? What are you trying to accomplish?

See, this is the intentional culture that we need to get where we're trying to go, then they can use the insights about how their people are motivated, and how the behavioral requirements for jobs to improve hiring. So first we diagnose, then we design the culture and the organization. And then we help you hire for job and culture fit. So you can't hire effectively, until you've defined the culture that's important to your future success. And until you've benchmarked the behavioral and cognitive requirements for success in your job. So we bring benchmarking and selection tools to the table, so that leaders can objectively discern bits, and gaps between people and jobs. And this is critical, because 59% in our research that we've done with our clients, 59% of the differential in engagement, ors, across our clients is actually attributable to Job fit. So hiring is a big piece of this. But beyond hiring, once you get people in the door, it's really important that leaders and managers have the skills and the training, to coach and motivate and inspire performance over time. So we diagnose we design, we help you hire for job fit. And then we train your leaders and managers to inspire performance, and keep people engaged. So that whole four step process repeats annually, we review your strategy, we diagnose the employee experience, and leadership alignment with that strategy. We design culture teams and org chart, we hire for fit to those jobs and develop leaders who have the skills and the people data to inspire performance.

Ed Mysogland  6:53  
I got it. So do you do any work with successors and meaning I recently interviewed a fella by the name of Michael Beck and his one of the things that he he does, or he, he thinks, and this doesn't have to be on the podcast, but I'll ask him if you do this kind of work? Sure. They're they, they are in the coaching of successors. So business owner identifies and says, Yeah, this is the guy that that should succeed me and they groom, that they coach that that successor over a couple of years to be that person. Do you do any kind of work like that?

Heather Haas  7:37  
We do that. But before we do that, the most important piece of any successful coaching in a succession situation? Is the objective. Defining of what kind of leadership do we need in the next generation of this company? How will the success of the successor be measured or be determined, we do a lot of work to really clarify that upfront, both for the outgoing owner CEO and for the person who is coming in. So that the coaching and training and yes, we have a group of executive coaches and we also have, you know, for level different levels of leadership development, programming, but those things are far more successful. And you can get people where you want them to be in less time when the future leader has crystal clarity about what do I need to know and be able to do in order to help this organization get where it's trying to go in the next three 510 years? Whatever it may be?

Ed Mysogland  8:46  
What is the I know you said it's on an annual basis that you revisit all the four boxes? How long does it take to once you get the business owner to be crystal clear and where they want it to go? And I know this is a loaded question. Because I know the answer is that it depends but in a generally speaking I mean how long does it take for someone to to get get the business optimal? You know what they you know, what they do?

Heather Haas  9:19  
Yeah, you're right, it does depend on and the biggest variable is on the size of the organization. So you know, small businesses, we can help them clarify where they're headed, get the people strategy, align, and train I mean our process is really data insight action, we collect data we give you an objective picture of where you are on the people side of your business. Then we train you we consult with you we give you the insight you need to make changes and and you know get people in the right seats, etc. And then take action on going to continue to keep the people strategy aligned. So for We're a small company, I mean, we work on a retainer basis with our clients. So generally in the in the first six months that we start working together, we bring a handful of things to bear right away. The first is what we call a strategy assessment. And that's with the leadership team. So they go through an exercise, where as individuals, they're responding to items about the strategic intent of the organization. And so what's produced is a really compelling report that shows you how aligned are those key leaders on where you're headed? And so there's usually some consulting around that. Are we all on the same page? Great. Do we have some disagreements? And how do we kind of get people get all the arrows firing in the same direction? After the strategy assessment kind of close on the heels of that, we administer the predictive index behavioral assessment? And so that helps us see what are the what's the leadership style of the of the leadership team and the larger organization? And how do those behavioral strengths align with the strategy if we have a very enterprising entrepreneurial, break into new markets, kind of growth strategy? Do we have enough risk oriented, entrepreneurial, driven results oriented folks in the right seats to drive that. So then there's that piece of alignment that we tackle, then, is through the continued implementation of the talent optimization platform, we're benchmarking jobs, we're administering the employee experience assessment, where we get a broader view of the organization and how people are feeling about it. And then once we're armed with all that data, that's when we can really customize and prioritize training and development initiatives. So the part that takes the longest add about this is usually the training. Because this journey of optimizing talent isn't just about implementing software and collecting data. The magic happens when you actually get leaders and managers behaving in new ways and coaching their people toward, you know, good ends, and you've got everybody that's clear, and aligned around where they're headed. And they have the tools and the training and the skills to coach people toward getting there.

Ed Mysogland  12:30  
How long does it take to get the buy in? I know, like, especially in small businesses, I know that there's such a, you know, this is the way we've always done it, and do bring in outsiders that, you know, you don't know our business and bringing in this kind of data. You know, you don't you don't know us? I mean, how long does it does it take for you to to win the hearts and minds of the people that you're serving?

Heather Haas  12:58  
Yeah, in some cases, it can take awhile, I mean, occasionally, we we meet up with what we call a people, first CEO or CEO who already comes to the table, recognizing that their people really are their competitive advantage they understand the impact culture have on being able to execute a strategic plan. Oftentimes, though, we are helping business owners identify pain that they didn't know they had. Right? So when you do a root cause analysis on a lot of the pain points in most businesses, you know, turnover or lost productivity, or, you know, we've got, you know, manufacturing challenges or inventory frustrations, when you boil those all down? Well, you often find is most of them are people related. And so, you know, in fact, when we look at our most recent survey of CEOs, presidents chair, people that we do for our annual benchmarking report, 52% of CEOs reported not achieving their strategic goals. And further four out of five say that their bid for the five biggest business challenges or talent related. So once we get in, and we start talking to a CEO, and through asking questions and genuine curiosity about their business, their aspirations, what's going well, what's not, often we're able to start to reveal that we may have some people in the wrong seats, we may have leaders who actually don't have the skills and maturity to bring others along. And we may have some blind spots in terms of how employees feel about working here and how connected they feel to the organization. And so once we start to get a CEO to see that best you have financial data, you have all kinds of data on your manufacturing processes and your marketing spend and et cetera, et cetera, but what kind of data do you You have on your people. And that's usually the point at which they realize, you know, we really don't. And so that's why we start with some kind of initial assessment to actually get the ball rolling, where they can start to see, oh, wow, we do have some gaps here. And then they can start to see if I had more of this kind of information, I could make better decisions. You talked

Ed Mysogland  15:24  
a little bit about the predictive index, what is that? And how does it work?

Heather Haas  15:29  
Yes. So the predictive index is the talent optimization platform that I described at the beginning. So predictive index is a global company that has a network of certified partners like adviser all over the world. So predictive index has been around since the 1950s. Helping companies optimize their talent. So in recent years, their software has grown and evolved, their training has become much more robust. And as the wave of Big Data has washed over, you know, all of us than every aspect of, of business and our personal lives. Predictive index has really created a best in class platform for doing all the things that I described, diagnosing the employee experience, designing an organization in a very intentional way to get where you're trying to go, hiring more effectively and inspiring performance over time. So psi, is a software platform. It's a training curriculum. And it's access to a certified partner like advisor, who works with you long term, to help you implement and do all of this work. It's really important, I think, for your listeners to understand like, there's a lot of great assessments that you can take to learn about a person. Predictive index is really a whole system of assessment, tools, training analytics, to align your people strategy with your business strategy. So that's why it's an annual fee kind of model. And it's a long term

Ed Mysogland  17:12  
approach. Well, and as well as I'm assuming that it's aggregating data throughout the throughout the world, so that you can serve the people that you're working with better?

Heather Haas  17:22  
Absolutely. I think there's probably about 12,000 companies around the world who use predictive index to optimize their talent. So yes, I mean, millions and millions of data points as people are benchmarking jobs and analyzing culture, and you know, making important business decisions. And what's really cool. I mean, our niche and advisor, we're typically working with small to mid sized businesses, we do have some huge, you know, global multinational companies, and some tiny mom and pop shops. But most of our clients are small to midsize businesses they're growing. And we're able to bring really sophisticated world class tools to businesses like this, because the system is priced according to the size of your organization. So like a huge company like Maersk is using the same predictive index talent optimization platform, that a you know, smaller local company like red gold tomatoes, is using same platform, same tools, same great training, the pricing is right sized, based on the size of your organization,

Ed Mysogland  18:33  
and the breadth of services that you provide. Do you ever you guys talk about business value and how it contributes to the increased value of a company?

Heather Haas  18:42  
Yeah, I mean, what's great, as I mentioned at the outset, that, you know, business strategy informs all of this. So we really do start with what are the measurable business goals that you're trying to achieve this year, you know, increased revenue, profit margins, decreased retention, you know, changes in the product mix, because we start there, all of the work that we're doing, to get people in the right seats, and equip leaders with tools and training to manage them effectively. All of that shows up in bottom line metrics. So I mean, generally, you know, what we talked about is, you know, we really do believe that the value of your business is contained in the people who work there. They're very, they're going to unlock, you know, your greatest value for your business because they put their hearts and souls into the work. They're engaged. They're thinking creatively, they're innovating. They're in high trust relationships with their managers so that they can share, you know, ideas and insights, etc. That's usually where the Good to Great happens. And that's why it's really fun when we get to work with owners and leaders who are are trying to optimize value and build a legacy a business that outlives them. Because the people are what make that happen. They're, they're the ones who help you reach those highest returns on investment, the highest multiple, they're also the ones that carry on your legacy of what an owner or founder has built. So yeah, that's how we talk about value, your people are the ones who help you get there. So to invest in them, is by extension to really be increasing the value overall of your company. So a

Ed Mysogland  20:39  
business owner has a couple challenges. One, they're saying, Okay, well, I'm, I'm going to focus on the business and I'm going to work on my operating expenses, I'm going to increase my profitability. And or I can show up at Heather's office, and I can say, I'd, here's my, I know I've got I have people challenges, which comes first, operationally or people,

Heather Haas  21:03  
it is purely a financial decision, sometimes you have to do one before the other. We do work with clients that are not able to make investments in their people until they get things cleaned up operationally, if it's that type of a cash situation, most often, though, it's both. You've got an owner and a leadership team who is working on some operational improvements. And they recognize that the accelerant to these operational improvements that change management and the level of engagement, it's going to be required to actually execute those operational changes in strategic objectives. That isn't going to happen until and unless we have the tools and training to get people moving in the same direction. So generally, that conversation for us is, you know, do you want to look at this short term or long term, because for leaders who are taking the long view, and they have a window of time, that's long enough, because developing leaders and changing culture, that's a journey, that's not a, okay, we'll do a two day training. So that's the first piece that our clients really have to understand that if you're looking to build a high engagement, work, culture and optimize talent over the long term, you're looking at a few years to get there, not a few months, you can make small gains and have pockets of improvement. But yeah, generally, we're saying let's look long term, while you're also doing the short term quick wins.

Ed Mysogland  22:45  
And I know a lot of businesses that we run across have this kind of situation they have an employee that is, is the rock star, but is just a total pain. What do you do in situations like that? Do you remediate them? Or is it? Is it the old thing that there's, you need to get the answer and rebuild?

Heather Haas  23:09  
Yeah, it depends. So we start by really trying to diagnose, is this a skill? Or will issue? You've probably heard that before? I mean, is this if their life depended on it? Could this employee do what you need them to do? The second thing we try to understand is this, this may come as a shocker, but we always ask the leader, has anyone given the employee feedback, that they're a pain? Or that what they're doing is not effective? You would be surprised? How often? Well, not really. So I mean, that's often sometimes the starting line is, let us help you prepare to have a very candid conversation with that employee, about how what they're doing is not measuring up to what you expect. Let's start there. If all that's there, and the CEO says, Look, this person has the talent, they bring a lot of value, I think they can do it. But for some reason they're not. That's when we really a lot of our analytics and tools can be super helpful. We can define the job objectively these are the behavioral expectations for success in this role. For example, perhaps the role requires independent decision making and operating with a sense of urgency. Oh, good to know. So then, we can look at the behavioral results of that employee. And if this is someone who is naturally very laid back, and they are very process oriented, Misato fickle, kind of person, someone who prioritizes first in first out, operating with a sense of urgency might not come naturally, and we can give them that level of clarity, that typically your strength is you put things in order you take good time, etcetera, etcetera. To succeed in this role, though what's required is a sense of urgency. And let's talk about what kind of training or development or coaching, you need to help you make that behavior change. So first was to be clear on what are the behaviors for success, either we help you measure it, or the leader needs to be able to articulate that on their own. And then second, we need to give that employee clarity about where what they're doing, how they're behaving, isn't lining up. And then finally, the last category, occasionally, you have people who are just strategically or culturally not aligned with the business. They're smart enough, they're capable. Businesses change and grow over time. And sometimes you have to have a conversation to say, places really different than when you joined 15 years ago. And I think we should really have an honest conversation about whether or not your heart is still in this and whether or not we're still aligned. And sometimes that's what's at the root of the problem.

Ed Mysogland  26:10  
Yeah, I totally agree with you as well, some of the some of the business owners that we talked to, I mean, they're, they're just held hostage. In the end, they know it, and they can have those difficult conversations. But they're sitting there saying, look, if I lose, if I lose this guy, I don't have enough, I don't have enough time to recover, or the fear is, I don't have enough time to recover or find a good replacement.

Heather Haas  26:33  
That's a really important point. And that's why we work so hard to help our client, it's never too early to start this, you don't want to be hamstrung with a with a an employee who's not bought in as a crummy attitude and holds all your trade secrets. When you're trying to exit the business in three years, too late. You're in some ways, in many cases you are you either cut them loose, and you endure the disruption. And whatever happens as a result of that, and hope you can find someone to replace them, or you sort of limp along with the dead weight. And and that obviously will compromise the value and what you're able to do in the end as you exit the business. That's why we say you got to you got to think about these things well before you're ready to exit so that by the time it gets here, you've got a healthy, capable leadership team in place.

Ed Mysogland  27:30  
Right. And it's silly to not think that the buyer is not going to be evaluating that particular person or people in the practice or in the business. That is that creates not only the revenue, but also the greatest amount of friction within the organization. Yeah, no

Heather Haas  27:48  
doubt. In fact, we do a lot of work in m&a situations where we were actually working with the venture capital folks. They bring us in to evaluate who they're who they're contemplating buying, because many, you know, venture capital firms, they don't want to buy a problem. I mean, that they, they recognize that part of the value, if not the majority of their value is contained in people who work there and those people's ability to keep the company going and grow it in new ways. So more and more, I don't know what you're seeing, but more and more, we're getting brought in not on the seller side. But on the buyer side to help them discern where's the safest and best bet in terms of investing their money?

Ed Mysogland  28:38  
Right? No, you're exactly right. The buyers are looking to come in and add gas not necessarily come in and and have to retool the engine and then add gas, right. Yeah, exactly. So when I know you said it, you know, the earliest as possible to to get this process going. But I mean, how does? Are there certain things that a business owner would see that would say, you know, what I need? I need help. I know it's gonna cost me but I, but I know in order to get this business to the next level, I'm going to have to do something, how do they know that?

Heather Haas  29:16  
Usually, they start to see things like loss of productivity, you know, we have a good product, we have a good process, but it just can't seem to get this group of people, you know, to execute it, or they, they're losing people. They can't keep people in a certain job or in the company overall. I'm struggling with turnover. Or often. CEOs, owners, sometimes they come to us and they're frustrated with you know, they may have an HR team and they have sort of the disparate functions of HR. We have benefits and comp and we have someone who handles Employee Relations and we have someone who do As recruiting, what they're frustrated with is even with all of that, they still can't answer this question each year, do I have the right people in the right seats? To execute this strategic plan that we have? It's still a blind spot for them. So they're looking for ways? How do I get these silos? You know, within HR? How do I get them aligned? And how do I create more transparency and visibility between where the business is heading, and what that means the behaviors we need from people in different roles throughout your organization. The other thing that we often see when we start to work with companies is they say, I'm frustrated that I can't, I can't get this leadership team, I can't get people mobilized, we have a plan, but then it seems like we don't ever really execute it. So there's just kind of a general lack of alignment, or lack of execution discipline, that becomes frustrating over time, because almost every executive, if you were to ask them, and you said, Did you do as well this year? As you could have? Almost always, the answer is no, no, we definitely could have done better, we had things that went wrong. So starting down the road with leadership development, and talent optimization, starts to give CEOs more confidence, and reduce the risk on the people side of the business. Because you can actually say, we have data that tells us how we're doing in terms of job fit, we have data that tells us how we're doing in terms of employee engagement. And we have data that tells us how we're doing in terms of motivating, engaging and coaching people over the long term.

Ed Mysogland  31:57  
Got it, when you look at the landscape of the people that you work with? And the reason I'm bringing up this question is Is do does the avatar of the of the small midsize business owner? Are they younger? Or are they the baby boomers? Because I would think the younger embrace more of the statistical data driven decision making then then then say a baby boomer,

Heather Haas  32:27  
you know, it's interesting, we we do work with a lot of baby boomers. And some of them are a little slower to kind of embrace this, because it's just, you kind of have to help them see, you know, what got you here won't get you there. Because they've been successful, they've gotten their business to a point where they're ready to exit. But surprisingly, we also work with a lot of startups. And so in that startup environment, where you have a younger, you know, millennial, perhaps CEO, they're challenged while they're open. And they're they're much more open to data driven decision making, etc. They're really struggling with developing that next net level of leaders underneath them. Cash is tight, there's a lot of pressure because they're spending other people's money. And so actually developing a genuine healthy work culture, and then being able to recognize as the owner, founder and the genesis for this business, I have to get myself out of the way and get people underneath me trained up and equipped, if we're going to scale this thing, so that often that owner, founder startup mentality, often we have to work and help that leader see, oh, man, I'm my own worst enemy. If I don't get out of the way here, we're not going to be able to scale. So yeah, we work with leaders across all levels. But those are kind of two trends. The Boomers are a little more reticent to this whole data thing and talent optimization and development. In some cases, that's huge generalization. But on the millennial side, it's having the discipline and the maturity, the professional maturity to set your ego aside and realize that you've got to invest in other people.

Ed Mysogland  34:20  
Yeah, we see this, we see the same special on the boomer side, it's more like, you know, prove this to me, and then then I'll get my checkbook out kind of thing. Yeah, yeah. Yep. I want to be sensitive to time. So I have one last question. And that is, if you had one piece of advice to give our listeners that would have the most immediate impact on their business, what would it be?

Heather Haas  34:43  
Yeah, that advice would be become a talent optimizer. It's interesting that you know, a lot of leaders leave their people strategy to chance, or they delegate it to HR or they function they focus on the product or they focus On the sale, all leaders need to add talent optimization to their core competence. Because leaders who can get the best out of themselves, and others relative to their strategic plan will be more fulfilled personally, and better off financially, when they try to exit the business. So, talent optimization cannot be overlooked or under emphasized. It's really, as you said, Ed, it's kind of a fuel in the engine and having leaders who are really good at doing that, in addition to whatever their other core competence is, that is what's going to help owners get the most value out of the business that they've built throughout their career. Yeah.

Ed Mysogland  35:45  
And I guess I should have asked this before the final question. But can you describe the difference between a leader and a manager? Because I think there's, they're they're two entirely different things?

Heather Haas  35:58  
Yeah. I mean, generally speaking, you know, leaders are future focused, there's an element of setting the strategy setting division. You know, managers are more in the middle, they're helping coach and develop people to execute that strategic vision or strategy. Of course, leaders still have to do some of that. But largely, when we're advising our clients on leadership development, we're examining each of those terms, you know, what's different when you move from an individual contributor to a team leader? What different behaviors are required for your success. And then when you move from a team leader, to a, you know, department manager, what's different still, and then when you move, so that and that's why the job assessment element of the pie platform is so critical, because you're able to benchmark objectively, the behavioral and cognitive requirements for success at each of those leadership turns. So that when you have a young high potential employees is tugging on your sleeve, I want to be a manager, I want to be a manager, you can actually sit down and say, That's great. Let me walk you through what that next job looks like, relative to your strength. And then the conversation to magic it ships directly to Okay, well, now that I see what the role requires, and where I have some gaps, how can I, you know, grow my skills. And then it says it's a development conversation, and that's productive. But when we don't have clarity, about what do we need at these different levels in the organization, whether we call them leaders or managers, that's when it becomes difficult to actually give people meaningful coaching and development experiences to get there.

Ed Mysogland  37:54  
Yeah, totally agree. Well, before we leave, so what's the best way though, that the listeners can connect with you?

Heather Haas  38:01  
Yeah, I would love to offer if any of your listeners just shoot me an email directly at H cos h h. A S as in Sam, at advisor, USA, ad V i Sa usa.com and mention this podcast, I'll be happy to give them a free strategy assessment, or job assessment. Either one of those will give your listener a great window into how we use people data, to help us start on that journey of talent optimization. So we'd love to connect with any of your listeners who have an interest.

Ed Mysogland  38:42  
Well, that that's fabulous. And I will put that in the show notes and, and links to everything that you've mentioned, to your website, to LinkedIn, and, you know, everywhere that we can find you. And, and certainly, they'll, they'll mention the podcast and and get that that wonderful, generous gift that you offered. So look, I certainly appreciate your time. It's a it's a fascinating topic. And I know you brought a ton of value to the listener. So I do appreciate your time.

Heather Haas  39:15  
Thank you. It's really a pleasure to have the conversation with you and to get to share some insights with all of your listeners. So thank you so much for the opportunity.

Ed Mysogland  39:24  
You got it. Well, thanks again and cheers.

Heather Haas  39:26  
Okay, cheers. Thanks, Ed. Bye bye.

Unknown Speaker  0:00  
Today 80% of businesses don't sell to be a part of the 20% that do and at maximum value, you'll need a successful strategy. Welcome to the defenders of business value podcast where we interview today's top professional advisors who help business owners create, preserve, and most importantly, transfer value. If you want actionable tips that will increase your business value. Stay tuned. The podcast starts now with your host, Ed Mysogland.

Heather Haas  3:54  
Once that business context is firmly in place, the first step that we take companies through is what we call diagnose. And this is where we actually measure the employee experience. And we also collect data on the behavioral strength of the leadership team, all the employees. And this insight is really powerful because it helps owners understand who they have, relative to what they're trying to accomplish in a given period of time. So once you know that, who do I have? How do they feel about working here, relative to where I'm trying to go? Then step two is called design. And once we're armed with the insight from diagnose, we can help clients design the culture, the leadership teams and the org structure that will best help them execute the strategy. And once owners are confident in the org design, okay, I get it. These are the boxes and this is why and these