Transcript

Bonus: Five secrets to keeping your best employees

The very best founders I know are brilliant at building systems. They connect teams, they remove bottlenecks, and they eliminate single points of failure. And yet When it comes to their own wealth. Most are running a disconnected stack. A tax accountant here and a state attorney there, a wealth manager who doesn't talk to either one of them.

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Hi listeners, it's Reed. You're about to hear a special episode of Masters of Scale. Called Five Secrets. To keeping your best employees. You've probably thought about your team a lot during the pandemic.

From their physical safety to their mental health. To whether your organization can survive. without painful layoffs. Now that the prospect of normalcy is glimmering on the horizon. You may be asking different questions about how to lead your team.

Like When should you ask them to come back to the office? How can you get them reconnected to the mission? And vision of the company. Will things ever return to normal?

And what does that look like now? In this time of reopening. Full of unknown variables. Teams need clear leadership. More than ever. That's why we made this episode using carefully selected stories from masters of scale and rapid response.

So as businesses. And the global economy start to regroup. Let's look at five secrets. To keeping your best employees. You gotta have incredible talent at every position.

There are fires burning when you're going out. Can you believe it? And then you go back to this is totally gonna be amazing. There are so many easy ways. I have no idea what to do. Sorry, we made a mistake. But you have to time it right. Oops, working out of a three bedroom apartment. Ten years later, I'm like, well that's just how you do it. We haven't made it just how you do it. This is masters of scale.

I'm Reed Hoffman. Co-founder of LinkedIn, partner of Greylock. And your host. And this is Five secrets.

to keeping your best employees. Let's jump in with our first action item. Number one. Be utterly.

Even uncomfortably authentic. When it comes to important qualities in a leader, maybe the most elusive of all is authenticity. It's easy to spot. And hard to fake.

But what does it really mean? Is it revealing deeply personal stories? Or maybe it's having a beer with a crew. What kind of sharing is effective? And how much?

Is too much. The answer is both more nuanced. And a little simpler than you might expect. That's what you'll hear in this excerpt from my interview with Angela Erends. She's the former SVP of retail at Apple and the former CEO of Burberry.

Angela knows all about how to unite a team. And it starts with what you might call Purposeful. Authenticity. Let's listen.

I realized that I had to do it my way. and they brought me in to do it my way. I was told very early on we don't do videos. Like excuse me, it's like a YouTube world. No videos.

Period. That's Angela Errants. And she's telling a story from her first months. as Apple's head of retail. It'd been a couple of months and somebody came up to me and said

We think you should send an email out to, you know, all seventy thousand employees, and if you give it to us by Friday, we'll translate it into thirty six le I'm like I like picture my three teens in these stores and they don't read email. And No, that's not gonna work. I said I'm gonna do video. We don't do videos.

I'm going to do a video. We don't do videos. I said I'm going to do a video and I don't want a studio and I don't want hair and makeup. We have a phone. I'm gonna do it like my kids do YouTube videos. It's gonna be three thoughts. In three minutes or less

No editing. Nothing. So Angela recorded her first video memo to Apple employees from her desk. Using an iPhone. I just said

Hi. And sorry I haven't reached out before. But we're gonna do these videos. I'm gonna talk to you once a week, three thoughts in three minutes or less. Because I want you to be aware of what our plan is, where we're going. I want us to connect. I want you to trust me. I just was very open and honest.

As Angela was speaking. Something happened. One minute in my phone rings. I look down and it's it's my baby. It's my my daughter. And I said, Don't stop. I said, Excuse me. I picked it up and I said, Angelina, mommy will call you back and like

Two minutes. Laid it down, and just kept going. And so of course they want to edit it. Apple's gotta be perfect. And I said, Not in this world. It does not have to be perfect. They have to see that I am authenti.

They also have to see that I put my kids first. And the next day I must have gotten Five hundred emails. people thanking me for taking my daughter's call. Angela taking a quick phone call from her daughter.

That set the stage for what you really Wanted to communicate. I'm not a king or a queen or a dictator. I'm here to do my life's greatest work. Will you help me? Can we do it together? Angela knew she needed to connect with every employee. And every Apple store.

So she found a way That was personal. Genuine. And emotionally present. Your version may look different.

Like opening up about your favorite movie or a hobby. Or even sharing a personal hope or a fear. You don't need to surrender privacy to lead effectively. In fact. removing all personal boundaries isn't usually a healthy way to lead.

But you do need to actively connect in a way that's meaningful to you and your team. Authentic leadership is a powerful tool and is exactly what a team needs in this moment of transition. During the pandemic, leaders across nearly every industry saw how strongly employees respond to truth and transparency. That's a lesson we can't afford to forget. Especially now you'll be asking your teams to do things like come back to work in person or work in new ways. So be purposeful in recognizing when and how you can be revealing and vulnerable.

When you lead with authenticity, you inspire your team. To come along. Number two. Sho your team trust.

By giving them space. Trust. Is a word we hear a lot. in uncertain times. Customers want to be able to trust the products they buy.

Businesses. Fight to ensure that there's is the trusted brand. Behind the scenes, trust is just as important. Organizations falter if managers can't trust the teams they lead or vice versa.

But saying you trust your team. And showing it. Are two different things, as you'll hear in this clip with psychologist and author Adam Grant. He spoke with Bob Safian on masters scale. Рапід респонс ангаф сам сіос.

Letting go is hard to do. Early two thousand eighteen, I went to a bunch of the most powerful CEOs in Silicon Valley. I said, I'm interested in running a remote Friday experiment. As a researcher and professor at the Wharton School, Adam conducts these types of experiments to explore how to improve business practices. I said, I'm curious about whether letting people work from anywhere one day a week could increase productivity and creativity without hurting culture and collaboration.

They all said no thanks. I was pretty surprised by this, so I asked them why and they said things like well I don't wanna open Pandora's box because once we let people leave, they might never come back. And I'm afraid that productivity is gonna falter and our culture's gonna fall apart and people won't work together. In retrospect, that seems like a pretty pessimistic view of team culture. But in two thousand eighteen, the Pandora's box view.

Leaders worried that a distributed workforce would mean the death of culture. And productivity. Needless to say, those attitudes have changed. After a pandemic imposed remote work proved so effective.

Hilariously at least of these CEOs have announced that their firms might never return to an office. They were so resistant to rethinking this simple idea of just letting people work remotely one day a week, and now that they were forced to rethink it. They've decided maybe we should work remotely all the time. With hindsight. It's easy to see how wrong those COs had been.

Their resistance to change was based on how they feared employees would respond to even a taste. They made an assumption. And assume the worst. Right now, your team deserves the benefit of the doubt.

After a time of intense pressure. And uncertainty. We've seen teams around the world Rise to the occasion. What they need now is for you to repay that.

And trust. That's not Blind trust. You can and should still evaluate performance and outcomes. But be sure you're evaluating off actual data.

Not what you think. Or fear. Will happen. Trust in teams is something Dara Kostroshahi, C of Uber, takes seriously. And he can point to a moment he discovered he needed more of it.

I spoke with Dara about how great leaders help companies transition from scrappy pirates to a formidable navy. Beware. Nautical metaphors ahead. In two thousand and five, Dara became the new CO of the travel website Expedia. And he had to hit the ground running.

I was working harder than I ever had. I was in every single meeting. I was working day and night. I was making decision after decision after decision. I thought I was doing a great job. I had no idea. Dar had only been in his job for a month.

When an employee came to him with an insight. He wasn't expecting. I had an eye opening moment. When a young Product manager.

Jen Pierce, I still remember her, came to me just to shoot the breeze in my office. She came and said, You know, dar you keep telling us what to do. Instead of telling us where to go. And We like you so if you

Tell us where to go. We'll figure out our way there. But if all you do is tell us what to do, then whenever you're not in a meeting Nothing happens. So can you just tell us where to go and then let us

Get there? In this one conversation. Jen transformed Dara's trajectory. As a manager.

Boom. Eye popping. I had to really work very, very hard because I was a bit of a control freak. Two Let go of

what people are doing. And really start talking about where we're going and trust my team. To get us there. Star had just learned an early lesson in running a navy. From the outside, it might appear to you that you command a fleet of ships by telling each one exactly what to do.

But that's not how the chain of command works. The Admiral doesn't tell each submarine commander the precise depth to dive to. The Admiral gives broad direction. And trust. That their officers know what to do.

This combination of strong local leadership. And a strong centralized chain of command. is what defines the most successful navies and distinguishes them. From the pirates. What Dara learned and what Adam Grant's study effort revealed is that building trust isn't ultimately a matter of words.

But actions. Especially in times of transition, the best leaders give their teams leeway. That doesn't mean avoiding your responsibility as a decision maker. Teams can still make wrong moves or choices that are insufficiently bold in times of change.

That's where leaders. Can be truly additive. Making hard calls and encouraging big swings. But throughout this process, it's essential to treat employees like peers and colleagues. Whether it's giving them space to work out product solutions or setting up dialogue with them to seek their feedback.

Or even just trusting them with remote flexibility. The move required by leaders now is to resist micromanaging. Instead, prove your trust by giving leeway and independence. Number three.

Throw a party. Every organization has its own approach to cultivating joy. Some go with a generic birthday cake. Served at four PM in the conference room. Others opt for the wild conference in Vegas with skydiving outings and a midnight magic show.

Whatever you're doing. It's time to do more. Right now. On a human level. Celebrations can help us make a clean mental break from a period of stress and heartbreak.

And after twenty twenty, we certainly can use a break. But at an organizational level, they also help commemorate goals met. And achievements unlocked. In that way, celebrations fuel optimism, creativity. And execution.

That's how Melanie Perkins, co-founder and CO of Canva Approaches team festivities. As you'll hear in my conversation with her from late twenty twenty, she takes the art of jubilation seriously. Every three months we do something called a season opener. We get the entire company together for the entire day and we get each of the groups we're talking about, their big goals that they're driving towards. They often just show you off future mocks, future designs, and really paint the picture of where they're going. I talked to other guests before about the value of frequent celebrations to strengthen teams.

But I found these quarterly session openers really interesting. One of our values is to set crazy big goals and make them happen. And then when they happen, we have a hilarious celebration. So when we launched our paid product for the first time, we released doves, like literal doves. It was hilarious. When we launched in Spanish, which was the first international market that we launched in, we had a little La Tomatina festival where everyone threw tomatoes. Like most other social activities, these season openers had to adjust. to Covid times.

It used to be in person in each of our offices, but now we do it online and we send everyone a box. There's always very clear labels on the outside that says do not open. And so everyone has these boxes that they're not allowed to open. They're sitting in their home and everyone's always like, What's in the box? And then the season opening comes and we have this moment where the whole company unboxes their box. And then there's often envelopes inside or secret clues. And then throughout the presentation we'll you know have an announcement be like So we just hit this really exciting milestone. And then milestone is open envelope number one. And then people open the envelope, which is a bit of fun. And then we'll have some treats in there for people to eat throughout the day. Last time we had an origami challenge, so the whole company was doing an origami challenge and posting it on Slack. It's just like little fun things that help bring the company together. And I think that that element of physicality is quite wonderful because you know, as everyone's feeling distant, you don't want to just feel like another Zoom call.

This may sound like gamification and the employee experience, but I actually think it's a bit different. Because you don't really want to gamify in an obvious way. It can make the employee Mistrust your intentions. Or even alienate them.

Instead. You wanna do things that make them feel like they are included inside the tent. versus being acted upon. Incentifying progress with celebrations is fine. Tomato throwing.

and origami folding and all. As long as the incentives make the employee feel like a more integrated part of the team. I think that trying to create that shape and create that, you know, little moment of pride for people is a lot of fun and really critical, I think. Melanie's right. Cultivating team pride isn't just fun.

It's critical. And that's actually the most important thing to remember. You'd be hard pressed to find a CO. Anti joy.

But too often Celebration slips down the priority list. Or It gets approached haphazardly. You don't have to blow through your budget to mark team wins.

In fact Even a simple post mortem has value. Post hoc assessments aren't just for when projects go bad. They're also for when they go excellently. And you want to take stock of what worked.

Your move now is to create opportunities for joy within your team. Whether it's something structured like Canvas, season openers. Or a surprise pizza day at the end of a long week. Seizing chances will make the entire organization stronger. When you build substantial wealth through your business, it's often tied up in a single equity position.

The upside is real, but so is the risk, and knowing when to act isn't always obvious. Creative planning works with business owners to build a strategy around concentrated equity. When to diversify, how to manage tax risk, and how to protect what you've spent years. Building. Creative planning where wealth works together.

Learn more at creative plating dot com slash masters of scale. Hey listeners, Bob here. If you listen to Rapid Response on Masters of Scale, you may be missing half the show. Because every Friday we release a second rapid response exclusively in the Rapid Response feed. The guests and topics are just as compelling and timely from Ford's CEO to NASA's administrator to the lessons from The Devil Wears Prada. It takes about 10 seconds to find, just search rapid response wherever you listen to podcasts and hit follow to make sure you never miss an episode. I hope to see you there.

Humans will never be more intelligent than AI. There's gonna be two types of companies. Those who are great at AI and those that went out of business because they weren't. How do we build a future? That is human centered. I'm Rana Al Kalyubi. And on my podcast Pioneers of AI, we answer that question and so many more. As an AI scientist, entrepreneur, and investor, I know what it takes to build AI that works for everyone.

Every week, I sit down with the pioneers shaping our future. And we take you behind the scenes of the AI that's transforming our lives. Find pioneers of AI wherever you tune in. We're back. with Five Sікретs To keeping your best employees.

We've come to number four. Invest in your team's wellness. In a real way. For many, the pandemic didn't cause new problems as much as it revealed old ones.

From broken public health systems to systematic racism and inequality. Organizations of all sizes and sectors were called on to do more. For many teams, the imperative of the moment meant a complete breakdown of work life balance. That balance Is in grave need of restoration now.

Maybe no one is more qualified to talk about this than Claire Babinot Fontenaux. She's the CEO of Feeding America. A nonprofit network of food banks that provides food to millions of people across the US. She spoke. Wob Safian on Rapid Response earlier this year. Going into march of last year.

The USDA publishes Fo insecurity rates for the country. And their projections were that about thirty five million people were food insecure. That's thirty five million too many. Бо да репрезен прогрес.

Because in the last Economic downturn or last great recession of two thousand and eight. We saw those numbers go to nearly fifty million. And it took ten years to get back to pre recession rates. So here we are in March.

We're finally at pre recession rates. We're making progress. And then Covid. In the earliest days of the pandemic, the number in need ballooned again.

Meanwhile Feeding America saw a perfect storm. Their main source of food donations. Grocery stores were suddenly empty of supplies. Their volunteer corps, many of whom were over sixty five.

needed to stay home to protect their health. It was an all hands on deck moment. For Claire and her team. And that led. To a classic.

Leadership error. And one of the mistakes that I made Actually Is That my impulse was

As long as there are people who are struggling out there, I need to be working. So I blurred those lines of work. And Life. There was no balance.

I looked back and I realized that there were people on my team. who were doing the same thing. They weren't taking off. They were working on Saturdays and Sundays. And they had worked for

I mean Two months. Without taking one day off. And I realised That

I was providing a very, very powerful and negative example for the members of my team. There was one clear moment when Claire saw the pressure come to a head. I woke up in the morning And at seven AM I've had a call with some members of my team. And I noticed I was awfully snarky.

And I'm thinking What did they say? To make me so snorky. They don't deserve that. The way that my stress was showing up.

was I was becoming increasingly less patient. Increasingly less tolerant. And I thought, Oh, I'm not being helpful. So that's the day that I said, Okay. Nomas. I am gonna take some time off.

And I did. And now I actually for my own emotional health and well being. And for my viability as a leader. In this space. I now have on my calendar.

that I will take R and R, what I've tried to do is do it out loud. Claire decided to lead by example. Not just on how hard she could work. But in prioritizing time off. Your team needs you to lead by example too.

Work life balance isn't just a pandemic necessity. It's essential. For sustainable growth. As we approach what in many industries will feel like a full reset.

Team wellness Must be part of the equation. Another rapid response guest. who spent twenty twenty and twenty twenty one Thinking about how do we increase employee wellness is Ed Bastian.

As CO of Delta, it is deeply invested. In a speedy post Covid recovery. But recovery means more than the bounce back of the airline industry. It also means the physical, mental, and financial recovery of Delta employees. Many of whom come from communities.

Hard hit by the pandemic. Listen to what he's learned. I think the pandemic has taught us a lot about wellness, about resilience. about our health and things we took for granted. We've introduced a lot more wellness and mental health resources, which I know are getting subscribed to and utilized actively.

We hired just recently a chief health officer for the first time. Doctor Henry Ting from the Mail Clinic. stages of the pandemic, he came To ensure

Our people are well in all aspects, physically, emotionally. Financially even. So the pandemic has given us license to talk about things we never would have talked about as openly. And investing in people in ways that we haven't maybe thought to invest in and you know, people don't talk about mental wellness because of stigmas. It's been okay for people to open up a little bit more.

We don't talk about financial hardship cases because people are embarrassed or You know, we feel we pay our employees it's their responsibility to take care of their money, not ours, but you know, we're giving them a lot more tools and coaching as to how to get their credit scores improved and how to feel more secure in life. These are all things that are gonna keep with us on the other side of the pandemic. that I think are gonna be really important to our team. And to the health of our company. Many companies are only starting to grasp that employee wellness programs aren't merely perks.

Their investments. Because businesses do better when their team members are healthy. Happy. And financially stable. You can't ask people to devote themselves to your company's mission if their own ability to thrive isn't part of it.

Prioritizing employee wellness can manifest in so many different ways. But whatever you're doing to support your team, it's important that it be made Tangible. Telling them. We appreciate you.

Is one thing. Showing them. is much better. Number five.

Invest today. In tomorrow's team leaders. During the pandemic, many businesses went into survival mode. Going through painful rounds of furloughs and layoffs. These layoffs.

tend to land mostly on a team's newest members. But it's exactly these members that can be incredibly effective bearers of culture and agents of scale. One of my personal favorite conversations from master to scale was the one that I had with President Barack Obama. As the forty fourth commander in chief of the United States, President Obama knows a thing or two about scaling teams. But it was during his historic two thousand and eight campaign for office.

That one particular lesson fell into place. Listen to how he and his campaign manager strategized. around their newest volunteers. David Plough. our campaign manager turned out to be a savant when it came to organizing.

He was experienced, but he was still pretty darn young. and had never actually managed a campaign and he just turned out to be Terrific. The guy sweated the details and was smart. And disciplined.

He understood that for us to be successful. We had to empower people at the lowest levels. the organizer in some county. In Iowa. They had to feel as if they could make decisions on the ground and

be able to be nimble and respond to events quickly. This distributed empowerment of teams helped the campaign grow exponentially. We ended up having a horizontal sort of structure. Put a lot of money into our organizers on the ground. Cap

salaries and bloated expense accounts and all that stuff. David J said, look. This is how much I'm making. This is how much senior folks are making. Everybody's gonna be making half of what you can get paid another campaign. If you want to work in another campaign, go ahead. But it's because we wanna use this money to hire more twenty three year and twenty five year old kids who are gonna be running around Iowa busting their butt trying to get folks to turn out for Barack.

This is such an entrepreneurial approach to campaigning that I had to take a moment after the interview to talk it over with my producers. The precise reason why culture is a theme. that we come back to again and again within Masters of Scale is because When you're scaling If you don't have the horizontal culture.

Your culture will not scale, and then that will become a competitive disadvantage. Because it's very hard and takes a lot of energy. to refactor culture. And that's part of the reason why everyone tends to be get culture right from the beginning. And scaling is scaling lots of people. Like what happens when you're hiring a hundred people a week? Right. Well, the CO can't be infusing the culture in all of those people. They just like they got other things they're gonna be doing. And so that's why you need to have the culture, lots of people within the organization, and a general network of reinforcement of the culture within the organization.

When you're trying to make a deadline. Meet a moment. Or time a launch. Empowering your ground team is how you grow quickly and with integrity. You've had this esprit de corps that develops.

Young people feeling invested'cause they're empowered they're not just going around getting coffee for people, but they're actually are frontline workers and have decision making power and authority. And we're respecting them. That's really what ended up winning it for us. Over a dozen years and one pandemic later, this is still essential advice.

As companies ramp up post covid hiring. It's critical to build in a mechanism for scaling culture. Starting at the entry level. Hand your future star players the baton. They'll run with it.

Another guest. Who understands the value of investing in emerging talent is Rachel Carlson. She's the co-founder and CEO of Guild Education. A digital platform that enables frontline workers to get degrees and certifications as a free employee benefit. Rachel's been watching the war for talent heat up.

And see training programs and upskilling as essential to winning that fight. She talked to us about it on Rapid Response earlier this year. So employers serve as Guild's distribution channel. They help connect their employees with the upskilling opportunities, but then they also pay. They pick up the bill for their employees to go back to school. And that's because they see a real positive ROI in doing so. That positive ROI Shows up in a number of ways.

like a more skilled workforce and the ability to promote from within. As we transition out of the Covid age. Demand for labor is sky high. And offering a free education is a great way to attract and retain new talent. And upskilling is also a critical tool for companies that fulfill promises made during twenty twenty summer.

We used to have a pretty hard time getting employers to talk about upskilling as a tool for mobility for underrepresented minorities, whether that's by race or by gender. After George Floyd's murder and the conversations around Black Lives Matter this summer, and a lot of companies suddenly budgeting their diversity teams, we've had a tremendous amount of work with those teams saying, Okay, how do you actually invest in your Black talent, in your Latin X talent, in other populations that are underrepresented? Yeah. And the answer in many cases is actually doing really specific upskilling strategies because those populations are often the same who haven't been given the opportunity to have the, you know, elite four year college experience at age 18. And so we found with one of our partners that their black employees who are using a learning and upskilling program are being promoted.

at 2x the rate of black employees who aren't using a learning and upskilling program. And in that there's two things you're helping black talent highlight to their company, I'm investing in myself. Take a risk on me. And then two, you're helping that black talent say, I'm also learning skills that are relevant. So there's unconscious bias being unpacked there. There's skills development. There's rectifying for lack of community investment that should have been offering those skills. Whether you focus on upskilling or other inclusive efforts, You should be taking steps now to integrate and optimize all levels of your organization. It will help you build your bench of talent and empower them to assume leadership roles more quickly.

Mm. We hope this special episode has given you some practical advice on supporting your teams in this peculiar moment. Yes, this moment. Right now. Right now you can record an unvarnished personal message like Angela Ernest.

Or like the CEOs Adam Grant spoke with, you can make a decision to trust your teams. Even if they're not always on premises, within arm's reach. You can decide, like Dark Kosrahi, that from now on You'll focus not on telling your team members what to do, but on showing them where you're all going. You can lead by example.

Like Claire Babinau Fontenau. and choose mental health over burnout. Or like Ed Bastian at Delta. Double down on investing in employees' well being. Just like President Obama, you can structure your growth strategy around empowering and democratizing team members.

Even those who don't have much seniority. Or take a page from Rachel Carlson. And invest in upskilling to unleash new talent and new opportunities. Remember when you told your team We're all in this together.

It's up to you to make sure that's more than happy talk. Because actually you're not trying to get your team Back to normal. What they deserve now. is to move forward.

I'm Reed Hoffman. Thank you for listening. Masters of Scale is a Wake What original. Our executive producers are June Cohen and Darren Triff. Our senior producer, Jordan McLeod. Our supervising producer is Jabe Kunjabi. Our producers are Adam Skuse, Catherine Clark Gray, Hiley Bondi, Marie McCoy Thompson, and Christina Gonzalez. Our editor at large is Bob Safia. Our music director is Ryan Holliday. Original Music and Sound Design by Eduardo Rivera. Audio Editing by Keith J. Nelson, Steven Davies, Andrew Naught, and Mike Gallagher.

Mixing and Mastering by Brian Pugh. Special thanks to Chris Yay, Elisa Schreiber, David Sanford, Saida Sapieva, Greg Biato. Adam Heiner Emily McManus. Kelsey Capitano.

Tim Cronin Anna Pazano, Ben Richardson, Mina Kurosawa, Sarah Tarter, Charlie Menessis, Janeme Ezequena, and Colin Howard. Become a member of Masters of Scale to get access to a year's worth of courses and content on the Masters of Scale courses app. Find out more at masterscale.com slash membership.