Chapter 1

1. Mindset Shift

Since first starting Stewardship in 2007, only a handful of employees have ever left the company.

Mike was the first employee who left—but it was entirely my fault. He has a heart of gold and is one of the most trustworthy people on the face of the planet. I told you a little about him in the introduction. I managed him the way the classic management books told me to. You know the ones I’m talking about—the techniques that say we’re supposed to create goals that are just out of our employees’ reach. They work their hardest to achieve those goals, always getting close but never quite hitting the moving target despite most likely accomplishing more than they otherwise would have. The advice in these management books believes that in order to get the most out of employees, you have to squeeze it out of them.

I followed these tactics to the letter, which led to killing Mike’s confidence. There was no affirmation and zero real purpose behind those goals. I failed miserably as a leader and as a manager.

Unsurprisingly, that did not work well for him. Not only did he not produce well, but he was also unbelievably discouraged—almost on the verge of tears at one point. I actually did shed tears because I was making this human being’s life worse.

Mike came to me and told me he couldn’t do it anymore. He hated his job, and he wanted to go find something he could be good at.

So he returned to his former job at a local university—the job he’d held before coming to work for me. As far as affirmation is concerned, this was a better job for Mike. He felt like he was way better at that than he was at mortgages.

But the one thing I had done right when he worked for me is I gave him freedom. There was no clocking in or out. I didn’t completely understand the importance of autonomy to the level we have now, but he had a lot of freedom to come and go.

At this new job, he felt like he was working for “the man,” clocking in, clocking out, with no meaning or importance to the work he was doing. Mike went to work because he had to.

Because he appreciated the freedom I had given him, Mike came to me and asked for his job back. I said all right, of course—he’s a hard worker and an amazing person. But I recognized that we’d had an issue before and decided that I was not going to ruin the affirmation piece this time.

We stopped having the traditional employee performance reviews with those impossible stretch goals. Instead, I did a new thing called an employer review, where he reviewed me. Rather than destroying his confidence with goals I knew he wasn’t going to hit, I asked questions to express my genuine care for him. I learned about his needs as an employee and acted on them as his leader.

As a result, Mike started doing better. He had more confidence, he produced really well, and he was thriving.

But because I didn’t connect everything Mike was doing with a purpose, he still felt as if his job didn’t have meaning. That’s two jobs in a row where he was just working because he had to, not doing work that made the world a better place. Mike is a dream employee. He’s extremely intelligent, very trustworthy, and a high performer. But because I didn’t have a great purpose in my business, and I couldn’t put the things he did to that purpose, he was open to other opportunities.

So what did he do? He and his wife went to Thailand as missionaries fighting the sex trafficking trade. I mean, just the description of that job makes it clear he was making the world a better place.

Viewed objectively, the new job could be considered worse in almost every way. It paid much less and required Mike and his family to move to a different country. At the time he left, Mike was doing very well, producing at high levels and making a good living for his family. Yet he left to find purpose.

When Mike left that second time, I ended up sleeping at the office and trying to do all the work myself. By then, I had come to depend on his amazingly high level of production. He had done well handling an important subsection of my business. His exit meant that I had to pick up the slack, and my business started to feel like a burden instead of a blessing. That’s when I knew I had to change.

Part of that change involved evaluating why such a talented employee would want to leave. Why did he seek a job that paid significantly less, involved much more difficult work, and required uprooting and transplanting his entire family? Why didn’t he see the same purpose in my business that I did? Because it was still in my head. I hadn’t formally created a purpose, defined it, and woven it into my business.

So I sat down and figured out our unified purpose, using the same process I’ll teach you to create yours. I used it to hire amazing new talent and create a growing, thriving company culture. And then I unified our entire team around that purpose.

When Mike came back from Thailand four years later, I had completely changed how we do things at Stewardship. Our internal culture was so different and so much better. We had a clear purpose, the entire team was on board with that purpose, and Stewardship had become one of the most attractive places to work in my community.

I had a list of more than one hundred qualified people who expressed a desire to be a part of my team—and Mike was one of them. I happily asked him to come back to work for me, and now he runs one of the most profitable divisions of my company. He does work that matters, his life has more meaning through his employment, and he feels the impact that he makes on the community.

It’s Time to Make a Shift

If every small business owner were to list the worst qualities of the worst employees they’ve ever had, I guarantee that all of them would have selfishness in common.

Managers who use money to motivate their teams contribute to creating a selfish culture, one in which employees don’t perform well. They look at the clock instead of seeing how they can better serve customers. They use the business simply as a means to get a paycheck, rather than becoming part of a team that works hard to make an impact on people.

Business owners with a money-motivating mindset don’t have self-directed employees who consistently take initiative and do whatever is necessary to innovate and create an awesome experience for customers; they have people who show up and do the least amount of work possible to keep getting paid.

In the long run, these business owners have a team of people who are not going to be there. Employees are going to leave this company and move on to the next that offers more money. Can you blame them? They took the job because of money, showing that they’re incentivized by money. If another opportunity comes up where they can get even more money, they’re going to take it!

This puts the owner in the position of trying to have the highest comp plan possible, and at some point, that’s just not going to work. They won’t be able to pay people any higher. There’s a limit to what small business owners are able to pay; their financials may not be the same as their competition. It’s been proven over and over again that money motivation is not sustainable.2

But Grant, you may be thinking, surely there are some instances where money motivation works? Sure, for simple, straightforward tasks like manufacturing.3 If someone just connects widget A with widget B in an assembly line, money motivation will probably work better in this instance. But if you want a team of people to work on more complicated concepts or tasks requiring creative thinking—if you want self-directed employees with an ownership mindset—it will take more than money to motivate them.

Millennials, defined as people born between 1981 and 1996, make up the largest percentage of the workforce in the United States—and they leave their jobs, on average, every 3.2 years. That statistic may confirm negative thoughts you have about millennials. You may even think, “That’s why I don’t want to hire millennials!” But did you know that everybody else, the non-millennial employees who are the rest of the workforce, move on every 4.6 years?4

It’s important for you, as a small business owner, to recognize that your team may stick around only three to five years before leaving to go work for another company, because you will face the high cost associated with finding new employees to replace those who leave. According to the Center of American Progress, it typically costs 20 percent of an employee’s annual salary to replace that employee.5 That means you’ll pay somewhere between $6,000 and $15,000 every time you have to make a new hire—and that cost doesn’t take into consideration the opportunity cost, the hours of your life, and the stress involved with filling the void left by the employee who quits.

The number one expense for most businesses is overhead related to employees. Way too many businesses are leaking money from their profit and loss statements related to either hiring and firing or employee performance as a whole. And that drain is frustrating. It erodes the trust you have in your team. It may even erode the trust you have in people...