From Autocratic to Empowered: Leading the Gen Z Workforce with Matt Tresidder

Randy Wootton (00:05):

Well, hello, everybody. This is Randy Wootton, CEO of Maxio and your host of SaaS Expert Voices. We’re bring the experts to you to talk about what’s going on in SaaS today and more broadly what may be happening tomorrow. Today, I am delighted to have Matt Tresidder to join us. He’s a CEO and co-founder of Leadr, a software to help everyone get better, which he’s been part of for the last five years. We’ll talk a little bit about that. Matt started in sales, so we got some experience and ideas to share there, and he’s also the author of the provocative book Management Is Dead. There’s a better way, which we’re going to dig into. Then finally, he’s a Maxio customer, so it’s great to have you, Matt. Thanks for joining us.

Matt Tresidder (00:45):

So good to be here, Randy. Yeah. When we last talked, I don’t think you knew we were a customer right until the end of the conversation, so that was fun. I got surprised with that.

Randy Wootton (00:52):

That was great. Yeah, no, I should have known that ahead of time, but I certainly appreciate your business and very excited to be working with you and your team at Leadr.

Matt Tresidder (01:00):

Yeah, you bet. We’re a happy customer too for the record.

Randy Wootton (01:02):

Okay, well, there you go. Underline that, explanation point, and we’ll put that in the lead out.

Matt Tresidder (01:07):

I asked the CFO after the fact and he’s like, “Yes, we love Maxio.” So happy customer.

Randy Wootton (01:14):

Awesome. Well, thank you. So, I love your background because I’m recovering sales guy as well and we’re not going to go there, but love to talk about you’ve never been in software management or sales. You read all the books. How did you decide that this was going to be your journey?

Matt Tresidder (01:29):

It was forced upon me, I suppose. I don’t know if life is quite like you choose something and then it happens, but yeah, I joined a software company because a buddy of mine started one and said, “Hey, we’re going to invent mobile giving. Do you want to be a part of that?” I was like, “Yeah, sure. I’ve never really done sales or anything.” I was like, “I’ll join.” He’s like, “Well, we’re not hiring” is how the conversation went. I said, “Well, can I join as a salesperson on 100% commission?” He said, “Sure, no risk to me.”

Randy Wootton (01:54):

There you go.

Matt Tresidder (01:56):

That’s literally how that happened. I went from their first account executive to their first manager, then to the SDR director, and then ultimately, I was a VP of sales.

Randy Wootton (02:04):

That’s awesome. Well, I think that just gumption to be able to say, “Hey, I’m ready to risk it all” is an innate sales trait that he bet on you. That’s the end of the day. So, that’s awesome. The other thing I think is just people who know this podcast know that I’m really into books, I’m always reading books, and I got all frameworks. It drives my executives nuts that I’m always recommending yet another book, but what you said to me was you read all the books but didn’t have a playbook. So, what did that mean and what was the insight maybe from that experience that then led to you to think about founding or co-founding Leadr?

Matt Tresidder (02:37):

Well, anytime I talk about this, I don’t want to demonize the thirst for knowledge of books. I think I read insatiably, I love it. I think it’s fantastic, but there’s a disconnect between okay, teaching someone how to be a coach by reading a John Maxwell book for an example and then you sit down with someone in awkward feedback performance conversation. The book doesn’t really help, if I’m being honest. I mean, if you’re sitting down with someone and you’re firing for the very first time, you’ve never done that, the quote that you read in the book a year ago, that’s not coming to mind when you’re sitting down firing a friend. At least in my experience.

(03:12):

So, it’s the at bats of the street smarts. It’s falling on your face. It’s looking like a fool. It’s putting your foot in your mouth time and time and time again, and then slowly but surely you round out your edges. Then I think that’s when the change and the growth happens. But the books are important, but the application of the knowledge turning to wisdom and actually just falling on your face day in, day in, day out, I think that’s what actually makes the change happen.

Randy Wootton (03:35):

There’s a bit of irony here, Matt, because we’re going to talk about your book in a second.

Matt Tresidder (03:38):

That’s true. That’s true.

Randy Wootton (03:38):

But before we get there, I do think you have your finger on this point, which I try to tell people is that when I think about management, your first job as a manager when you move from an individual contributor and you’ve been rewarded, especially in sales, about being a great IC, you’re closing deals and then you move into a management role and not everyone’s going to be the A player. You got recognized and moved into this role to be the A player, and now you got to figure out how to take B players and C players and help develop them. So, it is this huge transition. Linda Hill, speaking of a book, at Harvard wrote about this, and I think the book was called Transitions. She focused on sales manager specifically because of this dynamic.

(04:23):

What I tell people is that my experience, it usually takes about three years to earn your spurs as a manager, because to your point, you have to go through the recruiting cycle, you have to go through the onboarding cycle, you have to go through the performance management cycle, and you got to go through one of those where you laid someone off or you fired them. So, until you have seen the at bats, to your point, or been in all the situations, it’s hard to say that you really are an intentional manager.

Matt Tresidder (04:48):

It’s very true. I like the sales analogy of moving from an IC to a manager because I think it’s quite binary. People understand the act of selling, the act of managing, but it’s apples and oranges. It literally is apples and oranges to say that someone’s really good at selling and then say that they’re just magically going to be able to teach someone else how to do it. It’s not the same thing. In fact, you’ve probably experienced this, the best sellers don’t often make the best managers. Now you can’t be super mediocre and average at selling, but they’re not usually the best ones either. Then what happens?

(05:18):

You’ve probably experienced this too, that idea of the curse of knowledge. So, because I’ve been a top performer, no one’s ever had to sit down with me and have those conversations. So, then I jump into the role and now I’m having all these performance conversations if you will that no one’s ever had to have with you. You’re like, “Wait a second, I have to talk to people about punctuality in the workplace. What?”

Randy Wootton (05:37):

Or activity, like number of emails. You’re not hitting your number. What are you talking about? Right, yeah.

Matt Tresidder (05:42):

No one’s ever had to do that with us. So, that’s when the learning happens and there’s probably a book for that, but it’s in the moment learning, I think, where the most of the spurs earning happens to your point.

Randy Wootton (05:54):

Well, that’s great. So, that I think is part of the premise of your book, the provocative title Management is Dead. Why is management dead, Matt? What have you seen or what are the trends that are contributing to a redefining of what it means to manage in this new world?

Matt Tresidder (06:09):

I just feel that the autocratic top-down style of leadership, the old school style of management, if you will, is having diminishing returns. The two biggest contributing factors to that in today’s workplace, one is the hybrid shift, moving from fully in-office to either fully remote or hybrid. We’re a hybrid team, by the way, and I think that’s probably the worst situation to be in. I’d rather all remote or all in office. Hybrid’s tough and we can talk about that. Then the other shift, Randy, is the generational change moving from Gen X to the millennial and now Gen Z’s in the workplace. The more approach style of development versus performance management, it has to be paramount within your culture or you’re missing something.

Randy Wootton (06:51):

Yeah. So, talk a little bit about that. I mean, I’m an old dude, 56, clearly the Gen X, but really on the cusp of Boomer. So, we won’t even go there. But what’s the distinction you draw between what is a Gen X individual contributor, even leader need versus a millennial or the Gen Z, which are my kids, which is really an interesting dynamic?

Matt Tresidder (07:11):

There’s a study done in Australia, shout out to my cousins down under, and they said… I’m from New Zealand, by the way. I’m not Australian before someone mislabels me. It’s almost a cardinal sin in New Zealand. We were born to hate each other, total sidebar, but we grew up, we play sports. It’s like, “Don’t like Australians.” I’m like, “Okay, got it.”

Randy Wootton (07:32):

When traveling, if you meet someone and you confuse the accents, it can lead to…

Matt Tresidder (07:38):

It’s not good.

Randy Wootton (07:39):

Not good.

Matt Tresidder (07:39):

It’s not good, but they did do a good study for what it’s worth.

Randy Wootton (07:43):

The breakdancer was a lot of fun, I mean, at the Olympics. My gosh, she just represented it in a way that is truly… I don’t know if you want to just call it down under in general, but it was a great scene.

Matt Tresidder (07:56):

She did own it. I mean that was something. So, the part of the study that was a light bulb moment for me is it asked Gen X’s, millennials, and Gen Z’s to describe the words for their ideal manager. What are the ways that you would sum up your perfect leader? Gen X said, “Directive, I want clear directives.” Millennials describe them as guiding. So, not quite directives, but enough guidance to tell me where to go. The shift that happened with Gen Z’s in the workplace is they described their ideal manager as empowering. So, you’ve gone from directing to guiding to empowering. Directing and empowering are very different styles of leadership.

(08:38):

Empowering almost feels like, “Hey, pump me up, give me a little talk. Give me the little boundaries maybe, and then just let me run.” If you are not used to leading folks with that style of expectation of how they expected to be led, your old school style of leadership, if you will, is going to fall completely flat. There’s one example, and I’ve seen it play out so many times. It’s like, “Hey, just give me what I need and then let me run.” If you do the opposite, they’re like, “Oh, you don’t trust me. You don’t believe in me. I’m not respected. I’m not valued in the workplace. My voice isn’t listened to,” hypothetically, right? Randy, you’re laughing. This is happening. It’s happening today in the workplace.

Randy Wootton (09:13):

It’s so fascinating. I talk often about this idea of someone’s confidence versus their competence. There’s another book out there called Confidence. One of the things from that book they found was in general, women are underconfident for their competence and men are overconfident for their competence. With Gen Z, it does feel a little bit to me that you never sold before, but you’re going to tell me how to do it or you never run a business before, but you’re going to tell me how to do it. Okay, well, let’s go with this. So, I do think it requires patience. Yeah, patience.

Matt Tresidder (09:50):

I think the cop out is to say, “Well, that’s their problem. Let’s not adapt.” But for example, I think it’s really easy to just throw the next generation under the bus and be like, “That’s their problem.” So for example, when I was coming up, the narrative around millennials in the workplace was entitlement. I don’t know if that was pretty much in your [inaudible 00:10:09].

Randy Wootton (10:08):

Sure.

Matt Tresidder (10:10):

But all that I heard coming up was, “You’re entitled. You expect things to be on a silver platter.” I used to think to myself, I’m just very mission driven. So, if I can attach myself to a deep why and that’s another millennial trait, then entitlement goes out the window. So, what’s that thing for Gen Z’s? Instead of just saying, “Oh, they don’t have the experience, let’s just disown them,” it’s like, no, because they want to be empowered, how do I have to adjust my leadership style in kind, if that makes sense?

Randy Wootton (10:40):

We’ll get there. I don’t want to skip over the hybrid workplace. I think it’s exacerbating the situation in terms of empower me and how do you mentor people and work within that context. But we will go to your five foundational elements to put in place to move and work from people management to people development, which I think is one of the keys. But before we get there, the hybrid workforce, we’re hybrid as well. Interesting to note, you said it’s the worst.

(11:06):

So, talk a little bit about what is the challenges that we’re all experiencing a hybrid? Why is it the worst? For those that are stuck in the middle, because it’d be hard for me. I have employees in the US. We have 240 employees worldwide. We have employees in 25 states in the US. It’d be hard for me to say everyone back in the office. So, we’re stuck. What do you do? So why is it hard working in the hybrid and managing people, especially this Gen Z? What can we do about it?

Matt Tresidder (11:33):

Well, the reason I say it’s the worst is because you’re not on an equal playing field anymore. So, if we’re all in office, we all have the same advantages and disadvantages. Well, remote, same difference. So, what I feel happens in my team, and we’re smaller than you guys, we have about 75 staff and we’re split almost 50/50. Half of us are in office, half of us are remote. So, this is the dynamic that comes to fruition. The in-office people are like, “Hey, love the camaraderie, love the community, love the hallway conversations, the water cooler, love the fact that we get to play ping pong. That’s great. Don’t love the fact that all my remote employees get to have all the flexibility in the world and have their schedule with no commute.”

(12:09):

All the remote employees are like, “I love my flexibility and the ability to work from home and have my own schedule and do the laundry during the day, but how come I feel like the B team? How come I don’t get to be in the conversations with the CEO when he walks around the office? Does he not care about us? Am I second tier? How come the SEAL teams are doing great in office and then the B teams are not?”

(12:28):

So that dynamic plays out literally all day every day here at my company. It’s how do I bridge the gap between saying flexibility and autonomy provided at the right times at the right place for in-office folks and then community if you will as a paramount priority for the folks that are remote. Trying to mesh those two things together is just a constant struggle. That’s why I say it’s the worst scenario, but I’m not going to change it because I love the benefits that we get with both, but it’s tough.

Randy Wootton (12:58):

As a CEO, we talk about this idea of how do you build culture and how do you create connections to the company, to the leaders, and to each other, and doing it for the remote employees is extra hard. The thing you had called out in our preview, I thought the three dimensions to think about were really interesting and you said it reinforces autonomy, freedom, and access. So, for those in office, how do you create more autonomy and freedom? Whereas that’s what they’re solving for in the remote, but the access is how do you create the access for the remote employees? So there’s some balance.

(13:34):

I think to your point, which we’ll get to in just a second, is about focusing on creating the culture. I loved your distinction. You had roomies or Zoomies. Can you talk a little bit about that and how do you think about the standards that you insist on in terms of everyone participating in the meetings or in Zoom calls? How do you think about creating equal playing field?

Matt Tresidder (13:57):

Yeah, we just have standards and they might sound harsh to an outsider, but it just means that we’re making culture and community to your point of priority. So, one of those standards is, so yes, we have roomies and Zoomies. Roomies are the folks when we have our company all hands, they’re in the room, and then the Zoomies are the folks that are remote. When we have our company all-hands meeting, all of the Zoomies, if you will, are on a big TV. So, we can all see them and they can see us. So, one of the standards that we have is if you’re in a meeting with a Zoomie, it’s cameras on all the time. It doesn’t matter what type of meeting. It doesn’t matter if there’s 100 people on the call. It doesn’t matter if there’s two people on the call.

(14:30):

Camera’s on all the time. Number two, if you’re in a meeting with a smaller group of people, mics off all the time, because camera’s off and mics off if you will, mute on, it is one step closer to disengagement. So, it’s not saying, “Oh, if you have cameras off in your team, you’re going to have a disengaged culture.” That’s not true, but it is one step closer to that. If you’re forced, if you will, to use that strong term, but if you’re forced to have cameras on, you have to be engaged. No one wants to be in a team meeting with someone that’s checked out looking around or walking the dog or doing the laundry.

(15:05):

So, it’s an accountability mechanism and constantly trying to call out to the Zoomies how to provide that access and constantly calling out to the roomies how to provide that autonomy, it’s a challenge, like I said, but we talk about it and think about it all the time. At least I do.

Randy Wootton (15:20):

That’s great. Your software, which we’ll get to in a second, is core to this. One of the things we talk about, the biggest driver of employee engagement is effective one-on-ones. So, how does that play out differently in a hybrid environment versus for your roomies and the Zoomies? How do you think about the one-on-ones?

Matt Tresidder (15:37):

It’s critical. I’m thinking about is it more critical for Zoomies? It probably is. It probably is.

Randy Wootton (15:50):

I would argue the reason why is because you don’t have that informal bumping into each other. Hey, I got a quick idea. This is what I miss so much. I sit in my little hovel in Oakland all by myself, and most of our employees are in Atlanta. I only get there one week a month. But the difference between just to pop in and say, “Hey, let’s just whiteboard this,” or you’re going out to lunch and grabbing a coffee. So, you have this informal, not just relationship building, but problem solving, unfolding conversation.

(16:18):

If you’re a Zoomie, I know for me, I have an EA, I have her deliberately track my one-on-ones with my executive team, with my leadership cadre. I try to meet once every six months with the teams that I’m meeting. Otherwise, it’s just out of sight, out of mind is what I worry about.

Matt Tresidder (16:33):

Very true. Very true. Even small things like I’m a whiteboard guy, I don’t know if you can see.

Randy Wootton (16:37):

Yeah, no, love it. Me too. Look at that. Right on. Yeah.

Matt Tresidder (16:40):

It’s very rare that I’m like, “Oh, quick random FaceTime call in the middle of the day. Let’s do a virtual whiteboard.” Actually, I don’t think I’ve ever done that. So, the priority of making very regularly scheduled, we say weekly one-on-ones with every employee regardless of remote is critical and even in office. So, I don’t want to say that it’s only important for remote just because you get to have those organic touch points. I think often as leaders, we use that as an excuse to not have one-on-ones. Well, I just saw Bob this morning and I talked to Sally last night. They’re great. That’s not the same thing. But the reason I’m wrestling with this is because I’d never really thought about, “Is it more important for remote?” I think to your point, it probably is.

Randy Wootton (17:19):

I think so. I think the other thing that you actually brought up, which got me thinking about it, was this idea of when you don’t have clarity, negativity fills the void. So, if you’re not doing the one-on-ones or you’re not having to bump into in a politically correct way, there’s void that gets filled. Can you talk a little bit more about that? I think that’s a really insightful insight in terms of where we tend to not default to the positive. We tend to default to the negative. What did you mean by that and how has that played out in your experience?

Matt Tresidder (17:51):

Yes, where clarity lacks, negativity fill the void. Our subconscious, our imagination is often, if not always, worse than reality. So, I read an article. When I first got promoted to a CEO, someone sent me this article that said, “Congratulations, you are now a full-time actor.” He went on to tell the story about how every single gesture, word that you use or don’t use is now interpreted or misinterpreted. He told this story about doing a company all-hands meeting. When he talked about the revenue number, he raised one of his eyebrows apparently, and one of his employees interpreted that as we were lying about the revenue number.

(18:27):

Because that void wasn’t closed, if you will, that employee did not have a one-on-one with their manager in the next two weeks, two weeks later, there was a bubble thing bubbling up under the surface where employees were like, “The executive team is lying about the revenue number.” When the CEO finally heard about this, he’s like, “Where did this all come from?” It’s like, well, you were lying about the revenue number at all-hands. Why? You raised your eyebrows, you never raise your eyebrows. Why did no one ask me about this? Why did you not meet with us? So clarity lacks, negativity feels the void.

(18:58):

That’s a very small example, but those examples happen all the time where we don’t provide transparency and clarity on even minimal issues and then mountains out of molehills all of a sudden. This has happened to me several times where you’re not a chief reminding officer, you haven’t bet the drum on the most important things consistently and you haven’t met with your employees. Then all of a sudden, this big drama is unfolding. I’m like, “How the heck did we get here?”

Randy Wootton (19:22):

Yeah. Hey, man, I heard that expression. I don’t know if I made this up or heard it from somebody, but the whisper at the mountain top turns into the thunderclap in the field. I know for sure, I’ve been caught by that where you haven’t been as sensitive as I could be in how I’ve communicated something and it’s been misinterpreted and I’ve had to clean it up. Four examples come to mind immediately. I do think to your point, this idea of being a chief reminding officer and the executive team broadly being adopting that and being on message, being consistent around what the vision is, the mission, what the strategy and the objectives and the priorities, using forums like all-hands.

(20:02):

I do a thing called a view from 30,000 feet where I’m coming back on an airplane, I’m writing articles about what I’ve seen and what I did. Because when I was not CEO, I was always wondering what CEOs were doing. But it’s just this constant drum beat of communication and being echoed, reinforced, amplified by the executive team is so critical. I think people start to look for dissonance and splinters between the different executives in terms of how they represent things.

Matt Tresidder (20:31):

It’s so true. I don’t mean to say that one-on-ones are a silver bullet, but if there’s one thing that’s going to move the needle, if every single one of your employees had a one-on-one at least weekly with their manager and it was a safe space or opportunity for them to say, “Hey, was Randy lying about the revenue number at all-hands on Monday?” The supervisor can close the loop, sideways energy eliminated. So, that’s the point. It’s like people can easily say, “I don’t have time for this,” or “I do it in the hallway.” No, you’ve got to create that safe space if you will.

Randy Wootton (21:00):

Awesome. So, maybe I want to come back to the five foundational elements to move an org from people management to people development. But because we’re at this cusp of this conversation around the one-on-one that really was a founding principle at Leadr, can you talk a little bit about the technology and what you’re trying to achieve and what the vision was and how it’s different than some of the other technologies that are out there today?

Matt Tresidder (21:22):

Yeah, no doubt. So, we started the conversation by saying people lack a playbook. So, we created a playbook and we call it Leaders by Foundations. It’s every manager should work to have regular one-on-ones and effective meetings with their team. They should recognize their employees for unique strengths. They should have effective feedback up, down, and all around the org chart, clear goals that aren’t set and forget, and then everyone should have a development plan. So, those are our five foundations. As I share these, people are like, “I’ve never heard that before.” No, basics, we know all of these things, but it’s the implementation and ensuring that they happen on a consistent basis that’s missing.

(21:58):

So, that’s what our platform does. It’s what do you have to do to turn your managers into coaches? It’s providing very simple and consistent habits. Our technology basically allows you to do that. So, whether it’s good meetings, goal setting, gathering feedback, performance reviews, development plans, all housed in one place, very simple, very intuitive, very easy, and it’s almost like a virtual coach. Here’s some advice. Here’s some suggestions. Here’s how to make these basic habits, if you will, more consistent in your company. The thing to your second point that sets us apart is we’ve built this platform for your employees.

(22:32):

So, from the ground up, we’re thinking, “Okay, this is a platform for development, not performance management. This is not an HR solution. This is not a silver bullet on Big Brother is watching. No, we believe that if you develop and have higher engagement with your employees, productivity will rise and retention will be at the level that you want it to be.” But it starts with that development culture with the frontline employees and that’s who we had in mind when we first built it.

Randy Wootton (22:56):

Yeah, I think that distinction between HR tech versus manager tech is an interesting one because a lot of HR tech is rooted in the idea of compliance. You get people onboarded, they sign their documents, and then you go through and you do your performance reviews. You have it all documented. The training everybody has to do every year gets documented. I think those systems are called like HRIS systems, but the development system falls more broadly in management tech. I think the other interesting thing, because I’m familiar with some of the other ones out there on the market, Culture Amp, 15Five, Lattice, but I think the way that you approach the problem is really interesting in terms of having this framework, what you call the foundation.

(23:39):

Then I think the other thing is you have this great partnership with Lencioni when we were talking a little bit about the executive team in our pre-brief, and I was like, “This guy wrote five dysfunctions of a team. He talks about you need to have this first team and make this investment in executives.” You’re like, “Oh yeah, we’ve got a partnership with him.” So can you talk a little bit about that partnership and how that plays out? Because you really do have a tech plus services, a tech plus framework construct, which is a little bit different than just workflow application.

Matt Tresidder (24:03):

Big time. Yeah. Patrick Lencioni and The Table Group, they’re phenomenal. He coined the term organizational health and it was the healthiest organizations, the ones that win. I think a lot of folks, especially in maybe the CFO suite, are like, “Well, if it’s not quantifiable, if you can’t show me the ROI, dollars in, dollars out, it’s not going to be successful.” I think we all know that’s not true when it comes to if you have healthy culture, you’re going to win. So, their partnership’s been phenomenal. We launched with them about a year ago, and the problem they were trying to solve was we’ve done a great job of establishing healthy, cohesive executive teams, but how do we cascade those habits all the way down the org chart?

(24:41):

Which is funny because the problem that we were facing was we built a software platform for frontline managers and frontline employees, but how do we get the buy-in from the executive team? So it was almost like a marriage made in heaven of we complement each other’s strengths and weaknesses. So, yeah, we’re about eight to nine months into launching this thing and it’s blowing up and it’s been a ton of fun working with them. He’s just the GOAT. They just have a real strong heart for creating healthy teams, and that’s our mission of developing a million leaders. We couldn’t be more aligned.

Randy Wootton (25:09):

That’s great, developing a million leaders. That’s awesome. Part of the reason you focused on the manager, I think the research shows or the old adage is people join companies for the vision. They stay because they have a friend and they leave because of a bad manager. What you had said was employees leave companies because they enable or tolerate bad management. How did you come to that insight and then drive that as your focus for that’s where you wanted to invest time and energy?

Matt Tresidder (25:41):

Well, I think first of all, that’s my journey. So, as I shared, I built this for me. So, let’s go back to my story. As I went from first-time sales rep, manager, director, now VP, managing managers, most of which had many, many more years’ experience than I did, I’m trying to figure it out as I go. So, if I could go back and do it again, leaders as the solution, if you will, that I wish I had had. So, that’s part one. Part two is it’s almost like a displacement of ownership when an executive team says people don’t leave companies, they leave managers. So, then I guess the strategy is, well, let’s just fire all our useless managers based on what we hear in the exit interviews and we’ll just hire and bring other people in. You’re just repeating the cycle.

(26:24):

So, first step, take ownership for actually the factors. They left the company that enabled bad management. So, step number one is the executive team. Don’t just say it’s bad managers. You’re the ones that enabled the bad management. So, take ownership for it. Step number two, it’s not that those bad managers were bad people. I think this is such an important point to get across. I’ve met very few people, if any, that wake up every day thinking, “How do I get my team to hate me today?” I just don’t think they exist. So, what happens? So why do employees leave thinking their manager hated them? Well, they weren’t equipped, they weren’t trained, they weren’t given a playbook.

(26:55):

To our earlier conversation, they were probably a top performer that never had to have the conversations they’re now having. So, why would we expect them to get it overnight? You said three years, three years to get your spurs. Sorry, I’m on my soapbox. I could talk about this forever. Three years to get your spurs. How many companies have the patience to wait three years for their managers to look like leaders? I don’t. There’s no way that I have three years of patience at my team. We’ve only been live for four years. So, it’s just we’ve got to take ownership and take accountability for the fact that equipping our managers and fixing that frontline employee experience is a game changer for our business.

Randy Wootton (27:34):

I mean, I’m going off script here, I didn’t ask you before, but do you have any data in terms of your ability to impact ramp time or do you have data in terms of people who use your program in terms of their employee engagement survey results or their NPS that they’re more effective than people who don’t? How do you make this case that you’re going to help people become effective leaders faster?

Matt Tresidder (27:59):

Yeah, love it. So, NPS is a very quantitative example. So, we have a pulse survey tool built within our platform called Leadr Insights, and it’s literally doing what you just did. So, it’s sending out a pulse survey anonymous to all your employees every single month. That allows me to stack rank the health of my managers based on what the employees would rate their experience at the company being. So, there’s one example that we can track train lines over time. Then with our customer base, we have about a thousand customers now. We’ve been starting to see data of retention prior to leaders playbook and post.

(28:34):

Now, because we’ve only been live for four years, we don’t have a huge Rolodex of examples of that, but we have seen about a half a dozen very clear examples of prior to the playbook being implemented and post, and now we’re starting to see retention in those teams with healthier managers being much higher, much, much higher.

Randy Wootton (28:51):

I think the hard thing to control for, because I’ve been around for a while, is just that last four or five years of the great resignation that played out in 2019 and 2020 versus now everyone, especially in technology, is hunkering down at the jobs they have because there aren’t the roles available with the B2B SAAS recession that no one’s talking about. So, I think over time, you will have a great data set that you and Patrick Lencioni can use to help make this broader case about the companies that are the healthiest ones or those who focus on organizational health. Just before we go to the speed round, one of the things we had talked about was this shift in your business model and how to add services in a software model.

(29:32):

You had quoted the guy, the founder of HubSpot in the article or the tweet that he had in April. Do you want to talk a little bit about it? Because I think it’s really interesting. Most people are like, “Oh gosh, you shouldn’t have any services like the pure SAAS, the way you get the valuation is by no more than 10% of your revenue coming from a services type model,” but you think there’s a different way. What have you learned and how are you thinking about that?

Matt Tresidder (29:55):

We’re in experimentation phase with this at the moment, and it resulted in our record sales quarter last quarter. So, let me just unpack a little bit of the experiment we’re running. So, Brian Halligan, the CEO of HubSpot, said… The tweet was 2004, software as a service, 2024, service as a software. The concept being everybody wants help and knowing that I need a coach or a consultant or an outside voice to come in and provide some services to us is a known and known. It’s a known quantity. What people don’t want right now is more software fatigue. I think the number one sales objection that I’m sure every SaaS company is facing is I have millions of tools. I have too many, especially coming off the back of the recession. It’s how do we carve out a lot of our systems?

(30:44):

So they’re thinking to themselves, “Well, I want to consolidate and I want to bundle.” So the competitive advantage that you have is leading with services as using software as the accountability mechanism to pull through that change that you’re trying to provide. So, for us, it’s hey, we want to make your managers more effective. We want to make your managers look like coaches. We’re trying to transform your managers into leaders. The result of that is what we just talked about. Well, we can come in and run monthly training sessions on site, we can do it quarterly, we can do it Zoom, we can come in person, we can do role plays, we can do breakouts.

(31:16):

The way that we’re going to see the change happen is by them using the platform, because what happens in these training sessions typically happen is mountaintop moment, had a great session, learned a lot, and then I forget it immediately. So, that’s the lead and the hook that we’re using now is leading with that services model and then bundling it into the software. The reality is what we’re seeing is you can’t really separate the two because the services that’s driving the adoption of the platform and the platform itself is the one providing the accountability mechanism for the training. So, we’re still in experimenting phase, but it blew up our sales last month, because we are attaching to something that’s easily understood and it doesn’t feel like they’re just getting that eye roll moment of, “Here we go again. One more piece of technology.”

Randy Wootton (32:00):

Yeah, it’s interesting. I think maybe because you’re focused on behavior change versus process efficiency. So, having been in sales for a while, adopted a lot of different sales methodology, Sandler and we just launched Winning by Design this summer with our sales team, my biggest pushback on our enablement team was for this to take, we need Winning by Design to be integrated into our Salesforce system, our sales process that the stages we’re using are attached to the Winning by Design bow tie model. If it doesn’t, it’s going to fall apart. Sandler did a wonderful job of this with their Sandler submarine.

(32:38):

I ran high velocity transaction sales teams, and you would go through the training once a month with Sandler and then you’d come back and all the systems were tuned. You had to invest in it, but all the systems were tuned to support that. So, they didn’t have a service plus tech offering, but it wasn’t going to work unless the service was instantiated in the tech. So, I think you guys have had a great insight in terms of behavior change and coaching. If you’re trying to do skill development, you need this services component layered and the training layered in and tightly tied to the technology. So, well done.

Matt Tresidder (33:12):

Thanks. I think the next evolution will be how do we replace manpower services with AI powered services? But that’s another evolution.

Randy Wootton (33:21):

Yeah, we can talk about that. I have a friend yesterday I was talking to about how he’s running a company that’s using AI experts to help people answer specific questions. It’s him and just all the prompting he’s doing. He thinks he can run the company with contractors and AI. Yeah, so it was wild. Who’s the first company that’s going to make a billion dollars? That’s just that one layer. AI augmentation will be interesting. Let me ask you a question, are you VC backed?

Matt Tresidder (33:50):

We are. So, our series A was led by a firm called Bedrock out of Austin. Geoff Lewis out of Founders Fund, he’s awesome.

Randy Wootton (33:58):

Oh yeah. Great. Yeah. When you presented this revenue model of services versus subscription, have they got it or are they pushing on you? Yeah. Okay. That sounds great. But don’t let it get to be more than 20% of your revenue because then we’re crushing our overall valuation in the market.

Matt Tresidder (34:15):

It’s a good question because we’re very much still in the incubator phase of this. There’s no rocks being thrown. It’s very much like, “Hey, we’re trying to figure this out.” At the moment, we’re throwing everything at every single deal and we’ll figure out gross margins down the road. So, I haven’t got to that fight yet, if you will, but they’re an amazing partner. I doubt it’ll get there.

Randy Wootton (34:34):

That’s great. Then if you can share some correlation between gross retention and the impact of those that have adopted this program versus those that may have just bought the platform. I guess it’s implementation adoption, success, time to live, and then gross retention at time of renewal.

Matt Tresidder (34:51):

Net revenue retention too. Because I think the unlocking and cracking the code on the adoption metric is the thing that allow us to fix cross-sales and expansions too. So, I think it’s going to win on both ends, not just the GRR metric, but also on NRR.

Randy Wootton (35:05):

Great insight. All right. Well, with that, let’s roll to the final phase of the conversation, the speed round. Three questions. One, what’s your favorite metric and why? What’s your favorite book and why? It doesn’t have to be business book, any book you might be excited about, and your favorite influencer, someone who’s creating content that you’re reading, consuming, or listening to that you think is really an original thinker. So, favorite metric and why?

Matt Tresidder (35:30):

Favorite metric, this is a very non-CEO metric, but it’s the burn ratio. So, tracking at a one-to-one burn to ARR ratio is the healthy keeping your metrics intention, not just focusing on growth at all costs and not just focusing on efficiency and profitability because that’s boring. How do you have one-to-one versus ARR?

Randy Wootton (35:49):

Why do you say that’s not a CEO metric? I think at the end of the day, the CEO has got to be responsible for capital allocation and short and long term. That comes down to how much cash you have, when you have to raise cash, and how you’re burning. I’m interested in that point of it’s not a CEO metric. Why do you say that?

Matt Tresidder (36:04):

You’re not wrong, but I would think that the CFOs may be thinking more about that and maybe your quintessential businesses, but that’s different now. Yeah, three years ago, if a CEO told you that burn ratio was his number one metric, he had a problem or she had a problem. It should have been triple, triple, double, double, right? That metric is dead, the T3, D2 metric. That does not exist anymore. So, I think that’s probably why I said that.

Randy Wootton (36:29):

Got it. Yeah.

Matt Tresidder (36:31):

Truly. Thinking about cash efficiency should be the… It takes SaaS B2B business world. That should be a number one focus.

Randy Wootton (36:39):

I agree. I think that when we talk about it, many people have said growth at all costs versus this new world we live in, which is around efficient growth. Rule of 40 is one of the ones that we’ve talked to. I think Bessemer has come out with a new rule of X, but the emphasis is growth is going to drive your overall valuation, but you better be able to be clear about your profitability. If you aren’t profitable right now, how can you get profitable quickly? And then you control your own fate when you’re profitable. You can take a deep breath and decide where you want to go invest next.

(37:12):

So, I think there’s a great guy out there I respect immensely, a guy named Todd Gardner that wrote about this. He called it the Dolphin Strategy, where you go unprofitable for a little while, you come up, you get profitable. You can float around them for a while, then you’re super deliberate about your next set of investments. If you’re bringing your investors along with you, that builds confidence that you’re able to manage the business and be deliberate about positive ROI investments over time.

Matt Tresidder (37:38):

I know this is the speed round, Randy, but I have to say this, if you’re a founder or CEO, don’t shrink back on your vision. So, just because you’re pursuing healthy growth or efficient growth or profitability, don’t use that as an excuse to say, “Well, we’re going to shut down all of our crazy ideas and not pursue something incredible,” because you’ll get overtaken and you won’t be able to catch up. Your competitors will eat your lunch. So, both of those things, intention.

Randy Wootton (38:00):

That’s right. That’s why CEO job is fun and hard. So, speaking of that, your favorite book is?

Matt Tresidder (38:06):

The Hard Thing About Hard Things by Ben Horowitz.

Randy Wootton (38:09):

Yeah. Do you have one takeaway from that other than it’s hard? What was enlightening for you?

Matt Tresidder (38:17):

It was probably the first business book where the author wasn’t afraid to say, “This is what it’s really like.” The fact that he cussed and told actual real stories about Netscape and working with Andreessen, I’m like, “Thank you. Thank you for not putting the glossing. Thank you for just giving us the real thing.” So if you are thinking about being an entrepreneur, if you’re thinking about stepping into management, read The Hard Thing About Hard Things. So, you go in with your eyes wide open.

Randy Wootton (38:46):

Someone gave me that book when I had my first CEO gig, and I remember feeling like an imposter. It was a public company. I didn’t know what the hell I was doing and freaked out on many dimensions. This guy gave me this book. It was just reassuring because I think the CEO job is just really lonely. Getting people to be authentic about the challenges they’re having is hard, right? Because as CEO, to our earlier point, you’re out there as the evangelist, everybody, your board, your employees, your ELT, this is where we’re going and why we’re going to win.

(39:17):

But I do think that’s one of the reasons why I always recommend people get involved in some peer group, like Entrepreneurs Organization, EO, Young Presidents Organization, YPO. I’m at Vistage right now, where you can get in the room with people and it’s high premium on authenticity, low premium on ego. People are sharing stories and it can really help provide perspective and ideas.

Matt Tresidder (39:41):

Yeah, love that, so good.

Randy Wootton (39:44):

And then finally, your favorite influencer?

Matt Tresidder (39:46):

I’m a Working Genius nut fan at the moment. So, if you haven’t taken the latest productivity assessment called the Working Genius from Lencioni, I strongly suggest you do it. I’m not a big personality assessment guy. I hate being put in a box. I don’t like people telling me, “Oh, you’re an eight on the Enneagram, which means this,” or “You’re an ENTJ, which means this.” I hate that because I want to be a 10.

(40:06):

But the Working Genius helps you be more effective with your team. It helps you understand what gives them energy and what drains energy, and it will help you pull the best out of your executive team. So, anything around the Working Genius content right now, I’m a little bit obsessed with, which if you told me that a year ago, that would’ve been the most antithetical Matt thing ever.

Randy Wootton (40:28):

Wow. All right. Well, I’ll take a look at it. I’ve done several of these over the years. I actually am a big fan of Insights, and what I tell people is when we take the Insights profiles, there is no right answer. But what it helps me do, and I think it’s actually extra helpful in a hybrid environment, is it gives me a year’s worth of one-on-ones in terms of understanding what your preferences are in communication and how do you want to be managed. It’s a catalyst for conversations that you wouldn’t necessarily have. So, for example, I have a new head of marketing who just started, she took her Insights, I gave her my Insights.

(40:59):

I have this document Working With Randy, and what I think it helps with is just you don’t have time to go out for coffee because you’re not working in the same office. So, the Insights, or maybe I’ll take a look at this Working Genius as another option, is a way for you to just break down those walls and have some authentic conversations around who you are, what motivates you, what demotivates you, and how best to manage and develop.

Matt Tresidder (41:22):

So good. Hey, what’s the Working With Randy doc?

Randy Wootton (41:26):

Aha. So, Working With Randy was one of these ideas, I can share it with you, but from someone who said, “Write down what you like, what you don’t like.” So for example, there is no space between the lines is one of the things I described. What I mean by that is I’m going to tell you how I feel about a report. It either works or it didn’t work. Me telling you the report wasn’t good doesn’t mean that you’re a bad person. So, there’s no space between the lines. I will tell you why the report wasn’t great and how we can evolve that. One of the things I talk about is my tendency is to build relationships through work, not through social chit-chat. So, I will end up starting a meeting with, “Hey, let’s dig into the scorecard, talk about what’s happening. I feel like that’s a really wonderful experience.”

(42:11):

Some people find that to be really intimidating as they show up and the first thing Randy says is, “Let’s break out your scorecard and talk about what’s red.” It’s just like a document that says… I’ve been managing people, gosh, 40 years, and this is what I have found has worked. These are the things where I’ve gotten feedback. This has popped for someone. I’ve given it to my executive team at Maxio. Twice a year, we do a performance review, full performance year and a mid-year check-in.

(42:44):

Part of that mid-year check-in is how am I supporting you? How are we working together? And then for someone new, I say, “Hey, here’s the Working With Randy doc. Tell me what works for you. It’s like the operating system. You can sure share one with me, but at this stage of my career, I’m going to probably want you to figure out how to work with this construct versus me figuring out yet a new way to work with someone else.”

Matt Tresidder (43:06):

I love that. That’s great.

Randy Wootton (43:07):

Yeah, I’ll send it to you. Take a look at it.

Matt Tresidder (43:09):

Yeah, yeah, please do. I think the leader going first as well is powerful. Starting by saying, “Hey, I don’t have everything right, but I’ve got nuances. You might get offended, but just know that about me.” Hopefully, they don’t get as offended as they would’ve otherwise.

Randy Wootton (43:26):

I think also, you can depersonalize it, meaning that it’s not a judgment. It’s like, “Hey, here’s what’s unfolding. How’s this playing out?” Well, you bring in some insights. The Insights doc can say, “Oh yeah, the way we view the world is just very different.” So I know we’re almost out of time. I’ll give you one example, right? So part of the Insight profile, I’m an extrovert by nature. I get energy from people. I have a couple of people on my team who are introverts and they need time to process information. So, my natural default is let’s get in the muck and start talking about the problems and what we’re going to do about it. Their inclination is I want to think about the problem and come back and report to you with some ideas and thoughts.

(44:05):

It drives me absolutely bat crazy because I want to get into it. But for them to be most effective, letting them have that time to process and come back and present is a learned skill for me and them being able to articulate that’s what they need is really valuable. So, some people, I can mix it up in the meeting. Other people, I got to say, “Okay, come back to me in two days. Let’s go.”

Matt Tresidder (44:25):

You and I come from the same cloth. I’ve had to learn to allow people to process the way that they want to process. It’s been a challenge for me. I’m like, “Do you not care? You’re not paying attention. Are you not thinking about this problem? Fight it out with me. Come on.” They’re like, “I do care. Just give me a freaking minute.”

Randy Wootton (44:43):

Exactly. Maybe that’s also with Working Genius, but that’s for me where the Insight profiles are super valuable as you can find out, “Do they process information more like what they call blue energy, very, very detailed?” They want everything locked down. Are they more green energy, which is they want to social and be able to go out to dinner and talk about things and have a coffee? It sounds like our energy is this red, fiery and dreary, which nets out as like be bright, be brief, be gone.

Matt Tresidder (45:15):

I love the language right there.

Randy Wootton (45:17):

Awesome. Well, Matt, thanks so much. Love the conversation. Really enjoyed it. Thanks again for being a customer. I look forward to continuing the partnership going forward.

Matt Tresidder (45:25):

Yeah, absolutely. Thanks for having me. This is fun.