Webster’s dictionary defines loyalty as “a strong feeling of support or allegiance.” Most people see loyalty the same when it comes to family, friendships, and relationships. But does loyalty have any purpose in business? Here we look at the pros and cons of demonstrating loyalty to a company.

In this episode:
• News flash: Your company will survive without you
• Dealing with a toxic manager while feeling loyal to your team
• Dealing with a toxic environment while feeling loyal to your manager
• Explaining a perceived lack of loyalty in job interviews (“job hopper” label)
• How to handle a better opportunity even when you are happy with your current situation
• Why loyalty needs to be a two-way street
• Show your support to a company when they show their support to you
• Companies need to earn loyalty every day

Watch the episode here:

Listen to the podcast here:

Is Loyalty Hurting Your Career?

I have written thousands of words across many websites like Forbes, Quora, LinkedIn, my blog. On all those different pages, you can comment, ask questions, and send me direct messages. Having put out many different articles, I get questions all the time. People are asking about career moves and what they should do because I am the sucker co-host. If you were to do this with Frank, you would get a contract emailed to you with a nondisclosure agreement and his hourly rate. I respond to people regularly.

One thing that Frank and I were talking about that I find is crazy is how common a theme is across people that are considering leaving their job. It always comes down to some loyalty. Either they feel their company is not loyal enough to them but in many more cases, there’s this feeling of, “Should I be more loyal to my company?” Meaning, “Should I put myself in a second lien position to my company?”

LMSM 46 | Business Loyalty

Business Loyalty: Whenever there’s an opportunity with a lot of money or strokes your ego, you have to be self-confident enough to leave something behind.

 

In this episode, we are taking 7 or 8 different direct messages people have sent to me asking my advice where loyalty was some theme that was holding them back in some way. Frank and I tried to break down when it makes sense to be loyal and when it is foolish to be loyal when making big career moves. If you are new to this show, hit the subscribe button so you get notifications when we post new ones. If you are a longtime reader and you have not given us a five-star review on Apple, give us a five-star review. Don’t be such a selfish lover.

Franky.

Ian, you son of a bitch.

We are talking about loyalty.

I’m loyal to you. You were saying that you worked out, you haven’t yet showered, and you’re starting to stink. I’m loyal but I’m thrilled we’re in different locales.

Thankfully, on 5on4.group, there is no one else in this office except me. People would be complaining to HR about the odor coming out of my cubicle. Did I ever tell you the time about that when I had to deal with a guy that smelled bad in our Richmond office?

No.

He smelled bad and people kept complaining to managers locally and they tried to play around with it and hint at it to them. This guy smelled bad. It got to a point where they no longer trusted the local management to do anything about it. They start calling HR. It finally got to the point where my branch manager got pissed off and called him in. She was like, “It’s the point where people are calling HR about your smell. You got to deal with it. Fix it.” The guy quit a week later.

Did he?

He quit because pretty much we told him, “The entire office stinks. You smell like shit. They’re now to the point where they’re complaining about you.” It killed his loyalty real quick because this guy smelled like ass. It’s a different subject than what we’re talking about. We’re talking about the topic of loyalty because I noticed a trend. I write every day on LinkedIn. I’ve written a bunch for Quora. I get people in the comment sections all the time asking me for career advice. I even get a direct message or someone comments on something I post. More and more, I’m seeing the words loyalty, abandonment, and guilt. A lot of things that you would think of more in your relationships than you would, at least I would. At my age, I’m more experienced now where I don’t think of those things so much from a business perspective. I see that it drives a lot of people’s career decisions.

Frank, you and I are pretty loyal people to our friends and our family. My parents have been married for over 50 years. Jenny’s parents have been married for over 50 years. Your parents have been married for over 49 years. We come from stock where loyalty is important. I’ve been married personally for many years to the same girl. Jenny and I’ve been together since college when we started dating.

I’ve been married for a few years.

You’re killing it. That’s a big deal. You’ll be ahead of the average in marriage. That’s pretty good. I see a lot of value in loyalty when it comes to family to friends. The average person believes in loyalty and values but it can go a little bit too far when you start mixing it into business. There’s a point where it ceases to add value. Frank, dated a girl. How long did you guys date?

If you quit your job, someone else will fill in that gap, and the world will just keep moving. No one will even remember you. Click To Tweet

Almost eight years.

Before his wife, they dated forever. Jenny and I were friends with both of them. We’re friends with Frank first but not even because Jenny pretty much met you at the same time as your ex-girlfriend. You couldn’t even say she knew you before.

We met Jenny the same night.

She was friends with your ex-girlfriend as she was with you. When Frank and his ex-girlfriend broke up, it was traumatic for Jenny, “What do we do? Do I stay friends with both of them?” I let her go through that process. There was a point where she was still down about this where I had to say, “Jenny, move on. You need to understand that we can’t be on both sides anymore. It’s time to cut the cord. I know that sounds awful but we’re team Frank. We’re not going to be in social outings with those two anymore. We’re on the side of Frank and that’s where we need to be right now. We can still be polite and cordial but, for the most part, everything’s changed and we need to move on. We’re still going to see Frank all the time. We’re probably not going to see his ex-girlfriend.”

There’s a couple of things that happened from your perspective but on my side, too. There were people that were in our lives together and I was like, “Okay.” I didn’t even pursue a friendship with them. I let them go. I always refer to that breakup as the fire. I lost them in the fire. It was part of it. That’s the healthy side. As a younger person, you might struggle with making those decisions. This is nothing other than hysterical.

My mom is the nicest human being on the planet. She sends out 1,200 handwritten Christmas cards. Every obscure holiday, you get a card. My mother is incredible. She’s the most giving person on Earth. She can’t see anything other than friendship, loyalty, and all of it. One of my uncles, he’s probably 8 to 10 years younger than my parents. My parents got married when they were 22. She’s known my uncle since he was 11, 12 years old. My mom is still friends in reverse chronological order with both of his ex-wives and three of his ex-girlfriends going back to high school. My mom still invites them to come to things and it’s uncomfortable. Everyone is like, “What the fuck is Sheila doing here?”

She doesn’t know how to break it off.

My mom doesn’t know how to do it. The funniest thing was my uncle dated a woman in South Florida. My mom is like, “I didn’t like her.” My uncle’s like, “I’d like to meet her again.” My uncle is single again. He’s like, “I’ll rehash that one.” That’s the one my mom doesn’t keep in touch with. If you’re not strategically loyal, there’s this weird element that follows you around. Whose loyalty do you have? Is it the family or these people who are outside of it? Every gangster movie comes down to loyalty, it’s one of those things that’s ingrained in most of us. In some instances, it can be a challenge and it can be something that’s a struggle for some.

Loyalty always comes up when people are trying to decide whether to leave a company, accept a competitor’s offer, or change because it’s hard for them to pull the business aspect away from the emotional relationship component. I’ve joked that I worked at Carpet World for one six-hour shift while I was in college. That entire shift was spent with the girl I would be replacing who was teaching me the computer system. She was the nicest person on the planet. She was patient. She taught me everything.

The job would have sucked. It would have been data entry and I would have hated it. I couldn’t get myself to call Carpet World the next day when I wanted to quit because I felt loyalty to a girl that I had only worked one shift with because she had been nice to me, I felt like I owed it to the company and her to show up to work, come in, and give some return on her kindness. It wasn’t the money. She had been kind to me and nice to me. She was great. I felt like I owed it. Thank God, I had Paxson, who called and acted like me and quit for me. I called the manager because I couldn’t do it myself. I felt loyalty.

When I left GE, all of my managers who I was loyal to that I loved had been summarily dismissed. They’d been booted and kicked out. They promoted me and put me into their jobs. I no longer had loyalty to my manager. I had a real tough time leaving GE. That’s the only place where I’ve ever been loyal to the brand, to the company. I felt like this company has set me up for great success in my life. They gave me a chance out of college. They invested in me a ton as a leadership program. They spent a lot of money on me. They promoted me over and over. I was loyal to the brand.

It was hard for me to leave the company. That’s the last place I worked where the mission is everything. I was still a high school college football team. That’s how I thought of work, I’m on a team and we’re going to do great things. When I left NVR, I didn’t have any loyalty to my manager. We weren’t getting along when I left. My loyalty was not to the brand. I didn’t care about the brand of NVR. The brand of NVR is to make a lot of money. That’s NVR’s brand. That was an easy place to leave for me because the mission of NVR was always, to be honest, to return money to shareholders and make the stock go up.

Financially, it was an easy company to leave because there isn’t much of a mission there except to make a profit. I had trouble leaving NVR because I was loyal to my team. The people that reported to me were hard workers. I’ve worked with them for a decade. I had a lot of these feelings of, “I’m leaving them behind. What’s going to happen with their careers?” I struggled in that one. Those are three different examples of companies that I have left. In each one, I had some feeling of loyalty in my gut that was keeping me from making the decision.

Business Loyalty: The company is never done proving itself to the employee. If they break even on the 15th of every month, both of them have to prove themselves.

 

I’ve had a handful of jobs in my life and that’s been it. I moved from Coral Springs to Gainesville and I ultimately quit the Gainesville job because I was graduating from college and it was time to get a real That always had an expiration date because I knew that wasn’t my career. That was an easy one. It was hard to leave the people but it was easy because there were other things to do. For me, NVR and other opportunities that I’ve had a hard time letting go of, there’s something other whys that are lurking underneath the surface.

I haven’t talked to you about this but I’ve talked to other people in my life about it. There’s a willing arrogance to think that you’re going to be as good or better off without this place. You have to confront that. What I mean is NVR paid me a lot of money. You must have insane confidence or arrogance in yourself if you’re going to leave that opportunity and do something else. It’s why many people stay.

In our last episode, we talked about the golden handcuffs you had. Nobody can figure out why you left so much money on the table. It’s because you’re like, “It’s enough. I can deal with it. I believe in me.” Whenever there’s an opportunity that pays a lot of money or it strokes your ego or something, you have to be self-confident enough to leave something and that’s very hard.

What I can tell you is that I’ve struggled with it. I’m not someone who struggles with self-confidence but leaving something behind that works well or pays you well is tough. What happens is you quit and you have this huge chasm. You look back and you’re like, “That was a mistake.” For a period of time, you have to weather the storm to get through it.

A lot of the questions that we’re going to get into comes down to, is it self-confidence? Do I deserve more? Am I going to find better? What if I get out of this? In the relationship we talked about, for years, I thought about, “Should I get out of this relationship?” I was always pulled back to, “It’s pretty good. It’s not that bad. Am I going to find better?” I married into a better situation for me. I am happier. For eight years, I couldn’t figure that out. I lived in that purgatory where once I made the decision and I found the person who I was right to be with, it was different.

There’s the, “Do I have enough confidence in myself to go? Should I be loyal to something safe?” There’s a whole other side to this, Frank, where there’s overconfidence of, “What would this place do without me?” In this episode, we’re going to go through a bunch of people that have asked me for advice. I kept it and we’re going to read what they said to us. There’s a lot of, “What would this company do without me? What would my manager do without me here? How is my team going to survive without me?”

I learned this lesson the hard way because I had a little bit of this at GE. I worked 100 hours a week. I know the business inside and out. No one can do this general manager of the sales job. I know every one of the 110 sales reps. I know their customers. I’ve been to their key accounts. No one can do this job the way I can. I got these guy’s backs.

I gave my notice on a Tuesday and by Friday, the email was out saying who the new general manager of sales was. I was like, “Shit. They’re going to be okay without me.” It was this real humbling moment of, “I can give you two months’ notice if you’d like.” Ge was like, “No. We’re good. Thanks for your service.” That was it. They moved on. Everyone has this overinflated sense of how important they are to the company. The truth is, you’re not that important to your company.

That’s truthful. I remember feeling something similar. I resigned as a division manager, which was a VP-level job. I had nothing to do. I went and drove to job sites. The day I quit, I got a coffee from Starbucks and I drove to job sites. I drove around and it was early. I remember watching a construction happen. There was a heater in the house and heating the house. I was like, “Nothing changed. I didn’t work there anymore.” It kept on moving.

Your manager is always going to look out for themselves first. No one is paying attention to your career except you. Click To Tweet

Frank has built an incredible company. Cava Companies is an incredible company. If Frank shut it down tomorrow, someone else would be buying those houses, renovating them, flipping them, and renting them. Life will move on in Richmond without Frank immediately starting tomorrow if you shut it all down. A good thing that I like to tell myself all the time is to remind myself that in the scheme of things, I’m not important. I do have a huge ego and it does tend to get ahead of itself. I have to remind myself of that stuff all the time. I’m like, “If you quit, someone else will fill in that gap and the world will keep moving and no one will remember you even did it in the first place.”

Free market capitalism makes it. Gaps are filled quickly. There is a competitor who we’re meeting for a deal who would beat us for a deal if we weren’t doing it. You’re being too self-important if you think anybody’s going to remember any of this. There are people who have done many things for history that are completely and forgotten about. What we’re doing is completely irrelevant. If you keep that mind frame, that helps set this. There’s a balance, too.

One of the questions we’re going to get to is an older person who’s only got a handful of years until they retire. Where are you in your career? Do you want to take on this risk? Another example is have you properly saved? When an opportunity comes by and if it doesn’t work out and you have to take a step back in your career later, are you positioned where you can make a change to try something? There’s not a right answer.

Nassim Taleb, in one of his books, talked about if on September 10, 2001, the FAA had mandated that every commercial airline had to have a tamper-proof door. 9/11 doesn’t happen. We’d never know about it. It goes away. It’s something that has gone from one of the more traumatic moments in US history to it doesn’t exist. We tend to undervalue the importance of those things because we don’t know what happened. It’s all part of that. We’re making ourselves too important and this is a sentinel event where it isn’t.

I’ll have one other thing. I was 28 when I joined NVR as a region manager. I’m an executive and young. I was still doe-eyed and still into the whole concept of team, loyalty, and us versus them. Early in my career, the CEO of NVR had an analytic and objective mindset. He said it in multiple meetings with executives. He never said it around the rank and file. We were talking about morale, loyalty, retention, and all these things. The thing that he would say that always was jarring to me is, “The company and the employee break even on the 15th of every month.”

NVR only paid once a month. On the 15th, you get your paycheck. In essence, what he was saying was, “We pay people to do their job and do it well. You don’t build a pile of chips as you do in a poker table that you can call on. You have to keep performing great every month or we find someone else to do it.” That had a big impact on me. That instructed my views of loyalty and work, which is you’re never done proving yourself to a company. Vice versa, the company is never done proving itself to the employee.

If they break even on the 15th of every month when that paycheck happens, then both of them have to go prove themselves again. The company has to prove why the employee should stay there versus other options. The employee has to prove why they belong in the company. Are they as productive as someone else that the company could pay?

Without further ado, let’s get into some of these comments that I have received. Many of which I’ve responded to already but they were interesting to go through. This is a person who sent me a message on LinkedIn, “I am working in a toxic environment. I’m starting to look around for a new job. My team is the biggest thing holding me back. I feel like I would be abandoning them if I were to leave as many have told me that I am the only reason they are sticking around.”

This person clearly has the guilt of abandoning their team as a manager because there are negative forces. This person is the human shield. There are a-holes above her. She likes the people beneath her. She feels like she is a shield from this toxic environment that everyone is working in. As you read this, Frankie, what thoughts does it bring to your mind?

I go in a completely different direction with it when I read this. The person thinks, “As many have told me, I’m the only reason they’re sticking around.” One of the exercises that I regularly put my staff through is when somebody communicates something, I ask the group to restate it. We did training on the critical path. It’s pretty cut and dry. There are three main drivers of a critical path. I asked the team to restate it and they only got 2 out of the 3, which is fascinating. As they talked about the importance of it, it was quite different from what the construction manager had said. I speak construction well enough to know what those things are and relate them but other people in the company don’t. Why do I use that example? Quite simply, for this.

Everyone has their own narrative. This person who’s saying, “I’m here because I’m the only reason people are sticking around.” Maybe it’s true but maybe it isn’t. Maybe that’s the one thing you’ve decided to listen to or that’s the one thing you’re retaining because it makes you feel better. What I will tell you is that human beings are resilient. If you are staying for that reason, you’re doing a disservice to yourself. If you do go, like the example that you and I both use, we left big companies and you’re replaced immediately, someone is going to step into that role. It might be that one of the people who’s happy to have you around gets tasked to be a leader and they’re in a better spot. It boils down to an excuse.

Let’s say it’s truly a toxic environment. I have no reason to do anything but take this person at face value. I trust her. If you’re working in a toxic environment and you have no control over the people over you, they’re bad people and it doesn’t look like that’s going to change anytime soon, are you culpable for that toxic environment by staying, enabling it, and being a manager in that environment? When I look at that, by staying, you’re feeding it. You’re letting it succeed. By holding it up, by being a stanchion, by being a support column for a building like that, you’re keeping it up. Your job for people by letting it fail and leaving. If you’re the only reason your team is staying and if you leave and they all find something better, at some point, the people that are jerks above you will get such bad results that they’re exposed and either have to change or they’re replaced.

In the famous words of John McClane from Die Hard, “You’re being part of the problem. Start being part of the solution and put the other guy back on the phone.” It’s part of it. You’re perpetuating what’s happening.

Frank, is Die Hard a Christmas movie?

It’s a four-season movie.

Action movie or Christmas movie, which would you choose?

Both.

Choose one.

Action.

Christmas movie. I only watch it around Christmas time. I wouldn’t watch that movie in July. I feel like that is a Christmas movie.

It’s never a bad time for Die Hard.

It’s a fantastic movie. We should do an episode on John McClane. We should talk about him.

“Come to the Coast. Have a few laughs.”

If you have that guilt of abandoning your team, think about the fact that if it’s that bad there, your team is going to ultimately either rise when you leave or they’re going to find something better. If it’s that bad, you’re not helping them by protecting them a little longer to stay in a crappy environment.

LMSM 46 | Business Loyalty

Business Loyalty: You want to be part of a company that looks at things in a strategic manner and values the individual, not just making blanket moves.

 

I want to say one more thing before we move into something different. Let’s say you’re abandoning your team and then you find a better place to be. I have a small business. Almost every time I hire someone, they pick someone from their last job and bring them with them. It happens a ton. Seventy percent of the people who work here have relationships with somebody else who works here. Referrals are our number one method of recruiting.

If you’re the manager, you find a better opportunity, and you go there, as long as you don’t have a non-compete where you can poach people, if you find a better opportunity, it’s probably a better opportunity for others. By taking that first step, you might be able to do an even better service to these people by reaching back. What you’re going to notice is there’s been a reshuffling of the deck of the place you left. Some of the people are happier. Some of the people are in the same spot. Some of the people may have already left or are worse. Some of the people are going to say, “I got promoted. I’m not going to leave.” A couple of people might come with you. That’s real.

I love all of that. A theme that’s strongly going to go through this is work. The definition of work is trading your hours for money. You can’t get that mixed up with other things that you do. This whole concept of abandoning anything, if you look at it objectively, it doesn’t make sense.

The next one we’re getting in has the guilt of abandoning a manager. A lot of the themes are the same.

This next person said, “Our company got a new vice president and the culture has completely changed. This guy is an awful person and we’ve been losing people faster than we can hire. My manager is great and has always been loyal to me but he has no influence over the VP and feels like his job is now at risk. I have an opportunity to leave for a competitor but I would be leaving my manager in a terrible situation that would only get worse if I left.”

This one is a little different. This is a manager who is not feeling the guilt of abandoning their team so much as the guilt of abandoning a manager that they like who is caught up in the middle of this, a manager who finds themselves working for a new vice president who is terrible and doesn’t like them. It sounds to me that this person’s manager is probably on the outs. Their worry is by leaving, their performance would get worse and that would be the final nail in the coffin that would get their manager fired. They feel guilty about abandoning their manager and leaving them in a bad place because their managers have always been good for them.

I heard a story years ago. Bill Parcells was Bill Belichick’s boss at one point. Bill Parcells has won two Super Bowls with the Giants. His star quarterback, the first time, was Phil Simms. Phil Simms had a son who is now on television, Chris Simms. He was the number one prospect in America. Back when they had newspapers, he was USA TODAY Player of the Year and Gatorade Player of the Year. He could have gone anywhere he wanted to go.

His parents, especially his mother, were insanely protective and getting in the midst of this. What Bill Parcells said was, “I’m going to give you one piece of advice and it’s the last piece of advice I’m going to give you.” She goes, “We’ll do whatever you say.” He goes, “I don’t think you’re going to but I’m going to tell you anyway. Cut the cord. Let the kid make a decision on his own.” If you’ve got a talented manager and you’re staying there because you think that manager is going to fall down, he cut the cord. If they’re that strong of a manager, they’re going to figure out who to promote from within, how to do certain things.

I disagree with that because if they’re a good manager, they’re going to make it. If they’re a bad manager, they’re not. If you do have a friendship with someone, you can be strategic in how you talk about it, “I’m going to pull you in confidence. I’m not seeing my future here as much. I’m fearful that I’m going to let you down.” You’re going to have those discussions closed door. Ultimately, you have to make a decision that’s best for you.

It’s always got to be what’s best for you. I’ve talked in here about my managers at GE that we had a reorganization. They found themselves out. McCauley and I, a friend of mine, we’re both managers. We had to make a decision quickly. Were we going to be loyal and sulk and feel bad or are we going to go meet the new decision-makers and make an impression on them? As much as that sucked because those managers were great to us, they no longer had any influence. The truth is, when I looked back on it, they weren’t thinking about us at that moment. They had to think about their career.

They couldn’t help us knowing they were on the outs. It’s not like they were like, “We’re getting fired. Let’s go out of our way to make sure Ian is taken care of.” There was none of that. It was like, “What do I do next? What’s happening?” I had to go and fend for myself. Although I felt a little bit of guilt, when I look back on it, it was completely misplaced and it made no sense because your manager is always going to look out for themselves first. No one’s paying attention to your career except you for your whole career. If a manager is involved and cares about your career, it’s because it’s good for them at the moment. Everyone has to look out for themselves first. You have to. That’s a fact.

I’m trying to think of the right example and I can’t come to terms with it better or come up with it but I’ll skirt around it. It feels like Costanza. It’s like something’s burning around you. Costanza, in an episode, goes to his girlfriend’s party. There’s a house burning down that his girlfriend owns. While the house is still burning, he looks at her and says, “Did you remember to give me the change from dinner?” It’s selfish. That’s what it comes down to. You’ve got to think about yourself.

Here’s one that might resonate with people because there’s a lot of this going down in 2020 with COVID, “My company is undergoing dramatic financial issues. Management cut everyone’s salary by 10%. Management is adamant that this difficult time is for staff to give back to the company and make sacrifices for the whole. All my friends and family say I should run and find a new job ASAP. I feel hesitant because I did like my job before this happened. It felt like I had a career trajectory at this company. I’m also struggling to determine if I owe it to the company to stay, put in the work, and help them weather the storm, or am I a traitor if I leave?”

This theme is how much do you owe a company when it goes through hard times and when it goes through something difficult like a recession, a new competitor in a market, a COVID event that impacts them? Frank, this one needs caveats. This one needs several follow-up questions that I would have for this before I would completely weigh in because my answer would be it depends. What it depends on is, is the financial issue temporary in a great company or is it a canary in a coal mine that your company might not be as good as you thought it was?

Show up in a job interview as someone excited to work and not just for a bigger paycheck. Click To Tweet

The two that I will use is GE was fumbling the last couple of years financially I was there and you felt the pressure within the company that Jack Welch is no longer here and our new CEO is a dumb ass. Jeff Immelt was a bad CEO. It took him fifteen years to figure it out but that book has been written. I don’t see this as temporary. I see this as a systemic problem that the place is going to stay broken. In 2008, 2009 when the financial crisis hit, it sucked working at NVR but it sucked working everywhere. Everyone was taking pay cuts. Bonuses were slashed. Stock options were all underwater. It wasn’t worth anything.

Everyone from the frontlines all the way up to executives made less money for 3 or 4 years. I saw that as like, “This is temporary. Everyone is going through it.” I work at a phenomenal company that’s going through an extraordinary event. For me, I would rather be loyal to a company and grind my way through that recession because I knew that the company would be fine later.

I want to reread part of the first sentence, “The company is undergoing dramatic financial issues. Management cut everyone’s salary by 10%.” As a management credo, axiom, or guiding principle, that’s not how I look at it. There’s nothing good in cutting individual people’s salaries by a certain percentage. The bonus is different. The bonus is earned based on profitability. You’re in lockstep with that with the company.

If you have a good enough bonus plan, you don’t need to even announce anything. The recession means that you didn’t deliver as much as you were going to and we’re not paying bonuses.

From 2007 through 2012, I worked for the same company as you for part of that. I never went to my boss and said, “I’m unclear. What are you doing for my bonus?” NVR, in the downturn, went from 6,300 employees to 2,900. They went from 60-something divisions to 29 divisions. When COVID hit, I went from 24 employees to 17. I had one guy who worked here who asked me for a raise a week after I fired 27% of my staff. He’s tone-deaf.

What I did is I picked the people who I thought gave us the best possible chance to survive in the downturn. Instead of potentially limiting everybody, I didn’t do it that way. I looked at it from a systemic standpoint of, “It’s a bad market. I want the absolute best people. We need to get leaner and this is how we’re going to do it.”

From a leadership standpoint, I don’t believe in a slow bleed. I’ve seen the city of Richmond, municipalities, hotels, people with bosses who don’t have the critical thinking skill or the courage to make a big reduction do a small bleed like this. You’ve never seen The Wall Street Journal or Amazon cutting salaries by 10%. You’ll see another company cutting staff or they’ll have seasonal. To me, the fact that everyone has being cut across the board by 10% is not good leadership.

That’s weak leadership. To me, that is the sign of a company that doesn’t have a meritocracy. The company sees every person as a commodity. They all deliver the same amount no matter what. If you said, “We’re cutting costs 10%. There are twenty people on my team and two got fired.” That’s not a reason to leave. That’s calling the weak players off the team that aren’t good enough. If you’re having to cut everyone 10%, that means your volume is still the same. You still have the same workload. You’re asking everyone to work less. If you have the same workload, how extraordinary are your issues?

Your management team is inappropriately focused. What we did in COVID is we did a few things. We fired a bunch of people because we needed to because we were scared. The second thing we did concurrently with that, those conversations happen on a Friday morning and by 11:00, I had the 7 or 8 leaders of the entire company on the phone and we went through the P&L. We said, “Where can we cut?” I stayed on with the bookkeeping department and said, “Where are our receivables? When is money coming in?” That’s a proactive approach.

When we re-hired, we didn’t know if this was a false start or not, we hired people on a lower basis with more incentive-based upon commission because we’re thinking proactively. In my opinion, that’s a company you want to be a part of because they’re looking at things in a strategic manner and they’re valuing the individual not just making a blanket move, which doesn’t call you out as an individual.

Ultimately, is this temporary? Do I work for an extraordinary company that’s going through a tough market? Do I work for a tough company that is not going to get better? If you feel like this is a crack in the armor and you see that this company is not run well and now it’s getting exposed, I would leave. I don’t think you’re a traitor. You’re smart by going and finding a better opportunity that gives your career a little bit better growth.

The next one, “I’ve been working at my company for over twelve months and generally enjoy my job. However, the organization has lost a major contract. Rumors are rife that other large contracts will be pulled as well. I want to start a job search in case things do get worse. I’m worried this will make me look flaky to potential employers, particularly when expressing why I’ll leave my job. I’m concerned that by telling the truth and saying I’m worried about my job security, this will look like I am disloyal to my employer for jumping ship before it potentially sinks.” This question that this person is asking, “Will I be punished by job seekers for not appearing loyal?”

It depends on how you describe it. If you describe it as, “I’m seeing the handwriting on the wall at my current job. I’m a staff person but I’m hearing management use symbols or language that leads me to believe that we’re having problems.” That’s a high level of critical thinking and I reward that as a hiring manager. It comes down to how do you talk about it? What do you do? Are you discreet or are you not? It very much comes down to how you execute and communicate what’s happening.

That’s right. This concern is way overblown. One, you’re giving away too much thought to what a hiring manager is thinking about when they’re with you. They’re happy that you decided to come to the interview. By nature, when I’m hiring, I’m looking for people who are a little bit unhappy in their situation because if not, they wouldn’t be interviewing with me. When I have an open position, I’m glad that your company has not treated you well or you’re concerned about things because that means I have an opportunity to hire you away.

I can’t remember ever sitting with someone and thinking, “You’re disloyal for interviewing with me.” I’ve never thought of that. There’s a reason why you’re talking to me, you either don’t like your manager, you don’t like your job, you’re not being paid enough, and you’re worried about your company’s stability. There’s a reason you’re in front of me in the first place. It’s not like I’m great that I pulled you in. There’s something wrong. I’m normally getting to it. I’m normally going to ask you a question, like, “Why are you leaving? Why are you considering leaving? Why did you leave the last company?” If you explain it, be honest, “I’m worried about my company’s financial stability, to be frank.”

The question falls into arrogance again. It comes down to, how can anyone think of things otherwise who are different than me? The answer is people do, especially hiring managers. I hire a few people who are in destitute situations. I don’t hire people who don’t have homes to my knowledge. I mostly hire people who already have a different job. They’re slightly unhappy but performing well there. That’s part of life. I know right now that if I become a shittier employer and I don’t treat people well, they’re going to leave. That’s how this whole thing works. There’s a give and take to all of it.

If you’re sitting in front of me and you’re like, “I work at a good company but I don’t like where they’re going morally. I don’t like where they’re going structurally. They made a couple of changes. We used to provide this and now we provide that. I don’t like it. I don’t believe in it. I don’t think it has sustainability.” You’re a dynamic thinker. Tell me about your industry. We’re off of your loyalty and we’re on to your critical thinking skills, which is what you want me to analyze. You want me to understand how you are thinking. In my head, I’m thinking, “This person here can do these things for us.” You’re winning the interview.

“Nothing’s changed with the company. I’ve changed. I’m no longer stretching there. I’ve achieved everything I possibly can at this company and I’m bored. I need a new challenge. I’m excited about a new challenge. My company hasn’t changed at all and that’s okay. I have no bad feelings about them. They’re not for me anymore.”

Here’s my follow-up, what have you done to change? “I’ve read a bunch of books. I’ve gone to some seminars.” You’re now talking about you, development, growth. We all want people who are pushing themselves.

Far from being punished for not appearing loyal, there’s a way you can use this to appeal to the ego of the hiring manager you’re talking about, “My company doesn’t have what your company has to give. Here’s what I’ve done in my research that tells me that this is a better next career stop for me, your financial discipline, your growth is better, you promote from within more, and the tools that you give people to do their jobs. I’ve checked in on a few sources and they’ve told me about the great management here. I don’t have any of those things where I’m at. I would like to get to a better opportunity, which is your company.” What hiring manager doesn’t want to hear that you did that homework and that you want to come work for the company? I want to talk to people that are excited to come work for my company and not just a bigger paycheck.

The next one, “My friend interviewed at a potential employer. The feedback was good. He has heard from his recruiter that they are going to make an offer. However, the recruiter also said that the employer asked my friend to ‘show loyalty’ and stop interviewing for other roles while they put the offer package together. Is it reasonable for a company to demand something like this?” The question here is, “Should I stop my job search once a company says they’re putting an offer together for me?”

The first thing I think about here is the element of time. How much time has gone by? Is it days, maybe a week, or ten days? We’re a small company. From an interview to a job offer, if we’re going to offer you a job, usually you get a call from us within two days. Within two days, we say, “We’re offering you a job. You’ll have the paperwork by this date.”

Unless it’s a new position, we’ve got most of the paperwork ready to go and we can turn it quick or I might call you up and say, “So and so is out of town. They have to draft the offer. It’s going to be in your inbox by this particular day. We are offering you a job. Everything we talked about, I’d prefer you not take something else or call me first because we do want you. It’s just I got a paperwork snag.” Shy of that, if you found the right job, it makes sense to pause. If they’re saying that it’s been eight weeks since you’ve interviewed and they can’t get the paperwork together, to me, that does not seem like you should wait.

I look at it as if you’re dating and you’ve got two girls on the hook that you’re going after. One is your favorite and if the favorite says, “I’m pretty sure I can go on a date with you on Saturday,” I would probably wait and put on hold the second. If the second said, “Maybe,” I would keep pursuing the first because that’s the one I want anyway. To me, it’s a little bit more about, is this the company you want based on your research? If it is and they ask you, “Chill, I’m looking for something else.” I’d chill until I got an offer to see what it was. If it was my backup company that I was going after and they asked me to do that but there was a company I’d rather work with, I’d keep pursuing that. I wouldn’t stop because they asked me to do it. To me, it depends on how much you want that opportunity and how excited you are about it.

LMSM 46 | Business Loyalty

Business Loyalty: If someone runs an ad and they can’t get you something in a reasonable amount of time, or they can’t explain to you why there’s a delay, that’s a red flag.

 

There are two sides to the coin here. When I was graduating from college, I wanted the NVR job. I had met NVR and they moved at a glacial pace. It was freaking slow. I remember I called Joe Madigan up and I said, “Since I’ve met you, I’ve gotten eight job offers for companies that I met at or after meeting you. You guys haven’t even gotten me into an interview yet. Are you going to interview me? Should I take one of these other opportunities?” He’s like, “No.” He gave me some stories. Ultimately, that was the job I took because I trusted it. There was an anomaly and delay.

I worked as a consultant and I talk about it a lot. I see companies that are not organized. If there’s a company that’s not organized that can’t get your job offer together, they’re like, “We’re going to give this to you.” That’s why I said eight weeks, that’s an exaggeration. If someone runs an ad and comes in and you meet with them and they can’t get you something in a reasonable amount of time or they can’t explain to you why there’s a delay, that’s a red flag to me. That’s when I keep shopping because maybe this is a blessing in disguise. If it’s the girl of your choice and the girl is showing interest, it’s prudent to wait.

Well said. The next one, “My company paid for my MBA and has genuinely been good to me but I felt trapped and stagnant here and don’t see it getting any better. I do feel a sense of loyalty because of the investments that the company made in me. I’ve approached my manager about future opportunities but keep getting the ‘be patient’ advice. He is stalling because our company is not growing.” The company invested in you significantly, an MBA or an executive MBA. It could be $100,000 to $200,000. After they made that investment in you, how long should you feel like you need to stay to give them a return on investment?

A well-run company is going to have this papered. If we pay for your MBA, you need to work here for X number of years after that. There needs to be some documentation. I immediately only had this question thought of this. In Seinfeld, the character of Elaine is dating this guy who is about to become a doctor and she’s excited because he’s about to become a doctor. She doesn’t want to date him now but she wants to date a doctor. The doctor then becomes a doctor. It’s official. He walks in and he breaks up with her and she’s like, “Why are you breaking up with me?” He’s like, “I wasn’t a doctor. Now that I’m a doctor, the dating pool is going to get so much better and I need to break up with you because I’m now a doctor.” It depends on what side of the fulcrum you’re on.

Part of what happens in getting an MBA is you become a different person. You become more educated. You become more exposed. Hopefully, the company is smart enough to realize that they need to give you more to do. One of my uncles went through this. He worked for a company up in New England and they paid for his law school. When he was through, he stuck around for a while because of loyalty but then he’s like, “I got to quit.” They said, “We thought you’d quit by now.” This is part of it. I don’t know if there’s a right answer there, Ian. Ultimately, it comes back to you again on what’s right for you.

You lead with this pretty well though. As an executive, if I’m going to pay for your MBA, I’m expecting a return. $100,000 on top of whatever I’m paying you, it’s a lot of money.

Ian, you’re paying for $100,000 and your salary and you’re probably not giving me 100% effort at work because of the fact that you’re spending a lot of your effort and time getting your MBA, your law degree, or whatever. There are some sunk costs from the employer standpoint too because you’re not producing. You’re not 100% focused on work.

I wouldn’t do it if I thought you were going to mail it in for the next two years. I’m still expecting you to produce by 90%, which is better than someone I could find in the street. I’m thinking, “This locks you in for two more years. I get two more years of good work from an employee that I like.” I’m also thinking, “I need to promote you rather quickly after you get your MBA or you’re going to be gone.”

I would not invest in something that would make you dramatically more marketable without having a position pigeonholed for you. I would be thinking, “Once he has the MBA, that’s when we go from vice president to managing director or something bigger, something with more stock options.” I would be thinking that or I would be thinking, “I’m going to pay for this. If you leave within three years of getting the MBA and us spending the money, you pay me back on some kind of a waterfall.”

What I would say is if you’re not happy and your company paid for the MBA and they didn’t pay for this in a way that keeps you there, that gives you some non-compete or something else that prevents you from leaving. You’re not happy and now you have this new education and you’re still not in a bigger job and that MBA could get you a much better job, leave. That’s on your company for spending that money, not papering it, and not giving you something bigger. They knew your aspirations were big. If you were willing to give your weekends and nights for two years to get more education, you’re not a person who’s okay with staying in the job you’re in. If they can’t give you something bigger, to me, that’s on them.

A good friend of mine left GE within months of GE paying for him to get his MBA at Notre Dame. It was the smartest move. They had no teeth. He got them money and they didn’t give him a bigger opportunity. I got promoted over him into a bigger job and he didn’t get it. He left, went to a company, and in the first year, made triple what GE would have paid him. It was a smart move. It would have been dumb for him to stick around for whatever time he thought would give them a return on the MBA. That was on GE. That wasn’t on him to stick around. They spent that money, they took that risk, and it was up to them to keep him afterward.

Let’s say you’re a business owner and you’re listening to this. What can you do if you give someone an incentive, if you bring someone in on a lower-paying job, or something that’s a high turnover type of thing? What you can do is you can put things in place ahead of time, “I’m going to pay for your MBA. This is the waterfall schedule and you have to pay it back. However, within six months of finishing your MBA, if you complete these tasks, you’ll be promoted to this role.” You do it all proactively. The person knows what they’re chasing or what they’re going after. It takes a little bit of organization on your part.

If you can lay those things out, then it’s like, “I can do this and I can achieve these hurdles and benchmarks. I worked my ass off for this. Here’s the reward.” If you work in a small company like mine, you can negotiate some of that stuff. I would ask, “What’s important to you?” I don’t do an MBA reward program but we do other things. I get buy-in from the employee of, “What do you want to accomplish? What would you like the reward to be?” That way, there’s a hurdle in place that you can attain, you set, and then you’re rewarded for it.

Why would your employees need an MBA when you pay for them to go through Ian Matthews leadership training from 5on4.group? Why would they possibly need an MBA after that amazing world-class leadership training? The next one is a bit strange and this one took us a while to get our arms wrapped around, “My manager trained me for my position. He has been an incredible ally and friend. He’s not been treated well by our company. He has a new boss and that new boss loads him undeservedly. They canceled a raise that he was supposed to get and they are recruiting someone to come in and replace him. I’ve been nervous and passively networking and seeing what’s out there. I know my manager is actively hunting for a job. It turns out, we applied for the same job and got a first screen call. It looks like I’m the one that they want to go further with and not my manager. He did not get a callback and I did.”

His concern is, “The way I see it, I have three options. I can think of myself first. Go for the interview and try to get the job. Two, I could vouch for my manager and exit the interview process and let him try to get the job. I could try for a difficult you-should-hire-both-of-us conversation rather than going for it myself.”

You owe it to yourself and your family to pursue the best available career option for you. Click To Tweet

He’s asking me, “What should I do?” The general theme here is how do you handle interviewing for the same job that a friend is interviewing for? This has happened to me before in college when I interviewed for the same entry-level job. It’s happened to me a couple of times at GE when another manager was interviewing for a job. This is a bit of a weird one.

Let’s use the dating example again. You’re a girl and you have a girlfriend and you both want to go out with the same guy and that guy likes you. If you come over to that guy and say, “You shouldn’t date me. You should date my friend.” It’s only going to make that guy want you more. He’s not going to be like, “Good. Thanks for the suggestion. Let me go date your friend.” It’s going to make him want to pursue you more.

You’re only going to be seen as weird by selling her more or saying, “Why don’t you go out with both of us at the same time?” It’s the same thing with a job. Go get the job. Tell your boss, who’s your friend, “I’m also interviewing for that job.” Don’t be soft about this. Let the best man win and be honest, “Yes, they called me back. I’m going to a second interview. They didn’t call you back. I’m sorry to hear that.” If it bothers you that much, don’t apply for the job. If it’s a well-paying solid job, what the hell? Go get it. That’s free-market capitalism.

I don’t have a ton to add here. I’ve been in the same situation. You take the opportunity to win the job. It’s important for you to talk to your friend. If you both meet a company at a job fair, for example, and you both apply, no harm, no foul. If your friend tells you about it and then you apply also and they pick you over that person, that’s a different scenario. To me, I would say, “You’re applying for that job. Could I apply for that job? Do you care?” Think about these things ahead of time.

When Nicole and I apply at the outback, the guy that came out and interviewed us, he’s like, “An FYI, it’s dumb to come to a job interview with your buddy. You should have come here individually because what if I only had one slot? Maybe I won’t hire either of you.” We’re like, “We think you should hire both of us because we’re great.” We didn’t say that but that’s what we thought in the car. Eight weeks go by and the guy comes up to us.

Were you guys like the two in Step Brothers with the tuxedos on and everybody went together at the same time for an outback job?

No. I’ve never seen that movie. A couple of months later, he comes up to us and he goes, “I told you guys not to come in an interview together. If you guys ever want to work anywhere together again, I’ll call that manager for you and tell him, ‘Hire both of them.’” These things tend to work out. When I was in college, we’ve been to a bunch of companies at job fairs. I would go with my buddies to job interviews. Sometimes, one of us will get an offer and the other one wouldn’t. It all comes down to personal preference. Don’t overthink this. Get your foot in the door and then things tend to work out.

Perfectly said. The next one is a little bit about loyalty when you are not actively looking for a job and someone pursues you. “I have an opportunity to apply for an executive management position. I have a good friend who recommended me to her manager and I was not approaching this company in the first place. They’ve come to me. It’s a big job and it’s scary and exciting at the same time. It is 100% remote and I have to work in an office every day and the pay would be much better.

Here’s my dilemma. I am not unhappy in my role, maybe a little bored. I’m still doing the same job I was before. My manager manages the staff well and gives us time off. Our salary and reviews are fair. They have been good to me. My people-pleasing thing is making me feel bad for considering leaving. Plus, we are still busy. I know that leaving would not be a good thing for them. I had my review and it was wonderful. I got a high-level rating and a nice raise. Here comes the guilt. I have never left a company before when I was okay being there. I’ve only left when I’ve been unhappy. I only have six more years left to work before I retire and I’m not sure if moving would be the right direction to go in.” The question here is, is it okay to leave a company when you are currently happy with your job?

I’m going to let you go first because I’m not paying attention to any of that other stuff. I’m paying attention to something else.

You got one thing on here that I know that you’re locked in on. For me, whether you are looking for a job or not looking for a job, you owe it to yourself and your family to pursue the best available option for you. If it falls out of the sky and lands on your face as it did for this woman, that’s great. You got a little bit lucky. Because you’re happy, it doesn’t mean you can’t be happier. That’s a trade-off that this person isn’t thinking about. Frankie, I don’t know what you think about this but I take this a little bit as the confidence thing again, “I’m happy. Things are okay. They treat me okay.”

Do you want to be okay or do you want to be fantastic? How much do you believe in your talent and your abilities? Do you want something amazing or do you want okay? If your manager is that cool and you are that good with them and you share what you could be making how good the opportunity is with them, if they’re the person you think they are, they’re going to say, “Take that job. That’s great. I’m happy for you.” If they aren’t and if they’re like, “How could you do this to me?” Are they your friend or are they selfishly being nice to you because it was in their best interest?

This depends. If you’re 25, you should look into this other career move and potentially make a move based on what I hear. The thing that I hear is, “I have six more years to work before I retire.” I would look at that opportunity in two different ways. Working for six more years, you have a finite period of time because of your age. You can’t discriminate. At the same time, people consider things. They weigh options.

If you are a little bit older and you have some time to write it out until you’re going to retire, are you going to make it six years at this new place? Are you going to have to look for other employment for a couple of years? If you’re in a stable situation and you’re trading that for less stable, make a little bit more money and you might be a little bit happier. At the same time, it might backfire. The other side of it is, what if this is a better opportunity? What if this other company will give you more money? What if retirement is you have banked money and then you need to live off of it?

My mother-in-law did this. She thought she had like 6 to 8 years left. She went to a better company that paid her more money. That was an opportunity that allowed her to work from home. She banked more money and she worked there longer than she initially thought she was going to. When she retired, she had more money than she thought she was going to because it was a better opportunity. You have to weigh all parts of this. You have to be truthful about where you are in your job arc. It’s like, “Am I in the beginning and I have more time to make it up? Am I towards the end and do I need to be a little bit more strategic and have some strategy around? I need to make sure I have enough.”

Out of all the things people say when they retire, one thing that is rarely spoken is well, “I finished with a little more than I needed.”

It’s never heard.

You don’t know how long you’re going to live. You don’t know what things are going to come up in your life. The more you can put into a nest egg when you retire, the better, always. No one ever immediately says, “That should be enough.” Everyone’s always a little like, “Am I too early?” It doesn’t matter whether you’re 75, 65, or 41. You’re always worried. “Is this enough for me to go alone and live off of what I have?” Yes, you need to consider some of those things. Also, if something good comes along your way, you’d be foolish not to look into it seriously.

I’m a big believer in truth, radical honesty, radical candor, or whatever. If I’m six years away from retirement and I’m sitting in front of somebody, I would ask those questions. It’s like, “I’m 59 years old. I’m going to retire at 65. This is a great opportunity. I would like to understand the growth trajectory of this company. What do you think is happening in the next six years? Where are you going? Is there going to be a need for me?” These are real questions that you can ask.

If you’re with an obtuse manager, they’re going to look at that and say, “What a selfish prick.” If you’re with the right person and this is the right opportunity, they’re going to talk to you and say, “We’ve got other people who are older who excel for these reasons.” My best salesman is over the age of 60. He’s incredible. He doesn’t want to retire anytime soon. We talked about different planning events in his life. Owning it, talking about it, and making a good critical decision is the right move. You don’t want to have diarrhea of the mouth. If you’re honest with your situation, you’re showing critical thinking skills, planning and forward-looking, a good manager is going to look at that and say, “That’s the person I want on my team. This is a forward-thinking person.”

Business Loyalty: Unless they’re just in a complete restructure, the last thing a new manager wants to do is start with an all-new staff. It’s critical for a new manager to have people they can rely on.

 

Let’s finish this episode off with a couple of open-ended questions. The first question I’ve got is, when is it smart to be loyal?

This is going to sound confusing. It’s always smart to be loyal. I don’t think loyalty has ever been a disservice to me. When does it make sense to make a change? Change is different from loyalty. I’m still loyal to NVR. It’s a great place. It taught me incredible things. The time for me was right to go. I still support them. If I see something and can push business their way, I do. For me, the time was right to be loyal and to make a move that benefited me. I would say that fulcrum is, are you no longer best suited staying there? When that changes, the time to make the decision for me has come.

The question is a little bit loaded when you say, “When is it smart to be loyal?” If you’re asking when it’s smart to be loyal, you don’t need to be loyal when everything is amazing. If you’re paying me a ton, my manager is awesome, the company is growing, and we’re having a blast, no one is ever like, “Are you going to be loyal?” That’s not loyalty. That’s selfishness. I’m sticking around because it’s amazing right now.

The only time you have to be loyal is when times get a little tough, when things are a little dicey, when things aren’t going your way after you got passed over for a promotion. Maybe when you got a raise that you weren’t terribly happy with or when you saw someone get fired in your office that you thought was a good person. Loyalty only shows when you’re tested, when you’re not 100% happy with how things are going to the company. My answer there would be, it’s smart to be loyal when that stuff happens.

If you still believe in the leadership of the company, the people that are running the place, the mission, if you believe that the company has long-term value, then it’s smart to be loyal. What you’re answering there is, when is it smart to think about the long term for yourself? For me, when I’ve been loyal, when I’ve thought about it, it’s been times where Ian hasn’t been getting everything he wanted out of his career from a company. I knew long-term sticking it out, I would get more than everything I needed.

Maybe I kept working for a shitty boss at a great company but I knew he wouldn’t last. I knew I could outlast him. I’m going to stick around because of the company. Is it worth it to me to stick around and work for this guy even though I know he’s terrible? He won’t make it and I’m still going to get paid a lot in the long term more than if I could leave and go somewhere else and do something different. It’s smart to be loyal when it’s in your best interest in the long term. You’re only tested on loyalty when things aren’t going well. No one’s tested on loyalty when everything’s perfect.

Is loyalty always rewarded?

Loyalty is not always rewarded, 100% not. What you have to understand in businesses is managers get changed out, owners get changed out, debt gets called, companies get into trouble. Companies get purchased, acquired, reorganized, or faces change. Everything can change. When that happens, the only loyalty that works is the loyalty between you and maybe someone else that trusted you that you worked with. If that person is out, there’s no loyalty of the person replacing that. In fact, they’re going to put people in positions that were loyal to them wherever they came from. If that was from a different country, so be it. You’re starting over from scratch every time you get a new manager that comes in.

Is it always rewarded? No. Is it rewarded often? I think so. If all things are considered, the management stays pretty stable in your company and it’s a smart company that’s growing. I know I’ve rewarded loyalty. I’ve promoted people that have been with me through some tough times. Here’s a different way of saying it, Frank. When you say reward loyalty, the people who have been loyal at least to the company I was in and worked for me, their loyalty was tested in a recession. It was tested when things were tough. I got to see them work in the worst of conditions. When things got better, I knew what they were made of. It wasn’t that they were loyal to me. It was that they got to prove themselves in a crappy environment, market, or situation. When things got better and I could promote them, I wanted to because I knew how tough they were. I knew what they were made of.

You can only be in the foxhole with so many people. What it comes down to in some instances is familiarity. Could you potentially upgrade or get slightly better somewhere? Sure. What’s the brain damage to go into it? What’s the loss of continuity that you’re going to have? What are those things that you are going to have to do to deal with? Loyalty is rewarded but I don’t think loyalty is rewarded above performance. If someone is super loyal to you and your performance goes to hell in a handbasket, you’re in jeopardy no matter how close you are with someone.

However, if the person you’re close with goes away and your performance is still incredible, you will find yourself quickly rewarded. If a new manager comes in, they don’t know you from the outside. The last thing a new manager wants to do unless they’re in a complete restructure is to start with all new staff. It’s critical for a new manager to have people they can rely on. If in a couple of weeks or a couple of months you prove that you are invaluable, you will quickly earn the loyalty of a new manager because of the performance.

There’s another piece of this, Frank, that I will put back on you. Let’s say you’ve been at a company for 5 or 6 years and you feel like your company is loyal to you. The managers like you and trust you. The upside isn’t great financially. You get an opportunity to go somewhere where there’s 30%, 40%, 50% more income. You’re going to be starting all over again with all new managers that don’t know anything about you except they interviewed you.

You can go in there but you’re going to have to prove yourself. You’re going to start over from scratch. If you’re in sales, maybe you’ve got to find new customers. If you’re a manager, you got to build a new team. You don’t have any of the loyalty. You have a bunch more money. To me, the expectations are going to be 50% higher because they’re paying you 50% more. Where’s that trade-off between staying where people are loyal to you and/or leaving the company for financial upside but much more stress where you haven’t built the same loyalty for yourself?

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What’s the trade-off between financial upside and stress? There’s a sweet spot there. You need to be honest. If someone is willing to give you 50% more pay, why? Are you doing the same job? Are you taking a completely different job? What are you not asking? What’s different about the position? Is the comp uncertain? Those are things I would look at.

Here’s a great way to answer this. My brother-in-law has worked for Capital One for somewhere between 15 and 20 years. His wife, my sister-in-law, also works at Capital One. They’re prudent. They’re both in finance and accountants. They’re conservative people. They live well below their means and they can easily afford to live on one of their salaries.

He was approached by a company that is a rocket ship and it’s different from Capital One. He called me to talk about it before he accepted the job and he thought it through. What he decided was, “I’ll lose all my loyalty. I’ll lose all my continuity. We can afford to live as a family on my wife’s salary comfortably. It’s a shot that’s worth taking a chance on because it could financially change our family’s future. We could retire earlier.”

The fallback is if he lost his job, quit, or it was the wrong job, he can probably find something else to get into. He didn’t have to act in desperation. He could act in a way that was prudent because of how he set up his life. It’s an individualistic thing and you have to ask yourself that. When I have people come to me and say, “I’ve been offered X.” That conversation happens, especially in a good economy. You got to sit down and talk to people and say, “What’s the opportunity? What does it look like? What are you going to be doing differently?” These are real conversations that happened.

You’re right, the situation matters. If you’re young, if you’re in your 20s or 30s, you should be taking on more stress for more financial upside. That’s the time to do it. If you’ve got a couple of kids that went away to college and they’re now out of your house and you have to find yourself lots of free time and you have a nice little nest egg already built up, take a little chance. Take some risks. That’s okay. You built up that loyalty. If you got a toddler at home and a new baby on the way, maybe it’s not a great time to go trade financial upside for the extra stress of a new manager and no stability. Different times in your life call for different approaches to go after. You’ve got to take stock of, “When I’m not at work, what other stresses are going on in my life right now?”

Being truthful and honest in where you are is important. The last question that we want to answer before we wrap this thing up is, how do you earn a team’s loyalty as a manager? The easiest way to do this is to treat every person like a person, an individual. Understand them, know them, and treat them right. I’m getting to a point in my business where I don’t know everybody as well as I did initially. I encourage the manager to make sure they know them individually and well and can communicate with them. Treat them right, give them an opportunity, understand them, reward them, and challenge them.

Make the point crystal clear that their career is in great shape in your hands if you do that, that breeds the loyalty that you’re trying to breed. It’s not an infallible method but it’s one of those things that causes a lot of the questions that we talked about above. If you do it right, your employees are going to struggle to lead because they know that you are looking out for them, you’re treating them well, and you’re rewarding them.

An important piece here is not assuming that anyone should be loyal to you for the sake of being loyal to you. Being married nineteen years, that doesn’t mean Jenny should stay with me at the twentieth. We still have to go on dates. I still have to treat her with respect. I still have to produce. I still have to be a good person to live with. I have to earn it. If you stop earning anything, out of loyalty’s sake, it doesn’t work.

You need loyalty when things are going hard, when you can’t give everyone everything, and when the company is going through a challenge, they’ll look back and you might get a little bit of loyalty because they’ll see how you’ve behaved and what decisions you’ve made in the past when you’ve been under duress. Ultimately, you have to keep earning it. If they can find better opportunities than they can find with you, then they’re going to take it. They’re not going to be loyal to a fault for themselves.

Loyalty is something you earn all the time by treating people with respect, giving them opportunities to grow, giving them the things that are important to them in life, paying them a good income based on the market. If you do all those things, loyalty takes care of itself. You should make the experience of an employee strong that it’s self-serving for them to be loyal. They’re not loyal because they feel guilty that they want to be great to Frank or Ian. They’re loyal because it’s self-serving. To me, that’s what it should be.

The way that you’re stating this is similar to how I feel and I would summarize it like this. Loyalty is like inertia. If your inertia is going in the right direction, the loyalty is going to follow it. If you have a bad day, you get thrown off track, but you’re a good person overall and inertia is pulling you in this direction, loyalty is going to follow. Self-preservation is undefeated.

My wife has given me a list of things that I must do if she’s going to stay with me. It’s a pretty easy list. I can’t get addicted to drugs or do anything that puts our family in harm’s way. I can’t be financially risky. That doesn’t mean if my business goes belly up that she won’t stick with me. If I start gambling, if I’m abusive verbally or if I’m abusive physically, those are the things that are going to cause her to no longer be loyal to me. She told me this before we got married.

Those seem like pretty easy hurdles to cross. What I would tell you is though if you cross those hurdles, it’s pretty clear. There are probably hurdles like that with every single person who you work with that you manage. You need to understand them. A lot of people give you grace but they won’t give you grace forever.

Those are too easy and obvious. Anyone is going to leave anyone if they’re abusive physically. What goes unsaid there is if you go long enough without giving her any attention or making her feel important, she will leave you. That’s a fact. That’s the same with an employee at work. It’s easy to say, “You’re fired if you steal from me.” It’s easy for me to say, “I’ll quit here if you ever call me a son of a bitch in front of everyone.” Those are obvious and okay. The truth is most people leave when they, over time, stop feeling important and stop getting attention. People leave most companies when they feel like, “I’m insignificant here.” Loyalty comes from feeling like you’re an important part of what is going on there.

LMSM 46 | Business Loyalty

Business Loyalty: Loyalty is something you earn by treating people with respect. Give them opportunities to grow and provide them all the important things in life.

 

For sure, I use the term inertia for a reason. Inertia runs out if there isn’t gasoline in the car, if there isn’t fuel on the flame, or there isn’t wood in the fire. You need to constantly stoke it. You might have the ability without stoking it day-over-day and that will pull you along. You do need critical checkpoints. Every single person needs to feel important, needs to be heard, needs to be challenged, and needs to be feeling like they’re growing and getting better.

One of the key components of our business is I tell people all the time, “If I’ve hired you and you tell me you want to be doing the same thing five years from now, you probably don’t fit here.” I want people who want to grow, evolve, and get better. Life is growing and evolving. Death is stagnation. As the CEO of a company, it’s my desire to empower managers who empower people that continue to keep things exciting, fresh, and show growth. What does growth look like? Growth looks like something different to every person but you know what you’re doing every day is feeding something that is getting better.

I know that I would never get a job offer at Cava Companies because I want to be doing exactly what Ian Mathews does. My life is goddamn good. I want to be doing the same shit I’m doing now. Maybe with one last episode or one of those episodes. Other than that, I want to be doing exactly what I’m doing now. Frankie, it’s good hanging out with you.

Ian, it’s always a pleasure.

See you.

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