The most valuable asset in a business?
People.
When you understand your team’s value…
You can make miracles happen at work.
My guest, Dave Bookbinder, is a valuation expert who believes in the impact of human capital.
He’s here to talk about the valuation of people, as well as:
-
How to avoid toxic employees
-
Why trust is the secret to innovation
-
Why building resilience builds the bottom line
-
And more
Mentioned in this episode:
Transcript
Dave Bookbinder: The value of a business is a function of how well we the financial capital and the intellectual capital are managed by the human capital. So you better get the human capital part, right?
Voiceover: You’re listening to the Build a Vibrant Culture podcast with professional speaker, coach and consultant Nicole Greer.
Nicole Greer: Hey everybody. Welcome to the Build a Vibrant Culture podcast. My name is Nicole Greer and they call me the vibrant coach. I’m all about building a vibrant culture. And I am delighted to be here today with none other than Dave Bookbinder. Dave Bookbinder is the author of this, The NEW ROI: Return on Individuals. And Dave Bookbinder is an amazing author. I’ve read his book, I think it’s fantastic. If you need to get in touch with how to work with your individuals in your organization, this is the book for you. And Dave, I’m so glad to have you on the show. Welcome.
Dave: Thank you. It’s my pleasure to be here. Thank you.
Nicole: So I want to talk a little bit about you and how you got started, and you started working with people, I see you as a major organization development person. So tell me a little bit about your history and how you got started.
Dave: Yeah, so I’m actually a finance guy, which is, I think, what makes my story a little bit unique in that I’m a finance guy that talks about, and frankly preaches about a lot of things that are traditionally been called Human Resources type topics. So I’m a Managing Director of B. Riley Financial, we’re diversified financial services firm. We pretty much do cradle to grave services for companies from early stage all the way down to companies who are winding down. So I won’t bore you with all the details on that you can check out the website, and everything’s listed there. But for me, I’ve been in corporate finance consulting for my entire career.
I’ve been in investment banking, and I’ve been in corporate valuation, helping companies and valuing their businesses and intangible assets. And when you think about company’s most valuable asset, I think every CEO on the planet has pounded the table, or started a conference call by saying our people are this company’s most valuable asset. But they don’t always behave that way. So long story short, there Nicole, in doing the valuations for my clients, for the intangible asset component, one of the intangibles that I value is human capital. Honestly, I never thought we did it the right way, and wrote something about it. And that started the whole train rolling.
Nicole: Oh, that’s fantastic. Well, I can’t wait to get into the book. But you know what I’m doing Dave, I am collecting definitions of leadership. So I like to start off the show. By asking all the genius people I have on here, what’s your definition of leadership?
Dave: Yeah, you know what, it’s funny, because I’ve listened to your show, which is fantastic by the way, anybody who’s watching or listening, definitely check it out. Good stuff. So I knew you’re gonna ask me that. And I’ve done a lot of soul searching and thinking deeply about it. And I think I’ve come to the conclusion is, I’m going to hijack a couple of things that I’ve seen recently, because they really resonate with me. One of them is the idea that leadership starts when you as an individual start to recognize that you’re no longer the one responsible for doing the work. But you’re responsible for the care of those individuals that are doing the work. And I think Simon Sinek talks about it correctly. It’s kind of like parenthood, if you’re a parent, you get it. That’s, that’s really the best analogy that I can come up with for leadership.
Nicole: Yeah, and I, you know, I tell leaders all the time, Dave, I’m like, listen, you know, while you’re sitting there complaining about your people, you could be helping them grow, you could help them move into higher levels of character. I mean, and that’s what our parents did, right? Help us grow, move into higher levels of character. So that’s what we need to be doing.
Dave: Exactly. Sometimes it’s tough love. And sometimes it’s by example, right?
Nicole: Exactly, exactly. That’s fantastic. Okay, so first of all, I want to jump into the book. So let me hold it up here again, everybody, look. The NEW ROI: Return on Individuals. This is good stuff. You need to get one it’s on Amazon. Okay, so I want to talk about the new ROI. So, you know, when I was coming through the ranks, first time I ever got sat down, they’re like, here’s your P&L. I’m like, what’s that? So I didn’t go to college to a later date. So they said, oh, your profit and loss statement. And I said, oh, this sounds important. And it’s very important, but you’re talking about not return on investment, but return on individuals. So will you talk about the new ROI for a moment?
Dave: Yeah, so it’s kind of a spin on that traditional corporate finance term of return on investment, as you just referred to, and in the spirit that people really are accompanies for the valuable asset trying to come up with some wordplay. And honestly, I held a contest before the first article came out, because I was going to go down the path of writing something and didn’t know what it was going to be or where how it was going to turn out. I thought maybe it would be a series if the first piece went well. So actually held a contest and got some good input from the audience, if you will. And that really struck me The NEW ROI: Return on Individuals, it was a great way to characterize what we’re going to talk about. And the book really is my journey to prove that people are a company’s most valuable asset.
Nicole: Yeah, absolutely. So here’s the deal, folks. You know, you can invest in all sorts of things, all sorts of things in the stock market, but you know, what makes the businesses in the stock market make money? It’s the smart people that work there, right. I mean, we all got raptured out of here this afternoon, nothing would get done. So the people are most important. So that’s fantastic. All right, people. Yeah, absolutely, absolutely. Okay. So I want you to tell us what a difference maker is. What is the difference maker?
Dave: Yeah, so, difference makers are the folks that that really take things to heart, take it personally, and really go above and beyond. I think difference makers are driven by an internal calling for discretionary effort, meaning that they’re the ones who are super engaged. They’re not really satisfied with the status quo. They’re looking for ways to do things better and improve processes. And as a result, make the company better.
Nicole: Yeah, absolutely. And I tell you, a lot of times in an interview process, I’ll ask what if you join our organization, or the organization I’m recruiting for, what difference will you make? This sometimes stuns people, but there’s one person every now and again, that’s like, I know exactly the difference I’m gonna make. And it’s what you just said, I’m gonna follow through, I’m gonna get done. I’m gonna do what’s asked of me, I’m gonna engage. I’m gonna get on with it. So it’s all about energy, I think is a difference maker. How does energy play into that do you think?
Dave: Yeah, I think energy is absolutely a big part of that. And I think the energy and the engagement go hand in hand. Because if you’re engaged, you’re inspired, you feel energized about what you’re doing. You’re not feeling in the doldrums. You’re not just kind of moping through your day getting by.
Nicole: Yeah, absolutely. And so in the book, you call these folks rock stars. Right. So I love that, you know, I feel like back in the day when I was working for other folks that yeah, absolutely. That I was one of those rock stars. I kind of have a Pat Benatar thing for those of you who are over or under 40. You should look her up. She’s amazing. But anyway, so now you have rock stars. So what is the value of a rock star? Have you put a price tag on what a rock star is worth to an organization, one that’s making a difference?
Dave: That’s the real issue that I first spoke about, and I talk about it to the front of the book, Nicole. We value human capital, we value the assembled workforce. I’m not going to get accounting valuation wonky on you here. But I’ll give you the brief way that we look at it, we look at it using what’s called a cost to replace method. And the idea there is it’s the total direct costs associated with replacing an employee. So think about recruitment costs, the headhunter costs, the training, the learning curve, and things like that.
Those are the costs associated with replacing an employee. Those costs are what we use, essentially, to put a value on the workforce. It’s analogous to turnover calculator for the folks in the HR space who are watching or listening. So no, we unfortunately, don’t do anything to distinguish between the rockstars and the disengaged or the toxic employees. And that’s part of the challenge. But honestly, who really cares if people aren’t in alignment on a balance sheet anyway?
Nicole: Ah, so how do we get them on the balance sheet? What do we do there?
Dave: Yeah, there’s a lot of issues at play here. So early in my career in valuation people were a line item on the balance sheet. And in my profession, we had same methodology. So we’re a little hamstrung then. But we had a little bit more rigor in terms of how we thought about certain assumptions. In other words, we didn’t just give it short shrift, like maybe we do today, if I’m being honest with you, because it’s not a key component in what we do. So there’s good news coming, I think. I’m optimistic. I think people are going to wind up back on a balance sheet. And there’s a confluence of circumstances that are happening now with ESG investing and Securities and Exchange Commission requiring public companies to start doing some human capital disclosures. There really is a groundswell here, so I’m optimistic it’s going to happen.
Nicole: Hmm, that’s fantastic. That’s fantastic. Well, all of these employees, I think, are like, if we get the accounting lingo going here, again, some more, is that people are either assets, you know, or they’re not, right. It can be right on the balance sheet there. He was, like, this one’s a good one, that one’s a good one, right? And then we get people you know, that are taken away, right credits and debits. So why don’t you talk about.
Dave: I was just gonna say the interesting thing is, there are folks out there some colleagues of mine, who were collaborators in that book that you’re looking at right there, who are working on building things like an index of alignment, for example, where we can actually identify what employees are engaged, which ones aren’t. And we’re actually talking behind the scenes here to try and figure out how we can actually bring those concepts to light.
And I think the more that the conversation happens globally, and the more that folks like myself are talking to folks like you and talking to other folks in our profession, folks seem to latch on to it. I know when I talk to the folks in the valuation profession, they often acknowledge that they don’t really give this topic a whole lot of thought, and for good reason. But they’re very keen to listen and nod and take in all the ideas and I’ve gotten a lot of great feedback from them. So yeah, there’s there’s possibility here.
Nicole: Yeah. Well, I’d like to share a story I may Dave about a person who was an asset after the sale of a business, and then I’m wondering if that would trigger a story you can tell us. May I do that?
Dave: Go for it. Yeah.
Nicole: Okay, so it’s my own husband. Alright, so we had a little family business, and it was called The Lumber Depot. And it was located on Highway 150 in Mooresville, North Carolina. And my husband and his dad sold lumber to everybody who was building a dock on Lake Norman. If you haven’t ever seen Lake Norman, look it up. It’s the largest manmade lake by shoreline in the United States of America. So go check that out. So anyway, so he was selling wood to build these docks, right. So when they decided to sell the business, in the valuation in the process, they said, well, you know, we’re not going to buy it, if David doesn’t commit to working here for two years, because we gotta get all this stuff out of his brain.
We got to get it on paper. And we gotta get, we got to figure out he knows what’s going on. And so, you know, that was a big part of the sale of the business is this agreement that David would work for them for two years. So that’s just a little teeny, tiny, you know, awesome little, put yourself up by the bootstraps entrepreneur’s story. But tell me a little bit about how people might bring value in the same way or a story of where you’ve seen people be part of the deal?
Dave: Yeah, that happens a lot. Some of the smaller businesses talk about it as the key man premium or key man discount, because they’re the sole person, the one if they get hit by the proverbial beer truck or the bus tomorrow, the business would just dissolve, right. But in larger deals, especially when you get, say private equity investors, who may not necessarily come in and run the operation from day one, and definitely want the mindshare of the entrepreneur that founded the business, they will lock them up with an agreement, much like what you just described there. Oftentimes, compensation is even tied to their staying and maybe even some performance hurdles, as well. So what you just described, there is a regular occurrence in deal world.
Nicole: Yeah, yeah. So you know, I think that, you know, that just shows you how valuable people are, you know, just that little story. Okay, so there’s people like David Greer, who are an asset, really nice guy. You should meet him. You should come over. Let’s have dinner. So Dave, where are you located? Tell me where you’re at.
Dave: I’m outside of Philadelphia.
Nicole: Oh, okay. Oh, we got to come see the Liberty Bell. I haven’t ever seen it before. I’m going to come with a big crack in the bell. Anyway.
Dave: A lot of us locals who could see it every day of the week don’t bother, because it’s so convenient that we can see it anytime we want to.
Nicole: Isn’t that the way it is? All right. Well, that’s your homework assignment is go see the bell, we all want to see a picture of you with the bell on your social media. Get that done. Okay. All right. So there are people who are very very valuable to the organization. But then the flip side, the return on individual is that there is, there are toxic employees. So what’s your definition of a toxic employee? Because I think our leaders out there need like a little hello wake up call you get some people you need to escort to the door. Dare I say that so bluntly, what do you think, Dave?
Dave: Yeah, so the let’s do a quick comparison. So the ones who are disengaged, those are the ones who are they’re checked out at work. Okay, the toxic employees are acting out on that disengagement. So it could be in subtle ways. It could be in dramatic ways. I did a talk last week. And I’ve got this really cool slide where a construction worker takes this very heavy construction vehicle and just demolishes his boss’s Mercedes Benz. That’s an extreme example of a toxic employee.
But there’s also the subtleties, right? When somebody is a toxic employee on a team. It could be rumor mills, it could be false information, it could be deliberately not helping someone, steering them in the wrong direction. It could be any one of a number of things. But the idea is that those toxic employees actually do more damage than you can imagine. The Harvard studies that were done and Dr. Michael Hausman who collaborated in the book, had a whole bunch of data that he shared with me, it was fascinating stuff.
And one of the key takeaways that I got was interestingly enough that toxic workers are ironically, more productive than most of your employees. So I analogize that in terms of sports. So if I think about like in the NFL, some of the best wide receivers in the game have historically been kind of the bad locker room guys, the head cases who don’t play well with others, but they’re the most productive guys on the field. And they always get the next job because they are super productive and every subsequent coach thinks I can reform that person.
Nicole: And do they? That is the question.
Dave: Right now Antonio Brown is still looking for work.
Nicole: Okay. And, and so is the bottom line that we should remove these toxic workers even though they’re productive. I mean, my my philosophy has always been God willing, I could, I could find somebody who’s got a great attitude and is you know, the rock star. I’d rather have a rock star than a productive toxic. Is that, is that our philosophy?
Dave: Well, interestingly enough, I asked this one question in my talks. Do you think it’s a better hiring decision to hire the rockstar or to avoid the toxic? What do you think?
Nicole: To hire the rockstar?
Dave: No, actually, the studies prove that you’re better off avoiding the toxic employee, because of all the damage they can do, because their behaviors are contagious. The degradation in morale and even potential litigation matters. So yeah, we all think we want to hire the rockstar. But intuitively, we’re maybe a little bit missing the point here that it’s really about avoiding the toxics. And to answer your question.
Nicole: Can we do both?
Dave: Yeah, sure, of course. But given the choice of A or B in that binary decision. Yeah. It’s a fun conversation starter. But to answer your question, yeah, you can cordon off the toxics if you’ve identified them, and they’re super productive. If you can put them in a, will call them in a little box, so to speak, where they’re not given the opportunity to do much damage, then yeah, you can absolutely do that. And of course, they can be rehabilitated under the right circumstances. Sometimes they can’t.
Nicole: Yeah, well, my suggestion is get him a coach. Hello. Coach Nicole here thinks they need a coach.
Dave: Exactly, well if you’re looking to build a vibrant culture, who else should they call?
Nicole: They should call the vibrant coach Nicole Greer, 704-502-4953. That’s what they should do. That’s 704-502-4953 people. Okay. Yeah. Yeah. You know, and here’s the thing, Dave, at the end of the day, I tell people all the time, I tell leaders all the time, you’re gonna have to decide, are people essentially good, or people essentially bad? And if there is, if you believe, you know, again, like your binary thing, put me in a bind there just a second ago, watch Dave Bookbinder. Don’t miss that. He put me in a bind a second ago. So he’s just trying to make me think over here. Is that exactly what you’re trying to do, Dave? Is making me think?
Dave: We’re just having fun.
Nicole: Yeah, absolutely.
Dave: If you’re thinking that’s just good, good stuff.
Nicole: Yeah, well, that’s what I tried it, that’s what a coach tries to get people to do is, let’s get some new neural passageways hooked up together. So you’re working on me pretty good, which I love. Okay, so the bind, again, are people are essentially good or essentially bad. And so, you know, I have to believe, because of what I do for a living, that people are good, like, you can get the good out of them. And I think people just have little blind spots that they need to, you know, see those and get those off. And that’s very, very helpful.
Dave: I think we all have to start from that place and that supposition that people are basically decent.
Nicole: Yeah, they just, they just don’t know any better, or they don’t have a good reason to come to the lake, you know, and so we got to show him what the.
Dave: Yeah, a lot of that’s probably fear based too, but that’s above my paygrade.
Nicole: I doubt it, because I think you’re really bright. Okay. All right. So in here, you talk about a couple of different impacts and some secrets, right. So one of the things you talked about is the impact of attitude and perspective. I think this is genius. So I think, you know, I have a T-shirt that actually says attitude is everything. All right. So talk about attitude for a minute.
Dave: Yeah, it really is everything. And it’s a it’s a subtle mind shift that you have to make if you’re aware of your attitude going sideways or going downhill. And you start to feel like you’re being negative. I don’t wanna go down the woowoo train here. There’s a lot of woowoo that we could talk about here. But at the end of the day, if you’re if you’re at least focused on being positive about things, not thinking about things, in the context of why are they happening to me, for instance, and reframe that in the context of maybe, why is it happening for me?
I mean, I can tell you firsthand, I had to do that mind shift, I was in a position and couldn’t understand why things were happening to me. And they just kept repeating. It was just a vicious cycle. And until I started process, why is it happening for me, and shift the thinking and then shift the behaviors it just perpetuated. So that’s key.
Nicole: Yeah, absolutely. Yeah. So I love what you just said, if the same thing keeps coming back around pay attention to how it got there again, and how it got there again, and guess who will usually be part of that formula? Us, you and me, we’re a part of the problem, right? So and I love, don’t miss the word he used everybody. He used the word reframe. And I think that that’s what this whole book is about. Right? This whole buzz, don’t miss it everybody The NEW RO:I Return on Individuals by Dave Bookbinder. It’s about reframing how you think about your money and what’s the value inside your company. So such genius stuff. All right. Tell me a little bit about the impact of perspective on people and on the business and leader’s perspective.
Dave: Yeah, well, they think that drives the entire thing and we’ll take it from the top in terms of are people really your most valuable asset. If they have that perspective, they might behave in ways that would actually demonstrate that and they wind up doing the right things and adding value to the organization, create that engaged culture. It gets embedded into the DNA of the company. And then as I’ve been talking to the CEOs who are doing these things, great things happen, they start to get key performance indicators, pretty much every one of them increasing or moving in the right direction, call it right.
So because injuries you want to go down, sales up, profits up, absenteeism down everything, you name it, and that’s what happens. But if their perspective is, people really aren’t our company’s most valuable assets, they’re our greatest expense, and how can we reduce them? That lens changes all of those subsequent behaviors.
Nicole: Yeah, I was in a seminar about a month ago, and the guy opened up with a presentation and he said, what’s the biggest line item in your P&L? What’s your biggest line item? And everybody’s like, payroll, you know, and so it was all these ways to reduce payroll. And I was like, oh, I should have Dave Bookbinder here. I mean, we do want to reduce payroll. I mean, if you had all rock stars, you wouldn’t need all the people who are toxic, right? Or whatever.
So I mean, that was not how they were going about it. All right. So I love that. I love your your, your viewpoint, okay. Now you have he has a secret in his book, everybody, there’s a secret. And his secret is the secret to innovation is trust. Oh my gosh, so important. So talk to us a little bit about trust and how you build it and what to do. I’m betting trust has a big impact on those KPIs you just ripped off.
Dave: Yeah, trust is key. You have to create a safe space for people. And the way I think about it is if you’re trying to do any kind of brainstorming session, thinking about generating ideas, if people don’t feel safe in generating those ideas, raising their hands, and offering things up, because they’re gonna be embarrassed or made to feel silly about things, they’re gonna keep their mouth shut. So you’ve got to have that environment where they trust you, with their ideas, trust you to do those things and create that kind of environment where you can have the collaboration and drive the innovation.
Talk to a lot of people about, Brene Brown, who I think everybody in your audience probably knows, talks about trust a lot. And she talks about trust being built in the small moments, and that that was really what struck me. Because trust is at a high level doing what you say you’re going to do, follow through on your commitments and things like that. But I think trust starts, like she says, at the smaller level, where if you’ve got a colleague, and they mentioned that they’ve got a sick kid at home, ask them how the kid’s doing the next day, or the next time you see them. Those little components of human connection help to build trust in huge ways.
Nicole: Yeah, so don’t miss what he just said. That’s tweetable. The human connections that you make in little ways build trust, okay, tweet it. Dave Bookbinder, hashtag return on individuals.
Dave: Yeah, it’s hashtag new ROI, there you go.
Nicole: Oh, is that what it is? Okay. Everybody write that down. Hashtag new ROI. Very good. Okay. We love that. All right. So um, so some people create trust, I would say those are the rock stars. And then there are people who destroy it completely, which would be the guy, is that on, can I Google that? Guy takes truck at construction company and runs it into Mercedes.
Dave: Yeah. Oh, okay. Yeah, totally disgruntled worker destroys Mercedes. Yep. Google that. You’ll see a couple of them. It’s a white Mercedes that gets absolutely destroyed.
Nicole: That is crazy talk. Okay, I’m gonna go look it up. All right, we might have lost all the listeners right now. Everybody, come back. Come back. You can watch it in just a minute. Okay. All right. So here’s the thing. Here’s the thing. You say so you believe in miracles in your book. I mean, that is a very powerful question. I’ll tell you, Nicole Greer believes in miracles. I see them all the time. I see people change. I see all sorts of things happening. So talk to me about miracles at work. Can they really happen?
Dave: Yeah, so that chapter was based upon the the USA Hockey team, right? They were a big underdog. Nobody expected them to ever win the gold medal. But they did. And the chapter’s real premises about teamwork. And getting the right people together to build a team. And that’s what happened with them when Al Michael said famously, do you believe in miracles as they were winning. That was the outcome of getting the right team, you hear it all the time, the right people in the right seats, the right people on the bus, however you want to characterize that this was a team that came together.
It wasn’t about any particular individual. It was about everybody all rowing in the same direction. And man, I’m throwing clichés that you here as I’ve realized that I’m speaking to you, so apologies for that. But it’s about everyone really pulling together for a greater mission. The coach said that it’s not about the name on the back of the jersey. It’s about the crest on the front of the jersey, which is the team.
Nicole: Yeah, absolutely. Okay, so Kurt Russell, right. He was in the movie.
Dave: Miracle wasn’t it?
Nicole: Okay. So for those of you under 50, that’s your homework assignment. I like to give movies as homework assignments because often they get done. Other homework assignments don’t often get done. So everybody go watch the movie.
Dave: You give a lot of homework. You already assigned the Pat Benatar thing.
Nicole: I mean, there’s a lot of things to get done in this life. What are you doing all night watching Netflix. If you’re gonna watch Netflix I’m gonna give you the right movie to watch. Okay, so watch the movie about the Olympic hockey team. I can remember watching it live on TV with my father in our living room. Like, that’s how exciting it was, you know how you ever you’re just like memories that stick with you sort of my select memories, my dad screaming at the television. You know that you actually had to go over and turn the knob. But anyways, it was a long time ago. So everybody go watch that movie. All right. So I love that. Okay. All right. Now, I have a lot of resilience.
And so when I was reading the chapter, build resilience to build the bottom line. I was just like, Oh, my God, that you’ve nailed it. You’ve totally nailed it. Because, you know, people who let their ego go, and they’re like, Oh, I messed up, let me try again. You know, that’s amazing resilience. And so I do think that resilience absolutely can build the bottom line. Will you talk a little bit about that? Because I’m a big believer in building employee character. You know, people think, oh, well, I got character. I’m good. I’m full of integrity. And it’s like, oh, we got work to do. I’m just saying. So resilience. Huge, huge today. So talk a little bit about that building your bottom line. I think is genius.
Dave: Yeah. So when we think about resilience, it’s often in the context of we’ll call it a little bit more of a personal set of circumstances, right. But I think we need to be or learn how to be more resilient in business, because the only thing that’s constant is change, whether it’s a merger or acquisition that you’re going through, or trying to figure out how to deal with this, whatever we call it new normal in this COVID environment that we’ve been living in for the past two years. I mean, resilience is key. So you can’t just curl up in a fetal position on the floor and throw in the towel and forget about it, we’ve got to find ways to dig deeper, and pick ourselves back up and get on with it.
And resilience is absolutely key. In terms of just getting on with ourselves. I think everybody who’s watching or listening can can relate to that just in the terms of the way that they’ve had to deal or cope with their new normal and the circumstances that they’ve had to deal with, with friends and family, whether they’ve gotten COVID, whether they’ve been impacted job wise, because not everybody is lucky enough to be able to work from home. So those are the circumstances in business, where we really need to learn how to be more resilient.
Nicole: Yeah, and I think that dovetails nicely with what you were talking about, about innovation, you know, and hearing what your employees have to say about how we should move forward. You know, so making decisions from way up here inside an organization can be very dangerous, and it’s very volatile. You know, they’ve got what they call, it’s a VUCA world, right? It’s volatile, unpredictable, chaotic, and what’s the A? Help me Dave?
Dave: I’m gonna have to write that down. I’m not familiar with that acronym. More homework, more homework.
Nicole: Write it down. Dave, write it down. Okay. So there’s an A, everybody we’ll figure it out. We’ll put it in the show notes. But VUCA, so it’s an it’s a military word about how crazy it is too like, you used to go to the Battlefront, and you knew what you know, like, you’re these bad guys over here. Good guys over here, and then we’re gonna do this. And now you don’t even know where your enemy is. Right? So you don’t even know the Russians are coming. You’re like what the Russians are coming.
Pray for Ukraine, everybody. Imagine you didn’t have a roof over your head and you’re living at a brand new Polish friend’s house. Imagine? Oh, you’re so lucky. You should do everything Dave’s talking about no excuses. You don’t live in Ukraine. No excuses people. Okay. All right. So we were talking about VUCA. So the volatile world and I think, you know, really getting people dialed in on change management. That’s one of the number one programs I do with organizations is go in and talk about how to be change ready, which is this resilience idea, and that the resilience and the innovation, they go together like peanut butter and jelly.
You mean if you were not ready to change, there’ll be no innovation. Hello people. So so, so important. Okay, so you, you talk a little bit more in the book about kind of how to put things all together like, we didn’t like, get as deep as we need to because you know what everybody needs to do. They need to go get this book, The NEW ROI: return on investment by David Bookbinder, don’t miss it. So what would be like the things people need to do to start, okay, and I heard you it’s clear, kind of paying a big sign. Human beings are our most valuable asset. Now, what do we do?
Dave: You got to get intentional about doing the right things. And building a great culture, as you obviously know, doesn’t mean putting a ping pong table in the break room. Right? It’s about building the trust and creating the bigger mission and treating people decently as human beings. And what I’ve learned from talking to the folks that I I’ve interviewed not only for that one. But there’s another book that’s underway right now. More on that later. But the underlying theme is it’s being intentional about building culture, embedding it into the DNA of the organization, and your people are going to be skeptical.
Everybody’s told me it takes 18 months to two years or a little bit more before people start to realize that you’re, you’re serious about what you’re doing that this isn’t just another fad, just another initiative. And there’s a growing popularity on no A-holes policies, and people are enforcing them. And just think about the message that that sends to everybody else in the organization. When you say we don’t tolerate A-holes here, and when we find them, we will remove them.
Nicole: Oh my god, that is fantastic. Are you kidding me? Yes. Or, you know, last ditch effort see if you can remove their blind spots, give them a coach. Give them the benefit of the doubt, and then remove them. Because some people, let me tell you a quick story, Dave. So I had this guy come. He was an A-hole. And they gave him to me. And they said he’s a really good salesperson. Now, but here’s the funny thing, Dave, how could how can he be really great out there and not in here? Because don’t you have to be great out there to sell to be the best?
Dave: Not really. I’ve seen that movie. I’ve seen that movie. And it’s not just salespeople.
Nicole: Okay, well, I think he was doing something right for somebody to sign the bottom line.
Dave: There’s an example for you, right? There’s your toxic employee. So somebody who is super productive. They want to work to rehabilitate him, but he doesn’t play well with others.
Nicole: Yeah, well, we got him turned around. That’s the most exciting part of that story. Now, I’ve had other people come and it’s like, no, they’re like, I’m not putting up with this BS. I’m not being coached. Fine. But when it comes time to, you know, reflect on, you know, as a leader, did I do everything I could do? Absolutely, I did. So some you can save, some you can’t save, but I think you should try.
Dave: And true, and to be fair to the people that I alluded to here. It wasn’t like they detected the person and just immediately throw him to the curb. Yeah, they give them all the appropriate opportunities to rehabilitate, but sometimes people don’t change.
Nicole: That’s right. And you know, John Gordon has a book. I don’t know if you’re familiar. He’s an author as well. But he has a book that he calls it No Energy Vampires. Yeah. No Energy Vampires equal sign. I love that.
Dave: Yeah. The ones that suck the energy, yeah.
Nicole: Right. Okay. So you’re, you’re, you’re a student, I got a little vibe on you that you’re a student. You’re you’re checking out the research and doing all that which hello, people write this down. Be a student of business. You’ll be as smart as David you can write a book. Okay, so what’s the last book you read? What book, you’re ripping off Harvard and Simon Sinek and all these other people. So who are you reading right now? What’s your favorite read right now?
Dave: Oh, boy. That’s a great question. I’m not going to give you a lousy answer because I also host an Internet TV show and podcast. And I’m inundated with with books from folks who are writing them and are going to be on my show. And I’m just trying to keep up with them. And they’re all a blur in my head if I’m being honest with you. So there’s just so many of them.
Nicole: Okay, well, he was also mentioning Brene Brown. She’s got a new one out everybody check it out. Okay. All right. So all right. So I got a couple more questions for you. So why why do you believe some leaders succeed so easily? Like they look like they just they just know what they’re doing. And then others are on the struggle bus. What do you think’s the big differentiator between one leader who’s like killing it and another one who’s just like, miserable? What do you think the difference is?
Dave: My guess is that the one that’s killing it, had a lot of adversity, and figured out how to overcome it and perhaps change the way they view the world, change their perspective, change their attitude and change their approach. Whereas maybe the other person didn’t quite so much. What I’ve seen is that that I’ve shared with folks is that in the US, apparently, folks become managers at the age of 31. And they don’t get their first manager training until the age of 42. So think about that, for 10 years, they’re out there winging it, doing their own thing, and probably causing a lot of damage based on their experience and working with other poor leaders.
So that’s just a personal opinion in terms of the ones that are super successful and killing it. I’m sure there are folks that are in that spot that are just innately great leaders and carry that perspective right out of the box. But I think there’s probably a fair number also that had that transformative moment where they realize they’ve either got to reframe their thinking and do things differently or not and go sideways.
Nicole: Okay, so don’t miss what he said. Number one, he said they have to have the right attitude, the right perspective. We’ve already covered that but don’t miss it came back around pattern pattern pattern, which means this is important. So think about your attitude. Think about your perspective. And then don’t miss what else he said. He said, people don’t get their first manager training until, what did you say 42? Where did you get that statistic? Can you send that to me? Where do you get that?
Dave: A friend of mine, Dave Nast who works in this space, shared that stat with me a while ago, and it blew my mind when he shared it with me.
Nicole: Okay, and don’t miss Nicole Greer can help you build a vibrant culture. She does training for leadership all the time. Oh, my gosh, y’all have to?
Dave: Yeah, don’t don’t wait the 10 years. And I’ve seen it throughout my career watching folks, my colleagues growing up in the profession, you know, at technical capacity. And like many of us, in professional services, you reach a certain level based on your technical skills. And then somebody gives you the title of manager, and they tell you, okay, now you’re in charge of your team. And they don’t know what to do.
Nicole: Yeah, they don’t, no. And there are some enlightened leaders out there, you know, I’m getting ready to do a whole leadership series with the radiology department in Novant Health here in Charlotte. And they’ve got a young, excited, driven leader who’s gonna have eight series of things all the way from time management to change management is, you know, it’s just a beginner, like, we’re gonna take your note your tip your toe, there you go, tip your toe in the water on all of these different things, and then circle back around to do more in depth programs. But you got to get your people up on these concepts.
Because don’t forget, they’re at home watching Netflix. Hopefully, they’re watching the hockey movie. All right. So here’s the thing. All right, what challenges are the biggest challenges that lie ahead? I mean, I mean, when it comes to people and making them the most important asset, like you said, you know, wake up, you got to smell the coffee, reframe what you’re doing. But what are the big issues that you’re seeing? Again, you’re well read, you’re doing your research, tell us what we should be paying attention to, in terms of challenges that lie ahead.
Dave: I think the big thing to pay attention to is something we talked about at the top of the show, which is this, this movement that’s afoot here, this this groundswell of understanding that people matter. And the Securities and Exchange Commission actually mandated some human capital disclosures for public registrants, and they did it in the middle of a pandemic, I don’t think that should be lost on this, Nicole. I think that that timing speaks to the importance of this issue. And as more and more companies begin to adopt that, even the privately held ones are going to see that what’s going on with it, and will begin to do those things.
Because to attract and retain talent, as we’re now living through what’s called the Great Resignation, people are finding it, it’s really hard to find good people. And your your candidates are looking at the reviews on your website, they want to know that you’re doing the right things, both in terms of how you treat your people, but how you treat the environment as well, that you’re doing things that are they’re socially conscious and aware and aligned with their values as part of the bigger mission. So we can no longer ignore those things. I think that that’s going to be one of the biggest things to continue to keep an eye on.
And in my world, what I’m hoping to see happen is that as these disclosures continue to happen, and they become more robust, that we’ll be able to better correlate those human capital investments with the stock market returns, and be able to change the way we do business valuations by building that into our formulas. Because it’s clear, it’s out there, the research is available, you don’t have to take my word for it. The companies that do the right things by the people actually do outperform. Not just in those KPIs I mentioned before, but stock price valuation of the business.
Nicole: Hmm, that’s fantastic. That’s fantastic. It just makes sense. I mean, you can look at the research, you can look at the actual statistics. It just makes sense, better people better outcomes. I love it. Okay. So he said two things we don’t want to miss. Two things, don’t miss. One is he talked about is your company paying attention to the ratings that you’re getting? Okay, so there’s this thing people called Glassdoor, like write it down Glassdoor, please write this down. And so go there. And you might be shocked what people are saying about your company. Like I talked to some people sometimes Dave, they don’t even know Glassdoor exists. I’m like, where’s your HR people? Hello. So you got to have, you gotta know what’s going on on Glassdoor. Alright.
Dave: Flipside, Nicole, right is if you’re doing the right things, your people become evangelists for you. They’re gonna they’re gonna be out there recruiting for you. They’re saying great things and their friends are gonna say, how can I work there? I want to work with you.
Nicole: 100%, 100%. So you gotta go go to Glassdoor. See what’s going on. See if you can triage or if you can celebrate and use it on a social media tweet, check out our Glassdoor rating, that’ll help. Alright, and so the second thing that you said actually, you said three great things. And I always like to stop, Dave and highlight because people are just, you know, they’re on the treadmill right now. They’re driving their car. They’re not, you know, 100% right there. So I got to, hey, guys, listen.
So the second thing that he talked about was the triple bottom line. Okay. So there’s, there’s, there’s your your return on investment and return on individuals. Okay. So I think we don’t have a triple bottom line. Maybe they have a quadruple bottom line because like there’s the bottom line bottom line the money, the return on individuals, which David Bookbinder is bringing into us, then there’s like your social return on investment. And then there’s your environmental. So I read some article. Where’d I read it, Dave? Grad school? About the triple bottom line. That’s what I heard you say.
Dave: Yeah, that’s the certified B Corp status. Yep. Okay, so yeah. Being aware of those other components, and that’s happening now. I mean, it’s out there, and it’s growing.
Nicole: Okay. All right. So if I look that up, okay, more homework. Okay. All right. And then. So well, here, here’s, here’s really my last question, my last question. Is there a major point you’d like to make?
Dave: Yeah, there is, actually. And thank you for that. So the funny story, so the first time I got an opportunity to speak and put together a panel to introduce the new ROI, I think the book had just come out or was about to come out. And in conversation, people were asking me, so what’s it about? How do you describe it? Like, what’s the what’s the key takeaway? And I’ve always described it as my journey to prove people are the most valuable asset. But here I am, I’m going to be moderating this panel in front of about 300 people, and most of them know of me in the in the room at the Union League that night.
And I wanted to come up with some way to end the discussion without saying something lame, like, so are there any questions. I wanted a mic drop moment and walk off the stage, right. And I didn’t know exactly what I was going to say. And I sort of looked up and asked the universe for some help, I guess. And some words came out of my mouth. And those words were, the value of a business is a function of how well the human capital, excuse me, the financial capital and the intellectual capital are managed by the human capital. So you better get the human capital part, right. And ever since those words came out correctly that night, not meant to stumble here.
But when those words came out, it started to catch on. And it became a kind of key quote from the book. And folks have literally shared that around the world, they’ve translated into different languages, and they’re using it on LinkedIn profiles. They’re using it on college curriculum. I just saw recently, where a South African soccer team had hired a new manager and used that quote in the article to announce the hiring. It’s just crazy. So that’s what I’d like to share. And that’s really the key here, you better get the human capital part. Right?
Nicole: Okay, so slow down and tell it to us again, because we’re going to write it down. Everybody get a pen. Everybody got your pen? Get off the treadmill. Move it over a little bit, let’s see. Okay, it’s got a little shine, the value of a business is a function of how well the financial capital and the intellectual capital are managed by the human capital. You better get the human capital part right. Oh, that is so stinking good. And tweetable hashtag NEW ROI. Did I get it right?
Dave: That’s a great refrigerator magnet.
Nicole: Yeah, that absolutely it. Put it in the office. Absolutely. Okay. So here’s my final question.
Dave: Wait, you just gave me your final question.
Nicole: No, no, no, no.
Dave: Another final question.
Nicole: Will you do one more? I just want to give you an opportunity to say something before I ask my final question. All right, so. Okay. Well, might read this thing word for word. I don’t know. Okay. No, we can’t do that. We don’t have time. But you can go by it. Let me hold it up again. In case you were driving, you’re on the treadmill. There it is. The NEW ROI: Return on Individuals by David Bookbinder. He’s very smart.
Dave: Thank you.
Nicole: Yeah. So if you are mentoring a single special listener, so there’s some leader out there, they’re on the struggle bus or they just need a new thing to focus on like they’re killing it, but they don’t want to let up on the gas. So they want to do this return on individual thing. If you are mentoring this person, coaching this person, what one single piece of leadership advice would you give them? And you can’t use the genius one you just mic dropped a minute ago. So what’s the final piece of advice you would give our listeners?
Dave: Surround yourself with good people and let them do their job. A lot of times in that scenario that you just described, is the key prototypical entrepreneur that is working in the business instead of on the business. They’re involved in day to day, every discussion, and they become that that key person that if the beer truck, hit them tomorrow, nothing would go along without them. So the key is, get yourself the smart people around you. Folks that you actually will challenge your thinking and let them do their thing.
Nicole: Fantastic. I love it. All right. So Dave, if people want to get up with you, tell us you know, I think we can get a book on Amazon, I’m pretty sure. Is that correct?
Dave: Yep. The book is available everywhere, actually. It’s available wherever you buy or download your books. Yeah.
Nicole: Okay. So like, hello, if you’re in the airport, you can get it there. You can get it at Barnes and Nobles, you can get it everywhere. Alright, so get the book. All right, then if you want to edify that, build on top of it, and be surrounded by genius, you could go to Dave’s podcasts. So tell us how to listen to your podcast.
Dave: Yeah, so the show’s called Behind the Numbers. And thank you for that, by the way. And the idea here is that in my career and what I do for a living, everything is driven by the numbers. Business valuation, business performance, it’s all metrics, it’s all numbers. But I’ve learned that the real stories happen behind the numbers. And it’s not always just human capital matters. But it’s the lessons learned in business. And that’s what we tried to dig into. So you can catch that anywhere you stream a podcast, it’s also available at RVN TV, it’s actually Internet TV show as well. And you’ll find it on YouTube. And if I can give you one more plug, check out newroi.com if you want to learn more about me or the book.
Nicole: Yeah, definitely go check all that stuff out. See how Dave can help you. I bet you he’s helped you already. Everybody say thank you.
Dave: Can I offer you one more thing? One more thing. So if any of this stuff about what I call, the new ROI construct resonates with your audience, Nicole, I would invite them to join us if they’re on LinkedIn. There’s a LinkedIn group called the New ROI Return on Individuals. And it’s a group of like minded people literally from around the globe. You know, from the front desk receptionist to the C suite. Folks who believe that people are their company’s most valuable asset. So I invite them join us on LinkedIn be a part of the conversation.
Nicole: Okay, fantastic. I love it. All right, y’all. You’ve got so much homework and Dave, I’ll be checking on your homework next week. When will you have it done? I’ll hold you accountable.
Dave: I’m gonna download some Pat Benatar right now.
Nicole: Okay, fantastic. All right. Next time I call I should hear in the background. All right. Everybody, it has been great to be with you. My name is Nicole Greer. They call me the vibrate coach and I can help you build a vibrant culture. Thanks so much Dave Bookbinder, for your time and energy. You have been a genius. Thank you.
Dave: My pleasure. Thanks so much for having me. Really appreciate it.
Voiceover: Ready to build your vibrant culture? Bring Nicole Greer to speak to your leadership team, conference or organization to help them with her strategies, systems and smarts to increase clarity, accountability, energy and results. Your organization will get lit from within. Email Nicole@nicolegreer.com. And be sure to check out Nicole’s TEDx talk at nicolegreer.com.
