In this episode of The Staffing Show, Thomas Kosnik, president of Visus Group, Dawn Meyers, CEO of Malone Workforce Solutions, and Mark Holland, CEO of Ascend Staffing, discuss their experience in leadership roles. They share some best practices when it comes to recruiting and hiring talent and talk about who they trust for business advice as well as key factors to consider when growing a business.
David Folwell: Hello everyone. Thank you for joining us for another episode of The Staffing Show. Today I’m super excited to be joined by Tom Kosnik, the president of Visus, Dawn Meyers, CEO of Malone Workforce Solutions, and Mark Holland, the CEO at Ascend Staffing. Thank you guys so much for joining me today. Super excited for this conversation. And today for the audience, we’re going to be digging in to some of the common pitfalls that staffing agency owners experience when they’re trying to grow their business. But to kick things off, maybe we go around and do some intros so everybody knows who you are and a little bit about your organization. Tom, if you want to go ahead and start.
Tom Kosnik: Yeah, thank you so much, David, for inviting me to the podcast here. So Tom Kosnik, founder of the Visus Group in servicing the staffing industry for over 30 years now. We sponsor a president’s round table and we actually have over 100 C-suite executives now in nine different round tables that we sponsor and then also do a lot of growth strategy, organizational development, consulting work. It’s myself, I’ve got a dozen or so subject matter experts that can help with any challenge that you’re experiencing. So it is, you could be 2 million or 2 billion. We’ve got resources that can help you through that challenge and happy to be here.
Folwell: Awesome. And how about you, Dawn?
Dawn Meyers: Hi, I’m Dawn Meyers. I have 25 years in staffing and I actually have always worked for family-owned companies. So I started my career with a company that was a million dollars, grew that to about 22 million, and then started with Malone when we were at about 120 million and now the CEO. And we’ve gone up to 400 million. So excited to be here and share a little bit of what we’ve learned.
Folwell: Awesome. And how about you, Mark?
Mark Holland: Yeah, thank you. First, let me say I’m honored to be with you. I can’t tell you how much I respect Dawn and the things that she’s done for her company and her personal integrity, too. So glad to call you a friend. And then Tom, I’ve known you 25, 30 years and you didn’t ask me to do this, but I will tell you that Visus has been transformational for our organization. I participate, my COO participates, my CFO participates, and then the network that you’ve helped us build outside of that has just been phenomenal. And so thank you for helping us to become who we are.
Mark Holland, been with the Ascend Staffing for wow, a little over 31 years. When I started, it was a turnaround mess. We had four offices, did 3.4 million our first year and this year will be our second best. Well, 2023 was our second best year ever. We’ll finish the year around 137 million, something like that. So I might also add that maybe about half of our growth has been organic and half of it has been acquisitive. So in the last five or six years we’ve done maybe 14 or 15 acquisitions, some small and some quite large, and we continue to look. And so it’s been another interesting component of my personal growth and I love that part of the business.
Folwell: Oh, really great to have all of you here. And for those of you listening, if you can’t tell, this is going to be a really good podcast. We’re going to get some insights on how you can grow your agency. So with that, let’s go ahead and we talked a little bit about growth plateaus. Tom, I think the initial conversation you’d brought that to me and I hadn’t really thought of it from with that terminology. So to start off, could you tell our audience what are growth plateaus and how do people get past them?
Kosnik: Sure. The way that we, from an organizational development perspective, the way that we would look at these different plateaus in the staffing industry, typically owner operator up to somewhere 15 to 20 million in revenue depending upon the average bill rates. And then that 20 million up to a hundred million in revenue is your classic middle market. And then north of a hundred million we would consider an enterprise-size organization. Those are the way that typically we would size up the industry and look at the different plateaus. And of course businesses hit plateaus when you’re growing up to 10, 15 million in revenue, you hit a number of plateaus along the way. And then even in the middle market, lot of companies out there that hit 30 million, 50 million and they just stopped growing, they can’t get over that mark that they’ve made.
Folwell: And so with that, maybe we could just jump in and talk about the owner/operator or that first stage and go through some of the experiences that you guys have had with the challenges, the plateaus that you’ve experienced and some of the ways that you’ve gotten around them.
Kosnik: So really excited that. We have Dawn and Mark here because they’ve been with companies as small as 1 million in revenue. And one of the things, and Dawn and Mark, you can either confirm or say, “Yes,” but one of the big things that I see that stops people growing in the owner/operator is that they don’t necessarily need a business plan, but they do need a well-thought out sales plan. And a sales plan is going to be your ideal client profile. It’s going to be a value proposition, a prospect list, who are you going to call, what are you going to do? Almost a sales/marketing plan. And of course you’re going to have include goals, hard goals, and then some kind of a financial model that’s going to back that up, back that plan up. And David, if you don’t plan what you want to do, then you’re basically at the mercy of the competition or your clients. So if you’re not going to decide who you’re going to be in the marketplace, then you’re deciding to be a 100% reactive to whatever’s happening in the marketplace or whatever the client demands are. It’s so easy to see from the outside, not so easy to see when you’re in the day to data. And Beth, Dawn and Mark, you all can jump in and….
Holland: I’m happy to ramble a little bit and Dawn, you run a much bigger organization than we do, so look forward to hearing what you have to say. And we’ve talked on many occasions, but as I think about this whole process, I agree with everything you said, Tom. The things that come to mind for me, the power of my network, and that includes the team that I’ve surrounded myself with and we’ve always tried to hire a little bit ahead of the curve. Our most recent gig was John who is in-house counsel and with all the acquisitions and stuff that we do, and then he is high-level HR. It’s just been a critical addition to our team. But more importantly, like YPO Young Presidents’ Organization, it’s now just YPO that has been instrumental in my success, my connection with you, Tom, and our networking group. Being able to associate with quality talent like Dawn and others where I can pick up a phone and call you, call a fellow YPO or call Dawn or all the other great folks in our networking group.
There is nothing like that. I mean the power of those friendships and a friend in need and all that stuff. But it’s the same if somebody picks up, somebody calls me from Visus or from YPO, I answer the call and it’s the first call returned if I can’t. And so I would start with the power of that network. It extends to part of our purpose, Dave. We talk about partnering with our employees, our clients in the community. And that community piece is really important to me. I sit on a small handful of other boards that are quite diverse from nonprofits to for-profits and things that I’m interested in. And so what I find is those outside connections like to say, “Well, how does that help in business?” And sometimes it’s hard to draw a linear connection, but what I find is that over the years, those friendships and the lessons that we learned from them become part of who I am. And there’s an old adage that says the five people that you spend the most time with is going to determine who you are. That’s who you become. And so as I think about my network, it’s very important for me in those networks to surround myself with the people that are mentors to me that are going to help me to become who I want to become and stay away from the trouble because it’s out there. And so….
Kosnik: Mark, just a couple, it almost sounds like an informal board of advisors that these networking connections and then the other piece is the question for you, how accountability. You get an idea in your head, I get an idea in my head, Dawn gets an idea, and sometimes we get so locked in on that idea. I want to get into this state, I want an open office. So do those friendships, do they offer you, accountability is not the right word, but maybe input on that decision maybe even sometimes when you don’t ask it?
Holland: And so how does, number one, it could be lonely at the top and all the owners and operators understand that definitively. So how do we have voices around us, especially for those that us are quite type A? Well, “I know what I’m doing and so get out of the way.” And, “Calm down. Mark. There’s another perspective here.” My COO, who Tom and Dawn know, Rod Kearl, is that guy for me. And then my YPO forum is that crew for me. We actually have an advisory board. We actually met today, we meet three times a year, five or six folks that are from very different backgrounds and three or four of them know me well enough to pull me aside. They don’t embarrass me in public, but they’ll pull me aside and I try to honor them with the same stuff. “Here’s another perspective.” And, “Perhaps we’re going a little too fast.” Or, “Perhaps we need to do a little more due diligence,” or whatever the case may be. And so finding people that can push back on me and not offend me because I have a fragile male ego, but having those people around me is quite important. And so to your point, yes.
Meyers: 100% I would agree with that. And I think that’s actually one of the things that we’ve gotten out of Tom’s group, out of Visus group, is having people that will tell us if we’re making a stupid decision. You guys don’t hesitate to tell me that we’re making a stupid decision.
Kosnik: That’s very good.
Meyers: I appreciate that because internally because of my title, people aren’t as willing to maybe share that feedback even though you try to create a safe space. But people always have a little bit of internal anxiety on pushing back as hard maybe as they should.
Holland: You’re the boss.
Meyers: But back to the original sales question, I would say my biggest piece of advice for owner/operators is hire someone to sell for you. Because if you are the owner/operator, then you’re probably also doing three or four other jobs. And while you probably are also a naturally good salesperson, that tends to be who starts companies, right? You’re not doing it and you really need someone who is focused on growing your business all the time, that doesn’t mean you can’t still sell, right? You can partition it out based on target company size, based on geography, lots of different options if you want to keep your hat in that game. But I do think that it’s extremely important to hire someone to sell for you whose only job is to grow your business.
Holland: I really appreciate that. As I think about going from a little over 3 million to north of a hundred million, letting go, and we’ve all seen this, there’s entrepreneurs. It’s the hardest thing because no one can do it better than we can. We started each this business and we know the path. And a wise mentor of mine that shared with me maybe 10 years ago or so, “If you find somebody that you think can do it 70% as well as you, and it’s not one of the two or three mission critical things that you do, let it go.” And what I’ve often found, if you take Rod, who was my first most important hire, six months it took me to get him, but eventually I did. He’s so much smarter than I am in that world, and I didn’t see that in the beginning. I mean know he was good, don’t get me wrong, but Steve, our COO, he is a much better sales operator than I am. And so I’m thinking 70%, but I think often if we just think it’s 70%, what ends up happening is it’s 110, it’s 140%, and that letting go, this is the classic entrepreneurial trap that just gets us stuck. I’ve got to be able to let go or I cannot grow.
Folwell: With that. When you’re letting go and finding the right people to kind of step in, how do you go about making sure that you have the right person and that you got the person that can come in and fill that seat?
Holland: Yeah, so we were talking earlier and Tom mentioned about a time that we were stuck and Dawn said, “No, you were just resting.” And I said, “Thank you Dawn,” and, “No thank you, Tom.”
During that resting period, we had a bad hire that was our director of sales and we learned a lot of great lessons from this because we’re a business of friends. I had a conversation with a fellow YPO and his thing was, “I don’t want to know about your family. We don’t do Christmas parties. You work hard, I pay you a lot of money, you go home to your family, I go home to mine.” I’m like, “That is so counter to who I am.” And by the way, he’s more successful than I am. But for me being surrounded by the people that I love, I want to know what’s in their hearts. We spend a lot of time developing intimacy and trust to build strong teams. The downside of that is that one day we can wake up and look around the table and we’ve got lots of friends, but we’re going nowhere.
And this five-year period that you were correct in Tom, that we were stuck, that was a function of me not having the courage to make a change because I really liked the guy that was with us. And what came out of that is the need, and we were in this plateau that happens regularly and if you want, I can talk more about my perspective on that. But we were stuck in that vortex of trouble, if you will, and what we were doing was not going to get us to the next level. And this is when we really started paying staunch and fierce attention to metrics. And so this whole idea of holding people accountable, “Here’s what you said you’re going to do. Here’s what we need you to do. How did you do?” And then our best cut at this is being able to let people know that they’re not performing. Something has changed and it’s time for them to leave as opposed to us like having to be the bad guy to our friends. And we have a very patient process that takes us through that, but what we found was that it just makes it safer and better for everyone. We all know where we’re at and where we’re going and how we’re going to be measured and it’s helped reduce those stuck periods that are so miserable.
Meyers: It’s funny you should say that because we actually, we use a process for our hiring. So we have scripted interviews, but we actually start with the end in mind and we start with the scorecard, “So what is it that we want this job to accomplish, this role?” And so we write out all of the year end objectives in year one. What do they have to have done by the end of the year? Then we write the job description and go hire for the scorecard. Randy Street actually is the one that came up with the process. It’s called the Who process. And when you had that conference in Boulder a couple years ago, the Staffing Hub conference, they actually, you had five of the top 10 staffing companies that were there. Three of them held up that book and said, “It’s probably the best thing I’ve done.” Which we actually were already doing it as well, so wholeheartedly agreed with it. We’ve been doing it I think for about 10 years now, but it has been transformational for us because it just takes out that gut decision. You’re not making a gut decision on your hiring anymore. You’re making a strategic decision based on a scorecard. And then you have to review that scorecard with them and rewrite it every single year. That’s really helped us with that. Because I think before we did a lot of hiring on airplanes. Person sitting next to you have a long flight. By the time you’re done, they’ve got a job.
Folwell: It sounds like both, I mean both of you have talked a little bit about the metrics and having a standardized process for that. How are you guys coming up with the metrics or using industry standards? Is it something that you’re coming from using from what the books suggest?
Meyers: We do that a couple of different ways. It depends on which metrics specifically we’re talking about. We do use SIA for a ton of the data they put out. We actually very often participate almost every, actually in their benchmarking consortium study so that we get those results back from everybody else. So that we can see how we measure up there. That’s been certainly helpful. The other thing we will do if we don’t have access to metrics where we can see where we are or where other people are doing, then we basically just start with benchmarking and then drive up from there.
Holland: Yeah, ours has probably been a, not probably, it’s been a culmination of lots of data from industry experts and books and so on over the years. It boils down to the old adage, “Hire slowly and fire quickly.” And so with respect to that, I mean we’re going to have a handful of people touch you with very scripted, like you say, Dawn, questions. Some things like meeting the spouse or the significant other that’s mandatory in our process. Like I was interviewing for a controller one year and it was over lunch and my wife was there and the candidate was there with his spouse. And I said, “So tell me what you think about this opportunity?” And she goes, “I know nothing about it. You tell me.” That may be a pretty good indication that this is not a long-term commitment for this guy. And so a lot of good things, little things like that.
Another one that I find very important when it comes to reference checks, call somebody, give us a name and check it off for us. We want your last three employers and we want to talk to them specifically. And we get a lot of, in today’s world, “Well, I can only give you name, rank and serial number,” or “Talk to my secretary.” And our last call is, “Look, Barbara, this is Mark Holland with the Ascend Staffing, and if I don’t get a call back from you, we cannot hire this person.” And so now we know are they going to cost this person their job? If they don’t call me back, that’s a pretty good indication. If they do call me, it gives me another message. And so I think having a very process-oriented, like you talked about Dawn, and we’ve learned a lot from you and Malone having a very secure, I mean a very methodical process that takes us along the path.
And then the other component of that is you’ve got a 90-day window to perform. Now if you’ve been with us for a year or more, you’re going to have a lot more breathing room and we’re going to spend a lot more time mentoring and coaching. But the first 90 days, we need you to get going and get going now. And we’re not going to have a lot of patience or time if that’s not happening. So I don’t know. When it comes to hiring, I find that to be so closely tied to the hiring process, hire slowly, fire quickly.
Folwell: That’s really great.
Meyers: As CEO, one of the things I learned is don’t say that out loud to your staff. Did not go over well.
Holland: That’ll be confidential to us and the listeners.
Kosnik: We’ve moved into, I’m curious the hiring process, sending the metrics, where were you? Were you in the middle market stage, Dawn and Mark, when you woke up and said, “Gosh, we’ve got to get metrics. Gosh, we’ve got to get systems and processes.” What size were you when that light bulb went off?
Meyers: Malone was about 120 million. And I know that because their first person they hired when they put in that process was me. So I was their test case for the interview process and they were still figuring out their questions and stuff, but it happened before I started here, but that’s about how big we were.
Holland: I think ours has kind of morphed over time, so we were a lot more like you talked about Dawn, the airplane conversation. But it’s grown and gotten more sophisticated and more helpful as time has got on where it sits today. And I don’t know when we formalized that list, maybe 30 or 40 million bucks and then it’s in revenue and then it’s kind of cleaned itself up and gotten better as time is. And we learned from our mistakes and we learned from our networks on things we can do to improve it. So it’s been constant. I’m sure you’re the same way, Dawn, but probably somewhere in there.
Kosnik: So okay, owner/operator, whoever, the man, the woman, the couple at the top, everybody reports into them, but then when you transition into a middle market, then your roles as president or owner changes where your focus is building a management team, VP of sales, VP of ops, VP of HR. I want to ask a question and that is, well of course, Mark, you mentioned about letting go and bringing people in. But where a lot of clients and prospects of ours struggle hiring salespeople and recruiters. But so hiring that level of personnel and then how do you let go but hold accountable?
So I’ve seen stories where business owners will hire somebody, oh, this guy came from Aerotek and then they walk away and the Aerotek guy destroys the guy’s business. I don’t know how many times I’ve seen this, and this is not like a business owner that was irresponsible or anything. But the business owner just doesn’t know this is a whole new job description for him or for her. So the question is that when you hire, when you’re building your management team out, you’re growing in the middle market, you’re hiring that senior management team. How do you let go yet also hold accountable and stay close enough where you can influence decisions?
Meyers: I think you hit a couple things there and one I will say just totally off topic, but kind of on topic is that one thing we have found is when you hire from the really big companies and you’re not a really big company, it doesn’t really work. Typically, their jobs are much more structured and much more, “This is your lane, stay in it.” So that they’re not necessarily as entrepreneurial or as swift and easy to make the changes as those of us that have grown up in family-owned or mid-market companies.
Holland: I Agree. They need support structure, they need sophisticated systems perhaps, and they’re out of their element.
Meyers: Yeah, it’s really hard for them to come into our world and be as successful.
Kosnik: So that’s like a cultural match then, right?
Meyers: It’s not just culture. I think there’s a skill gap there too. Not necessarily a skill gap, a skill difference. Let me word that differently. It’s not that they don’t have lots of wonderful skills, but they haven’t had to be their own IT person and marketing person and admin and you know what I mean? Whereas those of us that have come up in middle size, mid-market sized, so I would advise to not pursue. I think we get enamored with the name of the company they came from and think, “Oh wow, they’re going to be able to teach me so much.” But the reality is they probably had a very strict lane that they had to stay in. Even at the senior level. They’re pretty well-defined jobs and they don’t necessarily have the breadth of experiences that those of us that came from smaller companies do. But in terms of when to let go, I think for me it’s different with each one of my leaders.
When I bring in a new leader, I have a couple of people on my team right now that are senior-senior level positions, but they’ve been with the company less than a year. I have more one-on-ones with them than I do with anyone else on the staff. I get more granular with them than I do with anyone else on staff and it’s scheduled and I hold myself to that. Because even if they’re not asking, I know they need the advice. They need, the mentoring. They need even just to know how to navigate our own company structure and how do I get things done within the structure here? They need that. So for me, I would say it’s not necessarily a magic number. But you know it when they’re bringing stuff to you and they already have the solution in mind that you would’ve talked through with them. Then that’s when I start letting them go and letting them make their decisions on their own.
The other piece is we have financial goals that they have to hit. So if I can see very clearly that they’re managing to the numbers that they’re supposed to manage to and making those decisions solidly that I’m more confident in letting them go.
Holland: Yeah, I concur with everything there. One of the interesting things that I find that we constantly get ourselves in trouble with is all the stories on why somebody may not be successful. And those stories tend to get passed along and when it’s all said and done, especially for the new people, it’s managing by the numbers. Those first 90 days, the numbers are hypercritical for our company, and I don’t know if you know Verne Harnish, Scaling Up and early influencer in my life, our daily huddles, we’ve been doing those for 25-plus years, maybe 30. Anyway, good news. What’s your number-one thing you got to get done today and then what’s your daily number? And when we’ve got our two senior vice presidents reporting their daily number and they’re growing, that’s some positive reinforcement. If it starts to slide, then we’re going to get a little more granular and understanding where the issues are coming from.
But in our monthly meetings, what are the three to five most important things we need to move the dial and top customer relationships, new gross profit, what’s our wallet share for existing businesses? And these can float around a little bit based on who we’re visiting with and so on. But that’s a monthly thing and people say, “Oh, monthly evaluations, I got eight direct reports.” The key to that for me is a 10 to 15 minute review and with the exception of my CFO, we’re pretty good at sticking to that every once in a while. My COO, we need to get into some metrics, but generally keeping that 10 to 15 minutes and being dedicated and committed to it because if we’re focusing on the three to five things, why is new GP slipping? What’s happening to wallet share with our number-four client? These kind of discussions really help to get us focused in on what’s most important.
And then ultimately we’re managing by the numbers and we begin to really embrace you as a family member after we get past those 90 days. And I know that sounds tough and it sounds harsh, but we’ve just found that the most important people to us are the folks that have been with us for six months and beyond. And that’s where we really start making the deep commitments emotionally, those first 90 days, please just hit your numbers and this is going to work out. And then that’s just a regular weekly and monthly follow up on “How we doing on the metrics,” kind of like you alluded to, Dawn. You said specifically the plan. What’s that plan? Are we executing on the top two or three things that we need to make sure we hit?
Kosnik: Wow, I like that. So for anybody listening, we’ve moved into the discussion of the middle market. And another topic that I want to ask you two about is the financial, the controller, a bookkeeper to a staff accountant, to a controller to a CFO. And again, many times I walk into companies that 80 million, 100 million, 120 million and the whole financial function within a company is understaffed. So when do you know when to make those personnel? Because in the end, another one of the problems with being stuck in the middle market is no financial modeling, no good reporting. “Oh, I want to do a little acquisition, but the guy on board that I have has never done one before, doesn’t know what to do.” You know what I’m asking?
Holland: Sure, yeah. I mean, I think about my most important hire, it was Rod and at 3.4 million hiring a CFO may have sounded, especially because we were burning cash like crazy. But I needed that guy and what I got, what’s the difference between a CFO and a controller? In my mind, strategy, big picture. A controller makes sure that we’re crossing the t’s and dotting our i’s things are flowing like they need to. But a good CFO helps the big picture. Rod is my strategy guy. He fills the holes that I don’t have. So how do I know about with timing? I mean honestly, Tom, our time spent together in a networking group, that’s invaluable. I think I know and I talk to my YPO friends, but they’re in different businesses. I read articles, I read books. Well, here’s the threshold that you should have a COO, or whatever the case may be, a sales manager.
But really the boots on the ground and being able to network with you, Dawn, and some of the other great colleagues that we have. You compare notes and it becomes pretty clear what those timeframes look like. We all have our differences of opinions. Some of us may be more sales-driven, some of us may be more large-accounts driven and so on. But it all comes together. And so I think your knowledge and consulting that you’ve given us some has really helped us along the path. I haven’t really said, “Well, at this threshold we need that.” It’s been more of a collaborative effort with my colleagues in the industry and we’ve kind of come to that and grown through that together.
Folwell: One of the other things I know that we had talked about, Tom, is with the product lines, with diversification of going into new channels. Is that something that you guys have found there’s a specific timeline for that or a specific moment with your growth when you’re like, “Hey….”
Kosnik: It’s line extension.
Folwell: A line extension?
Meyers: For us. It’s when you have the talent, right? We’re willing to fund what it costs to grow a new line of business. But you have to have someone who understands that industry and fits your culture and is willing to grow that out for you.
Holland: Have you had that happen through acquisition, Dawn? You had that happen through acquisition, you bought in a company that had a sector that you kept going with?
Meyers: Yes. Yeah, our healthcare division actually came through an acquisition many years ago. Our government division did come out through organic growth and we ended up merging two because believe it or not, all of our government business was healthcare. Anyway, but yeah, that one came from organic growth and then professional search, it didn’t come from organic growth. We actually started as a professional search organization. But some of the talent that we brought in allowed us to get into different lines, even within professional search of let’s focus now on IT instead of just engineering or what have you. But for us, it has mostly been driven by the talent.
Kosnik: Okay, so you’re well north of 100 million in revenue, but if you were sitting at 30 million in revenue….
Meyers: Valid question.
Kosnik: Do you stick to your guns and grow that to 50, 60, 80 million before you go buy a healthcare staffing business, spend all your pennies?
Meyers: Well, I think you can get some of the talent not necessarily through acquisition. You can get it just through traditional recruiting methods. And we have certainly done that as well. So certainly, yes, there is a little bit more ease when you are in a position to be able to fund an acquisition or a non-profitable line of business for a while, you do have to be able to stomach how long it’s going to take you to get from where they are to where it’s going to take them to make money.
Holland: It’s interesting for me to think about when I got started in the business. I think I mentioned we were a bit of a turnaround mess and we were trying to be all things to all people. And we very quickly learned that we needed to get focused, which means we jettison the high-risk stuff, including stuff that we weren’t like, we shouldn’t be placing lab technicians. We don’t do the proper interviews for the controller. This is crazy. And we got very focused on the light industrial sector and for the most part, that’s still what we’ve done. Now we’ve had forays into other worlds. We had a very successful PEO. I spent a half a million dollars trying to get into technical, and it was a miserable failure. A lot of these things are the life of an entrepreneur. “Let’s give it a go and see what happens.”
I think being able to do that and be happy to know that you’re going to fail a lot of them, that’s okay. Because the two or three that are home runs are going to be quite interesting. We have a small medical staffing company doing about five and a half million this year and growing very well and very excited about its future. That was kind to your point, Dawn. It was a close friend of mine that worked for a large medical staffing company that needed a change. And so being kind of opportunistic, keeping the door open, but I am a huge proponent of sticking to what we know, and that’s light industrial, that’s manufacturing, assembly production, warehousing, that kind of stuff. And 90%, 85% of our businesses is in that wheelhouse.
Meyers: I would agree. We don’t have that many lines of business either. We tend to stick with really most of our businesses is light industrial. Healthcare has been a significant portion, but within that, we will have people, well, “Let’s get into education or let’s get into….” Actually let’s focus and make sure that we’re excellent at what we’re already doing. And if we want to get into education, it should be something that we do that’s strategic and that we’ve vetted out the industry and we know what that’s going to look like and we know that we have the talent to fill it and a network within it.
Holland: They can be huge distractions to the point of crushing your company, killing a year’s growth or so.
Kosnik: Can we spend a little time at getting stuck at the enterprise level? So we, all three of us know, a number of staffing companies that have been between 250 and 350 or 200, 400 and have never been able to grow past that. What do you see as the big obstacles to hitting those plateaus? Why do those firms get stuck there?
Holland: I think honestly, Tom, a large part of this is just being mindful about it. I mean, folks get to a certain age and the risks become less exciting and the cash flows become more exciting. And so I think there’s a natural tendency to say, “Hey, this is good enough. I really like it, and I don’t want to take big risks anymore.” I think that the concern that I would get in with that, I mean our purpose statement talks about growth and opportunity. And so we’ve always been about growth and opportunity, and I personally fear that if I take my foot off the accelerator, it changes the dynamic of our culture. People that are expecting opportunities aren’t as interested in sticking around with this. So I tend to find, and I don’t know, if you think of kind of a sideways and then build another one, this intersection, the top of the first one, the bottom of the second one, these are these periods of turbulence.
And I talked around that five or seven-year period where we were in this period and you got to figure that stuff out. You got to figure out what was working and got to where you are is not going to help you get to the next level. Does that mean you need a new sales process, a director of sales? I mean, for me, this journey has centered around systems, processes, getting things codified, so it’s more replicable. It’s less about the family affair, although it’s very, very important to us. And it’s metrics driven. So we can have both. And then I also think that once you get to a certain size, and I’d be interested in your thoughts on this, Dawn, but acquisitions have become a very important part of that for us. Maybe half of our growth has been acquisitive. And so we’re quite good at being able to pay a fair price and be able to turn that into something that works for the seller and for the buyer. And then to grow with that, using that for expansion and so on. And so you get these instead of this turbulent linear growth, every once in a while I get a “whoop.” And that’s not all bad. And so I think having that kind of philosophy for us and being able to continue to make the investments and some risk in making a bigger bet and not worrying so much about the cash flow, that’s the only way I know how to do it.
Meyers: I actually agree with everything you just said. I mean, first you have to want it. I mean, you’re probably going to go, forego profits for a while to fund your growth. I mean hopefully not all of your profits, but certainly a large chunk of that in order to, whether it’s through acquisition or just through hiring talent and putting in the infrastructure that you need, you have to really want to do the hard work that it’s going to take to grow. And I know….
Holland: Don’t you find, and sorry to interrupt, but don’t you find that that all takes care of itself? Because along the way, our profits just keep continuing to grow and I’m like, “Oh, well I keep making more money and we’re more successful, we have more opportunity.” I didn’t mean to interrupt you, but it’s kind of interesting how that, I don’t worry about it, but it comes together somehow.
Meyers: Yeah, I would say we did a couple of really big acquisitions that maybe stumbled that for a little bit where we weren’t, it did take us backwards for a little bit. But then we were able to launch from an even bigger launching pad a year and a half or two years later. So it certainly required the sacrifice during the time that we were making the bigger acquisitions, but it put us in a different spot. And right now we actually have not done an acquisition in six years, which is a long time for us. But the last one we did was the same size as us. So that was a really big one to swallow. And it took, we’ve certainly taken that off in a couple of chunks, not all at once.
And then after COVID hit and our healthcare division grew so much, it just wasn’t really the right time for us to do it. We are now back in the hunt and looking to do acquisitions, but if you figure what our organic growth would be year-over-year, I mean even if we’re growing at a pretty solid clip consistently over time, it takes a really long time long to grow that. I mean, you’re not growing at 50% when you’re that size. You’re growing in five to 10% increments in organic growth. So if you’re not doing acquisitions, you’re going to be stuck and that may be okay if you’re just looking.
Holland: The thing I have admired about you guys though, Dawn, is during COVID, you saw that opportunity in medical and I think it was the nursing, the….
Meyers: Travel nurse. Yeah.
Holland: Travel nurses. I mean, your timing was perfect. Your execution was brilliant. I mean, that’s, in my mind, that’s so much better than acquisition. And then you ride this thing and it’s so successful and you’ve got your hands more than full for an acquisition.
Meyers: We had, that worked well in our favor, but we actually had the medical division before that and had had it for years. We just had not been able, same thing, we’d kind of been stuck. We were operating that as an individual division, so it had its fully separate P&L. And we were sitting there at about 20 million in that division for years and years and years until COVID came. And that allowed us to, forced us, better way to put it. It forced us to either grow or stop doing what you’re doing. So I would love to take credit, but it felt more like a ride we were taken on than a strategic decision that we made. But really grateful it happened either way.
Kosnik: That’s great. So 55 together, the two of you 55 add another 30, 85 years of experience here. And David another, of course, he’s the youngest-looking one of all of us. So as you know, 90% of the industry is under 15 million in revenue. And then a big chunk is that middle market. What one piece of advice, based on your years of experience, would you give. Okay, Dawn, somebody hires you to come to grow an owner/operator business or somebody hires you to grow a middle-market. What’s one piece of advice you would give somebody who’s in that role now?
Meyers: This is going to be shocking coming from someone who’s had a career in staffing, but it’s all about who you hire. Hire people so good it scares you. That you look at their resume and think, “They could do my job.”
Kosnik: “I can’t afford this.”
Meyers: Or, “They’re going to be better than me,” right? I’ve had those thoughts when I’ve hired someone before of like, “I’m not sure that’s a great idea. Because they look better than me on paper.” But you know what? You have to hire people that are better than you and you have to consistently make that your intention.
Kosnik: Do not backfill. Right?
Holland: Right? Wonderful advice. This is very complimentary to that, but I’m a huge advocate of, in spite of what I say about the 90 days, if you get past that with us. Like at our board meeting and it’s very similar to our monthly meetings. We start every meeting with our purpose statement and a value story about how we screwed up or how we did better with it reinforcing one of our values.
And the other piece is we do a very deep dive into a “get on board question,” something that’s helped shape you as an individual today, the toughest thing you’ve ever done. And after a hundred of these questions with your colleagues, you get to know what’s in their soul and somebody irritated you, they get a lot more slack. Somebody needs a little bit of help, more than willing to pitch in. And so I think you hire properly and like Dawn said, and then you take those people and you build them into a team that you love, that you want to spend quality time with that you want to be able to share your challenges and your frustrations and those things that are of the heart.
And when we do that, we realize that we’ve got a team that we can trust. And with that trust, you can change the world. And we do it. I mean, it’s marvelous the things that come out of that.
Kosnik: That’s great.
Meyers: Actually, we do something very similar. We actually partner with a company called Character Core, which is about training for character. So every month we have a different character quality that we run through with our entire staff. For January, the quality of the month is positivity. For February it’s honesty. And we train to the character core, but we also praise. All praises that come through the organization have to be about the person’s character. They’re not about the activity that they did, but about the character that led them to complete that activity. And then when we correct somebody, it’s also based on character. It’s not about, I mean, it might be about your metrics, but it’s also about the determination and the persistence that you didn’t have.
Holland: How wonderful is that? Wow.
Meyers: It gives us a common language and it gives us an expectation of good character from each other. We all know that that’s the expectation. So we actually have character words in every single office, like definitions and everyone actually, it’s funny, it’s sitting on my desk. This is the character quality for the month.
Holland: I love it.
Folwell: That’s really great.
Kosnik: The recognition. People want to be recognized. It doesn’t cost a penny. And it’s such a powerful message to any employee.
Meyers: And when you recognize someone for their character, they recognize that is true. Your own character, if you are positive or if you are honest or whatever. And the way they have you do it, you have to illustrate how they did it. It’s really powerful. I mean. We have people that go home and do it with their kids because it’s really good.
Kosnik: That’s fantastic.
Folwell: That’s really great. One of the questions from a personal standpoint, you guys talk about the growth plateaus in these different stages. From a revenue perspective, how do you recognize when you’re hitting a growth plateau, when you need to make these changes? What are early indicators as an entrepreneur that you’re like, “Hey, I’ve got to make some changes here.”
Meyers: Changes within the structure? Or changes within your organization?
Folwell: When you’re like, “Wait, maybe I’m at a growth plateau and I need to do some things differently.” Or is it something that you, it’s like, “All right, well, revenues plateaued for two years.” I mean, Mark, you mentioned a five-year plateau. Is there a path where you could have said, we caught that three months in and shifted it faster? Or are there things that you, how do you….
Holland: Yeah, it’s a really good question. And part of it is you don’t know what you don’t know. Right? But I think some of the symptoms are going to be stuck. “We’re stuck. We’re stuck.” And five years is way too long. Unacceptable. But I think a year, two years in this turbulence and you begin to realize that there’s dysfunction, things aren’t getting where you need to go. Clients aren’t as happy as they used to be. And so as you just kind of look at the big picture, the strategy, you begin to see the holes that things aren’t, “We need a better system here. Why aren’t we measuring that?” And then I think the other thing that becomes very, very powerful, and I keep coming back to this, but the power of the network. And so I’m sharing with Dawn because we’re small than they are and trying to help people that are smaller than we are. “I’m stuck with this issue.”
And once we counsel together in this powerful Visus group of eight or 12 CEOs, this is my issue and I’ve got a half hour or an hour dedicated to it, you begin to see the patterns and others, “Oh, well, been there and done that. And here are a few things that work for us.” And I get the opportunity to do the same thing. And so I don’t know, Verne Harnish has a great dialogue on this, by the way. I mentioned him earlier and he talks about these vortexes that we get stuck in and he puts revenue numbers on them. And I think that that works for many companies. I think the ability to recognize and internally is much more difficult. And so as we’re talking about it and sharing that external feedback, whether it’s our advisory board or my colleagues at Visus or YPO or some of the other things that I do, that is a big component in helping me along the way, David. Getting lots of outside feedback and, “Hey, how are we doing?”
Meyers: Certainly, I would concur, and I’ll tell you personally, I seem to recognize it the best once it’s in the rear view mirror. Never can seem to see it in the moment, or at least not as quickly as I want to.
Folwell: That’s great. And I mean, we’ve talked about a lot of areas where you guys have been stuck, different ways to solve that through your network, through learning. Are there any other things that you wish you had done sooner in your career, things that you wish that you had just stepped up and said, man, “I wish I’d done that.” Learning a lesson, whatever that may be?
Holland: I mean, I’m like many CEOs. I don’t have a lot of guilt or regrets. And that doesn’t mean that I don’t have, but the way I view it, David, is, “Whoa, that foray into technical, it really didn’t work very well at all. And so let’s deconstruct it and see what we didn’t do.” Well learn from it and move on. And so I think this is the way I try to live my life as a CEO, as a father, as a husband. And by the way, of those three, Wendy’s the most important person in my life, my family comes first. It’s certainly not my business. And I’ve owned that and I’ve lived by it and held myself accountable to it. And so I don’t know if that helps.
Folwell: That’s great.
Meyers: I would agree.
Folwell: Tom, I don’t know if you had any other questions or we want to jump into the last round of speed questions as we’re rounding out here.
Kosnik: That sounds good. Let’s jump into the speed questions.
Folwell: Alright, so three quick questions for you guys. In the last five years, what new belief, behavior or habit has most improved your life?
Holland: Right now I’m in this journey and then Dawn, the next one is yours. Good luck. Okay. So I’ve been on this journey about the five people that I spend the most time with or who I’m going to become. I think we talked briefly about this, but being very, very mindful about who those five people are. For example, I’ve got an upcoming trip this week and I’m going to be spending a week with three of those five people that I love and I want to be closer with. So that’s been one of my top journeys and it will influence me personally and professionally and other ways, too.
Folwell: That’s great. And what are the bad recommendations you hear in your profession or area of expertise? I’ll go to you Dawn.
Meyers: Bad recommendations that I hear. Gosh, I’m sorry, I can’t think of anything off the top of my head on that one.
Holland: Ask them a different way for me.
Folwell: What are the things that say in staffing that people are like, “Oh, you’ve got to do this. This is a must do when you’re…” and lead you astray on your path.
Meyers: Spend a billion dollars on your technology.
Kosnik: That’s the next podcast there, David.
Holland: Truly, truly.
Meyers: You don’t have to have every new product. You really need to figure out what’s going to work for you and with the systems that you already have. And how well is your team even going to use it or implement it? You don’t need everything.
Folwell: That’s great. And maybe this one will do all three of you guys. I’m very curious to know just what is the book or books you’ve given most as a gift and why?
Holland: I read a lot. Tom has good recommendations he sends out each month. I think the top of my list would be Good to Great by Jim Collins. It’s like my business Bible and it’s getting to be a classic, but I refer to it a lot. There are many great ones, The Five Dysfunctions and a lot of current stuff that I read. But I think the ones that are probably indelibly embedded in me, the earlier ones, like How to Win Friends and Influence People by Dale Carnegie. Yeah, I mentioned Jim Collins, The Five Dysfunctions. Those are three core books for me, and I like a lot of readings. I could mention the new stuff, but these really have a great place in my business heart, if you will.
Kosnik: For me, it would be Wanting by Luke Burgis. So I gave that to all the round table members last February, March, Wanting by Luke Burgis. And that when you start reading that book, you’ll start to immediately start self-reflecting on your own desires and why you did this and why you desire that, and you’ll have a lot of engaging conversations with your significant other. But ultimately what I’m trying to do is personal development with my clients. So I’m a firm believer that if my clients are not growing, their businesses are not growing. And so Wanting by Luke Burgis is one of those books that really presents a lot of ideas and a lot of concepts to help executives, busy, busy, busy executives grow or develop.
Holland: It’s my current read right now, so very interesting.
Meyers: I’m an avid reader as well. I would say we love Patrick Lencioni books, so I’ve read dozens of those. Radical Candor. We did deep dive in that a couple of years ago just to kind of establish how we’re going to talk to each other and what that’s going to look like. Simon Sinek Leaders Eat Last, that’s a fantastic book. And then Lead Like Jesus is one that we’ve walked through with a lot of our stuff.
Folwell: Well, that was really great. Well, thank you guys so much for joining today.
Holland: David, wait, no, what are your books?
Folwell: Oh, I mean, Influence is a foundational book by Robert Cialdini that I think everybody should read. I’m on Audible going through one a week, but I was trying to think of what I’m going through right now.
Kosnik: That’s a fantastic recommendation.
Folwell: Yeah. Influence is one of the key ones. I always like hearing what everybody goes through. Good to Great is a good one. I’ve enjoyed most of the books that you guys recommended. Wrote down Wanting, unreasonable, Radical Candor. So I’ve got some recommendations from it. Well, I appreciate you guys joining so much, and are there any closing comments you guys have for the audience?
Holland: Thank you. I mean, the whole idea of that you’re listening to this podcast means you’re growing and you’re learning, and so I congratulate you and compliment you and keep up the good work.
Meyers: I would concur and just build your network. I would agree that that’s a foundational thing that’s important.
Kosnik: And 2024 is going to be a good year in staffing.
Holland: Yes, it is.
Kosnik: Right?
Meyers: It is.
Kosnik: So get that hiring process down and hire right kind of people.
Holland: Get that sales engine going. Get it tuned up. I agree, Tom. Words of wisdom.
Folwell: Alright, thanks guys. Have a great day.
