The Best Way To Build a Business, is Building People
The speaker contrasts traditional command-and-control management with transformational leadership, arguing that the latter—based on setting outcomes, providing metrics, and coaching—scales better and prevents founder burnout. Rather than telling employees what to do, leaders should define desired outcomes, give employees clear metrics to self-correct, and limit direct reports to five people to enable meaningful coaching.
Summary
The speaker begins by sharing his experience building three companies, noting that his first two failed while using a directive management style (tell, check, repeat) that he learned from his first boss. While this approach works initially with small teams, it becomes unsustainable around the 10th-12th employee, when the founder finds themselves drowning in emails, messages, and tasks trying to ensure everyone is productive, leaving no time for strategic work or personal life.
He introduces transformational leadership as the solution, which operates on three principles. First, leaders should focus on outcomes rather than tasks. Using a help desk example, he describes telling a new employee (Bob) that he will be the best help desk person in company history, painting a vivid picture of success (responding confidently, making customers happy even when saying no) without dictating how to achieve it.
Second, every employee needs a clear metric to track. Bob's metrics are time to first response and customer satisfaction rating. Critically, Bob posts his daily numbers in Slack himself rather than the founder checking on him. This allows Bob to self-correct daily—when he sees his numbers aren't good, he naturally wants to improve without being told.
Third, the founder should limit direct reports to five people maximum, with each of those having five direct reports themselves, preventing overwhelming span-of-control issues. Weekly one-on-ones are led by the employee (Bob drives the agenda), and coaching happens when the founder notices mistakes. Rather than attacking the specific activity (a bad email), the founder teaches the underlying principle so it applies to countless future situations. The speaker uses a coaching framework: share a story, cite specific examples with screenshots, teach the principle, ask for commitment.
The speaker emphasizes that transformational leadership feels slow initially but compounds as employees propagate and solve problems themselves. His core philosophy is "we build the people, the people build the business" rather than "I build the business and people work for me." The content concludes with a call to action for his Scale Workbook.
Key Insights
- The speaker claims that directive management (tell, check, tell next) works fine with a small team but breaks around the 10th-12th employee when the founder becomes consumed by managing daily tasks and loses time for strategic work and personal life.
- The speaker argues that when employees post their own metrics daily (rather than the founder checking them), they naturally self-correct without being told because they see their numbers and want to improve.
- The speaker contends that coaching should target underlying principles rather than specific activities, so that teaching one principle addresses a thousand similar situations rather than just one instance.
- The speaker limits his direct reports to five people maximum, with each of those having five direct reports, explicitly rejecting having 50-100 direct reports as a major organizational issue.
- The speaker advocates that employees should lead their own one-on-ones by sharing their agenda first, which creates openness to coaching because the employee invited the feedback rather than the founder imposing it.
Topics
Transcript
[0:00] Most people, and this is how I built my third company, first two failed, third one won, but I almost killed myself, is you tell people what to do, you check that they got it done, you tell them what to do next. That's how my first boss did it to me. Makes sense. You know, hey, tell me what to do, I do it, check that it got done, and you tell me what to do next. Sounds like a winner winner chicken dinner. The better way to do it, cuz if you do it this way, here's what happens. First employee, no big deal. Second employee, no big deal. Third employee, no big deal. Fourth employee, fifth,…
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