How to Handle Employees Who Have (and Don’t Have) an Owner’s Mindset

[00:00:00] Hey friends, Ben here with Business for Unicorns, and today Pete and I are talking about how to manage employee expectations. And there’s a quote from a Pete book, a book that Pete read around. Employees are doing a time and effort game, but entrepreneurs are playing a results game. And oftentimes we impose our values and lens as an owner of how we see them doing things and expect them to be doing things different than their actual job description is.

So today we dive deep into how to manage those expectations, and if you’ve got an A player who wants to go above and beyond. How do you manage that and what do you do enjoy? I.

1, 2, 3, 4. Welcome to The Business for Unicorns podcast, where we help gym and studio owners create a business and a life they love. I’m your host, Michael Keeler. Join me and the business unicorns team each week for actionable advice, expert insights, and the inside scoop on what it really takes to level up your gym.

Get ready to unlock your potential and become a real unicorn [00:01:00] in the fitness industry.

Yeah. Hey friends. Welcome to another episode of The Business for Unicorns podcast. Before I dive in with Pete, I just wanted to ask, have you ever wanted to spend a day and a half with Mark, Pete, and myself? We’re doing that with the Gym Owner Masterclass. We did this last year. It’s sold out. We then opened more spots.

It’s sold out again, and this year on March 16th and 17th, you can join us in Warwick, Rhode Island, where we’re gonna be giving you. A peek behind the curtain in how we operate all of our gyms, what the top 1% of gym owners in the world right now are doing, and really just teach you the most important lessons we’ve learned in a combined 30 plus years of running our gyms.

So it’s only 149 bucks if you’re interested. Click the, so Ben, can I step all over your toes and correct you now? Yeah. I declared that this was on March 16th and 17th, which is May 16th and 17th. And when people watch back [00:02:00] on the video, they’ll see me. It’s tomorrow. Shake my head. No, because March 16th is two and a half days from now.

so sorry. Yeah, I had, I was reading my little thing. Yep. But, and you know what? I wanna chime in and say it might be a day and a half on paper. , but what we might undersell here, I think one of the most valuable parts of the first one we did last year was we all went out to the bar and to the restaurant afterward and got a meal together and had drinks and there were some spouses who showed up and there was a good vibe.

And I know that’s not part the 1.5 days of education we’re talking about. , but there’s a lot of people who just go to events like this so that they can engage with presenters or other people in the room in that context, and I think we do a good job of that at this event. No, that’s a good point. Michael and I were talking about that on a previous podcast, and I mentioned, not to toot our own horn, but it was like.

Perform better level education, [00:03:00] but like hanging out with your friends in the living room vibes. I felt like I knew a lot of people by first name. We got to chat at the bar and having nachos afterwards. Like it . It was like the community feel that is exactly what I want when I’m going to continue education places.

Yep. And they’ve got a great, nice, bright room. Not too big, not too small. You’re right. We could actually interact with every single person in the room in between presentations. I’ll tell you a funny story about that one. This is a Friday, Saturday event, or at least it was last year. Is it again this year.

Okay. Yeah. Yeah. Friday nights are my kids’ little league game and I coach and so I, I stayed like as long as I could at the restaurant and then I was like, I’m gonna sneak out ’cause I think Colin’s gonna pitch tonight. And it was like the most irresponsible, reckless driving I’ve ever done where I’m like following a stupid little league baseball app on my phone while driving on the highway.

And I got to a point where I was like, I need to actually put this thing in the backseat. And I threw, I remember I threw my phone into the backseat ’cause I was watching like a literal play by play. ’cause Colin did pitch and it was like [00:04:00] he threw a ball and it probably happened 90 seconds prior . And I’m on the highway watching this absolutely clumsy, terrible app update.

And so finally I was like, I, I can’t do this. And I just threw it in the backseat and I missed the whole game.

That’s funny. I’m glad you threw your phone in the backseat. Yeah, distracted driving’s not a good thing for, um, no, it’s not. Promoting the Gym Motor Masterclass and responsible adult driving behavior, we’ll do it all again this year. You. So your your pitch for this podcast I really liked. So kick us off with maybe the quote that you shared, because I think this is gonna ring true with a lot of Jim, myself.

Yeah. I highlighted a quote while reading recently. It said, entrepreneurs work in the results economy, whereas most other people work in the time and effort economy. And the reason this one jumped off the page of me is because it’s been a problem I’ve been battling for a long time. Maybe not a problem, but a reality for us small business owners with employees is that.

We don’t necessarily have an off [00:05:00] button. We, if there’s a fire, we put it out regardless of the time of day. There’s no scenario where you at your gym say, oh, I’m not on the clock, not my problem. When you find out something’s wrong, you spring to it and you deal with it. Never and. I think a lot of us small business owners with hourly or salaried employees have a unreasonable expectation for a behavior that mirrors ours.

I’d say ownership behavior without ownership perks. And I’ve had a lot of employees who have been trading time for money over the years, and I’ve had this kind of deep . Want for them to feel as emotionally attached to my business as I do. And why would they? It’s stupid to think I do. So I figured you and I could talk this one through, um, both from an experienced share standpoint and maybe brainstorm a little bit how maybe we could more effectively state our hourly [00:06:00] employees to think in a certain way without taking advantage of them.

Yeah, I love it. Those two, two good things. And I’ve gone through similar stuff with my, my gym as well, where it’s like, why aren’t my trainers doing that thing? I want them to care as much. Even when like Logic Brain, I know they’re not gonna care as much as me. ’cause if they did, they’d open their own gym and they care about it.

It’s still, it’s still like a friction that I will feel. It’s like, ugh. And I have to remind myself like, wait, they’re like, they’re playing a different game. I’m playing the results game. I’m looking at entrepreneurship is the delayed gratification to a t in a lot of ways. Um, sometimes more delayed than we even expected it to be when we started our businesses.

Our staff didn’t sign up for that. They signed up for, generally speaking, a purposeful job that lights them up, that has a regular paycheck attached to it, regardless of the outcomes of the businesses. We have pivoted over the years to we’ve come to real realize if you want something, you gotta pay for it.

Perfectly fair. And we just needed to start building language into employment agreements that we’re gonna pay you like a 48, 40 hour a week employee. We’re gonna [00:07:00] book you for 35 hours. We’re gonna have certain expectations that you’re gonna be a little bit flexible off the clock, where that gray area, that buffer of ours means sometimes you’re gonna take a little programming home with you during a busy time of year.

Sometimes I might say to you, Hey, can you keep an eye on the email account during this window of time where I’m gonna be traveling? Or something like that. And you know, you can’t just completely ignore. I don’t know about your gym, but in, in my world, I have found over almost two decades now that in the minds of our users, fitness starts on Mondays and when it’s like a, Mondays are like a microbe chasm of New Year’s Day when these resolutions happen.

They’re like these little mini resolutions that happen 52 times a year, where they’re like, I’ll get back on track on Monday. And that usually means that on Sunday afternoon or evening, they’re gonna fire off an email. And maybe ask for a new program the next day, or ask if they can get screened the next afternoon because they haven’t been in for a while.

Or ask a time sensitive question during a time where none of us [00:08:00] are or should be on the clock. And there are a time where myself or my business partners are reviewing the account for that reason. But there are other times where we know we’re just probably not gonna be able to, we gotta ask someone to pick up Slack for that.

As if I put myself in their shoes, I would really resent that if I wasn’t being compensated for some sort of wiggle room In that sense, it’s just, it’s hard when we make our initial hires as new business owners. We’re so specific in what our budget is and what we think we can extract value on there, that we just, we want more for less , for lack of a better term, and.

Stuff like that. Yeah, we wanna keep the lion’s share, but we want them to do share type work. So Ben, fix that for me. How do I, how do we change our collective mindset on that? Like, put me on the spot with that one. If I had the answer to that, I’d have more gems, but we’ve gone some through similar things from the experience share vein.

We used to have people on salary. Right now we don’t, everything’s are three coaches are part-time [00:09:00] and they paid hourly, plus they get a stipend. So our stipend is basically a, a mini salary and similar to your point of we’re gonna pay you for 40 and book you for 35. We made it clear when we were rolling this out.

I even showed them my math of how much I thought the hours were, and I included Buffer and each coach has an extra buffer of an hour a week, which is not like a ton. We’re not gonna give them a ton of work. But we also were clear that like our gym isn’t really that busy in December. Not a lot of gen pop people are like, they’re all waiting for New Year’s, and we’re not really that busy in the summer.

Because if you live in Southern Ontario and you can afford personal training, you can also afford to go on vacation for the most part. So like we’ve got some downtime. So it’s like you’re, you might go over that buffer on a weekly basis, but if you zoom out over the course of a year, you’re actually probably getting a really good deal in this and you don’t have to clock in and clock out, which none of us wanna do.

So there is a lesson in here that I think we’re both doing, which is whenever possible be as generous as you can. That doesn’t mean shower people and money and have your business go broke, but it does mean err on the side of generosity because even though [00:10:00] one in 50 people might take advantage of that.

The vast majority of people won’t. And that one in 50 was probably a bad hire. Oh, definitely a bad hire. I was having a conversation with one of our community members during a coaching call two days ago, and he said, when was your last bad hire? And I said, honestly, I don’t know that I’ve made a bad hire yet, because the conditions for being hired within our community are you have to complete an internship with us.

Now, I’ve made some bad intern selections, right? Because we need to streamline that process and there’s. Smaller consequences for messing up a poor intern selection than there are for messing up a hire. And so I haven’t really made bad hires because it takes, if you can pull the wool over my eyes for a three to 500 hour internship and like actually be a shitty person that convinces me, you are a good person, then you’re just a sociopath.

And. I got, I don’t know, I got unlucky, but very rarely, or I can’t think of a scenario where anyone I’ve ever [00:11:00] employed, even the ones that didn’t leave on great terms, none of ’em left because they stole from me, or they were like really massive integrity issues. They just, they left like the ones that left on tough terms left to compete with us.

But competition is the best motivator I’ve ever found in hindsight. So a again, I’m not even mad at them. Hey there, business unicorns, podcast listeners. I’m just making absolutely sure you have already gotten your free, instantly downloadable copy of my new book. The Little Book of Gym Marketing Secrets.

You can find a link to download it in the show notes, or you can go to gym marketing secrets book.com. I worked super hard to make sure this is a less than a 30 minute read and is a comprehensive overview of all the things you need to do to grow your gym, get more leads, more clients, and importantly, change more lives.

Again, find the link in the show notes where you can download your free copy at jim marking secrets book.com and now back to the podcast. Yeah. And to make this real for the gym [00:12:00] owner listeners, ’cause this is a conversation I’ve had, I dunno about you, but multiple times with BFU members, it usually shows up in the way of like, why aren’t my coaches getting more leads?

That’s probably the main one. Or why aren’t they getting us more members or more sales? And like first, a little bit, tongue in cheek here, a little bit sarcastically, but was that part of their job description? Did they explicitly agree that? Yeah. In addition to coaching the part-time hours, I’m gonna coach, I’m also a lead gen machine and I’m gonna get those for you.

And I have a comp package to go with that. And second lead gen is tough. Getting in the spirit of like the entrepreneurs are playing the results game. Like a lot of what we’re doing is experimenting along the way, or at least a lot of what I’m doing is experimenting along the way to like see what works and what doesn’t.

We’ve abandoned more than we’ve kept, but it doesn’t mean we’re not trying ideas and I don’t know if it’s fair to expect the people who work for us on a, you know, time for money type basis, for the most part to have the answers to problems that we have. Entrepreneurs haven’t totally nailed. Over however many years we’ve been doing this, and it doesn’t mean we can’t get people who can’t help [00:13:00] with sales or can’t get good at referrals or capture testimonials.

Like those are all trainable things. But I don’t know if it’s fair to us or them to be frustrated when that’s not part of their job description, their comp package, or their skillset or their desires for the most part. I know some businesses are set up, that’s part of the deal, but I think that’s rarer more rare than it is common.

Absolutely. More the exception than the rule. I also think that. Yes. A lot of gym owners do a really nice job of being thorough and meticulous about their onboarding, but they stop teaching some of these skills after you’ve checked the onboarding box. And, and I’ll give you an example where I’m not, I discovered a shortcoming of my own in the gym.

I was training, I. I don’t know, two, three days ago, and I was watching one of my newer, younger employees, personal training, a guy who’s been doing two personal training sessions a week with him for a good two plus months now, and spending real money with us. And it means that my younger [00:14:00] colleague is making good money because we don’t do much personal training here.

It’s not something we really advertise on the website. We’ll do it if someone asks, but we’re a semi-private model. Almost exclusively, and I found myself watching him coach him and thinking this guy has spent thousands of dollars with us now recently. Why hasn’t this coach asked him for a referral? Like, why isn’t he pointing out to him?

I really enjoy working with you and I’m getting the impression you’re making pretty significant proce progress. Do you have any buddies who I might be able to reach out to who would benefit from this? Just like you and I? Take for granted the fact that our younger coaches are not . Instinctually entrepreneurial in nature, and he’s doing an awesome job keeping that business around.

He doesn’t have this gut reaction to look to amplify the business in that capacity. He’s just, I’m here to do a good job in this hour for this person that I committed to, and I need to find some [00:15:00] time to pull him aside and be like, Hey, I’d really like to coach you up on how we could possibly extract some referrals from this scenario.

And I think my employees are far better than I give them credit for in doing this in the semi-private model. ’cause they just know how to interact with high school athletes and keep that snowball moving. In this one-on-one realm, that’s a whole different ball game as you and I haven’t coached him for one second on how to do that.

And until I do, this is my fault and not his. And I think us small business owners lose sight of that, that we assume knowledge that wasn’t even discussed in the first place. It’s definitely not in his onboarding material. So. I gotta do better. Yeah. To your point of Ben, solve this for me. I think you just pointed out the first most important step is if you’re not training them on it, and it’s not an explicit expectation that they’ve agreed to.

Like the first step is just reframing our expectations and redirect that frustration back to us basically as a opportunity to grow and do a better job. It’s like look in the mirror first type thing, [00:16:00] but a a piece I think that maybe is worthwhile explaining or going into today is. What happens when you do have that rare employee who does have that entrepreneurial spirit?

How do you not squash it? Let’s say you’ve built an awesome business where the staff members working for you are in that time and effort game. We in the results game, but you’ve got that outlier that’s, I really want to grow. I’ve got some ideas ’cause I’ve had one or two of those and they can be a bull in the China shop.

If you don’t direct them in the right way, you’ve gotta open the door so the bull can run in the right direction. So I’ve got a couple examples, but I’m curious, have you had been, well, there are two different kinds of people that you’ve just described, and it’s important that we emphasize which one we’re talking about.

There’s the perpetual entrepreneur who can’t stay focused on what they were hired to do in the first place, which is not who I think you’re talking about. Um. Those ones are really tough for me. They’re just like, I wanna make more. I need to make more. I have this idea, I wanna do this thing, I wanna do this thing.

And you’re like, did you write your programs on time? And they’re like, oh, sorry. I was really busy brainstorming that. But I don’t think that’s the person you were bringing up. [00:17:00] I think you were talking about the kind of the A player, the one who does their job and has some pretty good instincts and you can see it and you’re asking yourselves, where and how do I pour a little bit of myself into this person from a mentorship standpoint and.

For me, in the circumstances where that’s happened, I’ve had some success in incentivizing them to build out the programs that they’ve dreamed up and try to articulate for me and give them a lot of upside. In the case of my business partner, John, I think Eric and I saw that in him, and John knew he had it as well, and at first we incentivized them with a revenue share and then that became an opportunity to get an equity stake in our business.

But. We’re kind of talking about unicorns. What you’re mentioning is a real outlier, and I guess the best thing I can say is do everything you can to hold onto that employee and find ways to compensate them fairly and build with and around them. Yeah, I’m with you. I, the [00:18:00] way I’ve approached this, ’cause I find they, within that second person, they fall into two categories.

There’s the people who have it and know they have it and are ready to do the work to get it. And then there’s the people who like . It’s an aspirational habit and I’ve had both. So what I’ve done, and I’m not necessarily formally recommending this ’cause it is a bit of an experiment, it’s really around more around what motivates that person, what do they wanna do, rather than, yeah, give them a nutrition program.

And this is the split. Like that’s not gonna work universally. The first step is just lay out like what the upside could look like for them. Also lay out the cons of that upside to the point I guess I made at the beginning of this is like we’re playing delayed gratification. And often that person who does like having that regular paycheck for their regular bills to go on regular vacations and regular life, they may or may not wanna take on that upside when they know that there’s an increased amount of risk that comes with that reward.

Well, for example, I had a coach who wanted to run a. What was it? I think it was like a tough mutter thing. There was this like tough mutter, but women only, I [00:19:00] can’t remember what it’s called. And if I wanna run this, I wanna make more money, what can we do? And I laid out like, here’s what that could look like.

And I very roughly mapped out, here’s what it would look like if we paid you hourly at your current rate. Here’s like what it would look like on a 50 50 split. But that what it would look like was also like what happens when we sign up three people as well as what happens when we sign up 15. And we walked through, here’s what that can look like.

I’m here to support you. Here’s what the roles can be. It’s a negotiation discussion. And she ultimately ended up being like, you know what? I think I’d actually just rather be paid hourly. ’cause I like the guaranteed consistency of it. And that was a really good light bulb moment for me to be like, just because they’re asking for the thing doesn’t mean they actually want the thing.

What I think they’re asking is. What could this look like and can we discuss it and being open to that conversation creates some buy-in. The second person, which I was just gonna say, what you do there is you insulate yourself from resentment if it does kill it, and you recognize the upside because they voluntarily stepped away from the risk.

You’re not the bad guy. Exactly. [00:20:00] Instead of a yes, no answer of we can’t run that, it became an AB choice. That’s the exact same thing we do in a good sales conversation with a client. We don’t say, do you wanna join our gym? Yes or no? We say, I’d recommend two times a week or three times a week, which is best for you.

The second type of person was someone who chose the 50% split, and I’m not, again, I wanna reinforce, I’m not saying 50% is the right amount, it’s just the right amount that worked for us in that very specific situation. Um, and it went really well for I think eight to 12 months. They ended out, ended up going out on their own to do something similar and then got a collegiate strength conditioning job.

But laying it all out and getting clear on those responsibilities upfront was useful. Where it’s like, Hey, I can help you with the agreements. We can handle this, you can handle that. We’re not signing up clients. Here’s your times. This was like, like a renting space deal, but not renting space and. Despite that person leaving after whatever it was a year, I think it was still the right thing to do.

’cause I think they would’ve been on their way out anyways. And I think it would’ve happened faster had I just shut their idea down. They would’ve been like, well, through this, I wanna do it, so I’m gonna go find a way. But I think it [00:21:00] does show, or my experience, it shows that desire to work with them for mutual upside.

And in the spirit of we’re blessed that we can be a stepping stone in someone’s career trajectory. I don’t expect staff to retire with me. I know you’ve got a similar process in. I think it can teach them a lot. And in addition to being employers, I’d like to believe for the people who are willing, we can also be natural choice.

Absolutely. My God, that’s been probably the best change we’ve made in the last seven, eight years is getting away from a world where people move on from our operation and feel like they become some sort of adversarial type relationship. It’s okay to leave. And to your point about those two different kind of comp models, I actually run both simultaneously in my pitching cage right now.

I have a, I have two pitching coordinators who have effectively full calendars and one of ’em is on a 50 50 split and the other one has a smaller commission structure, but he has a year-round standing salary. And the reason we did that is because, uh, [00:22:00] the latter one is not chasing a career in professional baseball, and the former is still holding on to hope that he might sign again and get back into the game professionally.

And so I. He has not, and he might be here for a really long time. He does a great job. We just built it so that we weren’t exposed to like crazy amounts of risk. They both end up in relatively the same area. From an earning perspective standpoint, it just means that one of ’em is less risky for me over the next couple months than the other as we’re about to go into our quiet season.

So you wanna land the plane on this one? Yeah, it’s, this was a fun one. We killed the plane in the air. But yeah, if you’re having enough frustrations with some of the, those, sometimes the best ones, if you’re having frustrations with employees, not having an owner mindset, the first step we identified is really take a look in the mirror and manage your expectations.

And if you’ve done a great job laying that out, they’re not doing it. It’s accountability conversation. If you haven’t, it falls on you. And then the second step, broadly speaking, is help that person identify. Do they [00:23:00] actually want that thing or do they just want ? To do something else for other motivators and nobody knows what they want, including me.

But if you can ask the right type of coaching, con coaching questions, goodness, or have a coaching conversation, um, helping them get clarity is an important point. And for the right people, you can do an experiment and try stuff out that works. To your point, you’ve got two different experiments running and both have pros and cons, but it’s really, it’s built for the person, not here’s how I want that role to work.

So look in the mirror. Help ’em identify what they want and if possible, try to give them what they want. Yep. And then that final point that you made earlier, we need to be pretty deliberate about training all the time, not just in an onboarding process or early on in the relationship. Mentorship can happen a lot of different ways, but we gotta train the behaviors that we hope that our employees instinctually have, and it never stops being hard.

No it doesn’t. Well, this is a fun one, Pete. Thank you for your time. And again, if you’re interested [00:24:00] in coming to the Gym owner masterclass, click the link in the description or shoot us a DM if you wanna learn some more info. But I mean, Pete and I are biased, but it was a lot of fun last time and pumped for it this time on May 16th.

See you in May. Talk soon.