Desire Based Leadership

[0:00] This episode is going to help people leaders of all industries discover how to drive that top performance from their people so they can deliver the success of their team to their business.

[0:10] Music.

[0:15] Welcome to the Full Funnel Freedom Podcast. If you are listening to this, you are likely leading a team responsible for generating revenue. Purpose of Full Funnel Freedom is to support people like yourself and keep your.

[0:28] Music. Welcome to the Full Funnel Freedom Podcast. I'm your host, Hamish Knox. Today, I'm super excited to have for the second time as a guest, Phil Putnam. So Phil, if you didn't listen to the last episode, just wants to take care of you. He has a lifetime obsession with communication in caring for people, which is the engine of his work as a workshop leader, speaker, coach, and business strategy consultant. His human-first, common-sense approach to generating business outcomes has supported enterprises including Adobe, Apple, Bloomberg, and Salesforce in getting top performance from their people by focusing on what they love the most themselves. And now, he's an author of Desire-Based Leadership, which I had a chance to read a pre-publication copy. CopyPhil was very grateful in sharing that with me. It is a really cool book. It's coming out next Tuesday, October the 15th. You can pre-order it now. We'll have all the links in the show notes. Phil, welcome back to Full Funnel Freedom. Thank you so much. I mean, this is like we have a routine now. This is fantastic.

[0:28] Funnels consistently, reliably full.

[1:39] I love it. Well, welcome back. I am so delighted to have you as a guest and to be able to support the launch of Desire-Based Leadership. So, the first question that the audience will not be surprised at is, where did this come from? What prompted you to say, I want to compile this into book form? Sure. So, it comes down to really, I want people to basically enjoy their life more. If I'm just being bedrock honest. Love it. When I reflected on the way that most managers I've had in my career have sought to motivate performance out of me, you know, get me to give more of myself, develop my skills, give better results, work longer, extend my tenure at the company. The message has always been, look at how important the work that you do is to our company hitting its goals. And that's why you should be motivated to give us more of yourself because when you do we'll get better performance out of you and then the company will be successful.

[2:45] And um when i reflected on that i realized well okay i mean yeah i do care about my employer's success i've cared deeply about the success of every company i've ever worked for but that is not my number one career goal. Like making my employer successful is not my number one career desire. I work to get the life that I desire.

[3:11] That's my number one career goal. And so what I realized is that when you are motivating performance out of the people that you lead and manage on the basis of the company's success, you will never be leveraging a better than second best basis for that motivation. And when you leverage a second best basis, you get second best results. Totally makes sense. And so what had happened is that when I went into people leadership for the first time, I had to figure out very quickly how to get a team hired and up to top performance. I had a big mandate and a very short timeframe. And so I just common sensed it one day. I remember this day very specifically. I was sitting at my desk and I was like, well, how do I do this? How do I get top performance from my people on a consistent basis with a minimal amount of friction? Because I don't have a lot of time to be dealing with constant obstacles and stops and starts.

[4:16] And I realized, well, the best way to get somebody to give me what I want is to give them what they want.

[4:24] And so then the question became, well, what do they want? And so I started asking people what, you know, I was interviewing them or I was, you know, was onboarding an existing hire or existing team member that I'd inherited. I said, hey, like even setting aside work, just tell me about your life. Like what's the life you're trying to build in exchange for the work that you're doing? Because I believe that that's why you work more than anything else. And they're like, yeah, that's why I'm here. Like, I care about our success. I care about our team. And I take a lot of pride in my work. But that is not the reason why I work. I work so I can use the resources that I get in exchange for the value that I give to my employer and go build the life experience that I want to have. So I just started gathering this information and then honestly assessing if they could get that life from their current job situation.

[5:29] And if they could party time, right? Like, cause I know this job is a pathway to them getting what they care about most. And so that's going to bring me their top performance. It's going to be intrinsically motivated. I'll have to maintain it. Like I'll have to make sure it's is on track, but the amount of effort I'll need to do, it will be more maintenance rather than convincing them. I also was honest in the reverse.

[5:58] When I had job interview candidates, or if I had an existing team member and they couldn't get the life they wanted from the job they have, I would tell them, I would say, look, what I most want to do for you as your leader is not waste your time, because you can't get your time back and so i'm going to tell you like your financial needs and desires you're not going to get that from this job or this company in the next two to three years or the amount of flexibility that you need and because of how you want to expand your family over the next few years this culture doesn't support that and i'd much rather have you get the life that you want, even if it means going to a different employer. Because also, now that you know, you can't get the life you desire, you're going to disengage, it's going to be natural, right? It's human nature, you're going to disengage, your performance is going to slip, my team's results are going to suffer. And if I can't fix it for you, you're going to move on anyway.

[7:03] So I'm not going to ask you to live in denial about what you want. And I'm not going to try to make you operate in denial of it. Let's just look at it full in the face and make the best choice for you and for our business.

[7:18] That's really brilliant. And it speaks to that human nature of, it sounds like, honestly, what you were doing, Phil, is treating your team members like humans. Shocking. What an idea. What an idea. They're not automatons. And really, what I'm really loving is, this wasn't a tool that you used where it's like you had an underperformer, and this was your different version of a pip. It was from the very beginning of like, hey, Hamish, thanks for applying for this job. Based on what you shared with me, I don't know that this is going to be a good fit because as you've experienced and the leaders who are listening have experienced, bringing on that bad fit does more harm than good to your business.

[8:02] Let's talk about that for a second, too. You know, there's a very, very solid business case at the base of this, and I lay it out in detail in the book. But the simple statement of that business case is that it costs far, far less to satisfy an employee that you have than to replace an employee that you've lost. Totally. And to be specific, I'm talking about usually five to 12 times more expensive to replace one person than to satisfy one person. So I'll do a very quick example with some numbers. And I'll use US dollars. So let's say you have somebody who makes $150,000. That's that's the salary. It's all base, no bonus. Okay, and they leave. Well, both Forbes and Gallup have estimated that it costs anywhere between 50% to 200% of that salary just to get the replacement hired and into the seat on day one. And that's the full range of all of the operational costs of creating a role, marketing it, interviewing, hiring, legal, HR, all of it, right? Right. And so let's say that you're dead center at that 50 to 200 percent replacement cost range and it costs 125 percent in your industry on average to replace a person.

[9:28] Well, one hundred and fifty thousand dollars times one hundred and twenty five percent is one hundred and eighty seven thousand five hundred dollars.

[9:37] That's the cost of getting the replacement into the seat on day one. And that cost also factors in roughly 9 to 12 months of diminished productivity from that replacement in the role as they ramp up. Yikes. But that's not all. There's two more complicating factors. The first is that once you have them, you have to pay them.

[10:01] So $187,500 plus $150,000 is what it's going to cost to get that one replacement to year one in the role. And then if you scale that out across an organization, you also have to remember that you're multiplying this and Harvard Business Review, this is the real kick in the gut for me. The HBR found that 30% of new hires quit within their first 90 days. Yikes. So just as an example, if you're a 200-person company running 18% attrition, which is below the U.S. Average of 21% in 2023, you're going to have to do 36 initial replacement hires to stay at 200 people. But then you have to assume that 11 of those people might quit within their first 90 days. And if that happens, you're going to have to do 47 replacement hires every year. Let's even make it different. Let's say that the average salary is only $100,000. Sure. $100,000 average salary, 125% replacement cost, 47 times. To get those replacement hires to one year in their role, you know how much money it is? It's $10.6 million.

[11:26] Every year. Here, $10.6 million is more than the annual total revenue of many companies. Yeah. So when you look at that, you realize there is a very strong financial and business reasoning to shift the priority of your people from replacing them to satisfying them. Because here's the quick numbers on the cost of satisfaction.

[11:58] Most people find a 3% raise offensive and even intolerable and a reason to leave your company. And what's sad is that that's a pretty common performance-based increase for exceptional performance right now, 3%. However, several organizations have found that a 5% to 10% raise is found to be extremely satisfying. It makes people engage in their job, extends their tenure, their performance increases. So here are your options. We've already gone over the cost of replacement and attrition, which is $10.6 million a year for that example I gave. But if you really just went hog wild and gave somebody who makes $150,000 a 10% raise, that would be $15,000. To satisfy them versus $187,500 to replace them.

[12:59] If you divide $187,500 by $15,000, you get $12,500.

[13:07] So for the cost of replacing one person, not even paying that replacement, just getting them into the seat on day one for that cost, you could satisfy 12 of your existing employees. Incredible. I mean, there is no financial or business logic that supports this ongoing practice of funding attrition more aggressively than you fund employee satisfaction. There's just no basis for it. Fair enough. Fair enough. Phil, as you were sharing this with me, usually when people say, but wait, there's more, it gets better. And then it got significantly worse after you said, but wait, there's more. So let's get our audience a little bit back on track because some of them might

[13:52] be weeping right now on the side of the road. So speaking of this model that you built, and by the way, folks, go buy the book. Like Phil's going to explain more of it in the book, and I encourage you to go buy the book. Give us a sense of this LIFE model. So you built this, this acronym is LIFE, and it's this motivation model that you've already shared you use even in interviews all the way through. So break down LIFE for us at a high level, and then audience again, go by the book and get the rest of the explanation from Phil. What does LIFE stand for and how do we actually go about using this? Sure, so the LIFE Motivation Discovery Model, LIFE stands for lifestyle.

[14:34] Income, feelings, employment. And the whole goal of it is to discover the details of the life that this individual employee desires. Because getting that life is their number one career goal. And their ability to get that life from the job they have is the true engine of professional motivation.

[14:58] Motivation is an output of that person's belief that they can get the life they want from the job they have. Motivation is not an output of a process or an operational structure or a new tech tool. So when I was figuring out how to do this, those four factors, lifestyle, income, feelings, employment, disappointment, those codified as the primary categories of the things that define the life that somebody is trying to get in exchange for their work. And that's why I built the model around that. So what desire-based leadership, the book teaches is it walks you through that model and it says, here's how to do it, best practices. It digs into each of those four areas and it says, this is really what it's about, here's a list of discovery questions that you can use when you're having this part of the conversation, here's the information that it can give you, and then also here's how you would analyze it as that person's manager to determine if they can get the life they want from the job they have. Here's a quick example. If you were running this model on me, if you were my leader, you might say, hey, Phil, like, tell me about where you want to live and, you know, all that stuff. And I'd say, well, my partner and I plan to live in New York City, you know, potentially till the end of our lives, but definitely until the end of our careers.

[16:25] That's what you would kind of write down in the life motivation discovery profile. That's one of those things you'd write down in the lifestyle section. When you do the analysis, what that piece of information about my desired life would tell you is that good news, you don't have to worry about relocation for me, potentially ever, right? However, what you do have to do to keep me motivated and keep access to my top performance is keep paying me in line with the New York City job market and the cost of living. So that's a really quick example of how a leader can gather this information and then use it to determine the likelihood of getting that person's top performance on a regular basis with a minimal amount of friction. perfection. I love that example. And that's one of the things that stood out to me in the book was this, that analysis side, right? So it wasn't just like, have a conversation, ask them the questions and put it in a drawer, never to be talked about again, unless their performance slips. It was this, it was the action nature of the life model that really stood out to me. And so that example you just gave about yourself is great because now that tells me as a leader that, yeah, it's probably gonna cost more to keep Phil and keep him motivated because of his desire to live in New York, and New York is more expensive than other areas. So when we're looking at this model, the first question I have is.

[17:54] You go to me and you go, hey, Hamish, so tell me about your employment. We'll just go to the last step of the model. You go, employment. You're an SDR. What do you want to be when you grow up? And I say something like, I don't know. How do we work through that conversation with our team members who may have never been asked that question by a leader or who may legitimately have never put the thought to it because they're like, hey, I'm 23. I just graduated. Like, I'm happy to have a job, much less think about my future. How does that conversation go? Well, first of all, I love I don't know. That's actually my favorite question because that's an open canvas for coaching. Okay. And the other thing is this. That's an open canvas for contributing to this person's development, which is going to build their bond with you. Right? Right. The most important thing I can say is that whenever it comes to coaching, whether it's in the life model or anything else, context is king. Context is king. It's clean, it's God, it's science, it's everything, right? So for a 23-year-old person who just came out of college, I'm not going to force them to try to imagine what they want their career to be when they're 45.

[19:08] Because that's not going to help them and it's not going to help me get their top performance. I'm going to say, I'm simply going to say, what do you want now? Where do you want your life to get? They're going to answer. They're going to establish the context for me. Now, maybe they will surprise me and say I need a clear path to being a Chief Revenue Officer by the time I'm 37. And if that's the case, I'll say, OK, great. What we do here today and for the next couple of years can definitely be part of that. Let's figure out what the next eight quarters, like what role they're going to play in your overall goal. And I'll bring it back to the present. Got it. The reason why I think it's so important to keep this motivation discovery conversation focused on the current timeframe is because the promise of someday is a motivation killer. Oh. So people need to see that they are making material progress towards their goals, within a reasonable timeframe in order to maintain that belief that they can get the life they want from the job they have. So, if you're saying, hey, I can give you what you want 10 years from now, you should not anticipate that you're going to get great performance in exchange.

[20:30] But if you say, hey, what you're describing, I can get you there in the next two to three years, and we're going to see consistent progress along the way, I think you've got a really strong basis for top performance and ongoing motivation from that person.

[20:46] Yeah. Oh, that's brilliant. Yeah. Yeah, and I agree with that whole idea of, yeah, in the future, you'll possibly be able to have an opportunity to maybe get promoted or get a raise or whatever. Yeah, eventually that's never going to happen. So keeping it in the present. No, maybe, possibly, someday, those are all things you do not want to have in the conversation about motivation. Because again there's there's two asset there's two elements to this this belief or this connection between the life somebody desires and the job their ability to get it from the job they have, part of it is material right the material has to be there you're either getting the money you need or you're not right you either got a satisfying raise in in exchange for top performance or you didn't but there's also the belief element and people we act on our beliefs as much as we act on the facts and so it's not just that people need to see the material real progress they also need to see enough they need to have a strong enough belief to stick with it and see it pay off right whether it's a breakdown of the material or a breakdown of the belief you're equally at risk of losing that person and having to pay the cost of replacement.

[22:05] Totally fair. Yeah. That makes a ton of sense to me. And so this, then that ties into the second question is this is an ongoing thing, right? It's not to put it in the drawer and never to be talked about again. And as you identified, like motivation is a malleable thing, right? It comes and it goes, it waxes, it wanes. So let's say that we get to the next quarterly review or the next time we talk about it, right? And I'm off pace. I told you this whatever period of time ago, and you're looking like, hey, Hamish is just not doing the things that he needs to do. How do we have that conversation without me feeling like I'm getting attacked or that, you know, it keeps my motivation and reminds me that I was the one who told you what I wanted. It wasn't you who told me what you wanted me to be. Exactly. So what I do is I keep the life motivation discovery profile and the analysis as an ongoing part of the person's professional development.

[23:04] So say that it's four to six months after the first time you and I had this conversation, I would pull it out again. And I would say, hey, motivations are a moving target. They change over time as your life develops let's just touch base again tell me just tell me about you know the lifestyle you want tell me about your income your feelings your employment and we're going to simply update what's going to bring what's going to motivate you the most and what you're looking to get in exchange and then i'm going to run that analysis again now this is not going to make you feel threatened because i'm simply asking you about what you want i'm asking you to tell me what you need to get from your employment. That's a great conversation, right? I'm putting your desires center stage. That's the first thing is that this entire approach that I advocate works because it centers the employee's desires. And it acknowledges the fact that somebody getting their desires met is the most primary pathway to getting their top performance and the excellent business results that come from them so to any leader of any level who's listening if you want the best business results you need to center your employees desires because that's where your performance comes from.

[24:28] It doesn't come from your product roadmaps. It doesn't come from your executive strategies. It doesn't come from your data reports. All of those are just inert objects that have no life force of their own. They're just tools. They're boulders at the bottom of a hill that just sit there until a person comes along and pours their labor into them and picks them up and uses them to generate your results. So that's the first reason why this conversation works. The other thing is that whenever there's a shift in performance quality, there's usually been some kind of shift in the belief about someone's ability to get their life from their job. Whether the performance has increased because the belief has increased or if the performance has dipped, usually there's been some shift in motivation. So, I do advocate running the life model as a standing practice every four to six months. I also advocate running it after any team member has experienced a major life event, birth of a new child, a marriage, a relocation, a divorce or end of a relationship, a death in the family, anything that is going to potentially shift what they want out of life, you want to check back in.

[25:53] That's a really, really good point. I appreciate you bringing up that major life event because sometimes we support, as leaders, we will support our person through that and positive, you know, whatever that event was. And then we forget that, yeah, that had an effect on them as well. And that probably changed their motivations. Yeah. And I want to build a bridge here between two innately good things that leaders often do, but they rarely ever connect for the good of the business. Let's say that somebody um has lost a parent okay their their father or mother just died.

[26:29] It's one of the most common things that a good leader will do will say hey well you know what don't worry about the work don't look at your email we've got you covered you tell me how how much time you're going to need off and we'll give that to you that's that's one great thing that they do right the other thing is that then when the person comes back they'll just sort of pick up where they left off but they'll never talk about hey how did this major change in your life impact your perspective on your work and how do i serve you in that environment so the compassion of the first thing and the support of the second thing those are both fantastic human behaviors that nurture the relationship between the employee and the organization the missing piece though is that you want that better relationship to pay off for the business, Totally. So the life motivation discovery model allows you to connect those two things because there's a couple possibilities. Maybe the death of this parent has shifted the person's motivations to the level where they can no longer get the life they want from the job they have. Therefore, you will no longer be getting the performance you need from them.

[27:55] Or maybe they are still in line and they're just in such a deep emotional fog as of course they would be that they just haven't thought about that yet and you as their work leader coming to them and helping them find stronger footing is not only going to help clear the pathway for their performance but again it's also going to have that positive impact on the relationship so what What desire-based leadership and the life motivation discovery model does is it allows people leaders to take great care of their people, but also leverage a lot of those missed opportunities for the benefit of the business.

[28:37] Such a great way of taking, like you said, this over here and this over here and marrying the two together to continue that level of motivation after that major life event. Phil, I have another question for you, something that's touched on in the book, and you mentioned the business case earlier about replacement versus satisfaction. And a lot of the leaders that are listening to this are either told what their performance budget is or they're going to have to go get approval from a board or investors or whatever. How do we take this life motivation discovery model and leverage that when we're having to go up to say, Hey, Phil wants to live in New York with his partner for the rest of his career, if not the rest of his life. So we're going to have to give him 10, 12, 15% this year in order to keep him motivated. Yeah. So, I'm really glad you asked this because one thing I want listeners to understand is that I do not hold back in this book.

[29:36] You don't. Because it was really important to me to make sure that it's an enjoyable reading experience, first of all, but also that it's really honest. And here's the thing. Middle managers, so for the most part, people who are below a senior, like a VP or senior VP level, the reality is you don't have any power to decide the actual amount, say, of a pay increase for your people. In most pay-for-performance models, all a direct manager is allowed to do is rank their team members' performance in whatever scale that their company has chosen to implement. And then it's C-level and senior HR leadership most often that will decide, okay, well, a 3 rating gets a 3% raise. Sure. And a 2 rating gets no raise. Right. Right. So the first thing you have to do is be really honest with yourself about what actual level of power you have to impact the compensation and the satisfaction of your people. And if you do not actually have decision-making authority to say, you know what, Hamish is going to get a 7% raise, then your place in the conversation of advocating for somebody to get a certain reward is as an advocate, not as a decision-maker.

[31:04] And this is the first step that a lot of first and second line managers need to take is to acknowledge the fact that, you know what? Yeah, in my scenario, I don't have power to decide. I have power to advocate. Got it. When you're in the position of advocating, there's two things that you need to do. You need to provide business reasoning. You need to justify the request for

[31:28] more than what was offered. And you also need to make sure that what is going to be offered will actually be effective for motivating the person that you're trying to motivate. So the first step is to run the life motivation discovery model, discover the life that Hamish wants if I'm your leader. And if I discover that a 7% raise is not going to get the job done for you, well, then I know that I need to go advocate for more. And I'm able to say to my senior leaders, not only is here's the proof of Hamish's excellence, right? Here's the business reasoning. Here's the proof of his value. But also, here's how I know that if we give him less than 10%, we're still going to lose him. I know because I asked him. I know because I ran this model and he told me what he's trying to accomplish. And this is what it's going to take to help him do that. And so that's why I'm asking for this.

[32:29] Brilliant. Yes, that is an awesome framework for having that conversation and getting the data and making that business case. I really appreciate you sharing that with the audience today, Phil. And as we're wrapping up, I often ask my guests, do you have a final bit of wisdom, a closing thought, or something to plug? Well, you do have something to plug, and we will put the pre-offer link. But what do you have to share with us and the audience as we're wrapping up today? This is the most important thing I can probably say to leaders about this, and it's in the form of a story. So recently I was talking with somebody about desire-based leadership and about the life motivation discovery model. And he said, that's great, but once I discover my team members' desires, how do I change them? Oh, no. And I said, oh, oh, you don't. He's like, what do you mean? He's like, I've got to get this person to give me what I want, but I can't give them what they want. And I said, here's the thing you have to understand. It is not at all within a leader's power or really, in my opinion, within their rights to change what somebody desires.

[33:43] That is manipulation. That is disgusting human leadership behavior. You have to take a position of humility as a leader when it comes to motivation that says, I have no hand in prescribing what my team members want for their lives. All I can do is discover what their desires are, honestly assess their likelihood of getting it from their current job, and then proceed accordingly.

[34:14] And that's why this is a discovery model, right? Whenever you try to go down the path of getting somebody to warp their life desires around the constraints of your business, you will lose. Yeah. And you'll probably make the process longer and you'll probably lose more money and more value in total than you would if you simply were honest about it from the start and accepted the fact that a leader's place is not to tell their people what to desire. It's to discover the level to which those desires can be fulfilled by their current work situation.

[34:58] What a brilliant way to wrap us up. Phil, thank you so much for being a guest again on Full Funnel Freedom. I am ridiculously excited for your book to come out next week. So audience, go check the link in the show notes. Pre-order Phil's book. It's coming out next Tuesday, October the 15th. Phil, once again, thanks for being a guest on Full Funnel Freedom. It's a pleasure. Thanks for having me.

[35:21] Sales leaders, clearly Phil and I have some great rapport. I really love visiting with him. I really love his ideas around this human side of leading and motivating and supporting your team members. One of the things that we share with the leaders that we work with regularly is your people do not work for you because they love you or your business. They work for you because they believe that working for you is going to get them to their personal goals faster than going and working for somebody else. And this life motivation discovery model that Phil talked about is a really brilliant way of having that conversation. It's also a really brilliant way of creating motivation in the moment something that Phil said that really resonated with me is motivation can't be maybe or possibly or someday it's got to be in the here and now because no matter how resilient our team members are they have to see progress like Phil said if they don't start seeing progress they're going to be demotivated and then on the the flip side, if you are in a position where you have to go advocate for one of your top performers, leveraging this life discovery model is a way that you can leverage.

[36:30] That conversation, have that conversation more effectively with senior leadership, your board, your investors, whatever it might be, so that you can keep your top performers motivated. Because as Phil laid out in the business case, you can motivate, continue to motivate 12 and a half people using his example, then go through those 47 replacements, which I cringed when I heard that number, and I'm sure a bunch of you did as well. I'm very curious to hear what your takeaways are in the show note or in the social media. So let us know. And until we connect on the next episode, go create full funnel freedom. Thanks for listening to today's episode of the full funnel freedom podcast. You can continue to support us by leaving us a review and a rating, sharing this episode with a couple of sales leaders in your network who you care about. I'd love to connect with you. I'm easy to find Hamish Knox on LinkedIn. Also, if you'd like a a free 15 minute call with me, go to www.hamish.sandler.com forward slash how to Sandler until we connect on the next episode, go create full funnel freedom.

[37:39] Music.