Episode 10: From Teacher to Unexpected CEO

Jon Hagmaier.jpg

Have you ever wondered if you have what it takes to be an Executive or even the CEO? Do you wonder if your organization can achieve amazing growth? Who are your key relationships and how are they helping you grow? Are you curious about a CEO’s leadership lessons?  We will be interviewing Jonathan Hagmaier who went from being a teacher to starting a software company that provided educational solutions. He grew the company to almost 100 employees before selling the company in February of 2016. We will be discussing his journey, how he created the Small Business of the Year in Virginia, why values and relationships matter so much to him and leadership lessons he learned along the way. Jon was also named Entrepreneur of the year and his story will be sure to inspire you and others. We look forward to sharing his story and leadership thoughts with you on Illuminating Leadership.


Biography:

Jonathan Hagmaier never thought he would be an author as he never thought he would be a CEO of a multi-million dollar company. However, what Hagmaier has always been passionate about is recognizing life’s Aha moments and going All-In to achieve a goal. By 2007, Interactive Achievement had grown from three employees to 75 inside its headquarters. The company was the 2012 Virginia Small Business of the Year and was included on the Inc. 500/5000 list in 2012 and 2013. With a culture dedicated to customer service, Interactive Achievement reached a remarkable retention rate of 100% in the final three years of operation. This is the origin of how Hagmaier applied his Aha to All-In concept to create an environment of success that would propel a three-person startup to a company generating $10 million in recurring revenue. Hagmaier now travels the country speaking extensively on leadership and the importance of core values in sustainable growth.

Transcript:

 

Jeff: Welcome. So glad you could be here with us today. We’re here in Roanoke Valley of Virginia it is another beautiful day. All I can say is Tuesdays are beautiful days. We’ve been doing this show for 10 weeks and every Tuesday has been a beautiful day. It’s not a broken record and we do occasionally have a bad Thursday but apparently Tuesday is our good day.

So today I have the distinct pleasure of having Jon Hagmaier in with us. I’ll do a proper introduction of Jon but if you hear some chuckling in the background, that’s Jon. And I really want to give a shout out to everyone I go a lot of emails this week from a good friend, Faheed. Thanks for reaching out to me; it was great to talk to you again.

And great email from the UAE, some of my friends over there that worked with Cleveland Clinic, gave a shout out about the time management tips from last week. So if you didn’t get a chance to listen to that, and you have some time management challenges go back and listen to that. But let me tell you how to reach out to us, during the course of the week or during the show.

So this is Illuminating Leadership I’m your host Jeff Smith. You can reach me at really through the station we’ll do that throughout the show but email is jeff@voltageleadership.com our website is www.voltageleadership.com. You can like me on Facebook @ Voltage Leadership; you can connect with me on LinkedIn at Jeff Smith Voltage Leadership Consulting or follow me on Twitter @VoltageLeaders.

So today we’re going to be talking Jon about how do you go from being a teacher to an unexpected CEO? So our guest today is Jon and Jon started out as a schoolteacher, a coach working with At Risk kids, and really just passionate, thought that was going to be his whole career.

But as he was walking along the path he discovered that there is there are some software technology needs for teachers in the classroom. So he’ll tell you this story in a few minutes but basically he went and started his own company. They grew to almost 100 employees at the time in sale. So what we’re going to do today is learn from Jon.

Something about his background, what were some of the leadership lessons that he had and messages he’d want to pass along to other leaders and see what they are going through in their journey. And how can he relate to them? So Jon is married to Mary, has a daughter Jayden, is a world traveler.

We were talking about this at lunch a little before this and he’s been here, there and everywhere but I know that you guys are going to enjoy meeting with Jon. So Jon welcome to the show.

Jonathan: Well thank you Jeff, I’m really excited to be here and excited to talk about all the things I did learn over the last 10 years.

Jeff: Well we call this Illuminating Leadership, so today will be much more of lessons learned from sort of the CEO seat, and what critical lessons did Jon learn? And how did you go about figuring this out because it wasn’t easy?

Jonathan: No, no.

Jeff: And Jon and I worked together during the stretch time, I was his coach; I helped facilitate with his teams. And I really saw Jon grow. So this was a wonderful partnership with people on his team. But I guess Jon for the audience, why did you even want to become a teacher or a coach? Start us back there.

Jonathan: Wow, all the way back there. I’m would say Eric Videbek, John Arcer, Bryan Johnson, just different teachers in my life, and coaches in my life, and Larry Gray was my principal. And really helped understand I was a lot smarter than I came across, I was a lot smarter than I thought I was and really helped me get to the next level.

And when you have that experience in high school and you are an At Risk student, when I got to college, on the day I walked into college and talked to my counselor I said, “I want my history major but I want my teaching certificate because I’m going to teach.” I knew that the day I walked into college.

Jeff: Oh that’s great.

Jonathan: Yeah.

Jeff: Well maybe to fast-forward us a bit here, so you become a teacher, coach, assistant principal et cetera. First off what did you enjoy about the role and what were maybe a couple of leadership lessons you learned while you were a teacher and a coach?

Jonathan: At the time this was really interesting well I’ll talk from as you transform to seeing the whole picture. So I used to always say my gift was with at risk kids. You put me with a college bound student I was- we actually labeled them that way; non college bound and college bound hey way to go on that. Yeah that’s great to have that label.

But I used to always say that when really if I look back on it now, I loved working with people. I love trying to help people get to the next level. That was my strength. Now whether that was with students, so my first lesson and it’s more than just students was when I became an assistant principal, because a lot of people say, “Well I can’t affect kids.”

“I won’t have that same effect.” And I learned very quickly man, I have a greater effect as an assistant principal because now have 30 great teachers, Benson Franklin Middle School I had great teachers there at the seventh and eighth grade level and really learned that. So as a CEO as I was growing through I did support, I did marketing, I did sales, I did all those different things.

But in the end where I had my greatest effect was on people, and getting people to be better than they were, and what they thought they were. So it wasn’t that I made them better, I just opened doors and showed them a different path and that was my real gift. And that stemmed all the way back to kids.

Jeff: Right.

Jonathan: And that’s what I do with at risk kids right because no one believed. And I’m not going to say no one believed in those students, the students themselves didn’t believe.

Jeff: Sure.

Jonathan: Right that’s all it is. That’s what makes you at risk because you don't have that confidence.

Jeff: Right.

Jonathan: So the whole trail I would say was a good path for me to go on, to get me where I was.

Jeff: Hey thanks for sharing that. I think a couple of thoughts that I take from that, one, this confidence that you saw in others that not everyone saw in themselves.

Jonathan: Right.

Jeff: I also know having known Jon, this risk and people that are at risk, you’ve always been willing to sort of lean in and walk with that person and help guide them. And you take some of your risk. I can’t think of any sort of bigger risk though than starting this company called Interactive Achievement, for the folks listening.

Jon has started two different companies now, so he's done Interactive Achievement, he’ll tell you that process in just a second. He's now the CEO, of Commonwealth Group; it’s a private equity investing group. So not once but twice you’ve gone through this process, sort of leaving the stable maybe teaching coaching world and you go into this high risk technology startup.

Jonathan: Yeah.

Jeff: What was the idea for Interactive Achievement? And just maybe give us a sense for the early beginnings of that.

Jonathan: The idea was to allow teachers to see where a student did not grasp what they taught. So we built an assessment software where we made it very teacher centric. Even though teachers never wrote us a check, central office did but it was based on teachers. And we tried to focus on that, we had great success in that. We had our failures too but we had great success.

And then we built Long Shield data system in which you could look at the whole child, from grades, discipline, attendance; so those two products. One was a formative assessment and then we had Long shield data. And basically what we wanted to do just to sum up what we saw was, creating a product that solved the problem to where teachers needed to understand how do I use data, how can I use it quickly and how to use it that it’s not complicated?

Jeff: Right.

Jonathan: How much data do we use today in society that nobody knows and understands right?

Jeff: Absolutely.

Jonathan: Right so we didn’t have 75,000 reports, we had seven. And they were the seven that the teachers needed. We did not complicate things. The other thing we did is we really took care of the teacher, we took care of the client. If you can’t do that, I would say to anybody right now; if you cannot take care of the client, then you’re not going to be successful.

Jeff: Yeah so I think there’s two great leadership lessons already Jon. The first one is understanding the perspective of your customer. So I think that having worked with your company one of the things I saw that you were successful was, you understood what it was like to be a teacher.

Jonathan: Yeah.

Jeff: What it was like for those teachers right, so I think it’s understanding your customer's perspective. So for the listeners out there that are leaders, do you really understand the perspective of your customers? The second one I just would title provide fanatical support. It wasn't good enough, you understood that these teachers are-as one of the folks in your team liked to say, they’re kind of locked in the classroom all day.

Jonathan: Right.

Jeff: So you understood the type of support that was needed for them to be successful. And ultimately Interactive Achievement was a success. If you were sort of maybe on this side or break, which one or two things that were the key reasons why Interactive Achievement was the success that it became?

Jonathan: So the key was the hands-down, well I’ll say this; hiring people that were honorable, unselfish and generous which we’ll talk about later, that was the key yeah. So that fed into we empowered them to go over the top and support. They didn’t have to ask, they just did it.

Jeff: Right.

Jonathan: Right so that was key to our success. The other key to our success is we learned how to get out of our own way. I would say as I’ve been reflecting we’re in the middle of writing a book and all these things so you’re really reflecting on a lot of different things. And there’s so many things I could have said there but probably the biggest key was when to get out of our own way.

That wasn’t just myself, or the other founders that was my teams as we built because as we grew and grew and grew, that doesn't mean I’m going to go from support rep to Chief Operating Officer because I’ve been here the longest right. But we get that in our minds but you still bring great- we found a way to get out of our own way and put people in positions of their strength including the CEO.

Jeff: Yeah absolutely. So what I’m curious about for you is, why was it personally enjoyable because this was a joy ride?

Jonathan: Oh for me?

Jeff: So not the work, because you actually came out of this nice financially. But what’s been a joy for you doing this day in and day out?

Jonathan: So there’s two great joys, joy was building a culture company that was not what- so we said is that we don't have to have nabobs and bad poles that wasn’t culture, culture who we were. So we have this culture of honorable, unselfish and generous people. And when you put that group of people into a room I’ll call it into a room into this area, what came out of it we had the best time every day.

And we treated each other that way right. So when you're not looking over your shoulder, you’re not wondering who’s at your back, and just did he really mean that, is he lying to me or what’s he trying to manipulate? We had those I'm sure but not very often. And that was fun. The second thing is every day we changed the kid’s life.

We were part of that. Now the teachers were the ones that did it but we were part of it. And that was-oh, man we used to have those conversations as a whole group, of changing a child; what did you do today to change because think about a guy writing code right. Then we’d ask, “What code did you write today?” right and the support reps to the marketing, to the sales. So that made it so much fun to get up every day and go to work.

Jeff: That’s awesome. So a couple of things here that as we start to head towards break in just a minute, finding joy, something you can care about be passionate about. And believe me, I work with customers they do all types of different things that they can find joy and passion about, and making sure that your team connects to that mission.

So changing the lives of kids is a very honorable mission, and we’re going to talk more about that on the back side of break. But it’s also just making sure that people understand the mission and the vision and that we’re all connected. So today we are talking with Jon Hagmaier. Jon is the former CEO of Interactive Achievement currently CEO of Commonwealth Investment Group.

And we will be back in two minutes right after this break.

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Jeff: Welcome back and this is Jeff Smith, I’m here with Jon Hagmaier today. Jon is the former CEO of Interactive Achievement. And we’ve been talking about some of the leadership lessons that he learned during the time leading his company. So if you don’t know Jon’s story in this first part, he was a teacher and a coach and ultimately becomes the CEO of a company.

So, one of the things that we talked about before the break was the importance of culture. So I’ve asked Jon if we could continue that conversation around why was culture so important, who is the sort of architect of your culture? And I can imagine if I’m a listener, “Gosh Jon I’m busy, who’s got time for culture?”

Jonathan: Yeah right. Well I would tell you, make time. I would say make it important. And we were very lucky in our sense the way we were set up. My wife who was one of the original founders but never worked for the company, she focused in our culture. So she architected the culture. We were just out selling, building doing all we could to survive.

But she could focus in on that. She owns a real estate firm, part of that and really involved in real estate but took the time to do that, to where she then passed it off to our employees as we grew. And then I would say Jacqueline Lagey and others took it over and really started to grow. And what made that important was our culture being honorable, unselfish and generous.

Jeff: Say that again for me. So we call this HUG.

Jonathan: We call it HUG.

Jeff: So for the folks writing this down at home I want you to hear this so.

Jonathan: So we wanted people that were honorable, and that were unselfish and that were generous.

Jeff: Now wait, unselfish and generous sound like they’re the same thing.

Jonathan: Yeah, no they’re completely yeah completely different.

Jeff: There’s a little inside trait.

Jonathan: There’s a little inside joke on that yeah. Now what it did for us, that was our culture and what it did and that’s how we hired. So the way we were set up, your degrees weren’t important to us, your technical abilities weren’t that important. Your character, we cannot teach character. So we really focused in on finding those people. And I mean people I mean we had supporters. And just a great story on that and this was before we even defined it.

Jeff: Sure.

Jonathan: So even though we hadn’t defined it, this is who we were. So when we did define it, it was off of what we’ve already done. So it wasn’t the Eureka moment. We just kind of summed it up and started speaking that way.

Jeff: Okay

Jonathan: Right. So I had a support rep I’ll say Sam Lackey who was helping a teacher who printed off too many sheets. And she told Sam she just freaked out because they were so poor in their district. She only had 400 sheets of paper. It was a true story. The next morning she walked into school 85 miles from where we were and she walked in the school and he was standing there with a rim of paper.

And he handed it to her and he says, “You’re going to be okay,” Got in his car, called me and says he’s going to be late to work. Now people say that’s not scalable, people were saying well you just can't do that. I will tell you this; let your employees figure it out. They’ll figure out scalable.

Jeff: Yeah.

Jonathan: When we went from Virginia to Louisiana they started figuring out scalable. CJ Page and his team Angela Pope, I can start naming all these people, they started figuring it out when you hire on that culture. So what that culture did for us, it made us as an executive team, to be every decision we made we would ask, “What’s the honorable, unselfish and generous thing to do?”

That let our managers to do that, we treated our clients that way and we treated each other that way, we treated the community that way. So that was why I say if you're not focusing in on your culture, you need to because it’s going to be one of the main driving forces of your company, of growth and how you can grow in a healthy way.

Jeff: I can hear the listeners, I just heard their eyes roll a little bit like, “Well you were successful Jon and you sold the company and all kind of stuff.” But we’re busy.

Jonathan: Sure.

Jeff: And this caffeine laden world, we all text to our Smartphone there’s like 17,000 things to do, so really culture? So can you expand why I guess you invested the time and energy in culture, because I know early it wasn't so clear and defined? So what I know is early you were just like everyone else. You were bootstrapping it. You’re trying to get sales. And for people who don’t know, John and Mary mortgage their houses and did the classic entrepreneur.

Jonathan: Yeah just for the record the two houses we put up 10 years ago that didn’t get released till the day we sold the company.

Jeff: That’s right.

Jonathan: No matter how much the revenues went. So if you’re all out there hoping, just suck it up, it’s going to happen one day. But that’s just part of life.

Jeff: Yeah. Somewhere along the way though, you started to realize that culture really matters.

Jonathan: Mattered a lot.

Jeff: Yeah so.

Jonathan: Finding great people, ideas don't generate revenue, people have to…

Jeff: Interesting say it again

Jonathan: Ideas don't generate revenue.

Jeff: Yeah that’s great.

Jonathan: People do, great people to. And we started hiring great people. And then the last two years that culture because we had built the culture, I could go out and find I will say the pro team from an executive team. I brought in a pro-executive team that was just phenomenal. In fact just to sum it up is the last two years I know we took an investment and for the last two years I brought that team in, we grew five times in value in two years.

Jeff: Wow.

Jonathan: Because of that team, hands down.

Jeff: Yeah and something I want our listeners to hear as well is that Jon didn’t always have to pay top market. Later on in his career he could afford to go and find the top talent. I would like have you just speak to like taking a chance on some of the people that maybe weren’t as degreed. I know you had a lot of people senior management who had high school degrees in high-tech firm and all that.

Jonathan: Yeah.

Jeff: Why don’t you talk about sort of hiring for the pedigree, versus sort of hiring for the characteristics of your culture?

Jonathan: So when we hired to our culture, and we had the support behind that to get them to where they needed to get to you just can’t say, “Okay you’ve become good at this now,” you have to have a support involved. We started doing more of that than focusing on, “Well this person has done this already and here’s all the things that they’ve accomplished, they have their MBA and they’ve got all this.”

That doesn’t mean that person isn’t a good person, but that’s not what we focused on. We focused on those character traits of our culture. Think of it this way; we had so much less animosity running around inside of our thing. So many less upset people on who was jockeying for what position. Oh I would say generally I would say 95% of time we’re rooting for each other.

And that’s the workplace you want to be; where people are rooting for you. And that’s why culture is so important. You want to build that kind of culture, you don't want the so you want to hire the person whether they’re- we have one kid on the GED. That person on the GED within four years of working for the company made six figures.

Jeff: Wow.

Jonathan: And this is in a tech company, and earned every penny of it, was brilliant. But if you just looked at him on paper, that this was my life but let me say this; we mirrored this company off of my life. Never on paper did I look like I should be successful.

Jeff: Okay.

Jonathan: Never. I was never the great student, I was never great at finances, I was never great in all these different things until I was pushed to become so. And when I had the true opportunity to do it, I rose to the occasion.

Jeff: Sure.

Jonathan: So heart desire, all those traits, you really need to look forward instead of just, what was their GPA and their major in college so.

Jeff: As Jon mentioned earlier we are in the midst of writing a book together with another one of his mentors Dr. Bill Long. And Russ Ellis is helping us a good bit as well. And Jon likes to play himself as this guy that’s not very smart and all those kinds of things.

What I’ll have you folks listening in the audience though to know is that Jon off the charts on his ability to have outstanding emotional intelligence, which means he knows how to read people, he knows how to network. He knows how to build relationships and the value of relationships. So as we were working on this book, one of the things that just kept coming through was Jon really pays it forward.

Like he doesn’t ask for something for a relationship, what he does is he has the relationship and he does so many great things for the person in the relationship that they just want to do things for him. So I know that I haven’t talked here in words with you that relationships really matter.

Jonathan: Yeah.

Jeff: So Maybe let’s spend a couple of minutes about why these relationships matter so much to you and what advice would you give to some people listening out there?

Jonathan: So there’s nothing more important in life and in a relationship by the way it’s two people, it’s not one just giving and the other one taking. It is a relationship so how do you foster a healthy relationship? And then there’s various ways to do that and one of the ways I found is know your role, know what’s needed.

Everybody in a relationship has a role, that doesn’t make one role better than another role it’s just the key is what is your strength that you're bringing into the relationship? I always knew what my strength was right and I got better at that strength and better at that strength and I honed it, a lot of people want to work on their weaknesses.

Jeff: Right.

Jonathan: I’ll never work on a weakness. I have them, they’ll not get any better, they’re a weakness alright people. This is going to happen that way and my staff knew that. My strengths I would try to get better and better and better. And what I mean by that, I always wanted to help fix the problem right because that’s part of my relationship.

I can help you get better right. Well I started asking, what do you need of me? Ask that question. So here we are right, I would ask my executive team, my leadership; where can I help you best as I grew into this and got better and more mature into these things.

And then what that does is in a relationship, if you can put everybody at ease and nobody is wondering, “Why are we doing, and what’s the back reason on this? If we can get away from all of that, and the only way to do that is to get honest, get it out-front and get it on the table.

Jeff: Sure.

Jonathan: And that’s how you build relationships. So the same thing I just said with our employees we did the same thing with our clients.

Jeff: Okay, good.

Jonathan: In our worst moments we stood before them and in our best moments we stood before them. And they didn't have to wonder if we were.

Jeff: That’s right.

Jonathan: They weren’t back there wondering, “Is there anything in back going on, is there anything?” you know what I mean?

Jeff: Yeah that’s really cool.

Jonathan: That's the relationship. So a relationship can vary from my wife, to my best friends, to my executive team, to employees, to the client these are all relationships. And you foster them and you build on them and you’re honest in them and you keep them going because you never know where that’s going to turn out. As my wife would say, “You meet people and you try to do something with them quickly,” and she said, “Why?” and I said, “How do I know where that’s going to end up one day right?”

Jeff: Right.

Jonathan: Who knows? You don’t know. It may never end up anywhere, then no time lost after this point on. But you never know where that can go.

Jeff: Yeah so I think relationships is really important. I think it one of the ones when I, in working with all these clients across the world, we seem to be losing track of that. We’re so busy on the social media, to email to like all these kinds of things. So I really have respected Jon’s ability to do relationships.

And what I want you to understand too, is that Jon connected with people before he knew that he had needs. So he went out and found advisors. He works in communities and learned things. So for the folks who’re out there and come in day in day out and you’re working your 50-55 hours a week and you’re just doing the same thing day in and day out.

And you don't get out of the four walls of your organization, you’re really missing out on some great thinking power. As well as when Jon was out and about, people would get inspired. They’d hear the story, they’d want to come work. So when you're not out there building relationships you’re missing out on recruitment. You’re missing out on best ideas plus other things. Jon, anything else you want to say about relationships for the moment?

Jonathan: Listen.

Jeff: Listen.

Jonathan: That’s all I can say, is if you want to have a great relationship then listen. And that doesn’t mean to placate somebody. But if you really want to have a true relationship listen to one another right, and build from there, because as long as you’re forthright and honest you have to listen as the client, at your employees because sometimes what they’re saying you don't want to hear. So listen.

Jeff: So we have to take feedback too right?

Jonathan: Absolutely, only way to get better.

Jeff: As I like to say feedback is a gift; it’s just not one that’s easily received.

Jonathan: Right. Well we used to say this, if you didn’t fail or if our employees didn’t fail we didn’t want them. And we wanted them to fail every day because then they risked it. They went a little bit further than they should have because they didn’t know how to do it, and they failed at it. But guess what they just learned how to do it.

Jeff: That’s right.

Jonathan: Right now tomorrow do it again. Fail something new, don’t fail again the same because if you fail again the same then we really don't want you. But we gave them that if you're not out there asking your employees to fail then shame on all of you because they’re never going to get better.

Jeff: Yeah well that’s a great one to wrap up this section on. So we’ll be right back, you’re listening to Voltcast; Illuminating Leadership with Jeff Smith and Jon Hagmaier and we’ll be right back within two minutes. Thanks.

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Jeff: Hey, welcome back to Jeff Smith here with Jon Hagmaier and we’ve been having a great conversation about leadership lessons and Jon’s role within Interactive Achievement and some of the business and just all things that he’s learned. So what I want to go to is Jon we were talking before the break about culture and how critical that was. One of the things that I know though is that the team really evolved over these years.

Jonathan: Yeah.

Jeff: So this is about a 10 year run and I’m just wondering like how did your role change, how did it grow how did it develop? And then I know that we’ve got a listener on that’s one of the questions. So we’ll get to that but let’s start with that.

Jonathan: I would tell you that my role, I’ll use myself but all the founders changed our role. And mine was changed over time, it did but I was still trying to make sure the day-to-day and everything was running and still in my hands. And I did and I will tell you guys, I’ll be straight with everybody is I wasn’t really trusting the people I had put in place to do it.

And then once I went out and I hired and I’ll say Marcy Daniel, and Tom Hauz and Alex Legares, I put them with Richard Hammer who was my VP of Tech and Jacob Gibson who was with product and sales and then Lorraine Lang at the end, once I had that team it was really interesting, they used to say, “Let Jon Hagmaier be Jon Hagmaier.”

And let’s go back to what my strength was right, my strength is relationships and people. So I didn’t have to do the day-to-day. Marcy Daniel, man she ran that, Marcy Daniel and Tom all that team, they ran the company. I got in the car went out and drove and met with clients. I got out of my desk I walked down, I guess I learned this after I sold it, but they would call it a Jon bomb.

Jeff: Yeah.

Jonathan: I would go down and sit next to an employee and say, “How are you changing a kid’s life today?” and they’re working like you said. I have all these tweets, I have all these emails, I have all these things I got to get this done. And I’d make the sit and just pause. Pause and realize, what are we doing? Why is this more important than you trying to answer 47 emails right now?

You’re not going to get there. And that’s okay; stop, breathe and enjoy for a moment right. So I put about 9000 miles on my truck in six weeks and just realized how awesome our support team was, how awesome my executive team was. And literally I took myself away from the day-to-day.

Probably made one of two major decisions a month and the rest of the decisions were made by my team. And I trusted them to do it. And once I got out of their way, I was no longer the hurdle; we exploded in growth.

Jeff: Wow that’s great. Hey come back in the studio I think we got a call, you want to patch it through.

Lee: Hey good afternoon Jon and Jeff. Fascinating topic today I'm really enjoying it.

Jeff: That’s great.

Lee: This is Lee I’m on my way to a client off site management off-site and Jon you touched on something I'm sorry I know I'm unannounced but I had to call and ask you this question because you’re just touching on it right now. Getting the leader to trust their people and to not make themselves an obstacle to get themselves out of the way that is in our experience some of the most difficult things to do.

How do you get the person who is very high C or high D on the disc and maybe even I want to tell you about it. How do you get them to stand down and turn their people loose and really build that trust bridge? And I’m going to hang up and listen to your answer on the radio.

Jonathan: Sounds great thank you.

Jeff: Thanks Lee.

Lee: Thanks.

Jonathan: That’s a great question. You’re asking how we did it. Here’s how I would say, I’m going to go back to my mentors. So I had three mentors; Leon Harris, Russ Ellis and Ken Ferris at the beginning, who really I would say massaged, guided, got me to where I needed to be on different levels of growth of the company along with having Board of Directors.

Investor was great to have all those things kind of played that role for me to learn it’s okay to step aside once we go out and find the right people right. So I would never do that, I would fight that. You would never have got me to do it, until I went out and I found top notch people.

What was really interesting I would tell you this, the people that weren’t ready for the next level on my team, we didn’t fire them, we didn’t let them go. They were great people. We just put them in a role that their strengths fit well right. So it wasn’t like we would just say, “Hey everybody goodbye.”

But I would tell you this, here’s what I would say to anybody who’s not willing to let go, you don't trust the people that you have working for you, change that first. Get your culture set, change that to where you learn how to trust. And what’s it going to take you to trust somebody? Give them a chance. So Marcy and I, Marcy started out my VP in marketing, became my Chief Operating Officer.

Jeff: Sure.

Jonathan: We had conversations weekly on where did she need to go, where did she want to go, where are her strengths; she used to say, “I always want to be CMO,” and I’m like, “I don’t think that’s it. Your strength is a chief” she was just phenomenal.

And the more I saw her, the more we talked, the more we trust one another because I would say this, even if I stepped out of the way, if she wasn’t empowered to do her job, she wouldn’t have been successful. So all these factors had to come in.

Here’s what I would tell you if I was coaching somebody I would say, “What do you think is going to drive the value of this company the most?” And start working through that. And I realized when I went through that kind of exercise that it wasn't just about me. It took a lot of people to drive the value of the company.

Jeff: Yeah and let me pick up a couple of things there. So again Lee thanks for that call. I think getting really clear on role. So what role are you asking them to do?

Jonathan: Right.

Jeff: Clear expectations; what components do they need. What’s their decision-making ability? Where does it stop? When does it need to come to the CEO? When does it need to go to Jon used this term a lot-sandbox. So own your sandbox but don’t own somebody else's sandbox but know how our sandboxes connect each other right?

Jonathan: Right well I’ll tell you a great example was Richard Hammer was our VP of Tech, Jacob was our Chief Product Officer and Marcy was our Chief Operating Officer. They owned the vision and what was being built in our company right.

Jeff: Yeah.

Jonathan: And each one of them had a sandbox on that funnel. So it wasn't like we have to have a Kumbaya moment at all times. Jacob had his part of his ownership, Richard had his part of his ownership, Marcy had hers and they respected each other very much at each level. And that’s what really helped us strive. Tom owned the finance, we owned different things. How about this, the last two years no one came and asked me for a raise.

They went to or, “Can I give employees raises?” right they went to Tom who is the CFO. My favorite conversation was, how can I talk to Tom to get him to add more on my budget? And we’d have that conversation. Oh you know how Tom thinks now you have to work this in out. So everybody had their sandbox it was so well-defined.

Jeff: Right. Yeah a couple of thoughts to build on as well for the folks here trying to have that kind of conversation with their folks. Jon talked about this but know your strengths.

Jonathan: Know your strengths.

Jeff: Jon was very comfortable with conflict on the team. Not all people will be. Look, Jeff Smith is a CEO, I can embrace conflict, but sometimes I hesitate a little bit with it. But I’ve got people on my team that are great at it. So being able to know what are the roles of the team, embracing your strengths.

Jonathan: Right.

Jeff: Neither Jon or I will be the most organized dude in the world ever. But I know that Jon’s random self like with Marcy, they could really think through a process and go through with that.

Jonathan: Absolutely, right. I wouldn’t be successful, at the level we were, here’s what I would say this is what’s really key and I hope people understand. I would not have been successful without all of them.

Jeff: Right.

Jonathan: Think of them as the full pieces to the puzzle right without missing Richard Hammer out we’re missing that piece. Marcy out, we’re missing, Tom; it took that whole piece by sitting down and realizing I can't be before all of you out there feel you’re the whole piece.

Jeff: Right.

Jonathan: Right, I hate to break it to you right, you're just one little piece of that puzzle. It doesn’t mean you’re not in the puzzle, you’re just a small piece of it.

Jeff: Well and I think there’s also that hard decision for folks that are growing you guys, the management team that you had of 23 employees, is not the management team you had of 94.

Jonathan: Yeah right.

Jeff: So can you talk about that a little bit too because these were people that were loyal. As you said.

Jonathan: Oh went through walls.

Jeff: Yeah good, good people.

Jonathan: 20-hour days man, these people but what happened was and if I can go back in time I’d almost prepare them as I would my executive team. I prepared these employees to say as we’re growing you’re not going to make it with us if you are not willing to change and adjust. We never had that conversation.

So I had these great employees at 23 in fact if 23 employees probably half of them would have been great if we just stayed at 23. But once we went beyond that they didn’t want to come with us. Entitlements started coming in, all these different things. We started seeing more talent on our end and the people feel shunned.

“Hey wait a minute man I’ve been killing myself for you guys.” What I'm saying is this, the mistake we made if I could go back in time is having more honest deeper conversation with all those employees, just not managers just not VPs or whatever.

I mean everybody has a great title in the beginning and if I could give anybody advice, don’t give anybody a title for two years just because you’re going to have to change the title. I think Jacob Gibson changed his title like 31 times in the 10 years. But if I could go back in time the 23 to 46, to 65, to 90, and I’m sure past that, it changes every time.

And you have to be willing to understand some people aren’t going to make it. How can you be honorable, unselfish and generous of those employees to find them the next job, to give them a good chance to be successful whether it’s in a different position in your company?

You just have to sit down and work through that but I tell you here right now there are just some people who’re obstinate. They’re not going to go with you. And that’s okay, that’s a choice. But my advice to you, we tried to be honorable too and tried to figure out how can we help you get to whatever the next phase of your life is.

Jeff: Good job. I’m going to switch gears just a little bit we got about two minutes before break here. This humility Jon and you can hear him he’s a humble leader. He gives a lot of credit to his three wise men, to his coaches, to his staff right. Were you always this humble or is that a learned trait and was that important in your leadership today?

Jon: I would say in my 20s once again when you talk about people in your life Will Kramer, I was driving to be the greatest coach in the world, I worked for him, he was the head football coach Tucson High. And I was the Dean of freshmen, I was a rising star. He sat me down one day and just said and this was really when I was about 30 years old.

And he just said, “You’re not going to amount to anything with all this talent because you’re just running over people to get things done, to make yourself look good. And you’re always right, you’re never wrong, you’re not listening right.” And it was the first time in my life I actually listened to it. And I thank God that Will Kramer gave me that conversation.

Right after that I met my wife Mary, I was ready to be married in a sense. I’d failed at marriages before this. And I was ready to be a good husband, I was ready to be a leader in my family. I was ready for all those things, but no, I was never humble in my 20s. I was the greatest, I knew everything, I had an answer for everything.

That’s my red flag to everybody out there, when somebody has an answer to everything and they just don’t say, “I don't know, I don’t have that answer,” that’s a red flag to me. That was me at age 21 to 29­1/2 and I was humbled that day to realize I looked up and I literally said to him, “People really look at me this way?” and he said, “Absolutely.” And then I worked really hard for the next 15 years to change that.

Jeff: That’s great. So what I hear from that Jon is A) we’re in a learning journey so we have to be open to feedback. One thing I really respect about Jon is his ability to seek out advisors to whether that’s Mary his wife to his kids that give him feedback, to employees, to advisors.

Don’t stop learning. The way that you’ll grow and learn is seeking this feedback and not having to be the smartest guy in the room. So when we come back from break we’re going to hit on sort of a wrap up a few of Jon’s take-away lessons so that you can go back and apply them in your organization. So we will be right back in two minutes thanks.

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Jeff: Welcome back. I am here today with Jon Hagmaier. Jon is the former CEO of Interactive Achievement and is currently the CEO of Commonwealth a private equity group investing in business. Jon has been just sharing a wealth of knowledge with us today.

So Jon one of the things I want to talk about, we’ll kind of hit the last segment here will be mostly about summarizing key lessons, but one thing that I know about the culture was it was a fun culture to you. I mean you guys worked as hard.

Jonathan: We had a great time.

Jeff: Can you just maybe give us a few of your cool things that you had from March Madness to …?

Jonathan: Christmas Party yeah so probably one of the two defining things that we did March Madness. So everybody in the company had to put a sheet in and if you beat your- so the rule we had was on Thursday and Friday noon to five you weren’t allowed to work. We bought TVs, put them in every room you had to watch basketball games.

Jeff: So this is to watch the basketball games.

Jonathan: Yeah. We weren’t allowed to work, we’d punish if you worked. So if you beat your boss you got an extra day of vacation, if you beat me you got an extra day. But one of the fun things we did, we catered in both days, and we went around the Wheel of Cash and if you answered it some employees won up to $250.

It was quite funny. Tom Hauz and I were talking one day, I said, “On two days of giving away all this cash to all these employees I think we spent about $2000.” I said, “Are you joking these employees are so happy right now because they got a $50 bill or whatever. We do that but at the end the one who won we had two things.

We had the WWE, one of my employees used to be a wrestler so he found a WWE belt, had it made and the person who won them and their significant other won a four day, three day destination unknown. They had no idea where they were going.

Jeff: Oh wow.

Jonathan: They had 13 letters, they’d opened up the first one it said, “Go to the Roanoke Airport put your credit in when you land open up letter two.” And they did for three or four days.

Jeff: Wow.

Jonathan: They had no idea where they were going to go. So we had that fun and our Christmas party was just out of control. We spent a lot of money on it, we invested in it. And for us it’s just an investment in our culture, investment in our employees. We would do a video every year our staff would put together this massive video.

The last video we did was 23 different sets we had to bill. It was crazy it was just over the top. Started in October building that video it was so important. And we had I would tell you just an incredible massive party and celebration of each, our successes for years or that year.

So that type of culture we had a different game. We’d shut down work from 11 to 12 in the day where we would have Olympic games going on Jackie would come up with she’d get employees involved. We really empowered employees to be leading the culture.

Jeff: That’s right.

Jonathan: And then I would say the other big thing that we did is we gave back to our community and we expected that.

Jeff: Yeah and talk about the ability to sort of leave the office and get along to meeting the people.

Jonathan: So during the day we expected our employees during at least one hour a week during the work day to be tutoring students, to be working at a homeless shelter, whatever was close to their heart. We didn’t care, we didn’t say you have to go do this. That was led by my wife Mary at the beginning, so that was from the day one.

That was a big part of our culture to say we want you to give back. We’d talk about being honorable, unselfish and generous. Here what I’m going to tell you all, when you define your culture you have to live, breathe it every day. You can’t just on the hard decisions, not do it because it's hard. You have to do it so that’s what we did.

Jeff: Yeah. I think where I appreciated watching this story unfold was it’s not like there was, yes they had Tory games upstairs, and there’s this nice atrium and all that, there’s a corn hole. That’s not the important thing, it was the bonding that happened in these conversations.

Jonathan: People, relationships.

Jeff: These relationships and when people came in it sold itself because people were actually standing around having conversations and they were engaged and things. And you’d see them in the communities you’d see them playing on the softball teams. So for folks that are in the organization saying, “Well we might not have money for all that kind of stuff.” There's always money for relationships. It’s all you’re going to have lunch anyway.

Jonathan: Sure the ROI on that was crazy.

Jeff: Right so don't overly stress about something and corporate is not allowing you to do it. Take someone out to lunch on your own dime or just go and sit in the conference room and get to know each other a little bit because it’s about relationship.

Jon if you had to summarize, thinking back about your career here at Interactive Achievement, going from being a school teacher and a coach, all the way to a CEO that sold a company, if you were to sort of wrap up with maybe three things that we should take away from your journey, what would be some of the things?

Jonathan: Number one, know you don't know. If you want to get better you want to grow into a role like that, you have to know you don't know and seek out wisdom. So if you know you don’t know you’re normally going to listen to that wisdom.

Jeff: Okay to listen too

Jonathan: Yeah to listen to it.

Jeff: Okay do not just seek.

Jonathan: Once again I would say the other lesson I said it before is ideas don’t generate revenue, people generate revenue.

Jeff: Right.

Jonathan: You guys right now on your idea list that everybody is creating out there for the next big thing in your company. And that it won’t matter if your staff can’t go out and passionately, be involved in it making the greatest thing ever, and then they’ll sell that all day. And I’m going to say the third thing is learn how to trust.

If you can't learn how to trust you’re never going to get your company to the next level because there’s a low ceiling to that. Everybody individually on their own trying to get your company to where they want to get to, because you know what, I get the glory I get all of this I am the center, I, I, I, if you can’t learn how to trust-let me say it the positive way- when you do learn how to trust you’re going to see astronomical growth.

Jeff: Well those are all fantastic. And one that we hit on early that I think is important I’d like to revisit is this; fail fast, fail often but not the same failure twice.

Jonathan: Right, right.

Jeff: So we just touched on that before break and I don’t think you gave it real justice. So why is that concept important and as young leader or maybe as a leader in a mid level organization we can’t afford a lot of failure. So why are you telling us to fail?

Jonathan: Because you can’t afford not to fail. Because if you’re not failing you’re not growing, you’re not getting better, you’re not getting to the next level whether it’s your product. Like if you put a perfect beta out, that’s terrible. Everybody came back and go wow this really worked. Wow wait a minute here, we want it to fail.

We want to see what’s wrong, we want to see the hard situations stretching it. Think of it from a product standpoint, your people are a product. They’re the product of you guys. So let them fail, stretch them, give them the opportunity to stretch. That’s another we don’t do. We put the protective barriers up or just barriers, to not even let them, allow them to fail.

Just a great really quick thing we were driving in the car my COO, my CFO and I were driving we were doing a big launch that day. And I said, “We’re going to launch it during the school day.” And Marcy said, “No, we’re going to do it at four.” And we launched at 2:30 and it crashed everything.

Jeff: Oh no.

Jonathan: And the kids couldn’t test. And Amy Robertson who was one of our top leaders and she’s still growing calls Marcy and we’re on the phone in the car and I said, “Oh, my gosh.” I said, “Marcy, ask her why she did that.” and it was the greatest answer ever and she said, “Well Jon told me to fail the day before and I failed. So we’ll never do it again.”

And I said, “That was the greatest answer ever. That was awesome.” And it’s true and what was great is Amy didn't feel like, “Am I going to lose my job today?” right sure yeah it was a mistake she said, “Hey made the mistake,” she never made it again, and that’s what you want with people. Let them make mistakes it’s alright.

If they make the same mistakes over and over again that’s where you you’re your problem. Let them fail, let them make mistakes, let them grow. And if you’re going to do that, you’re going to have a great culture running around your company.

Jeff: Jon it was really an honor having you here today.

Jonathan: Yeah thank you, I really enjoyed.

Jeff: Yeah thanks for doing it.

Jonathan: Yeah if anyone ever needs to follow-up I’m always open to help anybody anywhere I love doing that so I’m well prepared.

Jeff: Well thank you Jon. So like we referred to earlier, Jon and myself and Dr. Bill Long and Russ Ellis we’re writing a book together about the journey. So stay tuned, we’re looking at sort of January or February type of launch. And we’ll have Jon back on to extrapolate a few more of the lessons. Few things I want to make sure you heard was Jon hired the great talent.

He worked hard, this was not an easy journey. But he had sort of the grip and the willingness to go in there and do it. So don’t think that this was easy, hey work hard, surround yourself with really great people and go get some feedback, build some relationships, have the right attitude and you can be successful.

Next week on the show we’re going to have Carol Wilson. Carol and I have done work together at the Cleveland Clinic serving leaders. So we’re going to talk about how do you build and grow serving leaders. And she's now at Tableau and hearing about what are some of the things that she’s doing things in leadership space.

So again Carol will be with us next week. So thanks for joining us today on Voltcast Illuminating Leadership. Again we’ll be back next week at one o’clock ET on Voice America, you can reach me at area code 540-798-1963 jeff@volatageleadership.com and our website is voltageleadership.com. You’ve been listening to illuminating Leadership thank you again Jon.

Jonathan: Thanks Jeff.

Jeff: And we will see you next week. Have a great week everybody.