The founders of Atlanta's Lyfe Marketing may all be under 30 years old, but Keran Smith and brothers Sean Standberry and Sherman Standberry have the chops to oversee digital marketing for 400 small businesses--earning $3 million in revenue last year and the No. 299 spot on this year's Inc. 5000 list of America's fastest-growing private companies. As these Founders Project mentees add the talent to shore up high-volume sales, they're worried rapid growth will weaken their company's tight-knit culture.
That makes their mentor, Kabbage co-founder and CEO and fellow Atlantan Rob Frohwein, a great match. A small-business-funding platform that reached a $1.2 billion valuation in 2017, Kabbage is so beloved by its 600 employees that it earned a spot on Inc.'s Best Workplaces list in 2018 and 2019. (It's also a sponsor of the Inc. Founders Project.) As Frohwein advises, sometimes recruiting and retaining the right people starts with letting the wrong ones go. --As told to Cameron Albert-Deitch
Sherman Standberry: I used to think it was so cheesy, hearing Bill Gates say, "You need people to grow a successful business." Now, it's one of our biggest challenges--getting good people in the door.
Frohwein: One of the most important things we've done is design job interviews to figure out whether people are self-aware. We ask a bunch of really bizarre questions: What's the one word you'd like on your tombstone? What's your favorite curse word? People are like, "Why the heck are they asking those questions?" They're intended to see if people know what they're good at and know what they suck at. You also figure out whether they're willing to lend a hand when somebody raises one and willing to raise their hand when they need help--whether they're comfortable being vulnerable in the workplace and whether they're respectful of others and caring.
Sherman Standberry: How do you feel about remote work? We've read statistics that say people who work remotely stay at their jobs longer and are happier, but from a business perspective, you risk a lack of productivity and collaboration that some people feel they need.
Frohwein: We hire people who are remote if they have a very specialized skill that I can't get somewhere else, but for the most part, I ask people to be in the office. We just implemented a floating work-from-home day. At first, the team wanted to make it on Fridays, and I said that if you coordinate a work-from-home day for everyone, it will stall productivity. So, if you're going to do work-from-home, don't do it every day. You allow a single day, and you make it random.
Smith: What about culture? Millennials want the freedom to work when they want, game rooms, and things of that nature. We've been a little hesitant to have a culture like that.
Frohwein: Somebody once said to me, "Today, offices have pinball machines and Ping-Pong tables and a kegerator: Young people need those things." But that's not culture. That emanates from culture. First, you have to have people who genuinely want to drink a beer with one another, play a game with one another.
Sean Standberry: I'm sure there are people who abuse those perks, though. How do you prevent that?
Frohwein: Treat everybody like an adult. Make sure they understand what their responsibilities are. And if they get it done, then what do I care?
Most people are going to do the right thing, and there are going to be a few who try to take advantage of every last thing you do. So many people end up letting a few problematic customers or employees ruin the opportunity for everyone else.
Create policies for the many. Don't create policies for the few. Then, be willing to fire people who aren't working out. How are you at letting people go?
Smith: Terrible. People stay longer than they should because we don't have anyone to replace them.
Frohwein: You need a bench, a farm, and a path. A bench is a network of people you might want to work with in the future. So when you're ready to let someone go--or someone quits on you--you have three people you can call and say, "Hey, a great opportunity just opened up."
A farm is people who are cross-functionally trained. If you have a specialist focusing on one area, you should have two other people who, combined, could take care of that job. You might have to allow that training to take 10 percent of their time--on a continual basis--but it'll allow you to fire or replace somebody very easily.
Lastly, a path. It's important to figure out what people's paths are, where they want to be, and how you can help them get there. If that's outside the company, they end up leaving anyway--but they'll take care of you while they're making that transition, and be a loudspeaker for others to join your company.
Smith: A comment on your Glassdoor stated that if someone doesn't fit your culture, that person will be let go. This is a very real scenario for us: Would you fire a top performer who doesn't fit the culture?
Frohwein: First, you try to get them to change. I always believe in trying to help people get to a better place, especially a top performer.
But sometimes you see things in their behavior--like if they're harassing someone--and you have to cut the cancer out. Those are the hardest changes to make. We had one recently, and we took care of it right away.
We're learning that we can't manage every part of the business.