Million Dollar Culture Penalty

F1 race car hauling a heavy industrial refrigerator

“$3,000? I never approved it!”

“You did, you gave me approval to travel with him and take him out.”

“No, I didn’t approve $3,000. You will have to pay out of your pocket…”

“He just gave us $20,000 today in sales.”

“I don’t care.. he’s your buddy and you traveled and got to take leave. I’m not here to pay for your holidays.”

The Salesman walked away and muttered to his colleague

“By first of month.. I’m out of here…”

And he was true to his word.

He resigned on the first of the month.

The boss begged him to come back.

The damage was done.

The Salesman went to a competitor who was sinking fast and nearly shut.

He brought over some of the key clients, especially the one he spent the $3,000 on out of his own pocket.

Within 3 months the competitor was on track to book seven figures in revenues.. A 10x increase over what they were doing before the salesman came over.

The salesman was the first of staff departures that would happen to the angry boss. In fact over the next seven years his entire team would turnover 100% three times.

In an industry where the competition turnover was less than 3% and sales teams often stuck together for decades until people retired.

The angry boss began spending more of his time with lawyers fighting lawsuits from disgruntled employees.

The business did grow but it was like an F1 car racing down the track while dragging a refrigerator behind it.

There was a common theme to the resignations.

First it never had to do with money. Everyone was well paid.

Second, it wasn’t about better opportunities. Often the employee leaving was going into a riskier situation and jeopardizing what he built.

It was culture. A dysfunctional culture.

A culture where the employees felt demeaned and often lied to.

One where they ended up taking the risk and sacrificing opportunities in order to pursue their careers elsewhere in peace.

Where goal posts didn’t move, and politics didn’t reign supreme.

And it cost the angry boss millions. 8 figures in less than 8 years in terms of the revenues that he would have captured if the staff didn’t quit so often.

For that boss, the $3,000 he saved became arguably the most expensive $3,000 ever saved on the planet.

How about you?

Do you have a growth culture or a culture that your competitors would beg you to keep?

 

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