El Capitan in Yosemite

December 14, 2021

People First, Followed by EBITDA

Last week, I had an inspiring coaching session with a real estate brokerage owner on the Eastern seaboard. The session surrounded hiring and motivating the firm’s leadership team. What are the right personality profiles and motivational compensation methodologies?

I generally preface my comments with “take my ideas directionally and not literally as the practices that worked for us may not fit every business model.” 

Being a competitive athlete, I have always valued teamwork and people first, followed by incentive compensation based on EBITDA [earnings before interest, taxes, depreciation and amortization]. The combination worked in the cultures we created, and our people thrived.

We sought leaders and executives with three common attributes:

  • Competitor: We wanted every manager or executive to have a competitive edge – tell me about a competitive stripe you possess. 
  • Instincts: Share a story about a life decision you made based on your instincts vs. concrete facts. 
  • Confidence: Exude confidence, not arrogance, show me you have what it takes to execute on your competitive nature and instincts.

How many times have you met someone with a great idea/instinct that they never execute on until someone else does and then they say, “I had that idea years ago.”

Free Solo – Alex Honnold – Competitor, Instincts & Confidence
Free Solo – Alex Honnold – Competitor, Instincts & Confidence

We love rewarding managers and executives based on their operations EBITDA; or for a COO, CFO or CMO, based on the EBITDA of the firm. We like this as all roads lead to EBITDA!

If a core responsibility of an executive is revenue, retention, and recruiting, each of these impact EBITDA. It’s clear, objective, and transparent. If one region or division is outperforming another, the rewards are proportional and appropriate. If a manager wants a larger bonus, build a more profitable business unit!

This is an amazing time of year to focus on objectives and compensation plans for 2022. Your team will love the focus on results, the easily measured rewards, and the satisfaction that comes from reaching those accomplishments – even more than the money!

Check out this LinkedIn video clip from my good friend Julie Faupel, Founder and CEO of Realm, “Just Start!”

This is Where We Are Now!


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