Scott Hanis spent two decades in HR, from corporate leadership to private equity due diligence, before founding Fortitude HR Solutions to help small and mid sized businesses build the people side of their companies. In this episode, he breaks down why leaders wait too long to fire underperformers, how to manage remote and offshore teams across cultures, and the clear warning signs that a business has outgrown its current leadership and organizational structure.
Episode 34: Building the People Systems That Scale with Scott Hanis
Why do promising businesses struggle to scale even when the market opportunity is there? For Scott Hanis, the answer often has less to do with strategy than with the people systems underneath it: clear roles, capable leaders, disciplined hiring, frequent communication, and accountability that grows with the company.
In this episode, Mike and Zach sit down with Scott, co-founder of Fortitude HR Solutions and a human resources leader with more than 20 years of experience. Scott traces his path from corporate HR and international operations to private equity, mergers and acquisitions, and eventually entrepreneurship.
Scott explains how HR has evolved from an administrative function into a strategic business partner. For small and midsize companies, that means connecting talent decisions to business goals, building the right organizational structure, and knowing when outsourced expertise can provide support without the cost of a full internal department.
We dig into performance management, hiring, and the difficult conversations leaders delay. Scott shares why employees need clear goals and regular one-on-one meetings, how poor performers can damage morale when leaders avoid accountability, and why a vacant or badly filled role creates costs far beyond payroll.
You’ll also hear how founders can step out of every major function, prepare high-potential employees for leadership, integrate remote and international teams, and create a culture where communication, positive recognition, training, and defined career paths help good people stay and grow.
“People either live up or they live down to expectations.”
“Do your due diligence, and don’t continue to delay it.”
“In order to develop and grow people, you’ve got to invest in people.”
“The owners, the founders, they’re in their own way. They won’t let go of control.”
Scott Hanis is a seasoned HR executive and business leader with more than 20 years of experience helping organizations align their people strategies with business goals and sustainable growth.
Before founding Fortitude HR Solutions, Scott held HR leadership roles with family-owned, international, and private-equity-backed companies. His experience includes recruiting, employee relations, performance management, succession planning, organizational change, mergers and acquisitions, due diligence, and post-acquisition integration.
As co-founder of Fortitude HR Solutions, Scott partners with business owners and executive leaders across the United States to design HR structures, recruit talent, strengthen accountability, develop leaders, and implement systems that support measurable results. He has also led HR initiatives for global organizations with more than 1,200 employees.
Scott mentors entrepreneurs and executives through the Legacy Family Mastermind and frequently speaks on leadership, organizational structure, high-performing teams, and the people systems businesses need to scale successfully.
Connect with Scott Hanis through Fortitude HR Solutions, find him on LinkedIn, or email scott@fortitudehrsolutions.com
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(0:00)
When we're not making decisions collaboratively as a team and there's a lot of tension or fighting and it's not healthy, you might have somebody that may be again stuck in their ways, they're not willing to kind of adapt. They don't see the big picture. That might be time for where we've outgrown that leader. Especially when you're in the growth stage and you're in the building and scaling stage of growing a business, you might hire somebody that was used to working at a $10 million organization and you're trying to get to 100 million and they may not know how to get there. So, we might need to hire somebody that's been there already that can walk us through those steps.
INTRO (voiceover) (0:34)
Most people think saving money is the answer, but the truth is saving only gets you to zero. Join Mike and Zach as they flip the script from saving to earning, from zero to unlimited potential. Welcome to Save to Zero.
Zach Richards (0:52)
Hey everybody, welcome to episode number 34 of the Save to Zero podcast. We are here with Scott Hannis who is a seasoned HR professional. He started Fortitude HR Solutions. He's been in the HR industry for about 20 years now and partners with business owners and leaders across the United States to help them with their talent side of their business. Scott, thanks for coming on. Really looking forward to uh this conversation.
Scott Hanis (1:18)
Absolutely. Thank you so much, Zach and Mike. Look forward to it as well.
Zach Richards (1:22)
So tell us about your background. How what made you get into HR and then focus on more working with businesses rather than you know a lot of people work for HR and they work for big company or whatever but how did you get to where you are now?
Scott Hanis (1:35)
Yeah. So I went to school in uh Cleveland, Ohio where I live uh to Baltimore and got my degree in business management and I had an amazing professor Glenn Blair that was my HR professor when I took an HR class and that's when I first started becoming interested back in like 2000. So it's like 26 years ago now. Wow. I feel really old saying that. And uh went ahead and got a degree in business management and started working in the the corporate world. Got into bank management and was a management traininee and figured out very quickly banking was not for me and did a short stint for about two and a half years in sales and got to learn that side of the business. And then I went to work for a family-owned business with about 350 employees. They had four people doing HR. Nobody was doing it very well. And the owners are like, "Scott, you're a people person. Let's put you into the HR seat." So, I learned a lot by trial by fire, Zach and Mike. Just being in there and learning. I went through a lot of u there's a professional organization called Sherm, which is the Society for Human Resource Management that I joined. I got really engaged in that in the local chapters. Went to a lot of like lunch and learn events. Became really familiar with a lot of the employment laws and our employment attorney and did that for about five and a half years with that company. uh everything from you know recruiting and hiring to employee relations to benefits administration and then got more involved in the performance management side planning. Uh this smaller company allowed me to get involved in project management and some quality management. They were uh ISO and TS certified uh organization within the automotive industry. So I got to learn about that side of the business and really my love for HR and and and really comes down to people. I love being around people. Uh we were joking around before the start of the recording uh is I'm not an outdoorsy guy, right? Like I love people. I want to be around people. I am what John Gordon talks about in his famous book, The Energy Bus. I am an energy vampire, but I suck people's positive energy to use to spread that to other people. So that's why I love HR. I get to help people every day and make an impact. Um but after I was there, I I I started to very quickly progress in my HR career. I became a regional HR manager. I was there for about uh 18 months and then I moved on to become a director of HR uh for an international company where I got international experience in Brazil and Mexico and I got really involved on the private equity side of the business. Our business uh that I worked for went through an acquisition uh where we sold the business actually was actually a chapter 11. So we merged with one of our joint venture partners and we ended up uh going through this chapter 11 process and we got to work with McKenzie and company and EY and Grant Thornton. So I got to see a lot of that side of how business is run. And then from there uh Zach and Mike I ended up going to work for a private equity company where I had the opportunity to work on you know due diligence and buying companies and integrating things and change management. And then finally seven years ago uh my wife and I uh made the decision to quit the the corporate life and started uh our business called 42 HR solutions. So it's been seven years. I love what I do. Get to help people every day. It's not just on the HR side. Everybody thinks of me as like maybe a Toby from the office. Not Toby from the office. I like to have fun. Uh you know it's not always black and white. There are gray areas in business and in life. And uh you know I've had a lot of great mentors between Mark and between Tim that you guys know and so it's been a really good experience to like change my corporate mindset you know being W2 all these years to moving into more being an entrepreneur uh an entrepreneur and helping people. So how
Zach Richards (1:35)
has HR changed from you know when you were working for a big company to now you're working with all these smaller businesses and and I mean I'm sure you got your own HR right that you guys do but then you also help people. So what what's different about working with smaller companies?
Scott Hanis (5:35)
You know what I love is that you don't have the the politics or the bureaucracy sometimes that you do with the larger companies. There's a lot of like corporate red tape and you know working for the PE firm was great. I got a ton of great experience. Had a lot of great bosses or leaders and mentors there. Uh but sometimes decisions just take a lot longer. So working with you know smaller businesses, medium-sized companies. Decision making typically happens faster. you know, in the private equity or the corporate space, you have what's called like an LOA, a level of authority agreement, typically when decisions are made. And you might need two or three levels of of signatures or approval before something can happen. And I find a lot of fulfillment in being able to work with like one individual, one business owner, you know, one leader or two leaders and be like, "All right, like what do you think? Let's talk about solutions. Let's not throw up anybody's desk and like vomit. Let's come up with solutions and ideas and let's put that stuff into practice." So like the speed really Zach and Mike is much quicker with smaller and mediumsiz companies that we work with. Uh and then you know a lot of things have changed right even you know again I'm going to show my age here. I'm 47 uh been in the industry over I know I feel really old Mike. I don't know why
Mike Seidl (6:44)
that's old. Holy I know. Well I feel a lot younger now actually because I've lost a ton of weight. So maybe that's a whole other story but
Zach Richards (6:53)
you don't look younger. You look older.
Scott Hanis (6:55)
I probably Greg Harris here. I mean I should have done all the HR uh but but you know with that um you know the speed of what the way that the information works from you know 20 years ago when I got into the industry you know AI now you have all the technology you know Slack and Monday and all these different you know communication channels. I mean, I still remember faxes. I still remember getting memos put in like the Manila envelopes that would be in her office company from the different locations and departments and people actually had mailboxes or Yeah, you know what I'm talking about, Mike. Or or you even had, you know, uh, you know, there's it's really evolved, I would say, Zach and Mike, to answer your question directly, it's evolved from HR being, you know, the personnel or the party planning committee. I view HR as more a strategic business partner. How do we work alongside you know the rest of the executive team? Uh you've seen a transition over in the last five to six years since co some of your your CEOs and executives from the big companies are coming from the the chief human resource officer seat because they know how to deal with change. They know how to deal with people. They know how to go through and uh think you know different uh problem solving methods versus other things. So you're seeing a transition in some of that and uh I'm excited to still be a part of the industry and see where things go. Well, let me ask, how does strategic AR look for a small to medium-size business that doesn't have a full internal HR department?
Mike Seidl (8:25)
Yeah. So, I I think you got to look at your resources, right? We got to look at our budgets. What can we afford to do and what can we afford not to do? And I think we need to look at what are we doing, you know, what are our goals for the organization? What are we trying to achieve this quarter, this year? And then do we have the resources internally to do it? or a lot of smaller or medium-sized companies, they'll work with outsource companies like us or we'll come in and we'll either be like a business partner to them. So, they don't have to do all the work. They don't have to go hire that full-time person right now with the expense of W2 wages, you know, benefits, you know, potentially, you know, the all the social costs that go along with that hire. So, again, it's a little bit different. It's more strategic in nature, Mike, because at the end of the day, you're getting what you need. You don't get all the other stuff. So, it can be a win-win for business owners. The challenge is is there's only so many hours in the day, right? And it can be costly when you work with outsourced, you know, organizations because you have hours that might be accumulating or there might be a retainer package and things that goes on. So, you got to make sure you're very clear on what you want. And I'll tell you, a lot of businesses, you know, there's there's lack of direction, there's lack of clarity, there's the shiny object syndrome. We hear about it a lot in our mastermind group. And because of that, there's a lot of distractions and people don't know what to do. So there's accountability that goes in that. There's lack of leadership. I mean, there's a lot of different things that go into there. So I think we got to focus on that. Look at the pain points. What can we do to fix those things and put like a strategic plan in place to help them overcome those things and let them see results.
Scott Hanis (9:56)
Gotcha. How should leaders structure performance management so that it's frequent and useful and the people I'm sorry and it and it's focused to the business outcomes.
Mike Seidl (10:08)
Yeah, that's a great question. So, anybody that has performance reviews, if you don't have those, you need to do them. Uh you can do a lot of different ways, Mike. My preferred method I like to first of all when there's a new hire or anybody that joins the organization or anybody on a yearly basis should be receiving goals you know and so they know what their clear expectations are for the you know the year or it could be for the quarter again depending upon how you break them down uh but with that you know we need to give them clear direction on what the targets are what the metrics are you know it could be KPIs could be smart goals could be KP um sorry PPOs personal performance objectives could be rocks I mean there's a lot of different ways we can name it but we you need to be very, you know, clear on what those things are, communicate them, and then I'm a big proponent of a a either a bi-weekly or a monthly one-on-one meeting to check in with that team member about their performance. Where are they hitting? Where are they not hitting? What do they need from me as their leader? How can I help support them? What do I need from them? Are they on track? Are they off track? If they're off track, what can we do? Do they need more coaching? Do they need more training? Is it really, you know, is it the right goal that's aligned with their objectives for the organizations? Do we need maybe do we need to pivot? And if we're doing those things frequently, Mike, if it's, you know, bi-weekly or if it's monthly, then we've got 11 months worth of data. So, I like to then take all that data and then write the annual performance review. And part of the annual performance review that I like to do is we do a self-evaluation. You know, have the employee, the team member, you know, rate how they feel that they did. And then there's no surprises, right? You know, if we're meeting with people frequently and we're having conversations and you we're building those relationships, we can talk about what they've done well, what they need to improve upon. And when we go to write the annual performance review, there's no surprises. They know how they performed. As long as you've communicated that clearly versus if you didn't do that and then it's a surprise, that's when people get hurt. That's when people get upset. That's when people quit. That's when they quit their boss, they quit their leader, they quit the organization. So just being very clear in the communication. Um I've got a famous phrase, you guys can help me spread it. It's not famous yet, but people either live up or they live down to expectations, right? But if you don't clearly communicate that, look in the mirror. It's on you. That starts with you and your leadership. Yeah. A lot of companies now are using offshore employees.
Scott Hanis (12:28)
Uh different countries, the Philippines is very popular, a number of South American companies uh countries as well. How are you able to integrate US-based employees with employees that are offshore? How does that all work? That sounds a little complex.
Mike Seidl (12:44)
Yeah, to me it's no different than having the remote team members throughout the US, right? Yeah. Like to me, our team is all remote at 42 HR Solutions. So, with that, I mean, we can meet if we want to. We can come together, you know, we're all pretty local, but everybody works remote out of their home. So, it' be the same thing with the people, you know, that are offshore. Uh to me again it starts with you know meetings. Again I like daily huddle meetings you know just for clarity and direction. It could be a weekly team meeting. Where are we at? What are we doing? You could do like fun little engagement things to get the team involved. You can do a lunch and learn. You could do a happy hour on Friday. You know at 5:00 let's just, you know, let's just talk and network. Let's spend time. Let's talk about what we did really well. Let's share some gratitude. Where do we need to improve? You know, so you can do basic things like that. And then I think it really comes down to each of the the owners or the business people taking time to build those again those authentic relationships. But it doesn't happen overnight, Mike. We got to put the time and the energy and effort into building these relationships. Sure. Do you find any roadblocks that you need to get over when you're dealing with different cultures?
Scott Hanis (13:51)
And what I mean by that is Yeah. I I uh I've had employees in the Philippines and it's culturally different than the US. the US is they're more more assertive overall. Um especially even if you take the least assertive person in the US I think compared to other countries they'd be considered very assertive and sometimes getting them to open up and interact in a way that we can work is a little challenge. Do you run into that as well? And how do you handle it? Yes. So I ran into this in my corporate career and I I coach and you know consult clients on this here and now with our business uh when I worked for a company called Tech for we were owned by a company that was out of Braz uh sorry out of Germany they went through this chapter 11 they sold to a company that was out of India and we had to learn how to work with everybody's culture and I used to go to Mexico and Brazil usually once a month to one of those two countries and I had to learn how they like to work how they like to communicate what's important to them what's part of their cultural norms, what's acceptable, what's not acceptable. The best example I can have of this for you, Mike, is my former boss who I love dearly. I still talk to him. He's a mentor of mine. His name is Kevin. Kevin and I and our director of finance, we went to Brazil the very first trip. And Kevin's trying to get everybody to get this done, this done, this done. And didn't take the time to build the relationship with our team in Brazil. Just went in there like a drill sergeant. I need this, I need this, I need this. We were there for two weeks. After 4 days, nothing was done from the Brazil team for what Kevin had asked. I went off and met with the HR and the safety team. I got to know the team. I asked them about their families. We talked about their football, favorite football teams. We just learned a little bit about each other. After 4 days, I had everything done that I needed to get done in the twoe period because I got their buyin and their uh we had good collaboration and discussion. Kevin was banging his head and he's like, "All right, we got to stay another week." So we end up staying two weeks that first time going to Brazil. And it was a learning lesson. Again, it doesn't matter what country, what part of the world. And to me, it's not even the countries, it's how do we work with people, right? Again, a great one-on-one question for every new hire or every team member. How do you like to learn? How do you like to communicate? And our jobs really as leaders is to kind of meet people where they're at. Not that we need to like tailor our lack of you know results to somebody because we have to have those again those expectations but we still need to tell them like what we expect but we also need to listen to them and provide feedback. Yeah, that
Zach Richards (14:20)
makes sense. And especially the different ways people talk. Like I used to work with a lot of people from India at a software company. And something I had to get used to is like different words they use. Like they would say, "Oh, I have some doubts about this thing that you did." Which as an American, that sounds like a little bit offensive. Like what do you mean? And they just mean questions. Like that's all it means. I just have some questions. It's nothing like negative at all. So there's definitely like different uh things like that that you've got to pick up on. For sure.
Scott Hanis (16:46)
100 100%. and Zach a great great story about that. So our our headquarters was out of India and uh we had people that would come over from India and as they came over to to the United States sometimes it was the very first time they were here and I would you know I was kind of known as like the the chauffeur. I'd pick everybody up from the airport. I was closest to the airport. I'd teach them how to drive. I' you know show them how to go shopping you know because in in India they had a different system right different cultural norms. And so, you know, I also had to take some of these individuals aside because they would come over and the one gentleman who I still talk to to this day, he come up to me, Scott, you will do this now and pointed his finger in my face. And I'm like, you know, I understand we got here. Let's talk about it and let me explain why that's not going to get you very far here in the United States. So, and then he would explain to me when I was talking to somebody over in India how I needed to better communicate. So we built the relationship first and then that really helped us to have these open conversations. Uh another another great example of that Mike and Zach like we were in a leadership meeting with the ownership team from India and we're sitting in Detroit because we opened up a sales office in Detroit by all the big you know automobile manufacturers and their suppliers and we're sitting in this office and you know the the CEO he's speaking like really quiet. So he's speaking like as a whisper and I'm like I'm talking to this other gentleman and he's from India. I'm like why is he doing that? He said that's a cultural like business practice that they taught him in school to be like very quiet. So everybody has to engage in listen to him and it forced everybody to show up to the meeting on time. It forced everybody to like if you didn't know your numbers and you weren't prepared don't even show up to the meeting. So like I learned a lot from just even being in that uh that room and understanding what was again what would the expectations were.
Zach Richards (18:33)
Interesting. So when when people are looking to hire a like HR company s such as yourself or any other for example like when is a good do you have a good rule of thumb for like when it's a good time to do that when they're at a certain scale or level that that that's a smart decision?
Scott Hanis (18:51)
Yeah. I to me like it really depends on the business and what their goals are. Zach. So, I'm going to give you a little bit of a generic answer here. You know, somebody that's a soloreneur that's got one team member and they're looking to hire their first W2 team member, they need somebody to go alongside them and help them with that process. You know, how do you interview the correct way? What questions can you ask? What questions can't you ask? How do you onboard them? What forms do we need to fill out? How do we process the payroll? Um, so we can be helpful there and other companies like us can be helpful there. But once you get to like 10 employees, 10 team members, and you're really starting to put in processes and policies, and you've got different things with, you know, uh, strategic planning and you're doing goal setting and just all the stuff that you're really trying to build an organization, I think that's when you really need to like start thinking about making the investment of hiring an organization, you know, that's going to help support that. Uh, there used to be a rule of thumb for every 50 team members, the 75 team members, you'd have one HR person. I still feel that that's the case, but organizations now with AI technology and then also just technology in general and some of the automation, it's getting pushed to like one to every hundred, sometimes one to every 200 that you've got one HR person to support that number of of team members. But it also depends on, you know, if you've got benefits that are fully automated in their in your in the system, you know, they can run through that. They don't need to have like the handholding or the one-on-one, you know, human experience. It depends on the industry, too, Zach. So that's why I'm being a little bit generic. If it's a blue collar industry, I I typically am more involved than if it's a white collar professional, you know, organization, they typically can have a little bit less HR involvement because again, a lot of things can be automated. They're used to the technology. The blue collar, you know, team members, you know, they may not be used to that. They're used to working on equipment and in the field. So it's a little bit different, you know, environment. Not that they can't pick it up or learn it. It just there's an adaptability and there's a comfort thing in there. And if we're being very transparent, people do not like change, right? So again, you got to meet people where they're at. It's part of leadership.
Mike Seidl (20:53)
So what difficult issue do you see that business owners take too long to address with their staff and it it's caused costly delays and so on.
Scott Hanis (21:07)
Uh there's like 17, Mike, that I can think of, but I'm going to give you I'm going to give you two. I'm going to give you two. Um the first one is not uh letting somebody go that is not performing in a in a quicker manner, right? And you hear about this a lot. This is not a new one. Um this to me is, you know, we're friends with somebody, we built this relationship like they continue to not perform and we're not holding that person accountable. We don't want to have the tough conversation. We're afraid of healthy conflict. So because of that, we let that person continue to not perform. Meanwhile, the rest of the team that are high performers or that are doing good at their job, they're like, "Why is Scott still keeping that person on the team?" So, you you kill morale, you kill culture, you ended up, you know, losing sometimes good key team members because they're like, "Well, Scott's not going to do anything with this person, so why should I stay?" Or you don't show the appreciation or the value. So, again, that's the the first one, Mike. The second one I see business owners and again it probably goes into hiring a little bit our culture. We hire the wrong people or we don't look at the opportunity cost. You know if a position or a role has not been filled for 6 months and it's a sales role. Think about all the dollars in revenue you could have been bringing in or the business development or planting of the seeds. Yeah. So sometimes we take too long to make that we're thinking we're going to find the next right hire. you know, if you're a small to a medium-sized company and you don't have all the big, you know, glorious benefit package of medical, dental, vision, retirement, life insurance, you know, unlimited PTO, some of these other amazing benefits that larger companies offer, you got to figure out what's your competitive advantages. Why does someone want to work for your organization? How do you become an employer of choice that people want to work with you and work, you know, at your organization? What's your vision? What's your mission? What are your values? And you got to tile that together. And sometimes people don't do all that and then somebody joins and it causes them a bunch of issues or they're afraid to make the decision. So like, oh, we got to interview this person, this person, this person, and they keep delaying it thinking they're going to find the next best person. And a lot of times, you know, you're not going to get 100% of every attribute. You might get 80%. But then you got to onboard and you got to train the person the right way.
Zach Richards (23:17)
I mean, a lot of times you hear people say like, "Oh, you should hire slow and fire fast or whatever saying you you hear all these things." Do do you agree with that or what what's your thought?
Scott Hanis (23:29)
Yeah. So, uh I would say hire with due diligence just like if you're buying a company or if you're looking at, you know, any type of acquisition, know your numbers, know what you're getting into. Ask the questions. When I lead due diligence for like acquisitions with clients, I'll ask 450 questions. I don't really care. Like I I'm going to be a pain in the butt. I don't want somebody to have a regret. I want to know what's going on and I want to look at the data and ask additional questions. So, I'm probably more on the side, Zach, where I'm going to probably do my due diligence, take my time. I'm not going to let the interview though go like six interviews deep. I think that to me is too much. You know, if you do a proper phone or Zoom screen, you bring the person in, you meet with that person and other people on the team, and then maybe three interviews, that would be the all I would do, right? You got to trust your gut. You got to look at again the cultural fit. You got to look at can they do the job. We got to ask behavioral-based interview questions, you know, not like, you know, can you do the job? Everybody's going to say yes. No one's going to tell you no. It's going to be like, you know, tell me about a time where you made a mistake in accounting and you process the AP or the AR wrong. What did you learn from it? You know, how do you process that? What was your process that you did in general? Like, that's a better question. And then on the, you know, the other side, the reverse side, Zach, if we got to let somebody go, if we don't document it and we have not set those clear expectations, it can cause a lot of problems on the back end for employers, right? And so, we got to make sure we document and not just document where I had a conversation with Scott and put a note to file. That's better than nothing. But I want to document a conversation. Even if it's coaching, had a coaching conversation. Scott signs it. You know, I sign it as the business owner. It's dated. it goes in the, you know, the person's personnel file and then we've got data that we can back up the decision and that way you remove some of the risk and the liability and some of the things that come along with the no fun side of letting somebody go. So do your due diligence and again don't continue to delay it. Don't also take someone's word for it. If they think that, you know, Johnny's horrible and is not performing, make sure you do your due diligence and find out is Johnny really horrible or is that just one person's opinion? You know, I think I I see a lot of, you know, business owners or leaders, they jump to conclusions without having data and facts and it comes back to bite them in the rear end.
Mike Seidl (25:45)
Sure. Gotcha. At what point should a founder stop doing every major function personally and put a true leadership structure into place?
Scott Hanis (25:57)
Yeah. Again, it depends on the organization, but I mean, the the first hire I like to have people hire, and you've heard Mark say this and Tim say it, too. I agree. It's the assistant, right? I look at time in like dollars of quantity. So, is it a $10 item, $100 item, or $1,000 item, you know, and as the founder, where where's the best use of my time that's the biggest bang for my buck, you know? So, if I'm hiring, you know, my executive team or my leadership team, Mike, you know, where am I really strong at? Maybe I love sales and I'm really good at sales, but maybe I struggle with operations and I struggle with holding people accountable. I'm gonna probably hire that person first, right? If I'm uh really good at, you know, um you know, let's say it's a a blueco collar business like a, you know, general contractor. If I'm really good at the technical side of general contracting, but I'm not good at, you know, project management side, I'm probably going to hire a project manager. So, I think each company's a little bit different based upon their scenario. Um, but you, you know, you've got five different major functions I would say in a business. you know, you have the the accounting finance side, you have sales and marketing, customer service. I would lump in, you've got operations, you've got the the people aspect, and then I think the fifth engine typically is growth. That's what I like to see in organizations. You could branch off, you could say operations maybe as engineering or research and development. There's a lot of different ways you can look at it, but those are like the five key components of an organization in my opinion.
Mike Seidl (27:21)
Gotcha. How can a company create a culture of growth, positive feedback without making it a culture of uh fear and people being micromanaged?
Scott Hanis (27:34)
I think it starts with regular communication. I don't know. I'm a huge fan of like again the one-on-one meetings. I'm a huge fan of doing a daily team uh you know huddle meeting. Same thing with a weekly leadership meeting. But companies like we used to do like a a monthly just recap like a state of the the business town hall talk about those things and you know we again tacked the diplomacy in your messaging and how you communicate is so important. Uh you know we can't just send an email out and think that that's going to solve the problem. You know people you know hear things differently they read things differently. So I think we need to again meet people where they're at. We got to communicate in multiple different ways. And I think the way that we grow and reward people is by, you know, positive recognition. You know, when somebody does something well, you know, you tell everybody about it in person, you know, if there's a, you know, constructive feedback we have to give, we do that kind of, you know, behind closed doors with a witness. I love having witnesses. Uh, so that way you don't have any other issues that come up. Um, but with that, you know, and you talk about their career path and what the development is. Not that you guarantee anything. You never make any career promises for where they're going, but you talk about these are the opportunities. this is the vision. This is where this company's going, you know, and if you continue to learn and develop and grow your skills, there's going to be other opportunities for you here. And if organizations have good, you know, defined career paths, people get excited about that. Most people don't want to be a customer service rep their entire life. Most people are like, I want to do this, I want to get into leadership, I want to do that, you know. So, but if you know that and if we ask good questions as leaders, where do you want to be in the next 5 years? Like, what's important to you? What do you value? And if we ask those questions and we really listen, I got these two big ears. They stick out. So if I listen and I take note of that, I can then, you know, make sure we're, you know, preparing them for that and we're giving them feedback when they do something really well or if they need coaching and training, can I provide that coaching or training or do I need to look at outsource, uh, you know, you know, organizations to do that. So that might becomes part of the the performance review process looking at high potentials looking at succession planning and just planning for what's best for the business as well as for those team members.
Mike Seidl (29:43)
Gotcha. Another question. Your company is chugging along. It's got an organizational structure but it's trying to grow. What is a clear sign that a company has outgrown its organizational structure and needs to pivot, add on, make changes? What do you say?
Scott Hanis (30:02)
That's a great question. Um, I, you know, there's a lot of different answers. Number one, I would say is when we're not making decisions collaboratively as a team and there's a lot of tension or fighting and it's not healthy, you might have somebody that may be again stuck in their ways. They're not willing to kind of adapt. they don't see the big picture, that might be time for where we've outgrown that leader. Uh, you know, especially when you're in the growth stage and you're in the building and scaling stage of growing a business, you might hire somebody that was used to working at a $10 million organization and you're trying to get to 100 million and they may not know how to get there. So, we might need to hire somebody that's been there already that can walk us through those steps. So I I think there's you know again this goes back to the review process and identifying you know gaps and in the gains you know from the famous book where are we strong where do we need to improve and then do we have those people on the on the bus as Jim Collins talks about or do we need to find you know different people that can do those things and you know we can develop and we can grow people right but that takes time and that takes money right in order to do that you got to invest in people and I believe that we have to invest in our people and we have to invest in marketing usually to see a good return on your investment. And again, there's other ways to do it. But those two things, if you do it the right way and you're doing, you know, the proper training and it's not just sending someone to a training, Mike, I think we got to send them to a training. What did they learn? You know, how are they applying it? Like I when I lead trainings with clients, I tell people put like a proverbial tool belt around themselves, right? And put one tool that they're going to put in this proverbial tool belt and they can take out and use. And then we got to have again discussions about it. And then when we see them doing something, it's the positive reinforcement. You know, Scott, I noticed on your calendar you're doing time blocking now. I can see you're being more productive. Things are getting done on time. Like, thank you for doing that. You know, that goes a long way to positively reinforce somebody versus, you know, just letting them go to training and never talking to them about it again.
Mike Seidl (30:02)
So in your two decades or more because you said earlier that you feel old and everything but in your two two decades of more watching organizations and grow why do you see businesses fail to scale when the opportunities in the market are there? What is the you know some of the biggest things that you see people do wrong or don't do?
Scott Hanis (30:02)
the owners, the founders, they're in their own way. They won't let go of control. You know, it's got to be their way or the highway. And that's probably the standard one. Uh, a lot of them don't know their numbers, right? Like, and again, you can make numbers and financials look like whatever you want, right? You can paint whatever picture, but do you truly understand it? Are you really doing your due diligence? Are you asking better questions? That's something that I see prohibits a lot of growth. Some people are just risk adverse, so they won't take the chance. Uh some of our most successful clients are not afraid to go spend $2 million on, you know, capital equipment that they need for their business. Other people are like, "No, I I don't want to do that. You know, the economy is bad right now. I don't want to bet on that." So, you got to be able to do all of those things. And I think people that, you know, have a good plan, right? The failing to plan is planning to fail kind of old saying. We got to make sure we're planning and then we're executing and we're holding the team accountable. And we don't need to be negative or jerks about it. it's just like why is it not done like what can we do differently or there's a different approach you can even take and say like I need your support we need your support this team needs your support and so I I see a lot of that happen Mike and then I would say communication lacks and because communication lacks they lose key team members they lose business because of it you know they upset their clients they don't deliver on the results and it just is this ongoing spiral of unfortunate events that happen
Mike Seidl (33:54)
within your companies that you've seen scale and you've helped along the way. How do they keep key talent when roles are changing, the culture is changing? Because as soon as you bring even if you have a group three people, if you bring in a fourth, that changes the dynamics and the culture of even that small group. Yep. What do you see that companies do in order to to make that work as people grow and roles change and the culture changes?
Scott Hanis (34:26)
Yeah. So, I'd say the most successful companies that we work with that do that, you know, they're building their relationships internally. They're, you know, making sure that there's team building activities. Could be an axe throwing, could be, you know, forced one-on-one time to get to know each other. But then I would say, you know, on top of those things, it's really, you know, people being vulnerable. like when we get to know each other personally because again work's only one part of our life. There's a lot of other things that we do outside of work. So what's important to them and asking questions about, you know, their kids' football game or whatever or their dog or whatever their their hobby is, that goes a long way with building that relationship. And then if we have authentic trust and we lay out clear expectations, this is what the role is. This is what everybody's going to be doing. We just had this example in a in a client that's growing and scaling right now. They took one of the reporting structures and they changed it around. They promoted somebody to the senior leadership team or the executive leadership team and they removed one of those responsibilities from someone else on the team. And so we sat down with that individual that we were removing something from that person's plate. Explain why we were doing it, what's going on, what they what we need them to focus on as we continue to grow and go to the next level, the next stage, whatever you want to call it. And then we explain why we were bringing this other person on board. And you know, we we had the conversation first. Not that we got their buy in and like like they were all super happy about it, but this has been about a three-month process and so far it's gone really smooth. And then from the team standpoint, you know, we we shared different things about, you know, what's what's your best leadership lesson you've learned in your career? How are you applying that? You know, what's one thing, you know, you wish you could maybe do differently from your career standpoint? and just getting to know some of that stuff allows people to take down some of their guard and you know so that that's been very helpful for them. And then you know I would say again the the last thing would be just some of the stuff outside of the workplace. I I think those team activities they go a long way. It goes back to relationship capital Mike and Zach kind of what we hear a lot from Mark about all day long. when you work
Zach Richards (34:26)
with a lot of different businesses, are there some common things that you see like from an either organizational structure or how people have their team set up or whatever that you know you see like the most common mistakes or issues that companies have.
Scott Hanis (36:48)
Yeah. Especially small companies, you have people that can do get more, right? And so you've got like, you know, six roles, responsibilities on one person's seat. That doesn't work very well. Um, so that's where, you know, where can we hire the next person? Do we have the budget for it? Does it make sense? But then clearly identifying that, that helps a lot, Zach. Uh, when we just dump it all in one person, those people are going to get burned out. They're going to be like, well, why am I doing this? Especially if you're not rewarding them, whether that's with positive recognition or, you know, the right compensation or you're not like, please and thank you go a long way. And a lot of people unfortunately just don't think about that. like just being a good person and having like manners. I mean, people actually people thrive in that environment, right? When when you're yelling cost you nothing to say thank you. That's right. Just be a good person, right? Be a good human. That goes a long way.
Zach Richards (37:40)
That's a good point. Agreed.
Mike Seidl (37:40)
As companies grow, they want to move people up. And I know I've seen it my own companies that I've had. Somebody is a great contributor. They're great being part of the team, but when they're promoted to a management role, they don't do so well. How do you potentially prevent that? And what do you do if it happens and you still think the person has the skill set, but they're just not thinking they have the skill set?
Scott Hanis (38:16)
Yes. So, a lot of that, I think, goes back to the succession planning and the identifying of the high potentials from the review process, Mike. So, I think we need to, you know, if we, let's say we see Sally and Sally's got all the potential to be a leader, but she's never gone through formal leadership training, the company's got to invest in her and we've got to make sure we provide, you know, Sally with the the leadership basics, the the tools, the leadership laws that are out there. We can have her read books and and do like podcasts like this. By the way, if you have not uh, you know, signed up for Save to Zero podcast with Mike and Zach, please make sure you subscribe, hit that like button. And I was telling them before, this is a side note, probably the most professional process of any podcast I've been on. So kudos to Mike and Zach. I wanted to make sure I threw that in there. But going back to going back to the question here, um, you know, understanding like what their strengths are, where they need to improve, and then having very clear conversations like, hey, you know, Sally, I want you to be a leader. I I see this potential in you, but we need to improve X, Y, and Z. It could be and a lot of it, Mike, I think is the soft skills or the human skills that Simon Synynic talks about. How do we have healthy conflict or conflict resolution? How do we have those difficult conversations? How do we, you know, unfortunately how how would we let somebody go? Like what does that look like? How do we coach people? Those are things that are hard for some people, especially if you're going from being a peer and now you're the leader and you're responsible for this person reporting to you. There's a whole like peer to supervision or peer to leader, you know, training that we lead with our clients because we have to again we have to make sure they're prepared. Uh and I think the person individually like they've got to Sally's got to be invested like I want to be in that role. I I you know I I it's not that just the company sees potential. Sally's got to express that. She's got to say yes, I want this because some people say they want it but they really just want the title and the pay. They don't want all the responsibility and the work that sometimes come along comes along with that. And and for me, if I'm a leader, I'm responsible for myself, but I'm responsible for my entire team. And I'm I'm responsible for their families and am I taking care of them? Am I am I motivating? Am I disciplining them? But am I leading them so that they can continue to perform at the highest level possible? And what makes them, you know, reach that level of success? I need to be asking those questions, too. So, it's like a there's a lot of different parts that go into that. And I think again, it starts with training. It starts with education of, you know, the leadership concepts and then being very direct like, you know, Sally, I know you want to be a leader here in the next three years. Here's where I see gaps. And then if it's been a year and you've told Sally the same things, Sally, I I still feel like you have this potential. Do you really want this? Cuz I have not seen any improvement in the last year. And if you don't, that's okay. Let's have the conversation. But if you do, these are some things I need you to try to do like immediately so we can get you to the next level. So some of that just being very direct and having that you know that tough conversation maybe with somebody
Zach Richards (41:07)
and is that did you mention training and asking people about new roles? I mean is that how you kind how you try to avoid the the Peter principle where if you're not familiar it says that people get promoted to the level of their incompetence. They keep doing a job well they get promoted. They do that well they get promoted and then they stop doing so well so they stop getting promoted and then they're kind of just stuck at the at the first level that they're bad at. 100%. And Zach, it it will amaze you. Apparently, out of all the clients we worked with, and even in the corporate world where I came from, we would promote people that were not qualified or not ready to be that way, right? There were some people that would, you know, would, you know, excel. They would not sink, they would swim, and they'd be great. Other people just struggled. And so, there's a lot of characteristics, attributes, a lot of things that we need to consider. You know, you can use personality assessments. Some of that stuff's good. Like, it's good tools. It's good resources, but I don't take personality assessments as that they're always 100% accurate. So that maybe that's a little controversial for my field, but I think there's other ways to do that without looking at an assessment and being lazy and saying that person's this, they fit this profile. It could be accurate, but somebody could be having a bad day and answer the questions the wrong way because they don't want to take it because their dog is sick or their kid's sick or whatever's going on. So, I think there's always different ways to approach things. Sure. And those assessments are so easy to game, too. Like a lot of people try to think, well, what's the right answer to this question? Because a lot of times there is one.
Scott Hanis (42:35)
Yep. I mean, I give you an example. I've taken the disc assessment, I don't know, six times. I'm either high D, high I or high I high D. I've taken predictive index a couple times. I'm either a captain or a maverick, you know, on the assessment. But if I'm having a lousy day, I'm going to answer that way differently. Like if I'm in a bad mood, something happened, my wife got mad at me because I did something stupid, you know, probably going to answer a little bit differently. So, we got to we got to understand that there's an emotional aspect that goes into that. And even now with AI, people are doing like little cheat codes, you know, going into chat or Claude or Manis or whatever AI tool use. How do I best answer this for a sales role,
Mike Seidl (43:11)
right?
Scott Hanis (43:12)
They're getting tips and tricks. It's it's like the cheat code everybody's using these days.
Mike Seidl (43:17)
Interesting. So, Scott, we're running up on 45 minutes. I know that you're very busy and uh we want to be respectful of your time because we told you that's how far we're going to go.
Scott Hanis (43:28)
Appreciate it.
Mike Seidl (43:29)
What's uh what's a good way for our listeners to get a hold of you and everybody, it will be in the uh show notes as well, all of Scott's contact information. And just so you know, guys, I've known Scott, was it just before the uh before the pandemic? So like 2019 or 2020, we were at uh Tim's place in South Carolina. I think that might have been the first time. It might have been before that actually. But regardless, um I've known Scott for six, seven years now. And I know multiple people that work with him and I haven't met anybody who works with Scott who isn't happy working with him. So if you choose to work with him, I'm highly confident that you're going to be very helpful. Um, I called him recently for something and he referred me to use uh the app Scribe because we're having some issues internally with uh with training. So, that being said, Scott, what's a good way for people to get a hold of you?
Scott Hanis (44:25)
Yeah, the best way probably is going to the website uh fortitudehrsolutions.com. There's an info email that you can send or you can always message me on Facebook, uh, Instagram or LinkedIn and I'm happy to connect and help out in any way that I can.
Mike Seidl (44:40)
Awesome. Fantastic. Scott, thank you so much for taking time out of your day to uh spend some time with us and provide value for our listeners. We really appreciate it, man.
Scott Hanis (44:49)
Absolutely. Thank you, Mike. Thank you, Zach. I really appreciate it as well. Have a great day, everybody.
Zach Richards (44:53)
All right.