The Culture-Skill Matrix

What’s up, everybody? Welcome back to the podcast. Today I want to talk about one of the, the most important things that you have to do as an entrepreneur, which is building out your team. Like, at the end of the day, you do not have a business unless it’s able to operate without you. There’s systems, there’s processes, there’s people in place who are able to go out, find customers, to convert those customers into clients, to deliver a product to those customers. That is a business. If you’re the one that’s doing all of the work, you’re out there doing all the client acquisition, all the delivery, all the product, everything, then you don’t actually have a business. You have a job, and that’s fine. But that’s also not, I think, what a lot of people tuning in or what they got into entrepreneurship, what they wanted.

Right. You ended up being somebody maybe who had a very particular skill set that you knew you could monetize. Maybe you had abilities as an accountant or a digital designer, and you started doing those things as a, you know, as a service. So you would go out, you find customers, and then you would deliver that service to them. And because you had the skill in that thing, you were able to grow to a certain level. In my experience, though, it’s very hard to grow past five and six figures low six figures to that seven figure range if you’re the one delivering on the skill that you have accumulated. Right. And this is where a lot of entrepreneurs get frustrated is because you might get to 200, $300,000 a year, top line revenue after taxes and whatnot.

And maybe you’re the only employee, or maybe you have some other software expenses and whatnot. But overall, maybe you’re making $100,000 a year and you’re making a good income from that, but you don’t have enough to invest back into the business, or so it feels like. Right. Well, you’re going to stay stuck at that level if that’s the mindset that you take towards this. And this is where I find a lot of entrepreneurs ultimately burn out. And they’re like, you know what? This is just more work than if I was just getting a high paying job as a graphic designer at this other firm without having to worry about doing X, y, Z. Right. So if you want to build a business, it’s about the systems, the teams in place who can get customers, convert or get leads, convert those into customers and then deliver products to them.
Right. Without you being involved. And for that, you’re going to be hiring people, which is one of the most difficult things that any new entrepreneur is going to do, because in the beginning, again, you have skills, maybe as the graphic designer, as the accountant, but not necessarily as a manager of people, as a leader, as a trainer of, you know, a retainer of talent. And so what ends up happening for a lot of entrepreneurs is they make their first couple of hires because you’re not great at systematizing and training people. They fail to live up to your expectations. They do the task worse than you could have done it. They do it slower than you could have done it. And you get frustrated because you want to deliver a certain quality product at a certain level.
Right. A lot of entrepreneurs then will take this to mean because they’ve had, they’ve been bit by this a few times, they’re like, it’s just impossible to find good help. This is one of the refrains I hear all the time. It’s impossible to find good help, and it is hard to find a players, but they are well worth their money once you find them. So what I want to talk about here is one of the things, or one of the frameworks that I think about when it comes to hiring for our different businesses. At this point, we’ve hired hundreds of employees across a wide multitude of different types of businesses, from window washing to manufacturing to property management to media, like all over the board. And we use this framework called the culture skills matrix. I want to explain it to you here as a way of thinking about hiring people and then how to retain those people, how you should be thinking about this, because I find that this is one of the things people get tripped up on the most.
So imagine a grid. This is a two by two grid. So we have a vertical axis, we have a horizontal axis. On the vertical axis, we’re going to be measuring based off of cultural fit. They’re a good fit for our value system. They see the world similar to us. They move in the same way. That’s a good thing, right? The x axis is competency.
So how skilled are they at the thing that we are asking them to do? Right. So now we have graphed out competency on the x axis and we have culture fit on the y axis. Now, if we were to grid this out in the very, very top right corner, people who are very, very competent and good culture fits, these are our a players. These are rock stars. They are very obvious when you find them, because rockstars, they produce exponential results. They make everything so much easier. And you, you sit there scratching your head wondering how you ever survived without them. They’re remarkable.
These are obvious eight players, and we want as many of these as we possibly can get, but they’re very hard to find. And so we need to be prepared that we’re probably going to have some b players on the team. And there’s really two types of b players that we need to be aware of. Number one is somebody who is far along on the x axis for competency. So they’re very skilled, but they might not be a very good culture fit, right? So maybe they don’t see the world in the same way. They don’t get along with the rest of the team. They don’t do things in the way that you want them to do, but they are very skilled technically at what you do. The problem is in the beginning with your business, you need money coming in the door.
And so you prioritize skill over culture in those early days because you culture is not going to like, the lack of culture is not going to kill your business quickly. However, not having business coming in the door will. So you want to prioritize the skill in this situation over the culture. Typically when you have a bad culture fit, though, it’s due to misaligned expectations. And a lot of times you can train that back up. You can just with, you know, one on one conversation set expectations about, here’s what this would look like for you. Do be a good culture fit to fit in with the team and you can bring people up. Right now, the other side of this equation, the other type of B player that we have is somebody who is a very good culture fit.
So high on the y axis, but they’re not very skilled. They’re low on the competency x axis. Now, these are interesting people because they’re cultural fits, we tend to get along with them very well, fit in with the team and we like being around them. But because they’re not very skilled, they are holding back the team. And the problem is a players don’t like to be surrounded by b players who aren’t very good at what they do. They will just leave. The a players will leave and you’ll be left with just nothing but b players. But because we like these people, they’re good cultural fits, we tend to drag them along and string them along longer than is necessary because we’re not prepared to make the hard decision to let them go.
When we see the writing on the wall, we keep trying to train for the skill, train for the skill. And if they’re just not getting it. We keep moving them around the business, trying to fit them into a new seat on the bus. But typically, these are some of the most difficult conversations to have. These are the hardest people to fire because you like them so much. Now, I have this phrase in our businesses, which is that we hire for culture, we train for skills. And this is true that in a lot of cases, you can train an a player. Like if you are an a player in one area of your life, but you’re a good cultural fit.
I’m confident that I can train your skills in this new thing in most cases. But the difficulty, the trap that we fall into is when we think we had that person, we think we had the a player, but they turn out okay. Maybe they’re not as skilled as I thought they were, they’re not as quick of a learner, they’re not getting it, but they’re a really good culture fit. These are the hardest conversations to have because you like these people, you want to make it work, but they’re not delivering the results. And that is going to kill the team dynamic over a long enough period of time. And it’s very easy if you’re not careful to over saturate your business with these people or to become a business entirely of these people who aren’t very good at what they do, but they’re great. Culture fits. So you need to be very, very, very careful about people that you’re hiring that are a culture fit, but they’re not skilled.
And when I say not skilled, like, if within a six to nine month window of training, they’re still not getting it. Chances are they’re not going to get it. Because a players are typically pretty quick to pick things up, and you can sense it pretty, pretty rapidly. If after a couple months you’re like, they’re just not picking it up, it’s time to let them go bring in somebody else. The flip side of that, though, is going to those people who are maybe not a good culture fit, but highly skilled. You can keep them around a little bit longer, but long term, as you’re building the culture of this business over a long period of time, you’re trying to retain talent that stays with you for years. You need to do something about these people. You either need to off board them at some point or up level their culture so that they start to see the world indoctrinate them.
Almost like a cult. Right? Okay. The very last group of people that we should talk about here are people that are low on the y axis and low on the x axis, which means that they’re not a good culture fit and they’re not very competent. These are just C players or D players. There’s no reason to keep them around and we should fire them as quickly as possible. But hopefully, this culture skills matrix is another way of thinking about your team and how you recruit and onboard, how you promote within and ultimately how you. You get to this place where you have an awesome, thriving business. Because the most important thing to remember as an entrepreneur is that we are building the people and the people are building the business.

If you’re the one that’s doing all the building, all the. Everything, that’s not. It’s not a business, it’s just. It’s a job, right? And so we don’t want that. This is, you know, this podcast is all about helping entrepreneurs maximize their return on life. And the way that you do that is by systematically removing yourself from the equation and having your team do the things for you or with you, alongside of you. It’s about building the people so that the people can build the machine. So hope this brings you guys some value.

If it did, let me know. Shoot me a DM. I’d love to hear from you guys. Or leave a review. I think we’re almost at 100 reviews on Spotify. Spotify. So that’s pretty rad. If you’re listening on iTunes, drop a review there, too.

That’d be really cool. I appreciate it. So that’s going to do it for me, guys and gals, we’ll catch you in the next episode. But until then, stay happy. Focus, my friend.