Meet Host, Mary Grothe
Mary Grothe is a former #1 MidMarket B2B Sales Rep who after selling millions and breaking multiple records, formed House of Revenue™, a Denver-based firm of fractional Revenue Leaders who currently lead the marketing, sales, customer success, and RevOps departments for 10 companies nationwide. In the past year, they've helped multiple 2nd stage growth companies between $5M - $20M, on average, double their MRR within 10 months, resulting in an average ROI of 1,454% and an average annual revenue growth eclipsing $3.2 million.
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Welcome to the House of Revenue. I'm Mary Grothe, Founder and CEO. I love scaling companies to their first 5 million, then 10, 15, and 20. If you've reached a revenue plateau and aren't sure how to get past it, you're in the right place. Listen in as we interview CEOs and solve their most pressing revenue challenges. If you want to be on our show or want to learn more connect with us at houseofrevenue.com.
I don't have a guest today, but I have a topic that is so important to me and I felt like we needed to discuss it. As a CEO, you have tremendous responsibility. I spent some time thinking over the past week or so in my own reflection as a CEO of the commitments that I'm going to make, as I continue down this path, scaling my own company. And through that reflection, I started to map out what went well. We made some changes over the last 12 months. What went well? What still needs improvement? I also analyzed the inner thoughts and inner workings of the CEOs we get to work with and started to dig in and analyze who they are as people, how they show up to the role, how they lead their company and the outcomes that result from that, from their thoughts, words, actions. And I was so compelled by everything that I wrote down analyzed, read and was feeling. I said, I need to bring this to the show and talk about this today. I'm going to walk you through five key areas that highlight as a CEO or executive, what your true responsibility is. You've said yes to showing up and running a company. And that comes with great responsibility.
I want to talk first about the 75-100 rule. One of the biggest mistakes that CEOs make in their early stages. When they're hiring their first handful of employees, they expect the people that they hire and bring on board to do the work as well as they do it. They want to train them through osmosis. They don't have a written or well put together onboarding plan or training plan. And there isn't a big runway for them to be proficient and successful in the role. And oftentimes they're just not set up for success. As a CEO, when you're making your several hires and maybe you're on your 50th hire and you still need to hear this message: You are a CEO, you are a 100 on a scale of zero to 100. You are a 100, you're smart, talented, brilliant, capable. You have the stomach for risk. You're probably a little bit crazy because I'm pretty sure all CEOs have to be a little bit crazy. I can say that I am one, in order to do what we do and say yes to what we have to get done every single day on the risk and responsibility that we hold for ourselves, our family, our employees, their families, our clients, and key stakeholders. It's a lot of weight. It's a lot of responsibility. I think you need to be a little crazy to do it, but we are one hundreds. Most of us are trailblazers. We're extremely innovative pioneers. We're high urgency. We get things done. We are a 100.
Most CEO's as they hire, they have an expectation that they can find other one hundreds to come and work for them. In fact, a lot of the modeling that they put together for future growth plans would be a replication of the work that they can do at the same level by another team member. Let me explain. A CEO who's growing and decides to hire their first sales person. They'll say, okay, I was able to sell or secure three quarters of a million dollars. And that was me by myself, as the CEO. I also ran the company and did client work. Therefore, a full-time salesperson should easily be able to sell a million, right, because it would be full time. So they set a sales plan for their first sales hire above what they were able to do with that justification that I just shared and the salesperson, doesn't succeed. They bring on the salesperson. They say, here's your laptop. Go sell. I'll attend the first few meetings with you. We'll see how it goes. And from there it's all on you. They haven't invested in marketing. They haven't invested in automation technology, a profile database of contacts that actually exist with correct contact information and the person doesn't sell. This can also be an example with somebody to run operations.
The CEO who has also been acting as COO, running all facets of operations internally for the company. They go to extend that offer to that first operations manager, director, VP, or COO level. And the expectation is they are able to do it at the level of the seat. Well, that person is not a 100. They may not have the urgency that you have. They may not have the knowledge that you have. They may not understand the intricacies of the business. Yet, your expectation is that they can just come in and take it over for you, but yet they may fail. So let's talk about the 100 - 75 rule as you bring on employees, especially very important key hires that you have an expectation of them being a 100, just like you. Remove the expectation. On their best day, your best key employee will be operating at 75% of what you can do. On most days, they're going to be between 50 to 60% at 50 of what you can do. 50% of what you can do is good. If you are attempting to hire those who are 75s on every day and can peak to that 90 or 100, I have a warning for you. It will be a short-lived hire because when they acknowledge and realize how smart, brilliant, talented they are, they will go be a CEO and they will no longer be working for you. They will not have the patience to work underneath you for too long.
They will begin building the foundation that they believe they need in order to go off one day and run their own company. So be cautious of that, unless you're okay with that. When you have an employee who maybe started at that 50, and now you see them developing and working at a higher level, I believe the right thing to do as a CEO who carries the responsibility of the mentorship and development and caring of your team, you should help them get to that level. It's not fair to wrap your arms around them and suffocate them and hold on to them and make them feel lesser than they are, which I've seen a lot of CEOs do that. They don't want the employee to know how good they are, because if they knew how good they were, they would leave. And I have heard executives say that, and that is absolutely terrible. It's disgusting to me. In fact, you signed up to be a CEO. You signed up to be a leader. You signed up to have great responsibility in this world. And one of those pieces, that's the team that has said yes to working for you. You don't own them and they don't owe you anything. You need to value them as a human being and you need to serve them as a human being.
You need to understand their goals, personally, professionally, who they are, the more you can do to help this person get on their path, to be able to live and execute on their God-given purpose in their superhuman talents, do not hold them back. Do not push them down out of fear of losing them. There are a lot of people out there and that you can employ. It is your responsibility to love care for and serve the people that say yes to working for you, your brand, your company, your reputation, your success, your profitability, your income. So be sure that you are returning that to them in the same level of respect, they have options on where they can work. There's a saying that says a person who feels appreciated will always do more than is expected. So we've covered the 75 -100 rule.
The second piece is truly serving them first and acknowledging that a person who feels appreciated will always do more than expected. Figure out how your people feel appreciation, how they feel valued, how they feel heard, how they feel respected. When you can understand those and adjust your leadership style and mentorship style to empower your team members, watch the productivity, output and excellence go through the roof. But if you are CEO who loves micromanagement, pushing people down, putting that fire in their stomach, they where they don't feel good enough so that they want to perform and perform and perform that will burn out. They will burn out. They will get smart. They will realize that's a toxic environment and not want to be there anymore. But when you can truly appreciate people, they will do more than what is expected of them.
Number three, speaking of expectations, let's talk about expectations versus agreements. Have you ever had an expectation of somebody and they didn't follow through and do it? Okay. Pause, ask yourself this: Did you communicate the expectation or did you just make an assumption that they knew what was expected of them and to what level and with what detail and the timeline, etcetera. As humans, we love patterns. Repetition. We start to become familiar with our surroundings, with routine, circumstances and we build assumptions. Let me give you an easy one. Who takes out the trash on trash day in your household? In mine? It's my husband. Okay. If I, but we've never talked about it. We've never communicated. He just did it.
And there was one day where we were both home in the morning on trash day and I was waiting and waiting and waiting to see if he's going to take out the trash. He doesn't, he doesn't, he doesn't, I don't say anything. I just grow angry. And then I hear the trash truck come down the street. So I storm out into the garage and throw up the garage door real quick and pull that trash can out huffing and puffing thinking to myself, geez, why didn't you do that? We almost missed trash day and almost had this stinky can in the garage for an extra week. How could you, but that was an expectation. I had never communicated with him. He had never owned that. We didn't have an agreement plan on it. There wasn't a repercussion for not following through. And it was so short-sighted of me to not look at this as a partnership like, Hey, if it doesn't get done, I can easily do it. What expectations do you have of people in your life, specifically as a CEO of your team members that you have not communicated with them on? It's just an expectation that you walk around thinking, well, everyone knows that don't they isn't that common sense. Come to find out common sense isn't so common.
You learn that as a CEO and as an executive. Are expectations being communicated? If they are, are you gaining agreement on those expectations? Meaning can the person repeat it back to you and agree to the terms and the details of the expectation? How often have you said, I need a report that shows us our combined marketing and sales funnel. I want to know all outbound activities, all inbound activities. I want to see a blended rate through conversion rates, through the funnel with aligned. Okay, great. And then you assign the report, then you get it back. And it's not what you were looking for or whose fault is that? Is the person you assigned it to supposed to be a mind reader or you not communicated in a way where you're gaining agreement on the expectation.
If you notice that this is a trend or pattern, you're not setting up your team for success. And it's not that they're not capable of doing it. They may not understand the way you want it done. It is your responsibility as a leader. And trust me, it will remove so much friction between you and your staff. If you learn to gain agreement on expectations, on all details of the expectation on the front end, when it's being delegated assigned, communicated, if they know exactly and they agree to it, they're not going to let you down or the chance of them not doing it correctly. It lessens. It also gives you a better path, met more visibility into team members who may not be the right fit for the role. If you are great at communicating, Delegating, assigning out projects, tasks, communicate, you gain agreement on it. You, too understand. Hey, if this isn't done, there's a repercussion or this is going to be the outcome or the next steps. This is the importance and why it has to happen. The impact of it not getting completed. And you gain agreement on that.
If you start to see behaviors in any of your team members consistently where certain activities aren't being done, then, you know that you've done what you can to set them up for success. And you can start having a different conversation, more of a performance conversation. It can be different, but expectations versus a grievance, they're critical that you start communicating this way. You'll notice that when you do the fail rate on projects, delegated assignments, tasks, etcetera, significantly goes down. I want to tell you that your team's going to love it. People want to know how to succeed. They want to know the rules of the game. They want structure, humans crave structure. If you could clearly communicate to each team member, what is expected of them? How in what detail, by when, in what format you can have the ability for them to perform to your level of expectations. And then everybody's happy because people just want to win. They want to be valued. They want to be great at their job, but you have to ask yourself if you're setting them up for success. So that's our third topic. Expectations versus agreements.
Let's jump into topic number four, we're talking about your responsibility as a CEO, as a leader, you've said yes to running this company, which means you've also said yes to the people. Who've agreed to work for you. Especially as a small business. I want to talk about recruiting. You're not as exciting of a company as you may think you are. Working for a startup or a small business is actually not as attractive as you think it might be. So you may need to check yourself on what you're offering candidates and truly what the job or the role is. I speak from experience. We've helped over a hundred companies in the last three years recruit and augment their teams. And we run into this 90% of the time, nine out of 10 companies want to offer low base salaries. They don't have benefits yet. They may have strict policies about work schedules, where to work, time off and then they want to hire people who have proven experience from larger companies.
Okay. Let's talk about this, especially with salespeople. This is a show about revenue. So let's talk about salespeople. You cannot excitingly recruit a salesperson from a Fortune 1000 company, which looks by the way, phenomenal their resume. And they also have huge marketing budget, great inbound lead flow, awesome technology, dozens of resources at their heads. They have client resolution departments. They have full implementation teams. They have an IT department help them when their computer bugs out, all the things you don't have. They also work for a company, I'll say it again, that looks so good on their resume. It can open up the door to go anywhere. You don't have that as a small business. And I've seen time and time again, small business CEOs want to recruit that type of talent, but they're not willing to cover the perceived risk that that person has leaving that comfortable position to go work for a no-name startup or small business. There's a lot of risk there. So let's talk through it. I want to shift your perception, especially with hiring sales talent, but this can be transferrable to other roles. And we'll talk about that here in a moment.
If you are asking somebody to leave a very cush successful position, where they're a top performer with a big Fortune 1000 or whatever size company with name recognition and all the things I just listed off, you need to share in the risk. You need to prove to them and show them that you're willing to invest in them. You're acknowledging you don't have the infrastructure, the name recognition, the inbound lead flow and other components that they're used to having, but you are going to offer something in lieu of that because you want them. It could be offered in compensation. It could be part benefit package. It could be a path to ownership. It could be some sort of concession, something that is of great value to that candidate that you can put forth. But where you will fall short is thinking that you're going to have that type of candidate making the same, or potentially less money. It's not going to happen. You can't do it. And hopefully some of you think I'm crazy right now talking about this, like really, who does that?
You're in the minority because the majority of companies, especially the small business CEOs, they want that great talent, but they're not willing to pay for it. And they don't have the benefit package and they don't have all those other pieces and components. And then they wonder why they don't get great talent. So they keep spending less money on weaker talent who doesn't produce. And then they're just throwing money out the window. That's not a good strategy.
So my recommendation for you is to buckle up, fix your proforma and adjust your cashflow to where you can afford excellent employee benefits. Meaning paid for medical health, dental, vision, life insurance, get a 401k or an IRA match in there, have flexible work options, if you're able to, give people a choice in where they work, work from home, work from anywhere, hybrid flexibility. These components are critically important right now. Think about what the employees want with coming to work for you and be competitive in the compensation, figure it out. The talent that you hire is going to be a make or break for most of you. Some of your businesses may not be as heavily reliant on talent, but if you are a company who is a little bit more heavily relying on talent, then make the investment. They won't steer you wrong. You need to hire smarter than you. You need to hire more talented than you. People who are smarter, people who are more talented in order to take you to the next level. This was a hard lesson learned by our company, as well as a lot of the clients and companies we get to work with.
They have a hiring strategy with the same candidate profile that they've had for years. It's like, well, clearly that profile in that function, isn't getting you to where you need to be. Do you think you need to adjust the profile? And I hear all these excuses. Well, we can't afford more. Oh, okay. So you can afford though, to throw away the same amount of money every year and have lack of performance. Okay. That's crazy to me. I'm pretty sure you can afford more to actually finally, eventually fix and solve the problem. So take a look at that hiring strategy. Your talent is everything, in most organizations, even in the companies that don't have such a heavy reliance upon exceptional talent.
In some roles, you will have that in your upper level management in those key employee roles so be smart. The last piece that we're going to talk about today is getting out of your own way as a CEO or a leader. If you want to grow or scale your company, but you have a fixed mindset and you're actually allergic to growth, subconsciously you're never going to grow. You've got to the inner work to understand and identify all of your fear-based thoughts, all of your thoughts that come from a place of a scarcity mindset. You need to look at areas that have held you back in the past in your life. It's really time. This may sound Foofoo fluffy, kumbaya, whatever, do the work. I didn't do the work. And it was a very hard time of scale for me for two years, our first two years of our own company. And when I finally committed to doing the work, I realized how much head trash and the belief systems that I had were holding us back. But I made a commitment to my team that I wasn't going to be afraid of growing anymore. And so it was on me to map it out, to truly understand at the inner core of who I am and my DNA and my belief systems and everything that has made me who I am today.
Why was I scared? And when I was able to identify and map it out and address every single one of those pieces, and it took months, months, some of it was me personally, other things were pieces and how our company was built and infrastructure, the way we were serving our clients. So many different components and it took months to be hyper-focused on rebuilding those pieces. But as we increased focus and we worked through them one by one by one by one. I have changed and you can change, too. You will look at that future revenue growth in scale with such a different outlook. I believe in you. I know you have it in you, your CEO, great responsibility. Go lead.
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Thanks for listening to today's episode. If you're interested in being on our show or want to learn more about how we can help you scale your company, connect with us at houseofrevenue.com or with me, Mary Grothe spelled G R O T H E on LinkedIn, Twitter and Instagram.
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