The key question for managers

The key question every manager should ask every day …

that will lead to a great employee culture and opportunity to scale

John Ratliff is the Managing Director of Gazelles Coaches. He shared with our coaching community the one key question he believes managers should ask every day that will lead to a great employee culture.

In John’s company, Appletree Answers, (which he sold a couple of years ago for 14x earnings) he and his leadership team had a philosophy that they were responsible for creating and owning the experience of every employee.

They developed a Daily Habit, or daily routine, for all leaders at every level within the company.

Any employee who had someone that reported to them was to ask themselves every day: “What can I do today to make the employee experience better than it was yesterday?”

They had a little plaque on their desk to remind themselves to ask this one single question.

They would ask this question in meetings, one-on-ones and employee reviews… it became their daily mantra.

Through doing this, leaders came to own the experience of everyone that worked with them.

The result of asking this one daily question was the creation of a thousand little activities.

All these little activities gradually added up to a really solid culture and deeply engaged workforce.

“Get that question embedded with everyone in the company, not just the senior leadership team, not just the CEO or the entrepreneur, but everyone in the company. Ask what we can do today to make the experience better than it was yesterday. You’ll see thousands of little improvements over time add up to a really kind of magical experience and a great place to work.”
– John Ratliff

The outcome?

John founded Appletree Answers, a traditional telephone answering service, in 1995 in his two-bedroom apartment in Wilmington, Delaware.

He grew the company through a series of acquisitions to 24 US-based call centre locations and 650 employees when it was sold to a strategic buyer in June, 2012.

Using Scaling Up tools and ideas from the over 40 books referenced in Scaling Up, John was able to take turnover down from an industry average of 200% to just 18%. That was his 10x advantage over his competition.

John took an industry that averaged 4% profitability and generated software-like margins of 21.8%. This was better than Apple’s profitability this year!

He originally purchased the call centers for 3x earnings. Due to the fact he ran call centers better than anyone else, a $2 billion company came along and paid him 14x earnings.

If you can increase profit by better than 5x, and sell for better than 5x, the multiple you bought them for is 25 (5 x 5 = 25). Every dollar John invested returned $25. And it was all bank debt!

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Or, feel free to email us at jonathan@scaleupgrowth.co or call +61 (0) 408 748 980.

I hope you have enjoyed these insights. Have a great week and stay growth-focused!

Best Wishes,
Jonathan