Every great company has some employee training provided. There are many reasons for employee training, but one of the most essential is because employees want to work in a place where they are growing. Employee training is expensive, but it is often cited that not having employee training is more costly in the long run. Today’s guest is Nick Smarrelli, CEO at Gadelnet Consulting. Inc Magazine ranked Gadelnet #3330 on the 2020 Inc 5000 list. They have been recognized on the Inc list eight consecutive times. Nick shares that one of the company values is “grow or die.” We look at the mindset of leaders that invest in employee training.
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Disclaimer: This transcript was created using YouTube’s translator tool and that may mean that some of the words, grammar, and typos come from a misinterpretation of the video.
There’s always something to learn. And there’s always there’s always an opportunity to be better. And you don’t have to be perfect now, but there are tools and resources available to be making better. And I think that gives me a little bit of peace as a CEO. But it’s also something neat that I think people appreciate. Because at any point, they know next week, they’re gonna be a little bit better than they were last week. And so those times where you’re just kind of having a bad day, or things aren’t going right, and you find yourself on indeed, or looking for a new job, I think our employees realize that there’s a bigger picture in place.
Welcome to Growth Think Tank. This is the one and only place where you will get insight from the founders and the CEOs of the fastest-growing privately held companies. I am the host, my name is Gene Hammett. I help leaders and their teams navigate the defining moments of their growth. Are you ready to grow?
Gene Hammett [0:51]
How do you invest in your employees? Well, you probably get them some training to get their technical skills up to snuff. Maybe you find some project management skills, and maybe even sometimes you do a little bit of leadership training. But what if training is the core of your business? What if you made training and developing your employees the most important aspect of how you serve not only the employees, but also your customers? big promise, but that is what can happen when training really works for your organization. What happens when you invest in training that works? Well, all of the things fall into place around employee retention, customer satisfaction, and really creating a place where people love to come to work, because everyone’s transforming their own skills, or they’re stepping up, and they’re really playing at a higher level. And that creates more ownership inside the company, more feeling of ownership. And one of the side benefits of increased training actually does pay off is you can lower your marketing and sales budgets. Today we’re talking with Nick Smarrelli, he’s the CEO of GadellNet, and consulting company that really does traditional IT consulting, mostly in the Midwest. But they really are creating a different experience at work because they put so much emphasis on training.
Gene Hammett [2:09]
Today, we talk about what his six month leadership development or Leadership Academy looks like what’s inside there, you’ll be surprised that it’s not just about certifications that actually has a lot of soft skills in there, we go into the depths of not only what’s in there, but actually why it’s in there, and how that actually connects the dots to create employees to feel connected to the work in a different way. When you think about your leadership, I want you to think about growth think tank and refer this podcast to others. If you haven’t already had a chance to check out the free training, make sure you go to genehammett.com/training will give you the key concepts the three mistakes are making around how do you create a culture of ownership? How do you create place where people are growing beyond where they are today? It’s about creating a team of a players go to genehammett.com/training. Now here’s Nick and his interview.
Gene Hammett [3:04]
Nick, how are you?
Nick Smarrelli [3:05]
Hey, all right. How are you doing?
Gene Hammett [3:07]
Well, I’m doing fantastic. Thanks for being on the podcast. I know you’re on vacation, but you took a little bit of time out to to do this interview. I really appreciate it.
Nick Smarrelli [3:15]
Yeah, well, I appreciate it, too. I was joking with you on the pre-show that I feel like I was like just kidnapped or something like that. I promise I’m, I’m in the mountains. It just doesn’t look like it right now.
Gene Hammett [3:24]
Well, we will concentrate more on what you say. And not what you look like. Lighting is sometimes a challenge for all of us in this virtual world. I just happened to be in my office and you are not so negative. You are someone that we’re having on the show because of your expertise and leadership. You have taken a company to the next level. I have to look down my notes, GadellNet Consulting. Tell us a little bit about what you do.
Unknown Speaker [3:51]
Yeah, absolutely. So my background is I get I came from kind of a big corporation decided to join a small startup that was actually started up in 2003. I was employee number four in 2010 and became CEO about five years ago. So it came in as a kind of Chief Operating Officer, which is a funny title when there’s only four of you, and then kind of helped grow the business. So we are a outsource it consulting company. We’ve got an office in St. Louis and an office in Indianapolis in that time, with Ingersoll Rand. Prior to this, I lived in eight states, two continents. So actually ran Goodell net from Indianapolis didn’t want to move to St. Louis got our St. Louis HQ off the grounds. We’re about to about 40 or 50 employees then got our Indianapolis office off the ground simultaneously. We’ve got about 40 in Indianapolis and about 80 or so employees in St. Louis. And we provide outsourced IT consulting towards small businesses, mostly in the Midwest, but many of our clients have footprints internationally.
Gene Hammett [4:49]
Fantastic. When we were looking at having someone on the show to talk about leadership and culture, many times we come up with this idea of training you have perspective that might be different than a lot of leaders on training, that you think it’s actually very important. You spend a lot more on training than you do on marketing and sales. Tell us why that is.
Nick Smarrelli [5:09]
So I always kind of give them my bias. My, my father is a educator, my mother’s an educator. So I’ve, I’ve kind of got these values hammered into me since I was a kid. So I so I’ve kind of brought that Hence, the fun thing about running a company is your kind of core personal values, either purposely or accidentally become the core values of the organization. So we have a value called grow or die, which I can remember the day I told my HR director that grow dice was gonna be our core value, and she almost lost her mind. But it’s a it’s not as scary as it sounds. But really, the the value in what we really put together as an organization is kind of a respect for a growth mindset, which is a cliche term now, but it was not quite as cliche when we, we really kind of pushed forward, you know, six or seven years ago. And to really kind of give just that, that wonderful piece that there’s always something to learn. And there’s always there’s always an opportunity to be better, and you don’t have to be perfect now, but there are tools and resources available to be making better.
Nick Smarrelli [6:10]
And I think that gives me a little bit of peace as a CEO. But it’s also something neat that I think people appreciate, because at any point, they know, next week, they’re gonna be a little bit better than they were last week. And so those times where you’re just kind of having a bad day, or maybe things aren’t going right. And you find yourself on indeed, or looking for a new job, I think our employees realize that there’s a bigger picture in place. And training, there’s just one of the few opportunities, I think that you have the opportunity to say, Hey, here’s your two year plan in your five year plan, and no matter kind of where the twists and turns along the way go, you know, five years are gonna be better than you are now. And my company is a place to do that. And that for us has been a key driver in the way that we have kind of retained employees have produced great employees. And then more than that have grown. I mean, everyone’s always like, you know, how much do you spend on sales, I have two salespeople across 120 employees, average MSP, which is managed service provider, nice space has anywhere between 10 and 11 at our size, so you know, we really spend a very small amount and yet are on the Inc 5000 list, I think, eight times or something silly. So it’s paying dividends. And I think there’s other things, of course, but I think if you look at kind of a core differentiator training is certainly.
Holding for a second, Nick just talked about respect for a growth mindset. What is a growth mindset in your world? Well, if you compare this to a fixed mindset and a fixed mindset, it is you see things as they are the way they are. a growth mindset is where you think that there’s more than there is right there in front of you, that you can actually create that for yourself. Why is that important inside of our organization to have a growth mindset? Well, a fixed mindset is really quite dangerous. A lot of grumpy old men have a fixed mindset, it is the way it is we can’t change it. But inside our companies, if we have a fixed mindset, it limits to what we can do from a leadership perspective, how we create a culture, how people feel connected to what we’re doing, that really is important for you to create that growth mindset. How do you do it? Well, today, we’ve been talking about training, you talk about what is a growth mindset. And so people, the more you talk about it, the more people are likely to actually carry forward those characteristics into the work that they do. Now, back to the interview with Nick.
Gene Hammett [8:24]
Well, that’s reason why we have you on the show, I want to make sure we put a spotlight on this because the training you do you probably as an IT company, you probably are training in different technologies or languages or integrations and applications. But you actually focus a lot on some other aspects of training. give us insight as to what you actually train your employees on.
Nick Smarrelli [8:44]
Absolutely anything. Yeah, you nailed it. I think you think of it you think of you know, Microsoft certifications, we think of Cisco certifications. And don’t get me wrong, ultimately, I have an onus on my both my employees and also our clients have smart employees who can solve problems. I mean, that’s that’s not that isn’t something obviously we we take lightly so obviously that’s that’s an important part of it. But if you look at our total spend, the reality is we actually spend more on non technical skill sets, we bring in speakers or we engage in training programs around non technical skill sets. And that’s everything from you know, our we do a leadership academy, which is a six month program internally, that first month is emotional intelligence. And I think if there’s anything people can learn more about, especially in my generation, I’m that kind of the back half the millennials is his emotional intelligence and being able to kind of articulate and manage your emotions and reactions to things it’s, it’s not something again, 38 it’s not something kind of people in that 25 to 35 zone really do as well as I think that there’s an opportunity to do so emotional intelligence being such a cornerstone of that. But again, ultimately speaking is is at the core of what we do is we solve problems and if you’re calling in and you you’re feeling anxious and you’re calling me and I can’t manage my emotions well also in turn solving a complex problems you You’re not going to do your job.
Nick Smarrelli [10:00]
So for me, I think you got to build that foundation. And that foundation is again, training on the outside of things before you think about those, those technical training. So technical stuff is the easy part of what we do. And but I get a look at why people choose us and stay with us both as an employee and a client, is because our people are great. And and we describe great people, they never say, Wow, they they really had their Microsoft certification. No, it was they who listened to my problem. they appreciated my problem. They had a profound respect for your organization, those type of things, and I think building those skill sets, building your leaders, and you can’t you can’t get much better than that.
Gene Hammett [10:37]
I think you just said it. Well. Emotional intelligence is something that I think a lot of people need. And even me and what I’m doing, and I have learned this over the time, how important it is, what other aspects of training, would you say besides emotional intelligence?
Nick Smarrelli [10:54]
Yeah, so we can we spend, so I’ll kind of give you the curriculum, but Leadership Academy because I do think that helps, because obviously, it’s a six month program. They meet once a month for about four hours, and they do a capstone project at the end. And in part of that program is again, your your fitting years of training, it’s a six months, so it’s forced me to focus. Again, we teach all of our employee’s financial acumen. So even though they’re in helpdesk engineer, they still understand how to read a p&l statement, because I want them to think like owners and I want them to understand, again, if somebody is a CFO is calling in their Excel is not working, or an attorney who’s building out $100 an hour in their programs that we’re getting is understand how that fits into the grander scheme of business and understand kind of how it works. Okay, we spend a lot of time on leadership training, coaching, development, mentoring, it all comes back to training, because if you’re a bad coach, you’re not understanding how to how to build a training program.
Nick Smarrelli [11:45]
So how to have those conversations, we read books like radical candor, they read books like traction, so they understand kind of how our the operating system of our business works and how we make big decisions. They learn things like goal setting, where we’re, that’s kind of an incredible part of what we do. And they create personal goals, and they create professional goals. And we kind of work towards each of those. So it kind of a myriad of things that our people give them to get themselves involved with. But again, you go back to the training back, and as we train them on how to have conversations so that they seek opportunities to grow. So it’s kind of like self perpetuating thing of saying, Okay, I know that if I have a good coach, or if I’m a good mentor, there’s gonna be training involved with that as well. So teaching those, those kind of core skill sets are important.
Gene Hammett [12:31]
You mentioned something about think like owners, I’d love for you to go a little bit deeper into that, because one of the big things I’ve seen from all these interviews, and over 500 now with founder CEOs like yourself, is they want their employees to think like owners, what does that mean in your world?
Nick Smarrelli [12:47]
So for me, I get I think, the cool thing about being a four-person company, and I think, frankly, I miss in that like a four to 15 is I would walk into the St. Louis office, I would look at Eugene and I would say how the things going great. And they say how things are the I’m like, Well, here’s the things on my mind, we’d have this great little chat, and you’d understand everything. Or I would see that you’re currently logging into a computer doing something. And I say, hey, Gene, that’s actually not the right choice. Let’s think about doing this when you’re 120. And add a few zeros to that for any of your listeners who have bigger organizations or subtract zero for smaller ones, you can’t be in the room for all the decisions. So for me, I think building a competency, not just saying I want my employees to think like owners, because I think one of the things that we don’t recognize, and I try to push this on my executive team, and I try to remind myself, it’s just how fortunate I am to have a college degree,
Nick Smarrelli [13:37]
I’ve had mentors along the way that have put me into situations that I should never have ever been in. But because it was a sink or swim I was able to swim and learn. And so not everybody kind of has that background and skill set. So learning basic financial acumen, understanding how decisions are made, understanding how businesses run, you can’t have your people thinking like owners until they understand how businesses run. So in providing these, like mini MBA, along the way for your team, is the first step at all in saying that you really want to build an ownership culture and having people think like owners, so again, going back to training is you can’t have people thinking like owners unless you have them trained with some modicum of knowledge that you as an owner have picked up along the way.
Now, hold on. Again, Nick just said something really important. You can’t be in the room for all the decisions. Well for you. That means you want to make sure that those employees are prepared to make decisions when you’re not there. Because as you grow your company, as you are focused on other projects, the visionary work, whatever it takes to keep the company growing. You want to make sure those employees on the frontline and middle management and all around the company are making decisions in alignment with what the values of the company are. How do you do that? We put a lot of emphasis on values. I find fast-growth companies that are on this show that are on the Inc list. really understand the importance of that Even NEC talked about how important values are. So make sure that your employees are prepared to make decisions when you’re not in the room. Back to Nick.
Gene Hammett [15:09]
I love that. And I want to ask you because I think people listening in here goes, Okay, it’s great to have this training development for six months for when you have over 100 employees, but kind of curious how what number of the employee were you at when you actually started this six-month Leadership Academy.
Nick Smarrelli [15:26]
So we’re in our sixth cohort, so six years ago is when we started, we do it once a year, frankly speaking, because it does take a lot of my time, and I’m usually exhausted by the sixth session, but six years ago, and so that would have put us at employee maybe 40. And, and just to show just how important training is for a company, employee 50, we actually moved an employee into training and development manager. So her responsibility is doing what we call IEP development, which is individual development plans. And she meets with every single employee on a regular basis builds, one year, two year five year plans for each one of our employees and kind of helps being that resource. And I think a lot of, is so critical. As we’re looking for new employees, we talked about that role. Everyone wants to know more about it, because it is so I guess unique, especially in the small business. And don’t get me wrong. Again, I think people assume, I think I do to clarify very clear is on a technology company, I’m on a SaaS company where I’m making 85% margins, you know, our net profits is not, you know, we make enough to continue to grow and invest, but you know, we’re not crushing it. And so adding an hr sigma resource is, was a big decision, especially when you’re 50 employees.
Nick Smarrelli [16:41]
So at that point, I had two HR people and a company of 50, which is unheard of most people use a PEO or outsource it. And so for us, it was, it’s so important to me, I wanted to have control over the way that those are distributed and show that they’re so important because I do think employees look at leadership and say, they’re telling me that training to them is important. But yet I look at where their budget is, and they spend all their money on marketing or selling money and XYZ. And so for me, I think that spoke to our employees about training as well as an important because I talked about it all the time, probably too much. And then we’ve also spent the money and provided them the resources. So seeing that I feel like was a really kind of critical success. And again, when you look at the last six years in the company, we haven’t grown, our growth trajectory has hasn’t been any big has has been exceptional in that six years. So I would, I would I would credit a part of that strategy to do that.
Gene Hammett [17:30]
One of the things that I do with these conversations is I’m always tuning in to what founders like yourself and CEOs are doing to make people feel like owners. And part of that is what I call transformation, which is this training aspect of our people growing. And I am still surprised when I see people that are growing fast, that has not put the emphasis that you have on it. So you can grow without it. But what are some of the benefits of all the work that you’ve put into training, the investments, the energy you put into it, the focus? Besides you know, you talked about retention, like we know that, what else do you seeing? Is it customer service and the way they’re able to serve clients? What are those benefits?
Nick Smarrelli [18:10]
Yeah, absolutely. I would say again, you look at, again, customer retention, I think our customer retention was 99 point something. And in an industry of about we’re about 30% turnover of clients is fairly normal, and you get more than one to 2% range. So it’s translating itself there. A key thing too, is 100% of my managers, team leads all the way up to my vice presidents all came in as an individual contributor, I have never hired a manager from the outside. And you know, that, for us is a really big cornerstone of that growth and development is saying, so people really say okay, well, I do have a place here, and I’m gonna continue to grow here. So we really are, you know, you kind of have our frontline team or entry-level folks who are really just kind of an incubator for growing, growing bigger and better roles.
Nick Smarrelli [18:54]
So you look at my recruiting expense very low because I’m not hiring very hard to find roles I’m bringing, you know, these people who come in with four to six years of experience, I’m growing them internally. And so they believe what we believe, and we believe talk the way we talk. And so all of a sudden other leading teams and a lot of times are leading teams, I would say earlier than they’re ready to. But that really again, you go back to the people that took chances on me. I’m so thankful that they did. And so I think there’s that benefit. And I think I can I think there’s a See look at kind of critical business metrics. Those are all the big ones. So can you look at profit, you look at retention, you look at cost savings, you look at client satisfaction, great, but then there’s the what’s in it for me, obviously, financially, there’s an element here, but I’m again, I’m sitting in the mountains of North Carolina, and I have arguably a team that I could leave for two weeks, three weeks? And I know that they’re going to make incredibly thoughtful smart decisions.
Nick Smarrelli [19:45]
Perhaps not the decision I would have made, but smart, intelligent, thoughtful decisions because what I’ve done is created a succession plan without even having a formalized succession plan because I have a whole bunch of really smart people doing the things and that’s from bottom layer all the way to the top. I mean it is it is incredible how intelligent and involves our team is and I credit training for that is because we’re making them smarter. And they’re doing all the right things, there’s nothing that I find kind of more enjoyable than hearing that one of my leaders have made it really kind of hard decision or key decision and they got didn’t get me involved with it. But that means they used the training and experiences that they’ve had in the past in order to kind of execute on something big.
Nick Smarrelli [20:25]
So it’s given me also just personal freedom, which is is a business startup I didn’t have for the first five or six years. I mean, you’re I’m working 80 hours a week, I’m making things happen. And now I have the flexibility I make it I’m putting in a full week this week. But I couldn’t do this in a normal circumstance. And certainly, as you hit COVID, that everyone’s dispersed and working remotely like I’ve got a bunch of really smart people who I can trust. And that’s a good feeling I’ve never had in this whole thing is feeling this need to lock down anything because I just know I have smart people and smart people get to get their jobs done.
Gene Hammett [20:54]
So much information inside that. Nick, I really appreciate you being here talking about your journey, as a leader, how you’re investing in people, I really appreciate you sharing that wisdom.
Nick Smarrelli [21:04]
Well, thanks. Thanks for having me on. I appreciate it.
Gene Hammett [21:06]
Fantastic interview. When you think about taking your business to the next level, you might want to look at training. And what you actually are giving people is a way to grow them. One of the things that said right at the end there was really appreciate how I don’t have to go out inside the world and hire leaders and managers, we can actually develop them inside this. So it reduces our recruiting costs. If you’re having any kind of retention problems whatsoever. You might look at how you’re actually developing the employees inside your company. We create interviews like this because we also want to find those little unicorns out there that are really doing something different. Maybe it sparks interest in you. I’d love to help you create more growth inside your company.
Gene Hammett [21:49]
My job as an executive leadership Coach is to help you grow as a leader and evolve beyond where you are today to create more impact and do the impossible. Do you have any questions about that? Make sure you look me up. I’d love to have you keep continuing to listen to these episodes, maybe even share them with a friend. When you think about growth. Can you think about leadership think of Growth Think Tank, as always lead with courage. We’ll see you next time.
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