21 Hats Podcast

The new pay transparency laws were designed to help job applicants and narrow pay disparities. But they've also had an unintended consequence: Employees now have far more information about what other people are making—and that can raise some uncomfortable questions for business owners. How do you decide what a job is worth? How much should you pay compared to the market? How much should employees know about what their co-workers earn? This week, Jay Goltz, Jennifer Kerhin, and Ted Wolf compare notes on compensation. Jennifer explains how her philosophy has evolved from offering below-market pay and maximum flexibility to providing competitive salaries, benefits, and career paths. Jay discusses the challenges of determining what employees are truly worth—and why a bad bonus plan can be worse than no bonus plan at all. Ted makes the case for paying above market—not because he wants superstars, but because he believes well-paid employees become more committed, more flexible, and ultimately, more productive.Along the way, they discuss paying for health insurance, contractors versus employees, hiring mistakes, and the sometimes overlooked reality that while employees crave stability, business owners are the ones taking the financial risks. The result is a candid conversation about one of the hardest questions business owners face: What is the right way to compensate the people who help build your company? Plus: How concerned would you be if your employees found out how much money you, as the owner, are taking out of the business?

The promise is seductive: Implement the right operating system and your frustrations disappear. Your employees become more accountable. Communication improves. Growth follows. Your business finally runs the way you always hoped it would. That's the promise behind EOS, the Entrepreneurial Operating System popularized by Gino Wickman's book Traction. Plenty of business owners swear by it. Plenty have spent tens of thousands of dollars hiring EOS implementers to help put it in place. But does it work?This week, we’re republishing one of our favorite conversations, one in which Shawn Busse, Paul Downs, and Laura Zander compare notes on their own experiences with EOS. Laura hired an implementer and spent years trying to make the system work. Paul took a more selective, do-it-yourself approach. Shawn has watched EOS play out inside numerous client companies. What emerges is a much more nuanced picture than the one promised in the book. The three owners discuss when EOS can be genuinely valuable, when it's the wrong tool for the job, and why no operating system can compensate for having the wrong people in key roles. As Laura puts it, EOS can be incredibly helpful "for people like me 10 years ago, who just don't know what they're doing." The question is whether that's enough to justify the investment.