22 minute TRAINING to get your employees to WORK HARDER and STAY WITH YOU FOREVER…

Summary

• I'm Laila Hormozi, Co-CEO of Acquisition.com, focused on helping businesses grow from wherever they are to between $3 and $10 million in revenue by implementing tactical tools, processes, and systems.
• Recognition in a company is crucial, especially as you grow larger; it's the acknowledgment of a person or team's behavior, effort, or result that supports the organization's goals and values.
• Recognizing employees is not just a formal practice for large companies; it's important for all sizes, and it can significantly impact employee turnover, culture/morale, profitability, engagement/productivity, and recruitment.
• As your company grows, what you once did unintentionally, like providing recognition, must become intentional, and systems are vital to replace natural tendencies with structured processes.
• There are four types of recognition: outcome-based, effort-based, milestone-based, and value-based. These reinforce behaviors and exemplify core company values and can shape your culture.
• Recognition can come from managers, the company (CEO or founders), or peers, with peer-to-peer being highly impactful but less utilized.
• Recognition can be either formal (structured, predictable, and on a set cadence) or spontaneous (flexible, immediate, and unexpected).
• Three methods of recognition delivery are written, verbal, and reward-based. Verbal recognition is often the most impactful.
• The Recognition Scrambler is a framework I've developed to implement a recognition system. You pick one item from each category to determine the when, how, what, and who of recognition.
• Evaluate your current recognition practices on a scale of 1 to 10 and decide on the next steps. Those scoring below 5 should start teaching their teams to use the Recognition Scrambler, while those above 5 might look into software to organize and encourage varied recognition practices.
• By implementing these systems and prioritizing recognition, you can transform your company culture within 6 to 12 months, setting your business apart by doing what others might not have the patience for.

Video

How To Take Action

I would suggest implementing the "Recognition Scrambler" to make sure everyone feels appreciated. Here's how to do it:

• Choose one thing from each category: when to recognize, who should do it, what kind of recognition, and how to deliver it.
• For instance, you might do a "verbal, spontaneous, peer-to-peer, effort-based" recognition. Maybe like this: You see Sarah helping out a new person at work, and you tell her right then, "Hey, Sarah, awesome job helping out! It really shows how much you care."

Start small, but do it regularly. Once a week, pick someone to recognize. You don't need fancy programs or big awards. Small acts, like saying "good job" or writing a thank you note, can mean a lot.

If you're not sure if you're doing enough to recognize others, rate yourself from 1 to 10. A score below 5? Start teaching your team to use the scrambler once a week. Higher than 5? Maybe look into software to help keep track of all the good stuff and encourage even more types of recognition.

Remember, the goal is to make a better company culture. It might take 6 to 12 months, but it's worth it.

And you can focus on free or low-cost ways to recognize others. Things like:

• Shoutouts in meetings
• Handwritten thank-you notes
• A friendly message on whatever chat app you use for work

Simple things like these can make a big difference!

Quotes by Leila Hormozi

"I don't think a lot of people realize that in business, recognition can be one of your biggest competitive advantages"

– Leila Hormozi

"What you do unintentionally when you're small is what you must do intentionally as you get big"

– Leila Hormozi

"Effort-based recognition is the recognition of employees whose behavior is most likely to drive outcomes for the company that are favorable"

– Leila Hormozi

"If you want to be a business unlike any other, you have to do what others won’t do"

– Leila Hormozi

"Be patient and put these things in place and watch how it changes your culture"

– Leila Hormozi

Full Transcript

don't know who i am my name is laila hormozy i'm co-ceo of acquisition.com and my mission with this channel is really to help you get from say wherever you are to between 3 and 10 million in revenue and so i really am trying to dial in tactical tools and processes and systems for you to do that and so this is actually one of my more tactical trainings today and it's a little bit longer and it's the four fourth out of five in trainings on how to manage in a company in this one today what i really want to break down is recognition and it's something that i think when you start off and you're small you don't realize how important it is until you get bigger and it's already gone and it's not happening i really want to help people understand when you're at that point where you're saying doing below less than three million per year what should you be looking at how should you be systemizing things so that you can actually make it to 10 million a year by having these things in place and so that being said uh tune in and uh let me know what you think in the comments all right like i said in the introduction this is part four of my high output management practices and today we're gonna talk about recognition and frankly this is something that i actually had a lot of fun putting together because it forced me to really systemize how i think about this and what i do um and so it's something i've been working on for a little bit of time and i'm excited to share it because frankly this design i have sucked at most of my life and i have to be really intentional about this in order to make it work within my company and so let me just define for you what recognition is in terms of what we're going to talk about today so recognition is the acknowledgement of a person or team's behavior effort or business result that really just supports the organization's goals and values put it in layman's terms it's just recognition of what you like it's recognition of what you like in the company and the reason i have always i've sucked at this and i'm way better now it's just because i am really like i will recognize someone in my head and it's like i won't verbally do it right so it's like i'm like what are you talking about you're doing a great job they're like well i didn't know you haven't told me in 17 weeks i'm like oh and i think that so many of us do this and it's such a thing we get caught up in because we have so much going on in the business it's like you know we're playing sales and marketing and customer success and all these things at the same time the last thing that we're gonna remember is like let's tell mark you did a good job last week and so that's why i feel passionate about helping people get this into their business as a formal practice because i don't think that most people even know it's a formal practice and that there's recognition programs and so that's what i really want to talk about today is i think that it's a little bit intimidating because the stuff that is out there honestly is for companies that have like 500 people in it and so teaching something like that not very useful but what i do want to be able to teach you is how to dial this down so that even if you have if you have two employees if you got five employees if you have 10 20 30 50 100 this still applies that being said the reason that this is an important topic is i don't think most people realize how important recognition is right and i really like this phrase which is there are two things people want more than sex and money it's recognition and praise and i think if you ask a spouse for example they will tell you 100 my favorite thing that you do is tell me i did a good job right i think that's what most people want the end today it's like they want to be heard they want to be seen they want to know that they're doing well people like outside validation like we would like to all think that we are above and we're buddha and we just need to recognize ourselves and validate ourselves but like the reality is people love hearing it from other people it drives so much behavior it's like people say they want to be famous they want to be famous because they want validation by the masses people say they want to be rich it's because they want the money to validate that they are valuable and so it's all just forms of validation which comes from recognition so think about this right there's two wives or let's say there's two husbands right uh one husband his wife cooks him a fantastic dinner and he says nothing right he says nothing to the wife do we think she's going to want to continue to make these immaculate fantastic dinners for him now there's the second one right so say the wife cooks this amazing immaculate fantastic dinner the husband tells her oh honey this dinner is amazing it's so good i love this when you cook it just it's always so amazing you do such a good job and i just love you so much i can tell you being the wife who cooked a homemade dinner for five years in a row the reason i liked cooking dinner and i always cooked dinner for alex is because he always told me i did a good job he always was like you're such a good cook you make such good food that you're so good at this et cetera et cetera et cetera and i loved it that's why i did dinner people like how would you cook every day i'm like well if your husband told you every day that you did such a good job cooking dinner you would want to do it more the same goes for the wife and how she tells her husband you did a good job taking the trash out is the husband uh whose wife says nothing when he takes the trash out more or less likely to take the trash out again than the husband whose wife says you did such a good job honey thank you so much that really helped take a lot of my plate and so what that teaches us is that recognition reinforces behavior right and so that's why this is such a useful tool within a company it helps you build your culture and it helps you show people the behavior that you want which you know comes from the expectations and accountability and so that being said i don't think a lot of people realize that in business this can be one of your biggest competitive advantages okay let me explain there's five places in the business that recognition affects more than others there's honestly it affects the entire business but these five areas are most important which is one employee turnover two is culture which you could consider morale uh three is profitability four is engagement or productivity and then the last one is recruitment and so this is how having good recognition or formal ways of recognizing a company actually affects the company it reduces employee turnover by 18 which is crazy because if you for every employee you lose if that employee makes more than 40 000 a year it costs on average 40 to 50 000 on the company so imagine if you reduce that by 18 it's bananas the second is the culture which is essentially morale and that increases culture by 66 and so i consider cultural morale to be a leading indicator of everything else within the company so if you can increase morale everything else follows profitability goes up by 23 which is again nuts because you think about the amount of initiatives and the amount of things that people have to do that take so much resource and time and energy from a company to increase profitability by that much when if you just put in a formal way of praising people and recognizing their efforts you can do the same it's insane you can increase productivity by 14 which again think about how much more efficient you can be as a team if everybody is 14 more productive it's exponential and then lastly is you get 56 percent more referrals if you have good recognition and so that being said that's why this is saying that is one of the five high output management practices because it's underutilized most people don't think about it and most people don't have a true system for implementing in their business and that's why i want to break that down for you today and so really the question is like why does it matter to you obviously you want to affect those metrics but i want to explain where this comes from which is you know in 2016 we had a small team and it was growing i think we went from seven people to 21 people that year and in the beginning when you have like less than five people it's not super hard to recognize people it's informal you kind of see what everyone's doing so it's like there's a lot of opportunities for you to recognize people and you don't really have to think about it but if and when you grow what you notice is it's much harder it's harder to recognize people you can't be the only one recognizing people you don't even know what half the people on the team are doing on a day-to-day basis you don't see and have opportunity to recognize them and so you start to notice things start to happen if you don't put this in place more people demand higher pay this started happening with us i felt like every week people were like can i get paid more and i was like what the hell i was like you're already paid on the high end of the spectrum and now you're asking me for more money and you literally worked here for three months i'm like what the then on top of that people ask you for more pay but they're taking more time off and i'm like you never hear and you want a pay raise and you're constantly taking time off but i was like okay this is a pattern i'm starting to notice more people and then those same people that wanted higher pay and were taking more time off we're the same people who left and so we had higher employee turnover what happens with that is then i had lower customer retention lower customer conversion and lower profitability overall it's like our revenue was growing as a company and our size was growing as a company and yet we were not as profitable i was like what the like who wants to grow if it means you're less profitable not me and so that's when i realized what you do unintentionally when you're small is what you must do intentionally as you get big and so people think that systems are in place that slow them down the reality is that almost every system you need in your business in order to grow is there to replace the things that you once did unintentionally because it came naturally because it's easy and now you must be intentional about them in order to grow in order to not lose what you have and so that being said that is why what i want to explain is how to have a recognition program or method in your business you don't need to call a program you can call it a method you can call a system you call whatever you want you don't even need to have informal but something to recognize people because if you don't that is what happens is your culture crumbles and i've watched it myself and it all starts from the top that's why i told you at the beginning like this is not something that i am naturally good at i have to really practice because i will see people doing something good and i'm like what a good job sarah did great there and then i don't tell them and then they come to me three weeks later and they're all nervous and i'm like why are you nervous you're like one of the best employees here and they're like oh my god you think i'm good and i'm like wow i suck at this right and so i think we all need some sort of system in place to help us recognize people on the team and so what is really like a recognition program it's just an employer initiative to formally acknowledge a person or behavior that we want to reinforce within the company and so this is what i've boiled it down to because there is a lot out there like i said that can help companies that have a thousand two thousand employees and i read all those articles and i've read all those how-to guides and it's really not useful because it's like okay i'm an entrepreneurial company that has you know less than a couple hundred people how am i gonna implement this in my my own company and so i really broke it down to there's there's four aspects which is there's what who how and when and so what i want to do is i'm gonna break down each of these pieces for you and then i'm gonna show you how they all fit together and how you can actually implement this today tomorrow this week into your business so first is the when when are you going to recognize people that is probably the most important question because it tells a lot about your company and it is what you can use to shape your culture so the first one which is the most clear in my opinion is outcome based which is recognition tied to the completion of a goal or outcome that is important to the company so really simple this could be when someone completes a project this could be the achievement of a quarterly goal this could be when someone hits quota they are recognized for those things it is very definitive it is easy to measure it's easy to track that's why most companies have heavily you know like suede recognition programs that value outcome it's just easier now the second one which i actually like more but is harder to measure is effort based and effort based is the recognition of employees whose behavior is most likely to drive outcomes for the company that are favorable so if you think about it the effort is a leading indicator for the outcome and i like to get people more excited about the process than the outcome because it's also important that they adhere to our values during the process and so something that would be effort based would be you know behaviors that you want to reinforce like doing more than the required of the job so you see somebody who's like training someone else who's new even though they're not the manager but they're helping them anyways that would be something i would want to reinforce it could be asking for help because a lot of people don't ask for help and you know if they ask for help they're more likely to succeed it could be seeking mentorship and they're investing in their own personal growth and so really anything that is effort-based that you know is going to lead to the ideal outcome is something that we want to recognize and then again milestone milestones is also something that you see uh big corporate companies have tons of these and i'll kind of give an example which is really just recognition of an event or action marking a significant stage in the development within the company and these you can obviously have as a company as a whole as departments as roles when i worked at 24 hour fitness for example they had them for a number of sessions that you'd taught and also years in the company so as trainer if you taught a thousand sessions you got this really cool jacket uh if you taught five thousand sessions or 10 000 sessions you got to attend these certain you know workshops within the company and so that would be a milestone right a lot of ones are you know your first 90 days it could be an anniversary it could be your birthday it could be employee appreciation day there are milestones or events that people want to recognize within the company and that is again probably closest to outcome because they're really easy they're they're they're finite like it's really easy to identify them and so for big companies especially they're probably more heavily weighted towards outcome-based and milestone-based where i think the advantage of small companies is that you can be effort based and lastly value based so value based recognition is recognition of behaviors that exemplify core values of the company so it's pretty um self-explanatory which is like you know if your core value is speed is king then when someone does something really quickly you would recognize them for it right if your core value is something tied to quality then you're going to recognize people for quality if core value is tied something to customer centric or vulnerability then you're going to tie it to customer-centric vulnerability and so it's pretty simple you just want to tie behavior to core values and always showcase when people take behavior or take steps in line with the values that you have as company and so those are the four kinds of recognition and i will show you in the end how to select which one for yourself so the second piece of this is the who right so now you're like here's when we're gonna recognize people right well who's gonna do it right and so the most traditional way is manager to employee which i don't think if you're starting off and you don't have anything in place i don't know if i would go with this one because this happens most naturally because managers see what the employees are doing managers meet with the employees constantly managers have one-on-ones managers have quarterly reviews they have so many opportunities this isn't something you typically need to encourage at least that's what i've noticed because people already get a lot of this and i actually have pulled my teams and said who do you want more feedback from you know as a teammate and they always say from my peers or from the whole company like which what that means is like the founders and so that's why i really like these other two more which is company to employee which is when the company which is usually like the founder the ceo recognizes right the employee this could be something like being uh mvp most valuable player this could be employee of the month it's coming from the company it's a company email it's the company monthly uh call that you're on it's the founder saying it to you right on behalf of the company and so it's a representative of the company recognizing the employee which i think people really value this because public praise is favorable and then lastly there's peer-to-peer and this is the one that is probably the least utilized i want to say because it's harder to facilitate it's like telling a peer to recognize a peer without seeming inauthentic is difficult and so you have to create uh systems in place which i'll talk about later so that you can make this a little more lubricated for them but this is super powerful because like you think about this right which is like there's being accountable to your manager and wanting to be recognized for your manager but then there's one to be recognized by all your peers much more powerful to be recognized by all your peers there's more of them they are in your shoes they are more like you and so a lot of people don't utilize this one as much because they're just not sure how to put it in place honestly the most powerful one in my opinion so now that we've covered the who let's talk about the what so there are two kinds right really of uh recognition in terms of like what which is formal and spontaneous okay so formal recognition is a predetermined and predictable way to formally acknowledge behavior and accomplishments as a company and so formal recognition is usually set on a cadence and you know it is coming everyone knows that we celebrate this year we have this here it's almost like um you know as a country you know what holidays you celebrate it would be like as a company we know what behavior or what recognition we have in place so it might look something like yearly you've got mvp of the year you've got your annual bonuses and you've got years of service awards quarterly you've got quarterly reviews attainment of quarterly goals and a jedi award that stands for just epping do it it's a word we had in gym launch monthly you might have employee of the month attainment of a monetary goal and then weekly it might just be celebrating birthdays and anniversaries this is an example of a formal recognition program obviously it doesn't mean you do all of these it also doesn't mean you only do these you might have more than this right these are just examples but it typically falls on a cadence such as this and it is predictable everyone knows it is happening people aim for it though i want to be the jedi i want to be the employee of the month i want to be the mvp the downside to this is that it's delayed gratification it's not immediate and so that's why i like a mix of the two because i like to mix formal spontaneous spontaneous recognition is a flexible and timely method to formally acknowledge behavior and accomplishments right so spontaneous might be someone does something really great you shout them out on the huddle the next day it might be you send them a handwritten card that goes there overnight it might be that you send a wow gift to somebody who did something really great for a client it might be that you send somebody a t-shirt right and it exemplifies the t-shirt has the core attendant that they have exemplified on it and we did this at gym launch this is my absolute favorite thing to do which was anytime someone exemplified the core tenant a peer could send them the t-shirt that had that cortana on it which was pretty nifty i loved it and lastly is you could um you know spontaneously highlight them in the company email right and so it's something that's unexpected and the reason that this is nice is that people like surprises as long as they're good surprises and so you kind of want to have a mix of the two there's no right or wrong and you might start with one or the other and you might already be doing one or the other and if so i would encourage you to try and weave in the opposite and that being said i kind of just put these in there there are so many um i want to say hubs softwares that you can use to track both formal and spontaneous recognition and so after this i would go check out maybe one of these three there's hundreds that you can use and they're all very different and so kind of explore and see what might be best for your company if you really want to put this in place now that being said then there's the how how am i going to recognize this person what's the delivery vehicle for the recognition right there's really three there's written verbal and reward based so written pretty self-explanatory it's just writing it somewhere this could be in a company newsletter this could be highlighting them on linkedin or instagram on your social media account this could be sending them a handwritten card and i think out of these i like social media and handwritten because they have an element of public as well to them and i think people like public praise the second would be verbal which this could be a shout out on a meeting this could be one-on-one praising somebody on your meeting with them and it could be acknowledging them to your boss right so like in front of their boss giving them uh acknowledgement and lastly is reward which is planning an activity for them maybe it's like you know they're taking a day off and you want to buy them like a spa gift card it's giving away a bonus it could be sending them custom swag it could be saying a trophy that has you know mvp it could be an award like a plaque or a sword it could be giving them something for free and so those are really the three ways that you can deliver the recognition now i will tell you that most people steer towards written or reward based i believe that most people actually really like verbal more i think most people like to hear that they did a good job and so i sometimes like to pair those it's like you do the verbal and then you also send them a card or you do the verbal and you also give them a reward because i just believe that there's there's something about recognizing people verbally that it's just it just hits more and so ideal scene with this is that you want to start small and you want to add in variety and so you're probably thinking how do you put all this into play because like i have a lot of information now but like how do i actually implement this into my business and that's what i want to explain so i put together this which is uh what it dissects how i think about recognition and how i deliver it and it's the recognition scrambler and so really what this is is you're just going to pick one from each box that's it so if you're watching this right now and you want to teach us your team or something you want to put in place this week screenshot this and all you're going to do is pick one from each box and it will literally tell you what kind of recognition you're going to give somebody so for example say i pick formal reward company to employee outcome based that might look like um mvp or most valuable player of the year and i'm going to announce it on the company meeting pretty simple it's the first one another example of this would be say i do spontaneous it's verbal it's employee to employee and it's effort based that might be a shout out on the huddle of me saying sarah you did such a good job the other day uh getting on the phone with that client i know you really helped them work through that problem like i just want to give you a shout out for working so hard simple right and so that being said i want you guys to rate yourself on a scale of one to ten one is this is abysmal i have none of it this is terrible and i've just now been exposed after this video to realize that i am i just suck and then 10 is i wasted my time watching this video thumbs down layla and i think that that can kind of guide you into realizing uh what you can do next so if you're closer to anything below five i would say first you just want to teach your team and so i would be going back i'd be screenshotting that scrambler and then i would bring that to my team and i'd say new thing every week i'm going to hold you on accountable to using the scrambler one time that's it i just need you to use this one time with your team i would be doing that if i were below five if i were above a five i would be saying not only am i going to use the scrambler but i'm also going to get a formal piece of software which they can be super cheap in place to start encouraging more different kinds and more variety of recognition because as you add on more layers of recognition you're probably going to want to explore a software so you can keep it organized and so i know that in the beginning and what i'm even going to do now and do now in acquisition is i use the scrambler i just think to myself who am i going to recognize this week and how right and i do this i yesterday sent somebody flowers and chocolates and a little note because i want to recognize them and i sent them a message on slack but as you grow and get bigger there's more layers to this you want to have peer-to-peer you want to have company to peer you want to have employee manager it's harder to keep track of and to keep encouraging as a leader and so i do suggest that you look into those softwares and there's different kinds for different kinds of companies and so that being said i hope this was of use to you i just this is something that there's a science of business and there's a soft side of business and most people focus on the purely the science of business because it's quantifiable and you can measure it and i know that this is harder to measure but i promise you you will see the results if you implement this i promise that within six to 12 months you will have a different company culture a better company culture and i don't think most people it's like if you want to be a business unlike any other you have to do what others won't do and most people don't have the patience for that and so i encourage you do what took me years to learn which is be patient and put these things in place and watch how it changes your culture and so that being said i hope that this was of use to you if it was leave me comments let me know what you think if this is a simple enough breakdown and i will see you on the last and final video