Ep. 5 – Karl Ahlrichs: Senior Consultant at Gregory & Appel Insurance

I always enjoy speaking with Karl Ahlrichs, a human capitalist consultant and a far-thinking and future planning individual. He comes on the podcast today to discuss some of the storms he sees coming on the horizon, particularly where HR and the next generations of employees meet.

Even though our current economy is far greater now than it’s been in a while, Karl sees quite a few potential problems on the horizon that we need to be prepared for:

  • Baby Boomers – due to the recession of 2008, many of these people delayed retirement to rebuild their nest egg. Many of them are now ready to leave and hit the beach.
  • High Performers – they’ve driven the country’s productivity to unprecedented levels, but now they’re looking for the next challenge. They’ll be ready to migrate jobs soon, so we need to figure out our management style and plans so we can attract new ones and keep the old ones in place.
  • Social Media – sites like LinkedIn will attract high performers away from you by enticing them with great challenging opportunities as well as being a source of candidates for recruiting companies.
  • Digital Natives vs Digital Immigrants – this is a great way to divide the world when looking to hiring in the future. Digital immigrants need jobs without lots of tech involved, and we need to hire people who line up with their jobs. You can’t put somebody tech savvy into a job with minimal tech interaction and vice versa.

Karl knows that business practices also need to reflect the current majority group within the workplace: millennials. Studies have shown that 2/3 of millennials don’t plan on staying with their current employee for more than 5 years. We have to change our business and management practices to keep these high performers more engaged. “We have to adapt the very work we do to fit a more project thinking pattern.”

There are a few things that we can start to do now to keep those high performing millennials in place:

  • Better hiring practices and higher standards. High performers love to work with other high performers and are pleased and impressed when their bosses hire the best.
  • Management sincerely listens. High performers tend to stay in their jobs 20-30% longer if they perceive their manager listens to them and values their input.

Millennials are only one employment group we must contend with, but the new Gen WiFi will be a handful as well. These future employees became aware at the age of 3, the same time as Google came online. This generation doesn’t need or want to know anything; they rely on Google over memory. One other key distinction about this group is their lack of ethics. The ends justify the means for them. This will create ethics issues in the workplace and it’ll be up to us as management to parent them along ethical lines.

Underscoring all of these issues is the fact that people nowadays are overwhelmed with the glut of information they’re presented on a daily basis. The average person is subjected to 32GB of data per day. Talk about overwhelm! This has created the need for simplicity in answering questions or solving complex problems. The ability to simplify the complex and communicate it will be invaluable in the near future. “That’s the most important human skill going forward; to take complex things and make them understandable.

So the most important thing people can do, to sum everything up, is to focus on hiring standards because if we bring in ethically challenged poor performers, we’ll destroy the cultures and businesses we’ve worked so hard to develop. We need to screen for, teach and practice for ourselves a higher ethical standard because, “Ethics are learned by modeling, not by reading.”

Karl was very gracious with his time and wisdom today as he dropped value bomb after value bomb on us. I took a great deal away from our discussion, as I’m sure you did as well. We all now have lots to take away and apply to our own lives and business to make our lives easier.

 

 

IN THIS EPISODE, YOU WILL LEARN:

  • How you can tell if you’re a millennial
  • Why it’s to respectfully leave any job that’s not a cultural fit
  • The three basic stages in the development of our own personal ethical standards
  • Why story telling skills can help you communicate with the world today
  • Plus much more…

DON’T STOP HERE…

ADDITIONAL RESOURCES:

  • Book ‘Everydata’ by John H. Johnson and Mike Gluck: Website

 

TRANSCRIPT:

 

Peter: Hey, welcome back everybody. I’m extremely excited today, as I always am, when I get to interview someone for this podcast. But today I’m interviewing a good friend of mine, Karl Alirichs. And first and foremost, Karl, thank you for taking time out of your busy schedule. I greatly appreciate you parting your wisdom to my audience on this podcast.

Karl: No problem. It’s a lot easier to tell other people how to live their lives then to do a better job living my own.

Peter: Well said my friend, well said. Prior to us getting started we were talking about some themes that we were gonna discuss. And Karl wanted to start out with scary trends, ethics, and uncommon senses. Can you help us with that?

Karl: Yeah, let’s start with the end of that, uncommon sense. Everybody thinks they want common sense. But if you look it up, basically the commonly held beliefs of the group or society are called common sense. Well they aren’t working so we need to go to the next step which I’ve decided to call uncommon sense.

Peter: And what is that next step?

Karl: Paying attention to a couple of storm clouds that are on the horizon. If you can be ahead of your class by one page, they consider you the expert. And in modern times we’re all fighting to be a page ahead. So, I want to point out a couple of trends. And understand, I am a human resources person, a human capital person, who is bilingual with finance and the finance profession. I go into rooms of Chief Financial Officers and explain human capital to them. Then I flip it and go into rooms full of human resources professionals, and explain finance to them. I actually use the same slide, I just run in backwards.

Peter: And you’re able to make that connection between really left brain people and right brain people, which is a gift.

Karl: Well I’m in the middle; I’m an ambivert. You know, there are some introverts and extroverts. I’m an ambivert.

Peter: It sounded like you said ambienvert, which means you take…

Karl: I’m not on drugs.

Peter: OK. So, tell us about some of these storm clouds you see out on the horizon.

Karl: We’ve got a perfect storm. Peter, how’s the economy?

Peter: I’d say it’s getting better. It’s better than it was some years ago.

Karl: Is that a problem? Yes. To speed things up here, I’ll answer all my rhetorical questions.

Peter: OK. Thank you. Sounds good.

Karl: Our per capita productivity is huge. Of the last sixteen quarters, I think thirteen have been growth quarters measured by GDP. And it’s causing a rumble in a couple of areas. One is that the Boomers who delayed retirement because of the crash of 2008 when their 401(k)’s became 201(k)’s.

Peter: Or just K’s.

Karl: Yeah, stock markets are back up. So, they are itching to get to a beach with a beverage and they have not told their employers this. Second, we’ve got the issue of high performers. Normally high performers are a fairly mobile group. After the crash in 2008, they kind of hunkered down in place and gripped their chairs and were working scared which always drives productivity up for a while. And we’re to the point where that’s stopping—the growth of productivity I mean. And also we’re getting where the high performers are sticking their heads out of the foxholes and looking around for their next move. So, if you’re a CPA firm, if you’re a finance department, you should expect a significant migration of people in the next 18 months. And you have a choice: they can migrate to you or they can migrate from you. The migration’s gonna happen. And high performers like to work with high performers in an entrepreneurial environment. And you have probably til the end of 2016 to figure out your management style so that you can attract them. Question: are your high performers on LinkedIn? Sure.

Peter: Of course they are.

Karl: In 2008, LinkedIn wasn’t nearly the power that it is now. So, here’s how it’s going to play out. Your high quality person, who you have been giving free reign and not interacting with that much because you don’t want to micromanage them, they’re sitting at home on a Sunday night, binge-watching something. And up pops a LinkedIn invitation for a job for someone else. And they like you, they like working for you, but you haven’t really talked to them in eighteen months because you’ve been of the mistaken opinion that high performers don’t want to be bugged. No, they want to be challenged. They want to be given stretch assignments. They want a good relationship with a boss they respect. So, you know, their departure will surprise you. “Weren’t you happy here?” Yeah, but it was more than that. And so they’ll always just roll their eyes and tell you it was the money, when it’s not the money. Overlaying this, we’ve got a few generational things. So, I’ve got that basic, scary foundation set. Let me drill into one of the interesting topics that’s somewhat driving this.

Peter: OK, before you get into that topic, you mentioned something about LinkedIn. And LinkedIn has just recently launched LinkedIn ProFinder. Have you heard about this?

Karl: Oh sure. They tried to sell it to me.

Peter: And it’s a free service right now that’s out there. But it’s really about entrepreneurship. It’s about who can give me some legal advice, who can do some coaching for me. They haven’t monetized it yet.

Karl: Oh, they will.

Peter: Yeah they will. They’re very upfront about it. But it’s another platform that entrepreneurs should go to to seek assignments.

Karl: Right. Also, understand that LinkedIn’s core business model and cash flow source is not from the advertisements but is from selling direct access to the data base to recruiters. So, they are first and foremost a tool for professional recruiters to use, to get at your best people. Just be aware of it. That’s where their core business model is, was, and will come for. Also, understand that I’m occasionally teaching courses on career transition. And the question has come up several times, “Why are we even doing resumes?” And I say, “Well, it’s a good way to get you focused and then the contents of your resume get copied and pasted into your LinkedIn profile. And then with a LinkedIn profile we will add some SEO, nice stuff. We will add some video clips. We will add to it to make it more of a brochure on your life and career. But the core of a resume is evolving into a LinkedIn profile.”

Peter: My wife, who was with Macy’s for thirty-five years, retired. She took a year off. She’s now trying to look for another job and had to write a resume for the first time in thirty-five years. She’s doing outplacement through Lee Hecht Harrison, and she’s had to do a resume and also do her LinkedIn profile. And it’s been interesting, watching her put this all together and learning more about, as you were saying, the SEOs and really, LinkedIn is your resume.

Karl: That’s right. And I personally have built a web page. If you type in my name, it’s gonna pop up, karlalrichis.com, which is gonna get redirected to a couple different pages I have. As we emerge into this new world, there’s two kinds of people now. There are digital natives, and there are digital immigrants. It’s pretty self-explanatory, and it is not age specific. I work with a guy who’s in his thirties, who is hoping he never has to learn another cell phone beyond his BlackBerry. I’ve worked with seventy year olds who have their wireless Bluetooth hearing aids tied to their iPhone, with the frequency response charts for their hearing aid on their Apple Watch.

Peter: Nice.

Karl: I said, “What’s next?” He said, “I want my pacemaker controls on my watch too.” One thing about the generations, take it with a grain of salt. And second, start looking for other ways to divide the world. And I think a good way to look at it are digital natives versus digital immigrants because that’s the world we play in. We need to be working with people who line up with their jobs. Someone who’s a digital immigrant needs to have a job that doesn’t need a lot of digital interaction. They’re out there, you just need to know where to look.

Peter: Right.

Karl: Quick pop quiz—I want to test our audience. Everybody out there in radio land, have you checked your phone already while I’ve been talking? Do you Google for information twenty times a day? Do you use your mobile phone for more than ten things, ten apps? And here’s a good one, have you turned over remembering to technology? The more of these you say yes, the more you are a Millennial. And understand that with the recent data, it’s kind of funny. Gen X is probably the most important generation because they’re the ones on deck to take over management roles. But no one will talk about them. One, because they’re somewhat quiet and now, because Millennials are the largest generation in the work force. That’s new this year. Gen Xers had two and a half years in the sun where they were the largest. Millennials have taken over. Sorry about that. They’re the most diverse population ever but the interesting statistic is the scary thing on the horizon. Deloitte did a survey, just released, where they asked for future employment trends with the Millennials. Two-thirds of the people currently working for you, whoever you are out there, two-thirds of them do not intend to be with you within 5 years. They are just passing through. This changes everything. This changes how we train. This changes how we manage, because we can’t threaten them to make them Boomers. We have to adapt the very work we do to fit a more project thinking pattern, project employment lifestyle, where their possibility of returning to you in three years, is actually pretty good—if you’re a good place to work. But they’re gonna come back with more skills, so you will have to pay them more. That’s just part of the equation, but that fits the business plan, that’s OK. But, job hopping is going to be rampant, and it’s going to be systemic, and it’s just how we’re going to do work. Good news, it means your organization can be very flexible. Bad news, it means your training and management styles need to change.

Peter: What could stop this revolving door? If an organization wants to say, “You know what, I don’t want this revolving door here.” How do we stop it? Or how do we slow it down?

Karl: OK. Let’s agree that high performers want to work with people smarter than themselves. They want to build their tool kits, they want to work with other high performers. A big key to this is raising our standards on hiring significantly and changing what we hire for, so that the high performers you have are pleased and impressed with the quality of the people coming in to work with them. They’ll stick around if they are working in an environment they perceive they can’t get anywhere else. And if their manager appears to listen to them, then they will stay longer because they don’t get that very often. And they will stay there, 10, 20, 30% longer, for no improvement in money. This is not a money score, this is a psychological satisfier. I mean Peter, have you ever worked longer at a job because you either, A. had a good boss, or B. had a good culture, and that held you even though you could get more money across the street?

Peter: Yes.

Karl: There. Thank you for answering correctly. And I’ve taken jobs for the wrong reason. I’ve taken jobs for money and not been a values fit. I knew within two weeks that I made a mistake.

Peter: I knew within two days.

Karl: Oh man. I worked for corporate sponsored placement for years as an HR person. You said your wife’s going through Lee Hecht. Excellent firm. I was across the street at Right Management Consultants. I was part of thousands of termination meetings. I would routinely ask people, “Was this a surprise?” “No.” And then I would ask, “If this job wasn’t a fit, how long were you here too long?” Average answer, probably three years. Wow. So, somebody would actually burn off three years of their life because of inertia, because of whatever, because of fear of change. I vowed to never do that. So, when I got into a spot where I knew I wasn’t a fit, I started working immediately on my departure and finding a place that aligned with my values. Eighteen months later, I walked into my boss’s office and said, “Can we date other people and still be friends?”

Peter: Well at least you were trying to still be friends.

Karl: That’s right, and we are. It’s important, because of the nature of the business world, to always arrive on good terms, be there on good terms, and leave on good terms.

Peter: Exactly.

Karl: So let’s get back to a couple surprises that I really wanted to cover.

Peter: OK.

Karl: One was that the Millennials are over, that if you hire somebody—it’s 2016—if you hire somebody who is twenty-one or younger, they are not a Millennial. And each generation has a trigger point that defines the generation. With the Boomers it was the size of their cohort. With the Gen Xers, it was that they were latchkey kids and became adults in high school. With Millennials, it’s the fact that they were somewhat over-parented. Let’s call this new group, let’s call them Gen Wi-Fi. You become aware at about age three. They first became aware the year that Google was created. So therefore, they have never known a world where they have to know anything because all of the wisdom since Plato is available instantly on their smartphone. Peter: OK. So, you’ve just basically described my son at turning sixteen in June, of Generation Wi-Fi.

Karl: Yep. And quick, what’s the capital of South Dakota? They don’t care.

Peter: Is it Bismarck?

Karl: No. Get out. It’s Pierre. I just picked that one cause no one knows it.

Peter: Or Peter for short.

Karl: Thank you very much. It’s all about you. Here’s what really makes them scary: the Josephson Institute of Ethics went in and did confidential surveys on ethics of high school kids. Question, have you cheated on an exam at least once in the past year? It was hitting 60-70% yes.

Peter: Wow.

Karl: In the real world people do what they have to do to win, even if others consider it cheating? It’s like 55%, yes. These will be our new hires. So, if we agree that they come into the workplace expecting us to become their parents, we are going to have to do the job their parents didn’t do on teaching them ethics. Because, I don’t care what your organization does. If you have workers that are willing to, “Oh, its late, and I’m out of here. And instead of doing a full lab check on all of these chemicals, I’m just going to enter a good number that they probably are.” That’s an ethical lapse. I’m not going to leave my workplace clean and ready for the next person, so it’s a safety hazard. Safety is an ethical thinking. We have ethics as one of the fundamental cornerstones of commerce and without ethics our society falls apart. And without trust in each other, our society falls apart. For a variety of reasons, ethics are going to be stretched thin starting, oh about now. Where’s this coming from? I’m not sure. Certainly politics plays a role, certainly sports plays a role. I was a big Lance Armstrong fan.

Peter: Oh, yeah. Me too.

Karl: Does Major League Baseball condone performance enhancing drugs, yes or no?

Peter: They say no.

Karl: Yeah, right. Are there steroids users being admitted into the Hall of Fame?

Peter: Ah yes, but we don’t know that the worst of them—

Karl: yeah, yeah, yeah, yeah, OK. Right.

Peter: What about deflated balls, footballs?

Karl: I couldn’t believe it, I have to tell this story briefly. So, there I was—I wish you could have been there—I was the opening speaker at the annual meeting of the Vermont CPA association, two days after the Deflategate sanctions had been announced. So, if you’re in Vermont, who are you cheering for in the National Football League?

Peter: Patriots.

Karl: There were some Buffalo people in the audience but mostly it was a Patriots crowd, and they were cranky. My nametag read Indianapolis, which is where I live. So, I decided to go straight to the heart of the matter and trigger an ethics discussion. My first slide up on the screen was like an engagement picture—a young couple, happy and about to embrace—and they were both wearing Tom Brady jerseys. And my opening statement was, “Welcome. A moment of advice before we get started: when you marry, marry a Patriots fan because they don’t mind if you cheat.” They were off and running. You know it’s interesting, everybody has a hot button on ethics. “I never break any rules.” OK, tell me about your driving. The speed limit’s 65 what do you drive?

Peter: 75.

Karl: Everybody does that. So, ethics is an art. Here’s my point: on this coming storm cloud, as their employers—I’m talking HR here—we need to include in the core culture of the company the material that attracts someone to our firm, the onboarding that happens once they join our firm, all of that has to have an undercurrent of high ethical standards. What does it look like? Give me some case studies, we need to be able to teach people ethics and continually teach people ethics. If you’ve ever worked in manufacturing, every shift of good organizations starts with a shift meeting. At the shift meeting, it starts with a safety moment, where someone tells a safety story, somebody does a safety briefing, but safety is the common topic in manufacturing and has been for decades. We need to do that same thing with ethics inside our organizations, where a managers meeting will begin with an ethics moment, where onboarding begins with a quick chat of, “This is our ethical standard.” Not only is it just good for commerce, but remember we were talking about high performers earlier?

Peter: Right.

Karl: They love working in an ethical environment and low performers hate an ethical environment. So, I guess one of my key points is, if you really want to get ahead of this coming ethics storm, bake it into everything you do. And make integrity a part of the screening for new hires, you know, build in a question: “At work can you give me an example of a time when someone around you acted unethically and what did you do, or what did you learn from it?” Let’s really have this as part of the conversation, right up front, so people understand what’s going on.

Peter: I agree with that. If you want to have an ethical environment—you know Enron had a code of conduct. They tried to create, on paper, an ethical environment. But they never walked the talk. So the tone comes from the top and I love the idea of starting meetings with an ethical conversation. I don’t know if we can teach people ethics.

Karl: Oh, yes we can.

Peter: I don’t know. I tend to think that was taught at a young age. But we can bring them into different types of ethical situations so they can contemplate their personal stance versus what’s going on and try and change that behavior.

Karl: Two things. First off, understand in the human condition, we go through three basic stages in the development of our personal ethical standards. When we’re kids, we do the right thing to avoid punishment or to gain a reward. When we get to young adult hood, we join a group and we share a common ethical standard. We’re watching the ethics of others and mimicking them. The group will drive the ethics. It’s kind of mob behavior on ethics, either doing something good like after a tornado blows through, everybody in the community goes into an abandoned convenient store where it’s unlocked and they shop and leave their cash on the counter. That was documented after Hurricane Katrina in small towns. Then there’s the final stage, where you have your own ethical standards which you stick to no matter what’s happening around you. Case in point, if you’ve ever served on a jury, there was someone in the room who was making decisions on their own standard. That’s why we have juries. That’s great. That’s why if it’s a really capital offense we have to have unanimity, because if there’s one person in the room who will not do it, fine. That’s our society functioning. But that’s somebody who is adult, having their own ethical standards. And what we’re trying to do is get people up to those standards. Without it, we’re gonna see a surge in embezzlements, we’re gonna see a surge in bad decisions. This is what we have to protect in our society.

Peter: OK.

Karl: If you’re trying to teach somebody this, give them a list of a half a dozen things that could be great aspirations: wealth, fame, knowledge, integrity, popularity. OK. And say, “Pick one. You can only pick one of these, but when they’re writing your eulogy, this is what you will be known for.” If they pick anything except integrity, there will be many times in their lives that they give up integrity to get the other thing.

Peter: Right, I agree.

Karl: They need to be aware of this. What drives it? Greed for money.

Peter: Yep, greed.

Karl: But we need to be comfortable giving people case studies. You know, you find a wallet on the street. What do you do? You’re in a grocery store and there’s a lady standing in the corner of the deli section opening and eating cheese food sticks, like nobody’s business. She’s clearly not going to pay for them. What do you do? Well, imperative principles say, I turn her in because it’s steeling. Now she reveals that she’s pregnant and homeless and she doesn’t want her child to get the same start she did. Now what do you do? Oh, that’s more difficult. Exactly. That’s why we have to get people square on steps in ethical decision making before they’re faced with a tough challenge. Peter: OK. So, what would you do in that situation? You witness this person?

Karl: Oh, I’d buy her some cheese sticks. And, on one hand—ha ha I love it—one one hand, I feel like Tevye in Fiddler. On one hand, the imperative principle is do what is according to absolute moral rules. This is like when judges got sentencing tables and could not deviate from them. And then there’s the utilitarian principle: do what produces the greatest good. And this is very situational. But this is why it’s the art of ethics and not the science of ethics. Remember when I said there were three stages? OK. People have to have developed their adult sense of ethics, so they apply the correct principle at the correct time. They have tools in their toolbox. Case in point. Peter, you’re running a firm and one of your best data entry worker bees—this is one of your best ones—turns out does not have a full four year degree as claimed on her resume when you hired her six years ago. Doesn’t have it. Got a two year degree. She lied on her application form. That is a fireable offense. What do you do?

Peter: I fire her.

Karl: I would say, this is one of your best people, OK. This is where you could also consider sitting her down and saying, “Listen, do you agree what you did was wrong? Are you willing to get the degree starting now and complete what you said you didn’t have? Because her six years of excellent performance and great behavior and being a part of a team, does earn her something, does it not? Peter: Yes, and she lied. So, maybe I need to go back and look at past performance and maybe I was not seeing everything clearly.

Karl: See how tough this is? This is not simple. It also means that we need to be really aggressive in our screening of people on the way in. This circles back to something I said a little while ago. We need to get better at our hiring process. I made my case of what’s going wrong. Well, what can we do to fix it? We can become better managers, we can become better listeners, we can hire for values, and train them in the skills and really be a good ethical example.

Peter: As one of my podcast interviews, Karen Young said, “Hire slow, fire fast.” First thing she asks an applicant is to go look at their core values, mission statement, and vision statement. How do you fit into this environment? How do you fit into these core competencies? And based off of that decision, or based off of that conversation, comes the next. Well either you’re gonna get an application or you’re not a good fit. And she said her hiring practices have gotten 1000% better, flipping it that way versus you don’t see the mission, vision, and core competencies until you’re signing your paper work on day one. Karl: I agree with two things. Well, I agree with one thing and disagree with another. I agree with the higher standards. I disagree that you can ever have anything over 100%, so there. Peter: Well, you never have anything over 100% but—

Karl: Well you just said 1000% percent, smarty pants.

Peter: Did I say a thousand?

Karl: Yes you did. Roll back your tape up and you are busted.

Peter: I’m busted.

Karl: I paid attention in statistics class, clearly…

Peter: Can you spell statistics?

Karl: No.

Peter: OK.

Karl: Ha, ha, ha, ha.

Peter: So, what else are you seeing out there?

Karl: I’m seeing people desperate for simplicity. I’m seeing everybody from the top down hoping that they could have a simple answer for a complex problem. I attended a presentation yesterday by a statistician who said he ground through the basic numbers, and the average human brain is confronted with 32 gigabytes of data a day. In different forms, in different ways, everything from an Excel spreadsheet to how soon your Uber driver is picking you up. Our brains are having to process far more data than they were built for. And there is a hunger for simplicity. And something that anyone can take from our discussion is, I’ve tried to take a couple of complex, difficult things, first off, give you some warning that they’re heading our way. Second, I’ve tried to simplify what they are so you’re not overwhelmed by, “I’m not gonna pay any attention to this because it’s too much going on.” And third, I tried to give you a simple answer. And understand that, to all the people who are listening to this, everyone who is watching you and following you and a part of your life, they are hoping that you can simplify the complex, to clarify the things that are obscure, to make it understandable. And that is the most important human skill going forward. To take complex things and make them understandable.

Peter: OK. Let’s take that point right there. And let’s talk about the accounting profession. You’ve got very complex standards, complex code sections.

Karl: Oh, yeah. The Tax Simplification Act could have been called the Tax Accountant Lifetime Employment Act. Peter: But how do you take, if you’re sitting across, when the accountant says depreciation, the person who’s the non-accountant sits there and thinks, “Well, that’s the value that I lose in my car when I drive it off the new car lot.” And the accountant goes, “No, no, no. It’s a systematic allocation of an asset over time.”

Karl: Meh, meh, meh, meh, meh, meh, meh, meh.

Peter: Aroogah. Karl: Yeah, ruh roh.

Peter: Ruh roh, exactly. This is something I talk about a lot. How do you take complex information and make it simple?

Karl: You do it with careful communication at a careful speed. Notice how I slowed down there? This was an important point and so I altered how I was delivering it so that the person listening would go, “Oh man. He slowed down. This must be important.” If it was really important I’d repeat it. I’d repeat it. It’s a question of really getting good at communication skills and then really understanding both our subject, in this case depreciation, and our audience. What language do they speak? Then you have a hope. For instance, I should explain, I am a licensed insurance agent I work in an insurance agency as an HR person. I am the first person many people have met who has actually read all of the Affordable Care Act, and studied if for years. So…

Peter: And?

Karl: I can explain. I can call up a CFO and leave a voicemail that says, “Hey, if you call me back I can explain the Affordable Care Act in thirty seconds.” Click. And then I get a call back from an unknown number and a voice on the other end says, “Go.” And I give a basic 35,000 foot explanation in twenty-five seconds. And that earns me two minutes. And that earns me a cup of coffee. Because if you truly understand a subject, then you can explain it simply. If you don’t understand a subject, all you’ve got is all the details that you can recite.

Peter: OK. So, for the sake of the audience, go.

Karl: So, insurance works best if everybody is in the pool sharing. The Affordable Care Act does two basic things. It gives, through the exchanges, it gives existing insurance companies ten million new customers, most of whom are healthy. For that the insurance companies have to take them all, no carve outs, no preexisting conditions. And it basically just affects 25% of the population without insurance. And that’s the indigent and poor, with the expansion of Medicaid, the young invincibles who don’t think they need it, and early retirees with a chronic condition too young for Medicare. Beep. Peter: Bingo, you’ve got it guys.

Karl: And then someone will say, “But what about…” OK. We can talk about that, but everything in the whole act fits in the umbrella.

Peter: I will give people your contact information after this, but you did it.

Karl: Oh, sure.

Peter: But you did it, I wasn’t actually timing it.

Karl: That was probably a little long. I threw in a few flourishes because I’m with the famous Peter Margarita.

Peter: Yeah right.

Karl: Yeah, so get really expert, then understand who you’re talking to, then become a good communicator in their language.

Peter: That’s exactly right. And put things in context that everybody understands or the person would understand. I was doing a presentation, and one of the topics that I talked about was consolidation of variable interest entities.

Karl: ZZZZZZZ.

Peter: Exactly, and I had 250 CPAs in the audience. Now they should know this, but it’s a different language, so I found a way to put it in context. I start off my presentation by asking, “How many in this room are married?” And all these hands went up in the air. And then I said, “How many of you have a mother-in-law.” And all these hands are still up in the air. And I said, “I want you to think of your mother-in-law as a variable interest entity, and your spouse wants their mother to move in, consolidate, into your household.” I went from a completely unengaged audience, to an audience that was leaning forward.

Karl: That was a visceral reaction, I am sure.

Peter: Oh, it was great. And I know I have a pretty cool name, but every time I go back to Arizona, I’m the mother-in-law guy, which means I was successful.

Karl: People still remember that story.

Peter: People still remember that story and how I put it into a different context.

Karl: You know, that’s an interesting point. We all need to become better story tellers. I read a Psychology Today article, don’t know how many years ago it was, that made the point that, you judge the intelligence of someone you just met by their ability to select an interesting short story and tell it in an engaging way, in a fairly quick period of time. A conversation is nothing but a chain of short stories being lobbed back and forth like a tennis match and we like people who tell stories in a concise, engaging, pleasant way. So, if you were to circle back to what you asked me a few minutes ago, what does it take to get a better communications job done? I think I should have said storytelling.

Peter: Story telling’s huge, the ability to tell stories versus pummeling your audience with facts and data and numbers. If you can take those facts, those data, those numbers and transform it into some sort of story, the likelihood of someone walking out, retaining that knowledge has dramatically increased.

Karl: Yep, that’s exactly right.

Peter: But it’s hard to do. It’s not easy.

Karl: Hey, if it was easy, simple people would do it.

Peter: Exactly, so I’m watching you, you’re looking like you’re looking for more rainclouds out there.

Karl: No, I’m thinking we hit all the major points I wanted to cover and want to kind of summarize what the most important thing people can do is.

Peter: Alright, let’s have it my friend.

Karl: It’s to really focus on the information that you’re good at and that you really need, instead of all the data smog, the 32 gigabytes. We really have to pay attention to the new ones coming into our organization because if we don’t screen and hire them better, they are going to destroy the conventional structure that you’ve built in a high performing culture. So, we’ve got to pay attention, we’ve got to raise our hiring standards and change how we do things. And then finally screen for, teach, and practice ourselves, higher ethical standards. There was an author, John Bronn, who said, “Ethics is learned by modeling, not by reading a bunch of books over the weekend.”

Peter: Well put.

Karl: And there you go.

Peter: I think that another one, the last part that we were talking about from a takeaway, is try and find ways to become better communicators. You know when, I talk to CPAs, accounting is the language of business. We have to become better translators. We have to translate our business into something that somebody else understands.

Karl: Yeah, that’s exactly right. Where did you learn your communication skills from Peter?

Peter: I grew up in a Greek household. I’m Greek-American. I’ve spent most of my young life and through college and even after college in a restaurant, in customer service. So, I’ve been around a variety of different situations. And I’ve also got the gift of gab and especially the humor from my father who was an entrepreneur, who did not work in an office. So, I’m constantly working on it. It’s something that, some people think they can master—I don’t. I wanna just continue to get better.

Karl: Yeah. I’m always looking for new resources. A just released book, I met with the author yesterday, the book’s title, one word, Everydata. It’s got a website, everydatabook.com. I spent some time with John Johnson, PHD president, CEO, blah, blah, blah—the guy that wrote it. He gets it. And his last chapter on how to communicate complex data is brilliant. A lot of the first chapters everybody will already get but the last chapters on how to fix it are really well put together. Peter: Well that’s great because I will be buying his book here in the very near future and we’ll have the information about the book and the website in the show notes and the transcripts for everybody to find it.

Karl: Actually Peter, you should reach out to him and see if he’d do a podcast. I was impressed with him.

Peter: My friend, we think a lot alike in a lot of ways. And I was thinking the exact same thing that I’m gonna see if I can get him on my podcast.

Karl: Great.

Peter: Well Karl, as always I enjoy our conversations. I can’t begin to thank you enough for parting your wisdom and taking the time to spend with me and my audience. And I know that they’ll walk away with something today that they will begin to apply or begin to think about or begin to recognize. Maybe it will make their life a little easier around the office, around the house. Karl: Hey, I want them to be sustainable. That’s the new term I’m looking for. Not to survive but to sustain.

Peter: To sustain. Well once again, thank you my friend and we’ll talk soon.

Karl: You bet.

Peter: Thank you.

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