00:17:36 · Steve Stagner
[00:17:36] S0: Look, our mission at Crete is we wake up every day to accelerate growth. When I think about that growth, I don't think about it in terms of just revenue growth or EBITDA growth. I think of growth more broadly in terms of human growth and client growth and firm growth. So when I think about growth, I feel like Crete, if you think about us, we're kind of like the Intel inside. So So if you think about a brand, you know, we have all these different firms that we partner with and those are their own unique brands and we honor and preserve those local cultures. Crete is an Intel Inside, kind of like a processor of Dell computer that makes it go faster. And so the metaphor there is very important because the investments that we're making is to help unlock that growth. My most important metric that I think about are what I call the triad which is client success, employee success and firm success. And that's the triangle that I look at. And I look at it as a triangle because if we're getting more clients and growing our and deepening our relationship with them and our satisfaction with them, that's a good thing. If we're growing our individuals and developing them, that's a good thing. And the satisfaction is high, that's a good thing. And then if our financial metrics are, I look at the financial metrics as a lagging indicator with the leading indicator being the client and that the team. And if those two things are moving in a north easterly direction, then I believe the financials will follow. And it always has. In my past, I invested 10,000,000 a year in learning and development for our employees. Two hundred hours per employee in training. It's public knowledge that we did that on selling mattresses, which is the most boring thing you could ever do. And you certainly don't need $10,000,000 worth of mattress training. So what we did is we spent training on learning and development. And what was the net effect? Well, we had a 30% higher store average than the average company that we bought. And so we had the same access to the same customers, the same access to the same market and the same manufacturers but yet we had a 30% higher shore average. So why is that? Well I say it's because we invested in the people.
00:19:55 · Steve Stagner, Miguel Armaza
And I think that what's going happen here is in this industry is we have an opportunity to really invest in our people and the technology and the combination is going to be what really helps unlock the growth, which is our mission. [00:20:10] S1: Speaking of customers, which is one of the three legs of that stool you just mentioned, are customers also demanding for better tech? You just mentioned you as an example. You work with one of the top 10 accounting firms and you still demand for better tech because you know it's out there, but at the same time, you're the CEO of a company that is injecting AI across your company. Right? So you're right there at the tip of the spear. Do you find that the expectations of customers have also shifted? Yeah, I think
00:20:47 · Steve Stagner
[00:20:47] S0: it would be at our peril to not shift with the customer. So there was some research that I had seen, and I don't have the exact quote right here, but it was roughly 77% of the clients want a greater suite of services and 80% would switch for best in class technology. So if you break it down to the client, like as a client, how amazing would it be if I knew the status of my tax return all year and could see some technology and log on and to see where like the Domino's pizza tracker, but it's the tracker of my tax return and what's missing, what's in the oven and here's what's missing. But then on top of that, some dashboards for either business or personal where I could see kind of what's going on with my money and other things that are happening. We're working with the firm directly on client dashboards and the clients are loving it. And so what does that do for you, Miguel? That gives you a stickier relationship with the client, because the client now values the information and the intel and then what you're doing from that. And if you just look across the continuum of everything, like take, I mentioned Domino's. Domino's is really winning the pizza war based on technology. Starbucks is winning the coffee war based on technology because of the mobile app. So that's in the consumer space. So consumers always want more information, more transparency, they want speed, and they want accuracy. And so the more you can put that in front of them, that's gonna be who wins. I don't think it's a zero sum game. I think that, you know, there's a lot of really great leaders in this space and thought leaders and millions and millions and millions of dollars being invested. But I think, you know, for us and our firms, we really are going to go heavy and invest in technology that's going to help the client.
00:22:39 · Miguel Armaza
[00:22:39] S1: Speaking of the second leg of that stool, and that's your people. Yes. Like technology comes and goes, but you have some core principles about managing a workforce, motivating your team. Have you found your principles, your beliefs to have kind of been pretty steady throughout your career or have some of those things changed specifically about managing a workforce?
00:23:09 · Steve Stagner
[00:23:09] S0: Yeah, I mean, over my career, I believe in this philosophy of there's three reasons why humans go to work. And if you engineer your value proposition as a leader around these three reasons, then you gain the holy grail of commitment, not compliance. And there's a difference. Commitment is a choice people make and compliance is what you pay for. And so you can't like force commitment like, Hey Miguel, I need you to be more committed at work. I can force compliance, I need you to show up on time. But to force commitment, that's a choice people make. So how do you influence that choice? And so the three reasons are individual growth, cause and then reward and recognition. So if you picture a Venn diagram, what we focus on is individual growth and over my career, this hasn't changed. If you invest in people, it's an aid in us, we all wanna grow. You know people that have probably left companies to go work for someone else and make less money and when you ask them why they say, well, I wasn't growing, I wasn't being challenged. Like we as human beings want to grow. So if you put more challenge in front of people and more education, then what happens is they get more excited because then they get to apply that growth and it's really amazing. So you have to, you can't put the acorn in the ground and say, grow dammit, but what you can do is you can put the soil, the sunlight and you can provide the environment for growth and those who really wanna grow are gonna really grow. The second reason is cause that it can't just be about EBITDA, like EBITDA, EBITDA, EBITDA for the company doesn't matter as much to the common team member. So why are we doing this? And so improving lives of the people around us and improving the lives of our clients And if we can continue to evidence the things that we're doing to improve our world, then I think what happens is people feel more connected to the cause and more connected to their company and more proud of their company. They'll wear the shirts with the logos, they'll go out into town and they'll talk about it. And so the more we can do in the communities and help that'd be great. And then reward and recognition, we obviously need to pay competitively, but it's beyond compensation. It's also about recognizing what people are doing. So my view is those three are constant over time.
00:25:30 · Steve Stagner, Miguel Armaza
What's probably changed is what the generations value in terms of like percentages, like what they value. But I will say, for example, cause has become a greater component than maybe twenty five years ago when it was maybe just more comp, know, maybe more reward. Now that this newer generation really wants to believe that they work for a company that's making a big difference. But at the same time, my approach is we must do all three, we must invest in all three, and we must connect the dots with the team and the output is lower turnover, less people leave, and then higher recruiting, better retention, higher recruiting because people want to enroll and enlist and engage in this journey that we're taking because this journey sounds exciting. And because I can grow, I'm changing the world and I'm gonna be paid and people care. If you hit that sweet spot, you unlock it. It's amazing. So that's what we're trying to do. [00:26:26] S1: And Steve, one of the things that people are talking about in technology is just the fact that some of these AI first companies are growing faster. You see a similar effect post implementation of your tech stack or is it too early to tell?