September 2, 2025 • 29 mins
On today’s episode, Founder of Integrity Square and HALO Talks host Pete Moore sits down with longtime friend and Talent Optimizer Group founder, Tom Johnston. They dive deep into the power of talent optimization and why having the right people in the right seats is the ultimate game-changer for HALO (Health, Active Lifestyle, Outdoors) sector businesses. Tom unpacks how health clubs can move beyond traditional hiring practices, bring rigor to their people strategy, and use data-driven insights—like employee engagement surveys and behavioral assessments—to build winning, high-performing teams.
From real-world case studies with leaders like Club 16’s Trevor Linden to practical advice on boosting employee retention and preparing your business for sale, this episode is packed with actionable strategies to help club owners turn their workforce into a true differentiator. Whether you’re scaling up, planning an exit, or just want more engaged employees and less churn, you’ll get an inside look at the role of compassionate leadership and systematic talent development.
On bridging the gap between 'business strategy' and 'people strategy,' Johnston states, "Most organizations have a business strategy. They know what results they're looking to achieve, but they don't necessarily have a people strategy. There's a discipline around how we go about hiring the right people for the right role, and how we go about retaining talent."
Key themes discussed
- Importance of talent optimization in business strategy.
- Building and retaining a high-performing team.
- Role of data and surveys in employee engagement.
- Value of organizational transparency and action.
- Impact of employee retention on company valuation.
- Process of talent acquisition and onboarding.
- Significance of compassionate leadership for team success.
A few key takeaways:
1. Talent Optimization Is a Discipline, Not a Buzzword: Tom emphasizes that talent optimization goes beyond simple recruiting—it’s about aligning "business strategy" with a well-thought-out "people strategy." This means intentionally hiring, retaining, and developing employees to match organizational goals, much like building a high-performing sports team.
2. Data-Driven Approaches Improve Employee Engagement: Tom discusses using tools like the Predictive Index to survey and assess team fit, manager-employee relationships, and overall engagement. These surveys, which are anonymous and concise, provide actionable insights leaders can use to improve employee satisfaction and retention.
3. Cultural Fit and Leadership Matter Just as Much as Skills: It’s not just about a person’s resume (“the briefcase”); hiring should prioritize behavioral fit (“the head”) and passion or values alignment (“the heart.”) Compassionate leadership and a focus on psychological safety foster a winning, loyal team.
4. Optimizing Talent Directly Impacts the Bottom Line: Tom shares case studies (like Club 16) illustrating how improved organizational structure and engagement have led to multi-million dollar gains. Reducing turnover, maximizing existing payroll, and scalable talent systems translate into real, measurable financial value—especially important when positioning a company for sale.
5. Winning Cultures Are Built on Transparency and Action: Both Pete and Tom stress the need for leaders to be transparent with teams—sharing survey results, explaining the “why” behind changes, and taking meaningful action. This not only helps employees feel seen and valued, but also drives consistent improvement and business success.
Resources:
- Tom Johnston: https://www.linkedin.com/in/thomassjohnston
- Talent Optimizer Group: https://www.talentoptimizergroup.com
- Club 16 Case Study: https://talentoptimizergroup.com/case-study
- Integrity Square: https://www.integritysq.com
- Prospect Wizard: https://www.theprospectwizard.com
- Promotion Vault: http://www.promotionvault.com
- HigherDose: http://www.higherdose.com
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
I am super excited to announce that we now have a formal
partnership with the Prospect Wizard. And when I say
wizard, I mean wizard. Obviously you have a website.
This allows you to convert your website traffic visitors
directly into leads. It's not just another chatbot and
it's not AI but it allows a visitor to call, text or leave a
(00:22):
voicemail immediately. Goes to you, your sales team or anyone else in the
club instantly. MIT shows a study that if you contact
the league within 10 minutes, chance of them converting goes up nine
times that of the average. We got the Atlanta clubs
on it. Vita Fitness, Gold's Gym, Mountainside
City Fitness, Philly College Park. Become one
(00:44):
of the next Halo companies to deploy the Wizard.
It's easy to use. Go to the prospectwizard.com
get a free 30 day trial. Talk to my boy Dave Gallen. He will get
you all set up and let the leads flow based on the
Wizard. Go get him.
This is people on Halo Talks NYC have the pleasure of bringing a
(01:07):
friend of mine for a short 20 years coming in from outside of
Boulder, Colorado, Talent Optimizer Group. Mr.
Optimizer, Tom Johnston, welcome back to the show. Thanks Pete.
It's great to be back. Thanks for having me back. Awesome. Yeah, we're on, we're
on podcast number 600 around that. So it's good to have
you back around the horn again here. As a baseball term,
(01:29):
given that we are now past opening day, which we
thankful for the KL family for giving us
those tickets. I'll send you the fourth row legend stadium view
and my, my picture with Boogie in the hoodie from the
Bronx. So. So Tom, give us an update.
You've obviously been giving us a go on having the
(01:52):
industry, the Halo sector at large, understanding that talent matters.
Talent is a differentiator. And instead of
thinking that you can just recruit from ZipRecruiter and hope
that you create long term employees, there might be
a better way to challenge yourself and actually understand the
talent that you could get up front and figure out what positions you're
(02:15):
trying to fill and what types of people if
you're going to have a winning team. Just like in sports. Exactly. So
far away. Yeah, you know, so talent
optimization, I think first of all is. Let's, let's talk about what
talent optimization is. It's actually a discipline, Pete, where
we align a business strategy. Most organizations have a business
(02:37):
strategy. They know what results they're looking to achieve, but
in between they don't necessarily have a people strategy. So
there's a discipline around how do we go about hiring the right people for the
right role, how do we go about retaining talent? How do we ensure we've got
the right people in the right seats on the team? And then, and then
we also look at diagnosing the organization to really find out
(02:59):
what taking the temperature within the organization in terms of what
are the employees thinking. Feeling like to understand the sentiments,
but also let's start to quantify how are we doing as an organization.
So we put some, we really put some data and some rigor behind the
entire props process of a people strategy,
you know. And what would you say the percentage of
(03:22):
companies in our industry were doing this three
years ago before you started? You know, Pete,
it's a really small percentage. And most times when I start to
have a conversation with a leader, you know, some of
the conversations begin with, hey, you know, you're a CEO,
you're, you're a founder and you're building
(03:44):
this brand. And in today's day and age, the reality is
most CEOs look like you and me, but the
reality is the workforce doesn't look like you and me. So it's really a
matter of taking an approach to, to building
a talent pool and building an employer brand. And I
would say, Pete, the majority of organizations within the halo
(04:06):
sector, and I think outside of the halo sector, they don't necessarily
just look at building a, an employer brand
and understanding how they're attracting and
retaining talent. You know, wrote this book several
years ago that your face is, your namesake
is in and time to win again. There we go. Thank you, bro.
(04:29):
Appreciate that. Prop.
Yeah, know when you think about a general manager and, and all the money that
now is flowing into sports teams at, at all levels
and you think about the nil, you know, where you're getting paid now,
you know, to produce and, and I was just watching this, I
don't know if you watched it, but on Vice Hulu, there's a,
(04:52):
there's a show on Rick Patino and, and Cal
Party, you know, talking about nil. And you know,
Patino's like, yeah, Kedari Mitchell, like we
hired him because Seton hall couldn't pay him
what we could. So you know, the idea of like a student
athlete, you know, is basically non existent anymore as like a
(05:14):
term to be used. He's like, yeah, better hit those shots. And we're paying him
like he's an employee to St. John's
basketball athletic program. And when you
think of the talent and the scouting and the recruiting,
you know, if you layered that on into a health Club. And you know, you
take like Club 16 with, you know, you know, Trevor and you say,
(05:35):
hey, that, that guy's a world class hockey player,
you know, who's now trying to build a world class regional chain in Vancouver.
You know, how does he kind of look through a lens with you
about if I have the best players, I probably have the highest chance of,
you know, winning a Stanley cup, you know, in, in the health club industry
in Western Canada. So how did you kind of get him and his
(05:58):
team with Carl to say, hey look, this is something that you need to
invest in and it actually might be the highest priority thing that you have to
do where in the past it was like, yeah, we hire people, we
get people to work here and then they leave, then they come back, then they
leave. Right. And we're constantly like filling that funnel.
Yeah, I think the most. You know, let me just start here and say
(06:20):
that you're speaking about Trevor Lyndon and Club 16.
She's fit in Vancouver BC. And
it's important for me to recognize that the conversation and share with you
with your audience that the conversation with Club 16 actually
began with myself and Chuck Lawson. And Chuck was the co
founder in many ways the visionary behind Club
(06:43):
16. And unfortunately Chuck passed away last year.
But I'll take you back to our initial conversation that we had.
And Chuck and I, we had a conversation at the
Club Industry CEO Summit a few years ago and Chuck was,
Chuck heard about my work. Somebody up on the stage was actually a
client and Chuck came out into the lobby and he said, hey, where's
(07:06):
this guy that he was talking about? Like I'm the guy. And so
we struck up a conversation that took several months before.
And I say this, Pete, you, I think you use the word is
convincing. Right? Convincing. Chuck and Chuck didn't need
convincing. And the work that I do is, I often say this is
about attraction, not promotion. So I can't convince you
(07:28):
necessarily to do the work. You need to be willing to want to do the
work. And Chuck was a learner and Chuck always was looking at
opportunities and how he went about improving his business. So
introducing my work to then introduce
me to Trevor and Carl. You know, we
really started with, hey, let's, let's take the pulse of the organization and
(07:50):
let's survey the organization. Let's understand where you are
today. And really instead of us trying to figure this
out in terms of how do we increase employee engagement, how do we hire the
right people, do we have the right people in the right seats, do we need
to Potentially restructure the organization. All of those things came out in an
employee experience survey. But I will say this. You know, Chuck
(08:12):
and I, we had several conversations around
facilitating an employee experience survey. And what I ensured
was, is that Chuck would agree to be 100% transparent
with the results, with the entire organization. And, and he agreed to take
action. And then the action that we were taking, we
explained to the team what we were doing and it was super important why we
(08:34):
were doing what we were doing. People want to understand the why
and we shared the why. And through this process over the
last couple of years, one of the things that Trevor will
say is talk about a humble leader. Trevor
will often say, I don't necessarily have all the answers. So what we do
is we really pose the questions to the team and that's
(08:57):
also how we help the team to feel seen, feel heard
and feel valued.
This is Pete Moore. I want to let you in on a little secret. There's
this company called promotion Vault. And what they do is they give out rewards
from retailers that allow you to incentivize your
members without having to do zero down and one month free
(09:20):
or giving away shakes or giving away T shirts. What you want to
do is build a rewards program that lasts, that people
value and that doesn't discount your own products and services.
So here's the deal. There's something called Rewards Vault. The Rewards
vault is going to allow a member to set up their own profile.
They are going to answer questions, you are going to get those answers. You're going
(09:43):
to be able to target those members and you're going to reward them inside
your club, inside your spa, and outside of the club and
outside of the spa to get them to become loyal, to get them
to pay their monthly dues and to be rewarded
properly for the actions. A lot of companies are cutting back on rewards.
You shouldn't be Promotion Vault. Your answer, trust me, this is
(10:05):
real.
Give me some examples of how you go about that fact finding
mission. What's the type of questions without giving us like the whole secret
sauce of the playbook, but like what's the survey that that allows
you to understand what's going on?
Yeah. And the fact that you don't have to give somebody like here's like 200
(10:28):
questions like, you know, just type of, you know, in depth,
like algorithms and everything else. Like I need like 10
questions or 5 things like give me a sense of what's going on. Yeah, great
question. So. So first of all, I utilize a tool called
the predictive IND and So within the predictive
index platform, which is, which is,
(10:50):
you know, there is a, you know, the whole idea of predictive analytics
is built into the predictive index. So we're using
AI and so I often say I've been using AI for years. But
the questions are really around understanding
how an individual fits to their job. What is
their fit with their manager, which is super, super important. That
(11:12):
relationship, that one on one relationship with your manager is the important
relationship that we have at work. It's understanding fit to the team,
understanding fit to the organization, and then also
understanding how people are feeling about their total engagement. And
we are able to measure each one of those, those factors.
And then within the platform it also is making suggestions,
(11:34):
recommendations that we can take in order to increase
engagement over time. And of course we survey, we take action
and then we come back and survey again. And you know, what we
see is through a case study, we've actually been able
to prove and show that we've increased our employee
engagement across every one of those categories over
(11:56):
the last year. Gotcha. And by the
way, Pete, it's 50 questions. Sorry, it takes about less
than 15 minutes to complete and it's completely anonymous.
So to kind of hearken or pull this into what
we do. You know, everyone here on the show knows that, you know, our, our
day job is, you know, we do mergers and acquisitions, help people buy and sell
(12:20):
companies. And I had a conversation with one of our
clients the other day and we're trying to sell his business right now we've got
a term sheet at, at five and a half times cash flow, which is basically
for a, a multi unit chain that doesn't have new
locations coming to market. You know, it's a strategic
sale, like five and a half times. And the guy says to me,
(12:42):
he's like, how do you value the fact that I have like
the best team probably like within 300
miles of my two locations? How do I get,
how is someone paying for my team? And my
answer was, you know, they're not, you know, they're paying for your cash
flow, which is generated by your team. So it's kind of like
(13:04):
embedded in the multiple at five and a half
times on what your team's generating. He's like, well, I don't know if that's
really fair. Right. Because I built this team over 10 years
and I've got people here that started with me from day one that
I will put up against anyone in the industry. So how
would you respond to that? Or do you think going
(13:26):
forward There might be a narrative that I could use
that says, yeah, these clubs, you know, if these clubs were,
if these clubs were run by a different team
that you would have to replace, you should pay four and a half times for
it. Or I'm bringing you a team that actually could go from 2 to 10
and here's their background and interview them, do pull predictive index on
(13:48):
them, show me where they rank as like professionals and you got to pay
me six times or six and a half times. How would you help me respond
to that? Yeah, part of how I would respond is help me
understand your process. I want to understand your
process for acquiring and retaining the talent that you have.
What does that look like and how, how
(14:10):
scalable is that? Right. Do I have a system in place
that I can then prove, if you will, and show that.
Here's the playbook, right? Here's my talent acquisition here and
retention playbook. And here's how we go about build,
here's how we've gone about building this high performance culture.
And what I would, what I would want to do is I'd want to actually
(14:32):
be able to exhib at that system and I'd want to also have the data
to, to show to a potential suitor
investor to say, okay, here's how we do this, right? Here's how we, here's
how we operate our business. And oftentimes the playbook that may be
missing on the shelf, if you will, is that, that
playbook on how we've gone about building this high performance culture
(14:55):
and then theory then how we're going to go about the ability to scale and
replicate this. Pete, so in the article that came
out there was kind of your case study that was, you know, put
out across social back in December, maybe November,
saying like, hey, we help Club 16, you know, Saver
generate, you know, an extra $2 million, you know, in actual
(15:17):
hard, you know, income statement amounts,
right? If that was the case with my deal, right, that's an extra $2
million times 5.5 is $11 million, which
is double the size of the actual purchase price.
So is there an argument or is there an idea here that as we're
talking to say, if you're going to kind of gear up your
(15:40):
company for sale, and I get this all the time saying like, hey, I don't
have a succession plan. I'd like to optimize what I've done
and generate material wealth for myself. And I'm not
going to build this out, not taking in private equity. Like I've done. Which is
a fair thing to say. You know, if you're an owner, been doing this 25
years, you know, you should get rewarded for Guy Brockway, man.
(16:01):
You say Peter Brockway. Look, I'm going to build value and when I want to
sell, someone's going to pay me for the value that I have created. That was
his private equity playbook. Is there an argument
or is there like an intermixing of if you're going to go
sell your company, why don't you take a year. I'm going to tell you XYZ
things you need to do with your business. And what I want you to do
(16:23):
is I also want you to plug in Talent Optimizer Group for this segment
because it's going to generate X amount of potential return on investment
on its own. And also whatever that investment return is,
multiply by 5, 5.5 or 6 and do the math
on your own to figure out, hey, it's going to be worth an extra million.
2,5 in purchase price, right? Yeah.
(16:44):
Well, here's the. So. So I love the fact that, you know, you wear that
hat, Pete, because Chuck was always about having his
finger on the pulse of the EBITDA of his organization. Like he, he
knew that number because he was always thinking about it in terms of what's the
value of my, my company. And
through this process, what we look at, and oftentimes what I'll say
(17:07):
is, look, if you're looking at your P and L, oftentimes the
greatest expense, the biggest expense you have is payroll. So if we think
about how do we go about instead of necessarily cutting payroll,
then how do we actually maximize the payroll that we have, if you
will, and how do we make sure that we're not. We're looking
at the hidden cost of employee turnover costs. So we
(17:29):
can actually calculate what that cost is. If we look at your
turnover, your retention rate and we look at your turnover, we can put a
number on that. So if we reduce the employee
attrition and we know that we're going to, we're going to save you dollars. But
also think about the opportunity cost that we have that
we get out of this spiral of just constantly trying to,
(17:51):
you know, we're churning employees and we're constantly looking at replacing
constant looking at how do we go about training employees.
I think that's the other piece, Pete, is yes, taking that pause
and looking at it that the, the, you know, what's our
hiring process look like, but then also understanding what does our onboarding process
look like, and then how are we going about managing performance? So
(18:13):
putting the systems in place to really look at not
only talent, talent acquisition, but talent development.
And then you speak to things like succession planning. So it's.
Succession planning also means that we have a plan
in place to train and develop the talent that we have in place
so that we can position them for that next role.
(18:39):
This is Pete Moore. Here's the last tip for you of the podcast.
We are partnered up with a company called Higherdose.
Higherdose.com they are the leader in
workout recovery products. Infrared technology,
LED light masks, neck enhancers, and
other products such as PEMF mats and sauna
(19:01):
blankets. If you have not gotten on the workout
recovery train yet, your time and your stop
is now. You got to get these products in there before these workout
recovery and spas end up saturating your market.
Having your members walk out of the club and going into one of their locations
for 200 bucks per month, where they're paying 39 to
(19:22):
you. Let's become an expert in workout recovery. If we
are already an authority in workouts, higher dose,
check it out. There's a wholesale code and we look
forward to helping you augment your products and services
to meet the demands of your members. And hey, let's get people
happy, healthy and sweating. And the recovery should be
(19:45):
just as good as the workout.
You know, I'm all for one for coming up with new acronyms.
Feel like that could potentially be my day job. But there's like a return
on talent or like a return on employees. Instead of like, ROE is like
return on equities. Like, it's really return on employees. No one ever
(20:05):
asked you that question except in the guise of like, how many employees do
you have? And what's your. What's your retention? Or
like average years of service. And I hearken back
to this place that I used to go to. It's called Ponchos
Mexican Restaurant on a quarter of Rosecrans and Highland
in Manhattan beach, okay? And it's a great, great
(20:28):
Mexican restaurant. Every employee has their name tag, okay?
And there's not one employee that's been there less than 20 years,
okay? And I was thinking to myself, like, they wear that
with pride. They don't. They probably don't have a LinkedIn account, right? But
they never update their resume, right? Because they're there and
they've been trained and they're part of a family. But this family is
(20:50):
a high performance family. There's no one that's like a B
player, that works at this Mexican restaurant and it'll hopefully be there forever.
So when you take a look at, you know, indicating
to your potential buyer, like, here's how long these people
have been here. And one, I pay them well, I treat them well.
You know, they perform. And then the other thing is that the guy from
(21:13):
Nvidia always says, like, I don't really fire employees. I just, I just
make them better and I'm going to stick with them and they're going to stick
with me. And if I hire them right, then I know that they have the
ability to be amazing. Which, which kind of dovetail in
dovetails into like, if you get in with, with talent
optimizer group, give you a little commercial right now there's like an
(21:35):
unintended consequence of a commercial for you. Like, if I help you
hire the right people, you basically are going to have into
perpetuity to an extent, you know, the ability to grow
faster than you ever could because you made the right decision. And it's
not from ZipRecruiter and it's not some fucking. Indeed, it's not from
Craigslist, but, but it's actually like, figure out the players that we want on this
(21:57):
team. Let's go and recruit players, right, that are franchise
players. Let's pay them well. And actually if I pay somebody really
well, I think they probably do the job of five people. Yeah, correct,
Pete. So thanks for the commercial, Pete. No problem. Happy to do it
unintended. You know, I love you, but like this just came out. Thank you. I
love you too, brother. Yeah, I think, I think the, you
(22:18):
know, the comment that I'll make is, is the
example of Club 16 is when we, when we facilitate
Chuck, Chuck knew he needed to make some changes, he needed to make some organizational
structure changes, but he didn't know exactly what he needed to do. And so
when we facilitated the employee experience survey, it was very, very clear
that the team, the employees were looking for
(22:40):
greater leadership and at the, at the club level.
And so we went about restructuring the organization, but we didn't, we looked
at it through the lens of, hey, let's take a whiteboard and let's
look at what are the position that we need in this
organization. And then we were able to take the, the existing
team looking at their behavioral profiles right through the, through
(23:02):
the behavioral assessment that we've had facilitated. And we were able to position
those people into this specific role. So it's
important, Pete, that I want to point this out is when
we hire and I'll Give you a quick lesson on
talent optimization. When we're looking at the hiring component, we talk
about hiring for the head, the heart in a briefcase. Right? The briefcase is
(23:24):
typically what we would look at. The resume, the experience. Right. The cv,
if you will. The heart is, tell me what you're passionate
about. How does this person potentially align with our culture, our
values? Right. Are they going to be aligned with our mission? The other thing I
talk about is empathy or compassion.
Is this person going to be a compassionate leader?
(23:46):
And if they look at the head,
the head is how are they wired for work? And that's really
where we start to look at the behavioral assessment as they fit to a
particular job target. So think about it from a sales. Sales role.
Simple is, am I looking for a hunter? Am I looking for a farmer?
And so they're very, very different behaviors that I might be looking for, but
(24:09):
I'm looking for a salesperson. So if we can help to determine
that, we look at that resume, that briefcase, if you
will, and then we can kind of fit that person to the job. And I'll
say this too, Pete. It's never red light, green light, meaning the
behavioral assessment, because anybody can flex into any job.
But then we also want to be able to provide coaching tools. Right.
(24:31):
And. And so we're able to provide those types of tools as well through the
platform. I would like to be considered a compassionate
hunter, if you can give me
that, because I'm trying to find deals, but I'm also always
understanding what the seller needs. And we just worked
on a deal, and it's. It's close to closing.
(24:53):
I said to the private equity guy, because I became friends with him as a
buyer, I'm like, you have to be more empathetic to what's going on here. Like,
this guy ran his business through Covid. He's got personal debt
on the business. He's got obligations. We have a fair deal with
you, but when you deliver something, like, you have to deliver it
more delicately, and you have to put yourself in the shoes of. Of who
(25:15):
you're buying a business from. And that credibility and
that compassion gets you over the finish line. So
not only deals, not only business on your side of, like, hey, let's build an
awesome team. But if you're doing a deal, you kind of have to overlay a
lot of the definitions and, like, the philosophy that
you're putting out there and make sure people know, like,
(25:37):
what they're defined as and why they were hired. Yeah, well, you know,
the compassionate part, Pete, is You know,
compassion is defined as empathy, empathy
plus action, Right. So it's really understanding meeting the person
where they are and then taking action. And the action that you take
needs to, you know, help to help to meet that person
(25:59):
where they are. Meaning that the action that you're taking needs to be meaningful. And
if we're able to do that, then we become more likely to be a
compassionate leader. And so becoming a compassionate leader is
actually something that I help organizations and, and I
teach that to organizations because compassion can be
scaled. And interestingly enough, when we use
(26:21):
the tool like the predictive index, you know, when we take that behavioral
assessment, what we talk about is it creates self awareness at speed
and scale. So the first thing I want to understand is
myself and how do I show up as a leader? So if I'm the deal
maker, I need to really understand how I'm wired and
then understanding how I'm wired. But also that's going to help me to understand how
(26:42):
I might be perceived by whom, whomever I'm working with. Right.
The, the team that I'm working with, that interaction that I'm having, and
that's going to give me the potential opportunity to adjust
my approach. Right. And if I really, if I also had
under, and if I understand the team that I'm potentially working with and,
and the group that I'm acquiring and I had those folks take that
(27:04):
behavioral assessment, that's also going to help me understand do I have the
right people in the right roles today and then being able to. The last thing
I'll say about this, Pete, is create the psychological safety for people.
Right. Go ahead, Pete. No, and I would say just for the
audience, when we use the word compassionate, we're not talking about
allowing losses to happen. We're talking about winning with
(27:27):
compassion, with empathy and with understanding, but
also saying, like, this is how we're going to run the culture and this is
going to be a winning team. So compassion is not like an angel investor
saying yes to everything or letting things, you know, go by the wayside. Like, we're
going to perform, we're going to execute, we're going to listen, we're going to be
compassionate, but we're going to win. Yeah. I mean, there's data out there, Pete,
(27:49):
around compassionate leadership and how you actually will
outperform over time. Whether you look at it through compassionate leadership,
through, you know, conscious capitalism. Like there's, there's plenty
of data and there's plenty of case studies out there on
organizations that are winning and they're and they're consistently winning
with. With that approach as a compassionate leader. Yeah. So
(28:11):
look, man, great to talk to you again. We're going to keep this to 25
minutes, which exactly what we hit just now for our people that like to run
or walk their dog for 25 minutes. So you've just been
optimized talent wise. Talk to you soon, brother.
Thanks, man.
(28:33):
Sam.
I am super excited to announce that we now have a formal
partnership with the Prospect Wizard. And when I say
wizard, I mean wizard. Obviously you have a website.
This allows you to convert your website traffic visitors
directly into leads. It's not just another chatbot and
it's not AI but it allows a visitor to call, text or leave a
(00:22):
voicemail immediately. Goes to you, your sales team or anyone else in the
club instantly. MIT shows a study that if you contact
the league within 10 minutes, chance of them converting goes up nine
times that of the average. We got the Atlanta clubs
on it. Vita Fitness, Gold's Gym, Mountainside
City Fitness, Philly College Park. Become one
(00:44):
of the next Halo companies to deploy the Wizard.
It's easy to use. Go to the prospectwizard.com
get a free 30 day trial. Talk to my boy Dave Gallen. He will get
you all set up and let the leads flow based on the
Wizard. Go get him.
This is people on Halo Talks NYC have the pleasure of bringing a
(01:07):
friend of mine for a short 20 years coming in from outside of
Boulder, Colorado, Talent Optimizer Group. Mr.
Optimizer, Tom Johnston, welcome back to the show. Thanks Pete.
It's great to be back. Thanks for having me back. Awesome. Yeah, we're on, we're
on podcast number 600 around that. So it's good to have
you back around the horn again here. As a baseball term,
(01:29):
given that we are now past opening day, which we
thankful for the KL family for giving us
those tickets. I'll send you the fourth row legend stadium view
and my, my picture with Boogie in the hoodie from the
Bronx. So. So Tom, give us an update.
You've obviously been giving us a go on having the
(01:52):
industry, the Halo sector at large, understanding that talent matters.
Talent is a differentiator. And instead of
thinking that you can just recruit from ZipRecruiter and hope
that you create long term employees, there might be
a better way to challenge yourself and actually understand the
talent that you could get up front and figure out what positions you're
(02:15):
trying to fill and what types of people if
you're going to have a winning team. Just like in sports. Exactly. So
far away. Yeah, you know, so talent
optimization, I think first of all is. Let's, let's talk about what
talent optimization is. It's actually a discipline, Pete, where
we align a business strategy. Most organizations have a business
(02:37):
strategy. They know what results they're looking to achieve, but
in between they don't necessarily have a people strategy. So
there's a discipline around how do we go about hiring the right people for the
right role, how do we go about retaining talent? How do we ensure we've got
the right people in the right seats on the team? And then, and then
we also look at diagnosing the organization to really find out
(02:59):
what taking the temperature within the organization in terms of what
are the employees thinking. Feeling like to understand the sentiments,
but also let's start to quantify how are we doing as an organization.
So we put some, we really put some data and some rigor behind the
entire props process of a people strategy,
you know. And what would you say the percentage of
(03:22):
companies in our industry were doing this three
years ago before you started? You know, Pete,
it's a really small percentage. And most times when I start to
have a conversation with a leader, you know, some of
the conversations begin with, hey, you know, you're a CEO,
you're, you're a founder and you're building
(03:44):
this brand. And in today's day and age, the reality is
most CEOs look like you and me, but the
reality is the workforce doesn't look like you and me. So it's really a
matter of taking an approach to, to building
a talent pool and building an employer brand. And I
would say, Pete, the majority of organizations within the halo
(04:06):
sector, and I think outside of the halo sector, they don't necessarily
just look at building a, an employer brand
and understanding how they're attracting and
retaining talent. You know, wrote this book several
years ago that your face is, your namesake
is in and time to win again. There we go. Thank you, bro.
(04:29):
Appreciate that. Prop.
Yeah, know when you think about a general manager and, and all the money that
now is flowing into sports teams at, at all levels
and you think about the nil, you know, where you're getting paid now,
you know, to produce and, and I was just watching this, I
don't know if you watched it, but on Vice Hulu, there's a,
(04:52):
there's a show on Rick Patino and, and Cal
Party, you know, talking about nil. And you know,
Patino's like, yeah, Kedari Mitchell, like we
hired him because Seton hall couldn't pay him
what we could. So you know, the idea of like a student
athlete, you know, is basically non existent anymore as like a
(05:14):
term to be used. He's like, yeah, better hit those shots. And we're paying him
like he's an employee to St. John's
basketball athletic program. And when you
think of the talent and the scouting and the recruiting,
you know, if you layered that on into a health Club. And you know, you
take like Club 16 with, you know, you know, Trevor and you say,
(05:35):
hey, that, that guy's a world class hockey player,
you know, who's now trying to build a world class regional chain in Vancouver.
You know, how does he kind of look through a lens with you
about if I have the best players, I probably have the highest chance of,
you know, winning a Stanley cup, you know, in, in the health club industry
in Western Canada. So how did you kind of get him and his
(05:58):
team with Carl to say, hey look, this is something that you need to
invest in and it actually might be the highest priority thing that you have to
do where in the past it was like, yeah, we hire people, we
get people to work here and then they leave, then they come back, then they
leave. Right. And we're constantly like filling that funnel.
Yeah, I think the most. You know, let me just start here and say
(06:20):
that you're speaking about Trevor Lyndon and Club 16.
She's fit in Vancouver BC. And
it's important for me to recognize that the conversation and share with you
with your audience that the conversation with Club 16 actually
began with myself and Chuck Lawson. And Chuck was the co
founder in many ways the visionary behind Club
(06:43):
16. And unfortunately Chuck passed away last year.
But I'll take you back to our initial conversation that we had.
And Chuck and I, we had a conversation at the
Club Industry CEO Summit a few years ago and Chuck was,
Chuck heard about my work. Somebody up on the stage was actually a
client and Chuck came out into the lobby and he said, hey, where's
(07:06):
this guy that he was talking about? Like I'm the guy. And so
we struck up a conversation that took several months before.
And I say this, Pete, you, I think you use the word is
convincing. Right? Convincing. Chuck and Chuck didn't need
convincing. And the work that I do is, I often say this is
about attraction, not promotion. So I can't convince you
(07:28):
necessarily to do the work. You need to be willing to want to do the
work. And Chuck was a learner and Chuck always was looking at
opportunities and how he went about improving his business. So
introducing my work to then introduce
me to Trevor and Carl. You know, we
really started with, hey, let's, let's take the pulse of the organization and
(07:50):
let's survey the organization. Let's understand where you are
today. And really instead of us trying to figure this
out in terms of how do we increase employee engagement, how do we hire the
right people, do we have the right people in the right seats, do we need
to Potentially restructure the organization. All of those things came out in an
employee experience survey. But I will say this. You know, Chuck
(08:12):
and I, we had several conversations around
facilitating an employee experience survey. And what I ensured
was, is that Chuck would agree to be 100% transparent
with the results, with the entire organization. And, and he agreed to take
action. And then the action that we were taking, we
explained to the team what we were doing and it was super important why we
(08:34):
were doing what we were doing. People want to understand the why
and we shared the why. And through this process over the
last couple of years, one of the things that Trevor will
say is talk about a humble leader. Trevor
will often say, I don't necessarily have all the answers. So what we do
is we really pose the questions to the team and that's
(08:57):
also how we help the team to feel seen, feel heard
and feel valued.
This is Pete Moore. I want to let you in on a little secret. There's
this company called promotion Vault. And what they do is they give out rewards
from retailers that allow you to incentivize your
members without having to do zero down and one month free
(09:20):
or giving away shakes or giving away T shirts. What you want to
do is build a rewards program that lasts, that people
value and that doesn't discount your own products and services.
So here's the deal. There's something called Rewards Vault. The Rewards
vault is going to allow a member to set up their own profile.
They are going to answer questions, you are going to get those answers. You're going
(09:43):
to be able to target those members and you're going to reward them inside
your club, inside your spa, and outside of the club and
outside of the spa to get them to become loyal, to get them
to pay their monthly dues and to be rewarded
properly for the actions. A lot of companies are cutting back on rewards.
You shouldn't be Promotion Vault. Your answer, trust me, this is
(10:05):
real.
Give me some examples of how you go about that fact finding
mission. What's the type of questions without giving us like the whole secret
sauce of the playbook, but like what's the survey that that allows
you to understand what's going on?
Yeah. And the fact that you don't have to give somebody like here's like 200
(10:28):
questions like, you know, just type of, you know, in depth,
like algorithms and everything else. Like I need like 10
questions or 5 things like give me a sense of what's going on. Yeah, great
question. So. So first of all, I utilize a tool called
the predictive IND and So within the predictive
index platform, which is, which is,
(10:50):
you know, there is a, you know, the whole idea of predictive analytics
is built into the predictive index. So we're using
AI and so I often say I've been using AI for years. But
the questions are really around understanding
how an individual fits to their job. What is
their fit with their manager, which is super, super important. That
(11:12):
relationship, that one on one relationship with your manager is the important
relationship that we have at work. It's understanding fit to the team,
understanding fit to the organization, and then also
understanding how people are feeling about their total engagement. And
we are able to measure each one of those, those factors.
And then within the platform it also is making suggestions,
(11:34):
recommendations that we can take in order to increase
engagement over time. And of course we survey, we take action
and then we come back and survey again. And you know, what we
see is through a case study, we've actually been able
to prove and show that we've increased our employee
engagement across every one of those categories over
(11:56):
the last year. Gotcha. And by the
way, Pete, it's 50 questions. Sorry, it takes about less
than 15 minutes to complete and it's completely anonymous.
So to kind of hearken or pull this into what
we do. You know, everyone here on the show knows that, you know, our, our
day job is, you know, we do mergers and acquisitions, help people buy and sell
(12:20):
companies. And I had a conversation with one of our
clients the other day and we're trying to sell his business right now we've got
a term sheet at, at five and a half times cash flow, which is basically
for a, a multi unit chain that doesn't have new
locations coming to market. You know, it's a strategic
sale, like five and a half times. And the guy says to me,
(12:42):
he's like, how do you value the fact that I have like
the best team probably like within 300
miles of my two locations? How do I get,
how is someone paying for my team? And my
answer was, you know, they're not, you know, they're paying for your cash
flow, which is generated by your team. So it's kind of like
(13:04):
embedded in the multiple at five and a half
times on what your team's generating. He's like, well, I don't know if that's
really fair. Right. Because I built this team over 10 years
and I've got people here that started with me from day one that
I will put up against anyone in the industry. So how
would you respond to that? Or do you think going
(13:26):
forward There might be a narrative that I could use
that says, yeah, these clubs, you know, if these clubs were,
if these clubs were run by a different team
that you would have to replace, you should pay four and a half times for
it. Or I'm bringing you a team that actually could go from 2 to 10
and here's their background and interview them, do pull predictive index on
(13:48):
them, show me where they rank as like professionals and you got to pay
me six times or six and a half times. How would you help me respond
to that? Yeah, part of how I would respond is help me
understand your process. I want to understand your
process for acquiring and retaining the talent that you have.
What does that look like and how, how
(14:10):
scalable is that? Right. Do I have a system in place
that I can then prove, if you will, and show that.
Here's the playbook, right? Here's my talent acquisition here and
retention playbook. And here's how we go about build,
here's how we've gone about building this high performance culture.
And what I would, what I would want to do is I'd want to actually
(14:32):
be able to exhib at that system and I'd want to also have the data
to, to show to a potential suitor
investor to say, okay, here's how we do this, right? Here's how we, here's
how we operate our business. And oftentimes the playbook that may be
missing on the shelf, if you will, is that, that
playbook on how we've gone about building this high performance culture
(14:55):
and then theory then how we're going to go about the ability to scale and
replicate this. Pete, so in the article that came
out there was kind of your case study that was, you know, put
out across social back in December, maybe November,
saying like, hey, we help Club 16, you know, Saver
generate, you know, an extra $2 million, you know, in actual
(15:17):
hard, you know, income statement amounts,
right? If that was the case with my deal, right, that's an extra $2
million times 5.5 is $11 million, which
is double the size of the actual purchase price.
So is there an argument or is there an idea here that as we're
talking to say, if you're going to kind of gear up your
(15:40):
company for sale, and I get this all the time saying like, hey, I don't
have a succession plan. I'd like to optimize what I've done
and generate material wealth for myself. And I'm not
going to build this out, not taking in private equity. Like I've done. Which is
a fair thing to say. You know, if you're an owner, been doing this 25
years, you know, you should get rewarded for Guy Brockway, man.
(16:01):
You say Peter Brockway. Look, I'm going to build value and when I want to
sell, someone's going to pay me for the value that I have created. That was
his private equity playbook. Is there an argument
or is there like an intermixing of if you're going to go
sell your company, why don't you take a year. I'm going to tell you XYZ
things you need to do with your business. And what I want you to do
(16:23):
is I also want you to plug in Talent Optimizer Group for this segment
because it's going to generate X amount of potential return on investment
on its own. And also whatever that investment return is,
multiply by 5, 5.5 or 6 and do the math
on your own to figure out, hey, it's going to be worth an extra million.
2,5 in purchase price, right? Yeah.
(16:44):
Well, here's the. So. So I love the fact that, you know, you wear that
hat, Pete, because Chuck was always about having his
finger on the pulse of the EBITDA of his organization. Like he, he
knew that number because he was always thinking about it in terms of what's the
value of my, my company. And
through this process, what we look at, and oftentimes what I'll say
(17:07):
is, look, if you're looking at your P and L, oftentimes the
greatest expense, the biggest expense you have is payroll. So if we think
about how do we go about instead of necessarily cutting payroll,
then how do we actually maximize the payroll that we have, if you
will, and how do we make sure that we're not. We're looking
at the hidden cost of employee turnover costs. So we
(17:29):
can actually calculate what that cost is. If we look at your
turnover, your retention rate and we look at your turnover, we can put a
number on that. So if we reduce the employee
attrition and we know that we're going to, we're going to save you dollars. But
also think about the opportunity cost that we have that
we get out of this spiral of just constantly trying to,
(17:51):
you know, we're churning employees and we're constantly looking at replacing
constant looking at how do we go about training employees.
I think that's the other piece, Pete, is yes, taking that pause
and looking at it that the, the, you know, what's our
hiring process look like, but then also understanding what does our onboarding process
look like, and then how are we going about managing performance? So
(18:13):
putting the systems in place to really look at not
only talent, talent acquisition, but talent development.
And then you speak to things like succession planning. So it's.
Succession planning also means that we have a plan
in place to train and develop the talent that we have in place
so that we can position them for that next role.
(18:39):
This is Pete Moore. Here's the last tip for you of the podcast.
We are partnered up with a company called Higherdose.
Higherdose.com they are the leader in
workout recovery products. Infrared technology,
LED light masks, neck enhancers, and
other products such as PEMF mats and sauna
(19:01):
blankets. If you have not gotten on the workout
recovery train yet, your time and your stop
is now. You got to get these products in there before these workout
recovery and spas end up saturating your market.
Having your members walk out of the club and going into one of their locations
for 200 bucks per month, where they're paying 39 to
(19:22):
you. Let's become an expert in workout recovery. If we
are already an authority in workouts, higher dose,
check it out. There's a wholesale code and we look
forward to helping you augment your products and services
to meet the demands of your members. And hey, let's get people
happy, healthy and sweating. And the recovery should be
(19:45):
just as good as the workout.
You know, I'm all for one for coming up with new acronyms.
Feel like that could potentially be my day job. But there's like a return
on talent or like a return on employees. Instead of like, ROE is like
return on equities. Like, it's really return on employees. No one ever
(20:05):
asked you that question except in the guise of like, how many employees do
you have? And what's your. What's your retention? Or
like average years of service. And I hearken back
to this place that I used to go to. It's called Ponchos
Mexican Restaurant on a quarter of Rosecrans and Highland
in Manhattan beach, okay? And it's a great, great
(20:28):
Mexican restaurant. Every employee has their name tag, okay?
And there's not one employee that's been there less than 20 years,
okay? And I was thinking to myself, like, they wear that
with pride. They don't. They probably don't have a LinkedIn account, right? But
they never update their resume, right? Because they're there and
they've been trained and they're part of a family. But this family is
(20:50):
a high performance family. There's no one that's like a B
player, that works at this Mexican restaurant and it'll hopefully be there forever.
So when you take a look at, you know, indicating
to your potential buyer, like, here's how long these people
have been here. And one, I pay them well, I treat them well.
You know, they perform. And then the other thing is that the guy from
(21:13):
Nvidia always says, like, I don't really fire employees. I just, I just
make them better and I'm going to stick with them and they're going to stick
with me. And if I hire them right, then I know that they have the
ability to be amazing. Which, which kind of dovetail in
dovetails into like, if you get in with, with talent
optimizer group, give you a little commercial right now there's like an
(21:35):
unintended consequence of a commercial for you. Like, if I help you
hire the right people, you basically are going to have into
perpetuity to an extent, you know, the ability to grow
faster than you ever could because you made the right decision. And it's
not from ZipRecruiter and it's not some fucking. Indeed, it's not from
Craigslist, but, but it's actually like, figure out the players that we want on this
(21:57):
team. Let's go and recruit players, right, that are franchise
players. Let's pay them well. And actually if I pay somebody really
well, I think they probably do the job of five people. Yeah, correct,
Pete. So thanks for the commercial, Pete. No problem. Happy to do it
unintended. You know, I love you, but like this just came out. Thank you. I
love you too, brother. Yeah, I think, I think the, you
(22:18):
know, the comment that I'll make is, is the
example of Club 16 is when we, when we facilitate
Chuck, Chuck knew he needed to make some changes, he needed to make some organizational
structure changes, but he didn't know exactly what he needed to do. And so
when we facilitated the employee experience survey, it was very, very clear
that the team, the employees were looking for
(22:40):
greater leadership and at the, at the club level.
And so we went about restructuring the organization, but we didn't, we looked
at it through the lens of, hey, let's take a whiteboard and let's
look at what are the position that we need in this
organization. And then we were able to take the, the existing
team looking at their behavioral profiles right through the, through
(23:02):
the behavioral assessment that we've had facilitated. And we were able to position
those people into this specific role. So it's
important, Pete, that I want to point this out is when
we hire and I'll Give you a quick lesson on
talent optimization. When we're looking at the hiring component, we talk
about hiring for the head, the heart in a briefcase. Right? The briefcase is
(23:24):
typically what we would look at. The resume, the experience. Right. The cv,
if you will. The heart is, tell me what you're passionate
about. How does this person potentially align with our culture, our
values? Right. Are they going to be aligned with our mission? The other thing I
talk about is empathy or compassion.
Is this person going to be a compassionate leader?
(23:46):
And if they look at the head,
the head is how are they wired for work? And that's really
where we start to look at the behavioral assessment as they fit to a
particular job target. So think about it from a sales. Sales role.
Simple is, am I looking for a hunter? Am I looking for a farmer?
And so they're very, very different behaviors that I might be looking for, but
(24:09):
I'm looking for a salesperson. So if we can help to determine
that, we look at that resume, that briefcase, if you
will, and then we can kind of fit that person to the job. And I'll
say this too, Pete. It's never red light, green light, meaning the
behavioral assessment, because anybody can flex into any job.
But then we also want to be able to provide coaching tools. Right.
(24:31):
And. And so we're able to provide those types of tools as well through the
platform. I would like to be considered a compassionate
hunter, if you can give me
that, because I'm trying to find deals, but I'm also always
understanding what the seller needs. And we just worked
on a deal, and it's. It's close to closing.
(24:53):
I said to the private equity guy, because I became friends with him as a
buyer, I'm like, you have to be more empathetic to what's going on here. Like,
this guy ran his business through Covid. He's got personal debt
on the business. He's got obligations. We have a fair deal with
you, but when you deliver something, like, you have to deliver it
more delicately, and you have to put yourself in the shoes of. Of who
(25:15):
you're buying a business from. And that credibility and
that compassion gets you over the finish line. So
not only deals, not only business on your side of, like, hey, let's build an
awesome team. But if you're doing a deal, you kind of have to overlay a
lot of the definitions and, like, the philosophy that
you're putting out there and make sure people know, like,
(25:37):
what they're defined as and why they were hired. Yeah, well, you know,
the compassionate part, Pete, is You know,
compassion is defined as empathy, empathy
plus action, Right. So it's really understanding meeting the person
where they are and then taking action. And the action that you take
needs to, you know, help to help to meet that person
(25:59):
where they are. Meaning that the action that you're taking needs to be meaningful. And
if we're able to do that, then we become more likely to be a
compassionate leader. And so becoming a compassionate leader is
actually something that I help organizations and, and I
teach that to organizations because compassion can be
scaled. And interestingly enough, when we use
(26:21):
the tool like the predictive index, you know, when we take that behavioral
assessment, what we talk about is it creates self awareness at speed
and scale. So the first thing I want to understand is
myself and how do I show up as a leader? So if I'm the deal
maker, I need to really understand how I'm wired and
then understanding how I'm wired. But also that's going to help me to understand how
(26:42):
I might be perceived by whom, whomever I'm working with. Right.
The, the team that I'm working with, that interaction that I'm having, and
that's going to give me the potential opportunity to adjust
my approach. Right. And if I really, if I also had
under, and if I understand the team that I'm potentially working with and,
and the group that I'm acquiring and I had those folks take that
(27:04):
behavioral assessment, that's also going to help me understand do I have the
right people in the right roles today and then being able to. The last thing
I'll say about this, Pete, is create the psychological safety for people.
Right. Go ahead, Pete. No, and I would say just for the
audience, when we use the word compassionate, we're not talking about
allowing losses to happen. We're talking about winning with
(27:27):
compassion, with empathy and with understanding, but
also saying, like, this is how we're going to run the culture and this is
going to be a winning team. So compassion is not like an angel investor
saying yes to everything or letting things, you know, go by the wayside. Like, we're
going to perform, we're going to execute, we're going to listen, we're going to be
compassionate, but we're going to win. Yeah. I mean, there's data out there, Pete,
(27:49):
around compassionate leadership and how you actually will
outperform over time. Whether you look at it through compassionate leadership,
through, you know, conscious capitalism. Like there's, there's plenty
of data and there's plenty of case studies out there on
organizations that are winning and they're and they're consistently winning
with. With that approach as a compassionate leader. Yeah. So
(28:11):
look, man, great to talk to you again. We're going to keep this to 25
minutes, which exactly what we hit just now for our people that like to run
or walk their dog for 25 minutes. So you've just been
optimized talent wise. Talk to you soon, brother.
Thanks, man.
(28:33):
Sam.
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