https://genehammett.com/wp-content/uploads/2020/08/GTT-Featuring-Tom-Golisano-2.png 268 704 Gene Hammett https://genehammett.com/wp-content/uploads/2016/02/Gene-Hammett.png Gene Hammett2020-08-09 13:00:252020-08-21 21:21:13Interview with Billionaire Tom Golisano, Author of Built Not Born and Founder of Paychex
The pathway to creating a billion-dollar company can take many paths. Today’s guest is billionaire Tom Golisano, Founder at Paychex. Tom Golisano is the best selling author of “Built, Not Born.” He shares part of his journey of leadership that created the billion-dollar brand. Learn from this interview with Tom Golisano about business growth and some unconventional approaches to leadership.
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Target Audience: Tom Golisano Chairman Of The Board at Golisano Foundation. B. Thomas Golisano — entrepreneur, philanthropist, and civic leader — is the founder and chairman of the Board of Paychex, Inc., headquartered in Rochester, New York. With more than 12,000 employees and 100 office locations nationwide, Paychex is a leading national provider of payroll, human resource, and benefit outsourcing solutions for more than a half-million small and medium-sized businesses. Disclaimer: This transcript was created using YouTube’s translator tool and that may mean that some of the words, grammar, and typos come from a misinterpretation of the video.
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Tom Golisano No matter how you project your image, you have a responsibility to project a good image. And that goes for social media as well. I know people can do a lot of damage to a company by writing up things across the map about how good or bad your company is. Well, you got to do your best and resurrect those differences if you have a client or a customer wondering because they can in one blast, give you a bad day.Intro [0:28] Welcome to Growth Think Tank. This is the one and only place where you will get insight from the founders and the CEOs the fastest-growing privately held companies. I am the host. My name is Gene Hammett. I hope leaders and their teams navigate the defining moments of their growth. Are you ready to grow? Gene Hammett [0:45] Growing a business takes a lot of fortitude and grit. Today we’re going to talk about growing a billion-dollar business. Well, more than a billion. How about over $30 billion? What does it take to be the kind of leader That over the many decades, aligns people together, hires thousands of people, gets all of the operations right gets the sales right, and builds over $30 billion organization? Well, we’re gonna be talking with the founder of paychecks. paychecks are the brand that you’ve heard of about processing, payroll and 401k, and many other aspects of the central organization inside of many, many businesses. They are a brand to be reckoned with in this space. We have Tom Golisano on the podcast today. Tom is the founder of that organization ever, as I’ve already said, but he’s written a book called built not born. And I had a chance to read this book and I wanted to share with you some of the thoughts I had through this interview. It’s really amazing to be able to reach out to people and bring them on the show just for you as founders of fast-growth companies that are emerging into great leaders being visible. And one of the things we talked about in here is what you should be doing with your time as a CEO, and why you should be the laziest person out there. So, when I talked to Tom today, I took a look through the book and it really was able to pull out some nuggets and some questions that will help you. But I will tell you, this book really is a powerful read, it will give you some insights around a strategy that will help you grow. It really complements some of the work I do because I work on the mental aspects of being a confident and courageous leader. And so having Tom on the show is a really good kind of complement to the workout. So I wanted to remind you that if you want to be the leader that you really want to be, you must continue to be even more courageous and more confident about who you are and how you’re showing up. That’s the key to my work. Now, here’s the interview with Tom.
Commercial [2:53] Before we dive into the interview, I wanted to remind you that you can actually get a tool that I’ve been working with clients with For the last couple of years, I’ve refined this tool has gone through several iterations. Now we have it completely automated, you can actually go online and fill out the leadership quiz. To get the leadership quiz. Just go to theleadershipquiz.com. That’s pretty easy, right? theleadershipquiz.com what you will get when you do that you will answer a few questions, you will see where you rate based on the core principles of fast-growth companies. If you’re ready to grow your company or you want to see where you are, then make sure you go to theleadershipquiz.com inside it, you will get insight to where you are, understand where you want to improve. And you will get them mapped into the 10 areas that are most specific to fast-growth companies. Again, go to theleadershipquiz.com and you can get that right now.Gene Hammett [3:47] Hey, Tom. Tom Golisano [3:48] I’m doing well Gene, how are you doing? Gene Hammett [3:50] I’m fantastic. I’ve already introduced you to our audience and I told them a little bit about your background, but we’re going to dive into it today. You were the Founder of a publicly-traded company called Paychex. Tell us about some of the key milestones in your journey to get to where you are today. Tom Golisano [4:08] Sure, I started Paychex back in 1971. In Rochester, New York, I had a goal of getting 400 clients in the city of Rochester and living happily ever after. But after being in business a few years, a couple of individuals came to me wanting to start up similar locations or similar companies in other locations across the country. So I went to a four year period where I helped 17 different individuals start paychecks offices in other parts of the country, most of them except for one of them lived in Rochester, New York and moved. We did that for a number of years and then the concept of consolidated into one company became a reality. I sent out a prospectus to all 17 individuals and said, we should consolidate into one company. I know I tried to talk you into becoming entrepreneurs, but now I’m asking you to be an employee and a shareholder But we have a strategy in place and that was after consolidation. We would work three years on building the sales organization and more branch offices. We did that then we focused on profitability 1983. We went public and the NASDAQ exchange EF Hutton and Hambrecht and quist did our IPO. At that time, we had about 25,000 clients. Today Paychex now serves over 670,000 companies. In the United States. We also have a wide array of besides payroll processing, human resource products, like 401k, administration, workers compensation insurance, and that type of thing. The company, of course, is still public and has a market cap of somewhere between 31 and $32 billion and thousands of shareholders of course, and we have over 15,000 employees. Gene Hammett [5:56] Well, that’s a big run there. I do want to kind of highlight that In the middle of that, do you remember the year you became a billionaire? Tom Golisano [6:05] It wasn’t when we went public it was wasn’t probably until 1993 or 94, or something like that. Gene Hammett [6:10] So you had to get, you had to go. Tom Golisano [6:14] But let me tell you what happened in the 90s, we had a period of time where our revenue never grew less than 17%. And our profitability growth was never less than 30%, all through the 90s. And that’s when the company really blossoms into a much higher market cap. Before that, we were generally under 100 million. But when we went through that period, and we also did 10, three for two stock splits, which don’t seem to be in favor these days, people are doing stock splits, but we did 10 years during the 90s. Gene Hammett [6:45] Awesome. Well, I wanted you to be on the show because not only have you had just an amazing journey of entrepreneurship and leadership, but you’ve learned a few things. Mostly because you’ve probably been through ups and downs, you’ve made mistakes you’ve had regrets. I know you’ve written about this in the book, built, not born, I would hold it up here, but we’re not on video here today. Tell me a little bit about why you had to write this book. Tom Golisano [7:15] Well, it started out. A lot of people encouraged me to write a biography. And I thought that was an interesting idea. I did about half of it, and started talking to publishers and publishers gave me feedback, but back the same time, why don’t you write a business book first? Okay, tell the story paychecks and all the other things you’ve been involved in, like the Buffalo Sabres, philanthropy, and stuff like that. And I said, you know, maybe that’s a good idea. And while I was on the phone with one of the publishers actually wrote a table of contents with the 10 or 12 important chapter titles, cuz it keeps so easy to make. And, you know, I may sound like I’m a little bragging there, but it did come easy to me. So that’s how the book is. And what I want it to be, is something for entrepreneurs. And I know most of your people are entrepreneurs, but for people who are also considering it, you know, some of the hills and valleys some of the things that they need to be concerned about, such as financing, HR administration, and also one interesting chapter, how to handle success, which I think sometimes can be a real problem with an entrepreneur. Gene Hammett [8:27] Well, it can be because you know, the title of my book, The trap of success, I didn’t handle it very well. And I wrote, I wrote a story about losing everything and rebuilding my life. Tom Golisano [8:39] I read it. Gene Hammett [8:41] And I appreciate that. Well, today’s about you. So I want to dive into this. This is a really big question because you’ve had so many people that you’ve had to lead over time, but you actually have some ideas about time as a CEO. How can leaders have the time and capacity to become really good leaders? Tom Golisano [9:05] I think the prime issue with becoming a good leader is being able to delegate. The leader has to think the leader has to visualize, the leader has to think about overall his product offerings, his pricing, and those types of things. And if he gets caught up in the day to day activity, those things will get set aside and will not happen. So being able to delegate effectively is very, very important. Gene Hammett [9:32] Now, I know you talked about the power of vision inside of a being that CEO, when you think about it, what is the real issue with people not being the visionary leaders that they need to be? Tom Golisano [9:47] Well, I think, Unfortunately, they just get caught up in the day to day and they don’t take the time to be visionary or think about their future as it is released to their company. So it’s just a matter of you got to set all that paperwork, all that stuff on the desk aside, or not let it get to your desk, let other people handle it. And focus on the vision of the company and where you want to take it.
Commercial [10:13] Hold on for a second here, Tom just talked about not taking the time. Now, when you think about your own business, I know you’re busy, you have a lot of projects on your mind, you have a lot of things in your to-do list. But don’t hide behind your email, don’t hide behind the trivial tasks that are necessary. All of those things could be delegated when you really understand the value of you as a CEO. Now I say this because I know a lot of people struggle with letting go. They want to hold on to this because they’re really good at it. Maybe they like doing it. But some of those tasks are keeping you from being the CEO that really needs to be the visionary, the strategic thinker of the organization allows you to connect the dots and push beyond where you are today. This is a big part. of the work I do with leaders who kept them really clear and confident about who they are as leaders. So make sure you reach out to me if you have any questions. Now back to Tom.Gene Hammett [11:08] Did you write about this in the book? So I’m going to give you a chance to talk about it. But why should CEOs be the least busy of all the managers and leaders inside the organization? Tom Golisano [11:18] Well, when I say least busy, I’m talking about, you know, ads and ads, paper papers, stuff, you know, reading contracts, all those types of things that take up a lot of time, but aren’t very productive. And it’s easy to get caught into that trap. Because people are always coming into your office and said, What do I do about this? What do I do about that? Well, you got to get by that stuff. You got to do what you can to make sure your people under you are taking leadership positions themselves, and they should be good delegators as well. Gene Hammett [11:52] You have a complete chapter on the public image of the organization. So let’s just ask, you know, a few questions. Why is it important to really project the right public image as the company is being built from the beginning, all the way through every stage of the process? Tom Golisano [12:09] Well, I’m a little bit biased because we are a payroll processing company. And we get very close to the entrepreneurs because we know all about their payroll, how much everybody’s being paid in the organization, and so forth. So I think it’s very, very important for a company like ours, to have a good public image, we want to have an image of honesty and integrity, accuracy. Those things are so important for a payroll processing company. And I think there’s many ways to accomplish it. One is, and I took a lot of heat over this over the years was our dress code. When you come to the Paychex offices, you’d be surprised how neat and organized they appear. And I’ll give you a wicked example. Some nights I would go through the building and I saw all kinds of papers on somebody’s desk and just Superman to the wastebasket. And everybody by the next morning got this message, we’re going to be eight, we’re going to be organized, we’re going to be professional, and we’re going to look professional. It’s not only important for clients to see that, but also Wall Street. And because we are a payroll processing company, it’s just vital that we have a good public image. Gene Hammett [13:17] Now, you had some thoughts on social media to you didn’t go into much depth, but what are your thoughts on, you know, the public image through social media today? Tom Golisano [13:25] Well, I wouldn’t say that’s one of my strong points. But I’ll say, no matter how you project your image, you have a responsibility to project a good image. And that goes for social media as well. I know people can do a lot of damage to a company by writing up things across the neck about how good or bad your company is, well, you got to do your best and resurrect those differences if you have with a client or a customer or vendor, because they can in one blast, give you a bad rap. Gene Hammett [13:57] I want to talk about some employee issues. Now. What of the things I got from the book, and it’s something aligns with my message very well. But you talked about the value of entrepreneurial-minded employees. What exactly is an entrepreneurial-minded employee? Tom Golisano [14:10] Well, basically, what I mean by that is, if you’re an employee of a company, I would assume that the ownership and the management of the company would want you to be as entrepreneurs as you can. By that, I mean, coming up with new concepts, new ideas, ways to become more productive, and so forth. And I think you can do that. And you can encourage that with any employee. Let’s say you have an employee, maybe a low skilled job, who would say is rated as one of the entrepreneurial scales, well, you can make that one a three. Or if you got a three, you can make them a six, and so on and so forth. And that goes for the entrepreneur himself as well or herself. So encouraging people to think creatively, to think positively about the organization and how to make it better, is good for everybody.
Commercial [14:59] Hold on. A second entrepreneur minded employees, you may be resisting that you may not believe that that’s a good idea. But here’s the concept that you really should understand. You can’t have people who just follow the rules and or do what they’re told to do. You actually want people that can see problems in your organization, and have the confidence to recognize those problems, and to address them, to see the value that is created. If you get them to think like entrepreneurs, they will create more creativity and innovation inside the organization. They will inspire others. So Tom went on to say that you should really be rising the level of the entrepreneurial spirit of everyone around you. Not everyone is going to be an entrepreneur that goes out and starts their own business. And that’s not so bad either. You as a leader want to inspire them to think like entrepreneurs. Back to Tom.Gene Hammett [15:53] I totally agree with that. And one of the things you’ve talked about there specifically, is, you know, getting people to take ownership. So how do you encourage or inspire ownership across employees? Tom Golisano [16:07] Well, there’s one way you can do it at certain levels. And that’s, of course with stock options. stock options have been utilizing paychecks for a long, long time. And it does encourage people to take ownership, but employees at the nonstock option level, you just have to ingrain in them that we’re all in this together, that we have a responsibility to do a better job a good job and take responsibility. Gene Hammett [16:36] And you also mentioned the importance of investing in that you’re a big supporter of training inside that organization and in fact paychecks is known for the constant support and training you gave your employees so why is it worth investing in employees? Tom Golisano [16:52] Well, first of all, it makes the employees better. It makes them more skilled at the job. Secondly, we are In a very personal business when it comes to payroll processing, and we want our clients to feel confident that we know what we’re doing, at all levels, a payroll specialist that deals with the client, you know, one payroll specialist paychecks may deal with a couple of hundred clients, those 200 clients want to feel comfortable that the person you’re dealing with on a daily or weekly basis, knows what they’re doing, understands what they’re doing, can keep them out of trouble with the federal and state government. So we go too long lengths to make sure that our people are well trained as possible. Tom Golisano [17:34] The other thing it does, you know, we’re a very geographically dispersed company. We have probably 11,000 employees spread out across the United States, by bringing them into the central office early in their career with paychecks helps build a feeling of belonging, and importance in the company. I’ll tell you one thing we did, and I’ll give the credit to our architect. We build our corporate headquarters system. We put our training upright in the front of the building, as you walk in the main entrance of the building, you look around and you see seven or eight training rooms. And all these trainees are from all over the country, getting training in their specific jobs. That that gives them a feeling of importance and belonging. That’s just one of the instruments we use to get people involved in taking ownership. Gene Hammett [18:24] And I love that. I want to switch gears a little bit and talk about interviewing you had a very counterintuitive kind of process of interviewing. And there are some other elements around that. But let’s first talk about this technique called the pregnant pause. So what is it exactly and how to use it? Tom Golisano [18:42] Well, I’m sure you use it in your world. Okay. But basically, I’ll define the pregnant pause, is I’m making a point with you either it could be a sales presentation, it could be a negotiation, presentation, anything like that when it comes to a point when the presenters should just shut up. Okay? Wait for a reaction from the person he’s presenting to. And chances are that reaction is going to give you some idea of where you stand in this process. They say they’re going to come up with an objection. And if you’re ready to handle the objection, but if you just keep talking and never give that customer the chance, or that other person has the chance to converse, you’re just asking for trouble. How many times have you seen the salesperson go ahead and make a great presentation? And just keep talking and talking and talking in a sales script, and the customer never has a chance to say yes or no. And if they’re ready to say, yes, if you keep talking, you might talk yourself right out of the deal. See what happened many times? Gene Hammett [19:41] I’ve seen it happen to you. I read about a story in there where you, if you’re interviewing someone, uses this pregnant pause. It’s literally a technique to see how they handle maybe the awkward silence. And you’re willing to just sit there and let them make the next move, right. Tom Golisano [19:58] That’s exactly right. Especially In interviewing, you want the person to talk, you want the person to try to communicate with you, if you keep talking, and don’t give that person the opportunity? Well, by using the pregnant buzz, you’re giving them the opportunity. And it’s interesting to watch how they handle it. You know, a good candidate will be able to handle it. But sometimes people just walk themselves and talk themselves rather than did not get the job. Gene Hammett [20:26] One last question on interviewing. I know, this is an old adage, but not too many leaders really follow it. They really look at, you know, they know that it’s important, but then they go the complete another way. But you’ve always thought that you should hire on attitude and train for skill. What exactly is the reason behind that? Tom Golisano [20:47] Absolutely. I’m just a believer that it’s much easier to teach a skill than it is to teach it attitude. And that that phrase, hire attitude over skill. It has been sort of my rationale ever since I began hiring people, and when I think when you say attitude Are you looking for while you’re looking for people that are ambitious, that will accomplish something which demonstrated that they can be a good team player. Those things are all very important as well as the other thing I probably mentioned in the book, don’t hire the guy that leaves the coffee cup on your desk, because he’s got poor manners is not going to represent you well. Okay, but those other things are so important and higher skills. I mean, hire attitude over skill every time. Gene Hammett [21:36] And there’s no real question here. But one of the things I like about the book is you shared some of the details that you go into really seeing how someone treats others watching for their manners, do they say thank you? How do they treat people that are, you know, serving them in different ways? You’re probably watching that all the time. Is that true? Tom Golisano [21:55] Sure. Invariably, you’ll have somebody come into your office either a sales rep from another company or potential employee will sit down. And one thing I will do ask them if they would like a cup of coffee or a glass of water. And they’ll say yes to one or the other. I’ll have my assistant, bring it in. And if they take the water the coffee from your system, you don’t say a word like that saying, Thank you. Thank you very much. It tells you the person’s got just poor manners, and maybe he’s too satisfied with what he’s trying to accomplish. But the fact of the matter, it doesn’t sit well with me. And then worse when they leave, they leave the coffee cup on my desk, as if it’s my responsibility to clean up after that. Gene Hammett [22:40] Well, I want to switch gears here again, because you know, growing a company to the size that you have, you learned a thing or two about leadership and developing people. You have one key phrase that has really driven that. And this is one of the titles of one of the chapters. But you know what I’m talking about, don’t you? Tom Golisano [23:00] I think I do. Gene Hammett [23:01] What do you think it is? Tom Golisano [23:05] All right, you got me. Gene Hammett [23:06] Now. So not trying to trip you up there, but, you know, follow our lead, follow or get out of the way. So where does that come from? Tom Golisano [23:15] Actually, about 40 years ago, Ted Turner, you know, for broadcasting company was interviewed on 60 minutes, and I saw it on his desk. And I said, Boy, when it comes to leadership, nothing made more sense to me. Either you lead, or you follow. And if you could actually do either one, get out of the way, don’t hamper the project. And I’ve been a firm believer for many, many decades. Gene Hammett [23:42] Now you have a phrase on the other side of that sign? Tom Golisano [23:45] Yes, I do. Gene Hammett [23:46] Which is it’s all about the presentation? Tom Golisano [23:49] It’s all in the presentation. And that’s directed mainly at the sales organization, to give good, direct clear presentations to prospects, but also anything you dealing with within the company, and you’re making presentations to people. It’s all in the presentation, do a good job of preparing the presentation and delivering the presentation. And you’re more likely to get the results you’re looking for. Gene Hammett [24:14] Fantastic. Well, Tom, I want to start to land the plane here, but you’ve been through so much as a leader. I’d love for you to share with us two or three defining moments that you’ve had to wrestle with and cause you to dig deep on your own courage and confidence. What comes to mind? Tom Golisano [24:32] Well, the first one, I think the defining moment is defining moments of paychecks, was getting by for years without a paycheck. That was not easy. Fortunately, I had a spouse that worked, obviously, for a nonprofit that didn’t make a lot of money, but it certainly helped that that was defining for me. The second one I would say is, I talked to the 17 individuals about consolidating the one company that was a tough sell I mean, these convince these people to move out of Rochester start up their own operations be president, you know, have a good fellowship in the community and so forth. And now all of a sudden, I’m asking them to be shareholders’ voices. That was a real shock to the system. It led to a four year period, which is very difficult, quite frankly, I had to put people in charge of other people. In other words out of the 17, I had to hire three people or promote three people to be leaders over the other 14 before they used to play golf together, you know, go out for a drink together and all that kind of thing. Tom Golisano [25:39] Secondly, we didn’t have a good situation when it came to skill matching. In other words, these 718 new 17 people, were very good at sales and others were very good at operations. And vice versa. Well with the setup we had with these 18 separate companies. just didn’t work well. So getting them to consider consolidating into one company was probably the best thing we ever did. And that’s when the company became, in my opinion, a serious company. When we consolidated we had about, I don’t know, 15 to 20,000 clients today we have 670,000 clients. Growth started after we consolidate. Gene Hammett [26:22] Well, I love that just talking to you. I can think I could do this all day. I had one final question for you is, you know, what do you hope entrepreneurs can learn from your journey of becoming a self-made billionaire? Tom Golisano [26:34] Well, I hope they can learn as much as they want. I tried to cover as many topics as I could. And you notice the habits are all that I call mechanical, you know, situations. What do you do in this situation, how you should administer this or administer that. It’s very direct. It’s very factual. There are very little fluff and the whole thing, and hopefully, I support it with enough antidote. And stories to justify my position. But I hope they keep it on the side of their desk or in their bookshelf. In some days when they’re dealing with an issue, maybe we’ll pick up the book and say, What did I say about that issue? I just wanted to be a good reference for them. And quite frankly, we’ve already gotten word from four or five colleges and universities, they want to use the book as a textbook for their entrepreneurship programs. Very pleased about that. I think it fits well into that environment. Gene Hammett [27:27] Well, I can tell you, I did not get a chance to read the entire book. So I looked at the table of contents, I looked at some of the things I’ve struggled with, see how your perspective handled it with some of my clients struggle with and that was really good, unique point of view, but also some time tested, strategies that you could use and implement inside your business and leadership to grow it. You may not be a big change. Tom Golisano [27:54] What you should do is buy a lot of books for your clients. Gene Hammett [27:57] Awesome. Well, I Love that you had a chance to be here on the podcast grow think tank is for founders and leaders that are growing fast. And you’ve really added to the wisdom that we’ve had here. So thanks for being here, Tom. Tom Golisano [28:10] Thank you, Gene. It was a pleasure. Gene Hammett [28:12] Fantastic interview. having another billionaire on the show really was a pleasure. I love the fact that he was so personable and sharing his insight and wisdom so openly. Hopefully, you got something out of it. I know I did. Reading parts of this book really been helpful for me to understand what does it take to show up at a deeper level and make these really big decisions and being you know, really clear in your conviction of who you are? Because that is Tom. Now I say that because I know a lot of CEOs struggle with a sense of identity that really has to shift over the term from founder to CEO I talked about a lot with the messages. We create a lot of the interviews here about that journey. And today it’s just another piece in the puzzle of how do you transform yourself from found To CEO now if you’re getting a lot out of this, make sure you share this with people that you think would appreciate it. And if you have any questions for me about your own business, your own growth, make sure you reach out to me [email protected]. As always leave with courage. We’ll see you next time. Disclaimer: This transcript was created using YouTube’s translator tool and that may mean that some of the words, grammar, and typos come from a misinterpretation of the video.