Before we get started…
If the people you praise the most are the ones who stay the latest (more on that in a minute)…
…it's a sign the business is running on “brute force.” (And that’s a problem)
The solution?
Install a custom (and scalable) “operating system”… the same kind we use to run the 13 companies inside our own $200M portfolio.
Ok, onto this week's article…
"You taught your team to work hard. Now it's time to teach them how to be LAZY."
I said that to a client on a call recently, and I thought she was going to fall out of her chair.
She'd spent years building a team that knows how to “grind,” and here I was telling her to teach them to be “lazy.”
Because here's the uncomfortable truth…
We hire people to do TASKS, then we praise the ones who "go above and beyond" (which, if we're honest, usually just means the ones who work the most hours).
So the team learns that the way to win around here is to do more stuff and stay later doing it.
It works (at first), but you end up with a team of martyrs.
They’re loyal.
They’re busy.
They work HARD.
But they’re also tired, frustrated, and never quite able to catch up.
Eventually they burn out and quit, and then guess who winds up having to do all the work?
The fix is what I call strategic laziness.
At one of my companies, we installed it with 2 policy changes, and within a quarter, our list of documented systems had exploded, productivity was up, and the whole team was walking out the door by 6 pm.
Here's how it works…
Step 1: Pay People To Build
Most of what your team does every day is a verb:
write the report
fix the broken thing
call the unhappy client
Verbs get done, but tomorrow there's another one. And another… and another. That’s why I prefer ASSET-BUILDING over mere task-completion.
An asset is a noun:
a playbook
a template
a talk track
an automation
Build it once and it works when nobody's touching it. (I wrote a whole issue on making this switch for yourself, including the AI prompt I use to do it, here.)
Here's the problem: if you keep praising, promoting, and bonusing based on VERBS, your team will never make the switch.
That’s why we began paying a cash bonus for every system or playbook a team member built and added to the company operating system.
If it went in the OS and other people could run it, the builder got paid.
SIDE NOTE: Managers had to approve it first, because we didn’t want people burning a week building a process nobody needed just to collect a bonus.
Then, we made a big deal out of it publicly. The builder got a shout-out at the team meeting instead of the person who "pulled an all-nighter."
Before long, the team realized there was more upside to being a builder than a martyr.
Step 2: Everybody Out by 6
This was the second policy change, and it was arguably the biggest.
We made a rule: everyone had to be out of the office by 6 pm. No exceptions.
This one simple rule flipped the culture, because it changed what working late MEANT.
Before the rule, staying late signaled you were dedicated.
After the rule, staying late signaled you were inefficient, and probably not very good at your job.
It worked! The team was happier and productivity actually went UP (because work always expands to fill the time allowed).
There was just one problem…
After a couple of weeks, things got busy and I started working late.
Yep. I violated my own rule. And since I'd decided the rule didn't apply to me, my team quietly decided it didn't apply to them either.
People started working late again, and productivity dropped… again.
It wasn't until I owned up to it in front of the team, apologized, and went home at 6 like everybody else that things went back to our new normal.
Here's how to install it at your company:
Pick a hard stop and announce it as a rule. 6 pm worked for us. The specific hour matters less than the fact that it's the same for everyone, including you.
Explain the why out loud. "From now on, the scoreboard is what gets built, and going home on time is part of the job." Say it in the meeting where you announce the rule, and say it again the first time someone tries to stay.
When work doesn't fit, ask the building question. If a team member can't get their work done by 6, the answer is a system, a template, or a handoff. It's never "stay later."
Hold yourself to it first. Your team will follow the rule exactly as closely as you do. Ask me how I know.
Pro tip: If you've already blown it (I did), the fix is a public apology in front of the whole team. That's what tells them the rule is real.
Step 3: Keep Score With Revenue per Employee
The policies above will change behavior, but it’s this last step that makes it permanent because it gives you a number to watch.
Revenue per employee (RPE) is the ultimate leverage metric.
It forces you to ask a better question every time the team feels stretched. Instead of "Who can we hire to do this?" you start asking, "What can we build so nobody has to do this at all?"
Here's how to run it:
Calculate it. Take your trailing 12-month revenue and divide it by your current full-time employee count. That's your RPE.
Write it down (but don’t panic). Don't worry about whether the number is "good" at this point. Just write it down with today's date. (NOTE: RPE varies by industry, but $150K - $250K is a solid benchmark for most industries. Things get really fun when you’re over $400K, and if your RPE is under $100K, you’re probably losing money.)
Commit to beating it next quarter. There are 2 ways to move the number: raise sales or cut headcount. Try to beat it by raising sales with the team you already have.
Put it on the scorecard. Review it every 90 days alongside your other North Star metrics. If RPE is going up, you're adding leverage. If it's flat while headcount climbs, you're just adding people.
If revenue per employee goes up quarter after quarter, you've built a team that gets more done with less.
If it doesn't, you've just built a bigger team.
⚡️ Action Step: This week, calculate your revenue per employee (trailing 12-month revenue ÷ full-time headcount) and write it down. Then pick 1 of the 2 policies above (the builder bonus or the hard stop), announce it at your next team meeting, and tell them the RPE number you're trying to beat by the end of next quarter.
Give it a shot and let me know how it goes…
-Ryan
Ryan Deiss
Co-Founder and CEO, The Scalable Company
P.S. Every system your team builds under the 2 policies above needs a place to live, and that's the whole point of a company "operating system."
It’s one place where the playbooks, templates, and scorecards sit, so the business runs on them instead of running on you (or your best people).
Click here to see how it works to see how we build them for our clients.
Quick Hits
The best of what I read, watched, and clicked this week.
📈 Growth
The "money button" segment that turned one list into $50M a year (Newsletter Operator)
The books a $200M portfolio CEO actually recommends for bootstrapped business owners (YouTube)
💰 Money
Ryan and Roland debate whether FIRE is actually freedom, or just a fancier trap (Business Lunch)
He turned a $95K tax bill into a $220K escape room he'll never have to run (Acquiring Minds)
He turned down a buyout, then doubled it by refusing to negotiate against himself (Built to Sell Radio)
⚙️ Systems & Ops
The exact hours a $200K, $2M, and $20M CEO should spend on the same task (Instagram)
He built an AI employee for federal bids, then made one rule nobody's allowed to break (Girdley's Letter)
He fired his entire 11-person team and got his week down to 3 hours (SMB Deal Hunter)
🛠️ Tools & AI
Want to pay your team to build without guessing at the numbers? This free incentive plan calculator helps you design a bonus plan that rewards the behavior you actually want…like shipping systems. (IncentiveWise Planner)
The AI receptionist that's already answered 3.1 million calls home-service owners used to miss (Rosie)
