John Corcoran 9:42
Cold calling? Is this the boiler room style?
Phillip Baltazar 9:46
Well, no, it was all self-gen. So I literally had to go I joined a networking group back then called The Tip. So you got into this room and you had to have you there’s only one professional from each or one person. reach professional, right? And you help each other grow your business. But man, I’m sitting on the subway with written applications, and I’m taking mortgage applications in the subway for people that I meet, right? I mean, it was, by all means necessary. I used to walk by this real estate company, on my way to the subway on the way back and I popped my head and hey, do you have any mortgages? No, because they all had the relationship. So finally, I had this great idea. And I bought them this trash cat with my name on it, and my cell number. And I said here, before you throw away any deal, you call me up, right? And that’s how I started getting my business. Right. And then so we ended up going, my wife had a, it was a PhD, we went to block a Mexico, lived there for a year, came back to California. And that’s when LendingTree was first starting. And so I found out about LendingTree. I met Doug Lebda, the founder. And so he was coming out of his garage. I came back and he says, look, we need people in California because everyone’s coming. They’re shopping us on LendingTree. And then they’re taking that…
John Corcoran 11:13
That quote? Yeah, I think, by the way, he was my very first podcast interviews about 12 years ago.
Phillip Baltazar 11:21
Really? So Doug and I are good buddies. I was when I say advisory board. Yeah. So I built my business when he was building his team. And we did it together. Like I was his number one broker in the country. I was…
John Corcoran 11:36
So you relocated from, from New York to California.
Phillip Baltazar 11:40
So yeah, so I left that. So we went to Mexico from Mexico, Erica got a postdoc at UCSD, that we moved back came across country, arrived here in a 1985 Land Cruiser two maxed out credit cards. She’s seven months pregnant. We don’t know a soul here. Right? And within 10 years, I built America Funding Loans. I built a house, I built a family, right, and…
John Corcoran 12:06
What time period is this that you’re doing this? Is this the 2000s?
Phillip Baltazar 12:11
Yes. Rick was born in 2000. So from 2000 to 2012. I had 100 loan officers. I had 50 here in California, and I had 50 in McLean, Virginia. And we were the largest online brokerage at that time, right.
John Corcoran 12:33
So we all know what happened, of course in 07, 08 How did that affect your business?
Phillip Baltazar 12:39
Guess what, I survived a white man and I was actually interviewed on the Wall Street Journal. How did you make it right? So I was one of the guys that adamantly I didn’t want your deal. John, I wanted your cousin’s deal. I wanted your dentist deal. I wanted your mother’s. I was in it for the long game. And so when everyone started doing subprime mortgages, like for me, it’s just morally I couldn’t do it. I couldn’t, if someone was in the gutter, I wasn’t going to kick him in the teeth and give them a mortgage. Right. So for me if any of my loan officers if I caught any of them, because my mission statement was to deliver an enhance mortgage experience for every consumer through exceptional pricing, and superior customer service. If you met that we took care, we were all a paper right? We had thin margins, but we did a lot of it. That’s when Costco approached me. Costco and LendingTree used to have a partnership. Doug and they got into a fight man so they split up so Costco came to me and said, hey, your mission is aligned with ours here. We want to get back into the mortgage business. So I put together a consortium of 14 lenders that could manage and handle the 68 million members in Costco. Right?
John Corcoran 14:01
Wow, that was going to be a ton of traffic coming from them.
Phillip Baltazar 14:05
It was a 100% percent however, if you’re a Costco vendor, like when everything’s going great, they’re still a pain in the butt right. So as your when you get a hiccup, I mean, they’re ruthless. Right. So we had to all agree on margins, we couldn’t go above a certain 130 basis points right. So again, it’s member, member, member, member benefits, right? So no one could be out of the loop here.
John Corcoran 14:34
With some products Costco sells and you wonder like, how was the company that supplied that product as a vendor to Costco even making any money because sometimes they offered for so cheap.
Phillip Baltazar 14:45
Well, then the other thing that’s one thing because they it’s volume, it’s a volume play, right, you’re going to have this volume, so it’s a how many by win game, but you’ll notice so Costco brings in a multivitamin from whoever and they have to go in and It completely get under the kimono to see exactly what the ingredients are. And the next thing you know, there’s a Kirkland brand vitamin.
John Corcoran 15:08
Yeah, right. Is that what they did to you then?
Phillip Baltazar 15:12
No, they didn’t, ultimately, I ended up exiting my company. And the bank that bought me became their lead. And then they got into a scuffle. And did they just recently, as of last year, shut down the whole mortgage business for Costco.
John Corcoran 15:34
So now, how does that bring us to present day and the work that you do with culture index and kind of give people an overview what culture index is?
Phillip Baltazar 15:44
So, because I have been an entrepreneur, I’ve raised capital, I’ve had exits, they found me. And they came to me, everyone that is in my position has sat in the corner office, right, where this is not just a, you got an MBA or whatever, everyone that does what I do within our company, has battle scars, right? To prove that we’ve been there, right. So for me, I’ve always been I love mentoring, I love coaching, I love building companies. So it was a natural fit for me. And it’s the way also a paying it forward, right. And so the first thing we do, but let’s just talk about, before I talk about exactly what we do here, let’s talk about the current environment, right, the current environment in today’s world.
John Corcoran 16:35
And of course, recording this in January of 2023, which is last year 2022 last second half the year, especially a lot of economic downturn, a lot of uncertainty in the economy.
Phillip Baltazar 16:47
55% of everyone who is working today will change jobs this year. 55%, so that if you look at the whole pie here, only 35% of the workforce is actively engaged. 15% are actively disengaged. And what we’re talking about here are guys that do not want to come to work. And when they do come to work, they’re terrorists, right? Because they’re the people that are telling them how terrible the boss is, or how terrible the company is, or this and that. So, Jack Welch says, if you pick the right people, and you allow them the ability to spread their wings and fly, and you put compensation by it, you almost don’t have to manage them. And what that means is and as entrepreneurs, we all get that, right? If you put the right people in the right places, at the right time, because again, as business owners, right, the same people that got you to where you are today are not going to be the same people, maybe they’re going to get you to the next level, right? So we’ve got to constantly measure team engagement. And how do we do that? When you took my survey, right, we measure, this is a personality assessment tool that we have, right? We measure seven work-related traits autonomy, sociability, pace, and patience, conformity, energy units, which is mental stamina, a logic and ingenuity, right, those seven things when we do a survey here, come back with two graphs. The top graph tells me how’s John hardware? Scientists say by the time you’re 12 years old, right, and I got your save right? By the time you’re 12 years old, this is you, you could take the survey 1000 times, and only one chance in 3 million, will it ever be different? The bottom graph, though, tells us your engagement with your current role. So that’s a snapshot in time, that will change. So for you. You might if I read your survey back here.
John Corcoran 18:52
Yeah, go ahead. I might regret saying that in a moment, but let’s see. I might regret saying that.
Phillip Baltazar 19:00
No you’re going to be all good here, right. So yes, your most dominant traits is your perfectionism. You cross the T’s dot the i’s for you, policy procedure, compliance, right. That’s what drives you. Right. And you’re a perfectionist.
John Corcoran 19:17
It explains, I went to law school. So yeah, it makes sense.
Phillip Baltazar 19:20
How easy is it for you to delegate? It’s been a challenge. You know why? Who could do anything as good as you can, right? But here’s the deal for every plus that you have, there’s a tax. So if the pluses are cross the T’s dot the i’s dutiful, loyal all those things, right? The tax that we pay, is that it’s challenging for you to delegate. It’s challenging for anyone to criticize because you can’t criticize perfection, right? So for you, you’re a big part of your identity comes from your knowledge, right? What do you know is what you know, so you’re going to ensure that it’s there. You’re also a very unassuming, polite guy who’s like support. It’s like we’re going to win together as a team. Right? You prefer to deal with tangibles and technological things. Right. Naturally skeptical, naturally untrusting until that’s built, right? You love variety. You need one-seat variety, right? You love juggling stuff you like the pressures that those time constraints give you? Right? Yeah, that’s how you are right? So you’ve got also the way that the logic looks at how do we process information. So when things come at you, you are hardwired to deal with things logically, right? So it’s almost sometimes you’re hard to read and kind of stoic, and the tax that people pay that work with you is that they might misinterpret that stoicism, for you being mad or upset, or whatever, but you’re not all you’re doing is just right. If on the other end of the spectrum, you’d be if you were someone that process things emotionally, you’d like someone that wears their heart on their sleeve. So they would come in and everyone would know John’s having a great day today, or oh shit, hit the doors here. He’s having a bad day today. But you’re not that you’re on the other end of it. And then we take a look at are you the type of person where we’re going to have Elon Musk knock on the door and saying, hey, John helped me invent the next thing to get to the moon? No, you look at a keyboard, and you say, okay, this is a keyboard, how do we improve upon what’s in front of us? Right? That right? So that’s how you’re hardwired? Anything that I’ve said or interpreted you that?
John Corcoran 21:35
No, that’s pretty spot on? Yeah.
Phillip Baltazar 21:37
So what the second graph tells us is that in your current role right now, right, you feel like you got to be more assertive, you got to be more in front of it need to be more entrepreneurial you need to have, you need to be that 30,000 foot person that can see the train or see around corners, right, you also realize, or perceive that you got to be turn on the charm a little bit, be friendlier, be more outgoing, even more optimistic, right? Also, there’s a lot coming at you right now. So you’re having to juggle a lot more things. And then finally, man, I got to really pay attention to the details, because with all this stuff coming at me, I got to go here, right? So this is going on with what and when you did this survey, this was back in July of last year. So now a lot has happened in several months. So when I go into companies, we take a look, as you know, leadership’s top down, right, I have to understand the CEO to understand their vision, then I take a look at the team and when I do the team diagnostics, I’ll say to the CEO to begin with, look, if you had to pull the bus over and fire everyone tell everyone to get off the bus. Who would you hire back with enthusiasm? So what we start looking at are the team members and say, okay, I’ll ask them two questions. How long have they been there? And give me a score of one to 10 of their engagement? Or how good they are in your perception in the role. Right? So we go through the entire team, and they’ll say, okay, he’s a four. Okay, what would make him a 10? Well, he’d have to be more assertive or more this or more than that. And then I’d say, well, guess what? He’s not wired that way. Right? Einstein says, if you judge a goldfish by his ability to climb a tree, he’s going to think he’s stupid for his whole life. Right? So we go through the whole team, and we take a look at where are the strengths? Where are the gaps? Who do you need to, and because the bottom graph is telling me right, are you engaged? Are you mailing it in? Are you disengaged? Are you stressed out? Right? So we can read all these and use people say, man, have you been following me around for two weeks? How do you know all this stuff? Just answering these two questions? Right.
John Corcoran 23:59
And I have to say, I saw you and your colleague do this in a room full of EO San Francisco Board members. And it was on Kenny. Yeah, because I knew everyone in that room pretty well. And it was just kind of crazy. It’s like you’re jumping into someone’s brain and telling them their deepest thoughts and the way that they think about the world.
Phillip Baltazar 24:18
That the way they’re hardwired? Yeah, that’s what we’re looking at. And so here’s the thing. You know, we talk about hiring and how do you hire was usually subjective, right? It’s your gut feeling. Hey, a guy had a great handshake dressed well-presented well, great reference. Great resume. You know how many people rely on their resumes? 78%. Right. So nothing matters. So what we’re saying is like, look, we take its analytics over emotions, right? So what we do is we want to take all that subjectivity out of it, because this is science. This is math. The dots don’t lie. So listen, we’re not a recruiting firm, but what we do will help you identify what those critical traits are that are necessary to be successful in that particular role. And we have ways and technologies that help us really get down to that here. But we look at that, and then we start saying, okay, listen, it’s kind of like, money ball for CEOs, we go into companies, and you might say, oh, my God, this tackle, this offensive tackle, he’s got some hands, man, let’s move on to wide receiver. And then you take a look at the wide receiver, man, you’re paying him a lot of money, and you’re going to sneak is dropping the ball. So you say, okay, let’s move him to the defensive back. So we come in, and we start putting people where they’re the best suited for that role.
John Corcoran 25:42
So it seems like there’s value in it in thinking about the roles before you hire for the roles. But even once people are in your roles in your organization, super valuable to just look at their president engagement, and figure out if they’re in the right role, and that I imagine helps with attrition and people being engaged at work, and one makes the company more productive, and also anticipates if someone’s going to depart because they’re not happy doing the work that they’re doing.
Phillip Baltazar 26:10
I can predict, with quite a lot of certainty, if someone has their resume on the street or not based on what we’re looking at, right? So here’s the thing, making sure that you attract and retain the right talent is only 15, maybe 10% of what we do, the other stuff, which is and that’s easy for us, because it’s just math, like I said, the challenge comes in, is once you have them on the farm, what type of water and feed program do you put them on to ensure that they’re thrive? Because guess what, if you’re in the right role, doing what you’re designed to do, and build to do, you’re super stoked to come to work every day.
John Corcoran 26:53
So what do you mean by that water and feed program? Is that like a professional development type of thing? Or how you coach them? Or what do you mean?
Phillip Baltazar 27:00
Every trait every profile, we have 19 typified well, archetypes that we call them and with these archetypes, we teach, what are the needs? What are their wants? How do you motivate them? Right? What are the pros? What are the cons? And here’s the deal. We tend to hire people that are like us, because we know ourselves and we know what would need one. The challenge is, is how do you motivate and incentivize and manage people that are not like you? So example. What’s the golden rule?
John Corcoran 27:44
Treat others how you’d like to be treated. Yes, right.
Phillip Baltazar 27:49
That’s the golden rule. We teach the platinum rule, the platinum rule is treat others the way they want to be treated. Right? So what we teach is, let’s put on the glasses of the person who’s not like you, right? So again, if you’re one of these guys, I’m very assertive, very aggressive, entrepreneurial risk taker charger, that just wants to huge desire to win, what happens? What’s the tax, you run over a lot of people, right? So if you’re wired, the exact opposite, where you’re a team player, and you’re unassuming and you’re polite, and you need a lot of direction, you look at from their glasses, you look at this guy with all that assertiveness as a bully as a bulldozer. Right? So we also do the same that in the past, have you heard of it? The T-shirt exercise where if I had you a t-shirt, say okay, John, the front of your T-shirt, all the things you’re proud of law school, what you did your business is, what your mom says about you, your LinkedIn profile and your resume, right? That’s your billboard, the back of the t-shirt are all the things people say when you leave the room. So, for us to be effective leaders and managers and executives, we have to know thyself, we have to know who we are. Because only by knowing ourselves completely can we snap-leading. And you know, I promise CEOs two things. I promise to give them back their time, because a lot of times not more times than not right. You start a business.
John Corcoran 29:26
Yeah. To get your time and the right and then you find your busy as heck.
Phillip Baltazar 29:30
And you’re a slave to it. Right? 100 hour weeks, right. I give you back your time. And I give you back your trust. And the way I give you back your trust is that it’s transparent, right? So you don’t take things personally anymore, right? Hey, this is how he’s hardwired. Right? Let’s treat them that way. Let’s support him for this instead of making him fit into what we want him to be. Let’s make sure Listen, when we do team design, we need three elements mean gasps we need break and we are results and we need glue. Right? The glue is the social person, someone who’s going to make it fun to come to work, right? The gas is the driver driving all the revenue. And then of course, you have to make sure if I’m going to build the train, because I’m the big visionary, I got to make sure I got people a team that are going to ensure that it runs on time, right? So it’s like, there has to be balanced here. So when I go into a company, and I say to the CEO, okay, you raised 7 million this year or last year, where do you want to be by the end of this year? I want to be at 12? Well, listen, that’s a big delta here. But in order to do that, we better get a lot of gas on your team, right? A lot of assertiveness here, a lot of entrepreneurial vision, because, again, there’s people that live in the future that can anticipate things. And there’s people that live in the present.
John Corcoran 30:49
Yeah. And I’d like to mention that one of the interesting things about kind of the way that you’ve structured this whole program, is it’s not just like a one-and-done type of thing, take an assessment, assess all your team, and you’re done. There’s an ongoing consultative component to it. And I think that’s, it sounds to me, the way you’re describing it is, that’s kind of critical.
Phillip Baltazar 31:11
It is because you’re going to learn a new language, right? So we need everyone, the way that it works for us is that once we decide to engage professionally, the first thing will be a two day executive workshop where we do this knowledge transfer, right? But we want everyone that the CEO has empowered to lead direct, manage, incentivize, motivate and hire to the bottom line in that room, right? Because people don’t leave companies. They leave managers. Right. And I when I do the team assessment, when I do the team diagnostics, and I look at the first thing, I’m asked who’s the manager? And then we take a look at everyone underneath him, and I can take a look at is he micromanaging them? Is he not being president, the dots don’t lie. It’s pure. It’s analytics over instincts again, right, this is science. And so I hope I answered your question about what I meant by water and food program, because everyone needs, you don’t feed different animals the same foods. Right?
John Corcoran 32:11
Yeah. I imagine then that means that there are times when you’re kind of speaking some truth to power. What has that been like, if you’re in a room full of people, and you’re saying, there’s a lot of people that are disengaged here that I imagine sometimes you can even tie it back to a particular manager in the room who may be in the wrong seat. What does that like for you, as an experience of having to speak that, frankly, in a room full of an organization that kind of tell them this stuff?
Phillip Baltazar 32:47
Well, listen, going in there, we let them know, we’re known for two things in our industry, we’re known for our statistical accuracy, we have the highest accuracy in our vertical. And number two, we’re known for our radical candor. So I’ll ask the question, right? Do you want me to be academic? Or do you want to take the gloves off? Right. And of course,
John Corcoran 33:14
You get permission, basically.
Phillip Baltazar 33:16
I have to ask it. Because here’s the deal. I can read every single graph to someone and make them feel like a million bucks. Right? There’s no such thing as a bad profile. Right. And as such thing as a bad trait. Every trait has its purpose here. The issue happens when we put the wrong people in a role, right? One of our biggest mistakes that we make as business owners and entrepreneurs is that we take some stud who’s killer force, or some great saleswoman or someone who’s really top notch and they say, because you’re killing it. Let’s make my manager. Those are different skill sets. Right. I’m working with, I have a plumbing company down here, my a new client, 250 employee company, and been around for 50 years. And of course, loyalty has been a huge gesture, they always want to promote from within. So I go in there, and there are so many people that just said, when the owner said, hey, we want to move you up to this thing here. And they’re turned inside out when they’re coming to work everyday stress, because they’d prefer just to stay in the field and be a plumber, making me a manager. Right. So it’s all about again, right people right seats, and then this whole thing you hear about the quiet quitting. Or you’re like last week was like act your wage, right? Act your wage or so the thing is, if you’re doing what you’re designed to do, your love and life right, you’re coming you’re stoked. You’re being supported. We teach, let’s celebrate everyone’s unique talents and gifts that they bring to the table. Because everyone comes to the table with different gifts right now. And we teach you how do you manage someone who’s different than you, what kind of motivation they need, someone who’s a big social person, they want to come in, and they want to talk to you about the weekend. And when they get a prize, they want everyone to know about it, because they’re the queen of the party, but if you’re built the opposite way, you would prefer to do things that don’t talk back. So give them acknowledgement by tapping him on the shoulder. Hey, John, great work with that podcast today man, you really pulled out that information. It’s very specific. It’s one on one, and it’s what they want, right? Don’t ever try to pull someone who’s built that way up to the stage, man, right? They’re going to freak out. So again, it’s knowing how people are built, and learning how to incentivize and motivate them and coach them the way that they want. Because if we’re going to the good news about Well, here’s the deal. If 55% of the workforce today, we’ll change jobs. There’s good news, and it’s not so good news. The good news is, whatever you’re looking for, the talent you’re looking for is out there. Right? You might say, we can’t find it. Well, guess what? They’re out there and they’re looking. The not so good news is, is that if you don’t ensure that they are engaged and actively engaged, they’re going to be part of that statistic.
John Corcoran 36:35
Yeah. Phil, this has been great. I’m sure we could go on for hours. But where can people go to connect with you reach out to you if they have questions? Learn more about the work that you do.
Phillip Baltazar 36:45
Thank you. So there’s a link though. That will be in the notes, right? If you click that I’m offering everyone’s listening here a complimentary team diagnostics, right. And if you don’t get to that thing, I’ll say it very slow. My name is Philip Baltazar but my email address is pbaltazar@cultureindex.com. Or you can look me up on LinkedIn Phillip Baltazar and you can just DM me there.
John Corcoran 37:13
Excellent. Yep, we’ll put the link in the show notes. Phillip, thank you so much for your time.
Phillip Baltazar 37:17
Thanks, John. It was a pleasure.
Outro 37:20
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