Episode 135 – How a Founder of a Consulting Firm Generates 98% Employee Retention by Deploying a Blame Free Culture – Member Case by George Jagodzinski

As a firm scales, bureaucracy creeps in and slows the growth trajectory. Culture is a substitute for bureaucracy, and it allows a boutique to retain its identity as it scales. In this session, members will learn how a founder built a powerful culture with a fully remote work force, and how it led to outstanding business results.


Greg Alexander [00:00:15] Welcome to the Pro Serve podcast, a podcast for leaders of thriving boutique professional service firms. For those that are not familiar with us, Collective 54 is the first mastermind community focused on the unique needs of the boutique Preserve founder. My name name’s Greg Alexander. I’ll be your host today. And on this episode we’re going to talk about culture. Culture is one of those things it’s tough to define when you see a good one. You can almost taste it. There’s a direct relationship between a healthy culture and outstanding financial performance, and it’s particularly important in a professional services firm for the obvious reason. These are people driven businesses and boutiques in particular because they’re smaller professional services firms. There’s a heightened level of need for a healthy culture because it’s a small group of people. Couple of bad actors can make a real big difference. And in contrast, you know, those that are living the values can have an exponential impact on the business. So we have a role model with us today is he’s a member of Collective 54. His name is George JAG Uscinski. Did I get that correct? 

George Jagodzinski [00:01:37] You nailed it, Greg. 

Greg Alexander [00:01:38] Okay, very good. So, George, would you introduce yourself and then tell us a little bit about your firm? 

George Jagodzinski [00:01:45] Sure. Sure. So, George Jackson, scheme managing partner at activity. And Greg, this is going to be a test because we just did our messaging yesterday the first time out. See how it goes. Right. So we’re a tech consultancy that’s built different so that we can build better. We help our companies succeed by addressing their toughest and most meaningful technology challenges, everything from e-commerce to back office modernization, application development or cybersecurity. We build, we integrate, we design, and we deliver strategy. 

Greg Alexander [00:02:13] You nailed the man. That was fantastic, right? Did you guys. 

George Jagodzinski [00:02:16] Start for today? 

Greg Alexander [00:02:17] Did you do that internally? Did you hire a marketing agency to help you with that? 

George Jagodzinski [00:02:20] We hired a marketing agency to help us out. 

Greg Alexander [00:02:22] Yeah. Yeah, that’s probably why it went so well. So a little plug for our marketing members. All right. So the reason why you’re on the show is because you have this thing called a blame free culture. And it’s almost branded, in my mind that term. Blame free really jumped out at me. So let’s start there. Explain to the audience what that means. 

George Jagodzinski [00:02:45] Sure. Absolutely. And I guess I’ll start with it’s it’s one part of our overall culture. There’s a there’s a lot more to it. But for me, it is it’s really stepping into challenges with curiosity rather than frustration and anger. Myself, I’ve gone through this journey. Personally. I think my wife’s going to get a kick out of this, this podcast, because even a simple act of asking where I misplaced my water bottle, you’d think I was accusing her of grand larceny just in the tone of asking a simple question. And so, you know, we’ve gone through this internally for a long time, saying that we’re transparent where there’s trust and there’s there’s blame free. But I’d say we’re now in iteration 2.0 of that, at least speaking for myself, whereas I used to just kind of bury the frustration and I’d use blame free language in addressing a problem. But when you can truly and this is through lots of therapy, Greg, which I’m a big advocate of, is is if you can take those because it’s perfectly natural to feel frustration and anger about a problem that you encounter. But if you can, you can tell that emotion what to do, you can accept it and let it move on. And then you could shift to curiosity and then really dig in. Then it truly becomes blame free because there’s always a myriad of circumstances and reasons why things happen and 99.9% of the time, it’s not because someone’s a bad actor, it’s because of the situation that they were in, the information that they had at that time. 

Greg Alexander [00:04:07] Now my team tells me you have a 98% employee retention rate, which is best in class by a mile. Connecting the dots here that the blame free culture contributed to that. Is that true? And if so, how exactly? 

George Jagodzinski [00:04:24] I think it is. I think it’s an overall you know, when you’re in a place of trust and there were, you know, that you’re not going to be blamed for something. It’s comfortable. And part of what we call the integrity way is that the journey is as important, if not more important than the results, both in the way that we work internally, in the way that we work with our clients. And I find that it allows everyone to sleep better and just really come to work energized and comfortable. At my favorite moment at our culture is because what you said earlier, people talk about this quite a bit and it’s hard to nail down really what a culture is. There’s always this moment a few weeks in a few months into when someone joins where they’re like, either see it directly or someone lets me know that they said it like, Oh, they really do mean it. You know, they said it, everyone says it, everyone has their values listed and everyone says that they’re going to have this culture. But it truly does happen. And, you know, I, I think that the way we make it successful in our culture is first and foremost as a leader demonstrating it. So we’ve had some big challenges where, you know, I’ve gone in and I’ve demonstrated at a blame free approach and I’ve heard, you know, months, years later that that was really valued and that, you know, that makes them happy to come to work. 

Greg Alexander [00:05:37] You know, when I first heard Blame Free, I had some negative thoughts that went into my head, which shame on me, but I’m being authentic. If I wanted to say, well, how do you drive high accountability in a blame free environment? So address that for me. 

George Jagodzinski [00:05:53] Yeah, it’s funny because when I was going through my journey to I would say I know that were blame free it just in confidence of my partner. But at the end of days something went wrong. So wasn’t someone to blame, you know. And I think it comes back to that just a competitive nature that where you want to win, you know, you want to do better and so on, that someone has to have been to blame for this. And I think that you can you can still be accountable without blaming, you know, and and we also we have common language here where some will say, hey, I own this and, you know, that’s not going to happen again. And as someone says, I own this and this isn’t going to happen again. And we learn from that and we become better. All the all the best. Right. And and that’s where I come at it from a curiosity perspective is, all right, you are accountable for this. Now let’s make it better. Let’s look forward. Blame is about looking backwards. But really, if you want to grow as a company and as people and you’re always looking forward, and how do we do this better? 

Greg Alexander [00:06:46] So that’s a good distinction. Blame is backward looking, you know, capturing those learnings and moving forward. That’s a really good distinction. You know, another thing that jumped off the page at me in terms of some of your benchmarking data is that you have 100% client renewals. That’s incredible. Did this unique culture that you have there contribute to that, and if so, how? 

George Jagodzinski [00:07:09] Yeah, So so to give clarity to that point, that’s last year to this year. So that’s not over the past 20 years. That would be insane. I’d love that that number. But from last year to this year, that was still good. And I think what it is, is I mean, we’ve had clients, we have one Fortune 500 sports apparel company that’s been with us 15, six years. Our government client has been with us over a decade now at this point. And we’ve had CEOs, CEOs bring us into companies that go from one place to the other to the other. And I think a testament to that truly is that, you know, valuing the journey over the results, you know, we have a team of people who are they’re driven to deliver. They always do the right thing no matter who’s looking, and they’re team players. And what we find is when we plug our teams into our clients, we not just get the work done, but we elevate their teams and they’re comfortable with it. One of my favorite moments is, especially in technology consulting, you’re sometimes dropped into a situation where you’ve got teams that are just butting heads. People are unhappy. They’re, you know, they’re they’re kind of they’re blaming each other back and forth. Right. And one of my favorite moments with our clients is where we can not only get them over that hump, but getting their teams working better together, because in my mind, those are people that are now going home at the end of the day that are bringing a lot more positivity rather than negativity to the dinner table. And that brings us a lot of joy. And I think that doing it in a transparent way, I’ll use one example for you is we had a gentleman join with us quite a few years ago. He came from another consulting agency not to be named and about three months in we had one of those moments where he said, Hey, I’m used to navigating this. What’s true versus what should I tell you versus what should I tell the client? And I’m always so busy playing that dancing game, right? And he’s like, This is so weird. There’s really just only one story that we’re talking about and we’re all on the same page and it helps people sleep better at night. And I think our struggle, quite honestly, from a from a marketing and branding perspective is so many firms out there say that they work like this, but so few, I think, actually do, because not only is it is it is it difficult, but to operationalize it at scale. But. Comes even that much harder. And when our clients actually experience it, it’s this best kept secret that they just want to hold on to. 

Greg Alexander [00:09:30] You know, the community is also told me that your superpower, if you will, is that you’re able to do this in a fully remote environment. You know, the everyday you pick up the newspaper and there’s big companies for some people back to work and there’s a debate three days, four days, two days. What is it? You’re fully remote. So how are you doing this? And describe that superpower for us. 

George Jagodzinski [00:09:51] Yeah. So we just celebrated our 20th year this spring. Congratulation had the whole company. Thank you. Had the company together was fantastic. And yeah, we were remote since day one and it was viewed a little bit weird at that point. You know, people couldn’t wrap their heads around it like, so you don’t have an office at all. People are working wherever they want to be. And it’s been it’s been interesting. Even pre-COVID, you started to see more acceptance. But then during COVID, you know, the big shift. But I think for us, it’s forced us to address culture head on right from the beginning and think about what trust is and and and not just do an okay job at it, but really be fantastic, best in class at how we do it. And even then the logistics of that. We’re a big believers in Patrick Lindsay and his writings and he talks a lot about the team norms. You have need to have very clear team norms and you have to be very, very intentional about that when you’re remote. And I was quite honestly, I was worried a little bit when when everyone started shifting to remote, I thought we were about to lose this competitive advantage that we we had because we’re able to find the best talent wherever it lifts you. We’ve had the best. It’s iOS developers that they they live in a house in Lake Tahoe, right? And, you know, they’re getting their skiing in, but they’re also cranking out the best code you could ever imagine. You know, or we’ll have a, you know, a designer that’s hanging out on a beach in Miami. Right. But they’re designing some of the coolest stuff you’ve ever seen. But what I’ve seen with the this shift that’s happening now is, well, first of all, I think a lot of people are kind of messing it up the hybrid and remote work. And then, you know, as I’ve I’ve thought about it, I think there’s something to be said for that. We we did this in an intentional way from the start because of our belief in people and how we we trust and value them versus as a reaction to what’s happening around us. 

Greg Alexander [00:11:43] Yeah, I agree. I mean, I’ve been doing it for 20 years way before anybody else was doing it. And because of that, you have all that institutional knowledge, so you do it well. Many of the firms these days doing it for the first time. I mean, so any time you do something for the first time, it takes way too long. You screw it up, you make mistakes, you know, and then you move down the learning curve and eventually get really good at it. So I think it is a strong competitive advantage for you. And what I found interesting was your strength is your culture, this blame free culture, but it’s origination was you’ve been remote from inception. You had to be really good at culture because your org model was a distributed workforce. Sometimes when people work, you know, central, they can kind of blow culture off a bit because they can get where they need to be, maybe through micromanagement, supervision, brute force, whatever you want to call it. But you guys didn’t have that choice. You had to be really good at it from the from the get go. So that’s a really interesting thought. Okay. Well, we’re out of our time here. I want to direct the members of Collective 54 to pay attention to when the meeting invite comes out for George. This gives you your opportunity to double click on his story. It’s a private session, as you know, and you can ask questions directly of him that go in much more depth and we’re able to cover in a short podcast. So check that out. If you’re not a member and you think something like that might be interesting to you, we do that every week on Fridays. We call it the Friday rule model session. Go to collective 54 dot com, You can fill out a form and one of our reps will get in contact with you. And then if you want to expand beyond this subject, this is one of many things we cover. I’d point you towards a book. It’s called The Boutique How to Start Scale and Sell a Professional services firm written by yours truly, Greg Alexander. You can find that on Amazon. But with that, George was great to have you today. Thank you for being a contributing member to our tribe. We’re better for it and I wish you the best of luck as you move forward in your blame free culture. 

George Jagodzinski [00:13:36] Thanks, Greg. I appreciate it.

Greg Alexander [00:13:38] Okay. Take care. Thank you.

Episode 134 – How to Capitalize on the Shifts in Labor Cost Across the Globe – Member Case by Satyam Kantamneni

Offshoring, or Nearshoring, is a proven method for founders to earn more. However, in a post pandemic world the acceptance of remote work has increased, and this has had a profound effect on labor costs across the globe. On this session, Collective 54 member Satyam Kantamneni shares how the cost per hour shifts by location, and how to take advantage of the opportunities being created.


Greg Alexander [00:00:10] Welcome to the Pro Serv Podcast, a podcast for leaders of thriving boutique professional services firms. If you’re not familiar with us, Collective 54 is the first mastermind community dedicated to the unique needs of founders of boutique pro serve firms. My name is Greg Alexander. I’m the founder and I’ll be your host today. On this episode, we’re going to talk about how professional services firms can improve their margins by leveraging a global workforce. And this is a topic we’ve discussed in the past. However, there’s some interesting dynamics that are happening different places across the world, and I wanted to bring an expert on and have him give us an update on what’s happening. So we do have a role model with us. His name is Satyam Catalini. I hope I got that correct. Satya, it’s good to see you. Please introduce yourself to the audience. 

Satyam Kantamneni [00:01:14] Awesome. Thanks for having me, Greg. It’s a privilege. Yeah. And I run a boutique design firm or UX design firm based out of Pleasanton, California. But we have presence in Colombia and India, so it’s kind of fascinating to have a conversation on this site. 

Greg Alexander [00:01:32] Yeah, very good. So let’s start there, if you wouldn’t mind. Maybe compare and contrast the the labor cost for those that would be employed by a professional services firm in the U.S., in India, in Colombia, since you’re operating in all three geographies. 

Satyam Kantamneni [00:01:50] So I think before I kind of come into contrast those numbers, I would probably break it down into maybe two categories. Okay. I would call it the knowledge worker category versus the back office category. 

Greg Alexander [00:02:01] Got it. 

Satyam Kantamneni [00:02:02] So the knowledge worker category is where we plan, which is people are directly engaging with clients and driving staff and are being paid as experts rated where they are in the globe. So when you look at and both of them have a very different labor structure, both in terms of cost training, grooming, everything else that goes to it. So I can at least share with you very quickly in our context, when we talk about the knowledge workforce, we actually a dollar in India, that means for labor cost translates to a dollar $0.40 and Colombia translates to about $3. In the United States. That means for the same talent, I pay $3 in the U.S., I pay a dollar in India and dollar 40 in Colombia for knowledge for workforce. That number changes significantly When you are looking at back office fare, you know, it’s basically a dollar in India, it’s a dollar in Colombia and it’s about $4 and in the United States. And just because it’s cheaper in India and Colombia, when you look at back office where there’s no direct working with any of the stakeholders. So that’s kind of what I would kind of on a high level to kind of share with you some numbers on that side. 

Greg Alexander [00:03:20] So very interesting. I’m already thrilled that you’re here because I was not distinguishing between the knowledge worker in the back office, and that was a mistake in my behalf. And I understand the distinction and it’s an important one. You know, it strikes me jumps off the page if we use your metrics here, that in the U.S., it’s three bucks for knowledge work and $4 for back office. That seems upside down to me. So if I’m understanding that correctly, the knowledge worker in the U.S. is making less than the back office worker in the U.S.. 

Satyam Kantamneni [00:03:52] To a large level just because the labor cost is much lower in India and in Colombia. Right. So that’s why the ratios are. So again, if it’s it’s $80,000 to get the Senate contract and nine states, you can get that for 20,000 in India. 

Greg Alexander [00:04:08] Okay. 

Satyam Kantamneni [00:04:09] Right. Whereas it’s much more expensive to hire knowledge workers outside the country because remember, the variables that are on language, Colombia is not always bilingual. So you got to pay a premium for that. Again, if they have to kind of be an expert so you pay a premium for knowledge workers when you’re outside, but still it is cheaper. 

Greg Alexander [00:04:30] Yeah, makes sense. Okay. Very good. And it’s nice to hear how it’s dimensionalize. Language is one of the dimensions. Now, from what I understand, the labor market, the talent market for knowledge work offshore is tightened a bit and that these costs are changing in these different geographies. I’d love to hear about that. Maybe how that’s changed over the last, I don’t know, three or five years. And then also, I’d love for you to project out, at least to the best of your knowledge, where you think that’s going. 

Satyam Kantamneni [00:05:00] So the interesting thing that I would say we are starting to notice in the post pandemic, the labor markets are actually rationalizing very fast. And I say that because and I’ll give you an example. In Colombia, for example, people are directly hiring. In Colombia, they are willing to pay a premium for that. And especially with this whole remote working by mindset, people are like, If I was just going to hire somebody who’s going to work, you know? We are in terms of time that I’m gonna be like, um, I don’t, I just cross the border and then hire somebody in Mexico and Colombia. So that just a bit changing a lot and that so when we started the process with Colombia, the ratio between India and Colombia was only one is to 1.2 and it inflation eased because of this, because people are directly willing to care about somebody in Colombia and or in any of the negotiating facilities and bring people in. So that’s changing and I continue to see that happening. It looks like, you know, even in your team you have people and to the country and that’s what’s happening. People in the United States are relocating to other parts and then they are willing to take a little cut, but not too much because they’re still being paid for their impact. So I see five years from now, this will normalize a lot more If you’re looking for finding lottery talent. And that’s another differentiation I would make as lateral talent is going to get be more and more premium, you’ll still see a variance between hiding in the United States with other just because the cost of living is different. But for a good talent, you start not to start normalizing, but for entry level talent, it’s a totally different game store system. And then I think that is where the value is, where if you kind of have a good grooming system, if you have a good way to kind of onboard people, you can continue to keep those margins pretty high. 

Greg Alexander [00:06:55] Yeah, it’s a great lead into my next question. I understand that your firm UCS Reactor has a fantastic way of hiring an entry level developer in them, grooming them over time. So please share that with the audience. How are you doing this? 

Satyam Kantamneni [00:07:09] So I come from a military background. Right. And then and so. And one thing that the military and most professional military still really well, as they groom people, they select people on aptitude and attitude. They drill them well with techniques and then better what they are at the fighting force. They all have the same language and the same structure. The same applies to us. So irrespective whether somebody is in Colombia, somebody is in India, somebody is in the United States, they all have the same vocabulary, the same structure, the same process. There’s no inconsistency between how things are done. So that is the foundational, I would say, structure to make that happen. That means you have to kind of select people on the same variables of aptitude and attitude. You kind of run them for the same variables. You drill them, you coach them in the same aspects. And the best part of this also becomes the camaraderie because everyone’s gone through the same drill and because the back office model has always been structured around the high end work is done by someone else, the low end work is done by someone. So that’s a different mindset and I think that that works well. That’s how most of the offshoring has worked and it has its own, you know, a benefits being. You can run a 24 hour cycle, especially if you’re working at halfway around the world. But I can obviously knowledge working side that is is a big factor that’s continued to kind of allow us to thrive. So when you take and for that to happen, you need to have a good relationship with that in your intake processes like with the universities. But where we are bringing up talent and how do you select them, how do you groom them? So that’s what we’ve been doing really well. And once that system is in the rhythm, the supply side of talent keeps going on. And the good thing is, you know, three years down the line you will have people are three years and then you have four years of learning for years and tenure that the pyramid of people will start and yet that attrition happens. You’ll still treat in a good model of people coming in again, very much like the military. And then everybody is a mentor and everybody’s a mentee and it just continues to be a nurturing system. 

Greg Alexander [00:09:11] Yeah. So let me ask you about the mentor mentee, and I’ll use myself as an example just because the people that are listening to this are members and they can resonate with that. So we we have partnerships with universities, two in particular, Baylor University and TCU here in Texas. We’re based in Dallas and those are schools around us and we’ve partnered with their career development office and we’re bringing young talent in and we’re screening for aptitude and attitude. It’s making me feel good to hear you say these things. And then we’re, you know, we’re growing these people over time. The strain that that does put on the system is that, you know, the quote unquote, senior people now have to, through the apprenticeship model, they’ll have to help groom the young people. And we run into some resistance there, not only inside of our firm, although that’s modest. But when I share this idea with others, the sometimes the founders of these firms say, no way, I don’t want to be running a daycare center. I just want to hire very senior people and not have to deal with all this. I think that’s a mistake. I think a talent supply chain is mission critical to scaling a boutique processor firm. But what would your response be to someone who might share that concern? 

Satyam Kantamneni [00:10:19] It’s getting. If I had. The opportunity to hire everybody who’s lateral, everybody who’s motivated, everybody’s enthusiastic. Absolutely. But as we all know, as people get more tenure, there are different things that can motivate them. And, you know, they they’re happy coaching, but they’re not happy doing. And so when you start looking at doers and there’s a lot of that that’s needed and especially outside of work and people are excited about being a new client and so on and so forth, there is a benefit of having hyper enthusiastic folks. That’s why I read General is not coach and they know holding the gun right there. So there’s also everybody has a role there. Now, to your point, you know, it’s all coming. It comes down to having a system, a system that’s in rhythm. And the system here as it and we run something called a skill based system that means and given that we work in a construct of what we do as a profession, you know, it goes all the way from an entry level, you know, a designer to a chief design officer in a company. So it’s a profession all the way. And so the skills of Chief design officer has a very different set of skills and an entry level has a different set of skills, is we teach skills and teach. And that’s the thing where we don’t need a senior to teach someone how to work. Let’s say, for example, do a competitive analysis. There’s there’s methods there. There is watching videos, there’s artifacts there. So a lot of that is already out there for them to get to 0 to 80. And and again, with people the right attitude and attitude. This is a generation where you can sit on YouTube and learn coding over the weekend and then code something. I mean, if you have the aptitude and attitude, you can do a lot of things. You just enable that. 

Greg Alexander [00:12:01] Yeah, I’ve been blown away by how capable this generation is, I think, and I might be getting this wrong, but I think they’re called Gen Z and they come after the millennials. Millennials who got a bad rap, maybe rightfully so in some cases. But the Gen Z, the the let’s call it the newly minted undergraduate up to maybe, I don’t know, 25, 26, 27 years old. It’s been miraculous of how capable they are. And for the things that you just said, I mean, they grew up, you know, this way, doing things this way, right? Instead of coming to you with every little question, their first thing is to go to YouTube and try to figure it out on their own. So and I share that with members just because I think maybe sometimes our members have a misconception as to what this really is. You’d be surprised at how self-reliant and how capable this group is. All right. Well, I’m sure we could talk about this forever. We try to keep these podcasts short. We will be having four members that are listening to this, a Friday role model session with Santa. Look for that meeting invite. This will give you an opportunity to double click into this and much greater detail and ask direct questions of Satya and he’ll share more and more of his knowledge with you on that. So that’s my call to action for members. Look for that invite. If you’re not a member, I would encourage you to become one and you can do so at collective Fifa.com fill out a form and one of our reps will call you as an inspiration to me. Just heard it’s three or 4 to 1, you know, in some of these countries. So if you’re a boutique processor firm and you’re not tapping into the global talent supply chain, that in and of itself is a reason to consider joining. And if you’re not ready to join, but you want to read more about the types of topics we discussed in addition to this one, I would point you to our book. It’s called The Boutique How to Start Scale and Sell the Professional Services Firm. You can find it on YouTube. Satyam, thank you for coming on the call today. I always enjoy our chats. Glad that they’re happening more frequently and thanks for contributing to our collective body of knowledge today. 

Satyam Kantamneni [00:14:01] Absolutely. Thank you for doing that great stuff and collect it for people. 

Greg Alexander [00:14:05] Okay, very good. Have a good day.