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Introduction:
This week, Jay Goltz tells William Vanderbloemen that even with an inventory glut, a cash crunch, and a weakening economy, he’s not going to stop buying goods for his home store: “It’s kind of like cutting Samson’s hair,” Jay tells us. “I don’t want to mess with telling the buyer, ‘Stop buying stuff.’ Because that’s the business we’re in.” All of which has Jay feeling some pressure, but he’s very glad he’s been maintaining a credit line equivalent to 10 percent of sales. Plus: William explains how hiring can go wrong even at a staffing company and how he managed to raise his prices without actually raising his prices.
— Loren Feldman
This content was produced by 21 Hats.
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Podcast Transcript
Loren Feldman:
Welcome, Jay and William. It’s great to have you here. So we’re just about done with another quarter. I think you both came into this year feeling somewhat optimistic. How’s this year been going for you?
William Vanderbloemen:
Well, we’re recording on the day before the end of the quarter. So I’m a little reluctant to say things that might ruin the end of the quarter.
Loren Feldman:
You’re expecting a big day?
William Vanderbloemen:
Well, we are a lumpy business. But yeah, there are a few things that should come in today and tomorrow. But even if nothing comes in today, or tomorrow, I think Q1 is better than last year’s Q1 across the board.
Loren Feldman:
Nice.
Jay Goltz:
How was last year, though? Is it just because last year was slower?
William Vanderbloemen:
No, last year was our record year.
Jay Goltz:
Good for religion.
William Vanderbloemen:
Will we finish 3 percent ahead of last year’s first quarter or 12 percent? That’s what I don’t know. And I’ll find out in about 36 hours.
Loren Feldman:
Wow, that’s a sizable range.
William Vanderbloemen:
Well, that’s why I said I’m looking for wood to knock on.
Loren Feldman:
And do you think you’re having a good year for reasons that are related to your own business? Or the labor market? The economic climate? What do you attribute it to?
William Vanderbloemen:
Well, I’m not an economist. So I don’t know how to comment on fears of what the economy may or may not do. A couple of things have happened for us that are really pretty interesting. We do searches for all kinds of organizations that are values based, but it all started with the question: Could we help churches find their pastor faster and better? Could we fix that? And it was a new idea for churches, and churches are not best friends with new ideas—not the most innovative organizations, as a whole. So just the idea of even calling a church to say, “Would you be interested in us helping you find your pastor?” That would be anathema.
And so for 15 years, I thought, “Well, maybe by the time I’m done doing this in another 10 or 15 years, it’ll be a more normal idea.” And we were getting there. It was starting to become more normal. I think, Loren, that the pandemic actually accelerated that trend. Several things happened in the church market that got accelerated by the pandemic.
Online giving was already a trend that was happening, but now it’s just de facto. Whether or not you can have services online, it was happening, and it was going to eventually become normal for everybody. But the pandemic accelerated that. I didn’t foresee it accelerating the trend of churches hiring a search firm, but it seems to have, because now we’re much more proactive. We actually have outside sales, which we’ve never had.
Loren Feldman:
When did you start that?
William Vanderbloemen:
In August of last year.
Loren Feldman:
And it’s gone well?
William Vanderbloemen:
Better than I ever thought it would.
Jay Goltz:
You know, now that you mention it, I think it gives a whole new meaning to the phrase, “We’ve always done it this way.”
William Vanderbloemen:
That’s right.
Jay Goltz:
Yeah, no, that makes sense.
William Vanderbloemen:
And rightfully so. You know, if you’re a layperson, if you’re looking for the person, you feel the weight of responsibility. Like, “This is a holy task, and I’ve been asked to do this. And if I ask for help, that’s like…” First-time clients, for the longest time, I’d say, “You know what? You sound like I felt the first day I went to counseling. ‘Why am I here? I’m a little embarrassed. I don’t need your help.’” And that’s shifted and changed. And I think the pandemic accelerated that. It’s too early to call—and we’ve only been doing outside sales for six months—but I really believe the biggest lid to our growth is not having more salespeople right now.
Jay Goltz:
There’s a definitely a shortage of rabbis out there. There are far less graduating than there used to be. Is it the same thing in other religions?
William Vanderbloemen:
Well, I can speak most fluently for the Protestant church in the United States. We work all over the world, but that one particular market I know better than others. And I think there isn’t quite yet, but there will be. You know, by birth rate, you’ve got Boomers still retiring, which will probably happen for another 10 years or so. And then the group right behind them, there just aren’t as many. There weren’t as many babies born. And then you get to Millennials and Gen Zs.
And the average age of a seminary graduate in Protestant U.S. right now is about 35 years old. It’s usually a second career choice. We don’t really know yet what the Millennials and Gen Zs are going to do. So I foresee it being a huge supply-demand issue. There already is in student ministries and children’s ministries, which are usually much younger people. But more than that, the concept has been proven that you can hire outside help. And it’s not unfaithful, and it works. And it’s worth the investment. And I think that’s some of what happened.
And, Loren, the other piece is not just the sales side but actually the delivery of the service. Our COO is just doing a phenomenal job building a great team. And she’s had to change a lot of people out, but she’s just done a really great job.
Loren Feldman:
Tell us about the approach of your outside salespeople. Are they pounding the pavement? What are they doing?
William Vanderbloemen:
It’s probably more like wading into the water. So like, as you know from when we met, everyone in our company is required to produce content for our blog. And the sales that we’ve had traditionally have been people who read our blogs and attend a seminar, or maybe they listen to this podcast. And eventually on our site, they get to the point where they’re like, “I’m filling out a form. Please contact me. I’d like to talk about whether or not you can help us.” So it’s all inbound.
So the way we’re currently dealing with outside sales is, “Okay, we’ve got three pretty solid leads in Atlanta”—pick a number, five, seven, three—whatever would justify flying a salesperson there. “While you’re there, go pound that pavement.” So it’s not purely cold. It’s, “I’m already going there anyway for these things, so let’s see what I can rustle up while I’m gone.” And it’s been, “If I send Will out to Denver with four leads, he comes back with eight contracts.” It’s been kind of like that.
Loren Feldman:
Wow. That does sound good.
William Vanderbloemen:
Yeah. And as you know, I’m not chasing meteoric growth. I mean, you’ve known me a long time. I think 5-to-15 percent growth is really underrated these days. I think it’s just such a solid, compound interest to chase. And the whole fake-it-till-you-make-it, and, “We tripled this year, but we’re not making any money,” I just think that’s a house of cards.
Jay Goltz:
Well, if nothing else, it’s extremely demanding. If you grow 30 percent a year, when you add in just the natural people leaving on their own, you’re going to be replacing half your staff every year. Like, how do you do that?
William Vanderbloemen:
That’s right. You hire a good search firm, Jay. [Laughter]
Jay Goltz:
Yeah, hmm. I’ll make a note of that. Let’s talk about what’s changed since the last time I used a search firm, which was about 25 years ago. I recognize that the world’s changed dramatically, and that perhaps, being a search firm now has more advantages than it might have had 25 years ago. Because 25 years ago, they were just sticking ads in the paper just like I was and getting people and sending them over, versus now they’re probably more—not probably—they’re more skilled at going through LinkedIn and figuring out how to actually recruit people. Can you speak to that?
William Vanderbloemen:
Well, I’d say there are different advantages than there were 25 years ago. It used to be, you hired a search guy because—now, I hope that we have listeners who don’t know this word, okay? My staff didn’t know this word. But you would hire a search guy because he had a great Rolodex.
Loren Feldman:
We know that word.
Jay Goltz:
Yeah, I have one on my desk with my Day-Timer. [Laughter]
William Vanderbloemen:
You don’t have to share everything, Jay.
Jay Goltz:
Full disclosure: That’s how we are on this show.
William Vanderbloemen:
So I mean, that was the value. It was, “Oh, I’m gonna hire him because he knows people. And he can go talk to them offline.” I mean, like every show and movie where there’s a search guy, it’s always in a dark alley or a smoky room. Or it’s pretty clandestine, and, frankly, unsavory.
So the reality is, now, unless you’re dumb, everyone has the same Rolodex. It’s called LinkedIn. And it’s not a matter of finding people. It’s finding the fit. And frankly, I think that’s why we’re growing. It’s not because I know people they don’t. It’s like, “No, will this fit?” And if you hire this one, you’re going to definitely get these things, but you don’t know about these things. When I talk to people now, we act like a Sherpa. Like, “You’re going to summit this mountain, and we’ve been up and down it 3,000 times. So we can tell you, ‘Don’t step here, do step there.’”
Jay, here’s a cleaner way to say it: We survey new clients. What do you think you’re gonna get out of this? What are your expectations? Top expectation of a brand new client every time is, “You’re gonna bring us names we don’t know.” When we’ve finished the search, we say, “Okay, what happened in the search? What benefit did we bring? What value did we add?” The number one answer almost all the time is, “Wow, you managed the process and helped us understand who would fit.”
Loren Feldman:
William, you mentioned that your COO had to make some changes in your own shop. Especially given what you do, that’s kind of intriguing. Was there a theme to that? Was that an issue of fit? What were you talking about there?
William Vanderbloemen:
Boy, I don’t know how much I want to share publicly.
Loren Feldman:
Without getting into details, which I completely understand, can you tell us—as a recruiter, did you learn any lessons from what your COO went through? What did he take away from it?
William Vanderbloemen:
Yeah, well, our prior COO, who did a nice job for us and really did a great job steering us through the pandemic, had hired a lot of people. And I think I was negligent in delegating that hiring to him without looking at it more closely, because he is great at getting tasks done. But I think he hired some people just to fill spots. And he hired hastily. And we got some people who were nice people, who had a lot of talent, but frankly, had no business working for us. We didn’t run through our normal hire for culture.
It was just done hastily. It’s in the middle of a pandemic. We’re all working remotely. We had a staff who, frankly, had not met each other. And as we came out of the pandemic, it just got clear. Like, man, not all these pieces fit together. And so we didn’t have to go firing a bunch of people. But Jen, our COO, did a really great job of raising the bar enough times that some people just sort of said, “I don’t know that I want to jump that high.”
And that could be around culture, it could be around performance, it could be around how we do one-on-ones. And she spent a good bit of time replacing those people. She took her time. She hired around cultural values, and it’s not like a wholesale change, but the changes she has made are just visible. The culture is as good as it’s been in a long, long, long time. And yeah, I mean, we’re still figuring it out, but she’s just done a really nice job. Probably because she went to Princeton.
Jay Goltz:
Wow. I don’t have anybody working for me who graduated from Princeton. I’m really envious. How’d you do that?
William Vanderbloemen:
That’s the funny thing: Search expert, how’d you find the great COO? Do you know this company, Lush Cosmetics?
Jay Goltz:
Sure.
William Vanderbloemen:
So she ran that for North America. Ran the whole thing for North America, left there several years ago, started her own company, developed a sports bra. It had a particular appeal that wasn’t on the market. Built that up until it was time to either build manufacturing plants or sell. She sold it, and she was sitting around saying, “Gosh, I wish I could use my education and my business sense to help build something for the church.” And she lived about a mile from our office, and she found us on LinkedIn. [Laughter]
Loren Feldman:
She found you.
William Vanderbloemen:
On LinkedIn, yeah.
Jay Goltz:
Okay. Well, it makes sense. She wants to do something for the church. So you have a little advantage with that.
William Vanderbloemen:
Yeah. But I mean, Chicago Business School, Princeton undergrad, runs a $500 million company. She lives a mile from me, and I can’t find her? So much for me being the expert. She found us.
Loren Feldman:
Jay, what kind of year are you off to?
Jay Goltz:
There’s no question that the market’s a little soft. If I was to go back over the years and chart the stock market to sales, there’s clearly a relationship. It’s a little soft. I’m suffering the end of the pandemic problem, which is, my guys were out there buying all kinds of cool, interesting things for my home store. And it was all tied up and couldn’t get over here, and then whoosh, it’s all coming in now. And I’ve just got a tremendous amount of inventory, and it’s gonna take me the rest of the year to get it back under control.
Loren Feldman:
Did you say it’s still coming in?
Jay Goltz:
Oh, yeah. I mean, it’s just, you couldn’t get stuff.
Loren Feldman:
The supply chains have been cleaned up for a while now, haven’t they?
Jay Goltz:
To a degree. But you know, my buyers literally go around the world looking for cool and interesting products, and they’ve gotta fill a container. And as you know, the containers, they were tied up. And I’m not saying it’s happening today, but just a few months ago, the stuff started coming in. And I just have a tremendous amount of inventory. And I’ve got a ton of money tied up in it. And it’s gonna take me the rest of the year to work down.
But to make anyone feel better who’s got a cash crunch, even after 45 years, it still is a problem. And I’m gonna work through it as I always have. But still, I can tell you, it just weighs on you subconsciously. It just weighs on you. And I’m not afraid of bank debt. I’ve had bank debt for many years, but using up big lines, it just wears on you a little bit.
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