Emotional Intelligence is Just as Important as any Other Skill: as an entrepreneur, you are asking a group of people to invest time, money and effort in an idea. To do so, you must truly understand not what motivates you, but what motivates them and how you can help them along the path to your vision.
As part of my series about “companies and organizations making an important social impact, I had the pleasure of interviewing Michael Dermer. Michael is an entrepreneur, lawyer, speaker, coach, founder and author of The Lonely Entrepreneur — a one stop shop that understand the entrepreneur’s struggle and provides solutions to the business and personal issues we all face as entrepreneurs. Michael founded and sold the first company to reward people for being healthy and is considered a pioneer of the health rewards industry. Michael’s book is based on his experience of watching the company he built from the ground up almost get destroyed overnight by the financial crisis of 2008. Today, Michael’s mission is to help unlock the potential of entrepreneurs worldwide by turning their passion into success through The Lonely Entrepreneur Learning Community.
Thank you so much for doing this with us! Can you tell us a story about what brought you to this specific career path?
Running The Lonely Entrepreneur has been an honor and a blessing. But it was a tumultuous road getting there. I started my career as a New York corporate lawyer at a large, prestigious New York law firm. But I wanted to start a business. And after three years I stumbled upon and found my calling. I started the first company in the United States to reward people for being healthy. So, I left my big law job to pursue this idea.
We bootstrapped it. And the idea of rewarding people for being healthy was not only non-existent in the healthcare industry, it was offensive. The industry said, “we are never going to pay people to do the things they should be doing for their health.” But we knew we were onto something.
The early years were lean trying to convince the industry. But in 2006 (after about 5 years), we started to grow a lot. By 2008, we had exploded. Health rewards was the new thing and we were the ones that had been talking about it and doing it since 2001. We had “made it.” And then the world came crashing down around us. The company we had built from nothing to hundreds of employees nearly got destroyed overnight by the financial crisis. Our three largest clients — Washington Mutual, Countrywide Financial and General Motors were all on the brink of bankruptcy.
The next 3 years were crazy — working 20 hours a day to try to save what it took us 10 years to build. And we battled every day. I used to say that I got kicked between the legs about ten times a day. But I just stopped noticing.
Fortunately, after the financial crisis, we started to grow again and got approached by a company we had known and sold the company. So, it worked out great, but it was a wild wide to say the least.
After we sold the company, I was just chilling out in New York where I live helping entrepreneurs for fun. Just to try to help a little. And one of them said to me, “being an entrepreneur is really lonely.” And the birth of my next passion took hold.
So, we started The Lonely Entrepreneur with writing a book by that title and today our mission is to empower entrepreneurs worldwide by turning their passion into success.
Can you share the most interesting story that happened to you since you began leading your company?
It’s hard to top the one above.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
When I first started my healthcare company, I had just left a prestigious law firm where I did mergers and acquisitions. Like most New York corporate lawyers, it was common to work until 10 p.m. When I started my healthcare company, I just thought that everyone should work that hard. When I hired my first couple of employees, I was baffled why our customer service representatives making $45,000 per year didn’t work until 10 p.m. Boy did I have it wrong. Now I understand the weird looks I would get from them.
But I learned a valuable lesson. The success of a company depends on its talent. And not just talent that sits at the C-suite. The goal of the leader is to unlock the potential of the talent throughout the organization. And after we had emerged from the financial crisis, we implemented something that really changed the game for us.
When the dust had settled from the financial crisis, I was really focused on my job as CEO to unlock performance. And not just being 3 percent better. I was really focused on getting breakthrough performance. So, we implemented something that we currently call “Help Employees with Their Bucket List and Performance Will Follow.”
We asked every employee “what do you want?” Most of them answered as you would expect. I want to know the product better. I want to be better at talking to customers. We stopped them and told them “we don’t want to know what you want here to be a better employee, but rather what you want in life?” They looked at us strange at first. But then they started sharing. One wanted to be an opera singer. One wanted her Mom to quit smoking. One wanted to learn how to cook. Once we found out what they wanted, we took the resources and the relationships of the company and got them what they wanted.
And guess what happened. Performance went through the roof. People started working harder. People started showing up to training sessions. It seemed like everyone was more proactive about solutions to problems. The email traffic on the weekends went through the roof. We helped everyone with the things that were important, and they became driven, loyal employees.
My early misaligned expectations (to say the least) helped open my eyes to what really could move the needle for not only the company but for our people.
Can you describe how your organization is making a significant social impact?
Being an entrepreneur is not a job. It is an identity. There is nothing more personal than bringing a vision to life. We get to wake up every day and help entrepreneurs live more fulfilling lives. And for every entrepreneur that can afford a coach, or who is in an incubator, there are thousands that aren’t. So we created an extensive online learning and community platform — called The Lonely Entrepreneur Learning Community — that is a one stop shop for the knowledge, tools and support every entrepreneur needs. This gives us the ability to help entrepreneurs everywhere.
And recently we have formed The Lonely Entrepreneur’s 501c3 non-profit where we look to help groups like women, minorities, youth and the underprivileged who might otherwise not be able to afford our services have access to our services.
Wow! Can you tell me a story about a particular individual who was impacted this cause?
No question The Lonely Entrepreneur’s Global Head of Operations, Victoria Sherman. I met Victoria at a social function, and we were just talking about my idea around The Lonely Entrepreneur. She had been working as Director of Finance for a mid-sized publishing company but wanted to “do more.”
So, after we met, despite the fact that she had a full-time job and was divorced and raising two girls on her own, she would regularly work on The Lonely Entrepreneur. from 9 p.m. for hours after she put her girls to sleep. She did that for over a year for no pay and only because it became her passion. Then I made the best decision I ever made and hired her a year later. She has been instrumental in everything that is The Lonely Entrepreneur from writing the book, to launching our Learning Community to starting our women’s programs and our non-profit.
Are there three things the community/society/politicians can do help you address the root of the problem you are trying to solve?
Everyone either is an entrepreneur, wants to be an entrepreneur or will work with an entrepreneur. Entrepreneurial skills are no longer a “nice to have” — they are critical skills that are needed to compete in a hyper competitive world. Given this new reality, governments and society must empower individuals with the tools for success. These incude:
- Education: current and future entrepreneurs need to develop a series of business and personal skills to give them a better chance of success. This education must start at early ages in high school and even in middle school. Investments should be made in curriculum and technology to bring entrepreneurial learning into the forefront along with basic business curriculum.
- Small Business Funding: funding for businesses that have already achieved success is easy to find. But funding programs are needed to spur entrepreneurism in early stages. This could take the form of federal guarantee programs of loans made by banks to small businesses. While certain Small Business Administration (SBA) programs like this exist today, they often require the borrower to post collateral in amounts equal to the loan. This disqualifies most entrepreneurs. Loans should be made by banks and guaranteed by the federal government in order to spur investment in entrepreneurism.
- Regulations: too many states make it difficult and costly for entrepreneurs to start businesses. In fact, the states that have lessened the regulatory burdens on small business have been rewarded with some of the largest job growth in the United States. Efforts must be made to lessen regulations to give entrepreneurs the best chance of success.
Entrepreneurism is the lifeblood of new job growth in the United States and the more we can do to make entrepreneurs successful the better.
How do you define “Leadership”? Can you explain what you mean or give an example?
Leadership is the ability to set a vision and motivate and empower others to work toward that vision. Whether you are starting a company, growing a team or going into battle, leaders are able to inspire others and provide them with the tools they need for success. Leadership requires several skills such as
- Ego: to lead, you have to have the confidence to set a path and follow it — often in the face of great adversity or challenges. In our healthcare business, we told the healthcare industry they would do something they said they would never do — pay people to be healthy. That takes ego.
- Humility: great leaders are great learners. So, while ego is important, so is embracing improving your skills each and every day. This humility empowers you to focus on whatever it takes to succeed.
- Emotional Intelligence: leaders understand that what motivates them may not motivate others. They take into account the factors that drive people and the circumstances they are operating in. Every situation requires a different action and understanding when to apply what solution is an invaluable skill for leaders.
- Discipline: the ability to bring discipline and order to driving a team is essential.
- Communication: great leaders are great communicators. They are able to take complex ideas and simplify them so everyone on the team knows what to do and why they are doing.
- Perspective: Rudyard Kipling said “If you can keep your wits about you while all others are losing theirs and blaming you. Leaders are unemotional, thoughtful and deliberate. They have a perspective to take it all in and take on the challenge at hand.
Leaders must bring all of these capabilities to bear. During the financial crisis of 2008, the employees of my company were reading the same Wall Street Journal I was. Every day, a story about one of our customers going bankrupt were all over the news. The financial markets were collapsing around us. I knew that the only way we would get through this as a company was if I led them through it.
- Ego: Every day for 3 years, I came into the office (as part of our 20-hour days) and acted as if it was just a matter of time before we bounced back.
- Humility: At the same time, we told everyone that we would need “all hands-on deck” — that we didn’t have all the answers and would need everyone to chip in.
- Emotional Intelligence: But we also understood that everyone was affected differently. People had families and other stresses that were top of mind — and the company was only one piece of that very stressful puzzle.
- Discipline: we wanted everyone to know that we all had to bring our best. That their fellow employees depended on them. We expected everyone to come ready for work (and battle) each and every day.
- Communication: we told employees, “Amazon told the world no one would ever buy a book in a bookstore. Everyone thought they were crazy.” We communicated that what we were doing to healthcare was similar to what Amazon was doing — disrupting the whole system.
- Perspective: not once during the three years of the financial crisis did my employees ever see me sweat. It was hard to do, but if I was not going to stay the course and have the right perspective, how could I expect them to?
I would be lying if I told you that I knew that my leadership would work during the 2008 financial crisis. But we emerged, bounced back, sold our company to an industry innovator in 2013 and today are known as the pioneer of the industry to reward individuals for being healthy.
As Martin Luther King said, “The true measure of a man is not how he behaves in moments of comfort and convenience but how he stands at times of controversy and challenges.” Leadership truly shows through when the world is collapsing around you.
What are your “5 things I wish someone told me when I first started” and why. Please share a story or example for each.
Being an entrepreneur is one of the most rewarding and challenging things you will ever do. There are so many things to learn and here are a few that come to mind:
- Finding a Playground Where No One Else is Playing: It is not enough in this day and age to simply create a “unique value proposition.” The world is full of clutter and it is very hard for buyers — whether they are consumer or businesses — to see through that clutter to see how your product or service is different. To cut through the clutter, you must find a playground where no one else is playing — a place or market or approach where you set the rules. Remember, as entrepreneurs we lack capital and resources, but we don’t lack the ability to think differently. In a recent Super Bowl ad, Budweiser ran a Game of Thrones like commercial that claimed that Budweiser didn’t use corn syrup in their beer and that Coors Lite and Miller Lite did. Did you even know beer had corn syrup? I didn’t. and if you did, did you ever make a beer buying decision based on corn syrup. Now they have set corn syrup for the criteria for winning the hypercompetitive beer war. All they did was find a playground where no one else is playing. Now they set the rules. You need to do the same.
- People over Products: people matter so much more than the idea. When we are younger, we think that a great idea will win the day. But you realize that there are many great ideas, and it is only great teams that bring those ideas to life.
- Never Negotiate from a Position of Weakness: when you are an entrepreneur, you lack capital and resources. And many times, you also lack a team and customers. But when you negotiate with customers or investors, you must always negotiate from a position of strength. When meeting with an investor, you have to act like you don’t need money even if you can’t afford the Uber ride over to the investor meeting.
- It is My Job to Get Everyone Else to “Get It”: in the early stages of a business you really believe in, you feel as if everyone else doesn’t understand. If they don’t understand — whether it be a customer, employee or investor — you will fail. So as the leader we must embrace making sure that everyone understands the value of what we are doing and not just concluding that no one else “gets it.”
- Emotional Intelligence is Just as Important as any Other Skill: as an entrepreneur, you are asking a group of people to invest time, money and effort in an idea. To do so, you must truly understand not what motivates you, but what motivates them and how you can help them along the path to your vision.
There are so many things to learn as an entrepreneur. Ask a first-time mother how she feels the day after her first child is born. Does she think, “I’ve got this.” Probably not. But she embraces the journey of becoming a better mother. Entrepreneurs have to embrace the journey to improve their skills each and every day and these lessons would have been a good start to my journey.
You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
To help everyone live more fulfilling lives by helping them bring their passion to life. There is nothing more rewarding than watching someone live their passion in their daily life. Imagine if you could touch people throughout the globe who have a passion and you could give them the tools to bring that passion to life.
Imagine looking back on your life and regretting the idea you never pursued. As entrepreneurs, we owe it to each other to never, never, never let that happen. We can’t let the nagging voice of our insecurity taunt us — “Am I really cut out for this?” “Can I really make this happen?” It isn’t a choice, it’s who we are. We must find a way to be better entrepreneurs so that we never look back and say to ourselves, “I wish I had.” Mark Twain said, “Twenty years from now, you will be more disappointed by the things that you didn’t do than by the ones you did do.”
Nothing would be more rewarding than helping everyone live their passion.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
“There is always a way.” When building a company, you don’t have the resources — financial or human — to do things the way you would like to. There will be times when your chance of success with a customer, vendor, investor or employee seem slim. Sometimes you lose opportunities simply because you aren’t established. There are often real reasons why you can’t achieve something. You don’t have the money, resources, experience, capital, partners, team members, investors, facilities, capacity, technology — the list goes on.
Forget all that. There are lots of people who can find ways not to come up with a solution. Don’t be deterred by the fact that there isn’t an established path. Most individuals don’t have the inclination or wherewithal to color outside the lines. You do. Many great ideas and visions buck the trend. Amazon told us we would never buy a book in a store again. It’s your innate ability to see things differently and try different approaches that is one of your greatest skills. These are the same skills that allow you to mastermind creative solutions when it does not seem like there are any.
There is always a way. I don’t care how many times you fall down, or how little your bank account has in it. Challenges are only speed bumps along the way. If you are as good as you think you are, you will find a way to achieve results even when it seems impossible.
Is there a person in the world, or in the US whom you would love to have a private breakfast or lunch with, and why? He or she might just see this, especially if we tag them. 🙂
The first is no longer alive — Martin Luther King. The vision, the humility, the sacrifice and the pure courage to undertake his vision is truly, well, life altering.
For those that are still with us, it would be Colin Powell. It is one thing to lead a company. It is quite another to lead when bullets are flying overhead. And to understand where he came from, and where he went to, would truly be inspiring.
How can our readers follow you on social media?
Company Social Media Platform Links:
Twitter — http://twitter.com/thelonelye
Personal Social Media Platform Links:
Facebook — https://www.facebook.com/michael.dermer.3
Instagram — https://www.instagram.com/michaeldermer/
LinkedIn — https://www.linkedin.com/in/michaeldermer/
This was very meaningful, thank you so much!