Josh Jones-Dilworth

JDI
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How to build a business that outlives you

Whether the endgame is getting acquired or going public, startup founders often fantasize of a fast-track fate that draws media awe and jaw-dropping valuations. Less hyped is the alternative: Build a sustainable, profitable business that lasts generations.

That’s Josh Jones-Dilworth’s vision for his Austin, TX-based consultancy, JDI, where he’s founder and CEO. In an era where half of small businesses last less than five years, and just one-third stick around for 10 years or more, Josh’s role models are those rarer leaders who focus on a long timeframe—think tortoise over hare.

“There was a moment when I realized the goal was for JDI to be around after I’m dead,” Josh told us. “So that means 50 years-plus, to be a multigenerational company.”

Coming from a liberal arts background—not computer science—Josh considers himself a humanist who loves the unscalable tasks that only people can do. So although JDI is a services company, Josh sees his people as the product that drives the business.

The upside? Unlike a software business, people-powered industries (like agencies and consultancies) aren’t focused on the codebase, which can make people feel secondary to the product that actually generates money. A business whose product is people can more easily justify its human-centric policies and decisions, Josh said, since there’s a direct tie to business. But there can also be a downside: Workers are at risk of overworking and burning out if they’re so heavily relied upon.

“In the software business, you can make money while you’re sleeping,” Josh added. “In the people business, you can’t. You get tired.”

To stave off this burnout, he designed JDI’s culture to center around the steady-but-profitable pursuit of a sustainable business.

Create policies that prioritize both space and boundaries

Flexible working-hours policies sound people friendly, but most employees actually want and need guardrails to prevent them from overworking. Establishing boundaries can be a tough call to make, though, when employees have different working preferences and lifestyles.

Josh describes late-night work as a weird game of chicken: An employee sends out a late-evening e-mail, triggering others to do the same, which often leads to habitual, nightly inbox-checking. Clients receiving those late-night emails might also assume that employees are always reachable. A solution at JDI? Let employees know it’s OK to work after hours if it’s necessary, but ask them to just be respectful about it.

“If you have to get work done at night, that’s totally cool,” Josh said, “But queue it to send at 8 a.m. the next day so you don’t cause this cascading waterfall of chain reactions that is really hard to prevent, even if you’re intentional about it.”

To further deter being always-on and always-responsive, Josh says he doesn’t track when JDI employees show up or leave the office, as long as their work gets done. And he offers a clearly defined order for getting in touch with someone when they are not in the office. They use Slack to indicate status; if one is not on Slack, it is assumed that they aren’t working. Texting after hours means that an issue is being escalated. Last, but not least, is a call, which is “a deathly serious thing,” he said.

“People will do things that are not best for them, even when they know better,” Josh observed. “If you have a passionate group of people that are working on a big, wicked problem, and they really like each other, they want to do that all day. You have to gate people.”

That gating is visible at JDI not only in their working hours, but in every policy. For instance, leadership considered adding more employee vacation days, but instead added more holidays, strategically placed throughout the year to coincide with business slowdowns. That way, every employee could share the quiet solidarity of not working at the same time. That syncing of shared time off has worked extraordinarily well: “I would recommend to everyone to add holidays, not vacation days,” he told us.

While the idea of work-life balance has become something of a buzzword at many companies, a lot of it is just CEO lip service. What’s causing the gap between what leaders perceive to be a cultural tenet and what actually goes down in the office?

“It’s because the connection between leadership and middle management is broken,” Josh told us. “[We executives] are by definition out of touch… It’s the middle managers who are transacting information, culture, knowledge, and activity up and down the chain, that are really the locus of culture.”

His suggestion: Entrust and invest in your middle managers by delegating to them not just activities, but authority and autonomy.

Develop serious schooling

Robust corporate training programs are often tucked inside big companies like Pixar and Apple, where education is nearly academic, and the impact on employees is measured.

But Josh’s long-term ambitions for JDI led him to envision a learning program of the same caliber. The training they developed is serious stuff for a company of 16: themed, semester-long learning programs run by staff with professional teaching experience, with case studies, exercises, homework, published findings, and guest speakers. The program has proved so popular that employees actually requested more homework last semester (though most tend to complete it during office hours). Plus, the in-house education serves as a retention tool.

“Too much corporate learning is soft,” he said. “[Our learning capability] is a huge part of why we win deals or have deal flow in the first place. It’s immediately attributable to the results we achieve.”

As JDI employees grow their abilities, their commitment to the company grows, their worth on the market goes up, and their value to clients increases, too. JDI can charge more as employees are able to make more. Which is why Josh credits JDI’s in-house ed as the highest-leverage tool they have for growing revenue and profitability.

Measure your return on people investment

For all the businesses that recognize talent is their secret sauce, few actually track the impact of their people investments. This kind of long-term measurement project is one Josh and his vice president of operations have begun, tracking all their talent decisions from Day One. That means quantifying everything from the switching costs of replacing one employee for another to measuring the cost of professional development against the quality and price of employees’ work.

JDI also tracks the effectiveness of their people policies through stay interviews. Instead of an exit interview cued up to ask what went wrong when someone leaves, a stay interview allows leaders to focus on what’s working.

“It affords us the opportunity to say, ‘Why are you still here? What’s likely to keep you here longer?’” Josh said. “They’re far more open and transparent than any exit interview, and they are always suggestive of new directions that we end up taking.”

Those new directions are considered based on whether they’ll make JDI more sustainable for the long haul, and Josh said that, by and large, they almost all do. With the average employee retention rate clocking in at around 4.6 years for the 8-year-old company, few people leave.

“For us, it’s a science,” he said. “We’re a small company, so if I can do it, everyone else can do it.”