Rita Ernst

[00:00:55] Sanjay Parekh: Rita Ernst is an expert in organizational psychology. She started her career working as a human resources consultant in Fortune 200 companies, where she mastered skills like strategic planning, executive coaching, and change management tools. In 2005, Rita left corporate life and established her independent consulting and coaching practice, Ignite Your Extraordinary. She works with nonprofits, solopreneurs, startups, and small businesses to ignite positivity at work. Last year she wrote the book “Show Up Positive.”

Here today to share more about her book, her business story, and hopefully some tips to our listeners on how to increase their positivity at work, is Rita Ernst.

Rita, welcome to the show.

[00:01:41] Rita Ernest: Thank you, Sanjay. I'm so happy to be with you today.

[00:01:44] Sanjay Parekh: So, I'm excited to have you on because I'm a huge fan of organizational culture and dealing with these things and making organizations work really, really well. But before we get into that, why don't you give us a 3 second snapshot on your background — a little bit more than what I just said now and tell us how you got to where you are now.

[00:02:04] Rita Ernest: I'm an organizational psychologist, which means I'm just a big geek about how people come together in the workplace to make stuff happen and hopefully it's good stuff that you can earn a profit from. And so that's what I care deeply about. And so that has been my entire career and every time I try to step away from it, I just come back to it again because that's my love and my passion.

[00:02:31] Sanjay Parekh: Is this the first time you did something entrepreneurial, or have you done entrepreneurial things in the past?

[00:02:40] Rita Ernest: No, when I came out of graduate school, my dad, he did the basic dad conversation. “Find a company that's got good benefits and a good retirement plan, and they'll take care of you for the rest of your life.” Because I'm that old that promise was still lingering out there at the time. And so, I really thought my life was going to be climbing the corporate ladder and being the chief people officer at a company someday. That's what I thought I was doing when I started.

[00:03:16] Sanjay Parekh: Yeah. Nothing from when you were a kid, like you did anything to hustle and make money or anything else like that?

[00:03:24] Rita Ernest: Oh, I did not do any of the traditional jobs really, outside of babysitting when I was a kid. I did do babysitting to earn money, but actually my first work job that was, for somebody, was I sold Avon as a teenager, so I went door to door in my neighborhood. With the little Avon book and all of those things. And that's about as entrepreneurial as it gets when you think about multi-level marketing as a place to start.

[00:03:57] Sanjay Parekh: I'll tell you like the door-to-door sales; I did door-to-door sales too when I was a kid. It is probably one of the hardest things and it teaches you so much about dealing with people. And it's a shame that door to door sales isn't a thing, I guess from that perspective. But I appreciate people not knocking on my door either and bothering me. So, I don't know how I feel about it now at this point.

[00:04:19] Rita Ernest: You know, what was so amazing about Avon as a company is that women knew that brand and knew those products. So, it was just a matter of finding somebody on the street that wanted some Skin So Soft or a new lip color or whatever it might be. What I remember most is the conversations. I'm just a young teen girl and I'm sitting in a house with a woman who's 20 years or more my senior, but really feeling this moment of connection, of just being in conversation with that person. And talking about their life and their product and all of those things. So, I remember my time going door to door. I don't remember the rejections at all. I remember those moments of connection.

[00:05:09] Sanjay Parekh: Yeah, I remember the time that I rang the doorbell, and I woke up the baby and the mom was very upset. And I was trying to sell custom imprinted holiday cards. Needless to say, I don't think I made that sale. I don't really remember the end.

[00:05:23] Rita Ernest: I was probably in school when the baby was napping, so I was knocking doors, after dinner. So, I was probably in a safer zone.

[00:05:31] Sanjay Parekh: This was during the summertime, so, right, summertime, it's man, I got all day. Go out and hit.

[00:05:39] Rita Ernest: Perhaps some of my favorite customers had been hitting the wine bottle before I showed up too. I think that was kind of prevalent in those days.

[00:05:46] Sanjay Parekh: I think you picked the right time of day compared to me, right? Yeah, you should probably hit them after dinner.

So, they're a little looser and a little bit freer with the cash. Now, in retrospect I really messed up. I could have multiplied sales if I'd timed that right, man. Frustrating. Okay, so you'd been doing corporate, so you'd been doing HR managing people. What was it that made you decide, hey, you know what, this is no longer for me. I want to do my own thing. What was it that flipped for you?

[00:06:23] Rita Ernest: My husband. Just honest to God, there were two environmental factors. I think I would never have made a change. One was I was in a very toxic role, I was in a company, in a part of the company that had a very toxic culture. And I found myself trying to be this force of change to some of those toxic things. But it was very grating on me. It wasn't what I really wanted to be doing. My daughter, when I started with that company, my daughter was six months old. We had difficulty conceiving and we had been together seven years before we had her, so we really wanted to be parents. And so, I was very resentful for this always wanting to encroach on my family time. I wanted to work, but I wanted time at home with my daughter and to do the things. And then there was a lot of other internal toxic stuff in that leadership team that under which my position fell.

And then the second thing was my husband was the stay-at-home parent. So, when my daughter was three, he basically did that, tag me out. Come on, tag me out. It's my turn. I want in the ring. Tag me out. It's like, he was done. He was done being Mr. Stay-at-home dad. He's I can't go to some woman's house in the middle of the day for a play date. That's weird to be in some other guy's home when he's not there. When it gets cold, and you can't do the play date on the playground anymore. And so, he was ready to go back into the workforce and he basically said, look, you're miserable. You're not getting anything you need. It's a sabbatical. Like in a year and a half she's going to be in kindergarten. You're just taking an extended sabbatical.

But I will tell you, Sanjay, I grieved. I grieved letting go of who I was as a professional. I never wanted to be a stay-at-home mom. That was never in my vision of myself. I wanted to have kids, but being a stay-at-home mom was not. And so, it was a difficult transition that, but he was absolutely right. He was absolutely right that I needed to stop sacrificing who I wanted to be, just to be in that job, in that role. And so, he was really the thing that pushed me out. And as soon as I left, people started reaching out to me. All my contacts are like, hey, I know this small business that needs help with, hey, could you consult with this nonprofit that I am on the board of? They're struggling. So, people just started reaching out to me. So, I didn't intend to start a business. I called myself a freelance consultant for the first few years, and I was just saying yes to work that was falling into my lap, that my network was bringing to me.

[00:09:41] Sanjay Parekh: Yeah. When you realized that environment was toxic, how long was it before you escaped that and left?

[00:09:49] Rita Ernest: I was there three years because she was about six months old when I got there. And she was about three and a half when I left. As soon as I left, I started planning her fourth birthday party. That's all I know. Which is something I never really had a lot of time to do. All of a sudden, I had all this time to make invitations and dream up what this party was going to be like. All those things.

[00:10:18] Sanjay Parekh: Did you feel like when you were there that you’re staying there was going to help change the culture and organization? You were trying to make it less toxic? And did you have any success at all or was it just overwhelming?

[00:10:34] Rita Ernest: I did everything that I thought that I could do. I think the biggest impact that I had was I made my coworkers aware that it did not have to be like this, that this was not normal or good, that we shouldn't be saying yes to this behavior. And basically, at the very top of the part of the organization that we were in on the executive leadership team above us, they were all fighting and throwing each other under the bus. And it was chaos. So, there's a certain amount that we can't do.

But there was also there was a lot of messaging in the culture about, you need to look a certain way and behave a certain way and treat the people in the executive level in a special way. A lot of classism. And I was having a really hard time reconciling those classism messages with an idea that we were embracing diversity in the workplace. And so, there were like some values, things like that, that were just really not, I did all that I could do. I might have eventually been able to move the needle. I don't know. Eventually all those people, the cash value of their stock options got to be so much that they retired and left. New people, and I understand that was the biggest shift that really happened. But yeah, I don't know that I could have really changed it, but I also knew that I wasn't going to be silent. What I knew was I couldn't be silent.

[00:12:28] Sanjay Parekh: Yeah. And I think that you look at a lot of organizations that are dysfunctional like this it all starts at the top. And, if it's not good at the top, it's going to kind of rot its way through, all the way down and it's really hard to shift. And I've often said too is like organizations, they're really hard to change this culture once it gets rooted into these places. The first handful of hires that you do in a new company, they really set the tone and the culture for the organization after that, it's really hard to change it. Is that something that you find as well, or are there things that you can do to change an organization once something like this is really rooted in the space?

[00:13:11] Rita Ernest: My whole practice, what's so funny about this is, what I care and I'm so passionate about is organization culture and creating workplaces where people really are able to be their best selves, to have wellbeing at work because we know. The data is there, it's scientifically proven that when you take care of your people, and your people experience internal wellbeing, your company benefits from that, and you have profitable wellbeing. There's just so much research. I'm writing a chapter for a compilation book I signed on to do called “Culture Impact,” and this is what my chapter's about. You can't deny the science that tells us this. And yet in many ways we get stuck in the same conversation.

The way I talk about it, Sanjay, is there's big “C” company culture, which when you're in a publicly traded company, it's different. My favorite is to work with independent business owners. Like I would've loved to work with your startup when you guys were rocking and rolling. I like independent because the business owner has a different level of connection that is more than monetary. The dilemma is that the system in which publicly traded companies operate, create the environment and reinforce this whole topsy turvy-ness of profit over people. And it's not because they're bad people at the top of that organization, it's the system in which they operate.

So, I care less about trying to fix that and more about if I'm in a corporation down in the guts of the day-to-day, and that's what I call small “c”, your team, it doesn't matter. As dysfunctional as my organization was within that company, our team was a highly functioning, highly effective group. We chose to create our own small “c” culture within which we operated, So that we could be our best. We were always environmentally bumping up against the dysfunction above us. But we could also find some satisfaction and some commitment and some ability to really find fulfillment just focusing on our team.

So, you can start with self. What am I doing for myself? And expand to team and from team to unit and from unit on, right? You can try to keep growing the ripples and those ripples eventually can become big waves that can take down entire cliffs of sand. It's possible but you start with what you can control and wherever you are in the organization, and sometimes the right answer is you have to walk away. Sometimes you can be the agent of change that makes it all come together.

[00:16:26] Adam Walker: Support for this podcast comes from Hiscox, committed to helping small businesses protect their dreams since 1901. Quotes and information on customized insurance for specific risks are available at Hiscox.com. Hiscox, the business insurance experts.

[00:16:47] Sanjay Parekh: So, I want to go back to something you said a little bit ago. You were talking about stepping out and then that loss of identity and thinking about things like that, as you were leaving your corporate job and doing your own thing. Was there anything else that concerned you about making this move? Things that worried you or that you were like, I just don't know how this is going to work. Were there things like that beyond that loss of identity?

[00:17:15] Rita Ernest: I had moved to a new city to work for this company, and so I didn't have — everybody I knew was a part of that company. Like, I didn't have a lot of good community around me. One of the key things that I tell business owners today, or people who are thinking about leaving to start up a business or an entrepreneur, is you’ve got to work your network. Make sure that you are taking, there's so much value. And so, if you're even thinking right now, if you're listening and you're thinking about, I want to own my own business someday, start building the network today that your future self will thank you for. You’ve really got to. And I didn't understand that. I thought my trajectory was corporate, and so I was focused corporately versus focused community. And I knew that I really put myself at a deficit because of that.

[00:18:13] Sanjay Parekh: I think it's an important point that you touch on, and I think that's one of the ones that we don't necessarily talk about as much. We talk about, hey, you got to work your network and whatever, but I think before you work your network, you've got to build your network. And people don't buy from people that they don't know about. Like just because you started a company, nobody knows you exist. They don't know to come and buy from you. Or buy your services. So, you've got to have those people, those cheerleaders that help support you and I think as you well know, those early days are hard. And having people that will cheer you on helps you keep going. Because I'm assuming you started, when you stepped out to do this yourself, you were freelance, you were calling yourself, you were by yourself, right? There was nobody else that was on the team. It was a team of one, right?

[00:18:59] Rita Ernest: Correct. Correct.

[00:19:00] Sanjay Parekh: So, you had your husband there as a cheerleader? How did you keep yourself going?

[00:19:07] Rita Ernest: Like I said, I did, from my corporate life, I had these connections of people who knew me, who knew my work. They kept making introductions, hey, can you help this person? Can you help that person? Can you do this? So work was sort of falling in my lap. And let me be honest, I didn't want to just be a full-time mom. I intellectually needed the stimulation, and I loved my work. But if you imagine the scales of justice, that visual of the scales of justice, I was allowing the scale to tip toward family versus work. So up to that point, it had been the inverse. Work was really the weight in my life and family was not. So, I completely shifted that.

So, having one client at a time was perfectly good to me. I didn't need, it wasn't about how much money I needed to make. I really took that off the table. It was about what work do I want to do? And what work is speaking to me and where can I contribute and add value? So, legacy to me has never been money-based. Legacy has always been impact-based, making a difference in people's lives. And so, I had this freedom to really be able to, I worked because I wanted to, not because I had to. I put that time and energy where I felt like, I could do stuff that excited me. And I didn't have any economic goals. I really didn't have any economic goals. It was very nice to selfishly just focus on those things.

And what I say now is as my kids grew and they have more independence, and I had more time, then I wanted to shift the balance. So, that work has slowly become, so now, I still don't work full-time. Like as in a 40-hour work week, because I'm still taxiing my younger daughter around and doing school drop off. And that's a job. That is still a significant job for me. But I do have, this nice chunk of 30 some hours a week that I can give into my work. And so, I now have truly, like maybe in the last seven years, really got serious about building a business and having real economic goals and things like that, that I didn't have when I first started out. And it was lovely to have that freedom of not having to replace the income that I left.

[00:22:05] Sanjay Parekh: Yeah. So how are you balancing the time, as well as the stress of these two kinds of competing goals, family versus work? Is there hey, you know that pickup drop-offs happen at this time and so then, in between there is when you do all the other stuff? Like how are you managing these two things?

[00:22:23] Rita Ernest: Especially when my kids were younger, when I signed on a client — and typically, I only work with the president or the owner as my primary client. I work all through the organization. That's part of the condition. If you bring me in, you've got to give me access so that we can really do the full assessment and so that we can do work that's really going to have a sustainable impact. But what I would tell my leaders is, I don't charge as much as some of these other firms do, and the reason is that I have these conditions. So, there are certain days I can't meet. There are certain times I have limited hours. You're going to get the best of me within these working conditions that I can give you, but I have some absolute no's. And so, if that's not going to work for you, I'm not the right person. And you know what? It was never a problem. It was never a problem, but I continued to keep my rate slightly below market value, knowing that I was putting some conditions in there. And then at first, I just took one client at a time, and then I figured, as my kids grew, oh, now I can manage two clients. Now I can manage three clients.

[00:23:44] Sanjay Parekh: Some of these conditions that you're putting in place too, though, probably also help you weed out the clients that you don't want, right?

[00:23:52] Rita Ernest: Yes. There's nothing worse. I learned that early. I learned that early. I said yes to somebody that in my gut I really knew was not the right client. But I said yes. Thinking it's work, it's money, it's this and that. And what I say now, Sanjay, is, and you'll appreciate this as somebody who is in your biz, when you put the word extraordinary in the name of your business, you can't have clients who write reviews that are like, ah, it's interesting. She was nice. The work is okay, right? That's totally of brand. Like I need people that are out there going, oh my God, you've got to work with her. It's incredible what she brings.

So yeah, I had a few of those where I didn't listen to my inner voice telling me, no, this isn't the right thing. And I've learned I don't chase business. There's all these, there's all these coaches out there who will tell you, oh, you got to have a funnel and you got to do so many follow ups. And you got to, and you're chasing, chasing, chasing business. I stopped chasing because I learned, when you chase, you don't get the right client. There's a certain number of touches that you need to have, but if you are not like, oh my God, yes, then it's not the right time. As a coach and as a consultant. I'm not McKinsey and Company. I don't have this whole treasure trove of MBA graduates with all these analytical skills that are going to go out there like the minions and do all this analysis and come back and say, all right, here are the top five things that everybody in your category is doing, and let's figure out how to make those work in your business.

So, what my business model is as an organization expert, beyond just culture, I look at strategy and structure alignment and processes, and especially for smaller companies, it's as you're growing, how do you build the internal operation, the back of the house to support the growth that you're in. So many times, business leaders chase. They chase, chase chase this growth and they're not doing any of the work to manage it once they get it. And so, they start burning their team out, right? So, I'm the solution to that. I'm the person that can come in and say, okay, let me help you understand where you are and how to build what is missing in your structure and operations so that you're not requiring so much in intensity from your team to make this work happen. Let's get it to a sustainable place.

And because that is the work that I'm doing, it's not because I know your business. I can't know every business. People ask me all the time what kind of business? I work with every, I've worked with over 14 industries. I can work with any industry. Because I believe your success is based on your knowing of your business. You just get to a place where your mind is so locked up by everything that's competing for attention that you can't discover those things that you really know deep, and you can't find the confidence in that decision. I just create the space and help pull that out. Now I add in a little bit of my own expertise around how you structure jobs that people want to do, how you create communication flow, all of those things. But so much of what I do is really just asking a better question and a better question and a better question, so that the answers are bubbling up from the people inside of your organization.

[00:27:52] Sanjay Parekh: Yeah. Yeah. I want to step into one thing that you talked about there about chasing deals and the funnel and all of those things. Do you use any kind of systems or technology or apps that help you manage your deal flow, your client sign up? Because it can be a lot. And then, you can forget about who is at what stage and are they going to sign or whatever. So how do you manage that process for yourself?

[00:28:20] Rita Ernest: My shout out goes to Honey Book. If you want to know more about Honey Book, hit me up. I'll hook you up with a good deal for Honey Book. Honey Book became my go-to a few years ago and it manages all of that. It is a CRM, project management system, invoicing system all in one. And it has automation. So, when you click the link on my website and say, hey Rita, I want to know about your services, it puts you into an automated system where it welcomes you, it sends you a brochure. It's an active link brochure, so you can tell me what your responding interests are. And then that will tell me, that preps me so I can have a whole data gathering session with a potential client that is robust before I get on the first call with them. And I didn't have to do anything. It just all automatically happens. And then in the sunset sequence you have the same thing. It will automatically send the request for a testimonial. All of those kinds of processes. So automating processes are, I've taught so many of my business and it finally got to the place where, once I started saying, okay, now I can handle eight, nine clients, now I can't keep track of all these things. I need automation and HoneyBook is the right solution for me.

[00:29:45] Sanjay Parekh: Yeah. So, when you started, you didn't do any of this stuff. It took a while for you to grow to the point where you had so many clients that you needed.

[00:29:52] Rita Ernest: I just did all that by hand. I would sit at night, and I would do this, an inquiry would come in, I would write an email. But yeah, I just didn't have the volume. Most of my work for the longest time was really coming through direct referral. And I still get my best clients through direct referral. I'm sure I'm not the only one that experiences that thing, but yeah, really. And especially writing a book. Now that I have all of these touchpoints for people to find me and want to talk to me. I needed to level up myself.

[00:30:30] Sanjay Parekh: Yeah. So, thinking now where you're at now, you've been doing this for a number of years, if you could go back in time and do something differently, what is that you would do differently?

[00:30:42] Rita Ernest: I think that I would've put more attention to finding my business community. Early on I tried some business networking things when I first left corporate. And as I said, I was fairly new in a community, didn't know a lot of people, and it was, what I found was a very bro networking environment that I would call like the splash and dash speed dating, networking thing. Where it's like, hey, I'm John and here's my card and give me a call. And boom, gone. No conversation about who are you, what do you do, and anything like that.

There were other resources that I wasn't connecting with that I should have been asking more questions and trying to connect. And I think I was just in my own turmoil between this, how do I be a mom? What does it mean to be a stay-at-home mom? What are my goals? I totally took a corporate lens to that role, right? Trying to define all those things. That was such a big learning curve to me in some ways that I just, I actually gave more intention to that than I did to the business side. Of course, I really thought it was just going to be a year or so and I'd be applying to jobs and then I got pregnant with child number two and that all fell apart. Yeah, so, there's that.

I think I said earlier I wish I would have been building a different kind of network. I wish I would've leaned into it. And I think the other thing that I learned, I wish I would've done sooner, not when I very first started, but a little bit earlier than I did, really starting to spend money to make money. I think that I spent a lot of time thinking, oh, I don't generate a lot of income out of this business, so I can't spend money on marketing, on this, on that. And all that did was waste my time and make things a little bit harder than they needed to be.

[00:32:58] Sanjay Parekh: That's great advice. By the way the comment you made about second child and all the plans, it reminded me of the, I think it's the Mike Tyson quote, right? Everybody has a plan until they get punched in the face. That’s exactly, that. That's like what I think founders and entrepreneurs live by is that we all have plans and then you get punched in the face and then you got to figure out what's next. There you go. Last question for you. Well, two questions for you. First, what would you tell somebody that's thinking about taking that leap and doing a side hustle or starting a small business like you, what advice would you give them?

[00:33:35] Rita Ernest: I think from a side hustle point of view, do not compromise your wellbeing. If all you do is work, you cannot be the founder that you need to be of your business.

You will burn yourself out. The way I talk to entrepreneurs about this is, there's the sprint and the marathon. You can only run the sprint for so long and you wear yourself out. So, you really need to make sure that you've done the training, that you've built your body to manage that.

I think the other thing that I would say is you got to do the economic modeling before you pull the trigger. I do a lot of work with small businesses and the number one reason small businesses fail is they don't have enough running capital. People, they think they're going to have all of this money really fast because you're really good at what you do and you're really passionate. But there's a lot of startup costs. It takes a lot often to get to that money making. And if you don't know how you're going to replace. If you're not in the shoes I was in, and you really need to replace the income that you left, you’ve got to have a plan for that. And you’ve got to know where you're going to go borrow the money when that doesn't come from just delivering. And if you're not prepared to borrow the money, then you are starting at a deficit. So, you need to make sure that you've really gamed this out and you've got the economics of it figured out.

[00:35:12] Sanjay Parekh: Okay. That is great advice. And now I’ve got one last question for you. Now this is the, like the secret tip for our listeners. What is like the one thing that somebody that's listening to this, that is running their small business or side hustle, that has employees, could do to help improve their culture, their happiness of their employees, their people? Is there one thing that you always think about? Like man, if everybody would do this, it would just move the needle just a little bit better.

[00:35:42] Rita Ernest: Get curious. Curiosity cures everything. If the numbers aren't there, go get curious about why. Stop trying to force people down a path of compliance and get curious and discover together and pursue what emerges. So, curiosity is the key.

[00:36:05] Sanjay Parekh: I love that. I love that. And that's the name of game of us as entrepreneurs, right? Because we're curious and we figure out the things and we just got to stay curious about our own organizations too. I love that. Rita, where can our listeners find and connect with you?

[00:36:20] Rita Ernest: My website, igniteextraordinary.com, is access to everything. You'll find all my social links there. There are forms that you can fill out if you have inquiry about working with me as a consultant or if you are interested in me as a speaker or a trainer for some development work with your leaders. That's the best place to go.

[00:36:41] Sanjay Parekh: Love it. Love it. Thanks again for coming on the show.

[00:36:44] Rita Ernest: Thanks for having me.

[00:36:47] Sanjay Parekh: Thank you for listening to this week's episode of the Side Hustle to Small Business Podcast, powered by Hiscox. To learn more about how Hiscox can help protect your small business through intelligent insurance solutions, visit hiscox.com. And if you have a story you want to hear on this podcast, please visit www.hiscox.com/shareyourstory. I'm your host, Sanjay Parekh. You can find me on Twitter at @sanjay or on my website at www.sanjayparekh.com.