Secrets to Great Hiring with Dustin Rhoades

The Hidden Cost of Your “Good Enough” Sales Manager

They thought they were saving money with a “good enough” sales manager. Then I showed them the $200,000 hole in their P&L.

When I interviewed Dustin Rhoades the other week, he shared something that startles every contractor: promoting your best closer to sales manager costs $200,000 in just 90 days if you get it wrong.

Dustin knows this firsthand. After 23 years scaling multiple home service companies to $50M+, he’s discovered what he calls the “Law of the Lid.” This principle changed how I think about hiring and promoting sales leaders.

Here’s what he taught me: If your sales manager is a “5” on a scale of 1-10, they’ll never attract “7s” and “8s” to your sales team. They can only bring in “3s” and “4s.”

He proved this at Patio Enclosures and K-Designer, where he transformed struggling teams by focusing first on leadership capability. The results speak for themselves.

Read on for all the insights I learned from Dustin:

Understanding the Law of the Lid

Your sales manager’s capability level puts a hard ceiling on your team’s potential.

A “5” level manager doesn’t just perform at 50% – they actively repel top talent and create a culture of mediocrity.

Dustin shared three real examples from his career:

• His first year as a division president, where he lost significant money trying to wing it without systems
• A struggling branch stuck at $8.9 million until he implemented proper leadership systems, then grew to $72 million
• A San Diego operation he took from the #104 position to #3 in just one year by focusing on leadership development

These weren’t bad businesses. But their limited leadership capabilities created invisible barriers to growth.

Your sales team’s future hinges on your leader’s capability. Pick wrong, and you guarantee stagnation. The cost? Far higher than most contractors realize.

The True Cost of Poor Leadership

Every underperforming sales manager costs more than missed quotas.

When you factor in wasted leads, training costs, and lost opportunities over 90 days, a bad hire burns through $200,000. Dustin’s seen this math play out across multiple organizations.

Look for these critical indicators in your leaders:

• Forward-thinking mindset
• Ability to implement systems and processes
• Track record of developing others

Your sales manager must transform average performers into stars. But first, they need the right foundation.

Building Better Leaders

The right approach transforms average managers into exceptional leaders.

Bad managers blame external factors. Great ones create solutions.

Ask these questions when evaluating potential leaders:

• Can they increase their own “lid” through continuous learning?
• Do they take ownership of problems instead of making excuses?
• Can they build and follow proven systems?
• Are they focused on developing others?
• Do they demonstrate forward thinking?
• Can they maintain consistent performance standards?

Great leaders aren’t born – they develop through deliberate practice and mentoring. When you get this right, it transforms your entire company culture.

Creating a Culture of Excellence

Strong leadership naturally creates a high-performance culture.

Dustin proved this by implementing daily structures and routines. He calls it “rowing the boat” – everyone moving in the same direction, at the same speed, toward the same goal.

The key? Clear benchmarks at 30, 90, and 180 days showed everyone exactly where they stood.

This system works – but only if you commit to real change.

The Path Forward

Stop accepting mediocre leadership that bleeds your company dry.

Take an honest look at your current sales leadership. Are they a “5” trying to build a team of “8s”?

Remember what Dustin emphasized: You’re never better than your systems, and your team is never better than its leader.

Take action today: Write down your sales manager’s current “lid” number (1-10). Then list three specific ways they could increase that number in the next 90 days.

Want the Full Masterclass?

If you found these insights valuable, you’re going to love the complete 60-minute session with Dustin Rhoades.

In the full recording, you’ll get:

• His proven behavioral interview that strips away candidate fa?ades
• The benchmarks he uses at 30, 90, and 180 days to develop leaders
• His “Law of the Lid” framework for evaluating leadership potential
• His process for changing company culture in under 6 months

Plus, you’ll see real examples of how he turned around multiple $50M+ organizations using these exact methods.

Want to dive deeper? Watch the full masterclass here

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– Chuck

P.S. Have questions about implementing Dustin’s leadership development approach in your business? I read and respond to every message I can, OR connect with me at our upcoming LIVE event in Phoenix March 3-4, 2025!