Episode 181: Headway with Doug Thorpe

So the big question is this: how do small business owners like us grow our leadership, develop our teams, and scale our business in a way that allows us to get our products and services out to the world yet still remain profitable? That is the question, and this podcast will give you the answers. I'm Bradley Hamner, and this is the Club Capital Leadership Podcast. Hey, before we get into today's episode, did you know that Club Capital is the largest accounting advisory firm for insurance agency owners in the country, providing monthly accounting, CFO services, and tax preparation. Check them out at club.capital.

Welcome to another episode of the Club Capital Leadership Podcast. My name is Bradley Hamner, your host. On today's episode, we have Doug Thorpe. He's an executive coach, business advisor, and the creator of Leadership Powered by Common Sense. I mean, our podcast is the Club Capital Leadership Podcast. I love talking to people about all things culture, business, and of course, leadership. I think you're gonna get a lot out of this episode, whether you are a new business owner, entrepreneur, or an seasoned executive leader for your business. I think you can get a lot out of his years in the trenches. Without further ado, here's my conversation with Doug Thorpe.

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Doug Thorpe, welcome to the Club Capital Leadership Podcast.

Hey Bradley, uh, pleasure to be here. Thank you.

Excited to have you. We always start with background and origin story, and so tell people, uh, a little bit about your story, your journey to how you got to where you are today.

Well, goodness, it's a long one. I've, I've been on a few extra journeys around the sun in my life. Uh, the quick story is I was, uh, I will go all the way back because this does have a significance. I was the only child of a hard-working single mom who quit her day job when I was still in elementary school to go out and start a business. So I was introduced to the wonders of entrepreneurship at a very early age. Um, fast forward rapidly through school, I did spend an early part of my life in, as a, in the military as an officer in the US Army. When I left there, I went to work for a large regional bank. I spent about 20 years as a business banker. I watched a lot of companies come and go, and I've got a lot of story that impacts that. I left the bank to start a consulting practice, and as a consultant, I realized people really wanted coaching. And that led me to what I do today, as I do have a firm that I established about 12 years ago. And with that, I provide executive coaching and business advisory services to businesses really of all sizes.

Yeah, well, I love the name of your podcast, Leadership Powered by Common Sense. And boy, we need some common sense.

Amen, we sure do.

In a lot of areas, we're not— I don't— uh, we're not going to go turn political on here, but so we'll stick to business. But we do need some common sense in business. Before you and I, uh, hit record, we were talking around just philosophically, we're both on the same page about really making the transition from initially being the founder of your business to becoming the CEO. What are some of the things that are fundamentally present in someone who is acting as the CEO of their business versus someone who is in the startup initial founder mode?

Yeah, the typical symptomatic evidence is the idea that the founder/creator of the business is in the weeds, basically doing everything. And in the early stages, CEO stands for Chief Everything Officer. You've got your fingerprint on every aspect of every turn of every day in your business. And, you know, on the one hand, it certainly makes sense to do that because because in the early stages, cash is tight. You don't have the budget to hire a bunch of people and delegate a bunch of things. But if the business takes off and you can in fact start growing it and you find that opportunity to expand by adding staff, adding other resources, your role as the leader of that company needs to change.

Yeah. When you think about— what do you— well, first of all, where do you think that that change happens? Is it years? Is it revenue? Is it team size? Is it different from person to person? Where do you think that that transition needs to begin to take place?

That's a great question, Bradley. And I don't think it's— I don't think there's an automatic answer for anything. Usually, it's more a a function of team size rather than total topside revenue. Usually it's, or at least in my experience, it's a function of, you know, how significant is the need to add staff to your payroll? If you're in a more direct consumer type business, are you having to add a second shift? To whatever it is you're doing? You know, if so, you need a shift supervisor for that crew because you're not going to do it. You're not going to run 16 hours a day. I hope you don't anyway. But, um, it's things like that that cause the need to change the founder's mindset about how they want things to run.

Do you think that there is Do you think that— I mean, I've started 8 different companies, I've launched 8 different companies, and I don't say that— look, I've had some of them that have not failed, have not worked out, that have failed, and I'm honestly grateful for the learnings in some of those things. Honestly, if I started a company now, I would begin to think about it a lot different than when I started the very first business, completely different. So what I'm saying is Do you think that there is a natural progression of just saying, hey, look, you're going to start out as the founder and you're going to learn all of these kind of things as you begin to make the shift? Or is there a way to begin to understand and adopt and learn the things so that whenever you first begin— because there's people listening to this maybe in their first year, first two years, that could not have to wait to, to, to learn all those lessons and could actually begin to adopt the skills of becoming the CEO of their business today. Does this make sense? This question make sense?

Yeah, it, it does. And the quick answer to that is there are several programs and books available that do just that. And possibly the most popular or most famous of all those books— well, I, I think it goes all the way back, you know, the, uh, the book called The E-Myth, uh, starts to lay some of that foundation. But the one that's more current is Traction by Gino Wickman, and he's the advocate of this thing called the Entrepreneur Operating System.

Yeah.

And it lays out a great blueprint, and it's, it's a, it's a dynamic unto itself. But some of the disciplines that are described in that, I had been— I've been doing for decades, actually. I wish I had written the book on it and formulated the way Gino did, but You know, and, and the way I work it with clients is there's 4 fundamental areas in every business. You've got your people, you've got a process, you've got a product/service, and ultimately you've got your performance as a business. And performance gets into financial, you know, net profitability, etc. But there are things you can do in each of those 4 areas as you start a business and grow a business to be very intentional, very disciplined, and very specific to make decisions that optimize your probability of success.

Yeah. Um, do you think— what is your opinion? Of the idea of strengths versus weaknesses as the owner of the business, meaning, look, there's the prevailing ethos out there is figure out what your strengths are and just triple down on those strengths. I mean, people have said that on this podcast specifically. What is your philosophy? Because I don't know this, so I'm curious to hear what you think. I have my opinion of it, but what is your philosophy around Well, this is what my strength is, so I'm just going to kind of double down on that, and then I'll just hire people around me to, to, to take care of some of the weaknesses.

Yeah, that's a great question. And in, in my mind and in my own experience, the fundamental answer is yes, you ought to do whatever work you've got to do to identify what your strengths are. And, and, and by the way, not everybody knows that, um, and that's another whole discussion. But do the best you can to identify those strengths. And yes, you probably are going to have to hire people around you, or at least contract the work that needs to be done where you're not strong. Uh, you know, simple examples are things like, uh, doing bookkeeping. If, if you, you know, aren't a detail-oriented person in that regard, find a 1099 person that can do your bookkeeping for you. And, you know, a lot of owners get real antsy about giving up their financial information to an outsider. So, you know, those are— that's where it starts to border into the, what I like to call, the psycho-emotional aspects of running a business.

Yeah.

And that's the ultimate challenge in maturity as an owner or founder, is the willingness to admit where you've got a gap and be open and realistic about optimum ways to fill that gap.

Do you think that sometimes we— there's a great book called Leadership and Self-Deception. Have you ever read that book?

No, no, I hadn't.

Um, well, if nothing else, the title says a lot. Leadership and Self-Deception, right? Which is You know, you mentioned, well, it's really hard to kind of figure out what my weaknesses are. And some of it is just because it's hard to read the label from inside the jar. I mean, it's just to say, like, why? I mean, I think that this is what my strength is. I, I do. I, I think this is where I'm good. I, I think that this is where my weakness is. How do we even go about beginning to really under— uncover what that is? I mean, for some people may say, I think this is where I'm stronger. I, I don't even really know.

Yeah, well, there, there's so many iterations of that. And I guess in the entrepreneurial realm, what I would say is if, if someone has launched out to build a business, there, there are probably several, but I think there's at least two fundamental variations on it. One is the idea of the person that has an idea. They're, they're an inventor, creator. They want to build a business around this thing they've created. And that's great. And that's, you know, that's where we get the Apples of the world and the, you know, the Googles and all that. So that's certainly significant. But there's a lot of the business world that is based on people that have bought into franchises, for instance. They've taken an idea or a concept or a product that's already been proven, and they've agreed to buy a territory or buy a footprint that they can be the distributor of that good and service. So in other words, they're not having to make up the idea, they're just taking an idea and executing on it. Even in both of those cases, there is still the challenge that As that business takes off, the owner may not yet have the right mindset for growing with the business. And that's where I've chosen to camp out and do my work for the world is to help those owners that are going to struggle with their own pivot to grow with the business.

Yeah, you know, if you have business owner, entrepreneur as one of your titles, they're just as necessary requisite business skills that you have to, that you have to have.

Don't you have to figure out anyway? You have to address them along the way.

Yeah, I mean, business is hard. Business is hard and it gets harder, you know, it really does. I mean, there's a reason why, you know, Maybe post-COVID it's even greater than this, but 96% of businesses don't see their 10th birthday. I mean, it's just really difficult. I'm curious your thoughts around just the idea of around how do you define leadership for the people that you work for? What does that even mean to you?

Well, it starts with a very fundamental definition. And when I work with my clients, we do talk about this. I used to ask the question, do you think there's a difference between management and leadership? And then once upon a time, I would get some puzzling looks and, well, yes, no, maybe. But now I think everybody's a little more read in and everybody quickly says, oh yes, of course there's a difference. And so that's when I say, well, what do you think the difference is? And we start talking about many different things, but my answer to that question is management is about process, but leadership is about people. And you can be a manager of a process and you can make a profit in a business, but you're going to spend a lot of your time hiring, firing, and replacing people on your team if you don't adopt and, and form for yourself some leadership skills, because leadership will help shape the culture that you've got in your business. It will help endear people to want to be part of your team and move your business forward. And, uh, there are plenty of examples of companies, larger companies, that have spent big dollars trying to build a brand, but they've done nothing to build the culture to support that brand.

Yeah.

And the, the brand is essentially dead on arrival.

Yeah.

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Because the team cannot support that great and grandiose vision that's been laid out.

It's impossible. I mean, if you host a podcast, as you and I both do, that has leadership in its title, there's impossible to not talk about culture on a fairly regular basis. And I think it's— it deserves to be talked about from as many angles as we've had guests on this, on this show. When you are working with a client, talking to someone, and they, you know, you can tell that they've got some of the hard skills in place, okay? They track their numbers pretty closely. They got a vision of kind of where they want to take the business. Should some of those things kind of be tightened up a little bit? Sure, maybe so. But one of the things you kind of begin to identify is culture. We just don't really necessarily have the right culture in here. They got all the pieces in place with the exception of one pretty big thing, which is the culture. What are the elements around culture that you kind of begin with to say, hey, we're going to have a cultural shift. This is the how we're going to go about doing it.

Well, I think that is very much about it. It should and does start with what the founder-owner has declared and wants to set out to achieve. And, you know, if you don't have that, then you're just going to hire a bunch of people and you're going to talk about process again. You're going to say, well, here's how a transaction works, or here's how we build this widget, and here's how we want to ship that to our clients. Well, again, you can make some money, you can run a business doing something like that, but you're not really going to have a particular culture that's going to mean much of anything. But if you, as a leader, you want to paint a picture and say, we want a certain kind of culture, we want, you know, a special environment to work in where people have a freedom and an empowerment about the work. We want people to have regular feedback on what they're doing, how they're doing. We want to be able to provide recognition to our people. We want to be fair and equitable in the way we pay and bonus our team. All of those things help, I think, come into building the right kind of culture. But I'll give you an example. Just recently, I recorded a show on my podcast with the guy that was the talent development leader at Hard Rock Cafe. We'll talk about a culture. You know, if you've ever been to a Hard Rock Cafe, it's a whole thing unto itself, starting with the physical, you know, the, the, all the motif in the restaurant, the themes and styles, the music, the memorabilia and everything. But a big hallmark of that culture is the people that work there. And you got the spiky hair and tattoos and piercings and all that sort of thing. But when you, when you go in to be served, they're wonderful people. They're warm, they're friendly, they're fun. They're, you know, but that's a culture that has to be nurtured. And from a pure management standpoint, if you think about I mean, I come from banking, which couldn't be more, you know, buttoned down and uptight, so to speak. Think about tattoos and piercing and ink and hair color and, you know, purple hair, green hair and all that. We wouldn't do that at a bank, you know. Now banks have gotten a little more open about that sort of thing. But once upon a time, that'd be the furthest you'd want to do from the culture we were trying to create.

Yeah, one's not better than the other. It's just what culture do you want to have in your organization?

Exactly.

And being very consistent about that and communicating that, which, don't you agree, a lot of times it's really, it's in the head of the entrepreneur, of the owner. It's just not communicated.

That's right.

Unspoken.

It is. It is. And there is the possibility that, that one, one version of what's in the owner's head is, is ultimately not going to be a great place to work when you really get down to it, uh, because they're wanting to retain some level of control, some level of autonomy over the whole thing. And if you try to grow and say, for instance, regionalize or spread out with, uh, new sites and new offices in other parts of the geography, you know, what a site manager may want to do versus what the owner wants to do can quickly separate. And it's up to that owner to be clear on what they want, what they're striving to build, and paint a healthy picture of what that's supposed to look like.

You know, there's a saying, sure, many people have heard say that. I know Craig Groeschel says you can have growth or you can have control, but you can't have both.

Yeah.

So I agree with that. I don't think anybody listening to this would disagree with that. They would say, yeah, it makes sense. But brass tacks is what my dad used to say. Well, what does that really mean? Like, what does that look like? Not what does it mean, but what does it look like? Whenever you yourself, or you're working with someone and you see someone who's got a death grip, they're white-knuckling the business, basically. Obviously, that's an example of control, not growth. But what does that actually look like practically?

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I, I might take exception to that statement, to be honest. And here's where I'm coming from. I mentioned I mentioned in my early career after I got out of the military, I went to work for a large regional bank. We were a $27 billion bank and ultimately we were smaller than that when I first joined, but I spent 20 years there. And we were on a growth trajectory. That was our mission there. It was an understood part of the culture. We wanted to serve our clients and we wanted to be a very healthy and profitable bank. So there were a couple of, some might say, conflicting goals that we had. But one of the ways we achieved our growth was through, quite honestly, a lot of control. We had a very rigorous budget and planning process that not everybody suffered. I mean, you know, not everybody survived the way our process worked, but if you really wanted to buy into the bigger picture and be proud of what we were trying to build, you had to embrace this very rigorous— and it was really simple at its core. It was the idea of the success is the sum of the parts. So every branch bank, every unit, every cost center had their slice of the budget and you had performance metrics for your piece. And as long as your piece performed, then you add them all together with all the other pieces and we all performed. Well, long story short, we ran off 64 consecutive quarters of earnings growth. 16 years we had quarter-over-quarter earnings growth, but it was a rigorous discipline and, and control. Yes, it, it was controlled, but, um, those who took pride in seeing that growth happen were happy to do the process. And we ran our teams accordingly. And it was not dictatorial. And in fact, there was great camaraderie, there was great kinship and high, high morale for the most part.

Yeah. So I hear that and I think we're actually saying the same thing, but we're using— we got to come to to terms on that. So having a rigorous discipline, structure, blueprint, plan, holding people accountable to that, 100%, that, that's it. I think where it gets sideways is an individual founder, one person. Okay, there wasn't one person. There's just no way one person was driving that all of that discipline.

That's true.

64 consecutive, you know, quarter, uh, 64 consecutive quarters. There's just no way for 16 years somebody can do that across that many locations, that many teams, etc. To me, I think that's where the difference is, right?

You're right. And, and I think maybe the, the spin on the word control back in the original statement is more that I'll far as to call it that egotistical control. Yeah, you know, this is mine, you know, this is mine, you, you can't have it. And, and, and that's where some entrepreneurs sadly, uh, run amok, is that they've got that kind of control over their company.

I want to ask you around delegation, um, I want to ask you around delegation and What are a couple— but I'm gonna ask it a different way. For an entrepreneur, uh, let's say between 10 and 30, uh, employees, okay, to give, give kind of that, that range. Um, because I think once you get past that, you're in a performance type, um, business, right? We're looking to kind of scale to $25 million or so, so it's a little bit different, um, past that, but So let's say, let's say south of, let's say south of 25, 30 people. But for that person around delegation, what are a few of the things that you feel like can never be delegated by the business owner? Right. There's things that can be— you mentioned obviously financial management, bookkeeping as an example. That's a, that's a great one. What Club Capital does. But what are some of the things you think just never can be?

Well, and I, I go back to the way, uh, Gino Wickman describes it in the book Traction. There, there is probably the one thing that is the, the, the visioning and the ideation of what you're going to do. Yeah. Um, and I guess maybe one of the more classic examples of that is Walt Disney himself. You know, the, the vision he had for what became Disneyland and Disney Studios was incredibly creative, incredibly unique, and he really had a long-range vision of the fantasy experience of all these characters and the way they work together and the way they, you know, presented. You can't delegate that. I mean, that's— you can You can certainly teach people, you can maybe train people to embrace it, you can find talent that has a similar bent and, and can get aligned with it. Yeah, but when, when you're the guy with that dream and vision in your head, there's no way to delegate that.

Yeah, I completely agree with you. Yeah, I think that that's maybe the only thing that actually cannot be delegated is that.

And that's where I was going, it's that ideation and that fundamental core vision of what the business is supposed to be about. And really, beyond that, I think you can delegate just about anything.

Totally agree with you. Yeah, that's true. Doug, anything around leadership that you think is paramount that we touch on that we haven't today?

You know, I, uh, I'm glad you asked that. The one thing I encourage people to think about, if you're in a role of leadership leadership, you owe it to yourself and your team and your organization to really lock in on your own sense of vision and purpose. And too often people find themselves in roles and opportunities where they're kind of waiting on instruction from somebody. And boy, if you're in a leadership role, I believe to really be the best leader you can be, you've got to be the guy that can explain what you stand for, what you believe in, and where you want to go.

Yeah, I love that. Yeah. Doug, people want to connect with you, your podcast, um, if they want to reach out to you directly, where would you point them to?

The easiest thing to do is go to my website, and it is very simply Doug Thorpe. Thorpe.com. There are links to the podcast, there are links to my book, uh, there's a blog there that I still publish once a week. A lot of content going out. And I'm— I am all over social media, but the, the website dougthorpe.com is the main place.

That's awesome, Doug. Appreciate you coming on.

All right, Bradley, thank you.

Okay, so a couple things that really pick up, you know, First of all, Doug and I are very much on the same page with how we see things and, and, and just philosophically how we begin to kind of approach business. A couple things at the very end when he mentioned, hey, the one thing that you cannot delegate is the vision, the ideation of the direction of the company. I completely agree. I was curious if he was going to say that, and obviously that's an example of where we're definitely aligned. Second big one, I really loved whenever he was drawing the distinction between leadership and management. Leadership is all about people. Management is all about process. And then lastly, I thought the discussion around strengths-based leadership versus like weaknesses, et cetera, I've brought that up a couple of different times to people on the podcast, and it's by design. I think that that's a fascinating discussion because sometimes things just kind of casually get thrown out there as to say, well, you know what, figure out what your weaknesses are. Once you figure that out, just do that. It's like, well, okay, there's, there's more nuance to, to, to things than just doing that. So, uh, you want to connect with Doug, go to DougThorpe.com. Doug Thorpe with an E at the end. Thanks to our podcast sponsors, Club Capital, Coach P Consulting, and Autopilot Recruiting. We are just getting started in 2023. You want to be able to make really good decisions with your financials, want to make great decisions in hiring, being able to get A-players on board and you want to be able to train and develop them. You want to be able to understand your financials, as Doug talked about in the podcast. Go to club.capital, book a no-obligation demo so you get to know your numbers. You understand what your burn rate is so you can be more profitable, have money set aside to be able to pay your taxes and just be able to make better decisions in the business so you can know how much you can invest in your team. Go to club.capital, book a no-obligation demo. As you're investing that money, plowing back into the asset of your business, and you're wanting to be able to onboard 8 players, you got to be able— it kind of is a numbers game in a way. There's a kind of a parallel track between the leads, uh, the nurture pipeline of leads in your business for sales, as there is leads and prospects to come on within your team. And you got to be doing on a regular basis. For just a few hundred dollars a month, if you work with the team at Autopilot Recruiting and use the club, club capital to get started, use the code club capital to get started. Then they're going to do that on a daily basis for you. You're going to get assigned to a recruiter. It's going to work with you, get to know your situation, be able to set your entire, you know, CareerPlug, um, portal setup. So you have a good applicant tracking system. So you have insight into where your future A-players are going to be. And then once they come on board, you can train and develop them with Coach P Consulting twice a week. He's going to let you behind the scenes of what he and his team are doing to be able to get it done at the highest level. And let David know you heard about him on the Club Capital Leadership Podcast. All right, everyone, let's make 2023 the best year yet for you personally and for your business. Appreciate all of you. This was helpful to you. Share it with one other person. Be greatly indebted to you. Till next episode, everyone, lead well.

So the big question is this: how do small business owners like us grow our leadership, develop our teams, and scale our business in a way that allows us to get our products and services out to the world yet still remain profitable? That is the question, and this podcast will give you the answers. I'm Bradley Hamner, and this is the Club Capital Leader Leadership Podcast. Hey, before we get into today's episode, did you know that Club Capital is the largest accounting advisory firm for insurance agency owners in the country, providing monthly accounting, CFO services, and tax preparation? Check them out at club.capital.