Episode 300: The Manager's Handbook with Dave Dodson

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. Welcome to The Bottom Line, a new weekly podcast series that we drop every Thursday to complement our weekly Monday podcast interviews with the industry leaders. These podcasts are going to be designed to give you short, impactful, and value-driven information that you can start using right away in your business. I value your time and attention and will do my very best not to waste it. Just get what you need and go. So with that, let's get into today's episode.

This is the Dave Dodson podcast intro and outro.

Welcome to another episode of the Club Capital Leadership Podcast.

My name is Bradley Hamner, your host. On today's episode, we have Dave Dotson. He wrote the book The Manager's Handbook: 5 Simple Steps to Build a Team, Stay Focused, Make Better Decisions, and Crush Your Competition. I did not know exactly what to expect in this interview. And I don't want to say surprisingly, but I really enjoyed this conversation.

And I think, you know, initially whenever I thought, you know, building a team and staying focused, uh, it's like, okay, those are things that are going to resonate with our audience. And I think that they will.

I think some of the stories and the way that he went back and looked at people who have, you know, in corporate America, et cetera, have approached certain things. That to me was probably the biggest surprise. And ultimately I came away with a number of things. That I think are going to help you in your small business journey. Without further ado, here's my conversation with Dave Dotson.

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Welcome to the Club Capital Leadership Podcast.

Good, I'm glad to be here. Let's get into it. This is an exciting thing to talk about.

We do. I'm really excited to chat with you. We first start with always a background and origin story. I love hearing people's journey and their backstory, kind of how they got to where they are. So why don't you share with our listening audience a little bit about your origin story.

Yeah, I was afraid you were gonna ask that because I listened to your podcast and I, I heard that over and over again. So I thought, oh my goodness. Yeah. Anyway, well, I, the, the short version is that I grew up in rural Colorado and I, my dad was in the farm equipment manufacturing business. So we were, you know, I grew up walking the fields with him on the weekend and so forth. What was kind of noteworthy for me is first of all, I lived in a world where everybody was separated. Half the people were farmers and half the people were ranchers. But my dad was an entrepreneur and he built up a decent-sized business and then it all collapsed when I was in high school because of some changes in farm policy in the, in Washington, DC, and also when interest rates spiked in the late '70s or mid-'70s. And it really shaped me in a lot of ways. First of all, I, I arrived at college really with no money, so I had to work in a slaughterhouse after class at Stanford. to pay for college. But also, I just didn't— I saw how hard he worked, and I didn't want to be in a position where my success was based on something that happened in Washington, DC, or in somebody else's hands. So I've always gravitated towards businesses. When I was a CEO, and I was a CEO for, you know, 5 times before I went back to Stanford to teach at the business school, I always gravitated towards businesses that were basically the success or failure really hung on how well you executed and not the ability to kind of see around corners and predict the future. And so I've just been a guy who's been focused on what are the best ways to get things done. And I love studying people who are, you know, much better at me getting things done. That's kind of my, that's kind of my origin story.

Well, I have a soft spot in my heart to farming. My dad is a, is still to this day a farmer, has farmed for his entire life, owns a farming operation, farmed 10,000 thousand acres at, at one time. They've whittled that down a little bit now to about 4,000 or 5,000 acres, I believe, is what this last, uh, is. So definitely have a soft spot in my heart for farmers.

Okay, Bradley, that was a big farm your dad had.

It was, and I had bad allergies, so I got nothing into any of that stuff. So don't ask me anything around farming. I know, okay, I know nothing. My dad will listen to this and he'll be— he, he's not proud of that about me. But anyway, no, it's okay. I have a great relationship with my dad. All right. So here's a couple of things I love. Congratulations, by the way. You shared with me right before we hit record that your book, The Manager's Handbook, which just came out in July— we're recording this in September— came out in July of 2023, just hit the bestsellers list. So congratulations on that. And the title and so many of the subtitles alone hooked me. And I said, oh, this is going to be great to get you on the podcast. But congratulations first around the book. And why don't you share with our audience just the impetus about what went into saying, you know what, I'm going to take all this knowledge that I have and actually begin to put it in a book.

Well, actually, that's not what happened. What happened was, you know, this is not a book about how I ran companies or be more like me. It actually came about slightly differently, Bradley, which was that once I went back to Stanford and I was teaching, I was really interested in why some people are just so much better at getting things done than others. And so I wanted to study and understand that so that I could help my students and also the companies that I'm an investor in. And I came across really, you know, as I was looking at Sam Walton, I came across the notion that in 1962 when he opened up his store, he was surrounded by Sears and Target and JCPenney and Kmart. He didn't invent anything. He didn't invent the discount store, the department store, whatever. And he completely annihilated them. Because he out-implemented them day in and day out. And as I started pulling on the string, Bradley, and, you know, more and more, I even came across people like Steve Jobs and realized, wait a minute, Apple didn't invent the PC or the mouse or portable music or the smartphone. Other people did that. And then he crushed them by out-implementing them. So what was it about these people that was common? And I realized it wasn't about their attributes, where they grew up, their personalities or anything. It was that all of these successful leaders had shared 5 common skill characteristics. And Bradley, there were no exceptions. And as I discovered this over, and this is over about a 3-year period of time, I realized, wow, I mean, th— this is, this is something because these are skills that can be learned by people. And the difference between these people and the rest of us mere mortals is they learn the skills and then they insisted on these skills being learned by the people that worked for them. And, you know, just look at Steve Jobs, for example, when he passed away, Apple basically didn't skip a beat. Apple was not a product of Steve Jobs' personality. It was a product of an organization that he had built like Sam Walton. When he died, Walmart just kept going and has completely clobbered the competition ever since. So the book is really about me identifying and observing these skills, breaking it down into subskills, and then going out and finding the very best people and say, how do you do this? What do you do? What are your tricks? What are your techniques? And curating it and getting it into a book. So I'm sort of like the, like the good high school football player. I knew how the questions to ask. I knew what, I knew what happened. I knew the lingo. And then I went out and I went to the very best NFL players and said, okay, Why are you guys so good at what you do? And I'm going to put it in a book.

That's fantastic. One of the things that resonates with me the most is whenever you said out-implementing them, number one. Number two, these are skills. That word has really been coming up quite a bit recently in my own personal life. And I've thought a lot around skill acquisition and then skill application itself. And so, Sometimes we can read a book. You mentioned Steve Jobs. We can read Becoming Steve Jobs or Isaacson's book about Steve Jobs, and we can begin to go, wow, he was such a visionary or whatever. And then it's a something we can't obtain is sometimes what it feels like. Well, I just can't be him or I can't be her. I can't. I don't have those attributes about me. Those were not natural gifts that I have. So I think the thing that resonates personally with me the most, and I think it will our audience as well, is that you're saying these are skills, these are the 5 skills, they all possess them, and because they're skills, they can be learned and actually we can begin to implement them in our own businesses. All right. So what are the 5?

Okay. I want to say one other thing, Bradley, while you said that, which I— is that with books like Isaacson's book on Steve Jobs and so the list goes, It's fun and tantalizing for us to read books and listen to podcasts and so forth about people who are kind of larger than life. And, and, and, but it's kind of boring to write a book and say, oh, by the way, Steve Jobs was just really good at hiring and here's how he did, he's, here's how he hired. But the fact of the matter is that that's what I want if I'm gonna run a business. And my guess is that's what your listeners want. You know, they're not like, like you said, Bradley, you and I are not gonna become Steve Jobs. But I can promise you this, you and I can run a meeting like Jeff Bezos runs meetings, ran meetings at Amazon because it's just a process. So anyway, anyway, you asked about the 5 things. The 5 things identified were a commitment to building a team, fanatical custodian of time, a willingness to seek and take advice, an ability to set and adhere to priorities. And then the surprise number 5, and I wasn't looking for number 5, I was just trying to figure out what, what these guys did, is an obsession with quality. And with each of those, then I broke it down into subskills in, in the book, The Manager's Handbook, because for example, the first one, a commitment to building a team. I don't think that's like a big aha, right? Because, you know, in class we have guests and they say, what are the most important thing you do? And everybody always says, well, I surround myself with good people. But like, people understand that, right? That's not very useful for my reader. My reader wants to say, fine, fine, fine, I get it. But how do you build a team? How, how do you do it? Well, You're good at interviewing, you're good at giving feedback, you do exit interviews, you do 360 reviews, you know what, you know how to coach people that are underperformers, you know, and I break each one of those down into step by step how you do it based on not how I did it. And of course, Bradley, I'm bringing some of my own experience to bear as a CEO, but mostly I'm curating how the very, very best people did it. And so it's 5 skills. And within those subskills in each chapter, I wrote, I tried to write them using the absolute least number of pages possible because the people who buy my book are busy. They're running something. They've got, they've got a lot of pulls on their time. They don't have time to read 4 books on hiring and 3 books on delegation and, you know, 20 blogs on how to run a good meeting. They go, give it to me, give it to me in about 10 pages. And at the end, give me a summary because I got a company to run. And I can relate to it because when I was a CEO, I had a company to run.

I think I want to share this with everybody too. And every one of these 5, we could have an hour podcast talking and going deep on the skill and then the subskills with each one of those. So I think our brevity in moving from one to the next should not be dismissed as the importance of each one of them just because of a time sake so that we can just at least touch on each one of them. And because like when I hear, you know, the ability to seek and then implement advice from others, it's like, man, okay, seeking it out is one thing, and then actually taking the advice and doing something with it, like, we could have a whole discussion around just that thing, uh, just that alone. Okay, so if you would, let's go about each one of them, and I'd like to maybe make a comment on, on those, because you're right, like, in, in number 1, commitment to building a team Everybody hears that and says, well, I mean, unless you're wanting to be a solopreneur, of course you're going to have to build a team. I've heard that, you know, for years. And, you know, have a good team, have, you know, hire A players. The question is, how do I actually do that? So I think those are great, uh, subskills to learn. All right, number 2.

Number 2. Oh, um, on the fanatical custodian of time. And by the way, this started because I was having coffee with a buddy of mine, Tom Staggs, who at the time was the CEO of Disney. So he had about 250,000 people reporting up through his organization across 6 continents. And I was teaching at Stanford. We've known each other for years. He was on campus. I said, let's have a cup of coffee. So he's down there in the outdoor courtyard. It's always— the weather's always beautiful at Stanford. And I'm there, I'm 5 minutes late and I'm thinking about all the emails I haven't gotten. And there he is, just calm as can be, looking at his phone. Look. And, and, and so I said like, Tom, like what's going on here? Cuz you've got a quarter of a million people reporting up to you and I'm the one who's late. Like what's going on? And he said, of course, you know, I surround myself with good people. But then he talked about how important it was that he was a careful custodian of his time. And that was not just being this autocrat that says, you know, don't come in here, don't do that, you know, and all these guards around it. What he did is he said, I got the same number of hours in the day as you, David. I have to make, I have to make all those hours really, really count. And here's how I do it. And then soon after that, a mentor of mine, Michael Porter, who's a professor at Harvard Business School and wrote 19 books on management, was actually, is actually the most prolific business school professor in terms of writing ever. And he was visiting us and we were hanging out in Jackson, Wyoming, and he was watching me kind of scramble around. And he did— I joke with him that he did an intervention and he pulled me aside. He said, like, what is going on with you? And he said, well, let me show you something. And he showed me a study that he had done with two other faculty members at Harvard where they followed around 27 high-performing CEOs. Get this, Bradley, in 15-minute increments. Watching what they do day in and day out. And it was, I think it was 30,000 pieces of, of data that they ended up collecting on that study. 60,000 hours of data that they collected. And what they found is that these guys were— guys meaning men and women— were ruthless about how they managed their time. But all of them used simple techniques. They didn't have fancy apps. They didn't have you know, they didn't go to weekend seminars on time management. They just had a handful of things that, that would, that, that they could keep doing year in and year out. Not those New Year's resolutions that you get rid of at, you know, you try for a week and then you go back to how you did before. Yeah. Um, and that was a fundamental reason why they were high performing. And then what they did is they insisted on the people that worked for them also manage their time well, because you're not gonna, you're not gonna run Disney if you're the only one who's managing your time well and everybody else is going crazy and you're, you know, with their time, or you're not gonna be Sam Walton because Sam Walton manages his time. Sam Walton built Walmart because not only did he learn to manage his time, but then he was a leader and taught all the people that worked for him how to manage their time. So the book sets up how do you, how do you, how do you handle email? How do you plan your day? So I, I, I tell people and they go, well, Like, if I only have time to read a couple of chapters, I said, read chapters 8, 9, and 10, because 8, 9, and 10, I promise, will save you 2 hours every single day of wasted time, and you'll barely have to change your daily habits.

Man, that's fantastic. I have to tell you, one of my business mentors and one of my coaches, he tells a story that in— this is maybe 15 years ago— he had an opportunity to fly to Switzerland and spend maybe a day, at least a day, maybe 2 days, I can't recall, with Richard Branson. And he said, at the time, I had one business. We were doing just a couple million dollars in revenue, you know, hand, maybe 10 team members, something like that. And he said, I was stressed to the max. And we fly out there and Richard wakes up, he has casual breakfast, he's not checking his phone, he's not doing anything, and he's running all of these billion-dollar companies, right? As we all know. He said, uh, he had a 15-minute discussion with his EA. We went and skied all day. He never checked his phone, never did anything. Came back down, had a quick 15-minute, uh, meeting with his EA, and that was his day. And he said, wait a minute, if you thought about the incremental— the levels of how many more companies and people that reported to him and the revenue and other things if you multiplied my stress level times where he is, it would be crushing. And I thought to— he said, I thought to myself, wait a minute, what, what is wrong with this picture that I'm so stressed, right? I'm running this. And, and that's not to diminish the stress of running a small business, so we get it. But it was just this, this thing that really resonated with him. And of course, he's passed that story down. That's what reminds me of whenever you shared, uh, your, your story as well, is that, uh, with the CEO of Disney, I mean, that many people, you would think to yourself that they would just be running around ragged all the time. Yeah, that's actually the opposite.

And Bradley, it's a mistake to think, oh, well, okay, but that's Richard Branson. And if I had a big company like that and all that stuff, I could go skiing too. It's not what you do when you get there, right? It's what is how he got there, right? You have to do that all the way on the way up. So if you're running, let's say you're running a modest-sized insurance firm, right? Well, okay, you don't wait until you're running a conglomerate before you do that. That's how you get to— that's how you end up in 5 states by doing it that way. And I saw it over and over again.

That's such a good point. That's such a good point. Okay. Number 3.

Okay. So number 3 is a willingness to seek and take advice. And it really comes down to this. The high-performing leaders knew, know that there's a premium on being able to get to the right answer quickly so they can get on to the next thing. The second is they understand that it's important to get the right answer. And most things that we face in life have been met by somebody else or close enough that there's, there's strong pattern recognition. So these people were really good at, for example, convening a group. It can be your board of directors, it could be some advisors, it could just be some people give you advice. But if you just sort of bring people into the room and say, hey, I want to chat a little bit about what's going on in my business, you're going to get about 10 minutes worth of advice in 90 minutes. I want to flip that around. I want to say, how, how could you get 5 hours worth of advice in 90 minutes? And those people who do it, they run a structured process when they're getting advice. And it also includes even when you pick up the phone and call. And so what I learned is, so I get, I get called a lot for advice because I'm a professor now. And so I have a lot of students and I also do a lot of investing. So we have about 70 companies in our portfolio. So I get a lot of incoming calls, right? For, for questions and advice because those people understand that people like me and others have seen the problems before. But what I've observed is that there's a certain way that you handle that call. You know, you start with the problem, how you give background information, et cetera. And I, I break it down into 5 steps. So that when you call somebody for 20 minutes of advice, you're really getting like 2 hours worth of information out of it. So the point of it is, is it's, it's, it's sort of like when we went back to building a team, Bradley, it's not a platitude like, oh, you know, go get advice. Oh yeah, you're right. Just get advice. It's like, how do you go get advice in a way that is meaningful? How do you find mentors and advisors and use them in a way that would be effective? Because the people like Mary Barra who runs General Motors, I mean, she's very, very purposeful about how she seeks and takes advice throughout her whole career, not when she became CEO of General Motors, but that's how she got to be CEO of General Motors.

I think I did a really powerful exercise. I won't be able to kind of share on here that set up the exercise, but at the end, the lesson of the exercise was one of the hardest things that we do is to raise our hand and ask for help. But, and the willingness to seek advice and then the willingness to actually take the advice. And the thing that you said that resonated with me was whatever problem it is I'm facing in my business, somebody else has faced it and solved it successfully. So if I can go about seeking it out, and then to have a framework to be able to take a 2-hour conversation down into 20 minutes. I mean, now I'm accelerating. You know, they say the best, best way to learn is through experience, but it doesn't always have to be your experience, which is why reading books is such a, is such a great way to learn. It's awesome.

Exactly.

All right, number 4.

Okay, number 4 is the ability to set and adhere to priorities. And by the way, there is nobody I came across that was more focused about setting and adhering priorities than Steve Jobs. He was fanatical about it. And we think about Apple and all the things that they do, but note that they basically rolled everything out one at a time. And what I learned from Steve Jobs and people that work for Steve Jobs— I'm close to someone who was on his— still on their board, uh, and was on, on his board while she, she was on his board while he was CEO. And then I had a chance to visit with Jony Ive, who was Apple's chief designer, is what I learned from those two. And looking at Steve Jobs and researching Steve Jobs is, is the notion that setting priorities is not about not doing the things you're not supposed to do. It's about not doing really, really good things. You're working on something else. And that's where setting and adhering to priorities gets tough. Which is why the best companies have processes in place. Because if you're only gonna focus on 2 or 3 things, you want it to be good. You want those to be good things. They don't have to be the number 1, number 2, and number 3 out of the whole universe, but they have to be really, really good ideas. And then you have to have processes in place so that when all the shiny objects come out throughout the year, you know to say no to those. The, the, the, The most revolutionary story on setting and adhering to priorities is, is actually Herb Kelleher, who founded and ran Southwest Airlines forever. And they were down to about $108, $143, I think it was, in their checking account. And they were about to go bankrupt as American Airlines was crushing them in, in their home market of Dallas. And Herb Keller said, you know what? We're gonna focus on one thing. Planes only make money when they're in the sky. So we're gonna turn our planes around in 10 minutes. So we came up with a 10-minute turn. That was their, their KPI, their, their, their key performance indicator. And the whole company rallied around one thing and that's all anybody talked about is 10-minute turn, 10-minute turn, 10-minute turn. And they didn't worry about the price of jet fuel and they didn't worry about pricing. They worried about the 10-minute fuel, that 10-minute turn. Well, as we know, Southwest Airlines annihilated American Airlines in their home market. Over that period of time. And it's because he was so phenomenally focused on one thing. And we think about these, you know, going back to Steve Jobs, we think about these larger-than-life people and go, oh my gosh, Steve Jobs, he's got music and he's got, you know, uh, um, iMovies and on and all those things. Well, that's because he was focused at every step along the way.

So I have a question around that. Yeah. I've heard that story about, um, Southwest Airlines and Kelleher before. I actually did not know that he was down to that, that small amount in, in the checking account. I had not heard that detail before.

Um, but by the way, I learned, I learned, I learned that because I got— I, I, I— he came by campus at Stanford when I was, uh, there, and he— this is obviously many, many years ago And so he said, well, just meet me for a drink. So I heard this, I heard this story. It was in the perfect way. He had a cigarette in his hand and a cocktail in the other hand, and he's telling me the story. It was one of the, one of my highlight of my business life is to hear Herb Keller tell this story, you know, straight from the horse's mouth.

But anyway, well, that is phenomenal. Oh my goodness. That's, that even makes it like 100 times better to actually get that. Let me ask you this.

Okay.

So I think my question is not around the adherence and the focus he had to do nothing but to focus on that. Okay, that, that's a, that's a, that's a, another subskill around like we're going to continue on this and he didn't get shiny object syndrome. Okay, what I'm actually curious about is the choosing of that KPI. Now, he ended up like, whatever the— wherever that idea, that stroke of genius kind of came from. I think for some of us, we think like, I think I know what my KPI is, but at the end of the day, it's not really what the KPI is. Okay. And I wish there was a story I heard of this similar. Does that make sense? Is it going about— how do we go about actually choosing what that right thing needs to actually be, what the, the choosing and the setting of the right priorities. Because we can hear that and we go through it and we're like, here's our priorities. I probably shouldn't have 17 of them. Okay, we know that. But maybe we're choosing the wrong priorities. It's hard for me to kind of express exactly what I'm trying to get to, but like, he chose the right one, he stuck with it, and that's what turned the company around. How do we learn from that to be able to do that in our own business?

Well, it's a brilliant question because, because there's two, there's two verbs I use, set and adhere to priorities. And you have to set them correctly, to your point, Bradley. Otherwise, you get everybody focused on the wrong thing. And there's a process on how to identify, for example, a KPI. And I, in the book, I tell a story about a CEO who came to me and, and very complicated business. And it took us about 3, 4 months to finally figure out what the right KPI was. Then he implemented it. Then we came back and we had to make an adjustment to the KPI. He went back and implemented it. And then the company took off. And I've seen over and over again that the CEOs who do— by the way, KPIs are not What's all the data that I can collect? And I want this fancy dashboard and I want these numbers and these charts and these bars that are— that's, that's not a KPI. KPI is when you have one or two things like the 10-minute turn and you get everybody focused on that and you say, you know what? If we do a, if we do an A job here, we can do a B job in these other things and even a C job in these other, in some of these things here, but we are gonna excel in this one area. And just to further the benefit of this, you can always after a couple of years then say, okay, we've got that nailed. Let's add another thing. But doing this kind of like one at a time. And in the book, The Manager's Handbook, I describe what this process is about how to develop the right KPI. But there are few things that I've seen other than making sure you're surrounded by the right people that are singularly more powerful than discovering and implementing that one or two magic numbers that drive your business. And every, every company has it. There's no doubt in my mind.

I think people can tell I'm asking this question from my own knowledge. Like, I have a scoreboard. Yeah, it's on a Google Sheet. It's nothing fancy. Okay. It's nicely color-coded. It has a select few numbers. It doesn't have a ton. We have dashboards that kind of surround it, right? We have a marketing dashboard, financial dashboard, sales dashboard. Those are like satellite dashboards, but I'm thinking to myself, yeah, no, I haven't distinguished of, and, and this is off the top of my head, I think there's maybe 5 numbers on the scoreboard, something like that. So it's like it's adhering to all the general businessy textbook things. Okay, I don't have 25 things on there. Okay, good. We've got, we've got 5. That's, that's fine, but I haven't thought through, this is the number, this is the KPI number. And it's easy for me just to go, well, it's revenue. Well, no, it's not revenue.

Yeah, yeah. There's oftentimes this mistake that people make, which is what is a trailing indicator versus a leading indicator? And most people make the mistake with our KPIs is it's a history lesson. It's sort of tell me what happened last week or last month or yesterday. But what you want for KPI to be effective is you want it to actually be an operational tool. So let's just go back to the, to, you know, me and Herb in the bar. Okay. All right. Because it was operational, what it meant is that everybody, the flight attendants, the gate attendant, the baggage handlers, they all were focused on this 10-minute turn. And so that's why the flight attendants would come out with the passengers at the end and they're picking up the trash on the way. Okay. Everybody's focused on the 10-minute turn. Now imagine that you are running the gates at DFW Airport and you discover that, a couple of your planes have consist— or a couple of the crews have consistently been at 18 minutes. Okay. That's actionable. You can walk down from your office and say, hey, what's going on with the 18 minutes? And they go, Well, the problem is, is that we don't have this tractor that we used to have. And so we're having to go borrow. And he goes, okay, I'll get you another tractor. Boom. And now they're back to 10 minutes. You know, KPIs have to be operational where people can, can make decisions throughout the day or throughout the week. And so that's the difference between a trailing indicator and a leading indicator.

Oh, that's good. That's good. Well, you gave me a good writer downer. KPI is not a history lesson. Oh, that's good. Okay, good.

Okay.

That's a one-liner for sure. I'm taking. All right. We made it to number, we made it to number 5 in good time. Okay. Obsession with quality. And you said, as you set this up, you said that was surprising to you.

That was, you know, I didn't expect it and I'm not quite sure exactly how I stumbled upon it, but there was this moment when I realized it was universal and I put down the word I use is an obsession with quality. And the important distinction is that these people did not view quality as a morality or being going right by your customers or anything like that. It was a way to make more money. Okay. Because what they realized is that if— let me ask you this, Bradley, which, which do you think your listeners fear more? A competitor who has an amazing sales and marketing department and a pretty good product or a competitor that has an amazing product and a pretty good sales and marketing?

Okay.

Obviously, it's the one, obviously, it's the one that's got an amazing product.

Right.

So if you have a, if you have an amazing product, first of all, you don't have to have the same kind of sales and marketing that your competitors have. Next, you have pricing power. Everybody knows that price increases or price decreases go straight to the bottom line. There's nothing to improve your earnings faster than, than being able to price your product a little higher than everybody else. You cannot price your product at a premium unless you are offering superior, uh, uh, uh, service. Mm-hmm. The next thing is, is that high quality reduces your costs. The evidence is universal because of rework and the taking customer calls and so forth. So now you've got a situation where you've got pricing power. Your costs are going down. And last but not least, you know, we all know in business that there's kind of the front door and the back door, you know, getting new customers and keeping your existing customers. Well, the best way to keep your existing customers is not because you've got a great website, not because you've got flashy salespeople. It's because you're delivering the product that they want over and over again, and they wanna keep buying from you. Well, the easiest thing is to keep your existing customers and getting them to buy from you next year as opposed to having going out and getting brand new customers. So now you've got pricing power, lower cost, and something that's driving revenue. So that's why people are obsessed with quality because they know it was gonna make money. But okay. So now how do we go? So everybody goes, okay, I get it. I get it, David. But now what do we do? We have like a cat on a, like a chin-up bar. You know, it's, it's sort of like a poster in the, in the lunchroom kind of thing. How do you actually drive quality? Well, it is not about a speech. It is not about a slogan. I go through how, like, Safelite Autoglass figures out what are the 2 or 3 features that really matter to their customers, and then they double down like crazy on that. And they have a process of how they're doing it. They're not— they don't care about quality more than the next people. They have a process to identify it and then double down on it. A company that I'd love to talk about in the section on quality is Intuit. They make, you know, QuickBooks and TurboTax and those products. Now step I can think about Intuit. Intuit has dominated this sector for decades. Okay. I think, I think probably easily 3 decades they have dominated the sector. What do they do? It's simple accounting software. Quick TurboTax is basically an automated way to fill out a form. Okay. They have no business dominating this market decade after decade. Well, the reason that they do is Scott Cook has a process on how to find out more than anybody else knows what their customers want. And then they go and then they fill that need. And in the software business, you always have developers and people saying, well, what if we do this and what do we do? Let's add this gadget. And Scott Cook says, uh-uh. We've run a process, they call it Follow Me Home. We run a process. We know that these are the 3 things that matter to our customers. Everybody work on that. And that's how they've dominated those markets for year after year. And I have a good friend, Paul English, who was one of the co-founders of Kayak. But before he founded the travel site, he sold a business to Intuit and he was the chief technology officer there. So I got some really good insight into Intuit and I've talked to Paul about it and I've said, okay, you know, I kind of read this stuff about Intuit, but tell me what's really going on there. And he said, oh my God, there's nobody I learned more from. About product quality and the importance of it than Intuit and Cook. And then he started Kayak.

Was, was that in place? You may know him. I know he's passed now. The, from the book Trillion Dollar Coach, he was the CEO of Intuit. Was that in place? Did he establish that then, or is that the new CEO that came in with Intuit now? That established that?

I don't know. The Trillion Dollar Coach is a great book, and I actually referenced that, interestingly enough, in the section on seeking and taking advice because I talk about how to find an executive coach and how to use a coach. And, you know, where I— by the way, as you know, Bradley, this is a how-to manual. So, for example, when I talk about getting an executive coach, I— these are the questions you should ask for an interview. These are actually the places you can go to to find coaches. These are the— this is the process that you should run when you— when using an executive coach. And I realize it's a little bit off topic from quality, but when you talk about the trillion-dollar coach, I couldn't help but kind of loop back on that.

No, no, no, no, that's good. I think that even for people that if you are— insurance is a good example. You may say, well, I don't want to affect the quality. It's not my job. I'm not— I can't go in and change a policy structure or whatever. But the customers are doing as much as they can. They're interacting with you. You can affect the quality of that interaction and that experience with your office, with your agency, with your business if you're not in insurance. Is that fair?

100%. And, you know, just with insurance, I've had the same insurance agent for, I don't know, maybe 20 years. And we have, for a bunch of reasons, sort of, you know, a complicated— we're a complicated account, but not a crazy complicated account. And there are things that they do every day that wow me. Or not every day. There are things that they do throughout the year that wow me that make it unthinkable that I would change. Insurance agents. That's why, that's why stick around. But, but this goes back to, you know, the lessons from Intuit and Safelite Auto Glass. I talk about, uh, Zappos, the, you know, the shoe, the, uh, that you can't— a common— there's two really common hazards about quality that people make all the time. One is they assume what they think matters to their customer. And they hear it from their employees, their own intuition. And, and so that's mistake number one. I'm sorry, there's three. Mistake number two is you define quality as let's put every feature we can think of into the product. That's actually not a route to quality. Okay. The route to quality is figuring out the two or three things that matter and focus in on that, not add every imaginable feature. Because the problem with every imaginable feature, and I'm being a little bit hyperbolic, but when you add a lot is now you have a very expensive product of which most of that your customers are not willing to pay for. And the last is, um, not being realistic about how you measure your own quality. There's a, uh, there was a study that many, many years ago, and it had— it came out that, um, 93% of drivers in America thought that they were above average. Of course, of course it can't be. It can only be 50%, right? Right, right, right. Uh, I don't know if you've ever heard the, uh, the show. It's not on anymore, but, uh, Garrison Keillor, and he had a show about Lake Wobegon. And in the introductions on NPR, in the introduction, uh, he says Lake Wobegon, where all the kids are above average. Well, they actually— there's actually a term for this. They call it now the Lake Wobegon effect, which is how we exaggerate, you know, how well we drive and so forth. Okay, so these are all funny stories. Now I'm going to tell you a not so funny story that relates to us. There was a study that was done. It was, uh, Bain and Company did the study, and 80% of the CEOs and leaders that they, that they surveyed thought that they offered a superior customer experience. Okay. Now I'm gonna ask you a question now. Okay. I know it's your podcast, but I'm gonna ask you a question. 80% said they did. What percent of their customers said they got a superior customer experience?

I mean, first number is 20%.

8. 8. 8%. Okay. Talk about the Lake Wobegon effect. That's how far off they are. So now you, me, all your listeners, why do we think we're so much wiser than 80, than, than all of these CEOs that Bain, we're like them. Okay. Or we're almost certainly like them that we've exaggerated our customer, the customer experience or what we think the customer's perception is. And so we talk about how do you go out there and really find out what your customers are thinking? Because if you do that, then you can be like Intuit.

Man, that's great. It's been an awesome conversation. I've learned so much from you and then just hearing your experiences, getting to have a bourbon and meeting with with Herb Kelleher and then Joni Ive. I mean, what an incredible opportunity to get to meet people that, you know, we've all kind of revered over the years. I think this is great. Obviously, people are going to want to be able to pick up the book. Where would you point them to for resources, etc.?

The easy thing is just keep it easy. Go on Amazon. The Manager's Handbook. There's actually another book called The Manager's Handbook. So Mine's the one that's red, white, and blue and got the conference table in the, in the middle. The other one I think has a butterfly on it. So, so the one from Dodson, but the Manager's Handbook. And then I know this is gonna sound a little bit like I'm, I'm, I'm a door-to-door salesman for, for the book. This is not why I'm saying this. If you get the book and you like it, get it in the hands of your management team. That's the difference between, you know, Jeff Bezos, for example, He didn't say it's okay for me to run a meeting well. He wanted all of the people at Amazon to run a meeting. And that's where it becomes transformative.

Awesome.

David, thank you so much. Hope to have you back on in the future.

Bradley, I would love to.

Well, I hope that podcast served you.

I love hearing some of the stories from people that he interviewed. And obviously, he got like super close and personal with a lot of those people. I mean, to be right there with the Southwest CEO. Those are not things of conversations that you hear secondhand or whatever, but to be able to experience them in first person, I think is truly fascinating. I think it would be a great thing to pick up that book, The Manager's Handbook. I think that, you know, there's so many different books to read out there, but I think you're going to get a lot out of picking up that book, The Manager's Handbook: 5 Simple Steps to Build a Team, Stay Focused, make better decisions and crush your competition.

Love to hear your thoughts.

What was your biggest takeaway from that interview with Dave? Shout out to our podcast sponsors: Autopilot Recruiting, Today@Pro, Coach P Consulting, and of course Club Capital. If you're using an Excel spreadsheet to be able to track your bonus and compensation plan, you've probably got all kinds of fancy things that you're using. There is a better way. What if you were able to take some of the playbooks that you have, the way, the word tracks that you really— the scripts that you want your team to be able to use. You were able to take that, put it right where they're doing the work on a daily basis with a corporate-approved CRM system. That's a bonus tracking system that's going to sync up with your CRM. There's none better than Today App. Go to todayapppro.com. Todayapppro.com. Also It's so important. I think we all know you got to have good systems and processes documented into playbooks, and I would say taking those things and then put— putting them in an operating system. But in addition to that, we need to have a good team. In fact, we got to have a great team of A-players. And with Autopilot Recruiting and Coach P Consulting, you're going to be able to get two of the biggest needle movers out there. We need to be able to find How do we attract A-players and do that on a consistent basis?

And one of the very—

the hardest parts of doing that is the first part, which is the, the phone screening and the interviewing and the reviewing of the resumes. And that is a tactical thing that you as the business owner ultimately can hand off to someone else who's going to do a better job of that. Ultimately, you're going to make the decision whether or not they come aboard. And when they do come aboard, making the investment to put them and develop them and give them, uh, access to their tools and the resources and the mindset and the skill set from someone like Coach P. But first, go to autopilotrecruiting.com. Autopilotrecruiting.com. Let them know, both him and David, know that you heard about them on the Club Capital Leadership Podcast. Autopilotrecruiting.com and coachpconsulting.com. We appreciate their partnerships. And helping to be able to make the Club Capital Leadership Podcast hopefully something that serves all of you. And finally, making decisions, having the skills to make decisions with financials in the business has been one of the biggest groundbreakers that I really wish I'd had much earlier in my career. Club Capital can help you to do just that. Go to club.capital, book a no-obligation demo, talk to someone on the team and see how they can help turn, you know, the back part of the the backstage of your business into something that helps you to be able to truly grow and scale your business. Club.Capital. All right, everyone, till next episode, lead well.