#57, Jon Beckstrand, CEO of MasterControl — Developing a leadership code, how to look forward to ...

Welcome to From Startup to Grownup, the podcast. My name is Alisa Cohn. I'm an executive coach, an angel investor, and the author of From Startup to Grownup. Each week I talk to founders, creators, advisors, investors, and builders of all kinds about their insights and experiences in going from startup to grownup. Welcome back to another episode of From Startup to Grownup. Today, I'm super excited to welcome Jon Beckstrand to the podcast. Jon is the CEO of MasterControl. MasterControl creates software which helps life sciences companies get safer products to market faster. We had a fantastic and super candid conversation exploring Jon's entrepreneurial and business journey. Jon was sort of the accidental CEO of MasterControl and has been leading the company since 2002. We discussed the playbook he used when he came into MasterControl as well as what he did when he realized that the company needed to pivot and how he executed that significant change inside of the company. John is a very driven and results-oriented leader. He's also a very humanistic leader. So with that as a backdrop, we discussed the principles of the leadership code that he developed with his executive team. We talked about how they were created organically and how they continue to evolve and why they're so critical to company culture and success. We also discuss his contrarian approach to delegation and why, despite how tough they are, he sometimes looks forward to hard conversations. John has a real passion for learning, and we also talk about the books which have been most impactful to him and why, and the specific way he and his team have been able to translate those ideas in those books into action. This episode is packed with lessons for all startup founders and leaders, so please enjoy my great conversation with Jon Beckstrand, CEO of Master Control. Jon, welcome to the show. I'm so excited to have you here today.

Thanks, Alisa. It's great to be here.

I'm super excited. And first of all, I wanna jump right in with what was Buddy Software?

Oh, Buddy Software. Yeah, so I actually don't hear that very often, but true story, when I was in high school, I thought it would be cool to start the nickname Buddy Beckstrand. And it was just, I don't know, it sounded funny. And then earlier in my junior high days, I had like this idea that I would start a software company called Buddy Software, 'cause everyone needs a friend in the computer business. And I never did.

Oh, great tagline.

I might, I might someday. I mean, back then that was the way I looked at it. But anyway, so yeah, Buddy Software. I haven't checked to see if anybody's got the domain name, but someone might Reserve it now. I don't know.

That's a great idea. I think you should reserve it. So it's never— you, you have this dream. I love that you have this, this dream of getting a nickname to stick and starting a company, and that those didn't— that order didn't quite come to fruition, but, but you did make— it's still there. Still there. Okay. Thank you. Still there in your dreams. Still on your bucket list.

When Buddy Software takes over the world, you know that finally My dream's been realized.

You, you heard it here first on this podcast from Startup to Grownup. But in the meantime, at least you weren't a complete, you know, dud because you now, you're the CEO of Master Control. What does Master Control do?

So Master Control provides, uh, quality, uh, provides software to quality management and life and quality management and manufacturing organizations and life sciences companies. So quality management systems, MES systems, and connected together specifically for pharma and med device and biologics, biologic companies.

Cool. And you took over that company, you're sort of an accidental CEO. That's kind of my understanding of it. How did you end up being the CEO of that company?

Yeah, I remember telling you this story when we first met. So, yeah. So, I actually had been serving on the board of directors. I was the chairman of the board of Mass Control. My father was an investor in the company. It was very, very small, sub-$100 million revenue. And just while everyone was kind of out of pocket on the board, there just were some issues with management and I had to come in and kind of take over.. And my father was actually up in Glacier Bay, Alaska at the time, unreachable. When he became reachable, I told him what happened. He says, well, yeah, it looks like you're going to run this company. So I expected, okay, well, we'll hire somebody, but, but that's kind of how I got this job. I mean, I always wanted to be, obviously Buddy Software, always wanted to be, you know, a software company executive. So, you know, it was, I was, I was, it's one of those things where like you prepare to do something and then you get the opportunity and it kind of fits together. And so, you know, I think that's how a lot of roles end up landing.

Yeah.

Right. They've, they've got the background, they've got the knowledge, they've got the understanding, and then they happen to have the opportunity. That's, that's me for sure.

Yeah. I totally get the prepared mind, but what I, I guess I have to really ask you, it sounds like a very dramatic story. Like, The board, like, you know, there's management issues and you're on the board and everybody was out of pocket and your dad was out of pocket. The, I guess the biggest investor. I mean, what came to your attention such that you had to take immediate action?

Well, Alisa, I'm, I'm under kind of a lifetime long disclosure agreement on the details of that. So I actually can't share them with you here. Um, but you know, it just, it was just a kind of a company threatening, uh,, situation is obvious, all I could say. And, uh, you know, we, we navigated it well and, and, uh, yeah, here we are today.

Yeah. And quick action sounded, I mean, it's important to be able to take quick action when you need it. I think that's really powerful. What experiences did you have in the past that prepared you? So you wanted to be an entrepreneur, you wanted to start the company Buddy Software, right? And then you had other, you know, probably forming experiences that wanted to put you in the driver's seat. What kinds of things like moments come to mind that prepared you for the moment of becoming CEO?

Sure. I took sort of a circuitous route. I actually, I studied accounting in college, got a CPA, went to law school, always intending to just use that background in business. So, you know, maybe rather than getting an MBA, which has, you know, kind of law, business, accounting, I kind of went that route of getting a little bit different education. Then right out of law school, I started working in-house for a software company doing mergers and acquisitions. And that, right, I worked in-house, did about 20 deals in-house for a credit union software company back in the day called QSET Technologies, which we sold to Fiserv, big, big banking software company. And from all that, the software operational experience, doing the due diligence, integrating companies and so forth, I got on the radar of a software consulting group within KPMG. So I worked for KPMG in Chicago, then in Mountain View on strategy products, on doing a lot of M&A work there as well, in an advisory capacity. And the way I kind of look at it is I really looked in detail at 80 different software companies. And so when I got this job, while I hadn't run a software company before, I talked to a lot of people that had run them. And I also had a really good idea of like what excellence is in running different processes, different areas of software companies. So, so like having a vision for like what it could be like, um, uh, was, was helpful.

Um, as I took this job, I, I love that, you know, but you didn't actually have, you know, you were consulting, you were advising, you had some legal experience. I mean, obviously you had a great academic background, so this was your first real like leadership role. And many founders who listen to this podcast, you know, their first job is also leader. And I'm just curious if you can take us back to that moment and you're starting as the CEO. Of this company. There have obviously been some, you know, some things happening and you're day one on the job. How did you approach, how did you feel first of all, and how did you approach figuring out what your first moves were going to be?

That's a really good question. I, you know, I took a lot of cues from the management that was already there. Some of them were good cues. Some of them were a bit misplaced, We actually had one of the first systems that we implemented was a consensus-based decision-making process that lasted, you know, a few months. And this is a company of like 50 people. So like, you're taking like what, like maybe, you know, a third of the company or maybe 20% of the company. And I mean, obviously we didn't, we operate, didn't, it wasn't fully consensus, but it was kind of designed to be that way. I mean, I guess it was, you know, the idea was like you get everybody on board with this decision, everybody knows what's going on. So it was easy to get buy-in, but it was really slow. And so that was like an initial, like, you know, poor direction. You know, one thing that helped is, so my father was the majority investor, ended up buying out all the other shareholders. My father, Richard Beckstrand, he's a long-term entrepreneur, you know, been involved in leadership roles in various capacities. And so, you know, one of the things we did is establish a set of core values. Built to Last and Good to Great were business books that I relied on a lot in terms of like trying to get my bearings. But, you know, in essence, like, like there is like the, the concept of like what leadership is in general, right? But when you're on the ground and you've got a company, you know, you kind of just gravitate toward like, what are the things that I need to do? And not necessarily think about like, well, what's the style I'm using right now? You just go get it done in a survival mode. I think a lot of founders kind of operate in that mode, right? So.

Yeah, I think that's definitely true. And I think, um, it's such a good point that you, you come in and you just sort of have to figure out, you know, assess what's going on. I had Bob Muglia, um, on my show. He was the CEO of Snowflake who, you know, took them from kind of zero revenue to right before IPO. And when he came on board, a lot of what he had to do was like assess, so what's working, what's not working. And how, and how do I know? And so I guess I'm curious when you first came in, how, how did you begin to think about how, what flags were you looking for? Like, oh, that is working or, oh, that's not working.

Well, again, I'd had a lot of experience about what, you know, doing something well really looks like. And so, um, yeah, I think at a small company, you know, like like sub, you know, like 40 people, I think the problems kind of stick out, you know, and for most small companies like that, the number one thing is to get some kind of, of, you know, revenue consistency. So like really looking at the sales process, you know, interviewing all the sales, like we didn't really have a sales process. So one of the first things that I did, I did was interview our most experienced sales team members. We brought in salesforce.com and implemented that, and we had to set up the stages of our sales process. And so I did that like through learning from our sales team about what their process actually was. You know, similarly on technical support, I remember going into the room where we had our 4 or 5 technical support people and asking them like, well, How many calls did we take yesterday? And they're like, well, we're not sure. Like, well, do you track them anywhere? No. And I'm like, okay, here's a 3x5 card, write today on there and start, you know, let's start tracking some stuff and start figuring it out. Right. And of course the systems get more and more sophisticated, you know, but just kind of going in, seeing what's going on, trying to implement some kind of You know, minimum viable process that can start us on a path towards, you know, getting to true excellence.

So, yeah, I appreciate that you said that. I mean, I know again, you were a new CEO coming in and it's a different environment, but I think what happens often is we get this notion of leadership, which is like, you've got to delegate and you've got to trust them. And I'm all for delegating, all for trusting, but you kind of had the instinct that you need to kind of get in there with your hands and really assess like what's going on. So that I can figure out what's, you know, what is working and what's not working and who I can delegate to and who I can trust and who I can't trust.

Yeah, no, I mean, uh, uh, I have an interesting thought on delegation, and that is that, like, you, you can't even consider delegating until you have people that you can trust to do the job. And so, you know, when you're a founder in a small company, like, like delegation isn't always an option, right? And so delegation really is a function of hiring the right people. And if you're still, if you have the right people in place and you're not delegating, then that's your problem. But if you don't have the right people in place, then delegation really won't work anyway. So yeah.

Yeah. Yeah. Totally.

Once you have the right people in place, they like, they take stuff from you, right? So it isn't as much of an issue. Yeah.

Which is actually how you know they're the right people.

Absolutely. Yeah.

In part, right? Yeah. I think that's very well said. You know, you mentioned your father who sounds like he was really, you know, in some ways a mentor to you, someone who had, had experience certainly with his company, but also with other businesses. Was, was he a good mentor to you? Was he one of the people who helped you find your way in the first, let's say year?

Oh, absolutely. I mean, uh, so Yeah, he had, he, my father's a really kind of a unique individual, very self-made. He's, you know, he's put himself through college running a janitorial service and a fruit stand. He established a consulting practice. He drilled oil wells. He became a commercial real estate investor. At one point in college, he was, he had a scheme where he owned the largest position in Pan Am bonds. And actually there's a write-up in the Wall Street Journal about this from back then, but just a very inventive— by the way, what he did, they just, they didn't have a specific rule that you can't do it anymore because it was obviously didn't have the money to do that. But I mean, just a very inventive person, very much of a, you know, when we talk about entrepreneurs today, we think of someone who starts a company and takes it to a certain point. I view him as more of a true entrepreneur. Like, you put him in a situation and he looks at it and decides whether he could make money doing it. And if he thinks he can, he'll just go do that. And so, so lots and lots of experience there. So yeah, definitely, definitely a strong mentor for me. And, you know, had some, some really good counsel in like, you know, how to proceed. But at the same time, he wasn't running the company. So You know, there was a lot of things that I just had to do kind of by feel too.

Yeah, for sure. Can you think back on, you know, again, in those early days, maybe some specific advice or direction he helped you with by either advising you or helping you assess or diagnose what was going on? Anything specific come to mind?

Well, it definitely was. Um, so I mentioned one, just like, like pointing me to some specific business books, right, that helped me to gain some theory and philosophy behind what I was doing. Also helped me to communicate that I was using some best practices. And I think that's, it's funny 'cause I think using business books like Good to Great or Ultimate Question or You know, we also use for leadership, Leadership and Self-Deception, like the 7 Dysfunctions of a Team. Like, they not only give you some information that, like, you can do, it helps you be a better leader, but also it helps you to communicate to your team, like, here's a philosophy that we can all use together. Having a coherent strategy like that, that's based on some kind of content that's third-party and approved, that does help, I think, draw a team together very closely. So we actually, as a team, we kind of adopted at that point, we'll all read the book, figure out how we can implement it in our business,. And so that was, was very helpful. Another thing is, is it's really helpful to have someone who's got some experience and, you know, you know, miles under their belt to help you make judgments about individuals, key individuals, whether it's hiring or whether having issues. So definitely bouncing, you know, bouncing ideas about what, you know, this is an individual that I'm working with, here's what they're doing, does that make sense to you, you know, and how should I handle it? Because definitely I think one of the things for a new CEO, that idea of like, like projecting, like helping someone to do their job, understanding when they're not, and Dealing with that situation of like, I've got to, you know, this person's not doing their job. I got to either help them get better or find somebody else. That's not something that necessarily comes natural to most people. So having help with that is good.

Totally. Especially from someone who's really seen a lot before and experienced that before. Yeah. That's so helpful. And I, I'm, I'm glad you mentioned those books. I wanted to dive into those books, but I'm specifically glad that you've mentioned Leadership and Self-Deception, which I know when we met. You mentioned, and I was like, oh, I love that book. Um, I love that book, Leadership and Self-Deception, because it's such a great, um, explainer for how we all deceive ourselves, how it's a normal human practice to deceive yourself. And again, one of my values is like the truth and finding the truth and circus seeking for the truth. And you can't do that unless you're willing to look at like the unpretty picture of who you are and your biases and kind of things that come up. Is that what you found helpful about that book or about those philosophies inside of that book?

Yeah. So, and we consider like that book along with Outward Mindset, kind of they're both by the Arbinger Institute. And I think like to me, the self-deception, the primary self-deception of most leaders is that now I'm in this position and everybody just kind of works for me. And like, I just go tell them what to do and then like it happens. And if it doesn't happen, then I have the right to kind of just get angry about it. And, you know, that frame of leadership, that kind of power-based leadership, it only gets you so far because people don't like to work for those kinds of people. So if you're in any kind of an industry where which in my industry, tech industry, and, you know, in Salt Lake City, right? In the Wasatch Front, there's lots of opportunities here, right? So if you're in any kind of industry where the people have, you know, mobility, then they're not going to want to work for you. And so understanding that leadership is based on influence and that you gain influence and a rapport with people when you understand them as individuals, not as objects that are there to accomplish whatever you need them to. I think that's like the primary. So the self-deception to me is, hey, the people around here all exist to do what I need them to do. And like, there really isn't anything else. The truth is, is they're all here because they're trying to support their families. And what they really want from you is they want you to ask them, hey, what's the next step? In your career, where do you want to go and how can I help you get there? And once you're aligned, it's a completely different discussion. And so that's, that's the thing that I get out of Leadership and Self-Deception. And again, Outward Mindset, I think also is another way of looking at the same thing.

So yeah, I'm going to totally check out that book. The second book is called Outward Mindset.

It's Outward Mindset. So it's, it's basically like, yeah, because Self-Deception, Leadership and Self-Deception, It's all about like, you, you, by looking at just what's at your own interests and thinking that other people are looking at it that way too, that's the deception. Outward mindset is kind of the opposite of that. It's, it's, it says that kind of leader is having an inward mindset. If you have an outward mindset, you're, you're actually, you're actually looking at the needs of others and considering how you're aligned or not aligned and— it's really good for not only leadership, but also looking at how we work within silos and organizations as well.

Yeah, it's so powerful, John. I love that you're talking about this because I think it can be very simplistic, the sort of command and control style of leadership, and you need to do what I need— I want you to do, without recognizing that the way you're going to get discretionary effort from people, and to your point, choosing to stay, when mobility is everywhere is creating that conditions where you're trying to be a leader for their, for their good, right? Obviously you need to build a thriving business. Obviously you need to be successful and obviously you need to hold people accountable and all those things. But you know, that they understand that you're putting their needs and desires and goals into the, into the mix and maybe into the heart of the matter. And I think it's like a very, I think people don't understand sometimes the bigger picture of why that's so important. It's not just to be nice to people. It's much more deep than that.

Yeah, it's the difference between aligned interest and, you know, interests that don't align, right? And once your interests are aligned, you're gonna pull the same way. So, yeah, for sure.

Yeah, for sure.

I think, like, in the end, like, leadership is about the influence that you have on the people around you, that, that's what a leader's job is. And so to the extent that you use a power-based model, which we all have to sometime, you, a lot of times you erode your influence when you use the power-based model, which I think you have to. And I always judge like, like, what's the, what's the best way that I can get this done and, and still maintain you know, a shared interest. Because if I go against that, then I erode some trust.

Right, right. 100%. You know, one thing you also mentioned, and I know is important to you, how, you know, when you were coming in and you were just doing what you needed to do, but then you stepped back and talked and thought about values and culture. Can you talk about, you know, inside of the company when you first took it over, when you realized that establishing values and culture was important to you and it was gonna be important for the success of the company, and then how you went about doing it.

Yeah. So again, like just going back to Built to Last and Good to Great, like Built to Last, it's basically like companies with core values, they're the ones that really survive. And so establishing values was super important part of that. And then in Good to Great, it talks about your hedgehog concept, right? And like really finding the thing that like you can focus on as a company. So I think between having values and then having like a strong mission, those are two things that like early on, were important. But the truth is, is like, I thought, and I think Master Control as a company thought that our job was to help quality professionals do their job better for a really long time. So I'd say from like, you know, I started in 2002 until about 2012, that's kind of how we looked at it. Then in 2012, this actually, this has a root in some business philosophy as well. So TED Talk by Simon Sinek about, I'm not sure I said his name right, about the golden circle, right? And so he repeats over and over, people don't care about the what, they don't care about the how, they care about why you do it. They don't care about what you're doing or how you're doing things. They care about why you're doing them. And so that was the question for us is, yeah, what we're doing is we're making quality manufacturing professionals in life sciences more efficient, but why are we doing that? And it's funny how sometimes that takes a lot of thought to really understand and get to the heart of the matter. And so we spent some time in a retreat kind of defining why we're doing what we're doing. That was how we kind of got to our mission. And then I, um, that year in our customer summit, I did a, uh, my plenary was all about rolling out Mass Control's mission statement, which is that we're helping our customers get their life-saving products to more people sooner. And when we realized that, and it's, it's fun, it's a really bold statement for a company that like Like we were, we have, we're a small part in the life sciences value chain, right? But we're an important part because it's hard to get a life-saving product to market because there's, because patient safety needs to be considered and that spawns a lot of regulation. So, you know, you take an average product that needs that, where it's discovered and now people could use it, you know, there's another 6 months to a year between, you know, the manufacturing and quality team to get that manufactured in a state where people could actually use it. So if you take a life-saving therapy, you know, like a, a cancer treatment, and if you get that to market 6 months sooner, there's 6 month for months worth of people that have that ailment that now have that life-changing therapy. And so like, yes, we actually can save lives through better quality and manufacturing process. Who knew? You know? And, uh, when we realized that, and honestly, I think it was not just us aligning our efforts. I think it helps our customers align what they do, our quality manufacturing professionals to hear that. Hear us talk about that in that way. I think they, I think, tend to get stuck in the day-to-day as well. But, you know, when they interact with us, we talk about, you know, that they're heroes, right? They're saving lives. And it's true in a roundabout way.

No, totally. I love that. I just had a conversation literally today with a client about how do you, you know, get the service providers, like the, you know, the AP clerk on point with the mission. And it's the same thing. It's like, you know, the AP clerk is building the infrastructure so that the company can complete its mission, which then hopefully does good things in the world. And I think it's really important to make that case. And it's easy to get stuck in the day-to-day, 'cause day-to-day is like, I gotta fill out this form and I gotta write this email and whatever. And you forget to be elevated by the purpose of what you're trying to really accomplish in the world. So I think it's super important for you and your company to think about that. And also it's, it's beautiful to be able to remind your customers of that because they're just like, you know, they're just putting one test tube and moving it from here to there. Like, you know, it's hard to remember that no, what you're doing is, is life-saving.

Absolutely. I would say like, you know, if you take core values as the first step, understanding Frost, understand our mission was the second step. I would say like the third step in, in my evolution of, of understanding like the type of organization I think that I need to influence in order for a company to succeed and grow in the long term is just affecting the leadership style. 'Cause when a company's small, you affect the leadership style just by your own, how you interact. But once a company grows to a certain point, then your responsibility as a leader is to hire leaders that will do things in a way that protects a positive culture, right? So you still have an advantage. Like small companies, if they have good leaders, they have an advantage of, they have a cultural advantage over large bureaucratic companies. So, you know, you get to a point where like you no longer have that advantage just through your own influence. And that's the point where for Mass Control, I realized that, and this is something I haven't heard a lot about other companies doing, but we actually have a leadership standard, which we built. And I initially fashioned it as a bill of employee rights, which sounds kind of funny, but it was what employees should expect of their leaders.. And, uh, I liked it that way cuz to me I wanted everyone to, to like say, this is, this is how we lead at Master Control. And if your leader isn't leading this way, you, you should have some, there's some right that you have. Obviously it's not a constitutional right that you could enforce in a court of law, but like, you know, come and talk to us about why that's not happening. And then, you know, our job is to go address that cuz we want to have We want to build a leadership brand at Master Control where like, hey, if someone comes in, they're going to get some kind of uniformity to their experience.

I love it. The employee bill of rights. That's so good. What kinds of things are in the employee bill of rights?

So, we had to refashion it because we became a little bit more global and talking about the bill of rights doesn't mean anything to people outside the US. So, right now we call it our leadership code. And so there's 5 aspects of our leadership code, and we kind of speak of them in kind of a tech speak, and I'll see if I can get them right. I'm not sure I get the phrases right, but so the first is the people equation. And the statement around that is that, you know, we treat people as people. And so the curriculum that underlies that is the Arbinger Institute books that we already talked about, Leadership and Self-Deception, Good to Great. The second code, and I think treating people like people is really important to be a good leader. The next one is we call it the trust algorithm. And so it's, it's really breaking down trust, making it something that a lot of times we think of trust as like something you just have or you don't. And not something that can be broke down, analyzed, built, improved, repaired. And so underlying that one, we really love the book Speed of Trust by Stephen Covey. And in that book, it says that trust is a combination of character and competence. So, and the way I look at that is someone who treats people with integrity, right? And has integrity and delivers results. Cause you gotta have both to have trust, right? If you think someone is, has good intentions and is a good person, but never does what they say they're going to do, you don't trust them. If you think of someone who produces results, but you question their motives and why they're doing it, um, then there's also low trust. And so I mean, there's a lot more to it than that, but those are— that's the trust algorithm. The third one is feedback loop. And so, you know, whatever, you know, being leaders that can foster and take good and honest feedback is critical for any culture to thrive because you're just not going to get it right and there's going to be misunderstandings. Um, so feedback loop is a critical one. We don't have a specific curriculum under the underlying that one. Um, other one is we call it the innovation framework. And, uh, so, uh, our ideas, uh, leadership has to be, leadership has to be in a, in a situ— they have to foster innovation among their teams. And for us, that's all about having a growth mindset. And so they're about called Mindset by, I think it's Carol Dweck. Um, and it basically talks about there's, there's a growth mindset and there's a fixed mindset. People in a growth mindset, um, they are willing to take risks because when they come up short, that's how they learn. And they don't feel like their intelligence is fixed. They feel like that they can grow by doing ambitious things. That's the critical thing. In an innovative culture is to encourage your teams to do something hard and not to penalize them when they fail, but rather, and also not to ignore it, but to say, "Hey, what's going on? How can we succeed? What did we learn?" So, that's the innovation framework. And the last one is is meaning, meaning in our work, right? So, the 5th one is like helping people understand the context of their work in terms of how it brings value to the customer and also how it's connected with our mission. So, those are the 5.

I love that. That's so robust and well thought out. Did you just come up with that like in a dream one night, or how long did it take you to really kind of hammer that together? And then I definitely want to know how you communicate that regularly to your leaders and managers.

Yeah, so I think that's been— we've been working on the Leadership Code going on, I think, 6 years now. And so initially just started with like kind of like, well, what are the the principles that we've used in our business from a leadership perspective that stick. And, you know, we had discussions with our team and just kind of gathered it together. We've made modifications. We've added and subtracted from it a few times. And, you know, we have a retreat coming up again and we'll again say like what's missing and what's the least useful and try to replace something and improve it. So it's just kind of something that's developed. It's, I view it, it's kind of organic too. Like if like we don't ever really mention one of those, then like maybe that's not really a part of our leadership culture. Maybe it's not as important. So just kind of developing over time. The way we talk about it at all of our leadership meetings, and then we have specific trainings on each of the 5. And then like where there's specific situations that come up, we'll talk about how this principle applies in this situation or that situation.

Yeah. Have you ever had to make a tough decision that like maybe was, um, hard for the business or hard for someone you really appreciated and liked, or in some way difficult in order to honor this leadership code?

Well, it's funny because, um, uh, our employees bring it up a lot. And, you know, a lot of times if something's— if they feel like something's going wrong, they'll blame it on, like, we're not following, um, the leadership code. And sometimes they're right, and sometimes they just misunderstand it just to be something that should make their job always nice. Right? Like, oh, if we have good leaders, then I shouldn't really ever have any troubles. So, you know.

Yeah. Or have to work overtime or whatever.

Yeah.

Yeah.

But yes, I've had multiple instances where we've brought leaders in who didn't really meet that standard and where I've had, you know, specific, you know, complaints or themes coming up from their teams where I've talked to the leaders and they haven't been able to understand what the problem is and haven't been able to correct and grow. I've also had a situation where I brought a leader in who came in and, like, just, you know, was completely oblivious to some aspects of our leadership code. And where, you know, and now this is something I really try to do now early on, like within a few weeks, I want to sit down with that individual and talk through. And I have a couple of specific leaders on my team right now that have shown amazing improvement. Because, you know, honestly, like nobody wants to be a, like especially anyone who comes into a C-level position at a company our size, if they've got holes, like, and, you know, as a CEO, if there's a hole in their leadership style, I may be the only one that can help them fix that. Right. And especially coming into a company new where, where, you know, you have that opportunity right then to like, like kind of the contrast is really great at that time. It's a really good opportunity. And it takes some effort. You got to, put people in a, you know, you gotta be humble in terms of like, well, nobody really meets the standard. And like, you know, you kill it in these other areas, but you know, here's something that's gonna hold you back your entire career. You know, like if you don't see people for who they are and if you just treat them as objects, like you're the population of people who are gonna wanna work for you, for a long period of time is going to be really slim, right? And you're going to miss out. A lot of good performers won't want to be in your organization. And so, that can affect your success as a leader drastically, right?

Yeah. And so, it sounds like you're the one who takes— I mean, I can understand that you and your role for your C-suite leaders, it's like you're the one who has to be able to take the time. Do you ever have trouble having those conversations? Or was there a moment that was a particularly difficult conversation for you to have? Because that can be very challenging for people, especially, I just wanna say again, like very often founders are inexperienced, they're younger, they haven't had these conversations with people and they may not know how to do it. So they put them off and put them off and put them off and a year goes by. How have you handled overcoming, I think, what is a normal reluctance to talk to people about what's going on?

So I always have trouble having those conversations. They're always hard. Um, yeah, where they become easier is where, um, there's an alignment in terms of what the individual wants to do with their career. And I always like, I, I guess it's, it's hard not to approach it from a standpoint of like, um, because it's for me, I, I, I tend to have a lot of anxiety going into those kinds of conversations. And a lot of times when we have anxiety, our communication style can change. And so you can, you can be more abrupt, even, even angry or frustrated. So that definitely happens, you know, but to the extent I can become aligned with the individual, I like to say, look, okay, you know, I may or may not be right about this, but like, this is the chair I'm in. And you, you know, I'm the only one that may be able to give you this feedback and it might not even be right, but I think it's, I have some experience doing this. And so I think it will at least be useful to you. And then, you know, I like to, one of the things that I do, especially if it's more direct feedback that needs to be given, I like to write it out. Because I'm a little bit, I'm a little bit better and more honest in my writing than I am speaking. I tend to like kind of wimp out and use like, you know, less direct language face to face. And so that kind of forces me to give the feedback that I really think I need to give. And what I'll do is, is I'll write it out and I'll give it to them and we'll review the feedback. But I mean, that's only if it's really hard. But those are some, some ideas.

Hmm. How do you alleviate your anxiety? I appreciate that you shared, you know, the honesty that like, hey, you know, that can— it can make me anxious and I'm always anxious about it. What do you say to yourself or how do you pep talk yourself to have the difficult conversations when you're anxious about it?

Well, I don't really alleviate it. I think probably for me, it's, I've realized that there's a lot more pain in not having the conversation than there is in having the conversation. So that's probably the thing that, and I guess getting to the point, I mean, I'm, you know, I'm in my 50s, so I'm a lot more mature than I used to be. Like, I think as you get older, you recognize that some of the harder conversations are actually more human, more real. And I've lately, there's been some of them, if I'm aligned really well and I feel like, hey, I've got best interests in mind and I know what my message is, it can actually be something I look forward to a little bit. You know, just because like you're gonna get some stuff out in the air and make things better. Um, and, um, I guess the hardest part is when you don't think the person can change, you know. And, uh, so I think like I, I try to— well, if it's in that, if it's in that situation, the conversation is usually harder, right? Because you basically think that that person's not going to be working there after a while. Or maybe they're already, they've already like, you know, gotten to that point and that's hard. But yeah, I would guess that's the part where it's, I think it's really anxious for anybody. But even at that, of course, you can, you know, as a leader, like if someone has an issue that they're not addressing, you know, if you continue to tolerate it, you're not doing them any favors. I mean, they need the, if the message that you need to send to them is like, look, this is real. And if you don't address it, like you can't work here, but also like this, this could affect your career. That's, that's a hard message, but if you deliver it in the right way, it's, it's, it's the responsible, mature message to deliver.

So, right, right. And I appreciate what you're saying. It's like you've now also experienced time and time again how holding on to this doesn't help, right? You have to address it one way or the other. And, you know, I know that plenty of, you know, my clients and other people that I've just known throughout the years, it's like, let's put it off till Friday. Well, it's really not going to get better on Friday. Or it's just— I know that you think if you wait a few days it's going to get better, but I promise you it is not going to get better. And what's going to get better is when you have the conversation you need to have, and then it's behind you, not in front of you. And And that's the only thing that's going to make you feel better.

Yeah, I agree with that. And, um, yeah, as long as you have been— you understand the message that you're going to deliver. I think the time to delay is when it's like, I know something's wrong, but if I talk to this person right now, I'm just going to be like, something's wrong. That's not a good— like, taking the time and effort to like understand, like, maybe some specific things that you could, could, uh, feedback that you could deliver. And, like, the best practice is to start a conversation and then continue it, like, anytime you see that behavior, to, like, get right back to them and say, like, this is the situation where I see that that made you less effective in this conversation, or something like that.

Right. Very— I think that's very smart, very wise. Um, you know, we're talking about you giving feedback to others, and it's such, such an important topic for everybody and so challenging for everybody. What about you receiving feedback? You know, you're the CEO and not only you're the CEO, but you've been the CEO for what, 20 years? And so you're, you're kind of been there. And so people who come into the company and, and, and people who kind of relate to you now, you know, they look up to you and it's not like they're your day one where you walked in like, oh, I'm just me. How do you make sure you get the real truth from people. How do you make sure people say what there is to say to you, either giving you feedback or telling you problems that you must know inside of the company? How do you create those conditions?

Well, I mean, I've tried different ways to get feedback. At one point, I opened up my 360 to the entire company. And it was funny, like, reading through it.

Brutal.

Well, it was, it was brutal, but like, honestly, like, there wasn't very much use. Like, a lot of the stuff was like, you know, issues in the company that I knew about, or like comments of like, like, uh, comments or complaints that like weren't really valid if they knew what was going on. And not to be defensive about it, but it wasn't It was interesting, but there wasn't a lot. It was good to see how, you know, to the extent people were honest, you know, how I was seen or how I'm seen. One thing that I do have a problem with is anonymous feedback, especially in a company setting. I think that if giving feedback where you don't have to answer for it I think in some ways people think that that's gonna be more honest, but in some ways it's also not as honest because like, if you're willing to say it only if no one knows that you said it, then like maybe you haven't really thought through what you need to say. Feedback that you can kind of back up and is thoughtful and you're willing to talk to somebody about is certainly much, much more useful anyway. So I still do, I do 360s and I get feedback feedback from my team through there. I tend to like, I think, looking for signals that someone has an issue. And I tend to like, I don't get a lot of people saying, hey, John, I need to schedule an appointment with you, I'm going to give you some feedback. But I can tell when, you know, there's, there's an issue or someone's uncomfortable. And then like, you know, uh, sitting down with them and trying to dig out what the problem is.

Um, so sometimes you'll initiate that? Like, you seem to— you want to tell me something.

Uh, yeah, definitely. Um, and I think that's most people. If you, um, if you're observant, and maybe not like right away, but over time, if someone you're working with is displeased with you, they usually give you pretty good signals about it.

Yeah. And so, I think your job, what you're saying is that your job is to kind of notice those signals and make sure that lines of communication are open.

I mean, I think even more important than just feedback about my role and how I'm doing things is making sure that everyone is really honest about what they're seeing in the company. And so you asked earlier about Richard, my father, and how he's had an effect on the company. He has a really simple business philosophy that we use throughout the company. We talk about it all the time. And it's actually, we credit him. It's like one of the key philosophies in Good to Great. And that's, it's in Good to Great, they say confront the, the brutal facts, but maintain faith in your ability to win. Right. And Richard says, you know, you need to find the way it is, address reality, and then find ways to win once you understand what reality is. And so having like a really strong propensity to like, hey, let's— where are we? And what's real, because you can't really win until you address the problems. And so I think like as a having that philosophy throughout the company, I think it opens up a lot of discussions around like, well, what, you know, where are we really? And, you know, we want to have faith, but we don't have our faith that's grounded in a real good understanding of what's actually happening. Right.

Totally. Yeah, I love that. I'm a truth seeker myself, and so I love that idea of the brutal reality. And I, I think it's just so important. You can't— you actually can't make any good actions or make a difference or make a change until you understand what's actually going on. Yeah. So I wanted to ask you, speaking on the topic of making a change, so what I, you know, I was doing my research on Master Control, and I, I'm going to read this little snippet to you. MasterControl pivoted to developing software-as-a-service solutions, and then about 5 years ago, decided to expand the platform into the arena of manufacturing processes for growing life sciences and pharma companies. So, would the pivot you did and the expansion you did— first of all, is that accurate that you would sort of see it as those changes or pivots?

Yeah, definitely. I mean, until, you know, 2000, I guess from my perspective, it'd be 2015. From the market's perspective, it'd be 2018 when we released that product, but we started building it in 2015. You know, we were really solely focused on selling to, you know, the quality leaders of, you know, primarily life sciences, pharmaceutical manufacturing, biotech companies. And, uh, so at that point we like introduced the same industry, but totally different buyer. And actually, yeah, uh, very different in the sense that like quality is, is kind of viewed as like the brakes, the police of the organization, manufacturing. They're the ones that need to produce. Right. And so there's, there's like, you know, uh, an inherent, um, uh, tension between the two. So for us, it was a pivot, like, and the reason we did it, it's interesting. We actually had some of our smaller customers try to use aspects of our quality management product to build an electronic batch record system at their company. So a batch record, like, it's the record that follows a batch through a process. It's where you enter in like, you know, the weights and measures, the inventory, you know, all the aspects of a particular batch in the manufacturing process. And so, you know, in a lot of, you know, a fair amount of pharmaceuticals manufacturing lines, that's still done on paper. And the quality team is involved in how that's set up and how it's reviewed. So, You know, you can use our document control system with some process flow, right? We can kind of sort of use our quality product as a batch record system, but it doesn't work at all. So we started having customers ask us really specific questions about could they do this, could they do that? And we're like, well, why do you want to do that? Like, oh, we're using this for our batch record. And we're like, wow, that's That's interesting. And so, you know, over time, we realized that this is an area where, you know, perhaps the market is underserved. And what we really discovered is that for your large, high-volume manufacturing lines in pharma and med device, there's a lot of automation. And great solutions. But for, you know, a lot of the modern solutions that we use, you know, especially biotech, cell and gene therapy products, like they're more personalized. And there's a lot of variability in the manufacturing process. So, you know, a very automated manufacturing process won't work. And so, you know, Using that information from our customers, we've designed a product that's targeted toward those lines that have high variability and usually low volume as well. So more flexible and also building it as a SaaS product and so forth. So that pivot to have a totally different buyer and different target, it definitely was a change for us.

Yeah, that's a big deal. And I guess I'm just curious, how do you know when you need to make a pivot and what do you weigh in terms of the pros and cons? And what's it like to take a bet on something new like that? Because, you know, you could— it's like you do that, but then you're sort of going towards something else, but you're letting go of the past, which had been successful for you up to date. So I have to assume it's sort of a bit of a scary moment.

Well, I mean, I think there's lots of things that can go into any decision like that, right? For us, it was just a matter of like, we always recognized that early on, we recognized this tension being between quality and manufacturing. And for us, like, that's antithetical to what needs to happen, right? If you look at any, you know, great, you know, quality theorists, like you take like a Deming, right? Quality improves throughput. It makes it faster and makes it better. And so, you know, that's our goal is to help quality to realize that ideal., right? And to be a partner in the process. And so you're early on seeing angst between quality and manufacturing or something like we knew about that, right? And so to us, this was a natural extension of our mission, right? If we want to get life-changing products to more people sooner, being part of the solution of like helping quality make manuf— help manufacturing go faster, um, that was a logical extension. So it fit with our mission. You know, also looking just at the total addressable market, being a company that's vertically focused, you know, having, you know, more than one entry point into an organization, the ability to kind of cross-sell between the two. And the product fits fantastic, right? It saves both groups time and money once we get them all on the same page. So Those are some of the considerations. Right.

But didn't you have to really, like, you must have had to retrain your sales force and refocus on different customers and build a different situation. I mean, that's just a big change. Oh yeah.

I mean, we built the product as a skunkworks project, right? So we actually funded it differently and had the teams initially were separate. Then, you know, it took us a little over a year to like, we hired some professionals to sell it that were from manufacturing and just kind of as the, as we launched the product into the company, the market more and more, we hired more and more manufacturing professionals. I mean, like, we have a customer summit, right? It's all directed toward quality professionals. And it's gravitated toward quality and manufacturing. We just had it, um, uh, last week, um, here in Salt Lake City, and there were a ton of manufacturing professionals there, right? And so now it's a place that quality manufacturing, uh, professionals come together rather than just directed towards quality. So it, it's definitely like takes some time and you gotta step through it, but it was definitely an investment, uh, changed our branding, changed the way our, uh, how we talk in our website. Um, so yeah, changed— we had to change pretty much everything. Um, yeah.

How did you handle that change management? Well, a lot of things. How did you handle the change management, and what advice do you have for other leaders to handle change management?

Well, um, so we had So, there's a book called Nail It, Scale It, I think. I'm not sure if that's the title. That's what we always used to call it.

John, I love your bookishness.

Let's see. I'm looking it up, actually. Yeah, it's called Nail It, Then Scale It. And it talks about how you scale an organization. And so we actually use that as a way of managing how this project, like how the various aspects of it were moving in the organization. Because you like, you start, you build the product, then you have to like commercialize it, price it, you know, customer success, all those. And so we built like kind of a radar off that, that kind of showed us like, how are we doing? Each aspect of it. And so I'd say like, like being careful to watch like every aspect of the success of the new product or the new initiative. And then, you know, being real purposeful about understanding that it's going to take resources away from the current, it's going to change the messaging and so forth. You know, it's, it's an, uh, there's an element of, of, uh, creative destruction to it, um, in terms of like, you know, the, um, like you're, you're, you're going, you're, you're not selling to your current customers, you're selling to new customers, and your current customers are not going to be the ones that will get you to the new place. So understanding that too.

Um, yeah, but don't you have any naysayers? Didn't you have any naysayer employees who like didn't want to do it and didn't think it was a good idea, or like said they wanted to do it but weren't able to change. That's what most companies have, John. Maybe you didn't have any of those.

Yeah, I mean, the strategic fit was really good. So, we could definitely go to that. But I mean, it's really like, why are we investing in this new product when our current product needs investment? So, definitely there's that, right? And again, like I, there's, we talked about a lot of books, another one, Innovator's Dilemma, right? Which is like, if like your current customers will, they want what they have and they will keep pulling you toward more and more of that. And if you want to be nimble and to innovate, you've got to look at your non-customers. Customers. And so like purposely, I mean, I purposely had— I have a presentation where, um, I talked to the company about, okay, our, our current customers and our current— we're so strong in this area. We have such a strong solution for quality management professionals. But as we started out as a smaller company, we were like a speedboat, then became, you know, a tugboat and then a battleship. And finally, like, we're a We're an oil rig out there. Like we are stuck. This is our customers are the inertia is keeping us right here. And if we want to progress and build our product in our market, we got to go send a speedboat out and start the process over and let that innovate and come back and, and, you know, and it's hard, right? I mean, eventually as we pulled that back in, I think we made the mistake of probably tying it a little too closely to our current quality business. For a while. And, uh, but, you know, you gotta— I think that's something that there's an ebb and flow to that kind of thing a lot.

So yeah, yeah, yeah, that's helpful. You know, John, for any leader over like, you know, decades-long journey like you've had, everyone has ups and downs. Can you think about one of, one of your— what was one of your highest highs and maybe one of your lowest lows as leader?

Well, I mean, most leaders, their lowest lows are going to be, um, 2008 and '09 and 2020. I mean, I, I, I'm sure that most leaders will have a story where they're sitting at their home and, um, you know, uh, McKinsey, there's a paper that was circulating from McKinsey that I got a hold of, and it talked about every CEO should have a break the glass plan. You know, this was right during COVID right? And, you know, yeah, like in case of emergency, break the glass. Like, this is like that where you cut half your workforce to survive, right? And you look at the cash and how do we How could we make it? And so like, I just remember sitting over several weeks with my CFO, just like redoing all the plans and having like, not knowing where we were going to be and what we were going to have to do, coupled with, you know, obviously COVID, which was anxiety producing enough for most of us. And then coupled with in Salt Lake City, we had an interesting thing. We had an earthquake right there as well, which we don't have earthquakes there.

Oh my God.

We're on the fault, but we haven't had one for a long time. So it was like all this stuff all at once, you know, that's definitely like a low point. And, you know, for us, um, serving, you know, uh, medical supply companies, right? Um, you know, it, it, like, we definitely had, um, there was a mixed bag in healthcare, right? I mean, some things were in high demand and then a lot of other procedures just stopped. So there's definitely a mix with our customers. But as we turned from that point, figured out what our, the financial position that was strongest for us, we did, we'd done a minor cost reduction, but we kind of turned our attention to like, What are our customers doing to solve this problem and what can we do to help them? So, still really hard though.

Yeah, it's hard and it was hard. How did, I mean, I guess I'm just curious, what was that like for you? Like, what was the emotional experience for you as you were going through that?

You know, I don't know. It's funny, 'cause I think everyone is going through kind of the same thing. I'm not sure how to describe the emotion of it. I guess once the plans, like we had all the plans, it felt, I felt strong, I could align with my team, but definitely like you're facing an uncertain future where like you may have to be a person that puts people who are just, at their home, like sitting there out of work. The fact that the federal government was strong in terms of like a good message of being able to help people, that made it a little bit easier. But yeah, just a lot of stress and uncertainty. Yeah, I don't know how else to describe it than that.

Yeah, no, I hear you. I think that was a common experience for sure. Um, have you ever experienced imposter syndrome or severe self-doubt?

Um, yeah. So, um, yeah, I went to a, uh, a seminar or a big trade show where this one founder talked about imposter syndrome. And, uh, you know, I think, I think yes. All the time in terms of, I think, you know, I think the key thing, like a question, if you're like in my shoes where I've been at one company, right? Right. And I've, you know, we've been able to be successful. And so there's a question of like, could I ever do this again? That's kind of the heart of the imposter syndrome is like, I'm lucky that I'm doing this. I don't actually deserve to be here. And, you know, if I had to do it again, I probably couldn't do it, you know? And I think probably most people in my position would have that. And to me, like, it's not a very helpful question, right? I mean, I've kind of come to the point of like saying like, well, you know, I feel like, You know, I've been, I've been blessed to be able to be in this role. There's been a lot of great people around me. I mean, I don't, I don't really, I don't have much of an idea about like how much of this success that we've had is because of me and how much of it's in spite of me, you know, but I'm here. And so like, to me, like, that's where I conclude is like, it doesn't really matter. Like, just go look at what you can do to improve. The company right now and then go do that. And don't worry about whether you deserve to be here or not because this is where you are. So just, you know, act in that role, you know.

I think it's so realistic and very powerful, as in just keep showing up and doing your job.

Yeah, whether you deserve it or not doesn't really matter, you know.

Right.

Most of us don't deserve totally a lot of what we have, you know. We just move forward.

Yeah, move forward. Just a couple more questions, John. What do you wish you had known earlier on your journey?

Um, well, so we recently took some, um, uh, we didn't— we maintained, uh, private status, so you You know, my father and I and employees owned this company until just about a year ago. And we undertook a process and we ended up bringing in Sixth Street Growth. And just having an investor that is looking across the horizon of companies like ours and who has, you know, experience and operating professionals that can help. That's probably something that would've helped us immensely early on. Again, we would've had to give up some ownership to get there. Um, but even, even tapping into, to some of the consultants and professionals that are available, I think doing that earlier, um, having someone that can come and look at what you're doing and tell you where your blind spots are. It's been amazingly helpful. So I think like if there's one thing I would want to do earlier is figure out a way to get that, that same— I don't know, I'd want to give up the equity, but to get that same view and expertise and that same experience earlier. Yeah, definitely.

Yeah. That's so cool. I totally get that. That's really— and it's valuable that you have that now. That's really amazing. Last question, what advice do you have for founders as they embark on their journeys to grow into leaders?

Well, I think I'd have to say from just the story that we've kind of woven together, right? I'd say, you know, find a good mentor that can have a, that has an interest in what you do, that can give you good advice. That's one thing I would say, you know, try to stay private, just keep control of your company as long as you can. 'Cause the longer you do, the more you can take a longer-term view. And I think that allows you to build a stronger company. And another one would just be like, utilize the curriculum and the business books and the, you know, read them. And, you know, even some of the ones we've mentioned today, honestly, when you, when you get down to it, there is, if I talk to other professionals in the field, there's, we all kind of understand the same things from the same resources. And so, you know, getting a good list of here are some, some, some business books that can help me. And then going and reading them and trying to apply them to their situation. It doesn't always apply, right? But like from every thinker out there that's written a book, there's usually a few really good ideas that can help.

Totally agree. As an author myself of the book From Startup to Grownup, of course, I agree.

Of course.

You should all read business books.

That's the one you should read.

But that's, I think, Exactly. Thank you. But that's actually very powerful. I really appreciate what you're saying. You know, basically you're saying find help along the way and find help along the way from mentors, from, you know, books, from outside resources. Um, and I think that's really powerful. John, thank you so much for this conversation. You're such a deep thinker and a, you know, a philosophical thinker. And I just really appreciate the discussion we've just had. And I think it's going to help a lot of people.

Thanks. That's really nice of you to say. It's been, uh, just interesting kind of going through this journey and talking about, you know, 20 years of business from kind of a leadership and growth perspective. It's been helpful to me to piece it all together. So thanks for doing that.

That's beautiful.

Good.

Thank you. Thanks for listening to From Startup to Grownup. If you like what you heard, give it a review on Apple Podcasts so other people can find it. And if you know of a founder or someone else who is meant to be on this podcast, Drop me a line through my website, alisacohn.com.