188: Scaling Up Insights — Coach Panel with Eugene Terk

Hello, and welcome again to the Scaling Up Business podcast. I'm your host and scaling coach, Bill Gallagher. So on the show with me today to talk about all things in the world of Scaling up is Eugene Turk. Eugene is vp, biz dev and general counsel for Align Technologies. They're the creators, they're a software tech in our world that created the Align app and then the Scaling up scoreboard, the version of that that we use to keep everything alive with our clients today. Welcome to the show, Gene.

Thank you, Bill. Appreciate the invitation.

Have you been on the show before?

I have not, no. I think you've had our CEO Doug Walner as a guest before, but I have not, so thank you.

Nice. Nice. And Eugene is in New Orleans, or it's a little later in the day and I'm just outside of San Francisco. Eugene, you're just back in from playing tennis or something this morning, right?

Got a little bit of exercise this morning? Yes.

Awesome. Well, I need to get a little something in before it turns rainy here.

Again, it was the benefit of having a beautiful New Orleans winter day, which is, you know, temperatures in the 60s.

Love New Orleans. You know, it's funny, I always wanted to go to New Orleans. It had such romance and lore for me, and for decades I hadn't been. And which is funny because I've been an awful lot of places. It's maybe one of my chief qualifications in life as I've been places. And then all of a sudden, in one year, I was there four times.

You grew to love it.

Yeah. Yeah. Super fun. All right, so welcome to show, and we're going to talk through all the kind of news and latest things in the world of Scaling Up. We're going to start off with culture today. And maybe the preeminent guru in the world of this for most of us is Ben Horowitz. What you do is who you are. And there's news this week from Horst Schultz's book excellence Wins. And maybe one of the more studied and renowned CEOs out there for creating the Ritz Carlton organization. And, you know, he's going along and he's got just an enormous. He's done so much in the world of creating a very distinct culture. Have you ever stayed in or do you stay frequently in Ritz Carlton hotels?

I have stayed. I have had the pleasure of staying at Ritz Carlton before. Yes.

I love Ritz Carlton experience. And it's funny because I don't stay in them a lot, but I wish I did.

It's interesting what you just said. Is the Ritz Carlton experience. And I think that's exactly what they have done because staying at a Ritz Carlton truly is an experience. I mean I'm a Marriott Rewards member and I'm very loyal to staying at Marriott's wherever I go when I travel. But I've had the luxury of staying at some Ritz Carlton's on family vacations and other things and it truly is an experiential, you know, hotel stay. They make. They go really go out of their way to know you, to know sort of who you are in advance of your arrival. They greet you by name. They're really sort of, of elevating the experience of that hotel stay.

You know it's funny, I, I went to Overt Skelton for the first time when I was like, I'm trying to guess, I was 26 or something first time I stayed in one and, and I was on a like a cross country market research trip. We were looking into different market segments around the country and that kind of thing. And so I'm booked in this hotel and I drive up in my rental car and you know, Hurt's car and I hand him the keys and I asked me my name and then I go upstairs and they've upgraded me and they've, and they asked me what kind of wine I like and like that kind of thing. Then I go out for dinner and I come back and they, the guy with my car remembers my name and then they remember my name upstairs and they asked me if I'd like another glass of. And they've remembered the wine and the whole thing and like that whole thing and they're gracious and elegant and then sometime later I stay at another one years later in San Francisco and I stay at one in the Caribbean. And every time they're like remembering me and engaging me in a very different way and it's not true of the other. And now Ritz Carlton's part of the larger Marriott brand family but they don't have that same thing across the board. Even though I'm the Super Diamond Elite Titanium Platinum every.

I think it's just their focus on the premier customer service experience. Like they don't see a hotel guest as just sort of a commodity. Everyone is unique and different and they treat you with the care and respect that you sort of want to feel when you, when you're staying at a luxury resort or hotel location. And so it really goes above and beyond and you feel it. I mean you certainly experience it, you enjoy it and you hope that every time you stay at a hotel, it's a Ritz Carlton like experience, but unfortunately it's not. We've all seen.

The only reason that I don't sometimes or often is that a lot of my travel is expense to clients. Right. And I feel a little self conscious to tell them I'm staying at the Ritz Carlton on their nickel. Even so, if it's like the only hotel available or it's noticeably under budget or the other surrounding properties, then I'll stay there.

Yes, agreed. And I will say this, I haven't had a chance to read Horst's book yet, which Vern mentions, but I know, and I've heard Vern talk a lot about how one of the real things in terms of building culture within the employees of the Ritz Carlton is the fact that they do a daily huddle, is that they are very committed to sort of having that daily standup where they talk about, here's who's coming to stay with us, here's who's already here, what we know about them, and sort of sharing that information with everyone from the guy who took your car at the valet stand to housekeeping to the concierge. That's how they are able to sort of share information about what each and every person in the organization might know about each guest. And so that's how that information flows throughout the organization within that hotel.

That's really great. And I was going to point out the same thing, this notion of a huddle on a global basis that they do really, really well. And Verne's famous for talking about how Silicon Valley couldn't run without the daily huddle. But I think that I work with a lot of those companies and in fact, the huddle doesn't go all the way through. And that's what I think different about Ritz Carlton. Many operating teams in lots of companies and industries have huddles, but the leadership levels don't always have huddles. And I think that's what's the most transformation. Like, it's one thing to say have a shift coming on at a restaurant, have a huddle. That's one of the more obvious ones. If you've ever worked in a restaurant industry, you'll see the shift comes together and they're like, you know, sell this, and here's the special, and this is the wine we're focusing on. Here's a contest around the surf and turf and we're out of this item or like that kind of briefing. And retail stores and lots of places will have that kind of a huddle. What I think is less common is this notion of a connection of cascading huddles. So like now food and beverage has done their huddle, or this restaurant or housekeeping, but now that supervisor manager is going to get on one with the hotel in general or the group of departments, and then that hotel manager is going to get on one for the region or globally. And I think that's the part that's harder to get people. You know, it's like the leadership sometimes feels like everybody else needs to eat the dog food. Except.

I've also seen quite the opposite where leadership will huddle but frontline employees won't. You know, they're too busy sort of doing the day in and day out work of the business.

Right.

But I think it's just as critical to have not only leadership huddles, but also those frontline employees who can share information with supervisors, who can then take that up to the next level of huddle where it will ultimately make its way to a leadership huddle. So I think it really helps facilitate. Certainly, you know, at Ritz Carlton, I'm sure housekeeping might have some piece of information that the general manager might only learn through the cascading huddles system within that organization or within that particular location.

Yeah, well, I encounter a lot of resistance within some companies to doing the huddle, and then even others that embrace it have some common challenges when they're contemplating doing it. One of our clients, a little bit larger firm, thousand person firm, half a billion in sales in the last year, went through and implemented the huddle almost without hiccup. When we introduced it, they were like, oh my God, this is amazing. And they have it from the leadership all the way down into all the operating teams. What? They don't have as much as the connecting from the levels or between them, but. Well, actually they might. Now, I haven't looked at how they're doing their huddles. The beginning, they didn't have that. And what was really great, like, there was one story that I came across in one of our quarterly team sessions. And they came back, they said, oh yeah, we're working on a $50 million finance deal with some bankers. We had the bankers in the office. We're like, excuse us for a second, we have to go run out for a minute, we'll be right back. And they pardoned this. They stopped this meeting. And then they went off and they did their huddle and they came back, they were like, tell us about what, what, what were you doing? And, you know, and so they filled them in on their. Their discipline around the huddle, and they were like, that's awesome. And that's why we're investing in you. You know, that's why we're doing this thing, because you have this rigor. And I find a lot of times, like, people chase down every client and everything, and they, like, they bend over backwards to do everything on everyone else's terms with disregard for the rigor of their own operations. And they, you know, they get into issues. And I think that's what's so cool about the Ritz Carlton story is that here's a global organization that does this kind of thing in this kind of practice.

I think they're. They're a prime example of how to do it right. You know, we also, we. We hear a lot of companies that will say they struggle with implementing huddles because they're not sure of what information needs to be shared in a huddle. Yeah, they always struggle with. We understand the concept of the huddle, but we are always struggling with what is the type of information need to be sharing with one another. So, you know, it's hard to get the huddles right from the get go. But I think with that discipline and the rigor that you talk about just being committed to it, you sort of start to learn the rhythms of your organization. And, you know, sales might be sharing completely different information than what marketing is sharing. But you may have supervisors that hear different things that they then take to the leadership team and say, this is what we're hearing in sales. This is what we're hearing in marketing. These are some obstacles that our people are encountering. Let's figure out ways to help them work through those things.

Yeah, well, it's funny how, like, sometimes I'll hear, oh, one of our key issues, we're really in silos. But then we don't want to give 10 or 15 minutes a day to connect. Dude, there's your answer right there. And then the other one is the CEO will say, well, my team doesn't really want to do the huddle or the teams or any, like, anything. I'm like, okay, whose company is it? Who's the CEO? Are you running a democracy of consensus? You know, I don't think so.

So, yeah, And I. And I know, you know, scaling up coach Chuck Kocher, who teaches the Growth Institute NBC, he always tries to harp on the fact that you have to be a daily huddle truly is daily. You can't have a daily Huddle twice a week or a daily huddle Monday, Wednesday, Fridays. So, you know, you have to be committed to it and really sort of make that it's daily and then it becomes part of the culture of your organization. If you really want transparency and a free flow of communication, that's the way to do it. That helps break down those silos.

You're absolutely right. Right. I think what we don't do is like on the, on the day that we have our weekly meetings, we don't do a huddle with the team that's in the weekly meeting also. Right. And you're not overlapping meetings and meetings like going from your huddle into your weekly meeting.

You know, certainly like as a line, as an example, we do have a daily huddle that's all hands, everybody in the organization. We're 15 employees.

Yeah.

13 are in New Orleans and two are remote. And so at 11:47 every single morning, we do have an all hands daily huddle. We also have a separate daily huddle that is for our development team that's kind of the scrum. And we have a separate daily huddle for the sales team. And then once a week that sales team will also have a weekly. But on that day they don't have a separate daily.

You're absolutely right. Well, it's. So daily huddle is transformation. I used to start working on the weekly meeting before I did the daily because I always felt like the weekly meeting was the connective tissue between the quarterlies that I was running the plans that they created and following through on them. Whereas we're not necessarily looking back at quarterly priorities in almost any daily huddle. But I found that it's less impactful in terms of the overall culture than the daily huddle. So I flipped that in recent years and I focus first on the daily huddle and then getting a better weekly meeting going.

And have you noticed a significant impact in your clients that when they implement daily huddles, first they tend to get sticky? You know, the concept of the huddle tends to stick better in the organization culture.

Right, Culture. What's the root of the word? Culture is cult.

Cult.

And we want you to create a good cult. Right. Not the, you know, turn your back on your family and friends and surrender all your money and sleep with the founder.

Cult.

Drink the Kool aid. But the good cult, like based on it, you think about cult like companies like Apple and others that are, that have a culture. So what's culture comprised of rituals and traditions and even some specific language where you can Build a culture that's rooted in your values, your purpose, your brand promises, using your language with your rituals and traditions. Right. Rackspace is who I was thinking of right there. There's a company fanatical support. So they have not an employee of the month, they have a fanatic of the month. They put person in a straight jacket, they take their picture, they have some fun with it. Culture is also an access to fun. Right?

It should, it should be, you know, if you're having a good culture in your organization rather than bad culture.

Well, and you think about like in, in our families, in our, like we have certain cultural traditions in our extended family and a number of them are religious based. Right. So one of the things that, that we'll do is have a Passover meal, but we have enthusiastic participation from people who are atheists in the family. Right. Because they like the tradition of it and the lessons of it and the experience of it. Even if, you know, they, they think the Bible is not a word of God document or like that kind of thing. And, and I think that's really interesting. Like, it's much more than that for us. These are things that are deeper even than, than that. So.

And I think if we just go back to the Ritz Carlton, I think people.

I can't believe I brought religion into this. That was a mistake.

That's right. I'm bringing it back to the Ritz Carlton because I think people who are regulars of the Ritz Carlton might say that they're part of a Ritz Carlton cult.

Cult. Yeah, yeah.

You know, they, if given the option, they will always choose to stay at a Ritz Carlton over some other even luxury resort. Just because they buy into the cult of that type of experience.

Yeah, yeah. Well, and it's not just luxury. Right. Like, I fly Southwest a lot because I live as do I. Yeah, you do too. And to be honest, I would rather fly like Singapore Airlines first class, you know, Emirates business class. Like, that's my choice is the nice luxury thing, like, you know, do everything for you. However, on my local regional flights, I need to go to la, Orange County, San Diego, Las Vegas, Phoenix, like all those things. I always fly Southwest, and I would rather fly Southwest over the other because I am looking for that flight that has nine flights a day. And Southwest has a culture built around turning things fast and keeping it simple and light and. Right. But I just want to get there, you know, that's an hour away. Not a, not a 10 hour flight to Europe or Asia or whatever. Right, right. Well, I'M buying into that cult.

And also I am also a member of that cult. I prefer to fly Southwest because I also think that flying Southwest is easy. It's easy, just get on. And particularly for business travel, if a meeting runs late and I need to change flights, if my original 4o', clock, I now need to take the 6o', clock, it's very easy for me to do that and it's very easy for me to not have to, you know, pay for bags that I'm being. That I'm checking if I'm bringing my whole family on a vacation or something along those lines. It just, I know exactly how their system works and it's very easy and, you know, it's not stressful for me, you know, because flying in general can be very stressful. So they try to, I think, as best as any airline can, take the stress out of flying.

Yeah, that easiness overall. And for me it falls mostly into their brand promises. They're known for low fares, lots of flights, lots of fun. And I don't know how much fun. It really is. It's fun to get there quickly and to be done with it. It's fun to. But it's the lots of flights really that I'm. And the ease of the booking that I'm into.

I think certainly their flight attendants try to make it fun.

To be lighthearted.

Yeah, to be lighthearted. To sing a song when they're doing safety announcements or whatever it is. To make the flying experience a little less dreary.

I notice a little less of that lately. I don't know if it's waning or if it's just my. I do about 50 flights a year on Southwest and that's plenty enough. Oh my goodness. Well, speaking of other things, news here about the best investment of the decade is bitcoin. I had a little bit in bitcoin for a couple of years there and it's all out now and some of the other cryptocurrencies. And I just, I'm like, it's too volatile. I don't want to pay attention that much to these things. But a dollar invested in 2010 would be worth 90,000 today.

Yes. Needless to say, unfortunately, I was not on the leading edge of that wave of investment. I did purchase some bitcoin, ironically, when bitcoin was sort of at the height of its hype, I think maybe in 2017, 2018, I decided to buy bitcoin as a holiday gift for my father in law, for my brother in law and for my nephew. And so at the time, I think bitcoin was trading, you know, somewhere at $18,000 a coin or something like that. And so I did buy, you know, like.076 of a coin for each of them for the holidays. And of course, it's now dropped. You know, I think. I don't know what it is currently maybe 7 or $8,000 of Bitcoin, but it was not my best investment.

Well, they contrast some of the other things in there. A dollar of gold is now worth $1.34. Every time somebody gets cynical and pessimistic about the world and the state of the universe, they'll start to buy into gold. And conspiracy theorists love to buy into gold, but that is not a particularly good place to grow your money. Crude oil was the worst overall. Dollar of oil is now $0.74 back in the day, which also goes to some of these. You can get very enamored of a particular perspective or point of view that might not follow that sluggish demand and more supply is what. And that goes against a lot of what was forecast and talked about. It's interesting how some of these things defy when you take the long view. Right. It's a little different than you think.

Yes.

What was the.

It was nice to.

One of.

One of the things that I noticed was that the United States was the best stock market in the world.

So that's nice to see once again. A. I mean, like we. It. Because it's where there's less. It's stable. Right. Like it's a place of. And it's a place of growth and opportunity. People go out of their way to move here because they want to build something and create something and they want that place where there's more room to create, more freedom to do that than other kinds of things.

Yeah. It's nice to see that the gain in the 2010s in the stock market was 250%. That's not a bad return. So a dollar invested at the beginning of the year, at the beginning of the decade grew 250%.

Park it. Chill out. Play the long game.

That's right. Turtle always wins the race. Right?

Yeah. Well, and speaking of long game, one of our speakers, both for the coach meetings as well as at our scaling up summit and around is Jeff Hoffman. And Jeff talks about leaving a legacy. And who are these people? I think people has been for at least a few years running. One of the hardest things that we're dealing with, especially in a constrained labor market And Jeff talks about a lot about taking care of people, connecting to people. The same is true of the stories from John Ratliff, Right. Who runs our coaching organization about connecting with, leaving a legacy like that, connecting with folks knowing what they care about. Do you have practices around that at the company?

Well, not yet. We're a startup, so, you know, we're still deep in the weeds of just trying to get our business going. But certainly, you know, that's part of the culture. Again, you want to work with people. It's often been said that your work family is just as important as your family family many times. And many people will spend more time with their work family than they do with their actual family, unfortunately. But you want to surround yourself with people that you want to spend time with and you want to, you want, you want to see them grow and you want to see them thrive in that work environment, and you want to see them succeed because their success will ultimately lead to the success of the business as well. So, you know, that's. You want to work as a team, you want to help each other out, and that's all you can ask for in a work environment.

Well, it's funny. So one of the ways that John was successful in growing his call center business, back when he was starting and going from one to 24 call centers up through 650 employees, they were looking at what actually drives profitability and retention and that kind of thing. And what they discovered is that it wasn't the traditional industry metric. So the traditional industry metric was around call quality and quality of service and employee or customer satisfaction. But in theirs, they noticed that customer retention was a function and more closely correlated to employee satisfaction. So we retained customers at the call centers that where the people were the happiest and we were losing or churning customers at the call centers. At the call center where the stuff where the people were the least happy and you don't have to figure out cause and effect. You could just try and raise happiness for employees and see what that does. Right.

You know, in our business, we have a quarterly priority right now that's focused on ENPs, on improving employee net promoter score. We want everyone to be a real promoter of the business and be happy and sort of fulfilled in the work that they're doing to help our business grow and scale itself. And so that might mean having more social gatherings or. For instance, what we did is we went out and we did a house build with a local nonprofit here in New Orleans that builds houses. You know, obviously Katrina has been A number of years, but still there are always rebuilding neighborhoods here in New Orleans. So we went out and did a group exercise where we all volunteered and helped build a house together. And that just helps build that community within the organization that's going to drive up employee satisfaction. You know, the people that your customers are dealing with are your employees. So the happier your employees are, more likely the happier your customers are going.

To be as well. Well, we have a client just this week starting a new call center business overseas. And they're focused on a living wage, respect for people. They're at the outset, they're building and creating the values and the rituals and traditions that define the culture. They're identifying the purpose of the business. All of those things that give meaning and clarity to the kind of work that people are doing and want to do and why they would work there versus anywhere else that they could work. Right, right.

Connection. I did have the pleasure of seeing Jeff speak once where he was talking about sort of part of this leaving a legacy, and he was retelling the story. And I think at one of his companies, what they would do is they would select an employee, I think annually, and they would ask that employee sort of what's at the top of your bucket list? What's the one thing that you, if you could go do it tomorrow, you would go do it. No expenses, you know, restraining you and that they would do that for that employee that was, you know, they would. They would identify one employee that got this reward. And it wasn't necessarily employee performance based. It was just, you know, sort of, maybe even luck of the draw. And they would help that employee sort of fulfill a life's dream as a way to sort of leave a legacy within their organization.

Yeah, John had a similar program at Appletree. And they would pick an employee and they would do something there that people would apply and write and nominate people to be taken care of in that way. Dream on. It was like a make a wish kind of thing for employees. And they would do these extraordinary things. But it really helps to know what people care about, what matters to them, like be connected. I think when you see Jeff Hoffman speak too, you're struck by the passion there and not just like the excitement, the unbridled enthusiasm or loudness of say, a Steve Ballmer in his heyday. But like, I mean, he does have some of that, but also the depth and the caring and the connection. You see him deeply moved by something. And I think a lot of times we can be really cold in our business and not Let the feelings out. You know, I remember a mentor once telling me, oh, make sure you don't like. Oh, don't go there. Don't make people cry. I'll make them cry. I'll make them laugh, I'll make them yearn. Like, I'd rather have people. The whole range of emotion out there, whether it be our sessions or in an audience or like that. Right?

Yeah. And I think, listen, it doesn't take something as big of an act as fulfilling someone's number one bucket list to necessarily leave a legacy. It's the small things, it's the small actions. It's someone's birthday that you work with. You bring in donuts or something. Just showing that you care that you're thinking about people. That can leave a legacy and a lasting impression upon your co workers just the same.

Yeah. I had a woman some years ago who was just extraordinary in her job, just really, really great, worked really, really hard. And she had a personal circumstance that was kind of in the way they had one car in the family and they had young kids. And she was trying to balance being a mom and a parent and all that kind of thing. And I'm like, well, why don't you just get another car or whatever. And that didn't seem like a wise thing. But she had a motorcycle that she really, really loved, and it was a whole motorcycle. It just had stopped working. Right. And so now they were just dealing with the one car. And eventually she was gonna get around to fixing that thing, and that's what she really wanted. But it didn't seem from the outside getting around to that was going to happen anytime sooner. So I. I found a motorcycle shop that worked on old bikes, and I arranged for them and with. And her husband and I arranged for them to pick it up, take it away, and fix it to her and bring it back.

That's awesome.

And they, like fixed it, restored it. It didn't cost me that much. It wasn't like a, you know, this isn't like a huge classic car restoration. It was a. It was a fix and mild spruce up. It was a minor thing. It was more about taking the initiative to just get it done, pick it up, you know, tow it away, fix it, bring it back. And she was so deeply moved. I went and told my forum group and they were like, oh, my God, you're Oprah. Now.

You get a motorcycle and you get a motorcycle and you get a motorcycle, everybody gets a soul, right?

I got, I got the extra effort there because of that move, right? Because I did that thing that, that, that showed I cared, that I knew something about her, that I was listening. Right, that's the. And of course make sure you don't piss people off. Right. We can drive people away more than. Well, anyway, look, if you want to, for our listeners, if you want to see the Jeff Hoffman video Leaving a legacy, you can see it on our Scaling Up Club. So Scaling Up Club is part of the Growth Institute. The Growth Institute is our online learning platform. We were going to have Daniel Marcos here but due to travel and things today, he couldn't join us. But Growth Institute is our online education. We've got a huge video library there. You can get all the basic things in there and we'll give you a 14 day free trial. Put a link in the show notes for that. So just find the link in the show notes, go to Growth Institute, get that 14 day free trial and watch the Jeff Hoffman video. That'll really be worth your time in creating a rich, powerful and it'll light you up and like have you love your, the people, not only your employees but your customers and everyone. It'll, it'll connect you with that and see that in the context of a business leader like how there's an opportunity to really connect and feel great about people. Growth Institute also has some extended things. So they've got a master in Business Dynamics, an online course that's like an MBA except for actually for growing and running a business, not just the more finance side stuff that you would get there. So. And they've got master courses in the Scaling up world like all the core of our stuff plus things like the Exponential organization with my old friend Salimus male. They've got top grading and who stuff on people. So there's quite a bit there for that.

And it's a great video to watch because Jeff is a very engaging presenter and the other thing that I took away from it is my gosh, he's achieved a lot.

Oh yeah, yeah. Right. So Jeff for our listeners did Priceline. He also created video kiosks, he did concerts. I mean he's done.

Yeah, he was the former manager of. Oh now I'm probably going to get it wrong. It's either the Backstreet Boys or NSync or some boy band and I can't remember. And you know the spectrum of things that he has been involved in is.

Really quite broad which is kind of funny because he's a kind of funny looking, balding, slightly heavyset, middle aged white guy and managing rock bands.

Right.

Because that's cool.

That's going to be my next thing. That's what I'm going to go do. And he just goes out and does it.

Yeah, it's really so, look, it's hard running a business. And next up in our News of the Month News of the Week is a story of David Dodge, CEO of Kodakid EO Arizona member. He opens up in an Ed Surge article that we'll put a link to about struggles suffered, lessons learned in pivoting the business. And in his case, there was an issue of having too much money. Right. He got access to some debt which got him in trouble. He stopped making good decisions based on that. And I definitely have some client experience and even some personal things of where a little money removed some of the discipline of doing smart kinds of things. Right. So I thought that was an interesting story there. They got an SBA loan and then they started doing sort of foolhardy things, finding ways to use and spend the money, many of which didn't work out.

Right. One of the things that really sort of struck me from the article is just the candidness with which he sort of retells all of the good and the bad. The ugly of being an entrepreneur, and you're absolutely right, is that sometimes when you have a little money in your pocket, you tend to spend it on things that aren't necessarily true to your core values, necessarily true to your brand promise and what you're really trying to focus on. You sort of start exploring other avenues. You sort of see the new shiny object and say, well, maybe that's what's going to get my business to profitability. Or rather than really being disciplined and saying, we're on track, this is what we do. Well, this is what we're going to do. Even better, now that we have these additional capital resources, let's go out and absolutely master that rather than finding new things. But ultimately, being an entrepreneur is very much a roller coaster ride. He retells a story of having a lot of sleepless nights where he's weeks away from an inevitable doom. I think in his business where something just sort of comes up and something pops up and that, that gives him new light and new life and, you know, there's going to be experiences like that.

Yeah, yeah. Well, I think about, like back before I ran the jewelry company with my wife and I had two software businesses and one was like a development shop. We did project based custom development work and creative services in the early days of the Internet or the web in particular, not so Much the Internet, which predate that quite a bit. And then we started a SaaS business in the late 90s and we were starting to get some traction. Somebody asked me, well, what if you, instead of raising half a million to get started, you'd raised 5 million, what would you have done differently? I'm like, well, I would have made the same mistakes in a much grander fashion with better chairs, better office toys, better snacks. Yeah. It's funny, one of our SaaS clients a couple of years ago came in with a raft of investment. They raised some money and they brought in some new leadership and they got enamored of some things that made sense on the surface. We're going to market in this way and we're going to create this inbound funnel pipeline of leads and things like that. And this should really be done content driven. And so they did this stuff in a very grand like, we've got money, we're going to, we're going to go all in. But they didn't, they forgot that like bullets before bombshells. Caveat. So they invest in things that made sense but didn't work. And an awful lot of money was blown very quickly on things that, that might have worked with a little more tweaking and iteration before the big investment. Right. They need to experiment a little bit and test things before we throw all the money at them. Yep. I can't tell you how much I've spent on marketing things the last couple of years that none of which have panned out. And I was just really glad. I'm glad we only spent a tiny amount of money on that. Not many thousands of dollars. Yeah.

And you know, sometimes when you're, when things aren't going well in the business or you start to realize that there is something is broken about your business model or, you know, it does take some real courage to sort of mess things up, to break some things within your own organization in order to be able to come out at the end on a much better path towards profitability and success. And certainly we've experienced that. You know, you start a business and you think you're going to go one way way and you start going down that road. And not that there are failures, but you start to realize that the way that you're doing it isn't going to, isn't a sustainable way to get you to where you ultimately want to get. And you have to break a few things in the process, change things up and really be able to shift and pivot. And I think what he notes is that companies that bootstrap are typically better able to do that than the ones that have funding because then they're answering to a larger set of investors who tend to sort of look down and say, why are you doing that? Why are you going in that direction? We invested in you because we thought you were going to go do this. Whereas the companies who are bootstrapping it themselves can say, I now realize that's not the right path and pivot very quickly and go in a different direction.

I think it's that notion of checking, like frugality, being mindful of where you spend the money, not just freely throwing stuff around. And I work with an awful lot of funded companies. Most of them are doing it, but. And there are some that are fairly careful. And then sometimes we come across some that are a little foolhardy.

My wife has accused me personally of being cheap.

Yeah.

And what I like to say is, I'm not cheap. I am selectively extravagant.

Well, you know, there are some, like, I. It's funny, I'm. I try to be like that too. And we all learn these things well before we get into business. Right. Your notions about money are family derived. You learn them growing up, good and bad. And in between. A great book to read, just to connect to and change your thoughts about money is the Soul of Money by Lynne Twist, our dear friend and friend of the world of scaling up and personal friend here in the Bay Area. And Lyn's book is about reconnecting with and and letting go of some of the weird notions you have about money and how money can be a really useful thing that is not lacking in soul, depending on how you use it and whether you let it poison you or empower you. Right.

I have heard that, and I can't do this myself, but I've heard that the most successful gamblers, as an example, people who are constantly throwing money at a poker table, they in their mind are able to separate the value of the chips that they're actually wagering and just the more common principle of money as we know it. And that's not something that I can do. But they say that the most successful people and risk takers and gamblers, poker players, etc. They can psychologically separate what the plastic chips that they're actually putting in and wagering versus the concept of money and what that could mean to anyone in particular.

Well, it's hard to be rational about these things. Right. Objective, because it does represent. So my grandfather, there are two people, maybe three, that gave me the big Lessons around money. I suppose there's a lot, but the most visible and obvious ones. My grandfather on my dad's side was painfully frugal. He had grown up going through the depression. Some of the kids had to live in a tent in the backyard while the extended family moved into the spare bedrooms in the house. Now you could be moved by that and think that was awesome and the way families pull together and that kind of thing. That's not the lesson my grandfather took. He took like, don't be a chump, hold onto your money, don't ever need help from anyone else and don't be an imposition. Right. So he was painfully frugal and he was determined to die a millionaire even though he never had a high paying job in his life, like it very like middle class kind of thing. So dying a millionaire was really important to him just for that independence mindset. And he did in fact die a millionaire. But along the way he denied himself all kinds of things that he really desperately wanted. And he had that money at the end. So you know what like the family, you know, got as it got distributed. It wasn't a whole lot of money around but you know, we all got a little check out from his, from his folks in the will. My dad on the other hand was like, I don't want to be like my dad. I'm not going to think about money at all. I'm just going to let it flow through me, I'm going to spend it. And it came and went and came and went. And then he got later in life and like, and suddenly he didn't have any. And then he was a little freaked out as a result. And I'm like, okay, I don't want to be like either of those guys. Somehow find him in somewhere in between. Be smart, frugal, but not foolhardy. How do I do that? And I find a lot of times I'm like, oh yeah, I'm operating under a notion of money that like needs reexamining. And more thought than these casual childhood lessons. Yep. But again and again, like I have a new CEO of a recent client who's got some like what drives him and why he's created his company is from a lesson of observing his dad as an entrepreneur and mismanaging the finance side of things. Right. We've all got. It's a good question, I think, to go back and think about, but then fundamentally, right. Get your attention on the. Know your numbers, get the key numbers in front of you, which I suppose is a Good plug for scaling up scoreboard, Neil.

That was masterful.

We'll put a link to the thing, to the software in there. But like, you want to keep those numbers front and center all the time. And there may be numbers that you don't want to share with the team. You want to definitely think about which numbers you share, don't share, and what difference they make. But the more you can engage people in making smart decisions about the business and knowing where you stand, Right. What are the critical numbers? You want a scoreboard for that.

You want everyone to be able to see that information. Our CEO likes to retell the story where he was out to lunch with the head of a fairly large insurance company locally here in New Orleans, and he was having this sort of conversation about transparency in the business and having every employee know where the business is trying to get what's the goals. And he said, shouldn't your frontline employee know what the revenue target is for the business either this quarter or at the end of the year? This particular CEO really struggled with trying to understand why a frontline employee would need to know what the revenue goal of the company was. And you know, the argument is we're not telling them that you need to share with them how much you bring home or what your pay stub says, but you've hired this person to perform some service that's going to help the company try to reach that revenue goal or revenue target. So doesn't it make sense that they should know where they, as part of the team, are working towards how their individual contribution is helping the company reach that revenue target or objective? And the scoreboard gives them visualization, display of how well the company is doing. It gives everybody sort of a morale boost when they see that they're hitting targets and everyone's working well together towards a common end result. Yeah.

So it's not. And it's not just the financial numbers. Right. You might want to have that promoter score up there. You might want to have defects, safety events. You might want to have any number of other metrics that you're commonly tracking that you know where you stand and you want to look at the ones that change. So, like, I know that our net promoter score changes very, very little. So there's a couple places that we look for to pay a lot of attention to it, but it isn't a big primary metric. It's there, but we look for it immediately after. We look in particular at the detractors. But the actual overall number changes very little. New client, old client, like Whatever that when we lead a session or I do a talk or that kind of thing, it's kind of all the same. So what do we look at? Right? Or those kinds of things. We look at how many days we're actually working. We look at recurring revenue versus total revenue. That's a really interesting thing that tells us how predictable our world is going to be. Right.

And the beauty is you could have different. Let's say you have a business that has multiple locations and each location could have different sets of critical numbers that they're tracking or even different departments within your organization. The sales team is going to have very different sets of critical numbers that they are tracking than marketing. Marketing is looking at number of visitors to your website or the number of leads that are being generated through white papers or content or blog posts or whatever it might be. Whereas the sales team is just looking at arrow or existing client renewal or a churn rate or something like that. That's very different. And operations may have a completely different set of critical numbers. And all of those can be measured and tracked sort of within our application.

Which is really great because you can set it up and configure different things. And I think it's right. We want attention. So you've got your financial statements. They mean very little to most people. All those numbers don't need to be out there. There are certain ratios that some people want to know and other people don't. But highlighting a few is what a scoreboard is all about. Right. There's all kinds of different metrics that are being produced, but which ones we put attention on is where we have a chance to move it. And you point to a couple things there. One of them is the outcome based thing like what's our ARR or MRR in the business. But then in front of that might be proposals or pipeline value or customer visits or something like that. In the sales department, you know, your operating team might want to look at budget performance, how they're doing, or labor efficiency ratio or things like that that are predictive of where they're going to end up. Right.

I think also making that information visible to all of your employees also educates them. You may have someone in the operations department that doesn't necessarily know much about how the sales in the business works, but they probably have a curiosity and it gives them an opportunity to lear. What is ARR? What is churn? Why are we concerned about churn? I think having a more informed workforce that understands not only their part in the business, but the other working Parts of the business and how they interact can only add value to the organization.

Yeah, agree wholeheartedly. Now, here's another thing about the Scaling Up Scoreboard. So the Scaling Up Scoreboard has your one page strategic plan. It has your vision summary. It has a lot of the other tools built. Got your quarterly priorities in there. It's got huddle note taking and the structure for the daily and the weekly huddles, your daily priorities, things like that are all in Scaling Up Scoreboard. But then it has the metrics and the displays that are there. But here's the thing that I think is really cool because I've had some clients who go in and go like, oh, we have all this look at this cool business information scoreboard that we invest in that integrates with all of our financials and displays some stuff, and it become digital wallpaper. And they might even have it on displays around the office, but nobody's interacting with it. And they're beautiful, some of them, but they're not touching them or interacting with them. And in some cases, a system like Scaling Up Scoreboard, where I am interacting with it on a regular basis, or even a whiteboard, right, for that matter, which is only in one place versus like everywhere on a distributed team, invisible when I'm on the road and so on, is more valuable because I have to go in and update the numbers and update my priorities. It's not all automated and that forces me to interact with it. So I'm curious about people automating too much of these things.

This is a regular debate in our organization because we understand the value of, or at least the benefit of a manual input in the system. Because when you assign a critical number to an employee, he or she is responsible for updating that number on a daily or weekly basis. And they might have to go to some disparate piece of Software, to the CRM or some other QuickBooks financial software and go get that number. But by doing that, that physical process of going and retrieving information and updating it on the dashboard, they have to put some critical thought and analysis into why that number is what it is. Are we trending higher? Are we trending lower? Is it stagnant? If so, why? What can we do to try to get it moving in the right direction? But at the same time, we always have customers who say, do you integrate with our other pieces of software where we could just automatically pull this data from our CRM and from our QuickBooks? And it's a struggle for us because we do see value in like you said, interacting with the data and making sure that first, the data is correct and second, understanding what the data point actually means putting some real valuable critical analytical thought behind it rather than, I think what happens, human nature is that when things are automatically populated, we tend to be more lazy about the critical thought into why that number is what it is, or even making sure that the number is correct. Because just because that may be the number that came from some other piece of software doesn't mean that that number actually is correct in that other piece of software. So garbage in is garbage out. And so that is a struggle that we are constantly dealing with. And right now, certainly for us, we want to develop those integrations and that's something we're working on in 2020. That's our key priority for 2020 is to integrate with other software. But we do see the huge value in that interaction with the critical numbers themselves and priorities and KPIs.

Well, you know, a couple things come to mind in that world and one of them is like in QuickBooks and in some other applications there's an import routine. Like I can import transactions from a bank or from other sources, but then I have to review, approve them and like fully bring them in, right? So they come in part way and there's maybe some value there in having people interact with them. You know, I get in the car all the time and I just start driving, right? But I'm a pilot, I wouldn't get in an airplane and just start flying. So there are places where we're complacent, right? And then, you know, and our cars then are designed to ding, ding, ding and ring, ring, ring as we start to show lights and things like that as we start to run out of gas. And they do a fairly good job today. Although I have discovered in some recent years that even that is not enough sometimes. I was so engrossed in a conversation one day with my son on a multi hour drive that we ran out of gas. Unfortunately we did a going up a hill at like 11 at night in the, in the snowy mountains and I'm like, oh crap, this is a bad place in time to be out of gas. We got rescued pretty quickly but, but it was a painful lesson. On the other hand, I would never fly without like a serious use of a checklist and both at the beginning and in the middle and multiple steps of the flight, like projecting and reviewing that kind of thing, way more active. And I. And although that updating of the gas gauge there is automated, I'm Forced by some routine and habit to check it a little more frequently. And if for some reason we, like, had a leak, I would catch that where, you know, driving my car around. I'm a moron.

No, that's absolutely right. I mean, I think like you said, we do tend to get a little lazy, and we just put faith and trust in other pieces of software and other sort of indicators rather than going out and sort of understanding it ourselves.

One great client story. I've actually had a few versions of this, but one that comes to mind is more recent. A manufacturing client, light manufacturing. And they moved into a new production facility. And this is a company with all kinds of software around quality and production and erp, mrp. Everything's integrated. There's displays, there's qc, qa. There's all kinds of departments checking things and all that. But after they moved into this new production facility with all the newness around them and it was fancy and modern, production dropped. And, you know, at least a significant portion of it could be attributed to just new systems and, you know, like, shakedown or whatever. Like the. I don't know if that's the right term, but that, like, turning up thing. How do we fix it in the meeting? Is that uncovered in our quarterly thing? I said, okay, we need to go back to some basics with you guys. Somebody get. Go on Amazon now. Order eight whiteboards for each department. So they went and they ordered eight whiteboards. Then I had my assistant put an appointment for me to check with them on like. Like the Wednesday or Thursday of the following week that those whiteboards were installed and up on the wall and send a picture because I was gonna, like, watch this one really, really closely. A lot of accountability oversight here. And in fact, they weren't all. And I had to get somebody to get over there and get a drill and stick them up in the wall, right? Most of them were done, but not all of them. And then we spent the next, like, 40 minutes figuring out what are the key metrics that we need to pay attention to in your department, Your department, your department. And they came up with. Came up with. Then I had them talk with each other in pairs and then with their boss and back and forth. And we did a couple rounds of tweaking their numbers so that each group had about. They had, like, four to eight numbers each, and then they had 10 or 12 for the whole company. And so now we had touch these things. And then each shift that came on, and this was. I forget if they were running two or three shifts at A time that would come in and work on stuff just like the age old story. What's the steel company? Oh, well, anyway, but they just wrote down their numbers and then they started to bring them up and when the next shift came on and they tried to beat the last shift and they tried to make up for the prior day and the week to date and anytime they had a breakdown, they were pulling back instead of having breakdowns and falling further and further behind by having the visibility of the numbers and writing them on a board, they can do that. Now if you want to upgrade that a little bit, that's what Scaling Up Scoreboard's all about. Yep.

It just keeps, it, keeps it really top of mind. I mean, you know, it's, it's a software. We started the conversation talking about discipline and rigor and you know, again, it's, it's, it's, it's being disciplined in updating these numbers on a regular basis, whether they're critical numbers or individual KPIs for priorities that you as an individual employee are being held accountable for. When you, you update that information, it gives, when you update that data point, it gives information to the entire organization of how well are we actually moving and progressing towards achieving the goals that we have set for ourselves?

That's really great. So Scaling Up Scoreboard, you can go to scalingup.com software or the scaling Up Scoreboard. We'll put the direct link right in the show notes here so you can go and get started. Start playing with that thing and seeing what a difference it would make to get your company or plan right in there and start interacting with that on a regular basis.

Yep.

So moving on, this is a really great one, great article here. Business Insider. Todd McKinnon, founder of Okta Okta grew that business to 14 billion and they used a couple of tools that we use, which is I think what's really cool about this. As I read the article, the first thing that stood out to me is they're spotting trends and we have teams at least annually look at our SWR sweat T is for trends instead of swot strengths, weaknesses, trends. And this is one that companies don't do enough of. Identify the big trends not just in your industry, but like globally, in every sector, every way of looking at our world and society and people and like that kind of thing. And you'll spot things that you can leverage or play off of, defend when you start to look more broadly at trends. And what Todd saw was like cloud based computing. Right. The notion that people are going to have lots of these cloud services. And if you're a company, big or small, how are you going to, especially if they're a big one, how are you going to manage that? How do I provision if the scoreboard is one of many things that I have out there, how do I give access to and manage that over time? And that's what Okta does. And that was the first thing and it was a brilliant business. And others are starting to get into and play in that space now as well. But really well done in that. Do you guys do the trends much?

So we. Yes, we certainly. I was going to actually pose a question to you as a scaling up coach. How often should a company look at their sweat?

I say two occasions and I've heard people add a three. I think quarterly is too often for sweat, though. I look at it annually, at least in the case of a significant change in the economy. So the economy flips, right? We find ourselves suddenly in a crisis of some kind, like 089-2001-2002, those kinds of times then or regionally you may have something going on, then it's another time to examine it. The first thing is to get yourself out of survival mode if you're seriously impacted, like get yourself some breathing room. So that might involve cutting costs or that kind of thing. But then we want to look at the sweat tool and say what's happening here? If we get outside of our own little world, what's going on here? And then we look at ourselves relative to that and we may see some significant opportunities.

Right? And so based on that analysis or that review, at least on an annual basis, to identify those trends, does that then drive the establishment of quarterly priorities to take advantage or to take action in response to those trends?

It drives the annual and the three year time horizon which then in turn.

You break down quarterly.

But it doesn't. It rarely goes to quarterly. And I can think of some exceptions. I mean, but could they. So we used it in my last business and it was a business that was very impacted by recessionary moves, that kind of thing. So we had a self indulgence kind of luxury item product that was purchased by women for themselves in that environment. And when the economy shifted in 0809, we were seriously impacted. And what we saw in doing that tool is that there were a number of things that were impacted like we were, but there were other things that were going on like people were buying things for others just less for themselves. So that was one of the trends that we saw. So gifting was still important, but the gifts were becoming. It was more important to give meaningful gifts. And certain price points were more active than others had been. So the prices, the price points that were moving had come down giving to other people and giving meaning. So we fast tracked some product development. It was not so much a three month quarterly time horizon, but like a one year and six month. But within a year we had number one product where we had been cut in half our business initially.

Right. So you just identified the opportunity and went after it.

Right. So giving to loved ones, not frivolous, not blingy things of more meaning and lasting value. That perception was really important. And where maybe 198 had been a popular retail price point, now it was like 68. So we designed to that price point, Right? Yep, really popular. Another company that we worked with, I was an advisor to in those days was looking at the world and they saw movements in real estate and they saw, wow, people are losing their homes. What could we do? How could we help that world? What are our strengths that we could do? And they did some things that made them quite a few million dollars in a very short period of time. And they knew that this was not a long term thing that was happening. This was something that was going on for a little while. But then that ultimately led as they continued to use this annually into a whole new business. So now there's a large and substantial business that grew out of that that started initially with the flip like people were losing their homes. They're like, what are we going to do about that? Right.

Yep.

So at least annually when an economy turns and then sometimes mid year, like okay, we're feeling a little bit lost. Let's do maybe a little bit like a super quarterly at the six month point. You know, great.

We certainly, we try to, we do or reevaluate our swot.

Yeah.

On an annual basis and we sort of do a hybrid of a SWOT and a sweat. We do both threats because we still want to consider what those threats are out, out there as well as looking at trends. So it's almost like a swat with two T's.

Oh yeah. When I use your tool with our teams, we will do, we'll use it as a sweat thing and it more memorializes what we've created. We capture and record it there. But we do most of the work on a wall and we take the sweat tool that we have and we turn it on its side basically on the wall and we do a broad trends brainstorming usually on the left Side or. Well, it could be either side really. And then we put the strengths and the weaknesses and we distill those down to really figure out which are the core ones on one of the other sides. And here's what we don't have in your software is we start to then intuit and infer connections. So the trends could be good or bad. Doesn't really matter. Like, people aren't spending on themselves. That's a threat type trend. But they're just all these trends there. And then we start to draw lines like, oh, I think this one's. I feel I see a connection between the two. So we draw a line and then we name them. And that then leads to the insight like, oh, here's a gifting. We should create giftable items. Right? Right. We should create meaningful items. We start to then pull those ideas together and we create our key moves. Okay, but that goes into like the annual usually. And then, you know, certain steps go in the corner. Oh, my goodness. You know, the other thing that Todd called out in the article, the Octo founder was getting his family on board. And I think this is a big one this time of year. And I find, look, if you didn't do an annual plan or whatever, New Year's resolutions, that kind of thing, it's not too late. It's definitely time to think about bringing the same strategic planning discipline to the personal side as well. The one page personal plan. And I think as a coach, I don't do this enough with teams because they always feel busy, but I feel like I should do it more. But the one page personal plan is that key. Like, how do you get your family on board and aligned with what you're going to go through in running the business or growing the business. Right.

It's not even just about what you're going to do in terms of growing the business. It's just about personally, where do you see yourself 90 days from now? Where do you see yourself a year from now? Where do you see yourself 10 or 20 years from now? And I think Vern calls it the five Fs. It's faith, fitness, finance, family and friends. And so in those five areas, where do you want to improve? Where are things that you want to stop doing? Certain things like, you know, spending too much money on frivolous expenditures and you want to have more experiences with your children rather than buying them video games or, you know, really, again, it's the same principle that if you jot down a goal, you are much more likely to work towards it. And if you set a target for yourself of, let's say, you know, in the next five years, I want to have X amount saved up or I want to take one trip per year with each of my children to some, you know, exotic location, you know, really sort of setting targets for yourself personally outside of your professional space and just holding yourself accountable to those goals and targets that you establish and working towards them. Again, fitness is another one. We all say we want to lose 10 pounds or we want to go work out more often. But once you write it down and you come back 90 days later and say, did I really go to the gym three times a week? And if I didn't, why not? Why didn't I make time for one of those personal goals that I established for myself?

It's really great. You know, I find that this practice, not everybody thinks they should do it in a company because it feels very personal. I just say, of course you should do it in a company and at the leadership team and you probably should encourage it throughout. You just might want to give people the room to share or not share aspects of the team, like what's on there, not on there because some people will be uncomfortable. But the more you can build the trust and elevate makes a difference. The second thing is it's really hard to figure out what you should start or stop doing moment by moment, or even what you might want to accomplish this year if you don't know where you're going in the long run. So I usually say, in spite of how that feels, pick a 10 year time horizon. Right. In 10 years, I'll be 65 years old. My kids will be 30 and 32 already. That's a picture of something. I'm like, okay, what do I want my life to look like in all of those F areas? Right. What are our family routines at that point when they're that age? What do I want my fitness to look like? And I can paint a picture of that fairly free of some constraint. And then I can start to back into, well, if that's what I want 10 years out, it's a lot easier to imagine what I need to focus on this year. So what am I going to get done this year? And sometimes things move way forward. Like when I imagine that 10 year future, I'm like, oh, I really need to write a book or two of things that matter to me. But solving my problems of today, that book doesn't need to get done. Right?

Right.

So there are key moves like that that I think are really Important. When I look at those long term things, some of the, of the personal and fitness and relationship stuff matter a lot more than in the here and now where I'm just dealing with day to day stuff. And then you can pick like the year and then the little changes in your habits in the next 90 days.

I mean, what you've described is completely similar to a company establishing a bhag. It's exactly the same as establishing a BHAG and saying this is where we see ourselves as an organization 10 years from now and paint that picture of where do we want to be and then start working backwards. It's the same thing. And you're right, it's very. I'm not good at it. I'm not the best at setting personal goals on fitness and faith. You know, I sort of, I personally tend to live in the moment and day by day and I could be better at it and probably by creating a one page personal plan that would be certainly a good first step in the right direction. And certainly we have seen people, you know, I talked earlier about how people view their family, their work family. We've seen people use the scoreboard to enter personal priorities that are visible to everyone else. Because you are then your work family is holding you accountable to the personal targets that you set for yourself. We've seen people put things like, I want to lose five pounds this quarter. And so people will come up to you in the, in the, in the break room and be like, how are you doing? How's it going? Have you been to the gym? I, you know, I'm just trying there. You know, there's that sense of accountability that is built in when other people can see what your goals are.

Yeah.

And how well you're progressing towards them.

Yeah, yeah. Going.

Because if you just create a personal plan that no one else sees, it's hard for yourself to, you know, there's lots of excuses that you can make for yourself and not hold yourself accountable. A lot of us don't have that self discipline to do that.

We're super. Self discipline. You might be really, really rigorous or whatever. In some ways I am. In some ways I'm not. And in the areas that I'm not, it's really, really hard to do it. But one of the things that does make a difference is to be really public about it. Right, Correct. That elevates the accountability. I created a game once for a particular goal, but the, the rewards and penalties were secret and personal and they were really compelling. But I kept them secret. So as I started to fall off the game. The impact or the public accountability was really, really weak. And ultimately that game delayed substantially. It's not dead, but. But it was impacted definitely by the fact that the rewards and penalties were too secret and personal. Like I couldn't, I wasn't comfortable sharing them. Right. That's right. Which is funny because I'm a fairly public, open kind of person. But we all have our areas.

Well, listen, and also the only other thing is I think it's also good to think about those five Fs. We probably don't spend enough time sort of evaluating our life in terms of those 5F factors. Like where do we see ourselves with faith? Is that an area that we want to improve? Or do we have good relationships with friends? Or do we, you know, do we want to nurture and grow some friendships that maybe have sort of been a victim to how much time we're spending at work? You know, there's always things to think about and ways to improve. Certainly family and finance is always something that everyone is thinking about but really trying to document. What are the actions? Am I going to save another 10% this year or what specific tasks am I going to commit to undertaking to really grow in these areas as an individual?

Personally, yeah, it makes a big difference. Well, one of the things that might be on your list of things that you want to do. So if you're a listener now, regular or new listener to the show, you might be thinking like, how do I go a little deeper in the world of scaling up? One of the great ways to begin to get a taste of this applied more, spend an afternoon or a morning or a day with one of our coaches in one of our scaling up business growth workshops. We've got workshops really all over the world coming up. The next one, we just led one here in San Francisco. June will be the next one that I'm leading. We also do them within organizations. If you'd like to have a scaling up workshop for your ypo, Vistage, eo, et cetera, acetec, like whatever your organization is, we'll bring one to you. Reach out to us here on the show. Infoscalingcoach.com is the email. Happy to bring one to you, but we've got all kinds of public ones. You could go register for just a few hundred bucks a person. You could. It's even cheaper if you bring a significant some a few of your team together, you can come spend some time and begin to get an experience of working with a coach and applying the scaling up Work. Giving a little more feedback to that. Scaling up Business growth workshops. We've got a ton of them. Ann Arbor, Columbus, Mexico City, Phoenix, Nashville. San Francisco. Newcastle, Australia. Pensacola, Florida. Sydney, Australia. New Zealand, Auckland, Sydney, Henderson, Nevada. Brisbane. Like, we're all over, right? We're everywhere. Yeah, we're everywhere. We're doing them all the time. You'll find one. And I have quite a few people who fly into San Francisco because we're such a fun city to come visit. So come to one of ours here if you'd like to do something. But find one in a place either near you or that would be fun for you to go visit. And we'll put a link to that in the. In the show notes. A place to get started. I don't know, a couple other things maybe to talk about profit share versus market share is when we talk about. We talk about tracking your numbers. Well, I'd much rather have profit in cash than market share or revenue. Right?

Yes.

Revenue is vanity. Profit is sanity.

Cash is king.

Cash is a fact you can't pay. Profit is opinion. And there are lots of ways to throw your profit around a little bit. But although you'll pay taxes on it, you cannot pay your people with with it or your vendors with profit. You got to pay them with cash. But it's a lot closer to that. So interesting numbers out in the world of Apple. Apple's got 15% market share. They've got 32% of handset revenue, but 66% of the operating profits for the industry. Right, Right.

I was kind of shocked to learn that Apple only has 15% market share.

Oh, cause you think it's higher?

Yeah, I thought it would be higher, but I think.

I don't know the detail of this, but I think it's in the world of education and income and that kind of thing, it skews higher in certain categories around a lot of the folks that I travel with. They might be an all Windows world, but everybody's carrying an eye. IPhone, they're far more common. Some of the places I go, there's a lot of Android handsets, but for the most part, I see iPhones in people's.

But even still, with only 15% market share, to have 66% of the industry profits, that's a ridiculous ratio.

Right. But a great lesson. Look, are you really chasing market share and are you poo pooing a company like that for. For its market share or even revenue share? Or are you looking at the real win here, which is the profit and the cash that Company is pretty enviable too. But this is a trillion dollar company today that people like Michael Dell years ago said, oh, they should just give the investors their money back and close the company. I mean there's even naysayers today about some of these companies.

Sure.

That are winning.

I certainly hope that one day we can have those kind of numbers.

Yes, you should.

What's your bhag? Our BHAG is one billion priorities completed.

Oh, love that. One billion priorities completed.

Right. So it's not just priorities created, it's priorities completed.

So our BHAG companies or.

That's right. So our customers are actually achieving their priorities. So our BHAG is directly dependent upon the success of our customers. So if we're making a good software that's helping them be able to grow and scale, we will have success as well.

That's really cool. Empowering and enabling people to perform, being fundamental to that BHAG and the purpose of the company. Right.

Yep.

That's really great. Well, speaking of empowering folks, Kataka Roy, past speaker, really great speaker at our last of the prior summit, was named one of Time magazine's best inventions of 2019, their software. She's also a past guest of the show. Great speaker. Past guest. You can go listen to that episode. Kanika Roy, CEO of Pipeline. She has a software platform that lets employers identify biases in the workplace. So if you can look, if you've got a workplace with built in cultural structural biases, you're going to have trouble attracting and retaining the best people. And performance goes up. We've seen with that and their company software helps to find and fix those things. Really, really useful in creating, in creating an opportunity. Especially today we've become so tuned to and spotting those kinds of things. But structurally within companies it's not always the case. There's a need to find that, right?

Yes, absolutely. I'm actually just looking to see what some of the other inventions, the great inventions of 2019, what were they? I'm looking them up right now. Sorry, I didn't have a chance to look at the others.

Like. Oh, I stopped right there. Stopping workplace. Right.

Stopping workplace discrimination.

Yeah, yeah. Was that one. Yeah. Using text for more than simple messaging. Leave it at that.

Yes.

A personalized padlock. Stylish smart glasses. Oh, I don't know about that. It's a long way before those are going to come back.

A smarter walking cane. You know, there's all sorts of great things that are being developed.

Verifying fair trade I think is really interesting.

Yeah. Virtual Surgery. Oh, VR in the medical space. That's, it's going to be huge.

That's a great application for stuff.

It's going to be a huge thing.

And I've heard about that. Like you think about like working on a complex system of some kind, an airplane or something else, being able to overlay diagrams and manuals and things like that in VR, like while you're looking at stuff that could be really cool, right?

Yeah, it's just people are coming up with really great ideas all the time. It's really, it's, it's inspiring.

Well, we have no end of extraordinary speakers. Vern is fantastic at curating them for our summits. If you haven't been to one of our summits, you should go to Scaling Register there. I'll usually put links and stuff for our regular subscribers. I'll send reminders out. I may even give you a discount to it. The next one coming up is the Australian scaling up Summit, Feb.10. This will probably be, you'd be a last minute entry to that. If you can get to that. If you're in and around the Sydney area or going there, that would be a great one to go to. We'll have people like Naomi Simpson there, Glenn Richards and others speaking at the Scaling Up Summit. But we have these a few times a year all around the world. We always have one in North America. So go to our Scaling Up Summits. It's a chance to spend two days with the gurus, the thought leaders, the CEOs, the success stories in the world of Scaling up and to go deeper on that than you might be doing and firsthand with your coach or your online learning. Right, right.

I think the next and the one in May in Dallas, here in the North America. And I think that one also includes a half a day workshop with Vern. You know, having him, having him present sort of the scaling up methodology. You can, you know, get it straight from the man himself.

The first one that I'm going to miss in like six years or something is the May one. Just because I'm going to be overseas during that one. But I will get the October the next one or I' do one of the ones overseas, but the North America one in May. I'm now scheduled to be out of town for. Well look, we've talked for a long time, we've given our folks lots of things to think about this week. Reminder. So we'll put a link to Eugene's company, Align Technologies, the Scaling up scoreboard there, the whole back catalog of 190 plus episodes here of this world. You can get it on itunes, Stitcher, Spotify. Now, like wherever you get your podcasts, you can find these shows. But if you want like all the show notes and the links and things like that and a little more, go to scalingcoach.com and there you'll also in addition to that, I'll give you a copy of the books. If you haven't gotten a copy of the book or you just need another one, go to scalingcoach.com and pay the shipping and handling. Also send you the book for free. So there you go. Thanks Eugene for joining us this week. I want to also give thanks to Vern Harnish, creator of the Rockefeller Habits and the World of Scaling Up. This show is produced by Lucy Summers. Audio production is done at Podfly Productions. Our audio is edited by Albert Burge. The show notes are compiled by Ian Kodina and proofread by Tim McGowan. If you love this show, then please go onto itunes or wherever you get your show and give us a review. Tell us, you know, and then share it with somebody else. Pass the word along. That helps us to grow the show. That's the thing that you could do for us if it's helped you in some way. And then if there are parts of the show that you want to hear more of or less of or you've got something to say or chime in or ask or suggest, go to info scalingcoach.com send us an email info scalingcoach.com and we'd love to hear from you. Thanks again for listening everyone. Keep scaling up.