305: The Best of Scaling Up 2021

Are you thinking about how to grow your business with near and offshore staffing, but you're also wanting to make sure that it's reliable, cost effective and really well done? I think docsa talent is the way to go. Here's why. They don't just fill your jobs. They bring integrity, top talent, and a people first approach that's hard to find. I've known the people at Doxa talent for over 20 years now and I say that you can count on them. I have. Talk to docs of Talent and you won't be disappointed. Go to docsatant.com Bill G Again, that's doxatant.com Bill G One more time. Doxatalent.com Bill G. Check it out today. Hi everyone, my name is Bill Gallagher. I'm the Scaling coach, host of the Scaling Up Business podcast. I'm one of a small group of scaling coaches around the world who help people grow and scale and develop their businesses. We love to work with people who have huge ambition, who have 10x100x dreams, who want to dominate their industry, who want to be billion dollar companies and more. This show is all about that. We bring shows like this every week. You can find them wherever you get your podcast, video, et cetera, kind of content. Or go to scalingcoach.com where you can get in touch with us as well. Scalingcoach.com we're joined today by Neil Gordon. Interesting. Right now all our people want to know what are those ingredients? What are those ingredients? Okay, I'm thinking like we could probably just go through a little bit of a lab of. I could tell you a basic story that demonstrates what makes a story worth telling. Like a true story about our lives that we might use in business and our talks and all that. And also show you where that ingredient shows up as well. Sure. So when I was in fourth grade, I was in the Jungle Book with my fourth grade class based on the Disney cartoon. And I played King Louis the Orangutan. And I had this big song based on Kipling. Was that not Rudyard Kipling? Yeah, well, you know, it's Jungle Book in quotes because I'm pretty sure Rudyard Kipling didn't exactly think of these big swing time kind of ragtime kind of numbers and stuff like that. But that was my responsibility was the ragtime I want to be like you number. And I was a big ham as a four. I've always been a big ham, frankly. And I had this big dance around the stage kind of number where I kicked my legs all over the place. And the first time I wore my costume was also the first performance in front of half the school. And I had these big furry gorilla slippers on. And I'm kicking my legs all over the place, and my left slipper falls off my left foot and lands in the pit between the stage and the audience. And I'm on stage. I have the fourth grade equivalent of an oh, crap kind of moment. And I, honestly, Bill, don't know what made me do it, but I just reared my right foot back and hurled the right slipper off my foot and sailed halfway back across the auditorium. Everyone went berserk. And when kindergarteners and first graders wrote us letters about the thing on construction paper and all that, they were all, like, writing about how much they loved that the lion in quotes kicked off as slippers, even though I was an ape. They didn't know that, but they just. Everyone loved it. And so I decided to do that for every performance deliberately thereafter. And I realized that sometimes the greatest catastrophes are the greatest opportunities for success in that story. There's a lot to unpack. But what I particularly did deliberately was I told the story about a very particular moment in time. It was a scene. It wasn't just a big, sweeping narrative. And what I did, the reason why that story might stand out for somebody and they might remember it, is because of the slipper that fell off. It was a moment that I didn't see coming. It was a moment of the unexpected. The value of a story about our life is driven by how much we incorporate the unexpected. And why is that? Because the unexpected moment forced me to adapt. I kicked off the other slipper. I did something differently than I ever had before. And that adaptation is what leads to the lesson that the greatest catastrophes are sometimes the greatest opportunities for success. Okay, now, so the unexpected tell a specific scene. And then to circle back to that ingredient I was enigmatically alluding to. Right. It's that sentence. The greatest catastrophes are the greatest opportunities for success is the moral of the story. Yes, but you don't need a story to have that kind of sentence. It's what I call a silver bullet. It's a one sentence encapsulation of an idea. It's in all of these famous TED Talks, and it's the passages highlighted in the Kindle. It's this secret sauce like statement that gives people that kind of epiphanous moment. So when you're on stage, you tell a story. And again, I mean, I'm glossing over a lot of the more technical details of putting together a great talk or a presentation or a pitch to investors. But basically you set up an unexpected moment that will stick with your audience and then it leads to that big aha moment. Say it again. You tell a story that includes the unexpectedness moment, right? Yeah. Forces you to adapt and then because of that adaptation, you learn something and the learning becomes this moral, secret sauce like statement. The capture of the lesson or the takeaway is the nugget, right? Exactly. The nugget. I want to welcome the show. Sarah, dawn, tell us about some of the client experiences. You've dealt with some people who are control freaks who are stuck in certain ways of doing these. Talk to us, share some of those with us because I think it reveals your way of looking at the business. For sure. I have really kind of narrowed down these five perfect personality types and who knows, maybe we'll add to it. But everyone I've worked with so far, myself included, falls into these five personality types on why you're overworking in your business. You don't have the life balance that you need and it's stopping you from scaling, it's stopping you from growing, but it's also making your life kind of miserable. And I love that you said control freak, because that's one of them. And my shining star that I think of is a, it was a professional services company, pretty good sized company, but still had owner operators in there. And the owner operator, you know, she would have to reschedule our meetings and, you know, or cut a short or wasn't mentally there. And I'm like, what you doing? What you working on? And some of it was typical owner operator stuff. Plenty of it was things that I would say, why on earth is that still on your plate? Why would you be doing that? You have 100 employees. Why is this on your plate? And she said, well, I just, I can't find a strong executive assistant. I've looked, I've hired tried people, I just can't find anybody strong. I said, okay, well with all love, you're probably not the easiest person to work for, so let's look into that. What's going on and what she was doing. I don't care how strong the executive assistant was. What she was doing is managing every single task the control freak says. And I'm sure plenty of people listening to this podcast are going to be like, oh, the control freak says, if I don't do it myself, it won't get done right. So she would give stuff to her executive assistant Very perfectly fine delegating task. And then she would want to double check every single step of the way that the person had done and she would want to make adjustments to every single way that her assistant had done each thing. And she just thought that was the right thing of doing, way of doing it. It didn't mean her assistant was wrong in the way the tasks were completed. It just could have been done a little bit better. So every little step got remanaged by the end of it. This person had no confidence in any task that they could complete. They walked on eggshells. Not because this person was challenging personality wise. She was actually a really awesome leader as far as how she approached her team. But. But they didn't feel confident in their ability to complete anything without changes. So everything stayed on her plate no matter how much she delegated it. That takes time to change those habits because it's. Well, what if they make a mistake? Oh yeah, they're going to make a mistake. You've got to be okay with that. I have yet to have a neurosurgeon client. I say this all the time. I've yet to have a neurosurgeon client. Your mistake's not going to kill anybody. It's fine. Let it be. Have set meeting times that will review everything. You know, once a week we're going to review everything, but not every little step. Yeah. And then that person learns to shine. They learn to see the results you want, manage the results, not the tasks. They learn the results you want and then it's measurable. They've either completed or it's not. But you're not burning yourself out by trying to micromanage every little thing. And you're not disempowering your team by feeling like they have to be managed every single step of the way. Hanukkah, right? Sounds like a Jewish holiday. Yes, but she's from South Africa. It's like an Afrikaans name, I'm guessing. Yes. Yes. Well done. Yes, it is an Afrikaans name. It's a suffraganist. They get. Well, actually it's more Dutch, but. Yes, Dutch, yes. Yeah. Kind of the same thing. Yeah. You know, what's the difference between Dutch and Afrikaans? We don't know. 2,000 miles. 200 years, actually. Yeah. You know, it's just not the thing that people openly talk about. It's mental health awareness month. Actually, it's. I think it's kind of fitting that we're having this conversation today. And if you are that person, like I want to really tell you or encourage you to ask for help because that's like the first, the first way of how you are going to be able to do this or overcome this and make changes in your lives. And then for those of us who are in our daily lives and we are not aware, I think it's also just really listening more to our friends and the people around us. I think when the first time when I shared what had happened to me with the sexual assault, I was blown away by the amount of friends who reached out and they were like, oh my word, this happened to me as well. And so the more we can a open up and tell our personal stories, people, we're often like, oh my God, what's the neighbors going to say? But actually the neighbors aren't going to say anything because the neighbors are your friends who are going through similar situations and your story can help them. Which is a big reason why I wrote the book is, you know, I do believe that my story can help other people to overcome. It doesn't have to be the same things that I'm facing, but adversities in their life. And yeah, it can be of service in that way. So starting to own all of the bits of our life that is messy and not so pretty and being more open to talk about them can have such a huge impact on the people around us and it can help them. Yeah, it's a real gift and contribution to let yourself experience it, share it, remember it, process it. It's valuable for all of us to go there right into the things that we don't. And even in a business setting just to ground it to that. So first of all, there's us needing to be powerful and effective in the face of all those kinds of challenges and lead our teams in a clear headed way and not to be distracted or diminished by other kinds of things. And then there's the people around us that we lead. And I've had CFOs and COOs and CEOs have mental breakdowns of one kind or another. We've had deaths, we've had suicides. We've had things in the companies that we work with and in their families. Right. So even if your CFO is doing fine, but a family member is traumatized in some way or in the middle of a crisis, then you're suddenly impacted as well. Exactly. Everybody's drawn into that. There's no escaping this thing. So it's useful to think about that. We're talking today with Andrew Bartlow. Yeah, See, I think what you point to is interesting. And what I hear in this is like if it's a bottom up OKR process, then you've got all the parts pulling in slightly different directions. Maybe not profoundly different because they've been engaged in something towards, but slightly different interpretations of the end state and they're all kind of going off and then that creates tension and then you're trying to corral the whole thing. But if you'll just declare we want to hit these targets, we think these are the major initiatives. Do you have any input on them? Now the CEO is declaring the major targets, or at least the CEO plus perhaps the senior team of five or six people is declaring a few major initiatives, a few targets and now we have some idea. Now I can think for my department, what do I want to focus on? And it changes slightly but now we all start to pull together towards that common view of the future. And even if it changes working together better. Right? Yeah. Clarity can drive alignment. Yeah. I find that often people will lead with the stick or a carrot. And maybe you should start out by pointing at the finish line of that analogy. Well said. Just made it up, honestly. Just made that up. Focus on the target. Yeah, like what, what race are we running? So let's start there. And you know, a lot of these high change environments, boy, if you, if you're working on quarterly OKRs at an individual level and what's your 70% target and what's your stretch goal? Heck, by the time you actually come up with anything that's reasonable, the quarter's already over and you got to do it again. And by the way, your organization has probably changed so that it's no longer relevant anymore. People forget that OKRs were popularized by Andy Grove back in 1970s Intel. And intel already had 10,000 plus employees at the time. So that was a stable, mature organization where people had clear jobs, clear accountabilities. They're pumping out widgets essentially and at most 50 person startups that are trying to use okrs. It's an entirely different landscape. Right. So start with the basics. Get the basics right and that is commit to what your organization is trying to achieve and everything else gets a lot easier. I want to welcome now Eric Partaker. Why don't you talk to us about either one of the people you've coached or what you've been doing this last year. There is a CEO who wrote in not that long ago who's actually a subscriber to my blog, to the newsletter and I hadn't actually coached him, we just had a Conversation here and there. And he really took the whole three alarms concept to heart. And what he did was he set up three alarms on his phone where he segmented his day into three parts, where each part would be for the most part powered by a best self identity, him at his best in each of these three domains. So health, wealth and relationships. And his health alarm he set for 6:30am and he called it 70 year old me. So that's the phrase that would appear on his alarm when, when, you know, when on his phone, when the alarm went off because he thought that if on a daily basis it was, you know, his 70 year old version of his, of, of himself was kind of like overlooking and seeing what he was doing or not doing that he wouldn't even consider some of the poor health decisions that he was making in the first place. And within a few months he set up doing that. He suddenly returned to the gym where he hadn't been to the gym once in a couple of years. He stopped grabbing that, what did he call it, a cinnamon muffin on his drive into work. And he lost about 25 pounds in a space of three months. Just because he really tapped into that whole spirit of identity driven change. Pick you at your best, give it a name on that health front, create an alarm to cue that identity at the right time of day and then act from that intentionality of that identity. Rather than just you going to the gym, for example, it's that version of you making better decisions. At 9am he shared another alarm that he had which was called, I think he called it world's best leader because. Which he timed for 8:45am because that's the version of him that he wanted to start the day. He didn't want to start the day as himself, but as that version of himself. And that prompted just a different way of walking into the office, a different behavior. How would the world's best leader walk to these doors right now? How would the world's best leader interact with people with the world's best leader in a meeting, you know, sit there, you know, ultra passively, or would they take an active role in the meeting? And, and it just once again changed the way he showed up. I think specifically he tied that to him taking a stronger stand when it came to safety in this company. It was a manufacturing company. And as a result of that taking more ownership of that, they reduced the critical incident rate quite dramatically, I think by 75% within a period of a few months. Once again, which again he tied to him taking A more identity driven approach to his wealth domain or his work domain or his leadership domain. And then last but not least, he used the same alarm that I still use to this day on my phone for the evening. So at 6:30pm on his phone came up world's best husband and father. To prompt the question, well, how would the world's best husband and father walk through that door right now? When I first used that alarm myself, it totally changed the way I walked into my house, you know, prior to that point. Yeah, well, I was, I wasn't anything close, you know, to the world's best husband and father. Kids might want to play and I'd put it off. Wife might want to talk about something, you know, put it off to the weekend. Yeah, so that kind of intentionality is. So we're talking with Robert Bravo today. It's interesting though they, I think to segue into this topic and your topic. I think every organization brings with it certain rules and values and that kind of thing. And you've seen that in a lot of different environments as we're talking about that, I don't know, maybe we could talk about how the rules of an organization, the people fit in. They don't fit in that kind of thing. Maybe either the Utah trip for President Bush or the healthcare physician practice thing that you were talking about before or yeah, one of those maybe is yeah, sure. So I'll, I'll even, you know, let's just start with, we'll start with, you know, going to Utah with, with President Bush and the power of, you know, what is, what is super powerful because this comes, this is really comes down to the whole, in my opinion, the whole art of execution and why and companies or organizations, people, leaders, whomever that do it well and those who don't do well and those and everywhere in between, it's really around, it's really around the empowerment of your team, the empowerment of the people that you have working for you. So even in such an environment, by the time you get to that event, now we're in the execution mode, there was a ton of training and testing that took place or was taking place and is always taking place when you're not in execution mode. So if you're not the team leading that trip or out on a trip, you're training and you're being tested on your training and you're getting better from the after action reviews from the teams that have been out there and it just keeps evolving on how you're going to execute. So, so when I get out To Utah with my team. And this is, this is President Bush. He was going to stay overnight and we're in the ski lodge, super swanky ski lodge. And Park City. But he had events in Salt Lake City. Park City's probably 30 miles up the mountains from Salt Lake. Multiple locations, fundraising events. It's pretty cool for me because my fundraising event, my event site that I was in charge of was actually at Mitt Romney's house. It was a big log cabin house in Park City. Anybody can Google it. You can google it if you want to look at it. Actually selling it now, I think, I think so. Yeah, I think so. See the. On the market or recently sold one or the other. But that was the event site because there's going to be this, this big private fundraiser with the president and the RNC and everybody writes their $70,000 check at the door and then they can get in. But a fundraising event. But then there were other events in Salt Lake City. Point is, we had about an 18 person team on that trip. And as we talked about a little earlier, you're talking audio, visual, radio infrastructure structure, satellite communications and your IT from secure, non secure type of information technology setups. So you may have three or four people per discipline, if you will. Yes, plus, plus I'm there and there's another comms officer leading another event site and then an overarching comms officer in charge of the whole thing. Lots of stuff to get done in six days. So when you're rolling into the city, you know that radio infrastructure is not there. It's not present. Your team has to, your team has to put it in. If I roll in and I, and I have not empowered that team and I execute as a micromanager, there's no way we're ready by day seven when the President arrives. It just will not happen because there's just, there's too many things to do, there's too many tasks to accomplish, too much execution for any one person to try and control. So it all comes down to the training that you did. You've tested your people now they're executing and you've empowered them to do their jobs. And it's the morning check in to make sure they're on track with what has to be conducted and finished that day. And you've opened that dialogue that if something happens during the day and what you're doing and it's not good, right, you think there's going to be a delay, something's impacting you, or there's an impediment you have to. They have to know they can call you immediately and you're on their team to help them get that resolved. Right. It's not. You may have an impediment. It's not a bad thing. But let's get it resolved now. It can't wait because it doesn't get better with time. So you're experiencing all these types of things that are like the anecdotes that people talk about, you know, bad news doesn't get better with time and all of these types of things. Only it's hitting you. It's hitting you hard and fast in what we always termed a zero defect environment. Zero defect, meaning, you know, president stands up to the podium. It's not test 1, 2, test 1, 2. It's. He needs to speak and not only do the who's ever present, he's really not speaking for who's ever present. He's speaking to the world who's watching on camera. So. So that, you know, you bring this team together and it's just amazing to watch. And you. You give them the power. They have all the authority to do their job, that they're hired, they do it, you check in with them. It's the regular leadership type of things that you would do to check in with your team, communicate with your team, you know, frequently check in with them at the end of the day, see where they're at, that the tasks have been accomplished. Trust and verify, you know, every single day. Next thing you know, the president arrives and you execute the mission to standard. All right, join me now as we talk to Dan McGaugh. I used to think it was just because we were in California, but I think it's really everywhere now that people have unique kinds of food requirements. And then tailoring to that, both in our lives as well as in our marketing, I think is a great lesson there for folks. Then you also worked with a company that did vacation rentals. It's funny that that's the second example because I am today trying to book a house for a upcoming vacation. First one I've done with an airplane since over the last year. Wow, that's fun. Yeah. Vacation rentals are definitely a fascinating space. We worked with a company called Carolina Designs Realty. They go by, like, Carolina Designs, but they're one of the largest vacation rental companies in the Outer Banks, so multiple different regions there. And it's really fascinating. I mean, I have never done vacation in the Outer Banks, but. Have you ever been? I have been, yeah. It's nice. It's cool. It's. It's beautiful down there. I mean, it's super, super awesome. But the, the differences of the vacation rental homes are quite astonishing, right? You can go from one where it's a couple hundred dollars a day to, oh, no, this house is $9,000 a day, right? So, like, really, really big disparity. And in their product, when you come to their site, Carolina Designs.com you have a lot of people that are trying to figure out how are they going to book a home, right? What are they going to do? But when you're renting a house that has 28 bedrooms, it's not like you're just going to go there with your three kids, right? Like, I'm not going to show up with my three kids and rent this giant house. I'm going to come there with four or five other families. And in many cases, what we had to understand when we first started working with them, who is the buyer, right? Who's the champion, as you would say, who's the person who, who makes the decision? And what we really learned is that in many cases there's one person who's a champion, but then you've got to get four or five other families really invested in that decision to figure out what's going on. So in many cases, it was the matriarch, right? It was great grandma or grandma who started all of this. Not very technical. And we had to ultimately make it really, really easy for grandma to find the house that she's looking for for the different reasons, right? Different filters which were built into the site. But the key thing that we focused on was how do we make it so that grandma can save that house and then as well as share house with other people in her family and then be able to track how that house had been shared with other people and then give all of those constituents, as we would call them, an easy way to compare what grandma has shared with them, but also with whatever they were most interested in. And creating a basically a compare flow, a save flow, and then as well as a nurture flow. And I think the, the thing that was most entertaining was is that you would save a house and then be able to share that house with other people, but would automatically send you emails. But what's really, really important is as you were going through saving the houses in the Outer Banks, there's different areas. So there's Kill Devil Hills, there's Duck, there's Kitty Hawk. Each one of those areas has specific reasons why you would stay. And I'll just Use Kill Devil Hills, which has the wild horses. Right. Really, if you want to go to Outer Banks. And I could be wrong in the area, but I'm pretty sure, I think it's actually Kerala, now that I think about it. One of the areas you have to take four wheelers everywhere. Like, there's not a. You can't just take a road and get there. You need a truck. And then there's wild hors, horses out on the beach. So we needed to make sure that as people were saving these homes and sharing them, we also would send them automated emails that would have a nurture journey that was tailored to that area. And then as part of that, every single time they would save a home, it saved it to the bottom of that email. So they could always review that email. At the bottom, it would say, pick up where you left off. And there was a house that they had just looked at. And being able to connect all those things together with the stack was definitely an integral part to getting people to not only, hey, I'm trying to figure out how I'm going to spend $45,000 on this house, but I've also got to get Joe, Karen, Sally, and two of our other kids involved. And then I've got to make it so that they can feel like they have a seated table. But then I've also got to make sure that everybody knows what they're getting into and then also has a personalized experience so they can pick up where they left off and get right back in. And that a humongous increase in reservations, because they were able to make that process a lot more simple, they were able to shorten the actual purchase time dramatically in regards to how long it took for somebody to a reservation, and also reduce the number of deposit cancellations because instead of somebody submitting a deposit, canceling it because their daughter or their brother hates the house, we were able to reduce that friction and dramatically better understand how people are purchasing their rentals, which was a huge increase for that business. Warren, welcome to the show. And I got on the phone with my dad and I was. I was sad and upset, disappointed. And he's like, look, he said, I know you're going to find a way to deal with this and something surprising will come of it, and you'll learn something about yourself. But one thing you should know right away is that you're one of the people who actually does stuff. That's right. And it was a deeply validating thing. And I've noticed it in my kids, too, as they've gone out and they've hatched things and their friends have been more talked than action. And if you're one of those people, and I suspect the vast majority of our listeners and viewers are, then you should give yourself a pat on the back for doing that. But also know that not everyone does that come as easily for. Right. Well, that's right. But it's the affirmation of that, of the effort of doing that's important by those observing. Right. Whether we're parents or friends or coaches. And sometimes that doing ends in failure and we have to affirm that that's okay. Right. You went out and did something even though it didn't work out. And I've had plenty of failures in my life, both personally and professionally. Right. And sometimes the best laid plans of men and mice. Right. They just don't work out. And so our best efforts sometimes end in failure. And we have to deal with that. We have to accept accountability and responsibility. Having someone there that says that's okay, you gave it your best shot. Now let's go do something else that's really important and particularly important with children. Particularly important with children. Let's talk about some of the people you've coached and tell some of the stories that you've mentored along the way. You shared some. As we got ready and planned out our conversation for today, talk about Mark Russo. I think some of our listeners, viewers will know, Mark, talk about your work there and what he went through. Well, Mark Russo is a fantastic guy. I met him in Miami at about 2009 or 10, right after the financial crisis. He was a custom spec home builder in Seattle, Washington. Had a great company doing about $50 million in revenue. And he got washed away by the financial crisis in 2008, 9 and 10. And when I met him, pure serendipity, the first hour he, you know, we spent crying together. I mean, it was just a very difficult situation because he not only lost his business, all of his employees, all of his revenue, he was about to lose his wife and his children, his home, his car's being repossessed. His partner stayed with him, JMS Estrano, they stayed together. They'd been together since they were DJs in high school and they, they were going to fight it out together. They owed the banks, I don't know, $3 million, something like that. So that was the guy I met. And I said, well, Mark, what is it you want to be? He said, with absolute clarity, vision. I want to be the best custom spec home builder in Seattle, Washington. And I said, well, good, let's get about that then. And we started from there, applying his clarity of vision with his certainty of intent. Now he could work toward that and the power of his values. And I said, mark, what do you value? I value my marriage. I value my spousal relationship. I value my children. I want to be a great dad. I want to be an influence in the community. I want to be a really good CEO and I haven't been a good CEO. I let it go to my head. I was wasteful in my spending. I was doing a lot of silly things. I don't have anything now. I want to be good in all that space. I said, great. Then let's begin to apply these five principles. And if you apply them every day, your end result will happen. Your outcome will be there. And the five are first, commit to a higher level of personal discipline. Everybody I know that's successful is very disciplined. Second, live with purpose every day. Know what your purpose is every single day you live. Third, act with intent. And everything. You don't, don't do anything unintentionally. Do everything intentionally. Fourth, make conscious choices about everything in your life. There is no small decision that we make in life. I believe every decision has consequences. Large or small, they all have consequences. So make good decisions, right? And then lastly, engage in a cause greater than yourself. Give to your community. Serve other people. If you're having a bad day, go serve somebody else who's having a terrible day and you'll feel better. And so apply. He began to apply those five principles. Right in the middle of that, he had to have brain surgery. Another blow, right? But he recovered, he came back. Well, where's Mark today after applying these? Now it's what, eight years later, nine years later, 10 years later, he doesn't have a 50 million dollar company anymore. He has a 75 million dollar company growing like crazy. Custom inspect homes. He's won all kinds of national awards. Best place to work, best leadership, quality company. He's got a hardcore group of people in the culture of his company that are absolutely phenomenal. And he's giving to his community in significant ways. And more importantly, he and his wife reconcile. He and his children on a good path. Mark is on a six month sabbatical right now, living in South Africa, Cape Town, soon to go to Switzerland for a world class experience for his children during one of the most difficult times in the world. The coronavirus. It's amazing. It's amazing across Europe. Yeah, that's right. But I think Bill, for You and I to observe that, to be coaches, to help other people. People. Right. It's so rewarding. It's so gratifying just to see the progress. My happiness at my age in life comes from the success of other people and I love to see that success. And I have 25 stories in the books about that kind of success. So we'll be talking in a minute with Nigel Bennett. Since that time, you know, I grabbed my sister and another guy and we formed this company to help protect the world's most precious resource, which is water. And so we formed this business and we're, we've done business about 104 countries or about 3,000 clients around the world today. Yeah, yeah. I don't have offices there, but I've done business first. Launch time. Yeah. No, no, no. Now this is 25, 28 years later. Took a while. Just like everything but the, the years, the years went by. The years went by and you know what? I, I would go into my office every morning and I call it my, the doorknob effect. I would like a lot of people, you go to the, you go to your office door, you touch it and it feels like it's vibrating because you know, as soon as you step through it, it's going to be absolute chaos on the other side all day long for the, for the entrepreneur. Nigel, I need this, I need that, I need that. I went on for 20 years like that. I was in my shower every morning wondering, you know, can I, can I hire somebody or can I make payroll or do I have to lay somebody off? Are we going to make it another month, year after year after year? And you'd go into the office and it just became complete hell. Another eo, a guy that I knew had joined the Entrepreneurs Organization or the Young Entrepreneurs Organization at that time, right back before they changed the name and he was a 330 pound lineman for professional Canadian football team and he just retired and he joined EO because he had a business. And he grabbed me, literally grabbed me by the scruff of the neck. He said, nigel, you got to come to a meeting with this young entrepreneurs organization. I'd be like, you know what, I have no time. I've got young, young little kids. I've got a business that's trying to survive. I haven't got time to screw around with something like this. But he literally forced me to go. And that was one of the best decisions that I ever made because I got into the entrepreneur's organization and in there I got into a focus group, or what we call a forum group, with about nine or 10 of us, which stayed together for 15 years. And we were able to help. Help, help each other, support each other with our businesses, with our families over many, many years. And that led me. Being in the entrepreneurs organization, led me to where, actually, where I met Laurie. Your wife is at MIT with an entrepreneurial conclave, which was called Birthing a Giants, which was now our group is called the Gathering of Titans. So we've been together for 17 years or 16. 17 years. And the very first session that I went to, I sat. I was. I was ready to vomit because I. I didn't think, I'm add, and I got dys and I had trouble in school, and I just never feel that I fit in with entrepreneurs or people that I thought were smart. And they were all going to be at this conclave. So most of our entrepreneurs have this. I don't feel like I fit in. I'm not sure I belong here. And there's a fancy label for it. You probably all know imposter syndrome. And then many of us have some kind of issue like ADD or something else, where we struggle with paying attention, staying focused, reading, whatever, and that leads us to this affliction that we call entrepreneurship. Exactly. I'm driving up this driveway at this Endicott house at mit, and I just feel like I'm going to vomit on the driveway. I go in and I sit at the back of the class. There's a conference area, and there's 75 entrepreneurs from all over North America, and some from around the world, too. And. And I sat in the back, and I don't know anybody. Nobody knows anybody. And then Vern Harnish comes and sits up at the front, and he says to the whole group, he says, hey, guys, I'm Vern Harnish. You know, I'm a facilitator here. I'm like, okay, that's cool. I don't even. I didn't even know who he was. And he says, let me tell you something. Every successful business person, every successful human has or had a coach or multiple coaches, he says. And he started spouting off like, Steve Jobs was alive at the time. Steve Jobs and Michael Dell and Bill Gates, blah, blah, blah. He was going off and off about this. He says, you cannot do life alone. You cannot do life alone. Especially an entrepreneur. You cannot do life alone. And I, fortunately, had hired a coach about two, three months before this. And Vern asked our class, he said, how many of you have coaches put up your hands right now. And I'm like, okay. I put, and I looked around, I thought everybody had a coach. I thought these guys were geniuses. There's three of us in the whole class. And Vern said, three of you said, come on, guys, like, you know, you need to get a coach. So, so I, I, there's. This is a scaling up coach that I've been working with for years called Kevin Lawrence that, you know, and lots of other people also and been part of our community. Like that, so. Exactly, exactly. Yeah. Do you still work with him today? With Kevin? The past couple of years we scaled back to, you know, we were doing once a quarter and now we chat. We chat. So. But I worked with him for 16, 17 years. Long, long time. Yeah, yeah. And the most incredible thing was that, you know, I thought I hadn't had. I thought number one was it's too expensive. Number two is I don't have time. But what I realized that if I look back now, the only reason that I'm sitting here in front of you today is because one, I joined the Entrepreneurs organization or a really good peer group, and number two is I got a really good coach. And if I didn't have those two key things, I would not be sitting here today. We're going to be heading to David Horsager in a minute. Let me make sure I understand this. And for our listener's sake as well. It's a pretty situational trust we're talking about here. So I trust the dry cleaners to be open in the available hours, not to ruin my clothes. I'm not trusting them in an absolute sense. I'm not trusting them with my children. I'm not trusting, I'm trusting them with my clothes. Certainly we trust people, right? We trust people in different ways. And I'll get to the eight pillars of trust. And we need more or less based on different things because I might trust, I might trust people to, I might trust a certain golfer to play golf really well, but not to go on a date with my wife. Right. So there's some news about that. So when we talk about the trust edge or the trusted leader, we are talking about a pretty comprehensive high level of trust that I actually would trust them in their character, in their competency in all these eight ways. But that first, it's really important to see the impact that trust, that first half of the research. Of course, all the money is made on the second half, how you build it. And we'll get to the framework. But you have to see it's always a trust issue for some people. Solve the wrong thing. They think they have a communication issue. They never do. They got an engagement issue. We're measuring the wrong thing. You don't get engagement. With engagement. The only way is to increase trust. We got a net promoter score, NPS issue. You don't get referrals with referrals. The research shows the only way to increase referrals is increased trust. Then you get more referrals. So you have to. And I think we were talking about this before the show quickly. And I won't give a body of research to bore people, but. So let's look at it anecdotally. A lock business. Why do I put a lock on anything? The only reason is I don't trust you. So what's the cost of having a lock on something? Well, the money, I gotta buy it. But the biggest cost is time. Now I gotta fiddle around and open it. I can't just go through the door. That's a big cost. Or, you know, listeners can simply think, text someone you trust. How long does that take? No time at all. Now try to text someone you don't trust. How long does that take? How are they going to take this? Ooh, I got to delete that. How are they going to take that? Forevermore because of a lack of trust. So when you can see, when you can actually solve or increase trust, you create a place where people can be their best and you create the greatest efficiency and performance. I grew up in the poorest town in poorest county in Minnesota. And I still remember out in the countryside, Mr. Olson's veggie stand, where he left the can of money out there and all the vegetables out there, and you made your own change and pay what you owe. And the efficiency of that, where you can have it, is that he didn't have to pay anybody to be there. He saved money. People could do it at their own time. He saved time and they had loyal customers. And it was because he built it on trust. This doesn't mean I believe you should trust everyone. I just people. But they have to see the greatest efficiency of business in business is where you can create the most trust that you can create. So when you. It occurs to me though, that the. Like the government of the dry cleaner example, if I saw the dry cleaner pull up and nick the car next to him and then just sort of brush it off and look around to see if anybody was looking now, I'd wonder, what does he do to the clothes after the. There's a bleed over out of the car. And we, we think of the character of the people that we're interacting with that we see in other domains, even outside the. Absolutely. And by the way, I say that up at the dry cleaner because I'm thinking of going, going back because it's been so inconvenient. But actually since I started, I still haven't gone back. Yeah. I still actually am going 20 minutes out of the way to a different dry cleaner right now. So there was a cost to them if I ever do go back, because I need that time back. They cost a year of someone who's in a suit every day almost and is, you know, worth a lot of business, you know, you know, in there in a way. Right. So. So there always is a cost and there's skepticism, but you get to a certain level, you'll go 20 minutes out of the way, you know, to get it done. So there's. The point is you've got. People have to see the big cost is a lack of trust. And that's, that was a kind of. At the time, you know, we get it. But at the time that was kind of monumental finding because they were, they're using other indicators and solving the wrong problems. And people still do try to, you know, not solve the right problem. The second half the research, just to give an overview of it, is these that, you know, this first half of the research begged the question, how do you actually build it? Right. How do you build trust then? Is it just character and integrity and this. No. These eight research funnels that I use C words for clarity in the book, but they really connote or denote a really a research funnel of these eight are the framework for building trust globally. And when you have all eight of them, you gain this advantage. The greatest competitive advantage I argue there is. You talk about scaling up. You want to scale up, create this advantage of this eight pillar framework and you will have trust that helps you scale faster than ever before. Join me now as we talk to Eric Qualmat, as we are getting ready for the show, talking about swimming and doing triathlons. You don't know, but I did 45 triathlons and marathons in the day. Right, right. And you look like you're still doing them. I look like I used to do them. And I, I dealt with all the same kinds of things of the training. And so talk. Talk about what it was like for you. Yeah. From a triathlon standpoint or from a book standpoint or from basketball, like all of it. Right. Okay. Yeah, no, I mean we talked to. So I'll finish the story so I don't forget about it is how could getting your teeth knocked out be the best thing that happened for you? And so when you go through the focus project and when I went through it myself, I realized I've got to shift that mindset. Is my focus on fortune or misfortune? Am I focused on things happening for me? Yeah, a lot of your focus is really just where your focus goes, energy flows and like one story, whether it's training for sports and then we'll talk about me playing at Michigan State. Maybe at the end we talk about the teeth with coach Izzo, but it's really about my wife. There's a funny story from the book. So I'm in this Focus project. So those that aren't familiar with it, basically I wanted to focus on one thing per month. So I got excited going, man, what would it be like if I just focused on sales for a month? And I call it growth. And you guys obviously know that, but when you look at it so that first month, you got to pick something that allows you to have this 12 month project. So the one thing I always ask myself, what's the one thing if I do it well, makes everything else either easier or unnecessary. So I go, in order to embark on this fancy full focus project, I'm going to have to crush sales for that first month so I don't have to worry about the business. And so just by focusing on sales and I, I screwed up four times. Meaning that over the course of a year I would start and say, okay, I'm going to focus on how of sales for an hour a day. Just sales, an hour a day. That's all I have to do. And then the month would go by and I'd tally up how many hours I spent. 17 minutes. So I go, all right, restart, restart. So basically four false starts. Then we finally, the fifth time, get it rolling. And just by that hour a day focusing on growth, whatever your growth might look like, is all of a sudden we not only had a record month, but a record year for that month. Like I already had a record amount of sales. Just. That is the power of focus. It won't always work like that. Because I was sitting there going, man, this is daunting this first month because it doesn't work. I can't do this project because it obviously doesn't work, but it worked a lot bigger than I ever thought. Just at that scale, as you guys talk about more than I ever Thought. But one funny story that came out of it is midway through the project, I was at home and I'm trying to get something for my daughter. She's eight, one of my daughters, dad, I've got two daughters. And I'm pulling on the drawer, and you probably experienced this before. All of you listening. The drawer is jammed because it's just crammed with stuff. And I'm trying to get my hand in there, undo it, open it up, get her what she needs. And then I start displacing stuff. And lo and behold, I open the drawer next to it. Glorious. Wide open. It's completely blank. So I start moving half of the objects over there, and my 8 year old kind of pauses and she looks at me and she goes, daddy, you can't put that stuff in that drawer. And I go, yeah, I'm doing it right now. It's wide open. She goes, no, no, no, that's mommy's drawer drawer. I go, yeah, but there's nothing in here. I'm gonna put this stuff in here so it doesn't jam. And she goes, no, no, no, you can't put that there. I don't tell you I didn't warn you. And then, sure enough, my wife comes home, we have. And she goes, yeah, yeah, that's my drawer. You got to keep it empty. I go, what? What are we doing? And she goes, you know, it's really just my way to make sure I haven't overstuffed my life. I've got to have at least one drawer in the house that's empty. Yeah, yeah, yeah. And so if I hadn't been going through this focus project, I would have thought she was crazy or both crazy. But then I said, that's genius. And so it's just always a reminder to me to make sure that respect that capacity and focus on the big versus the busy. Yeah, I think about that all the time. Am I like, is this a productive. I mean, there are things that I do that are definitely not focused, right? Things that I do that are, that are, are almost pure time wasters. But I treat them like that's my little self indulgence. That's my like mental health break. But I'm pretty clear about that. And then if I do it too much, of course, then it's a total time waste. Yeah, no, it makes sense. And like Warren Buffett, we're flipping through his calendar. If you flip through his calendar, it's almost completely blank. And he goes, that's intentional. I need the space to think. And he's good friends with Bill Gates. And Bill Gates was kind of going, oh, you know, I always thought a good CEO just crams their day. Like with everything like that my team needs, I'm going to cram My schedule 100. Not even enough time to go to the bathroom sometimes. And then Bill had the epiphany through Warren that actually it's somewhere in that middle. It's that combination. It's making sure you have that space to think, that luxury. And you've got to be intentional to block off that time. And as leaders listening to this, easier said than done. It literally has to be intentional. We call it cowboy and cowgirl scheduling. Meaning you got to fence off time for yourself or time for that deep thinking. And then also allow for wide open spaces because you don't know what's going to happen that day. You've seen it in 2020 and 2021. You don't know what explosion is going to happen in the morning that throws your day out of kilter. So it's important to kind of have those protective pieces in there. Our guest today is John Warow. Now, no harm in having a strategic in a group of private equity or even a couple of strategics, right? Absolutely. I mean I would never. Yet strategics oftentimes will pay the most for your company. I'll give you an example. Have you ever had Stephanie Breedlove on the show? Do you know Stephanie? No. Yes. So Stephanie starts a company called Breedlove and Associates. They do payroll for parents who have nannies to pay. She builds the company up $9 million in revenue. Yeah, about 10,000 customers. So she goes out and says, okay, I'm ready to sell you $9 million in revenue. Where do I find a buyer? She goes to care.comcare.com is like the Angie's list of care providers. You plug in your zip code and they'll tell you about babysitters in your local market, all five star rated from parents who've hired them. Well, care.com has got 7 million subscribers. All people who have to pay their nannies. Breedlow says, let me think about this for a second. You've got 7 million subscribers. If 1% of your 7 million subscribers buy my payroll service, that's 70,000 customers. I built a 9 million, 9 million dollar business on the back of 10,000 customers. So overnight, 1% of your customers buy. That's a business seven times the size of my business. If 2%, what about 5%, 10%? Long story short, Stephanie Breedlove sold her $9 million payroll company to care.com for $54 million. It's a mind boggling number that would make no sense whatsoever on a valuation sheet. Like no one's going to place a $54 million valuation on a $9 million company. But Breedlove looked at a strategic identified care.com and made the strategic case of what it was in it for that. Yep. Yeah, well that's the, the like the key to that. And with some of our, some of the companies we work with, there are multiple potential strategic buyers for some of our tech companies in particular, some others as well where there's, there's more than one that could be included and you could get in some, some sort of like rollup or category specific type private equity companies that are doing some interesting combo things. Not just like the cookie cutter. Yeah, for sure. So yeah, private equity companies are rolling up lots of different industries. If you're a value added reseller right now, there's lots of folks that are making those acquisitions. It's a fairly common model. The challenge again with a private equity offer is usually that they won't buy, and I'm sure you've seen this in your own work, Bill, they don't buy 100% of your company. Most cases they'll buy 60%, 70% and they'll make you roll the rest of the equity into a new entity and then you become the minority shareholder in a business you don't control. Now how do private equity companies make this magic happen? They use a lot of debt, right? They borrow a lot of money to buy your business and fund its growth. The challenge, however, is that when you roll a little bit of your equity as much as 30 or 40% into a new entity, that new entity has to pay back that debt. And the more debt that private equity company takes on, the harder that is to pay off. I just did a podcast recently recently with a guy who rolled 40% of his equity into a new entity. It was a 20 million dollar acquisition. So he rolled roughly 8 million bucks worth of his value into the the new entity. It was about six months later that the management team of the new entity started to make huge strategic errors. About a year later, the new entity went bankrupt and he lost everything. The 40% of his equity that he rolled went away. Now that happens when you do, you become basically a minority shareholder in a company you don't control. So one of the questions I would be asking if I were thinking of selling to a private equity group is how much leverage that you've got on your fund or that you're putting into this deal. And if you're looking at, you know, big leverage, I would be asking myself, does this make sense? Because again, especially if you've got a big chunk of your proceeds at risk in that, in that future energy. Yeah. Because lots of things can go wrong down the road and you are no longer the, the main decision maker about, about doing the whole thing. And they don't probably care as much depending on how many companies they have. Yeah, I'm shooting all over private equity groups. I don't mean to my, my, you know, private equity groups are not bad people. They have a job to do. Right. And their job is to get a return for their investors. The way they do that is buy low and sell high. That's the essence of their game. Right. So they're trying to get your company for as little as possible, lowest possible valuation, use as much debt as possible so they can put as little equity into the deal as possible and turn around three, five, seven years later and sell it for the highest multiple. There's nothing wrong with that business model. It's just that you don't want to be the pansy or patsy in that, in that, in that, in that game. Right. You want to make sure that if you're going to sell to one of these guys, you got your eyes wide open. And one of the toughest things I know you talk a lot about one of the four disciplines, culture, people. One of the toughest things for owners to deal with is the changes to a culture that happen when you sell to a private equity group. I did an interview with a woman named Sherry Deutschman. She's from Nashville. She built a company that does billing for hospitals. Big company, but a lot of frontline folks, a lot of hourly workers. And she built a strategy and very early she felt very indebted to her frontline employees. Even people are making ten and twelve dollars an hour. She wanted to share a little bit of profit with each of them every single month. And so the first couple of profit sharing checks are like $3 and like $9. But over time, her company grows about 40 million, 40 employees by the time she sells it. So the checks are getting bigger and she sells to a private equity group. Well, about three weeks in. The private equity group now says, look, I know you usually do this monthly profit sharing thing, but we've run our spreadsheet here and it looks like this isn't terribly good for our bottom line. So I think we're to going to get rid of the profit sharing plan. And Sherry's like, no, no, no, you can't get rid of that. That's like, that's a huge part of who we are as a culture. That's what, you know, it's, it's, it's a huge part of our company. And then they say, no, no, I mean, but it's, it's, look at how much it's affecting the EBITDA here. And, and so they get rid of it. And, and it was crushing for everybody, her culture. Something like 80% of her staff eventually, over the next two or three years, left the company. And so look, private equity deals can sound good on paper. We're going to professionalize your company and bring in professional management to help you scale and grow to the next level. The challenge with that is that they are going to rip up the policies you've written as the founder of that company to make them more professional. And that can fuel for an owner, like open heart surgery without the anesthetic. Right. It can gut the culture of the company. It can cut the legs off of things that people have counted on and taken for granted forever. And if it doesn't fit like, it can, it can throw off the spray de corps. Right? The whole vibe. Yeah. Culture's this kind of like delicate alchemy. Right. For a lot of entrepreneurs. You know, like, we don't, we don't have the money, resources to compete against Tesla and Google and Apple. So what do we do? We come up with these kind of weird little favors that we give employees. Like we'll lend a little bit of money to a key employee at a time of need. Well, you know, we'll let one employee bring her dog into work because that, you know, like, or, or, you know, all this kind of crazy stuff that no big company would ever let go by. But we do it because we're trying to create a value proposition for an employee that makes sense. And so that can be great. And it can also look crazy as an outsider. So if there's stuff that's really important to you. I remember I did one interview with a woman who had an IT services business based in Denver, and, and she's like, the one thing I don't want the acquirer to do is move our head office. I've got all these employees who have basically brought me to the dance. They've done everything. They sacrificed enormously to come work for me. And the only thing that they ask is that we don't move our headquarters. And so she wrote it into the deal with all the acquirers. She said you can't change the head office of the company for like three years and she felt that was enough time for them to get on their feet and find another job if they chose to. So look, if there are a couple of things that are really critical to you that you think define your culture that you would feel regret if they were gone, it's worth just making sure you get proactive about including those in any sort of acquisition deal. To get all these shows and more, you'll go to scalingcoach.com or wherever you get your so we're on YouTube, iTunes, et cetera, Stitcher and so on most of the places. If we're not somewhere that you'd soundcloud, I think, or even that you'd like to find your content, let us know and we'll work on putting it there. Like it subscribe so you get the updates every week if you go to our website. Got lots of additional resources and things there as well. For folks. I want to give big thanks to the author and creator of the Scaling up framework that we use to help our clients grow, Vern Harnish, and to Wanda Mitchell producing our show in the background there. Our audio is edited by Albert Burge at podfly Productions. Our show notes are edited and compiled by Ayn Kadina and Tim McGowan. Thanks again everyone for listening. Keep Scaling Up. We'll talk to you again next time. Bye bye. Now. Are you ready to turn your goals into daily wins? You should check out our Scoreboard software. Powered by Alaina, it's the official software for Scaling up. With Scoreboard, you'll get an AI driven coach for priorities and KPIs and it'll help keep your team focused on what matters most. With Align, you can track your goals in real time and you'll even see results on the go. With their mobile app, you can rest easy knowing that Align has world class onboarding and support to set your team up for success. This is really more than just software, it's what I actually use to manage growth in our Scaling up client teams. Unlock clarity and results with Scoreboard by Aligned. To try it now, go to aligntoday.com Bill G One more time. Aligntoday.com Bill G that's aligntoday.com Bill G Check it out and try it now.