Focusing on the Systems, Not the Symptoms with Dave Newell

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 talent. Talk to Doxatant and you won't be disappointed. Go to doxatant.com Bill G. Again, that's doxatalent.com Bill G. One more time. Docsatalant.com Bill G. Check it out today. So hello again, my name is Bill Gallagher. This is the Scaling Up Business podcast. If it doesn't look like it's because I'm in a different location today, I'm talking to you from a really groovy house in San Francisco with a fantastic view of the ocean. You can't see it here behind me down in the media room, but trust me, it's cool. Our show comes to you every week with a show or two, a guest, a tip topic, some lesson that we've learned from working with scaling companies now for 10 years all over the world. And we've got over 500 shows. So there's a considerable back catalog of shows that you might find interesting, useful, helpful as you try to grow and scale your company. We deal with really getting the growth up and managing the overwhelm that comes with growth so that you can actually enjoy like you don't have to suffer the process. You'll find all those back catalogs, our workshops, everything else@scalingcoach.com coaching workshops, tools, old shows. Scalingcoach.com all right, with that said, let me bring in or he's already here, but Dave Newell, welcome to the show.

Dave.

You're in Charlotte area?

Yeah, yeah. Thanks for having me, Bill. I really appreciate it. I wish I could see your view.

I wish I could see it right now too. But you need to change this for a future time and record from the other angle. But it's a borrowed place for me right now. So everybody, Dave is CEO of a company called Evolve Leadership Consulting. They do very similar kinds of work to ours on the east coast with different kinds of companies. And he's going to talk to us today about this whole focus on systems instead of systems instead of symptoms. I'm like never going to be able to say that Today I should have like, got it out of my mouth early on. So welcome again to the show.

Yeah, thanks so much for having me.

So talk to us about, like, I don't give us a little bit of your background that led you to this focus on systems in business and systems for growth, systems for running the business, that kind of thing. Us, kind of that picture of how you got your start. Because it's not the most typical start.

Yeah, you know, it's, it's probably a little bit winding, as I would imagine most, most folks stories are as they, you know, kind of enter the, the mid to later stages of their careers. But I really actually started in community organizing. And so where I learned. And we talk about aligning the misaligned, that's really our kind of purpose as an organization. And alignment happens through putting behaviors and systems together. And when those two things are lined up, you know, that's where the magic happens, so to speak. And so it really started in community organizing. And what I was being asked to do was take a, you know, a nonprofit environmental organization who wanted to, you know, modify the environmental impact that was happening in creek beds and river streams to your watersheds, to working with farmers, to working with government agencies. And essentially, you know, those three things, those three entities all have very different interests and very different outcomes that they want to achieve. And my job was to figure out, all right, what aligns these three entities and how do I get them swimming in the same direction. And so where I really started to learn systems thinking and where I really started to learn, you know, kind of the, the, the front end of things is through getting groups that don't traditionally play well in the sandbox together. To play well in the sandbox together. You know, where it got to is we have to get to the core of things, not the outcomes that we want. So, you know, to, to tie that then back into the business world. And how I got into the business world is I just started doing some of that work on the side and I just started engaging with some folks. And what I realized is we were really onto something when it came to looking at leading versus lagging indicators.

You know, I, to underscore something that I think is really useful for our listeners here, viewers. Very often we go in business, we're like, I only want to talk to somebody, consultant, coach, whatever, who's done the thing that I want to do in the area. I want to do it. And that's a big mistake. And coming from community organizing and nonprofits or non traditional background is really Useful because you have to get people to do things for. Without as much direct control in particular, community organizing. Right. You have to get people to do things where you don't have authority over them. We use more influence, more inspiration. And then of course, there's some inherent inefficiencies in a lot of these things that are purpose centered and cause related.

Absolutely. And it's not that dissimilar from being a consultant. As much as we like to think we have authority over things, really what we do is enrollment. We're trying to show you a pathway. We're trying to create a story and a narrative and an opportunity and, and put it in front of you and say, do you buy in or not?

Right.

Did I do a good enough job of hearing what the pain is? Do I do a good enough job of seeing what you can't see at times showing it to you in a way that gets you to say, yeah, actually we really need to do something about that. And now I've got your energy and now I've got you tied to it to move yourself through it. So as you mentioned, you know that the working in community organizing really taught me how to bring disparate groups together. But what it really taught me is we're all part of the same movement. We all wanted something. We all wanted something around this particular concept or this particular idea. In this instance, it was a cleaning up, a watershed. Right. It's not that didn't want it. They were just more concerned about the potential economic impact. You can't avoid that part. You can't say, well, let's not talk about the economics of it. We're really only here to talk about the water aspect. It's like, well, no, you have to bring that in if you want their buy in. And what that showed me is every business is essentially a series of systems, but those systems interact with each other. And so, you know, to use to kind of pick up on what we were introducing at the outset. You know, when you talk about the difference between, you know, symptoms and systems, it's like, well, what you have to recognize is if you turn a dial in sales and marketing, for example, well, that's going to impact your operations and that's going to impact your finances and that's going to impact your culture potentially. And so you can't just turn one dial in your business and hope that fixes everything. Can't just turn one dial and not assume that it isn't going to influence the other aspects of your business. Any dial that you turn has influence and impact over another aspect of your business every time and always. And so really, if you take a systems approach, you have to think about, well, if I twist this dial, where is that going to show impact or influence in other aspects of our business? And how do we kind of preempt some of that movement or be at least prepared or forecast some of that movement before we really twist the dial in sales, for example.

You know, I think there's a couple useful things to underscore there as well. Like if you think about if we get sick as human beings, right? And then a common thing when you get sick is take some medicine, whether it's a headache and you take some aspirin, or you take some Tylenol or you take some ibuprofen, like whatever you do, there's a, there's other impacts, right? It goes into this incredibly complex, fascinating organism that is our bodies, right? And then it addresses hopefully mostly the symptom that we want to address, but it has all these other effects. If you take too much acetaminophen, you're going to get really sick, like you could kill yourself. Right?

And.

All of them have these kinds of things. And then you think about the business, right? How we really want to get our cost of goods down. But if you put all your focus on reducing the cost of your product or service, you might find that you have some defects, you might find, you have some gaps and things, some quality issues. Right? Like so. And the same thing, like push really hard on your people because you want to get the cost of labor down. And then suddenly you've got upset people who don't want to take care of you and your customers. Right?

So yeah, yeah, absolutely. You know, and I'll give you a, I'll give you a real tangible example of how you can twist one dial and have it impact something else.

Yeah.

We were working with a manufacturing company here in North Carolina and they manufacture industrial screwdriving systems. So, you know, the, the big arms that you would see in a Ford factory where they're putting a thousand screws in a minute, right? These incredibly complex, difficult machines. And it was, they had a 14 week production process and it was taking them 16 weeks to produce something. And so they were constantly late. They had is of 34 employees. Thirteen of them were on what we would call like the issues list or the problem list list. Right. So a third of the workforce was essentially, you know, on the chopping block. It's like, you know, so they brought us in to do culture work. They Were like, oh, we've got a really, you know, tough culture. It really sucks to work here. People are going home and they're miserable and they're complaining to their spouses and that, you know, the rest of their lives are being ruined because this environment isn't working very well.

Right?

And so when we came in, we're like, okay, so the symptom that you can see is you have disgruntled employees. That's the obvious thing. Like, we have internal communication breakdowns, we have disgruntled employees and our delivery times are late. Okay? So we do a process on the front end of every engagement. It's called causal mapping. And causal mapping came out of MIT and Peter Senge's work in kind of like the late 80s, early 90s. But causal mapping really looks at influence meaning. So we did interviews with 34 employees and instead of approaching it as a culture issue, I went in thinking, okay, so there's no way that a third of your workforce are terrible people to work with. That's unlikely, right? So we come in with the mentality of the system is perfectly designed to produce the results that it's producing. And it's kind of a like, well, yeah, obvious statement, of course, but when you think about it like that, it's like, well, what's the result that we're getting? The result that we're getting is disgruntled employees. That's the output. So now we have to back up and we have to say, well, what's the system that's creating these conditions? So what we discovered through the interviewing and causal mapping process is that there were two major concerns. Number one is that they had no idea what the long term success of the company looked like. So they didn't necessarily have a shared vision of where they were going. And they had undocumented processes and they had seven departments. And so those seven departments weren't communicating with each other. Or if one shifted something in the process, it would ruin everybody else's process down the line because they didn't know what the other departments were doing. And so instead of addressing, instead of coming in and coaching every employee, what we did is we formed what we call the coalition. And that coalition was a member or two from each of the seven different departments. And we spent two hours documenting processes together every other week. But what we were doing is we were teaching each other like, okay, so when you turn this dial in production or in project management, that shifts this dial down here and that causes this problem. So maybe we need to think about it like this, right? And in two. And in two months, we had cut two weeks off the production time, and only one person was left on the issues list, in part because he was just a jerk. You know, so it kind of is what it is. But I use that example often in talking about systems versus symptoms, because what you could see, like, we were brought in to do coaching. We were brought in to deal with people problems, but it wasn't a people problem. It was a conditions problem. It was a system problem. We shifted the system, and pretty soon people started flourishing and they started talking about like, oh, it's so great to be here, and et cetera, et cetera, because we created the conditions for them to be successful.

You know, I think I love hearing in that, like, you have sometimes you think your system's broken and you're like, oh, my system's broken, Whatever. And then you realize, no, we have a system. It's just not designed. Right? Like, it's working. You have a system in practice, and very often when you come in, you go to do systems or process work with teams, they're like, senior leadership will map it out and say, okay, well, here's what's going on. And then you bring in your next level and your frontline people, and they're like, that is what happens. No, I give that sheet of papers over to this gal, and then this goes on, and then she does this thing. And then you're like, oh, it often has only a vague resemblance to what you think the system is. And especially as the company grows and gets bigger, like, the connection between what you think is going on and what's actually going on is often a lot more tenuous with time and size, right?

100%. 100%. I mean, we had a client we worked with over the last year who's in the Amazon marketing space. So, you know, essentially like Google Ads or advertisement, they do that in Amazon. So they help, you know, companies who are selling products on Amazon get their. Get their product on the first page. So all of us have shopped on Amazon at some point in time, I'm sure. And you see the thing that says sponsored, right? They're the ones that are buying that real estate for their customers. And, you know, I've worked with several of those organizations over the last few years, and this was a relatively young company, you know, a year and a half, two years in, had some stability, had some, you know, had some structure, but they had a vision that was, we want to be a $20 million company. Well, currently they were at 750,000. And their operations were a nightmare because their operations were all about solving the immediate problem and reactive. But they were feeling this pressure of, we want to be a $20 million company, right? So, like the, the boss was talking about it all the time. CEO was like, no, we're going to be this, we're going to be this, we're going to be this. And it was putting all this undue stress on the team because the team was like, there's no way. Like, I don't see how we can possibly do this. And so in many ways, you had a misalignment between the story that we were telling ourselves of what we wanted to be and what the actual reality of the organization was. And so again, when you're looking at the symptoms were stressed out, reactive, disgruntled employees, and really, in this instance, it was because we had misguided vision for what the company could be. So we had to back up and say, okay, well, if you do want to be a $20 million company, that's okay. I'm okay with that vision. But we actually have to create the structures that are simplified and scalable. We can't be hiring people to solve problems that we see right in front of us. We actually have to be thinking about, let's walk backwards from 20 million and say, well, what does our organization look like at 20 million? And where are the simplification spaces? Where are the scalable places? Where are the places for us to not always be thinking about acquisition, but be thinking about offering more services? Let's be thinking about retention. That's a churn and burn environment in terms of clients. When you start to think about it like that, it's not just, oh, we need to have a vision for our company and we need to 10x our thinking. It's like, well, yeah, you need to do that. You need to be pushing yourselves. You need to be having those big goals. And at the same time, you need to back up and think about, well, what implications does that have for our target market and what implications does that have for our core business? What implications does that have for, you know, how we, how we deal with issues or how we simplify or how we scale? Like, it's always a complex web. You make one decision about one thing that, you know, everybody's telling you to do, which is, oh, have these big, you know, bhags have these big goals. It's like, yeah, but there's implications for those goals. We have to do the other work too.

You know, there a Couple things I think are really, really. I hear them again and again with clients over the years. The first one is the inherent, like, self delusion, right? We're all a little bit delusional, companies, individuals like that, and we see things from a particular point of view. It's not reality. It's a perspective on reality. It's a. It's one of many possible truths. It's not that it's inherently wrong. It's. It is, it is one view. You know, like, think about it. And then we bring into it our. Our own sort of emotional set point. I have a view right now. I can see you. I can see me. There's a room around me and behind me and that kind of thing. And I like this angle. I've spent time organizing the camera and the light and that kind of thing. And, you know, we stand in front of the mirror and we hold ourselves a little bit away. Maybe we suck in our gut or we pull back our chest or like, you know, whatever, and we. We get to a place that we can live with. But it is not the only reality. And if you could look behind, you'd see the thing that I'm most sensitive about is this thinning, like serious thinning of my hair. But from this angle, I look great. From this angle, my chin and my neck look great. Like, so think about it. And it's funny, right? Because, you know, we all like, I'm liar. I like the way I look at this angle. But there's other angles. And when you get an A camera on me in those places, which everybody else sees all the time, everybody else sees all those other angles of me all the time. But I choose and focus on this particular one that I've gotten where I'm comfortable with, right? And that's a funny, personal thing, but we do the same thing with our spot.

I mean, I'm just as guilty.

The same things with our companies, right? Our business, our department, our product. Product. We have a way that we get comfortable looking at it. And you went to the BHAG as well. The big hairy, audacious goal. Jim Collins term for a 10 year transformational goal. And people take on things all the time. And then the team pulls back and they're like, yeah, we don't really want to do that. I had this thing, like, with my wife, and I wanted to create a 250, $500 million company. And she's like, no, I don't want to do that. And she said that to me again and again. And I tried not to hear it for 10 years. And then it finally got to be too much. And she's like, no, like, we're not doing that. I'm creating a different business. And I think that's like again and again, a situation that we deal with. We find ways that we think we should look at things, that we want to see things, and we fail to grapple with what actually is or other possible ways of looking at it. And like you said, if you're like, we want to get to 20 million, but we're 750 and we're not at all designed for it and we're delusional about where we are. Right. Somebody. If you said, I'm here, I want to get there, and I gave you directions to do that, but you actually weren't here. You were over there. And you replicate, you replicated those directions. You followed them. You wouldn't end up where you wanted to go. Right. Like, the, the directions and the place that you are are entirely connected. And so, you know, a modern gps. Right. Is continually correcting the directions based on where you actually are. But in reality, we're not operating like that. We think we're somewhere else. We're trying to get to this other place. We might even be choo. Something that we don't want to do.

Yeah.

That our heart's not really in.

Yeah. I mean, honestly, I, I resonated with so much of what you said. In part, you know, the, the thinning of the hair in the back or the sucking in the gut. I was like, guilty as charged. But, but to your point, I mean, one of the things we, the reason we start with assessment and we're, we're obsessed about assessment on the front end is because there's so much, you know, if you, if you go hiking, you know, you go to, you're in San Francisco. Right. Like, you could go, you could go to one of the state parks right there and you want to go hiking. What's the first thing you look for on the map? When you see the trail map, it's the red dot that says, you are.

Here, you are here, you are here.

Right. And so much of us are concerned about like, yeah, but where are we hiking to? Like, what does the view look like?

Right, right.

So that's that, well, we want to be 20 million or we want to be a 250 million dollar company. Like, we want, we want that story for ourselves. But what we haven't done is figure out, well, where actually are we on the map?

Yep.

And so I think it's a really important process to get real with ourselves. Right. To say, like, actually, where are we? And so in the five facets, we look at culture, strategy, operations, story, and finance.

Yes.

We know that those are the five key aspects of every business. That is true for every business. Whether you're a solopreneur or a $500 million company, you have those five things. And what we see is that most organizations are good at two or three of those things, especially small business, not, you know, $500 million companies. But the small, small companies are typically good at two or three of those things. They might have a great culture, they might have a charismatic leader, a really good sales team, you know, and they're bringing in tons of business, but man, their operations are failing and it's causing a lot of problems. They don't have a very good strategy in place, but they're charismatic and they're interesting. It's like, well, man, if you could just figure that out, you could really see that story. It's like, well, if we just elevated these two aspects of our business, the whole thing wins, Right? Like, it's often two or three parts of any company that are dragging the rest of it down. And we create some misconceptions. We're good at a few things, Right? Exactly. Your example, it's like, no, we have a great culture. People love being here, sure, but you're not getting anything done and the company's not going to sustain itself over time. But it's a great place to work.

Right. When I start working with a company in the very beginning, we want to look at the strategy. We want to get the strategy kind of clear, but it's not done. Like every year, we have to update strategy in every quarter. We want to look at where we're doing on that plan and we have to make. I was talking just minutes ago to an east coast client, pretty significant sized business and their January and February sales are suck. And they've done some things to try to help the January. Well, they're good sales, they're just not consistent with the growth plan that they laid out. And there are some partner and systems issues that are affecting them. And, and we can't fix it that fast. Now. The outlook for the year is okay, but I'm like, well, you can't beat yourself up about that. It is what it is. It's happened the way it's happened. Do your best, fix it as quickly as you can. It's now we have to think about, okay, so what does that mean for March, April, May. Does it create a cash issue for us? Does it affect our financing, bank loans? Like, what are the implications of all that? Because now we have to deal with what happened.

Yeah. No, I love that you said that. Because in. In thinking about, like, why we created the five facets, there's really design elements and there's execution elements. Right. And so we think about, you have to align on the design aspects of your business, which is the who are we? What's it for? Who do we serve? Right. So if you think about kind of what I think about as like the golden circle of your business in terms of a design, you're looking at purpose, you're looking at vision, you're looking at target market, you're looking at core business. And then a term we use, we call strategic identity. And you talked about, like, getting in on the strategy, but those. Those five things have to be lined up, right? Because that's essentially. Well, if our purpose lines up with our target market, which lines up with our core business, which lines up with our strategy, we have all the major systems and forecasting, finances, if we have all that kind of swimming in the same direction, we're at least starting from a place of alignment right now. Top, we're aligned. Everybody knows that story, Everybody knows that narrative. And when those pieces are together, that's where we get enrollment, buy in, and engagement. From there, then you move into the execution elements and all those categories, and that gets obviously more detailed, more complicated as you work your day down. But, like, how are we executing that strategy? But you mentioned strategy, and I want to come back to it real quick because we, we've really used this concept of strategic identity, and it really comes from a military concept. And the military concept is core intent. And so just a quick example to illustrate what this means in the military version. You know, if you had a general creating a plan for a particular battle or a particular engagement back in the, you know, 40s, 50s, they'd say, all right, here's. Here's what we want to do, and then here's every step down the line in the plan. Right? And then what would happen is the first shot would get shot on the battlefield. And that plan was out the window. Window, right. Because nobody remembers the details. They're terrified they're being shot at. It's stressful, difficult environment to be in. Right. So what they did is they came up with this idea of core intent. And core intent is the general would say, okay, our job here is to hold the hill. That's the thing. Hold the hill. And then the plans would get more and more specific down the line. But what the soldiers on the field needed to remember primarily was hold the hill, right? And I think businesses kind of work the same way. And I want to give you my favorite example of a good strategic identity. So there is a gas station chain over on the east coast over here called Quick Trip. I don't know if you have those out on the west Coast. QT is another way it shows up. But when you think about a gas station, you're like, okay, well, what strategic advantage can a gas station have over other gas stations, right? Like, everybody sells Mountain Dew and Coke and has gas and whatever. Their strategic identity is clean bathrooms. That is their strategy of how to beat other companies. And if you think about it, what's the other reason you choose gas stations? Can I pee there? Right? Can I feel safe if I go into this bathroom? And so if you ever see a Quick Trip gas station, they are designed to have you enter into the edges of the buildings to walk into these big, beautiful, very well kept bathrooms that are always tiled, always clean. But it informed everything that they did. It informed how the building was designed, it informed where they focus their energy around cleanliness in the employee experience, etc. Etc. It's like, that's a good example of a strategic identity of like, this is how we differentiate ourselves from everybody else. Now let's talk about how our strategy plays down from there.

You know the, the word. You just said the word. I think that we focus on the most in strategy. It's differentiation, right? So how are you different? How is your Mexican restaurant different than any other Mexican? Oh, it's not really a Mexican restaurant. It's this and that and this. Okay, good, Clear. Right. Like, how is your roofing business different than any other roofing business? Like, what is it that's unique about you that we could really lean on and focus on and really be great at that? And that means, right, Being willing to suck at some things. That means saying, yeah, it's going to be like this. And we're not like, that's how it is. That's part of what comes with it. It's more expensive or you have to do it in this way or like, you know, and you think about all these great businesses and they are unique and they are different. Ikea, right, is a big, huge, successful, global business.

Yeah.

And I hate it. My wife loves it. And she loves walking through that rat maze of a store to find stuff because that is a path of discovery for her. That is an annoying thing that I have to do because I'm very objective, focused. I just want the nightstand for the kids apartment, you know, like, I just want an extra table for the entry to the office. Like, I'm like, so I can't stand it. So. But it is unique and different and they, they sell contemporary furniture for a bargain, right? Because they sell it flat pack. Because they make you walk through all that business, right? That is the way they do it. So you, you either figure it out and you accept it or you like it or you don't, Right?

Yeah. Well, the differentiator doesn't have to be for everybody, right? Like you're not.

Hopefully not. Hopefully you're focused on a little bit and they're willing. Like, you know, I'm looking at a Apple computer in front of me and I have on an Apple watch, and to my right there is an Apple iPhone. And so I'm very bought into the whole Apple. But I've got a different camera here because the camera isn't good enough in there. I've got a different mic here because it's not quite good enough for a show, right. So there are certain places that I've compromised, but the overall ecosystem, I bought into it and I love the bargain, right. Like, it works for me.

Yeah, yeah. What I think, you know, I love what you're saying because what I see then is once you have that differentiator, you have to actually execute the differentiator. You can't just say it, right? So again, this comes back to that systems piece of design and then execute, right? So one of my favorite examples of this is on the culture side. Most organizations have some variation of a purpose or a mission statement. They have some variation of values, right? And that is often, in my experience in working with hundreds of organizations over the last few years, it's a perfunctory exercise. Some people do it really well and some people do it because they know they're supposed to have values. And so they just did it on a, on a weekend retreat one time. And now those values are up on the wall, but they don't really mean anything. They don't really hold anybody to it. And it's not really strategically implemented into their organization. It's just a thing they did that one time because they knew they were supposed to. So what we want to do is make sure that when we're applying systems thinking, that we're thinking about the design, but we're also thinking about the execution of every aspect, culture, perspective. It's like, yeah, let's have a purpose, which is. Which is, why do we exist? Let's have a vision statement, which is, where are we going? Let's have value statement, which is, who are we going to be while we do what we do? And then let's make sure that those are things that we're living into. Let's make sure that those are things that we're executing on. So let's also add behaviors. And those behaviors should be controllable, which is what are the controllable, consistent things that we can do that make these values true, and they're based in reality. And I can tell whether you did it or not objectively. That's a yes or no question. Let's also have ritual, which is, what are the stories that we tell? What are the language? What are the ways we onboard offboard celebrate people? It doesn't have to be a thousand rituals. It doesn't need to be every day of the week. But where are the touchstone places? Where are those important moments where we celebrate and augment our culture on a regular basis? Right. Where people know, all right, walk into the office is where I'm going to experience it. So with each of the elements in your business, and, you know, I know you all do this as well, is to think about. Okay. So it's one thing to say it, it's another thing to be it. And so I think where a lot of organizations fall short is they know they're supposed to be doing this thing. Like, I know I'm supposed to have this big, hairy goal, audacious goal. I know I'm supposed to have a vision. I know I'm supposed to have values. I know I'm supposed to have these things. And so they do that exercise because that's what they're being asked to do. But what they often fail at is translating that idea, that concept or that differentiator into reality. And that bridge space is important.

Yeah. If you think about it. So you have these things that you're going to be great at, the differentiator. And the differentiators include the things like a brand promise that the customer experiences and expects. But then there's the operational things that let you deliver on that brand promise. The systems, the suppliers, the kinds of people, all the rituals around your business that allow you to create and fulfill on that on a regular basis. You at a profit. Right. And that's a key difference between, yeah, yeah. A business and say, a government organization or a nonprofit who is solely focused on that purpose, that mission and vision and whatever they've got without the same driver or need to actually turn a profit. And I would say it actually makes things better. And, and one of my favorite examples, and you know, he's become a little bit controversial but, but Elon Musk, right, has profoundly transformed human beings relationship to the planet and space because he's created reusable rockets. So instead of throwing away a 747 after you fly across the Atlantic, you could use it again. And, and that is just remarkable. But I'm not sure, like, you know, NASA sort of tried to do that with the space shuttle, but it was pretty flawed design and then, and it took them so long to get that done and they couldn't like keep innovating it. But he just, he's like, yeah, we're going to blow up some rockets, right? Not we're going to blow them up before we put people in them, but, but we're going to get them to where they're pretty reliable before we start to put people in them. And, and that is not something that we understand. Same thing true with the military, right? Military is not like how could I take that hill or keep that hill at, at a particular price. They're just like keep that hill right in the. And the main price they consider is the human cost. And the public, the political will support for something, right? At some point that becomes unsustainable. But it's not generally about cash expenditure that business forces innovation and efficiency on something because we have to turn a profit.

Yeah, yeah, absolutely. You know, and I think one of the things that you're raising for me, you know, in any system that you're implementing, you know, whether it's EOS or scale up or the five facets or whatever it is that you're implementing in your business, right, you have an operating system, you have these tools, you have these things and those tools and those things then are led by people, right? And there's a behavior aspect to what you're talking about which is, yeah, we've identified this differentiator. We know we have this plan to execute it, but then we also have to execute, right? And one thing we talk a lot about from a leadership perspective, we talk about leadership tensions and tensions in a leadership space is well, do we ideate or do we execute? Do we focus on perfection or do we focus on progress? Do we focus on the individual or do we focus on the team? Do we focus on authority or do we focus on enrollment? And the answer to all those questions is yes, it's okay well, every one of us has a bias. We might have a bias towards ideation, and so we're really good at designing things. We're really good at ideating. We're really good at exploring new possibilities, but we're not so good at actually getting that product out the door. We're not so good at actually holding the hill. We're good at knowing that that's what we need to do, but we're not that good at doing it. So from a leadership perspective, as we start to dive into an organization, we start to identify, okay, well, these are your real tension spaces. These are the spaces where your bias as a leader, your bias as a leadership team is actually costing your business the potential for profit or execution or whatever it might be. We don't, you know, if you think about that on a scale of 1 to 10. So do we focus on the individual or do we focus on the team? Well, if individual is 1 and team is 10, maybe you're an 8 and you really rely on the team. But you're leaving some individuals in the dust. Well, you don't need to be a one. Maybe you're a four sometimes. And then you can go back to your eightness, right? And it's like you just, you know, so knowing what that differentiator is, knowing what your design is, knowing the values are, et cetera, in some ways informs how you can navigate those leadership tensions as you're showing up in an organization. Well, maybe we need to choose authority a little bit more than we do. I'm. I'm 100, an enrollment person. Authority is difficult for me. Right. I don't feel comfortable. I grew up in the Midwest. I'm a big old softie. I just want to make sure everybody's okay. Right. And every once in a while, it's really important for me to be like, hey, you didn't get that done on time, and I need you to figure that out next time, and I need you to get it done by Friday. And I just need to pull on the authority lever every once in a while. But that's difficult for me. But that's a leadership tension. That's the thing. I have to choose, right? I have to have. I have to do that in order for the business objectives to happen. And so when we think about systems, it's. It's one thing to talk about the tools. It's one thing to talk about the areas of your business. It's another thing to talk about, well, who are we being while we do that work? And what does it require of us as leaders to be able to implement those systems and to sustain those systems over time.

You know, it's interesting, this notion of the random wildness, the human being, the human element in all of it, right? And the need for effective leadership. So being dominant, being bossy, being authoritative comes very easy for me.

You and I were leaders of something. We would actually balance each other out a little bit.

And I. But I have learned that it's really critical to keep that in check, that there's a couple times and places for it, right? And every other time it's destructive to the team, to the relationships, things like that. But there's a few key times in the beginning of things and in a crisis, right. Are really useful. When people are in crisis, they really welcome a very clear direction. But through all of it, right, there are these people who are not rational, who are psychological, irrational, and they act on their feelings, and their feelings and their decisions are shaped by the way they see the world, right? And that picture of the world they have. But the thing that's useful that you're pointing to is that leaders have a great deal of leverage over the way people see the world. And we do that with declarations, with promises, with crafting a new vision for the future that shapes and alters people's. We say we're going to create a reusable rocket, we're going to go to Mars, we're going to do this or that, and people are like, yes, I'm in. Just as if your actions and your outcomes are shaped when you say yes to a new job, when you get married, when you buy a house, when you do anything like that, when you commit your yourself to something against a plan and a vision for the future, you suddenly act differently and you start to get new outcomes. And if you think about that like the leader as part of the systems that you're talking about, right? Like the leader can shape things and they do it entirely with language, right? They use language in a particularly powerful way to affect people, right? That's the. That's the computer code. The software of the human operating system is language, right? We operate with language, but we make decisions in emotions, yet we can shape that with the language we use.

I totally agree. I mean, one of the leadership principles or behaviors that we talk about is champion the narrative. The narrative is that kind of golden circle I talked about before. Your purpose, your vision, your values, strategy. Your job as a leader is to be the champion of that narrative. And almost to an annoying degree where you talk about it so much that people are like, yeah, dude, we got it. We get it. Stop talking about it. That's when, you know, all right, I'm just starting to say it enough, right? Which is I have to equip you with the story, and I have to be the, you know, beat the drum every day of. This is where we're going. This is why we're doing it, and this is why it matters. And I can't wait to have you join me.

This is something Pat Lencioni has said. He said, when your team can do an impression of you, like, make fun of you.

Yeah.

Talking about the vision and the values, the culture of the company, you've begun to talk about it enough.

Yeah. You've just now achieved talking about it enough. Yeah, absolutely. And I think it's true, you know, to your point. Like, visions are specific. Visions are kind of pointing people towards something. And if, you know, they're also arbitrary. Like, I think about strategy, I think about vision. I talk about these things regularly with folks. And they're all invented. They're all invented. They're all made up, right? Like, we make up these stories. We say, oh, we want to do this. And, you know, we want to be a $20 million company that's doing X, Y, and Z, and we're fixing, you know, fixing the environment. It's like, great. Well, you just made that up. That's a thing that you care about. But you're speaking to something in me, right? Like, oh, I find my. I can see myself in that story. And it's like, well, if you don't have that story for your company, you're not providing the conditions for somebody to say yes to anything, right. It's like, oh, we sell widgets. And people are like, yeah, okay, fine. Like, now I'm just getting paid to do the thing that I'm supposed to do. So one of the things we talk about is it's not in organizations. It's not really about achievement from an engagement perspective. It's about alignment. Meaning, like, do the actions that I take on a regular basis lead us towards this bigger thing that we're trying to accomplish as an organization? And that could be a strategic thing. That can be a vision, you know, that could be Elon Musk's vision. Right. Of transforming the planet. It's like, okay, well, why am I, you know, why am I building this widget at my desk in a cubicle in the middle of an office? Well, because this widget matters to achieve that vision that we have. And if I can't draw the dots between that. Now I've got quiet quitting, I've got disengagement. I've got people who aren't interested in what's going on because they can't see the connection between what they're doing on a day to day basis and why it matters.

Yeah, you know, there's something that you spoke around there that I think is fantastic. So you're like, you know, there's meaning added, there's, it's all made up, that kind of thing. And it's really useful to realize you can make up, you can express a vision, a commitment, you can make it up, but you're also unconsciously making up things. We all are, not you, we all are doing. We're unconsciously make up explanations for our lack of performance in things, but we make up things that are often disempowering. We make up things that don't put any power in ourselves to change it. So we're like, well, this happens because the economy or whatever and like that, you know, like they become like excuses and then they end up, although they make us feel better, they ultimately disempower us. But if you could take everything and say, well, what could I make up? Like a likely story for why things are the way that had me as central to it, that had me being the one who had agency, who, who caused this. And if you could get that you caused it the way that it is, it's actually, it's a little depressing, but it is also very powerful because you could cause something else then. Right. And then you could make up the thing where this particular shitty situation that you were in right now was the perfect place to be for this great breakthrough story that you were about to create.

Oh, absolutely. I think it was, you know, maybe we'll have to check this in the show notes. I think it was Henry Ford who said, you know, whether you tell yourself you can or you can't, you're right, you're right.

Yeah. You had one other story you were going to share with us about an industrial real estate development company. Talk about that.

Yeah. So the time. Yeah, no worries. The. So I work with a commercial real estate company and it's. But they're in the energy space and so what they're doing right now, they're buying expiring coal plants. There's some new kind of government regulations that are coming out that are phasing coal out of the energy cycle in the United States. And so there are all these coal plants that are based in generally pretty beautiful locations. They tend to be on water, but they're kind of scattered all throughout the country. And so they're purchasing these expiring coal plants and transitioning them into renewable energy. So it's this really cool organization. And part of why, you know, I, I put this story forward is it's an incredibly effective organization. They're small, they're lean, they do a lot with revenue. A lot of them are engineers and they work in a remote environment. And what we recognized in the organization is even though they were pretty effective at what they were doing, they were creating isolation in the organization because they had internal communication breakdowns. Because this is an organization that kind of works all over the country, etc. They're remote. And so there was a little bit of animosity happening between the core leadership team, which was making a lot of the strategic decisions, and the people that were out in the field doing the work, because they never really felt like they knew what was going on or they never really felt personally connected to what was happening because they might go weeks, they might go a couple months without having a touch point with an organization. And so we did two things. We instituted what we call the rhythm of the business. And the rhythm of the business is what is a weekly, monthly, quarterly and annual meeting structure look like for you? What are you talking about? And how does information transfer north, south, east, west across your organization? So we put a rhythm of the business design in place. And number two is we implemented a universal project management system. We used, we, we tend to use ClickUp. If you're familiar with ClickUp. It's a really great, it's a really great system. But that would, then, you know, we'd put goals in, you'd have some measurable things. It's also a way to communicate progress on different projects. And so we created these communication panels. No one had any ill intent. They're all very good people. They all really cared about the work that was being done. But the system of communication wasn't in place. As soon as we put the system in communication in place and project management in place, you started to see the connection to the Overall goals change, etc. Etc. The team got very aligned. Everybody was all bought in on the strategy. And just this last year, the company sold for over $70 million at the outset and 120 million on the back end right after a three year buyout. And I don't think that happens if they remain in isolation. They don't have that communication. They don't have that story happening. They were making progress, they were doing great things. And the hockey stick happened. The hockey stick of growth happened. Shortly after we started communicating a little bit differently. And so, and the reason I want to share that story is it's not always like when we say aligning the misaligned misalignment isn't always tragic, right? It's not like your company sucks and it's on fire and nothing's working. It's often, man, if we just turned this dialogue a little bit, you'd see every aspect of the business elevate, right? It's not always a tragedy, it's not always everything's broken and what are we doing here and we got to start over. It's very rarely the case that that's true. It's almost always, hey, there's a part of our system that we are underthinking about or we are under qualified to address specifically within our current structure that man, if we just twisted that dial, we'd see a lot of things, we'd see a lot of things shift across the organization. So my call to organizations is really going back to that where are you on the map of like just there's nothing, there's no consequences to just discovering where are we, right? What's going on? What's the current situation, what is the current reality that we're facing? But thinking about that comprehensively across your system, not just where are we in sales or where are we in, you.

Know, this, this thing you have of where you check in on all these things. You call the rhythm of the business, we call the communication and meeting rhythm. Same thing. We start with the daily huddle. We have a weekly 4D meeting, we have a monthly meeting. We do all hands meetings, we have quarterly off sites, we do an annual strategy session. So we have all the similar kinds of things. And I have a conversation later today with one of our newer CEOs in our world whose meeting is, they're trying to fit it in when they have time for it. And that never ever, ever works. What you have to do is establish the, the baseline, when is the meeting rhythm and when, when is your weekly team meeting? Is it Monday or Tuesday? It's not going to be Friday. Don't ever have a weekly meeting on your Friday. Maybe it's like a wrap up Monday morning. Like you could go mid morning morning but like you gotta let people arrive in and you can't go too late because you want to affect the week. And so there's things like that that matter. But that's when it, and that has to become sacred. And then if you're out because you've got to travel, you've got a family thing or you've got a whatever, you've got a special trade show, fine. But the meeting happens without you. So like it or not, the meeting is every, whatever day on that day and that time and you start to schedule everything else around it and you start telling clients, yeah, I'm not available, then that's, that's, that time's already booked. You don't have to tell them it's for our meeting or not and be insecure about it. And we get so used to chasing clients and everything else and not protecting the thing that, that runs a business. It's so, so critical because you can't look at where you're at if you're not pausing regularly. And you know, you come out of, of a couple quarterly off site, you've got your plan, you know, your priorities rocks, okrs, whatever you want to call them. And then you go like three weeks and you haven't looked at it because you were busy with stuff and you're like, wait, what? We're not making it this quarter. Yeah, it's because you have no discipline, you have no rigor around your rhythm. It's like that's a fundamental system. That's one of the core systems of the business is the rhythm that you run things on. The heartbeat of the business.

I love that you said that. Rigor around the rhythm. I'm going to steal that, if that's all right.

Yes. Well, listen, we're running a little long. I just want to shout out if you want to talk to Dave, know more about his work, his company. The Evolve difference is the URL, the web address to go to the evolvedifference.com and it's there on screen. It'll be in the show notes. It's not too hard to remember. You could go key it in wherever you are now, just not if you're driving the evolvedifference.com and let me give some other shout outs again, if you want to find out about our coaching, our programs, our back catalog of things, our workshops, we're doing like a couple workshops every month now. We've got guru speakers, we've got coaching programs for every level. ScalingCoach.com is where to go find that. ScalingCoach.com is our website. And then I want to give shout out out. And thanks as always to my friend and mentor, Vern Harnish, who created the whole scaling up framework and the Rockefeller habits that came before it. And thanks to the folks at Storeon, Sell, Silvers, Cameron and the others who get our show ready and produced and out the door every week. Podfly who who edits our audio and show notes and and then thanks again to all of you for watching, for listening. We'll talk to you again next time. Keep Scale. Are you ready to turn your goals into daily wins? You should check out our Scoreboard software. Powered by Align, it's the official software for scaling up. With Scoreboard, you'll get an AI driven coach for priorities and KPIs and 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 Align 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.