Your Most Important Number with Lee Benson

Have you ever had a week when you're completely slammed, but somehow nothing actually moved? Is this one of those weeks? That's not really a time problem. It's a busyness habit problem. My new book, Busy Is Broken: Do Less, Scale More, is all about growing by doing less, not more. Read or listen to a sample chapter over at busyisbroken.com. That's busyisbroken.com. It's also on Amazon and other booksellers. There we are again. All right, our guest today, his boss told him to shut the company down. Instead, he took on $600 grand in debt and a few employees he couldn't actually afford to pay. He almost went bankrupt many times in that first year. 20 years later, he sold the company for way more than $100 million. Secret of all of it comes down to one number. What was his number? How'd he come up with it? What is your number? We're gonna get into all that and much more in just a minute. I need the music to help me get in the right mindset to have a good time with the show. Uh, it certainly helps pick you up. What is it that helps pick you up? Uh, hopefully you get all that and more from my upcoming book, Busy Is Broken. BusyIsBroken.com is the website. Busy Is Broken, uh, is available for sale wherever you buy your books. It'll be Kindle ebook, paperback, hardcover, audiobook, whatever you like. Go Amazon, Barnes Noble, wherever you want. Um, by the time you're hearing this, should be available for you. Uh, drops in stores and online September 16th. Lots of groovy things for the preorder. Um, some special extras, that kind of thing. You'll find all those at the website, busysbroken.com. By the time you're hearing this. Hey everybody, my name is Bill Gallagher, scaling coach and host of this Scaling Up Business podcast. Show comes to you every week and we've got a great guest for you this week. I'm going to bring him on now and I want to welcome to the show Lee Benson. Lee, welcome.

Bill, Bill, good to be here. Thank you.

Hey everybody, Lee is a serial entrepreneur. He founded about 8 companies and sold 3, including that exit for much more than $100 million. Able Aerospace sold to Textron Aviation. He's a Wall Street Journal bestselling author, "Your Most Important Number." That's kind of a key topic. He's also been featured in the Wall Street Journal, Forbes, CNBC, Bloomberg, and he's got "The Value Creation Kid" and "The Value Creation Family" coming soon. He leads this dinner table group, and he's the CEO of this company, Execute to Win. We'll tell you more about that. Lee, I'm excited to have you on the show, joining us today from his music studio in Phoenix, Arizona.

That's right. Yeah, again, it's really good to be here. And I worked out this morning for about 3 hours listening to a number of your podcasts. Oh, thank you.

You know, it's funny, like, like, so I had radio shows in the past and I had, and I had some radio stations with some other folks. And, uh, it's really great experience. And yet it's really different. Like the podcast is a, is a more intimate asynchronous kind of thing. People listen while they're working out. They listen while they're flying or driving or sleeping, or, you know, at all sorts of different times. And, and it's not like a radio, like they, you know, caller number 5, you can't connect them on in the same way. They're listening at their own thing. And I've had from a lot of people like, I was on the treadmill and I listened to your show and I had this thought. But we don't always hear back, and I— that's the one thing that I wish we had with, uh, with the podcast, that we could like have an open— have an open mic and connect to people.

Well, I think more of us should actually do that. I, I did leave some feedback, um, really interesting conversations. And you're right about podcasts, I can exercise really well and listen really deeply at the same time. So it's amazing. I consume books kind of the same way, listening to them while I'm on super long hikes, and, and again, listen, listen really well while that's going on.

Yeah, I, I first started listening to podcasts, um, once upon a time when you had to load them in on your player that I carried with me on my bikes and runs and, and even on my swims. I had a a waterproof player that I would swim with, and I would listen to podcasts for hours on end and, and all sorts of different subjects. I probably listened more then when you had all that hassle of loading them up than I, than I maybe do today.

Actually, you know, I think it's a really good way for everyone to continue to grow, you know, personally, professionally, all of that.

Yeah.

And so it's kind of part of my routine. Um, I, I think more people probably should do that and kind of embrace this let's keep growing in a way that will help us create more value as we go into the future. So thank you. Thank you for the conversations you're having. You've had a lot of them.

Thank you. Yeah, well, we're having one today. Later I'm in— tomorrow I'm in a podcast, somebody else's podcast that has been a friend for decades and has been a past guest of the show, Mike Chaput, who you heard an episode with and lovely human and interesting entrepreneur. Um, and it's like, it's great to go, go on and talk with all those. Now, uh, go back, uh, just because I'm curious now, and I know you played music for a long time. You have a, uh, some studio there. What did you play?

And tell us, I play guitar. Um, I have somewhere north of 50 guitars. Um, I just need one more and I should be good, and that seems to be a permanent state for me. It's like one, one more to be, but I, I buy them all to play. I don't collect guitars, and I started playing when I was so young, I don't remember not knowing how to play guitar. Um, was in bands through junior high school, high school, uh, right out of high school, the first half of the 1980s, I played over 1,000 shows. So, so crazy cool, all the experience. Um, I've recorded a few albums. Latest one was a couple years ago, it was called Landed. Um, turned out great. We played a big music festival down in Mexico about a year ago. And I'm in the middle of working on an instrumental, sort of mostly rock, but pretty eclectic guitar album. And I've got all the songs pretty much worked out. I'll go in the studio in August coming up here. And it's an amazing power hobby. I still make time at least 3 hours a day to play on top of being CEO of 2 companies and all the CEO coaching that I do. And I just love it. I actually get to do this stuff. Somebody asked me, because I have my own podcast as well, somebody asked me a week ago, What would you do if you only had a year to live? I'm like, I'd keep doing what I'm doing. This is so cool, but I like to do what I do for a living, what I do for hobbies, you know, all of it.

Yeah, uh, so many ways there, uh, to go with that. Um, that this idea of having something that balances you out and that, that is important to you, I think, is, uh, is one of the central things we talk about in my book Busy Is Broken. And I noticed many entrepreneurs cook for their family. I hear a lot of people play music. They— I surf and sail in particular. And I find like these, these are things that like help us to sort of recenter, change our mood, like, and music and dance are are super, super useful in all of that.

Yeah, 100%. And when I hear stories around, I need to do this to, to balance, or I need something else, why not shift into love what you're doing for work as well?

Yeah, yeah, yeah, yeah, yeah, for sure. Yeah, yeah, yeah. If you don't love what you do, like, no amount of whatever, then it's just a distraction.

And I think a lot of that's mindset because when, you know, to me, the scarcest commodity on the planet is emotional energy, positive emotional energy. And when mine's on 9 or 10, it doesn't matter what I'm doing. I'm super curious. Everything's interesting. I'm hyper-present. This is so much fun. And I get to hang out with people. But when it's on 1 or 2, you get a flat tire and it ruins your week. I mean, it's, it's kind of crazy. So I think it, I think it kind of goes to, I'm not sure what your thoughts are on that, Bill, but I think it goes to kind of mindset, belief structure. If you're always waiting for something else to be cool, then you're kind of, kind of done and always waiting. But every, every second of every day can be amazing with the right emotional energy levels.

You know, I'm thinking about not from like fixing or replacing, but like being multifaceted. So like I, I was working on an automation project with AI a couple weeks ago, and I got stuck and I started to have diminishing returns, and it was getting worse, not getting better. And in what was— it wasn't working, right? The, the app I built and what I was doing. And, and I, I couldn't figure it out. I started to get more and more frustrated, and I'm like, okay, forget this, I gotta go. And so I— and I went out surfing, um, and I do this thing called wing surfing most of all. And so I, I'm out under the Golden Gate Bridge, which as it happens is above my head on the screen here, uh, right now. And so I'm riding out into there and I see a whale and, uh, kind of breach and flap its tail right near me. And I'm like, oh my God, that's awesome! And then, oh, that's amazing! And then I had this thought, like, it's how close you are and how things are organized. Then I realized, oh, I hadn't organized the resources and the sequence of the thing right, and that was my problem. And so then I went back, uh, after I finished surfing and I was exhausted and all that, and I went, I looked at it, I realized, oh yeah, and, uh, that is in fact what I did. And then the next morning I fixed it all just fine and it worked. But I was stuck in chewing up hours and I need to step back, right? So I'll take a walk, I'll put on music, I'll cook dinner, I'll go surfing, I'll do things like that to change up the perspective. Because when your head's down, like, you, you can obsess on something and you can miss kind of the point sometimes. Right?

You can. I love the whole reset concept. I used to have completely exhausting days, you know, at work. And for a long time, I had a full-time martial arts school. Then I would like, man, I just don't want to go teach the 6 o'clock black belt class tonight. But by 9 o'clock, I'm ready to, you know, go dancing all night. I've got so much energy because of the reset, right? So I 100% agree with you. That's super important.

Here's the thing that's really— here's a guy who, for our listeners, viewers, Here's a guy who sold a company for north of $100 million, um, and he's built a number of different companies, but he's got martial arts, he's got music, he likes to go dance. There's a— there's, there's something to this thing about empowering and embracing all that. And I think sometimes we get so heads down in a particular project, and then that time becomes less and less productive. That is the focus of of my book. I'm glad you are giving some weight to it. Um, tell me, let's go back to your story. Um, so you, you take on this company, right? And I'd love to hear like what kind of a company it was, um, and the situation. But, but in particular, I'd like you to land on why did you think this was a good bet? Why did you think it was worth like putting yourself at risk and investing in this business that you were involved in? So Tell us about it.

Yeah, through most of the '80s, I played in bands and I made probably most of my money doing that. But one of the jobs I had in the late '80s, early '90s was as an electroplating operator. And we would put electroplating, basically putting metal on steel parts for engineering applications like repairing a bearing journal on a driveshaft. And the parts we worked on were typically parts that were coming off of aircraft and larger companies like at the time Allied Signal, which is now Honeywell. Would send us these things. We would put— we build up nickel on a surface to repair it. They would grind it, inspect it. We would charge them $300 if we were lucky, and they would sell it for $10,000 to Delta Airlines or one of their customers. And, and when I'm running the shop, I'm, I'm the basically the shop manager, general manager, and I've got 25 employees. Well, we only had one customer and they cut us off overnight. And my boss said, close it or sell it, we're done. And I said, well, I want to take this thing and go a completely different direction. So we had no money, no customers, hardly any equipment. And I started down this particular direction. And there were, there were two people left standing with me. And I said, hey, I want to do this, but I can't afford to pay you the first year. What do you think? I'll give you some provisional equity. And one said, it'll never work. We don't have money, equipment, or customers, but sign me up anyway. I just want to see what's going to happen. And the other one said, yeah, this would be great, let's do it. And we did so well, they started getting paid the last half of that first year. And the second year, we did well enough to where, um, they paid— we were paid back for all of what they didn't get the first half of the year plus, and they kept their equity. And the guy that said it would never work, he got a check for over $30 million, uh, 23 years later. So it worked out really well for him for his minority stake. And The other gentleman did incredibly well also. And there were, I guess there were 9 others that were multimillionaires that came out of that. And I, I over time gave employees equity when they were thinking and acting like an owner and getting results like that. But it was always provisional. They left for any reason whatsoever. There was a pre-calculated price for me to buy it back. So I always controlled it. They got the benefit if they were there, but I did not want somebody outside the company not bringing any value to be sitting there with their hand out constantly. And one thing I would say, what led to losing that customer— and this is, um, it's like an interesting story in, in, you know, ethics, integrity, uh, and all of that— but there was a buyer at this customer that said, I want an all-expense-paid trip to Las Vegas whenever I want it, and if you don't give it to me, I'm going to take all this business and put it in another supplier or vendor.. And of course, we said no, because that's a crazy, stupid, slippery slope to go down. But it was scary because here we were, that could shut the company down. And they, after about 6 months, figured out a way to get the work out and have another vendor do it. And that led to me buying the company. I assumed $600,000 in debt. I didn't have to— there were 2, 2 tranches there. One was just sort of creditor debt and one was management fee. Management fee was the biggest, was $400,000 of the 6.. And, and when I bought the company, I said, I'll pay it back only if I can pay it back and I get to decide that. And no interest at $3,000 a month. So actually fully paid that back over just a little over 11 years. And that, that $600,000 turned into way north of $100 million in the value of a business and 540 employees. When I sold it in 2016, we had 2,000+ customers in 60 countries. But it's interesting how making the right choice when something unethical comes up, when the easier one out of fear might have been to say, okay, well, what do you need, led to something pretty big. And it also led to 7 additional companies that I've started. I've had a total of 3 exits so far, and I'm fully in the game and loving it. But that's a lesson for all of us. Never never violate, you know, what your values are, what morally right is, ethics, integrity, all of that. And it might be a little bit tough in the short run because so many people out there are violating it and playing a terrible rigging the game game, but it's always going to be better in the long run for you. And so that Bill Gallagher's a giant lesson that I took out of all of that. And I share that with anybody that'll listen.

It's really great. And I think so often we compromise in 1,000 little cuts, right? Like we do a little here and a little there and we like, And then, and then you look back at it and you're like, wow, I've strayed so far. And, and you sometimes end up with something you don't love. Go back for a second. I'd love to ask you about the debt piece, but before that, what was the directional change that you saw with the company that you did? So you took it over and you said, I'm going to go do something a little bit different. What did you do that was different? What— how did you do that?

The incredibly obvious idea, probably to you, But we were just a job shop, you know, send us your stuff, we'll put some electroplating on it and send it back. We didn't care who did. We just meet the requirements and go.

Yeah.

Said, you know what, if they're selling a $300 basic repair that we do with a little additional operations attached to it, like machining or grinding for $10,000, let's go directly to the aircraft operators and let's start, you know, you think about strategy, let's start with where saving a few thousand dollars will really matter. Well, that really wouldn't matter or be compelling. Maybe it should be, but, but it's not relatively speaking to a large airline. But for a helicopter operator, that matters, especially a 1 or 2 ship operator. So we started hitting up the small helicopter operators and saying, hey, we can repair these parts. You don't have to buy a new $5,000 shaft or $50,000 transmission casing. We can repair it. On average for about 23% of the new part replacement costs. And in most cases, it'll actually be more reliable to last longer on the aircraft. And so that was really it. Let's go directly to the operator, skip the middleman. The middleman in this case for us was, you know, Honeywell or Boeing or Sikorsky or the others. And that was it. And so I guess here's, here's another thing most would say.

You went direct instead of the OEM or the parts um, the, the original supplier of, of the equipment, you went direct to the operator, the user of the gear. And did you have to add machining or other kinds of things, or were you just still selling?

Like, we had to add all of it in the beginning. We would just contract that out, but over time we brought it all in-house. And, and at the end, we were operating out of north of— when I sold it, north of 300,000 square feet of of space manufacturing, processing, inspecting. At the time, we were the largest captive electroplating shop in Arizona. But you could give us— we went from just doing electroplating and outsourcing basic grinding to you could give us a data plate with a serial number for a helicopter on it. We could build the entire helicopter around that data plate. And, and what's interesting about this journey is that most would say, well, I've never done that before. Why would I do it? We had to create an FAA repair station. We had our engineers, had to have all the right approvals, and we just kept growing. And my mindset was, how hard could it be? You know, we'll, we'll figure it out. It'll be a struggle, but we'll figure it out. And it was an incredible ride.

You know, I think a lot of entrepreneurs, myself included, started at something at some point when they didn't know any better, and they got into something and they would learn the lessons along the way, but they had a thing they told themselves that was like, how hard can this be? And they got into it. And, and of course, they find out there's plenty hard to growing a business, but there's also plenty that's not like that, uh, secret about it. Like, hey, like, you work really hard, you create some value, and you add something, you do something for someone in the world, and you, you find a way that makes it easier, better, like that, right?

But at the end of the day, um, all the real value is leaning into the hard. It's in the struggle.

Yeah.

So anybody that says, oh, I don't want to have competition, I want a niche, I want it to be easy, I want it to, you know, last for a really long time and not have to struggle, it's like, that's not possible. It's like, we, we only grow through struggle. And that's something I realized a long time ago. And it's, it's really hard starting a small business from scratch and, and, and running to get there. Even if you've done it before, doing it again is just as hard. You've got more experiential wisdom. You should be able to go faster, but it's still really hard. And lean into that because that's where you, that's where you grow. And that's really what it's all about. That's why I still do it today. Some have asked the question, why aren't you just sitting on a beach somewhere? So, are you kidding me? Like, this is so cool being on the front lines creating value in the world. And I, I'm doing it running a couple of companies, invested in a ton of companies, and like, I, I I'm assuming like you, I work with close to 30 other businesses. I have my own CEO mastermind groups called Execute. I do some individual coaching, but I love that. And I can keep 30-plus strategies in my head all at the same time. Took a long time to develop that. Like, if you, if you put yourself in the role you have today of one of your listeners is running a business or even what you're doing today, Bill, If you put yourself from, you know, 10 years or 20 years ago right into the seat with everything going on, your head might kind of blow off your shoulders metaphorically because, oh my gosh, there's all these things. But I love growing into it and being able to handle more and more. And what I'm realizing is I— what I'm doing today, which is super cool, but it's probably not even 10% of what's possible for me. And I think that's true for just about everybody else. And when somebody says anything about what they believe they can accomplish, by definition, to me, it's a limiting belief.

Mm-hmm. You know, I've always, uh, been one who just leaned into what was interesting more than anything else. Like, oh, I like that problem, that's an interesting thing. Oh, I want to work in that thing. Oh, I want to invest in that. Like, leaning into the things that are of interest to me, because it is going to be hard. So if it's going to be hard, I don't want to work on something that's not interesting, because when it gets hard, I'll just want to quit if there's no joy, no curiosity. Like, solving the problem is the fun, but you have to be interested enough in the problem to begin with and then to stick through it. There has to be something about it that seems cool to you. Like, you know, I like airplanes, helicopters, all that kind of thing, and I could just— and I love machinery, and like, I could be interested in that industry like you were just because I would geek out on the equipment. Like, oh, we solve this problem. Look, this part goes here and it moves there and this turns around that.

And yeah, I think that's right. We have to be passionate about it. It's got to be interesting. Yeah, I think it has to move the needle in the world in a really cool way. Or why, why do it at all? And I want— one thing I love about virtually every business out there is you get to work with people. So that's cool. You know, we're doing that in every business out there. They do their part to help families support themselves. Like, there's really good things in this engine that keeps the world sort of rolling, and I, I think some lose sight of it. I've heard a few of your guests on your podcast, you know, talk about, oh, my, my business may not be that interesting. I've heard people say that, and yet they're all interesting in that you get to work with people and you help families provide for themselves, and that is so cool. And one thing I definitely believe all of these conversations lately about AI and nobody will have, have work, and but you won't have to— if we take meaningful struggle away from, you know, humans at scale, we'll collapse humanity. We'll just collapse this civilization. We need it. Like, we need, we need— all of us need meaningful struggle to grow. That's, that's my belief.

You know, it's an interesting thing. So I, I've talked about this before. There's actually a little audiobook extra, um, that'll be in the audiobook where I talk with my son, who's an AI scientist with Anthropic, um, and what is his view and their view about, you know, the things that have come. And he's been in AI since he dropped out of college, and he built a thing called Midjourney, and then now he's at Anthropic, and he worked at another company called Cursor along the way, and he's been very involved in a lot of things. I'm like, so you all, Kim and the folks at Anthropic, on the science side, collectively kind of think that like all the jobs and stuff will go away, that's profoundly disruptive. He's like, yeah, in, in ways that I can't wrap my head around, just with a straight line progression of where we are now to where we're going. It does seem like a lot of the things that we're going to do all seem kind of pointless. And I'm like, so does that make you optimistic or pessimistic? Like, are you nihilistic about that? Like it's all going to end? Or do you think that that's going to bring on some utopia? He said, it doesn't make me either one, it makes me curious. The progression, the advance of technology is inevitable. Sometimes it goes very, very fast. Sometimes it's profound and sometimes it's subtle. But, um, like the— what comes of it is hard to predict. You could imagine certain things, but— and I, I kind of like that. Like, in general, I, I'm kind of with you. Like, human beings will invent things to struggle with, to work on, because it's our nature. So If AI takes a bunch of stuff away and we'll either do it as a, like an art kind of a craft level of something just to do whatever, or we'll just invent some new stuff to do because we need things to struggle on.

Yeah, I'm actually, Bill, pretty optimistic about it. I believe that if I just take the United States and I've traveled a lot of the world as well, but just take the United States, we're not even creating in my opinion, 10% of the value that we could. What if it was 20% or 50% of dream state, 80%? That would be incredible for the future of humanity. And so when I look at AI, um, it helps you go faster on what you're building or working on to create your assumed value.

Yeah.

So, so what, what's happening is everybody's getting to their assumptions around the value they want to provide way faster, whether it's going to work or not. Well, people really want it. But with everybody moving faster, we're going to be iterating on, on value for everyone. So we'll just, we'll go faster and we can create a lot more. So I think if we apply it right, it can achieve my vision. What I hope happens is that we're 50, 60, 70, 80% in terms of the value that we can create, we're actually realizing it. And I've heard some say that, you know, developers will work way less, they won't be as needed and everything else. They're actually working more in a lot of cases because they're so productive. They're staying up all night. I can't believe how fast we're going. This is so cool, the progress. And again, that's that whole part about getting to the, what they believe, their assumptions around value to be created that people will want way faster. And so we're just going to iterate faster, create value faster. Super optimistic. And we have to keep pushing back on things that are trying to rig the game and take value out of the world. And I— there's a lot of that too. And so we just need better filters to look out for it and push back on it.

Well, there is a lot of— there's a lot of noise and nonsense around, and a lot of people like sort of almost grifting on, trying to jump like, okay, here's a hot thing, I'm gonna just jump on it. But when I think about my own work, you talk about like that accelerating thing. And my dad was a PhD. My dad was a bestselling author, right? Last year I wrote a book. Uh, AI was very helpful in editing the book, not in writing the book, but in editing the book. So the, the ease of the process, it comes out this September. Uh, my dad was also a college professor. I'm doing a PhD right now. I also produce the show every week, and I, um, and I coach and I travel almost every week. So I coach, I travel, I have a PhD in the works, and I've got this book coming out. All of that stuff is kind of happening at the same time. And throughout all of it, our coaching work, all the show, like everything, AI is playing a significant role in helping us do it, right? It isn't recording a show. I don't have like fake AI Bill Gallagher talking to fake AI Lee Benson. It's like It's us. I promise. This is not a simulation. If it was, it would be far more polished than this is.

There is that, of course. Yeah.

It would speak in different sentences. Anyway, I think, and when I think about my clients, the ones that are doing it well aren't resisting. And they also aren't looking for like the magic bullet. They're looking for 1,000 little ways that AI helps each and every role. Not like, okay, we're going to convert the one core thing, like whatever. It's, it's broad. All the C-suite is using AI. All the team is using, or most of the team is using AI in some way all the day, every day. Those are the companies that I see advancing more. They're finding lots of— and because the things aren't— they're still emerging, right?

Yeah. Yeah, they are. And perspective, I think, is important. So for me, with all the companies that I get to work with, and including my own businesses, what's the value we're trying to create? How can tools like AI help us go faster? And that's it. It's not look at this cool tool. How's everybody else using it? And I've mastered this part of this using AI. No, what's the value you're trying to create? And can AI help you go even faster, more effectively? And that's how you use it. And the questions we ask, the problems that we're trying to solve for in this direction of creating more and more value over time, I think is the key. And there's a lot of AI experts out there that don't understand those questions, but they understand the tools really well. They don't understand the questions. I think that's the differentiator. It's how you're using some speed up what you're already trying to do.

So let's talk about the debt first of all.

Who—

how do you convince somebody to give you $600,000 in debt at that point in that age? Tell me, what's the story behind that, if there is one?

Yeah, the simple version is he was done. So he, he and his brother had another very successful business. This was so small in the scheme of things.. And what they would have had to absorb was $200,000 in creditor debt. So closing it, they would have to satisfy that. That's it. The $400 grand they never thought they would get back. The paper debt they were charging as a management fee. And so when I said, I'll assume the debts, I put my house up as collateral. So the, the creditor debt was on me. They walked away from $200 grand of debt. And what, what's interesting about that, I would hear from our common circles of friends where this guy would brag about how he stuck this kid at the time with $200,000 in debt and how smart he was for doing it, and that I would flail around for about a year and eventually go out of business. That's just what will happen. And of course, that didn't happen that way. And he walked away from $200K in debt. That was in itself a good deal when you thought you were going to pay for it. Got another $400,000 back. But it was interesting, uh, you know, first year, first full year was 1994. So this, this all happened at the end of '93. So first full year we did $360,000 in sales. It really felt like we just about went out of business at least 15 times. It was crazy, crazy hard. And it's a normal story, right, for a lot of, a lot of startups. The next year, more than double that. The next year, closing on $2 million. And so you fast forward to about '98 and we're cranking. We're over $5 million. I've set up a couple other companies and that's a whole other story. We're cranking along. And he came in and said, you know, I think because I taught you about business, you should give me 20% of everything you do for the rest of your life. Actually said that. And I checked it. I said, look, you know, we just did our CD release party for our Three Degrees West album. And I forget that there's costs in making the products, but we sold about $5,000 worth of CDs and t-shirts and hats and all that. So I should give you $1,000. And he goes, yeah, you probably should. And I told him, I'm never ever going to worry about you again. Um, I told him, I said, hey, you're landing on me as though you're maliciously opportunistic. I don't know where you're coming from on this, but I'm never going to seek your counsel or worry about any opinion you ever, you ever have going forward based on how this conversation went. And that was it. Last time I last time I saw him.

It is a danger that our— that our ideas, our grandiose self-worth, delusional, um, kind of thing can get in the way. Our ego can become unchecked. We can be like, ah, look what that guy's doing, man. I taught him everything he knows, you know.

Yeah, why don't you build your own value in the world and stop taking credit for everybody else's? It would be like, Bill Gallagher, we just had this great conversation, and then I find out 2 years later you started a business, and it was— I, in my mind, it was based on something we said. It's like, well, where's my part of that? Forget it. Like, I, I want you to do well. I want everybody else to do well. I want everybody to build their own momentum in, in the world, and it's a better world for all of us to interact with. And that's amazing. I don't know that that's the majority of people. You know, they— I think, I think we're experts. And on, on average in the United States, people are experts on criticizing everyone else. They're experts wrong with everybody, what's wrong with everything and why they should be here except for these things happened over there. It's like, yeah, yeah, stop it.

There's a lot of that. Yeah. And over-indexing on the idea like, oh, this idea is like there's a jillion and one ideas. Who knows which one is actually going to be valuable or not, but none of them will be valuable if you don't work really hard on it. And then work through all the little things that are between it and the billion-dollar value.

Yeah. And the work that you do with scaling up the coaching, everything else, I did a little bit of research on it. And I've met Byrne Harnish a few times. I've met all the players in the bigger operating systems, more popular ones that are out there. Coming up with what to do is relatively straightforward. In my book titled Your Most Important Number, on the chapter on strategy, I just say, You know, congratulations, you have a strategy. You're 3% of the way there because 97% is actually doing it. And, and that, that's the challenge because I look at it in 3 layers. You've got vision and, and strategy, like where are we going? How are we going to get there? That's sort of senior leader, you know, going through it. And if they're not good at executing, they don't have a really good way of actually getting there. But that should be the top. And then the middle layer, I call it the management operating system. It doesn't sound maybe that sexy, but it's, it's, it's so important. And it's, it's almost like a computer operating system. I love that metaphor. The operating system doesn't write, you know, papers for you or do work for you, but it ensures all the other apps work together and your computer doesn't crash, that they all work. Same thing in a company. The management operating system ensures that sales and marketing and operations and engineering and finance and legal and all that work together without actually crashing. And then the level below that to me is actually getting the work done is project management. Sometimes it's simple task management and other times it's really complicated Gantt charts with critical milestones and everything else all over it. But those three levels are really important. And I've really focused on the top two levels in the work that I'm doing, especially the management operating system to drive this alignment, accountability, collaboration, all the things that go in there. And then there are just, you know, thousands of tools for actually getting the work done beyond simple task management. But getting strategy and vision right, making sure the operating system is super intentional. And I've heard you talk about that as well. Yeah, wildly important. So I developed my own when I was building the aerospace business. I couldn't find anything out there that made sense. Even built our own internal software, an entire ERP system, Enterprise Resource Planning. Had a team of 8 working on it full-time for, you know, a decade and a half as we're building it. It was—

it's—

it's— they're still using it today, 10 years after I sold the company. But that's why it did so well. And it was not intentional. You're just kind of bouncing around, riding the wave of what's happening in your, your market, right?

Before we go into the one number and that, um, what was behind that, what that was, um, at what point, like, so you, you have this insight, oh, we could go direct to the operators of these aircraft and we could sell them the parts and do what we are doing for the other end chain and up the value and all that. Uh, at any point did you think, I'm going to create a billion-dollar thing, or I'm going to serve all the aircraft companies in the— or the operators in the United States? Did you— what— when did you have a, a big ambition about it?

Uh, the ambition never changed. It just kept taking bigger steps. And I think the number one job of every CEO out there is to continually and responsibly increase the value of their business. And when we were $360,000, I could see $1 million. When we got closing on $1 million, I could see $5 million. As we were closing on that, I could see $25 million. I could see $50 million. I could see $100 million. At the time that I sold it, I wasn't looking to sell. You know, they came and gave us a 21.6x multiple of EBITDA. And I thought, great, I can go do these other really cool things that I want to do. And it generated a lot of cash to be able to do it. And I'm super happy with the decision, but it as, as we were at that $100 million revenue mark, I could see a half a billion, like, no problem. It was always the next thing. It was never, I want to be a billion-dollar company, is I want to responsibly and continually grow the value. And as I grew and the leadership team grew and all of that, we could take, take bigger and bigger steps. And that, that felt like the best way to do it. And I've, I've talked to a lot of folks that have— we got $100 million or or that's it. You know, we're not— it's like, I don't understand those kinds of goals, like continually increasing the value of a business. And when I talk about value, I always look in 3 buckets. There's material value, cash flow, profits, you know, revenue, all of that. But it's also positive emotional energy value. And then there's spiritual value, which to me is about connectedness. So I've, I've always had amazing programs to connect and strengthen relationships among team members or customers, communities that we engage with. And doing all 3, and the emotional energy piece of it's more around the leadership development, how they, how they show up. Getting those 3 right always made the material side a whole lot more, which more resources, you can do more things that you want to do in the world. Hopefully they're good things.

So some years ago, I worked with a company that did tools for audio-related products and software tools. And when I met them, they, they demoed their tech for me, and I'm like, oh, this is impressive, and this is interesting, and this is a good growing category. And they were like, we wanna be number one in the world. We wanna be in all the products that do audio in and out. And they did become number one in the world. They're not in all of them. There were a couple companies that built their own tools, but they did get in an awful lot of tools. But I was struck by that, thing at that moment where they're like, we think we should be in everything and we think this makes it better, easier, faster for people, you know? And I love that, like the ambition of that and the, the ambition without limits in this case, not for like grandiose things, not around the financial number. They did make money on it, but it was more about the impact like this makes it all better. And so I'm always curious how many people have that And I, you know, again and again, I see like, oh, this makes something better, and we start doing it. And then we start to think, well, this could be like at some other point. And there's a point, a level of your vision. Sometimes it's stair-step. And I, so that's where it came from. Just wondering. At one point you had a right.

I appreciate that. And it's why you're growing matters. If it's about impact and being able to responsibly sustain that growth, because a lot of companies have grown so fast, they're— it kills them.

Yes.

And that's, and that's the end of it. So, you know, your point, and I'm trying to make the same point, maybe not saying it as well, it's, it's got to be for the right reasons. And, and take Dinner Table. I'm CEO of Dinner Table, dinnertable.com, a community of families raising kids that will create value in the world and intentionally create value as a family. We have 40,000+ members now. My vision is millions, and then I want to take it to tens of millions. Yeah. And what a difference that would make. So I, I'm thinking about that impact going forward too, uh, and I already have enough money. I'm good there, but we need more resources to even grow faster. So yeah, the, the why you're doing it really matters. Is it for the right reason because you believe it, or you just virtue signaling so people will send you their time and money, right? There's a lot of that going on in the world too.

Well, I, I, um, I encounter people all the time who have like a number. Oh, I want to get $100 million, um, or a billion, or there's some number that they are chasing, a financial number. Uh, or one sheepishly told me private jet money. Um, and I'm like, great. And then, oh, and I had a guy in Europe who was like, I want, uh, superyacht money. And I'm like, Okay, fine. What value are you willing to create in the world that that is a natural expression? What, like, how much value in what category, where are you going to create something so that the private jet just, you know, lands in your backyard? What is it that you're willing to do that makes that a natural thing? Because there is a point at which that's pretty natural. There's a lot of private jets in the world. Um, what value do you create that's? That's that for other people, for the world. Not like, how do I scrimp and extract everything from everyone? Well, what do I create that that is a byproduct of it? That's always the conversation when people come into us and they're like, we want to build for a billion. I'm like, great. So how many of whatever service widget, that kind of thing that creates what value are you willing to do, you know, to, to get that? And When you translate that, the interesting thing is nobody really cares about you having $100 million in the bank, or me or anybody else. Nobody wants to really make us rich. Um, you know, they love to come along to a cool vacation or let me buy dinner, but, um, the people want you to win when what you're doing is creating value in the world. When you're like, we are gonna make housing more affordable or improve energy in this way, or like whatever, people are like, yeah, come on, we want you to win at that. And that produces the byproduct. But just make you money, like, nobody cares.

No, no, they actually don't.

So if anything, they want to fail at that out of pure jealousy.

Probably, probably going forward, yeah. Yes, super important that we get that right. Why are we doing it? I'm always chasing, you know, what does it feel like to go through life? And my personal internal most important number is fulfillment. I don't think we can be happy 100%. There's going to be challenges, all kinds of stuff. I've had some ridiculously wicked health issues over the years, and it's amazing with that sort of physical and emotional pain can set you up to do even more of later in life, which gives me an advantage in some ways. But fulfillment growing every year is something that can happen if we're doing the right work. And that's what I'm always chasing. And being on a private jet and I've flown private a lot, I— that doesn't make me happy. It sure is convenient. It's like a time machine because I can have fun over the course of a week across the country or world. Right, right. But that's not what makes you happy. And if everybody look at me and see what I have is what you're— what you think work will fulfill you and make you happy. Anybody that says it does is lying, I think. So that, that's what I'm chasing— internal fulfillment. Is it— am I doing the right work? Is it going up every single year? And I think just like in business, you're really almost never stagnating. You're either sort of growing or you're shrinking. I think internal fulfillment's kind of the same thing. So we have to keep doing that work, which is amazing. That we get to do it. And you have to, you choose to do it, of course.

What, what is the one number? How'd you figure it out? How do you do it with other people? We've been teasing that for 45 minutes now.

Yeah, yeah. And I've heard you on some of your podcasts, you know, talking about, you know, one of the most important things for leaders is to simplify complexity. And, and I think that is incredibly important. So as we were growing our business, and I— it never felt like work. We were just taking the aerospace company example that you mentioned, up to about 130, 140 employees. I'm working 80 hours a week, years on end. And man, this is hard. It's fun. It's amazing. But why are some leaders over there doing really well, some not doing so good, some mediocre? Like, what are the differences? And how do I know what's going on so I can be a meaningful coach when I'm working with these leaders? And so I developed something called the MIND Management System, which was internal, never meant to sell it to anybody. It was Most Important Number and Drivers. And I looked at every single team—

Most Important Number and Drivers, got it.

And Drivers, MIND. Yeah, the acronym MIND. And And I wanted to be able to get the lay of the land with every team within seconds, minutes at most. So every single team in the organization had one number that did two things. Above all other metrics, it would describe the value that team was designed to create. And the second thing it would do is drive the majority of the right behaviors because pursuing a number can really help or really hurt a business depending on how they do it. So we would look at that. They would always measure other things, whether it was 5 things, 20 things, but they only measured other things if they could make the case about how it would help them make decisions to improve their most important number. So the most important number for the business, how would you value an aerospace business? Well, they were typically sold as a multiple of EBITDA. So that profit calculation was the most important number for the business, and we wanted it to continually grow over time. Then we went down to marketing and sales and engineering and finance and legal and, and, you know, customer service, all of it. They all had their unique most important number that did the two things that I mentioned. And when they, for every one of these numbers, where did you start? Where are you going? Are we on track or not? I could see red, green, or yellow, and every single team. So when I sold the company, imagine 64 leaders, 64 teams, and I've got this amazing dashboard and I could see red, yellow, green everywhere. I click on it. I know what their plan is for their most important number. I know what it is, why they picked it. I know the other things they're measuring to make decisions. I know the things they have they can leverage to improve that number, their drivers. And I know what they're talking about in meetings, and I can see all the actions they're taking. And I know in minutes whether or not they're just checking the box. So it made it so ridiculously easy to run and grow the company faster with that system in place. And you didn't have to learn a new language. Like a lot of operating systems out there, you learn a whole new language and everybody goes back to the financials to see how you did. I never wanted that. Let's just, let's call it what it is going forward. So that's why I developed it and it made it so easy to run it. So I reflect on the 80-hour weeks when I sold the business. I wasn't working more than 15 hours a week to run the business. And we were growing consistently 20-plus percent compounded annual growth rate for 15 years prior to selling with a really believable path to keep it going. And so I spent the rest of my time developing leaders, working with, you know, bigger clients on deals, airlines, helicopter operators around the world. So I just gave you a ton. You're kind of an expert in this area. So what's your— poke some holes in that.

Well, I— you called out a couple of things there. So you have this one number, and I would say that probably is most equivalent to What you might also have heard as the lagging number, the outcome-oriented thing. What's the most important sort of outcome of the business? In your case, the business overall was EBITDA, but it could be a BHAG, it could be gross revenue, it could be any number of other things that, that you might say is your driver. And because you could easily be focused on something that that gave you the multiple of the EBITDA. Like, you could be like, oh, the multiple's higher if we are doing, uh, some other things. So then you could be focused on what drives them all. So I don't know, like, you could pick, but whatever it is, you've got an outcome-oriented number. And then by department you had one. And then you mentioned drivers, right?

And these would be probably activity-oriented things in most cases or resources, leading indicators, all that we met, all the leading and lagging indicators that made sense, all creating a few numbers.

You talk about like deciding in seconds, right? A pilot flying an airplane, right? Uh, on takeoff, you don't— there's not a lot of time or brain space. So it's gauges green. I just see a bunch of green. And my needles are on green and I'm pretty good. And then I'm going to look at maybe airspeed. Okay, my airspeed is moving. So I know that that's good. And that tells me if it's flyable or not. And then I might call out V1 or rotation speed, and then I know when to turn. So I'm looking initially at, do I have a working engine? Is everything green? But I don't have time to interpret everything. Also on like, like short final, you're coming in for landing. There's a lot happening quickly. You want a quick scan of that business and figure out where it is to know what to talk about versus in cruise flight where you might spend more time looking at, okay, at this engine speed or manifold pressure, I'm in this amount of fuel and this headwind and this velocity over ground. I'm going to make my next landing. I can get there without running out of fuel. Right? That's a critical decision. Um, and my alternate, right? So those are different kinds of decisions that you would want to make, but it's about focus on a few things, simplifying down the complexity. We, in software companies, we see all the time where they can spin up a million different acronym-driven, um, uh, numbers around acquisition cost and long-term value and et cetera, et cetera, et cetera. And And then you— and then it's just too many numbers and you're like, oh, like, what am I even paying attention to? Right.

Well, with our— with our tests as we go through it, that doesn't happen. And how many companies have you seen where they're measuring all this stuff and that you ask them why and they say because they always did, but they can't articulate how they're using it to help increase the value of the business or the value that their team creates? So I 100% agree with that.

I worked with a very small business some years ago. They, they came up with their numbers. A lot of it was like industry standard numbers. We put them on a whiteboard. They met every day and every week. I came back in 90 days. They're like, you know, these things on the whiteboard, most of them don't make any difference for us. So I went over to the whiteboard with my, the dry erase marker, and I'm like, okay, how about this one? They're like, yeah, that number's good. And then this one. Well, no, not really. So we erased them. We went from like 12 numbers on the board to about 4. And we're like, okay, why don't you run these and then ask yourself what's missing? And then let's go and layer back in some things. So sometimes you, you brainstorm up your, your dashboard and then you, you might throw some things away either because you can't measure it or because it is not actionable. Like it makes no difference. Right?

So yeah, 100%. There needs to be a case for each of the numbers. And I guess stepping all the way back, when I look at the company, I think of it as a value creation machine. And I want to know that it's executing really well and continually improving. That's the operating system. And then put into that, I look at strategic initiatives. So what are the— we continually improving is a ticket play. But strategic initiatives are things that we can do to cause a step change in the results once implemented, stood up, whatever it is. So I'm interested in how well we're executing, continually improving, and implementing strategic initiatives within the timeframes that we laid out. And generally speaking, because I think these are really big things, rarely— and my clients range from startup to billions— rarely is it more than 3 that you're working on because they're really big. And I've seen strategic decks with over 100 strategic initiatives when I start working with a company. And I'll get it and I bake it out and say, OK, well, these 5 are actually strategic initiatives and all the rest of them I put in the category of please do your job. So let's work on those 5 and really get them done. And, you know, scale matters. Like you make little decisions when a company is big, you can lose a lot or make a lot. And there's one client a couple of years ago, we just changed a few things, went from well over 100 strategic initiatives down to, I think it was 22 or 23 divided up into, you know, different functions. And in that first year alone generated north of $200 million additional cash flow, just focusing on that, making a couple of changes. So it's, for me, it's just, it's such an easy way to look at a company. I don't want the complexity. I want to simplify it. I think there was a book in aerospace, it was called Lean MRO, Lean Manufacturing Repair Maintenance Repair Overhaul. And there was a quote in there, something like, simplicity on the other side of complexity is what we're all shooting for. And what that told me, and I've made that mistake a few times, is don't cookie cutter apply anything. Understand what you have, design simplicity very intentionally on the other side of it, and that's it. And once you Once you simplify it, then make that even more simplified going forward.

I think that anytime you can see simplicity where others see complexity, I wouldn't second-guess yourself. I would lean into that. Like, finding simplicity in, in a swirl of complexity is a really valuable thing to do, especially as a leader of any kind. We're getting long in the show. The book that we've been talking about, Your Most Important Number, on Amazon. You got a couple other books coming out now, but the Value Creation Family actually just released—

just released Value Creation Family in February, and it's doing incredibly well. Even we even had a— I think we've got a 4.85 Goodreads rating, which is really hard to get, but it's, it's going really, really well.

So Your Most Important Number on Amazon and Value Creation Family on Amazon or wherever you get your books. Um, books. Yeah, be everywhere, be everywhere. And then, uh, um, Lee's company, etw.com, Execute to Win, uh, is a place to go find out more about his work and see what he does. And, uh, obviously we share a lot of love for a lot of the same kinds of things. Um, across the board, from music to airplanes and, and so on. So it's been a real pleasure, uh, having you on the show today and, and talking through all the work you're doing and the amazing conversations.

It was great to be here.

A reminder, everybody, I got a book out now, uh, Busy Is Broken. I don't know if you feel like it, but I— for a lot of different reasons, uh, we get too busy. And then we're busy people that accomplish big things, but then we keep trying to be more and more busy and There's only so many hours in the day, and at some point you break. Turns out it doesn't just break you, your family, your relationships. It actually has a negative impact on the business. It impacts your team. It impacts the company. This trying to answer every problem with being busier, um, learning to step away has huge benefits, not just to you and your life, but to the team and to the company. BusyIsBroken.com shares the story of a number of companies, both my clients Some who did really well, including one whose hero complex erased $180 million in value. And so both good and bad, we tell the stories. The bad ones, we, we hide the identities. But, and some well-known public companies, from a couple guys who ran Disney to a woman who runs a rocket company that you may know. And then what are the 4 sins of leaders who keep trying to be too busy. What does it cost you? How did we get here? All that and more in the book Busy Is Broken. Go get it now wherever you get your books and, and then go to our website where you can get some extras along with it. Join our community, some of our events and things like that. BusyIsBroken.com, ScalingCoach.com. Thanks to Wanda in the background for getting our shows ready and out the door every week. Thanks to Claude for helping edit and produce the shows as well. Thanks to my friend and mentor Vern Harnish, who created this whole Scaling Up framework. We'll talk to you again next time. Keep scaling. Thanks for listening today. One last thing. If anything in this episode hit home, my book digs into it further. Busy Is Broken. Do Less, Scale More. It's all about how to stop drowning in work and build a business and a team that scales without you. Available right now with content samples at busyisbroken.com.

Go grab it.

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