12 Commonly Asked Questions About Leadership

Cameron Herold answers common leadership questions with practical frameworks for delegation, conflict management, and team development. He covers time audits, one-on-ones, daily huddles, and open-book P&L reviews to help leaders grow people instead of doing the work themselves.
Chapters
Our job as a leader is to grow people. It's not to do work. In fact, the best leaders delegate everything on their to do list and then spend the time growing people's confidence and growing people's skills so they can take on even more. So the best leaders are the ones that do less and grow people. So the whole idea with situational leadership, it is for the leader to be able to adapt their leadership style on a situation by situation basis for each person on their team. And one of the ways to do that is to make sure that you're using the correct style with the person that you're leading. If you're showing up as a really authentic leader, the person that's following you or reporting to you knows that you care about them. So if you just frame it with. One of the best ways for me to lead you and grow you and coach you and celebrate, etcetera, Is to know exactly what you need. I can try to guess what you need, and if you can try to guess what we need, we're halfway there. But imagine if we can merge that together so you're not showing up in an area of weakness that way. You're just simply saying, hey, I've assessed you one way. Why don't we see how you assess you? Let's chat about that and then we can move forward in me best leading you on this project. And I think when you frame it that way, every direct report is a really great response to it. What I like about the conflict management model is it gives us a framework and a tool to approach an issue in, in a safe way for the person that we have the conflict with. So if you're managing up and you're turning to the CEO and saying, hey, I have a problem, what you do is use the same model. Now, I ideally like to train people in the company on these models too, which is why I like to put everybody through the course is I like everybody to have a similar common language around handling an issue. So if you can say, hey, I've got an issue, I want to run through the conflict model with you, the CEO goes, oh, good, I'm safe. I know Victoria is going to use the model. It's going to be about this one issue. It's going to be about the issue, not me. Right? We're going to go over specifics versus generalities. She's probably racing to the conflict because he knows this, right? So that's the first thing is train everybody in this model to assist you in handling conflict. My wife and I Have one where we're like meatballs. And if you say meatballs, the other person starts laughing knowing, okay, we're having a problem. Meatballs means let's decompress, then talk about the issue later so that we can stay in the marriage and not just argue to be right. What's your meatballs comment? To allow the conflict model to be rolled out. And then what you would do is roll out the issue and say, when you suggested this to the team or when you wanted us to work on this project for the company and you told everyone we were going to, this is how it made me feel. It made me think you were only caring about profit or you didn't consider the communications or we were going to have to clean up all the mess. And I'm super frustrated with all that. What I need you to do is to come to me with ideas so we can walk through them. I'm not going to say no to them right away. I'll go through the who, what, when, where, why and how, and then we as a team can figure out how to roll that out to the team. It would have been easier, smoother, whatever. How do you feel about that? So just in kind of approaching it that way, and with that model, I think you're going to get a good response. At worst case scenario, every employee should do a time audit and an activity inventory every six months so that they and their leader knows everything that they're working on and approximately how much time they're spending on everything so that we can decide together and as a leadership team, where do we want to get the most ROI out of our three inputs? Every company only has three inputs. We have people, we have time, like days and weeks and months. And we have money. And our job is to get the highest return on investment of those three things. So you can sit down with an employee and say, hey, I noticed you're working on Project X for three hours a month. And while it doesn't seem like a big deal, we only want you spending 15 minutes on those two, two or three things instead of three hours because it's only going to pay this nominal return on investment. We'd rather have you spend two and a half more hours on this instead of that. So it allows you to approach issues and opportunities as a leadership team with some data points and to explain it to them. Secondly is it also allows the leadership team to take a look at what everybody works on and go, why are we doing all this stuff? Like, why are we spending so much time and so much energy on the critical few things when we should be spending time on the important many things. I think often companies don't spend enough time on the important many because they don't have visibility to all the critical few that everybody are working on. So I think that's why the at worst case every six months and at best case probably every three months and then on a weekly basis in your one on one meetings. And I cover this in the meeting section and in running one on one coaching sessions, those two modules. When you have a one on one meeting with somebody, your job is to balance three things. Direction, development and support. The direction is making sure that they're working on the right stuff on a weekly basis. So anyone that reports to the CEO, the CEO's job is to make sure those direct reports are working on the right things for that week. And then secondly, do they have the skills and the confidence to do it so you can coach them and provide the emotional support? That's what the one on one meeting is all about. Are they working on the right stuff? Do they know how to do the right stuff? What can I do to help them with the right stuff? What obstacles can I help remove so they can be working on the right stuff? But then you shouldn't be kind of catching up six months later going, wow, why are they doing all this stuff? It's because we didn't have that right system, usually around one on ones and around goal setting. The reality is if you set an employee down to start time auditing themselves for a two week period, they're going to spend five hours doing a time audit at like 25 bucks an hour multiplied by all the number of employees. Did you really intend on spending five grand on that stupid audit? Whereas what you really need to know is like, what's all that you do and how many like do it in an hour. Give me like spend no more than an hour every three to six months and do a full audit for me. So Parkinson's law says that work expands to fill the space that we give it. It's almost the same as if I said to, let's say that I'm going to be coming down to Mexico and you're like, oh my gosh, Cameron's coming to town. Can you organize a dinner for Cameron? It's a business dinner. Well, your assistant could organize like the biggest business dinner at an unbelievable steakhouse and we'd have like wine all opened and decanted. And meanwhile what you meant to say was like, order some healthy food. Cameron doesn't Drink and we want to have a budget of like 70 bucks. They'd have an amazing dinner for $70 because you gave them a different container to do it within. And I think often as leaders, we don't tell our people how little time we want them to spend and how little money we want them to spend so they end up having a bigger container. So when I'm going to get someone to do a time audit, I'm going to tell them I want you to spend no more time doing a one hour time audit. Here's what I'm looking for is the outputs and here's how I'm going to use those outputs with you. Everybody goes through hard times, but there's also stuff that we have to do as adults to push through those hard times to then decompress when we're not in it right in the day to day. So as an example, I have to be on this call today. I have clients showing up on this call today. I made promises to be on this call today. And meanwhile, 27 hours ago, one of my closest friends died in a very sudden death that no one knew was coming. And I'd rather not be on a call, but I'm not going to cancel. You just don't break core values. You deliver your promises, you show up with integrity because that's what you do. And then as an adult, I get some help on the side when I can. Like I'll go for a massage, I'll go to the gym, I'll decompress, I'll talk to a coach, I'll talk to my friends. But that doesn't allow me just to show up late or be sloppy or unshaven or whatever, right? So you have to sit down with them and go, I know you're going through some hard times at home, I'll help you with that personally. I'll give you some money, some budget, some time, whatever. But showing up on time and opening up the store on time are two things that actually if you can't do, we have to hire someone who can, which means I'll still care for you, but you won't get to work here anymore. So can you deliver on the basic core things or do I need to find somebody who can have we got that clear. So you need to have that come to Jesus meeting with them that this isn't okay. Breaking the core values are not okay, right? Those are discussions you have with employees and you go, look, I don't care that you're the best salesperson in the company. If you keep breaking this one core value, you're going to get fired. So as leaders, we have to be good at having those discussions. Gen X was good at it. Baby boomers were really good at it. The traditionalists were amazing at it. They sucked at the empathy and they sucked at being nice humans, but they were really good at having the firm but fair, tough discussions. Gen Y have gotten bad at it because a lot of the, essentially the second half of Gen Y grew up with participation ribbons. Like, hey, you came ninth, here's a ribbon. Or, hey, you came 12th, here's a trophy. So we got so bad at not having to deliver or deal with conflict and deal with reality that we're doing it. And a lot of the Gen Y leaders struggle with having that come to Jesus meeting. So you need to have that meeting. You need to decide as well what's more important, living the company's core values, delivering on the base levels of expectations or caring about a person. I don't think you're running a charity and I think you can have both. So the discussion becomes, do I need to fire him or move him into another role or. Or get somebody who can handle that? But you also need to have that come to Jesus meeting and get good at that. As I call it, just being firm but fair. It's no different than how I raise my kids as a dad. Right. I love my kids. They know that I love them. I tell them I love them. They've seen me cry in front of them. We hug all the time. Even though they're 21 and 23 out. Like, they get it. They know. And I am very hard on them and very firm on them because there's some base level of stuff. I never raised my kids and paying them an allowance to do chores around the house. And that's what it costs to live in my house, is you do chores. It's part of being in the family is we do stuff to actually kind of help the family out. So if you're not able to do that kind of stuff, then, yeah, you're not getting allowance. Daily huddles are very powerful. The key is to keep them no longer than seven minutes to run them at an early point in the day. I usually like running them at either 11 o' clock in the morning or 2 in the afternoon. Right. When the energy level is dropping. And try to structure it in such a way that you're getting departmental updates or business updates. You're including good news from everybody. Absolutely. Over video, over zoom works really well. And even just have people stand up even if they're on Zoom. I mean, there's a huge difference between sitting down, you know, and standing up for a video. It doesn't take people very much effort to get off their ass for seven minutes and stand up. And it changes the energy and the focus. Daily Huddles are very powerful for keeping everyone on the same page, sharing ideas and collaborating for celebrating good news in a way that's different from a Slack channel. And the fact that you can see the energy, feel the energy, see the other people is really powerful. And then more than ever today, where we're working from, you know, these remote offices and multiple offices and working over Zoom, there's often people on your team that you don't see more than six minutes over the course of a week, you know, or 30 minutes over the course of an entire week. Daily Huddle is another nice touch point as humans that we get to reconnect. So I think there's huge value. There's. The key is though, don't let it go any longer than seven minutes, right? If you let it go longer than seven minutes, that's really when they start getting really disruptive and then also not trying to get everyone to talk. For some people, they're doing the same task day in and day out. It just gets really struggle for them to talk. But they can celebrate good news and they can share ideas. I don't like forcing it because for a couple reasons, once you get past 20 or 30 people, it's impossible to have everybody speaking in the seven minute mark. Right. So, you know, 1, 800 got junk. When I was leaving as COO, we had 248 people in the head office. You just don't have time. Right? Even when we started Daily Huddles, we had about 20 employees. You really don't have time to have Everybody speaking with 20 people. Even if they do 20 seconds each, that's six minutes already seven minutes. So you don't have the time for it. So I like getting departmental updates or business area updates over the course of a week, maybe marketing reports on Monday, Finance Tuesday, etc. And you can try to get people contributing for their business areas and cycle them through. The other thing that when you're going to start a daily huddle or when you start initiating any of these meeting rhythms is the employees are going to think that you're not going to stick with, going to give up on it. It's going to feel, feel awkward and it will so own it and just say, by the way, we're starting daily huddle. It's going to feel awkward. It's going to feel stupid. When we did it at 1-800-got junk for the first six weeks, people thought it was the worst thing ever. Brian and I were pretending that it was going well. And then we'd walk out from huddle and go, that what do we do? But like, every day we would admit that it and we'd try to make it better. And then after three weeks, four weeks, it just started getting a little bit better. But we had a head of it is like, I don't participate. This is communism. This is. And we're like, roman, dude, like, it's going to be okay after a month. He was loving huddle, right? But it takes time to get through those cycles. And 1-800-GOT Junk has been running a daily huddle for 23 years and they've never missed a day now, right? So, yeah, this stuff really does scale. And we started it when we only had 20 employees. Our job as a leader is to grow people. It's why I believe that the invest in your leaders course is for everyone who manages people inside your company. Any manager's core job is to grow people. It's not to do work. Any manager's to do list does not have their name on it, right? Like, Shayna's to do list doesn't say Shayna's to do list. It says to do list. Kate's doesn't say Kate's to do list. It just says to do list. So we get to delegate all the stuff on our to do list. In fact, the best leaders delegate everything on their to do list and then spend the time growing people's confidence and growing people's skills so they can take on even more. So the best leaders are the ones that do less and grow people. If we're going to be doing less and growing people, our job is to make them think for themselves, too. So when somebody says to me, what do you think? I'm like, I don't think it's your job. What do you think? And they go, I don't know. I haven't thought about it. Okay, go away and think about it. Come back in 30 minutes. Tell me what you think. They go away. They come back 30 minutes later, you go, what do you think they tell you? And you go, well, then do it. And they go, what do you think? It's not my job to think, it's your job. And I will literally say that to people until they're sick of hearing it. And then all of a sudden, they go away and they start making decisions. So I remember when my youngest son, he's now 21, when he was 15, he asked me to make him an egg one day. And I said, sure, I'll make you an egg. I walk into the kitchen, I go grab two eggs out of the fridge. He goes, I only want one egg. I go, I know. I'm making you an egg. You're making me an egg. And he started laughing. He totally knew what was coming next. So I might grab the frying pan. Bottom drawer, he gets a frying pan, get some butter, about this much, put it in the frying pan. Like, I literally taught him how to fry a freaking egg. At the end, it's like, okay, we each have our egg. We sit down and eat our egg together. I make him wash up, and I go back to work. I didn't even want an egg. What I wanted to do was teach him how to make an egg. And what he wanted was to have an egg made for him. Well, my job is to grow him into a young adult so he can get out of the house and we can still have a good relationship together. I come back in the next day, he's making an omelette. I'm like, what are you doing? He goes, I'm making an omelette. I'm like, where'd you learn how to do that? He goes, well, I knew you weren't going to make one for me, so I looked it up on YouTube. Mission accomplished. So at any time they're coming to us, that's our job, to elevate ourselves and to grow them. On the area of delegation, when you're delegating to someone, our job is to tell them what we want back, how little time we want them to spend on it, how little money we want them to spend on it. We want them to show them what complete looks like. We need to know from them, what kind of style of leadership do they need? S 1, S 2, S 3, or a 4? Like, do we need to show them exactly what to do? Give them the plan, talk about the plan, get them to create the plan, or just delegate and walk away? So we need to think about the level of style, leadership, because often what we get back is because we delegated to somebody and they don't know how to do it. So then they spend all week struggling. And then the last part is, is do they have the skills to project, manage it, to make sure that they have the time in their calendar to do the work that needs to get done, to get us back on time with what we need back. If they don't have that skill level around project management and time management, our job is to grow them, including sitting down and maybe developing the plan with them and putting the actual parts into their calendar to go. You don't have time to get it all done by Friday at 3. And they go, you're right. Tuesday at 4. Perfect. Tuesday at 4. Don't miss it. And then our job as a leader is to show up midweek and say, how are you doing on this project? Do you need anything from me? But it's always there to not following up, to make sure that they made their bed. But what do you need from me so that you can deliver on your promises? The difference is we're not nagging them to get their work done. We're trying to find out what else they need from us to deliver on their promises, deliver on their core values, deliver like, right. That's all we're trying to do. And that's very different. What managers tend to do is we tend to nag our employees on their projects and follow up all the time. We're treating them like children. Our job as children isn't to nag them to do their basic stuff. It's to say, here's the basic things. What do you need from dad? Just start delivering on these basic things every week. Otherwise we're going to have to renegotiate the use of things like wi fi and car and, you know, food. Let's say you've got a head of IT reporting to you and you're not really that great at it, but they report to you as the CEO. Your job is to make sure that that head of IT has an IT mentor from outside the organization who can mentor them or they have a network that they can plug into, like the CEO alliance where you can plug in with other CEOs. Maybe they plug into another CEO. So your job is to grow their skills, grow their connections, grow their confidence. But it's not by you doing it all for them. Right? I'm not my son's soccer coach, but I make sure that he has a good soccer coach if he wants to play soccer. So I can help him with organizing it and then he can just show up to his soccer coach. Your job is to make sure they have coaches or mentors or skills or confidence and you can actually get outside providers, outside consultants, outside books, et cetera, to grow them again. It's why the invest in your leaders course is so good for Anyone who manages people is. It gives them skills and skills, give them confidence. And if they have more confidence and more skills, they can take on more responsibility, which grows their confidence. That's what I've always done as a leader is how do I grow my people's skills, confidence and connections? Because once they have all that, I can delegate even more to them. Foreign It's a combination of a few of the modules in the course. So I will say that it is situational leadership, time management, project management, and maybe delegation, maybe interviewing. The ability to lead and grow other people for sure. Right. As soon as you can move into that role as a coo where you can grow their skills, grow their confidence, grow their connections, you can collaborate. That's critical. It's also really good on the project management. Time management side is just how do we organize the chaos of all the stuff that has to get done? How do we communicate to the rest of the leadership team in business areas to ensure that we don't have any resource allocation issues? Where you have like everybody needs OPS for the month, but OPS only has so much time. So it's managing that stuff is really critical. Interviewing? Yeah. I mean, if you're not great at interviewing and hiring, it doesn't matter if you can develop or coach people either. It's astounding to me how few hours any manager has ever spent on becoming good at interviewing. When you think that we have all interviewed and hired people, you've got to be able to show the organization that you can generate three to four times your cost in terms of gross margin. I think that's true of any, any leader. So if you're going to make $300,000 a year, you have to be able to show the company how you can generate $1 million in gross margin for them. And if they're a 40% gross margin company, that means you got to generate two and a half million dollars in revenue to have a million in gross margin to pay for $300,000 salary. If you can create that kind of an argument and a plan, you win. Second thing is the title that anybody gets in operations should be tied to a four or five core things, the amount of strategic insight you can bring to a company. So if you can show up being a strategic player, there's value there outside of a normal salary, the level of autonomy that you can have in running your business. So if you show up with these, all these skills and you're certified in all these skills and you've built companies in the past, you've run Teams and you've even been around the industry that you're in, you can show the CEO all this value. They're like, holy, I don't even need to manage you. You're like, no, you need to step out of the way and let me run. There's a lot of value in that. The amount of P and L responsibility that you can have. So understanding a budget, understanding cash flow projections, not necessarily the balance sheet, but certainly cash flow and budgeting and being able to make decisions around planning is critical. Then there's the amount of people that you can bring into the business with you. Right. The people that you've got either connections or subcontractors or employees that you can bring into the organization, those are super powerful. And then the roles or responsibilities that you have, do they really describe a CEO or do they describe more of a VP Ops or you know, director level? Right. So what's the level of tasks? That's really what predicates your comp. You could have a CEO of a small company, but they're really more of a director of operations with a big title. One is, I think that they have to be really good at connecting with people via video. Like they've got to have good energy and, and have good conversation skills. And how, how are they just communicating, collaborating and hanging out and because they're going to be managing, they'll be way more effective trying to do that over video than showing up in person all the time. I guess it's partially number one. I think they also have to be really good at having a life and, and having fun and connections outside of work so that when they're on the road they can get exercise, stay healthy. They're good at going to a gym or they're not just showing up and going to a restaurant and eating crappy food and drinking and going to sleep in the morning, rinse and repeat because you're going to have burnout. So I think you're looking for this healthy mind and a healthy body kind of person. The person that's. When they're on the road, they like parking the car two and a half hours and going for a quick 40 minute run and then coming back and driving the last two hours. Like those kinds of people I think will perform really well on the road because they're not showing up burned out in their job, they're showing up and they're inspiring others. And that I think is powerful foreign. It's almost like as a parent, our job is to grow our children, but we don't have like a weekly meeting with our kid, right? We're always coaching them, we're always praising. We're always looking for opportunities to help them. We're always looking for ways to grow their confidence. So if our job is to grow our children, it's an all the time, always. If our job is to grow our direct reports, it's an all the time always. So it's being cognizant that coaching someone is also praising them and cheering them on, right? Catching them doing something right. So it's always looking for those opportunities to go, hey, great job. Attaboy. This was amazing. Good job on living that core value. That's an all the time moment. Coaching is not just the showing them how to do something better, right? That's only one aspect of coaching. Coaching is also applying situational leadership properly and knowing at times just to give them the project and not even ask them a question. When my kid was five years old, me coaching him on riding a bicycle is very different than coaching him today on riding a bicycle. Like if I even mentioned good job riding your bicycle to my 21 year old, he'd think I'd lost my mind, right? But when he was five it's like awesome, good job. Hey dad, he's riding a bicycle. Here he is. Like it's a very different coaching. So it's, you're always coaching. If you're coaching in a group, which we often are, the key is to make sure that you are heavy on the praise. It's kind of the sandwich. The there's two pieces of bread for the in between. You've got to be very heavy on the praise in a group format so that the person feels safe and loved and confident that look at all the good stuff I'm doing. Because if you're only showing them the areas to improve in front of their peers or co workers, you're going to destroy their confidence, right? The same with a kid. You can take a kid into baseball and go, Johnny, awesome job. Great hit, Johnny. What the man, you hit it so good last time. Get your together, you got to do this better. But you're crushing it this morning. Like the coach is always cheering them on and giving them a little bit of crap. But they've done it in a safe space, so there's a little bit of that. Art too is just being careful with the constructive criticism in a group format. It's why if you, if you think about those modules, how they're combined, you have situational leadership coaching, one on one coaching, classroom teaching and Delegation are really tightly wound. Those five, project management and time management are right in there because you're always a lot of the time you're coaching and problem solving around that kind of stuff. But those five and two are really very tied together. Running meetings aren't, running interviews aren't. Conflict isn't like those are all kind of on their own, but those others are all very, very strong, strongly correlated and tied together skills. Make sure you go to that employee and say, great job coming to me and showing me the stuff that you're not getting to right now. That takes a lot of courage and strength for you to open up that way. A bubble. Ooh, keep doing that. That like, gives me a lot of confidence in you as a leader. Got to have that discussion with them. And by the way, if you can ever do that in front of other people, they're going to blush and feel a little bit awkward, but they're going to feel really proud of the fact that you just called them out in front of a whole bunch of other people on a zoom call. You need to have clarity at the leadership team level. What does your org chart look like three years from now, two years from now, and 12 months from now? So that you know where you're going and where you're hiring and when you need to be hiring those people for? So that everybody knows we're going to be hiring people. But it's like on this path, we need to get our managers and leaders much better at saying no, saying not now. Coaching their team, getting more results from their team, controlling Parkinson's Law with their team. Right. And often especially early stage managers, their answer to everything is add more people. And that's often not the answer. It's kind of like the government's answer to a budget is print more money. As a homeowner, we can't print money. Like we just get what we're getting right? As a business, you can't really print money. We can try harder, but you don't just get to like have more money. Like the government tomorrow can just say, oh, we have more money because we just printed it. That's kind of how managers tend to act when they're first time or early stage managers is they just think they hire more people to do work all the time because they don't understand the P and L. They don't have a CEO saying no to them or not. Now we're not giving them the skills around financial management and they don't know how to get results through others. So their answer is add more people. So we need to sit down with them and show them how. Let's do a time audit. Let's get rid of and do it in an hour. Let's do it in 10 minutes. Actually, let's. Let's say no to a bunch of stuff that we don't need. Or no, we're not actually not going to hire somebody. In fact, you're going to fire someone when you really get into that kind of mindset. Or what can we optimate or automate inside of our business? What are we using Zapier for? Are we using any integration? So sometimes being aware that these things exist and to push our team around that stuff. If that your team is good at saying no and they're good at getting results through others and they are good at optimizing and automating and we are truly. We just don't have enough hands. I really do have empathy for people in business that are truly overworked and truly overwhelmed because they really are handling too much and we just don't have the systems or ability to automate. Then, yeah, we need to hire. But then it's us as a leadership team also having a system in place to say why are we hiring the person? What are they working on? How much time does all that stuff really take? Is it a full time hire or part time hire? Can we hire offshore? Do we have to bring it in wherever we are? Can we automate any of these stuff? Like it's really taking time to make a decision on every 50,000 or $100,000 person we're hiring. Because often we don't spend the time on that. We spend one minute saying yes to a $50,000 person. But we would never spend one minute making a $50,000 marketing campaign decision. If you're going to spend an hour on a $100,000 marketing campaign decision, to spend an hour on $100,000 hiring decision, what are we getting? What are and teaching your team to do that kind of stuff. If you have to hire the people, then the question is why did we not know this is coming? What can we do at the leadership team level? To know what our plan is 12 months out, to know what our hiring plan is 12 months out. And to be already reverse engineering that we shouldn't be bumping into the fact that we need random people all the time. That means that leadership doesn't have good foresight around planning and hiring. So right now you're coming into the planning period in October. Every single company's plan and goals for 2025 should already be done by the end of October. By the end of November, your budget and your staffing and hiring plan have to be locked and loaded for the entire 12 months coming up so that you can actually December 1st start thinking about all the stuff that you're starting January 1st. But that means a budget, a hiring plan, all the core projects for the 12 month period, and leadership team signing off on all that stuff. For P Ls I would go on YouTube and look up just like basic how to manage, how to read a P L, look for basics. I would go on ChatGPT, just start asking some questions around that and watching like any short three 5 minute videos. If you spent 30 minutes and you watched 10 different 3 minute videos on understanding the P and L, you would be light years ahead of where you are right now. So what I do is I try to give open book management to my employees so it would sit down with a leader. So when we were building one, 800, got junk every single month we gave all employees a copy of the P and L. They all came into one of the meeting rooms, everybody got a paper copy of the P and L. And we reviewed the P and L with them line by line and we explained what every line item meant. So we showed revenue and we explained where it came from. And then we talked about our cost of goods sold, which included credit card fees and the cost of manufacturing and the cost of product or whatever labor. And then we actually showed what our gross margin was. And then we explained all of our overhead items. And then we explained what our net profit was. And then we talked about taxation and depreciation, amortization, showed all that. So we explained every line item. Then we also showed what our budget versus actual amount spent was for every single line item every single month. So every month we reviewed our budget versus actual and we looked at why we were over or why we were under and what we were going to do differently next month. So it was that rigor of explaining every line item, what it meant, how it all flowed to the bottom and even what the bottom really meant, right? Profit doesn't mean I have it in my cash because I'm using it for retained earnings, I'm paying bills, I own cash flow. So it's explaining that to people and they find it very helpful. You can also try to explain the P L to your employees by show them their home P L. Show an employee how to create a simple budget for themselves and a simple home profit loss statement will vastly change their lives. We Also go right down to the general ledger on a monthly basis where we'll have the entire leadership team review every single expense in the business by category. So we'll go through and we'll all look at travel, entertainment, we'll all look at food, we'll all look at software. It's amazing how all of a sudden realize, like, when everybody's looking at all the expenses, there's certain line items. You're like, wait, why are we paying for this software? We stopped using it nine months ago. There's a lot of waste that you notice by looking at every single expense and having your leadership team look at credit card bills and look at expenses and spend like two or three hours going through every line item. You can make up a lot of additional margin just by doing that. So there's a process behind that. What I like to do is to take the vivid vision that we're just finishing and have it as a Word document. And then I go through and I highlight every sentence that came true in green, every sentence that we're currently working on in yellow. And then we talk about the ones that were in black. And we like, why didn't they come true? Did we not think about them? Did we not put a project in place? Did we just change? But when you show the progress against all the stuff that came true, that can be pretty powerful, then what you want to do is lean out again three more years and go out to December 31, 2027 and start describing the organization three years out again. You also want to take a look for any parts of the business that maybe were not included on the first one. So did you go through every business area, like IT and finance and customer? Are there new business areas in the company now that you didn't have three years ago? You need to talk about them a little bit more. And then did you talk about how you relate to customers and employee satisfaction and all your circles of influence, like working with legal and suppliers and accountants? If you can include that too, it can be powerful.
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