Hero to Architect: The Leadership Shift You Must Make to Scale

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We all like growth, but really in a business it's not just growing, it's— you should call it scaling.

Yes.

It has nothing to do with fish.

No.

It has nothing to do with weights.

No.

Not, not usually, at least.

Growth.

Yeah, growth. You've done a lot of that.

Yeah, positive kind.

Good.

Most of the time.

I always like to say I'm a growing boy, it's just horizontally instead of vertically.

Oh Lord.

We'll be right back. She's the CEO.

He's the marketing and operations guy.

If it's broken, you need The Business Fix. It's springtime-ish.

I love that you think it's springtime.

It's springtime adjacent-ish.

The calendar says it's springtime.

It's getting there.

Yeah.

With spring comes new things.

Yeah.

And because of what you do.

Yeah.

With every podcast.

Yes.

I decided that I needed to go find something.

Oh dear. What did you get?

And I have a present for you.

Are these Letter People magnets?

It is Letter People magnets.

I'm so excited.

I, I told you I was gonna get you the Letter People, and I, I always said that facetiously, Josh. And then I went online and looked at Letter People. I love them. They do. They were on eBay for like $85 each, and I'm like, Chrissy's not getting Letter People.

Oh no, Letter People. It's fine. I wouldn't spend $85 each. Each? Yeah.

I'm like, this is—

I am not a kindergarten teacher. I do not need the Letter People.

Right, right. I mean, Chris She needs letter people. She does not need $1,600 of letter people. So then I saw the letter people refrigerator magnets. Yes. And I thought—

Oh yes. Yes. I can't wait. Like, I know it's crinkly and it's gonna drive everybody nuts, but I'm like, I'm so excited. I have to open them.

Oh yeah, no, open, open, open them.

I'm opening them. I'm spreading them out on the table.

And the nice thing is they're all gonna stay together. They're all stuck together. 'Cause they're magnets.

So they will go on your refrigerator Oh, um, my family's gonna be so excited.

Yeah, don't ask me what I would spell with them.

Oh, I can't wait. We're gonna have such a good time with these letter people. Oh, they're so fun. I'm preparing. Which letter person am I using today?

Yeah, no, so while I play with the letter people—

I am—

we're gonna talk about— we're like, while you play with the letter people, I'm going to get people prepared for scaling. Um, now that Chrissy has a toy and she's Found it. Okay, she had to go digging for that one. Most small businesses, most medium businesses, they hit these ceilings where there is just— it's the 4-minute mile, it is the, the sub-9-second 100-meter dash, or sub-10-second 100-meter dash. It is these just barriers where it is just like, and once you get past it, like it's pretty good sailing until you hit the next one.

Yeah. To get the next ceiling.

Right. Right.

There's the next ceiling.

In most cases, there's a reason why it's called a ceiling because you smack into it. There's not a, hey, look, we got this and we're just going to ease right on through. This is not a soft landing. Um, this is kind of like when you're about 9 years old and figured out, I am too tall to jump up and down on my bed. Oh yeah, we all remember that moment as a child. I remember hitting the ceiling fan whacking me in the back of the head.

Oh no.

Um, my bed was fairly tall, and, uh, that could explain some of the things I say in the podcast.

Yeah, it does.

Uh, that being said, As someone starts to move, like especially from the CEO, it's their job to push through those ceilings, to figure out the ways around it. It's not anyone else's job. That squarely lies on the CEO for the most part. As you hit those $1 million, as you hit the $5 million marks, what's the hardest part of that identity shift that like companies have to go through that in many cases they get wrong?

Yeah, so I think the hardest part, it's not strategy, it's really surrender. And so, you know, at $1 million, you're still the hero, right? You're the rainmaker, you're the fixer, you're the closer, you're the, you're the guy. I mean, and your identity is built around output and you feel valuable because of what you are personally producing. But somewhere between that $1 and $5 million mark, there's an identity shift, right? And that identity becomes the bottleneck. And here's where most CEOs get it wrong. They try to grow the business without growing themselves. We've talked about this in other episodes. It's really important because you want to hold on to being the doer. Instead of becoming the designer. So there's, there's 3 big identity mistakes I think that happen during that shift. The first is control over capacity. So they equate letting go to losing control. And in reality, refusing to let go caps companies' capacity. The second is presence over process. So I mean, they rely on being in the room. They have to be there. Everything has to still revolve around them instead of building systems that work without them. And then that third is approval over alignment. They still really want to be liked by everybody. They need to be the favorite instead of being clear with the team. So instead of telling everybody this is what needs to happen, they just want everyone to love them. And that's a hard shift because I think it feels like you're losing relevance in a lot of ways, but you're not. You're upgrading from relevance to responsibility. So you got to grow up.

Wait, did you also get out the R?

I didn't, but I can find it very quickly. Keep looking. So yeah, I mean, I think you can't scale if your identity is still tied to being indispensable. So that's, I mean, summary of that question that you asked. It's really about the identity shift from hero to architect. And that's where most CEOs, they're either going to level up or they're going to stall out.

Yeah. Yeah. No, I totally agree. See that all the time. When you see it on the HR side of things.

Yeah.

This is the one that I always think that people, they do not put proper protection over the fan until the fan has been hit.

Yes.

By large amounts of fecal matter.

Yes.

What are the HR, like, infrastructure pieces that have to be in place before a company tries to, like, scale up, or let's say double?

Yeah. So if you're about to double your headcount, you need more infrastructure as opposed to hustle. I know people think like, oh, I'll just hustle harder. No, you will not. That's not— that's going to make things messy. So from an HR standpoint, I think there's there's 3 things that you absolutely have to have in place before you try to scale your people. And I have the letter person here.

It's the S. Today's letter is S.

Today's letter is S. And there are 3 S's to doubling your headcount. And those are structure, standards, and stewardship.

Those are good ones. Those very much fit.

Yeah. So structure, clear roles, clear reporting, clear decisions, right? If you can't draw your org chart on one page and clearly explain who owns what, You're not ready to double your team.

No.

Yeah. Yeah. And structure, because people are like, I don't understand what you say when you mean structure. Like, it's documented job descriptions, defined decision rights, clear reporting lines, standard operating procedures that don't live in someone's head. This is really— I feel like I'm talking your wheelhouse here, but it's just because when you double your people without doubling clarity, you do not double productivity. You just double politics.

Yes. Yeah, yeah. You get twice, twice the payroll.

Yes.

With half the work.

Yeah. So and if you don't document it before you double it, I think you're going to regret it. So that's the first, first S. So second S is standards, and that's behavioral and performance expectations. And I think this is the one that leaders underestimate. You need clearly defined standards for 4 things: performance, communication, accountability, and culture behaviors. It's not just what gets done. It's how it gets done. So when you scale without those standards, every new hire interprets the culture differently. And that's how you go from tight-knit to tense over tight.

Yep. So yeah, it needs to, the customer needs to not be able to figure out who did it.

Correct.

Yeah.

Yeah. Standard scale culture vibes don't. So just keep that in mind.

Yeah, there we go.

Yeah, I mean, consistency is protect, I mean, from a legal standpoint, Consistency is protection too. So inconsistent enforcement is a risk. So when you have the right type of standards, you're also making yourself more compliant. The last S, the super S, is stewardship. And that is leadership capability and feedback systems. And I think that out of those, the 3 things that we're talking about, Josh, this is the most overlooked.

I agree.

Because if you're doubling the headcount, you're also doubling the leadership complexity. Yep. Yeah, and you need managers who know how to coach, a real onboarding process, feedback cadence that isn't just once a year. Listen to our podcast on employee reviews and a way to catch issues early. So like stay interviews, tell us what's going on, what's great, because doubling people without doubling leadership capacity is how burnout, turnover, and lawsuits can show up 6 months later, sometimes 6 weeks later.

I was about to say 6 months, 6 weeks, 6 years. They show up. It's not if, it's when.

I mean, I think it's really important to think, you know, scaling isn't just— it's not about adding bodies, it's about adding the foundation that's strong enough to hold them.

Yes, yeah, agreed. Wow. Um, this— the stewardship one too is one that, like, I would have needed the thesaurus to get there for that one. Um, how do you identify that employee that's going to help you scale rather than the one that like is the— like the— there's the person that's been at every company for 30 years, the founding employee. Correct. That like everyone's like, hey, Bob's been with me since the Nixon era.

Yeah.

And they're like, yeah, Bob's great. Bob knows everything. How do you like— who's the one that gets you past where Bob is to the next level?

Yeah, so I have, I have more letters here. I would say this is probably one of the hardest parts of scaling because, you know, founding employees, it can be emotional. They helped you build the business.

Yes.

Yeah, there's loyalty there. There's gratitude there because they were probably the person that was like up doing the things with you that when you're trying to figure it all out and you didn't know how it was all going to work.

They may have helped figure it out with you.

Yes, exactly. But scaling doesn't ask who's been here the longest. It asks who can lead at the next level. And so really it's in the terms of we have 3 E's for this: elevation, execution, and emotional range.

Did you get the E out?

I didn't. I can't find it right now. I know it's here.

You can look for it later.

I'll find it later, yeah. So, you know, founding employees are often phenomenal at doing. So let's talk about elevation. And the question with elevation is, can they think bigger than the task? So founding employees, they know the work inside and out. They're usually scrappy. They'll stay late. They'll figure it out. But a scaling manager has to elevate above the work. They have to think in systems. They have to anticipate those bottlenecks. And if someone still solves everything personally instead of building processes that solve things repeatedly, they're operating at that founding level, not a scaling level. So you have to remember, founding employees generally have built with their hands. Scaling managers build with their head and their team.

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That's clarityhr.com. Simple, clear, and here to help.

I'll give you a few seconds to go to the website while we get ready to get back to the show. Oh yeah, this to me, I, I want to plug something too at the same time. Um, there was a post that went on Instagram that was you talking about if you put someone in leadership and don't give them training, that as of like the point of recording this, it's like 70-some-odd thousand people have watched this thing and been like, hell yes.

Yes.

Um, that to me fits here.

It does. Promoting people without leadership training is irresponsible.

Yep.

Yes.

Because this is the same thing.

Yes.

Um, if you are trying to get someone into a scaling position that is a builder, it ain't gonna work.

No.

Or a founder. That's—

yeah, you try and scale someone that's founding, that's founding, and they're used to building. Like, they're just doing the same thing. They're building over and over and over and over, but they're not really looking at how do I build the infrastructure.

Yeah.

So that takes us then to execution, which is, can they build repeatability, right?

Ooh.

Yeah. So founding employees might be heroic. They can just get it done. But scaling managers create clarity so that others can get it done. It goes from the me to the we. Scaling is about we, right? So they document, they create accountability, they delegate effectively. Their job is to remove bottlenecks instead of just being the person that does the work, removing the bottleneck so that other people can do the work. I mean, and here's, here's the other thing: if production drops every time that person goes on vacation, that's a founding profile, that's not a scaling one. You want people— I mean, they miss them because they're just wonderful, but they don't miss them because the work keeps getting done, right? So if the machine only runs when you're there, you're not scaling, you're substituting.

Ooh.

Yes.

Yeah.

Yeah. And then the last one is emotional range. And I think this one is, again, one that leaders often miss, and it's, can they handle complexity? So as you're looking within your team, this is a question you need to ask, an emotional range, because scaling introduces more personalities, ambiguity, more pressure, more politics. It's just going to happen when you add people. So scaling managers, they need that emotional range. And so founding employees are often loyal and hardworking, but they're not always emotionally equipped for leadership at scale. And I've watched this in my organization. We had some people that I promoted and then they just, they quickly said, this is not what I want to do. And then we had to figure out, you know, do you want to stay? Do you want to go? And I had some that stayed and I had some that exited. And it was hard because these are people that have helped build the business. So I think that when you get to that point, when you see that they're not emotionally equipped, it's not a character flaw, it's a capability gap. And you've got 3 options with these people. You reskill, you reseat, or you release.

So now we've got S, E, and R. I know.

I really think that it was really fitting that you got the letter people for today, because I really had fun with this. So I mean, so your 3 options to avoid the— and I think avoiding the decision is the worst one, but it's reskilling, reseating, or releasing. So reskilling I'm saying you invest in training that person. All right, leadership development, coaching, clear expectations, you give them a real runway. You don't just tell them to try harder. Oh, yeah. Don't just tell them to try harder. Give them the ability to learn new things or reseat. Okay, not everyone who builds at 5 belongs at 50 in the same role.

Correct.

Most people don't. Most people do not. And it's not It's not wrong, but most people cannot run a 50-person company and a 500-person company. It's just not possible.

It's a different skill set.

It's a totally different skill set. And so sometimes the right move is moving them into a senior specialist track, moving them into a different part of the organization where they can shine without having to carry people leadership that they don't enjoy or they're not wired for. So reskill, reseat. Some of that can be uncomfortable. I would say the hardest one is release. And that's if you've been clear, supportive, and structured, and that gap remains, you have to protect the organization. Yes. Which means it's time to let people go. Because I think here's the uncomfortable truth, loyalty to one person cannot come at the expense of the whole team. It just—

It can't.

It doesn't. Yeah. So scaling doesn't mean abandoning the people who helped you build. It does mean being honest about what the next chapter requires. So the question isn't, are they loyal? The question is really, are they aligned and equipped for what's next? And that's heavy.

It is. You know what it makes me think of?

What?

I believe I've mentioned this before. When you become a US Coast Guard swimmer, like a rescue swimmer, you know what the first thing they teach you is?

No.

How to subdue the person you're rescuing.

How to not drown them while you're trying to save their life?

No.

How they don't drown you.

How to make sure they don't drown you. You can't let the, the person that helped you build it drown you.

No. And I've, I've made that mistake, and it can be a really expensive mistake too.

It can be. Yeah, it has been an expensive mistake. Yeah, I, I kept sending checks and I'm like, why isn't this getting better?

Yeah.

And sign the check. It doesn't get better. So the check, it doesn't get better. And I'm like, wait a minute here.

So yeah, learn from my mistakes. If you want to learn, if you want more details, you can message me. We'll have an off-podcast conversation.

That's the whole reason why we do this podcast. We have both screwed this up.

Yeah. And it's a good reminder to not do it again. Right, right, right. So let's talk about operations.

Sure. I'd love to.

Yeah. So, Josh, once the vision set, How do you actually operationalize that growth? How do you turn hustle into predictable marketing and operations?

This is the thing that's so to me, like when the CEO says, hey, guess what, we're going to like explode this thing, this thing's going to grow, buckle up. You hope they don't already have that plan in action because that is when it goes sideways. To me, there has to be this like pre-scale audit. Are we ready to scale? Most CEOs think yesterday is the best time to scale. Yesterday is the best time to figure out if it's time to scale. Once you have figured that out, to me, the, the one that I like is the leak principle, where before you turn on the faucet, you make sure the pipes don't leak. Oh, I like— I have done some plumbing in my own house, and whenever I turn it back on I always kind of do it with one eye open, kind of one eye closed, and I turn the valve slowly like, hey, is something coming apart here? Because if it's coming apart, I want it to come apart with 1 gallon in the pipe instead of 35 PSI and 40 gallons in the pipe. You cannot multiply a process that isn't already working well. If it's not working well, it's— I mean, scaling it is going to make it worse. One of the things I love— I'm going to make a 10,000 Small Businesses shout out here too.

Nice.

Is I still remember one of the first things that they said, like the first day of class, is if you're doing something and it doesn't make money, doing more of it is not going to make it better. The same thing goes true for your operations. If it's not working well, scaling it is not going to make it better because inefficiency scales faster than growth every single time. If your current workflow has a 10% waste or friction or leak or whatever you want to call it, and you grow 50%, 50%. You are now not at 15% problem because that would be a, a 50% increase. No, no, no, no. You typically end up with a 20 or 30% inefficiency problem because, like I said, the problems scale faster than the business does every single time. It's not always exponential. Yeah, but it's there. Um, whatever holes are in your boat, you'd like pushing the boat deeper in the water makes the water rush in much, much faster.

And then you add more people to it.

It's just— yeah, right, more people, more complexity, and get to a broken system. Um, you just have literally more people running around going, I don't know what the hell to do. Um, the, the other thing is too, is like I always like to call it the house cleaning, is you like scaling it, it's going to put a magnifying glass on things you think bigger, so it's easier to hide things. And I disagree. Those small operational quirks, that thing that you thought, we can deal with this, suddenly is a $40,000, $50,000, $60,000 problem. Yeah. And it like those operational quirks or these shadow workflows where someone goes around the corner. Yeah, those are those massive bottlenecks. Now, once you add the weight of growth, if there's that person, that one person that is the founder person that has to do everything, You've scaled the business, you're trying to grow 50%, and now everything still has to go through Bob and receiving. No, no, no. It's just not going to work.

Fix it when the stakes are lower. I agree with you.

Yeah, yeah, definitely. It's just, it's not going to— it's, it's not going to work out well for you otherwise. And it becomes very expensive very, very quickly because the expenses obviously always scale before the— before you get that money.

Yeah, I wish it was the other way around, but it is not.

No, it is not. Buckle up, kids. Um, so to me, like, like I said, the, the foundation, it comes down to your standard operating procedures. Uh, you cannot navigate a ton of change when your processes are all willy-nilly. As you always like to say, your processes are just in— they're in Bob's head. Yeah, I don't know why we're making fun of Bob today. Bob's the guy.

Yes.

Is, uh, they're all in Bob's head. Bob's good. Um, yeah, no, if Bob gets hit by a bus tomorrow and you're in the middle of scaling, your business is going to feel like you got hit by the bus. And that's just not— no, you have to lock down those SOPs in advance. I mean, once again, I always talk about them as foundational.

Yeah.

If you try and build a bigger house on an already shaky foundation That ends up poorly.

Yes.

That ends up in a house that is in the basement.

Yeah. A little bit of wind and you're screwed. Right.

And it doesn't matter which way the wind comes from.

No, it doesn't.

Because it's going to hit. It is just going to hit. The other thing is too, as I mentioned this, like in my notes here, it's hero culture to process culture. If there's a process for it.

Yeah.

I mean, we've had some switches in our company even recently where like, look, it's— I had someone up and running within about a week. Yeah, because we have the processes down.

Exactly.

Bring them in, I'm able to say, can you read? And they say yes, and they read the processes and like, great. And as we scale and as we add people, once again, here's the process. What does it look like to you? Um, from marketing, this is where I think it becomes interesting with marketing because you have to be very direct about how the budget evolves. Evolves and grows. Now, your budget, like in most cases, $1 million revenue, you're spending 5 to 12%, typically. That's $50,000 to $120,000 a year. $3 million revenue, you're looking at $120,000 to $300,000 a year. That's 4 to 10% range is what you're spending on marketing. $10 million, 3 to 8%. I mean, so it comes down a little bit as you scale. I mean, we're not talking big jumps here.

Not significantly.

No.

And you cannot keep the same marketing budget at $1 million that you have at $3 million. And that's a struggle. I watch people deal with that all the time. Like, this is our budget.

We're like, no, correct, right? No, the, the, the—

it has to grow.

The, the number has to grow. The percent of your total revenue can come back a little bit. Yeah, but the overall number— yeah, you have to ratchet that up.

People do the same thing with personnel. We're going to grow to $5 million, but we're going to keep the same headcount. No, you're not.

You are for about 3 weeks, and then there's going to be a massive volt and they're going to burn it down.

Well, and then they start to hit a ceiling and they're like, we don't understand why we can't break through this ceiling. It's like, well, are you adding capacity? No.

Right.

Then you're not going to be able to break it. Here's the other thing I will tell a lot of small business owners. As you get, as you, in your pursuit to become richer, you are going to feel poorer for a period of time. Yes. Because there is, you've talked about the delay of growth or the delay of the revenue coming in. And that is real and felt. And if you are not willing to make a lifestyle change for a quarter or 6 months or a year, then you really need to think about if you want to grow.

You have to feed the monster.

You do. You do. Sometimes you got to exercise your line of credit. You got to deal with it. Yep. Sometimes you have to pull on debt. Sometimes you bring in an investor. Like, there's— if you really want to do this and you truly want to scale, you have to be willing to make some sacrifices around some things that maybe you just— I mean, it can also be around time. Yep. Sometimes you got to spend more time.

Yep. Yes. But don't fall into the founder trap. No.

Um, do time the right way.

The speed at which you said no there—

I didn't even think I was done with this sentence and she's like, no, don't do it. Move on. Get coaching around it. Train yourself first before you decide that you want to scale aggressively.

You have, you have to be at the next level before you can expect your people to be.

Pull the reps in. Yes. It—

the one thing with marketing a lot of people don't understand too is if you are business consumer, you have a higher percentage of revenue that you're needing to spend.

Yes.

On marketing because you are trying to reach a broader range of people. When you look at the checks that people write compared to the checks that businesses write, they are very different, typically by a couple of decimal places. Yeah, they are. And so that just dictates the number of people that you have to talk to, the number of people that you have to, to reach, the number of people people that need to be writing you checks. And with that, it's— it— there's that law of scale in there.

Yeah.

Um, the other thing is too, is if your growth is 30 to 50%, like you alluded to earlier, do not budget for your entire year with the same budget you gave for marketing last year. Ain't gonna work. It's just not.

Why not? Why can't you just be a miracle worker? No, it's math, people.

Correct. The other thing that I see too is what so many people look at is they're like, okay, we've done $1 million worth of business in this channel. We want to do $3 million worth of business in this channel. And like, oh, the channel may not be able to support that.

Yeah.

So some people don't look at— and I mean, it's like the most basic marketing exercise that people don't look at is the total addressable market. What is your total addressable market? What percentage of that do you think you can get? And then look at that. Too many people like, we're growing to $5 million when their total addressable market might be $3 Yes.

And if it's 3 in that market and you're like, I want all of it, it's not going to happen.

No, no. So I always tell people, like, you have to realize that putting more money in this— and the example I always like to give is from like Google Ads.

Yeah.

If you're effective at $5,000 a month in Google Ads, jumping to $10,000 a month is not going to double your business.

Now, Google will love you doing that.

Correct. But there's a reason why Google made $200 billion or whatever it is last year. You're going to hit a ceiling on that. So you eventually need to find another way to do it because you're going to bid for more volume. And you also have to, at that point, you have to target a broader, lower-intent audience.

Yeah.

You've figured out who the— yeah, I can see you wincing at that one. You're like, this sucks. Yeah, I don't want to do that. Yeah, because you're like, we need more people. These are the— like, if let's say it's 35-year-old males that typically buy from from someone. Okay, well, if you've kind of exhausted 35-year-old males, now you have to figure out how to get the 30 and 40-year-old males in. And they may not be your exact audience.

No.

But you need to still figure out a way to go after them. So the, the cost per customer is going to rise. You're— that's just what's going to happen. The other thing is too, is there is a finite amount of search volume for your big money keywords. Um, once, I mean, when you think of like, when I look at Akron podcasters, um, there's not 10 million people like searching that every day. No, no, there's not. There's really not.

It's like 12.

Um, right, right, right.

5 of them are our fans.

The difference, the difference between that is too, is there is not 10,000 people searching, uh, like Akron podcasting. There's not 10,000 people in Akron searching podcasting every day. There are probably 10,000 people in Akron searching, why is my healthcare screwed up?

That is— yes, yes, which is a whole other problem when you're trying to pay for ads.

Correct. So to me, there's— they're scaling past that ceiling though. You have to diversify to a certain extent to be like, look, where are we going? We cannot— I mean, because one at this point you've built a business that can support itself and those that are in it. If you want to branch out into other things that are adjacent, that's good to be able to scale that way. But once again, you can't just— you can't expect to get more blood from the stone.

Yeah.

If you're already at a great level with it. The other thing that I always like to say too, when it comes to the marketing and the, the operational piece of it, you have to identify the 20% of crap that is taking up 80% of your team's time.

Yes.

If you can figure that out and save— I mean, I see so many people that they're like, oh, we can save a little bit here and we can save a little bit there. And I'm like, they're ignoring the big problems.

Yes.

They're checking off a couple of little problems like, look, we saved our employees 5 minutes minutes a day. Yeah, but you're ignoring the big thing that like Bob hates his job and is 20% as productive as he could be.

Yes.

Fix, fix the big problems, especially before you scale. I mean, this, this is all pre-scaling stuff.

Yeah.

As we like to talk about, like you're more the CEO, you've got that lookout vision, you can see what's down the road. I'm the guy that can see in between me and the, the, the camera over there, and that's about as far as I can see. So to me, it is like we're preparing for the hell that you're about ready to unleash.

Yeah, you're welcome. You're so welcome.

That to me, I mean, and it's a hell of a ride. It's a fun ride. But you, you, you don't, um, take a lesson from the Titanic. Yeah, put them— make sure you've got enough lifeboats on the boat, make sure you've got enough life vests. Basic math, um, right? Do that before you set sail. Um, yeah, do, do the basics, then set sail.

Yeah, a little planning. I mean, sometimes things are still going to break, but at least you plan for most of it, right?

Right, right. So let's talk, um, I love this because I know so many people that have tried software themselves out of a problem?

I know I have multiple times.

I was about to say, I was about to say, I know a lot of people that have done this. Two of them are in the room.

Yes.

Two of the room, two of them are in the room with us right now as we speak.

Yes.

Like when it does it fix the broken process? What, like what happens when you add software to problems?

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And now back to the show. It scales them. I think I'm going to get hate mail from software developers. I think you really have to be clear in your process. So and if software doesn't fix a broken process, so if your process is already broken, it's just going to magnify it. So I feel like, you know, Buying an expensive piece of software is like putting a jet engine on a shopping cart. You're going to move faster, but it's not going to probably be in a helpful direction.

See, this, as a guy—

Yeah, it sounds like a great idea.

Like, this sounds like fun. This sounds like—

It may be fun, but you're probably gonna hit something hard.

No, that's, that's okay.

Yeah, okay, well, I'm glad that you're okay with that. I also would equate buying software that you may— that you think is going to fix a problem, but you really haven't even diagnosed what the problem is, is you're flushing money down the toilet.

Oh, 100%.

I will say, I mean, I can— it's like, how many, Chrissy, how many times in the last 18 months have you flushed money down the toilet because you were looking for a software opportunity? Like, I don't want to talk about it. No.

And the problem is, too, is it's what's difficult about that for me. We try and stay on the edge of like what we can do for efficiency in the future.

Absolutely. Especially with implementing new technology.

Correct. The thing that's such an easy trap that I have found to fall into is this should not, like software will never fix problems. It will fix efficiency. Yes. But it won't fix problems.

Yes.

And that's the problem. What's difficult about that is what is an efficient efficiency issue and what's— where— how can we make this more efficient, or how can we fix this? Yes, those, when you're sitting in the trenches and there's explosions going around you, can look kind of the same.

They can. And it's really important that you do diligence the software fix that you're looking at. One sales demo is not enough.

No.

And I mean, we just— case in point, we have a software that we use for our agency management system. We have had it for 8 years. We have been trying to— this is us. We just did it wrong. We're trying to implement the same module for the last 8 years. And finally, the software company admitted that it doesn't work. And we're thinking that we are the problem and why can't we figure it out? And they finally admitted, oh yeah, it doesn't work that way. And nobody ever uses that piece of the software. So we just, we just didn't tell anybody because no one's using it. Like, we've been trying to use it for like 3 years. They're like, oh, well, you shouldn't. I'm like, well, maybe we shouldn't work together anymore. Like, it's—

I wouldn't want to be on the other end of that phone conversation with you. It was not friendly.

No, it was not comfortable. We're still working through our relationship right now. I mean, but that's— I would say it's not a quick fix. Like, anytime when you're like, we're going to implement this new piece of technology and it's going to be wonderful, buckle up. Yeah, just buckle up.

My biggest thing with that is, is I am constantly asking the questions, how does this go sideways?

Yes, yes. And I usually do too, but in this case it was like, oh well, this is— it's gotta work, everybody else says it's wonderful. No, those testimonials were fake.

Correct.

Not okay.

AI-generated testimonials. Um, how do you ensure that your team benefits from the scale rather than just feeling like, oh, Chrissy just gave us more work. And I mean, to me, I'm just saying this because, you know, our core value is success is a shared thing.

Yeah.

And to me, if we're growing, our people should feel like, yay, we're growing.

As opposed to, yay.

As opposed to, oh shit, he's at it again.

Yay, we're growing. Right.

So excited. They should be, yay, we're growing. Not, he's at it again.

Yeah, I think sometimes teams can get a bad rap because they just— you assume that they hate growth. I don't think they hate growth. I think they hate the feeling that they're carrying it alone.

I will agree with that.

Yeah. So if you want your team to celebrate scale, I think they need 3 things. One, the workload has to be manageable.

Yep.

So you may like, like having a fire hose every day, but I guarantee your team doesn't. That's why they're not the business owner. Owner. So workload has to be manageable. Number 2, their growth opportunities increase. So I grow, we grow, you can grow too.

Yes.

Possibilities are endless. And then the third is that their voice still matters.

Yep.

Because I think a lot of times when we scale really fast, especially with individuals that are growing from being those founder employees into managers, they can sometimes feel like they get left behind or that you're not listening to me anymore or you're not you're not paying attention. And so I think it's really important that you can maintain voice. Scale should feel like expansion. It shouldn't feel like exploitation. And I think that's something that's really important as you're scaling your business is you have to scale capacity and you have to scale people.

That is my biggest one.

If you don't scale people, you're doing it wrong.

Yeah, it's that, that is to me, I mean, all three of those are the points that I just truly feel like deep down, like Yes, because the growth thing is, is even if it's not them changing positions or anything like that, they should feel like their lives get better as we scale. And even if it's not today, they should feel like if they help scale it, there's something better on the other side of this.

Exactly.

That's— they just need to feel like they're involved, like they're a part of it. Not like, hey, I'm going to get Josh another Lambo.

Yeah. No.

A couple of key takeaways from this. First one for me, the capacity audit. Before you find that, like before you even start this, find a manual process that you automate or document. And why I say this about one, because you're going to find one and you're going to be like, oh, Oh, there's this over here. And this becomes one after the next after the next. And that is what will help you build that solid foundation to scale off of.

I would say the next one is the vision check. So it's really about clarifying the expectations and making sure everybody knows where we're going, making sure every employee knows what success looks like for the company 12 months from now. You should be able to ask everyone in your organization, where are we going? And they should be able to tell you in like one or two sentences.

Yes.

And you should be in alignment.

100%.

Yeah.

Uh, scale radical directness.

Yes.

I feel like that's a good line for me to say.

Yeah, I like that. Um, he had a t-shirt, Radically Direct.

I believe there should be like an AKA The Jerk on the back of it or something of that nature. Yeah, no, that Radically Radically direct. If someone's out there, if they do t-shirts, we would love one.

Yes.

Yeah, we would love one of those. It goes along with something that you say every once in a while.

Yeah, to be clear is to be kind.

Yeah, I believe so. I believe so. I think it's like that's a theme or something like that.

It is, especially in HR and leadership.

Let's do a quick shot with that.

Um, what— I'm—

I, I kind of like all of these that we have listed here. The, the one that I want to go with though, let's talk fractional. Yeah, because this is a thing that people don't often address. There's a couple others that people do address. Yes. Um, where does something fractional become necessary in your opinion?

So it depends on what type of fractional you're talking about. So which one are you talking about?

Where do— where should people start looking at fractional HR, fractional CFO, fractional COO?

So fractional HR is as soon as you have an employee. Yes, that's it. You should, because you don't need full-time HR. You just need someone you can call when you've got an issue. And it shouldn't be your lawyer. They're expensive.

Yeah.

And they generally don't always answer the question the right way.

Correct.

So that first employee, fractional CFO, COO, I think when you get to $3 million or more or when you're growing so fast that you need an additional skill set, but fractional CFO, is generally that $3 million ceiling.

And that makes sense because really to me at that point you are managing enough that you need someone that knows how to manage those numbers. Yes. And looks for the correct way to manage those numbers.

Yeah. And fractional marketing when you decide you want to grow. Yeah.

Yeah. No, I, we fully agree with that one. That's, that's the one that I see all of the time where I'm like, yeah, that's not, that's That's not marketing. That's posting on Facebook.

Yeah. No, no, no. Not somebody who's doing your social media management. You want a fractional chief marketing officer that's going to help you create a strategy. That— find that person, pay them on the fractional side. It's well worth it.

Correct. They will tell you what to do, how to do it, where to do it. You still may be doing the stuff, but they will give you the guidance and the strategy. It's not, it's not, it's not as simple as you think it is.

No.

Thank you to everyone that has stuck around. Um, I believe we're going to take a, a week break here while Chrissy plays with the letter people. And, uh, do us a favor, hit thebusinessfix.com. Um, next episode we're going to talk about how scaling breaks your culture. Yeah, scale, and then how that's going to screw up your business even worse.

How to fix it.

This is exciting. Do me a favor, take care of yourself. If you can, take care of someone else too. We will see you very very soon.