The Louis Carter Show - Coaching Leaders and Companies to Become Even Greater. Episode 2

Hey everybody, it's great to be with Stan Middleman today here. This is Louis Carter here on the Louis Carter Show. It's great to be with Stan. Stan is a wonderful man and a wonderful leader and CEO. It's very special to have him here today because he really has done something extraordinary during the COVID crisis and beyond really, which is to grow rather than break down its workforce. And not just grow, grow threefold. And now have moved 98% of its over 12,000 employees in March to work from home without any drop in efficiency. And in June of this year, Freedom set a monthly volume record and has increased its workforce by over 20%, like we said, since March, with plans to increase by 42% in the next 6 months. And also, one of the things about Stan, he's got great ratings on Glassdoor. They're— over the past 8 weeks, they've soared to 4.9 4.0 rating, and they have a 77% of employees would recommend the company to a friend. So their net promoter score is really high. So this is very hard to come by, which is why I wanted to bring Stan on here today to tell us some of his secrets to success and the ways in which he's been able to achieve so well during this crisis. Hi, Stan. Nice to meet you and nice to see you.

Nice to see you.

Nice to meet you on our show. Thank you for coming on our show today. So tell us, Stan, what's the secret to this, this threefold success? And really about how do you keep people at home? Or how are they doing? How did you enable that to happen when so many other CEOs are, are saying, you know, I can't do that, I don't trust people?

So I understand that necessity is the mother of invention. Um, and the— so what's really interesting, if you said to me January 1st of last year, 98% of your workforce has to work from home. What's going to happen to your business? I would have held my hands on my head and said, oh my God, it's going to be the end of the world. But the reality is that we already had all the technology in place. You know, we do a lot of planning around disaster recovery. We have— lots of sites in the northeast part of the country. The office I'm speaking from is in Marlton, New Jersey, which is right outside of Philadelphia, Pennsylvania. We've got thousands of employees in the area. So we plan for things like snowstorms. We plan for electrical outages and thunderstorms and things that would disrupt our business. You're not going to make insurance claims for that stuff because you're out 3 hours, 5 hours a day. You're never out multiple days and you have other sites and you shift the workload. But that workload capability to shift, that ability to have a percentage of the population work from home, that technology was already in place. We have hundreds of sites around the country. We were already having Zoom meetings on a regular basis with teams. So teams of people for years have been meeting, you know, via Zoom or telecommunication in special offices or having group meetings. We've been transmitting big group meetings for many years where we would have a celebration and bring in sites. We'd have everybody from this site or that site on with us. And celebrate this achievement or that achievement. So we were used to doing that type of thing, but I didn't know how good we were at it. And the folks in our technology department had built a world-class organization. Not only that, as it became obvious that this type of event would happen, they went out and bought a lot of hardware. So they had enough hardware to supply virtually the entire staff already in possession and to provide the newly hired staff that we would bring on. And, you know, you said, "Oh, that's a budget breaker when you're talking about thousands of people." Well, the reality is, is that you also have pretty big inventories when you have thousands of people just in store and you're always, you know, changing over from this to that. So we had old equipment, new equipment. And plus newly ordered equipment that all was arriving kind of at once. And we were able to get it back out. They built quite the factory to support the company and really got good at distributing the hardware. If this had happened 10 years ago, our business would have been stopped dead. We wouldn't have had the capability to swap over, and to let the people that were so heroic in IT and in facilities to shine. So when you think about it, it's kind of a confluence of events. It's that, it's where we are from a technological standpoint in the world, where are we from a company standpoint in our growth cycle, where are we from a society standpoint? 'Cause remember, you have all the technology and capability in the world. If people didn't have that kind of technology in their homes, if there wasn't widespread internet access, if the quality of that internet wasn't pretty good like it is today, this couldn't happen. So not only is it the corporate change, but it's the change of everybody, people from their homes, people from, you know, from small offices, from whatever situation it was, they were equipped to receive what we were sending. And they were already prepared to do their job to a certain degree remotely because really nothing changed. Most of our customers— most of our employees are not directly involved with the customer. Only, you know, a third or 20% have customer interaction. So most people were working at a screen. And really, when you think about it, what's the difference where that screen is, where that microphone is, if there's a camera attached, if there's not a camera attached? And the reality is, it was much easier than I could have possibly imagined. Of course, I didn't do any of it, so it was very easy for me. But the guys and the stars and the heroes that stood up and did this job were phenomenal. But they did it in an environment that was fertile to what we planted. And it was ready to accept what we were giving. And, you know, and it's not just us. When you look around the whole world, it worked in India. And we have, you know, thousands of people in India that have contracted work for us, that do their work from home. That was in a total lockdown as well. So we're going 24/7. We have the— we're doing a lot of this on the cloud. We're doing a lot of it remotely. It's just unbelievable. We're down to a very small percentage of people that have to come into an office where they handle money or collateral or something that's physically tangible that's a little harder to outsource or to to do remotely. So by and large, I couldn't be prouder of our organization, and I couldn't be happier about, I guess, the when it happened in my personal life cycle, because I know at points in times in the past this could have never happened. You know, I remember sending people da— home because the electric was out. We don't do that anymore. You know, to the point where we solved that problem with generators. And as you go through life, you solve the problems that you're confronted with. And this is just an example of preparedness based on bad things that had happened to us previously. So it kind of worked out for us.

Leaders have been talking about that with agility for, you know, 50, 60 years. And that sounds like one of your secrets to success is agility. You know, it's good that you had this confluence of events of technology growth in society. However, like you just said, it doesn't really matter whether it was sending them home for an electrical storm or it was sending them home for a pandemic. Your technology and your leadership was agile and is agile, and you're able to be in that way. Would you say, what are you— would you say are the kind of the attributes that is necessary to be agile or to be successful in this new pandemic or this new age? What would you say it looks like, the success behaviors?

Well, I don't know that it's the behavior that's agile or the resilience of the employees and the confidence of management in their employees. So, you know, the word that comes to mind is accountability, right? So when I was much younger and in college, I remember going to my first management class and the professor put a little T-chart on the board and on the left side he put an X and on the right side he put a Y. And he said there's two basic schools of thought about people. X is they're basically bad, and Y is they're basically good. And they're going to do the right thing under Y, and they're going to do the wrong thing under X. So, um, and then you heard Ronald Reagan come out sometime after that and say, well, we're going to use a system of trust but verify. And he was talking about the, you know, nuclear arms. But I think it— when you think about agility, it's really about how are you going to hold people accountable for the outcome, and can you trust them to get the work done? And I have found over the years that no matter how talented people are, when they're busy, they're so busy that they have no choice to do the— but to do the right thing. When they're not busy, they're likely to do the wrong thing. So being staffed to your production models and having the right size staff and keeping people a little bit too busy is one of the greatest ways to hold them accountable. Because nobody really wants to wake up in the morning and face more work than they can handle. And no one that you've hired will purposefully— I'm sure there are some, but when I say none, I mean in a broad sense, the vast majority— people wake up and they try and do the work that's in front of them, pretty much because it's in front of them, and they can't help themselves but to do it. In fact, if there was one danger that we faced, was from working from home, people tend to overwork. So they keep going, they don't stop. And as long as the work keeps coming, they keep going. And we put people in a position where they were really busy, and they had to self-monitor to the point where I had to tell them, you know, get up from your desk, go for a walk, take some me time. You have to take a deep breath and you have to get away from it. You have to exercise. You have to visit your family and turn off your computer. You have to go to sleep at night. You have to wake up and take the time to organize your day and think about what you have to accomplish. There's a lot of individual things that you have to do that are different as a person. So the message I started to send and really zeroed in on was I asked people just to be human beings, uh, and kind of think of the golden rule and do unto others as you'd have others do unto you, um, and to, to try and do the right thing, but don't lose yourself in it. And, you know, that combination of keeping people busy and asking them to be humans, uh, has been one that's really worked out for us.

I love this. Uh, the, the whole concept of trust and verify, especially related to Reagan and the Cold War, is brilliant, uh, because he, he enabled and created respect with others, especially Gorbachev during that time, right? Gorbachev thought he was a buffoon, used to make fun of him until he started telling him jokes, and Gorbachev started cracking up because it's hard to actually tell jokes that Russians actually think are funny, because, right? So it's that connection to another culture, or even connection to your people, and saying, I know what you're going through. You're empathizing in a way. I want you to self-monitor just like I do. Take some, say, take some me time, exercise, visit family, sleep at night, and then I keep busy too. Right? Keep busy. This is what happens. And then trust and verify. Accountability comes from trusting, yes, and the proof is in the verification. Right? So, you know, one of the models I like to look at is Alan Mulally at Ford. At Ford, what he did was he created a red, yellow, green chart. So he believed in accountability like you, Stan, and he said, look, here are the things I know you should be accountable for. Right? And it doesn't have to be check, check, check off the box. It's 20, 30, 40, 50% have key objective achieving them. So you don't have to just achieve them, you can do better, ask for resources, continuously check in, right? Then you would— you get it, you, you get that continuous advice and thought that you can always get better. And that becomes the culture of being at home because there's so many CEOs right now who don't want to—

You know, that culture is not just at home. This concept that we're discussing is not an at-home concept, it's just a concept. Right? It applies all the time, everywhere, whether you're in one location, 100 locations, or 12,000 locations, doesn't really matter. What really matters is managing the metrics, knowing where people fall into their metrics. Are they hitting the numbers they're supposed to hit, whatever those numbers are? Kids don't call them metrics anymore, they call them KPIs now, right? But, you know, whatever you want to call them is make sure that everybody's performing up to acceptable standards and make sure that those standards are spread over an organization and you have standard deviations and you know who's falling above the line and who's falling below the line and you coach the ones up that are falling below the line. But if you're keeping them really busy, everybody works at high levels, right? So this happens to be a very busy time for us, but it goes to the size of your organization. When business is bad, you can keep everybody busy, just have less staff, right? And, you know, insource more, outsource less. Manage your workforce so that it becomes appropriately scaled to the business opportunity that you have. Start new business opportunities that are more market-appropriate and less market-dependent on old opportunities. And if you're not planning for the next opportunity— and that's really where people get lost, right? If you're busy focused on today, I think you end up with a bunch of empty yesterdays. So you've got to be able to plan your work in advance. You have to know what you're expecting. Everything you do today has to be for what you're going I'm going to do next, you know, outside of being a line worker. But you have to, from a strategy standpoint, you have to really be focused on where you're going to be 2, 3, 4, 5 years. From a tactics standpoint, you have to be 2, 3, 4 months out in advance, right? From a line standpoint, you have to be 2, 3, 4 units in advance. So everybody's managing some point that's beyond what they're doing. And that's how people get to be better at what they do, because they're not thinking just of the mechanical process of executing their skills against their particular work at that moment. They're tying in what comes next, and they're thinking bigger thoughts than themselves. And when you get people thinking greater thoughts than themselves, the entire organization rises. Because now they're not just them, they're everybody. And when you're a team, you're going to go further, faster, higher, and have a better time doing it than when you're just pounding it out moment to moment. And that's when productivity slips. So be busy, be thinking about how to clear your work, how to organize your work better if you're kind of an individual person. If you're running teams, make sure those teams feel like they're part of the solution. And not an exception to the solution.

I do think that co-creation is a huge part of that, right? It's always about how do we enable others and ourselves to be part of that solution. I read a quote today that I actually took, um, I actually thought a little bit about it and thought it wasn't really the truth, um, and it's popularized though. That's the thing. So there's things that are very popular about psychological safety these days and incompetencies in leadership right, that are kind of fluffy, that don't really make sense, or don't— it said, and it said this, it was very simple, it says, and I agree with it on some levels, it said that, um, people don't work for you, they work with you, okay. I said, okay, wow, epiphany there, we've heard that for, since Peter Drucker, so we knew that, right, Drucker taught us that back in the '70s. Now, then someone said, no, it's not true, you know, you work for your people. Okay, oh, there's another platitude. Okay, so the truth is that they do work for the CEO. Make peace with it. That's the truth. They do. And when people see the forward momentum of what they can create together and they co-create it and they get the how, the what from, from the CEO, this is what we're doing, and the why even, people need that and they create the whats. I'm thinking back to Jack Welch.

The what? You know, so that's— it's an interesting conversation, right? Because I really do work hard for the folks that I work with. And I really do consider them people that I work with. That doesn't mean that I'm tolerant of insubordination. And it doesn't mean that I'll accept failure. And it doesn't mean that I'll accept underperformance. But it does mean that I work with them, and that I have their best interests at heart, and that I care about them. And that's true. So I think to try and say this is true and this is not true, this is fluffy, this is not fluffy— if you don't have some level of humility, and if you can't look the person that you're talking to and working with in the eye and consider them important and valuable and appreciate their challenges and their problems, your likelihood of being able to get them to help you accomplish the things that you think are important become less likely. And any leader's job is to make the outcome more likely rather than less likely. So why wouldn't you work closely with somebody and have their interests at heart? Why wouldn't you want to see their self-interests aligned with yours? And I think that the biggest part of my job What my greatest and most challenging responsibility is, is keeping everyone's interests aligned. If you don't think and empathize and care about the people that you work with, then you're lost. If you don't provide direction to people, you're lost. You have to do it all. You don't get to pick and choose which ones you want. You gotta do everything. And all the stuff you don't have to do is the stuff you need to do the most.

That's right. So that's the beauty of exactly where I wanted to go with this because it's not about this concept of working for, working with, or working, you know, working to, or working, right? It's just about aligning values. It's about creating spaces for collaboration, keeping a positive vision for the future, enabling respect among people, and focusing on those outcomes, right? It's, it's this process and you can't get there without this emotional regulation, like you said, a little bit about being cool.

You can't pick the parts.

Can't pick the parts. Isn't it funny when people actually say that? You have to pick the parts? You have to be this or be that and they're telling you the way you must be constantly, this uberhuman, you know.

But I think, I think that's not the point they're trying to make and I think sometimes You lose the value of the point that that particular speaker is trying to make. So people taken out of context always ends up in the worst of what they were trying to do. Because I think that the point is that we can all be better. And we can be better this way. And we can be better that way. But it's not this way, that way, instead of the other way. It's in addition. It's all about taking a baseline and improving that with the goal— and here's the key, it's the goal— of creating the outcome that you're searching for. You want to stack the deck to ensure the outcome's likelihood. And that's, that's the key. So you need to do all of those things.

Hey, Stan, when you, when you're feeling and this happens a lot with CEOs these days that I'm seeing right now, is there's hard times right now, and we're stretched, we're crunched, it's difficult. I think any CEO who said, says otherwise would be lying. Okay, it's hard.

It's the most understated description of today that I've ever heard.

Precisely. So I'm wondering, you know, when you're at that place, you know, and I get this, um, What do you do? What do you do? You know, hobbies, things you go away— like, what do you— or even what do you do, period?

I don't know how you have a hobby today unless you like music, right? You know, I mean, there's not a lot of hobbies. They haven't even made any, any real number of new movies, and we're watching dubbed foreign films that are passed off as new, right? Um, but what do you do?

Yeah, or what— what— how do you— how do you—

here's what I, I think is important. I, I think that First of all, if you don't get a little depressed from time to time, you're out of touch with reality, which I'm quite capable of doing. You know, some people drink to arrive at that point. Everybody arrives at the point of wanting to be out of touch with reality, because in today's world, reality sucks, right? Who wants to say, oh, well, let me say, a couple hundred thousand people died this year, we got a pandemic, I haven't been out of my house for 6 months, I can't go to a restaurant, I haven't been to a bar, I don't see my friends, I talk to people on the phone, I don't get any social interaction, haven't given my kids a hug, I can't see my grandchildren, my parents are in the hospital, I can't go visit them. I mean, you can go on and on and on and on. You got a lot of reasons to be sad. I think you have to be able to, A, focus on having a purpose. And one of the jobs of a leader is to provide purpose to their organization so that the people in it have purpose, so that they don't feel as though there's no reason for this and become helpless and hopeless. The helplessness of hopelessness is probably the greatest enemy. We may call it melancholy, we may call it depression, call it what you will, but the helplessness of hopelessness is the real enemy. So you have to have purpose, and you have to be busy, and you have to manage your time, and you have to exercise. Um, stress is a weight that lays on top of hopelessness in a crushing form. By being able to exercise, you're able to burn off that weight of stress. And the greatest stress reliever that I have found in my life really is exercise. That hour, half hour, 45 minutes, 2 hours, whatever it takes at your level to get that exercise in, that's really important. And that gives you the chance to have clarity. Because when your mind's obscured with nonsense that's all negative, and then it's exaggerated by stress, and you get those tidal waves of anxiety driven by hopelessness, you become paralyzed. And what kind of state is that for a human to be in? It's just not that bad. And then you're able to go, well, maybe it's not that shitty, and maybe it's not that awful, and maybe it's not that bad. I'm going to grab myself by the socks, be a guy, and go do what I'm supposed to do. And I have to do this, this, this, this, and this. And when I get that done, I have to do this, this, this, this, and this. Keep the list long and full and stay busy and stay focused and keep that anxiety at bay and burn off that stress and keep the busy business at hand. You're making your mind focused so that you don't obscure your thought.

I love it, Stan. That's exactly, that's awesome. You know, there's an actual neuroscience behind what you do and exercise. You get a dose, which is your brain gives you dopamine, oxytocin, serotonin, and endorphins, and those are the 4 elements, and that creates what you describe as clarity, that stick-to-itiveness, go, get rid of the negative attributes, how we perceive things, and just move forward, have that hope, get rid of the helplessness, as you said, of hopelessness. I think that's a great phrase, helplessness of hopelessness, so you can move forward. I think it's such, so important to be like you are, Stan, with 12,000 employees and being optimistic, being positive. People are attracted to that. People, because it's such a difficult time right now, of those 12,000 people just in COVID alone, you could just the statistics, many are, are, have some sort of adverse effect, whether it be families.

All of them are touched.

All of them are touched, and some are to different degrees, right? And some are extreme, some are urgent, some are moderate, some are just at home, right? And they deal with the depression or not being around people, you know, don't have the dose. I think it's really inspiring to see a leader who's doing what you're doing and keeping positive, and I know great CEOs do that. They very much do that and they bring— and they, they have to get away from the office and people when they're not in that mindset, right, Stan? Because then it doesn't, doesn't create that positivity in that or for the vision of what you want for your company.

If you're going to hell in a handbasket, who wants to follow you there?

Nobody, nobody, nobody. You got to keep, you got to keep that focus. I— that's right, that's right. Stan Millman. Freedom Warrior Company, making it happen. Thank you so much for joining me. I love your purpose-driven work and your positive vision, the way you empathize with people, enable outcomes really by creating a positive culture of accountability. It's very clear that you are an In Great Company leader and emotionally connected. Love your work. I think you're a great guy.

Hey, thanks for having me.

Good to have you, Stan.