Beyond Business Books: The Unspoken Realities Of CEO Life With Michael Girdley

We all know that the internet is a cesspool of nastiness, but it's also an awesome place. And the reason it's awesome is because you can meet people like Michael Girdley. Michael Girdley is someone that I followed on Twitter for a number of years. He's been a, uh, guest on Construction Genius, and it's so great to have him on the show today because he has built a number of businesses functioning as a CEO. And as a result of that, he knows what he's talking about. And we're going to dive into a number of topics today around what it's like to be a CEO and the challenges that you face as a CEO. Including the fact that your company is not a family. So, you need to stop calling it that. The CEO role is a lonely job. As the CEO, you're always the last to know. And as your company grows, your job as a CEO changes. And that can be tremendously challenging. So, these are some of the very practical areas that we talk about. Again, Michael is a practitioner. So, he knows what it means to be a CEO and to function at a variety of different levels. Of a company's growth. You're going to enjoy this conversation. You're going to tremendously benefit from it. I encourage you to think about 2 or 3 takeaways from this episode that you can immediately use to help you to perform better as a CEO in your company. And I also encourage you to share this interview with other people. Thank you for listening to Construction Genius. This is Eric Anderton, and you're listening to Construction Genius, a leadership masterclass. Thomas Edison said that genius is 1% inspiration and 99% perspiration. If you're a construction leader, you know all about the perspiration, and this show is all about the 1% inspiration that you can add to your hard work to help you to improve your leadership. Michael, welcome back to Construction Genius.

Excited to be here. Let's construct some stuff.

Dude, let's go. All right, you put together a Twitter thread that caught my attention a little while ago, and it was the 15 things that are not mentioned in business books. And we're not going to dive into all 15 here today, but there's a few that I'd like to dive into. And so, one of them was that the CEO is a lonely job. Can you please tell us about that?

Yeah. No, I think CEO job, if done right, is kind of akin to the way like military folks think about leadership, right? I'm a big believer in hierarchy is the, the optimal way to get a mission done. And I think that expands to business as well. So if you look at it as a CEO, right, the organization gets bigger and bigger and ends in a point at the top where the CEO is the only person doing that job. And unlike other roles where you're one of 15 HR managers or one of 5 accountants and a member of the team, you know, the CEO is typically one, if not the only people without a peer in the company. And similarly, you know, you're having to be a CEO of a small company, and there's things you can say and there's things you can't talk about with the people that report to you because they depend on you to be their leader, not their shoulder to cry on, if that makes sense, in terms of you bringing your problems to them. So that's why I think all that comes together to be potentially, you know, if not the loneliest job in America, the— definitely the loneliest job in each individual company.

You've been the CEO of a number of companies. You've built a holding company. Um, how do you manage yourself personally? How do you manage that loneliness? What do you do to, to manage that? And maybe the isolation you feel, perhaps even the— sometimes the desire at times to overshare and having to control yourself there. Could you talk about that, please?

Yeah, well, my job these days is I'm not really CEO of anything. That's— if I am, that means there's been a problem. The CEOs of things that I'm involved in, they're doing their jobs, right? And I had my tours of duty being a CEO. And now I find much more, you know, joy in supporting them and coaching them through their journey and doing what's right for them at their point, at this point in their life. You know, in terms of how I deal with it personally, I feel like I've got an ample supply of those sort of things. I'm in a CEO peer group. So I actually have everybody I'm involved in, in that CEO peer group. I have the fewest direct reports, which is 2 currently of people that work directly for me. So I'm in that group. So that provides a great opportunity through lunches with the peers, through people that are in business and trying to achieve things hopefully like I am. I get to talk to them there. I'm in a number of online peer groups that are more informal. They're mostly Signal and WhatsApp chats with people that are on a similar journey, whether they're podcasters or Twitter content creators. And then I have friends, right? And I think a lot of my friends are people that are folks on the same journey I am. You know, like in January, I go on a guy's ski trip that I organize and like 14 of the 16 guys there were— and we're CEOs, we're business owners, you know, people I could talk to about problems I'm having. So— and then I have my wonderful wife, like, who I can talk to about stuff all the time. So yeah, I got plenty of shoulders to cry on and talk to. And I think that's, that's a good way to go through life, at least for me.

It's interesting because it sounds like you've, you've been very conscious about that. And typically a lot of CEOs, they're, they're— they get consumed in their businesses, and, and, um, as a result of that, they don't necessarily have that outside network. So how did you go about consciously developing that network, or is that just part of your personality?

Uh, it's, it's interesting for me. I tend to instigate things a lot. I'm a grand instigator on stuff of those like Signal chats and stuff that I talked about. I started all of them, like the WhatsApp chats. And then for my CEO peer group, I am the number one referrer of people to join the CEO peer group. So I tend to be the person that's like, hey, I'm going to go on a ski trip. Would you 18 people like to come? And so it's very much orchestrated. And I wouldn't say that's very intentional. I would say that's just my nature, right? And my nature to be very logical and be like, you know what would make this more fun? If I had 15 fun people that I all liked to go with me on this ski trip. And I figured out how to do that, which is if you're the organizer, you get to invite the people that you like the most. So like, I just invite the people that I like the most, and that's just my strategy. And to put that in perspective, to have 17 guys come on a ski trip, I invited like 60 people and it was 17 that could make it. So, that's how many people I know and how many people I like and I wanted to spend time with. And that's just a byproduct of my nature such that, yeah, it's just how I run things.

Let me ask you about the CEO groups. I know it's a strategy that clients of mine have used. They have peer groups where perhaps they go with themselves and a couple of people from their organization. And then, CEO group, that's a slightly different flavor. How did you go about selecting a CEO group? And what are the biggest benefits that you get out? And what are some of the, perhaps, the pitfalls to look for when you're looking for that kind of association that you want to avoid?

Yeah, that's great.

Yeah.

So, I think in the universe of organized CEO peer groups, and I'll just talk specifically about the organized ones, there's ones that organize based around, you know, business size. And so, that's— and they're kind of the classical networks. So, that's where you see like EO or YPO. Yeah, I do Vistage. Then, you know, we just launched one that's actually for smaller companies who aren't ready to be in an EO or YPO yet called ScalePath. So we launched that last week or earlier this week. Time flies.

It does.

So there's that kind of— there's that kind of network of peer groups that are organized based on kind of business size. So we're targeting kind of the $500K to $5 million revenue business size, less than 30 employees. Yep. Then I would say there are, there are topical or industry-specific peer groups. So like one of my buddies is in one of those and he does specifically the— it's just for people that own staffing companies. So he's actually in my Vistage group and he does this topical one as well. So you see a lot of those. There's like ones for SaaS founders or construction people and kind of, kind of do that bucket. So for me personally, I started in the kind of EO Vistage type thing. And that was actually the journey I did. I first joined EO, and for me, that was an exposure to what kind of this peer network stuff could be. It was a forum type situation where you meet in a small group and then there's, you know, basically chapter-wide meetings that happen on occasion. And I learned a few things being an EO. One is that I am a pretty hard charger. And EO here, I wanted the meetings to be much kind of more more nose to the grindstone type thing, more accountability, people pushing harder. So I ended up switching to the local Vistage chapter and ended up working with a man named Tom Cuthbert here. And I've been, I think, one of his oldest members for the past 10 years and maybe longer. I can't keep track. It's been a while. And I liked it because Vistage, Vistage, at least in Tom's world, is much more hardcore, I would describe. Like, we're very focused on pushing. He chairs the meetings. Like, there's a level of accountability, like T, you know, that matches my personality in terms of what I want to have. If I'm going to be going in on something, I want to go all in on something. And so that's how I've been doing Vistage. And I think that ties back to when you think about joining a peer group like that, people think like, oh, National EO is like the same everywhere, or YPO is the same everywhere, or Vistage is the same everywhere. And really, I think the point I wanted to make is like, your local EO chapter or your local YPO chapter or Vistage or TAB or whatever one you decide to join, like it is a reflection of the personalities that you're working with, of who's running that local chapter. And so even here in San Antonio, the different Vistage groups are very different. Yeah. And like I wanted to be in someplace that was pretty hardcore. There are versions of Vistage in San Antonio that are not as hardcore. Yeah. And I think that's where you have to go kind of shop for a group that's going to make sense for you and your culture. And I remember meeting with a group and I'm monologuing, so I'll keep going. But you're good.

No, no, no, you're good.

Monologue.

It's fine. It's fine.

There was— so I was like considering joining a group here that I won't name and I go like meet with the guys and it was all guys in the group and that was like first kind of red flag for me. And it would be like 10 of us. It's all guys show up and they're like, okay, well, we're going to do an interview with you on Tuesday at 2:00. We're going to meet at this bar. I was like, bar? Who goes to a bar Tuesday at 2 o'clock? You're either an alcoholic or a loser. Right, right. Anyway, that's in my mindset. So we go to a bar and it's like everybody's drinking Tuesday at 2 o'clock. I was like, wait, I want to be part of a serious group that values stuff. And they proceeded to tell me about all the times they got together and partied and did stuff out, you know, extramarital stuff and got crazy. I was like, aren't we like 35 years old. Like, this is, you know, this isn't the right fit for me. So that's where that interview process is so important, to like go in and understand, like, is this a group I share values with? Do they have an attitude like I do? Do they have the same objectives? And, uh, you know, and really interview them to make sure it's going to be a good fit for you. But that was super eye-opening to me. I was like, why are we doing tequila shots at 2 o'clock on a Tuesday? This is not the group for me.

There you go. No, it's great. Um, so let me go back to something you said earlier, just at the beginning of your, your thought on the Why the CEO Is a Lonely Job, and that's this idea of hierarchy. And you said in your experience, hierarchy is the best way to build a business and to execute a business. And yet, oftentimes, it seems with younger generations— and help me with this— with younger generations, the thought is we don't want to be hierarchical. We want to be collegial. We want to be teamwork and all that kind of stuff. How does that sort of hierarchical perspective play in with the hiring of younger people into your organization?

Yeah, it's, it's super cool. And I think millennials, millennials typically bring that, right? Because they look at the world from a very different universe than our generation and much different than the baby boomer generation.

Yeah, right.

Like, so it's a funny thing. And my CEO peer group, they actually had us one day separate— a speaker had us separate into generational groups and like each generation proceeded to separate and do a little task on their own. The millennials all went off and did their thing. The baby boomers, the first thing they did was spend 5 minutes worrying about who was going to be seated where in their little area in terms of, okay, what's the hierarchy? How are we going to get together? How are we going to make sure I see everybody's, you know, be deferential to the right people? Who's going to be the leader? And like the Gen X, of which I'm a group, I'm 48, like we just walked over and like one of them's like, I'm in charge. Let's go this way. And then we just started doing the work and we were done really quickly. Now that doesn't say our work was better, but the boomers were still figuring out who's in charge because they have a different kind of mindset to it. And so to me, that really ties back to, you know, when you're interviewing people, you have to think about each person coming in comes from a different place, right? They're a different generation. They have a different upbringing. They're wired differently in terms of how they think about stuff. And, you know, my answer to that is, you know, each one of those groups will bring strengths towards how you're going to achieve your mission, but also weaknesses that come with it. And I think you're talking about one of the challenges in dealing with millennials And that's where during the interview process, you know, I'm being very stereotypical, but please, the interview process for boomers or Gen X or Gen Z, like you have to make sure that they're going to be aligned with you in terms of how you're thinking about the mission. And there are some companies that just run as a kumbaya, hey, like, let's make sure everybody gets taken care of. We don't care if we make that much money. I know some companies like that. They can have, you know, have fun, guys.

Yeah, go ahead.

Yeah, yeah, that's your call if that's what you want to, you know, And I have a friend, he makes several million dollars a year. He could make several, several million dollars a year if he really ran his company differently, but he runs it closer to being a public service than he does getting rich. And he's pretty rich. He could be richer, but he doesn't want to be, which is fine. And then, so I think that's where during that interview process, when people come in as themselves, to me, you really want to understand, okay, are they going to align with your core values of how you think about stuff? And for me, we have a mission. We want to try to create things that are going to achieve. As people and as a company. And either you're going to be in line with that or not. And if you're not in line with that, then there's probably a better company for you to work at. It's just, just not ours. And so that ties back to this idea of, okay, mission has to trump other stuff within reason. And the way to get everybody to achieve the mission the most efficient way is to align everybody towards a single goal. And you do that through hierarchy. That's kind of the logical reason of how that all comes together.

Let's talk about the interview process real quick. You brought it up. What are some of the best interview questions that you've used, particularly around this area of whether someone's going to accept this idea of hierarchy, or specifically someone is going to fit in with your mission, your culture? What are some of those questions?

Yeah, so the, the best questions, or the best line of questioning for me, is really to understand what somebody's past has been. You know, most people come in, um, or you meet them at a party, or they come in through an interview process, they're telling you who they are. If somebody, you know, it's kind of the old kind of, uh, line, if somebody's telling you who they are, you should listen. And I think the best predictor for what is going to determine how somebody's going to act in the future is how they're acting up until now, right? And so, you know, if I, for example, interview you and I discover that in college, um, you were not the fastest person on your swim team and you decided to quit, well, that gives me a pretty good indication of what you would do in your first job. And then if I hear that you did it again in your second job and your third job, or there's a pattern there, that pattern is going to give me a great predictor on how you're going to perform when you come work here or work with me. So let's say you're somebody who came into a company and you pursued exclusively your personal agenda at the expense of the company's mission. Well, I'm pretty sure you're going to do that when you come here. So when I interview people, I spend a ton of time understanding, okay, tell me about your story. Tell me Tell me what motivates you, how you're wired, where you're coming from, you know, what was your college experience like? What was your first boss like? What was your second boss like? What did you like there? What did you dislike there? Why did you leave? All that gives me insight into what you're going to continue doing because it turns out like humans, we're pretty predictable. Like we just keep doing the same thing over and over again. So that's, that's my strategy to understand that and give you a good idea of how somebody's going to perform in the future.

Do you ever find someone like when you're asking them about their past, there's a— and typically I think this happens usually in sort of late teens or early 20s, but there's like a pivot pivotal moment where actually something changes and their behavior changes, and that then establishes a new pattern. Have you ever noticed that?

Uh, it happens all the time. Almost everybody has one or two formative things that happened in their youth that comprises a little shell, a little core of how they act today. So for example, um, yesterday I was in an interview and the gentleman or gentlewoman was talking about his, his or her family got evicted 3 times before the age of 15, and they would get rousted out of their house in the middle of the night. And so the echo of that is this person has gone on and has zero debt in their life, is living the absolute possible way that it would be impossible for them to ever get evicted again. Hmm.

It's so interesting.

It's like But like, if you, if you think about what happens there, you see extremes that happen to a kid or a person in their formative years that echoes back in how they deal with everything. Yeah. You see people that were abandoned by their parents or you see somebody, you know, I can tell you, I'll tell you what my hangups are. I've done this thing enough to know, like, I got, I got 2 or 3 chips on my shoulder. I'm still working through them.

Yeah, right.

And, and but that's okay, right? That's okay. Like, my response, as long as your response to them is a healthy thing, that's totally fine. But as somebody wanting to get to know you as a person, as you're coming into a company or a work environment, I want to know how you're going to— how you're wired so I can create the best environment around you so you can thrive when you come work here. And so I think that all that is totally fine. And I'm not going to beat up somebody because they got, you know, they act a little different now because of that, like, childhood kind of thing that happened. And all of that is— it's just fascinating for me. Yeah, I don't know if I— it's clear I get excited about it. But it's great to really understand people that way.

So, you have to really take your time there and from what you're saying and go into the past because the past is the predictor of the future. And like you're saying here, people changing particularly as adults is something that's very difficult. So, if you're picking up those patterns of behavior, expect those when you bring that person on board.

A million percent.

Okay.

They're not perfectly predictive but they happen.

Yes, they do. Yeah. Again, and when it comes to hiring, it's not a science. It's kind of an art and a little bit of science. And so, you have to be looking for those patterns. All right. Another one that you said that I really like, and this is particularly good. I'm out in California. So, you hear this a lot in California. You said, "Your company is not a family. Stop calling it that." 100%. Go on that one.

Oh, I have so many good rants about this. I mean, I think it's totally— I am wired that I hate stuff that's disingenuous. Yeah, like it's stuff, it's stuff that's like, don't blow smoke up my butt, just like tell me how it is. And I think that is, that is perfectly that, right? When somebody's like, our company is a family, like that is total BS. It's total BS. Nobody fires their cousin because we, you know, because we're— business went down 20%. Like you don't fire your mom, right? It just doesn't happen. You may get estranged from your mom, but you don't fire her from the job, like box up her stuff and walk her out to the curb. Or negotiate a severance agreement. So, the problem with using the familial, we're a family language is it's just you're sitting there lying to your employees. And it's bad language. And I think when you double-click on it and you ask people, why are you using that language? Why are you saying we're a family? It's because what you're really trying to say is I am using a lens of looking at you as an employee or a teammate that you're a person first, that I care about you as a person. And that is going to be my lens of how I think about everything I'm going to do with you. You, and I'm going to use a human-centric lens, not a machine-centric lens, to think about you. You're not a tool for me.

Yes.

But you people use the language so sloppily to say we're family, but it's not. It's a total fake thing, and it's— everybody knows it when you say it.

Yeah.

So that's where I encourage people to be like, we're an all-star team. This is the language I use: we are an all-star team. We're, we're on a mission. That is the focus here. And Yeah, I didn't adopt you, but I am going to treat you like a human being, like a person first. And then I'm going to balance that with us trying to achieve this mission and go from there. So that's my whole rant against the family thing. Like every time somebody uses that language with me, like we're a family or whatever, I like, I know they're about to screw me. They're going to rip me off because it's just so bad.

So, so then how does that, does that interact at all with this idea that it's hard sometimes for people to fire? People to let people go because of that perceived family dynamic? Does that ever play into it?

It potentially does. I think most people are, you know, are risk-averse or failure-averse. They delude themselves. Oh, well, you know, Jim's just going through a tough time. You know, he'll come around. You know, Eddie will come through. He started out great. Or it'd be so difficult to replace, you know, Jill. She's been here forever. I think at its core, most people are lazy and self-delusional, and it tends to be that way. And they're scared. They don't admit they made a mistake. Those are all very difficult. It's going against so many aspects of human nature. I think that's why we don't help people move out the door as quickly as we should on a recurring basis.

Okay. So, let me ask you this. I can recall a time in my life, I'm thinking back 20 years plus, and I was working for a small entrepreneurial company and I was a high performer in that company. And then I hit a rough patch personally and my performance dipped. And the CEO came up, you know, beside me. He asked me what was going on. He put his hand around my shoulder, so to speak, and he supported me through that. And it lasted for a period of time and then I came out of it. Have you ever— because you just mentioned something there about, you know, someone's performance dipping. How do you distinguish between someone whose performance is temporarily dipping and someone who's you know, just no longer performing at a level that they were performing at and they need to go.

Yeah. Yeah. Well, what are the— one of the frameworks I like to, like to use to think about people is like your contribution to the company or your fit at the company is not single. It's not single dimensional. And the one I actually like the most is the one EOS has, the Entrepreneurial Operating System. They have a people analyzer that uses 3 dimensions. Yep. Do the people want to do it? Can they do it? And do they get it? Yep. And so what you'll see is the highest performing people hit all three things. So can they do it? Like, do they have the mental horsepower? Do they have the skills to do the job? Want to do it, the W. Do they, do they have the right cultural fit? Do they want to achieve and do good things? And then get it, like, are they in tune with your culture, your mission, the way everybody kind of gels, like, Do you fit the culture? And so what you'll see is, is some of those, like, lacking when somebody's not performing well is typically one of those 3 areas. And so, for example, if the problem is a can-do-it problem, right, like, in your case, you could do it before, but you're not able to do it right now. Like, that's a temporary thing. And you can start to work with a person on a personal development process to get them there. But you'll see things also where there's people who just like they're just not mentally capable or they can't, they can't assume risk or they can't be precise enough to do the job right. In that case, like you should be realistic about, okay, we're not going to, we're not going to fix that. Like you just need to find a better job. This is not the right job for you. You're not a bad person. We just asked you to do the wrong job.

Yes.

And so, you know, in your case, like you were going through a rough spot and that's where like I think a boss can use a framework like that or another one and understand, oh, this is a temporary thing. Let me be part of looking at you as a human first. And then help you develop back to where you used to be before and get you there. Right. And so that's kind of that temporary versus permanent problem. And in your case, it was temporary. And yeah, I've dealt with that. You just, you just work with the people as best you can.

Yeah, it's interesting because sometimes the idea of wanted, that motivation, sometimes you have a high performer and all of a sudden, for whatever reason, they just lose their desire to be in your company and they're, they're just, they're done and they're checked out pretty fast. Do you ever see that happening?

Yeah. I mean, all kinds of versions of that. I had a person working with me 15 years ago and he had a bad back injury. He got on opiates to deal with the pain and, and he went from totally motivated, in tune with everything, and his, his W and his G just went off the cliff like he didn't get it anymore. Like he wasn't into the culture, didn't really have any kind of focus anymore. Like the drugs took over. And we'd be on calls and he'd just be in crazyville, like one out of every three calls, because that, that just wasn't— it wasn't the right fit anymore for him. And, and so there's all kinds of factors that it can get you there. And I've seen it with drugs like that. I've seen it where people go through, you know, trauma with their family, personal trauma. Yes. People, you know, I've worked with CEOs in the past where they've had a kid pass away, like just it's totally transformative for them. And You know, ultimately, you do what you can, I think, to help those people, you know, do what's best for them, but not at the expense of where the company and the other teammates and the owners are gonna have to suffer extraordinarily for that. So it's always a judgment call. But trying to do right by the people, I think, is, is the best thing.

Hey, this is Eric. Hope you're enjoying my interview with Michael. I know that I am. Just a quick reminder. We're talking about what business books don't tell you. Well, let me tell you about a business book that's all about what it means to lead a construction company, and that is My book, Construction Genius, effective, hands-on, practical, simple, no BS leadership, strategy, sales, and marketing advice for construction companies. Let me tell you how to use this book effectively. Purchase a copy for you and every leader in your organization. And then, it's got 12 chapters. So, over 6 months, you can read 2 chapters a month. Get together for 30 to 45 minutes. Discuss each chapter. Think about 1 or 2 takeaways. Implement those takeaways into your leadership role, and you'll see improvement over time. The best news is this book is only $20 on Amazon. That's a killer deal, man. If you get this book and you just take 1 or 2 ideas from it, you'll get a $10,000 return on that investment. So go out to Amazon right now. Purchase yourself copies of Construction Genius. You'll love the book. I promise you'll get tremendous value from it. And now, let's get back to my conversation with Michael. How do you personally manage to maintain your, your motivation and your, your drive in the business environment when you're feeling pressures personally or something like that? Some of the things you just spoke to there, what do you do to, to either compartmentalize or keep focused, um, as you're going through your business journey?

Yeah, uh, I am fortunate to be wired this way. Like when I'm engaged in something like the past 40 minutes we've been talking or how long we've been talking, 32 minutes.

Time's flying.

Yeah, it's going great. Well, it turns out I like everything that I say. It all starts out super genius. But, you know, I have a, I have a great ability when I'm present, I'm present, right? And, and I think it's also I feel very fortunate to be getting older. You and I are of a similar vintage, but the shifting of hormones over the years has been one of the best things for me, period. Like, I am so much happier as a 48-year-old than I was a 28-year-old, than I was an 18-year-old. Like, hormonally, like, whatever's changing, I think it's great. I'm just like, like, just flat as a pancake all the time. I don't get too excited, I don't get too down. And I have the gift of experience now where, like, I know, oh, like, I'm super tired, that's why I feel down, or that's why this is bothering me, I need to go take a nap. Like, I've seen the— I've seen the movie enough times that I know how it's— how, how to deal with it. And You know, those are the two things, the gift of experience and the gift of just changing biochemistry. Like, it makes things a lot easier. It's a lot easier.

Yes.

I highly recommend getting older.

Yes.

I recommend that.

Yes. I'm with you there. I'm with you there. There are the blessings of old age as well as the, uh, the challenges. Um, let me go to this other, uh, area that you talked about, and I'm thinking a friend of mine right now who's, he's a dear guy and he's, um, he's been working on a startup for, for many years. And every time I talk to him, I think, dude, you need to sell something before you, you really keep working on this idea. Because all he's doing is working on the idea, working on the idea, pouring time and money, but he hasn't sold anything yet. So tell me about that. Sell first, that idea.

Yeah, well, it turns out that the best way to build a great business is to get and build something that people really want. And the best way to find out for sure if they really want it is to get it out there as quickly as possible and try to sell it. And so that's this mantra that I have where, you know, you go out and you find people who are ready to be early adopters of your thing and get them to put some money down, get them to commit to your thing. And truly, that helps you understand much more than what they tell you they're going to do, what they say their problems are or not. Like that whole economics, like the revealed preference idea, like it helps you dig past all of the psychological BS that people have, their needs to lie to you and be, be polite. Yeah, that's a great idea, etc., etc. Like it cuts through all of that when you're like, okay, well, I'm glad you like the idea. That'll be $200.

Yes.

Oh, okay. Oh, it's not worth $200 to you? Like, what is it? I had this— I had a conversation yesterday with a future potential partner, you know, in a new, a new venture with me. And I was like, okay, here's what we got to do. We'll go have 10 meetings and we'll see if anybody wants to buy this thing. That's the first step. And he's like, before we build anything? I'm like, absolutely.

Yes.

Because that's the biggest risk here. Like, does anybody actually want to give us money for this? And you go sell it first and really understand if people are willing to try to put money down on it or commit to it. And that tells you much more than any interview or guess or expert research or Gartner report. Like, who cares? Like, let's see if we get some money.

That's right. Yeah. And I think in the world of construction, the context being because of the risks involved with entering into projects, You start small. You go out to an owner or something like that and you say, hey, you got a small project I can work on. You build that right. You get some money for it and you learn and you grow from that point right there. Let me go to this other idea here. The CEO is always the last to know. As a dad, I can appreciate that. That's something where I'm always having to be on the leading edge asking how things are going. Tell me about that CEO is the last to know.

I'm curious as a fellow dad, do your kids rat each other out when they want to get back at each other?

The main thing I'm getting at the moment is, I'll tell you what I get, is my older kids— I have 5 kids, so my 16 and 17-year-old, they come in and say, hey Dad, the 8-year-old, you know he's behaving like a punk, right? And so what they do is they're like on my mindset in terms of how a child should behave. And so they're always pointing out, you need to deal with that, you need to deal with that.

That's so funny. Yeah, go take care, go Go do some parenting. Yeah, I know. Well, yeah, this is an idea, a dynamic I would notice in being a manager, then a director, then a VP, then a CEO. Like I would, I would go talk to some trusted person, you know, on the staff. And almost universally you'll see in every high-performing company, the senior-level staff has one person who kind of runs around and is like the lubricant and glue. Like everybody knows, everybody knows Jill or Jim because they all love Jill or Jim and they've been Jill or Jim's ear. About everything. And the CEO ends up doing the same thing. It's like, oh, I love talking to Jill. I'm going to go talk to her. And I discovered like 4 or 5 times I would go talk to Jill or go talk to some teammate who was pretty plugged in. I'd be like, have you noticed that, you know, Bill's performance is really slipping lately? And they all would say the same stuff. You're just noticing now? Like, and it would happen over and over again. And it, it led me to understand that those connections that happen inside of the company across all those people, you have 50 people, they are all chitter-chattering. Because they got nothing else to do and they are gossiping and talking and complaining about Bill or Ed or, or so-and-so employee for letting them down. So the frustration is almost universal. And I can see that this now because part of my job is to do, you know, performance reviews for CEOs. And you would think going in and part of what I do is I go talk to every one of the CEO's reports and some other folks as well. And I get feedback on that CEO. And you would think, oh, there's going to be a lot of nuance and different things that people say about that CEO's performance. And that is not the case. Almost universally, people will say one or two things are going well and one or two things are going poorly. And everybody says those things about the CEO. Everybody knows the CEO has no clue. No clue.

Interesting. Interesting.

Yeah.

Is there any difference between the performance reviews you do for the CEO and for, uh, someone in a different position?

Uh, the main difference is in terms of my ability to actually have insight in terms of what that person's doing. So like if you're managing somebody and you're doing a review of them, which is typically how it's done, you as a manager understanding their priorities and their ability to complete tasks. As a board member doing a performance management process for CEO, I'm not telling them what to do every day because CEOs are supposed to be autonomous in terms of self-prioritization and projects. I'm seeing things at a board level. So that means for me to be able to do a good review of them, I have to go get data from other people who are actually the CEO's peers who are working with them very closely in order to do a good job of it. But other than that, it's the same stuff. You get, you get data. You have a meeting of the minds with the CEO about how they, how and what they should be working on. Then you develop a plan and you manage through that plan the next year to help them become their better selves, you know, over the next 12 months. And then you do it again.

I know you have a process that works very well for you. Can you just very briefly outline your performance review process just so people can glean from that, please?

Yeah. So we do, and you can find it on my Twitter and website. I wrote it down for free for people because that's what I do for fun. The basic process is one where I alert everybody and work with the CEO to understand, OK, who are the people that can best give us insight on your performance? And that could be 6 to 8 people. And then the second step will be the CEO writes a self-evaluation using a standard set of questions. So reflects back on their past year and their performance. In parallel, I write a review based and answer 4 or 5 questions based on what I know about the CEO. And we have a standard set of questions we do for that. And then based on the list that I put together with the CEO of people who know and are working with them the most closely, we will put together and send these other folks a data gathering exercise. And that will be all done through a SaaS, a software app, and they'll fill out the stuff and then I get all the data. And then in many situations, I will read through all the data. I will kind of analyze it before I meet with the CEO and I may go have phone calls and further conversations with the peers to kind of double-click on stuff because you start to, you know, you miss things in the writing. And then based on that, then the next step is get together with the CEO and we go through the data. It's like, here's what I heard, here's what people are saying, here's some challenges, here's what you said, here's what I said. And you kind of get it all on the table. And then the last step is take that, we synthesize that into a set of goals that are going to be things here. You're going to work on these for the next year. And then in my one-on-ones with them and meetings and board meetings, like we track those, hey, you were supposed to work on being more available. What have you done this quarter about that? Tell us more. And then hopefully over time, that kind of check-in and, and one-on-one and me probing, it helps them develop new, better habits. And the next year, hopefully the news is better in that particular area. And then we do it again.

How many specific goals do you set from the performance review typically? Is there a range?

I try to keep it relatively 2 or 3 or fewer. I think a big mistake people do in performance management is like, here's the 18 things you need to work on, as opposed to just saying like, oh, let's pick the top 2. And the danger with doing 18 things is invariably you do try to do too much at once and you work on none of them. And you're much better off just to pick a couple, pick your battle, and then move on to other ones the next year. And a lot of those, like number 10 through 18, that were kind of important, like they don't show up the next year anyway. Like you end up with new problems.

Interesting.

So you might as well just focus on the top 2.

Excellent. Okay. So there's another one that this is, and this will be the last one that I ask you about specifically from the list. The CEO's job changes at each stage of the company. Please describe that a little bit.

Yeah. So this is the idea that there are inflection points as a company grows where you're adding another layer of management. Basically, if you stick to this hierarchical idea, that's, that's conventional in terms of how people organize businesses, right? So let's say that you're starting a company. The CEO is individual contributor strategist doing everything. You're selling the first whatever.

Yeah.

And the challenge is that can only grow to a certain level before you have to start hiring help. Right? Let's say that's $500,000 a year in revenue, right? Which is about where like law— lawyers can top out, right? In terms of revenue, right? Right. You start to hire help, right? And so suddenly you're a manager and your job changes again. Now you're manager and player coach and you have people working for you. And then the company grows to a certain point and that kind of structure of a single manager and employees can get you, let's say, to $1 million in revenue or $1.5 million in revenue. Then you have to add another layer of management. So then at that point, your job is to do some of what you were doing before, but now you're managing the managers, right? Because you have two layers of management under you. And it continues on. And eventually you get to a point where, let's say you're, you're managing VPs and VPs have directors and directors have managers and individual contributors working for them. And so your job has to change again, right? Because mostly instead of making sure the managers have their priorities straight, you're coaching VPs on how to how to deal with directors who are dealing with their level of stuff. So, your job changes as the organization grows and it coincides with this adding different layers of management each way up the org.

How does that idea of your job changing, how does that fit in with the framework that is in the Traction book about the difference between a visionary and an implementer?

Visionary and integrator.

Integrator, thank you. Excuse me, yeah.

Yeah, yeah. So, I think that EOS kind of dances around the idea of telling people there are, there are certain CEO jobs that maybe aren't the right one for you. So in my case, once a CEO job gets— once a company gets too big or too process-oriented, too standardized, like I'm not the right CEO for that. EOS kind of implies you can stay forever, and I don't think that's true, right? I watch what like Marc Benioff or Mark Zuckerberg have done to take a company from just a PowerPoint to like $100 billion. Yeah, to me that seems like magic. I don't have that capability in there. I don't— I can't do that. I'm too shiny object oriented. Too, too kind of fluffy in terms of how I approach it. You know, but similarly, like the job of the integrator, which is typically a COO who's internally focused integrating all the functions of the company into one, that one changes as well, just like the CEO job changes as well, because your reports underneath you are doing the same thing. But it does feel very, you know, EOS is very stringent about it. And I think it's totally right. The optimal structure is visionary, outward-facing CEO, and then inward-facing COO who is making the trains run on time. And if you look at Facebook, Facebook had that, right? Like you had Sheryl Sandberg and she made the trains run on time and Mark could go do stuff. And you look at when Facebook recently started to go off the rails, you know, Sheryl kind of retired in place a few years ago and then finally left the company. And now there's not really that person anymore, as far as I can tell. That's— that was the moment Facebook started to make some real mistakes because there wasn't that counterbalance to Mark's vision. Inside the company. And this is all just kind of like, I don't know anything about Facebook, but you can kind of, to illustrate the idea of, you know, I really buy into that visionary integrator combination, but both of those roles change at each stage of the company's kind of evolution.

I was thinking about Amazon with Bezos, and he seems to be kind of both in a certain way. He's kind of an ass kicker, but at the same time, he's got this big picture idea as well. What do you think about that?

I don't know anything about Amazon other than everybody tells me it's a terrible place to work.

Right. That's what I mean by being an ass kicker. Yeah.

I mean, they've got a machine down over there where I've had friends that have gone to work there for 12 or 18 months and they're like, yeah, they paid me a lot, but I— all my hair fell out and my blood markers went to shit and my doctor told me I needed to quit. Yeah, I hear that over and over again. But I have friends that have been there for 20 years and love it. So I don't know. I don't worry about it too much beyond hearing the rumors. You know, I think Mark is Who are we talking about? Jeff Bezos is somewhat retired at this point. So the only pictures I really see of him now are on—

On Instagram.

On Instagram.

Can I get some of those steroids? Can we get some of those, do you think?

You totally can. I don't— I mean, philosophically, I don't buy it. Like, you know, everybody wants a pill when you should just work harder. There you go. Like, eat better. That's my advice to you. Eat better.

Let me go back to the visionary thing real quick. If I'm a visionary, what are 2 or 3 things that I need to do? Because I know plenty of guys like this, right? They've built a killer company. They've sold a bunch of— they sell and they sell and they're really good. And then, they just struggle because the operations kind of have issues.

Totally.

So, as a visionary, what are 2 or 3 things that I need to be doing on a weekly or a monthly basis to make sure that my operations are dialed in?

Yeah, I think most visionaries are delusional about being good operators. Yes, I think most of them, most of them are convinced they're really good operators because they built a business from 0 to 10 or 0 to $20 million. And you can will a business to that.

Yes, you can.

Despite kind of flaws and stuff like that.

Yes, you can.

So you asked for 3. I just think it's number 1 is just be realistic about how you're wired.

Yes.

Like as a younger man, I thought I was a really good operator. I am not, because I've seen good operators and I know how they operate. And they are not— they, they don't have the same strengths I do, but they don't have the weaknesses I do. And so, you know, I think that's where every delusional visionary entrepreneur should just be realistic about where they're good and where they're not. And from that, you can start to do so many really good things. You can start to trust people that are potentially better at those things. You can stop, you know, yanking, yanking your chain of your company to every single shiny object that potentially you're going to be chasing. All those things start with being true to who you are and being realistic that you're not some God's gift to the universe because you built a $10 million company. That's really hard.

It is.

But it's possible to do it while doing it with a lot of mistakes.

One last question. This is not on your list, but I want your perspective on this. What advice do you give to CEOs about hiring family members?

I think it's a pretty bad idea. In my organizations, we have strict non, uh, anti-nepotism policies. We don't do business. We don't hire family members. Uh, we don't, uh, we don't do business with family members. And that even applies to us as owners. Like there is no kind of like weird stuff going on, uh, in terms of all that, because it just creates like, um, like challenges. So for example, one of my companies literally was partnering with a relative of mine, and we discovered that the whole company was like slowing down one day a month in order to make sure this one relative as a partner was happy. And it was like 0.01% of the business, but it was costing us millions of dollars. So we just don't do it. And I think that's the best way to do it. Don't, don't hire family. Keep it simple. I try to avoid drama. And that, that's the way to do it. I know there's other people disagree with me, but yeah, they do. Yeah, people—

no, that's interesting.

Crazy people. Yeah.

So then, so then, okay, so then as a dad, um, you have, you have a couple of kids, is that right?

Yeah. Okay.

Um, what do you do? Because I mean, they're looking at you, right? And they obviously— our children learn so much just by osmosis and by hanging around. And it's funny how they turn out in a certain way. How do you communicate to your children in terms of involvement in business and stuff like that, your expectations for them, et cetera, et cetera?

We are very prototypical Gen X in terms of how we're going about stuff. And I think that is a reflection of kind of the pendulum swinging between the generations, right? You had Greatest Generation and Baby Boomer generation who I think have proven to be much more prescriptive for their children in terms of what they want for them. And we have done the other thing, which is, you know, Gen X prototypically as parents treats their, treats their children as peers.

Right.

And we're like, you can build the life you want. We're here to support you. And, you know, I think we're doing that. So that's the way the pendulum has swung. You know, I've told my kids, like, there's no expectation you do anything in family businesses. You know, you can go do whatever the heck you want. But the tradeoff there is Once you graduate college, you'll probably get a small nest egg, and then we're kicking your, kicking your butt out the nest.

Okay, so that's what I was going to ask you. So I'm glad you mentioned that. Um, give us your philosophy then on, on the financial, you know, because, you know, obviously when we're in business, we have enough finances to support our kids, perhaps more than other people do. But, but what is your philosophy on that?

We believe, uh, very strongly that, uh, people who've never faced adversity have a very high likelihood to turn out poorly in life, either be listless or misdirected or malcontent. Um, so we do not protect our kids from adversity. We coach them through how to, you know, dust themselves off and, and go deal with it. And so we don't want to have a situation where our kids leave and think things are going to continue to be handed to them, you know? And so that's really, that's really our whole approach to it. And generally we're telling our kids You shouldn't expect to get an inheritance. You shouldn't expect that you're going to get your first job with us. In fact, I'm not going to give you one. You're going to have to go make your way in life. And then maybe someday we partner on stuff. Maybe someday you get an inheritance. But other than that, like, we're going to give you every opportunity possible, but it's going to be your decision to go work hard and try to achieve them. Um, and so the balance there is like, I don't want you to graduate with a disadvantage, but I'm not going to give it to you for free. We're just gonna let you— we're— you're gonna start the race at the front of the line. We're just not going to pick you up and carry you to the end of the line, which I think a lot of parents do, and it's a huge mistake.

That's awesome. Appreciate you sharing that. Um, Michael, give us your, um— I know you've just launched this new, this new venture, and I want to make sure that you have an opportunity to tell us a little bit about it.

Oh, fun. Well, yeah, this is part of the challenge of like having too many ventures. It's like, well, here, let me pitch all 12 things I do.

No, no, no, no, no, just give us the one.

But the one, uh Why? And these other people that are like content creators and they just promote one thing, it's like, oh, look how nice and easy that is. You just sell this one thing over and over again.

But that's right.

You know, being a holdco operator, it is what it is. Yeah. So we incubated a new business. It's called Scalepath. It's at joinscalepath.com. And basically it's a peer group, but it's designed for people who aren't ready to be in a Vistage or an EO or anything like that. Right. So we want to help people that are in the $500K to $5 million-ish, like 5 to 30 employee range, get out of their business, scale it, build it to a point where they can live a better life. Right. And we see businesses as a tool for you to live your best life. And so we've created this, this community. Plus, the unique thing that we've put together is when we went to go talk to small business owners, we discovered 80% of them, 80% of their problems are all the same stuff. How do I hire? How do I do a budget? What do I do as a CEO? Like, how do I do all-hands meetings? And those kind of 100 problems or so that every single business has, no matter what industry you're in. But at that size, you have— you all have those things. We're building playbooks and a library where you can just pull up one page and say, I trust this. This is the best of breed to do a sales compensation plan, right? Or to do a— to do a marketing plan. Like, that one-pager gets you there and gives you the answer you need right now rather than going to try to do some 6-week course on marketing or whatever. So that's the whole thing. Launched. We're taking our first 100 members. We actually almost are full. And my business partner's filling that up. And it's all done at a price that small businesses can afford. So online completely, you can be anywhere. And it's $200 a month as the starting price for the whole thing. So we're excited to get it going. And the reaction has been really, really good. So yeah, the first cohort is going to fill up and we'll build something really big, I think, out of this.

So let me just put my own personal endorsement. If you are in that $500,000 to $5 million range and you're looking for a peer group, you have to check this out because the nice thing about Michael is that he knows what he's talking about and that's super helpful. So I encourage you to go to joinscalepath.com and check that out. Michael, you've been very generous. Really appreciate your time. I know we could speak for— we could almost do the Joe Rogan here, but we won't. I'll I'll respect your time and let you go, go about your day. Thanks for joining us today again on Construction Genius.

100%. And congratulations on your success here. I'm really, really proud to be your friend and appreciate the time. Thank you.

Thank you for listening to Construction Genius today. I hope you enjoyed my conversation with Michael. Make sure you check out joinscalepath.com if you are in the range of $500,000 to $5 million in business and you're looking for a peer group. I promise you that that Michael's insights and support will be tremendously beneficial to your organization. Thanks again for listening to Construction Genius. Make sure that you give us a rating or a review wherever you get your podcasts, and we'll catch you on the next episode.