The Future of Business Strategy - John Lund - Fractional C-Suite Retreat - Episode #58

Growing a business is hard, but it does not have to be.

Once a week, we take a break from the hustle and bustle in business to talk about innovations and what's new in the C-suite. This is the Fractional C-Suite Retreat, and I'm Joseph Frost. Pull up a seat at the fire, grab a drink, smoke a cigar, and just join me as we relax, learn, and get inspired. This retreat is sponsored by Your CMO, helping organizations grow with better marketing strategy.

Welcome.

I'm excited for today's guest. He is a self-proclaimed business geek, a thought leader in all things small business strategy and coaching. He's a lifelong learner, and I can attest to that. I've learned a lot from him. So excited to have you. Welcome, John Lund with EntreSmart. Thanks for being here.

Thank you, Joe. I'm excited to be a part of this.

Yeah, I think it's going to be, going to be fun, so it'll go fast. John, let's start with the first question I like to ask guests, and it's something that I think you are well positioned to answer with all of your experience in the different C-suites you're involved in. But what is one thing that you think members of the C-suite need to be thinking about today that maybe they're not?

You know, one of the things that's come up recently with all my clients as I'm doing, you know, strategy planning or some consulting with them is that there's this expectation that these, I'd say, up and coming leaders, up and coming managers in their business are just like them and they should be able to handle it and kind of see across the company and get better at it. But when I start asking like, well, tell me your experience going up there. Like, well, I would, you know, in the work office every day for 50 hours, I was around the other leaders in the company through osmosis, whether it was, probably wasn't coaching, it probably wasn't like set, you know, 2 hours a day of like mentoring and coaching, but it was just, I was around Joe all the time, or I was around these other leaders all the time. Since COVID a lot of these upcoming leaders, they've never had that casual mentoring experience around the water cooler, to say it in one way or another. So now they're moving up into leadership and holy cow, they've never— they don't see across the company. They don't understand. They only understood their silo because it was like this working on a computer at their house for several years. And people aren't all around the water cooler, for using an old term. So just pay attention that they have not had the sheer hours of connection with lots of different people in a company, which makes it harder to manage and harder for them to manage and see and make decisions. So be a little patient and have a plan to get them hooked in to see across the whole organization.

Yeah, I mean, not only is it harder to manage, but it's harder to like learn because those silos exist now virtually, not just metaphorically, with inside the walls of an organization. So they haven't been exposed in the same way of, you know, many of us were when we happened to work inside of large organizations. You can go from one department to the next. You got a buddy at lunch that works for this company, this department. You just learn stuff. You don't get that opportunity right now.

Yeah. I mean, there's power sitting in a cube room with 10 cubes and you're hearing the accounting person talk and you're hearing the salesperson talk and you're hearing the operations person talk. There was a lot of learning going on, even if it wasn't formal learning.

So knowing that that's a gap, how are companies solving it?

Intentionally, right? I think the key is to have a plan around intentional connections, intentional peer groups inside companies. Make sure you're bringing in, I mean, the one thing I recommend is like, make sure if you're working on a sales process or you're working on an operational efficiency, whatever the person before. So if it's operations, it's pretty easy to everyone understand. Well, there's a salesperson or a customer service person before operations, and then there's an accounting or finance person out after operations. Make sure they're in the meeting, right? So the people aren't thinking just pure silo talk, and it allows them to hear about operations, and it allows the accounting person to hear about operations. And now they're all hearing about sales, operations, and accounting. In the same meeting. So make sure for all your trainings and processes, there's people from other disciplines so they can start to learn. That's one of, one of the ways we recommend doing it. Getting get-togethers and gatherings so you build trust and rapport is important. Those can be very casual, but it's incredibly important to get people to connect. You know, another funny one that I tend to do with all my people running 90-minute meetings is I tell them all to start at a weird time, like, you know, 9:07 don't start at 9:00. It gives people some time to go from one meeting to another, but also people like show up 3 minutes early or 4 minutes early and actually have a conversation and actually connect. So I think that's a benefit as well.

Yeah, one of the things that we've done internally with our company, and I've recommended some of my clients, is that take that 90-minute meeting and intentionally expand the 5-minute segue time at the beginning to like 15 and use that for your water cooler time, maybe a little expanded get-to-know-you exercise. Because a lot of those virtual, especially virtual meetings, I mean, it doesn't— it's not the same in an in-person office, but virtually that might be the only time during the week that they get a chitchat. Yeah, outside of their, you know, work they do, that might be it. So same concept, arrive a little early, get that free time, or intentionally expand that, uh, time frame.

Yep.

Um, so as a manager then, so someone, you know, you don't— the learning is harder because of that, the, the realities of being virtual, but then the management is. So what are some ways— this is one way of intentionally creating some, some time together— what are some other ways of managing that disparate workforce and actually growing and developing those, those new leaders?

You know, I use a lot of technology. I'm into technology to expand the managers and leaders. My question I always ask all of my clients is, does everyone in the company know what winning looks like in their role and how their team, what winning looks like? And then eventually, you know, for the company. So, you know, to give it real simple, I use my experience. I own a distribution. We sold things like, you know, OtterBox cases and JBL speakers. Everyone understands that. First of all, just having everyone know what winning looks like. So like my people that showed up in the back every morning did great work by pick packing and shipping things. You know, we made them understand, hey, show up on time, live the core values, pick at 135 pieces per hour and ship at 99.5% effective. They knew exactly what winning looks like. My accounts receivable person, people that are more than 30 days past due, keep it to one page and you can't change the font. So that was about 30 companies out of our 400 and there was a dollar amount. Again, live the core values. They knew what winning looks like. That was step one. So everyone in the company knew what winning looks like. It creates management a lot simpler if you know people to do it and then invite them into making the process and being part of the process creation. I find top-down processes, people don't understand it well versus I like this TED Talk about the guy talking about how to make toast. Get everyone to build in those processes. Now they know what winning looks like. They know how that ties into the bigger company and they were part of their process that they built. Management becomes easier. Management becomes dramatically easier if people feel like they had a say in what was they're working on and they know which direction they're going. So step 1, what winning looks like in their role, make sure they're involved in the processes. Then communication. I mean, it's all about— I use the updates app on Microsoft Teams. We do a little daily update, takes 3 minutes. I get 3 other responses right now because I have 4 people on my team. I know what's going on each day in their lives because they can share some personal stuff even. I just know what it is. We used to have a daily huddle with everyone coming around the water cooler. That's not true anymore. The technology, we're in different time zones. I have somebody over in the Philippines. Right now we can all do a daily update and everyone has a feeling of what's going on. People even share pictures of what they did over the weekend. I just shared we had some nice snow here. I shared the snow picture, right, with my dog in the snow. Those things matter when it comes to management. You're connecting. People understand where they're going and people want to go there. So part of what I like to do with getting people to manage, make it easier to manage people.

I love your what's winning look like question. I've used it many times internally and externally. And it goes to a subject around goal setting in general. And you're familiar with lots of different methodologies for setting goals, from Scaling Up to EOS to 40X, OKRs versus rocks. What have you found is, you know, in your experience, your recommended way of setting company goals and maybe breaking those down into departmental goals and then into individual goals, and then the technology around tracking and, and helping people hold accountable to those goals?

Yeah, first of all, I like all the systems in the sense of use a system, right? Like choosing not to use a system like I did for my first 6 years of my career. I used the fire drill school of management system just whatever fire was in front of me, I put out. That, you know, gets a little tiring and cumbersome and people don't know what winning looks like. So pick a system. There's lots of good ones. You mentioned several of them out there. Then I do, the one I tend to use with my clients is the OKR system, the objectives and key results. I do like that and I do like it with the OKRP, we call it. So the projects that go along with them. And once people can understand that the objective is the destination, the direction doesn't have to be measurable because the key results are measurable. Having those 4 or 5 key results, again, have the team a part of it. And then projects like we have to do a, you know, sales training to execute on getting new sales clients. That'd be a project and really getting the people understand the time and commitment it takes to do them is one of the things that I really like about the OKR with projects template. When it comes to creating them, I mean, obviously, I'm a huge fan of strategy planning. So annual planning and quarterly planning and weekly meetings, I think that's critical in all, every one of those formats you talked about. It's in every one of those. The buy-in has to happen. Something I've been working recently with is executive teams creating the quarterlies. But if they have a decent amount of next-level leaders, we're actually having the executive team directionally give the objective, but then that's maybe a 4 or 5-hour meeting as part of the quarterly. The next level leaders show up that allows them to hear it, think about it for the night, like, hey, directionally we're trying to open up a new market, you know, for our product. We're gonna go to the Southwest with a new product. Okay. Think about it for the night. Now the next day they come in and build out the actual key results and the projects. With the next level leaders in the room. Again, it creates a whole next level of accountability and communication and commitment. If you go to the Patrick Lencioni Trust Triangle, it kind of allows all that to go up because again, it didn't come across as top down, even though the key objective of the company, the executives gave direction, but it allowed everyone to have some say and also talk about their bandwidth issues, which I'm finding pretty common., right now. Like, yeah, that's great. I can do that, but I won't be able to do the following. So not sure I answered your question exactly about just how to do it technology-wise. Great tools out there. Everyone knows a lot of them on the 90.io or Metronome or, you know, Bloom Growth. They're all fantastic. Aligned Today. There, there's lots of them. I'm just watching what Microsoft's doing though. Everyone almost had— not everyone, either a Google house or a Microsoft house, but a lot of people have Microsoft. And what Microsoft is doing, we have a lot of people that use Teams and Planner, and Planner and To Do is coming together into one thing soon. And that comes free with your Microsoft 365, or it's included the way you want to say it. But what they're doing with Viva Goals and then Viva Goals with Copilot is a game changer in my opinion, because You can set corporate goals and then you can just ask Copilot to cascade these down into your company, which that, and it is transparent and identifiable. And you can hook into the leading softwares like HubSpot if you want to get those metrics or operations just has an Excel spreadsheet that they just update every day in the warehouse. They just update the spreadsheet, it automatically gets pulled into Viva Goals. That is just, that's going to be magical. It's, it's rolling out now. We've been using Viva for about 6 months, and it just makes a difference of clarity and consistency. And it just, once Copilot hits it, it's even gonna make, would you like me to write an OKR based on a conversation? I mean, that's freaking incredible.

Yeah, we just started using OKRs in the last probably 6 months and, and, and Viva Goals even less. In the last several months, we've been setting it up and we're about to go live with it. And I can see the, the value of it. And the technology changes so quickly that it's gonna only get better. But, you know, when you hear OKRs, I think about what winning looks like is the KR and, you know, where we're going is the objective. And so if you take that approach to it, it's very similar to setting rocks and just in your descriptive is building out the KRs. Projects are harder because it's not, you know, if you go from a, you know, high-level objective and KR, it's hard to figure out, well, is that a project or is that another, you know, objective and OKR? Like, how do you help people guide them to what's a project versus what's an OKR?

Yeah, what I find is it helps, and this is where me as an outsider I can just notice, and obviously I have some experience running businesses, like, wait a minute, that's not just a OKR in the sales department, you know, we need better phone tracking and outbound call tracking. Great. All of a sudden, a little bit, somebody said something, a little nugget of, well, I don't know what our phone system is even capable of. And then somebody else said something. I'm like, well, wait a minute. That sounds like we have to have a phone project. We have to understand. And I have this, there's a great form that we have on coach.win, which is a membership group I'm a part of with other coaches. That just explains how you build out a project. And in 15 minutes or 20 minutes, you can have a project plan built out with a lot more little steps that are more detailed than a key result. I know as a visionary and as a person, to me, it's just easy in my head, right? Some things. And if I get somebody like, all right, let's take 15 minutes and fill out this project sheet, all of a sudden you realize Wow, we had to have 3 extra people involved and there's 12 steps, not 2 steps. So not every OKR has projects, but certain ones just naturally become projects. So that's how I bring them up. Once people get used to using them, you'll end up with projects a lot. It's a, it's a good system for making sure people understand the situation in front and not get so frustrated at the back that it didn't turn out the way it was supposed to. It's kind of like you know, scoping software, building architectural plans to build a house, right? It, it's good to have architectural plans before you build a house. Yeah. It's good to have a little project plan. And again, they can be done in 15 minutes to an hour. You can build a little project plan and now everyone's on the same page before you jump into it. So they show up around issues lists, they show up around to-dos, and they show up around OKRs.

So I know you're involved in the Coach.Win organization. I know you have some affinity and part with an AI kind of Microsoft shop. How are you seeing Microsoft AI really changing the way that companies are going to be setting their goals and executing in their distributed teams? Moving forward. It, to me, it seems game changing, but you're, you're also very heavily involved with it.

Yeah, the whole ChatGPT, Copilot, Microsoft, again, I'm a Microsoft guy, but it's hard to explain how I feel about it in the sense of what a game changer it is on efficiency and quality. And I like both those lines, right? There's always the, I forgot the iron triangle or the triangle where, you know, price, quality, or speed kind of deal, you only pick 2. Yeah, that's out the window right now. That, that is out the window. You can have all 3. I'm seeing it, just taking a step back on your question. I'm seeing that the key is we gotta get some people activated in there. And for goal setting, it can be an example of where it can go. So I'm literally using it live in my strategy planning session. So I get people to all do a survey in advance. I have ChatGPT or Copilot help me create the survey. I can actually tailor it to an industry really simply now, right? So now it's helping create a survey. Then it's still my words and I'll give it a good example of what I mean by my words in a minute. But, so now the survey sent, the survey gets out there, it comes back. Let's say there's 14 or 20 or 40 people that filled it out because I want more than the executive team to fill it out. That's a lot of data for people to read and understand and interpret. So I run that survey safely so it doesn't go out to the World Wide Web, right? I run it safely through and say, hey, why don't you come up with, based on this SWOT and then this start, stop, keep but improve and what focus and how we should improve communication. Those are some of my topics I typically spend on. Based on this survey result, ChatGPT, 5, do list 5 strengths, 5 weaknesses, 5 opportunities, and 5 threats on that are based on impact. What do you believe for this next year will be based on impact? I've done it with 20 companies now. They're shocked. They'll read the data and see what ChatGPT did. Amazing. Same with communication or focus. Then we can start using it, ideate some ideas as a leading leading, you know, retail firm or leading janitorial firm of what are some of the potential OKRs for the year, right? And I, at first, I didn't do it up front to the client. I did it after, you know, I showed them after I did the work up front, but I never showed up. They came up with their 5 OKRs for the year or the quarter. And then I showed, by the way, this is what Chetty— and usually 3 or 4 of them are pretty right on. So, Now, how would you cascade it? How would you push it down? You can just start asking. It's like having a brilliant person in the room that can show. So AI is just changing the game of, of the world in so many ways and making efficiency and quality. I mean, I can tell some stories whenever you want to tell some stories and the importance of is it your words or the AI's words? I can tell some stories around that too.

Well, that's where I was going with it. I have— excuse me— I found that I think AI is an enhancement, not a replacement for right now. And so I have, I've seen examples both ways where somebody has tried to use AI to replace otherwise knowledge that they would get from somebody else that they don't have, and it comes across very superficial and it doesn't work. Where I've seen very other use cases where somebody uses it to enhance what they already know just to make it more in-depth or more comprehensive or faster to get to the endpoint. Do you see those two things converging eventually as AI continues to improve? Do you have your own examples of ways that people are using it well and unwell?

Yeah, so a couple of things. I think, yeah, initially there's a fear factor just because of this whole idea of replace, right? This whole replace what you do. The statistics of the people have been running Copilot so far are earth shattering, right? There's 10 times more things to collaborate with AI for every replacement. So what I mean by that is, well, this is what I do in accounting and I do it every day and you're saying AI is just gonna automate that and do it. I'm gonna be replaced. That's the fear. No, all that stuff where you're literally, I always use my fingers, all that stuff you're typing, You won't have to type. But what's cool is when the stuff comes across, you're gonna start noticing things like, oh, wait a minute, what's going on with that client? Oh, wait a minute. How's that look? Oh, wait a minute. And you're collaborating with AI, which creates collaboration with other partners in your company and your value proposition as an individual contributor all the way up to owner goes way up. So 10 to 1, they're finding, they're also interestingly finding that the companies that focused on collaboration with AI, not replacement by AI, are seeing way higher net income increases. You know, just that initial thing where people are like, oh, I'm gonna cut out 4 people in my call center. What if you made your 4 people in your call center wicked good at taking inbound, flipping somebody by role playing with AI to a positive experience with the company and selling add-on sales or extended contracts? What does that look like? That sounds better, right?

So you want to get that space. It's hard for— I just had— we've been doing some focus groups around AI and AI implementation with business owners, and many of them have come back and said, before I engage with any AI, you know, solution or service or implementation, I want to know the ROI. And in their minds, across the board, almost 100% of the ROI is replacement. That's how they think. That's the feedback I'm getting. But what you're describing is no, it's not, it's not cutting costs in time. It is in time, but in people, it's actually creating value that's not there. Exactly. Which is harder to probably identify upfront, but it's real. Case studies can show it.

Yep. I mean, I have a couple of great case studies. One friend of ours, they do big-time wiring or Wi-Fi buildouts in like hospital systems. Okay. So they're big contracts. They have a lot of detail. It always takes their best people to read these big contracts, multimillion-dollar contracts. And any contract would take 12 to 20 hours combined of these people's time, the 5 or 6 leaders that read them and they think they got it on, you know, the first pass or second pass through before they even decide to bid on it, 85% to 88% of the information accurately out of the contract, like kind of the questions they ask the contract. They helped use AI to what are the questions that they ask a contractor, ask in our, a proposed request for proposal. And they came up with a big prompt that has 65 questions on it. And it'd be like, hey, what is the bonding issuance? What is the you know, when's the start date, where, how far is it located, plus a whole bunch of other stuff. So now instead of 12 to 20 hours, it takes 3 minutes to read an RFP and it kicks out like, yes, it's in our bonding requirements or it's slightly outside and those words turn yellow or way, it's way outside of our bonding requirements, it turns red, right? So the red flags are showing. So it saved that 12 to 20 hours of key people's time, which is fantastic. But the collaboration part, because they did it before, the owner would take every inbound RFP and make a quick gut check. Do I want to take 12 to 20 hours of my executive team's time? And a whole bunch, they just say no. Like, he would never even run it through the system. Well, now he's running a course because it's only 3 minutes, all of them through the system. They're learning ones that they should have said yes to in the first place. They didn't realize that they should have said yes because they went back and did it. If you have back data, it's incredible. They did that. Now they're also asking AI like, well, what would we have to charge for this? Because this is outside our normal spec to make sure we make at least our profitability assuming a 20% error rate. Like we're gonna be 20% more inefficient because we're not used to this. And it's like, yeah, here's what you price at. And because his systems are in demand, he's sending back the RFP response with the super high price in his eyes. And every once in a while he's getting one of those too. Yeah. So he's just gaining tons of business. People are busy. They're just not busy reading contracts. By the way, over time, and it does take effort and time, they got it to be what they think between 95% and 98% accurate first time pass through. And again, they think their humans were 85% to 88%. And it, although by the way, it started at AI started at 70% accurate.. And they just had to keep tweaking it to get there. So that, that's one quick one. Another one.

Well, before you go to the next one, talk about that one quickly because I think breaking that down a bit would be helpful. So how did they choose that as a, as the place to focus on adding AI and, and build a project around? And then what resources did they utilize internally or how did they go find the external resources to do that? Because I think that's the question a lot of people are asking themselves.

Yeah.

How do I do this?

You know, this one was one of their people was just kind of doing it on their role, right? So they're like, God, I can just, they kind of leaned into ChatGPT and just said, wait a minute, read this. Once you could upload a document to read and do it safely, right? Read this document and tell me the following things. And this person just entered all the questions and they showed it to the other leaders who were not as engaged in AI. And they're like, what? How much that? Well, yeah, instead of 3 hours now in 3 minutes, I get my little part of my, what I'm supposed to read of this 100-page document summarized. And I, and it, it'll also the way they did it would be like, oh, and tell me what page it's on too. So I can just turn right to that contract and peruse up and down because you obviously need human check. You're not doing, you're not letting AI do it all, right? But that's how they got started and they literally use ChatGPT and they have a, prompt that has 60, you know, we're gonna, you're gonna be an expert in this industry. You tell ChatGPT how to act. I want you to review this RFP based on these are our ideal parameters and kind of let it go. And here's the 65 questions I want you to ask this whatever. And I want you to give it back to me in a format that is whatever. They might have been using like a Claude before because it had more tokens. But ChatGPT can do it now too. That's how they got going because it took one person to start activating in their world and they did not use outside resources for that one.

Did they then, as they expanded it and iterated it, put a larger team on it or do they just keep doing it in-house?

And those, those guys did it in-house. Actually, two of my best examples have done it all in-house by getting, you know, for starting with one or two people that are activated is the term I use. They're activated in AI. They use AI like Google. Or email, right? They just turn it on and they use it every day and then they start sharing it amongst the company and they did it both internally. There's some great, there's some great resources, although not as many great resources for external. It's hard. People have to get to know your business first. That's the one thing that sometimes people aren't willing to, people ask me all the time, well, who should I go get? I go, well, the first thing you have to allow somebody come in fractionally and and get to know your business for 4 or 6 or 8 weeks. I have, we have some tools to help speed that up through some surveys and kind of opening up the mind's eye of what's possible. But it's gonna take, it's not instant. Somebody and everyone needs to have multiple champions inside there. I mean, a main champion and 2 or 3 other co-champions inside a company to make it go forward so far in my experience.

Yeah, for sure. That's the other feedback I'm hearing from people in these focus groups about AI is before they'll consider engaging a fractional, they really want to see a very specific use case that they know will work in their business with a very specific ROI. And those are hard to find until you know the business. And it's, that's like a, it's, you know, chicken or egg, what's going to come first? You could probably find a very generic use case. There's a lot of those in marketing. Like I can come in in marketing and implement Jasper and make your content production 10 times faster and more efficient. That's just, you know, plugging in a tool and teaching your existing marketing person how to use it. Yeah, but it's, it's valuable. If you can scan somebody else's business though and really look for the opportunities, plug into those internal subject matter experts, activate them, there's a ton more you can do.

For sure. I mean, one thing that I'm doing for that, Joe, to get people to get their, like I said, open up their eyes of what's possible is, you know, I recorded a 7-minute video, which is a long YouTube video, 7-minute video of like, here's the possibilities that, and I go through 100 possibilities in 7 minutes of just start thinking about this. And I start off with each day I want you to think about things that are menial, you know, menial, joy-removing, error-prone, piss off the customer when they're wrong. You know, think of like, if I never had to do this again, I'd be really happy because it's just, you know, I'm just data entering from one system into another. So they, they hear that, they watch this video, and then we ask the company to champion a, a, a contest that somebody in their company is gonna be a contest, but every day they're gonna send a reminder in Teams where tend to be Microsoft, but obviously you could do this in Slack or whatever. Every day, hey, and I actually do twice a day around 11 o'clock and at 4 o'clock. What did you work on the last 3 to 4 hours? That was one of those things, joy removing, menial. It'd be great if somebody else could do it. And they enter a Microsoft form and they just go and enter basically what they were doing. Nothing. It's super simple. Couple of checkboxes. What happens over time is we'll get 40 to 200 entries over 2 weeks. We can quickly categorize them and just say, look, these things you can just go turn on. Like, there's no cost, there's no, we found the one thing that's interesting is a lot of our leaders that we're working with find it like they say, hey, they just don't know how to use our existing software, right? They just haven't been trained. Maybe they were hired during COVID and they never seen that, right? And then some of them are like, that's a pretty easy automation. And then some of them, you know, AI use and automation, And some of those are going to be heavy lift with a lot of due diligence. Right. And I'm all a big believer in right now with it, focus on the things that are easy lift that bring value quickly so you can get the ROI, you can get the ROI wheel going. Don't focus. Sometimes the big owners like to focus on, oh my gosh, if we could ever do this. The problem with that, that's a 6-month, 9-month build for, you know, $50,000 to $200,000 and it's not going to go perfect and everyone gets frustrated. So I'm more of the Hey, for $3,000 with an outside firm, you can get that knocked out and it's gonna save 10 hours a week, 15 hours a week, kind of like my contract one, right? It's gonna start bringing joy and get people activated. So that contest has helped people get their minds wrapped around. I do recommend that they give, you know, $500 or $1,000, you know, a bunch of $25 gift cards. Every time you enter something in, you get your name in a hat. And you do a gift card. So it gets more people engaged because you want to have 10, you want to have 30, 40% of your company at least entering things that they're frustrated by so you can see repetitiveness. Yeah, absolutely.

I love that idea. So what do you say to the business owners out there that are like, AI is a fad, it's, it's gonna go away, or it's gonna just be so mainstream I'll never have to worry about it or think about it? It's just gonna show up.

Yeah. My, my first quick reaction is go unplug the internet and just, just choose to do that. One of the better guys I saw speak on this, he's at Amazon now in charge of theirs. When the internet first came out, it took about from that, not from like way back in the '70s, but like when AOL hit or whatever, you know, something for people old enough to remember that. It took about 7 or 8 years before people started to say, what do you mean you don't have a website? What do you mean you don't have email? His prediction was that was 2 years max. And that's from November of '22. That's when ChatGPT came out. It's 2 years from that date before people are like, tell me how you're using AI to improve what you offer me. How are you speeding things up? How are your quality content being done? You know, from everything. I mean, the doctor's office that just talked to me, maybe they're using AI to scan your whole body and then look for microscopic changes in your moles, right? Like now that I know that that's possible, I'm asking my doctor, why don't I have that? Because they found 4 moles that were growing wrong because they were on the bottom of their feet and the doctor never looks at the bottom of the feet for a mole., right? But this full body scan does, that's AI, right? So everyone's gonna start asking, how are you using AI to improve the offering that you're doing? How are you getting more efficient with AI? Because if you don't start doing it, they're gonna ask you, how are you gonna start cutting costs? Because competitors that can do things 40, 80, 100% fast, you know, 100% sounds ridiculous, 100% more feed of it., you know, taking 10 hours to do something, some people are gonna be able to do it in 1 minute. Yeah, 1 minute. Like, by the way, something else everyone should know, I'm just thinking about this now. So I'm gonna say it. If you currently are billing by the hour, like your contracts are by the hour, start figuring out how to move to value billing. Right. I, you know, I've had some people that are like, well, we, you know, we're consultants, we're outside, we're by the hour, we're in the accounting field or we're in the, you know, research field or we're in the whatever field and we charge a really nice high hourly rate and then they pass it down to their employees to execute on it. The employee might start using AI and you figured it was gonna be 20 hours of their work to get it done at $250, $500 an hour and they did it in 10 minutes and like, Joe, look at how good this is, man. It's the best work I've ever done. I'm really proud of it. It took me 10 minutes. I know we bill in 1-hour increments. So Good news. I just saved the client 19 out of the 20 hours, and the employee's excited that they did it for you, and you're like, uh-oh, I don't get to bill 20 hours. I get to bill 1 hour. You're offering the same value, probably even increased.

Yeah, we— I see that a lot in the creative space. I mean, if you think about What is a creative agency? It's dollar per hour content creation, design work, editing. And all of these tools out there are 10x-ing the productivity of the average worker. Right. And so you're not going to 10x my— I'm not going to start paying $120. I'm not going to go from $125 an hour for creative work to $1,100 an hour for creative work.

No way.

No way. You know, we produce— I've been around production companies producing video, videos that you might budget 3 days for an edit. And that's 3 man out, man days, woman days that are sitting there in front of the screen editing, fine-tuning. You throw some of that footage nowadays through a pre-editor and you cut out 2 and a half days. And so now it's 4 hours is the finish it. Yes. And if you're charging, you know, $1,000 a day for a $3,000 project, now you're charging $500 for that same project. But really, you only spent half a day on it. So you should be— there should be a win-win there. You should be doing 6 of those now instead of 5. But is there demand for 6? And I think that's the conundrum that people can't quite figure out. Yeah, I can do it in less time and I can do more, but is there going to be more. You know, what's this abundance cap? You know, is there enough opportunity and abundance to offset the savings and productivity? And, you know, some arenas I think there are and some there's probably not.

Yeah. By the way though, when you just gotta be a pay— there's some arenas that might not be, but what you don't want to be is wait another year or 2 years, right, to engage in AI and some competitor because they can do it in AI. I'll use your example, right, editing and whatever. They just go to a client, they find out, you know, that, that you're the person doing it. You're taking 3 days to edit and, you know, it's costing 4 grand or something. They go, let me see if I can get that back. Why don't you gimme the same raw footage? Gimme the same raw footage. They throw it through AI. They actually add 7 other enhancements to it, right? They cut out a whole bunch of other clips. They do it and they get it back at 1 day at on average 40% better quality is what AI is showing. So they get it back in one day. Oh, and by the way, I would have only charged you— I just wanted to tease you with it. They charge you $4,000 or $5,000. I will charge you $2,000 for that with all that extra benefit. It's going to be really hard for that decision maker to go, wait a minute, it's taking 3 times, you know, 3 times as long. I got 7 extra benefits and it's half the cost. In the meantime, that person, as you said, they did it in 4 hours and they just got to bill $2,000.

Yeah, great. It's crazy. I mean, just look at, you know, this podcast. We were paying a third party like 3, 4 grand a month to produce a podcast a week. And now with AI, we've got another provider. It's my other company. So, but We can take that $750 per episode down in half and push out blogs, social, full transcripts, and clips to go with it. We're bundling now everything that we did before and more for half the price. And it's AI driven because AI just kind of takes away all the tedious stuff.

Yes, repetitive stuff. Yeah. Yes, that's the stuff you need to eliminate and allow yourself to collaborate. And as you said, you've done more, you've collaborated with AI to make a better outcome of a podcast for half the cost, right?

And really there are, there's an unlimited people that should be doing podcasts. So the capacity will meet that savings over time. But some things, you know, is there an unlimited amount of litigation that's going on that, you know, because you can cut that dollar per hour by a tenth, it's going to be 10 times more lawsuits? I sure hope not. Yeah, yeah, yeah.

Hopefully they're not all those. There is a— yeah, it might just bring, you know, more joy to work. I mean, the way I— if you can start doing what you just said for podcasts, A, you can expand your company on podcasts without having to hire more people. That is going to be— I do think there's going to be where companies, you know, hey, I was planning on growing. I see that's actually the trigger. There's obviously the initial mindset of cutting, but hey, based on my projected growth, like a lot of my clients are growing, we are gonna have to hire 6 or 8 more people. That's triggering them to think AI, how do I not have to hire those 6 or 8?

Right.

And have AI. That's interesting to me, right? That's where I love to see the, savings and provide a better output for their client.

Yeah, and I think that kind of wraps in this whole idea of, of decentralized leadership and the future of work. You know, AI is a component of that, outsourcing and remote work is a component of that, fractional executive strategies is a component of that. When you, when you, when you look at the landscape of small business small, medium-sized business owners and what you do with strategy and coaching, if they're not thinking about all 3 of those, like how do I access fractional C-level talent through a fractional CXO, CMO, CTO, CFO? How do I offshore some of this full-time work to the Philippines or nearshore or other places where I can get good quality people at half or a third of the price? And then how do I make my operations operations more efficient with AI. They're not doing all 3 of those things. I think it, you know, you're right, 2 years from now they may be extinct or, or way behind the curve because their competitors would have been doing it starting today.

Absolutely. All 3 of those points are just right on. I mean, people need to have it. And to me, it does start with, you know, strategy or what winning looks like, whether that's as a company or as a team. I don't care, like that project, that OKR. Like really understanding that and go, okay, do we have the internal talent for that? Do we not have the internal talent for that? Go grab a fractional or go grab, you know, overseas or an Upwork person or whatever that also gets to see lots of companies and bring a whole different slew of ideas into the, into your space, which is so valuable. So valuable. So I totally agree. You have to be looking at it all. You have to be looking at automation and AI. You have to be looking at where can I get talent I like Thomas Friedman, the book writer. He goes, you need people that can kind of go like this now in the world. They can pivot pretty quickly on decision making, right? And people that have, you know, been around the block a few times or are seeing a lot of companies that like in the fractional C space, they see a lot of stuff. And therefore they can bring experiences from a broad network of experiences, not just from, hey, I'm really good at this one little niche area, they have more experience to share and that's very valuable. Often I just find too, you know, below, you know, a few hundred million in sales, there's a lot of fractional needs, especially down in the, you know, $5 to $50 million size revenue companies. They actually don't need a full-time CFO. They don't need a full-time CMO. They don't need a full-time, people sometimes want me to come in and do full-time and I go, well, I'd probably break your company because I'd be in there trying to do stuff versus you probably only need me, you know, when I do consulting work more than my strategy work, you know, 5 hours a week, we'll have some brainstorming, we'll go, I'll bring some experience, we'll share some outputs and 2 weeks later we'll come back and see how that went. And then that's about the pace that a business can handle change or opportunity, right? So it would never make sense to hire me full time. It just wouldn't make sense for most smaller businesses.

Yeah. And it's, You know, it's, it's a new way of thinking. It's a new opportunity, and business owners have got to, um, and C-suites have got to be thinking this way, uh, the, the— not just with AI, but with outsourcing, with remote work, with fractional expertise.

It's—

you got to try new things, and if you don't, um, you know, you're at risk because your competition is.

Yeah, and I think, and I think it's critical to interview several, right? Like, like interview 2 or 3 people for that role. Make sure they're a culture fit. Make sure that you wanna hang out with them and chat with them, right? So whether that's a life coach or a CMO or a strategy coach or whatever, it's, it's a good idea to talk to a few, right? Get, get the one that fits you and fits your culture. And then go forward. I think it's a fantastic solution for a lot of businesses.

Yeah, for sure. Well, if somebody wants to get ahold of you, John, talk about strategy and coaching and things you're up to?

What, what's the best way? No, I just found LinkedIn to be a great connecting device. So John Lund, LinkedIn, you can find me pretty easily. EntreSmart's my company name. So look me up. I'm connected to Joe. So you can find me if you're already connected to Joe, which makes it pretty simple. So take a look at me on LinkedIn, send me a DM, love to chat with anyone. My goal is to create conversation, inspire growth. That's my why I exist. And I love helping small and medium-sized businesses. I think that's— I love, I love watching the joy of people really having a fun small business run. And if I can share any experience or times I've made mistakes or anything like that, I'll share everything and go forward.

So love to hear from people. Yeah, you do an amazing job at that. Well, thank you so much for, for being on the show today. You've been a great guest and you'll— I'll have your, show notes will have your details in it so people can link directly as well.

But thank you.

Thank you, Joe. Appreciate it. Yeah, and, uh, thanks to our audience for listening. Remember, subscribe to the podcast. My producer reminds me to remind you of that. It helps make sure we get everybody on board. So thank you for listening, and I look forward to talking further with new guests. And please do reach out to John if you want to talk to him directly. He's a wealth of information. Thank you. And that's a wrap.

There's another successful episode of the Fractional C-Suite Retreat. See our show notes and more episodes at fractionalcsuitretreat.com. This podcast is sponsored by YorCmo, helping organizations grow, save time and money with better marketing strategy and fractional execution. Visit them at YorCmo.com.

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