Exceptions in your businesses: When to Allow and How to Handle

Live.

Welcome back to another exciting episode of Lazy Leverage. My name is John Matzner. This is Peter S. Lohmann. We are here to talk about a really exciting topic, which is exception handling. Peter, how do you want to jump into it?

So exceptions is, is a great topic. I'm like, you mentioned it and I got really excited to talk about it because my engineering brain loves to think about exceptions and a small business. Is just a walking list of exception requests. I mean, every single day as a business owner, you have an employee asking to make an exception. Hey, I gotta go to the doctor, whatever. You have customers asking to make exceptions. Hey, can we actually like prepay for the whole— you have vendors asking to make exceptions. Hey, I know we're supposed to be on net 30, but can you pass? And it's like, oh my gosh, you spend all day making decisions about exceptions. And so you really need a framework as a business owner on how to make these decisions, because if you just try and like reinvent from first principles how to decide on every specific request, you will go insane and use up all of your brainpower and turn into a puddle. So I've spent a lot of time thinking about when to make exceptions, how, what's the right framework for this? How should it change as your company grows? How should it change as you get a leadership team or as you try and step back from the business? I'm excited to hear how you've thought about it through your business experiences. Let's get into it, man. This is a, this is a great topic.

I knew you'd like it.

Okay, cool.

The, I will say that the first time I actually thought about this, I think it was because of something, a conversation you and I had, which I always knew intuitively, but I'd never like labeled, which, and we, you and I had this experience recently where, uh, in the last 2 weeks we were talking about the Agents for Crane members and I literally said, I will charge 50% less on a fixed cost basis, but you have to play within our normal structure because the complexity of an exceptional is literally— I can put a dollar amount to the administration and the judgment and the management oversight. I was like, if I can give you a way lower price, but you have to go straight between my rails.

Yeah.

If you go one inch outside my rails, I'm turning on the clock, baby. And we ended up— you came inside the rails, and I'm, I'm way happier. I did not want to go outside the rails.

So we had, we had a big account about a year ago on the hook for our property management business. It was something like 65 doors, which is a big account for us. It would have been our largest single client and would have jumped us past our goal for the year in terms of unit count. And we had great conversations. This is actually someone I had known around town for years and seen at meetups and stuff. So it was somebody I was already familiar with, knew him to be a good guy. And we got pretty far in the process. And then all of a sudden near the end, it was like, oh, and by the way, 4 of the units in this building are furnished and we want you to continue to, to manage those as long-term rentals or as like medium, medium Uh, sorry, medium-term to short-term rentals. And, and I was like, my first instinct was like, no, we don't really do that. Like, we're happy to take all these other properties, but we don't really do the short-medium-term rentals thing. And then he came back and he's like, oh, it's actually super easy. You manage it just like a long-term rental. It's like traveling nurses. It's just like instead of putting it on Zillow, you put it on like travelingnurses.com or whatever the website was. Um, It's like totally straightforward. I operate the same way as my other, uh, units. And I like thought about it and then I remembered the pain and the suffering and the chewing of glass that I had gone through over the last 10 years. Every single time I made an exception like that. Yep. And so I said, I'm sorry, but we can't do that. I would actually be doing a disservice to you if I agreed to do this, because because first of all, we would do a bad job. We have no experience with this. Second of all, everything about it is outside of our standard process. We would forget to get the listing up in time. We wouldn't respond in a prompt way to a guest inquiry. It just— we would not— you don't want us to do this, I promise. And he begged, oh please, no, I, I swear it's super easy, blah blah blah. And we didn't— we lost the account. We— he would not bend and I would not bend, and so we did not win the account. But the first 2, 3, 4 years in business, I would have made that deal all day. Right. Oh, of course. Yeah. We'll figure it out. Yeah.

Yeah.

Nightmare. Total nightmare.

It's so funny that, because this is, we have such a recent example of this and I ended up apologizing, but we were working on our agent thing. You guys sent a contract and I didn't realize you guys saw my comments. And so I was a little chirpy more than I typically would be, but I was salty because I thought that you guys had fixed me on price. And you're like, okay, we've agreed to the price. You said it's a 6% management fee, right? And then you're just like, oh, by the way, it's fair housing compliance. And I'm like, I don't even know what that is. And so I know you didn't do that on purpose, but it's funny because we actually have a meta example of here, which is that isn't at all how you guys meant it, but I was receiving it as a version of this, which is the way, the way people do it because they're smart is they say, awesome, you guys are 8%. Of rent roll. Awesome. And then, oh, by the way, just this one thing, it's actually an Airbnb. And you're like, what? That's not a one thing.

Like, yeah, bro.

And like, I think there's an interesting question here, which is I'd be— I'm very interested in your perspective because I, I— we probably agree, at any price, if he would have come back and said, hey, I'll do this at double double the price you usually do. Do you still think it's a good idea? If so, when? If not, when? Like, at any price? Or do you think even in that instance it's not worth it?

Uh, so, so my basic answer is it's not worth it at any price.

That's my basic answer too.

Yeah. Now I'll caveat that by saying there's like two ways to grow a services business, a local services business. You can do what I call the McDonald's model, which is you have a very narrow scope.

Yep.

And you replicate it nationwide, or at the very least across your state, right? Like, if you go into McDonald's, they don't sell Tic Tacs.

They could sell— they could—

they could— they could sell chocolate bars.

Somebody has asked, do you sell Tic Tacs?

They could have— they could have, um, Monster energy drinks on a cooler on the, you know, on the counter. There's a reason they said no to all those things. Right? It's because this needs to be simple, replicable, predictable, all those things. So if you're going to do the McDonald's model, you say no to almost every single exception like that. Now, there's another way to grow a big business, which is you're— you are the local expert and you do almost everything. Yeah. So in real estate, that looks like you do brokerage, you do residential management, you do commercial management, you do office leasing, you do industrial, you do development, you do build-to-rent. Right. And there's a couple firms around here that are huge multi-hundred million dollar firms who have been at it for generations in most cases. And they're great and they're very well known locally and highly respected and they're big names and they're on some of the buildings, but they don't operate outside of Central Ohio. So, but you just gotta know the lane that you're in and it calls for different decision making.

Not perfectly matched, but there is definitely an analogy to something that we've mentioned before, which is that's a customer intimacy. I know this customer and I say yes versus operational excellence and product innovation, which requires a little bit more of a productized service, those kinds of things. The, the thing for me that I've become more and more aware of these days is that even if I make the economics work, right? Even if I make the economics work. So I, so for me, I'd say, sure, I'll do it. And I, in the back of my head, I'm like, I have to hire 2 people full-time to do this. And I, and I priced that in. Great. I have my price, Peter. You want me to do Fair Housing Act compliance. I'm, I'm upselling you $5,000 a month and you say yes.

That would have been easy by the way, but you're good.

But I, but I think it's actually really, it's a, it's a good example. Representative. It's a good example. Just like you didn't mean it like that, but I interpreted it as that. Right. Uh, and what I've come to become. Haunted by, which is something you said that sticks with me, but just even like the corollaries of it is it now takes brain and company cycles.

Yeah.

So you have this wonderful EOS meeting and you guys are like, we got a great rock and everybody's drawn in the same direction. And here's my vivid vision. And then you've had this great offsite. You say, by the way, we got a letter about Fair Housing Act compliance and, oh, What are we—

Yeah, it's a focus issue.

It's a one thing in the shower issue, which is what I'm haunted by. It's you. You're not thinking about providing world-class scattered site residential third-party property management. Bigger, faster, stronger. You're thinking about, oh, why they can't use Notion because it's short term. What am I spending my cycles on?

And then they turn off in a year, right? You went through all this work.

Yeah.

So it's just Yeah. So, so that's a great example of like customer exceptions, right? Or prospect exceptions. Somebody comes to you, they wanna do business with you, but they wanna do business with you in a different way than you wanna do business with them. Yeah. They want you to do some kind of extra thing. They wanna do à la carte, you know, it, and so, you know, this is, gets to the core of what you're trying to be as a business. And so these decisions I think are relatively straightforward with a little bit of experience. Almost everybody. I think this is like one of those lessons you can only learn by burning your hand. It's like no matter how many times you tell a toddler, don't touch that, it's hot, they're going to eventually touch a hot stove or a candle, hurt their hand, and then they'll never do it again. But you know, it's just some lessons you can only learn through experience. Everyone thinks, well, no, I mean, I'm sure most people couldn't handle like a couple different lines of this, but I, I mean, I'm really smart. I'm highly motivated. I went to this school or that school or I have experience in this company. I got it right. And then 2 years later, like, oh yeah, no, that was a bad idea. So, you know, it's just some things you just got to experience yourself.

Would you, would you say that this is symptomatic of what is the part of the market where you and I tend to spend a lot of time with our customers, which is what I would call the, the budding professionalization stage of a business, meaning This isn't really a thing with a $50 million company, and it's kind of inappropriate if you have no revenue or you're making $500 a month. The answer is yes. Yes, sir.

Totally.

But between those two levels, which is where oftentimes you and I live, and exception handling is why people can't go on crane breaks.

Yep.

You and I think this, this is somewhat pegged to the size of kind of like the lower middle market. Is that your— is that your—

totally agree. And I think the, the inability to have discipline around making exceptions is what keeps those companies small. Yeah. And keeps them from scaling up and getting to the point where they can have a real leadership team. And absolutely.

And do you think— I think what it is, is that much like a lot of things that you and I talk about, and I'm talking about this in my personal life too, which is you had a certain identity at a certain phase, and you're still operating under that identity, and you need to set it down.

That's right.

And so I think why this is hard for people is they remember when they had 38 doors and they had to drive an Uber on the side just to pay their bills. And so regardless of size, when somebody calls and says, I want to hand you money, they still remember what it felt like to have 38 doors and drive an Uber. And so they say, we'll make it work. We'll make it work. I think it's a hangover of an old identity.

It absolutely is. And And it comes from such a great place. I mean, you know, property managers when they get started and, and even after quite a while, they think of themselves as community members, right? I'm here in my local community. I'm providing housing. I'm providing return on investment for my investor clients who may also live locally. And so, and remember also a lot of these people come out of being realtors and realtors. It's like you say jump, they say how high. They're basically glorified executive assistants for the 60 days that your home is in contract or whatever. So they— it's almost like a moral issue for them. They're like, well, this is kind of a friend of mine, he's asking me to do this, why would I say no? I mean, that he's paying me, like, I don't understand what you're saying. Why? He's paying me. That's like kind of the beginning. And, um, so it's difficult, right? Because it was easier for me because I'm not as nice of a guy. We're both also— I didn't grow up here or anything.

We're both from New Jersey.

Yeah. So I have no problem saying no or telling people to like, no, it's, there's actually a cost. That's actually extra fee for that or whatever. So, so yeah, it's a total mindset shift. It's a total mindset shift of like, I'm here to serve my customers in whatever way they need me versus I'm building a business to serve a specific set of customers in a specific way. And a lot of our early customers may not even fit that profile.

Did you read Built to Sell?

Yeah.

You're switching, you're switching between two things that I want to call out, which might, it might be industry practice, but in this book, and it stuck it in my mind forever, which is the difference between a client and a customer. You've said, oh, my property management clients. Clients are people you say yes to. They're my client. Oh, you need me to? Sure, I'll come after hours. You're my client. Oh, client satisfaction is what we care about at RL. My customers are people who buy from me.

My customers are people who pick up coffees in the drive-through, right?

My, my customers. And he talks about even in a valuation exit scenario, if you say we have clients, you are valued like a service business.

Interesting.

Versus if I'm— it's the one where it's got blue and white on the COVID I think it's both.

Oh yeah. It's about the logo design.

Yep. Yeah. It's about, uh, productized service, which is basically saying no to, we're your one-stop shop marketing agency, you're all my clients, everything's an exception. Sure, I will deliver the creatives via text message just for you instead of making you use our in-house software.

I think about that book every time I talk to— I know a logo designer, we use him for the Crane logo and we just use him again for the PM Trends logo.

Yeah.

And he's fantastic, but all he does is logo design. And I'm like, yes, you're the guy. You're from—

you lived it out.

Yeah.

The reason, the reason why I think about that book all the time is I'm on a jihad within Sagan about bad AI writing and I'm like, you know, eviscerating our team and it's, it's not bad AI writing. It's just bad writing where they used AI.

Yeah.

But the number one tell that somebody didn't read what they sent me is they call it a Sagan client because they know AI will always say it and they know that I will go off the roof if somebody says client, not member or customer. And so I think about that book every time. I send an email to somebody 5 levels down the organization saying, you didn't read this because you called them a client. Do it again.

So I, I'll tell you why they're clients in the property management world.

I'm just saying in that book you're, you've called them in this conversation, both clients and customers.

Property managers have this issue where we actually have 2 customers. We have the tenants and we have the rental owners. Normally we call the tenants, tenants or residents. Sometimes we call 'em customers and the property owners we call clients and Owner.

And what about owner investors? I like owner investors.

Owner investor. You know, we have this fiduciary duty with them. And so it does rise above the level of just a customer. And I think that is appropriate. Um, so there's tension there, but you don't think of customer as diminutive.

I mean, Goldman Sachs has customers. It's not like, oh, only the fast food. It's like, it's to me, it's just a signal to your team. And to them, that like what, what business you're in, we produce repeatable outcomes with no, we don't do everything. Like, that's why I like it is it signals, you know, I tell our team all the time, I send it to our team, a, um, a video of Marco Pierre White, who is a French chef. Cause I talked to them a lot about French restaurants. I think there's a lot to learn. And it's this whole video of him saying, The customer is not always right.

Yeah.

Just because they walk in and they want to put ketchup and have an overcooked steak, I say, thank you. Please leave. Thank you. Please leave. I will not overcook this steak and I will not give you ketchup. And that's like, there are people who've made millions of dollars saying yes to everything. I'm not judging that. But what I'm trying to build is much more like, like, like, I don't just say yes because you handed me money. I want to be a trusted advisor and that might be no, or I don't think I can serve you well. Yeah, right.

Let's talk about, um, exceptions. Um, where do we want to go with this? I want to talk about your— like, the team— like, inside the company, um, you're being asked about exceptions to policy, whether that's an employee asking something, a vendor, or a customer. So let's move out of the sales discussion. Sure. Move, move into current customers, you know, uh, team members and vendors.

Yep.

Um, how do you handle these exceptions? You know, because it comes up a lot. And so you're, you're basically being asked to make a decision 1, 2, 20, 50 times a day about an exception. How do you approach that?

I don't know if this is right. I can tell you what I do. I don't know if it's right, which is I give our leadership team a ton of context. My job is chief context officer. Here's what we're trying to do with this AI thing with Crane, and here's what we're trying to do when we switched our pricing, and here I give them—

so I'm picturing like an employee comes in, they're like, is it okay, is it okay if I take off next Friday? You're like, well, here's what we're trying to do with AI, and here's what we're trying to do with these enterprise customers.

No, usually what happens— it's actually, it's funny you say that, but A form of context is if I have somebody new on the team, I say, look, we have adult rules. I'm not going to be in your business about keeping you green on Slack or how long you take for lunch, but the company always needs to get evened out. So if you worked late, I'm not going to be in your business. But if it ever catches my attention, basically you're done. It's one strike you're out if I ever even care to comment on it. So when you ask me for time off, they all say, hey, I'm taking 2 weeks off. I know you're going to say of course, but I wanted to ask you anyway. That's how they come. Yeah, because they understand, because they've been so context-rich on personnel or even expenses. So we're— we flew everybody to Argentina and they were like, well, do we have a budget? I was like, no, just be a responsible steward of Sagan's dollars. I have no interest in looking at a hotel receipt for $83. Yeah, no, be a response. And if you are not a responsible steward, you're fired. Like It's because like that's, and so that's for me again, I was such a classic founder like approach to it, right?

HR is rolling over in their graves right now. They're like, oh my God, we need to give guidance to these team members.

Like I said that, and it was, sorry, it's our talent person. We don't have HR or else I have to quit that. The team all knows that if we ever have an HR person, I have to leave.

So, you know, man, I love our HR person.

It's just supercharging our team with context and goals. And giving them a lot of touchpoints as to judgment and saying, guys, this is a one-way decision. You need to slow down because we can't go back once we do this. Oh, guys, this is— why are you even asking me?

It's— yeah.

Did you read One Minute Manager? Yeah, I do a lot of— I do a lot of— I think you do too, which is, hey, take me off this email thread.

Hey, yeah, I do that a lot too.

Do not ask.

You know, Wolf was really making fun of me the other day about this.

Our head of recruitment, Soph, who I work with a ton, she'll come to me and she'll be like, hey, I was thinking about doing this. And I go, you know who I should ask? I should ask our head of recruitment. She's like, okay, I know, okay, fine.

And then she'll— I do it in Slack too. I'll be in like some kind of a weird group Slack. I'm like, can you guys take this DM? Like, I don't want, I don't want to be in this anymore.

You know the problem with that though is when you and I do stuff together, you and I are both like that. So it's like, I don't know, like, you know, you and I are both It all works out, but you and I both have that approach, which is like, why are you asking me that? I don't want to read a contract. Yeah. I don't know. Like, does it make sense?

Right. You know?

So, uh, that's how I do it. How do you do it?

Um, so thinking has evolved on this over time, you know, in the beginning, of course, I wanted to really make every decision and think through from first principles. What does this mean? How does this all work? What are the implications? I also, I mean, I think a lot of entrepreneurs reach that framework where they're like, okay, is this a one-way decision? Yes or no? What's the cost of being wrong? What's the, what's the advantage to being right? Like when you're asked to make a decision or an exception, you get, there's like a framework for decision-making around, you know, one way or not, upside, downside, risk.

Yeah.

Does it set a precedent? Culture, you know, all that stuff. Um, There was a while there where I just like, I had to slow down my responses to questions around exceptions because one of the things about business, like in a company, is that if you are very fast at responding to questions, you invite more questions.

You become the question answerer.

Yeah, that's right. You become— I, I heard this from someone else, but for a while I was using this language. Um, I'm not a, I'm not an answer dispenser. Like I'm not a PEZ dispenser. I'm not an answer dispenser for your convenience. Like, have you looked at Notion? Have you searched your email? Have you, you know, have you run this through like the company values? Right? So those are things I think about. Um, as you, as you mature as a business owner and as your leadership team matures, questions around exceptions should really be handled by your team. Um, and you should be the exception to the exception. Like if there's a—

and your team is operating under your little framework, right?

Yeah.

Policy. What are the stat— right there?

Uh, values, policy, process, and tech. And that—

and when they make an exception, what they should say is, well, our value here, or, you know, our— the value that I think this is relevant to is, uh, do right by the customer unless they do wrong by us. And that is in RL Property Management. And the reason why I'm not going to give this guy a refund is he lied to us. And I know he's upset and I know he might leave a bad review. So I know you, Mr. Working Level Person, want an exception to give him a refund, but I'm operating under this value, which is he wronged us. Let him write the review. I'd be happy to respond to it. And you're like, awesome, great, just fantastic decision. You tied it to a value. That's the purpose of values is they help you make decisions.

Yeah. A couple more things on exceptions is like your stand— your SOP, like there shouldn't be a lot of exception granting. Like by definition, an exception should be unusual, right? So if you're making an exception half the time, you have a bad policy. You need to rewrite the policy to accommodate. You either need to reestablish your boundary or you need to rewrite the policy to accommodate the fact that, well, actually, like for for this specific type of customer, we do want to offer refunds almost every time they ask. We'll make that part of the policy, and now it's no longer an exception.

Correct. So broaden the tent. Yeah.

Yeah. Um, now, no policy should— a policy should not be written to cover every conceivable scenario. That's the other mistake, which is people suddenly have a 25-page policy about if when an employee requests a day off, right? That's too far the other way. Um, a good process or policy covers 90-ish percent of the situations that run through it or the decisions that it's making. Um, it's okay that there's going to be some exceptions. Uh, so that's— people tend to swing too far one way or the other. They either have no policy and no process whatsoever, or they try and make a policy or a process that covers every possible conceivable scenario because they never want to hear about an exception.

Um, I'm going to tie two concepts in here that I think are very useful. That you can definitely play with. The first one, they're both kind of military concepts, and I might butcher the acronym on the second one because I've only read about it. The first one, which is interesting, which is— I, I might reverse it, but I will try— is the Air Force hands a flight operations manual to their fighter pilots and says, here's your manual, and if it's in here, you can do it, and if it's not in here, you can't do it. And it shows them what they can do and what moves they can do and whatever. The Navy hands them a thing that says, here's a book, you can't do any of these things, but if it's not in this book, you can do whatever you want. And I try to do the second one, and I might have reversed that, by the way. Some naval aviators probably rolling in their grave if I messed up the order. But I think that's interesting, and it ties into the other one, which is another military one. I think it's called CCIRs, Commander's Critical Information Requirements. And essentially what that is, is you say, guys, You're free to operate under, basically, as long as you live our values, as long as you use judgment, you're free to do whatever you want. But if somebody says the word, I'm going to serve you, it needs to come straight up right away. Skip every, so it's basically saying, here's what you get to wake me up about. And so you, and now it's very clear the level at which they handle exceptions versus you don't make an exception as to whether or not you're going to go to small claims court. There is no scenario ever where I expect that not to come onto my radar as the small business owner.

Mm-hmm.

And so you can be explicit by saying, generally speaking, guys, just because somebody complains and doesn't like our pricing, I don't need to hear about it. Generally speaking, just because somebody didn't move out— great. We're evicting somebody who's been with us for more than a year. I'm probably going to want to see that in the weekly leadership. And here's how I want to see it. So I think also by providing shape with some structure and kind of like broad-based standing guidance, I think that can also do a lot of heavy lifting for you. Yeah.

Um, you know, I'm, I'm, I think it's important to start to document these things. So if you start to like, if you put in a, if you put in a form that's like accepting request form and you start forcing them all to run through that form, you'll very quickly realize that there's buckets. And first of all, there's buckets, so there's categories that are going to make sense intuitively to group them. And you're also going to find that there's a bunch of repeated exception requests.

Yeah.

And that's an opportunity to just revisit the policy and incorporate whatever the exception request is into the policy to either explicitly allow it or explicitly disallow it so you don't have to continue making decisions on it. So an example would be like for us is like evictions, right? We file 30 evictions every month, 20 of them pay off. 5 of them go to court, the other 5 go on a payment plan. The first 3 years I was operating, every single one of those was a one-off decision. Well, for this specific situation, you know, I talked to the owner and blah, blah, blah. After we ran through 100 of them, it was all captured in the document on how to run an eviction at RL Property Management. And I never hear about evictions and haven't for years because it's all been captured in sort of the exception handling. When you're talking about the CCR thing, that reminds me of commander's intent. Uh, which is a great—

which is context building.

Yeah.

It's as long as you live within my commander's intent, you guys can do whatever you want.

Yeah. And so no need to escalate to me. You know, you understand now the context and the goal and the mission. If it's in service of that, go forth, you know, and be married.

Glad you remember that. Hey, so you remember, you read that, uh, sideways PDF I sent you?

Oh, I have a hard copy back here. Yeah.

Oh, you have a hard copy now? Uh, I, I wanna tie this to two things too, which is AI and buying a business. I think when you look at a lot of these subscale businesses, of which I've bought and many people listening have bought or are trying to buy, I actually think, and I will tell a specific story, the journey towards breaking free is a journey of closing exceptions. So when we bought our home improvement company, there was not an approved price list. Why? Because it was the owner running the sales calls and he would just say, oh, the crew's not that busy. And yeah, we got some extra drywall in the warehouse. Hey, uh, I don't know, how's that? $10 grand. And we came in, we're like, step one is what do we sell? Which was reduced. And then step two is how do we price what do we sell? And then step three was how do we deliver what we price and sell? And so the journey that allows hockey stick growth to me is, is, is institutionalizing and and formalizing judgment to continue to shrink the loop. How many exceptions do you think the franchisee of a McDonald's deals with?

It's all documented, man.

Zero.

Yeah.

Right? How many do they deal with? Now, what do they do? They recruit their GM and they try to go get bet— they're looking at new— yes, exactly. Why do you think McDonald's are so dang valuable? Because they're not getting, hey, this guy tried to return a hamburger. Do we have a return policy? He never gets asked that question. And so I think in a, in a subscale, high Main Street or low middle market business, the journey of professionalization that is oftentimes most, most critical is the journey to reduce the area under the curve of exceptions, which when you come in, it's huge. And over time you want to shrink, shrink, shrink, shrink, shrink.

Yeah, that's a great way to think about it.

Is that, is that okay? You don't mind that? Okay. The second thing I was going to say was AI. Which is, to me, especially building these autonomous AI agents that are making decisions, it is almost identical. Which is, when you talk about— have you ever heard the word context in, in agents? Of course. So you want to—

context window, it's right in there.

You want to shrink the amount of things that it has to guess on to create a more predictable output. And it is the exact same act. Why did it send an email and call it RL property ownership, not property management, because you didn't give it context. It made a bad decision. And so things like don't do these things without me are identical when you're training an agent workflow. Here are the 5 things that if you ever see in my personal email inbox, do not respond to. This is my wife. This is my business partner. This is my accountant. What are you doing? CCIR is for agents. Hey, send me a text if one of these emails comes in from AppFolio C-suite. And so, I think that all of this stuff maps really well across some of the favorite topics of Lazy Leverage, which is agents, leadership, global talent, scaling, getting out of kind of death zone business and into systems-oriented business. There's— exceptions are actually a pretty strong throughline in a lot of what we talk about, kind of implicitly, not explicitly.

I think as a general rule of thumb, most entrepreneurs need to tighten up by a couple clicks on when they allow exceptions. Like, if you think about like permissive versus strict on do you allow an exception, whether that's from vendor, employee, customer, whatever, most entrepreneurs would have a better business if they tightened up a couple clicks. In other words, were less permissive and said no more often to an exception request. A lot of, a lot of entrepreneurs, they're great people, they love their team, they love their customers, that's why they're in it. They, they love what they do. They feel maybe a little guilty about some of their success in some cases, and so they tend to be a little permissive. Um, also lots of times they're not the one who actually has to deal with The consequences of allowing exceptions that ends up falling on like their number 2 or their team or whatever. And so they have a tendency to say yes to things because they're out to lunch with the guy or whatever. Um, so that's kind of like my practical takeaway here is tighten that up a couple clicks from your natural instinct. And I think you'll be happy with the results.

I think it's a fantastic point to kind of end on, which is, which is I think a lot of what we're trying to do every day is when you start something new, everything is an exception because it's the first time you're doing it. Yeah. And the journey of business maturation is slowly having it be from everything requires an owner decision to, yo, that's a zap now. And it used to literally require my personal cycles. And I think you can track business maturation it's a very interesting axis by which to talk about a business's, like, systematic maturity. I think it's a wonderful way to think about it as exception handling.

Yep. I mean, you just— if you want to be amazed, write down every decision you have to make for a whole day.

Yeah.

And, you know, whether that's to archive an email or respond to it, or handle a Post-it note that was taped to your door with a question, or Someone's asking if you want to take this phone call, or, you know, yep, it's crazy. And we wonder why we're burnt out when we get home at the end of the day. It's those decisions. Decision fatigue is a real thing.

Yeah, and the best way to reduce decision fatigue is get better at managing and implementing and pushing down exception management, we'll call it.

Cool.

Peter, final thoughts before we wind it up?

Final thoughts.

Also, while you're thinking, I will say we are now on YouTube. So if you like YouTube your stuff, please do that. Please also, if you haven't already, and if you're consuming a lot of our stuff, leave us a review somewhere. I don't know, in like Spotify or Apple Music. Apparently that helps with discoverability. We've never really asked before. Um, sure. But, uh, you know, send a, send an episode to a friend.

I don't know.

That's my only ask. Peter, any other thoughts to wind up with?

So My First Million calls this the gentleman's agreement. I don't know if they still talk about this, but I always liked the concept, which is like, hey, we do this for free. Um, we don't charge you for this. And I think a lot of people, if you're listening, you're probably getting value. The only thing we ask in response is just to subscribe. So if you're on YouTube, hit that subscribe button. That's all we ask.

Love it. Well, thanks for joining us at Lazy Leverage.

We'll see you next time.