the only 3 jobs of a ceo

Is that—

I'm doing— yeah, that's right. Uh, I'm doing great. How are you, John L. Matzner?

Close enough. Uh, uh, I'm doing great, man. I'm very excited to talk about what we're talking about today because I oftentimes— one of my favorite things to study in college and university was comparative politics because I oftentimes find by comparing two systems that both function and that both work, you can root out core principles. So Switzerland has five presidents, and in Germany, parliament appoints a prime minister. So by studying different philosophies, oftentimes you can explore what are core principles. You and I are going to be talking today about different philosophies for what a business leader or CEO does, both of which are proponed by highly intelligent people, but it might reveal kind of you and I's deeper philosophies or help you think about your own. Is that a good introduction?

Yeah. I mean, the way this came up is on some podcasts recently, or when you and I were chatting, one of us said something like, you know about the, uh, the only 3 things a CEO does, right? And we, and I was like, yeah. And I said, yeah, the only 3, everyone knows the only 3 things that a CEO does is set the vision, hire, and don't run out of money. And you looked at me like I had 6 heads and said, no, uh, actually the only 3 things the CEO does is raise the standard, increase the pace, and increase focus. I said, what are you talking about? So I think it would be fun to explore these 2 paradigms of thinking about what's the job of a CEO. Uh, and we, we managed before the show to find the original sources for each of our 3. So, um, yeah, comparative. We'll, uh, talk about these three and how we've implemented them in our businesses as CEOs and try to figure out what's the, what's the bedrock here? What's the, what are the underlying principles that set these up to be effective? Is it for different company sizes? Is it for different management styles? Why are there two fairly different, um, ideas about the job of a CEO and both being espoused by very successful people?

I will intro this by citing a very often quoted story by me that I talk about all the time. And it involves Dr. Drew and Adam Carolla back in the '90s on their Loveline days, if you know that reference. And somebody had called in with a tricky parenting problem, saying, I don't know, should I, you know, put my child on timeout? Or should I take away their bicycle because they hit their brother or sister or something like that? And the first thing that Adam Carolla, who who has this kind of like folksy wisdom says is, my brother, you're the kind of guy who's calling into a show to learn about how to be a better parent. You're not the problem. Like, and so similarly in this topic, I oftentimes think if you're a reflective business leader, to some degree, the particular methodology, it's more about being self-aware and thinking what is The job— my job is to answer correspondence and be— So just the fact that you're interested in discussing what your actual job is, frankly, compared to most business leaders other than the very top echelons, I think you're well ahead of most people running companies that are in the—

That's a great point.

So that's just my initial reaction. I talk about that all the time. He's like, bro, you're calling into a radio show about being a better husband. You're fine. Yeah, you're fine.

I don't know. Some real truth to that. I've pulled that one out. Something similar. Yeah.

Yeah. I just, I always, I always reference that and it had to do with parenting, but I think in this case, leadership philosophy. So that's my initial kind of entry point into this is just like, Peter, write down what you think your job is.

Yeah, they're both right. Good show today. Yeah. All right.

See you later. So maybe why don't I start with, um, cause I actually taught this article in one of our emerging leaders classes. And I'll talk about this article, and it's from Frank Slootman, and it's called—

here you go.

It's so funny. The introduction of my research here, it says, Slootman is a legendary tech CEO known for taking 3 companies to massive IPOs. While most people point to Fred Wilson's classic vision team cash framework—

That's it.

Slootman is different. So you're talking about what is the classic Fred Wilson Vision, team, cash. So these are the 3. And the way that I introduced this to my team was, I think that these are 3 things that organizations don't naturally do without leadership. That was my— that was how I introduced this, which is, if you look around in a state of nature, there is an entropy in an organization, like natural entropy, that for first and foremost Causes a dilution of focus first and foremost. And without the heavy hand, without the heavy hand, without the guiding hand, sometimes heavy, of leadership that says, guys, I see a lot of motion and not a lot of movement.

Yeah.

We got to sharpen our focus, guys.

I wrote about this in, uh, we did kind of an alpha test of a Tuesday version of my newsletter and I was on it.

I'm a super subscriber.

I love that. Yeah. So what I wrote about for that issue, uh, the title is your new job title is Dr. No. Basically, you should just be default no to every new idea, every new opportunity, every new revenue stream, every ancillary business, every side hustle, side project. Your job is to keep the team from getting distracted on 1x opportunities and save their ammunition for the 5 and 10x opportunities.

You said something to me, and I think you were quoting somebody else, that, you know, you and I's brains are— we're very kind of like different, kind of like on the surface, but deep down, I think you and I are structured very similarly. And so oftentimes we drop things to each other that keep us up at night. And one of the things that you said to me probably years ago at this point was like, it's not an exercise in prioritization unless it's painful. And that is such a terrifying— like, unless you're like, no, no, I know I would make an extra $30,000.

You would.

I know I would, but it's not priorities unless you're actively saying no. And I'm like, that is like a freaking dagger in my heart, that statement. And I think you said that to me 3 years ago.

Yeah. And at a company level, so that's, you know, this applies at the individual level and at the company level. At the individual level, you have, you as a CEO, business owner, or even as a leader, you have a huge opportunity cost on your time. And most people drastically undervalue their time because they're used to thinking of it in terms of like their W-2 earning rate. But that's not the right way to think about your time. It's kind of a derail to talk about why that's so, so distortive to your actual value. Um, your actual value of your time is massive, massive, massive, probably many thousands of dollars an hour if you're listening to the show. And so you need to think like that and evaluate opportunities like that as an individual. The other piece of advice I heard years ago, which I really like, is every new direction you go in your career should— I think this is a Sam Altman thing— every new direction you go in your career, every new opportunity you take should make the rest of your resume look like a footnote. You shouldn't leap from a 1x opportunity to a 2x opportunity or 1.5x opportunity, right? Yeah. You should only move off what you're currently doing if it's a 10x potential and you kind of run the, you know, the risk-adjusted return of making a move. This goes for businesses too. Like, we run a property management business. There is 100 different things we could get into. We could open a little plumbing business, we could open a little landscaping business, we could start to do brokerage, we could, you know, we could open up a business in Cincinnati. Like, there's so many things we can do Problem is they're all 1x opportunities. They would roughly double in the best case.

And Crane is a 10x because of the leverage and the— Yeah. The other one that I'll insert in there, again, before moving on to the second one, that I— For what it sounds so silly to say, it's so fundamental, but it's so profound to me. And it's a Steve Jobs thing, which is he basically says the essence of strategy is what you say no to.

That's a Michael Porter thing.

Oh, is it?

Yeah.

Well, I also love Michael Porter. Yeah. Uh, but Jobs has some quote where he's like, I'm most proud of all the things I said no to when I was building Apple. That, yeah, because they were all okay or they were all B pluses, but to be able to create the clarity of no was what I'm most proud of. And that it's, there's just such a, wisdom in that. And so, I don't think that organizations naturally focus. And so, even things like EOS or things like OKRs or things like the one big thing or things like the vivid vision, these are all tools that essentially are, you know, correlates to which is focus. Focus. Right?

Yeah. So, I just reread Michael Porter's famous What Is Strategy article from like 1995.

His Competitive Strategy book is one of my hardcover books that I constantly revisit.

Yeah. And the quote from that article, it's actually from that PDF. The article is, the essence of strategy is choosing what not to do. Love that. So good.

And I, you know, I still work one-on-one with some CEOs, and when I hear them all the time, they think strategy is what we're gonna do. Here's the things we're gonna do, and there's 6 things. And it's like, no, brother, the, the, your job is what we're not gonna, hey guys, we could make some money there.

No. Yeah.

Hey guys, that would generate some leads, but it's not gonna transform us.

No. Right.

So, okay. Second one, raise your standards. Most companies inadvertently accept mediocrity. Don't accept it's okay. It's not bad. Send people back until they are bursting with excitement about their own work. The example that I've referenced in other episodes with us is I find, and I don't think it's just, I mean, it, it probably is a little bit because I'm not hiring people who were working at, you know, Deloitte before or something like that. Sometimes I do. But the per classic example is when people rate meetings and the first time they rate everybody and you say, you guys can't say 7. If I have, generally speaking, if I have a team from our, you know, a group from our team. Every single person gives it an 8 or higher.

Yeah.

The first time you do it. And I'm like, 2. And then we do it again. And I'm like, 3. You guys didn't have typos in the slides this time. And then they do it again. And I'm like, good. You still read the slides though. Still a 3. And then 3 months later, 3 months later, when they finally tightened up how to do it, And I give my first 8, I'm like, you guys know what good looks like now, right? And they're like, yep. And so I think that oftentimes a leader needs to be the one that says kind of like not good enough, not in a recalcitrant way, not in a— I have a running joke with Ken Otto on Twitter, by the way, that I have to use a $5 word. So I just used recalcitrant. So he sends me a tweet for every— so it's a running joke because I use dross. So I just used recalcitrant.. But you don't, as a leader, not in a recalcitrant way, like we only accept A+ work here. It's more teaching, teaching them to love high standards and helping them get there. It's not like this, we only hire A players nonsense, which makes me vomit. So thoughts on raising standards?

I love that example. I actually used it at our leadership offsite this week about like your job as a leader is to raise the standard. I use that example of rating the meetings. Um, it's, it's a great way to frame it. And you, and I mentioned this on our last show, I think, but you, I think, have a top 1% skill in this area of leading and coaching and delivering feedback that is harsh but positive from a, from a place of caring about the individual, but still not willing to compromise on standards. Like, you walk that line so well. And it's so rare. I've never worked under somebody like that. And I really wish I had, because if I could have worked under somebody who was like that for a year, I would have been able to, through osmosis, pick up that way of speaking and that way of being with people and that way of delivering feedback. And I just never did. The people who I worked for, every role model in my life pretty much has either been too far one way or the other. Too far, hard-ass, aggressive, rude, waste of time.

High standards means being an asshole.

Yeah. Or just go along to get along, right? Just make everybody happy. Oh, that's okay, right? Um, and I— yeah, it's— if you can— if you're good at that naturally, if you can get good at it, it is a superpower, I think.

Because you know where I— you know where I got it?

Sports.

I got it from being a freshman in high school, having a large Black man grab me by the face mask and say, Matzner, I love you, but if you miss a block again, I'm going to make you run until you puke.

But, but how does it work though when you're in a business context? Cause you can't do that. Like I can see how that would be memorable and effective, but I can't do that at work.

Oh, of course you can. You can say, Sarah, you got a few minutes? Come on into my office. Got, you know, is now a good time? Right. Okay. So, you know, just honestly, that frankly, that even just that sets the tone of asking permission to say, is now a good time? And she might say, no, I got to go, whatever. Or, but even it shows to me a level of relationship respect to say, is now a good time? I want to talk something, talk, talk about something important with you for a few minutes.

Just let me pause though. Yeah. I think you're right. But I also think just the very act of like randomly asking someone to join you in your office or on a Zoom call, like not a scheduled one, is effective enough at getting their attention. Like, oh, this is serious.

Yeah, I do it all the time and I never do that. I literally never do that. Hey, got a few minutes? Yeah, I am constantly doing so. That right away, Peter or Sarah, let's say it's Sarah, Sarah, first of all, you know, you know, I've loved your journey here at RL Property Management. I've seen a few things over the last few weeks in terms of the quality of your work that I don't think represents what you're capable of. I wanted to sit down and first of all, let you know that I see it. I think you got a lot more in you and let you know that I'm here to support you and get into the next level because I don't want to make a change. I think you're awesome. But I also know that the work you've been doing in the last few weeks— I don't know if there's something going on outside of work. It's none of my business. I need you to get to this level because you got it in you. I've seen it before. You're just not getting there every day.

What's up?

Like that kind of like, like, don't make me do it kind of energy I find in terms of raising the standards is kind of like, it's not don't make me do it. But you know what I mean? It's like, hey, like, I don't want to make a change. But what's the implicit threat there? I will if I have to. Right.

So, so I think that kind of high care, high honesty, I just get a lot of Yeah, the other thing that comes up for me with raising the standard is if you as a CEO are going to be responsible for raising the standard, you need to know what good looks like. And that's often a problem for entrepreneurs and small business CEOs because you may have never worked at a high-performance organization. You may have never been around a truly exceptional leader. I know that was the case for me. So you— part of your job as a CEO then, it's implicit that you seek that out, right? You listen to podcasts, you watch videos, you read articles, you go to retreats, you join peer groups, you join Sagan or Crane or EO or Hampton and get around other people who are top of their game, world-class leaders and CEOs, so that you know what a high standard is and you can bring that back into your organization.

I'm struck— one of my favorite documentaries of all time, and I've mentioned it before on the pod, is SOM. About these 4 guys studying for the Master Sommelier exam. And one of the things that stuck out to me the most, and it's just such a great scene, they all go to a farmer's market and, and they're over there, they're biting into unripe tangerines and then they're smelling lemongrass. And what are they doing? They're developing their taste and calibrating so that when they taste it in a wine, they're like, that's burnt orange.

Did they drink water from old hoses and stuff?

Yeah. They cut, cut rubber hoses.

Right.

Cause that's like a Chardonnay tasting note or something. Right. But if they don't do that, they don't have the palate to taste wine effectively. And it ties into what you just said, which is if you don't have these touch points of quality leadership or bad leadership or whatever, you won't recognize it. Yeah. You know? And so I'll say one other small thing on that too. About raising your standards, I think part of it too, and it really is also the meta text of this conversation, is recognizing that leadership is a skill you develop. And that's what the military does so good is in every business, it's like, who's the leader of the engineers? Oh, the best engineer. And the military is like, what?

No.

Do you know the 6 characteristics of a good leader? Do you know the 3 jobs of— It has nothing to do with your engineering ability. Are you high integrity? Are you— and so I think part of it too is also becoming a student and recognizing that just because I'm in charge doesn't mean I'm a good leader. Yeah. So that's the other piece of the— to me, that is also the meta with all the—

okay.

I want to get through this. So that's the second one. Any more on the raise the standards one? Nope. My last thing on that would say, ideally, it's written down. You know, and it doesn't need to be a 10-page document. It could be— I'm doing some training right now with all of our recruiters, and we're talking about this ingesting jobs process. And I wanna put a north star. What's the standard? The standard is that our members are excited about their upcoming hire, and we believe that we have a high likelihood of filling it. That's the standard. It's not we bully them into accepting a higher budget. It's not that we say yes to something unrealistic. It's that we are excited about filling it and they are excited about the journey because we've built that rapport and relationship. That's the standard. And that's written down. And it's not, this is what we do with the form, or we call them. It's like, no, this is the standard. There's a lot of different ways to get there. And so I think if you write that down and you can point at it, and then when there's somebody below that standard, you're like, do you think Peter's excited about that hire? No. So it didn't meet the standard. So I also think, you know, Kind of like vivid vision, essentially.

Like, sure.

Okay. Last one. Of course, my favorite one. Pick up the speed, right? Teams do not naturally move fast. My dad taught me this too. My dad would always be like, hey, we can connect about this next week. And he's like, how about tomorrow? Which is one of my favorite characteristics. It is in, in, in, you know, inculcated into my personality, which is freaking gas pedal, gas pedal, gas pedal.

Yeah. A couple of thoughts on this one. So there's two, two different things that come up for me when I hear this. One is, um, Alex Hormozi talks a lot about, can't we just do more? Like, you know, how do you get sales? Well, every time we post on Instagram, we reach, we get 5 leads and usually one of those converts. He's like, great. Why don't you post on Instagram? 40 times a day. Is there anything preventing you from doing that? So he's huge on just whatever you're doing that's working, think about what it would be like to 10 or 100x that, not Isaac.

Isaac Zimmerman said that in my podcast, our Lazy Leverage podcast. And it was just so, again, it's these like little simple cookie. It's like more is more.

Yeah. Yeah. More is more. What did you tell me one time? More is, more is a quality of its own or something.

I, I will tell you offline who I learned that from. It was quantity has a quality of its own.

There it is. Quantity has a quality of its own.

This is in my old career and I was just like, but it was just like so simple to hear from a guy. He's like, hey, how you getting your leads? Oh, Peter makes content. It's like, so can you make 10 times more content? Right? You're like, oh yeah, that's a good point. Why am I, why am I gonna go try Facebook ads? I know what's working. And so, you know, accelerating the pace on that.

We need a little bell to ding every time I get my Alex or Mozi reference in, by the way, and a different sound every time you use a $10 word.

Yes, we can absolutely do that.

Okay. So the other thing that comes up for me with, with the increase the pace thing, coming from an engineering background, I have a natural propensity to not Uh, to not conflate speed with quality. And in fact, in many cases they're inversely correlated. So if I send someone an email and they email me back in 30 seconds, I immediately have a negative response to that. Cause I'm like, first of all, why are you in your inbox 24/7? That's not productive. Second of all, did you even really think about what I wrote or did you just fire off the first thing that came into your head? You know, in engineering, you're on a project for months and you're doing analysis and you are thinking deeply and you are doing calculations. Like, so I don't really know how to square that with, with what has been my lived reality, which is that people who are super responsive are highly productive. And it's like, there's something about—

I can tell you how to square it. Yeah. I can totally tell you how to square it. It has to do with one-way and two-way decisions. In engineering. If you are sloppy, a bridge crashes into the side of a fucking mountain. In Crane, if you're sloppy, you send an email saying, "Sorry, here's the corrected link." And in some, you know, in some, you know, here's, sorry, here's the link to the updated webinar. Right? In some high-stakes environment, one mistake out of 1,000 is failure flying airplanes. Oh, we have a 99 point— You know how many crashes there'd be per day if planes were 99.9% safe? There'd be 1,000 crashes a day. In building a property management community, speed, and I'm going to modify that slightly, but speed is way more important than error-free. So I think that that's how you square that. You came out of a high-stakes mistake environment.

I, I agree with that, but what about this idea around context switching and context switching and multitasking, which is proven to reduce effectiveness and efficiency? So when people are super responsive and, and like jamming projects into their schedule, like move it up, go faster, yeah, there's just a part of me that's like, that cannot be efficient. This can't be the best way to do it. Like This country was built with letters.

One of, one of Peter's legendary rants.

Is this from my business partner Adam? The space program was done with paper, twice a week mail delivery, you know, or twice a day mail delivery, right? And, and you think it's important to respond to an email within 1 hour?

Really? My relationship with this, I want to take it slightly off to the side. My relationship this with this is very different than you because I'm not I don't think of this as speed of responsiveness. Okay. I think of this as speed of something that we've talked about before, of observe, orient, decide, act. Speed of decision cycle, which is, hey, we should try direct mail for Crane. In some organizations, to, to observe, orient, decide, act, to observe, orient against the problem, decide to do it, launch the mail campaign, see its success, launch more mailer. That cycle might take 6 months and in a highly speedy organization might take 15 business days. And so you and I were talking about this, I think on a pod a long time ago, where it's like if 1 out of 15 companies you launch becomes a success, launch 15 comp— how fast can you launch and iterate against 15 marketing channels or 15 hiring strategies or 15. That's my relationship with this. Not I pick up my phone and call back on the first ring. My relationship with this is mostly around the OODA loop, the observer— Boyd's loop, observe, orient, decide, act. Speed of action and feedback collecting, and then, and then, uh, learning from that action. Yeah. You know, so that's my relationship with accelerate the speed. It's also some of the gimmicky stuff of just, again, you have members of your team are like, hey, we should talk about your rocks. And they're like, awesome, I'll have it done by Tuesday. And the question that I love is, what would it take to have it be done by the end of the day today? Or what would it take for it to be done by tomorrow morning? Or whatever. And it's like, well, we wouldn't be able— it's like, okay, I just don't think organizations naturally move that quickly, certainly in the beginning.

I don't know, I— to me, work culture in America is already too rushed. It's already to have that on my desk by tomorrow. Like, that's the default in most cultures is managers pushing team members stupidly, um, to do more things faster, and team members then are feeling rushed and stretched and like they have to take their work home with them. And I hate that. I don't love when I can send an email to somebody that's like, hey, I'd like you to take care of this, no rush, just have it done by the end of the month. Like, that makes me happy because I'm like, you know what, they're already busy, they already got a lot going on. Why would I— if they could get it done faster, they would. Um, I don't wanna be that guy that's like, oh, you have the thing done yet?

Like, can we do it quicker? Here, here's what I would say, which is, I, you know, you and I have had this discussion. I never do deadlines ever. It's a GTD thing. Like unless there's a no shit time bound, like I have a conference, like a conference speaking at, yeah. Or whatever, a business trip. I never do deadlines where I try to inject speed in our organization. Is normative, right? Meaning it's the culture of moving quickly. It's, it's— I don't say, Bincy, I need this by tomorrow. It's this overall thing that we as an organization move quickly. We make decisions with incomplete information. We learn from those decisions and what the market is telling us quickly. It's not me going around changing people's due dates in Asana to one week before what they originally planned. That's like immature acceleration, which leads to sloppiness and all these weird— it's more just, guys, at this company, we act with incomplete information. If it's a two-way decision, we just launch it. We just launch it. It's a two-way decision. And so it's more like culturally inculcating.

Yeah.

You know what I'm saying? Like, that's the type of speed.

Here's what I think has to be true for that to work is you have to adopt a constraint theory, choking back the release of work in your organization. If your team has 50 active projects, you asking them to accelerate one is just causing more mayhem.

And 3 days later changing your mind and saying, hey, I know you're doing this other stuff, but by the way, could you get this done?

But if they only have 3 active projects and you ask them to prioritize one of them, that's a lot more realistic. And so I think that's part of what I'm sensing is that if I feel like my team's already busy, I feel like a jerk asking them to throw one more thing on the pile or, you know, move up a deadline. But if I'm doing a good job as a leader and I'm slow, if I'm deliberately and carefully releasing work to the team, I think it's okay once in a while to add urgency to one of those projects because, you know, and let's, let's loop this back to you and I, you know, favorite thing these days.

It's funny, from reading this, you've really resonated with the idea of choking back work. I've resonated with other parts of kind of like those narratives, but you've— I've heard you mention that a few times, and I haven't pondered that, that specific line as much as I've pondered other ones. But, you know, availability is a precondition for speed. And so if you've got somebody who's to the gills, maxed out, and you come in and you try to accelerate something, Yeah. Whereas you have an organization that's focused against your constraint, you've got some capacity and you need to expedite something for whatever reason, very different dynamic. And so I also think focus, these are kind of interrelated, right? Focus can breed, focus can breed the ability to accelerate. It's not acceleration on all fronts equally. It's acceleration in a very strategic focused way, right? Which I also, also really like. So, okay. So those were my 3. In closing, I'll just repeat what I said, which is when I, I don't think he says this, but the way that I interpret this and when I teach it to our team, I say, if you don't bring this energy to your team, it's not going to naturally arise. I agree with that. That is how I described, I don't know what these are. Are these the 3 things that are exogenous? To a team. Yeah. There's probably 100 different ways. I don't know if it's the 3 jobs of a C— I just know that if I or our leadership does not do this, it does not happen naturally.

That's, that's how I totally agree with that. It's— you, you mentioned entropy when you first said this, and that's the perfect way to think of it is any group, any team, any company is going to slowly melt into a blob of unproductive, going a million different directions, slow-moving, slow, unfocused, low-standard work. So you're kind of like trying to Constantly inject, uh, energy back into the system by holding, enforcing the standard, you know, increasing the pace and increasing the focus.

Fantastic. So now you give me your 3, which I also like. Yeah, but they're totally different.

So these 3 are apparently from Fred Wilson. I didn't know the original source, but now I do. Um, and it's, uh, so the CEO only has 3 jobs: set the vision, hire key talent and don't run out of money. And I've said that on and off. I heard it years and years ago. I think about it often in my role as a CEO. And by the way, we should mention like all the things that aren't on either of our lists, like firefighting for your team, doing the accounting, being at work for 12 hours every day, 6 days a week, 990s. Like there's a lot of things that are not on these lists that I think it's worth thinking about that for a minute.

I wanna go through your 3 one by one. The other one that I feel like I also hear in that one too is also like defining and enforcing the culture. I feel like that's the other one that I've heard in kind of like the classic CEO jobs. Cause if, you know, like who do you promote? How do you hold, like, that's the something around culture. I also have heard in that like same, you know, conversation.

Setting the vision is a big part of that. The vision helps set the culture and the people that you hire, but Yeah. So the company needs to know where it's going and that's, you know, setting the vision. So that's vivid vision. That's EOS. That's 10-year BHAG.

Um, is it VT?

VT?

Oh, V is vision. Yeah. So yeah.

Yeah. It's like, yeah. So you, you as a, as a leader are the guy who's telling the team where to go. And in the classic EOS visionary integrator dynamic, the visionary says, we're going here. Integrator, you figure out how. Now, of course, that there has to be some kind of strategy or reasonableness to— like, if I just told Brennan, like, we're going to 10,000 units by the end of the year, you figure out how— like, that's, you know, come on. So there's a little bit of tension, uh, inherent in that. Um, but your job as CEO is to set that vision and have some ideas about how your team is going to get there. You don't have to have every solution, but you need to have some type of a strategy. Next one is hiring. So your job as CEO is to hire and retain and attract—

Wait, can we go back? Can we go back to this?

Okay.

What does it look like if a CEO doesn't do this job? Like, what, what is a presenting symptom if they've never read this? Like, what does it feel like organizationally? What are some of the symptoms that you might see floating around the company?

Well, you're definitely going to have a lack of focus, and if you don't have a clear vision, you're going to say yes to almost everything because that all looks like an opportunity. If you have a clear vision, it's easy to say no because you're like, that's not where we're going. Like, we're going right over there. See, what you just talked about isn't getting us closer to that. So that's, I think, the number one way that it shows up. It also just shows up, I think, in kind of like morale. If people feel like no one's in charge, no one knows where we're going, no one knows what we're doing, no one has all the answers, people just get cynical. And it becomes, it becomes not fun to work there because the CEO or the leadership team is chasing shiny new things every week, or they're trying to copy somebody else, or they're obsessed with competitors. So that's what I think.

Yeah, the word that comes to mind as you're saying that is I think it feels whiplashy. Yeah, it feels like a lot of whiplash of, wait, so are we trying to grow door count or are we trying to increase revenue per door? I, based on the mood Peter's in, it might— or are we starting a maintenance cycle? And it just feels like, oh, I don't know, I'm just going to keep my head down and do what I'm told.

I love being able to pull up old emails and old slide decks that I sent my team years ago. And be like, hey, remember this thing I said? Look, we're almost done. We're still on this journey. I said we were going to get to X by Y. We actually passed that. And so now we're on to the next thing. I love pulling out my old Vivid Vision. I love pulling out old company memos and emails that went to the whole team where I can be like, it's reinforcing for them that when I say something, when I say we're going to do something, I am pretty effing serious about that. I am not a CEO who comes out with a new idea every other week. I only ask a few things. I'm really clear about what they are. And if you focus on those things, you will do well at this organization.

It's funny you mentioned that. I do a John version of that, which is oftentimes in our leadership meeting because we're, you know, we're changing and evolving very rapidly at Sagan. I oftentimes will revisit old leadership things and I'm like, guys, just so you know, these conversations that we have are not academic. Do you remember 6 months ago when we were like, hey, we need to start This, we're— it's a thing. We have 7 people. And I'm like, because I like to remind our team very consistently, we do what we say we're going to do. And this is not an academic exercise. There are 8 people who have jobs now because we're like, hey, we need to build a media team.

I think everyone's worked at a company where the leadership team had a new idea every month and it started strong and then fizzled out. You're like— and you never get closure on it. You're like, well, what happened with that? Yeah. Why didn't— what happened with ISO 9001? We were all gung-ho about that. We started the process. Never heard a thing. Yeah, right. And then it becomes a, like, it becomes a joke around the office, like, oh yeah, you know, ISO 9001.

Yeah, you and I are, you and I are both super aware of that phenomenon and have our own, like, coping mechanisms to, to kind of, like, make sure that we never fall or try not to fall into that trap. Okay, so sorry, I cut you off.

Second one. So second one is hiring. Um, you got, you got to hire A talent, John. You got to pull in A players to your team, on your leadership team. Absolutely. And you should use the WHO method for hiring, and you should use Predictive Index or Culture Index. Um, and there's a whole, you know, we can do a whole episode on hiring. I think we have actually, but yeah, that's your job, right? So you don't need to hire everyone. You need to— I don't believe in this. You hear CEOs talk sometimes like, I'm on every interview for the first 100 hires. Get the hell out of here. You don't need to be in on every receptionist interview. I think that's so silly and performative, but you do need to be highly involved in the C-suite hires, the leadership team hires, and you need to get good. Get good at hiring. Get really good at it. Get— and you need reps and you need to talk and find every resource you possibly can to figure out how to hire extremely, extremely well. Honestly, the right answer is just to read the book Who. It talks everything about this. And part of your job as a leader is to have a soft network that you can pull from when you have an opening. Like you should have in your mind 1 to 2 candidates for every leadership role at your current company that if you had a sudden departure, you know, the first 2 people you'd call for that head of marketing or the first 2 people you'd call for the CEO role. That's, that's part of your job because no one else is going to do that. You're on mute.

Do you think that you should only be involved in the recruitment of people who are going to directly report to you? That's what I would say is my general rule, is if somebody's going to go work for Bincy, I let her shop for the ingredients. Even if it's a key hire, I'm— she might see something I don't. But if it's going to report to me, then I'm very involved. Is that your— do you follow that rule of thumb or no?

That's my initial— that is How I do things in practice. Now, it depends on how big the company is. When companies under 10 team members, I probably want to be in on all of them. But the only exception I would make is if it's for some critical new direction, or it's like, I don't know, I can't think of a good example. But there are some roles that are more important to nail perfectly than others, even if they don't report to you.

I, uh, we have this, uh, uh, it just makes me, when you're talking, makes me think of this. We built this tasting guide, for lack of a better word, based on how sommeliers describe wine. It's this big thing, and we're doing it for people so that we can subjectively, uh, subjectively apply these labels to people. Like, uh, you know, not afraid to push back, like these sub— and one of them is, uh, the phrase culture builder. And it's one of the labels that we sometimes apply to candidates. Like, this is somebody who would be great in a small company because they're going to be a cultural carrier and they're going to attract other people like them. And it's like, it's a really great subjective label for certain types of personalities that they become culture builders. And I think that that's oftentimes what you're looking for with some of these hires, culture builders. That's great. I just, I love that term. So yeah. Okay. Third one.

Third one is don't run out of money. So especially at a small business, you may not have a CFO and And as the CEO, you need to understand your burn rate. You need to understand your profit margin. You need to understand what a cash flow statement is and how it relates to your income statement. You need to understand your cash conversion cycle. You need to understand if and when you should fundraise. You need to understand if and when you need to raise debt or have access to debt. You need to understand the M&A dynamics in your industry and where you are in that. Um, I think many business owners have probably heard like, number one rule, don't run out of money. And it sounds stupid when you say it because you're like, well, if I'm profitable, how could that ever happen? Well, it can easily happen. If you're growing quickly, you can be profitable but still run out of actual dollars in your bank account because of your cash conversion cycle. So cash conversion cycle is like, when do you have to pay your hard costs out related to when do you get paid by your customers? So famously, like if you're a supplier for Walmart or whatever, they pay, they like to pay on like net 120 terms, but you may be paying your suppliers, they may require cash on delivery or whatever. So in that scenario, the faster you grow, the more quickly you're going to run out of money absent some other mechanism. So these dynamics of cash and money If you have a great CFO who's whispering in your ear every day, great, that's fantastic. I don't have that. I've never had that. And so I've been forced to learn about all of these things and make sure that the businesses I'm involved in never run out of money because there is no bailout for small businesses. And I actually don't know what would happen if we ran out. I mean, payroll, like if you don't make payroll, that's—

it's the only one you can't miss.

That's the one you absolutely can't miss. My experience. Yeah, like if you don't— like specifically with payroll, there's certain things around like if you don't make payroll tax and other like things related to payroll, if you don't make those payments on time and in the right way, you are personally liable to the federal government for those things. And it's very painful, even if after you sell the company.

Yeah, if you do sell or exit the company. I, I'm reminded as you talk, and I would just put a little bit of color on it. Uh, it was— I read a book and it was the founder of ITT, Harold Janine. I was trying to remember his name. Harold Janine. He was like in the '80s, this huge M&A, whatever, holding, whatever. And he talked about how he built this massive international company, ITT, right? They do a million different things in different countries, whatever. And one of the things he said was essentially everything was pushed down to the business level our Denmark-based manufacturing, our whatever. The only thing that we centralized: finance. Finance, money. It's the— because it, you know, at Harvard Business School back in the '80s, they used to call accounting control. It was literally the class was called control. My dad went to HBS. It was called control. Why? Because the purse strings are how you can put energy into a business unit, how you can starve it, how you can control it, how you can direct it. And so I always thought of managerial accounting as control, and it is a critical lever in your management toolkit. And so not running out of money to me is part of it. Of course, you're the only person who's going to watch that, but it also is how do you get, you know, some air under the wings of a new project? Money. Go hire people, get some FTEs, get some software. So I always thought in my mind, I always think about it as control. Part of it is the dark side of the Force, which is don't run out of money. But part of it as well is how you put your fingerprints on the company, even if it's a decentralized operation, is control money.

Love that.

It's power of the purse, man, if you look at the legislative branch in the U.S. government.

So I got to wrap. What's your closing quote? Did we talk about a poem? Yeah. Yeah, I'll go first.

You like to end with poems. So I pulled a poem.

So this is— I think you got me onto this from GTD. It's just a little quick one-liner, but your brain is for having ideas, not holding them. Yeah, it's GTD. And, uh, just a little GTD reminder for those who are trying to get organized here in the new year.

Good. Uh, so you said you liked when I end, uh, with poems, so I pulled out one of my, uh, one of my many, uh, poetry books on my shelf. Uh, this one is from Ella Wheeler Wilcox, who is one of my favorite poets. One ship drives east and another drives west while the selfsame breeze blows. It's the the set of the sails and not the gales that bids them where to go. Like the winds of the seas are the ways of the fates, as we voyage along life, it's the set of the soul that decides the goal and not the storms or the strife. It's nice. Good, right?

Yeah, it's a nice way to end the show, John.

Thank you. Bring it back home. All right, cool, man. Good episode.

Good episode. We'll see you.