Building A Strong Workforce To Outlast Your Competitors Through Change Leadership

Speaker 1 There are people, and I know them, you've met them,

Speaker 1 who are there that they want to go on the trip, not because they want others to come with them, but because they want to go there.

Speaker 1 In fact, there are some folks that want to go there and don't want anybody else to come with them because, for them, that's how they define themselves.

Speaker 1 The great thing, and this is what makes leaders, I think, go from successful to significant.

Speaker 1 And I think that's always the challenge for leaders. Leaders go from successful to significance when they start thinking more about how do I help other people get there?

Speaker 1 How do I bring people with me rather than how do I get there myself? Because the fact that you've helped other people get there, they're going to push you higher.

Speaker 2 Welcome to the Home Service Expert, where each week Tommy chats with world-class entrepreneurs and experts in various fields like marketing, sales, hiring, and leadership to find out what's really behind their success in business.

Speaker 2 Now, your host, the home service millionaire, Tommy Mello.

Speaker 2 Welcome back to the Home Service Experts.

Speaker 1 We were talking, Randy is an amazing guy. His name's Randy Pennington.
He's an expert in leadership, strategy development, performance management, strategic visioning. corporate culture.

Speaker 1 Randy is the owner of Pennington Performance Group, a managing consulting company that offers groundbreaking solutions to drive performance and organizational climate change for clients around the world.

Speaker 1 He's the author of two best-selling books, Make Change Work: Staying Nimble, Relevant, and Engaged in a World of Constant Change and Results Rule. Build a culture that blows the competition away.

Speaker 1 Throughout his journey, he has been devoted to helping leaders and organizations deliver results, build strong corporate cultures, and make change work.

Speaker 1 Me and Randy were just talking about how sometimes

Speaker 1 there's leaders that can be toxic in the company, but we'll address that later. Randy, why don't you just tell everybody you live in Addison, Texas.

Speaker 1 Why don't you tell them a little bit about yourself, where you've been, where you're going here in the future and everything about what you do. Yeah, thanks, Tommy.

Speaker 1 First, it's a pleasure to be with you. It's good to see you again.
We were on a program last February together, and we had a chance to be on a program together then, and it was fun.

Speaker 1 So I look forward to today. I call myself an organizational nerd for all practical purposes.
I've spent 30 plus years basically helping companies do all the things that you mentioned.

Speaker 1 And I've been able to consult and work with everybody from Fortune 10 companies to the International Monetary Fund to small businesses in the blue-collar service industry.

Speaker 1 It's sort of the advantage of doing what I do. I get to see how this stuff works in a lot of different situations.

Speaker 1 Before that, I was a partner in a small boutique consulting firm where I was the partner and CFO.

Speaker 1 Before that, I spent some time as a hospital administrator doing a startup hospital where I ran pretty much all the administrative support areas of the organization.

Speaker 1 So maintenance and food service and that laundry, a clothing room, that kind of stuff.

Speaker 1 Probably the thing that best qualifies me to do what I do today is my very first job when I finished my undergraduate degree.

Speaker 1 So I played played volleyball with schizophrenics in a psychiatric hospital for two years.

Speaker 1 And that maybe more than anything else makes me qualified to work with companies today because it's a little crazy out there right now.

Speaker 1 So anyway, my journey's been about that. I think, I write, I consult.
I get to see how lots of great entrepreneurs like you are doing things and hopefully help them provide some tools along the way.

Speaker 1 I think it's fascinating. Some of the companies you work under, some companies that are private equity owned, you work for some founders, you work for some companies that have sold.

Speaker 1 I met a guy recently

Speaker 1 who

Speaker 1 has done evaluations with over 2,000 companies, and they basically work with them to help them grow and profit.

Speaker 1 And, you know, one of the things that every company that I've talked to says, I want to get bigger, I want to be more profitable, and I want more time.

Speaker 1 So, what he told me was

Speaker 1 there's three things that he finds in companies. He said, number one, they've got to have a very good, sophisticated plan.

Speaker 1 They need to know what they're going to do this month, this quarter, this year. They need to understand a budget.

Speaker 1 They need to know how to read a P ⁇ L and other accounting statements and really understand who they need to hire and why. He goes, that's the first thing.

Speaker 1 He goes, number two, the ability to have very difficult conversations. He said, sometimes.
it's these very tough conversations. Don't be ran by

Speaker 1 one of your sales all-stars or maybe a manager that threatens to leave so he said those tough conversations are are critical sometimes he meets these big burly guys that don't even want to have a conversation and they look scary but they they won't be conversational he said number three they need to be a talent magnet they need to attract great people so i thought that was pretty cool pretty fascinating what would you say with all your experience is there any

Speaker 1 leading indicators that you think make up success in a small business center? Well, really, any business, I think, Tommy, six things.

Speaker 1 I think it kind of goes goes into the things that you've talked about. I talk about the six things every sustainable business has to have.

Speaker 1 First thing is you got to have a product that solves a real problem or a service that solves a real problem. You know, your business, you solve a real problem, right?

Speaker 1 I mean, it's something that people need and want and will pay you money for. And you would think, well, that's obvious, but You know, I get to see a lot of businesses.
You do too.

Speaker 1 We know that there are people out there selling stuff that doesn't solve anything. So that's the very first thing I I look at.
Second, yeah, absolutely. You got to have the plan.

Speaker 1 There's got to be a plan for how you grow your business, how you scale your business. You know, the third thing is you got to have a way to attract and retain customers.
It's got to be consistent.

Speaker 1 There's a discipline to attracting and retaining customers. You know, sort of the fourth is, you know, you've got to have the talent, the talent magnet, the ability to align talent.

Speaker 1 You've got to have a financial piece that's there. You've got to have financial structure.
How many blue-collar service businesses have you seen, Tommy, where they don't really know their numbers?

Speaker 1 The majority. Yeah, the majority.
And so, I mean, you've got to know your numbers. You've got to have the capacity and capability to do the work.
And then you've got to have a culture.

Speaker 1 And the culture piece to me is the accelerator for all of that, because if you've got a culture where people are willing to have the difficult conversations, where they leverage partnerships, where they continually grow and learn and develop, all those things that go into a culture.

Speaker 1 When I wrote the book, Results Rule, we found that there were six pieces that are always there in great cultures. And it's about they have candor and honesty.

Speaker 1 They consistently pursue the best over what's easy.

Speaker 1 They focus their attention. They make the main things the main thing.
They don't chase a lot of rabbits and squirrels and stuff. They leverage partnerships.
They grow. And here's the last piece.

Speaker 1 Man, they are dead serious about accountability and responsibility.

Speaker 1 So, I mean, if you've got a culture that does those things with those other components of a great product, a great service, you know, you're continually developing. Business isn't complex.

Speaker 1 It's hard, but it's not complex.

Speaker 1 You know, we're... I've got a personal COO for everything I do, but we're mostly focused on A1, and he's working on 167 projects.
You know, Levy taught us to prioritize the top five.

Speaker 1 But what I've done is I've hired a lot of project managers to be rolling in the same direction at the same time. The latest one, as of this past week, we're turning the website into Spanish.

Speaker 1 And we're going to be going after in Arizona, Texas, Florida, 35% of the population speaks Spanish and they prefer using Spanish-speaking companies. So I was on a podcast yesterday.

Speaker 1 That was actually a QA that I do. And the guy said, have you ever done Spanish pay-per-click? And I said, no, he goes, the cost is one tenth.
And the phone rings off the hook.

Speaker 1 So it's like these little things. And what I do is I catalog them.
I put them into a Monday board. That's what we use.
Some people use Trello. Some people use, you know, there's a million base camp.

Speaker 1 I can keep going with those.

Speaker 1 But ultimately, I think sometimes we get bombarded with ideas, but one of the things that I've done is I've stopped being a real estate investor, really, unless I'm a silent partner.

Speaker 1 I've stopped buying other companies.

Speaker 1 I was talking to a PE from the other day, and I was talking about possibly, if there was an opportunity and, you know, there's not right now, but buying out a manufacturer vertically integrated, he says, does that help your mission and your vision?

Speaker 1 He says, does that help you be the largest garage door company in North America? And I said, you're right. It really doesn't.
It actually is a distraction.

Speaker 1 And these guys said they don't really like vertically integrated businesses because there's always something like the production lines. They don't make their money there.

Speaker 1 And I think that's the problem with a lot of us founders. We have ADD and we sometimes jump around too much.
How do you get that under control? Clarity helps, right?

Speaker 1 I mean, to your point of, I am absolutely clear what I know how to do, what my mission is. I'm clear about the purpose.
And I actually picked this up from one of my clients.

Speaker 1 He's in a blue collar service business. And we were talking about decisions because he was thinking about buying a building.
And now that I'm thinking about buying this, do I buy it or not?

Speaker 1 Or do i buy this land and build or whatever and the three questions that he asked one does it help the business does it really help your core business which i love because to your point a manufacturing business might or might not help the second thing is do you have to do it now that becomes really important right because yeah i don't have to make that decision now oh okay then I can go be ADD somewhere else because I don't have to make this one now.

Speaker 1 And the third is, is there any other way to accomplish the goal other than making this choice? And to me, you know, those three questions

Speaker 1 were really important. I sort of came up with this the other day.
I was working with a client and, you know, they don't have 100 and however 60 projects, but they've got a bunch.

Speaker 1 And we've started to create prioritization. We just grew a little chart, right? Because that's what consultants do.
We can put anything in a two by two chart.

Speaker 1 And the one is impact on the business across the bottom, right impact on the business from low to high exactly time yeah and then no not time but ease

Speaker 1 oh

Speaker 1 ease of implementation from low to high

Speaker 1 so what we really want things is we want high impact with the easiest to do and those are the ones we go at first now the ones that are really hard and no impact we know those go away But the other ones is sometimes we find these great ideas that would have a huge impact, but they're not easy to do.

Speaker 1 Not easy because of time, not easy because of resources or capability. You know, I'm not saying you don't do those,

Speaker 1 but those aren't the first things that you go on unless the payoff has got to be really big. And so when you think about ease of doing it, time's a component of that and impact.

Speaker 1 then that sort of helps you frame that out a little better. So, you know, it simplifies it.
And I've got that exact chart. I think it's an orange one.
It's in my phone.

Speaker 1 I'll give you an example that's one of those tasks. We are building a custom API into our CRM that pulls certain pictures and a certain phrase from the CRM, and it turns it into a card.

Speaker 1 And we send up two brownies to the client after they get a garage door with a picture of the before and after. Congratulations.
Now,

Speaker 1 it's an automation tool. So it's front-loaded.
It will take about three days with people we're using.

Speaker 1 And the good thing is i could delegate it and outsource it it's a one-time project which is an ad back

Speaker 1 but you know you might say well what kind of impact does that have

Speaker 1 well i was on a podcast once again this week and the guy said i'll never forget when i go to avis the fresh cookie the warm cookie they give me he goes my mouth foams when i go to the airport to go pick up the vehicle and so i don't have this magical chart to say here's the roi on some of these things or even some of the custom software we're building what is it that you do when you're like, you're doing a SWOT analysis and you're like, I'm not 100% the ROI on this?

Speaker 1 Well, I think there are three things that every business can measure. All right.
So the ROI typically is results. Because I sent a brownie and a photo, two photos, did we get any more business?

Speaker 1 I mean, you can track that, obviously. And over time, you can build it in and go, is it two cookies or is it one cookie?

Speaker 1 Or I mean, you can, I mean, if you want want to get scientific around that, but you can look at results, you can look at perceptions

Speaker 1 and see, you know, if you go into how much of your business comes from people finding you on Google and looking at ratings. Yeah, well, that's the large majority.
All right.

Speaker 1 Yeah. So in other words, that's the perception that you want is the four, the five star rating.
So then you start looking at activities is the other piece.

Speaker 1 And activities, by the way, perceptions and results are lagging indicators based on what you did or didn't do the activity is the leading indicator so here's the way i would check the roi on that what's the correlation between sending photos and two cookies to positive reviews on google

Speaker 1 yeah i think that would be a big one and i think also

Speaker 1 One of the things that I'm 50-50 that I'm going to A-B test is send them a link that basically says, we're so proud of your home and the way it turned out. We want to use it for our catalog.

Speaker 1 We'd love it if you shared your beautiful home online. So, can it turn into more leads? But I don't want to just give a gift to be to just ask for something.

Speaker 1 I think that is, you know, who it's funny is the guy that told me about the cookie was Scott McCain. Oh, yeah.

Speaker 1 Yeah, he was on two days ago. Yeah, he told me.
Yeah, I knew he was going to be on. So, I'll give you an example.
I've got this landscape client of mine.

Speaker 1 They say they're a landscape company, they do outdoor spaces, kitchens,

Speaker 1 patios.

Speaker 1 Okay, so they're like a remodeler for outdoor. Okay.
Yeah, they're an outdoor remodeling business.

Speaker 1 And, you know, one of the things they tried is, okay, you know, we'll send you an Uber Eats thing for your party with your new kitchen on it.

Speaker 1 We'll send the meat and you can barbecue everything up or cook, cook everything on the grill. And that was great for them.
But what really turned the corner for them is when they switched from

Speaker 1 just saying, hey, we'll send you some meat and you can grill it to, why don't you have some friends over and we'll host the party.

Speaker 1 Because first off, you know that there's not a single time that your backyard's going to look better than right after that project's done.

Speaker 1 And there's not a single time you're going to be more proud of it than when that's there.

Speaker 1 And so it went from, we'll just send you a thank you gift to we'll host a party for you. Then you watch and go, how many of those people turn into referrals? Yeah.

Speaker 1 Well, that's a lot easier to track, right? Right.

Speaker 1 But I mean, you know, if I knew that sending this is going to get me five stars, the answer is not going to be, you know, hopefully I don't need another garage door every year.

Speaker 1 I need to tune up, right? I need to tune up. Sometimes after a while, I don't do the maintenance.
I don't lubricate the chain as often as I need to. I don't watch the spring.

Speaker 1 I don't tighten up all the nut. I mean, you can tell I've had to replace a few garage doors in my career, in my life.

Speaker 1 you know i don't do the maintenance and so then i need somebody to come and help me for that but the other part is i want people telling their neighbors.

Speaker 1 I want people telling their friends, man, this was the best experience.

Speaker 1 Yes. Raving fans.
I think that's what I'm going for here. This is the icing on the cake.

Speaker 1 There's a cleaning lady that I heard about from a podcast a year ago, and she bought this huge cookie dough from Costco.

Speaker 1 She bought like three of them a week, and she cut off two little slices and make three cookies. right before she left.
So the whole house smelled like fresh cookies.

Speaker 1 And she wrote a nice handwritten card. It said, a delight to be able to clean your home.
It's such a beautiful house. Thank you.
You know, she always wrote this.

Speaker 1 And that was the factor that was like, you know, a lot of them will fold the toilet paper a certain way. There's these little subtleties.
And that's the experience.

Speaker 1 And by the way, at some point, so like in one week, she had a bad week and forgot to clean the dust off the top of the ceiling fan. Right.
You're going to cut her break because.

Speaker 1 Yeah, but she leaves me cookies, right? She'll pick it up next week.

Speaker 1 Yeah, and that's what's great is to have it and and then have a cadence to make sure that if you're unhappy, if you need something, listen, one of the things I'm working on is a really advanced checklist for 151-point tune-up.

Speaker 1 So I say, hey, Randy, listen, I just text you. The system automatically does that.
It's a link that shows you our 151-point tune-up. There's literally well over 100 pictures there.

Speaker 1 And I just wanted to put out a few things to you. And I just wanted to ask you, is this something that you want to do each year yourself, or would you like me to handle it?

Speaker 1 And then I just smile and shut up.

Speaker 1 And when you're looking at it, you're looking at it saying this is my garage holy crap you took the case out the opener you cleaned the safety eyes you know what tom why don't you just handle that and all of a sudden we've got a service agreement now i got a fence around the customer and that's why pe firms love service agreements because they can begin to predict future work absolutely you heard me on the program that we did together talk about sewell automotive Yep, I talked about Sewell Alexis because I always talk about Sue Alexis.

Speaker 1 Carl Sewell's been very kind to me over the years. I'm sure it has nothing to do with the fact that I have 14 or 15 cars from him at this point, right?

Speaker 1 But one of the things that they found with their customers is the biggest value that their customer had is time.

Speaker 1 And so they design everything around their customer experience. Now, not every customer is that's the case.
In some cases, it's money. In some cases, they're on fixed incomes or whatever.

Speaker 1 That's not who their customer is. They didn't design it for them, right? They designed it for their customer, their ideal customer.
And what they found is time.

Speaker 1 So they look at every piece of their business every single day and say, how can we do this to help our customers gain what's important to them?

Speaker 1 And, you know, I'm thinking about your business. Customers who buy a garage door from you, a lot of them, I mean, they're not only worried about time, they're worried about investment.

Speaker 1 They're worrying about their car getting stuck in the garage because the spring broke, which I've had happen to me on more than one occasion.

Speaker 1 More important, I'm worrying about not me because I can figure out how to get out, but how about my wife when she's in there? Can she get the car out to go run what errands that she needs to do?

Speaker 1 So if you can think about what's every little thing we can do to give the customer what's important to them, the checklist is a great way of doing that. And it's a continual reminder.

Speaker 1 And you're right, if it can turn into a service agreement, you know, I've got a service agreement with my AC people. I've got a service agreement with my plumber.
I've got a service agreement.

Speaker 1 You know, and it's 10 bucks a month. And, you know, they come out and they check my stuff and it provides me what I'm looking for.
And that's peace of mind.

Speaker 1 You know, one of the things that I've found, and I do a pretty long sales call on Thursdays, and I go for about 45 minutes, then I let a few of the managers go, another 45.

Speaker 1 And I've been doing a lot of research. And I said,

Speaker 1 I found that it's easier to sell, not based on features and benefits, but opportunity cost costs of not getting this done.

Speaker 1 And it always helps with a story of finding someone similar to their situation, similar neighborhood, similar lifestyle, and then the opportunity cost of,

Speaker 1 you know, I went out to someone's house just like this that had the same issue, and it was a non-insulated door, and the door was about 14 years old, like yours.

Speaker 1 After the third time there in three months, the door completely buckled. And unfortunately, it took two guys to get the door down.
No one was hurt.

Speaker 1 And just really telling a really good story about real life scenarios, because I think it really hits home to when you can tell a story and they can relate to it. Absolutely.

Speaker 1 You know, there was a book, it was a classic book, I don't know, written 20-something years ago by a guy named Robert Cialdini, CIA,

Speaker 1 influence. And he talked about, you know, what are those key things that influence and the power of story, right? And doing that.

Speaker 1 And for some people, it's, oh, wow. Yeah, you're right.
That's That's me. Or in some cases, what's the cost of not doing this?

Speaker 1 That's equally, I mean, I heard Cialdini speak at a conference that I was at a few years back.

Speaker 1 And he said, you know, the newest research is if you can share it with people, what's the cost of not doing it? Yeah,

Speaker 1 that's exactly what I'm talking about. And what I love, what I love about Chardini is,

Speaker 1 you know, it's so funny. I got my master's degree from U of A, and he's an ASU professor, and they were teaching about an ASU professor at U of A.

Speaker 1 But when he wrote that book, one of the things that my favorite story is, he's walking down. I think he was by the SRC, Sudan Recreational Center at ASU.

Speaker 1 And a little boy walks up to him and says, hey there, listen, I'm selling some raffle tickets for my Boy Scout group.

Speaker 1 We're going to Minnesota on this camping trip, and I'd love it if you could buy a couple of tickets. And he said, they're $10 a piece.

Speaker 1 And he goes, listen, I'm sorry, I just, I can't do that right now. And he said, well, if you won't buy the raffle tickets, would you at least consider buying a couple candy bars? They're $2 a piece.

Speaker 1 He goes into his wallet, gives $4.

Speaker 1 He comes back to his office, sits down, puts the candy bars down, and he looks at them for a minute. And he says,

Speaker 1 why in the hell did I just buy candy bars? I hate chocolate. And what he put in the book on influence was,

Speaker 1 if you want to get people to do something, you start like, if you want to borrow $10,000 from your parents, you start with 50.

Speaker 1 If you want to get your kid to clean his room start with the whole house and so if you use that with sales and there's you know there's a lot of them keeping up with the joneses and i really love that book it's actually i've got the origin you know the old school one right here yeah this is the really old one that uh and it's written look at how small the oh yeah i know i've got mine sort of right over here on my bookcase and um I have the old hardback copy, the original hardback.

Speaker 1 Oh, really? Yeah. You know, and he's he's updated it a couple of, but the research is still absolutely there.

Speaker 1 And it's, you know, I think the point, and I love this, it's about making connections with people. Story is a great way to make connection.

Speaker 1 And if I'm in a service business, the idea of getting the cookies, yeah, you're right. I mean, I stay at Doubletree Hotels for that reason.

Speaker 1 That's what it was. Yeah, it's Doubletree.
Yeah, it's Double Tree. Scott was talking about Doubletree.
Yeah. Yeah.

Speaker 1 So, you know, I was just in Colorado working with this client's pe owned company that i work with and they're doing a roll-up in a blue collar industry and i looked at where their office was on the map and there were probably 15 hotels within an eight minute drive of their office and i chose the one that's going to give me a chocolate chip cookie

Speaker 1 you know they're probably closer there might even have been nicer this was not the newest double tree ever built. It wasn't bad.
It wasn't like a fleabag, but it was, you know, not the newest one.

Speaker 1 Didn't matter. I got the cookie.
And there's something about that that, you know, again, it just sort of helps make the connection.

Speaker 1 You know, the lady who bakes the cookies in the house, you know, Sewell gives away cookies with your car when you pick up your car. You know, it's just something like that to make a connection.

Speaker 1 And, you know, I just had a massive plumbing job done in my house.

Speaker 1 I mean, massive. They dug 141 feet of tunnel under my house to replace all the 45-year-old cast iron sewer pipe, which, you know, happens about every between 40 and 50 years, right on time.

Speaker 1 And the guys did a nice job. I mean, man, it's hard work.
That's incredibly hard work.

Speaker 1 But the thing that I remember most about it

Speaker 1 is

Speaker 1 when it took longer than it thought, because they thought it was going to take a couple of weeks, it ended up taking a month.

Speaker 1 because of some of the excavation challenges.

Speaker 1 The thing that I continue to go back to is the guy under my house that was coming out to put the new pipe in and check in every day to see how the excavation was going. Every day he said, Mr.

Speaker 1 Pennington, I know this is taking longer than we thought. I know it's a hardship on you and your family.
I just want to remind you, let you know, we are not going to cut corners.

Speaker 1 on quality because we realize

Speaker 1 that is the ultimate disservice to you. All right.
The first time I thought, well, that was nice.

Speaker 1 The second time I thought, okay, but it's sort of like in that moment, he was just continually reminding me: the goal is to give you something that you're going to feel confident in for the next 75 years.

Speaker 1 I'm not going to be here for 75 years, but I feel confident in knowing, right? And the other part is he gave me, he said, we give you a 25-year warranty on this, on workmanship.

Speaker 1 So, if the concrete cut that we make doesn't, it starts falling apart because we didn't do a good job on the cut, that's on us. If your house starts settling because of this, that's on us.

Speaker 1 And he said, that's why we're so careful about it, is because we know you don't want us to come back out here and do this again.

Speaker 1 And we don't want to have to come back out. I mean, so every little piece of it that he said was all around how does he remind me of the value they're providing.

Speaker 1 You know, that's interesting because I always explain this, and this is an old saying, but people aren't going to remember exactly what they paid.

Speaker 1 They're not going to remember exactly what you did, but they'll remember the way you made them feel. Yeah.
I think what you just explained is the way that he made you feel. You kept saying

Speaker 1 the feeling. Yeah, by the way, I will remember what I paid.
It was a good check.

Speaker 1 It is. You know, my buddy actually used to be the P P kind of got involved, but uh, Zoom Drain,

Speaker 1 you know, Jim Craniti, they go and they got these $100,000 rigs that actually re-pipe with the old pipe.

Speaker 1 They have a way of re-piping, and I don't think it works at every place, but they're out in the East Coast. And

Speaker 1 I guess somehow I just had a guy in his town from Australia, and he actually builds the piping that actually somehow you could re-pipe using the old pipe.

Speaker 1 I don't know how they do it exactly, but it's it probably is the liner piece. The liner inside of the pipe.
Right, right. Because I checked on that.

Speaker 1 And just let you know what, that works as long as the pipe hasn't deteriorated. It's got to have enough structural integrity.
It can have holes in it.

Speaker 1 It's got to have enough structural that a pipe can go through it, right? Okay. Interesting.
Yeah. Now, I had a couple of places under my house where the pipe had completely collapsed.
Jeez.

Speaker 1 Yeah, it's a house my wife and I bought in 2020, and we just did, you know, we did the whole thing. We should have known, should have had it done.

Speaker 1 It would have been cheaper to dig the hole through the floor than it would have been the tunnel underneath it. But hey, you know, that's what happens.

Speaker 1 But yeah, I mean, it goes back to, though, there's a capability and a competency piece that goes in trust, right? And so you want to know that people are capable and competent.

Speaker 1 That's where that review comes in. There's a communication piece that goes in trust.
That's where that guy's constant reminding me is a piece of it. There's a character piece that goes into trust.

Speaker 1 Nobody says they're unethical, but we all know people that are, and we've done people that are, but that's where having the guarantee is a sign of that piece.

Speaker 1 And then there's a consistency piece that goes in trust.

Speaker 1 And if I've got 2,000 reviews and 97% of them are fours and fives,

Speaker 1 I go, all right, there's a consistency issue here, which goes back to, if I were you, that's why those cookies become important.

Speaker 1 Because if you show that cookies lead to fours and fives, man, you're building the trust from a customer standpoint from consistency.

Speaker 1 What I love is when you get the a-hole customer that will, you can never win. 1%

Speaker 1 of all my clients are, I just basically kiss their ass and tell them they're right. But when they're unreasonable, I say, sir, we've given you back your money.

Speaker 1 I've done everything I can to make you a satisfied customer. I'm sorry we can't.
And the response, what people do, a lot of clients of ours, they said, we read all the bad reviews.

Speaker 1 And the way that you address them is why we're going with you. All right.

Speaker 1 So you go back to trust, the fact that you were open and honest in your communication with them, that you consistently dealt with every one of those bad reviews the same way.

Speaker 1 And, you know, we're all social creatures. And so we look at that and we go, Tom's group, look at that.
I mean, they're consistently doing it. So if I I have a problem, I have some reliability.

Speaker 1 They're going to do that with me.

Speaker 1 And so every one of those little things builds trust with the customer.

Speaker 1 By the way, on the internal side, every interaction with an employee, even if it's not them, it builds confidence from the employee standpoint. I've had clients that fired, had to fire people.

Speaker 1 I told you I was on the phone today. We were talking about how do we exit this guy from the business.

Speaker 1 One of the things we went back to is how this needs to play out, because every employee is going to see that they're gone.

Speaker 1 And even the ones that think this guy ought to be fired are going to look at it and go, yeah, you should have fired him, but man, you shouldn't have done it that way if we do it wrong.

Speaker 1 So even when we fire somebody, the fact that we did it right and did it consistently with our values says, yeah, we're willing to make the tough decisions, but we believe in this stuff.

Speaker 1 When we say respect people, we actually believe in it. And so

Speaker 1 internally, it works the same as externally. It's pretty crazy when you look at what even happened with Steve Jobs.
He got kicked off of his own company.

Speaker 1 Then he got back into it, you know, 15 years later to go make it into an empire. It's a weird dynamic because

Speaker 1 leadership, it's a tough thing. You talk a lot about change leadership.
Can you explain to me what exactly that is?

Speaker 1 So I believe that all leadership is ultimately change leadership because we're always trying to get people to do something more, do something different, do something better, right?

Speaker 1 And I go back to if you want things to be better, they have to be different.

Speaker 1 And every leader wants their business to be better. So we're going to have to do some things differently, more of, less of, differently.

Speaker 1 And if you want them to be different, we got to change because our businesses are perfectly aligned and structured to produce exactly the results they're producing today.

Speaker 1 So here's the difference between change management, which gets talked about a lot, and change leadership. There was a lady named Admiral Grace Hopper, first female admiral in the Navy.

Speaker 1 Ross Perot also used this phrase a lot too. But Admiral Hopper said, you manage data and things, and you lead people.

Speaker 1 And I mean, Ross Perot said it too. Ross was more like, you manage data and things, you lead people.
But it's still the same thing. But the point is this:

Speaker 1 that nobody wants to be managed in the battle. Right now, we know that going on, the war in Ukraine.

Speaker 1 I think one of the differences is you got people in Russia who are managing their troops into battle, and you got people in Ukraine who are leading their troops into battle.

Speaker 1 Which one's doing the better job, all things considered, right now? Ukraine. Yeah.
And so

Speaker 1 change leadership is about understanding. that you've got to bring people with you.
You need to get their buy-in. You need to build their support.
You know, it's the realization, Tommy.

Speaker 1 You know, most people want to come to work. They want to do a good job.
So the resistance that you see is a legitimate fear or a legitimate concern.

Speaker 1 And if you're a leader, you want to understand that because you want to make your people successful.

Speaker 1 And I mean, that's really about change leadership is clear vision, clarity of vision, ability to get buy-in

Speaker 1 and willingness to work to get buy-in.

Speaker 1 A mediocre plan with excellent execution will beat a great plan with mediocre execution every time.

Speaker 1 Well, that's, have you ever heard of a guy named Howard Partridge? I've heard the name. I don't know him.

Speaker 1 I don't know where I've heard it, but he's an author and he wrote a book called Failure to Implement. And

Speaker 1 I just find everybody around me, and listen, I've got so many amazing people around me. They want things to go perfect.
They want to have a lot of meetings. They want to consult.

Speaker 1 They want to address the issues. They want to have a SWOT analysis.
They want to review the SWOT analysis. Then they want to go back to the committee.
And I'm like, oh my God.

Speaker 1 I'm like, I will be retired by the time you guys make a decision. And I've been saying this a lot lately.
I'm ready, fire, aim.

Speaker 1 I'm like, look, let's get started. I have to battle.
Some people are like, I'm going to start working out, but first I got to figure out my diet. And the diet starts next week in the workout.

Speaker 1 Go to the gym today.

Speaker 1 Yeah, or go walk around the block. I mean, you don't even have to go to the gym.
Go walk around the block. Take positive action going that way.
There's a good book called Death by Meetings. Yeah.

Speaker 1 And I'm like, another meeting that should have been an email. I really, you know, I'm not involved in the meetings.
Pretty much, I didn't even go to our budget meeting.

Speaker 1 I said, you guys need to believe in the budget. I said, I know what I want.
I kind of expressed it to a couple of the people.

Speaker 1 And I said, if it's lower than this, then that's fair, but I need it to be your ideas.

Speaker 3 Hey, I hope you're enjoying this conversation. Here, I just want to take a five-second break to let you know that the tickets for my next Vertical Track event are now on sale.

Speaker 3 Just go to verticaltrack.com to learn more and get a guaranteed seat before the prices go up. Now back to our interview.

Speaker 1 Well, I mean, two things that I've learned about getting people to change that relate to that. First is people support what they help create.
True.

Speaker 1 The second thing is nobody ever argues with their own ideas.

Speaker 1 No, they can't really, can they?

Speaker 1 So let's assume that, you know, you've got people on your team and they know, you know, they basically know what they're going to do. Yeah, they're going to make mistakes.

Speaker 1 That's part of the empowerment process. That's part of the learning process.

Speaker 1 One of the big reasons, I don't know if it's the biggest, but one of the biggest reasons that people don't feel empowered is they don't believe that they have the trust and freedom to fail, not for the sake of failing, but failing.

Speaker 1 for the sake of pursuit of the goal, right? And it's your idea.

Speaker 1 It's your plan you know i told you i was a hospital administrator i went off on a vacation once and this is how i knew it was time for me to leave i went off on vacation i got back a day or so early and i walked into the office and my team had created a cardboard cutout of me full size like six foot tall cardboard cutout you know had my beard and my glasses and Back then I wore a lot of suits.

Speaker 1 They had a suit on me, right? And all this kind of stuff. And it was sitting there.

Speaker 1 And then on the front of my my desk there was some three by five note cards and i said okay what's going on and they said well we didn't expect you to be back but while you were gone every time we knew you were going to be gone and we had to make some decisions so every time we had a choice to make we came in sit down at your desk read those cards because it's all the questions that you normally ask us And we went through the questions, we answered yes, then we went and did it because we knew you'd be okay with it.

Speaker 1 And I thought, okay, my job here is done, right?

Speaker 1 Because

Speaker 1 it's getting

Speaker 1 people to ask the questions that they know are the right questions.

Speaker 1 And I figured that if I could get them to think the right way and answer the right questions,

Speaker 1 then you got to trust that, yeah, more times than not, the implementation is going to be fine. But that's the hardest part, right? That's the leadership part of growing people.

Speaker 1 Think of the perspective you have

Speaker 1 in growing this business, in your business. And how much has your perspective changed in the last 10 years

Speaker 1 on what it takes to grow a business i mean it's not even in the same hemisphere but it's still the same core principles but it's same principles but you're probably asking better questions now yeah for sure and you know you're only as strong as your weakest link that's one thing i've realized is if i can't get trucks that's a problem if i can't get leads if i can't get hires if i can't get product if i can't answer the calls if i can't get dispatchers if i can't get uniforms.

Speaker 1 So it's so true that I don't know whoever, whoever came up with your only struggle is your weakest link is like dead on the nuts because when you're growing hundreds and hundreds of percentages a year to a multi-billion dollar company is what we're trying to, the goal here in four years is well over a billion and a half in revenue at 20% margin.

Speaker 1 you almost got to recreate yourself every few hundred million because what got you here won't get you there and then you get into these siloed things to where it's just who's the decision maker.

Speaker 1 And it starts to get a little congested. That's why you got to go back and kind of retool.
And there's peaks and valleys in any company that's growing.

Speaker 1 There's growth and then there's like, let's catch up. I talked to a PE company that they're at 940 million from 100 million in four years.
And he said, my guys, the whole team is burned.

Speaker 1 They're exhausted mentally, physically, and we're just trying to recreate ourselves. And I said, wow, that's a lot of growth in that amount of time.

Speaker 1 Yeah, I had a PE client of mine that I spent about three and a half years working with. And

Speaker 1 new CEO came in, and I started working with him to build his team and build his culture. They started with, they were at 35, 40 million, then they were at 85 at the end of a year.

Speaker 1 Then they went from 85 to 185.

Speaker 1 And then they went from there to like 250 or so in three years.

Speaker 1 And

Speaker 1 most of his senior leaders ended up leaving after that, right? They started to hit a plateau and they left for two reasons. One reason is, man, they were just burned out, right?

Speaker 1 And so they just needed to take a break. They were just absolutely burned out.

Speaker 1 The second thing is the realization that the CEO had that the talent that got you to 250 million is not the talent that's going to take you to 800 million.

Speaker 1 So Ken Gooderich, the CEO of Gettle, came to one of our meetings and I had my whole leadership team there. He sat at the head of the table.

Speaker 1 I think he just sold for 600 million, but he's staying 30% on board. So he's, and he said, he takes his finger and points in each one of them.
And very

Speaker 1 just, he's got a dead eye lock on these guys.

Speaker 1 He goes, I'm going to tell you guys something right now.

Speaker 1 He goes, Tommy Mellow calls me twice a week, sometimes at midnight. He's reading four books right now.
He's traveling to bigger shops. He's listening to podcasts.
He's on his own podcast.

Speaker 1 He's writing another book. He said, if you do not commit to him 45 hours of great time at work and another 15 hours of learning, my best advice is that he fire you because you're not going to keep up.

Speaker 1 You're not going to grow with him. And he's going to surpass you.
And unfortunately, you're not going to be able to make it.

Speaker 1 And he calls me up afterwards and he goes,

Speaker 1 was that a little too rough? and i said i was just laughing i said i love you dude i said uh

Speaker 1 it was a little stern but i think we got the picture it's true that there are people that could grow at an incredible rate but there's a good book by dan thurman called off balance on purpose that right you can't be perfect with your family praying 10 times a day working out eight times a day and also busy at work so i get it to some of these people they got to take care of their family what's the best way to do that when you do hit that you know listen there's people that might be able to outgrow me.

Speaker 1 You know, obviously, if I, if whatever happens in the future, I'm just curious when a company's hitting this. I guarantee you, we had 40,000 downloads last month on this podcast.

Speaker 1 Somebody's listening to this going,

Speaker 1 I do have someone like that that is toxic, that maybe not even toxic. Maybe you just outgrew them.
You know, some of us got into the family business and dad's no longer very relevant.

Speaker 1 That's not what happened with me, but. Well, it's especially tough when you've got to replace a family member.
I mean, that's absolutely tough.

Speaker 1 There's a dynamic there that's different than if it's just an employee.

Speaker 1 But if you're dealing with an employee, you know, the first thing is realize that the way you treat that employee on exit says a lot to your people about what your values are for the people who are staying.

Speaker 1 And that's really important. Now,

Speaker 1 you can look at roles and responsibility change. You can look at time to exit.
Years ago, I mentioned I was a partner in a boutique consulting firm. We bought out our lead partner.

Speaker 1 And the way the conversation went was something like this.

Speaker 1 We love you. You founded this company.
You've taken us to amazing places. And it's time for you to move on.

Speaker 1 It's like the star athlete who reaches the day and says, you probably should have retired last season rather than this season.

Speaker 1 You've got to have, so it's that kind of situation. You just got to say, look, you stayed a season too long here.
It's time.

Speaker 1 It sounds like to me, I've had some of these conversations. They're almost like a divorce.

Speaker 1 Well, it is, but it doesn't have to be. It's like, okay, so if there's still a role, I'm having this right now with a client.
The founders of the business still have a significant piece.

Speaker 1 The PE firm is hoping to exit them in the next six months. And the founder is still running, absolutely running the business full-time.

Speaker 1 and they don't plan to stay after the exit and so the conversation i had is look it's time for you to start transitioning out

Speaker 1 because we've got to be able to show new owners that we have talent here to be able to run this business yeah built to last

Speaker 1 right we got to build it past you and they were like well what's my role and i said there's a role for you and nobody's taking your salary but there's a time period so that's one scenario another scenario is when you have somebody that's just outstayed their welcome.

Speaker 1 They just can't grow to keep up.

Speaker 1 First off, they probably know that.

Speaker 1 They know that it's harder now than it used to be. You know, I've got this one group.
They have a guy that's been with them for 23 years

Speaker 1 and he's in a senior position and he needs to go. He needs to go.
I mean, he can't keep up with the business where it is today.

Speaker 1 And so the conversation with him is, look, I need to know, what are you thinking with your exit plan? Because you and I both know you're not achieving the results that you're achieving today.

Speaker 1 We want to find a way to honor you and honor your loyalty and commitment and performance that still helps you and the business move forward. And so they frame the conversation that way.

Speaker 1 And it worked because the guy said, you know, right, I know I'm not delivering. I'd like to make it another 18 months.
Perfect. We've been here for 23 years.

Speaker 1 I'm not going to throw you out with 18 months left to go, right? Let's find a way to honor that and use that time as a transition period.

Speaker 1 So that's a different conversation than if you have somebody who's a poor performer. If you have somebody who's a poor performer, the conversation is, look,

Speaker 1 This is what we need from you in the business, and we're not getting you there.

Speaker 1 I need your agreement that you're going to move in this direction.

Speaker 1 And

Speaker 1 if you can't, then we're going to have to make other decisions. And the reason I'm talking to you about this is because it would be unfair to just walk in and fire you.

Speaker 1 You've been with us a long time. You're not performing well.
One of the best tactics that we've ever used and developed is this.

Speaker 1 You ever had somebody that you've talked to them more than one time about their performance and they just don't get it? Yeah, that happens quite a bit, but it's the way that we

Speaker 1 portray that. I got to know what their dreams are to get them to perform.
Because if I make it their why instead of mine, they tend to work harder, right?

Speaker 1 And you've tried all that, and they're still not there. And at the end of the day, here's the tactic: you say, Look, and I'll use you as an example: Look, Tommy, we've talked about this.

Speaker 1 I know what your dreams are, I know what you're trying to accomplish, I know what your goals are. This isn't working,

Speaker 1 and it's to the point

Speaker 1 that truthfully, I probably could fire you, but I don't want to do that.

Speaker 1 I want to find a way to work with you. I want to find a way to turn this around, but you're going to have to be a part of this.
So, Tommy, here's what I want you to do.

Speaker 1 I want you to take tomorrow off. I'm going to pay you.

Speaker 1 And day after tomorrow, I want you to come back with the decision. Do you want to work here? And are you willing to put in the work to get to where we both know you want to be or not?

Speaker 1 And if the answer is no,

Speaker 1 man, we'll help you exit out of here. But But if the answer is yes, you got to know that we need to start seeing

Speaker 1 very real progress.

Speaker 1 And there's something very powerful about telling somebody to go home and say, look, I believe in you enough that I'm willing to pay you a day.

Speaker 1 I'm willing to give you a day and pay you for you to decide, are you willing to put in the work or not? You know, what's interesting about everything is

Speaker 1 people come to me that have been with me five, six years and they're like,

Speaker 1 you're changing. Like, I don't even see you anymore.
And I'm like,

Speaker 1 I think to myself, I spoke at 10 conferences in eight weeks. I've been looking at businesses to purchase, trying to make every meeting that's important for A1,

Speaker 1 moving to a different house. And I'm like, it's so crazy to me.
Did you expect us to be at 500 employees and me to be the same as we were when I was 30?

Speaker 1 Because it's mind-blowing how some people, they're just like, do you even know who I am anymore? And I'm like,

Speaker 1 I've got to make a note to call my mom. I'm like, trust me, this is never an intention.
Even some of my friends, they go, when is enough enough? Why do you got to keep growing? What is your goal?

Speaker 1 And I'm like, I want to be the best leader, the best legacy, the best I could be. I think I would say Spider-Man with Peter Parker, his uncle said, with great power comes, great responsibility.

Speaker 1 You know, we're watching people buy homes, have kids, buy cars, get out of debt, have great credit scores. It's got to count for something.
Now, I know

Speaker 1 I had this conversation with a client of mine two days ago. He's exiting his business.
He's the CEO. He's taking it through exit with a PE firm.
Now he's going to go take some time off.

Speaker 1 And he said, I'm going to take six months off. And I said, no, you're not.

Speaker 1 And he goes, yeah, I'm going to take six months. And then I said, you might take three months off.
And the last six weeks of that, you'll be putting feelers out for something new.

Speaker 1 You're tired now and you think it's going to be six months. But I said, there's certain people, by the way, Tommy, you're one of those folks.
You're kind of like sharks.

Speaker 1 If you stop swimming, you'll die.

Speaker 1 And I'm that way too. And that's part of what drives me in my business.
It's why I continue to do what I do. I know it's why you continue what you do.

Speaker 1 And the people that say, you know, they don't know you, I don't know you anymore.

Speaker 1 My dad was a diesel truck mechanic. A great year for him was an average month for me.

Speaker 1 And I got relatives that say, wow, you're different.

Speaker 1 No, at the core of who I am, I'm not different. At the core of who you are, you're not different.

Speaker 1 What's changed isn't you, the person. What's changed is the level of complexity and the field that you're working in.
And it's the size and the scope and the perspective.

Speaker 1 I had a chance to interview Ross Perot for one of my books. Spent a lot of time with Mr.
Perot. He founded EDS.
He founded Perot Systems. I mean, you know, he's,

Speaker 1 and the stories that he told me were about his parents. He told me about riding horses with his dad every day after school.
He told me about having the conversations with his mother. He told me

Speaker 1 the things that he was at his core when you stop to listen were exactly who he was when he was a 12-year-old kid growing up in Texarkana, Texas. I'm guessing it's probably at the core of who you are.

Speaker 1 It's the exact same thing. Yeah, you know, it's interesting.
I did a three and a half hour lecture. I don't want to call it a lecture.
It's actually my orientation.

Speaker 1 And I said, guys, I want to tell you that some of you guys might go on. And that's fair.
All right. I said, I'm selfish in a way that I want you guys to win more than anything.

Speaker 1 And I said, you know, we had a $500,000 collected day. I said, we're we're right around 17, 18%.

Speaker 1 So I said,

Speaker 1 no means to tell you guys or brag, but that's roughly around $90,000 we made. And, you know, it comes down to me.
It drains into me.

Speaker 1 So I said, if I wanted to retire tomorrow, I could easily live off, I mean, very, very comfortably in a mansion. And I said, but I'm not doing this anymore for money.

Speaker 1 I want to see you guys grow and develop as humans, but more importantly, I have a picture of this dad with his son and they're planting a tree

Speaker 1 and he's watering it and he goes son it's the little things that matter and underneath it's the son pushing his son in the tree now that little thing that they garden together and and

Speaker 1 so

Speaker 1 they planted and i'm like guys you know what really makes my day

Speaker 1 is when i see you guys coaching your kids or when i see you take your wife or husband on an amazing vacation or if you decide to put your kids through private school or home ownership or bringing a kid into this world i said here's my cell phone and i want you to text me every time if you get out of debt whatever it is and i'm selfish in a way that this makes me it's what makes me tick and i said it's what makes me get up and get excited to come into work you can find me here most saturdays and several sundays and that's not going to change they said well what what is the goal where do you see a one in 10 years

Speaker 1 I said, look, I'm about four to five years out. 10 years is crazy.
I said, but most people underestimate what's possible in 10 years because it's compounding.

Speaker 1 But I said, you know, this thing's a lot bigger than a garage door company. So, you know, we're working on several books.
You know, there's a lot of big things happening.

Speaker 1 And I have some pretty good ideas of where I want to be. But ultimately, the one thing is, like we talk about in the seven habits of highly successful people is.

Speaker 1 When I'm getting buried, I hope that there's people that say I was good enough to help change their lives and maybe added a lot to the people I interacted with.

Speaker 1 I said, because that's about all I could ask for. You know, I'm hoping one day I have a grandson that says, have you ever heard of a garage door?

Speaker 1 Well, my grandpa was one of the ambassadors of the whole thing. So, but there's no end.
You're right.

Speaker 1 I can't stop swimming. There's no like, oh, when this happens, it used to be 100 million.

Speaker 1 Then it was like, so if you went to two houses ago and you fogged up the mirrors, I wrote it right when I got out of the shower on the mirror, 100 million.

Speaker 1 And then the girl I was dating, this is years and years ago, she said, you're not going to stop when you hit 100 million. You won't stop when you hit a billion because you're never stopping.

Speaker 1 And I said, you're right.

Speaker 1 Yeah, but the great thing about what you just said, Tom,

Speaker 1 my guess is you're not any happier as or fulfilled as a person on the way to a billion as you were when you were making 20 million. Well, the only difference I would say is the ability.

Speaker 1 I said, I want to do what I want, when I want with who I want. Yeah.

Speaker 1 That's the only thing that's changed. But then I realized I want other people to come with me because it's lonely on this trip.

Speaker 1 So, I mean, there are people that, and I know them, you've met them who are there that they want to go on the trip, not because they want others to come with them, but because they want to go there.

Speaker 1 In fact, there are some folks that want to go there and don't want anybody else to come with them because, for them, that's how they define themselves.

Speaker 1 The great thing, and this is what makes leaders, I think, go from successful to significant. And I think that's always the challenge for leaders.

Speaker 1 Leaders go from successful to significance when they start thinking more about how do I help other people get

Speaker 1 there? How do I bring people with me rather than how do I get there myself?

Speaker 1 Because the fact that you've helped other people get there, they're going to push you higher. I mean, all that's going to do is push you higher.
And it's that way for our employees.

Speaker 1 It's that way with our customers. It's that way with our businesses.
You and I both talk a lot about PE firms off and on today.

Speaker 1 And, you know, I think there's really one of the basic reasons people sell to PE firms. I mean, there's basically three reasons.
One is they don't have an exit plan.

Speaker 1 They don't have a son or a grandson or a granddaughter or grandchildren or something like that to give the business to. And so they have to find a way to exit.

Speaker 1 And they want to keep what they built going, which I think is wonderful. You know, the second reason is

Speaker 1 they're in trouble. They don't have a choice.
And you and I both know that there's going to be a recession. And Warren Buffett is right.
You know, when the tide goes out, we see who's swimming naked.

Speaker 1 And there'll be some businesses for sale because of that.

Speaker 1 But the third reason, and I think this is the cool thing about why a founder ought to think about that, is they realize they need a partner that becomes a bigger bank. That's it.

Speaker 1 That's what I was going to say. Like, literally, if you want to grow at an alarming pace, but the systems need to be dialed in.
But the fact is, if you got the opportunity to be the first one,

Speaker 1 it is you want to capitalize. And the crazy thing about arbitrage is you could buy a company and you know, you've got the difference evaluation, but nobody really thinks about this.

Speaker 1 And private equity is not good at this. They aren't.
They understand the arbitrage. They understand spreadsheets.

Speaker 1 they don't understand how to take an effective multiple of five and get it to one by increasing the booking rate average ticket the marketing and pushing the limits on different things so they only think about because they're not very great operators they're amazing with money and they understand

Speaker 1 most of them have never operated anything yeah they haven't and it's so funny because i meet these people and they're like they're buying it because they're worth 15 and they're buying it for five they just tripled the day they bought it and that's all they do but they have no idea what the fundamentals that went into the business and that's why a lot of pe firms they fail and they actually i wouldn't say a lot of them but you've heard of these venture capitalists and pe firms they get in there and they start cutting corners they start getting rid of the employee incentives they start saying we need to tighten up we can't do that extra pto and all of a sudden they lose their eight players and the whole thing crumbles i've seen it too many times i'm watching it right now with another one of my clients.

Speaker 1 And the sad part is, I see it coming, and the PE firm hasn't figured it out yet. And, you know, I've seen it.
But at the same time, I've also seen business leaders, business owners do the same thing.

Speaker 1 Wait a minute, I can't invest in that piece of equipment

Speaker 1 because I need to protect my earnings this month or this quarter or this year, realizing that that piece of equipment is going to be a multiplier for your business.

Speaker 1 I sold a house a little over a year ago, but before I sold it, I had a new water heater put in it.

Speaker 1 And the guy that showed up to do my water heater said, man, I'm glad your water heater is in your garage.

Speaker 1 And I said, why? And he said, because I was afraid it was going to be in your attic.

Speaker 1 And I cut my crew down to just me because I can't find people. I can't keep people.

Speaker 1 And, you know, I've got to walk away from business where I have to go up in somebody's attic.

Speaker 1 So the conversation I had with him is: I said, okay, so in essence, what you've said is you're going to limit your market. You're going to limit who you can serve

Speaker 1 because

Speaker 1 you don't want to make a lack of investment. You haven't figured out how to make a multiplier, how to use things as multiplier.

Speaker 1 And I said, for every talent, every person that you hire, minimum, they ought to be doing 3X.

Speaker 1 They ought to create an opportunity minimum of 3X. Five or seven is even better.
But at three, they start to be profitable at least.

Speaker 1 So if I'm paying somebody 100, they need to be able to help me generate 300 and more in revenue.

Speaker 1 And I said, but here's the real sad part is that you're missing opportunities because you can invest in a five or $8,000 piece of equipment that helps you get a water heater upstairs with one person.

Speaker 1 And you stopped learning and you stopped investing. And, you know, there's a piece of equipment out there that will allow you to do that.

Speaker 1 And you didn't do it because you got complacent in your business and you think, well, gee, I don't want to spend that money and spend that investment. And, you know, we do that all the time.

Speaker 1 All of us do it in some area of our life. You mentioned about, you know, you have all the different pieces.
I stopped a long time ago.

Speaker 1 I stopped talking about the idea of work-life balance because to me, that's crazy. There is no balance.

Speaker 1 Yeah, I hate that term. People use it.

Speaker 1 There is, however, harmony. Harmony is a good word.

Speaker 1 And years and years and years ago, I played in the band at Six Flags Over Texas, and I was a guitar player. And so you think about

Speaker 1 every string on that guitar has to be in tune. You've got to have the right amount of attention on that string for it to be usable.
If there's no tension, it's not useful.

Speaker 1 If there's too much tension, it breaks. the magic comes when you get the tightness

Speaker 1 perfect and it doesn't have to be in every area of your life there are times when your work takes more precedence the time when your home takes more precedence but it all has to work in harmony with the right amount of tension to make it work together you know these millennials i'm a millennial I'm right on the cusp day 83

Speaker 1 and I watch these people are like oh my god I got burnout and I'm like what the hell Okay, you got burnout. And then I say, people ask me, what keeps you up at night? I'm like, playing with the dog.

Speaker 1 I'm like, nothing. This doesn't feel like I'm at work right now.
But this to me is not work. I get paid, I guess, in a certain way.

Speaker 1 This is a stretch, but this podcast, you know, people come ask to work with me because they hear this stuff. I think they get to know me a little bit more and good things happen.

Speaker 1 So I don't understand. I've created life and it's almost too perfect because I really do love coming into work.

Speaker 1 I mean, I do whatever I want. I get the best conversations.
I don't do one thing that I hate. Well, every once in a while, I have to do check a respond to a stupid email.
And I hate emails.

Speaker 1 That's why my assistant handles all of it. But, you know, overall, I'm like, burnout.
What the hell? Like, you must hate what you do. And they're like, you have no idea what it's like to work.

Speaker 1 And I'm like, I get up pretty early. I stay up pretty late.
I take care of a lot of stuff. I'm on the phone a lot, but I don't think I can get burned out.
What is that all about?

Speaker 1 I actually wrote my master's thesis years and years and years ago on burnout.

Speaker 1 Wow. And this was back at a time when hardly anybody was talking about burnout.

Speaker 1 And the way I think about it is this.

Speaker 1 Now, we have to use this. This is before LED lights, right? Because LED lights don't really burn out like the way the old incandescent ones do.

Speaker 1 But if you put too much power through an incandescent light bulb, sooner or later the filament burns out. Yep.

Speaker 1 And so really what they're saying is when they're saying I'm burned out, it means there's too much, there's more juice going through the light bulb than the light bulb has capacity to handle.

Speaker 1 And that's what burnout is. Now, I think I'm an LED.

Speaker 1 Yeah, probably are, right? But that's what burnout really is, right? I mean, there's more juice going through than you have the capacity. You're not good at creating priorities.

Speaker 1 So you're getting pulled in places that you don't want to go, which you aren't, right?

Speaker 1 So it's either a juice problem because we can't say no, or it's a capacity problem because we haven't learned to keep things into perspective.

Speaker 1 A buddy of mine, Scott McCain knows him well, a guy named John Patrick Dolan, asked me one time, he said, do you know the secret to living a stress-free life?

Speaker 1 And I was like, no, but I think you're about to tell me, so let's go. And he said,

Speaker 1 there are

Speaker 1 three things that really are the key to making having a stress-free life.

Speaker 1 One is

Speaker 1 know which things are truly important

Speaker 1 for you.

Speaker 1 And for some people, it's work and accomplishment, for some people, it's relationships. And I get that we're all different around that, but know what's truly important for you.

Speaker 1 And he said, The second thing is

Speaker 1 know the things

Speaker 1 that

Speaker 1 take you away and prevent you from doing those things that are truly important.

Speaker 1 And then the third thing is

Speaker 1 try to do more of number one and less of number two every day.

Speaker 1 You know, it's funny because my family, my mom, my dad, my sister, my niece, my nephews, my brother-in-law, they're all very special to me.

Speaker 1 But at the same time, I know I could not spend every breath with

Speaker 1 any one of them. I love them all, but

Speaker 1 I think this is what I talk about.

Speaker 1 I'm like, if you think bringing your kids to school while you're on the phone working is quality time, if you think being at supper, checking your cell phone messages is quality time.

Speaker 1 I'm like, I'd rather you guys

Speaker 1 find a nanny to do certain things. And the time you do spend is real time.

Speaker 1 And I want to give you. an opportunity to be able to afford you know money is just a tool but if you don't have it it becomes pretty important.

Speaker 1 And I've learned to pay people enough with a base to make them to where they can get their essentials. And then the dressing on top is when you're able to get a nice bonus.

Speaker 1 But people don't work as much for bonuses is what I'm realizing. They're going after their dreams and the things they get.
And I talk about this a lot, but

Speaker 1 taking a person and just buying them a pair of shoes if they're a marathon runner.

Speaker 1 that they would never buy themselves means a lot more because every time they put on those shoes, they think of you and they think about the company and they think about just they're kind of blessed to be there.

Speaker 1 So I just love

Speaker 1 today we just bought lunch for everybody and I didn't even know we were doing it. The one of the HR gal says, hey, Tommy, her name's Stacy.
She says, hey, lunch is on you today.

Speaker 1 And I'm like, well, I already ate.

Speaker 1 Yeah. But I hope everyone else enjoys it, right? Yeah.
You know, I think. That is one of the changes that I've seen.
By the way, all of my gray hair is real. It's not painted in for effect.

Speaker 1 I've been doing this a long time. We used to approach motivation as everybody wants the same thing.

Speaker 1 I don't know that that was ever true, but I know it was kind of the way we did things for a long time.

Speaker 1 And now I think I use this example when we were doing that program we were doing together earlier this year.

Speaker 1 Is that, you know, I tell managers all the time, this, you know, how do I keep my people motivated? And it's real simple. And I'll take you through it first.

Speaker 1 You're doing your ideal job. But remember back, you know, I mean, if you ask somebody,

Speaker 1 here's a question. Think of your ideal job.

Speaker 1 If you could do anything you wanted to do, and everybody gets, by the way, I usually tell people, don't say it out loud in case it's not the job you're in, because I don't want your boss to know that.

Speaker 1 But would you do your ideal job for 1% less than you're making today?

Speaker 1 And you know what? Most people say yes. Absolutely.

Speaker 1 Yeah. Now, would you do it for 5%, 10%?

Speaker 1 You take it all the way back. Most people are in at 5% or 1%.

Speaker 1 Most people are out by 20%, and that's their debt service.

Speaker 1 But it didn't matter if you said 1% or 20%, it wasn't just the money.

Speaker 1 And now, here's the next question.

Speaker 1 What would make this job closer to that ideal job?

Speaker 1 And then, if you can figure that out and get them closer, you know, money doesn't become the issue because they're getting that fulfillment, assuming that, like you said, they're getting the basic needs met and so forth.

Speaker 1 I had an uncle who was a pastor of a small church. He spent 30 years there, put two kids through college and everything, and he never took a salary.

Speaker 1 They gave him a house, they paid his utilities, and they gave him a car allowance. That's it.
Provided house, utilities, and car land.

Speaker 1 He did everything else without ever taking a salary based on this piece. He got whatever they put people put in the offering plate on Sunday morning, Sunday night, and Wednesday nights.

Speaker 1 That was his salary. And I remember asking him, his name was Lee.
I said, you know, Uncle Uncle Lee,

Speaker 1 these people love you. He'd been there 20 something years.
I said, these people love you. They give you a salary.
And he goes, yeah, I know, they would.

Speaker 1 He said, but I learned a long time ago that a hungry dog hunts better.

Speaker 1 And he said, that's my incentive to continue to be amazing because he got, in essence, he had a performance review every time he stood up.

Speaker 1 Yeah, no, it's interesting because this morning I had out all these envelopes and this gold bowl, and it's a tithing bowl. And I said, hey, guys, just pull out any money you got, spare chains.

Speaker 1 I'll take anything you got.

Speaker 1 And they said, are you serious? And I said, no, I'm kidding. Hand me back those tithing envelopes.

Speaker 1 I said, but if the church can talk about money and sales and collections, believe it or not, we're going to talk about sales and money. This isn't high school.
This isn't college.

Speaker 1 We're actually going to talk about making your lives better, increase your credit score. We're going to talk about sales and money, the things that we don't get to talk about.

Speaker 1 But we're not going to be dissecting frogs today. We're We're not going to be learning advanced algebra.
We are going to give you useful, factual things that we can do in your life.

Speaker 1 So, yeah, here was the thing, though, that's changed, Tommy, is that there aren't as many people like my Uncle Lee anymore.

Speaker 1 And I know it because I've worked with hospitals and I have conversations with hospital administrators where I'm doing strategic planning, or I had a conversation with my doc the other day, and my docs offered a new opportunity to potentially go open a new clinic.

Speaker 1 But the notion of going out and starting your own versus working for someone who will let you be empowered and take some of that is changing, not everywhere.

Speaker 1 I'm extremely hopeful about not only millennials, but the generation behind you, Gen Zs. Gen Z.
I think they're going to be the opportunity to be a great generation as well.

Speaker 1 But I mean, I do think one of the things we have to do as leaders, as part of building the great culture, is to realize we got to meet people where they are and we've got to find the things that help them get excited about the business for their reasons not just for ours but for theirs

Speaker 1 you know what i think the word is an intrapreneur

Speaker 1 yeah entrepreneur is a good word i want people who are willing to push the envelope by the way this is a question that you alluded to earlier on you know how important is leadership you've got a lot of those people in your business don't you who push the the envelope?

Speaker 1 Yeah, no, I've got the best group you could ever imagine. These are the things that

Speaker 1 you selected them for that.

Speaker 1 If they didn't show that potential, they didn't make the cut. So there was a selection process.

Speaker 1 There was a development and encouragement process. And then there's an expectation that you put in place.
And then you gave them the tools to do that. And then you turned them loose to let them do it.

Speaker 1 So, what impact does that have as a leader?

Speaker 1 You know, if you work for a leader who won't let you do anything and is a jerk, then you start to imagine that, you know, we want people who check their, the whole thing is check your head and your heart at the door.

Speaker 1 And that's why people get burned out.

Speaker 1 Yeah, I think we've aligned salaries, what happens outside of work, and an equity incentive program to do things that these guys, they're running in the same direction.

Speaker 1 They're starting to sprint with me, except I'm always, i'm always like come on come on

Speaker 1 but listen i want to get you a few more questions here number one is if someone wants to get a hold of you they want to reach out maybe get some advice or some consulting what's the best way to do that the best way is email probably that's the easiest way it's real simple it's randy at pennington group.com r-n-d-y at pennington groupallone word.com but i'm on linkedin and facebook and everywhere else i'm pretty easy to find either one of those is really easy to do.

Speaker 1 And

Speaker 1 it'd be great to hear from folks. And then what's your TikTok sign? No, I'm kidding.

Speaker 1 I don't even know.

Speaker 1 You know, I'm signed up for TikTok because

Speaker 1 it's like I'm signed up for Instagram. You know what? My clients don't use TikTok or Instagram.
That's not the people who call me, but I've got my TikTok.

Speaker 1 I've got it, my name on Instagram, mostly because I didn't want anybody else to have it. So you're right.

Speaker 1 Okay. And is there a book that stood out for you? Obviously, like the E-Myth influence, Rich Dad, Poor Dad, you know,

Speaker 1 yeah, I mean, the ones that stood out for me, I read, you know, Rich Dad, Poor Dad, I read E-Myth.

Speaker 1 The book that started me down my path of going where I got into the very first business book I read was a book called In Search of Excellence by Tom Peters and Bob Waterman.

Speaker 1 It was the first true business bestseller.

Speaker 1 And I read that book and it talked about culture and it talked about excellence. And I thought, it's one of those things that spoke to me, right? And I looked at it and said, I can do this.

Speaker 1 So In Search of Excellence came out in the early 1980s. It's still an interesting, interesting book.
It's a little bit like Good to Great. Some of the companies are gone and so on.

Speaker 1 But that book for me is what started me on my path. I'm going to tell you the two books that I've read in the last nine months that have really gotten me thinking, though.

Speaker 1 And And here's the first one. I'm going to hold it up.
It's called Find Your Red Thread by a lady named Tamson T-A-M-S-E-N Webster. In Find Your Red, it's about

Speaker 1 how do you tell great stories? And you talked about this earlier, right? About the importance of stories. So this book is about how you tell great stories.

Speaker 1 And then the other book, and by the way, you see this book, Tommy, it's relatively small and very easy. Then you look at this book and go, holy crap, crap, this thing is huge.
I know what that one is.

Speaker 1 Hold on. That one is the New World Order.
Ray, is it?

Speaker 1 Change the World Order by. Yep.
I could recognize it. Yep.
Have you read it? I haven't gone through it yet. That book is a mammoth.

Speaker 1 It is a mammoth, but I'll tell you, it will open your eyes into long-term success and failure.

Speaker 1 No, I've got it on Audible and the copies. Actually, someone sent it to me.
Those are two great books that I've read. What is that one again?

Speaker 1 Find your red thread.

Speaker 1 And then this one, The Changing World Order by Ray Dalio. I'm a fan of what Dalio talks about and how he thinks.

Speaker 1 Yeah, he's a genius. There's no doubt.
Well,

Speaker 1 we've gone for a while, but that's okay. Randy, this will not be our last time.
Is your number the 8153? Is that your last four?

Speaker 1 My mobile number? Yeah, the 8153. Right.

Speaker 1 Okay, good so i'm gonna give you a text i want to i want to keep up with you and i got some things that i'm working on that i want to run by you but this was excellent you know there's no better way i would have rather spent my friday this was fun and i've actually got to go jump on one more client call and yep you get going here i will get going and we'll talk again soon thanks for the opportunity thank you randy have a great one appreciate you

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