Podcast Episode 65 - Do You Have a Stop List?
IN THIS EPISODE:
Do you have a stop list?
It's human nature to try and solve a problem by starting something new. But it's not intuitive to ask what should we stop doing to solve this problem?
This week we talk about the stop list from Jim Collins and how you should consider stopping doing something in order to free up resources or clear blockages in your business.
We also discuss the process of building a stop list rhythm, where each month, each quarter or each year, you and your team consider all the things you should stop doing.
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EPISODE TRANSCRIPT
Please note that this episode was transcribed using an AI application and may not be 100% grammatically correct – but it will still allow you to scan the episode for key content.
Kevin Lawrence 00:13
Hey, welcome to the growth whispers podcast where everything we talk about is about building enduring great companies. Not okay companies, not flash in the pan companies, not build it up and get rid of it fast or solid fast companies but enduring great companies. And I'm joined today by my co host, Brad Giles. Brad, how you doing today?
Brad Giles 00:34
Pretty good. Very good. In fact, yeah. middle of winter, I think it's the shortest day of the year. And yeah, middle of winter. quite cold, but good. Everything is well, how are you?
Kevin Lawrence 00:49
Oh, you know what, by generally, like, you know, what's interesting, I thought about this the other day, I always say I'm good. But I almost always feel good. It's actually truth. And I was talking with a friend about this. And it was a mindset. And it's basically, you know, when you burn gratitude into your brain, and you find ways to be grateful for almost everything, most things look good. And even sometimes the hard things focus, I don't want to seem like artificial now, I am tired today. But I am also good. Like, I feel really good. I am insanely grateful, which would be my word of the day today is gratitude and gratitude of just you know, when I stop and think of how damn fortunate I am. And whether it's related to the pandemic or just in life or just with a, you know, the amazing people that I get to spend time with my awesome kids and, you know, and family I'm, well, most of the people, my family, I would say are great. There's always people who can drive you crazy. And I can drive them crazy, too. But insane gratitude to the point where they get hit me hard, maybe because I hadn't had a birthday recently, but, and a bunch of stuff, like a bunch of things and what they like in insanely deep gratitude to the point. And you know, and I plan to be on this planet, at least another 50 years. I want to be healthy to 100 that's my goal. And I hope new sounds will help me but like, sometimes I'm like, Frick, it's so darn good. I like this is like good magic. It's in that's my personal gratitude. is it's deep inside me. And I feel and today I feel an incredible amount of it. How about you? What is your word today? And I'm sure it'll be really, really close to gratitude. Yeah.
Brad Giles 02:46
No. One is the northbound train.
Kevin Lawrence 02:49
Yeah, obviously, that's
Brad Giles 02:52
Yeah. So there's a guy called Frank Costa, who passed away recently here in Australia, he was president of the jilong football club. And I had the very good fortune to see him present his business and talk about his business and his passion. And we had like a walk through his business many, many years ago, like 15 or so years ago. And he was a market gardener who built a $1 billion revenue business, you know, an amazing, amazing guy. As we walk through his business, he, he talked about their passion and their culture. And we came across a wall, a huge, huge wall, which would have been, I guess, like 10 meters long. And there was this picture of the train that was painted on it, six foot high, two meters, by one point, I made it I all the length of the wall, and you couldn't help but say, What is with that train? And he said, Oh, that's the northbound train. In every one of our offices, we get an artist to paint a picture of a train on the wall. That paints nor the story that points north. And so we're going north, we're on the northbound train, if you want to go east or south or west, that's no problem, jump off the train. But we're going north. So if you're not all on about it vision, if you're not part of what we are all about, that's okay, because we know what we're all about. And it was just it just still, every single one of my clients. They know the northbound train, they know the story, and it's completely okay to say to someone if you're not on the northbound train, that's okay. So mine is the northbound train.
Kevin Lawrence 04:47
Nice. I love that example, Brad. It's a great example to use with people to help them get grounded. So today we are grateful for the northbound train. I love it when these things pieced together. I just like to, I like to sew them together grateful for the northbound train. I'm grateful for the people that get off the train when they don't want to be on it as well. Or the opportunity myself to get off the damn train. But I don't want to go well. That's a That's awesome. By the way, that's a whole other thing about the willingness to step off the train and when you should, and that and the art of doing that in whatever it happens to be in your life. Yeah, that's a whole nother thing. So what is the show today? What are we doing? What are we talking about? What's aside from the northbound train?
Brad Giles 05:36
Well, it's kind of connected to the Nordstrom bound train a little bit, it's Jim Collins stock list. Simple, really simple. But humans have a tendency to take things on, when there's been studies that have been conducted. And when humans try to solve a problem, it's intuitive to think about adding something and not taking something away, that goes against your intuition to think about solving a problem by subtracting or taking something right. People very, very, very rarely Think about that. So one of the things that Jim Collins talks about is the stop list. In other words, building a list of things that you need to stop doing rather than starting during and then building that as a part of your rhythms. Yeah, and when we've
Kevin Lawrence 06:28
done private sessions with him in his lab in Boulder, and I've shared on previous shows, we've taken 100, twice, 120 CEOs around the world to spend two days with them pre COVID, in his lab, you know, at the end of the day, often, or when I am when I've, when I've attended, he'll at the end of the day, and when you're talking about what you're going to do, he gets people to note the stops, let's say, okay, and you got to free up additional bandwidth with underutilized resources or time to allocate to these new ideas. And he gets people to write down a couple stops, and then a couple actions as just a tandem activity to help build that discipline of let go to start, stop to start. And it is hard, it is not natural. I remember, you know, there's that show hoarders on TV in the US may not have seen it there. And it's basically these people who keep accumulates. Now some people accumulate like cars in their farm yard. And some people like to collect spoons, and some people like to collect stamps, or coins, or photos or magazines or whatever it is, these hoarder people, it gets a little beyond that to the point where their houses are so stuffed with stuff. And it all ends up becoming messy in garbage and stuff that they just that he can't it's not safe. Yeah, nevermind, fire hazard. But you know, all kinds of other hazards. But you actually have can't walk around the house because the house is so stuffed. So obviously, for most people, that's not their existence. But in reality, conceptually, we all end up with a lot of stuff. And sometimes we're very good at organizing it, so you can't see it. And I have a friend who just moved recently. And they had an awesome, you know, smaller place on the lake where they were. And as he's moving his stuff, he couldn't believe how much stuff they had jammed to the small place. So I'll kind of stop my share with a friend that I had years ago that she and her partner lived in a very Zen like space. And it was in the city. So it was smaller. But they had a rule in their house. One thing in one thing out, yeah. What like literally like any, anytime they brought something new and something had to go out. Yeah. And that's the only way they could maintain that Zen like space. Yeah. And that's kind of what we're talking about here is is the discipline to get rid of things.
Brad Giles 08:56
Oh, it stopped things. It's things and it's things that you do. So yes, absolutely. So I think about one of the teams that I work with the CEO applied this, I'm gonna say probably six to 12 months ago, this kind of stopped this rigorously. It was around. It was around January, actually. And he did it. His ritual was at the beginning of the calendar year. he would figure this out, what am I going to stop doing? He was in YPO. And a fantastic organization that people who were in the YPO young presidents organization, they love and it gives them lifelong friendships. But he decided that was one of the things that he had to stop doing, which was an incredibly hard decision because these are some of the strongest bonds is that many people would do but he said it's just it's taking up too much of my time and it's sacrificing my family and everything else and he said nothing. That's it. That's got to go. A very hard decision. But in the same way that you said, in the Marie Kondo type environment, the minimal living, if something's going in, then something's got to go out. Well, that was his. So it's not just about things. It's also about things you do. And it's also about relationships you have.
Kevin Lawrence 10:24
And this is a spot that's also hard for many people, is when it's a, it could be a supplier that you don't want to work with. It could be a team member you don't want to work with it could be a friend you don't want to spend time with and those are also very hard because we feel responsibility. I was talking with an entrepreneur recently, I'm trying to remember who was AB, it was a casual conversation. And you know, and we were talking about it and we were talking about is, you know why they couldn't had a hard time letting go of some of these people. Well, they Well, these were they were there from the beginning. They believed in me when nobody else did. They've been part of it. How can I cut loose the person and yes, they're an underperformer today. And yes, I know it's not going to change. But these are my like my loyal people that gave me a start and supported me and worked with me. And how can I be heartless? Like that? Yeah, right. Or, or? Or it's also stop inviting a certain friend to a party or saying no, but here's the main thing in the world, and principally what I have learned myself in my own world, and i'm not always the best at it sometimes. But when you say all firm, no, and, and stop something like you could be stopping a relationship of behavior, clutter, or whatever you say, Stop saying no, you make space for something else. Yeah, literally, it's like, when you stop, you eliminate all the cups in your cupboard. You make space to notice new amazing cups you would want. Right? or, or, or you clear space in your garden, you make space for ideas or ideas around a new one, or relationships or suppliers. Right? Like generally, something better always can show up. But there's no damn space for it in the system. Yeah. So so it doesn't.
Brad Giles 12:18
Yeah. And so what we're saying is, it's things that are burning resources or burning time. Yeah, that don't provide an effective return on investment. If it's
Kevin Lawrence 12:30
Yes. And by burning, there's waste. And then also by burning, there's friction, right? Like some of the process and relationship things can sometimes it can be friction or resources. And then the stuff you know, the things can be resources. So just, it's, it's, it's not it's inefficient in the system. And yeah, and so it was, Oh, it's this is the thing, that's really hard thing for people to do. Because as you said, up front, because no one we're in the mindset of just adding to it. Yeah. And usually I go back and just as a simple thought I was. I was out on the weekend and had risotto, which is can be one of my favorite dishes. and nine times out of 10 it does. It's not great. Like Yeah, wait, risotto is something special.
Brad Giles 13:22
It's brighter. It's bad. I find it you're a sickly it is
Kevin Lawrence 13:25
Yeah, it's great or it's bad. And the one I had was in the bad category. And but it was interesting. I was sharing with a friend that I've got a buddy in Dubai at and he's a massive, masterful cook, and his biggest Scott Ed makes the world's best risotto ed has made and he gave me the recipe. He actually told me all the ingredients. We didn't fake it and I made it twice. Once, it was almost as good as ads. And then once it was bad. So I but the point I'm making is, is that you know it's simplifying things, and I remember cooking with Ed once and it was a pasta. He was three ingredients in the sauce three there's only three things with olive oil, chili peppers, and one other thing. It was like the best paste tasting pasta I had my it was spectacular. Right But did get it down and reduced to just a few things require stops in most people when they make a pastor when I'm making pasta I like add a whole bunch of different things in Yeah, because it looks good. And we so by adding we often subtract, or by subtracting we add and that's the idea is to find ways to remove stuff from the system to make things simpler or flow better.
Brad Giles 14:40
Yeah, yeah. You know, many, many plants actually can only thrive if they've been really heavily pruned. I don't know if you've ever been past a rose garden but in rose gardens. The only way that they can get a great bloom in spring is you They cut them right back. So they really only like eight to 12 inches long, at the autumn, or in the winter when they do the heavy printing, so they cut them right back. And that's what gives a really bountiful harvest of rose flowers the later that year. Now, look, metaphors aren't everything. That's a nice metaphor, but it's kind of the same in your life, you could, what are the things that you are doing that you need to stop doing that aren't either adding value or preventing you from bringing on something that is really high impact?
Kevin Lawrence 15:39
Yeah, and you're just taking stuff that isn't producing a high return. So you can reinvest it somewhere else, it's like, if you were wasting 100 bucks a month on something that was of no value, you could invest that 100 bucks a month into something a high value, and overall, you're gonna get a better return in the system. That's it. So it's not the principles easy. Yep, everyone's gonna Yes, guys, I understand this. But how? How do you get human stop? Because it's not our nature? How do we get humans to stop the stuff and take the time to think about the things that they should stop?
Brad Giles 16:13
Well, it's habits, isn't it? I mean, it's, it's about having a rhythm and a habit. So I mentioned earlier, I try to remind people to do this in January, at a minimum. So I kind of ask, When I'm with leadership teams, I'll ask the question, what do we need to stop doing in our business? And we'll run that as a facilitated session? Because there's always things that have built up or those systems or processes or these things where we just have to question it. And this is different from another exercise I do about the brutal facts. This is simply like that, we can do a whole separate I think we have done a whole separate
Kevin Lawrence 17:01
we have that's it is a separate conversation. It was so good, I forgot it.
Brad Giles 17:07
But yeah, what this is, is what do we need to stop doing? This is a very, very different and important question to have it in as a habit.
Kevin Lawrence 17:17
Yeah, and for example, we have our quarterly team meeting happening tomorrow. And you know, I'm, as we're talking about this, I go, I don't think it's on the agenda. I think I might have forgot it. And I got a post it note right here that I'm gonna make sure we talk about individually. What are we going to stop doing? And as a team, what do we stop doing to free up resources? Because, again, we're always adding new things, we could do this, we could do this. That's our creative process. So the first thing is, you got to have a time to this to actually have the discussion as a team, what are you going to stop doing, and make individual commitments or group commitments. And then the second is we've already talked about is look at things that burn resources don't provide a return, or they provide a weak return. Or, you know, they they they frustrate things a lot we've talked about. So number three half years, it should be rhythm, it should be every quarter every year. I love it. I don't know if this is on our list here today, Brad. But one, one team we worked with is that every individual team, like the final five or six on the front lines, would make a list of their stop lists. And they put it up on the wall. And so that they could actually find remind themselves and then cross it off when it was absolutely stopped. Or they became an individual team working session. And that was their execution discipline, it's on the wall. And then when you can, when you can fully say it stopped, you can cross it off and move on to your other ones.
Brad Giles 18:47
It's such an A way to break through the bottlenecks, isn't it? It's I love that that's a fantastic idea. Yeah,
Kevin Lawrence 18:54
it was great it and it worked because it's visible because we forget to once we decide we need help remembering what needs to happen. So number four we have down here is ask a lot of people in your organization leaders and managers like get their opinions and i think it's it's it's super important, which ties into number six, how you deal with it, but get people think it basically get them thinking about it, and then ideally, empower them to do something about it. You want to touch on number five there, Brian? Sure.
Brad Giles 19:29
What could it be? Well, I guess first of all, I want to just close off the previous point. So there is a difference between a start, stop keep and a stop list. They both kind of there are similar as we're asking in a survey we're asking a lot of people generally verbally through a start stop key which we start doing, what should we stop doing and what should we keep doing? Many of our audience Rumsey familiar with that. And that's more of a stir. That's more of a survey. Where we collect the data in a qualitative sense, but the stop list is often more of a brainstorming session, it's more of a team working together, perhaps to figure that out. So for example, we could be saying we're going to stop doing a part of a meeting, we could stop doing reports that don't work, stopping a client, getting rid of a client stopping doing a service or a product, it could be anything in the company or anything in the personal. But if we go back to the kind of beginning, it's what is burning resources or time. And we could therefore stop doing it to get somehow more time, more resources, or free up our resources to be able to work on more effective things.
Kevin Lawrence 20:51
Yeah, so this is more about a conversation and then making a decision about it. Versus gathering the information and getting, it's getting people thinking about it, and going to do something. And there's lots of examples. And the main thing is we got to keep chipping away at it, because they build up and people don't even think about it. And so there's kind of two versions, once you have your list of what you do. One is empower people to do it, ideally, at that team level, like we talked about, Hey, you know, as a team, you decide what you're going to do, or as an individual and do it. And then there's some stuff that's kind of it's kind of a it's like, it's above their pay grade, or it's above their, you know, they don't have the authority to do it. You know, we're gonna, we're gonna stop paying commissions to salespeople. Yeah, that's not something, you just go ahead and decide, yeah, it could be an excellent idea could be a horrible idea. But that needs to get kind of put up on on the list of projects, the team would work on, right, they would go to the appropriate people to have a discussion, and to see if it's viable or for make sense. And maybe there, maybe there is a you know, maybe we were changing something notable, like commissions, I'm making that up, but, or how bonuses are calculated, or, you know, big things and there's Amelie, what he needs to be prioritizing the cross functional team would take care of it. The key idea is that doesn't stop us from doing a lot of the little simple things that do burn a lot of resources. Those are, you know, we did some work with being the consulting firm on round Net Promoter Score. And they just call it inner loop and outer loop. inner loop is like, it's all within your control, you and your team, go do it. Outer Loop involves other parts of the business. And you can't decide without hesitation or working with others. I love that. And we just want to make sure that people don't get bogged down on inner loops stuff they can do, and just like let them run while we go do the other things. Because otherwise, we'll get slow and bureaucratic. We don't want that.
Brad Giles 22:53
And so I guess then what we really get to is, is knowing that it's not human nature, to say what are we going to stop? It's human nature to think about problems. But then think, what can we add? What can we start? What can we do to solve that problem? instead? What we're saying build a rhythm, pattern or habit into your life? Where you ask the question individually and with your team. What can you stop doing? What is the thing that you can stop doing? Around anything really, like just the open question? What should we stop doing? And in my experience, people come up with all sorts of different interesting and amazing ideas. Some of them good, some of them not so good. But it's, it goes against their intuition, which is why we should do it.
Kevin Lawrence 23:52
Exactly, and why people need our help. So look, this is insanely simple, and it's rarely done. That's the idea of why we're talking about it. It's not rocket science, yet, people's businesses get congested, and, and need help doing this stuff and weaving things out of the system. Because this allows things to flow better and like my friend Ed's pasta dish, they have a lot of stuff is removed from the typical pasta dish, and it's outstanding. It's so darn simple. And that is not normal. I never ever would have made pasta that way. Never yet. That's something learned from masterful Italian cooking. He knows based on how he was taught in his family, but normally there would be like seven other ingredients, and it would look good, but it's just stopping things and elimination. So removing to simplify, right? There's something I wrote down it was earlier on, I'm just gonna look at my notes. Well, that's different that's a different principle. But you know, basically simplifying it to make it better or removing things to make it better. Also, Good thinking for us.
Brad Giles 25:01
Very good. Um, so yeah, let's think about let's start thinking about what we can stop. That's another way to put it. All right. So what a good chat that we had today. Yeah, this should be a rhythm. What are the things that don't burn? I'm sorry? What are the things that are burning resources or time? How do you stop doing them? And how do you get your team involved in that? So with all of that, ask yourself the question, what can we stop doing? This has been the growth whispers. I'm Brad Giles. And you can find me at evolution partners.com.au You can find the video version on YouTube, obviously. And you can find Kevin at Lawrence and co.com. Thanks very much for listening. We would love to see you again next week on the growth whispers Have a great week.
Podcast Episode 64 - Why You Need a Quarterly Reset
IN THIS EPISODE:
Why you need a quarterly reset
This week we're discussing a simple tool that you can use to reset quarterly across three key areas: work, self and life.
This worksheet helps you unpack all of the stuff that's happening in your life and enables you to rank the most important priorities.
This process will help you reflect on what's working - and what is not. Consequently, allowing you figure out how much energy to allocate to each of the three areas for the next quarter.
Download the quarterly reset worksheet here
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EPISODE TRANSCRIPT
Please note that this episode was transcribed using an AI application and may not be 100% grammatically correct – but it will still allow you to scan the episode for key content.
Brad Giles 05:05
Today, we are talking about why you need a quarterly reset. So it's coming up for the end of June, and the middle of the year and these kinds of events in the calendar or transition periods in the calendar, get you to think about a reset. And you actually wrote about this in your book, Kevin. So we're going to talk a little bit about that today. Why you need a quarterly reset.
Kevin Lawrence 05:38
Yeah. And in many ways, just like celebrating, you get to think about all the good things that are going on and enjoy that. Sometimes when not-so-good things happen. You get a chance to reflect and we lost them very sadly. Think last week, you know, a guy Jerry Jagger's name, who was a part of the race track remembers, I've called area 27. young guy passed away. And, you know, kind of shocked all of us in the community. And, you know, it gets you to the ones when someone that doesn't, when someone that you really like or care about passes away, it makes you think, as well. So those there's, there's life events that cause reflection. But we don't want to rely on those. We don't want to we don't need any more of those than that. It was a I was just I want to say that. By the way. Just a note about your shoulder what Jerry, Jerry was an amazing guy. Every time I saw the guy, he was smiling and happy and interesting, as people are posting stuff on Facebook and other places. Everyone says the same damn thing. nicest guy ever, always smiling and happy. And it was awesome. I was, you know, he left a legacy. I don't know if he knows that he left, unfortunately. But that's what a great way to be remembered. Right? Just Yeah. That people loved being around. That was sad. But the point is, is that we have those events and it makes you contemplate but ideally, we build a rhythm or a discipline into our contemplating and what matters most. And we normally do in companies, we have goals. And some companies only run annual goals, which I'm not a big fan of. Neither are you need quarterly because you have basically it's more frequent accountability, and then resetting points. Yeah, so Oh,
Brad Giles 07:20
I am Yeah, so I've, I've been doing quarterly planning for literally decades. And I remember one person in particular, he said, it feels like it's time to come back together. And this was like a week before our quarterly, there's actually there is something inside of us, that aligns us with a quarter now my very unprofessional theory is it's, it's to do with the rhythm of the seasons. Okay. So we can go through a summer for long enough, before we see the transition into what we would call autumn, before 90 days, we would see the transition into winter. And these 90 day cycles are really quite deeply built into us. And therefore when we translate that into business, it feels like it's time for a change, it feels like it's time to move on and to have a reset into the next season. I've a few times in my life, I've spent the summer in Australia, and then sent spent some or a large part of the summer in the Northern Hemisphere. And it just feels like it feels like it's a bit much. So I think interesting. Yeah, my theory is that it's, it's something that is, you know, a part of us as humans, that lasts 90 days that we you know, we need to change after 90 days or reset
Kevin Lawrence 08:57
that because things kind of get fragmented and frayed, you want to bring it back together. And for me, I think about it is, you know, as my kids were younger, I think it was the season of school,
Brad Giles 09:06
right? There's
Kevin Lawrence 09:07
the there's the summer period, there's back to school in September, there's a restart in January, there's the restart after spring break, you know, similar type of rhythms, the point of it is having that that discipline. So you know, what we really recommend, and it's not rocket science is that you do it yourself. Ideally, you do it with your partner in life. Or you could do it with your team, or your coach or advisor or somebody. But you do some work within you get someone to help you lock it in. So for example, tomorrow morning, I'm meeting with my coach, I work with myself. And I'm going to go through this process and get it locked in because that's, you know, that's the time that we have. And then I've got the team company version later in the day. And then the company version, you know, we often get people to set goals, no one around and some goals around life and around self. Not just work. But not all companies that we recommend it but not all companies do. But the point of it is there's a deep version you would do for yourself to contemplate and then there's probably a later version of the work and self stuff that you might do sorry, the life and self stuff you might do with your team at work. So I think the starting point is just in your oxygen aspers we break it down between work self and life, right work is your career or, or money and investments, right stuff that generates cash and ideally enjoyment, because you're connected to a purpose. And self is about you and being happy, strong and healthy. You personally just being your best, normally the most neglected one for a lot of people. And then your life, your family, friends and your community that can be if you're doing you know, you know, charity work, and obviously your your your family, but just reflecting and breaking it down. So you just don't look over all because it's too messy and kind of lumped together.
Brad Giles 10:51
Yeah, you've got to be able to divided into these areas, it's fair to say that in our brain, everything is mashed together. But by segmenting it, it means that we don't, we don't revert to what we may intuitively go to, which is we may people like you and I, Kevin would probably intuitively go to work. But yes, you would sacrifice the self or you would sacrifice other areas. So being able to segment and focus around different areas, and you correctly kind of attribute it to three separate areas, I think is really, really important. And gives us the opportunity to, to not end up in this difficult situation where I know, like the two of us have been in our lives where we're like, everything's going really well in one area, but not so good in another area, or I'm getting burned out over there because of something else that I'm doing.
Kevin Lawrence 11:52
Yes. And it's like the three plates that you're constantly spinning for three hula hoops, that you're constantly that you got going, or the three knives or juggling whatever metaphor you want to use, you know, work self in life, and if any one of them is in a bad place, it affects the others, particularly self, but if life is not good or neglected, and the idea is to keep reminding yourself, of what's most important, and making sure you set goals in all three areas, not just at work, which is kind of natural for people is to have goals for work only.
Brad Giles 12:25
Could you just clarify, because I've read your book, and I'm a big fan, but could you just clarify, please, for the listeners? What do you mean by works often life what is your definitions there.
Kevin Lawrence 12:37
So again, working I think I covered a little bit earlier, but it's work is it's about your job, your career, or your company. And it's basically and, and, and money or investments. So things that generate cash for you. Right, because you know, you might manage a bunch of investments, but that would be your work, it's the things that generate cash and And ideally, self is you just you as a individual being strong, resilient and happy. And then like family, friends and community, that's your, but it's separating yourself from your life, because they get blended together. But in your life can require a lot of energy, and you can give none to yourself, and then you kind of deplete the whole system. And that's the whole thing. If you don't consistently increase and build your own energy and your own energy reserves, you don't have as much to give. And the idea is to master conscious selfishness, which is where you take exceedingly good care of yourself. So you can perform and do what you want at work, and have enough energy and gas in the tank to still live a great life and be a great influence in your life. Yeah,
Brad Giles 13:47
that's the idea. And so this quarterly reset, what we're saying is considered work self life, and going through these different areas. So this is a tool from your book.
Kevin Lawrence 13:58
Yep. And I'll just flash it on screen for those that are watching you. And you can go to YouTube. And I should probably put the link to this in the notes. But there's the definitions across the top and we'll just walk through there's some reflection questions. We'll walk through those. And then the second page, there's, there's where you lay out. Okay, how am I going to do the next quarter better in terms of works off and life?
Brad Giles 14:22
Very good. So the first one, gonna walk us through them the first
Kevin Lawrence 14:28
one biggest achievements, but breaking down under might be some overlap. And that's okay, but what were your biggest achievements? Let's start with the good stuff. Let's start with the stuff you feel good about and proud about and where you won. Because the whole idea is to be able to have more things that do work out and or feel good, but you achieve it or you end up feeling good about it or proud about it, man. So it's not rocket science. So what were your biggest achievements in those three areas
Brad Giles 14:56
and this is something that we do it annual, annual and quarterly Planning as well, we look back and we say, where do we win? Where do we lose? It's kind of like the scoreboard for the last period. just reflecting on that before we move on.
Kevin Lawrence 15:12
Yeah, exactly. It's not rocket science. Yeah. And then the second thing is, is, you know, what were the biggest challenges or disappointments, right? Like, what, what didn't work or didn't get done? Like, you know what? And you're acknowledging this stuff, and then looking at it, and then you can sort of go in some way. Why? Like, what was the deal there? Why was that? And there's, there's learning that comes from that. And whether it's about recalibrating your goals, or what not to do next time, whatever it happens to be, but you know, what, you know, where Didn't you win?
Brad Giles 15:44
Yeah, and there's always some way and that's okay. You know, I think it was Bill Gates that said, success is a lousy teacher. Exactly. And so the disappointments, the failures, that's the opportunity to learn and grow and, and acknowledging that thinking about that
Kevin Lawrence 16:04
is important. It is. So next is passion ratios. And when I look at, it's like, if we have 100 units of our best energy every week, how do we allocate our best energy, not just our time, because, look, you know, I remember times when I would use up and be cooked from work, I could show up and spend time with my kids. But they were getting, you know, a C grade quality, they weren't getting the a grade, Kevin, they were getting what was leftover, and there was not much left in the tank or when I was jet lagged. So it's about your best energy and how much of it you dedicate. And there may or may not be a relationship of time on this, but you know, how much your energy Did you invest each quarter your best energy and work self in life. And then in hindsight, hindsight, always easier, you know, what would have been ideal? Like, you know, if you, you know, if you did 80 to work and 10 to self intend to life, you know, maybe you go well, you know, truly, probably 65 to work, you know, 15 to self and 22 life, right? I'm making up numbers. Yeah, yeah, but it or, or maybe it was perfect, but it's, it helps you to recalibrate your location. And this is where a lot of us get messed up. And the magic, and then we talk about this a lot with executives is, is to still be able to dedicate a lot of time and energy to work, and have more time and more energy somehow. And by freeing up unproductive stuff, which we'll talk about in a future episode. But you know, to be able to still have so dedicated lot to work and a lot to life and a lot to yourself, you get a clear bandwidth out of the system we'll talk about later,
Brad Giles 17:44
you got to clear bandwidth out of the system. And a great analogy that someone said to me, many, many years ago is think about an Olympic swimmer, they just glide through the water, there's very little splash, and then going at such a fast pace. Whereas when I swim, it's more like question of is the person drowning? is a person moving? And what kind of a stroke? Is that? Are they doing any type of stroke? Or is it more splashing? Now? lets you know I can swim several kilometers in laps, so there's a bit of facetiousness in that, but yeah, the point that I make is in as a metaphor in terms of our work by distilling the time or or or putting a constraint on the time, it forces us to be more effective.
Kevin Lawrence 18:39
Yep, it does. That's the idea. And then the final thing is, is what do you need to start or stop doing to be on track for your annual goals? because ideally, you're recalibrating back to what you wanted to achieve this year, which would be in the other document called the master plan, where you have your long term goals. And then and then right down to your annual so just recalibrate with what you've decided you want to do this year is a reflection. So I'll throw the page back up on screen for those that want to see it. Pretty straightforward. So achievements, challenges or disappointments, passion ratios, what did you invest? What would have been ideal so you can kind of prep your thinking for next quarter? And then what do you have to start or stop doing to deliver on your annual goals?
Brad Giles 19:19
And so for each of those questions you've just mentioned for clarity, you need to answer three points your work yourself. The other one I can't remember your life. Thank you. Yes. Yeah. So so your biggest disappointments, your answering three questions if you have the video? Yeah,
Kevin Lawrence 19:38
exactly. There's a call. It's just three columns. Yeah, a bunch of questions going across three columns. Great way to describe it. So that is the okay. I've done a bit now you can think about other things. But that is a basic reflection. And you go back and look at your goals and then very simply throw us back on screen again for a second. You're trying to fill these top two boxes, which is for work, self and life how, what is those passion ratios? How much of your best passion? Do you? What are your passion, your best energy? Do you want to allocate this quarter? You know, for me, I'm coming into summer, where I take a bunch of time off. So there's much more for self and life coming up in this coming quarter for me. And then your number one and only your number one project or goal in each area, one for work, one for self, and one for life. And then I'm below there's a spot for other projects, right, other things that you might want to do. But the idea is, what's the number one that must be delivered no matter what? bless it, pardon me?
Brad Giles 20:44
No problem. And so that, so that's really thinking, What's the most it's a prioritization exercise. And it's a prioritization tool that should become a habit or is good to become a habit. And that's why we're saying now at the end of June, because if you could go through that simple tool, it's probably going to significantly positively impact your next quarter. Ken, can you just tell us about toads? Quickly?
Kevin Lawrence 21:17
Yes. And there's a whole chapter on it in the book, it's loose ends. And there's a whole story you can read in a book, I will not do it right now. But it's basically irritating little things that you try to ignore, but they haven't got done. And they distract you. And they burden you. And so it's basically lingering things that may have a low financial value, but they have a mental drain on you. So for example, I worked with a guy in the automotive business, his name was art. And every day after work, he was a mechanic, he would come over to the air pump and he would pump up the air in his tire. I'm like, art, you know, I you got a flat tire. Why don't you fix it? He goes, it's only flat on the bottom. Like, and he was like he laughed, he put the earnest irony went on. And on the point of it is he spent a lot of energy putting air into the tire every single day and maybe thinking about it, or maybe he didn't care. I don't know. But it puts a mental toll on you and wastes energy. And sometimes it'll be like updating a will or returning a book or saying thank you. Oh, shoot, I gotta send a thank you one second here. I'm just I'm remembering it as I'm speaking. I got to thank some people from stuff this weekend. But it's these things that weigh on your mind. And you keep thinking about it. And you're just not getting to it. Because there's an internal tension in it. And your spirit is fried when you get them done.
Brad Giles 22:53
Yeah, yeah. Okay. And then,
Kevin Lawrence 22:57
and then we have a habit to start having to stop if you were going to do that. And then finally, the last piece is what are you okay, this is great to have some goals for the quarter. How are you gonna? What are you going to do about it this week to get a jump started? And to get it going? Like, what are some little steps you can take to get the ball rolling?
Brad Giles 23:13
Yeah, 92% of plans fail due to poor execution. So it's good to have the plan. But then you got to start acting on it. And so then what can you do in the next week to get something moving?
Kevin Lawrence 23:25
Exactly. And it's very straightforward. So the essences in three different columns for work self in life reflect, hey, what went well? What didn't? How to allocate my energy? How would allocate it differently? What do I got to start or stop doing to hit my annual goals? Nice. Okay. Now let's what's the thing that matters most next quarter, and ideally getting that number one in each, and to be able to do it within the energy you've allocated to that category. And if you say that you're going to run an Iron Man, and learn to guitar and take 14 weeks off, and there's only 13 weeks of the quarter and, and the Iron Man is going to take 10 hours a week and a guitar is going to take four and a half three kids, it's like you got to really think about Anyway, you know, you're gonna need 90% of your energy if that was your goal. Yeah. But if you got to dedicate 90 to work, you just, it's just a it's a test to make sure you're setting it up, right. Yeah, setting yourself up to win and make progress.
Brad Giles 24:30
Very good. So as it's your book, do you want to give us a summary of these key points again, in terms of reset?
Kevin Lawrence 24:37
Yeah, exactly. So number one, very straightforward, you know, is the essence you got to reflect on how you did personally, professionally and in your life. And you shouldn't be looking at all three because that's the only way you win. The only way you win in the world is if you achieve in all of those areas sustainably. reflection on the achievements, challenges or disappointments, energy allocation, how to do what we do. better start or stop to hit your annual goals? And then going forward, how much energy Do you allocate each of those three categories works off in life. single most important thing in each and ideally stop there. That's the high level of what you need. You might have a couple of other things you want to do in each and then totes clear up the loose ends get the stuff that you've been procrastinating and putting off just get it out of the way. And then Okay, what are a whole bunch of little steps we can take this week, really straightforward. The key, you got to carve out half an hour to do the process that's really about it. And ideally with some sort of a thought partner. That's what I recommend.
Brad Giles 25:41
Awesome. Okay. Good, quick, impactful episode. Hopefully, identifying it's time to reset. It's the end of the quarter. Here's a simple tool that you can use. Okay, do you want to take us out Kevin? Yeah. Thanks
Kevin Lawrence 25:56
for listening, everyone. This has been the growth whispers podcast with Brad Giles and Kevin Lawrence. I'm Kevin. My partner. Here's Brad. For the video version. Go to youtube.com search the growth whispers for Brad evolution. partners.com.au and for myself, Lawrence and co.com. Have a great week.
Podcast Episode 63 - How to Escape the Mediocre Middle
IN THIS EPISODE:
This week on the Growth Whisperers, we’re digging into Part 2 of the discussion about the plan for your business.
Are you planning to keep your company or are you planning to sell it? Or, if you don’t have a plan either way, are you stuck in what we call the mediocre middle?
That is, you’re not working towards positioning your company for sale, and you’re not planning on how to build for the long term. As a result, you and your company end up suffering the consequences of inaction living in this middle ground.
And you’re not doing it consciously. You’re busy running your business and that takes a lot of time. And sometimes leaders don’t even realize that they need to make the strategic commitment to either selling or keeping their business.
We really challenge you to make a decision. Choose to sell and march in that direction. Or plan on keeping your business for 20, 30, 40 years – and make different sets of decisions. Just don’t choose to float around.
This week in part 2 of 2 we discuss how to escape the mediocre middle and provide the tools to help you understand where you are on the time horizon and the things you will need to do to your business in order to endure.
SUBSCRIBE TO THE GROWTH WHISPERERS:
EPISODE TRANSCRIPT
Please note that this episode was transcribed using an AI application and may not be 100% grammatically correct – but it will still allow you to scan the episode for key content.
Brad Giles 00:13
Hi there, welcome to the growth Whisperer is where everything we talk about is building enduring great companies. And especially so this week we always do. But now a little bit more. So this week we're talking about part two of a two part episode on building great, enduring great companies. Oh, get it out. Get a Kevin, I hope you're able to get some words out this morning. I'll try. I'll do my best, Brad. Good. How are you today, my friend,
Kevin Lawrence 00:42
I'm doing good. As always looking forward to our episode. I mean, for the listeners and the viewers to know like we, we really have a lot of fun preparing for these and kind of, you know, smashing our brains together around different concepts. And you'll, I'm usually quite pleased with what we come up with. And, you know, and what's coming out of today. And the previous episode is some stuff on as we're working on some new creative work together with the output of a brainstorm. And one thing led to another thing led to for us some really powerful thinking, and I'm really excited about sharing it. So yeah, I'm looking forward to the show today.
Brad Giles 01:21
Awesome. So we're going to begin as we always do with Word of the Day, word of the day. So we encourage people to start meetings with a word or phrase, just to kind of lighten things up, set the tone, get an understanding of where one is at. And for you, what might be your word of the day or phrase.
Brad Giles 01:40
Yeah, my phrase, my word, I'd say it's just his relationships. And, and just the value and I am recently so insanely grateful for the relationships that I have. Now, at the end of the day, you know, you can have stuff, you can have money, you can have all kinds of things. But at the end of the day, the people that you get to spend time with are what really make it all worthwhile. And if I look back over the past week, and think about relationships, and new and spending some time with some good friends, some time with my son, some quality time with my daughter, and just the people that I'm surrounded by, and the quality of the relationships is the quality of my life, I guess is the way I would somebody. So maybe the phrase is my word became a phrase, Brad, the quality of your relationships is the quality of your life. And I have an abundance of amazing people that I'm fortunate enough to call friends. You know, really, really good friends. And we're there for each other and taking care of each other. So yeah, that would be it. The quality of your relationships is the quality of your life.
Brad Giles 02:55
Well, that's lovely mine, you know, that is lovely. It just warms my heart and mine comes here it comes incredibly cold compared to that one. And it's one that you and I had spoken about recently, but it's really been playing on my mind. And that is that. If it is not a law of nature, it's an opinion. It's not a law of nature, it's an opinion, so many people, so many people have so many things that they sprout is being facts. But it's probably just an opinion. So gravity, for example, is probably a law of nature, it's very hard to say that's an opinion. yet. At the other end of the spectrum, there are some things that people say, which are in actual fact really just their opinion, but they're making them sound like facts. So I heard that from a guy called Shane Parrish who I kind of have listened to for a while and like the way that he thinks, and yeah, it just really resonated with me. And so that's my phrase of the week.
Kevin Lawrence 04:13
I love that. So for the people that think the world is flat, they would say that it's not an they must be able to say it's not a law of nature, therefore it must be an opinion that the world is round, and that the world could be flat. I can I'm kind of sure it's kind of think it's a law of nature, isn't it broad, but the world is round.
Brad Giles 04:39
I cannot believe that you rise that because that there was a seed that I was thinking about in relation to today's topic, like in the previous days, and that is if you go high enough above the earth, you can see the curvature of the earth and it's Same, huh? Yes.
Brad Giles 05:03
If you get enough perspective, you can see the truth. Yes. But if you're right on the ground and you're too close to it, you can't see past the end of your own nose, and you can't really get the perspective.
Brad Giles 05:16
Yeah. So, yeah, flat earthers. You know, they just don't look for the science, they look for things that validate their opinion. And that's not, you know, necessarily it. Yeah, it's not a law of nature, it's an opinion. And lots of people's opinions. You know, quite accurate. others not so much. So. So
Brad Giles 05:45
My phrase of the day, the quality of your life, is the quality of relationships is the quality of your life. Is that a law of nature? Or is that an opinion?
Brad Giles 05:55
That's an opinion, you know, it is? Well,
Brad Giles 05:58
but if you look at a look in the animal kingdom, the relationships that you have in some with the some of these pack animals, is their strength and their ability to hunt. And their ability to eat, like, I'm just you know, is that the quality of their life, the quality of their relationships, because if you take a pack hunting animal,
Brad Giles 06:20
you know, like wolves, they rely on each other,
Brad Giles 06:23
they do the quality of their relationships probably is the quality or the even the length of their life. I'm sure we get what we get. We could spin this any way you want. But I actually wonder if it's a law of nature, or if it's an opinion, I mean, it is an opinion I have. But I wonder if it's a law of nature. For you. I'm a killer whale. I just saw, by the way, as I was sitting here today on the phone with a friend, and I was looking out. And they and I said, there's a whale, they actually thought I called them a whale, which was not weather, which was a miscommunication on the phone was a whole other conversation. But I saw the whale out the window, and it was blowing when the whales come up to the surface, and they blow or they blow air out and make a thing that shoots up in the air. And I don't know why I'm talking about whales. What was it got me there I
Brad Giles 07:13
was law of nature,
Brad Giles 07:17
So killer whales are also pack animals that hunt together and rely on each other. So is the quality of their relationships. We don't need to go down that road. That's not what the show is about. But I wonder if that could be considered a law of nature?
Brad Giles 07:34
Yeah, and I know. It's an interesting concept. And I couldn't convince
Brad Giles 07:40
you, I could go find some flat earthers and figure out how they make their arguments for things that may not be and then I can probably find a way to convince Well, we don't need to go there.
Brad Giles 07:49
We do not. So this is part two of two. This is the second episode, there is a first episode, if you're listening to this episode, I'd probably recommend that you listen to the first episode before the second episode may make a bit more sense today. Correct. So today, in part two, we're going back to the same question, are you planning to sell or you're planning to keep your business? Or are you in this painful place called the mediocre middle, which we talked about a lot in the previous show? And really what we were talking about in a previous show, a real quick summary for you is that, you know, the no plan is great for vacation, sometimes, sometimes not always, or Sunday afternoons. But it doesn't really work for business. And, you know, the avoidance of plan or freedom from plans doesn't give you freedom, it actually gives you more pain. And you know, having a strategic plan, and having a shareholder plan for what you're going to do with this business for the long term, which in many ways would influence Partition Plan? And then really, how do you know you're in that mediocre middle and the root of it is, you tolerate a lot of stuff, you might not even think about it, you may not be even thinking about the difference between you know, if I was to build this business for 30 years, or flip it in three,
Brad Giles 09:06
but no matter what the business is probably draining you in a bunch of ways. And that that would be a root symptom. And you know, the phrase that we've kind of talked about, is it, you know, are you having to endure your business? Or is your business giving you endurance? And as a sort of a distinction? That's what we talked about in this last show. So today, in our show, we're talking Well,
Brad Giles 09:28
how do you get past that if you happen to be in that mediocre middle? How do you either get to the point where we would, you know, ideally recommend you try to get to it's the ideal place to be is building it to keep it for a long term. If you've built an amazing asset that produces value and purpose and cash, why would you get rid of it? Although if you choose to exit in the short term, you know, that's another choice. And you know, you could make that too. So we're gonna get more into some of the How to around it. Anything you'd add to that there, Brad? Yeah, I just want to reinforce concept from last week very quickly. And that is, if you own a business, you are either building it to sell it, you are building it, to keep it or let me reinforce that you have a plan to sell it, you have a plan to keep it. Or the third point is you are stuck in the mediocre middle. And so many people are stuck in the mediocre middle. Last week, we spoke about the what and this week, it's really about how do you understand and how do you? What do you do about that? So yeah, let's, let's jump into it. So like we spoke about not a few moments ago, if the higher that you go up, the greater perspective you get, you can begin to see further and eventually you can see that the earth is curved. So it's about the time horizons, if all of the thinking that you're doing is on a really short term basis, like, you know, at this point in the year, kind of middle of the year, I just want to get through to, you know, the end of 2021. That's all I want to do. That's all I'm focused on. If you've got that short term horizon, you're kind of at one or 2000 feet, you can't see that far. And you can't think that far. But if you go up higher, higher, higher, again, you can see a lot further away. And you can think beyond the next year, but on the next quarter on the next year beyond the next few years. And you can begin to get different perspectives. And going back to what you said, Are you enduring your business? Or are you building endurance into your business or something like that? That's really what we're saying is that if you have to work with your business, like we said in the last episode, for 20 years, if you waited to that business for 20 years, wouldn't you build the business that you really want to?
Kevin Lawrence 11:57
Exactly. And so to help us today, the starting point, is to really look at this look at your business through time horizons are, as Brad talked about, you know, almost zooming out to see it in perspective. And really, there's two different tracks, you can look at it, if you want to look at it from an economic point of view, looking at your business through the next market cycle. So right now, for example, in many economies in the world, we're at a high point in an economic cycle, massive growth, like in Canada, things are incredible for most businesses, where the owner we call the economy's very frothy, there's just all it's just booming, all time highs and lots of things, lots of our clients like record profits, it's incredible, considering we're coming out of a pandemic. And so, you know, when when the cycles after a period of boom, there's a softening at some point. And then there'll be another boom, and then a softening. So if we're at a peak or approaching a peak, you never know, it would be looking through the next trough to the next peak and really thinking about that. And generally, that's at least a decade into the future, but really thinking about, okay, what do we have to do through the trough to then better capitalize on the next peak, the second that some family businesses kind of might look at, they might look at it that way or another way is looking at the next generation of leadership and whether it's family or not family business. But basically, the timeframe at which the CEO and executive team are completely replaced, ie 100% 80% of them are replaced. So we're working with a company action in Canada, it's been around more than 100 years. And we're working on helping them with succession for a CEO. And I think for a fall four or five of the key leaders in the athletes for and so so we're going to work with them on assessing internal candidates and helping them to make the right choices with some tools that we have to help them do that. But this is a three to five year project to get that right. But they're starting now because they're, you know, and for a while they've been thinking about when they have this next executive team. So whether it's next market cycle, or next CEO and executive team taking it through the next growth, the growth curve, you're really zooming out to think about that and getting well beyond the daily tactical or even even more, more, more typically what we call strategic decisions. Yeah. So if you zoomed out a little bit, a little bit more, a little bit more. You could imagine something that looks a bit like a sine wave. I don't know if you know what a sine wave is. But if you can imagine something that goes up and then hits a peak and then it goes down and then hits a trough and then it goes up again. So it's going up and down and up and down. A bit like a continual roller coaster. So in a conceptual model, that kind of what the economy does, it goes up and then it goes down. Or maybe that's what the industry does now, except for it's on a bit of a tilt. Because right, it goes to a new high generally, and then the low is a lower, low and the high as a higher high. So it's a bit of an angle. It's in many ways. It's kind of like a heart rate, monitor your heart rate when you're in the hospital, which, you know, I recently found out about, and you can see your heart, your heart, you know, they're checking your heartbeats, whatever going up and down. And except for they just put that on a slant as it grows.
Brad Giles 15:37
Yes. Yeah, that's right. So if you think back to, I don't know, 2006 2007, things were pretty hot, then you go back to about 2009 or 10, where the GFC, things were pretty not. And then what's happened since then is things have become hotter again. And eventually that will turn and things will go down. And so it's, we can't be very specific about the time horizon, but it's not quarterly. Right? And it's probably not nearly you're zooming out further than that, to think about the multi decade ups and downs at the beginning. And then kind of asking, well, where are we at? And you mentioned at the moment where, you know, things are hot, we're kind of on the up, if not the top? And then where's our industry? Relative to
Kevin Lawrence 16:28
got it, Brad, it's like, you know, it's, it's basically and we need a name for it, because it actually will have the name. Because there's tactical, which is like a year or so there's strategic, which is generally three to five years for most companies. And then there's almost cyclical, or something else like that cyclical would be different, where you're looking at that 10 to 15 year time horizon. And then Collins has the b hag. Yeah. And that's, that's like, Don't closer for most company, he says 10 to 30 years, but it's generally, you know, that's a 2030 year time horizon for a lot of the companies we work with. So it's this. It's almost Yeah, tactical, strategic, and then a cyclical point of view, and there's a better name for it.
Brad Giles 17:16
I think that's not bad. Let's that's it. It's Yeah, like, that's a good start. And maybe we'll, we'll keep that. But the point, the point is, so many people are caught up in the moment, right now, it's hot. And, and people are guided by often emotions, or sentiment. And if you can zoom out far enough, you can say to yourself, Well, you know, we're almost at the top, that means, at some point, things will begin to go down. And when things begin to go down in the economy, or the industry or, you know, our clients industry, or whatever it is, when things begin to go down, we will need to take a different set of actions, and we need to be prepared for those actions. And that's the reason that we're saying this talking about cyclical is endurance, because the only way that you can endure is if you can endure these cycles. If you could have you could build a fantastic company on the way up. But when things come down, if you're saddled with too much debt, and you can't service that debt, given the new operating environment, you're not going to endure.
Kevin Lawrence 18:32
No, because you're dealing with different forces. And as I was, as you were talking, I looked up cyclical. And I found another word reason was seasonal, right? You go through a season of growth, right? And a season of kind of plateaued in a season of decline. seasonals another word out, we'll get that word later. But you just need to be able to handle the different environments, even with it. And this is it. Your strategy is excellent. But then it's almost on a different axis where you're looking at the different environments. And what can you do today? Because right now in the economy, there's a lot of people like caution, Canada, I mean, we haven't really had a notable slowdown. Close to 20 years, we had a little blip in Oh, seven away, but Canada didn't get affected that much. So first, a lot of people if you've been in business for 19 years, it's like, you know, like people think the world's flat you think the world is growth? Yeah, like you don't know you actually haven't experienced any different. But what we're talking about is knowing that things are cyclical, and that you need to see to the other side of the next cycle. That's it. So if it's been almost pure growth for 20 year, close, close, knowing that it's going to do this and then it'll know it's going to dip and then it'll go back up again for those who can't see my hand moving on the screen.
Brad Giles 19:59
So It's being aware of it and planning for it and then looking at your business through its ability to endure that and come out stronger versus blind positivity.
Brad Giles 20:12
There's a famous investor, by the name of Bill Ackman. And I heard bill speaking maybe two weeks ago, maybe three. And he, he said he was talking about inflation. So the hot thing at the moment is inflation. People are talking about, you know, lumbers up 100% Steel's up this much, and so forth, so forth. And that's the other thing that we're seeing is a shortage of workers, certainly where I am and in other areas as well, here here as well. Yeah. And so when there's a shortage of workers, often that drives wages up, and the thing that bill's said, when they said is, is transitional, or is it permanent? And what that means is, is this just for the pandemic, and like, we just, it's, it's all the stimulus money that's making this problem? And he said, here's the thing, it's very hard to take away a pay rise. Yes. And, and so that's, that's where the inflation on the labor market comes from. And if, if you say we're going to pay more so that we can get enough workers like your where is the point where you go, Okay, now, we're going to come back to where we were, like, no one does it almost with wages in generally, it's very hard for it to go back out commodity prices can go up and down. Yeah. And we're having this discussion with a lot of companies right now. Brian? Yeah. Because getting workers in, for example, in some countries, like Canada and US immigration is required for a bunch of the labor pool like, right, yeah. Why are they here? Yeah, but but but with COVID, and a lot of the immigration halted, then there's less labor pool coming in. And so absolutely, conversations we're having in companies is that as wages are getting more expensive, you know, as you pay market, where the other current market wage for new people, well, sooner or later, you need to equalize it for existing people as well. So it's not just one person getting paid a higher amount. Over time, everyone at that level probably will have to in the whole, the whole thing moves up a notch, which drives the cost base of every company up? Yes, and prices have to go up to support that cost base. And so in the end, you know, the real money going to those employees actually isn't that much different? Because they get an increased pay. But then inflation goes up. So that almost takes them back to where they were in the whole system just moved up a notch, which is inflation, except when you're zoomed out and looking at this roller coaster, this cyclical this sine wave, yep. And whatever be the economy, or your industry or your clients, industry, and demand decreases for your product, and you've got these established higher wages. What are you going to do about it? This is about building an enduring great business. What are how are you going to deal with that you may have no choice but to put those wages up. But if you're thinking about the fact that that will eventually go down, and you will have these new higher costs. Yeah. That is how you will do right.
Brad Giles 23:27
Yes. And exactly. And again, it's zooming out to see what's really going on, which takes time.
Brad Giles 23:33
Yeah, and I need and there's a lot of variables to understand this. So. So if you go back and look at this, really, it's, it's about zooming out and looking beyond, you know, beyond to the next cycle, which is that be that cyclical thinking, not just strategic, or that next generation of leadership, but it's a longer term, standing farther into the future, and thinking about all the things we're doing today, and how it's gonna impact us 10 years down the road. And so you need the certain right group of people looking at this, and you need the right questions or the right conversations to do it. And most people, as we talked about in the last show are so caught up in shorter term thinking, which is excellent for running the business. Right, you need to when you're tactical and execution, you got to be thinking shorter term, but someone, ideally is thinking about the strategic timeframe, three to five years, and the cyclical timeframe of probably 10 to 15 years. So I've got two questions for you, Kevin. Question number one, when will be the top of the market? And question number two, when will it go down?
Brad Giles 24:42
Absolutely. What I can tell you is that the day that we hit the peak, I'll probably be able to tell you the week after. So whenever it happens soon thereafter, we'll probably know. And then and then and how much it goes down and everything else. I will absolutely be able to tell you, in hindsight, because we have no freaking idea. No, no, but I can remember one time I was sitting in the Middle East. And we had brought in these economists to help us get a sense of what was going to happen with currencies. And I sat there with their best abilities and their most confident opinions, to predict currencies and where they were going to go. And as someone said, at the end of the meeting, and respectfully, these were very well educated, they were doing their best they said, of economists could accurately predict any of that they would be the richest men and women in the world. And they're not, because it's impossible to call
Brad Giles 25:49
white for it. Are you ready? I'm here, we can't predict the top. And we can't predict when it will go down. But it's a law of nature, that it will, it will, it's a law of nature, this is
Brad Giles 26:07
beautiful, Brad, but it's true. It is we know that it will go down, no idea what happens or why. And you can trace back sometimes, but it will go down. And then it will generally go back up again. That's that is what it's done for how many years? Yeah, and that's why even when we get to some of the things that you need to do, that's why this thing called a balance sheet is really important. Because your balance sheet needs to work when it goes up. And knowing that it goes down your balance sheet, you know, needs to be able to endure that. And it's like your boat needs to be able to endure Big Stone storms, storms, if
Brad Giles 26:49
you're in the ocean. And if you're in the mediocre middle, right, you're not planning to sell and you're not planning to keep. If you're in the mediocre middle, you're not conscious of the fact that it will go down and you're not preparing for that. quite likely. And some people in the mediocre middle are really conservative, and they might have you know, a whole bunch of cash in the bank or not have a lot of who knows. But the point of it is it's being conscious of that fact that it will go up and down. And what are you doing to thrive during that not hold on by the end of your fingernails? So time horizons is the piece that we're talking about. And really what we want to share with people today
Brad Giles 27:34
is is that, you know, if if you know that the cycle is gonna change recurrent cycles. So if you're in a boom cycle, like we are in Canada and Australia, in the US and other countries, let's just because we know it's gonna go down. We know that. And as Brad has identified, we don't know when, but we know it's going to go down that is a law of nature. And so far a law of economics or principle of economics.
Brad Giles 28:03
What if knowing that the economy will go down and it will know it'll hurt some? What is the one thing in your business you should be tweaking now or, or bulletproofing, or to future proof your business for this next economic slump? And whether it's two months or 24 months or 42 years? I don't know, I have no idea what you generally based on history won't be 42 years. But what is the thing that you know, you need to just take a second right now and think about it, knowing the economy will slow down some amount at some point. In the nearer, nearer future, what's the thing you need to do to better position yourself to do very well when it slows down? So here's an example is a guy called jack stack, wrote a book called The Great game of business was famous for buying a company called srg. holdings, I think from international. Thank you. Yes, SRC holdings from International Harvester I think it was. And because the company was basically losing money and was going to go out of business, turned it around. And subsequently, I think he built 60 companies greater than $50 million. Like he's no slouch in this area. In any case, so jack takes this view, the enduring great long term view and what jack and his team do is they say on the up with accumulating cash, so they're on the down, we can buy assets. And I remember when I met jack in the US, and he told us the story, and I don't think it's out of school. I can say it, he said it was something like they were buying land at $2,000 a square foot, when in the upswing, it was like $15,000 a square foot or something like that. probably heard
Brad Giles 30:00
of them. I've heard him tell that story. But basically, yeah, they were picking it up for next door to free. Yeah. During the downtime when things are when there's distressed assets on the market?
Brad Giles 30:11
Yes, yeah. So if there is a down coming downtown coming, at some point, do you have the balance sheet to be able to weather the storm a, and then be able to pick up distressed assets that will make a meaningful difference on the next upturn. Because they will just like it's gonna go down, it's gonna go up. Yeah, and it always does. And you know, that when it goes down, there's a lot of interesting a lot of people they get hurt in that process. And because, you know, they don't have the cash to finish. So a lot of, you know, real estate and things like that kind of get hurt in that process with a delay. Interesting that when companies start to grow, it's not as widely known, but more of a fact is, is that when the economy starts to grow, again, more companies go bankrupt, because on the way down, people's cash flow improves for a period of time, because they're carrying less inventory in or catching all those receivables are coming in, and the previous month sales have been higher than the current month sales. So generally, if they do it, right. Most companies can do okay, in an initial downturn. Now, after a long time, it hurts. But when it cranks back up, again, people getting cash crunches. Because if they if it picks up too fast, they can't cash flow, the growth, which is a whole other piece that jack talks about a lot as well. So. So basically, you got to be prepared to win no matter what cycle you're in and looking at the next cycle is an incredible way to endure. And it's a great way to pressure test your company. Yes, it might be working great today. But is it gonna work great when the company when the economy is slipping? Yeah, and going down, right when there's a contraction. So so we'll want to do is want to kind of take a look and give you a sense of thinking where you're ill when things go down, whether it's the economy overall, it could be something in your industry, because you know, there can be there's the macro economy. And then there's industries within economy like oil and gas right now is has been for a while a little slower, even though while the general economy is a macro has been doing quite well. So we've got nine, nine different principles we've shared in previous podcasts that we talk about, about building an enduring, great company. And I think we're going to take a look and take a look at some of those. Hey, Brad, is that the plan? Yeah, that's right. So based on where your industry is at, based on where the economy is at, based on where your customers industry is at, that's the kind of framing that we're beginning within them. We're saying, think about these nine principles to build an enduring great business. And then ask yourself, so where is that? And do I need to do any work around that? So the first point, of course, is strong culture and behaviors. That's the first principle. And so where you were at in terms of this cyclical movement at 100,000 feet that we've discussed yours? Do you have a strong culture and behaviors that can withstand the way up or the way down? or whatever's coming?
Brad Giles 33:16
Yes. So if the economy or your industry continues to boom for another five years, is your culture or your culture and behavior strong enough to hold it together and sustain that growth? Or if there's a decline, or your culture and behavior strong enough to face a reversal in the economy? And where things are going the other direction? And that's the question, and what might you need to dial in? In either scenario around your culture and your behaviors?
Brad Giles 33:48
Yeah, yeah. And so importantly, before we move on to number two, we spoke about the example of jack stack buying land cheap, but that was shoring up their balance sheet, or that was utilizing the balance sheet the best way, these are all of the nine things that you've got to consider moving on to number two, a long term vision. So when things are going south, when your revenues are perhaps dropping, declining or staying stagnant or not growing at the rate they used to, do you have a compelling long term vision that's going to ensure that people stick around and know what they're working on.
Kevin Lawrence 34:29
Yeah, and it gives people that EU North North Star that Southern Cross to be able to focus on and to stay thinking about as they go through it, because they know there's something great on the other side, they're just going through a transitional phase. But is that vision compelling enough for what you want to do, by the way, and this is we're talking in context, if you want to enduring keep this business for the long time. But Heck, even if there's a downturn and you're planning to sell, you might have to hold on to the business a bit longer, and having that same time vision for people to focus on is is critical. And a lot of times you find with companies, they have a vision, when it gets lost, it's not front and center like a big magnet pulling it forward. So that's the second one long term vision, it will do well, if you continue to boom for the next three to five years, or will it do well, if we go into a stage of decline, whether it's in your industry or the economy overall, the third, and again, this is a great one to pressure test both sides of the coin continued growth or slowdown, and is your strategy that gives you a sustained competitive advantage. You know, if we continue to boom for three or four or five years, well, you're configured a competitive advantage still be strong business still give you a notable advantage. And a competitive advantage means you have a better ability than average to secure the work you want or sales that you want, at the margins that you want, and don't have to give up margin to get business. So ideally, your mark, your gross margin is stable, and if not, if not growing. And the same thing, if there's a decline, does that advantage actually work in a decline? Maybe your competitive advantages, it only works in a boom time, maybe that doesn't work if the market goes the other way.
Brad Giles 36:13
I had that exact same situation with one of the clients that I work with. And it was an amazing advantage on the way up and at the top. And even a little bit as we started to decline. But you know, in their industry, we've just had four or five years at the bottom, just bouncing along the bottom. And people in the industry would say, this is the worst we've seen in our whole life, like, you know, even the old time and say, it's never been this bad. And it was like that for four or five years. And it didn't work. And so we just had to, because the competitive advantage wasn't strong enough to sustain through those down times. And we couldn't evolve it during the downtime. All we could do was keep cutting to try to keep the business going. We did successfully. And now of course it's on the way up and it's going gangbusters. But the strategy that delivers a sustained competitive advantage should be able to endure through up and down of the cycle.
Kevin Lawrence 37:16
Yep, absolutely, absolutely. And it was interesting as a client that I was thinking of, as you're saying that, that Brad, and I'll save that one for the next one. So that's a competitive advantage. It's absolutely critical that it works, you know, and or maybe you have an alternate version of it if the market shifts to the other direction. And that whole idea of this is zooming out and thinking of the long term and not keeping a rose-colored glasses on all of the time, can we actually flip to a different strategy or, or tweak our strategy to be relevant in a different market? governance, you know, you've got governance and the way that you run your business and governance so that things run properly, whether it's how decisions are made or authority is done. And the question is, you know, is your governance working if the economy continues to boom? And still, as I said, or if we slip into another market cycle? Is your governance? Does it have the speed? Does it have the safeguards? Does it have the risk management in it to help handle a different type of environment? Again, most gun companies in the last 20 years have been in North American market have seen a fairly stable growth and not had to think about a down market. So is your current what might need to change your honor governance to be able to, to weather that storm? Yeah, and so that, that's relative to the size of your company, you're going to five or a $10 million company governance is not something that needs to be completely ignored, as opposed to say, a $250 million company where it may become more important. But it's still a consideration, if you like, if you would like to endure for the long term governance has to be a part of what you do. I have a team that I work with, not that larger business kind of 10 or $15 million, and they get one of the big four accounting firms to audit their numbers every single year. Now, that's because they're, they're planning to keep not because they're planning to sell. Because you might say, oh, they're doing that. So they've got strong long term books so that they can No, no, no, they're doing that, because they're planning to cave. Am I recommending that you do that? Not necessarily. But that governance element is what works for them. It is and our larger clients, many of them have audits not and not because the bank requires it, because they just want to make sure everything is being done right because the shareholders are farther from the decision making and the cash and it's just a way to make sure the systems are tight and there's not any one weak systems but also opportunities for cash to go walking out. The door is Also interesting as some larger clients when we were getting about 100 million a year in revenue, but there's multiple partners. So when you have multiple partners, you often need to have defined ways that decisions are made and agreements. When times are good, unless you've got some greed, some with between the partners or or, or personal conflicts, people are generally good when things get a little bit tight. And there are things like cash calls and things like that partnerships can get strained. So it's like put the governance in good times, don't wait till the bad time to try and sort that stuff out. So the next one is execution systems to make sure the most important things or priorities are identified and completed. So, you know, if your execution systems are tight, they're tight. Execution systems can pivot pretty well in good times or bad. But it's just to make sure you have tight systems. And most importantly, that we find is that every quarter use, zoom out, and make sure the blinders aren't on. And you just don't execute the annual plan, because you said you were at the beginning of the year. Sometimes you have to take you know, notable turns midstream, you know, one of our clients that more, almost doubled their revenue, and more than doubled their EBITDA in the last year through the pandemic, which is incredible. And it's an amazing company. But it's incredible. But we were looking at every quarter like a year, like our we took our execution system in an incredible boom. And every quarter looked at everything clean slate, like an annual planning session, just to make sure and now that some things are changing for them in the economy, and it might decline, we're gonna do the same thing. Again, just tweaking the execution system because of the different cycle. This state that I live in Western Australia, we have 10% of the Australian population, yet we contribute 30% GDP. Okay. And yeah, so really, yeah. And we're 1/3 of the geography, geography, geographic country landmass? Okay, so the state economy is an extreme boom, bust, we're either in an extreme boom, where it's a struggle to find people, or we're in an extreme bust. And because it's mining based, it's ultimately sounding sounds like our province, which used to be primarily resource. it's changed in the last 20 years, but used to be primarily a resource base. And it was like,
Brad Giles 42:36
yeah, we'd love to get some tips from you on how to move away from that. But you know, we're like the Silicon Valley of mining and resources here. Yes. So it's extreme. And what we've learned is that you can, many companies lose money on the way up, and they lose money on the way down. Okay. So poor execution can occur on the way up, because it's a desperate scramble. And these execution systems get dropped or lost, because we're so busy trying to execute the big projects that we're getting, or the big things that we're doing and chasing all of that growth. So that's not that's specifically not working capital requirements. That's not growth sucks catch. That's just bad execution on the way up and bad execute on the way down because everyone's busy. So
Brad Giles 43:27
and sometimes they're executing, knowing and thinking that they get cleaned up as they go forward, they're kind of pushing the problems ahead.
Brad Giles 43:34
Yeah, at the moment, I'm dealing a lot with those kind of problems. So knowing that you need to have the execution systems, and the priorities identified on the way up and on the way down, and it may be different. So let's move on to number five, you've got to ensure that you've got the data to make the right decisions. If you want to build an enduring great company, people who are managers, their job is to make decisions not to collect data, like you know, people who are going out to collect leaves in the forest, their job is to receive the data that is provided to them and to make decisions. So where are we at six, in the cycle that we're talking about here? And the ups and the downs? Where is your industry at? Right? And what are the what's the data that everyone needs to make at this point in time.
Kevin Lawrence 44:25
And, and generally, a lot of times what happens for companies is when in a boom time is that they're focused on revenue, and they often neglect cost because there's so much revenue and growth happening. And the companies that we work with that have been through a few cycles, the they're a little wiser for it, or sometimes just the culture, but they tend to pay a lot more attention to costs. They watch the costs of the growth, and they don't assume that the growth will cover the costs and time so it'll be like watching overheads always and watching the SG and a expenses or the specific agenda overheads, another term overhead, but looking at the operational costs of the Minister of costs and keeping a handle on them, you know, of course your company needs another person or to an accounting team. But if you do mathematically, does it it is it warranted based on your industry, if accounting should be point 9% of revenue, and you're running at 1.2, you know, you may have another issue. So it's, you know, cost discipline and, and, and data to help you know, and again, so different, you might be looking for different data in a down market than an up market cost being an example, principles, seven, consistent profit generation and growth. So the whole idea is that the most enduring great companies consistently generate great profit and they keep tension around it. Now, it's not that they're afraid to reinvent, reinvest, they do reinvest, but they have a
Brad Giles 45:52
discipline around creating profitability, they have a skill around creating profitability, and one of the big ones is that they truly review whether it's weekly, you know, jack, SRC, in his book, regular business would have you be doing a weekly. But you know, for a lot of companies, they you know, they would, at minimum, do it monthly, but a full p&l review of every line item and making a handful of decisions to improve profitability, and the performance of the company based on the numbers of the month. Again, ideally, it's done weekly through KPIs and other things, or nsrc, even through the financial statements, but real discipline around profit, easy to get loose around it. And good times, like I talked about with the expense example. But but but even more discipline required to succeed without and challenging times.
Brad Giles 46:40
And then next, of course, balance sheet to endure the biggest storms, the biggest storm cyclically is what goes up must come down. It's a law of nature, if you will. And so how I knowing that these challenges are coming, knowing the stuff that we spoke about before, about if your wages are going up, okay, your revenue, or you know, the amount of demand that you've got may reduce over time, how are you going to withstand that storm that will eventually come so that you can endure?
Kevin Lawrence 47:18
Yeah, and you know, in boom time, sometimes we can get in shorter term thinking we can get seduced into thinking that things will continue as they are. And again, zooming out, what's the word chest, how do we set ourselves up to not only do you know, handle the storm, but to be able to capitalize on it, because now the storms shake, a lot of things loose, a lot of trees will fall over in the forests, a lot of opportunities open up. And if you're there with a strong balance sheet, or ideally, a stack of cash, a big mountain of cash, you can make some of your best moves ever. And finally, principle nine a people magnet machine to attract and develop future leaders. And you know, people make the difference tennis as the last one on our list could be the first you could argue, but it's critical is that you know, in the booming times, are you attracting and building the right people on your team? And then are you setting yourself up for the downtimes. So even it's is, it's as simple as that I'm just having a flexible workforce, or are outsourcing some parts of your business. So that if you do have to scale back, you don't have to lay people off, you just use less of an outsource service provider or, you know, one of our clients is in the business of providing short term employees to the medical industry. And and and it and when things slow down. They just use less of that service provider. And again, they're not you know, having to change the core team. There's many, many things around that people making the machine. But it's really what do you doing. So for example, right now, in a booming economy, lots of companies are doubling down on recruitment, because it's harder to get people, right. And you can either pay a lot more or invest more in recruiting, for example, we talked about that a little bit earlier. So what would you add to the people magnet machine
Brad Giles 49:09
probably two things. First of all, your employee promise your employee value proposition, and then the virtual bench. So first of all, the employee promise, so no matter where we are in the cycle at the bottom, at the top, in the middle, how are you building your employee promise your employee value proposition so that the top a players that a players in your industry are going to want to come to work with you? That's the people magnet machine and then secondly, how? How are you going to identify if you're, let's say we're at the top of the cycle, how are you going to identify who are the A players that are going to be out of work in two years, or their company's gonna go under.
49:59
Because if you are thinking to the next cycle? You want to know that some companies are going to take a dip? Yeah. And if you're strong and focused and run your business, well, some of that amazing talent might lose faith in the companies that they're in. And you might have an opportunity for yourself there.
Brad Giles 50:15
Yeah. So, again, when you zoom right out, and you can think cyclical, who are the top 10% of people in the whole industry? Do you know who they are? And are you tracking what's happening to their companies so that you can strategically target them to try to poach them from those competition?
Kevin Lawrence 50:36
Exactly. So that's the whole thinking of what do you need to do to look beyond the next market cycle, in all these different aspects of your business, as we went through those, some things would have popped into your mind, some different things that you might be able to do to set your business up, not only for that dip, if you're in a boom, but then the next boom to be notably stronger, and being ready for the next dip, and then the next boom and the next dip, and being able to thrive no matter what happens. So no quick kind of summary of the show. Again, this is part two of where you're planning to sell, or you're planning to keep your business or are you stuck in a mediocre middle, you know, in the mediocre middle, you're a passenger on this journey. And we do not want to be we don't want to be in the driver's seat, want to drive towards selling, or drive towards keeping this thing for 10, 20, 30, 40, 50 years. And, you know, we talked about in particular, looking at time horizons, and if you're going to be in this building, during company, you need to go from there's the tactical, you know, you're so strategic three to five years. And then there's cyclical, and then like 10 to 15 years that most cycles are. And then there's that vision, which is you know, 25 or 30 years down the road. But sometimes you got to be thinking about cyclical and a bunch of your decisions to make sure you're set up to thrive no matter what happens, and really encourage you to pick the thing you know, you need to do in more of a shorter version of what we're thinking. If the market were to change. And then a longer version, what do you need to do to ride that next wave or capitalize on the next boom? Anything else you'd add on there, Brad?
Brad Giles 52:18
No, I think that's, I think that's a good, that's a good cover. Really, what we're saying is, if you want to build an enduring, great business, you're either planning to sell or you're planning to keep if you if you aren't doing one of those two, then the third point is that you're stuck in the mediocre middle. If that's the case, and you want to understand how to move forward, you need to zoom right out. Think about the whole economy or the industry in a cyclical manner, and then begin to put yourself where you are against these nine principles of building enduring great company.
Kevin Lawrence 52:57
Yeah, awesome. So hey, thanks for listening. This has been the growth whispers podcast, with Brad Giles and Kevin Lawrence. For Brad you can go to evolution partners com.au, or for Kevin Lawrence and co.com. Or you can go to YouTube and just search for the growth whispers Hope you have a great week.
Podcast Episode 62 - Are You Planning to Sell or Keep Your Business? Or are You Stuck in the Mediocre Middle?
IN THIS EPISODE:
This week on the Growth Whisperers, we're talking about your plan for your business.
Are you planning to keep your company or are you planning to sell it? Or, if you don't have a plan either way, are you stuck in what we call the mediocre middle?
That is, you're not working towards positioning your company for sale, and you're not planning on how to build for the long term. As a result, you and your company end up suffering the consequences of inaction living in this middle ground.
And you're not doing it consciously. You're busy running your business and that takes a lot of time. And sometimes leaders don't even realize that they need to make the strategic commitment to either selling or keeping their business.
We really challenge you to make a decision. Choose to sell and march in that direction. Or plan on keeping your business for 20, 30, 40 years - and make different sets of decisions. Just don't choose to float around.
This week in part 1 of 2 we discuss what it means to be stuck in the mediocre middle and the cost that you pay for not having a plan either way.
SUBSCRIBE TO THE GROWTH WHISPERERS:
EPISODE TRANSCRIPT
Please note that this episode was transcribed using an AI application and may not be 100% grammatically correct – but it will still allow you to scan the episode for key content.
Kevin Lawrence 00:13
Welcome to the growth whispers podcast where everything Brad Giles and Kevin Lawrence, that's us. Everything we talk about is about building enduring great companies, something that we're very passionate about, versus non enduring crappy companies. It's not something we're passionate about, although we've, we've seen a few. I'm Kevin today. And you know, Brad, my co host is here today, Brad, how you doing?
Brad Giles 00:37
I am excellent today, top of the world. In fact, winter is almost upon us and things are good here. in a good spot, and you how you
Kevin Lawrence 00:49
funny I used to have a globe sitting there, I'd swear that you're on the bottom of the world and not the top. Not where you're located. I think you are you might be me. Maybe you're a little upside down today.
Brad Giles 01:00
And that's a northern hemisphere perspective. is yes. South does not mean down necessarily. It could mean towards the south
Kevin Lawrence 01:13
you think your Do you think you're on the bottom and we're gonna get a series is when you're from where you live on the globe? Do you think you're at the bottom of the globe? How do you see or is your globe only sell globes in Australia? Are they flipped around? So
Brad Giles 01:24
Australia's on top? Well, then not because they're made in the Northern Hemisphere.
Kevin Lawrence 01:30
Must I must be right.
Brad Giles 01:32
But if you saw a mere curators projection of the world, would you see North America in the middle or Europe in the middle? It depends on the perspective. Right? And it's that one, but that's very logical. Anyway, that's very interesting. I am glad you feel like you're on top of the world. Brad, that is great. So let's, what's the what's your word of the day?
Brad Giles 02:05
Where did the die so we like to start meetings with a word of the day and that's why we encourage people to do it. Mine isn't guard rails. guard rail, so working with a group of entrepreneurs last week, and we built a hedgehog. for them. It was just a small team. We work to build a hedgehog and so that they could think about a mountain at the top of the mountain is your B hag along the way is your three hag your one hag your you know, your one year, your three years and your 90 day plan. And so the hedgehog as you climb that mountain, provide you guard rails, you know, when you kind of driving through a curvy road up a mountain, they've got these rails on each side so that you don't accidentally crash and die off the side of the road. Well, I'm thinking about guardrails. So the hedgehog is the guardrails as you ascend the mountain that keeps you on track, so that you don't do things that shouldn't be doing. And what's yours, Kevin? Love it.
Kevin Lawrence 03:10
Well, interesting. Mine is inspired by an incident with a guardrail of sorts that I had I had a couple of days ago. But yeah, mine is patients. So I've mentioned a few times on the podcast, a passion for car racing and kart racing, which is a very fun and intense thing to get to do with a lot of my friends and their sons. And through an unfortunate event and a mistake that someone made, non maliciously, I had to avoid someone at a very high speed and collided with a guardrail of sorts, that made it very hard for bump when I hit it. So I spent the greater part of Friday in the hospital with great patience. And as someone who never sits still, and doesn't like to sit still, I had to sit for four hours before I saw the first doctor. And they did all kinds of tests, then you wait for the results and then do other stuff. And then they sent me to a another hospital to get another test. So all in all, I, you know, the whole process took about 11 or so hours. Thankfully, I was all good. So I got to go home. But it was actually great because I'm not patient by nature. And I but I am thrilled to have the opportunity to wait for good care, because they did all the right things. Another doctor, I talked with the track Africa did all the right tests, they double checked all the right things to make sure there wasn't any internal bleeding and all this other stuff. So I was very patient and I had no problem sitting and waiting because I wanted that expert help. And I got it and I am thrilled to have the opportunity to wait because I know in some parts of the world, you don't even have the opportunity to wait for proper health care, you know, and as much as we'd like things to be faster. So yeah, my is patience. And although it's tied into your it's a catalyst for it was a guardrail is just what is your word of the day? So, um, yes. And patience. Patience is a wonderful attribute for a non-patient person to have. Gratitude, deep gratitude. I'm really appreciative. The medical people that helped me Oh my gosh. Oh, wait any time that I need to forget hope.
Brad Giles 05:25
So you had patients hanging out with other good patient patients? Waiting for the doctor?
Kevin Lawrence 05:32
Yeah, yeah. And I gotta say, these doctors were awesome. They were so wonderful. They put me at ease. I mean, I think I'm not good with needles. And I had like four or five needles jabbed in me. And they were the they were so nice and gentle about anyways, good, fun. thrilled to have great health. So today, what are we talking about? Brad, we have, we've got a split episode. Today, we got two separate ones that we're doing. And you know, today is part one, and next week will be part two. So So tell us what's,
Brad Giles 06:00
what's the theme here to this super excited, super excited every single episode, we talk about building enduring great companies. But you know, what, why? Why are we talking about enduring great companies? Well, today, we're going to dig into that. And specifically, what we're asking is, are you planning to sell or planning to keep your business. And if you don't know, if you're planning to sell or planning to keep, maybe you're stuck in what we call the mediocre middle. So this is part one of two.
Kevin Lawrence 06:36
Yeah, and the mediocre middle is a place that we're going to give you some things to think about and encourage you to not be because the mediocre middle is also the painful middle, or the excruciating middle, the maddening middle, so we're gonna, we're gonna dig into that today. That's super important. Because, as you know, we bradon you know, you and I do a lot of discussion about working with enduring great companies and a majority of the companies we work with, you know, they're building their businesses to keep them for a long time. And to make them into amazing machines, and then some, you'll build them and they want to sell them. But they're both doing it with a distinct purpose, either to sell it for a great return in a few years, no handful of years, 357 years, two years, or, yeah, keep it for 357 decades. And often when we start working with companies, sometimes they haven't made up their mind yet, or they think they want to sell because they can't stand it. Or they think they want to keep it because they don't know what else to do. And so it's just a matter of sorting things out. So that's, that's what we're digging out to today. What camp Are you in? And let's just make sure you do it with a purpose. And I remember something my mom said to me many times as a kid and she say walk with a purpose. Right? Like if you're going somewhere go, you know, and versus just kind of wandering or lollygagging around, and I think we want to do the same thing, you know, like
Brad Giles 08:05
lollygagging never happens.
Kevin Lawrence 08:09
That would be something that we talked about on the top part of the world. It's It's just about you're wandering aimlessly floating around. Okay. Yeah. lollygagging that's a very I don't even I don't I gotta look up where that comes from. Check that in a minute. lollygagging so. So we got a couple of key things to talk about. But the first is that you know, it's it's tied into lollygagging, which again, I'm going to have to look that up. But it's, you know, the no plan. Like I love doing the no plan. Sometimes on a Sunday afternoon, I got free time. You know, it's beautiful. If you've got this adventure vacation, and you can just wander around and just see where it takes you. It's awesome thing to do. It's just not a great thing to do in business, going with the flow and wandering with wherever the winds kind of take you usually doesn't go so well. And if you don't have a real purpose and aren't really driven towards, you know, something, in this case, the something we're talking about is building it to keep it or building it to sell it. Yeah, it's it basically it's an excuse to have an undisciplined way to run your business.
Brad Giles 09:25
Yeah. Many people might say, well, we don't even we don't think about selling, but then that's it. There's, we're not thinking about selling but then it's just a void of emptiness beyond that. And then they say, Well, look, if someone came up with a huge check, we'd probably sell like, you know, if they wanted to give us a ridiculous amount of money we probably sell. But that's the kind of point of this episode is that having that is not necessarily good for you because that is what we call the mediocre middle So yeah, if you're going to, to be in the mediocre middle, there are some negative consequences that come with that. And so what we're doing is we're saying this is a spectrum between we're planning to sell, or we're planning to keep, if you're not one of the, if you're not at one of the ends of that spectrum, you are at risk of being in this mediocre middle that can produce mediocre results potentially, and can put you at a risk of not being able to endure. You know, it's a risk that you don't even know that is there.
Kevin Lawrence 10:40
Yeah, and you could be at risk of lollygagging which I looked up for us, Brad, thank you for that. lollygagging is to fool around and waste time. It's similar to the word Donal which is to spend time idly or move lackadaisically or to spend fruitlessly or lackadaisically No, no. So basically, you could be dawdling. You could be lollygagging. Or you could be having the time of your life. We're not saying you're doing something wrong, but we're just generally if you're if you're kind of stuck in a mediocre middle, it could hurt me like that, where the lollygagging is, this is gonna be your new favorite word, Brian.
Brad Giles 11:21
Yeah, welcome to the grammar whispers everything we talking about is building better grammar? Yes. No, it's not No, no, no, no, no. So let's go to houses, right. Let's go houses. So he, some people buy a house to flip, they buy it, they improve it, and then they sell it a short period, you know, months or a couple of years later. Other people, they build a home, they buy a place to become a home. And they might even want to keep it for generations. So an extreme example of that might be a, you know, the Kennedy mansion, or the Kennedy property on Cape Cod. Now, maybe you haven't been there, maybe haven't seen any photos of it. But the Kennedy dynasty, the Kennedy family have a property on Cape Cod, that has been there for generations, and they plan to keep it for decades to come. So they treat it differently compared to the person who is building to flip or building to sell buying to flip. And they also treat it differently to the person who's just kind of coasting along and doesn't even think about Should I keep this house for a long period of time.
Kevin Lawrence 12:39
Yeah, and that's something that we can fall into the trap of, and again, people are doing this because they they are, you know, consciously deciding to be there. And that's what we want people to get, you know, you can have a place that is a mediocre place to live or a place that you tolerate. Or you can have this place that you're thinking about for generations and just the future, which some people do, or you can flip it, that's good, too. Don't just get stuck in the middle of, well, it works. It suffices, it's okay. Right? You want to have it that it's meant to be amazing for the long term. Or it's great to flip for the short term. And don't get stuck in the middle. Now, we're not saying if you've got a home that you live in, that's fine. And it's all you need for right now, we're not saying that we're using the metaphor, because maybe that's the way you want to live. But we're talking the extreme of a business, which is a commercial enterprise. It's not the place where you raise a family. And some people get stuck and just having a business that becomes lacklustre. Not fun. And that's what we're looking at on this. Is that really? Yeah, deciding and being conscious of it, because you make very, very different decisions now. And it's interesting, early on in our discussions, lots of companies will have strategic plans of how they're going to make the business better. Right. They'll have plans and they'll have goals, and that's great. But what's the shareholder plan? Like what's the plan for the shareholders? You know, from that perspective, the team can be rallying towards, you know, making a stronger company. But from a shareholder perspective, is this a, an asset that we're going to build and make great for 10 2030 4050 years in the future? Or are we flipping this. And in some sometimes I've seen companies where the CEO and executive have a very good plan for the business, but the shareholders don't and the way the shareholders look at it could directly or could have a notable impact on strategy. Because if they're thinking a 30 year time horizon, that's very very different in terms of how they invest, how they look at their team, and how they look at all kinds of other things, is very different if they're going to flip it in three years, no different than the house example, you know, the Kennedy Cape Cod home, that that compound that they have, you know, they would think different about maintenance or what they build, versus if they were gonna flip it in three years.
Brad Giles 15:21
Yeah, yeah. I love that a strategic plan and a shareholder plan. So the strategic plan is how we're going to basically build the business and grow the business, but then having a different page, a different document where we're thinking, Okay, so how are they? How are we going to make it work for the shareholders? Now, that may be an 80% overlap with the first document, but it's a different lens through which to consider this a different way to think so how, what are the shareholders looking for? And it could be you it could not be you, you could be a part of that. But knowing that the shareholders are the shareholders, you know, maybe they're looking for dividends over the long term, maybe they're looking for some slight capital growth. But whatever it is making the decision around that and saying, Yeah, we need to deliver these things over a period of time makes a huge difference. Yeah. And it even
Kevin Lawrence 16:20
affects the risks that you'll be willing to take, Heck, even think about bringing children into a business. If you're selling it in three years, you don't even consider it. Yeah, if you're keeping it for 300 or 30 years, you're probably going to teach your kids more about the business, you might have a plan of how you involve or don't it all. As soon as you zoom out to a longer term time horizon, you change your thinking and change the conversation. Versus same as when you zoom in to a shorter term exit, you change the thinking and the conversations.
Brad Giles 16:59
And that's really interesting, because in my conversation with a lot of entrepreneurs, what they think is they feel they can't zoom out, because the existential threats are too big. Okay, so they think that they're going to if they try to think in the long term, that some they will get taken out, and they won't be able to endure. Right. But I think it's a it's a illogical concept. Like, it's, it doesn't make sense to say that, because it is, they if they have an enduring mindset, they will get over that they will survive and endure, and adapt and pivot and change within the confines of their hedgehog to get to that enduring place, they will correct. Because they have the enduring mindset.
Kevin Lawrence 17:53
Right. And so it's definitely the entrepreneur thinks they can't zoom out because it's dangerous. Yeah, but the underlying great person knows they need to zoom out, and they need to zoom in, they know they need to do both. Because if you just zoom in, you could get lost in the forest for the trees that you could, you could lose your way and lose your perspective, if you only zoom out. That's dangerous, too. So it's an ad, but it was interesting, you know, our, our icon that we use in our firm Lawrence and CO is the end sign, you know, when I say primarily, yeah, the ampersand, it's, it's like, basically, it's about not compromising. It's about thriving at work, and having a great life. And I caught up with a friend of a friend recently, that's interestingly, in in, she's been thinking about the same thing and some of her stuff about the power of the end, you know, it's this not having to choose, and it's about how the end is critical that this can happen. And that can happen, where a lot of people think they have to choose, in some cases between two things, and sometimes you do, but some of the best decisions are fighting the end. Yeah, right, is you have to zoom out and zoom in. Now, that kind of goes against one of the things that we're saying here. But you cannot really thinkable building to sell a company in the short term, it's very hard to and then do an end for the long term. And yeah, you know, and truthfully, you can have, if you're really going to do a good job of selling a company in the next three or so years, you probably are gonna have 80% plus on the long term 90% on that loss rate on the short term, and a little bit about the long term because you got to allow the thing to succeed. And the same thing, if you're, if you're building it to endurance to keep it you can't have everything only focused on the long term time horizon. Because there is a business to run today. The point of it is that if We go look at some people feel this balance between zooming in to details and short term and then zooming out to longer term strategic, you need to do both. And it's just a matter of how much you wait on each. And if you're going to build an enduring, great company, you're going to wait more to later on, right to lot longer in the time horizon a little longer time horizon, where some people won't put almost anything on
Brad Giles 20:26
- And that's, and that's, you know, one of the things that we're saying, you've got to, you've got to pick in by not picking you are in the mediocre middle. And that's really the whole point of today's episode is so are you building to sell? Or are you building to keep? Do you have a plan to sell the business? Or do you have a plan to keep the business because the absence of one of those can create a real, you know, a real risk that you actually won't endure, you won't be able to zoom out to that 1000 100,000 excuse me feet perspective and make those long term considerations and decisions on where you're going to head?
Kevin Lawrence 21:15
So you're not even because you're not even thinking about it. And it's not Yeah, because it's just not something. And again, if you don't put energy into it, it doesn't usually move along, or kind of happen the way you want. And that's it. So it's really we're trying to say today is, Hey, are you consciously building to sell in the shorter to medium term? Were you consciously building to build it for the long term and build an enduring great company for decades? But don't allow yourself to float in between or not even think about it, pick one, and drive hard towards it?
Brad Giles 21:47
So how do you know that you're in the mediocre middle a listener might say, Well, we've got to be hag? I don't think because we've got to be hag, I don't think that we're in the mediocre middle. big, hairy, audacious, big, hairy, audacious goal is the be hag acronym. So how would we react today? No,
Kevin Lawrence 22:09
you're in a mediocre middle? Well, your businesses probably mediocre in lots of different ways, really, that's literally like, so you know, whether you look at, you know, the kind of people on the team, like, if you're gonna sell a company, quickly, you need amazing people producing Well, yeah, or you're gonna blow it out for a cheap price in a fire sale. But if you're gonna get all the money for it, if you're building an enduring, great company, you need to have darn good people making the decisions and driving it ahead. So people could probably be mediocre. Your performance could be mediocre, right, your margins, you know, your margins, and, and your profitability, likely could be mediocre. And even thinking about the balance sheet. Like, truthfully, if you're going to sell your business, you might be fully levering up your balance sheet to maximize growth, right, maximizing growth, which would maximize, depending on the visible maximize sale price. But if you're building an enduring, great company, you're probably going to have a notably less leveraged balance sheet. Yeah. Because you want backup and, and buffers for when the economy gets weird. Yeah. And or so you can capitalize an opportunity. So, you know, your balance sheet would probably be quite dramatically different. But in the mediocre middle, you know, it's probably either not great. Or it could be or it's not fully leveraged, because you're not pushing forward aggressively. So what else do you think would tell people go ahead? Well, because
Brad Giles 23:55
you're thinking about this shorter term, you're thinking, oh, I've got this other distraction that I want to, you know, take money out for, or I want to, I want to, I'm not worried about weakening the balance sheet of the business. Another way could be culture, maybe your coaching is, is not as strong as it is because you just kind of, you know, operating you're not really building for enduring greatness there. Isn't that vision there? Maybe your vision? Yeah, maybe you do have a bag, but maybe people aren't necessarily as connected to it, or it doesn't impact them in a meaningful way. So yeah,
Kevin Lawrence 24:38
I mean, it's like in the house metaphor. Like, if you're just, it's just a place to sleep. Yeah. You know, you're not gonna clean it up to flip it and maximize the profit. Or you're not going to make it cozy and feel like a home for yourself. And I know what we see a lot of people that haven't consciously made the choice sufficient to build it. During great company, they don't actually love the business. Like they don't really enjoy it. You know, it's interesting, I was chatting on the weekend with some friends, and we're talking about different businesses and the pros and cons. And I made reference to the fact that, you know, the consulting business, if you want to, you know, get rich and sell your business for $100 million. consulting is not the place to go. coaching and consulting, that is not likely to happen at all, although many of our clients are, do and are able to do that. And, and a friend of another friend said, Hey, as we're talking to our kids, and about me on business, and investing and stuff on our, and I said in a bit like consulting, need to take your extra profits invested. And that's how you kind of, you know, you build wealth for the long term. And another friend said, Hey, Kevin, just just just just don't forget, though, you love what you do. Right? And, and, and not everyone that builds some of these amazing businesses does love what they do, because I mean, I love what I do, because I've picked a business to endure. I want to keep doing this when I'm 80. Yeah, and I have to stop myself from doing it too much. Because I love it. I know, Brian, it's the same for you. Yeah. And so I but that's, that's, that's it's almost like, it's, it's I don't have to endure my business. I love it. And it gives me endurance, because it gives me so much joy back, which is, which is a piece of it nuts if you're on that particular road. And so you got to find a way that your business is not something you need to endure, and you make some good,
Brad Giles 26:36
so maybe your business drains, you maybe is a sign that you're in the mediocre middle that you're not that you don't have a plan to endure. Is that you feeling drained? Because if I said to you, you need to still be in this business in 20 years time. What are the things that you need to do now? Yeah, to be confident that you will want to, and you will enjoy it in 20 years time? What do you need to do? You know, one of the first things I might say is, well, I'm going to fire those two people.
Kevin Lawrence 27:11
Well, then let's get after it. It's good. All right. But that's a great question, Brad, how would you feel? If I told you you would be doing this business for the next 20 years? Yeah. At the pace you're doing it today? Yeah. Because if your answer is awesome, then your business is set up in a way where it works for you. And if it's not look around at the points that aren't awesome, fix those damn things.
Brad Giles 27:43
Because that is an indicator, again, that you're in the mediocre middle. And that that is that inspiration, it's not there. And you can plan your way through and beyond that, it's important to really understand that. And that present, when you're not passionate around that, that present risk, that that, you know, it presents a risk that you won't endure, by not putting in these longer term plans, not by not being able to be certain that you're going to endure, it inadvertently creates the risk that you want to do.
Kevin Lawrence 28:24
Yes. Because you're not building it and setting it up so that you can endure and want to enter it versus getting burdened by it.
Brad Giles 28:33
Yeah,
Kevin Lawrence 28:34
that is awesome. So if you're really, you know, what we're talking about here is, is that, you know, in that mediocre middle, there's a bunch of stuff that won't work for you. Because you're basically accepting a lower standard of whatever, whatever it is, that that would be different. If you chose to flip it quickly. or, or, or you were going to, you know, hinder it for the long term. I just had this flash in my mind. Somebody know, who will remain nameless, lived in this house for quite a while. And it was, it was a place to sleep, let's call it like, you know, a bunch of there were some how much a half finished projects, and you know, and things were just sort of, you know, everything was okay. Well, they decided to sell the damn thing. Man, did they whip that place into shape? Yeah, they got all of their projects finished. They got everything cleaned up, the gutter organized, The place looks so different. It wasn't funny. And I didn't say anything, which is unusual for me. But I laughed to myself, it's like, okay, so you live in a place that to your in your mind was mediocre for all these years. You decide to sell it and you clean it up so the next person can enjoy it. And you don't get the benefit of that. And you know, and maybe that wasn't important to them, I don't know. But it's just funny how people make their places awesome when they We're going to get rid of it. Yeah. And it's, it's it makes, you know, why wouldn't you make it awesome and keep it or make it awesome and enjoy it. And again, different values? Maybe that didn't matter to them? I don't know, maybe it was only an economical motive economic motivation. It's fascinating.
Brad Giles 30:15
It is. Awesome. So a good chat today, we spoke about the question are you building to sell? Are you building keep a business? Or are you in the mediocre middle? So this is part one of two. And in the next episode, we're going to specifically talk about how, how do you build this? What do you need to do? And how do you consider how to build an enduring business in this sense, so that you don't end up so that you don't stay in the mediocre middle.
Kevin Lawrence 30:53
So the key points today were the no plan is great for vacations or Sunday afternoons were not for business. And really, freedom from plans is not freedom, you end up being at the whim of whatever happens. And so you need to have a strategic plan for your business, and a shareholder plan for what you're gonna do for the long term with this amazing asset or business. And then we talk about houses, we say, well, it really there's houses you flip, there's houses that you live in, or just a place to sleep, let's call it or live in for a short time. And then there are homes for generations like that Kennedy, Cape Cod home. And we're encouraging you to consider, either you're going to flip this darn thing. Or it's gonna be a home for generations, but don't get stuck in that middle. Because in that middle, it feels mediocre. It often drains you. And as I wrote down, the thing that actually came into my mouth as we're talking, you end up needing to endure your business means tolerated or put up with it, versus your business giving you endurance in the form of joy and fulfillment. So is that something that you feel you need to under? Or does it give you endurance, and that's really a great, a great summary of this. And what we want for you is to not risk building a great company and having the endurance to do it and missing out on the opportunity in front of you. And selling it just because you can't stand it. Again, if you sell it strategically awesome. But if you're just selling it because you can't stand it. That's a whole other thing.
Brad Giles 32:22
Awesome. Well, we hope that you enjoyed this part one of two episodes of the growth whispers where we always talk about building enduring great companies. I'm Brad Giles, and you can find me at evolution partners.com.au and Kevin, the North northern hemisphere in that half
Kevin Lawrence 32:41
of the world we would like to call it yes has
Brad Giles 32:44
been chatting throughout this episode. You can find him at Lawrenceandco.com. We hope you enjoyed our episode and we hope you can join us next week for part two. In the meantime, have a great week.
Podcast Episode 61 - Integrating Cultures When Companies Merge
IN THIS EPISODE:
Many leaders tend to focus on finances and processes when acquiring a company. Often, they don't consider culture. Yet corporate culture can actually create major problems and can even sabotage a good merger. Even two companies with good individual cultures can create a toxic environment when they merge, leading to A players leaving.
And ironically one of the reasons people buy a company is the top talent.
So when acquiring a company, having a plan for the cultures to merge is one of the most important things you must do.
This week on The Growth Whisperers we'll review seven important things to consider during the process of integrating cultures when companies merge.
SUBSCRIBE TO THE GROWTH WHISPERERS:
EPISODE TRANSCRIPT
Please note that this episode was transcribed using an AI application and may not be 100% grammatically correct – but it will still allow you to scan the episode for key content.
Brad Giles 00:13
Hi there, welcome to the growth whispers where everything that we talk about is building enduring great companies, all the tips, tricks, tactics, everything that you need to know and to understand if you're interested in building a company that's going to last and building a company that you want to keep. My name is Brad Giles. And as always, I'm joined today by my co host, Kevin Lawrence, Kevin, how is life in sunny Canada today?
Kevin Lawrence 00:43
It's it is awesome. And it's very sunny and warm, which is something we really celebrate in Canada, cuz it doesn't happen as much as it does other parts of the world. So yeah, it's a great yeah, great day. That's all you know, what, it's always a great day, you know, it's part of the thing is, I always believe it's a great day. So I might sound like a broken record saying that, but 99 times out of 100. It is. So yeah, things are really good and good chance to enjoy the sun. Got some good times with some friends not and family and life is good. My son had his graduation party last week, graduating high school, we had to have a quiet little party because you're going to have 10 humans, they can't have a normal graduation celebration, like most people get to. So that's a that was a big deal. Last week, we got to do some fun and some fun with his friends. It was actually it was good. How are you Brad? How are things in your world?
Brad Giles 01:40
Very good. eight degrees this morning, which is quite cold for where I live. I know that in Canada, that might be a sunny day, but life is good here, a couple of COVID outbreaks again, across the country, which is nothing to be fair in relation to some other parts of the world. But the new strains of the virus are becoming more and more virulent, and escaping, they're talking about, if you're at the end of a hotel corridor, the room to room transmission chances much higher out and so people want to go to hotel rooms and be not at the end of the corridor. There's lots and lots of things like that, because a lot of people are in hotel quarantine. Really. And it's being transmitted in the hotels. Yeah. Yeah. So yeah, there's a lot of stuff. But everything is good things are booming. And going well, as always, though, we begin with a word or phrase of the day. So Kevin, tell me about your word or phrase of the day.
Kevin Lawrence 02:44
Yeah, all mine today is seat time. And as you know, I talked about a passion for cars and racing and you know, time in the seat generally has a good correlation with making you faster in a race car or anything. But that's not what I'm talking about today, as you're just interesting story about Warren Buffett, who is, you know, considered to be the most successful investor in the world. Interestingly enough, because of the power of compounding, his consistent returns are very good, but not the best. The reason that his wealth is accumulated like it is, is because he started investing when he's 10. And I believe he's now in his 90s. So it's, consistently getting good returns above average returns. But over an 80 year period, it turns into something magical. And it really makes me think about many of us in what we're doing. You know, I've been doing this thing. Now, I don't like to count the numbers. But I think it's, it's well over 25 years of working with CEOs and executives, in scaling companies, and seat time, good seat time, good practice, good discipline, practice, becomes very, very powerful. And that's why, you know, generally when we think about wisdom, we think of people that are, you know, over 50, rather than under 50. Not that we don't all have wisdom. So just think about that story about Warren Buffett and basically, is that a majority of was wealth in there serious numbers came in the last 10 or 20 years after, you know, 60 or 70 years of doing it is when his real wins came in. So because he's living the living so long and healthy, and I hope he continues for a long time. That is a huge component as well. So it's less about his, how well he picks stocks, and just that he's owns them for longer periods of time, because there's other stock pickers who are investment decisions who actually have a much better track record in terms of, you know, he has an average of about roughly, you know, 20 ish percent growth year in that range. But there's another gentleman who's in this He's 60%. But he's not as old as Warren and hasn't been investing as long. It was really interesting. So the value of compounding over time.
Brad Giles 05:09
Wow, then you, mine is nowhere near as sophisticated as yours. I don't throw my toys out the court very often. But I happen to do that this week with a leadership team. So my word is preparation. Okay. In fact, I would say it would have been several years, several years since I've lost my call with a team. And but this this, this week gone I, I had a very special occasion where a team had lost money for the for their business, this quarter, or this quarterly workshop, they'd lost money. And there was two members in particular, who joined the team about a year ago, and over the past year, they hadn't done any of their homework in preparation. And so I'm yeah, so I'm going around the room. And I'm saying, so tell us about it. Tell us about your reflections on this particular item agenda, like we would one of them was reading and another was a question. And we went around once and they said, I haven't done it. And then we went on a second time. And they said, I haven't done it. I haven't done it yet. These people. For the last four quarters, were saying the same thing. They just weren't coming prepared. And
Kevin Lawrence 06:25
I could only imagine, oh,
Brad Giles 06:29
and they are and they are not doing their job and losing money. And so yeah, so mine is preparation, my word.
Kevin Lawrence 06:40
So what does it look like when you as some, you know, throwing the toes toys out? losing it freaking out? whatever you wanna call it? So what does it look like? What does that sound like? I would love to have seen that in that room
Brad Giles 06:52
a bit, you would? Well, because we're not their boss, an advisor or coach is not their boss. And so it, it's about creating a credibility chasm, it's about being careful with your words, it's about talking about their behaviors, and not who they are. It's about saying, you know, you're disrespecting this environment, it's about this is how much preparation I do to come to today. And I've asked you to spend 30 minutes reading and considering so that we've got actions and you're disrespecting your boss, you're disrespecting your peers, and you're disrespecting me by not even beyond being able to do that. And, and so it's just, it's, it's, it's letting them know that they are, you know, effectively doing the wrong thing. And yeah, you know, in a calm considered notes not counting can see.
Kevin Lawrence 08:01
Well, you know, I've had a few of those, Brad where I, I've called, where I lit them up, and I'm just like, you guys, this is unacceptable. This is a serious meeting, taking serious time where the business and we are all invested in making the company better, but only works if we all come prepared. Yeah. So you need to think about if you want to be on this team, it's an expectation that you come ready to go and stuff happens once in a while. But this is the second time. Yeah. So my request is if you don't if you're not willing to prepare next time, then uninvite yourself from the meeting?
Brad Giles 08:40
Yeah, yeah.
Kevin Lawrence 08:41
And that's like an adult conversation. But yeah, I've had similar situations and like you, I've, I've thrown my toys out a number of times, and much less. So I've kind of managed myself better now. But in and I work with better, better teams. I work with some other teams who are in their own standing, but it's very frustrating. And unfortunately, what you've touched on and what I've also learned is, we got to be careful not to do the CEOs job. And some CEOs aren't comfortable with creating that kind of tension. And I've got I've learned to be careful not to do their job too much. Although at the end of the day, it is my meeting that I'm running, but it is it's their company, but it's a fine line. But yes, it's you know, when you care, it's infuriating when people show up like they don't care. Yeah, yeah. Good one. Well, speaking of caring today, we're going to be digging into a topic that relates to really caring and that's about, you know, caring for your new colleagues when you merge two companies together or you acquire a company and how do you show up with that caring in a way or you bring them in and make a stronger company going forward? So the official title Brad in make sure we get this right how How do you integrate cultures when companies merge or a company is acquired? So so the first thing we got to call out on this, and we most people know it, there is rarely a merger, rarely, I have been a part of one, at least, potentially two that were legit mergers, but in almost all cases, it's an acquisition of a company is the more a more powerful one in the transaction acquires another one. So we know that. But what we want to look at from the perspective is how do you take two great teams of people and bring them together? And whether it's 1000 employees and 10 or 500 employees and 500 employees? conceptually? How do you really do the work of bringing them together because it's often a messy, messy process. And not only is it painful for the people, but the companies end up not being very well integrated. And, and there's still because it becomes us in them and subcultures and all kinds of really weird stuff. So we're gonna dig into this and you know, anything, any kind of thoughts that you would kind of lead us off with here, Brad, from, from your perspective?
Brad Giles 11:19
Yeah, so I'm running a workshop last week, Thursday and Friday with a team. And one of the slides that I use when we're talking about core values. I say that they should be between three and seven. Now, I know Kevin, your take we've spoken about this before is you want three core values. But let's be fair, we both agree, if you can read
Kevin Lawrence 11:40
a five, three to five, I think if you go beyond five, you've exceeded the word core. Now you're just getting into values. But that's but we could, we don't need to debate that just agree that I'm right. And then we can move on. Yeah,
Brad Giles 11:51
yeah, yeah. Okay. So where were we, what we are agreed on, if you're getting eight 910, you've got too many. Okay, so, yeah, I've got this. And I show a few slides, where, where were their case studies or their examples of company's core values to set the time. And then I show an example of how not to do it. And it's this, this poster that's got 22 core values on it, because it's, it's, it's outrageous. It's a joke, like, no one would remember what half of those core values are, let alone how to behave. And so I use that as an extreme example, so that I'm in this workshop on Thursday. And I show it to this leadership team. And then there's one lady, she says, Oh, my God, I was in that team when we built those. I know, I'm, like recoiled a little bit. It's been an interesting week, let's be fair between that. And then the toys. But I recoiled a little bit. And I was like, Okay, tell me about that. And she said, it was the biggest nightmare ever, because we started off with good core values, and we were strong. And then we acquired a company. And then they, the executives thought it was a good idea to merge the value. So we brought on some of their values. And then we acquired another company, because they were an acquisition mode, and then we merge some of their values. And she said, we did that. And it was a nightmare. And we lost, the culture was terrible. And we lost so many good people from our company, and the acquired companies, because the culture became so terrible.
Kevin Lawrence 13:30
Yeah. And that's people who didn't under they were doing the best they could, but they did not understand culture, and really what core values are meant to be and do? Yeah, it's incredibly important. I've seen all kinds of crazy, crazy things when it comes to By the way, I had a similar scenario, where I had a slide of what not to do, and someone else had been there. And I'm trying to remember which one it was. And that's, you know, very careful of showing too many examples, too many bad examples, but I had a similar one, it'll come back to me which one it was. So, you know, one of the points that we start off with, we're going to bring companies together. And look at those companies where you just basically buy the assets. And you know, and you know, your 1200 employees, you buy the assets and three employees come over. We want to treat those people with respect, but that's a little bit different. We're really when there's a notable scale of company that's coming in, no matter how it's going to work. But the main thing is, you gotta have a plan. This is not a project for the accounting team. This is not a project for the sales team. This is a company-wide thing to really maximize it and make it work well. And so you need like a 12, whether it's a 12 day plan or a 12 month or 24 month one, you need a plan, because there's a number of steps and it takes time. In many ways. It's just like onboarding an employee, but you're onboarding a whole batch of people that come with existing systems and existing Culture So, and with that plan, remember that you're trying to really get the hearts and minds aligned. And then the systems are, that's just work. But getting the hearts and minds aligned is where the value is. Because then you have them with you, instead of thinking you're, you know, bad people or foolish or whatever it happens to be. So, you know, a really real detailed plan. And ideally, the team that is leading this, this would be the acquiring company, that team as part of getting the acquisition done works on this plan. Ideally, they have a good rough draft of it, that they run by the company that's being acquired, or the partner that they're merging with, and involve those people in the thought process on how to make it most effective. That's just, you know, early, early stages of getting buy in from those people, rather than forcing it down their throat.
Brad Giles 15:56
And isn't that what you'd want to hear if you were part of the acquired company, if you were the one that was being purchased, you'd want to hear, okay, the culture won't be the same. We it can't be, but we're gonna work very hard to make sure that we can make this thing work, it will give you a real sense of optimism, that would be preceded by a sense of vulnerability, what's going to happen, you're still gonna have a job? Is it going to be a horrible place? Yes, I've had, I've heard bad things about that company that's buying us have had their terrible company, especially if
Kevin Lawrence 16:27
they're a competitor. Yeah. Right, you're one of them could be easily perceived as a monster. And, and there will be stories about executives on one side or the other. And you know what, because when you got a competitor, your job is not to love them up. Your job is to go against them. So there's, there's all kinds of things. And again, there's still going to be anxieties. But really to have a thoughtful plan, thinking about getting those hearts and minds engaged, before you get into the process stuff.
Brad Giles 16:57
And when I've been involved in these deals, as a coach advisor for the leadership team, we've spent, you know, in the preceding two quarters, we've spent full days working on the culture aspect, how are we going to effectively bring these two cultures together. And at the outset, I tell you, the teams hadn't done any thinking about it at all. And by the end of those two days, they were like, this is an enormous job. And we've got to get it right, it's so important, because we could lose many people on both sides of the equation.
Kevin Lawrence 17:31
Correct. You could lose many people. But worse, you could miss out on massive opportunities, because you're just thinking of it from a tactical point of view, which takes us into our next point is he got to have the humility to look for greatness on the other side. And you're probably I think, at this point, a boat 50 mergers or acquisitions I've been involved in through my clients like a lot, and I wasn't hands, it wasn't deep, deep, and all of those, but they've been a bit a part of them. And, and one of the things that we found the most valuable is, is the more dominant company often assumes they've got it all sorted. And then they want to just convert the new company to their platform, we set up an expectation was, well, we got to start, okay, we got to go mining the gold under this other company and bring things together. Because this company has been around for a long time as well, it makes lots of money as well, there's got to be some good things there. And, and, for example, in one of the companies that we acquired, and it was an outstanding company, but they had an amazing learning culture and learning and development system that they had built. Yeah. So instead of assuming that we're better, and we're bigger, and we're smarter, and blah, blah, blah, you know, we were hunting for it, and someone found this gem and what they did, and we found ways to integrate it into the overall company. But it's but it's more of a mindset than anything of just truly looking for the good so we can maximize it. And that only lasts for a few months. Yeah, but that is a critical step and starting off in the right direction.
Brad Giles 19:09
Yeah, I, what comes to mind when you mentioned that there was a person I know, their company was acquired by a much, much bigger organization. And they had that humility is so important, because they looked in and figured out that the management system, the way that they were running, their management system was so effective that they said we want you to come and implement that into four or five of our other companies. And we want you to run that process. So yeah, it's it that humility is step number two or our second point for a good reason because it's very easy to just say, okay, so that means that we're going to need another three workstations in the sales team or another 30 workstation young sales area, but it's so much More than that,
Kevin Lawrence 20:01
and you're just not respecting the other people, like at the root of it, you know, you need to honor and respect to what they've done. Now, you might fully let go of all the systems and processes they have, that might be the final decision, maybe. But you got to start with respect and to get you on the right page, which takes us into the second piece is, you know, and you know, we were talking about this before we both the dilemma is you're really got to know the talent, ideally, before the deal closes. So, you know, as part of due diligence, in many cases we do and people go and meet the people and figure out who's who in the zoo. In an ideal scenario, we go and do full on top grading interviews, and really understand who the top players on so we did one, and I, US company where we were number one, we acquired number two funny thing. After the acquisition, you know, we're talking to the executives. And they're like, oh, we're so glad you bought us. Yeah, cuz we were destroying them in the market. Yeah, at the same time, the companies hated each other. So we had a lot of work to do. But so what we did after getting each, each of the key leaders talk graded, we knew who the A players were. And we assigned key people to work with those people build relationship with those people stay close to those people. So we kept them at any cost. And the other ones that weren't as key were, you know, we still worked on it. But there was the at any cost list. Yeah, metaphorically, because we knew we knew who those key people were, interestingly, there was a very senior person that you would have expected was key, talked and acted like they were key. And they weren't on the list.
Brad Giles 21:51
Yeah. Yeah. And there isn't as much of a surprise there, because you did the work, because you did the preparation, going back to the earlier word, right? Because, yes, you know, you had the plan, and that preparation, understanding the talent, you know, I saw an article probably three weeks ago, and it was an analysis of the companies that Apple has acquired. Okay. And what they're doing is they're actually the only thing that they are acquiring is talent. Okay, I've heard about this. Yeah, they are not worried by
Kevin Lawrence 22:36
the company, keep the people in check the business.
Brad Giles 22:39
Yeah, they don't care about the business, what they do is they look and they say, in this specific technical niche, we are very, very weak. And then they look and they go, who can we acquire, and they don't care about your revenue, they don't care about your patents, none of that, what they mostly all they care about is, and so therefore they do the valuation based on the quality of the talent. Okay, now, you're not apple. They're not apple. So the listener isn't apple. But the point is that the talent is one of the really important things that you are acquiring. So you've got to know Yes. And you got to be prepared to make the hard calls about talent, if they're not going to make it in your organization.
Kevin Lawrence 23:25
Yeah, and do the right things to protect those ones who are critical. And again, you don't know who they are until you really dig deep. So, so So really, understanding what the talent so the third one, and this is one, I've seen some amazing, simple ideas over the years that didn't, they're so obvious, but not common. And that's really aligning the relationships between the leaders and the managers in the frontlines. And, and the simplest, best tip that you are foolish, if you don't do it, is that it's called the buddy system. Just like when you were in like, you know, kindergarten grade one, you know, used to be that you have when you go out for recess, everyone would hold hands with somebody else. Now, they probably don't hold hands, that's probably not cool anymore. But you would have that person that buddy system, you know, as I remember, as as as, you know, as young adults going out carousing to the bar, we would always use the buddy system to
Brad Giles 24:23
and you would try to find someone to hold hands with
Kevin Lawrence 24:27
you in a different way. Yeah. So, so, so So, but it's basically, our CFO and their CFO have a weekly meeting, where they talk and connect, and you're basically starting to build bridges or connections between people. Our head of sales and their head of sales are a person in charge of Latin America sales and their person in charge of Latin American sales. Our Comptroller and their controller, our CEO and their CFO, our safety officer and their safety Officer like all of these people, building bridges and relationships, both with the intent to, you know, mind the goodness and look for the brilliance on the other side. But having a set weekly meetings so that they can be connected, because instead of when something goes wrong going and you know, complaining of the command chain of command to how these people are idiots, they've got a direct connection to say, Hey, can you give me a hand with this. And so basically, it's like, you take the whole organization and you lock up, almost everyone gets a buddy, or most of the key people get a buddy. And it's magical, because it accelerates the learning curve, it accelerates the, the culture and help people get in sync with the culture. And it just solves a lot of problems.
Brad Giles 25:46
And that's a really important point. And the question to that is, who's responsible for merging the culture and everyone really has a role to play, and very specifically, line managers or want to call out line managers have a role to play, and need to have priorities that need to be executed in a merger around culture? So it's very easy for line managers to say, yeah, we've acquired this company. And yeah, I've got this other team. But you know what, I got all this other stuff to do, you don't understand. I'm too busy. I don't have time for this culture stuff. And it, you know, everyone has to have a role to play. If you're managing people, it's not just the CEO or the senior people. Yeah.
Kevin Lawrence 26:42
Awesome. So basically, how do you find this other ways to align relationships, you could have the accounting team me with the whole accounting team and have a brainstorm about a process or a policy or whatever the heck it is, like there's, there's meetings, but the basic of the one to one with the key people, it really, really, and then also, then people don't feel lost in the system. It really helps. So the next one is aligning the core values. And, you know, Brad's example, up front, I love it. You know, they brought eight companies together, they kept all of their values and mashed it into one massive list. It wasn't eight, but it looks like it was eight. And that's just wrong. Because, you know, truly core values, as Brad agreed shouldn't be like three to five on a list. Right? Not Not Not 23. I know, Brad thinks it can go up to seven, which is okay, we're allowed to have different views. But whatever it is, it's a handful. And keeping it simple. And, and so we've seen a few different things. in an environment where it's a pure merger, or a pure reset, which is less common, we've started to clean slate. So we brought two companies, probably eight years ago, two companies together that were both bought by private equity. And they wanted to literally merge them as a platform to build on, which we did. We did a ton of acquisitions after that. But we started with a clean slate, new purpose, new B hag new core values, everything was fresh. And so we started from that, and we did a brilliant job. And but that is rare. But that is one way to do it. The other one and maybe Brad, you want to talk about this one, as is where you kind of onboard people on to the existing values of the more dominant organization. You want to talk about that one?
Brad Giles 28:40
Yeah. I think that there's no such thing as a merger. Okay. I think that may be in What 0.1%? There might be right, but it's almost always an acquisition, there is almost one person who is doing the deal, there is money that is flowing one way or you know, assets that are flowing one way. And there is one person who will be the CEO at the end of that deal. And so if that is true that it's all about acquisitions, then the job to be done is to say, what is the dynamics? How are we going to make this work? What does the leadership team look like afterwards? And how do we bring the values to a place whether or not they change is not even the question get to a place where we can unite this culture. And if the people who were leading the organization primarily, it connects with their beliefs that are bone deep, the beliefs that they their deeply held beliefs, because if the leadership team is essentially staying the same at the end, the core values are probably unlikely to change. If the leadership, if the leadership team is a mash up of two organizations, you may need to rediscover the group's qualities,
Kevin Lawrence 30:15
great filter bread, if the leadership is intact, odds are you will onboard them to your core values in a way through a process and discussion of helping them to find the alignment. But if your executive team is changing dramatically with the with this other team, you might reset it. Or you might reset it or give a notable edit revision to it if the executive team is changing, notably, great, great way to look at it. But let
Brad Giles 30:43
me be clear, in my humble opinion, the worst thing you can do is give the two sets of core values to marketing and ask them to solve the problem.
Kevin Lawrence 30:53
I would throw my toys out, I would yell First of all, I never let marketing touch this stuff. Marketing, I come from marketing. So I can say marketing does not touch it until the very end when they're locked up. Because marketing puts persuasion language and customer language on a core values. Aren't there our heart and soul? So yeah, you don't do that. For sure. And just to mash them together. It's in it. For us core values are a strategic tool. It is the list by which we fire and hire people. If you have them, you get to stay. If you violate the core values consistently, you must exit the building.
Brad Giles 31:33
So don't worry about the other worst thing that you can do is say, Well, here's what we're going to do. We're going to do a survey of everybody in all companies and then get a popularity contest.
Brad Giles 31:44
Yeah. And let's try to figure out exactly
Kevin Lawrence 31:47
that's called a lack of leadership.
Brad Giles 31:49
Yeah. So don't do that.
Kevin Lawrence 31:53
Now you might get some bad entertainment. If you're getting mad. We're getting into time. Yeah, exactly. Oh, my God, I do you know, I have to be careful getting mad. And I recently as a side note, I got mad at a CEO in a meeting in a way that probably exceeded appropriateness. Actually, no, it did. And I end up I have to clean up after
Brad Giles 32:21
apologize because we bring passion, and we need to be respectful and do the right thing. But, you know, the passion comes with a few other things. So let's move on.
Kevin Lawrence 32:29
It does, okay. So a lot of values, and you need to consciously onboard people to them or redo them, but you don't just make a bigger list. Go ahead, Brad.
Brad Giles 32:40
So next one is aligning the strategy and execution. So what we need is one plan, the old phrase, okay, we need everybody on the same page. So if we've talked, just talked about the values, okay? And to a degree, perhaps the purpose, okay? Are we rediscovering are we onboarding, then we move on to, we've got to align the strategy and execution. So we need one single Simple Plan that can unite the whole organization. Now, maybe there are different industries, maybe they're in different areas, but there are still some common elements that we can work on. So one single, so everyone is going in the same direction.
Kevin Lawrence 33:23
Yeah, so that would mean if you look at the longer term strategy, that this new company, if it's, if it's a merger, it's all part of one, right, or a pure acquisition, where they're folded. Sometimes you acquire companies, and they still operate somewhat autonomously or independently. But it's clear how they fit into the flywheel or fit into the strategy. Like they see their part in the strategy, which is critical. So the alignment might just come in the long term strategic piece, but they're aligned, or they might be fully aligned all the way through the tactical level. And the key piece, and when we've done, you know, sometimes with some larger acquisitions, you know, they will run a ton of ously for a while, independent fairly independently for a while. But what we do is we get them on our Australia's strat planning framework, we get them taking all of their thinking, and they get their own one page strategic plan, we make sure that they have their own quarterly goals. And we get them, even though they're doing a lot of stuff on their own. We get them using our strategic planning ecosystem, get them on board with the language and the approach. And then sometimes, that's for ones that we don't blend in right away that, you know, but they're there. They're aligned through the least the strategic thinking and always tied into the flywheel and the B hag point is, is get them working. So they're, they're more in sync with
Brad Giles 34:42
you. And so then once we've got the values and the strategy and the execution line, we've got to think about the processes and sometimes this is where we've got to fall back to the humility comment before like, we've got to be humbled it they might have a better sales process than us or a bit of finance process than us So with a humble mindset going in and understanding what is the best practice amongst the two, which one is going to serve our needs better, and then aligning and merging the two, were appropriately making sure that we have one single process for this, that everyone knows how to use.
Kevin Lawrence 35:20
Correct. And note, for those of you that are listening today, this is the number seven item on our list. For most people, it's the only one. And that's why there's such a challenge with integrating acquisitions. And it creates way more friction than it needs to is because we again, this is, this is the tactical process. And we spent all the center energy on the hearts and the minds in the strategy, then we get to this where a lot of people, okay, well look at the accounting teams together, and we'll line them up and get them on or eirp. It's like, well, that's not that that doesn't work. Or you miss massive opportunities, let's say, and you create way more friction than you need to. So yes, at some point, you align them. Alright, finally, number seven, celebrate, evaluate and realize, Hey, this is new, you got to find ways to celebrate all the stuff that's working, right. And really, this is great, and acknowledgement of true things that are good, and evaluate the stuff that's not working so you can tweak it, and then continually re align people, bring them together, have brainstorming, does have planning meetings, whatever it happens to be for those key leaders to continually getting aligned to what matters most.
Brad Giles 36:37
And one of the things there is core values awards can be something that I certainly use what a lot of companies core values awards, are whether or not you've rediscovered or you're reusing. If some of those awards can go to the new company, it can be quite beneficial or the acquired company, it can be quite beneficial. And then also call those stories around that celebrate evaluate realigned concept. What are the cool those stories getting those things out there?
Kevin Lawrence 37:11
Absolutely. So in summary, the idea here is that when you're going to bring companies together, acquisition, or more appropriately, or sometimes merger, is you got to align the hearts and minds to start with, and then kind of get the strategy piece and then get down to the processes in the end. And it's not just about aligning processes, because there's people involved and we've talked about, you know, 12 day or 12 month plan, humility to look for greatness on the other side, get to know that talent, even before you finalize the papers, you know, aligning the values in one way or the other aligning the strategy and execution systems, and then the processes and then finally, celebrate, evaluate and keep optimizing it and dilute it. Awesome. That's a pretty good discussion. That's a great bet. If people do that all the time on acquisitions, it would make people's lives a heck of a lot easier.
Brad Giles 38:06
Well, as Peter Drucker said, culture eats strategy for breakfast. And, you know, when acquiring we are going to end up being one big company, so we need to ensure that the culture is right. What a good chat. All right, well, thank you for listening, everyone. This has been the growth whispers podcast. I'm Brad Giles and you can find me at evolution partners.com.au and Kevin Lawrence you can find at Lawrenceandco.com. Of course, you can always find us as well on YouTube, if you search the growth whispers thanks very much. I hope you've enjoyed the episode today about company mergers and culture. Look forward to chatting to you again next week. Have a great week.
Podcast Episode 60 - Finding the Best Advisors Will Help You Quadruple Your IQ
IN THIS EPISODE:
Finding a competent advisor is easy. However, if you want to find the best person to really make a difference in any area, it is important to ask one question: "Who is the person that has been in your situation 14 times before?". That's what we call a 14X advisor.
We also discuss the Billionaire mindset - and consider if a Billionaire with no financial limitations was in your situation, what adviser would they choose and why.
Finally, we talk about the importance of getting the right fit with an adviser so you can become clearer, stronger and more inspired.
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EPISODE TRANSCRIPT
Please note that this episode was transcribed using an AI application and may not be 100% grammatically correct – but it will still allow you to scan the episode for key content.
Brad Giles 02:41
In terms of today's subject, which is something that I think we're both pretty passionate about why finding the best advisors will help you quadruple your IQ. Yeah, and
Kevin Lawrence 02:58
it's you know, it's a logical thing that to get the best advisor you can, but we often find that when people are in the middle of figuring things out, they actually normally try to figure it out, versus tapping the shoulder of a master. It's there's this instinct that many people have is to do it yourself DIY, there's all these phrases for it. And we're kind of reinforcing or going against that natural instinct to figure it out on your own, to try and flip the instinct to maybe making your default, who is the most masterful, masterful person that we could ask in these more high stakes or, or, or more challenging situations. So instead of the default, let's get down to it and figure it out? default getting to how do we tap into a real Master, because then will more likely more quickly make a better decision or better move?
Brad Giles 03:55
So you've got a phrase that you use for this? Kevin? We've certainly spoken about this on the podcast before. But tell us about that phrase and how you came to develop that phrase or, or to coined that phrase.
Kevin Lawrence 04:11
I call it 14x advisors, or I call them 14 x's. And the idea behind it is instead of and we'll just take I mean, I've seen too many situations where my clients got bad advice, like really bad, good intentioned people, but really bad advice in many, many areas, but you know, I think particularly of some legal advice that one of my clients got, and you know, there was a brother in law who was a lawyer. And so he went but his brother in law was like a generalist lawyer with like three years experience. And it's not nothing against three years experience, but three years experience isn't the same as 33 years of experience. And three years of generalist experience is not the same as three years of specialists. experience, which is not even a fair comparison to 33 years of specialist experience, and this was an HR matter about long term employee and some bad things that happened and they had to clean it up. And in the end, it all worked out, but it went down the wrong road, because the brother in law with three years of generalist experience, gave him some advice, but there was a few thing few key things he didn't know. And it just made a complete mess. Yeah. And, and so from that point, it was interesting back in the day, and you know, I got no racetrack on the mind. Not surprisingly, but there's another guy that I met at the track that I was going with, who was a specialist, a HR matters lawyer, that's what he did, you know, and so I ended up connecting him with that lawyer who cleaned up the situation and got it handled properly. So yeah, that was just the 14x advisor, and we think about it, you know, if we're gonna go and climb Mount Kilimanjaro, or mount or Mount Everest, you know, I got a buddy who's done a bunch of hiking, and I'm not gonna I wouldn't ask him to do the person that it's summited Everest. Kilimanjaro. 17 times.
Brad Giles 06:14
Yeah.
Kevin Lawrence 06:14
Right. And, if you're gonna fly, we're talking about pilots on the weekend, if you're going to fly in horrible weather, you don't want the pilot that's got 500 hours of experience, or 200, you want the pilot who's got 1000, 5000, 10,000 hours of experience as an example. You know, it, we know this in everything. So the key is, is we want to give people a shot. But let's let them learn and make their you know, cut their teeth and make the mistakes you want. So the rule of thumb is, have they been there and done that 14 times before successfully? And not theoretically, that's what we're looking for masterful experience.
Brad Giles 06:58
Yeah. And it really speaks to the title or did clarify the title will help you quadruple your IQ. So what we're really saying there is, you can get advisors that are at a competent level. But when you're looking for an advisor, in any field, you really should be saying, Who is the person that is the 14x. To use your phrase is the person who's been there, done that. And they're, they're not only experienced, but they're masterful, they are able to see it with absolute clarity, all of the situations, and they can draw on multiple points of experience. Well, when we did it with that organization, or person, that's what happened. And when we did it with this one, that's what happened. So write lots and lots and lots of competence to help you to be able to make the best decisions. And I guess to get the return on input, or effort or investment in these houses, is enormous. If you get the right one, the difference can be multiplied so much.
Kevin Lawrence 08:16
Yeah, and that's the most important so for example, I shared with you recently I'm learning to drive this new race car. Yeah. And it's called a radical which is, is it's like you know, a couple steps down from like a Formula One card not as fast. And though it's it's the same kind of a design but it's not opening wheels so that when you're racing, you're less likely to catch wheels, because oh yeah, wheel cars are dangerous to race. Because if you catch a wheel, it's bad. So but say underneath, it's all very same very, very fast. And I'm learning how to drive them. A couple of my buddies already know how to drive them and I've only done sports car racing before so it's a different takes as these cars have a lot of downforce, it's a different driving technique. So I go out, do some practice, do as fast as I can. And I'm still you know, at least six seconds off the pace and in racing, that's a lot. So there's this young guy at the track and I think I mentioned them on a previous podcast young guy at the track who has won you know the world go karting championship or that it's called Super NATS in Las Vegas. It's, you know, it's basically the fastest racers from all of North America. He's one that he's competed in delights in India, his name's Zack, awesome, awesome guy. So I had him out in my car with me because I know I need to pick up these six seconds. And then I talked about the getting humbled, humbled because on our first time I drove my car, I spun it this first time with him. I think I spun it and then I wouldn't start again. And which is obviously that's no not fun to do in a racetrack. But as I'm driving it, I'm having proud and I said to him, so why did I spend it was Oh, you stayed on the brakes too long. He had this simple, you know, five words that full and then he just described one thing. So of all All the things that I was probably doing wrong, he picked one skill only. And that one skill would open the door to all six seconds, he figured out the one thing.
Brad Giles 10:09
Yeah,
Kevin Lawrence 10:10
yeah. And, and so you got to be a master to be able to see it and break it down like that. And then secondly, you know, later on, he took me for a ride in my car so I could feel what it feels like at the limit and what the car does. So that's like shadowing a master or, you know, really seeing what they do, which again, is absolutely mind blowing. The funny thing is, he's never driven one of these cars before. Never been on a race track before. He's never been on this track yet. But he has, he's a master of driving all kinds of different cars on all kinds of different tracks. And he, you know, he figured it out real fast. But the point of it is, is that I didn't get the direction from my buddies who are good, because they may not. They know, they can drive fast. Yeah. But they don't have the experience of different people and different tracks and different cars to be able to, and they maybe they would have found it. But I found the guy who guaranteed would so not only gave me that piece of advice. Plus, then he gave me the experience of what mastery looks and feels like, Yeah, I got it. And I went up, and I've already picked up I went out, I went out two times, yeah, two times. And I picked up three of the six seconds. So I've already closed half the gap, after, you know, four sessions with him learning. And then on my own without even being him being there, I've already closed half the gap, until I wiped out again, spin again. As I was chasing my buddies down, I spun again. And I broke something. And then I got humbled again, Brad, it was awesome. Because my car wouldn't start. Suppose with these cars, when you wipe out and spin, you've got to step on the clutch, otherwise, it breaks the starter. Okay, which I did. So I got to be stranded in the middle of the track. And then the truck had to come out and told me all the way in again. So, you know, got to work with Masters, but got to be very, very humbled. So the point of it is, you know, we're very fortunate to have access to those masters. And I said, Hey, can you help me? Yeah. And that's really what it comes down to? You know, and sure there's a cost. But based on the benefit, it's kind of being willing to who's the best? Hey, can you help me? But let's make sure that there are 14 XOR? before you ask for that.
Brad Giles 12:26
Yeah, yeah. I had a similar yet different experience. lately. We, I was working with a team. And unfortunately, one of the companies that they work with one of the suppliers, let's say who were vital. We're going into administration, they were going under, and we had an early warning to this. And this was going to have a material impact on the business. We're going to cost a lot of money to this particular organization. And so we sat down with the leadership team, and we went on to a call pretty much immediately with a lawyer. We didn't that team didn't use that lawyer normally. And they were gaming, all of the questions that we need to ask the lawyer beforehand. And I just said, Look how experienced we don't know this lawyer, how experienced is this lawyer in this situation? Have they handled company collapses from this perspective? Yes, for and the team was like, we haven't really thought about that. And what the driver behind that was this 14x concept because I'm thinking, well, who we may be we've engaged but we've got to ensure that we've got the best so we can ensure the best outcome anyway. Then we went on to the call and the CEO, it was one of the first questions. Hi, lawyer, how you going? Tell us about your experience before, like, what have you done in this room? And the lawyer responded by saying, Okay, well, I dealt with this collapse and that collapse and this and this and this, and clearly established themselves as an expert, pretty much immediately be and everyone in the room got a great sense of comfort around that which was fantastic. Because then they were that they just jumped in straightaway and trusted everything that the lawyer say right, so Yeah, perfect. Yeah. Depend that's how it should be done. It's
Kevin Lawrence 14:41
just it's confirming up front and we have a saying in the West. It's no it's not their first rodeo. Yeah, right that they've been there before and everyone wants to pretend and I I'd even encourage you like that, like you know, using a bit of the top grading methodology. You know, dig in and pressure test a little bit. Ask a few facts. What was your role? In that case? You were the lead partner? Or were you the researcher? I mean, you would ask it respectfully that might not that's not a respectful way to do it. But, but really like, let's find out, it's like, you know, if someone's telling you the winning, you know, about their winning race car experience, you'll confirm they were the driver. Yeah. Right. and confirm there was other cars in the race. who wasn't, there wasn't a free, I'm exaggerating, but it's just, you want to validate and also because then you're also setting them up to win because they don't want to have an unhappy client and the end the best people probably well, so that's, that's the idea of the of those 14 axes. And, you know, it kind of takes us to the first point we've listed here is, you know, you really want to instantly when you've got something of high value you're trying to figure out, not you know, how do I tie my shoes? But who should be the first question, and that's something Jim Collins has beat into our heads, your first question, so who question and then the second is, who is the best, so who and best and, you know, one of my clients calls that the, you know, the billionaire mindset. You know, when you look at stuff from being a billionaire, you're automatically gonna think who because you know, you can't do it alone, because you got too much going on, most likely, if you made the money. And then, and you can afford the best. So of course, you're only going to look for the best for that. So that's the first thing is, you know, Who is it? Who can help. And let's just make sure that they are the absolute best. Yes, I got a one client here in Vancouver. And I'm grateful that when he reached out to someone and asked for someone to help in terms of coaching to scale their company, that was his exact approach, he asked for the best. And this person said, for what he was looking for that I was, which is very flattering, and he nicely reminds me that once in a while, that's not doesn't hurt to hear that. But that was his that's his strategy. I've worked with him on a lot of things. And his thing is, and when we're looking for advisors, is always who is the absolute best we can find in North America, because that's where they are. Heroes pick up the phone and call anyone. Yeah, and ask them for their help. And he's happy to pay for it. And somebody said to me, and we talked about is, you know, the reality is, the best doesn't cost that much more. Yeah, sometimes it doesn't cost more, and whatever it is sometimes doesn't cost that much more. But if you have an important enough project or decision, the cost will more than wash out by getting the best advice you can get.
Brad Giles 17:33
And the best advice that you can get matters because it's the nuances in these sort of situations where you need an advisor, that can make a huge difference when amplified. So it could be they could a standard, or a competent advisor could give you standard or competent advice. But it goes without saying that a 14x advisor is going to give you more nuanced considered experience backed advice, that will give you a better chance of having either a significant chance of success or a higher return on that investment. And that I London billionaire mindset. I mean, it really says if money wasn't an option, what would I do? If Yeah, I needed to get the best advice, what would I do, and they don't, they don't get to be a billionaire by Penny pinching. So it's not about spending, you know, if you're a $1 million company, and you say, let's go to the Big Four, and we'll get them to, you know, spend $950,000 with them this year, we will, that's not obviously going to work, we're kind of looking beyond that. It's gonna be within your budget to a degree, but getting the best that you possibly can, within that budget.
Kevin Lawrence 19:07
Getting the smartest person you can afford, it's no different than when you're hiring people on your team. You want to hire the most competent people you can the best people you can for what you're offering. But we just got to take it really seriously with advisors. And you know, interestingly, and we'll talk about this a little bit later, but it's, you know, the fit is important. So, you know, the billionaire mindset I often bring that up with clients and it's about whether it's work in your company for yourself, often around your health and your mental performance, and your life. You know, getting the best darn people you can and I look at our most successful clients, and in all areas work self and life. They're looking for the best darn help they can get so that they can have a great life and be healthy and thrive at work. So surround yourself with the best. It's so who is the right person and then get the best and then reach out to them. And, you know, this takes us to number two, where you know, those of you that might be Penny pinchers, and saving money is a good thing. You just got to save it the right areas, but because cheap help turns out to be very expensive, right, cheap help, if they don't know. And again, we're not talking about something that's inconsequential. We're talking about important decisions. But if they don't have the experience, or the quality or the, you know, the reputation because of weird things that they do, or whatever it happens to be, but, you know, I think cheap health is expensive, because they can, they can guide you to make the wrong decisions. And smart hope doesn't normally cost that much more. But the kicker, many masters will help for free. Mm hmm. And this is something that very few people leverage. But again, CEOs, I work with a do leverage, what they will do is they will pick up the phone, and they will call another CEO. Yeah. And they'll reach out whether it's their network, or their networks network, or it's just cold. They will literally say, here's a person, let's pick up the phone, and let's talk to them. And I want to ask them, because I know they went through the same thing. Do you know how many times people will we'll work with them? All the time CEO call CEO Yeah, see, oh, call co Head of Marketing calls, head of marketing for one brand calls a head of marketing for another, even when their competitors. Yeah, like the amount of collaboration, that's fun, I'm not going to give the industry or the trade secrets. But the mana collaboration, I have seen shocks me. The big thing that I've noticed, though, is most people won't pick up the phone and ask or send an email and ask, yeah, but many, many people that have been so we're working on a project recently, and we're working on structure and organization. And, you know, the CEO and, and, and the equivalent of the CEO weren't really clear on it. What was right, they just reached out to five people a couple through their network, like I don't want keys, I connected them with one, and then the through their network. And they just went and talked to five other people. And then it just, it validated what they were feeling, boom, now they could have hired a consultant, that's another option. But they just called people in the businesses and they got some amazing direction. So you can get it, you can get great help. But don't forget to call basically, your peers. And that's the value of networking. That's the part that that for people that aren't able to do conferences, right now that's missing is when you're in a conference, you can meet those people. And you could have a beverage or a meal or a chat. And then you'd be able to dig in ask some of that stuff and have a relationship. So now you just got to, you know, reach out, but that's it. You know, who's the master, who's someone who's been through this, that's a peer you can reach out to
Brad Giles 22:49
so cheap help is expensive. I want to give you a quick example of that I know a person and they selling their property investment property, just a unit thing. Markets really hot, really hot. You know, there are 150 people lining up to rent a house type of hot. Wow, you know, we're seeing that you know, in several cities around the world, depending where you are, but this person is selling their property. And, and they're complaining to me about how the property isn't selling the like, it's been on for this amount of time and it's not selling and I'm like, well, we'll What have you done and they started at this price and they've dropped it and they've dropped it a bit more based on you know, that I guess the agents advice and it's not selling and they get a couple of people through but it's not selling and I'm like, okay, so and then I go on to the listing and I have a look at it, I look at the agent. And the first thing that strikes me is the agent doesn't have a photo on the listing of themselves a headshot. Okay, that's a bit strange. So then I click on there and I look and they don't have any reviews. Okay. And then I look a bit further and, and then The email address is kind of the equivalent of a Gmail account. Okay.
Kevin Lawrence 24:24
credibility is dropping by the click. Finance is dropping by the
Brad Giles 24:30
Yeah. Go to the website is just atrocious. Like it's like it was made 20 years ago and they Okay, and then the kicker, I go to LinkedIn and I put their name in and the person is a school teacher at the local school as well. And, yeah, so. So you want to know if you
Kevin Lawrence 24:52
were looking for a tutor for your children. That person might have been a great choice. Yeah. But as a real estate agent, when all real estate agents are paid equally, Mm hmm. And they pick the school teacher who doesn't understand marketing and makes themselves look like an amateur.
Brad Giles 25:12
Yeah. And so cheap help is expensive. Now, all I can guess is that the person got a they got a cheaper price. They got it. You know, it was
Kevin Lawrence 25:24
a family member or friend or something I don't I buy or they didn't
Brad Giles 25:31
look it, it D legitimizes the complaints about why the property isn't selling. But you know what, like, the great retort to that is cheap help is expensive.
Kevin Lawrence 25:45
Yes. And why if you mean, the thing is, it doesn't cost you more to go to a different agent, even if you did get a slight discount. Yeah, yeah. That's a great example bread. Yeah. So cheap public exam. And also, we'll go into the third one, the only 14 answers only people that have been there, done that got the T shirt, right. And that's because that experience that we all know how hard it is to learn by experience. It's expensive, it's painful. And I was talking on the weekend with a friend of mine who's looking at an investment. And he was telling me, well, this investment, I know, it sounds like an interesting investment opportunity. But I just asked a couple questions. The guy running it, this investment, who's gonna run the company? How many times has he done this kind of transaction before? Zero. Okay. And it's transactions in other countries. The second thing is, how many times has he done businesses in those other two countries? I think it was one. And then I said, there's a couple other questions that I asked. But this was the first guys Oh, and how many times have you done transactions of this size? Zero. So it was a new business, big transactions, new countries, like it's you know, and just from an investment perspective, right, you when you invest, you invest in the people that are running the investment, but this is the guys first try. So not an advisor, just from an investment. Yeah, I know, from a bit of experience, that's a good way to lose some money, unfortunately. But it's the same principles Been there, done that got the T shirt, that's what you're looking for. And, you know, the thing is, is that they've done it in a similar space or a space with similar dynamics. So for example, if it's the lawyer laws are different in different countries, right. And maybe they've been that kind of contract, but it's on a contract between two companies in the same country. But if this one is, you know, a contract between Canada and Australia, and they've never done that kind of international law, again, that could be a potential glitch, so outside of there, so 14 extra on the deal, and even the market and the environment, all of those things, you know, been there done that is, is worth it. So we've got that we talked about how it's just kind of like top grading. Anything want to add on that, Brad, before we go to number four?
Brad Giles 28:07
Well, the top grading principles very specifically that we want to highlight at this point, is when we're top grading, when we're using that methodology, it's someone who is in the top 10% of candidates that are available at the price that you're offering, right at the price that you're paying. And it's the same with advisors. You could have 10, advisors, all of them are charging the same amount. And one of those will be better than the other ones. Yeah, that's kind of obvious. But who is the one of those that is going to be the 14x? Or who is the one that's going to make the biggest difference with you? And this really, I guess, segues into number four? Because the third point to that is that Who is the one of those that's going to fit like a glove, right? Who is the one that is going to feel like when you're working with them, they're really complimenting you. They're helping and they're hurting you. They're really challenging your beliefs. And you think without that additional brain experience, perspective, belief set, I wouldn't be able to make the right decisions or as considered decisions, perhaps it's so important that this person will fit like a glove. You know, when I work with people, I've got this simple phrase that I say, if we were role playing Kevin, I would say, we're going to work together before we're engaged, we're going to work together to try to figure out is it worth working together, and let's keep doing that until it doesn't make sense for us. Not to Work together.
Kevin Lawrence 30:01
Yeah, and I do something similar. I tell people when I'm talking to Mr. A whole firm does is it fit is critical. And I say that we need to be able to debate like brothers or sisters, or brothers and sisters. And and and work through issues and come out feel strong give each other a hug at the end. Like it's, it's critical. And I was talking about this with Zack my racing coach. And you know, and we're talking about another guy that runs a kart racing team, Craig, and we're talking about the fit between a race driver and her race engineer, the race engineer sets up all the car and makes all the little adjustments. And what we talked about is, you know, there's been situations where a driver will have a not quite technically as good engineer, but could get better results. Yeah, because that engineer and a driver can communicate, it's like, they can finish each other's sentences. And the driver says something, you and he might not explain it, right. But the engineer knows exactly what that means. Yeah. And so they got this symbiotic relationship where it works, where you could have technically a better engineer, but the driver Ninja, they just they, they greet each other like sandpaper, and it just doesn't produce the same result. So you know, that's an that's narrow, but in business, you look at advisors, or people that you work with. You just if you feel it. Yeah, right does do you feel the fit and what that is in a Lego, you said, there is no help and hurt, you know, they, they you get the advice in the in a way where it sticks, and it works for you. And then you're able to go do it. Because technically giving you the right advice is very different than you being able to hear it and receive it in a way where you can act on it. Yeah, that fit. And that's why even with clients, where they give a little bit of test, like I test giving people some feedback and coaching him in my style, and see how it works. Yeah. And because I have a certain approach and assert I am not the right coach for everyone, nor are you there's a certain style certain approach certain beliefs. And, and it works really well for some people and not for others. And you got to test or get a sense of that.
Brad Giles 32:19
Imagine if a lawyer wouldn't challenge you. Imagine if a lawyer, you engaged a lawyer, a type of advisor and imagine if that lawyer said to you, I definitely recommend that you don't do that. And you You didn't listen or imagine to reverse that. If they didn't say that. Or imagine if a lawyer would challenge you and would never say to you, I don't recommend that you do that they would just nod their head and smile and sort of agree with you. That is not a good advisor.
Kevin Lawrence 32:54
No. Or if they had like a weird Australian accent. They could like drive you insane. I'm joking. I like the Australian accent. But the point like for example, like the lawyer that I work with Darcy, he's an awesome guy. Great, great to work with. Darcy talks faster than I talk. And I love it. Because the conversations move, and we figure stuff out and what I know is, is that when I have a conversation, we figure stuff out and I come away better than after a conversation and that's a great measure for fit, you come away feeling better than like you've taken a notch up. But with Darcy he talks really fast if I had a lawyer who was equally as capable as Darcy but talked slow and like it would I listened to audio books at one and a half speed or one in three quarters speed I like so forget the technical capability forget the emotional wavelength. Even the speed of his speech actually makes it different for fit with me. Because I like the fast paced and direct right and again so there's everyone's got different variables what they need to work well with someone. The key is, you know, when you've got a great fit, and you know, when someone that you work with drives you bonkers, yeah. And you got to cut a bit a slack ribbon, nobody's perfect, but generally, it should be a good fit and you should feel energized. And like you made solid progress whenever you talk to that person.
Brad Giles 34:29
Yeah. Because the initial concept is that they will quadruple your IQ. So if you're stuck, if you're that they may be incredibly intelligent, you're incredibly annoying, right? So if you're stuck and have a blockage around any of those things, where it's not a good fit, then they're not going to quadruple your IP, your
Kevin Lawrence 34:54
Oh cuz you're not even gonna call them or if you do, you're not going to listen or if you do listen to You might not get it. Or if you do get it, you might feel less compelled to do it. Like, yeah, it's just at the end of the day, you deserve the best, it's okay to have the best. And if a visor isn't delivering what you need, you can ask for something different. That's okay. You should. And if they can't deliver it, it's perfectly acceptable to move on. Right? And we'll talk about that. You know, we'll talk about that a little bit later on about doing that. But yeah, it's, it's super important. The fit is almost everything. That's why I recommend you'll have a few conversations, right? Don't just pick, especially if it's an ongoing thing or a project interview. And you'll have a sense, confirm the data is the 14x. And then the feeling is the fit. So kind of different formats. You can have advisors, informal, formal, and we'll talk about advisory boards. Informal is just people that you brainstorm stuff by I've got a guy that you and I both know, in the Middle East Ed, Ed, and I had a brainstorm. And he had a question. And we and we had a brainstorm By the way, he ended up sharing some stuff with me that we'll talk about in a future show about other ways structure of companies is changing. And some leading edge companies, it was awesome. Awesome. So we ended up we always have these brainstorms when we both kind of, you know, come up with better ideas, so at night chat on a regular basis, and stuff comes up, just like you and I do and I've got a whole suite of people that I always brainstorm with. But then there's formal advisors, those are people you hire, maybe you have the one retainer, maybe it's a coach, or someone who does strap planning with you, or an HR consultant or lawyer, or you know, someone who helps you raise money or someone who knows, right, there's all the formal. And those would be like formal one on one people that you work with on projects are ongoing. And then there's, you know, advisory boards, which we'll talk about a little bit, but it's, they show up in May, and all are good and formals a great thing to do. Formal, you need those. And then and then advisory boards that we'll we'll dig into a bit more quite broad.
Brad Giles 37:04
But the principle applies across the establishment of these groups, informal, formal and advisory boards. There was a scathing article in the business news of the Australian Business newspaper called the Financial Review. I think it was this weekend, certainly maybe last weekend for listeners, but certainly recently, and they were just saying that everyone on boards, Asterix, not every single person, many people on boards are there just about governance and protecting their own seat. And they're not they're not challenging the CEOs to do the CEOs job. So it's this cozy little club, where everyone is just trying to do their own thing. And that all they're trying to do is protect their seat at the board table. Right. So there's no healthy debate. And there's no challenging, and and
Kevin Lawrence 38:08
your board is changing that is more like a vanity exercise than a value added exercise.
Brad Giles 38:15
Yeah. And they were naming names. And it was Yeah, it was interesting. But the point is, are those people 14x advisors to usual froze again, those are those board members, because in listed companies, it's the same as well, you've got to have a higher quality team that's going to challenge you that's got deep experience, and they fit like a glove.
Kevin Lawrence 38:44
Yeah, and sometimes if your board isn't adding a lot of value or challenging you It could be the CEOs responsibility or even the chairman's responsibility to help set the right agendas are conversations, because the board has a governance role to kind of protect the company on behalf of the shareholders. Yeah, the CEO needs some help with some stuff. So we're, I've seen CEOs leverage, whether it's boards or advisory boards, you know, the CEO sometimes will come with some challenges. You know, one CEO I work with, wanted a board, he set up a governance board in a family business that didn't need a governance board advisory board would have been fine. But he wanted a governance boards where he felt more accountable. And he also recruited some of the best people he could I mean, this was a retail tech startup. And they were hiring. They were recruiting people from Amazon and Alibaba like they wanted the best. So they had tech people and then some traditional retail people from massive retailers like then they hired a firm to help them find the best directors they could. But the CEO would bring problems to the board. Like, hey board, I need help so, but he took the responsibility to get the value from the board in his mind. We're paying for this. Yeah, we're both time and money. But he would take really challenging thing where some CEOs just want to get into board meeting and get out without too much pain. That's a, that's a different dynamic and, and maybe that's relevant for them. But if you're really to get the value from that border advisor, it takes time and preparation to really think about how can they help. And for the people we know that have the they get the greatest values from those boards or advisory boards, they put a lot of time into thinking about it. You know, they have additional meetings with board members to help them move stuff I had.
Brad Giles 40:38
Yeah. And it still comes back to 14x. Like, you've got, yeah, yeah, this applies. If it's a mentor relationship, if it's a coach advisor relationship, if it's formal board, if it's an advisory board, governance board, whatever it is, we need to it could even be a an external HR consultant, as you said, but yeah, the principle applies across all of these. But then also, as you grow, your needs might change. When you are a startup, when you are a $1 million business, maybe the things that you need, then may be different when you're a 10, or a $100 million business, maybe.
Kevin Lawrence 41:29
You're so nice
Brad Giles 41:30
sometimes, Brad, what possibly they may be
Kevin Lawrence 41:33
quite possibly for sure.
Brad Giles 41:35
Yeah, that's, that's a fair comment.
Kevin Lawrence 41:40
If you're scaling up, and you're getting into your first million as a startup, which is awesome. Um, you advice from somewhere, the billion dollar company may not be helpful, because your reality is so starkly different. I mean, there could be conversations that are valuable. But, you know, you might get people surround yourself with people that have got to, you know, 10, or 20, or 30 million. You know, but once you're doing 30 million, someone that's only ever been to 30 can have value, but someone who's done 300, you need someone who's done 300 conceptually, you know, got a company to work with right now. And they're doing, you know, a few 100 million and doing very well. But we're talking about adding additional board members. And ideally, they're well beyond a billion in a similar dynamic business. Right? Well, I'm talking about revenues, right, that they're well beyond, because that's kind of a next point, because there's different thinking to get to that point. And again, in this case, it's multi, you know, multi country, multi location in countries and over a billion just to just be ahead, because there's, it's like, at that height of the climb up the mountain, you see a no different things than you do at lower altitudes. And it's not rocket science, that the hard part is, is that we can sometimes get comfortable, right? comfortable with the people that are helping us that help us to get to 10 million or 20 million conceptually. And, and to then go and say thank you, and go and, you know, find people that are 100 or 200 million, it's totally understandable and reasonable if you're respectful about it, and the people would understand, but some people, I think, just hold on a bit too long, or don't even think about it, they don't even think about adding on some people and finding ways to gracefully think people where they've done a move to the next thing. But
Brad Giles 43:43
But if you were to select a role, let's say for example, and we've I know that we've spoken about this before, if you were to select a role, let's say a head of HR or a sales manager, something like that, and that person has been the has done that role in a big multinational. Okay. It's it doesn't own that's not your only criteria. Okay? Yeah, no, if they don't get seduced by the large companies, it's a horrible trap to fall into. Instead, for sure, he does say they've worked for 10 companies at or slightly above the size that you are now. So they could have a lot of deep in depth experience. So always saying is that would still be that could still potentially qualify them. Because if you took that to the extreme and said, Yeah, that was a $500 million company. We're a $5 million company. The dynamics could be so different that you could be doing yourself a disservice.
Kevin Lawrence 44:52
Yeah. Let me clarify what I was saying this case is they wanted someone that had been in multi countries, but you know, someone who was a director In a multinational is not the same as the decision maker and a company that has operated and you know, a $10 billion company operating system often doesn't translate through to where you're at. So it's very dangerous that you just look at people because they're part of a big company, you need to know was what was their role? Are they strategic? Or were they just executing what they were told? There's so many various I'm, I'm very careful with people when we're looking at whether it's executives that we hire or advisors to be careful not to become what I call brand blind. Oh, they were they were at Apple, they must be amazing, right? Or they, you know, you've got to go through and really see is their actual relevance, the decisions that are made on a day to day basis consistent with what you need them to be good at. Yeah, yeah, that's very important. Yeah. The main thing, though, is that they should make you uncomfortable, they should be and again, I go back to the simple thing of this race coach, he's like a championship racecar driver, I'm, I do it for fun and recreation, and for No, for good times, to my friends, multiple steps ahead, you know, and thing is, is don't go to the convenient person next door, find someone who's outstanding, and is gonna help you master it and probably make you fairly uncomfortable. That's, that's, you know, and in a way where you like it. So you got it, you gotta, you gotta keep growing to keep growing, right? And you need different thoughts, different people to take you to different levels. And I'll, you know, kind of finished my thoughts here with, you know, conversation with Ed, who both you and I know, and you're we're having, and he's always on a different wavelength. But I'm having this conversation, I've been thinking a lot about company structures. And there's always this battle between centralized corporate and autonomous, small units. And as we started talking, had this conversation with Ed, and he, he has this idea in my head, which we'll explore further, and I'm just like, I love this. I'm out. He's sending me case studies and lots of other things. I want to learn about this and understand it. Because it totally opens up my mind keeps me fresh and thinking. And in his case, he's already done the research because he's studying these people, that would be our equivalent of 14 exercise, they move in and out already in a very, very different way. Anyway, interesting stuff. So should we do a quick summary here? Brad?
Brad Giles 47:18
in a that's so the overall principle is that we want you to consider finding the best advisors so you can quadruple your IQ. Okay, so first of all, we want to adopt the Jim Collins philosophy, which is first who always the question you should ask is first, who? And he says then what, but we're intersecting this billionaire mindset. So if you ask foo, foo? Or who if you asked who first, don't ask foo, he's in China, and it will be take a long time to get back to you ask her first, okay, with a billionaire mindset. Okay, they would be saying, What can I who can I get was the best possible person to solve this problem, because I don't have any time. And I have all the money that I need.
Kevin Lawrence 48:15
Cheap help is expensive. You know, the best help usually doesn't cost that much more like minimal, sometimes it doesn't cost at all. And sometimes it could be the same cost. You just have to dig and find someone who's got more relevant experience for you. And then remember, many masters, those being your peers will help you for free gladly. It's kind of the favor system, another CEO or CEO or CFO will gladly bend their ear for you. It's just often bending and you're leaning into your network and asking, or asking for people that could help or just pick up the phone or send an email directly to someone that you think would be relevant. If got to look beyond the competence. The competence is,
Brad Giles 48:58
I've got this certificate, I did the course you've got to look beyond that. And think if I surrounded myself with these 14 x's, everyone who in every facet who's been there done that, who are highly capable on many levels, it can change the game.
Kevin Lawrence 49:17
Yep. And then it fits critical. And that's more of a field thing of the 14 axes of data. The fit is of appeal. And at the end of the day after you work with them on something do you come away feeling clearer, more confident, energized somehow you're up a couple notches and you're we've gotten great value for that time you have spent with them.
Brad Giles 49:38
And this doesn't just apply to your lawyer your accountant, your HR advisor, your leadership team coaches, Kevin and I do or advisor This also applies to mentors, informal mentors or informal advisors, formal boards governance board advisory board Thinking about all of these facets
Kevin Lawrence 50:03
and then finding a you got to upgrade as you grow and it got to keep growing and keep growing that means that you know these people that help you at one stage you'll need different people and sometimes you might just need different perspectives. So that be willing and on the lookout always for excellent people that can help you. Be gracious and thank those that have helped you. But then be open to finding someone new and or different so that you don't get stale or your thinking doesn't get stale. So thanks for listening guys. This is this has been a great conversation. We were looking forward to the show. This has been the growth whispers podcast with Brad Giles, my good friend down there in Perth, Australia. And I'm Kevin Lawrence. For the video version go to the growth whispers comm on YouTube, or just go to the growth whisperer sorry on YouTube. And then evolution partners.com.au is where you can find out more and reach out to Brad if he can assist you. And for myself and my firm Lawrence and co.com. Have an awesome week. See you next week.