Building a Business to Run Without You –
Dave Newell, Operational Design Expert

[00:00:00] Absolutely, yeah. Thanks everybody for making it. I know it’s a Wednesday afternoon, so I appreciate you taking the time to do this. I wanna make sure that what we’re talking about actually matches some of the things that you have. So I know we’ll do a Q&A at the end, but I wanna make sure, uh, the topics resonate as best as possible.

So if there are questions or other things you wanna hear, make sure we, we uncover what those things are. Um, as William mentioned, we run an organizational development… I say we ’cause there’s a team, but, uh, we run an organizational development, uh, consulting entity. Uh, and we have an operating system we call the Five Facets of Business.

The Five Facets of Business looks at culture, strategy, operations, story, and finance. And what we’re looking for is, is each one of those pillars able to stand on its own, and is there alignment between those five things? [00:01:00] And often what we see is many organizations say, “Oh, we have a leads problem. Oh, we have a operations problem.

We need to document processes a little bit more effectively. Oh, I don’t really know what the numbers are in the finances. It’s difficult to read the P&L.” Whatever those issues might be, and the challenge is they often are looking at those things in isolation. And so they take isolated approaches to solve those problems, and then they fix one thing, and then they break something else because they were fixing one thing at a time.

And so we do our best to come in as an outsider, look at that organization and say, “Okay, if we zoom down a little bit, what do we see? What are the obstacles? What are the issues, and what does that tell us from a collective perspective that we need to take from a comprehensive approach?” What we often find is most organizations are good at two or three of those pillars, and they feel really good or solid in those things, and maybe two are creating drag for everything else, right?

You may have a great culture, you may have a great str- strategy, and you feel really good about it, but you can’t get the [00:02:00] deliveries out the door, your service is failing, all that kind of stuff is happening. And so it’s starting to create a little drag on the culture. Maybe the strategy is starting to drag a little bit, whatever it might be.

So we try to take a systems approach, not a symptoms approach, to organizational design and development to see how we can elevate the business for whatever that might be. I’ll stop there. Makes sense. Good. I would imagine most businesses that have $5 to $50 million range, if you take a look at the two areas where they excel at, um, they excel at those two areas because that’s where the founder excels at.

Is that a fair assessment or not? Absolutely. Yeah. It’s usually, it’s usually bound to who your leadership team is and what your… Or if you have a leadership team. If not, if it’s just a, a couple, couple co-founders, whatever it might be, they tend to have biases. They [00:03:00] tend to have certain strength areas and other areas that fall behind.

Uh, and so it really is tied to that leadership. I think that’s really astute. Good for you. It’s because of the hat. Yeah, yeah. Uh, uh, but the other place I would take that is often what we see in the five-ish million range is there are stage gates, right? Like what got you to five million isn’t gonna get you to 10, and what got you to 10 isn’t gonna get you to 20.

There’s these, uh, we call it kind of hitting the complexity threshold, which is, hey, what got us to five million, our founders, our leaders were doing X, Y, and Z. We’re really good at, you know, delivering our service and product to five million, and then they cap. And what happens then is you start to see what we call kind of downward spiral thinking, which is, “Oh, this is broken,” and, “Well, this is broken because this other thing isn’t happening, and I wish we could add AI a little bit more, and, ‘Oh, we should be doing this thing.

We should be doing this thing.'” And stuff, systems start to fail. They’re not operating as efficiently as they [00:04:00] could. But generally it’s because they hit the complexity threshold. We’ve pushed that system to its edges and now that we’re seeing those edges, we start to see a lot of symptoms and we start to see things, uh, stack, so to speak, or compound.

And as those things compound, then the leadership team gets more frustrated and really truly it’s not that they’re incapable of leading or that things are broken. They’ve really just pushed that system about as far as it’ll go. And in order to go from five million to 10 million you have to redesign, reshape and modify that system including how leaders lead the organization.

So one of the bigger challenges is matching the operating system and the behaviors of the leadership team and when those two things line up, that’s when you get that outsized growth or that, that transition out of a stage gate Stage gauge, you mentioned it twice. Um, different business types have different [00:05:00] places where they hit that complexity threshold.

Is that fair? Absolutely. Um, how do you identify that? It’s a good question. I would say if you’re in a professional services space, agencies tend to hit it a little faster. Uh, it’s hard to scale where time equals money, uh, is generally a harder thing to scale fast or scale at volume. Uh, products or services tend to scale a little bit more efficiently.

Uh, it depends. Uh, we’ve worked with manufacturing groups, we’ve worked with real estate, industrial real estate groups. It’s different thresholds for those stage gates. I don’t always like to say, “Oh, at three million everybody experiences X, Y, and Z.” It really depends on the business model. Um, but I’d also say, uh, from how do you identify that?

It’s when– it’s often with the business model itself. Like, what’s our core business? What do we do? If I asked any one of you in the room, if I said, “Okay, what do you do? Like, what’s the core business?” I would imagine about eighty [00:06:00] percent of you would take me on a long walk. You’d say, “Well, we do this, and then we also kind of do this thing, and then, well, sometimes we do this thing over here, and then we add this.”

And usually to me, that’s a good sign of, oh, okay, we’re actually creating or pushing towards complexity, and what we need to do is simplify that core delivery system, what it is we actually do to get back to something that is scalable. So I, I find it fascinating how many people can’t answer that question cleanly, and it’s not a judgment.

I, I probably can’t very easily, if I’m being honest. Uh, but being able to say, “Well, we do this, and we have designed ourselves to do that thing,” whatever that might be. If it’s an agency model, if it’s financial planning, like we are designed to do that, and it’s simple, knowable, repeatable, and scalable. Okay, now we have a ratchet opportunity.

So if that becomes unclear or the edges of that start breaking or we’ve added too many things, it’s usually a good indicator of we’re pushing that complexity line. [00:07:00] We’ve kind of found the edges of our current way of operating. Um, what’s the, uh, trick question? Ooh. I like trick questions. What? Um, what’s the easiest thing to fix of the five, right?

So you think culture, strategy, operations, story, finances. Um, is there one that’s easier? Is there one that you run across all the time and say, “Ha, I know what it’s gonna be,” like, even before you walk in the door, and all we have to do is make five things? Or do they each bring their own complexity matrices to it?

Uh, yeah, they each have their own, they each have their own matrices. The, the one I see that is either avoided or loved is the financial category. Like, either you love it or it’s like, “Yeah, I don’t know what that is, um, and I don’t wanna touch it. Here, you do it.” Like, putting it out on accounting firm or whatever that might be.

I find though that the organizations that are really lockstep financially and know those numbers, and it’s really clean, and it’s managed really well [00:08:00] tend to have better other categories. Uh, I would say of the five, typically strategy is the one that is underdone, and I wanna caveat that with it’s not that we’re not strategic, it just tends to be more action planning than actual strategic planning.

I think a lot of how organizations strategically plan is, “Well, who’s doing what this quarter, and what are you gonna do?” It’s like, well, that’s action planning. We’re planning what it is that we’re gonna do. Or you might hear, “Well, that’s our… You know, we’re gonna start using social media, or we’re gonna start using AI.”

And you’re like, well, that’s a tactic. That’s a tool. That’s a thing that you’re going to do. But what’s the strategy? What does it actually allow to happen? And what pillar is that gonna get us to? Uh, so strategy tends to be a category that I think is underdone in a lot of small businesses. It tends to become who’s doing what, how are we gonna get there, let’s push, let’s push, let’s push, and it becomes operational or execution heavy when really getting [00:09:00] clear about what do we do and what do we not do, which is truly what strategy is.

We do this, not this, uh, and making that distinction. So, um, yeah, it’s funny, uh, that financially-minded people I don’t know, kind of what allows them to have maybe a longer runway before things start to break. Do you, do you see why that would be? Before I go on, I mean, just thinking about it strategically, why do financially-minded people tend to break later than other folks?

Uh, they tend to have more health, generally speaking. Ah, they have more property, they have more- Well, ’cause they just know what cash level they have, and they make decisions based on actual money, actual dollar amounts, not like, “Oh, I think we have enough money. Let’s hire this person.” You’re like, “No. Hold on.

Wait.” Like, how much money do you have? Uh, I’ll give you a quick, a quick, uh, entrepreneur I’ve been [00:10:00] around for a few years who has lost two businesses. Amazing salesperson, total visionary, can stand something up, can get something going, and as soon as it turns into, “We need to structure this,” has… I still think to this day, despite all of my effort, doesn’t really understand what profit is.

And so overspends, overextends, over deals, does all that, and then 24 months later, the business shuts down because they don’t have any money and they can’t make it happen. You’re like, “Well, okay.” So if he was surrounded by a financially-minded person who could help make those decisions and hold the… It’s an extreme example, but the truth is, I think most, most of us, myself included, think we have a pretty decent grasp of what’s actually happening financially or what’s actually happening from a numbers perspective.

But sometimes we see what we wanna see versus what’s actually happening. So that, that true clean data on the financial side truly matters from a decision-making [00:11:00] perspective. It is why we talk about it as alignment between the systems ’cause you can have great financial information, but if you have a bad strategy, it doesn’t really matter.

Yeah. Right? If you have a great strategy, but you don’t have the finances or ops to do it, doesn’t really matter, right? You actually need to have all of those pillars taken care of in order to achieve the next level. Well, then you can have a great financial system and a great strategy, but your culture blows- Oh, yeah

or sinks or whatever is the more appropriate PC thing to say these days. Right. It’s windy. Um, yeah. Yeah. So but if your culture’s not there to kinda get through some of the hard points of building through it, then the system collapses on itself anyways, right? Absolutely. Well, and, you know, I, I’m gonna…

I’ll riff on culture a little bit ’cause I think it’s important ’cause culture, culture is created whether it’s intentional or not, right? So like you said around, you know, even, like, the, the different facets, leaders are often… It’s often indic- indicative of who the leader is. Culture is the same. Uh, [00:12:00] I like to borrow, uh, Seth Godin’s definition of culture.

He says, “People like us do things like this.” And I love that definition. It’s the simplest version of, of culture that I’ve ever heard. People like us, which is we believe these things. So think about that as, you know, purpose or mission. Vision, values, people like us, and then do things like this. We acted this way.

So think about that from a behavior perspective or a ritual perspective. And so if, if you want to have a culture or you want to have an entity that cares about financial health or cares about those types of things, define that as do things like this. And more often than not, I, it’s, it’s pretty rare that I’ve met an organization that doesn’t have some variation of values or some variation of a mission statement.

I think pretty much everybody knows that’s kind of business basics at this point in time. And I would argue that about forty percent do it well, and about sixty percent just put it up on the wall, and they’re like, “Oh yeah, no, we care about these things. It’s totally great.” And then we never [00:13:00] talk about it again.

Nobody’s held to accounts on it. We haven’t defined what it looks like on the ground. We haven’t made it tangible or real. And so, you know, really the leader’s floor becomes everybody else’s ceiling. It’s like whatever you tolerate then is everybody else’s target So culture really, I think, weaves its way through all of them in many ways.

Would you say it’s the glue that holds things together over time? Or is there no real… W-would you say any one of them are the glue or no? I mean, they’re all- They all- They’re all necessary. They, they, they- They’re all important. They all have different pieces. I think culture is the one that, uh, is the, is the least tangible, but can be more tangible than, than it’s often credited as.

The process, right? Like, for us, I mean, oftentimes we’ll think about us, and so I can relate it back to you. Um, so financial planning is kind of this word potluck, right? Like, it’s, uh, [00:14:00] um, um, it’s cash, taxes, retirement, insurance, estate planning. Um, and oddly enough, we usually tackle… In a, in an ideal world, we tackle estate planning last because it allows us to know the most about the client, right?

Um, but the reality is most of the time clients come to us and the thing that’s breaking the most is estate planning, um, from a… ‘Cause they hadn’t updated their documents in twenty-five years since their second kid or third kid or whatever kid was born. Um, um, uh, that was the last time they updated it. So when somebody comes in, like, how do you, how do you start a cycle through?

Is it what’s breaking or is there a pro… Like, what’s the right- Yeah … way to start working with the business executive team, whoever it is, to identify what’s breaking, what’s working, and then how do you start to tackle the, the choke point? Yeah, it’s a really great question. Uh, I like to, I like to use an analogy here.

[00:15:00] Uh, so I’ll, I’ll throw that out, but I wanna start out with generally people come with what we refer to as lagging indicators, like what’s breaking, they can see it, right? So, like, people aren’t getting their job done, sales are down, we’re not hitting our numbers, uh, whatever it might be. Like, those are the things that are tangible that you can see, feels like- Or the, or the business owner is up at two o’clock in the morning, they can’t sleep, their heart burn.

Um, and- Right … it doesn’t go to sleep till four o’clock in the morning. I can’t feel like I can make this decision. I gotta make, I gotta decide this thing, and you’re feeling that level of stress. Absolutely. Those are typically the things that people bring to us, but those are the endpoint. Like, that’s where we’ve gotten to.

What I wanna know is like yeah, but what are the things that are happening over here that are leading to that, right? Like, what is that actually teaching us about the core issue? So think about it in terms of symptoms versus the disease. I wanna know what the disease is. So the analogy we like to use is if you think of, like, if you have kids or you were a kid at some point in time, right?

Everybody here was. Uh, if you ever did a connect [00:16:00] the dots exercise, right, where one to two, two to three, three to four, whatever, you connect the dots, and then it’s an elephant Great. We all have a general idea of what it’s gonna look like before we connect all the dots, but if you run an organization, more often than not, you’re holding 10 dots, and your teammate is holding 10 dots, and somebody else is holding 10 dots, and somebody else is holding 10 dots.

And the problem is we often see… Well, somebody will throw a dot out, and we’ll say, “Oh, we gotta solve that thing. Oh, and then we gotta solve that thing. Oh, we gotta solve that thing.” And so if your operations person is complaining about an issue, it’s like, well, that’s the back left leg of the elephant. And if the salesperson is frustrated about it, it’s like, oh, they’re saying– they’re telling me that the trunk is the problem.

And if I solve each of those things individually, or if I only see those things as individual actions, I’m not truly solving the problem ’cause I’m not seeing the whole story. So my job as a leader in an organization, or my job as the outsider looking at your organization, is to say, “What’s the story behind the story?[00:17:00] 

Keep throwing the dots. Keep telling me what’s happening. What are the themes? What are we identifying from a larger narrative perspective, so we can come back and fix the root challenges that we’re seeing?” Uh, I’ll give you a really clean example. Uh, I’m doing work with a sales team right now. I’ve been– Uh, it’s probably been six weeks, uh, since we’ve made this shift.

Uh, but I was working with the sales team, and I kept hearing the phrase, “Well, I don’t know when they’re gonna get back to me. I don’t know when they’re gonna get back to me.” Right? “Well, you were in a meeting with this person. When’s the next call?” “I don’t know. They said they’d get back to me in a couple of weeks, and I followed up, and I just…

I’m not hearing anything.” I just kept hearing that. I’m like, “Well, did you set the next meeting? Do you know when the next meeting is? So when you end that conversation, did you set the next conversation?” “Uh, no. That’s not really, like, a thing we do.” Okay. Well, you’re– came to me because your sales numbers are down, which is the end.

Like, you’re not hitting your sales targets. So the question is like, well, should we fire our salespeople? [00:18:00] It’s like, I don’t know. Maybe. I don’t know if they’re competent or not. Have we given them– Have we created the conditions for them to be competent? Have we created the conditions for them to be successful?

What are the controllable actions that lead to the outputs that we’re looking for? And so we created a metric, and the metric was, if you’re in a sales conversation, if you’re talking to a human, you have to schedule the next meeting. That should be a one-to-one correlation. So we started measuring that. As we started measuring that, sales closes increased thirty percent in month one just by that simple action to change how they were operating.

No, we don’t need to s– fire your salespeople. They’re actually pretty good. They just needed to understand what that root problem was for what it is that they’re doing. I give that as an example to kind of show the difference between a lagging and a leading indicator. You all know what this is. I’m not trying to be condescending at all, but I’m just trying to show an example of often we come with this end result, this outcome isn’t happening.

And if we only look at the [00:19:00] outcome, we’re going to be looking at the wrong place ninety-five percent of the time. It’s okay, well, what got us there? Can we walk backwards and figure out what’s happening over here? How are we creating the conditions for that outcome to be more true or to be more likely?

Two separate businesses. Um, so I’ll put it out there, and you have to solve these within seven minutes. Um, you got one business that is $30 to $35 million a year, um, that caps out and kind of chokes on itself on a regular basis and then spins wheels. Um, and then you’ve got a– you’ve got the opposite business, um, that is rapidly expanding.

Um, it’s going from 5 million to 10 million to 20 million to 35 million, right? Whatever it is. So the, the business that’s choking itself, um, has a [00:20:00] separate set of issues, and then the business that can’t keep up with itself has a separate set of issues. Um- How do you solve those problems? Yeah. For seven minutes.

Go. Okay. All right. Uh, uh, scenario number one, 30 to 35 million dollar business that stagnates essentially, or even walks backwards a little bit. Yeah, wal- it walks backwards and then it grows back, and walks backwards, whatever, right? You, you, uh, a, a song and dance you’ve seen before. Yeah. Uh, I would say typically what I see from a leadership perspective is they’ve got kind of what we call the linear thinking trap.

And linear thinking is, well, if we can just do this a little bit more efficiently, if we can just do this a little bit better, if we can just squeeze a little bit more juice out of the system. How many of you, if I said, “Okay,” let’s say you were a $3 million business and I said, “Okay, what do you wanna be at the end of 2026?”

I have this conversation with people a lot. 95% of the time people say [00:21:00] 3.2 million, 3.4, 3.3, somewhere in there, right? It’s just we’re gonna squeeze the juice, we’re gonna squeeze a little harder. We’re gonna do the same thing, just harder. And if I said, “Okay, where do you wanna be five years from now?” 90% of the people I talk to say six million.

They double the number, almost without fail. And to me that is a good indicator of what we call linear thinking, and linear thinking is this idea of, all right, let’s just take the next step. Let’s take the next step. We’re not gonna fundamentally change anything about how we operate regardless of the conditions because we’re just gonna…

We’re comfortable, confident, and certain that we can do 3 million. So what if we did 3.2? Could we do the same thing and get to six? So linear thinking comes from this concept, there’s, uh, authors named Kegan and Lahey… I’m gonna totally go over seven minutes, I apologize. Uh- It’s okay. We’ll reference those on You- YouTube later anyway.

Yeah, all right. We’ll drop a, we’ll drop a note. Yeah. Uh, but Kegan and Lahey have this [00:22:00] term that they use, uh, they call it dynamic equilibrium. And dynamic literally is defined as change, so dynamism means to change, to fluctuate, and equilibrium means to come back to middle. And if you think about that term, we as humans often are caught in dynamic equilibrium.

We make a lot of decisions and a lot of choices to stay the same, to come back to middle, to come back to what we’re comfortable with or what we’re certain. And we don’t fear change, we fear loss. So as leaders of an organization, I would poke at leadership first, you know, $30 to $35 million business that cycles.

I would come to that leadership team and I would say, “Okay, so let’s, let’s remove this idea of we’re a $35 million business.” And many of you have read 10X is easier than 2X. I would quite literally just throw out, what if you were a $350 million business? What would it look like? What would you have to do?

What would you have to change? What would have to shift? And it’s not asking [00:23:00] you to be a $350 b- or $350 million business. It’s- Please don’t be a $350 business. Yeah, that would be terrible. I’m kidding. Goddamn. Uh, but what would you have to do? Just even as a thought experiment, and all that does is it breaks the linear thinking cycle.

It’s like you can no longer think about it as, well, if we just squeeze a little bit harder. It’s, well, we’d have to, we’d have to just stop doing this entirely, and we’d have to totally lean on this, and we’d have to get rid of this team. We’d have to drop this person. We’d have to… Exactly. Exactly, right?

That’s the type of thinking that’s gonna get you from 35 to 50 and 60. And the longer you’re in your business, the harder it is to make that decision. The older you get in life, the harder it is to make that decision. That’s not a judgment. That’s just reality ’cause it feels safe and certain to do the same thing the same way you did it last year and it worked.

Well, let’s just do it again, and let’s just do it harder. So the other [00:24:00] business almost has the opposite problem, which is we are thinking we’re, we’re probably rapidly changing very quickly, and we likely need to slow down and put process and structure and system into place enough where not everybody’s running around with their hair on fire all the time Is that, is that h- is that, uh, is that hiring on the second one, right?

On the, on the first one is easy, right? Like we break apart kind of what’s causing the stagnation on that rapid growth. Um, with most businesses that we’re gonna talk about, right? We’re not talking about a scaling technology company. We’re talking about a, you know, um, you know, construction business of, uh, um, whatever type of manufacturing, industrial, whatever it is.

Is it hiring? What is it then that we’re– What do, what do we break in order to call it success? Yeah. So I was talking to a, uh, a civil engineering group this morning that’s a twenty million dollar business that thinks [00:25:00] in the next five years they can be a hundred million dollar business. Interesting. Yeah.

How about that? Yeah. So the, the question isn’t do we have enough work? Do we have a sales problem? Do we have… Et cetera. It’s actually, do we have a replacement problem, right? So right now, leadership is trapped in… Like the CEO that I was talking to is a business development person, good business developer, goes out, has lots of relationships.

There’s lots of places they haven’t accessed yet because he reads every contract, because he understands the ERP system better than anybody else does, and so he gets pulled into those types of things. And it’s like, well- That’s the problem, right? Like, we don’t have a, a, a person to help you elevate into a strategic space.

So, uh, if you’re familiar with an author named Dan Martell, he has a really great, uh, uh, book called Buy Back Your Time. And in it he talks about what’s called the replacement ladder. And it’s a helpful thing to think about when you’re in a [00:26:00] rapid growth type of scenario, is to think if you are a leader of an organization like that, the replacement ladder goes administration, operations, marketing, sales, str- strategy.

And those are kind of the five rungs that any leader is probably connected to. Your job is to figure out how do I get administrative and operational stuff off of my plate as fast as possible. How do I eventually remove the marketing bucket so… And potentially the sales bucket, so I can just live in the strategic category.

And that’s not an overnight fix, it’s not a quick, it’s not a quick adjustment, but most of the time it’s the administrative and operational stuff that gets tied to some of your identity. Yeah. That I’m the one that built, I’m the one that knows contracts the best, I’m the one that knows this the best.

It’s like, great, but you don’t have to be the one to do it, and you can probably transfer that knowledge. How do we get that off of your plate in order to then scale the organization effectively? It’s the classic choke point, right? Exactly. Like, everything runs through the business owner. So, um, from a net- There, there’s a reason the bottleneck is at the top of the [00:27:00] bottle.

Yeah. Great point. Um, so how do you, um… So part of that, that has nothing to do with the culture of the organization. I should say it has nothing- No … bear with me for a second before you judge me. Those are fight words. Yeah. Um, but in a single owner business that’s doing that where the business owner is the choke point, it has something to do with the culture.

It also has a lot to do with the business owner. Correct. Um, so which by itself is kind of sort of the culture. I’ll give you that. Yeah. How do you get the business owner to let go? Honestly, it’s one of the hardest, it’s one of the hardest elements. Again, I’d go back to the phrase, people don’t fear change, fear loss.

What I would try to do with that business owner is figure out what are you losing personally by giving those things away? What’s keeping you from being able to do that? It is often three things: status, [00:28:00] certainty, and comfort. And if I can identify what those are, if I can find other opportunities to elevate status or elevate certainty or elevate comfort, they are more likely to find ways to make that change.

The other piece is I would make it really small. What are some of the smallest things that you can give away, and how do we just create a habit of giving some of that away so you don’t have to… Um, it’s often like, well, you have to, you have to give every operational thing away. You’d be like, “Whoa, hold on.

Like, what do you mean?” You’re fired. Right. Yeah. But if I said, “Okay, you no longer get to write the Friday newsletter. Somebody else has to write the Friday newsletter,” it’s like, let’s just give that thing away. And then you realize that, oh, somebody else can do that pretty well. I’m not gonna die.

Everything’s okay. It turned out all right. Okay, now what’s the next thing? And then what’s the next thing? And what’s the next thing? So if they’re really avoidant of that kind of change, I would just figure out how do I make it as small as possible and do it [00:29:00] on repeat over time to gradually, eventually kind of work them through giving some of those things away.

But naturally they give something away and then it fails because they I mean, it just breaks, right? They give it to the wrong person or just a- I’ve never seen that before. I think that’s just you, William. Sorry. It just didn’t, just- Word Joe Schmo ran into the person in front of him and caught a $100 million lawsuit.

I mean, sometimes that just, it just doesn’t work, right? And so, like, you coach them to do something, and then it just explodes in their face. Um, and we keep moving forward. Yeah. I mean, honestly, it’s a really… I appreciate you bringing that up because it is true. Yeah. It’s hard. You let something go, it fails, and then you feel like, almost like you have to double down and take it over forever.

Yeah. I mean, it… I mean, you’re complete owner of it at that point in time. Yeah, yeah. Really, you never have to give that up again. That was a horrible idea. Yeah. [00:30:00] Yeah. Uh, I’ll buy you a drink, but we’re not taking that one to eat. Exactly. Uh, uh, a phrasing I’ve heard recently that I really like, uh, it’s a tactic we’ve used for a long time, but I really like it from a phrasing perspective, is to delegate outcomes, not tasks, and to be thoughtful about…

Uh, I think we can sometimes, as a leader who is delegating things, I get trapped in that. I start to get, if I get into the conversation, I know I’m gonna have opinions. I know I’m gonna be particular about it. So I have to get myself just out of the conversation, generally speaking, and I have to trust my team with, “Here’s the outcome.

Here’s what the end looks like. Here’s what I’d like for you to be able to accomplish. How you get there, I have to let go of.” And I just have to then hold the line on, “Well, we want, you know, 10% increase in service income in the next year.” Okay, great. Can I give that outcome? Can I delegate that thing to a team member?

And then, all right, let’s strategically talk about how you’re gonna get there, but don’t invite [00:31:00] me to the meeting. Get me out of it. If disaster happens, then it becomes, all right, did I create a learning environment where, all right, keep me out of the meetings and help me understand, like, how you’re gonna do this differently next time.

How can I coach you? And then keep me out of it, knowing full well, fair, full well it’s not gonna work every time, always. Um, so, uh, your five facets- Yeah … um, culture, strategy, operations, story, um, finances- Yeah … customer, clean, handy or clean rider, um, are your way of helping business owners create their own internal operating system.

Um, how often when you help them create their own internal operating system, how often does that need to be revisited, changed, updated, refreshed, whatever, right? Um, you go from three to six, the business is completely different. You go from ten to 20, the business is completely [00:32:00] different. You go from forty to thirty, the business is completely different, right?

Yeah. Um, so how, how do business owners stay on top of it? Yeah, absolutely. I, uh, we often use the phrase, “You’re not– We’re not offering a solution, we’re offering the work.” And what we mean by that is if you think putting an operating system, whether that’s EOS, Scaling Up, Five Facets, whatever the system is, if you think that putting that into your business is a one and done, like, “Hey, let’s just put it in, and then we never really have to think about it again.

You know, now we do this type of meeting or whatever.” Like, that’s often the failure point. One of the problems we see with implementations of operating systems is they implement a portion of the system, and then they think they did all the work, and then they never really talk about it again. They never really do it again.

And then six months in, they’re like, “Well, this system sucks.” You’re like, “No, it doesn’t. It’s actually designed pretty well. It was pretty thoughtful.” It’s that we didn’t align the behavioral aspect of it. We didn’t kind of put, put the right leadership [00:33:00] approach or the right leadership way of thinking about it in place at the same time to help that system achieve what it’s trying to achieve, right?

Any of those systems, Five Facets, EOS, Scaling Up, Clinical Group, like there’s no shortage of systems. I’m not trying to advocate for one or the other. The problem we often see is how they get implemented puts a lot of pressure on the system to solve all the problems, and not so much aligning systems and behavior.

So when we implement the Five Facets in an organization, we very much do both. It is a hands-on implementation, and we’re also trying to increase kind of the, the long-standing learning environment of that organization we’re in. This is the thing we keep on the table all the time. We are consistently talking about who owns what in the organization.

We’re consistently talking about does this meeting structure work? Consistently talking about are we aligned in operations in the way that we need to be? Are we trapped in linear thinking? Are we caught in those ways? [00:34:00] We’re trying to create a conditions where leadership is elevated, but so is the business Um, so anybody here music fans?

Music fans. Um, we’d be, we happen to be a, a family who likes a, a artist called Billy Strings. Um, and years ago, the backstage manager would always come out at Billy Strings, um, and they’d say, “10 minutes to showtime. Five minutes to showtime. Two minutes to showtime.” And Billy got frustrated with his, his, his managers, and he said, “That, that puts a lot of pressure on me.”

Um, and so, um, he’s like, “Can you call it something besides showtime? Something besides a countdown?” And so the guy was like, “How about, how about fuzzy rainbows?” He’s like, “10 minutes to fuzzy rainbows.” Um, and so, and then, and then five minutes to fuzzy rainbows. So when Billy comes out and they announce it over stage, and it’s the countdown clock, it’s always 10 minutes to fuzzy rainbows, five minutes to fuzzy [00:35:00] rainbows.

So what I’m saying is, is I just got a, a five minutes to fuzzy rainbows from Don in the back- … for five minutes to 5:15. Um, so anyways, um, operating systems, they’re, they’re out there, right? Yeah. Um, choosing the one that fits the business, like, um, it’s like anything else. It’s personality, it’s culture. Like how, how do you help people work through the right fit for what they should walk into?

Yeah, it’s a really good question. I would go back to, I would go back to- Kind of assessing where you are, right? Like, there’s a lot of one-off solutions for particular things, right? Like if you have financial challenges, and that is by far the thing that you’re experiencing the most, like find a CFO, a fractional CFO, find a, you know, whatever it might be, accountant, et cetera, if that’s really the only thing.

If you were seeing issues across the organization, [00:36:00] there’s a lot of different assessments that you can take that’ll help you make sense of what that problem or what those challenges are, uh, and to see it a little bit more comprehensively. Again, it’s that kind of collecting dots component. From there then it’s, okay, which system meets what we need the most effectively, and which system is actually gonna be something that, uh, as it’s getting implemented, we’re being supported in that implementation in the way that we need to.

So, you know, EOS, Scaling Up, Pinnacle, Five Fs, we all implement differently, right? I would argue we’re quite hands-on in the implementation process. It’s more of a partnership. In part we call it, like, implementation coaching. Like we’re supporting you in implementing a process and implementing a system, and then creating the behaviors over time.

For some organizations that’s necessary and important and effective and it works, and for some organizations it’s just not the right fit, right? They might need more of the EOS style [00:37:00] which is, all right, we’re gonna have a meeting. 30 days later we’ll have another meeting and your job is to implement in between, and it’s a little bit more hands-on.

That works for some organizations. I’m not saying one’s right and one’s wrong. They’re just different applications of how to put a system into place. So I think there’s both, which is which is the best system for us. Honestly, most of the systems are relatively similar in terms of the tools that they put in place.

It’s how… like what do you need from an application and implementation perspective that’s gonna make it stick, last, and actually achieve the results that you’re trying to achieve? I heard a really good quote today from a different client. Uh, it said, “We’re not getting paid”… uh, “You’re getting paid for results, not for attempts.”

And I thought that was pretty good. Uh, so, uh, if you’re gonna spend money on something like this, figure out, well, which is the, which is the one that’s most likely going to give us the results that we’re looking for, not necessarily we just felt like we did an attempt and we feel good about [00:38:00] that. It’s, yeah, but are we actually achieving, are we actually solving the problems that we’re, we’re aiming to, aiming to solve?

Well, I’ll just want to take that a step further as, as we round out time. Um, A, thanks as always. Wasn’t fuzzy rainbows? It’s, it’s, it’s almost but it’s not quite. Okay. Um, but I might take the whole time so I apologize if I do. Um, I- As you walk through those things, culture, strategy, operations, story, finances, right?

We didn’t really touch on story as much as we could have because it’s such a… I love story. I think story wins the day all the time, right? Like if you tell a good story, uh, I mean, there’s a thousand books out there about telling good stories and how it works. Um, but you walk through those different things and, and finances, like there are problems.

Um, and there’s challenges, and there’s, um, there’s some cussing, um, and there’s some hatred- … and there’s a boatload of frustration that goes through those different types of processes, right? [00:39:00] And when that’s the case, like trust matters, right? Yeah. Like you have to, you have to trust a couple different things.

You have to trust the process, you have to trust the system that’s there to support you, and then you have to trust the person that’s across the table from you. Mm-hmm.

Because if you don’t trust the process and you don’t trust the person, then when it gets difficult and you say, um, I said cussing, so I apologize for anybody that doesn’t like cussing. You say, “Shit,” and you give up, right? It, it’s too hard. It’s not, it’s not working. I don’t trust you. He’s not saying the right things, and you walk away.

So when things get difficult, you have to trust the process, you have to trust the person, right? Mm-hmm. Um, otherwise it, it, it doesn’t work because you quit and you go onto the next thing, and you’re constantly shifting gears. Yeah. Well, and trust is, trust is an outcome, right? There are conditions that lead to trust.

Uh, but one of the things I wanna mention, maybe as the last thing, I think, other than fuzzy rainbows, um, is, uh, uh, each one of those facets in [00:40:00] every organization has essentially three layers that are taking place at all, all the time, right? So there’s what we call the clarity layer, the alignment layer, and the execution layer.

So even within those pillars, like even within culture, people like us do things like this, right? People like us is the clarity layer. It’s us saying like, “Yeah, but where are we going?” So if I ask you the question, if we were gonna go hiking together, what’s the first question we ask ourselves? Where are we going, right?

That’s the clarity layer. Everybody’s asking that question in your organization every day. Where are we going? Where, why are you asking me to do this? Where are we going? That’s the clarity layer. That’s the top of the mountain, right? The other part of the clarity layer is also the second question, which isn’t how do we get there?

That’s the question that most people ask. But the second question truly is, yeah, but where are we on the map? So the first thing you do when you pull into a parking lot, if you’re going for a hike, what’s the first thing you look for? It’s a you are here sticker, right? And if you really want clarity, it’s [00:41:00] where we wanna go here, and we’re here right now.

Okay, now we have clarity. A lot of people in your organization love the clarity layer. They want to talk about the clarity layer. That’s the only thing they want to talk about, right? The alignment layer is strategy. That’s the, okay, how do we do it? Which path are we going to take? We’re starting here. We want to be there.

So which path is the best way for us to get there, right? That’s the alignment layer. And then the last layer is the execution layer, which is, do we have our water bottles? Do we have our backpacks? All right. Are we in condition to hike? Are you guys coming with me? Let’s go. Who’s doing what, by the way, right?

In every one of those facets, those three layers exist. And in every meeting you’re in, those three layers exist. And more often than not, miscommunication shows up when you have your execution person asking execution questions of a clarity layer person, right? In my organization, my number two is an amazing executor.

She’s like alignment down, and I’m alignment up. And I’ll be talking about an idea, and I’ll be saying, “Hey, you know what I think we should do? I think we [00:42:00] should do this. I think we should move it this way. I think we should do whatever.” And she’s like, “All right, let’s document it.” I’m like, “Hold on. We haven’t even made that decision yet.

I don’t know why…” But she’s, like, ready to go. So we’re having two different conversations, even though we’re talking about the same thing. So when it comes to the facets or comes to an organization or it comes to how we lead, it’s, it’s paying attention to, okay, well, where do we feel really solid? Do we have the clarity layer covered?

Do we have the alignment layer covered? Do we have the execution layer covered? Any one of these things, and also are we communicating about those things effectively? And I would imagine if you go into your next meeting with that baseline knowledge, you might identify, oh, I’m totally a clarity person, or I’m totally an executor.

Just listen for what the person across the table or the other people in the room are saying. You might be like, “Oh, that’s totally an execution thing.” I’m, I’m notoriously bad at not paying attention to the exe– I’m like, “Wait, wait, hold on, hold on, hold on. We don’t need to talk about that.” Yes, we do. We absolutely need to talk about that.

[00:43:00] I need to get out of my own way to listen to those things, right? So anyway, I started rambling at the end. I’m delaying Fuzzy Rainbows, but- It’s beautiful. Oh, well, thank you. It’s not. It’s very much close. All right. Well, I guess- Yeah