Episode Transcript
[00:00:00] Speaker A: Welcome to the Independence by Design podcast, where we discuss what it means to be a business owner and ways to get unstuck from the day to day so we can design a business that gives us a life of independence.
All right, everybody, we are back. We are on the last milestone of the seventh module, which is a leadership team. Kim, we're going to have a more of a banter back and forth on this one. I'm looking for some discussions because we're refining what as we're finalizing the overall owner's roadmap. Of all 27 milestones, this is one that I've. I've thought a lot about because we've been going through the leadership module through deductive reasoning of, like, how do we actually get leverage over our time?
We. That's what led us to, like, the functions. Okay, what does each function do tied to each, you know, bucket of the income statement?
In the last milestone we were talking about, okay, how do we actually have a developing roadmap to have one person's name at the top, but it could be evolving. Coach, mentor, plus internal, plus fractional. We talked a lot about that within the kind of the constraint of time and cash. Cash flow, I should say.
Out of the 500s on podcasts, I don't know how many have been on leadership. Kim. And we talk about, like, what is leadership? I just recently, you know, went through with David Kachui talking about his management mastery.
So I, like, when I think about what this milestone is and what I want to unpack with you is like, how do we confidently hand off duties to someone that we trust?
Like, I think that's what this. This milestone's all about is like, okay, like, we. We get the outcome that you and I were talking about with the group yesterday in the group training. Like, okay, we actually trust the person that's doing it to manage it in the experience that I'm hoping.
And we want to talk about how we do this. I want to hear about your experience at ITR and all the different teams that you've been a part of. Like, I think about when I was on my soccer team.
And, like, you pass the ball to your teammate because you trust them to continue the game because you can't do it all yourself.
[00:02:19] Speaker B: Right.
[00:02:20] Speaker A: It's. I mean, it's a team sport.
[00:02:21] Speaker B: Yep.
[00:02:22] Speaker A: So, like, this is a team sport. And like, and like, if we just use a sports team, like, you have an owner of the team, you have the coach of the team, and then you have the players. I mean, like, there's such a. An interesting parallel, I think, here. And it's that experience of, like, total faith and handoff, of like, I'm. I'm passing the ball, or it's a relay race, you know, you're handing off the baton.
And there's a lot of stuff that has to be true for that to happen.
And I think that this milestone is talking about, what does that handoff actually look like, and how do we do deal with that handoff, and what does that leader have to look like? I think the. The readiness assessment that we've worked on has a lot to do with that. But, you know, I don't even know where to start from here. You know, like, from, like, I'd just be so curious is, like, with all of the leadership stuff that we've been talking about, what has worked for you? Like, what do you see where it's like, okay, you've had train wrecks versus you've had really good successes. Like, how. How do you think about this?
[00:03:22] Speaker B: Well, to start with that last thought, I mean, the train wrecks that I have seen is that I have graduated really, really smart, dedicated people into roles before they were ready for them. They weren't trained for them. First it was, you were really good at something.
So I give you the title, and then the thought process is, I'll just train you along the way.
[00:03:43] Speaker A: That doesn't train. Is that, like, technical training, like, the technical part of the job, or, like, what does it mean to be a leader kind of part of the job,
[00:03:51] Speaker B: or, like, be all of the above? Right? Like, you know that they have the respect of the team. You know that they have the capability to take on the higher skills that you ask them to do in that leadership role.
But they've never been a leader before, and you just kind of threw them into the deep end and expected to just be able for them to grow their skill set over time.
So they're kind of growing into the role versus being ready for the role, I guess, is a good way for me to put it. And what I saw happen when I. And I've seen this happen in many different circumstances is that they end up losing the respect. Like, the team below them ends up losing respect for you. The person above the leader you just put into place, and the leader, leader themselves, even though they respected you both in the beginning, before the promotion happened.
[00:04:41] Speaker A: Yeah, totally.
[00:04:42] Speaker B: And so you just end up eroding your culture, and it just makes a mess. And that's because I feel like we see promise in people as, like, Say a leader, we see promise in the next tier below us. And so we're like, here, have it and then I'll work with you until your feet fully fill the shoes.
And that I have not seen that work.
The way that I've seen it work. When you said things that worked well is like you said, we have the readiness assessment and such and have them work for it and they don't get the title, the, the promotion, the salary, all of that until they are checked off on the assessment. And they've been through the fire in certain circumstances.
So that's something that sticks out to me too a lot, is that you never know how somebody's going to handle a situation in real life until you see them handle the situation in real life. It's like me saying I can give you all the answers on paper on how to handle a very stressful situation, but until I'm going through it, I don't know what my fight or flight is actually going to do in that situation. And so the really successful leaders that I've seen have been, for lack of a better way of explaining it, like academically checked off that they have the technical skills to do something and they, they pass say the EQ tests and soft skills and stuff that you may give them written down and like verbally and role playing with you, but then still don't promote them and have them slowly start shadowing you. And then after they shadow you, have them slowly start taking over the situations in the meetings and coming up with the decisions and you're there as a sounding board. Like that slower transition over time has been much more successful.
[00:06:27] Speaker A: All which is so freaking cool because I think you just summarized the entire milestone, like the entire outline, which is encouraging to me because that is what we're trying to do is this like the IBD material is self evident and first principles, which means it's not an actual opinion, it just should be how it works.
So I want to unpack so many parts of that of like how we actually go about doing that. And you and I are going to be riffing on this because I think it's also going to be helpful for us. Kim did compare and contrast what we're talking about here with all of the leadership gurus. I mean there's got to be hundreds of thousands of these books and like, I don't have a psychology background, but I've eaten a ton of and been on a lot of teams. So there's like, like the ability to understand like what, like you just said what's worked and what's not worked, and let me throw a couple other experiences or metaphors at you and then we can like take them. What you just said said, how do we practically do this using the IBD operating system and some of the other actual just practical tools and, you know, meetings and stuff. So outside of that soccer analogy, I was thinking about like, okay, as a parent, it's the same thing, right? You want your kids to understand how the world works and to have enough emotional eq.
So that way, like, like, I think about it like what I said to Megan, this has a lot to do with the devices, right?
So our kids don't have devices right now. They're turning 10 and it's an onslaught from the whole world to force them to get devices.
And I said, megan, we're not gonna be able to. We're not gonna be able to control our kids. Like, like, that's not the intent. Like, we are not micromanagement parents. What I want is like, when, like when they're sitting in front of there is. I can picture this. They're in a group and a phone comes out and they're all 10, right? And like, these are super computers that have access to everything. I'm like, dude, we had to do like, really crazy to see bad stuff, right? Like, I mean, if you think back in the 90s babies, like, you're like 80s and 90s babies, like, you had to like move hell in high water. And like, they have just the full exposure to everything I want in that moment, all of our parenting shows up where they have the self confidence and the judgment skills to go, I'm out.
Because like, we can't control someone else's parent and that child and he just. All you have to do is go into these neighborhoods where there's 25 kids all like parenting themselves on phones in these neighborhoods, and it's just like, holy, this is a lot.
So we can't control that. We can't. We can, you know, so, like, it's this process of all of that preparation where they're in that me. They're in that situation, like, I'm out, right? I've got self confidence. I know what right and wrong actually is.
So I have been taught what right wrong is. I know what right and wrong is. I've got good judgment and I've got enough self confidence where people make fun of me for this. I can say F off maybe. Hopefully a 10 year old wouldn't say that. But do you see what I'm saying? It's like it's this judgment process. So it's all of that work and that sort of like I was relating to that. In the real world, you might have all of the technical knowledge and then all of the eq, but like, it's not until that situation where we're not there, someone has to go, I'm going to do this versus that.
Which is where I think values come in line. We're like, his values is how we're making decisions. And that's where I think David Kachui's value ladder comes into play. It's like a decision making. Like, how do I actually determine what I value in that moment?
But then having the courage and the, and the confidence to say, given everything I know this is what I should do.
[00:10:15] Speaker B: Yeah. And I think I agree.
Just to add to that, I think an important lesson that I've seen new leaders learn early on is that you don't always have to have the answer.
And so that's, I think, just because I feel like as a new leader, you're like, I have to have the answer so and so can't come to me with a question or concern. Like, I have to know how to respond. I have to know how to. What words to say. I have to know how to console them. Do I not console them? Do I use empathy? Do I use, like, do I have to be more strict and confrontational? Like, I need to know how to respond and react in every single moment. And I disagree with that. Like my leader. And you can say if you think this is wrong or not. But my leadership style has always been very just open and honest where there have been, I can't even count on my hands and my toes how many times I've said to an employee that's come to me with something, I don't really know how to respond to the situation.
So I'm going to think about it and I'm going to get back to you. Right. Like, and it's fine to admit that you don't know how to handle something. I don't have the answer for you right now, so. But I will get you one. And then always making sure I circle back around and I address it and I fix it. But I consult with my peers all the time throughout my, my tenure of being a leader and having a team where if it was a situation I was unsure of, I would say that to the employee and then I would go consult, say with my dad, somebody smarter than me. I would go find somebody smarter than me and talk with them about the situation.
[00:11:42] Speaker A: Definition of smart.
[00:11:47] Speaker B: Oh, I think I'd have a lot of a definition for smart, so I asked.
It's not just knowledge. It's, it's, it's so many things. Knowledge, experience, wisdom.
The ability to know the things that you don't know and you do know and decipher between the two. The ability to know your limitations and accept those limitations, but still learn to grow and try to sharpen your, your skill set. Knowing that tomorrow me is always better than today me.
I think it's just maybe self awareness. Really, really good self awareness. I'd probably throw under there too.
[00:12:19] Speaker A: So when you're going to ask someone smarter than you, it's. You're looking for those things.
[00:12:25] Speaker B: Yeah,
[00:12:31] Speaker A: It's so interesting. Like, I don't know if it's because I've just been, I've been, I've been isolated in a bubble of entrepreneurship my entire life. So like, I have the pleasure and I think luxury of being around free thinkers most of my life.
And so like, I mean, I don't know if I've ever actually submitted a PTR request in my entire life.
And so what I, why I bring that up is I think that as entrepreneurs and owner operators, we all feel that kind of, that same level of like, of course, Kim, like, of course we're not, we don't know, no one knows what they're doing. Like, so it's. But as we get look to pass on to a leader.
I have a friend, Brandon Henry. I think it's one of my favorite quotes. Experience is what we get when we don't get what we want.
And I was like, oh my God, that is unbelievably beautiful.
So we as owner, operators and leaders have experience, but what we're trying to do is teach someone else, which is wisdom. Right? Like we're trying to teach someone else using wisdom instead of like, hey, you have to learn this on your own. Like, so it's this kind of weird combination of.
I think a lot of as we're handing off to other leaders, they think that they need to know the answer.
So I think maybe my direct way of responding to what you're saying is I think there's a lot of times a lot of our clients probably feel this way. I think they're, they act a lot of that way. But then how do we teach the next level of leaders that we're grooming that it's okay to not know?
[00:14:00] Speaker B: I think by leading by example and, and pointing it out. Because I can say Like I, like I already did say in many instances I've said, I don't know, let me figure this out and get back to you. But I've had other leadership come up from behind me and they would have the instinct to need to always answer right away and always have the answer be the know it all. And I would go to them and say, but I don't lead that way. Like why? And I realized that was a shortcoming in my own is that I didn't point that out when I was grooming the next leader behind me.
Right. I wasn't like I wasn't vocal enough about so and so you don't need to always have the answer. It's okay. And it actually earns you respect to be human with your team and not some superpower with your team. So I think again, it's just another part of the educational process.
And it's so interesting to me growing the next tier of leadership beneath you because there's so many components. You have your iq, your eq, your technical skill set, empowerment. So it's not even just education. There's also empowerment. There's. It's okay to fail, it's okay to be wrong. Like all the different like, but not being too wishy washy while still holding to like holding their feet to the fire for the education. Like, it's not an easy process. And that's why I think there are so many programs out there on leadership is to help because this is an area that's not easy to especially when we're talking about like high level leadership positions.
[00:15:32] Speaker A: And that's why I started with the experiences that I'm trying to engineer because I, I gave it in the group call yesterday, like bringing you and Paul into the fold and that, you know, if Pat was our full time cfo, I'd be saying the same thing. But he's just the Buddha and the wings. But like Aaron trying to get him involved, he's like, I want people that I trust implicitly that can hand the ball off to.
And then it's like that experience is what, in all the things you said is what I think helps with that experience. The experience becomes kind of that fundamental truth which is I want to hand the baton off. Like, I mean I ran the 4 4x4 most miserable run ever in track and field and you're in a freaking dead sprint around the track.
And then like I would you if I'm handing the baton off to you, you're freaking sprinting.
Right? Like, like I have to like you can't just be standing still. Like, I have to hand it off to you. So there's this period of, like, in that window of, like, you start running, I then hand you the baton.
We're in the same area. We are now both holding it while running. And then you take it while I get to puke on the side, because I just sprinted around the track.
And so it's that. That experience that I think we're trying to engineer, which then takes the faith that you're going to do the work you have, the emotional intelligence, the judgment call, like, you're going to do everything you can. And I believe that you're going to do everything you can to win.
But if we don't, we don't win as a team.
Right? Like, I. In that situation, like, you have different leg. You know, you can pinpoint weaknesses in the plays or in the players, but the whole team either won or lost.
And it's that level of faith and confidence. And I think all these leadership programs, I mean, are underneath that experience.
And I don't know, I just. Now I'm kind of lost where I was going with that. It's just, I get. So as I was looking at the material for this milestone, like, I have literally done so many leadership podcasts, and there's so many books. I literally have.
Camille will be on the podcast. So she just wrote the book. It was about her leadership journey, and she was on the bike. She grew and sold a company. So there's another one. And, like. And it's a fantastic book. And I'm not discrediting the book. I'm just saying, like. But how does that fit in relationship to the game that we're trying to play? Like, how do we use these different tactics to help us with that experience?
I don't know. Help me. Where am I going for?
[00:18:12] Speaker B: Well, no, I loved the. I was just waiting for you to pause. I loved the.
[00:18:16] Speaker A: Don't do that because it might never happen.
[00:18:18] Speaker B: I was wondering where you're going with it.
[00:18:19] Speaker A: So I love going.
[00:18:23] Speaker B: I love the analogy you just gave with the sprint, though, and the handing off of the baton, because my guess, I've never done that. I would twist an angle if I tried to run around a track. But my guess is that you guys practice that before you actually went into a game to do it. You practice the.
He's standing there still. You're coming around the track. You guys start running in tandem. You're holding baton together, and then you pass it off. And, like, I'm sure You guys practiced that many times before you actually got into a competition. And I think that's a perfect example of how to groom the next leader into their role is that you're standing, I. I'm sprinting, and you're watching how I'm going around this track. And then now you gotta copy me and do it with me in tandem with me. And we're gonna hold it together and then I'm gonna hand it off, but you gotta practice that. So I think that was the example that I was trying to give in that you slowly start shutting things off. So whether it's a technical skill set or the people skill set, like, I would have them join me eventually for one on ones. My one on one sessions. And so I would sit. They would just be sitting there shadowing me in these one on one sessions. And then it turned into. How about you start running the one on one sessions and now I'm shadowing you. And then it turned into me getting feedback from the team. How do you think so and so did in the one on one sessions?
[00:19:39] Speaker A: Yep.
[00:19:39] Speaker B: Like, or she did things slightly different than I do. Do you like it? Do you not like it? And getting feedback and sharing that back. Right. So it's all just this practice to get into the rhythm. It's not just, poof, you're now the CFO of the.
[00:19:52] Speaker A: You know what I mean? I love, you know, visual. I'm going right. I got going on my hand. Right now is the alternative to that is running around the track as a 4x4 and then realizing there's no one for me to hand off the baton. And me turning to someone in the crowd and chucking the baton at their head and say, go run.
[00:20:12] Speaker B: Yeah. And if that was me, A, it would be a miracle if I caught it. And B, I really can't run. So I'd be like skipping or something. All right, so side note, and we can edit this out if you want to, but when we go to the beach, Frank literally throws the Frisbee. Not towards me because he thinks it's so funny walking watching me try to run to catch it. Because I run so. So awkward. Like, picture like Ace Ventura trying. No, no, no, no, no.
[00:20:38] Speaker A: Phoebe from Friends in that episode when Phoebe and Rachel were running,
[00:20:45] Speaker B: Rachel's like,
[00:20:46] Speaker A: what the hell is going on?
[00:20:49] Speaker B: So bad. But again, practice.
[00:20:51] Speaker A: So, okay, so I love this.
And this is actually, like I said, the.
The entire container behind this milestone. Because milestone 19 was about how, like, who are the actual players? Right. So all of IBD is What's the game? What are the rules of the game? The game, the, the scoreboard, all that stuff. Time, casual, wealth. All these components are like, you know, if you think about the functions as like, okay, if, if. Now this is maybe going way too far, so you can stop me, but module or phase two of the build phase, which is the sustainable financials, predictable revenue and transferable margins are forwards, defense, goalie. Like, there's like, we have the, the actual functions. And then my milestone or module. Seven of the leaders are like, who are the players? Well, there are the actual three players. And we have right forward, right D, and then, you know, sweeper, stopper, and then goalie. This is their job, this is their player. This is what the role is.
Then we were talking about the roadmap of like, how do we fill those roles?
And then now it's on this development plan of like, how do we practice over time and then truly hand it off? And so within that whole context.
So to respond to what you were saying is where we want to use the tools that you and I have created, which is the functional assessment, which is the technical, like the technical scorecard of the function, like the things that have to be done.
Technically, the readiness assessment is what does it look like to actually hand off someone Hand, like where we actually trust the person. That's where I think it's the, it's the actual letting go checklist is what the readiness assessment is of. Like, okay, they're able to. And so that's why there's the three buckets in the assessment. It's the technical readiness. Like, do they actually understand the game?
Do they actually know how the game is played? Then the second bucket is then the judgment. Are they using judgment like good judgment? And have we let them use the good judgment? Have they practiced that good judgment? And then the third bucket is they actually own it. So then it's like they're actually going off and doing it.
And I think to how this all ties together is in the IBD operating system. We have the quarterlies, the monthlies, and then the annual reset. So that quarterly boardroom rhythm, the executives are coming in to that, like, let's talk about like, what final good looks like. And then we can talk about how do we back into that and how do we use these different tools and these different experiences. But the final outcome of that quarterly board meeting is the executive team went through and built an entire annual budget at some point.
[00:23:40] Speaker B: Right?
[00:23:40] Speaker A: You and I are doing that in Q4. We're doing that at the Owner summit.
So the revenue, the CRO built out the whole revenue budget and there's a process of doing it with that person at some point, right? And whether it's a fractional or in person, like you, you, we did it together and I've always said through osmosis, but I think the 4x4 handoff is a better analogy. Right? Like we did it together at one point. I did it the right way, so I actually know how to run and do that myself. Then we do it together. Then at some point you can do it on your own for the annual budget. And that's the forcing function behind those three different leaders. Like they got to do the budget, we got to do a budget. So like it's a forcing function. Okay, are you going to do the budget, are you going to own it? Or are you going to have a fractional leader or a coach and, or a person? So there's this process of building it out. And then the next year, quarterly, we're checking in on the whole quarter and we have that board meeting and then we're looking at the whole 90 days at one quarter, quarter at a time, on track, off track. And then we're doing that monthly with the, with the financials once they're closed, on track, off track.
And I think we can have those same monthly. Like that's a process of the handoffs, like you were saying. Like there's going to be a time where we're sitting in those meetings if we. Because like those, those monthly meetings for the CRO, CFO and COO should be done with the CEO. So the people listening in and our clients, nine out of 10 are also the CEO. So they're having those three meetings every month which are also our Tuesday trainings. Right. So we're having that container of like whether it's you to begin with the owner, operator, because they need to figure out what that looks like, then it's both of them. Then at some point it's just the leader. And that's literally what we've been saying to people, right?
And then that allows us to be prepared for the quarterlies where at the same, the same thing applies. At some point it'll be everyone doing it together. But the ultimate what good looks like when I sit on like my board meetings, Kim. And if the whole team's built out and we have a whole five year plan and we got a monthly budget, all I'm doing is just listening for good explanations.
Personal responsibility, obviously the technical wherewithal should be there. If we, if we let that. If, if they're doing it, if we, if we handed this off before they're technically ready. That's a. Should be more obvious than I think the personal soft stuff that we're talking about here.
But like we're sitting there just going, all right, like it's kind of going back to the soccer analogy. Like I handed off the I or whether it's the 4x4, the soccer analogy. It's like if you hand it off and you're like, whoa, they F that up because they were smoking cigs last night, ate McDonald's this morning and then they pull the hammy and usually just go like. Because like, I think we could look at our teammate go like, I know what you did to cause this problem and it was all your fault versus you did everything in your God given ability to try to win. And happened. It was raining, you slipped. Like, there's no way I can be mad at you for that. You know, I mean like, next time we got to get different shoes or we have to go look at the track, you know. So we're trying to figure out in those quarterly meetings, like, is it an economic issue? We got into war with Iran all of a sudden happened that we didn't see covet happened. Like, I can't get pissed at you for that. But as a team, we can overcome that together.
What's your thoughts about, like, just how I laid that out?
[00:27:14] Speaker B: No, I like it a lot. I like it how from an IBD perspective and correct me if you think otherwise, I don't think we're competing or replacing these other leadership coaching type programs that are out there.
What we're doing is just showing what the seat should, like the person in the seat should be able to do and then providing you with an assessment for the person to say, does this person have the ability and to be able to do the like where do. Where are they on their. Where are they on their journey to being able to fill said seat? But then I think it's still up to, based on the results of those two analyses and those assessments, it's going to inform the owner operator what type of training that person needs to move to the next rung of the ladder in their, in their training process. So I think we've given them the tools to identify what good looks like and where your person fits within that picture and where they're weakest. So that way it helps you know where to start with their training program and where to focus next, which I think is a big blank area.
Like knowing.
I don't feel like, Let me think about this, how I want to word it.
I feel like I've seen a lot that leaders don't really know what the person needs in terms of training, so they just put them through standard type training, like executive coaching, whoever is banging
[00:28:49] Speaker A: on their door at the moment.
[00:28:50] Speaker B: Yeah, exactly. Versus ibd. Giving that owner, operator, the tool, the assessment to say, this is where you need to start if you want to try to get that person into that
[00:29:01] Speaker A: role,
[00:29:04] Speaker B: which I think is a fundamental
[00:29:05] Speaker A: difference, very much resonate with what you're saying. I think it's true. And I think the. To expand on it.
[00:29:10] Speaker B: The
[00:29:12] Speaker A: we're not. I don't want to compete with any of these leadership programs that have spent decades of research and experience. Like, that is not the intent here at all. And the intent is, here's how the game of ownership works. Here's how the game of business works fundamentally, right? Like the game of the. Any specific company, the mandate for the operations is dictated by the ownership goals of cash flow and equity at a period of time. That is a universal truth. So we don't know how to play our business game unless with the ownership sets the goal. Like, so, like, those two things have to be true. Then we can see inside the lens of the income statement, which is the operations over the period of time. What we're required, what is required of us. So if the CEO is responsible for that whole income saving, that CEO is the captain. CEOs going like, okay, shit, we got to get like.
Noted. Noted is to win. To win is to hit ownership's goals of ownership distributions and cash flow, or ownership cash flow distributions as the equity valuation. That's the CEO. The CEO is the captain. Then we've got our three team leads that we have visibility now with what is required of each of those functions and how much revenue has to grow, what kind of margins we have to hit, and what is capable upward for net income and normalized ebitda. So now we have our three different functions that we understand what those roles are supposed to do. What does good look like for each of those team leads?
Right? So if it's.
I was gonna go down a sports analogy and I.
That was close. I was like, whoa. I thought like two things. I'm like, nope, I don't understand.
We have these three team leads and we know what they need to do because, like the function of revenue, the function of margins, and the function of cash flow are pretty straightforward in a business.
So we're teaching, like here's what that. Here's what all that means. Here's the, the list of functions, the list of duties. And then what does it mean to have a cohesive, collaborative, high functioning team trust.
And obviously, people have to know what the hell they're doing.
So then what that. To your point, like, we're just framing it up to say all of this is what we believe to be true from the game of business.
And this is what it looks like to have a good leader from the. On the technical side. So I would say, like, on the technical side, we're more of like, we are teaching the leaders technically how to do it. And then on the leadership side, for the readiness, it's.
Here's what we know to be true about, like, what a good leader, what qualities they have. And I don't know if, I mean, maybe that's the right way to say it or like, but it's more the technical understanding their judgment. And then do they have internal responsibility for the ownership? And then like, okay, and then to your point is, well, if those are. If we're weak in any of those, we know where to focus.
Like, if there is something where, like, it's on the value ladder. It said, maybe it's the management master of David Kachui. Maybe someone needs a program like that. Or Jeff west has this program that he's been using from Peter Thayer's leadership. Or there's like, so many different types. But is it the emotional readiness? Is it a personal accountability? Is it holding other people accountable? Is it, you know, open and honest? Brene Brown. I mean, there's so many different things that people could do inside of that. Like, we don't. I don't want anything to do with, like, reinventing those.
[00:32:40] Speaker B: No.
[00:32:41] Speaker A: But if we kind of say all of this is true and this is how it all works, then what you and I are doing in IBD is saying we're gonna.
We are the practice.
We're the coach.
Right. So what we're doing, like, if we take. So on our Tuesdays, we have the first Tuesday of the month is the Chief Revenue Officer meeting for revenue. Second Tuesday of the month is the cfo. Third Tuesday of the month is the coo, and the fourth Tuesday of the month is the CEO and owner.
Those four meetings have to happen every single month. And most people go, I don't know what the hell to say in those meetings. I don't know what the agenda is. I don't know. I'm learning these rules on the fly.
So not only is the Owner operator learning it, but then their team is learning it. So there's all this clunkiness going on and you and I are just saying, hey, here's the space for us to go. Like every month we have to do these things. And I've used the gym analogy where like we might show up, we want to do pull ups but today we're going to have to do assisted ones and at some point we want to do 10 on our own.
So that's why we're showing up in that time.
And it could be the owner operator first in those meetings that they're kind of learning how it works. Then they could be bringing their fractional or internal leader into those meetings to understand what it works or watching the same videos, looking at the same agenda and then at some point the leader will be in it because they know how to do those meetings themselves. Because at the end of the day they have to show up at a board meeting and they have to do the annual planning and be ultimately responsible for everything.
[00:34:13] Speaker B: Yep, yep. No, I agree with all of that and I really like the, the program and how it's laid out and I agree that it's not the actual like EQ side of leadership that it's that it focuses on.
I was also thinking like I liked how you brought up us as coaches and how the owner operators role eventually turns into they are the coach for the leader that they're putting into position. Like not right away because right away they're the ones that are still doing it and they're leading by example. But eventually the skill set gets high enough and they have to still be the coach. Because I've also seen it plenty of times where somebody can execute a role really, really well and not gain the respect of their team. It's because their execution of how they're like to their team is shortcoming. Like their execution of I can build a budget and I can build a really good budget, a really reliable sales forecast. I can know every single step of my user journey. I can rattle it off to you Mr. CEO and give you all the answers and I can give you you really, really good reasons why as everything's h happening but my team hates me and it's like so that's something that as the owner operator, like that's part of the coaching too is they have to go down a level and continue to make sure that they're not disrupting the ship. The the other team members on the ship.
[00:35:45] Speaker A: It's really interesting analogy that you gave because I'm Thinking about my soccer team, I think this, you know, the coach or so the owner, then the coach, then the players is in an owner, coach, captains, team leads, and then players is such a great high, like, frame of reference, because at the end of the day, we all want to. Everybody listening and owns their company, so they own their team.
In order to be the. Just the owner. That's where you don't even want to be the coach. But I think most of our clients want to be the. They're the owner, coach, and the captain, which is the CEO. Like, the CEO is the captain who's responsible for, like, we're doing this all together and responsible for the culture and the cohesiveness of the team.
I was not the best technical skill of a player at all. I was like, the people used to say, man, is that dude fast and big and his ball skills suck?
And I was like, I will take away the ball from everybody because I was center D.
The whole goal was take the ball away from the other team and give it to my team. Like, I do not want that ball for more than two seconds because I suck. I'm like. But, like, it was this ability to, like, look at what the whole field, see who's gonna get. Who's gonna be the best person to put it to, and then move the whole thing forward.
My. I had a co captain because the only reason I, I. I said I had this co captain because our team didn't. And the coach didn't know what to do with this. Coach didn't like me. Him and I had a little bit of some beef. And the co captain, he was the best technical player on the team. Guy was amazing.
He was a total.
He complained about everything.
Everything was everyone else's fault. So, like, no one on the team, like, if he would have said, let's go here, everyone would just stared and looked at him and. And if I would have said, let's quit the team, let's go play football, everybody be like, I'm in.
You know, so it's like this ability to, like, that's where the proof is to your point, right? Like, when your team will actually follow you, it's all of that stuff comes into that final moment, and it's like, it's technical stuff is important, but I think it's also important, like, there's. There's so many leadership things here. Where in the pack of wolves did you know that the largest, most intense dominant male male is not the. The pack leader?
[00:38:11] Speaker B: I actually did know that, but I don't Remember why?
[00:38:14] Speaker A: Because most often, most often, you know, in order for a cohesive team, and there's a ton of material behind this, the most dominant male, or not dominant, like the most brutally intensive strongest male often will win 100. Like, they'll, they'll just win all the time and. But be a ball hog and all that stuff. And it's the more humble leader who knows how to use everyone, that it's actually the pack leader because they know when to let other people win and they know when to hand off the ball. And I just think it's like this. There's a lot behind that. Like, we're not teaching that. What we're teaching is. That's a thing that's. I think what I'm trying to highlight here is by going all into all these metaphors, it's the experiences I think we all have. Whatever sport people played or whatever team they were on, it's like we remember what that was. Like what you and I are trying to. We're not trying to teach how to become that. We're trying to explain this is what the outcome is that we're striving for is to have that experience. I just said we're like, your leaders have unbelievable. You know, the, the team will follow the leader. The, the person is humble. They know when they're wrong. They're willing to, like, try new things. You know, all of that stuff is what we believe should be true.
Building that and creating that is a whole series of things that need to happen.
But what needs. And you and I, what we're trying to do is provide the space and the playbook to say every single year you need to do annual budgeting. Here's how the three leaders fit in. The CEO is the captain. The three functional leaders are the ones, you know, owning those KPIs. Here's what good looks like. We're providing the monthly cadence and the monthly, like, repetition, the practice.
And then they're going to have to play the game themselves. And what we're trying to do is, is isolate and help them. Say, this is totally like your childhood is showing up every single day even though you're 50. And you should go process that because it's impacting your leadership culture. Am I making any sense here? I mean, I'm just really trying to do a good job of trying to compare and contrast what we're doing compared to all these other systems.
[00:40:17] Speaker B: Yeah, I think it's pretty clear, like, because we're focused on letting you, the owner operator, know you need somebody that owns these three KPIs, one person for each number. We've established that.
And then we've established that it's not going to happen in a blink of an eye overnight, where all of a sudden you're like, I now know I need these three people. So I'm going to promote three people into these three roles. Step back and I no longer have to wear my operator hat. I can just become owner. Like that's not a reality and that's not what we're saying.
And so we've established that it's a roadmap. And over a period of time and how there's so many different ways to accomplish that. Fractional people coaching, whatever the case may be, these other leadership programs and such. And so I think this part here, in summary to me anyways, is just focusing on we've given you the tools to know what good looks like in the seat and you are now at a fork in the road where you're trying to decide, do I go fractional? Do I promote within? Do I hire a coach? This and that. So we've given you a readiness assessment to be able to apply to the person to identify weak areas. And now we're letting you know you need this to continue in your journey to independence.
And so now it's up to you to determine what type of leadership training you are going to seek out based upon the results of the assessments that we've given you.
[00:41:38] Speaker A: And the the objective truth is that to have a full and complete team, we need one body in each seat.
So at some point, if you want to have that experience of having that cohesive team where you can rely on them and trust them, we need to have someone filling each seat. So to continue the soccer analogy because just so top of mind is, let's say, for example, we do not have a right D like because the person is missing. We don't have someone in that seat. Okay, well, what are our alternatives? And this is back to then the roadmap milestone 20. And then how 21 fits into this?
Well, we have to go get a sub from another team.
We have to have a temporary sub from some other team to fill in because we, we've identified we need that role in order to have a complete team.
Otherwise I have to be multiple positions, which is difficult. Possible, but difficult because you'll drop a ball or yeah, you wouldn't drop it because you're not carrying. Anyways, you get my point. So the, we might get someone from another team, but let's say we have someone, we think with potential on our team who could eventually fill that role.
Maybe we get someone for, you know, a temporary sub for the time being while we get that internal person, a coach, and they're come. They're. They're trying during practice to fill that role while we've got a substitute. That's, you know, I mean, like, there's this. There's this way of kind of thinking about, like, we can temporary fill that spot with someone from a different team, which would be like, you know, external advisor that is going to. Because they're going to play the game with us. They're going to treat the game as in like we're all a team, even though they're, you know, normally on a different team.
But then with our internal person that we want to develop, are we going to get them a coach? Is that. So that would be like a direct way where, like, maybe the person on the bench has a coach during the practices that's continuing to go, but they're not the one playing the game yet.
[00:43:32] Speaker B: That.
[00:43:33] Speaker A: Is that making a little bit more sense. We're like, okay, fractional person is the person doing the deal, like fractional cfo. But the controller, we're intending to have the controller, the fractional C, or be the cfo in that example, we could have the substitute fractional. So the fractional CFO be the mentor for the C for the controller. So the substitute is the one mentoring that person and coaching that person.
Maybe that's not possible.
Right. What if that person's a badass and can help us on our team, but does not have the ability to mentor up that person?
That might mean we might have to have the fractional substitute while also developing the internal person at the same time.
And then they're cohesively working together. And us, as the CEO captain is saying, hey, the fractional has to be collaborating with the coach and the internal person because we have a technical roadmap, which is the functional assessment. And we. The leadership readiness assessment should be those. Those should be tools that that whole group, that group of three people is working on.
But there's this, like, series of decisions to say, we know we need that spot.
So instead of just giving up, because the giving up means, okay, we just. We're missing a player that we know we need. So we're gonna go shorthanded while the other team's got nine. Nine people, we got eight.
Is this making any, like, sense? Because I'm trying to figure out how, like, those graphics and the tools that we've been creating are trying to support this idea.
[00:45:04] Speaker B: It does make sense. I think in a lot of scenarios, again, based on the roadmap, it might be in the example that you gave where the captain, AKA CEO steps in and fills that seat until they have the funding or whatever the case may be for a fractional person and or coach or have identified somebody internal. Right. Like there's, there's a lot of options on how to fill that seat. I think the important part is to know you need to need one owner in that one of like all three of these seats because that's the operations of the business and we need somebody to own the number. And so I think a lot of times when people, these owner operators are starting their journey to independence, they are all the different positions you mentioned soccer, I know nothing about soccer. But they are the captain, they are the right defense. They are this other person that you
[00:46:00] Speaker A: mentioned for D and goalie, this is right. So they board met in goalie, they are sitting.
[00:46:06] Speaker B: They are all those people in the game when they're first starting out in their independence. And so I think that's where we, we've already had milestones on that on like how to know where to start. We just talked about that earlier this week. How do you know what player to pick up first? So that way now you're only in three of the roles instead of all four of the roles. Right. And so I think it's just, I think it comes down to the roadmap that you already had in the previous milestone. You know where you want to get to what timeline you want to get to there. And so now it's just determining which options on the menu of options are you make the most sense for you financially to stick to your cash goals and your distribution goals and everything and your timeline that's on your roadmap.
And then you just select from there.
[00:46:49] Speaker A: And I think Milestone 21, the leadership development plan. What my definition of that would be compared to all of the other leadership things that we just talked about that are other people's like programs. My definition of the leadership development plan is the process of actually practicing.
Right. So like the, the roadmap in last milestone is like, here's the actual. The plan for how you're using the combination of all those different people. And then the development is actually going through and saying, okay, here's what we're going to do now. This year we're going to have a fractional leader own that spot and lead budgeting and show up to the monthly meetings so like let's say that was, I'm just using the controller and the cfo. So like the C, the fractional CFO is going to be, that's how we're going to do this, that cfo. Now we're going to have the, the functional assessment and the leadership assessment for that cfo, even though they're fractional. We're going to apply this as if they're permanent. And, and then we are going to identify internally how we're going to go through that development plan. And then we're going to use the rhythm of meetings to play and practice, right? So all of the previous two milestones for the leadership is getting us to the point where we're now playing the game by practicing, which is we have the monthly, the monthly meetings, which is them responsible for their KPIs, which is the seat KPIs, then it's, we're looking at the functional OS assessment and the leadership assessment. So we now know, know every quarter we pick one thing from each one 90 day game plan on the functional assessment, say this is what we're working on. And then one thing on the leadership readiness to say, how are we then developing our next leaders? So then we're saying, okay, what are we going to do? Is it the fractional person that's actually developing or are they developing the controller? And so what we're using is that rhythm to actually implement and develop the leaders.
And then that at the end of the day we have that judgment call to say, hey, we actually handed out the baton because we got the right person and that experience should be hopefully self evident. And I think this rhythm and this practice should allow us to bend as we then get done with these meetings. And then on the quarterly boardroom rhythm and the monthly, we have the, well, more specifically on the quarterly, after the leadership team presents in the middle, the owner and the CEO have a debrief afterwards and we assess the leader.
So there's this feedback loop to say, okay, how'd they do? Do we feel like they're developing as a leader? Do we feel, you know, did they have self responsibility? Did they have intrinsic motivation? Did they give good explanations? Do we feel like, you know, did they show up the way we thought they did? And that's allowing us to then hopefully make a judgment call to say this is not going to work out.
Right? So then we can start planning for if the fractional leader is like working, we're working on this controller or we're working from that. You know, this, you as the CRO. And then we've got the VP of whatever marketing or sales, we want to know, using this. This system, we're not going to level this up. This person probably can't make it. So we have to have crucial conversation or we have to figure out a different route before we. You know, like you, as you started off at the beginning, we've all promoted people that shouldn't have been promoted because we were just, I think so many times it comes out of pure exhaustion. We just hope. We just. We like. We see potential. We just. And back to the. The game analogy. We're so tired of playing on the field.
We just need a substitute.
And we're willing to just accept anybody that's willing to fill that spot for a moment, knowing that it could be totally catastrophic for the total for us actually winning the game.
[00:50:47] Speaker B: Yeah, I really like one of the added things that you put in there. It kind of had everything snap together in my brain. So the first milestone of the module is showing the owner operator why these three functional seats are needed and getting them. Giving them the conviction that, yes, this is what I need. This is the team that I need to play my ownership game so that way we can win and hit my goals.
The second is then going through what good looks like for each of those and setting your goals, which is great. Owner operator has now set their goals of over the next five years, how they're looking to reach and balance their time, their cash flow, and their wealth. Because now they're convicted that they need these three roles.
The third milestone that we're talking about today is the execution. And so why that kind of clicked in my head is because there's been plenty of times where a leader might come up to me as the head of sales and say, Kim, I need $17 million in revenue next year.
Okay, great. But he. He or she have no plan on how to reach that number. And that's what this milestone is, is what is that plan, that executable plan to reach said ownership goal.
Is that fair?
[00:52:02] Speaker A: I think.
I think directionally, yes. I think the. The words could get confused of, like, what is a plan? Well, the plan would be the three statement budget.
[00:52:11] Speaker B: Right.
[00:52:12] Speaker A: And it depends what the plan is. I think the plan is.
[00:52:16] Speaker B: I say, like, the leadership plan.
[00:52:17] Speaker A: Okay, I was gonna say that's what I mean, like, for clarification purposes.
[00:52:21] Speaker B: Yeah. So this is like, what is your leadership plan to reaching those goals that we just outlined in the second milestone of this month module?
[00:52:29] Speaker A: I. I'd say the road map is More of the plan. Because if you think about that chart that we, you know, the graphic that we're going over with the group yesterday, like, it was like, okay, near one. Who are the pe, who's the name? Who's the people? What's the combination? What's the dollar amount? So we had that whole five year roadmap, which maybe that would be my. More of my definition of a plan.
This one is more. We're now the development plan. I mean, because this is called the development plan. This is actually the plan for the execution. Is that what you were saying? So it's the plan for.
Okay, what is the agenda for these meetings? We're showing up to those meetings. We're looking at the functional assessment, we're looking at the leadership assessment. We're looking and we're like, we're, we're having the feedback loop with these leaders and the fractionals and the, and the mentors or the whole kitten caboodle of who's managing this stuff. We're actually going through the rhythm and we're tightening. It's the feedback loop.
So are we on the same page there or.
[00:53:26] Speaker B: I think so. I think so. I think we're using. But let me give you an example and see, to help clarify. So in the roadmap we would say right now I am as the owner, operator and sitting in the CFO seat. And in year two, I want that to be Bob.
And so now here I am in the development plan milestone, where I say, all right, I know I've got two years to get Bob into that seat. So I'm going to start with the assessments and the tools and such with Bob. But then I'm going to have to determine is that going to be coaching that I need to invest in. Is that going to be like, what does that look like to getting Bob? Is it a program that I enroll him in, whatever the case, so in two years, Bob I can hand the baton off to, I meet with Bob, I discuss my plan with Bob, say this is a two year roadmap for us to be executing this and then every month we're executing, in every quarter we're reviewing. Does that make sense?
[00:54:20] Speaker A: I do. And I think that's, that's more clarity and refinement behind Milestone 20, which is the road map of like, okay, now I'm laying out essentially maybe it's more thinking about like, it's like the top down versus the bottom up.
Like milestone 20. It's like, okay, here's conceptually, like, I want to put A name up here.
Here's like the, the, the combination of coach, mentored, fractional internal person that I'm looking at over five years. Here's kind of like my guardrails for the cost.
So conceptually I can see over a five time, five year timeline. Timeline of the roadmap. And then this one, it's how am I actually doing that? Like, how am I actually doing that? So it's the how we're doing it. And then we're in, we're implementing the feedback loop with the meetings to then do the spot check. And we're using the already structure of the monthly meetings and the quarterly meetings and the annual planning to say we're now this is where we're syncing up the team development with the rest of the operating system. And this is also where as these people become leveled up, they're pushing down their operational tasks down into the company using the business operating system.
Right. So that's where that handoff is. But this is all staying at the C suite level, trying to build out that, that team. And then that's where are you saying then also like, let's say it is like a David Kachui's management mastery where we, like, we need to develop our values. We need to figure out how to judge those values. Because that's the one thing that's missing inside of this structure that would be part of that rhythm and say, okay, this is the one thing for the leadership, the leadership roadmap or the leadership development plan that needs to be done. So that would be like, go assess these different programs for this 90 days. Determine why they. So that becomes part of the doing inside of that rhythm that we're actually implementing on the monthly, accordingly annual basis. Is that what you're saying?
[00:56:20] Speaker B: Yep, exactly.
[00:56:22] Speaker A: Okay, I, I love this. I'm hoping as we come to a close here that we provided more clarity for people because I wanted to, one, make sure that people aren't confusing this with any of the other leadership programs out there. Two, how do we get our leaders and our fractionals or whoever's in these spots involved in the ownership operating system, involved in the monthly meetings and have a cadence of regular conversations about the technical functional stuff, the leadership readiness stuff, and then in relationship to the KPI. Because the KPI's is the whole we're flying the plane and fixing it. Right. Like we didn't just stop the business. So those KPIs come every month.
[00:57:04] Speaker B: Right.
[00:57:05] Speaker A: Like they're here every month. Whether you're like taking a nap or not. And same thing with every year. Which is why you and I, as we get into quarter four planning, it's like, because I had that new woman that we onboarded, hopefully she's listening to this. Like, she had one of her providers that said, you don't want to go to that annual planning conference.
Well, let's just stop and we'll do your whole budgeting and build out your model for you. It was a CPA firm. She's like, so they literally said, don't go to a planning meeting. And I said, 27 is coming whether you like it or not.
And whether the CPA firm wants you to stop doing everything so they can build out your stuff that they have nothing. It was such a weird comment. So my point was if time is coming every, like, if every month we're doing budget to actual every month, whether we have a budget or not, the numbers show up, we might as well start just showing up ourself with whoever the hell we want in that meeting because it comes every month anyways. And so even if we have none of the information, it's like, well, let's show up for 90 minutes once a month and go, let's talk about revenue. Like, oh, we don't. Like, what do we not have? What do we have? And so they, that, I think that that cadence allows us to just say, okay, we're going to grab onto that KPI and we're going to start thinking about it and we're going to start then working with someone else that's going to think about those five KPIs for each of those functions as much as possible. And then we're going to start backing into the functional assessment, the leadership assessment, and then we're going to keep doing this together.
And so I think, as if as my final takeaway is like, use the cadence of business anyways, that's happening anyways and start getting people involved because, like, what do we got to lose? We're doing. It's happening anyways.
[00:58:50] Speaker B: Yep, yep. I think as we close out here, just to give another example, recently talking with one of the members in the community and it was, well, let's have a call, but let's have the leader from every section of the company joining that call. So it's like your finance team, your ops team, your revenue team, like, they don't have it structured yet as clearly it's just the three people. But it's. I don't care if there's seven people that end up in that meeting. Like, bring all because we need everybody's communication and collaboration relationship to the three functions. Right.
[00:59:25] Speaker A: It's not seven people with seven different KPIs. It's seven people trying to talk about the, the main KPIs. Okay?
[00:59:31] Speaker B: Yep, yep, exactly. So it's just they have more people involved in just those three KPIs. Right, well then bring all seven because we're going to need all seven to put the budget and the plan together at this point. So I'm to your point. It's just getting people involved.
[00:59:46] Speaker A: This is awesome. Hopefully everybody feels more clear, not less.
We can probably put the assessment, the leadership readiness assessment and the the one pager attached to this.
Yeah. Go check out the previous episodes. Otherwise we got a September 15th workshop coming up and we're gonna.
Yeah, obviously this Camille podcast will be coming out soon too, so more to come.
[01:00:10] Speaker B: Excellent. Yeah, looking forward to the to the workshop. Ryan.
