Transcript
WEBVTT
00:00:00.180 --> 00:00:10.369
So now you got the bigger, sexier projects, you're getting more stuff, and then somebody gets really excited about that next big, giant sexy project.
00:00:10.590 --> 00:00:12.843
Oh man, we've been wanting to work with that client.
00:00:12.843 --> 00:00:16.278
If we work with that owner, we're going to get in the paper.
00:00:16.278 --> 00:00:18.042
We're going to get all kinds of run out of this.
00:00:18.042 --> 00:00:19.303
We need to take it.
00:00:19.303 --> 00:00:24.132
That client is so influential in the local community we can't pass this up.
00:00:24.132 --> 00:00:26.195
Sound familiar.
00:00:27.541 --> 00:00:28.522
What ends up happening there?
00:00:28.945 --> 00:00:32.353
You oversell the capabilities of the organization.
00:00:33.179 --> 00:00:36.606
In simple terms, you just outsold your workforce.
00:00:36.606 --> 00:00:38.451
I've seen it happen.
00:00:38.451 --> 00:00:39.774
I'm not talking about you.
00:00:39.774 --> 00:00:46.029
I pinky promise what's going on.
00:00:46.029 --> 00:00:46.929
L&m family.
00:00:47.229 --> 00:00:52.262
I got a solo cast for you today and I'm going to be diving into.
00:00:52.262 --> 00:00:53.365
I don't even know what to call it.
00:00:53.365 --> 00:01:03.293
It's like the indigestion trap, and when I say indigestion, there's a saying out there that most businesses don't die from starvation.
00:01:03.293 --> 00:01:10.227
Most businesses don't die from starvation, they die from indigestion, and I've been able to see this like play out over and over again.
00:01:10.227 --> 00:01:17.248
So I want to talk about like what that looks like and I promise I am not talking about your business or your company.
00:01:17.248 --> 00:01:35.004
It is a dynamic that I've seen play out over and over and over again and also want to give some ideas at the end of it about what I think or what I've seen work in mitigating that, the failure or the collapse of the business like what's really more important.
00:01:35.004 --> 00:01:43.790
Sure, the failure and the collapse of the business is not good, but it's the quality of life that people lose when they're in this cycle and in this trap.
00:01:43.790 --> 00:01:51.230
Right, the frustration, the defeat, the failure, the low sense of self all of those things ain't good.
00:01:51.230 --> 00:02:05.248
And so, if you're new here, I'm Jesse and usually I interview amazing people so that we can learn their tips and tricks and how they carve their unconventional path to success.
00:02:05.248 --> 00:02:07.680
And every now and then I do a solo cast.
00:02:07.680 --> 00:02:17.320
And so here we go, here's the deal New team, new business, new organization in a new market.
00:02:17.320 --> 00:02:24.651
They just came into town, they got a new boss, new department head, new VP came in to take over.
00:02:24.651 --> 00:02:25.753
You know, you know the deal.
00:02:25.813 --> 00:02:30.109
Something big has happened and all of a sudden they've got a plan.
00:02:30.109 --> 00:02:32.182
They've got a different way they want to approach things.
00:02:32.182 --> 00:02:33.308
It sounds like it's going to work.
00:02:33.308 --> 00:02:34.112
They start doing it.
00:02:34.112 --> 00:02:36.622
Then they get some traction right.
00:02:36.622 --> 00:02:42.304
All of a sudden the market starts responding and say man, like they, like us Okay, start building some credibility.
00:02:42.304 --> 00:02:44.027
They get some projects to get some work.
00:02:44.027 --> 00:02:46.073
They deliver on the things that they promised.
00:02:46.073 --> 00:02:56.479
And then they start getting bigger and sexier projects, because now they've got a name for themselves and people are reaching out and saying, hey, we heard about you or we worked with you on the last project.
00:02:56.479 --> 00:02:58.145
We want to do another project with you.
00:02:58.145 --> 00:03:00.350
Things are good, things are humming.
00:03:01.580 --> 00:03:04.729
Now what's happening here is the business is starting to grow.
00:03:04.729 --> 00:03:11.213
What I mean by that is the number of people required to deliver the work is growing at this time.
00:03:11.213 --> 00:03:22.026
So what's also happening, while this credibility, more business, getting recognition, developing a brand is happening, the need for more people is beginning to grow.
00:03:22.026 --> 00:03:26.995
That doesn't mean that you're out hiring people, right.
00:03:26.995 --> 00:03:33.013
That is very different than actually growing the team, and we'll come back to that later.
00:03:33.013 --> 00:03:44.010
So now you got the bigger, sexier projects, you're getting more stuff, and then somebody gets really excited about that next big, giant, sexy project.
00:03:44.010 --> 00:03:46.481
Oh man, we've been wanting to work with that client.
00:03:46.481 --> 00:03:49.931
If we work with that owner, we're going to get in the paper.
00:03:49.931 --> 00:03:51.685
We're going to get all kinds of run out of this.
00:03:51.685 --> 00:03:52.929
We need to take it.
00:03:52.929 --> 00:03:56.341
That client is so influential in the local community.
00:03:56.341 --> 00:03:57.763
We can't pass this up.
00:03:57.763 --> 00:03:59.825
Sound familiar.
00:03:59.825 --> 00:04:02.189
What ends up happening there?
00:04:02.189 --> 00:04:05.996
You oversell the capabilities of the organization.
00:04:05.996 --> 00:04:10.247
In simple terms, you just outsold your workforce.
00:04:10.247 --> 00:04:12.091
I've seen it happen.
00:04:12.091 --> 00:04:14.423
I'm not talking about you, I pinky promise.
00:04:14.423 --> 00:04:21.896
So now you got all these other little jobs that you had and that you've been building and you've been hustling and delivering on, and you got the big sexy one.
00:04:21.896 --> 00:04:24.242
And of course, you're going to go get more business.
00:04:24.242 --> 00:04:28.488
And then, uh-oh, we need more people.
00:04:28.488 --> 00:04:38.709
So you start hiring more people, bringing new people, and you don't have the time to train and develop them because this work is on your back door.
00:04:38.709 --> 00:04:39.630
You got to go do the damn thing.
00:04:39.630 --> 00:04:40.213
So what do you do?
00:04:40.213 --> 00:04:50.583
You hire experienced hires people that have been in the industry doing the roles that you need, but they've been doing them for someone else, and what that means is they've been doing it differently.
00:04:50.583 --> 00:04:53.392
Again, none of those points we're going to come back to.
00:04:53.392 --> 00:05:07.192
The next thing that happens is your customers the customers that everybody was working so hard to build relationships with and build trust with start having an inconsistent experience.
00:05:07.192 --> 00:05:12.221
They start wondering like wait a minute, this ain't, this isn't what it was like on the last project.
00:05:12.221 --> 00:05:15.274
Wait a minute, this isn't what so-and-so taught told me about.
00:05:15.274 --> 00:05:18.144
Like these guys, these people are just like everybody else.
00:05:18.144 --> 00:05:20.192
That ain't no good.
00:05:20.192 --> 00:05:21.375
And so what happens?
00:05:21.375 --> 00:05:25.970
You lose credibility in the market, not because you were trying to.
00:05:25.970 --> 00:05:28.324
We'll talk a little bit more about why.
00:05:28.324 --> 00:05:31.973
I think like the why behind losing the credibility.
00:05:31.973 --> 00:05:34.163
You start losing credibility.
00:05:34.163 --> 00:05:39.894
Your warranty quality experience starts getting more and more diluted.
00:05:39.894 --> 00:05:42.786
So you got callbacks, you got cancellations.
00:05:42.786 --> 00:05:44.610
You start losing business.
00:05:44.610 --> 00:05:47.617
So you got callbacks, you got cancellations.
00:05:47.617 --> 00:05:48.718
You start losing business.
00:05:48.718 --> 00:05:49.079
That's no win-o.
00:05:49.079 --> 00:05:57.459
And now, because you went in a frenzy to hire people, you got all these people that you've got to carry and that creates this whole other thing that is like less than awesome.
00:05:57.459 --> 00:06:04.973
Then, oh, somebody in the organization says we just need to get back to basics.
00:06:04.973 --> 00:06:15.798
Somebody in the organization says we just need to get back to basics because of all the dang demolition that they just did, the good credibility, the good name that was built, and then the cycle starts again.
00:06:15.798 --> 00:06:28.295
Now I touched on a couple of things, right, one of the things I touched on that I think and have seen be huge in like avoiding this problem, and that's discipline.
00:06:28.295 --> 00:06:29.482
Discipline to what?
00:06:29.482 --> 00:06:36.966
The discipline to stay on plan, and so what I mean by that is one of the decision makers up there in the ivory tower.
00:06:36.966 --> 00:06:38.930
They have an annual goal.
00:06:38.930 --> 00:06:47.033
Everybody has an annual goal X amount of revenue per year, x amount of backlog per year because that's going to keep the business growing, thriving and healthy.
00:06:47.033 --> 00:06:48.214
That's the point.
00:06:48.214 --> 00:06:51.781
And so let's just use $200 million as an example.
00:06:51.781 --> 00:07:04.512
If $200 million is the annual revenue target and you've hit that target in Q3, you're ahead of plan.
00:07:04.512 --> 00:07:12.663
What most people do that contribute to this indigestion trap is they continue selling.
00:07:12.663 --> 00:07:13.485
Now.
00:07:13.485 --> 00:07:19.903
They may be strategic sales that are pushing out into Q4 or Q1 of next year, whatever.
00:07:19.903 --> 00:07:21.043
In that case they're not going to be selling.
00:07:21.043 --> 00:07:22.447
They're not Good, keep doing that.
00:07:22.447 --> 00:07:24.514
But often that's not the case.
00:07:24.514 --> 00:07:31.278
Often it's a favor or a little extra for this one client, because we want to build rapport with the client.
00:07:31.278 --> 00:07:34.449
So they give us that next project that they want to partner on.
00:07:34.449 --> 00:07:44.576
And there's all these like weird politic things that we start doing Hit target $200 million, oh, $210 million, $215 million, and then we take the big one.
00:07:44.576 --> 00:07:51.190
And so what's also happening is that $200 million revenue mark was growth right.
00:07:51.190 --> 00:08:00.637
Hopefully there was some growth built into that, meaning you would be having to, the business would have to deliver more in the new year or by the end of the new year.
00:08:00.637 --> 00:08:11.879
So there was already a stretch, an expectation of growth built into the goal, and then you exceed the goal or decisions are made that exceed that goal.
00:08:11.879 --> 00:08:30.954
However, what isn't happening, or rarely happens, is the systems and mechanisms to recruit, train, integrate people into the organization have not been adjusted appropriately, if they even exist, because in a lot of cases they don't.
00:08:30.954 --> 00:08:36.101
It's just hire people, hire people that's what I am saying is the number one contributor to the problem.
00:08:36.101 --> 00:08:43.719
Not necessarily the people, but the lack of discipline in pursuing or exceeding that revenue goal.
00:08:43.719 --> 00:08:53.895
Exceeding that revenue goal because it's easy to say, yes, let's sign that letter of intent, let's, here's the deal, let's start moving forward.
00:08:53.895 --> 00:08:58.447
That's way easier than it is to say wait a minute, how many people do we have?
00:08:58.447 --> 00:09:00.028
How many people need to do that?
00:09:00.028 --> 00:09:02.471
How many more people do we need?
00:09:02.471 --> 00:09:30.010
And here's the thing how long is it going to take us to acquire, find, recruit a new, experienced, hire, integrate them into our system, meaning, teach them how to do the things the way we do them, so that they can deliver a consistent experience to our client and to the people that have been recommending us that's the trick.
00:09:30.010 --> 00:09:41.831
Yes, you can hire new people and when you grow what I've seen is when they grow faster or beyond their britches right, they see that big, fat, happy bonus at the end of the year let's go get that bad boy.
00:09:41.831 --> 00:09:44.349
They're not considering that.
00:09:44.349 --> 00:09:45.932
Yes, you got to hire people.
00:09:45.932 --> 00:09:51.196
You don't have time to hire like fresh people out of university, out of high school or out of trade school.
00:09:51.196 --> 00:09:56.648
You're going to hire experienced people because you don't have time to help them develop the core skills to do the job.
00:09:56.648 --> 00:10:25.359
But the problem with that is those people know how to do that from a different context, a different definition, a different way of doing that, and so when they come into your organization, you're probably throwing them straight into the damn project and they're going to do it the best way they know how, which may not necessarily be and rather is almost not anywhere near what you want it to be, or what the current standard is.
00:10:25.359 --> 00:10:29.687
You want it to be, or what the the current standard is.
00:10:29.687 --> 00:10:31.111
That creates dissension, that creates distrust, the disconnect like it.
00:10:31.111 --> 00:10:34.626
There's a lot of disses that happen when this, this sort of thing, occurs.
00:10:34.626 --> 00:10:36.373
So I'm gonna go back to the discipline thing.
00:10:36.373 --> 00:10:43.934
I got the fortune of working with an amazing forward thinking leader who asked me like what do you think?
00:10:43.934 --> 00:10:44.797
What are the problems?
00:10:44.797 --> 00:10:49.073
Man, this is the thing I've seen all the time we get a, a new business unit manager comes in.
00:10:49.073 --> 00:10:49.895
They got great.
00:10:49.895 --> 00:10:58.106
Another fan this is like my sixth business unit manager, by the way comes in, has a great idea and they're going to change everything.
00:10:58.106 --> 00:10:59.389
They're going to make everything better.
00:10:59.389 --> 00:11:04.058
The BU hasn't been performing the way it was supposed to, and so that's why I'm here.
00:11:04.058 --> 00:11:11.985
I'm going to fix it, I'm going to make everybody perform, and then they come in and, you know, mess things up and two or three years later they're gone.
00:11:11.985 --> 00:11:15.371
This one said he spent like, like, for real.
00:11:15.371 --> 00:11:33.519
He spent about 90 days, at least 90 days, investigating and understanding how we were doing business, how we were doing the stuff we were supposed to be doing or, more clearly, how we were delivering value to our internal customers and our external customers.
00:11:33.519 --> 00:11:42.208
And then he started saying, okay, what do we need to shore up and step on the gas on, and what are the gaps and how do we close those gaps?
00:11:42.208 --> 00:11:47.287
So he and I had a conversation and he asked me he's like, why do you think this thing keeps happening?
00:11:47.287 --> 00:11:48.429
I said, well, here's why.
00:11:48.429 --> 00:11:54.602
We get a new person in, we start doing pretty good, we oversell ourselves and then we start doing bad and then we start over again.
00:11:54.602 --> 00:11:58.469
It's pretty simple, like that's what happens, and he's okay.
00:11:58.469 --> 00:11:59.450
Well, what do you recommend?
00:11:59.450 --> 00:12:03.534
I said, well, if the annual goal is this, let's just hit that goal.
00:12:03.534 --> 00:12:12.272
Like, let's hit the goal, because we have to build our internal resources, our personnel, so that we can hit that goal again.
00:12:12.272 --> 00:12:14.616
Right, like, revenue is great.
00:12:14.616 --> 00:12:16.447
Earnings is a different question.
00:12:16.447 --> 00:12:27.552
If you're hitting $200 million in revenue and you got 1% earnings, you got problems, and so let's hit the goal and let's figure out how to take 1% earnings to 4% to 7% or whatever that is.
00:12:27.552 --> 00:12:29.692
That's a different ballgame.
00:12:29.692 --> 00:12:31.110
That's a thriving business.
00:12:31.110 --> 00:12:38.653
So I, in my head, I was like yeah, yeah, you're being nice and you're talking smack, but I'm going to give him the benefit of the doubt.
00:12:38.653 --> 00:12:45.818
Maybe he will be the one that, like, makes the disciplined decision and doesn't oversell us.
00:12:45.818 --> 00:12:47.730
Guess what he was.
00:12:47.730 --> 00:12:51.690
He didn't oversell us, he stretched us.
00:12:51.690 --> 00:12:59.389
But there were some projects that we said no to because we weren't equipped to deliver on them.
00:12:59.389 --> 00:13:12.679
What we also did is we had some training that could have been better, or actually needed to be better to bring people in and integrate them into our system, and so that was a much different experience.
00:13:12.679 --> 00:13:16.355
After year one, it's like, okay, we got some stabilization, we're doing the thing.
00:13:16.355 --> 00:13:24.071
We had another conversation and I said, well, I mean, it could be a fluke, how about we do it again Before we elevate the target?
00:13:24.071 --> 00:13:27.759
Yeah, yeah, sounds cute, but we're going to elevate the target, okay, whatever.
00:13:27.759 --> 00:13:32.647
Now the whole point of that story is the discipline, right, the decision makers.
00:13:32.647 --> 00:13:42.081
Yes, that big sexy project with the crane that's going to have your name visible for hundreds of miles or hundreds of eyeballs.
00:13:42.081 --> 00:13:49.485
There's value in that of eyeballs.
00:13:49.485 --> 00:13:50.008
There's value in that.
00:13:50.008 --> 00:13:54.844
But if your whole organization or situation is not equipped to absorb that growth because here's the other thing that happens you get a contract.
00:13:54.844 --> 00:14:01.889
Every contract you have, there's a set price for it, but there's scope gaps and there's change orders and there's expansions, so that's going to grow.
00:14:01.889 --> 00:14:04.913
Most likely, that is going to grow also.
00:14:04.913 --> 00:14:12.772
So now you've overshot your target by 20% and the current work that you have is expanding by, let's say, 10%.
00:14:12.772 --> 00:14:29.595
So now there's a 30% unplanned growth or bubble that you have to deal with, and all the while you're not growing your people, your departments, your capacity within the different departments and all the role players to execute at that level.
00:14:29.595 --> 00:14:41.816
And so one part of the answer in Jesse land anyways, is to have that discipline to stay on plan and not oversell your work.
00:14:41.816 --> 00:14:57.211
If you're a decision maker, you don't get to say, rather, if you're a real leader, like OG leader, you don't get to say, rather, if you're a real leader, like OG leader, you don't get to say that's not my problem, that's not my part of the business, because absolutely it is your problem.
00:14:57.211 --> 00:15:01.038
You just don't feel the worst part of that pain.
00:15:01.038 --> 00:15:07.855
The other part is this A lot of folks like to think that there's a talent problem in the industry.
00:15:07.855 --> 00:15:14.096
There's people at Generational and all this other rigmarole, and I know this to be a fact.
00:15:14.096 --> 00:15:31.881
If I were to give you all the talent that is available in your town, you could not predict whether they would be extremely successful, moderately successful or poor once they hit the project.
00:15:31.881 --> 00:15:35.360
It's a matter of who they end up getting set with.
00:15:35.360 --> 00:15:42.514
If they get on a team or a leader that regularly invests in their people, support them and develop them.
00:15:42.514 --> 00:15:46.317
They're going to be successful regardless of their talent level.
00:15:46.317 --> 00:15:53.535
If they get on a team that's just living by the hair of their chin, that person is going to have the same experience.
00:15:53.535 --> 00:15:56.750
If they get on the low performing team, that's just.
00:15:56.750 --> 00:15:57.653
You know.
00:15:57.653 --> 00:15:59.596
You know the ones guess what?
00:15:59.596 --> 00:16:01.842
That new hire is also going to suck.
00:16:01.842 --> 00:16:06.398
And so it's not a talent problem, it's a system problem.
00:16:06.398 --> 00:16:34.677
Very few departments I'm not even going to say companies very few departments or leaders of a department or a specific segment of the business know precisely, or even roughly, how long it takes to bring in an experienced hire, integrate them to the processes, systems, controls, measures that that organization uses or that team abides by, so that they can be successful within the new company.
00:16:34.677 --> 00:16:36.601
Very few people know what that is.
00:16:36.601 --> 00:16:43.793
Most people are going to refer to that as onboarding and they think it's an HR responsibility, which I don't agree with that at all.
00:16:43.793 --> 00:16:47.182
Onboarding to the company is one thing.
00:16:47.182 --> 00:16:55.437
Onboarding or integration into the department or the specific team to the specific role is an entirely different thing.
00:16:55.437 --> 00:16:57.922
And so that's my thought.
00:16:57.922 --> 00:17:06.393
If you want to break the indigestion trap, if you want to see or maybe kick this idea around with the people you work with.
00:17:06.393 --> 00:17:22.843
If you've seen this cycle happen right, maybe not you, you never experienced it, but you know somebody that has I would examine, like ask them how many times do we exceed our annual goal or growth goal or our revenue target by how much?
00:17:22.843 --> 00:17:40.232
And then the follow up question to that is okay what is our system or method to integrate people into the specific roles so that we can deliver a consistent experience to our clients or to the people that are buying from us?
00:17:40.232 --> 00:17:43.701
What's it going to take to build that system?
00:17:43.701 --> 00:17:55.986
I tell you right now it is way easier to build the system of integrating people and helping them understand the core functions, the core responsibilities, the core tech stack, all of those things.
00:17:55.986 --> 00:18:10.784
It is much easier to do that and that ain't easy, but it's way easier to do that than it is for the decision makers in the business development sales department to exercise discipline and not oversell themselves.
00:18:10.784 --> 00:18:26.121
So if you want a place to start, my recommendation is start on the system, the method, the way that you bring experienced hires in, run some like do it, do it a bunch and figure out like you can.
00:18:26.121 --> 00:18:29.598
I bet money and I've seen it done and I've been a part of doing it.
00:18:29.598 --> 00:18:33.093
You can get that timeline down to about six weeks.
00:18:33.093 --> 00:18:36.960
New hire has experience done the role for other people.
00:18:36.960 --> 00:18:41.715
Some people call it brainwashing, whatever you want to call it.
00:18:41.715 --> 00:18:48.823
Get them through that training, through that integration period and then on the other side of that six weeks they can go execute.
00:18:48.823 --> 00:18:54.640
They can go do it precisely the way you expect them to do it, but you got to start.
00:18:54.640 --> 00:18:57.751
So if you think I'm nuts, let me know.
00:18:57.751 --> 00:19:03.604
I appreciate you taking the time to listen to my little rant here and again.
00:19:03.604 --> 00:19:07.217
I promise I am not talking about your company.
00:19:07.217 --> 00:19:11.858
Be kind to yourself, be cool and we'll talk at you next time.
00:19:11.858 --> 00:19:12.964
Peace.
