Episode 315 - 15 Mistakes I Made As A CEO
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Summary
15 Mistakes I Made as a CEO: 1. Not understanding the pendulum of decision making process 2. Focus on the positives, not the negatives 3. Hiring people you like, not those you like 4. Don t be afraid to talk about problems 5. Letting go of all the decisions too early 6. Not being a part of the team 7. Not having a good relationship with your executive team 8. Hire the right people 9. Don't just hire someone you like; hire the person you're looking for 10. Compromise
Transcript
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30 seconds, one time for the underdog, ignition sequence start, let me see you put em up, reach
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the sky, turn the stars up above, cause it's one time for the underdog, one time for the
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I'm Patrick Bedevi, host of Value Team, and today I'm going to share with you 15 mistakes
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Let me get into point number one, not understanding the pendulum of decision making process.
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When you're first getting started, you have to touch 100% of your decisions because you're
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Maybe that 100% of decisions goes to 90% of decisions, 80% of decisions, 70% of decisions.
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The goal is to eventually get to 10% of the decisions for you to make.
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Because you have built the right amount of leaders and they're taking responsibility for
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90% of the decisions and you run the 5% to 10% mark.
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Some people like to know and make decisions for everything where you're not really building
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leaders and sometimes your leaders don't like that because you're not showing enough trust
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into them and knowing that they can do it and that's one of the mistakes you can make
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But also sometimes it's people just let go of all the decisions too early.
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Some had to do with relationship with vendors, with carriers, with partners, with technology
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I had a technology company that was upset because somebody prior to us was communicating
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But the point is whatever that 10% is for you, your goal is to get there.
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When you do get there, never release all the decisions out.
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Know what you have to be a part of and still touch the main decisions to be made.
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You don't want to talk negatives with your executive team or your leadership.
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No, no, we're not going to focus on this positive, positive, positive, positive because it's
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positive thinking because we have to stay positive.
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Positive thinking may be good for somebody that's in sales or somebody that's an independent
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As a CEO, a big part of your job as a CEO is to take the negatives off of other people
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Not everything can be positive all the time because first of all, it's not real.
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And your people kind of see a level of fear and insecurity in you in not wanting to talk
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And you have no idea how many times when you bring up the negative, the crisis, the issue
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to talk to them about, they have so much respect for you because they say, wow, he's not afraid.
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We like following him in the way he's leading us right now.
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So many times people only hire people they like.
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Normally it's a friend or relative that you hire because you like them.
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It'll end up hurting you with the relationship, costing you money, confusing your peers.
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Some of your peers may sit there that are working with your employees and may say, you know
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what, this guy favors people, ends up hurting you.
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Hire the people that you're really looking for for whatever the position is.
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Number four, don't compromise the non-negotiable.
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When you're dating and you're looking for somebody, you're going to have a few things that you
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are not willing to compromise, that no matter what it is, even if I like everything, I'm
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not willing to compromise the following three things.
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But if there was a few things, I am not compromising it.
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In the world of business, I had a meeting earlier on and I sat there and I said, I just want
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you to know this, I am very good in my decisions.
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This is where I draw the line because this is part of my non-negotiable.
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I may negotiate and say I'm going to come and have a call with them because I think I can negotiate
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But everything else that's part of the non-negotiable, I am not negotiating.
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It could be the standards you have, expectations you have.
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Don't compromise it because if you do it once, everybody else says, well, you did it with
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Mary, you did it with Johnny, you did it with Billy.
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And then you have to explain yourself to everybody.
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Then you lose your leadership influence that you have.
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And everybody's like, yeah, but, yeah, but, yeah, but.
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And that's going to hurt you and keep you up at night.
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I second-guess myself multiple times in my career.
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If you look at the sentence how I end it, it says, second-guessing yourself in areas you're
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Look, there's areas that I'm not an expert in what I do second-guess myself.
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So, if I'm second-guessing myself in areas I don't know a lot about, I bring a pool of
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And I'll bring three to five people and say, what do you think about this?
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And sometimes people that are disagreeing, so I can kind of get the balancing on who's
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There are areas that no one knows more than you.
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Do not second-guess yourself in those specific areas.
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I am in my fifth year as a CO, I believe, fourth year as a CO, and at this point it was like
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And we're going through an interesting time, challenging time, and a couple guys that work
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And I was constantly second-guessing for about an 18-month period.
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That 18-month period, we grew, but we weren't growing at 100% or 75% rate.
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All the other areas, if you want to get feedback, sure, I'll get other people's feedback, but
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not in the areas that I, that you are an expert in.
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Do not second-guess yourself in areas you're an expert in.
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And nobody who's a real CEO that's got 50 employees, 20 employees, 30 employees, you didn't get
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to that point by pure luck without being an expert in an area.
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Look, there are some decisions you've got to make and move on.
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And there are some decisions that take a little longer down.
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There was a decision I had to make that affected every department.
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And what I noticed all of a sudden was, as I was not fully ready for the decision, in
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All of a sudden, I noticed every department was kind of not moving swiftly because everybody
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I said, listen, I just want to let you guys know, here's my decision.
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We should have seen the look on everybody's face.
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Relieved, everybody said, Patrick, thank you so much for finally making this decision.
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We know it was tough, but we're glad you made this decision because everybody can now
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So a lot of times, you are hanging on to a decision thinking it only affects you, where
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in reality, it's affecting so many different departments.
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They're just waiting on you to make a decision.
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So either no decision, yes decision, what is it?
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We're not doing it, but make sure you make a decision depending on what some of these
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And the timeline can hurt everybody in that organization.
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Early on in my career, you're probably year two or year three.
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I'm getting technology, investment, office, marketing, big event, conference, all these
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I'm trying to get everything going with the company.
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Then one day I come in and my director of finance comes up and says, hey, I just want
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to show you the checking account where we're at.
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And she brings up that this was 2011, late 2011, early 2012.
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I just, I think you should, you need to know this.
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I sat there and I said, what do we need to do about this right now?
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Step back, made a list, everything we had to do, cut the few things that we had to cut,
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Every time you don't pay attention to money, it's normally because you're not paying attention
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I wouldn't have looked at everything, every behavior that I had to do to drive revenues
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We forexed the amount of savings we had on the account and we were good to go and we were
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Now, from there on, everything with data, with dollars, with numbers, I am paying attention
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If you don't, nobody cares more about the money in a company than you as a CEO.
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You've got to pay attention to the money because no one cares about the money more than you.
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They're good at what they're doing, but nobody cares more about the money than the CEO of
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Next, having an outside counsel outside of your board, meaning when you build a business,
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and let's just get an investor, you have a board, right?
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This board is giving you advice on what to do and here's what we do with this and you
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have to go through the governance and all this stuff and do you want to do with this,
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do you want to do with that, what do you feel about this, and they're all giving you feedback.
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And sometimes as you're dealing with board, the board wants you to take feedback.
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It's almost like a relationship where whoever is the leader of the relationship, somebody
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Sometimes it's a man, sometimes it's a woman, but somebody always leads a relationship and
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the dynamics vary depending on whatever the relationship is.
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Say you are the person that's the leader of that relationship.
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If you get to a point where maybe you're second guessing a little too much, you're putting
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People don't mind you asking feedback, but a little too much makes them feel like you don't
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know if you're leading the organization in the right direction as well.
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So as you're dealing with board, ask questions, take feedback, but you got to have an outside
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board outside of that, that you are getting counsel on some of the stuff you're processing
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A Vistage is a great organization to be a part of.
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You pay $1,200, $1,500 a month to sit with another eight other C executives, CEOs, CMO,
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CEOs, and somebody who's the chairman of the board.
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You'll come in and say, here's what I'm ranking with my personal life.
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My marriage, my finances, my health, and there's one crisis that I want to talk to you guys
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Then you take the lead and everybody gives you feedback.
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So Vistage, YPO, EO, there's a lot of them out there depending on what size of the organization
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But you typically, my recommendation is to get a board outside of your existing board that
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Have enough of a position where you are willing to take, but at the same time, you've got
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to be assertive so they know you're leading as well.
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Favoring people is very similar to hiring people you like.
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The moment favoritism takes place in an organization, you lose trust with a lot of other people.
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I immediately had an environment where I realized, look, I had somebody that I liked and I wouldn't
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I moved her in five different departments and everybody started saying, Pat, we know you
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Finally, I had to sit down and course direct them into a career.
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They finally chose a career that they were excited about.
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She got excited and she chose to leave and we made a decision realizing, I'm not going
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Once I made that adjustment, I made it very clear.
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Even people that I have a relationship with or a friendship with or an association with
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If they were out of line, it was very clear that, listen, I don't favor the decision that
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If even family was out of line, I don't favor the decision that was made.
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Now, you have to be respectful, diplomatic, all of that.
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But people then started realizing you don't favor people.
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Trust goes up because you're going to treat people fairly.
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Not equally because some of you guys are more important than others, but at least you're
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Favoring people, you're going to lose a lot of trust in your organization.
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Number 10, knowing who to take counsel from and who not to.
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So, for example, we started going through a phase which was like, so, we want to do a
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meeting and you guys give your advice on how we can make the company better.
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It's so nice because it's great when everybody gives feedback.
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So, all of a sudden, this feedback, I think we're doing this wrong.
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And then all of a sudden, I'm sitting there saying, terrible idea.
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Who are you to tell us we're doing these things wrong?
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And then I realize, credibility is what's predicated based on your advice being heard.
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By the way, again, what I'm saying, a lot of people are not going to agree with.
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Because if you go read Huffington Post, if you go read Fortune Magazine or Money Magazine
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written by these journalists, they say things like, you have to be willing to want to hear
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everybody wrong if you want to build a big organization.
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Because you could be taking advice from somebody that's never made more than $45,000 a year,
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telling you how you're doing 10 different things wrong.
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And then you're sitting there saying, what am I doing this here for?
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How long have you been here to know the culture, to know what we stand for, to know the history of it?
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There's a lot of consultants when you start a business, when you become a CEO.
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You pay me $20,000, I'll be able to fix your problems for you.
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Ma'am, if you're so good at solving my problems for me, you would never be a consultant.
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You'd go run a company and be a CEO, if you're such an expert.
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Why did you become a consultant in the first place?
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You know, a lot of times people become consultants because they couldn't make you in the world of business.
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If you're so incredible at being a life coach, why don't you go build a company and have a couple hundred employees and sell it for a couple billion dollars?
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There's a big difference between talking about all these cultural articles, 19 points for people to love each other and have autonomy and all these other things.
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Nice, great, sweet, looks very good in a utopian world where unicorns fly.
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When you're running a business, it's a completely different ballgame.
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You have to understand who to take advice from and who not to take advice from based on where they're at.
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Again, not a lot of people are going to agree with this, but I'm giving you those mistakes I made and you can do whatever you want to do with it.
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Now, some people are studying way too much data and they forget about the emotional side of human side.
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I was having a conference call earlier this morning and on this conference call, I'm talking to one of our executives and he sounded defeated.
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And I'm going through it with them and he reported numbers for their office on what they were doing and it was the worst ever.
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So rather than taking the approach of just going data, data, data, data, data, well, you didn't do this and you didn't do this and you didn't do that.
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I said, listen, I want you to understand something here.
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I said, you know, I can give you 10 different things.
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You got an office with about 60 people that work there, right?
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I said, sometimes when you have something you face where it's a loss, right?
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It's felt by your support, your customer service, your sales, your organizational people, your processors, everybody.
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I said, listen, how many times have I told you how much I respect you for your character, your values, who you are as a human being, as a father?
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He's disciplined, church going, so kind to his wife, incredible kids.
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Every time I'm around his kids, I'm like, I wish my kids had more friends like their kids because their kids are incredible kids.
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Make a list of 20 things that makes you special as a human being.
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Remind yourself who you are and then go do that to everybody around you because if you are defeated, your people aren't you drained.
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Sometimes people say, well, study data, predictive analytics, and people say, I have no idea what you're talking about.
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You got to look at your numbers and measure all of them, specific to data, but you got to study your numbers.
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Measure everything to everything, season to season, quarter to quarter, month to month, week to week, day to day.
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You will learn so much about the trends of your business.
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Why don't we hire people and train them here and develop them here and do this and do this and do that and we build them up.
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I'm not really looking for a guy that's been in sales for 20 years because sometimes they come in and they know everything, can't teach them everything.
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And so what you don't know about these 24-year-olds who are coming here because they only want to work here for two years, get a couple raises.
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Then use that raise and go shopping to other companies saying, this company pays me this much.
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And then you are in a position where you're like, oh my gosh, this is kind of like, what is this situation I'm in?
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And it's kind of tough and you're kind of annoyed and you're not, but you do, you don't.
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Many times you can't afford it when you're a new company.
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Believe me, I hired, you know, people that I had to just bring on board to help me out on many different areas that we're not experts in.
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The goal is to get to a point where you don't just hire resume builders.
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Depending on the kind of culture you want to build.
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You hire people that are already done that to two, three other companies, okay?
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They're coming to you because they want to stay.
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And they're at a number in the market where that's their value.
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They want to come to you and they want to work with you.
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Now bring all the value that you learned to me.
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Rather than getting maybe a 24-year-old, you're getting a 36-year-old career, wife, kids, husband, settle down.
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They need a little bit more stability than just risk to go all over the place.
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Next, a comp plan that doesn't produce the results you want.
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A CEO will come here with their executive team or I'll do a call with them or something like that.
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Show me all the executives you have and show me their comp plan.
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And then show me your salespeople you have and show me their comp plan.
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Show me your support team you have and show me their comp plan.
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I have probably, and I'm not kidding with you, I've probably changed my comp plan probably
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Every time I was trying to find what produces the emotion and the results I want.
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Sometimes your comp plan could be the reason that some people are, you know, cutting the
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line and breaking the rules and sometimes breaking the laws because it's affected by your comp plan.
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You've got to have a comp plan that produces exactly what you want from your employees,
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your staff, your support, your exec, and your salespeople.
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Don't be cheap if you want to get the right kind of talent.
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Maybe you get somebody that's cheap, but their talents are also cheap.
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If you want to get some legitimate, quality, talented people that come with value to you,
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not you have to train them everything, sometimes you've got to cut that check.
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But by the way, normally when you're hiring people, a lot of times people hire for now.
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When it gets to a point where you really want to build an empire, you are hiring for
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You know, we go through a lot of times with our businesses, different businesses that
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we have, and sometimes we need this person today, and then we need that person today,
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Similar to when you get a lease, you don't get an office space for what you need today.
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You get an office space for what you need 12 months from now, 18 months from now.
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We're negotiating to get another 15, 20,000 square feet because we grew.
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Now, we've been here for about 18 months, so we did that properly, but we all of a sudden
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So the same as goes with space, the same goes with talent.
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They'll make you feel guilty about micromanaging.
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A real leader doesn't need to do this and all this other stuff.
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I just want you to know, I'm not the type of person that micromanages.
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Yeah, but six months later, after they break so many different things, then you start micromanaging.
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So this person's not used to you being that way.
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Rather, you micromanage upfront, and you let go later, and you trust them to make the right
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decisions because you micromanage them early on.
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And if you don't micromanage, if you don't hold people accountable, don't expect to get
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people hitting deadlines, hitting the numbers you want, the results you want.
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