49:21
SUMMARY KEYWORDS
business, work, team, company, build, owner, coaching, understand, military, leadership team, talking, today, step, organizational structure, person, naval academy, ron, run, leaders, airplanes
SPEAKERS
Damon Pistulka, Ron Higgs
Damon Pistulka 00:02
All right, everyone, welcome once again to the faces of business. I am your host, Damon pistulka, and I am excited for our guest today, because we’ve got a returning guest in Ron Higgs, and we’re going to be talking about leadership team building to facilitate your exit. Ron, thanks for being here today.
Ron Higgs 00:21
Damon, thank you again for having me. Always have so much fun chatting with you, and maybe always we talk about your other partner in crime. Kurt, yeah, yep.
Damon Pistulka 00:33
Well, I got So Ron, first of all, mean other people may have, may have heard about, you know, met you before things, but less for people that may not have, let’s tell them a little bit about your background and how you got into doing what you’re doing today, and what you’re doing today and how you got into it. Sorry,
00:55
wow. How long do we have? Because I don’t know. Sorry, they’re short. Oh, I
Damon Pistulka 00:59
got some good questions about this stuff too. So, yeah, yeah, this
Ron Higgs 01:03
is gonna be awesome. I will try to shorten this up as much as I can. I started my career in the Navy, went to the Naval Academy, became a naval flight officer, flying in s3 Vikings off of aircraft carriers. Went on to test pilot school. Got to fly all sorts of different aircraft there, and I changed my career to program management and acquisition, which means I worked with defense contractors on naval aviation programs and satellite programs. And I did that to the end of my career. The thing that I really enjoyed about that working with engineering teams, leading engineering teams, really smart and capable people. I really, really enjoyed that. When I got out, I did what all of us military guys do, right? I stayed in the defense industrial complex. You know, I work for a few defense contractors. And, you know, I found something missing in aerospace and defense. I I was lucky enough to fly airplanes for one of our major aircraft manufacturers for a little while, uh, moved into the engineering world, where I was again in charge of groups of engineers on the other side, working with the Navy. That was great that I realized how much of a pain I must have been to work with when I was in the Navy, to some of these folks anyway, you know, I started, I got another calling. Something told me that, yeah, you need to be doing something else. And so I got a lot of joy from helping people, especially helping individual contributors, highly specialized people, engineers, make their transition into leadership. People, leadership. Let me pause there for a minute. Any questions so far, because there’s a little bit more. I lost you, man,
Damon Pistulka 03:01
sorry, I’m writing notes, so we’re ready. Keep going, alright, so
Ron Higgs 03:05
when I decided to leave that world, kind of struck out on my own without a very good plan. I said I’m going to be a leadership consultant and that, you know, I had a little bit of trouble getting myself off the ground. It’s tough out there, you know, as an independent consultant, but I found support with other independent consultants, which was great. Now let’s fast forward a little bit. I had mixed success there, and through networking and pure luck, I ended up with a job as a COO of a small company like this is great, and I really did. I really enjoyed that. I think I did a great job there, but I enjoyed it, and I actually applied my knowledge of systems engineering to my role as COO in that company, because I looked at the company as a system, and how do I get all these different operating functions of the system to work together towards the towards A common goal? I enjoyed it. Unfortunately, that was in 2020 we all know what happened in 2020 so I ended up getting laid off. So that was a short lived experience. But I came back and I restructured my business as a fractional coo business. And I, in fact, if you’re familiar with EOS Entrepreneurial Operating System, I was a fractional integrator for companies operating on Eos, and I like that, so gave me the opportunity to work with different different types of companies in different different industries and things like that. So through my experience in that, I found that I really enjoyed working with and coaching the senior members of the team. I did some coaching of the CEO, but I also coached the executive team, mostly on how to work better together, how to collaborate, how to put the company’s needs ahead of the needs of theirs. And their own departments. Really enjoy that. So that’s what I’m doing now. I sort of moved away from my fractional coo work. You. Two reaching executives and executive teams, and I look for highly, highly specialized engineers, highly technical folks, to help them with their leadership challenges. I also do some advisory work for startups and small companies and some project based work as well. So here we are, awesome,
Damon Pistulka 05:21
awesome. Well, I got, I got a couple couple things, because couple things have been on my mind. You and I have had some conversations over the past few weeks. You have someone that you graduated with from the Naval Academy. Correct me if I’m wrong, but they were, they’re up at the Space Shuttle now,
Ron Higgs 05:42
oh, in the space station, and I haven’t been watching this stuck. So her name is Sonny Williams, classmate from the Naval Academy, and then her and I were, she was in a test pilot school class ahead of me, but we both, I ended up being a flight instructor at Tufts pilot school. We were both flight instructors at the same time, but I have US Naval Academy, class of 87 full of a lot of great people. One person who probably everyone out there has heard of is David Robinson, the admiral Rookie of the Year San Antonio Spurs. He’s one of our classmates, and we have some admirals, we have some captains of industry. We have a lot of great people. I’m really proud to be a part of that class. And like you mentioned a couple of weeks ago, Sunny gave us a we did a zoom call for our class from the space station. So she led us around the space station. You know, during the Zoom calls, probably the coolest zoom call I’ve ever
Damon Pistulka 06:44
been a part of, yeah, because you said she went to the Coppola, where you could see the earth through the space station. That had to be an incredible
Ron Higgs 06:51
view. It was fantastic. Can’t describe it. Just lucky to be able to have classmates in in positions like that. And just through my time at Test Pilot School, I got to know a lot of astronauts. So one of the other astronaut that she went with, Barry Wilmore, was one of our flight instructors at Test Pilot School as well. So I know quite a few commander of the last space shuttle mission, things like that. And yeah, you and I have talked before, but I was a candidate to be an astronaut, and, yeah, disqualified at NASA for medical reason.
Damon Pistulka 07:25
Yeah, yeah, no, it’s cool, because I’ve been thinking about it, because she’s been up there a bit longer than expected. Yes,
Ron Higgs 07:31
yes, I haven’t read up too much on that. I, I was on vacation last week, and I, I tuned out of pretty much everything. Yeah,
Damon Pistulka 07:39
well, that’s, it’s, it’s really interesting when you see your career path in in so I, I would have to think, when you were a test pilot for the military, that that that made you go into a lot of different situations, because one day I might be flying this, and I’m flying some, you know, little, tiny thing, some big, behemoth. Something goes slow, something goes fast, something, you know, you had to be able to react to a lot of different types of equipment.
Ron Higgs 08:14
Yes. So, as I mentioned before, you know, if you saw Top Gun, the original Top Gun Maverick, and goose. Goose was in the backseat, so I was a backseater and sort of a professional copilot, weapon system operator, navigator, but all the same, still in the airplane, still lots of things happening, yeah, and lots of things that happen really, really fast. Yes, one of the things that they really taught us how to do was understand the basics on how things work. And if you understand the basics on how things work, especially they’re intuitive, you can get into one airplane and and operate it from another, because you know the basics, just like driving a car to a truck, if you move from a car to a truck, okay, I’ve got a steering wheel, I’ve got the brakes, I’ve got the basics, and I know what all of this does. Now, airplanes are a little different, especially military airplanes, because they’re all built to do something different. So they have have all sorts of equipment, something that we could tell you about, and some that we can’t, yeah, designed by different manufacturers that have their different ideas of, you know, a user, a user interface kind of like Now you sit in one car, especially now that the cars are all advanced, and they have touchscreens and buttons and everything else. And you get in cars now way nowadays, you’re like, man, what were they thinking when they did this? Yeah, so some of the airplanes are just as different as all of our cars that we get in?
Damon Pistulka 09:41
Yeah, I think. And my point in this is this has to be very similar to your coaching now, when you walk into these different situations and you’re seeing, okay, I’m in an engineering business this day, and I’m in a different kind of business. Stay in a different kind of business that day that kind of prepared you for that early on.
Ron Higgs 10:06
Well, I think the military in general did. I think one thing that happened is, you know, I’m New Jersey boy, right? Ended up going to the Naval Academy prep school first before I went to the Naval Academy. So I’m thrown into this situation with people from all over the country, you know, people with thick Southern accents that I can’t understand, people from Boston who I can’t understand, you know, and people from Philadelphia who, you know, close to where I lived, that I could barely understand. Yeah, people from that grew up on the beach in California, people that grew up in the desert in Arizona. And one thing that we learned was how we all get along, but a lot of our interaction and relationship building was just talking about the differences in the place that we come from, and the differences in our lives, the common thing, and all of this human beings. Okay, so adaptability. And then in the military. So in the military, you move from one assignment to the other, these assignments can be drastically different from one another. So one of the things that I think every veteran brings, especially those of us who spent a career in the military, is adaptability. We can adapt to just about anything, and after living on the Navy ship, I think you could adapt just about anything.
Damon Pistulka 11:26
I’m sure that was really challenging with the tight quarters. Well, so today we’re talking about leadership team building to facilitate your exit. And really this, this is something that I think you know your training in the past, you’re training more recently, helping coaching teams, and the work you’ve done with uh EOS and predictable success and some of these other methodologies really help a lot, because there’s so many different things that we need to consider. As an owner is contemplating that exit, or an owner is really trying to transition their business from one step to one where the business is really separate from that owner and can generate revenue and sustain themselves with a lot less owner involvement.
Ron Higgs 12:19
Yeah, you know, one of the things that I learned in one of my jobs, one of the engineering jobs that I had, was that I used to measure how well I was doing based on how well my job got done when I wasn’t there, right? And so I would have people step up. I would just what’s understand, build a relationship with everyone. What’s the next step for you? What do you want to do? Okay, then I would teach them that, and I would always put somebody in charge, and I left, and now they hated it. You know what? I mean? It’s like, Hey, you’re the Acting Program Manager while I’m on where I’m on travel, right? And so that, that was one of the things that I carried with me to building strong teams. Now you know you have to create relationships with individuals to know what their desires are, what their strengths and weaknesses are, and once you know what they want to do, help them. Help them achieve that. And so building a strong team is the best way to do that. So if you’re a business owner and you have a strong team behind you, to where you can go for a vacation, on a month, for a month, and then be confident that everything that needs to get done is going to get done. That’s the best place that you could be when you’re ready to sell that business.
Damon Pistulka 13:35
Yeah, and it’s in in what, what we’ve told people for many years is, is that it’s not just when you’re ready to sell, it’s when you want to own the business, rather than have the business owning you.
13:52
Yep, makes perfect sense. That’s exactly right. Yeah.
Damon Pistulka 13:55
And another little fact that I was going to share in here too is that if you are thinking about selling a business, and I forget exactly who, but I think if you do a Google search on this, you’ll see it again. Is one of the bigger firms that sells businesses the United States. Said the it is a 30 to 50% reduction in value. Someone will see if there’s too much owner dependence, and depending on the amount of owner dependent. So this can cost people hundreds of 1000s, if not many millions, of dollars if they’re if they’re going into a business. And you and I know you’ve seen $50 million a year businesses that are run by some really smart men and women that are super talented, but they have not built a team that could make that transferable. So it just, it’s, it’s one of these things that can go unnoticed, because you can make good money in a business like that, but what are some of the things that you see when you’re walking in and, hey, Sue. Susan, super smart. She’s so talented, she’s built this huge business, but there’s not much around Susan, as much as far as a leadership team, what are some of the things that you see and what are some of the steps that those kind of leaders need to be going through?
Ron Higgs 15:16
Well, one, it’s, it’s, it’s really easy to see when everything is dependent on the owner, right? Everything just comes to a halt, even they can’t get through one meeting without the phone ring and having to step out having somebody call them to do this, right? But there’s different types of people out there, right? There’s some people that thrive on that. There’s some people that love it, sort of like being the star player on the team. I love it, right? And some people have their identities wrapped up in that, so it’s really hard to get them to let go. But when you’re talking about looking at the future, let’s look at the future. What, what does the future look like, and what would you like to do? Because if you’re going to sell this business eventually, right? Well, if the business is here, who’s going to buy that? So you want to completely turnkey business ready to go when it’s time for you to sell it. Nothing says that you could build that overnight, but, and some people have trust issues as well, right? So the first thing that we do is a little bit of self awareness. And I think self awareness is key to almost everything in leadership, people have to understand what their personal challenges are. I mean, really emotionally. How is this business to you? Emotionally? Is it like a child? Is it something you’re going to be be able to let go? What are you going to do when you let it go? Who are you going to be when you let it go? Right? Can you can you trust other people to run it? Do other people have good ideas? Well, of course they do, right? There’s more than one way to do things right, right? And sometimes those of us that have been in leadership positions have to let that go. It’s like, well, that’s not the way I would have done it. But, you know, I don’t have I’m doing leader stuff, not individual contributor stuff, so that’s going to have to be good enough. And then there are people, more times than not, that have showed me things. I’d say, Hey, this is, this is the way I do it. And then somebody’s turned around and go, Well, I do it this way. And I go, wow, okay, that’s a much better way than I do it. So that’s the way we’re doing it for now. So it’s a two way street. You can learn from people. So if you have these idea that you can learn from anyone, even you know, even the lowest level employee that you have, you can learn something from them. So the biggest thing we start with is self awareness, right? There’s emotional and then let’s look at a skills gap. Let’s look at what you know, and let’s look at what you don’t know. There’s some people out there, well, I’m not good at finance. I just talked with a founder today. He said, You know what, I’m not good at finance. I need to find a good finance person. Well, there’s somebody with some self awareness that understands what they don’t know. So they could start filling those gaps, right? So that’s the first thing. The second thing is, you know, a support system. This is a tough thing to sell a business, as you well, know, I don’t have to tell you that, right? Even being at the top, who do you talk to? Who do you vent to? Who can you who can you confide in? You certainly not into your employees. Maybe your spouse is involved. There is. It doesn’t understand. But you have to have a support system, mentors, friends, as I mentioned to you before, I was on the other end of that, like my best friend sold the business last year. He and I talked very often while he was in the middle of it, because he just needed somebody to talk to, right? And I was there for him, and I was happy to be there. And then starting on that, once you realize that, and once you realize what you have to do, then you have to start building some kind of personal development plan and prioritizing it. And an easy example is that, hey, I’m not a really high EQ person, right? So I better. I should probably get someone in here that is a high EQ person to balance, yeah.
Damon Pistulka 19:05
And I think that’s one of the things that you really bring to this, this situation, these situations, is helping that self awareness in the beginning, because a lot of people want to jump right in and start doing, start doing, but you’re bringing this, Hey, what about you? And I like that, because you’re, you’ve, you’ve switched your coaching, so now you’re really starting to coach those owners, that highest level executive, that ownership team, if it’s a team, to really get them understanding themselves and how they can work together better, and then branching out there to the team, because if you don’t do that, you have, as you said, self awareness. You won’t be able to go out like you said. The conversation you had earlier was, I don’t know finance. I need to find a finance. Of a person or someone that knows that if they don’t understand that part about themselves, that I don’t know this, that’s where you’re really helping them now, is getting that first thing done, because without it, they really don’t understand why they’re making these changes
Ron Higgs 20:16
right and then prioritizing it, and then holding them accountable, right? And that’s a big thing for somebody on the outside, you know, and as coaches to be accountability partners for these folks,
Damon Pistulka 20:28
yeah, so as people are going through this process building out this leadership team, because good leadership team is a good leadership team. If you can sell your business with a great leadership team, you can run your business with a great leadership team, it’s all valuable to you no matter what you’re doing. What are some of the first things that people need to address as they’re going through this process? I figured out, okay, this is, this is kind of me. Now I’m starting to build on my team.
Ron Higgs 21:05
Well, like you said, excessive owner dependence means they may not have a leadership team. So the first thing is that, hey, let’s figure out, let’s develop a leadership team. Then you have to step back and go, let’s look at the organizational structure. Do we have an organizational structure that’s going to support our product or service, or, depending on the size of the company? Do you have roles? Or do you even have an org chart? Me, I mean, places have you been that don’t have an org chart? Like an org chart? Yeah, I think we have one of those. But the roles are defined by human beings. So there’s like, well, this is what Billy does. This is what Susie does. This is what so and so does, right? You have to move away from that, to move away from that, to really establish in an organizational structure and writing down roles. This is what this company needs this person to do. So we need somebody to be the operations manager. This is what the company needs the operations manager to do. And if the person who is sort of doing that function might not be presently, might not be the person that the company needs to do it moving into the future, and that’s the hard part. So you have to start with the organizational structure, because that’s where your decisions are made. That’s where you’re understand who’s responsible for what. And then there’s responsible and accountable. Who’s responsible for the work? People actually doing the work right? Who’s accountable? These are the leaders of the person doing the work right. And you have and that needs to be clear. And then once you figure out the roles, then you have to put the right person in those roles right again, and it may not be the person that’s in the role so and some people may not make the journey, yeah, and this is my saying, the people who build the foundation aren’t necessarily the people who build the house, right? So there are some people that can take you so far, and then there’s others that have to step in and take you the rest of the way, or part of the way, or through the next phase or something like that. Yeah, really important to get, first get the structure and then get the right people in those seats. Yeah,
Damon Pistulka 23:20
and we hear this talked about a lot, it’s getting the right people in the right seats, but you’re talking about before that. You’re identifying this. This is where we’re at today, and that’s not working like we want. Here are the rules we really need to look at and need to get people in, and this is what they need to do, because we have to lay out that organizational structure before we can put people in the seat. You know, get the right people in right seat on the bus. We’re not even to that right people in right seat on the bus, because we don’t know what seats we’re putting in that bus.
Ron Higgs 23:55
And not only that, we don’t know whether it’s a bus, an airplane, a train or a car.
Damon Pistulka 23:59
Yeah, exactly, exactly. And this, this is where I think people skip forward too fast, because really taking the time to look at this is what this role does. This is, or this department does, or whatever it is to step back and look, not what a dislike today. Not that like you said, Susie’s doing this. So that’s the department. No, it’s not that way. It’s like, what does this business really need? Because that kind of fresh look at it, like a coach can give them, like they can do themselves or or someone like you can come in and help them do this. That’s what really allows that business to open up. It’s like, it’s like, we don’t even know that we’re constrained as much as we are by our by our own organization, until we go through these steps, get those people in the right spot, and then really let the team start to do what they need to
Ron Higgs 24:57
do right an additional layer of that. Titles. So a lot of people are wrapped up in titles, and you tend to give people big titles to start out with, right? And we’re going to call Mike here the Director of Operations, but we don’t, Mike isn’t good with people, so we don’t give them any people management responsibility. So that this actually happened to me at one place in the CO so it’s like, okay, so we can’t director means that you are managing managers at the lowest level, right? And so you you can’t hold the title of director with no director report me, with no one reporting to you. I mean, unless you’re the board of directors, you know, yeah, and so the that’s what the company needs. The company needs someone who holds the title of director to be able to have some business development responsibility, to think strategically, to contribute to the vision and to lead. Leaders. Have a person here that’s doing none of those, but they’re called the Director of Operations, so we need to find Mike the right role. Yeah, and so Mike, of course, is going to be upset because his title’s being taken away, right? So when you start off with those lofty titles. You know you might get yourself in trouble early because you don’t want to look like you’re demoting people, but you need to clearly define what that role is, and you need the right person in it.
Damon Pistulka 26:34
Yeah, that’s a great point about no lofty titles, because if you start that too soon, and with that, it’s not appropriate. You will run into problems later, right? And you need to redo it now.
Ron Higgs 26:46
Let’s move forward with building the right team, right? Yeah, talking about an executive team, so the business owner, assuming they know, okay, I need to let go a little bit. I need to build a team. So sports analogy coming up, right? I was the star player, and now, right now, I need to step off the field and be the coach, and then there’s a progression of, okay, I’m the coach, I’m coaching, I’m not playing, but now I need to hire a head coach, or I’m sorry I’m become the head coach, and I need to hire other coaches, right? So now, what and where, or where am I going to put those other coaches? How do I find those other coaches? And once I have that team of coaches, okay, I’m the head coach, I’ve got a team of coaches, which is your leadership team. Okay? Now we need to make sure that that team is cohesive and collaborative, and that they understand that they’re there to run the business, not necessarily run their department, right? And the last thing is, you know, I’m a big fan of assessments. It doesn’t matter which one you use. I use a relatively simple one, as you and I have discussed before. But as far as that goes, we all know what visionaries are, right? Visionaries are the people with the ideas always at 30,000 feet. What’s the next big idea? If everybody on your team is a visionary, you know you only have that one perspective. So you want as many perspectives as possible as you’re you know, on your leadership team. So whatever kind of assessment you use, it’s prudent to make sure that everyone represented has a different style, so that you have as many perspectives as possible. You know, as you’re running the company, solving problems and moving forward, yeah,
Damon Pistulka 28:38
yeah. And that’s you make great points there again, taking the time to understand who you have on the team, or you want to put on the team and understand their personalities, because you do have to have the right mix and the right fit for the role, because the personalities fit for the role is huge, right? And people
Ron Higgs 29:01
compliment each other. So there are people out there that are biased towards action, you know? They always say we got to do something, so we don’t have time to think about this, you know, we’re going to do something. So they get themselves into a Ready Fire am situation, you know? And then you’ve got those people who think things through, well, let’s sit back and think about this, right? So if you’ve got a whole bunch of thinkers, they’re not going to do anything because they’re thinking about it all the time. And if you got a whole bunch of doers, they’re going to go in and get themselves in trouble because they didn’t think about it first. So they need each other. It’s complimentary, and it’s a little bit more complex than that, but you can see that where they need each other. Hey, we can’t let you guys think too long, right? On the other hand, hey, don’t jump in. You got to think for a minute before you jump in the in the shallow pool, shallow into the pool, right? So again, those folks all need each other, so it’s not bad, I mean, so that’s healthy conflict that you’re going to create,
Damon Pistulka 29:55
yeah? So as you’re as you’re doing this with teams, and what are some. Some of the things that Okay, so we’re setting here now. We’re building this leadership team out. I’ve taken the time to understand myself. I’ve with my people, helping me, either internally or externally, or just my, you know, accountability group or my support system. I’ve laid out the roles. I’ve started putting people in place, and now we’re talking about moving forward. What are some of the situations you talk about and see that this team really needs to be understanding.
Ron Higgs 30:35
So one of the things I touched on earlier is the team needs to understand that they’re running the company as a team, right, and not necessarily there to represent their department. So I’m sure you’ve seen this. People come into leadership team meeting. I’m here for ops, I’m here for HR, I’m here for finance, I’m here for x, or actually, you’re there to make the decisions to run the company right and then so ops, finance, HR X secondary, to run in the company. And the the other thing is, they should know their jobs, but they should also know the jobs of the other folks on the executive team, so that they can understand the impacts of what what they do to the other departments. And so I’m sure you’ve seen this too. People just they’re they’re in their silo, and they’re just doing what they what they want to do in their silo, with complete disregard to how it impacts any of the other departments. And so once you get them thinking and understanding each other’s jobs, then it’s like, hey, if I’m the ops guy and I do this, this is going to have this impact on finance, I better go talk to the finance guy and see what his input on that is. And for me, as as the COO, you know, I was doing that right? I was talking to everybody else. When the people on the team start talking to each other, that’s success. So they need to be in that collaborative environment and focused and biased towards, you know, the health and well being of the business over that of their department. That’s
Damon Pistulka 32:16
a great point, I think, two great points that you and let’s just just soak that in a second, because letting that team know that they’re running the company as a team, I think that is a critical and often under it just not usually talked about. People think that, yeah, an owner, right? An owner that’s in here, that’s a entrepreneur, or whatever that’s been in there doing it, they think people automatically know this, and it’s not. It needs to be communicated. So what are some of the ways I mean, because this is, this is kind of a big deal, how do how do they do that? How do they step back and do that? Is there exercise you help people through just to really get that team engaged so they understand that.
Ron Higgs 33:05
Well, one really is, you know, shameless plug for coaching, right? But coaching is, is a part of it. Coaching these executive teams to sort of see through those blind spots. You’d be amazed when somebody comes in from the outside and just mentions those things, even using a simple assessment and getting folks to understand each other. And, you know, like, wow. Like, you know what? I never understood that Damon was a thinker, right? And I’m a doer, so he’s always going to he his first instinct is going to be the step back and think about it and complicate it, where my first instinct is just going to be, you know, to jump in and start doing something right. And just that understanding about each other helps, in some cases. And then again, the point with, Hey, I actually am here to run a business. So awareness, this awareness is, is key to just having that awareness helps a lot too. Yeah,
Damon Pistulka 34:07
yep, very cool. So you said something before we got on it was the iceberg of problems, or what? What were you referring to? Because I think this is something that leadership teams need to think about all the time, the iceberg
Ron Higgs 34:21
of ignorance. I didn’t come up with it, but I love it. Excuse me. And the iceberg of ignorance just talks about problems and issues in the company and how well they’re known throughout the company. So the bottom line is, I think they it assigns some actual numbers to this. The one number I remember is that the executive team only knows about 4% of the problems and issues in the company. Yeah, and. Then the lower it so the next level, you know, is a greater percentage than that. And I think the first line manager level may be something like 47% but the worker level, the individual contributor level, they know, 100% of the problems so that, how do you communicate? That? How do you have open and honest communication, transparency, things like that, and inclusiveness in making decisions where the leadership team is making the decisions knowing 4% of the things that’s going on in the company? How do you combat that? It’s a very interesting thing, and it reminds me of a there’s two things. It’s one that I believe the closer you are the top of an organization, the fewer people there are that will be willing to tell you the truth, right? Because everybody wants to give you some paint a rosy picture. And there’s a, I didn’t make this right? There’s an ongoing thing in the military about once officers get promoted to general, it’s like, congratulations, you’re a general. Now no one will ever tell you the truth again. And there’s some, there’s, there’s some truth to that. You know, I worked for a three star Admiral when I was the Navy, I was I was the Admiral’s aide, and I know from being to the lower level how much things get sugar coated and reported up to the top. You know the things that I tell my boss, and then imagine what he tells his boss, and it keeps going all the way up to the top. And yeah, they really have this view of what’s going on. It’s, it’s really sort of a nominal view, surface level view of what’s really going on the company. Yes,
Damon Pistulka 36:52
yes. Well, I think that, and I just looked it up while we were online, as Sidney Yoshida did this in the in the late 80s that they talked about it, but it is, you know, when you’re talking about this whole thing of building this leadership team, and you’re the founder and you’re the ones that’s helping doing this, or you’ve got somebody doing this, it’s so important to make sure that, and I was talking about it with a client today, is leadership development. This is not a thing that you just going to say, alright, Damon, you’re a leader, and everything’s good. Get out there and do her. You know it, it the leadership development is such a long term commitment to people that, just like you said, understanding things like this iceberg of ignorance and understanding, the need to you know how we as leaders, from that founder, that that owner level, or that highest executive level, communicating to those leaders our values. I used to, I used to gloss right over that years ago. Okay, what are the value we’re we’re here to do business, right? That’s what we’re here to do. But it’s so much deeper than that. When we’re really trying to build high performing teams, it’s that’s why I think the things like you’re doing with with coaching or or you know, that founder, that owner, that highest level executive, they have a lot of work to do to get themselves up to speed, and then think about the development that needs to go into that team to be successful.
Ron Higgs 38:27
Yeah, you’re right, and what you mentioned too is alignment, right? So I think one of the things we did well in the military, and one of the things I brought with me from the military, was that we all knew what the mission was, because we took an oath to support and defend the Constitution United States. So that was the mission. Everybody understood it, and we could all every person I believe in every service, could map what they are doing every day to how it contributes to that mission. So as far as alignment goes, if people understand the mission, they understand the vision, they understand the values they will make. I believe they’ll make the right decision every time, right? But they should be able to see whatever it is they’re doing at every level and how it contributes to the mission. Yeah, and that mission should not be to get you a bigger boat, because I’ve seen this, right? You see, with, you see what? Some people, I’m sure you’ve seen it, who are just kind of showy and flashy, they come in, it’s like, Hey, I got a new boat. I got a new car. I’m going to drive my new Ferrari in the work and I’m going to do these things, right? And I don’t know, I personally would not want to work a whole really, really hard so that the owner could buy a new toy, right? So map it to something that I care about, the mission. What am I doing, other than my paycheck, right? Because we all care about that. But yeah, you know that alignment, I believe, is really important,
Damon Pistulka 39:54
that is really funny, that you said that about someone in a new car, because I remember, this was your few years. Go. Now it happened. We were talking with a client about working and and there was a brand new Panamera outside Porsche. Panamera outside the business. And you’re quick to tell us that that was his brand new Porsche out there, but you go inside and you can tell that he didn’t, the people inside didn’t care about that car out there that much, and the business wasn’t running them all enough. And this is, this is you really gotta understand where to invest your time and your effort inside these businesses, to build these teams that ultimately will allow you to facilitate an exit or facilitate a nice, long, successful run with your business.
Ron Higgs 40:42
So I think if you have a good team in place, and you have good decision making in place, one of the things that we, we didn’t get a chance to talk about, but if you have that all in place, and you’re, as the owner, able to leave, you know, go on vacation for a month or longer, it has the business run just fine, as as I said in the beginning of the program, that really is the best place to be when you’re ready for an exit, whenever that’s going to be, whether it’s 20 years from now, or whether it’s at six months from now, that still is the best place for you to be. So yeah, your company for an exit. You know, if you have that good team in place, you have people align companies going to run fine, and it’ll be ready to sell when you’re ready.
Damon Pistulka 41:29
Yeah, it’s great point. And I just realized that one of our clients now, we’ve been working with him a while. He just informed the the executives last week that, hey, I’m going to leave for six weeks. And they’re like, Okay, and they know, you know, this is not where he’s going to the the South Pole or something where you don’t have phone connection or anything like that, but you know a phone call or two during those six weeks will be plenty of what he needs. And you know, when you get those businesses like and my point in this is, is he’s not going to exit, probably for two years, at least, because there’s more acquisitions to do. There’s other things he wants to do to get the value where it needs to be, but these kind of things the foundational piece of putting this leadership team in place and then continuing to develop those leaders, facilitating that eventual exit is such a key part in the business, because I’ve seen it on the other end, when I’m getting a call when we don’t work or work with somebody early that says, hey, I’ve got this business, and our revenue is what and it can be big too. I mean, it can be north of 10s of millions of dollars in revenue, but I can’t get someone to buy the company, or I get such a ridiculously low offer, I can’t understand it. I’ll stay here for a year or something like that and help them. But nobody wants to pay for that kind of thing, because they realize that that value is not there in the business anymore. When that owner leaves, if they did not build that team, it’s so critical,
Ron Higgs 43:07
it is. And I’ll give you an example, because I was on the other end of it, right? Because I have looked for businesses to buy as well, and I was, I was offered the opportunity to take a look at a business, and it was a it was a trade business, and so after doing some do some due diligence, owned by a husband and wife team, both of those people were certified in that particular trade, and they paid themselves a very low salary, right? They also were the instructors, right? And they also sold some of the trade equipment. So they built the business around that, but they owned all the relationships and the sourcing for all of that and everything. It was like, you want to buy this business? Okay, let’s look at this. I would have to hire someone, right? I would have to hire two people to do the instructing. Yeah, right. I I had no idea. I’ve got all these people that have all these relationships, as far as you know, the sourcing, their vendors and all of that stuff. How do you turn that over? That’s not easy to turn over. So they’re doing all that too. So that business wasn’t ready, right? They obviously didn’t have the Council of exit your way, right? Because that business should have never come up for sale. If the person you know trying to sell it would have asked, you know, the right questions. There’s no way I could have bought that business, that business was not ready to sell. And through working with folks like you, if they had come to you, you would have pointed that out in the beginning. It’s like, hey, it’s going to take you guys a little while to build, build this to the point where you can exit, yeah,
Damon Pistulka 44:56
yeah. It’s, it’s a, it’s something that, I mean. Because this is where where people run into the owners run into this challenge. You can run your business successfully for a very long time, make a lot of money, a lot a lot of money, but never be able to sell it right? And they just don’t understand, why is it that I can make all kinds of money doing this, but nobody else wants to buy this. And it, it is because there’s too many unknowns between where somebody on the outside is standing and where you’ve been for 20 years,
Ron Higgs 45:31
right? So one of the things, again, I’m going to go back to the military. A lot of the things in the military, you’re, you’re only in a unit for a short period of time, right? So there’s a turnover, but you are all you are being trained to replace someone as you are training someone to replace you, right? So you’re always training your replacements. Yeah, there are a lot of folks I learned in the real world, right, in corporate America, that don’t necessarily want to be replaced. Oh, hey, if I take, if I show this person this, then they’ll take my job, and I want to do everything I can to be that bottleneck, right? That’s not the word that they use, but to sort of be in. So some people do that. They set it up so that they have to make all the decisions. And that’s, you know, that’s not scalable, that’s not sellable. That’s one of those things that you have to start thinking, who’s after me, who comes next, right? Actually, there’s a great book out there by a colleague of mine named Mary Kelly, who has a book called who comes next. Talks about, oh, things
Damon Pistulka 46:41
who comes next? Mary Kelly, I gotta have to write that down. Yeah, very good. Well, Ron, we’re up on time here, man. But I really, really enjoyed this conversation day because we got to walk through from the beginning of I’m sitting here today. I know I need to rethink my team. I know I need to build this leadership team out so my business is running better and and it really will facilitate my exit one day, whether that’s early or later. But if someone wants to get a hold of you, what’s the best way to do that?
Ron Higgs 47:15
LinkedIn, here, you know, here we are. I love LinkedIn, and I do most of my business on LinkedIn. I am easy to find. Ron Higgs, I think I should be the first one. You sir, very good and and just send me a message and I’m happy to talk. And one of the things I really like to point out is that, you know, I’m focused on helping people and steering them in the right direction, right? And that doesn’t mean necessarily by my services, right? I’m going to steer you towards whomever I think is in the best position to help you. However I’ll take I’ll think about this. And you know this too, an outside perspective can go a long way. Yeah. And so those of us who are consultants, who work, who have this view from the outside, I have what’s called a dispassionate view of the business, right? I don’t know the history, I don’t know all the sorted little secrets and everything else, but and I’m just focused on the business. The business is my client, if that makes sense, yeah. So that gives me a dispassionate view of the business, and I think that a lot of folks can use that. So even if you don’t want to hire a consultant or somebody else, just have someone from outside the business, you know, take a look and give me an opinion on what they see.
Damon Pistulka 48:37
It’s a good point. It’s a good point. Well, Ron, thanks so much for being here today. I want to thank everyone that was out there listening. If you got in this late, come back in, go back to the beginning, start over. Because if you are an owner or know someone, maybe someone in your family needs to do this, or the highest level executive in the business, I think you can learn a lot here, because we were talking about that leadership team building to facilitate your exit. And it’s so important as you build a business that’s more successful and ready for that eventual exit. Thanks so much for being here. Ron. Hang out just for a minute and we will wrap up offline. Thanks,
49:18
Damon. I appreciate you.
