“In your home life you cleaned out the closet, you cleaned out the garage, and your basement looks wonderful—you should do the same thing with your business.”
What you’ll learn:
Jim Schleckser, best-selling author and business growth guru, has a candid conversation with us about the challenges mid-sized businesses need to overcome to survive and thrive in the COVID-19 landscape. He gives us examples of how CEOs can create better opportunities for business to come out of the other side of this pandemic more powerful and more valuable to themselves and their customers. We also look ahead, past this outbreak, at how leaders can successfully run a virtual organization.
About our guest:
Jim helps leaders grow their companies by helping them open their kink in the hose. He most recently ran a technology business valued at $1.6 Billion, has done business in 28 countries and is the author of the best-selling book “Great CEOs are Lazy”.
Key takeaways from this episode:
- How Jim helps mid-sized businesses survive and thrive through a pandemic—2:15
- How to create better opportunities for your business to thrive—4:24
- Jim’s forecast for how companies will adopt and integrate remote work policies in the future—5:18
- How to run a virtual organization and maintain your culture—6:30
- How will commercial office spaces change post-pandemic?—7:27
- Jim’s career as a leader of various companies—9:00
- The biggest thing companies overlook when reevaluating cash management—10:42
- How do exceptional CEOs do more with less—13:09
- Time management strategies to rethink how you approach business—14:32
- How to find the kink in your business—17:45
- High-leverage activities CEOs should be doing—21:35
- How to delegate to the right person—26:55
- A success story on how to exponentially increase revenue—29:04
Announcer: Welcome to the Page 1 Podcast, a podcast featuring a variety of guests and thought leaders on topics ranging from digital marketing, sales channel strategies, influencer marketing, best in class product launches, and all the details about how to accelerate sales. Now here’s your host, Luke Peters.
Luke Peters: Thanks for joining us on the Page 1 Podcast. I’m your host Luke Peters, CEO of NewAir Appliances and Retail Band Digital Strategy Agency. We’re now in a coronavirus world, and I know it’s on everyone’s mind, so I want to adapt all of the interviews to ensure that you listeners are getting the most out of this podcast.
Luke Peters: Before I get to that, I am offering a free evaluation of your online sales strategy if you’re interested. Find me on LinkedIn or email me at Luke@RetailBand.com. Take a look at your sales on Amazon or HomeDepot.com, Wayfair.com of Walmart, or your own D to C website, and just make sure that you’re taking advantage of the increase in digital traffic right now, and happy to help you out there.
Luke Peters: Okay, great. In this episode, really excited to be interviewing Jim Schleckser, best-selling author, how to remove kinks in your business, remove what’s slowing you down, how to become a more effective leader. Jim helps leaders grow their companies by helping them open their kinks in the hose, and hopefully he can show us how to do that too. He most recently ran a technology business valued at $1.6 billion, with a B, and has done business in 28 countries, and is the author of the best-selling book, Great CEOs Are Lazy. And Jim, welcome to the show, welcome to the Page 1 Podcast.
Jim Schleckser: Thanks for having me Luke, I appreciate it.
Luke Peters: Great, and before I go on, I just want to let the audience know that I read Jim’s book, again, Great CEOs Are Lazy. It’s really a digestible book, by the way, you guys will enjoy it.
Luke Peters: Before we get into the book Jim, you have a business as well, and you’re working with a lot of other businesses, so why don’t we talk about COVID-19. What impacts or changes have you been seeing with your clients?
Jim Schleckser: With regard to my clients, I work with about 100 CEOs around the country, mostly middle-sized companies, less than a few billion dollars. We’ve really broken down our COVID-19 conversation into two elements. One is survive, and the second is thrive. Under the survive thread, as a CEO and leader of a business, this is about cash management, this is about right-sizing, this is about making the adjustments that you have to make. And clearly we have some clients, for example, that ran a string of dental offices, and their revenue effectively went to zero, and so that required certain things around costs, and frankly layoffs, to know that they’re going to survive. Obviously the SBA loans that are coming out are on everybody’s mind, and that’s part of building a little bit of a war chest, that I can make it to the other side.
Jim Schleckser: I think the most difficult part on the survive side is, we don’t quite know when the other side is going to come, or exactly what it’s going to look like. But mostly those are companies that don’t have fundamental structural changes needed to be successful, like for example, a restaurant. The good news is, there are some people that are doing super great in this area: ecommerce is killing it, last mile logistics is killing it, anything related to a home office or home delivery is killing it. So there are some bright spots, not outside of Zoom, which we all know about.
Jim Schleckser: But on the thrive side, I find this actually, once we clear the survive conversation we move to thrive, and there we talk about, in your home in life, you went out and cleaned out the closet, you cleaned out your garage, and your basement looks wonderful. You should do the same thing in your business. So there’s an opportunity to take on those projects that will definitively make your business a better business on the other side more powerful, less expensive to run, more collaborative, better value for your clients. Now’s the time to do it. You’re shut down, you can’t serve clients the way you used to; do that instead with the time and people you have in the business.
Jim Schleckser: I’ll give you a for-example. We just migrated my whole organization over to Office 365 with some help. We might never have done that when we were running the business, but this was the perfect tie to make that migration, and the benefit is all this collaborative stuff that we got on the other side. So there’s a for-example of when I talk about thrive, and try to create new opportunities inside your business so that you power out the other side. That’s kind of what it’s moving to as people have cleared the first bit. So, active conversation for this day.
Luke Peters: That’s great feedback. For sure in the cash management that’s top of people’s minds, so that was on the survive side. Then on the thrive, you didn’t say it this way, but kind of clean out your business.
Jim Schleckser: Yeah.
Luke Peters: You said about spring cleaning, and make it better, make it less expensive. We’re on 365 as well, and the transition has been awesome. We’re using teams for meetings. You guys, sounds like you’re probably using that as well. This is a total unknown, but how many companies that are able to do you think will just continue to work remotely, or at least part of their teams will work remotely, even after the crisis is over? Any sense on that?
Jim Schleckser: Yeah, that is kind of a pregnant issue. What I’m telling people is, if you didn’t have a work from home policy, you do now. There is no going back, and I’m going to argue that a large percentage of your workforce who were able to do it, were successful in this environment, are going to say, “I don’t understand why I should go into the office.” So I think as a leader, we’ve got to get ahead of this. I used to have a client that said, “When you’re being run out of town, pick up a baton and pretend like you’re leading a parade.” That’s going to happen on home work. So you can wait for your employees to come back and say “I don’t understand why I should suffer through traffic and come to the office when I was frankly more productive in my hope office, and I didn’t have to suffer through traffic, and I was happier, outside of a level of social engagement.” I’m going to say just a random number, half. Half are going to go and say, “I’m going to work from home and it’s going to be just fine.”
Jim Schleckser: Having said that, I have talked to people who say “Look, I know myself. I don’t have the discipline to work from home. I need a structured environment.” And those people will opt to be in the office, just because they know they can’t be successful at home. But for the people that can, oh man. And I think the bigger question for leaders is, how do you run a virtual organization, know your people, incentivize your people, give them a proper review when the time comes, and guide them, and maintain your culture, given that you’re now spread over 100 locations when you used to be in one. I think that’s going to be a real management challenge. It’s inevitable we’re going to work from home. The question is leaders, how are we going to run those organizations?
Luke Peters: Yeah, and that key point you brought up was this socialization that especially a lot of younger people are missing. They enjoy that part. They get to come in and see their friends. They see them on Zoom or on teams calls, but it’s not the same.
Jim Schleckser: Nah.
Luke Peters: Yeah, so I can envision, maybe there’s more work from home time, maybe there’s one or two days when the team does get together though, and so there might be some sort of hybrid. We’re going to have to make that decision, I guess, in a couple weeks. Some people want to be at work because, like you said, they don’t have the easiest environment at home, and others are getting more done at home, so a lot for us to learn.
Jim Schleckser: Yep. I think the other change you’re going to see there is, commercial office space is really going to change.
Luke Peters: Big time.
Jim Schleckser: First of all we don’t need as much of it, for starters. And the way we’re going to shape it, given that it’s, like you said, kind of a hotelling environment, where they come in a little bit, then they work from home, or it’s more designed around socialization and working together, and that says a lower number of hot-swap offices and a bunch of conference rooms, or open space. But not nearly the space we used to have. Rows of private offices are probably going to be a thing of the past.
Luke Peters: Yeah, and it’s interesting, we can go off on a lot of tangents here, but even investors looking at commercial real estate, how is that going to affect the market? Warehousing and tilt-ups, maybe they’ll stay the same as far as price per square foot, but like you said, commercial office space, this is going to be a big macro trend. I’m definitely agreeing with you on that. So, really interesting.
Luke Peters: Before we get to your questions, I think it’s important for the audience to know a little bit more about the company. You ran a massive $1.6 billion company, a technology business. You want to briefly share what that was about?
Jim Schleckser: Yeah, and it’s $1.6 billion in valuation. It was a little bit of a crazy time for valuation so the revenue wasn’t quite that big, but that was in the telecommunication space. I’ve kind of run companies most of my career, small, medium, and large, private and public; this was the last time I was in kind of a corporate environment. So we sold to the telephone companies, and did things that helped them identify faults in the network, problems in the network, and instead of dispatch to find the problem, because we would find it for them using our systems, they would dispatch somebody to fix the problem. And what that meant for the consumer was lower time to repair the problem. So you didn’t lose your telephone or broadband as long if they used our systems, which they did. That’s why it sort of shrank that time while they were deploying them. People would argue it’s still too long, but it’s better than it was. So that’s what that business was.
Jim Schleckser: Then I rolled into this advisory work. I had had a CEO peer group throughout my career as a leader of various companies, and I found it invaluable to help me with critical decisions, help me stay focused, and help me stay accountable, when sometimes I didn’t have that kind of environment at work. I didn’t have a board for example. I loved that model, I loved the intellectual stimulation, so I opened a business doing the same thing. Working with growth CEOs, helping them through their most difficult issues, helping them stay accountable and building like-size, like-complexity peer groups for larger and, as I said, more sophisticated CEOs and companies.
Jim Schleckser: We’re also affiliated with Inc Magazine, hence the name of the company is Inc CEO Project, and that really notes the fact that we are focused on growth, we’re specialists in growth, and all the problems and opportunities that get created by growth. That’s the business. Like I said, we work with about 100 companies at the moment, and that’s slowly growing over time.
Luke Peters: Great. You touched on a couple things. Before we leave, last question on COVID-19. Talked about cash management, talk about, this is a great time to clean up the business. I think cash management, a lot of people are forced to face that, so most companies have probably already done it. What has been something though, maybe, that wasn’t as obvious? It could be either something that wasn’t as obvious, that then you shared with business owners, or in the peer group it was shared, and everybody kind of jumped on it like “Oh man, I didn’t think about that.” Or, something unique that came out of this. This would be helpful for the listening audience here, there’s definitely a lot of business owners.
Jim Schleckser: Yeah. Really the big thing for our members was, all contracts are on the table. And we’re all honorable, we want to honor our contracts, but the very definition of force majeure happened. In many cases we were forced to close our businesses by the government, and so that [inaudible 00:11:19] gives us latitude with contracts. Most people understand that. For example, that meant leased assets being returned before the end of the lease, and the lease holder, while they didn’t like it, they did understand why it happened, and they had some grace or flexibility around the issues. Landlords giving significant breaks on rental rates. We’ve had cases where they said zero rent for two months, let’s say March and April, and they extend it to May ultimately, and we’ll just tack it onto the end of the lease, or we’ll amortize it over the balance of the lease if the lease term is long enough. We’ve also seen landlords go to half rent for a period of time, again trying to amortize it into the balance of the lease.
Jim Schleckser: That’s been really encouraging when you’re trying to manage cash, when one of your … Probably people are number one and space is number two on your cost profile, that we were able to reduce the lease cost pretty significantly. Because we really weren’t using the space at that moment in a number of cases. So a number of people have jumped on that, and they’ve had quite a lot of luck with it.
Luke Peters: Yeah, I like that quote. All contracts are on the table, I think that’s great.
Jim Schleckser: It is.
Luke Peters: Like you said, no one’s taking advantage of anyone. If anything, these businesses, they’re hit, all of us, but some hit more than others, by COVID-19, and literally can’t even operate, so it definitely makes a lot of sense.
Jim Schleckser: If they said “You’ve got to pay,” you go, “I can’t pay.” So now where are we, right. You might as well have some grace, and hook me up that I owe it to you later when I recover it, as opposed to just saying “Pay me or else,” because that could just have catastrophic implications.
Luke Peters: Great. Now let’s jump into the subject of the book, Good CEOs Are Lazy. First off, how do really exceptional CEOs get more done in less time than everyone else?
Jim Schleckser: You said it earlier, they focus on the things that matter. And I’m not going to say 100%. The good ones get up to 30% or 40% of their time on the most critical issue or issues in their business, and they suppress everything else in their business. They don’t spend time on it, through a variety of techniques. And that means that in a rational number of hours, there’s no CEOs working 40 hours a week, but let’s say 50 or 55, they’re able to execute on their duties. Because they focused on the things that have the strongest economic impact on their business a bunch of their time, they get great results. And when they go home their kids still remember their name, and their dog doesn’t bite them, and their spouse still loves them. So they’re able to balance life and business and still get a ton of stuff done in a more constrained amount of time. So it looks a bit lazy; it’s not really, it’s just focus.
Luke Peters: Talk about, what are those time management strategies? Because the thing is, you know when you come back from a seminar, or you read a book like you wrote, and they’re motivated for like a week or two, and then it’s back to how life was before. So what are these time management strategies that a CEO might be able to hold themselves accountable, or legitimately change up the way they think or operate?
Jim Schleckser: Yep, absolutely. The first one is this idea of the kink in the hose. The example I used was a garden hose, and when you water your garden, inevitably a kink occurs in the hose. And we all know how to get the water flowing again? We’ve got to work ourselves along the kink. Unkink the hose, and then the water begins to flow again. And it’s true that any work that we do on that hose in other places beside the kink is wasted work. It doesn’t actually do anything to open up the flow rate of the hose. Well exactly the same is true in every single system you can name, including your business, and that is, there is a kink, a dominant kink. There may be some sub-kinks, if you will, sort of sitting behind it, but there’s a dominant kink that stops you from generating the revenue you’d like to, or serving the clients you’d like to, or generating the profit you’d like to, or delivering the number of meals you’d like to, if you’re a nonprofit, for example.
Jim Schleckser: So in my effort to try to increase the capacity of the organization to do what I want it to do, meaning make profit, serve people, grow revenue, I’ve got to figure out where that kink is, and then I’ve got to open it up. What we’ve found in interviewing literally thousands of CEOs is, they don’t say it that way, but that’s exactly what they all do. They spend a bunch of their time figuring out where the kink is, using the two hats that we talked about in the book, the learner hat or the analyst hat, and the player hat is to help find the kink. Then they fix the kink, they open it up with one of three other hats we talk about, which is the architect, the coach, and the engineer.
Jim Schleckser: So that’s the first thing, you’ve got to be kink-focused. Where is the kink in my business? If I had a magic wand and I could change one thing in my business to make it make more money, serve more people, grow my revenue, what is it? You’ve got to realize, you’ve got to clear about the objective. Different objective, different kink. If I go to work to have a good time, and my primary goal is to have a good time, the kink might be, we don’t have enough beer. If my goal is to make more money it might be, how do I do more, better, cheaper for more clients. It’s a different kink. So you have to be clear about, what’s the goal I’m after, and that will define the kink. So you get clear on the goal, get clear on the kink, and then work to open it up. That is the primary one.
Jim Schleckser: I could talk a little bit about how they make time to spend time on the kink if you’d like me to, because many people say “I get it, but I already am working 80 hours a week. How do I work on this too?”
Luke Peters: Yeah, that would be great. Because everybody has a different way. They work off an online calendar, a calendar, a task list, I don’t know, there’s just a million ways that people might plan out their own time. Then physically … What I’ve found is, if I’m going to make a change, it’s got to be, for lack of a better word, it’s got to be a tangible, physical change. I’ve got to actually do things different. I can’t just think different.
Jim Schleckser: Yeah.
Luke Peters: So it’d be great to hear your feedback in what you’ve seen other CEOs do to successfully change.
Jim Schleckser: Certainly. The main trick we talk about to try to make time for focusing on the kink, and fixing the kink, is to get rid of all the other stuff. That’s the first thing you have to do, is all of the relatively non-value-added, or low-value-added, things that are on your to-do list need to go away. The technique is pretty simple. We call it a, you need to develop the not-do list, and so the idea is, build a list of all the things you think you’re supposed to be doing, rank order for economic impact. So the thing that has the maximum economic impact in your business, and there is a good chance that that is the kink by the way, goes at the top of the list. All the way down to the things you do because you’ve always went to that meeting, or they always sent you that report, or for some darn reason the CEO’s supposed to be there for I don’t know why, but I go there. Pretty clearly not incredibly high-value work is at the bottom.
Jim Schleckser: You draw a line about halfway up that list, so everything below the line is relatively lower value than the stuff at the top of the list. And every single item below the line, you do one of three D’s. We have a three-D technique on this. We either delegate it to somebody else. If it’s important enough to do, you can give it to somebody else, and even though it’s not that critical for you but it still needs to be done, it is a developmental opportunity for somebody in your organization.
Jim Schleckser: So working through the operation, the details that you’ve done 50 times, and you have zero learning there, what if you took a younger person in your organization that you were trying to develop into a leader, and you put them in charge of doing that work? Massive stretch for them, shows a vote of confidence. They’re going to grow like a weed as a result of it. For something that was boring and was not value-added for you. So it’s a win-win. You win because it’s off your list, they win because they got a brand new fun project that they get to learn about. So delegate is a super important tool here.
Jim Schleckser: The second one is defer, meaning I know it probably needs to be done, but I’m going to defer it into the future. Consciously, no guilt here. Because normally we defer and we have guilt. Here there’s no guilt, it’s a choice to defer, and I’m going to hope that time or somebody else solves the problem for me. Which, you’d be shocked at how many times, if you just don’t do anything, you defer it, it gets solved, then all of a sudden it comes off your list. So defer it hoping that that happens. No guilt though.
Jim Schleckser: Then the last one is just, don’t do. There’s a lot of things on your list that don’t belong there. You talked earlier about cleaning out our closets, or cleaning out our businesses; this is cleaning out our to-do list. And it’s stupid, for me, but when I have something on my list like that, and I decide that I’m never ever going to do it, and I know that there may be some small implications but I’m okay with it, no guilt, I cross it off my list.
Jim Schleckser: And you know how you get that little euphoria of crossing something off your to-do list, I get it anyway, even though I didn’t do anything. I get that little bump of happiness of crossing something off my to-do list. Then you can focus on the top half of the list. And my recommendation is, you do that three times over about three months. So do it once, do it a month later, do it a month later. And by the time you’re done, you will be boiled down to the absolute five or six most critical things in your business. Everything else will be deferred, don’t do, or delegated, and you will not be working 80 hours a week any more. Because you can’t, because you’ve only got five things to work on. That’s a really powerful, powerful technique.
Luke Peters: Yeah, I love that. I can just visualize this economic impact tool, I can just visualize how that would look, and I’m already throwing things into that. I think it’s great. The other thing I liked is, you’re 100% right that, when things are not done by us, we can look back a couple months later and somehow they got done. By someone else, or you decided it wasn’t that good of an idea in the first place, and you just don’t end up doing it. I like that way to describe it, I like how you’re able to put these into these different buckets and make it really tangible. What have you found are some of the highest leverage activities that CEOs should be doing?
Jim Schleckser: Yeah. By the way, just on that defer, one of the self-talks I give to myself to help with that is, if I can’t find time to do this, it must not be very important.
Luke Peters: Exactly.
Jim Schleckser: Which maybe is self-justification, but it works for me. In terms of the things that are most important, I would really focus on the five hats that we talk about in the book. They’re designed to be ways to remember high-value activities in the business. The first two are on the finding the kink phase, and they are learner and player. They really talk to different ways that people learn.
Jim Schleckser: When I’m trying to figure something out, like what really is going on here that’s stopping me from producing as many widgets as I’d like, or hiring people as quickly as I’d like, or whatever the thing I’m trying to solve for, one move is to just analyze it. This is probably good for the introverts in the crowd, let’s get the spreadsheets, let’s read some books about it, let’s go online and do Google searches, let’s really wallow in the data and understand it at a visceral level, and that’s going to help me figure out what’s going wrong. That works great. Analyst, learner, great technique. Many times, not all the time, you can figure it out through analyst. And as I said, it works for people who are introverted.
Jim Schleckser: I will say player is also a popular way to do it. Player is a little dangerous, because as a leader, we’re jumping into the problem, and we’re kind of experiencing it physically if you will. That might be, I’m running a telesales operation and somehow we’re not getting the numbers, so I’m going to jump on the phones for a couple of hours and understand the scripting and how it’s working, and the reactions I’m getting from clients, at a very personal level, because I’ve experienced it, and that’s going to give me the insight to solve this problem. That’s player mode. I’m actually going and doing.
Jim Schleckser: The classic example I give here is of a CEO going on a sales call with their sales people, which happens. I used to do it when I was selling to the phone companies. I certainly wanted the sale, don’t get me wrong, I was there to help create the sale and do my job in that. But while I was there, I was doing meta-learning. Which is, I was asking myself questions about, is the product price right? Why is this customer not signing up now? Do we have the right amount of value in the equation? Do I have the right salesperson on this account? Is he or she doing the right kind of job? How’s the sales leader? Are they guiding that person correctly? Do I have the right support systems around the sales team to make them effective? All of those questions were going in my sort of second brain, if you will, while my first brain was trying to get the sale. So I was fully in player mode, and my goal was to get the sale, but my real goal was to learn enough about what we were doing to try to make it better when I went back to the office.
Jim Schleckser: So player mode and learner mode are really excellent ways to find the kink, and they both work. My recommendation is, a little of both. We all have a preferred style. Entrepreneurs and action-oriented people probably jump into player mode a lot faster. Accountant and analytic people and introverts probably go to learner-analyst first, but they’d be well to do a little bit of player mode. The trick as a leader is not to get caught in player mode, where I continually be the sales guy because it worked. You have to get yourself out and let people do their job eventually. Those are two of the key hats.
Luke Peters: Makes a lot of sense.
Jim Schleckser: I could jump over to fix, and I’ll go there for a bit. On the fix side, now we’ve figured out the kink right, and the kink generally lies in one of three areas. It’s either, the business model is wrong, and that’s what we charge, who we go after, the margin we get, the value prop that we present, all that kind of stuff; the talent I have around the business, do I have the right A’s, B’s or C’s; and then the processes and system that we have to support people to help them do a great job. And it could be in any of those.
Jim Schleckser: We talk about the architect hat when we talk about a business model problem, redesigning my business if you will, the way an architect would design a building; the coach hat, as in the recruit, retain, and developing great people to help achieve the goals we have here; and then the engineer hat, which is, what are the processes and systems and methodologies we use to create the result we want to. It generally can lie in one of those three places. When I’m looking for a kink I’m asking myself, is it a business model problem, is it a people problem, is it a processes and system problem, and sometimes one will masquerade as the other. But you have to dig down till you think you really have brass tacks and you’ve got the right answer in front of you before you take action.
Jim Schleckser: Those are five. Learner hat, player hat, architect hat, coach hat, engineer hat. Those are really five super high value places to spend your time as a leader.
Luke Peters: That’s a great explanation, and I think the audience will have to rewind that, because there’s a lot baked in there. You just got Jim’s book right there, basically.
Jim Schleckser: You did.
Luke Peters: Cool.
Jim Schleckser: Did it to myself.
Luke Peters: Perfect. That’s great. It’s obviously a lot of nuance when you dive deeper into it, but that’s a very compressed way to look at that, and just kind of get a piece of your brain there. Jim, I guess the next question, and just more briefly, would be, what should CEOs avoid? I know there’s so many small mundane things we should avoid, but it’s hard to pull ourselves out of it. Let me ask this actually in a different way. If you’re looking at your clients, how often do CEOs get an assistant to take these things on, versus delegating it and just finding someone else within the company? It would be great to kind of hear your feedback on if you have experiences on either side of that.
Jim Schleckser: You can do these things through people, and as you scale the organization it’ll be less of you being in player mode, and guiding people to be in player mode, or guiding people to be an architect, or guiding people to be in engineer mode. So as your organization scales, you’re guiding people using that thinking, and maybe a little bit less of you doing it yourself.
Jim Schleckser: I would say maybe two fatal flaws to watch for as a leader. One is, you’re not continually learning. Because the pace of change in the world right now is massive. It’s never been faster. So if you are not constantly upping your skills and upping your game and learning, you are falling behind, and you could become the kink in the hose that can strengthen the business if you don’t continually push your own skills and abilities ahead constantly.
Jim Schleckser: Then the second one is, don’t get caught in a role. Sometimes we dive into the business in player mode to try to rescue things, and there’s a little bit of an issue there. But if we get trapped in player mode, where we’re playing number one sales guy or number one marketing person or number one accountant, or whatever we’re diving into, the question I ask leaders like that, I say “While you’re being the lead accountant, who’s being the CEO?” The answer is nobody.
Jim Schleckser: Those would be the two. If you stop learning, or you get stuck in a role, those are the two really fatal flaws we have to be careful about. But all of this can work through people as well as you doing it. So if your admin is competent to help you do some of this, awesome. If it means your VP of engineering or VP of marketing is the person, then great. So you do it through people too. Perfectly acceptable.
Luke Peters: Cool. I’m just curious though, just specifically on time management, as far as assistants and CEOs, let’s say CEOs of companies over 25 or 30 employees, once you get to a certain size, do you see a lot of them having assistants, or do you see that less of that now, just thinking from a time management perspective? Because sometimes these problems are specific, just like you said. It’s got to go to the VP of engineering. But I’m just curious, just on trend, your thoughts around that.
Jim Schleckser: It’s a mixed bag. I’ve got to say, I think it’s a little generational. I think older CEOs generally think an assistant is important, and they’re effective in using it. As we go younger you see less of it, I think. And a lot of the tools that they grew up with, the productivity tools that they grew up with, allow them to do many of the things that an admin might do, a strict admin. Having said that, they move to maybe a different kind of person who’s another set of hands and eyes, that is maybe even more skilled than a traditional assistant might be. They wouldn’t have that title, they might be business development person, or Chief of Staff, or some other little fancier title, because it’s a little higher-speed than a traditional assistant. They’ll use them to sort of co-work projects. Where I think it out, they go be my hands and eyes and ears for a little bit, then we come co-think it, then they go back out again. You’ll see that model, and a little less of the traditional 1950s, 1970s assistant model, at least that that word evokes for me.
Luke Peters: Yep. How about, if you can, put all this together, and maybe give us a story of a transformation, maybe of a CEO that you’ve worked with. What changes did that CEO work or make in their life, and how was their business different afterwards?
Jim Schleckser: I’ll give you one story. Without names, it’s actually anonymized in the book as well. We have one CEO we worked with for many years. When we first started working with him he had a $150 million business and made $2 million of profit. He was in the government services space, doing resell of fairly commoditized product. The group actually, as well as myself, really talked to him about, you need to make more money. With that much work and that much flow-through and that much risk you need to make more money, at least 10 or 15 million dollars, to be reasonable. So he began to identify more and more specialized products to drive up the margin, as well as adding services and other high value. So you sort of wrap the product with high-value other services that he could provide to up his margin, and he got it up to seven or eight or nine million dollars through that.
Jim Schleckser: But the real breakthrough came, and this is all business model changes … Funny enough, he had an admin. He doesn’t any more, and he’s a little bit older, so he goes against the grain of this generational comment I made. He does it all himself at this point. Which, you could argue he shouldn’t, but he does. He changed the business model to have exclusive relationships on a variety of software, not hardware, products, with much higher margin. And given the exclusive relationship that he had in certain sectors of the government, he was able to get significantly higher margin. He also took over a number of other value streams, including maintenance streams and some other first-level technical support, that the software providers really didn’t want to provide anyway, thus upping his margin again.
Jim Schleckser: And while he didn’t grow that much over the 10 years, in fact he’s only probably $220 million, his profit this year was $55 million. So by focusing on this issue of profit, changing the business model … Which by the way required change in talent, you can’t change your business model and not change your talent, it almost has to go together, so he got much more sophisticated people selling much higher value products to a much more sophisticated client to enable all this, so that all changed. As well as the processes and systems to support a business, because the nature of the business was no longer a buy-and-sell business, it was more of a custom engineered high-end consultative sale.
Jim Schleckser: So the business model broke margin, which changed the nature of the people, which changed the nature of the systems to support that business. That meant slightly bigger business, only 30% bigger, but compared to his initial profit, 25 times higher profit rate. So that was a profound change. By focusing only on the thing that mattered kind of relentlessly.
Luke Peters: It sounds like he had to keep reinventing. He had a couple steps along the way.
Jim Schleckser: He did.
Luke Peters: That’s amazing. How long did that whole timeframe, did that breakthrough, take?
Jim Schleckser: That took 10 years, to be fair. And it kind of comes in fits and starts. We got the first chunk, we got up to nine or 10. All right, now we had a little money to do some things. But now we began to try to engineer these proprietary relationships, then we began to integrate products, and we hired the right people. It was basically, every move we made, the constraint moved to another place in the hose. Which is what it does, by the way. The kink in the hose never goes away, it only moves. So you move to the next kink, you open that one: “Whoops, the kink moved to systems now. I’ve now got to figure out systems, da-da-da. Whoops, the kink moved back to the business model.” So you just constantly … You remember how those magicians would keep a spinning plate on a pole going, and then they’d have two, it’s a little bit like that. You’re kind of moving around, finding the kink, giving it some spin to move to the next level, and moving to the next one. Which he did very successfully over 10 years, and you heard the results.
Luke Peters: It’s unbelievable. And you answered my question, because I was going to say wow, that’s a lot of innovation, and that innovation doesn’t come free, so how was he able to create these unique products, and then actually create pretty much new businesses to work within his business to provide the services and engineering? But you answered it by saying, first he got more profitable. So first he went from 2 million to say 10 million or something like that, and then he was able to then reinvest into those other areas, it sounds like.
Jim Schleckser: Yep.
Luke Peters: That’s a great story, great way to wrap this up, and good to have your wisdom and thoughts on this Jim. How can listeners find more about you, and learn more about your business?
Jim Schleckser: Yeah, absolutely Luke. The best way is to go to our website, which is Inc, I-N-C CEO, Project, dot com. InCEOProject.com, you’ll find us there and learn about how we help CEOs. If you want to grab my book, it’s on Amazon, Great CEOs Are Lazy, in all the formats everybody likes it’s available.
Luke Peters: Yep, that’s great. I have it on Audible, and it really is kind of a fun book, so definitely recommend to everybody listening here on the Page 1 Podcast. Sponsored by Retail Band. Quick reminder that I’m offering a free evaluation of your online digital strategy, we can take a look at your Amazon HD Wayfair Walmart sales. I review your product listings, see if influencer marketing makes sense, and you can find me on LinkedIn, or at Luke@RetailBand.com.
Luke Peters: Hope you all enjoyed the interview today, truly appreciate your reviews on iTunes, and hope you join us for the next interview. Take care.
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