January 23, 2024 • 31 mins
Want to Crush the Competition? Here is episode 3 of our mini Series from Dave Dodson.
Get in here.
Small Business Strategy: Key to Growth
The discussion revolved around the importance of business strategy, especially for small business owners. B.D. and David spoke about the significance of strategy for business growth, even for companies with a small market share. David shared insights from their book, "The Manager's Handbook," and their collaborations with thought leaders such as Michael Porter. They emphasized that having a clear strategy can help businesses stand out in their respective markets. The conversation also touched upon the importance of forming a strong team to execute the strategy and understanding the market dynamics. David suggested that listening to the market and being open to advice are crucial steps in designing a successful strategy.
Market Insights and Strategy Focus
David emphasized the importance of gathering information from employees, customers, vendors, and competitors to better understand the marketplace. They highlighted the need for a specific definition of quality from the customer's perspective and the importance of sticking to a strategy. B.D. questioned the reluctance of companies to ask customers and competitors certain questions, such as why they do or don't exclusively buy from them. David explained the value of open-ended questions and the insights they could provide, as well as the role of trade shows in gathering information. They also stressed the importance of maintaining focus on the strategy without losing sight of the company's mission, vision, and values.
Integrating Leadership and Management Skills
David stressed the importance of integrating various skills of leadership and management, such as hiring and retaining good people, maintaining a focus on priorities, and adhering to quality, to achieve maximum performance. They emphasized that these elements should not be selectively applied but should work together. B.D. raised the concern of how to ensure that employees and clients understand and buy into the company's strategy, to which David responded that setting and maintaining priorities, saying no to distractions, and having specific tools in place can help maintain focus. B.D. shared their personal application of these strategies with clients and expressed plans to provide them with books on the subject.
Operating Plan Development Process
David explained the process of developing an operating plan, emphasizing that it's not merely a budget but a strategic document that outlines focus areas, priorities, and day-to-day operations. They highlighted the importance of involving key stakeholders in the planning process and seeking outside advice. David also stressed the need for leaders to communicate and emphasize the plan's importance throughout the organization. They shared examples of successful companies, such as Southwest Airlines, where all employees are aware of and committed to the operating plan.
Maintaining Corporate Culture and Strategy
B.D. and David discussed the concept of maintaining corporate culture and strategy. B.D. expressed interest in how to ensure a strategy continues to work, prompting David to explain the title of Chapter 21, "Walk behind the Tractor". They shared their father's experience of manufacturing pharmacy equipment, and how they would follow customers to understand their use of the product. David emphasized the importance of understanding the end user's experience, particularly for software companies, where the IT department may not fully understand the product's use. The discussion concluded with David explaining how companies can adapt the "walk behind the tractor" concept based on their specific needs.
Strategy and KPIs in Business Operations
B.D. and David discussed the importance of a clear and actionable business strategy, suggesting that it should be adjusted and honed as needed. David emphasized that this strategy should guide a business's daily operations and that the team must be aligned with it. They also highlighted the importance of selecting appropriate key performance indicators (KPIs) to measure the success of the strategy. Using a lumber yard as an example, David explained that a business should identify its target market and tailor its strategy accordingly.
Key Performance Indicators in Business Strategy
David stressed the significance of setting the right Key Performance Indicators (KPIs) in business strategy. They explained that if contra indicators arise, it doesn't necessarily mean the strategy is wrong; it could mean the KPIs are incorrect or the strategy is being implemented in the wrong way. They highlighted the importance of making adjustments early and not waiting until year three to recognize and adjust a wrong strategy. They also emphasized the need for business leaders to be willing to receive advice and surround the
Get in here.
Small Business Strategy: Key to Growth
The discussion revolved around the importance of business strategy, especially for small business owners. B.D. and David spoke about the significance of strategy for business growth, even for companies with a small market share. David shared insights from their book, "The Manager's Handbook," and their collaborations with thought leaders such as Michael Porter. They emphasized that having a clear strategy can help businesses stand out in their respective markets. The conversation also touched upon the importance of forming a strong team to execute the strategy and understanding the market dynamics. David suggested that listening to the market and being open to advice are crucial steps in designing a successful strategy.
Market Insights and Strategy Focus
David emphasized the importance of gathering information from employees, customers, vendors, and competitors to better understand the marketplace. They highlighted the need for a specific definition of quality from the customer's perspective and the importance of sticking to a strategy. B.D. questioned the reluctance of companies to ask customers and competitors certain questions, such as why they do or don't exclusively buy from them. David explained the value of open-ended questions and the insights they could provide, as well as the role of trade shows in gathering information. They also stressed the importance of maintaining focus on the strategy without losing sight of the company's mission, vision, and values.
Integrating Leadership and Management Skills
David stressed the importance of integrating various skills of leadership and management, such as hiring and retaining good people, maintaining a focus on priorities, and adhering to quality, to achieve maximum performance. They emphasized that these elements should not be selectively applied but should work together. B.D. raised the concern of how to ensure that employees and clients understand and buy into the company's strategy, to which David responded that setting and maintaining priorities, saying no to distractions, and having specific tools in place can help maintain focus. B.D. shared their personal application of these strategies with clients and expressed plans to provide them with books on the subject.
Operating Plan Development Process
David explained the process of developing an operating plan, emphasizing that it's not merely a budget but a strategic document that outlines focus areas, priorities, and day-to-day operations. They highlighted the importance of involving key stakeholders in the planning process and seeking outside advice. David also stressed the need for leaders to communicate and emphasize the plan's importance throughout the organization. They shared examples of successful companies, such as Southwest Airlines, where all employees are aware of and committed to the operating plan.
Maintaining Corporate Culture and Strategy
B.D. and David discussed the concept of maintaining corporate culture and strategy. B.D. expressed interest in how to ensure a strategy continues to work, prompting David to explain the title of Chapter 21, "Walk behind the Tractor". They shared their father's experience of manufacturing pharmacy equipment, and how they would follow customers to understand their use of the product. David emphasized the importance of understanding the end user's experience, particularly for software companies, where the IT department may not fully understand the product's use. The discussion concluded with David explaining how companies can adapt the "walk behind the tractor" concept based on their specific needs.
Strategy and KPIs in Business Operations
B.D. and David discussed the importance of a clear and actionable business strategy, suggesting that it should be adjusted and honed as needed. David emphasized that this strategy should guide a business's daily operations and that the team must be aligned with it. They also highlighted the importance of selecting appropriate key performance indicators (KPIs) to measure the success of the strategy. Using a lumber yard as an example, David explained that a business should identify its target market and tailor its strategy accordingly.
Key Performance Indicators in Business Strategy
David stressed the significance of setting the right Key Performance Indicators (KPIs) in business strategy. They explained that if contra indicators arise, it doesn't necessarily mean the strategy is wrong; it could mean the KPIs are incorrect or the strategy is being implemented in the wrong way. They highlighted the importance of making adjustments early and not waiting until year three to recognize and adjust a wrong strategy. They also emphasized the need for business leaders to be willing to receive advice and surround the
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:02):
Grow, Sell and Retire is thepodcast for the wazy overachiever. BD Dalton,
author of the assistant Purchase, TrueGravity and Grow, Sell and Retire,
is here to give his twenty fiveyears of secrets, tips and assistants
to take your business to the nextlevel. This podcast is for anyone who
wants to sell more, work less, and make better business. Now here's
(00:25):
your host, BD with today's GSRpodcast. Welcome everybody to the Growth Selling
to Retire Podcast. We've got aspecial edition and it's a bittersweet because coming
to the third episode, so you'llbe sad like me if you've listened to
the other two episodes and knowing thatthis is our last of the three.
But we're talking today about crushing thecompetition with Dave Dodson, the author of
(00:49):
the Manager's Handbook. Dave, Welcometo the program, Happy to be here
and listen. BD. You andI are going to come up with more
things to talk about, so thisis not the last time we're together.
This is fun. This is lotsof fun. So we've talked about managers.
We've talked about employees and creating superpowers. We've talked about motivating managers.
All this stuff Today, we're goingto talk about something that you have such
(01:11):
a background in and you've talked toso many people about, which is strategy
and talking about leveraging business strategy.I'm the owner of one hundred thousand pound,
five hundred thousand pound turnover company orfive hundred dollars thousand dollar turnover company.
Why do I care about strategy?Yeah? This is so near and
(01:34):
dear to my heart, in partbecause one of my thought leaders when I
was or thought partners when I waswriting the book was Michael Porter. Michael
Porter teaches at Harvard Business School,and he is the undisputed king of strategy.
And he and I spent hours andhours talking about this, getting quite
excited about it, and talking abouteven writing a book about strategy for smaller
(01:55):
businesses. And here's why. Like, the key insight that Michael Porter had
was it strategy was about finding acorner of the market, an area where
it is underserved, and going afterthat. Now that may seem simple,
but I will tell you that isso much harder for Disney or Verizon or
Exxon to do. If you're asmall business person and you've got a million
(02:17):
in revenue or five million in revenue. You need an infinitesimal little corner of
the market to clobber things. Now, most of my work is with small
to medium sized businesses, and Iwill tell people you have one tenth of
one percent of the market share.If you get one half of one percent
of the market share, your companyhas grown five times the size. You
(02:38):
will be doing victory lapse across yourtown. And so strategy is actually easier
to implement and more important for smallercompanies than it is for bigger companies.
And Michael Porter absolutely shared that belief. That's amazing, and that's what I
always talk to our clients about,is, Okay, if we cloned your
top client, how much better wouldyour life be? Because the old the
(03:00):
old pareto principal eighty twenty. Youknow, you get they get eighty percent
of your profits off a twenty percentof your clients. So making that strategy
is very very important. So andB, by the way, BD,
I want I want to tell youan example of a company that I was
involved in for quite a while.I was on the board of this company.
Their name is assuring. You mightknow the name, but you wouldn't
know the name when we first gotit started, we had about twenty five
(03:21):
million in revenue, and it wasa roadside assistance company for cellular carriers.
So you add another four or fivebucks on your cell phone bill every month,
and then if your battery was deadthen it would be like triple A.
They made one strategy decision. Theywere a very small company. They
said, let's think of ourselves morelike a company that helps cellular companies acquire
(03:45):
and keep their customers, and that'sour focus. Well, their revenue is
about ten billion today. So bythe way, if you're a small company
and you want to get to tenbillion, having a good strategy when you're
twenty five million can help us well. And we talked about on the last
one, is really getting back tothat message and what you're really driving for
to get your clients and team along. So what's the first step. You
(04:06):
sat there with Michael Porter, you'vesat there with the CEO is a big
company, small companies, you've runyour own company. What is the first
step I should step back and takea look when we're starting to design our
strategy for our business. Okay,so the first thing I would do is
I would listen to my old Stanfordcolleague Jim Collins, who wrote the book
Good to Great when he said,first two then what so as you're thinking
(04:30):
about the five parts of the youknow what makes for a good leader and
crushing the competition and outlined in thebook The Manager's Handbook, the first one
is building a team. You havegot to get some thought leaders around forming
the strategy. So that is ahands down step one and the qual friend
of mine, Brahm Weaver, whoI teach with at Stanford, he said,
the first three hires are the mostimportant hires that you'll make your entire
(04:54):
career. So first get your teamin place. Then the second is understand
what's going on in the marketplace.And in part three of the book Willingness
to Seek and take advice, Ihave a chapter called five Questions, really
simple chapter, but it walks youthrough five magical questions that if you ask
your employees, your customers, yourvendors, and your competition, you will
(05:18):
know more about your marketplace than nearlyall of your rivals combined. And I'm
not being hyperbolic there, bd,I really really mean that because most managers
sit in a room and they talkto each other in their echo chamber.
And then they go out and seeif it works in the marketplace, and
most mistakes were the information was knownbefore they made the mistake, if they
just gone out and asked people.So those will be the first two steps.
(05:42):
And then part five of the bookabout obsession with quality talks about specific
ways that you define you know,what quality means to your customers, which
is the key to a strategy.And then part part four is how do
you stick? How do you stickto it? Because we're all like,
you know, you have a greatstrategy, and then you think, oh,
well, what about this and whatabout this shiny object? And what
about this problem? And so havingguardrails in place so that you actually adhere
(06:05):
to those priorities and focus on yourstrategy. So when you're doing that and
you're going through and I'm looking atthe page, page one fifty one on
the questions and you're asking these questions, do people some of these not ask
why so would you what would youneed us to do to earn more of
your business? Or the scary onehere is do you exclusively buy from us
(06:26):
or from others? And why?You know? So? Do people not
ask these questions because they don't thinkabout it? Or do they are?
They are they scared of building astrategy around competing or competing in the markets.
Okay, so BD, you're onthe five questions to ask customers,
And it starts with most people actuallydo not talk to their customers. They
(06:47):
will deal with a problem, theywill fix the situation, but by learns
are not out there in front oftheir customers, or they'll get filtered information
from their employees, and that isgoing to be filtered. So if you're
a leader, you have to getout in front of your customers. These
are really really straightforward questions like whydo you buy from us? Notice how
open ended the question is. Okay, and you have to preface it,
(07:10):
and I explained how to preface itin the book with I'm not here to
sell you anything. Just say,b D, why do you buy from
us? And then just shut upand listen to what they say and listen
to the insights that they'll tell youabout. The reason I say, why
do you buy exclusively from us orfrom others? And why is that?
Starts to introduce what's happening with thecompetition? What was a competition doing better
(07:30):
than us? They might say,well, I buy from you for these
types of situations. But for thesetypes of situations, I have to go
elsewhere because your product weighs a littletoo much, or your product doesn't fit
in the book. Oh jeez,do you mean if we just changed the
packaging, you would buy more fromus? Oh? Absolutely, you know.
Those are kind of the insights thatyou get from us, but don't.
(07:51):
One of the surprising parts of thatchapter was the five questions to ask
your competition. And you might go, well, they're not going to tell
you anything. Oh boy. Yougo to a trade show and you talk
to people and I'm not talking aboutgetting proprietary information trade secrets, just saying
things about you know, the employeesand uh, why do you like working
(08:11):
there? And they talk about theculture that they have in place, and
you go, okay, well that'sone of the strategic weapons that they use.
You ask those five questions, amongthose five coorts, you're going to
know so much more than everybody else. And by the way, most of
your listeners could do it in aweek. And that's awesome. And I
think the one thing that scares theheck out of me, and I had
this twice this week when when Isay who do who do you lose business
(08:33):
to and and both clients said,oh, we don't lose business, but
they're going through a coaching program.So I said, the main reason people
go through a coaching program is becausethey're looking to increase sales. So if
you think you're not losing business,then you might not be asking enough people
enough, enough of the right things. But but overall you're that's that's an
amazing thing. So here's here's athing. And in today's the world of
(08:54):
trying to hire, retain, keeppeople. So you have this strategy,
how do you maintain or focus ona strategy without losing sight of your mission,
your vision, and your employees ethosand what you what you started this
business for. As you know,when you're putting the pieces together to run
(09:15):
an organization. If I could usea sports analogy, or I'll use a
music analogy. You can't play thepiano and say, well, I'm only
going to pay attention to the whitekeys and not the black keys, or
I'm not going to ignore the pedals, or I know what a sharp is,
but not a flat is. Youhave to bring all these pieces together.
And I got to go back toI got to go back to Professor
(09:37):
Porter on this. I may havementioned this to you before, but after
I'd finished the book and I wrotethe introduction, and this is when he
told me, you got it allwrong. What he said was, you
can't present these five skills of leadershipor management as things you can pick and
choose, like I'm going to dochapter thirteen, but I'm not going to
do chapter seventeen because chapter seventeen lookshard. Okay, they actually all integrate
(10:00):
together. So let's just go backto what we were talking about before.
BD. If you're trying to puttogether a good strategy, you have to
be able to hire and retain greatpeople and give them good feedback so that
you're getting the maximum performance out ofthem. Well, that's you know,
part part one of the book.But you also can't do you can't go
to part four five, which isan obsession with quality if you don't have
(10:24):
good people, and you can't runa good meeting, which is where you
manage your time well, if youdon't have good people, and if you
don't have if you don't have focus, which is part three of the book,
which is you know, an abilityto adhere to priorities, so they
all actually fit together. But what'samazing, and I've seen this over and
over again, is if you arewilling to put those five puzzle pieces together,
(10:46):
it's turbocharge. It is not youknow, one plus one plus on
equals five. It's when you putthem together, they start to integrate,
they start to work together, andit's twenty five. And that's why all
of us look out window and theygo, why are those guys so much
bigger than me? Or why isthat company doing so much better than me?
Or why are the employees going overthere? It's because they brought these
(11:07):
five pieces together. And that's whereyou rush the competition and you're asking better
questions. And I think one ofthe one of the podcasts I had with
with Jay Abrahams said how can wemake your your top line this year your
bottom line next year? And Ithink all this stuff you're talking about today
and then repeat that and repeat thatand repeat that, and that's how you
get from your your ten million turnoverto your ten billion turnover that you had
(11:30):
for the insurance agents. But andI agree with how you're looking at that.
So when you're looking at strategy andyou go back to what you've talked
about with Porter and the stuff thatyou've learned. How do you make sure
that your strategy isn't so out therethat your employees or your your even even
your clients lose sight of it?Because your your strategy should include how you
(11:54):
keep and retain and sell to betterclients too. So how do you how
do you make sure they understand whereyou're trying to go so that they buy
into where you're going and they staywith you. The fourth part of the
book, setting it and heering topriorities, there's a whole part devoted to
this because of what you're saying rightthere. It is so tempting. After
(12:16):
you you can set the perfect strategy, but then you wake up in the
next day and there's the dumps towhat I call the dumpster fires that you're
chasing after or the shiny objects thatare interesting, and it takes you off
strategy. And that would be oneof the number one I kind of three
things that I think are the threeareas where people fail in strategy, and
one of them is exactly that theycan't stick to something. And Johnny Ive
(12:37):
who was the chief designer and Apple, he said, you don't just wake
up one morning and say, oh, I'm going to be focused. You
have to have a culture of focus, but you also have to have specific
tools in place to maintain that focus. So I'll give you, like a
really simple thing. The companies thatI work with, we take a while
to figure out what are those twoor three or four focus areas that they
(12:58):
need to get everybody working on.And then what we do is we make
it into a loose sight, justa small, little loose site that sits
on everybody's desk, everybody's desk thathas these three things that everybody's supposed to
be focused on, and at thebottom, it says, what have you
said no to today? Because adheringto priorities is also being willing to say
(13:18):
no, which was maybe the singlebiggest lesson I learned from studying sep jobs.
He was relentless about saying no tothings. And that's how you solve
the problem that you describe med.But you have to have you have to
have tactical guardrails in place. Youcan, as Johnny I've said, you
can't just say hey, let's allbe focused today. And I've been having
(13:39):
a lot, I mean I've reallybeen as we've been going through this It's
really helped me align myself and actuallystart using a lot of the stuff you're
talking about with clients and buying thebooks and giving them to them. So
in chapter eighteen, walk us throughan operating plan and kind of some of
the things that I know you've gotbecause you write your books like love Is,
(14:00):
I can go to the end ofit and just go, Okay,
I don't have time to read this. I'm getting ready to go into a
meeting. How do I think aboutan operating plan? So walk us through
some strategy is Okay, we're goingto get to hear the who than what,
Like Porter said, it is,how do we then implement that and
turn that into a strategy that wecan tactically deliver. There's probably, you
(14:24):
know, several dozen good ways todevelop an operating plan. What I did
in the book is I looked atthe people who I admire the most in
terms of their ability to create anoperating plan, and I harmonize it into
like just a simple paint by numbers. Do this and this and this and
this and this. Begins with theunderstanding that an operating plan is not a
budget. A budget is just partof your operating plan. But a budget
(14:46):
is principally kind of a guess ofwhat's going to happen next year in terms
of revenue and sales, But thatdoesn't inform what are you going to do
in Q one, what are yougoing to be focused on? What are
you going to say no to?What is your day going to be like?
That's the difference between a budget andan operating plan. And I layout
a process where you can bring yourbought partners together, how you brainstorm the
(15:09):
ideas to develop your operating plan,how you get it down to three or
four, then how you go outand get outside advice, and how you
use outside advice. You don't sendyour operating plan to somebody, whether it's
your board member or an advisor andsay, hey, what do you think.
It's a very structured way to doit, so that if they're going
to give you forty five minutes,you're going to get forty five hours worth
of value from that forty five minutes. And then at the end of developing
(15:33):
that operating plan, then it ishow do you memorialize it into your KPIs
your key performance indicators? So peoplekeep thinking it's like the loose sight thing.
BD we're just talking about. Soevery day they're thinking about, this
is what we're working on. We'renot working on that. This is what
we're working on. It's part ofyour compensation plan, your quarterly compensation plans.
It reflects what we're working on today. So everything is coming together.
(15:54):
So when people get in the caror log onto zoom to get started for
their day, they know that's importantfor the company. I was a CEO
that I'm working at. He hasa company that's in Africa, and one
of the things I was talking tohim about is you have to begin every
single meeting with how did we doyesterday? In there there's two areas He's
(16:15):
focused on his manufacturing company. Howdid we do yesterday in these two areas?
Why not necessarily because we're going tomake operating decisions from day to day.
But so that people what I toldhim the same as Felix I told
he runs a company called Saying Ku. I said, Felix, you want
people walking through your factories going Felixis like obsessed with this, like you
(16:37):
like you like I mean, it'she's a lot of like crazed. That's
that's the level of focus that youneed to show as the leader, so
that it then pours down into yourorganization and everybody's like, okay, this
is what we working on. Likelike you and I have talked about Herb
Keller with a ten minute term withSouthwest Airlines turned the planes around in ten
minutes. Everybody, everybody, literallyeverybody be the at Southwest Airlines knew that
Herb Keller was he reamed about fiveminute turns. That's that's amazing. And
(17:03):
the way everything works there is isis fabulous. And I was just thinking
through through the some of the stuffwe've we've talked about and the things that
you bring bring into it, andand also our times and how we date
ourselves. Is I could see thison a mousepad back in the day,
you know, instead of a loosesight somebody have a mousepat that would have
But we don't even use mouse petsanymore. So it makes sense you're you're
(17:26):
dating yourself here. But it's justone of the things, you know,
and it always seems so I getthe comment that it's so American. It's
like, well, okay, youknow corporate culture. You know, you
still want to have a corporate cultureand have all that type of stuff.
So walk me through. You startto look at this and you talk about
(17:48):
in chapter twenty one about walking behindthe tractor. So when you now,
now you've done the strategy, You'veyou've laid some stuff out, you've created
a plan, and you've got somepeople bought in, and you've got your
your advisors. So now how doyou make sure it's still working? So
you've got a strategy, how doyou make sure it's still working? Can
I? Can I quickly describe whytitled the chapter walk behind the tractor?
(18:11):
Please? Do? That helps outso much? So my dad manufactured farmer
group wasn't a big business, buthe manufactured farm equipment, so there's things
that were dragging behind the tractor.But farm equipment sold through dealers, kind
of like cars or sold through dealers, so his customers were not the end
users. But when I was withhim on my weekends in how we spent
(18:33):
our weekends in rural Colorado, wewould be walking behind the tractor and he
had a little voice recorder. Hedidn't care what the dealer thought because he
didn't want his He wanted to knowwhat the end user thought, the person
who was actually using his equipment.All right, let's fast forward to today,
and I'll give you a modern dayexample into It. Into It,
which makes Quicken and TurboTax and soforth. They have a model called follow
(18:57):
Them Home, which is their equilto walk behind the tractor. They want
to see how the end users act. They want to watch the end user
actually use their product. I amamazed at how many companies miss this simple
concept of going to the end user, especially by the way software companies,
because oftentimes the IT department of theperson making the software decision is not the
(19:18):
person whose fingertips are on the keyboard, and so not only will you get
a sense of the quality of yourproduct, but that's where you get all
the insights when you say, well, why are you going there on my
software program? Well, because that'smy workaround you. Oh so if we
just had a button there, ohmy god, that would be fantastic.
You're not going to get that fromthe IT department. You're not going to
(19:41):
get that from the purchasing department.You're going to get that from the cashier
at the POS system who's checking customersout. And you're going, oh my
gosh, we just added two extrasteps to this poor person's job. All
we need is a button. Sothat's the concept of walk behind the tractor.
But in the chapter I lay outto examples of companies who have done
it, so that if depending uponyour company, you can say, okay,
(20:03):
well, how do I walk behindthe tag? Oh okay, well
that's how a software company walks behindthe tractor. Or if you have a
self farm equipment, that's how mydad walk behind the factor. That's great.
So how you know, kind ofone of those things you make a
business plan. It's December, youget ready, you make this business plan,
or the next year's twenty percent increase, five hundred percent increase, whatever
(20:23):
else it is, and it getsshoved in the jar. Nobody looks at
it, follows it believes it.When you look at your strategy, how
often should you tweak it if it'snot on the loose sight and that it's
not the goals and the heart andthe ethos of the business but the actual
kind of overall strategy. How oftencould you, without beating it to death,
(20:48):
own your business strategy. I wouldthink about it probably in these three
ways. The five skills that areoutlined in the book. Think of those
like the scaffolding, how we hire, how we run meetings, how we
ask our customers question. So that'sthe scaffolding around your business. And I'm
going to mix metaphors a little bitbecause I think it'll I think it'll be
(21:10):
clear if I do it that way. Actually, the strategy is this is
what this is where we want tobe when we grow up. This is
our customer segments, this is whatwe're going after. The last part is
the implementation piece of it. Andthat's where you're bringing those two things together.
You're saying, this is where wewant to go. We've got all
the pieces in place, We've gotthe right team in place, we want
our processes in place, all allthe things we talked about, and now
(21:33):
it's sort of this day to dayexecution against the plan, principally principally,
by the way, by saying no, I've said that an operating plan,
if it can't fit on a postcard, you got to go back and keep
working on. The underlying document maybe deeper because it because it informed that,
but in the end, it literallyis this postcard where people are looking
saying, Okay, this is whatwe're working on. And I don't care
(21:53):
what company you pick. The companiesthat that that you admire, that you
succeed. Whether they're billion dollar companiesor ten million dollar companies, they wake
up in the morning and they knowwhere they want to be and they're going
in that direction. The lumberyard says, our key customer is the do it
yourself weekend customer, and that's whowe cater to. We don't cater to
(22:15):
contractors because there are a completely differentmarket segment. Okay, well this is
a I'm describing a five million dollarbusiness. But when they wake up in
the morning, they're saying, howdo we help that do it yourself weekend
contractor or or handy person get theirjob done. So it's everything from Apple
Computer to Disney to all the wayto the local lumber yard. So when
(22:36):
you're when you're looking back at thisand you're you're starting to do it,
and it's your strategy is starting towork, and you talk about moneyball,
you talk about some other things.So how do we start to look at
the KPIs and the targets and thethings that how do we figure out if
it's working. So we've now we'vegot some traction. Now we've implemented a
strategy. What are some things soyou could create a hypothetical com or whatever,
(23:00):
But how would I measure that mystrategy is working? The chapter seventeen
K Performance Key Performance Indicators is reallyall about that, and it's about figuring
out how you're going to measure success. And the reason why I feel like
your question is so important is thatthere's a subtlety to it, which is
(23:21):
that you have a strategy, youown it, you believe in it,
you're all excited about it. Yougot the slogans up, you're singing the
song. You want it to havebeen true. You want to have picked
the right strategy, and you wantto be winning, which means that you're
going to have this tendency to movethe goalposts back and forth all the time
based on historical data. So whatyou have to do in your operating plans
(23:41):
you have to say, this ishow we're going to measure success, and
you measure it sometimes daily, oftentimesno less than weekly, and you put
a stake in the ground. Nowwhen you set those KPIs, and generally
it's only two or three KPIs,and most people make the mistake of saying,
if I can measure it, Ineed to pay attention. No,
you need to have like two orthree things that are if you get those
(24:02):
right, you can be wrong andeverything else. If you get those wrong
and you're right and everything else,it won't make any difference. And you
put that stake in the ground bD. And then what happens is if
you find contraindicators, things that arenot lining up the way you want it
to. It doesn't mean your strategyis wrong. It could mean one of
two things, one of three things. One it could mean you pick the
wrong KPI. That's fine, youmake that adjustment. The second is that
(24:25):
your strategy is right, but you'reimplementing it in the wrong way. Okay.
The earlier you learn that the better. And the third is I got
the wrong strategy. That's okay,all right. What's not okay is if
you have the wrong strategy and youdiscover it in year three, if you
discover it in your in month fouror five, and you and you develop
a different strategy, that's totally fine. And every great CEO will talk about
(24:48):
their fly and I've heard over andover and the CEOs that you that you
most admire love to talk about theirflops. Now most of the time you
don't know about it because they discoveredit early and they made that adjustment.
But that's why developing the KPIs anddoing it correctly is so important. And
I do in the book, Ilay out the process of how to develop
KPIs in a way that will reallydrive your business. I think you open
(25:12):
it with you a quote. Youopen all your things with a quote.
But the knowledge is knowing that atomato is a fruit. Wisdom is knowing
not to put it in a fruitsalad, you know by Miles Clington Kington.
But overall that it's just such agreat it's such a great thought.
So and understanding that you screwed upor or didn't get the KPI right is
(25:33):
okay, but get don't put itin the fruit salad, move it back
to move it back to making tomatosauce or whatever you're going to do at
that point in time, because it'sokay. And then the last part of
that. So a lot of ownermanaged businesses, even up to the ten
million, there is a lonely personsitting that has a very cool parking space
and usually a very nice car,and everybody thinks goes on excessive holidays and
(25:57):
all this type of stuff. Theowner. How do they then surround themselves
with a good board to bounce thesestrategies off of, not just sitting on
a KPI, not just sitting backand believing that they're right. How does
somebody become unlonely? Part three iscalled a willingness to seek and take advice.
(26:18):
And that might sound like, youknow, kind of motherhood and apple
pie and so forth. But whatI found. Remember I didn't come up
with these five things and then writea book. I actually investigated great leaders
and started writing down and I foundthese five commonalities. They were all sometimes
(26:38):
quiet and sometimes not so quiet,massive consumers of advice. The most celebrated
one was you know Bill Gates andWarren Buffett, and how Bill Gates would
play bridge with Warren Buffett, andthe kind of advice you would give these
people who we think about it withX ray vision and they've got their red
(26:59):
cape and so forth. They actuallywere were voracious consumers of advice. And
in fact, this week in classat Stanford, I was talking about this
very issue with a company. Shehas a toy company, a small toy
company, and she got into aninteresting situation and she had no advisors around,
and I made the point I said, by having a strategic plan for
(27:22):
seeking and taking advice, you dotwo things. One, you increase the
odds that you make good decisions.And what I told my students is,
I said, what would happen toyour company if instead of you making the
right decision seventy percent of the time, you made it eighty five percent of
the time. Now, there's nosuch thing as one hundred, but you
did that. And the second isthat you made those decisions faster, so
(27:45):
that instead of spending ten hours ona decision, you got it done in
two hours. And of course everybody'ssaying, I think that would be a
massive competitive weapon. Okay, well, what's the easiest way to do it?
Pick up the phone and call someonewho's seen this problem five times before
or has some pattern recognition around thatand can help you through it. The
last piece of it, though,is that when you pick up the phone,
(28:10):
are you going to take that halfan hour and are you going to
talk for twenty two minutes and getfour or five minutes of advice in that
half an hour, or are you'regoing to structure that conversation in a way
that you maximize the amount of valuethat you get out of those conversations.
And I again, it's kind ofa paint by numbers book, right,
BD. So in terms of howyou seek advice, there's a formula on
(28:34):
this. These are the five stepswhen you get on the phone. It's
all very conversational, but the fivesteps when you get on the phone,
so that when you hang up thephone, you're like, wow, I
got like two hours worth of informationfrom that person in fifteen minutes. And
by the way, when you doit that way, they want your phone
call again. Because if I calledyou up BD for advice on something and
(28:55):
you hung up the phone and youwere thinking, eh, you know it
was all right. I mean Ithink I helped a little bit. Yeah,
Or you hang out the pony andsay this, I feel really good,
Like I really helped David with thisproblem and I felt good about that.
You want another phone call for mebecause you enjoy giving advice, you
enjoy helping people, so that there'sthis flywheel effect as well. That's amazing
because it's really hard, it's reallyhard to track down those people. And
(29:18):
then if they're good at their jobor what they ever, their time is
very important. So it's you've gotto be respectful and they want to talk
to you. You've got a decisionto make, you want to make the
best decision. And it also goesthrough how you structure your meetings. So
a quick example is when we runour meetings, when it gets time to
decision time, we always ask forpeople's recommendation and reverse order of seniority because
(29:41):
we don't want people to guess whatthe boss is because I want to pull
out the best thinking of my team. So that's such a simple thing to
do. Everybody can do it tomorrowmorning. So the book kind of lays
out these very simple things that youcan do to greatly enhance the value of
the advice that you're getting so youmake better decision quicker. So we talk
(30:03):
about this and we sit back,and everybody's competitive, even if they don't
want to be. If you're runninga business, you are a competitive person,
no matter whether you think or not. So we've this series has been
called crushing the competition. So ifyou were to look at strategy and say,
here's the one thing that if youdid nothing else after this podcast,
but I want you to do thistoday, what would be that one thing
(30:26):
around strategy? It would be tochange your mindset from I am the person
who does things to I'm a teacher. What I mean by that is you
have to build these practices, thesehabits, these norms across your whole organization.
And when I've seen leaders say myjob today is I'm a teacher.
(30:48):
I want to teach people how towalk behind a tractor. I want to
teach people how to do exit interviews. I want to teach people how to
make good decisions and seek to takeadvice, and that starts to spread through
the organization. That's the fundamental difference. You are a teacher, you are
not a manager. That's amazing.Dave Dodson of the Manager's Handbook. It's
been amazing to have you on thisCrushing the competition many series that we've had.
(31:11):
You've been such so helpful and sogenerous with your time and with your
information. Thank you so much forcoming on the Gross Selling Retire podcast.
Great to be here, Bed,Thanks for joining us on Grow, Sell
and Retire. For more information toolsor to book one of our team members
to work with your team business,or to speak at your event or conference,
(31:33):
visit rockfind dot co dot uk.If you like the podcast you'll love
one of BD's three books, theassisted purchase True Gravity and the book.
The podcast is based on Grow,Sell, and Retire. If you want
to work for the rest of yourlife, that is your business. If
you don't, that is ours.
Grow, Sell and Retire is thepodcast for the wazy overachiever. BD Dalton,
author of the assistant Purchase, TrueGravity and Grow, Sell and Retire,
is here to give his twenty fiveyears of secrets, tips and assistants
to take your business to the nextlevel. This podcast is for anyone who
wants to sell more, work less, and make better business. Now here's
(00:25):
your host, BD with today's GSRpodcast. Welcome everybody to the Growth Selling
to Retire Podcast. We've got aspecial edition and it's a bittersweet because coming
to the third episode, so you'llbe sad like me if you've listened to
the other two episodes and knowing thatthis is our last of the three.
But we're talking today about crushing thecompetition with Dave Dodson, the author of
(00:49):
the Manager's Handbook. Dave, Welcometo the program, Happy to be here
and listen. BD. You andI are going to come up with more
things to talk about, so thisis not the last time we're together.
This is fun. This is lotsof fun. So we've talked about managers.
We've talked about employees and creating superpowers. We've talked about motivating managers.
All this stuff Today, we're goingto talk about something that you have such
(01:11):
a background in and you've talked toso many people about, which is strategy
and talking about leveraging business strategy.I'm the owner of one hundred thousand pound,
five hundred thousand pound turnover company orfive hundred dollars thousand dollar turnover company.
Why do I care about strategy?Yeah? This is so near and
(01:34):
dear to my heart, in partbecause one of my thought leaders when I
was or thought partners when I waswriting the book was Michael Porter. Michael
Porter teaches at Harvard Business School,and he is the undisputed king of strategy.
And he and I spent hours andhours talking about this, getting quite
excited about it, and talking abouteven writing a book about strategy for smaller
(01:55):
businesses. And here's why. Like, the key insight that Michael Porter had
was it strategy was about finding acorner of the market, an area where
it is underserved, and going afterthat. Now that may seem simple,
but I will tell you that isso much harder for Disney or Verizon or
Exxon to do. If you're asmall business person and you've got a million
(02:17):
in revenue or five million in revenue. You need an infinitesimal little corner of
the market to clobber things. Now, most of my work is with small
to medium sized businesses, and Iwill tell people you have one tenth of
one percent of the market share.If you get one half of one percent
of the market share, your companyhas grown five times the size. You
(02:38):
will be doing victory lapse across yourtown. And so strategy is actually easier
to implement and more important for smallercompanies than it is for bigger companies.
And Michael Porter absolutely shared that belief. That's amazing, and that's what I
always talk to our clients about,is, Okay, if we cloned your
top client, how much better wouldyour life be? Because the old the
(03:00):
old pareto principal eighty twenty. Youknow, you get they get eighty percent
of your profits off a twenty percentof your clients. So making that strategy
is very very important. So andB, by the way, BD,
I want I want to tell youan example of a company that I was
involved in for quite a while.I was on the board of this company.
Their name is assuring. You mightknow the name, but you wouldn't
know the name when we first gotit started, we had about twenty five
(03:21):
million in revenue, and it wasa roadside assistance company for cellular carriers.
So you add another four or fivebucks on your cell phone bill every month,
and then if your battery was deadthen it would be like triple A.
They made one strategy decision. Theywere a very small company. They
said, let's think of ourselves morelike a company that helps cellular companies acquire
(03:45):
and keep their customers, and that'sour focus. Well, their revenue is
about ten billion today. So bythe way, if you're a small company
and you want to get to tenbillion, having a good strategy when you're
twenty five million can help us well. And we talked about on the last
one, is really getting back tothat message and what you're really driving for
to get your clients and team along. So what's the first step. You
(04:06):
sat there with Michael Porter, you'vesat there with the CEO is a big
company, small companies, you've runyour own company. What is the first
step I should step back and takea look when we're starting to design our
strategy for our business. Okay,so the first thing I would do is
I would listen to my old Stanfordcolleague Jim Collins, who wrote the book
Good to Great when he said,first two then what so as you're thinking
(04:30):
about the five parts of the youknow what makes for a good leader and
crushing the competition and outlined in thebook The Manager's Handbook, the first one
is building a team. You havegot to get some thought leaders around forming
the strategy. So that is ahands down step one and the qual friend
of mine, Brahm Weaver, whoI teach with at Stanford, he said,
the first three hires are the mostimportant hires that you'll make your entire
(04:54):
career. So first get your teamin place. Then the second is understand
what's going on in the marketplace.And in part three of the book Willingness
to Seek and take advice, Ihave a chapter called five Questions, really
simple chapter, but it walks youthrough five magical questions that if you ask
your employees, your customers, yourvendors, and your competition, you will
(05:18):
know more about your marketplace than nearlyall of your rivals combined. And I'm
not being hyperbolic there, bd,I really really mean that because most managers
sit in a room and they talkto each other in their echo chamber.
And then they go out and seeif it works in the marketplace, and
most mistakes were the information was knownbefore they made the mistake, if they
just gone out and asked people.So those will be the first two steps.
(05:42):
And then part five of the bookabout obsession with quality talks about specific
ways that you define you know,what quality means to your customers, which
is the key to a strategy.And then part part four is how do
you stick? How do you stickto it? Because we're all like,
you know, you have a greatstrategy, and then you think, oh,
well, what about this and whatabout this shiny object? And what
about this problem? And so havingguardrails in place so that you actually adhere
(06:05):
to those priorities and focus on yourstrategy. So when you're doing that and
you're going through and I'm looking atthe page, page one fifty one on
the questions and you're asking these questions, do people some of these not ask
why so would you what would youneed us to do to earn more of
your business? Or the scary onehere is do you exclusively buy from us
(06:26):
or from others? And why?You know? So? Do people not
ask these questions because they don't thinkabout it? Or do they are?
They are they scared of building astrategy around competing or competing in the markets.
Okay, so BD, you're onthe five questions to ask customers,
And it starts with most people actuallydo not talk to their customers. They
(06:47):
will deal with a problem, theywill fix the situation, but by learns
are not out there in front oftheir customers, or they'll get filtered information
from their employees, and that isgoing to be filtered. So if you're
a leader, you have to getout in front of your customers. These
are really really straightforward questions like whydo you buy from us? Notice how
open ended the question is. Okay, and you have to preface it,
(07:10):
and I explained how to preface itin the book with I'm not here to
sell you anything. Just say,b D, why do you buy from
us? And then just shut upand listen to what they say and listen
to the insights that they'll tell youabout. The reason I say, why
do you buy exclusively from us orfrom others? And why is that?
Starts to introduce what's happening with thecompetition? What was a competition doing better
(07:30):
than us? They might say,well, I buy from you for these
types of situations. But for thesetypes of situations, I have to go
elsewhere because your product weighs a littletoo much, or your product doesn't fit
in the book. Oh jeez,do you mean if we just changed the
packaging, you would buy more fromus? Oh? Absolutely, you know.
Those are kind of the insights thatyou get from us, but don't.
(07:51):
One of the surprising parts of thatchapter was the five questions to ask
your competition. And you might go, well, they're not going to tell
you anything. Oh boy. Yougo to a trade show and you talk
to people and I'm not talking aboutgetting proprietary information trade secrets, just saying
things about you know, the employeesand uh, why do you like working
(08:11):
there? And they talk about theculture that they have in place, and
you go, okay, well that'sone of the strategic weapons that they use.
You ask those five questions, amongthose five coorts, you're going to
know so much more than everybody else. And by the way, most of
your listeners could do it in aweek. And that's awesome. And I
think the one thing that scares theheck out of me, and I had
this twice this week when when Isay who do who do you lose business
(08:33):
to and and both clients said,oh, we don't lose business, but
they're going through a coaching program.So I said, the main reason people
go through a coaching program is becausethey're looking to increase sales. So if
you think you're not losing business,then you might not be asking enough people
enough, enough of the right things. But but overall you're that's that's an
amazing thing. So here's here's athing. And in today's the world of
(08:54):
trying to hire, retain, keeppeople. So you have this strategy,
how do you maintain or focus ona strategy without losing sight of your mission,
your vision, and your employees ethosand what you what you started this
business for. As you know,when you're putting the pieces together to run
(09:15):
an organization. If I could usea sports analogy, or I'll use a
music analogy. You can't play thepiano and say, well, I'm only
going to pay attention to the whitekeys and not the black keys, or
I'm not going to ignore the pedals, or I know what a sharp is,
but not a flat is. Youhave to bring all these pieces together.
And I got to go back toI got to go back to Professor
(09:37):
Porter on this. I may havementioned this to you before, but after
I'd finished the book and I wrotethe introduction, and this is when he
told me, you got it allwrong. What he said was, you
can't present these five skills of leadershipor management as things you can pick and
choose, like I'm going to dochapter thirteen, but I'm not going to
do chapter seventeen because chapter seventeen lookshard. Okay, they actually all integrate
(10:00):
together. So let's just go backto what we were talking about before.
BD. If you're trying to puttogether a good strategy, you have to
be able to hire and retain greatpeople and give them good feedback so that
you're getting the maximum performance out ofthem. Well, that's you know,
part part one of the book.But you also can't do you can't go
to part four five, which isan obsession with quality if you don't have
(10:24):
good people, and you can't runa good meeting, which is where you
manage your time well, if youdon't have good people, and if you
don't have if you don't have focus, which is part three of the book,
which is you know, an abilityto adhere to priorities, so they
all actually fit together. But what'samazing, and I've seen this over and
over again, is if you arewilling to put those five puzzle pieces together,
(10:46):
it's turbocharge. It is not youknow, one plus one plus on
equals five. It's when you putthem together, they start to integrate,
they start to work together, andit's twenty five. And that's why all
of us look out window and theygo, why are those guys so much
bigger than me? Or why isthat company doing so much better than me?
Or why are the employees going overthere? It's because they brought these
(11:07):
five pieces together. And that's whereyou rush the competition and you're asking better
questions. And I think one ofthe one of the podcasts I had with
with Jay Abrahams said how can wemake your your top line this year your
bottom line next year? And Ithink all this stuff you're talking about today
and then repeat that and repeat thatand repeat that, and that's how you
get from your your ten million turnoverto your ten billion turnover that you had
(11:30):
for the insurance agents. But andI agree with how you're looking at that.
So when you're looking at strategy andyou go back to what you've talked
about with Porter and the stuff thatyou've learned. How do you make sure
that your strategy isn't so out therethat your employees or your your even even
your clients lose sight of it?Because your your strategy should include how you
(11:54):
keep and retain and sell to betterclients too. So how do you how
do you make sure they understand whereyou're trying to go so that they buy
into where you're going and they staywith you. The fourth part of the
book, setting it and heering topriorities, there's a whole part devoted to
this because of what you're saying rightthere. It is so tempting. After
(12:16):
you you can set the perfect strategy, but then you wake up in the
next day and there's the dumps towhat I call the dumpster fires that you're
chasing after or the shiny objects thatare interesting, and it takes you off
strategy. And that would be oneof the number one I kind of three
things that I think are the threeareas where people fail in strategy, and
one of them is exactly that theycan't stick to something. And Johnny Ive
(12:37):
who was the chief designer and Apple, he said, you don't just wake
up one morning and say, oh, I'm going to be focused. You
have to have a culture of focus, but you also have to have specific
tools in place to maintain that focus. So I'll give you, like a
really simple thing. The companies thatI work with, we take a while
to figure out what are those twoor three or four focus areas that they
(12:58):
need to get everybody working on.And then what we do is we make
it into a loose sight, justa small, little loose site that sits
on everybody's desk, everybody's desk thathas these three things that everybody's supposed to
be focused on, and at thebottom, it says, what have you
said no to today? Because adheringto priorities is also being willing to say
(13:18):
no, which was maybe the singlebiggest lesson I learned from studying sep jobs.
He was relentless about saying no tothings. And that's how you solve
the problem that you describe med.But you have to have you have to
have tactical guardrails in place. Youcan, as Johnny I've said, you
can't just say hey, let's allbe focused today. And I've been having
(13:39):
a lot, I mean I've reallybeen as we've been going through this It's
really helped me align myself and actuallystart using a lot of the stuff you're
talking about with clients and buying thebooks and giving them to them. So
in chapter eighteen, walk us throughan operating plan and kind of some of
the things that I know you've gotbecause you write your books like love Is,
(14:00):
I can go to the end ofit and just go, Okay,
I don't have time to read this. I'm getting ready to go into a
meeting. How do I think aboutan operating plan? So walk us through
some strategy is Okay, we're goingto get to hear the who than what,
Like Porter said, it is,how do we then implement that and
turn that into a strategy that wecan tactically deliver. There's probably, you
(14:24):
know, several dozen good ways todevelop an operating plan. What I did
in the book is I looked atthe people who I admire the most in
terms of their ability to create anoperating plan, and I harmonize it into
like just a simple paint by numbers. Do this and this and this and
this and this. Begins with theunderstanding that an operating plan is not a
budget. A budget is just partof your operating plan. But a budget
(14:46):
is principally kind of a guess ofwhat's going to happen next year in terms
of revenue and sales, But thatdoesn't inform what are you going to do
in Q one, what are yougoing to be focused on? What are
you going to say no to?What is your day going to be like?
That's the difference between a budget andan operating plan. And I layout
a process where you can bring yourbought partners together, how you brainstorm the
(15:09):
ideas to develop your operating plan,how you get it down to three or
four, then how you go outand get outside advice, and how you
use outside advice. You don't sendyour operating plan to somebody, whether it's
your board member or an advisor andsay, hey, what do you think.
It's a very structured way to doit, so that if they're going
to give you forty five minutes,you're going to get forty five hours worth
of value from that forty five minutes. And then at the end of developing
(15:33):
that operating plan, then it ishow do you memorialize it into your KPIs
your key performance indicators? So peoplekeep thinking it's like the loose sight thing.
BD we're just talking about. Soevery day they're thinking about, this
is what we're working on. We'renot working on that. This is what
we're working on. It's part ofyour compensation plan, your quarterly compensation plans.
It reflects what we're working on today. So everything is coming together.
(15:54):
So when people get in the caror log onto zoom to get started for
their day, they know that's importantfor the company. I was a CEO
that I'm working at. He hasa company that's in Africa, and one
of the things I was talking tohim about is you have to begin every
single meeting with how did we doyesterday? In there there's two areas He's
(16:15):
focused on his manufacturing company. Howdid we do yesterday in these two areas?
Why not necessarily because we're going tomake operating decisions from day to day.
But so that people what I toldhim the same as Felix I told
he runs a company called Saying Ku. I said, Felix, you want
people walking through your factories going Felixis like obsessed with this, like you
(16:37):
like you like I mean, it'she's a lot of like crazed. That's
that's the level of focus that youneed to show as the leader, so
that it then pours down into yourorganization and everybody's like, okay, this
is what we working on. Likelike you and I have talked about Herb
Keller with a ten minute term withSouthwest Airlines turned the planes around in ten
minutes. Everybody, everybody, literallyeverybody be the at Southwest Airlines knew that
Herb Keller was he reamed about fiveminute turns. That's that's amazing. And
(17:03):
the way everything works there is isis fabulous. And I was just thinking
through through the some of the stuffwe've we've talked about and the things that
you bring bring into it, andand also our times and how we date
ourselves. Is I could see thison a mousepad back in the day,
you know, instead of a loosesight somebody have a mousepat that would have
But we don't even use mouse petsanymore. So it makes sense you're you're
(17:26):
dating yourself here. But it's justone of the things, you know,
and it always seems so I getthe comment that it's so American. It's
like, well, okay, youknow corporate culture. You know, you
still want to have a corporate cultureand have all that type of stuff.
So walk me through. You startto look at this and you talk about
(17:48):
in chapter twenty one about walking behindthe tractor. So when you now,
now you've done the strategy, You'veyou've laid some stuff out, you've created
a plan, and you've got somepeople bought in, and you've got your
your advisors. So now how doyou make sure it's still working? So
you've got a strategy, how doyou make sure it's still working? Can
I? Can I quickly describe whytitled the chapter walk behind the tractor?
(18:11):
Please? Do? That helps outso much? So my dad manufactured farmer
group wasn't a big business, buthe manufactured farm equipment, so there's things
that were dragging behind the tractor.But farm equipment sold through dealers, kind
of like cars or sold through dealers, so his customers were not the end
users. But when I was withhim on my weekends in how we spent
(18:33):
our weekends in rural Colorado, wewould be walking behind the tractor and he
had a little voice recorder. Hedidn't care what the dealer thought because he
didn't want his He wanted to knowwhat the end user thought, the person
who was actually using his equipment.All right, let's fast forward to today,
and I'll give you a modern dayexample into It. Into It,
which makes Quicken and TurboTax and soforth. They have a model called follow
(18:57):
Them Home, which is their equilto walk behind the tractor. They want
to see how the end users act. They want to watch the end user
actually use their product. I amamazed at how many companies miss this simple
concept of going to the end user, especially by the way software companies,
because oftentimes the IT department of theperson making the software decision is not the
(19:18):
person whose fingertips are on the keyboard, and so not only will you get
a sense of the quality of yourproduct, but that's where you get all
the insights when you say, well, why are you going there on my
software program? Well, because that'smy workaround you. Oh so if we
just had a button there, ohmy god, that would be fantastic.
You're not going to get that fromthe IT department. You're not going to
(19:41):
get that from the purchasing department.You're going to get that from the cashier
at the POS system who's checking customersout. And you're going, oh my
gosh, we just added two extrasteps to this poor person's job. All
we need is a button. Sothat's the concept of walk behind the tractor.
But in the chapter I lay outto examples of companies who have done
it, so that if depending uponyour company, you can say, okay,
(20:03):
well, how do I walk behindthe tag? Oh okay, well
that's how a software company walks behindthe tractor. Or if you have a
self farm equipment, that's how mydad walk behind the factor. That's great.
So how you know, kind ofone of those things you make a
business plan. It's December, youget ready, you make this business plan,
or the next year's twenty percent increase, five hundred percent increase, whatever
(20:23):
else it is, and it getsshoved in the jar. Nobody looks at
it, follows it believes it.When you look at your strategy, how
often should you tweak it if it'snot on the loose sight and that it's
not the goals and the heart andthe ethos of the business but the actual
kind of overall strategy. How oftencould you, without beating it to death,
(20:48):
own your business strategy. I wouldthink about it probably in these three
ways. The five skills that areoutlined in the book. Think of those
like the scaffolding, how we hire, how we run meetings, how we
ask our customers question. So that'sthe scaffolding around your business. And I'm
going to mix metaphors a little bitbecause I think it'll I think it'll be
(21:10):
clear if I do it that way. Actually, the strategy is this is
what this is where we want tobe when we grow up. This is
our customer segments, this is whatwe're going after. The last part is
the implementation piece of it. Andthat's where you're bringing those two things together.
You're saying, this is where wewant to go. We've got all
the pieces in place, We've gotthe right team in place, we want
our processes in place, all allthe things we talked about, and now
(21:33):
it's sort of this day to dayexecution against the plan, principally principally,
by the way, by saying no, I've said that an operating plan,
if it can't fit on a postcard, you got to go back and keep
working on. The underlying document maybe deeper because it because it informed that,
but in the end, it literallyis this postcard where people are looking
saying, Okay, this is whatwe're working on. And I don't care
(21:53):
what company you pick. The companiesthat that that you admire, that you
succeed. Whether they're billion dollar companiesor ten million dollar companies, they wake
up in the morning and they knowwhere they want to be and they're going
in that direction. The lumberyard says, our key customer is the do it
yourself weekend customer, and that's whowe cater to. We don't cater to
(22:15):
contractors because there are a completely differentmarket segment. Okay, well this is
a I'm describing a five million dollarbusiness. But when they wake up in
the morning, they're saying, howdo we help that do it yourself weekend
contractor or or handy person get theirjob done. So it's everything from Apple
Computer to Disney to all the wayto the local lumber yard. So when
(22:36):
you're when you're looking back at thisand you're you're starting to do it,
and it's your strategy is starting towork, and you talk about moneyball,
you talk about some other things.So how do we start to look at
the KPIs and the targets and thethings that how do we figure out if
it's working. So we've now we'vegot some traction. Now we've implemented a
strategy. What are some things soyou could create a hypothetical com or whatever,
(23:00):
But how would I measure that mystrategy is working? The chapter seventeen
K Performance Key Performance Indicators is reallyall about that, and it's about figuring
out how you're going to measure success. And the reason why I feel like
your question is so important is thatthere's a subtlety to it, which is
(23:21):
that you have a strategy, youown it, you believe in it,
you're all excited about it. Yougot the slogans up, you're singing the
song. You want it to havebeen true. You want to have picked
the right strategy, and you wantto be winning, which means that you're
going to have this tendency to movethe goalposts back and forth all the time
based on historical data. So whatyou have to do in your operating plans
(23:41):
you have to say, this ishow we're going to measure success, and
you measure it sometimes daily, oftentimesno less than weekly, and you put
a stake in the ground. Nowwhen you set those KPIs, and generally
it's only two or three KPIs,and most people make the mistake of saying,
if I can measure it, Ineed to pay attention. No,
you need to have like two orthree things that are if you get those
(24:02):
right, you can be wrong andeverything else. If you get those wrong
and you're right and everything else,it won't make any difference. And you
put that stake in the ground bD. And then what happens is if
you find contraindicators, things that arenot lining up the way you want it
to. It doesn't mean your strategyis wrong. It could mean one of
two things, one of three things. One it could mean you pick the
wrong KPI. That's fine, youmake that adjustment. The second is that
(24:25):
your strategy is right, but you'reimplementing it in the wrong way. Okay.
The earlier you learn that the better. And the third is I got
the wrong strategy. That's okay,all right. What's not okay is if
you have the wrong strategy and youdiscover it in year three, if you
discover it in your in month fouror five, and you and you develop
a different strategy, that's totally fine. And every great CEO will talk about
(24:48):
their fly and I've heard over andover and the CEOs that you that you
most admire love to talk about theirflops. Now most of the time you
don't know about it because they discoveredit early and they made that adjustment.
But that's why developing the KPIs anddoing it correctly is so important. And
I do in the book, Ilay out the process of how to develop
KPIs in a way that will reallydrive your business. I think you open
(25:12):
it with you a quote. Youopen all your things with a quote.
But the knowledge is knowing that atomato is a fruit. Wisdom is knowing
not to put it in a fruitsalad, you know by Miles Clington Kington.
But overall that it's just such agreat it's such a great thought.
So and understanding that you screwed upor or didn't get the KPI right is
(25:33):
okay, but get don't put itin the fruit salad, move it back
to move it back to making tomatosauce or whatever you're going to do at
that point in time, because it'sokay. And then the last part of
that. So a lot of ownermanaged businesses, even up to the ten
million, there is a lonely personsitting that has a very cool parking space
and usually a very nice car,and everybody thinks goes on excessive holidays and
(25:57):
all this type of stuff. Theowner. How do they then surround themselves
with a good board to bounce thesestrategies off of, not just sitting on
a KPI, not just sitting backand believing that they're right. How does
somebody become unlonely? Part three iscalled a willingness to seek and take advice.
(26:18):
And that might sound like, youknow, kind of motherhood and apple
pie and so forth. But whatI found. Remember I didn't come up
with these five things and then writea book. I actually investigated great leaders
and started writing down and I foundthese five commonalities. They were all sometimes
(26:38):
quiet and sometimes not so quiet,massive consumers of advice. The most celebrated
one was you know Bill Gates andWarren Buffett, and how Bill Gates would
play bridge with Warren Buffett, andthe kind of advice you would give these
people who we think about it withX ray vision and they've got their red
(26:59):
cape and so forth. They actuallywere were voracious consumers of advice. And
in fact, this week in classat Stanford, I was talking about this
very issue with a company. Shehas a toy company, a small toy
company, and she got into aninteresting situation and she had no advisors around,
and I made the point I said, by having a strategic plan for
(27:22):
seeking and taking advice, you dotwo things. One, you increase the
odds that you make good decisions.And what I told my students is,
I said, what would happen toyour company if instead of you making the
right decision seventy percent of the time, you made it eighty five percent of
the time. Now, there's nosuch thing as one hundred, but you
did that. And the second isthat you made those decisions faster, so
(27:45):
that instead of spending ten hours ona decision, you got it done in
two hours. And of course everybody'ssaying, I think that would be a
massive competitive weapon. Okay, well, what's the easiest way to do it?
Pick up the phone and call someonewho's seen this problem five times before
or has some pattern recognition around thatand can help you through it. The
last piece of it, though,is that when you pick up the phone,
(28:10):
are you going to take that halfan hour and are you going to
talk for twenty two minutes and getfour or five minutes of advice in that
half an hour, or are you'regoing to structure that conversation in a way
that you maximize the amount of valuethat you get out of those conversations.
And I again, it's kind ofa paint by numbers book, right,
BD. So in terms of howyou seek advice, there's a formula on
(28:34):
this. These are the five stepswhen you get on the phone. It's
all very conversational, but the fivesteps when you get on the phone,
so that when you hang up thephone, you're like, wow, I
got like two hours worth of informationfrom that person in fifteen minutes. And
by the way, when you doit that way, they want your phone
call again. Because if I calledyou up BD for advice on something and
(28:55):
you hung up the phone and youwere thinking, eh, you know it
was all right. I mean Ithink I helped a little bit. Yeah,
Or you hang out the pony andsay this, I feel really good,
Like I really helped David with thisproblem and I felt good about that.
You want another phone call for mebecause you enjoy giving advice, you
enjoy helping people, so that there'sthis flywheel effect as well. That's amazing
because it's really hard, it's reallyhard to track down those people. And
(29:18):
then if they're good at their jobor what they ever, their time is
very important. So it's you've gotto be respectful and they want to talk
to you. You've got a decisionto make, you want to make the
best decision. And it also goesthrough how you structure your meetings. So
a quick example is when we runour meetings, when it gets time to
decision time, we always ask forpeople's recommendation and reverse order of seniority because
(29:41):
we don't want people to guess whatthe boss is because I want to pull
out the best thinking of my team. So that's such a simple thing to
do. Everybody can do it tomorrowmorning. So the book kind of lays
out these very simple things that youcan do to greatly enhance the value of
the advice that you're getting so youmake better decision quicker. So we talk
(30:03):
about this and we sit back,and everybody's competitive, even if they don't
want to be. If you're runninga business, you are a competitive person,
no matter whether you think or not. So we've this series has been
called crushing the competition. So ifyou were to look at strategy and say,
here's the one thing that if youdid nothing else after this podcast,
but I want you to do thistoday, what would be that one thing
(30:26):
around strategy? It would be tochange your mindset from I am the person
who does things to I'm a teacher. What I mean by that is you
have to build these practices, thesehabits, these norms across your whole organization.
And when I've seen leaders say myjob today is I'm a teacher.
(30:48):
I want to teach people how towalk behind a tractor. I want to
teach people how to do exit interviews. I want to teach people how to
make good decisions and seek to takeadvice, and that starts to spread through
the organization. That's the fundamental difference. You are a teacher, you are
not a manager. That's amazing.Dave Dodson of the Manager's Handbook. It's
been amazing to have you on thisCrushing the competition many series that we've had.
(31:11):
You've been such so helpful and sogenerous with your time and with your
information. Thank you so much forcoming on the Gross Selling Retire podcast.
Great to be here, Bed,Thanks for joining us on Grow, Sell
and Retire. For more information toolsor to book one of our team members
to work with your team business,or to speak at your event or conference,
(31:33):
visit rockfind dot co dot uk.If you like the podcast you'll love
one of BD's three books, theassisted purchase True Gravity and the book.
The podcast is based on Grow,Sell, and Retire. If you want
to work for the rest of yourlife, that is your business. If
you don't, that is ours.
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