Stephen Lynch - How to Create a Business That Can Outlive the Owner (K2817)

Time is precious and so are our pets, so time with our pets is extra precious. That's why we started Dutch. Dutch provides 24/7 access to licensed vets with unlimited virtual visits and follow-ups for up to 5 pets. You can message a vet at any time and schedule a video visit the same day. Our vets can even prescribe medication for many ailments, and shipping is always free. With Dutch, you'll get more time with your pets and year-round peace of mind when it comes to their vet care. Welcome to the Exit Coach Radio show, the show for baby boomer business owners who are looking for cutting edge information as they plan their 3 to 10 year business succession and exit. Every week we interview top professional advisors for their best tips, strategies, and precautions so you can be well planned. And don't miss our one minute exit coach tip of the day on Exitcoachradio.com. And now here's your host, the Exit coach Bill Black, thank you so much for joining us. Pleasure to have you with us. Uh, we have so many great guests on this show, advisors, authors, and thought leaders. We archive and record all of their interviews on the audio library at Exitoachradio.com, over 40 different file folders, 750 interviews, topics like how to start your business, grow your business, how to retain key people, run a family business, and, you know, things. Like life after exit. What are you going to do when you, when you do sell and move on to a different life? Check it out at Exit Coach Radio, the audio library. My next guest has been with us before. I always love it when guests come back. We can, we can stretch out a little bit. Stephen Lynch is with Results.com, and he's the head of strategy and consulting there. And Results.com is a great company, provides management dashboard software to help you engage your employees and achieve. Company's goals faster. Stephen is the author of the award winning book Business Execution for Results, A Practical Guide for Leaders of Small to mid-sized firms, and the book was judged best management book in the USA's 2014 Small Business Book Awards. And so we're going to talk about how to create a compelling future vision for your company, one that can outlive the owner's involvement. Stephen, welcome to the show. Thanks for coming back. Bill, it's a privilege. Thank you for having me. Our last interview was so interesting and we talked a lot about this creating these uh these dashboards to help engage employees. Tell our listeners just briefly, because they can always go hear your prior interview, tell them a little bit about Results.com, how it got started, and, and what your vision for it was. Uh, I guess Results.com, we originally were a management consulting firm and we developed a software dashboard to help us track the results of the work we were doing. With our clients and the dashboard took on a life of its own and it became a product in its own right. And, and now, you know, we, uh, make and provide software and we use our consulting expertise to support our software clients. And, and what the software does is help businesses track their key performance indicators, track their projects, track their tasks, run effective meetings and engage their people. And these days, people need, um, quick ways to view where they're on track or off track, and they're trying to track so many different things. So what are the, the main ingredients that go into creating a compelling company vision? Yeah, uh, well, I, I, I have the, I, I've got the real privilege of being able to actually study thousands of our clients and, you know, looking at them, working on their goals, and I'm lucky that I get to observe what works and what doesn't work in the real world over a large number of business cases. And what I would like to do with you and your audience today is just present a selection of best practices based on some of my observations of what clients are doing, those that are are really successful at creating a compelling vision for the future for their companies. And it comes down to three things really. There's the, the what, the why, and the who. Firstly, the what you need to get really clear on what is your long-term goal for your business. Secondly, the why, you need to give your, your people a compelling reason why, a good reason to work for your company beyond simply earning money. And thirdly, the who you get, you need to get very clear about who you need to be in terms of the rules for behavior for everyone who's going to work with you. And I'm going to, uh, cover each of those three ingredients briefly today, what, why, and who, and share some of the best practices that I've observed from our most successful client firms. I'll start with what and and I I guess what is, you know, what is it that you want your organization to achieve? What is your long term goal for your organization and And to me, when you're setting long-term business goals, that's a lot like being a mountain climber. You need to pick a, a, a worthy mountain that you want to climb. And I guess the thing that separates great mountain climbers from the merely average mountain climbers, and it's the same with companies, the thing that separates great companies from the merely average company, it's the mountain you choose to climb. And I, I, I always like that term that that the author Jim Collins came up with. He, he talked about this concept of big, hairy, audacious goals or bee hags for short. And probably the best known example of a bee hag is President John F. Kennedy's Man on the Moon goal. You remember in 1961. Uh, you know, things didn't look so good for the USA at the time. The Russians were beating the USA in the space race, and, and in 1961, JFK set down this big, hairy, audacious goal for the nation. He said, I believe this nation should commit itself to achieving the goal before the decade is out of landing a man on the moon and returning him safely to the earth. And it was a huge goal, but even more important, no one had any idea of all of the things they were going to need to do to reach it. And as we know JFK, he did not live to see this goal realized, but that's the power of setting this long-term compelling goal, a big hairy audacious goal. It can outlive your involvement in the organization. And what we do know from working with thousands of small and medium sized businesses is that the effective companies we see, they engage all of their people with a clear and compelling long-term vision of what their business is going to look like in the future. They do set a big hairy audacious goal. Now, I would like to point out that it doesn't mean that your company needs to be as big as possible. It's about creating a great company, however, you define greatness. That needs to be exciting to you, the owner, but also to your people as well. And it probably should be a little bit scary too. It's not just this linear growth path, a. is something you should post up on the wall and stare at every day and think, how the heck are we gonna do that? And that's the thing, you don't know how yet, but it's a goal that you feel compelled to achieve and you be yourself to figure out the answers and achieve it along the way. And it needs to not just inspire you, but the, the business leader or the business owner, it needs to inspire all of your people. And the more specific, meaningful and compelling you can make that goal, the greater the aligning and engaging effect that has. And, and, uh, My first question, I guess for your audience is, so what is your big hairy audacious goal? What's your compelling long term goal for your business? And in many companies, they create these great walls full of collages and pictures to describe their ideal future state. That's a great exercise. But what I like to do with all of our client companies is force them to distill what it is they want to become. Uh, into a short statement. And I use my Twitter rule. That is, if you can't communicate what it is that you want to do within the space of a 140 character Twitter post, then it's too long. So that would be my first step in creating a compelling future vision for your organization. Come up with your long term goal, your big hairy audacious goal and see if she can get it down to 140 characters or less. And uh and then at that point, um, that's something that everybody in the organization should be able to recite is that because there's a lot of times you walk in and you see the mission vision statements up in the lobby and, and if you walked around the company, not very many people could recite those. So, so is that the other key to that is making sure that everybody in the company understands that that is the the the vision of the company. It should be a short, concise statement that everyone knows and can recite, and it should be something that you could track on a monthly basis and each and every month, each and every quarter, say how we progressing towards our beehag? What have we achieved this quarter that's progressing us towards our bee hag. So it's a, it's a, it's a goal that you can measure, uh, with a deadline and you can track your progress every step of the way. OK, and let's go back to the vision of being on the moon, OK, because at that point it was such a huge audacious goal. And like you said, I'm sure there were a lot of people going, how the heck are we going to accomplish this? And was there, and there was the end of the decade goal, right? So there were there were specifics in all of those, but does that work today, Stephen? You've got such a a quick. Knee jerk economy and, and with technology, things are changing that fast. How far out is too far out these days, do you think? Yeah, it's a good question. I mean, when you look at Jim Collins in his book Built to Last and Good to Great, he talked about bee hags as being 10 years into the future, 25 years into the future. Some companies are comfortable with that. When I look at our clients, most of them are are more comfortable with sort of this 5 to 10 year range, uh, in terms of setting a, a, a, a long term compelling goal. It needs to be, uh, beyond. your current capabilities. So it, it shouldn't just be like, yes, if we just keep growing at 10% per annum, we'll be at this point by the year 2020. Now, it should, you should look at it and not necessarily know all the answers. And I find most clients that that be sort of sit around that sort of 5 to 10 year mark and, and the most common would be, here's where we want to be by the year 2020. OK, OK, that's, that's great. I love that um ability to frame that for our listeners so they can think, you know, we need to think in a realistic time frame, but not too soon, and this is not, yeah, just your uh meet current projections. This is, this is exceed our wildest achieve a vision that we're all behind and we may not be sure how we're going to get there, but we're going to work every day towards that goal. So one of the questions I, I, I'd ask clients, it's like, imagine it's 5 years into the future. Imagine it's the year of 2020. What great achievement if your organization was able to achieve it would make you think that, yeah, I spent those 5 years of my life wisely. Mhm, OK, OK, I like that. I like that. So let's talk about the why. Yeah, that's one of the other, uh, key components of a company vision getting really clear on why you do what you do, a reason for doing this work beyond simply earning money and, and hey, we all want to make a fair income for what we do. Uh, and if we don't think we're paid fairly, we, we get demotivated, but money satisfies you, but it won't motivate you. It's important, but it's not enough. And people want to work for something beyond the numbers, and that's what we see, uh, I guess our most successful client firms do. They give their their reason they give their people a compelling reason why. Um, and, and I guess like a classic story to illustrate that is the, is the story of the two bricklayers toiling away on a job and a passerby asks each one, you know, what are you doing? And the first bricklayer says, I'm laying bricks. And, and, but the second bricklayer's eyes lit up and said, I'm helping to build a great cathedral. And that's what you want. You, you want people who, who've got a purpose that goes beyond simply what they're doing right now, that goes simply beyond, uh, earning a paycheck. You, you want people who put their hearts and minds into the job because You know, the sole purpose of a business isn't making money or maximizing shareholder value. I mean, that might be true for economists, but real people don't get excited about those things. If you want your people to get excited about their work and do more than the bare minimum, you need to give them something to work for beyond the numbers. And, and studies have shown that when you've got a combination of this long-term challenging goal, a bee hag, plus a clearly articulated core purpose, a clear and compelling reason why that does lead to higher growth and returns. So, to identify your core purpose, you gotta, you gotta dig deep and do a bit of soul searching as an organization. It's not about making money. It's about figuring out what's the difference you want to make in the world. What's the difference you want to make in the lives of the people that you touch. And it's not how you currently do things either, because your products and services. will change in years to come. How you do it may change, but why you do it should be still valid in, in 10 years' time. And that why is your core purpose. Once again, I forced companies to see if you can articulate your reason why in a Twitter post of 140 characters or less. So the how can drift, but the why should remain consistent or constant, or else maybe you haven't given enough thought to the why. It should be very, very deep is what you're saying. I think I hear you saying. Yeah, if I look at the, I look at the last 20 years, how we do what we do is change dramatically, but our why remains constant. We're still helping small, medium sized businesses to be more successful. Excellent excellent OK and lastly you said there was the who? Yeah, so, uh, we've got the what, your Bhag, your compelling long-term goal. We've got the why, your core purpose. Finally, the, the third component of your vision is your who, your core values. In simple terms, it's, it's the behaviors you expect from all of your people, regardless of what role they perform. And core values are clear statements of how you expect every person in your company to act. But I guess here's the catch. Simply writing down some rules for behavior and posting them up on the wall doesn't work. What we've found is that core values for them to be really powerful, they need to be unique to your company and your culture. And many companies they use these vague generic, aspirational words and statements, but, but things like honesty, integrity, teamwork, customer service, those sorts of things, they don't create a culture. What you need is a real specific core values, specific meaningful descriptions of the behaviors that make your company unique. And I'd suggest that if the core values look like every else's, that you will struggle to create a powerful culture that will power you toward the achievement of, of, of, of your bee hag. And the most successful companies I see are those whose core values are, are really unique, and they're really quirky too. In fact, the quirkier their core values are, it seems, the stronger the cultures are that they have. And I've always, this is the example that I, I really love from a, from a company. They're a 3rd generation painting firm. They've been in business for more than 100 years. They're the market leaders in the city. Uh, so they do painting and interior decorating, and they've got one of their core values is this 3 coats of paint means 3 coats of paint. And I thought, I love it. I mean, imagine you're a 15 year old and you've just left school and joining this painting firm as your first job. Yeah, when core values are expressed in words like that, you know exactly what's expected of you. It's not some ambiguous term like integrity. It's 3 coats of paint means 3 coats of paint. And it's it's a clear statement that tells everyone, here's how we do things around here and your core values need to look something like that. That's great. That's really great. That really demonstrates to everyone, like you say, that we mean, we do what we say and we mean what we say. So now, um, how do you uh But how do you engage employees to want to give you more than the bare minimum is you you've you've talked about these things and how you establish these main ingredients, but how do you engage the employees? Yeah, um, first of all, it's keeping these three things visible front and center all the time. So as leaders, we need to, you know, constantly remind people of, of where we're, that's where we're going. So we've got to be, but that's, that's your number one job as a leader is, is to keep that vision of a better future in front of your employees at all times. But also as a leader, you need to say, And here's what we need to do next. So here's where we're going, but here's what we need to do right now and to clearly communicate and provide clarity for people around the steps they need to take right now that are going to lead them towards that better future. I guess another great thing that I see, uh, I guess our most successful companies do is that they really bring their core values to life. They really bring their culture to life. And when they've got their core values nailed, what we see them do and what we encourage them to do is each and every week as part of their weekly meetings, is, is that they make it compulsory that everyone in the company needs to share a story of where someone in the company demonstrated one of the core values in the previous week. It only takes like 15 seconds. Person, but they make it a compulsory item. So for example, I might say, hey, I'd like to nominate Bill for demonstrating our core value of passion for learning because of the great educational content he shared with us last week. And they make it compulsory to to share a story each and every week, and that indoctrinates those behaviors and over time it becomes part of your culture and that's how you create a culture that can outlive the owner's involvement, but also that it really engages your people and what it is that you're trying to create here. Well, and when that when that's an expectation that somebody may be called on to do that, then everybody's watching to see what everyone's doing in a positive way. I like that a lot. That's fantastic. That's a great, great. So now, uh, you know, one of the things we talked about at the at the onset was how do you create uh an enduring company culture that will outlive the owner's involvement. So many owners now are thinking, yeah, while I'm here, I'm watching over all of this stuff and I can see it and take care of it, but I'm concerned about what happens when management changes, if these, if these cultural rules, these tribal rules don't endure. How do you, how do you how do you create that? Yeah, um, the, the, the compulsory storytelling is one big aspect, but it's getting those, uh, those rules, uh, really locked down. Your core values that they need to be musts, not nice to haves, and, and so what do I mean by that? Um, I've got this checklist of 4 questions that I used to, to, to, to check whether the, the values you come up with, the behavior with are really core to your organization. And, and the first question is, would you confront someone if they weren't demonstrating this behavior? Uh, so, you know, if, if not, then it's not a core value. If you wouldn't take them out in the hallway and say, hey, you know, I don't think that's appropriate, then it's not a core value. 2, would you spend money or leave money on the table to uphold and demonstrate this behavior? 3, would you be prepared to have everyone graded on how well they demonstrate these behaviors as part of a performance appraisal? And 4, would you fire someone for violating this core value, even if they were an excellent performer otherwise? And for core values to be core, they must pass all 4 tests. If not, they, they're just nice to have and they should be removed. We want to whittle it down to the 5 or maybe 6 things that are absolutely core, unique and quirky to our culture. Here's how we do things. Wow, that's fantastic. So I like the criteria. So would you, would you confront someone for violating it? Would you spend money to uphold it? Would you grade someone if on whether they were, how well they were doing it? And, and I think most importantly, would you fire someone even if they were a great performer in the company otherwise for violating it to, to assess if they're really your core values or not. And again, you talked about. Of so much it was just a great, great time with you today, but we talked about again the importance of brevity and having a methodology for putting all of this stuff together. And you know, one of the key things that our our listeners would say is I don't know if I have time to do that. I think I should talk to Stephen about this because he's an expert in this. He, you speak at groups as well, a business owner groups like Action Coach Vistige and others. How do our listeners get in touch with you and learn more about this? I guess if you wanted to get in touch with me, the easiest thing is to go to our website, results.com, and our name is our URL so it's easy to remember. Uh, if you want to learn more about the methodology that we use, uh, you can read more about it in my book, Business execution for results. You know, and it's fantastic, and you also say that if, if you, if you tell them that you heard about Results.com via the ex-coach Radio, Results.com will throw in a free consultation session on how to improve employee accountability in your organization. Um, but you know, go to results.com. I love the website. I don't know how you got that URL, but that's fantastic. Uh, a bit of. Go to results.com, uh, learn about this. I mean, all of the things that we're talking about could have a dramatic impact on the value and culture of your business which are, uh, which are intertwined, of course. Steven, you, you present it so clearly and and so uh. Uh so valuably to our listeners. Thank you so much for coming on and sharing this information, and you are welcome back anytime. I'd love to have you back on to talk about other topics that you can bring to the table, but I implore you listeners, take advantage of these offers. Go to results.com, get in touch with Stephen Lynch, find out more, and improve your company. Stephen, thanks again for joining us today. Thank you once again, Bill. I admire what it is that you do for your audience. Thank you. Thank you. We're gonna take a short break and we'll be right back after that, so please stay with us. Hi everybody, this is Spike Reel with the Exit coach. 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Thank you for listening to Exit Coach Radio. Time is precious and so are our pets, so time with our pets is extra precious. That's why we started Dutch. Dutch provides 24/7 access to licensed vets with unlimited virtual visits and follow-ups for up to 5 pets. You can message a vet at any time and schedule a video visit the same day. Our vets can even prescribe medication for many ailments, and shipping is always free. With Dutch, you'll get more time with your pets and year-round peace of mind when it comes to their vet care.