Does Your Business Go Beyond Making Money?

Does Your Business Go Beyond Making Money?

Sean: You mentioned that it’s insidious. That’s a very strong word. It means that it’s super hard to detect. And you mentioned also an example of that it suddenly drops off and you’ve got no idea why that happened. What are some of these sure signs that complacency is already there in the sense that it’s already eating off your business?

Len: Yeah. So one of the signs that you probably have complacency that you need to find, is that you’ve had success, right? It’s kind of when you’ve had success and you start feeling that level of comfort and you start feeling like you’ve got to figure it out, that’s your first signal that you might have some complacency. But there’s lots of other signals, right? When you start seeing more competitors coming towards your category, toward your industry, towards your geography, whatever it is that you compete in, when you see, you know, it’s almost like vultures. Right?

Len: When we’re complacent, we’re like a starving person walking through the desert and there are people and certain things start circling overhead. You’re like, Why are they circling overhead? Well, they’re getting signals from us that we’re becoming vulnerable. When you’re not complacent, you’ll find a lot of people hanging around to pick up your scraps, right? When you start getting complacent, you start feeling like, “Man, this competitor wasn’t here yesterday. Why are they starting to pay more attention to my category, my industry?” That’s a good sign, right?

Len: On another level with your employees, right? When you start seeing that, you’re having increased turnover or lower satisfaction scores, or there seems to be strife within your organization, maybe your team is only, you know, four or five people, but you’re starting to see that they’re not getting along or, you know, they’re not working as a well-oiled machine like they used to. Right? That’s a sign, you know, coupled with success, right?

Len: When you’ve had success and then things start not going well, well, that’s kind of an oxymoron, right? When you’re successful, things should be going well. Yeah. But that’s a sign that you’re taking your eye off the ball. There are lots of them. You know, when you start becoming less transparent and less holding yourself accountable. I talk about this thing in the book. I call it the ATV model. That accountability plus transparency equals vigilance. If you are accountable and you are publicly and you hold yourself accountable, and then you’re transparent about how you go about things. It will naturally lead to vigilance. It has to.

Len: But what happens is when we start gaining success, we start gaining power within our category or industry or whatever it is we compete within. We start holding things maybe closer to our best. We become less transparent. We become less accountable. Right. Those are all signs that we’re becoming complacent. Right. If you ever have a situation in your business where you have to; if someone asks why you did something, the answer – if you’re being truthful is because we can or because we’ve always done it that way. Those are two good signs that you’re becoming complacent. Right? Your why has to be deeper than that.

Len: The ‘why’ I talk about, articulating your why. You always have to be able to articulate your ‘why’ in terms of an overall purpose for your business, for your organization, and for your life. If that ‘why’ is hard to articulate or it boils down to because I have power, nobody can stop me. That doesn’t last forever.

Sean: That sounds like hubris, like ego, right?

Len: Yeah. But it sounds really bad when you say it, but the reality is it happens all the time. So up until a year ago, I don’t know if it was like this in the Philippines, but in the United States, we had to pay an inordinate amount of money if I wanted to get out of my cellular contract with my wireless phone provider. Why? Because there was a lot of cost involved there. No, because they could. Because they held a contract over me and because they all did it, right?

Len: So as soon as one of the breaks ranks, though, and says we won’t charge you that or we’ll pay off your fee with the other company that all crumbles down, right? “Because I can” doesn’t last forever. And when you do, “because I can” with vendors, with employees, we’re seeing right now a lot of things about the Great Resignation here in the United States, all the people that are leaving the workforce. Well, that didn’t happen, that’s not a COVID thing. This is not a pandemic thing. This is something that got brought to the head over years and years of people treating their employees like crap, right? Because they could, well, now they can’t anymore. And let’s see what happens.

Sean: Yeah, I’ve heard about that Great Resignation. That’s this mind boggling thing. I can’t see that we don’t have that here because during the pandemic, there were also a considerable amount of people, although it was never in the news, that I know resigned and shifted to work from home type of company.

Sean: If you compare it there, I think it’s a lot worse how cool COVID situation was handled and it’s being handled and the death toll and all of the people getting sick. It’s very – it’s pretty bad here. So you can’t really blame people who leave their jobs because they’ve got to commute to work. And commuting here means you’ve got to fit in a very tight packed sardines, right? That’s how commuting is here.

Sean: I want to roll back a little bit and ask about the team earlier that give us an example, where people who were stocking shelves are given parameters and are given their key results areas where you say, “OK, what matters is how fast you stack shelves. Nothing else matters.” So they would not give that feedback to their higher-ups. You don’t get that feedback. Suddenly, things crumble down. How can you fix that? When a team is getting complacent because upper management has given them key results areas that are too rigid, maybe, and it’s not smart. It’s just more of one plus one equals that. It’s not smart. It’s not asking people to use their width. How do you fix that?

Len: Yeah. So this is something that I learned from law enforcement that I see everyday. We have, as a deputy when I go out and do my job. I have a lot of discretion in the way I do my job, right? There are certain things where I don’t have discretion. You know, somebody kill somebody. They’re getting arrested, they’re going to jail. Right? But you know, someone can commit, you know what we would call a misdemeanor, a lower-level crime here. I have discretion to bet based on the crime, based on the situation, based on the circumstances. There are different things I can do, because I have discretion in the way I do my job. It forces me to think, right? Because I have to figure things out. I have to gather information. I have to process information and think about what am I going to do with this and have to apply it back to my greater ‘why’?

Len: What am I trying to accomplish here? Right. And so having that discretion builds my engagement. Because when I don’t have discretion, when I’m told this is how you do things and this is the only way you can do things like you said, you don’t think, right, you check out, you check out, you go on autopilot, right? And when you go on autopilot, you’re not paying attention to outside stimuli, you’re not seeing things. So when people ask me the question that you’ve asked me, which is a great question, what can I do? The first thing that you have to look to do is give your employees autonomy, give them discretion to the greatest extent that you can, right? It involves a certain level of trust that maybe you haven’t had before, that you have to develop in your people. And you have to develop in yourself.

Len: Sometimes, you know, as entrepreneurs – and I’m one of them. You want to hold everything close to the vest, right? You know, nobody can do it as good as I have, right? Nobody knows what I know. So, you know, you get used to using people as kind of like arms of yours, “like you do this, you do this. But I’m going to hold it all up here.” When you do that, it makes you feel better, but it doesn’t make anybody else feel better.

Len: And so the first thing that you have to do if you want to rectify that situation is you have to look for what is the most amount of autonomy? What is the most amount of discretion that I can build into people’s jobs, and make them feel comfortable that they have that and they’re not going to get slapped down when they make a wrong decision? And what’s hard for us as entrepreneurs to accept is what comes with that is going to be mistakes. People are not going to always make the right decision. And we have to understand that, and we have to build that.

Len: One of the greatest stories as it comes to this for me is, you know, Tony Hsieh and Zappos. Yeah, right. And you may have heard the story. You probably heard this story, but you know, there was this time where Tony was out with some people. They were out late at night in San Francisco or something, and they decided they wanted a pizza, but nobody would come deliver pizza to their hotel. And he said, “Hey, watch this call up the customer service number on Zappos right now. Zappos for anybody who doesn’t know, sells shoes. So sneaker shoes and stuff online, right? And has nothing to do with pizza, right?

Sean: Yeah.

Len: Well, the customer service agent answered. Didn’t know it had anything to do with Tony Hseih, the guy who found that he was the CEO of the company, right? And they said, “Hey, we’re in San Francisco, we’re at this hotel. We’re trying to find some pizza. Can you help us?” Now at most companies what will the customer service agent at a non pizza company do with that right? Not much, probably. But because of the way they’re trained and because of the way that they are told that what is of paramount importance to us is that whoever calls us is satisfied and made happy, right?

Len: And so that person spent the time to find out where they were. Did the research found them someone who would deliver pizza and get them a pizza? Not related to shoes or anything like that? And then the phone call is over. No cellmate spent a bunch of time on the phone for no revenue to Zappos. But that was a success in Zappos’ mind, right? That was a succes in Tony Hseih’s mind. That is giving someone autonomy. Right? Because the normal customer service agent is watching the clock. They’re like, “Hey, I have one minute, 30 seconds to get this person off the phone or somebody else, or make a sale.” Right?

Len: And that’s not how that customer service agent was taught. They were taught that they have discretion to fit the greater purpose. The why? What’s the why? Making the customer or the potential customer happy. And if everything fit within that why, everything else made sense. So if you can let control in your organization, go to the point where you would allow someone to do that. Then you’re giving them that autonomy, that discretion. That makes them more engaged in their job, and makes them more aware. The first thing to fight complacency is awareness.

Sean: I want to ask a follow up question there. I want to get into the specifics of things where you say, give them autonomy and allow for their discretion to be practiced. How does that look like? I mean, in the academy, you mentioned that you are allowed to use your own discretion. Does that look like the academy giving you some videos for you to watch? “Here are some of the incident cases that don’t happen a lot, but could happen from time to time. This is what these police officers did that we think works and is a good thing, and you might get some ideas from there.”

Sean: I mean, how does it look like – we can’t just tell our people go ahead and do what you think is best? I guess that is relative to what is best for this person, might not be what’s best for this person. There are so many desires in our lives that are different. Some personalities could desire social justice more. Some people would desire family relationships more. Some people would desire beauty or eating food. You know, I’m an R&D coach. I studied 16 basic desires, which it’s different for person and you can’t just tell your people, especially on the street level or the grassroots level, that, “hey, you know, what do what you think is best?” What else can we give them that would make us the business owner, just a bit more comfortable that if they make a mistake, it’s not a fatal mistake?

Len: Great question. Great question Sean. That idea is, what this builds into is being able to articulate your ‘why.’ We talked about this a little bit already, but what this gets into is understanding what your true purpose is. So there’s if we’re going to look at what we learn in police work, right? First of all, we do a lot of classroom study, like understanding the law, understanding what I can do and what I can’t do, what you can do, what you can’t do, and where there is discretion. Right.

Len: So, you know, if someone walks into a store and steals something from a store, that person, if caught, can go to jail or they can walk away with a ticket, or they can walk away with a warning. Right. All depending on a lot of different factors. Right. And I have that discretion to be able to do that. But I also have to understand what the law is. So within your own organization, you have to understand what is the law right? What are our parameters that we work within? Right? It’s not willy nilly. It’s not like everybody gets to decide what we do. There are laws, right? We have to document that. We have to make it clear what we can do, what we can’t do and where the middle ground is right, where we can play.

Len: But the second piece of that is really understanding your purpose. And this is the hardest thing, I think, for entrepreneurs, because your purpose is not making money, that is not what differentiates you. What is your purpose in this world? Why does your business exist beyond making money? And then you have to be able to focus each one of your employees to be able to make decisions within that ‘why’, within that purpose. Right? So my purpose when I go out into police work is to maintain the peace, and provide safety and protection, right, but also to provide the best outcome for all involved.

Len: Sometimes that outcome has nothing to do with somebody going to jail. Right. That is not what they need. That is not the best for anybody, but I have to understand what that means. Right, and that’s why we spend so much time going to academy and field training and all the things that we do. Because we have to understand what we can do. What is the law, right? And then where do we have that discretion? But then how do we use that discretion to further our why, to further our purpose?

Len: And it’s not our personal purpose, it’s our organizational purpose that kind of gets you away from like “this person believes that that person believes this.” You know, everybody, if they’re going to work with any organization, they have to be aligned with that ‘corporate why’. Why do we exist? What is success for us beyond money, right? What are we trying to do for this world? What would happen if we weren’t here? And then how do we make sure that everything we do falls within that?

Len: So again, there still could be mistakes. There’s always going to be mistakes. Everybody makes mistakes. But if we’re making mistakes with the right purpose in mind, those mistakes are not going to be too bad. Right? You know, maybe you refund somebody that shouldn’t have got a refund. OK, that maybe cost some money, but the reason? What was the reason, why? Why did you do it, right? If the why is right, you’re not going to be too far off base? So to me, those are the two most important things as it relates to a business, especially an entrepreneurial business, because they’re hard things to do. You have to document what the law is. What are your procedures and your policies? And what do you do? And then you have to make sure that everybody understands why we’re here. What are we here to do? What is success for us?

Sean: Yeah, yeah. So basically, to be able to delegate and trust people, to give them a certain level of discretion and autonomy, you’re telling us that we have to take the time to not only document the rules, regulations, the parameters. Maybe even some sales pitches or client fixings that we do on my zoom or live and communicate that repeatedly and put it all in the picture of our purpose.

Len: Yeah. And I love the fact that you just said that time because of a purpose statement, right? So many organizations spend so much time on their mission and their vision that nobody ever understands what it is, and nobody even understands what the difference is between the two of them. The most important thing that a lot of organizations don’t do is a purpose statement, and a purpose statement is the one that actually will guide people the right way.

Sean: Yeah, I’m doing this in 11 years now, and I just crafted ours this year, earlier this year.

Len: Good on you.

Sean: It’s never too late, you know it’s never too late to have a purpose statement.

Len: Absolutely.

Sean: Yeah.