Lisa: Good Afternoon, everyone. Thank you for joining us for today’s “Business as Unusual” webinar session. We’ll give everyone just a few more moments to join before we go ahead and get started with today’s presentation lots of familiar faces on today welcome Jay, Jennifer, Nick, and Steve; hopefully, some of you out there I know there were a few of our participants. I’m looking for who were the winners of our free lunches today and our 20 vouchers from Grubhub. I’ll be reaching out to make sure everyone is supporting their local restaurants.
Kevin: And my daughter, who just got a job with Grubhub.
Lisa: Hey, there we go.
Kathy: Win-win, we love that.
Kevin: I can hear her selling upstairs right now.
Lisa: That’s a great program for us, especially since our webinar is actually coast-to-coast and international. We’ve had visitors from England, South Africa, and Australia joins us. Although we haven’t tried Grubhub there yet for them, It’s still great that we can support our other small businesses just like Red Caffeine, just like NCC Automated Systems, and Glide-Line, who will be talking with today. Well, with that, let’s go ahead and get started. So, again welcome to today’s webinar, “Business as Unusual,” where we are speaking with badass industry leaders who are helping us all survive and thrive in today’s economic climate. My name is Lisa Behning, and I’m one of Red Caffeine’s account managers, but today I’ll be the moderator for our session. We are so excited to have Kathy Steele, Owner, and Principal of Red Caffeine, as well as Kevin Mauger, President of NCC Automated Systems and Glide-Line, joining us today for our session. We are going to dig into different business systems that are going to allow you to truly transform your company for 2021. Kevin and his team have used a variety of systems that we’re going to hit on today to help transform their company for six times growth which is incredible to think about, especially as Kevin tells us his story about how he came into NCC automated systems and really his how and his purpose for why his team has done so incredibly well today’s session is interactive. So, I encourage you to use the chat function and use the QA option to get those questions going as Kevin and Kathy are having their conversation. We’ll be inserting your questions in as well to make sure Kevin is answering them live during today’s session; as I mentioned at the start, we do have five winners today for our 20 Grubhub gift cards. So, please check your email. I sent those out yesterday, and I’ll be reaching out to those of you again, so support your local businesses support your restaurants. Let’s make sure we all finish 2020 strong together. So, with that, I’d like to go ahead and introduce Kathy Steele, Principal and Owner of Red Caffeine, and as I said before, Kevin Marger, President of NCC Automated Systems and Glide-Line, so welcome Kathy, and welcome Kevin.
Kathy: Thanks so much, Lisa, and, just such a pleasure to have Kevin join us today just to give you a little bit of insight as to who Red Caffeine is; our business mission is to help build badass brands that people want to work for and with, and I could not be accompanied by somebody else that is not doing that very thing he is really building up a brand that customers want to work with, and employees want to work for, and I’m really thrilled to be able to tell this story today so Kevin you want to just give us a little overview about an NCC and Glide-line.
Kevin: Sure, yeah, NCC is thanks for having me; by the way, I appreciate it. It’s always fun to tell our story; NCC is a 36-year-old company with about 80 employees outside of Philadelphia. We have two brands and three markets as of today. NCC and Glide-line are simpler; it makes the most flexible multi-stream conveyor in the past and on the planet, and They are designed for the assembly automation space, and NCC serves two markets for food packaging. We build conveyor systems and do packaging line integration primarily in the food business for part of the business and in the second part of the business for NCC. We are literally the world leader in Ophthalmic Automation, so this is the process of making eyeglass lenses. We work with a company called status low, who’s the leader in the machinery that makes the lenses through the process, and we integrate their systems and build conveyors for them all over the world.
Kathy: Fantastic, thanks, so I think we’re going to queue up a video Lisa right to kind of get us kicked off.
Lisa: Go ahead and get that.
Video: One way or the other and a lot of different people in this room and your kids and I take that responsibility pretty seriously, and I realize my job is not to be an all-star. My job is to help you and help you succeed, and because that’s not just I believe the power of the team I believe in [Music] my money where my long-term is I believe my state hurts and I believe in the purpose I believe in causing our own change believe in the blue dot. I think we can get there, I believe [Music] I just my emotions [Music] It’s just so awesome it just showed me how much you really cared listening to everything he had to say was like tying together a great novel, each chapter leading to the next great part of the story. I’m bound up, thank you, I know in my heart this is a good thing. I think people will figure it out as it goes along.
Kathy: Okay, I’ve said this a few times, but I cannot stop getting teared up when I watch this video. It’s so incredible, but that’s kind of like the middle of the chapters in your story, and I want to kind of step back and have you tell us a little bit about how you got from there to here and then what’s happened, since so?
Kevin: Yeah, well, definitely me too. One of the greatest things about that video is that a player I coached when he was like ten years old shot that video and produced it; he wouldn’t take a dime for me. I coached him in football, and we became lifelong friends; he had a great corporate job, and he decided, hey, this isn’t for me. I’m going to go out. I don’t know exactly, what I’m going to do, but I’m going to start my own company. He does videos right, and he’s now done videos for like Nike; wow, yeah, and this is early in the process, but he wouldn’t take a dime for me names Danny Givers guy, yeah, but to answer your question because that wasn’t your question at all to answer your question how did I get involved in NCC? My wife and I had a child very young; I was in college, she was, and she was graduating high school. So, when I was in college in the summers, I started a business in the neighborhood, and I was handing out brochures, and there was literally one customer who actually was home when I gave out the brochure. She said oh my god, I’m having a wedding this weekend at my house; my husband, all he does is work every day, 80 hours a week. It’s nuts; what can you do by Saturday? So, I ended up working for them every day that week and then actually every day for the rest of the summer. They were my one and only customer, and that wife was one of the founders of what was then Northeast Conveyor Corporation, which is what NCC stands for, and her husband was the other founder, and having the wedding was my first boss Frank Solitario. So, that’s how I got involved in NCC. I met them that summer; they offered me a job coming out of college; they checked all the right boxes. It seemed like a cool opportunity, and I took a job, and we had a lot of fun in the beginning. We were a young growing company. I guess we were eight years old when I got there, three or four million dollars in sales, and it was fun growing a company. I mean, we call it the rise and fall of NCC because it rose and then fell dramatically. So, if you fasted forward to when I bought the company, we had gotten up to maybe 12 million and then backed down to like two or three, wow, so the founder had sold the company. It was just a strategic acquisition; it was a bad strategy. It’s the best way to say it, and things didn’t work out, so the company was in dire straits; we were literally a million dollars solvent insolvent, so it was literally the point where we would go into work and not know if the doors were going to be locked where we couldn’t buy hardware from vendors because we were all on credit hold that was the situation people were leaving nobody wanted to be part of it was it, was just nuts so that also means that It’s a good time to buy a company because It’s at an all-time low at least if you believe in it and that I did we took out a home equity loan literally every dollar of cash we had and everything we could borrow put it into the company and just started rebuilding and things went pretty good for a few years. I mean, it was, I mean, well, actually for a while, but I guess when I took over the company, we were like a triage phase like we were bleeding, so what I thought was important in how to run the company maybe that was needed then but that’s what I thought leadership was kind of tell everybody how to do things and in part what I thought was the right way to do things which in many cases is actually wrong but basically train people is what I thought and a few years into that I don’t know how many, I’m terrible with things like this I know it was not yesterday and it was not 40, but it was I don’t know five or six or eight years into it I realized that to actually be a leader in a company that I actually had no idea what I was talking about and I realized that this was the whole world of opportunity but also unexplored boundaries for me I explored territory, so it became a whole new learning curve and I had to kind of reinvent myself a little bit.
Kathy: Yeah, I think that. It’s so classic. I had a similar career trajectory where I became an owner very young, and I kind of had experiences with the types of clients. I was working in more of a command control environment. They seemed successful, so that seemed like the right track, but I also really had to take a pause at a certain point in my career and really rethink what leadership is and then how to build a culture where there’s a whole band of leaders thinking about the business. So, why don’t we start to kind of step into like how did you get there what were some of the things that were first and foremost in that drove you to that going from I know something’s not working, but yeah, I’m gonna do next.
Kevin: I think it might have been. I read a book called the “Bill to Last,” and I think Jim Collins wrote that, and he had this analogy, and It’s basically a time teller versus a clock builder, and I realized I was a pretty good time-teller, but I was a terrible clock builder. I just didn’t focus on it. I didn’t realize what was important, and there’s if you look at a lot of small businesses, you have a few people at the top who are in the business and then the band of brothers and sisters who support that person, and that’s fine there’s nothing wrong with it because you can run a successful business that way, but I just think it has limitations and boundaries and it doesn’t really empower the people or maybe, more importantly, harness the strength and the education and the insights of the people in the business it is more of a command control type structure and it doesn’t really allow for that opportunity.
Kathy: Yeah, and I think you also mentioned that, similar to me, that you kind of took a look at what you wanted to build towards, so visioning or thinking about the business with the end in mind first, so talk to us a little bit about that.
Kevin: Yeah, I mean that that gets like deep pretty quickly, right, and we can go there. It’s like, what is my actual purpose? What am I trying to do? And what, I’m kind of a planner? So, I like to like look forward and say, okay well, let’s get there, and I learned I believe I think I might have been in early with that and didn’t know, and I remember coaching a football team actually Danny’s team maybe Kyle’s seeing my son and that group of kids, and I remember the first page of the playbook I wrote man these guys hit and then when I met with them when I met with the football team I said you guys know why I wrote that and lots of ideas but none of them were actually right. What I wanted was coaches to come to me after the game and say, man, those guys hit right. So, that’s what I wanted, and I guess it kind of sets your mind if you think about where you want to get you to make tiny little adjustments along the way in that direction, right, and I think if you begin with the end in mind, then It’s easier to figure out how to get there so at that stage of my career whenever it was, I didn’t describe the time frame very well, but at that stage in my career, it was like okay well, where do you actually want to go? Are you happy with this as it is you want to just keep it where it is? Do you want to sell it? Do you want to retire? You want to go fishing, maybe do you want to do something different, and you kind of get all you get all tangled up in that, and it’s like why is the sky blue? What is my purpose? What is happiness? Type question I’ll never forget in college, we had like one minute left in class in philosophy, and this kid says I have one more question, but what is life and I was like one minute left, so anyway, it was one of those types of questions, and it took me a while to get there but what I think everybody in the world has this goal they want to make a difference right. So, I realized what I wanted to do was make a positive difference, and It’s so simple, but it just took me so long to get there, and once I realized that, I realized that well, I’ve got this great mechanism this great tool in order to do that and let’s take NCC about that let’s make that the purpose of NCC to create a positive impact on our employee’s lives and our customers on our vendors on our team because frankly, It’s the only tool that I have so that’s what became kind of a goal of NCC.
Kathy: Yeah, no, I always have that philosophy of like small groups of people banded together can really make an incredible impact, so I love the way I’m so all about visioning, and thinking about purpose and building those types of driving influences in your business, but those don’t get you to the finish line so can you talk to us a little bit about the how I think that’s the most important part.
Kevin: Yeah, yeah, so, fortunately. I have a really good team to help figure out the how because this is not I’m okay. I’m like the general direction of things, but my strength is not in the details of making it actually happen but my how it kind of. It’s kind of a two-pronged approach. The one the first how as well, let’s grow the company to 100 million let’s just make it nuts and that creates a lot of challenge a lot of opportunities it’ll be fun and let’s make that happen right so I’ve made that public before this isn’t the first time, but of course now we have to do it right and in order to do that we realized we needed some fundamental shifts and they’re on the screen right now the first one was made the company employee-owned, and that gives everybody I mean there’s a lot to that but gives everybody a stake in the outcome it shows trust it makes it a team game. I also wanted to make it an open book company, so it says right there shares the financials with GGOB, which is a great game of business. They’re a company that helps you open the books for the team to see trust and transparency in teamwork again. There’s a lot to that we’ll talk about a little bit, and then we needed to improve the way we managed our company. So, we implemented the entrepreneurial operating system or EOS based upon the book called Traction, and then what we’re not going to talk about today is we’ve reorganized our company into a growth strategy that actually makes sense because the previous one didn’t, so that’s a whole other story.
Kathy: Yeah, and I love this. I think we’re kindred spirits, and how we’ve used some of these methodologies to improve the business we had, we probably could spend three hours just talking about GGOB and EOS and how well, yeah, great, but yeah, let’s kind of get into some of the no nuts and bolts you talked a little bit about the decision to become an employee-owned or ESOP business and so tell us a little bit about why and then the how around ESOP and was that the first step before GGOB and EOS yeah okay.
Kevin: Yeah, so an employee-owned company is essential; I mean, you can make this description as simple as you want or as complex, right? So obviously, I’ll go for simple. First of all, from an employee perspective, let’s just talk about that if you’re an employee in an employee-owned company. It’s amazingly simple you work there, you accumulate shares; there are different ways and different values of those shares; as you accumulate shares, there’s a value to each share; when you retire, you get the shares in cash value right. So, basically, It’s flat out in additional benefit you work there you accumulate shares the longer you work there, the more shares you get, the better the company does, the more the shares are worth, and that’s one of the keys right It’s one of the keys for both making it an ownership culture, so people feel like they have a stake in the outcome and also giving people a real thing that they can get engaged and be part of and by the way, makes a huge difference in so many other investments not any other investment but most other investments you put your money in and whatever happens and you can do your diligence to think to get in the right spot with it where you think the performance is going to be impacted positively, but the reality is most of the morale can shoot out of your control. So, the beauty of being part of an ESOP is well number one doesn’t cost you anything but number two; you can affect the value of the company with the way that you perform in the company. So, It’s I mean, It’s an amazing tool. It’s not the simplest thing in the world like behind the scenes, but from an employee’s perspective, it really is that simple. It’s definitely not for every selling owner; you definitely sell at a discount, but I believe that if you look at the rewards, and I don’t mean financial, but you could look at the rewards for creating an environment like this, it far out exceeds any discount or difference between a strategic sale or not and talk about a good partner the last thing in the world. I would be a strategic partner that kind of tells me what to do. I mean, I’m an only child, and I don’t necessarily like to be told what to do, so now I have shared ownership with people who understand what they’re talking about, and they’re not sitting in an office far away pretending that they understand so I mean It’s literally the greatest partners you could ever possibly have people that have the same interest as you and growing the value of the company. So, It’s an amazing thing, and I heard about it well, as you can see in the video, for four years before I did it, so it was kind of three years of thinking about it, and it wasn’t full-time for sure but every time I heard about it including the first time I knew it was right for us It’s just a matter of well okay, this seems like It’s a pretty big decision I’d better do my due diligence. So, that’s was the pop-up on my screen, so that was that took a little while to get going, but It’s literally one of the most valuable things in that I’ve ever done in my life in business certainly thing I’m kind of most proud of, and I think it has been one of the best decisions I’ve ever made.
Kathy: Yeah, and it, but I think It’s really important because, similarly, I’ve thought about ESOP. I’ve thought about succession period because when we work with a lot of manufacturing businesses but across the spectrum, I think what you see is people that don’t think about succession and how what how to carry on the business beyond you and so that due diligence process I highly encourage you I went down both exploratory of ESOP as well as acquisition and just understanding what I needed to do to get ready probably way before I’m even ready to talk about my next phase, but I love just that due diligence piece is critically important because I’ve heard a lot of ESOPs that haven’t gone well too. So, I think it is super important that you understand what you as the owner want to get out of it and then what you, what value you’re really going to be giving to employees, but easier said than done, so not every employee that works for you really understood how to run a business. So, I think that is where like great game of business comes into play. So let’s talk a little bit about the EOS, a great game of business.
Kevin: Yeah, that was. I mean, that’s an important point the ESOP is not a cure for problems, and It’s not an end-all-be-all. It’s an important element, but by itself, if I mean, I could literally have created use up and not necessarily told anybody and just give them a statement each year, and in fact, I know a couple of companies, but that’s what they do like yeah, we’re in East South but we don’t really leverage it or celebrate it, and that doesn’t make a ton of sense, but I realized pretty quickly we got a fair amount of momentum because I put a lot of effort into the announcement. I think the only thing I didn’t have was smoke; it had everything else. I even had the audience, which was my friends and family. I told them when to throw the blue balls. I don’t know if you noticed the blue balls coming out of the air, yeah, but I said when I say this, throw the blue balls because I knew people wouldn’t understand what it would mean or how to react; in fact, in the video, you can see a couple of people are like they don’t know what to do so it was my cue to tell people to start clapping. So, we did that, but there’s a lot of education about that there’s we have an ownership culture committee that is always reframing this up and talking about what it means to be an ownership an employee-owner and educate on the ESOP, but that’s really not enough, so the great game you brought that up this is an incredible story of a company really, and It’s the story of Jack Stack and his rise. He hasn’t fallen his only rise from the time when he was I guess a plant manager or a general manager at a remanufacturing facility in Springfield Missouri and corporate came in and say we’re shutting you down and Jack said what do you mean I’m hitting all my numbers and then since learned that there’s this huge hole in business today where people think they’re doing the right things because he was as far as he knew and ultimately the only scoreboard that actually matters are the financials right so what he did was he designed a system called the great game of business and he employed it in his company and then companies I don’t know how many companies he has but he’s a tremendous success story and he employed this methodology in each of his companies and then I think 10 years ago maybe a little bit more he started a company called the great game of business wrote the book and now that portion or that company within his family of companies also shows private companies like us both of us how to run your company from an open book perspective and It’s all about here’s what here’s what I always this is what puts it in context you teach people how you make money and they will then figure out how to improve it and It’s kind of that simple right they and there’s the financial side of that and It’s really important but also people like to win or at least winners like to win and people like to be engaged in something where they can see how they’re making a difference. So, It’s a really good tool for that. So that’s, that was that, and then Do you want to move on to the EOS or not?
Kathy: What? Let me just ask a couple of questions that sound awesome, but, like both having done it myself, and I know you’ve been a great game player for a while like, tell a few of the stories like I’m there are some highs and lows to this too right. So, what are some of the easy wins were, and then where have you guys struggled with? Yeah.
Kevin: Yeah, that’s a really good question; I think anything has its kind of pros and cons and wins and losses, and it wasn’t easy to put in place. We’re mostly a bunch of either engineers or people who think like engineers, and in our business, our equipment either works or it doesn’t right. So, there’s no gray, and we were very concerned with getting it really accurate and perfect, and that’s really, really hard because there are a million moving pieces, so we’ve struggled with the accuracy. We’re actually really accurate over a longer period of time, but the timing of all of the costs coming in and hitting the books and managing all these different inputs and vendors invoicing on time blah, blah, blah It’s really challenging and remains a challenge today, so that’s one thing.
Kathy: The forecasting piece of it all is so interesting. Yes, yes, yeah, we still call it poor casting, but It’s at least we’re like we’re looking at that forward view, and It’s that’s very challenging.
Kevin: It is. I mean, It’s really powerful, but if you’re judging yourself on the accuracy and within a month-to-month perspective, we still have some pretty good swings because we’re still learning, but we’re getting better, so that’s good, I think like anything else when you set something up there’s a lot of energy and emotion and yeah this is new this is fun let’s boom and then eventually it turns into another just thing you do. So, I’ve noticed that recently where one of the great powers of the great game is it starts conversations about numbers when they’re wrong, which all the time, I mean, let’s face it, is so for a million reasons, and I was at a huddle which is what we call the meetings to forecast the numbers, and there was one category that was read like for the last however many weeks, and I was like hey what you kind of you called that number out, and It’s red. It’s been red forever, and what the deal is, and they said oh well, that one’s wrong It’s that one’s always been wrong It’s like all right. So, if we have we gone have stream to fix that they’re like yeah all right we will we will so if it just you have to make sure that you’re really harnessing the power of it and the benefit is so we used to put this in context we used to get a job with a budget and turn it over to the team and if we hit the budget we hit the budget there’s maybe whoever did the estimate definitely understood the budget some of our project managers were in tune with the project with the with the budget almost nobody else we just didn’t have a system in place so if we made money on the job that was a bonus almost it wasn’t like managed it was kind of like just happened now literally every single person understands their role in every single project and they’re not only talking about where they are today they’re talking about where they’re going to be three months from now the projects actually do last at least that long so so the whole thing is when you get to the end of the project you say well went wrong yeah we might have thousands of transactions in a job It’s like well It’s like It’s like It’s a senior thesis just to figure it out so and you never really figure it out because It’s after the fact so the one of the great benefits of the great game is everything’s real time so if you see a mistake it probably just happened and It’s easier to fix something that’s just happened because you have a better chance of figuring out what it really was and that’s a huge benefit to it well.
Kathy: I couldn’t agree more and we just recently had a situation where we’re looking at a lot of metrics a lot of numbers but billability is an important metric in a service business and what we weren’t looking at was or looking hard at was where that unbilled time was going and so if you’re not unpacking what is some of the barriers to more availability I’m like, oh my gosh, we’ve been looking at the wrong number for six months so now we’re unpacking that but it is I didn’t think of that somebody else on the team brought that to me and I and now we’re not able and so I think that’s the power too is that because we teach people financial literacy they’re able to take to look at things differently and It’s not just you’ve got a lot oh, It’s the whole power that’s the whole power yeah, I totally agree so in terms of the other tool EOS the entrepreneurial operating system I’m a huge fan too, I’m a low, I was slow to get on board with that but we’ve been running for about just almost a year so talk to me about that.
Kevin: Yeah, this is, this is based on a book called “Traction” by Gina Wickman. This is obvious since the book is on the page. This is funny how this one came to me, so we’re a year and a half into it, so five and a half years ago that’s actually surprisingly very accurate; a friend of mine who had sold his business I had talked to him and said hey, What’s your operating system? How do you run your business? What and I think, I was talking about annual meetings and quarterly and things like that, and he said have you heard ever heard of a book called TractionTraction and I said no he goes all right to get it, so I probably ordered it was that pre-Amazon Prime I don’t know I guess that doesn’t matter It’s totally irrelevant but anyway I ordered the book, I got the book, I read it and I remember thinking I don’t know, I kind of know all this stuff right and it didn’t really resonate with me so no it went nowhere and then I was talking to him his name is Rich Barr by the way he used to run MGS machine out of Minnesota and then he sold the company then I talked to him four years later, and I said that we were talking about something he said hey, by the way, did you ever read TractionTraction I go I don’t know I think so I’m not really sure he goes would you please read the book. So, I went back, and I read the book like, oh my god, I’m so dumb. Why did I not get this? Here’s the thing if you’re looking for a magic bullet, it is not a magic bullet, and frankly, a lot of the concepts and the tools in that book are ones you already have heard of, right, and he even borrows concepts from other people from other books right, and other schools of thought what he did which is truly amazing has he put it in really nice book buckets right there’s a really good vocabulary there’s a really good defined meeting pulse there’s a really good meeting system, and everything’s like super simple concise and clean, and It’s to the point where It’s just it’s done I mean It’s a really good comprehensive management tool. So, it allows you to focus on running the business, not coming up with a management tool because It’s like you said earlier, when you buy a business, there’s no school of how you run a business. You get your MBA still not even close, so this is just a fantastic tool for us.
Kathy: Yeah, I could not agree more. I think when I woke up this past summer and was looking on a weekend looking forward to a leadership team meeting which was nothing against my leadership team, I really dreaded those meetings. They just were ineffective, and I was like, oh my gosh, I can’t wait to the leadership team meeting ten, as you call it in the OS, because we actually talk and solve problems in those meetings, and It’s just been an incredible gelling tool for our leadership team.
Kevin: I get a lot of questions about are they are competitive with one another. Which one should I do first? Can they really work with each other I think there’s no question they can work with each other? I don’t think they’re competitive; they might be competitive if you only have so much time to invest or so much time to spend in a particular year, but I think they complement each other really well, and I tried to take what I consider the key points at least for us out of each and to make it concise for where I feel like the strengths are and my monitors behind my camera. So, I don’t even know if I can read it, but if we start with great games, the ultimate scoreboard, I mean literally you’re working out the financials so forget about key metrics that you hope all align to improving your profitability you’re working on the ultimate scoreboard right to the point of attack it builds the trust you can see how you make an impact, and then it opens up discussions about the numbers then if you look at EOS I think before anything else It’s an organizational tool there’s a really good mechanism for accountability also focus and alignment, and there are some really good people tools in there as well, so both of them are probably saying okay you’re missing this and this if there’s implementers or people from those companies in this call and they’re probably right, but for us, this is these are the key differences and how they kind of work together.
Kathy: I 100% agree. I do think that you can do multiple things in your organization. It is about the kind of your time and how much you can take on or how much your team can take on it at once. We obviously, or we did, open the books first, and financial literacy has just kind of been ingrained in our culture. So, EOS, to me is, just give us a framework to run the business from a growth standpoint, and just it also is super exciting because we work with a lot of EOS-run businesses as well as GGOB-run businesses, so just that financial acumen across those teams and that like that operating system It’s really easy to use that common language and that common problem-solving skill sets that you can pull from your team so we’ve been a lot more effective to you and working with those types of well-run organizations that have invested in a vision and then really have a great operating organization because what we find is most companies do what they do really well like they could scale their operations because that’s why they got into business what they don’t always emphasize is on the tools for like running and organizing the infrastructure of the business. So, the operating mechanisms of sales and operations and marketing, and if you can create systems around all of those key things in your organization, it really does allow you to scale much more effectively.
Kevin: Yeah, for sure.
Kathy: So, I know we’re getting close to time. Lisa, is there any do you want to open up some questions? Is there anything that’s come in?
Lisa: So the first question for you, Kevin, is either system, and I’d love to hear an experience from EOS and from GGOB. What would you say was like the moment your team got it? Did you get comments? Did you see a turnaround? Is there something that made you realize that, yes, the light bulb has gone on?
Kevin: It’s probably; when we opened up the books to the team and showed them our income statement right because I think that everybody thinks that [Music]. That an owner is really just getting insanely rich right and they think that there’s just so much money what are they doing with all that money, and the reality is It’s not anywhere necessarily anywhere near that, so I think showing people how everything affects everything else in the income statement was probably that moment for us.
Lisa: And then, on the flip side, if you were kind of considering now if you were a leader considering implementing EOS or GGOB, what were some of the common complaints that you got back, and how did you overcome those?
Kevin: In terms of implementing a system, just the time involved, well, okay, you’re really excited, yeah, so I think the timing was really right for us because we had just announced the ESOP our growth plan, and we said hey guys, we know we need to improve our organization, so everybody was really I say everybody I’m sure there’s somebody saying oh no, I wasn’t but there’s problems I think most people really, really into it because as an employee-owner if you can improve your business and we know we had a lot of things we needed to improve and it also adds that visibility. So, I guess I’m answering the question. Sam, there wasn’t a lot of kickback, okay, so there is one, and this has been a common issue of late or a more common issue of late. We’re super busy to the point where everybody I feel like they’re a little mad at me, and there’s definitely some people who feel like, hey, can I just work on the projects? Do I really need to be part of these meetings and these hurdles? Can I just keep working, right? So, It’s, and It’s a really hard thing to get everybody to understand that we need everybody’s input, we need everybody’s involvement, and you really need to think and act like an owner at our company to maximize the effect of the company just everybody pushing in the same direction whether It’s just being aware of something or literally changing something everybody has input to share, so I think getting everybody there is probably one of the challenging things and I heard once this is from the CEO of Walman, which is waffling optical which is I might not be saying that right but anyway It’s a large optical company on the Northwest, and they’re in ESOP, and they say listen an ESOP is not a magic bullet and ESOP you’re going to have people in the company they’re giving their all, and they already have and already will and that’s all they’ll be no matter what you’re going to have people probably on the other side of the spectrum that no matter what you do It’s not gonna affect it. So, what you’re really trying to do is affect the people in the middle and trying to get them up a couple of notches because if you look at that and then maybe that’s 70 or 80 percent of your company, and they’re all two percent better that ends up being a huge difference. So, I like that analogy.
Kathy: Yeah, and metaphor, do you, we are not an ESOP at this time, so do you feel that this is these operating systems could be standalone as well or a combination of GGOB with EOS without having?
Kevin: Yeah, they both could. It’s probably easier to implement GGOB if you’re an ESOP because It’s more natural for people to want to really care about the long-term health of the company. They probably don’t like me saying that and there’s probably a lot of places where that’s not really true, but I think It’s a really natural fit with these top companies; yeah, and by the way, I wanted to say this earlier but I definitely It’s like I was concerning that we were doing flavor of the day and just followed this program get the rich quick thing but what when you look into these programs it takes all of the work of figuring out how to do this out of the picture. So, why should we spend our time and effort trying to figure out a system that, by the way, probably isn’t as good when we can focus on running our company and have somebody teach it? So to me, that was like a hump I had to get over, like the mental hump, or is this some type of infomercial type thing because It’s so, not. It’s so powerful, both of them.
Kathy: Yeah, I 100 agree that the tools, are like you could create many of these tools or you could pull it from many of the other systems that are out there, but that like trying to reinvent the wheel in your organization while running a company so difficult and yeah it takes that piece away from it, and now you can start to build on your company because you don’t have those operational obstacles to overcome. I couldn’t agree more, and then I also like we met at the great game of business conference, so the community the peer learning opportunity that I’ve been able to tap into has also been valuable because people will share, oh here’s how we’ve tweaked x tool to do this business and that has just been really helpful too.
Kevin: Yeah, I know those events are incredible because I mean, let’s face it, if you’re going to implement open-book management, you come from a certain mindset, right because It’s just It’s different. It gets a lot of effort, and you have to really be willing to throw yourself out there to do that, so the people that go to those conferences all seem to be kind of like-minded, and that’s what the community is all about very helpful very good genuine people who literally just want to make a difference in this world like us.
Lisa: I think that’s a great point and our last question that we’ll round out with from Mike says, how do you balance growth and the company’s ability to manage it?
Kevin: Yeah, well, yeah, I think we’re always struggling with that, and I don’t think that there’s really an answer. I will say that if you look at so our company, the way we used to operate just didn’t scale as we got it up to like 30 million, and we’re like we’re just pulling our hair out; it was nuts, and so we kind of backed off and then kind of rebuilt it and we’re close to that again today if not there but you have to be set up for success you have to have a structure that is scalable. So, if you’re in your business is centered around a few key individuals, or if there are known bottlenecks in your business, you have to look to solve those things, and we’ve figured out a model that I know works right. We’ve done it a couple of times. We’re doing a third one on January 4th, so 2021 will be launched, and we plan on doing one per year, which, as I said, is nuts, but we have a model that we believe in, and It’s probably wrong in half a dozen ways that we’ll just fix along the way, and I think just being agile along the way to fix what you thought was right that wasn’t is probably one of the more important keys to any anything like that I wish I had a better answer.
Kathy: I think that’s a really strong answer, though. I agree. It’s it is. It’s very we’re always a moving target as businesses, but if we don’t operationally start to improve how the business runs all across every segment of the business and start to add in operation to things that we can’t do well that aren’t scalable yeah, it is really an in a barrier for growth, so it just gets more and more painful, so if you’ve got like a smaller business and It’s painful now add people add more customers to it, and It’s like putting gasoline on a fiber It’s just gonna get worse, so I agree that I think, that’s great.
Kevin: There are tools, though, in the US, to help manage that process; they’re literally, one of the coolest things is something called an accountability chart. It’s like an org chart on steroids, and you identify who owns what in the business; whether it works or doesn’t work, they own it, so, It’s interesting. It’s a mission way to look at it, and it definitely helps with clarity on who owns what, and then, of course, if there are issues, then that person will then look to fix them right.
Lisa: As we round out, first off, I need to say thank you, Kevin, for all the great information today and for sharing your story, all of the details, from the good and the bad to where you’re at now looking for new and exciting things as we move into 2021. If you guys think of questions for Kevin later, I would like to reach out to him; we do have his contact info; just reference “Business as Unusual” in the subject line, so he knows you’re coming from the webinar or you can also reach out to Kevin on LinkedIn as well. So, again that Kevin, thank you so much for being our honored guest today and having this time with Kathy and me.
Kevin: Well, thanks for having so much fun.
Lisa: As we look ahead, our next webinar is in two short weeks on October 8th, so just as we focused on the employee experience today and really creating that culture of ownership, we’re going to flip the side, and we’re going to look more at the client experience and how do you get those clients that will love and stay with you during the life cycle of your business. So, this is actually going to be a triple threat with Chris McKee and Deanna walker of the Venturini Financial Advisors or partners; I should say, and then also Amy Anderson by Red Caffeine’s Director of Client Services. So, we are really going to focus on what makes the ultimate client experience and the steps that you can take in your own business to bring those on board, so again, as we’re looking ahead to 2021, you’ve got new tools now you can implement from Kevin’s information with EOS GGOB and consideration for an ESOP, and now we’re going to give you the tools to help keep your customers happy, and with you so this will be live on the Red Caffeine website later today so you can go ahead and register and we’ll also include information in the recap email for Kevin which will also include today’s recording if you don’t receive it or would like to share it with other friends and colleagues you can also visit Red Caffeine’s website at redcapping.com click on the “Business as Unusual” icon in the center and you’ll find all of our webinars there that you can reference for your own viewing pleasure. So, with that, I’d like to thank everyone for joining today; if this was your first “Business as Unusual” webinar, I hope you enjoyed the experience and that you’ll join us again in just two short weeks. If you’d like to learn more about Red Caffeine and how we help our other companies as growth consultants, you can reach out to us at connecting redcaffeine.com.
