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Crafting Your Strategic Identity – Return on Podcast Ep. 11 with Dave Newell

Crafting Your Strategic Identity - Return on Podcast Ep. 11 with Dave Newell

The following is a transcript of Episode 11 of Return on Podcast, the show where we help e-commerce sellers improve their ROI in business and in life. For more episodes, subscribe to our YouTube channel or listen on Podbean, Apple Podcasts, and Spotify.

Tyler Jefcoat (00:07):
All right. This is Return on Podcast, where we talk about the experiences, obsessions, and habits of the most successful e-commerce entrepreneurs. I’m your host, Tyler Jefcoat, and I wanna welcome you to this episode of ROP. You’ve heard of return on investment. Well, this is Return on Podcast. In today’s episode, I’m excited to talk about how visionaries, how business owners can transition from putting out fires to crushing their goals by building scalable businesses. You do this by carefully aligning the people, processes, capital, and strategies so that you can actually own your company instead of it owning you. We’re gonna touch on strategic planning ’cause baby, it is strategic planning season here, and we’re gonna talk about how to organize teams around execution. Let me go ahead and bring in my friend today’s guest, Dave Newell, the president, the man for the Evolve Leadership Consulting group. How you doing today, buddy?

Dave Newell (01:07):
Hey, Tyler. I’m doing really well. Thanks for having me on.

TJ (01:10):
It’s a pleasure to have you. You know, Dave, you and I have worked together on a couple of engagements where you’ve been the fractional COO and I’ve been the fractional CFO, helping these companies get oriented. I trust you. I respect your mind greatly. And again, just thanks for being here, man. So listen, we’re gonna talk about all the things that you and I almost always geek out on whenever we get on phone calls together, but before we dive into the deep end of the business system geek chat, I wanna get a little bit of your journey. I mean, you’re one of these guys that went to a small liberal arts school. You kind of got into nonprofit and then into higher education and kind of slowly morphed into this guru for operations and systems. Like how in the world did that happen? Tell me a little bit about your journey.

DN (01:58):
Yeah, thanks for asking. Yeah, so, you know, I started out, I graduated college in 2003, went to a small liberal arts school, was a com studies major, you know, was into the human dynamics. I actually went to be, I went into psychology to start with and then realized that psychology in college is so much science. And I was like, this, isn’t what I, I wanted to understand how humans work. And that’s not what psychology in college was. It was more, you know, rats and laboratories, studying human function in that way. But I’ve always been interested in the human dynamic and how systems fit together. So I ended up in higher education, but higher education, mostly on the community organizing and leadership development side of things. So a lot of what I was doing was coordinating projects between nonprofits, students, faculty, the institution.

DN (02:54):
And so what I was doing was in my, you know, kind of day to day job in higher education, was different entities together around something that was shared and trying to move them in the same direction. In that process, I learned a lot about kind of, how do you align different groups that have different interests, different objectives, different ways of seeing things. How do you get ’em swimming in the same direction? And so, you know, just through experience in community organizing, I started to see some different systems. I started to see some different ways of doing that, learned a lot of different techniques and strategies for connecting groups. And then in 2012, I started doing some consulting work on the side and then 2014 started Evolve and got into working with companies. And what I realized is that, you know, the same principles on the community organizing side applied to business.

DN (03:50):
And a lot of it is just, you know, recognizing you know, what are the kind of obstacles that we see in our way, what do we actually want, and where are the the pieces that align us as opposed to misalign us, right? And how do we leverage and build on those things and identify what those are? So that’s really, you know, it was a strange journey in the sense that I went from nonprofit higher education into business, but the principles are the same kind of across the line.

TJ (04:19):
Well, it totally makes sense. And it’s actually so many people, especially that open businesses, either as an agency or e-commerce, that would kind of be our audience, Dave, they assume that there’s like one right way to get your credibility, to learn your craft. And that maybe looks like you go to a business school and get an MBA or something like that. And you know, I like happen to have an MBA. You went to a really great alt-MBA program, but like actually where we learned where we got our chops, in case you were wondering, guys, is just doing it, like helping build leadership teams, making mistakes, seeing issues in complex organizations and learning how to solve them. I do wanna talk about team alignment, and I do wanna talk about education, execution. But let me just start with this question. So with your customers, some of them are mine. We work with some of the same really successful people out there, but they do have issues. Like what are the core issues that you’re seeing in our kind of CEO landscape that we work with right now?

DN (05:21):
Yeah. You know, I mean, I think it’s a really big question. There’s a lot of different ways you can perceive this. I talk about it in kind of four buckets. I look at culture, strategy, execution, and story, and often those four things most organizations are good at two of those things, right? So, but those four in my mind kind of represent the elements of an organization. So execution is like, can we get stuff done? Right? Like, do we have a plan? Do we have project management systems in place? Are we executing on what we said we’re gonna execute. Like, do we have a product, and can we deliver it? Right? So e-commerce, if you’re shipping products, if you’re developing products or if you’re on the marketing side, you know, are you delivering results for your customers? That’s the execution bucket. Strategy is the, where are we going, which informs the execution. Those two things tend to go together. And then culture is kind of who are we? How do we wanna be together?

DN (06:16):
The story, I think is the unique one, which is how do we talk about what we do externally, but also how do we talk to each other and about what we do internally, and do those things have fidelity? And so often what I’m looking at is are those four systems thoughtful and cared for? So often what I see when I go into an organization, like I had a client, you know, in the e-commerce space who was on the marketing side, Amazon marketing side, who was really good at the PPC, really good at, you know, like the marketing side, but they were not communicating expectations with their customers at all. Right? Like they could execute, but they couldn’t build that relationship. They couldn’t hold that. Right? Like the story didn’t hold water from what we told you externally to once you got internally. It didn’t hold water, and they were churning and burning. Right? Like they were losing customers kind of consistently.

DN (07:10):
So it’s like, okay, so what we do on the front end then is do an assessment, and I look at those four things. It’s like, where are you strong? Where are you not? And typically, like I said, there’s kind of two things that they’re strong in and two things that they aren’t strong in. And so we just, we ramp up the other two, but we make sure that those systems talk to each other. So where a lot of, I think, CEOs get into problems is there’s so many things to be worried about, right? Like there’s so many things that come at you on a day to day basis, whether it’s just, you know, 150 emails that you got that morning, Slack messages, you know, whatever channels you’re in and you’re trying to manage all the pieces. And I think it’s being able to, you know, step outside of that and say, look at a big level, here’s the focus, here’s the one thing that we’re focusing on and now that should trickle down and inform everything else. And I think that’s where, you know, most CEOs get in trouble is just getting caught up in the day to day weeds of the work and not spending enough time stepping out and saying, is this system working for us?

TJ (08:08):
Yeah, it’s so good. I think that’s, it’s a pretty and you know, if any of you out there are experiencing this, I think this is actually a really normal entrepreneurial journey too, to hustle something into existence and wake up one day and realize, oh my gosh, I’m juggling 17 plates as the CEO. What do you mean, you jerk? Let me work on my business. Right now I’m just trying to like, keep my hair from completely going on fire. Right? I don’t know what I could possibly do. And I think your point is really well taken. There’s you can’t afford not to slow down and find time to work on the machine because if you want to continue being in chaos, keep doing the same things you’re doing, right? You’re gonna have to build the – I like those four categories. That’s really interesting. And the story element of it is really important. I think we can forget that, at the end of the day, people actually buy our “why.” They buy the why as much as they buy anything else. Yeah, it’s really, really well said. What else about that? What else are you learning about about your clients, about their journey, about what really creating challenges for them they’re having to overcome?

DN (09:18):
Yeah. You know, I mean, just to kind of piggyback on what I was just saying, like getting lost in the weeds is a normal thing. And I think most CEOs have a complexity threshold. Right? Which is like, okay, this is getting hard to the point where like, I’m just holding too much stuff. And so there’s almost like a shutdown moment. And the truth is there, that’s to me the point where you need to kind of step back and say all right, how do I simplify things? Right? Because as an entrepreneur, you know, you get into your business and you start experimenting, you just start pushing in. You’re just, you know, like you said, kind of the hustle effect, you’re rapid fire, but like hustle without kind of a strategic purpose, hustle without a target is just busy work. Right? Like that’s where burnout shows up.

DN (10:03):
So I think about a couple really practical things that organizations can think about. And I’ll tie that into a couple customer situations. So one term that I’ve been kicking around a little bit is this idea of like a strategic identity. And I separate identity from vision or purpose because there’s a strategic element to it. So I’ll give you a couple of like big examples, and then I’ll show you kind of how that’s played out in some other organizations that I’ve worked with. But, you know, there’s like a mission or a purpose statement. That’s the, like, why do we do what we do? That’s the core stuff, right? So I’ve got a video production company I worked with that’s, you know, their purpose is like, we tell undertold stories. Like, cool, love that. That’s a really good purpose.

DN (10:45):
I like why you do what you do. Right? And then there’s vision, which is like, hey, 10 years from now, we want to be doing these things. We want to be a, you know, $15 million e-commerce brand that’s selling X, Y, and Z. And I think then there’s this other piece that often gets missed, which is what I would call, again, the strategic identity. And what I mean by that – so a couple really good examples is like Southwest Airlines. What I would say their strategic identity is, is like, we are the low fare airline. Right? It’s like, that is it. Like, that is what we are. That is, that informs all the strategic choices down the line. Right? So like, if somebody says, you know, a flight attendant says, “Hey, I think we should, you know, our customers are complaining about salads. Like there there’s no real good food on here. I think we should do like a really fancy salad.” It’s like, okay, well, run that up the line. Does that allow us to be the low fare airline? No. Right? So it’s like, so then it just becomes, it simplifies so many of the complex things when you have this, like, this is what we are from an identity perspective. But it’s strategic as well. Another really good example. I know you know, a lot of people know Kwik Trip gas stations, right. And so one of the, their strategic identity, do you know what it is? Have you heard this story before Tyler? Okay. Their strategic –

TJ (12:02):
No, I haven’t. I haven’t. I mean, I know that they – wasn’t it something about like suburban moms or something like that? Wasn’t it something like that? I don’t remember. Go ahead.

DN (12:10):
Their strategic identity is clean bathrooms. Right? So if you think about it, it’s like, okay, so you can’t differentiate yourself based on gas, right? Like gas is just gas. It’s not like, “Hey, we have the highest quality gasoline. You should come here.” It’s like, nope. Gasoline just gets your car from point A to point B. So they were like, well, what’s the other reason why people go to gas stations? They go to pee. Right? So like, how do we separate ourselves? We will have the fanciest, cleanest, best looking bathrooms in any gas station. And they do. Right? And they absolutely exploded. They went from, you know, one or two gas stations to thousands in a couple years. Right? So –

TJ (12:49):
By the way, that’s actually, I think that’s why my wife, maybe that’s what I was thinking. That’s why she always makes me stop at Kwik Trip. So now I get it. I didn’t know that. So there we go.

DN (12:55):
Exactly. I’m like, nobody wants to sit on the nasty, you know, gas station toilet. Like you wanna go to a Kwik Trip. It’s nice. Right? So it’s like, that’s the differentiator. That’s their strategic, like that is a, it’s a strategic choice, but it also becomes part of who they are fundamentally. Right? So I’ll give you a real example. Again, another Amazon marketing agency I was working with is, you know, like Amazon marketing agencies, it’s really difficult. Like there’s a lot of churn and burn that takes place, right? Like, it’s a lot of, you know, I mean, there’s 6 million or so sellers on Amazon. So it’s like, there’s just so many potential customers, so many potential clients, and you get, you know, folks that are like new to Amazon, they’re just selling a product or they’ve been around forever and they’ve got hundreds of thousands in sales a month. Like there’s such a wide range of sellers on Amazon.

DN (13:47):
So it’s like, well, I was working with this group and it was like, well, what do you want your strategic – like, what’s gonna differentiate you from all the other marketing agencies that are out there? Because there’s a lot. Right? And there’s a lot. And there’s some that are like powerhouses and do it really well, and there’s some that are, you know, a couple dudes in their living room trying to, you know, ramp up some PPC for five clients. And what we settled on was retention. Like actually gearing ourselves and designing ourselves to retain clients because it’s costly, it’s inefficient, if we’re just constantly churning and burning folks. But if you think about that from a strategic perspective, retention informs the way that you market, it informs the way you sell, it informs the way you onboard, it informs the way you build up PPC, it informs the way you build out operations. It informs everything down the line, or even talk to your employees about what it is that we do. Right?

DN (14:42):
So the strategy of retention, we started then talking about like, well, what if we have a minimum retainer for a client, as opposed to, you know, we’ll just take whoever. It’s like, well, we know that a thousand dollars or less a month are our biggest churn and burn type clients. Right? Like they don’t have the stability to be around. So what if it was $3000 a month? Or, you know, I’m just kind of throwing our random numbers, but what if we started targeting those types of clients because those are the types of clients that stick around? It informs the business model all the way through and you really stop – or it forces you to question kind of each element of your organization.

TJ (15:17):
Totally. And so I wanna dive us into a planning funnel here a little bit. So I was talking to my mastermind that I lead this morning, Dave, and it’s June, by the way, we’re releasing, we’re gonna be releasing this right before, I think right around the 4th of July. So this is a critical moment for every CEO that took some time, hopefully you did this in December to decide what do I want my 2022 to look like? And then it’s really easy to leave that plan on the shelf and not look at it. Please don’t do that. Like, we’re gonna actually get it out here and we’re gonna stress test that plan against what we actually want our lives and businesses to look like. And then what we need to do differently, if anything, to achieve our goals this year. But like walk us through, Dave, what are you seeing in terms of successful strategic planning? What are the elements? What’s the anatomy of great mid-year strategic planning for CEOs?

DN (16:08):
Yeah, really great question. I would kind of follow that thread line, right? So like strategic identity then to me goes into like focus areas, right? So like three things that you wanna focus on for that particular year, or three years, or kind of whatever your frame of reference is. Right? But in that year, then it might be like, well, we’re gonna focus on process development for operations, we’re gonna focus on employee engagement, and we’re gonna focus on, you know sales funnels. Okay. Like those then become the three thing, three priorities. And what you’re doing is you’re not saying, we’re not gonna focus on all the other things that we do from a day to day operation. But if we try to focus on everything, now what we’re not doing is focusing, like we’re not making strategic choices to advance the business.

DN (16:55):
And, you know, to go back to the original point, you know, I use the phrase, like if you try to be all things to all people all the time, you’re not enough to everybody always. And what that means from a strategic perspective is when you try to do everything, you end up doing a heck of a lot less than if you’re deliberately focusing on three or four things and you start to see huge gains in those three or four things. And as you see those gains, there’s a spillover effect. Everything else starts to get better because people feel energized and motivated. And there’s victory after victory after victory, as opposed to burnout and distress. Right? So strategic identity to strategic focus then to, you know, kind of core objectives. I know you and I both are really familiar with EOS. Right? That’s the kind of 90 day rocks. Like what’s happening in the next 90 days.

DN (17:43):
So in EOS, you’ve got kind of five year or 10 year, three year, one year, 90. I’d like to frame above that a little bit to say, what’s our strategic identity? So let’s review that. Are we on track? Are we paying attention to this? Let’s pick our kind of three focus areas. And then let’s do the one year, 90 days underneath that to make sure those are the things that we’re focused on. And again, it is about prioritization and focus. And when you do that, you start to see impact in other parts of your business as well.

TJ (18:13):
And like one of the questions, just to kind of reframe what you said, ’cause what you said is brilliant, but it was dense. There was a lot going on. You guys may have to rewind that. Listen to that again, ’cause that’s exactly how you should approach it. The one question that we – I would kind of steal from another. So you mentioned EOS, Gino Wickman, Traction. Check it out. It’s a good book. There’s there’s about six of ’em on my list that are really core Traction, Four Disciplines of Execution by Covey, Making Money is Killing Your Business, Blakeman, Scaling Up, Harnish, Predictable Success, 12 Week Year, the classic E-Myth by Gerber, right? All of these books are kind of pecking away at the same question is, how do I build a business instead of having a hobby or an expensive job or a stressful job, you know, kind of thing.

TJ (18:52):
And so if I could get to the end of some moment, and by the way, midyear is a great time to talk about this, and look my team in the eye and say, hey team here’s my strategic identity to kind of use your – here’s where we wanna be at some point in the future, if we could only move one needle and we had to bet that moving one needle would get us the farthest the fastest towards that strategic identity, that picture of the future that we want, yes, we’re gonna do other things. But if we could only do one thing really, really, really, really well, what would that be? And to your point, everything else is the whirlwind. You’re still gonna do the whirlwind, but picking one, that’s the actual definition of focus is to – and even Wickman’s language on rocks. All that means is I’m gonna plan the big, most important things so that the sand of the weekly whirlwind doesn’t completely cover me up and I get nothing done. I’ve been like, wow, what the hell did I do this quarter? That’s right. I replied to customer service emails, put out fires, and I’m in the same position I was right.

DN (19:51):
Yep. Yeah. When I think it’s, you know, if it was easy to identify that, everybody would be doing it, right? Like it wouldn’t be something you need to bring in support for. Right? But I think it’s really difficult when you, you know, you can’t see the forest through the weeds kind of a, you know, whatever that old adage is of, you know, when you’re in the weeds, it’s really difficult. And I wanna actually tie that to something, you know, as you kind of pointed out like, hey team, what do we focus on? One thing I would couple with this. And one flaw that I see with EOS at times is EOS is an operating system, right? So there’s there’s structure, but that operating system needs to be kind of formalized and led by a group of people.

DN (20:39):
And so this is where the culture side of it starts to – it’s like, you can have a strategic identity and you can have strategic focus, you can have priorities and still be a really crappy business. Right? Like the fact that you put those things in play, they’re just words on paper. But essentially, like, what is really important then is that you have a group of people that have committed to that. Right? So, you know, the Patrick Lencioni’s like Five Dysfunctions of a Team it’s like, there’s trust. Yeah, I mean, it’s such a powerful thing. It’s trust, conflict, accountability, commitment, and results. Right? And there’s this piece in the middle, like most people talk about trust and results in that pyramid, but there’s a commitment piece. It’s like, well, how committed are we to this structure? Like, are we actually holding people to account to this or not?

DN (21:24):
And where I see EOS or other operating, not just picking on EOS, but other operating systems fall short is the leadership side of that bucket. And one thing I often see in these small, in smaller e-commerce businesses or marketing businesses is what I would refer to as the big dog operator mentality, which is the CEO that feels like they need to be involved in every aspect of the business all the time. A big dog operator is like flying around solving problems. And that’s really great in the first half a million in revenue or the first million in revenue, it’s what got you from zero to half a million, or it’s what got you from zero to two. It’s not gonna get you from two to 10. Like that is not a scalable way to operate. It’s too dependent on somebody’s ability to figure things out.

DN (22:14):
Right? And so when I’m talking about applying strategic identity, when I’m talking about applying some of these structures of systems, it’s almost at the point of scalability. If you did it on day one, before you even really have like, figured out your product, you’re guessing. Like those are best guesses. Like you have really genuinely no idea. I honestly wouldn’t recommend it for a startup. For a startup it’s like, just get into it and learn some stuff. Now let’s add some structures, we get down the line. But I really, I think, you know, for CEOs who run smaller companies who are like, hey, we wanna go from two to 10 million. It’s not just, “we have to implement some structures.” It’s also, “we have to change about how we think about leading a group of people, how we think about this organization.” I have to figure out, how do I get out? Like, how do I actually back out a little bit and allow my team to explore some things. And we support that through structure, but there is a mindset shift, and it is kind of flipping from that, “I have to fly around and solve everybody’s problems all the time” to “all right, how do I provide a framework that people can see themselves in and guide them through the framework?” Now I become the champion of the framework as opposed to the person who gets into the weeds and solves the problem.

TJ (23:23):
That’s so well said. I was talking to the CEO of about a $10 million company, actually, literally this morning about this problem. He’s like, “Man, I’m in meetings X number of hours a week, and we’re just really feeling burnt out. I know my team needs me in these meetings.” We started poking at it a little bit, Dave. And what we realized is he was the big dog. He’s solving all the problems in these meetings instead of creating ownership from his reports. Right? And so we talked about, there’s a great book out there, David Marquet, Turn the Ship Around, about what does it look like to give your lieutenants, as it were, decision-making authority, not just authority, but the ownership for results, where, when they’re on your calendar, they’re the ones that have done the work coming in, ready to explain it to you, not you doing the work for them.

TJ (24:09):
You’ve got all the monkeys on your back, right? That’s the classic Harvard Business Review article about monkeys on the back, and you know, and retraining your team, and the paradox is that you think your team’s gonna hate you for making them work or something, but they actually hate their jobs until they can take full ownership of them. And so, the paradox is that you actually have to find a way to get out of your own way. And you said this really, really well, Dave, as a startup startup startup – I’ve started two businesses now, both of them been fortunate enough to have, you know, two seven-figure businesses and with both startups – and I’m an accountant, by the way. Both startups, I didn’t do my own darn bookkeeping for the first six months. I didn’t hire consultants. I did everything.

TJ (24:49):
I did the laundry, I took out the garbage, because my only job was to try to find a path to revenue. Right? And then you iterate a few times, and in both businesses in fact, it happened about a year ago in Seller Accountant, and I was like, oh no, I’m like, kind of in the way. And I gotta pivot my mindset now to be the kind of person that can lead an organization which is hard for me because I’m kind of a high D personality type. I like being in charge. I like being a shot caller, and I am the ceiling, I am the bottleneck for the companies that I own until I can figure out ways to empower the people around me. And so let’s talk about team alignment a little bit, because this is a really good – so you’ve done your strategic planning. You’re gonna meet with your team. Like, give me some nuggets, Dave, about how, Lencioni’s a genius in this regard, but how are you finding teams successfully really create alignment? What does misalignment look like? Anything? I like you take it where you wanna take it.

DN (25:45):
Yeah, no, I appreciate that. You know, one of the things that I think – I mean, I appreciate that framework ’cause you know, having supported and been part of startups, like it is, it’s just a mad house of trying to make sense of chaos is what it feels like. And then, you know, the one like you who are, you know, who have found success, it’s like what, you know, and knowing you the way I do, I know you found a couple of nuggets just to be like, this is the thing. Like this is the thing we’re gonna stick to it. Then how do we put systems behind that? Right? You know, so I use this analogy ’cause I think it’s a good one. David Foster Wallace shared this at a commencement speech one time, but he said, he gives this anecdote and he said, you know, this old fish is swimming by these two younger fish. And the old fish says, “Hey boys, how’s the water?” And the two younger fish say “Water? The hell is water?” Right? It’s like, it’s this thing that they’ve been swimming in their whole lives, but they didn’t know what they were swimming in.

DN (26:38):
And so what happened – you know, so I like to ask the question, well what’s your water? Like, what’s the thing that you’re swimming in? And why I ask that question is because we can get so wrapped up in what’s going on that we don’t realize the patterns that we’ve created. Right? So you can’t choose how to interact with the water if you don’t know what’s water. Right? So there’s a really important part on the front end around almost like a regular checkup, like an organizational checkup that I would recommend for organizations. Like what are the 25 questions that you need to ask yourself once a quarter to say like, are we clear on mission? Do we have meetings? Are they effective? Like let’s just check that. Like, are we moving the needle forward on the things that really are important structures in our business? And let’s actually just assess, right? But not from like Tyler’s perspective, but Tyler and everyone else in the organization.

DN (27:31):
And that clarity helps us then to feel like, oh, okay, we’re swimming in this type of water. Now we can choose how we interact with it. So I wanted to share kind of the assessment side of that. Like it is important to do just regular checkups and get that feedback, number one. And number two, there’s a, you know, you talked about, you know, or we started kind of talking about who owns what is what I like to think about. And it’s like, one of the things I see a lot in small businesses is when, you know, when you’re flying around solving problems, either the ownership is almost the CEO owns everything or like they have to own every decision, or two to three people own it, which means no one owns it. Right?

DN (28:11):
So like the two symptoms I see of that is like bottleneck decisions or indecision. Right? Which is like, oh, well we should really do something about this. Like I was working, I have a client who’s a brewery here in North Carolina. It’s like, they have four owners and you know, kind of a leadership team, and they were trying to make a decision about something. They talked about it for a month and a half with no decision because nobody owned it. Right? It was just nobody’s final decision to make. So they had seven people kind of like, “Well, I don’t know, maybe we should do this. Well, we should really do this.” And then they’d come up with some action items. And it was like, well, that’s fine. But like who makes the final decision about it? Like who owns that bucket? And so what I would say is just to create really clear channels of ownership of like, Tyler owns these five things, you know, number two owns these five things, this person owns these five things, and there can’t be overlap, like no overlap.

DN (29:03):
And that creates, you know, back to Lencioni’s work, like that creates accountability. It’s like, you learn pretty quickly if that’s the person that should be making those decisions or not. And it doesn’t mean they’re a bad fit for your organization, just might mean they’re owning the wrong thing. Right? Like it might mean like, you know, you don’t want me planning your catering events. Like I’m not, I’m not a wickedly detailed – like there would be no food or forks. I’d be like, oh crap, I forgot to do that. Right? You don’t want me owning that. So, but if it’s content strategy, learning curriculum, those types of things, great. Those are good things for me to own. Right? So, you know, part of that then is understanding who in your organization is good at what, and do we have them in the right spots, and do they own it? So that clarity –

TJ (29:44):
Dave, you dropped a nugget in there, sorry to interrupt. You dropped a nugget in there. I just wanna make sure people caught this. And I actually wrote it down cause I’d forgotten. I’m ashamed of myself. But one of the many things that came out of EOS that – by the way, I just wanna say this really quickly, quick anecdote: you and I have learned this, but if you take ideas from one guy, they call it plagiarism. But if you read 25 books and distill your own system, because you’re right, EOS has problems, 4DX has problems, Making Money is Killing Your Business has problems, but they all have strengths also. Yeah. And so if you do it that way, they call it research or they call it getting an MBA. Right? It’s like, in other words, it’s like – and so Dave and I have done a lot of research and we’ve applied different parts of it, but I think you can actually find a free version of EOS’s quarterly check in. If not make up your own.

TJ (30:30):
There are key categories of your business, and what you’re looking to do here, I almost wish I had an example to share with the group here, but you’re looking for 20 to 30 questions that almost have like an A, B, C, D, or like a one to five scale kind of thing to say how solid is our sales process? Are we consistently generating leads? Okay. How solid is our operation in this area, in this area? How good is our accountability? And I actually just wanna commit to the group here, before my midyear meeting here in about a month I’m gonna actually have my team do that. ‘Cause it’s actually been over a year since we’ve done the organizational check in. And I think we are talking, we’re plucking away at this question about how to create alignment on teams.

TJ (31:08):
Well, one of the most powerful tools you have as a CEO is to actually figure out where your team is. Like, where are you guys right now? ‘Cause I might be assuming everything’s hunky dory in this part of my business, but then I pull my team, and I realize, oh gosh, my answers, by the way, this is what we call the like delusional flywheel of a CEO where I’ve assumed that my finance department is solid, I’m not even worried about it, but when I actually get the group to weigh in, that’s the area that maybe gets the lowest grade, and I realize, oh crap. My quarterly meeting now needs to include some substantial focus on creating team alignment in this area because that’s where we’re struggling. I was delusional. And what really ends up happening is you realize that you were unclear about what you needed or something like that. Right?

DN (31:53):
Yeah. Yeah. For sure. You know, I mean the assessment is just like, you know, I think about the assessment in three buckets. So you know, to your point too, about like taking tools, I have this really great book on my bookshelf called Steal Like an Artist. And I love that book because it basically is like, no, like the, the future isn’t did you create your own system? It’s did you curate your own system? And I think that’s a really interesting shift, right? To your point of like, well, if I take these 25 books, how do I piece together all this really good information to make something unique, right? Based on putting all these things together. So I think it’s less about like origination as it is about curation, in terms of like being able to put tools together. And it’s why, you know, along the line, I’ve never fully committed to being like an EOS implementer, in part because I think there’s a lot of really great tools, and I apply a lot of those tools. Like I think to your point, like there’s a lot of great, I apply ’em in my own business.

DN (32:49):
And I wanna be able to walk in with a tool belt, right. And be like, hey, this one totally needs a hammer and a screwdriver and a tape measure, and I need to put all those three things in play. I don’t wanna just be stuck with the hammer looking for nails most of the time. So, you know, I do think that org checkup is really important. I do think being clearer strategically is really important, and those two things should inform each other. One thing, I mean, just a, you know, I see a lot of organizations that have data or have org checkups, or they do reviews and they get information and they do nothing with it. Right? Or they ask for team input and they do nothing. Like, “Hey, how do you guys feel about this?” And then they do whatever they were gonna do anyways. And I heard this term a few years ago around people who do that, which is an “ask-hole,” which I think is really great. Like people who ask questions and do nothing are ask-holes. And I was like, that’s hilarious.

DN (33:43):
So anyway, I mean, I think it’s like, yeah, it’s look at the information, it’s look at the data, and then do some – like, don’t do everything, don’t fix everything, but think about what are the two or three things that I can do based on this information that are gonna create the most movement for my team? They’re gonna feel heard, seen, validated, like I paid attention, and I did something, but it doesn’t have to be a way to solve all the world’s problems all at once. Just create movement on two things, and your team will feel like, all right, that survey was worth it. Right? Like my input was heard and validated and seen.

TJ (34:18):
I love it. Yeah. I think, and to your point again, there, again, all of it – by the way, guys, if you’re taking nothing else away from this, be a learner. And the reason that a system like EOS or E-Myth or 4DX or anything else, the reason that it will not be sufficient in and of itself is it’s almost like the reason Amazon sellers are so frustrated with ERPs is that every piece of software is built for a very narrow use case. Right? And so what you wish you could do is you take this feature from Inventory Lab and these three features from Skubana and this, you know, SKU Vault and all these other ones, and you wish you could just you know, basically synthesize the hybrid tool that perfectly fits the, your business.

TJ (34:59):
And the great thing is when it comes to leadership, when it comes to team building, we actually have that luxury. We can do exactly what Dave said. And by the way, I just wanna say this www.selleraccountant.com/resources, I’ve done a three sentence book report on, I think, 55 books, including all the ones that we’ve mentioned here today. So if you’re trying to figure out, like, you’re not gonna go read all seven of the books that I just mentioned, Traction, 4DX, Making Money, Scaling Up, you’re not gonna read those, which one should you start with? Feel free to go to the website. It’s just on the resources page. You can see which one fits your use case.

DN (35:29):
All those book reports as a kid paid off. Now you’ve, when you hated them as a kid, now you’re like, oh, I totally love doing this as an adult, but you get to dictate that it’s only three sentences. Yeah.

TJ (35:39):
That’s right. Yeah. I think a book report that’s more than three sentences is a waste of time. Although I will say this: Cliffs Notes, not strictly TOS compliant as a high schooler. But Cliff Notes, the Google style now for, you know, leading my team through a book is something that is crucial. So I’m a big fan of those websites. So listen, I wanna pivot here ’cause we’re at the 40 minute mark. You know, again, the takeaway I’m having here is first of all, know what you want. Have some way to check in with your team so that you can build alignment around a focused set of objectives for the second half of the year. I just wanna ask you a pointed question, because I get this question all the time. Like I would say maybe number three question I get is what in the hell does a CFO fractional? Do I wanna ask you that question for your world. Like what, if you could sketch the role of a fractional COO and maybe give us a quick nugget on, if my business looks like this, I might need to consider looking for a guy that does this. Like, what does that look like?

DN (36:34):
Yeah, it’s a really good question. I mean, the term fractional, I think, is thrown around quite a bit, fractional CEO, fractional X, Y, and Z, right? Like it’s a newer way of doing things, you know? So when I think about a fractional COO, I think about it’s really about that transition from big dog operator mentality to systematization, and what a fractional version of anything allows, whether that’s CFO or COO, is for you to get somebody who’s been there before, who has the talent, who has the knowledge, who’s seen it in other businesses, who’s figured out a system that works, but can adapt it to a new environment. You get that person at a fraction of the cost of hiring a CEO straight up or a CFO straight up. Right? And you can then backfill that position because they’re doing the system development and the system creation. And they tend to be people who are really good at building the system, but don’t want to maintain it. Right?

DN (37:28):
So I think about hiring kind of a couple different boxes, like fixers builders and maintainers. And it’s like, there are certain roles in the organization where it’s like, maintainers make sense. Like once the system is in place, you need somebody who’s just good at like, doing that over and over and over again and making that happen. You don’t want a builder in that position. Like you want it to be maintenance, right? But when you don’t have systems or you don’t have a financial strategy, you’re not good at forecasting, like you don’t know how to leverage the resources that you have from a financial perspective, a fractional CFO’s a really great kind of stop gap between nothing and really structured, you know, kind of financial strategy.

DN (38:08):
And I think what’s different there too is, you know, you’re hiring from a fractional perspective, you’re hiring somebody with the experience. But number two is you don’t have to fully commit to it either, but you’re kind of picking somebody who thinks strategically in your organization. And often what I see in small organizations is there’s one strategic thinker and a bunch of doers, right? Like the CEO, the startup founders, like I’ve got this visionary idea. I really wanna do this. And then you have a bunch of people who are good at solving problems or are good at doing the execution. And so the strategy person kind of sits alone, right? And a lot of that’s why they’re CEO groups, right? Like you run one, you’ve got a great one. It’s why there are CEO groups. It’s like, who do I go to for this answer? Like, who do I talk to? Like trouble floats in organizations, so like, who do I go to?

DN (39:00):
It’s like, well, essentially the other thing you’re doing by hiring a fractional person is you’re hiring somebody who is a strategic thinker. Who’s seen a lot of other things who can come in and at the very worst, be a really good thinking partner for you on all the things that you’re dealing with and help you process and make decisions and guide you, but not run the show. Right? So I think fractional is, you know, as a person who’s done fractional, it can be really taxing and really difficult, and it’s a great way to make quick impact in your organization but not commit to a, you know, a full-time person at a really expensive rate long-term that then it’s much harder to get out of. Right?

TJ (39:40):
Right. No, it’s interesting. If you think about something like golf, the most successful pro golfers pay a lot of money for golf coaching and the amateurs pay a lot of money to go to the country club, but they don’t actually get any better. They don’t have an ROI in terms of the quality of their game. And I think it’s like that as a CEO also. You’re gonna reach a point where you’re right in the sense that if it’s nothing more than a sounding board there’s limits to what, if I’m worried, I may not make payroll next week, that’s a bit of an awkward conversation to have with my team, right? At some point I’m gonna need some perspective outside of my team, finding a mastermind or hiring a fractional executive. Because you know, hiring a COO is a $250,000 a year problem. Hiring Dave, who’s been the COO for 10 companies, helped them scale, various issues, may be several thousand dollars a month, but it’s not gonna be $250k a year. You’re not gonna have to give him equity necessarily in the business. And so I think that is the value, and it’s kind of getting a growth mindset as a CEO to say, I’m gonna actually need to be like, LeBron – doesn’t LeBron James spend like $300k a year maintaining his body? Right? It’s like his coaches, trainers –

DN (40:44):

TJ (40:45):
But think about the value of that asset –

DN (40:46):
Yeah. Michael Phelps had six coaches in his prime. He had six, right? It’s like, well, how do you become the best? Right? Well, you act like one, right? Which is like, you recognize that you don’t know everything. Like I have coaches. I coach, and I get coached. Absolutely. ‘Cause if I didn’t, I mean, there’s so many things – like, I mean, I’ve said this lots of times. You know, as an outsider looking into a business, there’s a lot of things that I can see that you can’t see because I’m not in the weeds. I’m not, I can be more objective about what I’m looking at.

DN (41:18):
So the other benefit of a fractional person is they are not clouded by all the stuff that shows up or the social capital, like their job isn’t to like sustain their relationships with everybody in your organization in perpetuity. It’s like, no, my job is to come in and make something happen, and then I get to go, right. So like I get to walk away so I can actually just be really effective, and I don’t have all the baggage that everybody else might carry into that environment. So like, I know for myself, like even creating my website or creating, you know, my own structures and my own processes, like it’s hard to do for myself because I can’t be as objective. I know a lot of small marketing agencies that say the same thing, right? Like they’re marketers, and they have the worst website and the worst marketing, ’cause they’re like, I know how to do it for other people, but it’s really hard to do for me. So I understand –

TJ (42:08):
You make a really point there though. Sorry, you made a quick side point there I wanna make sure that people caught, which is – it’s, the problem, theoretically, if you had like a full-time CFO in your company, which is what I do fractionally, one of the potential problems is that that person’s entire livelihood is tied up in your opinion of them. Right? Like, and so they’re gonna be tempted, even if they’re really, really good executive, they’re gonna be tempted to tell you what you want to hear in the boardroom, because they don’t wanna get canned. And having a fractional person that’s got 28 paychecks or has got 20 paychecks and their reputation for results are the only thing that gets them future customers, you’re gonna find that you’re gonna have people that are gonna treat you more like peers and not like if they don’t tell you the right thing, you’re gonna stomp ’em to death. Because you know, you’re not my only client. You’re not Dave’s only client.

DN (42:57):
So it’s, even if you don’t hire someone fractional, just be aware of that dynamic. The further your company goes, the easier it is for you to be in an echo chamber where people just tell you kind of what you want to hear, which is a really, really quick way to fail. Listen, Dave, I wanna land the old plane here, but hey, if people wanna get ahold of you, if they wanna learn more about the Dave Newell experience, which by the way, I highly recommend, what’s the best way for them to learn more about your outfit?

DN (43:23):
Yeah. A really good way to do it is quite simply to visit theevolvedifference.com. Theevolvedifference.com, yeah, a couple Es. It’s really, you know, there’s a lot of letters in there, but easy to remember, theevolvedifference.com. I don’t do a whole lot on social media. I don’t you know, I’m not on social platforms a whole lot, in part, because in the work that I do, it’s the relationships that matter, right? The kind of, like these types of conversations. So, you know, a really good way to get into this, or to get connected to folks like myself who do the work that I do, is to get to know a few of them and then find your way through. That’s how I think I find the good ones, right? So finding a Tyler Jefcoat, you know, and staying connected to that relationship and then working from there and finding some other things. So as you know, I’m grateful for, you know, the chance that we’ve had to get to know each other and do some shared work together and to be on the podcast. You know, you’re a dynamo at what you do, and I appreciate it a lot.

TJ (44:26):
Thanks. Well, Dave Newell, what we’re gonna do is we’ll make sure we post your email, and I mean, your website, excuse me, and maybe gonna link to your LinkedIn page. If people wanna learn more about what Dave Newell is doing, we’ll make sure you can get ahold of him in the show notes. And here’s what I wanna do. I wanna just take two more minutes. I wanna humanize this a little bit. We talk about strategy, strategic objectives, and other stuff, right, that pops up for business. But bro, you got a family, you do things that give you life and joy that are not just theevolvedifference.com. What is that, man? What is it that keeps you busy, man, outside of work right now?

DN (45:01):
Yeah, actually you know, in business, I kind of refer to myself as a builder. Like I like creating things. And so I live on a small hobby farm in Charlotte, North Carolina. We’ve got seven acres, and we’ve got 30ish animals. We’ve got horses and goats and chickens and cats and dogs and the whole nine yards. And right now what’s giving me absolute joy is I’m building a barn by hand. So, and we’re, and the challenge that we kind of put on our plate is to source all the materials. So you know, I’m building a 44 by 28 square foot or 44 by 28 barn to house the animals. I spend a lot of my time, you know, doing fence posts and fixing stuff on the farm.

DN (45:48):
So I do it, but what I like about it is the tangibility of it. It’s like, I can actually see it. You know, a lot of the fractional or consulting work, it’s like, there’s, it’s less tangible results for a while. Right? So you kind of have to like deal with this lack of resolve for a period of time before all of a sudden it’s like, okay, now we’re starting to see some improvement. What I like about living on the farm is, you know, I can put some walls up on a barn and then the barn is done. And it’s like, that feels really good. So I enjoy that part. Yeah, and then of course I –

TJ (46:17):
By the way, if people out there that are like doing spreadsheet geek for their PPC or whatever it is, I do think that’s actually a really healthy balance, like to find something physical, tangible. Like, it’s amazing as an accountant, to like, mow the lawn. I’m like, wow, my lawn looks great. And I actually did something that actually resulted in an immediate benefit.

DN (46:35):
Yeah, my wife and I, we say weeds look better mowed. Because, you know, we don’t spend a lot of money on the old yard. So we say weeds look better mowed.

TJ (46:46):
Yeah. Amen, brother. Hey, listen. Last segment of each Return on Podcast podcast is the ROP section. And I’m just, you may or may not even have anything here, but what we’re trying to grab is habits, hacks, practices that have given you an unusual amount of traction, an unusual amount of return on investment in your life business, personal, otherwise. Does anything pop into mind that you’re like, man, this has really given me some ROI in my life that people should consider implementing?

DN (47:13):
It’s a really great question. One thing I committed to when I first started my business is five times a month, I am very committed to connecting to somebody in my network and just like connecting to ’em, whether that’s a, Hey man, thinking about you, let’s grab lunch, let’s do whatever. But five times a month, I find somebody who I care about, who I know, who I’ve either done work with or who I just got to meet. And I’m really intentional about fostering those relationships. You know, I mentioned earlier, I don’t do a lot on social media, and part of the reason why I don’t is because in the consulting world, it’s all about who knows you and who you know. And so I’m very intentional about referrals. I’m very intentional about who do I know that know people, and how do I give into those, like how do I pour into those relationships? Like, how do I, you know, do a connection without asking for anything in return?

DN (48:10):
So, you know, I kind of started in 2014, I was like five people a month. Like, that’s enough that, you know, ends up being, you know, 60 things a year that I’m doing that are free-ish depending upon if I take people out to coffee or lunch or whatever, but like, but I always buy. I always, like, I always offer those things. But I’m really committed to five relationship building things a month that aren’t like the client that I’m working on at the time, or aren’t, you know, like the immediate thing that I’m responsible for, but something that could potentially lead to something else.

TJ (48:41):
Yeah. One of my heroes, Tommy Breedlove, says your net worth is your network. Right? And so I do think that having systems and consistency and just like you said, reaching out without an agenda, “Hey man, I’m thinking about you. How’s the thing that you mentioned about your mom, how’s that going? Is everything okay? Is there anything you need?” And kind of like, I was in a BNI group back in my former business. It’s almost like trying to live that, like Givers Gain kind of mentality to be like, if I can just genuinely – which by the way, is so much more fun in life than trying to sell things all the time. If I can just be like, how can I genuinely care about Dave and make his life a little bit better? And you know, lo and behold, good things tend to happen when you do that, right?

DN (49:19):
Yeah, for sure. Well, and you know, like you said, you know, there’s a, like, I gain so much from those, like I get little nuggets of things just because I’m talking to somebody who isn’t involved in, like, who isn’t asking something of me. Right? Like, it’s like, no, man, how’s it going? What are you thinking about these days? Like, one of the questions I really love in those conversations, like, hey, what, what’s a burning thing that you’re working on in the next two weeks? And it like just makes it real and tangible, and like, I find a lot of connections with people and that. Like, oh, that’s interesting. I’m thinking about that too, or I’ve thought about that in the past. I wonder if, you know, we could talk more about that thing, right? It’s like, what are you learning about that thing that you’re really fired up about? But now you’re talking about passion or you’re talking about like work, that’s meaningful to each other. There’s almost always an inroad there. There’s almost always a way to find like, oh, that’s really interesting. Tell me more about that. Or I know this person over here who’s doing that thing. You guys should connect. Right? But that’s a really juicy, fun question in those meetings of like, hey, what’s just something that’s burning for you in the next two weeks that you’re really focused on?

TJ (50:18):
Love it.

DN (50:18):
That’s a good connection spot.

TJ (50:20):
Have a good juicy connection question and four to six, maybe pick the number five, just reach outs per month. I think that’s a really great hack, man. I really appreciate it. And Dave Newell, I meant this at the intro. You’re the man. I love working with you. You’re a smart guy. I love being around smart guys. This has been a long episode, ’cause it’s been rich. Friends, it is midyear planning. Do not neglect your strategic planning, do not neglect getting that input from your team so that you can make sure you’re aligned and that you’re heading in a direction instead of just putting out fires for the rest of your entrepreneurial journey. If you’re at a point where you need a fractional help, a strategic partner, I do highly recommend Dave. He does really good work.

TJ (51:01):
He’s helped several of our kind of like, I think we have some contacts in common. And so with that, let me just end the show here. Dave, you’re the man, appreciate you buddy. And for anyone who made it here too. Oh, you got it man. And anybody who’s made it 56 minutes into this pod, thank you. Thank you very much. I really mean that very much.

DN (51:20):
Yeah. I echo that for sure. Yeah.

TJ (51:23):
You know, you’re never gonna get that hour of your life back. Hopefully you listen to this at like 1.5 speed and there’s a low enough redneck factor in the voice here that you can pick it up. But listen, Return on Podcast. I’m Tyler Jefcoat. If this content has served you, man, I’d really appreciate it if you shared it and maybe subscribe to our channels. Again, we’ll send you in the show notes the way to get ahold of Dave. But until next week, man, I hope you guys kill it. Appreciate you being with us. Take care.

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