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During Memorial Day at Lowe's Shop Household must haves for less. Save $80 on the Char Broil Performance Series 4 Burner Grill to chef up something special plus get up to 45% off. Select major appliances to keep things fresh. Our best lineup is here at Lowe's Lowes. We help you save valid through 527 while supplies last selection varies by location. See Lowes.com for details.
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Visit your nearby Lowes
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Great companies aren't built on average talent in private equity backed high growth businesses, the right operator changes everything. Onward Headhunting partners with founders, operators and investors to build elite finance strategy and operations teams. From early hires to exit ready leadership, we deliver the talent that drives outcomes. If you are scaling or transacting, go onward visit onward headhunting.com or find us on LinkedIn to learn more.
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This is Scott Becker with the Becker Business and the Becker Private Equity Podcast. Today's discussion is Chief Executive Officers and leadership. So what we're going to do today is go through eight different areas of leadership and how we look at leadership for CEOs, for founders, and more. Hopefully you'll enjoy this. Would love your feedback. You can always reach me at 773-766-5322. If you're the first person to text us and tell us your thoughts and comments on this talk, we'll send you a $100 gift certificate as well from Amazon. So thank you. So here's the thoughts we'll talk about. First, the best leaders do four things. One, they deliver results. Two, they develop and grow other leaders. Third, they provide great clarity as to what the business is focused on, what you're trying to do. And fourth, they leave the organization better shape than they found it, so it thrives when they're gone. Two of the great examples of this are Steve Jobs and Bill Gates. Whether you like them or hate them, Apple has thrived since Steve Jobs left the building. Microsoft also has just done tremendously since Bill Gates was retired from leadership there. And the same is true of many other companies where the companies really thrive when they're gone. It's not just based on their energy, it's based on what they developed, the leaders, the other leaders they developed, and the platform. They developed a lot more than just themselves, even though those were iconoclastic leaders and so many like them. The second thing we talk about often is what we call the three stages in the evolution of a leader. The first stage is someone who does everything themselves. They don't delegate. They really are sort of the cook bottle Washer. They do sort of everything. That's stage one. Stage two is they hire and they start to build a team. But they're still the limiting step on so many things. Here a business can get to 2x improvement through some leverage, but that leverage is very minimal because it's still very reliant upon the CEOs thinking, leadership drive and more. The third stage in the evolution of a leader or founder is this, where they've built a team and they are no longer the limiting step. They've built a lot of other leaders that are better than him or herself. They're no longer the limiting step on encouraging acceleration and the control so the business can move forward in multiple different areas without them being sort of the linchpin on every single one of them, or the core point of decision or the core point of movement on every one of them. Rather, they've got leaders running different parts of the organization, really driving a lot of for further and a lot farther. The third concept we talk about often are the five stages of a business. And we look at this constantly from people that have an idea. And ideas are almost meaningless. Not totally, but almost meaningless. The, the second stage is someone has actually got actual products or services, they've moved to that, that whole next level of, of a business and that's not necessarily something or another. This could still be an advanced hobby versus a real business. I always tell people, don't get confused with talking to your friends about whether your idea or product is good. You actually need to talk to customers and see if they want it or not and whether they'll buy it or not. The third start of a business is they have some revenues, someone's actually paying for their service and product and the way somebody actually likes it, that they're actually fitting a product market fit where somebody wants what they're doing. And we'll talk about product market fit in a few minutes too. So that's the third stage. The fourth stage is it's substantial enough that develops real cash flow and real profit. That's the fourth stage of a business. And finally, fifth is this concept of scale. Do you have something that's repeatable, that's scalable, that you've got both the great business, the great product and the right team to scale and grow it? Can you grow beyond just yourselves? Can you get to that next evolution of leader and a business to where you could scale something, not just have it be so linear that every single time you put a bit of effort, that's what it takes to get the business to move. Rather, you're able to scale to a much larger direction, more exponential than just linear, linear. The fourth thing we talk about, and we think it's so centric to everything that we do, is this concept of building out teams. We talk about this as follows and we'll give you seven quick points on this. First, sorting out the core team, the starting team. You're always going to have hopefully great contributors, true leaders and those that shouldn't be there. And unfortunately or fortunately, it's imperative on a leader, a CEO, a founder, to sort those people out. The second concept in building teams is you have to recognize and develop great people. I don't mean recognize like oh my God, you're great. Well, you do have to do that too, but more along the lines of you have to build a spot talent and double down on and retain that talent for the long run. If you're going to build something substantial, you need to know who your ride or die people are, who the most important people in your organization need to find spots with them. You need to accelerate their growth. You need to help them find a place to make them thrive and keep on double down on your best people. The third concept we think about is what we call gratitude is critical. You got to love your people that are doing the Lord's work for your business or your organization. You have to love them. If you're not thankful to them, you probably shouldn't be in leadership. And it's got to be real, it's got to be genuine and you got to be sincerely thankful and grateful to your great people. It's part of building the right culture to keep people around for the long run and to really enjoy it in a thrive thrive culture. The fourth concept we talk about is what we talk about is loving your 90 percenters. And this is the concept that with people that do 90% of their job right, you better find a way to love them and not beat them up on that other 5 to 10% they don't do as well. The fifth thing we talk about is talent begets talent. People that are hardworking, that are smart, want to be around other people that are hardworking and smart. And so how do you grow that talent? So you've got lots of people sort of, you know that, that are thriving, that view themselves as like minded, motivated, smart, intelligent, working for, forward towards something. But talent begets talent. You can't put horrendous talent with good talent and have good talent be happy other. Similarly, if you have lots of horrendous talent around, they start to drag everybody down. Sixth, we're a big believer, what we call stacking talent. You put your most talented people on your most important areas, your most important clients. You keep on sticking with that. The seventh concept we think about in terms of teams and we think about this in customers as well, is you always think about and I've got a great person, I've got a great leader and I want more. I've got a great customer and I want more. It can't be catch and release. It's got to be keeping and adding more people. The fifth concept we talk about, we've talked about so far. The best leaders do four things. The three stages, the evolution of a leader, the five stages of business. We've talked about some of the keys on building teams. The next thing we'll talk about is product market fit. And again, this goes back. Some of these things will repeat. You'll learn in different ways. But does somebody really want what are you are selling? Is there true demand for do people want to buy it? Don't ask your friends if it's a great idea unless your friends need it and want to buy it, because most of your friends will say, oh, that's good or that's bad and it's really irrelevant. What really counts is, do you have people that actually want to buy what you are selling? The next thing we talk about is can you define your ideal customer for your business? Are you clear about that? If you're not clear about that, it's very hard to really do business. It's really just shooting and praying and spraying if you don't know who you're really targeting. Next concept we talk about is when we define niches, we define what we're trying to do. Can you win in an area and is it worth winning in? We talk about this constantly. You know, some areas you could win in, but there's not money in them to pay your team and grow a business. Other areas you can't win in because they're so competitive and you're competing against the best and the brightest and everything. And what we think about a lot is constantly looking at, can you win in something and is it worth winning in? So those are several thoughts on product. Market fit usually takes a lot of testing. It takes a lot of working with, you know, outbound sales and talking to people to figure out whether people really want. The other thing we talk about is this concept of commercializing early. We see too many businesses get so stuck up in dealing with their product, doing what they're trying to build that they don't do enough effort to really talk to customers early and really try and commercialize early. But we think knowing do people really want this or not want it is so, so important. The sixth thing we'll talk about today is what we call aligning people around key objectives. What we try and tell people is that you need to understand your most important business areas. What does the company have to be great at? There's nothing worse than a large organization that's not really known for being great at something. So really know. What do you have to be great at? Then we talk about knowing who are your best leaders and your best performers and trying to align your very best performers and your very best people around the most important areas of the business. We're a huge believer when we talk about this a little bit in sorting out teams. And teams is stacking your best people in your most important areas and making sure the company is absolutely great in those areas. The worst thing I often see is lots of great people spread out amongst lots of different service areas. I'd much rather decide what are the most important things you're doing and stack your best people around those areas versus being all over the place. The next thing we talk about here is because most companies are going to have a limited number of great, great people. It's can you outsource things that are not absolutely critical, that aren't your most important areas, or that can be done better by other people? Are there areas that you could outsource? So that's the sixth concept. Today we talked about sorting out teams, how we judge leaders, aligning sort of objectives. The seventh thing we'll talk about is the best leaders really know their own business very well and they're able to a great extent, to sort out a lot of the noise that's out there. So we think about what do you as a business have to be great at? So in one of my businesses, I have to be absolutely great at reaching CEOs and being in front of CEOs. Who are your best people? Do you have the right people? Who are your best people? And making sure that your best people are stacked on your most important objectives. Who are your best customers that you better spend a disproportionate amount of time. And we talk about the word, hearing your customers, knowing who your best customers are and really making sure they're being taken great care of. The next thing we talk about in knowing your own business really well is knowing your high revenue, your high profit areas. And it's similar to what we've talked about all the way through is really focusing on those areas. Finally, you have to know, what are your two to three or five key performance metrics? There's nothing worse than a business that has 100 key performance metrics. They don't really know what their key performance metrics are. And then also, where are revenues and expenses coming from? And lastly, what should you abandon or not do? So that's another concept we talk about. What should a business not bother with? You know, should I should not bother with people that pay me $500 an episode for a podcast? It just you can't. I can't support a business and a team doing that. What should you not do? What absolutely should you not do? What should you do? What should you not do? You know, and where's that Venn diagram of what you love doing, what you do great at, and where customers want what you're doing. So again, those are seven of our favorite CEO and business leadership concepts. We'll talk on another podcast about six of our favorite concepts. And a lot of those deal with sort of, you know, what gives you a stomachache and what doesn't, and learning how to assess and judge that and minimize that. A whole different discussion. In any event, thank you for listening to the Becke business and the Becker Private Equity Podcast. Thank you to our wonderful producer Chanel Bunger and to Molly Gamble, the co author of my latest book Building Great Businesses. Thank you very, very much for listening.
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During Memorial Day at Lowe's Shop Household must haves for less save 80 on a char broil performance series 4 burner grill to chef up something special plus get up to 45% off select minutes major appliances to keep things fresh, our best lineup is here at Lowe's Lowe's. We help you save valid through 527 while supplies last selection varies by location. See lowe's.com for details.
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Visit your nearby Lowe's.