← Second in Command: The Chief Behind the Chief with Cameron Herold
Second in Command: The Chief Behind the Chief with Cameron Herold
Ep. 565 - D1 Training COO Dan Murphy - How to Scale Smarter and Avoid Leadership Burnout
00:43:00
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- [00:00]
Dan Murphy
I think our team has learned that dynamic that, you know, ultimately it comes back to me really is like what is the priority? Right? And are we shifting? Because I never want to be that rigid or have that much of a bureaucracy where we can't be nimble at the speed that we're moving. I think I've benefited from being in a very bureaucratic environment in the army and a very stiff and and rigid protocol. It helps it provide structure, but there's definitely when you're trying to be a fast moving company, you got to have the ability to make, you know, decisions in a little faster timeframe.
- [00:36]
Cameron Herold
Welcome to the Second in Command podcast produced by the COO alliance and brought to you by its founder, Cameron Herold. In the second in command podcast, we talk to top COOs who share the insights, strategies and tactics that made them the chief behind the chief. And now here's your co host, former COO of a multi eight figure remote company and alumni member of the COO Alliance, Savannah Brewer.
- [01:05]
Savannah Brewer
Today's guest is Dan Murphy, the chief operating officer of D1 Training, a National Fitness franchise, redefining what it means to train like an athlete. Dan's journey started at West Point where he captained the soccer team before serving in the US Army. After earning his MBA from Vanderbilt, he joined D1 as one of its early members and soon partnered with the founder Will to scale the company from a single facility to a multimillion dollar franchise network all across the country. In this episode, Dan shares how to know you're in the right vehicle to win, how to decide when to outsource versus bring things in house within a growing franchise and the system he uses to give every team member clear metrics that drive accountability and results. He also highlights the importance of community and why it's one of the heartbeats of D1 success. Also, at the end of this episode, if you're like me, you are going to want to check out one of these locations. Sounds like I am going to be going through a really hard workout soon and maybe you will join me. So let's go ahead and get started with the episode. We are live with Dan. Welcome to the show.
- [02:10]
Dan Murphy
Thanks for having me.
- [02:11]
Savannah Brewer
Of course. Yeah, we were jamming about Nashville, Tennessee.
- [02:16]
Dan Murphy
Greatest town. I think the fastest growing for sure. But in my opinion, definitely the greatest downing the US right now for sure.
- [02:23]
Savannah Brewer
Other than the long wait times for the restaurants, we were comparing notes from Austin vs Nashville. Which restaurants have the longer wait time or. Or the need to book a reservation and wait earlier.
- [02:37]
Dan Murphy
I, I think we got Your beat mainly because of the out of towners that come in around here.
- [02:40]
Savannah Brewer
That's true. Yeah. It's crazy. Well also what's crazy is growing really quickly and just the business of franchise and live brick and mortar businesses.
- [02:55]
Dan Murphy
Yeah.
- [02:55]
Savannah Brewer
Which we're going to talk about today. So I'm excited to do that. Let's start off, just give us a little bit of an overview of D1 training. What do you do and who do you serve?
- [03:04]
Dan Murphy
Yeah, D1 training is. I think we're right now, I could be wrong but we are the, the largest franchisor of athletic based training in the country. So the company though, believe it or not, is 25, almost 26 years old. So I kind of backtrack and give you that history. Was founded by our CEO currently a guy named Will Bartholomew. Played division one ball at Tennessee. His claim to fame they won the national championship in 98 and he was on his way to becoming a pro at for the Denver Broncos. And while he was at camp he blew out his knee and doing that he went back to Nashville. Didn't know if he was going to be able to play or not. But he was trying to rehab to get back in the league. Realized there really wasn't a place like he had at Tennessee that could allow for him, you know, to get his, his workouts in, get his therapy re rehabilitation as well as his field work that he needed. And so he kind of created D1 out of its his own self interest to start with. So he was kind of a local hometown hero, just, you know, built something. Instead of going to his therapist and then you know, driving over to the high school gym and then going over to the field, he built all that stuff under one roof. And that's how we started 2,000 square feet back in the day. And I was one of the first members actually as an adult because it was really focused on kids. So again the concept is to train like an athlete. And with that it's bigger, faster, stronger. We look at it from five core tenants, which is your dynamic warmup, your core and conditioning, your strength, your cool down as well. All those things are kind of covered the same way they would be done in a, in a Division 1 environment. And so it's, it's unique. And then in a world where there's a lot of fast growing boutique fitness brands, we fit really nicely into that youth athletic space as well as adults that want to train that way. We grew like that for about a good 10, almost 15 years of the where we would just slowly partner with professional athletes. Peyton Manning, Tim Tebow, Chris Paul are some notable athletes that are partners of ours that are investors in the business. And then we'd also at the time partner with physicians to manage their therapy. So we had two different businesses under that same roof. And in 2017 we decided after exiting and selling the therapy business that we really love the training business, we love the brand. That's what we were left with. And we wanted to go full in on like a full planning flags across the nation knowing that every market really needed this, this service. And so we kind of changed the model, right? That was a pivot point for us where they were joint ventures with those athletes and the, the physicians were like, how do we want to do this in a way that makes the most sense in the, in the community where there's local engaged owners that understand their community and want have the same passion that we do about bringing it to their community. And so franchising became a natural business model to pivot to. We did that in 2017, 2018. Kind of took our time to kind of get our ducks and row sops, you know, file all the necessary franchise disclosure docum and then went on a tear. And so we are currently sitting over about 160 units open across probably 30, 35 states that we cover. And you know, we're just, that's just the beginning. I mean we've got more than 100 or so that are in development. We'll probably be opening anywhere between 50 to 70 a year for the next few years. And we're just, you know, at this point, I got a tiger by the tail, just wanting to make sure we do it well, do it with the right partners, that's just as important. And yeah, we're on a mission. I mean we want to be the place for the athlete. We feel like every community really needs what we're bringing. And again, that's so key to have the right partners to do that.
- [06:46]
Savannah Brewer
What a cool story. So just to clarify, the ideal client who's coming in is that a high school student that's wanting to become a pro athlete or it's for everybody kind of using that D1 training as the tool.
- [07:00]
Dan Murphy
Great question. You think the avatar is that 18 year old that's about to go, you know, play Division 1 sports somewhere? Truly, when you look at the funnel and who we impact the most, it's we, we start as young as seven years old. So we have a group that we call our rookies 7 to 11. We have a 12 to 14 age group as our developmental, that's the middle school kids and then the 15, 18's our prep. When you look at the funnel, it looks like 7 to 11, 12 to 14, 15 to 18. As kids, you know, moving through their time in athletics, whether they decide to stay with it or, you know, you see kids getting pulled in multiple directions. So the volume of, of athletes at the 7 to 11, 12 to 14 level is really where we specialize. And it's really a very underserved market. A lot of these kids are expected to, you know, show up to their high school knowing how to lift correctly, you know, form, things like that. And we don't, you know, put seven year olds under the rack or any weight or anything, but we do teach them proper mechanics and you can do that with, you know, sticks in some cases just like a squat form or whatever it is. So that, that's really our niche on the youth side, but then the adult side as well. People understand what it means to train like a Division 1 athlete. They know that it's kind of an aspirational pinnacle type archetype. So. And a lot of these guys might have, might have played sports or girls might have played sports in college and want to train that way. That was the attraction for me was I felt like it was something that was missing then, you know, going to the gym every day. I didn't have a group that was holding me accountable, you know, that was going to push me and that I was on kind of a cycle, an eight week cycle where I was actually seeing results. That was one probably the thing I missed the most of my time, you know, playing, playing college sports as well as my time in the military because, you know, that was like a cornerstone to the, to the culture. So there's a lot of people that really identify there and that's our adult side. When you combine the two, it really makes for a nice business that, you know, again, impacts the community not only from a athletic perspective, but from a character perspective. You know, they learn all the things that come with training and dedication, accountability to your partners, perseverance, things like that.
- [08:58]
Savannah Brewer
Cool. So there's like a group aspect to it.
- [09:01]
Dan Murphy
Absolutely. It's, it's pretty much small group private training. We do as individualized as one on one training all the way up to our small. We have our group classes can hold anywhere between, you know, we recommend between 7 and 18. They can go as high as 25, 26. But that's kind of the sweet spot for the classes.
- [09:23]
Savannah Brewer
Very cool. All right. I can see why this would be such a good niche because, I mean, literally just last week I was watching this three hour video from this guy who specifically works with gymnasts as training to make sure that they have the correct mechanics. I mean, I was a gymnast from age 2 until 13, and I have every day chronic back pain, knee pain, wrist.
- [09:48]
Dan Murphy
Yep.
- [09:49]
Savannah Brewer
And I'm like, wow. No one taught me proper form other than like when you're doing flips and your things on the beam. But like, in terms of our workouts or even the way that I would pound on my spine, I was watching this YouTube video. I'm like, no one taught me any of this. And to have a little 10 year old with 12 times the amount of body weight on your vertebrae is insane to not be thinking about. Yeah. How to do this so that they're set up for success long term. Yeah. So I think it's really important, the work that you guys are doing really well.
- [10:20]
Dan Murphy
Thank you. We agree.
- [10:22]
Savannah Brewer
Yeah. That. Okay, so tell me a little bit about your background, because you mentioned the military. How did you get involved with this company?
- [10:29]
Dan Murphy
Yeah. So I played Division 1 sports myself. I was a D1 athlete. I went to West Point. I was a soccer player. To my reference earlier about being box to box. And that was a great experience for me. Did my five years of service in the military and I moved here to Nashville actually for grad school. But then, you know, that's when I kind of transitioned and met Will when he was starting this thing up and became a member at the. At the first T1. And then the rest is, you know, I've already kind of alluded to. So I knew he was onto something. It was one unit at the time. And that, like, as far as something that I wanted to be a part of, I didn't know it would take off to the. To the level that it has. But I'm obviously not surprised that the culture that's been built. But, you know, for me it was, man, you really got something that Nobody really hits. CrossFit at the time was this was 2004, 2005 when we met. That at the time was probably the closest thing to, you know, organized around what. What we were doing. And they did a great job building on community as well, but, you know, nothing was really serving the athlete to the level that we saw this becoming. And then as we kind of grow, have been growing now, you know, we. Every market we go into, you know, the franchisees that are coming to us are saying, you know, man, this does not exist. This is, you Know, to your point just a minute ago, is. Is really needed and. And they have a real passion for it. That's. That's another thing that's really cool about our business is the owners that we bring in, you know, they don't view this as your typical franchise opportunity where it might just be like a gas station or a Wendy's, and no offense to either one of those are probably great, great investments for people. But these. This is something that they typically have a unique passion for. They want to give back, whether they're a coach in the community themselves, or they. Maybe it's something that's driven by having kids, that they're seeing the impact that sports has had on their lives and they want to, you know, continue and foster that, either selfishly for their kids, but also knowing that it's something that they can get behind. So the mission really is important on top of everything else, when we're looking at franchisees.
- [12:25]
Savannah Brewer
Well, thank you for your service.
- [12:27]
Dan Murphy
Oh, thank you.
- [12:28]
Savannah Brewer
Yeah. When you said that you went from the military and then you ended up joining this, and you. You felt the spark of what was possible. You didn't know that it would maybe be this big, but you knew that there was something there. There's probably someone listening to this episode that might be thinking, am I in the right vehicle or should I be looking for something else? How do you know? Or what were those things for you where you were able to identify that this was going to be something big? And what advice would you give to someone who's looking for maybe the right vehicle? As a coo?
- [13:02]
Dan Murphy
Yeah, you know, I've listened to a lot of, you know, when I was younger, listen, a lot of people like their investment strategies, whether it's about picking stocks to getting involved in business, and everything typically centers around just what you're interested in, you know, first and foremost. And that's where it, I think, probably resonated the most to be direct about your question around, you know, why did I think it was just. I knew I loved training. I knew everything about the. That I. All the benefits that I got from training, whether it was physical and just, you know, how I felt or mental, specifically. And just like, I mean, as you get older, training is more about clearing your head than it is about trying to get, you know, physical gains and dealing with stress. And, you know, there's a spiritual component to it. So I think, you know, I was just super passionate about that and know that there's people out there that, you know, I don't feel the Same way, you know, there has to be. And I want to find that tribe, right? I want to build that tribe across the country. Not just do something that, you know, might be great to further my family, but, you know, if it's done right, it can be both. Right? And so I think that was. And I really, you know, I fell in love with the vision that Will painted, right? Because I think his story of, of, you know, kind of the adversity he had to go through, but understanding, like, we need to bring this to, to the masses at a. At a level that they can get involved in way earlier and learn again, proper form, things like that, and maybe would have contributed to, you know, less injury down the line or at least if they're not able to hit that pinnacle level, they're at least able to get the benefits from, not just physically, but, you know, all the things that we know through gymnastics and soccer and football that you learn about yourself and, you know, perseverance, grit, all those sorts of things.
- [14:38]
Savannah Brewer
How did this evolve? So you mentioned a little bit about being one model and then switching, I think you said like seven, eight years ago to.
- [14:48]
Dan Murphy
That's right.
- [14:48]
Savannah Brewer
Can you clarify a little bit of that difference of the model switch and what made you guys decide to do that?
- [14:53]
Dan Murphy
For sure. So when, when we started, it was two different businesses under one roof. It was the training business itself and a physical therapy business again, to mimic what was happening at the Division 1 level across universities across the country. And we grew that we had to be very specific about our partnerships. They could, you know, they. We had to have a physician partner or orthopedic or a hospital system that wanted to be involved. And then we looked at professional athlete owners because they understood this business. And, you know, we had connections through Will's time at at Tennessee. He was actually Peyton Manning's fullback, believe it or not. And Peyton was one of the first investors in our business and opened a couple of these facilities so that, you know, between those two, we were like, hey, we can do this across the country. But we also were involved in the real estate. We were building large facilities, like 20,000 square foot field houses. And that was a slow but deliberate grind, right? Where from 2005 to about 2016, we had, in the low 20s in terms of units open, bigger facilities. They usually had medical office components to it. So it took a little bit longer. And as we sold that business, because we had a. We had a partner, a group called Exos, that bought our therapy business in 2017, you know, we, again, it left Us in a position where it's like we still have this training business that we love. It's kind of where our passion was to begin with. How could we scale it, you know, how could we scale it where the one thing we loved our physician partners, we love our athlete partners, but they were passive owners and you know, they had day jobs, they were running physician groups and they were running, they're trying to play professional sports. And so you don't get the engagement. This is very much a community based business that you have to have owners that understand the community, are engaged in it and want to be a part of it and you know, can really sell the mission and the vision to the, to the community. So we wanted to make sure that that's how we scaled going forward with those types of partners. And franchising fit really nicely. So we scaled the business down as well because you really can't put 160 of these out, you know, in 20,000 square feet, especially in today's market, in any capacity, with any sort of speed. So we've scaled them all down to about 4,500 5,000 square foot spaces that mimic more like a boutique fitness square footage. And we still have the weights, but the, the training and the, you know, all the modalities were essentially adopted to, to fit within that space and run within a class that you can get done within an hour that, you know, you still get all the, the same benefits. So that's how we decided to grow it. And then from there, you know, we've been, you started off with a team about maybe four or five and outsource like you do in franchising. We outsourced our development arm, our sales and development arm, we outsourced our real estate and development arm, we outsourced even accounting and all that kind of stuff to start with. And then as we got scale, you know, we strategically kind of brought those things in house because they become a benefit you really want to make sure happens as you grow is that it becomes not just an advantage from our knowledge of how to operate the business and for a potential franchisee, but there's a, you know, a tangible cost savings. And so when we, a good example, just bringing our construction project management in house in the last year, you know, you're able to drop a considerable amount just in that management fee because we're not having to, you know, go through a third party. And on top of that we can internalize a lot of the processes to find the savings, you know, cost savings maybe in, in that we can apply everywhere in terms of the build out itself. So that's been just a discovery process in the last year that is already paying dividends for the system but also for us because we, you know, managing it all in house.
- [18:26]
Savannah Brewer
So if I heard you correctly, as you guys were scaling, you just outsourced as many things as possible, which seems like that's common in the franchise space.
- [18:34]
Dan Murphy
It sure is.
- [18:35]
Savannah Brewer
And then once you got to maybe a little bit more stable point, then you're bringing that in to reduce costs and then also see what were they doing that you can also do in other parts of the business.
- [18:46]
Dan Murphy
That's right. And it also helps the franchisor grow, you know, internally. If we're, you know, it's franchisees that they're going to have to spend that money. Right. If they can spend that money with us and we can do it A cheaper, B better and C, in partnership, for lack of a better term, it's the proverbial win win for, for them. And so you know, but you have to get to certain scale. We have to have, you know, certain amount of, you know, known locations opening in order to have a team we can invest in. Right. And bring in the right experts. Because originally again, I think, you know, Will and I are kind of more entrepreneurial focused. We're both, you know, again feel like a jack of many trades. But as we grew we wanted, you know, we knew, we knew enough about development, we knew enough about physical therapy and management and all this sort of stuff. We needed to bring in experts in each division. So that also was the added benefit is we could go after somebody who has developed, you know, 100 units in a year and that can bring systems to us that we, we haven't even started to, you know, to implement. And that speed and that nexus kind of really helps with the growth. So you know, because franchisees too look at the growth with a double edge. They look at it like that's great. I get, you know, more brand awareness as we get plant more flags across the country. But they also not always, but can see it as like, okay, are you growing for the sake of growing? You know, are you focused on, you know, continual refinement of the model as specifically in fitness, you know, it's fickle, there's changes, there's a lot of fads. We know D1 is not just because people always be training like top tier athletes. You know, the modalities may change but the concept of training like a Division 1 athlete is not something that, you know, comes and goes like, you know, a rowing workout or a treadmill only workout, that kind of stuff.
- [20:32]
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- [21:34]
Savannah Brewer
What have been some of the highlights since changing the model, seeing this rapid growth? What have been those big wins for you guys?
- [21:42]
Dan Murphy
Yeah, there's so many. But the ones that stick out to me specifically, I think are as we built this ecosystem of franchisees, you know, we learn so much from the field. And so when you bring in guys and girls and they've run other businesses, they might be franchisees of other concepts. You know, we have a really kind of collaborative culture that way where we give them a wide enough, you know, guardrails, where it's like, hey, of course you got to follow the brand standard. Of course you, you know, these are the programming guidelines. But as you know, different things that they might do from community engagement, let's say, or some marketing things that they might have tried. We have a collaborative advisory council that, you know, okay, this works. And now we have. The beauty of having 160 locations is you can test this over a broader data set and really understand, okay, let's refine this. It worked really well here. It didn't work as well here. Why? And again, the challenge is always speed. Right now because we're just opening so many and, you know, getting so much data that can be synthesized that accurately. But I really love our process now with franchisees and that it's more collaborative than you would probably see in most systems. And that's again because we're delivering an experience, not just a, you know, a product like a cookie or a pizza or a chicken sandwich, you know, we're, it's very much about the quality of the instruction. It's very much about what that member actually feels when they're, they're training with us. So it's really important that we, you know, are constantly getting the right feedback from our system.
- [23:14]
Savannah Brewer
What's been one of those key learnings over the last year where you're like, this is something that's going to change the game for us or even just in your kind of day to day CEO position, what's been one thing you've learned recently?
- [23:28]
Dan Murphy
I think, you know, we've really, really learned a lot about the ground game at the local level. And I mean, you know, because so much of what happens now is over social media in terms of advertising and, and you know, how we acquire customers, I think we've really learned and I'm going, you know, again to the, the discussions we're having with, you know, the franchisees. The advisory council that we have is like how to really change that in markets where they do like community activations that really work. And so it just brings us back to like we as a team are sitting and constantly trying to look at the, the broader data set of, of return, how the market is responding to our, you know, this ad versus this ad, the AB testing and all that sort of stuff. But you can lose, you know, the, the connection to, okay, what really draws these people or keeps these people and in the business and it's the relationship they have at that local level with that staff, with that owner, you know, with their community that they're building. Like members are just as important as coaches. Right. You can have a toxic culture of toxic members and that, you know, creates a bad experience for anybody coming in there. So we really, you know, continue to focus that way and wanting to get that member feedback. I think is that I'm, as we're looking into 2026, that's something that we're, we're leaning really heavily into our franchisee advisory council.
- [24:48]
Savannah Brewer
Nice. Are there other pieces of key metrics or data that you look at every single day that you just constantly have your finger on the pulse of? And what are those?
- [24:59]
Dan Murphy
Oh for sure. I mean we are very data driven and again I mentioned the fact that the beauty is we have so many data points to, to test it over. But you know, when you look at our funnel of new franchisees, our process is very deliberate in how we, you know, do our discovery process to our validation of those owners to once they're in the system, how we do site selection and Facility development. We have a, you know, a, a robust analytics system that helps us pick and mold and decide what territories they get and then what real estate within those territories to actually select. We score that way as well to our training and operational readiness. You know, we break down every component from not just lead generation of like somebody's inquiring about D1 but you know, when they inquire how speed to contact, how fast are we getting them in there, what are those ratios, what should they be? You know, as far as getting a lead actually show up is it's one thing to get them, it's another thing to get them to actually show up. And then the conversion and then the, the what we call the graduation through our system meaning we upsell or you know, keep them with and retain them within the system. All those metrics along the way. We have KPIs for very big on everyone on my team can't even in finance they can't have just I'm showing up and doing my job. We've got to be able to measure them to those specific KPIs. So anytime we're creating a new position or anything, that's usually the conversation myself and our CEO have is okay, what's their number? Because that's going to be, you know, ultimately what we evaluate them on beyond our core values is are they having success when it comes to the measurement of that number. And then it can be objective and not just effort based because a lot of times in a as fast moving as we are, you can get lost. And man these, we have a lot of good people doing good things and working really hard. But are they moving the needle? And that's always the hard conversation I think that I have to have with with our leaders is like I know you're working but this is, you know, if we're not hitting these numbers, we've got to make changes. And I think it's really objective that way too. We can have an emotional conversation when we get there.
- [27:04]
Savannah Brewer
Yeah, some of those conversations can be hard. Yeah, for sure. How do you think about those conversations? Someone on your team's working really hard. They're super bought into the mission, but they're just not hitting their number. How do you handle that?
- [27:17]
Dan Murphy
Yeah, I mean want to be as collaborative as possible. I think, you know, I'm very sensitive to the overall, you know, combination of egos that we have at our, at our leadership team and that we have. I mean I, I have a very young team in comparison probably to most franchisors But I have one of the best teams in terms of talent. And, you know, they are heavily invested, you know, in their own success. Both they, you know, everybody's very, very driven to that. That would be an understatement to say that. So what I have to do too is really check my own ego before having those conversations. Meaning this is not about what I want out of it. It's really to try to understand what, you know, where we can help them, like what resources. Like, usually the question is asked is like, money's not an issue. How would you solve this problem? And it forces them to take really any excuse out of, you know, what they currently are facing. And they're facing a lot of constraints. I mean, as fast as we're moving, it's always with. We could always have a bigger budget. You know, as fast as we're moving, we can. There's always something different, more people. We could always throw bodies at a problem. And we have in the past. Right. But asking that question, making them really articulate. Okay, I would go about it this way. Then it's on me to really bring that and, and you know, okay, how can we solve this? Maybe go to the finance with that, maybe go to our board with it. Like, this is something we need to look at and invest in. That's usually how it works in a kind of a broad based overview, but it just makes it very objective and takes, you know, I always look at it as like everybody shows up wanting to do well. There's not a single person that's trying to get over. I mean, even people that you assume are like, trying to get over, they're really not. They wake up like, hey, I want to do good today. And you got to believe that. And if you don't, then you really shouldn't be in the business or shouldn't be in the position, you know, so take all that. Like, yes, they could do it differently, but, you know, they're all looking to win. Everybody get. Loves to be part, specifically in our group. Loves to win, loves being on a team that wins.
- [29:15]
Savannah Brewer
Speaking of hard things, what have been some of the hardest pieces for you as a coo?
- [29:23]
Dan Murphy
I think managing those egos can be difficult at times. I would assume in this conversation you have with COOs, that maybe the hardest conversations they can have is with the owner, or not the owner, but the CEO in this case. I don't find them challenging. I mean, one of the things that I've mentioned, Will and I've known each other for 20 years and I was A member before and we were friends before I went and worked with him. He has a great talent. You know, he is a visionary. Like he, he really sees what D1 should be in the market, you know, and what the potential we have. And I want him to be able to have that freedom, that unbridled freedom to, you know, really dream about what it should be and could be because that's where I think he's really good. It's about distilling those ideas and making sure they don't become distractions to the, the current mission that we're on. That's the challenge that, that's the hard part. And sometimes, you know, he'll get very passionate and want to go directly to somebody. It's still good because I think, I think our team has learned that dynamic that you know, ultimately it comes back to me really is like, hey, then what is the priority? Right. And then are we shifting? Because I never want to be that rigid or have that much of a bureaucracy where we can't be nimble at the speed that we're moving. I think I've benefited from being in the very bureaucratic environment in the army and a very, you know, stiff and, and rigid protocol helps it provide structure. But there's definitely, when you're trying to be a fast moving company, you got to have the ability to make decisions in a little faster time frame.
- [30:53]
Savannah Brewer
How do you guys handle conflict, you and the CEO? And when you guys do have a difference of opinion, what do you do?
- [31:01]
Dan Murphy
Yeah, I mean, again, it really helps to be friends, number one, because it allows for some clarity and honesty that he knows and I know come from love. Right. If we're having that conversation. But if I'm looking at objectively, that doesn't help because I don't think people are probably in, in a situation where they're in business with their friends because we also have a board. Right. So we have that conversation as well. Again, we try to focus the emotion out of it and because it's all going to be, I have a theory, I think we should go down this path. The next question is what's the data to support it? That's the question that would always get me from, you know, thinking in high level and just throwing ideas that I know can put my team in a tailspin to, you know, actually like, hey, we need to research, we need to actually go and find if I'm going to put this up as a hypothesis and how we solve something, we've got to have the data behind it too. And that permeates throughout the system or throughout our culture, I should say, at the leadership level. And you know, we have some, we have some hard conversations where, especially when people aren't hitting numbers, you know, because everyone wants to help, but sometimes the help can feel like we're trying to insert ourselves into something we don't know anything about. And that would frustrate that leader even more. It's like, well, you guys aren't in it day to day. And I do have a handle on that. I'm just, you know, hitting a rough spot and this is where I need help. So we try to really pull that apart. We meet, you know, weekly for an hour and a half. And that really, I think helps drive the trust, I think between the team more than anything else. And because if we're just in our silos and we're not able to elevate out and have those kind of cross departmental conversations. That's the thing I, I don't say I hate the most, but it is, it's like I understand it because like they are very driven, you know, operators on, you know, from sales development on down finance, big hard charging. They really have their visions figured out. But they all also understand. And they do. But it helps them to really understand that, you know, we got to win everywhere. And if we're losing here, you know, if we can make it up here, great. If we can, you know, help in any way we can. Without that communication. It's just about my division and what I'm doing. I feel like, you know, that would just kind of further fragment the business. Yeah.
- [33:14]
Savannah Brewer
It's such an interesting complexity, like all of those different pieces. Like you need your team to be driven and heads down and kind of do their thing and not get distracted by collaborating all the time and getting everyone's opinion. There's a lot of research that shows that people actually do better work when they're. It's like siloed for certain projects.
- [33:35]
Dan Murphy
Yes.
- [33:35]
Savannah Brewer
And they're not collaborating because it just slows things down. There's so many different opinions. But then you also, like you said, those silos can get created. And then someone's saying over here that XYZ is happening with sales and then the marketing team saying this and it's like, well, where, where's the truth in that? You were saying something about who's like closest to the matter. And I remember that there's a principle. I think it's Ray Dalio talks about it in that really big book, the Ray Danielle principles. Principles. Yeah. Called Weighted believability, which is the person closest to it is the one that should have the most believability. And to double click on the metric piece, I mean this was something that I learned in being in a sales a very data heavy company about, you know, how many sales are we getting, what's our closing rate, what's our acquisition. And for me I'm a very talkative, I talk a lot through what's going on up here and like this is the problem, this is it. And what I had to find in my executive team was especially I worked with all men for the first couple years on our executive team and to them the way that they perceive communication and take it in is different than how I will with my girlfriends. And so I started to need to learn, okay, if I'm going to bring a problem, I have to bring the data. It can't just be like talking it out and let's collaborate and like chit chat about it. It's hey, here's what's happening, here's the proof, here's the data, here's what I think we should do about it. And that helped me a lot. And then being able to ripple that through my team of like you said, what's the one key metric? Which actually I wrote down a question. I've never asked this before, but I'm curious. There was at one point in my position where the owner of the company, Cole, he was like I want you to build your own scorecard because everyone in the company has a scorecard now except you. And I really struggled to get super crystal clear on like what was my one metric? Have you thought about for you and your position, what is your key metric?
- [35:40]
Dan Murphy
It's a great question because yeah that mine falls into, you know, it's like a combination that could be like a culture of, I mean I look at my number is you know, essentially the overall performance of the business. Like our, you know, I hate to go straight, you know, bottom line EBITDA for the franchisor, but if everything's happening the way it's supposed to be, that should be the ultimate end state. So decisions that are being made on the sales side, maybe to let somebody buy additional units or to, to not approve a certain franchisor or franchisee, you know, that's going to trickle down into the P and L and that. And so a decision to hire somebody, these sort of things that kind of essentially elevate through outside of the budget are the things that I'm probably, you know, really making the Most impact from an impactful decision on. So I look at it as like I have clearly one metric and that is are we hitting, you know, that overall budgeted EBITDA number at the end of the year? You know, and then the board gives me like about another 30% that they kind of in their mind as initiatives to run down. And so those are like task based type things. And I really enjoy those projects as well. That's like acquisitions bringing that I mentioned. Now for the third time, we brought our equipment sourcing in house. We also brought our construction project management in house. Those are two projects that I basically started from nothing and, you know, onboarded a brand new team, a whole division of the business, and then transitioned our current outsourced provider into that took the better part of a year. I really, I get a lot of juice from that. I love, you know, just starting with something that's concept and then seeing it, you know, we're having now departmental meetings with the construction project management team on a weekly basis. That's like, yeah, it's cool. It's a lot of fun.
- [37:13]
Savannah Brewer
Yeah, love it. The part earlier you were mentioning about community, I wanted to circle back around to this because a lot of COOs. One of the most common things that I hear when I ask what's one of the hardest pieces, especially when sometimes we're off recording, is the isolation that CEOs can feel where not everything you can bring to your CEO. And you also don't want to be sharing all of the stuff that you might be holding with your team because you want to have that trust and the certainty. Why is community so important? Because I want to ask you this question, since this is kind of what you're building ultimately is community and health for people. Why do you feel like being involved in a community that can support you is so important?
- [38:04]
Dan Murphy
Yeah, I think it develops that empathy muscle that we all have but don't necessarily exercise on a daily basis. Meaning the community piece, you do hear the different perspectives. Like I do hear the fears of our CEO, I hear the fears of our sales director. I feel, you know, the fears of even finance and those sort of things. So you are looking at it in your silo and I'm probably the one person that has a view over all, all of them at least, you know, I lean into the development side more than anything else. But establishing that community allows me to really go, okay, then they're struggling over here. Or, you know, they see this as where we're getting too many sales of people that maybe you know, aren't really fully qualified and we're spending a lot more time trying to train them up, but they don't really, you know, you've got to like, bring them into the sales world and understand, okay, this is the qualification process. What do you want to change about that? Because they're, you know, they're checking all the boxes that they're supposed to be checking and it's just looked at instead of there being these inner, these. Like that community piece really helps alleviate that more than anything else.
- [39:06]
Savannah Brewer
Yeah. If anyone's listening and you kind of resonate with that feeling of maybe being siloed or being on your own and you're looking for support in your role, then I highly recommend our COO alliance. Cameron has an amazing group. I was in it for two years and it was absolutely game changing for me to be able to be around other CEOs who could just impart their wisdom and shorten the gap. For me, it was kind of like how AI now I'll like use AI. I've never made this connection, but this is, I think, a good analogy. Like, I'll make something with AI now where I'm like, oh my gosh, if I would have had this three years ago, I would have been able to move so much faster with the things that we're building. And I kind of see that, like, the COO alliance is so similar. It's like you beat, you. You get around other people that have already built an insane hiring process or, you know, they've built the most beautiful onboarding process for their team and then they just impart that to you in a quick conversation because you're in a community is such a game changer. So if you're listening and that resonates highly, recommend checking that out. But just to kind of tie everything together here, I would love to know as you guys are growing so fast, I'm sure there's a lot of excitement in that, but is there anything particular that you are really excited about in the next six months?
- [40:24]
Dan Murphy
You know, I think it's. We're kind of in that situation where we're head down and we have our roadmap ahead of us. It's rare. And, you know, I've been here 20 years in your company history where you. You kind of can see 18 months out and know exactly where we need to be and what we need to execute on. So the focus here is, you know, with what I'm excited about, when I get the team excited about is not thinking about the next shiny Object but really thinking about like, how do we execute each time? Better, right? Little 1% improvements. Every time we're opening, we do the pre sale a little bit better. Right. Can we get them in a better lease scenario? Right. Are we finding different properties that work better than others? And we pull in the data from the last six months of openings into the new six months of opening. So that's what I'm really excited to see is like, what are we going to find over this next year or so or six months that is going to be implemented immediately for me. And I keep what the challenge of team is. You know, when you get everybody thinking about the future, it's easy to go to kind of ideation mode and talk about ideas. And for me, more than anything else, like ideas really are just a multiplier of execution. Nothing beats execution. So anytime my mind starts drifting towards that, you know, I love thinking about what we're going to look like in 12 months. And I think that's my job is to prepare the company for what we're going to look like in 12 months. Because it's going to be different. Right. We're going to need different structures and different org chart even. But we've got to execute and we've got to execute on like what we have right in front of us. So that's what I'm most excited about.
- [41:49]
Savannah Brewer
Awesome. Well, thank you so much for coming and sharing your story and all of the amazing things that you guys are up to. I have actually, before prepping for this podcast, I had not heard of you guys. I would love to come participate in.
- [42:03]
Dan Murphy
Yeah. You're in Austin, right?
- [42:06]
Savannah Brewer
In Austin, yeah.
- [42:06]
Dan Murphy
Yeah. We'll get you set up for sure.
- [42:08]
Savannah Brewer
Do you guys have one here?
- [42:10]
Dan Murphy
We do. I think it's on the north side of town, but I'm not sure exactly where you're at. But yeah, definitely.
- [42:15]
Savannah Brewer
Awesome. We'll connect after and make that happen.
- [42:17]
Dan Murphy
Let's do it.
- [42:18]
Savannah Brewer
Sweet. Thanks, Dan.
- [42:19]
Dan Murphy
I love it. Thanks.
- [42:24]
Cameron Herold
You've been listening to Second in Command, brought to you by COO alliance founder Cameron Herald. If you enjoyed this episode, please be sure to like, share and subscribe to us on Apple Podcasts, Spotify and our other podcast streaming platforms. For more best practices from industry leading COOs, visit COOAlliance.com.