He Helps Executives Go From Good to Great and His First Move Is Radical | Ep. 318 with Steven Lovett Founder/CEO of Principled Consulting Services

what makes a business great a CEO and executive, what makes them good to great or great

to excellent and I want to understand if I want to go from operational excellence to strategic thinking, what is that one thing I need to do? Alright, that's a great question. So I'm going to start out with this by saying to you, you've already identified the problem is that gap. How do you go from good to great? How do you go from great to excellent?

“So you know that there's a gap, that's the 2 a.m. prop and that's what keeps you up at”

night. And then the question, of course, is bagged saying, what do I do about it? I don't know what to do about it, right? If I knew what to do about it, I'd already be there. I know there's a gap, so what do I do about it? So I work with a lot of different executives. I work with executive teams. I work with boards of directors. We help identify that gap. What that gap looks like, the nuances for their industry. What their specific pain points

are. But I'm going to tell you this without almost exception. There's one thing that I'm able to tell any individual that I work with or a team that I work with that creates an instant deconstruction of the place they're in, which opens them up for reconstruction of where they need to be. And so here's a suggestion I'm going to make to you if you want to do that. And you'll have to talk to your producer and your whole team afterwards and

apologize and say, this is just a test. This is not live. So here it is. My guess is that right now you've got your calendar somewhere on your computer. You probably just click on the icon, pop it up. It's Microsoft. That looked what the case is. And it's well populate. I'm an example of that today. You and I are talking. I'm one of your things to get done for today. There's going to be a bunch of other things later on today. There'll

be things tomorrow or the rest of the week. You've got next week lined out and so on. What I would like for you to do is open up that calendar. This is a test and erase everything. And probably what's instantly slamming around in your brain is, how do I get anything done? I literally, Mike, my business for you, Dan, is going to be podcasting and so

for talking individuals like myself. How do I get that done? And here's the problem is

what you've done is you've created a model based upon a dependency that has to do with how you allocate time. And what I'm suggesting is blow up the model. I didn't say don't get anything done. I'm saying blow up the model for how you get it done. Then the next question that you might be asking is, I'm going to accept that premise. I need to blow up the model for how I get things done. Then your question is going to now be a strategic question.

So how do I accomplish what I need to accomplish, but not do it within the present model? That strategy. That's future focus. That's leaning into tomorrow. So what I didn't say to

“you is, we need to get you a better calendar. You need to have better efficiency, right,”

with assigning time slots and allocation of time, which is a resource for you. Instead, I'm saying, don't worry about the optimization. My guess is you have that down path. Your production team and yourself, you know, exactly had a time things out, you know, exactly lead in time, exit time, production time, everything else. You guys have optimized that. That's practices, your phenomenal podcast. So you guys have got that down path. What's

the next iteration? Podcast once upon a time didn't exist. What was the precursor to a podcast? Maybe it was an interview at a TV station or radio station? What did that kind of scheduling look like? What did that kind of timing look like? What was the delivery platforms for those interviews? Something radically different than what you and I are doing today to get it. So a very simple thing that I offer to an executive that I'm working with in an executive

team is let's look at one of those basic tools that construct your current business model and rip it right up. And I can't say that I'm original author to that. Circle years ago, I was working with a phenomenal see, one of the best guys I've ever worked with. You just, and I think he just, he was cut of a different plot. He just, he, you phenomenal at efficiency

optimization. But what he was always doing is challenging the present model, always challenging

the present model. And so one day he came in and paraphrased and so to speak, sat with a few of us seesweet officers and looked at all of us and he said no more meetings. That's a no more meetings. It's all going to be drive by. Yeah, you're going to see each other in the hallway

“and that's how you're going to get it kind of things to accomplish. Zero. I don't want to see”

any more meetings and he walked out. And they had the same sickening feeling that you probably had when I say get rid of your calendar. If you're not the one holding P&L responsibility, you're probably happy about it. If you're going to say, hey, you know, bang for the buckets, it lands on me and you're like, we got to get this done. How are we going to, and they ask the same thing. And so there's these series of mental follow questions that challenge the present model, right?

mean, things aren't done if I'm not in the room. Do I need to be in the room? Actually, then

“what does that say about my team? What does that say about the processes and the systems that”

are in place that are supposed to operationalize activity on a day-to-day basis? What does that say about how have set those things up? What does that say about succession planning? So if I'm not in the room, things don't happen. So I don't have a bench. Have I optimized my team? Am I working with A players? And that kind of, it begins to ask a domino series of questions about the current model. That one tool, if you popped open your calendar and said, that's a blank sheet.

Right? And we start to see this, actually, the consulting industry and the, and the reconstruction industry of how you take a company from good to greater great to excellent. And I say, let's clean sheet the organization. Let's rip it back down to the studs. Do you actually need a hierarchy that you've got? You need the layers that you have? You know, you need the processes that you have. You need the platforms that you have. You clean sheet it. If you were going to do it over again,

“how would you do it today? So no preservation of legacy just roll it for. So Stephen, when you went”

from corporate to founder, did you find that you were falling into a certain trap that you then knew, okay, I, this personally, I went through this. So now I'm going to make sure other people don't. Oh, complete. Like, Mexico. So I've, I've done the same thing and I, and I largely come from corporate. The, the, the advisory work that I do, the consulting work that I do right now is fairly new to me, except that, like, the colleague of mine a little bit over a year ago said,

"Well, you've been doing it your whole career. You just didn't know it." That's, that's a good point. So, but yeah, I have lived in the corporate world for most of my career. I've been just as guilty of, uh, focusing on efficiencies, focusing on optimization of those efficiencies, and then being bugged by the challenge of, well, what are we going to do tomorrow? What, you know, we're using trailing indicators, we're using lagging metrics. What about tomorrow? What happens when this change? There's

so many walks in the door with a new problem and say, "Hey, this wreck just changed on us." A lot of industries did, you know, a little bit over a year ago, when we had a new, uh, presidential administration,

and there was a whole new set of executive works. They're basically, the landscape just changed.

And that, that way, we got, we got a model built for a particular landscape, whether it's communications, FCC type of thing, or if it was a higher education, or if it was in finance, or if it was in healthcare, FN tech, pick your industry, the landscape just changed, even just workforce stability, right? So, now what do we do, because the model's based upon that? Well, I was one of those individuals, meaning that, you know, I had my calendar, I had my series of tools, I knew how to optimize

those creative efficiencies, show my metrics, I was looking at those margins and making sure there at the black and trying to ignore the fact that they kept compressing all of the time until there was just a little bit of daylight left. What was the next iteration? What was the next stop? And the frustration for me was to sit with other executives and ask that kind of question, what I used to call the Jetson question, so the Jetsons, so, you know, what's life going to

look like, and actually I guess now, because the Jetsons are old enough at being now, but when we're living in the clouds and you got flying cars and you've got a robot taken care of it, what's our Jetson situation? So we're still going to be doing some fundamental things, right? So higher education, what's the fundamental thing? It's a transfer of knowledge. Health care, what's the fundamental thing? It's the healing arts. It's getting somebody from a bad place to a good place. And finance,

it's transactional, right? That is never changed. Go back thousands of years, the fundamentals to an

industry, transportation is getting a person from A to B. What has changed? The miles of production, the systems, the gauges for that, the metrics for that, the means for that, it's exactly what you and I are doing this morning. It has to change people interviewing each other. That's happened for thousands, tens of thousands of years. But look how different it is now. So I had the same problem myself looking at where I was today and wanting to be to the Jetson tomorrow, and I kept challenging

myself and my teammates to say, how do you do that? What are the core elements that begin to shift that mindset? So we're looking at the long term projects instead of the near term output. And you and I were talking earlier about communication and how important it is. And my wife

and I always talk about how many people are just really, really bad at communication. And I

thinking back to the corporate time. I mean, I couldn't, there's, I don't have enough fingers and toes to talk around how many times this was the sticking point. Like this was the problem with people getting fired or not, you know, people not moving up or just people unhappy. Like so many reasons was because they just were not effectively communicating. So what is how do you effectively communicate? That's a great question. So here's my disclaimer of front days. I'm not a communication

“expert. I think other people can get paid for that. But I have lived in the trenches like you”

and I've looked at the consequences of a failure communication and poor communication. And a large

Not just communicate. And that's what my wife says I do a lot of times to say a lot of things

“which effective is, is does it actually have the outcome that's been intended, right? And so here's”

a couple of things that I do when I'm working with my clientele. The very first is, is I really

focus on what their concern is, what their pain point is. You know, when you, when you're talking to an individual about almost anything, what you want to do and I learn this a long time ago, practicing laws, you want to get yourself to their side of the table. Because then what you've got is you've got a common combination of effort and energy and mental and I'm going to say stability approaching the problem from the same direction, which means you're going to use a shared language.

You're going to use a shared mindset instead of things being a contradictory or accusatory, they're going to be complimentary and they're going to be encouraging. So for instance, where it really hit me was many years ago, I was sitting in a federal mediation and the federal magistrate walked in. I was sitting there with my client, the other lawyers sitting with their client. And the federal magistrate says, our goal today is that every walks out of here equally unhappy.

I thought, oh my god, I'm going to have to explain that to my client. So sure enough, after a few minutes, and she walks out and they go into their conference room and so forth and I'm sitting there with my clients and they hang out and say, yeah, what's up with it? I came here to be unhappy, said, what she means is she's talking about positional bargaining, right, which is most of what happens from a negotiation standpoint. You take a little step, I take a little step and eventually

we find here, which means you're going to be equally unhappy and I'm going to be equally unhappy. That space that you gave up. So I was talking to another litigator a couple of days after that, a fantastic lawyer and so forth. And I said, how do you, how do you approach that concept, the positional bargaining, so that you're communicating the positive outcome for your client in a way

that they can say, I get that, that's the place I want to be. So this is what I always try to do,

as I try to get us all on the same side of the table, which is a weird thing to say, especially

“for litigator, because it's adversarial. What does it mean to be on the same side of the table?”

This is what it means. What's the real problem? What's the real problem? And identify the real problem and then let's both try and solve for the problem. So if it's a car accident, somebody's been injured, what's the real problem? They're injured. It's their bill. Well, let's both work towards that. And what's the resolution to that? I think we could talk about who's at fault in it, and sure, that has a place and so forth.

But let's try and solve the problem. It's transactional. If it's contractual, what's the real problem? I want to get this done. You want to get that done. How can we both get those things done together? So it's not confrontational. It's not adversarial. It's actually complementary. It's encouraged. Communication is the same thing. When I talk with clients, what is, let's talk about what really keeps you up at two a. What does that look like?

And they're going to talk about ceilings. They're going to talk about margin compression. They're going to talk about customer base issues. They're going to talk about workforce issues. They're now going to talk about AI. They're going to talk about disruptive innovation. They're going to talk about regulatory pressures. They're going to talk about exams. If you're a financial industry, that type of thing. They're going to talk about those specific nuances

about their industry. And then what I'm going to say is, okay, so what I hear you saying is that where you're currently situated exposes you to something that you're afraid of, that you're worried about. You're worried about the fact that customers aren't going to show up anymore. You're afraid of the fact that AI is going to displace something. You're worried or afraid of the fact that a competitor in your same market segment is going to come up with the next disruptive

innovative thing that's going to leave you in the dust. You're worried about the fact that your board is looking at lagging metrics. And they're not assisting you in looking at what the next three to five years look like. They just want to see what's the P.A. we're ratio for today.

“What's the stop price for today? That's what you're worried about. Then let's talk about how to”

solve for that. So, now typically the solve is going to be operational. Well, you got ceilings. You got margin compression. You got a drop P ratio. You got workforce concerns. Let's bring an HR people. Let's pump up the stock price by doing this. You know, let's look at where your margins are too tight. And then let's look for efficiencies in those processes or systems that are creating them.

We could do that. And in fact, my guess is you already do that. The problem is you can't see how that

actually gets you to good for the long term. You just solve for A to clock in the next morning. And that's it. And then you're recycling the same thing. What if we actually take a look at your model? What if we take a look at your mindset? Let's put something in the sleeve right now that might be experimental that might be provocative. Let's resource it properly and let's A.B. tested. Let's actually reward that risk that's controlled and intentional with your team.

Instead of rewarding stewardship of legacy process and system. Let's take a look at that monolid. Does that blow things up? So, for instance, I'm going to use you Dan for a second. Even though you and I haven't talked about it. But you know, one of your concerns might be,

up with those two or three more? It's that I get what you're saying that keeps you up at night.

“You want the quality. You want the guests and so forth to be great. But you also want to add in”

extra. You want to add in more than you're currently doing. So, what kind of model are you using in order to acquire those interviews? List the model. Okay. Well, the model you're using is the one that brought you to a place where you actually needed more. So, let's take a hard look at the model. Let's try something different, for instance. Let's, you know, deconstruct your calendar on Thursdays and Fridays, entirely. And let's do something a little bit different. Let's do what

they're called passing conversations. Let's a passing conversation. I don't know, I'm making it up on the fly. But you grab your phone or whatever else. You've got as a recording device. And we're

going to put you inside of a metro area on a sidewalk. And we're going to put you with a small

team of two other people. And they're going to span out from you and they're going to identify potential people based upon their profile, how they look, whether they're going the, I don't know,

“the place that you're in in that particular city. If you're in that business district and so forth.”

And you're going to have two or three pocket questions. And you're going to walk up to them. And you're going to start a conversation. What do you have in your hand? New podcasts. A new interview. It's exciting. It's off the cuff. It's in real time. It's got drama behind it. You can make it long. You can make it short. And if it doesn't work, you can throw it in the trash. Let's test that out for the next three weeks. And let's see if we can actually add to what you're currently shooting,

what you're currently producing and what that actually looks like. I'm completely making things up.

So don't blame me for it. No implied more. We're going to recommend. I appreciate that. And I liked the art of negotiation before the art of excellent communication. You said, sometimes two people are communicating. Like they their needs are opposite. And I imagine when we think about a company structure, see sweet down to the employees, there might be like their once in desires also could be

“opposite. And I think we've seen many companies as they failed because the CEO has a total.”

They're not rolling the same place. The CEO is is very opposite from everyone else. When you go into a company, how do you, how do you enable them or what do they do to enable where everyone really is rolling the right direction or together? That's a great question. So so what you can find is we've got a whole bunch of different wants and desires all over the map. And you're right. That's very typical. You look at the different layers, higher article

within an organization. You're going to find that. The frontline employees, they really are only concerned about just today and just the next paycheck. And that doesn't mean that's not demeaning or anything else. That's the space that they're in and that's understandable and I bet that. You might look at mid-level management management, it's looking out a little bit further. Yes, they're concerned about current paycheck and current numbers, but you know, they're challenged

for next quarter or the two quarters out or something. You move a little bit further up the pyramid, it pushes out it a little bit further. So you've got challenges based upon just time, based upon output, based upon activity, those kinds of things. One of the things that we do fundamentally to help align all of that, we talk a lot about alignment, our operational decision-making metrics. And so these are the things that you share from a decision-making standpoint which you're

not really focused on necessarily what's the outcome of that particular decision. You're actually sharing how you make the decision. And if you share how you make a decision, then it naturally aligns the outcome. Even when there's still some disparity. So a basic example is any one of us, we might be married, we might have our partner, we might have a roommate, we've got shared financial obligations. And even when you have shared financial obligations, many times your wants and desires

in your goals are different. Sometimes you got big macro ones that are the same, my wife and I both want to go on a vacation. But even having said that, she might want to go to the Caribbean, and I want to go to the mountains or something like that. So okay, well I got two different sets of desires and wants, even if we share some kind of outcome overall outcome. Or it could be a lot more drastic. It could be that I love to get on Amazon and shop all the time and see boxes show up at

the door and she likes to put money in our savings account. Who got two different goals all together. So how do you reconcile those things? Well the traditional ways to say, well let's both get on the same page with our goal. And that's, there's something to them. When we talk about what are the strategic outcomes, what are we really looking at, what's the picture in the future we're looking. But fundamentally, how does that translate to an everyday operational activity? It's through your

decision making. So when you look at your operational decision making, you say, how are we all making decisions? A basic metric for decision making might be conservation of resources. So if every single layer of an organization is oriented towards making any decision based upon a conservation of resources,

I've got so many staples and I've got so many paper clips and maybe I've got so much time on the

calendar for a particular call with inbound call from a customer or client. I've got these resources that might disposal. But the way I make decision about those resources, how many paper clips I use, how many staples I use, how much time I spend on the phone, is from a conservation standpoint. I recognize that these are finite resources. So I'm going to conserve. I'm still going to utilize them the right way. I'm going to allocate them the right movement to conserve. And then you go all

the way up the food chain to somebody who's got penal responsibility for an area of operation

“involves $50 million in assets or $500 million in assets. How are they going to make decisions?”

Conservation of resources? When you have the entire organization at every single level, conserving the resources that they have under their governance, then all of those decisions are going to begin to align. Now what are you capable of doing and we look at institutional capabilities and developing those capabilities? So alignment of incentives the same way. If you're decision-making process and your experimentation process with the normal organization has your incentives aligned

to reward that experimentation. Then people, regardless of the level, are going to be bold enough and courageous enough to raise their end and say, "I've got an idea." And here's the metrics that are going to show us if it's working. Here's our valuation points. Here's expected case. Here's downside. And here's upside. And we're going to begin to align a reward system with that type of experimentation that's intentional, that mitigates and manages the risks and that

actually adds to the learning and knowledge-based reorganization. That alignment of incentives at every single layer, then rewards everyone. But it also guides all of that decision-making.

We're ultimately what you have as alignment. So if you can imagine you and I and we're standing

out some, I don't know, football field or some massive part. And we're like hundreds of yards away from each other. And what you and I do, as we say, "Well, you want to get, I don't know, a hundred yards further and I want to get a hundred yards further." We could end up in vastly different places. But if what we said is a decision for every time we took a footstep is, I'm going to walk toward the sun. I've just got this loose direction. I'm not going to actually

reach the sun. I'm just going to walk towards where the sun is. And so you're way far away from the foot. But you orient yourself towards the direction that you see the sun. And I'm way far away from you and I orient myself towards the direction I see the sun. And every step we take is a decision and that decision is, "Well, am I taking a step toward the sun?" And you, eventually, that alignment and decision-making helps us to arrive at the same place. There'll still be some

nuance to it. Maybe you'll take quick steps. Maybe I'll take slow steps. Maybe you're, you know, since of the sun is a little bit off and a skew for mine and so forth. But that is going to bring us a lot closer together to resolve whatever that outcome or that problem might be. I can really appreciate alignment. I remember corporate, every corporate job I ever had when I was a manager. And as I continued to go up the ladder, I realized how bad many companies do at a

lining people's strengths and a lining people, like what their goals are in their life,

“their vision for themselves to the job that they're in, which is why I think so many people get”

fired because they're not. So I was always a big proponent of, like, let's move them to some,

instead of just firing, selling on a performance improvement plan, like, let's take a look at where they should be in the organization and where they can add more value. Because right now, somebody put them in the wrong position. I know you have, so I appreciate everything you said today. You have a book. You have a book that just came out strategic mindset. I know you have some things coming up. Can you share? I think you have the book with you right there. Can you share

about the book quickly? And then what you have coming up? Yeah, thank you so much. Before I do that, I just want to compliment you. You hit another nail on the head. That's exactly it. That's another thing that we do is we look at resources from a capability and capacity standpoint. And that includes human assets, human resources. Looking at an individual saying, what are their

“capacities, what are their capabilities, and how do we optimize that? Are they in the right place?”

Have we positioned them to be radically successful? If not, where is that reposition? Or where's the graceful offering? Performance improvement plans in my estimation, even as corporate counsel over the years have been, they ought to have used a few in far between. They're really intended to improve something that can be improved, not to correct something. And I know I'll get a bunch of HR people mad at me for saying that, but Kudos to you Dan, that's actually one of the things that we take

a hard look at with our clientele is that concept of capacity and capability and institutional capability in macro level. Having said that, thank you, introduction. Got it right here in my hand on how readable that is, but that's the strategic mindset. It came out published this past week. It's available on all the platforms you might imagine like Amazon, paperback, hardcover,

super excited about it. What I kept having was clients coming up to me and saying, "Can you put

“this all in a workbook?" And I thought, "I don't know how to put it in the workbook." I'll work on that.”

And a little, I was toward the end of last year I thought, "Well, how about just a book and try and get it in there?" So it's an actual book where we walk through the 11 core elements to adjust a C-suite officer or a director on a board, that higher level management toward a strategic mindset, what we call strategic intelligence. And so it's going to move them from that great,

or from that good to great, or that great to excellent, as a strategic asset for their organization,

why that needs to happen. But it also embedded throughout the book are a bunch of practical examples. So you can get to the end of a chapter or a section. You say, "Here's reflection, questions, here's a practical tool I can put into place in real time in my own space and my own corporate environment and my own industry. It's industry agnostic, so it's not oriented towards a particular industry. It's applicable across all industries. Really exciting. I'm proud of

“the team that helped put this together. I think them for the time that they gave me in order to write it.”

It's been a rodeo, as I have often said about other things, but it's been a great rodeo. So I've got that that just came out. Another exciting offering that we've got that's brand new in the pipeline March 24th. We're launching a new course. This again is for C-Suite officers and directors on boards that the apex predator with an incorporation. And this is strategic intelligence. This is an executive program for profitability and market dominance. And it's a six week

high impact virtual course that a senior level executive can take. They're going to walk away with

“real deliverables. It maps out the elements that we address in the strategic mindset. But they're”

going to apply that in real time. I work with them individually. We've got two master classes a week in an optional class on Fridays where they bring their own actual challenges and problems in real time in a cohort style fashion. And we start solving for those. They exit the course of the board ready playbook, as well as a number of deliverables that actually add to their quiver on an everyday operational basis. So really excited about those to the book, as well as

the course coming up. The course will be cyclical. We'll jump off for the next cohort in June and so on. Super excited about that. So some great things happening. We're really excited. A lot happening, Steven. I learned today. I learned a lot today. And I appreciate that. I mean, I'm going to go right now and I'm going to wipe my entire calendar clean. And I'm going to see, I can I really like to do different things and unique things as hard sometimes not the fall into the trap

of doing the things from 100 years ago that don't even apply anymore. But I'm going to try it. I'm going to try it. I need this strategic IQ mind. I need this strategic intelligence mindset. So I'm going to get the book and then I'm going to take the course and I'm going to wipe out my calendar

and then I'm going to see, I'm going to let you know what happens. I feel like if I do it first,

then they might do it too. But Steven, this has been great. Thanks for joining us today and under story. Thank you so much, Dan. I appreciate your time and your interest in investment. I really do thank you. If you liked the show, please take a moment to rate, review and subscribe. It really does help the show to grow. Thank you for listening.