EP233: Breaking Free from the Chaos Trap: Strategies for Business Success with John Nieuwenburg

Oh, thanks for having me. It's a pleasure.

Well, I'm a business coach. Been a business coach since 2004, so about 20 years now. The other answer, which is also true, is I've been a coach all my life. It was Steve Jobs who said you can only connect the dots going backwards. And I had a bit of an epiphany when I first started as a coach and connected some dots. So I'm the eldest of eight children, so you can imagine how that casts you in a role in life. I'm hardwired to be a teacher, and I knew that in high school, but those days that meant wearing a Harris tweet. You know, sports coat and elbow patches and that sort of institutional bureaucratic style of teaching didn't appeal to me very much. In the early 80s, I learned something called the Socratic method of leadership. So Socrates had it the best way to help somebody is to help them figure it out for themselves. So I'm not, you have to, you need to, you should. Business, I'm here to help you. What's right for you? So that's the essence of coaching.

That's a motto I use to describe coaching all the time. Give a man a fish, you feed him for a day. Teach him a fish, you feed him for a lifetime. I'm in the teaching business.

What I see a lot of is people who are complaining about one or all of three things, time, team, or money. So when it comes to time, you're probably saying, business owners are saying, I've got too much to do, enough time to do it. I can't get everything done. If I don't do it, it won't get done. A team is, you know, hiring good people is very difficult. Getting people to do work at the standard you want, getting the culture you want, those are hard. And then money has got two aspects. One part of money is I need proper financials, accounting, reporting, a dashboard, KPIs. I need to be able to measure results. And the other side of money is I need more money. I need better sales and marketing. So chaos flows when those things aren't in sync or aren't working in the way that they should. And I just kind of build on that. Often when I first start with a client, they have what I describe as a burning bush. almost a crisis in their business, something that's escalated to the point where they kind of reach a stage where they just recognize they can't deal with it anymore and they need some help. And that's when they, you know, reach out to people like us to get some perspective and some help and a way to kind of break through the chaos that they're experiencing.

Well, in my experience, it's because a contractor, someone in the trades, they'll spend 30,40,50% of their time focused on acquiring new clients, new customers, and all the work it takes to deliver great services. How much time do they actually spend on managing, leading, or recruiting? In your experience, well, in mine, it's a tiny fraction of what they're doing in other areas of their business. So, lots of times what happens is the only time they're doing recruiting is when there's some crisis. Someone quit and now they're jammed and, you know, they're taking calls on Sunday. And so, one of the things that I think ought to be in place is some kind of forecast of what revenue should look like, some kind of forecast of how we deliver, and some kind of forecast of how we need staff. in order to be able to do that. And so in a way, business is kind of like a metaphor I like to use is you've got a high wire act. And this is my balance bar. So on this side, I do all kinds of work to acquire customers. And on this side is all the work I do to be able to deliver the results that I need. And often they're out of whack. So when are you doing recruiting? You're doing that when you have a crisis. Well, so one of the things I recommend is that every... key position in your business ought to have a bench. Once a bench, it's a farm team. And what do I mean by that? What I mean by that is that if anything were to occur where you needed to hire someone, you can immediately pick up the phone and have five conversations with people who you've been cultivating over the last three, six,12 months so that you aren't kind of like throwing another add on Indeed and hope some of that sort of sticks. Now, I learned this lesson. In the 70s, I was a store manager of a tip-top store, kind of a national men's or retailer. And in the 70s, Calgary, the city where I was, grew from about 100,000 to 500,000 people because the oil business was booming. Nobody was moving to Calgary to join, to be in retail. And so one of the things we learned to do is about once a quarter, my boss, the local regional manager, and I would tour the mall where I was. the manager of our store. And my job was to point out the two best salespeople that weren't yet working for me. So what does that mean? I'm bumping into them in the food court. I'm peeking around the corner, watching what they're doing. And so when something occurred, I was in a position where I could engage those people. Hey, how you doing? How's things? We've been talking for the last six months. How do you like where you're? And so business owners need to be actively engaged in recruiting routinely. Nearly to the same extent as the amount of effort it takes to get a customer, you've got to also keep in proportion what it takes to staff.

Exactly right. Another example is I have a client who owns a physiotherapy clinic. There are 200 vacancies in the province of the state that I live in for physios. And so they are constantly recruiting. let's say 20 physios, they have a 10% turnover. That means immediately they need two physios just to replace churn a year. Well, they've got high offers out and start dates for people three months, nine months from today. They don't know exactly how it's going to work out, but they're pretty sure. That's somewhere within a few weeks or a month or so of that place. Nine months from now, they're going to need somebody. So, yeah, be proactive. Be intentional. Stop reacting. Because every time you're reacting, the tail's wagging the dog. You know who's got it? The person with the most options has the most leverage or power. And what I mean by that in this instance is one of your workers has more power in them. in the relationship than you do as the business owner. Why? Because they can decide to be late. They can decide to quit and you're stuck. So how do you balance that? Well, you have to have options, meaning someone's late for the fifth time this month and you're kind of biting your lid because I have to put up with it. No, you don't. Your power resides in having options because that guy isn't going to change. If he's been late five times in a month, what? Is there anything you can do that's going to change that? Not very likely. Yeah.

I agree 100%. Yeah, so always be recruiting as a motto. Another thing that I'd often ask a business owner to think about is, you know, so hypothetically, how many team members, how many employees do you have? You have about 10. Okay. Hey, look, if you could start your business from scratch today, how many of those 10 would you rehire? Now, the most common answer I get to that is about half. And so let's think about that for a minute. Are you telling me the bottom half of your employees are pissing off the top half? Are the bottom half of your employees pissing off your customers and you're putting up with it? What would happen to your business if you get the bottom half to at least the current average of your team? How would that change your business? How would that change your life? What would that mean for customers and the delivery of the work you do? So ask yourself that question of my current team. How many would I rehire if I had a clean sheet of paper? You'll probably have your marching orders for recruiting from that question.

Yeah. The other thing I'd comment on is people don't get fired for skills. He may be a great worker in the sense that he's great, great skills. They get fired for culture. They get fired for being difficult. They get fired. And so hire for culture, train for skills. And skills are relatively easy to teach. Culture is much harder to achieve. And so start with the idea, I'm going to hire the best fit for culture. And that means that you have a clear idea of what culture means. So if you were to ask most business owners in the trades, what's your culture? Here's the truth. You don't get the culture you want. You get the culture you deserve. So what are you doing today to implement, to embrace, to influence, to get the culture you're looking for? And if it's not documented, then you don't have the culture you have won't be the one you want. Or put a different way, why are the Ten Commandments written in stone? Why are they written in stone? We're not going to debate if thou shalt not kill as a commandment. The only left for us to discuss is did you live by that standard or not? Well, if you don't have your points of culture or your culture documented, you're going around wondering, you know, is thou shalt not kill a commandment? I don't know. Maybe. Well, um... I can promise you that if they aren't documented, no, if you aren't addressing them, then you won't have the culture you want. Even if in your mind's eye, you're clear about it. If it's not described at that level of detail, you won't have the culture you want. And that's probably why you're putting up with people that are living up to your expectations for how they behave and conduct themselves.

Because it takes a shift in mindset. So a lot of contractors start, you know, with themselves a truck and maybe an assistant, and that turns into three guys, five guys, ten guys, and they still see themselves as an operator, an electrician, a plumber, an HVAC technician, and they haven't really made the shift. to being a owner-operator. They're here. They need to be thinking about owner-operator. And then the next shift up is they're the investor-owner, which is entirely a different thing. So the example I like to use about this is let's imagine you're a captain in the Navy and you have a 50-foot boat and the crew is 10, and you're the most qualified trained engine room guy. How often is that captain in the engine room with tools? All the time. He's the guy. Other people are cooking, they're doing other things, right? All right, so now let's make you the captain of a 150-foot boat, and now the crew is 50. How often should that captain be in the engine room with tools? Maybe if there's a fire, an emergency. So the role, the job is still called captain, but what that captain focuses on, what leadership looks like, what the job requires is very different. at the 150-foot level than at the 50-foot level. So let's make one more leap. Let's make you the captain of an aircraft carrier. And now there's 2,000 people on board. How often is that captain in the engine room with tools? Never. Yeah, hopefully not. He's there to give somebody a 20-year certificate because now that captain has a guy who manages the guy. And so that means that captain who started as the 50-foot boat guy has somehow graduated, learned. What is required of the role captain, business owner, well, that role changes as your business scales. And so many business owners have never made that transition. They're still kind of stuck in the mode of, I'm a guy and I'm an HVAC tech and I just happen to have a bunch of other guys working with me and they've never shifted and recognized, no, you're actually a leader. And what does leading mean? And how much of your time do you spend leading? So they're still kind of operating as if they were one guy in a truck and they just have five and they just do what they did but times five instead of recognizing there's a requirement to shift, a requirement to think about what they do in a different way.

So when I think about coaching, it's got three components to it. So business coaching is about helping the business grow systems, tools, and strategy. It's also about personal coaching. And what I mean by that is mindset, skills around leadership, communication, delegation. And then the third component is accountability or holding you accountable for the stuff you say you're going to do. Frank truth of most business coaching is most business coaching is personal coaching in disguise. The system is relatively easy. The things that you need to implement, the harder thing is to make the shifts. Well, first of all, in terms of your skills, leadership, communication, delegation, as well as the mindset shifts that you're talking about. Those are the harder things. First of all, recognize that they matter. And then to actually do the things it takes to. to make that shift happen. If there's any one thing you take away from this call, do as Brad does, go to windshield university, spend, you spend a lot of time in your truck. You spend a lot of time driving instead of listening to sports radio, put audibles. Great, man. You can have a podcast. They're great. Why don't you learn? And you can't out earn your learning. If you want to earn more, you need to learn more. Where can you learn? Well, Winchell University is pretty handy. You're taking the dog for a while. Listen to a podcast at the same time.

Well, you can, but why don't you make this deal with yourself? In the morning, on the way to the office or to your first customer, listen to something you can learn from. On the way home, at the end of the day, you want to decompress, listen to music. You know, just because I've asked you to take an aspirin doesn't mean you have to take the whole bottle.

Yeah. Agreed. Find a, um, environment or system that works for you.

There's a great story I like to tell about a guy named Sean Aker. This guy's a stud. He's been interviewed on Oprah and Brittany Brown and written several Amazon bestseller books, consulted in a bunch of different countries. So my point here is the guy's a stud, and he wanted to learn to play guitar. So he put a guitar in his living room. But every time he went in the living room, the default action was to pick up the TV remote. because he just wanted to veg out. And six months later, he hadn't made any traction on learning to play guitar. So then he decided to change the environment. What he did is he took the batteries out of the remote, put it in another part of the house,20-second walk away. Guess what happens now when he walks into the living room? The easier thing to do is pick up the guitar. So if you're currently not getting the behavior you want, it's because your environment allows that behavior to exist. Think of it because your discipline, my discipline, we don't have, none of us have enough discipline. That's a myth.

Yeah, James Clear wrote a book called The Atomic Habits. And one of the things he did is he wanted to drink less beer, which is not the same as no beer. So what he did is the beer used to be in the door of the fridge. You'd open the door. It's easy to just grab one and kind of thoughtlessly. So what he did is he put the beer in the back of the fridge. So that meant he had to kind of pull out the leftovers and the box with salad in it. And now there was a bit of like a little speed bump, a little strain for him. And that, even though it was like five seconds, that was enough for him to be more thoughtful. Do I really want this additional beer? So it's another example, like the book on the pillow, of things that you can do to set up the environment to encourage the behavior you're looking for.

Well, what a lot of business owners think is delegation is they'll abdicate. And what that really means is that you'll ask someone to do something without any support, guidance, feedback, training, nothing. And now you're surprised why you're not getting the results you want. So there's a bunch of different reasons that this happens, one of which is a lot of business owners are what. I'd call a hub and spoke manager. So they're the hub of a wheel. The rim is the business and the spokes are everybody who rings, pings and dings the owner every single time there's a question or a problem or something that needs to be handled. And in the beginning, owners are like, well, this feels good because it's important. And we get a little endorphin kind of rush. But over time, what happens is owners complain, like, why is nothing ever happening? Why do I have to be there for everything? Nothing. Well, it's because you've trained them that way. You've set the expectation that they've got a problem, they call you, they get an answer, and they're off with it. And so they know that if they were to actually make up something on their own, they're probably going to be in trouble with you. So part of it is you induce it, you create it to. So one of the ways that you can change that is change how you respond to those rings, pings, and dings. The next time you get a phone call or a text or someone asking that question, there's a couple ways to eat. If I wasn't here, what would you do? Listen for an answer. If it's about 80% in the ballpark, go with it. Even if it's not entirely perfectly right, give them the signal, the clue that they can think for themselves. Or another approach is a thing called a 131. So if you're going to call me, you can, no problem. But you've got a sentence or two to explain what the problem is. So I need you to define the problem. Then I need you to describe three possible answers, three solutions you've thought of. And then you're going to make a recommendation on which one you're going to go with. One, three, one. And so in that way, you're actually teaching people how to think for themselves and which of those three ideas you're supporting. And so that breaks the chain of the rings, pings, and dings. The other thing is delegation means that you have expectations, and often those expectations aren't very well documented. So let me ask you, Mr. Business Honor, would you get on an airplane if you knew the pilot didn't do the pre-flight checklist? Of course not. Oh, no. Would you have an operation, let's say heart surgery. Now, here we have a surgeon,10 years of training, university, internship, highly... trained, superior intellect IQs, smart, smart, smart. And yet they're doing operations where they started with 30 scalpels and now there's 29 and they wondered what happened. So would you allow open heart surgery if you knew the surgeon didn't have a pre-operating and post-operating checklist? How do they get those French fries to taste the same in your town or mine? The fries are made by a 16-year-old, and the parents of the 16-year-old can't get him or her to clean their bedroom. How do they do that? They have great systems. There's the process. Here is the recipe. Now, a lot of business owners will say, well, I'm not making French fries. I'm not doing the same thing, you know, making the same product time and time again. Well, of course not. But here's the thing. The process you use. to install kitchen cabinets, to produce, manufacture, install kitchen cabinets, that process has to be repeatable. Now, the outcome, the actual cabinets in this case, or the finishes, all of those details change from time to time. But if you have to make it up every single time, you can't scale that business. In fact, you're delivering. problems every single time. So how do airplanes get off the ground and back safely? They have a checklist. This is the systematic way we go through the process of starting an airplane. And here's the systematic way we end that flight. This is what we do in surgery. This is what we do when we start in a construction project. If you don't have that, that's why you're saying to yourself, I can't trust anybody. You can't trust anybody because you're trusting people, not systems. Systems run the business. People run your systems. You lead your people. And if you're not getting the results you want, it's one of those three things isn't working the way it's supposed to. Systems run the business. People run the systems. You lead your people. And we've already talked about some of the gaps that happen with leadership. So what I'd say is delegation means that you provide appropriate training, appropriate instructions, appropriate processes. appropriate coaching, support, feedback, and then you're going to get work done at the level you need. And if you're not getting the work done at that level, it's because you're not doing one of those five things correctly.

Well, you know, there's a current example of this in the news, the NFLPA. The NFL Players Association just had its executive director resign. And he resigned before he got fired. And the reasons were that he was audited and was discovered he was using the corporate credit card to go to strip clubs. So it can happen to boot collar businesses, but it can happen to all kinds of businesses. And what you're describing, Brad, is there has to be a thing called segregation of duties. So one person can prepare the check. Another person has to authorize that check. So in the old days, that was easy because we wrote paper checks. But nowadays, most banks have electronic facsimiles of that so that one person can prepare all the transactions and the payments. But you, the business owner, or a second party that you trust is the one that reviews and agrees and authorizes the actual release of the money. If you've got one person doing both of those things, you're almost certain that that's going to lead to trouble. Oh,

Maybe it wasn't a good person, but it almost certainly, if you've got 10 people behaving that way, all 10 have one thing in common, and that's you, the boss. That's true. Maybe you're the one who's the problem. Maybe it's something you're not doing in the way it should be being done.

Yeah, that's a great way to think of it. What responsibility do I have in this circumstance that allowed this situation to evolve the way it did? What's my responsibility in that? We know, and it's easy to figure out what that other person did, but what part of it do you have to own? What is it about the system that allowed that behavior to occur?

If you want to do an even better job, get a third party to do that interview.

Because if you do it, that still will have a bit of a guarded conversation. If you have a third party do it who's skilled at that conversation, you're going to get fantastic feedback. You may not like all of it, but you'll get feedback that'll be helpful and actionable.

Well, let's talk about a practical example. So when I start with a business owner, I'm certain that they're spending five to seven hours a week doing stuff they don't want to do. They're doing. And what I call that is the oh shit list. So tell me what's on your oh shit list. What's that? All the things that you do that cause you to think, oh crap, I have to do payroll. I have to do invoicing. I have to do payables. I have to do whatever it is, whatever causes you to say I have to and you're, it's tedious or odious or you don't like doing it. That reaction is your clue that you shouldn't do it anymore. So let me. Put it to you this way, Mr. and Ms. Business Owner, do you have a virtual assistant? No. You don't? No, I don't trust you. Here's the news. If you don't have a virtual assistant, you're the virtual assistant and you're crappy at it. So let's think about this for a second. What's your time worth, a business owner's time? They may be charging themselves out at 100, but notionally it's 200 bucks an hour. Let's just say that's the value, notionally speaking. Well, then why? Are you doing work that someone will do for you better than you? Not as good at better than you, and they'll do it for 20 bucks an hour. Why are you doing that work? Well, first of all, you have to kind of step, remove yourself from the day-to-dayness of your business and come up with that list. What are all the things that I do every day that aren't the highest and best use of my time? Or put it a different way, what am I doing that creates the most value for my business? In my case, what that happened to be is the thing that I do that creates the most value is talking to clients or prospects. So if it isn't one of those two things, I don't do it anymore. Literally, if it's not one of those two things, I don't do it. It's getting done. Someone's doing it. They're doing it actually better than me. And that frees me up to do the thing that generates the most value. So for lots of business owners, it's the work they're doing to lead their teams and the work they do to acquire customers. If you had more time to do that kind of work, what I mean by that as an example is how many business owners like doing estimates or quotes? Not very many. Well, why do you have to do the tedious part of the acquiring customers? of getting in front of a customer, having the conversation with a customer, outlining the goals of a project, well, that's work you ought to be doing. But once that's been done, someone else can do the tedious part because you can systematize the process of building estimates, of building quotes. That's a process that can be duplicated, repeated, time and again. Yes, the particulars, the inputs have to change, but... Those inputs would be a 20-minute conversation between you and the person you have in charge of estimating. There's a site you're probably aware of called Upwork. And Upwork is a place on the Internet where freelancers of all kinds make their services available. My virtual assistant is in the Philippines. She's fantastic. And she works at a fraction of what it would take for me to hire that equivalent person in North America. Your bookkeeping can be done. Mine happens to be in Venezuela, the bookkeeping. It doesn't have to be there. And the $10 an hour that I pay that bookkeeper is real money to them. So I hired the VA, $10 an hour is what I started at. And when I hired that VA, I was kind of embarrassed. I thought, oh, my God, I'm paying like babysitting money. But I looked it up, and the average income in the Philippines is $5,000 a year. If you're paying someone $10 an hour,2,000 hours is a standard work year. So 40 hours a week,50 weeks,2,000. That person's getting $20,000, four times the national average. So not only do we get the benefit of arbitrage in terms of pay, my VA has a four-year degree in information technology. So you get the very top of the talent pool when you're hiring someone through these freelancer sites. from some of these other parts of the world. So there's no reason at all that you shouldn't have a virtual assistant. They'll free up your life. Even if you don't earn the extra hour and you get an hour back of your life to spend with your kids or your spouse, that's well worth the investment in getting help around you. So anything that causes you to say, oh shit, there's an answer. There's somebody who can do that work for you. who's better trained and qualified, and will do it at a fraction of what you'd have to pay yourself or what you'd pay someone domestically to do that work.

Well, what I'd say, if you're saying that to me or you're saying that to yourself, you're jumping over dollars to get to Nichols. Yes, it's an expense, but what does that free you up to do if you spent $100, let's say $150 for 10 hours of VA work? and that was 10 hours a day, you were free to do something else, what would you do with those 10 hours that would produce more value? If you got one more customer every two weeks because you had 20 hours available to look after customers, would that pay for the $300 that cost you to hire the VA? It's not a cost. It's an investment, and the investment pays dividends and binges and hundreds of dollars. You're not jumping. You're jumping over Benji's to get to dollars. It's it's bad. It's false thinking. Yeah. And there's a fear around it.

Let's talk about one of the first few words that come to mind for you when I say the word money. So how does an employee think about money? They think about a salary. They trade their time for money. So how does a self-employed person think about money? Well, they make money. It's a different word, isn't it? They're not trading. They actually create money. So how does a business owner think about money? Well, they have an arm's length entity from which... They receive profits. How does an investor think about money? They think about return on investment. And so how does an entrepreneur think about money? They don't work for money. Money works for them. So you know the story of the guy who wins the lottery, and five years later that guy is broke. Because the average middle-class person, what do you do with money? You spend it. You buy trucks. You buy toys. And five years later, that guy's broke. Now, if I gave that lottery winning to Warren Buffett, what would he do with that money?

yeah. So if you're defining value in terms of using tools or value gets created in lots of different ways, how often is the owner of a McDonald's restaurant in the restaurant? As little as they want.

Because they're an investor. They're investor owners. And so they think about value differently than you. And if you're feeling guilty, it's likely because you haven't yet recognized or developed the mindset of what it means to be an investor owner. And that value can look differently at that level than it does when you are chucking a truck, if I can use a crude phrase.

That's exactly right. So for them, creative usually involves tools and materials. We're now talking about value in terms of ideas, right? In terms of ideas and being able to execute on those ideas. Jeff Bezos started with a door. on saw horses. That was his desk. And his idea was he was going to sell books on the internet. And he kept pushing that idea to today. He's one of a handful of the wealthiest guys. Now, why is he that wealthy? Because he created that much value. He only owned 16% of Amazon. In that process of creating that value, not only did he create riches for himself, but created riches for tons and tons of people that were part of the process of building Amazon. Yeah,

You know, I'll take this in a little bit of a different direction. So my coaching business is called W5 Coaching. And I've already described the Socratic method of teaching, and that means helping people figure it out for themselves. And how do you do that? Well, you guide a conversation through the questions that you consider, questions that you ask. And the five core questions all start with a W. Who, what, when, where, why? And so that's the essence of coaching. And if that helps you remember W5 and what it's about, then that's the experience that you'll have. And so the question you might have asked is what's your style of coaching? And it's the Socratic method.

There's a podcast I'm going to recommend called Built to Sell. Okay. So John Warlow did a book called Built to Sell and it was based on it. It's written in an apocryphal kind of style, but it's based on his experience of growing and building a business and wanting to sell a business and then learning that the business at that stage wasn't very sellable and he worked at it for another three years. So Built to Sell, there's 300,400 episodes every week. It's a conversation with a business owner who built a business and eventually sold that business and all the lessons along the way of what it meant to... to start, grow, scale, and prepare that business for ultimately a sale. The podcast sometimes is about founders. Sometimes it's about acquirers, buyers of businesses. Sometimes it's about what it's like after you've sold your business and the mindset shift that takes place. And it also does a lot of teaching about how to think about negotiating and so forth. It's one of my go-tos each week is to listen to the current edition every Thursday. What's the Built to Sell episode this week?

W5 Coaching, I'm easy to find. John at w5coaching. com, w5coaching. com. Just remember the Socratic method and who, what, when, where, why.