Scared Speechless – Interview with Steve Rohr
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Episode Summary
Steve Rohr is a communication expert, speech coach, and author of the book, Scared Speechless. On this week’s episode, Steve offers quick tips on how to improve your speech to investors and shares advice on how to reduce anxiety and nervousness before you get in the spotlight. Remember, the key to presenting a fantastic speech is practice, practice, practice!!
Scared Speechless – Interview with Steve Rohr
Hi. Welcome to The Successful Pitch Podcast. I’m honored and thrilled to have a personal friend as the guest today. His name is Steve Rohr. He is the co-author with Dr. Shirley of an amazing book called Scared Speechless: 9 Ways to Overcome Your Fears and Captivate Your Audience. Since this is a podcast all about pitching, we need to know how to captivate our audience and not be scared and come across confident.
Scared Speechless: 9 Ways to Overcome Your Fears and Captivate Your Audience
Steve is a college professor and works in the entertainment public relations. Currently, he’s the show publicist for the Oscars, if you can imagine what that job is like. His involvement in public speaking spans two decades. He doesn’t look old enough to have done that. He holds an MA in Communications from Arizona State.
For three years, he co-hosted a psychology show with his co-author, Dr. Shirley. This is his first book, but this is not his first time at the rodeo on helping people be good in front of other people. Steve, welcome to the show.
Thank you, John. I’m happy to be here.
One of the things I always like to have our guests talk about is how did you become such a successful publicist and what made you want to write this book? Take us back even further, now you’re teaching people how to be good in speaking, but when did you decide that you wanted to be a good speaker?
Yesterday, actually. It’s about time that I’m good at something. No, actually, I was pretty shy as a kid, to be honest. You know me, John, but if you were just to meet me out in the world, you would think that that would be a huge lie.
Actually, I was very, very shy as a kid and couldn’t really find my way. I eventually wandered into a drama/speech class in high school and really found my tribe. People were just as weird as I was and I fit right in and learned the skills that actually have propelled me to where I am today. I credit everything that I have today to my skill building in public speaking so many years ago.
That’s the pitch there. Along with that, I never planned to be a publicist. It never occurred to me to be a publicist as I was wandering through college and then started in business. I started in television first, in television news, and worked in news for a couple of years and then fell into publicity and have been doing it for 15 years. Representing talent, clients, authors, experts, and the like.
Scared Speechless: Dr. Shirley and Steve Rohr
Then did this psychology show by accident as well. My life is just full of these accidents. With Dr. Shirley, who is a fantastic psychologist, one of the most noted Latina psychologists in the country. She’s been all over TV. Dr. Drew, the doctors and their like. Just started out as her producer and suddenly found myself on the air. We ran for three years.
One of the shows we did was about public speaking and the fear behind public speaking. Because nobody really talks about it. Everybody says, “Yeah, I’m super nervous,” but nobody explains why you’re nervous in a concise and accessible form. You’ve got the textbooks out there written by academic people and then you have a lot of books online and everywhere else that are public speaking books.
But, guess what, John? They’re not really written by public speaking experts, believe it or not. Many of these books are written by authors who have a business background and international relations, French even. While that’s fine, it just really kind of struck us as odd.
We combined the two worlds. We combined the psychology of public speaking with the how-to of public speaking in what we think is a pretty accessible, we think, funny, because we think we’re funny, read for people called Scared Speechless.
The title is fantastic, by the way, because it’s memorable and it grabs your attention, and that’s what you have to do when you’re pitching. Congratulations on a great title.
Thank you.
One of the things you talk about that I really thought was so fascinating is we all know we get nervous, or the adrenaline kicks in, but we don’t really know why. You talk about it from a historical point of view, from our brain. That’s standing out used to mean we could possibly get rejected, and rejection would lead to being ejected from the tribe. Can you walk us through what our brain is doing?
We’re going way back, John. Before the 1980s even. It’s way back. The ancient times for our ancestor. We have, in our noggin, something called the primitive brain. It’s pretty primitive and it hasn’t changed for 700 years. It is the defense mechanism part of our system that alerts us to danger.
That’s our fight or flight response. This has been in our world forever and ever and ever. Back in the olden times, it would trigger us not to go into that dark cave where we could possibly be eaten, or pet that very hungry looking tiger. It really was a great survival mechanism for us.
Scared Speechless: Public speaking is the number one fear in America.
Now today, we’re scared of public speaking. It’s the number one fear in America. Death is second. Spiders are on that list someplace. Definitely, public speaking is the number one fear. Guess what, it has to do with our primitive brain, because our primitive brain is fantastic, yet unfortunately, has not evolved very much in 700 million years.
It actually thinks that going to that cave or petting that hungry tiger is the same thing as standing up in front of a group of people and speaking. It cannot tell the difference. We are terrified. It’s a good thing. It’s a good thing that we’ve got nerves because it keeps us alive.
It’s kind of a tricky thing when you’re standing in front of other people or about to pitch. Your brain is saying, “Uhh, these people are going to eat you.” You have to use a modern adaption and you have to think as a modern sensible person to say, “They’re probably not going to eat me. They could bite me, but they’re not going to eat me.”
You talked about the rejection aspect of it and the tribal connection. We used to wander all over the Earth in tribes. We didn’t have cities and we just kind of had our group and we stayed with our group for our entire lives. It was a matter of survival.
Scared Speechless: Outside of the tribe, you have no protection. “You must stay in the tribe, you must stay in the tribe.”
If you got kicked out of that tribe or got lost somehow and were separated from your tribe, you stood a very good chance of being killed within minutes. Because outside of the tribe, you have no protection whatsoever. Our primitive brain then says, “You must stay in the tribe, you must stay in the tribe.”
When we get up in front of people to speak, oh gosh, we do not want to be rejected from this tribe. We don’t want to be rejected, we don’t want to stand out too much from the tribe. Our primitive brain then goes into high alert and says, “Look, buddy, you cannot be rejected from this tribe, so run away, hide in the bathroom, do whatever you can to avoid speaking in front of these people.”
Again, you have to accommodate with your modern sensible self to say, “I’m not going to get kicked out of this tribe. Number one, is this the tribe that I want to be in? Number two, I’m not going to spend the rest of my life wandering around the parking lot on my own.” It’s just not going to happen.
What you’re writing about and saying to us is so valuable, Steve, because if we realize that we’re programmed to panic in these situations, then we don’t get surprised when that fear comes up. We just go, “Oh, this is part of my programming, but I’m now in charge of my body, not the other way around. I get to tell my body, Look, this is not a dangerous situation. Don’t worry about the rejection.”
In fact, you also have some really great things to do that also counter any fear that might happen. If you’re scared speechless, in other words, if you go blank and your mind doesn’t know what to say, you’re so scared you get speechless, what is one of your big tips there?
First of all, I think that you can preempt your primitive brain a little bit in this regard, because we know that when we get scared speechless, it’s a physiological change that happens in our body as well. That’s why we sweat, that’s why our mouth goes dry, that’s why our legs start shaking uncontrollably, because it’s a physical act. It’s a physical event.
Scared Speechless: Stretch like you’re going on a run. It signals to your body that something is about to happen.
I always encourage people to stretch out. Not just warm up your tongue, but warm up your entire body. Stretch like you’re going on a run. It signals to your body that something is about to happen. It gets your body primed to take on that fight or flight so that, suddenly, when it does happen and you’re in front of people and your shoulders go to tense up, guess what? You’re already loose. You’re already warmed up. You’re ready to go.
The second part of that story is, you go blank. This is a big fear for people. Huge fear for people because we think that, number one, the audience is our adversary. We think that the audience is judging us. Why do we think that? Because we judge people all day long. Of course, we think that and we put ourselves in the audience position and we think we’re going to be judged.
Here’s the truth, John. Here’s the absolute truth. The audience is not your adversary, not even close. Here’s why we know this is true. Number one, if you’ve ever sat in a room where a speaker starts to struggle, they go blank, they start to panic. How are you feeling at that time as an audience member?
You feel empathy for them. You want them to figure out what they want to say because you want them to get better.
That’s right. You go into immediate secondhand embarrassment. Maybe now you’re sitting on the edge of your seat and you’re trying to will words into that speaker’s mouth. If you were to look around at that point, the rest of the audience would be doing the same.
The audience is not your enemy. The audience wants you to succeed. They are rooting for you. They are championing you. When it comes to pitches, same same. Nobody wants to go into a pitch meeting and not have something great happen. Their wish, their desire, their hope is to go into a pitch meeting and hear something that will be a solution for them. A financial solution, a creative solution, any kind of solution. They’re going in for that purpose.
[Tweet “Investors are not the enemy, they want you to succeed.”]
Along the same line, when was the last time you walked into a room where there was a speaker and you said, “My gosh, I hope this person is really boring.”
Never. We’re going to tweet that out from the show, by the way. That’s such a great line. “The audience is not your enemy. They are rooting for you.” Even if the audience is investors, because they are looking for a good deal. It’s their job to hear a good pitch and make money and they hope that you’re the next person in. It’s almost like a casting agent looking for a great actor to be a star in a movie. They want to see good additions.
That’s absolutely right. Of course, if you don’t want a boring speaker, what do you want? You want a lively, entertaining, great speaker. You want to be entertained. That’s why we know that audiences are not your enemy.
If you go in with that mindset instead of going into it thinking, “Oh my gosh, well they’re going to rip me to pieces.” No, they’re not at all. Then, the chances of you going blank go way down.
[Tweet “Scared Speechless: If you do go blank, you ask a question.”]
If you do go blank. Here’s our trick, you ask a question. You ask a question. They don’t know what your speech is, they don’t know what your pitch is. They have not been writing it with you or practicing it with you. They do not know where the pauses are. If you come to a place where you just go blank, it’s okay, because they don’t know that isn’t some dramatic pause you’re taking.
Right. You write about it being a rhetorical question even. They don’t even have to answer. It just gets them thinking.
You go back to the last thing you said and then you ask a question. You ask either a rhetorical question or you ask a real question. Here’s how this works. The audience are humans, and as humans, when we’re asked a question, we automatically go into answer mode.
This is what happens. Suddenly, the audience is no longer focused on you. They’re inside their head, coming up with an answer. This will buy you time, and perhaps, a lively discussion along the way. Whatever it does, it’s going to take the pressure off you immediately so you can get back on track and move forward.
One of the things you write about that I’m a big proponent of is the superhero pose. Can you tell us what the science is behind that and what the advantages of doing it are and what it is?
We always think that our brain has to command our body. But, what if our body commanded our brain? What if our body sent signals to our brain that we were okay? What about that? This is true. It can happen.
The superhero pose is standing upright, being confident, even when you feel like maybe you’re dying inside. What this does, it just gets your body to send a signal to your brain to say, “We’re okay. We’ve got this. We’ve got this.”
Scared Speechless: The superhero pose is standing upright, being confident, even when you feel like maybe you’re dying inside.
One of the ways you can see this is true is if you’re ever, say you’ve got to go to someplace that you really don’t want to go to. A crappy meeting with crappy conversation and crappy food, and you’re in a crappy mood. What if you smiled like a crazy fool in the car on the way there. Crazy big joker smile. Force yourself to smile.
By the time you get to that meeting, I bet you that you will be in a better mood. It’s so much easier to smile at that point, and your attitude will be changed by the time you walk in that room.
We know this. We know that a power stance, we know that your body can also send signals to your brain, we know the smile works. Instead of thinking of it brain to body, think of it body to brain. I think you will be pleasantly surprised by how you feel and how confident you become.
I love it. One of the things I’m a big proponent of is telling a story that makes your pitch memorable and pulls at the heartstrings. Can you talk to us about your thoughts about storytelling, and in particular, the underdog effect?
[Tweet “What is the underdog effect?”]
Absolutely. Storytelling is one of the oldest ways that humans communicate. Back in the days before the 80s, we had to sit around and tell stories, and that’s how we shared our history, that’s how we shared the social moirés of the time, how we made sense of the world and our place in it.
Scared Speechless: Storytelling is absolutely programmed into the human brain.
Storytelling is absolutely programmed into the human brain. It’s, again, the most powerful way you can communicate. Storytelling in pitches and speeches will automatically resonate with your audience. Because we are programmed, as an audience, to listen to your story and then try to find references in our own life, in our own stories that match up. Automatically, we’re on board.
Guess what? We remember stories. If you’ve ever heard a speech or pitch, and that was a great speech and you thought it was a great speech forever and ever and ever. I will bet you that you don’t remember one statistic in that speech, but you might remember somebody talking about their grandmother, or you might hear them talking about how they struggled to achieve something, which is the underdog story. The underdog story is incredibly powerful as a rhetorical tool.
The underdog story is, of course, just what it sounds like. Somebody who is trying to achieve something with insurmountable obstacles in front of them. The underdog does not have to win, by the way. He does not have to win. Studies have shown that we are so rooting for the underdog that we’ll even root for a cartoon character or an animation to win.
There’s a study at one university where they showed two animated sequences. The first sequence was this little guy trying to push this big stone up a hill. Didn’t make it. The second animated sequence was another animated guy pushing a stone up the hill and doing it pretty easily. Then, they asked the participants who they were rooting for. To a person, they said, “The guy who was struggling. The guy pushing this animated, animated, stone up the hill.”
[Tweet “At some point in your life, you felt like the underdog. You could relate to it.”]
What does that tell us? It tells us this is a very powerful rhetorical strategy. I believe it’s powerful because at some point in our lives, at some point in all of our lives. I don’t care if you were born with a silver spoon in your mouth, or very humble circumstances, or what color you are, or what flavor you are. At some point in your life, you felt like the underdog, and so you could relate to it. You can relate to it.
That’s so valuable because investors are looking for you to be a little bit vulnerable in your stories of a time you had to persevere and pivot and not give up. You can’t come across as if you’re perfect and you’ve never had a challenge and everything’s just been easy breezy your whole entire career.
Because they want to hear about you being the underdog and coming out on the other side. Because they know there’s going to be bumps in the road and they’re looking for you to tell them a story that makes you memorable and that they want to invest in you, and that’s a great tip.
That’s absolutely right, John. It’s about resilience. We value resilience, people who are resilient in their life. Look, investors are human beings. You cannot sit in a room and look at people as a dollar sign. You have to look them as real people, real people who’ve had struggles. Because chances are very good, those people are not sitting on all that capital because everything was smooth sailing in their life.
Each one of them has had to struggle and overcome some incredible odds to get where they are. They want to know that you are resilient enough to keep on going when the going gets really tough.
[Tweet “Scared Speechless: Investors want to know that you are resilient enough.”]
Yes, that’s so important. Can you talk to us about self-talk and the way that we talk to ourselves and what we should be saying to ourselves before we get up and pitch or give a talk?
John, we’re terrible when we talk to ourselves. We talk to ourselves all day long. This is true. Some of us talk to ourselves more than others, quite frankly. We know, from research, that when we talk to ourselves, we are teaching ourselves things. We’re helping ourselves, we’re guiding ourselves along. If you do this little trick, next time you lose your keys, John, not that you would.
Oh, I’ve done it.
Scared Speechless: When we talk to ourselves, we are teaching ourselves things. We’re helping ourselves, we’re guiding ourselves along.
Okay, I do it a lot. If you just go around the house saying, “La-la-la, expletive, expletive, expletive,” that’s one way to do it. The next time you lose your keys, just say this, “Keys, keys, keys, keys,” and you will find your keys faster. You will find your keys faster. But, here’s the thing. We talk to ourselves, we’re not very nice. In fact, we’re pretty terrible, the way we talk to ourselves.
Women will, at some point during the day, tell themselves they look fat. Guys will tell themselves they’re an idiot or they’re a loser. We’re teaching ourselves that too. It’s one of those things where you have to look at it and say, “Would I ever say this to my child? Would I ever tell my child that they look fat, or they’re a loser, or they’re an idiot?” I would guess not. I would guess not.
If you’re willing to do that as a parent, then God help you. But, we’re not going to do it. Yet it’s so easy for us to do that to ourselves. We need to stop because when we’re going into a situation where we need to control our nerves, manage our nerves, and we need to really do our best, we don’t need another voice, especially our own, saying that we’re going to mess it up.
You need to stop. Here’s my trick for stopping, because it’s not easy, but here’s my trick. You stop. You stop. Here’s what I ask, I ask that tomorrow, just tomorrow, the first time and only time that you say something negative about yourself, I want you to stop. Just stop.
[Tweet “Scared Speechless: Feel like you’re in control to be successful in pitching.”]
You can turn it around and say something nice. You can just stop. Whatever it is, just tomorrow, just one time. After that one time you’ve done that, you can curse yourself out for the rest of the day, go to town. But, just that one time will give you the awareness that you need. Because, at that point, I want you to notice how you feel. I bet you feel like you’re in control. That’s the way you need to be to be successful in public speaking, or pitching, and in life.
I love it. Awareness gives us self-control. Just become aware of what you’re doing. If you’re unconscious and unaware, you can’t fix or change or improve your nerves, or your negative self-talk. It’s really, really helpful.
There’s another voice in our head too, John, that I just wanted to touch on with you. It’s the inner critic. The inner critic in our head that says, “You’re not good enough, you’re slow, you’ll never make it.”
This voice is so excellent, excellent at reaching us the moment we need to be at our very best. It will get louder and louder and louder, because it’s part of our primitive brain. It’s our primitive brain shouting at us to get away from the hungry tiger.
Because, again, the primitive brain doesn’t know the difference between a hungry tiger and pitching. It feels like we’re in grave danger. It makes sense. The closer you get to that meaning, the louder and more adamant it will become, this voice that says, “You’re a loser, they’re going to hate you, you’re going to fail, you’re going to go blank, you’re going to mess up, this is going to be disaster,” because your primitive brain wants to save your life.
Scared Speechless: Talk back to your inner critic.
Here’s what you do. You talk back to it. I’ve had times where this primitive brain was yelling at me because I was in such grave danger. No danger at all, but grave danger because I was taking a risk. I was walking into fear. I shouted it down in my house. After the police left. No.
I shouted it down and told it, “Go away!” You can scream at it, you can swear it, make it go away, and I promise you it will. It will come back, but you can make it go away. If you are not a screamer, you can negotiate with it, and say, “Look, I get it, primitive brain. I get what you’re trying to do. You’re trying to help me. I get it. It’s natural. But can we wait? Can we put a pause on that for a second? Because I need to go and do this very important thing. You can come back later, you can come back tomorrow, or whatever. But, at this time, I just need you to take a minute and step out of the room.” That will work too. It will work too.
I love that. It’s a great conversation you’re having with yourself. Elizabeth Gilbert talks about this all the time. She says putting fear in the backseat of the car when she’s still driving the car, not fear is driving the car. It’s the same kind of thing that you’re talking about. Two great speakers talking about a similar way to handle fear in different ways, but still really, really valuable, which just gives people the power to realize that they’re in control of their thoughts, not the other way around.
That’s right.
Can you tell us, Steve, about the importance of practice and what tips you have on practicing your speech or your pitch?
Sure. Most of us spend 99% of our time writing our pitch or writing our speech. We do this all the time. Then we spend maybe 1%, or maybe just three minutes in the car on the way to the pitch practicing it. Wrong.
[Tweet “Scared Speechless: It’s impossible to over-practice.”]
First of all, you can never over-practice. It’s impossible to over-practice. You know this because think about the last time you gave a speech or presentation. On the drive home, you probably thought to yourself, “I could have done it better. I wish that I had practiced a little bit more.” You can never over-practice. It’s impossible to over-practice.
Let me ask you a question that I sometimes get asked when I give that advice to people. “I’m afraid I’m going to sound like a robot if I over-practice.” What do you say to that?
Here’s the trick. Most times, we write our speeches, our pitches, we write them as essays. But we need to write our speeches and pitches to be said, not to be read.
[Tweet “Scared Speechless: Write your pitches to be said, not read.”]
Ooh, that’s good.
To be said, not to be read. English majors have a really tough time writing speeches and pitches because they want to use real sentences and they want to avoid jargon and they want to use huge words to be impressive. This is not the time. In English, you can get an A. In Speech, you get a D, because you need to write your speech to be said, not to be read.
We’re going to tweet that out.
Scared Speechless: Write your speech out loud to avoid sounding robotic..
Here’s how you can make that happen. You write your speech out loud. You don’t spend 99% of your time writing this speech and 1% practicing because once you get to that 1%, if you haven’t written it in a conversational way, you don’t have time to go change it again. So you’re going to sound like a robot. Every time you hear somebody give a robotic speech, listen to the words, and you will tell that they have not written this speech out loud.
By that I mean you sit down and you’re writing things out. You’re writing all your ideas out, and maybe you try saying it out loud. “Oh, wait a second. That doesn’t sound quite … Huh, that’s a little wordy, isn’t it?”
Then you go back and you adjust it. Maybe you can work out an idea that you’re writing down just out loud. “Oh, this sounds a lot better, or maybe I can use a more active word here, or maybe, this word, nobody’s going to understand this word. Maybe I should just cut to the chase.”
Let me just stop you there because that’s so important. I’m constantly telling founders, “Do not use acronyms or complicated words in your pitch, even if the investors understand it. You don’t want to confuse people because a confused mind always says no.” Keep it simpler than you think you need to. This is not the time to impress people with how smart you are with a bunch of complicated terms and words.
It’s a huge waste of time. It’s a colossal waste of time. You just need to really communicate with your audience. I’m glad you say that to your peeps, John. That’s really, really important. You write your speech out loud, you work it out. One of the tips I always say is you put one thought per sentence. You put only one thought in every sentence. This means that if you have to take a breath, if there are a bunch of commas in your sentence, you have far too many words. It’s one thought per sentence.
[Tweet “Scared Speechless: You put only one thought in every sentence.”]
Listen to newscasters, listen to broadcast people, especially on television, and you will hear them use one thought per sentence. The reason they do this is, moms are getting ready for work in the morning, dads are playing with the kids. In the background, you’ve got the news going on.
Your audience only has one chance to hear it, one chance to hear it, and to absorb what you’re saying. One thought per sentence. It’s a lot easier to use shorter sentences well. You can use one word. You can just use one word. When you’re writing a speech to be read, then you can’t just use one word. It’s improper. That’s why you always write your speech to be said, not to be read, and you write it out loud.
Let’s say one of the listeners has been invited to pitch to a room full of Angels and they have to stand up and give their pitch. It’s 10 minutes. How do you recommend they practice that?
A lot.
How? Should they stand up or should they just read it at the table? In the mirror?
Scared Speechless: When practicing your speech, you have to act as if you are actually doing the speech.
If you’re going to be standing up, you absolutely have to stand and deliver. You have to act as if you are actually doing the speech. If you have practiced your speech sitting down and even lounging on your couch eating popcorn, and by the time you get up to stand up to give your speech, it’s going to sound a lot different.
It’s going to feel a lot different, and your body’s going to go into some wacky shock because it doesn’t know what the heck is going on. But, if you have stood up and given that speech 25, 50 times in your living room, guess what? You have your body on your side then, and your body can do your bidding.
Nice. Steve, this has been so helpful. Where can people follow you on social media? What’s your Twitter and all that good stuff?
My Twitter account is @RealSteveRohr, and Instagram, @RealSteveRohr, and I’m on LinkedIn. I have 7,000 LinkedIn folks. Please join me. If you want more information about our book, Scared Speechless, you can go to DrShirleyAndSteve.com.
Fantastic. It’s been a great interview. My favorite line that we’re going to be tweeting out is, “A pitch is to be said, not read.” You’ve given us so many other great tips about how to deal with our fears and how to be resilient when you’re giving a talk, and most importantly, what we say to ourselves so that we don’t talk ourselves out of being successful. Thanks again, Steve, for being on the show. You’ve been an incredible guest.
It’s my pleasure, John. Thank you.
Links Mentioned
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Scared Speechless by Steve Rohr
@RealSteveRohr on Twitter
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Angel Investor Criteria – Interview with David Dotlich
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Listen To The Episode Here
Episode Summary
David Dotlich is the founder and chairman of Pivot, one of the world’s largest providers of customized executive learning for senior leaders of Fortune 500 companies. David is also the author of several books including Why CEOs Fail, Transitions at the Top, and Head, Heart & Guts. On this episode, David discusses some of the key factors that make a good leader, as well as why introducing new leaders into a company culture rarely works unsupervised.
Angel Investor Criteria – Interview with David Dotlich
Welcome to The Successful Pitch podcast. Today I’m honored to have David Dotlich, who is an author of Transitions at the Top, and he’s the founder and chairman of Pivot, one of the world’s largest providers of customized executive learning for senior leaders of Fortune 500 companies. He’s the former executive VP of Honeywell and the former founder president of Oliver Wyman, a delta executive learning center.
Transitions at the Top: What Organizations Must Do to Make Sure New Leaders Succeed
He has written many other bestselling books besides Transitions at the Top. They all have a theme about leadership. We’re going to do a deep dive into that. As if that’s not enough, David’s also an angel investor. David, welcome to the show.
Thanks, John. I’m glad to be here.
I always like to ask my guest, how did you get involved in leadership? In your particular case, what was your first, the idea to write a book about this and how did you decide you’re going to teach people to become leaders?
I started out taking people across Africa. Believe it or not, leading tours and guides, driving from Johannesburg to London for four months across Africa. I was a head of the group and of buddy of mine were running the company. We found the stress of travelling across Africa was not nearly as difficult as the stress of living together. Fifteen people for four months.
In that experience, I learned that it’s really all about leadership, that getting people to work together and work as a team requires leading, leading effectively. From there, I went back to school and then joined a big company. In every situation, I could see there was really leadership that made the difference.
Even in company performance, when I look at how well a company performs, usually it can be attributed to effective leadership. I’m always amaze John, that analyst don’t have much of a clue of how you analyze and understand and evaluate what’s good leadership inside a company today. But to me, it’s leadership that makes the difference.
How do you define what a good leader is? Do you have any tips for that?
Obviously you’ve got to have the willingness of people to follow you. Without any followership or willingness to follow, you’re probably not leading. To me, a good leader is one who can get the followers thinking that they’re doing it themselves. That idea was first talked about by Eisenhower who said, “The mark of a good leader is that at the end of the day, people say, ‘We did it ourselves.'”
[Tweet “Angel Investor Criteria: get the followers thinking that they’re doing it themselves.”]
Not only is it followership, but it’s actually people thinking they’re doing it. Obviously it’s towards the goal, achieving your goal. In the study of leadership, there are many ways to do it. There is no one way to be a leader, there’s a lot of ways to do it.
You’ve worked with companies like Nike and Johnson & Johnson and PG&E, these huge companies that, you coached them on how to be better leaders and become smarter with their strategy. Have you noticed a consistency across all these different industries?
Yeah, I think there’s a real effort to find, for each company, what kind of leaders they have, given where the business, they think the business is going, what kind of leadership or leaders they will need. Frankly, in all of those companies you mentioned, the definition of what is good leadership keeps shifting and changing.
If you think about the diversity or you think about being more global, or you think about working in a matrix, these were things that weren’t important 20 or 30 years ago that are now top of mind in these companies. Thinking about what is good leadership, and you can do this in your own company no matter how big or small. What do we got and what do we need? To me, that’s what talent strategy today is all about.
[Tweet “Angel Investor Criteria: What do we have and what do we need?”]
I love that. What do we got and what do we need, we’re going to tweet that out. That’s great. Analyzing what are your current assets and what do we need to get to this goal, right?
Exactly, from a talent standpoint and from a people standpoint. I’m an entrepreneur. I’ve started and sold two big companies. I’ve learned that you have to be very honest with yourself about the talent that you have, and then be even more honest about what do you think you need to get where you want to go. The hard part is taking the steps necessary to get there, whether it’s feedback, coaching, confronting people, firing them, all those things, take guts.
It does.
That’s what it takes.
One of the things that all the investors that I talk to tell me is it’s so important who is on the team, even more that the idea. In other words, we invest in the jockey, not the horse. I’m guessing you have some thoughts on that as well.
Angel Investor Criteria: Am I willing to invest in this person?
Definitely agree with that. When somebody shows me a business plan, the first question I ask them and myself is, “Am I willing to invest in this person?” Did they really get it in terms of how important talent and people really are, or do they think it’s all about the product or the technology?
Let’s say we have some listeners, which I’m sure we do today, that want to recruit the best people for their team, whether it’s a CTO or just salespeople, what is it that you think makes somebody tell a compelling story that makes top talent want to work for that particular leader versus another option they probably have if they’re on top?
I think it’s about fit. A lot of times, there are many talented people out there that may not fit the culture you’re trying to create. It’s very important to ask yourself, what kind of culture do I want and am I striving to build? Then, how do I find the right people to fit that culture? Some cultures can be very autocratic and hierarchical and very successful. Some cultures can be very supportive and team oriented.
One of the things we’ve learned is that there’s not necessarily one way to be successful in business today. There’s a lot of different ways to do it. I think if you’re an entrepreneur, you’ve got to ask yourself, what is the culture I’m trying to create, and then how do I find the right people that will fit that culture? Obviously, they have to be talented around skills and have an ability to contribute that’s exemplary.
[Tweet “Angel Investor Criteria: there’s not necessarily one way to be successful in business.”]
If you’re someone that doesn’t like structure and doesn’t like hierarchy and that’s the culture of the company, whether it’s big or small, you’re going to be miserable, right?
You are. You’re going to be miserable.
If you’re somebody who really likes being able to throw out ideas and brainstorm and not have to be judge if you come up with something that doesn’t necessarily fly, that it’s a safe place to share your ideas without being judged, and fear of being thrown under the bus by your coworkers, then that’s a whole different kind of culture that attracts a different kind of person, I would assume.
Angel Investor Criteria: Be very honest with yourself about what kind of culture you’re trying to build.
Absolutely. It’s definitely true. In working with entrepreneurs, one of the things that I see a lot, is that entrepreneurs who really feel the stress of the business and end up being very directive. They like to make decisions, they feel the pressure of needing to perform, and so they take charge.
Yet what they say is that they want people to take responsibility for the business. They want people who held accountability. They want people who they don’t have to tell what to do. But then they end up telling them anyway. That’s what I mean about being very honest with yourself, about what kind of culture you’re trying to build, and then finding people that fit that culture. Don’t fool yourself.
l like what you just said there, David. This whole concept of, if you get stressed out as a leader and you’re realizing you’re under pressure to hit certain goals or whatever the pressure is, and then instead of trusting your team to be proactive and help you solve it, you start dictating instead of delegating.
Exactly. I say John, having been an entrepreneur for 20 years, that is the hardest thing to do, is to carry the responsibility for the PNL personally but yet be willing to empower and delegate and trust others.
We have another little tweet there, “Delegate, don’t dictate.”
[Tweet “Delegate Don’t Dictate.”]
Exactly. That’s right.
And the alliteration that you gave us, thank you for that. Let’s talk about Transitions at the Top. This is your 12th book? Is that right?
Yeah, right.
Congratulations. You’re certainly prolific. What made you want to write this one, and who is this written for?
I work with a lot of companies, John. What we see is a very common pattern, which is, “We’ve got to change as a company. Let’s go hire person A because that’s exactly the kind of person that we need to change the company.” Companies do this all the time. They go out to decide and say, “We need to be more entrepreneurial. Let’s go higher in entrepreneur.” Then they bring that person in.
Systematically, the culture begins to extinguish the very thing that they wanted to go higher and change the company for. This is something that happens over and over and over. We need to hire somebody who’s going to change us and then we end up changing them.
[Tweet “Angel Investor Criteria: We hire somebody to change us but we end up changing them.”]
We were asking the question, “Why do so many of these particularly large companies hire very expensive people to come in and join companies, and then after six months or a year, they depart?” Sometimes it’s really expensive, and often it’s a sense of failure on the part of the company and the person that they hired to join. That’s what the book is all about.
I think a classic example of that is when Michael Eisner was running Disney and hires Mike Ovitz.
Yeah, exactly.
That didn’t work out.
That’s the textbook case. Ovitz was probably example A. Nike did the same thing. Many companies bring in external CEOs feeling that they need change and the CEO will make it happen, but then the culture takes over. What we found in doing the research on the book is that there are a few myths that people operate under.
Angel Investor Criteria: That period of adjustment, that sink or swim time, is pretty critical and can be pretty expensive.
One is, once we’ve hired this person, our job is done. All we have to do is get them to say yes. Another myth is, this person is really, we’re paying them a lot of money, he’s been successful in a lot of places, she really knows what she’s doing so she’ll be successful here, so we don’t have to worry about it. Or the third one is, why do we really need to help them? If they need help, they’ll ask for it.
What ends up happening, particularly when you bring somebody in, and this can be true on small companies as well, is that period of adjustment, that sink or swim time, is pretty critical and can be pretty expensive.
Let’s address each of those because I love it so much. This concept that you’re going to hire somebody to bring and change and then you try to make them change to fit your culture then nothing’s going to change. It’s almost like dating somebody and marrying them and say, “Now that you’re married, you have to change who you are even though the thing that I was attracted to in you, I don’t want you to do that anymore.”
Exactly.
That doesn’t lead to a successful life. This myth about, just because you’ve been successful on the past means you’re going to be successful in this situation. It’s almost like those warnings they give you when you invest in a mutual fund, right?
Right. Exactly.
Previous success doesn’t mean future.
Or we’re paying this person a lot of money, so he should know what to do.
And that they’re so smart, they don’t need any help. This whole onboarding process, I believe you’re probably a real expert on that from this learning center, aren’t you?
Yeah, we are, because a lot of times you got to get a conversation started about, not the person, but who are we. What is this person forcing us to think differently about and do differently? I was working with a big company in Europe that really wanted to hire a head of human resources to come in and bring together all the human resource functions in the business, which were highly decentralized.
Angel Investor Criteria: The person that is brought in from the outside, after a while, ends up getting blamed for trying to make change.
Large company, male executive committee, they went out and hire the female head of human resources to come in. She began in a very systematic way to bring all the functions together. Lo and behold, within three months, each of the business units were saying, “Wait a minute, we have our own human resources. Why is she trying to pull this all together?” On and on and on.
Pretty soon, the issue became her, not the strategy. This is pretty much how usually the script runs, is that the person that is brought in from the outside, after a while, ends up getting blamed for trying to make change.
Wow, it’s the very thing we hire you to do, we don’t like what you’re doing, and therefore you’re not a fit.
Yeah, and we thought we wanted it, but now that you’re doing it, we realize that’s not exactly what we want at all. Anyway, the book is about what can companies do to help people in this process of change. Some of it is having the right conversations.
Some of it is the senior leader or the CEO really getting involved in this process of understanding how people are transitioning in and out. It’s asking them how they’re doing. It’s having team conversations about the very issues that sometimes are most difficult to talk about. That’s what the book is all about.
I love it. Most people are afraid of change, aren’t they? Certainly, if somebody new comes in, they’re afraid they’re going to lose their job. Then they’re afraid, the excuse that nobody wants to hear is, “We’ve always done it this way, so why do we need to fix it if it’s not broken?” How do you help people with that?
I don’t think people are afraid of change, actually. I do think people really do like to learn. By and large, people embrace change if they understand the context and what it’s all about and what we’re trying to accomplish.
[Tweet “Angel Investor Criteria: People embrace change if they understand the context.”]
You really have to work to make change successful. You can’t just assume that people understand, particularly if you think about it. But in my experience, people don’t like change done to them, but they’re really open to change. They really are.
There you go. That’s a great distinction. I’m open to change but don’t try to change who I am, is that what you’re saying?
Yeah, or I’m open to change but include me in the change. I have my own ideas and thoughts as well. Everybody I need and almost every single company wants to make the company better. They want to do a good job. This is what drives us as people. Harnessing that energy is what leadership is all about.
You are the founder and chairman of Pivot, which recently sold to Korn Ferry. You have first hand experience about how you stay running your company. A lot of the founders fear that, “If investors come in, they’re going to want to replace me after I grow the company to a certain dollar amount because maybe they think I don’t have the skills to take it to the next level.” Do you have any tips for how do you stay running the company that you started and sold?
Pivot Leadership, a Korn Ferry Company
It’s a different skillset John, entirely. The skillset you need to build and drive a company and take responsibility for it end to end. You breathe, sleep your company all the time because you feel that emotional responsibility for it. It’s different than the skillset that you need to survive inside a big system. The first time I sold a company, I didn’t know that. I thought my job was to protect my baby, to make sure they didn’t carve it up, to tell them where they were wrong and how they needed to improve.
I thought my job was to really change the big system because we knew everything and we were doing everything right in our little company. When they bought it, I refused to drink any Kool Aid, anything that look like the Kool Aid. I wanted to change the big system. You know how that’s how that story ended.
You’re like David and Goliath a little bit there, right?
Yeah, exactly. This is what I mean by the skillset. The idea of working successfully in a large system requires a different set of skills. Getting along, negotiation, the long view, understanding where you have to compromise, working well with others, sharing responsibility for the business with others, all those things.
[Tweet “Angel Investor Criteria: Working successfully in a large system requires a different set of skills.”]
Let’s talk about that a little bit, because to me that’s what a really good leader does, is they don’t need to take all the credit all the time. Whether that’s a startup and attracting the right team. Don’t you think that if you have someone that’s willing to share the credit and acknowledge your contribution, that that’s how you create loyalty?
I do. I think you’re absolutely right. I think people suss out when a leader is really sincerely willing to share credit or just looking like they want to. Because our motives are pretty transparent to other people. You have to ask yourself, do I genuinely want others to get the credit or do I think it’s all about me? If you don’t answer that question honestly, then people will know. It’s really, you think it’s really all about you.
Right. Now, since you’ve done this twice successful and have written so many books on this, you’ve now become an angel investor yourself. Do you invest strictly by yourself or are you a part of an angel group?
Pretty much by myself. I’ve been asked to join a couple of angel groups but I’m pretty much going it on my own at the moment.
What kinds of things do you look for when you hear a pitch from someone?
Angel Investor Criteria: Typically, I invest more in leadership than almost anything else.
I’m really interested in a lot of things. Obviously I think having a solid business plan and being realistic about the prospects of the business are baseline. Having a realistic understanding of the competition in the market and the funding requirements is all baseline. I really look at, does the person have their ego under control?
Have they really managed themselves in such a way that they can handle the challenges that are going to come from growing a business? Do they really have a pretty good level of emotional intelligence that can work to attract people and grow the business and work well with others? Do they have a pretty good understanding of the fact that it really is about talent, not necessarily about product? Is it more than just lip service? Typically I invest, as I said, more in leadership than almost anything else.
Let’s do a deep dive into emotional intelligence, this EQ factor that not only makes you want to fit that particular culture but also attracts the right people. Can you give us your definition of emotional intelligence, and how have you developed such strong EQ yourself?
The assumption that I have good EQ is something I challenge myself on a lot. Because I have, like all of us, everybody has impulses. Sometimes it just feels good to speak out and say something, even though it doesn’t move the ball down the field. Self-regulation, I think is very important, a very important part of emotional intelligence. I can sit in a meeting and get bored and then all of a sudden I decide I’ll just throw something in a middle of the meeting to stir it up and make it more interesting and exciting for me. That is an emotional intelligence.
This self-regulation and impulse control is really important. I work with with CEOs a lot and I used to have a teenager. He’s now 20. It’s all about impulse control. This ability to manage your impulses in situations where you want to just act out is what is a big component of emotional intelligence. Self-regulation.
[Tweet “Angel Investor Criteria: High EQ requires impulse control.”]
Then this ability to read other people and understand what it is that they want and need. Not necessarily in a sales way of trying to just sell them so that you can meet their needs no matter what. It’s this capacity to intuit what is important to other people and be willing to focus and understand it and deal with it or address it is a big part of emotional intelligence. The studies on emotional intelligence have been very clear that if you want to develop it in your children or yourself, delayed gratification is really key.
This ability to not act immediately but to think about the long term. What are we trying to do or what are we trying to build? I think that’s true in a business or in a team, is thinking about what’s the bigger picture, the longer term, the delayed gratification. That’s a big part of emotional intelligence as well.
There’s really three elements: Impulse control, empathy, and delayed gratification.
[Tweet “Angel Investor Criteria: Impulse control, empathy, and delayed gratification.”]
And self-regulation.
Okay, got it.
If we go back to the research on emotional intelligence, it’s knowing yourself. Knowing your own motivation and being honest about what that’s all about, not deluding yourself.
And maybe not making decisions when you’re stressed out or tired or jet lagged or hungry or any that stuff, right?
Exactly.
It’s like, I need to take care of myself so that I can have some self-regulation. This delayed gratification stuff. We will get a reward when we do our homework, or we will get rewarded when we hit a certain sales goal if you’re leading a company, right?
Yeah. Or I want my way now, or I want this done instantly, whatever. Some of that, in times of crisis is important. But in general, it’s really managing yourself to think about what is the long term as well the short term.
[Tweet “Angel Investor Criteria: Think about what is the long term as well the short term.”]
Are you geographically agnostic or do you only like to invest in companies and founders that are near where you live?
I’m geographically agnostic. I live on both coasts so it doesn’t really matter to me because I’m all over the place.
How long do you typically know someone and what kind of due diligence do you, as an individual, put your founders through before you invest?
Typically three months, six months. I really like to get to know people and I like to be involved personally as well in the business, as an adviser.
You typically contribute more than just your money. It’s your contacts, your strategy, your insights. Because when you get leadership right, the growth takes off. That’s the big real takeaway.
Exactly, yeah.
I’m a good leader, but so what? It’s like, that’s everything because that’s the talent, that’s the team and when you have a motivated team that’s in sync … There’s such a huge cost of turnover, isn’t there, David?
Angel Investor Criteria: If you can really develop and keep your people and grow them, that’s the ideal state.
Absolutely. It’s just like the turnover customer. It’s so much easier to keep the customer than find a new one. The same thing is true of people. If you can really develop and keep your people and grow them, that’s the ideal state.
I would also say John, I think one of the hardest things about leadership too is dealing with performers who are averaged and well-intentioned and really willing to work hard but yet you know getting into the next level is going to require a different level of talent. Sometimes that’s very hard for leaders to phase into.
Let’s talk about that, because I have a lot of clients that have that very same challenge, specifically with salespeople not hitting their numbers. “They’re trying and I really like them. They’ve been successful in the past but they’re not consistent. I don’t know what to do to fix it.” Do you have any advice for that?
I think you got to step back and ask yourself, what’s going on here? Is it the context? Sometimes salespeople have a bad year for a lot of good reasons. Is it the person? Sometimes people are really functioning beyond their level of capability, that’s true. You have to honestly say this person’s capability to grow to another level of performance, we’re not going to get there. Honestly, that’s the big part of what you have to address.
Angel Investor Criteria: The other thing is you have to ask yourself, “Is it me as the leader? What am I doing to create the environment where this person is not performing?”
The other thing is you have to ask yourself, “Is it me as the leader? What am I doing to create the environment where this person is not performing?” Ask yourself that. I think you have to step back and think about it realistically. My default is to try to develop and grow the person. Is there something I can do to help this person grow? Is there an experience or is there a coach, a program, a challenge I can give them? Is there feedback? All these things can help grow a person and help them develop.
But at the end of the day, you have to cut your losses too. As an entrepreneur, you learn that. If I’m thinking about the good of the business and I’ve tried everything else, I got to cut my losses. In my experience, it’s often been not soon enough. I’ve often waited too long to take that step.
That’s great advice. Normally, I ask my guest to recommend books for the listeners. Besides obviously, Transitions at the Top, you have 11 other books, so I’m not going to even ask you to recommend anybody else’s books. Can you pick one or two of your other books besides Transitions at the Top that we could put in the show notes, that you can recommend to our listeners about running a small business and getting funded?
Why CEOs Fail: The 11 Behaviors That Can Derail Your Climb to the Top and How to Manage Them
Yeah, there’s one book that is sold, probably the best seller of all the books I’ve written. It’s called Why CEOs Fail. What this book discusses are the dark side of our personality. All of us, we have a dark side of our personality. Things we’re not proud of that we do when we’re stressed out or when we’re overworked or tired. It might come out in terms of being impatient or being melodramatic or sometimes being detail-focused.
This book describes these things and talks about what you can do as a leader, to manage your, what we call your derailers or your shadow side. The point is, when you know you get to be the CEO, you’re shadow casts a wide dark space over everybody. I used to work for the CEO of a company and we would ask his secretary, “What’s the weather report today?” She’d say, “It’s sunny. It’s raining. It’s cloudy.”
Because we knew, as the CEO, he was sometimes what we call his derailers would just take over. Why CEOs Fail talks about what you can do to manage those parts of your personality that can affect your business and your performance of your whole company, and what you can do about it.
That’s great. I would ask you, is there one particular thing, is it rest and is it a lot of these emotional intelligence that we talked about earlier as one of the ways to deal with it?
I think it’s asking people and staying open to the feedback that they give you.
Great.
In other words, what do you do that makes it challenging for other people to perform? One of the things I often tell my clients is get them together and ask them, “What are two or three things I can do to be a better leader?” and then leave the room.
Nice.
Let them work on it for 20 minutes and then come back and start a conversation about what are you doing that keeps them from being as productive as they need to be and how could you be more effective? Sometimes you get information you don’t normally have and you find out what’s in your shadow side.
It all goes to that culture you’re talking about, which is creating a safe space to let people do that.
Exactly. That’s exactly right. What I tell CEOs is the higher you go, your jokes get funnier, your insights get brighter, your ideas get smarter. It just happens magically. Overcoming that, you got to give people permission to tell you, “Here’s what I really think.”
Great. That’s a great one. Why CEO’s Fail in addition to Transitions at the Top. What’s the other one you want to share?
The other one I would say is the book called Head, Heart and Guts.
Great title.
Head, Heart and Guts: How the World’s Best Companies Develop Complete Leaders
What this means is as a leader, you’ve got to be smart. You got to have a strategy and a good sense of direction. You’ve got to have heart, which is what we’ve talked about, this emotional intelligence or this ability to connect with people and read them and relate to them and empathize. Then you have to have the guts to take the tough calls, to act with integrity, unyielding integrity sometimes. That takes guts. You have to have all three. If you think John, about the leaders you know, usually you can say they’re one of those three. They lead primarily with one of those three. Good leadership is having all three.
The guts to say no to bad clients, even though you might need the money. That’s the a tough decision in addition to letting go of somebody who’s not working out.
Yeah, or the guts to let somebody go who’s really performing but doesn’t live the values that you’re trying to create in your business.
Right, because then that sends a message to everybody else which is you can be a jerk if you bring in the numbers and that totally changes the culture.
Or the guts to not take business that doesn’t fit your strategy.
There you go. We don’t that, that’s not our specialty. You’ll just be miserable if you take the wrong client even if the money is good.
We need the revenue, let’s do it, but it’s not going to take us where we want to go as a company.
The long term vision, I love it. David, this has been great. How can people follow you? What is your Twitter handle and all that good stuff?
It’s just @daviddotlich. I’m on Twitter.
That’s easy. Obviously you have a great LinkedIn profile and they can find you that way. It’s been a pleasure having you on the show. I love your insights about what makes a good leader, emotional intelligence, and most of all, what you look for when you listen to a pitch is how much does a person focus on talent instead of the product. Thanks again.
Thank you John. It’s been fun. Take care.
Links Mentioned
J Robinett Enterprises
John Livesay Funding Strategist
@DavidDotlich on Twitter
Why CEOs Fail by David Dotlich
Head, Heart & Guts by David Dotlich
Transitions at the Top by David Dotlich
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Journey to Entrepreneurship – Interview with Kurt Theobald
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Episode Summary
Kurt Theobald is the CEO of Classy Llama, a full-service ecommerce agency. He has failed countless times, but has always gotten back up to try again. Failure doesn’t define you and the journey to entrepreneurship is often a journey of self-discovery as well. Kurt discusses company culture, the importance of people, and so much more on this episode!
Journey to Entrepreneurship – Interview with Kurt Theobald
Hi. Welcome to The Successful Pitch podcast. Today’s guest is Kurt Theobald. Kurt is the CEO and co-founder of Classy Llama, an Inc 5000 eCommerce agency that has already done $5 million in revenue. I found out about him from a wonderful blog he did on the three points of wisdom. He said, “Entrepreneurs should create shiny new things. The edgier the better.” Reality disagrees. Kurt is going to tell us all about that. Kurt, welcome to the show.
Thanks a lot, John. I’m glad to be here.
Tell me about what you’ve learned about valuable work often lies hidden, that you have to dig deeper. You said you’ve cut your teeth on ten previous business, all of which died. You said you went too far. What do you mean by that? What happened that you’ve learned from ten things not working that’s made, now you are so successful?
Journey to entrepreneurship: I’m just going to do something that’s not as cool, I’m going to do it really, really well.
I think there is a culture in the entrepreneurship circles, there’s this culture that drives towards you’ve got to do the next big thing. I tried to do the next big thing so many times. I realized that sometimes, doing something that’s not cool but it’s in a niche where there’s a real need, sometimes that can work a lot better and a lot faster than pursuing the next big thing.
That’s where I got my traction, is I’m just going to do something that’s not as cool, I’m going to do it really, really well. That works out pretty well because a lot of people that don’t do things really, really well in those uncool niches. That’s worked really well for us.
Talk about what’s considered a cool thing versus an uncool thing.
The cool things are the things that will publicly change the way that people do things. A lot of times it’s going to be consumer facing. There’s this whole market where you’re serving businesses that people don’t really see. That’s just not cool because nobody hears or knows about it. When you’re doing something that’s going to change the behavior of the consumer, it’s going to reshape the world in some way, these are the big things that people want to do.
They want to change the nature of energy or the way that people buy things or a big new way to play video games. Virtual reality, how to apply that? There’s all these big things that are being developed that honestly, it probably has lots to do with how much they hit the news, honestly. The more they hit the news, the cooler they are.
Your willingness to do “the uncool things” sometimes require some sacrifices. Tell us about what you and your partner, Erik, had to do as far as just the office space? You have to be almost like MacGyver sometimes.
That is true. It’s probably true of both cool and uncool things. It may just be a common part of successful entrepreneurship. It’s the willingness to go through difficult circumstances. Things like you hear a lot of entrepreneurs started in a garage. We started in a garage. It’s a common thing.
Journey to entrepreneurship: It’s the willingness to go through difficult circumstances. You hear a lot of entrepreneurs started in a garage. We started in a garage.
I remember in the early days with our business, we had a two-car garage in my house that we were using as an office. In the winters, we have this thin 6 mil plastic hanging up by the garage door to try to create some barrier for heat. I had a wood fire stove in the adjacent room and that was all we have for heat. It got really cold in the winter. The guys are trying to code and their hands are shaking because it’s so cold.
In the summers, we took a panel out of the two-car garage door and put three quarters of that panel, we put in this particle board and then put an AC unit in there to try to keep it cool enough, which also didn’t worked very well. We we’re too hot in summers, too cold in the winters. I guess it’s part of being an entrepreneur and cutting your costs to the quick. You just bear through it because you believe in what you’re doing.
You really have to have tenacity and grit and passion to survive those kinds of things, otherwise you’re like, “It’s not worth it.” You have to believe in what you’re doing and that you really want to work for yourself and have a big why of why you’re doing this. Even if it’s “uncool”. I just think that’s so valuable. Congratulations on exceeding $5 million. So few startups ever get to $1 million, let alone 5. What is it that you could share as the motivation factor beyond just making money that makes you so successful, that makes your clients at Classy Llama want to keep working with you?
I think that from the very beginning, you mentioned that very important why, I actually started a professional journal back in 2004 towards the end of the year. That’s now about twelve years ago or eleven and a half years ago. At the very beginning of that journal, I expressed that who I am as an entrepreneur, it’s part of my DNA.
[Tweet “To do anything other than be an entrepreneur is to betray who I am.”]
To do anything other than be an entrepreneur or to, when I fail, when I fall down, to not get back up and keep going is to betray who I am, and that I will not do. That powerful why and that foundation, it really makes it to where you’ve made, as a friend of mine says, a diffision. A diffision means, like incision is to cut, like an incision as to cut into. Diffision is to cut away. You’re cutting away all other options and you have one path, and you have to stay in that path.
I love that.
Journey to entrepreneurship: You have to cut away all the other options so that you really only do have one path to keep going.
I made a diffision according to who I am and I have to stay on that path because I’ve cut away all other options. It’s like scuttling the ship from the, I think it was Cortez or whatever, that scuttled the boats. Now, they only have one way to go. They can’t go back, they had to go forward. That’s so important because there’s so much pain involved with entrepreneurship that you have to cut away all the other options so that you really only do have one path to keep going. Because you never would have done this if you knew how difficult it was going to be. It’s just important to have that frame of mind. This is the only way to go.
It’s so valuable. What you said there, if you don’t come back from failure, you’re betraying who you really are. Failure might be something that happens but it doesn’t define you and it certainly doesn’t stop you from trying again.
I think it’s very important to clarify that who I am isn’t necessarily who’s someone else is. My walking in that was appropriate, where someone else who, they’re more of a supporter or they come alongside, they’re more consultative, whatever it is. Different people have different strengths. If you put someone who’s not an entrepreneur and they go, “I want to be the American entrepreneur because of what other people have said about me, rather than who I really am,” it can really get them in a mess.
[Tweet “Journey to entrepreneurship: Different people have different strengths.”]
This whole thing you talked about is, the journey of entrepreneurship is really a journey of self-discovery, which I think is so important because whether you’re pitching yourself to a client or an investor, they’re buying you much more so than the idea or your skills, don’t you think?
Especially in an early stage of a business, they’re investing in you, not this idea. The difficult thing about business is not getting a good idea. There’s lots of people that have good ideas. The difficult thing is executing that idea and bring it to fruition and making the smart choices and being able to receive good feedback and not be too proud to receive the wisdom from others and have the fortitude to endure through the pain that is going to be required to get to the finish line.
Journey to entrepreneurship: Have the fortitude to endure because it almost always takes longer than you expect it will for it to be successful.
Because it almost always takes longer than you expect it will for it to be successful. You hear about these huge successes that happened overnight. Usually, there’s a long story before those successes. Secondly, those are super rare even if they do happen. You got to invest in people that are going to be able to endure, going to have humility to receive quality feedback and have the wisdom themselves to be able to guide an idea to quality fruition.
The willingness to be coachable and not think you have all the answers and not even ask for help is so important to realize that you don’t have to know everything and you can use your resources and your network to get insights and give you a different perspective. Because we can become so myopic on thinking, we only see one way out of this. We always have other moves. Let’s talk about your big point about be careful who you accept wisdom from and how you choose your mentors and advisers. Not just by how successful they’ve been, but are they a cultural fit with your philosophies. Can you speak to that?
Something that I’ve learned by just interacted with different people, and there’s a lot of successful people out there, according to the world standards of what success is. A lot of people with a lot of money out there. But, that doesn’t necessarily mean you want to learn from them how to become wealthy. A lot of people say that’s the objective of entrepreneurship, is I want a lot of money.
The challenge is the way you get that money in the end will determine the quality of your life in all other aspects. If you’re learning from someone who has a bunch of money, has been divorced three times, works 80 hours a week and has for the past 30 years, is that the way you want your life to look? Is that what kind of money you want to have?
[Tweet “Journey to entrepreneurship: Be careful who you take wisdom and money from.”]
Because money can own you or you can own money. If you take wisdom from those who have learned how to become the slave to money and they have a lot of it but they’re still a slave to it, that’s no life to live. Just look to the advisers that have a life that looks like the life that you actually want to have. Not just in the sum of money that they have or the make and model of their car. Look at his family, look at their relationships, look for the deeper things in their life because those are the things that really has staying power.
I love that. That’s so important, because otherwise you’ll burn out. If you don’t have a balance going on and a reason to have some other life outside of what your business is, people think, “I’ll just put that all in the back burner and they’ll still be there when I finally become rich and successful and then I’ll be happy.” You have to figure out a way to be happy during this whole process.
I think what ends up happening is they say, “Once I’m rich, then I can take …” I think what happens is that other parts of them atrophy. By the time they actually get rich, that’s the slavery, that’s all they have. Suddenly their lives are about building and growing. As Dr. Seuss says, the biggering and biggering and biggering. That’s what it’s all about at that point and they’ve lost the context, they’ve lost the sensitivity to the other things that are so much richer in life.
As you get more and more successful in this success that you now have, how do you find the right people to join your team that have this mindset?
[Tweet “Journey to entrepreneurship: Right experience, soft skills, and cultural alignment.”]
It adds a third variable in any interaction when I’m evaluating people for the team. They have to have the right experience, they have to have the right soft skills. The third thing they have to have is the right cultural alignment. That’s really difficult to find all three things.
Let’s take a little deep dive into each one. Obviously, the experience is pretty obvious. You need somebody to be a creative director or know technical stuff about eCommerce since that’s what you do for people and you want them to prove that they know how to do that. Tell us what you mean by soft skills, is that emotional intelligence?
Journey to entrepreneurship: There’s things that you learn through osmosis and through relationship and culture, you learn those soft skills.
By soft skills, I mean things like their ability to communicate effectively, to write things down in a way that’s coherent. Maybe this extends somewhat from a culture, but just to be able to like be generally responsible for showing up on time and showing up in meetings when they say they’re going to and scheduling their time. Just some fundamentals life skills, time management, communication, those kinds of things that you don’t go to necessarily a class to learn them. There’s things that you learn through osmosis and through relationship and whatever the culture that’s around you, you learn those soft skills.
Let’s talk a little side note, side road there because I think what you said is so interesting. Just about the basics of being on time. I had another guest who wrote a book about managing millennials. That’s anywhere between 16 and 36 at the moment. Some of the baby boomers are having so much trouble managing millennials because they have a different mindset of what they think about work.
If you don’t tell someone what your expectations are that they show up on time, then they’re going to think it’s loosy goosy. Then you can’t get mad at them if you haven’t been very clear at the beginning, “This is what we need from you.” Do you have any insights as to how important it is to set the tone and expectations right from the get-go or even before you hire someone to make sure that’s a fit?
That’s actually really important. I feel like when you’re in the interview process, you’re not just evaluating whether they are right for the team. You’re actually setting context. You’re setting the table for what and that the foundation for what it will be like, provided they actually do get selected and join the team.
Setting those early expectations around, “We expect you to be personally responsible.” That’s like tying your shoes in our organization. It’s a fundamental. You got to tie your shoes before you run the race. Just being able to manage your own time, to communicate effectively, these are the tying the shoe things in our organization.
[Tweet “Journey to entrepreneurship: Tie your shoes before you run the race.”]
I love that. You have to tie your own shoes before you run the race. We’re going to tweet that out. That’s great. Now, let’s talk about your culture alignment. How much time did you spend defining what the culture was so that you could decide what you wanted to have and what makes your culture unique?
The culture, my understanding of the culture and what I want to design and create into the culture, has been an evolution over a number of years. Early on, I really felt like I have this vision for what I want the culture to look like. I’ve had a lot of jobs and I’ve experienced a lot of different cultures. I didn’t like any of them that I experienced, there’s a lot of things I didn’t like. I had this thing I wanted to create. I built out a presentation and I built out a vision for it. There’s a lot of good to that.
I was able to articulate it and express it. It attracted people. However, what I learned through experience is that you can’t just write down the culture you want to have but if the people in your organization that make the culture what it actually is. You can write it down and that’s what it theoretically is.
Journey to entrepreneurship: Your culture actually is the sum of the interweaving of the thread of all the people in your organization and what they make it.
What your culture actually is, is a product of the sum of the interweaving of the thread of all the people in your organization and what they make it. You can still design a culture. “This is the culture I want,” but then what you have to do is you have to go out and you got to find people that don’t just look at the cultural state and go, “I like that. That’s great.” But rather, you find out, are these the kinds of people that are going to contribute into this culture? Do they bring this culture to the organization?
Because that is the only way to really make it happen. You can guide a little bit here and there, but ultimately, the people you bring together have to make the culture what it is. It’s really all about that culture alignment, making sure you don’t just like the culture but you align with it. You’re going to be a contributor to the culture. I tell people, I may be in a position where I’m the last line of defense for the culture. But all of us, all of us need to be culture bastions. We are the propagators of the culture, every one of us.
[Tweet “Journey to entrepreneurship: We are the propagators of the culture.”]
Wow. That’s really walking your talk, isn’t it? Giving a people a sense that the tapestry needs all of the threads to make it work. When you make people feel like they’re part of something, acknowledged and needed, then you get their passion to work in all kinds of situations. Because they love that. That’s what people are looking for much more than just a paycheck, is a sense of acknowledgement, appreciation and contributing and making a difference.
I think, if you can create a culture where that is the thing that people want to come to work for, it gives them a reason to get up in the morning, gives them a personal sense of pursuance, you’ve really done something well. My suspicion is that’s the reason you’ve been so successful now, been able to achieve the revenue you have.
[Tweet “Journey to entrepreneurship: Revenue is a by-product of what really matters.”]
I agree. Revenue and all, these are reflections. They’re by-products of what really matters. To speak to what you’re saying, all that I have done is I really try to be careful to honor each person that I’ve interviewed. To evaluate, is this going to be good for them to come into this environment? Are they going to be able to contribute to this environment and how are they going to thrive in this environment?
I want each person that comes into the organization to be able to be fully themselves, to not have to check part of themselves out of the door when they come in. Speaking of millennials, I think this is so important to capturing the hearts of millennials. I look at the millennial generation and there are things I really appreciate and things that I think are things that they struggle with. That’s true with any generation.
Journey to entrepreneurship: Millennials really thrive on and demand authenticity and they thrive on being independent.
One of the things I love about millennials is that they really thrive on and demand authenticity and they thrive on being independent in their thinking and really valuing, “I want to be able to express myself and be who I am.” I love that.
I want to make sure to protect that, because when you do that and you make sure that you got the right people in your organization that they can just be themselves and it’s going to work, suddenly you no longer have to draw passion out of them. You don’t have to draw it out of them. It will naturally organically come from them because they’re just being who they are. You don’t want to force it anymore, you don’t have to draw it anymore. It comes from their core. It makes everything a lot simpler.
I’ve never heard anybody express it quite like that. If you have somebody who’s just “phoning it in” and doesn’t get to express themselves and has to feel like they’re a robot and has to tone down their personality and their vision and their comments because they’re not appreciated or wanted, then there’s no way there you’re going to be passionate about your vision.
If you encourage them to be authentic so you don’t have to be one person at work and one person off work and just looking at the clock until you can get off work to be yourself, then they’re passionate about their whole life and passionate about their day. They’re probably not going to leave at the next offer that’s just slightly more money because they’re motivated by more than money.
I can speak from experience, watching this happen. First of all, the retention level at Classy Llama, and now Nucleus Commerce, it’s the second company I started, is just phenomenal. People stay. I really believe it’s because they are able to be fully themselves here. The second thing is, we haven’t compromised on our team growth.
Journey to entrepreneurship: When there’s an opportunity to grow, we don’t get loose on our standards in order to take advantage of the growth opportunity.
When there’s an opportunity to grow, we don’t get loose on our standards in order to take advantage of the growth opportunity. Rather we limit our growth to how quickly we can find quality people. This is wisdom you can find from Jim Collins and others.
I’ve seen the benefits of it in than people want to stay because they know that they’re being honored in who else is coming into the environment. They get to work with great people and they get to be fully themselves in the space that they’re in. That makes a space that they want to stay in.
One of the big costs that’s hidden and really doesn’t get itemized is the cost of attrition and turnover. It’s hard to put a dollar amount on it. When you have to start from scratch and retrain somebody and get them to start developing relationships with the clients from the get-go, that’s a big hit on your productivity, which affects your bottom line. If you can attract and retain good people, that is gold right there. That’s a big, big part of being successful, financially, emotionally, every way.
I think that a lot of times, there’s too limited a view on the compounding effect where you can look at money and you say, “If I got a 5% return on money every year, after 20 years, it’s way bigger than 100%,” which is 5×20. It’s true of time. A lot of people don’t realize that time is a resource that compounds. How you invest your time now and the return you get now is something that can compound.
The other thing is people. The investment you make in people and in building that team. If they stay with you and the team stays together, it’s like a sports team. The longer a sports team stays together and stays united, the more effective they’re going to get because they just start learning each other.
[Tweet “Journey to entrepreneurship: Invest in people and in building your team.”]
They learn the game better, yes. But they also learn each other better and that’s strength of the fabric, as we’re calling it, grows and you become more effective together in what you’re doing as well as more effective as a team. I can’t underscore how powerful that is.
I watched these private equity companies come in and they buy up other companies, or even public companies, whatever. They come in and they buy in, they buy these companies and they insert, they’re impose their culture on them. I see all of the good people scatter. People are falling off left and right, they’re quitting. I’m going, that company that bought that organization doesn’t understand that the most valuable thing in that company is leaving, and it’s the people.
Let’s talk about also the importance of saying no to the wrong client as well. You can’t just take any client even if you need the money because that can be a nightmare as well. A drain on your time, your employees’ morale and end up maybe even costing you money. Have you had that experience?
Journey to entrepreneurship: You have to draw a line and say, “These are the ones we’ll take and these are the ones that we won’t.”
Yeah, many times. Honestly, that flows from that same thing of we have standards and we stick to our standards. Our culture standards and who we work with as a client early. Especially early, it’s just so painful because you’ve got only so many opportunities and you need the revenue. You have to draw a line somewhere though and say, “These are the ones we’ll take and these are the ones that we won’t.” I think I can say confidently that in my business, I’ve never turned away a client and regretted it. I have many times accepted a client and regretted it.
There we go. There’s the line, everybody. You never regret saying no but you’ve often … We can say yes and regret it. It’s very much like dating too. I think people respect you if you’re not desperate and say, “Look, this is who we work with. This is who we’re for, this is who we’re not for and we’re not so desperate that we’re just going to take anybody’s money.” It’s not a dictatorship. When you work with us, it’s a collaborative situation. We may not be a good fit for you. It’s not just a one way street of you deciding whether you’re going to hire us or not.
I think a lot of it has to do with the willingness, where people want success before it’s time. When they’re engage with these different clients, they’re saying, “I can accept these fewer clients and I can live on a really lean budget and rough it for a little bit longer in order to be principled in who I am expecting as clients.” Or, “I can say yes to more and try to grab that success before it’s time.” It’s just that lure of impatience. Let success happen when it’s time. You focus on living by the right principles and the right standards and doing things the right way and success will come when it’s time. You just do the hard work, success will come when it’s time.
[Tweet “Journey to entrepreneurship: Do the hard work. Success comes when it’s time.”]
Nice. Let’s talk about who your ideal clients are, both for Classy Llama and Nucleus.
Classy Llama typically works with companies that are generating, let’s just say $1 to $50 million in online sales. They’re looking for a partner relationship and they’re focused on or they’re needing help or wanting to build on the Magento platforms. We’re focused on that piece of technology, that’s a key niche for us. We’ve been building on the Magento platform since it came out in early 2008. We have focused on it, we pushed everything else off our plate and focused exclusively on it since being gold partners with Magento, which is the highest level of partnership you can have.
Anyway, we’re deeply invested in Magento, we know it very well. We look to help. It’s established eCommerce companies or well-funded, sometimes well-funded startups as well, get going in their eCommerce businesses on the Magento platform. The Nucleus Commerce actually serves the same market. It just does it in a different way. We sell software extensions that help people specifically that are getting on Magento 2.0, which just came out recently. We’re one of the early providers of additional software that enhances the functionality and offering of the Magento 2.0 platform.
Fantastic. I love how much symbiotic relationship there is there, that the extension of the second company totally fits the knowledge you learn from the first. Is there any book that you recommend for our listeners to read about life or business that you found specifically inspirational or helpful?
Good to Great: Why Some Companies Make the Leap And Others Don’t
Two books. One is Good to Great by Jim Collins. It’s got some really great fundamentals there. What I love about it is it’s all data driven. There’s a lot of things that are data driven. Like, “That’s data driven but it doesn’t really smack of true because you can make any data look like anything.” I read what he found and I feel like this was a true blue, data driven exploration because it’s found a lot of unexpected, surprising truth that isn’t popular.
When I see something that’s not popular, and I see the data behind of them like, “Okay, that’s not popular and I know it’s true, and so I trust it.” I really believe they did good work with the Good to Great book.
I would actually offer up for young entrepreneurs that are just getting started, I’d offer up a book that I wrote called Finding Truth at the Bottom. It really outlines three keys to being effective, to being productive. It also really tries to combat certain common paradigms that I think are really confused about what the expectations are, around what it looks like to be an entrepreneur, to run a business.
Finding Truth At the Bottom (Leadership In the Round, Vol. 1)
I just think there’s some common held lies about what that means. This book really tries to combat that. It’s a simple read. It’s relatively short. I know a lot of people have really gotten a lot a value out of it.
Fantastic. How can people follow you on social media? What’s your Twitter handle, all that good stuff?
My Twitter handle is easy. It’s just @KurtTheobald. I’m on LinkedIn, /in/KTheobald. Those are the two key interface points on the business front that I use.
Fantastic. Kurt, it’s been a pleasure having you share your wisdom of how you’ve been so successful. Not just in revenue, but creating a culture that attracts and retains the people who not only share your vision, but contribute to it.
I appreciate the opportunity, John. I hope I helps a lot of people.
Fantastic. Thanks again.
Thank you. Bye.
Links Mentioned
J Robinett Enterprises
John Livesay Funding Strategist
Classy Llama Website
Nucleus Commerce Website
@kurttheobaldon on Twitter
Kurt Theobald on Linkedin
Finding Truth At the Bottom by Kurt Theobald
Good to Great by Jim Collins
Crack The Funding Code!
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